Application for Declarations in relation to s 691C of the Industrial Relations Act 1999 [2014] QIRC 115

QUEENSLAND INDUSTRIAL RELATIONS COMMISSION CITATION: Re: Application for Declarations in relation to s 691C of the Industrial Relations Act 1999 [2014] QIRC 115 PARTIES: Queensland Urban Utilities The Electrical Trades Union of Employees, Queensland Automotive, Metals, Engineering, Printing and Kindred Industries Industrial Union of Employees Queensland Construction, Forestry, Mining & Energy, Industrial Union of Employees Plumbers and Gasfitters Employees Union Queensland, Union of Employees Queensland Services, Industrial Union of Employees The Association of Professional Engineers, Scientists and Managers, Australia, Queensland Branch, Union of Employees The Australian Workers Union of Employees, Queensland Together Queensland, Industrial Union of Employees Queensland Council of Unions CASE NO: B/2014/31 PROCEEDING: Application for Declarations DELIVERED ON: 23 July 2014 HEARING DATE: 23 July 2014 MEMBER: Deputy President O'Connor Deputy President Kaufman Commissioner Neate -- 1 of 6 -- 2 ORDERS : We make the following declarations:  that the preamble to cl.7.3, to the extent that it commits QUU to no forced redundancies is of no effect;  that the words: If the employee does not accept a voluntary redundancy offer, then the employee will be placed in any role in accordance with this Agreement, subject to the provisions for income maintenance" appearing at the end of cl.7.3.2 are of no effect;  that cll.7.3.2, 7.3.3, 7.3.4 and 7.3.5 do not apply in circumstances where QUU proposes to forcibly retrench an employees;  that QUU is entitled to forcibly retrench employees;  that in the event of forced retrenchment by QUU, employees covered by the agreement are entitled to notice and redundancy pay as provided by: 1. Notice in accordance with Part 3 of Chapter 3 of the Industrial Relations Act 1999; and 2. Redundancy pay in accordance with Part 4 Division 1AA of Chapter 3 of the Industrial Relations Act 1999. CATCHWORDS: INDUSTRIAL LAW - APPLICATION FOR DECLARATIONS - forced redundancy - employment security provision - organisational change provision - whether the provision preventing forced redundancy is of no effect CASES: Industrial Relations Act 1999 s 274A, s 691C, s 691C(1)(b), s 691C(1)(c), s 691C(2) APPEARANCES: Mr J. Wells, of Allens Linklaters Lawyers for Queensland Urban Utilities Mr N. Henderson, for Queensland Services, Industrial Union of Employees, The Electrical Trades Union of Employees, Queensland Council of Unions, Automotive, Metals, Engineering, Printing and Kindred Industries Industrial Union of Employees, Construction, Forestry, Mining & Energy, Industrial Union of Employees, The -- 2 of 6 -- 3 Association of Professional Engineers, Scientists and Managers, Australia, Queensland Branch, Union of Employees Mr B. Watson, Australian Workers Union Reasons for Decision [1] Queensland Urban Utilities ("QUU") has applied pursuant to s.274A of the Industrial Relations Act 1999 ("the Act") for declarations seeking to have parts of cl.7.3 of the Queensland Urban Utilities (QUU) Certified Agreement 2011 declared of no effect. It seeks:  A declaration that the preamble to clause 7.3 of the Queensland Urban Utilities (QUU) Certified Agreement 2011, which commits Queensland Urban Utilities to 'no forced redundancies' is of no effect as a provision prescribed by section 691C of the Industrial Relations Act 1999;  A declaration that Queensland Urban Utilities may forcibly retrench an employee;  A declaration that clauses 7.3.2, 7.3.3, 7.3.4, and 7.3.5 of the Queensland Urban Utilities (QUU) Certified Agreement 2011 do not apply in circumstances where Queensland Urban Utilities proposes to forcibly retrench an employee;  Alternatively to the declaration sought in Para 3 above, a declaration that clauses 7.3.2, 7.3.3, 7.3.4, and 7.3.5 of the Queensland Urban Utilities (QUU) – Certified Agreement 2011 are of no effect as provisions prescribed by s 691C of the Industrial Relations Act 1999;  A declaration that, in the event of forced retrenchment by Queensland Urban Utilities, employees covered by the Queensland Urban Utilities (QUU) – Certified Agreement 2011 are entitled to: 1. Notice in accordance with Part 3 of Chapter 3 of the Industrial Relations Act 1999; and 2. Redundancy pay in accordance with Part 4 Division 1AA of Chapter 3 of the Industrial Relations Act 1999. [2] The application is made on the basis that cl.7.3, or at least parts of it, is an employment security provision within s.691C(1)(b) of the Act or, alternatively an organisational change provision within s.691C(1)(c) and are therefore of no effect. [3] Cl.7 deals with Organisational Change and cl.7.1 is headed "Organisational change process". Cl.7.2 deals with retraining and placement. [4] Cl.7.3 is headed "Redundancy" and its preamble reads: "7.3 Redundancy QUU is committed to supporting employees who are affected by organisational change. QUU prefers to retrain and place employees made surplus to requirements into the areas where they can continue to provide value for money and make a positive contribution. In order to -- 3 of 6 -- 4 support this preference, QUU commits to no forced retrenchments during the life of this Agreement." This procedure provides options to manage situations in which these aims may not be achievable or may prove unsuccessful, and/or may not be desired by the employees involved. This procedure demonstrates respect for people by assisting QUU employees who are affected by technological or organisational change to leave the organisation in a fair and reasonable manner. This process applies only to permanent employees. … Voluntary redundancy may apply where an employee has become surplus to requirements as a result of new technologies being introduced and/or changes to business or operational requirements, and does not have required skills or capabilities or the capacity to retrain within a reasonable time." [5] Put simply, QUU contends that the words: "QUU commits to no forced retrenchment …" mean what they say. They prevent QUU making any of its employees covered by the agreement redundant against the will of the employee concerned. [6] We accept that a provision in a certified agreement that prevents an employer from retrenching an employee against the employees will is an employment security provision within the meaning of that expression as defined in s 691C(2). [7] For the unions opposing the application it was put that, read contextually, there is no prohibition against QUU compulsorily retrenching an employee once the processes set out in the clause have been exhausted. [8] They point to the second paragraph in the preamble and its reference to the procedure providing options "to manage situations in which these aims may not be achievable or may prove unsuccessful, and/or may not be desired by the employees involved." [9] We do not accept that the aims extend beyond retraining and placing employees in other areas of QUU. In particular, we reject the unions' submission that QUU's commitment to no forced retrenchments is an aim. Clause 7.3.2 makes it clear beyond doubt that if QUU does not offer, or an employee does not accept, voluntary retrenchment that the employee will be placed elsewhere in the organisation and his or her income will be maintained. [10] The remainder of cl.7.3 deals with how voluntary redundancies are to be implemented and the processes associated therewith. A perusal of the headings demonstrates that. [11] The entire structure of cl.7.3 presupposes that the only form of retrenchment that can occur is of a voluntary nature. It does not leave open the compulsory retrenchment -- 4 of 6 -- 5 of employees. In our opinion cl.7.3 covers the field on the topic of retrenchment. In the context of the agreement as a whole, and particularly cl.7, the express conferral of the right to offer voluntary redundancies, excludes the right to forcibly retrench employees. There is no scope for QUU to implement forced retrenchments. [12] However, QUU's primary submission is that we make a declaration that the preamble to cl.7.3, to the extent that it commits QUU to no forced redundancies is of no effect and that cll.7.3.2, 7.3.3, 7.3.4 and 7.3.5 do not apply in circumstances where QUU proposes to forcibly retrench an employees. QUU also seeks a declaration that that it is entitled to forcibly retrench employees. [13] Its alternative submission is that the abovementioned clauses be declared to be of no effect. [14] It also seeks a declaration that in the event of forced retrenchment by QUU, employees covered by the agreement are entitled to notice and redundancy pay as provided by the Act. [15] Given that cl 7.3.3 deals comprehensively with voluntary redundancy we are disinclined to interfere with the agreement reached by the parties any further than is absolutely necessary. [16] This end could be achieved by the making of declarations as set out in [13] above. It would also be necessary to declare that the words: "If the employee does not accept a voluntary redundancy offer, then the employee will be placed in any role in accordance with this Agreement, subject to the provisions for income maintenance" appearing at the end of cl.7.3.2 are of no effect. [17] QUU submitted that the requirement that up to six months may elapse after an employee is offered retraining and placement, before the employee must be offered voluntary redundancy, is also an employment security provision and thus of no effect. We disagree. QUU does not submit that the voluntary redundancy process is of no effect. That it has agreed to a process that takes some months does not render that process an employment security provision. It is not a provision about job security. [18] Having regard to our conclusions it is not necessary to consider whether any parts of cl.7 are an organisational change provision and of no effect for that reason. Having regard to the definition of that expression in s 691C(2) of the Act, we doubt that any part of cl.7 offends the Act. [19] We make the following declarations:  that the preamble to cl.7.3, to the extent that it commits QUU to no forced redundancies is of no effect;  that the words: If the employee does not accept a voluntary redundancy offer, then the employee will be placed in any role in accordance with this Agreement, subject to the provisions for income maintenance" appearing at the end of cl.7.3.2 are of no effect  that cll.7.3.2, 7.3.3, 7.3.4 and 7.3.5 do not apply in circumstances where QUU proposes to forcibly retrench an employees; -- 5 of 6 -- 6  that QUU is entitled to forcibly retrench employees;  that in the event of forced retrenchment by QUU, employees covered by the agreement are entitled to notice and redundancy pay as provided by: 1. Notice in accordance with Part 3 of Chapter 3 of the Industrial Relations Act 1999; and 2. Redundancy pay in accordance with Part 4 Division 1AA of Chapter 3 of the Industrial Relations Act 1999. -- 6 of 6 --