Industrial Relations Commission of New South Wales CITATION: Payne v NSW Roads and Traffic Authority [2007] NSWIRComm 256 APPLICANT PARTIES: Geoffrey John Payne RESPONDENT NSW Roads and Traffic Authority FILE NUMBER(S): IRC 361 of 2007 CORAM: Harrison DP CATCHWORDS: Application for relief from unfair dismissal - jurisdiction - public sector employee - employment governed by matrix of legislation and statutorily endorsed policy - demotion for disciplinary purpose for period of one year - all other conditions of employment continue. Held - procedures correctly applied by employer - demotion allowed by contract of employment - demotion not dismissal - applicant not dismissed from employment - application dismissed for want of jurisdiction. Industrial Relations Act 1996 Transport Administration Act 1988 LEGISLATION CITED: Public Sector Employment Legislation Amendment Act 2006 Public Sector Employment and Management Act 2002 Government and Related Employees Appeal Tribunal Act 1980 Antonic and Roads and Traffic Authority [2005] NSWIRComm 344 Advertiser Newspapers Pty Ltd v Industrial Relations Commission of South Australia (1999) 90 IR 211 CASES CITED: Charlton v Eastern Australian Airlines Pty Ltd (2006) 154 IR 239 Clark v Pittwater RSL Club Limited (1998) 84 IR 309 AWARD: Crown Employees (Roads and Traffic Authority of New South Wales - Wages Staff) Award 2005 HEARING DATES: 16/8/07 DATE OF JUDGMENT: 16 October 2007 APPLICANT Counsel Mr J Wormington LEGAL REPRESENTATIVES: RESPONDENT Counsel Mr R Warren JUDGMENT: - 15 - INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES CORAM: HARRISON DP Tuesday, 16 October 2007 Matter No IRC 361 of 2007 GEOFFREY JOHN PAYNE AND ROADS AND TRAFFIC AUTHORITY Application by Geoffrey John Payne re unfair dismissal pursuant to section 84 of the Industrial Relations Act 1996 DECISION RE JURISDICTION [2007] NSWIRComm 256 1 Mr Geoffrey John Payne, the Applicant in these proceedings, seeks the intervention of the Commission as a consequence of disciplinary action taken by his employer, the NSW Roads and Traffic Authority (RTA). 2 Conciliation proceedings established that the RTA contested the capacity of Mr Payne to bring an application pursuant to s 84 of the Industrial Relations Act 1996 ("the IR Act"). 3 Directions were issued to effect arbitration proceedings on the question of jurisdiction. The first proceedings were adjourned to allow the parties to provide evidence in order that the issue of jurisdiction be considered in the appropriate factual context. 4 Mr Warren of Counsel, appearing on behalf of the RTA, tendered affidavits from Ms E Cvetkovic, Manager Workplace Conduct, RTA; Mr P Collins, Director, Regional Operations and Engineering Services, RTA; and Mr D Coates, Senior Industrial Officer, RTA. 5 Mr Wormington of Counsel, tendered the affidavit of Mr Payne. 6 No witnesses were required for cross examination. The Evidence 7 Mr Payne has been employed by the RTA from early 1989. 8 The RTA is a statutory corporation constituted by s 46 of the Transport Administration Act 1988. 9 In March 2006 the Public Sector Employment Legislation Amendment Act 2006 ("the PSELA Act") effected transfer of employees of a number of statutory corporations, including those of the RTA, to employment by the Government of New South Wales in service of the Crown. 10 The effect of this legislation continues a delegated authority to the Chief Executive Officer of the RTA to: · "Employ staff" by virtue of Chapter 1A subsection 4B(1) of the Public Sector Employment and Management Act 2002 ("the PSEM Act"); and · "Fix the salary, wages and conditions of employment of staff in so far as they are not fixed by or under any other law" by virtue of Chapter 1A section 4E(1) of the PSEM Act. 11 Mr Payne's employment is regulated by the Crown Employees (Roads and Traffic Authority of New South Wales - Wages Staff) Award 2005 357 IG 641 ("the Award"). The Award does not expressly provide for disciplinary action. 12 On 9 March 2007 Mr Payne was demoted from the position of Carpenter Grade 2 to Road Worker Grade 3. This demotion was effected as a disciplinary action said by the employer to be a consequence of Mr Payne engaging in unacceptable, harassing and humiliating behaviour towards another staff member. 13 Mr Payne denies the allegations. 14 The incident giving rise to Mr Payne's demotion was found by the RTA to have been witnessed and condoned by his then supervisor, Mr Mark Richard Phillips. Mr Phillips was demoted from the position of Carpenter Team Leader to Carpenter Grade 3 for a period of two years. 15 Mr Phillips is a member of the Australian Workers' Union, New South Wales (AWU) which notified a dispute pursuant to s 130 of the IR Act in accordance with Cl 8.7 Grievance Resolution and Dispute Settlement of the Award. The notification was subject to conciliation by Commissioner Stanton in Matter No IRC 156 of 2007, which resulted in an alteration of the penalty imposed from demotion for a period of two years to demotion for a period of six months in settlement of those proceedings. 16 Mr Payne was not party to the proceedings before the Commissioner, however, representations were made on his behalf direct to the RTA by Turnbull Hill Lawyers, acting on his behalf at that time. 17 The evidence is that, in the process of review of the penalty upon Mr Phillips, the RTA reviewed the penalty upon Mr Payne from demotion for a period of two years to one year. 18 Mr Payne was advised of the reduction in his suspension by correspondence dated 9 March 2007 which also informed him that the suspension would take effect from receipt of the correspondence. Mr Payne was required to acknowledge receipt by signature. 19 Mr Payne will resume the position of Carpenter Grade 2 from 9 March 2008. 20 Mr Phillips has also made an application pursuant to s 84 of the IR Act, Matter No IRC 368 of 2007, which has also attracted an objection to jurisdiction, heard and decided concurrently with this matter. 21 In the instant application Mr Payne asserts that there is no basis in fact for disciplinary action and that the demotion, attended by loss of remuneration and benefits, is a termination of employment. 22 On demotion Mr Payne's rate of pay was reduced from $912.40 to $869.00 per week. 23 All Award provisions continue to apply to his employment and there is no break in the continuity of service for accrual of entitlements. The Argument Against Jurisdiction 24 Mr Warren submitted that the disciplinary action taken against Mr Payne was not a dismissal or threatened dismissal within the meaning of those terms found in Part 6, Unfair Dismissals of the IR Act. 25 Section 83 of the IR Act provides: (1) This Part applies to the dismissal of: (a) any public sector employee, or (b) any other employee, except an employee for whom conditions of employment are not set by an industrial instrument and whose annual remuneration is greater than $62,200 (or such greater amount as is prescribed by the regulations). …… (5) In this Part: dismissal includes: (a) threat of dismissal, and (b) in the case of a public sector employee—dispensing with the services of the employee, dismissing the employee as a consequence of disciplinary proceedings against, or the commission of an offence by, the employee or annulling the appointment of the employee. 26 The pre-requisite of dismissal is reinforced by s 84, Application for remedy by dismissed employee, which states: (1) If an employer dismisses an employee and the employee claims that the dismissal is harsh, unreasonable or unjust, the employee may apply to the Commission for the claim to be dealt with under this Part. 27 Mr Warren put that Mr Payne is a public sector employee and subject to the specific provisions of s 83 (5)(b) of the IR Act which closely defines the meaning of the term "dismissal". 28 Mr Warren noted that there is no argument that Mr Payne has worked for the RTA for a number of years prior to his demotion and continues in employment. Mr Warren submitted that in these circumstances the essential pre-requisite of dismissal is not met and accordingly Mr Payne does not have a right to bring an application. 29 Mr Payne's employment falls within the provisions of the PSEM Act which, amongst other things, authorises the disciplinary policy applied in this matter. 30 The evidence of Ms Cvetkovic (Ex 5), details the relevant disciplinary policy (Annex. A) which sets out the sanctions which may be imposed by the employer in the following terms: Breaches Where a breach of discipline is established, disciplinary action that may be taken includes: · Reprimand and warning. · Deferral of increment. · Transfer. · Demotion and/or reclassification. · Termination of services. Breaches of the Code of Conduct and Ethics that allegedly involve criminal conduct may be referred to the Police. Allegations against staff that involve corrupt conduct may be referred to the Independent Commission Against Corruption. 31 Mr Warren emphasised that the policy allows for a range of sanctions, including termination of employment. Mr Warren submitted that it is clear that the option of demotion, not termination, was applied in this matter. 32 The evidence of Mr Collins (Ex 6) details the action taken by the RTA in application of the disciplinary policy in respect to the allegation against Mr Payne. 33 Mr Warren noted that this evidence reveals a series of suspensions from duty on pay, an investigation process followed by a review and significant reduction in penalty. 34 Mr Warren submitted that, as a Public Sector employee, the Government and Related Employees Appeal Tribunal Act 1980 ("the GREAT Act") also applies to Mr Payne. 35 Mr Warren referred to s 23 of the GREAT Act 23 Notice of certain decisions etc (1) Where, in relation to an employee, an employer makes a decision : (a) to defer, for a period in excess of 6 months, the payment of an increment to the employee, (b) to reduce the rank, classification, position, grade or pay of the employee , (c) to impose a fine or forfeit pay, (d) to annul the appointment of an employee appointed on probation , (e) to suspend the employee as a punishment where the employee is held to be guilty of misconduct or contravention of any law or any rule or direction of the employer, (f) to dismiss the employee, or ( g) to direct or to require the employee to resign , the employer shall, except as may be otherwise provided by an order made under subsection (3), give the employee notice, in writing, of the decision as soon as practicable after the decision is made. (2) Where an employer is unable to give an employee notice, under subsection (1) , of a decision within 14 days after the decision is made, the employer may apply to the Senior Chairperson for an order as to the giving of the notice. (3) On receipt of an application under subsection (2), the Senior Chairperson may make such order as the Senior Chairperson thinks fit as to the giving of the notice or may make an order dispensing with the giving of the notice. (4) A notice may be given, or the giving of a notice may be dispensed with, in accordance with an order made under subsection (3). (5) In subsection (1) (f): dismiss includes dispensing with the services of an employee (including under any right or power of the Crown to dispense with the services of an employee). (6) For the purposes of this Division: (a) a decision of a kind referred to in subsection (1) (d), (f) or (g) is a decision that may, subject to this Act, be appealed against under section 24 regardless of whether the decision was made for disciplinary reasons, and (b) a reference to an employer making a decision of a kind referred to in subsection (1) includes a reference to any other person (including the Crown) who is authorised by or under any law to make that decision or to carry it into effect. [emphasis added] 36 Mr Warren further noted the distinction in this legislation between demotion and dismissal, which he put is supported by the definition of "dismissal" in s 83(5) of the IR Act. 37 Mr Warren noted that Mr Payne had a right of appeal pursuant to s 24 of the GREAT Act which he had not pursued. 38 Mr Warren referred to the decision of Sams DP in Antonic and Roads and Traffic Authority [2005] NSWIRComm 344 where it was held that an employee of the RTA, albeit covered by a different industrial award, had no right of access to the unfair dismissal provisions of the IR Act. Mr Warren contended that Antonic was properly decided and is persuasive of a similar consideration in this matter. 39 Mr Warren submitted that the decision of the Supreme Court of South Australia in Advertiser Newspapers Pty Ltd v Industrial Relations Commission of South Australia (1999) 90 IR 211, relied upon by Mr Wormington, is of no assistance in this matter. Mr Warren put that in the Advertiser case the Court dealt with circumstances where the employer had repudiated the employee's contract of employment, which has not occurred in this case; and in any event does not deal with application of the IR Act, nor a NSW public sector employee. 40 Mr Warren submitted that the RTA has not repudiated Mr Payne's contract of employment; it has in fact demoted him in his employment in a manner allowed by the contract of employment. 41 Mr Warren submitted that the decision of a Full Bench of the Australian Industrial Relations Commission in Charlton v Eastern Australian Airlines Pty Ltd (2006) 154 IR 239, also relied upon by Mr Wormington, which applied the principles held in the Advertiser case, was equally unhelpful in this matter for the same reasons. 42 Mr Warren submitted that the decision in Clark v Pittwater RSL Club Limited (1998) 84 IR 309, also relied upon by Mr Wormington, was not apposite to these proceedings as in that matter the employee was not a public sector employee and had refused to accept a transfer from a position of doorman in a registered club to one of picking up ashtrays. Mr Clark had refused to undertake the duties of the alternate position. Mr Warren further submitted that the change in nature of the duties required of Mr Payne is not so significant as was the case in Clark. The Case for Jurisdiction 43 Mr Wormington relied firstly on the disciplinary guidelines of the RTA (Ex 4, Annex. C) which informs employees in the following terms: Disciplinary Appeals Staff have the right to appeal disciplinary action taken by the RTA before the Government and Related Employees Appeal Tribunal (GREAT) or the NSW or Australian Industrial Relations Commissions, as appropriate. Staff may wish to consult their union or obtain independent legal advice prior to lodging an appeal. An appeal to GREAT must be lodged within 28 days of the date of the RTA's decision and to either Industrial Relations Commission within 21 days of the date of decision. Further information on lodging an appeal with GREAT is contained in the GREAT Appeals Policy at 10.6 of the Human Resources Manual. 44 Mr Wormington submitted that the policy affords the employee a choice of tribunal which includes this Commission. Mr Wormington put that Mr Payne was precluded from application to GREAT as the RTA's decision was taken on 9 March 2007 and the issue of jurisdiction not raised in these proceedings until 10 April 2007, which is beyond the 28 day time limit for an application to GREAT. The inference from this submission is that, had the RTA raised the jurisdictional question within 28 days Mr Payne could have lodged an application to GREAT. 45 Mr Wormington put that it is open to Mr Payne to bring a disciplinary matter to this Commission. 46 Mr Wormington submitted that the demotion of Mr Payne was, at law, annulment of his employment and initiation of a new contract which amounts to a termination of employment for the purposes of s 83(5) of the IR Act. Mr Wormington relied upon Clark, Advertiser Newspapers and Antonic. 47 Mr Wormington submitted that Clark's case is authority for the proposition that demotion can amount to a dismissal in circumstances where the employee refuses to accept the demotion and leaves employment as a result. 48 Mr Wormington put that continuing in employment in the alternate position to which he was demoted whilst the current proceedings are resolved should not prejudice Mr Payne as he is merely mitigating his loss, the amount to be paid by the employer in the event of success, and to avoid reliance upon the Australian taxpayer by claiming payments resulting from unemployment. 49 Mr Wormington submitted that on conclusion of these proceedings Mr Payne will either be reinstated to his former position or take an informed decision as to whether he will continue in employment under a new contract of employment in the inferior position. 50 Mr Wormington submitted that in Clark the Full Bench directed consideration to the actual employment (84 IR 309 at 311): In determining whether or not, there has been a dismissal from employment. It is necessary to determine what the employment is. The evidence before the Commission was to the effect that the appellant at all times was employed as a receptionist/doorperson. There is no evidence that he was employed to carry out any other duties, that there was a contractual requirement to carry out any other duties, or that any applicable award provisions permitted the club to unilaterally vary the incidents of employment. 51 Mr Wormington submitted that the concept of demotion pursuant to a disciplinary policy was not "even remotely within the contemplation of the Full Bench". 52 Mr Wormington noted that Mr Payne was employed as a Grade 2 Carpenter pursuant to the Award and so was not contractually obliged to carry out other duties. 53 Mr Wormington submitted that the Award does not allow the employer to unilaterally vary the contract of employment, a position supported by the decision in Advertiser Newspapers. 54 Mr Wormington submitted that the decision in Antonic is distinguished from the present case as the conduct relied upon in Antonic was during the course of duty in working hours whereas the allegations against Mr Payne are in respect to events said to have occurred outside working hours. Mr Wormington put the following submissions (Ex 3, paras 20-23): 20. The conduct in Antonic occurred during the course of the Applicant's employment. Whereas the alleged misconduct in the present case, occurred outside of work hours. Briefly stated, the facts were that the Applicant was staying in Muswellbrook (on a work assignment). On completion of the days work, the Applicant and three colleagues went to a local hotel for dinner. Following dinner, they each had about six beers, while playing a number of games of pool. About 11:30 p.m. the group including the applicant walked back to the motel. The Applicant went back to one of his colleagues rooms, where the alleged misconduct is said to have occurred. It is submitted on behalf of the Applicant that, because the incident did not occur "in the workplace" or "during the course of his employment". The incident even if admitted, which it is not, would not be caught by the employer's policies even if the policy had been incorporated into the contract of employment. 21. The second ground relied upon by the Respondent, is the finding by Deputy President Sams, that in Antonic , because the contract of employment included procedures allowing for the temporary or permanent demotion of an employee for disciplinary reasons. The demotion did not constitute a repudiation by the employer, of an essential term of the contract of employment and consequently could not constitute a dismissal for the purposes of Part 6, chapter 2 of the Industrial Relations Act 1996. 22. His Honour in Antonic (paragraph 105-107), found support for his finding. Under clause 17 of the Crown Employees (Roads & Traffic Authority of NSW-Salaried Staff conditions of employment) Award, which provides for an appeal mechanism where an employee expresses dissatisfaction with being demoted to a lower grade or classification. The Applicant in the present case is not a party to that Award. The Award governing his employment is the Crown Employees (Roads & Traffic Authority of New South Wales-Wages Staff) Award 2005. This Award does not contain a clause that allows the Applicant to challenge the demotion. 23. His Honour in Antonic, in paragraphs 112 and 142 expressed some doubt as to whether his jurisdictional finding was correct. Having decided the matter in favour of the Respondent on the basis of the jurisdictional challenge, there was no need to go on and consider the merits of the application. In our submission, his Honour had formed a very strong view as to the credit and character of the applicant and gave a decision on the merits, in order to nullify the prospects of an appeal. In our submission had his Honour not given a decision on the merits, any appeal flowing from the jurisdictional decision by the Applicant; would have been likely to have been successful. 55 Mr Wormington submitted that whilst the employer's policy provides for sanction in the event of misconduct (or breach of discipline) by the employee, he put that there is no evidence to establish that Mr Payne is guilty of any act or omission which would give rise to disciplinary action. 56 Mr Wormington accepted that the Respondent has legislative power to set conditions of employment (including policies) for its staff, provided they do not conflict with any other law. 57 In the written submissions (Ex 3) relied upon by Mr Wormington it is contended that the disciplinary policy does not apply to Mr Payne as the Respondent failed to make him aware of it, and failed to provide adequate training to ensure that the employee understands his rights and obligations under the policy. 58 Mr Wormington relied upon the evidence of Mr Payne (Ex 4, para 22) that: 22. …… on 31 August 2006, I attended an RTA training session on bullying and harassment. After seventeen years with the RTA this was the first time I had attended a training course of this nature. Annexed and marked 'B' is a copy of a list of the various training sessions I have been provided by the RTA. At the session I was provided with copies of the RTA Code of Conduct and other policy and procedure brochures. This was the first time I had seen these documents. Annexed and marked 'C' are copies of these documents. I was not aware that the documents existed until that date. Consideration 59 It is beyond doubt that Mr Payne was and remains a public sector employee with specific rights and obligations arising from that employment status. 60 Mr Payne was subject to disciplinary action conducted in accordance with a statutory regime which afforded rights and obligations upon the employer as well as Mr Payne. 61 The disciplinary guidelines referred to by Mr Wormington above do refer to GREAT, the Industrial Relations Commission of New South Wales, and the Australian Industrial Relations Commission. It cannot follow, as contended, that this affords an employee a choice of tribunal. The jurisdiction of each institution is discrete and prescribed by the relevant legislation in each case, and can only be available where the jurisdictional pre-requisites are met. 62 Access to the provisions of Part 6 Unfair Dismissals of the IR Act by a public sector employee is constrained to the circumstances described by s 83(5); other matters of dispute may, where the employee is a member of a registered industrial organisation, be brought pursuant to Chapter 3, Industrial disputes. The AWU exercised this right on behalf of Mr Phillips. 63 Mr Payne had access to GREAT from the time the review of suspension was advised to him on 9 March 2007. 64 There is no serious challenge to the manner in which the employer discharged its obligations pursuant to the relevant disciplinary policy, the evidence supporting a conclusion that the employer acted in a measured and careful manner to ensure that the investigation and deliberation processes properly afforded Mr Payne the right to representation and appeal. 65 The argument advanced that the disciplinary policy does not apply to Mr Payne as he was unaware of it is not sustainable. The disciplinary policy forms an active part of the matrix of statutory and administrative regulation applicable in the present case, aptly referred to by Deputy President Sams at para 99 of Antonic as a "suite of arrangements involving legislation, award and policies". 66 The decisions in Clark, Antonic, and Advertiser Newspapers are distinguished from the present proceedings as those matters did not involve consideration of the particular rights and obligations afforded a NSW public sector employee by the aforementioned matrix of legislation, award, and statutorily endorsed policy. 67 Mr Wormington's submission that Mr Payne was employed as a Carpenter and accordingly could not be required to carry out other work overlooks cl 4.1(f) of the Award which states: As an RTA employee, you must carry out duties that: you have the skills, competence and training to undertake and are safe to perform are within the classification structure of this Award do not promote de-skilling 68 It was not contested that the work required of Mr Payne in the position to which he is temporarily demoted falls within that so described. 69 I find that Mr Payne was not dismissed from his employment; that the demotion for disciplinary purposes is permitted by the contract of employment; and that he is excluded from access to Chapter 6, Unfair Dismissal of the IR Act on the basis that he has not been dismissed as defined by s 85(3) of the IR Act. 70 The application is dismissed for want of jurisdiction. 71 Matter No IRC 361 of 2007 is so concluded. oo0oo DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.