Victorian public sector employment: Limitations and learnings from litigation

Victorian public sector employment: Limitations and learnings from litigation

The annus horribilis of 2020 saw a number of important cases handed down which involve and have implications for various parts of the Victorian public sector.

This article is part of a series on Victorian Public Sector Employment: Approaching 2021 with 2020 vision.

Also in this series:

Consultation in the context of organisational change

In CPSU v the Library Board of Victoria1, the Fair Work Commission (FWC) arbitrated a dispute under the State Library Victoria Enterprise Partnership Agreement 2016 (SLV Agreement) regarding a proposed organisational restructure of the State Library of Victoria that would see Library Officers and Librarians separated into front-of-house and back-of-house divisions and grouped together based on the functions they performed.

CPSU alleged that the proposed restructure meant that Library Officers and Librarians were siloed into only performing front-of-house or back-of-house functions, rather than a hybrid of both as contemplated by the SLV Agreement.

Deputy President Gostencnik ultimately found that clause 4(g), (j) and (k) – which set out specific initiatives that the CPSU and the State Library had committed to undertaking over the life of the SLV Agreement – prohibited the State Library from implementing the organisational restructure. The organisational restructure went against the State Library's obligation to promote career development and progression and ensure that the Library Officer and Librarian positions would involve both front and back-of-house functions. In addition, given the parties had committed to fulfilling these obligations over the course of the Agreement, Gostencnik DP found that the parties should be prohibited from undermining these obligations while the Agreement is on foot.

This decision highlights the importance of considering all terms of an enterprise agreement before embarking on organisational change.

Managing workplace investigations

Both the FWC and the Victorian Civil and Administrative Tribunal (VCAT) have handed down decisions which reinforce key aspects of managing workplace investigations under an enterprise agreement.

Compliance with investigative process

In Luke Maxitanis v Department of Justice and Community Safety2, a Full Bench of the FWC made the following observations in relation to an investigation that the Department of Justice and Community Safety conducted which ultimately resulted in Mr Maxitanis' dismissal.

  • Compliance with the minimal procedural fairness requirements in s 387(b) and (c) of the Fair Work Act 2009 (Cth) (FW Act) by a large and sophisticated public sector organisation such as the Department is not a matter of significance and should be treated as a neutral consideration in determining whether the dismissal was harsh, unjust or unreasonable.
  • For the purposes of s 387(d) of the FW Act, there is no positive obligation on the Department to offer a support person when proposing to dismiss an employee. Rather, the only obligation on the Department is to not unreasonably refuse a support person.

Although this investigation was conducted under clause 21 of the Victorian Public Service Enterprise Agreement 2016 (VPS Agreement 2016), which has been amended in the Victorian Public Service Enterprise Agreement 2020 (VPS EA), we consider that the FWC is highly likely to view investigations conducted by employers covered by the new VPS EA in the same manner.

Collection of an employee's personal information

In Tucker v State Revenue Office3, VCAT confirmed that using an employee's personal information as part of a workplace investigation will not contravene the Information Privacy Principles (IPP) under the Privacy and Data Protection Act 2014 (Vic).

VCAT found that the use of Mr Tucker's mobile number was consistent with the State Revenue Office's (SRO) primary purpose of collection of his mobile, namely to contact Mr Tucker about important work-related matters – such as workplace investigations – when he is not at work.

With regard to the SRO’s use of Mr Tucker's birth certificate as part of the investigation, VCAT found that this was a secondary purpose related to the primary purpose of collection as it related to Mr Tucker's ongoing status as an employee.

Additionally, VCAT also found that the SRO could use the birth certificate as part of a workplace investigation as it fell within the scope of "possible unlawful activity" under IPP 2.1(e). Significantly, VCAT found the meaning of "possible unlawful activity" extended to include investigations of alleged breaches of the Code of Conduct for Victorian Public Sector Employees (VPS Code of Conduct).

As a result, public sector employers have greater scope to use an employee's personal information in circumstances where they are investigating allegations that the employee has breached the VPS Code of Conduct.

Intersection between misconduct and criminal conduct arising from the same circumstances

In Cheung v State of Victoria t/a Victoria Police4, the FWC considered the extent to which an employee can rely on concurrent criminal proceedings in seeking an adjournment of civil proceedings in the FWC arising out of the same conduct.

Mr Cheung sought an adjournment of his unfair dismissal claim against Victoria Police until his criminal proceedings in the County Court were finalised. At the time of Mr Cheung's dismissal, he had been found guilty of a criminal offence arising out of the same circumstances as his dismissal. However, Mr Cheung had lodged an appeal in the County Court and there was no firm timetable for the hearing of the appeal, with the best estimate being at least six to 12 months away.

Commissioner McKinnon refused to exercise her discretion to grant Mr Cheung an adjournment, on the basis that Mr Cheung had not filed any witness statements or any information in his unfair dismissal application that might shed new light on his involvement in the alleged conduct in question. Given these circumstances, the FWC considered that it was hard to identify any real prospect of substantial injustice to Mr Cheung in the criminal proceedings if his unfair dismissal application continued.

Commissioner McKinnon also found that whether Mr Cheung’s criminal appeal succeeded or failed would not determine whether his dismissal was harsh, unjust or unreasonable, with particular emphasis on the point in time at which the dismissal had occurred. The FWC noted that any findings would rest on the evidence before it, weighed only on the balance of probabilities; that Mr Cheung was at liberty to exercise the privilege against self-incrimination and not file a witness statement if he wanted; and that no adverse inference would be drawn against him as a result.

Terms and conditions of employment

In Tucker v State of Victoria5, the Victorian Supreme Court provided further clarity on when industrial agreements will be incorporated by reference into a contract of employment.

Associate Justice Ierodiaconou rejected Mr Tucker's claim that the VPS Agreement 2016 was incorporated into his contract of employment, on the basis that the contract of employment expressly provided that the industrial instrument and a subsequent workplace determination were not to be incorporated into the contract. Importantly, the phrase "a subsequent determination" was understood to mean a subsequent industrial instrument and therefore reading it as a whole, this meant that both the original Victorian Public Service Workplace Determination 2012 and the subsequent VPS Agreement 2016 were to be excluded.

Mr Tucker also argued that the investigative process under clause 21 of the VPS Agreement 2016 should be incorporated into his employment contract, on the basis that the contract would be incomplete without a termination procedure. This argument was also emphatically dismissed. Ierodiaconou AsJ determined that where there is a separate mechanism for termination of the employment contract in the industrial instrument applicable to a person's employment, there is no gap that needs to be filled by way of incorporation of a term into the contract.

This decision makes clear that words in the employment contract requiring the exercise of certain contractual rights to be "in line with" industrial instruments do not allow for incorporation of the industrial instrument into the contract of employment where there are express words stating that the industrial instrument is not incorporated.

Resolving litigation

In Tucker v State of Victoria (State Revenue Office)6, the FWC confirmed that there may be a binding settlement agreement even if the employer has not made a settlement payment to the employee, or the parties have not executed terms of settlement.

Deputy President Young applied the High Court's decision in Masters v Cameron7, which held that there would be a binding agreement in the following circumstances:

  1. where the parties reach finality and intend to be immediately bound by the terms of settlement, but propose restatement of the terms in a fuller or more precise form but not different in effect; or
  2. where the parties have completely agreed all terms, but performance of one or more terms is conditional on execution of a formal document.

The FWC also confirmed that if a binding and enforceable settlement agreement has been reached between the parties, then it is open for the FWC to dismiss an application under section 587 of the FW Act.

Read next:

1 [2020] FWC 5521.

2 [2020] FWCFB 4529.

3 [2020] VCAT 53.

4 [2020] FWC 4401.

5 [2019] VSC 420.

6 [2020] FWC 5252.

7 (1954) 91 CLR 353.

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