2016 WAIRC 00035
WESTERN AUSTRALIAN INDUSTRIAL MAGISTRATES COURT


CITATION : 2016 WAIRC 00035

CORAM
: INDUSTRIAL MAGISTRATE G. CICCHINI

HEARD
:
WEDNESDAY, 9 DECEMBER 2015

DELIVERED : WEDNESDAY, 20 JANUARY 2016

FILE NO. : M 13 OF 2015

BETWEEN
:
TERRI VINCENT
CLAIMANT

AND

DEPARTMENT OF FINANCE
RESPONDENT

Catchwords : Alleged breach of clause 22 of the Public Service and Government Officers General Agreement 2014 – Whether application for purchased leave considered – Refusal to grant purchased leave – Whether the Industrial Magistrates Court has power to review the decision not to grant the application for purchased leave – Whether the Industrial Magistrates Court can order the granting of purchased leave.
Legislation : Industrial Relations Act 1979
Industrial Magistrates Courts (General Jurisdiction) Regulations 2005
Instruments : Public Service Award 1992
Public Service and Government Officers General Agreement 2014
Case(s) referred to
in Reasons : City of Wanneroo v Australian Municipal, Administrative, Clerical
and Services Union
[20060] FCA 813
Minister for Immigration and Citizenship v Li
[2013] HCA 18
Associated Provincial Picture Houses Ltd v Wednesbury Corp
[1948] 1 KB 223
Josephson v Walker
[1914] HCA 68; (1914) 18 CLR 691
Byrne v Australian Airlines Limited
[1995] HCA 24; (1995) 131 ALR 422
Result : Claim dismissed
REPRESENTATION:


CLAIMANT : IN PERSON

RESPONDENT : MR N.P. VAN HATTEM INSTRUCTED BY THE STATE SOLICITOR OF WESTERN AUSTRALIA


REASONS FOR DECISION
1 This claim concerns the refusal by the Department of Finance (the respondent) to allow its employee Ms Terri Vincent (the claimant) to enter into a purchased leave arrangement in 2015.
Agreed Facts
2 The claimant has been employed by the respondent since 2002 and continues to be employed by it within its Office of State Revenue (OSR). The claimant currently occupies the position of Senior Revenue Consultant.
3 The claimant’s terms of employment are and were at all material times governed by the Public Service Award 1992 (the Award) and the Public Service and Government Officers General Agreement 2014 (the General Agreement).
4 Clause 22 of the General Agreement, which replaces cl 13 of the Award, provides that an employer and an employee may enter into an arrangement whereby the employee can purchase up to 10 weeks’ additional leave.
5 At all material times, the claimant’s employment was subject to various policies and instructions, as identified below:
1. The respondent had in place the following published policies:
a) Leave Management Policy; and
b) Employee Purchased Leave Policy.
2. The respondent had published the following documents:
a) A Great Place to Work – Flexible Working Arrangements; and
b) Discussion Guide for Flexible Working Arrangements.
3. The Department of Consumer and Employment Protection (now known as the Department of Commerce) had issued the following circulars:
a) Circular to Departments and Authorities No 2 of 2005 - Flexible Work Practices (Circular 2); and
b) Circular to Departments and Authorities No 3 of 2005 - Purchased Leave (Circular 3).
4. The Department of Commerce had published the following policy statements:
a) Leave Liability Management – Policy Statement October 2012; and
b) Circulars to Departments and Authorities – Policy Statement August 2011.
5. The Department of Commerce’s website, within the Labour Relations section, (http://www.commerce.wa.gov.au/labour-relations/public-sector-policies-1) provides information regarding the applicability of ‘policy statements’ of the kind referred to in paragraph 4 above.
6 On 17 October 2014, Ms Tracey Jenkin, HR Consultant, Department of Finance (Ms Jenkin) sent an email to staff at OSR, inviting applications for purchased leave to be submitted to their manager by close of business on 7 November 2014.
7 On 21 October 2014, the claimant submitted an application for eight weeks’ purchased leave for the 2015 calendar year (the/her Application).
8 On 24 November 2014 Mr Clayton Cox Assistant Director Review, OSR (Mr Cox) met with the claimant to discuss details of her Application. At that meeting, Mr Cox informed the claimant that higher management had considered her Application and had made a decision to not approve her request for purchased leave (the first decision). The respondent acknowledged that work priorities from a branch/operations perspective could accommodate the claimant’s Application for eight weeks’ purchased leave in the 2015 calendar year if it were approved.
9 By email dated 1 December 2014, the claimant requested that her Application be reconsidered. She provided reasons as to why she believed that her Application had not been properly considered.
10 On 2 December 2014, Ms Jenkin met with the claimant to discuss her Application. The claimant advised Ms Jenkin that the reasons she required purchased leave, in addition to her available leave balances were:
1. her need to take leave (on an ad-hoc basis) in order to manage the responsibility of settling her late father’s estate;
2. her desire to also have some time of a recreational nature in the 2015 calendar year to help achieve an appropriate work-life balance; and
3. her plan to hold on to her long service leave to take an extended overseas holiday in a year or so hence.
11 At that meeting, the claimant explained to Ms Jenkin the importance of holding on to her long service leave. If she did not hold on to it, she would not be able to take her planned extended overseas holiday, unless additional leave was granted at that time, and there was no guarantee that additional leave would or could be granted at a time in the future.
12 Also at the meeting on 2 December 2014, the claimant confirmed that she was prepared to modify her request from eight weeks’ to four weeks’ purchased leave. Ms Jenkin agreed to refer this offer to Ms Nicki Suchenia, Acting Commissioner of State Revenue, (the Acting Commissioner) for further consideration.
13 On 3 December 2014 the Acting Commissioner met with Mr Cox, Ms Jenkin and Mr Murray Hancock, Director, Legislation, Training and Review, OSR to further deliberate the claimant’s request to reconsider her Application.
14 After the meeting on 3 December 2014, Ms Jenkin emailed the claimant to inform her that her Application had been considered, but that it could not be supported at that time (the second decision).
15 Each of the first and second decisions not to approve purchased leave was made by or at the direction of the Acting Commissioner.
16 In considering the Application, the Acting Commissioner took into account the following factors in making the second decision:
1. that the claimant had advised the Acting Commissioner that her father’s death had caused her considerable stress and as such she required additional leave to deal with his death and manage his estate. The claimant also advised that she would require leave for the usual recreational reasons and extended leave for overseas travel at a later date;
2. that the claimant’s forecast positive leave credits at the close of business on 31 December 2014 would be 248.2 hours (33 days) of accrued annual leave and 322.374 hours (42 days) of accrued long service leave;
3. the respondent’s overall leave liability; and
4. that work priorities from a branch/operations perspective could accommodate the claimant’s original and varied Application.
17 The claimant responded to Ms Jenkin’s email of 3 December 2014, by return email on 8 December 2014, which set out her concerns regarding the decision to decline her Application after reconsideration.
18 By email dated 12 December 2014, Ms Jenkin responded to the concerns raised by the claimant in her email dated 8 December 2014.
19 On 19 December 2014, the Civil Service Association of Western Australia Incorporated (CSA) wrote to the Acting Commissioner on behalf of the claimant, lodging a formal dispute under cl 49 of the General Agreement. The dispute was in relation to the refusal to grant the claimant’s application for purchased leave.
20 On 23 December 2014 Mr Michael Jozwicki, Director, People Strategy and Performance, OSR, (Mr Jozwicki) replied to the letter sent by the CSA and set out the view that the respondent had considered the Application on its merits.
21 The dispute did not resolve.
Claim and Response
22 On 16 February 2015 the claimant instituted this claim. Her reasons for making the claim and the remedy sought are expressed therein as follows:
Statement of grounds
My application for purchased leave has not been properly considered in accordance with clause 22 of the Public Service and Government Officers General Agreement 2014 and departmental policies relating to these issues. In making the decision declining my application for purchased leave for the 2015 calendar year:
1. my personal circumstances, which including(sic) specific and compelling reasons for requesting additional leave, were not properly taken into account; and
2. inappropriate matters were taken into consideration.
Orders sought
That an order be made pursuant to section 83 of the Industrial Relations Act 1979 that my application for purchased leave be properly considered and additional leave for the 2015 calendar year be granted.
23 On 6 March 2015 the respondent responded by saying that it … assessed the Claimant’s application for paid leave on its merits and gave consideration to the personal circumstances of the Claimant.
Purchased Leave
24 Purchased leave is additional leave, purchased by an employee who forgoes a pro-rata portion of salary to facilitate payment during the time additional leave is taken. Unlike annual leave and long service leave, purchased leave is not paid for by the employer. Purchased leave cannot be taken at half pay. It does not accrue and any portion of unused purchased leave at the end of the calendar year is paid out to the employee by the employer.
25 Clause 22 of the General Agreement facilitates the purchase of leave. It states:
22. PURCHASED LEAVE – 42/52 ARRANGEMENT
22.1 The provisions of this clause replace clause 13 – Purchased Leave – 44/52 Salary Arrangement of the applicable Award.
22.2 The employer and the employee may agree to enter into an arrangement whereby the employee can purchase up to ten weeks additional leave.
22.3 The employer will assess each application for a 42/52 salary arrangement on its merits and give consideration to the personal circumstances of the employee seeking the arrangement.
22.4 Where an employee is applying for purchased leave of between five and ten weeks, the employer will give priority access to those employees with caring responsibilities.
22.5 In order to access the approved purchased leave, an employee must:
(a) satisfy the agency’s accrued leave management policy; and
(b) take one week annual leave if purchasing nine weeks’ leave; or
(c) take two weeks annual leave if purchasing ten weeks’ leave.
22.6 Notwithstanding clause 22.5 (b) and (c), the employer may allow an employee to access purchased leave before they have accessed one or two week’s annual leave, whichever applies, where the employee requests it. Any such request may only be refused by the employer if there are reasonable grounds to do so.
22.7 The provisions of clause 22.5 (b) and (c) do not apply to an employee who purchases less than nine weeks leave.
22.8 An agreement to take a reduced salary spread over the 52 weeks of the year will yield the following amounts of purchased leave.
Number of weeks salary spread over 52 weeks
Number of weeks purchased leave
42
10
43
9
44
8
45
7
46
6
47
5
48
4
49
3
50
2
51
1

22.9 (a) Purchased leave is not able to be accrued. The employee is entitled to pay in lieu of any purchased leave not taken. In the event that the employee is unable to take such purchased leave, their salary will be adjusted in the last pay period in February to take account of the fact that time worked during the previous year was not included in their salary.
(b) Untaken purchased leave will be paid out at the rate at which it was purchased.
22.10 (a) Where an employee who is in receipt of an allowance provided for in clause 19 – Higher Duties Allowance of the applicable Award or clause 38 – Higher Duties Allowance of this General Agreement proceeds on any period of purchased leave, the employee shall not be entitled to receive payment of the allowance for any period of purchased leave.
(b) Other than when an employee is on a period of purchased leave, the higher duties allowance component of an employee’s salary shall not be affected by an agreement to reduce the employee’s salary for purchased leave purposes.
22.11 Overtime is paid at the ordinary rate of salary and not the reduced rate. This will also apply where overtime is referred to as a percentage of salary.
22.12 In the event that a part time employee’s ordinary working hours are varied during the year, the salary paid for such leave will be adjusted in the last pay in February to take account of any variations to the employee’s ordinary working hours during the previous year.
26 The provision of purchased leave is achieved by agreement and is subject to the employee satisfying the pre-requisites required by cl 22.5 of the General Agreement. In order to access approved purchased leave an employee must, inter alia, satisfy the agency’s accrued Leave Management Policy.
27 The respondent’s Leave Management Policy (agreed document 1) was implemented in response to cabinet’s decision of 24 September 2012 to cap leave liability. The policy’s stated purpose (at page 4) is as follows:
The Department of Finance is committed to promoting a healthy work-life balance and this policy outlines the department’s approach to leave management and planning.
28 The respondent’s Leave Management Policy states (at page 4) that in managing leave, in addition to consideration being given to operational needs of the work unit, managers will also take into consideration an employee’s preferred timing of leave.
29 The respondent’s Leave Management Policy sets out a number of initiatives to enable the department to manage its leave liability, including:
1. developing leave plans (see page 4);
2. focused discussions with employees who have excessive leave balances (see page 5);
3. encouraging employees to utilise:
a) four weeks’ (20 days) annual leave each year (see page 5); and
b) two weeks’ long service leave each year for those employees with a long service leave balance of 487.5 hours (65 days) or greater (see pages 5 and 7);
4. implementing targeted leave management for employees with excessive leave balances (see page 5); and
5. directing employees with excessive leave (annual and long service) to take leave at a stipulated time and duration (see page 5).
30 The Leave Management Policy defines ‘excessive leave’ (at page 5) as:
1. excessive annual leave is accrued annual leave of over 300 hours (40 days); and
2. excessive long service leave is accrued leave of more than one full entitlement being 487.5 hours (65 days).
31 The provision of purchased leave is in keeping with the government’s stated objectives across the public sector, as is set out in Circular 2, issued in 2005 (agreed document 5). At page 2, Circular 2 states:
It is incumbent on public sector agencies to bring to the attention of employees the scope that exists within public sector awards and agreements to pursue flexible phased retirement and work/life balance options, including:
…
c) purchased leave – 44/52 salary arrangement.
32 To achieve that end, the respondent has implemented policies and management practices to provide for flexible work arrangements. These are published in two documents entitled A Great Place to Work – Flexible Working Arrangements (Flexible Working Arrangements Policy) and Discussion Guide for Flexible Working Arrangements (Flexible Working Arrangements Discussion Guide).
33 The Flexible Working Arrangements Policy states inter alia:
What is our commitment to flexible working arrangements?
Both the Department and the Director General are committed to supporting staff in achieving work/life balance. With this commitment is an expectation that managers will support flexible working arrangements that assist employees to balance work and life, whilst at the same time continuing to meet the work unit’s business needs.
34 The Flexible Working Arrangements Discussion Guide states:
Flexible work arrangements offer benefits to both staff and the Department.
…
It will help to establish a flexible work arrangement that meets business needs and the employee needs. This will lead to a:
· decision regarding approving/not approving the flexible working arrangement; and negotiated parameters of the flexible work arrangement.
If the flexible work arrangements cannot be accommodated, the process of going through this guide and documenting the reasons why it cannot be done will then form the basis of the justification for the decision.
35 In 2005, Circular 3 (agreed document 6) was released setting out the guidelines applicable to all employees eligible to apply for purchased leave in the Western Australian public sector. It provides inter alia:
1. The guidelines are to be read in conjunction with the relevant purchased leave clauses contained in the applicable award or agreement, and where the provisions of these guidelines are inconsistent with the award or agreement, the award or agreement shall prevail.
2. Approval is subject to the operational requirements and leave management policies of the agency.
3. In assessing an application for purchased leave, the employer is to assess each application on its own merits, giving consideration to the personal circumstances of the employee.
4. Employers should ensure that purchased leave is not used in substitution of annual leave, resulting in carry over and accrual of annual leave into the following year.
36 The guidelines contained in Circular 2 were subsequently augmented by the respondent’s own Employee Purchased Leave Policy (agreed document 2). That policy sets out the criteria to be followed by management in determining an application for purchased leave as part of its Employee Purchased Leave (EPL) Scheme. It provides at page 4:
Applications for the EPL scheme will be reviewed on a case by case basis taking into account the applicant’s current leave liability and previous utilisation of the EPL scheme. In determining an application, managers are to give consideration to the following:
· previous access to and usage of the EPL;
· individual personal circumstances; and
· the application(sic) leave entitlements
· the impact of the application on operational requirements. Managers are to ensure the following:
o leave balances deemed excessive in accordance with this policy are cleared prior to an application being made; and
o an employee purchasing 9 or 10 weeks leave has taken 1 or 2 weeks annual leave, whichever applies, as a minimum before accessing the purchased leave.
37 The meaning of ‘leave balances deemed to be excessive’ is not defined within the Employee Purchased Leave Policy. Its meaning must therefore be construed in the context of the respondent’s overall Leave Management Policy.
Claimant’s Application for Purchased Leave
38 At the time the claimant made her Application she was compliant with the respondent’s Leave Management Policy in that her accrued annual leave and long service leave was not deemed to be excessive, nor was it forecast to become excessive in 2015.
39 The claimant made her Application using the respondent’s generic form (H4011 - Leave Application for Purchased Leave or Deferred Leave Arrangement) (agreed document 12). The form did not make provision for the giving of reasons in support of such an application. In completing the application form, the claimant did not attach any document that set out her reasons for making her Application. It follows therefore, that her Application was unsupported by any evidentiary material which enabled a proper assessment of her Application to be undertaken, and in particular, consideration of her personal circumstances. The first decision was made in those circumstances.
40 It is obvious that in making its first decision, the respondent did not take into account matters personal to the claimant because those matters were not available for consideration. It is difficult to know how the merits of her Application were otherwise assessed. When informed about the first decision, the respondent acknowledged that work priorities from a branch/operations perspective could accommodate the claimant’s original Application for eight weeks purchased leave to be taken during 2015.
41 The claimant subsequently sought the reconsideration of her Application and for that purpose, met with Ms Jenkin on 2 December 2014. During that meeting the claimant informed Ms Jenkin of the reasons she required purchased leave, in addition to her available balances. Those reasons were:
1. her need to take leave (on an ad-hoc basis) in order to manage the responsibility of settling her late father’s estate;
2. her desire to also have some time of a recreational nature in the 2015 calendar year to help achieve an appropriate work-life balance; and
3. her plan to hold on to her long service leave to take an extended overseas holiday in a year or so hence.
42 By email dated 3 December 2014, Ms Jenkin advised the claimant that her Application had been refused (the second decision). The claimant was advised that in arriving at her decision, the Acting Commissioner took into account the following:
1. the personal circumstances of the claimant;
2. the claimant’s forecast annual leave and long service leave credits;
3. work priorities from a branch/operations perspective; and
4. the respondent’s overall leave liability.
Claimant’s Argument
43 Clause 22.3 of the General Agreement provides that in assessing an application for purchased leave, an employer will assess each application on its own merits, giving consideration to the personal circumstances of the employee seeking the arrangement. Further, cl 22.5 of the General Agreement provides that to access purchased leave, an employee must satisfy the agency’s accrued Leave Management Policy.
44 In considering the Application, the respondent was bound to consider the following in terms of the claimant:
1. her reasons for requesting additional leave in the 2015 calendar year;
2. her accrued leave balances;
3. her plans and reasons to utilise her leave balances (preferred timing); and
4. whether she had complied with the respondent’s accrued Leave Management Policy.
45 The claimant accepts that, although not expressly stated, the factors enunciated in the General Agreement were not intended to be an exhaustive list of factors. She accepts that other relevant matters to be considered in determining her Application might have reasonably included:
1. the availability of suitable cover;
2. any costs and savings implications associated with the grant of additional leave;
3. the impact on the agency’s service requirements;
4. the respondent’s documented policies governing leave management and purchased leave; and
5. the respondent’s policies and commitment to flexible working arrangements.
46 The claimant says that in taking into account all of those factors, there were compelling reasons for the grant of her Application. Those compelling reasons were:
1. Her leave balances were compliant with the respondent’s Leave Management Policy.
2. She needed to utilise her annual leave on an ad-hoc basis in the 2015 calendar year to deal with the responsibilities of settling her late father’s estate. She also had plans to hold on to her long service leave for an overseas holiday in a year or so hence.
3. There were no work-related or operational requirements from a branch/work unit perspective that would have impeded her Application.
4. The salary saving the respondent would make in granting her Application would have more than offset the negligible cost associated with carrying her (compliant) accrued leave balances, estimated to be less than $1,000.00.
5. The respondent’s Leave Management Policy states that the respondent is committed to promoting a healthy work-life balance and that, subject to the operational requirements of the work unit, managers will take into consideration an employee’s preferred timing of leave.
6. The respondent’s stated commitment to flexible working arrangements, which provides that, subject to the business needs of a work unit, there is an expectation that managers will support flexible working arrangements.
47 The claimant contends that the respondent has fallen into error in the consideration of her Application. She says that as a consequence of those errors, cl 22 of the General Agreement has been breached. She submits that this court ought to review and set aside the respondent’s administrative decision to refuse her Application.
48 The claimant identifies the following errors on the part of the respondent:
1. not taking into account relevant matters;
2. taking into account irrelevant matters;
3. the inflexible application of policy;
4. allocating improper weight to matters considered; and
5. making a manifestly unreasonable decision.
Irrelevant Matters
49 The respondent acknowledges that in declining the claimant’s Application, its overall leave liability was taken into consideration. The claimant says that the respondent’s decision was driven by its desire to reduce the claimant’s leave balance and that it intended to exhaust, or substantially reduce her leave credits in the 2015 calendar year. That is evidenced by various emails from the respondent to the claimant during December 2014.
50 The claimant was informed that her Application could not be approved because of the ‘necessity to reduce the current leave liability of the respondent’ (see agreed document 18).
51 Although the claimant acknowledges that the respondent has an obligation to manage its overall leave liability, she says that its desire to reduce its liability by attempting to exhaust the claimant’s compliant leave balances is irrelevant and extraneous to cl 22 of the General Agreement because:
1. Clause 22 of the General Agreement does not provide for it.
2. The respondent has a Leave Management Policy that could deal with it.
3. It is not fair or reasonable that the respondent use the claimant, who is compliant with the Leave Management Policy, as a vehicle to reduce its overall liability. Non-compliant employees should have been targeted instead.
4. Attempting to manage leave liability through access to flexible working arrangements is an undocumented policy inconsistent with the General Agreement.
5. Purchased leave is the grant of ‘additional leave’ not paid for by the employer. It should not be treated like ‘leave without pay’ which requires the exhaustion of all other leave credits.
6. The denial of purchase of leave will not necessarily reduce the respondent’s overall leave liability and therefore the overall leave liability is an irrelevant consideration.
Inflexible Application of Policy
52 In the respondent’s email to the claimant dated 3 December 2014 (agreed document 18), it states that reconsideration could only be given to the claimant’s Application once all leave balances had been exhausted or otherwise committed.
53 The claimant contends that the respondent did not seek to balance operational requirements with the needs of the employees. Rather, the respondent inflexibly applied an undocumented policy of attempting to manage its leave liability through access to flexible working arrangements, to the exclusion of all other matters.

Improper Weight
54 The claimant asserts that, given that her personal circumstances and compliance with the respondent’s Leave Management Policy are matters that the respondent was obliged to take into account, those issues should have attracted considerable weight.
55 If the respondent’s overall leave liability was a relevant factor, then such ought to have been weighted appropriately with the needs of employees. The weight afforded to the respondent’s overall leave liability was improper and unreasonable and that led to a decision which was unnecessarily harsh, illogical and manifestly unreasonable.
Manifestly Unreasonable
56 The claimant says that the respondent’s decision to decline her Application was irrational and manifestly unreasonable because:
1. The cost would have been negligible.
2. The decision does not conform to the respondent’s flexible working arrangements or Circular 2.
3. The decision did not conform to the respondent’s Leave Management Policy which allowed staff to take leave at their preferred time and did not achieve the respondent’s commitment to promote a healthy work-life balance.
4. Clause 22 of the General Agreement does not require an applicant for purchased leave to exhaust or substantially reduce all of their leave credits.
5. It was not reasonable to use the claimant as a vehicle to offset leave balances of those employees who were not compliant with the respondent’s Leave Management Policy.
6. The decision to decline the Application will not result in any reductions of the respondent’s overall leave liability.
7. The decision was harsh because it was likely to adversely affect the claimant’s health and work productivity. Given that operational requirements could accommodate the grant of additional leave, the decision could not be seen as being made in the best overall interests of the department.
8. Managing leave liability through flexible working arrangements represents an undocumented policy inconsistent with the General Agreement and other policies to which the respondent is committed.
9. It is unreasonable that the respondent manage its leave liability through an undocumented policy.
57 The claimant submits that if the rules of administrative decision making do not apply to the decision made regarding the exercise of discretion under cl 22 of the General Agreement, then the rules applicable to the exercise of a contractual discretion apply.
58 Those rules provide that discretionary contractual powers should not be exercised in a manner that is inconsistent with the purpose of the power, capriciously or arbitrarily, or otherwise unreasonably.


Proper Purpose
59 The legitimate purpose of the power contained in cl 22 of the General Agreement is the ability to enable agencies to grant employees (who are compliant with the agency’s leave management policy) additional leave so as to enable employees to manage competing work and personal commitments. Additional leave means leave that is in addition to an employee’s other leave entitlements, but not in lieu of or in substitution thereof. Paragraphs (b) and (c) of cl 22.5 of the General Agreement would suggest that purchased leave was not intended as a mechanism to grant leave only when an employee has exhausted their leave balances, and there are specific provisions within the Award that deal with leave without pay.
60 The claimant says that the respondent has, in considering her Application, misdirected itself as to the operation of cl 22 of the General Agreement and thus exceeded the power afforded by it. The Respondent has attempted to manage its overall leave liability through this clause, rather than managing its leave liability through relevant provisions contained within the Award and its own leave management policies.
Reasonableness
61 The claimant submits that in the matter of Minister for Immigration and Citizenship v Li [2013] HCA 18, the majority of the High Court of Australia considered that the legal standard of reasonableness is not limited to decisions so unreasonable that no reasonable authority would ever come to it (see the test in Associated Provincial Picture Houses Ltd v Wednesbury Corp [1948] 1 KB 223). Rather, the test of whether discretion was exercised unreasonably extends to taking irrelevant considerations into account, bad faith, dishonesty, disregard to public policy, and misdirecting oneself to the operation of the statute.
62 The claimant says that respondent’s decision was manifestly unreasonable because:
1. It took into account an irrelevant consideration (the respondent’s overall leave liability).
2. It did not conform to the respondent’s documented policies.
3. It did not conform to Circular 2 or other commitments with respect to flexible working arrangements.
4. It went beyond that required by cl 22 of the General Agreement.
5. There were negligible cost implications.
6. It used the claimant as a vehicle of reducing leave balances rather than targeting non-compliant employees in applying leave management policies.
7. Its decision would not result in a reduction of the respondent’s leave liability.
8. Its decision would adversely affect the claimant’s health, work productivity and morale.
Arbitrariness
63 The claimant asserts that the respondent acted arbitrarily by not adhering to its documented policies and by inflexibly applying the respondent’s undocumented policy of attempting to manage its leave liability through access to flexible working arrangements.
Determination
64 The claimant made this claim pursuant to s 83 of the Industrial Relations Act 1979 (IR Act) to enforce cl 22 of the General Agreement.
65 Section 83 of the IR Act provides:
83. Enforcing awards etc.
(1) Subject to this Act, where a person contravenes or fails to comply with a provision of an instrument to which this section applies any of the following may apply in the prescribed manner to an industrial magistrate’s court for the enforcement of the provision —
(a) the Registrar or a deputy registrar;
(b) an industrial inspector;
(c) in the case of an award or industrial agreement, any organisation or association named as a party to it;
(d) in the case of an award, industrial agreement or order, an employer bound by it;
(e) any person on his or her own behalf who is a party to the instrument or to whom it applies;
(f) if an employee under an employeremployee agreement is a represented person, a representative acting on his or her behalf.
(2) In this section —
instrument to which this section applies means —
(a) an award; and
(b) an industrial agreement; and
(c) an employeremployee agreement; and
(d) an order made by the Commission, other than an order made under section 23A, 32, 44(6) or 66.
(3) An application for the enforcement of an instrument to which this section applies shall not be made otherwise than under subsection (1).
(4) On the hearing of an application under subsection (1) the industrial magistrate’s court may, by order —
(a) if the contravention or failure to comply is proved —
(i) issue a caution; or
(ii) impose such penalty as the industrial magistrate’s court thinks just but not exceeding $2 000 in the case of an employer, organisation or association and $500 in any other case;
or
(b) dismiss the application.
(5) If a contravention or failure to comply with a provision of an instrument to which this section applies is proved against a person as mentioned in subsection (4) the industrial magistrate’s court may, in addition to imposing a penalty under that subsection, make an order against the person for the purpose of preventing any further contravention or failure to comply with the provision.
(6) An order under subsection (5) —
(a) may be made subject to any terms and conditions the court thinks appropriate; and
(b) may be revoked at any time.
(7) An interim order may be made under subsection (5) pending final determination of an application under subsection (1).
(8) A person shall comply with an order made against him or her under subsection (5).
Penalty: $5 000 and a daily penalty of $500.
66 The claimant has standing to bring this claim (see s 83(1)(c) of the IR Act) as the General Agreement is an instrument to which s 83 of the IR Act applies (see s 83(2)(b) of the IR Act).
67 This court’s powers on the substantive hearing of the claim are set out in s 83(4), s 83(5) and s 83(6) of the IR Act.
68 I observe that s 83(5) of the IR Act does not extend to the making of orders of the type that the claimant seeks, being:
1. additional leave for the 2015 calendar year to be granted (see annexure to the claim); and
2. the respondent’s decision declining the claimant’s application for purchased leave be set aside (see [74] of the claimant’s further submissions lodged on 16 November 2015).
69 The extent of this court’s power is governed by s 83(4) and s 83(5) and, where applicable, s 83(7) of the IR Act. Any order to prevent a further contravention as provided for by s 83(5) of the IR Act cannot be in a declaratory form. The relief provided by s 83(5) of the IR Act is injunctive in nature and is aimed at preventing further specific contraventions of the applicable instrument. If, in this instance, an order is to be made pursuant to s 83(5) of the IR Act, it will necessarily be limited to the claimant’s Application made in 2014 for the 2015 calendar year. It cannot relate to prospective years.
Court’s Powers
70 The claimant submits that awards and industrial instruments made under the IR Act regulate what would otherwise be governed by an employment contract. She points out that awards and registered agreements (such as the General Agreement) are statutory instruments which stand and operate independently from employment contracts. Awards secure conditions by virtue of statute (see Josephson v Walker [1914] HCA 68; (1914) 18 CLR 691 and Byrne v Australian Airlines Limited [1995] HCA 24; (1995) 131 ALR 422). The conditions and entitlements contained within awards and industrial instruments are imported as a statutory right imposing a statutory obligation and right to abide by and enforce (see French J said at [51] and [52] of City of Wanneroo v Australian Municipal, Administrative, Clerical and Services Union [2006] FCA 813).
71 The claimant contends that the General Agreement, being an instrument registered by an order of the Western Australian Industrial Relations Commission, is authority conferred by statute (namely the IR Act) and therefore subject to the rules of administrative law. Although the claimant is correct in what she says about the statutory nature of the General Agreement, she has not provided any authority as to how or why administrative law concepts are said to apply to these proceedings.
72 The respondent submits that the respondent’s exercise in discretion conferred by the General Agreement is akin to that of a contractual discretion, rather than a discretionary power given to an administrative body.
73 The General Agreement is an industrial instrument having statutory force. That of itself does not confer upon this court an ability to review administrative decisions made thereunder. The court’s powers in enforcing statutory rights afforded by industrial instruments are limited to those provided by s 83 of the IR Act. The IR Act does not give this court the power to quash decisions, substitute its own decision, or make declaratory orders. Such relief must be sought in a court of superior jurisdiction.
74 I accept the respondent’s submissions that administrative law concepts have no application in this matter. This court is limited to determining whether the respondent has done that required of it by cl 22 of the General Agreement.
Issues
75 The only issue between the parties is whether the respondent complied with cl 22 of the General Agreement.
76 Clause 22 of the General Agreement does not confer a right to be granted purchased leave but rather, gives employees a procedural ability to have any purchased leave application assessed on its merits, with the employer giving consideration to the personal circumstances of the employee. The process is not axiomatic. An application may not be granted even if the necessary pre-requisites have been met and there are valid reasons to support the application.
77 The respondent accepts that the decision not to grant the claimant’s Application would not have been made on the merits if the decision was made capriciously or arbitrarily. It also accepts that the court would be able to infer that the respondent did not make a decision on its merits if the court formed the view that no reasonable employer in the respondent’s position could have come to the decision that the respondent has come to in this case. Those concessions are appropriate.
78 The ultimate question for this court however, is whether the respondent considered the Application on its merits, giving consideration to the personal circumstances of the claimant. It is not this Court’s role to determine whether the respondent was correct in its decision, but rather, whether it carried out its decision making process in accordance with that required by cl 22 of the General Agreement.
The Decision
79 The respondent’s decision not to approve the claimant’s Application is said to be comprised of two separate decisions. Clearly, those decisions were made in one continuum.
80 The respondent’s first decision was not in conformity with the requirements of cl 22.3 of the General Agreement because it failed to give any consideration to the claimant’s personal circumstances. When it first considered the claimant’s Application, her personal circumstances were not known to it and therefore were incapable of consideration. That situation occurred in part because the application form the respondent provided to the claimant did not contain provision for the inclusion of personal circumstances. The form itself led to error. The respondent cannot, as it seeks to do, shift blame onto the claimant for lodging a form that did not refer to her personal circumstances. Indeed, the respondent had an obligation to ensure that its form did not lead the claimant (and the respondent) into error.
81 In the end result the problem with the form was not critical because the defect in the application form was subsequently cured when the claimant made known to the respondent her personal circumstances, which were then considered in making the second decision.
82 The decision complained of is the respondent’s second decision in which it refused to allow the claimant to enter into a purchased leave arrangement in 2015. The Acting Commissioner did not give evidence or provide a witness statement in this matter. There is no direct evidence from her as to why she refused the claimant’s Application. The Acting Commissioner’s reasons for declining the Application must therefore be gleaned from the available documentary evidence and from statements of subordinates who were involved in the process.
83 One such subordinate is Mr Cox. In Mr Cox’s statement (received by consent) made on 13 November 2015, he said at [20] - [24]:
20. On 28 November 2014 I emailed Terri and confirmed the decision that her application for purchased leave had been declined, and advised “The reason (the application) has not been approved is that you have an accrued paid leave liability of 608 hours, which equates to in excess of 16 weeks” and that “it is considered that, at this point in time, you have sufficient paid leave entitlements.”
21. In this email I also confirmed the comments I had made at the meeting of 24 November 2014 in respect of the ability to reapply for purchased leave throughout the year. Specifically, I advised “…I would note that applications for purchased leave may be made throughout the year, and should you apply again, that application may be assessed with regard to the circumstances, including your accrued leave liability, that exist at that future time.”
22. On 1 December 2014, Terri sent me an email requesting that her application for purchased leave be reconsidered. Both Murray and Tracey were copied into this email.
23. On 2 December 2014, I met with Nicki, Murray and Tracey to further discuss the application for purchased leave. Tracey outlined details of a conversation that she had had with Terri regarding her personal circumstances, including the work Terri was undertaking to settle her late father’s estate, and her desire to hold over her long service leave for the purpose of overseas travel in a year or so hence. I had confirmed at this meeting I was aware that Terri had been an avid traveller in her earlier years, but this had been something she had been unable to do for many years, due to family caring responsibilities.
24. Nicki advised at this meeting that she would still decline the application for purchased leave, essentially for the reasons that had been set out in my email of 28 November 2014 and detailed at paragraphs 20 and 21 above.
84 It is apparent from Mr Cox’s statement that the Acting Commissioner refused the Application because the claimant had an ‘accrued paid leave liability of 608 hours equating to 16 weeks leave’ and that it was considered that she had sufficient leave entitlements.
85 I digress for a moment to note that the Acting Commissioner, when making her decisions, was incorrect in her view that the claimant had 608 hours of leave owing to her. The claimant, in fact, had 22.5 hours less than that. The error was brought about by a record keeping defect. Nothing turns on that because it has been agreed (agreed facts page 3) that even if the true position was known, the decision would have been the same.
86 In an email from Ms Jenkin to the claimant dated 3 December 2014 (agreed document 18), Ms Jenkin said:
As advised above, your specific case has been considered individually and your personal circumstances taken into consideration. Though the impact to operational requirements within the Review may be minimal, the operational requirements of State Revenue and the Department of Finance are such that this request cannot be approved due to the necessity to reduce the current leave liability of the Department.
87 In that same email Ms Jenkin said:
We understand that you need to have a work/life balance and the need to reserve some leave for this purpose but the Commissioner is unable to support the approval of purchased leave when you have a significant balance of leave available to you which we consider would meet your requirments (sic). If you could provide any further explanation and / or breakdown of the leave you are intending to take in 2015 that would exhaust your current leave liability and require additional Purchased leave, please submit this and this may be taken into further consideration.
88 The claimant asserts that the respondent made it clear that purchased leave would be denied unless the claimant exhausted or otherwise committed to use all of her available leave.
89 The respondent denies that assertion. It says that although some portions of Ms Jenkin’s email dated 3 December 2014 suggest that the claimant needed to explain how she would exhaust her leave credits, the email was not written by the decision maker and does not purport to be comprehensive reasons for decision. Further, there is no obligation to provide reasons. The respondent says that in any event, the email of 3 December 2014 must be considered in context of Ms Jenkin’s further email dated 12 December 2014 (agreed document 20). That email makes it abundantly clear that the Acting Commissioner did not request the claimant to utilise all of her leave credits, but rather, that the claimant would need to more precisely identify when and how much leave she intended to take in 2015. In that email, Ms Jenkin went on to say:
Your current leave liability has been a factor in the decision, as are the operational requirements of the agency. I would also like to draw your attention to the guidelines which state that purchased leave can be applied for in addition to the normal 4 week entitlement. As you have in excess of this, it is considered that you have the leave resources available to meet your personal needs as outlined by yourself.
3. Leave Management Policy clearly states the need for the Department to manage its leave liability as below;
Introduction On 24 September 2012 Cabinet approved the capping of leave liabilities (in dollar terms) at 30 June 2012 levels. The Department of Finance (Finance) needs to take immediate action to manage leave liabilities.
As such, employees are requested to discuss their leave plans with their managers, this would usually occur at the employees PDP, “Leave Management Policy – Leave plans should also form part of everyone’s Performance and Development Plan (PDP)”. I am unsure if you have any leave plan in place but would encourage you to discuss this with your manager to inform him of your leave intentions for 2015 so these can be managed in conjunction with operational needs.
90 In the claimant’s witness statement made on 22 July 2015, the claimant refers to communications with Mr Jozwicki, made after 12 December 2015, and says that they are relevant. The respondent says that they are not relevant and therefore inadmissible. Further, the respondent says that such materials are covered by without prejudice privilege, which the respondent has not waived. In that regard, the documents (attached to the claimant’s witness statement) do not ostensibly indicate that they attract privilege and appear relevant and are therefore admissible. In any event this court, which is not bound by the rules of evidence, can have regard to them (see r. 35(4) of the Industrial Magistrates Courts (General Jurisdiction) Regulations 2005).
91 Having considered the documents, I find that they offer no further assistance in my determination.
92 It is abundantly clear from all of the available materials that the respondent, having considered the claimant’s personal circumstances, decided that she had sufficient accrued leave to meet her needs in 2015. It is obvious that the respondent was of the view that the claimant should access her accrued leave rather than purchase leave to accommodate her needs. In arriving at that decision, the respondent considered that the requirement to manage its leave liability was of considerable importance. In that regard, the respondent sought that the claimant use her accrued leave credits, rather than purchase leave, which would have had the effect of substantially maintaining the claimant’s overall leave credit.
Was the Decision Made Capricious, Arbitrary, or Unreasonable?
93 The claimant does not suggest that the decision was made capriciously. Indeed there is no basis for such a finding.
94 In determining whether the respondent’s decision was arbitrary I find that it was not because the respondent considered matters that had a rational connection with the Application. In that regard, the respondent was not only entitled to, but required to take into account the claimant’s leave credits and weigh that against its Leave Management Policy and the requirement for it to contain and/or reduce its leave liability.
95 Although the claimant takes issue with how the respondent considered her personal circumstances, leave credits and the respondent’s work priorities, the mainstay of her complaint is that in arriving at its decision to reject her Application the respondent impermissibly considered its overall leave liability or alternatively, if that was permissible, it applied an inflexible and undocumented policy or alternatively gave such consideration improper weight. The claimant asserts that in all of the circumstances, the respondent’s decision was manifestly unreasonable.
96 The pivotal issue to be considered in this matter in that regard is whether the respondent’s overall leave liability is rationally connected to any application for purchased leave.
97 I am of the view that it is because of the following reasons:
1. The fact that the respondent will take into account operational requirements is well known and acknowledged in the respondent’s Employee Purchased Leave Policy. That is the case because the respondent’s ability to manage its overall leave liability is but one aspect of its operational requirements.
2. If the respondent’s leave liability is too large, it may not have funds in its budget to cover its liability for leave. Any increase in costs (even if small) that result from an approval to grant leave is a legitimate and indeed obligatory consideration.
3. It may also impact on the respondent’s ability to grant other employees leave at their preferred timing.
4. If by granting an employee purchased leave the respondent’s overall operation is impacted, and because of budgetary or other considerations it is unable to undertake its day to day business, the whole purpose of the General Agreement will be frustrated.
98 There was nothing manifestly unreasonable in the respondent attempting to manage its leave liability. There was nothing unreasonable in it attempting to reduce its leave liability by causing the claimant to take accrued leave rather than parking it. That is the case even though the claimant’s accrued leave was not deemed excessive. The respondent is not precluded from attempting to reduce its overall leave liability by encouraging employees with non-excessive leave credits to take paid leave.
99 Clause 22.5 of the General Agreement requires satisfaction of an agency’s accrued leave management policy as a pre-requisite to access purchased leave. Compliance with an agency’s leave management policy does not guarantee approval for purchased leave and does not tie the hands of the employer. Whether or not an employer enters into the purchased leave arrangement is a matter for the employer, taking into account relevant factors pertinent to it.
100 It is the case that sometimes various policies will not sit comfortably together, as was in the case in this instance. There was some agitation between the flexible working arrangement commitment given by the respondent and its need to manage its leave liability. In those circumstances, it is incumbent for the decision maker to have regard to all relevant policies. The decision must, in the end result, be made on its merits weighing all relevant factors having regard to those policies.
101 In the particular circumstances there were factors weighing in each direction. In the claimant’s mind her personal circumstances favoured the grant of the Application whereas the respondent’s commitment to reducing its overall leave liability favoured the refusal. Given the factors that existed, it was open for the respondent to have formed the view that its requirements outweighed that of the claimant particularly given that she had a considerable amount of leave available.
102 It is not for this court to determine which of the factors carried greater weight or whether the ultimate decision was the correct decision.
103 The respondent submits that the court has no power to consider for itself whether it would grant the claimant’s Application, or to determine whether the respondent properly considered the Application on its merits. The court can only consider whether the matters taken into account by the respondent were rationally and logically connected to the Application.
104 I generally agree with that submission. This court cannot interfere with the respondent’s assessment of the factors considered provided that they were rationally and logically linked to the Application.
105 If some extraneous matter were considered which did not have a rational or logical connection to the Application, then the Application would not have been considered on its merits. However, that did not occur in this instance.
106 I find that the respondent considered the claimant’s Application on its merits because it took into account the following, which it was either required or permitted to do:
1. the claimant’s personal circumstances;
2. the claimant’s leave credits as at 31 December 2014;
3. the respondent’s work unit/branch priorities;
4. the respondent’s operations perspective, and
5. the respondent’s overall leave liability in light of its obligation to manage its leave liability.


Conclusion
107 The respondent has not breached cl 22.3 of the General Agreement because the respondent employer assessed the claimant’s Application on its merits and gave consideration to the claimant’s personal circumstances, as required.
108 It follows that the claimant has not made out her claim in which she alleged that the respondent has failed to comply with cl 22 of the General Agreement.




G. CICCHINI
INDUSTRIAL MAGISTRATE