Newcastle management’s 'act in haste, repent at leisure' costs them $6m

A decision by the University of Newcastle (UON) to force all staff to take 5 days’ annual leave in April 2020 has been overturned, with a recommendation management recredit all staff at a cost of around $6 million.

COVID-19 forced leave

On 31 March 2020, University of Newcastle (UON) Vice-Chancellor Alex Zelinsky announced all staff would be directed to take 5 days’ annual leave from 20–24 April 2020. An exemption process was instituted, but the only criteria for being granted one was if work was essential to the University’s operations.

Australian workers benefit from a range of core entitlements which exist only because the union movement has collectively fought for them over generations. In 1856, it was the 8-hour workday. In 1885 compensation for injuries in the workplace, in 1947 the 40-hour week, which became 38 in 1983. In 1951 long service leave, in 1971 unfair dismissal laws were introduced, in 1972 equal pay for women and in 1973 a minimum wage for all.

And, let’s not forget paid sick leave that was so critical through the first year of the pandemic. It was only in 1941 that one week of annual leave became universal for Australian workers. This was followed by two weeks in 1945, three weeks in 1963, and four weeks in 1974. As recent attacks on penalty rates demonstrate, these entitlements cannot be taken for granted. They must be vigorously defended.

NTEU disputes management's actions

On 9 April 2020, the NTEU disputed the UON management direction that all staff take annual leave as being contrary to the provisions of the University’s Enterprise Agreements and the Fair Work Act 2009. The dispute related to four different categories of staff:

1. Academic staff

2. Professional staff

3. Teachers

4. Staff for whom the direction would create a negative leave balance.

After months of negotiation and several proposed settlements that management walked away from, NTEU sought arbitration. Management was initially represented by the Australian Higher Education Industry Association (AHEIA) but engaged counsel shortly before the hearing in November 2020.

The arbitration commenced and Counsel for management informed the Commission that they no longer pressed the issue of academics and staff directed into a negative leave balance (to the extent of the negative balances). Arbitration was thus confined to professional staff and teachers on the questions of:

1. Did clause 57.9 of the University of Newcastle Professional Staff Enterprise Agreement 2018 and clause 77.9 of the University of Newcastle Academic Staff and Teachers Enterprise Agreement 2018 permit the University to direct professional and teaching staff to take the five days’ annual leave between 20-24 April 2020?

2. If the answer to question 1 is ‘yes’, was it reasonable within the meaning of section 93(3) of the Fair Work Act.

Our position was that the answers were ‘no’ and ‘no’, the University’s position was the opposite.

The evidence of management was that they had not considered the provisions of the agreements before making the direction. The idea was floated for the first time on Sunday 29 March 2020, raised and decided in an Executive Committee meeting on 30 March, and then communicated to staff the next day, 31 March 2020.

Under cross-examination, serious questions were raised as to whether UON managers had colluded in the preparation of their evidence. Witnesses had no adequate answers, in our view, as to why some had helped prepare the statements of others, why some had read the statements of others and why some paragraphs were replicated verbatim in multiple statements.

No ability to direct staff

Disturbingly, and embarrassingly, the Chief People and Culture Officer and the Associate Director, Employee Relations and Work, Health and Safety admitted that they had not considered the Agreements or the Fair Work Act, they had sought no internal or external advice on the legality of the direction, they did no research of their own and did not provide any advice to the Vice-Chancellor on the legality of the direction. It was not until after the direction had been effected that they considered the legality of the direction, well after we had served our dispute.

On 24 November 2020, the Fair Work Commission (FWC) found management could direct professional and teaching staff to take the five days’ annual leave but could not give such a direction under s 93(3) of the Act because of the absence of constraints in the clauses on the exercise of a direction to take annual leave meant that the clauses were not consistent with the Act, and therefore invalid and of no effect.

The effect of the decision is that UON management had no ability to direct staff to take annual leave unless the staff member has accrued 40 days of paid annual leave because it is a persuasive decision that is likely to be followed in any future dispute. As concerns professional and teaching staff, it also meant the resolution of a separate dispute in the favour of staff and the NTEU as management was unable to direct a nine day close down over the Christmas period.

The decision recommended management recredit all staff five days annual leave, which management did at a cost of around $6 million.

Management has appealed the decision, which was heard by the Full Bench of the FWC on 26 February. The decision has been reserved but management has undertaken not to seek repayment if successful. ◆

Josh Gava, Senior Industrial Officer, NSW Division