One of the worst experiences in a working life is to be forced from an organisation without your agreement, particularly losing your job in a restructure.
No one wants to leave an organisation other than having made that decision themselves.
There are protective provisions in the State Award about process and payments to be made for employees made redundant and historically in the industry, despite the anxiety of the process, there are good termination payments and entitlements, and for many, new opportunities.
When the process under the Award is followed it’s invariably fairly automatic and it was, early in the year at Eurobodalla, where a restructure removed three of our members. One was senior staff as the Director, and under the bad old rules, 38 weeks and no reason necessary. The other two were Managers, one was accepted by the Council to be a redundancy because her position was removed from the structure and the second was potentially a redundancy because there were significant changes to her job and it was going to be advertised externally. The Council would take advice.
The advice clearly allowed the Council to sign Deeds of Release emphasising the terminations were both redundancies and their entitlements enhanced the Award minimum. It was agreed there would be two payments, the severance payments and pay in lieu of notice in February and an agreement that accumulated leave entitlements, annual and long service leave, would be paid in the next financial year, the first pay period after 1 July - to do the right thing by the employees and provide more beneficial tax arrangements in the next financial year.
But, at Eurobodalla, notwithstanding deeds of release clearly establishing they were redundancies, using that exact word on multiple occasions, and providing exit calculations showing the accumulated entitlements would be taxed at “32%”, when the payments were made in July, the Council had decided that they wouldn’t be taxed at 32%, but at a higher rate - causing significant losses for both the employees.
The members tried to pursue this, found the Council unresponsive and unhelpful and we filed a dispute on 4 September. By that stage it was clear that the Council had decided their initial calculations were wrong, and the employees should be taxed at a higher amount, claiming these were not “genuine” redundancies - even for the manager whose job no longer existed. What the? They didn’t confess to it, we had to pursue them and we worked out that’s the mistake they had made.
Unforgivingly, all this happened five months after the employees had left the Council, with no advice to either of them, nor us, that the Council had changed its mind.
We knew the Council had initial reservations about one of the manager jobs, but we’ve been doing this for so long and the view of the industrial bodies is consistent whether it’s the employer’s organisation or the unions, we can be confident about the sort of advice they would have received. That’s why the deeds used the expression “redundancy” on multiple occasions. The concepts of genuine or non-genuine redundancies is alien to local government, this is an industry where you are either redundant or you’re not. Employees can’t elect, out of the blue to be made redundant.
We thought the Council had simply got it wrong, they attempted to have the proceedings confidential and cover it up and were most concerned about the possibility that we might criticise or attack individual council employees when advising members what was going on. We gave an undertaking to the Senior Commissioner “we will not name or attack any individuals who may have been involved in the process at all.” That’s why this article deals with the Council, and doesn’t allocate any responsibility or blame beyond that.
We agreed. No names, to protect the guilty.
The Council told the Commission that they were seeking advice from Maddocks Lawyers. They were reluctant to disclose the questions they’d asked and we were able in the Commission to have them agree that they would provide us a summary of the questions, because, they said, the advice had been sought verbally. The quality of advice often depends on the question asked and the Senior Commissioner described our concern as avoiding “GIGO”, garbage in, garbage out.
The Council didn’t comply with their undertaking to share the questions, it seems following advice from Maddocks depa was right, and the Council could and should tax at 32% and not a higher figure - all that meaning Council’s vigourous and unpleasant responses to everything we ever said, was totally wrong.
The Council conceded they had taxed the employees at the wrong rate and that they would take steps to reimburse the money that had been wrongly taken from their payments as tax. Winner, one for us.
The Council after this folly, owed the employees an apology. We’d raised that beforehand, they should apologise, and not just because they were so disastrously wrong, but for taking so long defending their indefensible position and making the lives of two employees, who didn’t want to be terminated anyway, even worse. Pretty shameful, really.
The Council agreed that they would “reissue” a letter already provided to the members and incorporate an apology. We undertook that we would not publish those letters, we had seen them already, and we had no intention of publishing them.
However, in reissuing the letters, the Council added two paragraphs, one of which was to do with the apology, so we won’t publish it, but then there was this:
Which taxation rate applied to your unused accrued leave payments involved a complex interpretation of employment and income tax law. The initial classification of your taxation rate was made in good faith based on the information available to Council staff at the time your termination payment was made.
Seriously? They chose to reject the way the industry manages this every single time, they chose to reject the advice they had been given, they chose to do this apparent “complex interpretation of employment and income tax law”, and we’ve seen no actual evidence that they did, but after all the aggravation it just sounds like BS. It sounds like Donald Trump spoke off-the-cuff.
Have a listen, are we right, or are we right?
An immediate favourite for our prestigious HR awards in December.
