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09 Oct 2020

New VPS Enterprise Agreement commences operation today, so time to understand what changes you need to make

From today, the new Victorian Public Service Enterprise Agreement 2020 (VPS Agreement) is in operation, with a nominal expiry date of 20 March 2024. It will cover most non-executive VPS employees, replacing the existing terms and conditions of employment contained in the well-worn Victorian Public Service Enterprise Agreement 2016 (2016 Agreement).

No doubt the subtle changes brought about by the VPS Agreement will reveal themselves in practice over the next four years. For now, below are the key substantive changes which Victorian Government agencies covered by the VPS Agreement should be aware of, and the changes you will need to make in the short, medium and long term.


Mobility of Employees throughout the VPS

Mobility is a central feature of the new VPS Agreement. The stated aim of Mobility is to facilitate the ongoing employment of Employees who may be deployed to different locations and roles in the VPS in order to meet changing demands on government services.

Clause 15 sets out the Mobility Principles, which include:

  • a recognition that public service work is constantly changing, due to factors such as: new governmental priorities; population growth; the pace and scale of technological advancement; changing community service delivery expectations; and the need to respond to evolving complex public policy problems or crises;
  • that embracing these changing priorities is essential to providing secure and flexible employment for Employees; and
  • that the VPS is a professional public service, and a career path choice, and that there should be a focus on Employees gaining relevant and diverse skills and experience across the public service.

Clause 15 contains a statement of intention that the VPS Agreement as a whole is to be interpreted in a manner consistent with the Mobility Principles, and an express commitment that the parties will work to operationalise the Mobility Principles over the life of the agreement.

In recognition of the Mobility Principles, a new mobility payment (akin to an annual bonus) has been introduced in the VPS Agreement. This will be paid to all Employees, irrespective of whether they are actually affected by mobility changes or requirements or not, and made annually on 1 July of each year as a lump sum, effective from 1 July 2020.

The amount paid to each Employee will be equivalent to 1.25% of the top of each VPS Value Range or Grade. For the other classification structures under the VPS Agreement, the mobility payment will be aligned to the equivalent VPS rate. Over the life of the VPS Agreement, the potential annual payments range from just over $600 for some employees and up to $3000 for others.


Leave entitlements

Another substantial area of change under the VPS Agreement is to leave arrangements and in particular, parental leave. The most notable improvements to these entitlements are outlined below.

Taking and accrual of annual leave while on workers’ compensation

Clause 44.4 of the VPS Agreement has been included to clarify that Employees who are off work and in receipt of workers' compensation payments will be able to take and accrue annual and personal leave. This amendment should overcome any previously existing uncertainty about the application of section 130 of the Fair Work Act 2009 (Cth) in Victoria and the Full Court of the Federal Court’s decision in Anglican Care v NSW Nurses and Midwives' Association [2015] FCAFC 81.

Personal/Carers Leave

The basis for which an Employee may access his or her accrued Personal/Carer's Leave has been amended and Employees are now specifically entitled to take paid personal/carer's leave for the purpose of:

  • attendance at a medical appointment with a Registered Practitioner when the appointment cannot be reasonable scheduled outside the Employee's working hours; and
  • to care for an Assistance Animal who requires care or support.

Parental leave

Among the most significant and generous of the changes ushered in by the VPS Agreement is the new and improved parental leave entitlement.

The parental leave entitlement for an Employee who is a primary carer at the time of the birth or adoption of the child has increased from 14 weeks to 16 weeks of paid leave.

The parental leave entitlement for an Employee who is a secondary carer at the time of the birth or adoption of the child has been increased from 2 weeks to 4 weeks of paid leave. In addition, a further 12 weeks’ paid leave is available to a secondary carer who becomes the primary carer for the child within the first 78 weeks (18 months) of the birth or adoption.

This entitlement will provide a significant benefit not only to Employees who could otherwise only be a secondary caregiver, or a subsequent unpaid primary caregiver, to their child, as well as to the initial primary caregiver at home (whether a VPS Employee or not), who may be able to return to work to progress his or (more commonly) her career at an earlier opportunity than would previously have been feasible.

Clause 55 also expands the existing eligibility to parental leave to provide access to entitlements to Employees whose child is born via surrogate, and to clarify that if an Employee is on parental leave, they are not required to return to work in order to access a further period of parental leave.

In addition, there is now more flexibility with how leave can be taken, as the existing requirement that parental leave be taken in a single unbroken period is amended to allow parents to use their leave to share care in a manner which suits them, subject to operational requirements. Employees will also be entitled to paid lactation breaks on return to work.


Misconduct and unsatisfactory work performance

The clauses dealing with unsatisfactory work performance and misconduct remain substantively unchanged from the familiar content of clauses 20 and 21 of the 2016 Agreement. There are however, a few amendments which warrant a mention:

Management of unsatisfactory work performance

Clause 24.7 has been amended to clarify that, prior to commencing the formal unsatisfactory work performance process, the Employer and the Employee may agree that if the Employee is not capable of meeting the required level of performance the Employer may reassign the Employee to a suitable alternative position where reasonably practicable, which may also be at a lower grade.

Any such reassignment would be taken by agreement of the Employer and Employee in lieu of undertaking an unsatisfactory work performance process under clause 24.

Management of misconduct

Some clients may have encountered an issue with the existing clause 21.12(b) of the 2016 Agreement, regarding discipline outcomes, which provides that “…the possible discipline outcomes are: …”, and then lists a serious of available sanctions separated by the word “or”.

Our clients have previously grappled with the unfortunate uncertainty as to whether it was within the power given by the clause to fashion an outcome that includes multiple sanctions, or whether the sanctions apply disjunctively, meaning that only one may be applied. In some cases, an Employer may consider it appropriate to apply more than one sanction to appropriately address proven misconduct without having to resort to termination of employment. For obvious reasons, in such cases it is preferable that there is clarity that that approach is consistent with the enterprise agreement.

Clause 25.12(c) of the VPS Agreement now includes an amendment to clarify that the Employer may apply a combination of discipline sanctions to form a single disciplinary outcome in order to avoid a more serious outcome (such as termination of employment).

There is another notable amendment to the Management of Misconduct clause which Employers should be aware of. Clause 25.14(b) now provides that a party to a misconduct investigation may invoke a dispute under clause 13 (Resolution of Disputes) on the question of procedural fairness, if an investigation under clause 25.10 has not be completed within six months of the Employee being advised of the alleged misconduct.


Salary increases

As was widely reported at the time the VPS Agreement was voted up, Employees will receive salary increases of just over 8% over the four year life of the agreement, as well as associated increases to allowances, with the first increases payable with effect from 20 March 2020.


Probation

The probationary period for a new Employee is now six months (up from three months). Accordingly, the right to extend the probationary period for a further three months has been removed.

Further, clause 18.3 has been amended to clarify that the probationary period is served on commencement of employment within the VPS and not an individual department or agency.

Night shift penalties

The penalty for night shift has increased to 20%, which was previously 15%. This new rate commences with effect from 1 July 2020.

To give effect to this, new definitions for night shift have been created in order to create a distinction between night and afternoon shifts. As such, a night shift must meet one of the following conditions:

  • commence on or after 8:00pm and before 6:00am; or
  • include a period of duty which ends at 6:00am to commence prior to 8:00pm and finishes on or after 6:00am; or
  • the majority of the period of duty is after 10:00pm.

Overtime

From 1 July 2020, the overtime calculation cap will be increased from the highest pay point within Grade 3, Value range 1 to the lowest pay point within Grade 4.


Gender equality

Clause 28 of the VPS Agreement seeks to operationalise the Government's gender pay equity principles to address a gender pay gap. This clause establishes a review process (which is effectively a separate dispute resolution process) for dealing with a claim by an Employee, a group of Employees or the CPSU, relating to gender equality principles, and enables a resolution of such a claim by the Public Sector Gender Equality Commissioner. If the Commissioner is unable to resolve a claim, it may be referred as a dispute of a collective character for resolution by the Fair Work Commission.

Under clause 28, Employers are also to consult with the CPSU in preparation of Gender Equality Action Plans pursuant to the Gender Equality Act 2020 (Vic).

Complying with the new Victorian Public Service Enterprise Agreement 2020

Compliance with the changes above can be triaged as:

Short term: as a priority, ensure your internal pay and other systems are amended to reflect the changes to overtime, penalties and leave accrual, including the interaction of leave and workers' compensation.

Medium term: probation review processes will need to be updated, along with internal misconduct and performance procedures, and the changes to salary.

Longer term: the new Gender Equality complaints procedure may well require a review of your internal complaint handling procedures to incorporate it. In addition, you might wish to get ahead of any problems by reviewing your own remuneration structure to identify any potential causes of complaint.

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Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this communication. Persons listed may not be admitted in all States and Territories.