AMWU v Thiess Degremont Joint Venture
[2012] FWA 8420
•2 OCTOBER 2012
[2012] FWA 8420 |
|
DECISION |
Fair Work Act 2009
s.739 - Application to deal with a dispute
"Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union" known as the Australian Manufacturing Workers' Union (AMWU)
v
Thiess Degremont Joint Venture
(C2012/897)
Building, metal and civil construction industries | |
SENIOR DEPUTY PRESIDENT WATSON | MELBOURNE, 2 OCTOBER 2012 |
Alleged dispute concerning redundancy - jurisdictional objection upheld - application dismissed.
[1] This decision arises from an application by the Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union known as the Australian Manufacturing Workers’ Union (AMWU) (the AMWU) under s.739 of the Fair Work Act 2009 (the Act) between it and Thiess Degremont Joint Venture (TD) in relation to the Thiess Degremont (“TD”) and AMWU, AWU, CEPU and CFMEU Victorian Desalination Project Greenfields Agreement 2009 1 (the Agreement). The dispute concerns the proposed redundancy of AMWU members from the Desalination Plant Project of TD (the Project) at Wonthaggi.
[2] The dispute was dealt with in conference on 9 August 2012, without resolution. TD participated in conciliation, whilst reserving its rights as to jurisdiction.
[3] When the dispute was programmed for arbitration in accordance with clause 15.1(b)(vi) of the Disputes Settling Procedure - within Part 1 of the Agreement, TD raised a jurisdictional objection, arguing that the dispute, properly characterised, did not fall within the scope of the Disputes Settling Procedure.
[4] This decision deals with and determines the jurisdictional objection.
Background to the dispute
[5] The dispute arose from a decision by TD to make redundant an AMWU member who was a Health and Safety Representative (HSR) on the Project, as part of the demobilisation of the workforce, on or about 26 July 2012, shortly after the resolution, by agreement between the parties, of an earlier dispute which concerned, in part, the redundancy of HSRs. The HSRs employment, like that of other employees directly employed by TD, was governed by the Agreement.
Characterisation of the dispute
[6] For the purpose of the determination of the jurisdictional objection, the AMWU and TD agreed that the dispute is properly characterised as:
“A dispute concerning the selection of particular employees for redundancy, the timing of those particular selections and the manner, or the process, that the employer adopted in making those selections, based on the effects that those selections have on employee individual entitlements and on union delegate and Health & Safety Representative (HSR) representation on the Project.” 2
The disputes procedure
[7] The Dispute Settlement Procedure in clause 15 of Part 1 – Project Wide Common Terms and Conditions - is found within clause 15.1 - Matters other than Occupational Health and Safety - of the Agreement. The scope of the procedure is found in clause 15.1(a)(i):
“This clause sets out procedures to settle disputes and grievances relating to any and all matters arising out of or in connection with the application or interpretation of this Agreement or the National Employment Standards (‘NES’).”
[8] It is not suggested that the dispute relates to the NES. The AMWU and TD accepted that the dispute is about the application of the Agreement and not about the interpretation of the Agreement. Accordingly, the jurisdictional issue to be determined is whether the dispute, as jointly characterised by the AMWU and TD, is a dispute or grievance relating to any and all matters arising out of or in connection with the application of the Agreement.
[9] Justice Tracey considered clause 15.1(a)(i) in Construction, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Thiess Pty Ltd, 3 in the context of a dispute about redundancies consequent upon TD exercising a right under the Agreement to alter shift patterns. His Honour characterised clause 15.1(a)(i) as follows:
“46. The construction issues in the present case do not turn on jargon or industrial usage. It is, however, necessary to have regard to the context in which Clause 15.1 is to be found and to the purposes which it and the Agreement as a whole are designed to serve. It is also necessary to take into account the fact that the agreement is a greenfields agreement with multi union parties which is designed to regulate the terms and conditions of hundreds of workers on a unique project located in a remote part of Victoria.
47. Attention must, however, first be directed to the language of Clause 15.1. The Clause is plainly intended to have operation in a wide range of circumstances. It prescribes procedures which are designed (relevantly) ‘to settle disputes and grievances relating to any and all matters arising out of or in connection with the application or interpretation of this Agreement ...’: see Clause 15.1(a)(i). The Agreement contemplates that during its life, disputes and grievances will arise between the parties which will need to be resolved. Not all disputes and grievances which might conceivably occur on the project will be subject to the dispute settling procedure. The operation of Clause 15.1 will only be attracted if they can be linked to ‘the application or interpretation’ of the Agreement.
48. The draftsman has employed very broad language in forging the link between relevant disputes and grievances and the Agreement. The link will be established if the disputes and grievances can be said to relate to ‘any and all matters arising out of or in connection with’ the application or interpretation of the Agreement.
49. All parties accepted that the phrases ‘relating to’, ‘arising out of’ and ‘in connection with’ were of wide import. They were correct to do so.”
[10] Consistent with the conclusions of Justice Tracey, the AMWU and TD both accepted that clause 15.1(a)(i) is expressed in very broad terms but it’s reach is not unlimited.
[11] Like the parties before Justice Tracey, the AMWU submitted that “relating to”, “arising out of” and “in connection with” were phrases of wide import, relying on various authorities to that effect. 4 That proposition was not challenged by TD and is accepted by me.
Submissions
The AMWU
[12] The AMWU submitted that the dispute notified relates to redundancy which is dealt with at clause 11 of the Agreement.
[13] Clause 11 provides:
“11. REDUNDANCY
11.1 An employee shall accrue a severance payment of $5.05 flat per hour worked with a minimum of $64.40 per week. The flat hourly severance payment shall increase over the life of this Agreement as outlined in the table below:
(Table containing Redundancy Contribution – Flat Rate per week omitted)
11.2 Employees, other than the electrical & instrumentation trades, shall have their accrued severance payments lodged with the relevant fund being either Incolink fund No 1 or Incolink fund No 2.
11.3 For the electrical & instrumentation trades employees the relevant fund is Protect.
11.4 To the extent necessary to give effect to this clause during the life of this Agreement, clause 17.4 Redundancy Pay Schemes in the Building and Construction General On Site Award 2010 as in force from time to time is incorporated into this Agreement by reference.”
[14] The AMWU submitted that the termination of employment of the relevant employees, the selection for redundancy and payment of redundancy entitlements under clause 11 relates to redundancy. It further submitted that the dispute is “in connection with” the proposed “application” of the redundancy clause (clause 11) of the Agreement. The AMWU submitted that how and when TD applies the redundancy clause is a matter in connection with the application of clause 11 of the Agreement. The AMWU submitted that but for the selection of an individual for redundancy, clause 11 would not be applied and the timing of the decision relates directly to the application of clause 11 because the quantum of redundancy entitlement is calculated by length of service.
[15] The AMWU further submitted that the broad interpretation of clause 15.1(a)(i) for which it contends is supported by the purpose and objects of the Agreement as may be discerned from the terms of the Agreement itself:
- Clause 2.1 records the commitment and objective of achieving harmonious industrial relations and working in a spirit of cooperation and industrial harmony to ensure the success of the Project; and
- Clause 2.2 records the parties’ commitment to working together in a collaborative and cooperative partnership to ensure a smooth delivery of the Project.
- Clause 2.4 of the Agreement recognises the critical importance and the completion of the deadline;
[16] The AMWU submitted that the implementation of redundancies, particularly large scale redundancies, is extremely likely to create industrial disputes. It contended that, objectively, the parties should be taken to have intended that such potential disputes should be contained and processed through clause 15. It submitted that, given the context of this Agreement and the Project, when read in light of the objectives and purpose of the Agreement and other clauses of the Agreement restricting the operation of clause 15.1, it is overwhelmingly likely that the parties intended such disputes to be dealt with through the processes in clause 15.
TD
[17] TD submitted that whilst it is clear that clause 15 is wide in its scope, it is equally clear that not all disputes arising between TD and its employees (or their unions) will amount to qualifying grievances or disputes. It submitted that clause 15 does not cover disputes which have no connection with the Agreement or the NES.
[18] The dispute, as jointly described, does not relate to the application of clause 11 of the Agreement or any other clause of the Agreement. Clause 11 of the Agreement is a provision obliging TD to make payment of a periodic amount into the Incolink redundancy fund and is unrelated to the selection of employees for redundancy, the timing of those selections or the processes applied. There is nothing about the application of Clause 11 that affects, or is affected by, decisions about who should be made redundant and when. The provision of payments in respect of redundancy has application independently of whether employees are selected for redundancy.
[19] TD submitted that there is no provision in the Agreement that concerns - whether by its application or interpretation - the selection of employees due to redundancy. Whilst selections might be disputed, such disputes are not related to matters arising out of or in connection with the application or interpretation of the Agreement.
[20] TD submitted that the dispute is not of a kind which Fair Work Australia can properly be asked to deal with under s.739 of the Act. The dispute does not have the necessary connection with the application or interpretation of the Agreement. The application should be dismissed.
Conclusion
[21] Both parties correctly submitted that clause 15.1(a)(i) is broad in its scope, but not unlimited. I accept that the broad commitments of the parties in clause 2 of the Agreement and the specific exclusion of some matters from the scope of the disputes provision 5 support a broad reading of clause 15.1(a)(i). However, they do not extend the scope beyond those relating to any and all matters arising out of or in connection with the application or interpretation of this Agreement or the National Employment Standards. As noted by Justice Tracey “Not all disputes and grievances which might conceivably occur on the project will be subject to the dispute settling procedure. The operation of Clause 15.1 will only be attracted if they can be linked to ‘the application or interpretation’ of the Agreement.”6
[22] Clause 11 of the Agreement does not deal with the selection or process of redundancy. It is a provision which obliges TD to make a periodic severance payment into a nominated redundancy fund, in satisfaction of its obligations in respect of redundancy in the event of the redundancy of a particular employee. It does not deal with right (or restrictions on the right) to make employees redundant or the selection, timing or process for effecting redundancies. It does not deal with the entitlement of employees upon redundancy. The matters in the dispute, as characterised by the parties, are not matters relating to, arising out of or in connection with the application of clause 11 of the Agreement.
[23] This is not a case of the type considered by Justice Tracey, where redundancies were a direct consequence of the application of an Agreement provision - in that case, the exercise by TD of its right under the Agreement to alter shift patterns. Even in the context of a broad disputes procedure, and the wide import of the phrases “relating to”, “arising out of” and “in connection with” the necessary connection between the application of the Agreement - clause 11 in particular - and the matters in dispute are absent in this case.
[24] The AMWU was not able to point to any other provision of the Agreement which provides the necessary connection between the application of the Agreement and the dispute, as properly characterised.
[25] The AMWU submitted that clause 5.6 - Termination by the Employee - implied the power to terminate and the dispute relates to the application of that implied power. Accepting that the reference was intended to be to clause 5.4 - Termination of Employment, the proposition is unsustainable. Clause 5.4 requires TD to provide notice of termination, of prescribed periods, or payment in lieu. Clause 5.4 is not a power to terminate, implied or otherwise. The power to terminate arises from common law, not the Agreement.
[26] The AMWU submitted that the implementation of redundancies affects certain matters dealt with in the Agreement - for example the importance of health and safety representatives in clause 18.1(b) and the right to representation under clause 16. It contended that such effects of the redundancies in dispute brings the dispute within clause 15.1(a)(i). This submission mischaracterises the issue for determination. The fact that redundancies might impact upon entitlements or obligations within the Agreement - for example, the redundancy of an employee would affect their entitlement to receive wages, allowances, superannuation and other benefits prescribed by the Agreement - is not the issue. The issue is whether the dispute, as jointly characterised by the AMWU and TD, is a dispute or grievance relating to any and all matters arising out of or in connection with the application of the Agreement
[27] I find that the dispute concerning the selection of particular employees for redundancy, the timing of those particular selections and the manner, or the process, that TD adopted in making those selections, based on the effects that those selections have on individual entitlements and on union delegate and HSR representation on the Project is not a dispute or grievance relating to any and all matters arising out of or in connection with the application or interpretation of the Agreement.
[28] I find that clause 15.1(a)(i) of the Agreement does not authorise Fair Work Australia to deal with the dispute. The application is dismissed.
SENIOR DEPUTY PRESIDENT
Appearances:
J Maloney for the “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU).
J Snaden with D Fleeton for Thiess Degremont Joint Venture.
Hearing details:
2012.
Melbourne:
August 28;
September 28.
1 AE873094 PR992391.
2 Exhibit AMWU 1.
3 [2011] FCA 1020.
4 Elkateb v Lawindi (1997) 42 NSWLR 396, at p.402; Fountain and Another v Alexander and Another (1982) 150 CLR 615, at 629; Government Insurance Office of New South Wales v R. J. Green & Lloyd Pty. Limited (1965-1966) 114 CLR 437, at 442-443 and 447; IBM Australia Ltd v National Distribution Services Ltd (1991) 22 NSWLR, 466, at 488 and Timmic v Hammock (2001) FCA 74, at para 9.
5 AE873094 PR992391, clause 17.2.
6 [2011] FCA 1020, at para 47.
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