Aristithis Mavrojianis v Adelaide Brighton Cement Ltd T/A AdBri Limited

[2021] FWC 6270

[2021] FWC 6270

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
Section 739 - Application to deal with a dispute

Aristithis Mavrojianis
v
Adelaide Brighton Cement Ltd T/A AdBri Limited
(C2021/5000)

DEPUTY PRESIDENT ANDERSON ADELAIDE, 24 NOVEMBER 2021

Alleged dispute about matters arising under an enterprise agreement - classification and hours of returning employee – conciliation unsuccessful – private arbitration opposed - whether jurisdiction to arbitrate – no jurisdiction - application dismissed

[1] On 24 August 2021 Mr Aristithis (Ricky) Mavrojianis (the applicant) filed a dispute in the Commission under section 739 of the Fair Work Act 2009 (the FW Act). The application was made on his behalf by the Australian Workers’ Union (SA Branch) (AWU).

[2] The respondent is Adelaide Brighton Cement Limited (Adbri or the respondent).

[3] The subject matter of the dispute is whether Adbri acted consistently with terms of the Adelaide Brighton Cement Birkenhead Enterprise Agreement EA 2017 (the Agreement) in reducing Mr Mavrojianis’s working hours and classification upon his return to work from a work-related injury.

[4] The dispute did not resolve by conciliation.

[5] A preliminary question in advance of arbitration has arisen. The applicant seeks arbitration. Adbri does not consent to arbitration. Adbri contends that in the absence of consent, compulsory arbitration by the Commission is not available under the dispute settlement terms of the Agreement. Having endeavoured to conciliate the matter, both parties agree that the Commission should determine this preliminary question before dealing further with the application.

[6] This decision solely concerns the agreed preliminary question:

“Does the applicant (Mr Mavrojianis) have the right to have the dispute arbitrated by the Commission in circumstances where the respondent (Adbri) has not agreed to arbitration?”

[7] Following conciliation on 31 August 2021, directions were issued. A directions hearing was conducted on 7 October 2021 whereupon the parties agreed that the preliminary question be determined on the papers.

[8] On 7 October 2021 I directed the filing of submissions and, in parallel, further private negotiation. That did not resolve the matter.

[9] On 14 October 2021, in conjunction with the filing of submissions, the AWU requested further conciliation by the Commission. This was not agreed by Adbri.

[10] In light of indications by the applicant and respondent that the preliminary question could be determined on the papers, in light of the submissions filed and in light of earlier unsuccessful conciliation by the Commission and further unsuccessful private negotiation between the parties and the respondent’s unwillingness to engage in additional conciliation, I considered it appropriate to determine the preliminary question, which I now do.

[11] In arriving at this decision I take into account all matters advanced by the parties including written submissions filed 1 and relevant industrial history of the Agreement as appearing in Commission files and as notified to the parties2. Both parties were provided an opportunity to file further submission on the relevant industrial history appearing in Commission files. Each relied on earlier submissions filed.

Facts

[12] Based upon facts agreed by the parties, I make the following findings.

[13] Mr Mavrojianis sustained a work related injury in August 2017. He has reached maximum medical improvement and has reduced capacity to perform certain duties.

[14] On 22 April 2021 Adbri met Mr Mavrojianis and presented a proposal for alternate employment in a modified role and a return to work plan.

[15] Mr Mavrojianis returned to work on 22 April 2017 in the modified role.

[16] At a meeting on 17 June 2021 and by correspondence on 2 July 2021 Adbri informed Mr Mavrojianis that the modified role meant his position classification would change (to CSC4 from CSC5) and his “committed hours” package under the Agreement would be reduced to 208 hours per annum (from 390).

[17] By letter on 30 July 2021 the AWU, on behalf of Mr Mavrojianis, contended that the changes would “significantly reduce our member’s committed hours and remuneration” and “it is unlawful for an employer to unilaterally change the terms of a contract of employment.”

[18] On 6 July 2021 Adbri wrote to the AWU advising that it considered its decision lawful and consistent with the Return to Work Act 2014 (SA).

[19] On 6 July 2021 the AWU responded maintaining that the changes were not consistent with the Return to Work Act 2014 (SA) and further, that they were in breach of clauses 5.3 (Committed Hours) and 7.3 (Introduction of Change Processes) of the Agreement. The AWU sought that “the status quo prior to this change be applied until such time as the consultation process has ended”.

[20] Adbri and the AWU met to discuss the matter on 19 August 2021. The AWU proposed a settlement whereby either the committed hours package be reduced or the classification be reduced, but not both.

[21] Adbri did not accept this proposal. It considered its conduct lawful and reasonable, and that the matter between it and Mr Mavrojianis was settled as he had commenced working in the modified role.

[22] On 24 August 2021 the AWU filed this dispute in the Commission. The application seeks orders for reinstatement of the previously applying committed hours and classification.

[23] The application provides that “the parties have been unable to resolve the dispute in accordance with clause 4.2(a)-(g) of the Agreement.”

The Agreement

[24] The Adelaide Brighton Cement Birkenhead Enterprise Agreement EA 2017 is an industrial instrument covering Adbri as well as persons employed at Adelaide Brighton Cement’s Birkenhead operations in Adelaide, including Mr Mavrojianis.

[25] The AWU is an industrial association covered by the Agreement.

[26] Clauses relevant to this application include:

•  Part 4 Terms and Conditions of Employment;

•  Clause 4.2 Settlement of Disputes;

•  Clause 5.3 Committed Hours;

•  Part 7 Introduction of Change;

•  Clause 7.1 Principles Concerning the Management of Change;

•  Clause 7.2 Processes for Introduction of Change;

•  Clause 7.3 Processes;

•  Clause 7.4 Nature of Consultation; and

•  Clause 7.5 Referral to Commission.

Submissions

Mr Mavrojianis

[27] The AWU submit that the Agreement provides for compulsory arbitration of the dispute.

[28] The AWU rely on clause 7.5 of the Agreement ‘Referral to the Commission’. The Union says that the dispute falls within the ‘Introduction of Change’ provisions of the Agreement (Part 7). It says that the changes are “significant in nature” within the meaning of clause 7.2 and thus the processes set out in the Agreement to manage change (clause 7.3) and deal with disputes about the introduction of change (clauses 7.4 and 7.5) apply. It says that Adbri failed to comply with all processes at a workplace level under clause 7.3 of the Agreement in advance of making the change.

[29] The AWU contends that preconditions for arbitration have been met. It says that the required consultation has been undertaken, that conciliation has occurred and that the circumstances contemplated for private arbitration under clause 7.5(c) exist.

[30] The AWU also refer to clause 4.2 Settlement of Disputes, though acknowledge that arbitration under that clause requires consent of the parties (which, in this matter, is not forthcoming from the employer).

Adbri

[31] Adbri submit that the dispute cannot be arbitrated under clause 4.2 of the Agreement ‘Settlement of Disputes’ because only consent and not compulsory arbitration is provided by that clause. It has not consented to arbitration.

[32] Adbri indicate that whilst it actively participated in workplace discussions with Mr Mavrojianis and the AWU, and (on a without prejudice basis) in conciliation in the Commission, it has made it clear to the applicant and the Union that it did not consent to arbitration. Abdbri holds this view because it considers it has provided suitable employment to Mr Mavrojianis in excess of what was required.

[33] The without prejudice basis on which Adbri participated in conciliation is that it does not consider the applicant to have complied with all processes at a workplace level under clause 7.3 of the Agreement in advance of making this application. It says that those processes are conditions precedent to the Commission’s conciliation jurisdiction being invoked. In particular it refers to a failure by the applicant to notify a cooling off period within the meaning of clause 7.3(d) and 7.5.

[34] Adbri further submit that compulsory arbitration rights do not arise under clause 7.5 because the dispute does not fall within the provisions of Part 7 ‘Introduction of Change’. More specifically, it says that change applying to Mr Mavrojianis cannot be characterised as “significant in nature” within the meaning of clause 7.2 and that none of the processes for managing change or settling disputes over change in clauses 7.3, 7.4 or 7.5 apply.

[35] Adbri submit that any dispute Mr Mavrojianis has about suitable duties following his return to work can be pursued in the South Australian Employment Tribunal under the Return to Work Act 2014 (SA).

Consideration

Private arbitration jurisdiction

[36] It is appropriate to identify at the outset the nature of the arbitration jurisdiction the applicant seeks be exercised.

[37] Arbitration of disputes between persons covered by agreements is dependent on the terms of the agreement and relevant provisions of the FW Act.

[38] The Commission has no inherent or broadly based arbitration rights over industrial disputes. Section 595(1) of the FW Act provides:

“595 FWC’s power to deal with disputes

(1) The FWC may deal with a dispute only if the FWC is expresslyauthorised to do so under or in accordance with another provision of this Act.

(2) The FWC may deal with a dispute (other than by arbitration) as it considers appropriate, including in the following ways:

(a) by mediation or conciliation;

(b) by making a recommendation or expressing an opinion.

(3) The FWC may deal with a dispute by arbitration (including by making any orders it considers appropriate) only if the FWC is expresslyauthorised to do so under or in accordance with another provision of this Act.

(4) In dealing with a dispute, the FWC may exercise any powers it has under this Subdivision.

(5) To avoid doubt, the FWC must not exercise the power referred to in subsection (3) in relation to a matter before the FWC except as authorised by this section.” (examples excluded)

[39] However, the FW Act provides that all agreements approved by the Commission must contain a clause providing a procedure for independent settlement of disputes about matters arising under the agreement. 3 A model term is provided in the FW Regulations.

[40] Whilst Mr Mavrojianis has made an application under section 739 of the FW Act, that section only “applies if a term referred to in section 738 requires or allows the FWC to deal with a dispute.” Section 738 includes a term in an enterprise agreement “that provides a procedure for dealing with disputes”.

[41] More specifically, section 739(4) provides:

“If, in accordance with the term, the parties have agreed that the FWC may arbitrate (however described) the dispute, the FWC may do so.”

[42] Neither the FW Act nor the model term mandate compulsory arbitration. The use of the word “if” in both sections 739(1) and 739(4), particularly when considered in statutory context (including section 595) clearly establish that the Commission’s jurisdiction to arbitrate under section 739 is subject to the terms of the relevant instrument (in this case, the Agreement).

[43] As collective agreements are private instruments between parties (albeit requiring approval of the Commission before having force and effect), any such arbitration is known as private arbitration.

[44] That the Commission is exercising a dispute settlement jurisdiction only as conferred on it by the agreement itself has been affirmed by the courts: 4

“Thus it is well established that “arbitration” by FWC pursuant to a term in an enterprise agreement is a private arbitration, based upon the consent of the parties, and not upon the coercive authority of the Australian state.”

[62] In a leading case on private arbitration (under legislation preceding the FW Act but apposite for current purposes), the High Court said: 5

“Where parties agree to submit their differences for decision by a third party, the decision maker does not exercise judicial power, but a power of private arbitration. Of its nature, judicial power is a power that is exercised independently of the consent of the person against whom the proceedings are brought and results in a judgement or order that is binding of its own force. In the case of private arbitration, however, the arbitrator’s powers depend on the agreement of the parties, usually embodied in a contract, and the arbitrator’s award is not binding of its own force. Rather, its effect, if any, depends on the law which operates with respect to it.”

[45] Thus, it is open for an agreement under the FW Act to provide for private arbitration of disputes only by consent, or alternatively either by consent or compulsion. 6 Except where a specific statutory jurisdiction is being exercised, a jurisdiction to compulsorily arbitrate industrial disputes is not otherwise provided by the FW Act.

[46] A separate question, and one not relevant for current purposes is, if compulsory private arbitration rights are provided for in an instrument and an application under section 739 is made, whether the Commission has a discretion to not arbitrate but to otherwise deal with the dispute.

[47] Neither the applicant nor the respondent in this matter contest these principles.

[48] The issue which arises is whether the Agreement provides compulsory private arbitration of the dispute. Mr Mavrojianis says it does. Adbri says it does not.

Construction principles

[49] As the determination of the preliminary issue concerns the interpretation of relevant provisions of the Agreement, the established principles of construction apply.

[50] Interpretation of the instrument should be founded on language used in light of the Agreement read as a whole and its industrial, commercial and legislative context and purpose. 7 Context, able to be considered at this primary stage, includes relevant surrounding circumstances such as the industrial history of the Agreement or of disputed clauses.8

[51] These principles reject “narrow or pedantic approaches” and recognise that those who draft such provisions are likely to have “a practical bent of mind” and been “more concerned with expressing an intention in ways likely to have been understood in the context of the relevant industry and industrial relations environment than with legal niceties or jargon.” 9 As stated by the Full Court of the Federal Court:10

“Words are not to be interpreted in a vacuum divorced from industrial realities but in the light of the customs and working conditions of the particular industry.”

[52] Surrounding circumstances (drawn from objective background facts including the industrial context known to the parties) can inform the interpretation of an agreement; for example, where there are equally open alternate interpretations of its terms or where the language used is ambiguous. 11 Surrounding circumstances may include relevant history of the disputed provision:12

“Recourse may be had to the history of a particular clause “where the circumstances allow the court to conclude that a clause in an award is the product of a history, out of which it grew to be adopted in its present form …”

[53] Further, all words in an enterprise agreement must prima facie be given some meaning and effect. 13 Construction should “contribute to a sensible industrial outcome” and one “that will operate fairly towards both parties.”14

[54] However, the task of the Commission is not to rewrite or reframe the policy intent of an industrial instrument. 15 It is a narrower undertaking: to interpret an Agreement according to its language consistent with these canons of construction.

Character of the dispute

[55] The proper characterisation of a dispute is relevant to its determination. In this matter, Mr Mavrojianis challenges a decision by Adbri to change his committed hours package and position classification upon returning to work after a workplace injury. He disputes that Adbri acted consistently with rights and obligations under the Agreement and his contract of employment.

[56] Although the Agreement applies to more than one employee, the terms of the dispute as notified (F10 item 2.1) solely concern Mr Mavrojianis. The relief sought (F10 item 3.1) is specific to Mr Mavrojianis. The application is not advanced on behalf of a larger group in dispute or where the factual circumstances applying to Mr Mavrojianis have been selected as an exemplar of that broader dispute.

[57] It is apparent from this characterisation that the dispute concerns one employee only who is covered by the Agreement and the manner in which provisions of the Agreement apply to that employee.

[58] This characterisation does not change because the dispute has been filed by the AWU. The Union is an industrial association covered by the Agreement and representing collective interests of employees. However, Mr Mavrojianis is the applicant, not the AWU.

Do compulsory arbitration rights exist under Part 4 ‘Terms and Conditions of Employment’ of the Agreement?

[59] The answer to this question is no.

[60] Clause 4.2(h) of the Agreement provides that upon certain dispute resolution processes applying at a workplace level:

“4.2 Settlement of Disputes

In the event of a dispute (excluding a matter pursuant to the Introduction of Change Part 7) arising between the Company and an employee or employees concerning any aspect of work, including the National Employment Standards, the following procedure must be observed:

(…)

h) If the matter is still not settled it may be submitted to a mutually agreed mediator, or to Fair Work Commission (FWC) for conciliation. Both parties must then endeavour to have the hearing held as early as possible. The Commission may arbitrate only where the parties relevant to the dispute mutually agree. It is the intention of the company and employees that in fulfilment of this clause, FWC shall exercise the functions and powers normally associated with private arbitration. Accordingly, the company and employees expressly confer upon the FWC, the full range of conciliation and if mutually agreed arbitration powers necessary to resolve the matter or matters in dispute, pursuant to section 739 of the Act.

FWC cannot determine any dispute by imposing an outcome that is inconsistent with:

•  Either party’s legislative obligations;

•  The National Code of Practice for the Construction Industry or

•  The Implementation Guidelines for the National Code of Practice for the Construction Industry

(…)”

[61] The clause expressly provides that arbitration by the Commission may only occur “where the parties relevant to the dispute mutually agree”.

[62] As Adbri has not consented to arbitration, the Commission has no jurisdiction to arbitrate the dispute under clause 4.2 ‘Settlement of Disputes’.

Do compulsory arbitration rights exist under Part 7 ‘Introduction of Change’ of the Agreement?

[63] Clause 7 provides:

“7. PART 7 – INTRODUCTION OF CHANGE

7.1 Principles Concerning the Management of Change

The parties agree to the following key principles concerning the management of change:

a) The parties recognise and accept that change is inevitable and increasingly necessary.

b) Change must be ongoing to ensure that the Company remains viable and employee expectations concerning security of employment can be satisfied.

c) In considering the desirability and business case for any proposed changes the tests to be applied are requirements for the change to be:

•  Safe;

•  Efficient;

•  Legal; and

•  Fair

d) The parties commit to consult and abide by the procedures set out in this Clause in the event that proposed changes are not agreed. In support of this commitment there will be both detailed communication and strong reinforcement by the Company and employees and/or their elected representatives in respect of these procedures. Subject to any disagreement being referred to the Commission the changes will be implemented.

e) All parties share an intent that there be ‘zero industrial action’ and to that end will actively ensure that the Company, employees, delegates and officials will, on each and every occasion where a dispute arises and is not resolved, follow the applicable dispute settling procedure and not take industrial action.

7.2 Processes for Introduction of Change

a) A change is ‘significant in nature’ for the purposes of this Clause if the change will have substantial effects on:

(i) The composition, operation or size of the workforce in a section or department of the operations of the Company:

(ii) The skills required of employees;

(iii) The availability of job opportunities for employees;

(iv) The opportunities for promotions of employees;

(v) The security of employment of employees;

(vi) The hours of work of employees;

(vii) The location of work of employees;

(viii) Shift pattern changes;

b) Where a change is agreed in the Agreement it will not be regarded as significant in nature for the purposes of this Clause.

7.3 Processes

a) The provisions in this sub-Clause set out the terms and order of the procedure that shall govern the introduction and management of change which is significant in nature.

b) Where the Company has made a decision to make a change that is significant within the meaning of this Clause it shall notify the employees and/or their elected representative affected in writing of the elements of the proposed change, the intended date of commencement of the proposed change and the likely consequences for the employee(s) and Unions affected. This step shall occur before the introduction of the change.

c) The Company shall consult with employees affected about:

(i) The nature and reasons for the change;

(ii) The effects the change is likely to have on employees; and

(iii) Measures to avert or reduce any adverse effects the change is likely to have for the employees.

d) The Company shall give prompt consideration to matters raised by the employees and/or their elected representatives

The consultation process will conclude upon any party to the process declaring to other parties in writing that it regards the consultation process as exhausted or; an agreement is reached between the parties to the consultation on a settlement of the issues; or notification is made under this Clause of a dispute as to the change.

The consultation process must be comprehensive and genuine and may be assisted by the Commission. In any event the consultation process shall conclude twenty-eight (28) days after written notice is provided by the Company unless that period is extended by agreement between the Company and relevant employees and/or their elected representatives.

Where agreement is reached as to a change, the change is to be implemented immediately and the parties are to promptly record the terms of the agreement in writing. The terms so recorded shall be incorporated in and form part of this Agreement and if the Award or this Agreement is otherwise inconsistent with the terms recorded the terms shall override and apply to the extent of any inconsistency.

Where the consultation process concluded upon a party declaring to the other parties that it regards the consultation process as concluded, and there is disagreement as to the change proposed, the change may be implemented forthwith unless a party to the consultation process gives notice to the other parties in writing that it seeks a cooling off period. For such a notice to be effective it must be served by 5:00 pm on the day following the declaration that the consultative process is exhausted. If a party so notifies its request for a cooling off period, that cooling off period shall operate from the date of the notice for a period of fourteen (14) days.

If a party intends to seek the assistance of the Commission, it must do so at the same time that it notifies its request for a cooling off period. There must be no industrial action during the cooling off period. The status quo existing prior to the Company’s notice shall apply during the cooling off period. Any implementations of change shall cease upon the giving of notice for a cooling off period (except in relation to installation of equipment and capital works that have already commenced) and any part of the change made by that time will be reserved.

The proposed change may be put into effect after the expiry of the fourteen (14) day cooling off period subject to referral of the matter to the Commission pursuant to this Clause. A party to the consultation process may seek an extension or reduction of the cooling off period if the matter is referred to the Commission. The onus shall fall upon that party to establish grounds for varying the cooling off period.

7.4 Nature of Consultation

a) Consultation is the process through which employees share in problem solving and decision making. It provides for employees and/or their elected representatives input before Company management decide on action affecting the employees.

b) Consultation involves:

All parties to this agreement being prepared to put forward considered views with respect to desired improvements and alternatives as to how such improvements could be achieved;

An opportunity being given to all affected parties to fully understand the nature and impact of those views before any final decision on implementation of changes is made by the Company;

Fair consideration being given to the issues and concerns raised by the parties before any final decision on implementation of change is made.

7.5 Referral to Commission

a) The parties agree to refer any disputes relating to the introduction of change that arise during the twenty-eight (28) day consultation period or any fourteen (14) day cooling off period to Fair Work Commission for conciliation.

b) Subject to the conditions set out in sub-Clause (c), any matters remaining in dispute after conciliation may be submitted to the Commission for private arbitration and the Commission’s determination will be accepted by the parties and implemented as a condition of this Agreement. To that end, the Commission’s determination will be taken to have been incorporated into the Agreement and apply to the exclusion of any inconsistency without the need for variation.

c) Private arbitration under the Clause will apply either:

Where the parties agree; or

Where the circumstances contemplated by the parties and set out in correspondence to be tendered to the Commission as part of the certification proceedings, apply.”

[64] The Commission has an obligation to satisfy itself that jurisdiction exists to perform functions sought by an applicant (in this instance, arbitration). Only where the Commission is so satisfied can jurisdiction be exercised.

[65] Leaving aside whether dispute resolution steps at a workplace level under clause 7.3 were complied with in advance of this application being made to the Commission (Adbri submit they were not), the answer to this question requires the Commission to be satisfied of two matters. Firstly, that Part 7 of the Agreement applies to this dispute (properly characterised) and secondly, that clause 7.5 ‘Referral to Commission’ provides for compulsory arbitration of such disputes.

[66] As noted, interpretation should be based on language used in clause 7 in light of the Agreement read as a whole and its industrial, commercial and legislative context and purpose.

[67] Neither Part 7 nor more general terms in the Agreement (clause 1.9 ‘Definitions’) define what is meant by “change” in Part 7.

[68] Change provisions of a broadly comparable nature were first introduced in industrial instruments by a predecessor to the FWC following the 1984 Termination Change and Redundancy (TCR) test case. 16 Change provisions in various forms were subsequently incorporated in collective instruments (awards and agreements). Whilst termination and redundancy aspects of the National Employment Standards (NES) under the FW Act can be traced back to the TCR test case, the change provisions generally have not been so legislated.

[69] For the following reason, I am not satisfied that the dispute, as characterised, falls within Part 7 ‘Introduction of Change’ in the Agreement.

[70] I agree with Mr Mavrojianis that the two changes applied to him upon his return to work (classification and committed hours) at least collectively are “significant in nature” within the meaning of clause 7.2. For a change to be “significant in nature” clause 7.2(a) requires it to have “substantial effects” (amongst other matters) on skills, hours of work or shift patterns. The new role for Mr Mavrojianis appears to be that of forklift driver. On the material before me this appears materially different to the position held prior to the change. The reduction in committed hours (clause 5.3) appears to concern a change in additional hours of work beyond normal hours. Though Adbri may be correct in submitting it is not a change in a “shift pattern” (subclause 7.2(a)(viii)), I am satisfied that it is a change in “hours of work” within the meaning of subclause 7.2(a)(vi).

[71] However, I am not satisfied that the dispute, despite being significant in nature to Mr Mavrojianis, concerns “change” within the meaning of Part 7. Part 7 sits within a collective agreement – that is, the Agreement applies to multiple employees at Adbri’s Birkenhead Works (clause 1.5).

[72] Whilst an agreement, in conjunction with the FW Act 17, does have the effect of interposing onto individual contracts of employment its terms and conditions (as a minimum), it cannot be made with a single employee.18

[73] The operation of Part 7 must be read in the context of clause 1.3, which provides:

“1.3. Aims of Agreement

The parties to this Agreement recognise the specific business needs of the Birkenhead works.

a) The parties also recognise that to successfully implement better work practices requires:

i. Genuine consultation with the aim of reaching agreement; and

ii. Management and/or employees to be able, through open dialogue and the sharing of information, subject to commercial confidentiality, to identify better practices and work towards their practical application to the business; and

iii. A removal of any artificial barriers so that work is undertaken as long as it is safe, legal and the employee is competent.

b) Nothing in this Clause shall alter the operation or interpretation of any other Clauses of this Agreement.”

[74] Whilst subclause 1.3(b) has the effect that clause 1.3 does not read down the language of Part 7, clause 1.3 nonetheless provides contextual meaning. Part 7 is a part of the Agreement which provides methodology by which one or more of the aims in clause 1.3 are to be given effect.

[75] This includes, in the language of clause 1.3, the goal of successfully implementing “better work practices” through “genuine consultation” between “management and/or employees”.

[76] All references in clause 1.3 are to employees plural (clause 1.3(a)(ii)), not an employee singular. Clause 7 in its language and context is similarly directed to changes impacting employees collectively. Subclause 7.1(d) refers to employees plural, as does each of subclauses 7.2 (a) (i) to (vii). The consultation processes set out in subclauses 7.3(b),(c) and (d) also refer to employees plural, not singular.

[77] Considered in the context of both Part 7 and the Agreement read as a whole (including its aims), I conclude that Part 7 ‘Introduction of Change’ applies only to changes that are significant in nature having a substantial effect on any of the subject matters in subclause 7.2(a) insofar as the proposed change relates to a group of employees (plural) covered by the Agreement or all the employees (plural) covered by the Agreement. Part 7 does not relate to a proposed change to employment conditions of an individual employee where those changed conditions would not have a proposed effect on other employees or a group thereof covered by the Agreement.

[78] As the subject of this dispute is a change applying singularly to one employee returning from a workplace injury and is particular to that employee’s circumstances, I do not consider it to be a change invoking the operation of Part 7.

[79] As the dispute does not fall within Part 7 ‘Introduction of Change’ a right to compulsory arbitration cannot be sourced from clause 7.5 ‘Referral to Commission’. That subclause concerns itself solely with “disputes relating to introduction of change” under Part 7 (subclause 7.5(a)).

[80] The preliminary question is determined on that basis.

Does clause 7.5, if applicable, provide compulsory arbitration rights?

[81] However, given the submissions made and in the event that this conclusion is wrong and the Agreement is to be interpreted such that the dispute falls within Part 7, I deal with whether clause 7.5 provides compulsory arbitration rights.

[82] It is plain from the text of clause 7.5 that private arbitration of a dispute about the introduction of change can only occur in one of two instances; either “where the parties agree” or “where the circumstances contemplated by the parties and set out in correspondence to be tendered to the Commission as part of the certification proceedings, apply.”

[83] The first of these alternatives does not apply given that Adbri does not consent.

[84] To ascertain what “circumstances” the second alternative is referring to (and whether those circumstances exist in this matter) requires an assessment of what is meant in subclause 7.5(c) by “correspondence to be tendered to the Commission as part of the certification proceedings”.

[85] On this, the parties have a different view.

[86] The applicant says this is a reference to “certification proceedings” for a predecessor agreement applying at Birkenhead made twelve years earlier (in 2005).

[87] The applicant says that the “correspondence” referred to in subclause 7.5(c) is a letter dated 25 November 2005 tendered during the 2005 certification proceedings. The applicant says that the 2005 correspondence was provided to the Commission and set out agreed terms whereby a clause in the same terms in the 2005 Agreement allowed for private arbitration. The applicant says that this understanding remained constant and unchanged in subsequent generations of the agreement including the 2017 certification. The applicant also relies on minutes from certain bargaining meetings in 2005.

[88] In contrast, Adbri say this is a reference to written undertakings made by Adbri on 15 March 2018 placed before the Commission during certification proceedings for the 2017 Agreement. It says those undertakings included an undertaking concerning the Agreement’s dispute settlement term.

[89] It is convenient to set out the brief industrial history of the 2017 Agreement, at least as apparent from the submissions of the parties and the examination of Commission records.

[90] There have been enterprise agreements made specific to Adbri’s Birkenhead operations since the 1990s. All such agreements have been negotiated with the AWU and in some instances additional unions. The AWU has been a party to or covered by all agreements.

[91] For current purposes, the relevant industrial history commences in 2002.

[92] The Adelaide Brighton Cement Birkenhead Works Certified Agreement 2002 (2002 Agreement) came before the Commission for certification on 15 October 2002 (DP Hampton as he then was). Clause 7.5 of the 2002 Agreement provided: 19

“7.5. Referral to Commission

(a) The parties agree to refer any disputes relating to the introduction of change that arise during the twenty-eight (28) day consultation period or any fourteen (14) day cooling off period to the Australian Industrial Relations Commission for conciliation.

(b) Subject to the conditions set out in sub-clause (c), any matters remaining in dispute after conciliation may be submitted to the Commission for private arbitration and the Commission's determination will be accepted by the parties and implemented as a condition of this Agreement. To that end, the Commission's determination will be taken to have been incorporated into the Agreement and apply to the exclusion of any inconsistency without the need for variation.

(c) Private arbitration under the clause will apply either:

(i) Where the parties agree; or

(ii) Where the circumstances contemplated by the parties and set out in correspondence to be tendered to the Commission as part of the certification proceedings, apply.”

[93] During the 2002 certification proceedings, disagreement arose over whether proceedings should be adjourned pending a separate dispute involving two employees before another member. Reference was made by the employer to a “letter” sent to the parties and the Commission. The employer gave an undertaking to allow arbitration of the separate dispute. Union objections to certification were withdrawn. The Commission certified the 2002 Agreement.

[94] The letter accompanying the 2002 certification was signed by the employer and three unions (AWU, CEPU and AMWU). It read:

“12 September 2002

Dear Deputy President Hampton,

The parties agree the following explanations of clause 7.2 (b) and 7.5 (c) in relation to the Adelaide Brighton Cement Birkenhead Works Certified Agreement 2002.

For the purposes of clause 7.5 (c) (ii) the circumstances are as follows:

1. The matter shall only proceed where an agreed person is assigned to arbitrate the matter as a private arbitration between the parties;

2. An agreed person includes, but is not limited to:

a. Deputy President Hampton; and if not available

b. Commissioner Lewin;

c. Vice President Ross;

d. Senior Deputy President Watson.

3. Agent or legal counsel will be available to each party;

4. It is the intention of the parties to conduct the private arbitration as expeditiously as possible. The conduct of the arbitration is to be determined by the arbitrator.

5. This procedure may be varied with the consent of the parties provided that any variation is set out in correspondence and given to the Commission.

The parties understand that clause 7.2 (b) means:

1. The Agreement provides for a number of changes;

2. If a change is agreed in the Award or the Agreement, it is not 'significant in nature' with the meaning of clause 7.2 (a);

3. However, if the Agreement permits the parties to use the processes set out in clause 7 in relation to a particular change, then clause 7 will apply in the manner set out in the Agreement;

4. If the Company wants to implement a change that is not in the Agreement and that is significant in nature and has a substantial effect on the matters set out in clause 7.2 (a), then processes set out in clause 7 will apply.”

[95] The Adelaide Brighton Cement Birkenhead Works Certified Agreement 2005 (2005 Agreement) came before the Commission for certification on 22 December 2005 (DP Hampton as he then was).

[96] Clause 7.5 of the 2005 Agreement (found in Part 7 ‘Introduction of Change’) was in equivalent terms to the 2002 Agreement. It provided:

“7.5. Referral to Commission

a) The parties agree to refer any disputes relating to the introduction of change that arise during the twenty-eight (28) day consultation period or any fourteen (14) day cooling off period to the Australian Industrial Relations Commission for conciliation.

b) Subject to the conditions set out in sub-Clause (c), any matters remaining in dispute after conciliation may be submitted to the Commission for private arbitration and the Commission's determination will be accepted by the parties and implemented as a condition of this Agreement. To that end, the Commission's determination will be taken to have been incorporated into the Agreement and apply to the exclusion of any inconsistency without the need for variation.

c) Private arbitration under the Clause will apply either:

Where the parties agree; or

Where the circumstances contemplated by the parties and set out in correspondence to be tendered to the Commission as part of the certification proceedings, apply.”

[97] A letter was tendered to the Commission by the employer during the certification proceedings on 22 December 2005. It was also signed by the employer and three unions (AWU, CEPU and AMWU). It read:

“28 November 2005

Dear Deputy President Hampton

The parties agree the following explanations of clause 7.2(b) and 7.5(c) in relation to the Adelaide Brighton Cement Birkenhead Works Certified Agreement 2005.

For the purpose of Clause 75(c)(ii) the circumstances are as follows:

1. The matter shall only proceed where an agreed person is assigned to arbitrate the matter as a private arbitration between the parties;

2. An agreed person includes, but is not limited to:

a. Deputy President Hampton; and if not available

b. Commissioner Lewin;

c. Vice President Ross;

d. Senior Deputy President Watson

3. Agent or legal counsel will be available to each party.

4. It is the intention of the parties to conduct the private arbitration as expeditiously as possible. The conduct of the arbitration is to be determined by the arbitrator.

5. This procedure may be varied with the consent of the parties provided that any variation is set out in correspondence and given to the Commission.

The parties understand that Clause 7.2(b) means:

1. If a change is agreed in the Award or Agreement, it is not 'significant in nature' with the meaning of Clause 7.2(a);

2. However, if the Agreement permits the parties to use the processes set out in Clause 7 in relation to a particular change, then Clause 7 will apply in the manner set out in the Agreement;

3. If the Company wants to implement a change that is not in the Agreement and that is significant in nature and has a substantial effect on the matters set out in Clause 7.2(a), then processes set out in Clause 7 will apply.”

[98] When tendering the letter of 28 November 2005 during the 2005 certification proceedings, Adbri said of it: 20

“That document, served by way of clarification, seeks to establish the basis on which members relating to the introduction of change and in particular, the treatment of any disputes or the arbitration of disputes arising from such change are to be dealt with ..... agreed entirely by the parties and supplement the provisions contained in the agreement itself.”

[99] The unions, including the AWU, agreed with this position. The agreement was certified.

[100] Each of the subsequent four generations of agreement (2008, 2011, 2014 and 2017) contain a clause in identical form to that in the 2005 Agreement save for changed references to the name of the Commission.

[101] However in none of the approval processes or proceedings for the 2008, 2011, 2014 or 2017 agreements is there a record of a letter having been tendered as part of the approval process.

[102] The Adelaide Brighton Cement Birkenhead Works Certified Agreement 2008 (2008 Agreement) was a variation and extension of the 2005 Agreement, approved by the Commission on 19 September 2008. 21 There is no record of a letter having been tendered as part of the varied agreement being approved.

[103] The Adelaide Brighton Cement Birkenhead Works Certified Agreement 2011 (2011 Agreement) was approved by Fair Work Australia. There is a decision 22 but no record of proceedings. There is no record of a letter having been tendered as part of the approval process.

[104] The Adelaide Brighton Cement Birkenhead Works Enterprise Agreement 2014 was approved by the Fair Work Commission. There is a decision 23 but no record of a letter having been tendered as part of the approval process.

[105] The 2017 Agreement was approved by the Commission on 16 March 2018 to operate from 23 March 2018. 24 During approval proceedings before Commissioner Lee a document dated 15 March 2018 signed by a company officer containing five undertakings was presented to the Commission. That document was annexed by the Commission to the approved agreement. One of the five undertakings provided:25

“Dispute Settlement Term

Adelaide Brighton Cement Limited (Birkenhead) confirm the dispute settlement term applies to any matters arising under the agreement or the NES.”

[106] As noted, the approved agreement contained clause 7.5 in the terms set out in this decision.

[107] Consistent with the principles for construction of industrial instruments I take this industrial history into account. It is a relevant surrounding circumstance of objective background facts that may aid interpretation of the 2017 Agreement.

[108] I do not however take into account extracts of minutes of bargaining meetings conducted in 2005 submitted by the AWU. Apart from a lack of probative value (being extracts only), they reflect only a stage in bargaining, and in that respect at best record only the position of certain parties and not a concluded or agreed outcome. It is well established that evidence of subjective positions adopted in bargaining is not evidence of agreement and is not a relevant surrounding circumstance that properly informs interpretation of an instrument. 26

[109] What then is the meaning of clause 7.5 of the 2017 agreement?

[110] I do not accept Adbri’s submission that “correspondence” referred to in clause 7.5 is a reference to its written undertakings dated 23 March 2018. Undertaking 3 of those undertakings does not refer to clause 7. The language of undertaking 3 refers to the “Dispute Settlement Term” which is best understood as a reference to clause 4.2 ‘Settlement of Disputes’ in the Agreement. The Agreement makes sense understood that way given that the terms of undertaking 3 are consistent with the requirement in section 186(6) of the FW Act that the Agreement contain a settlement of disputes procedure.

[111] Considering the industrial history, the better conclusion is that clause 7.5 of the 2017 Agreement can be traced, by historical default, to the 28 November 2005 correspondence.

[112] However, for the following reasons that does not mean that clause 7.5 confers a right of private arbitration of the present dispute.

[113] Firstly, a right to private arbitration under subclause 7.5(c) is not enlivened because a factual precondition to non-agreed private arbitration does not exist. No correspondence was in fact tendered at the time of the 2017 Agreement approval proceedings.

[114] Subclause 7.5(c) requires correspondence to be tendered as part of “the certification proceedings”. In respect to the 2017 Agreement, that is a reference to the proceedings that were held by Commissioner Lee giving rise to the approval decision of 16 March 2018 . As no correspondence was tendered or foreshadowed to be tendered at that time, “the circumstances” in which private arbitration under clause 7.5 can occur absent agreement do not exist.

[115] I take into account the industrial history which establishes that the parties to each generation of agreement from 2002 carried over clause 7.5 (including subclause 7.5(c)) in the same terms as the 2002 Agreement. However, each approval of an agreement, even one ‘rolled-over’, is a separate proceeding and involves the exercise of independent and distinct decision-making power. Approval can only be granted by the Commission if statutory conditions at that time are met. No reference was made during any approval proceeding after 2005 to correspondence identifying circumstances in which private arbitration of workplace change disputes during the life of the agreement would occur. This is to be contrasted with what occurred in 2002 and 2005 when correspondence was tendered during certification proceedings.

[116] The language of subclause 7.5(c) would be impermissibly strained to accept that by historical default the “circumstances” set out in the 2005 correspondence were agreed to be the same “circumstances” for the purposes of the 2017 Agreement. Subclause 7.5(c) does not refer to “correspondence tendered” but correspondence “to be tendered”. It contemplates future conduct whereby those that made the 2017 Agreement turn their mind to what they agree as “the circumstances”, commit that agreement to correspondence and tender that correspondence during certification proceedings.

[117] Secondly, if (contrary to the above position) subclause 7.5(c) is to be interpreted such that a right to non-agreed private arbitration of workplace change disputes exists by historical default and the “circumstances” set in 2005 apply, this then requires agreement on and assignment to a particular arbitrator. In this matter, that has not occurred. The 2005 correspondence provides: 27

“The matter shall only proceed where an agreed person is assigned to arbitrate the matter as a private arbitration between the parties.”

[118] Four persons are then named as “agreed persons” eligible to be “assigned” to conduct private arbitration. Each of the four were members of the then predecessor to the Commission. A hierarchy amongst the four was expressed (Deputy President Hampton, as he then was, the preferred arbitrator and the other members if he were unavailable). The correspondence expresses this to be a non-exhaustive list (“an agreed person includes, but is not limited to”) although unhelpfully says nothing about how that list is to be supplemented.

[119] This arrangement whereby both the fact of private arbitration and the identification of a private arbitrator who has the confidence of the parties has to be assigned to arbitrate a specific dispute is consistent with the notion of dispute settlement of agreements under section 739 of the FW Act. The FW Act does not require private arbitration, where provided for, to be conducted by the Commission. Section 186(6) requires dispute settlement to be by the Commission or “another person who is independent” of those covered by the agreement. This is a statutory indication that those who make agreements set the terms for their resolution of their disputes, including (subject to the independence criteria) the identity of persons entrusted to arbitrate.

[120] The Commission as currently constituted is not an “agreed person” within the meaning of the 2005 correspondence.

[121] No non-agreed right to private arbitration of workplace change disputes exists at least for the Commission as presently constituted. Were this application re-allocated to Commissioner Hampton (to whom this dispute had been initially assigned until he became unavailable), the Commission would still need to be satisfied that it otherwise had jurisdiction which, for reasons set out in this decision, I have concluded it does not have. In addition, the issue of whether necessary pre-conditions to clause 7.5 arbitration have been met would need to be decided.

Conclusion

[122] The preliminary question for determination was as follows:

“Does the applicant (Mr Mavrojianis) have the right to have the dispute arbitrated by the Commission in circumstances where the respondent (Adbri) has not agreed to arbitration?”

[123] For the foregoing reasons, the answer to the question is ‘no’.

[124] The dispute as notified is determined on the aforementioned basis.

[125] As no jurisdiction to arbitrate in the absence of Adbri’s agreement exists, determination of the dispute cannot proceed. An order 28 giving effect to this decision is issued in conjunction with its publication.

DEPUTY PRESIDENT

Written submissions:

Mr Mavrojianis – 14 October 2021
Adelaide Brighton Cement Ltd T/A Adbri Limited – 21 October 2021

Printed by authority of the Commonwealth Government Printer

<PR735501>

 1   AWU submission 17 September 2021; Adbri submission 30 September 2021

 2   Email ‘Chambers Anderson DP’ 5 November 2021

 3 Section 186(6) FW Act

 4   Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union v ALS Industrial Australia Pty Ltd (2015) 235 FCR 305 at [35] cited by Bromberg J with approval in Energy Australia Yallourn Pty Ltd v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union [2017] FCA 1245 at [64]

 5   Construction, Forestry, Mining and Energy Union v Australian Industrial Relations Commission (2001) 203 CLR 645 at [31]

 6   Re Woolworths Ltd (t/as Produce and Recycling Distribution Centre)[2010] FWAFB 1464

 7   Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union known as the Australian Manufacturing Workers’ Union (AMWU) v Berri [2017] FWCFB 3005 at [114] (Berri); AMIEU v Golden Cockerel Pty Ltd[2014] FWCFB 7447; Kucks v CSR Limited (1996) 66 IR 182; Short v Hercus (1993) 40 FCR 511; Qantas Airways Ltd v Australian Licensed Aircraft Engineers Association (No 3) [2020] FCA 1428; WorkPac Pty Ltd v Skene [2018] FCAFC 131 at [197]

 8   SZAL v Minister for Immigration and Border Protection [2017] 262 CLR 362 at [14] per Kiefel CJ, Nettle and Gordon JJ

 9   Kucks v CSR Ltd 66 IR 182 at 184; see also Amcor Ltd v Construction, Forestry, Mining and Energy Union (2005) 222 CLR 241 at 270 per Kirby J

 10   James Cook University v Ridd [2020] FCAFC 123 at [65] (vii) citing City of Wanneroo v Holmes (1989) 30 IR 362 at 378-379 and WorkPac v Skene (2018) 280 IR 191 at [197]; see also Australian rail Tram and Bus Industry Union v Qube Logistics (Rail) Pty Ltd [2020] FCA 1520 at 11

 11   Berri at [114] principles 10, 11 and 12; Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640 at [35]

 12   James Cook University v Ridd [2020] FCAFC 123 at [65] (v) citing Short v FW Hercus Pty Ltd (1993) 46 IR 128 at 135

 13   Berri at [44]

 14   Amcor Limited v CFMEU (2005) 222 CLR 241 at 270 per Kirby J

 15   Berri at [114] principle 2

 16 (1984) 8 IR 34 and (1984) 9 IR 115

 17 Sections 50, 51 and 52 FW Act

 18 Section 172(6) FW Act

 19   As certified 15 October 2002. Document RM-1 submitted in these proceedings by the Applicant appears to be an earlier version of clause 7.5 that was not certified by the Commission.

 20   Transcript 22 December 2005 PN10

 21   PR983367

 22   [2011] FWAA 9009

 23   [2014] FWCA 8173

 24   [2018] FWCA 1574

 25   Annexure A to 2017 Agreement

 26   Berri at [88] and [114] principle 13

 27   RM3 Correspondence 25 November 2005 item 1

 28   PR735502