Australasian Meat Industry Employees' Union v Wingham Beef Exports Pty Ltd T/A Wingham Beef Exports
[2013] FWCFB 909
•15 FEBRUARY 2013
[2013] FWCFB 909 |
FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.604 - Appeal of decisions
v
Wingham Beef Exports Pty Ltd T/A Wingham Beef Exports
(C2012/6585)
VICE PRESIDENT WATSON | |
Appeal against decision [2012] FWA 7748 of Commissioner Macdonald at Sydney on 22 November 2012 in matter number C2012/2527 - interpretation of enterprise agreement - interaction between enterprise agreement, NAPSA and modern award - whether boners’ duties include bone separation work - Fair Work Act 2009 - s.604.
Introduction
[1] This decision concerns an application for permission to appeal under s.604 of the Fair Work Act 2009 (the Act) by the Australasian Meat Industry Employees Union (AMIEU) against a decision of Commissioner Macdonald. 1 The Commissioner’s decision considered a dispute concerning the proper rate of pay for boners employed under the Wingham Beef Exports and Australasian Meat Industry Employees Union Enterprise Agreement 20102(the Agreement).
[2] At the hearing of this matter in Sydney on 29 January 2013, Mr C Buckley with Mr G Courtenay appeared on behalf of the AMIEU and Mr D Stewart of counsel appeared on behalf of Wingham Beef Exports Pty Ltd (Wingham).
Background and Decision under Appeal
[3] Wingham operates an abattoir at Wingham, near Taree in regional New South Wales. One part of its operation is the boning room. This is a continuous process with 28 ‘stands’ or workstations. Sides of beef progress through the stands and employees perform various functions to extract the relevant cuts from the beef at each of their stands. Prior to December 2011 there would usually be 26 boners employed on piecework rates and two labourers employed on time rates deployed on the 28 stands in the boning room.
[4] The labourers would perform a duty known as bone separating. For the forequarter this involves separating the neck bone from the thoracic ribs by knife cut through the cartilage and placing it onto the tables below. The balance of the thoracic rib cage is separated and disposed of onto a bone conveyor behind the boning stand. For the hindquarter the separator task involves making a cut through the soft cartilage between the tibia and femur bones once boning has been completed. The femur bone is placed onto the table below. The tibia bone is placed on the bone conveyor behind the boning stand. As the separation work was performed by labourers it was not calculated in the piecework rates for the boners.
[5] In December 2011, Wingham gave notice of a change in work practices consequent upon the reduction in shifts worked at the abattoir. The new practice involved deploying 28 boners when available on the 28 stands and having the boners perform the bone separation tasks previously performed by labourers. No change in the piecework calculations were proposed as a consequence of this change. The addition of the bone separation duties did not add significantly to the work performed by the boners, but the additional work impacted on the amount of units that could be completed in a shift and on the payments made to boners under the piecework system.
[6] The AMIEU lodged an application with Fair Work Australia to deal with a dispute, under s.739 of the Act, in accordance with a dispute resolution procedure in the Agreement. In essence, the dispute concerned whether the bone separator tasks form part of a boner’s duties and whether the employees performing bone separation tasks should be included in the divisor used when calculating piecework rates payable to employees engaged as boners.
[7] The AMIEU sought a determination that bone separator tasks not fall within the boners’ classification and that boners assigned to performing the bone separation tasks not be counted for the purpose of determining the appropriate divisor under Appendix 2 of the Agreement.
[8] The Commissioner considered three industrial instruments that have application to Wingham’s operation: the Agreement, the Butchers’ Wholesale (Newcastle and Northern) Award 3 (NAPSA) and the Meat Industry Award 20104 (the Award). The NAPSA is incorporated by reference into the Agreement by virtue of clause 5. The Commissioner took the view that precedence ought be given to consideration of the Agreement and the incorporated NAPSA provisions before considering the Award and its provisions.
[9] The Commissioner went on to consider clause 25.7 of the NAPSA. He said:
“[28] The NAPSA at Clause 25. Tally Boning deals with tasks to be performed and how Boners will be remunerated if doing “other duties”. This is set out at clause 25.7.2:
“25.7.2 An employer may require a boner to combine tally work and non-tally work. In that event the employee shall, for the purpose of calculating the tally, be counted as a tally worker proportionately to the time which he/she works on tally but, in any circumstance, a permanent boner shall receive the boner’s rate of pay when performing other duties.”
[29] The foregoing extract from the NAPSA shows that:
(a) the employer may require a Boner to combine tally work and non-tally work;
(b) the employee (a Boner) shall be counted as a tally worker proportionately to the time spent on tally work only; and
(c) a permanent Boner shall receive the boner’s rate of pay when performing other duties.
[30] At first glance there seems to be a contradiction between propositions (b) and (c). Thus (b) says that a Boner’s piecework rate of pay is not calculated by taking into account non-tally work. But (c) says that a Permanent Boner shall receive “in any circumstance”, the piecework rate of pay when carrying out “other duties”.
[31] It seems to FWA that the only way that this apparent contradiction can be resolved is by putting the construction on the meaning of “other duties” to be that “other duties” refers to tally work. Thus “other duties” is not “non-tally” work because proposition (c) says that “other duties” does not affect the Boner’s piecework rate of remuneration but proposition (b) says that “non-tally” work does affect the Boner’s piecework rate of pay.
[32] So, it follows from the foregoing, that if bone separation forms part of “tally work” or “other duties”, then bone separation work is to be included in the piecework rate of pay divisor calculation for all Boners. Conversely, if bone separation does not form part of “tally work” or “other duties”, then bone separation work is not to be included in the divisor for calculating the piecework rate of Boners.”
[10] The Commissioner then went on to consider the Award and the definition of “Boner” at Schedule B.2.1. He accepted submissions on behalf of Wingham that the definition of boner at Schedule B.2.1 of the Award included bone separation tasks and accepted that bone separation work forms part of the duties of a boner.
[11] The Commissioner concluded as follows:
“[46] Having considered all of the evidence and submissions, and for the reasoning set out above, I have found that Schedule B.2.1 of the Modern Award allows the employer to submit that bone separation is part of a Boner’s duties and accordingly bone separation is to be carried out by Boners, even though in doing so, it has an adverse impact on the method of calculating the Boner’s piecework rate of pay.
[47] There is no inconsistency between that Schedule B.2.1 provision and any provision contained in the 2010 Agreement and the NAPSA.
[48] Accordingly, I decline to grant the relief sought by the AMIEU and the file is closed.”
Grounds of Appeal and Submissions
[12] The AMIEU submits that the Commissioner erred in the proper construction of the terms of the Agreement. It advanced three grounds of appeal:
● that the Commissioner erred in interpreting the operation of clause 25.7 of the NAPSA;
● that the Commissioner erred in making a determination that there was no inconsistency between the Agreement and the Award;
● that the Commissioner erred in determining that the duties of a boner under the Agreement included bone separation tasks.
[13] In respect of the first ground of appeal, the AMIEU submits that the proper construction of clause 25.7.2 of the NAPSA is that reference to other duties necessarily means duties other than tally work. It submits that the effect of the clause is that an employer can direct an employee to perform tally and non-tally work. If so directed, the tally is calculated by counting the employee as a tally worker only for the period of time that the employee is performing tally work; however, once a boner’s rate of pay is calculated on the basis of that tally, a permanent boner receives that rate for the duration of the shift. It submits that, in contrast, a non-permanent boner does not receive tally rates and would receive the rate of pay normally applicable to non-tally tasks.
[14] In respect of the second and third grounds of appeal, the AMIEU submits that the Commissioner was in error in determining there was no inconsistency between Schedule B.2.1 of the Award and the Agreement. It submits that under the Agreement bone separation tasks were duties of a Grade 1 employee and did not form part of the duties of a boner. It submits that the Agreement expressly incorporates the terms of the NAPSA, but does not incorporate the terms of the Award. It submits that the relationship between the Agreement and the Award is determined by s.57 of the Act which provides that a modern award does not apply to an employee at a particular time when an enterprise agreement applies to an employee in relation to that employment.
[15] The AMIEU submits that the issue before the Commissioner was whether the duties of a boner under the Agreement include bone separation tasks. It submits that whether bone separation under the Award is the work of a boner is not relevant.
[16] The AMIEU submits that permission to appeal should be granted because the decision at first instance demonstrates error in the construction of the Agreement, will result in an injustice to employees of Wingham who will not receive the appropriate remuneration under the Agreement and is counterintuitive in that it permits an award to override the express terms of an agreement.
[17] Among other matters, Wingham submits that as the NAPSA was terminated by Fair Work Australia on 11 August 2011 it ceased, at that time, to have any effect on the employment relationship despite clause 5.1 of the Agreement. It submits that if the NAPSA were incorporated it would incorporate clause 2.4 which provides that the NAPSA remains in force until rescinded, which occurred on 11 August 2011.
[18] Wingham further submits that the Agreement provides that a labourer can undertake bone separation tasks but does not specify that it cannot be work of a boner. It submits that the issue of whether bone separation tasks are the duties of a boner or labourer is not the correct question as it submits that they are duties of both a labourer and a boner. It submits that the Commissioner’s task was to determine whether a boner should be counted in the boner tally or treated as a labourer whilst carrying out bone separation tasks.
[19] Wingham submits that permission to appeal should not be granted.
The Applicable Instruments
[20] As there was a dispute between the parties as to the instruments that apply we consider this matter first. The Agreement was made in 2010 for a period of three years and is therefore within its specified period of operation. It states in clause 5.1 that the provisions of the NAPSA ‘as at June 2008 as varied are incorporated into this Agreement.’
[21] This is standard wording of enterprise agreements that intend to incorporate the terms of an award or similar instrument so that the terms of both instruments operate in conjunction with each other - the terms of the agreement supplementing the terms of the award. It is common for an agreement to state that in the event of any inconsistency between the two instruments the terms of the agreement prevail - as this agreement does in clause 5.2. Clause 5.2 also provides that the Agreement prevails over the Award, although it appears that this reference is unnecessary because the Award does not operate while the Agreement is in place by virtue of s.57 of the Act and the provisions of the Award are not expressly incorporated into the Agreement by reference or otherwise.
[22] Given the standard nature of these provisions, we do not consider that there is any doubt that the parties intended the Agreement to operate in conjunction with the NAPSA. We do not consider that the formal termination of the NAPSA in 2011 affects the situation. If the parties had intended there to be a change in the terms and conditions that applied if the NAPSA was terminated they would have done so in much clearer terms. Because the terms of the NAPSA were expressly incorporated the intention that its terms continue to apply was manifest.
[23] For the purposes of resolving this dispute as to the interpretation of applicable instruments we will have regard to the terms of the Agreement and the NAPSA.
Relevant Provisions
[24] The classification structure of the Agreement contains a classification of boner but no definition of the duties that fall within it. The classification of a G1 labourer in the Agreement includes references to bone separation. The dispute concerns the calculation of the number of production units in Appendix 1 of the Agreement for the purposes of calculating piecework payments for boners.
[25] The AMIEU contends that the calculation of the number of production units that each boner has completed is determined by reference to clause 25.7.2 of the NAPSA which provides:
“25.7.2 An employer may require a boner to combine tally work and non-tally work. In that event the employee shall, for the purpose of calculating the tally, be counted as a tally worker proportionately to the time which he/she works on tally but, in any circumstance, a permanent boner shall receive the boner's rate of pay when performing other duties.”
[26] Although not conceding that the NAPSA applies, Wingham submits that clause 25.8 confirms the position that applies in any event - that bone separation work is the work of a boner. Reference is made to clauses 25.8.1-25.8.3 which provide as follows:
“25.8.1 The duties of a piece-work team under this clause shall be to bone the quarter or other piece in accordance with the requirements of the employer and to perform any tasks incidental to such boning. A piece-work team or group shall, within the ordinary hours of work on any day or shift, complete such tally as the employer may require.
25.8.2 A member of a piece-work team or group shall perform such tasks and/or parts of tasks as the employer may require.
25.8.3 An employer may require an employee to combine work as a member of a piecework team or group with other duties. In that event the employee shall, for the purpose of calculating the tally of the team or group and the payments to which he/she is entitled, be counted as a member of the team or group proportionally to the time which he/she works as a member of the team or group.”
[27] Wingham submits that the Award assists in clarifying general understandings as to the work of boners. Even though we have found that the Award does not specifically apply, we note that a definition of a boner is contained in Schedule B as follows:
“B.2.1 Boner is an employee who is required to use a knife to remove meat from the bones, sides, quarters or other piece of a carcase in accordance with the employer’s specifications and, where required by the employer, to dispatch such meat, bones and trimmings to other employees and/or work areas for further processing as required by the employer.”
Calculations of Piecework Rates
[28] The central issue in this appeal is whether, for the purposes of the Agreement, the work of boners includes the bone separation work when it is performed by boners. If the answer is in the affirmative then there is no adjustment to the calculations for piecework. If the answer is negative, then an adjustment needs to be made to effectively remove the time spent on those duties from the piecework calculations.
[29] In our view, the conclusion reached by the Commissioner reflected the correct application of the Agreement. It has not been established that the bone separation work is of such a nature that it should not be considered part of the boners’ work. By not incorporating a specific definition of boner in the Agreement the parties were obviously content to apply generally understood notions. We do not consider that listing bone separation work as one of the duties that could be performed by a labourer excludes it from being boners’ work when a boner is required to perform that work. The terms of the NAPSA make it clear that the duties of the boner are to bone the quarter or other piece in accordance with the requirements of the employer. The work has not been demonstrated to be of such a different nature that it cannot be required to be performed as part of the boners’ duties.
Conclusion
[30] For the above reasons, we agree with the Commissioner’s conclusion that there is no basis to interfere with the calculations of piecework payments adopted by Wingham consequent upon the decision not to utilise labourers to perform bone separator duties in the boning room. Because the matter involves the interpretation of an enterprise agreement and those provisions involve some complexity we grant permission to appeal, but we dismiss the appeal.
VICE PRESIDENT WATSON
Appearances:
C. Buckley with G. Courtenay for the Australasian Meat Industry Employees Union
D. Stewart of counsel for Wingham Beef Exports Pty Ltd T/A Wingham Beef Exports
Hearing details:
2013.
Sydney.
January, 29.
1 [2012] FWA 7748.
2 AE880582.
3 AN120094.
4 MA000059.
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