Australian Municipal, Administrative, Clerical and Services Union v Northern SEQ Distributor Retailer Authority T/A Unitywater

[2019] FWC 8381

[2019] FWC 8381

FAIR WORK COMMISSION

DECISION

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

Australian Municipal, Administrative, Clerical and Services Union
v
Northern SEQ Distributor - Retailer Authority T/A Unitywater
(C2019/2685)

COMMISSIONER SPENCER BRISBANE, 11 DECEMBER 2019

Alleged dispute about any matters arising under the modern award and the NES; [s146].

INTRODUCTION

[1] An application pursuant to s.739 of the Fair Work Act 2009 (the Act) was made by the Australian Municipal, Administrative, Clerical and Services Union Queensland (Services and Northern Administrative) Branch (the Applicant/the Union) in relation to a dispute, arising under the Unitywater Water Industry Indoor/Salaried Staff Employees Enterprise Agreement No.1. (the Agreement), with Northern SEQ Distributor – Retailer Authority T/A Unitywater (the Respondent/the Employer). The Agreement in accordance with clause 1.6 sets out that the Agreement operates to the exclusion of any Award.

[2] In summary terms, the Union alleged the Employer had not appropriately considered the requirements of clause 3.1.4 of the Agreement by denying employees employed on a casual basis, to be converted to permanent employment based on their average casual hours worked over the preceding 12 months. The Employer had instead offered employees 20 hours per week. The Union alleged that this offer was not based on the average of the previous 12 months of casual work, as is required by clause 3.1.4 of the Agreement, and generally resulted in less hours per week being offered to a converting employee.

[3] The dispute application was filed on 26 April 2019. The Employer objected to the application, on the basis that the Union had not complied with the disputes procedure. However, it was common ground that there had been receipt of email issues, arising from the Employer’s computer server. This resulted in Mr Drew Cutler, Industrial Officer of the Union, not receiving ‘a bounce back’ of his email requests for a meeting to Mr Dearling of the Employer. Mr Cutler had interpreted erroneously, but understandably, in the circumstances, that his requests were being ignored. Accordingly, given that Mr Cutler considered the casual conversion issue was moving ahead, he filed the application to protect the interests of the members of the Union.

[4] Given all of the steps of the disputes procedures had not been discharged when the matter was considered initially before the Commission, I stood the matter down and directed the parties to have discussions in line with the disputes procedure, to allow for the possible resolution of this matter. This course was adopted by consent, however the matter was not resolved.

[5] The matter was subsequently listed for conference however the Parties, by agreement, sought Arbitration of the matter. Directions were issued on 16 August 2019 for the filing of material and the matter was listed for Hearing in Brisbane on 24 October 2019.

[6] In line with the Directions, the Parties provided the following question for Arbitration:

“Does Unitywater have an obligation to convert casual staff who have applied for permanency pursuant to the provisions of clause 3.1.4 of the Unitywater Water Industry Indoor/Salaried Staff Employees Enterprise Agreement NO 1 (the EBA ), on their average hours worked over the preceding twelve months”

[7] The Union was represented by Mr Drew Cutler, Industrial Officer of the Services Union and Ms Michelle Robertson, Senior Industrial Officer of the Union. The Employer was represented by Mr Mark Rodgers, Executive Director at Mapien, appearing with permission, pursuant to s.596, given the complexity of the matter.

RELEVANT PROVISIONS OF THE ACT

[8] Pursuant to s.739 of the Act:

“739 Disputes dealt with by the FWC

(1) This section applies if a term referred to in section 738 requires or allows the FWC to deal with a dispute.

(2) The FWC must not deal with a dispute to the extent that the dispute is about whether an employer had reasonable business grounds under subsection 65(5) or 76(4), unless:

(a) the parties have agreed in a contract of employment, enterprise agreement or other written agreement to the FWC dealing with the matter; or

(b) a determination under the Public Service Act 1999 authorises the FWC to deal with the matter.

Note: This does not prevent the FWC from dealing with a dispute relating to a term of an enterprise agreement that has the same (or substantially the same) effect as subsection 65(5) or 76(4) (see also subsection 55(5)).

(3) In dealing with a dispute, the FWC must not exercise any powers limited by the term.

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

Note: The FWC may also deal with a dispute by mediation or conciliation, or by making a recommendation or expressing an opinion (see subsection 595(2)).

(5) Despite subsection (4), the FWC must not make a decision that is inconsistent with this Act, or a fair work instrument that applies to the parties.

(6) The FWC may deal with a dispute only on application by a party to the dispute.”

RELEVANT PROVISIONS OF THE AGREEMENT

[9] The Agreement was approved by the Commission on 5 December 2016.  The Agreement operated from 12 December 2016, and nominally expired on 30 November 2019.

[10] Clause 2.1 of the Agreement provides the procedure by which the Parties agree that the Commission is authorised to arbitrate the dispute. Clause 2.1 provides:

“2.1 Dispute Resolution Procedure

Best endeavours will be made to resolve issues such as problems, questions, disputes, difficulties or concerns at the lowest possible level.

An issue arising under or in relation to any employment matter requiring resolution shall be dealt with in the following manner:

(i) Where an employee(s) has an issue/s that has not been resolved in the normal course of business, they shall raise the issue with their Supervisor/Team Leader and use their best endeavours to resolve the issue as quickly as possible.

(ii) All issues raised shall be discussed and every endeavour made to resolve them within the appropriate team.

(iii) Should the issue not be resolved as above within a reasonable, mutually agreed timeframe, the issue shall be referred to and discussed with the relevant Manager.

(iv) If the issue is not resolved, any of the parties may raise the issue with the Executive Manager for resolution.

(v) Before the issue proceeds to the FWC, the Chief Executive Officer and the Union State Secretary of the relevant union, or their nominee, may be involved in the process.

(vi) If the issue is still unresolved the matter may be referred to the FWC, for conciliation and/or arbitration, at the election of either party, in accordance with due process. At levels (i) to (iv) inclusive of the above, the employee(s) may choose to have union representation and/or another employee or other support person in attendance. Whilst the dispute resolution procedure is being followed, the continuation of work and customary work practices (status quo) shall prevail until such time as a settlement is reached, except where a bona fide Occupational Health and Safety issue is involved. Where a bona fide Occupational Health and Safety issue is involved, an employee shall not work in an unsafe environment. The employee shall be placed in alternative suitable duties or an alternative work environment whilst a resolution to the dispute is pending and the employee shall not experience a loss of income.

The parties to this Agreement may elevate the issue to a higher level at any time. Levels (i) to (v) shall be completed within ten (10) working days.”

[11] Clause 3.1.4 of the Agreement provides the criteria and procedure by which employees can make applications for conversion from a casual engagement to permanent full-time or part-time employment. Clause 3.1.4 provides:

“3.1.4 Permanent conversion

(a) A casual employee of Unitywater working on a systematic and regular basis for a period of 12 months may apply to convert their casual status to permanent full-time or part-time depending on the average hours worked over the preceding twelve months.”

SUMMARY OF THE UNION’S SUBMISSIONS AND EVIDENCE

[12] In March 2019 the Employer provided casual Customer Service Officers (CSOs) with application forms whereby they could advise management of their ideal permanent “pattern of hours”. The application form stated that they would be limited to 35 hours per fortnight. This was of concern to many of the employees, who on average had worked 25-30 hours per week.

[13] The Union submitted that the Employer has negated its obligations under the Agreement’s provision to provide permanent conversion to casual employees, based upon the average hours worked over the preceding 12 months. The Union argued that the Employer proposed work hours that did not reflect the average hours actually being worked, over the preceding 12 months.

[14] A range of the CSOs who had made the applications to convert to permanent employment had been regularly working more than 20 casual hours per week over the preceding 12 months.

[15] The Union’s case included the following witness evidence.

Witness statement of Ms Amelia Woods

[16] Ms Amelia Woods, a casual CSO employed by the Employer, provided a witness statement for the Union. Ms Woods had commenced employment with the Employer in August 2016. Since this time, she had remained a casual employee, working regular and systematic shifts.

[17] Ms Woods stated that since the commencement of her employment, she had at times been dependant on her income to support her family. During this time, she stated she had been adversely considered by credit providers and banks, due her status as a casual employee. Ms Woods recently fell pregnant and she stated she will be unable to access paid maternity leave due to her causal status.

[18] Ms Woods asserted that she had worked as a casual employee on an average of 25.33 hours per week over the last 12 months. She submitted that these figures were obtained from her roster, which was made available to her on ‘Purecloud’, the Human Resources system utilised by the Employer.

Witness statement of Ms Vicky Constantine

[19] Ms Vicky Constantine also provided a witness statement on behalf of the Union. Ms Constantine is a casual CSO employed by the Employer, having remained a casual employee working regular and systematic hours since the commencement of her casual employment in 2010. Ms Constantine stated that her family has been dependent on her income at various times since the commencement of her employment, with her income being the sole income for the household for the past five years.

[20] Ms Constantine stated that during the course of her employment she had not been positively considered by credit providers due to her status as a casual employee, despite her years of continuous service.

[21] Ms Constantine stated that she had received two quarterly awards for commendations for her service in the category, One Team Company Value (that no one succeeds at the expense or exclusion of others) from the Employer’s Chief Executive Officer and the Board of Directors.

[22] Ms Constantine stated that in late 2018 the Employer met with various members of the Customer Service team and asked employees for the hours which they would like to work if converted to permanent employment. The Employer indicated that Ms Constantine was able to request the hours that she would like to maintain as a permanent employee. During this conversion, it was submitted she was not informed of her entitlement to be converted to full time employment pursuant to clause 3.4.1 of the Agreement.

[23] Ms Constantine stated she was advised of her average hours of work over the previous 12 months, and she stated she had the reasonable expectation, based on the information provided, that these hours would be maintained. It subsequently became apparent to Ms Constantine that many other employees had requested hours far in excess of what they had been working.

[24] Ms Constantine stated that between December 2018 and March 2019, the Employer took the requests from herself and other staff in an attempt to develop a roster. She requested that on conversion, her average hours over the previous 12 months be maintained.

[25] On 18 March 2019, the Employer met with Ms Constantine’s colleagues and presented a document labelled ‘Application for Permanent CSO Opportunities’. The document outlined that staff could only apply for up to 35 hours per fortnight. Upon receipt of this document, Ms Constantine contacted her Union to request their assistance in obtaining conversion to permanent employment, based upon her average hours of work, rather than the proposed 35 hours per fortnight.

[26] Ms Constantine attested to having worked an average of 56 hours per fortnight over the last 12 months. Ms Constantine also stated that during the course of her employment she had worked systematic and regular hours each fortnight.

[27] On 3 April 2019, Ms Constantine and 11 other members of the CSO team emailed the Employer to request conversion to permanent employment pursuant to clause 3.1.4 of the Agreement. Ms Constantine stated that since the commencement of proceedings with the Commission, she has witnessed Ms Amanda Williams, Customer Service Manager, approach non-union members encouraging them to send correspondence to management, requesting casual conversion pursuant to clause 3.1.4 of the Agreement. She stated Ms Williams appeared very persistent in speaking with non-union members about conversion to permanency. She stated some members of staff had approached her, as a Union member, advising that Ms Williams’ conduct had upset them.

Witness Statement of Mr Drew Cutler

[28] Mr Drew Cutler provided a witness statement on behalf of the Union. Mr Cutler is employed by the Union, as an Industrial Officer.

[29] Mr Cutler stated that in early March 2019, a member contacted the Union advising that a number of employees had requested to be converted from casual to permanent status. However, the Employer had only offered them a maximum of 17.5 hours per week, even though the employees had all worked on average at least 22 hours per week in the previous 12 months.

[30] Mr Cutler stated he had advised members that the Union would engage in discussions with the Employer in relation to the issue.

[31] On 26 March 2019, correspondence was sent to the Employer by the Union signed by Mr Neil Henderson, Secretary of the Services Union. In this correspondence, the Union requested that members be provided with an opportunity to apply for permanent employment based on their average hours worked over the previous 12 months.

[32] On 2 April 2019, Mr Cutler requested reasons from the Employer as to why the casual employees’ applications for permanency had been rejected. On 3 and 4 April 2019, 12 applications were made by CSOs for conversion to permanent employment.

[33] The Employer advised the Union on 9 April 2019 in response to Mr Cutler’s email that they had requested their casual employees, who had been engaged by the Employer for at least 6 months, to nominate their preferences, up to a maximum of 35 hours per fortnight. The email in response to Mr Cutler’s email is set out as follows:

“Dear Mr Cutler,

…

Your correspondence states, "can you please provide to me the reasons you have rejected their application?". As per my correspondence of 1 April2019, we have not rejected any applications.

…

As an adjunct to the proposed changes, we ISO requested our casual employees, who have been engaged at Unitywater for at least 6 months, to nominate their preferences (based on the proposed set shift patterns communicated), up to a maximum of 35 hours per fortnight

The 35 hours per fortnight is premised on:

•  The permanent hours remaining within the proposed roster, after we take into account our existing permanent Customer Service Officers,

•  Less hours being available than what our casual Customer Service Officers are currently receiving due to the proposed change in operating hours; and

•  Less hours being available than what some of our casual employees are currently working due to the distribution of hours as a result of a number of Customer Service Officers being seconded across the business hours which cannot be distributed on a permanent basis.

If you require further information on this please contact me. Thanks Drew….”

[34] During cross examination at the Hearing, Mr Cutler was questioned whether under clause 3.1.4, the Employer had the capacity to refuse a request to convert to full-time or part-time employment on reasonable grounds. 1 Mr Cutler rejected the Employer’s proposition on the basis that the clause is silent on reasonable grounds or unreasonable grounds.2

[35] It was then put to Mr Cutler that given there was nothing in the clause, there was no fettering or limitation on the Employer’s discretion to either accept or refuse any application for conversion. 3 Mr Cutler again rejected the Employer’s proposition and stated that he was of the view that the clause should be read in the exact context as it is written. In response to the Employer’s question as to whether an application could be accepted or rejected due to the term “may” in the clause, Mr Cutler stated that he did not think that the “may” refers to whether or not the employer actually has any obligation, because this would be contrary to the purpose of the Agreement and a clause such as this.4

[36] Mr Cutler was questioned whether his interpretation of the Agreement was significantly different to clause 15 in the Waste Management Award 2010 (the Award). Mr Cutler conceded that this interpretation was different, as what is in the Award and what is in the Agreement are somewhat different. 5

[37] Clause 15 of the Award, conversion of casual employment, states:

“15. Conversion of casual employment

15.1 A casual employee who has been engaged by a particular employer on a regular and systematic basis for a sequence of periods of employment under this award during a period of 12 months has the right to elect to have their contract of employment converted to full-time or part-time employment.

15.2 The employer must give a casual employee notice in writing of the provisions of clause 15.1 within four weeks of the right to elect accruing.

15.3 The employee retains their right of election under the clause even if the employer fails to comply with clause 15.2.

15.4 A casual employee who does not, within four weeks of receiving written notice, elect to convert their contract of employment to full-time or part-time employment will be deemed to have elected not to convert.

15.5 Any casual employee having rights under this clause upon receiving notice under clause 15.2,or after the expiry of the time for giving such notice, may give four weeks’ notice in writing to the employer that they elect to convert their contract of employment to full-time or part-time employment. Within four weeks of receiving such notice the employer must either consent to or refuse the election but must not unreasonably so refuse.

15.6 An employee who has worked on a full-time basis throughout the period of casual employment has the right to elect to convert their contract of employment to full-time employment and an employee who has worked on a part-time basis throughout the period of casual employment has the right to elect to convert their contract of employment to part-time employment, working the same number of hours and times of work as previously worked, unless other arrangements are agreed upon between the employer and employee.

15.7 Subject to clause 15.6, where a casual employee has elected to convert to full-time or part-time employment, the employer and the employee must discuss and agree upon:

(a) whether the employee will become a full-time or a part-time employee; and

(b) if it is agreed that the employee will become a part-time employee,the number of hours and the pattern of hours that will be worked as provided for in clause 13.3.

15.8 A casual employee who has elected to convert to full-time or part-time employment in accordance with this clause may only revert to casual employment by written agreement with the employer.”

[38] It was further put to Mr Cutler that if the employer was to forego the right of refusal, that this would have clearly been stated in the clause. Mr Cutler stated that the ability of the employer to refuse casual conversion is not included in the clause, and agreed that there needs to be an application made by the casual employee to be converted to permanency. 6

[39] The Union submitted that the Employer misapplied clause 3.1.4 of the Agreement, and that they have sought that the 12 CSO employees who have made application for casual conversion, be appointed to permanent positions with the Employer, based on the average hours worked over the preceding twelve months.

SUMMARY OF THE EMPLOYER’S SUBMISSIONS AND EVIDENCE

[40] The Employer submitted that by 23 April 2019, 12 employees had applied via email for permanent employment, based on the average hours worked over the previous 12 months. Following the application for permanent conversion by the 12 CSO employees, Ms Christine Garden, People Transformation Lead and Ms Amanda Williams, Manager, Customer Service, met individually with the 12 employees on 23 April 2019 and advised them that their application for conversion had been accepted, however not based on their average hours over the past 12 months. It was explained that this was due to the reduction in operating hours of the Contact Centre and also less hours being available than what some of the casual employees were currently working. This was as a result of a number of permanent CSOs being seconded across the business, and therefore these hours could not be distributed on a permanent basis.

[41] A further information session was held with all CSO’s on 23 April 2019. CSOs were advised in this session of the following changes made by the Employer as a result of feedback they had received;

•  The proposed 17.5 permanent hours per week was increased to 20 hours per week;

•  Where a permanent vacancy arose, the hours would be offered to permanent CSO team members;

•  The number of full day shifts had increased from zero to 30 (being eight or 7.25 hours).

•  The number of school friendly shifts had increased from five to 11.

[42] The Employer submitted that it does not have an obligation under clause 3.1.4 of the Agreement to convert casual employees who have applied for permanency on their average hours worked over the preceding 12 months.

[43] The Employer in arguing its interpretation relied on the principles for Enterprise Agreement interpretation established in the Full Bench Decision of Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union’ known as the Australian Manufacturing Workers Union (AMWU) v Berri Pty Limited (Berri). 7

[44] The Employer submitted that clause 3.1.4 has a plain meaning and is not ambiguous or susceptible to more than one meaning. The clause firstly applies to a casual employee who has worked for the Employer on a systematic and regular basis for a period of 12 months. The clause secondly allows such an employee to apply to convert their casual status to a permanent full-time or part-time employment, depending on the average hours worked over the preceding 12 months.

[45] The Employer submitted that the word ‘apply’ should be interpreted as meaning “to request something, usually officially, especially in writing or by sending in a form.” 8 Accordingly the clause should be read to permit a qualifying employee to request to convert their casual status to permanent full-time or part-time, depending on the average hours worked over the preceding 12 months.

[46] The Employer stated that nothing in the wording of clause 3.1.4 would support the interpretation that the Union sought to attribute to clause 3.1.4, namely, that the clause places an obligation on the Employer to convert casual employees who applied for permanency on their average hours worked over the preceding 12 months.

Ordinary meaning of relevant words

[47] In relation to first principle established in Berri, 9the Employer submitted that a consideration of the ordinary meaning of the relevant words of clause 3.1.4, supports the Employer’s assertion, that the Employer is not obligated to convert causal staff, who have applied for permanency on their average hours worked over the preceding 12 months.

[48] The Employer submitted that given the clear grammatical meaning of the clause, that the context and purpose of the language of the clause is not a relevant consideration.

Common intention of the parties

[49] The Employer submitted that the language of clause 3.1.4 is such that a reasonable person would understand that the clause permits a qualifying casual employee to apply to convert their causal status to permanent full-time or part-time depending on the average hours worked over the preceding 12 months.

Binding obligations

[50] The Employer submitted that the Agreement does not intend to establish binding obligations on the parties and in this regard there is nothing in the disputed clause 3.1.4 that indicates that the Employer is obliged to convert casual staff, who have applied for permanency, on their average hours worked over the last 12 months.

Witness statement of Ms Christine Garden

[51] Ms Christine Garden, People Transformation Lead for the Employer provided a witness statement in support of the Agreed Statement of Facts, that was submitted by consent from the parties.

[52] Ms Garden stated that she individually met with each of the 12 employees who had applied for permanent conversion and informed them, that each of their applications had been accepted by the Employer, although not based on their average hours over the past 12 months. Ms Garden further explained to the employees that this was due to the reduction in operating hours of the Contact Centre and also less hours being available than what some of the casual employees were currently working. This reduction in hours, she stated was a result of a number of permanent CSO’s being seconded across the business and these hours could not be distributed on a permanent basis.

[53] Ms Garden stated that the Union was only concerned with their member employees being granted permanent conversion and that this did not take into account the total number of CSO’s seeking permanent conversion. Subsequently the Employer had to consider the requests of the entire CSO workforce, and determine whether they could be accommodated, rather than prioritise the applications made by the members of the Union.

[54] Ms Garden stated that the approach adopted by the Employer was to offer the available casual hours to those casual CSO’s. The Employer had determined that it had an available 460 hours to convert to permanent part time which would leave 72.5 hours for irregular casual engagements. 23 casual CSO’s had expressed a desire to convert to permanent hours and the Employer sought to allocate those hours on an equitable basis of 20 hours per week to all 23 casual CSO’s. The approach adopted by the Employer did not differentiate between those employees who had made an application under the Agreement and those who had expressed a desire to do so as a result of management’s initiative to ascertain if casual CSO’s would be interested in permanent employment.

[55] Ms Garden stated that the Employer is not able to convert all casual CSO’s to permanency, based on their average hours worked over the previous 12 months, as there are simply not enough available full-time hours to do so.

[56] The evidence of Ms Garden, during the Hearing was that she commenced consultation in November 2018 as part of a workshop she conducted on how the Employer sought to work with all of the CSOs. This consultation had been part of considering the possibility of creating more permanent employment opportunities for casual employees. She stated there had been some ‘blue sky thinking’ consultation as to what ultimately, they could achieve, but there was no guarantee suggested, in terms of the transition from casual to permanent employment.

[57] The evidence was that the employer sought expressions of interest for casual conversion from a broader pool of employees (including those that had six months or more of service) because they were concerned about employment on the Sunshine Coast and that the consultation may cause a period of delay by which time they considered a number of the employees would have more than six months employment and therefore may also be in a position of seeking to convert to permanent full-time/part-time status.

[58] Ms Garden was questioned about creating an expectation to employees and the number of hours as a result of this process that would be afforded to casual employees as a result of broadening the pool. She was also questioned about the application of clause 3.1.4 to the process.

[59] She stated they went to the broader pool than just those employees who had worked on a regular and systematic basis for more than 12 months to undertake an advantageous process to provide more permanent opportunities to more employees.

[60] The resulting casual conversion offers were clearly not more advantageous to the pool of employees who had worked for more than 12 months, as the number of hours offered for permanent conversion was reduced by this broader pool. That is, rather than the 12 applicants having their conversion accommodated at the average hours worked for the last 12 months they were offered 20 hours, as were the other 11 employees in the pool of 23. The 460 hours available for conversion was divided between the 23, rather than conversion at the average hours they had worked for the last 12 months. Accordingly, the witness was questioned as to what work the words in the clause and the parameters in that clause of more than 12 months, had to do if it did not define the relevant pool of employees.

[61] Ms Garden stated that she did not distinguish between the expressions of interest arising from the initial consultations and the applications made pursuant to clause 3.1.4 of the Agreement, by the 12 employees

APPLICANT’S SUBMISSION IN REPLY

[62] The Union disputed the Employer’s submission, that there were significantly more hours requested than were available under the Employer’s budget for the Contact Centre. The Union argued that this submission is irrelevant to the application of the Agreement.

[63] The Union submitted that the Employer has taken the view that the provision states 'may apply' and is ambiguous enough, to allow them to not act on the provision to convert casual employees to permanent employment based on the employees’ average hours worked over the prior 12 months. On the basis of the Employer's contention, the Union asserted there is ambiguity, in relation to the application of the clause, not in how it is approached.

[64] The Union submitted that the ambiguity can be dealt with through reference to the Full Bench Decision of Berri, referring to the same principles the Employer relied upon.

[65] The Union submitted that the negotiations in relation to the current Agreement specifically discussed the conversion of casual employment to permanent employment. The Union submitted that minutes of a meeting held on 23 March 2016, between the Employer and Bargaining Representatives provide evidence of objective background facts, in line with those referred to in the paragraph 12 of the Berri Decision.

[66] The Union directly referred to the minutes, where the issues of conversion to permanent employment were discussed. The Union submitted that the minutes identified that the issue of conversion was remedied by clause 3.1.4.

[67] The Union submitted that there is no ambiguity surrounding the application being made based on the hours worked in the previous 12 months. It was argued that the Macquarie Concise Dictionary, seventh edition, defines the verb ‘apply’ as ‘to bring to bear; put into practical operation; as a principle, law, rule, etc.’ On this basis the Union asserted that it is reasonable that employees would have an expectation that their application would be acted on in accordance with the words of the clause. This expectation is assisted by the surrounding circumstances, whereby it was directly addressed in the Agreement negotiations and reflected in the minutes of the meeting, held on 23 March 2016.

[68] The Union submitted that if the Employer had intended to apply the clause differently than the words of the clause require that should have been clearly explained to employees at the time of voting on the Agreement. Yet this did not occur. Likewise, the Employer did not inform employees at the time of approval of the Agreement by Commissioner Roe on 5 December 2016 that they would apply the clause in a manner contrary to the words of the clause.

SUMMARY OF CLOSING SUBMISSIONS

Applicant’s closing submissions

[69] The Union maintained that clause 3.1.4 provides the Employer with an obligation to consider any applications, made under the Agreement clause, and to accept them if there is no reason not to.

[70] The Union submitted that the Agreement provides the basis for the application for conversion, namely, the average hours worked over the preceding 12 months.

[71] The Union submitted that the current clause, which does not provide the qualifiers that exist in the Award or the Antecedent Agreement, was introduced to the enterprise agreement negotiations by the Employer at a meeting held on the 23 March 2016. With reference to the principles established in Berri, the Union argued that there was no representation made to employees that the Clause would be applied in any other way than it was written.

[72] The Union also made reference to the recent Full Bench decision in Construction, Forestry, Maritime, Mining and Energy Union v Ditchfield Mining Services Pty Limited. 10 The Full Bench in that decision, held that:

“[72] The obligation under s.180(5) to take all reasonable steps to explain to relevant employees the terms of an enterprise agreement and the effect of those terms is an important function of the agreement-making scheme established by Part 2-4 of the Act. Its evident purpose, taking into account its role in assessing whether the employees who were asked to vote to approve an agreement genuinely agreed to the agreement, is to ensure that employees are as fully informed as practicable about the terms and effect of the terms of a proposed enterprise agreement before voting on whether to approve it. An employer’s discharge of its obligation under s.180(5) is intended to enable employees to know what they are being asked to agree to, and to understand how their wages and working conditions might be affected by voting in favour of an agreement.”

[73] The Union submitted that if the Employer intended to apply the clause differently than the words contained in the clause, then this should have clearly been explained to employees at the time of voting on the Agreement. However, no such information was given to employees. Accordingly, the Union submitted that it is reasonable that employees would have an expectation that their application would be processed according to the plain words in the clause.

[74] The Union submits that the Employer cannot completely disregard the terms of the Agreement which it has entered into, and the Agreement does not contain the provisions of the previous Agreement regarding reasons not to accept the application. It was submitted that the Employer has a clear obligation to deal with applications from casual staff who have applied to convert to permanent employment pursuant to the provision of clause 3.1.4 of the Agreement on their average hours worked over the preceding 12 months.

Respondent’s closing submissions

[75] The Employer submitted that the role of the Commission in this matter was to answer the question for arbitration, and not to evaluate the process adopted by the Employer or to determine whether the processes adopted by the Employer was the most appropriate in the circumstances of the matter.

[76] The Employer maintained that clause 3.1.4 gives a casual employee who has worked on a systematic and regular basis for a period of 12 months, a right to apply to convert their employment to permanent full time or part time, depending on the average hours worked.

[77] The Employer submitted that there is nothing in the wording of clause 3.1.4 of the Agreement which places an obligation on the Employer to accede to or accept such an application made by a casual employee.

[78] The Employer further submitted that clause 3.1.4 was not capable of being interpreted the way argued by the Union, and that the clause had a plain meaning that was not ambiguous. Accordingly, the Employer submitted there is no requirement for the Commission to have regard to the surrounding circumstances to interpret the Agreement.

[79] Should the Commission have regard to the surrounding circumstances, including the Award and/or the Antecedent Agreement, as relevant contextual considerations, the Employer submitted that the restriction imposed on the employer’s discretion by clause 10.6(f) of the Award, namely that the request may only be refused on reasonable grounds and after there has been consultation with the employee, is missing from the Agreement. The Employer also submitted that the factors listed in the Antecedent Agreement that the employer should consider when considering an application for conversion is made, are also missing from the Agreement. Accordingly, the Employer submitted that the absence of these factors provides a broad discretion, that is not limited by the Agreement, in which the Employer could decide to not convert any of the casuals employees who apply for conversion; could decide to convert some of the employees on the hours applied for but not others; and could decide to offer the employees who apply to convert to permanency less hours than those applied for.

[80] The Employer submitted the meeting minutes the Union sought to rely upon are hearsay, and represent nothing other than insight into what was discussed between the negotiating parties, during the meeting on the 23 March 2016.

[81] The Employer maintained that the role of the Commission does not involve an evaluation of the process undertaken by the Employer. However, the Employer submitted that the actions taken were reasonable, as it was entitled to not just consider 12 applications from the members of the Union in isolation. The Employer submitted that to simply give the 12 applications from the members of the Union preferential status and to consider them in isolation, after giving assurances to the cohort of 23 casual employees, who had expressed a formal written desire for permanency, would have been a grossly unfair outcome.

[82] The Employer submitted that this approach did not breach clause 3.1.4, as clause 3.1.4 only provides eligible casual employees a right to apply to convert their casual status. The Employer submits that nothing in clause 3.1.4 prevents the Employer from embarking on the course it did.

[83] In closing submissions, the Employer submitted that clause 3.1.4 gives qualifying casual employees nothing other than a right to apply for casual conversion, and the Employer had the discretion to refuse or agree partially to the application.

CONSIDERATION

[84] In Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union’ known as the Australian Manufacturing Workers Union (AMWU) v Berri Pty Limited (Berri), 11 the Full Bench summarised the approach to be adopted with respect to the interpretation of enterprise agreements, as set out:

“[114] The principles relevant to the task of construing a single enterprise agreement may be summarised as follows:

1. The construction of an enterprise agreement, like that of a statute or contract, begins with a consideration of the ordinary meaning of the relevant words. The resolution of a disputed construction of an agreement will turn on the language of the agreement having regard to its context and purpose. Context might appear from:

(i) the text of the agreement viewed as a whole;

(ii) the disputed provision’s place and arrangement in the agreement;

(iii) the legislative context under which the agreement was made and in which it operates.

2. The task of interpreting an agreement does not involve rewriting the agreement to achieve what might be regarded as a fair or just outcome. The task is always one of interpreting the agreement produced by parties.

3. The common intention of the parties is sought to be identified objectively, that is by reference to that which a reasonable person would understand by the language the parties have used to express their agreement, without regard to the subjective intentions or expectations of the parties. 

4. The fact that the instrument being construed is an enterprise agreement made pursuant to Part 2-4 of the FW Act is itself an important contextual consideration. It may be inferred that such agreements are intended to establish binding obligations.

5. The FW Act does not speak in terms of the ‘parties’ to enterprise agreements made pursuant to Part 2-4 agreements, rather it refers to the persons and organisations who are ‘covered by’ such agreements. Relevantly s.172(2)(a) provides that an employer may make an enterprise agreement ‘with the employees who are employed at the time the agreement is made and who will be covered by the agreement’. Section 182(1) provides that an agreement is ‘made’ if the employees to be covered by the agreement ‘have been asked to approve the agreement and a majority of those employees who cast a valid vote approve the agreement’. This is so because an enterprise agreement is ‘made’ when a majority of the employees asked to approve the agreement cast a valid vote to approve the agreement.

6. Enterprise agreements are not instruments to which the Acts Interpretation Act 1901 (Cth) applies, however the modes of textual analysis developed in the general law may assist in the interpretation of enterprise agreements. An overly technical approach to interpretation should be avoided and consequently some general principles of statutory construction may have less force in the context of construing an enterprise agreement.

7. In construing an enterprise agreement it is first necessary to determine whether an agreement has a plain meaning or it is ambiguous or susceptible of more than one meaning. 

8. Regard may be had to evidence of surrounding circumstances to assist in determining whether an ambiguity exists. 

9. If the agreement has a plain meaning, evidence of the surrounding circumstances will not be admitted to contradict the plain language of the agreement. 

10. If the language of the agreement is ambiguous or susceptible of more than one meaning then evidence of the surrounding circumstance will be admissible to aide the interpretation of the agreement. 

11. The admissibility of evidence of the surrounding circumstances is limited to evidence tending to establish objective background facts which were known to both parties which inform and the subject matter of the agreement. Evidence of such objective facts is to be distinguished from evidence of the subjective intentions of the parties, such as statements and actions of the parties which are reflective of their actual intentions and expectations. 

12. Evidence of objective background facts will include:

(i) evidence of prior negotiations to the extent that the negotiations tend to establish objective background facts known to all parties and the subject matter of the agreement;

(ii) notorious facts of which knowledge is to be presumed; and

(iii) evidence of matters in common contemplation and constituting a common assumption.

13. The diversity of interests involved in the negotiation and making of enterprise agreements (see point 4 above) warrants the adoption of a cautious approach to the admission and reliance upon the evidence of prior negotiations and the positions advanced during the negotiation process. Evidence as to what the employees covered by the agreement were told (either during the course of the negotiations or pursuant to s.180(5) of the FW Act) may be of more assistance than evidence of the bargaining positions taken by the employer or a bargaining representative during the negotiation of the agreement.

14. Admissible extrinsic material may be used to aid the interpretation of a provision in an enterprise agreement with a disputed meaning, but it cannot be used to disregard or rewrite the provision in order to give effect to an externally derived conception of what the parties’ intention or purpose was. 

15. In the industrial context it has been accepted that, in some circumstances, subsequent conduct may be relevant to the interpretation of an industrial instrument. But such post-agreement conduct must be such as to show that there has been a meeting of minds, a consensus. Post-agreement conduct which amounts to little more than the absence of a complaint or common inadvertence is insufficient to establish a common understanding.”

[85] In line with the initial principle for construing an enterprise agreement the words of the provision have a plain and ordinary meaning. Whilst the employer argued that their interpretation of the provision allowed them a discretion to respond appropriately and that they provided a more advantageous process to casual employees, there are no words in the provision that provide for permanent conversion to be undertaken in the way they argue. The implications of broadening the pool (to those casuals that had more than six months employment on a regular and systematic basis) meant that those casual employees who met the criteria as set out in the Agreement clause, (that is those employees who had worked for more than 12 months on a regular and systematic basis); were disadvantaged, in that they received less hours and therefore further reduced income on the casual conversion. Where these employees were losing the 25% casual loading to gain permanent employment, the upshot of broadening the pool (to which the casual conversion offer was made) was that the 460 available permanent hours were divided amongst the 23 employees in the pool, instead of between 12 applicants, they met the criteria in the clause. Therefore, each of the employees was offered 20 hours per week on a permanent part-time basis, less weekly hours than what a number were working on a casual basis.

[86] Attachment H to the Agreed Statement of Facts, dated 22 of May 2019, was a table emailed from Ms Garden to Mr Cutler, that set out the average casual hours for the 12 Union members that had applied for conversion at that stage (May 2019). This table set out the average casual hours per week, worked by the 12 Applicants. All had worked more than 20 hours per week, with the highest average hours being 30.36 hours per week. The aggregate of these average casual hours for the 12 Applicants was 322.33 hours per week, meaning that in the event of their conversion, in accordance with the clause it could be accommodated within the available hours.

[87] Ms Garden stated that she was aware from the consultation with the wider group of employees that a motivation for casual employees to convert to permanent status, was to achieve stability, and to have the ability to access all forms of leave in their employment. However it was also identified in the consultation process, 12 that the employees’ feedback was the ‘expectations of hours based on the initial consultation when moving from casual to permanent positions, did not align to shift preference offers of 17.5 hours per week, (later 20 hours per week)’. The employee feedback recorded on the consultation slide was negative, setting out that there had been no mention that the permanent hours offered would be less than the hours that they were currently working as casual employees. Further, it was recorded on the feedback slide, that ‘when this idea was first proposed in December during a 10 minute meeting with my team leader we were handed a sheet with our current income and what our income will drop to fortnightly there was no mention of anything else’.

[88] The Applicants rightfully had an expectation in line with the clause terms.

[89] Ms Garden conceded that for the 12 Applicants, the total of their average casual hours of 322 hours, could be accommodated within the 460 permanent hours available for casual conversion. Ms Garden stated that the employer’s proposal was to accommodate the 23 employees in the broader pool, by giving each of those employees, 20 permanent hours per week.

[90] She stated there had initially been 835 hours for distribution, but deducted from this were the hours attributable to permanent employees on secondment outside of the department which reduced the number of hours to 532.5. This figure was further reduced as the Employer sought to retain 75 hours as a casual buffer, if further casual hours were required for flexibility. Therefore, on the face of the numbers, this then reduced the figure available for casual conversion to 469 hours, as was reflected in in the calculations, included in Model three (as attached to Ms Garden’s statement).

[91] Ms Garden conceded that there were sufficient permanent hours to accommodate the conversion of the 12 applications, at the average level of hours, that these 12 employees had regularly and systematically worked for the last 12 months. However, she stated in considering the casual conversion, the Applicant’s had not been prioritised in terms of casual conversion but had been treated in combination with the entire cohort of the 23 employees. This resulted in the 12 applicants being offered a reduced number of 20 Permanent hours per week.

[92] The Union argued that there was no ambiguity in the wording of the clause, that it simply gave rise to an employee being able to make an application for permanent conversion if they had met the criteria as set out in clause 3.1.4 of the Agreement. The Employer submitted that unlike the Model Casual Conversion Clause in Modern Awards, clause 3.1.4 was silent as to the employer’s obligations in relation to an application for casual conversion, and therefore, it was necessary to look at the context of the provision and extraneous materials. The Union stated given the differing interpretations, ambiguity arose from the words, and examination of the minutes of the meetings of the negotiation of the Agreement was required. Mr Mattner of the Union who was present during the negotiations of the Agreement had stated in those meeting minutes (as attached to the Unions submissions in reply):

“19. The minutes contain specific reference to contact centre employees and conversion to permanent employment.

20. The minutes identify the issue to be remedied by clause 3.1.4.

21. The clause places on obligation on the Employer based on the regular hours worked during the preceding 12 months. The clause clearly provides that the application to convert from casual to permanent status is based on the hours worked in the previous twelve months.

22. There is no ambiguity about the application being made based on the hours worked in the previous twelve months.” 13

[93] The Union stated these references clarified the situation.

CONCLUSION

[94] The words of clause 3.1.4 have a plain and ordinary meaning, such that the parties have agreed that a casual employee who has worked on a systematic and regular basis for a period of 12 months may apply to convert from casual to permanent full-time or part time employment. The parties have set out in the clause, that the conversion to permanent engagement will be based on the average regular and systematic casual hours worked during the last 12 months of employment. Accordingly, on the plain and ordinary meaning, the parties agreed to a provision that includes parameters or conditions for those casual employees that can apply for permanent conversion and the manner in which the conversion will occur. That is, those employees that have met the conditions; as set out, can apply for permanent conversion. The parties then agreed, (on the wording) that when the conversion occurs, it will be based on the employees average number of casual hours worked, for the prior 12 months.

[95] Whilst it is recognised that the clause gives the right for employees who have met these conditions to make an application for permanent conversion to the employer, the wording does not provide an obligation on the employer to make the permanent conversion. In circumstances where the employer has refused an application for permanent conversion, that would be subject to the normal rights of an employee, to bring a dispute application pursuant to the disputes procedure of the Agreement in relation to the employer’s decision. That includes if the hours of conversion, varied from the average over the last 12 months and this was unacceptable to the employee, for example, a greater number of hours may be acceptable.

[96] In the circumstances of this matter, as set out in the chronology of events, where the employer sought expressions of interest from employees, who did not meet the twelve-month condition in the clause, (that is those employees who had only worked as a casual for six months), the additional processing of those applications, compromised the applications, of those employees who had met the 12 month condition. That is there were fewer hours available to those applications, made in accordance with the plain and ordinary meaning of the words of the provision. That is a conversion based on the average casual hours worked over the last 12 months. The employer’s conduct would not be considered, compliant with the plain and ordinary meaning of the terms of permanent conversion clause, the parties agreed on.

[97] The question for arbitration is:

“Does Unitywater have an obligation to convert casual staff who have applied for permanency pursuant to the provisions of clause 3.1.4 of the Unitywater Water Industry Indoor/Salaried Staff Employees Enterprise Agreement NO 1 (the EBA ), on their average hours worked over the preceding twelve months”

[98] The answer is, in accordance with clause 3.1.4, is that employees meeting the criteria, have a right to apply for permanent conversion. There is no obligation on the employer to undertake permanent conversion in response to an application. However, as stated the circumstances of a refusal by the employer of an application (that was otherwise consistent with the terms of clause 3.1.4) this could be considered, through the disputes procedure. It is not within the scope of the provision for the employer to ignore the required criteria, in clause 3.1.4 for applications.

[99] In the current circumstances, the concurrent consideration of the applications, with those employees who had worked less than 12 months, was outside the terms of the clause, and improperly contravened the approach to the consideration of the applications. Those 12 compliant applications, the subject of this dispute, should be considered and processed in the terms of the clause. If there is a refusal by the employer to accept the applications in accordance with the provision, the reasons for such should be set out clearly to the employees and their representative.

[100] If the reason for not accepting and converting the 12 applications (at their average hours for the prior 12 months), is due to the employer allowing conversion for employees that did not meet the criteria, the employer has not acted in accordance with the terms of the provision.

[101] Certainly, at the time of hearing there was sufficient available permanent hours to allow for the 12 individual applications to be met, on each of their average hours in accordance with the agreed terms of the permanent conversion in clause 3.1.4. The employer has an obligation to act in accordance with the particulars of the clause of the Agreement as negotiated between the parties. To seek interest for conversion from employees, who only had 6 months service, was outside of the agreed terms for permanent conversion. The result provided some of the Applicants with fewer hours than the average hours worked over the last 12 months, therefore lessening the ability to accept permanent conversion, where the outcome would provide permanency but lesser hours, at a reduced full-time hourly rate.

[102] For the reasons set out, it is Recommended that the employer review the 12 applications in accordance with the agreed terms of the provision and provide the outcome to those employees and their representative, in writing, within 14 days of the date of this Decision.

[103] For the aforementioned reasons, the answer to the question is that there is no obligation on the employer to undertake permanent conversion, but there is an obligation to provide a response to an employee, that exercises the right to make an application, that is in accordance with clause 3.1.4.

[104] I Order accordingly.

COMMISSIONER

Printed by authority of the Commonwealth Government Printer

<PR715056>

 1   PN173

 2   PN177

 3   PN179

 4   PN182

 5   PN183 – PN185

 6   PN186-PN187

 7   [2017] FWCFB 3005.

 8   Cambridge English Dictionary definition of ‘apply’.

 9   Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union’ known as the Australian Manufacturing Workers Union (AMWU) v Berri Pty Limited (Berri)[2017] FWCFB 3005.

 10   [2019] FWCFB 4022

 11   [2017] FWCFB 3005.

 12   Attachment B to Ms Garden’s Statement; being the set of slides used in the April 2019 presentation titled ‘Contact Centre Update on our Operating Changes’, under the slide ‘Expectations’.

 13   Paragraphs 16-22 of Applicant’s submissions in reply.