Australian Municipal, Administrative, Clerical and Services Union v Powercor Australia Ltd & CitiPower Pty Ltd

[2021] FWC 4526

[2021] FWC 4526

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.739—Dispute resolution

Australian Municipal, Administrative, Clerical and Services Union
v
Powercor Australia Ltd & CitiPower Pty Ltd
(C2020/7075)

DEPUTY PRESIDENT GOSTENCNIK MELBOURNE, 29 JULY 2021

Application for Commission to deal with dispute in accordance with dispute settlement procedure in enterprise agreement.

[1] By its application dated 18 September 2020 the Australian Municipal, Administrative, Clerical and Services Union (ASU) applied under s 739 of the Fair Work Act 2009 (Cth) (Act) for the Commission to deal with a dispute in accordance with the dispute settlement procedure found in clause 12 of the Powercor Australia Ltd/CitiPower Pty Ltd & ASU, PA, UWU Enterprise Agreement 2020 (Agreement). Described in the Agreement as the ‘Company’, Powercor Australia Ltd and CitiPower Pty Ltd (Respondents) own and manage electrical distribution infrastructure such as poles and wires delivering electricity to various homes and businesses in Victoria and are covered by the Agreement as is the ASU. CitiPower’s distribution network covers Melbourne’s CBD and suburbs in the inner north, east and south of greater Melbourne. Powercor’s distribution network covers the western, northwest and southwest regional areas of Victoria. The dispute is about whether persons employed under the Agreement and described in these proceedings as ‘non-technical’ Works Delivery Coordinators (WDCs) are entitled, subject to performance and competence, to progress through pay points 17 to 21 of the pay structure for which the Agreement provides, without enrolling in or obtaining an Advanced Diploma qualification in ESI Power Systems or a relevant technical trade discipline. WDCs who hold these qualifications are described as ‘technical’ WDCs.

[2] The parties have framed the following agreed question to be determined by arbitration:

“Can the Works Delivery Coordinators (WDCs) employed by the Respondent progress through levels 17 to 21 of the pay structure based on their performance and competence in the role without enrolling in or obtaining an Advanced Diploma qualification in ESI Power Systems or a relevant technical trade discipline?”

[3] The answer to the question turns on the proper construction of the Agreement. The construction of provisions of an enterprise agreement begins with a consideration of the ordinary meaning of the words, read in context, taking account of the evident purpose of the provisions or expressions being construed. Context may be found in the provisions of the agreement taken as a whole, or in their arrangement and place in the agreement. The statutory framework under which the agreement is made or in which it operates may also provide context, as might an antecedent instrument or instruments from which a particular provision or provisions might have been derived. The industrial context in which an agreement is made and operates is also relevant. Thus, the language of an agreement is to be understood in the light of its industrial context and purpose, not in a vacuum or divorced from industrial realities. But context is not itself an end and a consideration of the language contained in the text of the agreement being considered remains the starting point and the end point to the task of construction. A purposive approach to interpretation is appropriate, not a narrow or pedantic approach. 1

[4] Clause 6 of the Agreement, though titled “Relationship with Award” provides that policies as detailed in the Human Resources Policy Manual and in operation at the date of approval of the Agreement, will continue to apply but that these policies are not incorporated into, and do not form part of this Agreement or any of its terms. Properly construed, this means that the identified policies do not operate as terms of the Agreement and must give way to the Agreement in the event of inconsistency.

[5] The Respondents maintain a policy titled “Manage Employee Performance Policy”. 2 There appears to be no dispute that this policy is one of the policies detailed in the Human Resources Policy Manual as indicated in clause 6 of the Agreement. As one of its stated purposes, the policy states that the performance management system is designed to promote a results orientated approach to work that will identify outstanding, satisfactory and below satisfactory performance, and initiate appropriate actions, including reward and sanctions.3 The policy also deals with the subject of a “Remuneration Recommendation Form” as is applicable to “Award employees”.4 The reference to “Award employees” in the policy is intended to also embrace those employees to whom an enterprise agreement applies.5 The Remuneration Recommendation Form provisions of the policy provide as follows:

A Remuneration Recommendation Form is to be completed as part of the final review process for all Award employees who are being nominated for a pay point increase. Specific salary progression guidelines apply. Further information on salary guidelines and form completion is set out below.

Pay Structure: The CitiPower and Powercor Award Employee pay structure is based on Pay Ranges. All positions are placed within a Pay Range depending on the relative work value of the role as determined by the job evaluation process. An employee may progress by one or two pay points annually until they reach the top pay point within the Pay Range for their position.

Single Increment - Employees not at the top of the Pay Range are able to progress one pay point annually (within their pay range) subject to meeting the defined performance standards for both Goals and Values. This increment requires General Manager approval.

Double Increment - Employees not at the top of the Pay Range are able to progress two pay points (within their pay range) subject to demonstrating Outstanding Performance; that is, achieving an Overall Performance Rating of 5. This double increment requires General Manager approval.

No Change - No change should be recommended where the employee has not met the defined performance standards; that is, achieved an Overall Performance Rating of 1 or 2. This requires General Manager approval.

Once an employee’s performance has been assessed, the Remuneration Recommendation Form is completed and forwarded to the appropriate level manager for sign off. Once complete, the form is forwarded to People, Culture and Legal for processing.

[6] Several things may be observed about the policy. First, it is not a term of the Agreement. Second, the terms reproduced above appear to proceed on the basis that positions occupied by Award employees are placed within a Pay Range (presumably in accordance with an applicable enterprise agreement). Third, any progression within the pay range assigned is assessed by reference to performance. Fourth, any recommendation for pay point progression is subject to sign off, suggesting that progression upon achieving a particular performance assessment is not guaranteed. Fifth, the process described is for nominating an employee for a pay point increase. It does not mandate that outcome.

[7] I will return to the significance of this policy later in this decision.

[8] Clause 17 of the Agreement relevantly directs attention to Appendix 1 for pay rates for ASU/PA classifications and to Appendix 3 for job classifications. Relevant also is the fact that the remainder of clause 17 deals with, inter alia, rules for pay point progression for entry level graduate engineers and technical trainees as well as career path and progression for graduates, trainees and engineering graduates. There is no indication in clause 17 about how advancement through the various pay points is to be achieved by employees other than those described above. This is suggestive of an element of discretion as to the particular pay point assigned under the Agreement to an employee within the predetermined band for which Appendix 3 provides.

[9] Clause 44 of the Agreement – titled “Classification structure and career paths” – provides:

The parties to this agreement recognise that continuing skills acquisition by employees is essential for the continued competitiveness of the Company.

The parties therefore recognise the importance of training and development for all employees. Training and development will be provided by the Company’s training programs and through company supported external providers.

The parties agree to use an agreed job evaluation system to ensure that work of equal value within the Company is paid equally.

Any grievance with the system will be managed through the grievance procedure outlined in this agreement.

The Company is committed to career paths that will enable employees to extend their skills, increase their contribution to the business and be rewarded appropriately. Career paths will have regard to national competency standards where appropriate.

The Company agrees to honour all pre-existing “grandfather” arrangements arising out of the job evaluation process as part of the Performance Management Programme evaluations.

No employee will be disadvantaged as a result of the implementation of this clause. Any disputes in relation to the implementation of this clause shall be settled within the Grievances Procedure.

[10] It is uncontroversial that the agreed job evaluation system to which reference is made in clause 44 of the Agreement is the Korn Ferry Hay job methodology. 6 In short compass, the Korn Ferry Hay job methodology assesses each role according to metrics in know-how, problem solving and accountability in order to assign ‘points’ to roles. These points then aggregate and align with a profile and grading system developed by Korn Ferry Hay that groups roles of similar standing, size, complexity and value.7 From this a pay point under the Agreement for each job classification role is fixed and assigned.8

[11] The WDC role was created in 2015 following the Respondents restructuring the way the work delivery program is carried out. 9 Applying the Korn Ferry Hay job methodology to the WDC role, that role was assessed to correspond to particular pay points and included in the classification structure of the predecessor enterprise agreement, the Powercor Australia Ltd/CitiPower Pty Ltd & ASU, PA, NUW Enterprise Agreement 2016. That assessment was not altered when the Agreement was made and the WDC classification and its designated range or band of pay points continues to be reflected in current Appendix 3 to the Agreement.10

[12] Clause 44 requires the use of an agreed job evaluation system to ensure that work of equal value within the Company is paid equally. Several propositions arise from this obligation. The first is the identification of a job evaluation system that is agreed. As I have already noted that is the Korn Ferry Hay job methodology. Second, Korn Ferry Hay job methodology must be used to ensure “that work of equal value within the Company is paid equally”, presumably under the Agreement. This would involve using the Korn Ferry Hay job methodology to assess the relative work value of the work for each role covered by the Agreement. Thirdly, it seems to me that the obligation is ongoing, that is to say, the use of the Korn Ferry Hay job methodology can only ensure work of equal value is paid equally, if it is deployed on a regular or periodic basis to make relative work value assessments particularly as circumstances change and also perhaps as disputes about relative work value arise. The verb “ensure” means make certain that something will occur or be the case. Here the “something” which must be ensured is ‘that work of equal value within the Company is paid equally’. Fourthly, assessing work value of a job and relative work value as between jobs requires, inter alia, an assessment of the nature of the work, skill and responsibility required and the conditions under which the work is performed and when comparing two jobs to assess whether the work value of the jobs is equal, one must consider whether as between the two jobs, the matters assessed are equal, that is, the same or alike. Fifth, in order that clause 44, which has a continuing role, may be reconciled with Appendix 3 which has fixed pay point bands for classifications, the fixing of particular pay points within a band to a role in a classification may be assessed on relative work value grounds by using the agreed job evaluation system (Korn Ferry Hay job methodology) to ensure that work of equal value is paid equally. Perhaps put another way, that the fixed pay point is appropriate (on work value grounds) for the work performed.

[13] The Agreement compels that a person who is employed as a WDC under the Agreement be paid in the range of pay points 17 to 21. So much is clear from Appendix 3 to the Agreement. There is no dispute that in relative or actual work value terms, pay points 17 to 21 are appropriate for the role of WDC. The Agreement makes no distinction between ‘non-technical’ WDCs and other WDCs who are enrolled in or have obtained an Advanced Diploma qualification in ESI Power Systems or a relevant technical trade discipline.

[14] The Agreement also makes no express provision which assists in determining how a WDC progresses, if at all, through the assessed pay point range. Consequently, the fixing of a pay point for a WDC employee within the prescribed pay band in Appendix 3, is a discretionary matter for the Respondents, informed by its policy, and subject to the overarching obligation in clause 44 to apply the Korn Ferry Hay job methodology to ensure that work of equal value is paid equally.

[15] The essential contentions advanced by the ASU may be summarised as follows:

•  The Respondents’ April 2015 WDC position description 11 provides that the role of WDC is banded at pay point 17-21.

•  The Respondents’ Manage Employee Performance Policy earlier mentioned, makes provision that subject to an employee meeting the defined performance standards for both goals and values, the employee is able to progress one pay point annually and, if performance is outstanding, the employee may progress two pay points.

•  All WDCs employed by the Respondents, with or without the qualification, perform the same job and are therefore entitled to equal pay and progression opportunities.

•  Clause 44 reinforces this principle by providing that work of equal value should be paid equally.

•  The practice within the workplace, which is prescribed by the Manage Employee Performance Policy, dictates that provided employees meet the defined Performance Standards they are eligible to progress annually.

•  Although the Agreement does not state that progression is automatic based on meeting the performance standards, the only inference that can be drawn from the entitlement to equal pay for work of equal value and that the job range for a WDC is pay points 17-21 is that progression is automatic if the requisite performance standards are met and if the work is of equal value.

[16] These contentions are rejected for the following reasons. First, the ASU’s contentions, and indeed much of the evidence it led in this proceeding make the assertion that all WDCs perform the same role or job. However, little attempt is made to address the question whether the work performed by technical and non-technical WDCs is work of equal value. In other words, the ASU does not grapple with the issue of that impact the qualifications held by technical WDCs have on assessing whether the work is of equal value. Thus, in assessing whether the work is of equal value, what, for example, is the weighting to be given to the qualifications in evaluating the relative skills and responsibilities of the technical WDC compared to the non-technical WDC?

[17] Second, the contention that there must be progression through pay points within the WDCs band finds no support in the text of the Agreement, except for the limited classes of employees earlier identified. The Agreement does not provide for either automatic progression or progression by achieving performance targets. The inference sought to be drawn, is from a contended practice of the Respondents, not from the text of the Agreement read as a whole.

[18] Third, that a position description describes a pay point range, does not mean that the Agreement compels advancement through the pay points. The position descriptions are no more than reflective of that pay point banding in Appendix 3 of the Agreement.

[19] Fourth, the Respondents’ Manage Employee Performance Policy is not incorporated into the Agreement as clause 6 makes clear. It is thus not an enforceable term of the Agreement and does not create an enforceable right to progression. Moreover, the matters dealt with in the policy as concerns Remuneration Recommendation Form, appear to me to be concerned with the completion of a prescribed form as part of the review process for “employees who are being nominated for a pay point increase”. The notion that an employee is “nominated” for a pay point increase is inconsistent with a right of progression through pay points subject to performance.

[20] Fifth, past practices of the Respondents do not provide a proper basis to depart from the text of the Agreement which prescribes no automatic right of progression. Past conduct of the parties may be relied upon as an aid to construction if there is clear evidence that the parties acted upon a common understanding as to the meaning of the relevant provisions of the Agreement. However, there is no evidence that the Manage Employee Performance Policy has been applied pursuant to a settled interpretation based upon a common understanding of the parties. Much less is there any attempt to explain how the application of a policy which is expressly not a term of the Agreement, can compel a right to progression through pay points under the Agreement, where the Agreement contains no such express right.

[21] Sixth, on a proper construction of the Agreement, for the reasons explained earlier, the Agreement fixes a pay point range for WDCs, but does not set out how progression, if any, occurs. It does not compel progression. The determination of a particular pay point within a prescribe range or band is a matter left to the Respondents, informed by the policy but not mandated, and subject to the overriding obligation in clause 44 to ensure equality in pay for equality in the value of work by applying the Korn Ferry Hay job methodology.

[22] Although the ASU’s evidence was directed to the work undertaken by WDCs in an attempt to establish that the roles of technical and non-technical WDCs are the same and that the so-called technical aspects of the role are not performed at all by WDCs, 12 no attempt is made to engage with clause 44. None of the ASU’s evidence is directed to the application of the Korn Ferry Hay job methodology in assessing whether work of non-technical WDCs is of equal value and therefore should be paid equally to that of a technical WDC under the Agreement. This is perhaps unsurprising given the question as framed focusses on a right of progression subject to performance and does not focus on the issue raised by clause 44. There is no right of progression absent an established equality in the value of work between non-technical and technical WDCs assessed by reference to the Korn Ferry Hay job methodology. The only analysis undertaken, confined as it was to a comparison between job descriptions, was that undertaken by the Respondents13 and appears to support a pay differential as the assessed value of the relative work was not equal. This evidence was not countered effectively by the ASU by any reference to the Korn Ferry Hay job methodology, save for the contention that the job descriptions do not reflect the work. This may be so, but it was incumbent on the ASU to bring forth probative evidence of the actual work performed by both technical and non-technical WDCs and evidence about how the value of that work is assessed by reference to the Korn Ferry Hay job methodology. This it did not do. And as I have already observed no attempt is made by reference to Korn Ferry Hay job methodology to assess the impact the qualifications held by technical WDCs has on assessing whether the work is of equal value. Plainly the possession of relevant qualifications has an impact on the skill possessed and deployed and responsibility that an employee is or may be required to undertake in carrying out work.

[23] It follows from the forgoing that in answer to the question posed - the Agreement does not mandate or entitle WDCs employed by the Respondent[s] to progress through levels 17 to 21 of the pay structure based on their performance and competence in the role without enrolling in or obtaining an Advanced Diploma qualification in ESI Power Systems or a relevant technical trade discipline.

[24] It should also be obvious from my analysis above, that I do not accept the Respondents’ contention that on a proper construction of the Agreement the Respondents retain an unfettered discretion in respect of determining pay points for WDCs. There is doubtless a discretion to determine a pay point within the predetermined band assigned to the WDC classification in Appendix 3, but the discretion is not at large. It is confined because of the overarching obligation in clause 44.

[25] During the course of the hearing, I raised two questions with the parties and allowed time for further submissions. The first then proceeded on the assumption that the Respondents have a discretion to determine under the Agreement the pay point within the 17 to 21 pay point band applicable to WDCs at which an individual WDC is to be paid. For the reasons given I have determined that there is a discretion and have described the nature of that discretion. The question was whether a dispute about the exercise of the discretion or about the criteria used to exercise that discretion can be dealt with under the dispute settlement procedure of the Agreement. In their subsequent submissions both parties correctly accepted that the answer must be ‘yes’. The second question assumed the answer to the first question was ‘yes’ and was whether this dispute should be determined by reference to whether the technical WDC and non-technical WDC distinction is an appropriate criterion for determining the extent to which a WDC may progress through pay points 17-21. Unsurprisingly the ASU contended that it could or should so be determined and the Respondents contended to the contrary.

[26] I do not consider that it is appropriate to determine the dispute by reference to the second question, although for different reasons to those advanced by the Respondents. First, and primarily, the case was not conducted in this way as is evident by the initial question framed by the parties. Second, apart from the assertion of the non-technical WDCs who gave evidence in the ASU case that their work and that of technical WDCs is the same, there is an insufficient evidentiary case advanced by reference to which any meaningful assessment could be made. As I have already indicated the limited comparison of position descriptions undertaken by the Respondents by reference to the Korn Ferry Hay job methodology suggests a differential in relative work value and thus perhaps that the distinction is appropriate.

[27] For the reasons given I determine in answer to the agreed question posed that the Agreement does not mandate or entitle WDCs employed by the Respondents to progress through levels 17 to 21 of the pay structure based on their performance and competence in the role without enrolling in or obtaining an Advanced Diploma qualification in ESI Power Systems or a relevant technical trade discipline.

[28] The dispute is determined accordingly.

DEPUTY PRESIDENT

Appearances:

P Balk of the ASU for the Applicant
F Leoncio of Counsel for the Respondent

Hearing details:

2021
Melbourne
24 and 25 May

Written submissions:

Applicant, 10 February, 10 March and 1 July 2021
Respondent, 3 March, 1 July and 8 July 2021

Printed by authority of the Commonwealth Government Printer

<PR732186>

 1   WorkPac Pty Ltd v Skene [2018] FCAFC 131 at [197] and the authorities referred to therein; see also King v Melbourne Vicentre Swimming Club Inc [2020] FCA 1173 at [122]-[130] and the authorities referred to therein

 2   Exhibit 2, annexure DF-10

 3   Ibid at p 1 of 9

 4   Ibid at p 7 of 9

 5   Ibid at p 3 of 9

 6   Transcript PN816-PN820; Exhibit 7 at [8]

 7   Exhibit 7 at [7] and annexure LN-1

 8   Transcript PN825-PN826

 9   Exhibit 7 at [9]

 10   Exhibit 7 at [9]-[10]

 11   Exhibit 2, attachment DF-3

 12   Exhibit 2 at [12]-[22], [31]; Exhibit 4 at [13]-[15]; Exhibit 5 at [14]-[24]

 13   Exhibit 10