Australian Municipal, Administrative, Clerical and Services Union v Virgin Australia

[2013] FWC 2722

[2013] FWC 2722

FAIR WORK COMMISSION

DECISION

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

Australian Municipal, Administrative, Clerical and Services Union
v
Virgin Australia
(C2012/5614)

VICE PRESIDENT WATSON SYDNEY, 3 MAY 2013

Application for the Fair Work Commission to deal with a dispute under and enterprise agreement - Virgin Blue Ground Crew Agreement 2010 - Clause 17 - disability allowance - ‘limited’ or ‘excessive’ rates - Fair Work Act 2009 - s.739. Alleged dispute concerning disability allowance in accordance with clause 17.

Introduction

[1] This decision concerns an application by the Australian Municipal, Administrative, Clerical and Services Union (ASU) for the Fair Work Commission (the Commission) to deal with a dispute between itself and Virgin Australia Airlines Pty Ltd (Virgin) pursuant to s.739 of the Fair Work Act (the Act). The dispute concerns the interpretation and application of Clause 17 of the Virgin Blue Ground Crew Agreement 2010 1 (the Agreement), which relates to disability allowances payable to Virgin staff during refurbishment works at Melbourne’s Tullamarine airport in 2012.

[2] The application was made on 11 October 2012, and was listed for conference on 30 October, and again on 11 November. The parties were not able to reach a resolution, and the arbitration of the matter was heard on 26 March 2013 and 23 April 2013. At the hearing, Mr T. O’Loughlin appeared for the ASU, with Ms K. Garner, of counsel, appearing for Virgin.

Background

[3] The dispute concerns ground crew staff employed by Virgin at Melbourne’s Tullamarine airport. Between June and December 2012, refurbishment works were being carried out in Terminal 3 of the airport. Terminal 3 is a large terminal, covering multiple levels at the western end of the main terminal building at the airport.

[4] The refurbishment works were staged over the 7 month period and included construction works in the check in area, the arrivals hall, the concourse and the boarding gate areas of the terminal. The works carried out involved the removal and replacement of carpet and tiles throughout the terminal, the removal of an escalator and the installation of new panelling around support structures within the terminal.

[5] Virgin led evidence that the construction works were largely carried out during non-operational times in an attempt to avoid disruption to staff and passengers. 2 For example “noisy work” in the check-in hall was limited to 9.30pm - 11.30pm and 2am - 4am. At the boarding gates, team members were not rostered to work on a gate during the hours that construction work was taking place at that gate. Boarding through a gate undergoing renovations was limited to the commencing and terminating flights each day while no construction work was being undertaken. Further mitigation strategies included:

• the relocation of check-in team members to counters away from the areas where the construction work was taking place,



• the erection of floor to ceiling timber hoarding around areas being refurbished,



• the provision of dust covers for work stations,



• the contracting of additional cleaning services in the check in hall, boarding gates and the arrivals hall, and



• the restriction of access to areas being refurbished while construction works were carried out.

[6] Virgin led evidence from its Airport Manager, Karen Crook, its Leader of Guest Services Operations, Ryan Bradshaw and its Safety and Quality Specialist, Skip Fulton.

[7] The ASU contested some of this evidence. It led evidence that the noisy construction works were not limited to non-operational times and that other elements of the building works such as noise, dust, fumes and poor air quality affected all staff during the entire construction period. Specific evidence of the disabilities encountered was given by the ASU organizer responsible for Virgin employees in Melbourne, Gail Drummond, and Virgin Tullamarine airport Guest Services employees Thi Huong Duong Tran, Michelle D’Souza, Christopher Cruse and Roxanne Martinez. Photographic and video evidence was produced as to the circumstances at certain times.

[8] During the course of the renovations the ASU sought to have ground crew staff paid the highest level of the disability allowance as provided for in Clause 17 of the Agreement for all work performed by Virgin employees during this period. Following correspondence and discussions between the parties, Virgin communicated to staff in September 2012 that it would pay the ‘limited’ disability allowance to team members who were exposed at certain times to construction work. The circumstances were reviewed further over the course of the next two months. Ultimately the ‘limited’ rate was paid to team members who were assigned to work:

• at a boarding gate that was behind hoarding and under refurbishment for the period they were rostered to work in the affected area rounded up in hourly blocks;



• a terminating shift at Check-in while the carpet was being removed and tiles laid, for the hours this work was carried out; and



• a terminating shift in Baggage Services while the carpet was being removed and tiles laid for the hours this work was carried out.

[9] The ‘excessive rate’ of allowance was paid to some ground services staff on a small number of occasions as follows:

• when heavy construction work occurred outside the permitted hours; and



• on a case by case basis when employees lodged reports about the construction work and investigations revealed that construction work was being undertaken during the relevant period.

The Issue for Determination

[10] The ASU bases its claim on Clause 17 of the Agreement which sets out various allowances payable to ground crew staff in certain circumstances. Clause 17(b) relevantly provides:

“17. Allowances

The allowances for the below activities for Ground Crew will increase by the percentages awarded to wage increases during the life of this Agreement. The allowances for year 1 are as follows:

Activity

Allowance

(a) ....

....

(b) disability allowance (for 2 weeks or more of construction impeding the work environment):

(i) excessive fumes, noise and dust (per hour), which is payable where work takes place in an environment where there are excessive fumes, noise, dust or other like substances/disabilities because of construction work.

(ii) limited fumes, noise and dust (per hour), which is payable where work takes place in an environment where there are fumes, noise, dust or other like substances/disabilities because of construction work.”

$0.85

$0.46

”

[11] The ASU submits that the quantum of these allowances should have been adjusted in line with previous salary movements and this appears not to be in dispute.

[12] Both parties accept that the dispute should be resolved by making an assessment as to the correct entitlements of employees under clause 17(b). This question involves resolving a dispute over the proper interpretation of the clause and applying the correct interpretation to the facts as established by the evidence.

[13] The conflicting interpretations can be described as follows. The ASU submits that the clause provides for a two week qualifying period and that the disability allowance, at the appropriate level, kicks in for the entire period of the shifts when staff are working in an area where construction works are taking place. Virgin submits that the clause requires the disability allowance to be paid only for the time the employee was rostered to work in an area affected by noise, fumes or dust because of the construction work.

[14] The factual element of the dispute flows from the resolution of the interpretation issue. It requires an assessment of the prerequisites for payment of the allowance, whether the employees were exposed to noise, dust, fumes and other like substances, and whether that exposure was such as to trigger an entitlement at the ‘limited’ or ‘excessive’ rate.

The Proper Interpretation of the Clause

[15] Clause 17(b) has not been subject to any previous interpretation by a court or tribunal. However it closely resembles disability allowance provisions of airline awards and agreements that have been subject to previous disputes and interpretations.

[16] The principles of interpretation of enterprise agreements are not in dispute. The leading High Court case is the case of Amcor Ltd v Construction, Forestry, Mining and Energy Union; Minister for Employment and Workplace Relations v Construction, Forestry, Mining and Energy Union 3 (Amcor). In that case Gummow, Hayne and Heydon JJ stated:

“30. Clause 55.1.1 must be read in context. It is necessary, therefore, to have regard not only to the text of cl 55.1.1, but also to a number of other matters: first, the other provisions made by cl 55; secondly, the text and operation of the Agreement both as a whole and by reference to other particular provisions made by it; and, thirdly, the legislative background against which the Agreement was made and in which it was to operate.”

[17] Kirby J said:

“94. However, certified agreements such as this commonly lack the precise drafting of legislation. As appears from a scrutiny of the provisions of the Agreement, it bears the common hallmarks of colloquial language and a measure of imprecision. Doubtless this is a result of the background of the drafters, the circumstances and possibly the urging of the preparation, the process of negotiation and the omission to hammer out every detail - including possibly because such an endeavour would endanger the accord necessary to consensus and certification by the Commission.

96. The nature of the document, the manner of its expression, the context in which it operated and the industrial purpose it served combine to suggest that the construction to be given to cl 55.1.1 should not be a strict one but one that contributes to a sensible industrial outcome such as should be attributed to the parties who negotiated and executed the Agreement. Approaching the interpretation of the clause in that way accords with the proper way, adopted by this Court, of interpreting industrial instruments and especially certified agreements. I agree with the following passage in the reasons of Madgwick J in Kucks v CSR Ltd, where his Honour observed:

‘It is trite that narrow or pedantic approaches to the interpretation of an award are misplaced. The search is for the meaning intended by the framer(s) of the document, bearing in mind that such framer(s) were likely of a practical bent of mind: they may well have been more concerned with expressing an intention in ways likely to have been understood in the context of the relevant industry and industrial relations environment than with legal niceties or jargon. Thus, for example, it is justifiable to read the award to give effect to its evident purposes, having regard to such context, despite mere inconsistencies or infelicities of expression which might tend to some other reading. And meanings which avoid inconvenience or injustice may reasonably be strained for. For reasons such as these, expressions which have been held in the case of other instruments to have been used to mean particular things may sensibly and properly be held to mean something else in the document at hand.’” (references omitted)

[18] Callinan J stated that there was substance in the abovementioned observations of Madgwick J in Kucks v CSR Limited 4 (Kucks). He then said:

“131. An industrial agreement has a number of purposes, to settle disputes, to anticipate and make provision for the resolution of future disputes, to ensure fair and just treatment of both employer and employees, and generally to promote harmony in the workplace. It is with the third of these that cl 55 of the Agreement is particularly concerned. It is important to keep in mind therefore the desirability of a construction, if it is reasonably available, that will operate fairly towards both parties. …”

[19] In Kucks, following the passage quoted above, Madgwick J went on to say:

“But the task remains one of interpreting a document produced by another or others. A court is not free to give effect to some anteriorly derived notion of what would be fair or just, regardless of what has been written into the award. Deciding what an existing award means is a process quite different from deciding, as an arbitral body does, what might fairly be put into an award. So, for example, ordinary or well-understood words are in general to be accorded their ordinary or usual meaning.”

[20] A leading case in relation to the interpretation of agreements is Codelfa Construction Pty Ltd v State Rail Authority of NSW. 5 The dicta of Justice Mason, as he then was, (with whom Stephen, Aickin and Wilson JJ agreed) has frequently been adopted and applied in matters concerning the interpretation of enterprise agreements. In Codelfa His Honour said (at 352):

“The true rule is that evidence of surrounding circumstances is admissible to assist in the interpretation of the contract if the language is ambiguous or susceptible of more than one meaning. But it is not admissible to contradict the language of the contract when it has a plain meaning. Generally speaking facts existing when the contract was made will not be receivable as part of the surrounding circumstances as an aid to construction, unless they were known to both parties, although, as we have seen, if the facts are notorious knowledge of them will be presumed.

It is here that a difficulty arises with respect to the evidence of prior negotiations. Obviously the prior negotiations will tend to establish objective background facts which were known to both parties and the subject matter of the contract. To the extent to which they have this tendency they are admissible. But in so far as they consist of statements and actions of the parties which are reflective of their actual intentions and expectations they are not receivable. The point is that such statements and actions reveal the terms of the contract which the parties intended or hoped to make. They are superseded by, and merged in, the contract itself. The object of the parol evidence rule is to exclude them, the prior oral agreement of the parties being inadmissible in aid of construction, though admissible in an action for rectification.

Consequently when the issue is which of two or more possible meanings is to be given to a contractual provision we look, not to the actual intentions, aspirations or expectations of the parties before or at the time of the contract, except in so far as they are expressed in the contract, but to the objective framework of facts within which the contract came into existence, and to the parties' presumed intention in this setting. We do not take into account the actual intentions of the parties and for the very good reason that an investigation of those matters would not only be time consuming but it would also be unrewarding as it would tend to give too much weight to these factors at the expense of the actual language of the written contract.”

[21] There was no evidence led as to the intention of the parties when making the agreement. However reference was made to other decisions dealing with the interpretation of similar clauses in other instruments. I note in particular the decision of Commissioner Lawson 6 in a dispute between the ASU and Ansett in 2001, which also concerned construction works at Melbourne airport in what is now the Virgin terminal. In the relevant instrument, the Clerks (Domestic Airlines) Award, the preamble stated “Where the normal working conditions of employees are adversely affected...at or in the immediate vicinity of the premises...” Commissioner Lawson said that this preamble meant that only when an employee’s normal working conditions are adversely affected by the construction work will the allowance be payable. The other cases referred to by the parties support an interpretation that only when the disabilities mentioned in the clause are actually experienced is the allowance payable.

[22] I note that the award clause considered by Commissioner Lawson is now reflected in the Airlines Operations -Ground Staff Award 2010 and is in the following terms:

“21.7 Disability allowance

(a) If significant disabilities occur for a period of two weeks or more because of construction, reconstruction, alteration, major repair or other like work at or in the immediate vicinity of the premises in which the employees are required to work, employees will be paid the following allowances from the date of the application:

(i) if the construction work involves excessive fumes, noise and dust through construction vehicles, drilling, electric saws and jack hammering, form work and concrete pours—0.12% of the standard rate per hour; and

(ii) if the construction work involves noise and dust to a limited degree due to alterations and/or the removal or installation of plant and machinery and a marked reduction in work space—0.066% of the standard rate per hour.

(b) The date of effect for the allowance will be from the date of the claim subject to substantiating the existence of the disability.”

[23] I have considered the wording of clause 17 (b) in the context of the wording of the agreement as a whole. In my view the notion of a disability allowance, the introductory concept of construction “impeding the work environment,” and the allowance being payable on an hourly basis implies that the allowance is payable only when the disabilities concerned are being experienced by an employee in their immediate work environment. I do not consider that the clause should be interpreted as creating a more general entitlement on expiry of the two week qualifying period. Such an interpretation would be inconsistent with the approach taken to interpreting similar provisions in related instruments in the aviation industry and contrary to the ordinary meaning of the words in the clause itself. In my view the clause requires an assessment of the ingredients of the clause applied to the individual circumstances of each employee. In my view the ingredients are:

• Did construction impede the work environment?



• Did work take place in an environment where there are fumes, noise, dust or other like substances/disabilities because of construction work?



• If so, can the disabilities be described as limited or excessive?

[24] In my view this involves a consideration of the circumstances of each employee and the impact of the construction activities on their work environment. I turn to consider these matters on the basis of the evidence adduced in the proceedings.

Construction Impeding the Work Environment

[25] In my view construction impedes the work environment when construction activities occur in the immediate vicinity of work being performed by Guest Services staff. The references to the type of disabilities intended to be compensated by the clause imply that usually construction work will be taking place when the disabilities are experienced. Noise, fumes and dust are common incidents of construction activity - and not necessarily incidents of a vacant construction site. Hence, in my view the primary application of the concept of construction impeding the work environment will be when construction activities are being undertaken.

[26] However in my view it is possible that construction can be regarded as impeding a work environment if the work takes place at a workplace that is effectively a construction site. If employees are required to walk in and around hoardings, work from desks and work stations affected by dust from recently performed construction activities at that location, and operate in a partially refurbished work environment, the situation, in my view, falls within the description of construction impeding the work environment - even though no construction activities are being performed at the relevant time.

[27] It is necessary to consider the evidence in more detail to ascertain the extent to which employees worked in an environment where construction impeded the work environment. I accept the evidence of Mr Bradshaw as to the dates, times and nature of the construction activities. His evidence is detailed and comprehensive.

[28] Construction work at the arrivals hall took place between 9 July 2012 and 22 October 2012. Work was generally undertaken between 12.30 am and 4am. On the limited occasions when work was carried on outside of these times staff affected were paid the disability allowance at the ‘excessive’ rate. A team member rostered on a terminating shift in baggage services, while the carpet was being removed and tiles laid, was paid the ‘limited’ rate for the hours this work was carried out.

[29] Construction work at the check in hall occurred between 6 June 2012 and 10 December 2012. Work was conducted between the hours of 9.30pm to 11.30pm and 2am to 4am. Some less noisy work was conducted outside this period. The ‘excessive’ disability rate was paid when work occurred outside these hours. Check-in team members were relocated away from the areas where construction was taking place. Team members rostered a terminating shift at check-in while the carpet was being removed and tiles laid was paid for the hours this work was being carried out at the ‘limited’ rate.

[30] For boarding gates, the work was conducted sequentially along the boarding concourse. On very limited occasions work was carried out on more than one gate at a time. The construction work was carried out between the hours of 2am and 4am at each boarding gate. Use of the gates under construction was limited to two flights per day outside the period of construction activity. Floor to ceiling hoardings were used to restrict access, covers were placed over boarding gate workstations and designated walk way areas were roped off. Team members assigned to board or disembark a flight through a boarding gate that was behind hoarding were paid a disability payment at the ‘limited’ rate for the period they were rostered to perform their duties in the affected area, rounded up to the hour.

[31] Virgin led evidence that the original decision to pay the ‘limited’ rate was made by Ms Crook in consultation with Mr Bradshaw, Mr Fulton, Mr Jason Davey (an operations leader), Ms Annie Johnson and Ms Lorie Jardine. 7 The ‘excessive’ rate was paid to some staff members on occasion during the construction works.

[32] The ‘excessive’ rate was paid to:

• seven team members in the arrivals hall in July because of noisy work carried outside the normal construction hours,



• twelve team members in the check-in services desk and four team members in boarding gates in July because of heavy fumes arising from glue being removed from the floor outside permitted hours,



• two team members in arrivals and eight team members in check-in services in August because of a short period of heavy construction outside the permitted hours for that work,



• five team members in check-in services, six team members at the boarding gates and one team member in the check-in baggage gate in August because of heavy construction works being conducted for boarding that was unable to be relocated,



• thirty team members in November because of noisy work carried out by contractors outside the permitted hours, and



• six team members at check-in December because of heavy construction work being undertaken outside the agreed hours.

[33] Team members who worked at neighbouring gates, or had to walk from one area to another undergoing construction work to deliver a wheelchair or assist a passenger were not paid an allowance.

[34] The determination of when to pay the ‘excessive’ rather than the ‘limited’ rate was made by Ms Crook and Mr Bradshaw, in consultation with Mr Fulton, Mr Davey and the shift leaders. Ms Crook gave evidence that three main factors were considered when determining the rate of the allowance:

“(a) the normal results of air-quality testing and asbestos testing conducted in July, August and December 2012 by Virgin Australia

(b) mitigation strategies implemented by the contractors on the instruction of Virgin Australia; and

(c) shift leader and supervisor feedback regarding the relevant work areas and the extent of the construction work in those areas.” 8

[35] Mr Bradshaw gave evidence that in addition to the factors set out by Ms Crook, he worked in Terminal 3 during the refurbishment and saw that the mitigation strategies were effective in limiting the effects of the construction work.

[36] Various air quality and asbestos testing was carried out during the refurbishment project by specialist contractors. The results of the air testing were consistently reported to be ‘within normal range.’ Mr Bradshaw gave evidence that from his observations and the results of testing, the effects of noise, dust and fumes from the construction work was effectively contained by the mitigation steps taken in most instances. Where they were not, the allowance was paid at the appropriate level.

[37] The terminal manager, Ms Crook conducted daily meetings of her three operational leaders, considered the safety related matters and the issue of payment of the disability allowance. Virgin investigated particular incidents reported to supervisors and adjusted payments when management considered that disabilities arose that had not been compensated.

[38] The evidence of the ASU witnesses was more general. Detailed evidence was given as to particular disabilities but this was often not tied to particular days or periods where payment had been declined.

[39] Ms D’Souza gave evidence of contracting a rash and submitting incident reports on two occasions. Virgin was aware of incident reports regarding a rash on two occasions but the dates do not correspond to Ms D’Souza’s account. The first incident report stated that the rash was thought to be food related. The second report was lodged on a day when no construction activity occurred in the relevant work area. Ms D’Souza was paid the disability allowance on seven occasions.

[40] Ms Martinez was paid the disability allowance on seven occasions.

[41] Ms Tran was paid the disability allowance on six occasions. She gave evidence, including a video recording of noisy work on 23 November which affected the employees working on boarding gates away from the gate under construction. Mr Bradshaw gave evidence that the allowance was paid at the excessive rate for the period in question on that date.

[42] Mr Cruse was paid the disability allowance on fourteen occasions. The ASU witnesses generally submitted that the disabilities of one sort or another were experienced more frequently than had been acknowledged by payment of the allowance and at locations away from the immediate vicinity of the construction activity.

[43] I am not satisfied on the evidence that disabilities that warrant the payment of the allowance were experienced by all employees for the entire construction period. The liability only arose on particular days when construction affected their work location. However, on the cases submitted by the parties it is very difficult to assess the circumstances that existed on each day during the construction period. It is not generally clear whether disabilities that are established by the ASU evidence were not subject to the payment of the allowance on the particular day in question. In these circumstances, the only way that I believe that I can sensibly judge the extent to which Virgin complied with its obligations under the agreement is to assess its approach to the payment of the allowance.

[44] The evidence of Mr Bradshaw, Mr Fulton and Ms Crook was detailed and comprehensive. I accept that evidence as to the circumstances involved and the approach Virgin adopted.

[45] I have dealt with the submissions of the ASU about the construction of the clause and the allegation of disabilities throughout the construction period above. As far as the particular application of the allowance on particular days, the ASU has not established that the approach applied by Virgin on those particular days was inconsistent with the agreement. I do not consider that an occasional visit to an area under construction, such as assisting a passenger to the boarding gate when construction is not occurring at the time warrants the payment of the allowance. When construction is not occurring, I do not consider that employees working at a boarding gate other than the one under construction are entitled to the payment. I am satisfied that Virgin adopted the correct approach to the clause.

[46] Further, as far as the evidence allows such an assessment, I find that Virgin applied the correct approach required by the agreement in the appropriate circumstances. In particular I note that the allowance was paid to the employees who gave evidence on the days that they alleged that disabilities occurred. I am not satisfied that the ASU has established that Virgin failed to pay the allowance in any circumstance where it was required to pay the allowance.

[47] It appears that the concerns of employees that a payment was not soundly based on the requirements of the clause are in part due to the limited information given to employees at the time of the payment. It appears that the full extent of payments made by Virgin may have only been made clear when witness statements were filed in these proceedings. Clearer communication of the reasons and incidence of payment in the future may enable the employees to better understand whether they have received their proper entitlements. If any employee believes that they have not received payment of the allowance in accordance with the approach Virgin has explained in these proceedings, this should be taken up with Virgin in the first instance.

Conclusions

[48] This dispute requires a determination as to the circumstances when a disability payment is payable under the Agreement. For the reasons above I find that clause 17(b) requires an assessment of the particular disabilities experienced by each employee during the construction period. The clause does not require payment for the entire period of the construction phase after the first two qualifying weeks either as a result of the interpretation of the clause contended for by the ASU or the evidence of the extent of disabilities experienced by employees throughout the period.

[49] Clearly however the allowance was payable for disabilities experienced while construction activities occurred in the immediate vicinity of the work location and when work was required to be undertaken on what was effectively a dormant construction site. I am satisfied on the evidence that Virgin paid the allowance on those occasions.

[50] As the dispute is to be determined by a finding as to liability to pay the allowance under the agreement the dispute is determined accordingly.

VICE PRESIDENT WATSON

Appearances:

Mr T. O’Loughlin for the Australian Municipal, Administrative, Clerical and Services Union

Ms K Garner, of counsel, for Virgin Australia

Hearing details:

2013

March

26

Melbourne

April

23

Melbourne

 1   AE878131

 2   Witness statement of Ryan William Bradshaw, Exhibit G3, paragraph 17

 3 (2005) 222 CLR 241.

 4 (1996) 66 IR 182.

 5 (1982) 149 CLR 337

 6   Australian Municipal, Administrative, Clerical and Services Union v Ansett Australia Limited t/as Ansett Air Cargo

 7   Witness statement of Karen Elizabeth Crook, Exhibit G2, paragraph 33.

 8   Witness statement of Karen Elizabeth Crook, Exhibit G2, paragraph 30.

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