Australian Workers' Union, The

[2016] FWCA 2083

[2016] FWCA 2083

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.217 - Application to vary an agreement to remove an ambiguity or uncertainty

Australian Workers' Union, The
(AG2015/6651)

THE LONGFORD GAS CONDITIONING PLANT PROJECT CONSTRUCTION AGREEMENT 2013 BETWEEN CBI CONSTRUCTORS PTY LTD AND THE AMWU, AWU, CEPU AND CFMEU

Building, metal and civil construction industries
DEPUTY PRESIDENT GOSTENCNIK	MELBOURNE, 5 APRIL 2016

Application for variation of The Longford Gas Conditioning Plant Project Construction Agreement 2013 between CBI Constructors Pty Ltd and the AMWU, AWU, CEPU and CFMEU because of ambiguity or uncertainty; redundancy entitlements for shift workers uncertain; appropriate that uncertainty be removed; new provision inserted; agreement varied.

Introduction and background

[1] CBI Constructors Pty Ltd (CBI) is engaged by Esso Australia Resources Pty Ltd as the Engineering, Procurement and Construction Contractor to build a gas conditioning plant adjacent to the existing Longford Oil and Gas Processing Facilities (Project). The new gas conditioning plant will be used to process gas from the Kipper Tuna Turrum Project, Australia’s largest domestic gas development located on the eastern seaboard. Construction on the Project began in December 2013, and was programmed for completion on 30 April 2016.

[2] The employment of CBI’s employees performing work on the Project is relevantly covered by The Longford Gas Conditioning Plant Project Construction Agreement 2013 between CBI Constructors Pty Ltd and the AMWU, AWU, CEPU and CFMEU (Agreement). The Agreement is a greenfields agreement. It was approved by the Fair Work Commission (Commission) on 1 November 2013 and commenced to operate on 8 November 2013. The nominal expiry date is 31 October 2017. Apart from its application to CBI and relevant CBI employees, the Agreement also covers the Automotive, Food, Metals, Engineering Printing and Kindred Industries Union (AMWU), the Australian Workers’ Union (AWU), the Construction, Forestry, Mining and Energy Union (CFMEU) and the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU) (collectively ‘the Unions’).

[3] On 4 November 2015, I issued a decision in AMWU and AWU v CBI Constructors Pty Ltd 1 (CBI Constructors) which related to a disputed construction of particular provisions of the Agreement arising from a proposal by CBI to introduce an afternoon shift on the project. The dispute came before me pursuant to an application by the AMWU and the AWU under s.739 of the Fair Work Act 2009 (Act) for the Commission to deal with a dispute in accordance with the dispute settlement procedure of the Agreement. In the decision, I observed that “[T]hough there is some doubt about the entitlement, CBI has undertaken that employees who work afternoon shift will receive redundancy entitlements, on the same terms as all other employees: that is, payable at the hourly rate set out in clause 25.4 of the Agreement, capped at 90 hours per fortnight.”2

[4] I also observed that:

“During the course of proceedings, the AWU sought to agitate the issue of the redundancy entitlements for those employees working an afternoon shift under the Agreement. As I have earlier observed, CBI has undertaken that employees who work afternoon shift will receive redundancy entitlements on the same terms as all other employees: that is, payable at the hourly rate set out in clause 25.4 of the Agreement, capped at 90 hours per fortnight. During the course of proceedings, I expressed a view that there appears to be some doubt about the entitlements. That CBI has given the undertaking is suggestive of doubt as to the entitlement. It is to be expected that CBI would make good on its undertaking and there is no reason to suppose that it would not.

In any event, this proceeding is not the appropriate vehicle through which the doubt may be resolved. If there is ambiguity or uncertainty about the redundancy entitlements of shift workers under the Agreement, and the parties appear to agree about what the shift worker entitlement should and was intended to be, the Act makes provision for varying an agreement to remove an ambiguity or uncertainty. This is a course that is open to the AWU if CBI’s undertaking is insufficient to assuage its concerns.” 3

[5] On 13 November 2015, the AWU applied under s.217 of the Act to vary the Agreement to remove an ambiguity or uncertainty. As indicated above, the AWU is an employee organisation covered by the Agreement and therefore has standing to make the application.

[6] Although CBI initially opposed the application to vary the Agreement, CBI has since advised my chambers that it now consents to the variation proposed by the AWU. 4 The other employee organisations covered by the Agreement do not oppose the variation sought by the AWU5 and did not seek to be heard in relation to the application. In the circumstances, I have determined to deal with the application on the papers without the need for a further hearing.

[7] Section 217 of the Act provides the following:

“217 Variation of an enterprise agreement to remove an ambiguity or uncertainty

(1) The FWC may vary an enterprise agreement to remove an ambiguity or uncertainty on application by any of the following:

(a) one or more of the employers covered by the agreement;
(b) an employee covered by the agreement;
(c) an employee organisation covered by the agreement.

(2) If the FWC varies the enterprise agreement, the variation operates from the day specified in the decision to vary the agreement.”

[8] As I have already indicated above, the AWU is an employee organisation covered by the Agreement and therefore has standing to make the application.

[9] As seems clear from the text of s.217, the discretion to vary an agreement may only be exercised if first the Commission is satisfied that there is ambiguity or uncertainty in the agreement. The principles that are to be applied in considering an application under s.217 may be shortly stated:

• The Commission should approach an application in two stages. First, as a jurisdictional pre-requisite, it should identify whether there is an uncertainty or ambiguity. Secondly, if an ambiguity or uncertainty is identified, it should consider whether to exercise its discretion to vary the agreement, the subject of the application; 6 



• The process of identifying ambiguity or uncertainty involves making an objective assessment of the words used in the provisions under examination. The words used are construed having regard to their context; 7 



• The Commission will generally err on the side of finding an ambiguity or uncertainty where there are rival contentions advanced and an arguable case is made out for more than one contention; 8 



• However, the Commission must make a positive finding that an agreement, the subject of an application under s.217 is ambiguous or uncertain. Prima facie satisfaction of ambiguity or uncertainty is not sufficient; 9 



• The mere existence of rival contentions as to the proper construction of the terms of an agreement will also be an insufficient basis to conclude the existence of ambiguity or uncertainty. Such contentions may be self-serving. The task is to make an objective judgment as to whether the wording of a provision is susceptible to more than one meaning; 10 



• Once an ambiguity or uncertainty has been identified, in exercising the discretion whether to vary the agreement, the Commission is to have regard to the mutual intention of the parties at the time the agreement was made. 11 

Are the redundancy and related provisions of the Agreement ambiguous or uncertain?

[10] The Agreement provisions which are said to give rise to the ambiguity or uncertainty are contained in clauses 18 and 25, the relevant parts of which are set out below.

“18. HOURS OF WORK

18.1 Ordinary Hours

18.1.1 The Ordinary Hours of work shall be 36 hours per week.

18.1.2 The Ordinary Hours of work may be worked on any day or all of the days of the week, Monday to Friday.

18.1.3 The Ordinary Hours shall be worked continuously, except for meal breaks, at the discretion of the Employer between 6.00am and 6.00pm.

18.1.4 The Usual Working Hours shall not exceed 10 hours on any day.

18.2 Usual Working Hours

18.2.1 The parties agree that the Usual Working Hours on the Construction Site shall consist of 90 hours per fortnight: See Usual Working Hours pattern below.

MON	TUE	WED	THU	FRI	SAT	SUN
Week A	10	10	10	10	10	X	X
Week B	ROO	10	10	10	10	X	X

18.2.2 To avoid any doubt, the Usual Working Hours as described above shall consist of 7.2 Ordinary Hours at the applicable Ordinary Rate, the accrual of 0.8 hours at the applicable Ordinary Rate and two (2) hours of Overtime.

18.2.3 Every second Monday shall be a Rostered Day Off (RDO), unless altered by mutual agreement between the Employer and a majority of Employees on the Construction Site.

18.2.4 Where the alteration of an RDO is sought for only a discrete work group within the Construction Site the Company will consult with the Delegate prior to the alteration.

18.3 Project calendar

18.3.1 The Parties have agreed to a Project calendar which schedules the lockdown weekends, RDOs and Christmas shutdown for the Project as set out in clause 31.

18.3.2 It is not intended that Employees will work on the Project on a lockdown weekend or Christmas shutdown as set out in the Project calendar, unless otherwise agreed. In the absence of agreement, the matter shall be resolved through the disputes resolution procedure.

18.4 Accrual of ROO

18.4.1 Usual Working Hours will be arranged on a system which provides for an Employee to accrue one RDO for every two (2) weeks worked. This will be done by the Employee working eight Ordinary Hours (8) hours each day, being paid at 7.2 Ordinary Hours pay at the applicable Ordinary Rate and accruing 0.8 of an hour at the applicable Ordinary Rate towards an RDO.

18.4.2 The RDO shall be taken in accordance with the Project calendar.

18.4.3 If an Employee is required to work an RDO, the time worked will be paid at Overtime rates and the Employee will retain an accrued RDO.

18.4.4 At the time of termination, all untaken RDO accrual hours shall be paid to the Employee at their applicable Ordinary Rate. Where an Employee has a negative RDO accrual balance the Company will remove the equivalent amount from any termination payment.

18.5 Changes to Usual Working Hours

18.5.1 Hours may be staggered or varied without penalty for a starting time between 6:00am and 7:00am by the Company to take into account delivery and Project schedules; traffic or transport management; inclement, climatic or seasonal weather; and available daylight hours provided that the Company provides at least 48 hours' notice of the proposed change. All other changes to Usual Working Hours can only occur by agreement between the Company and the Delegate, without penalty. . . .

18.13 Shift Work

18.13.1 Definitions:

18.13.1.1 "Shift work" means any system of work in which operations are being continued by a group of Employees upon work on which another group had been engaged previously and where Employees work either a Day shift, Afternoon shift or Night shift.

18.13.1.2 "Day shift" means any shift starting on or after 6.00am and before 10.00am.

18.13.1.3 "Afternoon shift" means any shift starting at or after 10.00am and before 8.00pm.

18.13.1.4 "Night shift" means any shift starting at or after 8.00pm and finishing at or after 8.00am.

18.13.2 Employees (other than those under the age of 18 years) agree to work shift work when required by the Company.

18.13.2.1 The Company must give an Employee 48 hours' notice of its intention to introduce shift work. The notice will include the intended start and finish times of each shift. Less than 48 hours' notice may be given if there are safety or emergency requirements.

18.13.2.2 The Company may vary shift rosters. Subject to providingEmployees with 48 hours' notice of its intention, the Companymay transfer shift work to or from non-shift work to shift work,and from one shift cycle to another.

18.13.3 Other than for work on a public holiday, the rate of pay for shift work (afternoon or night) shall be as follows:

18.13.3.1 200% of the applicable Ordinary Rate for that Employee's classification.

. . .

25. REDUNDANCY

25.1 The redundancy entitlements in this clause are in lieu of all redundancy provisions in the National Employment Standards, save for where the provisions in the National Employment Standards are more favourable.

25.2 The Parties acknowledge that it will not be possible to retain all Employees due to a downturn of work and the progress and skill requirements of the project. In such cases, employment consideration will be determined by:

25.2.1 work availability;

25.2.2 offering voluntary redundancies;

25.2.3 skill, diligence, experience, suitability to the task(s), work experience and ability of the Employee;

25.3 Where the Company proposes to make Employees redundant, it will not be deemed a 'major workplace change' for the purposes of this Agreement, but the customary conclusion of an employee's contract.

25.4 An Employee shall accrue a redundancy payment for those Usual Working Hours actually worked and while an Employee is on paid leave at the rates shown below:

25.4.1 From commencement, $6.16 per hour.

25.4.2 From 12 May 2014, $6.41 per hour.

25.4.3 From 12 May 2015, $6.67 per hour.

25.4.4 From 12 May 2016, $6.94 per hour

25.4.5 From 12 May 2017, $7.22 per hour.

25.5 The Company will lodge redundancy payments with lncolink or Protect.

25.6 A minimum weekly payment of $64.40 shall apply.”

[11] In CBI Constructors I said:

“Critical to understanding the breadth of the limitation on changes to Usual Working Hours under clause 18.5.1 of the Agreement, is an understanding of the meaning and scope of those words. As earlier indicated, the phrase ‘Usual Working Hours’ has the meaning given to it by clause 18.2. Clause 18.2 sets the parameters and composition of Usual Working Hours on the Construction Site. By clause 18.2.1 the parties agree that Usual Working Hours on the Construction Site shall consist of 90 hours per fortnight. That clause also provides for the Usual Working Hours pattern in the table which follows in the clause and which is reproduced earlier above.

The table sets out the fortnightly pattern of Usual Working Hours with work being performed from Monday to Friday over a fortnight cycle on 9 days of 10 hours working duration on each day worked, with the second Monday being an RDO.

Clause 18.2.2 clarifies the composition of Usual Working Hours on any day worked will comprise of:

• 7.2 Ordinary Hours at the applicable Ordinary Rate;



• the accrual of 0.8 hours at the applicable Ordinary Rate; and



• 2 hours of Overtime.

Clause 18.1.4 provides that the Usual Working Hours shall not exceed 10 hours on any day. This limitation is reflected in the pattern of hours set out in the table and in the composition of Usual Working Hours in clause 18.2.2 of the Agreement.

Shift Work in clause 18.13, for reasons that will become apparent, stands apart from both the Usual Working Hours regime found in clause 18.2 and Ordinary Hours found in clause 18.1, which is integral to clause 18.2. Clause 18.5.1 says nothing about shift work or its introduction nor has it any work to do in that regard.

Neither textual nor contextual considerations support a construction of clause 18.5.1 as applying to shift work or to the introduction of an afternoon shift as the Applicant Unions contend.

Clause 18.2, which deals with and defines Usual Working Hours appears, as CBI has contended, is concerned with establishing the Usual Working Hours for the whole construction site, not discrete additional shifts or shift work more generally. The words in the first sentence of clause 18.2.1 provide ‘Usual Working Hours on the Construction Site’. As earlier indicated, ‘Construction Site’ is a term defined by clause 2 of the Agreement by reference to an area in which ‘Construction Works’ are carried out. Such works are defined by reference to all work related to the ‘greenfield construction and commissioning of the Gas Conditioning Plant at the Construction Site’.

When read in the context of the definitional provisions, clause 18.2, and by extension clause 18.5.1, do not sit comfortably with Shift Work in clause 18.13, if as must necessarily be the consequence of the construction advanced by the Applicant Unions, the parameters and composition of Usual Working Hours for the Construction Site can be altered under clause 18.5.1 of the Agreement by the introduction of an afternoon shift.

. . .

As Ordinary Hours defined by clause 18.1 is a concept embedded in ‘Usual Working Hours’, as is evident in clause 18.2.2, the kind of change to Usual Working Hours under clause 18.5.1 must be read harmoniously with the meaning of Ordinary Hours. It seems clear enough that the kind of changes that can be effected to Usual Working Hours under clause 18.5.1 cannot be of a kind that alters Ordinary Hours as defined. The provision can only be read harmoniously if one confines ‘Ordinary Hours’ to day work and consequently Usual Working Hours to day work. It must follow on this construction that clause 18.5.1 has no application to shift work.

Other contextual considerations found in the Agreement supporting this construction include the terms of clause 18.13, which deals with shift work. As is apparent from the provisions earlier extracted, clause 18.13.2 provides that employees agree to work shift work when required by CBI. Clause 18.13.2 is not expressed as being subject to or conditional on agreement under clause 18.5.1. Moreover, the absence of such an express limitation renders the construction advanced by the Applicant Unions as one that seems inconsistent with the unqualified terms of 18.3.2 and 18.3.2.1. The only limitation on CBI’s capacity to require employees to work shift work when required is to be found in the terms of the shift work provisions themselves, namely the requirement to give 48 hours’ notice of CBI’s intention to introduce shift work, including the intended starting and finishing times. The Applicant Unions construction is also inconsistent with the capacity of CBI, it seems without reference to anyone, to vary shift rosters, and on providing 48 hours’ notice to employees, to transfer shift work between shifts or to or from non-shift work, and from one shift cycle to another.

On a plain reading of clause 18.13 of the Agreement and subject to CBI providing the requisite notice, CBI appears to have an unqualified right to introduce shift work. When proper account is taken of the meaning of Usual Working Hours and of Ordinary Hours discussed earlier, then it becomes clear that the unqualified right in clause 18.1.3 of the Agreement is unaffected by clause 18.5.1. This is because clauses 18.1, 18.2 and 18.5.1 are confined in their operation to day work.” 12

[12] In support of its application to vary, the AWU submitted that:

• The Agreement is currently ambiguous or uncertain in respect of the amount of redundancy payments CBI is required to contribute to Incolink for employees who are engaged on shift arrangements rather than on Usual Working Hours, as defined in clause 18.2.



• Clause 18.2.1 provides that Usual Working Hours comprise 90 hours per fortnight.



• Clause 18.13.3.1 provides the rate of pay for shift work to be 200% of the applicable Ordinary Rate.



• Under clause 25.4 of the Agreement, employees accrue redundancy payments for Usual Working Hours actually worked and while on paid leave at the rates stipulated in subclauses 25.4.1 to 25.4.5.



• Clause 25.5 requires CBI to lodge the applicable redundancy payments with Incolink or Protect, whichever is applicable.



• Clause 25.4 of the Agreement only describes the redundancy payments to which employees are entitled when working Usual Working Hours, creating ambiguity and/or uncertainty regarding the redundancy entitlements of workers who perform shift work under clause 18.13 of the Agreement. 13

[13] Given my conclusions in CBI Constructors reproduced above, the submission of the AWU as to the uncertainty of the redundancy entitlements for shift workers under the Agreement is undoubtedly correct. In the circumstances, I am satisfied that there is an uncertainty in the Agreement as to the entitlement to redundancy payments for shift workers. It is not in dispute that the intended operation of the Agreement as to redundancy entitlements is that shift workers would have a redundancy entitlement under the Agreement.

[14] There are no discretionary considerations which have been raised suggesting that I ought not, in the circumstances, exercise my discretion to vary. I consider that it is appropriate to vary the Agreement to remove the uncertainty and to have the Agreement operate in the way all parties to it agree it was intended to operate.

The variation proposed by the AWU

[15] The AWU proposes the Agreement be varied by inserting a new clause numbered “25.4A” immediately following existing clause 25.4, as follows:

“For the avoidance of doubt, employees who work ‘Shift Work’ as defined in clause 18.13.1 of the Agreement will receive the same redundancy entitlements set out in clause 25.4 above: that is, payable at the hourly rate set out in clause 25.4, capped at 90 hours per fortnight as per clause 18.2.1 of the Agreement.”

[16] The AWU also submitted that the variation ought to operate from the date the Agreement took effect, 14 which I take to mean the date it commenced to operate.

[17] Given that CBI consents to the variation, I see no reason not to vary the Agreement in accordance with the AWU proposal, including as to date of operation.

Conclusion

[18] The Agreement is uncertain as to the redundancy entitlements for shift workers. It is appropriate that the uncertainty be removed by varying the Agreement to include a new provision in the terms, proposed by the AWU. It is also appropriate that the variation come into operation on the same day that the Agreement came into operation, that date being 8 November 2013.

[19] An order giving effect to this decision is separately issued in PR578658.

DEPUTY PRESIDENT

 1   [2015] FWC 7460.

 2 Ibid at [4].

 3   Ibid at [50] – [51].

 4   See email correspondence from CBI (Ronan Boothman) to my chambers dated 30 March 2016 and email correspondence from my chambers to CBI earlier on the same date.

 5   See email correspondence from CEPU (Lucy Weber) to my chambers dated 4 April 2016; see email correspondence from CFMEU (Kristen Reid) to my chambers dated 4 April 2016; see email correspondence from AMWU (David Vroland) to my chambers dated 4 April 2016.

 6   See Re Tenix Defence Systems Pty Ltd Certified Agreement 2001 - 2004 PR917548 at [28], [32] and [35].

 7 Ibid at [29].

 8 Ibid at [31].

 9   See Colnvest Ltd v Visionstream Pty Ltd (2004) 134 IR 43 at [57].

 10   See Re Civil Construction Corporation Enterprise Agreement 2002 PR939346; SJ Higgins v CFMEU PR903843; RE CFMEU Appeal Print R2431.

 11   See Re Tenix Defence Systems Pty Ltd Certified Agreement 2001 - 2004 PR917548 at [32].

 12   [2015] FWC 7460 at [22]-[29] and [38]-[40]

 13   Outline of the applicant's submissions dated 18 March 2016 at [9] – [13].

 14 Ibid at [15].

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<Price code C, AE405178  PR578649>