Australian Workers' Union, The v O-I Operations (Australia) Pty Ltd
[2020] FWC 6833
•16 DECEMBER 2020
| [2020] FWC 6833 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.739 - Application to deal with a dispute
Australian Workers' Union, The
v
O-I Operations (Australia) Pty Ltd
(C2020/6242)
COMMISSIONER SPENCER | BRISBANE, 16 DECEMBER 2020 |
Alleged dispute about any matters arising under the enterprise agreement and the NES;[s186(6)].
INTRODUCTION
[1] The Australian Workers’ Union (the Applicant/the Union) made an application pursuant to s.739 of the Fair Work Act 2009 (the Act) in relation to a dispute arising under the O-I Brisbane (Glassworkers) Enterprise Agreement 2019 (the Agreement) with O-I Operations (Australia) Pty Ltd (the Respondent/the Employer).
[2] The matter was listed for conciliation, however the matter was not resolved. Directions were issued for the filing of material and the matter was listed for Hearing.
[3] In line with the Directions, the Parties provided the following question for Arbitration:
“Having particular regard to clauses 2.13.3 and 2.14.3 of the O-I Brisbane (Glassworkers) Enterprise Agreement 2019 (‘the Agreement’) and insofar as it constitutes a permitted matter:
Does the Agreement require that an NPL worker engaged under the Agreement is to be paid according to their highest attained competency, regardless of duties performed?”
[4] The dispute between the Parties arose regarding clause 2.13.3 and 2.14.3 of the Agreement. In particular, whether the Non-Payroll Labour (‘NPL employee/s’) are entitled to be paid in accordance with their attained competency, regardless of the work/duties performed.
[5] The Union was represented by Mr Aaron Santelises, Industrial Officer of the Australian Workers’ Union, who was instructed by Ms Marina Chambers, Southern District Organiser of the Union. The Employer was represented by Ms Holly Blattman, of Counsel, instructed by Ms Wendy Fauvel, Executive Counsel of Herbert Smith Freehills. The Respondent’s legal representatives were granted permission to appear, by consent, pursuant to s.596 of the Act, given the complexity of the matter.
BACKGROUND
[6] The Respondent manufactures glass bottles at three plants across Australia, including a plant in Brisbane. The Brisbane plant manufactures glass drink containers. 1 The Brisbane plant operates 24 hour, 7 days per week, 365 days per year. Its workforce includes approximately 120 full-time employees who undertake the manufacturing duties (Glassworkers), in addition to maintenance employees and staff. The Glassworkers are employed pursuant to the Agreement.2
[7] The Respondent stated that in order to supplement the labour of the Glassworkers, labour hire employees were engaged from time to time through a labour hire agency, Drake International. 3
[8] The Agreement contains provisions that purport to regulate the circumstances in which labour hire employees can be utilised, and the rates that they are to be paid. 4 The labour hire employees are referred to as ‘Non-Payroll Labour’ or ‘NPL’ in the Agreement.5
RELEVANT LEGISLATION
[9] 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
[10] Clause 2.13.3 of the Agreement relevantly provides:
“2.13.3. Labour hire employees will be afforded other relevant terms and conditions (except casual loading) no less favourable than those contained in the Agreement.”
[11] Clause 2.14.3 of the Agreement provides:
“Cover arranged in accordance with the above table has been developed with consideration of safety and training requirements. It is the intention that all casuals would enter an area at the lowest position classification.”
[12] Clause 2.5.2 of the Agreement states:
“Where an employee is required to work temporarily at a classification level where they have attained competence but have not yet progressed the relevant pay level, the employee will be paid at the higher classification rate for the duration of that work.”
[13] The parties sought the arbitration of the application pursuant to Clause 7.11 of the Agreement, which sets out the dispute settlement procedure:
“7.11. Dispute settlement procedure
7.11.1. Subject to clause 7.11.2, if a dispute relates to:
a. A matter arising under the Agreement;
b. The National Employment Standards (except requests for flexible working arrangements or extension to parental leave); or
c. Any issue, grievance or dispute over any matter between the parties to this Agreement. This will apply whether the matter in dispute related directly to a matter dealt with by this Agreement or not.
this term sets out procedures to settle the grievance or dispute.
7.11.2. This dispute settlement procedure does not apply to Work, Health and Safety matters. It is expected that the Work, Health and Safety Representatives will follow the relevant procedures in the resolution of any health and safety matters.
7.11.3. The Employer or an Employee who is a party to the grievance or dispute may appoint a representative for the purposes of the procedures in this term.
7.11.4. If the Employer has a grievance or dispute with the Union, then the Employer must fill in the Employer’s Dispute Resolution Form and give it to the Union.
7.11.5. An Employee or the Union who has a grievance or dispute, must take the following steps:
Preliminary step
7.11.6. If an Employee or the Union wishes to raise a dispute or grievance with the Employer, then the Employee or the Union must fill in the Employer’s Dispute Resolution Form.
Step one
7.11.7. In the first instance, the Employee or the Union must raise the dispute or grievance with the Employee’s immediate supervisor and give the immediate supervisor a copy of the completed Dispute Resolution Form.
7.11.8. The Employee or the Union and the Employee’s immediate supervisor must try to resolve the dispute or grievance at the workplace level.
7.11.9. An Employee or the Union can skip step one and move straight to step two if the Employee or the Union cannot reasonably raise the dispute or grievance with the Employee’s immediate supervisor.
Step two
7.11.10. If the grievance or dispute is not resolved in step one or the Employee or the Union cannot reasonably raise the dispute or grievance with the Employee’s immediate supervisor, the Employee or the Union may escalate the matter to more senior management or human resources.
7.11.11. The Employee or the Union must give senior management or human resources with a copy of the completed Dispute Resolution Form.
7.11.12. The Employee or the Union and the Senior Manager or human resources must try and resolve the dispute or grievance at the workplace level.
Step three
7.11.13. If the dispute or grievance is not resolved at step two, the Employee, the Union or Employer may refer the matter to FWC.
7.11.14. FWC may deal with the dispute in 2 stages:
a. FWC will first attempt to resolve the dispute as it considers appropriate, including by mediation, conciliation, expressing an opinion or making a recommendation; and
b. If FWC is unable to resolve the dispute at the first stage, FWC may then:
1) Arbitrate the dispute; and
2) Make a determination that is binding on the parties.
7.11.15. A decision that the FWC makes when arbitrating a dispute is a decision for the purpose of Div 3 of Part 5.1 of the FW Act. Therefore, an appeal may be made against the decision.
7.11.16. While the above steps are being undertaken:
a. No industrial action of any nature, either directly or indirectly, must be taken;
b. The Employer will ensure that all practices applied during the operation of the procedure is in accordance with safe working practices;
c. The Employer will ensure that all practices applied during the operation of the procedure are consistent with established custom and practice at the workplace.”
SUMMARY OF THE APPLICANT’S SUBMISSIONS AND EVIDENCE
[14] In summary, the Applicant submitted that the answer to the question for arbitration should be in the affirmative, in particular, that the NPL employees should be paid at the classification they have attained (attained through their competency and duration of time in their previous classification) regardless of the work performed; and, but for clause 2.5.2 of the Agreement, which provides for the highest attained competency, not classification, when considering higher duties.
[15] In relation to clause 2.13.3 of the Agreement, the Applicant submitted that in the context of the Agreement, for payroll labour, NPL employees should be paid at the rate of their classifications, even if the work they are conducting is defined at a lower classification, or if conducting higher duties, the employees are paid at a higher rate.
[16] In relation to clause 2.14.3 of the Agreement, the Applicant submitted that the interpretation and application of clause 2.14.3 is that an NPL employee’s ‘lowest classification’ is based on the classification attained in order to remain consistent with, and prevent any conflict with clause 2.13.3 of the Agreement.
[17] The Applicant submitted that clause 2.14.3 of the Agreement interacts with clause 2.13.3 of the Agreement, in particular:
“…It is the intention that all casuals would enter an area at the lowest position classification.”
[18] The Applicant submitted that the application of the above item requires the use of clause 2.13.3 of the Agreement, on the basis that it does not state what or how the lowest position of the employee is determined. As such, the Applicant submitted that when considering clause 2.13.3 and 2.14.3, the definition of the ‘lowest position’, translates into the classification attained by the NPL employee.
[19] Overall, the Applicant argued that the key clause for consideration and interpretation is clause 2.13.3 of the Agreement in its entirety, and that the interpretation should be that the employees should be paid their highest attained classification, regardless of the work performed (even if the work’s rate of pay is classed at a lower classification than the NPL employee’s classification) and, but for the exception highlighted at clause 2.5.2 of the Agreement.
[20] Additionally, the Applicant submitted that clause 2.14.3 of the Agreement is a key clause for interpretation, in particular, the interpretation of ‘It is the intention that all casuals would enter an area at the lowest position classification.’, and the Applicant submitted that the interpretation of the clause should be read as the classification attained by the NPL employee, in order to prevent any clash with clause 2.13.3 of the Agreement.
Clause 2.13.3 of the Agreement
[21] It was submitted on behalf of the Applicant that in regard to clause 2.13.3 of the Agreement, there were two components that should be considered. In particular:
A. ‘Labour hire employees will be afforded other relevant terms and conditions (except for casual loading) …’; and
B. ‘…no less favourable than those contained in the agreement’.
[22] The Applicant submitted that in regard to the plain and ordinary meaning of the words for [A], the components of the same should be interpreted as set out in the following paragraphs.
[23] The Applicant argued that ‘Labour hire employees...’ – refers to additional individuals that are not on payroll, but are required due to peak demand or to cover long term absences, and in certain circumstances outlined within the table of clause 2.14.1 or in short, an NPL employee. 6
[24] The Applicant provided an interpretation for clause 2.13.3 in accordance with the 3 rules set out 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. The Berri decision provided a method for the interpretation of Enterprise Agreement provisions.
‘Labour hire employees will be afforded other relevant terms and conditions (except for casual loading) …’
Plain and ordinary meaning
[25] The Applicant submitted that in regard to the plain and ordinary meaning of the words for [18] (A) above, the components should be interpreted as set out in the following way.
[26] With reference to ‘Labour hire employees...’ the Applicant submitted that this refers to additional individuals that are not on payroll, but are required due to peak demand or to cover long term absences, and in certain circumstances outlined within the table of clause 2.14.1 or in short, an NPL employee. 8
[27] In relation to ‘will be afforded other relevant terms and conditions (except for casual loading) …’ the Applicant submitted that ‘will be afforded’ should be read in the plain and ordinary meaning of the word, in particular, ‘afforded’ which means that the individual is allowed to have something ‘pleasant or necessary’. 9
[28] In the current circumstances of the Agreement, the Applicant submitted that the NPL employees are allowed to have the entitlements contained within the Agreement, but for:
• pay rates outlined in clause 2.13 of the Agreement;
• the permitted areas that an NPL employee may work in which is outlined in clause 2.14 of the Agreement; and
• casual loading as per (except for casual loading).
Whether an Agreement has a plain meaning or it is ambiguous or susceptible of more than one meaning
[29] In regard to the interpretation and the context of the current dispute, the Applicant submitted that the NPL employees should be paid their highest attained classification, even if they conduct work that is defined at a lower classification, except for higher duties where the criteria is outlined in clause 2.5.2 of the Agreement.
[30] The Applicant referred to and relied upon the witness statement of Ms Marina Chambers, which argued that NPL employees are provided the same entitlements as employees engaged by the Respondent.
[31] The Applicant referred to and relied upon the witness statement of Ms Marina Chambers at paragraph eight:
“Another point of interest is that employees at Visy glass work an ordinary working week of 35 hours and any hours worked in excess of 35 hours is paid at overtime rates which is double time for all employees. NPL employees are also paid overtime rates for all hours in excess of 35 hours, at a rate of double time for all employees.” 10
[32] On this basis, the Applicant submitted that the NPL employees of the Respondent are entitled to the same terms of the Agreement, but for the exceptions outlined in clause 2.5.2 of the Agreement.
‘…no less favourable than those contained in the Agreement’
Plain and ordinary meaning
[33] The Applicant submitted that in regard to the plain and ordinary meaning of the words ‘…no less favourable than those contained in the agreement’ the following interpretation should be followed:
[34] The Applicant submitted that in relation to the words ‘no less favourable…’, the Applicant referred to the dictionary meaning of the word, being, ‘giving you an advantage or more chance of success’, in the context of the Agreement, the Applicant submitted that they are entitled to the same terms as the pay roll employees of the Respondent except for the other entitlements outlined in clause 2.5.2 of the Agreement.
[35] In relation to the words ‘…than those contained in the agreement’ the Applicant submitted that it referred to the terms of the Agreement, but for the terms outlined in clause 2.5.2 of the Agreement.
Whether an Agreement has a plain meaning or it is ambiguous or susceptible of more than one meaning
[36] The Applicant submitted that Rule Two of the Berri decision will need to be utilised on the basis that clause 2.13.3 of the Agreement is a broad and encompassing clause. The Applicant submitted that the NPL employees are afforded the same terms of the Agreement as employees of the Respondent.
[37] The Applicant further referred to:
• clause 2.2.3 of the Agreement – ‘Base rates of pay and allowances are set out in Part 12 – Wage and Allowance Schedule’;
• clause 2.5.2 of the Agreement - ‘Where an employee is required to do work temporarily at a classification level where they have attained competence but have not yet progressed the relevant pay level, the employee will be paid at the higher classification rate for the duration of that work’;
• Part 11 – Appendix B – Classification of Structure of the Agreement; and
• Part 12 – Wage Allowance and Schedule of the Agreement.
[38] In consideration of the above, the Applicant submitted that the clauses of the Agreement reiterate that employees engaged by the Respondent must be paid a base rate of pay, determined by classification, regardless of the work performed (such as if the work is lower than the employee of the Respondent’s classification); additionally, that an employee’s base rate of pay that is paid according to the table outlined within Part 12 of the Agreement, 11 and the classification is determined by Part 11 of the Agreement.
[39] The Applicant submitted that on the evidence, employees of the Respondent are paid at their classification. The Applicant submitted that the NPL employees should be entitled to the same condition, being that the employees should be paid at their classification when they are conducting work that is defined as lower than the NPL employee’s classification.
[40] The Applicant further stated that only exception to the above is clause 2.5.2 of the Agreement, that allows employees of the Respondent to be paid a higher rate than their classification, because they have attained the competency to conduct the higher duties.
[41] The Applicant further submitted that considering clause 2.13.3 of the Agreement, in particular, in order to ensure that the NPL employees are afforded terms that are no less favourable terms, the NPL employees should be paid their classification regardless of the work they perform, but for clause 2.5.2 of the Agreement.
CLAUSE 2.14.3 of the Agreement
Plain and ordinary meaning
[42] The Applicant submitted that in consideration of clause 2.14.3 of the Agreement, the key component is the following:
“Cover arranged in accordance with the above table has been developed with consideration of safety and training requirements. It is the intention that all casuals would enter an area at the lowest position classification.”
(emphasis added)
[43] In particular, the Applicant submitted that the key components are:
• ‘It is the intention…’;
• ‘…all casuals…’;
• ‘…. would enter an area…’; and
• ‘…at the lowest position classification.’.
[44] In relation to the words ‘It is the intention…’ the Applicant submitted that in regard to the ordinary and plain meaning of the words, that it would mean that the Respondent would implement, when faced with the discussed scenario outlined in these submissions.
[45] In relation to the words ‘…all casuals…’ the Applicant accepted that it is in regard to the NPL employees.
[46] In relation to the words ‘…would enter an area…’ – the Applicant accepted that it is the area divided into the classifications outlined in Part 11 of the Agreement.
[47] In relation to the words ‘…at the lowest position classification.’ – the Applicant submitted that when considering the plain and ordinary meaning of the words, it refers to the lowest position classification, however, it does not provide as to how the same is considered and implemented by the Respondent. The Applicant also referred to the following in relation to the plain and ordinary meaning of the words: ‘…(ii) the disputed provision’s place and arrangement in the agreement’.
[48] The Applicant submitted that in consideration that clause 2.13.3 of the Agreement is first in the order of the Agreement, that clause 2.14.3 of the Agreement must comply with clause 2.13.3 of the Agreement.
[49] On this basis the Applicant submitted that clause 2.14.3 of the Agreement cannot be interpreted in isolation, and Rule Two of Berri must be utilised, and it must be interpreted with clause 2.13.3 of the Agreement in order to a avoid a conflict of clauses within the Agreement.
[50] As such, the Applicant submitted that the NPL employees ‘lowest classification’ would be their attained classification, in order to avoid any clashes with clause 2.13.3 of the Agreement.
Whether an Agreement has a plain meaning or it is ambiguous or susceptible of more than one meaning
[51] The Applicant argued that when considering the interpretation and application of ‘…at the lowest position classification’, clause 2.13.3 of the Agreement must be considered in order to avoid any conflict of clauses within the same.
[52] In particular, and in the context of the current dispute, the NPL employees ‘lowest classification’ is based on their classification level, and in turn, the ‘lowest’ would be same, as any ‘lower’ would be in contravention of clause 2.13.3 of the Agreement.
[53] The Applicant submitted that when considering the interpretation and implementation of clause 2.14.3 of the Agreement, the NPL employees are entitled to be paid the classification they have attained for all work completed (regardless as to if the work was classed at a lower classification), or be paid for the higher duties in accordance with clause 2.5.2 of the Agreement.
Remedy
[54] The Applicant submitted that the answers to both of the agreed questions for arbitration should be in the affirmative. The Applicant submitted that the NPL employees should be paid the highest attained classification regardless of the work performed such as if they were directed to conduct work at a lower classification level, but for the exception provided in clause 2.5.2 of the Agreement, which is based on competency.
Witness statement of Ms Marina Chambers
[55] Ms Marina Chambers provided a witness statement on behalf of the Applicant. Ms Chambers was the Southern District Organiser and President of the Applicant. Ms Chambers represented the employees of the Respondent in the proceedings.
Purpose of NPL Employees
[56] Ms Chambers stated that the intent, as it was negotiated and agreed to between the Parties, was that as the glass manufacturing plant was a very high risk environment, particularly in the “hot end”, due to the production of glass, via hot molten glass being poured into a mould and then sent through the plant on a conveyor line where employees are responsible to correct any jams, fallen products, routinely verify product is of good quality and identify faulty wear. It was agreed by the Parties that non-payroll labour (‘NPL employees’) would not be employed in those particular areas. Further, it was agreed that NPL employees would only be required to perform certain duties in each classification band one to three, based on risk, and the time required for the Respondent’s direct employees to be deemed competent to perform other tasks associated within each B Band.
[57] Ms Chambers stated that overall, there were numerous other duties and tasks that a Visy B1 employee would be required to be trained in and deemed competent in, apart from dumping and raking, which are the required limited skills and competency of an NPL1 employees.
Clause 2.14.3 of the Agreement
[58] Ms Chambers stated that in consideration of safety and training requirements for NPL employees. As with direct hire employees, all new entrants commence employment at a B1 level, (entry level or training level) this has a corresponding NPL1 level, but that does not include all the duties of a B1. She stated that an employee on a B1 level may be deemed competent to move to a B2 classification within approximately three months, depending on their location in the factory. An employee in the “cold end” would progress to a B2 classification in a shorter time frame than an employee in the “hot end” due to the tasks and skills involved in each end.
[59] When considering clause 11.2 of the Agreement, New Visy direct hire employees would only be recognised for prior learnings and enter the classification structure at a level greater than a B1 if they transferred from another Visy glass plant in Australia, to the Brisbane Plant. Visy direct employees do not progress to the next level classification until they have been employed at their current level for 12 months, or unless agreed by the Company.
[60] Ms Chambers further stated that in terms of clause 5.7.1 of the Agreement, as NPL employees are not expected to perform all the roles within an individual B classification, they would not necessarily be expected to be reclassified to the next classification level after 12 months at a level.
[61] Ms Chambers stated that the understanding that all casuals would enter an area at the lowest position classification is that the same terms and conditions of NPL employees regarding level classification is the same as that is applied to Visy direct hire employees. Further, that when competency is attained at a classification level, the employee is reclassified to the next classification level and retains that level and corresponding remuneration regardless if the employees performs duties at a lower classification. For example, clause 11.1.6 of the Agreement states ‘(Employee requests to move downwards will be paid at classification for new role performed)’ – the said clause implies that employees will only be classified at a lower level and rate if they request. Ms Chambers stated that it was her understanding, that the said clause was not an unusual clause in industrial law or workplaces.
[62] Ms Chambers provided that the intention behind clause 2.14.3 of the Agreement was that the employees were to be paid the lowest classification level that they had retained, and it would be the same rate of pay as to if they performed the duties at a lower classification level.
[63] Paragraphs two to seven of Ms Chambers witness statement provided:
“…
PURPOSE OF NPL EMPLOYEES
The intent, as it was negotiated and agreed to between the parties, is that as the glass manufacturing plant is a very high risk environment, particularly in the “hot end”, due to the production of glass via hot molten glass being poured into a mould and then sent through the plant on a conveyor line where employees are responsible to correct any jams, fallen products, routinely verify product is of good quality and identify faulty wear, it was agreed by the parties that non-payroll labour (‘NPL employees’) would not be employed in the said areas. Further, it was agreed that NPL employees would only be required to perform certain duties in each classification band one to three, based on risk, and the time required for Visy direct employees to be deemed competent to perform other tasks associated within each B Band.
Overall, there are numerous other duties and tasks that a Visy B1 employees would be required to be trained in and deemed competent in, apart from dumping and raking, which are the required limited skills and competency of an NPL1 employees.
CLAUSE 2.14.3 OF THE AGREEMENT
In consideration of safety and training requirements for NPL employees. As with direct hire employees, all new entrants commence employment at a B1 level, (entry level or training level) this has a corresponding NPL1 level, but it does not include all the duties of a B1. An employee on a B1 level may be deemed competent to move to a B2 classification within approximately three months, depending on their location in the factory. An employee in the “cold end” would progress to a B2 classification in a shorter time frame than an employee in the “hot end” due to the tasks and skills involved in each end.
When considering clause 11.2 of the Agreement, New Visy direct hire employees would only be recognised for prior learnings and enter the classification structure at a level greater than a B1 if they transferred from another Visy glass plant in Australia to the Brisbane Plant. Visy direct employees do not progress to the next level classification until they have been employed at their current level for 12 months, or unless agreed by the company.
In terms of clause 5.7.1 of the Agreement, as NPL employees are not expected to perform all the roles within an individual B classification, they would not necessarily be expected to be reclassified to the next classification level after 12 months at a level.
The understanding that all casuals would enter an area at the lowest position classification is that the same terms and conditions of NPL employees regarding level classification is the same as that is applied to Visy direct hire employees. Further, that when competency is attained at a classification level, the employee is reclassified to the next classification level and retains that level and corresponding remuneration regardless if the employees performs duties at a lower classification. For example, clause 11.1.6 of the agreement states ‘(Employee requests to move downwards will be paid at classification for new role performed)’ – the said clause implies that employees will only be classified at a lower level and rate if they request – from my understanding, the said clause is not an unusual clause in industrial law or workplaces.
…” 12
(emphasis added)
Clause 2.13.3 of the Agreement
[64] Ms Chambers stated that another point of interest was that employees at Visy glass work an ordinary working week of 35 hours and any hours worked in excess of 35 hours are paid at overtime rates, which is double time for all employees. NPL employees are also paid overtime rates for all hours in excess of 35 hours, at a rate of double time for all employees.
Witness statement of Mr Nathan James Kirk
[65] Mr Nathan James Kirk, a B3 Waremaker for the Respondent, provided a witness statement, but was later withdrawn.
SUMMARY OF THE RESPONDENT’S SUBMISSIONS AND EVIDENCE
[66] The Respondent stated that their position was that the question for arbitration should be answered in the negative.
[67] Ms Leanne McKay, People and Culture Lead for the Respondent, provided a witness statement in support of the Respondent’s position.
Engagement and payment of NPL
[68] The Respondent stated that NPL employees are engaged through Drake International to perform duties for the Respondent, according to the Respondent’s needs, and within the parameters specified by clause 2.14.1 of the Agreement, which purports to identify the circumstances in which the Respondent is permitted to utilise such labour. 13 The Respondent stated that their need for NPL fluctuates according to its business needs and employee absences, which can be unpredictable.14 When a need for NPL arises, it is a need for particular duties to be performed for a particular period of time.
[69] The Respondent submitted that individuals performing duties as an NPL are paid via Drake International, on an hourly basis, with overtime penalties paid in addition for work outside of ordinary hours, for each hour of work they perform at the Respondent’s premises. They are paid the rate identified in the table in clause 2.13.1 of the Agreement, according to the duties they are engaged to perform during that particular shift. That is:
• NPL who are engaged to perform tasks to assist with short term additional requirements, dumping and rakings are paid the hourly rate applicable to a NPL1 in the table in clause 2.13.1, for the hours that they perform those duties;
• NPL who are engaged to perform forklift, resort, line handling and mould repair duties are paid the hourly rate applicable to a NPL2 in the table in clause 2.13.1, for the hours that they perform those duties; and
• NPL who are engaged to perform verifier, change hand/metrology duties are paid the hourly rate applicable to a NPL3 in the table in clause 2.13.1, for the hours that they perform those duties. 15
[70] The Respondent submitted that this approach to paying NPL has been applied since at least August 2019, including under the 2016 Agreement and throughout the bargaining for the current Agreement.
Principles to be applied
[71] The Respondent submitted that the question for arbitration in this matter required the Commission to have particular regard to clauses 2.13.3 and 2.14.3 of the Agreement, in determining whether the Enterprise Agreement requires that an NPL “is to be paid according to their highest attained competency regardless of duties performed”.
[72] The Respondent argued that clauses 2.13.3 and 2.14.3of the Agreement must be construed using principles applicable to the interpretation of industrial instruments, that were relevantly set out in the Full Bench decision of Berri. 16
Clauses 2.13.3 and 2.14.3 of the Enterprise Agreement
[73] The Respondent submitted that the ordinary meaning of the words in clause 2.13.3 do not require the Respondent to ensure that NPL workers are paid according to their highest attained competency regardless of duties performed. The Respondent argued that the asserted requirement is not contained in any clause of the Agreement.
[74] The Respondent argued that it is clear from the context of clause s.13.3 that the clause is directed at ensuring labour hire employees receive ‘other’ relevant terms and conditions (i.e. other than the hourly rate of pay for ordinary hours of work, inclusive of casual loading, and other than the classification of NPL work, which has already been dealt with in the preceding clauses) on a basis no less favourable than the employees who are covered by the Agreement. This would include conditions such as allowances, overtime penalties and meal/rest breaks.
[75] In summary, the Respondent argued that clause 2.13.3 does not require a labour hire employee to be paid “according to their highest attained competency regardless of duties performed” for two key reasons.
[76] The first reason, it was submitted, was that clause 2.13.3 is not concerned with hourly rates of pay for ordinary hours of work (including casual loading), nor the classification of NPL work at all. The clause is concerned with ‘other’ terms and conditions. The Respondent argued that this is the end of the enquiry – clause 2.13.3 cannot be relied on to achieve the result the Applicant is seeking.
[77] The second reason advanced by the Respondent, was that even if the Employer was wrong, in that clause 2.13.3 is not concerned with hourly rates of pay for ordinary hours of work, nor the classification of NPL work, then in order for clause 2.13.3 to have the effect of requiring the Respondent to ensure labour hire employees are paid “according to their highest attained competency regardless of duties performed”, the Applicant must be able to point to some other clause of the Agreement that provides such an entitlement to employees covered by the Agreement. The Applicant has not done so. There are various provisions throughout the Agreement which make it clear that employees are paid for duties performed, as opposed to competencies acquired. 17
[78] The reference to the ‘above table’ in clause 2.14.3 is a reference to the table in clause 2.14.1, which purports 18 to identify the circumstances in which NPL may be utilised by the Respondent.
[79] The Respondent submitted that clause 2.14.3 of the Agreement does not assist the Applicant. They argued that the first sentence held no relevance at all, and that the second sentence means what it says. The Parties intend that all ‘casuals’ would enter an area at the lowest position classification. It makes no mention at all of a requirement to ensure NPL labour is paid based on highest attained competency, regardless of duties performed. The ordinary meaning of the words in clause 2.14.3 do not result in an interpretation that ‘when a casual employee is first engaged as an NPL worker they will be classified in accordance with their attained classification’, as the Applicant asserted. 19
[80] Accordingly, the Respondent argued that there was no basis to suggest that either of clauses 2.13.3, or 2.14.3 of the Agreement require that an NPL “is to be paid according to their highest attained competency regardless of duties performed”. They submitted that the evidence that had been filed by the Applicant did not impact that conclusion, as it was of no relevance to the interpretive task before the Commission.
[81] The Respondent further submitted that the text of the Agreement supports a finding that NPL are to be paid for the duties they are engaged to perform. It was argued that a consideration of the text of the Agreement as a whole clarified that the rates contained in the Agreement are applicable to the duties that are required by the Respondent and for which labour is engaged to perform, and not to competencies attained by individuals regardless of those required duties.
[82] The Respondent stated that this is demonstrated by the following terms of the Enterprise Agreement:
• The Agreement is expressed to cover “All employees of the Employer who work at 137 Montague Road, South Brisbane in Queensland and are engaged in a classification in this Agreement (Employees)”. 20 (emphasis added)
• Clause 2.4.2 provides: “Reclassification will only occur upon a Glassworker being assessed as competent both on and off the job, consistent with the principle of the skills acquired being utilised.” (emphasis added)
• Clause 2.5.2 provides: “Where an employee is required to work temporarily at a classification level where they have attained competence but have not yet progressed the relevant pay level, the employee will be paid at the higher classification rate for the duration of that work.” (emphasis added)
• Clause 11.1.5 provides: “Each level requires the full range of skills to be used from the specified category / level, plus skills from lower levels as required”. (emphasis added)
• Clause 11.1.6 provides: “Required skills will be recognised and must be used (Employee requests to move downwards will be paid at classification for new role performed)”. (emphasis added)
• Clause 11.1.7 provides: “Training will be determined in accordance with competency requirements and training delivery will be competency based”. (emphasis added)
• Clause 11.1.8 provides: “The Employer (based on operational requirements) will determine operational priorities within each classification.” (emphasis added)
[83] The Respondent argued that a finding that the Agreement requires that an NPL worker be paid according to their highest attained competency, regardless of duties performed, would be inconsistent with the above provisions, which allow the Respondent to manage its workforce in a manner that ensures it is comprised of the skills and competencies that the Respondent requires for its operations and that the workforce is compensated in accordance with those requirements (and only in accordance with those requirements).
The Applicant’s preferred interpretation is unworkable and inconsistent with the terms of the Enterprise Agreement and the common intention of the Parties
[84] The Respondent submitted that the terms of the Agreement do not support an interpretation that it requires an NPL worker to be paid according to their highest attained competency regardless of duties performed, because the Agreement does not define the competencies that are able to be achieved by a NPL worker, and nor does it identify which rate of pay is applicable to which competency.
[85] Instead, the Agreement specifies three NPL classifications by reference to a list of exhaustive tasks and duties that can be performed by a NPL worker engaged in that particular classification, being ‘dumping and raking’, 21 ‘Forklift Resort, Line Handling and Mould Repair’22 and ‘Verifier, Change hand/Metrology’.23
[86] The Respondent stated that there are other duties which Glassworkers who are directly employed by O-I perform, which NPL cannot be engaged to perform, subject to agreement by the Parties to the contrary, 24 because those duties are not identified in the table in clause 2.13.1 of the Agreement.25 These other duties are identified in the classification structure in Appendix B of the Agreement.
[87] The Respondent argued that the descriptions in clause 2.13.1 are not references to recognised and defined qualifications or licences (other than perhaps ‘Forklift’), and so are not conducive to a pay structure that rewards competencies attained rather than work performed. The Respondent submitted that the classification structure contained in Part 11 of the Agreement does not provide the required clarity that is absent from clause 2.13.1.
[88] The Respondent submitted that the classification structure in Part 11 is for directly engaged employees of the Respondent, and has no bearing on the classification structure of NPL labour, which is instead set out at clause 2.13.1. The Respondent said that the classification structure that applies to the Respondent’s employees refers to duties, skills and competencies that are broader than, and differ from, the duties contained in clause 2.13.1, which could be performed by labour hire. The Respondent submitted the two structures are plainly and deliberately different.
[89] The Respondent argued that the NPL classification provisions provide no agreed process for determining when a NPL worker has obtained competency in relation to a particular type of work. The Respondent submitted that if the Applicant’s interpretation was accepted, there would be no clarity in regards to which NPL classification a NPL worker is to be classified. The Respondent argued that the Applicant’s evidence of its subjective intention and expectation of how a NPL worker would have their competency assessed and determined has no bearing on the interpretation of the Agreement, and noted that the evidence of the subjective intentions of the Parties are not admissible, applying the accepted legal principles of interpreting an industrial instrument. 26
[90] The Respondent submitted that the text of the classifications in clause 2.13.1 is best aligned with an interpretation that NPL workers are to be paid for the duties they have been engaged to perform, because those duties are identified in the classifications by reference to an hourly rate that is to be paid for their performance. The Respondent said that the interpretation advanced by the Respondent is the interpretation that was applied to the equivalent provisions of the 2016 Enterprise Agreement at the time of the bargaining for the Agreement. The Respondent argued that a finding that it is the correct interpretation is consistent with the common intention of the Parties, not to depart from the interpretation that was applied to the 2016 Agreement, other than where the Parties agreed to depart from the drafting of the 2016 Agreement. 27
[91] The Respondent submitted that to the extent that the AWU is asserting that the Agreement provides a ‘penalty’ for engaging NPL labour, in the sense that the Respondent must pay a higher rate than employees based on competencies attained rather than competencies used, there is authority for the proposition that such a ‘penalty’ would render the relevant term a non-permitted matter. 28
[92] The Respondent argued that the interpretation sought by the Applicant would have no benefit to the NPL workers or any other employees if it was to be accepted by the Commission because the Respondent operates in an industry in which careful management of labour costs is required in order to ensure the operations are profitable. The Respondent submitted that applying the interpretation sought by the Applicant could result in the Respondent changing its current practice to instead request that labour is provided by Drake International on the basis that the NPL worker has the precise competencies required for the work that is to be performed during that engagement, and no higher. 29
[93] The Respondent submitted that there is no logical basis to suggest that clause 2.13.3, clause 2.14.3 or any other clause of the Enterprise Agreement is intended to entitle, by way of example, a labour hire worker to a NPL2 or NPL3 rate of pay in circumstances where they have been engaged to perform, and are in fact performing, short term additional requirements for dumping and raking, which are plainly duties assigned to the NPL1 classification. The Respondent argued that such an interpretation has no discernible benefit to anyone, has no logical purpose, and is not supported by any of the terms of the Agreement.
Determination of the matter
[94] The Respondent submitted that the answer to the question for arbitration “Having particular regard to clauses 2.13.3 and 2.14.3 of the O-I Brisbane (Glassworkers) Enterprise Agreement 2019 (‘Agreement’) and insofar as it constitutes a permitted matter: Does the Agreement require that an NPL worker engaged under the Agreement is to be paid according to their highest attained competency regardless of duties performed?” is “no”.
APPLICANT’S SUBMISSIONS AND EVIDENCE IN REPLY
[95] In reply to the Respondent’s submission that the Respondent’s interpretation had been applied since at least the 2016 Agreement, the Applicant submitted that, had the issues central to this dispute been raised while employees were covered by a previous iteration of the Enterprise Agreement (such as the 2016 Agreement) or at an earlier stage, the Applicant would have filed the dispute at an earlier date. The Applicant submitted that no claim was made, as the issue had not previously become apparent to the Applicant.
[96] The Applicant further submitted that the NPL classifications do have equivalent Agreement classifications, and noted that in the table, the said NPL classifications are attached to the Agreement equivalent classification, as noted by the title in the table - ‘Equivalent permanent classification’. The Applicant argued that the phrase ‘equivalent permanent classification’ clearly imputes that NPL classification should be an equivalent of the Agreement. The Applicant further argued that per Berri, if the plain and ordinary meaning of the words cannot provide understanding to the clause in question, then further context is required. The Applicant submitted that the classifications outlined in Part 11 of the Agreement clearly provide the necessary understanding of the table and the Agreement must be read as a whole, not in isolation.
[97] The Applicant argued that paragraph 2.13.3 of the Agreement should be interpreted as follows:
“… the phrase ‘other’ should be interpreted by reference to placement in the Agreement, being clause 2.13 which outlines the rates of pay for NPL employees.
Accordingly, any reference to ‘other’ refers to terms consistent with those applied to permanent employees. Such an interpretation is consistent with the title of clause 2.13, which clearly states:
‘2.13 Labour hire: terms and conditions’
Within this clause 2.13.3, and as per the Applicant’s submissions, NPL employees are very clearly afforded the same rights as permanent employees whereby NPL employees ‘will be afforded other relevant terms and conditions.’
The phrase ‘other’, in this regard, the refers to all terms outside clause 2.13 of the Agreement for the term utilises the same wording as the ‘terms and conditions’ contained within the title of clause 2.13. As such, the plain and ordinary meaning of the term ‘other’ within clause 2.13.3 of the Agreement refers to the other terms outside clause 2.13 of the Agreement, except the exceptions highlighted in paragraph 14(b) of the Applicant’s submissions. As such, the Respondent’s submissions on this basis should be rejected.”
[98] The Applicant rejected the Respondent’s submissions in relation to clause 2.13.3 in relation to hourly rates of pay, and submitted that the absence of some other clause, as submitted by the Respondent, does not preclude the Commission from finding that the entitlement sought does exist. The Applicant submitted that clause 2.13.3 of the Agreement clearly provides an entitlement for NPL employees to be paid at the classification they have attained (through their competency and duration of time in their previous classification), regardless of the work performed, including if the duties/work is classed at a lesser pay than the NPL employees’ set classification.
[99] The Applicant submitted that the Respondent’s submission that employees do not work at the competency at which they are assessed, but only on the type of work they perform, is contradictory to clauses 11.1.7, 11.1.8 and 11.1.14 of the Agreement, which provide:
“‘11.1.7 Training will be determined in accordance with competency requirements and training delivery will be competency based’;
‘11.1.8 New competencies will be classified in accordance with the Pre Reform Award and the new competency structure’; and
‘11.1.14 Perform duties within own level of skill & competence across all areas’.”
[100] The Applicant argued that the submission made by the Respondent is contradictory and inconsistent with the Agreement, on the basis that all classifications are viewed within the scope of skills and competency.
[101] The Applicant submitted that limited weight should be placed upon the fact that the provision in the Agreement remains unchanged from a previous iteration of the Enterprise Agreement (being the 2016 Agreement) as the Applicant was unaware that there was an issue, and as noted above, would have raised the dispute earlier had the Union been aware of the issue.
[102] The Applicant rejected the Respondent’s submission that the ‘penalty’ constituted a non-permitted matter, and submitted that the dispute centers around the relevant rate of pay for an NPL employee. The Applicant argued that this does not constitute a non-permitted matter, as it is in substance a dispute about a rate of pay.
[103] The Applicant further rejected the Respondent’s submission that the Applicant’s interpretation would have no benefit for employees. The Applicant submitted that its interpretation would achieve the purpose of clause 2.13.3 of the Agreement and ensure that NPL employees are afforded entitlements no less than their permanent counterparts.
CONSIDERATION
[104] In Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union’ known as the Australian Manufacturing Workers Union (AMWU) v Berri Pty Limited (Berri), 30the 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.”
[105] In line with the initial principle for construing an Enterprise Agreement, the first criteria to be considered, is whether the words of the provision have a plain and ordinary meaning.
Does the Agreement have a plain meaning, or it is ambiguous or susceptible of more than one meaning?
[106] As noted above, the relevant clause of the Agreement for interpretation and arbitration are Clause 2.13.3 and 2.14.3 which provide:
“2.13.3. Labour hire employees will be afforded other relevant terms and conditions (except casual loading) no less favourable than those contained in the Agreement.
…
2.14.3. Cover arranged in accordance with the above table has been developed with consideration of safety and training requirements. It is the intention that all casuals would enter an area at the lowest position classification.”
[107] In Flight Attendants' Association of Australia v Qantas Airways Limited; Qantas Domestic Pty Ltd, 31 (Qantas) Deputy President Sams expressed the view that prior interpretation and the settled status quo are relevant in that the party bringing the application bears the evidentiary burden of overturning the agreed interpretation:
“[97] On one view, the Association’s submissions and arguments in this case fly in the face of how the parties, most notably the FAAA itself, have understood and applied the complex and detailed working arrangements and employee entitlements in this industry for many years. To an outsider, many of these arrangements are unfathomable or at best, difficult to explain as to their significance and history. That said, no dispute has arisen of this kind since 1996 as to what the FAAA now submits should be a change in approach and application of how service is treated in respect to redundancy (with limited agreed exceptions), and how service is treated for other benefits and accrued entitlements.
[98] In order to drastically alter the settled status quo, the FAAA bears the evidentiary burden to overturn years of agreed interpretation. In other words, a clear and cogent evidentiary case must be established, rather than the selective ‘cherry picking’ of words from other sections of the Act (and even words in other Acts), and taking them out of context. This will not, in my opinion, take the Association’s case very far. In this respect, as Berri Principle 6 explicitly sets out, the AI Act does not apply.”
[108] It is a common fact that the previous Agreement contained identical clauses which were interpreted in line with the Respondent’s argument. The burden is on the Applicant, therefore, to establish a clear and cogent evidentiary case for the alternative interpretation sought.
[109] It is understood that on the Applicant’s interpretation of the clauses, the employees considered it was reasonable to bring the application and no criticism of them or the Union is made. As the Union is a responsive organisation and is entitled and responsible to bring applications on behalf of their members, even in circumstances where the provisions were part of the prior Agreement and had been applied in the current manner since commencement. Whilst this was argued by the Employer, it does not act as a barrier to the Union making an application, in circumstances where the members considered a misinterpretation had occurred and bringing an application such as the current one.
[110] Ms McKay was questioned on how the clause operated, both in the previous Agreement and the current Agreement:
“And this issue of - I understand that the submissions that your solicitors have made on your behalf is that there's no ambiguity, and this might - if you don't - this might be an unfair question, Ms Blattman, and you can correct me if I'm wrong, because it's really an interpretation question - I might redirect it. You weren't involved in the negotiations of the agreement, that's correct?---I was involved in the 2019, the most current.
Yes?---So the version that is currently in.
Okay. That was approved by Johns C?---Yes.
But as I understand the provisions that are in dispute in this matter, your submission is - so your evidence is they are effectively the same?---Yes. We made no substantive change to this clause except for the formatting purposes of the EA.
And Ms Chambers has - - -?---And I think - sorry, just to say we did put an additional word in.
There was an error - yes, labelling or - - -?---Yes.
Yes. And then Ms Chambers has covered this to a degree also in her evidence and the AWU's submissions, but this issue of why this particular dispute has not arisen prior to this current matter, given that your evidence is that they are effectively the same provisions, what do you say about that?---I don't really know what to say about that. I haven't made any change in my time in Brisbane or from the negotiation of the EA. I believed I was applying it in a consistent manner.
Has there been any change in the operations at all?---No.” 32
[111] The Applicant’s interpretation could be considered to be an additional claim. For the reasons the Respondent set out, regarding the sensibilities of business practice, operational requirements, and staff management, it appears the Respondent would reject such a claim. As the Respondent alluded to, requiring the Respondent to engage NPL1 staff for NPL1 tasks only would result in NPL2 and NPL3 staff missing out on the opportunity to be engaged as being ‘overqualified’ would result in an increased cost for the Respondent. 33
[112] In the Qantas decision,Deputy President Sams relevantly summarised the practical approach to interpretation of an industrial instrument using the Berri principles, stating:
“…The starting point is the terms of the Agreements themselves, giving the words their plain ordinary meaning, according to the context in which they appear and in the context of the Agreement when viewed overall. It must be accepted that Berri Principle 8 permits the consideration of surrounding circumstances and evidence of objective facts to establish whether ambiguity exists. However, this does not mean regard may be had to surrounding circumstances or objective facts, if no ambiguity exists.” 34
[113] In the present matter, it is evident that the meaning of the relevant clauses is plain and unambiguous. The references to other relevant terms and conditions in the clause are to other terms and conditions in the Agreement and not to certifications, competencies, and qualifications.
[114] The observations made by Madgwick J in Kucks v CSR 35are also apposite in the present case, in terms of the approach to be adopted in interpreting an industrial instrument. Madgwick J relevantly stated:
“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.
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.”
[115] In the present case, there was no evidence to demonstrate that it was that intention of the parties that NPL employees would be paid on the interpretation sought by the Applicant. Additionally, Even if the clauses were unclear, the Agreement sets out specific classifications with an exhaustive list of duties and tasks that NPL staff can complete. The classifications are not based on competencies acquired.
[116] In her evidence at the Hearing, Ms McKay spoke to the effect that the interpretation pursued by the Union would have in practical terms for the Respondent, stating:
“And again I'm covering some of the ground that's in the statements. What's the effect though in your operations of - and this is not the only test in terms of the application - but what's the effect basically - I just want to hear it from you in your evidence - of the claim in relation to the interpretation that is being sought by the union?---Yes. So if we were to - in our current - sorry, I'm going to give some history around this for context. In our current operations we have got around 15 people that sit on Drake's books as NPL. The majority of them perform work at NPL2, and there's about three currently that have been trained to perform NPL3, which is verifying. If we were to say that all work performed - so if those three have to be paid NPL3 rates at all times, even when they're working on re-sort, then that incurs obviously a cost for the business, because work at a verifier level is not guaranteed. So to maintain hours for them, they would need to work on re-sort, because that is the consistent operation. If that needs to be done at a higher cost then we would be unlikely to utilise those employees. We would preference those that are only trained up to do NPL2. (emphasis added)
So that means that - - -?---They could go weeks/months without any labour hire work through us, if verifier was not available.
Effectively the business decision would be that you would on grant of a successful application - and I maintain that this isn't the only test - but the decision would be made then from a cost perspective to only source NPL2 employees - - -?---To do NPL2 work, and NPL3 employees to do NPL3 work.” 36
[117] Ms McKay’s evidence demonstrated the impracticality of the Union’s interpretation and spoke to the likely mitigation measures that the Respondent would consider if the additional costs associated with the Applicant’s interpretation were imposed on the business.
[118] The Applicant’s interpretation gives rise to a situation where NPL employees trained to perform work at a higher classification would only be engaged to perform work commensurate with their classification, despite this work, on Ms McKay’s evidence, being substantially less frequent than those duties commensurate with a NPL2 employee. This would result in considerably less work for these NPL3 employees. It would also prove counterintuitive for the Employer to engage these employees, in circumstances where the bulk of the work on offer, is at a lower classification, if the Employer was obliged to pay these employees at their highest classification.
[119] I then turn to the question for arbitration.
Does the Agreement require that an NPL worker engaged under the Agreement is to be paid according to their highest attained competency regardless of duties performed?
[120] The plain and ordinary meaning of the words in clause 2.13.3 do not require the Respondent to ensure that NPL workers are paid according to their highest attained competency regardless of duties performed. The Applicant has failed to demonstrate that the asserted requirement is contained in any clause of the Agreement.
[121] The Applicant’s sought interpretation was summarised in closing submissions by Mr Santelises:
“MR SANTELISES: Our interpretation is that the labour hire employees are afforded the same rights as contained within the agreement, and no less favourable than those contained in the agreement except for casual loading, and our interpretation is that, besides the terms contained within 2.13, the other terms within the agreement should be considered but for casual loading. And if I can build on that as well, Commissioner, if the agreement was intentionally drafted to pay these NPL employees according to the actual duties worked, then that should have been stipulated within either 2.13.3 saying, "except for casual loading", and also "the pay rate will be" at the duties worked and not the classification, and if there is the intention by the drafters to put "except casual loading" within that, then they should have put that in there as well. There is an absence of that, and therefore it provides the scope for our submissions today, Commissioner.” 37
[122] The Applicant’s proffered interpretation does not fall naturally from the plain and ordinary meaning of the works contained within the Agreement. In summary, there is only ambiguity created in the sense that the Applicant is seeking to insert a clause into the Agreement that is not there, to enable a rewriting of the provision to their required interpretation. For the reasons set out, there is no ambiguity in the existing clause that provides for the NPL pay rate. The plain meaning of the words accords with the currently implemented interpretation.
CONCLUSION
[123] For these reasons, the question for arbitration is answered in the negative. The Applicant has failed to demonstrate that the words of the Agreement are ambiguous, as to require the consideration of further Berri principles to provide for the interpretation that the Union has pursued.
[124] The Application is therefore dismissed.
[125] I Order accordingly.
COMMISSIONER
Printed by authority of the Commonwealth Government Printer
<PR725541>
1 McKay at [4]-[5].
2 McKay at [7]-[8].
3 McKay at [12].
4 See clauses 2.13.1 to 2.14.2 of the Enterprise Agreement and McKay at [13]–[17].
5 See clause 2.14.1 of the Enterprise Agreement; McKay at [12].
6 Clause 2.14.1 of the Agreement.
7 [2017] FWCFB 3005.
8 Clause 2.14.1 of the Agreement.
9 Clause 2.14.1 of the Agreement.
10 Witness Statement of Ms Marina Chambers at paragraph eight.
11 Clause 2.2.3 and Part 12 of the Agreement.
12 Witness statement of Ms Marina Chambers from paragraphs four to seven.
13 McKay at [14].
14 McKay at [24].
15 See clause 2.13.1 of the Enterprise Agreement; McKay at [17].
16 See Australian Manufacturing Workers’ Union v Berri Pty Limited (2017) 268 IR 285.
17 See paragraph 31 below.
18 The Respondent says ‘purports’ because there remains a real question about the extent to which these provisions (which purport to restrict the Respondent’s capacity to engage labour hire workers or contractors except in particular circumstances) are terms about ‘permitted matters’, and therefore whether they have any effect at all: s.253 of the Act. The Respondent also notes the submission made at paragraph 41 of these submissions, in this regard.
19 See AWU Submissions at [28]-[30].
20 See clauses 5.7.1 and 1.2.1(b) of the Enterprise Agreement.
21 See NPL 1 in clause 2.13.1 of the Enterprise Agreement.
22 See NPL 2 in clause 2.13.1 of the Enterprise Agreement.
23 See NPL 3 in clause 2.13.1 of the Enterprise Agreement.
24 See clause 2.14.2 of the Enterprise Agreement.
25 McKay at [20]. Again, this is subject to the question about the extent to which these provisions (which purport to restrict the Respondent’s capacity to engage labour hire workers or contractors except in particular circumstances) are terms about ‘permitted matters’, and therefore whether they have any effect at all: s.253 of the Act. The Respondent also notes the submission made at paragraph 41 of these submissions, in this regard.
26 Shop Distributive and Allied Employees' Association v Woolworths Ltd (2006) 152 IR 95, at [31]; Australian Manufacturing Workers’ Union v Berri Pty Limited (2017) 268 IR 285 at [114].
27 McKay at [31]-[33].
28 See The Australian Workers' Union v Alcoa World Alumina Australia[2010] FWA 884.
29 McKay at [27].
30 [2017] FWCFB 3005.
31 [2020] FWC 6392.
32 Transcript, 9 December 2020, paragraph [106] – [113].
33 Transcript, 9 December 2020, paragraph [98] – [100]
34 [2020] FWC 6392 at [101].
35 Kucks v CSR Limited (1996) 66 IR 182 at 184.
36 Transcript, 9 December 2020, paragraph [98] – [100].
37 Transcript, 9 December 2020, paragraph [206].
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