Australian Workers' Union, The v Rocla Pty Ltd T/A Rocla Pipes & Products

[2018] FWC 340

[2018] FWC 340

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.739—Dispute resolution

Australian Workers’ Union, The
v
Rocla Pty Ltd T/A Rocla Pipes & Products
(C2017/4986)

DEPUTY PRESIDENT MASSON MELBOURNE, 24 JANUARY 2018

Alleged dispute about matter arising under the enterprise agreement – dispute about alcohol and drugs policy requirement of urine sampling procedure for random workplace testing – principles of construction of agreements – application of Berri.

Background to dispute

[1] On 6 September 2017, the Australian Workers Union (AWU) applied to the Fair Work Commission (the Commission) to deal with a dispute pursuant to s 739 of the Fair Work Act 2009 (the Act) under the dispute resolution procedure in clause 7 of the Rocla Pty Ltd – Wodonga Pipe Enterprise Agreement 2015 (the Agreement). The Respondent in the matter is Rocla Pty Ltd (Rocla).

[2] Rocla is engaged in the manufacture and supply of concrete products to the building and construction industry. It operates fifteen manufacturing and sales facilities across Australia. The Wodonga Pipe site manufactures products including concrete pipes up to a diameter of 1650 mm and pre-cast bridge-like structures up to a weight of twelve tonnes per product. Approximately seventy two employees are employed at the Wodonga Pipe site of which approximately sixty five employees are covered by the Agreement.

[3] The dispute concerns the implementation of the 2017 revision of the Rocla Products Drug and Alcohol Policy and Procedure (the Policy) 1 at the Wodonga Pipes site. The issue of controversy in the implementation of the Policy is the element of the Policy which provides for random drug testing by means of urine sampling. Random workplace drug testing is not opposed by the AWU; however it opposes random testing by way of urine sampling and contends that such random testing should be undertaken by way of oral swab testing.

[4] The dispute concerns the proper construction of clauses within the Agreement dealing with the observance of Rocla safety rules, procedures and regulations as amended from time to time and also the Rocla drug and alcohol policy.

Jurisdiction

[5] Section 739 of the Act empowers the Commission to deal with certain disputes under enterprise agreement dispute settlement terms. The Agreement contains such a term which is clause 7 ‘Procedure To Avoid Industrial Disputation’. The relevant sub-clauses going to the jurisdiction of the Commission in the settlement of disputes are as follows:

“iv. If the matter remains unresolved, the dispute will be referred to Fair Work Australia for assistance in resolving the matter via conciliation.

v. If Fair Work Commission is unable to resolve the dispute via conciliation, Fair Work Australia may then arbitrate the dispute and make a determination.”

[6] It was not contested that the question to be determined by the Commission was capable of constituting a dispute over the application of the Agreement. Nor was it in dispute that the steps taken by the parties to resolve the dispute constituted compliance with the dispute resolution provision of the Agreement. Having regard to the information in the Form F10 application and the views of the parties, I am satisfied that the Commission has jurisdiction to deal with the dispute, including by arbitration.

[7] Conciliation before the Commission did not resolve the dispute and the matter is now to be determined by the Commission by arbitration.

The hearing

[8] The matter was listed for hearing on Friday, 12 January 2018, in advance of which the parties were required to file statements and material on which they intended to rely.

[9] Clayton Utz sought permission to appear on behalf of Rocla. That application was considered and granted by the Commission pursuant to s 596 of the Act.

Issue for arbitration

[10] The parties to the dispute agreed that the question to be determined by the Commission was as follows:

“Is Rocla permitted to require employees at Rocla Wodonga Pipe site to comply with random urine testing provisions in accordance with the Rocla Products Drug and Alcohol Policy and Procedures (revision date March 2017), taking into account the Provisions of the Rocla Pty Ltd – Wodonga Pipe Agreemnt 2015-2018.”

[11] The determination of the matter turns on the proper construction of clauses 12 and 13 of the Agreement which provide as follows:

“12 WHAT ARE ROCLA’S SAFETY REQUIREMENTS AND PRACTICES

Employees must

12.1 observe all of Rocla’s safety rules, procedures and regulations (as amended from time to time);

12.2 wear Personal Protective Equipment at all times while working in areas that require equipment; and

12.3 comply with their obligations under Occupational Safety and Health Act.

12.4 Work in accordance with safe Work Instructions and identify, notify and rectify where possible, any hazard or unsafe work practice, process and behaviour.

13 ROCLA’S DRUG AND ALCOHOL POLICY

13.1 Employees must not be under the influence of drugs and alcohol while at work.”

The AWU case

[12] The AWU did not call any witnesses in the matter and sought to rely on its submissions. It raised three broad grounds of objection to the introduction of random testing by way of urine sampling. They were:

1. Privacy;

2. Undue financial hardship; and

3. The inflexible nature of the testing regime.

[13] The AWU submitted that urine testing was unnecessarily invasive into its member’s private lives. This was due it said to the wider “window” of drug usage detection that is caught through urine testing versus oral swab testing. Specifically, that urine testing is more sensitive and can reveal the use of drugs going back over a longer period of time than would be the case with oral swab testing which is likely to indicate more recent use. This, in the AWU’s submissions, would render such testing regime unjust and unreasonable as it would intrude into the private lives of employees. In making that submission, the AWU referred the Commission to the decision in Endeavour Energy v CEPU and others 2 where Senior Deputy President Hamberger stated at paragraph [36]:

[36] It is clear from all the evidence presented during the hearings that neither oral fluid nor urine testing devices are perfect. Seen from one perspective, urine testing can be seen as more ‘accurate’ in that it is more likely to pick up whether an employee has at some stage taken certain substances. However, that is not necessarily the goal of a workplace drug testing regime. I repeat what I said in Shell Refining (Australia) Pty Ltd v CFMEU 32:

[117] Neither party in this dispute sought to argue that random testing for drugs (or alcohol) was unjust or unreasonable. However both parties also recognise that random testing is an intrusion on the privacy of the individual which can only be justified on health and safety grounds. The employer has a legitimate right (and indeed obligation) to try and eliminate the risk that employees might come to work impaired by drugs or alcohol such that they could pose a risk to health or safety. Beyond that the employer has no right to dictate what drugs or alcohol its employees take in their own time. Indeed, it would be unjust and unreasonable to do so.’

[14] The AWU also submitted that the Policy provided for an employee to be stood down without pay pending a confirmatory clearance test. Given that the urine testing can detect drug usage over a longer period of time, a confirmatory test by way of urine testing was likely to lead to a delayed confirmatory test result, thereby magnifying the adverse impact on the employee in circumstances where they had been stood down without pay. The AWU also submitted that the cost of a confirmatory urine test was greater than the cost of an oral test although they (the AWU) conceded that Rocla had offered to pay the cost of the final confirmatory negative test.

[15] The AWU contended that Rocla could not rely on the reasoning applied by the Full Bench in CFMEU v Port Kembla Coal Terminal Limited 3 (Port Kembla) in which it had found that one of the factors that supported urine testing as part of a “mixed” testing regime was that of the multi-tiered response to be applied by the company to non-negative test results. The AWU referred to paragraph [71] of that decision where the Full Bench said:

“[71] Finally, we have given significant weight to the way in which PKCT has indicated it will use non-negative test results. In particular a case management approach will be adopted, which will have regard to the circumstances of individual workers. While acknowledging that in some circumstances a non-negative result could lead to disciplinary action, other outcomes could include rehabilitation, counselling, participation in the Employee Assistance Program, scheduled testing and the development of a return to work plan.”

[16] The AWU sought to distinguish Rocla’s approach to random urine testing from that of the circumstances in Port Kembla in that the latter case involved a mixed testing model of both random urine and oral swab testing. Further, the AWU submitted that Rocla’s approach did not include the same mutli-tiered approach and would be harsh in its consequences for employees, particularly where an employee had been stood down without pay.

[17] Importantly, the AWU confirmed that it did not object to random drug testing and believed that oral swab testing was appropriate. Further, it did not object to the use of urine testing for all other forms of drug testing provided for in the Policy, i.e. pre-employment, post incident and just cause testing.

[18] As regards the meaning of the relevant clauses within the Agreement, the AWU made submissions as part of its arguments in support of the Commission’s jurisdiction to deal with the dispute. 4 Those submissions were to the effect that clause 13, which provides that employees must not be under the influence of drugs or alcohol at work, would be almost meaningless without “calling up” the Policy. The AWU went on to submit that:

“…this brevity is deliberate as the EBA always intended to operate using Rocla’s policy in existence at the time of the making of the EBA.

When both features of cl 13 are taken together the union submits that the EBA is intended to “call up” Rocla’s drug and alcohol policy via the name and structure of cl 13 of the EBA. This is necessary to the operation of cl 13 of the EBA therefore any Drug and Alcohol policy and its contents are a matter that the Commission may determine.” 5

[19] The AWU stated that while it accepted that Rocla had had a drug and alcohol policy for many years, it claimed that the random urine testing element of the Policy had not been implemented at the Wodonga Pipe site since a dispute over random urine testing in 2008. In these circumstances the AWU contended that Rocla could not simply rely on the wording of clause 12.1 and clause 13 of the Agreement to unilaterally implement the Policy. Rather, the Policy had to be the subject of genuine consultation which the AWU submitted had not occurred.

[20] The AWU submitted that the case law was clear that the Commission did have the prerogative to determine whether Rocla’s proposed implementation of the Policy element of random testing by way of urine testing was harsh, unjust or unreasonable. The AWU submitted that in all the circumstances of the present case the Commission should answer the question posed for determination in the negative, i.e. the terms of the Agreement do not permit Rocla to unilaterally introduce random drug testing by way of urine testing.

The Rocla case

[21] Rocla called evidence from two of its senior staff:

Mr Richard Field – Operations Manager Vic/SA

Mr Geoff Currie – National Health, Safety and Environment Manager

Evidence of Mr Richard Field

[22] The general evidence of Mr Field was largely unchallenged and went to a number of matters including the nature of Rocla’s operations, the significant OHS risks present on their manufacturing sites and Rocla’s commitment to occupational health and safety.

[23] Mr Field gave evidence that the Policy had been in place in various revisions since 2005. He referred to the initial Policy released in or about October 2005 6, the 2011 Policy revision7 and the most recent 2017 revision.8 The initial Policy and each of the subsequent Policy revisions provided for drug and alcohol testing to be conducted on a pre-employment, post incident, just cause and random basis. The method of drug testing provided for in the Policy had remained unchanged throughout the period 2005 to 2017, that is, by way of urine testing.

[24] Mr Field stated that the Policy was operating across all of Rocla’s Australian sites with the exception of the Wodonga Pipe site where the random urine testing element was opposed. Mr Field also noted that Rocla’s Wodonga Poles manufacturing site which was located two hundred metres from the Wodonga Pipe site, had fully implemented the Policy including random urine testing.

[25] Mr Field stated that random urine testing had been applied between 2005 and 2008 at the Wodonga Pipe site. However, in the wake of a dispute over that element of the Policy in 2008, Rocla had not applied random urine testing since that dispute up until the present time. Mr Field stated that the resolution of the 2008 dispute did not involve Rocla making concessions regarding its asserted right to conduct random drug testing in accordance with the Policy. He confirmed that the decision not to conduct random urine testing since 2008 was due to concern by Rocla over the likely negative reaction of the workforce.

[26] Further evidence was given by Mr Field that each enterprise agreement entered into by Rocla at the Wodonga Pipe site since the introduction of the Policy in 2005 has included clauses in the same or similar terms to that of clause 12 and clause 13 of the current Agreement. While the Policy has been reviewed and revised since 2005, the random drug testing methodology of urine testing provided in the Policy, at issue in these proceedings, has not changed. 9

[27] Mr Field also gave evidence of the process by which new employees are trained and inducted with respect to the Policy and also the steps taken by Rocla to re-familiarise all employees with the Policy on an annual basis. Mr Field also stated that the annual refresher training did not occur in January 2017 with respect to the Policy as it (the Policy) was under review at that point but was subsequently rolled out in August 2017. 10

[28] Mr Field also gave evidence of his knowledge and involvement in communication and consultation with the workforce and the AWU. He referred to his participation in a meeting with the AWU Organiser prior to the consultation process occurring at the Victorian sites and noted that at that early stage the AWU had indicated its opposition to random urine testing. Mr Field also gave evidence of subsequent consultation meetings held at site in May and June 2017 and then further workforce training sessions conducted on 16 and 17 August 2017. 11

[29] Under cross examination, Mr Field stated that following a confirmed non-negative test an employee would be stood down until able to provide a confirmatory negative test. While an employee stood down in these circumstances would have access to accrued personal or annual leave, Mr Field conceded that an employee without such leave accruals would be stood down without pay until able to provide a confirmatory negative test result.

Evidence of Mr Geoff Currie

[30] Mr Currie gave unchallenged evidence. That included in relation to his role and responsibilities, the nature of OH&S risks within Rocla’s business, the nature of safety incidents and injuries within the business and Rocla’s obligation and commitments to compliance with relevant OH&S legislation.

[31] Mr Currie described the review that was initiated into the 2011 Policy which resulted in the revised 2017 Policy. Through the review process Mr Currie identified a number of relevant issues including:

•  Random urine testing had not been conducted at the Wodonga Pipe or Poles sites for a considerable period of time.

•  At the Campbellfied site random drug testing was being conducted by means of oral swab testing which was not consistent with the Policy.

•  All other sites across Australia were acting consistently with the Policy and random urine testing was being undertaken.

•  A review of Rocla test results revealed an increasing number of positive tests for methamphetamines/MDMA/“ice”/“ecstasy” and benzodiazepines. This was of concern based on Mr Currie’s literature research and feedback from toxicologists regarding the rebound depression effects and longer time period impacts of such drug usage. 12

[32] Mr Currie stated that the review reinforced his belief that the existing position of urine testing as part of the drug and alcohol policy regime was important and needed to be retained.

[33] He summarised the key changes that were introduced in the 2017 revision of the Policy. They were:

•  Revising the blood alcohol concentration (BAC) threshold downwards in Operations from 0.02 to 0.00.

•  Expressly supporting counselling and rehabilitation.

•  Removing the three strikes disciplinary process.

•  Removing references to impairment within the Policy. 13

[34] Mr Currie gave evidence in relation to the consultation and communication process undertaken in rolling out the 2017 Policy. With respect to the Wodonga Pipe site the process included:

•  An initial union briefing at which the AWU Organiser was present.

•  On 30 May 2017, the Wodonga Pipe site safety committee was briefed and consulted regarding the Policy. The only issue raised by employees at that meeting was that of the different BAC thresholds applied between operational and office workers.

•  Copies of the Policy were provided to safety committee members.

•  In June 2017, the Policy was the subject of pre-start meeting briefings.

•  Following feedback from the AWU that the majority of employees at the site opposed random urine testing, Mr Currie requested formal feedback from the AWU but did not receive any.

•  On 16 and 17 August 2017, training on the revised Policy was conducted and signed off by employees.

•  Following the notification of a dispute by the AWU in relation to the matter, further education and awareness sessions were conducted involving the contracted testing company, Medvet. 14

[35] Mr Currie gave evidence that as a result of feedback through the consultation process across Rocla’s business, it was clarified that a BAC limit of 0.00 would apply to all persons attending operational areas. He also confirmed that following the roll-out of the 2017 Policy, all of Rocla’s other Australian sites were now applying the full Policy, including the Wodonga Poles site which is adjacent to the Pipes site.

Rocla submissions

[36] Rocla referred to its evidence which was essentially unchallenged and contrasted that with the lack of evidence presented by the AWU. Key points brought out in the Company’s evidence was that of the history of the Policy from 2005; the history of random urine testing at the Wodonga Pipes site between 2005-2008; the purpose and objective of the Policy; the considerations favouring urine testing; the focus of counselling, rehabilitation and support within the Policy; and the evidence of consultation during the roll-out of the 2017 Policy.

[37] Rocla submitted that the task of the Commission in this matter was not to examine the merits of urine testing versus oral swab testing, although they contended that the use of urine testing in the circumstances was not unjust or unreasonable in any event. In support of its submission as to the task confronting the Commission, Rocla referred to the Full Bench decision in DP World Brisbane Pty Ltd and Others v The Maritime Union of Australia 15 (DP World). Rocla submitted that the error identified by the Full Bench in that decision was relevant in directing the task of the Commission in the present matter and referred to paragraphs [37]-[38] of that decision:

[37] Drawing on the key elements derived from the abovementioned authorities, in circumstances where there was doubt about the meaning of the clause, Deputy President Booth should, with respect, have turned to the surrounding circumstances and context to determine the dispute before her, i.e. the interpretation of clause 17.8. However, as can be seen from the above extract from her decision, Deputy President Booth concluded that it was necessary for her to consider the merit of using urine for the second test.

[38] In doing so, Deputy President Booth fell into significant error. This is because the dispute before the Commission did not concern whether it was appropriate for urine testing to be used for the second test or whether its use was unjust or unreasonable - but, rather, whether clause 17.8 permitted or precluded urine testing for the second or confirmatory test.

[38] Rocla submitted that its right to require employees to comply with the Policy and specifically the random urine testing element was supported by a number of matters:

•  Legislative compliance obligations;

•  The Policy was directed at ensuring that Rocla best met its obligations under the Victorian Occupational Health and Safety Act 2004;

•  The plain language of clause 12 of the Agreement;

•  The Policy and the random urine testing element assists in ensuring compliance with clause 13;

•  History of the Agreement provisions which were introduced in 2006;

•  Contextual matters; and

•  If the Commission were to consider the relative testing methodologies, the requirement for compliance with the Policy could not be seen in all the circumstances as unjust or unreasonable.

[39] Rocla submitted that construing the meaning of the terms of the Agreement was a straightforward task. The wording of clause 12 would, on its plain reading, support the right of the Company to require compliance with safety policies and procedures as amended from time to time. In applying the ordinary meaning of these words, Rocla submitted that it could require employees to comply with the Policy and would certainly not preclude Rocla from imposing random urine testing in accordance with the Policy. Further, the existence of clause 13 and the obligation it placed on employees also supported Rocla’s position of enabling it to require compliance with a comprehensive drug and alcohol policy.

[40] In Rocla’s submission, contextual guidance as to the meaning of the relevant clauses could be found in the history and circumstances of the Agreement provisions. Specifically, that clauses 12 and 13 in the current Agreement, save for clause 12.4, were introduced in the Rocla Pipeline Products Wodonga Agreement 2006-2008 (2006 EA). The Policy was introduced in 2005 and was in place at the time the relevant provisions (clause 12 and 13) were introduced into the 2006 EA. The 2005 Policy included random testing using urine sampling. Since that time the clauses in the Agreement have remained effectively unchanged in each of the successive enterprise agreements.

[41] Rocla also submitted that, whilst random testing had not been carried out in recent years at the Wodonga Pipe site, urine testing has and it continues to be used for pre-employment testing. Rocla further submitted that urine testing was carried out at the site between 2005 and 2008 and that employees are briefed on a regular basis in respect of safety policies and procedures as well as receiving refresher training.

[42] Rocla’s submission also raised a number of matters and the general issue of fairness that supported its position. Those matters included:

•  the nature of the Wondonga Pipes site and inherent OH&S risks;

•  all other Rocla sites were applying the Policy including random urine testing;

•  random urine testing is standard across the industry in which Rocla operates;

•  the comprehensive consultation process undertaken in rolling out the Policy;

•  The Policy has a strong focus on education and training as well as the availability of counselling and support through the employee assistance program (EAP); and

•  Individual circumstances are considered in determining disciplinary consequences in the circumstances of a first positive test.

[43] Rocla also referred the Commission to a number of authorities that had dealt with the merits of urine versus oral swab testing. In doing so Rocla highlighted what it regarded as the weight of guidance from recent matters that supported its view that urine testing was not unreasonable. The relevant principles and authorities referred to by Rocla included:

•  Approaches to drug and alcohol policies to be adopted by employers will depend on what is deemed appropriate according to needs and circumstances. 16

•  It is accepted that neither urine nor oral fluid based testing methods directly test for impairment. 17

•  The Full Bench in Endeavour Energy v CEPU 18 described the competing scientific merits of urine versus oral swab testing in that oral swab testing is more focussed on acute impairment whereas urine testing was more likely to uncover patterns of drug use which may lead to impairment.

•  While it is accepted that urine testing has a longer detection window for a number of drugs, it is considered more likely to identify drug use and so is more likely to identify those who might be impaired at work. 19

•  The real purpose of random testing is to deter employees from attending work after having taken drugs or alcohol because of the risk of being detected. 20

•  Privacy concerns of employees regarding urine testing will generally be outweighed by the employer’s statutory duty to ensure the safety of its employees. 21

Approach to construing enterprise agreement terms

[44] The approach to construing enterprise agreements was most recently set out in a Decision of a Full Bench of the Commission in “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU) v Berri Pty Ltd 22 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.”

[45] In CFMEU v Endeavour Coal Pty Ltd T/A Appin Mine, 23a Full Bench of the Commission held that the context of an agreement provision is significant. In this regard, the Full Bench set out the explanation of this point by the NSW Court of Appeal in Mainteck Services Pty Ltd v Stein Heurtey SA,24emphasising the following matters:

•  Until a word or phrase is understood in the light of the surrounding circumstances, it is rarely possible to know what it means 25 and there is always some context to any statement;26

•  Language considered in its context will often have a clear meaning and context will often not displace that meaning – “but not always”; 27

•  To state that a legal text is clear reflects the outcome of an interpretation process and means that there is nothing in the context that detracts from the ordinary literal meaning and cannot mean that context can be put to one side; 28

•  The phrase used by Mason J in Codelfa “if the language is ambiguous or susceptible of more than one meaning” does not mean that the susceptibility of the language to more than one meaning must be assessed without reference to the surrounding circumstances and in order to determine whether more than one meaning is available it may be necessary to turn to context; 29 and

•  Context has also been described as surrounding circumstances and the meaning of terms normally requires consideration not only of the text, but of the surrounding circumstances known to the parties and the purpose and object of the transaction. 30

[46] The case law in relation to the approach to the construction of enterprise agreements makes it clear that context and purpose are relevant to the construction of provisions in an enterprise agreement and must be considered even where the words of the provision being construed appear, on their face, to have a clear and unambiguous meaning.

Consideration

[47] I am satisfied on the evidence that the Policy with various revisions has been in place across Rocla’s business since 2005. The Policy has provided for drug testing including random testing by way of urine sampling since its inception in 2005. I also accept that random testing in accordance with the Policy was undertaken at the Wodonga Pipes site in the period 2005-2008. Further, I am satisfied that the specific inclusion of clauses dealing with the drug and alcohol policy and the obligation of employees to comply with health and safety rules and procedures were included in the 2006 EA and have been retained through subsequent agreement renewals in the same or similar terms.

[48] Having regard to the reasoning of the Full Bench in DP World,I accept that the task before me, given the question to be determined, is not one of determining the competing merits of urine testing versus oral swab testing in the context of Rocla’s business. Rather it is to determine whether the relevant clauses in the Agreement permit or preclude random urine testing.

[49] The construction of the Agreement must begin with consideration of the ordinary meaning of the relevant words. The provisions identified by the parties as being central to the dispute are clauses 12 and 13 of the Agreement.

[50] Clause 12.1 relevantly states that employees must “observe all of Rocla’s safety rules, procedures and regulations (as amended from time to time).” Rocla contend that the wording is clear and unambiguous and that it permits Rocla to require employees to comply with the Policy, specifically in this matter, that element of the Policy that provides for random urine testing. The AWU did not contend an alternate construction save for its claim that the clause did not permit Rocla to unilaterally introduce or amend health and safety policies and procedures without consultation.

[51] The wording of clause 12 refers to “safety rules, procedures and regulations” whereas the dispute went to that of one element of a “policy”. Neither party addressed or sought to make an issue of whether a “policy” was captured by the wording in clause 12. I am satisfied however based on the wording and contentions of the parties that clause 12 should be read so as to include “Policy” within the scope of the clause.

[52] There is no reference in clause 12 to any obligation Rocla has to consult regarding safety rules and procedures as contended by the AWU. Nor is the consultation clause within the Agreement expressed in a manner that would extend the consultation obligation to the matter in contest, i.e. the Policy element that deals with random urine testing. The consultation clause in the Agreement is expressed in a standard form that deals with major change that has significant effects on employees. I am satisfied that clause 12 does not compel Rocla to consult over the Policy as contended by the AWU, and that a failure to do so would not render a safety rule or procedure unenforceable under the terms of the Agreement.

[53] Rocla does however have obligations to consult with employees with respect to health and safety matters in accordance with the Victorian Occupational Health and Safety Act 2004 (the OH&S Act). Such obligations would extend to safety policies and procedures and their amendment from to time. That obligation of Rocla to consult is however separate to and would not be enforceable as a term of the Agreement. While not essential to my determination of the matter before me, I am satisfied on the evidence that Rocla has undertaken appropriate consultation in relation to implementation of the Policy. Consultation included meetings with the AWU and safety committee, employee briefings and education and awareness sessions, all of which was conducted over several months following the March 2017 Policy revision.

[54] Having dealt with the AWU’s submission as to the construction of clause 12, I am satisfied that the wording of the clause is clear and unambiguous. It creates an explicit obligation on employees to observe all safety rules and procedures as amended from time to time. The right of the Company to introduce or amend safety rules and procedures, as I have observed at paragraph [52], is not an untrammelled right, but the wording of clause 12 in the Agreement itself does not impose the restrictions or caveats contended by the AWU. I am consequently satisfied that the ordinary meaning of the words in clause 12 supports the construction advanced by Rocla.

[55] With respect to clause 13, the meaning of the clause appears clear in relation to the obligations on employees not to attend work in a manner affected by drugs or alcohol. However, the clause does not make explicit reference to the obligations within the Policy and therefore does not in my view, on the face of the wording in the clause, support the construction advanced by Rocla that it permits it (Rocla) to implement the Policy.

[56] In determining the proper construction of the terms of an enterprise agreement, the ordinary meaning of the relevant words is not the end of the consideration. Regard must also be had to context to either confirm that the ordinary meaning of the relevant words is the basis upon which the Agreement is to be properly construed, or to contradict what appears to be the plain meaning of the words in the Agreement.

[57] In considering the context of clauses 12 and 13, the history of the clauses in the Agreement and the Policy are relevant contextual matters. As I have found, that element of the Policy at issue (i.e. random urine testing) dates to 2005 and preceded the inclusion of clauses 12 and 13 in the 2006 EA. I am satisfied that the existence of the Policy and specifically random urine testing, its implementation between 2005 and 2008 and the specific inclusion of clauses 12 and 13 in each enterprise agreement since 2006 are all relevant contextual matters that support the construction advanced by Rocla.

[58] The AWU contended that the hiatus of testing that occurred between 2008 and 2017 due to a dispute in 2008 was a relevant consideration. Evidence was provided by Rocla that the resolution of that dispute did not involve Rocla conceding their rights to implement the Policy but out of an apparent industrial relations caution chose not to do so. I accept that an election of the Company not to enforce a right under the Agreement does not result in that right being lost, in circumstances where such a right is subsequently confirmed. I do not accept that the “use it or lose it” adage applies in the present circumstances. I am therefore satisfied that the random testing “hiatus” between 2008 and 2017, in circumstances where the relevant Agreement and Policy terms did not substantively change, does not remove or undermine Rocla’s rights to enforce the terms of the Agreement.

[59] No other contextual matters were advanced as militating against the ordinary and clear meaning of the words of clause 12. Consequently and consistent with the principles of agreement construction outlined in Berri, I am satisfied that the proper construction of clause 12 permits Rocla to require employees to comply with all safety rules and procedures as amended from to time. That Agreement right includes the Policy and specifically the requirement for employees to comply with the random urine testing element.

[60] Further, though unnecessary for the purposes of my finding, support for the construction of clause 12 that I have determined can be also found by way of reference to the Policy in clause 13 of the Agreement. I note that both parties accepted that clause 13 could have little utility without calling up the Policy. Notably, the AWU specifically contended that the intention of the parties when negotiating the Agreement was to call up the Policy by the name and structure of clause 13.

[61] The AWU further argued that the Commission should determine in its favour on the basis that Rocla’s decision to introduce random urine testing was harsh, unjust and unreasonable. Guidance on the principles for intervention of the Commission can be found in Australian Federated Union of Locomotive Enginemen v State Rail Authority (NSW) (XPT Case) where it stated as follows:

“It seems to us that the proper test to be applied and which has been applied for many years by the Commission is for the Commission to examine all the facts and not to interfere with the right of an employer to manage his own business unless he is seeking from the employees something which is unjust or unreasonable. The test of injustice or unreasonableness would embrace matters of safety and health because a requirement by an employer for an employee to perform work which was unsafe or might damage the health of the employee would be both unjust and unreasonable.” 31

[62] I accept that the above principle is a relevant consideration and should be given weight in circumstances where the exercise of arbitral discretion is being sought such that the Commission should intervene in a lawful business decision. The present matter does not however turn on the exercise of managerial discretion at large but rather the meaning and effect of terms of the Agreement and Rocla’s right to enforce an OH&S policy pursuant to those clauses (clause 12 and 13), distinguishing the circumstances from that of the general principle to be derived from the XPT case.

[63] There was no evidence presented by the AWU that went to their contention that the random urine testing regime was unjust or unreasonable in the circumstances. In fact the weight of evidence presented by Rocla went the other way. I am not satisfied in the circumstances that there is any basis on which the Commission should intervene to prevent Rocla from implementing its Policy consistent with clause 12.

Conclusion

[64] For the reasons outlined above I am satisfied that the answer to the question to be determined is “yes”. Having regard to the terms of the Agreement, Rocla is permitted to require employees at Rocla Wodonga Pipe site to comply with random urine testing provisions in accordance with the Rocla Products Drug and Alcohol Policy and Procedures (revision date March 2017).

[65] The dispute is determined accordingly.

DEPUTY PRESIDENT

Appearances:

Mr D Cameron for the Australian Workers Union.

Mr S Pill for the Respondent.

Hearing details:

2018

Melbourne.

15 January 2018

 1   Exhibit R2, Statement of Mr. Richard Field, Attachment RF3.

 2   [2012] FWA 1809.

 3   [2015] FWCFB 4075.

 4   Exhibit A1, Applicant’s Submissions, at paragraph [8]-[12].

 5   Exhibit A1 at paragraph [11] and [12].

 6   Exhibit R2, Attachment RF1.

 7   Ibid, Attachment RF2.

 8   Ibid, Attachment RF3.

 9   Ibid at paragraph [27]-[30].

 10   Ibid at paragraph [32]-[35].

 11   Ibid at paragraph [51]-[55].

 12   Ibid at paragraph [22]-[24].

 13   Exhibit R3, Statement of Mr Geoff Currie at paragraph [26]-[27].

 14   Ibid at paragraph [28]-[35].

 15   [2014] FWCFB 7889.

 16   Endeavour Energy v CEPU[2012] FWAFB 4998 at [67].

 17   CFMEU v Port Kembla Coal Terminal Limited[2015] FWC 2384 at [43].

 18   [2012] FWAFB 4998 at footnote 18.

 19   Briggs v AWH Pty Ltd[2013] FWCFB 3316 at [1], [2] and [13].

 20   CFMEU v Port Kembla Coal Terminal Limited[2015] FWCFB 4075 at [65]-[66].

 21   Ibid at paragraph [68]-[69].

 22   [2017] FWCFB 3005 at [114].

 23   [2017] FWCFB 4487.

 24 [2014] NSWCA 184 at [71] – [85].

 25   Manufacturers’ Mutual Insurance Ltd v Withers (1988) 5 ANZ Ins Cas 60-853 at 75-343.

 26   Kirin-Amgen Inc v Hoechst Marion Roussel Ltd [2004] UKPC 6; [2005] 1 All ER 667 at [64].

 27   Project Blue Sky v Australian Broadcasting Authority [1998] HCA 28; 194 CLR 355 at [78].

 28   Charter Reinsurance Co Ltd v Fagan [1997] AC 313 at 391 per Lord Hoffman, approved in Campbell v R [2008] NSWCCA 214; 73 NSWLR 272 at [48] (Spiegelman CJ, Weinberg AJA and Simpson J agreeing) and Dale v The Queen [2012] VSCA 324 at [73].

 29   Franklins Pty Ltd v Metcash Trading Ltd [2009] NSWCA 407; 76 NSWLR 603 at [17] cited in Mainteck Services Pty Ltd v Stein Heurtey SA (2014) 310 ALR at [71] – [85].

 30   Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52; 219 CLR 165 at [40].

 31 (1984) 295 CAR 188 at 191.

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