“Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers' Union (AMWU) and the Australian Workers' Union v Brockman Engineering Pty Ltd

[2017] FWC 712

[2017] FWC 712

FAIR WORK COMMISSION

DECISION

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

“Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers' Union (AMWU) and The Australian Workers' Union
v
Brockman Engineering Pty Ltd
(C2016/6131)(C2016/6152)

DEPUTY PRESIDENT GOSTENCNIK MELBOURNE, 7 FEBRUARY 2017

Application to deal with a dispute in accordance with the dispute settlement procedure of an enterprise agreement.

Introduction

[1] By their separate applications lodged on 13 and 14 October 2016 respectively, the Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union known as the Australian Manufacturing Workers’ Union (AMWU) and the Australian Workers’ Union (AWU) (collectively “the Unions”) have applied to the Fair Work Commission (Commission) under s.739 of the Fair Work Act 2009 (Act) for the Commission to deal with a dispute in accordance with the dispute settlement procedure in the Brockman Engineering Pty Ltd Workshop and Site Collective Bargaining Agreement 2014 (Agreement). The Agreement covers, inter-alia, the Unions, Brockman Engineering Pty Ltd (Brockman) and certain of its employees employed at Brockman’s workshop and at sites around Australia where maintenance or storage tank work is carried out in classifications or occupations set out in the Manufacturing and Associated Industries and Occupations Award 2010.

[2] The dispute concerns the interpretation and operation of that which may colloquially be described as a “jump up clause”.

Background

[3] Brockman provides tank maintenance services and, from time to time, maintenance, turnaround and project services to Viva Energy Australia Pty Ltd (Viva) at the Viva Energy Refinery in Geelong (Geelong Refinery) under a tank maintenance services contract which commenced on 1 September 2016 (Contract). 1 Brockman employs employees who perform work at the Geelong Refinery for purposes of providing services under the Contract.2 These employees are covered by the Agreement and their terms and conditions of employment are regulated by the Agreement.3

[4] Viva employs employees to perform maintenance work on specialised plant and equipment at the Geelong Refinery. 4 Viva does not employ any employees to perform tank maintenance work at the Geelong Refinery although its employees occasionally perform shutdown and maintenance work.5 The terms and conditions of employment of its employees are relevantly regulated by the Shell Geelong Refinery Enterprise Agreement 2013 – Maintenance Employees (Viva Agreement).6

[5] Other entities are also contracted by Viva to carry out various other mechanical maintenance functions and provide various other mechanical maintenance services at the Geelong Refinery, including:

● Wood Group PSN, which provides mechanical maintenance services through welders, fitters, scaffolders and trades assistants; 7

● UGL Operations and Maintenance Pty Ltd, which provides general mechanical maintenance services through welders, fitters, scaffolders and trades assistants; 8

● Sava Engineering Pty Ltd, which provides general mechanical maintenance services through welders, fitters, scaffolders and trades assistants; 9

● Gordon McKay Pty Ltd, which provides electrical maintenances services; 10

● Rylea Engineering Services Pty Ltd, which provides welders and boilermakers for shutdown work; 11

● Furmanite Australia Pty Ltd, which provides in-situ machining and fit up services; 12 and

● Contract Resources Pty Ltd, which provides mechanical services for heat exchangers. 13

[6] Viva also contracts with entities to perform services other than mechanical maintenance at the Geelong Refinery, including:

● Veolia Environmental Services, which provides specialised industrial cleaning and waste management services; 14

● Dimac Constructions Pty Ltd, which provides civil maintenance services; 15

● USI Pty Ltd, which provides specialised insulation services; 16

● McElligotts Partners Pty Ltd, which provides painting services; 17 and

● Alliance Scaffolding Pty Ltd, which provides scaffolding services. 18

[7] Each of these entities to which reference is made in the preceding paragraphs employs its own employees to carry out the services for which they are contracted by Viva at the Geelong Refinery. Each entity and the relevant employees performing the services are covered by a separate enterprise agreement. 19

Issue for determination

[8] The parties in dispute have agreed that the dispute is to be resolved by determining by arbitration the following question:

Does clause 39.3 of the Brockman Agreement have the effect of requiring Brockman to apply to Brockman Geelong Employees wage rates or any other benefits under the Viva Agreement that are superior to those that apply under the Brockman Agreement?

[9] The resolution of the dispute and the determination of the question posed turn ultimately upon the proper construction of clause 39 of the Agreement against the backdrop of the agreed and uncontested factual matrix set out earlier above and the application of orthodox principles of construction. The principles applicable to the proper construction of an enterprise agreement are not in dispute and were canvassed at length in Australasian Meat Industry Employees Union v Golden Cockerel Pty Limited. 20 There is no need to rehearse them here. 

[10] The starting point to construing the provision at issue is the text of the provision and that begins with an examination of the ordinary grammatical meaning of the words used in the context of the Agreement as a whole.

Consideration

[11] The “jump up clause” at issue is to be found in clause 39 of the Agreement which provides the following:

“39.0 CLIENT- MAINTENANCE PROVIDER- PRACTICES FOR

SUPPLEMENTARY LABOUR ONLY

39.1 Where employees work at a plant location where the Client Company or Maintenance Provider applies to his employees, members of the same unions as are party to this Agreement, by award or agreement, average ordinary hours of work per week that are less than the provisions of this agreement such provisions shall also apply on a pro-rata basis to employees engaged under the terms of this Agreement.

39.2 Where the Agreement defines the adoption of hours of work of the Client Company or Maintenance Provider, when they are more generous than this agreement this also applies to the method of working overtime and the taking of crib breaks.

39.3 SITE AGREEMENTS
Where an employee is employed or engaged at a site/client premises, where there is a general provision that applies to employees engaged on that site/client premises that provides a benefit that is superior to the provisions of this agreement, then the superior conditions shall apply. This provision shall go to such issues as wages, site allowances, classification levels and the like. For the avoidance of doubt, the dispute resolution procedure contained in this agreement applies to disputes over the application of this clause.” [Formatting is as found in the Agreement]

[12] The Unions’ submit that the answer to the question posed is “yes” and contend in summary that:

• Clause 39.3 of the Agreement is not ambiguous;



• Brockman employees covered by the Agreement are engaged at the Geelong Refinery;



• Viva is Brockman’s client;



• The Geelong Refinery is Viva’s premises or site;



• Viva’s employees perform maintenance work on specialised plant and equipment at the Geelong Refinery;



• The terms and conditions of employment of Viva’s employees performing that work is regulated by the Viva Agreement;



• The Viva Agreement contains, inter alia, a general provision (wage rates) that applies to Viva employees engaged at the Geelong Refinery;



• That general provision is superior to the provisions of the Agreement; and



• The general provision of the Viva Agreement is to apply to Brockman’s employees who perform services at the Geelong Refinery pursuant to the Contract.

[13] Brockman submits that the question should be answered “no” and advances alternative bases for that submission.

[14] First, it says that clause 39.3 of the Agreement only applies to “supplementary labour” or “labour hire”. Alternatively, Brockman says the Viva Agreement” is not a “Site Agreement”, nor does it contain any “general provision” of the kind envisaged by clause 39.3 of the Agreement.

[15] As to the first basis, Brockman point to a recommendation of Jim Simmonds, acting as a conciliator, dated 7 May 2015, which related to a dispute that involved in essence, the same question presently before the Commission, although the particular issue in dispute was about substituted public holidays. 21 The resolution of that dispute occurred by way of the then parties (AMWU and Brockman) agreeing to be bound by a recommendation to be made by Mr Simmonds.22 In making the recommendation, Mr Simmonds construed clause 39.3 by reference to the heading to clause 39 and determined that clause 39.3 only applied where Brockman provided supplementary labour or labour hire to the client/site, which is not the case at the Geelong Refinery.23

[16] Brockman maintains, contrary to the Unions’ submission, that on no respectful view can it be said that clause 39.3 is unambiguous. It says that the clause is plainly ambiguous and points to Mr Simmonds' construction as one obvious alternative and to its alternative constructions, which it says are reasonably arguable.

[17] Brockman submitted that to the extent that common law principles relevant to the construction of statutes can be called into aid in the construction of the Agreement, then a summary of the relevant principle is as follows:

● If the language of the sections is clear, and is actually inconsistent with the headings, the headings must give way.

● If the language of the sections is clear, but, although more general, is not inconsistent with the headings, the sections must be read subject to the headings; and

● If the language of the sections is doubtful or ambiguous, the meaning which is consistent with the headings must be adopted. 24

[18] It is to be observed that all State and Commonwealth interpretation legislation contain provision to the effect that certain headings in an enactment form part of an enactment. 25

[19] Applying a similar approach here, Brockman submits that the heading to clause 39 within which clause 39.3 is contained, limits the scope of operation of that clause to circumstances in which Brockman is a “supplementary labour hire” maintenance provider to a client.

[20] It is not in dispute that Brockman’s employees engaged at the Geelong refinery are not provided as supplementary labour hire employees.

[21] As to the alternative basis, Brockman submits that if clause 39.3 of the Agreement is not confined in the manner suggested by its first contention, the heading to clause 39.3 and its particular language, serve to answer the agreed question in the negative. In brief, Brockman contends that on a proper construction of clause 39.3, it is dealing with that which is known industrially as “site agreements” or “project agreements”, where employees of various contractors providing services to a particular site or project are provided with “site/project” rates which “apply” across the whole site/project uniformly. Such agreements or conditions are applied to the employees of various contractors on the site or project and have “general” application. The Viva Agreement is not such an agreement, applying as it does only to Viva’s employees at the Geelong Refinery

[22] Brockman’s first argument has something to commend it. The provisions of clause 39 as a whole are ambiguous, not least because of the change in nomenclature evidenced by the use of “plant location” and “Client Company or Maintenance Provider” in clauses 39.1 and 39.2 compared with “site/client premises”, which on one view are describing the same things. If that be correct then the heading to clause 39 “Client – Maintenance Provider – Practices for Supplementary Labour Only” might usefully be called in to aide to narrow the reach of an otherwise widely drawn clause 39.3. Against this of course, is that clause 39.3 itself has a heading immediately preceding it and on its face both the heading to and substance of clause 39.3 deal with different matters and have wider reach than clauses 39.1 and 39.2. Moreover, the change in nomenclature might be said to be deliberate so as to differentiate it from the subject matter and confined scope of clauses 39.1 and 39.2. However, it is unnecessary for me to resolve that conundrum because I am persuaded that even on the broader construction of clause 39.3, it does not operate in the manner contended by the Unions

[23] Breaking to the entitlement created by clause 39.3 into its constituent elements, the clause requires first that“an employee is employed or engaged at a site/client premises”. Secondly, there must be“a general provision that applies to employees engaged on that site/client premises”. Thirdly, that “general provision” must providea “benefit that is superior to the provisions of” the Agreement. Fourthly, if the first three elements are satisfied then “the superior conditions shall apply” to that employee.

[24] It seems to me plain given the language and structure of clause 39.3 that each of the first three elements described above must first be satisfied before the entitlement described in the fourth element is engaged. Moreover, given the structure and language of clause 39.3, it appears to me that the reference to “superior conditions” in the fourth element is intended to reflect the “benefit that is superior” in the third element, which in turn, is to be found in the “general provision” applying to employees engaged on the site/client premises referred to in the second element. It is that “general provision” which must provide the “benefit that is superior” to which reference is made in the third element. It is also clear that the reference “site/client premises” at which employees to whom the “general provision” applies are engaged to which reference is made in the second element, is the same place referred to as “site/client premises” in the first element. Finally, the reference the “employee” in the first line of clause 39.3 is clearly a reference to an employee covered by the Agreement who becomes employed or engaged at a site/client premises. However, the reference to “employees” in the second line of clause 39.3 is not confined, as the Union’s argument suggests, relevantly to employees of Viva. If that were correct, it is more likely the clause would have read “a general provision that applies to a client’s employees”. Rather, it is a reference to a broader class of persons, namely those engaged on the site/client premises. Taking into account the industrial context in which the Agreement was made, it is likely that the reference to “employees” does not mean every single employee (for example, managerial employees) engaged at the site but is confined to employees in classifications of the kind in which employees covered by the Agreement are engaged, or perhaps to a class of employees usually covered by industrial instruments but it is unnecessary to form a concluded view for the purposes of answering the question posed and so I do not do so.

[25] There is no real dispute that the reference to “site/client premises” used in the first and second elements is apt to describe the Geelong Refinery. Nor is it in dispute that the Viva Agreement provides a “superior benefit” in the form of, inter alia, wage rates, to the provisions of the Agreement as envisioned by the third element. The gravamen of the dispute is whether the provisions of the Viva Agreement that provide one or perhaps more superior conditions can properly be said to be a “general provision that applies to employees engaged on the client/site premises”, namely the Geelong Refinery.

[26] I consider that clause 39.3 is not concerned with the conditions of employment that a client, in this case Viva, might apply to its employees. Rather, it is concerned with conditions of employment that apply to employees “engaged on that site/client premises”, irrespective of the identity of the employer of those employees. So much is clear from the reference to the “site/client premises” in clause 39.3 rather than to client and the reference to “a general provision that applies” to the employees engaged at the site/client premises. The “superior condition” must therefore be one of general application to employees engaged on the “site/client premises” rather than one which pertains only to employees of a particular employer or client engaged at the “site/client premises”.

[27] It is clear on the evidence that the Viva Agreement applies only to Viva’s employees engaged at the Geelong refinery. Numerous other contractors are also engaged by Viva to carry out work at the Geelong Refinery. The employees of these contractors are entitled to such terms and conditions as are to be found in the various enterprise agreements which apply to those employees. The Viva Agreement does not apply to those employees notwithstanding that they are engaged on Viva’s premises. As the Viva Agreement has limited application, its terms cannot properly be described as “a general provision that applies to employees on” the Geelong refinery.

[28] As Brockman has correctly submitted, the operative effect of clause 39.3 is focused on and confined to “a general provision that applies to employees engaged on that site/client premises”. Neither the Viva Agreement nor any of its terms can properly meet that description. If there be any doubt about this then when the operative phrase is read consistently with the heading to clause 39.3, namely “Site Agreements”, it is immediately clear that the Viva Agreement is not a “Site Agreement” nor are any of its provisions a “general provision” that applies to employees engaged on that “site/client premises”.

[29] Again as Brockman has correctly pointed out, clause 39.3 is properly to be construed as referring to that which is known industrially as a “site agreement” or a “project agreement”, where the employees of various contractors providing services to a particular site/project are provided with “site/project” rates and conditions which “apply” to the whole site/project uniformly. These agreements or conditions apply and are to be applied to the various contractors engaged to perform work on a particular site or project. These agreements or conditions have general application. The Viva Agreement does not.

Conclusion

[30] For the reasons given the answer to the question posed by the parties is “no”. The dispute is determined accordingly and no orders are necessary.

DEPUTY PRESIDENT

Appearances:

Mr B Terzic for the AMWU.

Ms L Aksu and Mr G Penn for the AWU.

Mr M Follett, Counsel for Brockman.

Hearing details:

2016.

Melbourne;

22 December.

 1 Exhibit 1 at [1]; Exhibit 2 at [7].

 2 Ibid at [2].

 3   Ibid.

 4 Ibid at [3].

 5   Ibid.

 6   Ibid.

 7 Exhibit 2 at [10].

 8   Ibid.

 9   Ibid.

 10   Ibid.

 11   Ibid.

 12   Ibid.

 13   Ibid.

 14 Exhibit 2 at [11].

 15   Ibid.

 16   Ibid.

 17   Ibid.

 18   Ibid.

 19   Exhibit 2 at [10] and [11].

 20   [2014] FWCFB 7447 at [19]-[41].

 21   Annexure A to Applicants’ Outline of Submissions.

 22 Ibid at [2].

 23 Ibid at [7].

 24   Ragless v Pospect District Council [1922] SASR 299 at 311.

 25 See for example s. 13 of the Acts Interpretation Act 1901 (Cth); noting that that Act does not apply to the construction of an enterprise agreement: Toyota Motor Corporation Australia Limited v Marmara [2014] FCAFC 84 at [58].

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