Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union" known as the Australian Manufacturing Workers' Union (AMWU) Communications, Electrical, Electronic, Energy, Information, Postal,...

[2018] FWC 2489

[2018] FWC 2489

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)
Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU)
v
Monadelphous Engineering Associates Pty Ltd
(C2017/6125; C2017/6255)

COMMISSIONER SIMPSON BRISBANE, 21 JUNE 2018

Alleged dispute about any matters arising under the enterprise agreement and the NES;[s186(6)] – Whether Respondent required to provide one week’s notice of a change to work cycle – Whether Respondent required to provide one week’s notice of a change to Rest and Recreation – Specific provision overrides more general provision - R&R not being rescheduled – R&R prohibited in last two weeks of employment – Clause 8.6(c) not applicable - Not a change to the Work Cycle, or a new Work Cycle within meaning of clause 8.4(b) – Clause 8.4(b) does not apply – Clause 8.6(a) provides specific rules for R&R on commencement and end of employment – Respondent’s interpretation not inconsistent with Kentz decisions.

[1] On 8 November 2017, the “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU) filed an application pursuant to s.739 of the Fair Work Act 2009 (the Act) to deal with a dispute in accordance with the dispute settlement procedure in the Monadelphous Engineering Associates Pty Ltd Ichthys Onshore Construction Greenfields Agreement (the Agreement). The dispute is brought against Monadelphous Engineering Associates Pty Ltd (the Respondent).

[2] On 14 November 2017, the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU) also filed an application against the Respondent pursuant to s.739 of the Act to deal with a dispute in accordance with the dispute settlement procedure in the Agreement.

[3] At the request of the AMWU and the CEPU (the Unions), the matters were listed together for Conference on 11 December 2017 where the parties were unable to reach a resolution. The Unions requested that the matter be referred for arbitration, and I issued Directions for the filing of material on 12 February 2018. The Unions filed one joint written submission on 28 February 2018, the Respondent filed a written submission on 19 March, and the Unions filed one joint reply submission on 4 April 2018. The parties provided an agreed question for arbitration and agreed statement of facts. On 11 April 2018 the parties advised they did not require a Hearing and were content for me to deal with the matter on the papers.

Question for Arbitration

[4] The dispute concerns the interpretation of the Agreement, specifically in regards to clause 8.4(b), clause 8.6(a) and 8.6(c). The Questions the Commission has been asked to answer is whether in the circumstances of the agreed facts the Respondent is required to:

1. a) Provide one week’s notice of a change to work cycle in accordance with clause 8.4(b); and/or

1. b) Provide one week’s notice of a change to Rest and Recreation in accordance with clause 8.6(c);

and

2. If the answer to 1(a) or 1(b) is ‘Yes’, are Affected Employees who either remained at work or who applied for paid or unpaid leave entitled to a further week’s pay?

[5] The Unions argue that the answer to questions 1(a) and 1(b) must be ‘Yes’ and the Respondent argues the answer must be ‘No’. Further the Unions argue the answer to 2 must be ‘Yes’ and the Respondent argues the answer must be ‘No’.

Statement of Agreed Facts

[6] In accordance with Directions the parties filed the following statement of agreed facts:

1. Employees employed by Monadelphous Engineering Associates Pty Ltd (“Monadelphous”) on the Ichthys Project are employed in accordance with the provisions of the Monadelphous Engineering Associates Pty Ltd Ichthys Onshore Construction Greenfields Agreement 2014 (“the Agreement”).

2. Employees work a 4 and 1 roster, that is, they work for a four week “swing” and are then entitled to one week’s unpaid R&R.

3. In August 2017, Monadelphous advised Centrelink and the relevant unions of their intention to terminate a number of employees between August 2017 and January 2018.

4. In late October 2017, Monadelphous advised a number of employees that their employment was to be terminated by hand delivering a letter of termination to them.

5. For some of those employees this notice of termination was provided on the second last day of their “swing” (the “Affected Employees”). Affected Employees were otherwise due to commence R&R at the cessation of their four week swing.

6. The Affected Employees were provided with letters of termination. The letter stated:

“Due to changes in Monadelphous’ workforce requirements on the Ichthys Project, Monadelphous is reducing manning levels and, as a consequence, your employment here will be terminated.”

7. The roles performed by the Affected Employees were no longer required to be performed by anyone, and so the employees were made redundant.

8. The employer directed Affected Employees to continue to work through the period that would, except for the terminations, have been their week of unpaid R&R or to apply for a period of leave, either paid or unpaid, if they did not wish to work that week.

9. The letter stated:

“As your next scheduled R&R occurs during your notice period you will be required to work through that period unless you apply for leave.”

10. The employer did not consult with employees about any proposed change of work cycle.

11. The employer did not provide one week’s notice of any proposed change of work cycle.

12. The employer does not accept that its actions were a “proposed change of work cycle” and accordingly does not believe Clauses 8.4 (b) and 24 applies to the circumstances outlined above.

UNION SUBMISSIONS

[7] Clause 6 of the Agreement reads as follows:

“6 Agreement Objectives

(a) The fundamental objective that the Parties have in creating the Agreement is to produce an agreed industrial relations framework that encourages achievement of the following goals on the Project.

...

(5) A Project where leaders focus on understanding and dealing with people issues;

…

(b) The Employer is accountable to:

…

(4) Act at all times with fairness, honesty and in a trustworthy manner, responding to issues or concerns raised in a timely manner;”

[8] Clause 8.4 reads as follows:

“8.4 Work Cycle and Project Working Hours

(a) Project Working Hours shall be arranged in accordance with the work cycle(s) agreed as initially established by the Employer. The same shall apply to both Local Employees and Non-Local Employees.

(b) The Employer shall notify Employees of any change in the work cycle(s) or of the need to introduce a new work cycle(s). The Employer shall consult with affected Employees and provide a minimum of one (1) weeks’ notice before introducing a new work cycle(s) or change between two (2) different work cycles. Shorter periods of notice may operate, either by agreement of a majority of affected Employee(s) concerned, or in the event of an emergency. (my emphasis)

(c) For the purposes of this clause, the implementation or cessation of a night shift is not considered as a change between two different work cycles.

(d) The Employer shall notify Employees of any change in Project Working Hours. The Employer shall consult with affected Employees and provide a minimum of one (1) week’s notice before introducing change to Project Working Hours. Shorter periods of notice may operate, either by agreement of a majority of affected Employee(s) concerned, or in the event of an emergency.”

[9] Clause 8.6 reads as follows:

“8.6 Rest and Recreation Leave (R&R)

(a) The work cycle of each Employee will commence on his or her commencement date on the Project. The Employer may choose to shorten or lengthen the Employee’s first week work cycle to align the Employee’s work cycle with that of other Employees. The work cycle forms the basis for scheduling the staffing of the Project. Employees will only receive R&R where determined by the Employer and there are more than two (2) weeks’ work for the employee to complete on the Project. (my emphasis)

(b) R&R is classified as authorised non-work time unless accrued RDOs are paid out.

(c) The Employer may reschedule the taking of the R&R leave to meet operational requirements. The Employee may then be required to work a shortened/extended work cycle in order to regain their original work cycle. The Employer must provide at least one (1) week’s notice of such change. (my emphasis)

(d) The Employer shall transport Non-Local Employees by economy air transport to the High Capacity RPT airport nearest to the Employee’s Usual Place of Residence when the Employee commences a period of R&R. A bus pick-up and drop-off service will operate between Darwin airport and the Project Village Site. Specific details of R&R travel arrangements will vary relative to each individual Employee’s circumstances.

(e) Travel for R&R shall commence on the last working day of the Employee’s work cycle.

(f) Local Employees will commence R&R at the end of Project Working Hours on the final day of their roster.

(g) Non-Local Employees will continue to work on the final day of their roster up until 4 hours prior to the departure of that Employee’s flight, or the completion of Project working Hours, whichever comes first. Where an employee leaves the Site before the completion of Project Working Hours in accordance with this clause, that Employee will be paid for at least eight (8) hours at the Employee’s Base Hourly Rate.

(h) Air travel returning a Non-Local Employee to the Site will be taken (to return the Employee) no later than the last day of the Employee’s R&R leave to ensure the Employee is able to recommence work activities at their normal start time on the first day of their next work cycle.

(i) Non-Local Employees on an R&R work cycle will be entitled to the following travel payments in lieu of any compensation for travelling time or associated costs related to R&R travel:

(1) for Non-Local Employees engaged from locations within the Northern Territory – four (4) hours paid at the Employee’s Base Hourly Rate for the return trip; and

(2) for Non-Local Employees engaged from interstate and International Non-Local Employees – eight (8) hours paid at the Employee’s Base Hourly Rate for the return trip.

(j) The Employee’s entitlement to R&R travel payments is dependent on the Employee being available to commence work on the first working day immediately following the period of R&R and making themselves available to work on each day of the previous cycle, other than when taking any approved leave. R&R travel payment shall be made in the first pay period following the Employee’s return from R&R leave.

(k) Non-Local Employees whose Usual Place of Residence is within driving distance of the Project Site, may elect to drive in lieu of air travel on mobilisation and demobilisation under subclause 10.2 and R&R under subclause 8.6. Where a Non-Local Employee chooses to do this they will receive the same payments as prescribed in clause 10.2(b).

(l) International Non-Local Employees will work consecutive work cycles (not extending beyond three (3)) and in doing so combine the length of the R&R periods (to a period not exceeding twenty one (21) days).

[10] Clause 24 Consultation reads:

“24 Consultation

(a) The Employer shall advise, as soon as practical after making the decision, the employees’ Delegate(s) (if a Delegate(s) exists) and/or the relevant Union and the employees of:

(1) any major change to the schedules work; or

(2) any action it intends to take likely to have significant effect on employees.

(b) In discussing any significant change with its employees, the Employer will:

(1) explain the nature of the change and the reason(s) for it;

(2) discuss any impact this is likely to have on employees;

(3) explain the steps it will take to minimise the impact of the decision on the employees;

(4) consider any issues/matters raised by the employees affected; and

(5) consider whether any issue/matter raised by the employees affects either its decision or the steps it will take to minimise the impact of the decision on the employees.

(6) After completing the step in subclause 24(b)(5), if the Employer amends it’s significant change proposal, it will repeat the steps set out in subclause 24(b) at least once more.”

[11] The Unions initial submission referred to the Full Bench decisions in The Australian Meat Industry Employees Union & Golden Cockerel Pty Limited  1 and Shop, Distributive and Allied Employees Association (Queensland Branch) Union of Employees v Woolworths Limited T/A Woolworths.2 Both the Respondent’s submissions and the Unions’ submissions in reply noted that the principles in Golden Cockerel were modified by the Full Bench decision in ‘Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union’ known as the Australian Manufacturing Workers Union v Berri Pty Limited.3

[12] The principles as set out in Berri are as follows:

“[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 the 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 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 to more than one meaning then evidence of the surrounding circumstance will be admissible to aide the interpretation.

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 such as objective facts is to be distinguished from evidence of the subjective intentions of the parties, such as statements and actions of the parties reflective of actual intention and expectations.

12. Evidence of objective backgrounds 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 the 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.”

[13] The Unions’ and Respondent’s submissions stated that they did not rely upon extrinsic material but reserved the right to so do. Given no evidence was subsequently filed and the parties consented to the matter being determined on the papers it is clear that remains the position.

[14] The Unions submitted that this matter is analogous to the first instance decision of Commissioner Bissett in Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Kentz (Australia) Pty Ltd 4 and the subsequent Full Bench decision concerning that matter on appeal in Kentz (Australia) Pty Ltd v Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia.5 The enterprise agreement in those matters was in substance the same as the Agreement in this matter.

[15] The Unions say that factually this matter is similar to the facts in the Kentz matters in that Kentz gave notice of termination at the end of a work cycle, and terminations were issued with immediate effect at the end of the work cycle and there was no requirement for work to continue.

[16] The Unions submit that the task in Kentz was for the Commission to determine whether employees were entitled to payment in lieu of notice in circumstances where Kentz argued that because the period of notice was concurrent with a period of unpaid R&R, there was not liability for payment in lieu of notice for the period of the unpaid R&R.

[17] The Kentz decisions also considered whether R&R was properly characterised as a form of regulated and approved leave. The Full Bench held as follows:

“[114] In the context of the Kentz Agreement and the broader relevant working arrangements, R&R is properly characterised as the block of authorised non-work time which forms an integral part of the work cycle in which work is undertaken (and leisure time is taken).

[115] Payment in lieu in respect of an R&R period of that character, in accordance with s.117(2)(b) of the Act would require payment in respect of the “hours the employee would have worked had the employment continued until the end of the minimum period of notice.”

[116] In the context of the work cycle arrangements, an employee whose employment was terminated with payment in lieu would have worked the working hours established in their work cycle had their employment continued until the end of the minimum period of notice. The employee would not have worked, or been paid in respect of, any R&R period which fell within the work cycle over that period of time.

[117] Further, we think that the Commissioner’s equation of R&R with leave overlooked one important attribute of the various forms of leave that is not shared with R&R – unlike the circumstances in respect of the taking of R&R, an employee taking one of the various forms of leave is no longer participating in the work cycle.”

[18] The Unions submit that the converse of the comment by the Full Bench is that an employee who is taking a period of R&R continues to participate in the work cycle. The Unions also referred to the following passage from the Full Bench in Kentz:

“[125] We find that the Commissioner erred in her characterisation of R&R in the context of the Kentz Agreement and in the application of the relevant authorities to R&R in that context. We quash that element of the Commissioner’s decision and in particular the findings that:

“[83] … R&R is a form of regulated and approved leave.

[84] … on the basis of the authorities before me, that notice of termination of employment cannot run concurrent with a period of leave.

[85] … pay in lieu of notice cannot assume that the employee would have been on unpaid leave for part of the notice period and, consequently, reduce the amount of payment in lieu of notice.”

[19] The Unions submit relevant to the current dispute, the Full Bench in Kentz made the following findings in relation to clause 8.6(a):

“[141] Whilst much debate occurred before us, and between the Full Bench and the parties, as to the intention of cl 8.6(a), there was no evidence as to an intention of the parties, let alone a common intent, or a commonly held purpose of the provision. In that circumstance, we are left to interpret the provision, consistent with the principles in Golden Cockerell, by the words within cl 8.6(a), having regard to the broader contextual considerations, most notably the broader context of the Kentz Agreement reflected in the summary by Kentz, in paragraphs 101 and 102 above, which was accepted as accurate by the CEPU.

[142] The last sentence of clause 8.6(a) provides:

“Employees will only receive R&R where determined by the Employer and there are more than two (2) weeks’ work for the Employee to complete on the Project.”

[143] It appears to us that a plain reading of the sentence is available. The sentence conditions that taking of R&R in two ways:

1. R&R is only available to an employee where determined by the employer inaccordance with the Kentz Agreement.

2. Employees will only receive R&R where there are more than two (2) weeks’ work for the employee to complete on the Ichthys Project.

[144] In our view, this is a further and clearly expressed restriction on the receipt of R&R by employees. R&R is not available to an employee where there are less than two (2) weeks’ work for the employee to complete on the Ichthys Project. Whatever, the intention or purpose, the words are plain – on their face they act to preclude the taking of R&R by an employee (or scheduling R&R for an employee) in the final two weeks for which work is available for that employee on the Ichthys Project.

[145] The broader context does not detract from the plain meaning of clause 8.6(a). It supports it. Read in the context of the Kentz Agreement as a whole and the operation of the work cycles arrangements, the final sentence in clause 8.6(a) can be comfortably read as conditioning the taking of R&R. Such conditioning is found in the other element of clause 8.6(a) – R&R is only available to an employee where determined by the employer in accordance with the Kentz Agreement. The work cycle will operate in accordance with the work cycle(s) agreed as initially established by the employer (clause 8.4(a)); subject to:

● the right of the employer to shorten or lengthen an employee’s first work cycle to align with that of other employees (clause 8.6(a));

● the right of the employer to change the work cycle(s) or introduce a new work cycle(s) (clause 8.4(b)) which is conditioned by the requirement (also in clause 8.4(b)) on the employer to consult with affected employees and provide notice; and

● the right of the employer to reschedule the taking of the R&R leave to meet operational requirements and shorten/extend work cycle(s) in order to re-establish the original work cycle, subject to notice (clause 8.6(c)).

[146] In its broader context, clause 8.6(a) can be comfortably read in its terms as a limitation upon the scheduling and taking of R&R.

Conclusion in respect of clause 8.6(a) (appeal ground 5)

[147] We think the Commissioner was correct in her construction of the final sentence of clause 8.6(a) of the Kentz Agreement, as are her conclusions in paragraphs 75, 76 and 89. There is no error by Commissioner Bissett in her decision in respect of clause 8.6(a) of the Kentz Agreement.”

[20] The Unions submit that in this matter the Respondent did not terminate the employment of its employees with immediate effect and make payment in lieu of notice. Rather, it directed employees to remain at work during the period which would otherwise have been R&R or, in the alternative to apply for leave.

[21] That is, it was put that the Respondent sought to direct employees to work out their notice period or alternatively apply for leave for the period of their notice. It is an agreed fact that the Respondent did not consult with employees about any proposed change of work cycle and did not provide one week’s notice of any proposed change of work cycle.

[22] The Unions argue that the Respondent has misinterpreted the Agreement and misunderstood the outcome of the Kentz decisions and has sought to rely on that misinterpretation and misunderstanding to support their decision to terminate employees in the manner set out in the Agreed Statement of Facts.

[23] The Unions submit that the Respondent has chosen to interpret the findings of Commissioner Bissett, upheld in the Appeal, regarding R&R being unavailable where less than 2 weeks work remains, to mean that in that circumstance, the period in the work cycle that was otherwise R&R automatically becomes an extension of the “work” part of the work cycle.

[24] The Unions submit that further, the Respondent appears to believe that in that situation, other provisions of the Agreement, such as the requirement to give notice or to consult with employees, as set out in clauses 8.4(b) or 8.6(c), do not apply.

[25] The Unions submit that clause 8.6(a) must be read in conjunction with the rest of the Agreement and that the Respondent, by not doing so, is failing to take into account the Full Bench’s entire decision. In that regard the Unions refer to paragraph [114] of the Full Bench decision that said:

“[114] In the context of the Kentz Agreement and the broader relevant working arrangements, R&R is properly characterised as the block of authorised non-work time which forms an integral part of the work cycle in which work is undertaken (and leisure time is taken).”

[26] The Unions refer to paragraph [145] of the Full Bench decision as set above that said R&R was only available where determined by the Employer in accordance with the Agreement, and that the work cycle operates in accordance with the work cycle agreed as initially established by the Employer and subject to the other matters set out at paragraph [145] of the Full Bench decision regarding the requirement to consult, and notice in other parts of the Agreement.

[27] The Unions submit that were it the case that there were other situations or ways for the Employer to change the work cycle, the Agreement would have said so but it does not. Therefore it is argued that it follows that because R&R is an integral part of the work cycle, a change to the scheduling of R&R must be done in accordance with the provisions of the Agreement as noted by the Full Bench.

[28] The Unions submit that there is nothing in the final sentence of clause 8.6(a) that obviates the requirement for the Employer to comply with the other provisions of the Agreement in relation to changing either the timing or taking of R&R or the work cycle.

[29] The Unions submit that it follows that a change to the scheduling of R&R must be done in accordance with clause 8.6(c), that is by the Employer giving at least one week’s notice of the proposed change.

[30] Further a requirement to work a five week swing instead of the established four week swing is an unequivocal change to the work cycle necessitating consultation and notice in accordance with clause 8.4(b).

[31] The Unions submit that by cancelling/rescheduling R&R, an integral part of the work cycle, and directing employees to remain at work, the Respondent demonstrably changed the work cycle.

[32] The Unions submit that the effect of the Respondent’s interpretation would be that the parties intended that clause 8.6(a) operated in a fashion where any upcoming R&R could be cancelled and unilaterally determined to be work time with no requirement to consult or provide notice simply because there was less than two weeks left for the employee on the Project. It was put that the effect of this would be that no employee would know whether or not they were to enjoy their scheduled R&R until they are due to enjoy it.

[33] The Unions submitted that the parties would not have left to chance such an important issue as changing the work cycle, and/or the timing of R&R. The Unions referred to a Federal Court decision of Collier J in Australian Workers’ Union v John Holland Pty Ltd 6in support of that submission.

[34] The Unions submit that the answers to questions 1(a) and 1(b) are found at paragraph [145] of the Full Bench decision in Kentz, and that clause 8.6(a) should be read in conjunction with clause 8.4(b) and clause 8.6(c) which require consultation and a minimum of one (1) weeks’ notice.

[35] The Unions submitted that employees were given one day’s notice that they were to continue working, where they were otherwise ready to return home for one week’s R&R, or in the alternative they were to apply for leave for the period of what would have been their R&R. It was submitted that Affected Employees work compressed rosters on a FIFO basis, and when working work a 58 hour week are required to organise all family and other commitments around their scheduled R&R.

[36] The Respondent submitted that it has acted at all times to comply with the Agreement, and while it is subject to the vagaries of its clients’ instructions it has responded to issues of concern, and since concerns with this matter were first raised it has worked hard to ensure employees have as much notice as possible where they may be required to work through their period of R&R. However, the Unions said it is unbelievable that the Respondent had no prior knowledge of a reduction in staffing levels and that the answers to Questions 1(a) and 1(b) are ‘Yes’.

[37] The Unions says that the answer to Question 2 is also ‘Yes’ irrespective of whether the employees remained at work or applied and were granted paid annual leave or applied and were granted unpaid leave.

[38] The Unions say that the requirement to remain at work was not a reasonable and lawful instruction as the Respondent directed its employees to work in circumstances where it did not meet the notice requirements and consequently any decision made by Affected Employees was not freely made.

[39] The Unions submit any application for paid annual leave or unpaid leave was made by Affected Employees because the Respondent directed them to remain at work or required them to submit an application for leave.

[40] The Unions submitted that employees who would otherwise have been absent on authorised R&R and had prior commitments had no choice but to apply for paid or unpaid leave, and those who remained at work did so at the direction of their Employer. It was submitted as the work cycle was changed, and pursuant to s.117(2)(b) of the Act, employees were entitled to receive payment in lieu of notice.

[41] The Unions submit employees were entitled to be paid at the full rate of pay for the hours the employees would have worked had the employment continued until the end of the minimum period of notice, in accordance with s.117(2)(b).

[42] The Unions assert that for those who “were forced” to take annual leave, the applications were not made freely and prior to receiving notice of termination, employees were due to commence R&R in accordance with their work cycle. The Unions submit annual leave and notice are independent and cannot occur concurrently. In this regard the Unions referred to a decision of Commissioner Gooley in CEPU & Anor v Silcar Pty Ltd 7 where the Commissioner said as follows:

“[45] An employee to whom notice of termination is given prior to going on annual leave or whilst on annual leave either loses the benefit of that annual leave as she or he has to seek alternative employment whilst on annual leave or she or he loses the benefit of the notice period as her or his pre-existing annual leave plans may mean that they are not able to seek alternative work during the notice period.

[46] In my view the authorities establish the right to notice and the right to annual leave are independent and cannot be used to cancel out the other right. For example if an employer gives an employee four weeks notice of termination and after one week the employee is on approved annual leave for two weeks and returns to work out the notice for one week then the two weeks on annual leave must be absorbed by the notice period and the employee recredited with the annual leave or they must be given an additional period of notice.

[47] I therefore find that to the extent the employees annual leave ran concurrently with the notice period the employees are entitled to an additional period of notice or pay in lieu of notice equivalent to the period of annual leave taken during the period of notice.”

[43] The Unions submit that by virtue of clause 8.6(a) (which is subject to the notice requirements in clause 8.4(b) and 8.6(c)) and the Employer’s direction to remain at work subject to an application for leave, the notice period was paid work time for which employees were entitled to be paid in lieu of notice, in accordance with s.117(2)(b) of the Act.

[44] The Unions submit as notice and annual leave cannot occur concurrently, employees were entitled to receive an additional week’s pay in lieu of notice.

[45] The Unions say those employees who were forced to apply for unpaid leave were entitled to another week’s pay in lieu of notice not withstanding that employees applied and were granted unpaid leave.

[46] The Unions submit this to be so as the Respondent deemed that time “work time” in accordance with s.117(2)(b), and Affected Employees were entitled to receive a further week’s pay, based on their full rate of pay for the minimum notice period.

[47] The Unions say for those employees who remained at work they are entitled to a further week’s pay because they were unreasonably directed to work a period the Employer hadn’t properly notified of. They were not due to work that period and were otherwise entitled to R&R. It is submitted that they were deprived of the benefit of a week’s notice of a change in their work cycle and R&R and accordingly are entitled to a further week’s pay.

[48] The Unions say in conclusion the Respondent was obliged to provide notice of a change in work cycle in accordance with clause 8.4(b) and/or provide one week’s notice of a change to R&R in accordance with clause 8.6(c). As a consequence all Affected Employees are entitled to a further week’s pay.

RESPONDENT SUBMISSIONS

[49] In addition to the principles in Berri the Respondent relies on the principle in The Australian Workers’ Union; “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU) – New South Wales Branch; Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia – Electrical, Energy and Services Division – New South Wales Divisional Branch v Blue Scope Steel (AIS) Port Kembla 8(AIS decision) where the Full Bench said:

“[13] … As a matter of construction a specific provision dealing with a particular topic will normally override a more general provision dealing with the same topic.”

[50] The Respondent submits that clause 8.4 “Work Cycle and Project Working Hours” deals with:

● the establishment of the initial work cycle and Project Working Hours and any changes to that work cycle;

● any proposal to introduce a different work cycle for some employees; and

● any change to Project Working Hours.

[51] The Respondent submits that:

“8.4(a) permits the employer to establish the work cycle to be worked and the hours to be worked each day within that work cycle. It also dictates that local and non-local employees all work the same work cycle.

8.4(b) requires the employer to consult with all employees regarding any proposed change to the existing work cycle or, where it proposes to introduce new work for some employees, to consult with those employees. And, the employer must provide one week’s notice to affected employees unless a shorter period is agreed to, or in an emergency.

8.4(c) makes it clear that the implementation or cessation of night shift is not a change between two different work cycles.

8.4(d) sets out what the employer must do to effect a change to the Project working Hours established under sub-clause (a).”

[52] The Respondent submits that:

“8.6(a) deals with an employee’s first work cycle and last work cycle. It says that the employer can shorten or lengthen the employee’s first work cycle in order, for example, to balance the numbers on each R&R roster within crews. It says that when the employee reaches their last work cycle, they cannot take R&R within their last two weeks of work.

8.6(b) explains how time on R&R is treated for the purpose of payment.

8.6(c) gives the employer an ability to change an employee’s work cycle in order to accommodate operational requirements. But when making such a change, the employer is required to give the employee at least one week’s notice.

8.6(d) and subsequent clauses set out the rules dealing with R&R travel.

[53] The Respondent submits the meaning of the last sentence of clause 8.6(a) was determined in the Kentz decisions and that it is agreed between the parties that the R&R is not available where less than 2 weeks remains on the Project.

[54] The Respondent submits what is disputed between the parties is whether the operation of the prohibition contained in the last sentence in clause 8.6(a) is subject to the operation of clause 8.6(c) and/or 8.4(b). The Respondent submits that if that is so than the Respondent is required to give its employees at least one week’s notice prior to the date it gave them notice in the event they have two weeks or less to work on the Project and their usual R&R falls in the first week of the notice period.

[55] Clause 7.3(a) of the Agreement reads as follows:

“(a) Subject to the Act, the Employer may terminate the employment of an Employee by giving written notice to that Employee as follows:”

Where an employee’s Period of Continuous Service with the Employer is:	The Period of Notice as qualified by the Notes set out below this table will be:
Not more than 1 year	1 week
More than 1 year, but not more than 3 years	2 weeks
More than 3 years, but not more than 5 years	3 weeks
More than 5 years	4 weeks

[56] The Respondent submits the first flaw in the Unions’ contention is obvious, because it would mean the Respondent would need to give some employees an additional week’s notice of termination. The Respondent gave the example of an employee entitled to two weeks’ notice (which is most employees), and whose R&R would normally fall in the first week of the notice period. It submitted that employee, on the Unions interpretation, is entitled to one weeks’ notice prior to the two weeks’ notice of termination required under clause 7.3 “Termination of employment”.

[57] The Respondent submits the effect of the Unions’ interpretation is that the Respondent is required to give employees in that circumstance three weeks’ notice before the termination date, made up of one week for the change in R&R and two weeks for the Termination of Employment – Period of Notice.

[58] The Respondent submits the Unions’ contention does not sit well with the clearly expressed requirements of clause 7.3 “Termination of employment”. It is put that clause 7.3 is a specific and explicit clause establishing the amount of notice and its meaning is plain and clear. The Respondent submits that if the Unions’ interpretation of clause 8.6(a) is considered “in the text of the agreement viewed as a whole”, 9 clause 7.3 no longer has a clear meaning. The Respondent submits the Unions’ interpretation creates ambiguity in clause 7.3 which currently does not exist, and this should be avoided.

[59] The Unions’ response was to submit they do not say that the Respondent is required to provide an additional week’s notice of termination. The Unions say there is no prohibition on the Respondent providing an employee notice of termination that includes what would have been a period of R&R, however if the Employer chooses to do that, then the calculation for the payment in lieu of notice must be in accordance with the findings at paragraph [75] and [76] of the decision of Commissioner Bissett confirmed by the Full Bench.

[60] The Respondent says that clause 8.6 sets the rules for the taking of R&R in the work cycle, and is not about the work cycle itself which is dealt with by clause 8.4.

[61] The Respondent submits the plain reading of the first two sentences of clause 8.6(a) is that they provide a practical rule to deal with the taking of R&R when the employee commences work, and it enables the Employer to require an employee to postpone or bring forward their first R&R to align the work cycle crews and minimise disruption to the crew.

[62] Importantly, the Respondent made the point that if the last sentence of clause 8.6(a) is subject to clause 8.4(b) and/or 8.6(c) then it follows that so should the first two sentences, and if that were so it would lead to the absurd situation in some instances of the Employer being required to give employees notice of a change to their work cycle on the day they commence to work.

[63] The Respondent submits that the more sound reading of the first two sentences is that they are a practical rule for the taking of R&R at the beginning of employment to align the work cycles. In a similar vein, the last sentence in the clause establishes a practical rule to deal with the taking of R&R at the end of employment.

[64] The Respondent says that the third sentence in clause 8.6(a) is not in dispute. It says that in the same way that the first part of clause 8.6(a) deals with the practical issues of aligning crews at the beginning of employment, the last sentence creates a practical rule for the taking of R&R at the end of work on the Project. It is submitted that it is designed to stop a situation where an employee flies out for R&R and must return for only a week or two weeks’ work saving the cost of additional airfares for only two weeks work.

[65] The Respondent says clause 8.6(a) deals with two specific circumstances for the changing of R&R which the parties have anticipated.

[66] The Respondent says in reference to the AIS decision that in interpreting agreements or documents, specific terms should take precedence over the general. It says clause 8.4(b) and clause 8.6(c) deal with the more general unspecified circumstances and in interpreting the interaction of clause 8.6(a) with 8.4(b) and/or 8.6(c) the Commission should modify the meaning of a specific clause by making it subject to a general clause.

[67] The Respondent says clause 8.6(c) is a general provision dealing with non-specific circumstances and the key words are “reschedule” and “operational requirements”. Clause 8.6(a) is a prohibition on the taking of R&R; the R&R is not rescheduled, it is prohibited. The Respondent says clause 8.6(c) is referring to rescheduling of the R&R and then only to “operational requirements”.

[68] The Respondent submits “operational requirements” are unspecified requirements or circumstances of a general nature to do with the managing of work requirements that may arise from time to time on the Project and do not refer to the specific circumstances dealt with in clause 8.6(a). It is put that clause 8.6(c) is a “catch all” for circumstances that have not been contemplated elsewhere.

[69] The Respondent submits that if it were intended that clause 8.6(c) apply to clause 8.6(a), then 8.6(a) would be superfluous, and contrary to this notion, 8.6(a) was put there for a specific purpose to deal with the circumstance contained therein and not intended to be subject to 8.6(c).

[70] The Unions submitted in response that it is incorrect to say that on the Unions’ interpretation clause 8.6(a) would be superfluous. The Unions submit clause 8.6(a) provides what happens, and clause 8.6(c) sets the process for how that happens, and this is consistent with the broader context of the Agreement.

[71] In response the Unions submitted the term “operational requirements” is a term frequently used in the context of termination of employment, and referred to s.389 of the Act.

[72] The Respondent submits that clause 8.4(b), which the Unions also claim applies to clause 8.6(a), is contained in the context of clause 8.4 “Work Cycle and Project Working Hours”. The Respondent submits it forms part of a set of rules around Work Cycles and Project Working Hours and must be read in that context, and that the clause is about wholesale change to “Work Cycles” and needs to be distinguished from clause 8.6(a) which deals with R&R being postponed or brought forward within the work cycle.

[73] The Respondent submits that the changes contemplated in clause 8.4(b) could include a work cycle over a different five-week period to the one an employee is currently on, or a change to the current rostered work cycle, either increasing or decreasing the number of weeks on or off.

[74] The Respondent submits that a work cycle is a pattern of work that an employee would generally expect to continue during their period of employment, however clause 8.6(a) is merely a license to postpone R&R within the work cycle in two very specific circumstances without the requirement to give notice in accordance with clause 8.4(b) or 8.6(c). The Respondent again emphasised its submissions concerning the rule of the specific provision of clause 8.6(a) overruling the general provision in clause 8.4(b).

[75] The Respondent submits that the meaning of clause 8.6(a) was not central to the Kentz decisions, and was considered for the purpose of determining whether R&R was a leave entitlement.

[76] The Respondent says that the findings in the Kentz decisions that R&R is not a form of regulated and approved leave and are part of the work cycle are not in dispute.

[77] In regard to the finding in the Kentz decisions that clause 8.6(a) was a prohibition on taking R&R where an employee had two or less weeks to complete on the Project, the Respondent asked what is the point in such employees being subject to a week’s notice under clause 8.4(b) and/or clause 8.6(c)?

[78] The Respondent submits that an immutable term of the Agreement such as clause 8.6(a) does not require a period of notice before implementation, and it is known to the parties from the commencement of the employment contract. The Respondent submits that employees are effectively on notice from the time they commence work on the Project that they are not entitled to take R&R if they have two or less weeks to complete on the Project and in the same way they are on notice that they will be given a specific period of notice at the end of their employment or the amount of annual leave they will be entitled to receive at the end of twelve months’ service, or the public holidays they are entitled to during the year.

[79] The Respondent referred to the finding at paragraph [74] of the decision of Commissioner Bissett at first instance. It submitted that clause 8.4(b) and 8.6(a) are not considered but neither would that be necessary if clause 8.6(a) is a prohibition on taking R&R if the employee had less than two weeks work left on the Project, or as the decision said at paragraph [74]: “… When an employee gets to end of that employee’s work on the Project, the work cycle is again adjusted so that an employee is not put on R&R within the last two weeks of work.”

[80] The Respondent submits the Full Bench upheld this part of Commissioner Bissett’s decision.

[81] The Respondent submits that the Full Bench was distinguishing between a change to the work cycle and the limitations upon the taking of R&R and the Unions have overlooked this. The Respondent submits that by reading paragraphs [145] and [146] of the Full Bench decision together, the Full Bench was distinguishing between, on the one hand - the conditioning on the scheduling and taking of R&R in clause 8.6(a), and on the other - the work cycle initially agreed under clause 8.4(a), and subject to clauses 8.6(a), 8.4(b) and 8.6(c).

[82] In summary, the Respondent submits that the proper reading of the Agreement is that it imposes two restrictions on the taking of R&R as part of the work cycle. They are at the beginning and end of employment, and this contention is supported by the Kentz decisions.

[83] The Respondent submits that if the parties had intended for clause 8.6(a) to be subject to clause 8.6(c) and/or 8.4(b) then the parties would have included the words in the clause. The Respondent referred to the expression “Subject to” appearing in clauses 7.3(a), 8.2(a), 10.1(a), 12.3(e), 14(a), 17.2(b), 18.2(b) and Appendix 2(b)(4). The Respondent submits that the absence of the words “Subject to other clauses” strongly supports its contention that clause 8.6(a) should be read alone and not as subject to clause 8.6(c) or 8.4(b).

[84] The Unions’ response was to refer to paragraphs [53] and [54] of the first instance Kentz decision to repeat that the Kentz dispute was about the calculation of payment in lieu of notice, and the Union position was accepted by the Full Bench. The Unions accepted that it was correct to say that they did not address the provisions in clause 8.4(b) or 8.6(c) in that matter because those provisions were not relevant to that dispute.

[85] The Unions said in response that should the Employer choose to change the work cycle and/or timing of R&R they are still required to comply with the provisions of clause 8.4(b) and 8.6(c) in order to do so and referred to paragraphs [141] to [148] of the Full Bench decision.

[86] The Unions rejected the submission that their position in effect asked that the Commission infer the words “Subject to other clauses” at the beginning of clause 8.6(a) and stated that consistent with the Full Bench decision in Kentz, the Agreement must be read in its entirety, and referred to paragraph [141] of the Full Bench decision.

[87] The Unions submit that the Respondent’s interpretation requires that the final sentence in clause 8.6(a) be read such that it takes precedence over clause 8.4(b) and 8.6(c), and that those clauses are somehow subordinate to clause 8.6(a), when the Unions say clause 8.6(a) must be read in conjunction with the rest of the Agreement.

CONCLUSION

[88] I agree with the submission that the Unions’ interpretation would create ambiguity concerning the operation of clause 7.3 whereas the Respondent’s interpretation does not.

[89] It is clear the first two sentences of clause 8.6(a) provide a rule to deal with the taking of R&R when the employee commences work to enable alignment of work cycles and to minimise disruption. As I understand the Unions have not suggested that these two sentences are subject to clause 8.4(b) and/or 8.6(c), which, as submitted by the Respondent would led to an absurd situation in some instances of the Employer being required to give employees notice of a change to their work cycle on the day they commence work.

[90] The Respondent reasonably posed the question, why would clause 8.4(b) and/or 8.6(c) not apply to the first two sentences in clause 8.6(a) which are about specific arrangements to accommodate commencement, but apply to the last sentence that pertains to specific arrangements to accommodate the ending of employment, designed to stop an employee flying out for R&R and returning for only a week or two weeks’ work? The inconsistency that arises from the Union interpretation supports the Respondent’s interpretation that the first two sentences of clause 8.6(a) provide a practical rule for the taking of R&R at the beginning of employment, and the last sentence in clause 8.6(a) establishes a practical rule dealing with the non-entitlement to R&R in the last two weeks of employment.

[91] I also agree that clause 8.6(a) applies to specific circumstances whereas clause 8.4(b) and clause 8.6(c) deal with the more general circumstances, and the principle referred to by the Respondent in the AIS decision that a specific provision with a particular topic will normally override a more general provision dealing with the same topic, applies to the proper reading of the respective clauses.

[92] However, I have also concluded clause 8.6(c) does not apply where employees fall under the circumstances caught by the last sentence in clause 8.6(a) because the R&R of those employees is not being rescheduled. The term “rescheduled” means being moved to another time. That is not what occurs under the last sentence of clause 8.6(a) as it prohibits the taking of any more R&R; the R&R is not rescheduled, it is prohibited. I am less inclined to accept the Respondent’s submission that the circumstances caught by the last sentence of clause 8.6(a) fall outside the meaning of the expression “operational requirements”, but given my view that the R&R is not being rescheduled it doesn’t matter.

[93] Clause 8.4 of the Agreement deals with “Work Cycles and Project Working Hours”. The clause includes dealing with change to “Work Cycles” whereas clause 8.6(a) deals with R&R being postponed, brought forward or being extinguished as an entitlement within the work cycle where employment is coming to an end.

[94] Clause 8.4(b) does not apply in the circumstances described in the last sentence of clause 8.6(a) because it is not a change to the work cycle, or a new work cycle as contemplated in clause 8.4(b). It is not a change to a pattern of work to accommodate a different or new cycle as intended to require the one week notice period, but instead it is an arrangement in a specific category of its own as agreed between the parties as described in clause 8.6(a) to occur in the last two weeks of employment to avoid employees flying out for R&R and returning for only a week or two weeks’ work.

[95] I disagree with the submission that the Full Bench in Kentz “clearly describes interaction between the final sentence of clause 8.6(a) as being subject to and conditional upon consultation and notice in clause 8.4(b) and clause 8.6(c).” 10 The Unions’ case in this regard appears to draw at least in part from paragraph [145] of the Full Bench decision, and specifically the second and third dot points in that paragraph in support of this submission.

[96] Interpreting the Agreement in the manner as proposed by the Respondent is not inconsistent with either the first instance or Full Bench decisions in the Kentz matters. The Full Bench reached a conclusion in that matter about the rules governing the scheduling and taking of R&R in clause 8.6(a), and went on to make a finding that the work cycles initially agreed under s 8.4(a), are subject to clauses 8.6(a), 8.4(b) and 8.6(c).

[97] Neither the Commissioner at first instance nor the Full Bench made a finding, or were asked to make a finding, about the application of clause 8.4(b) and/or 8.6(c) to the specific circumstances applying when employment is coming to an end as contemplated in clause 8.6(a).

[98] I have concluded that the relevant provisions of the Agreement have a plain meaning consistent with the interpretation as put by the Respondent, and that there is no ambiguity, and therefore in the circumstances of the Statement of Agreed Facts, the Respondent does not have an obligation under the Agreement to provide notice of a change to the work cycle in accordance with clause 8.4(b) and/or to provide one week’s notice of a change to R&R in accordance with clause 8.6(c).

[99] Whilst the matter has proceeded on the basis of submission only and not evidence it seems clear the dispute arose because employees were given very little notice of the Respondent’s intention to implement the practical rule in clause 8.6(a).

[100] Consistent with the findings above, when the parties negotiated the Agreement, clause 8.6(a) made clear employees lose their entitlement to R&R if notified by their employer that their employment is coming to an end within 2 weeks or less. However it is understandable, and not surprising, that such short notice of cancellation of R&R for employees working a four and one roster would cause some employees significant frustration, disruption and inconvenience. The Respondent said that it is subject to the vagaries of their client’s instructions but says it has responded to the issue and worked hard to ensure employees have as much notice as possible where they may be required to work through R&R.

[101] Clearly employees should be given as much notice as possible of a pending termination date. Based on the conclusions above, the answers to Questions 1(a) and 1(b) are ‘No’, and it therefore follows that the answer to Question 2 is ‘No’.

COMMISSIONER

Printed by authority of the Commonwealth Government Printer

<PR606793>

 1   [2014] FWCFB 7447

 2   [2013] FWCFB 2814

 3   [2017] FWCFB 3005

 4   [2016] FWC 669

 5   [2016] FWCFB 2019

 6 [2010] FCA 1432 at [21]

 7   [2013] FWC 856

 8   [2015] FWCFB 1798

 9   [2017] FWCFB 3005 at [114(1)]

 10   Unions’ submissions in reply dated 4 April 2018 at [71]