“Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers' Union (AMWU) v Boral Cement Limited

[2017] FWC 3096

[2017] FWC 3096

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.739—Dispute resolution

“Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU)
v
Boral Cement Limited
(C2016/6906)

COMMISSIONER MCKENNA SYDNEY, 23 JUNE 2017

Alleged dispute about any matters arising under the enterprise agreement.

[1] The dispute now before the Commission has a long history, which requires a short description. Boral Cement Limited (“Boral”) has operations at three sites in the Southern Highlands area of New South Wales, namely at Berrima, Marulan and Maldon. Negotiations for a new enterprise agreement to cover those worksites commenced around April 2015 involving Boral and the following unions as employees’ bargaining representatives:

• “Automotive, Food, Metals, Engineering and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU) (“AMWU”);



• The Australian Workers’ Workers’ Union (“the AWU”);



• Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (“ETU”); and



• Construction, Forestry, Mining and Energy Union of Australia (“CFMEU”).

[2] Boral’s proposals in the 2015 negotiations for a new enterprise agreement involved, among other matters, the creation of a new classification structure including a new, non-trades Production Operator Maintainer (“POM”) classification. That POM classification was proposed to expand the duties of non-trades employees to include at least some responsibilities that hitherto were typically undertaken solely or principally by trades-qualified employees.

[3] While Boral’s proposal initially did not find favour with the unions, earlier dispute proceedings before another member of the Commission resulted in agreement between Boral and the unions that the fleshing-out of the new classification structures (including the POM classification) for the purposes of the proposed enterprise agreement would be deferred until after the approval (if any) by employees in a ballot.

[4] Following a voting process in which the proposed agreement was approved by employees, the Boral Cement Ltd (NSW) Enterprise Agreement 2015 (“the Agreement”) was subsequently approved by a member of the Commission on 9 October 2015 ([2015] FWCA 6970).

[5] Annexure “A” to the Agreement (Annexure A) addresses certain matters as to the “rules/principles” which are to apply to the development and implementation of classification structures. Among other matters, Annexure A specifies that during the first three months of the nominal term of the Agreement Boral would seek to reach agreement concerning relevant classifications as follows:

● as to production employees, with the AWU (Item 1);

● as to electrical employees, with the ETU (Item 2);

● as to mechanical employees, with the AMWU (Item 3);

● as to certain nominated classifications, with the relevant unions/s (Item 4).

[6] Annexure A provides for extension of the three month period in which the parties seek to reach agreement by written agreement between the relevant parties. More specifically in relation to the POM classification, Item 5 of Annexure A provides that during the first three months of the nominal term of the Agreement all site unions can participate in the consultation process in relation to the duties of the POM classification. Annexure A also addresses various matters particular to the POM classification, as to, for example, what the new classification could, or could not, involve; as well as considerations apposite to rates of pay.

[7] After the approval of the Agreement, a Working Group was established in relation to the development of the new classification structures. As things transpired, around July 2016 Boral and the AWU finalised an agreement regarding the production employee structure inclusive of the POM classification. The agreement reached between Boral and the AWU concerning the POM classification arrangements effectively, under the terms of Annexure A, finally settled matters concerning that stream of production employees.

[8] For its part, the AMWU considered that it was not properly consulted by Boral in relation to the POM classification and that its concerns about the classification were not properly addressed. Moreover, AMWU representatives strongly considered they were, in effect, excluded from certain discussions about the POM classification because Boral and the AWU held meetings not involving the AMWU; deep concern emerged about this matter in the proceedings before me.

[9] The POM classification agreed between Boral and the AWU has, among other concerns, brought about concern for the AMWU about what might be described as relativity-type considerations as between trades and non-trades employees. For example, in the initiating process, the AMWU raised, among other matters, whether “the proposed rates of pay for trades levels are appropriate in light of the proposed Production Operator Maintainer starting ay level 10.75 whereas a qualified tradesperson starts at level 10.”

[10] On 24 November 2016, the AMWU lodged the present application to deal with a dispute pursuant to s.739 of the Fair Work Act 2009 and cl.41 of the Agreement. Clause 41 is the general dispute settlement procedure in the Agreement. It contains a sub-clause which reads:

“41.7 If the dispute or grievance is not resolved by conciliation either party may confer power on the Commission to arbitrate the dispute and the arbitrated outcome will, subject to any rights of appeal, be binding on the parties.”

[11] The dispute stems from the AMWU’s concerns regarding consultation and the implementation of the POM classification generally, and the duties specifically, including: (a) whether the duties are too complex to be performed by POMs safely and properly; and (b) that the pay classification of POMs under the Production Classification Structure is higher than that currently paid to trades-qualified employees.

[12] On 24 March 2017, I made directions in terms proposed by the parties in anticipation of a hearing principally concerning the determination of threshold jurisdictional matters – in circumstances where the AMWU submitted there was a proper basis to proceed to arbitrate relevant matters, whereas Boral indicated there was jurisdictional objection. The parties each filed a substantial amount of material by way of detailed written submissions and statements of evidence; and such matters were, in turn, much-developed over the course of a two-day hearing. A consequence of the nature of the directions for hearing of threshold matters which the parties put forward by consent was that there were multiple sets of written submissions and replies. Aspects of the evidence and submissions traversed many matters which tended to re-agitate what appeared to be older concerns which predated the making of the Agreement, and some other matters did not seem to me to be immediately relevant to matters for determination.

[13] The AMWU has foreshadowed that the proposed orders it would seek are as follows:

“a. Boral must, within 14 days of this order, commence a consultation process with the AMWU in relation to the duties to be carried out by Production Operator Maintainers, as follows:

i. Boral must discuss with the AMWU, each individual indicative maintenance task set out in the list within the Production Classification Structure.

ii. Where the AMWU disputes that a specific indicative maintenance task complies with Item 11 of Annexure A of the Agreement, Boral must:

1. remove the task from the list; or

2. give prompt and genuine consideration to the AMWU’s concerns and provide written reasons as to why it does not agree with the AMWU.

b. Boral must not appoint any further employees to the role of Production Operator Maintainer, until further consultation with the AMWU has been completed.

c. Production Operator Maintainers must not carry out any of the indicative maintenance tasks set out in the Production Classification Structure, until further consultation with the AMWU has been completed.

d. Boral must not train Production Operator Maintainers to engage in the indicative maintenance tasks set out in the Production Classification Structure, until further consultation with the AMWU has been completed.

e. The AMWU is granted leave to have the matter relisted at short notice in the event that it has concerns that consultation is not proceeding in accordance with these orders.”

[14] I am bound to say that these proposed orders seem to be somewhat ambitious for the AMWU to advance when considered in terms of what those orders would purport to allow or require in relation to a classification of employees within Boral’s workforce or Boral’s operations, or both. That is so even if all other things were equal in terms of there being, for instance, no issues of jurisdiction and if there had not been an Annexure A-specific agreement as between Boral and the AWU concerning the POM classification.

Consideration

[15] While it is not necessary to traverse in this decision each and every point detailed in the parties’ cases, in the conclusions reached, I have, however, considered each such matter, and relevance.

Availability of arbitration

[16] The AMWU submitted the Agreement contains separate, distinct and parallel arbitration powers for the Commission with the following results:

● the reference to the “arbitration process” in Item 6 of Annexure A, should properly be understood as a reference to an arbitration triggered by either the AWU or Boral if agreement could not be reached regarding the production employee structure in accordance with Item 1;

● clause 41 (Disputes Settlement Procedure) provides a separate and parallel power of arbitration in relation to a dispute arising under other terms of the Agreement;

● disputes relating to the rights and obligations under Annexure A fall under cl.41 of the Agreement, including the obligations:

(a) on Boral and the AWU to ensure that the POM classification (and on the Commission, should it arbitrate the Production Classification Structure) meets certain objective requirements; and

(b) on Boral to ensure that it complies with its consultation obligations under Annexure A and Annexure B of the Agreement.

[17] In advancing their submissions in relation to the jurisdictional availability of arbitration both parties relied on principles concerning interpretation of enterprise agreements as distilled in Australasian Meat Industry Employees Union v Golden Cockerel Pty Ltd [2014] FWCFB 7447 at [41]. The AMWU contended that, considering the context of the Agreement as a whole (while not disputing that only the AWU and/or Boral may trigger the arbitration of the Production Classification Structure under Item 1 of Annexure A), the AMWU is not precluded from seeking arbitration through other mechanisms in the Agreement, whereas Boral submitted that was not a correct construction of the Agreement.

[18] Even on a consideration of matters such as the submissions for the AMWU it seems to me that the specific purpose to which Annexure A is directed is to be given proper effect in the context of the Agreement as a whole, including the operation of Annexure B and cl.41 of the Agreement. I consider that the operation of accessibility to arbitration as to the POM classification is conditioned quite particularly and specifically by the operation of Annexure A; and, as to that, considerations concerning discussions/consultation also turn on the fact of the agreement reached between Boral and the AWU in July 2016.

[19] While the AMWU advanced a respectably arguable case about the enlivening of arbitration powers by operation of the matters to which it referred, I do not, in the end, accept that on a proper construction of the Agreement it envisages arbitration of matters in this dispute by means of what the AMWU described as the existence of a type of separate or parallel arbitration process. The approach for which the AMWU contends effectively would defeat what is delineated and identified with particularity in Annexure A as to processes concerning classification-related discussions and the conditions of arbitration described in that annexure. The outcome the AMWU seeks to achieve in its proposed orders under its alternative route for arbitration would be antithetical to what is constructed in the relevant provisions of Annexure A as concerns the AWU/Boral agreement in respect of the production employee structure.

Consultation

[20] The AMWU submitted Boral’s obligations to consult concerning the POM classification derives from two sources in the Agreement, namely Annexure A (Classification structures) and Annexure B (Consultation term/major change) – and that the task for the Commission of identifying the consultation requirements should be undertaken in accordance with the ordinary principles of construction as they apply to enterprise agreements.

[21] Despite the submissions by the AMWU pointing to the narrowness of the vote in favour of the Agreement, and its on-going concerns about the Agreement including its provisions in relation to the POM classification, it is the case the Agreement was approved by a majority in a vote by employees and took effect in accordance with its terms in connection with its approval by the Commission. Even though the Annexure A optimistically presupposed a timeframe for discussions of three months after the commencement of the Agreement (albeit with certain provision for extension by written agreement), discussions continued beyond that time.

[22] So far as this dispute is concerned, the Boral/AWU agreement about matters concerning the new classification structure for production employees brought things conclusively to an end concerning the POM classification itself. Upon the Annexure A-specific agreement being made about the POM classification discussions effectively were put at an end concerning capacity for the AMWU to seek to undo matters or, alternatively, to seek to re-make matters, at least through proceedings of the type before the Commission in relation to this application and in orders of the type sought by the AMWU.

[23] Despite my conclusions concerning the jurisdiction in relation to the consultation issue, and to the extent the AMWU posited that the initial question to be answered by the Commission was whether Boral complied with its obligation to consult with the AMWU in relation to the development of the POM classification, I say I consider it did so – notwithstanding the submissions for Boral that to pass-upon such a matter would involve a purported impermissible exercise of judicial power. Even if I had been satisfied that Boral had been derelict in relation to consultation obligations concerning the POM classification (and I have not been so satisfied) any such finding would not axiomatically lead me to the view that it would be open or available to proceed further in relation to this application by making the AMWU’s proposed orders.

[24] A broad overview of the submissions for the AMWU was that consultation is not a mere formality, being a view to which Boral similarly subscribed in its submissions. Unsurprisingly, though, there was disagreement about what was said by each party to have unfolded in relation to consultation, and its extent and effectiveness. I think Boral’s submission may be accepted that it is the case the AMWU is simply not happy with the responses provided by Boral; but, equally, that is not a basis for the Commission to find that Boral had failed to comply with what was required of it in the period following the approval of the Agreement. The evidence indicated that matters raised by AMWU representatives were considered by Boral, and some such matters were in fact addressed by Boral.

Complex maintenance functions

[25] Item 11 of Annexure A specifies that: “The Production Operator Maintainer classification must not require a production employee to undertake complex maintenance functions that would typically require trade qualifications in order to properly and safely undertake work.” While the AMWU would seek to have matters concerning Item 11 of Annexure A arbitrated, I do not consider that this matter properly could be considered in some type of, for the want of a better description, abstract way.

[26] I would also add the following about workplace safety. As to the proper/safe performance of work it is unarguably clear that Boral and all its employees have, by operation of statute, mutual rights and obligations concerning workplace safety. If there is any question or issue about capacity to properly/safely perform work then that is a matter which needs properly to be addressed in terms of specifics in relation to the relevant individual employee or class of employees. Regardless of what might be in any type of classification structure in any workplace, no employee may be given a task to perform, or undertake a task, unless the employee is occupationally capable of properly and safely undertaking such work.

Discretionary considerations

[27] If I am wrong in relation to the questions of power, I would not, in the exercise of discretion, make the orders that the AMWU identified. Although the AMWU submitted that this dispute was not about “deconstructing” the Agreement, I consider that such a characterisation is open. The proposed orders would otherwise, as Boral submitted, have characteristics of being injunctive in nature. They would also have no utility because, regardless of the outcome, the impugned POM arrangements cannot be changed by Boral given the operation of the Annexure A-specific agreement that was made in July 2016 about the production structure. In my view, the orders proposed by the AMWU would not only be beyond power but also inappropriate.

Conclusion

[28] Shortly stated, I accept the basis of Boral’s threshold objections. Even if there was a proper jurisdictional basis to proceed in the manner proposed by the AMWU, I would not, in the exercise of discretion, be minded to so deal with matters by making the foreshadowed orders.

[29] In view of my conclusions, the application is now dismissed.

COMMISSIONER

Appearances:

S Howe for the applicant.

J Donnelly, solicitor for the respondent.

Hearing details:

2017.

Sydney:

May 31

June 1

Printed by authority of the Commonwealth Government Printer

<Price code C, PR593535>