"Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union" known as the Australian Manufacturing Workers' Union (AMWU) v Cerebos (Australia) Limited T/A Cerebos Foods

[2017] FWC 6001

[2017] FWC 6001

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)
v
Cerebos (Australia) Limited T/A Cerebos Foods
(C2017/1825)

COMMISSIONER RIORDAN SYDNEY, 23 NOVEMBER 2017

Alleged dispute about any matters arising under the enterprise agreement and the NES;[s186(6)].

[1] The “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU) has made application for The Fair Work Commission (FWC) to provide an interpretation of Clause 10.7 of the Cerebos Foods – Seven Hills, Enterprise Agreement 2012 1 (the Agreement).

[2] Leave was granted in accordance with section 596(2) of the Fair Work Act, 2009 (the Act), to allow Ms Lucy Saunders, of Counsel, to represent the AMWU and for Mr Paul Brown, Partner, of Baker McKenzie to represent Cerebos.

Issue

[3] The AMWU have requested that the FWC determine the correct interpretation of Clause 10.7 of the Agreement.

Agreement provisions

[4] Clause 10.1 of the Agreement states:

“10.1 Fair Work Australia may arbitrate matters of interpretation of the Agreement and/or the National Employment Standards.

Parties to this Agreement shall have the right to refer such matters to Fair Work Australia.

A decision made by Fair Work Australia shall be binding on the Parties to this Agreement.”

(my emphasis)

[5] Relevantly, Clause 10.2 of the Agreement states:

“10.2 If a dispute relates to the application of the:

(a) Agreement; or

(b) National Employment Standards;

Or

(c) An employee has a personal grievance regarding any work related matter,

Clauses 10.3 to 10.7 below sets out the procedure to settle the dispute.”

(my emphasis)

[6] Clause 10.5.5 of the Agreement states:

“10.5.5 If the matter remains unresolved, either party shall have the right to notify the dispute to Fair Work Australia, however a dispute can only be arbitrated by the consent of the parties.

A decision made by Fair Work Australia shall be binding on the parties to this Agreement in accordance with this Clause.”

(my emphasis)

[7] Clause 10.7 of the Agreement states:

“10.7 while the above procedure is being followed, work shall continue normally, except in cases where a bona fide safety issue is involved. No party should be prejudiced as to the final settlement by the continuance of work in accordance with this Sub Clause.

Throughout this procedure, the “Status Quo” shall remain. “Status Quo” shall mean the situation existing immediately prior to the dispute or the matter giving rise to the dispute.”

(my emphasis)

Background

[8] Cerebos are seeking to transfer 3 employees from day shift to afternoon shift. Cerebos submit that they have complied with the terms of the Agreement in making this decision. Cerebos sent the following notice to all employees on 19 April 2017;

“Notice to Employee

To the extent that your application to the FWC as filed by the AMWU on 5 April 2017 constitutes “your dispute” as defined at paragraph 10.2 of the Cerebos Foods – Seven Hills Enterprise Agreement (Your dispute) please be advised:

1. Your representation by a representative of the AMWU is noted.

2. Your Dispute remains unresolved following the assistance of your nominated representative.

3. Your Dispute was notified to the FWC and the subject of conciliation on 7 April 2017. The conciliation was unsuccessful.

4. The parties have conferred in good faith and without delay.

Cerebos regards the procedure as set out at paragraphs 10.3 to 10.7 to settled Your

Dispute as at an end effective today.

Cerebos does not consent to the arbitration of “Your Dispute” by the Fair Work

Commission.

Accordingly, you are directed to change your ordinary start time to 3:00pm effective

26 April 2017.

Issued: 19 April 2017

CC: Timothy Ayres

Steve Murphy

Lucy Saunders”

[9] The AMWU submit that the matter is still in dispute and that Cerebos has not maintained the status quo in accordance with clause 10.7 of the Agreement.

Issues

[10] Relevantly, Cerebos submitted that:

“PN93

The words in clause 10.7 mean what they mean, there are no other words, we have to accept that. We’re not putting in an alternate construction on what the words in clause 10.7 mean. This is not humpty dumpty in Through the Looking Glass, this is 2017 and no one is suggesting that those words mean anything than what they mean. But in bringing this matter before you, Commissioner, you have to ask this question, what utility is achieved? What utility is achieved in doing that and giving an opinion in relation to that?” 2

[11] The AMWU welcomed this submission from Cerebos as a “positive development”. The AMWU submitted that this process is only step one of a two step process.

[12] A recent Full Bench of the FWC in AMWU v Berri 3 expanded the relevant principles of the Commission interpreting an enterprise agreement:

“[114] The principles relevant to the task of construing a single enterprise agreement may be summarised as follows:

1. The construction of an enterprise agreement, like that of a statute or contract, begins with a consideration of the ordinary meaning of the relevant words. The resolution of a disputed construction of an agreement will turn on the language of the agreement having regard to its context and purpose. Context might appear from:

(i) the text of the agreement viewed as a whole;

(ii) the disputed provision’s place and arrangement in the agreement;

(iii) the legislative context under which the agreement was made and in which it operates.

2. The task of interpreting an agreement does not involve rewriting the agreement to achieve what might be regarded as a fair or just outcome. The task is always one of interpreting the agreement produced by parties.

3. The common intention of the parties is sought to be identified objectively, that is by reference to that which a reasonable person would understand by the language the parties have used to express their agreement, without regard to the subjective intentions or expectations of the parties.

4. The fact that the instrument being construed is an enterprise agreement made pursuant to Part 2-4 of the FW Act is itself an important contextual consideration. It may be inferred that such agreements are intended to establish binding obligations.

5. The FW Act does not speak in terms of the ‘parties’ to enterprise agreements made pursuant to Part 2-4 agreements, rather it refers to the persons and organisations who are ‘covered by’ such agreements. Relevantly s.172(2)(a) provides that an employer may make an enterprise agreement ‘with the employees who are employed at the time the agreement is made and who will be covered by the agreement’. Section 182(1) provides that an agreement is ‘made’ if the employees to be covered by the agreement ‘have been asked to approve the agreement and a majority of those employees who cast a valid vote approve the agreement’. This is so because an enterprise agreement is ‘made’ when a majority of the employees asked to approve the agreement cast a valid vote to approve the agreement.

6. Enterprise agreements are not instruments to which the Acts Interpretation Act 1901 (Cth) applies, however the modes of textual analysis developed in the general law may assist in the interpretation of enterprise agreements. An overly technical approach to interpretation should be avoided and consequently some general principles of statutory construction may have less force in the context of construing an enterprise agreement.

7. In construing an enterprise agreement it is first necessary to determine whether an agreement has a plain meaning or it is ambiguous or susceptible of more than one meaning.

8. Regard may be had to evidence of surrounding circumstances to assist in determining whether an ambiguity exists.

9. If the agreement has a plain meaning, evidence of the surrounding circumstances will not be admitted to contradict the plain language of the agreement.

10. If the language of the agreement is ambiguous or susceptible of more than one meaning then evidence of the surrounding circumstance will be admissible to aide the interpretation of the agreement.

11. The admissibility of evidence of the surrounding circumstances is limited to evidence tending to establish objective background facts which were known to both parties which inform and the subject matter of the agreement. Evidence of such objective facts is to be distinguished from evidence of the subjective intentions of the parties, such as statements and actions of the parties which are reflective of their actual intentions and expectations.

12. Evidence of objective background facts will include:

(i) evidence of prior negotiations to the extent that the negotiations tend to establish objective background facts known to all parties and the subject matter of the agreement;

(ii) notorious facts of which knowledge is to be presumed; and

(iii) evidence of matters in common contemplation and constituting a common assumption.

13. The diversity of interests involved in the negotiation and making of enterprise agreements (see point 4 above) warrants the adoption of a cautious approach to the admission and reliance upon the evidence of prior negotiations and the positions advanced during the negotiation process. Evidence as to what the employees covered by the agreement were told (either during the course of the negotiations or pursuant to s.180(5) of the FW Act) may be of more assistance than evidence of the bargaining positions taken by the employer or a bargaining representative during the negotiation of the agreement.

14. Admissible extrinsic material may be used to aid the interpretation of a provision in an enterprise agreement with a disputed meaning, but it cannot be used to disregard or rewrite the provision in order to give effect to an externally derived conception of what the parties’ intention or purpose was.

15. In the industrial context it has been accepted that, in some circumstances, subsequent conduct may be relevant to the interpretation of an industrial instrument. But such post-agreement conduct must be such as to show that there has been a meeting of minds, a consensus. Post-agreement conduct which amounts to little more than the absence of a complaint or common inadvertence is insufficient to establish a common understanding.”

Consideration

[13] I have taken into account all of the submissions and evidence which has been submitted by the parties.

[14] I note the recent Federal Court decision in Tomvald v Toll Transport 4, where Flick, J held;

“282 … both parties to any dispute need to be aware that there exists a dispute which falls within the ambit of the Enterprise Agreement and a dispute which attracts mutual obligations to try to resolve.

283 The protection afforded by cl 15(g) is, accordingly, a protection which attracts reciprocal obligations: on the one hand, an employer may be bound to maintain the status quo pending the resolution of a dispute; on the other hand, an employee only gains that protection by following the steps set forth in cl 15 and providing an opportunity for the dispute to be resolved. Although there need not be unnecessary formalism in the process of resolving the dispute and each of the steps undertaken, the protection afforded by cl 15(g) is only afforded in those circumstances where the “procedure” envisaged by cl 15 is being followed. The protection is not attracted (or does not persist) where that “procedure” is not invoked or where it is invoked but later abandoned.”

[15] Clause 10.7 of the Agreement is unusually, but helpfully, specific in that it provides its own definition of the term “status quo” I have taken into account that Cerebos does not dispute or seek to re-interpret the ordinary meaning of these words.

[16] I have taken into account the submissions of the parties in relation to the jurisdiction of the Commission, as empowered by the Agreement. I find that the Commission has the jurisdiction to deal with the interpretation of clause 10.7 of the Agreement.

[17] I have taken into account the restrictions imposed by clauses 10.2 and 10.5.5 of the Agreement.

Conclusion

[18] In applying the principles of the Full Bench decision in AMWU v Berri, I find that clause 10.7 of the Agreement is not ambiguous. Applying the ordinary meaning of the words contained in this clause, I find that the term “status quo” means that whatever was the work practice or arrangement which was applying in the workplace before the suggested change to that work practice or arrangement will continue in the workplace until the dispute is resolved.

[19] In this circumstance, the relevant employees are to continue to work the same shift pattern that the employees were working immediately prior to the decision by Cerebos to move them to afternoon shift until the dispute is resolved in accordance with the provisions of the Agreement.

[20] I so Order.

COMMISSIONER

 1   [2012] FWAA 4628

 2   Transcript 6 October 2017 at PN93

 3   [2017] FWCFB 3005

 4 [2017] FCA 1208

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