“Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers' Union (AMWU) v Komatsu Australia Pty Ltd T/A Komatsu

[2024] FWC 1255

[2024] FWC 1255

FAIR WORK COMMISSION

RECOMMENDATION

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

Komatsu Australia Pty Ltd T/A Komatsu

(C2023/7343)

DEPUTY PRESIDENT LAKE BRISBANE, 14 MAY 2024

Alleged dispute about any matters arising under the enterprise agreement – clause is subject to agreement by company –opinion issued.

1. On 28 November 2023, the “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (the AMWU) made an application to the Fair Work Commission (the Commission) under s.739 of the Fair Work Act 2009 (the Act) seeking to resolve a dispute with Komatsu Australia Pty Ltd T/A Komatsu (the Respondent).

1. The application was made by the AMWU on behalf of its members employed by the Respondent in relation to the Respondent’s interpretation and application of clause 6.2.8 of the Komatsu Australia South East Queensland Service, Assembly and Reman Departments Enterprise Agreement 2021 (the Agreement).

1. I conducted a conference with the parties on 8 February 2024 where a resolution was not reached. In order to resolve the matter, I have provided a written opinion in the form of a Recommendation to resolve this dispute under s.595(2) of the Act and clause 7.1.2 of the Agreement.

1. The AMWU states that employees of Komatsu have been requesting to cash out amounts of personal leave in excess of 5 days, pursuant to clause 6.2.8 of the Agreement. The Respondent has denied these requests, informing employees that they are permitted only to cash out a maximum of 5 days per year. Clause 6.2.8 of the Agreement states as follows:

“6.2.8     Cash Out of Personal Leave

Subject to the following, and by written agreement between the Company and the Employee, an Employee may cash out in December each year an agreed amount of Personal/Carer’s Leave to be paid at the ordinary time rate under this Agreement at the time of cashing out [emphasis added]:

(a)The Parties agree that the effect of cashing out Personal / Carer’s Leave means that for whatever amount of Personal/Carer’s Leave cashed out in accordance with this Agreement, an exact and corresponding amount of accrued Personal/Carer’s Leave is deducted by the company from the Employee’s accrued Personal/Carer’s Leave entitlements.

(b)An Employee may cash out any amount of accrued Personal/Carer’s Leave so long as he or she has not less than 15 full days’ Personal/Carer’s Leave left in balance.

(c)The Employee must be paid at least the full amount that would have been payable to the Employee had the Employee taken the leave that the Employee has requested to cash out.

1. The AMWU has compared the Agreement with clause 6.2.1(10) of the Komatsu Australia Mackay Service & Assembly Departments Enterprise Agreement 2021 (the Mackay Agreement), which replicates clause 6.2.8 of the present Agreement, with the added condition that the maximum entitlement which may be converted is 5 days. The AMWU seeks that the Respondent allow its employees to cash out any amount of sick leave in accordance with clause 6.2.8(b) of the Agreement considering the industrial context and purpose.

1. The principles for the interpretation of enterprise agreements are well-established and commonly accepted.[1] The Agreement is to be read as a whole and in context using the ordinary meaning of the words used, the clause is to be read using a purposive approach rather than a narrow approach taking into account the industrial context, and purpose and context is not limited to the words of the instrument.

1. The AMWU submits that the Respondent has informed employees that they are only entitled to cash out 5 days per year. While I have not taken evidence on this point, to the extent this has occurred, employees are entitled to cash out any amount of sick leave (subject to clause 6.2.8(b)) provided the Respondent agrees to that amount.

1. Clause 6.2.8 requires as a precondition to the cashing out of an agreed amount of sick leave written agreement from the Respondent. “By agreement” is a common term used in enterprise agreements which requires the consent of the employer and the employee for the clause to be effective.  Having regard to its ordinary meaning, purpose and context, “by agreement” means “unanimity”, “mutual arrangement”, “harmony” or “consensus”.

1. This clause does not prescribe any circumstances in which the Respondent must agree to cash out a particular amount requested by an employee. While the AMWU is correct that there is no upper limit on the amount to be cashed out, there remains the requirement for both parties to agree to any amount of leave to be cashed out.  The Agreement does not require the Respondent to agree under particular circumstances, nor does it prohibit the Respondent from agreeing to a request above a certain amount.

1. If this was the practice of Komatsu, the drafting of that clause would have reflected this purpose. Regardless of what is undertaken in Mackay or this Agreement., the Respondent is given the discretion to accept or reject paying an employee cashing out their personal leave in both Agreements. An amount of leave that an employee requests to cash out must be acceptable to both the employee and employer.  This gives the Respondent the discretion to refuse to agree to all requests to cash out any number of sick leave if it chooses to do so.

1. If this is a point which the AMWU wishes to raise, this should be a point of bargaining when the nominal expiry date of the agreement passes. This dispute should be considered resolved.

DEPUTY PRESIDENT

[1] See AMWU v Berri Pty Limited [2017] FWCFB 3005; James Cook University v Ridd (2020) 382 ALR 8 at [65].

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