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

[2016] FWC 2637

[2016] FWC 2637 [Note: An appeal pursuant to s.604 (C2016/3825) was lodged against this decision.]

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
McCain Foods (Aust) Pty Ltd
(C2016/243)

COMMISSIONER RYAN MELBOURNE, 2 MAY 2016

Alleged dispute about requirement to reduce workforce - jurisdiction.

[1] “Ah McCain - you’ve done it again”, said the actor in praise of McCain’s frozen roast potatoes in a TV ad.

[2] Same words, but with a different tone and stress and it becomes the complaint of the AMWU in the present matter: “Ah, McCain! You’ve done it again!”

[3] The dispute in the present matter concerns the decision by McCain Foods (Aust) Pty Ltd (McCain) to contract out the potato receival operation at its Ballarat facility. Employees of McCain who worked in potato receival have had their jobs declared redundant as McCain does not want any of its employees employed in the work of potato receival. McCain intends to redeploy the employees into other work within the Ballarat facility.

[4] The “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU), on behalf of two of the employees from potato receival, dispute the right of McCain to simply require the employees to transfer to other work within the Ballarat facility. The AMWU contended that McCain must follow the procedures set out in clause 12 of the McCain Foods (Aust) Pty. Ltd. Ballarat Production Enterprise Agreement 2014 (the Agreement) which provides as follows:

“12. REDUNDANCY

12.1 General

12.1.1 Redundancy occurs when an employer decides that the employer no longer wishes the job the employee has been doing done by anyone and this is not due to the ordinary and customary turnover of labour.

12.1.2 In the event that the Company is required to reduce the size of the workforce it will do so, in the first instance, through natural attrition (ie. not replacing employees who leave of their own accord, and redeployment). This condition will remain in force and operate in addition to the following.

12.1.3 Should the Company be required to reduce the workforce size through redundancy/retrenchment, the Company will firstly identify the number of positions affected. This information and the need for the reduction, will be advised in writing to Union Officials (State Secretaries), Shop Stewards and Employees simultaneously. The Company will promptly consult with employees and their representatives. Any employee being compulsorily retrenched or compulsorily made redundant will, under this Agreement, receive 4 weeks’ notice of termination.

12.1.4 The Company will then advertise the number of position(s) affected and call for expressions of interest from employee(s) in the Department most affected by the proposed reduction who may wish to volunteer for redundancy.

12.1.5 In the event that the number of volunteers exceeds the number of positions to be lost, then selection will be from volunteers on the basis of skills, experience and seniority of the volunteers.

12.1.6 In the event that the number of volunteers is less than the number of positions to be lost, then the Company will call for volunteers from across the site. Should the number of volunteers exceed the number of positions to be lost, selection will be on the basis of skills, experience, suitability of the position left vacant for redeployed persons and seniority.

12.1.7 In the event that the number of volunteers is less than the number of positions to be lost, then the Company will select employees for redundancy based on seniority, site wide (last on, first off).

12.1.8 If requested to by the Union, the Company is prepared to genuinely consider the prompt involvement of an external agency or resource in the assessment of employees (either volunteers or those selected by the Company).

12.1.9 If the selection of volunteers (or other circumstances), creates alternative positions into which employees can be redeployed instead of being retrenched, the Company will actively encourage redeployment.

12.1.10 Any such redeployment will be on the basis that the employee’s weekly rate, comprising their award wage and over-award payment, will not be reduced as a result of that redeployment. Any Lead Hand Allowance (or equivalent) will however, be absorbed in any future wage rises.

12.1.11 A reasonable refusal of redeployment will not necessarily exclude an employee from a redundancy or retrenchment payment. However, the Company is prepared to negotiate any cases that may arise where an employee believes that a proposed redeployment is, or would be, unreasonable. In the event of a failure to reach agreement on redeployment the provisions of the dispute resolution procedure of this Agreement will be followed.

12.1.12 A refusal of redeployment deemed reasonable under the terms of 12.1.11 hereof will be considered as compulsory redundancy.

12.2 Length of Service

Periods of short term employment will accumulate from year to year included for the purpose of calculating length of service under this Agreement. Provided that the break between periods of short term or casual employment does not exceed six (6) months. Leave negotiated between the Employer and the employee, or authorised Leave under the terms of the Award that exceed the 6-month period, will not be considered to have removed the entitlement for the accumulation of prior short term service in the calculation of length of service under this Agreement.

12.3 Redundancy/Retrenchment Payments (Weekly Employees Only)

12.3.1 For employees who seek voluntary redundancy/retrenchment: 3 weeks’ pay, plus 4 weeks payment for each completed year of service to a maximum of 52 weeks.

12.3.2 For employees compulsorily made redundant or retrenched by the Company: 3 weeks’ pay, plus 4 weeks payment for each completed year of service.

12.3.3 Any periods of short term service (refer subclause 12.2) and included as service under this Agreement shall be paid at the rate of 1.5 weeks per accumulated year of short term service. This adjustment recognises the 3% bonus paid for periods of short term employment.

12.3.4 In the event of compulsory redundancy or retrenchment any short term service under Subclause 12.2 and included as service under this Agreement shall be paid at the rate of 2.5 weeks per accumulated year of short term service. This adjustment recognises the 3% bonus paid for periods of short term employment.

12.4 Other Entitlements

In addition to the items above, the following payments will be made:

a) Payment of unused Personal/Carer’s Leave;

b) Payment of the relevant loading on pro-rata Annual leave;

c) Payment of Public Holidays falling within one month of the date of termination;

d) Pro-Rata Long Service payment after 5 years of weekly service;

e) The appropriate provisions of the Superannuation Plan under the terms of the Trust deed in relation to retrenchment will be applied to Members;

f) Two days’ leave with pay to seek alternative employment. Proof of interviews required prior to payment;

g) Employees retrenched will be given the opportunity of re-engagement when positions become available in the future. All service for seniority on the casual list will apply from the date of re-employment. Service before the retrenchment date will not apply for seniority on the casual list;

h) Outplacement services tailored to individual needs.

[5] McCain contended that clause 12 does not, and cannot, apply to the circumstances of the employees’ whose jobs in potato receival are redundant because no reduction in the size of the workforce will occur because of that redundancy situation.

[6] The key contention of McCain is that both clause 12.1.2 and 12.1.3 are only triggered to operate where McCain “is required to reduce the size of the workforce” because of a redundancy situation. If a redundancy or retrenchment occurs and McCain can deal with that situation without there being a requirement to reduce the size of the work force then McCain contended that clause 12 cannot apply.

[7] In the circumstances of the redundancies occurring in potato receival McCain intends to redeploy the employees who were working in potato receival into vacancies which exist in other areas of the Ballarat facility. As a result of the jobs in potato receival being declared to be redundant there is no need to reduce the size of the workforce at Ballarat given that the size of the workforce will not change when the potato receival employees are redeployed into jobs elsewhere in the Ballarat facility.

[8] The key contention of the AMWU is that clause 12 is specifically designed to deal with the issue of redeployment flowing from the decision of McCain to make redundant the jobs of the potato receival employees. This is especially so when the potato receival employees are being offered redeployment into work which is unsuitable both in relation to the hours of work and the nature of the work.

[9] The only issue for the Commission to determine at this time is whether the subject matter of the dispute falls within the matters dealt with by clause 12 as contended by the AMWU or whether the subject matter of the dispute falls outside the operation of clause 12, in which case clause 12 has no work to do in relation to the matter in dispute, as contended by McCain. The two propositions are the two sides of the same coin. Resolution of the issue in dispute does require determination of the meaning of clause 12 of the Agreement.

[10] The proper approach to the interpretation of enterprise agreements was spelt out by a Full Bench in AMIEU v Golden Cockerel P/L as follows:

“[41] From the foregoing, the following principles may be distilled:

1. The AI Act does not apply to the construction of an enterprise agreement made under the Act.

2. In construing an enterprise agreement it is first necessary to determine whether an agreement has a plain meaning or contains an ambiguity.

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

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

5. 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 of the agreement.

6. Admissible evidence of the surrounding circumstances is evidence of the objective framework of fact and will include:

(a) 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;
(b) notorious facts of which knowledge is to be presumed;
(c) evidence of matters in common contemplation and constituting a common assumption.

7. The resolution of a disputed construction of an agreement will turn on the language of the Agreement understood having regard to its context and purpose.

8. Context might appear from:

(a) the text of the agreement viewed as a whole;
(b) the disputed provision’s place and arrangement in the agreement;
(c) the legislative context under which the agreement was made and in which it operates.

9. Where the common intention of the parties is sought to be identified, regard is not to be had to the subjective intentions or expectations of the parties. A common intention is 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.

10. 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.” 1

[11] In the present matter both parties agreed to a common approach to have this initial issue determined. A Statement of Agreed Facts was filed by both parties. Limited witness evidence was relied on by both parties. None of the witness evidence was directly relevant to the determination of the meaning of the terms of the Agreement. Neither party sought to put anything to the Commission which would fall within the sixth principle in Golden Cockerel.

[12] Any resolution of the present matter must have regard to the structure of clause 12.1 of the Agreement. The following observations on the structure of clause 12.1 of the Agreement are relevant.

[13] Sub-clause 12.1.1 is not part of the process for dealing with redundancy.

[14] Sub-clause 12.1.2 operates separately from the remaining sub-clauses of clause 12.1.

[15] Sub-clauses 12.1.3 to 12.1.12 provide a process which operates in addition to the separate operation of sub-clause 12.1.2.

[16] Both sub-clauses 12.1.2 and 12.1.3 only operate if McCain is required to reduce the size of the workforce. What is meant by “required” in the context of sub-clauses 12.1.2 and 12.1.3 needs to be determined. The word ‘required’ carries with it some sense of necessity or need. In the context of clause 12 the word ‘required’ cannot be meant to include the concept of obligation or command as no command is given and no obligation is imposed by the terms of the Agreement or any other law or instrument which would command or oblige McCain to reduce the size of its workforce.

[17] The term “the workforce” in each of sub-clauses 12.1.2 and 12.1.3 is not defined. I note that Gregory C dealt with a dispute involving the similarly worded provision in the McCain Foods (Aust) Pty Ltd Tasmanian Enterprise Union Collective Agreement 2010 (Tasmanian Agreement) and determined that the workforce to be considered for the purposes of a clause such as clause 12 was the total workforce at the facility. 2 I agree with the conclusion reached by Gregory C that the “workforce” to be considered in the present matter is the total workforce at the Ballarat facility.

[18] There is nothing in either of sub-clauses 12.1.2 or 12.1.3 which indicates or sets a temporal link between the requirement to reduce the size of the workforce and the redundancy situation which exists.

[19] The presence of a specific temporal link between the requirement to reduce the size of the workforce and the redundancy or retrenchment would mean that unless that temporal link existed then the sub-clauses would not be able to operate. However, where there is no specific temporal link between the requirement to reduce the size of the workforce and the redundancy or retrenchment then any reasonable temporal link would appear to satisfy the requirements of the sub-clause.

[20] The approach of Gregory C in relation to the similarly worded Tasmanian Agreement was not to consider any temporal link but rather to consider the totality of the case.

“[58] The words in Clause 1 of Appendix 3 simply make reference to a situation where McCains is “required to reduce the size of the workforce.” These words are not qualified in any way by, for example, limiting the reduction in workforce size by reference to a reduction in one part of the plant only, or to a discrete section of it. I have also reviewed each of the other provisions in the Agreement and can find nothing which assists in interpreting the words in Clause 1 of Appendix 3. I am accordingly satisfied, based on their plain and ordinary meaning, that the words should be interpreted as referring to a requirement to reduce the size of the total workforce at the Smithton plant, and not just to a part or discrete section of it. I am further satisfied the changes in the boiler room and the reduction in manning associated with those changes do not, of themselves, mean McCains has been required to reduce its workforce numbers, given the associated reorganisation of work proposed

[59] However, I am also satisfied that this is not the end of the matter. McCains should not be allowed to avoid obligations, which might otherwise arise through a requirement to reduce the size of its workforce, simply because it puts forward a reorganisation or redeployment proposal. In circumstances where it proposes to avoid a reduction in the size of the workforce by reorganising the work, so that reductions in manning in one area of the plant are offset by reorganising those employees to work in another area, it is legitimate to review whether that is appropriate, in all the circumstances, or simply a device to avoid obligations that might otherwise apply. For example, if the Company proposed to reorganise the work of the Boiler/Refrigeration Attendants so that for sixty percent of their rostered shifts they were required to work in entry level, unskilled roles and receive half their previous salary level then there would clearly be a real issue about whether the Company was entitled to reorganise the work in this way.”

[21] Sub-clause 12.1.3 contains a solidus separating the words “redundancy” and “retrenchment” and the effect of the solidus needs to be determined.

[22] A solidus is used to denote alternatives and as such sub-clause 12.1.3 would provide for two separate alternatives. The sub-clause should read as two separate provisions with one provision dealing with the circumstance where McCain was required to reduce the workforce size through redundancy and the second provision dealing with the circumstance where McCain was required to reduce the workforce size through retrenchment.

[23] If the primary contention of McCain is correct, namely that sub-clauses 12.1.2 to 12.1.12 have no application in the present matter because McCain is not required to reduce the size of the workforce, then it is necessary to examine whether clause 12, without sub-clauses 12.1.2 to 12.1.12, could possibly apply to the redundancy of the jobs in potato receival. The possible applicable provisions of clause 12 would read as follows:

12. REDUNDANCY

12.1 General

12.1.1 Redundancy occurs when an employer decides that the employer no longer wishes the job the employee has been doing done by anyone and this is not due to the ordinary and customary turnover of labour.

12.2 Length of Service

Periods of short term employment will accumulate from year to year included for the purpose of calculating length of service under this Agreement. Provided that the break between periods of short term or casual employment does not exceed six (6) months. Leave negotiated between the Employer and the employee, or authorised Leave under the terms of the Award that exceed the 6-month period, will not be considered to have removed the entitlement for the accumulation of prior short term service in the calculation of length of service under this Agreement.

12.3 Redundancy/Retrenchment Payments (Weekly Employees Only)

12.3.1 For employees who seek voluntary redundancy/retrenchment: 3 weeks’ pay, plus 4 weeks payment for each completed year of service to a maximum of 52 weeks.

12.3.2 For employees compulsorily made redundant or retrenched by the Company: 3 weeks’ pay, plus 4 weeks payment for each completed year of service.

12.3.3 Any periods of short term service (refer subclause 12.2) and included as service under this Agreement shall be paid at the rate of 1.5 weeks per accumulated year of short term service. This adjustment recognises the 3% bonus paid for periods of short term employment.

12.3.4 In the event of compulsory redundancy or retrenchment any short term service under Subclause 12.2 and included as service under this Agreement shall be paid at the rate of 2.5 weeks per accumulated year of short term service. This adjustment recognises the 3% bonus paid for periods of short term employment.

12.4 Other Entitlements

In addition to the items above, the following payments will be made:

a) Payment of unused Personal/Carer’s Leave;

b) Payment of the relevant loading on pro-rata Annual leave;

c) Payment of Public Holidays falling within one month of the date of termination;

d) Pro-Rata Long Service payment after 5 years of weekly service;

e) The appropriate provisions of the Superannuation Plan under the terms of the Trust deed in relation to retrenchment will be applied to Members;

f) Two days’ leave with pay to seek alternative employment. Proof of interviews required prior to payment;

g) Employees retrenched will be given the opportunity of re-engagement when positions become available in the future. All service for seniority on the casual list will apply from the date of re-employment. Service before the retrenchment date will not apply for seniority on the casual list;

h) Outplacement services tailored to individual needs.

[24] Giving effect to the plain and ordinary meaning of the words in the applicable provisions of clause 12, without sub-clauses 12.1.2 to 12.1.12, would appear to lead to the following application of clause 12.

[25] Firstly, clause 12.1.1 defines what is meant by a redundancy. The agreed facts in the present matter suggest that a redundancy has occurred and that it is a compulsory redundancy.

[26] Secondly, clause 12.3 provides for payments to be made to weekly employees who have either sought voluntary redundancy or voluntary retrenchment or who have been compulsorily made redundant or compulsorily retrenched. In circumstances such as the present where compulsory redundancy has occurred then it would appear that the entitlement under clause 12.3.2 is available to the employees who have compulsorily been made redundant.

[27] Thirdly, employees who have compulsorily been made redundant are entitled to the additional benefits of clause 12.4.

[28] Fourthly, the ability of an employee to access the payments under clause 12.3.2 and the benefits under clause 12.4 and the obligation of McCain to make such payments is triggered solely by a redundancy occurring within the meaning of clause 12.1.1. There is nothing in clause 12 which would require McCain to offer alternative employment and there is nothing in clause 12 which would require a redundant employee to consider any offer of alternative employment. Further there is nothing in clause 12 which would require McCain and the redundant employees to consult with each other.

[29] On a plain reading of clause 12 (without sub-clauses 12.1.2 to 12.1.12) the fact that the clause deals with redundancy and leads to payment to redundant employees then it would appear that McCain may not be able to rely on other general terms of the Agreement in order to avoid the operation of clause 12. This would require further consideration as to whether the specific terms of clause 12 override other general provisions of the Agreement.

.

[30] Applying the plain meaning of the words of clause 12 (without sub-clauses 12.1.2 to 12.1.12) would lead to absurd outcomes.

[31] The first absurdity is that clause 12.3 speaks of two classes of employees: employees who are redundant and employees who are retrenched. The obvious absurdity is that employees are not made redundant, only jobs are made redundant. The second absurdity is that a redundant employee is entitled to a payment even if the employment relationship has not ended and does not end. The third absurdity is that the payments to be paid under clauses 12.3 and 12.4 occurs without there being any requirement for McCain or the relevant employees to meet and confer or consult or discuss the redundancy or retrenchment or any alternatives to redundancy or retrenchment.

[32] The absurd results which would flow from applying clause 12 (without sub-clauses 12.1.2 to 12.1.12) tell very strongly against giving the words of clause 12 their plain and ordinary meaning.

[33] In making a submission in relation to the use of a solidus in clause 12.1.3, McCain contended that “redundancy/retrenchment” meant ‘redundancy and retrenchment’. McCain further contended that the parties intended to use the terms ‘redundancy’ and ‘retrenchment’ interchangeably and that despite the definition of ‘redundancy’ in clause 12.1.1 that the parties did not intend to use the word ‘redundancy’ in the remainder of the clause in a technical way. This contention of McCain clearly avoids some of the absurdities that flow from treating ‘redundancy’ and ‘retrenchment’ as separate concepts in clauses 12.3 and 12.4 but it simply creates its own problems. If “redundancy/retrenchment” in clause 12.1.3 means ‘redundancy and retrenchment’ then sub-clause 12.1.3 only comes into play when retrenchment occurs and this normally means that the employment relationship has ended. How then could there be a discussion about or utilisation of redeployment under sub-clause 12.1.9 and 12.1.11 if redundancy and retrenchment have occurred? I deal with this issue later.

[34] McCain’s contention that sub-clauses 12.1.2 and 12.1.3 cannot be triggered in the present matter because there is no requirement on McCain to reduce the size of its workforce only makes sense by applying a narrow dictionary definition of “workforce” and by tying any requirement to reduce the size of the workforce to the time that the redundancy or redeployment occurs. McCain contended that “workforce” means: the total of all those engaged in employment. 3 McCain’s case treats the “workforce” as comprising the total number of persons employed at the Ballarat facility at the time that McCain intends to redeploy the employees from potato receival into other areas of the Ballarat facility. Other dictionary definitions of “workforce” include persons available for work but not in work.

[35] There is always a difficulty using a dictionary definition to define the meaning of a word used. Dictionary definitions only really work if the drafters of the agreement agreed when drafting that the words would have the meanings given by a particular dictionary. That is not the case with this Agreement.

[36] It is apposite to keep in mind the caution of Mason P (as he then was) in House of Peace P/L v Bankstown City Council 4:

“The role of dictionaries

25 The primary judge's use of the dictionaries is criticised by the appellants as reflecting a search for a majority position and a preference for the narrower, less inclusive definitions over the broader if less generally used meanings.

26 It has been said that "words are only pictures of ideas on paper" (Isaacs J in Fell v Fell [1922] HCA 55; (1922) 31 CLR 268 at 276, citing Wilmot CJ in Dodson v Grew [1767] EngR 23; (1767) Wilm 272 at 278[1767] EngR 23; , 97 ER 106 at 108). Jackson J once remarked that "dictionaries are the last resort of the baffled judge" (Jordan v De George [1951] USSC 76; 341 US 223, 234 (1951)).

27 Nevertheless, dictionaries are frequently used, and this approach to statutory interpretation has support from the highest authority (see, eg State Chamber of Commerce and Industry v Commonwealth [1987] HCA 38; (1987) 163 CLR 329 at 348). Few judges emulate Lord Wilberforce, who never used dictionaries for the purpose of determining the common understanding of words and shut his ears if they were referred to in court (see Bennion, Statutory Interpretation 3rd ed, 1997 p946).

28 A dictionary may offer a reasonably authoritative source for describing the range of meanings of a word, including obsolete meanings. Dictionaries recognise that usage varies from time to time and place to place. However, they do not speak with one voice, even if published relatively concurrently. They can illustrate usage in context, but can never enter the particular interpretative task confronting a person required to construe a particular document for a particular purpose. I agree with the following remarks of Judge Randolph of the United States Court of Appeals for the District of Columbia Circuit ("Dictionaries, Plain Meaning, and Context in Statutory Interpretation" (1994) 17 Harv Jo L PP 71 at 72):

...citing ... dictionaries creates a sort of optical illusion, conveying the existence of certainty - or "plainness" - when appearance may be all there is. Lexicographers define words. Words in the definition are defined by more words, as are those words. The trail may be endless; sometimes, it is circular. Using a dictionary definition simply pushes the problem back.

29 The limitations of dictionaries are discussed with magisterial clarity by Mahoney JA in Provincial Insurance Australia Pty Ltd v Consolidated Wood Products Pty Ltd (1971) 25 NSWLR 541 at 560-1. Because the passage is lengthy I do not set it out. However, I respectfully agree with what his Honour has written there.

30 The task in hand is not a philosophical, linguistic or etymological exercise probing the inner or outer limits of "church" in 1954 Australian usage. In the end it is a search for the meaning of a particular document issued in a particular context.”

[37] In the present matter there are two separate and similar (but not identical) concepts which need to be interpreted. In clause 12.1.2 of the Agreement the words used are: “In the event that the Company is required to reduce the size of the workforce”. In clause 12.1.3 of the Agreement the words used are: “Should the Company be required to reduce the workforce size through redundancy/retrenchment”. Each provision sits within clause 12 which is designed to specifically deal with redundancies occurring at the Ballarat facility. Clause 12 sits within an enterprise agreement which provides for rights and obligations on both employees and McCain which are additional to those which arise under any modern award or the Fair Work Act. This is the context in which meaning is to be given to the word “workforce”.

[38] As Gregory C made clear in relation to a similarly worded provision in the Tasmanian Agreement:

[59] …..McCains should not be allowed to avoid obligations, which might otherwise arise through a requirement to reduce the size of its workforce, simply because it puts forward a reorganisation or redeployment proposal. In circumstances where it proposes to avoid a reduction in the size of the workforce by reorganising the work, so that reductions in manning in one area of the plant are offset by reorganising those employees to work in another area, it is legitimate to review whether that is appropriate, in all the circumstances, or simply a device to avoid obligations that might otherwise apply.

[39] Whilst the decision of Gregory C predates the Full Bench decision in Golden Cockerel his approach at para [59] of his decision is consistent with principle seven in Golden Cockerel:

“7. The resolution of a disputed construction of an agreement will turn on the language of the Agreement understood having regard to its context and purpose.”

[40] In the context of the Agreement it is difficult to see how clauses 12.1.2 and 12.1.3 could be limited to a reduction in the actual number of employees at the time of the redundancy arising. The context in which clause 12 operates strongly leads to a conclusion that the reference to workforce is to the number of persons needed by McCain at its Ballarat facility. In that sense the number of persons needed at the Ballarat facility at the time the decision was made to make jobs in potato receival redundant was X plus Y - with X being the number of employees needed to fill the jobs required to be performed at the Ballarat facility excluding potato receival and the Y representing the number of jobs in potato receival. After potato receival jobs are removed then the total number of persons needed at the Ballarat facility will be X. Therefore there has been a reduction of Y in the number of persons needed at the Ballarat facility because of the redundancy of the jobs in potato receival.

[41] Not only does the above approach to the word “workforce” provide a contextually relevant meaning to the word “workforce”, there is nothing in this approach which would strain the ordinary meaning of the word “workforce”.

[42] McCain contend that the words ‘redundancy’ and ‘retrenchment’ are to be used interchangeably. In relation to the word ‘redundancy’ McCain contend that “(w)hile the definition of redundancy in sub-clause 12.1.1 does not refer to the termination of employment, it is evident from the use of the term “redundancy” in the remainder of the clause that the parties did not intend to use the term in a technical way.” Unfortunately it is not “evident” from the terms of clause 12 that this contention is true. The contention does bring into question the meaning of ‘redundancy’ and ‘retrenchment’. In the Fair Work Act the concept of ‘redundancy pay’ in s.119 to s.122 is dependent upon there being a termination of employment. Similarly the concept of ‘genuine redundancy’ in s.388 only arises in the context of termination of employment. However the use of the concept of ‘redundancy’ in those provisions of the Fair Work Act has to be understood in the context of the provisions, with ‘redundancy pay’ being part of the NES and ‘genuine redundancy’ being part of the Unfair Dismissal provisions. In the Agreement ‘redundancy’ has been defined so that it does not contain any reference to termination of the employment relationship. The word “retrenchment” is not defined in the Agreement. Often ‘retrenchment’ is used in conjunction with ‘redundancy’ to denote two very separate parts of a single process. ‘Redundancy’ referring to the decision of the employer that it no longer wants the job being done by an employee to be done by anyone and ‘retrenchment’ referring to the decision of the employer to terminate the employment of the employee. When used in this sense ‘retrenchment’ occurs because of ‘redundancy’. However the word ‘retrenchment’ can also have the meaning which does not require the termination of an employment relationship. So much is clear from various dictionary definitions.

[43] To give meaning to the terms ‘redundancy’ and ‘retrenchment’ which have regard to the context and purpose of clause 12 requires that the terms be given different meanings in different provisions within clause 12.

[44] I concur with the submission of McCain that the last sentence in sub-clause 12.1.3 which provides that: “Any employee being compulsorily retrenched or compulsorily made redundant will, under this Agreement, receive 4 weeks’ notice of termination” only makes sense if ‘redundancy’ and ‘retrenchment’ are equated with termination of employment. However, as previously discussed, “redundancy/retrenchment” as used in the first sentence of sub-clause 12.1.3 must mean ‘redundancy or retrenchment’ simply so that sub-clauses 12.1.9 to 12.1.12 can operate before termination of employment occurs.

[45] The foregoing discussion leads to the conclusion that the matter in dispute is a matter which falls within the operation of clause 12 of the Agreement. To the extent that the issues in dispute raise questions as to the application of sub-clause 12.1 then sub-clause 12.1 is enlivened in this matter.

[46] The determination of the jurisdictional issue provides both parties with an opportunity of having further discussions between themselves and involving the relevant employees to see if the issues in dispute can be satisfactorily resolved by agreement. McCain clearly should be given a proper opportunity to consider this decision before any further action is taken in relation to the matter in dispute. I will conduct a brief telephone Mention in this matter on Friday 6 May 2016 so as to obtain the views of the parties as to further progress of the application in this matter.

COMMISSIONER

Appearances:

Mr D. Vroland for the “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU).

Mr D. Fleeton for McCain Foods Australia Limited.

Hearing details:

2016.

Melbourne:

April 21.

 1   [2014] FWCFB 7447 at [41].

 2   [2014] FWC 1923.

 3   The Macquarie Dictionary, Federation Edition M-3.

 4 [2000] NSWCA 44.

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