“Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers' Union (AMWU) v McCain Foods (Aust) Pty Ltd
[2015] FWC 1772
•16 MARCH 2015
| [2015] FWC 1772 |
| 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
(C2015/1404)
DEPUTY PRESIDENT KOVACIC | MELBOURNE, 16 MARCH 2015 |
Alleged dispute regarding implementation of continuous shift roster - facilitative provisions in award and agreement.
[1] On 21 January 2015 the ‘Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union’ known as the Australia Manufacturing Workers’ Union (AMWU) lodged an application regarding a dispute concerning the proposed implementation of a 7 day/12 hour continuous shift roster in part of McCain Foods (Aust) Pty. Ltd. (McCain - the Respondent) Ballarat plant, i.e. Potato Products production and the put away section of the Cold Store.
[2] The application was made under s.739 of the Fair Work Act 2009 (the Act) and in accordance with the dispute resolution process of the McCain Foods (Aust) Pty. Ltd. Ballarat Production Enterprise Agreement 2014 1 (the 2014 agreement) which was approved by the Fair Work Commission (the Commission) on 8 January 2015 and commenced operation on 15 January 2015.
[3] The dispute had been the subject of a previous application 2 by the AMWU under the previous enterprise agreement covering the Ballarat plant3 (the 2011 agreement). That dispute had been the subject of several conferences before the Commission but remained unresolved in mid-December 2014 when the parties requested that the Commission determine the dispute. It was agreed on 24 December 2014 that the AMWU would discontinue its original application and lodge a new application once the 2014 agreement had been approved by the Commission. This approach was proposed in circumstances where the AMWU was concerned that proceeding to determine the dispute in accordance with the expired but still operational 2011 agreement may expose its members to being in breach of that agreement.
[4] The dispute was heard on 30 January 2015.
[5] Mr David Vroland appeared for the AMWU and Mr Dominic Fleeton appeared with permission for McCain.
[6] Ms Angela McCarthy, an Organiser with the AMWU, and Mr James Plush, a fork lift driver in the Cold Store at the Ballarat plant, gave evidence for the AMWU. Mr Brian Neylon, McCain’s Human Resources Manager, and Mr Gavin Lett, McCain’s Manufacturing Services Manager Australia and New Zealand, gave evidence for McCain.
[7] For the reasons set out below, I find that:
(i) clauses 19.2 and 2.1.1 of the 2014 agreement govern the the introduction of 7 day/12 hour continuous shift roster; and
(ii) the meaning of the phrase “in the part of the enterprise concerned” in clause 19.2 and 2.1.1 of the 2014 agreement is the area in which McCain proposes to implement a 7 day/12 hour continuous shift roster. In this case that is Potato Products production and the put away section of the Cold Store.
Background
[8] In short, the dispute concerns whether employees working in the put away section of the Cold Store handling potato products should be separately balloted as to whether or not they agree to implement a 12 hour shift roster (as proposed by the AMWU) or, alternatively, should be balloted together with employees in Potato Products production (as proposed by McCain).
[9] In late 2013 McCain announced its intention to move to a 7 day/12 hour continuous shift roster in Potato Products production and the put away section of the Cold Store. McCain consulted the AMWU regarding the proposal. During those consultations it became clear that employees in the Cold Store were unlikely to agree to the proposal primarily for work/life reasons and because of concerns regarding health and well being.
[10] A proposal to move to 7 day/12 hour continuous shift roster was endorsed by production employees on 12 March 2014. The proposal was premised on the roster operating until 31 January 2015. The AMWU has undertaken to continue to work the roster pending the Commission’s decision in this matter.
[11] To date, workers in the put away section of the Cold Store have not been formally balloted by McCain on the 7 day/12 hour continuous shift roster arrangement.
[12] McCain wants to see the 7 day/12 hour continuous shift roster arrangement continue and be extended to the put away section of the Cold Store to enable it to meet customer demand as cost efficiently as possible.
The Relevant Provisions of the 2014 agreement and Incorporated Award
[13] A number of provisions of the 2014 agreement and incorporated modern award are central to this dispute. The relevant provisions of the 2014 agreement are set out below.
“7. RELATIONSHIP BETWEEN AGREEMENT AND AWARD, AND OTHER INSTRUMENTS
7.1 The terms of the Food, Beverage and Tobacco Manufacturing Award 2010 (as varied from time to time) or its successor Award/s, are incorporated into this Agreement, however the Company is committed to maintaining applicable Award and above-Award conditions enjoyed by the employees covered by this Agreement.
7.2 If an incorporated Award term (to the extent that the incorporated Award applies to a particular employee covered by this Agreement) is inconsistent with an express term of this Agreement, the express term of the Agreement shall prevail over the incorporated Award term, to the extent of the inconsistency.
7.3 Unless expressly provided for in this Agreement, any Facilitative Provisions (refer Clause 8 of the Award) or Award Flexibility terms (refer Clause 7 of the Award) shall not be used.
7.4 In this Agreement references to the Award shall mean ‘Award as incorporates into the Agreement’ unless context requires otherwise.
7.5 Upon incorporating Award terms into the Agreement, the incorporated Award terms are to be read as altered with the appropriate changes, to make them provisions of the Agreement rather than provisions of the Award, eg. the loading, penalties and allowances in the Award applies to the rates of pay due under the Agreement, not the Award rate.
7.6 Existing custom and practice payments and conditions of employment will continue to apply unless varied by this Agreement. Further, there will be no reduction in wages or conditions for the life of this Agreement.”
“19. HOURS OF WORK
19.2 7-Day (Continuous) Roster
Prior to the implementation of any 7-day continuous roster (which may either replace, or run in conjunction with current roster arrangements), the Company shall obtain the agreement of a majority of the employees in the part of the enterprise concerned, for the roster to be implemented.”
“APPENDIX 1 – 7-DAY CONTINUOUS SHIFT ARRANGEMENT
1. Title
This Agreement shall be known as the McCain Foods Ballarat Production Employees 7-Day Continuous Shift Roster Agreement 2014.
2. Commencement of 7-Day Continuous Shift Roster operation
2.1 Notice of Commencement
2.1.1 Prior to the implementation of a 7-day continuous roster, the Company shall obtain the agreement of a majority of the employees in the part of the enterprise concerned, for such a roster to be implemented.
2.1.2 After agreement has been reached with the majority of affected employees, the Company shall provide at least one (1) month’s written notice of the commencement of the 7-day continuous shift operation.”
[14] As the agreement incorporates the Food, Beverage and Tobacco Manufacturing Award 2010 (the Award), set out below are the relevant provisions of the Award.
“8. Facilitative provisions
8.1 Agreement to vary award provisions
(a) This award also contains facilitative provisions which allow agreement between an employer and employees on how specific award provisions are to apply at the workplace or section or sections of it. The facilitative provisions are identified in clauses 8.2, 8.3 and 8.4.
(b) The specific award provisions establish both the standard award condition and the framework within which agreement can be reached as to how the particular provisions should be applied in practice. Facilitative provisions are not to be used as a device to avoid award obligations nor should they result in unfairness to an employee or employees covered by this award.
8.2 Facilitation by individual agreement
...
8.3 Facilitation by majority or individual agreement
...
8.4 Facilitation by majority agreement
(a) The following facilitative provisions may only be utilised by agreement between the employer and the majority of employees in the workplace or a section or sections of it:
Clause number | Provision |
30.3(c) | Ordinary hours of work, continuous shiftworkers |
30.4(b) | Ordinary hours of work, non-continuous shiftworkers |
30.5(c) | 12 hour shifts |
31.5(d) | Public holiday shifts |
34.2 | Conversion of annual leave to hourly entitlement |
34.9(g) | Annual close down |
(b) Where agreement is reached with the majority of employees in the workplace or a section or sections of it to implement a facilitative provision in clause 8.4(a), that agreement binds all such employees provided the agreement reached is kept by the employer as a time and wages record.
(c) Additional safeguard
(i) An additional safeguard applies to:
Clause number | Provision |
28 | Payment of wages |
30.3(c) | Ordinary hours of work, continuous shiftworkers |
30.4(b) | Ordinary hours of work, non-continuous shiftworkers |
(ii) The additional safeguard requires that the unions which have members employed at an enterprise covered by this award must be informed by the employer of the intention to use the facilitative provision and be given a reasonable opportunity to participate in the negotiations regarding its use. Union involvement in this process does not mean that the consent of the union is required prior to the introduction of agreed facilitative arrangements at the enterprise.
8.5 Majority vote at the initiation of the employer
A vote of employees in the workplace or a section or sections of it which is taken in accordance with clauses 8.3(a) and 8.4 to determine if there is majority employee support for the implementation of a facilitative provision, is of no effect unless taken with the agreement of the employer.
30.5 Methods of arranging ordinary working hours
...
(c) By agreement between an employer and the majority of employees in the enterprise or part of the enterprise concerned, 12 hour days or shifts may be introduced subject to:
(i) proper health monitoring procedures being introduced;
(ii) suitable roster arrangements being made;
(iii) proper supervision being provided;
(iv) adequate breaks being provided; and
(v) a trial or review process being jointly implemented by the employer and the employees or their representatives.”
The AMWU’s Submissions
[15] The AMWU submitted that it appeared to be common ground between the parties that a ballot of employees was required before McCain could proceed to implement its proposed roster changes. The ballot is necessary to determine whether or not a majority of employees agreed to implement the roster.
[16] The AMWU further submitted that any ballot of employees should occur in accordance with the relevant Award provisions which are incorporated into the 2014 agreement. Relying on those provisions, the AMWU submitted that the Cold Store should be identified as a separate part or section of McCain’s Ballarat plant. The AMWU submitted that a separate ballot of Cold Store employees was therefore required.
[17] The AMWU also submitted that the term “part of the enterprise” where it appears in the 2014 agreement and incorporated Award provisions should be interpreted in accordance with the established principles relating to the interpretation of enterprise agreements. The AMWU relied on The Australian Meat Industry Employees Union v Golden Cockerel Pty Ltd 4 (Golden Cockerel) in this regard.
[18] The AMWU also drew the Commission’s attention to the definitions in the Act of the terms “enterprise” and “a part of a single business”. Section 12 of the Act defines the term “enterprise” as follows:
“enterprise means a business, activity, project or undertaking.”
[19] Section 168A(6) of the Act defines “a part of a single business” as follows:
“168A Modern enterprise awards
(6) A part of a single enterprise includes, for example:
(a) a geographically distinct part of the single enterprise; or
(b) a distinct operational or organisational unit within the single enterprise.
[20] As to the outcome sought, the AMWU sought a determination that the Cold Store area be recognised as a separate part or section of McCain’s Ballarat plant. The AMWU further submitted the area be separately balloted on the 7 day/12 hour continuous shift roster with a majority of employees in the area required to support such a roster arrangement through the ballot process before the change can be implemented by McCain.
[21] In his closing submissions, Mr Vroland:
(i) highlighted a practical issue of determining who would vote given that Cold Store employees rotate through the put away section 5;
(ii) also highlighted a number of differences between Potato Products production and the Cold Store, including functional differences, the geographic separation between these areas and the different operational environment 6; and
(iii) acknowledged that there was an interrelationship between the two areas 7.
The AMWU’s Evidence
[22] Ms McCarthy’ witness statement provided an overview of the current dispute and the various discussions which had occurred between the parties regarding the introduction of a 7 day/12 hour continuous shift roster. In addition. Ms McCarthy attested that based on her experience and knowledge of McCain’s Ballarat operations that she had formed the view that put away work was a separate part of the business to production for a number of reasons. Those reasons included that Cold Store employees do not participate in the production process in any way, the physical location of the Cold Store is separate from production, the Cold Store has a different management and supervisory structure, the Cold Store has separate designated work groups for work, health and safety purposes and Cold Store employees do not receive a multi-skilling allowance 8.
[23] Under cross examination Ms McCarthy disputed key aspects of Mr Neylon’s and Mr Lett’s evidence on behalf of McCain. Key aspects of Ms McCarthy’s evidence under cross examination were that:
(i) clause 19.2 of the 2014 agreement did not make specific mention of put away employees 9;
(ii) if production work was not occurring then there was no put away work to perform 10;
(iii) McCain’s position on whether or not it wanted Cold Store employees to work the 7 day/12 hour continuous shift roster changed on a number of occasions in early 2014 11;
(iv) the AMWU was very clear in discussing the 7 day/12 hour continuous shift roster issue that implementation should require majority agreement from the area affected 12; and
(v) she thought Mr Neylon’s understanding was that Cold Store employees would have a separate majority vote on the 7 day/12 hour continuous shift roster issue 13.
[24] Mr Plush in his witness statement provided a comprehensive overview of the physical layout of McCain’s Ballarat site and highlighted key differences between the Cold Store and production areas to assist in determining whether the Cold Store is separate from the production area. Some of the factors highlighted by Mr Plush include the requirements regarding movement between the production and Cold Store areas, the completely different job roles of employees in the two areas, the different management and supervisory structure in Cold Store, that Cold Store does not operate to the same schedule as production (e.g. the two areas have different rostered day off (RDO) schedules) and production employees receive a multi-skilling allowance whereas Cold Store employees do not 14. For all of these reasons, Mr Plush attested that in his experience Cold Store had always been seen as a separate part of the business from production.
[25] Under cross examination Mr Plush disputed much of Mr Lett’s witness statement, particularly Mr Lett’s evidence regarding working arrangements in the Cold Store, and reiterated what he saw as some of the key differences between Potato Products production and the Cold Store. Beyond that, key aspects of his evidence under cross examination were that:
(i) put away employees do not stop work if production stops, citing a range of other tasks performed by put away employees such as cleaning and rotating product among others 15;
(ii) less than 25 per cent of the Cold Store crew on day and afternoon shift are involved in put away work, though the night shift crew only do put away work (unless production ceases when they are expected to do other Cold Store work) 16;
(iii) in respect of RDOs for put away employees, if production was running put away employees were expected to come in and work if they were rostered to do the line for that week 17; and
(iv) he considered that McCain had not done enough research into the detrimental effects on Cold Store workers of 12 hour shifts 18.
McCain’s Submissions
[26] McCain submitted that the introduction of a 7 day/12 hour continuous shift roster was governed by clause 19.2 and clause 2.1.1 of Appendix 1 of the 2014 agreement (hereafter referred to as clauses 19.2 and 2.1.1), adding that clause 30.5 of the Award did not apply by virtue of clause 7.3 of the 2014 agreement.
[27] McCain further submitted that put away work was an integral component of Potato Products production and that as McCain’s proposal did not apply to the entire Cold Store function it was not necessary for the Commission to determine whether the Cold Store function in its entirety is a separate part of McCain’s enterprise. Further, Potato Products production at McCain’s Ballarat plant was identifiable by reference to an objective criterion - that work needs to be performed to ensure that McCain can produce hash brown and French fry products at the site on a 24/7 basis.
[28] As to the construction of the phrase “part of the enterprise concerned” in clauses 19.2 and 2.1.1, relying on Kucks v CSR Limited 19, McCain submitted that a narrow pedantic approach to construction should be avoided and that the words must not be interpreted in a vacuum divorced from industrial realities. To that end, the construction of the phrase must begin with a consideration of the ordinary meaning of the words, having regard to the context and purpose of the provisions.
[29] As the words “enterprise” and “part” are not defined in the agreement, McCain submitted that the Ballarat plant met the definition of enterprise in the Act and that the ordinary meaning of part was, in theory, “anything less than the whole” 20. McCain further submitted that the context in which the phrase “in the part of the enterprise concerned” appeared in clauses 19.2 and 2.1.1 was referring to an area decided upon by McCain, with this determination a clear exercise of managerial prerogative.
[30] McCain submitted that its designation of Potato Products production (including put away work) as part of its Ballarat plant for rostering purposes was neither unjust or unreasonable inter alia because:
(i) it was based on objective considerations;
(ii) put away work was integral to Potato Products production and has historically been regarded as such;
(iii) the transition of Potato Products production from a 24/5 roster to a 24/7 roster was only possible because interim arrangements for put away work to occur on weekends were put in place; and
(iv) the need for a 24/7 roster in Potato Products production in 2015 was based on an increase in production activity and McCain’s production forecast for 2015. 21
[31] Beyond that, McCain disputed a number of aspects of the AMWU’s submissions, including the relevance of s.168A(6) of the Act in the context of the current dispute.
[32] McCain submitted that the Commission should determine that the introduction of a 7 day/12 hour continuous shift roster was governed by clauses 19.2 and 2.1.1 and that for the purposes of those provisions “the part of the enterprise concerned” was Potato Products production, including put away work.
[33] McCain concluded by submitting that:
(i) the AMWU’s submission that Cold Store is a separate part of the enterprise is narrow, pedantic and fails to pay any regard to the operational requirements of McCain’s production process of industrial reality 22;
(ii) while there were both differences and commonalities between Potato Products production and the Cold Store, this did not inhibit the Commission from finding that Potato Products production was “part of the enterprise concerned” for the purposes of clauses 19.2 and 2.1.1 23; and
(iii) as to the voting issue raised by the AMWU (see paragraph [21](i) above), McCain would cease to rotate Cold Store employees through the put away area 24.
McCain’s Evidence
[34] Mr Neylon’s witness statement 25 set out the background to the current dispute, outlining the discussions with the AMWU on the 7 day/12 hour continuous shift roster issue which resulted in the dispute being notified to the Commission. Mr Neylon also outlined discussions on the 7 day/12 hour continuous shift roster issue in the context of the negotiations which lead to the 2014 agreement. In this regard, Mr Neylon attested that he recalled Ms McCarthy saying early in the bargaining process words to the effect that the AMWU did not oppose the introduction of a seven day roster subject to it being approved by the majority of employees to whom the roster would apply. Mr Neylon also disputed Ms McCarthy’s and Mr Plush’s evidence that employees working in the Cold Store do not receive a multi-skilling allowance while other employees at the plant do. Specifically, Mr Neylon attested that McCain does not pay a multi-skilling allowance to any employees working at its Ballarat site26.
[35] Under cross examination Mr Neylon:
(i) disputed Ms McCarthy’s evidence that McCain’s position on 12 hour shifts for put away employees changed on a number of occasions in early 2014, stating that McCain’s view on the issue never changed 27;
(ii) acknowledged that put away or Cold Store had not been raised in the negotiations for the 2014 agreement 28;
(iii) could not explain how Ms McCarthy formed the understanding that put away employees would have a separate vote on the 7 day/12 hour continuous shift roster issue 29;
(iv) was unable to provide any documentary evidence to support his understanding of the phrase “in the part of the enterprise concerned” 30;
(v) acknowledged that McCain had entered into an arrangement with employees in the French Fry packing room, part of Potato Products production, regarding a multi-skilling pay rate 31;
(vi) disagreed that up until McCain sought to introduce the 7 day/12 hour continuous shift roster in the Cold Store it had always considered the Cold Store to be a separate part of the business, adding that the Cold Store employees were very closely linked with the production side 32; and
(vii) agreed that the Cold Store is contained in a separate geographical area and has its own Cold Store Manager 33.
[36] Mr Lett’s witness statement 34 provided an overview of the potato production process and Cold Store put away work. In that context Mr Lett attested that when he was Plant Manager at Ballarat (he was Plant Manager for over eight years until appointed to his current role in mid-January 2015) he would not commence production unless put away work could be performed35. Mr Lett also attested that it was necessary for potato production work to be performed in a 24/7 basis during 2015 as a result of sales forecasts, the volume of potatoes McCain is contracted to purchase and the production capacity of its three production facilities. As put away work was integral to the potato production process, McCain had in October 2014 issued a notice to employees, including put away employees, notifying them of its intention to operate a 24/7 continuous roster from February to December 2015.
[37] Mr Lett further outlined the move to a 24/7 production roster at the Ballarat plant, attesting that McCain had put in place temporary arrangements in the put away section to enable weekend work to occur. The arrangement, he stated, involved two 12 hour shifts (day and night) being worked on Saturdays and Sundays. These shifts were crewed by five existing Cold Store employees who volunteer to work weekends and the creation of one fixed-term position, with all weekend work performed by Cold Store employees paid at overtime rates. Mr Lett further attested that this interim arrangement was not feasible or efficient as it did not provide the certainty regarding securing weekend labour and it incurs additional labour costs of $250,000 when compared to the 7 day/12 hour continuous shift roster for put away employees 36. Mr Lett also disputed aspects of Ms McCarthy’s and Mr Plush’s witness statements.
[38] Under cross examination Mr Lett deferred to aspects of Mr Plush’s description of the working arrangements of put away employees. Other key aspects of Mr Lett’s evidence under cross examination were that:
(i) if production is not working there is no requirement for the put away section of the Cold Store to be functional, though there would be other elements of the Cold Store that would still work 37; and
(ii) the Cold Store was a distinct and separate part of the Potato Products building and has its own management structure for the day and afternoon shifts and its own budget 38.
The First Issue to be Determined
[39] The first issue which the Commission needs to determine is whether the introduction of a 7 day/12 hour continuous shift roster is governed by the Award provisions incorporated into the 2014 agreement or, alternatively, by clauses 19.2 and 2.1.1.
[40] As previously set out, clause 7.3 of the 2014 agreement states that “Unless expressly provided for in this Agreement, any Facilitative Provisions (refer Clause 8 of the Award) or Award Flexibility terms (refer Clause 7 of the Award) shall not be used.” Clause 8 of the Award deals with facilitative provisions, with clause 8.4 setting out those facilitative provisions which may only be utilised with the agreement of the majority of employees in the workplace or a section or sections of it. Clause 36.5(c) which deals with 12 hours shifts is one of a number of provisions specified in clause 8.4. There are no provisions in the 2014 agreement which enliven clause 8 of the Award.
[41] This supports a finding that the 2014 agreement governs the the introduction of 7 day/12 hour continuous shift roster.
[42] In his closing submissions, Mr Vroland submitted that the Award provisions should prevail because neither clause 19.2 nor clause 2.1.1 refer to 12 hours shifts whereas clause 36.5(c) of the Award does 39. While an examination of clause 19.2 shows that it does not mention the words “12 hours shift”, an examination of Appendix 1 to the 2014 agreement which deals with 7 Day Continuous Shift Arrangement shows that it incorporates a number of references to 12 hour shifts (see clauses 2.2 and 4.b) of Appendix 1). This is consistent with Ms McCarthy’s evidence that the focus of bargaining for the 2014 agreement on the 12 hour shift issue was on the terms and conditions attaching to such shifts and on the issue of majority agreement40 and Mr Neylon’s evidence that the 12 hour shift issue went hand in hand with the 7 day continuous roster arrangement41.
[43] This does not support a finding that the relevant Award provisions govern the introduction of a 7 day/12 hour continuous shift roster.
[44] Taking into account all of the above, I find that clauses 19.2 and 2.1.1 govern the the introduction of 7 day/12 hour continuous shift roster.
The Second Issue to be Determined
[45] The second issue which the Commission therefore needs to determine is the meaning of the phrase “in the part of the enterprise concerned” which appears in clauses 19.2 and 2.1.1.
[46] The principles relating to the interpretation of enterprise agreements are, as alluded to in the AMWU’s submissions, set out in Golden Cockerel. Below is the passage which sets out the key principles in this regard.
“[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.”
[47] Drawing on the second principle in Golden Cockerel, the Commission must first determine “whether an agreement has a plain meaning or contains an ambiguity.”
[48] Examining the phrase “in the part of the enterprise concerned” it is clear that the phrase is expressed in the singular and not the plural, i.e. it does not read “in the parts of the enterprise.” Further, the interpretation advocated by the AMWU effectively requires that the word “the” which appears before the word “part” in the phrase to be read to mean “each”. This reading of the phrase does not appear to be open solely on the face of the provision. This supports a finding that the phrase has a plain meaning, suggesting that Potato Products production and the put away section of the Cold Store should be considered as one electorate for the purposes of establishing whether or not a majority of employees agree to implement a 7 day/12 hour continuous shift roster.
[49] However, the phrase “in the part of the enterprise concerned” is susceptible to more than one meaning, as is evidenced by the divergent interpretations attributed to the phrase by the parties in this dispute. Further, based on the evidence before the Commission, I am satisfied that the parties did not discuss let alone come to a common understanding of the meaning of the phrase “in the part of the enterprise concerned” in the negotiations for the 2014 agreement.
[50] The AMWU submitted that in the absence of a common understanding context is entirely relevant in determining the meaning of the phrase “in the part of the enterprise concerned”, referring to Principle 8 from Golden Cockerel. Specifically the AMWU submitted that points (a) and (c) of Principle 8 have particular work to do in the context of this dispute. I agree that clause (a) which cites “the text of the agreement viewed as a whole” is particularly relevant.
[51] In this regard there are two other provisions of the 2014 agreement, clause 2.1.2 of Appendix 1 and clause 10.3 of the agreement, which may assist in interpreting clauses 19.2 and 2.1.1. Clause 2.1.2 of Appendix 1 provides that “After agreement has been reached with the majority of affected employees ...” (emphasis added). Further, clause 10.3 of the agreement which deals with consultation regarding changes to regular roster of ordinary hours of work requires McCain to “... notify the relevant employees and their representatives ...” (emphasis added) of proposed roster changes. The term “Relevant employees” is defined at clause 10.3.7 of the agreement as “... the employees who may be affected by a change ...” (emphasis added). Both of these provisions talk in terms of “affected employees” as opposed to referring to the work area or areas. These provisions support a finding that Potato Products production and the put away section of the Cold Store should be considered as one electorate for the purposes of establishing whether or not a majority of employees agree to implement a 7 day/12 hour continuous shift roster.
[52] The AMWU drew the Commission’s attention to the decision of the Full Federal Court in Construction, Forestry, Mining and Energy Union v Pilbara Iron Company (Services) Pty Ltd 42 (Pilbara). By way of background, in Pilbara the Full Court considered whether a collective agreement made under the Workplace Relations Act 1996 was validly made with employees in part of a single business. In drawing the Commission’s attention to Pilbara, the AMWU submitted that it did not argue that there were any clear and absolute binding authorities that are going to shed light on the issue presently before the Commission43. The AMWU further submitted that the key take away point from Pilbara was that the concepts of geographically distinct, operationally distinct and organisationally distinct have work to do in determining what constitutes a part of the enterprise:
“45 ...The part of the single business concerned cannot simply be the employees with whom the employer has chosen to make the agreement. The part must be identifiable by reference to factors other than the employees themselves or the date they acquire that characteristic. The part cannot be constituted simply by those employees whom the employer has chosen as the other parties to the proposed agreement. This conclusion leads to the proposition that the part of a single business must itself be a recognisable section, segment or constituent of the business, consistently with the ordinary and natural meaning of the word “part”. The alternative construction, that a “part of a single business” is wide enough to include any of the employees employed in the business, selected on any basis whatsoever, including when they became employees, does not conform with the ordinary meaning ...” (Underlining added)
[53] For its part, McCain relied on the Full Federal Court’s decision in Re IBM Global Services Australia Ltd 44 (IBM). That matter concerned whether or not one or more parts of the employer’s business fell within the coverage of the relevant union’s eligibility rules:
“68 ...All that can be said is that the size of a particular identified organisational structure must be viewed in the context of the overall size and scope of the business concerned, in order to determine whether, for the purposes of r 3E, it constitutes ‘a part’ of that business. The important point is that, as long as the relevant part is of significance, and is identifiable by reference to some objective criterion (which may not be limited to geography, or to organisational structure), then it can answer the description of a ‘part of a business’ for the purposes of the rule.” (Underlining added)
[54] With regard to both Pilbara and IBM, it is worth noting that the circumstances in those matters differ from those presently before the Commission. For instance, neither decision concerned the interpretation of an enterprise agreement. Nevertheless, drawing on IBM, it is worth examining whether or not the part of the enterprise identified by McCain in this matter “is identifiable by reference to some objective criterion”, particularly as much of the evidence lead by the AMWU in this matter was directed at supporting its contention that the Cold Store should be seen as a separate part of McCain’s Ballarat plant. Based on the evidence before the Commission, I accept that there is an interrelationship between Potato Products production and the put away section of the Cold Store. Compelling evidence in this regard was Mr Lett’s evidence that when he was Plant Manager at Ballarat he would not commence production unless put away work could be performed (see paragraph [36] above) and Mr Plush’s evidence that in respect of RDOs for put away employees, if production was running put away employees were expected to come in and work (see paragraph [25](iii) above). It is also worth noting that ultimately it was not disputed by either party that there was an interrelationship between the areas, though differences remained about the degree of interrelationship. In other words, the evidence points to an operational connection between Potato Products production and the put away section of the Cold Store. This in turn supports a finding that operational requirements are the objective criterion in determining the part of the enterprise concerned for the purposes clauses 19.2 and 2.1.1 of the 2014 agreement.
[55] Taking into account all of the above, I determine that the meaning of the phrase “in the part of the enterprise concerned” in clauses 19.2 and 2.1.1 is the area in which McCain proposes to implement a 7 day/12 hour continuous shift roster. In this case that is Potato Products production and the put away section of the Cold Store. Together these employees are the electorate for the purpose of establishing majority agreement for the implementation of a 7 day/12 hour continuous shift roster in this part of the plant. In other words, the affected employees for the purposes of clause 2.1.2 of Appendix 1 of the 2014 agreement are those employees working in Potato Products production and the put away section of the Cold Store.
Appearances
D Vroland for the “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU)
D Fleeton for McCain Foods (Aust) Pty Ltd.
Hearing details
2015.
Melbourne:
January 30.
Printed by authority of the Commonwealth Government Printer
<Price code C, PR562020>
1 AE412101
2 C2014/973
3 McCain Foods (Aust) Pty. Ltd. Ballarat Production Enterprise Agreement 2011 - AE889842
4 [2014] FWCFB 7447
5 Transcript at PN784
6 Ibid at PN794-811
7 Ibid at PN800
8 Exhibit AMWU1 at paragraph 29
9 Transcript at PN161
10 Ibid at PN114-119
11 Ibid at PN133
12 Ibid at PN119
13 Ibid at PN206
14 Exhibit AMWU3 at paragraph 28
15 Transcript at PN231-232
16 Ibid at PN233
17 Ibid at PN328
18 Ibid at PN344
19 (1966) 66 IR 182
20 Respondent’s Outline of Submissions at paragraph 24
21 Ibid at paragraphs 25-27
22 Transcript at PN866
23 Ibid at PN874
24 Ibid at PN877.
25 Exhibit F1
26 Ibid at paragraph 20
27 Transcript at PN547
28 Ibid at PN566-568
29 Ibid at PN571-573
30 Ibid at PN576-577
31 Ibid at PN582-615
32 Ibid at PN633
33 Ibid at PN637-638
34 Exhibit F2
35 Ibid at paragraph 19
36 Ibid at paragraphs 30-44
37 Transcript at PN671
38 Ibid at PN712-721
39 Ibid at PN735-747
40 Ibid at PN155
41 Ibid at PN560
42 (2011) 212 IR 380
43 Transcript at PN755
44 (2005) 144 IR 389
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