“Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers' Union (AMWU) v Mondelez Australia Pty Ltd
[2021] FWC 6111
•13 OCTOBER 2021
| [2021] FWC 6111 |
| 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
Mondelez Australia Pty Ltd
(C2021/110)
DEPUTY PRESIDENT GOSTENCNIK | MELBOURNE, 13 OCTOBER 2021 |
Application to deal with a dispute arising under an agreement in accordance with a dispute settlement term.
[1] The “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU) has applied to the Commission under s.739 of the Fair Work Act 2009 (Cth) (Act) for it to deal with a dispute in accordance with the dispute settlement term of the Mondelez Australia Pty Ltd and AMWU, Fitters And Engineering Stores Victoria Confectionary Operations Enterprise Agreement 2020. 1 The Agreement was approved by the Commission on 26 August 2020 and commenced operating on 2 September 2020.2 The Agreement covers Mondelez Australia Pty Ltd (Mondelez), its employees whose wages are regulated by the Manufacturing and Associated Industries and Occupations Award 2020 (Award) and the AMWU. The applicable dispute settlement term is found at clause 10 of the Agreement and there is no dispute that the Commission has jurisdiction to arbitrate the subject matter of the dispute.
[2] Mondelez manufactures and sells chocolate and other confectionary food items across Australia and New Zealand. Mondelez operates a number of manufacturing plants across Australia, including three in Victoria, one at Ringwood, one at Scoresby and one at Dandenong. 3
[3] The dispute concerns the interpretation and proper construction of redundancy provisions under the Agreement. The AMWU is representing the interests of its member, Mr Ricky Wilson, who has been working for Mondelez as a fitter in its Ringwood manufacturing plant since 1991. 4 The context in which the dispute arose is as follows.
[4] On 18 November 2020, Mondelez announced a proposed restructure involving the removal of the day shift Central Maintenance Team in Ringwood which comprises seven fitter positions (including one team leader) and the addition of one day shift technical lead position. 5 Mondelez held three consultation meetings and invited fitters from the Central Maintenance Team on the day, afternoon and night shifts as well as employees engaged in technical lead positions to make expressions of interest for voluntary redundancy under clause 12.3 of the Agreement.
[5] Under the restructure proposal, Mondelez proposed to reduce its overall head count of employees by six employees. 6
[6] Mondelez received expressions of interest from eight employees, including:
• four fitters from the day shift, one of whom was Mr Wilson, and one who was a leading hand;
• two fitters from the afternoon shift;
• one fitter from the night shift; and
• one technical lead. 7
[7] Mondelez accepted expressions of interest for voluntary redundancy from five fitters on the Central Maintenance Team (one on night shift, one on afternoon shift and three on day shift) and from one technical lead on day shift. 8 Mondelez also redeployed the Central Maintenance Team day shift team leader to the newly created technical lead role.9
[8] On 2 December 2020, Mondelez advised Mr Wilson that his expression of interest was rejected and he was offered a position as technical lead on day shift. 10 Mr Wilson rejected this offer.
[9] On 3 December 2020, the AMWU sent an email to Mondelez stating that Mr Wilson had exercised his sole discretion to elect to receive redundancy payment under clause 12.4 of the Agreement. Mondelez rejected this claim and the parties entered into dispute.
[10] The AMWU alleges that Mondelez, by seeking expressions of interest for voluntary redundancy from technical leads, did not follow the redundancy process outlined in clause 12.3 of the Agreement. 11 The AMWU argues that as there were sufficient expressions of interest from employees in the team or role affected by the redundancies, it was not open to Mondelez to seek expressions of interest from employees who were not from the team or role. The AMWU contends that Mondelez is required to pay Mr Wilson a voluntary redundancy under clause 12.4 of the Agreement.12
[11] The parties have agreed that the dispute may be resolved by the Commission determining the following questions:
Issue 1 – Breach of 12.3 redundancy process
(a) Did Mondelez breach clause 12.3 of the enterprise agreement in the way it sought expressions of interest for voluntary redundancies?
(b) Did Mondelez breach clause 12.3 of the enterprise agreement by rejecting Mr Wilson’s expression of interest for voluntary redundancy?
Issue 2 – Entitlement to redundancy payment
(a) Was Mr Wilson precluded from an entitlement to a redundancy payment under clause 12.4 of the enterprise agreement because his position was not made redundant within the meaning of clause 12 of the enterprise agreement?
(b) If the answer to 5.2(a) is “No”, was Mr Wilson precluded from an entitlement to a redundancy payment under clause 12.4 because he was offered the position of Tech Lead as an alternative to redundancy?
(c) If the answer to both 5.2(a) and 5.2(b) is “No”, is Mr Wilson entitled to a redundancy payment under the enterprise agreement?
[12] Clause 2 of the Agreement sets out the coverage as follows:
2. Application
This Agreement shall be binding upon the following parties:
a) Mondelez Australia Pty Ltd. Confectionery Division (“The Company”) in respect of its operations at Ringwood and Scoresby.
b) Australian Manufacturing Workers' Union (Metal and Engineering Division), and
c) All employees, whether members of the union or not, whose wages and conditions of employment are regulated by Manufacturing and Associated Industries and Occupations Award 2020, ("The Award").
d) In the event that the Company moves its operations to another site not covered by this agreement then the parties agree that:
(i) Any employee transferring to the other site will be covered by this Agreement where the transfer of business obligations under the Fair Work Act apply.
[13] As is evident from clause 2(c) above, whether an employee of Mondelez is covered by the Agreement is to be determined by reference to whether the employee is covered by the Award.
[14] Coverage of the Award is as set out in clause 4, which relevantly provides that it “covers employers throughout Australia of employees in the Manufacturing and Associated Industries and Occupations who are covered by the classifications in this award and those employees”. The Award’s classification structure is found at Schedule A and relevantly contains classifications ranging from C5 (Advanced Engineering Tradesperson—Level II) to C10 (Engineering/ Manufacturing Tradesperson—Level I). Clause 20.5 of the Award provides that the procedures for classifying employees under the Award are set out in the National Metal and Engineering Competency Standards Implementation Guide. It is not necessary to refer to the content of the guide.
[15] The AMWU initially maintained that the technical lead positions, which were included in the expression of interest process for voluntary redundancies, were not covered by the Agreement. It is convenient to deal with this contention here.
[16] Clause 14 sets out wages rates as follows:
14. Wage Rates
| CLASSIFICATION | 2019 Rates | 1/7/2020 | |||
| AWARD | COMPANY | Hourly | Weekly Rate | Hourly | Weekly |
| Trades Assistant | $35.88 | $1,291.69 | $36.88 | $1,327.68 | |
| Trades Assistant | $40.66 | $1,463.92 | $41.8 | $1,504.80 | |
| C13 | Oiler | $41.11 | $1,479.96 | $42.26 | $1,521.36 |
| C11 | Eng Storeman | $42.18 | $1,518.61 | $43.36 | $1,560.96 |
| C11 + L/H | Eng Storeman | $44.12 | $1,588.16 | $45.36 | $1,632.96 |
| C11 + L/H | Eng Storeman | $46.31 | $1,667.10 | $47.61 | $1,713.96 |
| C11 + L/H | Eng Stor.+Site Serv.Sup SCBY | $55.09 | $1,983.26 | $56.63 | $2,038.68 |
| C10 | Fitter | $47.84 | $1,722.26 | $49.18 | $1,770.48 |
| C8 | Fitter Sp Class | $49.93 | $1,797.41 | $51.33 | $1,847.88 |
| C8 | Fitter Sp Class + Weld | $51.21 | $1,843.65 | $52.64 | $1,895.04 |
| C8 + L/H | Fitter Sp Class | $51.93 | $1,869.30 | $53.38 | $1,921.68 |
| C8+L/H +WLD | Fitter Sp Class | $53.14 | $1,913.08 | $54.63 | $1,966.68 |
| C8 + T/L | Engineering Ass | $55.92 | $2,013.10 | $57.49 | $2,069.64 |
| C7 | Fitter | $51.93 | $1,869.31 | $53.38 | $1,921.68 |
| C7 + L/H | Fitter + L/H | $54.00 | $1,944.08 | $55.51 | $1,998.36 |
| C7 + T/L | Fitter + T/L | $58.16 | $2,093.62 | $59.79 | $2,152.44 |
| C6 | Fitter | $54.92 | $1,977.15 | $56.46 | $2,032.56 |
| C6 + L/H | Fitter + L/H | $57.12 | $2,056.24 | $58.72 | $2,113.92 |
| C6 + T/L | Fitter + T/L | $61.51 | $2,214.40 | $63.23 | $2,276.28 |
| App 1st Yr | Apprentice Fitter | $20.09 | $723.33 | $20.65 | $743.40 |
| App 2nd Yr | Apprentice Fitter | $26.31 | $947.26 | $27.05 | $973.80 |
| App 3rd Yr | Apprentice Fitter | $35.88 | $1,291.70 | $36.88 | $1,327.68 |
| App 4th Yr | Apprentice Fitter | $42.10 | $1,515.60 | $43.28 | $1,558.08 |
[17] In the above table there is an alignment of certain Award classifications and the positions or jobs undertaken at Mondelez under the Agreement.
[18] Mr Michael Asmar, Mondelez’s People Lead (RWD) & ER (Aus/NZ), gave evidence contending that technical lead and fitter positions are covered by the Agreement. 13 He explained how these positions are paid by reference to clause 14 as follows:
12. The Agreement sets out a number of classifications at clause 14, with reference to the relevant classification under the applicable award. From the company’s perspective, we consider that the C8 classification is a ‘fitter’ classification, and that all fitters employed at the Ringwood facility are employed at the C8 ‘Fitter SP Class’ classification. Some Fitters perform additional duties, such as leading hand or team leader duties, and therefore receive a slightly higher rate of pay (such as ‘C8 + L/H’ or ‘C8 + T/L’), as do some who have a welding certificate.
13. For clarity, the “T/L” reference in the C8 + T/L rate of pay, refers to the Team Lead rate, not Technical Lead.
14. Both the Technical Lead and Fitter positions are classified at C8 under the Agreement, as the Technical Lead position is a fitter position, but with some additional responsibilities. As such, the Technical Lead positions are paid at a higher ‘T/L’ (team leader) rate in recognition of those additional IL6S responsibilities. The Technical Lead position should be paid at the C8 ‘Fitter Sp Class’ rate, but because there is no specific rate of pay for that role, the company decided at its own initiative to remunerate the position at the higher Team Lead (C8 + T/L) rate. 14
[19] Both the AMWU and Mondelez also led so called expert evidence 15 concerning the appropriate classification of the technical lead under the Award by reference to the job description for the position,16 the Award classification structure and the earlier mentioned guide to which clause 20.5 of the Award makes reference.
[20] The evidence was conflicting but only in so far as the witnesses disagreed about the appropriate classification under the Award into which the technical lead fell. Neither witness asserted that the position was not covered by a classification under the Award. For that reason, it is unnecessary to resolve the conflict in evidence, and as both witnesses themselves conceded there are shortcomings in the assessments made because of incomplete information about the nature of the positions and the assumptions each witness had to make as to precisely what is involved in the various descriptors of work and duties in the position description for a technical lead.
[21] The position of technical lead is plainly covered by the Award and as such is also covered by the Agreement.
[22] During the hearing of final submissions, the AMWU properly conceded that the technical lead position at issue in this matter was covered by the Award and given the terms of clause 2 of the Agreement, was also covered by the Agreement. 17 The AMWU also accepted, again properly, that an assessment of or a dispute about the appropriate rate of pay or classification under clause 14 of the Agreement to be assigned to a technical lead, did not speak to the Agreement’s coverage of the position.18
[23] Clause 9 of the Agreement deals with consultation about matters likely to have a significant impact on employment conditions which includes the termination of employment and major changes in the operation or size of the workforce. Clause 9 provides:
9. Consultation
The Company will discuss with employees and their union matters likely to have significant impact on employment conditions, on the following basis;
(a) Significant impact may include the termination of employment, major changes to the operation or size of the workforce covered by this agreement, the skills required, and the elimination of job opportunities or job tenure.
(b) The Company will discuss with employees and their union the effects the changes are likely to have on employees and any measures to avert or mitigate such affects and shall give consideration to matters raised by employees and their union in relation to the changes.
(c) Discussions with employees and their union shall commence as early as practicable and will include all relevant information about the changes provided that the Company is not required to disclose confidential information.
[24] There can be little doubt that the restructure proposal advanced by Mondelez required consultation pursuant to clause 9. There is also no dispute that consultation occurred and there is no suggestion that Mondelez did not comply with its consultation obligation.
[25] At the heart of the dispute are the rights conferred and obligations imposed by the Redundancy provisions of the Agreement. Clause 12 deals with redundancy and relevantly provides the following:
12. Redundancy
Redundancy occurs where the employer has made a definite decision that the employer no longer wishes the job the employee has been doing done by anyone and that decision leads to the termination of employment of the employee.
12.1 Consultation and Provision of Information
12.1.1 Where the Company has made a decision that the Company 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 and that decision may lead to termination of employment, the Company shall hold discussions with the employees directly affected and with their union.
12.1.2 The discussions shall take place as soon as practicable after the Company has made a decision. The discussions must cover, inter alia, any reasons for the proposed termination, measures to avoid or minimise the terminations and measures to mitigate any adverse affects of any terminations on the employee(s) concerned.
12.1.3 For the purposes of the discussion the Company shall, as soon as practicable after making a decision but before any terminations, provide in writing to the employees concerned and their union, all relevant information about the proposed terminations including the reasons for the proposed terminations, the number and categories of employees likely to be affected, and the number of workers normally employed and the period over which, or the time when the terminations are likely to be carried out. Provided that the Company shall not be required to disclose confidential information, the disclosure of which would be inimical to the Company's interests.
12.2 Application
12.2.1 This redundancy agreement applies only when all reasonable redeployment options have been exhausted. It also applies to all circumstances where an employee is to be made redundant, irrespective of the cause.
12.2.2 Suitable redeployment will be sought from roles within the same classification across both sites (Ringwood and Scoresby). If no suitable opportunities arise then the process, as outlined in 12.3 will apply.
12.2.3 The Company will not terminate the employment of an employee covered by this agreement for reasons of redundancy while it has
(i) regular and ongoing labour hire employee(s);
(ii) regular and ongoing contractors performing the same work as employees covered under this agreement; or
(iii) limited tenure employee(s),engaged to perform the same job that is no longer required by the Company.
12.3 Redundancy Process
If after the consultation process, redundancies are still required, the Company shall first seek volunteers for the redundancy by:
a) seeking expressions of interest from the team/role affected
b) if insufficient expressions of interest then volunteers will be called from the total site
c) if insufficient expressions of interest from the initial site then expressions of interest will be extended to the other site. The Company shall in the first instance select the people to be made redundant from the volunteers, and the Company can only reject a volunteer for redundancy if:
i. There are more volunteers than the number of people to be made redundant; or
ii. The rejected volunteer has skills and qualifications that are required by the business. This reason cannot be relied upon by the Company where the only impediment to a volunteer being made redundant is there is no major shortfall in training between their skills and the skills which a remaining employee/s would have to attain to perform their duties. In such a case the Company must make the volunteer redundant.
Should there not be enough volunteers for the redundancies after completion of the process above, the selection of employees for involuntary redundancy will be based on ongoing business needs. A selection criteria will consider required competencies, knowledge and experience. When this situation occurs the Company will consult with the unions and affected employees.
Throughout this process, alternative positions within the site will be communicated to affected employees.
12.4 Transfer to alternative position in Redundancy situation
Where the employer offers an employee any position that is not considered suitable redeployment (e.g. not at the same classification and not covered by this agreement) as an alternative to redundancy, the employee shall have the sole discretion as to whether to accept that offer or to elect to receive the redundancy payment in this Agreement. The employee will be given an opportunity to trial the alternative position for up to 1 month before making a final decision. Where an employee accepts the offer of alternative employment, then their existing years of service will be recognised as continuous. The employment conditions, including rate of pay of the new role will apply.
[26] The resolution of the first issue with its two questions earlier set out, turns on the proper construction of the Agreement – specifically clause 12.3 – and the application of facts, which are largely uncontested, to that construction. The construction of provisions of an enterprise agreement begins with a consideration of the ordinary meaning of the words, read in context, taking account of the evident purpose of the provisions or expressions being construed. Context may be found in the provisions of the agreement taken as a whole, or in their arrangement and place in the agreement. The statutory framework under which the agreement is made or in which it operates may also provide context, as might an antecedent instrument or instruments from which a particular provision or provisions might have been derived. The industrial context in which an agreement is made and operates is also relevant. Thus, the language of an agreement is to be understood in the light of its industrial context and purpose, not in a vacuum or divorced from industrial realities. But context is not itself an end and a consideration of the language contained in the text of the agreement being considered remains the starting point and the end point to the task of construction. A purposive approach to interpretation is appropriate, not a narrow or pedantic approach. 19
[27] The first question requires a determination whether Mondelez breached clause 12.3 of the Agreement in the way it sought expressions of interest for voluntary redundancies. That is, was it permitted by clause 12.3 to include technical leads in the expression of interest process for voluntary redundancies? The competing contentions as to the first question may be shortly summarised. The AMWU contends that:
➣ the words “team” and “role” in clause 12.3(a) have, in their application to the facts, a plain meaning that is not susceptible to ambiguity. Applied to the facts in this dispute, the team affected by redundancies was the Central Maintenance Team and the roles affected were the roles of 6 fitters (by removing the Day Shift). 20 Technical leads were not part of the Central Maintenance Team.
➣ Technical leads do not form part of the team/role affected by redundancies at all, because through the restructure Mondelez increased the number of technical lead roles by one, from seven to eight. 21
[28] Mondelez contends that:
➣ By offering the opportunity for EOIs from the fitters and the technical leads, Mondelez complied with the requirement at clause 12.3(a), because employees engaged in those positions were part of the "team/role affected" and the AMWU’s interpretation of this provision takes an unnecessarily narrow construction of those provisions. 22
➣ the technical lead position is, in substance, a fitter position which undertakes all the hands-on duties and tasks of a fitter and has some additional responsibilities. 23
➣ Clause 12.3 does not require a construction that restricts the team or role affected to only those positions identified as being redundant. If that were the case, it would have been a simple matter for the clause to have stated that EOIs are to be sought from the “team/role proposed to be made redundant”. 24
➣ The concept of a team has broader operation than "role". A team might consist of multiple roles. If, as the AMWU contends, the relevant “role” for the purpose of clause 12.3(a) is a fitter, then the reference to “team” in that same sentence must extend beyond merely the fitters. A technical lead works closely with fFitters and the majority of the work of a technical lead is the same as a fitter. Consequently, the technical lead roles would fall within the broader notion of the “team” in clause 12.3(a) and is not confined to the Central Maintenance Team as the AMWU contends. 25
➣ Technical leads also properly fall within the “team/role” in clause 12.3(a) because they are “affected”. The word “affected” need not be confined to actual redundancy but may be viewed more broadly as encompassing the fact that the work of the technical leads was affected because of the reduction in the number of fitters. 26
[29] The evident purpose of clause 12.3 of the Agreement appears clear enough. It is to eliminate or minimise the number of employees whose employment will be involuntarily terminated on redundancy grounds by Mondelez by requiring it to deploy a process of seeking expressions of interest from volunteers for redundancy before implementing involuntary redundancy.
[30] By the process set out in clause 12.3 of the Agreement, this purpose is achieved through a staged process of increasing the pool from which expressions of interest for voluntary redundancy may be sought. The first step is to seek volunteers from the team/role affected. I do not accept Mondelez’s contention that the word “affected” has a broader meaning than the plain context in which the word is used would allow. The work which clause 12.3 has to do is concerned with effecting redundancies primarily through the selection of employees through a volunteer process. The clause is not concerned with the effect of any redundancies on the work performed or the duties of those employees who remain in employment. Thus, the reference to “affected” is plainly concerned with employees who are affected by the proposed redundancies. That is, the employees whose employment is at risk of termination on redundancy grounds. As is clear from Mr Asmar’s evidence 27 the only cohort of employees who are affected by the redundancies are those occupying fitter positions in that which is known as the Central Maintenance Team.
[31] Employees who are technical leads, though qualified as fitters, were not fitters affected by the redundancies nor were they part of the Central Maintenance Team. Indeed, under the restructure proposal, the number of technical lead positions will increase, not decrease. 28 Given that fitters affected by the redundancies were part of an identifiable team, I also do not accept Mondelez’s contention that “team” has some broader meaning or that since the role affected is that of a fitter, that any person employed by Mondelez who is a fitter could be included in the first stage of seeking volunteers. So much is evident from the phrase “team/role affected” which would indicate that one identifies the team affected by the redundancies and/or the role so affected. On the evidence no team outside the Central Maintenance Team was affected by the redundancies and no fitter outside the Central Maintenance Team was affected by the redundancies. The first stage in seeking volunteers was thus confined to the Central Maintenance Team and/or to fitters employed in that team.
[32] If insufficient volunteers emerged from the team/role affected by the redundancies, volunteers could be sought from the whole site and if there are still insufficient volunteers then volunteers could be sought from other sites.
[33] It follows from the above that without more, clause 12.3 of the Agreement did not permit Mondelez, in the first instance, to seek volunteers for redundancy outside of persons who were part of the Central Maintenance Team and/or fitters in that team because this was the team/role affected by the redundancies.
[34] It is uncontroversial that under the restructure proposal, Mondelez proposed to reduce its overall head count of employees by six employees who were fitters and that by 30 November 2020 Mondelez had received expressions of interest for voluntary redundancy from eight employees, seven of whom were fitters (including a leading hand) employed in the Central Maintenance Team and one technical lead. As is evident from the preceding paragraph all but the technical lead were employees who would otherwise have been entitled to participate in the first stage of the expression of interest process calling for volunteers.
[35] However, clause 12.3 of the Agreement is not to be read in a vacuum but in the context of the Agreement as a whole. It is to be remembered that it is the proposal to restructure which would have the result of reducing overall headcount. The proposal to restructure must under the Agreement be the subject of consultation pursuant to clause 9 because it is a matter likely to have a significant impact on employment conditions (which includes the termination of employment and major changes to the operational size of the workforce).
[36] During the hearing Mr Asmar gave evidence about some of the discussions that had occurred during consultation about the restructure proposal. Specifically, Mr Asmar gave the following evidence:
25. A further meeting was held on 20 November 2020, which Ricky Wilson and Lewis Farugia attended. I recall Lou Malgeri (Assistant Vic Branch Secretary for the Applicant) was present at that meeting requested that Technical Leads were included in the EOI process. The exchange between Mr Malgeri and I took place with words to the effect that:
Mr Malgeri: To us a fitter is a fitter, they are all qualified fitters and turners, they are all covered by the same Agreement, and should all be considered as part of the one process, and our position is that the Technical Leads should be able to put in EOIs at the same time as the Fitters.
Mr Asmar: Yes, although the company is not targeting Technical Leads in the process for EOIs, if any want to put up their hands for a voluntary redundancy, we will look at that request and consider it based on any exceptional circumstances, and we will look to limit those numbers. We are expecting a majority of voluntary redundancy acceptances would go to Fitters, However, as I said in the announcement, if any Technical Lead wishes to put in an EOI, they can ask me for a redundancy estimate.
26. I recall the exchange as I remember that Mr Malgeri did not say much else at the meeting, and left shortly after speaking. The total exchange with Mr Malgeri took approximately no longer than 10 minutes, and in my view his primary reason for attending that meeting was to ensure that the Technical Leads were included in the EOI process. However, the consultation meeting continued after Mr Malgeri left for approximately 90 minutes.
27. My view was that the company had referred simply to ‘Fitters’ in the briefing packs, as while it would consider any request from a Technical Lead, it did not want all Technical Leads to put up their hands for a voluntary redundancy.
28. After the meeting, three or four Technical Leads came to my office to request their redundancy estimates.
29. To allow any Technical Leads and Fitters time to put in an EOI, we agreed to extend the deadline for employees to submit an EOI, which originally required to be submitted by 24 November 2020, to 30 November 2020. This meant that the EOI was opened to all Technical Leads and Fitters (who were classified at C8 under the Agreement) across the DS, AS and NS at Ringwood.
[37] Mr Malgeri was not called to give evidence. Mr Asmar was not challenged in cross examination about this evidence. Mr Lewis Farugia, an AMWU organiser responsible for the Mondelez site, attended the meeting described by Mr Asmar above, and gave evidence confirming that Mr Malgeri requested that technical leads be permitted to participate in the voluntary redundancy expression of interest process. 29
[38] I accept Mr Asmar’s evidence. On the evidence it seems clear that technical leads employed by Mondelez were included in the expression of interest process because of a request made by the AMWU during consultation about the proposed structure.
[39] One of the effects of the proposed restructure was the necessity for redundancies. Pursuant to clause 9 of the Agreement, Mondelez is required to discuss with relevant employees and their union the nature of the changes, the effects the changes are likely to have on employees and any measure to avert or mitigate such effects. Moreover, Mondelez is required to consider the matters raised by employees and the union in relation to the changes. Moreover, clause 12.1 of the Agreement requires consultation and discussion about proposed redundancies including about measures to avoid or minimise termination of employment and measures to mitigate any adverse effects of any termination on employees concerned.
[40] As one of the effects of the proposed restructure on employees was the necessity to effect redundancies, it seems plain that the inclusion of technical leads in the pool of employees from whom volunteers for redundancies would be sought, was a measure raised by the AMWU during consultation as a measure to avert or at least mitigate the effects. That is, by broadening the pool of employees from whom expressions of interest for voluntary redundancy would be sought, the likelihood of the need for compulsory redundancies would be averted or at least minimised. Mondelez was required to consider this matter and as the evidence of Mr Asmar discloses it did so and agreed to the proposal.
[41] How then are the obligations in clauses 9 and 12.1 of the Agreement to be reconciled with clause 12.3? The starting point to reconcile these provisions is to return to the evident purpose of clause 12.3, that is, the avoidance of or the minimising of the number of employees whose employment will be terminated by the employer involuntarily on redundancy grounds. The obligation to consult about proposed changes and about proposed redundancies is an important obligation aimed at not only informing employees about the change but also providing an opportunity for employees and their union to influence the way in which the changes are to be implemented. The expansion of the class of employees to be included in the expression of interest proposal at the behest of the AMWU was at least consistent with the purpose which underpins clause 12.3. But that is not enough.
[42] Clause 12.3 provides a process that Mondelez must follow in seeking volunteers for redundancy. Where during consultation a mitigation proposal is advanced, in this case by the AMWU, which is aimed at mitigating the likelihood of involuntary redundancies Mondelez is obliged to consider it, but it seems to me that such a mitigation proposal cannot depart from the strictures of clause 12.3 even though the mitigation proposal is consistent with the evident purpose of clause 12.3. This is clear from the text of clause 12.3. First, it is a provision which expressly deals with the redundancy process and how it is to be effected. Second, the provision applies if “after the consultation process, redundancies are still required”. Third, the mandatory language chosen by the parties – “the Company shall first seek volunteers for redundancy by . . .” following the process set out – makes plain that it is that process which must be followed. The generalised nature of the consultation process and the mitigating measures discussed, must give way to the specific language aimed at the specific circumstances – the need for redundancies after consultation – and so mitigation measures discussed in and agreed during consultation may not be carried out if they are inconsistent with the terms of clause 12.3. For the reasons explained earlier technical leads were not a class of employees from who expressions of interest for voluntary redundancy permitted by the first limb of clause 12.3 could be sought. That Mondelez included technical leads in the class of employees by extending the period during which expressions of interest might be made, it did so contrary to clause 12.3. It follows that the answer to the first question raised by issue number one is “yes”.
[43] Clause 10 of the Agreement contains a dispute settlement procedure and specifically empowers the Commission to resolve any matter in dispute which falls within the dispute settlement procedure. Unlike dispute settlement terms in many enterprise agreements which allow the Commission to exercise a discretion whether to arbitrate, the terms of clause 10 make clear that if conciliation fails to resolve the matter the commission “shall resolve the matter by arbitration”. A matter in dispute is as characterised by the first question of issue one. In giving my answer in the preceding paragraph I have determined that matter by arbitration. However, I should make plain that had I had a discretion whether to arbitrate this matter in dispute I would not have done so on discretionary grounds. Although Mondelez did not comply with the terms of clause 12.3 by including technical leads in the expression of interest process, Mr Wilson was not adversely affected by that decision and so a determination that there has been a breach in the manner described by the first question of issue one is unnecessary. This is so for three reasons. First, the departure from clause 12.3 was made at the behest of the AMWU and now having had Mondelez accede to its request, the AMWU asserts that the departure, in which it was knowingly concerned, was a breach of clause 12.3. Second, putting to one side the one technical lead who expressed an interest, seven fitters expressed interest for six redundancies that were available. There were more eligible employees submitting expressions of interest for voluntary redundancy than the number of voluntary redundancies that were available. A choice would thus have had to have been made and one eligible fitter would not have been selected. Third, for the reasons given in answer to the second question of issue one below, Mr Wilson would not have been selected for voluntary redundancy from the group of seven eligible fitters who expressed an interest for voluntary redundancy.
[44] The second question of issue one raises for consideration whether Mondelez breached clause 12.3 of the Agreement by rejecting Mr Wilson’s expression of interest for voluntary redundancy. Relevantly clause 12.3 provides:
. . . The Company shall in the first instance select the people to be made redundant from the volunteers, and the Company can only reject a volunteer for redundancy if:
i. There are more volunteers than the number of people to be made redundant; or
ii. The rejected volunteer has skills and qualifications that are required by the business. This reason cannot be relied upon by the Company where the only impediment to a volunteer being made redundant is there is no major shortfall in training between their skills and the skills which a remaining employee/s would have to attain to perform their duties. In such a case the Company must make the volunteer redundant.
[45] The AMWU’s essential contention here is that by including technical leads in the expression of interest process and by accepting an expression of interest for voluntary redundancy from a technical lead Mondelez breached clause 12.3 of the Agreement, thereby depriving Mr Wilson of the opportunity to be considered for acceptance of his expression of interest for voluntary redundancy.
[46] It is to be accepted that, as I have already concluded, the inclusion of technical leads in the expression of interest for voluntary redundancy process was a breach of clause 12.3 of the Agreement. It may also be accepted that by accepting the expression of interest of a technical lead Mondelez also breached clause 12.3 because the technical lead was not a person from whom an expression of interest could be sought and thus was not a person whose expression of interest was capable of acceptance under clause 12.3.
[47] However, that is not the end of the matter nor does it engage with the question posed which relevantly asks whether there was a breach of clause 12.3 of the Agreement because Mr Wilson’s expression of interest for voluntary redundancy was rejected.
[48] As should be evident from the extracted provisions of clause 12.3 above Mondelez may only reject a volunteer for redundancy in two limited circumstances. First, where there are more volunteers than the number of people to be made redundant. Second, where the volunteer has skills and qualifications that are required by the business.
[49] The first circumstance in which volunteers may be rejected is not qualified. If, as a matter of fact, there are more volunteers than the number of people to be made redundant it seems plain enough that Mondelez can choose as between the volunteers which of them will be accepted for voluntary redundancy and which will not. Here we are concerned with the excess number of volunteers and Mondelez is not at liberty to reject under this head four of seven volunteers when it is seeking to make six redundancies. The capacity to reject is confined to the excess number of volunteers. However, save for the use of a selection criteria under this head, which is unlawful or discriminatory, the Agreement does not require Mondelez to apply any particular criteria or prohibit any particular exclusionary criterion.
[50] But for the inclusion of a technical lead in the expression of interest process, it is uncontroversial that seven fitters, each eligible to express an interest in voluntary redundancy under clause 12.3, expressed such an interest. Only six positions were to be made redundant. There were thus more eligible volunteers than the number of people to be made redundant. The first circumstance permitting a rejection of a volunteer discussed above was therefore engaged.
[51] Mr Asmar’s evidence was that even if the volunteering technical lead had not been included in the process it would have been necessary to refuse one of the seven volunteering fitters because Mondelez proposed only to make six people redundant. Mr Asmar said that Mr Wilson’s expression of interest would nonetheless have been rejected because Mondelez needed his skills. 30 He also said that the requirement to retain Mr Wilson’s particular skills was the reason Mr Wilson’s expression of interest was rejected.31 Mr Asmar was not challenged on any of this evidence during cross examination. I accept the evidence given by Mr Asmar.
[52] As a matter of fact, there were more volunteers who are eligible to participate in the expression of interest process for voluntary redundancies than the number of redundancies that were to be made. On the undisputed evidence Mr Wilson would not have been selected for redundancy even if the expression of interest made by the technical lead had not been accepted. This was a call that Mondelez was entitled to make under clause 12.3 because of the excess number of eligible volunteers.
[53] That being the case it cannot be concluded Mondelez breached clause 12.3 of the Agreement by rejecting Mr Wilson’s expression of interest for voluntary redundancy. Whether it wanted him to take up the vacant or newly created technical lead position or not is beside the point. Its rejection of Mr Wilson’s expression of interest for voluntary redundancy occurred in circumstances contemplated by the Agreement (excess number of eligible volunteers) and was a permissible rejection. There is no suggestion that Mondelez rejected Mr Wilson’s expression of interest based on criteria which was unlawful or discriminatory. Again, on this point Mr Asmar’s uncontested evidence is clear – Mondelez needed his skills.
[54] It follows that the answer to the second question raised by issue one is “no”.
[55] I turn next to consider the second issue in which three questions are raised. As will be shortly apparent it is only necessary to answer the first question. That question is concerned with whether Mr Wilson is precluded from an entitlement to a redundancy payment under clause 12.4 of the Agreement because his position was not made redundant within the meaning of clause 12 of the Agreement.
[56] Clause 12.4 of the Agreement is engaged only when Mondelez offers an employee a position which is not considered suitable redeployment as an alternative to redundancy. In those circumstances an employee may elect whether to accept the offer or to receive a redundancy payment. The clause is directed to the rights of an employee whose employment is likely to be terminated on redundancy grounds. It is not concerned with the voluntary redundancy process with which clause 12.3 is concerned. Indeed, the offer of an alternative position is not one of the two permitted grounds in clause 12.3 on which an expression of interest for voluntary redundancy may be refused. So much is clear from the text of clause 12.4 because the rights which accrue to an employee under that clause are conditions on there being an offer of another position “as an alternative to redundancy”.
[57] Although the discussions with Mr Wilson about assuming the role of technical lead occurred during the redundancy process, 32 on the evidence the position was not offered to Mr Wilson as an alternative to redundancy. Mr Wilson does not say so in his evidence,33 nor did Mr Asmar make such an assertion34 and it was not put to Mr Asmar during cross-examination that the technical lead role was offered as an alternative to redundancy. He was offered the position because a technical lead position became vacant as a consequence of the wrongful inclusion of technical leads in the expression of interest process and because as part of the restructure process an additional technical lead position would be created.35 Mr Wilson’s role as a fitter has not been made redundant and he has not been identified as a person whose employment will be terminated on redundancy grounds. As the evidence discussed earlier discloses, notwithstanding the inclusion of a technical lead employee in the pool of employees who expressed an interest for voluntary redundancy, Mr Wilson was not and would not have been accepted for voluntary redundancy because his skills were required by Mondelez.36 The rejection of Mr Wilson’s expression of interest was permitted by clause 12.3 for the reasons earlier given. Mr Wilson remains employed as a fitter and Mondelez has indicated that he may continue in that role if the technical lead position is not one which he wants to take up.
[58] As the precondition for the engagement of the rights conferred by clause 12.4 of the Agreement was not made out, it follows that the answer to the first question raised by issue 2 is “yes”.
[59] In these circumstances the second and third questions raised by issue 2 do not arise because they are conditioned on the answer to the first question being “no”.
[60] As Mr Wilson is not inclined to accept the offer of a technical lead position and as his fitter position is not redundant, he will be entitled to continue in that position. It is of course to be noted that the restructure proposal was to reduce its fitter headcount by six. Although Mondelez erroneously accepted an expression of interest from a technical lead, its fitter headcount has been reduced by five redundancies and by one team leader whose position was redundant but was redeployed to a technical lead role. Thus, the reduced headcount of six fitters appears to have been achieved and as the evidence discloses Mr Wilson would not have been selected for voluntary redundancy from among the excess number of eligible employees who expressed an interest for voluntary redundancy for the reasons earlier described.
[61] For the reasons set out above I answer the questions posed by the parties as follows:
Issue 1 – Breach of 12.3 redundancy process
(a) Did Mondelez breach clause 12.3 of the enterprise agreement in the way it sought expressions of interest for voluntary redundancies? - Yes
(b) Did Mondelez breach clause 12.3 of the enterprise agreement by rejecting Mr Wilson’s expression of interest for voluntary redundancy? - No
Issue 2 – Entitlement to redundancy payment
(a) Was Mr Wilson precluded from an entitlement to a redundancy payment under clause 12.4 of the enterprise agreement because his position was not made redundant within the meaning of clause 12 of the enterprise agreement? – Yes
(b) If the answer to 5.2(a) is “No”, was Mr Wilson precluded from an entitlement to a redundancy payment under clause 12.4 because he was offered the position of Tech Lead as an alternative to redundancy? – Unnecessary to answer
(d) If the answer to both 5.2(a) and 5.2(b) is “No”, is Mr Wilson entitled to a redundancy payment under the enterprise agreement? – Unnecessary to answer
[62] The dispute is resolved accordingly, and no orders are necessary.
DEPUTY PRESIDENT
Appearances:
P. Lettau and J. Gardner of the AMWU for the Applicant
R. Catanzariti solicitor for the Respondent
Hearing details:
2021
Melbourne
20 May, 9 July and 18 August
Written submissions:
Applicant, 12 April, 12 May, 26 July and 16 August 2021
Respondent, 5 May and 9 August 2021
Printed by authority of the Commonwealth Government Printer
<PR734824>
1 AE508840
2 [2020] FWCA 4507
3 Exhibit 6 at [3]
4 Exhibit 3 at [5]
5 Exhibit 6 at [18]
6 Exhibit 7 at [2]
7 Exhibit 7 at [1]
8 Exhibit 6 at [47]
9 Ibid
10 Exhibit 3 at [54], Exhibit 6 at [40]
11 AMWU Submissions, 12 April 2021 at [15]
12 Ibid
13 Exhibit 6 at [11]
14 Ibid at [12]-[14]
15 See Exhibits 1, Transcript PN89- PN114, Exhibit 8
16 See for example at RW 3 to Exhibit 3
17 Transcript PN849-PN854
18 Transcript PN855-PN858
19 WorkPac Pty Ltd v Skene [2018] FCAFC 131 at [197] and the authorities referred to therein; see also King v Melbourne Vicentre Swimming Club Inc [2020] FCA 1173 at [122]-[130] and the authorities referred to therein
20 Applicant’s Submissions at [42]
21 Ibid at [44]
22 Respondent’s closing Submission at [20]
23 Ibid at [22]
24 Ibid at [23]
25 Ibid at [24]-[27]
26 Ibid [28]-[30]
27 Exhibit 6 at [18]
28 Ibid
29 Transcript PN 162 – PN 164
30 Exhibit 7 at [1] – [3]; Transcript PN 679
31 Exhibit 6 at [38]
32 Exhibit 6 at [40]
33 Se Exhibit 3 at [50]-[105]
34 See Exhibit 6 at [38]-[41]
35 Exhibit 6 at [18]
36 Transcript PN 680
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