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

[2018] FWC 2750

[2018] FWC 2750

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
Paper Australia Pty Ltd T/A Australian Paper
(C2017/6457)

Timber and paper products industry
COMMISSIONER CIRKOVIC	MELBOURNE, 3 SEPTEMBER 2018

Alleged dispute about any matters arising under the enterprise agreement

Introduction

[1] This decision involves an application brought by the Australian Manufacturing Workers’ Union (AMWU) (“the Applicant”) under section 739 of the Fair Work Act 2009 (“the Act”). The Respondent is Paper Australia Pty Ltd (“the Respondent”).

[2] The parties are covered by the Australian Paper (Enterprise) Agreement, 2016-2019 Maryvale Mill Mechanical Maintenance and Engineering Store (“the Agreement”). The Agreement was approved by the Fair Work Commission (“the Commission”) on 24 March 2016. It has a nominal expiry date of 30 June 2019. The Agreement applies to mechanical, maintenance and engineering storepersons employed at the pulp paper and paper manufacturing mill operated by Australian Paper at Maryvale in the Latrobe Valley in Victoria.

[3] The parties jointly submitted that the question for arbitration is: 1

“Can apprentices be counted to satisfy the manning levels set out at clause 39.4 of the Agreement?”

Background

[4] The Applicant filed the application on 23 November 2017. The matter was listed for conference on 6 December 2017 and then a mention hearing on 25 January 2018. An arbitration hearing was held before me on 3 May 2018 and 20 July 2018.

[5] The Applicant was represented by Mr N Grealy of the AMWU and the Respondent was represented by Mr D McLaughlin of Rigby Cooke Lawyers. Permission to appear was granted to Mr McLaughlin pursuant to section 596 of the Act.

Issues in Dispute

[6] In summary, the issue in dispute requires an interpretation of the following clause in the Agreement:

“Clause 39.3

At the commencement of and during this agreement, manning levels will be:

Mechanical 98

Engineering Store 6

The above manning levels indicate the full time permanent employees and for clarity do not include limited term employees or casuals. The consultation clause must be utilised when making any change to the above manning levels.”

[7] The main issue for me to determine is whether apprentices are full time permanent employees and therefore can be counted in the numbers for mechanical employees. 2 I did not consider the manning levels of the engineering store.

[8] The Applicant contends that apprentices are not full time permanent employees and therefore should not be counted in the above manning levels. The Respondent submits that apprentices should be considered full time permanent employees and consequently must be counted. It is agreed by the parties that apprentices are not casual employees 3 and the Applicant withdrew its submission that apprentices could be considered as limited term employees.4

Jurisdiction

[9] Section 739 of the Act prescribes when disputes under an enterprise agreement can be dealt with by the Commission. Section 739 of the Act is as follows:

“739 Disputes dealt with by the FWC

(1) This section applies if a term referred to in section 738 requires or allows the FWC to deal with a dispute.

(2) The FWC must not deal with a dispute to the extent that the dispute is about whether an employer had reasonable business grounds under subsection 65(5) or 76(4), unless:

(a) the parties have agreed in a contract of employment, enterprise agreement or other written agreement to the FWC dealing with the matter; or

(b) a determination under the Public Service Act 1999 authorises the FWC to deal with the matter.

Note: This does not prevent the FWC from dealing with a dispute relating to a term of an enterprise agreement that has the same (or substantially the same) effect as subsection 65(5) or 76(4) (see also subsection 55(5)).

(3) In dealing with a dispute, the FWC must not exercise any powers limited by the term.

(4) If, in accordance with the term, the parties have agreed that the FWC may arbitrate (however described) the dispute, the FWC may do so.

Note: The FWC may also deal with a dispute by mediation or conciliation, or by making a recommendation or expressing an opinion (see subsection 595(2)).

(5) Despite subsection (4), the FWC must not make a decision that is inconsistent with this Act, or a fair work instrument that applies to the parties.

(6) The FWC may deal with a dispute only on application by a party to the dispute.”

[10] Clause 33.4 of the Agreement provides a dispute resolution process for the parties to the Agreement. Clause 34.4 of the Agreement provides:

“33.4 Any dispute/s or grievance over the application of this Agreement or in relation to the National Employment Standards shall be dealt with in the following manner:

33.4.1 The employee concerned will first meet and confer with their immediate supervisor. The employee/s may choose any another person to act on their behalf including a shop steward or delegate of their Union. An employee representative shall be allowed the necessary time during working hours to discuss the matter with the employee/s and the supervisor.

33.4.2 If the matter is not resolved at such a meeting the parties will arrange further discussions involving more senior management as appropriate. The employee may choose to invite a Union official or any other representative to be involved in the further discussions if they so elect. The employer may also invite a representative to be involved in the discussions.

33.4.3 If the matter remains unresolved the employer may refer it to a more senior level of management or to another representative. The employee may continue to involve a representative and may choose to invite a more senior union official or any other representative of the Employee to be involved in the discussions.

33.4.4 In the event there is still no agreement the parties will commence a cooling off period of not less than 2 days to assess their respective positions. The process will then resume for one more attempt at clause 33.4.3. In the event the meeting at clause 33.4.3 is held and again proves unsuccessful, parties then progress to Commission.

33.4.5 If the matter remains unresolved it shall be submitted to the Commission for conciliation and/or arbitration in which the arbitrated decision, subject to the parties’ rights of appeal, shall be accepted.”

[11] There is no dispute between the parties that the jurisdiction of the Commission is properly invoked.

[12] Having regard to the material in the F10 and the views of the parties, I am satisfied that the Commission has jurisdiction to arbitrate this dispute pursuant to section 739(4) of the Act.

Principles of Interpretation of Enterprise Agreements

[13] The parties agree that the principles that apply to the interpretation of enterprise agreements are settled.

[14] The principles to be applied to the interpretation of enterprise agreements were detailed by the Full Bench of the Commission in The Australian Meat Industry Employees Union v Golden Cockerel Pty Ltd⁵ (“Golden Cockerel”). The summary of the applicable principles set out in Golden Cockerel was modified in Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union’ known as the Australian Manufacturing Workers Union (AMWU) v Berri Pty Limited (“Berri”).

[15] Both parties sought to rely on these principles to advance their case in their submissions. I adopt and apply the principles in Berri in this decision without restating them.

Relevant provisions of the Agreement

[16] A relevant provision of the Agreement, clause 8, is reproduced below:

“8. CONTRACT OF EMPLOYMENT

Terms and Conditions

8.1 Employees shall be engaged by the week, either permanently (Clause 8.6), limited term (Clause 8.9), or Part-time (Clause 8.8), except in the case of a casual employee (Clause 8.7).

8.2 An employee shall initially be engaged on a three month probationary period. During or at the end of the probationary period, either party may decide to terminate the employment with one week’s notice.

8.3 The Company may direct an employee to carry out duties and use tools and equipment as may be required, and are within the employee’s skill, competence and training, provided such directions are safe, efficient, logical and legal.

8.4 The Company and Employees are committed to a safe work environment with every employee having an obligation to at all times behave in a safe manner, be safety conscious for workmates and others, and take personal responsibility for their fitness for work.

8.5 Employees are required to:

8.5.1 Wear and use protective clothing, tools and equipment (including safety equipment) as required.

8.5.2 Be responsible for their personal safety at the workplace.

8.5.3 Comply with safe systems of work.

8.5.4 Present fit for work at all times.

8.5.5 Maintain all necessary qualifications, certificates, permits, and licenses to enable them to fulfil their duties.

8.5.6 Provide instruction to other employees in their work area, classification or area of competence.

8.5.7 Learn any job or skill within their classification as required by the Company for future career development.

8.6 Weekly Employment

Employment shall be engaged by the week unless engaged as a Casual.

8.7 Casual Employment

8.7.1 A casual employee is one specifically employed as a casual or employed on a casual basis.

8.7.2 The employment of a casual employee may be terminated at any time without notice.

8.7.3 A casual employee shall be paid twenty five per centum (25%) more than the rate prescribed in Appendix D for the particular classification.

8.7.4 Except clause 41 and all clauses contained in Part 6- Leave and Holidays, all other provisions of this Agreement shall apply to casual employees.

8.7.5 Unless the employees absent themselves without leave, a casual employee instructed to report for duty shall be paid for not less than four hours work.

8.7.6 A casual employee, whose employment is terminated through no fault of their own before the usual ceasing time for the relevant day or shift, shall be paid as though that employee had continued working until such ceasing time.

8.8 Part-time Employment

A part-time employee may be engaged on the following terms and conditions:-

8.8.1 Part-time employment shall not be offered without consultation with the parties covered by this Agreement.

8.8.2 A part-time employee shall be paid for each hour worked calculated on the

ordinary hours of a full time employee at the time of working and the full time employee’s weekly wage prescribed by this Agreement for the classification performed by that employee plus 10%.

8.8.3 A part-time employee shall otherwise receive the same terms and conditions as a full time employee on a pro rata basis.

8.8.4 Before commencing part-time employment, the employee and the Company must agree in writing:

a) on the hours to be worked by the employee, the days on which they will be

worked and the commencing and finishing times for the work; and

b) on the classification applying to the work to be performed in accordance

with Appendix D.

8.8.5 The terms of the agreement in this sub-clause may be varied by consent in

writing.

8.8.6 The agreement under this sub-clause or any variation to it under this sub-clause must be retained by the employer and a copy of the agreement and any variation to it must be provided to the employee by the employer.

8.8.7 Except as otherwise provided in this Agreement, a part-time employee must be paid for the hours agreed on in accordance with clauses 8.8.4 and 8.8.5.

8.8.8 A part-time employee who is required by the employer to work in excess of the hours agreed under clauses 8.8.4 and 8.8.5 must be paid overtime in accordance with clause 21 - Overtime.

8.9 Limited Term Employment

A limited term employee may be engaged on the following terms and conditions:

8.9.1 Limited term employment shall not be offered without consultation between the parties covered by the Agreement.

8.9.2 Limited Term Employment means a contract with a defined expiry date.

8.9.3 The term of employment will be specified in writing to the employee. Clause 9.1 shall not apply where the term of employment expires by effluxion of time. Where the employment is terminated otherwise than by effluxion of time, clause 9 will apply.

8.9.4 Limited Term Employees may be employed to cover long term

sickness/rehabilitation, parental leave, long service leave, training needs of the Company, to assist during major capital expenditure projects and to cover absences or other business needs.

8.9.5 A Limited Term Employee shall receive the same wages, terms and conditions as a weekly paid employee of this Agreement.

8.9.6 Where a Limited Term Employee accepts an offer of continuing employment with the Company, continuous employment with the Company, continuous service as a Limited Term Employee will count for all purposes.”

[17] The other relevant provision of the Agreement, clause 39.3, appears above at paragraph [6] of this decision.

The Evidence

[18] Mr Wayne Zalesiak, Mr Stephen Dodd and Mr Rod Beales each tendered a witness statement and gave evidence at the hearing. Mr Zalesiak is a delegate of the AMWU, Mr Dodd is an organiser for the AMWU and Mr Beales is the National Employee Relations & Human Resources Manager for the Respondent.

[19] I found the evidence of the witnesses by and large to be reliable and credible. To the extent that there were any inconsistencies between the witnesses, I have not had reason to make particular findings.

Submissions

[20] The Applicant submits that the dispute relates to clause 39 of the Agreement and that the task of construing the Agreement begins with the ordinary interpretation of the words, having regard to the context in which they appear. 6 In so doing, the Applicant submits that the Commission must have regard to the other parts of the Agreement dealing with the employment of apprentices.

[21] The Applicant submits that:

● The word “permanent” in an employment context refers to employment that is ongoing and open ended. 7

● “permanent” is defined in the Macquarie Dictionary as “lasting or intended to last indefinitely: remaining unchanged; not temporary; enduring; abiding.” 8

● Apprentices are inherently of limited duration and are therefore impermanent. 9

● There is no ambiguity as the ordinary meaning of the words answer the question for the Commission. 10

● The Commission ought to have regard to the context and purpose of the clause to be taken from the text of the Agreement as a whole, the place and arrangement of the clause and the legislative context.

● The context supports a view that permanent employees occupy a different category to apprentices. Apprentice wages, leave conditions, redundancy entitlements terms of employment and staffing numbers are all dealt with differently from permanent employees, and in different parts of the Agreement. 11

● Appendix C and D of the Agreement contemplates the termination of the apprenticeship at the conclusion of a four year period. 12

● The wage rates set out for apprentices are a proportion of those payable to other employees. 13

● The Agreement provides for conditions of employment that vary in a significant way to those afforded to full time permanent employees. 14

● Apprentices are employed pursuant to a contract of training, rather than a contract of service and as such fall outside the scope of clause 8 which deals with different types of contracts of employment. 15

● The number of employees is dealt with at clause 1.2 of Appendix C which states: “Apprentice numbers for the life of this agreement will be 11.” 16

•  That the number is set outside clause 39.4 would lead to the counter intuitive result that the Respondent would be required to maintain an ever increasing number of graduating apprentices as permanent employees whilst engaging new employees to remain at 11 at all times.

● The Respondent’s policy document governing apprentices confirms the above arrangement. 17

[22] In support of this interpretation the Applicant relies on the history of negotiations between the parties and the post-agreement conduct. A summation of the Applicant’s submissions on this issue is produced below:

● Post-agreement conduct is relevant to the interpretation of industrial instruments “if it demonstrates a consensus or meeting of the minds.” 18

● When regard is had to the count of employees it is clear that apprentices are not included in the manning levels. 19

● The history of bargaining demonstrates that neither party turned their mind to the inclusion of apprentices in the manning clause. 20

● The parties “knew” that apprentices were not to be included. 21

● The history of disputes between the parties as to the Respondent’s “persistent alleged contraventions” is demonstrative of there being no “acceptance or understanding” that apprentices are to be included for the purpose of the manning clause. 22

[23] At the commencement of the proceeding, the Applicant submitted an alternative argument that apprentices are “limited term” employees for the purposes of clause 39.4. As stated earlier in this decision, this submission was ultimately withdrawn. 23

[24] The Respondent submits that:

● Apprentices are properly characterised as permanent full time employees. 24

● Clause 8.1 sets out the classification of employees pursuant to the Agreement as either permanent, part time or limited term and states that engagement shall be “by the week” except in the case of a casual. 25

● Apprentices are weekly employees. 26

● Apprentices are logically “mechanical maintenance” employees as identified in clause 3.1 and as such there is no reason to exclude apprentices from the word “mechanical” in clause 33. 27

•  The second paragraph of clause 39.3 does provide for specific exclusions from the count of both mechanical and engineering stores employees, and also sets out a process for changing the stated manning levels. 28

● Apprentices are entitled to the full “benefits” of the Agreement, but with “modified” personal leave entitlements. 29

● Clause 8.6 provides for employees to be engaged “by the week” as either permanent, limited term (clause 8.9), or part time (clause 8.8), except in the case of a casual employee (8.7). Clause 8.6 does not address longevity of employment. 30

● Clause 39.3 specifically excludes limited term employees and casual employees. Given that apprentices are neither limited term, part time or casual employees, “there is no other category of employee they can be other than permanent.” 31

Consideration

[25] In accordance with the principles earlier stated, the construction of the Agreement begins with a consideration of the ordinary meaning of the relevant words. Context may appear from the text of the Agreement viewed as a whole, or the place and arrangement of clause 39.3 in the Agreement. The statutory framework under which the Agreement was made and in which it operates may also provide context.

[26] Clause 39 is entitled “security of employment.” That the clause seeks to provide some level of employment protection to those employees covered by the Agreement is not in dispute. Clause 39.3 sets out manning levels to apply at the commencement of and during the operation of the Agreement and stipulates that “at the commencement of and during this agreement, manning levels will be: mechanical 98.”

[27] The remainder of clause 39.3 purports to provide clarity by providing that the manning levels “indicate full time permanent employees” but “do not include limited term employees or casuals.” There is no contest between the parties that apprentices are not limited term employees or casual for the purposes under clause 39.3.

[28] The essence of the question before me is whether for the purpose of assessing manning levels set in clause 39.3 apprentices are “full time permanent employees.” That the clause in dispute is part of a clause that deals with employment security, and that it establishes that manning levels are not to change for the life of the Agreement does not in my view assist the interpretation in any meaningful way.

[29] The ordinary meaning of the words “full time permanent employee” is an employee who has an open ended and ongoing engagement. The dictionary definition of “permanent” cited by the Applicant is “lasting” and not “temporary.”

[30] To adopt the meaning sought by the Respondent would in my view involve some straining on the ordinary meaning of the words. As a matter of ordinary industrial parlance a “permanent” employment arrangement is one with no fixed end. The fact that it is open to the employer to re-engage an apprentice at the end of the apprenticeship, or that as a matter of fact some apprentices have been offered ongoing “permanent” employment at the end of their apprenticeship does not alter my conclusion.

[31] The Respondent points to the other provisions in the Agreement, which I have taken into account and considered in coming to my conclusion.

[32] I am not persuaded by the argument advanced by the Respondent as to the proper application of clause 8. I accept that to the extent that apprentices are not limited term employees, part time employees or casuals, they may be outside the scope of the clause. I do not accept what the Respondent submits flows from that conclusion that apprentices “must be permanent full time employees for the purposes of clause 39.3.”

[33] I prefer the position advanced by the Applicant that apprentices are engaged pursuant to a contract of traineeship. There is nothing in the Agreement to suggest that such an arrangement is precluded. To the contrary, the Agreement deals comprehensively with the traineeship arrangements in appendix c and d. While I accept the Respondent’s submission that the weight of authorities find that apprentices are employees, this submission does not advance the case that apprentices are permanent full time employees.

[34] Despite the parties leading evidence and making submissions as to the accuracy or otherwise of the actual manning levels, it was ultimately conceded by the Respondent that the Commission was not required to make a finding as to the accuracy or otherwise of the number 98 in the current agreement 32 and that the “history of the negotiations between the parties in respect of the actual number of permanent tradespersons at the Respondent’s worksite and the changes to that number over the years” was not a relevant consideration to the question before me.33

[35] The Applicant maintains that the number of persons employed indicates that the Respondent does not regard or treat the apprentices as falling within the manning levels set out in clause 39.3. 34

[36] Whilst it has been unnecessary for me to make findings as to the history of the negotiations between the parties and their past conduct to determine the present matter, it is worth noting that at its highest the evidence before me suggests that the parties did not consider the question currently before me. Mr Beales concedes that it was not something that was considered during bargaining. 35

[37] In the present matter, I consider that clause 39.3 has a plain meaning. It is not ambiguous. As Deputy President Coleman aptly observed in National Union of Workers v CHEP Australia Limited: “the mere fact that two parties present respectable but conflicting interpretations does not mean that the provisions concerned must be ambiguous.” 36

[38] Taking into account the ordinary meaning of the words contextually in clause 39.3 and with respect to the context of the Agreement as a whole, I am of the view that the Applicant’s interpretation is the correct one. Therefore the answer to the question posed “can apprentices be counted to satisfy the manning levels set out at clause 39.4 of the Agreement?” is no.

COMMISSIONER

Appearances:

Mr N Grealy for the Applicant

Mr D McLaughlin of Rigby Cooke Lawyers for the Respondent

Hearing details:

Melbourne

2018

3 May and 13 July.

Final written submissions:

Applicant’s Supplementary Submissions (20 July 2018).

Respondent’s Submissions (20 July 2018).

 1   Joint Submission from Parties in e-mail (5 March 2018).

 2   Agreed Statement of Facts, [4].

 3 Ibid [5].

 4   E-mail from Mr Grealy to chambers (24 July 2018).

5 The Australian Meat Industry Employees Union v Golden Cockerel Pty Ltd[2014] FWCFB 7447, [19]–[40].

 6   Applicant’s Outline of Submissions (16 March 2018), [10].

 7   Applicant’s Closing Submissions (28 May 2018), [7].

 8   Ibid.

 9   Ibid.

 10 Ibid [8].

 11 Ibid [13].

 12   Ibid.

 13   Applicant’s Outline of Submissions (16 March 2018), [11].

 14 Ibid [14].

 15 Applicant’s Closing Submissions in Reply (25 June 2018), [1]-[4].

 16   Applicant’s Outline of Submissions (16 March 2018), [12].

 17 Ibid [11].

 18   Applicant’s Supplementary Submissions (20 July 2018), [1].

 19 Ibid [2].

 20 Applicant’s Closing Submissions (28 May 2018), [11]-[12].

 21 Ibid [11].

 22 Ibid [21].

 23   E-mail from Mr Grealy to chambers (24 July 2018).

 24   Respondent’s Closing Submissions (8 June 2018), [32].

 25 Ibid [26].

 26 Ibid [33].

 27   Ibid [20]-[21].

 28 Ibid [22].

 29 Ibid [33].

 30 Ibid [31].

 31 Ibid [32].

 32   Respondent’s Submissions (20 July 2018), [1].

 33 Ibid [10].

 34 Applicant’s Supplementary Submissions (20 July 2018), [2]-[3].

 35   Transcript of Proceedings (3 May 2018), PN786.

 36   [2018] FWC 3797 [44].

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