“Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers' Union (AMWU) v Simplot Australia

[2013] FWC 3288

[2013] FWC 3288

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
Simplot Australia
(C2012/4677)

COMMISSIONER GREGORY MELBOURNE, 27 AUGUST 2013

Alleged dispute about any matters arising under the enterprise agreement and the NES.

Introduction

[1] This matter concerns an application by the “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU) (the Applicant) to deal with a dispute in accordance with s.739 of the Fair Work Act 2009 (Cth) (the Act). The Respondent is Simplot Australia Pty Ltd (the Respondent). The parties are covered by AMWU and Simplot Australia Pty Limited National Collective Agreement 2011-2014 1 (the Agreement), which applies at five sites operated by the Respondent, including sites at Ulverstone and Devonport in Tasmania. The dispute concerns the implementation of a new classification structure at those sites in accordance with clause 18 and Appendix 6 of the Agreement. Mr T McCauley from the AMWU appeared on behalf of the Applicant. Mr D McLaughlin of M & K Lawyers was granted leave to appear on behalf of the Respondent pursuant to s.596(2)(a) of the Act. The matters in dispute involve detailed and long standing issues which have to date been unable to be resolved in conference. Leave was accordingly granted on the basis it would assist the Commission in enabling them to be dealt with more effectively given the detail and complexity involved.

The Issue to be Decided

[2] Clause 18 of the Agreement “Classification Structure” states as follows:

“18. CLASSIFICATION STRUCTURE

18.1 The national classification structure is contained in Appendix 6.

18.2 The parties covered by this Agreement have agreed that the new classification framework for food employees, with additional pay points, will be implemented from March 1, 2012.

18.3 The parties agree that fundamental to the development of this classification structure is a commitment to:

a) developing a more highly skilled and flexible workforce;

b) providing employees with career opportunities through appropriate training to acquire additional skills; and

c) removing barriers to the utilisation of skills required, particularly demarcation barriers.

18.4 Work will be performed within the classification structure limited only by the following:

a) An employee’s competence to perform such work;

b) That the work can be performed safely having regard to the individual and the organisation as a whole;

c) That he employee has the time to be able to carry out the work.

18.5 To achieve the above stated intent:

a) There will be a process of examining classifications and determining their appropriateness to the proposed new structure;

b) Where necessary, jobs will be redesigned and where this is to occur, the fundamental principle will be;

c) within the limits of accredited training or work experience, as the case may be, all employees will undertake and complete the main task and as much of other tasks which are incidental, peripheral, practical and appropriate to their main task.” 2

[3] The following clause in the Agreement, clause 19, “Training” continues to indicate:

“The National Training Framework is appended as Appendix 6.” 3

[4] Appendix 6 is referred to in clauses 18 and 19 and is entitled “Operations Training Framework”. It indicates at the outset under the heading “Background:”

“The following document outlines the guiding policies and principles for Operations Training initiatives at all Simplot Australia Pty Ltd plants for all our Award personnel. It provides a framework for the implementation of a competency based classification structure for Metal Trades and Food Processing Operators. It incorporates nationally recognised and accredited competencies of the Metal and Engineering industry and other qualifications including the Certificate in Food Processing.” 4

[5] It continues to indicate at page 88 under the heading “Competency Based Classification Structure – Food:”

“The following defines the new competency based classification framework for each plant which will come into effect from 1st March 2012 and relates specifically to Food Production personnel. All Food Production employees will transition to this new classification structure from 1st March 2012 based on the competencies required to be used in their employment. Skills required to be used at the site are matched with relevant nationally endorsed industry competency standards This process will be overseen by the relevant site EDC and may require the assistance of an agreed RTO.” 5

The new competency based classification framework is set out on the remainder of page 88.

[6] Implementation arrangements for the new classification structures at each Simplot site are then detailed in Appendix 6 under the heading “Process for Implementing CBT and Achieving Formal Recognition of Competency – 20 December 2010.” The various sites referred to are at Bathurst, Ulverstone and Devonport. Appendix 6 also notes the Kelso site is not included because it:

“....has primarily concluded implementation and has used the Bathurst process.” 6

[7] The Applicant submits the combined intention of clause 18 and Appendix 6 is for the new classification structure to be operative from 1 March 2012, with the processes set out in the implementation arrangements being a necessary precondition to enable this to occur, and therefore to be completed prior to that date. However, this has not occurred. It also submits the Respondent continues to frustrate the processes required to transition employees to the new structure. It seeks various orders in response, including an order that when employees have been finally transitioned into the competency based classification structure the Respondent back pay to employees any difference in remuneration paid under the new structure compared with that paid since 1 March 2012.

[8] The Respondent rejects this view. It submits the combined intent of clause 18 and Appendix 6 is that employees will transition to the new classification structure from 1 March 2012. It points to what it describes as “key parts” of Appendix 6 in support of its submission that it has complied with the implementation processes set out at page 100 for the Devonport plant and page 97 for the Ulverstone site.

[9] In its submission it has done nothing to deliberately delay what was intended by way of implementation of that new classification structure. It also takes issue with the Commission’s power to make an order relating to payment of back pay on the basis it is an exercise of judicial power and beyond the Commission’s jurisdiction. That issue remains to be determined depending upon the terms of any orders that might be contemplated.

[10] The substantive issues to be determined therefore concern what clause 18 and Appendix 6 of the Agreement intend and, in particular, whether transition to the new classification structure was to have been completed by 1 March 2012 or whether, as the Respondent contends, the process was intended to commence and be ongoing from that date.

The Evidence and Submissions

[11] Ms Jennifer Dowell is the National Secretary of the Food and Confectionery Division of the AMWU. She has been responsible for negotiation of national agreements with the Respondent since 2000. She indicated that implementation of competency based training was first agreed to by the Respondent in 1998 and dealt with in the Simplot Australia Pty Ltd (National Framework) Agreement 2000 7, and then in each of the four successive agreements. She said the Respondent’s failure to follow the agreed implementation process for competency-based assessment and training has been an ongoing issue and source of disputation over a long period. Implementation agreements for the various sites were finally agreed upon in 2010 and subsequently included in the current Agreement, but there have been ongoing problems with the implementation process at the Tasmanian plants.

[12] She said that despite an agreement reached in December 2010 for the National Food Institute to service the sites as the Registered Training Organisation (RTO) for the purposes of implementation it was not engaged by the Respondent until April in the following year. In addition, throughout 2011 and 2012 there were ongoing disputes between the parties over the implementation process and, in particular, the Respondent’s insistence in completing all assessments at each certificate level before proceeding to the next level, despite the fact this was contrary to the agreed process. For example, in July 2012 the Respondent refused access to training in the Certificate II core competency units to certain groups of employees at Devonport and Ulverstone, despite the view of both Employment Development Committees (EDC’s) and the fact that employees at other Simplot sites were given access.

[13] She said the implementation processes for the Ulverstone and Devonport plants in Appendix 6 outlined the process whereby employees self assess against a list of competencies for their broad work areas. This self assessment is subsequently reviewed and endorsed by the relevant team leader/supervisor and the Respondent is now in possession of these results. However, despite the views of their own team leaders and EDC members and the RTO, the Respondent has done nothing to change the unilateral position taken by local site management to refuse access to certain employees to the training necessary to achieve formal recognition of the core competency units at Certificate II.

[14] She also said –

• all employees at both sites who have achieved formal recognition for the Certificate II core competency units were required to undertake this training;



• the mission statement in Appendix 6 requires that employees “Receive formal recognition of Nationally accredited competencies” 8;



• item 14 of the principles for competency based classification states employees cannot be required to use part of a competency. If the Respondent requires them to use those skills they must be given the competency unit. This would apply to those employees assessed to Certificate III, who have been refused the training to allow formal recognition of those core competency units; and



• item 15 of the principles states employees cannot be left one competency unit short of a Certificate level, and this applies to a number of employees refused accreditation for core competency units.

[15] She believed the requirements of the Agreement were clear and could not understand the continued refusal by the Respondent to abide by its terms. She did not agree that the National Food Institute needed to be “scoped” to see if it was authorised to deliver the 2010 Food Industry Training package. It had already been agreed in December 2010 it would deliver the assessment, recognition and training in accordance with the 2010 package and the delay until the following year was unnecessary and unwarranted.

[16] The agreed position was, per clause 18.2 and page 88 of the Agreement, that by no later than 1 March 2012 all employees would be transferred to the new competency-based classification structure set out at page 88 of the Agreement. Where further training was appropriate in accordance with the competency-based training processes it was to be conducted along with recognition of competencies and be completed prior to 1 March 2012, so that the new competency-based classification structure could apply.

[17] Ms Dowell said delays in completing the competency based training processes had a cost impact for employees in cases where recognition of their competencies led to increased remuneration. The competency standards require a theoretical component for all core competencies to be held. Accordingly, until employees do this core theoretical training they cannot have sufficient competencies to achieve Certificate II or Certificate III levels. She understood approximately 50 employees at Ulverstone and 22 at Devonport have not been allowed to complete this core unit training and accordingly have been denied their rights to assessment, training and recognition under the competency-based training processes. She reiterated that under the Agreement all of this training was to be provided prior to the implementation of the new competency based classification structure at all Simplot sites on 1 March 2012. She said there was nothing to prevent Certificate III employees being assessed for competencies used at the same time as Certificate II employees, apart from the management approach at the sites in Tasmania. The assessments have been completed. The problem now was that the training to allow employees to have the relevant accreditation was not being provided.

[18] She indicated in cross examination that the dispute concerned the fact the Respondent was to have completed the assessment process and translated employees into the new classification system prior to 1 March 2012. The implementation processes had been agreed in negotiations in December 2010 and, at the Respondents request, it was agreed the starting date for the new classification structure would to be at least 12 months in advance so it would have the opportunity to complete the implementation process prior to that date. Her clear view in those negotiations was that the new classification structure would come into effect from 1 March 2012.

[19] Mr Leigh Monson is employed as a process worker at the Ulverstone site and has been a union delegate since November 2004. He attended a delegates meeting with company representatives including Ms Donna James, the Human Resources Manager, in June 2012. There was an extensive discussion at the meeting about the failure of the Respondent to finalise implementation of the skills assessment and training necessary for the new competency-based classification structure. He said Ms James indicated the employer had a significant role in determining what training be provided to employees. He indicated these issues continued to be discussed at subsequent meetings and delegates were told it was the employer’s prerogative to choose who received training for the Certificate II core modules.

[20] He indicated in cross-examination he understood all employees on site would be given the opportunity to participate in the Certificate II core training. He did not dispute the fact that the employer had a role in deciding who was provided with training, however, he believed the core training was a basic food safety requirement for all employees.

[21] Ms Sue Creed is employed as a laboratory technician at the Devonport site and has been a Union delegate since 1988. She is also a member of the Employment Development Committee. At a meeting of the Committee in June 2012 she raised the issue of the Respondent’s failure to finalise implementation of the skills assessment and training necessary for the introduction of the new competency based classification structure. She was concerned the employer was providing casual employees with training before it was provided to permanent employees as required by the implementation process in the Agreement. She said Ms James indicated the Respondent wanted to commence training of casuals. Ms James also indicated in response to a question about whether the National Food Institute could begin to assess permanent employees for their Certificate III competencies that the Respondent was not commencing those assessments yet. Ms Creed indicated in cross examination that whilst the minutes of the meeting she had referred to were different from what was set out in her witness statement she believed her statement was correct.

[22] The Applicant submitted in conclusion that the Agreement sets out a detailed and prescriptive process whereby food production employees at the Respondent’s Devonport and Ulverstone sites were to have their skill competencies assessed before a new classification structure was introduced on 1 March 2012. The implementation of competency-based assessment and training, and the introduction of a competency-based classification structure, had been the subject of long-standing dispute. However, an agreed implementation process for both sites and an agreed implementation date, being the point at which employees would move from the old structure to the new, had been agreed upon and subsequently confirmed in the current Agreement. It submitted if the date of 1 March 2013 was not relevant to the implementation process it would not need to have been included. However, that was not the case. The entirety of the current Agreement, including Appendix 6, supported the conclusion that it was intended 1 March 2012 was the date by which the transition to the new classification structure would occur.

[23] The Applicant also provided a detailed chart setting out the clear steps required in the process involved; the requirement to use a competency, the identification of any relevant gaps, the development of a necessary training plan in response, appropriate recognition of those competencies and, finally, translation into the new competency-based classification structure. It contrasted that chart and those processes with the evidence of Ms James, in particular, and the processes she used which, it submits, demonstrated employees had not been properly assessed or, if they had, they had not been given access to appropriate training. It also meant there was a risk that deficiencies in the process meant employees who have transitioned to the new structure could be disadvantaged by not having transitioned to the correct level.

[24] In its submission the failure to implement the transition in accordance with the express terms in the Agreement has meant employees have been disadvantaged in a way that has resulted in savings for the Respondent. It also submitted that apart from not completing the processes by 1 March 2012 the Respondent was further delaying progress by not allowing Certificate III training to be conducted in parallel, and it again failed to understand or at least comply with its obligations under the Agreement. There was, in its submission, an entitlement to training which the Respondent could not ignore or apply in a different way.

[25] The Applicant also acknowledged that employees were only entitled to payment for competencies held if they were required to hold and use those competencies as a requirement of their position. In its submission the RTO should now be allowed to get on and do what is required to enable all employees to complete the competency based training process and the transition to the new structure. It submits that once that process is completed employees should be entitled to back payment of the difference between any amount they are entitled to at that time, and the amount they have actually been receiving since 1 March 2012.

[26] The Applicant also submits the orders it seeks are open to the Commission to make in this process of private arbitration. In this context it referred to the decision in the Private Arbitration case 9 which it submits authorises the Commission to make decisions as to the legal rights and liabilities of the parties to an agreement. It also referred to the decision in Qantas Flight Catering10 as authority again for the proposition that a dispute settlement procedure in an agreement enables the Commission to make decisions as to the legal rights and liabilities of parties, and in doing so the Commission is not exercising judicial power but a power of private arbitration.

[27] The Applicant also made reference to the principles it submits are relevant to the interpretation of enterprise agreements and referred, in particular, to the decision of a Full Bench of Fair Work Australia in Cape Australia Holdings Pty Ltd T/A Total Corrosion Control Pty Ltd v Construction, Forestry, Mining and Energy Union 11 (Cape Australia Holdings) when it stated:

“[7] As to the general approach to the construction of enterprise agreements the observations of French J, as he then was, in City of Wanneroo v Australian Municipal, Administrative, Clerical and Services Union (Wanneroo) are apposite:

“[53] The construction of an award, like that of a statute, begins with a consideration of the ordinary meaning of its words. As with the task of statutory construction regard must be paid to the context and purpose of the provision or expression being construed. Context may appear from the text of the instrument taken as a whole, its arrangement and the place in it of the provision under construction. It is not confined to the words of the relevant Act or instrument surrounding the expression to be construed. It may extend to ‘...the entire document of which it is a part or to other documents with which there is an association’. It may also include ‘....ideas that gave rise to an expression in a document from which it has been taken’ - Short v FW Hercus Pty Ltd (1993) 40 FCR 511 at 518 (Burchett J); Australian Municipal, Clerical and Services union v Treasurer of the Commonwealth of Australia (1998) 80 IR 345 (Marshall J).”

[8] While his Honour’s observations were made in the context of interpreting an award the same principles apply to the interpretation of enterprise agreements. For example, similar observations were made by their Honours Gummow, Hayne and Heydon JJ in Amcor v CFMEU:

“Clause 55.1.1 must be read in context. It is necessary, therefore, to have regard not only to the text of cl 55.1.1, but also to a number of other matters: first, the other provisions made by cl 55; secondly, the text and operation of the Agreement both as a whole and by reference to other particular provisions made by it; and, thirdly, the legislative background against which the Agreement was made and in which it was to operate.”

[9] The fact that the instrument being construed is an enterprise agreement is itself an important contextual consideration. As French J observed in Wanneroo, at paragraph [57]:

“It is of course necessary, in the construction of an award, to remember, as a contextual consideration, that it is an award under consideration. Its words must not be interpreted in a vacuum divorced from industrial realities - City of Wanneroo v Holmes (1989) 30 IR 362 at 378-379 and cases there cited. There is a long tradition of generous construction over a strictly literal approach where industrial awards are concerned - see eg GeoA Bond and Co. Ltd (in liq) v McKenzie [1929] AR (NSW) 498 at 503-504 (Street J). It may be that this means no more than that courts and tribunals will not make too much of infelicitous expression in the drafting of an award nor be astute to discern absurdity or illogicality or apparent inconsistencies. But while fractured and illogical prose may be met by a generous and liberal approach to construction, I repeat what I said in City of Wanneroo v Holmes (at 380):

“Awards, whether made by consent or otherwise, should make sense according to the basic conventions of the English language. They bind the parties on pain of pecuniary penalties.” 12

[28] The Respondent denies that it has delayed the implementation of the new classification structure at the Devonport and Ulverstone plants. In its submission the evidence indicates it has complied with every step in the implementation processes set out at page 100 of the Agreement for Devonport and page 97 for Ulverstone. Employees have been appropriately reclassified under the new competency based classification structure when they have been recognised as competent. It also submits the process of implementation is an ongoing one. All Certificate I work has been completed and, apart from employees who are one competency short of Certificate II, all Certificate II work has also been completed. Certificate III assessments are now being progressed.

[29] It also submits the competency-based structure is subject to skills “held and used”, and does not create a right for employees to be recognised in respect of competencies not required for their particular job. It also rejects any suggestion it has sought to delay the implementation process by determining that no Certificate III assessments take place until all Certificate II assessments have been completed, or by determining that certain groups of employees will not have access to the training necessary for recognition of the core Certificate II competencies.

[30] It refers specifically to the following provisions contained in Appendix 6 in the Agreement in support of its submissions:

• Access (Page 81) – Employees will have access to higher classification and training subject to the needs of the enterprise.



• Competency Based Classification Structure – Food (Page 88):




“All Food Production employees will transition to this new classification structure from 1st March 2012 based on the competencies required to be used in their employment. Skills required to be used at the site are matched with relevant nationally endorsed industry competency standards.” 13

• Step 9 – Reclassification (Page 92):




“Once you have completed your assessment and it is agreed that you hold and use those competencies and if your mix of competencies entitles you to be classified at a higher level, then the paper work will be completed, the pay office will be notified and you will be paid the appropriate rate by your next pay period. Where employees are to be reclassified as a result of their assessment, site management will undertake this process. Existing classification levels will be honoured where they have been established, providing the employee is competent, willing and required to perform the determined applications for that level.

Where it is agreed that you hold but do not use the competency, you will not be paid for that competency.” 14

• Principles for Competency-Based Classifications (Page 103):




“3. New employees will be classified in accordance with relevant competencies held and used as a requirement of their assigned position.

...

12. Progression into a higher classification is to be based on the needs of the enterprise and/or skills used by an Employee.” 15

[31] Ms Donna James is employed by the Respondent as a Human Resources Manager. She is based at the Ulverstone site but is responsible for implementation of the competency-based structure across all three sites in Tasmania. She said she believed the Respondent has complied with all its obligations in that implementation process.

[32] She said the Respondent appointed the National Food Institute (NFI) as the site RTO in April 2011 after presentations by both the NFI and the Skills Institute of Tasmania. She said it was the NFI who proposed to assess employees for Certificate I level first so that everyone achieved this level, with further levels to follow after that. This was accepted by the site Employment Development Committees. The NFI subsequently developed a competency matrix of each job on site and an assessment of the required competencies for each role.

[33] She said the steps subsequently followed in relation to implementation do not necessarily follow in the order set out in the implementation plan, however, at the end of the initial process all employees were assessed through recognition of current competency as holding Certificate I. This did not require reclassification of any employees under the structure as all permanent employees were already classified as being the equivalent of level 3 on the classification structure. Training and assessment of employees for Certificate II then continued from January 2012. She also indicated employees were being translated to the new classification structure when each employee is recognised as competent by the NFI. Training plans were also developed to fill any gaps with agreed timetables and training in respect of competency gaps provided by NFI.

[34] She said a progress report dated 31 January 2013 indicated a review of currently held Certificate I and II competencies was now largely completed and a Certificate III review will be completed by February 2013, with a structured training program for Certificate III to be developed.

[35] Ms James said she disputed that this was contrary to the agreed process. It was consistent with the proposal put forward by the NFI and accepted by the EDC in April 2011. She also disputed that the Respondent has refused to deal with Certificate III competencies, but it was not prepared to accept a situation where employees are given training in competencies which are not required for their particular job function as this would impose a significant and unnecessary cost. She referred specifically to Principle 3 of the Principles for Competency Based Classification at page 103 of the Agreement which state:

“New employees will be classified in accordance with relevant competencies held and used as a requirement of their assigned position.”  16

Principle 6 also states:

“The Company encourages training in the Food Processing Certificate or relevant AQF program beyond Level F1B, however this will not be compulsory unless the training is necessary for the employee to complete their job.” 17

Principle 12 also states:

“Progression into a higher classification is to be based on the needs of the enterprise and/or skills used by an Employee.” 18

[36] She said the Respondent’s view was that the classification structure and training programs are to be based on skills held and used by employees in the performance of their job, whereas the Applicant contends all employees are to be trained in the core competency units for Certificate II, regardless of whether those competencies are required in the performance of their jobs or not.

[37] She agreed there had been a robust discussion in the delegates meeting in July 2012, which highlighted the disparity in views as to the requirements in the Agreement. The delegates’ view was that the employer does not determine its training requirements. This responsibility was “taken out of their hands by virtue of the agreement.” 19 She said the Respondent disagreed with this view. However, Ms James did not dispute saying to the delegates that Certificate III assessments should not commence until the assessment of core units for Certificate II had been completed.

[38] Mr James indicated in cross-examination the new classification structure did not apply on 1 March 2012 because employees weren’t competent at that time. The Agreement said “from 1 March 2012” rather than “on 1 March 2012”. She also said the Respondent was only required to provide a training plan for employees if it required them to use those competencies. If not then training would not be provided. It was a case of “hold and use.”

[39] In re-examination she said a range of factors associated with the operation of the plants and the availability of the RTO had led to some delays in the intended timetable, but she had never been told the process was to be completed by 1 March 2012, although that had been a goal. However, that timeframe was not achieved because of factors outside of the Respondent’s control. In terms of the current situation there were still some outstanding appeals to be worked through and a “handful of people” had not been able to complete the necessary training. In regard to the Certificate III employees the Respondent was now waiting on the training to take place and those employees, once deemed competent, would then transition to the new classification structure as well, meaning that it was an ongoing process.

[40] The Respondent’s submissions also dealt with the nature of the orders sought by the Applicant in resolution of the matters in dispute. It referred, in particular, to the order dealing with payment of the difference between the rates payable under the new classification structure and those actually provided to employees since 1 March 2012. This is, in its submission, an enforcement provision which requires a finding that the Agreement has been breached, with a penalty then being imposed. The Respondent agreed with the Applicant’s submissions that in dealing with the current dispute the Commission is entitled to look at past events, as part of the process of determining the true meaning and intent of a provision in the Agreement, and then determining a resolution of those matters in dispute. However, in its submission, this did not extend to a power to determine an alleged breach of the Agreement, and a subsequent order for back pay in the way that a court might. It also submitted, in any case, it was not possible to make orders that had any effect prior to 8 September 2011, when the current Agreement came into operation, given that the Commission’s powers of dispute resolution are only conferred by the terms of the present Agreement.

[41] It concluded by indicating the Agreement clearly states employees transition from 1 March 2012 and the evidence indicated the process was a time-consuming and ongoing one. The date of 1 March 2012 was accordingly intended to be the commencement of the transition process and if something different had been intended the Agreement would have stated “...all employees will transmit by 1 March 2012.” 20

[42] It also submitted that the Commission should consider a different set of orders from those proposed by the Applicant because they would not necessarily deal with the matters in dispute, given the disagreement between the parties about what was actually required in terms of compliance with the process of implementation. It accordingly proposed the following:

• The Applicant identify within a period of 2 weeks those employees it believes are “under classified” according to the new structure.



• The Respondent then provide a response in writing as to its view about the status of each of those employees and highlighting, in particular, any differences in view. This response to be provided within 2 weeks of receipt of the information from the Applicant.



• In the following week the parties would then meet to try and resolve any outstanding differences.



• A full day meeting would then be convened, if necessary, with the Commission involved to work through any outstanding issues. The Respondent proposed that the RTO, the National food Institute, also be involved in that meeting.



• At the end of that process if outstanding issues remain the parties would be at liberty to again make formal application to the Commission to seek to have those matters resolved.

In its submission this process would enable the parties to “drill down” to the circumstances of individual employees and enable an appropriate response to be developed in each case as part of the process of drawing to a close the transition to the new competency-based classification structure.

Consideration

[43] The legal principles governing the construction of industrial agreements are well known and well established, and have been referred to by the parties in their submissions. In Kucks v CSR Limited 21 Madgwick J held:

“It is trite that narrow or pedantic approaches to the interpretation of an award are misplaced. The search is for the meaning intended by the framer(s) of the document, bearing in mind that such framer(s) were likely of a practical bent of mind: they may well have been more concerned with expressing an intention in ways likely to have been understood in the context of the relevant industry and industrial relations environment than with legal niceties or jargon. Thus, for example, it is justifiable to read the award to give effect to its evident purposes, having regard to such context, despite mere inconsistencies or infelicities of expression which might tend to some other reading. And meanings which avoid inconvenience or injustice may reasonably be strained for. For reasons such as these, expressions which have been held in the case of other instruments to have been used to mean particular things may sensibly and properly be held to mean something else in the document at hand.

But the task remains one of interpreting a document produced by another or others. A court is not free to give effect to some anteriorly derived notion of what would be fair or just, regardless of what has been written into the award. Deciding what an existing award means is a process quite different from deciding, as an arbitral body does, what might fairly be put into an award. So, for example, ordinary or well-understood words are in general to be accorded their ordinary or usual meaning.” 22

[44] Whilst that decision concerned the construction of an award the same approaches been followed in the construction of industrial agreements. In Australian Meat Industry Employees Union v Coles Supermarkets Australia Pty Ltd 23 Northrop J held:

“The increase in the number of certified agreements gives rise to an area of possibly greater dispute as to the construction of provisions contained in the agreements. The parties may adopt a multitude of different structures and methods of terminology. No common pattern may develop. Nevertheless certified agreements are to be construed adopting the same methodology as that used in construing awards. In Kucks v CSR Limited (1996) 66 IR 182 Madgwick J, sitting as a judge of the Industrial Relations Court of Australia, at 184 expressed his opinion on the legal principles to be applied in construing awards under the Act. I agree with that statement of principles. They have even stronger application to certified agreements.” 24

[45] In United Firefighters Union of Australia v Metropolitan Fire and Emergency Services Board 25 a Full Court of the Federal Court in dealing with a dispute resolution clause in a certified agreement stated:

“[51] The parties agree that the proper approach to the construction of industrial instruments was stated by Madgwick J in Kucks at 184. His Honour’s statement of the principles was followed by a Full Court in Ansett Australia Limited v Australian Licensed Aircraft Engineers’ Association [2003] FCAFC 209 at [8] and by two Justices of the High Court in Amcor Limited v Construction Forestry Mining & Energy Union [2005] HCA 10 at [96] per Kirby J and at [130] per Callinan J. That was the approach which was adopted by the learned primary judge.

[52] A narrow or pedantic approach is not to be taken. The intention of the framers of the document is to be ascertained objectively, bearing in mind that they are likely to have been people of a practical bent of mind. Their intention may well have been expressed in ways likely to have been understood in the relevant industry, rather than in "legal niceties or jargon."; see Kucks at 184.

[53] Clearly enough, the language of the instrument must be construed in its context, having regard to the subject matter and the wording of the entire agreement; Short v FW Hercus Pty Limited [1993] FCA 51; (1993) 40 FCR 511 at 518. The context will include the statutory context in which the agreement is made. .” 26

[46] In CPSU, the Community and Public Sector Union v Telstra Corporation Ltd 27 a Full Bench of the Australian Industrial Relations Commission, as it then was, summarised the principles dealing with ambiguity in agreements in stating:

“[33] The judgement of the High Court in Codelfa Constructions Pty Ltd v State Rail Authority (NSW) established widely accepted principles for resolving ambiguity in contracts. In that case Mason J stated the rule thus:

‘The true rule is that evidence of surrounding circumstance is admissible to assist in the interpretation of the contract if the language is ambiguous or susceptible of more than one meaning. But it is not admissible to contradict the language of the contract when it has a plain meaning. Generally speaking facts existing when the contract was made will not be receivable as part of the surrounding circumstances as an aid to construction, unless they were known to both parties, although, as we have seen, if the facts are notorious knowledge of them will be presumed.’

[34] In BP Australia Pty Ltd v Nyran Pty Ltd Nicholson J distilled, by reference to Codelfa, the following points of principle for resolving ambiguity in contracts:

• it is necessary firstly to determine whether the contract has a plain meaning or contains an ambiguity;



• if the contract has a plain meaning, evidence of surrounding circumstances will not be admissible to contradict the language of the contract;



• if the language of the contract is ambiguous or susceptible of more than one meaning evidence of surrounding circumstances is admissible to assist in the interpretation of the contract;



• the concept of surrounding circumstances is to be understood to be a reference to the objective framework of facts. It will include:



• evidence of prior negotiations so far as they tend to establish objective background facts known to both parties and the subject matter of the contract;



• facts so notorious that knowledge of them is to be presumed;



• evidence of a matter in common contemplation and constituting a common assumption.

[35] After referring to the foregoing points of principle Nicholson J continued as follows:

‘From the evidence of that setting the parties’ presumed intention may be taken into account in determining which of two or more possible meanings is to be given to a contractual provision. What cannot be taken into account is evidence of statements and actions of the parties which are reflective of their actual intentions and expectations. Objective background facts can include statements and actions of the parties which reflect their mutual actual intentions. That is, evidence of mutual subjective intention of the parties to a contract may be part of the objective framework of facts within which the contract came into existence. It is the mutuality which makes the evidence admissible.’” 28

[47] I am satisfied the principles set down in these decisions are those that must be applied to determine the present matter. They require that ordinary or well understood words are given their ordinary or usual meaning. Where that meaning can be evidently discerned the Commission’s role is not to give effect to some other notion about what might be perceived to be fair or just or reasonable. The language of an Agreement should not be contradicted when it has a plain meaning. However, if that language is ambiguous or susceptible of more than one meaning then evidence of the surrounding circumstances, or the “objective framework of facts,” can be admissible to assist in that process of interpretation.

[48] Clearly the parties have a different view about the intent of clause 18 of the Agreement and the processes set out in Appendix 6. Those differences go to a number of aspects of what is involved but at their heart are concerned with the intent of the words “from 1 March 2012.” The Applicant submits the translation or transition of employees to this new competency-based classification structure should have been completed by this date. The Respondent has a different view. It submits 1 March 2012 is instead intended to be the point at which the ongoing process of translation/transition was to commence. In its submission this has occurred and is now an ongoing process that will continue until completed.

[49] The initial task in the determination of this matter, given the divergent views of the parties, is to consider the appropriate approach to be applied in terms of what was intended by the reference to “from 1 March 2012” in the Agreement and the attached Appendix 6, where it appears in the preamble on page 88 setting out the new “Competency Based Classification Structure – Food” in the following terms:

“The following defines the new competency based classification framework for each plant which will come into effect from 1st March 2012 and relates specifically to Food Production personnel. All Food Production employees will transition to this new classification structure from 1st March 2012 based on the competencies required to be used in their employment. Skills required to be used at the site are matched with relevant nationally endorsed industry competency standards. This process will be overseen by the relevant site EDC and may require the assistance of an agreed RTO.” 29

[50] As indicated, the Applicant has a clear view that 1 March 2012 is the point at which the process of transition was to be completed. The Respondent has a different view and submits it is the point at which the process of transition is to commence. As it submitted the words do not state “by 1 March 2012” or, alternatively, “as at 1 March 2012 employees will have...” which would be a plain and ordinary form of expression that put the intended meaning beyond doubt. I am satisfied the meaning of the words can be viewed as being ambiguous and capable of more than one meaning as the respective views of the parties indicate and, therefore, it is the principles and approach that the authorities have determined be applied in such circumstances that must be applied to determine this matter. As indicated, with particular reference to the decision of the High Court in Codelfa, evidence of the surrounding circumstances, or the “objective framework of facts,” can be admissible in such circumstances to assist in the process of determining intention.

[51] I am satisfied that the evidence of Ms Dowell is significant in this context. She indicated that the issue of competency based assessment and training had been at issue for more than a decade prior to the making of the current agreement. It remained an ongoing issue during this time. In 2010 a framework was finally agreed upon for the implementation of a competency based classification structure for food processing operators, with the NFI agreed to as the RTO to assist the process, and separate implementation plans developed for the various sites operated by the Respondent in different parts of the country. Appendix 6 sets out these implementation processes for the various sites. The Bathurst Implementation Process is dated 8 November 2010 and the Ulverstone and Devonport implementation processes are both dated 20 December 2010.

[52] These dates support the evidence about the surrounding circumstances that indicate it was intended and agreed a substantial lead time be allowed to enable necessary assessment and training be carried out prior to commencement of the new competency based classification structure. The date of 1 March 2012 was accordingly agreed to on this basis. Ms Dowell’s largely uncontested evidence in this context also indicated that at the Respondent’s other plants in New South Wales these processes of assessment, training and translation appeared to have been progressed and implemented in a manner consistent with a March 2012 completion date. It seems it is only at the Respondent’s plants in Tasmania that a different approach was taken.

[53] As indicated, the evidence I have referred to was largely uncontested. The Respondent did not bring witness evidence that contradicted or provided a different view about the circumstances concerning the agreement arrived at for the implementation of a competency based classification structure at the Respondent’s plants. I am accordingly satisfied the evidence of the surrounding circumstances, or the “objective framework of facts,” indicates that 1 March 2012 was intended to be the point in time from which the new competency-based classification structure would apply, with employees having been assessed, trained where necessary, and translated into that structure by that time, rather than it being the point at which competency based assessment, training and translation to the new structure would commence from.

[54] This is not to say the process was not going to be ongoing post 1 March 2012. The implementation plans in Appendix 6 for the Ulverstone and Devonport sites both make reference to “Post Implementation” encompassing “ongoing training of current and new full-time employees” and formulation of “an agreed plan for the systematic training of Seasonal and Casual employees to the required levels.” 30 It also provides that “All individual employees have the right to apply for reclassification at any time, should they believe they are using competencies above those required for their current classification level.”31 The Employment Development Committee is also given an important and continuing role in this ongoing “Post Implementation” stage.

[55] Clearly, it was envisaged there would be ongoing work carried out post 1 March 2012. However, I am also satisfied the reference to “Post Implementation” in these site-specific implementation processes again points to the objective framework of facts indicating there was a specific point at which employees were to transition to the new competency based classification structure, and that point in time was 1 March 2012.

[56] As the evidence indicates there are a number of other issues that are also in dispute. These go, in particular, to the nature of the process involved in the transition from the previous classification structure to the new competency-based structure. The question of employees being assessed for Certificate III competencies at the same time as those required at the Certificate II level was one such issue. In the Applicant’s submission this concerns the Respondent’s insistence on completing all assessments at each Certificate level before proceeding to the next level. Having reviewed the Agreement and Appendix 6, and the specific site implementation plans for Devonport and Ulverstone in that Appendix, there is nothing that suggests training in regard to Certificate III competencies need be deferred until all Certificate II level training has been concluded. For example, nothing in the implementation plan for the Ulverstone site at pages 97 – 99 in Appendix 6 suggests training need be completed at one level before it is provided at the next level. Training plans are instead to be developed in conjunction with the Employment Development Committee and overseen by the RTO, with regular progress reports provided back to the EDC.

[57] A further issue that was raised on a number of occasions concerns when the entitlement to be paid at a higher level exists. Under the heading “Access” in Appendix 6 at page 81 it is clear employees only have access to higher classification levels and training opportunities based on various criteria, including “demonstrated competency” and “using a competency”, together with “the needs of the enterprise.” The section of the Appendix entitled “Implementing Classification Structures” commencing at page 91 under “Step 9 – Reclassification” also makes clear that the entitlement to be paid at a higher level only exists if an employee holds and uses competencies that entitle classification at that higher level. It continues to indicate “Where it is agreed that you hold but do not use the competency, you will not be paid for that competency.” 32

[58] The principles for competency based classification in Appendix 6 at page 103 also make clear at point 14 and 15 that:

“14. Employees can’t be given credit for part of a competency. If an employee doesn’t meet all the requirements of a competency and it’s decided by the Company that he/she is required to use a competency, then the employee will be given that competency provided they agree to backfill the remaining requirements by the agreed time.

15. Employees will not be left one competency short of a Certificate Level, an appropriate competency will be identified through the EDC and the employee will be provided with the required training” 33

[59] The Applicant also acknowledged in its evidence and submissions that employees were only entitled to payment for competencies held if they were required to hold and use those competencies as a requirement of their position.

[60] Given the decision I have come to about the date from which the transition to the new competency based classification structure was to take place it is now incumbent on all involved to ensure the site implementation processes are concluded at Devonport and Ulverstone, as soon as possible, in order to conclude the process of transition to the competency-based classification structure. This acknowledges that there will also be ongoing processes involved as the “Post implementation” provisions in the site specific implementation processes indicate.

[61] It is presumed that there has been an ongoing process of implementation since this matter was last before the Commission and that implementation has progressed from that time. As indicated, every effort should now be made to complete the process. It is suggested that this should occur within 3 months of the date of this decision, but definitely no later than the end of 2013. It is not necessary to spell out in detail how this should occur. I am satisfied this detail is dealt with comprehensively in Appendix 6. It sets out the site specific processes to be followed. It deals with the role of the EDC and the “nationally endorsed training provider,” as the NFI is described at page 82. Pages 91 – 93 detail the steps involved, and the overriding Principles for Competency Based Classification that are to be applied are detailed at page 103. I am satisfied in combination they provide a detailed set of “riding instructions” that were agreed to at the time, and subsequently included in the current Agreement the parties have committed to. As such they should now be adhered to and observed, without divergence, regardless of any views anyone might have about their effectiveness, cost impact, or any other considerations in terms of the processes required to complete the transition to the competency based classification structure.

[62] The Respondent did propose a process whereby the dispute might be resolved. I propose it be utilised, in part, to bring the current matter to a sensible conclusion. The Applicant should identify any employees it believes have not been properly dealt with, according to the site specific implementation processes set out in Appendix 6, within 3 weeks of the date of this decision. The Respondent should then provide a response in writing as to the status of those employees and how it is intended they be dealt with in accordance with the site specific implementation processes and the timeframe set out in this decision. That response should be provided within 2 weeks of receipt of the information from the Applicant.

[63] The Applicant also submits an order be made requiring back payment of the difference between any amount an employee is entitled to under the new competency-based classification structure and their entitlements under the old structure. I am not satisfied this is appropriate. It was not provided for or anticipated in Appendix 6, or in any of the processes and/or procedures detailed in that document, or in the Agreement itself. Neither contain any reference to penalties or back payment where delay occurs. As indicated, I am satisfied instead that the immediate task at hand is to complete the translation process to the new competency based structure. Again, as already indicated, every effort should be made to complete that process within 3 months of the date of this decision. The parties should confer in the manner I have proposed to ensure that this occurs. I will issue Orders reflecting this decision if requested to do so by either party.

COMMISSIONER

Appearances:

Mr T McCauley appeared on behalf of the Applicant.

Mr D McLaughlin appeared on behalf of the Respondent.

Hearing details:

2013.

Launceston:

15 and 16 April.

 1   AE887944.

 2   Ibid at cl.18.

 3   Ibid at cl.19.

 4   Ibid Appendix 6 at page 81.

 5   Ibid Appendix 6 at page 88.

 6   Ibid Appendix 6 at page 91.

 7   AG812819.

 8   AE887944 Appendix 6 at page 81.

 9   Construction, Forestry, Mining and Energy Union v Australian Industrial Relations Commission (2001) 203 CLR 645.

 10   Australian Municipal, Administrative, Clerical and Services Union - New South Wales and ACT (Services) Branch v Qantas Flight Catering Limited, PR939695, 22 October 2003.

 11   [2012] FWAFB 3994.

 12   Ibid at paragraphs [7] - [9].

 13   AE887944 Appendix 6 at page 88.

 14   Ibid Appendix 6 at page 92.

 15   Ibid Appendix 6 at page 103.

 16   Ibid.

 17   Ibid.

 18   Ibid.

 19   Transcript at PN1485.

 20   Ibid at PN1971.

 21 (1996) 66 IR 182.

 22   Ibid at page 184.

 23 (1998) 80 IR 208.

 24   Ibid at page 212.

 25 [2006] FCAFC 84.

 26   Ibid at [51]-[53].

 27 (2005) 139 IR 141.

 28   Ibid at page 150-151.

 29   AE887944 Appendix 6 at page 88.

 30   Ibid Appendix 6 at page 95.

 31   Ibid.

 32   Ibid Appendix 6 at page 92.

 33   Ibid Appendix 6 at page 103.

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