“Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers' Union (AMWU) v Simplot Australia Pty Limited
[2018] FWCFB 1156
•23 FEBRUARY 2018
| [2018] FWCFB 1156 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.604—Appeal of decision
“Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU)
v
Simplot Australia Pty Limited
(C2017/7118)
JUSTICE ROSS, PRESIDENT | MELBOURNE, 23 FEBRUARY 2018 |
Appeal against decision [2017] FWC 5282 of Deputy President Dean at Sydney on 4 December 2017 in matter C2017/1991.
1. Introduction
[1] This matter is an appeal from a decision 1 of Deputy President Dean on 4 December 2017 (the Decision) which dealt with a dispute arising under the AMWU, CEPU and Simplot Australia Pty Ltd National Collective Agreement 2014-2017 (the Simplot Agreement). In the Decision the Deputy President concluded that the Simplot Agreement ‘does not require Simplot to pay an Ulverstone Food employee who is not rostered to work, and who does not work, on Easter Sunday’. On that basis the Deputy President dismissed the application.
[2] The Simplot Agreement was approved on 29 January 2015 and commenced operation on 5 February 2015, with a nominal expiry date of 28 February 2017. 2 The Simplot Agreement applies to Simplot Australia Pty Ltd t/a Simplot Australia (the Employer) and all employees covered by the classifications set out in the agreement who are employed at the sites listed in clause 5.1.
[3] The AMWU filed an application (C2017/1991) pursuant to s.739 of the Fair Work Act 1996 (Cth) (the FW Act) for the Commission to deal with a dispute arising under the Simplot Agreement. It was common ground that the Commission had jurisdiction to hear and determine the s.739 dispute.
[4] The dispute concerns the application of clause 34.1(c) to ‘Food Employees’ who work at the Simplot potato processing plant in Ulverstone in Tasmania. It is common ground that the Food Employees at the Ulverstone site operate under a 24/7, 12 hour shift rotating roster, across every day of the week and at various shift times. The relevant employees are paid a ‘roster rate’ such that whatever shift pattern they work they receive the same payment each week. If they are not rostered to work on a public holiday they receive an additional 7.6 hours pay, at their ‘Roster Rate’. The only exception to this arrangement is in respect of Easter Saturday. 3
[5] The question to be determined in the dispute is:
‘What does the Simplot Agreement require Simplot to pay an Ulverstone Food Employee who is not rostered to work and does not work on Easter Saturday?’
[6] The AMWU contends that these workers are entitled to receive 7.6 hours pay for Easter Saturday; Simplot contends that there is no such entitlement.
[7] In the proceedings at first instance the parties filed an ‘Agreed Statement of Facts’(Exhibit 1), in the following terms:
‘Background
1. Simplot is a major Australian Food Manufacturer, with sites in every state. Relevantly, Simplot operates a potato processing plant in Ulverstone, Tasmania.
2. The dispute relates to food processing employees at the Ulverstone plant (the Food Employees).
3. The AMWU, CEPU and Simplot Australia Pty Ltd National Collective Agreement 2014-2017 (the Agreement) applies to Simplot and the Food Employees, and covers the AMWU.
4. The AMWU is eligible to represent the industrial interests of, and has members among, the Food Employees.
The Dispute
5. Food Employees currently work 38 ordinary hours a week, averaged over a twenty-four week cycle.
6. Weekly wages for a Food Employee consists of:
a. 38 ordinary hours paid at the employee’s base rate per appendix 6 of the Agreement (the Base Rate); and
b. An averaged penalty payment reflecting shift penalties and rostered overtime (the Averaged Penalty Payment).
7. Where hourly payments are needed (for example, part-day sick leave), these payments are calculated based on an hourly rate inclusive of the Food Employee’s base rate and the Averaged Penalty Payment (the Roster Rate).
8. The exception to this is overtime, which is calculated on a Food Employee’s Base Rate.
9. Food Employees are required to work their ordinary hours in accordance with a roster set by Simplot. From time to time, the roster includes work on Saturdays and Sundays.
10. On Easter Saturday, a Food Employee who is not rostered to work, and does not work, does not receive any payment.’
[8] The AMWU also tendered a redacted pay slip (Exhibit 2), as follows:
[9] It is common ground that at present the Ulverstone Food Employees who are not rostered to work and do not work on public holidays are paid 7.6 hours pay at their ordinary time rate for all public holidays other than Easter Saturday and are not paid at all for Easter Saturday.
[10] There was no evidence tendered in the proceedings at first instance in relation to the ‘objective background facts’ (as mentioned in paragraphs [11] and [12] of the Berri principles; see paragraph [20] of this decision).
[11] As mentioned earlier, the term at the centre of the dispute is clause 34.1 of the Simplot Agreement:
‘34.1 Food Employees
a) The following days shall be public holidays for food employees (other than casuals) for the purposes of this Agreement:
i. New Year’s Day;
ii. Anniversary or Foundation Day;
iii. Good Friday;
iv. Easter Saturday;
v. Easter Monday;
vi. Anzac Day;
vii. Labour Day;
viii. Queen’s Birthday;
ix. Christmas Day;
x. Boxing Day;
xi. Union Picnic Day to be observed during the period 1 June to 15 November or at an alternative date agreed between the parties to this Agreement;
xii. August Bank Holiday which is the first Monday in August (in New South Wales);
xiii. Regatta Day (in Southern Tasmania only);
xiv. Recreation Day (in Northern Tasmania only); and
b) Where any other day is generally declared or prescribed by or under a State law to be observed generally within the State, or a region of a State, as a substitute for or in addition to any of the above days, then that day shall be observed as the public holiday in lieu of the prescribed day.
c) Payment for public holidays not worked
Employees (other than casuals) who are not required to work on public holidays during all or some of the hours which on any other day would have been their ordinary hours, shall be paid for such ordinary hours not worked at ordinary time plus where appropriate, the relevant shift penalties.’
[12] Clause 6 is also relevant, it deals with the interaction between the terms of the Simplot Agreement and the terms of the Food, Beverage and Tobacco Manufacturing Award 2010 (the FBTM Award)and the Manufacturing and Associated Industries and Occupations Award 2010:
‘6. RELATIONSHIP TO AWARDS
6.1 The Food, Beverage and Tobacco Manufacturing Award 2010 and the Manufacturing and Associated Industries and Occupations Award 2010 are incorporated in this Agreement with the exception of the following clauses:
a) Food, Beverage and Tobacco Manufacturing Award 2010
i. Clause 7 – Award flexibility;
ii. Clause 8 – Facilitative provisions;
iii. Clause 13.4 – Casual conversion to full-time or part-time employment;
iv. Clause 19 – Redundancy;
v. Clause 21 – Apprentice minimum wages;
vi. Clause 22 – Adult Apprentice minimum wages;
vii. Clause 24 – Unapprenticed junior minimum wages;
viii. Clause 27 – Extra rates not cumulative;
ix. Clause 29.4 – Superannuation fund;
x. Clauses 30.1 to 30.5; xi. Clause 31 – Special provisions for shift workers; and
xii. Clauses 33.1, 33.6, 33.7, 33.8, 33.9 and 33.10.
b) Manufacturing and Associated Industries and Occupations Award 2010
i. Clause 7 – Award flexibility;
ii. Clause 8 – Facilitative provisions;
iii. Clause 23 – Redundancy;
iv. Clause 29 – Unapprenticed junior minimum wages; and
v. Clause 35.4 – Superannuation fund.’
[13] In the context of this particular dispute clause 37.3 of the FBTM Award is also relevant, it provides:
‘37.3 Rostered day off falling on public holiday
(a) Except as provided for in clauses 37.3(b) and (c) and where the rostered day off falls on a Saturday or a Sunday, where a full-time employee’s ordinary hours of work are structured to include a day off and such day off falls on a public holiday, the employee is entitled, at the discretion of the employer, to either:
(i) 7.6 hours of pay at the ordinary time rate; or
(ii) 7.6 hours of extra annual leave; or
(iii) a substitute day off on an alternative week day.
(b) Where an employee has credited time accumulated pursuant to clause 28.6, then such credited time should not be taken as a day off on a public holiday.
(c) If an employee is rostered to take credited time accumulated pursuant to clause 28.6 as a day off on a week day and such week day is prescribed as a public holiday after the employee was given notice of the day off, then the employer must allow the employee to take the time off on an alternative week day.
(d) Clauses 37.3(b) and (c) do not apply in relation to days off which are specified in an employee’s regular roster or pattern of ordinary hours as clause 37.3(a)applies to such days off.’
2. The Appeal
[14] An appeal of the Decision is not as of right and permission to appeal must first be obtained. Subsection 604(2) requires the FWC to grant permission to appeal if satisfied that it is ‘in the public interest to do so’. The task of assessing whether the public interest test is met is a discretionary one involving a broad value judgment. 4 In GlaxoSmithKline Australia Pty Ltd v Makin a Full Bench of Fair Work Australia identified some of the considerations that may attract the public interest:
‘... the public interest might be attracted where a matter raises issues of importance and general application, or where there is a diversity of decisions at first instance so that guidance from an appellate court is required, or where the decision at first instance manifests an injustice, or the result is counter intuitive, or that the legal principles applied appear disharmonious when compared with other recent decisions dealing with similar matters...’ 5
[15] Other than the special case in s.604(2), the grounds for granting permission to appeal are not specified. Considerations which would usually justify the grant of permission to appeal include that the decision is attended with sufficient doubt to warrant its reconsideration or that substantial injustice may result if leave is refused. 6
[16] It is common ground that the Decision subject to appeal relates to the proper construction of a provision of the Simplot Agreement and accordingly the issue on appeal is whether the interpretation adopted by the Deputy President was correct. 7 The appeal principles relating to discretionary decisions do not apply.8
[17] The matter was listed for hearing in respect of both permission to appeal and the merits of the appeal.
[18] It is common ground that the Deputy President had jurisdiction to hear and determine the dispute (pursuant to clause 44 of the Simplot Agreement and s.739 of the FW Act).
[19] The essence of the Appellant’s case is that the Deputy President erred in her construction of clause 34 of the Simplot Agreement. The Respondent contends to the contrary, submitting that the Deputy President was correct and that permission to appeal should be refused.
[20] The principles relevant to the task of construing an enterprise agreement were recently summarised in Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union’ known as the Australian Manufacturing Workers Union v Berri Pty Ltd 9(Berri):
‘1. The construction of an enterprise agreement, like that of a statute or contract, begins with a consideration of the ordinary meaning of the relevant words. The resolution of a disputed construction of an agreement will turn on the language of the agreement having regard to its context and purpose. Context might appear from:
(i) the text of the agreement viewed as a whole;
(ii) the disputed provision’s place and arrangement in the agreement;
(iii) the legislative context under which the agreement was made and in which
it operates.
2. The task of interpreting an agreement does not involve rewriting the agreement to achieve what might be regarded as a fair or just outcome. The task is always one of interpreting the agreement produced by parties.
3. The common intention of the parties is sought to be identified objectively, that is by reference to that which a reasonable person would understand by the language the parties have used to express their agreement, without regard to the subjective intentions or expectations of the parties.
4. The fact that the instrument being construed is an enterprise agreement made pursuant to Part 2-4 of the FW Act is itself an important contextual consideration. It may be inferred that such agreements are intended to establish binding obligations.
5. The FW Act does not speak in terms of the ‘parties’ to enterprise agreements made pursuant to Part 2-4 agreements, rather it refers to the persons and organisations who are ‘covered by’ such agreements. Relevantly s.172(2)(a) provides that an employer may make an enterprise agreement ‘with the employees who are employed at the time the agreement is made and who will be covered by the agreement’. Section 182(1) provides that an agreement is ‘made’ if the employees to be covered by the agreement ‘have been asked to approve the agreement and a majority of those employees who cast a valid vote approve the agreement’. This is so because an enterprise agreement is ‘made’ when a majority of the employees asked to approve the agreement cast a valid vote to approve the agreement.
6. Enterprise agreements are not instruments to which the Acts Interpretation Act 1901 (Cth) applies, however the modes of textual analysis developed in the general law may assist in the interpretation of enterprise agreements. An overly technical approach to interpretation should be avoided and consequently some general principles of statutory construction may have less force in the context of construing an enterprise agreement.
7. In construing an enterprise agreement it is first necessary to determine whether an agreement has a plain meaning or it is ambiguous or susceptible of more than one meaning.
8. Regard may be had to evidence of surrounding circumstances to assist in determining whether an ambiguity exists.
9. If the agreement has a plain meaning, evidence of the surrounding circumstances will not be admitted to contradict the plain language of the agreement.
10. If the language of the agreement is ambiguous or susceptible of more than one meaning then evidence of the surrounding circumstance will be admissible to aid the interpretation of the agreement.
11. The admissibility of evidence of the surrounding circumstances is limited to evidence tending to establish objective background facts which were known to both parties which inform and the subject matter of the agreement. Evidence of such objective facts is to be distinguished from evidence of the subjective intentions of the parties, such as statements and actions of the parties which are reflective of their actual intentions and expectations.
12. Evidence of objective background facts will include:
(i) evidence of prior negotiations to the extent that the negotiations tend to establish objective background facts known to all parties and the subject matter of the agreement;
(ii) notorious facts of which knowledge is to be presumed; and
(iii) evidence of matters in common contemplation and constituting a common assumption.
13. The diversity of interests involved in the negotiation and making of enterprise agreements (see point 4 above) warrants the adoption of a cautious approach to the admission and reliance upon the evidence of prior negotiations and the positions advanced during the negotiation process. Evidence as to what the employees covered by the agreement were told (either during the course of the negotiations or pursuant to s.180(5) of the FW Act) may be of more assistance than evidence of the bargaining positions taken by the employer or a bargaining representative during the negotiation of the agreement.
14. Admissible extrinsic material may be used to aid the interpretation of a provision in an enterprise agreement with a disputed meaning, but it cannot be used to disregard or rewrite the provision in order to give effect to an externally derived conception of what the parties’ intention or purpose was.’
15. In the industrial context it has been accepted that, in some circumstances, subsequent conduct may be relevant to the interpretation of an industrial instrument. But such post-agreement conduct must be such as to show that there has been a meeting of minds, a consensus. Post-agreement conduct which amounts to little more than the absence of a complaint or common inadvertence is insufficient to establish a common understanding.’ 10
[21] As mentioned earlier, the Deputy President concluded that ‘the Agreement does not require Simplot to pay an Ulverstone Food employee who is not rostered to work, and does not work, on Easter Saturday’.
[22] As we have mentioned clause 6.1 of the Simplot Agreement incorporates, relevantly, certain clauses from the FBTM Award, including clause 37.3 from that award. Clause 6.2 of the Simplot Agreement deals with the interaction between the terms of the agreement and the incorporated FBTM Awardterms:
‘To the extent that there is any inconsistency between this Agreement and the Awards, then the provisions of this Agreement must apply. Where this Agreement is silent, then the relevant Award must apply. Where this Agreement is silent and the relevant Awards differ on conditions, the relevant parties covered by this Agreement will resolve the issues in accordance with the provisions of this Agreement, including the dispute resolution provisions at Clause 44, Dispute Resolution.’
[23] Relevantly, in the event of ‘any inconsistency’ between an agreement term and an award term, the agreement term prevails. An incorporated award term only applies in circumstances where the Simplot Agreement is ‘silent’.
[24] It is common ground that if clause 37.3 of the FBTM Award does apply then the AMWU’s contention that the relevant employees are entitled to receive 7.6 hours pay for Easter Saturday, must be rejected.
[25] In order for clause 37.3 of the FBTM Award to have any application to the resolution of the dispute the Simplot Agreement must be ‘silent’ on the relevant question.
[26] It seems to us that the Deputy President erred in her approach to the interaction of the agreement terms and the incorporated FBTM Award terms. At [48] of the Decision the Deputy President correctly sets out how the interaction rules in clause 6.2 operate, but then says, at [52]:
‘Clause 37.3(a) of the FBT Award applies to the circumstances of the current dispute. This clause is incorporated into the Agreement. It ought to be given some work to do.’ 11 [Emphasis added]
[27] It appears that the Deputy President proceeded on the basis that because clause 37.3(a) of the FBTM Award is incorporated into the Simplot Agreement (by virtue of clause 6.1) it ‘ought to be given some work to do’.
[28] As a general proposition it would be correct to say that in interpreting an instrument (be it a statue or an enterprise agreement) one should strive to give meaning and effect to each of its terms. We are not at liberty to consider any word or sentence as superfluous or insignificant. All words must prima facie be given some meaning and effect. 12 But in the context of the present matter that general approach must give way to the clear terms of clause 6.2, that is, an incorporated award term only applies if the Simplot Agreement is ‘silent’ on the issue. Importantly, the incorporated award terms have no work to do unless the agreement is silent on the issue.
[29] As set out earlier, clause 34.1(c) provides:
‘c) Payment for public holidays not worked
Employees (other than casuals) who are not required to work on public holidays during all or some of the hours which on any other day would have been their ordinary hours, shall be paid for such ordinary hours not worked at ordinary time plus where appropriate, the relevant shift penalties.’
[30] The subclause heading makes clear that the provision is intended to cover the circumstances in which payment is to be made ‘for public holidays not worked’. The issue in dispute turns on the meaning of the expression ‘not required to work on public holidays during all or some of the hours which on any other day would have been their ordinary hours’, and, in particular, on the meaning of the underlined words.
[31] The ‘ordinary hours’ of Ulverstone Food employees is not in contention – they are set out in Appendix 4: Ulverstone Site – Specific Provisions to the Simplot Agreement. 13
[32] We note that the AMWU’s submissions focus on the words ‘not required to work on public holidays’. If clause 34.1(c) omitted the underlined words there would be considerable force in the AMWU’s contention that the Ulverstone Food employees are entitled to 7.6 hours pay for when they are not rostered to work (and do not work) on Easter Saturday. This would be so because, as the AMWU contends, giving these words their ordinary meaning, the expression would encompass the circumstance where an employee is not rostered to work and is not otherwise directed to attend work.
[33] But the other words in clause 34.1(c) – ‘during all or some of the hours which on any other day would have been their ordinary hours’ – must have some work to do. Discerning the meaning of these words is not without difficulty. It seems to us that there are at least two arguable interpretations.
[34] First, if the words ‘which on any other day’ are interpreted to mean ‘but for the public holiday’, then an entitlement to payment would only arise if the employee would have been rostered to work on the day but, because it was a public holiday, Simplot did not require them to work. Hence, an employee would be entitled to payment under clause 34.1(c) if the employee, according to their regular roster, would have been rostered to work on Easter Saturday this year but Simplot did not roster or require them to work on that day because it is Easter Saturday (e.g. the employee works every second Saturday according to their roster and Easter Saturday falls this year on their ‘working’ Saturday, but Simplot does not roster or require them to work on that day because it is Easter Saturday).
[35] However such a construction has implications beyond the current dispute. It would mean that if any public holiday fell on a day which was an employee’s RDO according to their roster cycle then they would not be entitled to any payment under clause 34.1(c).
[36] As we have mentioned, it is common ground that the Ulverstone Food Employees who are not rostered to work and do not work on public holidays are paid 7.6 hours pay at their ordinary time rate for all public holidays other than Easter Saturday. As mentioned in Berri, post-agreement conduct may be relevant to the interpretation of an industrial instrument. The post-agreement conduct in the present matter may tell against the first arguable interpretation of clause 34.1(c).
[37] The second arguable interpretation is the one advanced by the AMWU.
[38] The AMWU contends that the reference to ‘any other day’ in clause 34.1(c) is a reference to any day on which the employee could be directed to work. 14 Counsel for the AMWU submitted that clause 34.1(c):
‘…is a provision that is absolutely directed in ensuring workers covered by this entitlement get either to take a day off work with pay, or get a day’s pay for every single public holiday in the year that they could potentially have worked’ 15
[39] In support of the above proposition Counsel relied on the public holiday payment provisions in the pre reform Food Preservers Award. It is common ground that clause 34.1(c) was informed by the terms of that award, though it does not replicate all of the award provisions. 16
[40] Contrary to the view expressed by the Deputy President (at [46] of the Decision) we are satisfied that clause 34.1(c) is ambiguous, in the sense that it is susceptible of more than one meaning. 17 In such circumstances it would be appropriate to admit any evidence adduced of the surrounding circumstances as an aid to the interpretation of the term.18 The difficulty in the present matter is that there is no such evidence before us and it would be appropriate to give the parties an opportunity to decide whether or not to adduce such evidence.
[41] In the circumstances we propose to grant permission to appeal, uphold the appeal and quash the Deputy President’s Decision. We adopt this course on the basis of the Deputy President’s erroneous findings as to ambiguity in relation to clause 34.1(c) and the application of clause 37.3(a) of the FBTM Award, particularly the conclusion that it ‘ought to be given some work to do’, without having first established whether the Simplot Agreement was silent for the purposes of clause 6.2.
[42] Given the limited nature of the material before us, in terms of the evidence to establish the relevant objective background facts, we will remit the rehearing of the dispute to Commissioner Saunders.
PRESIDENT
Appearances:
Ms L Saunders for the AMWU.
Mr D Murray from Ai Groupfor Simplot Australia Pty Ltd.
Hearing details:
2018.
Sydney;
20 February.
<PR600655>
1 [2017] FWC 5282.
2 [2015] FWCA 727.
3 See Transcript 12 September 2017 at [41]-[42] and [109].
4 GlaxoSmithKline Australia Pty Ltd v Making[2010] FWAFB 5343 at [26]-[27]; Lawrence v Coal & Allied Mining Services Pty Ltd t/as Mt Thorley Operations/Warkworth[2010] FWAFB 10089 at [28], affirmed on judicial review; Coal & Allied Mining Services Pty Ltd v Lawler [2011] FCAFC 54; Ferrymen Pty Ltd v Maritime Union of Australia[2013] FWCFB 8025; and NSW Bar Association v Brett McAuliffe; Commonwealth of Australia represented by the Australian Taxation Office [2014] FWCFB 1663.
5 (2010) 197 IR 266 at [27].
6 Also see CFMEU v AIRC (1998) 89 FCR 200; and Wan v AIRC (2001) 116 FCR 481. Also see the Explanatory Memorandum to what is now s.604, at paragraph 2328.
7 See: AMWU v Berri Pty Limited [2017] FWCFB 3005 at [35].
8 Australian, Administrative, Clerical and Services Union v Australian Tax Office (ATO)[2013] FWCFB 4752 at [11]-[13].
9 [2017] FWCFB 3005.
10 Ibid at [114].
11 [2017] FWC 5282 at [52].
12 Project Blue Sky v Australian Broadcasting Authority (1998) 194 CLR 355 at 382 per McHugh, Gummow, Kirby and Hayne JJ; Rezaei v Minister for Immigration and Multicultural Affairs [2001] FCA 1294 at [92]-[93] per Allsop J.
13 See clauses 11 and 14 of Appendix 4 to the Simplot Agreement.
14 Transcript of proceedings 20 February 2018 at [211]-[217].
15 Ibid at [215].
16 Ibid at [188]-[193].
17 Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1981-1982) 149 CLR 337 at 350 per Mason J; Grocon Constructors Pty Ltd v Construction, Forestry, Mining and Energy Union AG812496 PR924146 at [20] per Ross VP citing Re: Victorian Public Transport Enterprise Agreement 1994, Print M2454, 7 June 1995 per Ross VP, Polites SDP and Grimshaw C at p. 4; Re CFMEU Appeal, Print R2431, 25 February 1999 per Harrison SDP, Drake DP and Larkin C at para 13; Re Tenix Defence Systems Pty Limited Certified Agreement 2001-2004, Print PR917548, 9 May 2002 per Ross VP, O'Callaghan SDP and Foggo C.
18 See Berri, guideline 10.
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