“Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers' Union (AMWU) v Simplot Australia Pty Limited
[2022] FWC 2532
•12 DECEMBER 2022
| [2022] FWC 2532 |
| 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 Pty Limited
(C2022/3845)
| COMMISSIONER MIRABELLA | MELBOURNE, 12 DECEMBER 2022 |
Alleged dispute about terms under the enterprise agreement and the NES;[s186(6)].
On 4 July 2022, the “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU) filed an application under s.739 of the Fair Work Act 2009 (the Act) for the Fair Work Commission (the Commission) to deal with a dispute pursuant to clause 14 of the Simplot Australia Pty Limited and AMWU and CEPU Echuca Enterprise Agreement 2021[1] (the Agreement) on behalf of its member and Simplot Australia Pty Limited (Simplot) employee, Mr Ben Dunque.
Clause 14 of the Agreement is broadly expressed, empowering the Commission to deal with disputes including in relation to the National Employment Standards (NES).
The AMWU made its application raising a dispute pursuant to clause 16. The dispute relates to whether Simplot had reasonable grounds in declining Mr Dunque’s request for casual conversion.
The dispute has been the subject of four conferences and a hearing before me. The parties have filed and served outlines of submissions and witness statements pursuant to my directions, to which I have had regard in determining the question before me.
The AMWU argues that Simplot did not have reasonable grounds in declining Mr Dunque’s request for casual conversion and that the appropriate remedy is an order of casual conversion of Mr Dunque’s employment. Simplot submits that Mr Dunque was not entitled to make a request for casual conversion because he did not work a regular pattern of hours and any recent regularity in the hours Mr Dunque had been working was a result of a temporary increased reliance on Simplot’s casual workforce, which it says is reasonable grounds for refusing Mr Dunque’s request.
The question for the Commission to determine is as follows:
Given the circumstances, did Simplot Australia Pty Limited have reasonable grounds in declining Mr Dunque’s request for casual conversion?
Late in proceedings, Simplot raised concerns regarding the Commission’s jurisdiction to arbitrate the dispute.
I must first consider the matter of jurisdiction.
Interpretation principles (general)
The settled and uncontroversial principles for the interpretation of enterprise agreements were distilled in Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union v Berri Pty Limited[2] (Berri) and are as follows:
“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 aide 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.”
This is a non-exhaustive statement of the principles to be adopted and I have applied this approach in determining this dispute.
The Agreement
The Agreement applies to and covers Simplot in respect of its employees. Clause 5 of the Agreement is as follows:
“5 Relationship to Awards and Employment Conditions
5.1 This Agreement shall incorporate the terms of the Food, Beverage and Tobacco Manufacturing Award 2020 and Manufacturing and Associated Industries and Occupations Award 2020.
5.2 Where there is any inconsistency between the incorporated award terms and the other terms of this Agreement, the other terms of this Agreement shall take precedence to the extent of the inconsistency.
5.3 Simplot will not introduce any new facilitative provision contained in clause 7 of the Manufacturing and Associated Industries Award 2020 or in the Food, Beverage and Tobacco Manufacturing Award 2020 clause 7.
5.4 Simplot will not reduce existing pay and employment conditions and will continue to abide by existing agreements and arrangements and will only be varied by agreement through the collective bargaining process. The agreed existing agreements and arrangements at the Echuca site are contained in Schedule 5 to this Agreement.
5.5 Neither party shall be disadvantaged by the introduction of the Manufacturing and Associated Industries Award 2020 or the Food, Beverage and Tobacco Manufacturing Award 2020.”
Part D of the Agreement deals with “Types of Employment”. The substantive dispute concerns clause 16 which deals with casual employees. Clause 16 is as follows:
“Simplot recognises that it has a commitment to permanent employment and that casuals are primarily to be used to cover absenteeism, RDOs, periods of leave and special production demands.
a. Such number of casual employees may be engaged by Simplot as may be required to enable the plant to operate at full efficiency to cover RDOs.
b. Without derogating from sub-clause 16.a, casual hours in any one month will not exceed 20% of full time ordinary hours.
c. Casuals performing work covered by the Food, Beverage and Tobacco Award 2020 will be entitled to the casual conversion provisions in sub-clause 10.8 of the Award after 9 months and not 6 months.”
Clause 10.8 of the Food, Beverage and Tobacco Manufacturing Award 2020 (Award) was renumbered by the Commission to clause 10.7 on 27 September 2021.[3] Clause 10.7 of the Award reads as follows:
“Offers and requests for conversion from casual employment to full-time or part-time employment are provided for in the NES.
NOTE: Disputes about offers and requests for casual conversion under the NES are to be dealt with under clause 33—Dispute resolution.”
On 27 March 2021, amendments to the Act introduced a new NES in Division 4A of Part 2-2, incorporating changes regarding offers and requests for casual conversion.
Section 66F of the Act entitles a casual employee to make a request for casual conversion under the following circumstances:
The casual employee has been employed by their employer for at least 12 months;
The casual employee has worked a regular pattern of hours in the six-month period ending the day the request is given and without significant adjustment, the employee could continue to work these hours as a full‑time or part‑time employee;
The casual employee has not refused an offer of casual conversion made under s.66B in the six months ending the day the request is given;
The employer has not refused a previous request for casual conversion in the six months ending the day the request is given; and
The employer has not given the casual employee a notice in accordance with s.66C notifying the employee of its decision not to offer casual conversion.
Section 66H(1) of the Act provides that an employer must not refuse the request unless: the employer has consulted with the employee; there are reasonable business grounds to refuse the request; and those reasonable grounds are based on facts that are known, or are reasonably foreseeable, at the time of refusing the request. Section 66H(2) provides a non-exhaustive list of examples of “reasonable business grounds” for the purposes of subsection (1).
Section 66M provides as follows:
“66M Disputes about the operation of this Division
Application of this section
(1) This section applies to a dispute between an employer and employee about the operation of this Division.
(2) However, this section does not apply in relation to the dispute if any of the following includes a term that provides a procedure for dealing with the dispute:
(a) a fair work instrument that applies to the employee;
(b) the employee’s contract of employment;
(c) another written agreement between the employer and employee.
Note: Modern awards and enterprise agreements must include a term that provides a procedure for settling disputes in relation to the National Employment Standards (see paragraph 146(b) and subsection 186(6)).
Resolving disputes
(3) In the first instance, the parties to the dispute must attempt to resolve the dispute at the workplace level, by discussions between the parties.
FWC may deal with disputes
(4) If discussions at the workplace level do not resolve the dispute, a party to the dispute may refer the dispute to the FWC.
(5) If a dispute is referred under subsection (4):
(a) the FWC must deal with the dispute; and
(b) if the parties notify the FWC that they agree to the FWC arbitrating the dispute—the FWC may deal with the dispute by arbitration.
Note: For the purposes of paragraph (a), the FWC may deal with the dispute as it considers appropriate, including by mediation, conciliation, making a recommendation or expressing an opinion (see subsection 595(2)).
Representatives
(6) The employer or employee to the dispute may appoint a person or industrial association to provide the employer or employee (as the case may be) with support or representation for the purposes of resolving, or the FWC dealing with, the dispute.
Note: A person may be represented by a lawyer or paid agent in a matter before the FWC only with the permission of the FWC (see section 596).”
The dispute resolution procedure in the Agreement is at clause 14 and reads as follows:
“14 Dispute Settlement Procedure
The following procedure for the avoidance or resolution of disputes, including any
disputes in relation to the National Employment Standards, shall apply.14.1 The employee/s concerned shall first meet and confer with their immediate supervisor. The employee/s may appoint another person(s) to act on their behalf including a shop steward or delegate of their union.
14.2 Where an employee representative is involved, he or she shall be allowed the necessary time during working hours to interview the employee/sand the supervisor.
14.3 If the matter is not resolved at such a meeting further discussions involving more senior management, as appropriate. The employee may invite a union official(s) to be involved in the discussions. The Employer may also invite into the discussion an officer of the employer organisation to which the Employer belongs.
14.4 The shop steward or delegate shall be allowed, at a place designated by the Company, a reasonable period of time during working hours to interview the duly accredited union officials of the union to which they belong.
14.5 To facilitate the speedy and efficient resolution of disputes:
a. the party with the grievance must notify the other party at the earliest opportunity of the problem;
b. throughout all stages of the procedure all relevant facts must be clearly identified and recorded; and
c. sensible time limits must be allowed for completion of the various stages of discussion. However, the parties must co-operate to ensure that the disputes resolution procedure is carried out as quickly as possible.
14.6 If the matter remains unresolved, the parties may, jointly or individually, refer the matter to Fair Work Commission ('FWC') for conciliation.
14.7 Notwithstanding the terms of sub-clause 14.6, the parties may agree to refer a dispute to an alternative organisation/individual for conciliation.
14.8 Notwithstanding the terms of sub-clauses 14.6 and 14.7, a matter may be referred directly to the FWC for conciliation without all the steps in this procedure being followed if one of the following applies: a. the matter arises directly between the parties and it has already been subject to discussions between the parties; or b. the parties agree to the matter going to the FWC for conciliation.
14.9 If conciliation fails to resolve to matter in dispute, the FWC shall resolve the matter by arbitration, provided that the matter concerns the interpretation, application or implementation of a term or terms of this Agreement.
14.10 Subject to sub-clause 14.11, whilst the parties are attempting to resolve the matter, the parties will continue to work in accordance with the Award, this Agreement and their contract of employment, unless the employee has a reasonable concern about an imminent risk to his or her health or safety. Subject to the relevant provisions of the State Occupational Health & Safety Law, even if the employee has a reasonable concern about an imminent risk to his or her health or safety, the employee must not unreasonably fail to comply with a direction by Simplot to perform other available work that is safe and appropriate for the employee to perform.
14.11 Whilst these processes are being followed, the parties shall be committed to avoid stoppages of work, lockouts or other bans or limitations on the performance of work and Simplot shall ensure that all practices applied during the operation of the procedure are in accordance with safe working practices and consistent with established custom and practice at the enterprise.
14.12 Parties to agree to bear their own costs in any FWC proceedings.”
Agreed facts
Simplot is a food manufacturer that operates production facilities in various locations in Australia, including in Echuca.
Mr Dunque has been employed with Simplot on a casual basis and has worked in its Echuca production facility primarily as a production employee.
During his employment with Simplot, Mr Dunque has worked across various teams in the Echuca facility.
On 23 September 2021, Simplot provided Mr Dunque with written notification of its decision not to offer him casual conversion pursuant to s.66B of the Act.
On 6 April 2022, Mr Dunque made a written request for casual conversion. On 12 May 2022, Simplot responded in a letter to Mr Dunque outlining its reasons for refusing the request. Its reasons for refusal were that Mr Dunque did not work a regular pattern of hours that could be converted to a permanent role and that the majority of the hours that Mr Dunque had been working for the past nine months were shifts to cover short-term labour deficits, including shifts to cover absenteeism due to the effects of the COVID-19 pandemic.
Does the Commission have jurisdiction to deal with this dispute?
There is no dispute that the Agreement incorporates a dispute settlement procedure. Both parties agree that disputes regarding the NES are capable of being conciliated by the Commission. They do, however, dispute the scope of the matters the Commission can arbitrate.
Simplot’s submissions
Simplot contends that:
· I do not have the power to arbitrate this dispute.
· The dispute resolution function of the Commission is restricted under the terms of the dispute settlement procedure at clause 14 of the Agreement which only permits arbitration in relation to disputes over the “interpretation, application or implementation of a term or terms of this Agreement” (clause 14.9). Simplot submits this is not a dispute over the “interpretation, application or implementation of a term or terms of this Agreement”.
· This dispute is properly characterised as being one that relates to the NES and the Act.
· Although clause 10.7 of the Award has been incorporated into the terms of the Agreement as a result of the Award incorporation provisions of clause 5.1 and 5.2 of the Agreement, this clause contains no substantive rights capable of interpretation, application or implementation and it is merely a referencing statement which directs the reader’s attention to the operative rights which exist under the NES. Simplot supports this submission by reference to paragraphs [8]-[9] of Casual terms award review 2021,[4] the decision of the Commission varying the Award.
The AMWU’s submissions
The AMWU submits that:
· This dispute concerns the interpretation, application and implementation of clause 16(c) of the Agreement, which requires interpretation of the Award and the NES. The AMWU submits that clause 14.9 vests in the Commission the power to arbitrate disputes concerning clause 16(c).
· Clause 14.9 enables the Commission to have power to resolve a matter via arbitration if the matter before the Commission consists of some sort of concern within the Agreement, not just disputes relating to a term or terms of the Agreement. It says that the use of the word “concerns” in clause 14.9 is broad and unrestrictive. The AMWU submits that it is not used in conjunction with words such as “only concerns” or “solely concerns”. The AMWU supports this submission by reference to the Oxford Dictionary definition of “concerns”, which means relate to or be about. It also points to caselaw regarding the interpretation of the word “concerns”.[5] The AMWU submits that the terms “interpretation, application or implementation” are again not supplemented by the word “only” or “solely”; for example, “provided that the matter concerns the interpretation, application, or implementation of only/solely a term or terms of this Agreement.”
· Because of the broad and general wording of clause 14.9, this allows the Commission to arbitrate matters with the use of extrinsic materials, that being the NES.
· There is no indication that clause 14.9 of the Agreement was intended to prohibit the Commission in applying the NES in matters relating to clause 16(c).
· I should have regard to Berri in interpreting the meaning of clause 14.9, which notes that the disputed construction of an enterprise agreement will turn on the language of the enterprise agreement having regard to its context and purpose. The AMWU submits that clause 14, which is positioned above clause 14.9, states:
“The following procedure for the avoidance or resolution of disputes, including any disputes in relation to the National Employment Standards, shall apply.”
· Clause 14.9 and clause 14 as a whole are intended to resolve disputes that relate to industrial matters that arise within the workplace and there is no indication that clauses 14 and 14.9 have a purpose of restricting the NES from being used to interpret a term or terms of the Agreement.
· It would be unreasonable and would not only cause disruption for matters concerning clause 16(c) but would also cause disruption to other clauses of the Agreement relating to the NES, preventing parties to the Agreement their “natural right” to have the Commission determine workplace disputes relating to the NES.
· I should have regard to what a reasonable person would understand the common intentions of the parties to be, which is identified by the language of the Agreement, as per Berri. The AMWU submits that a reasonable person would understand that clause 16(c) for the purposes of clause 14.9 is the term the matter concerns and via the interpretation, application or implementation process, the mechanics of the NES needs to be given due consideration.
· This instrument was made pursuant to Part 2-4 of the Act, which provides for the NES. A clear indication that the Agreement intended to be bound by such obligations should be present here unless specific wording within clause 14 prevents the Commission arbitrating matters of the Agreement that relate to the NES.
· The Commission should not take an overly technical approach to interpreting clause 14.9 as to whether clause 16(c) can be arbitrated via interpretation, application or implementation of the NES.
· Clause 14.9 specifically should be read and interpreted via the industrial context it is written in and the purpose it serves to the parties, pointing to Gleeson CJ and McHugh J’s comments in Amcor Ltd v Construction, Forestry, Mining and Energy Union; Minister for Employment and Workplace Relations v Construction, Forestry, Mining and Energy Union[6] regarding the process of interpreting agreements by turning to the language of the particular agreement and interpreting it in light of its industrial context and purpose. The AMWU submits that because clause 14.9 exists within the context of a dispute resolution procedure clause of an enterprise agreement, its main purpose is to resolve disputes that arise in relation to industrial matters, those being matters pertaining to the Agreement and the Act including the NES. The AMWU submits that the purpose of clause 14.9, and thus clause 14 read as a whole, is not to prohibit the use of the NES as a “mechanic” to resolve concerns in the Agreement, as this would be absurd.
· I should look to Gray ACJ’s comments in Shop Distributive and Allied Employees’ Association v Woolworths Ltd[7] (Woolworths) which are as follows:
“Typically, such agreements are the product of hard negotiation, in which wording of particular clauses is often agreed without reference to other provisions of the same document”.
The AMWU submits that clause 14 clearly references the NES and that I should apply Woolworths and conclude that the words used in clause 14 of the Agreement have the same meaning when used in clause 14.9. The AMWU concedes that clause 14.9 does not expressly refer to the NES, but that the NES is referred to in clause 14 is sufficient to vest the Commission with power to arbitrate matters not only concerning a term of the Agreement but also applying or implementing the NES.
· I should avoid taking a narrow or pedantic approach to interpretation of clause 14.9, looking to the comments of Madgwick J in Kucks v CSR Ltd.[8]
· That it is an enterprise agreement being interpreted is an important contextual consideration.[9] The AMWU submits the industrial context of the Agreement means that interpreting it in a restrictive manner would not be its true purpose.
Simplot’s submissions in reply
Simplot submits that:
· Clause 16(c) is merely a referencing tool, directing the reader to the casual conversion provisions contained in the NES (the Act, Division 4A, Subdivision C, sections 66F-66H) which operate of their own force. Clause 16(c) contains no substantive rights and is not capable of interpretation, application or implementation.
· The effect of the amendments to the Award on 27 September 2021 was that for employees to whom the Agreement applies, casual conversion disputes were (and are) no longer able to be the subject of arbitration by the Commission.
· If a dispute is capable of being had entirely in the absence of the Agreement provisions, then it is not properly a dispute that concerns a matter contained within the Agreement. Simplot submits that its right to refuse conversion on reasonable grounds would exist in the same form in the absence of the Agreement, with the exception that the dispute resolution procedure that applies would differ.
· It is pertinent that clause 10.7 of the Award specifies that conversion offers and requests are provided for in (i.e. sourced from) the NES.
· The AMWU has mischaracterised the effect and operation of clause 16(c) of the Agreement by stating that it “gives” an entitlement of casual conversion to casual employees “in line with sub-clause 10.8” of the Award. Simplot submits that prior to the changes made to the Award on 27 September 2021, clause 16(c) simply operated to vary the terms of clause 10.8 of the Award as incorporated into the Agreement at that time in relation to one aspect of its operation. Simplot submits that the remainder of the entitlement to casual conversion was in fact derived from (as opposed to “in line with”) clause 10.8 of the Award, operating as a term of the Agreement by virtue of clause 5.1 of the Agreement.
· The AMWU further mischaracterises the work that clause 16(c) of the Agreement and clause 10.8 of the Award had to do, in the context of any dispute concerning casual conversion by characterising clause 16(c) of the Agreement as being the sole provision from which a dispute may stem, with clause 10.8 of the Award said to be used for the “interpretation, application or implementation” of clause 16(c). Simplot considers the correct position to be that prior to the 27 September 2021 change to the Award, a dispute about casual conversion may have stemmed from either:
oClause 10.8 of the Award, operating as a term of the Agreement by virtue of clause 5.1 of the Agreement; or
oClause 16(c) of the Agreement, but only insofar as the dispute concerned the aspect of casual conversion to which clause 16(c) relates.
Simplot submits that it would have been possible to have a dispute concerning an aspect of casual conversion where clause 16(c) of the Agreement had no relevance to the matters in dispute (for example, if the dispute did not relate to the period of service required to be completed to be entitled to request conversion). Simplot submits that following the 27 September 2021 amendment to the Award, clause 16(c) ceased to have any work to do.
· The NES is not incorporated by reference into the Agreement, so the substantive right to casual conversion is contained in the Act. Simplot supports this submission by reference to Award Modernisation Statement (AM 2008/1-12) [2008] AIRCFB 717[10] where it says that the Full Bench makes clear that the deliberate approach in formulating modern awards was to include in them a referencing tool to the NES on the basis that the NES is an independent safety net and that the conditions contained therein operate of their own force rather than as a substantive term in the award.
· The AMWU’s characterisation of the term “concerns” in this matter is not a relevant matter, because there is no substantive right in clause 16(c) that the Commission has power to arbitrate.
· The AMWU has misconstrued the way the dispute settlement procedure at clause 14 of the Agreement is intended to operate. Simplot agrees with the AMWU that in the proper construction of an enterprise agreement, consideration needs to be given to the language of the agreement, having regard to its context and purpose. Applying Berri, Simplot contends that the proper construction of clause 14 is as follows:
oClause 14 begins with a general statement that when it comes to avoiding or resolving disputes, including disputes in relation to the NES, the steps in the procedure set out in clause 14.1-14.13 shall apply.
oClauses 14.1-14.5 are concerned with steps regarding the escalation and efficiency of the dispute resolution procedure.
oClause 14.6 notes that if the matter remains unresolved, either party may refer the matter to the Commission for conciliation.
oClause 14.7 is an option whereby the parties may agree to an alternative conciliator.
oClause 14.8 is also concerned with how a matter may be referred to the Commission for conciliation.
oClause 14.9 deals with a situation where conciliation of a matter in the Commission has not resulted in resolution and provides a restricted power for the Commission to arbitrate the unresolved dispute, provided (i.e. on condition that) the matter concerns the interpretation, application or implementation of a term or terms of the Agreement.
· Simplot submits that up until clause 14.8, there is no limitation with respect to the matter that may be conciliated by the Commission. Simplot submits that, therefore, a dispute concerning a term of the NES that is not a term in the Agreement may be dealt with in accordance with the procedures of 14.1-14.8. Simplot submits that if it was the intention of the parties to have any matter brought before the Commission for arbitration, the parties would not have agreed to include the qualifying words, “provided that the matter concerns the interpretation, application or implementation of a term or terms of this Agreement.” Simplot contends that these words should not be regarded as superfluous or insignificant.
· The place and arrangement of clause 14.9 indicates that the parties have sought to include in the beginning of clause 14 (including clauses 14.1-14.8) a procedure for conciliation, and at clause 14.9 a limitation on the Commission’s power to arbitrate only on disputes that are capable of interpretation, application or implementation.
· I should have regard to the fact that the parties to the Agreement chose not to include that the NES is incorporated as a term in the Agreement.
· The AMWU expresses a view that parties to the Agreement have a “natural right to have the Commission determine workplace disputes relating to the NES”, but Simplot says this submission falls well short of explaining the source or authority of the purported natural right.
· The AMWU’s submission that because clause 14.9 is within the context of a dispute resolution procedure in the Agreement and that itself should be sufficient for the Commission to arbitrate matters “pertaining to the agreement and FW Act including the NES” ignores the prescribed dispute procedure in the Agreement which is the sole and seminal term authorising and instructing the Commission as to how disputes are to be dealt with.
· The AMWU’s submission that the wording in clause 14 should be given the same meaning in clause 14.9 ignores the textual difference of the terms prescribed in the dispute settlement procedure with respect to matters the Commission can deal with by conciliation and the matters described under clause 14.9.
· Clause 14.9 of the Agreement is not written merely as an escalation step to arbitration for any matter in dispute following a failure to resolve the dispute at conciliation and it would read entirely differently if that was the intention of the parties to the Agreement.
Consideration
I must determine whether the dispute in question is about the interpretation, application or implementation of a term or terms of the Agreement. That is, whether the relevant provision of the NES is a term of the Agreement and capable of being the subject of arbitration.
The dispute resolution clause begins with the unnumbered sentence, “[t]he following procedure for the avoidance or resolution of disputes, including any disputes in relation to the National Employment Standards, shall apply.”
The wording of the preamble of the numbered subclauses of clause 14 is expansive in that it specifically includes any disputes relating to the NES.
As is not unusual in dispute resolution clauses, a process for the resolution of disputed matters is set out. Clauses 14.6-14.8 provide for reference of a “matter” that remains unresolved for reference to the Commission for conciliation. The jurisdiction of the Commission to conciliate a dispute in relation to the NES is not in dispute.
Clause 14.9 sets out the requirement for arbitration in different terms. There is no longer a reference to a “matter” in the general sense as it applies to conciliation. The Commission can resolve a matter by arbitration, “provided that the matter concerns the interpretation, application or implementation of a term or terms of this Agreement.”
The words “provided that” cannot be superfluous; they must mean something. Particularly in the context of the more inclusive reference to a “matter” in the preceding subclauses, a plain reading of “provided that” must narrow the scope of arbitration. In the context of the words that follow “provided that”, a plain reading would result in the words meaning that the Commission can arbitrate “only if” the matter “concerns the interpretation, application or implementation of a term or terms” of the Agreement.
Section 257 of the Act provides for an award (an instrument) to be incorporated into an enterprise agreement, either as the award exists at a particular time or as it is in force from time to time. A plain reading of clause 5 of the Agreement incorporates the terms of the Award without restricting the Award as it existed at a particular point in time. That is, the Award, as it exists from time to time, is incorporated into the Agreement.
Clause 5 specifically incorporates the Award but does not incorporate the NES as “a term or terms” of the Agreement.
The Agreement makes mention of casual conversion at clause 16(c) by raising the entitlement to casual conversion by reference to clause 10.8 of the Award and changes the eligibility from six months to nine months.
At the time the Agreement was made, clause 5 incorporated the terms of the Award, including the casual conversion provisions in clause 10.8(a)-(k).
On 27 March 2021, amendments to the Act introduced a new NES in Division 4A of Part 2-2 incorporating changes to facilitate casual conversion requests. The effect of that was that the Award was amended on 27 September 2021 so that the comprehensive casual conversion provisions in clause 10.8 were deleted and replaced with a new clause numbered 10.7. This new clause does not detail any procedure or entitlement to casual conversion other than stating that offers and requests for same are provided for in the NES. The change means that casual conversion is no longer dealt with in the Award, but instead is dealt with in the NES. Additionally, the new clause 10.7 includes a note that disputes and requests regarding casual conversion under the NES are to be dealt with under clause 33, the dispute resolution clause of the Award. That clause provides for consent arbitration. In this matter, Simplot has not agreed to arbitration, but rather challenges the Commission’s jurisdiction to arbitrate the matter.
The NES operates separate and independent to the Agreement. Although the Award is incorporated into the Agreement, the Award as amended refers the matter of casual conversion back to the NES and the NES itself only provides for consent arbitration.
Conclusion
The Agreement incorporates the Award as amended from time to time. The relevant Award provision relating to casual conversion following legislative change and the Commission Full Bench decision[11] was replaced with a clause referring matters of casual conversion back to the NES. The Agreement does not incorporate terms of the NES in the Agreement and as such no part of the NES is “a term or terms” of the Agreement that can be subject to arbitration as per clause 14.9 of the dispute resolution clause therein.
For the reasons above, I am not satisfied that the Commission is properly vested with jurisdiction to determine the substantive dispute. The application is dismissed and an order to this effect will be issued with this decision.
COMMISSIONER
[1] AE512771.
[2] (2017) 268 IR 285 at 310, [2017] FWCFB 3005 at [114] (Berri), which modified the principles distilled in Australian Meat Industry Employees Union v Golden Cockerel Pty Ltd (2014) 245 IR 394 at 414-415, [2014] FWCFB 7447 at [41].
[3] Casual terms award review 2021 PR733846 (PR733846).
[4] PR733846.
[5] Firebird Global Master Fund II Ltd v Republic of Nauru [2015] HCA 43; Bio Minerals N.V v Jarrow Formulas, Inc Case No. CV08-5384.
[6] Amcor Ltd v Construction, Forestry, Mining and Energy Union; Minister for Employment and Workplace Relations v Construction, Forestry, Mining and Energy Union (2005) 222 CLR 241.
[7] [2006] FCA 616.
[8] (1966) 66 IR 182.
[9] The Australasian Meat Industry Employees Union v Golden Cockerel Pty Ltmited [2014] FWCFB 7447 at [22].
[10] [1], [16].
[11] PR733846.
Printed by authority of the Commonwealth Government Printer
<PR746068>
0
6
0