[2016] FWC 1041

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
(C2015/4087)

Tasmania
COMMISSIONER LEE	MELBOURNE, 19 FEBRUARY 2016

Alleged dispute concerning application of the Agreement - Whether relevant clauses in the agreement are permitted matters - Proper construction of the terms of the agreement - Does the agreement compel the respondent to provide for equivalent terms and conditions to the agreement to external personnel carrying out work on production line equipment since 5 February 2015.

[1] On 27 May 2015 the Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union known as the Australian Manufacturing Workers Union (the Applicant) notified an alleged dispute with Simplot Australia Pty. Limited (the Respondent) to the Fair Work Commission (the Commission) pursuant to the dispute settlement procedure contained in clause 44 of the AMWU, CEPU and Simplot Australia Pty. Ltd. National Collective Agreement 2014-2017 1(the Agreement).

[2] The application lodged stated that the dispute related to “… the interpretation of Appendix 8 Maintenance and Engineering Contractor and Labour Hire Arrangements (Appendix 8). A number of separate issues arise out of the interpretation of these clauses.”

BACKGROUND TO THE DISPUTE AND THE PROCEEDINGS THUS FAR

[3] I have previously set out the background to this dispute as part of the Statement and Directions issued on 14 August 2015. For convenience, I will reproduce part of that statement here:

“[1] On 27 May 2015, the “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU) made an application for the Fair Work Commission (the Commission) to deal with a dispute in accordance with a dispute settlement procedure contained in the AMWU, CEPU and Simplot Australia Pty. Limited National Collective Agreement 2014-2017 (the Agreement). The Agreement commenced operation on 5 February 2015. While the Agreement applies to a number of sites, this particular dispute relates to the Simplot Australia Pty Ltd (the Respondent) Ulverstone processing plant in Tasmania. I note that the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU) is covered by the Agreement and is a party to the dispute.

[2] In the application, it was stated;

“The dispute is about the interpretation of Appendix 8 Maintenance and Engineering Contractor and Labour Hire Arrangements (Appendix 8). A number of separate issues arise out of the interpretation of these clauses.”

[3] Particular definitional disputes were referred to including the definition of “production line”; “large” as it applies to maintenance work and “infrequent” as it applies to shut down maintenance work. There is also a dispute over the distinction between “core” and “non-core” work.

[4] I note that there was also a dispute over the application of the status quo provision. However, as a result of an undertaking provided by the Respondent in this matter it is no longer necessary to deal with that aspect of the dispute.

[5] Appendix 8 of the Agreement allows for contractors to be engaged for maintenance and engineering work in certain circumstances and not in others. Appendix 8 also requires that contractors, when they are permitted to be engaged under the terms of Appendix 8, are in certain circumstances to, “…receive wages and conditions in accordance with or that are no less favourable than this Agreement”.

[6] This dispute was triggered by the Respondents’ actions earlier this year to engage external personnel to perform certain maintenance work at Ulverstone and to not engage those external personnel on wages and conditions no less favourable than the Agreement. In doing so, the Respondent argues that they are complying with the terms of the Agreement. The Applicant argues that they are not. This is the central element of the dispute.

[7] There has been an attempt over the course of a number of conferences before me to agree on a question or questions that, when answered, would resolve the dispute. Despite the best efforts of the parties those attempts have been unsuccessful. Part of the difficulty is driven by both parties desire to resolve not just this dispute but also possible future disputes over the application of the clause. That is a desirable objective, but there are limits to the extent that can be achieved, in the context of settling the current dispute.

[8] Having considered the matter, I have determined that the question to be answered to resolve the dispute as currently framed is as follows:

“Since 5 February 2015 maintenance work on production line equipment has been carried out by external personnel at the Simplot Australia Pty Ltd Ulverstone site.

Does the application of Appendix 8 of the Agreement compel the Respondent to pay those external personnel wages and conditions in accordance with or that are no less favourable than the Agreement for that work?

[9] The directions set for the filing of material below reflects the consent position of the parties.

[10] I note that as part of my consideration of the terms of Appendix 8, a question arises as to whether some of the provisions are permitted matters within the meaning of the Fair Work Act 2009. I expect that the parties will make submissions on that question.

JURISDICTION

[4] The dispute settlement procedure is at clause 44 of the Agreement. No issue was raised suggesting that the necessary steps in the dispute settlement procedure had not been complied with. The dispute resolution clause provides for matters to be referred to the Commission for conciliation and/or arbitration after the various preliminary steps had been taken. A number of conferences at the Commission were held where I attempted to resolve the dispute by conciliation. The conferences failed to resolve the matters in dispute. Ultimately it was determined the dispute would be arbitrated.

[5] A question does arise as to whether the relevant clauses in the Agreement are “permitted matters” within the meaning of the Fair Work Act 2009 (the Act). While the focus of the dispute was on the interpretation and application of Appendix 8, clause 15 also deals with contractors and labour hire companies. Clause 15 and Appendix 8 are set out below:

“15. CONTRACTORS AND LABOUR HIRE COMPANIES

15.1 The parties covered by this Agreement are committed to a permanent weekly workforce consisting of full-time and part-time employees. While the Company wherever possible in accordance with the commitment of all parties, agrees to maximize permanent employment, the parties acknowledge that from time to time the Company may need to engage:

a) employees on a short term, seasonal, or casual basis to meet operational requirements; and
b) contractors and labour hire companies in accordance with this clause and Appendix 8, Maintenance and Engineering Contractor and Labour Hire Arrangements, for maintenance and engineering employees. Provided that nothing in this Agreement is intended to prohibit the engagement of contractors or labour hire companies.

15.2 The current workforce, that is the workforce consisting of directly employed maintenance and food production employees, will not be outsourced to a labour hire company during the life of the Agreement.

15.3 The Company shall directly employ all full-time, part-time, short-term, or seasonal or casual employees except in the circumstances provided for in this clause and Appendix 8 for maintenance and engineering employees.

15.4 A review process for non-permanent labour including contractor and labour hire arrangements must take place annually in all sites through the site Delegates Committee at a date to be determined at each site. Any disputes arising from the review process will be addressed in accordance with the dispute resolution process contained in this Agreement.

15.5 From time to time the Company may require the use of casual labour employed through a labour hire company/companies to meet production requirements. The Company may engage such employees in the following circumstances:

a) absenteeism, irregular work requirements or production peaks (not including seasonal sustained peaks) or special projects;

b) where Simplot employees do not have the required skills and qualification to perform the required work;

c) Employees of labour hire companies shall receive wages and conditions in accordance with, or that are no less favourable, than this Agreement.
Provided that prior to deciding to engage such employees, the Company will consider offering Simplot employees overtime or additional shifts in order to carry out the work.

15.6 The following criteria shall apply to the engagement of labour hire companies in circumstances other than those Clause 15.5:

a) There must be genuine consultation with the appropriate Union. Where possible this will be at least two months beforehand, during which time the parties shall endeavour to resolve any concerns raised as to the use of labour hire companies.

b) As far as is practicable/possible, the parties shall proceed to introduce labour hire companies by agreement with such agreement not to be unreasonably withheld.

c) Employees of labour hire companies shall receive wages and conditions in accordance with, or that are no less favourable, than this Agreement.

15.7 Consultation

Consultation requirements in this clause are in addition to the consultation requirements that may apply under any other provision of the Agreement.

15.8 Maintenance and Engineering Employees

Additional contractor and labour hire provisions applying to maintenance and engineering work in the Company’s various sites are found in Appendix 8.

APPENDIX 8: MAINTENANCE AND ENGINEERING CONTRACTOR AND LABOUR HIRE ARRANGEMENTS

1. DEFINITIONS

Contractor means a person working under a contract for the provision of services

Core Maintenance Work means work primarily associated with maintaining production line equipment in sound operating condition.

Maintenance and engineering employee means an employee of the Company who:

● this Agreement applies to;
● is performing work under this Agreement; and
● is covered by the Manufacturing and Associated Industries and Occupations Award 2010.

Non-Core Maintenance Work means other maintenance activities, including Core Maintenance Work, that is non-urgent, infrequent, large or complex. For the purpose of providing a guide on what constitutes non–core maintenance work clause 2.2 (c)(iii) of this Appendix outlines an indicative (but not exhaustive) list of such activities.

Project Work means capital projects relating to the purchase, installation, commissioning of new plant, equipment and buildings or the upgrading of existing plant, equipment and buildings.

2. EXTERNAL PERSONNEL
2.1 GENERAL

(a) Health and Safety
The Company will ensure that External Personnel are trained in the occupational health and safety procedures at the relevant Company sites.

(b) Review process
A review process for non-permanent labour including External Personnel arrangements will take place annually at all sites through the site delegates committee, at a date to be determined on each site.

2.2 MAINTENANCE AND ENGINEERING

(a) Scope and Application
This Clause 2 only applies to work which is normally, or can be, carried out by Maintenance and Engineering Employees under this Agreement.

(b) Core Maintenance Work
(i) Except for the circumstances outlined in this clause, the Company will directly employ workers to perform Core Maintenance Work during this Agreement.

(ii) Subject to the provisions of this clause 2, the Company may engage External Personnel to perform Core Maintenance Work in the following circumstances:
1. during periods of peak demand;
2. during planned machinery overhauls;
3. to cover any extended employee absences; or
4. where no available Maintenance and Engineering Employee has the skills or qualifications to perform the work required.

(iii) During this Agreement External Personnel engaged to perform Core Maintenance Work will receive wages and conditions in accordance with or that are no less favourable than this Agreement. Should the Company wish to engage External Personnel to perform Core Maintenance Work in circumstances other than those in clause 2(b)(ii), it may only do so following genuine consultation with the site delegates committee and as far as practicable/possible, by agreement (such agreement not to be unreasonably withheld).

(c) Non-Core Maintenance Work and Projects
(i) The Company may engage External Personnel to perform Non-Core Maintenance Work and Project Work at its discretion.

(ii) Prior to deciding to engage External Personnel to perform Non-Core Maintenance Work or Project Work, the Company will consider offering Maintenance and Engineering Employees Non-Core Maintenance Work or Project Work. In doing so, the Company will have regard to the following factors:

1. the skills and qualifications required to perform the Non-Core Maintenance Work or Project Work;
2. the impact it shifts will have upon the performance of Core Maintenance Work; and
3. the cost efficiency of offering overtime or additional shifts to Maintenance and Engineering Employees.

(iii) The following is an indicative list of Non-Core Maintenance Work which means other maintenance activities, including Core Maintenance Work, that is non-urgent, infrequent, large of complex:

● capital and civil works
● fabrication
● structural steel work
● sheet metal work
● motor rewiring
● oil analysis (other than sampling)
● new wiring and lighting maintenance
● major PLC programming
● complex vibration and condition analysis
● plumbing and gas fitting
● crane operation
● high voltage work (other than permit, supervision and switching)
● specialist maintenance support by OEM (for example Bosch, Wexxar, CPS, and
● JBT including repairs and overhauls for AGVs, ABB Robots, Poly Compactors,
● Hydraulic Power Packs, SMI
● testing and tagging,
● non-specialised out of service rebuilds,
● non-specialised/certification required equipment calibration,
● transformer maintenance,
● boiler (other than routine checks, operation and minor maintenance),
● compressed air
● refrigeration (other than routine checks, operation and minor maintenance). Note
● the Bathurst refrigeration system at the date of this Agreement requires core
● maintenance other than for major works,
● waste water treatment (other than routine checks, operation and minor
● maintenance)
● cooling tower service and support
● pressure vessel inspection and certification
● building maintenance work such as painting, cleaning, grounds maintenance,
● joinery and carpentry
● machining (other than breakdowns and minor improvements)
● pump overhauls
● motor and gearbox rebuilds

(d) New Technology
(i) Upon the introduction of new technology, equipment change or work methods,
Maintenance and Engineering Employees will be offered the opportunity to undertake training where it is available to enable them to:

1. understand the new technology, equipment change or work methods; and
2. maintain any new equipment.

(ii) Where appropriate training is not available, the Company will discuss this with affected Maintenance and Engineering Employees.

MANNING LEVELS

The Company will keep the permanent maintenance workforce levels sufficient to cope with regular maintenance programs and normal breakdown situations.
Where a review of these numbers becomes necessary, such review will be undertaken within the consultative arrangement contained in Clause 12 of this Agreement.”

[6] Section 172(1)(a) provides as follows:

“172 Making an enterprise agreement

Enterprise agreements may be made about permitted matters

(1) An agreement (an enterprise agreement) that is about one or more of the following matters (the permitted matters) may be made in accordance with this Part:
(a) matters pertaining to the relationship between an employer that will be covered by the agreement and that employer’s employees who will be covered by the agreement;”

[7] What a matter pertaining to the relationship between an employer and employees of that employer is, is the subject of an explanation in the Explanatory Memorandum. Given the conflicting interpretations as to what a permitted matter is, it is appropriate to consider the Explanatory Memorandum in interpreting the provision.

[8] Item 671 of the Fair Work Bill Explanatory Memorandum provides as follows:

“671. Whether a particular term is about matters pertaining to the employment relationship will depend on its precise construction, as well as the circumstances surrounding the particular employment relationship. Frequently, it will be obvious that a term pertains to the employment relationship - e.g., a term about the payment of wages or a term about hours of work and shift patterns. However, there are some terms where it is not so immediately clear whether the terms are about matters pertaining to the employment relationship (see, e.g., the discussion in Re Schefenacker Vision Systems Australia Pty Ltd, AWU, AMWU Certified Agreement 2004 [2004] AIRC 1064.”

[9] In Re Schefenaker Vision Systems Australia, Pty Ltd, AWU, AMWU Certified Agreement 2004 (Schefenaker) 2 consideration was given to whether a number of proposed clauses in an agreement which regulated the engagement of employees of labour hire agencies were permitted matters. The Full Bench observed in Schefenaker, “…the extent to which the agreement can regulate the contractual relationship between Schefenaker and labour hire agencies, yet still pertain to the relevant relationship, is obviously a question of degree.” 3

[10] Further clarity on the point is provided in Item 672 of the Explanatory Memorandum:

“672. It is intended that the following terms would be within the scope of permitted matters for the purpose of paragraph 172(1) (a):

● terms relating to particular staffing levels (subject to any other applicable legislative requirements or limitations) particularly if those terms are aimed at ensuring the health, safety and well-being of employees;

● terms relating to conditions or requirements about employing casual employees or engaging labour hire or contractors if those terms sufficiently relate to employees' job security - e.g. a term which provided that contractors must not be engaged on terms and conditions that would undercut the enterprise agreement;

● terms that would provide that casual employees are converted to permanent employees after a set period of time;

● terms that would prevent an employer from seeking a contribution or indemnity from an employee in respect of personal injuries or losses suffered by that person where such injuries or losses were cause by the employee in the course of their employment.”

[11] It is evident that both clause 15 and Appendix 8 considered overall are related to employee job security. The terms seek to regulate the circumstances in which contractors and labour hire employees are engaged as well as the terms on which they are engaged. Some of the clauses are unlikely to be permitted matters to the extent that they have the effect of preventing the engagement of contractors or labour hire employees. Clause 15.2 for example, clearly falls into this category. However, the clause that is the focus of this dispute, clause 2.2(b)(iii) of Appendix 8 (the parity clause) is directed at the terms and conditions of employment of external personnel. It is a provision designed to ensure that certain external personnel are not engaged on terms and conditions that undercut the Agreement.

[12] In Airport Fuel Services Pty Ltd v Transport Workers’ Union of Australia (Airport Fuel Services) 4 , the Full Bench considered a clause remarkably similar in its terms to the one here under question. The relevant clause in Airport Fuel Services was as follows:

“If, after consultation, the company decides to engage contractors and/or labour hire employees, those contractors and/or labour hire employees must be afforded at least the same terms and conditions of employment they would receive if they were engaged as employees of AFS performing the same work.” 5

[13] The Full Bench in Airport Fuel Services made the following observation in respect to that clause:

“As we have indicated it is clause 5.2…which is the type of provision envisaged at Item 672 of the Explanatory Memorandum to the Fair Work Bill 2008 and which, “[w]ithout preventing the use of labour hire employees or contractors…seeks to impose conditions which prima facie are arguably designed to prevent the undercutting of the proposed enterprise agreement, in order to protect the job security of the employees covered by the agreement.”” 6

[14] In Esso Australia Pty Ltd v “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU), Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU) and The Australian Workers’ Union (AWU) (The Esso Case) 7 the Full Bench considered a clause that sought to regulate the use of contractors as part of considering whether a Union claim contained non-permitted matters. The clause that was considered was in the following terms:

“USE OF CONTRACTORS

The Employer agrees to utilise only Esso employees in designated roles including supervisory, DPIC and team leader roles so as to drive ownership. Contractors will not be used to replace positions of the permanent workforce.

Where work exists that may require external resources (contractors) this work shall be conducted by supplementary contract labour. If the correct knowledge and resources are available within Esso employee numbers then the work will be allocated to Esso employees.
Or, if Esso employees are unable to fulfil the work requirements based on correct knowledge and resource capacity, relating to the scope of work to be performed, then the work may be let to contractors.

Where the Company does engage a Contractor to perform work covered by this Agreement, they must ensure the wages and conditions of the employees engaged to do this work, are no less favourable than the wages and conditions provided for in this Agreement for equivalent or similar work.

Any disputes arising out of this clause will be dealt with through the disputes procedure of this Agreement.” 8

[15] In considering that clause, the Full Bench stated:

“…we accept the appellant's submission that paragraphs 1, 2 and 3 (and probably 5) of the proposed clause are about non-permitted matters. In Wesfarmers Premier Coal Ltd v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (No. 2) French J, as he then was, found that "provisions restricting or qualifying the employer's right to use independent contractors" are not matters pertaining to the employment relationship” 9 [footnotes omitted]

[16] The Full Bench in The Esso Case consideredparagraph 4 to be a permitted matter. Again, its terms are not significantly different from the parity clause under consideration in this matter.

[17] As noted above, it is likely that some of the provisions of clause 15 and Appendix 8 may not be permitted matters to the extent that they prevent the employer engaging labour hire or sub-contractors. However, it is not necessary to determine this point as the controversy in this dispute centres on the parity clause and I am satisfied for the reasons above that the parity clause in Appendix 8 clause 2.2(b)(iii) is a permitted matter.

THE EVIDENCE

Mr. Gale

[18] Mr. Gale gave evidence for the Applicant. Mr Gale is a day worker, maintenance area leader for raw materials and peeler section. A summary of the evidence of Mr. Gale is as follows:

Permanent day worker maintenance staff are allocated an area in which they conduct daily checks to check the equipment is running efficiently.

Shift Fitters deal with break downs and minor adjustments.

The main areas of the Ulverstone Plant are raw material and peeler, cutter deck (including blanchers) fryer (including dryer) freezer tunnels and packing room and dispatch. There are also waste and granule areas dealing with by products. There is a further area known as field services.

Mr. Gale undertakes daily checks in the mornings of the machines to see if there is anything wrong with the machines. He makes assessments on the spot as to whether matters need to be dealt with immediately. If immediate action is required, this is reported to the Team Leader. The Team Leaders then normally discuss all such issues reported and determine if there is a need to shut down the machine to fix it.

After morning checks are completed he works through the work order system which is either improvement work or repair work that can be done without “breaking into the factory process.”

A number of improvements are made to machines during the weekly schedule to improve safety, efficiency and ergonomics. These works could include spare tread replacement, reducing or eliminating spillage points, taking steps to improve the replacement time of components, improving water recirculation, fabrication and installation of new water lines, introducing “cleaning in process” on sections and building structural steel platforms to improve access to equipment.

He undertakes repair work during the weekly schedule including on “rotables” and gearbox overhauls.

Maintenance day shut downs are where work is performed on equipment that needs to be isolated. All of the work done on a maintenance day shutdown involves work that requires the production line to be shut. The work undertaken on maintenance days includes preventative maintenance, improvement work, repairing minor problems such as broken framework, noisy gearboxes and bearings. These latter items would have been highlighted during the previous three weeks.

Maintenance days have changed in regularity and timing but are currently on Fridays for 8 to possibly 10 hours and occur every three weeks.

Approximately 5 hours is spent during the weekly schedule planning for maintenance day (12 hours for a longer shut down period) and Job Hazard Analysis reports are generally prepared in advance of the maintenance day.

Area Leaders supervise the tradespeople as they undertake periodic maintenance work orders, other corrective work orders and improvement work orders.

Periodic maintenance work orders (PM’s) establish the preventative maintenance work to be undertaken. PM’s are generated for specific pieces of equipment based on the history of that piece of equipment. The PM’s will list a set of tasks the workers are to pay attention to and could be for any piece of equipment and a number of examples are provided.

Corrective Maintenance Work orders are made up for components that have been identified during the daily checks or by shift workers as being substandard or defective. An example is given of a gear box with a leaky oil seal which may be able to last for three weeks which means it can wait and not disturb production. These orders are usually identified as a problem that will last until maintenance day. Examples are provided of these orders such as bearings, drive chains and structural failures, for example where bolts are missing.

Improvement work orders are usually designed and fabricated beforehand during the weekly schedule; however, they need to be done when the production line is off.

Mr. Gale states that labour hire employees could do all of the maintenance work of maintenance employees directly employed by the Respondent during a maintenance day or longer shut down. However, he does not consider labour hire employees to be as efficient as those directly employed by the Respondent.

There are longer twice yearly shutdowns where the work is similar to that undertaken on a maintenance day shut down but there are PM’s for every piece of equipment on that particular line. The twice yearly shut downs concentrate on a particular line and normally run for two weeks. There may also be corrective maintenance work orders and improvement work orders to implement during the twice yearly shutdowns. Some of the jobs will be a lot more labour intensive and a lot bigger than a maintenance day shut down. There could also be project work which could make the twice yearly shut down longer. Project work could take one week to four weeks.

Mr. Gale claimed that all of the work described in his statement is maintenance on production line equipment.

Mr. Morrow

[19] Mr. Morrow is the Engineering Manager for the Respondent. Mr. Morrow gave evidence for the Respondent. In summary his evidence was as follows:

He has been Engineering Manager for the Respondent for 2.5 years and has 20 years’ experience in maintenance engineering and management.

The Ulverstone factory produces packaged frozen potato products for domestic and export markets such as frozen french fries, coated french fries, hash browns, potato gems, instant mashed potato and potato starch.

There are 227 employees at Ulverstone with 48 in the Engineering Department.

The factory has four designated areas: the processing area, the packing area, the services area (which includes the engine rooms, waste water treatment plant, boilers, co-generation plant and refrigeration) and field services which is responsible for the harvesting of vegetables and storage. Of these four areas, he considers that the equipment in the processing area and the packing area are part of the “production line” because “… this equipment directly contributes to the conversion of the raw material to the finished sellable product.”

He does not consider that equipment in the services area is part of the production line as they do not contribute to the conversion of the raw material to the finished product. Furthermore, production employees (those who work in the processing and packing area) are not involved in the functioning of the equipment in the services area. He does not consider the equipment in the field services area as production line equipment as it is primarily concerned with receiving and long term storage of raw material which is independent of the conversion of that material into the sellable product.

Mr. Morrow gave broadly similar evidence to Mr. Gale as to the way in which the maintenance teams are structured and organised. Although there were some differences in the characterisation of some aspects of the way the work of the maintenance team is grouped.

Mr. Morrow said the work of the maintenance team can generally be grouped as:

Break down (equipment has stopped working and requires immediate attention).

Break in (equipment is a cause for concern and requires maintenance within the production period. It may require a stop in production).

Corrective (the equipment is defective but can still operate to an acceptable level).

Improvement (the equipment may require modification to enhance operation).

Preventative maintenance (equipment is inspected or maintained according to a schedule.

Statutory compliance (inspections and or maintenance to maintain a regulatory standard).

Of these groups of work, only break downs and break ins are “planned” meaning work that is pre-planned and will be done with either the production line on or off. If the production line needs to stop to do the work, it will be planned for a maintenance day or shut down.

There is some maintenance work, which is mechanical or electrical which is outside the work performed by the in-house maintenance team as it involves work on high risk plant which is outside the expertise of staff. Examples are significant work on boilers or refrigeration and motor alignment. Mr. Morrow also sets out a range of maintenance work, which would not normally be done by the in-house maintenance team, or in-house maintenance teams on other sites because they do not have the skills or specialised equipment. 10

Mr. Morrow provides specific detail on the work undertaken of the Area Fitters, Shift Fitters, Day Electricians, Shift Electricians and other maintenance employees.

The scheduling of maintenance days has varied from three to six week cycles. Currently the maintenance days are “compressed” to one 12 hour shift out of every 42 (once every three weeks).

The fundamental difference between the daily schedule and the maintenance day is that the work that needs to be done on maintenance days needs to be done when the machines are stopped.

There is planning and “gearing up” by way of dramatically increasing the labour supply to respond to the tasks that need to be undertaken on maintenance days. The size of the maintenance and engineering workforce increases on maintenance days from 40 to around 120. A combination of casuals, contractors and labour hire employees are used to supplement the regular labour force. Mr. Morrow considers that the scale of work that is undertaken on maintenance day makes it a large project and that the amount of planning, preparation, scheduling and coordination involved makes it complex.

A spread sheet of the maintenance activities carried out on 30 October was attached as CM 7 to the statement of Mr. Morrow. Maintenance activities that are scheduled but are not completed on a particular maintenance day are held over to the next maintenance day.

Mr. Morrow considers that a complex maintenance activity is one that involves multiple tasks on multiple machines in a limited timeframe.

Annual shut downs are the other occasion aside from maintenance days that the production is stopped to allow for machine maintenance. Annual shutdowns occur twice a year at Christmas for three weeks and mid-year for two weeks, typically in July.

The main difference between the work that is performed on maintenance days and the work that is performed on annual shut downs is that the jobs that are performed on annual shut downs typically take longer than one day to complete.

Mr Morrow submits that the Respondent’s desire to remove parity on maintenance days and shutdowns is not, as is suggested by Mr. Gale, to make it economical to replace in-house staff, but purely to remove unnecessary costs involved in the use of supplementary labour.

THE LAW TO BE APPLIED

[20] The general approach to the construction of enterprise agreements was considered recently in the Full Bench decision of the Commission, The Australasian Meat Industry Employees Union v Golden Cockerel Pty Ltd.¹¹ In that decision the Full bench stated as follows:

“Principles of construction of agreements

General approach

[19] The general approach to the construction of instruments of the kind at issue here is set out in the judgment of French J, as he then was, in City of Wanneroo v Australian Municipal, Administrative, Clerical and Services Union (Wanneroo):

“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). ”

[20] To this we add the oft-quoted observations of Madgwick J in Kucks v CSR Limited that a narrow pedantic approach to interpretation should be avoided, a search of the evident purpose is permissible and meanings which avoid inconvenience or injustice may reasonably be strained for, 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.”

[21] Although their Honours were each dealing with the proper interpretation of an award, the same principles are apt to apply to the interpretation of enterprise agreements. For example, similar observations were made in Amcor Limited v CFMEU (Amcor):

“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.”

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

“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 GeorgeA 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

[21] The Full Bench in Golden Cockerel also considered the law to be applied in respect to the use of extrinsic material as an aid to interpretation 13 and considered the application of the Acts Interpretation Act 1901 to enterprise agreements approved under the Act. 14At paragraph 41 the Full Bench helpfully summarised the principles as follows:

“Summary

[41]From the foregoing, the following principles may be distilled:

1. The AI Act does not apply to the construction of an enterprise agreement made under the Act.

2. In construing an enterprise agreement it is first necessary to determine whether an agreement has a plain meaning or contains an ambiguity.

3. Regard may be had to evidence of surrounding circumstances to assist in determining whether an ambiguity exists.

4. If the agreement has a plain meaning, evidence of the surrounding circumstances will not be admitted to contradict the plain language of the agreement.

5. If the language of the agreement is ambiguous or susceptible to more than one meaning then evidence of the surrounding circumstance will be admissible to aide the interpretation of the agreement.

6. Admissible evidence of the surrounding circumstances is evidence of the objective framework of facts and will include:

(a) 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;

(b) notorious facts of which knowledge is to be presumed;

7. The resolution of a disputed construction of an agreement will turn on the language of the Agreement understood having regard to its context and purpose.

8. Context might appear from:

(a) the text of the agreement viewed as a whole;

(b) the disputed provision's place and arrangement in the agreement;

9. Where the common intention of the parties is sought to be identified, regard is not to be had to the subjective intentions or expectations of the parties. A common intention is 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

10. 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.” 15

[22] The legal position on the powers of the Commission to arbitrate disputes generally is as follows Sub-sections 595(1) and (3) of the Act provide that:

“595 FWC’s power to deal with disputes

(1) The FWC may deal with a dispute only if the FWC is expressly authorised to do so under or in accordance with another provision in this Act.

…

(3) The FWC may deal with a dispute by arbitration (including by making any orders it considers appropriate) only if the FWC is expressly authorised to do so under or in accordance with another provision of this Act.”

[23] The Commission is empowered to deal with disputes through the operation of Division 2 of Part 6-2 of the Act, specifically sections 738 and 739. Relevantly, section 738 (b) provides that:

“738 Application of this Division

This Division applies if:

(b) an enterprise agreement includes a term that provides a procedure for dealing with disputes, including a term referred to in subsection 186(6); or

[24] Section 739(3) provides that:

“739 Disputes dealt with by the FWC

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

...

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

[25] The specific dispute settling procedure in the relevant Agreement needs to be considered in terms of the relevant law.

[26] The Agreement in this matter (which is a single enterprise agreement made in accordance with section 172(2) of the Act) includes a term that provides for a procedure for dealing with disputes at clause 44:

“44. DISPUTE RESOLUTION
44.1 Procedure
Issues in dispute regarding the application of this Agreement; matters pertaining between the employee and the Company; and matters pertaining between the Unions covered by this Agreement and the Company, will be resolved between the party or parties and their nominated representatives (which for employee(s) can include a nominated union delegate or official) in accordance with the following procedures:

Site-specific disputes

a) Where the dispute between the parties concern a matter(s) specific to a particular site, the party or parties with the grievance must, in the first instance, raise the matter with the relevant site management in a timely manner, at the Company’s premises, at which the employee works or where the dispute arises. If the matter is not resolved at site level in a timely manner, then the matter:

i. must then be raised with the relevant national management, if applicable; or
ii. may be referred to FWC for conciliation and/or arbitration.

b) Where a matter that has progressed to the national level, in accordance with 44.1(a)(i), is not resolved at that level, the matter may then be referred to FWC for conciliation and/or arbitration.

National disputes

Where the dispute between the party, or parties, concern national issues, the party, or parties, with the grievance must, in the first instance, raise the matter with the relevant national management. If the matter is not resolved at national level, then the matter may then be referred to FWC for conciliation and/or arbitration.

44.2 While the steps in Clause 44.1 are being pursued, the status quo, which is the situation existing immediately prior to the issue in dispute arising, will prevail. No party shall be prejudiced as to the final settlements by the continuance of work in accordance with this Agreement.

44.3 In the event of a party failing to observe these procedures, the other party may take such steps as are open to resolve the matter.

44.4 None of the steps described above takes away:
a) an employee’s right to have a Union delegate or official; or
b) a Union delegate’s right to have an official present as necessary at any stage of the dispute resolution procedure.”

CONSIDERATION

The proper construction of the agreement

[27] The entirety of clause 15 and Appendix 8 of the Agreement were set out earlier in this decision. These are the key clauses that require consideration in the task of construction.

[28] The dispute is fundamentally about the obligation that external personnel receive wages and conditions in accordance with or that are no less favourable than the Agreement. As noted earlier, I refer to this for convenience as the obligation for external personnel to receive parity.

[29] The term, “external personnel” is an important term that requires definition. It is not defined in the definition section of the Agreement. Nor does the term external personnel appear in clause 15 as part of the clauses that deal with the obligation to pay parity. Clause 15 acknowledges that the Respondent may from time to time need to engage “contractors and labour hire companies” in accordance with that clause and Appendix 8. Contractors and labour hire companies are also referred to in clause 15.4. There are also obligations to receive parity applying to employees of labour hire companies set out in clause 15.5(c) and 15.6(c).

[30] External Personnel is the title of clause 2 in Appendix 8 and the term is used throughout the clause. During the proceedings the term external personnel was used sometimes interchangeably with labour hire employees and there is no dispute between the parties that the term external personnel encompasses labour hire employees. However, in the context of clause 15 which specifically provides for parity for only labour hire employees notwithstanding that the clause deals with both labour hire and contractors, I consider external personnel should be read more broadly to include both labour hire employees and what might be considered to be contractors, to the extent there is a difference between the two. This interpretation is also consistent with the ordinary meaning of the term and is consistent with the title of Appendix 8 which refers to both contractors and labour hire. There was nothing put to suggest that the parties intended some other definition of what is meant by external personnel.

[31] It is necessary to consider the relationship between clause 15 and Appendix 8 as there is some inconsistency between the two provisions. Clause 15.5 provides that employees of labour hire companies used “…to meet production requirements” will receive parity. Clause 15.6 applies to engagement of labour hire companies in circumstances other than those in clause 15.5. Plainly, this means all other labour hire employees engaged. In the absence of anything further, the application of this clause would plainly resolve the dispute in favour of the Applicant in respect to labour hire employees.

[32] However, clause 15 clearly contemplates that it is to be considered with Appendix 8. Clause 15.1(b), clause 15.3 and clause 15.8 all refer to Appendix 8. In particular, clause 15.8 provides as follows;

“15.8 Maintenance and Engineering Employees

Additional contractor and labour hire provisions applying to maintenance and engineering work in the Company’s various sites are found in Appendix 8.”

[33] This arrangement and the deliberate linking of clause 15 and Appendix 8 in this way suggests that clause 15 is a more general provision regulating the use of contractors and labour hire companies and that Appendix 8 is a specific provision dealing with similar matters, including parity, but specifically in respect to maintenance and engineering work. Where there is a conflict between the general and specific provisions the general principle is that provisions of general application give way to specific provisions. There is nothing in evidence to suggest that the framers of the document had another construction in mind.

[34] Therefore, I consider the proper construction of the relationship between clause 15 and Appendix 8 of the Agreement to be one where clause 15 provides within its terms a general requirement for labour hire employees to receive parity. However, there is a specific regime that applies to external personnel (including labour hire employees) performing engineering and maintenance work. Those external personnel may pursuant to Appendix 8 be engaged in certain circumstances. When external personnel are engaged to perform maintenance work, they may have an entitlement to receive parity or they may not depending on whether or not the maintenance and engineering work is core maintenance work or not. This is the central issue in the dispute.

[35] Appendix 8 was set out earlier in the decision.

[36] Appendix 8 provides for two categories of maintenance work, Core and Non-core. The definition of core maintenance work and non-core maintenance work is as follows:

“Core Maintenance Work means work primarily associated with maintaining production line equipment in sound operating condition.

[37] The distinction between the two categories is important as clause 2.2 (c)(iii) of Appendix 8 provides that it is only external personnel engaged to perform core maintenance work that will receive parity. It follows that external personnel who work on non-core maintenance work are not entitled to parity as there is no express entitlement that they be paid parity.

[38] Reading these together, it is apparent from the ordinary meaning of the words that core maintenance work is primarily associated with production line equipment and non-core maintenance work is all other maintenance work. Put another way non-core maintenance work is all other maintenance work that is not work primarily associated with production line equipment. This of course leads to a consideration of what is meant by “production line equipment.” I will consider that matter later in the decision.

[39] A further task of construction arises because the parties have included in the definition of non-core maintenance work, core maintenance work that meets the criteria, “…non-urgent, infrequent, large or complex” (the non-core criteria). The ordinary meaning of the words suggests that core maintenance work that meets the non-core criteria then effectively switches from being core maintenance work to being in the category of non-core maintenance work. I note that the Applicant sought that I find an alternate construction, one where core maintenance work can be simultaneously core and non-core. However, I cannot see how that construction can be supported by either a consideration of the ordinary meaning or considering the clause in the context of the Agreement.

[40] Consideration then needs to be given to the non-core criteria and whether the way in which it is expressed should be read as disjunctive or subjunctive. In ordinary speech the word “or” is used disjunctively and the word and conjunctively. 16 In this provision the first three criteria are separated by a comma and the fourth by the word “or”. According to drafting conventions, where a series of paragraphs are either all cumulative or all alternatives, the conjunction “and” or “or” may be included at the end of the penultimate paragraph. In this case, applying that convention to the non-core criteria, the word “or” is to be read as if it is included after each of the first two words (that is after the words non-urgent and infrequent). While the Applicant contends that the criteria should be interpreted as being read cumulatively, this is at odds with the ordinary meaning.17

[41] The Applicant’s preferred construction is also not consistent when the relevant clause is considered in the context of Appendix 8 viewed as a whole. There is a clear attempt in the wording of Appendix 8 to carve out some of the maintenance work that is primarily associated with the production line from the obligation to pay parity. Where it is apparent that any core maintenance work that meets one or more of the four non-core criteria, it then moves to the category of non-core maintenance work and by virtue of that fact does not attract the requirement to pay parity as it falls into the definition of non-core maintenance work.

[42] The proper construction of Appendix 8 is that work performed by external personnel that meets the definition of core maintenance work attracts the operation of the parity clause. However any core maintenance work that meets one or more of the four non-core criteria moves into the category of non-core maintenance and by virtue of that fact is work that no longer attracts the requirement that the external personnel receive parity.

[43] It follows that I agree with the proposed terms of construction set out by The Australian Industry Group at paragraph 8 in their final closing submissions as follows:

“a. The definitions of Core Maintenance Work and Non-Core Maintenance Work found in Clause 1 of Appendix 8 are separate and distinct categories of work. Work is not simultaneously capable of being Core and Non-Core;

b. Any maintenance work which is performed on equipment which is not “production line equipment” must be Non-Core Maintenance and cannot beCore Maintenance;

c. The definition of Non-Core Maintenance Work limits and narrows the definition of the work which would otherwise be Core Maintenance Work. This narrowing occurs in two respects:

i. Maintenance Work on production line equipment which is non-urgent, infrequent, large or complex is not Core Maintenance Work;
ii. Maintenance Work which is listed in clause 2.2(c)(iii) is not Core Maintenance Work;

d. The words “non-urgent, infrequent, large or complex” are exclusive terms and the maintenance work (including Core Maintenance Work) does not need to satisfy all four elements for it to be defined as Non-Core Maintenance Work;

e. Any maintenance which is None-Core Maintenance Work as a result of one of the propositions specified above does not require pay parity and is not subject to the pay parity obligations found in clause 2.2(b)(iii) of Appendix 8 of the NCA 2014.” 18

[44] The questions then are what is the maintenance work that has been performed since February 2015 that is in dispute and what category of work, core or non-core maintenance, does it fall in to? I will now turn to a consideration of these questions.

[45] The answer to the first question is relatively straightforward. The Applicant’s submissions make clear that the work in dispute is the use of external personnel for maintenance day shutdowns and longer period shutdowns with the longer shut downs occurring generally twice per year. Mr. Morrow’s evidence makes clear that it is the external personnel engaged for those “maintenance days” and “shut down” days that the Respondent does not wish to pay parity to. It is clear enough that the work that has been performed since February 2015 that is in dispute is all of the work undertaken on maintenance days and shut down days. It is clear from the evidence that there is a clear understanding as to what is meant by a maintenance day and shut down days. It is clear that maintenance days currently occur once every three weeks for one 12 hours shift. Shut down days occur twice per year generally at Christmas and around July and last for two to three weeks

[46] The answer to the second question begins with a consideration of the distinction between production line equipment and equipment which is not production line equipment.

[47] Nothing was put as to what the ordinary meaning of production line is. The Macquarie Dictionary Online defines a production line, as an assembly line, being a “sequential arrangement of machines, tools, and workers in which each worker performs a special operation on an incomplete unit, which passes down a line of workers until it is finished.”

[48] It would not be reasonable to conclude that all of the equipment at Ulverstone is what the parties considered to be production line equipment. If it was, there would have been no basis for the distinction between core maintenance work and non-core maintenance work. Mr. Morrow sets out in his evidence that the Ulverstone site is made up of four areas; processing area, packaging area, services area and field services. There was no challenge to his evidence as to the operations in each area; the equipment which operates in each area and the personnel working in each area. While Mr. Morrow was questioned on cross examination about the services area, the waste water treatment plant, boilers, co-generation plant and refrigeration and their link to the production process, I agree with the thrust of the submissions of the respondent that his responses did not evidence a link to the production line such that the equipment in these areas could be considered to be production line equipment.

[49] Mr. Morrow’s unchallenged evidence is that the employees in the processing area and the packaging area are production line employees. It is possible that the other two areas of field services and services could contain production line equipment. However, I have the evidence of Mr. Morrow that they do not contain production line equipment as follows:

“14. I regard the equipment in the services area as not production line equipment because the equipment does not directly contribute to the conversion of the raw material to sellable product. Instead, this equipment converts and supplies energy in the form required for the process or converts waste into an acceptable form for disposal. For example, the boilers convert gas into heat energy in the form of steam; the co-generation converts gas into electricity and heat in the form of steam, the refrigeration equipment converts electricity into cooling energy. They are critical items and the factory would stop without them but they are not, in my view, production line equipment.

16. I regard the equipment in the field services area as not production line equipment because the equipment is primarily concerned with the receival and long-term storage of raw material, which is independent of conversation of the raw material into the sellable product.” 19

[50] There is no other sound basis for distinguishing where production line equipment begins and ends other than that offered by Mr. Morrow. The evidence of Mr. Gale on the point was simply an assertion that all of the work referred to in his statement is maintenance on production line equipment. 20

[51] Further it is clear that production line employees are in the processing and packaging area and there was no evidence that the services area engaged any production employees to operate equipment in the services area. 21 Were they to do so, that may provide a basis for finding that the production line equipment extends beyond the processing and packaging area. However, there is no evidence that this is the case.

[52] Mr. Gale did not identify any machine or equipment that was outside of the processing or packing areas which resulted in the raw product being converted into finished product which is then packaged and dispatched. 22

[53] It follows that production line equipment is all that equipment found in the processing and packing area. It further follows that equipment that is in the service areas or in field services is not production line equipment. This is consistent with the ordinary meaning of production line and consistent with the evidence. It follows that maintenance work on field services or services is not core maintenance work as it is not work primarily associated with production line equipment.

[54] The next consideration is whether maintenance work, which occurs on maintenance days and shut down days, is non-urgent, infrequent, large or complex.

[55] The Respondent submits that the plain and ordinary meaning that should be ascribed to these terms are as follows:

“19. The Respondent’s November Submissions identified a plain and ordinary meaning to the terms “non-urgent, infrequent, large or complex” as follows:

“Non-urgent being not-urgent
Urgent requiring or compelling speedy action or attention”
“Infrequent happening or occurring at long intervals or not often: infrequent
visits
Large being of more than common size, amount
Complex characterised by an involved combination of parts”” 23

[56] The Respondent also submits that there is nothing in the evidence to suggest that these plain and ordinary meanings are inconsistent with what was intended by the bargaining parties. I agree with that submission.

Is work on maintenance days and shut down days not urgent?

[57] It is abundantly clear from the evidence and one would think obvious that maintenance work at Ulverstone will sometimes be urgent and sometimes not. While the evidence shows that a lot of maintenance is held over to maintenance days, the evidence shows that there is maintenance work that is undertaken as part of a “break in” to the production schedule or a “break down”In these circumstances the work is undertaken quickly. The evidence is also quite clear that the work that is undertaken on maintenance days and shut down days is work that has been identified that needs to be done through either inspections or as a result of appearing on regular maintenance schedules but that can wait until maintenance day. Mr. Gales evidence on this point included the following:

“45. Corrective maintenance work orders are for components that we have identified during our daily checks or by the shift personnel as being substandard or defective. For example, a gear box with a leaky oil seal. It will be defective, but we may identify that it could last for three weeks, which means it can wait and not disturb production.

46. They are usually something identified as a problem that will last until the maintenance day shut down. If it needs to be replaced then it will be classed as a break down and will be repaired during the weekly schedule and is called a “break in the schedule.” 24

[58] Under cross-examination by Ms Kashmirian from The Australian Industry Group, Mr Gale gave the following evidence;

Ms Kashmirian: “I want to take you to maintenance days and shutdown days but before we go there I just want to clarify, in terms of your daily role Mr Gale, on a day to day basis you do daily checks of the machines (indistinct) and cutter your area. That's correct isn't it?”

Mr Gale: “Correct”.

Ms Kashmirian: “Part of your role is to identify if there is anything wrong with the machines that you're responsible for?”

Mr Gale: “Correct”.

Ms Kashmirian: “Some of the maintenance issues that you might identify during these daily checks will be urgent?”

Mr Gale: “Yes”.

Ms Kashmirian: “By virtue of it being urgent production will need to be stopped in order to rectify the issue immediately. That's correct isn't it?”

Mr Gale: “We give them the choice. If it is determined that it is critical and it will fail very quickly then we will organise to get the line shut down (indistinct) so we can repair it. But we also give that (indistinct) to our team leader who will confer with process and say we have this issue, we would like to fix it, is it possible? Then they might say, no, we want to try and limp it through until there is a clean down later on in the day, or a line change (indistinct) change.”

Ms Kashmirian: “Let us go back to when it is determined I'm assuming by yourself in conjunction with the team leader in production that the production line needs to be stopped for this urgent repair, that's called a breaking, I think. Is that right?”

Mr Gale: “That is now a breaking of our schedules, yes.”

Ms Kashmirian: “So essentially production line closes, you break, you go on, you fix whatever maintenance issues that you need to because its critical, it's urgent?”

Mr Gale: “Yes.”

Ms Kashmirian: “Then the line goes back on, and I think the example that you give in your statement is in relation to a lower (indistinct). Can you recall that?”

Mr Gale: “Yes.”

Ms Kashmirian: “So I suppose that's one type of maintenance issue that you identified, but there is also another type of maintenance issue that you've identified, and you highlighted it before, where the maintenance issue doesn't require immediate rectification, correct, and (indistinct) before, I’m correct, aren't I, is that those maintenance issues that don't require immediate rectification, correct, and (indistinct) before, I'm correct, aren't I, is that those maintenance issues that don't require immediate rectification or a break in production are usually held off to the maintenance day or the shutdown day?”

Mr Gale: “We monitor that on a day to day basis to see if they will make it to the maintenance day. Clearly we have to judge it, and our team leader's judgment as well, as to whether it will make the distance. If it looks like it's going to fail and cause more damage then we have to stop.”

Ms Kashmirian: “But there are maintenance issues that you identify that can be held off to a maintenance day or a shutdown day. That's correct isn't it?”

Mr Gale: “Correct.”

Ms Kashmirian: “So essentially those maintenance issues, because they don't require immediate rectification, they're not urgent are they?”

Mr Gale: “No, they're not urgent but there is stuff that needs to be attended to as soon as possible.”

Ms Kashmirian: “When you say as soon as possible, and when you say attended to as soon as possible, are you relating to the line trim of that particular maintenance issue or is it that you're relating to actually having to jump into the production line and rectify the issue?”

Mr Gale: “No, what I mean is that we will identify it and we will continue to monitor it. If it progresses to a state where it's going to fail then we will address it instantly, or get a break in the line. Otherwise we will just continue to monitor it and see if we can make it through to the maintenance day. Then it will be repaired if we have enough manpower.”

Ms Kashmirian: “So those issues that you say that you hold off to a maintenance day, by virtue of the fact that you hold them off until maintenance day they're not urgent are they?”

Mr Gale: “At that stage they're not urgent.” 25

[59] The evidence of Mr. Morrow was generally consistent with that of Mr. Gale on this matter.

[60] On the basis of this evidence alone it is apparent that all of the work that occurs on maintenance days is non-urgent. Urgent work is work that needs to be done speedily and is done during production schedules with or without stopping production depending on the issue. Urgent work is not held over to maintenance days as it cannot wait.

[61] I note that the Respondent also submits that Annexure 1 to their submissions shows that there is an average time of 44 days between the identification of a maintenance task and the completion of the improvement work. I agreed this supports the contention that the work on maintenance days is not urgent.

[62] As work on maintenance days is non-urgent, it falls within the category of non-core maintenance given my construction of what is meant by the term, irrespective of the outcome of the consideration of the other criteria of infrequent, large or complex

[63] The evidence is that the work on maintenance days and shut down days is of similar character in terms of urgency. The main difference is that work on shut down days tends to take longer. However, again the fact that the work in question is deferred to the shutdown day suggests that it is not urgent.

Is the work on maintenance days and shut down days infrequent?

[64] Frequency is a relative concept. In this matter, there is evidence that there is a range of maintenance activities that happen on a daily and up to a weekly basis. 26 There are also the shift fitters and shift electricians who are performing maintenance daily.

[65] Maintenance days occur once every three weeks. With 52 weeks in a year, that means they occur approximately 17 times per year. This does not with reference to the higher frequency of the other maintenance tasks have the flavour of what one might consider frequent. The respondent points out that the frequency can also be characterised, given the continuous shift environment as one 12 hour shift out of every 42 shifts that the Ulverstone site is in operation. The work that occurs on maintenance days can reasonably be considered in this context to be infrequent.

[66] The situation for annual shut downs which as I pointed out earlier occur twice per year, are quite clearly infrequent in the context of the analysis above.

Is the work on maintenance days and shut down days large?

[67] Mr. Morrow gave evidence at paragraphs 51 and 56 of his statement as to why he considers the work performed on maintenance days and shut down days to be large which was set out earlier in the decision. Essentially, his view is that large relates to the scale of the work and the amount of resources required to do the work. There is no other evidence as to how large should be regarded in the context of the Agreement and there is no evidence that the parties had a different formulation of what large meant in the context of the clause.

[68] It is clear that maintenance activities when looked at singularly will be different in size. Overhauling a gearbox would be a large maintenance activity compared to replacing two screws which are easily accessed, which would be small. The reference points for determining whether the activity is large or small would on its ordinary meaning involve a consideration of the time involved and the resources required to do the job. While a single maintenance activity could be large or small, what occurs on maintenance days are a far greater number of maintenance tasks than occur during the regular weekly schedule requiring an approximate tripling of the number of personnel to undertake the work. On its plain meaning, the maintenance activity that occurs on a maintenance day is a large maintenance activity. There nothing to support a finding that the parties had something else in mind when framing the Agreement. The work on maintenance days is a large maintenance activity. Applying the same approach, the situation is even clearer for the twice yearly shutdowns.

Are the maintenance activities on maintenance days and shut down days complex?

[69] This is the least straightforward criterion. A task could be considered complex simply because it is beyond the capability of the regular maintenance staff and needs specialised skill. I have been taken through evidence of a range of maintenance activities that occur on maintenance days and shut down days. Some of those singular activities could hardly be described as complex. Others undoubtedly would be.

[70] Mr. Morrows assessment of what a complex maintenance activity is “…one that involves multiple tasks, on multiple machines, in a limited time frame.” 27 His evidence on this was not challenged. There is no doubt that there is a lot of planning, preparation and co-ordination that goes into maintenance days and shut down days. However, I am not certain that this makes the maintenance work that happens on maintenance days complex. Some of them will undoubtedly be so and others not. I am not satisfied that all of the work that occurs on maintenance days or shut down days is complex.

CONCLUSION

[71] The question to be answered to resolve this dispute is as follows:

“Since 5 February 2015 maintenance work on production line equipment has been carried out by external personnel at the Simplot Australia Pty Ltd Ulverstone site.

[72] For the reasons set out above, my decision, made pursuant to the dispute resolution procedure in the Agreement and section 739 of the Act, is that the work in question that has been carried out on production line equipment since 5 February 2015 is the work that has occurred on maintenance days and shut down days. I note that it is evident that the terms maintenance days and shut down days are well understood by the parties.

[73] The proper construction of the term in Appendix 8 is that non-core maintenance work includes core maintenance work that meets one or more of the criteria of non-urgent, infrequent, large or complex. Having regard to the evidence, I am satisfied that the maintenance work that occurs on maintenance days meets not just one but all three of the criteria of non-urgent, infrequent or large. Some of the work that occurs on maintenance days and shut down days may be complex. However I am not satisfied all the work is complex. However, as the work that occurs on maintenance days and shut down days meets the criteria the parties have included, it falls into the category of non-core maintenance work and therefore there is no obligation arising under the Agreement for those workers to be paid parity.

[74] It follows from the above that the answer to the question framed to resolve the dispute is No.

COMMISSIONER

Appearances:

Mr M Nguyen for the “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU)

Mr M Mead for The Australian Industry Group

Ms P Kashmirian for The Australian Industry Group

Hearing details:

2015.

Launceston.

December 1.

2015.

Melbourne - Sydney (video hearing).

December 22.

Final written submissions:

21 December 2015.

1 AE412434

2 Re Schefenacker Vision Systems Australia Pty Ltd, AWU, AMWU Certified Agreement 2004 (2005) 142 IR 289

3 (2005) 142 IR 289 [78]

4 Airport Fuel Services Pty Ltd v Transport Workers’ Union of Australia (2010) 195 IR 384

5 (2010) 195 IR 384 [7]

6 (2010) 195 IR 384 [34]

7 [2015] FWCFB 210

8 [2015] FWCFB 210 [19]

9 [2015] FWCFB 210 [71]

10 Note these items are listed in Exhibit K3, Witness Statement of Colin Morrow, [26]

11 The Australasian Meat Industry Employees Union v Golden Cockerel Pty Ltd, [2014] FWCFB 7447

12 [2014] FWCFB 7447, [19] - [22]

13 [2014] FWCFB 7447, [23] - [30]

14 [2014] FWCFB 7447, [31] - [40]

15 [2014] FWCFB 7447, [41]

16 Pearce, DC & Geddes RS, Statutory Interpretation in Australia (LexisNexis Butterworths, 7th ed, 2011) 2.29

17 Note the parties agreed the word “of” in clause 2.2 (c) (iii) of Appendix 8 should be read as “or” as it was an obvious drafting error.

18 Respondent’s Final Closing Submissions, filed 21 December 2015, [8]

19 Exhibit K3, Witness Statement of Colin Morrow, [14], [16]

20 Exhibit N1, Witness Statement of Darren John Gale, [60]

21 Respondent’s Final Closing Submissions, filed 21 December 2015, [18] – [19]

22 Respondent’s Final Closing Submissions, filed 21 December 2015, [22]

23 Respondent’s Final Closing Submissions, filed 21 December 2015, [19]

24 Exhibit N1, Witness Statement of Darren John Gale, [45] – [46]

25 PN161 – PN172

26 Respondent’s Final Closing Submissions, filed 21 December 2015, [29]

27 Exhibit K3, Witness Statement of Colin Morrow as amended, [56]

Printed by authority of the Commonwealth Government Printer

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

[2016] FWC 1041

19 FEBRUARY 2016

DECISION

Is work on maintenance days and shut down days not urgent?