“Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers' Union (AMWU) v Visy Packaging Pty Ltd
[2018] FWC 4953
•23 August 2018
| [2018] FWC 4953 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.739 - Application to deal with a dispute
“Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU)
v
Visy Packaging Pty Ltd
(C2017/6449)
| Commissioner McKinnon | melbourne, 23 August 2018 |
Alleged dispute over matter arising under an enterprise agreement – agreement interpretation - whether canteen covered by enterprise agreement.
The “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU) has applied to the Commission under section 739 of the Fair Work Act 2009 (Act) for assistance in relation to an alleged dispute with Visy Packaging Pty Ltd (Visy).
The dispute arises under the Visy Packaging Pty. Ltd. (Cartons - Broadmeadows) AFMEPKIU/ETU Enterprise Agreement 2017[1] (the Agreement), a single enterprise agreement made by Visy and its employees at Broadmeadows who are employed in the classifications covered by the Agreement. The AMWU is covered by the Agreement.
The dispute is about whether Visy was entitled to effectively ‘close’ two canteens formerly operated at Visy’s Broadmeadows site (“the canteen”) by terminating its catering contract for the canteen without first obtaining the agreement of employees or their representatives. The answer depends on whether the canteen is (or was) covered by clause 13.2 of the Agreement.
The AMWU says clause 13.2 of the Agreement required Visy to obtain majority approval of employees before terminating its catering contract with the canteen operator, Spotless Facilities Services Pty Ltd (Spotless) in December 2017.
Visy says clause 13.2 does not apply to the canteen in relevant respects and it has managerial prerogative to close the canteen and substitute it with an alternative food service.
A hearing was held on 11 July 2018 in Melbourne. This decision deals with the dispute.
Background
Visy operates a continuous shift roster over 24 hours, 7 days a week. Employees work on day, afternoon and night shifts. Approximately one third of employees (46 of 152) work afternoon or night shift.[2]
For a number of years and until 2017, Visy had a catering contract with Spotless to operate the canteen for the benefit of employees on day shift and others at the Broadmeadows site.[3]
The canteen was usually open from 7.00am to 2.00pm, Monday to Friday, excluding rostered days off and public holidays, although its hours of operation sometimes varied by half an hour at either end of the day. The canteen was not open during afternoon or night shift.
The canteen derived approximately $1150 per week[4] from the sale of rolls, sandwiches, hot meals, burgers, pies and sausage rolls, chips, sweets and other food and drink items. Visy subsidised the canteen and estimates that the cost of the subsidy was more than $150,000 per year. Among other things, the subsidy allowed prices to remain low at the canteen.[5]
In February 2017, Visy sought to reach agreement with employees to close the canteen in the context of bargaining for the Agreement.[6] The parties explored a number of options but were unable to reach agreement on the issue. Once bargaining concluded, the Agreement was made and commenced operation on 31 July 2017.[7]
In August 2017, discussions continued about the proposed closure of the canteen. Employees formally rejected a proposal from Visy about closing the canteen by way of a vote on 5 and 6 September 2017. This led to further discussions in September and October 2017.[8]
On 24 October 2017, Visy advised AMWU delegates that it had decided to close the canteen and that its catering contract with Spotless would be terminated from 15 December 2017.[9]
The canteen has now closed.[10]
Since the canteen closed, Visy has made alternative arrangements for the provision of food and drinks to employees at the Broadmeadows site, including:
· subsidised vending machines with snack, drink and meal options;
· food vans delivering food to site twice daily;
· two new Saeco coffee machines;
· updated cooking facilities in the canteen area, including new microwave ovens, pie warmers and toasters; and
· a trial delivery of “YouFoodz” meals daily, with a 50% subsidy paid by Visy.[11]
Food purchased through these new arrangements is generally more expensive than food that was sold through the canteen. Employees feel there is less variety of food options and access to food is less convenient. Coffee is cheaper and coffee sales have increased.[12]
Relevant law
Section 172 of the Act provides for the making of enterprise agreements about permitted matters, including “matters pertaining to the relationship between an employer that will be covered by the agreement and that employers’ employees who will be covered by the agreement” and matters pertaining to the relationship between employers and relevant unions.
Section 739 of the Act empowers the Commission to deal with certain disputes under enterprise agreement dispute settlement terms.
Clause 34 of the Agreement sets out the procedure for dealing with disputes arising out of the implementation and/or operation of the Agreement. If a dispute is not resolved after certain steps have been taken, it can be referred to the Commission for conciliation, and if conciliation does not resolve the dispute, arbitration. Conciliation in this matter occurred on 5 December 2017 and 1 February 2018 but failed to resolve the dispute. The parties agree that the Commission can now deal with the dispute by arbitration under clause 34.
In The Australian Meat Industry Employees Union v Golden Cockerel Pty Limited[13], a Full Bench of this Commission set out the approach to construction of enterprise agreements. The approach was subsequently revised in Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (AMWU) v Berri Pty Limited.[14]
The starting point is to consider the ordinary meaning of the words used, having regard to their context and evident purpose. The search is for the objective common intention of the makers of the enterprise agreement, having regard to the language used to give effect to their agreement. Where there is ambiguity, evidence tending to establish relevant objective background facts that are known to both parties can be admitted to aide interpretation.
Relevant Agreement terms
Clause 2 of the Agreement provides that the Agreement incorporates the Manufacturing and Associated Industries and Occupations Award 2010[15] and the pre-reform Graphic Arts – General – Award 2000[16] as it stood at 1 March 2006 as well as variations of that award after 1 March 20016 that are more beneficial to employees. The Agreement prevails over the incorporated awards to the extent of inconsistency. Under clause 2.7, “existing over award payments and conditions of employment shall continue to apply as if they were a term of this Agreement except where the terms of this Agreement expressly provide otherwise.”
Clause 13 of the Agreement deals with “Additional benefits”, including training and higher education assistance and income protection insurance for employees.
Clause 13.2 of the Agreement is the term in dispute. It provides as follows:
“13.2 Facilities
The Company shall continue to provide facilities necessary to ensure adequate Occupational Health and Safety and Welfare of its Employees, including the provision of lockers, drinking and boiling water, appropriate protective clothing, heating, cooling and ventilation and rest room facilities. Any disagreements about the adequacy of these facilities shall be dealt with through the Dispute Resolution procedure.
The Company shall make adequate provisions for nominated qualified persons to be available to render First-Aid and be paid the relevant allowance.
The Company shall not modify, remove or reduce any service or facility that has been provided without the agreement of the majority of Employees and their representatives, provided that the facilities are not being deliberately misused, abused, damaged or defaced by Employees.
The Company shall ensure that all facilities provided are maintained in good working and useable order at all times.”
It is the third paragraph of clause 13.2 (in italics above) that is of particular relevance to the dispute.
Consideration
Does clause 13.2 only deal with OHS-related facilities?
In my view, there are two available interpretations of clause 13.2 and in that sense, there is a relevant ambiguity to resolve.
The first is that it is read together as a whole, comprising a set of rules about the provision of facilities that are necessary to ensure adequate Occupational Health and Safety (OHS) and Welfare for employees. The evident purpose of the clause, read in that context, is to reinforce Visy’s obligations to provide a safe workplace environment. The first two paragraphs of clause 13.2 are clearly related to OHS: the first dealing with facilities agreed as necessary for that purpose; and the second dealing with the requirement for nominated and qualified first aid officers to be available and paid an allowance. Read in that way, the reference to “any service or facility” in the third paragraph is a reference to any service or facility that is necessary to ensure adequate OHS and welfare for employees. A service or facility that is not necessary for that purpose is not within its scope. The word “service” could be read in this context as a service provided in connection with OHS facilities, such as water, heating or cooling, or a more precise description of the types of “facilities” set out in the first paragraph.
It is contextually relevant that a similar drafting style is used elsewhere in the Agreement. For example, the third paragraph of clause 15.2 deals with “consultation relating to the supply of refreshments and additional breaks”. The paragraph above it deals specifically with the provision of “liquid refreshments and electrolyte replacement as is deemed necessary”. It is clear that the general reference to “refreshments” in the third paragraph finds its meaning in the more specific paragraph above it which details the nature of refreshments to be provided.
An alternative interpretation is that clause 13.2 is not so limited and that while it clearly deals with OHS matters, the third paragraph of clause 13.2 also aims to preserve other “additional benefits” provided to employees at the Broadmeadows site (unless altered by majority agreement or in the case of wilful misuse or damage).
The location of clause 13.2 in a clause dealing with “Additional benefits” suggests that the term should be construed beneficially to employees. If clause 13.2 were intended to be exclusive to OHS matters, one might expect it would have been located in clause 15 of the Agreement, which deals exclusively with OHS matters such as temperature management and accident make-up pay, rather than in a clause titled “Additional benefits”.
Support for the alternative interpretation is also found in the previous iteration of clause 13.2 of the Agreement[17] which dealt with an automatic teller machine (ATM) matter in addition to the matters now covered, as follows:
“The Company will work with the ATM provider in an effort to mitigate the withdrawal transaction fees for employees.”
That term was evidently aimed at reducing employee costs associated with the use of ATM(s) at the Broadmeadows site. It is uncontroversial that the commitment in relation to ATMs was removed in bargaining for the Agreement.[18]
There is also the requirement that facilities of the type covered by clause 13.2 be necessary to ensure both adequate OHS and “welfare”. Welfare is a broader and more subjective concept than OHS. What is necessary for adequate OHS is likely to be guided by the extensive regulation of workplace safety in Australia,[19] but what might be considered necessary for the welfare of employees is more likely to be a matter of opinion, and in the context of the Agreement, consensus. The difficulty of course is knowing with any certainty what clause 13.2 intends to preserve at a particular point in time.
Reading clause 13.2 in context, I find that its evident purpose is to ensure that the workplace environment remains as safe and beneficial to employees as it was at the time the Agreement was made. The third paragraph in clause 13.2 reflects that commitment. It includes, but is not limited to, necessary OHS facilities.
Does clause 13.2 cover the canteen?
The AMWU says at the relevant time, “the canteen” included the physical facilities and equipment in the canteen area, the precise food and drink service provided by Spotless including particular menu items and the subsidy provided by Visy to support it.[20] Visy says it was the canteen area and equipment as well as the “provision of a subsidised food service”.[21]
There is no dispute that the canteen area and equipment would meet the description of “facility”[22] and I agree.
The word “service” in the third paragraph of clause 13.2, and the context in which it appears, is unique to clause 13.2 of the Agreement. The parties must have intended it to have some meaning. The ordinary meaning of the term is necessarily broad, and as Visy accepts, it would cover the supply of food through a canteen.
It follows that in addition to the facilities in clause 13.2 including lockers, rest room facilities and drinking water, the canteen’s physical facilities and equipment as well as the supply of food are each within its scope.
That said, it seems unlikely that, in seeking to preserve the benefit of the canteen for employees, the parties intended every change to the canteen area and every canteen service to be approved first by a majority of employees (or put another way, subject to employee’s right of veto). An obvious example is a change in the number of pie warmers or vending machines, representing both a modification, and in the case of replacing an old piece of equipment, presumably also a removal. Such a restrictive approach seems to me to be inconsistent with the objectives in clause 4 of the Agreement including to achieve productivity gains, continuous improvement and an open and consultative decision making approach. The better view is that on its terms, clause 13.2 prevents Visy from modifying, removing or reducing the canteen and related services in such a way as to reduce the value of the benefit to employees. That interpretation is consistent with a beneficial construction of clause 13.
The other observation I would make is that clause 13.2 only has effect to the extent that it is about permitted matters, including matters that affect Visy and its employees in their capacity as such.[23] Whether a term is about permitted matters is to be objectively determined on the particular facts in each case.[24] Permitted matters would not ordinarily encompass terms requiring an employer to contract with a particular supplier, or to do so in a particular way.[25]
It is not in dispute that at the time the Agreement was made, the food service provided through the canteen was under catering contract with Spotless, and that it was supported by a subsidy paid by Visy. Both the catering contract and the subsidy arrangement were between Visy and Spotless. Spotless is not covered by the Agreement and is not bound by clause 13.2.
If Spotless had exercised its own right to terminate the catering contract with Visy, the Agreement would not have prevented it from doing so. There would equally have been no breach of clause 13.2 in that circumstance, because clause 13.2 is directed at certain actions Visy may or may not take. It does not extend to any action taken by Spotless. There is thus a question about whether the food service provided by Spotless, and the subsidy provided to Spotless by Visy, are covered by clause 13.2.
The answer depends on whether clause 13.2, in prohibiting any change to those arrangements without majority employee approval, is about “permitted matters” for the purposes of section 172. The question was not argued before me in any detail and it is appropriate that the parties have an opportunity to be heard on the question before the dispute is determined.
Conclusion
Clause 13.2 of the Agreement covers “the canteen” including the physical facilities and equipment in the canteen area as well as the supply of food through the canteen to employees on the day shift, but only to the extent that it is about permitted matters within the meaning of section 172 of the Act.
The parties are directed to file any further submissions on whether, and the extent to which, the prohibition in clause 13.2 on any modification, reduction or removal of the food service provided by Spotless, or the subsidy provided by Visy, is about permitted matters by no later than 6 September 2018. Any reply submissions must be filed by no later than 13 September 2018.
In the meantime, liberty is granted to the parties to apply for a further conference to deal with the dispute.
COMMISSIONER
Appearances:
N Grealy for the “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU)
A Farr for Visy Packaging Pty Ltd
Hearing details:
2018.
Melbourne:
July 11.
[1] AE424684
[2] Exhibit 5, Statement of Levent Latifoglu
[3] Exhibit 1, Statement of Michael Bull
[4] Exhibit 5, Statement of Levent Latifoglu
[5] Exhibit 5, Statement of Levent Latifoglu, Annexure B
[6] Exhibit 6, Statement of Shawn Kopel
[7] [2017] FWCA 3285
[8] Exhibit 1, Statement of Michael Bull
[9] Exhibit 1, Statement of Michael Bull
[10] Exhibit 1, Statement of Michael Bull
[11] Exhibit 4, Statement of Paul Kirk
[12] Exhibit 4, Statement of Paul Kirk; Audio recording of hearing on 11 July 2018
[13] [2014] FWCFB 7447
[14] [2017] FWCFB 3005
[15] MA000010
[16] AP782505
[17] Visy Packaging Pty Ltd Cartons (Broadmeadows) AFMEPKIU/ETU Collective Agreement 2013, AE404090, at Clause 18(e)
[18] Exhibit 2, Supplementary Witness Statement of Michael Bull, Annexure D; Exhibit 6, Witness Statement of Shawn Kopel; Audio recording of hearing on 11 July 2018
[19] See, for example, regulations 40-41 of the Work Health and Safety Regulations 2011
[20] Exhibit 1, Witness Statement of Michael Bull; Exhibit 7, AMWU’s Outline of Submissions
[21] Exhibit 8, Visy’s Outline of Submissions
[22] Exhibit 7, AMWU’s Outline of Submissions; Exhibit 8, Visy’s Outline of Submissions
[23] Electrolux Home Products Pty Limited v AWU [2004] HCA 40; (2004) 221 CLR 309.
[24] [2004] HCA 40 at [241]; Wesfarmers Premier Coal Ltd v AMWU (No 2) [2004] FCA 1737 at [62].
[25] Explanatory Memorandum, Fair Work Bill 2009 (Cth) [673]
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