Cannon Hill Services Pty Ltd v Australasian Meat Industry Employees Union
[2016] FWC 7256
•11 OCTOBER 2016
| [2016] FWC 7256 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.217 - Application to vary an agreement to remove an ambiguity or uncertainty
Cannon Hill Services Pty Ltd T/A Australian Country Choice
(AG2015/7814)
Australasian Meat Industry Employees Union, The
(AG2016/2163)
AUSTRALIAN COUNTRY CHOICE (SLAUGHTERING AND BONING OPERATIONS) ENTERPRISE AGREEMENT 2015
Meat Industry | |
DEPUTY PRESIDENT ASBURY | BRISBANE, 11 OCTOBER 2016 |
Applications to vary an agreement to remove ambiguity or uncertainty – Approach to construction of Agreement – Approach to variation of Agreement on grounds of ambiguity or uncertainty - Intention of parties – No mutual intention – Error in drafting made by Company – Union representatives aware of error prior to ballot of employees and approval by the Commission – No intention to limit application of new classification – Appropriate case for exercise of discretion to vary Agreement – Agreement varied to remove ambiguity.
1. BACKGROUND
[1] This Decision concerns applications to the Fair Work Commission (the Commission) in relation to the Australian Country Choice (Slaughtering and Boning Operations) Enterprise Agreement 2015 (the 2015 Agreement). In September 2015, the Australasian Meat Industry Employees’ Union (AMEIU) made an application under s. 739 of the Fair Work Act 2009 (the Act) for the Commission to deal with a dispute in accordance with a dispute settlement procedure in the 2015 Agreement. 1 Cannon Hill Services Pty Ltd T/A Australian Country Choice (ACC), the employer to whom the 2015 Agreement applies, responded to the dispute by making an application to vary the 2015 Agreement.2 The AMIEU then made a cross-application, also seeking a variation to the 2015 Agreement. Both applications to vary the 2015 Agreement were made under s.217 of the Act on the basis of an asserted ambiguity or uncertainty. The dispute notified by the AMIEU relates to the same issue that is sought to be addressed in the applications to vary the 2015 Agreement.
[2] The issue upon which all three applications centre is that the wages schedule to the 2015 Agreement (Schedule A) includes two rates, respectively designated as Level 3 and Level 3T. The wage rate for Level 3T is less than the wage rate for Level 3. Schedule C to the 2015 Agreement, which sets out classification definitions, contains a reference to Level 3 and Level 3T but specifies only one list of indicative tasks for both Levels. The AMIEU contends that the Level 3T classification applies to a small number of employees performing what is described as “Tripe Work” and that all other employees performing tasks in the Level 3 classification definition are Level 3 employees.
[3] The dispute leading to the applications for variation of the 2015 Agreement, arose after the approval of the 2015 Agreement when ACC commenced employing persons to perform tasks in the classification definition for Level 3 and Level 3T other than Tripe Work and paying those employees at Level 3T rates. Throughout the course of the dispute, ACC has variously contended that the wage rate for Level 3T applies to all employees performing jobs or tasks described within the classification definition for Level 3 and Level 3T who were employed after the Agreement was made and that the Level 3T wage rate is an hourly or time work rate while the Level 3 rate is an incentive rate and payable only to employees who are employed by ACC as incentive workers under an incentive scheme provided for in the 2015 Agreement.
[4] At the risk of oversimplifying the dispute, ACC maintains that the designation “T” in the Level 3T rate stands for “Time” and the AMIEU maintains that it stands for “Tripe”.
[5] The variation sought by ACC reflects its position that the Level 3 rate applies only to incentive employees and the Level 3T rate applies to employees employed on hourly or time based rates but that either group of employees can perform any of the tasks described in the classification definition for Level 3 and Level 3T. The AMIEU seeks a variation to confirm that the Level 3T rate is restricted to employees doing “Tripe work”. It is not clear what rate the AMIEU contends is payable to other employees who are performing work that is described in the classification definition for Level 3 and Level 3T although the effect of the variation sought by the AMIEU would be that all Level 3 employees other than Tripe workers would be paid the higher Level 3 rate.
[6] The AMIEU also submits that the ambiguity in the terms of the 2015 Agreement arises from a drafting error on the part of the Company in that it failed to include new market rates it was seeking to implement in the version of the 2015 Agreement it put out for ballot and which was approved by the Commission on application by ACC. The AMIEU contends that s.217 of the Act is not an appropriate mechanism to correct such an error. Somewhat confusingly, ACC conceded the drafting error on the one hand and then contended in its closing submissions that it was open to the Commission to interpret the Agreement in the manner contended for by ACC and decline to vary the Agreement on the basis that it was not necessary.
[7] A number of conciliation conferences were conducted in relation to the AMIEU’s dispute and when agreement could not be reached, it was decided that the matter could best be progressed by the Commission dealing with the applications to vary the 2015 Agreement with the dispute application being held in abeyance pending the outcome of those applications.
2. APPROACH TO VARIATION OF AN ENTERPRISE AGREEMENT TO REMOVE AMBIBUITY OR UNCERTAINTY
[8] By virtue of s.217 of the Act, the Commission may vary an enterprise agreement to remove an ambiguity or uncertainty. An application for a variation on that basis may be made by an employer, employee or employee organisation covered by the Agreement. A provision in an enterprise agreement is ambiguous if it is susceptible of more than one meaning 3 and may be ambiguous notwithstanding that the provision is capable of interpretation. If it is not possible to put any definite meaning on a provision, it is uncertain.4
[9] The approach to determining an application under s.217 of the Act is for the Commission to identify whether there is ambiguity or uncertainty in an enterprise agreement and then decide whether the discretion should be exercised to remove it. The first part of the process involves the identification of a jurisdictional fact which enlivens the power of the Commission to exercise the discretion to resolve the ambiguity or uncertainty by varying the agreement. 5 A positive finding of ambiguity or uncertainty must be made before the power to vary an agreement can be exercised.6
[10] Identification of ambiguity or uncertainty involves an objective assessment of the words used in the provision under examination, having regard to their context, 7 in order to determine whether, on its proper construction, the wording of the provision is susceptible of more than one meaning.8 The Commission will generally err on the side of finding an ambiguity or uncertainty where there are rival contentions advanced and an arguable case is made out for more than one contention.9 The threshold for finding ambiguity or uncertainty is not a high one.10 However, a disagreement between parties to an agreement about how it applies in certain factual circumstances does not of itself found an application to vary the agreement on the grounds of ambiguity or uncertainty11 and rival claims or contentions may well be self-serving12.
[11] The approach to construing industrial instruments such as enterprise agreements was set out in a Decision of a Full Bench of the Commission in AMIEU v Golden Cockerel Pty Limited (Golden Cockerel). 13The principles established in the cases referred to in that Decision, and in the later Decision of a Full Bench in Essential Energy v Australian, Municipal, Clerical and Services Union and Others14that are relevant in the present case can be summarised as follows:
• Construction of an agreement begins with a consideration of the ordinary meaning of its words; 15
• The agreement must be read as a whole 16 and regard must be had to the context and purpose of the provision being construed;17
• Context extends to the entire agreement, other associated documents or the ideas that gave rise to an expression in a document; 18
• The words used in an agreement should not be interpreted in a strict technical fashion, because those who framed the agreement are often non-lawyers with a practical frame of mind, drafting words in the context of custom and practice in an industry or particular enterprise; 19
• The process of construction is an objective task and it is not appropriate to have regard to the subjective beliefs or expectations held by one party;
• The task of construction is to identify the common intention of the parties as they have expressed it in the terms of their agreement; 20
• Search for evident purpose is permissible and meanings which avoid inconvenience or injustice may be reasonably strained for, however the task remains one of interpreting a document produced by others and not giving effect to some anteriorly derived notion of what would be fair or just, regardless of what has been written into the agreement; 21
• Regard may be had to evidence of the surrounding circumstances before the existence of ambiguity in an agreement is identified as an aide to interpreting the agreement for the purposes of determining whether an ambiguity exists, but cannot be used to contradict its language;
• If ambiguity is identified extrinsic material may be used as contextual material to aide in the interpretation of the agreement; 22
• It is not permissible to take into account the conduct of parties which occurs after an agreement is made as an aide to interpretation. 23
[12] If the Commission is satisfied that there is an ambiguity or uncertainty in a provision of an agreement that is sought to be varied, the Commission must then decide whether to exercise the discretion in s.217 to vary the provision. In Re Australian and International Pilots Association 24 Vice President Watson stated in relation to an earlier version of s.217 of the Act:
“The discretion of the Commission in the case of an ambiguity or uncertainty involves two questions. First, is it appropriate to vary the agreement? If so then secondly, what variations are appropriate? Similar considerations will often be relevant to both questions and hence the two questions frequently overlap. It is well established that a significant factor is the objectively ascertained mutual intention of the parties at the time the agreement was made. It is not appropriate to rewrite an agreement to install something that was not inherent to the agreement when it was made. These principles reflect the notion that an agreement is made by the parties usually without any arbitrated content or independently determined standards of industrial fairness. The exercise of the discretion conferred on the Commission in relation to an ambiguity or uncertainty does not give rise to a general discretion to determine a matter based on industrial fairness. The task is to place the parties in the position they intended by their agreement – insofar as the wording of the agreement does not reflect that intention. Although a significant factor, the objectively ascertained mutual intention of the parties is not the only consideration. However, it would be unusual for other considerations to weigh in favour of a variation that was inconsistent with the intention of the parties. 25
[13] It has also been held that objectively ascertained mutual intention of the parties evinced by their conduct after an agreement is made is relevant to the exercise of the discretion of the Commission to vary the agreement to resolve ambiguity or uncertainty 26 although as previously noted, that conduct is not relevant as an aid to the interpretation of the agreement. However, there are also cases where the parties have different intentions and no mutual intention can be ascertained. In United Voice v MSS Security Pty Ltd t/as MSS Security27a Full Bench of the Commission was considering an appeal against a Decision to vary an agreement to remove ambiguity or uncertainty, in circumstances where it had been found that there was ambiguity in relation to the term “all purpose”, and observed:
“It is possible in this case that that parties had different intentions as to the use of the words ‘all purpose’. The resolution of the matter requires the application of the following logic. If an ambiguity exists in relation to the payment of an additional amount, as in this case, and the evidence establishes that there is no mutual intention to pay the additional amount, then it would normally follow that the Commission should not vary the agreement to create an entitlement that is consistent with the intention of only one of the parties. Even if there is no clear mutual intention to not pay the additional amount, it would normally be desirable to resolve an ambiguity to make it clear that the amount is not payable when there is an insufficient basis to find that the parties agreed to pay the additional amount. Therefore if there was no mutual intention to apply penalty calculations to the allowance, then absent any other compelling circumstances, the company’s application was likely to succeed.” 28
3. RELEVANT AGREEMENT PROVISIONS
[14] The provisions of the 2015 Agreement relevant to the questions for determination are set out in full in Appendix A to this Decision and are as follows:
• Clause 3.0 Definitions: Average hourly rate of pay; Contractor / Fixed Term / Specific Task; Employees; Ordinary hourly rate and overtime rates.
• Clause 5.0 Parties Bound.
• Clause 20.0 Wages.
• Clause 22.0 Classification Changes.
• Schedule B Payment by Results Overview/Application.
[15] The provisions on which argument in relation to ambiguity centres, appear in a table in Schedule C – Classification schedule – Slaughtering Operations and associated areas / processes (Schedule C) as follows:
Classification levels | Indicative tasks / role |
... | ... |
Level 3 and 3T | An Employee at this level performs work above and beyond the skills of an Employee at Level 2 and is competent to perform work within the scope of this level. An Employee at this level is able to undertake the following tasks: feeding cattle from race into box, tying weasands (not in shackling area); washing anus and pit; rodding weasands; removing horns; removal of forehooves; removing heads by severing spinal cord and placing on table or chain; remove first hind hoot; change first leg; remove second hind foot; change second leg; saving sinews from forelegs; trimming sides; trimming forces; trimming hinds; remove face and tail piece from hides; open up foreleg sleeves on hides; assess and record the hump measurement and ossification rating of carcasses, Tripe work. |
[16] The classification levels in Schedule C refer to wage rates set in Schedule A of the 2015 Agreement. Schedule A contains weekly wage schedules for various years and work and includes the following [starting rates escalated through the course of the 2015 Agreement]:
Rate Per Carcase | Minimum Rate | 38 Hourly Rate | Waiting Time | AS Shift Allowance | |
Level 3 | 0.4522 | 942.98 | 24.09 | 27.92 | 25.68 |
Level 3T | 874.00 | 23.00 | 20.78 |
4. THE PROPOSED VARIATIONS
[17] The variation sought by ACC is as follows:
In Schedule A – Weekly Wage Schedule Slaughter Floor and Associated Areas/Processes insert at the end thereof:
“Note:
Level 3 rates apply only to employees employed in Level 3/3T classifications as described in Schedule C as at 26 June 2015.
Level 3T rates apply only to employees first employed in Level 3/3T classifications (as described in Schedule C) after 26 June 2015, except for employees engaged in Hind Quarter Trim, Fore Quarter Trim or Dropping Tongues, who shall be paid at Level 3 rates.”
[18] In its final submissions, ACC did not press the first sentence of its proposed variation and sought the addition of the words “time work” after the word “employees” where it first appears. The AMIEU sought the deletion of the classification schedule in the Agreement by deleting the current provisions in relation to Level 3 and Level 3T and replacing those provisions with the following:
Classification levels | Indicative tasks / role |
... | ... |
Level 3 | An Employee at this level performs work above and beyond the skills of an Employee at Level 2 and is competent to perform work within the scope of this level. An Employee at this level is able to undertake the following tasks: feeding cattle from race into box, tying weasands (not in shackling area); washing anus and pit; rodding weasands; removing horns; removal of forehooves; removing heads by severing spinal cord and placing on table or chain; remove first hind hoot; change first leg; remove second hind foot; change second leg; saving sinews from forelegs; trimming sides; trimming forces; trimming hinds; remove face and tail piece from hides; open up foreleg sleeves on hides; assess and record the hump measurement and ossification rating of carcasses. |
Level 3T | An employee at this level performs work above and beyond the skills of an employee at level 2 and is competent to perform work within the scope of this level. An employee at this level is able to undertake the following tasks: Tripe work. |
5. EVIDENCE
[19] Evidence on behalf of ACC in support of its application to vary the Agreement was given by:
• Mr Neil Carstens, Production Manager; 29
• Mr Adrian Doube, General Manager of the Further Processing Division; 30
• Mr Peter Milzewski, Chief Executive Officer, Processing; 31 and
• Mr Peter Hamam, Group Manager Human Resources and Safety. 32
[20] Evidence for the AMIEU was given by:
• Mr Robert Barton, Branch Organiser; 33
• Mr Darryl McKey, employee of ACC and AMIEU Shed Vice President; 34
• Mr Michael Solomon, employee of ACC and AMIEU Slaughter Floor Delegate; 35
• Mr Luke Brinkworth, employee of ACC and member of consultative committee; 36
• Mr Greg Bonavita, employee of ACC and member of consultative committee; 37
• Mr Warrant Reynolds, employee of ACC and AMIEU Shed President; 38
• Mr Delane Tumata, employee of ACC and consultative committee member; 39
• Ms Bernadette Conley, employee of ACC and consultative committee member; 40 and
• Mr Darren Conley, employee of ACC and consultative committee member. 41
[21] It was common ground that an issue which was extensively discussed in the negotiations for the 2015 Agreement was the use by ACC of labour hire employees. Those negotiating on behalf of the AMIEU sought to have what was called a site rates clause whereby employees of labour hire companies would be paid the same rates as ACC employees. Those negotiating on behalf of the Company sought, as an alternative to a site rates clause, to implement arrangements whereby employees of labour hire companies would be directly employed by ACC, but would be paid what the Company termed “market rates” or rates below those that were paid to ACC employees at the time the 2015 Agreement was being negotiated.
[22] A number of other matters are not in dispute. ACC employees are located in two main areas: the boning room and the slaughter floor (sometimes referred to as the kill floor). At the time the 2015 Agreement was negotiated, ACC employed some employees on hourly or time based rates and others on what were termed incentive rates. Incentive rates were paid to employees who were part of a group referred to as the “500 gang” or “500 team” or “base gang”. A 500 gang is all of the positions that are necessary on a given shift for processing 500 cattle on the slaughter floor or boning 500 bodies in the boning room. 42 Employees in the 500 gang are also entitled to be paid waiting time, and hourly rates in the Agreement for employees in the 500 gang are a base or minimum only, which underpins their incentive payments. It is also the case that at the time the 2015 Agreement was negotiated, there were some labour hire employees who were being paid incentive rates on the basis that they worked as part of the 500 gang.
[23] The employee witnesses called by the AMIEU were all members of a committee that negotiated the 2015 Agreement. A number of those witnesses tendered a document that was said to have been tabled by the Company during negotiations setting out “new market rates” proposed for employees who were employed after the 2015 Agreement came into effect. The proposed market rates are for Level 2 and 3 positions in the boning room and on the slaughter floor. The table setting out the rates is headed: “NEW Labour Rate From EBA Reg date”. In the Boning Room the hourly rates are: 3A $25.00; 3B $24.00; 2A $22.50; 2B $21.50; and 2 $20.70. For the Slaughter Floor the hourly rates are $25 for Level 3; $22 for Level 3NI; $22.50 for Level 2A and $20.70 for Level 2. 43
[24] Mr Barton’s evidence traced the history of the negotiations for the 2015 Agreement. Mr Barton said that he attended some 25 bargaining discussions from 18 June 2014 to 15 May 2015 in relation to the 2015 Agreement. At the time the 2015 Agreement was negotiated, there had been a significant presence of labour hire employees at ACC paid at lower rates than employees of ACC covered by enterprise agreements that applied to ACC’s slaughtering and boning operations. The AMEIU sought a “site rates clause” to the effect that labour hire workers would be remunerated at the same rates as ACC employees but this was rejected by ACC. ACC negotiators did indicate that they were prepared to directly engage a number of labour hire employees but wanted to “grandfather” the rates of pay for existing labourers and introduce new hourly rates of pay for new employees in labouring positions. According to Mr Barton, this was particularly significant because many of the employees performing these labouring tasks participate in a payment by results or incentive payment system in operation at the plant. Employees who participate in the incentive payment system are part of the “500 gang”. Grandfathered employees would continue to be part of the incentive payment system but new employees would receive the new hourly rates only.
[25] Mr Barton said that his notes for the bargaining meeting held on 21 August 2014 record that ACC was proposing to grandfather employees on Level 3 and below on the slaughter floor and in the boning room. The AMIEU and its representatives did not agree to the grandfathering but discussed with Company representatives how such a system would operate. At a bargaining meeting held on 30 August 2014, ACC representatives indicated that they would be prepared to “fill up the gang” with ACC employees but Level 3 positions and below would be grandfathered and new employees placed on new rates. There was also a discussion about some Level 3 slaughter floor positions, which were filled by labour hire employees, being exempted from these new rates when they commenced direct employment with ACC, including positions described as two forequarter trim positions, two hindquarter trim positions and a person performing a task referred to as “drop heads” [which was later replaced with a task referred to as “drop tongues”] (the five positions).
[26] At the bargaining meeting on 1 and 7 October 2014, Mr Barton requested that the ACC proposal with respect to grandfathering of positions be taken off the table. Those requests were refused by ACC management representatives. In response to a request for further information ACC provided the document setting out proposed pay rates for Level 2 and 3 labouring positions in the boning room and the slaughter floor. As previously noted, that document contains a table headed “Slaughter Floor NEW Labour rate from EBA Reg. date.” and includes a level entitled “3NI” and a corresponding wage rate of $22 per hour. 44
[27] At a bargaining meeting on 2 December 2014, there was a discussion about whether labour hire workers who were brought across to become employees of ACC should be grandfathered dependent on the length of their service. There was also a discussion about whether they would be offered permanent or casual employment. Mr Milzewski put forward a proposal on behalf of ACC that labour hire employees with more than twelve months service at the ACC plant would be offered positions with the Company in the 500 gang. Subsequently there was discussion and exchanges with ACC representatives about the wording of a possible labour hire conversion clause.
[28] At a bargaining meeting on 7 January 2015, Mr Journeaux (AMIEU Queensland Branch Secretary) attended and raised the Union’s concerns about the reduction in rates being proposed by ACC and the Company’s use of labour hire. At this meeting, the AMIEU representatives proposed that ACC consider higher rates of pay for new employees than its current proposal. At a further bargaining meeting on 8 January 2015, Mr Milzewski confirmed that ACC would not move on its proposed new pay rates. There was a discussion about whether certain positions on the slaughter floor would remain part of the incentive system (as opposed to new rates). Mr Barton asked for confirmation that the hindquarter and forequarter trim positions, head removal and head chain would be part of the incentive system. Mr Doube, on behalf of ACC, responded by stating that the hindquarter and headquarter trim positions would be incentive positions, and in response to an argument from Mr Solomon (AMIEU delegate) that the head removal task should be part of the incentive system, ACC representatives stated that they would investigate this matter.
[29] At a bargaining meeting on 18 February 2015, the issue of workers in the Tripe Room was raised. Mr Matthews on behalf of ACC agreed that 5 people in the tripe room would be included in the manning levels for the 500 gang to be brought across as ACC employees. Mr Barton believes that at this meeting, ACC distributed a standard manning sheet for a 500 team on the slaughter floor and boning room which did not include tripe workers and this prompted the discussion about their inclusion in the team. At that stage the wage rates to be paid to tripe workers were not clear.
[30] At a bargaining meeting on 26 February 2015, Mr Barton again raised the AMIEU’s concern that the rates proposed by ACC were too low. Mr Matthews responded saying that ACC could not raise the rates or it would not be competitive.
[31] In relation to a bargaining meeting on 4 March 2015, Mr Barton said:
“...the Company responded with an answer about the rate that would be paid for tripe work. Dave Matthews said that the Tripe Room work would be paid $23 per hour, and it would be called 3T. There was no suggestion that the rate of $23 per hour would apply to anyone other than the tripe workers. The ACC management representatives present at this meeting were Dave Matthews, Neil Carstens, Anthony Milzewski, Adrian Doube and Peter Phelan. The AMIEU representatives continued to argue that the company proposal (which included $25 per hour for level 3 positions on the slaughter floor) was too low, and the company continued to defend that proposal.”
[32] According to Mr Barton, ACC decided to put a proposed agreement to a ballot of employees. A final draft agreement was prepared by ACC and circulated to employees and members of the Committee negotiating the Agreement. Mr Barton said that he read through the draft agreement and noticed that the new rates proposed by ACC for labourers in the boning room had been included in the document but that the new rates proposed by ACC for employees on the slaughter floor had not been included. Mr Barton said that he relayed this information back to AMIEU members working on the slaughter floor. Mr Barton tendered a summary of changes between the 2011 Agreement and the 2015 Agreement prepared by ACC and given to employees prior to the ballot, which includes the following statements:
“Schedule A Wage Schedules – New employee market labour rates are included into the new agreement which also increases by 3% each year for four years.
THESE NEW EMPLOYEE RATES DO NOT APPLY TO EXISTING ACC EMPLOYEES.
...
Schedule C – Slaughter Floor Classifications, 3T – tripe work included in classification.” 45
[33] A protected action ballot sought by the AMIEU was held at the same time as the ballot for approval of the proposed 2015 Agreement on 20 March 2015. A majority of employees voted to approve the 2015 Agreement and a majority of AMIEU members also voted in favour of taking protected industrial action. There was a meeting of the bargaining committee held on 23 March 2015 to deal with some matters relating to the 2015 Agreement, details of back pay and bringing employees across from labour hire agencies. The meeting proceeded on the basis that the 2015 Agreement had been approved by employees and would be approved by the Commission in due course.
[34] According to Mr Barton, an application by ACC to the Commission for approval of the agreement was refused on the basis the notice of employee representational rights issued by the Company did not comply with the requirements of the Act. Following the rejection of the agreement by the Commission, there were further meetings of the bargaining committee. At a meeting on 7 May 2015, also attended by Mr Journeaux, the AMIEU again argued that the Company should abandon the new rates. ACC’s position was that it would make minor amendments to address deficiencies identified by the Commission but would not start again. At a subsequent meeting on 15 May 2015, Mr Milzewski confirmed that ACC was going to persist with the grandfathering of rates and new rates for “new employees coming in”.
[35] ACC put its proposed 2015 Agreement up for a vote for a second time. There were some changes to the proposed 2015 Agreement, which were summarised in a document prepared by ACC. That document, which was tendered by Mr Barton, states that the Commission had raised some issues about the previous version of the 2015 Agreement related to the definition of ordinary hours of work, and that clauses dealing with that issue had been reworded. 46 In late August or early September 2015 (after the 2015 Agreement had been approved by the Commission) Mr Barton became aware that ACC was advertising vacancies in Level 3T positions on the slaughter floor. When this issue was raised with management by Mr McKey, he was informed that the Level 3T classification applied to all new employees. Mr Barton states that this was different to the AMIEU’s understanding of the Level 3T classification and led to the AMIEU initiating the current dispute. Mr Barton tendered a “Positions Vacant” notice advising of opportunities for Level 3T Slaughter Floor positions on the day and afternoon shifts. The criteria for the position refer to “All Level 3T tasks”.47
[36] Under cross examination, Mr Barton agreed that grandfathering rates of pay for existing labourers and the introduction of new rates of pay for those who had been previously engaged under labour hire arrangements, were core requirements that ACC told the AMIEU that it was seeking from the negotiations. 48 Mr Barton further agreed that: ACC’s preparedness to employ persons who had previously been engaged under labour hire arrangements was in response to an AMIEU request; in return the Company wanted to grandfather rates of pay for existing employees and introduce new rates for new employees;49 and ACC maintained this position from the beginning to the end of negotiations.50
[37] In relation to the five positions, Mr Barton agreed that the five employees to be brought over to ACC had previously been engaged by a labour hire company and that the proposal was that those five employees would not be employed as time workers but would become part of the 500 gang on an incentive plan and incentive work arrangements. 51 Mr Barton agreed that the rates he was referring to as being too low at a meeting of 26 February 2015, were Level 3 rates rather than Tripe Room rates and that the designation “NI” was for “non-incentive” and that another term for “non-incentive” is “time work”.52 Mr Barton also agreed that the 3NI rate when it was proposed did not apply to tripe work and was subsequently increased to $23 per hour. Mr Barton maintained that the $23 per hour rate became the rate for tripe workers and was designated as 3T.
[38] Mr Barton also agreed that the $22 per hour rate initially designated as 3NI was increased because it was below the rate for a lower level classification in the Boning Room – 2A – but maintained that the level 3T rate was a rate for tripe workers only. Mr Barton also agreed that no-one from ACC stated that all the persons to whom the Level 3NI rate had applied were left out of that level when it was increased from $22 per hour to $23 per hour and designated as Level 3T. Mr Barton further agreed that such a proposition would be nonsensical, 53 and that no-one from the Company had ever suggested that there was going to be no pay rate for employees who would have been covered by the proposed 3NI rate and that the 3NI rate was increased to $23 per hour and narrowed to cover only employees in the Tripe Room.54 In response to a series of questions from the Commission, Mr Barton said:
• ACC initially proposed a rate of $22 per hour for non-incentive or time workers doing Level 3 jobs and designated as Level 3NI;
• The AMIEU did not agree with that rate;
• Tripe Room workers were not in that proposed level at the time because they were not directly employed by ACC.
[39] The following exchange occurred between the Commission and Mr Barton in relation to the Level 3NI and Level 3T rates:
“No, what - no, I want to know at the time that this was being discussed, what was your understanding of - if the tripe workers weren't in yet and the company was proposing a rate of $22 for 3NI, who was going to be paid that rate?---The level 3 - the level 3 workers, yes. That's what they - - -
Doing what?---Doing level 3 jobs.
As time workers?---As time workers, yes.
Now when you - on your own evidence, when the company said all right, we'll make this level 3 rate only for tripe workers, where did the rest of the people go?---Well they didn't go anywhere. They stayed - - -
Well they must have. They still existed?---That's right.
What rate did they become entitled to be paid?---Well as far as we were all concerned, they were still under the level 3 incentive rate system.
But they were never under the incentive rate system. You just agreed a minute ago that there were a category of people who were time workers at level 3, right?---Not in the previous agreement there wasn't, no.
Well that's not my understanding of your evidence?---No, no.
My understanding of your evidence is that the company proposed a rate 3NI and you said, "Yes, for the time workers at level 3". I said, "What did they do?" And you said, "Well, they did non-skilled things", that's that you said to Mr Herbert. Now what I want to know is what did they do and when the company, on your own case, made this classification only for tripe workers, where did those other people go? Because there must have been some because otherwise what on earth were you talking about? If there weren't people in 3NI who the company proposed to pay $22 an hour to, why were you even negotiating about it at all?---Well there was no negotiations about it. As I've said to Mr Herbert, that was a - that was a chart that the company put up, but it really didn't reflect anything.
Well who did you - you just said the company proposed a 3NI rate of $22 an hour. That couldn't possibly work because the level 2 rate - - -?---That's right.
- - - the lower level rate was higher than the rate the company proposed for a level 3NI?---Yes, that's right.
The company agreed to increase it to $23 an hour and then they agreed to put the tripe workers in it. Now what I want to know is who else was in it at the point the tripe workers were put in it, and if they're not in it now, where are they?---Well look, there was never - the tripe workers were always talked about separately from any of the other workers. The tripe workers were always in a category of their own.
Forget the tripe workers. Forget they existed, forget the tripe workers. You were negotiating a rate 3NI, before the company agreed to put the tripe workers into it, yes or no?---No, not incentive - - -
Well the company said $22 and you said it's not enough?---No, that's right, that's right.
So you were negotiating about the rate - - -?---Sorry, sorry, you're right, yes, yes.
- - - for 3NI. Who were the employees that you were negotiating on the - - -?---The level 3 employees, yes.
So there were no tripe workers in 3NI. Who was in it?---They were all the level 3 workers.
All the level 3 workers?---That was what the company proposed. That was the company's proposal for us - - -
But they also had a level 3. A level 3 and a level 3NI. Who was in the NI? What were they doing?---Well, that's right, yes.
Well I'm asking you?---Look, from my memory I can't - the 3NI, and you'll see that it's disappeared from - it just popped up there. From my understanding we didn't have anything - non-incentive rate was all covered - all of the non-incentive workers were already covered through the agreement.
By what?---Down into the level 2 positions, yes.
So they all went down into level 2?---Well they were always level 2. I mean I don't know - with this 3NI here, the company's proposal was for non-incentive workers. So they were the workers that were - they were the workers that weren't in level 3 and look, from my memory they did include the tripe workers but now that was where it said that they weren't paid enough and - - -
Who, the tripe workers? You weren't even - you hadn't even agreed the tripe workers would come in yet?---No, that's right, no. That's right, yes.
So how - - -?---I believe that that was all the company put up there to cover those workers, yes.” 55
[40] Mr McKey said that during the negotiations AMIEU members wanted a “site rates” clause or the Company to move away from using labour hire by moving labour hire employees over to its books. According to Mr McKey, ACC representatives said that consideration would be given to moving employees across but if they did so they wanted a grandfathering arrangement as a trade-off and to pay new employees a “new market rate”. According to Mr McKey, at one of the meetings, ACC handed out a document proposing what the new market rates should be for Level 2 and 3 positions on the kill floor and in the boning room. That document tendered by Mr McKey is the same document as was tendered by Mr Barton. 56 Mr McKey said:
“The ACC proposal was that it was prepared to top up the positions needed for a ‘500 gang’ with permanent ACC employees, and was prepared to bring employees across from the labour hire companies to do so. We had agreed upon the gang sizes in the boning room and on the kill floor. The new market rates would apply to anyone employed (at level 2 or 3) after the 2015 EBA commenced, except to labour hire employees brought across to ACC who had been working at the plant from twelve months or more.” 57
[41] Mr McKey and other employees believed the rates were too low because they considered them to be market rates for labour hire employees rather than for the meat industry generally, but were prepared to consider the proposal. In a discussion about what Level 3 positions would be paid at the new market rates, ACC’s position was that it would apply to all Level 3 positions on the slaughter floor except for five specific tasks – the two forequarter trim jobs; the two hindquarter trim jobs; and the “drop heads” task. After being asked to consider the position of the Tripe Workers, the Company agreed that they were prepared to bring Tripe Workers under the Agreement but were not prepared to pay them $25 per hour. According to Mr McKey the rate of $25 per hour was the “new market rate” proposed for new Level 3 employees and the rate to be paid to Tripe Room workers was not resolved at the meeting. Mr McKey also said that the Company responded to the question about the Tripe Room by stating that the Company would pay $23 per hour to employees in the Tripe Room. Mr McKey said that in a 500 gang there would normally be five workers in the Tripe Room and four of these would be the 3T classification and one would be classified at Level 2.
[42] According to Mr McKey there was never any discussion about the Level 3T rate applying to anyone except workers in the Tripe Room or about the various new market rates for other Level 2 and 3 classifications being changed to $23 per hour or being classified as Level 3T. Mr McKey also said that the AMIEU never agreed with the Company proposal for new market rates but was prepared to discuss it because it was possible that agreement could be reached if the rates were increased.
[43] Under cross-examination, Mr McKey agreed that the designation “NI” stands for non-incentive worker, and that there had been two Level 3 positions previously that had been paid at a non-incentive rate. Mr McKey also agreed that the $22 per hour rate for the Level 3NI position proposed by ACC was a new market rate and maintained that when that rate was amended and became $23 per hour and designated as 3T, he believed that it applied only to Tripe Workers. Mr McKey said that he assumed that Mr Matthews (who designated the rate as 3T) was referring only to Tripe Room workers because that was the category of employees being discussed and that there was no discussion about what other classifications of employee may be within Level 3T because no other classifications were being discussed at the time.
[44] In response to the proposition that if Level 3T covered only Tripe Room employees there was no classification for other employees on the slaughter floor at Level 3, Mr McKey said that when he saw the proposed 2015 Agreement that was to be put to employees for approval, he believed that the rate for other Level 3 employees had been left out of the 2015 Agreement. In relation to this matter, Mr McKey had the following exchange with Mr Herbert on behalf of ACC:
“So, if they followed on with what had been agreed there were going to be a lot of time workers employed at a level 3 rate but from what you say when you saw the draft agreement, or when the agreement came out to be approved there was no rate in there for time workers of the kind that they said they would take over from labour hire companies, was there?---Well, no, there was only the existing level 3 rate which is an incentive rate and 3T, which is the tripe room rate.
All of these new workers that the union wanted to be brought on, there was no rate of pay for them?---Yes, there was.
No time worker rate?---There was the 3T incentive rate.
What 3T incentive rate?---The level 3 incentive rate.
You just said that was for incentive workers, not time workers. The company was bringing on time workers, not incentive workers. Where was the time work rate of pay for all these new labourers they were bringing over from labour hire?---I don't know, it wasn't in the agreement.” 58
[45] And further:
“Maybe they do, but if they're employed as a time worker, what's their rate of pay? It's not an incentive rate of pay and it's not 3T, what is it?---If they're employed as a 2A or a 2 that would be an hourly rate and if they're employed in the tripe room they would be getting 3T. All other level 3s would be on incentive.
Why?---Because - - -
They are time workers, you can't get an incentive rate of pay if you're a time worker?---If you start there as a time worker and they put you on an incentive job they have to pay you an incentive pay rate. If they hire me as a level 3 and put me on level 5 they have to pay me level 5.
Mr McKey, you thought, didn't you, that there was no rate of pay for these people in the agreement and that there had been a mistake?---No, I knew there was a rate of pay in the agreement, it's level 3 incentive for the workers on the floor and 3T for the tripe room.
Be careful what you say, Mr McKey, because you have committed yourself to writing in relation to this. Was it not the case that you thought that ACC had left out the new market rates for these workers?---That's right, for reasons unknown.
Did you then arrange for the union or some representative of the committee to come along and tell the Commission of the approval process that this agreement has a big hole in it because they're going to employ all these time work labourers and they don't have a rate of pay there for time work labourers, did you tell that to the Commission or arrange for that to be told to the Commission?---I don't agree with you, in the fact that there is a rate of pay for everyone.
You say that is because if you employ somebody as a time worker and the work fits within the level 3 descriptor in the classification structure, if they're not a tripe worker they have to be an incentive worker even if they're employed as a time worker?---That's why we have classifications.
So that is your theory, is it? You say there is a rate of pay there for everyone and if you're working on a time system and you're not working on an incentive system, how do that work? How do you get an incentive rate of pay if you're not working under an incentive system?---Well, an example is you have your time workers who are level 2, 2A and 3T tripe work, they're time workers. Now if somebody is hired in those capacities but they're put on the floor as a level 3 or 4 or a 5, well they get paid incentive because that's what the rates specify in the agreement.
Because the employer has in place an incentive payment scheme in relation to that person?---For 3, 4 and 5 they do.” 59
[46] Mr Solomon attended some but not all of the bargaining meetings and also tendered the table setting out ACC’s first proposal in relation to rates of pay that included Level 3NI at $22 per hour. 60 Mr Solomon said that the table shows Level 3 and Level 3NI because some of the Level 3 jobs are for incentive workers and others are for non-incentive workers who are paid an hourly rate. Mr Solomon also said that the AMIEU believed that the market rates proposed by the Company were too low.
[47] According to Mr Solomon the new rates proposed by ACC were to apply to new employees from the date the Agreement came into operation. Labour hire employees who were brought over on to ACC’s books would be paid the new market rates unless they had worked for the labour hire company at the ACC plant for 12 months or more. Mr Solomon also confirmed that there was a discussion at one of the bargaining meetings in which ACC said it was prepared to move labour hire employees to its employment to fill positions on the 500 gang. Further, Mr Solomon confirmed that there was a discussion about the Tripe Room workers being part of the 500 gang and the Company said that it would consider the Union position that Tripe Room workers should be brought under the 2015 Agreement.
[48] Mr Solomon said that at a later meeting, ACC representatives said that they would be prepared to move Tripe Room workers over to ACC’s books and produced a manning sheet that included Tripe Room workers. Mr Solomon also said that: “Most of the Tripe Room positions had the word ‘new’ next to them instead of a classification.” 61 Mr Solomon tendered a copy of that document, which indicates five positions in the Tripe Room with four of those positions designated as being “new”. The document tended by Mr Solomon also shows some positions designated as 3NI. Mr Solomon said that he asked what the rate for Tripe Room workers would be and was told that the Company did not want to pay “the new level 3 rate” for Tripe Room workers and would get back to the AMIEU representatives about the rate for that work.
[49] According to Mr Solomon, at the next meeting, Mr Matthews came back with the Company’s response about the Tripe Room work. Mr Matthews said that there would be a new rate for the Tripe Room of $23 per hour designated as Level 3T. The Company also proposed a new market rate of $25 per hour for Level 3 employees and the AMIEU representatives were arguing for that to be increased. In his statement, Mr Solomon said:
“The AMIEU representatives did not agree to the new market rates. However, the negotiations were not getting any further, and so we agreed with the company that the agreement should be put up for a vote so the people could decide.
I was given a draft of the proposed agreement seven days prior to the vote. I read through the draft. Rob Barton, our AMIEU organiser, discussed the draft with me, and brought to my attention that the new market rates for the slaughter floor had not been included in the EBA, even though they had been included for the boning room.” 62
[50] Mr Solomon attended a meeting of day shift slaughter floor workers prior to the vote for the agreement being held. Mr Foote spoke on behalf of ACC and talked about the new market rates and which jobs on the slaughter floor would be grandfathered and in this regard mentioned forequarter trim, hindquarter trim, dropping heads and dropping tongues. The Tripe Room and the 3T classification were not mentioned. A majority of employees approved the 2015 Agreement but after issues were raised by the Commission with the Notice of Employee Representational Rights, a second ballot of employees was held. There was no further discussion about Level 3T or rates for employees in the Tripe Room prior to the second ballot and the approval of the 2015 Agreement.
[51] In a further witness statement made on 1 March 2016 63, Mr Solomon said that there was a discussion about the Level 3T rate after the 2015 Agreement was approved by the Commission, around September 2015, when the present dispute arose. During that discussion, Mr Solomon said that the Level 3T rate was not the rate that was discussed for ex-incentive workers or Level 3 employees who had been incentive workers under previous agreements. Mr Solomon’s evidence was that he said something to the effect of: “You stuffed up the agreement”, but did not say “so that’s what we’re going with.” Mr Solomon said that he made this comment because the Company representatives who drafted the Agreement left out the new rates for slaughter floor employees. Mr Solomon also stated to Company representatives at that time that the Company was trying to “use 3T to get out of the mistake they had made with the Agreement.”64
[52] Under cross-examination Mr Solomon agreed with the following propositions:
• Early in the negotiations for the Agreement it was agreed that the Company would take on a significant number of labour hire employees and hire them directly;
• The Agreement would have to accommodate those former labour hire employees and their circumstances;
• The quid pro quo for the Company employing labour hire employees directly was that those employees (ie. new follow on labour coming across to ACC under those arrangements) would be paid what the Company called “market rates” which would be time work rates;
• If the new Agreement was to accommodate such employees it would be required to include a time work rate;
• Tripe Workers who were labour hire employees would be brought across to ACC as part of the time work system;
• Other classifications including employees dropping heads and tongues would be treated as being part of the 500 team and paid as incentive workers;
• The initial 3NI rate proposed by ACC was for non-incentive employees;
• Existing employees were to be “grandfathered” and new employees would be paid a new rate;
• ACC employees are employed as incentive or non-incentive (time work) employees;
• Incentive and non-incentive or time work employment are mutually exclusive and employees not included within the incentive payment scheme are, by definition non-incentive employees or time workers.
[53] Mr Solomon did not agree that former labour hire employees employed as time workers who were coming across to ACC would be paid the proposed 3NI rate and maintained that if you were doing a job that was an incentive job, you would get the new rate for Level 3 of $25 per hour and that the only jobs excluded from this arrangement were head removal, dropping tongues, hindquarter and forequarter trimming and that employees doing those jobs were going to stay on the original incentive rates. Later, head removal was disputed by the Company. Mr Solomon could not recall the initial Level 3NI rate proposed by the Company changing from $22 to $23 per hour. In relation to the proposed rates, Mr Solomon had the following exchange with Counsel for ACC:
“When the agreement ultimately came out, the written draft agreement for circulation amongst the troops, 22 disappeared, had disappeared by then?---Yes, changed to 23.
And the 3NI had disappeared and in its place there was 3T and $23?---$23 what was - the 3T was put for the tripe room when we asked - - -
I haven't asked you that yet. The $22 3NI rate had disappeared and $23 and 3T was the only new rate in there at level 3, the only new time work rate in there at level 3, wasn't it?---I can't recall that, sorry.
In the draft agreement when it came out?---Sorry, I can't recall that.
You haven't read the agreement?---I have read the agreement and the rates - yes, we noticed the $25 rate was not in there, just the T3 was put in the agreement.” 65
[54] Mr Solomon maintained that the Level 3T rate was only to apply to the Tripe Room employees but could not recall what was said about the designation “T” in the level. Mr Solomon also said that the Company had not made it clear that the Level 3T rate was to apply to classifications other than Tripe Room employees. In response to the proposition that no-one said that the Level 3T rate was exclusively for Tripe Room workers, Mr Solomon said that at the time the Level 3T rate was announced the Company and employee representatives were discussing Tripe Room workers. Mr Solomon said that it was assumed that the other workers would become time workers and be paid $25 per hour. When challenged about the use of the term “assumed” Mr Solomon said that it was made clear during the negotiations that this is what time workers would be paid “if that job was originally incentive”. 66
[55] In response to a question about what new non-incentive employees would be paid, Mr Solomon said that his understanding was that the Company proposed that these employees would be paid $22 per hour. Mr Solomon confirmed that his understanding was that new non-incentive time workers were to be paid $22 per hour and Tripe Workers were to be paid $23 per hour. Mr Solomon said that he did not know whether the Company put the rate for other employees up to $23 per hour. Appended to Mr Solomon’s witness statement was a document setting out standard manning for a 500 team on the slaughter floor. Mr Solomon pointed to some tasks – condemned paunches and foetal blood – performed by employees classified at Level 3NI [non-incentive]. Mr Solomon agreed that in addition to those employees there are a number of other employees performing labouring work who are not in the 500 team and are currently being paid Level 3T rates.
[56] In response to questions from the Commission, Mr Solomon agreed that within Level 3 there are incentive and non-incentive workers. The non-incentive workers are “off to the sides”. Mr Solomon was asked by me what happened to the Level 3 non-incentive workers when the 2015 Agreement was finalised and responded as follows:
“So where do you say - when the company made 3NI or 3T and 3, where did the non-incentive workers go from level 3?---Sorry, from level 3?
Originally they were talking about level 3 and level 3 non-incentive, is that right?---Yes, that's correct.
So there were level 3 people who were incentive and level 3 that were non-incentive?---Yes, that's correct.
If that level 3NI ended up only for tripe workers because they've got called level 3T, where did the other people that were in it go?---No idea.
So, it could have been to level 2, it could've been - - -?---Yes, level 2. The employees would have come over, some of them are level 2 now, some of them who are not in the tripe room are receiving T3 at the moment, they're downstairs, they've got nothing to do with tripe but they are receiving T3, some are just receiving level 2.
Where did you understand they would go?---Well, my belief was in the agreement, level 3s would be paid the $25 an hour and the T3 would be the tripe room and level 2, non-incentive would remain.”
[57] Mr Brinkworth confirmed that one of the main issues pressed by the AMIEU in negotiations was use by ACC of labour hire employees and attempting to have ACC directly employ those persons. When the 2015 Agreement was negotiated there were some labour hire employees who had been working at the plant for 4 or 5 years, doing the same work as ACC employees and being paid less. The issue of bringing these employees across to ACC’s books was raised at consultative committee meetings. After some negotiation the Company agreed to bring these employees over on the basis that existing employees and labour hire employees who were brought over would have their rates of pay “grandfathered” and new employees would be paid a new rate. Mr Brinkworth also confirmed that ACC was going to fill the 500 gang with people brought across from labour hire companies, and they would be grandfathered if they had been working for ACC for more than twelve months.
[58] In relation to the Level 3T rate, Mr Brinkworth said that there was a discussion about having the Tripe Workers made full time ACC employees and the 3T rate was agreed to be paid to Tripe Workers as there was no rate for this work because it had previously been contracted out.
[59] Under cross-examination, Mr Brinkworth agreed that the discussion about Tripe Workers had taken place over a number of meetings but maintained that the letter “T” in the 3T classification stood for “Tripe Workers”. Mr Brinkworth also said that no-one said anything about the Level 3T rate applying to any other classifications. In response to a question about what the rate would have been for time workers coming on to the slaughter floor, Mr Brinkworth said those employees would have been paid $25.00 per hour. Mr Brinkworth agreed that the Level 3NI rate for non-incentive workers in the Company’s initial proposal was below the 2A rate for employees in the Boning Room.
[60] Mr Bonavita said that in negotiations the AMIEU pushed for ACC to bring labour hire employees across from labour hire companies and have them directly employed by ACC. The Company was prepared to do that but said that it would pay new employees at “new market rates”, which would apply to labouring positions on the slaughter floor and in the boning room. At one meeting, AMIEU representatives asked for Tripe Room employees to also be brought over to ACC instead of that work being contracted out. According to Mr Bonavita, to get the Company to agree to this proposal, Union representatives had to agree to a new rate that was lower than the market rates for incentive and non-incentive labourers on the slaughter floor. ACC said it would not bring these employees across at the new market rate for Level 3 but would only do it at a lower rate which they called Level 3T.
[61] Under cross-examination, Mr Bonavita said that he is a member of the 500 gang and is entitled to receive incentive payments and to be paid for waiting time. Mr Bonavita agreed that there are a number of labourers in and about the slaughter floor who are not working under an incentive scheme. Mr Bonavita also agreed that there were labourers employed by labour hire companies who were brought over to work for ACC directly, and that these employees were to be paid a lower rate. Mr Bonavita said he did not know whether these employees were paid a time work or an incentive rate and did not wish to speculate. When asked what the former labour hire employees were to be paid, Mr Bonavita said: “The $25 per hour, or is it the non-incentive. I’m not too sure because there’s the two, the non-incentive and incentive.” 67 Mr Bonavita also said that in order for ACC to agree to directly employ Tripe Workers, the Company required them to be employed at a lower rate – the 3T rate – and that only Tripe Room workers were to be paid that rate. Mr Bonavita agreed that it was not said by anyone from the Company that no other employees would be paid the 3T rate and could not say that any one from the Company ever stated that the 3T rate was only for Tripe Room employees.
[62] Mr Reynolds, Mr Tumata, Ms Conley and Mr Conley were not required for cross-examination and their witness statements were tendered without objection.
[63] Mr Reynolds said that one of the AMIEU’s main concerns was the number of labour hire employees being used at the ACC plant and that the Union wanted the Company to bring people across from the labour hire agencies so that they would be directly employed by ACC. ACC representatives said that they would be prepared to bring enough labour hire employees across as permanent ACC employees to fill out a “500 gang”. ACC management also said that if they did this they wanted new rates for people employed by ACC after a certain date, and referred to these as “new market rates”. Company representatives said that these rates would be more than those workers would receive if they were working for the labour hire company that had previously employed them. According to Mr Reynolds, the Company proposal was that existing employees in the boning room and slaughter floor would be “preserved” and would continue to receive their existing rates of pay. New employees would receive new market rates, which were hourly rates of pay.
[64] Mr Reynolds also said that the AMIEU response to those proposed rates was that they were too low. Company representatives said that the rates would either be accepted or the offer was no longer on the table. At one of the meetings, Mr Solomon and Mr McKey raised the issue of people who worked in the Tripe Room and that there had been agency workers in the Tripe Room for a long time, but it was part of the kill floor. ACC representatives said that they would think about bringing the Tripe Room workers over. At a later meeting, ACC representatives said that they had considered the matter and were prepared to bring Tripe Room workers over to ACC and make them permanent. They also said that the pay rate would need to be decided as there was not a classification for tripe workers in the existing agreement.
[65] Mr Reynolds said that the rate for Tripe Workers must have been resolved at a later meeting but he did not remember any discussion about this matter. Mr Reynolds also said that he did not recall any discussion that the Level 3T rate would be the new market rate classification for the slaughter floor.
[66] Mr Tumata is a boner and works on day shift. Mr Tumata said that labour hire was an important issue in the negotiations for the 2015 Agreement and there were discussions about labour hire employees being given the opportunity to come across and work for ACC if they met the Company’s suitability criteria. Mr Tumata also said that the Company wanted new rates for labourers, which they referred to as “new market rates”. Those workers already in the workforce would have their rates of pay preserved but after the agreement was signed off, any new employees would get the new rates. Mr Tumata also tendered the document showing the proposed market rates and said that the Union responded to the proposal by stating that the rates were too low.
[67] Mr Tumata said that the only time he remembers the Level 3T being brought up was in relation to pay rates for Tripe Workers. However Mr Tumata also said that as he works in the boning room, he is not familiar with all the jobs on the slaughter floor and let slaughter floor representatives handle this issue.
[68] Ms Conley confirmed that ACC was seeking new rates for labourers that would apply to employees at Level 3 and under, and that these rates would apply to new labourers on the slaughter floor and in the boning room. Ms Conley said that this issue mainly affects the boning room as the slaughter floor does not have as many labouring positions as there are in the boning room. Ms Conley does not remember any discussion about the Level 3T classification during the enterprise bargaining meetings or in meetings that ACC management held to talk to employees about the 2015 Agreement.
[69] Mr Conley also confirmed discussions at enterprise bargaining meetings about new rates in the Agreement for labourers and that the Company was going to grandfather the rates for existing employees and that new labourers in the boning room would get a different rate. Mr Conley said that he could not remember discussions about the slaughter floor but his main focus was in the boning room.
[70] In evidence for ACC, Mr Carstens said that in negotiations for the 2015 Agreement, the Company commenced discussion about revising the rates for the follow-on Level 3 labour on the slaughter floor and the pool packers in the boning room. Mr Carstens attended every meeting of the Committee that negotiated the 2015 Agreement other than meetings held in December 2014. The Company stated that its objective was to generate a new lower market rate for those positions in line with rates being paid in other processing establishments throughout the country. These rates were only to apply to new employees and did not affect existing employees who were to be kept on existing rates. According to Mr Carstens, after discussion about the lower market rates, agreement in principle was reached on rates that were to apply to employees on the slaughter floor and the boning room.
[71] The rates for Level 2 employees in the slaughtering area were not changed because it was determined that the existing rates were already competitive, whereas the Level 3 existing rates were significantly above market rates available to ACC’s competitors through labour hire companies. The AMIEU members on the Committee raised the issue of rates for slaughter floor employees and sought preservation of higher rates for 6 positions. The Company representatives informed employees that it was agreed that the following positions (the five positions) would be paid at the higher rate:
• Tongue removal (1 position);
• Hind quarter trim (2 positions);
• Fore quarter trim (2 positions).
[72] The Company did not agree to the higher rate being paid for the head removal position due to the fact that the employee performing this task had mechanical assistance. Employees were told that the new rates tabled by the Company were final and that it would pursue the new rates for follow-on labour in slaughtering and boning departments. As part of the discussions, ACC also agreed to transfer all employees who had been working on the site for labour hire companies for a period of twelve months, to direct employment with ACC. ACC further committed that if these employees were placed in the base slaughtering gang their wage rates would be “grandfathered” at existing incentive rates on which they were engaged. ACC also agreed that all standard manning positions that were not filled as part of the uptake of long term labour hire employees would be filled by transferring other suitable labour hire employees over to ACC at the new market rates proposed by the Company.
[73] An enterprise bargaining progress update circulated to employees on 3 March 2015 was tendered by Mr Carstens. That document states that “New market rates for all employees will be as indicated below”, and goes on to set out wage rates for the slaughter floor for “Level 3” at $25 per hour and Level “3NI” as $22 per hour. The designation “NI” is for non-incentive. Mr Carstens initially said that the $25 per hour was an existing rate and that the new market rate was $22 per hour for Level 3NI – or “non-incentive”. In a supplementary statutory declaration made on 1 June 2016 68, Mr Carstens said that the $25 per hour was not an existing rate of pay for any employee at the time it was proposed. That rate was intended to apply to new employees who were to be engaged in the incentive slaughtering team in the future in positions such as the five positions. The $22 per hour rate was proposed for employees engaged at Level 3NI as it was then described.
[74] AMIEU representatives on the Committee requested and were provided with a copy of the standard manning for the slaughter floor for a 500 kill. At the request of Mr McKey, the company considered and agreed that Tripe Room employees would be included in the standard manning and would be directly employed by ACC rather than engaged through a labour hire company. The Company further advised that these employees would be paid the new “3NI” rate. Once the Company agreed that those five positions would be in the 500 gang and paid incentive rates, it was not necessary to maintain a time work rate at Level 3 and the $25 per hour rate was removed from the then draft of the 2015 Agreement.
[75] In a later draft of the 2015 Agreement the designation “3NI” was changed to “3T”. This change was made by Mr Matthews who is no longer employed by ACC. Mr Carstens maintained that at no time was it agreed that the new market rates of pay applied only to tripe workers and not to all new employees. The only discussion about this matter was that tripe workers would be included in the “new worker” rate of pay and there was no agreement that all other new workers would be dropped out of the “3T” classification leaving only tripe workers covered. When a summary of changes to the 2015 Agreement to reflect this was produced, it was noted that tripe work was included in the Level 3 classification.
[76] Subsequently it was pointed out that the proposed $22 per hour rate was slightly lower than the rate payable at some other sheds and this rate was increased to $23 per hour. At all communication meetings in relation to the 2015 Agreement, ACC informed employees that the new Level 3T rate was to cover new employees engaged after the EBA was made and that the rates paid to existing employees were not going to change. Slaughter floor employees had the concept of “grandfathering” explained to them in detail.
[77] In oral evidence, Mr Carstens said that it was envisaged that the Level 3NI classification rate that was originally tabled by ACC would cover follow-on labour in the slaughter floor area who were new employees commencing employment after the 2015 Agreement came into effect. Originally there was an intention that the Level 3NI classification would cover all follow on labour and then five positions were split out and left on the incentive rate. According to Mr Carstens, since the 2015 Agreement was approved, the Company has engaged 16-20 labourers in the Level 3T classification.
[78] Under cross-examination, Mr Carstens agreed that prior to the 2015 Agreement being approved, there were some employees who were paid a rate that the Company called 3NI, being a non-incentive rate or time work rate. That rate was paid to two or three employees on a shift who performed the tasks of processing heart sacs, collecting foetal blood and operating the basement - an area under the slaughter floor. Those employees were not part of the incentive arrangements and there was no rate for them in the 2011 Agreement. A rate was developed for these employees and termed the Level 3NI rate. This rate was the minimum hourly rate for a Level 3 employee with no incentive payment.
[79] In response to questions from the Commission, Mr Carstens said that the initial proposal advanced by ACC was that all Level 3 employees would be paid the new market rates of pay being the Level 3NI rate of $22 per hour. This subsequently changed in a series of steps. Initially the Company proposed that existing employees would be grandfathered and retain the rates they were on when the Agreement was made. New employees on Level 3 or lower were to be paid a lower non-incentive rate of $22 per hour. The rate of $22 per hour was later increased to $23 per hour. It was then decided to split Level 3 and to place the five positions [previously discussed] at a higher rate of $25 per hour. Then, to get the agreement across the line those five positions were designated as incentive positions and retained an incentive payment. Those positions were selected because the AMIEU maintained that they were key positions on the chain and that persons in those positions held more skills than other employees. When the five positions were designated as incentive positions, the $25 per hour rate disappeared as there were no longer any positions it would apply to.
[80] Mr Carstens was shown Exhibit 16 and agreed that all of the new market rates set out in that document were time work rates. In relation to Exhibit 16, Mr Carstens maintained that the amount of $25 for Level 3 was a time rate offered by the Company with respect to the five positions and that this rate was no longer relevant once it was agreed that the five positions would be paid incentive rates. Mr Carstens also said that the request by employee representatives for the five positions to be paid incentive rates and for the Tripe Room employees to be included in the 2015 Agreement, were made at a meeting on 4 March 2015 and that the Company subsequently agreed to these requests. Thereafter, the 2015 Agreement at Level 3 prescribed an incentive rate of $24.09 which was the last Level 3 rate in the 2011 Agreement with the 3% wage increase from the 2015 Agreement added to it, and the Level 3 rate of $23 per hour, which was a time rate for new employees.
[81] Mr Doube participated in the majority of meetings at which the 2015 Agreement was negotiated. According to Mr Doube the position that the Company proposed and maintained was that it needed to provide current market labour hire rates of pay for new employees in the Agreement, in order to compete with other processors in the industry who had access to those rates through labour hire providers and so that the Company could directly employ a number of existing labour hire employees while remaining competitive.
[82] The Committee that negotiated the 2015 Agreement never discussed naming the new labour rate as Level 3T and the rate was initially referred to as Level 3NI on the basis that “NI” stood for “non-incentive”. The only reference to 3T that Mr Doube was aware of was in the final stages of negotiation meetings when the then Human Resources Manager, Mr Matthews, responded to a question about the new rates and said: “I don’t care what we call it – make it 3T for all I care.” Mr Doube also said that he had never heard of any connection between the use of the letter “T” in the new Level 3 rate and “Tripe” before the Agreement was approved.
[83] Mr Doube also said that Tripe Work had been performed by contract labour immediately prior to the approval of the 2015 Agreement and was not referred to in the 2011 Agreement. Tripe Work was added to the Level 3 classification in the 2015 Agreement as this was the appropriate skill level. Mr Doube said that whilst Tripe Work was included in the skill level it was included in relation to both classifications 3 and 3T, which had different pay rates depending on whether an employee performing the work was an existing employee with a preserved or grandfathered rate or a new employee. Mr Doube maintained that the Level 3T rate was never intended for Tripe Workers only and that at no stage were those workers going to be paid at the existing Level 3 rates.
[84] Mr Doube also referred to a conversation at a meeting after the 2015 Agreement was approved at which the issue of poor drafting was discussed. Mr Doube said that in that discussion he asked Mr Solomon and Mr McKey whether they were really going to sit there and suggest that the Company had not discussed the payment of new market rates for new Level 3 employees and in response, Mr Solomon said: “ You guys stuffed up the document, so that’s what we’re going with.”
[85] Under cross-examination, Mr Doube maintained that the Level 3NI rate of $22 per hour (later increased to $23 per hour) was to be paid to all new workers at classification Level 3. Mr Doube was shown the document setting out proposed rates appended to the statements of AMIEU witnesses and said that the $25 per hour rate in that table was “the equivalent rate that the existing incentive level 3’s would be entitled to” and agreed that “if there was a new employee and they were going on to a level 3 task, that would be the rate non-incentive that they would receive.” 69
[86] Mr Doube also agreed that on the slaughter floor, there were, at the time, a small number of employees who were paid the minimum hourly rate for Level 3, but were not incentive workers – namely pericardia workers, workers collecting foetal blood and undertaking a task involving condemned paunches. These employees were paid a non-incentive rate designated as Level 3NI. Mr Doube went on to agree that the $22 per hour rate was to be paid to the employees performing those tasks and the other Level 3 tasks which had been incentive tasks were to be paid $25 per hour. 70 Mr Doube also agreed that the five identified positions were going to be exempted from the new market rates of pay by the end of the negotiations.
[87] Mr Doube agreed that a list of labour hire employees with more than 12 months service was generated and that the Company agreed to grandfather those employees “if there was a position in the 500 gang.” 71 Mr Doube further agreed that the Company acceded to the request of employee representatives to include Tripe Room employees in the 2015 Agreement and that there was a discussion where Company representatives said that they did not wish to pay $25 per hour to Tripe Room employees. Mr Doube was shown Exhibit 16 and agreed that each of the four rates of pay in the table was a “new market rate” and that each rate was a time work rate.72 In re-examination, Mr Doube repeated his evidence that the $25 per hour rate was a new market rate intended to be paid to Level 3 follow-on labourers.
[88] Mr Milzewski also maintained that the Company had sought to implement new market rates in the negotiations for the 2015 Agreement and needed to do this to remain competitive. According to Mr Milzewski, employee representatives requested that labour hire employees be brought “in-house” and become ACC employees. The Company agreed to directly employ those persons and to preserve the incentive rates being paid to labour hire employees who had been engaged at ACC for a continuous period of 12 months and who were placed in the “base gang” in the slaughtering and boning areas. All other labour hire employees were to be brought onto the Company payroll as new employees on new market rates.
[89] This has been implemented and all relevant labour hire employees have been engaged as Company employees on written contracts of employment, with the non-preserved group being engaged at the Level 3T rate of pay. This arrangement did not affect existing ACC employees as they were all to be “grandfathered” at their existing rates and the new (lower) market rates would apply to all new Level 3 employees in the boning and slaughtering areas. Mr Milzewski said that he is concerned that despite the presentations and explanations about this matter, the AMIEU is attempting to reverse that clearly stated position by taking advantage of what can only be described as a drafting error. Mr Milzewski also asserted that he had stated to existing employees that they would not be disadvantaged, no-one would lose out and labour hire employees and other new starters would gain by acquiring Company employment albeit at the lower market rates. This position was agreed by the Committee.
[90] Further, Mr Milzewski asserted that he stated to the Committee and employees that all new employees in Level 3 positions after the 2015 Agreement commenced would be employed on the new lower labour market rates even though they would perform the same duties of an existing Level 3 employee. At the request of the Committee, some duties which would have been performed at the new lower rates were exempted from that rate and were agreed to be paid at the higher existing Level 3 rate even if these duties were being performed by new employees – forequarter trim, hindquarter trim and dropping tongues (the five positions referred to by other witnesses for ACC).
[120] Negotiations centred on the quantum of the new market rates proposed by ACC and the jobs to which those rates would apply. ACC increased the proposed market rates during those negotiations. A document circulated by ACC and tendered by a number of witnesses for the AMIEU 75 indicates that ACC proposed a rate of $25 per hour for a level in the wages structure designated as Level 3 and a rate of $22.00 per hour for a level designated as Level 3NI. There is no dispute that the designation “NI” is an abbreviation for non-incentive and indicates that the proposed rate was time based. It is significant that the document setting out those proposed rates does not contain any rates for waiting time. For reasons set out above, this means that it is more probable than not that all of the proposed rates set out in the table in that document were time based, including the $25 per hour rate.
[121] There is evidence that the AMIEU representatives rejected those proposed rates asserting that they were too low. This is not surprising given that the ACC proposal included a higher rate for a lower level – Level 2A in the Boning Room – of $22.50 per hour and the initial offer for Level 3NI was $22 per hour. The evidence also establishes that at some point during the discussions about these rates a number of developments occurred including (in no particular order):
• The Level 3NI rate was increased to $23 per hour;
• The designation “3NI” was changed to “3T”; and
• It was proposed that jobs performed by five employees of labour hire companies – hindquarter trim (2 employees), forequarter trim (2 employees) and dropping tongues (1 employee) (the five positions) – would be paid the Level 3 rate of $25 per hour when they were directly employed by ACC.
[122] By 11 March 2015, Tripe Work which had previously been performed by labour hire employees for which there was no reference in the 2011 Agreement was said to be “included in classification” for Level 3T. Consistent with a memorandum to employees of that date 76, the final version of the 2015 Agreement contains the Level 3 definition from the 2011 Agreement except that the full stop after the word “carcases” has been replaced with a comma and the words “Tripe work” have been added.
[123] ACC’s evidence is that in order to secure agreement to its proposed new market rates, it changed its position from offering employees in the five positions the Level 3 time work rate of $25 per hour and agreed that the five positions would be included in the standard manning for the 500 gang and that the labour hire employees performing that work would be directly employed by ACC and be paid incentive payments as preserved employees.
[124] There are a number of facts that support ACC’s proposed interpretation of the disputed provisions. Most significantly the proposed rate of $25 per hour for Level 3 did not find its way into the final version of the 2015 Agreement that was voted on by employees and approved by the Commission. The Level 3 rate that appeared in the final version of the 2015 Agreement, and which was approved by employees, is $24.09. As previously noted, that rate is 3% above the final rate for Level 3 in the 2011 Agreement, and the rate in the 2011 Agreement for Level 3 was an incentive rate with an associated hourly payment for waiting time.
[125] It is highly improbable that the AMIEU would have made no comment about the removal of the rate of $25.00 per hour for Level 3 from the Company’s proposal and its replacement with a rate of $24.09 per hour if it believed that the $24.09 was a time work rate that applied to all employees in Level 3 positions regardless of when they were employed. The most probable explanation for the lack of response to the removal of the $25 per hour rate for Level 3 and its replacement with a rate of $24.09 per hour, is that the latter rate was understood to be an incentive rate and the former rate was not, and the $25 per hour was irrelevant when the five positions to which it was proposed to apply, were included in the incentive scheme, consistent with the evidence of ACC witnesses.
[126] There is also clear evidence from Mr Barton and Mr Solomon that prior to the 2015 Agreement being voted on by employees and approved by the Commission, they formed a view that the new market rates sought by the Company for the slaughter floor had not been included. Mr Solomon agreed that he stated to Company representatives when the present dispute arose, that they had “stuffed up”. As previously noted, Mr Barton and Mr Solomon were unable to provide any clear evidence as to what the appropriate classification rate is for non-incentive Level 3 employees if that rate is not the rate for Level 3T.
[127] This matter was not clarified in the AMIEU’s submissions. The AMIEU submitted that in circumstances where the new market rates sought by the Company had been omitted, and employees were not within Level 3T (which the Union asserts applies only to Tripe Workers), then apart from the 3NI tasks they would fall within the Level 3 classification and be subsumed within it. The AMIEU also submitted that the issue is what rate should be paid to Level 3 employees who are not employed on an incentive basis and noted that there is no category or classification of time worker in the 2015 Agreement and that the incentive rates attach to jobs not individual employees.
[128] In my view the evidence establishes that the new market rates for employees on the slaughter floor were not omitted from the 2015 Agreement that was voted on by employees. There is a new market rate for the slaughter floor of $23.00 per hour for time workers. The omission or error noted by the AMIEU representatives was that there was no delineation in relation to the employees to whom this new market rate would apply. This is consistent with Mr Barton’s evidence that he noted at the time that the slaughter floor wages schedules differed from those applicable in the boning room. That difference was that the boning room wages schedules differentiate between grandfathered, preserved and new rates as they apply to various categories of employees while the slaughter floor wages schedules do not make this distinction.
[129] In relation to the question of the rate to be paid to Level 3 employees not employed on an incentive basis, the AMIEU accepts that the Level 3 rate is “necessarily an incentive rate of pay” 77 and did not contend that it is also a time rate. That submission leaves the question of what rate applies to employees working in jobs that are within the list of tasks which appear to apply to both Level 3 and Level 3T but which are not tasks listed in the 500 gang. The AMIEU has not provided a satisfactory answer to that question.
[130] On the evidence before me and the submissions of the parties, there is no basis for finding that the Level 3 rate can apply to jobs and to employees doing jobs which are not part of the incentive scheme. Mr Buckley for the AMIEU accepted that in considering the rate for Level 3, the whole line of the wages table, including the rate per carcase, the minimum hourly rate and waiting time, needs to be taken into account including the rate for waiting time.
[131] To find that the minimum hourly rate component of the Level 3 rate applies to non-incentive positions would be contrary to the terms of the Agreement and the longstanding application of those terms, which makes it clear that the Level 3 rate is an incentive rate and does not apply to time workers. To find that workers doing any of the tasks or jobs within Level 3 other than Tripe Work, are entitled to be paid incentive rates, would require ACC to classify those employees as incentive workers contrary to the terms of the incentive scheme in the 2015 Agreement.
[132] On the plain words of the 2015 Agreement, the matter of whether ACC has an incentive scheme or not and which employees are appointed to positions that attract the provisions of such a scheme, is a matter within the prerogative of ACC. To construe the 2015 Agreement in the manner contended for by the AMIEU would require ACC to engage employees as incentive workers in positions that are not included in the 500 gang, the composition of which is determined in accordance with the Agreement, and would be contrary to the Company’s right to determine the makeup of the incentive scheme workforce. Alternatively, to accept the AMIEU’s submission would require the Company to dissect incentive rates and pay one component of those rates to time workers.
[133] Accordingly, I have concluded that the proper construction of the 2015 Agreement is that there are common job or task descriptions in the Classification Schedule in Schedule C of the 2105 Agreement for Level 3 and Level 3T. Employees can be classified by the Company as provided in that Schedule as incentive workers depending on whether the jobs they are performing are part of the 500 gang or some other agreed incentive based team. Employees may also be employed to undertake jobs or positions that are not part of the 500 gang. Employees who are employed to perform any of the jobs or tasks described in the common definition for Level 3 and Level 3T are entitled to be paid at the Level 3 rate if the job is included in the incentive scheme and at the Level 3T rate if it is not.
[134] The fact that the 2015 Agreement is capable of interpretation and that I have interpreted it, does not mean that it ceases to be ambiguous. It is still necessary to consider whether the 2015 Agreement should be varied. This is not a case where the mutual intention of the parties is objectively ascertainable. To the contrary – the Company representatives had an intention to establish new market rates for new employees to be employed as time workers that would be lower than the rates for existing employees. In return ACC agreed to directly employ a number of persons who had previously been employed by labour hire companies on the ACC site but on the basis that – but for the five positions – these employees would be paid the new time work rates. AMIEU representatives sought to persuade the Company to change its position, and when that was unsuccessful, acquiesced in the Company putting the 2015 Agreement to ballot.
[135] There is nothing unusual in the course of enterprise bargaining for a Union or employee representatives to acquiesce in an agreement which they do not fully support, being put to a ballot of employees. The unusual circumstance in this case is that the AMIEU representatives were aware that the Company had omitted to clearly delineate between incentive rates for existing employees and time work rates for new employees on the slaughter floor (as it had for boning room employees) in the version of the 2015 Agreement put to employees for approval, and did not point this out before the 2015 Agreement was voted on by employees and approved by the Commission. The AMIEU now asserts that an application under s.217 of the Act is not an appropriate mechanism to correct such a mistake and seeks a variation to reflect its position.
[136] There is irony in this submission. The conduct of the AMIEU in not pointing out the Company’s drafting error may have been a legitimate bargaining tactic or hard bargaining. The AMIEU was not obliged to assist the Company to draft an Agreement reflecting a position that the AMIEU did not agree with. The AMIEU may be entitled to take advantage of what can only be described as incompetence on the part of those who drafted the Agreement. However, in circumstances where the AMIEU allowed a version of the Agreement to go to ballot when its representatives knew that what was being voted on did not properly reflect the Company’s final position the AMIEU cannot now seek to vary the Agreement to reflect its own position using an ambiguity that it played a part in creating. To vary the Agreement to reflect the AMIEU’s position would be an inappropriate exercise of the discretion in s. 2176 of the Act.
[137] The evidence does not establish mutual intention of the parties in relation to the application of the Level 3T rates. The evidence does not establish any intent on the part of the Company that Level 3T would apply only to Tripe work. I am also of the view that there is no reasonable basis for employees to have had a belief that the Level 3T rate applied only to Tripe work. The Company’s position was that the new market rates would apply to all new employees. Nowhere do the witnesses for the AMIEU assert that any Company representative said that the Level 3T rate applied only to Tripe work. The fact that Tripe work was being discussed when the classification was designated as Level “3T” instead of its previous designation of 3NI does not establish a reasonable basis for such a belief. At best, the evidence establishes that the Company agreed that it would include Tripe work on the basis that Tripe workers had previously been engaged by labour hire companies.
[138] However, this is a case where notwithstanding that there is no clear mutual intent, it would be desirable to vary the Agreement in the manner proposed by the Company to make it clear that, consistent with my interpretation of the 2015 Agreement, Level 3T is not confined to Tripe Work. The objective background facts established from both ACC and AMIEU witnesses include that ACC was pressing for new market rates for Level 3 and did not depart from that position. I am also satisfied that the Company did not intend, and did not agree, that Level 3T would be confined to Tripe Work and that the error in the drafting of the 2015 Agreement has led to unintended consequences. The drafting of the 2015 Agreement leaves much to be desired. ACC is a large company with dedicated human resource management professionals and the poor drafting and conflicting evidence given by Company witnesses, is surprising. Nonetheless I am satisfied that this is an appropriate case for the exercise of the discretion to vary the 2015 Agreement.
[139] Further, I am not satisfied that the AMIEU representatives who negotiated the Agreement intended that the Level 3T rate would apply only to Tripe work. If that was the intention, then the failure of witnesses for the AMIEU to explain what rate would apply to time workers at Level 3 and of the Union to articulate its position on this issue in the hearing, is surprising. In my view, the arguments of the parties about what the letter “T” stands for – time or tripe – is more about opportunism than intent.
7. CONCLUSION
[140] I am satisfied that the classification definition in the 2015 Agreement for the Level 3 and Level 3T classifications is ambiguous so that the power to vary the 2015 Agreement under s. 217 of the Act is enlivened. While the ambiguity can be resolved by applying the principles relevant to the construction of Agreements, in the absence of clear and compelling reasons to the contrary, I have decided to vary the 2015 Agreement in the terms sought by ACC to make it clear that the Level 3 and Level 3T definition in Schedule C is a combined definition, by including a note under the Slaughter Floor Wages Table in Schedule A that makes it clear that employees who are employed as time workers after the Agreement came into effect, to perform any of the jobs in the Level 3/3T definition, are to be paid the rate applicable to Level 3T.
[141] ACC is to file in the Commission a consolidated version of the 2015 Agreement incorporating the variation by 4pm on Thursday, 13 October 2016. Once a consolidated version of the 2015 Agreement is filed an Order will be issued varying the 2015 Agreement and publishing a consolidated version on the Commission’s website.
DEPUTY PRESIDENT
APPENDIX A
3.0 Definitions
...
Average hourly rate of pay means the ordinary week’s pay for the employee divided by 38, or as required by the Company within the Slaughtering Operations and Associated Areas up to forty (40) hours.
Week’s pay means the ordinary rate of pay for the Employee concerned provided that such rate shall exclude:
• Overtime;
• Penalty rates;
• Disability allowances;
• Shift allowances;
• Special rates;
• Fares and travelling time allowances;
• Bonuses; and
• Any other ancillary payments of a like nature.
...
Contractor/Fixed Term/Specific Task engagements are for a specific need/time in which there is no on-going expectation of employment beyond the time period or job engaged for. (Such personnel are not subject to this Agreement).
Employees shall mean a current Employees (sic) and or future eligible Employees covered by the classifications herein.
...
Ordinary hourly rate and overtime rates
For time Employees, except where otherwise expressly provided:-
Ordinary hourly rate shall mean the Agreement rate of pay per rostered week prescribed in the attached classification schedule, for the classification of the Employee, divided by 38
Time and one half shall mean the ordinary hourly rate increased by 50 per cent; and
Double time shall mean the ordinary hourly rate increased by 100 per cent.
For Employees under the incentive payment system:
Time and one half shall mean the unit rate increased by 50 per cent; and
Double time shall mean the unit rate increased by 100 per cent.
5.0 Parties Bound
The Parties to this Agreement are:
• Cannon Hill Services Pty Ltd; and
• The Employees are eligible Employees covered only by the classifications set out herein (other than Employees of any description who are engaged through labour hire or similar entities at any time) and the Union (as defined) who are signatories to this Agreement.
20.0 Wages
The wages to be paid to Employee is that specified in the attached Schedules. However, any current Employees as at the date of the signing of this Agreement receiving a rate in excess of the rate specified shall retain the excess amount upon this Agreement being made. These anomalies shall be confined to Employees currently receiving such excess and shall not be extended to any other Employees or used as a precedent for any claim by the union or Employees or eligible Employees.
20.1 Wage Increases Boning and Slaughter Floor Employees
This Agreement will pay for wage increases of 3% payment each year of the Agreement, as per the relevant Schedules.
The First year increase will coming into effect for the first pay period following the approval of this Agreement by FWC. Subsequent increases will be on the 12 month anniversary date thereafter.
A corresponding percentage increase in allowances will apply over the 4 years.
22.0 Classification Changes
Employees shall be engaged within a specific Pay Level within the Classification Structure. Employee’s classification and pay levels will be confirmed to Employee upon engagement/transfer/promotion in writing. Employees will need to achieve full competency within the Employee’s current classification level in order to be considered for advancement to higher classification vacancies.
Employees recognise that the undertaking of training will not automatically result in an upgrade of Employee classification. The Company has the discretion to make appointments within Classification Levels for an Employee, however appointments will be made with regards to the Promotion and Advancement Clause within this Agreement. All appointments must be confirmed in writing to the employee to be confirmed.
SCHEDULE B
Payment by Results Overview/Application
The purpose of this schedule is to outline the terms/application applicable to those Employees and positions in which a Payment by Results provision will operate as referred to in Clause 3 Definitions. Employees will not receive any less than their minimum weekly classification rate; this amount is the ‘safety net’ and not based on production throughput. Payment by Results applies to both Beef and Veal slaughtering operations.
The Company will be responsible for regulating and controlling the operational processes to ensure the safety of Employee, product quality and food safety standards are maintained. Production will be where practical evenly distributed across the production schedule (shift/day/week).
Daily production speeds/processes will be set based on the following assessments:
o Production volume required/available;
o Health & Safety and Food Safety issues;
o Manning and skill levels within the crews;
o Plant/equipment issues;
o Product specifications; and
o Any other regulatory requirements required of the operation.
The Company has the right to submit different production programs, staffing levels and operational controls in order to achieve efficient and effective output.
Processing Rates – Slaughtering Operations and associated areas/processes
For the purposes of the Slaughter Floor, the chain speed shall be regulated and controlled by the Company so as to provide as near as practicable, an even distribution of the daily production target, including an agreed tolerance, over the ordinary/usual hours of work. Unless agreed between the slaughtering team and management, the chain speed shall not be set to exceed the following levels when processing 500 head of cattle per shift:
Beef- 75 per hour
Veal- 76 per hour
Heavy Cattle- 72 per hour
Dirty Cattle- 69 per hour
Heavy Cattle – A slaughter team representative and an officer of the company will participate in the identification of Heavy cattle. Where heavy cattle are agreed, discussion will occur between the Slaughter Floor Manager and the nominated Slaughter Team representative on consideration for adjusting of chain speeds.
Dirty Cattle – The Company will where possible source additional labour to assisting with shearing hides along operating lines. A Slaughter Team representative and an officer of the Company will participate in the identification of dirty cattle. Where labour cannot be sourced additional shearing knives will be supplied by the Company.
The Company has the right to submit a different size kill and in doing so staffing levels change.
Different Gang Sizes – In accordance with the Consultative Committee agreement there are other agreed gang sizes that can be applied by the Company including the current 420 and 500 gangs. Payment of different gang sizes within a shift will be paid for on the basis of whatever hours a particular gang size is operating that the percentage of the kill will formulate the percentage of the day and the maximum kill is worked out accordingly.
...
Payment of Waiting Time
Employees shall not be paid waiting time for any delay in starting work or interruptions of work by reason of:
o Any strike in the meat industry
o Misconduct by Employees of the Company bound by this Agreement
o Proven faulty workmanship
Employees shall be entitled to waiting time for any delay or interruption of work due to any other cause. Waiting time shall be paid by the minute and based on the above rates.
The Company will endeavour to keep changeovers whilst employees are working in overtime to five (5) minutes as a minimum. Where this will not be achieved then waiting time will be payable for time outside the five (5) minutes.
1 C2015/6222.
2 AG2015/7814.
3 Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1981-1982) 149 CLR 337 at 350 per Mason J.
4 Meehan v Jones (1981-1982) 149 CLR 571 at 578 per Gibbs CJ.
5 Re: Tenix Defence Systems Enterprise Agreement PR917548 at [33] – [35] per Ross VP, O’Callaghan SDP and Foggo C.
6 CoInvest v Visionstream (2004) 134 IR 43 at 55 per Ross VP, Ives DP and Blair C.
7 Grocon Constructors Pty Ltd v Construction, Forestry, Mining and Energy Union AG812496 PR924146 at [18] per Ross VP.
8 Re Linfox - CFMEU (CSR Timber) Enterprise Agreement 1997 Print Q2603, 30 June 1998, per Munro J.
9 Grocon Constructors Pty Ltd v Construction, Forestry, Mining and Energy Union AG812496 PR924146 at [20] per Ross VP citing Re: Victorian Public Transport Enterprise Agreement 1994, Print M2454, 7 June 1995 per Ross VP, Polites SDP and Grimshaw C at p. 4; Re CFMEU Appeal, Print R2431, 25 February 1999 per Harrison SDP, Drake DP and Larkin C at para 13; Re Tenix Defence Systems Pty Limited Certified Agreement 2001-2004, Print PR917548, 9 May 2002 per Ross VP, O'Callaghan SDP and Foggo C.
10 United Voice v MSS Security Pty Ltd T/A MSS Security [2016] FWCFB 4979 at [19].
11 Construction, Forestry, Mining and Energy Union 175/99 N Print R2431 per Harrison SDP, Drake SDP and Larkin C.
12 SJ Higgins and Others v CFMEU PR903843 at [7].
13 [2014] FWCFB 7447.
14 [2015] FWCFB 1981.
15 City of Wanneroo v Australian Administrative Clerical and Services Union (2006) 153 IR 426
16 Amcor Limited v CFMEU and Ors [2005] HCA 10.
17 Short v Hercus (1993) 40 FCR 511 at 518.
18 Ibid.
19 Bond & Co Ltd (in liquidation) v McKenzie (1929) 28 AR 499.
20 Toll FGCT Pty Limited v Alphapham Pty Ltd (2004) 219 CLR 165 (at 179).
21 Kucks v CSR (1996) 66 IR 182.
22 [2014] FWCFB 7447 at [30].
23 [2015] FWCFB 1981 at [23].
24 (2007) 162 IR 121.
25 Ibid at [16] – [17].
26 Telstra Corporate Group Enterprise Agreement PR954989 14 January 2005 at [47] per Ross VP, Lacy SDP and Smith C; Tenix Defence Pty Limited Certified Agreement 2001-2004 PR917548 9 May 2002 at [28], [32] and [54] per Ross VP, O’Callaghan SDP and Foggo C.
27 [2016] FWCFB 4979.
28 Ibid at [23].
29 Statement dated 19 February 2016 Exhibit 14; Statement dated 1 June 2016 Exhibit 15.
30 Statement Exhibit 19.
31 Statement Exhibit 20.
32 Exhibit 21.
33 Exhibit 1 – Statement of Robert Barton, Exhibit 2 – Further Statement of Robert Barton.
34 Exhibit 3 – Statement of Daryl McKey, Exhibit 4 – Further Statement of Daryl McKey.
35 Exhibit 5 – Statement of Michael Solomon, Exhibit 6 – Further Statement of Michael Solomon.
36 Exhibit 8 – Statement of Luke Brinkworth.
37 Exhibit 9 – Statement of Greg Bonavita.
38 Exhibit 10 – Statement of Warren Reynolds.
39 Exhibit 11 – Statement of Delane Tumata;
40 Exhibit 12 – Statement of Bernadette Conley.
41 Exhibit 13 Statement of Darren Conley.
42 Exhibit 10 – Witness Statement of Warren Reynolds paragraph 8.
43 Exhibit 1 – “RB1”; Exhibit 3 – “DM”1; Exhibit 5 – “MS-1; Exhibit 8 – “LB-1”; Exhibit 9 – “GB-1”; Exhibit 10 “WR-1”.
44 Exhibit 1 – Statement of Robert Barton Annexure “RB-3”.
45 Ibid Annexure “RB-5”.
46 Ibid Annexure “RB-6”.
47 Ibid Annexure “RB-7”.
48 Transcript of proceedings PRN 250.
49 Transcript of proceedings PRN 251-252.
50 Transcript of proceedings PRN 258.
51 Transcript of proceedings PRN 259 – 268.
52 Transcript of proceedings PRN 283 – 286.
53 Transcript of proceedings PRN 331-336.
54 Transcript of proceedings PRN 392-394.
55 PN424 to PN447.
56 Exhibit 3 Statement of Darryl McKey Annexure “DM-1”; Exhibit 1 Annexure “RB-3”.
57 Exhibit 3 paragraph 6.
58 PN588 to PN592.
59 PN604 to PN612.
60 Exhibit 5 Statement of Michael Solomon – Annexure “MS-1”.
61 Exhibit 5 Statement of Michael Solomon paragraph 9.
62 Exhibit 5 paragraphs 13 and 14.
63 Exhibit 6 Further Statement of Michael Solomon.
64 Exhibit 6 paragraph 4.
65 Transcript of proceedings PN674 – PN678.
66 Transcript of proceedings PN705-708.
67 Transcript of proceedings PN851.
68 Exhibit 15 – Supplementary Statutory Declaration of Neil Carstens.
69 Transcript of proceedings PN1216-1221.
70 Transcript of proceedings PN1231-1232.
71 Transcript of proceedings PN Transcript of proceedings PN1249.
72 Transcript of proceedings PN1283-1284, PN1295..
73 PN1365.
74 Exhibit 1 – Annexure “RB-4”.
75 Exhibit 1 – Annexure “RB-3”; Exhibit 3 – Annexure “DM1”; Exhibit 5 – Annexure “MS1; Exhibit 8 – Annexure “LB1”; Exhibit 9 – Annexure “GB1”; Exhibit 10 – Annexure WR1; Exhibit 11 – Annexure “DT1”.
76 Exhibit 1 – Annexure “RB-5”.
77 Transcript of proceedings PN1729.
Printed by authority of the Commonwealth Government Printer
<Price code G, AE414513 PR586274>
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