CEPU v Thiess Pty Ltd

Case [2011] FCA 1020

FEDERAL COURT OF AUSTRALIA

Construction, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Thiess Pty Ltd [2011] FCA 1020

Citation: Construction, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Thiess Pty Ltd [2011] FCA 1020
Parties: CONSTRUCTION, ELECTRICAL, ELECTRONIC, ENERGY, INFORMATION, POSTAL, PLUMBING AND ALLIED SERVICES UNION OF AUSTRALIA v THIESS PTY LTD (ACN 010 221 486) and DEGRÉMONT PTY LTD (ACN 051 950 068)
File number(s): VID 899 of 2011
Judge: TRACEY J
Date of judgment: 31 August 2011
Catchwords: INDUSTRIAL LAW– enterprise agreement – rostering change – termination of employees – power cannot be exercised until dispute settling procedures set out in agreement followed
Legislation: Fair Work Act 2009 (Cth) ss 50, 539, 540, 545, 546, 739
Cases cited:

Amcor Limited v Construction, Forestry, Mining and Energy Union (2005) 222 CLR 241 cited
Australian Municipal, Administrative, Clerical and Services Union v Treasurer of the Commonwealth (1998) 82 FCR 181 referred to
Elkateb v Lawindi (1997) 42 NSWLR 396 cited
Fountain v Alexander (1982) 150 CLR 615 cited
Government Insurance Office of New South Wales v R J Green and Lloyd Pty Ltd (1996) 114 CLR 437 cited
IBM Australia Limited v National Distribution Services Limited (1991) 22 NSWLR 466 referred to
Kucks v CSR Limited (1996) 66 IR 182 cited
Shop Distributive and Allied Employees’ Association v Woolworths SA Pty Ltd [2011] FCAFC 67 referred to
Timic v Hammock [2001] FCA 74 cited

Macquarie Dictionary (Fifth Edition)
Oxford English Dictionary

Date of hearing: 29 August 2011
Place: Melbourne
Division: GENERAL DIVISION
Category: Catchwords
Number of paragraphs: 79
Counsel for the Applicant: Mr H Borenstein SC & Mr M Harding
Solicitor for the Applicant: Mr G Borenstein
Counsel for the Respondents: Mr F Parry SC & Mr R Dalton
Solicitor for the Respondents: Herbert Geer

IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY

GENERAL DIVISION

VID 899 of 2011
BETWEEN:

CONSTRUCTION, ELECTRICAL, ELECTRONIC, ENERGY, INFORMATION, POSTAL, PLUMBING AND ALLIED SERVICES UNION OF AUSTRALIA
Applicant
AND:

THIESS PTY LTD (ACN 010 221 486)
First Respondent

DEGRÉMONT PTY LTD (ACN 051 950 068)
Second Respondent

JUDGE:

TRACEY J

DATE OF ORDER:

31 AUGUST 2011

WHERE MADE:

MELBOURNE

UPON the Respondents by their counsel undertaking to abide by the dispute resolution procedure prescribed by Clause 15.1(b) of the Thiess Degrémont and AMWU, AWU, CEPU and CFMEU Victorian Desalination Project Greenfields Agreement 2009 in respect of the disputes described in paragraph [67] of the reasons for judgment delivered herein on 31 August 2011 and undertaking to abide by those terms until 4:15 pm on 9 September 2011:

THE COURT ORDERS THAT:

1.The further hearing of this proceeding and any necessary directions hearing be adjourned to 2:15 pm on 9 September 2011.

2.Liberty to apply.

Note:Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.


IN THE FEDERAL COURT OF AUSTRALIA

VICTORIA DISTRICT REGISTRY

GENERAL DIVISION

VID 899 of 2011
BETWEEN:

CONSTRUCTION, ELECTRICAL, ELECTRONIC, ENERGY, INFORMATION,…

Continue reading CEPU v Thiess Pty Ltd

Sign in free to access the full text

Details
AGLC
CEPU v Thiess Pty Ltd [2011] FCA 1020
Case
[2011] FCA 1020
Decision Date

CaseChat Overview and Summary

In CEPU v Thiess Pty Ltd, the Construction, Forestry, Mining and Energy Union (CEFU) filed an application on behalf of its members, who were electricians employed by Thiess Pty Ltd, against the company. The union sought to challenge a proposed rostering change by the company that would result in the redundancy of approximately 160 electricians. The dispute centred on the company's failure to comply with the dispute settlement procedures outlined in the enterprise agreement before implementing the roster changes.

The key legal issues before the court were whether the company was obligated to follow the prescribed procedures in the enterprise agreement before making the rostering changes and, if the company had failed to comply with these procedures, whether a pecuniary penalty should be imposed for any contravention. The court needed to interpret the relevant provisions of the enterprise agreement to determine the obligations of the parties and the consequences of any failure to comply with the agreement.

The court found that the company had indeed failed to comply with the prescribed procedures set out in the enterprise agreement before implementing the rostering changes. The court emphasised the importance of interpreting the agreement in light of its industrial context and purpose, as well as considering the multi-union nature of the agreement and its role in regulating the terms and conditions of workers on a unique project. The court concluded that the power to make rostering changes could not be exercised until the dispute settlement procedures were followed. The court ordered the further hearing of the proceeding to be adjourned and granted liberty to apply for further orders.

This case highlights the importance of adhering to the procedures outlined in enterprise agreements and the consequences of failing to do so. It also underscores the need for courts to interpret such agreements in a manner that contributes to a sensible industrial outcome, taking into account the unique context and purpose of the agreement.

Orders

Orders of the court

1. The further hearing of this proceeding and any necessary directions hearing be adjourned to 2:15 pm on 9 September 2011.

2. Liberty to apply.

Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Background

Background to the litigation

The issues raised by the CEPU’s application include whether, in the circumstances, the respondents are obliged to comply with the prescribed procedures and, if they have failed to do so, whether a pecuniary penalty should be imposed for any contravention.THE BACKGROUND FACTS The employment of electricians and other employees engaged on the project is governed by an enterprise agreement approved by Fair Work Australia. The agreement is entitled “Thiess Degrémont and AMWU, AWU, CEPU and CFMEU Victorian Desalination Project Greenfields Agreement 2009” (“the Agreement”). The Agreement was approved by Fair Work Australia on 12 January 2010. It has operated since 19 January 2010. Its nominal expiry date is 31 December 2012. The Agreement provides for employees (including the electricians) to work either what is known as a 56 hour roster or a 4 on 4 off roster. In the course of the present calendar year some electricians were working under the 56 hour roster arrangements and others on the 4 on 4 off roster. Towards the middle of the year the respondents engaged a large number of additional electricians. Many of these new employees were, they say, induced to give up other employment because of assurances from the respondents’ staff that work at Wonthaggi would be available until the end of the year or, in some cases, well into 2012. Some of these newly engaged employees committed themselves to leases of houses near the project site. Some altered family arrangements and moved their children into new schools. In June 2011 the respondents became concerned that there had been a considerable fall in the level of productivity on the part of electricians working under the 4 on 4 off roster. It raised these concerns with the CEPU. The concerns about productivity persisted. In mid August 2011 the respondents determined to move most of those electricians working on the 4 on 4 off roster onto a 56 hour roster. A consequence of this change, if it is implemented, will be that approximately 160 electricians will be made redundant. On the afternoon of 17 August 2011 the respondents arranged for the electricians to attend meetings on the site. The employees were handed a memo which advised them that:“The purpose of this memo is to notify you that TD will move the majority of electrical employees to the 56 hour roster effective from 25 August 2011. Accordingly, please be advised on the following:1.TD is meeting with the ETU today to notify them of this decision and to discuss associated issues;2.The decision has been taken on the basis that we have not achieved the level of productivity from the 4 x 4 roster required to meet the needs of the project and on current performance, the roster does not provide value for money;3.TD expects that there will be approximately 160 electrical positions demobilised (made redundant);4.TD will commence consultative sessions on the demobilisation process with electrical employees and their representatives later today. These sessions will continue over the coming week;5.TD intends to retain the most competent and skilled electrical employees on the project;6.More information will be provided to you through your Supervisor and in the consultative sessions, commencing from today …”

Evidence

Evidence Before The Court

Full text does not contain this section.

Decision

Reasons for decision

Full text does not contain this section.

Ratio Decidendi

Legal Principle Established

The respondents also pointed to the provisions of s 739(5) of the Act which qualifies the arbitral power conferred on Fair Work Australia by Clause 15.1(b)(vi) of the Agreement.CONSIDERATION The respondents’ contentions fall to be tested by reference to the language employed by the parties in Clause 15(1) of their Agreement, understood in an industrial context. In the well known passage in his judgment in Kucks v CSR Limited (1996) 66 IR 182 at 184 Madgwick J observed that:“It is trite that narrow or pedantic approaches to the interpretation of an award are misplaced. The search is for the meaning intended by the framer(s) of the document, bearing in mind that such framer(s) were likely of a practical bent of mind; they may well have been more concerned with expressing an intention in ways likely to have been understood in the context of the relevant industry and industrial relations environment than with legal niceties or jargon. Thus, for example, it is justifiable to read the award to give effect to its evident purposes, having regard to such context, despite mere inconsistencies or infelicities of expression which might tend to some other reading. And meanings which avoid inconvenience or injustice may reasonably be strained for. For reasons such as these, expressions which have been held in the case of other instruments to have been used to mean particular things may sensibly and properly be held to mean something else in the document at hand.”This passage was quoted with approval by both Kirby and Callinan JJ in Amcor Limited v Construction, Forestry, Mining and Energy Union (2005) 222 CLR 241 at 271 and 282-3. In Amcor Kirby J, speaking of a certified agreement, said (at 270) that:“The nature of the document, the manner of its expression, the context in which it operated and the industrial purpose it served combine to suggest that the construction to be given to cl 55.1.1 should not be a strict one but one that contributes to a sensible industrial outcome such as should be attributed to the parties who negotiated and executed the Agreement.”The need to have regard to the language of an agreement “understood in the light of its industrial context and purpose” was also emphasised by Gleeson CJ and McHugh J (at 246) and by Gummow, Hayne and Heydon JJ (at 253). These guides to construction were recently applied by a Full Court of this Court in Shop Distributive and Allied Employees’ Association v Woolworths SA Pty Ltd [2011] FCAFC 67 at [14]-[18]. The construction issues in the present case do not turn on jargon or industrial usage. It is, however, necessary to have regard to the context in which Clause 15.1 is to be found and to the purposes which it and the Agreement as a whole are designed to serve. It is also necessary to take into account the fact that the agreement is a greenfields agreement with multi union parties which is designed to regulate the terms and conditions of hundreds of workers on a unique project located in a remote part of Victoria.