CFMEU v Nubrik Pty Ltd
[2008] FMCA 1678
•22 December 2008
FEDERAL MAGISTRATES COURT OF AUSTRALIA
| CFMEU v NUBRIK PTY LTD | [2008] FMCA 1678 |
| INDUSTRIAL LAW – Interpretation of certified agreement. |
| Australasian Meat Industry Employees’ Union v Coles Supermarkets Australia Pty Ltd (1998) 80 IR 208 Kucks v CSR Ltd (1996) 66 IR 182 |
| Applicant: | CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION |
| Respondent: | NUBRIK PTY LTD |
| File Number: | SYG 533 of 2008 |
| Judgment of: | Burchardt FM |
| Hearing date: | 3 December 2008 |
| Date of Last Submission: | 3 December 2008 |
| Delivered at: | Melbourne |
| Delivered on: | 22 December 2008 |
REPRESENTATION
| Counsel for the Applicant: | Mr J.H. Pearce |
| Solicitors for the Applicant: | T. Roberts |
| Counsel for the Respondent: | Mr M.J. Follett |
| Solicitors for the Respondent: | DLA Phillips Fox |
THE COURT DECLARES THAT:
A declaration that on a proper construction of Clause 12 and Appendix A of the Austral Bricks (Scoresby Clay Workers) Enterprise Bargaining Agreement 2005, redundancy/severance payments to employees of the Respondent should include the following over-award payments and allowances where such employees would have ordinarily received over-award payments and allowances in respect of ordinary time worked had they not been made redundant:- Over-award Payment Allowances – attendance, dirty work, confined space, dryer, manganese, block, travel, production bonus.
| FEDERAL MAGISTRATES COURT OF AUSTRALIA AT MELBOURNE |
SYG 533 of 2008
| CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION |
Applicant
And
| NUBRIK PTY LTD |
Respondent
REASONS FOR JUDGMENT
In this case the Applicant, Construction, Forestry, Mining and Energy Union (“CFMEU”), has sought an interpretation of the Australia Bricks (Scoresby) Clay Workers Enterprise Bargaining Agreement 2005 ("the agreement"). The particular aspect of the agreement that the Court is required to interpret is clause 12 and appendix A which provide for redundancy/severance payments.
The Applicant says that the payments made to redundant employees should have included a number of over-award payments and allowances, these being attendance, dirty work, confined space, dryer, manganese, block, travel and production bonus.
The Respondent says that the proper construction of the agreement excludes payments of this sort.
For the reasons that follow, I have concluded that the Applicant's position is correct.
The proper approach to the interpretation of agreements
Both parties referred me to authority about the proper approach to the interpretation of certified agreements.
It should be noted that because I have concluded that the agreement is not ambiguous, it is not necessary for me to deal with the submissions made by the parties as to the propriety or otherwise of the receipt of extrinsic material as an aid to such interpretation.
In my respectful view, it is not necessary to do more than note that in Australasian Meat Industry Employees’ Union v Coles Supermarkets Australia Pty Ltd (1998) 80 IR 208, North J observed that the approach adopted by Madgwick J in Kucks v CSR Ltd (1996) 66 IR 182 (“Kucks”) is to be adopted in construing certified agreements.
That approach indicated by Madgwick J in Kucks is at page 184 and reads as follows:
“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: that they 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 attend 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.
But the task remains one of interpreting a document produced by another or others. A court is not free to give effect to some anteriorly derived notion of what would be fair or just, regardless of what has been written into the award. Deciding what an existing award means is a process quite different from deciding, as an arbitral body does, what might fairly be put into an award. So for example, ordinary or well‑understood words are in general to be accorded their ordinary or usual meaning.”
I approach my task in this case with his Honour's observations as my guide point.
The terms of the agreement
The agreement was certified by Commissioner Hingley on 6 September 2005 and its period of operation is limited by clause 6 to 30 June 2008.
Clause 7 reads as follows:
“RELATIONSHIP TO PARENT AWARD
This agreement shall be read and interpreted wholly in conjunction with the Clay and Ceramics Industry - Brick and Terra Cotta Tile Manufacture - Victoria - Award 2000 or the Metal, Engineering and Associated Industries Award, Parts 1, 2 and 5 1998, provided that where there is an inconsistency between this Agreement and Awards, this Agreement shall take precedence to the extent of the inconsistency.
The parties acknowledge that the term "Award", as used in this agreement, refers to all provisions in the awards as at 1 July 2002. The employer undertakes to maintain existing allowances and penalties payable under the current award provisions for the term of this agreement.”
By clause 12, Redundancy, it is provided that:
“The parties commit to the contents of the Redundancy Agreement attached as Appendix A of this agreement.”
That then brings us to the clauses with which we are directly concerned.
Clause A4, Severance Pay, provides that:
“In addition to the period of notice prescribed for ordinary termination, an employee whose employment is terminated in the relevant circumstances of redundancy shall be entitled to the following amount of severance pay in respect of continuous period of service.”
There are two alternatives, version A and version B, but nothing turns on this for present purposes.
The severance pay, as might be expected, increases according to the amount of time worked. The amount of pay that is provided is in fact set out in an arguably internally inconsistent way. If service is less than one year:
“Severance pay shall be a maximum of four weeks' ordinary pay divided by the number of completed months worked by the employee.”
For those who have worked more than one but less than two years and indeed up to five years, there is a prescribed amount of "severance pay" but there is no indication of what constitutes that severance pay. One would infer from the clause as a whole that the severance pay would be weeks of ordinary pay, as set out for those with less than one year or more than five.
For all employees who work more than five years, there is a certain nominated number of days of pay plus an additional number of days of ordinary pay.
It seems clear that the parties intended that all weeks of severance pay would be ordinary pay, as defined in the agreement.
This brings us to clause A5, which I set out in full:
“A5. DEFINITION OF "ORDINARY PAY"
For the purposes of this agreement, "ordinary pay" shall be consistent with clause 7.1.11(a)(i) of the Clay and Ceramics Industry - Brick and Terra Cotta Tile Manufacture - Victoria - Award 1996 and the corresponding provisions of the Metal, Engineering and Associated Industries Award, Part 1998.
Each employee shall be paid wages at the rate that they would have received in respect to the ordinary time worked had they not been made redundant. Wages are to include over‑award payments and allowances.”
As I pointed out to counsel during the hearing, while there are two paragraphs, as the definition is set out in the document before the Court, it seems to me that is simply because the layout of the clause required it. The three sentences would probably have been printed as one paragraph rather than two, had there been room. I should say, however, that even if I am wrong and it was intended that there be two subparagraphs within clause A5, that, in my view, would make no difference to the construction of the document.
The Clay and Ceramics Industry Award clause 7.1.11(a)(i) reads as follows:
“Ordinary Pay in relation to any employee means remuneration for the employee's normal weekly number of hours of work calculated at the ordinary time rate of pay, which includes over‑award payments, and the following allowances where applicable - shift work premiums according to roster or projected roster (including Saturday, Sunday or public holiday shifts), industry, leading hand, first aid, tool, qualification and service grants, and where the employee is provided with board or lodging by the employer, includes the cash value of that board or lodging.”
That definition, it should be noted, is a definition applicable to annual leave payments.
The equivalent clause in the Metal, Engineering and Associated Industries Award is clause 7.1.3(a) Time Workers, which reads:
“The wages to be paid must be worked out on the basis of what the employee would have been paid under this award for working ordinary hours during the period of leave, including allowances, loadings and penalties paid for all purposes of the award, first aid allowance and any other wages payable under the employee's contract of employment including any over‑award payment.
The employee is not entitled to payments in respect of overtime, special rates or any other payment which might have been payable to the employee as a reimbursement for expenses incurred.”
There was considerable debate before me as to what I should make of the nature of the various payments the subject of dispute. Counsel for the Respondent submitted that the payments referred to in the awards were all payments for what he described as capacity based payments, whereas those claimed by the CFMEU were, as he put it, categorised as activity payments. The former are paid on a weekly basis and in a sense reward a qualification or capacity, whereas the latter are paid on an hourly basis and are said to be only payable when the particular activity is being undertaken.
There is considerable force in that submission, which I think is broadly correct. I note, however, that it is inconsistent with paragraphs in the agreed statement of facts. Paragraphs 19 to 23 of the statement of agreed facts suggest that employees of the Respondent were paid a number of allowances regardless of whether the employees concerned had satisfied the necessary qualifications to be entitled to the allowance or not. Some of the allowances were also paid as flat or set rates per week regardless of whether or not the employees engaged in the particular activity or work specified in the allowance.
It appears that the payment of the allowances was to an extent idiosyncratic (see paragraphs 21 and 22 of the statement of agreed facts).
I mention these aspects of the statement of agreed facts because they show how, as is so often the way in industrial operations, what is written down does not reflect what actually takes place. Thus, while the intellectual analysis conducted by the Respondent and advanced by the Respondent's submission is in fact correct, it does not accord with what actually took place.
In the ultimate, this interesting aspect of the matter is, in my view, itself not determinative of the outcome of the proceeding. In my view, ultimately the agreement is easy to understand.
There are three sub‑parts of clause A5. The first is that the definition of "ordinary pay" must be consistent with the Clay and Ceramics Industry Award and the corresponding provisions of the Metal, Engineering and Associated Industries Award.
While counsel for the Respondent suggested that the position was that the two awards apply to different areas of the company's operation, namely office staff and other employees, there is no evidence before me in the agreed statement of facts to this effect. I note, however, that counsel for the Applicant did not challenge this assertion.
Furthermore, whatever the parties may have intended, it is clear that clause A5 requires the definition of "ordinary pay" to be consistent with the terms of both awards. "Consistent" is defined by the Macquarie Dictionary, second revision, as:
“(1) agreeing or accordant; compatible; not self‑opposed or self‑contradictory;
(2) constantly adhering to the same principles, course et cetera;
(3) holding firmly together; cohering.”
The definition in the Oxford Shorter Dictionary, while not identical, is to the same effect.
Counsel for the Applicant submitted that "consistent" in these circumstances should be taken to mean no more than compatible. Taking the clause as a whole, I agree. The terms of the two parent awards are not identical and yet the clause on its face has to be consistent with both. That points to the suggestion that what was meant was that clause A5 should be compatible with the award and not markedly contradictory.
If the parties had intended that the definition of "ordinary pay" in clause A5 should simply be that contained in the two agreements, then it would have been easy to say so.
To the contrary, the parties deliberately chose to add the extra words:
“Each employee shall be paid wages at the rate that they would have received in respect to the ordinary time worked had they not been made redundant. Wages are to include over‑award payments and allowances.”
If the position contended for by the Respondent was correct, those words would have no work whatever to do.
I accept that there is a tension in whichever interpretation of the clause one accepts. Just as it is true that the verbiage I have set out would be redundant if the Respondent's position were to be accepted, so too the verbiage adopted has, on one view, the effect of making the agreement incompatible with the two parent awards.
Nonetheless, the agreement itself provides that where there is any inconsistency between the awards and the agreement, the agreement prevails.
In the ultimate, I think that the extra words are simple to understand and mean what they say.
I accept the Applicant's submission on this point. Each employee was to be paid as ordinary pay "the rate that they would have received in respect to ordinary time worked had they not been made redundant." Those wages were expressly designed to include over‑award payments and allowances and "allowances" was not qualified save, arguably, by reference to the two awards.
It is clear from the statement of agreed facts that if the employees concerned had not been made redundant and had worked their ordinary hours for the periods of severance to which they were entitled, they would have received a considerable number of allowances.
The proper construction of the agreement, in my view, requires the Respondent to have paid by way of ordinary pay whatever it was the workers would have received if they had in fact worked. It would appear from the statement of agreed facts that this will, as I have earlier remarked, produce slightly idiosyncratic results because some workers would ordinarily have received some of the allowances that are in dispute and others would not. That is, in the ultimate, however, a relatively straightforward factual inquiry, which it has not been suggested cannot be done.
In any event, as earlier observed by Madgwick J, it is not my job to produce a fair outcome in an interpretation case. It is simply my job to interpret the agreement.
Given that I think that the agreement is easy to understand and means what I have said it means, it follows that the Applicant should have the relief that it seeks. I will make the declaration sought in the application.
I certify that the preceding forty (40) paragraphs are a true copy of the reasons for judgment of Burchardt FM
Associate: Ms B Evans
Date: 22 December 2008
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