No judgment structure available for this case.

[2017] FWC 1009

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.739 - Application to deal with a dispute

Coates Hire Operations Pty Ltd T/A Coates Hire
v
"Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union" known as the Australian Manufacturing Workers' Union (AMWU)
(C2016/5174)

COMMISSIONER HUNT

BRISBANE, 16 MARCH 2017

Alleged dispute about any matters arising under the enterprise agreement and the NES;[s186(6)].

[1] This matter relates to an application by Coates Hire Operations Pty Ltd (Coates Hire) for the Commission to deal with a dispute in accordance with a dispute settlement procedure under s.739 of the Fair Work Act 2009 (the Act).

[2] The dispute is between Coates Hire and the Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union" known as the Australian Manufacturing Workers' Union (AMWU).

[3] It is not contested that the Fair Work Commission (the Commission) has jurisdiction to arbitrate the dispute in accordance with the terms of the Coates Hire Operations Pty Limited National Agreement 2012 (the Agreement).

[4] The application was subject to a conciliation conference in September 2016, but was unable to be resolved. A hearing was held on 2 February 2017 to allow the parties to speak to their respective submissions. Mr Michael Mead of Ai Group appeared for Coates Hire. Mr Hugh Arjonilla appeared for the AMWU.

Agreed statement of facts

[5] The parties advised the Commission there was no factual contest and accordingly the following was filed as an agreed statement of facts:

‘1. Coates Hire is an equipment hire business which supplies to the building and construction, mining, oil and gas industries throughout Australia.

2. On 20 April 2016, Coates Hire wrote to 10 employees located in South East Queensland (Affected Employees) and proposed to stagger the commencement times of the Affected Employees between 7:00am to 9:00am (Proposed Change).

3. The Affected Employees are employed as Field Service Fitters within the Coates Hire business.

4. Immediately prior to the proposed change, all the affected employees worked pursuant to a commencement time of 6:54AM and conclusion time 3:00PM (Current Ordinary Hours).

5. The Current Ordinary Hours do not include the performance of any overtime.

6. The Proposed Change will not alter the total number of ordinary hours rostered (or worked) by Affected Employees.

7. As a result of the Proposed Change, Affected Employees will be rostered to work one of the following shifts:

(a) 7:00am to 3:00pm (7:00am shift); and
(b) 8:54am to 5:00pm (8:54am shift).

8. It is not proposed that the Affected Employees will be rotated through the two start times. As a consequence, the Proposed Change will only change the start and finishing times of some of the Affected Employees.

9. On 4 May 2016, the AMWU in a meeting with Coates Hire asserted that Coates Hire could not implement the proposed change unless it had majority agreement from the Affected Employees.

10. On 4 August 2016, a meeting was held between Coates Hire and the AMWU where the dispute remained unresolved.

11. On 30 August 2016, Coates Hire notified a dispute pursuant to section 739 of the Act. On 9 September 2016, the dispute was listed for conference before Commissioner Hunt.

12. On 23 September 2016, Coates Hire issued a further letter to the Affected Employees.

13. On 12 October 2016, a meeting was held between Coates Hire and the AMWU to discuss the outcome of the dispute conference.

14. The Affected Employees and the AMWU maintain that Coates Hire cannot change the commencement time of the Employees unless it is by majority agreement. The change in work times has not occurred.

15. The Coates Hire Operations Pty Limited National Agreement 2012 (the Agreement) incorporates the Manufacturing and Associated Industries and Occupations Award 2010 (the Award or the Manufacturing Award).

16. The Agreement was made prior to the insertion of section 205(1A) of the Act.

17. The Agreement at Clause 18 – Consultation does not contain a provision in respect of consultation obligations regarding changes to an employees’ regular roster or ordinary hours of work unless arising out of a major change as understood in clause 18.

18. Clause 9 – Consultation of the Award contains provisions in respect of consultation obligations regarding changes to an employees’ regular roster or ordinary hours of work.’

Relevant Award and Agreement clauses for consideration

[6] Coates Hire submitted that the Agreement is silent on the manner in which Coates Hire can direct an employee’s hours of work. However, because the Agreement incorporates the Award, it is necessary to review relevant provisions of the Award.

[7] Clause 36.2 of the Award is as follows:

‘36.2 Ordinary hours of work—day workers

(a) Subject to clause 36.5, the ordinary hours of work for day workers are an average of 38 per week but not exceeding 152 hours in 28 days.

(b) The ordinary hours of work may be worked on any day or all of the days of the week, Monday to Friday. The days on which ordinary hours are worked may include Saturday and Sunday subject to agreement between the employer and the majority of employees concerned. Agreement in this respect may also be reached between the employer and an individual employee.

(c) The ordinary hours of work are to be worked continuously, except for meal breaks, at the discretion of the employer between 6.00 am and 6.00 pm. The spread of hours (6.00 am to 6.00 pm) may be altered by up to one hour at either end of the spread, by agreement between an employer and the majority of employees concerned or, in appropriate circumstances, between the employer and an individual employee.’ (emphasis added)

[8] Coates Hire asserted that the Agreement, on account of the relevant incorporated Award terms, contains an explicit right for Coates Hire to exercise “discretion” as to when hours are worked, that is the commencement and finishing times of work.

[9] Clause 9.2 of the Award requires an employer to consult with employees and their representatives when an employer proposes to change an employee’s regular roster or ordinary hours of work. Coates Hire contended that given it had been consulting with employees and their representatives since April 2016, and the proposed changes had not been implemented by February 2017, it had indeed been properly engaged in consultation.

[10] Coates Hire submitted that the matter for determination by the Commission is narrow. It submitted the Commission should determine the following two questions:

Question A: Can Coates Hire under the terms of the Agreement, exercise a unilateral right to direct the Affected Employees to work their rostered ordinary hours at times which are different to their current ordinary hours?; and

Question B: If the answer to the Question A is “No”, under what circumstances under the terms of the Agreement can Coates Hire seek Affected Employees work their rostered ordinary hours at times which are different to their Current Ordinary Hours?

[11] The AMWU submitted that clause 36.2 of the Award simply grants an employer the discretion to fix the daily quantum of hours and not the starting and finishing times of ordinary hours to be worked by relevant employees.

[12] It is the AMWU’s contention that clause 36.5 of the Award, and not clause 36.2(c) provides the mechanism for arranging the ordinary hours of work. Clause 36.5 of the Award is as follows:

‘36.5 Methods of arranging ordinary working hours

(a) Subject to the employer’s right to fix the daily hours of work for day workers from time to time within the spread of hours referred to in clause 36.2(c) and the employer’s right to fix the commencing and finishing time of shifts from time to time, the arrangement of ordinary working hours must be by agreement between the employer and the majority of employees in the enterprise or part of the enterprise concerned. This does not preclude the employer reaching agreement with individual employees about how their working hours are to be arranged.

(b) The matters on which agreement may be reached include:

(i) how the hours are to be averaged within a work cycle established in accordance with clauses 36.2, 36.3 and 36.4;
(ii) the duration of the work cycle for day workers provided that such duration does not exceed three months;
(iii) rosters which specify the starting and finishing times of working hours;
(iv) a period of notice of a rostered day off which is less than four weeks;
(v) substitution of rostered days off;
(vi) accumulation of rostered days off;
(vii) arrangements which allow for flexibility in relation to the taking of rostered days off; and
(viii) any arrangements of ordinary hours which exceed eight hours in any day.’

[13] It is the AMWU’s contention that the work that clause 36.5 of the Award does is:

(a) It permits Coates Hire to fix the ordinary hours of work for day workers and the start and finish times for shift workers; then

(b) Requires Coates Hire to seek agreement as to how those ordinary hours are arranged at the workplace level (including start and finish times).

[14] The AMWU submitted that this is demonstrative by the fact that 36.5(b)(iii) includes ‘rosters which specify the starting and finishing times of working hours’, requiring an employer and the majority of employees to reach agreement.

Facilitative provisions

[15] Coates Hire submitted that clause 36.5 of the Award is a ‘facilitative provision’ within the Award. The importance of this argument is that Coates Hire submitted that ‘facilitative provisions’ within the Award have been extinguished by the following clause within the Agreement:

‘36.9 The facilitative provisions and the flexibility term in the Award are not incorporated into this agreement, despite any term of this Agreement to the contrary.’

[16] It is Coates Hire contention that the Award is patently clear on what is a facilitative provision under the Award. This is demonstrated by the heading of clause 8 of the Award, Facilitative Provisions. Clause 8.1 is as follows:

‘8.1 Agreement to vary award provisions

(a) This award also contains facilitative provisions which allow agreement between an employer and employees on how specific award provisions are to apply at the workplace or section or sections of it. The facilitative provisions are identified in clauses 8.2, 8.3 and 8.4.
(b) The specific award provisions establish both the standard award condition and the framework within which agreement can be reached as to how the particular provisions should be applied in practice. Facilitative provisions are not to be used as a device to avoid award obligations nor should they result in unfairness to an employee or employees covered by this award.’

[17] The pertinent clause, that being clause 36.5(a) is tabled in clause 8.3 and is titled, ‘Facilitation by majority or individual agreement’.

[18] Accordingly, Coates Hire submitted that because 36.5(a) is a facilitative provision, and clause 36.9 of the Agreement does not incorporate such a term into the Agreement, clause 36.5(a) of the Award does not apply at all to Coates Hire employees under the Agreement. The effect of that argument is that if Coates Hire is correct, all facilitative provisions contained in clause 8 of the Award do not apply while the Agreement operates.

[19] Not surprisingly, the AWMU contend that clause 36.9 of the Agreement should not be read to exclude clause 36.5(a) as a facilitative provision. The AMWU contend that to do so would result in an ‘absurdity’.

[20] It is the AMWU’s submission that because clause 36 of the Agreement is titled ‘Individual Flexibility Term’, and the only matters that can be agreed by Coates Hire and individual employees is the payment of a tea break, or additionally, specialized project work, it could not have meant that the parties agreed to extinguish all facilitative provisions within the Award. No evidence was given by either party with respect to this submission.

[21] The AMWU’s contention is the Commission should answer Question A in [10] in the negative for the following reasons:

(a) Clause 36.5 of the Award requires agreement between the employer and the majority of employees in the enterprise or part of the enterprise concerned be reached about the arrangement of working hours;

(b) The change in hours of work proposed by Coates Hire is a change to the existing arrangement of ordinary working hours in the relevant part of the Enterprise; and

(c) Clause 36.5 of the Award is incorporated into the Agreement.

Award and Agreement Interpretation

[22] Coates Hire submitted there are a number of well-established principles governing enterprise agreement interpretation. These principles are often taken from the principles used to interpret other instruments, including industrial awards and contracts. These well-established principles were recently confirmed by a Full Bench of the Commission in Australasian Meat Industry Employees Union v Golden Cockerel Pty Ltd 1 (Golden Cockrell).

[23] Coates Hire contended that this principle is relevant to Question A, as clause 36.2(c) of the Award is incorporated into the Agreement plainly and with no ambiguity. It is submitted that because the Agreement is silent on how the ordinary hours of work may be altered, it is clear that the parties intended that reference be had to clause 36.2(c) in the Award.

[24] Coates Hire contended that clause 36.2(c) confers an explicit right on the employer to exercise its discretion as to the starting and finishing times of ordinary hours when they are to be worked within the span of 6:00am to 6:00pm.

[25] As was noted by the High Court of Australia in Coal & Allied Operations Pty Limited v. The Full Bench of the Australian Industrial Relations Commission & Ors 2the term “discretion” can be a broad or narrow term. In the case of the relevant incorporated Award term, Coates Hire submitted that there is no indication that there are any fetters on the manner in which Coates Hire may exercise its discretion. As such, the discretion conferred by clause 36.2(c) is broad and the employer has latitude as to when the ordinary hours of work are worked, provided they are within the span of 6:00am to 6:00pm. The second sentence in 36.2(c) is a facilitative provision and, as a result of clause 36.9 of the Agreement, has no application to the Affected Employees.

[26] The effect of the second sentence in 36.2(c) being a facilitative provision would render both Coates Hire and employees unable to alter the spread of hours by up to an hour at either side.

[27] Coates Hire submitted that clause 36.2(c) does not require individual or majority agreement to change the ordinary hours of work within the span of ordinary hours, nor does the clause state that once an employee’s ordinary hours of work are set they can never be changed during the course of the employment relationship.

[28] Coates Hire submitted the above interpretation of the Award is supported by a decision of the Commission in AMWU v Custom Coaches Pty Ltd 3 (Custom Coaches). The decision considered whether an employer could alter the start and finish times within the spread of ordinary hours for day workers at a particular enterprise pursuant to a provision said by Coates Hire to be identical to clause 36.2(c) of the Award. O’Callaghan SDP held at [22]:

‘The change proposed by Custom Coaches is within the spread of hours specified in clause 53.1(c) of the Award. It is only when a change proposed required employees to work ordinary hours outside the authorised spread of hours, or where those hours exceed 10 on any day, that the need for majority agreement is required.’

[29] In the Custom Coaches decision, the relevant award was the Vehicle Manufacturing, Repair, Services and Retail Award 2010 (the Vehicle Award). It is Coates Hire contention that clause 53.1(c) of the Vehicle Award is identical to clause 36.2(c) of the Manufacturing Award. I am satisfied it is largely identical and there are no material differences between the two clauses.

[30] Coates Hire submitted there is no evidence before the Commission that the Current Rostered Hours are an employment condition or entitlement through custom and usage. Nevertheless, it is clear that the parties intended for the incorporated Award provisions to apply in circumstances where the Agreement is silent and therefore an express term of the Agreement is to deal with when the ordinary hours of work are to be worked. It is on this basis that Coates Hire asserts that the Current Rostered Hours are not incorporated into the employment contract via custom and usage.

[31] Where the AMWU contend that clause 36.5(a) of the Award overrides the discretion conferred on the employer in 36.2(c), Coates Hire contended that such argument is misguided and not the correct interpretation of the interaction between clause 36.2 (c) and clause 36.5(a).

[32] Coates Hire submitted any arguments advanced by the AMWU that clause 36.5(a) of the Award overrides Coates Hire’s explicit right in clause 36.2(c) must be rejected because clause 36.5(a) is not incorporated into the Agreement by virtue of clause 36.9 of the Agreement.

[33] Coates Hire contended clause 36.9 of the Agreement is an unambiguous and unequivocal statement that no facilitative term of the Award is incorporated into the Agreement.

[34] The AMWU submitted Golden Cockerel is authority that, inter alia:

(a) evidence of surrounding circumstances may be used as an aid to identifying whether an agreement provision has a plain meaning or contains an ambiguity;
(b) evidence of surrounding circumstances is admissible only where an ambiguity exists; and
(c) the context of surrounding circumstances includes the text of the agreement, and the legislative framework in which it is made.

[35] The AMWU submitted that the Agreement practically operates as follows:

(a) Clause 30 of the Agreement fixes the ordinary hours of work at a daily cap of 8 (otherwise, the Award is silent on a daily minimum);

(b) Clause 36 of the Award deals generally with the quantum and span of hours; whilst

(c) Clause 36.2 of the Award grants the employer the discretion to fix the daily quantum of hours; and

(d) Clause 36.5 of the Agreement provides the mechanism for arranging the ordinary hours of work, once fixed (in this instance that is achieved by Clause 30 of the Agreement).

[36] In conclusion, the AMWU submitted clause 36.5 is a fetter on both clause 36.2 and on managerial prerogative. The AMWU consider the intent of clause 36.5 is clear – it provides the majority mechanism for the hours of work which are fixed by the employer are arranged. Therefore, the Proposed Changes cannot proceed without agreement of the majority of employees.

Consideration

[37] In determining Question A, it is first necessary to determine whether the Agreement has a plain meaning. The Full Bench in Golden Cockerel stated, among other things:

‘In construing an enterprise agreement it is first necessary to determine whether an agreement has a plain meaning or contains an ambiguity.’ 4

[38] It is not contested that the Award is the applicable instrument which covers the work of the Affected Employees. Having regard to clauses 6.1 and 6.1.1 of the Agreement, it is plain that the Agreement incorporates certain terms of the Award, and to the extent of any inconsistency, the Agreement takes precedence. 5

[39] The Agreement at clause 30 – Hours of operation, sets out inter alia the number of ordinary hours of work to be worked by employees and the number of ordinary hours they work each day. Clause 30 of the Agreement does not deal directly with the issue at hand, and the Agreement is otherwise silent on whether employees may be directed to work ordinary hours in accordance with the Proposed Change. In accordance with clause 6.1 of the Agreement, reference must therefore be made to the relevant provisions of the Award, primarily being clauses 36.2(c) and 36.5(a).

[40] Coates Hire accepts that part of clause 36.2(c) is incorporated into the Agreement, but rejects the incorporation of clause 36.5(a)

[41] The AMWU’s submission is that in context, clause 36.9 of the Agreement has only a narrow application to individual arrangements and not arrangements requiring a majority agreement of employees. This submission is not surprising given the placement of clause 36.9, which is the last of a number of clauses dealing with individual flexibility arrangements under the heading of clause 36 – Individual Flexibility Term. Despite the peculiar placement of clause 36.9, the AMWU’s submission must be rejected for the following reasons.

[42] Clause 36.9 is plain, unambiguous and not susceptible to more than one meaning. The words used clearly state an intention to exclude the facilitative provision and the flexibility term of the Award from the Agreement “despite any term of this Agreement to the contrary”. (emphasis added)

[43] There is no language contained in clause 36.9 which would suggest that the clause is limited in its operation to matters pertaining to those arising under clause 36 generally, or only to arrangements to be made between individuals. It is clear clause 36.9 operates to exclude the facilitative provisions and the individual flexibility term from being incorporated from any term of the Agreement.

[44] I reject the AMWU’s submission that the above construction would lead to an absurd result. It is clear this decision may lead to broader implications than the subject of this matter, however it does not follow that such an outcome is absurd, or even impractical.

[45] In fact, the extinguishing of all facilitative provisions of the Award is likely to be demonstrative of a strong bargaining position won by the AMWU and other unions during bargaining for the agreement. Removing an employer’s capacity to reach individual or even majority agreements with employees, in most circumstances limits the flexibility of an employer within a workplace.

[46] Whilst no evidence was led by either party as to why clause 36.9 is within the Agreement, or why it is placed among other terms of clause 36, it is likely to be considered a victory for employees to curtail what an employer might attempt to discuss with employees or groups of employees to obtain flexibilities outside of current terms and conditions.

[47] In accordance with the authority in Golden Cockerel, as clause 36.9 has a plain meaning, it is not appropriate to take into consideration evidence of the surrounding circumstances. In my view, while clause 36.9 has a peculiar placement in the Agreement, such a factor alone does not detract from the plain meaning of the words nor create ambiguity.

[48] As submitted by Coates Hire, clause 36.5(a) of the Award is a facilitative provision pursuant to clause 8.3 of the Award it is therefore not incorporated into the Agreement. Accordingly, I agree that clause 36.5(a) has no application to the exercise of Coates Hire’s managerial prerogative.

[49] It follows that the answer to Question A is Yes.

[50] The answer to Question A being yes, it is therefore not necessary for the Commission to further consider Question B, as it was only required to be determined if Question A was answered in the negative.

[51] As a matter of clarity, however, if I had been satisfied clause 36.9 of the Agreement did not render impotent clause 36.5(a) of the Award, I would have determined that it is clear and unambiguous that clause 36.5(a) is submissive to clause 36.2(c). From the opening of clause 36.5(a), it sets out exactly the rights an employer has pursuant to clause 36.2(c). With respect to day workers, it details the right of an employer in clause 36.2(c) – that is, to fix the daily hours of work from time to time within the hours of 6.00am to 6.00pm.

[52] I do not agree with the AMWU’s contention that 36.2(c) is limited to the quantum of hours. I have had regard for the decision in Custom Coaches and I respectfully agree with O’Callaghan SDP that the identical wording in the Vehicle Award provides an employer with a right to set and change at its discretion (following consultation) the starting and finishing time of day workers.

[53] While the words ‘to fix the commencing and finishing time of shifts from time to time’ is in place with respect to shift workers, I consider there to be more clarity for shift workers due to the imprecise nature of when the hours could be worked. The beginning of the sentence in clause 36.5(a) is not as precise in referencing ‘commencing and finishing time’ for day workers as it does for shift workers. I consider this to be the case due to the fact that there is a definite span of ordinary hours for day workers, that being 6.00am – 6.00pm where the ordinary hours can be worked without the payment of penalties.

[54] The term ‘from time to time’ is clear that the award contemplates hours of work being worked in one way at one point in time, but being changed at another point in time. The prospect of change is contemplated, allowing for irregular or infrequent changes to the starting and finishing times of workers.

[55] I have had regard for the AMWU’s submission that clause 36.5(b)(iii) allows an employer to reach agreement with a majority of employees or individual employees as to ‘rosters which specify the starting and finishing times of working hours’. It is not clear what the work of this subclause is to do, when earlier within clause 36.5, it provides for an employer to, at its discretion, fix the hours of day and shift workers from time to time.

[56] It may be that the phrase ‘rosters which specify the starting and finishing times of working hours’ could be with respect to the publishing or issuing of rosters when other changes within clause 36.5(b) have been agreed between an employer and employee(s).

[57] Having held at [50] that it is not necessary to determine this dispute with regard to clause 36.5(a), there is no utility in examining this issue any further at this time.

Conclusion

[58] The Agreement, by incorporation of the Award, enables Coates Hire to specify changes to starting and finishing times within the spread of hours of 6.00am – 6.00pm. The change proposed is within that spread of hours. Agreement with a majority of the employees affected by the change is not required.

[59] I am satisfied that Coates Hire has undertaken relevant consultation with the affected employees and their representatives. During the hearing, Coates Hire undertook to provide a minimum of two weeks’ notice to affected employees if the decision of the Commission supported their proposition to alter the starting and finishing times of affected employees.

[60] Subject to the undertaking given by Coates Hire, and noting that it is entirely a matter for its own consideration, it is recommended by the Commission that the changes to Affected Employees not occur until Tuesday, 17 April 2017. Submissions were made during the earlier conference that some of the Affected Employees have school-age children, and it is noted there are less than three weeks of school left in Term 1, and then a two week holiday period, together with Easter. If family arrangements are required to be altered on account of some employees finishing work approximately two hours later than they have been accustomed to, this understandably may have some impact on arrangements with school pick-up obligations and endeavours to put younger children into after-school care, where it is available.

COMMISSIONER

1 [2014] FWCFB 7447.

2 203 CLR 194 at [19].

3 [2014] FWC 3255.

4 Golden Cockerel at [41].

5 See clause 6.8 of the Agreement.

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