Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Ben Lomond Water

[2012] FWA 9263

[2012] FWA 9263

FAIR WORK AUSTRALIA

DECISION

Fair Work Act 2009
s.739—Dispute resolution

Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia
v
Ben Lomond Water
(C2012/3851)

Water, sewerage and drainage services
DEPUTY PRESIDENT HAMILTON	MELBOURNE, 9 NOVEMBER 2012

Dispute regarding classification and wages

Introduction

[1] On 18 May 2012, the CEPU lodged an application for Fair Work Australia to deal with a dispute in accordance with a dispute settlement procedure. The matter was said to concern the correct wages payable to Mr.Joe Lionetti pursuant to the Ben Lomond Water Enterprise Agreement 2011 (‘the agreement’). I was advised that conciliation would not achieve a resolution, and the matter was set down for arbitration pursuant to s.739 of the Fair Work Act 2009 (‘the Act’), and the dispute settlement procedure in clause 12 of the agreement.

[2] Written submissions were filed, and the following witnesses gave evidence:

Mr Rodney Burles

Mr Joe Lionetti

Mr Ian McFawn

Mr Glen Rowlands

Mr Greg Boon

Mr Brian Etchell

[3] I have had regard to the submissions and witness evidence.

[4] I note that no issue was taken that the steps in the disputes procedure had been followed to enable arbitration to take place.

[5] Ben Lomond stressed at all times that Mr.Lionetti was a valued and skilled employee. I have seen no evidence in this case to the contrary.

Submissions

[6] The CEPU on behalf of Mr.Lionetti submitted that the dispute concerns the proper interpretation of clause 24.4 of the agreement, which provides:

24.4 Transition

24.4.1 With the exception of trainees, transferring employee’s engaged prior

to 1 July, 2009 whose current ordinary time annual remuneration package

(OTARP) is less the midpoint will have his/her OTARP increased to the mid

point in two equal steps:

(a) The first being effective from 3 January 2011.

(b) The second step from 1 July 2011

24.4.2 Employees engaged after 1 July 2009 or appointed to a new role since

1 July 2009 by the Employer will be assessed using the Performance and

Remuneration Review process described in this Agreement including those

referred to in:

• Clauses 24.2 and 24.3 (inclusive);



• Determination Table (Schedule A);



• (Schedule B) and an OTARP will be determined.

24.4.3 Where an employee can demonstrate that, prior to the commencement

of the agreement, he/she was in receipt of a performance based “over award”

payment, he/she may apply for a performance and remuneration review. If the

employee is assessed above the midpoint (100%), he/she will be paid the

appropriate increase, effective from 1 July 2011.

24.4.4 Where an employee believes that his/her level of performance would be

described as “Superior” (as described in Schedule A), he/she may apply for a

performance and remuneration review.

If the employee is assessed at or over 105%, he/she will be paid at that

percentage point increase, effective from 1 July 2011. If he/she is assessed

below 105% his/her OTARP will remain unchanged.

24.4.5 Subject to the exceptions detailed in clauses 24.3, 24.4.3 and 24.4.4,

where an Employee’s OTARP is higher than the midpoint of the

Classification/Banding he/she is allocated to;

• There will be no reduction to the Employees OTARP in remuneration terms,



• Any increase which results from a Performance and Remuneration review will take effect from 1 July 2012.

24.4.6 Employees employed under a common law contract immediately prior

to the commencement of this Agreement will not have his/her OTARP reduced

during the life of this Agreement.

24.4.7 Employees who are currently paid under an Individual Flexibility

Arrangement or Special Arrangement Employment Agreement or any other

arrangement will revert to the terms and conditions detailed in this Agreement

unless a new Flexible Work Arrangement is agreed to between the Employee

and Employer.

[7] Mr.Lionetti applied to have a performance and remuneration review conducted in accordance with the agreement ‘on the basis that he was receiving over award payments prior to the commencement of the agreement and that the level of his performance could be described as ‘Superior’ or better’. The CEPU submitted that the appropriate increase under clause 24 should have been that Mr.Lionetti’s remuneration would be paid at 105.03 per cent within Band 3 on the basis that Mr.Lionetti was previously paid an over award payment that was 5.03 per cent above the award 1. The CEPU also submits that the agreement transitional provisions in clause 24.4.4 were not properly applied to Mr.Lionetti, in that he should have been assessed at or over 105 per cent within Band 32. The CEPU seeks a determination that Mr.Lionetti should have been remunerated at a level equivalent to 105.03 per centage point in Band 3 of the agreement consistent with his previous over award.

[8] Ben Lomond submits that Mr.Lionetti’s skills and experience had been objectively and accurately assessed, and that the assessment in the performance review of 102.3 per cent was reasonable and disclosed no error. In particular Mr.Lionetti only received 105 per cent in 4 out of the 18 criteria being assessed. In relation to over award payments, Mr.Lionetti only received 2.528 per cent of the total amount of salary received and not 5 per cent. It submitted that there was no justification for including an In Charge Allowance previously paid to Mr.Lionetti under a prior industrial instrument as part of a performance payment, or as an ‘over award’ payment. The In Charge Allowance was approximately 2.2 per cent of Mr.Lionetti’s wage and was absorbed into the overall remuneration, and was not taken away or deducted 3.

Decision

[9] Sections 738-739 of the Act provide:

738 Application of this Division

This Division applies if:

(a) a modern award includes a term that provides a procedure for dealing with disputes, including a term in accordance with section 146; or

(b) an enterprise agreement includes a term that provides a procedure for dealing with disputes, including a term referred to in subsection 186(6); or

(c) a contract of employment or other written agreement includes a term that provides a procedure for dealing with disputes between the employer and the employee, to the extent that the dispute is about any matters in relation to the National Employment Standards or a safety net contractual entitlement; or

(d) a determination under the Public Service Act 1999 includes a term that provides a procedure for dealing with disputes arising under the determination or in relation to the National Employment Standards.

739 Disputes dealt with by FWA

(1) This section applies if a term referred to in section 738 requires or allows FWA to deal with a dispute.

(2) FWA must not deal with a dispute to the extent that the dispute is about whether an employer had reasonable business grounds under subsection 65(5) or 76(4), unless:

(a) the parties have agreed in a contract of employment, enterprise agreement or other written agreement to FWA dealing with the matter; or

(b) a determination under the Public Service Act 1999 authorises FWA to deal with the matter.

Note: This does not prevent FWA from dealing with a dispute relating to a term of an enterprise agreement that has the same (or substantially the same) effectas subsection 65(5) or 76(4) (see also subsection 55(5)).

(3) In dealing with a dispute, FWA must not exercise any powers limited by the term.

(4) If, in accordance with the term, the parties have agreed that FWA may arbitrate (however described) the dispute, FWA may do so.

Note: FWA may also deal with a dispute by mediation or conciliation, or by making a recommendation or expressing an opinion (see subsection 595(2)).

(5) Despite subsection (4), FWA must not make a decision that is inconsistent with this Act, or a fair work instrument that applies to the parties.

(6) FWA may deal with a dispute only on application by a party to the dispute.

[10] In this case the agreement contains a procedure for dealing with disputes within s.738(b). I am required pursuant to s.739(3) to comply with the terms of the procedure, and s.739(4) in conjunction with the disputes procedure provide that the tribunal may arbitrate certain disputes.

[11] The approach to be taken in the construction of agreements is usefully discussed in Watson v. ACT Department of Disability Housing and Community Services 4. It is not necessary that I repeat the discussion here.

[12] It is a matter of agreement between the parties 5 that I follow the approach taken in Pulle6to assessing the discretion applied by Ben Lomond in relation to issues of performance and remuneration, which are the principles in AFULE v. State Rail Authority of NSW (the XPT Case) 7.

[13] Firstly, I am not satisfied that there are sufficient evidentiary grounds to overturn the assessment made by the employer of Mr.Lionetti. The assessment was made pursuant to a formal document entitled ‘Performance Indicators’ 8, which set out a range of tests relating to specialist knowledge and skills, water and sewer process awareness, asset condition and performance, and other matters. Under that document an employee is assessed as a percentage ranging from 90 to 110 per cent according to stated definitions for each percentage level.

[14] A number of challenges were made to the assessment. These include that:

• the criteria did not sufficiently reconcile with the Band 3 Descriptors set out in Schedule B to the agreement;



• the criteria did not sufficiently reflect factors such as experience;



• whether or not Mr.Lionetti was a leader of the group of employees he works with;



• whether or not Mr.Lionetti worked only or mainly in water reticulation, and the significance of this.

[15] In relation to experience, this is inherent in many or most of the criteria used in the Performance Indicators document, including for example ‘organisational knowledge’, which requires a person to have ‘experience/knowledge relevant to operations to allow for effective functioning within BLW’ to qualify at the rate of 100 per cent. Similar comments can be made of other definitions. In relation to Band 3 Descriptors, they are general in nature and I am satisfied that the Performance Indicators document is an appropriate means of assessing achievement of the Band 3 Descriptors. The general criteria in the Band 3 Descriptors are authority and accountability, judgement and problem solving, specialist knowledge and skills, management skills, interpersonal skills, qualifications and experience, and service delivery employees. Each of these general criteria are addressed in their practical application to Ben Lomond Water through the criteria in the Performance Indicators document. For example, specialist knowledge and skills is specifically referred to in both documents, and the definitions in the Performance Indicators document is a useful explication of the definition in the Band 3 Descriptors. Judgement and problem solving in Band 3 is represented by a specific set of tests in the Performance Indicators document under the same heading, management skills is again specifically referred to and the tests for it spelt out, and qualifications and experience is properly tested. The contents of the Band 3 Descriptors are fairly represented in the Performance Indicators tests.

[16] In relation to the leadership of Mr.Lionetti I accept the evidence of Mr.Brian Etchell, Coordinator, who is Mr.Lionetti’s immediate supervisor, that Mr.Lionetti is not the leader of the group of employees he works with 9. I prefer that and similar evidence from other employer witnesses to that of Mr.Lionetti and others.

[17] In relation to the issue of Mr.Lionetti’s work being mainly in water reticulation, I again accept the evidence of Mr.Etchell on this point. In my view Mr.Lionetti’s work has been properly evaluated. His work being mainly in water reticulation has significance in terms of the assessment of his breadth of skills in the Performance Indicators document. On the other hand he was not disadvantaged in the assessment made of Water and Sewer Process Awareness in the Performance Indicators document, where the employer marked this ‘NA’. It did not count against him on that point, in other words. This is a fair and reasonable approach to take.

[18] In relation to the second overall issue, the remuneration of Mr.Lionetti, I accept the evidence of Mr.Boon 10 that Mr.Lionetti did not receive an over award payment of 5.03 per cent. I prefer this evidence to that of Mr.Lionetti11. The evidence of the employers is consistent with the letter from Launceston City Council setting out Mr.Lionetti’s entitlements of a total of $46,63812, which was adopted and its components then summarised in Attachment M13.

Conclusion

[19] I am not satisfied that there are grounds for setting aside the decisions of the employer in relation to the remuneration of Mr.Lionetti under the agreement. The application is dismissed. An order is contained in PR531153.

DEPUTY PRESIDENT

Appearances:

Mr M Wright of the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia

Mr D Dilger for the respondent

Hearing details:

Melbourne and Hobart

2012

29 October

 1   Exhibit CEPU 1, paragraph 14

 2   Exhibit CEPU 1, paragraph 16

 3   Exhibit B5, paragraphs8-19

 4 (2008) 171 IR 392 at 8-15

 5   CEPU, PN683

 6   [2011] FWA 7462, Lawler VP

 7 (1984) 295 CAR 188. See also Re Cram(1987) 163 CLR 117 at 136-137, and Pulle [2011] FWA 7462 per Lawler VP.

 8   Attachment P, entered into evidence by agreement.

 9   Exhibit B4, paragraph 8

 10   Exhibit B1, paragraphs 38 and 17

 11   Exhibit CEPU3, paragraph 24

 12   Attachment N

 13   Mr.Burles, CEPU Witness, PN121; Submissions of Ben Lomond PN704-708

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