Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Downer EDI Rail Pty Ltd
[2024] FWC 3040
•6 NOVEMBER 2024
| [2024] FWC 3040 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.739—Dispute resolution
Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia
v
Downer EDI Rail Pty Ltd
(C2024/3618)
| COMMISSIONER TRAN | MELBOURNE, 6 NOVEMBER 2024 |
Alleged dispute about any matters arising under the enterprise agreement and the NES;[s186(6)]
On 5 June 2024, the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (ETU or Union) applied for the Fair Work Commission to deal with a dispute under s 739 and in accordance with clause 35 of the Downer EDI Rail HCMT T&C Enterprise Agreement 2022.
The respondent is Downer EDI Rail Pty Ltd.
The dispute is about whether employees were entitled to receive an extended period of notice under a particular clause of the Agreement.
The Agreement
The Agreement is the Downer EDI Rail HCMT T&C Enterprise Agreement 2022.[1] It was approved on 12 May 2022 and began to operate on 19 May 2022. Its nominal expiry date is 12 May 2025.
The clauses of the Agreement that are relevant to this dispute are:
· Clause 35.2 – Dispute Resolution Procedure
· Clause 36 – Closure of Workshop
It is not necessary to provide the wording of Clause 35.2, as there is no dispute between the parties about its interpretation.
Clause 36 says:
36. CLOSURE OF WORKSHOP
36.1 Should the Company be no longer required to provide labour to perform testing and commissioning activities to the HCMT project, the Company shall give at least three (3) months’ notice of this to Employees.
36.2 Employees will be considered for suitable redeployment opportunities in other work locations of the Company.
Jurisdiction
Section 595 of the Act provides for the Commission’s power to deal with disputes only if it is expressly authorised to do so or in accordance with another provision of the Act. Section 739 provides for the Commission’s power to deal with a dispute where an enterprise agreement includes a term that provides a procedure for dealing with disputes under section 738(b).
The Agreement contains a dispute resolution and settlement procedure in Clause 35.2. Clause 35.2.4 of the Agreement gives the Commission power to arbitrate the dispute and in doing so, use the powers available to it under the Act.
It is not in dispute between the parties, and I am satisfied, based on the evidence of Mr Simon Phillips, General Manager Operations Victoria – Rail and Transit Systems, that the Commission does have jurisdiction to deal with this dispute, including by arbitration, in accordance with s 739 and the Dispute Resolution Procedure at clause 35.2.
This proceeding
I conducted a conference in this matter on 21 June 2024 but was unable to assist the parties to resolve the dispute.
I issued directions; materials, including submissions, witness statements, relevant documents and case authorities, were filed in compliance with those directions.
The Union relied on the unchallenged witness evidence of Mr Peter Mooney, Organiser and Mr Glen Parker, Electrical Technician.
Downer relied on the unchallenged witness evidence of Mr Simon Phillips, General Manager Operations Victoria – Rail and Transit Systems.
The parties agreed that the dispute would be resolved by answering the following questions:
Does no longer required to provide labour in clause 36.1 mean
a.all labour; or
b.does it also include a partial reduction in labour?
If the answer to question 1 is that no longer required to provide labour includes a partial reduction,
Where an employee is made redundant, due to the cessation of testing and commissioning duties for the HCMT project and without having been given the notice period contemplated in clause 36.1 (in part or in full) are they entitled to be paid for the shortfall of the notice?
The parties agreed for the matter to be dealt with on the papers.
Background Facts
The facts were not contested.
Downer was contracted to build High Capacity Metro Trains (HCMT) for the Victorian Government. The HCMT project began in June 2018 with an initial order for 65 trains. The number of trains was increased to 70 in October 2021.
Downer expected that the volume of work would fluctuate throughout the project and that it would need to provide labour for the HCMT project until mid 2025.
On 20 May 2024, Downer informed employees that its testing and commissioning contract was coming to an end with the delivery of the last train, Train Set 70. This was done during a site briefing, followed by a written Memorandum. The Memorandum referred to the need to reduce the number of Testing and Commissioning technicians by 28 roles and the number of Team Leaders by 8 roles. The Memorandum referred to redeployment opportunities and its Employee Assistance Programme. It also stated that Downer would commence consultation.
Downer and employees met in a joint consultative committee twice weekly until the end of June to discuss headcount reduction. Part of the anticipated headcount reduction arose from the ending of fixed term contracts. Some employees volunteered for redundancy.
Employees were informed that Downer did not consider that clause 36 of the Agreement applied.
On 12 July 2024, Downer again informed employees that ‘testing and commissioning activities at Pakenham are winding down’. It referred to the need for further reduction in labour ‘in a staggered manner in the September 2024 to December 2024 period.’ It again referred to formal consultation.
Principles of Interpretation
The principles of interpretation of enterprise agreements are well settled.
Recently in HSU v Mercy Hospitals Victoria Ltd,[2] the Full Bench reiterated a distillation of the principles from an earlier Full Court of the Federal Court[3] in James Cook University v Ridd.[4] The principles have also been comprehensively set out by the Full Bench in AMWU v Berri[5] and by the Full Court of the Federal Court in Workpac Pty Ltd v Skene.[6]
There is no controversy about the principles that apply to the construction of enterprise agreements, and I do not repeat them here.
The starting point for interpretation is the ordinary meaning of the words, read as a whole and in context. Account should also be taken of the purpose of the provisions.[7] Relevantly, a narrow or pedantic approach to interpretation should be avoided.
Is there an ordinary meaning of the words, read as a whole and in context?
It is clear that the provision is dealing with what happens when employees are no longer required to perform the work covered by the Agreement.
Clause 36 starts with the word ‘should’, which in this context provides the conditions for the obligations contained in that clause. The obligations are that the Company shall give at least 3 months’ notice and that employees will be considered for suitable redeployment opportunities in other work locations. The condition that triggers the obligations is “the Company no longer required to provide labour to perform testing and commission activities to the HCMT project”.
The disagreement between the parties is whether the condition means that the Company is no longer required to provide some or all labour. Downer’s position is that read as a whole, together with the heading, the words must mean all work; whereas the Union’s position is that it means some or all. Downer relies on the heading, the distinction between labour and employees, and the ordinary meaning of ‘no longer required.’ The Union relies on taking a broad and purposive approach to interpreting the clause.
I consider that the Union’s interpretation is correct. There is nothing in the words of the clause that suggests that it only operates when the entire operation is at an end. Downer’s interpretation is narrow and does not take sufficient account of the industrial context and purpose of the provision.[8]
Does the context of the words include the heading?
In Downer’s position, workshop in the heading must mean bringing to an end or shutting down of the ‘workshop’. I infer from Downer’s submissions that they interpret ‘workshop’ to mean the entire enterprise. ETU’s position is that the heading is a carry-over from this clause being incorporated from an earlier, related (but not antecedent) agreement and that workshop has no relevant meaning in the context of this Agreement.
I consider that the heading is not of great assistance in interpreting the provision. While the Acts Interpretation Act 1901 (Cth) does not apply to the interpretation of enterprise agreements,[9] principles of statutory interpretation have persuasive force. Relevantly, common law principles of statutory interpretation provide that, while headings are not always reliable, they may be used in a similar way as extrinsic materials. That is headings can ‘point the way’ towards the purpose of the provision.[10] But the starting point is always, as with enterprise agreement interpretation, the text of the provision.
Relevance of the history of the clause
I can have regard to the history of the clauses[11] to aid interpretation where there is ambiguity or conflict. History may also be relevant where there may be an industrial meaning to words, or where words used in one clause may not mean the same as words used in another clause in the same agreement, in recognition of agreements being the result of negotiation.[12]
The history of this clause is that it was incorporated in its entirety from an earlier agreement between the parties relating to different work but where there was an expectation of similar circumstances, being that the work to which the agreement applied was of finite duration. Mr Mooney gave evidence that the clause was included in this Agreement and not changed during negotiation.
The history of the clause assists my interpretation in that the word ‘workshop’ may have had a meaning in relation to the earlier agreement but may not have much meaning in relation to this agreement. The phrase ‘closure of workshop’ in the heading is relevant in the context of the purpose of the clause.
What is the purpose of the clause?
The Union’s submissions and evidence is that the parties negotiating the Agreement knew that the work covered by the Agreement was for a finite period. In recognition of this, the clause was included to provide a greater benefit to employees. For example, employees, such as Mr Parker, considered that the promise contained in clause 36 was “a good provision.”
The coverage clause of the Agreement[13] refers to the finite work. It specifies employees engaged to perform testing and commission activities for the HCMT fleet who performed that work at the Pakenham East train maintenance facility. It is clear, too, from Clause 6 – Objectives of the Agreement that the work covered by the Agreement is supplied subject to a contract.[14]
Downer also gave evidence of the finite nature of the work covered by the Agreement. Mr Phillips on behalf of Downer gave evidence that the HCMT project began in June 2018 with the initial requirement to build 65 trains. This was later expanded by an order for a further 5 trains in August 2021.
I am satisfied the purpose of Clause 36, also evident from its words, was to provide a benefit to employees because it was expected that the work covered by the Agreement would not be ongoing.
What does labour mean?
The key difference between the parties is in relation to whether labour has a meaning different from employees. Downer submits that a requirement to provide labour is not the same as a requirement to provide employees and has no direct link to the number of employees.
I consider this an unnecessarily restrictive interpretation of the word labour. In the context of the clause and the agreement, labour necessarily includes the employees who would perform that labour.
What does no longer required mean?
Downer submits that the phrase no longer required to provide labour means all work ending. The Union contends that the phrase means that the need to no longer provide labour relates to the second part of the phrase being that there is no further commissioning or testing work on HCMT project, and that this could include where any number of employees are no longer required to perform work.
Read as a whole, the clause is about what happens when the work for which the Agreement arose – the provision of labour for a contract to commission and test trains – ends. But in an industrial context, the ending of a contract does not result in all work coming to a sudden standstill. There may be reduction in the need for labour or a need for different kinds of labour at different stages in the project and as a project reaches its end point. As a whole, the clause includes partial reduction in labour if that reduction is because the project is coming to an end.
Answer to Question 1
My answer to Question 1 is that the phrase – no longer required to provide labour – in clause 36.1 includes a partial reduction in labour as well as the complete end of the project and therefore necessarily means a reduction in the number of employees required, so long as the reduction is because the project is coming to an end.
What is the obligation to give notice of; ie what is this
Clause 36.1 also includes an obligation – the Company shall three (3) months’ give notice of this to Employees. The Union submits that this means giving employees an extended notice period of 3 months where any employee is no longer required to perform the commissioning and testing work. Downer submits that notice in this context has its dictionary definition of ‘information or intelligence’ about the circumstances described in the pre-condition, that is, the need to provide labour has come to an end. In support of this interpretation, Downer submits that the extended notice period would have been identified as a benefit when applying for approval of the Agreement but it was not.
Evidence of what employees were told during the agreement making process can be of assistance in interpreting agreements,[15] and is more persuasive than evidence of bargaining, because such evidence can demonstrate what was in common contemplation. Mr Mooney gave evidence that included the memorandum provided to employees explaining the agreement.
This memorandum included reference to clause 36. It described the provision as:
Closure of workshop — the agreement requires at least three months’ notice in the event that work is no longer required to be performed. The agreement also requires that suitable redeployment opportunities be considered for displaced employees.
It described the impact as
Currently no such entitlement exists and therefore the agreement provides a better entitlement.
It is clear from the above that ‘notice of this’ was seen as a beneficial entitlement. The word notice also has a well-known industrial meaning beyond its dictionary meaning. Notice is both a piece of information or intelligence (usually that employment is ending) and the period of time from when that piece of information or intelligence is provided. In legal contexts, it also serves as a warning.
In this context and given the purpose of the provision, the obligation is a requirement to give employees 3 months’ notice of their employment ending if the reason for that is because labour is no longer required for the commissioning and testing on the HCMT project, and this includes a reduction in labour.
Order for payment
The Union further seeks the following order:
that the Respondent must payment to all permanent employees, made redundant before this order is made, for the difference between 3 months’ notice and the notice they received before they were terminated.
This dispute arose in May 2024. Several employees’ employment had already ended when the dispute was first filed. More employees’ employment may have ended in the time I have taken to consider and write this decision. As a result, the parties did not have the benefit of the Commission’s interpretation and Downer may therefore not have complied with its obligations under clause 36.1 of the Agreement.
I am persuaded that the above order is appropriate to ensure compliance with the Agreement.
Answer to Question 2
My answer to Question 2 is yes - where an employee is made redundant due to the cessation of testing and commissioning duties for the HCMT project and without having been given the notice period contemplated in clause 36.1 (in part or in full) they are entitled to be paid for the shortfall in the notice.
Conclusion
I resolve the dispute by answering the questions as follows:
Does no longer required to provide labour in clause 36.1 mean
a.all labour; or
b.does it also include a partial reduction in labour
Answer: The phrase no longer required to provide labour in clause 36.1 includes a partial reduction in labour.
If the answer to question 1 is that no longer required to provide labour includes a partial reduction,
Where an employee is made redundant, due to the cessation of testing and commissioning duties for the HCMT project and without having been given the notice period contemplated in clause 36.1 (in part or in full) are they entitled to be paid for the shortfall of the notice.
Answer: Yes
Order and Recommendation
I order that the Downer EDI Rail Pty Ltd make a payment of an amount, which is the difference between 3 months payment in lieu of notice and the actual notice that was given, to employees covered by clause 2(i) of the Agreement whose employment ended after 20 May 2024 and before the date of this decision.
Further, on and after the date of this decision, I recommend that Downer EDI Rail Pty Ltd give 3 months’ notice to employees covered by clause 2(i) of the Agreement that their employment is to end if the employment ends because the company is no longer required to provide labour (including reduction in labour) to perform testing and commissioning activities to the HCMT project.
COMMISSIONER
Final written submissions
31 July 2024
[1] [2022] FWCA 1588; AG2022/1359; AE515947 PR741524
[2] HSU v Mercy Hospitals Victoria Ltd[2024] FWCFB 235 at [112].
[3] AMA v the Royal Women’s Hospital[2022] FWCFB 7 at [29].
[4] James Cook University v Ridd [2020] FCAFC 123; (2020) 298 IR 50 at [65].
[5] AMWU v Berri Limited [2017] FWCFB 3005 at [114].
[6] Workpac Pty Ltd v Skene (2018) 264 FCR at [197].
[7] HSU v DPG Services Pty Ltd[2023] FWCFB 81 at [13]
[8] Amcor Limited v CFMEU (2005) 222 CLR 241 at 246; Kucks v CSR Ltd per Madgwick J (1996) 66 IR 182 at 184-185
[9] Toyota Motor Corporation Australia Limited v Marmara [2014] FCAFC 84 at [68], where the Court rejected the argument that s 46 of the Acts Interpretation Act with respect to construction of instruments applied to interpretation of enterprise agreements because the Fair Work Act does not confer authority on the Commission to make the instrument under consideration.
[10] See R v A2 [2019] HCA 35 at [48] per Kiefel CJ and Kean J (with whom Nettle, Gordon and Edleman JJ agreed. Note that Bell and Gageler JJ relevantly dissented in the outcome and regarding use of the heading to interpret the provision under consideration)
[11] See principle 5 in AMA v The Royal Women’s Hospital [2022] FWCFB at [29].
[12] See AMA & ASMOF v Royal Women’s Hospital [2022] FWCFB at [7]; HSU v DPG Services Pty Ltd[2023] FWCFB 81 at [13]
[13] Clause 2
[14] See Clause 6(ii)
[15] Principle 13 in AMWU v Berri Limited[2017] FWCFB 3005 at [114]
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