Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Downer Utilities Australia Pty Ltd
[2016] FWC 4655
•12 JULY 2016
| [2016] FWC 4655 |
| 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 Utilities Australia Pty Ltd
(C2016/2898)
Electrical contracting industry | |
COMMISSIONER RYAN | MELBOURNE, 12 JULY 2016 |
Alleged dispute re payment of availability allowance on termination.
[1] The dispute concerns the meaning of part of clause 27 of the Tenix Australia Pty Ltd and ETU Power, Construction, Maintenance Enterprise Agreement 2013 – 2016 (the Agreement) which provides for the payment of an Availability Allowance in certain circumstances.
[2] The dispute only concerns that part of the clause 27 which provides a process to deal with employees being removed from the availability roster.
[3] Sub clause 27.2 provides as follows:
“27.2 Payout of Availability
27.2.1 The Employer acknowledges that in most cases, employees rely upon availability payments and allowance to support their financial obligations, and if removed, can suffer significantly. The Employer therefore will, where an employee is removed from availability duty at the initiative of the employer, provide the employee with 12 months’ notice of such removal, or payment of the equivalent amount of the availability allowance in lieu of such notice. Such notice is not required where the employee has been removed from availability because of misconduct that would justify, on an objective basis, the issuing of a final written warning.
27.2.2 If an employee has been in receipt of the allowance for less than 12 months, a pro rata amount of notice, or payment in lieu thereof, shall be provided.”
[4] Sub clause 27.2 was inserted into the 2013 Agreement and was not present in the predecessor enterprise agreements. The present dispute is the first time that the meaning of sub clause 27.2 has been called into question.
[5] A small group of employees who had been on the availability roster and in receipt of the availability allowance were recently dismissed due to redundancy. There is no dispute as to that redundancy.
[6] The dispute concerns the entitlement of those employees to a payment equal to
12 months’ payment of the availability allowance. The CEPU contends that as the employees were removed from the availability roster at the initiative of Downer when they were made redundant, then these employees had not received 12 months’ notice of removal from the roster and therefore were entitled to payment of the equivalent amount of availability allowance in lieu of such notice.
[7] Downer contends that the redundant employees were not removed from the roster at the initiative of the employer rather they simply ceased to be on the roster when their employment terminated. Downer contends that the employees have no entitlement to payment of the availability allowance in lieu of notice as no notice was required to be given under subclause 27.2 in circumstances where the employees were dismissed due to redundancy.
[8] Both parties relied on the Full Bench decision in AMIEU v Golden Cockerel P/L 1as providing the appropriate guidance for interpreting the meaning of a clause of an enterprise agreement. Both parties agreed that there was no common understanding as to the meaning of clause 27.2.
[9] There is nothing inherently wrong with the interpretations of clause 27.2 advanced by each of the parties. Thus it is clear that the wording of clause 27.2 can be given two meanings. However, only one can be preferred.
[10] Both parties agree that the prime intention behind the introduction of clause 27.2 into the current Agreement was to reduce the impact on employees if they lost the allowance and the overtime which went with being on the availability roster.
[11] Determining whether the clause is intended to provide a payment in lieu of notice when an employee is removed from the availability roster due to redundancy is best answered by having regard to the overall structure of the Agreement.
[12] Firstly there is nothing in relation to the order in which the clauses of the Agreement appear which assists in interpreting clause 27.2. Clause 27 – Availability sits oddly between clause 26 - Severance and clause 28 – Termination of Employment. Clause 27 has more in common with clause 11 - Hours of Work (which specifically mentions Call Outs at clause 11.4) than it does with Severance or Termination of Employment.
[13] Secondly, clause 26 – Severance provides for Redundancy pay in clause 26.4.1 and in clause 26.4.2 defines “week’s pay” for the purpose of redundancy payments as:
“Week’s pay means the gross weekly ordinary all purpose rate of pay, as defined, at the date of termination.”
[14] Clause 15 – Wages contains two specific definitions of weekly pay:
“15.1. Weekly wage rate
An employee is entitled to be paid the gross weekly rate of pay per week as defined below.
15.2. Gross weekly rate of pay
To calculate the gross weekly rate of pay the following shall be added together:
o The gross weekly ordinary all purpose rate of pay set out in the relevant Table of this Agreement; and
o Applicable Special Allowances set out in the relevant Table of this Agreement.
o For the classification in which the employee is ordinarily employed.
15.3. Gross weekly ordinary all purpose rate of pay
15.3.1. To calculate an employee’s gross weekly all purpose rate of pay, the following shall be added together
o The minimum weekly wage rate set out in the relevant Table of this Agreement;
plus
o Shift loadings if applicable; and
o Applicable all-purpose allowances set out in the relevant Table of this Agreement.
For the classification in which the employee is ordinarily employed.
15.3.2. The gross weekly ordinary all purpose rate of pay is payable for all purposes of the Agreement and shall be included as appropriate when calculating payments for overtime, annual leave, sick and personal leave, annual leave loading, public holidays and pro rata payments on termination.
[15] Appendix A – Wage Rates specifies that the all purpose allowances are: Travel allowance, Attendance Pay, Annual Leave Loading, Electrical Distribution and Transmission Industry Allowance, Tool Allowance. These are the only allowances that are included in the definition of ‘gross weekly ordinary all purpose rate of pay’.
[16] Availability Allowance both weekly and per hour is an allowance included under the heading “Special (flat rate) allowances” in Appendix B to the Agreement. It is clear that availability allowances are not payable as part of the weekly wage for the purpose of redundancy payments.
[17] The CEPU contends, correctly in my view, that non mention of a payment within the redundancy payment clause does not mean that redundancy payment is limited to what is in clause 26. However, for an entitlement to arise for a payment of the availability allowance as a payment in lieu of notice on redundancy would in my view require an explicit provision for such a payment within clause 27.2. No such provision exists.
[18] What clause 27.2 provides for is payment in lieu of notice when an employee is removed from the availability roster at the initiative of the employee and the removal is not for the reason of misconduct that would justify, on an objective basis, the issuing of a final written warning.
[19] The language used in clause 27.2 with its emphasis on ‘where an employee is removed from the availability roster at the initiative of the employer” makes better sense when considered in the context of ongoing employment than it does when considered in the context of termination of employment. It also makes better sense when considered in the context of ongoing employment given the specific way in which redundancy payments are dealt with in clause 26, clause 15 and Appendix A and B of the Agreement.
[20] The phrase “‘removed from the availability roster” clearly carries with it the sense that all that has happened is that the employee is being removed from the availability roster. To suggest, as does the CEPU, that “removal from the availability roster” includes termination at the initiative of the employer would appear to require a significant and impermissible stretching of the phrase. Because the conduct that clause 27.2.1 requires from the employer is that the employer initiates the removal of the employee from the availability roster, the clause is focusing on a specific initiative of the employer. Where termination of employment occurs due to redundancy, as in the present matter, the initiative of the employer is not on removing an employee from the availability roster but rather on reducing the size of the workforce through redundancy. Again it would appear to be a step too far to read the clause as including any action of the employer which had the effect of ending the employee’s participation in the availability roster. Termination of employment will always end the possibility of an employee being included on the availability roster but as in the present matter termination was not done for the purpose of removing the employees from the availability roster.
[21] The CEPU contends that in the absence of any prohibition or exclusion in clause 27.2 which prevents an employee claiming the entitlement to payment in lieu of notice when an employee on the availability roster is terminated at the initiative of the employer, then such a prohibition or exclusion should not be read into the clause. The difficulty with this contention is, that the obverse side of the same coin would argue, that the Commission should not read into clause 27.2 a specific entitlement to payment in lieu of notice when an employee on the availability roster is terminated at the initiative of the employer, when such a specific intention is absent from the clause. The structure of clause 27 suggests the correct approach to dealing with this contention from the CEPU.
[22] Clause 27.1.1 defines the purpose of the Availability clause and makes clear that this is a clause about the performance of work at specific times. The employee must be available to perform work at times outside the normal hours and the employee is paid an allowance for being available to perform that work and is then paid at specified penalty rates when the employer requires the available employee to perform that work.
[23] Clause 27.2 deals with some circumstances where an employee who is available to perform work outside of normal hours is denied the opportunity to be considered as being available because the employee is removed from availability duty at the initiative of the employer. The employee, although available to perform work outside normal hours, is restricted by the employer from offering themselves for inclusion on the availability roster. The action initiated by the employer has a detrimental impact on the earnings of the employee, in that, the employee is no longer able to earn the availability allowance. In order to minimize this adverse financial impact, clause 27.2 provides, either, for a period of notice to be given to the employee before the employee is actually removed from the availability roster, or, the employee can be immediately removed from the availability roster but with the employer making a payment in lieu of the period of notice.
[24] When looked at in this way, the whole of clause 27 is so linked with the performance of work within a continuing employment relationship that to have clause 27.2 also deal with termination of employment would require specific provision within the clause. Equally, when looked at in this way, the whole of clause 27 is so linked with the performance of work within a continuing employment relationship that a specific provision limiting the operation of clause 27.2 to instances of a continuing employment relationship is unnecessary.
Conclusion
[25] Clause 27.2.1 does not create an employee entitlement for a payment in lieu of notice for an employee who is removed from the availability roster as a consequence of the employee’s employment being terminated at the initiative of the employer.
COMMISSIONER
Appearances:
G. Borenstein for the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia
D. North for Downer Utilities Australia Pty Ltd
Hearing details:
2016.
Melbourne:
June 21
1 [2014] FWCFB 7447 at [41].
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