Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Kentz Pty Ltd

[2016] FWC 4508

[2016] FWC 4508

FAIR WORK COMMISSION

DECISION

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

Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia
v
Kentz Pty Ltd
(C2015/7414)

COMMISSIONER CLOGHAN PERTH, 9 SEPTEMBER 2016

Dispute about any matters arising under the enterprise agreement.

[1] This is an application by the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU) to deal with a dispute in relation to the Kentz Pty Ltd – CEPU Gorgon Project - Barrow Island Enterprise Agreement 2015 (2015 Agreement).

[2] The application is made pursuant to s.739 of the Fair Work Act 2009 (FW Act).

[3] The CEPU is in dispute with Kentz Pty Ltd (Kentz or Employer).

[4] The parties have conferred and the question for determination by the Commission is as follows:

Does Clause 9.2.2 of the Kentz Pty Ltd - CEPU Gorgon Project- Barrow Island Enterprise Agreement 2015 have the meaning and effect that an employee who:

(a) is not classified as a Leading Hand;

(b) has successfully completed the training Permits (System Procedure) Course; and

(c) has been appointed by the Company to perform the duties of an Electrical Work Team Leader

will be paid the “Leading Hand Allowance 4-7 Employees” for the week spent performing the duties of an Electrical Work Team Leader as either:

(a) a flat rate; or
(b) an all purpose allowance?

[5] At the hearing, the CEPU was represented by Mr S Millman of counsel and evidence given on behalf of the CEPU by:

• Mr L McLaughlan, Secretary, CEPU, Western Australia Branch; and



• Mr J Murie, Assistant State Secretary, CEPU, Western Australia Branch.

[6] Kentz was represented by Mr D Fletcher of counsel and evidence given, on behalf of the Employer by Mr R Twomey who, prior to his appointment to the Ichthys Project in October 2015, was the Senior Human Resources Advisor for Kentz’s scope of works on the Barrow Island Gorgon Project (Gorgon Project).

[7] This is my decision and reasons for decision.

RELEVANT BACKGROUND TO THE DISPUTE

[8] Kentz and Chicago Bridge and Iron Constructors Pty Ltd (CB&I) are the lead employing contractors on the Gorgon Project on Barrow Island.

[9] Kentz scope of works on Barrow Island involves the construction, installation and commissioning of electrical and instrumentation works.

[10] CB&I undertakes all mechanical and engineering work for the Gorgon Project on Barrow Island.

[11] Kentz and CB&I are the largest employers on the Gorgon Project.

[12] CB&I had enterprise agreements with coverage of employees eligible to be members of the Construction, Forestry, Mining and Energy Union (CFMEU) and the Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union known as the Australian Manufacturing Workers’ Union (AMWU) (collectively the CB&I, CFMEU and AMWU Agreements). The CB&I, CFMEU and AMWU Agreements expired prior to the Kentz Pty Ltd – CEPU – Barrow Island Greenfields Agreement 2012 (2012 Agreement). Kentz sought to finalise the terms of its replacement to the 2012 Agreement (which eventually became the 2015 Agreement), at approximately the same time as the CB&I, CFMEU and AMWU replacement enterprise agreements.

[13] In view of the desire to have as near as possible a common commencement date for the relevant employees of both CB&I and Kentz, there were what can be described as “Kentz only” negotiations. Some of these negotiations occurred on an urgent basis to “fit in” with what was happening in relation to CB&I, CFMEU and AMWU negotiations.

[14] One of the CEPU claims being discussed separately to the other two unions was:

“Team leader position to be defined and remuneration to be negotiated commensurate with duties and responsibilities. An all-purpose allowance not less than 5% in addition to the employees’ classification rate to be applied”.

RELEVANT PROVISIONS OF THE 2015 AGREEMENT

[15] The relevant provisions of the 2015 Agreement in dispute is subclause 9.2.2 which in the whole clause is as follows:

“9.2 Leading hand Allowance

9.2.1 Leading Hands as appointed by the Company will be paid a weekly all-purpose allowance as follows:

Operative Date	% Increase	If placed in charge of up to 3 other Employees	If placed in charge of 4 to 7 other Employees	If placed in charge of 8 or more other Employees
$33.93	$71.66	$117.72
Agreement made*	3%	$34.95	$73.81	$121.25
1 January 2016	2%	$35.65	$75.29	$123.68
1 January 2017	2.7%	$36.61	$77.32	$127.02

Rates apply from the beginning of the first pay period on or after the above dates.
* “Made” has the meaning for the purposes of section 182(1) of the Fair Work Act 2009 (Cth) i.e. when a majority of the employees cast a valid vote and approve the Agreement.

9.2.2 An Employee who is not classified as a Leading Hand and has successfully completed the training, Permits (System Procedure) Course, and is appointed by the Company to perform the duties of an Electrical Work Team Leader will be paid the Leading Hand Allowance 4-7 Employees weekly rate shown above for the week spent performing the duties of an Electrical Work Team Leader.” (my emphasis)

[16] The CEPU submit that the weekly rate in subclause 9.2.2 is “an all-purpose allowance”. Kentz submit that the rate in subclause 9.2.2 is a “flat rate allowance”.

[17] Before turning to the interpretation of enterprise agreements, and in particular subclause 9.2.2 of the 2015 Agreement, it is necessary to confirm that there was no dispute between the parties that the application had been properly made in accordance with sections 595, 738 and 739 of the FW Act and Clause 48 Issue Resolution Procedure of the 2015 Agreement.

INTERPRETATION OF ENTERPRISE AGREEMENTS

[18] Interpretation of an enterprise agreement begins with a consideration of the ordinary meaning of the words having regards to their context and purpose. This was set out by French J, as he then was, in City of Wanneroo v Australian Municipal Administrative, Clerical and Services Union [2006] FCA 813 (Wanneroo):

“The construction of an award, like that of a statute, begins with a consideration of the ordinary meaning of its words. As with the task of statutory construction regard must be paid to the context and purpose of the provision or expression being construed. Context may appear from the text of the instrument taken as a whole, its arrangement and the place in it of the provision under construction. It is not confined to the words of the relevant Act or instrument surrounding the expression to be construed. It may extend to ‘...the entire document of which it is a part or to other documents with which there is an association’. It may also include ‘... ideas that gave rise to an expression in a document from which it has been taken’ - Short v FW Hercus Pty Ltd (1993) 40 FCR 511 at 518 (Burchett J); Australian Municipal, Clerical and Services Union v Treasurer of the Commonwealth of Australia (1998)80 IR 345 (Marshall J). ”

[19] Although his Honour was dealing with the interpretation of an award, the same approach is appropriate with respect to enterprise agreements.

[20] In Wanneroo, the principal question on appeal was whether the position an employee had been appointed to, fell within the award classification of “Community Service Officer (Welfare and Ancillary Services)”. His Honour, French J, described the definition of Community Service Officer as a kind of, “verbal Rorschach blot into which almost anything can be read” 1.

[21] My task, I think, is more multi-dimensional.

CONSIDERATION

Introduction

[22] The CEPU submit that:

“Clause 9.2.2 does not provide that the WTL [Work Team Leader] Allowance is not to be paid as an all-purpose allowance or that it is to be paid as a flat allowance”. 2

[23] It is not in dispute that subclause 9.2.2 does not refer to “all-purpose allowance” or “flat allowance”.

[24] It is necessary to begin with the text of subclause 9.2.2 of the 2015 Agreement.

[25] The parties agree that the specified weekly rate is to be paid to an employee who is not a leading hand but has successfully completed the Permits (Systems Procedure) Course.

[26] The parties also agree that to be paid the weekly rate in subclause 9.2.2, it is necessary for Kentz to appoint the employee as a WTL.

[27] The parties agree that the Kentz appointed WTL is paid the weekly rate, irrespective of the amount of time spent on work that week associated with having completed the Permits Course. I now turn to the text of subclause 9.2.2 in dispute.

[28] The WTL is required to be paid “the Leading Hand Allowance 4-7 Employees weekly rate shown above…” (my emphasis).

[29] “In constructing an enterprise agreement it is first necessary to determine whether an agreement has a plain meaning or contains an ambiguity”. 3

[30] Both the CEPU and Kentz contend that there is no ambiguity in subclause 9.2.2. However, if I do find that there is ambiguity, then both parties assert that the ambiguity ought to be resolved in their favour.

[31] Both the CEPU and Kentz agree that the roles of Leading Hand and WTL are separate and distinct. I agree and this is supported by the evidence.

[32] Clause 7 is entitled “Rates of Pay”. Subclause 7.1(b) refers to Schedule A which prescribes hourly rates payable to employees. That is, the relevant specified “rate” payable to employees set out in Schedule A. Further, the parties have agreed to the specific inclusion of the words in 7(1)(b) of the following:

“Note: any applicable All Purpose payments will be added to the Schedule A rates as relevant”

[33] The “note” refers to applicable “All Purpose payments”.

[34] In a “compare and contrast” exercise, I note the specific applicable reference to “all purpose” in the following subclauses:

9.3 First Aid Allowance: “It is not paid for all-purposes”

9.5 Trades Allowance: “…shall be paid an hourly all-purpose allowance”

9.6 Barge Disability Allowance: “…the barge disability allowance is a daily flat allowance…”

9.7 Electrical License Allowance: “…shall be paid an hourly all-purpose allowance …”

9.8 Electrical Assistant Allowance: “…shall be paid an hourly all-purpose allowance …”

[35] It is not an uncommon feature in awards and enterprise agreements, for an applicable rate to be set out in a schedule or in another location of an industrial instrument.

[36] Nor is it unusual, in awards and enterprise agreements, for a rate of pay to be derived by reference to another monetary amount, for example, apprentices receiving a percentage of a tradesperson’s rate of pay.

[37] The 2015 Agreement has a number of subclauses which provide for a monetary amount to be paid within its text. Frequently, it is expressed as follows:

“Rates apply from the beginning of the first pay period…”

[38] It appears that the 2015 Agreement has operated and applied, on the understanding that the monetary amount set out in such clauses, is the monetary amount payable to employees. The plain and ordinary meaning of those clauses is that the rate identified, is the rate payable.

[39] Both parties agree that, as a stand-alone subclause, 9.2.2 is readily understood. Both parties have submitted that subclause 9.2.2 is not ambiguous.

Is subclause 9.2.2 ambiguous?

[40] Subclause 9.2.2 sets out:

• the circumstances when payment takes effect;



• the conditions to make the payment operative;



• which employee is to be paid by the employer; and



• what the employee is to be paid by the employer.

[41] Subclause 9.2.2 can be readily understood on a “stand alone” basis from its immediate text.

[42] Where the parties disagree is that “the … weekly rate” which has been derived from subclause 9.2.1, has a “property” of being for “all purposes” which the CEPU assert, must also be applied in subclause 9.2.2.

Does the weekly rate refer to in subclause 9.2.2 have the “property” of being for all purposes?

[43] The numbers in subclause 9.2.1, for example “75.29”, are nothing more than numbers. What gives those numbers meaning is the “$” sign in front of them. The “$” sign ensures that the reader knows that the numbers are a reference to a monetary amount, as distinct, for example, from a map grid reference.

[44] Further, we know that “$75.29” has a value that is more than “$25.29” and less than “$95.29”. Consequently, “$75.29” is not only an amount but it is also an amount which is comparable to other amounts.

[45] However, the amount of “$75.29” has no other properties unless and until given by those involved in its use. Kentz and the employees have agreed within the text of subclause 9.2.1, that the amount of “$75.29” will be paid, for example, from 1 January 2016:

• to Leading Hands appointed by Kentz;



• if the Leading Hands are placed in charge of “4 to 7 other employees”;



• for each week the employee is a Leading Hand; and



• for all purposes.

[46] Accordingly, both subclauses are readily understood for the reasons set out in paragraph [40]. However, while both subclauses are similar, they are not identical.

[47] The weekly amount a Leading Hand receives in subclause 9.2.1 is dependent upon the number of employees he or she is leading. The number of employees (if any) the WTL is leading, is not relevant in subclause 9.2.2.

[48] Secondly, subclause 9.2.1 specifically states that the Leading Hand “will be paid a weekly all-purpose allowance”. In contrast, the WTL receives “the … weekly rate” and there is no reference in the text of subclause 9.2.2 to “the … weekly rate” being paid for “all purposes”.

[49] Clearly, the textual difference between subclause 9.2.2 and 9.2.1 is that any amount in 9.2.1 is specifically referred to as a “weekly all-purpose allowance”, whereas in 9.2.2, it is referred to as “the … weekly rate”.

[50] The CEPU argue that the monetary amount in both subclauses have the same property of being for “all purposes”. However, that would involve ignoring the textual differences between subclauses 9.2.1 and 9.2.2.

[51] Kentz argue both subclauses are different, were intended to be different, and consequently, have a different meaning and application.

[52] The CEPU submit that even though subclause 9.2.2 is absent the words “all purposes”, “the … weekly rate”, is for “all purposes” and I should transpose the application of the amounts being for “all purposes” in subclause 9.2.1, into subclause 9.2.2, and harmonize both subclauses as they were intended to be.

[53] For the Employer, the absence of harmonization between the subclauses was deliberate and intended to reflect the role and responsibilities of the WTL vis-à-vis, the Leading Hand.

[54] Absence of “the … weekly rate” being for “all purposes” in subclause 9.2.2, is of itself, evidence of its difference with subclause 9.2.1.

[55] I have a reluctance to import into the words “the … weekly rate” the meaning and application of being an “all purposes” rate, for the following reasons.

[56] Firstly, the text of subclause 9.2.2 has a plain, ordinary and readily understood meaning without importing into the words “the … weekly rate” the property of being an “all purpose” amount. This is not a case of re-writing a clause to give it an intelligible form. It is readily understood on a stand alone basis.

[57] Secondly, to import the property of “the … weekly rate” being for “all purposes” would be to admit into the text of subclause 9.2.2 something which was omitted from the text in the first instance. Consequently, to include the application of “the … weekly rate” being for “all purposes” would be to override the intention of the parties in the first instance. Alternatively, if the omission was unintentional on the part of the CEPU, unfortunately, as his Honour French J stated in Holmes it “binds the parties”. 4

[58] Thirdly, it is not uncommon in the 2015 Agreement for clauses and subclauses to refer to the payment of amounts or rates set out elsewhere in the enterprise agreement. There is nothing extraordinary in the construction of subclause 9.2.2. The text used, in referring to a rate elsewhere in the 2015 Agreement, in this case subclause 9.2.1, is not an uncommon feature of awards and enterprise agreements.

[59] In subclause 9.2.1 of the 2015 Agreement, a Leading Hand is paid “a” weekly all purpose allowance. In contrast, in subclause 9.2.2 a WTL is paid “the” weekly rate. “A” is used to denote one of the various rates in subclause 9.2.1 whereas “the” is a specific reference in subclause 9.2.2, to only the rate applicable in 4-7 employees column. The word “the” in subclause 9.2.2, can only be a reference to the numerical amounts and not to a property which relevantly is applicable to a Leading Hand.

[60] While the CEPU has asked that I consider subclause 9.2.2 of the 2015 Agreement in the context of subclause 9.2.1, the evidence demonstrates a desire of the parties during bargaining, and in these proceedings, to emphasise the differences between a Leading Hand and WTL.

[61] In subclausse 9.2.2, there is no text to state that “the weekly rate” is for all purpose or any words which would imply an all purpose weekly rate. The weekly rate is what it is.

[62] Finally, subclause 9.2.2 is short, precise and its opening words clearly demonstrate that it is dealing with an amount to be paid to an employee who is not a Leading Hand. Put simply, by its commencing words, its terms are intended to distinguish the conditions which apply to a WTL, from a Leading Hand.

[63] This final point leads me to the notable differences in the description of the monetary amount in subclauses 9.2.1 and 9.2.2.

“Weekly allowance” and “the … weekly rate”

[64] In subclause 9.2.1, the parties have chosen, irrespective of the amount, that it will be paid as a “weekly all-purpose allowance”.

[65] The arrangement in subclause 9.2.1 is written in such a way to describe that Leading Hands are to receive the allowance with the express property of being for “all purposes”.

[66] In contrast, the arrangement in subclause 9.2.2 commences with which employee it does not apply to and proceeds to set the conditions for payment of “the … weekly rate”.

[67] In summary, the two subclauses are different in terms of their language and arrangement.

[68] The text of subclause 9.2.1 deliberately distinguishes between a “weekly all purpose allowance” and the amount of that allowance. Whereas, in subclause 9.2.2, there is no reference to a weekly allowance: reference is only to the stand-alone “weekly rate” or amount.

[69] It may be helpful to test the meaning and application of subclause 9.2.2 by asking the question, where is it in the subclause that “the … weekly rate” is for “all purposes”? The simple answer is, “it doesn’t”. To cure this difficulty, the CEPU submit that I should give “the … weekly rate” a property that has been attributed to an allowance in subclause 9.2.1. However, this would involve the Commission, as I have already stated, rewriting subclause 9.2.2.

[70] The “cure” to the difficulty for the CEPU in answering the question above, is to give “the … weekly rate” in subclause 9.2.2 the same property as in subclause 9.2.1 by adding words that “the … weekly rate” is for “all purposes”. This was not done. Consequently, I do not think it appropriate for the Commission to insert such text which was excluded by agreement of the parties.

[71] While it may have been the intention of the CEPU for “the … weekly rate” to be an “all purpose” weekly rate, on a plain and ordinary reading of subclause 9.2.2, there is no ambiguity or uncertainty; the weekly rate is what it says – the weekly rate.

[72] In summary, the terminology, text and conditions in suclauses 9.2.1 and 9.2.2 are different.

[73] I now turn to where the WTL sits in the Employer’s organisational structure.

Where does the WTL “sit” in the organisational structure?

[74] Notwithstanding that the Leading Hand and WTL are two separate and distinct roles, the CEPU reject Kentz’s submission that the WTL falls within a hierarchy in which the WTL sits above general employees and below the Leading Hand.

[75] The CEPU rejects Kentz’s contention of a hierarchy and submit that a weekly allowance (which is for “all purposes”) to Leading Hands is comparable to “the … weekly rate” for WTL. There is no dispute that both payments are “weekly”, however, that does not overcome the different language to describe the payment. Further, even if both payments are weekly, it does not follow that “the … weekly rate” in subclause 9.2.2 has the inherent property of being for “all purposes”. Simply put, there is no direct correlation of one with the other.

[76] There is no dispute that the additional amounts paid in both subclauses 9.2.1 and 9.2.2 is payment for additional duties above and beyond the general employee.

[77] The CEPU submit that for Kentz to succeed in its case, I would need to “find the words “flat rate” in clause 9.2 and you can’t find them, and neither should you put them in”. 5

[78] The words “flat rate” are not to be found in subclause 9.2.2. However, “the … rate”, I suggest, is equivalent to “flat rate”, “fixed rate”, “going rate”, “quoted rate” or whatever description is given to the amount to be paid to an employee for performing work above and beyond that of a general employee as a WTL. In my view, “flat rate” and “rate” are the same.

[79] In subclause 9.3 of the 2015 Agreement the First Aid Allowance is referred as a “daily allowance as a flat payment. It is not paid for all purposes”. In subclause 9.6 , the Barge Disability Allowance is a “a daily flat allowance”. In this case, the parties did not consider it necessary to include the words, “it is not paid for all purposes”.

[80] Whichever way the words are interpreted in subclauses 9.3 and 9.6, there is no dispute that the First Aid and Barge Disability allowances are a “flat” rate or allowance. Whereas, all the other allowances are distinguishable, including in 9.2.1, by the specific agreement of the parties, to include words that the relevant payment is for “all purposes”.

[81] If I apply the same test to the CEPU, as it suggests I apply to Kentz, it is necessary for me to find “all purpose” in subclause 9.2.2. First, the amount payable to the WTL is not referred to as an allowance but “the … weekly rate”. Secondly, the amount in subclause 9.2.1 is expressly described as an “all purpose” amount, whereas the same designation is not given to “the … weekly rate” in subclause 9.2.2.

[82] I do not disagree with the CEPU’s general principle that employees are remunerated based on increasing level of skills, qualifications and duties. However, such a general principle does not automatically proceed to additional payments, whether “allowances” or “rates”, being paid for “all purposes”.

[83] Subclause 9.2.2 was introduced, for the first time, into the 2015 Agreement.

[84] It is true that many “allowances” in the 2015 Agreement provide for the amount to be paid for “all purposes” or it is explicitly stated “not paid for all purposes”. Subclause 9.2.2 is different to the extent that the text does not state that “the … weekly rate” is to be paid for “all purposes” or as a “flat rate”. Further, the amount in subclause 9.2.2 is not referred to as a “weekly allowance” but as “the … weekly rate”.

[85] The CEPU submit that if I interpret subclause 9.2.2 in the manner contended by Kentz, it would have two significant consequences. Firstly, the entitlements of WTL would be significantly reduced in value “from what they ought to be” than if I consider the “allowance” as an “all purpose” allowance. While I thank Mr Millman for his observation, it is not my role to set out what I consider to be the additional monetary value for employees who are appointed a WTL, that is for the parties. My role, as requested by the parties, is to determine from a plain and ordinary reading of the text, whether “the … weekly rate” in subclause 9.2.2 is for “all purposes” or a “flat rate”.

[86] Secondly, Mr Millman asserts that if I adopt the view put by Kentz, WTLs would be treated differently to Leading Hands. While I appreciate Mr Millman’s observation, the two positions are separate and discrete. Further, it is not uncommon for the parties to enterprise agreements to treat enhanced roles and responsibilities beyond the general employee level at different gradations. Finally, I reject the assertion that I would be discriminating 6 against WTLs should I read the words “flat rate” into subclause 9.2.2 when contrasted with Leading Hands. The Commission’s role, as dealt by the parties, is to determine the question posed by the parties in paragraph [4].

[87] I am inclined to agree with the CEPU that “allowances” in Clause 9 appears to be categorized into skills and disability maybe with the exception of the First Aid Allowance. However, this is the first occasion that additional remuneration for an employee who has completed the Permits Course, has been incorporated into an enterprise agreement. Secondly, the specific additional amount is referred to as “the … weekly rate”, not an “allowance”.

[88] The fact that subclause 9.2.2 follows the Leading Hand allowance in subclause 9.2.1, is not objectively demonstrative, by its arrangement, that “the … weekly rate” in subclause 9.2.2 should be “all purpose”. 7 However, this arrangement led to submissions and evidence suggestive of another purpose – to which I now turn.

Organisational Hierarchy

[89] Taking the various pieces of evidence with respect to where the WTL ‘sits” in the hierarchy, I find as follows:

• prior to being formalised in 2015, various ad hoc arrangements and payments existed with respect to the duties carried out by the WTL;



• the 2015 Agreement was the first occasion in which the position and payment of the WTL was formalised;



• that Chevron Australia Pty Ltd “Construction Permit to Work” (Work Procedure) as its name suggests, is a “work procedure” 8;



• the WTL is employed by Kentz and not Chevron;



• the WTL is part of the Work Procedure with respect to a permit to work system;



• as part of that Work Procedure, the WTL, in a work flow situation, makes application to the “Permit Authority”, liaises with that Authority’s personnel, is involved in the issuing of permits and any consequential aspects of the permit such as revalidation or relinquishing the permit to work 9;



• Kentz is the applicant for a permit to work and, it would appear that Kentz authorises and Chevron requires, a WTL to be the designated person to be the nominated representative of the applicant (Kentz) for a permit to work. This is best illustrated by the Application Form. 10;



• the WTL works within Chevron’s permit to work procedure but is not responsible or reports to any Chevron employee in an organisational sense. In fact, the word “report” is not used in the WTL list of responsibilities. I suggest the word “notify” is used deliberately to distinguish this arrangement from “report”;



• even if I accept Chevron’s statement of the “responsibilities” of the WTL as indicative of Kentz expected responsibilities of the WTL, it is noticeable that the WTL is a “member of the team performing the work” - that is a member of the Kentz team performing the work 11; and



• if anything untoward happened regarding the WTL conduct or performance, the proper entity to take disciplinary action must be Kentz.

[90] Finally, I do accept the submission that the WTL is an employee who somehow is devoid of any control or supervision by Kentz. Because the WTL operates within Chevron’s Work Procedure, this does not exclude him or her from the hierarchy within the Kentz organisational structure.

[91] I have no reason to disbelieve Mr Twomey’s evidence which indicates the WTL “duality” of WTL roles. Mr Twomey explained in cross examination:

“And so - - -?---There is a dual – obviously – what the – this is what I'm saying is they are reporting to the leading hand.  The company, Kentz, employs the work team leader, employs the leading hand and employs the supervisor.  But then there is a permit to work office that sits off to the side with a Chevron permit to work supervisor that that person for any permits must then go to for permit items, but also then must then report to the leading hand on what the employee is doing that day.” 12

[92] Which is repeated again in cross examination:

“So then the converse is your evidence;  that the work team leader is not answerable to the permit supervisor?---The work team leader reports to the leading hand.  They have to, for Chevron process, then go to the permit supervisor for the particular permit that day.” 13

“MR MILLMAN:  Mr Twomey, is the work team leader – I will put it to you, and then I will leave it and move onto the next.  Is the work team leader required or answerable to the permit supervisor?---They have to communicate with that supervisor with Chevron.

Yes.  So they are answerable to that person, aren't they?---No, they're answerable to the leading hand.  Let me put it this way, if the permit to work supervisor had an issue with the operation or the management of the permit, they would escalate it to the leading hand; not the work team leader.  That's your answer.” 14

Bargaining

[93] Prior to the 2015 Agreement both parties agree that various ad-hoc payment arrangements had been entered into. These payment arrangements were not satisfactory.  15

[94] Mr Murie’s written evidence is:

“26. In fact, part of the reason that the CEPU was pursuing the claim was because the work team leader role was distinct from the leading hand role, and we were seeking proper recognition and remuneration for the work team leader position.

27. The CEPU and its members at the project had always wanted the leading hand and work team leader roles to be separate because the CEPU did not consider it appropriate for the leading hand to be undertaking safety, permit and works duties in addition to operational and supervisory duties. For example, a work team leader should have the entire scope of the electrical works as his sole priority so far as possible, whereas a leading hand needs to be checking on individual members of the team and resources across the scope of the works.

…

33. While work team leaders are appointed depending on the scope of the particular works being undertaken at the time, it is not the experience of the CEPU and its members at the Project that work team leaders are appointed only for a day’s work, as suggested by Mr Twomey at paragraph [26] of his witness statement.

34. In the experience of the CEPU and its members, work team leaders are ordinarily appointed for at least a week at a time. In many circumstances, work team leaders are appointed and carry out their role from week to week on an effectively permanent, full time basis.

…

42. As set out by Mr Twomey at paragraph [37] of his witness statement, I recall Mr Twomey making an offer during negotiations that the Respondent would pay the work team leader allowance only for the single day on which the employee performed the work team leader functions.”

[95] Mr Twomey’s uncontested evidence is:

“25. Accordingly, work team leaders are appointed on an "if and when required" basis as opposed to a permanent appointment. This is in contrast to a leading hand which is a permanent position within a work crew which cannot be delegated.

26. For instance, a work team leader may be appointed during tool box meetings held when scope of works for a particular week are finalised or during the pre-start meeting prior to the commencement of a day's work. Again, there is no formal appointment as a work team leader, just a notation of who performed that role on a given day to ensure that payment for that task was made and to ensure an employee was aware they were responsible for arranging the permits for that day's scope of works.”

[96] Kentz do not resile from the fact that the CEPU’s claim regarding the WTL was for an “all purpose” allowance. The CEPU’s initial claim, as at 5 May 2015, was for:

“Team leader duties to be defined and remuneration to be negotiated commensurate with duties and responsibilities. An all-purpose allowance not less than 5% in addition to employees’ classification rate to be applied”  16

[97] Mr Twomey’s oral evidence is that on or around 24 June 2015, Kentz had sought a “flat rate” to be paid to WTL  17 but concedes he has no documents to support such evidence.18

[98] Mr Twomey’s oral evidence is supported by Mr Murie’s written evidence which reads:

“Mr Twomey then confirmed that his understanding was that people who performed the role would do so for not less than one week and they now rescinded their claim for a day rate.”

[99] Further, Mr Twomey’s written evidence of the conclusion of negotiations is as follows:

“40. As a compromise, Kentz agreed to a flat, weekly allowance paid to an employee when they performed work team leader duties.

41. What this means is that an employee who is appointed as work team leader for 1 day received a flat weekly allowance as if they had performed the work team leader role for 7 days.

42. It was for this reason that the work team leader clause was set up in 9.2.2 to be a separate and distinct entitlement referrable to the weekly rate for a leading hand 4-7 but omitted the phrase "all-purpose allowance" from the clause.”

[100] This written evidence was not disturbed in cross examination.

[101] Clearly there was a desire from both parties to fix up the existing arrangements. It would appear that the bargaining position can be summarised as the CEPU seeking a weekly all purpose allowance and Kentz seeking a daily flat rate.

[102] Over the course of bargaining, the position of both parties changed and the Commission is left with subclause 9.2.2 of the 2015 Agreement.

CONCLUSION

[103] For the reasons set out above the answer to the question for determination in paragraph [4] is (a).

COMMISSIONER

Appearances:

S Millman of counsel on behalf of the CEPU.

D Fletcher of counsel on behalf of Kentz.

Hearing details:

2016:

Perth,

5 July.

 1   City of Wanneroo v Australian Municipal, Clerical and Services Union [2006] FCA 813 para 53

 2   Exhibit A1 (25(d))

 3   The Australian Meat Industry Employees Union v Golden Cockerel Pty Ltd[2014] FWCFB 7447

 4   City of Wanneroo v Holmes 362 FCA 1989 at p 380

 5   Transcript PN94

 6   Transcript PN108

 7   Transcript PN111

 8   Exhibit A5 (JM-9)

 9   Exhibit A5 (JM-9)

 10   Exhibit A3 (p 193)

 11   Exhibit A3 (p 173)

 12   Transcript PN656

 13   Transcript PN660

 14   Transcript PN677 and PN678

 15   PN588 and Exhibit A2 (11)

 16   Exhibit A2 JU3

 17   PN 501

 18   PN524

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