Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Nilsen (Vic) Pty Ltd

[2017] FWC 4030

[2017] FWC 4030

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
Nilsen (Vic) Pty Ltd
(C2017/2417)

COMMISSIONER RYAN MELBOURNE, 22 AUGUST 2017

Alleged dispute about classifications.

[1] On 5 May 2017 the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (the ETU) made an application for the Commission to deal with a dispute in accordance with the dispute settlement procedure contained at clause 15.2 of Part A of the Nilsen (Vic) Pty Ltd Enterprise Agreement 2010-2014 (the Agreement).

[2] The dispute as described by the ETU in its Form F10 identified two separate issues. The first issue concerned the classification of 8 employees who were classified by Nilsen at the EW5 classification level whereas the ETU claimed that the 8 employees should have properly been classified at the EW6 classification level. The second issue concerned the scope and proper application of the construction wiring allowance in Part A of the Agreement.

[3] At the initial conference with the parties Ms Weber of the ETU requested that the first issue be programmed for arbitration without conciliating the matters in dispute. Mr McIlroy of the National Electrical Contractors Association (NECA), representing Nilsen, consented to that course. The ETU indicated that it would not press the second issue whilst the first issue was being resolved.

[4] Directions were issued and hearings were conducted on 10 July, 24 July and 25 July 2017. Evidence was given by Mr J. Coburn, the ETU’s expert witness, on 10 July. On 24 July 2017 evidence was given by each of the 8 employees subject of the first issue and on 25 July by Mr J. O’Sullivan, for Nilsen.

The classification dispute

[5] The workers the subject of the classification dispute are members of the ETU employed as electricians by Nilsen (Vic) Pty Ltd (Nilsen) and primarily work at the Loy Yang power station and mine in Morwell. They are:

• Alexander Benson;



• Warwick Landy;



• Aaron Marsh;



• Donald McLean;



• Jonathan Pratt;



• Luke Swan;



• Daniel Vardy; and



• Derik Wyntjes

(the employees)

[6] The ETU submits that the employees are entitled to be re-classified from EW5 to EW6, with appropriate back-pay.

[7] Schedule 1 of the Agreement sets out the classifications which apply to employees. Those classifications are derived from the National Electrical, Electronic and Communications Contracting Award 2010 (MA00025) (the Award). The preamble to the Schedule relevantly provides:

“SCHEDULE 1-CLASSIFICAT/ONS

(As per the Electrical, Electronic and Communications Contracting Award 2010)

1 Classification/reclassification

1.1 In order to assist in the classification or reclassification of Employees, the

following will apply:

(a) where the employee has the relevant qualification recognised as a

minimum training requirement for the level at which the employee seeks to be classified; and

(b) the employee is exercising or will be required to exercise the skills and knowledge gained from the qualification necessary for that level of work;

(c) the employee must be classified appropriately.”

[8] The ETU in its written submissions of 15 June 2017 drew the Commission’s attention to what it argued was an error in the classification definition for an Electrical Worker grade 6 (EW6) contained in the Award, which has been imported into Schedule 1 of the Agreement. In its written outline of submissions the ETU details the relevant history of the variations to the pre-modern award, the National Electrical, Electronic and Communications Contracting Industry Award 1998 (NECCIA Award) and argues that at the time of award modernisation, the classification structure from the NEECIA Award was imported into the Award with an error in relation to the EW6 classification.

[9] Nilsen in its written submission in response to the ETU’s submissions, said: “the Respondent agrees that the classification structure contained in the enterprise agreement contains errors and should be read as corrected. This is not to imply that the Respondent concurs with all of the Applicant’s reasoning.”

[10] The definition of EW6 classification in both the Award and the Agreement is the same (mutatis mutandis) and is as follows:

Electrical worker grade 6

(a) An Electrical worker grade 6 is an Electrical worker grade 5 who in addition has:

(i) successfully completed three appropriate training modules or 33% of the qualification specified for grade 7 or its equivalent; or

(ii) equivalent structured in-house training relevant to the employer’s business or enterprise as agreed between the parties to the Agreement; and

(iii) acquired an equivalent standard of skills as defined in 2.6(a)(i) through other means including a minimum of one year’s experience as an Electrical worker grade 5; or

(iv) is employed to use the skills acquired through the training or experience specified.

(emphasis and underlining added)

[11] The position adopted by both the ETU and Nilsen is that the definition of EW6 should be read and applied as follows:

“2.6 Electrical worker grade 6

(a) An Electrical worker grade 6 is an Electrical worker grade 5 who in addition has:

i. successfully completed three appropriate training modules or 33% of the qualification specified for grade 7 or its equivalent; or

ii. equivalent structured in-house training relevant to the Employer's business or enterprise as agreed between the parties to the Agreement; or

iii. acquired an equivalent standard of skills as defined in 2.6(a)(i) through other means including a minimum of one year's experience as an Electrical worker grade 5; and

iv. is employed to use the skills acquired through the training or experience specified.”

(emphasis and underlining added)

[12] Having regard to the language used for other EW classifications in the Award and the Agreement it is quite obvious that that an error has been made in the placement of “or” and “and” in the definition of the EW6 classification in both the Award and in the Agreement. As currently expressed in the Agreement the definition of the EW6 classification would result in absurd results if applied according to its plain words. I accept the correctness of the position adopted by both parties and for the purpose of this decision the Commission will apply the definition of the EW6 classification as amended above.

[13] As can be seen the EW6 classification refers in part to the EW7 classification which is defined in the Agreement as follows:

“Electrical worker grade 7

(a) An Electrical worker grade 7 is an Electrical worker grade 5 who:

(i) has successfully completed a Post Trade Certificate or nine appropriate modules towards an Advanced Certificate or AQF Diploma in Electrotechnology; or their equivalent; or

(ii) has successfully completed an AQF Certificate Level IV in Electrotechnology, or

(iii) has acquired the same standard of skills through other means including a minimum of two years’ experience in the industry; and

(iv) is employed to use the skills acquired through the training and/or experience specified.”

[14] As both the EW6 and EW7 classifications have as their starting point the EW5 classification it is appropriate to set out that classification:

“Electrical worker grade 5

(a) An Electrical worker grade 5 is employed to use the skills acquired through the training specified below and is an employee who:

(i) holds a trade certificate or tradesperson’s rights certificate, in an electrical trade; or

(ii) holds an AQF Certificate Level 3 in Electrotechnology in one of the following:


• systems electrician; or
• assembly and servicing; or

(iii) has successfully completed an appropriate trade course or who has otherwise reached an equivalent standard of skills and knowledge in communications/electronics; or

(iv) holds an AQF Certificate Level 3 in Electrotechnology in one of the following:


• building services;
• communications;
• computer systems;
• data communications;
• entertainment and servicing;
• scanning; or

(v) has successfully completed an appropriate instrumentation trade course; or an AQF Certificate Level 3 in Electrotechnology Instrumentation; or

(vi) holds an appropriate electrical/refrigeration/air-conditioning trade certificate; or an AQF Certificate Level 3 in Electrotechnology Refrigeration and Air-conditioning; or

(vii) has successfully completed an appropriate trade course in linework or cable jointing, or an AQF Certificate Level 3 in Transmission Powerline or ESI Distribution Powerline; or has otherwise reached an equivalent standard of skills and knowledge.”

[15] From the structure of the definitions of EW5, EW6 and EW7 it is clear that progression from EW5 to EW6 is dependent upon satisfaction of two criteria. The first criterion relates to the attainment of skills and is satisfied through one of three alternative means of acquiring the necessary skills. The second criterion relates to being employed to use those skills in employment.

The ETU’s case

[16] The ETU in its written submissions of 15 June 2017 identified the elements within the classification definition of EW6 on which it relied. The ETU then presented evidence which it contended satisfied the skills criterion for advancement to EW6. In its written submissions the ETU contended as follows:

“32. The ETU submits that the employees are appropriately classified at EW6 by the proper application of 2.6(a)(iii) and (iv) of Schedule 1 as follows:

a. the employees have acquired a standard of skills equivalent to at least 33% of the relevant grade 7 requirement, through other means (on-the job experience), for the purposes of 2.6(a)(iii). The relevant grade 7 requirement is an AQF Certificate Level IV in electrotechnology (theCertificate IV qualification) (see 2.7((a)(ii)); and

b. the employees have a minimum of one year's experience as EW grade 5 workers (for the purposes of 2.6(a)(iii)); and

c. the employees are employed to use the skills acquired through this training or experience (for the purpose of 2.6(a)(iv)).

33. For the purposes of 2.7(a)(ii), the most relevant Certificate IV qualification to the work performed by the employees, from the suite of recognized electrotechnology training packages, is the Certificate IV in Electrotechnology -Systems Electrician (UEE40611) (the Systems Electrician Qualification).

34. Mr Coburn has assessed each of the employees against the range of the Core Units and Elective units that fall within this training package for the Systems Electrician Qualification.

and

43…….. Mr Coburn has taken instruction from each of the employees as to what tasks they are, or have been, required to perform for Nilsen. He has then made an assessment as to whether or not the employees have performed work which meets the requirements of the relevant competency units from the Systems Electrician Qualification.

44. In doing this, Mr Coburn has identified practical examples of work performed by each employee which demonstrates application of the skills required for each competency unit. These examples are contained within the body of the Workplace Profile Reports.

and

48. Pursuant to the Workplace Profile Reports prepared by Mr Coburn, the following employees have been able to demonstrate, by providing practical examples of work performed, a standard of skills which is equivalent to more than 33% of the 440 points that are required for the Systems Electrician Qualification in addition their trade qualifications:

a. Alexander Benson;

b. Warwick Landy;

c. Aaron Marsh;

d. Luke Swan;

e. Daniel Vardy; and

f. Derik Wyntjes

49. We submit that, on the basis of Mr Coburn's Workplace Assessment Reports, each of these six employees are clearly entitled to be re-classified to the EW6 classification.”

[17] In relation to the two employees who were not found by Mr Coburn to be at the EW6 classification level the ETU contended that these two employees should also be reclassified to EW6 by using an alternative approach to assessing the skills of those two employees.

[18] The ETU led evidence from Mr Coburn to establish the validity of his findings in relation to each of the 8 employees if the information given to him by those employees was correct. The ETU led evidence from each of the 8 employees to establish that the information each gave to Mr Coburn was truthful and accurate and that each was employed to use the skills referred to in the assessment process.

Nilsen’s case

[19] Nilsen in its written submissions dated 7 July 2017 challenged the evidence of Mr Coburn in its entirety as well as the conclusions that the ETU seeks to draw from the evidence of the employees and Mr Coburn. In part Nilsen contends as follows:

“(iii) …..the Applicant says Mr Coburn “has identified practical examples of work performed by each employee which demonstrates application of the skills required for each competency unit”, satisfying in its mind clause 2.6(a)(i). These practical examples of work performed by each employee, even if true, are not evidence of the employees being “employed to use the skills acquired” in order to satisfy clause 2.6(iv). Mr Coburn misapplies the agreement.

(iv) Had the clause commenced with the words ‘Use the skills in the course of their employment acquired through the training and experience specified’, the Applicant’s case would have been assisted. However, these words are absent.

(v) The employees concerned are not “employed to use” either the competencies or standard of skills identified by Mr Coburn or in particular to work as Systems Electricians. It is illogical to suggest that an employer having agreed to a classification structure under an enterprise agreement is obliged to employ an electrician on the basis of qualifications and competencies not desired by it. Clause 2.6(a)(i) if read as advanced by the Applicant and Mr Coburn, would have perverse outcomes.

and

(vii) Mr Coburn’s findings to propel employees into the higher classification are in error.

(viii) Mr Coburn takes a quantum leap to reach his conclusion that 6 of the 8 employees by meeting the minimum competency level via a scattering of work examples are entitled to the EW6 classification, without any consideration of whether an alternative classification is a better fit or a consideration of the principles for interpreting and applying classifications. Mr Coburn’s conclusion is artificially narrow, and nonetheless extends it appears beyond his expertise in assessing employees’ skills for training purposes.

(ix) As Mr Coburn did not validate the examples, his findings fall at the first hurdle.

and

(xi) In the Respondent’s submission the above highlights the key difficulty in the Applicant’s complex approach to classification, which is its failure to recognise and identify the primary purpose of the job the employee is employed to do. Notwithstanding this failure, providing random and allegedly practical examples will not in any alternative submission by the Applicant be sufficient to establish the primary purpose. The Respondent says the meaning of clause 2.6(a)(iv) is clear.

(xii) It is not at issue whether the employees concerned have the pre-requisite or minimum qualifications or competencies (in part or otherwise), either at the direction of the employer or independently.

(xiii) The questions for resolution are simply,

Are the employees concerned required to be “employed to use the skills acquired through the training and experience specified” in order to be entitled to, in this case, the EW6 classification? AND

Is it sufficient to demonstrate via ‘practical examples’ that employees are employed to use the skills acquired through the training and experience specified in order to satisfy the requirements of the EW6 classification?

Consideration

[20] In para [15] above the Commission has set out the two criteria for progression from EW5 to EW6. The two questions proposed by Nilsen only address one of the criteria.

[21] Any discussion about whether an employee is employed to use the skills at the EW6 level can only occur if there is an understanding as to what skills the employee has which meet the skills requirements at the EW6 level.

Do the employees have the skills required for progression to EW6 level?

[22] The evidence of Mr Coburn was that 6 of the 8 employees had the skills required for progression to EW6 level. The process used by Mr Coburn was firstly to get the employees to fill in a questionnaire and then Mr Coburn interviewed each employee. Mr Coburn had the employees identify the tasks they had performed and Mr Coburn quizzed the employees on the work so as to enable Mr Coburn to identify the skills which the employee had used in the performance of work. 1 Mr Coburn provided the Commission with a detailed explanation of the type of quizzing he undertook with each employee.2 Once Mr Coburn had identified skills held by an employee he then identified the specific skill and the number of points to be allocated to that skill using the AQF framework. Mr Coburn then produced a report in relation to each employee.

[23] Under cross examination, Mr Coburn made a number of appropriate concessions in relation to his conclusions about the skills held by the employees. Firstly, Mr Coburn conceded that his conclusions related to the skills held by the employees and not to the classification of the employees. Secondly, Mr Coburn conceded that he had not validated his conclusions were through examining the actual work performed by the employees or through interviewing the supervisors/mangers of the employees. Validation was limited to the documentary proofs provided to Mr Coburn by the employees. Thirdly, Mr Coburn conceded that his conclusions were based on what he was told by the employees as to what they did and not on what they actually did in their work. Fourthly, Mr Coburn conceded that he was qualified to undertake a competency assessment but not a classification assessment.

[24] Under re-examination Mr Coburn maintained that if the information given to him by the employees was accurate then his conclusions as to the competencies held by the employees was accurate. 3

[25] Each of the 8 employees gave evidence in which each confirmed that the information they had given to Mr Coburn both in the questionnaire and at the interview in relation to what tasks they had performed at Nilsen was true and correct. Each employee confirmed that the information relating to these tasks as identified by Mr Coburn in his report was true and accurate. The amount of detail in Mr Coburn’s report as to the tasks performed by each employee was significant and the Commission had concerns that it may not be as accurate as the employees said. At random the Commission quizzed one of the employees, Mr Vardy about the use of a camera in his work and about other tasks. 4 The answers provided by Mr Vardy to the Commissions questions were given confidently and described in sufficient detail the use of a camera at work and other tasks that the Commission could conclude that Mr Vardy’s evidence was truthful in its entirety. At random the Commission also quizzed Mr Wyntjes about working with pyrotenax cables (mineral insulated metal sheathed cables).5 Mr Wyntjes gave clear evidence about working with pyrotenax cables so that the Commission could confidently draw the conclusion as to the truthfulness of the entirety of Mr Wyntjes evidence. Cross-examination of each of the employees did not give rise to any doubt that the evidence of each of the employees was truthful in relation to the tasks that they had performed whilst employed at Nilsen and that the information recorded by Mr Coburn accurately captured the tasks that they had performed.

[26] The essential weakness of Mr Coburn’s evidence is that the validity of the conclusions he has drawn in relation to the competencies held by the 8 employees is totally dependent upon the truthfulness of the information the employees gave him. Mr Coburn agreed with this proposition when put to him on two occasions:

PN1114 Ms Weber: When you have made a recommendation that an employee be put at EW6, can you just explain how you have come to that recommendation by reference to the classification definitions?---Mr Coburn: Based on my reports and the packaging rules of the training package for Certificate IV in Electrotechnology, in particular, the systems electrician stream, because there are a number of streams in the electrotechnology package.  I have identified the points which are contained within that national document, put them against the packaging rules, the packaging rules then have identified that the individuals, as per each of these individual reports, comes out at a points tally per core group A, group B, group C.  And then from that, I can determine whether they have met all or part of the Cert IV and the Cert IV requirements.  From the information contained in the reports, I have been able to determine, one, that they didn't meet the full Certificate IV, but they have met a percentage of the requirements towards a Cert IV.

PN1115 Ms Weber: Based on the information given to you by the employees and assuming that that information is accurate, for the six that you recommended be classified at EW6, you are satisfied that they have met 33 per cent of the Certificate IV?--- Mr Coburn: Or more.

PN1116 Ms Weber: You consider that assessment to be within the scope of your expertise?--- Mr Coburn: Yes.

PN1117 Ms Weber: Your expertise is in the - - -?--- Mr Coburn: The application of the training packages.

And

PN1154 Ms Weber: That's okay.  If the eight employees performed the tasks that they described and the information that was given to you, if all of that could be determined to be accurate, and bear in mind you have answered questions from Mr McIlroy that you don't know what they have said is accurate?---Mr Coburn: Mm-hm.

PN1155 Ms Weber: But if it could be determined that what they said was accurate, would your competency assessments stand?---Mr Coburn: Yes.

[27] As the Commission is satisfied that the information given to Mr Coburn by each of the 8 employees was accurate and truthful then the Commission can accept that the conclusions drawn by Mr Coburn in relation to each of the 8 employees is also accurate and truthful.

[28] The answer to the question: Do the employees have the skills required for progression to EW6 level? is ‘Yes’ in relation to each of Mr Benson, Mr Landy, Mr Marsh, Mr Swan, Mr Vardy and Mr Wyntjes and ‘No’ in relation to Mr McLean and Mr Pratt.

[29] Whilst the ETU relies on the evidence and approach adopted by Mr Coburn to argue for the reclassification of 6 of the 8 employees from EW5 to EW6, the NUW provides an alternative argument to justify the reclassification of Mr McLean and Mr Pratt where Mr Coburn had found that those two employees did not have the competencies for classification at the EW6 level. I am not persuaded by the alternative approach argued for by the NUW. Mr Coburn was led and cross examined on the basis of him being an expert witness. The Commission accepts his evidence which was that neither Mr McLean nor Mr Pratt had the necessary competencies for the EW6 classification.

Are the 6 employees who have the competencies for the EW6 level “employed to use the skills acquired through the training or experience specified?

[30] I now turn to the second question that needs to be answered: Are the 6 employees who have the competencies for the EW6 level “employed to use the skills acquired through the training or experience specified?.

[31] The Full Bench decision in AMWU v Berri P/L  6 set out the principles to be followed in interpreting the terms of an enterprise agreement as follows:

“[114] The principles relevant to the task of construing a single enterprise agreement may be summarised as follows:

1. The construction of an enterprise agreement, like that of a statute or contract, begins with a consideration of the ordinary meaning of the relevant words. The resolution of a disputed construction of an agreement will turn on the language of the agreement having regard to its context and purpose. Context might appear from:

(i) the text of the agreement viewed as a whole;

(ii) the disputed provision’s place and arrangement in the agreement;

(iii) the legislative context under which the agreement was made and in which it operates.

2. The task of interpreting an agreement does not involve rewriting the agreement to achieve what might be regarded as a fair or just outcome. The task is always one of interpreting the agreement produced by parties.

3. The common intention of the parties is sought to be identified objectively, that is by reference to that which a reasonable person would understand by the language the parties have used to express their agreement, without regard to the subjective intentions or expectations of the parties.

4. The fact that the instrument being construed is an enterprise agreement made pursuant to Part 2-4 of the FW Act is itself an important contextual consideration. It may be inferred that such agreements are intended to establish binding obligations.

5. The FW Act does not speak in terms of the ‘parties’ to enterprise agreements made pursuant to Part 2-4 agreements, rather it refers to the persons and organisations who are ‘covered by’ such agreements. Relevantly s.172(2)(a) provides that an employer may make an enterprise agreement ‘with the employees who are employed at the time the agreement is made and who will be covered by the agreement’. Section 182(1) provides that an agreement is ‘made’ if the employees to be covered by the agreement ‘have been asked to approve the agreement and a majority of those employees who cast a valid vote approve the agreement’. This is so because an enterprise agreement is ‘made’ when a majority of the employees asked to approve the agreement cast a valid vote to approve the agreement.

6. Enterprise agreements are not instruments to which the Acts Interpretation Act 1901 (Cth) applies, however the modes of textual analysis developed in the general law may assist in the interpretation of enterprise agreements. An overly technical approach to interpretation should be avoided and consequently some general principles of statutory construction may have less force in the context of construing an enterprise agreement.

7. In construing an enterprise agreement it is first necessary to determine whether an agreement has a plain meaning or it is ambiguous or susceptible of more than one meaning.

8. Regard may be had to evidence of surrounding circumstances to assist in determining whether an ambiguity exists.

9. If the agreement has a plain meaning, evidence of the surrounding circumstances will not be admitted to contradict the plain language of the agreement.

10. If the language of the agreement is ambiguous or susceptible of more than one meaning then evidence of the surrounding circumstance will be admissible to aide the interpretation of the agreement.

11. The admissibility of evidence of the surrounding circumstances is limited to evidence tending to establish objective background facts which were known to both parties which inform and the subject matter of the agreement. Evidence of such objective facts is to be distinguished from evidence of the subjective intentions of the parties, such as statements and actions of the parties which are reflective of their actual intentions and expectations.

12. Evidence of objective background facts will include:

(i) evidence of prior negotiations to the extent that the negotiations tend to establish objective background facts known to all parties and the subject matter of the agreement;

(ii) notorious facts of which knowledge is to be presumed; and

(iii) evidence of matters in common contemplation and constituting a common assumption.

13. The diversity of interests involved in the negotiation and making of enterprise agreements (see point 4 above) warrants the adoption of a cautious approach to the admission and reliance upon the evidence of prior negotiations and the positions advanced during the negotiation process. Evidence as to what the employees covered by the agreement were told (either during the course of the negotiations or pursuant to s.180(5) of the FW Act) may be of more assistance than evidence of the bargaining positions taken by the employer or a bargaining representative during the negotiation of the agreement.

14. Admissible extrinsic material may be used to aid the interpretation of a provision in an enterprise agreement with a disputed meaning, but it cannot be used to disregard or rewrite the provision in order to give effect to an externally derived conception of what the parties’ intention or purpose was.

15. In the industrial context it has been accepted that, in some circumstances, subsequent conduct may be relevant to the interpretation of an industrial instrument. But such post-agreement conduct must be such as to show that there has been a meeting of minds, a consensus. Post-agreement conduct which amounts to little more than the absence of a complaint or common inadvertence is insufficient to establish a common understanding.”

[32] I approach the task of discerning the meaning of Schedule 1 of the Agreement having regard to the decision in AMWU v Berri P/L.

[33] An important context in interpreting any classification description in an enterprise agreement is to have regard to the overall structure of the Agreement.

[34] The Agreement does not incorporate any term from any modern award. The relevant modern award that would cover the employees if the Agreement was not in operation is the Electrical, Electronic and Communications Contracting Award 2010 (the Award) and it is from that award that the classification definitions in Schedule 1 of the Agreement were drawn. Clause 1 of Schedule 1 of the Agreement is in the same terms as clause B.1.1 of Schedule B of the Award. Clause 1 of Schedule 1 of the Agreement provides as follows:

1. Classification/reclassification

1.1 In order to assist in the classification or reclassification of employees, the following will apply:

(a) where the employee has the relevant qualification recognised as a minimum training requirement for the level at which the employee seeks to be classified; and

(b) the employee is exercising or will be required to exercise the skills and knowledge gained from the qualification necessary for that level of work;

(c) the employee must be classified appropriately.

[35] The language of clause 1 of Schedule 1 of the Agreement is unambiguous in its meaning. It is constructed as a very simple “if this, then that” clause. The “if this” has two parts which are identified as an employee who “has the relevant qualification” and “is exercising or will be required to exercise the skills and knowledge gained from the qualification”. The “then that” is that such an employee “must be classified appropriately”. The second part of the “if this” test is expressed differently to the wording used in clause 2.6(a)(iv) of Schedule 1 of the Agreement. The two sets of words are:

Clause 1.1(b) – the employee is exercising or will be required to exercise the skills and knowledge gained from the qualification necessary for that level of work

Clause 2.6(a)(iv) - is employed to use the skills acquired through the training or experience specified.

[36] It is clear from the structure of Schedule 1 of the Agreement that clause 1 of Schedule 1 provides a very strong mandatory direction in relation to the application of the classification definitions. Where there is a difference in the language used in clauses 1.1(b) and 2.6(a)(iv) of Schedule 1 of the Agreement to describe the requirement to perform work which requires a certain skill level to be exercised, clause 2.6(a)(iv) of Schedule 1 of the Agreement must give way to clause 1.1(b) of Schedule 1 of the Agreement. Nilsen contend that clause 2.6(a)(iv) must be understood as meaning that the employee is “primarily employed to use the skills acquired” and that the classification structure has to be applied on the basis of classifying an employee in accordance with “the primary purpose of the job the employee is employed to do”. Nilsen also contended as follows:

“Had the clause commenced with the words ‘Use the skills in the course of their employment acquired through the training and experience specified’, the Applicant’s case would have been assisted. However, these words are absent.”

[37] The difficulty with the contentions of Nilsen is that they do not consider the language of clause 2.6(a)(iv) in the context of the language of clause 1.1(b) of Schedule 1 of the Agreement. The primary purpose approach of Nilsen is not consistent with the wording of clause 1.1(b) of Schedule 1 of the Agreement. The primary purpose approach of Nilsen causes clause 2.6(a)(iv) to be in real conflict with the language and purpose of clause 1.1(a) of Schedule 1 of the Agreement.

[38] Both clause 1.1(b) and clause 2.6(a)(iv) of Schedule 1 of the Agreement are in harmony with each other. Clause 1.1(b) refers to “the employee is exercising or will be required to exercise the skills and knowledge gained from the qualification necessary for that level of work” because the clause has application in relation to each and every classification level and thus applies equally to all employees covered by the Agreement. Clause 2.6(a)(iv) refers to an Electrical worker grade 5 who “is employed to use the skills acquired through the training or experience specified” because it is referring to a specific classification. There is no conflict between clause 1.1(b) and clause 2.6(a)(iv) of Schedule 1 of the Agreement if both are read as referring to an employee who is using or exercising or will be required to use or exercise the relevant skills as part of that employees employment with Nilsen.

[39] There is another contextual issue which is relevant to understanding the meaning of clauses 1.1(b) and 2.6(a)(iv) of Schedule 1 of the Agreement and that is that the wording and structure of Schedule 1 of the Agreement was determined by a Full Bench of the Commission as part of the process of the making of the Award in 2009. The Award has been subject to review by a Full Bench of the Commission under both the 2 and 4 yearly reviews of modern awards and the wording and structure of Schedule 1 of the Agreement has not changed (including the obvious error in clause B2.6 discussed above). The same Full Bench of the Commission which made the Award also made the Manufacturing and Associated Industries and Occupations Award 2010 (the Manufacturing Award) and a comparison between the Award and the Manufacturing Award is helpful in understanding the very different approaches adopted by the Full Bench in making those two moderns awards. The Manufacturing Award does not have a classification Schedule similar to the Award. Relevantly, there is no equivalent to clause 1.1 of Schedule 1 of the Agreement in the Manufacturing Award. It is also relevant to note that the Manufacturing Awardcontains a Higher Duties term at clause 24.2 which permits an employer to have an employee work at a higher classification level without a requirement for the employer to reclassify the employee at the higher level, but which requires an employer to pay an employee at a higher classification level when the employee works at that higher level. No such higher duties term is in the Award. The very different approaches to progression through classifications as between the Award and the Manufacturing Award lends strong support for reading clause 1.1 of Schedule 1 of the Agreement as having an “if this, then that” operation.

[40] The evidence of all 8 of the employees has been that in the course of their employment with Nilsen that they have performed a range of tasks which they related to Mr Coburn and which in relation to which Mr Coburn identified that the employees used identified competencies in the performance of the tasks.

[41] A significant objection raised by Nilsen in relation to the reclassification of the employees to EW6 is that Nilsen do not require the 8 employees to work at the EW6 level because Nilsen employs a number of employees at the EW6 level. 7 Nilsen also object to the reclassification claim on the basis that the task which the employees identified to Mr Coburn included a number of “one off” tasks which do not form part of the usual work of the employees.8 Nilsen also object to the reclassification on the basis that the employees are already being paid an appropriate wage for their work and are paid at a higher rate than Nilsen’s competitors which already makes Nilsen uncompetitive in tendering for and securing work. Nilsen oppose the findings made by Mr Coburn on the basis that many of the competencies identified as being held by an employee simply reflect competencies that an employee would have learnt through their apprenticeship.9

[42] Nilsen led evidence from Mr Mathew O’Sullivan, Engineering Service Division Manager, Victoria to support its position. Whilst Mr O’Sullivan does not act as the direct supervisor of any of the 8 employees he does manage their work and manages the allocation of work to each of them. Mr O’Sullivan’s evidence was very clear that he knew the tasks that employees performed. The evidence of Mr O’Sullivan makes very clear that he and Nilsen have a very real level of control over what work is allocated to the 8 employees. What Mr O’Sullivan’s evidence discloses is that he does not understand the way in which Schedule 1 of the Agreement operates.

[43] Clause 1.1 of Schedule 1 of the Agreement does not have an exemption for “one offs”. Rather clause 1.1 operates by looking at whether the employee is exercising or will be required to exercise the skills and knowledge gained from the qualification. This is not a test as to the frequency of exercising the skills but rather is concerned with the fact of the exercise of the skills. What skills need to be exercised for a particular task have been identified by Mr Coburn through his interviews with the employees. There is nothing in the evidence before the Commission which would support a conclusion that the employees had not in the normal performance of the tasks allocated to them by Nilsen exercised the competencies that Mr Coburn had identified. In other words it is the tasks allocated by Nilsen to its employees which have required the employees to exercise the competencies that Mr Coburn has identified in relation to those tasks.

[44] Whilst the issue in this dispute is a claim for reclassification the central issue is that the claim for reclassification if successful would result in the employees receiving a higher wage and would increase the costs for Nilsen. Simply because Mr O’Sullivan and Nilsen are of the view that the employees are adequately remunerated is irrelevant for the purposes of considering the application and operation of Schedule 1 of the Agreement. This must be the case because the actual wage rates for each and every classification within Schedule 1 of the Agreement has been determined by the bargaining parties for the Agreement and has been accepted by the employees who made the Agreement with Nilsen. The wage rates apply to each classification as set by the Agreement. Whether an employee is entitled to a classification is not determined by the current wage rate paid to the employee and whether this is more or less or the same as might be paid for a similarly classified employee employed by a competitor to Nilsen. Rather the entitlement for an employee of Nilsen to be reclassified to any particular classification is dependent upon whether the employee meets the criteria set out in clause 1.1 of Schedule 1 of the Agreement which in return requires satisfaction of the detailed classification definition within Schedule 1 of the Agreement.

[45] The answer to the question: Are the 6 employees who have the competencies for the EW6 level “employed to use the skills acquired through the training or experience specified? must be Yes.

[46] Answering both of the relevant “if this” questions in the affirmative leads to the “then that” outcome that each of the 6 employees had to be reclassified to the EW6 classification level.

[47] In this matter the ETU seeks not only the reclassification of the employees to EW6 classification level but also back pay. In its Outline of Opening submissions filed on 15 June 2017 the ETU sought the following:

67. In these circumstances, for the purposes of back-pay, we submit that the employees are entitled to back pay from the commencement of their employment with the exception of Mr Vardy who is entitled to back-pay from the first anniversary of the commencement of his employment with Nilsen (March 2015).

68. In the alternative, we submit that each of the employees are entitled to backpay to the EW6 classification on and from the first anniversary of their employment with Nilsen.

[48] The ETU revised its position at the hearing and in concluding submissions the ETU conceded that if the Commission was to find that the employees should be reclassified to EW6 then any enforcement of that decision and any back-pay issues would need to be pursued before an appropriate court.

[49] The Commission is satisfied that on the evidence before the Commission that 6 of the 8 employees should be reclassified to EW6 level.

[50] Having said that there are two issues which cannot be determined by the Commission. The first is the issue of back-pay. There is nothing before the Commission which would have permitted the Commission to determine that any of the 6 employees had met the requirements for reclassification to EW6 at any specific point of time prior to the report issued by Mr Coburn. The second issue is that a finding that each of the 6 employees should have, consistent with the requirements of Schedule 1 of the Agreement, been reclassified to EW6 does not mean that any of the 6 employees have a continuing entitlement to remain at the EW6 classification level. The very fact that Schedule 1 operates on the “if this, then that” basis, means that it is possible for an existing EW6 employee to be reclassified back to EW5 if the employee fails to meet the two parts of the “if this” test. It is possible at any time for Nilsen to direct an employee who has a skill or competency relevant for a claim for classification at EW6, not to use or exercise that skill. This may mean that the employee could fail to meet the “if this” part of the test. The detail in Mr Coburn’s reports on each of the 8 employees makes it very easy to identify the competencies which Mr Coburn attached to different tasks. It is then easy for Nilsen to identify the type of tasks that an employee must not perform and in doing so the employee would lose the ability to claim the competencies for the purpose of clause 1.1(b) or clause 2.6(a)(iv) of Schedule 1 of the Agreement.

COMMISSIONER

 1   Transcript at PN 650 and 652.

 2   Ibid at PN753 – PN754.

 3   Transcript at PN1114 – PN1117.

 4   Ibid at PN2625 – PN2679.

 5   Ibid at PN2868 – PN2887.

 6   [2017] FWCFB 3003.

 7   Ibid at PN3264.

 8   Ibid at PN3128 – PN3129.

 9   For an example of this see Transcript at PN3216.

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