Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Silcar Pty Ltd
[2011] FWA 8392
•2 DECEMBER 2011
[2011] FWA 8392 |
|
DECISION |
Fair Work Act 2009
s.739—Dispute resolution
Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia
v
Silcar Pty Ltd
(C2011/6193)
VICE PRESIDENT LAWLER | MELBOURNE, 2 DECEMBER 2011 |
Dispute in relation to employer’s decision to move from a 12 hours shift roster to an eight hour shift roster - whether that change required the agreement of the affected employees on the proper construction of the particular enterprise agreement.
[1] This is an application for Fair Work Australia (FWA) to deal with a dispute referred to it pursuant to the dispute resolution procedure in the Silcar Telecommunications Enterprise Agreement 2009 1 (2009 Agreement) and s.739 of the Fair Work Act 2009 (FW Act).
Background
[2] The factual submissions made by the Respondent (Silcar) were not challenged. Most of the following background is drawn from those submissions.
[3] Silcar provides national telepower facilities management and maintenance services to Telstra’s network Critical Infrastructure and has done so since approximately 2000. Prior to December 2010 the services were provided by a joint venture that comprised Silcar and Transfield. In December 2010 Silcar commenced a five year contract with Telstra to provide operation and maintenance and facilities management services known as the Network Integrity and Facilities Management (NIFM) operation. The Silcar Alarm Management Centre (AMC) in relation to which this dispute arises is an operations function within NIFM. The AMC is characterised as one of Telstra’s technology groups and is embedded in Telstra’s Global Operations Centre (GOC). The GOC has a very large room, reminiscent of a NASA control room, with large screens on the walls and rows of workers sitting at computers. About one quarter of the workers in the GOC are employees of Silcar. It is necessary for Telstra employees who are monitoring and operating Telstra’s communications network to have a close working relationship with Silcar’s employees to ensure that any power problems at Telstra exchanges, mobile phone towers or the like are addressed expeditiously.
[4] As part of its ongoing contractual obligation to Telstra the Respondent has committed to ongoing operational review and the delivery of cost savings. That incorporates the Respondent’s obligation to pursue and maintain continuous improvement with respect to the performance and sustainability of Telstra’s plant, assets and Critical Infrastructure. Critical Infrastructure refers to the assets and supporting systems that deliver information and communication technology.
[5] Silcar delivers a sophisticated service to metropolitan, regional and remote sites through a workforce of skilled field technicians, contractors and control centres that operate 24 hours per day 365 days per year. The AMC, one of those control centres, manages and coordinates emergency response to power and facilities impacting essential telecommunications services. A specific accountability of the AMC is command and control (in collaboration with Telstra) of emergency response.
[6] As part of a continuous improvement policy, Silcar conducts reviews at regular intervals and also following major incidents to consider learning outcomes and improve mass disruption responses. The general review of AMC operations commenced in late May 2011. This review took place after separate reviews of two major incidents at Morwell in the State of Victoria in June 2011 and as a result of the impact of Cyclone Yasi in Queensland in February and March 2011. An identified area for improvement as a result of the major incident reviews was the effectiveness and level of communication between Silcar’s and Telstra’s employees within the GOC.
[7] As a result of that review, in August 2011 Silcar made a number of decisions for the purposes of improving the delivery of its services. They included a decision to change from a 12 hour shift roster pattern to an 8 hour shift roster pattern at the AMC. Silcar has advanced a number of reasons for that decision. It is common ground that is a major change and that Silcar has complied with its consultation obligations under clause 33 of the 2009 Agreement.
[8] Telstra staff at the GOC work an 8 hour shift pattern. Silcar contends that its staff participating in and supporting the surveillance cell are best to work an 8 hour shift pattern so that as much as possible effective collaboration is enabled without breaks in command, control and communication of events. Silcar also contends that it also reduces unnecessary duplication of information and the potential for misinformation where different staff members from Silcar are present at different times during the collaboration processes.
[9] A 12-hour roster pattern has been in effect for Silcar’s employees at the AMC since Silcar began servicing the AMC in 2000.
[10] The first workers to work on Silcar’s contract at the AMC in 2000 were provided by a labour hire company. An example of the letter of offer issued by the labour hire company identifies the worker’s “standard hours” as “12 hour shifts on a rotating Roster over 7 days, weekend and night shifts are compulsory.”
[11] An example of the apparently standard letter of offer subsequently used by Silcar when it had made the 2000 Agreement and began employing workers directly has the following in relation to “Hours”:
“The [2000 Agreement] (attached) contains provision for both day work and shift work. The [AMC] operates 24 hours, 7 days per week and this position will involve shift work in accordance with the provisions of the Agreement. A shift penalty averaging system applies to shift work in the [AMC].
The Agreement contains provision that allows flexibility in working arrangements by consultation and agreement - clause 4.”
[12] The CEPU objects to the change from 12 hours rosters to 8 hour rosters contending that, on the proper construction of the 2009 Agreement, Silcar is prevented by clause 4 of the 2009 Agreement from making the proposed roster pattern change without the agreement from the affected employees.
[13] It will be noted that this is a construction issue. I note that employees represented by the CEPU contest the conclusions of the review and the cogency of the reasons said by Silcar to justify its decision to change from 12 hours shifts to 8 hour shifts in order to align the shifts of Silcar’s AMC employees with the shifts of the Telstra employees in the GOC. However, the cogency or reasonableness of Silcar’s decision to move its employees to 8 hour shifts that align with the shifts of Telstra’s employees is not a relevant to a consideration on the construction issue.
Relevant provisions of the 2009 Agreement
[14] In this case, the CEPU relies on clause 4 of the 2009 Agreement:
“4. FACILITATIVE MECHANISM
The intention of this Agreement is to establish a broad level of flexibility to meet the needs of the Client and customers of the Company. To achieve this it is recognised that alternative working arrangements may be needed to suit the operational circumstances of the work area.
To this end the provisions of this agreement, in relation to the method of working hours and associated matters, may be varied through consultation and the agreement of employees affected by such variation.
Field employees may consult with managers to arrange daily hours to accrue an additional day off each month. This will be arranged so as not to impact on productivity or fault response arrangements and timeliness.”
[15] Silcar relies upon clause 16(j) and submits that it is entitled by that specific provision of the 2009 Agreement to vary shift rosters on the giving of the required notice. It is convenient to set out clauses 15 and 16 of the 2009 Agreement.
“15. HOURS OF WORK
(i) Ordinary Hours of Work
(a) Hours per Week – The ordinary hours of work shall be 38 hours per week.
(b) Ordinary Hours – The ordinary hours of work shall fall between 6am-6pm, Monday to Friday. Employees shall be entitled to a meal break of no less than 30 minutes after no more than 5 hours work. These arrangements may be varied with the agreement of the employee, in accordance with Clause 4 or in an emergency situation where an employee may work up to six hours before taking a meal break.
(c) Daily Commencement & Completion Times – Daily commencement and completion times shall be subject to the work area requirements and fall within the Daily Span of Hours as detailed above, or in accordance with Clause 4.
(d) Rostered Days Off (RDO’s) – Subject to any alternative arrangement in accordance with Clause 4, employees shall be entitled to rostered days off on the basis of one rostered day off during each four (4) week cycle. To avoid doubt, where projects require an alternative method of implementing the 38 hour week, and this is agreed and applied by the parties in accordance with Clause 4, rostered days off may not apply, or may apply on a different basis. Rostered days off will normally be staggered through out the month, by arrangement with Management. RDO’s can be banked up to a maximum of six (6), and taken at an agreed time in line with business needs. By agreement, banked RDO’s can be paid-out at ordinary time in lieu of being taken. RDO’s accumulated beyond the maximum of six (6) will be paid out in the last pay cycle of each calendar year.
(ii) Overtime
For the purposes of this Agreement, overtime and/or penalties will be deemed to occur and be payable only under the following circumstances:
(a) Where work is undertaken outside the ordinary hours as detailed at subclause 15(i)(b) or in excess of 38 hours per week, this work shall be considered overtime. By agreement of the employee in accordance with clause 4, the ordinary hours of work may be varied and/or the hours per week averaged over an agreed number of weeks.
Overtime in this circumstance will be paid for at one and one-half (1.5) times the applicable base rate for the first three (3) hours and at two (2) times the applicable base rate thereafter.
Where the employee is a shift worker and overtime falls on any part of a weekend, overtime will be paid at two (2) times the base rate.
(b) Sunday work – Where an employee is required to work on a Sunday, that employee will be paid at the rate of double time (2) times the base rate for all time worked.
(c) Public Holidays– Where an employee is required to work on a Public Holiday, that employee will be paid at the rate of double time and one-half (2.5) times the base rate for all time worked. Any employee required to work on a Public Holiday will be entitled to a minimum payment of four (4) hours at the appropriate rate. The parties acknowledge and agree that the business, customer and operational requirements and emergency or other unforeseen circumstances may require an employee or employees to work on public holidays.
(d) By agreement of the employee in accordance with Clause 4, time off in lieu may be substituted for overtime payment, within the bounds of rules to be established and agreed between the Company and the employees.
(e) Meal Allowance – An employee required to work overtime after ordinary hours, for more than one and a half hours (1.5) hours, without being notified on the previous day or earlier of the requirement to work overtime will be paid a meal allowance of $20.09 (linked to further base rate adjustments) and again after subsequent 4 hours overtime.
An employee required to work overtime or recall on a weekend without being notified on the previous day or earlier will be paid a meal allowance of $20.09, after 4 hours have been worked.
16. SHIFT ARRANGEMENTS
(a) An employee who is rostered to perform and performs ordinary duty on a shift, any part of which falls between the hours of 6:00pm and 6:00am shall be paid an additional 15% of their salary for that shift.
(b) Where an employee is required to work their ordinary hours continuously for a period exceeding four weeks on a shift falling wholly within the hours of 6:00pm and 8:00am, they shall be paid with respect to that shift an additional 35% of their base rate for that shift.
(c) The additional payment prescribed by this Clause shall not be taken into account in the computation of overtime or in the determination of any allowance based upon pay, nor shall it be paid with respect to any shift for which any other form of penalty payment is made under this agreement.
(d) Where and employee works a shift the major proportion of which is performed on a Saturday, the rate of payment for that shift will be time and a half (1.5 times) their base hourly rate.
(e) Where an employee works a shift the major proportion of which is performed on a Sunday, the rate of payment for that shift will be double time (2.0 times) their base hourly rate.
(f) Where an employee works a shift, the major proportion of which is performed on a Public Holiday, the rate of payment for that shift will be double time and a half (2.5 times) their base hourly rate.
(g) When taking annual leave an employee will be paid the greater of the amounts prescribed in Clause 25(c) or the payment for ordinary duty which an employee would have performed had they not been on annual leave.
(h) Weekly hours of Duty will be averaged over the cycle of the shift roster.
(i) An employee, who is rostered to perform and performs ordinary duty on a 12.5 hour shift rotation, shall be paid an additional 30% of their base rate for that shift.
(j) An employee will be given 5 days (120 hours) notice of variation to a shift roster. Where 5 days notice is not given by management, the employee will be paid at overtime rates (including higher duties allowance) for those hours of the shift that differ from the originally rostered shift. The overtime rates will continue until 5 days notice has been given.
...”
(underline emphasis added)
[16] It will be noted that several of the sub-clauses in clause 15 expressly invoke the “facilitative mechanism” in clause 4. Such an invocation of clause 4 also occurs within in clause 30 (Public Holidays). Sub-clause 30.5 provides:
“30.5 By agreement between the Company and employees in accordance with the procedure set out in Clause 4, other days may be substituted for any of the public holidays provided for by this Clause 30.”
(underline emphasis added)
The dispute
[17] Following the review, Silcar has decided to move from a 12 hour shift roster to an 8 hour shift roster. It has consulted with employees pursuant to clause 33 of the 2009 Agreement in relation that decision. The employees, through the applicant (CEPU), object to the change and contend that such a change can only occur in accordance with clause 4 of the 2009 Agreement and, as such, requires the agreement of affected employees, which agreement has not been secured. Silcar’s position is that on the proper construction of the 2009 Agreement, having discharged its consultation obligations in accordance with clause 33, it is free to implement the decided roster change only upon the giving of notice in accordance with clause 16(j) of the 2009 Agreement.
[18] My task in arbitrating the present dispute is to determine which of these competing positions is correct. This turns on the proper construction of the 2009 Agreement.
[19] The CEPU’s dispute notification does not assert or contend that the decision to move from 12 hour shifts to 8 hour shifts is unreasonable or unjust such that it could be challenged pursuant to the principle in Australian Federated Union of Locomotive Enginemen v State Rail Authority of New South Wales 2(XPT case), namely that a tribunal like Fair Work Australia should not interfere with the right of an employer to manage its own business unless it is seeking from employees something which is unjust or unreasonable. Rather, the CEPU has relied solely upon clause 4 as the basis for contending that Silcar cannot implement its decision to move to 8 hours shifts unless and until there is consent from the affected employees. The CEPU called no evidence to challenge Silcar’s business reasons for its decision. In those circumstances there is no question of interfering in Silcar’s decision on the basis of the principle in the XPT Case.
Relevant principles of construction
[20] The main principles governing the construction of industrial agreements are summarised in Watson v ACT Department of Disability, Housing and Community Services 3 and need not be repeated here. It is useful to add reference to Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd4 where the High Court said:
“It is not the subjective beliefs or understandings of the parties about their rights and liabilities that govern their contractual relations. What matters is what each party by words and conduct would have led a reasonable person in the position of the other party to believe. References to the common intention of the parties to a contract are to be understood as referring to what a reasonable person would understand by the language in which the parties have expressed their agreement. The meaning of the terms of a contractual document is to be determined by what a reasonable person would have understood them to mean. That, normally, requires consideration not only of the text, but also of the surrounding circumstances known to the parties, and the purpose and object of the transaction.”
[21] Further, in determining the objective meaning of words employed in a contract, a court is concerned to ascertain “the meaning which the document would convey to a reasonable person having all the background knowledge which would reasonably have been available to the parties in the situation in which they were at the time of the contract.” 5
[22] In Carr v Blade Repairs Australia Pty Ltd (No 2) 6 Tracey J noted:
“The same principles which govern the construction of commercial contracts have application to contracts of employment: see Riverwood International Australia Pty Ltd v McCormick (2000) 177 ALR 193 at 204–5 (per Lindgren J), and 217 (per Mansfield J). Commercial contracts should, as Kirby J held in Pan Foods Company Importers and Distributors Pty Ltd v Australia and New Zealand Banking Group Ltd (2000) 170 ALR 579 at 584, “be construed practically, so as to give effect to their presumed commercial purposes and so as not to defeat the achievement of such purposes by an excessively narrow and artificially restricted construction.” An interpretation which accords with a broad approach will be preferred to one which does not: see Upper Hunter County District Council v Australian Chilling and Freezing Company Ltd (1968) 118 CLR 429 at 437.”
[23] This practical approach accords with the established approach to the construction of industrial agreements laid down in cases such as Kucks v CSR Ltd 7 and Short v FW Hercus Pty Ltd8. I adopt that approach.
Consideration
[24] The CEPU urged a construction of clause 4 that gave it a dominant operation in accordance with the natural meaning of its words. In summary, the CEPU contended that the parties objectively intended clause 4 to qualify the operation of all other terms of the 2009 Agreement “in relation to the method of working hours and associated matters”. The CEPU submits that clause 16(j) of the 2009 Agreement should be read down to apply only to variations within an existing roster pattern (for example, moving an employee to a different roster line within the existing roster pattern). The CEPU noted that on this construction clause 16(j) would still have work to do.
[25] Silcar contends that clause 16(j) of the 2009 Agreement has a boarder operation and extends to variation to shift patterns including shift lengths. It submits clause 4 does not qualify the power conferred by clause 16(j). It submits that clause 4 would still have work to do if such a construction of clause 16 were adopted because, on its proper construction, clause 4 merely provides a mechanism that can be invoked by referencing clause 4 in a relevant provision in the agreement and takes precedence when that occurs.
[26] There is no dispute that resort may properly be had to extrinsic materials to resolve this construction issue. No extrinsic evidence was led beyond uncontested facts as to when Silcar commenced performing work at the global control centre and the succession of agreements and the fact that 12 hour shifts had been worked since Silcar commenced work at the global control centre until the recent indication given by Silcar.
[27] The 2009 Agreement is the latest in a series of agreements covering Silcar’s employees at the AMC. The predecessor agreement are:
• Silcar Telecommunications Enterprise Agreement 2006 9(2006 Agreement)
• Silcar Telecommunications Enterprise Agreement 2003 10(2003 Agreement)
• Silcar Telecommunications Enterprise Agreement 2000 11(2000 Agreement)
[28] Clause 4 as it appears in the 2009 Agreement appeared in identical terms as clause 4 in each of the 2006 Agreement and the 2003 Agreement. Clause 4 in the 2000 Agreement was in the following terms:
“The intention of this Agreement is to establish a broad level of flexibility to meet the needs of the Client and customers of the Company. To achieve this it is recognised that alternative working arrangements may be needed to suit the operational circumstances of the work area.
To this end the provisions of this agreement, in relation to the method of working hours and associated matters, may be varied through consultation and the agreement of employees affected by such variation.”
[29] The remainder of the current provision was first included in the 2003 Agreement as; “Field employees may consult with managers to arrange daily hours to accrue an additional day off each month. This will be arranged to as not to impact on productivity or fault response arrangements and timeliness.”
[30] The 2000 Agreement references clause 4 at clauses 11 (Other Conditions of the Contract of Employment) and at three places in clause 14 (Hours of Work): namely, at paragraphs (b), (c) and (d) of sub-clause 14(i). The 2003 Agreement references clause 4 at the same clauses as the 2000 Agreement but also references clause 4 at paragraphs (a) and (d) of sub-clause 14(ii). The 2006 Agreement references clause 4 on the same basis as the 2003 Agreement but with an additional reference introduced in sub-clause 28.5 of clause 28 (Public Holidays). With one exception, the 2009 Agreement references clause 4 on the same basis as the 2006 Agreement (save that Hours of Work is dealt with in clause 15 of the 2009 Agreement rather than clause 14 as in the 2006 Agreement). The exception is that the reference to clause 4 in clause 11 of the 2006 Agreement has been removed in the equivalent clause in the 2009 Agreement. Clause 11 of the 2006 Agreement provides:
“11. OTHER CONDITIONS OF THE CONTRACT OF EMPLOYMENT
It is a condition of employment that all employees adhere to the Company’s Health, Safety and Environmental, Equal Opportunity and Sexual Harassment Policies and other relevant Company Policies and Procedures as varied from time to time, and attend any training or education sessions provided regarding such Policies and Procedures,
Training will be organised wherever possible during ordinary hours or work. Where this is not a practicable overtime will be paid at the appropriate rate or in accordance with Clause 4.”
[31] It will be noted that this reference to clause 4 is in relation to payment for overtime in connection with training that Silcar requires employees to undertake. The 2009 Agreement deals with that topic in clause 13 which relevantly provides:
“13. Training
...
In the event that Silcar provides training for employees, such training shall, wherever possible and subject to operational requirements, be provided during the employee's normal working hours.
In the event that training occurs outside of normal hours this will be discussed with the employee and paid at single time or be taken as time in lieu as agreed between the employee and Management.”
[32] Clause 11 of the 2009 Agreement provides:
“11. OTHER CONDITIONS OF THE CONTRACT OF EMPLOYMENT
It is a condition of employment that all employees adhere to the Company’s Health, Safety and Environmental, Equal Opportunity and Sexual Harassment Policies and other relevant Company Policies and Procedures as varied from time to time, and attend any training or education sessions provided regarding such Policies and Procedures.
Details of relevant Company policies and procedures will be provided during the induction process.”
[33] In the 2009 Agreement, the terms of clause 16(a), when compared with the terms of clause 15(i)(b), suggest that clause 15 is intended to specify the “hours of work” arrangements in relation to day workers whereas clause 16 is concerned to specify the “hours of work” arrangements for shift workers. Clause 16(a) clearly contemplates that an employee may be employed and rostered to work their ordinary hours on a shift the whole or part of which falls outside the span of hours specified in clause 15(b).
[34] I accept that the subject matter and content of clause 16(j) of the 2009 Agreement bring it within the category of provisions described by the ordinary meaning of the expression “provisions of this agreement, in relation to the method of working hours and associated matters” in clause 4 of the 2009 Agreement: a provision like clause 16 is a provision “in relation to the method of work hours” by shift work.
[35] Clause 16 of the 2009 Agreement is expressed in a way that is familiar to the tribunal. Although clause 16(j) does not explicitly refer to roster patterns or shift lengths, the expression “variation to a shift roster” is apt on its ordinary meaning to extend to any variation to a shift roster including a variation to the shift lengths and the shift roster pattern. If it was intended that employees could only be rostered in accordance with the pre-existing roster pattern subject to the clause 4 mechanism it would have been a simple matter for the parties to specify this, just as they have in a range of other clauses.
[36] I can seen no warrant for construing the expression “variation to a shift roster” in clause 16(j) in the narrow fashion urged by the CEPU. Even if clause 16(j) is given that narrow reading, changes authorised by clause 16(j) on that narrow reading would still fall within the scope of the expression “provisions of this agreement, in relation to the method of working hours and associated matters” in clause 4 and thus subject to clause 4. On the CEPU’s construction of clause 4 of the 2009 Agreement there is no need for the parties to invoke the clause 4 mechanism in other clauses of the agreement that fall within the scope of that expression. And yet that is what the parties have done in the 2009 Agreement and its predecessors, altering the invocation of that mechanism in apparently considered ways between successive agreements.
[37] Clause 4 is entitled “facilitative mechanism”. The way in which clause 4 has been referenced in the successive agreements and, in particular, the fact that the parties have added and removed references to the clause 4 mechanism in successive agreements, suggests that, objectively determined, clause 4 in the 2009 Agreement was intended by the parties to operate as a “mechanism”, specified once for ease of reference, that could be called up by reference wherever the parties thought appropriate in other specific clauses “in relation to the method of working hours and associated matters” in each of the successive agreements.
[38] Moreover, Silcar correctly identifies in paragraph 17 of its written submissions a number of clauses of the 2009 Agreement that are rendered redundant (in whole or in material part) if the CEPU’s construction of clause 4 were adopted.
[39] I find that on the proper construction of 2009 Agreement Silcar is entitled to vary the roster pattern worked by its employees in the AMC from 12 hour shifts to 8 hour shifts by the giving of notice in accordance with clause 16(j) of the 2009 Agreement and that this is not subject to the facilitative mechanism in clause 4 of 2009 Agreement. It follows that the dispute must be determined in favour of Silcar and I do so.
VICE PRESIDENT
Appearances:
D Khatab with D Dwyer and J Ellery for the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia.
S Zeitz with M Flavel and M Nolet for Silcar Pty Ltd.
Hearing details:
2011.
Melbourne:
November 4.
1 AE872954
2 (1984) 295 CAR 188
3 (2008) 171 IR 392 at [7]ff
4 (2004) 219 CLR 165 at 179
5 Investors Compensation Scheme Ltd v West Bromwich Building Society [1998] 1 WLR 896 at 912 per Lord Hoffmann, adopted by Gleeson CJ, Gummow and Hayne JJ in Maggbury Pty Ltd v Hafele Australia Pty Ltd (2001) 210 CLR 181 at 188.
6 (2010) 197 IR 307
7 (1996) 66 IR 182
8 (1993) 46 IR 128
9 AC303380
10 AG827416
11 AG798693
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