Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Utilities Management Pty Ltd T/A SA Power Networks

[2015] FWC 383

[2015] FWC 383 [Note: An appeal pursuant to s.604 (C2015/1688) was lodged against this decision - refer to Full Bench decision dated 27 May 2015 [[2015] FWCFB 3240] for result of appeal.]

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
Utilities Management Pty Ltd T/A SA Power Networks
(C2014/6393)

DEPUTY PRESIDENT BARTEL ADELAIDE, 23 JANUARY 2015

Application to deal with a dispute involving interpretation of enterprise agreement

[1] Utilities Management Pty Ltd T/A SA Power Networks (SAPN or the employer) proposes to implement a roster including night shifts (the proposed roster) 1 for its central business district (CBD) operations. The CEPU opposes the proposed roster and has filed an application pursuant to s.739 of the Fair Work Act 2009 (the Act) seeking the assistance of the Fair Work Commission (the Commission). The grounds of the opposition to the proposed roster are that it would breach the Agreement and/or the manner of its implementation is unfair.

[2] The parties are bound by the Utilities Management Pty Ltd Enterprise Agreement 2014 (the Agreement), which was approved on 19 May 2014. 2 The Agreement covers “wages” employees, also referred to as Appendix 1B employees and salaried employees, also referred to as Appendix 1A employees.3 The main body of the Agreement includes ‘machinery’ and general clauses and specifies the wage increases over the life of the Agreement. There are 16 attachments, including Attachment 2 which contains the main terms and conditions of employment, including hours of work and the dispute settling provision.

[3] The dispute settling provision applies to “All issues of concern to management and employees (including all disputes arising under this agreement or under the National Employment Standards ...”. It provides that if the parties have been unable to resolve the issue through discussions then, “Any of the parties may refer the matter to the Fair Work Commission for conciliation or arbitration ...” 4. Both parties have agreed that the matter should be determined by the Commission. I am satisfied that the Commission can exercise its arbitral powers to settle the dispute in accordance with s.739(4) of the Act.5

Background

[4] The introduction of the proposed roster affects approximately 28 Appendix 1B employees engaged in the CBD Projects group and the CBD Supply Restoration group (“the affected employees”). The CBD Supply Restoration group attends to urgent or unplanned work in the CBD while the Projects group undertakes work which is usually planned and known in advance, such as the installation and upgrade of equipment and infrastructure. Employees engaged in the CBD groups require specialist skills because of the nature and age of the infrastructure and higher risks associated with the work due to high voltage cables. Work undertaken within the CBD is regularly performed outside daylight hours to minimise disruption to traffic and business activity.

[5] After hours work performed by employees in the CBD Supply Restoration group is undertaken in accordance with a Standby Roster. Employees on the roster are on standby between 3.30 pm and 7.00am for one week in a roster cycle of 6 weeks. The Standby Roster is in addition to the ordinary hours of work of 7.00am to 3.30pm Monday to Friday, with a rostered day off (RDO) every second Friday.

[6] Employees receive an allowance, equal to ordinary time rates of pay, for the period they are on standby and receive overtime payments called out to undertake work.

[7] Planned overtime is voluntary. A roster is produced 2 weeks in advance and employees nominate for the shifts they are available to work. The work is most commonly conducted on 2 consecutive weeknights, commencing at 8.00pm or 9.00pm for 8 hours on each occasion.

[8] The proposed roster introduces three changes to the current roster arrangements. Affected employees will work on a Sunday (day) followed by three consecutive night shifts in one week of a 4 week roster cycle. The current ordinary hours are worked in the remaining 3 weeks of the cycle. An availability roster will continue to operate for those employees currently on the roster, although the frequency will be one week in 4 for some employees and 1 week in 8 for other employees. The period an employee is rostered for availability will overlap with the period of Sunday work and the three night shifts. SAPN intends to commence the new rosters on 11 April 2015. 6

The case for the CEPU

Evidence

[9] Evidence was provided from the following affected employees: Andrew Nagle, TSW8 Linesman; Steven Pugliese, TSW4 Linesman; Adam Smith, TSW5 Linesman; and Benjamen Jewell, TSW3 Linesman. 7

[10] The common experience and knowledge of the witnesses, in so far as shift work is concerned, is that it has been limited to afternoon shift in depots and any changes to rosters were implemented by agreement with the relevant employees. Each witness was of the view that they could not be required to work night shift.

[11] Under cross-examination, Mr Smith was questioned on a term of his contract of employment that stipulated that “You will be required to participate in an availability roster and/or shift roster in accordance with business needs”. I interpose that this is a common provision in the contracts of employment of the affected employees and assumes some significance in the proceedings.

[12] Mr Smith’s evidence was that he understood that the reference to shift work was limited to afternoon shift because this was his only exposure to shift work since he commenced as an apprentice in 2001. He stated that when he entered into the employment contract there was no afternoon shift in operation at the depot he worked at, but he understood that he would be required to work afternoon shift if it was in operation at a depot he moved to. 8

[13] Each witness addressed the impact of the proposed roster. They identified concerns that fall under the following headings: family responsibilities and loss of choice in regard to working hours; financial loss; and health and safety. I have taken into account the evidence of these witnesses and I am satisfied that there is a genuine basis upon which each considers that their family responsibilities and quality of family life will be negatively impacted to various degrees. For at least two of the witnesses the removal of choice in relation to night work and the working of one Sunday per month present problems for their participation in the proposed roster due to child care responsibilities. The voluntary nature of the planned overtime currently worked enables them to reconcile work and family responsibilities.

[14] The loss of income currently received for planned overtime is significant for some witnesses. None suggested that financial hardship would result from working the proposed roster, but the witnesses stated that lifestyle changes and/or partners seeking additional income would be needed to cope with the reduction in income.

[15] Concern was expressed that the proposed roster would lead to fatigue with potentially negative consequences for health and safety. Working three consecutive night shifts was of particular concern to the witnesses, as was the overlap of the availability roster with the night shifts which could lead to extended hours being worked.

[16] John Adley, CEPU Organiser, also prepared a witness statement 9 but was not required for cross-examination. The following points are a summary of the main issues covered in his statement:

• Mr Adley was a bargaining representative for the Agreement;



• There was no discussion concerning the introduction of night shift for Appendix 1B employees during negotiations for the Agreement. He understood that night shift was limited to Appendix 1A employees as this has historically been the case;



• He first became aware of the proposal to introduce a new roster with night shifts in February 2014. A meeting of CEPU members held in March 2014 unanimously rejected the introduction of night shift work on the grounds that it would have a negative impact on the physical and psychological health and well being of employees, including upon their family responsibilities and quality of life. 10



• The CEPU subsequently offered to work with SAPN to explore alternatives to night shift which could meet its operational needs, but the introduction of the night shift had been decided by SAPN and was not negotiable.

Submissions

[17] Mr Noble, CEPU National Industrial Officer, argued that the introduction of the night shift for the affected employees would be a breach of the Agreement. He submitted that there was no provision within the Agreement that enabled management to unilaterally convert day workers to shift workers. Further, SAPN cannot rely on the terms of the contracts of employment and/or the job descriptions of the affected employees to introduce a night shift, where those terms are inconsistent with the Agreement (DL Employment). 11

[18] Mr Noble contended that the common understanding and experience of the witnesses regarding shift work and changes to rosters was consistent with the construction of the Agreement. He referred to several provisions in the Agreement where changes to hours’ arrangements could only be implemented by mutual agreement: Clauses 5.1(b), 5.1(c) and 5.2(a) of Attachment 2 dealing with alteration to start and finish times, length of the working day and irregular afternoon shifts; Clause 9.7.2.1 of Attachment 2 dealing with changes to the method of working shifts; and Attachments 11 and 12 dealing with changes to RDO’s.

[19] It was submitted that the nature of the changes covered by these provisions was of a lesser impact on employees than the changes now sought by SAPN, and this reinforced that the unilateral implementation of a night shift for day workers was not contemplated by the Agreement. Mr Noble referred to several cases on the construction and interpretation of statutory and industrial instruments confirming the validity of this approach.

[20] It was further argued that the introduction of the night shift was a breach of the No Extra Claims provision of the Agreement. Mr Noble submitted that if SAPN want to introduce a night shift then this should be the subject of discussions in the next round of enterprise bargaining negotiations, or the employer could seek to enter into individual flexibility arrangements (IFA’s) with its employees.

[21] Mr Noble suggested that, if the Commission was not persuaded that the introduction of the proposed roster constituted a breach of the Agreement, it was at liberty to determine that its introduction would be unfair on the affected employees and should not proceed. He submitted that the dispute settling provision of the Agreement contemplated that the Commission could determine “issues of concern” and in circumstances where the Agreement is silent on the introduction of shift work the Commission has broad scope to determine a fair and equitable remedy. The issues of concern identified by the employees warrant the intervention of the Commission.

[22] In conclusion, Mr Noble referred to recent CEPU co-operation with work practices which have improved operational efficiency and reduced costs for SAPN. These include the use of contractors at night to undertake excavation work with the SAPN linesman undertaking their work the following day and blocking off lanes of traffic in the CBD to carry out necessary repairs. He maintained that the parties are able to work collaboratively to implement business changes to improve efficiency without the need for a night shift roster.

The case for SAPN

[23] Mr Manos, of counsel, represented SAPN. 12 The following witnesses were called:

• Jackson, Operations Manager, CBD (SAPN)



• Gallina, Human Resources Manager, Wages (SAPN)



• Thomas, Associate Professor in Human Factors



• Brownley, General Manager Field Services (SAPN) 13

[24] The witness statement of Timothy Scutter, Human Relations Manager, Salaried Employees, at SAPN, was admitted by consent 14 and he was not required for cross-examination.

[25] There was only limited challenge to the evidence called by SAPN. While I have taken all the evidence into account, the following matters represent a summary of the key features of the evidence of Messrs Scutter, Jackson, Gallina and Brownley:

• The shift work provisions of the Agreement have been a feature of past industrial instruments and the inclusion of Appendix 1B employees is not new;



• There is a requirement for employees to participate in the availability roster, but some discretion is exercised by management if an employee requests to be removed from the roster, depending on the circumstances;



• There is a significant component of the wage costs for CBD employees directed to stand down pay and overtime payments. Annual figures relating to the total hours worked by CBD employees show that in the 2013-14 financial year approximately 28 per cent of total hours worked fell into these categories.  15 A proportion of the costs associated with stand down and overtime hours would be met by customers in circumstances where the work was undertaken at the request of the customer;



• An example of the current working arrangements and associated entitlements over a one week period showed that a worker who volunteered for two consecutive nights of planned overtime on a Tuesday and Wednesday would have a total of 20 hours of stand down time in order to provide the necessary break between working ordinary hours and the performance of overtime. For each of the two consecutive nights of planned overtime of 8 hours, 1 hour is paid at time and a half and 7 hours are paid at double time.  16



• The proposed roster could be introduced at this time because there are now sufficient employees who have as a term of their employment contract or job description that they may be required to undertake shift work; 17



• There was a process of consultation with the CEPU over an extended period. The proposed roster was developed having regard to the ordinary hours’ requirements under the Agreement, health and safety requirements and employees’ family responsibilities;



• Some employees raised concerns with the proposed roster and these matters were considered by management, although it was acknowledged that the concerns may not have been resolved to the employee’s satisfaction. It was possible that some employees did not raise concerns because the introduction of night shift was non-negotiable; 18



• The concerns of employees have been addressed by a delay in the implementation date of the proposed roster from 17 January to 11 April 2015, access to an expert in fatigue management to work individually with affected employees and access to an organisational psychologist. SAPN will facilitate access to financial advice; 19



• SAPN make submissions to the Australian Energy Regulator (AER) every five years and upon which the AER determines how much SAPN can charge its customers for the electricity it supplies. SAPN has submitted an application for the next “reset” period from 1 July 2015 to 30 June 2020, which includes a significant amount for capital expenditure and maintenance work in the CBD to replace ageing equipment;



• The submissions to the AER assume labour costs associated with the current CBD roster arrangements. It was acknowledged that the cost savings from the introduction of the proposed roster result from the reduced earnings of employees. 20

The evidence of Associate Professor Thomas

[26] Associate Professor Thomas works at the Appleton Institute at Central Queensland University. He is also a director of his own company which provides consulting services to companies in fatigue management and other human factors issues. He prepared a report for SAPN (the Report), on the potential changes in risk to worker health and safety as a consequence of formalising a night shift. 21 The Report highlights that:

• “Non-normal” hours of work, i.e. work that is contrary to circadian rhythms, has been shown to have a deleterious effect on safety through fatigue, and a long term deleterious effect on health through long term circadian disruption;



• Existing hours of work of CBD employees involved in day work plus planned overtime and on-call availability would meet the definition of non-normal hours and would involve the same detrimental effects as shift work;



• The proposed roster meets the criteria for an appropriately designed shift roster using a widely accepted checklist; and



• The proposed roster does not add significant levels of risk of accident or harm when compared to existing rostering and on-call arrangements. There is a caveat in the Report in relation to the continuation of the availability roster and Associate Professor Thomas recommended that “... the requirement for availability work [be] monitored closely”.

[27] The Report addressed the management of risks associated with non-normal hours. It noted that a roster template forms an important part of overall fatigue risk management, but in and of itself, such a policy is insufficient to guarantee that fatigue-related risk is effectively managed. Additional layers of defence are critical and include (but are not limited to) tools for self assessment of fitness for duty, systematic monitoring of instances of potential elevated fatigue-related risk, and a worker education and training program. These matters have been integrated into a draft SAPN Fatigue Management Field Directive, (the draft Directive). 22

[28] Associate Professor Thomas expressed the view that it was important that the draft Directive be implemented prior to the commencement of the proposed roster. 23

[29] He stated that for employees who will have reduced hours under the proposed roster, the level of risk will decrease. Fixed roster arrangement will enable employees to plan around their hours of work to avoid or minimise fatigue, and the capacity to forward plan is known to be beneficial in terms of the social impact of shift work.

Submissions

[30] Mr Manos argued that there were sound operational reasons for the introduction of the proposed roster. At present a significant amount of money is expended on overtime payments for work which is a regular feature of the operational requirements in the CBD and which is ongoing. There is also a significant amount of time when employees are paid but perform no work because of the need for rest breaks.

[31] He submitted that the terms of clause 9.1 of the Agreement are clear and unambiguous and permit SAPN to introduce shift work for Appendix 1B employees:

“9.1 GENERAL

The principles outlined in this clause relate to a 37.5 hour week (and/or 36 hour week for appendix 1B employees from 1 July 2006) and shifts of eight (8) hours duration which are regarded as the standard for shift work. The parties may, by agreement, vary the hours of shift and length of roster cycles providing the principles of this clause are maintained.”

[32] Mr Manos contended that, at the very least, clause 9.1 was neutral in terms of the ability of SAPN to introduce shift work for day workers and if this is the case then SAPN is entitled to rely on the contracts of employment and/or job descriptions of the affected employees which specifically refer to the potential requirement for shift work.

[33] Referring to the decision in Australasian Meat Industry Employees Union v Golden Cockerel Pty Limited (Golden Cockerel) 24 Mr Manos submitted that contextual information can be used as an aid to interpreting an enterprise agreement when an ambiguity has been found to exist or to establish whether an ambiguity exists in the relevant term(s) of an enterprise agreement but only if there is a suspicion that an ambiguity may exist.

[34] Mr Manos argued that the CEPU had failed to establish that there was any ambiguity in the application of clause 9 and that the evidence concerning the subjective expectations of the CEPU witnesses was not relevant.

[35] He referred to provisions in the Agreement said to be relevant to the introduction of shift work including the purpose and principal objectives of the Agreement in clause 7 which have a strong focus on improving the productivity and profitability of SAPN. Mr Manos contended that the requirement for agreement between employees and the employer to change hours of work does not extend to the introduction of shift work and is confined to the variation of existing shifts.

[36] The introduction of the proposed roster requires that SAPN consult with employees in accordance with the Consultation clause in the Agreement. SAPN had complied with the consultative requirements and while the CEPU may be disappointed with the outcome of the consultation process undertaken, there is no challenge to the fact that SAPN has complied with the consultation clause.

[37] In relation to the No Extra Claims provision of the Agreement, Mr Manos submitted that the Agreement itself contemplated that shift work could be introduced and as such the proposed roster was not a new claim within the meaning of the No Extra Claims provision. He argued that the No Extra Claims provision could not prevent the employer from exercising its rights under the employment contract.

[38] Mr Manos submitted that the CEPU had failed to lead any expert evidence on the potential health and safety issues associated with the new roster and relied instead on the opinions of workers with a vested interest. SAPN had engaged an expert in the area to review the proposed roster and the Report concludes that it does not add a significant level of risk of accident or harm when compared to existing rostering and on call arrangements.

[39] Mr Manos submitted that the affected employees already work a form of night shift. The nature of the family responsibility issues identified by the CEPU witnesses was no different from the problems faced by shift workers generally and in any event, the evidence before the Commission was limited to a small number of the affected employees. He noted that clause 9.7.3 of the Agreement enabled employees to swap shifts among themselves and suggested that this may provide an answer for those affected employees who have a problem with the new working arrangements.

[40] As to the financial implications for the affected employees, Mr Manos acknowledged that some employees would lose pay but noted that the performance of overtime is at the discretion of management and can be withdrawn with or without the introduction of the proposed roster. He also noted that for some employees who currently do not perform planned overtime, the proposed roster will represent an increase in pay through night shift penalties and Sunday loadings.

[41] Mr Manos contended that the dispute arises out of the Agreement and the Commission should determine it on the basis of the terms of the Agreement and not on perceived or subjective notions of fairness. If there was no breach of the Agreement or health and safety requirements then SAPN should be allowed to proceed with the proposed roster and the Commission should be reluctant to interfere with an exercise of managerial prerogative.

[42] In answer to questions from the Commission about the status of the affected employees under the proposed roster, Mr Manos stated that Clause 9 of the Agreement dealing with shift work enabled day shifts to be worked and enabled ordinary hours to be worked from Monday to Sunday. It was his view that the affected employees would be non-continuous shift workers. 25

Consideration

The relevant terms of the Agreement

[43] The clauses of the Agreement that directly relate to ordinary hours of work are as follows:

“CLAUSE 5 ORDINARY HOURS OF WORK- DAY WORKERS

5.1 NORMAL HOURS - DAY WORKERS

a) The ordinary hours of work are an average of 37.5 hours per week exclusive of meal breaks worked in the span between 7 am - 5.30 pm Monday to Friday inclusive.

b) From 1 July 2006, Appendix 1B employees converted to a 36 hour week. That arrangement operates on a minutes off per day basis from the previously existing arrangements by alteration of the finish time. For example, an employee on a 9 day fortnight will cease work 20 minutes earlier than their arrangement under a 37.5 hour week. Any other alteration to start and finish times subsequent to the operation of the 36 hour week shall be by agreement.

c) Within the above parameters, the start and finish times and the length of the working day are by agreement between employees and local management.

5.2 IRREGULAR AFTERNOON WORK

a) This occurs where Utilities Management requires short term working on afternoons and evenings by a day worker and the employee agrees to work the arrangement proposed. Such work is not worked to a roster as is the case with shift work. Refer subclause 9.7.

b) Irregular afternoon working will be undertaken in daily periods averaging 7.5 hours (7.2 hours in the case of the 36 hour week) each which finish after 6.00p.m. and at or before midnight Monday to Friday inclusive.

c) An employee who transfers from normal day work to irregular afternoon working will be paid for each period of afternoon working, at the rate of time and a half (1.5x) of the employee’s ordinary rate of pay for the first two (2) hours and double time (2x) the ordinary rate for the remainder.

d) When an employee is transferred by Utilities Management from afternoon working back to normal day work, the employee will be entitled to an off-duty period of ten (10) consecutive hours. The off-duty period will be granted by Utilities Management without loss of pay for any normal day work hours falling within such absence.
...

5.7 ...” 26

“6.5 STANDING BY

Employees may be requested by an authorising officer to be on call or “stand by” to work after ordinary hours.

Standing by time at ordinary rates is paid from the time from which the employee is told to be ready until released or actual work commences. In the event that actual work commences penalty rates apply.”

“CLAUSE 9 SHIFT WORK

9.1 GENERAL

The principles outlined in this clause relate to a 37.5 hour week (and/or 36 hour week for appendix 1B employees from 1 July 2006) and shifts of eight (8) hours duration which are regarded as the standard for shift work. The parties may, by agreement, vary the hours of shift and length of roster cycles providing the principles of this clause are maintained.

9.2 DEFINITIONS

“continuous shift work” means work carried out on consecutive shifts of employees throughout the twenty four (24) hours of each of at least six (6) consecutive days to an agreed pattern.

“non-continuous shift” means shift work other than continuous shift work.

“roster cycle” means a sequence of shifts in a roster normally to be worked as ordinary working hours and arranged so as to form a recurring cycle.

“standard afternoon shift” means finishing after 6p.m. and at or before midnight.

“standard day shift” means starting at or after 6a.m. and finishing at or before 6p.m.

“standard night shift’ means finishing after midnight and at or before 8a.m

“standard shift” means a period of eight (8) hours during which a shift worker is rostered for duty.

9.3 SHIFT ALLOWANCES

9.3.1 Standard Shift Allowances

Shift workers will be paid their ordinary rate of pay plus a shift allowance of a percentage of the ordinary rate.

The standard shift allowances payable are outlined in the following Table.

IPERIO

PERIOD	SHIFT ALLOWANCE - PERCENTAGE OF ORDINARY RATE
Weekday	Ordinary rate only
Weekday- standard afternoon	18.75%
Weekday- standard night shift	22.5%
Saturday- all shifts	50%
Sunday- all shifts	100%
Public Holiday- all shifts	150%

9.3.2 Averaging of Shift Allowances

...

9.4 PAY EQUALISATION

...

9.5 ORDINARY HOURS OF WORK

Shift workers rostered hours will average 37.5 hours per week (or 36 hour for Appendix 1B employees after 1 July 2006) over a roster cycle.

Should an agreed roster cycle result in an employee working in excess of the average 37.5 ordinary hours per week (or 36 hour for Appendix 1B employees after 1 July 2006) over the cycle, the additional time worked will be paid as overtime.

9.6 OVERTIME

...

9.7 ROSTERS

9. 7.1 Shift Rosters

Shift rosters will specify the commencing and finishing times of ordinary Working hours of the respective shifts and the maximum number of shifts to be worked.

In the absence of any custom or agreement a roster will ensure that the maximum number of standard shifts to be worked will be not more than eight (8) in any nine (9) consecutive days.

9.7.2 Variations to Rosters

9.7.2.1 Changes to the method of working shifts

Changes to the method of working shifts will not occur unless agreed between the parties concerned. These changes may include but not be limited to:

• length of shift;



• rotation of shift;



• start and finish times;



• basic structure and frequency of roster; and



• existing pay and associated arrangements contained



• within local shift agreements.

9.7.2.2 Replacement of an employee on Shift Roster

...

9.7.3 Employees swapping shifts between themselves

a) An employee may, by mutual agreement with another shift employee, replace that employee’s rostered shift. In such a case both employees will be paid as if they had worked according to the roster cycle.

b) This swap will not be considered as overtime for the purposes of subclause 9.6.

c) Where such a swap is arranged, prior notification must be given to Utilities Management before this swap can take place. Utilities Management may veto any proposed swap but will not do so unreasonably.

d) Swapping will not occur where an employee will have less than a ten (10) hour break from completion of work to commencing work on the next shift unless Utilities Management and the employee involved agree to a minimum break of not less than eight (8) hours.

e) In the case of employees whose shift roster includes the working of twelve (12) hour shifts, those employees must have a minimum of a ten (10) hour break.

...

9.14 DAYLIGHT SAVINGS

...”

[44] The other relevant clauses of the Agreement are as follows:

“CLAUSE 7 PURPOSE AND PRINCIPAL OBJECTIVES OF AGREEMENT

The objectives of this Agreement are:

• to record terms and conditions of employment for Utilities Management employees covered by this Enterprise Agreement;



• to provide a framework to develop a flexible and skilled workforce;



• to assist Utilities Management to remain a profitable and enduring enterprise for the mutual benefit of the customers, owner, employees and the community; and



• to meet the particular needs of Utilities Management in its endeavours to achieve its vision maximising shareholder value as a national leader in terms of competitiveness and profitability in the electricity and energy businesses.

The parties will work collaboratively towards implementing business changes necessary to improve performance against the following key business objectives:

• productivity improvements;



• business growth;



• customer service;



• employee commitment;



• compliance; and



• business plan financial outcomes.

Utilities Management and the Single Bargaining Unit (including the Unions’ Enterprise Bargaining workforce representatives) will meet as required during the life of this Agreement to review any issues arising from the agreement. Such meetings may be initiated by Utilities Management or the employee representatives.”

“CLAUSE 3 CONSULTATION

3.1 GENERAL CONSULTATION

3.1.1 Introduction

Utilities Management is committed to open and honest consultation with its employees and their union representatives.

Consultation will mean informed discussion between Utilities Management, its employee(s) and their union representative(s) on workplace change likely to have a significant impact on an employee or employees. The purpose is to consider all information, advice and opinions and to create a genuine opportunity to influence Utilities Management’s final decision.

The parties recognise that there may be extraordinary circumstances where the capacity to consult in strict accordance with this clause may not be possible including where disclosure of confidential information could compromise Utilities Management’s business position. In such cases, the decision will be communicated to the employee(s) and their union representative(s) and consultation will occur in relation to the means of implementing the decision.

Nothing in subclause 3.1 prevents an employee from appointing a representative of their choice at any stage of the consultative process.

3.1.2 Principles

Utilities Management acknowledges the important role its employees and their union representatives have in the change process.

The timing, method and extent of consultation may vary according to the nature of the issue.

Utilities Management will consult on any change proposal likely to have a significant impact on employees prior to a final decision being made (eg major changes in structure or organisation, the introduction of new technology, new work practices etc).

Consultation will provide an opportunity for Utilities Management and the union(s) to discuss ways to minimise any adverse impact upon employees that may arise from any proposed change.

3.1.3 Guidelines

Consultation on change proposals will take place as close as possible to the workplace where the change will impact.

Initial consultation may be verbal and/or written. Utilities Management will provide employees and their union representative(s) with information concerning change proposals, including the expected impacts on employees. Where the proposed change is significant, details of those changes will be provided in writing.

The parties recognise that some minor change issues at a workplace level may not require the involvement of union representative(s) in the consultation process. However, where an employee(s) and/or a relevant union representative(s) requests involvement in the consultation process, Utilities Management will cooperate with such requests.

This does not limit the rights of parties to use normal industrial processes through negotiation or arbitration.

3.2 CONSULTATION ON CHANGES TO ROSTER OR ORDINARY HOURS OF WORK

If Utilities Management proposes to make changes to employees’ regular rosters or ordinary hours of work, the process for general consultation outlined in subclause 3.1 will apply.

In addition to that process, Utilities Management will ensure that:

• all affected employees are provided with information about the change;



• all affected employees are invited to give their views about the impact of the change; and



• proper consideration is given to any views given by the employees about the impact of the change.

This clause does not apply to casual employees who do not have a regular roster or set ordinary hours of work.

3.3 CONSULTATION ON THE SELECTION OF PROVIDERS OF SUPPLEMENTARY LABOUR AND CONTRACT FOR SERVICES

...

3.4 CONSULTATION AND COMMUNICATION FORUM (CCF) 27

...”

Preliminary matters

[45] In contrast to clause 5 dealing with hours of work of day workers, clause 9 does not specify the days of the week on which ordinary hours can be worked. Sub-clause 9.3.1 specifies that in addition to ordinary rates of pay, employees will receive a shift allowance on Saturdays and Sundays and sub-clause 9.7.1 identifies that the maximum number of standard shifts to be worked (in the absence of any custom or agreement) will be not more than 8 in any 9 consecutive days. I conclude that shift work can be performed in ordinary hours on any day, Monday to Sunday.

[46] Clause 9 of Attachment 2 can apply to both wages and salaried employees and contemplates the working of continuous and non-continuous shifts, as defined, in the form of day, afternoon and night shifts.

[47] I accept SAPN’s submission that the introduction of the proposed roster has the effect of converting the affected employees from day work, performed in accordance with clause 5, to non-continuous shift work performed in accordance with clause 9 of the Agreement. That is, I accept that working three consecutive night shifts in a 4 week roster satisfies the definition of non-continuous shift work, which in turn allows ordinary hours to be worked on Sundays.

[48] There is no provision within the Agreement that is directed to the conversion of day workers to shift workers, or vice versa.

[49] The introduction of the proposed roster, assuming that it is consistent with, or not excluded by the Agreement, is to be undertaken in a collaborative manner (Clause 7) and the employer is required to ensure that proper consideration is given to employee views about the impact of the change (Clause 3.2 Attachment 2).

Does the Agreement exclude the introduction of the proposed roster?

[50] The decision in Golden Cockerel is the latest in a long line of decisions dealing with the approach to the construction of contracts, statutes and/or industrial instruments. The Full Bench cites and discusses the reasoning in a number of key decisions, including on the use of extrinsic material as an aid to interpretation and the circumstances in which it is permissible to have regard to extrinsic material. 28 The Full Bench concluded:

“[41] From the foregoing, the following principles may be distilled:

1. The [Acts Interpretation Act 1901] does not apply to the construction of an enterprise agreement made under the Act.

2. In construing an enterprise agreement it is first necessary to determine whether an agreement has a plain meaning or contains an ambiguity.

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

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

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

6. Admissible evidence of the surrounding circumstances is evidence of the objective framework of fact and will include:

(a) 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;

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

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

7. The resolution of a disputed construction of an agreement will turn on the language of the Agreement understood having regard to its context and purpose.

8. Context might appear from:

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

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

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

9. Where the common intention of the parties is sought to be identified, regard is not to be had to the subjective intentions or expectations of the parties. A common intention is 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.

10. 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.”

[51] In my view, SAPN’s submission that extrinsic material may be used to ascertain if an ambiguity exists, but only if there is a suspicion of ambiguity, is an unduly narrow view of the principles adopted in Golden Cockerel. The passage from the NSW Court of Appeal decision in Mainteck Services Pty Ltd v Stein Heurtey SA, for example, makes it plain that whether words are clear and unambiguous is an outcome of the process of interpretation and means that there is nothing in the relevant context that detracts from the ordinary literal meaning. 29

[52] SAPN argues that clause 9.1 permits it to engage Appendix 1B employees as continuous or non-continuous shift workers. I consider that the correct characterisation of this clause is that it regulates the arrangements of Appendix 1A and Appendix 1B employees who perform continuous or non-continuous shifts, as defined.

[53] The CEPU’s position that the Agreement does not allow SAPN to unilaterally convert day workers to shift workers relies on the absence of any provision within the Agreement to this effect, together with a number of provisions within the Agreement stipulating that changes to hours’ arrangements must be implemented by agreement.

[54] References to agreement being reached between the parties in different clauses and Attachments are specific to the categories of employee covered by the respective clause or Attachment. That is, employees engaged as day workers under clause 5 or as shift workers under clause 9 can agree to changes to hours’ arrangements and rosters within the parameters of the respective clause that applies to them. I do not consider that provisions of this nature reflect a broader intention that the conversion of day shift to continuous or non-continuous shift work is to be implemented by agreement between the parties.

[55] The extrinsic evidence relied upon by the CEPU in support of its interpretation includes the experience and common understanding of employees concerning the existence and operation of shift work for wages employees and the absence of any past discussion about night shift work for wages employees. SAPN disputes that night shift has not previously been discussed but in any event I do not regard these matters as evidence of a common intention of the parties. Accordingly such evidence cannot be relied upon as an aid to interpreting the Agreement.

[56] Mr Adley’s evidence that the introduction of night shift for wages employees was not raised by SAPN in the negotiations leading to the Agreement is of some significance, when coupled with the fact that the CEPU did not seek to deal with the night shift in the context of the enterprise bargaining negotiations that were underway at the time or in the context of the rights and obligations under the enterprise agreement that was in place in February 2014.

[57] The negotiations between the parties on the proposed roster were conducted in parallel with enterprise bargaining, albeit that the CEPU maintained its opposition to the introduction of the night shift in accordance with the March 2014 resolution of its members. In my view, these circumstances indicate that the introduction of night shift for day workers was seen by both parties as a matter outside the terms of the Agreement or the previous enterprise agreement.

[58] I conclude that the Agreement is silent on the issue of conversion of day workers to shift workers and that none of the contextual matters relied upon by the CEPU suggest that the parties intended that night shift for Appendix 1B employees could only be introduced by agreement.

The No Extra Claims Provision

[59] The No Extra Claims provision in clause 10 of the Agreement states that:

“The parties bound by this Agreement undertake that, until the nominal expiry date set out in Clause 4, they will not make any extra claims relating to terms or conditions of employment (whether dealt with in this Agreement or not) in respect of the employees covered by this Agreement.”

[60] The relationship between the contract of employment and an enterprise agreement was considered in the appeal decision in DL Employment. The relevant circumstances for present purposes are as follows. The decision at first instance dealt with a dispute application lodged on behalf of “claimant employees” seeking the payment of redundancy entitlements under the relevant enterprise agreement consequent upon the closure of the employer’s production facility at Kogarah, NSW. The employer disputed that the claimant employees were redundant. It argued that it was entitled to transfer the employees to another site in accordance with the employees’ contracts of employment, which specified that employees could be directed to work at other locations (referred to in the decision as “the relocation term”).

[61] On appeal, the Full Bench addressed the relationship between contracts of employment and statutory instruments and stated:

“[42] The terms of the contract of employment may, of course, be affected in their operation by a statutory instrument such as an award or agreement made or approved under industrial legislation applying to the same employment. The contract of employment may provide for matters additional to and not inconsistent with such a statutory instrument, and in that circumstance the instrument and the contract may be said to co-exist, but where the contract contains provisions inconsistent with those in the instrument, the provisions in the instrument will apply by virtue of the statute which gives it effect, and the inconsistent provisions of the contract will be displaced in their operation and rendered inoperative ...”.

[62] The relevant enterprise agreement in DL Employment contained no express provision authorising the employer to direct an employee to another location. However, the Full Bench held that there were a number of “strong textual and extrinsic indications” that the relevant enterprise agreement did not contemplate that production employees could be required to work anywhere other than Kogarah. 30

[63] One of the ‘indications’ was the No Extra Claims provision. It was held that the relocation term had the effect of changing the benefits that would otherwise be available to the claimant employees under the relevant enterprise agreement, being the removal of redundancy entitlements, and this constituted an extra claim. The Full Bench continued:

“[53] This is not to say that the [enterprise agreement] completely displaced the operation of contracts of employment between each of the Claimant Employees and their employer. When an industrial instrument prescribes the respective rights and obligations of an employer and employees covered by it, it operates in respect of employment relationships separately brought into being by individual contracts of employment; the industrial instrument does not itself create employment relationships. To that extent, the [enterprise agreement] could not displace the employment contract. ... Further, it may be that contractual terms which are implied by law in employment contracts because they are regarded as inherent to the nature of the employment relationship, independent of the presumed intentions of the parties, could not be displaced because any purported exclusion or modification of such terms might negate the existence of the employment relationship upon which the operation of the instrument depends. …”.

[64] DL Employment is distinguished from the present case. Firstly, it was held that on a proper construction of the relevant enterprise agreement, it was inconsistent with relocation term in the contract of employment as relied upon by the employer. Secondly, it was held that the relocation term had the effect of changing the benefits and entitlements of employees under the relevant enterprise agreement and therefore the employer’s reliance upon it constituted an extra claim.

[65] The introduction of the proposed roster does not impact on the rights and entitlements of the affected employees under the Agreement, nor is it a matter prohibited by the Agreement. It involves the application of the existing terms and conditions of employment under the Agreement to the term of the contracts of employment which stipulates that employees may be required to perform shift work. In the circumstances of this case, the introduction of the proposed roster does not constitute a breach of the No Extra Claims provision, and the contractual term co-exists with the terms of the Agreement.

Manner of implementation of the proposed roster

[66] This section of the decision deals with the CEPU’s argument that it is open to the Commission to determine that the manner of the implementation of the proposed roster is unfair.

[67] Relevant to this consideration is SAPN’s compliance with the consultation term in clause 3 of Attachment 2 of the Agreement and the purpose and principal objectives of the Agreement as set out in clause 7. As noted earlier the CEPU has not challenged SAPN’s compliance with the consultation term. It is relevant in view of the discussion that follows, that the issues of concern are in fact the adverse impact upon employees that arises from the proposed change. In accordance with 3.1.2 and 3.2 of the consultation clause, these matters are to form the basis of discussions between the parties.

[68] Clause 7 of the Agreement states that the parties will work collaboratively to implement business changes to improve performance against key business objectives. Working “collaboratively” connotes a joint endeavour to achieve the key business objectives listed in the clause, subject of course to compliance with the Agreement and statutory requirements. It may be that the proposed roster is the most effective way of meeting the productivity and profitability objectives. However, it would be contrary to the concept of collaboration and the above mentioned provisions of the consultation term to refuse to consider alternatives to the proposed roster that may be raised by the employees and/or the CEPU which are consistent with the achievement of the key business objectives.

[69] The affected employees have approached the proposed roster on the basis that SAPN could not legitimately introduce a night shift for Appendix 1B employees, and this has limited their participation in discussions. For example, the employees did not suggest any modifications to the proposed roster that may address or at least alleviate the issues of concern.

[70] However, The CEPU submission concerning the manner of implementation goes beyond the issue of consistency with the Agreement and argues that the issues of concern identified by the employees warrant a determination preventing implementation of the proposed roster on fairness and equity grounds.

[71] Sections 577 and 578 mandate how the Commission is to exercise its functions, including dealing with disputes, and the matters to be taken into account when performing its functions, as follows:

“577Performance of functions etc. by the FWC

The FWC must perform its functions and exercise its powers in a manner that:

(a) is fair and just; and

(b) is quick, informal and avoids unnecessary technicalities; and

(c) is open and transparent; and

(d) promotes harmonious and cooperative workplace relations.

Note: The President also is responsible for ensuring that the FWC performs its functions and exercises its powers efficiently etc. (see section 581).

578 Matters the FWC must take into account in performing functions etc.

In performing functions or exercising powers, in relation to a matter, under a part of this Act (including this Part), the FWC must take into account:

(a) the objects of this Act, and any objects of the part of this Act; and

(b) equity, good conscience and the merits of the matter; and

(c) the need to respect and value the diversity of the work force by helping to prevent and eliminate discrimination on the basis of race, colour, sex, sexual orientation, age, physical or mental disability, marital status, family or carer’s responsibilities, pregnancy, religion, political opinion, national extraction or social origin.”

[72] Section 739 of the Act concerns disputes dealt with by the Commission and includes a provision 31 that the Commission must not make a decision that is inconsistent with the Act or a fair work instrument that applies to the parties.

[73] In dealing with issues of concern referred to the Commission under the dispute settling provisions of the Agreementthe Commission is obliged to consider all relevant circumstances including the substantive and procedural terms of the Agreement.

[74] It is not open to the Commission to prevent SAPN from exercising its rights under the contract of employment in circumstances where the Agreement and statutory requirements have been complied with. The consultation provision of the Agreement, read in conjunction with the purpose and principal objectives of the Agreement provide the mechanism for the implementation of the proposed roster. The issues of concern identified by the CEPU witnesses are to be dealt with in that context.

[75] In this regard, there is an obligation on the employer to give proper consideration to the issues of concern with a view to minimising any adverse effect upon employees. Should the CEPU consider that the provisions of the clause have not been met, it is open to it to notify a dispute to the Commission. However, as noted earlier, I do not consider that consultation between the parties has been as thorough as it could be. In addition there have been certain developments since the CEPU notified the dispute which may warrant further discussion: Associate Professor Thomas has prepared the Report; and certain support mechanisms for employees have been decided upon, as per Mr Brownley’s evidence.

[76] The delayed implementation date provides an opportunity for further discussion between the parties, which I would encourage for the reasons set out above. The following discussion and observations are intended to assist the parties in any further process of consultation.

Occupational Health and Safety

[77] I accept the evidence of Associate Professor Thomas including his conclusion that the proposed roster does not add significant levels of risk of accident or harm compared to existing rostering and on-call arrangements. It is relevant that Associate Professor Thomas acknowledged that working three consecutive night shifts presented a greater risk than working 2 consecutive night shifts; 32 and suggested that the requirement for availability work be monitored closely. He was of the view that the proposed roster should not be implemented until the draft Directive is issued in its final form.

[78] Accordingly, a failure to implement the draft Directive and associated training in advance of the implementation of the proposed roster would not be appropriate on health and safety grounds. Notwithstanding the reduced risk for some employees under the proposed roster, the evidence indicates that there are some areas of increased risk of fatigue which warrants the introduction of the appropriate tools and mechanisms to minimise such risks in advance of the new roster.

Family responsibilities

[79] The loss of flexibility associated with the new roster as addressed by the CEPU witnesses is a matter which impacts on their ability to reconcile work and family responsibilities.

[80] One of the objects of the Act is to assist employees to balance their work and family responsibilities by providing for flexible working arrangements. 33 The National Employment Standards enable requests for flexible working arrangements to be made by employees, and sets out the procedure for dealing with those requests. A request may be refused by an employer on “reasonable business grounds”, which include, but are not limited to: excessive cost; no capacity to change the working arrangements of other employees to accommodate the request; impracticality; loss of efficiency or productivity; and significant negative impact on customer service.34

[81] While the process of requesting flexible arrangements is open to individual employees, the delayed implementation date provides an opportunity to further consider options that may enable some flexibility for individual employees. This may include the potential for shift swapping between employees on an ongoing basis and whether any of the CBD employees who do not have a contractual term requiring shift work are amenable to being placed on the proposed roster.

Financial implications

[82] It is agreed by SAPN that some of the affected employees will suffer a reduction in income under the proposed roster, and for some employees the loss of income will be substantial. The evidence of the employees does not suggest that financial hardship will result from the introduction of the proposed roster, although it suggests that changes in lifestyle will be required or income will need to be generated from other sources.

[83] The working of regular overtime according to a roster over a period of time is of a different quality to the ad hoc requirement to perform additional hours in the case of an unexpected or unplanned development. It is a fundamental plank of SAPN’s case that the work undertaken as planned overtime has been an ongoing and regular operational requirement. It is not surprising that employees who have regularly participated in the overtime roster over a period of time have come to depend on their current level of income.

[84] While the allocation of overtime may be discretionary, the circumstances of employees who have regularly participated in planned overtime and who will suffer a significant reduction in income as a result of the introduction of the proposed roster are not irrelevant. A loss in the order of $30,000 per annum for some employees as stated in the CEPU submissions is a signficant adverse impact. The evidence before the Commission relating to SAPN’s submissions to the AER suggest that there may be scope for some assistance to affected employees based on the particular circumstances of each case. Further discussion between the parties on this issue would be appropriate.

Conclusion

[85] I have determined that the Agreement is silent on the conversion of day workers to shift workers and that applying the principles of construction to the Agreement, there is no common intention to be discerned that such conversion is prohibited unless agreed by the employees. The term of the contract of employment of the affected employees which enables the employer to require that shift work be undertaken does not reduce or modify any existing entitlement under the Agreement, and SAPN is entitled to rely upon it.

[86] The introduction of the change is to be dealt with in accordance with the consultation clause of the Agreement, also taking into account the principal objectives of the Agreement. There is an obligation on the employer to minimise the adverse consequences upon the employees and this requires an active consideration of the issues of concern. The nature of the discussions held to date and further developments as advised in the course of the evidence suggest that further discussions should take place between the parties in advance of the implementation date.

DEPUTY PRESIDENT

Appearances:

Mr G Noble, counsel, with Ms J Rogers for the Applicant

Mr A Manos, counsel for the Respondent

Hearing details:

2014.

Adelaide,

December 22 and 23.

 1   Ex SAPN 3 Attach TJ3.

 2   AE408214, PR550775.

 3   This is a reference to the appendices in the Agreement which contain the respective rates of pay.

 4   Attach 2, cl 11 Issue Resolution.

 5   The dispute was the subject of conciliation before Lewin C on 27 October 2014.

 6   Prior to the hearing the proposed implementation date was 17 January 2015.

 7   Ex CEPU 2; CEPU 3; CEPU 4; CEPU 5, respectively.

 8   PN277-284.

 9   Ex CEPU 1.

 10   Ex CEPU 1, Attach 1.

 11   DL Employment Pty Ltd v Australian Manufacturing Workers Union, [2014] FWCFB 7946 at [42].

 12   Permission for the employer to be legally represented was granted by a Direction issued on 16 December 2014.

 13   Witness statements Ex SAPN 3, 4, 5 and 7, respectively.

 14   Ex SAPN 2.

 15   Percentage based on the figures contained in Ex SAPN 4 at Attach AG1.

 16   Ex SAPN 3 at para 49.

 17   At PN585.

 18   At PN629, 636.

 19   At PN886.

 20   PN833-837; PN848.

 21   Ex SAPN 5 Attach MT1. The report is dated 12 December 2014.

 22   Ex SAPN 6.

 23   At PN732.

 24   [2014] FWCFB 7447.

 25   Clause 9.3.1 of Attach 2 to the Agreement.

 26   Sub-clauses 5.6 and 5.7 refer to Attach 10 and 11 of the Agreement dealing with flexible working arrangements for the 19 day month and 9 day fortnight, respectively.

 27   The CCF is limited to consideration of “larger corporate issues” of interest or concern to “significant numbers” of SAPN employees. Neither party suggested that this provision was relevant to the present matter.

 28   At paras [23] - [30].

 29 [2014] NSWCA 184 at [29].

 30   Supra, at [44].

 31 Section 739(5) of the Act.

 32   At PN735-42.

 33   Section 3(d) of the Act.

 34   Division 4 of Part 2-2 of the Act.

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