Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Viva Energy Refining Pty Ltd
[2015] FWCFB 1770
•14 JULY 2015
| [2015] FWCFB 1770 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.604 - Appeal of decisions
v
Viva Energy Refining Pty Ltd
(C2015/1312, C2015/1313)
SENIOR DEPUTY PRESIDENT HARRISON | SYDNEY, 14 JULY 2015 |
Appeal against decision [2014] FWC 9456 of Commissioner Johns in matter numbers C2014/948 and C2014/4735 – s.739 dispute settlement procedure – interpretation of an enterprise agreement.
[1] This decision concerns appeals under s.604 of the Fair Work Act 2009 (the Act) by the “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers' Union and the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia. Unless we indicate otherwise, we will refer to them as the appellants or the unions. The issue raised by the appeal concerns a disputed interpretation of the terms of an enterprise agreement made under the Act.
[2] The respondent to the appeal is Viva Energy Refining Pty Ltd (Viva). The appellants and Viva are covered by the Shell Geelong Refinery Enterprise Agreement 2013 - Maintenance Employees 1 (the Agreement). Viva was previously known as Shell Refining (Australia) Pty Ltd. The interpretation to be given to the provisions of Part 4 and clause 5.7 of the Agreement were the subject of a decision by Commissioner Johns.2 He agreed with the interpretation of the Agreement for which Viva had contended. The unions disagree with that interpretation and have lodged this appeal.
Approach to appeal
[3] A preliminary consideration is whether the dispute settlement procedure in the Agreement provides the appellants with a right to appeal the decision of Commissioner Johns, or whether they first require the grant of permission to appeal.
[4] The relevant words in the dispute settlement procedure clause are in clause 8.1.5v.b) and read as follows:
“8.1.5 Should issues remain unresolved after discussion between the parties directly involved, the following procedure for the avoidance or resolution of disputes shall apply:
…
v. FWC may deal with the dispute in two stages:
…
b) If FWC is unable to resolve the dispute at the first stage, FWC may then arbitrate the dispute and make a determination that is binding on the parties (subject to any appeal). (Note, a decision that FWC makes when arbitrating a dispute is a decision for the Purpose of Div 3 of Part 5.1 of the Act. Therefore, an appeal may be made against the decision.)”
[5] We agree with the submission of Viva that this clause does not provide a right of appeal and serves only to acknowledge the appeal process conferred by the Act. The appellants accepted this point in their oral submissions. We agree with Viva that the note in the clause is consistent with this, in that it confirms the availability of an appeal, and that the process through which such an appeal can be initiated is that prescribed by the Act. Accordingly, if a person covered by the Agreement lodges an appeal, he or she needs to satisfy the preconditions for appeal contained in s.604 of the Act, including the need to satisfy a Full Bench that permission to appeal should be granted. 3
[6] We proceed on the basis this is an appeal by way of rehearing and the Commission’s powers on appeal are only exercisable if there is error on the part of the primary decision-maker. 4 As we have found, there is no right to appeal. Section 604(2) of the Act requires us to grant permission to appeal if we are satisfied that it is “in the public interest to do so”. The task of assessing whether the public interest test is met is a discretionary one involving a broad value judgment. The public interest is not satisfied simply by the identification of error, or a preference for a different result. In GlaxoSmithKline Australia Pty Ltd v Makin, a Full Bench of the Commission identified some of the considerations that may attract the public interest:
“... the public interest might be attracted where a matter raises issues of importance and general application, or where there is a diversity of decisions at first instance so that guidance from an appellate court is required, or where the decision at first instance manifests an injustice, or the result is counter intuitive, or that the legal principles applied appear disharmonious when compared with other recent decisions dealing with similar matters...” 5
[7] Other than the special case in s.604(2), the grounds for granting permission to appeal are not specified. Considerations which have traditionally been treated as justifying the grant of permission to appeal include that the decision is attended with sufficient doubt to warrant its reconsideration and that substantial injustice may result if permission is refused. 6
[8] It will rarely be appropriate to grant permission to appeal unless an arguable case of appealable error is demonstrated. This is so because an appeal cannot succeed in the absence of appealable error. 7
[9] The submissions before the Commissioner, and those before us, addressed in detail the clauses in Part 4 of the Agreement and clause 5.7. We have given close consideration to the terms of all of those clauses and also to the whole of the Agreement. It is adequate to give a short description only of the provisions that are relevant to the disputed interpretation upon which the Commissioner was required to rule.
[10] Part 4 of the Agreement is titled “Annualised Salary and Related Matters”. Clause 4.2 provides that the annualised salary comprehends all remuneration entitlements for all purposes, except as provided for in clause 4.7.9. Clause 4.3.1 provides that all existing entitlements to overtime and penalty payments are comprehended in the new salary; there is to be no additional payment made to an employee for work performed except as permitted by provisions within the Part. Clause 4.6 provides that the annualised salary comprises an annual base rate together with allowances. The relevant allowance here in contention is the Maintenance Service Allowance (MSA). That allowance comprises two elements, one of which is “[a]n annualised salary component that captures a portion (as described in clause 4.7) of pre-paid additional hours worked”. Clause 4.7.1 provides what are considered to be additional hours. These are either hours which are treated as being compensated for by the MSA or overtime rates. Clause 4.7.3 identifies the MSA hours obligation, expressed in hours per annum, which an employee may be required to work. The clause goes on to provide that once the annual MSA hours have been worked, any additional hours worked by an employee are to be paid for in accordance with clause 4.7.9, the overtime clause.
[11] Clause 4.7.4 deals with the scope of MSA hours. It indicates the general rule is that an employee will not receive overtime until the annual obligation of MSA hours has been worked. The clause identifies some exceptions to that rule. It is not necessary for us to set out the exceptions. It is adequate for us to note that none of the exceptions refer to clause 5.7 or the circumstances described in that clause.
[12] Clause 4.7.9 is titled “Overtime”. It provides that any additional hours expressly authorised by the employer that are worked by an employee, but are not considered to be MSA hours, are to be paid at overtime rates.
[13] Clause 5.7 is titled “Working on an RDO”. RDO is an abbreviation for rostered day off. The clause is contained in Part 5 of the Agreement, which deals with hours of work, breaks, overtime, shiftwork and leave. The clause provides that where an employee is requested to work on an RDO, the employee can choose to be paid at the single time rate and take an alternative paid (single time) day in lieu prior to the employee's next scheduled RDO. The clause also provides that if an employee is called in on two or more separate occasions for “paid overtime tasks” during an identified span of hours, the employee is to have a day off without pay, preferably to be taken before the next scheduled RDO.
[14] The provisions in Part 4 about the MSA and the basis upon which it was paid were new and had not been contained in the predecessor enterprise agreement known as the Geelong Refinery Enterprise Agreement 2009 – Maintenance Employees 8 (2009 agreement). A clause in the same terms as clause 5.7 had been in the 2009 agreement. The issue arose as to what impact the introduction of the new provisions in Part 4 had on the operation of that clause.
The Commissioner’s decision
[15] The question the unions had submitted for determination by the Commissioner was in the following terms:
“Do employees when working on their RDO’s pursuant to the Shell Geelong Refinery Enterprise Agreement 2013 - Maintenance Employees have the right to choose whether:
(a) they are paid overtime or claim MSA hours, or
(b) have their RDO reallocated to another day before the next RDO ?” 9
[16] The Commissioner identified two decisions which concerned the approach to be taken to the interpretation of enterprise agreements. He referred to Transport Workers' Union of Australia v Linfox Australia Pty Ltd 10 and The Australasian Meat Industry Employees Union v Golden Cockerel Pty Limited (Golden Cockerel).11 He then set out a number of significant facts, which he noted were either common ground between the parties or not otherwise contested. They included details of the hours of operation, rosters, the manner in which RDOs had been implemented and a comparison of a number of provisions of the Agreement with those of the 2009 agreement. He noted that one significant change between the Agreement and the 2009 agreement was the replacement of the Flexible Hours Allowance (FHA) in the earlier agreement with the MSA in the Agreement.
[17] The Commissioner described the competing interpretations about which he would rule. No issue was taken about the manner in which he formulated the question to be decided. It was in these terms:
“[15] In summary the Applicant Unions contend that the MSA adds to the operation of clause 5.7 (the Coexistent Argument).
[16] In summary the Respondent contends that clause 5.7 does not begin to operate until an employee's MSA is exhausted (the Subservient Argument).”
[18] Reference was then made to the evidence of the witnesses who were called. The unions had called Mr Towart and Viva had called Ms Murray. In the case of Mr Towart’s evidence, the Commissioner referred to what he had said about the practice, prior to December 2013, with respect to the working of RDOs, what had occurred after December 2013 and his recollection of discussions about RDOs, the FHA and the MSA in the negotiations for the Agreement.
[19] The Commissioner said that both parties had contended the words had a plain and ordinary meaning. He accepted that while the words in each of Part 4 and clause 5.7 have a plain and ordinary meaning, a conflict arises when they are read together. At paragraph [34], he said:
“[34] That conflict could have been easily resolved during the drafting of the 2013 Agreement. For example clause 5.7 could have read “Subject to the operation of the MSA in clause 4.7, the provisions of the [2003 Award] shall continue to regulate...” That is what I think was intended. Sadly the drafters chose not to amend clause 5.7 at all. In explaining the 2013 Agreement the Respondent indicated that there was no change to clause 5.7. However, it is evident that this meant “no change to the words”, not “no change to its operation”.
[35] The Applicant Unions say that, absent express words confining the operation of clause 5.7 which make it subservient to the operation of the MSA, the clauses can happily coexist. I do not agree. There is a tension between the operation of MSA and clause 5.7.”
[20] The Commissioner turned to evidence of surrounding circumstances. He did so firstly to assist in determining whether an ambiguity exists and next, having determined such an ambiguity did exist, to use that evidence as an aid to interpreting the Agreement. Such an approach is consistent with the Full Bench decision in Golden Cockerel.
[21] The Commissioner identified an email from the union delegates, which had attached Viva’s settlement offer and confirmed that “the salary shall comprehend all remuneration entitlements for all purposes and shall displace any previous entitlements. As such the total remuneration package covers any and all claims for penalties or allowances for any work completed under either the service agreement or any additional overtime worked.”He alsoidentified entries made in Viva’s offer of settlement documentation in the negotiations as expressly providing that “an employee would not receive overtime until their annual bank of hours are worked (only exceptions see points 3 & 4).” He said that the continued operation of clause 5.7 is not an exception but that “it would have been desirable if the impact of MSA on clause 5.7 had been stated expressly”. 12
[22] The Commissioner next referred to an attachment to Viva’s written submissions, which he said the unions had not objected to him receiving into evidence. He said that the documentation assisted in the interpretation of the Agreement. It persuaded the Commissioner that:
“… a) As between the 2009 agreement and the 2013 Agreement the introduction of the MSA was a radical revision. MSA was an entirely new scheme of pre-paid overtime. Therefore, meaning must be given to the common intention of the parties to the 2013 Agreement to institute the MSA.
b) Clause 4 was intended to be a comprehensive statement of the compensation to be paid for “additional hours”. This includes work on a RDO. There are only two exceptions contained in clause 4.7.4. Allowing clause 5.7 to coexist with the operation of clause 4 would create another exception and it therefore goes against the common intention of the parties that was behind the MSA.” 13
[23] The Commissioner observed, again consistently with Golden Cockerel, that in deciding on the correct interpretation to be given to the Agreement, his task was not to rewrite the contested clauses to achieve what may be considered to be a fair or just outcome. Rather, the task was one of interpreting the agreement produced by the parties. 14
[24] The Commissioner concluded that the “subservient argument”, that is, the argument for which Viva contended, was correct. Until such time as an employee had exhausted their MSA hours, he or she would not be entitled to the benefit of clause 5.7.
Grounds of appeal
[25] Against that background, we refer to the errors the appellants submit are in the Commissioner’s reasons for decision. The first is that he was in error in finding there was a conflict between clause 4.7 and clause 5.7. They submit no such conflict exists. That is so because the unions submit that the terms of clause 5.7 do not in any way deal with overtime. That clause, and clause 4.7 in particular, can be read “harmoniously” and therefore no conflict arises.
[26] We first note that the unions’ submission was not put in these terms to the Commissioner. They had proceeded below on the basis that clause 5.7 did deal, in part, with overtime, albeit not in a way which conflicted with any of the provisions of Part 4. For the reasons given by Viva, we are not persuaded the Commissioner’s finding in this regard is in error. Clause 5.7 clearly refers to the issue of how an employee is to be compensated for working on an RDO, and expressly refers to when ordinary time may be paid and when overtime is to be paid in accordance with the entitlement in the Standard Hours (Oil Companies) Award 2003. 15 The clause deals, in part, with the issue of overtime. That the practice under the 2009 agreement may have been for employees to elect to take an alternative RDO when called into work on that day, rather than be paid overtime rates, does not diminish this fact.
[27] Viva is correct, in our opinion, in describing the provisions of Part 4 of the Agreement as the leading provisions. We have referred to them earlier in this decision. We accept the submission of Viva that the provisions of Part 4 prevail over all existing entitlements to overtime or penalty payments in respect of non-rostered hours. 16
[28] Part 4 of the Agreement contains a comprehensive statement of remuneration and entitlements relating both to work during ordinary hours and additional hours. Clause 4.3.1 provides that all existing entitlements to overtime and penalty payments are comprehended in the annualised salary. The wording of clauses 4.6.3, 4.7.1, 4.7.3(iii), 4.7.4(iii), 4.7.4(iv) and 4.7.9(i) are all consistent with this construction.
[29] We also agree with the submission of Viva that Part 4 establishes a scheme whereby employees agree to work an identified number of non-rostered hours (if required) and Viva agrees to pay them an annualised salary that contains a component of prepaid additional hours worked. Clause 5.7 concerns the working of non-rostered hours. To the extent that these hours form part of the number of non-rostered hours agreed to be worked in consideration for the annualised salary, they are hours envisaged by the scheme that Part 4 puts in place. The Part deals comprehensively with the manner in which such additional hours are to be managed or dealt with. The payment of overtime for working on an RDO or the ability to elect to take another day as an RDO is not an exception to the manner in which the scheme operates. We also agree with the submission of Viva that this construction does not mean clause 5.7 is entirely without “work to do”. In this respect, we accept the submission made at paragraph 28 of its written submissions on appeal 17 about the circumstances in which the clause may operate.
[30] The next error identified by the appellants is said to be contained in the comments made by the Commissioner in paragraph [34] of his decision. We have reproduced that paragraph earlier in this decision. The appellants submit that words were read into clause 5.7 which were not there. They submit that was an impermissible approach to interpretation and resulted in the rewriting of the Agreement contrary to Golden Cockerel. We do not accept this submission. A fair reading of paragraph [34], which should be read in context with paragraphs [33] and [35], reflects the reason why the Commissioner found there was “a tension” between the operation of the MSA and clause 5.7. That finding then led him to undertake a full analysis of the relevant clauses and a careful application of the principles summarised in Golden Cockerel. His finding at paragraph [51] makes clear he was well aware that it was not open to him, in that task, to rewrite the terms of the Agreement. He had interpreted the terms upon which the parties had agreed and accepted the construction for which Viva contended.
[31] The third error is said to be the Commissioner’s failure to take into account what is described as “extrinsic material” which was tendered by the unions. The appellants submit that the Commissioner only took into account the evidence led by Viva and should have given weight to the evidence given by Mr Towart. This had described the practice traditionally adopted by employees of reallocating their RDO to a day immediately before their next RDO rather than opting to be paid at overtime rates for working on an RDO. Mr Towart had also said that at no time in the negotiations for the Agreement was clause 5.7, or how it had operated, ever raised or discussed.
[32] We are not persuaded this ground of appeal establishes any appealable error. The Commissioner did refer to, and take into account, the evidence of Mr Towart. He referred to the practice that had existed in the past in respect of the manner in which employees had exercised their right to take an alternative RDO rather than be paid overtime rates. 18 That this was the past practice was not put in issue. Nor was it in issue that neither Viva nor the unions had expressly discussed clause 5.7 during the negotiations for the Agreement. The evidence led by Viva about settlement offers in the negotiations persuaded the Commissioner that it was the parties’ intention for the provisions of Part 4 to prevail over the provisions of clause 5.7. He was entitled to accept that evidence as constituting evidence of surrounding circumstances relevant to the interpretation he should place on the provisions of the Agreement.
[33] The appellants next submit that the Commissioner should have accepted the evidence of Mr Towart as establishing that the parties had acted on a common assumption about how clause 5.7 would operate and, by retaining the wording they did in that clause they had sought to preserve the previous practice. They submit that there is authority for the proposition that if a provision has appeared in a series of agreements and it is shown that parties have conducted themselves according to a common understanding of the meaning of that provision, then it can be taken that they have agreed that the term should continue to have the commonly understood meaning in the current agreement. 19
[34] We do not accept that the evidence before the Commissioner was sufficient to establish a common assumption or understanding which the parties had about how clause 5.7 in the Agreement would operate. That submission overlooks the importance of the introduction of new provisions into the Agreement which had no earlier counterpart and which impacted on the manner in which clause 5.7 was to operate. We have earlier accepted the submission that the scheme introduced by the Agreement was different to that contained in the 2009 agreement. There was no basis to find that Viva had intended the previous practice would continue. We also agree with the submission of Viva that it is not correct to assert, as the Appellants do, that clause 4.7 is the equivalent to clause 4.5.1 of the 2009 agreement. The clauses are in different terms. The system of annualised wages put in place by the 2009 agreement differed in a number of respects from the system of annualised wages put in place by the Agreement. The evidence before the Commissioner did not establish that the parties had a common understanding as to the obligations imposed by the 2009 agreement in respect of rostered days off, or that they agreed that understanding would continue under the Agreement. 20 This ground does not establish any appealable error in the Commissioner’s reasons for decision.
[35] Finally, we are not persuaded that the content of an annexure to the employer’s statutory declaration filed in support of approval of the Agreement assists with the interpretation of clause 5.7. Assuming an entry in such a document may be relied on as an aid to interpreting a disputed clause, the entry in the chart constitutes an indication by the employer that the wording of clause 5.7 had not changed rather than providing any evidence that the manner in which the clause had previously operated would not be altered by the Agreement coming into operation.
Conclusion
[36] We are not satisfied that the grounds of appeal warrant the grant of permission to appeal in the public interest. We are also not persuaded the grounds establish that the Commissioner’s decision is attended with sufficient doubt to warrant its reconsideration, nor that substantial injustice may result if permission is refused. 21
[37] Permission to appeal is refused.
SENIOR DEPUTY PRESIDENT
Appearances:
J Wieladek for the "Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union" known as the Australian Manufacturing Workers' Union and the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia.
C O’Grady, counsel, for Viva Energy Refining Pty Ltd.
Hearing details:
Sydney.
2015.
March 19.
1 [2013] FWCA 9056.
2 [2014] FWC 9456.
3 This construction of the clause is also consistent with the Full Bench decisions in CEPU & Ors v Mechanical Maintenance Solutions[2015] FWCFB 1769, Ferrymen Pty Ltd v MUA[2013] FWCFB 8025 and Presbyterian Care Tasmania Incorporated [2013] FWCFB 8166.
4 Coal and Allied Operations Pty Ltd v AIRC (2000) 203 CLR 194.
5 (2010) 197 IR 266 para. [27].
6 CFMEU v AIRC (1998) 89 FCR 200; Wan v AIRC (2001) 116 FCR 481.
7 Wan v AIRC (2001) 116 FCR 481 para. [30].
8 [2009] FWAA 790.
9 Exhibit R2 (before the Commissioner) para. 3; Exhibit A2 (before the Commissioner) para. 3.
10 [2014] FCA 829.
11 [2014] FWCFB 7447.
12 [2014] FWC 9456 paras. [43] and [44].
13 Ibid para. [46].
14 Ibid para. [51].
15 AP825355.
16 Exhibit R1 para. 17.
17 Exhibit R1.
18 [2014] FWC 9456 paras. [18]-[20], [27]-[39] and [43].
19 The appellants rely on the Federal Court judgment in SDAEA v Woolworths Ltd (2006) 151 FCR 513.
20 Exhibit R1 paras. [33]-[35].
21 CFMEU v AIRC (1998) 89 FCR 200; Wan v AIRC (2001) 116 FCR 481.
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