Construction, Forestry, Maritime, Mining and Energy Union v AGL Loy Yang Pty Ltd
[2018] FWC 4875
•26 NOVEMBER 2018
| [2018] FWC 4875 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.739—Dispute resolution
Construction, Forestry, Maritime, Mining and Energy Union
v
AGL Loy Yang Pty Ltd
(C2018/1586)
DEPUTY PRESIDENT COLMAN | MELBOURNE, 26 NOVEMBER 2018 |
Application to deal with a dispute – interpretation of agreement
[1] The Construction, Forestry, Maritime, Mining and Energy Union (CFMMEU) has made application under s 739 of the Fair Work Act 2009 (Act) for the Commission to deal with a dispute in accordance with the dispute resolution procedure in clause 27 of the AGL Loy Yang Enterprise Agreement 2017 (2017 Agreement).1
[2] AGL Loy Yang Pty Ltd (AGL) operates a power station in the Latrobe Valley east of Melbourne, where it employs employees whose employment is covered by the 2017 Agreement, including employees who are members of the CFMMEU. The current dispute concerns the interpretation of clause 30.2 of the 2017 Agreement and a ‘policy document’ made pursuant to this clause which deal with the allocation of rostered personnel to posts at the Loy Yang mine.
[3] The application was listed before me for conference. The matter remained unresolved, and the parties agreed that the application should proceed to arbitration. The parties concurred, and I agree, that the Commission is authorised to arbitrate the dispute under clause 27 of the 2017 Agreement. I issued directions for the filing and service of submissions and any evidentiary material. The parties complied with these directions. The matter was then listed for hearing before me on 12 November 2018. Mr Peter Waanders gave evidence for the CFMMEU. Mr Tim Murnane, AGL’s mine production manager, gave evidence for the company.
[4] Clause 30 of the Agreement states:
‘30. WORK ARRANGEMENTS
30.1 Station Operations
A new staffing system is being introduced for station operations. A draft document has been issued and will be finalised through consultation within three months of the commencement of this Agreement. The document may then be changed by agreement between Company management, the relevant Employees, and/or their union(s), and agreement will not be unreasonably withheld. Where agreement cannot be reached, the matter can be resolved through the dispute resolution procedure under this Agreement, taking into consideration factors including occupational health and safety, fatigue, access to breaks, skills, and operational needs.
30.2 Mine
The current system for allocating rostered personnel to posts in the mine is set out in the policy document issued in May 2017. That document may be changed by agreement between Company management, the relevant Employees, and/or their union(s), and agreement will not be unreasonably withheld. Where agreement cannot be reached, the matter can be resolved through the dispute resolution procedure under this Agreement, taking into consideration factors including occupational health and safety, fatigue, access to breaks, skills, and operational needs.’
[5] It was uncontentious that the ‘policy document issued in May 2017’ referred to in the first sentence of subclause 30.2 of the Agreement is the document appended to the statement of Mr Waanders as attachment PW1. That document reads as follows:
‘30 May 2017
AGL Loy Yang allocation of rostered personnel to posts in the mine policy document
In accordance with clause 30.2 of the AGL Loy Yang Enterprise Agreement 2017 (Agreement), the following policy document sets out the system for allocation of rostered personnel to posts in the mine as at the commencement of the Agreement.
Where required, MOs will be allocated to posts in the order shown below:
(a) Two MFs to the MF posts;
(b) Two CDOs or, in the absence of a second CDO, one CDO and one MO to coal plant;
(c) Two Level 8 MOs / CDOs to the DST;
(d) Two Level 8 MOs / CDOs to the CAST;
(e) MO / CDO to Control Centre post;
(f) Three MOs / CDOs to the stacker stream;
(g) MOs / CDOs to the dredger stream;
(h) Two MOs / CDOs to the CA posts;
(i) Two MOs / CDOs to the second stacker;
(j) If spare MOs / CDOs are available, they will fill the remaining MO vacancies. If further spare MOs / CDOs are available, they may fill a remaining OFR vacancy.’
[6] The abbreviations employed above, and the work undertaken by employees who hold these various positions, is set out in the witness statements of Mr Waanders and Mr Murnane and is not contentious. 2 Of particular relevance to the dispute are the posts referred to at (c), (d) and (h) above, where ‘MO’ stands for ‘mine operator’ and ‘CDO’ means ‘coal delivery operators’. The ‘DST’ referred to in (c) is the dredger support team, the CAST in (d) is the conveyor attendants stacker team, and the CA in (h) is the conveyor attendant role. AGL refers to these posts as comprising the ‘shift support group’ although the union contests that any such group formally exists.3
[7] The policy document referred to in clause 30.2 of the 2017 Agreement was issued on 30 May 2017. The 2017 Agreement was put to a vote of employees from 15 to 19 June 2017. 4
[8] Both parties referred in their submissions to the origin of clause 30.2 and the policy, and it is convenient to address this briefly here. The negotiations for the 2017 Agreement were protracted. In May 2017, the Commission terminated protected industrial action under s 424 of the Act. 5 In the course of the conciliation proceedings that followed, Commissioner Roe issued a recommendation reflecting an agreed position on the content of a new enterprise agreement.6 Paragraph 8(g) of the recommendation was headed ‘minimum staffing and clause 83.2 of 2012 Agreement’, and set out the text of what is now found in clauses 30.1 and 30.2 of the 2017 Agreement. Note 2 in the recommendation explained that the resolution of a number of matters would require that ‘policy documents be finalised and accessible to employees during the access period for finalisation of the proposed agreement.’ Note 2(a) referred to the ‘new staffing system for station operations’. Note 2(b) commenced with the words ‘The current system for allocating rostered personnel to posts in the mine.’ It then stated: ‘A memo will be issued that the current system is as follows: “Where required, MOs will be allocated to posts in accordance with the order shown below: (a) to (j) as per clause 83.2.1 of the 2012 Agreement”’.
[9] Clause 83.2.1 of the Loy Yang Power Enterprise Agreement 2012 (2012 Agreement) 7 formed part of the overtime provision of that instrument and stated the following:
‘83.2.1 ALLOCATION OF PERSONNEL TO POSTS
This clause applies in respect to personnel rostered on their normal shifts (not overtime). Except in the case of j) below and sub-clause 83.2.2, MOs will be allocated to posts in the order shown below and once allocated for the first shift of a block will remain allocated to that post for the remainder of the block of shifts.
a) Two MFs to the MF posts;
b) Two CDOs or, in the absence of a 2nd CDO, one CDO and one MO to Coal Plant;
c) Two Level 8 MOs/CDOs to the DST;
d) Two Level 8 MOs/CDOs to the CAST;
e) MO/CDO to Control Centre post if required;
f) Three MOs/CDOs to the Stacker stream;
g) Required MOs/CDOs to the Dredger stream;
h) Two MOs/CDOs to the CA posts;
i) Two MOs/CDOs to the 2nd Stacker if required;
j) If spare MOs/CDOs are available they will fill the remaining MO vacancies. If further spare MOs/CDOs are available they will fill a remaining OFR vacancy if required.’
[10] It will be seen that the wording of sub-clauses (a) to (j) of clause 83.2.1 of the 2012 Agreement and the policy is very similar. One notable difference is that in the policy, the references to ‘if required/required’ that appeared in clauses 83.2.1(e), (g), (i) and (j) of the 2012 Agreement are omitted, and instead there appear the words ‘Where required’ in the sentence that appears immediately before items (a) to (j).
Background to the dispute and the questions posed by the parties
[11] The background to the present dispute can be briefly stated. In December 2017, AGL presented to employees a ‘transition plan’, under which the six operators referred to in paragraphs (c), (d) and (h) of the policy document would be reduced to four. 8 On 21 March 2018, Mr Murnane issued a letter to employees in the mine production group stating that the company proposed to implement the change from night shift on 27 March 2018.9 The AGL manning sheet that was then issued for that shift did not identify any employees allocated to the DST, the CAST or the CA roles. Instead, four employees were allocated to the apparently new roles of ‘ST1’ and ‘ST2’.10 These were abbreviations for ‘support team 1’ and ‘support team 2’.
[12] The union lodged two disputes in the Commission, one concerning AGL’s proposed change and whether it accorded with the terms of the 2017 Agreement, and the other relating to the application of the ‘status quo’ (normal work) provision in the 2017 Agreement. The latter application was resolved by AGL undertaking not to implement its proposal until the substantive dispute had been determined by the Commission. The substantive dispute is the subject of the present proceedings.
[13] Although there was some debate about the formulation of the dispute and the questions that should be put to the Commission for determination, the parties ultimately agreed that the Commission could resolve the dispute by answering the following questions:
• Is AGL proposing a change in the allocation of mine operators?
• If so, what is that change?
• Is that change allowable under clause 30.2 of the enterprise agreement?
[14] In respect of the first and third questions, the CFMMEU contends that the company is seeking to change the allocation of mine operators set out in the policy, and that such change is not permissible without the agreement of employees or the union pursuant to clause 30.2 of the 2017 Agreement. As to the second question, the union contended that the proposed change that the company is seeking to implement is for the posts referred to in paragraphs (c), (d) and (h) of the policy document to be replaced by two new ‘support team’ posts, and for the number of employees allocated to them to be reduced from six to four. 11
[15] AGL acknowledges that it is proposing to reduce the six operator positions referred to in items (c), (d) and (h) of the policy document to four, but contends that this is not a change to the policy document for the purposes of clause 30.2. Rather, it says that this is a change contemplated by the policy document itself, because the allocation arrangements listed in the policy document only apply ‘where required’. To the extent that those arrangements mandate six operators working as per items (c), (d) and (h), they are no longer required by the company. As to question 2, the company says that the change it is proposing will allocate four mine operators rather than six to the posts in (c), (d) and (h), and that the employees allocated to those posts will work flexibly to ensure that all functions comprehended by paragraphs (c), (d) and (h) in the policy are carried out efficiently. 12
[16] I make some brief observations about the three questions put to me for determination by the parties. As to the first question, AGL is clearly proposing a change in the allocation of mine operators. The real issue that the parties raise by this question is whether AGL is proposing a change that amounts to a change of the policy document, which in turn is relevant to the answer to question 3. In relation to the second question, the substance of the change that the company seeks to implement is not seriously in contest. It appears that the union harboured some concern about precisely what the company’s proposed change entailed, and in particular whether the creation of the new ‘ST’ positions formed part of the proposal, which evidently they do not.
[17] In relation to question three, it is clear from clause 30.2 that a change to the policy document is allowable if it is agreed with the ‘relevant employees and / or their union’. But the proposed change in this matter is not agreed to by any relevant employees or the union. The third question is really whether the company can implement the change unilaterally, or whether it must seek the agreement of employees and / or the union under clause 30.2. This question goes to the essence of the current dispute.
Submissions of the CFMMEU
[18] The CFMMEU submits that the company is proposing a change in the allocation of mine operators and that this change constitutes a change to the policy document. The union says that the policy must be read in the context of clause 30.2 of the 2017 Agreement which states that the ‘current system for allocating rostered personnel to posts in the mine is set out in the policy document issued in May 2017’. The policy may only be changed by agreement, which agreement cannot be unreasonably withheld. If agreement cannot be reached, the matter can be resolved under the disputes procedure.
[19] The CFMMEU submits that the policy’s reference to ‘where required’ must be read in this context, and that these words do not simply leave it to the company to determine what is ‘required’ in respect of the allocation of personnel at the mine. The union says that such an interpretation would render the posts and the numbers identified in the policy document substantially meaningless, and deprive the process of agreement and arbitration provided for in clause 30.2 of any real utility.
[20] The union accepted that the words ‘where required’ afford the company a measure of discretion, and cited various examples of changes that AGL could make which would not amount to a change in the policy and would not need to be agreed with the employees or the union. One example was a scenario where there are no stackers in operation on a particular shift, and therefore no allocation of personnel would be ‘required’ for the stacker stream referred to in paragraph (f) of the policy document. Similarly, if all dredgers were to be in manual mode, no allocation of personnel would be ‘required’ for the DST referred to in paragraph (c) of the policy document. In such cases, the company could depart unilaterally from the allocation arrangements stipulated in the policy; it would not need to seek employee or union agreement, because those arrangements would not be ‘required’. The union recognised that there would be other situations where particular allocation arrangements set out in the policy would not be ‘required’, and could be changed unilaterally by the company. It cited changes due to operational matters on a particular shift such as machine availability, the condition of the coal face, or variations in the demand for coal from the power stations.
[21] In its written submissions, the union did not set out a definitive interpretation of the words ‘where required’, relying instead on examples to illustrate the bounds of the discretion conferred on AGL by these words. In the hearing I sought to clarify the interpretation that underpinned the union’s position, and noted that the union’s submissions appeared to proceed on the basis that the words ‘where required’ mean ‘where objectively needed’. The union agreed that this accorded with its interpretation. Of course, I am not confined by the position of the parties in my consideration of what is the correct interpretation of the relevant provisions.
[22] The CFMMEU further submitted that the words ‘where required’ were never intended to afford AGL an unlimited discretion by leaving it up to the company to decide what arrangements the company ‘required’. It said that clause 30.2 and the policy were agreed in the context of intense negotiations and conciliation proceedings before Commissioner Roe, and that the outcome was to maintain the ‘current system for allocating rostered personnel to posts in the mine’, as clause 30.2 says, and to record that system in the policy document. The union contended that the policy document and the allocation arrangements it contains can only be changed by agreement, unless there is a requirement (an objective need) to depart from them. It contended that the company’s proposed change does not arise from necessity, but as part of a broader organisational ‘transition plan’ directed at efficiency and flexibility.
[23] Finally, the union emphasised that clause 30.2 refers to the ‘current system’ for allocating personnel to posts, and that, if the company is free to change the allocation arrangements in the policy as it requires, there is little ‘system’ to speak of, and instead only a broad employer discretion. It also noted that the company’s ‘operational needs’ are one of the factors identified in clause 30.2 as relevant to the resolution of a dispute, which suggests that the company’s own view of its requirements cannot be determinative of whether the company can unilaterally implement a change to the policy.
Submissions of AGL
[24] AGL says that the changes it proposes are that, in accordance with its operational requirements, it will allocate four mine operators to the ‘shift support group’ (the DST, CAST and CAs) rather than six. These four employees will be expected to work flexibly to ensure that all functions normally allocated to the shift support group (which functions vary from shift to shift) are carried out efficiently. 13 The company says that it can make these changes without the agreement of employees or the union under clause 30.2 because the policy gives it the right to decide what allocations are ‘required’ on each shift, and that its proposed change to allocation arrangements is not a change to the policy document itself.
[25] The company submits that there are two key issues that must be considered: what are the limits of the words ‘where required’ in the policy; and in what circumstances might the policy need to be changed by agreement pursuant to clause 30.2 of the 2017 Agreement? 14 The second issue is important, because the process of making changes to the policy by agreement or through the disputes procedure as contemplated by clause 30.2 must logically have some work to do; the company accepts that a proper interpretation of the words ‘where required’ could not render that process otiose.
[26] AGL contended that the words ‘where required’ mean ‘where required by AGL in accordance with its operational requirements’. 15 It said that it is for the company to identify these requirements, including which posts require allocations of labour and in what numbers, and that it can do so by reference to any lawful and operationally defensible reasons. AGL says that reading ‘where required’ in any different way would constrain its management prerogative.
[27] The company said that a further reason for not interpreting the policy as imposing manning restrictions was the fact that the 2017 Agreement, in contrast to the 2012 Agreement, does not impose fixed staffing at the mine (the union says otherwise). In this connection, AGL referred to various provisions in the 2012 Agreement that imposed manning limitations or demarcations that were not replicated in the 2017 Agreement. 16
[28] The company also submitted that the recommendation of Commissioner Roe did not contemplate the continuance of any form of fixed staffing at the mine. It pointed to the heading in paragraph 8(g) of the recommendation, which refers to both ‘minimum staffing’ and ‘clause 83.2 of the 2012 Agreement’. The reference to ‘minimum staffing’ concerned the arrangements for the station, not the mine. The policy document that was developed in connection with the station (see clause 30.1) did contain minimum staffing levels (a minimum of 12 staff, with more allocated as required). 17 AGL says that no such minimum staffing was developed for the mine.
[29] AGL further contended that the proper interpretation of the policy is informed by the fact that its text derived from clause 83.2.1 of the 2012 Agreement, which formed part of the overtime provision in that agreement. It submitted that, like clause 83.2.1 of the 2012 Agreement, the policy and clause 30.2 establish an allocation system to determine how overtime is filled, whereby required posts are filled with employees who possess the requisite skills and overtime is allocated in a way which suits those who are allocated to the shift. 18 AGL contended that neither clause 83.2.1 nor the policy ‘fix’ the number of posts ‘required’ or prescribe minimum staffing of those posts.
[30] The company contended that, because the change it proposes to make reflects its operational requirements, it does not seek to make any change to the policy document. The allocation arrangements only apply ‘where required’; to the extent that the change depart from the allocation arrangements, the latter are ‘not required’, and to alter them does not change the policy. Therefore, the company says, it does not need to seek the agreement of the employees or their union under clause 30.2.
[31] AGL contended that its interpretation of the policy does not result in the process of agreed change and dispute resolution contemplated by clause 30.2 having no work to do. It said that this process would have to be followed if AGL wanted to change the policy document itself, and cited various examples. I address these further below.
Principles of interpretation
[32] The principles that apply to the task of construing an enterprise agreement were summarised by a Full Bench of the Commission in AMWU v Berri Pty Ltd.19The interpretation of an enterprise agreement begins with a consideration of the ordinary meaning of the relevant words. The resolution of a dispute over the interpretation of an enterprise agreement will turn on the language of the agreement, having regard to its context and purpose. Context might appear from the text of the agreement as a whole, the disputed provision’s place and arrangement in the agreement, and the legislative framework under which the agreement was made.20 The task of interpreting an enterprise agreement does not involve rewriting the agreement to achieve what might be regarded as a fair or just outcome.
[33] AGL advanced a number of propositions about the approach that the Commission should take to the resolution of the dispute and to the interpretation of clause 30.2 and the policy.
[34] The company said that the Commission’s task in the present matter does not begin and end with an interpretation of the 2017 Agreement and the policy, and that its role as a private arbitrator is broader than this, namely to resolve the dispute. I note that the Commission’s role depends on the terms of the relevant agreement. Interpretation of the agreement will be a facet of the Commission’s function, if for no other reason than because the Commission must ascertain the nature and limitations of its role. In the present case, clause 27.2 states that the Commission ‘may resolve the dispute by arbitration’, subject to the relevant requirements having been met. (I leave to one side whether the word ‘may’ confers discretion on the Commission as to whether it should arbitrate. The parties proceeded on the basis that the Commission is empowered to arbitrate, and should do so. If I did have discretion, I would exercise it). To resolve the dispute, I will answer the questions that the parties have submitted for determination, to the extent that I am able to do so, based on the material before the Commission. In order to do this, I must correctly interpret the relevant terms of the 2017 Agreement, applying the principles of interpretation referred to above.
[35] AGL also submitted that the Commission should take account of ‘broader industrial concepts’, in particular, what it described as the ‘reluctance of an industrial tribunal to interfere with an employer’s reasonable management prerogative to allocate and arrange work requirements’ unless there is ‘the clearest basis for a finding that the employer has agreed to qualify that prerogative’. 21 AGL contended that the Commission should resolve the dispute in a way that best preserves AGL’s ability to exercise its managerial prerogative to allocate and arrange work in the mine to meet its reasonable operational requirements. However, the Commission’s interpretation of an enterprise agreement must give effect to the terms of the agreement. Section 739(5) prohibits the Commission from making a decision that is inconsistent with the enterprise agreement. There is no basis to strive for or favour an interpretation that accords with any ‘broader industrial concept’ or presumption in favour of any particular type of outcome.22 If a proper interpretation of an enterprise agreement identifies a limitation on management prerogative, it is one the employer has assented to, not an inference on the part of the Commission.
The answers to questions 1 and 2
[36] The answers to questions 1 and 2, understood in the light of my earlier remarks about those questions, are straightforward and in my view not fundamentally contentious. In respect of question 1, it is clear that AGL is proposing a change in the allocation of mine operators. The parties disagree about the characterisation of that change. The company says that it is not a change to the policy or the policy document, but a change within it, and the union says otherwise. But this controversy forms part of question three. The first question, whether AGL is proposing a change in the allocation of mine operators, must be answered in the affirmative.
[37] As to question 2, the change proposed by AGL is that it will allocate four instead of six mine operators to the ‘shift support group posts’, being those contemplated at items (c), (d) and (h) of the policy. In relation to the characterisation of the change proposed by AGL, the CFMMEU contended that the company’s submissions appeared to reposition the proposal so as to include the possibility of retaining the same names of the posts in question but changing their role and the numbers allocated to them. 23 However, in my view, whether that is so is not a matter of significance. It goes to form rather than substance, and the essence of what the company proposes to change is not in dispute. I accept AGL’s stated position in relation to the change it proposes to make, as set out in its submissions, which is that in accordance with its operational requirements, AGL will allocate four rather than six mine operators to what it terms the ‘shift support group’ (the DST, CAST and CAs), and that these employees will be expected to work flexibly to ensure that all relevant functions are carried out efficiently.
Question 3
[38] As I explained earlier, the third question asks whether the company can implement its proposed change unilaterally, or whether it must seek the agreement of employees or the union in the manner contemplated in clause 30.2. If AGL obtained such agreement, plainly the change would be allowable. But AGL contends that it does not need to seek agreement, because it does not propose to change the policy document, but is rather acting within it. Of central relevance to the resolution of the dispute is the proper meaning of the words ‘where required’ in the policy document.
[39] These words are to be interpreted in the context of the policy document, clause 30.2 and the 2017 Agreement as a whole. The policy document is referred to in clause 30.2 of the 2017 Agreement, and the policy itself refers to clause 30.2. The policy document was prepared after the text of clause 30.2 was settled; the latter was already set out in Commissioner Roe’s recommendation. However the Commissioner had effectively summarised in the recommendation what the content of the policy document would be.
[40] I begin with the wording of the policy itself, the full text of which is set out above. It commences with a heading that says: ‘AGL Loy Yang allocation of rostered personnel to posts in the mine policy document.’ It then says that in accordance with clause 30.2 of the 2017 Agreement, the ‘following policy document sets out the system for allocation of rostered personnel to posts in the mine as at the commencement of the Agreement.’ This reflects the first sentence in clause 30.2 which states that ‘the current system for allocating rostered personnel to posts in the mine is set out in the policy document issued in May 2017.’ The policy is clearly ‘in accordance’ with the 2017 Agreement, in the sense that it is the policy contemplated by clause 30.2. It is evident that the policy establishes a ‘system’ for allocation of rostered posts to the mine. And it is clear from the words ‘as at the commencement of the Agreement’ that the policy contemplates the possibility of change to the allocation arrangements in the document.
[41] Then follow the contentious words of the second paragraph: ‘Where required, MOs will be allocated to the posts in the order shown below.’ There follows a list of items (a) to (j), most of which indicate a role (MF, CDO etc.), a number of employees in that role, and a work area to which employees in the roles will be allocated. Thus, item (c) reads ‘Two Level 8 MOs / CDOs to the DST’. This means two Level 8 mine operators / coal delivery operators are allocated to the dredger support team. It is also important to note the reference to the words ‘in the order’. Thus, as well as identifying roles, numbers of employees and work areas, the policy requires a sequence: first, that the roles in item (a) be allocated (two MFs to the MF posts), then the roles at item (b) (two CDOs to the coal plant etc.), and so on. The rationale for an allocation order is connected with operational needs and employee preferences for allocation.
The meaning of ‘where required’
[42] What do the words ‘where required’ mean in this context? The word ‘require’ can mean to demand or ask for authoritatively (for example, ‘the employer has the right to require employees to work reasonable overtime’). It can also mean to need (e.g. ‘two employees are required in order to do this task safely’). 24 In the policy, the word ‘require’ appears in a passive construction. There is no subject, that is, no statement as to who or what requires something. Sometimes the words ‘where required’, read in context, will connote an implied subject, so as to mean, for example, ‘where required by the employer’. However, they can also be used impersonally, where no particular subject is contemplated, so as to mean ‘where it is required’. In this context, ‘required’ means ‘needed’, not ‘authoritatively demanded’ or ‘asked for’.
[43] AGL’s argument is that there is an implied subject in the words ‘where required’ that appear in the policy, and that the subject in question is the company. The union’s interpretation of the words ‘where required’ is that they mean where required by the circumstances, where needed.
[44] Read in isolation, a statement that, ‘where required’, operators will be allocated to posts in accordance with a particular arrangement, might connote that the employer is the implied subject, and that it will decide whether it requires (either in the sense of demanding or needing) the arrangements in a particular case. However, the words must be read in the context of the entirety of the policy document and the 2017 Agreement as a whole, including in particular clause 30.2. In my view, such a contextual reading leads clearly to the conclusion that the words ‘where required’ mean ‘where needed’, and that need is to be assessed objectively.
[45] First, the policy document sets out a reasonably detailed ‘system’ for allocation of rostered personnel to posts in the mine. It specifies ten items identifying posts, a certain number of employees for those posts, work areas to which they will be assigned, and an allocation sequence. If ‘where required’ means ‘where the company requires’, there would seem to be little point in erecting such a detailed structure. The allocation of employees to posts could have simply been left to the discretion of the company. The company contended that the allocation arrangements in the policy document can be understood as establishing a default position, but one that is subject to the company’s requirements from time to time. I accept that this is an arguable construction of the document itself, however I do not favour it; had this been intended, one would have expected the ‘default’ nature of the arrangements to be explained in some way, or for the company’s broad discretion to be explicit.
[46] Even if it were accepted that the policy document on its own is capable of being read as establishing a default allocation system which is subject to the company’s assessment of its own requirements, I consider that the context of clause 30.2 makes clear that the words ‘where required’ mean ‘where objectively needed.’ This clause states that the ‘current system for allocating rostered personnel to posts at the mine is set out in the policy document issued in May 2017’. Reading to this point in clause 30.2, the policy document might plausibly be a default system affording significant discretion to the company. But the clause then says that the policy document can be changed by agreement between the company management, relevant employees and / or their union(s). The fact that clause 30.2 says that the policy document may be changed by agreement, and that agreement will not be unreasonably withheld, tells against a construction of the policy document that recognises in one party a very wide discretion to make unilateral changes under the policy itself.
[47] Also telling against the company’s construction is the fact that clause 30.2 goes on to provide a process for what occurs when there is no agreement, namely that the matter can be resolved through the disputes procedure, which includes the possibility for arbitration by the Commission. The clause then stipulates what considerations will be taken into account when the matter is being resolved under the disputes procedure, and that these include occupational health and safety, fatigue, access to breaks, skills and operational needs. The framers of the agreement have foreseen a need to have ready a provision to resolve disputes over whether one side or another has unreasonably withheld consent. This is a further clear indication that the policy document referred to in clause 30.2 does not confer a wide-ranging discretion on the company to change the allocation arrangements unilaterally. It should be remembered that the content of the policy document was known at the time the text of the 2017 Agreement was finalised: the policy document was created in May 2017 and the enterprise agreement was put to the vote in June 2017. Unlike the policy document referred to in clause 30.1, the policy did not remain to be finalised through further consultation. I also agree with the CFMMEU that the reference in clause 30.2 to the company’s ‘operational needs’ being one of the factors relevant to the resolution of a dispute suggests that the company’s own view of its operational requirements under the policy is not determinative of what is ‘required’.
[48] In light of the content of the allocation arrangements set out in the policy document, including the words ‘where required’, the parties have said that changes to the document will be made by agreement, that agreement will not be unreasonably withheld, and that the Commission can ultimately resolve disputes over this matter. Clearly then the question of what work these arrangements would still have to do if AGL’s interpretation were accepted is a matter of interpretative significance.
[49] The company says that, on its interpretation, the change process in clause 30.2 is relevant in cases where one party seeks to change the policy document itself. It cites examples of how this might arise.
[50] First, AGL referred to an example concerning item (a) of the policy. As Mr Murnane explained in his witness statement, since 1 July 2018, mine fitters have formed part of the mine maintenance group, which takes their allocation outside of the system provided for under the policy document. The company says that this change was agreed by the CFMMEU and AGL, and that the parties acknowledge that the new approach will be formalised by an appropriate change to the policy document. It says that this is a change pursuant to the arrangements contemplated by clause 30.2. 25 The union concurs that this change could not have been implemented unilaterally, and that the union agreed to it.26 However, the fact that the company might concede or acknowledge that it had to seek agreement under clause 30.2 in this instance says nothing about whether the company’s interpretation of the policy is correct. The question is whether, on AGL’s construction of the policy, the company was required to seek agreement to make this change. In my view, if the company’s interpretation of the words ‘where required’ were accepted, the change above concerning item (a) of the policy would simply be an operational requirement of the company that AGL would be able to implement unilaterally within the policy. There would be no need to change the policy document. I do not see the case of the mine fitters as an example of how the company’s interpretation of ‘where required’ leaves work to do for the change process in clause 30.2.
[51] The company also contended that, if it wished to reverse the order of allocation of posts prescribed in the policy, which in turn might have a different implication for resourcing and the requirement for allocation of overtime, it would need to change the policy and therefore seek agreement pursuant to clause 30.2. AGL says that, unless the policy were changed, it would have to allocate personnel to ‘such of the posts which are ‘required’ in the order set out in the policy’. 27 However, I cannot identify any basis for the contention that the company can change the number of posts without changing the policy (because certain numbers are not required), but that it cannot change the order of allocation. There is no reason why, if the company’s interpretation of the words ‘where required’ is accepted, the number and the order of the posts in the policy would not both be subject to the company’s operational requirements. The words ‘where required’ appear at the start of the sentence that introduces the allocation arrangements, and all that follows is subject to them. I note that this sentence refers to the order, but not the number or identity of the positions, or the work areas in question. It does not say that MOs will be allocated ‘in the number and order shown below’. But nor does the sentence refer to the level or type of operator or the work area. Yet all of this, in my view, is clearly part of the ‘system for allocation of rostered personnel to posts at the mine’. The introductory sentence includes reference to the order because this element of the allocation arrangements is not otherwise dealt with in items (a) to (j).
[52] The company argued that the discretion afforded to it by the words ‘where required’ was ‘primarily’ a reference to the number of people (if any) to be allocated to posts. 28 It says that allocating employees of a different or lesser classification than those identified in the policy to the posts which are required might necessitate a change to the policy, particularly if the change engaged the safety, operational needs and/or other considerations contemplated by the change process in clause 30.2 of the 2017 Agreement. AGL said, for example, that the policy requires personnel allocated to the DST (item (c)) to be either Level 8 MOs or CDOs, and that, whilst this is currently operationally sensible, AGL’s view of this might change. The company might decide that on some shifts it is sufficient to staff the dredger stream with two Level 7 mine operators, or a Level 6 or Level 7 MO and a CDO. Similarly, it said, the company might require a lesser classification or qualification in relation to employees allocated to the CAST (item (d)). AGL submitted that it would require a change to the policy for it to appoint anyone other than a Level 8 MO or a CDO to the CAST, once there is an established requirement for an MO / CDO to be so allocated. However, on the company’s interpretation, the ‘requirement’ for it to appoint Level 8 MOs to the CAST would no longer exist; there would be a different operational requirement, because AGL had determined this to be so. There is simply no textual basis to support the contention that, on the company’s interpretation of the policy, the example given would require agreement under clause 30.2.
[53] I do not consider that the scenarios raised by the company would require it to use the agreement process under clause 30.2, if its interpretation of ‘where required’ is accepted, namely that the words ‘where required’ mean ‘where required by the company in accordance with its operational requirements’. Although AGL offers concessions as to what the limitations of this discretion might be, these limitations are not the product of the company’s interpretation. The words ‘where required’ appear at the start of the sentence that establishes the allocation arrangements in the policy; all of what follows those words is qualified by it. I do not accept the company’s examples of how its interpretation leaves clause 30.2 work to do; in each of them, the company would no longer have the relevant operational requirement, the allocation arrangements would not be required by the company, and AGL could simply make the proposed change unilaterally.
[54] On the company’s construction, it would very rarely be necessary to change the policy: the company could operationally require a departure from the allocation arrangements, and it would be a change within the policy. If the company were to abolish the policy, or depart from the arrangements in a way that did not reflect any company requirement, this would amount to a change in the policy, and afford the clause 30.2 ‘process’ some modest work to do under the company’s interpretation. During the hearing, AGL suggested, as an alternative position, that it would be enough if its interpretation of the policy left even a small role for clause 30.2. 29 But as I noted above, the framers of the document established a process, including arbitration by reference to particular considerations, in cases where there was no agreement about a change to the policy. I think it unlikely that they established this framework only for it to apply to a small and improbable category of disputes.
[55] I note for completeness that AGL referred to two decisions of the Full Federal Court which it said illustrated how the words ‘where required’ can mean ‘where required by the employer’. First, in Telstra Corporation Limited v Peisley, 30 the Court considered the meaning of the words ‘where an employee is required to work overtime on a regular basis’, for the purpose of calculating an employee’s normal weekly earnings under the Safety, Rehabilitation and Compensation Act 1988. In the relevant legislative context, the Court found that the word ‘required’ meant required by the employer, including through a legally unenforceable voluntary agreement. However, at issue in that case was whether there was any requirement at all, not whether ‘required to work’ meant ‘required by Telstra’, which it clearly did. In its decision, the Full Court noted that the word ‘require’ is of ‘wide import’ and that the scope of meanings identified in dictionaries underscores the importance of the context in which the word is used.31 Secondly, in Tyndall v Goulburn Valley Health,32 a Full Court considered the meaning of a vehicle allowance provision in an enterprise agreement that contained the words ‘where an employee is required to provide her / his own mode of conveyance in connection with his / her duties’. The Court concluded that the clause should be read as if the words ‘by his or her employer’ appeared after the word ‘required’. But the context of that provision made clear that it could only be the employer that would require the employee to use his or her own vehicle. The question was rather whether the employer had in fact required the employee to use a personal vehicle, in the absence of any express written or oral command. Although these two cases illustrate how the word ‘require’ can mean ‘required by the employer’, the relevant meaning was determined by the context of the instrument in question, as indeed it must be in this case. I do not consider that they assist AGL’s argument in the present matter.
[56] Finally, during the hearing, AGL contended that, even if it is accepted that the words ‘where required’ mean ‘where needed’, the question of whether the relevant allocation arrangements are in fact needed in a particular case is a question that only the company can sensibly answer. On this argument, ‘where needed’ means ‘where the company needs’, assessed by it; but this is little different from AGL’s contention that the words mean ‘where the company requires’. In my view, the words ‘where required’, used in the way and in the context I have described above, connote an objective need. Of course, the company’s perspective on what is objectively needed will be important, but it will not be definitive.
The policy’s connection with overtime and the 2012 Agreement
[57] Returning to the company’s submission that clause 30.2 and the policy concern overtime allocation, I find nothing in the words of these provisions that says or suggests that they are limited in this way, nor does their place in the agreement connote such a limitation. They are not contained in the overtime provision in the 2017 Agreement (clause 7). The fact that the text of the policy emanated from an overtime provision in the 2012 Agreement does not mean that its interpretation is to be similarly confined in the new context of the 2017 Agreement. I note also that clause 7.9 of the 2017 Agreement specifically deals with an overtime allocation policy, in a manner not dissimilar to the allocation policy presently at issue.
[58] I accept Mr Murnane’s evidence that the policy is relevant to the allocation of overtime. But on a plain reading of clause 30.2 and the policy, their subject matter is directed at a broader purpose. There is no textual or contextual basis to limit the operation of these provisions to the allocation of overtime. It is perhaps a minor curiosity that the parties to the 2017 Agreement chose to borrow wording from an overtime provision in the predecessor agreement for the purposes of a broader allocation provision. Mr Waanders explained that the reason for this was that the company had, in connection with proceedings it brought to terminate the 2012 Agreement, undertaken to continue to apply the overtime provision, but not other ‘manning’ provisions, and that therefore clause 83.2.1 (being part of the overtime clause) was a convenient neutral reference point. This appears to me to be a plausible explanation. However, no explanation is required. Clause 30.2 and the policy are to be read and interpreted on their terms, in the context of the 2017 Agreement as a whole, and there is nothing to support a confinement of its operation to overtime.
[59] AGL submitted that the allocation policy has brought with it some of the ‘soil’ from the 2012 Agreement, and that an important aspect of that context was that clause 83.2.1 was part of the overtime provision. But the words in the policy have a new context, linked to clause 30.2, not the new overtime provisions, and its plain words are of general application.
[60] AGL contended that clause 83.2.1 of the 2012 Agreement used the concept of ‘required’ or ‘if required’ in subclauses (e), (g), (i) and (j), but that in none of those cases did the subclause itself ‘require’ the allocation of particular employees. 33 It argued that, because the text of the policy was borrowed from clause 83.2.1, it should be understood in the same way in its new context, that is, as not establishing fixed staffing. But again, the text is to be understood in its present context, that of the 2017 Agreement. In my view, if the meaning of ‘required’ in clause 83.2.1 carries significance for the present dispute, it is to illustrate how the word can mean ‘needed’. For example, in clause 83.2.1(i), if the second stacker is not operating, the associated MOs/CDOs would not be required (needed).
[61] As to AGL’s contention that, unlike the 2012 Agreement, the 2017 Agreement does not provide for fixed manning at the mine, I do not consider this to lend support to the company’s interpretation of the policy. Mr Murnane noted in his witness statement that the role of the members of the ‘shift support group’ was formerly prescribed in clause 85.4.5 of the 2012 Agreement, but that no similar provision was included in the 2017 Agreement. Clause 30.2 and the policy refer to ‘posts’ for different employees and numbers are attached to particular posts. There are ways in which the arrangements can be changed, unilaterally in some cases and by agreement in others, and on this basis it can be said that there are no fixed manning levels. However, in my view clause 30.2 and the policy clearly do regulate ‘manning’ levels. And in any event, the fact that other restrictions in the 2012 Agreement may not have found their way into the 2017 Agreement is not a basis to infer that clause 30.2 or the policy should be read down in some way.
[62] Further, I do not accept AGL’s argument that the wording of the recommendation supports its position. I find the heading in paragraph 8(g) of the recommendation, which referred to ‘minimum staffing’ and ‘clause 83.2 of 2012 Agreement’, of little assistance. The former refers evidently to arrangements for the station, for which the company says there are minimum staffing requirements, and the latter to the mine, however this does not tell against the construction of the 2017 Agreement and the policy that I have set out above. First, one would not necessarily infer from this heading that there is no minimum staffing at the mine. Secondly, in the present context, the interpretative value of a heading in a recommendation must be questionable. And thirdly, the notion that the union’s argument gives rise to ‘minimum staffing’ under the policy is not accurate. The policy does not prescribe mandatory, minimum staffing: the words ‘where required’ afford some flexibility (as I have described earlier), and the policy document may be changed through the process in clause 30.2.
Other issues
[63] The company contended that the variable operating environment of its business underscores the rationale for the flexibility that arises from its interpretation of the policy. Mr Murnane gave evidence that this variability is associated with a range of issues, including machinery issues, demand for coal and the weather, to name only a few. 34 I accepted this evidence. But this does not provide a basis for reading down the words of clause 30.2 and the policy. The variable operating environment might produce an objective necessity for a particular change, and where that is the case, it can be implemented without changing the policy, and without agreement. Many of the matters identified as contributing to variability in the operating environment appear to pertain to matters that may change from shift to shift. I note here that the company proposes a permanent change, although there is no reason in principle why a permanent change might not be objectively needed.
[64] There are clearly some circumstances where certain employees are not required, in the sense that they are plainly not needed in the relevant work area. For example, if none of the four dredgers is working, the union acknowledges that no operators are required for the DST under item (c) of the policy. 35 Not all machines are operated on every shift.36 Sometimes it will be possible to say definitively that a particular post is needed or not needed. Other cases will no doubt be debated. The company contended that the lack of a bright line in such cases was a reason for the Commission to favour its interpretation of the words ‘where required’. It said that if ‘where required’ means ‘where required by the company’, the meaning will almost always be clear; if it means ‘where objectively needed’, this will not be the case and the provision would be unworkable. Clearly the company’s interpretation would be easier to apply, as AGL would have a very wide discretion and there would be little room for dispute. However, the meaning I consider the words to have is perfectly workable. If there is a dispute about whether certain arrangements are objectively needed, it can be dealt with under the disputes procedure, including ultimately by the Commission.
[65] One theme in the company’s case was that it would be unreasonable for there to be manning restrictions in an enterprise agreement and that the merit of the dispute lies in its favour. However, the role of the Commission is to properly interpret the agreement and resolve the dispute, not to bring about particular outcomes. I note that both the company and the union made submissions as to what they each had understood clause 30.2 and the policy to mean, but only evidence of common intention would be relevant to the interpretation of the agreement.
The answer to question 3
[66] The meaning of the words ‘where required’ in the policy, read in context, is ‘where objectively needed’. It will be recalled that the policy says that, ‘where required’, MOs will be allocated in the manner specified. The answer to the point of construction raised by the third question is that the company may implement a change to the allocation arrangements in the policy where those allocation arrangements are not required(not objectively needed).
[67] But can the particular change proposed by AGL in this case be implemented without agreement? The CFMMEU says that the changes proposed by AGL do not arise from any objective need, but as part of a broader organisational ‘transition plan’ that rewrites the roles of the posts and the numbers assigned to those posts in the policy document. 37 The union says that such changes require the agreement of employees or the union under clause 30.2. It says that I should answer question 3 simply in the negative.
[68] However, the company has not had an opportunity to put forward a case based on what I have determined to be the proper construction of the relevant provisions. It may yet wish to do so. Accordingly, I will record an answer to the third question that reflects my interpretative conclusion. If AGL wishes to contend that, based on this conclusion, its change can be implemented without agreement, it can advise my chambers and I will list the matter for further programming.
[69] More generally, I would note that, if there is a dispute about whether the allocation arrangements in the policy are ‘objectively needed’ in a particular case, it can be progressed through the disputes procedure. If the company seeks employee and union agreement to a change, and agreement is not forthcoming, AGL may contend that agreement has been unreasonably withheld, and take this dispute through the disputes procedure also. Where the two disputes concern the same proposed change, they could potentially be taken through the disputes procedure and be determined by the Commission at the same time. The question of whether the allocation arrangements are objectively needed in a particular case will not be determinative of whether withholding consent to a proposed change is reasonable.
[70] I appreciate that the outcome of this decision does not deliver the finality that the parties seek. However, in my view it is the outcome that is dictated by the correct interpretation of the 2017 Agreement and the policy, in resolution of the questions that the parties have asked me to determine, based on the evidence and contentions that have been submitted.
Conclusion
[71] I consider that the policy document and clause 30.2 of the 2017 Agreement, in their application to the present dispute, have a plain meaning. Taking into account the ordinary meaning of the text of the provisions, in the context of the 2017 Agreement as a whole, the words ‘where required’ mean ‘where objectively needed’, not ‘where the company requires’.
[72] For the above reasons, the answers to the questions posed by the parties for determination by the Commission are as follows:
Question 1: Is AGL proposing a change in the allocation of mine operators? Yes
Question 2: If so, what is that change? The proposed change is that, in accordance with AGL’s operational requirements, the company will allocate four rather than six mine operators to what it terms the ‘shift support group’ (the DST, CAST and CAs), and that these employees will be expected to work flexibly to ensure that all relevant functions are carried out efficiently.
Question 3: Is that change allowable under clause 30.2? The change to the allocation arrangements in the policy is allowable without agreement if the relevant allocation arrangements are not required, meaning not objectively needed.
DEPUTY PRESIDENT
Printed by authority of the Commonwealth Government Printer
<PR610292>
Appearances:
A. Kentish for the CFMMEU
D. Williams for AGL Loy Yang Pty Ltd
Hearing details:
2018
Melbourne
12 November
1 AE424736
2 Witness statement of Peter Waanders, [17] – [26]; witness statement of Tim Murnane, [26]
3 See CFMMEU submissions in reply, [4] – [7]
4 Witness statement of Peter Waanders, attachment PW12
5 [2017] FWC 2533
6 Recommendation of 26 May 2017; witness statement of Peter Waanders, attachment PW11
7 AE894678
8 Witness statement of Peter Waanders, [27]; witness statement of Tim Murnane, [47]; attachment TM16
9 Witness statement of Tim Murnane, [44] – [47]; attachment TM15
10 Witness statement of Peter Waanders, [34]; attachment PW7
11 CFMMEU submissions, [8]
12 AGL submissions, [4] at (a)
13 AGL submissions, [4]
14 AGL submissions, [12]
15 Ibid, [31]
16 Ibid, [18]. See also clause 82.3 (Table 1) of the 2012 Agreement, and related clauses including clause 82.10 (plant testing), clause 82.4.3 (extra manning) and clause 85.4.5 (SSG)
17 AGL submissions, [57]
18 Ibid, [65] – [66], [70]
19 [2017] FWCFB 3005
20 See point 1 in paragraph 114 of Berri; and point 8 of paragraph 41 of AMIEU v Golden Cockerel Pty Ltd [2014] FWCFB 7447
21 AGL submissions, [10]
22 In a recent matter, I reject a similar contention to a different effect, namely that the Commission should favour interpretations that recognise employee entitlements: Tasevski and others v Qantas Ground Services Pty Ltd[2018] FWC 4879. There are no general interpretative presumptions in favour of employee, employer or anyone else
23 CFMMEU submissions in reply, [7]
24 For example, Macquarie Concise Dictionary, fifth edition
25 AGL submissions, [42] – [44]
26 CFMMEU reply submissions, [29]
27 AGL submissions, [45] – [46]
28 AGL submissions, [50]
29 Transcript at PN967
30 [2006] FCAFC 79
31 At [33]
32 [2016] FCAFC 139
33 AGL submissions, [61]
34 Witness statement of Tim Murnane, [50]
35 Witness statement of Peter Waanders, [19]
36 Ibid, [10]
37 See the witness statement of Tim Murnane, [60], which addresses the purpose of the proposed change
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