Construction, Forestry, Maritime, Mining and Energy Union v DP World Melbourne Ltd
[2022] FWC 1738
•6 JUNE 2022
| [2022] FWC 1738 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.739 - Application to deal with a dispute
Construction, Forestry, Maritime, Mining and Energy Union
v
DP World Melbourne Ltd
(C2022/1887)
| COMMISSIONER CIRKOVIC | MELBOURNE, 6 JUNE 2022 |
Application to deal with a dispute about any matters arising under the enterprise agreement and the NES;[s186(6)]
This decision involves an application brought by the Construction, Forestry, Mining and Energy Union (Victoria) (CFMMEU/Applicant) under section 739 of the Fair Work Act 2009 (Cth) (the Act). The Respondent is DP World Melbourne Ltd (Respondent).
The parties are covered by the DP World Melbourne Enterprise Agreement 2020 (the Agreement). The Agreement was approved by the Fair Work Commission (the Commission) on 10 March 2021. The Agreement applies to the Respondent, “its relevant employees engaged in stevedoring operations as stevedoring employees… and the Construction Forestry, Maritime, Mining and Energy Union of Australia- MUA Division”.[1]
The parties jointly submitted that the question for arbitration is:
“Is DP World Melbourne Limited required by clause 8.13.8 of the DP World Melbourne Enterprise Agreement 2020 to promote Mr Dean Xuereb to a FSE position as an outcome of the 2021 labour review?”
The Applicant submits that the answer to the question as posited above is “yes” and contends that the requirements of clause 8. 13.8 have been met with respect to Mr Xuereb. The Respondent disagrees and submits that, properly construed, clause 8.13.8 is part of a broader workforce review focussing on the performance of DP world’s business, comprising both maintenance and operations employees. The Respondent submits and the Applicant agrees that if that construction is accepted, the Applicant’s case is “fatal” and fails at the “threshold”. There is no dispute that Mr Xuereb works with the Respondent as a maintenance employee and that he commenced employment on or about 10 April 2017.
Background
The Applicant filed an application on 22 March 2022. The matter was listed for conference on 12 April 2022.
As the dispute was unable to be resolved at conference, it was listed for arbitration. The hearing took place on 20 June 2022. The Respondent sought permission, under s.596 of the Act. I was satisfied having regard to the complexity of the matter that it would be dealt with more efficiently if the Respondent was allowed to be represented. Accordingly, I exercised my discretion pursuant to s.596(2)(a) of the Act to grant permission to the Respondent in this regard.
The parties provided a statement of agreed facts dated 15 June 2022 that is reproduced below:
“Stevedores employed by DP World Melbourne Limited (DPWML) at the West Swanston container terminal (Terminal):
a.are covered by the DP World Melbourne Enterprise Agreement 2020 (Agreement);
b.are engaged as fixed salary employees (FSEs), variable salary employees (VSEs) or supplementary employees (Supplementaries).
FSEs are permanent, full-time employees that work a set number of hours per week on a fixed roster. VSE employment is a form of “guaranteed wage employment” and has many of the same employee entitlements as FSE employment. Unlike FSEs, however, VSEs are not allocated to a fixed roster panel with fixed rostered shifts and are required to be available to work on an irregular bass. Supplementaries are casual employees, who are not allocated to a roster panel and work shifts as required to by DPWML and are used to supplement FSE and VSE labour where shortages of available labour occur.
Historically, employees in the stevedoring industry have progressed through the categories of employment described above as their careers progressed. Employees ordinarily start working as a Supplementary employee (usually performing general duties work) and are then “promoted” to VSE and FSE when there is a need for additional labour resources that can be sustained by the business.
Labour review
Clause 8.13.5 of the Agreement requires DPWML to conduct a labour review in July of each year in consultation with the site Employee Representative Committee (ERC) and the Maritime Division of the Construction, Forestry, Maritime, Mining and Energy Union (CFMMEU). The purpose of the labour review is to assess the opportunity for promotion of VSE to FSE roles, which is determined having regard to DPWML’s business performance, evidenced by the following criteria:
a.roster utilisation;
b.availability of skills;
c.idle time - being a measure of unrostered shifts over a roster period (subject to prescribed exclusions set out in clause 8.13 of the Agreement); and
d.VSE earnings.
Prior to a labour review, DPWML is required to provide the ERC and the CFMMEU with relevant data and information, including, amongst other things, number and types of shifts worked by employees (including shift cancellations, overtime, and extensions) and other employee information (including earnings and annual leave balances).
2021 labour review
On 10 September 2021, DPWML provided the ERC and the CFMMEU with the following data and information:
a.the number and type of shifts worked by employees;
b.shift cancellations by shift type;
c.shift upgrades and downgrades;
d.employee numbers by categories;
e.earnings, number of shifts performed and ratios;
f.overtime and extensions;
g.annual leave balances; and
h.contractors in use
On 17 September 2021, DPWML conducted a labour review in consultation with the ERC and the CFMMEU. During the labour review, the CFMMEU sought the promotion of Mr Dean Xuereb, a VSE employed as a Maintenance Tradesperson at the Terminal. DPWML refused to promote Mr Xuereb (or any VSE for that matter) because it did not consider the relevant triggers (as set out at paragraph 4 above) to have been met.
Following the labour review, it became apparent that there was a dispute between DPWML and the CFMMEU about the interpretation of the Agreement. In particular:
a.it is the CFMMEU’s position that the criteria (referred to at paragraph 4 above) are to be assessed by reference to employees on the maintenance roster only (in relation to maintenance VSEs); and
b.it is DPWML’s position that the criteria are to be assessed by reference to all employees covered by the Agreement.”
Issues in dispute
In summary, the issue in dispute requires me to interpret clause 8 of the Agreement and determine whether the Respondent is required by clause 8.13.8 of the DP World Melbourne Enterprise Agreement 2020 to promote Mr Dean Xuereb to an FSE position as an outcome of the 2021 labour review.
I note at this juncture that during the course of final submissions, the Applicant sought to re- engage with the question for arbitration by asking the Commission to consider a “slight amendment” to the question for determination, namely whether the Respondent is required by clause 8.13.8 of the Agreement to “create” a new maintenance FSE role as an outcome of the 2021 Labour review.
The Respondent objected, submitting that it would be procedurally disadvantaged if the agreed question for arbitration was amended at that late stage.
In my view, the essence of the dispute between the parties, properly determined is not whether a particular employee, such as Mr Xuereb fills a vacancy that may arise as a result of the 2021 Labour Review (the Review), but rather, whether the Respondent was required to create a vacancy for an FSE position as an outcome of the Review. Ultimately it follows, that if the answer to that question is yes, then it is for the parties to determine how the vacancy is filled. If the answer to that question is no, then the Respondent is not required to create a new FSE role and it follows that it is not required to promote Mr Xuereb. I see no procedural disadvantage to the Respondent if the question posed for arbitration is re characterised as posited by the Applicant. On that basis, I have disposed of the dispute by answering the following question: “Is the Respondent required by clause 8.13.8 to create a vacancy for an FSE position as an outcome the 2021 Labour Review?” For the reasons below, I have determined that the answer to the question posed is “no”.
Jurisdiction
Section 739 of the Act empowers the Commission to deal with certain disputes under enterprise agreement dispute settlement terms. The Agreement contains such a term at clause 29. It is not in dispute that the steps taken by the parties to resolve the dispute constituted compliance with the dispute resolution provision of the Agreement. Having regard to the information in the Applicant’s Form F10 application and the views of the parties, I am satisfied that the Commission has jurisdiction to deal with the dispute, including by arbitration.
Principles of Interpretation of Enterprise Agreements
The principles applicable to the interpretation of enterprise agreements are well settled and were summarised by a Full Bench of the Commission in AMWU v Berri Pty Ltd (Berri),[2] drawing on the earlier Full Bench decision in AMIEU v Golden Cockerel Pty Ltd.[3] The Full Court of the Federal Court in WorkPac Pty Ltd v Skene (Skene),[4] has further distilled the principles. The starting point is the ordinary meaning of the words, read as a whole and in context.[5] The language of the agreement is to be understood in the light of its industrial context and purpose, not in a vacuum or divorced from industrial realities. A purposive approach to interpretation is appropriate, not a narrow or pedantic approach. The task of interpreting an enterprise agreement does not involve re-writing the agreement to achieve what might be regarded as fair or just outcome.[6]
There appears to be no serious contest between the parties as to the applicable principles of interpretation of enterprise agreements. I adopt and apply the principles as cited above in this decision without restating them.
Relevant provisions of the Agreement
8.0 CONTRACT OF EMPLOYMENT
8.1 An Employee may be employed as:
8.1 a Permanent Employee;
8.1 a Supplementary Employee;
8.1 a trainee who is subject to a fixed term contract of training; or
8.1 an apprentice, who may be engaged at the discretion of the Company.
8.13 Workforce Review Mechanism-
8.13.1 This clause is intended to provide a structured approach to workforce reviews that take into account prevailing business conditions and to enable employees to provide feedback on business requirements;- where changes to the composition of the workforce are required.
8.13.2 The parties agree to regular consultation and analysis through the monthly ERC meetings. Alternatively, if there are significant business changes a meeting under this clause may be convened. Necessary data will be shared at each ERC to enable this to occur. The Company reserves its right not to provide any commercial in confidence information.
8.13.3 The Parties will work together to promote strong performance, minimise redundancies, sustainable and secure permanent employment where possible.
8.13.4 Definitions in this clause:
Idle Time means - where there are unrostered shifts over the roster period.
(a) Idle Time will not include:
i) Where a VSE/Supp is allocated to a shift instead of a FSE, subject to skill ;
ii) Any closed port day or public holiday where labour has not been required;
iii) Workers Compensation;
iv) Machinery breakdown of less than 24 hours;
v) Where the port is closed due to circumstances outside the parties control;
vi) authorised leave; or
vii) a cancelled shift/s.
Positive Circumstances –Labour Review
8.13.5 There will be a Labour Review in July each year.
8.13.6 The Labour Review will be conducted by the Company in consultation with the ERC
and Union.
8.13.7 The ERC and Union will be provided with Relevant Data (as set out below) and
other relevant information in advance of the labour review.
Relevant Data means;
(a) Number and types of shifts worked by FSE/VSE/Supplementaries;
(b) Shift cancellations by shift type;
(c) Shift upgrades/downgrades by individuals;
(d) Employee Numbers by employment Category;
(e) Earnings, number of shifts performed and ratio of shift allocation for each employee;
(f) Total hours of overtime, number of shift extensions;
(g) Annual leave balances;
(h) Contractors in use including name and task; and
(i) Any other relevant data as agreed.
The parties agree that all information provided will be de-identified.
8.13.8 The review will assess the opportunity for promotion of VSE to FSE roles. Where there is business performance evidenced by the following:
(a) roster utilisation;
(b) maintained availability of skills e.g across weekends;
(c) no Idle Time; and
(d) VSE earnings are consistently on average 15% above the minimum salary in
clause 30.3
Additional FSE roles will be appointed to the extent that the appointment will not impact the above.
8.13.9 Nothing prevents the parties from agreeing to promotion in the absence of any triggers.
Business Downturn
8.13.10In the event of a loss of volume (actual or forecast) and provided the forecast is justified, that will generate a sustained hours deficit (for FSE) or shortfall of VSE minimum salary, and redundancies may be an outcome, this clause will be triggered. In all other circumstances where changes are required then the Introduction of Change (clause 27) will be used.
8.13.11 This clause will only be triggered where necessary and where this is objectively ascertainable and quantifiable evidence of the circumstances in clause 8.13.10.
8.13.12 There are a number of measures that can be implemented in the first instance to address the Business Downturn and mitigate against redundancies.
8.13.13 The measures that can be utilised are set out below and may be implemented by agreement between the Parties and an endorsement of a majority vote of Employees at a meeting of the Union. Agreement will not be unreasonably withheld.
8.13.14 Business Downturn Measures -Step 1
The following options may be considered:
(a) exhausting accrued leave entitlements including long service leave;
(b) varying “time off” arrangements;
(c) varying rosters;
(d) reducing the quantum of roster hours and/ or Minimum Salary (as provided in for
in clause 30.3) in one or more categories with a commensurate salary reduction;
(e) FSEs may enter into a job share arrangement;
(f) FSEs may elect to downgrade to VSE;
(g) VSEs may elect to downgrade to supplementary; or
(h) any other local arrangement identified that is appropriate.
8.13.15 Business Downturn Measures Step 2 - voluntary redundancy
(a) The Company will declare the number of surplus people, skills and effected areas.
(b) Employees may express an interest to volunteer for redundancy.
(c) The timing of redundancies being enacted may vary for individuals’ e.g. to allow
for their skills to be replaced.
(d) In circumstances where there are more expressions of interest received than the declared number of redundancies, the selection of Employees for redundancy will be made in accordance with the longest length of service.
Reversion
8.13.26 The Company will review and consult with the ERC regarding options for reinstating conditions either in full or in part that may have been changed due to a Business Downturn. These will include reversion of some or all of the suite of measures, in the event that any were agreed and implemented.
8.13.27 Where the business meets previous volumes and the projected work stream remains sustainable, the pre-existing arrangements will be reinstated (excluding any redundancies). Further evidence is required of a reduction in idle time and improvement in roster utilisation.
8.13.28 Nothing prevents the parties agreeing to revert to conditions that existed prior to the Business Downturn at an earlier point in time. The reversion may occur incrementally and will occur as quickly as reasonably possible.
8.13.29 Where an employee has voluntarily downgraded, they will have the first option of the next available upgrade. Where there are fewer upgrades into the next category than employees who have downgraded, then the group of employees who have spent the longest period of time downgraded will have priority based on their length of service.
8.14 Where an existing FSE position becomes vacant, the Company shall, in normal circumstances, fill such vacancy in a reasonable time which means advertising no later than 21 days after the departure of the employee. If circumstances change, the Company shall provide Employees and the Union with the reasons for non-replacement of existing positions.
8.15 The Company will ensure that the individual earnings of VSE’s and Supplementaries within any financial year does not exceed the sum of:
8.15.1 the highest annual Grade 6 Operations or Maintenance Salary for maintenance workers as described in the applicable Part B; plus
(e) $7,000.
For the purpose of this clause, earnings from bonus payments and CPDs will not be taken into account when determining the earnings of VSE’s and Supplementaries in any financial year.
8.16 The Company will ensure that there is a fair and equitable opportunity for work for all VSEs and Supplementaries in relation to their respective classification, skills, competencies, availability and performance.
8.17 The Company reaffirms that the Selection Criteria that will apply when assessing applicants for vacant positions will be identified and available at the commencement of each recruitment process.
8.18 Selection processes are subject to the Selection Criteria as set out at Appendix 2. The process will be transparent and input to the selection process will be sought from Team Leaders, Foreman and Head/Senior Clerks as appropriate.
8.19 Priority for consideration will apply in the following order; to existing FSE’s, VSE’s; then casually engaged Employees, and the final selection will be made by management and will be merit based in accordance with the agreed selection criteria.
8.20 Redundancy
8.20.1 This clause shall apply to FSE’s and VSE’s employed by the Company under this Agreement. Supplementary employees do not have any form of redundancy entitlement.
30.0 VARIABLE SALARY EMPLOYEES (VSE)
30.3.2 A VSE shall receive the Minimum Salary described in clause 30.3 or their actual earnings each fortnight, whichever is the greater. The Company provides VSE’s with a minimum salary on the basis that available work and earnings shall cover the amount paid annually.
30.3.3 Where the VSE Minimum Salary is not sustainable for the VSE pool at the Terminal, the matter will be dealt with through the Workforce Review Mechanism clause of this Enterprise Agreement.
30.3.4 In the event that a VSE’s actual earnings do not meet the Minimum Salary in any fortnight, that amount will be deducted from actual earnings in the next six (6) pay periods from earnings above the Minimum Salary. If the Company has not recovered the full amount of debt from an individual employee within this period a repayment plan shall be entered into by the employee.
Evidence
The Applicant relied on witness statements from Mr Adrian Evans dated 20 May 2022 and Mr Xuereb dated 20 May 2022. The Respondent relied on a witness statement from Mr Sean Jeffries dated 10 June 2022. Mr Xuereb and Mr Jeffries were subject to cross examination. The Respondent’s Counsel did not seek to cross examine Mr Evans. I have accepted the evidence of Mr Xuereb, Mr Jeffries and Mr Evans and consider them forthright witnesses who largely gave cogent evidence consistent with their witness statements. I have formed the view that any factual contest and inconsistency between them was for the most part the result of their particular areas of knowledge and experience.
Background Facts
The following largely uncontested background facts are worth noting:
·Employees engaged pursuant to the Agreement are by and large fixed salary employees (FSEs); variable salary employees (VSEs); or supplementary employees (Supplementaries).
·FSEs are permanent, full-time employees who work on a fixed roster, and their hours of work each week are determined by the roster. Those rosters are designed so that employees work a set number of hours per week.
·VSE employment is a form of “guaranteed wage employment” and has many of the same employee entitlements as FSE employment. Unlike FSEs, however, VSEs are not allocated to a fixed roster panel with fixed rostered shifts and are required to be available to work on an irregular basis in order to supply the flexibility required to meet operational requirements. Clause 30 of the Agreement sets out the terms of engagement of a VSE. It is worth noting that a VSE employee is guaranteed a minimum salary and further the terms of the arrangement contemplate a form of credit and debt arrangement with respect to wages and hours over and above the minimum, the details of which are not of particular significance to the question before me.
·Supplementaries are casual employees, who are not allocated to a roster panel and work shifts as required to by the Respondent. Supplementaries are used to supplement FSE and VSE labour where shortages of available labour occur.
·Historically, employees in the stevedoring industry have progressed through the categories of employment described above as their careers progressed. Employees ordinarily start working as a Supplementary employees (usually performing general duties work) and are then “promoted” to the position of VSE and then FSE when there is a need for additional labour resources that can be sustained by the business.
· Clause 3 of the Agreement recognises that FSE is the primary category of employment and contemplates an annual process to review “business requirements for VSE and FSE roles”. Clauses 3.6 to 3.8 provide that:
“3.6 Parties to the Agreement recognise that there are various categories of employment. The Company recognises that FSE is the primary employment category.
3.7 The career path is Supplementary to VSE to FSE subject to meeting earnings and performance triggers.
3.8 The Company aims to operate a competitive and sustainable business that can maximise permanent employees on a roster. The number of permanent positions is regularly monitored alongside prevailing business conditions. There is an annual process to review business requirements for VSE and FSE roles.”
There is little contest that the type of work performed by employees covered by the Agreement falls within five categories: general duties (such as lashing/unlashing and ‘pin man’ duties); operation of machinery and yard equipment (such as straddles, reach stackers, forklifts and the like); clerical work (encompassing data entry tasks and recording information such as timing of events and delays in vessel movement cargo operations); crane driving; and maintenance (such as repairs or scheduled maintenance to straddles and cranes).
Submissions of the Parties
For the sake of efficiency, I have distilled below the key submissions advanced by each party.
The Applicant contends:
·The purpose of the clause is plain on its face and is intended to “mandate” promotions to FSE positions “where there are suitable business grounds to justify them”.
·Where the four listed criteria are met, the “plain words” of the clause are that there is no requirement for there to be vacant FSE positions for an appointment to be made. The chapeau to clause 8.13.5. to 8.13.9 supports a conclusion that circumstances other than a vacancy were intended to “trigger” promotions.
·The context in which clause 8.13.8 appears lends credibility to the assertion that there does not need to be a vacancy for an FSE position. In particular, clause 8.14 deals exhaustively with the scenario where an FSE position becomes vacant and clause 8.13.8 was intended to be “a distinct pathway to an FSE position over and above the exhaustive stipulation in clause 8.14 as to the consequence of a vacant FSE position.
·To read clause 8.13.8 to require a vacancy would be incongruous with the context of clause 8.
·There is no express indication as to whether the relevant criteria in clause 8.13.8 are to be applied by reference to the Respondent’s entire labour pool or only with respect to particular rosters. Acknowledging that the clause contains a degree of ambiguity it is sufficient that the criteria are satisfied with respect to the maintenance roster.
·In the negotiations for the Agreement, which were “protracted and acrimonious”, the parties “cannot be expected” to have drafted the labour review clause with “sufficient granularity” to provide for every aspect of its operation.
·The purpose of the clause is plain on its face and is intended to “mandate” promotions to FSE positions “where there are suitable business grounds to justify them”.
·The metric for the business grounds is focussed primarily on considerations of rostering and labour utilisation as evidenced in the four criteria set out at 8.13.8 (a) to (d).
·As to the first criteria “roster utilisation”, the rosters set out at clause 1 of part B of the Agreement are maintenance or operational rosters and maintenance rosters are “utilised differently from the operational rosters”.[7] Further, the Respondent measures roster utilisation by counting the number of shift cancellations incurred by existing FSE’s and it is telling that the Agreement at part B clause 3.3 does not permit the cancellation of a maintenance FSE’s shift .[8]
·The second criteria is intended to ensure that promoting a VSE does not lead to a situation where there is a shortage of a particular skill on a certain shift. As there can be no scenario where promoting an operational VSE would lead to a skills shortage in the maintenance division, or where the promotion of a maintenance VSE would cause a skills shortage in the operational division, the criterion can only be assessed in respect of either the maintenance rosters or the operational rosters. As such, it cannot be assessed globally.
·The third criteria is idle time, and is defined in clause 8.13.4 to mean unrostered shifts over the roster period. FSE’s are rostered to idle shifts where they have reached the maximum permissible number of shift cancellations. The criteria is subject to the same considerations as the first criteria.
·The fourth criteria is the level of VSE earnings. As of October 2021, VSE’s earn a guaranteed yearly salary of $79,352, regardless of how many shifts they work. If VSE’s work fewer shifts than what justifies the guarantee, they incur a debt to the Respondent and where they work more shifts, they are paid for those additional shifts. Further, clause 30.3.3 provides that where the VSE minimum salary is not sustainable for the VSE pool at the terminal, the matter will be dealt with through the workforce review mechanism. The fourth criteria is intended to prevent promotions of VSE’s where it is not worthwhile for the Respondent to pay them an FSE salary. To the extent that clause 8.13.8 is intended to facilitate promotions where there is sufficient business performance, where the VSE’s in a given part of the labour pool are all earning significantly above the VSE guarantee, the requisite standard of business performance is met.
·Many examples across the Agreement indicate that the framers of the Agreement considered maintenance and operational employees to each form separate labour pools.
·The labour review data prepared by the Respondent separately exhibits the number and types of shifts worked by maintenance and operational employees.
·An interpretation that the criteria is assessed globally ignores the industrial realities, would be inconsistent with the context in which the clause appears, and would “frustrate the purpose”, which is to facilitate promotion of VSE’s to FSE positions.
Is the criteria satisfied with respect to Mr Xuereb?
·The Respondent’s maintenance employees are fully utilised, as is evidenced by Mr Xuereb’s observations that he often views electrical workers performing work he is qualified to do and that there is a significant backlog in electrical and maintenance work. Thus, the first criteria is plainly satisfied.
·The second criteria is conceded.
·The third criteria is satisfied as is evidenced by the fact that maintenance employees are fully utilised and there is no idle time.
·As to the fourth criteria, it is accepted that “it is not sufficient for an individual VSE’s earnings to be 15% higher than the VSE guarantee. Mr Xuereb’s evidence that for the past 3 years his salary has been approximately twice the amount of the guarantee and that other maintenance workers work similar rosters to him, is indicative that the “only available conclusion” is that the fourth criterion is met.
·As the overall trigger for the promotion is the Labour Review and the Respondent was required to conduct the Labour Review in July 2021, the promotion should be backdated to July 2021 even though the Labour Review actually occurred in September 2021.
Respondent submissions
The Respondent contends that the question to be arbitrated should be answered “no” and in support of this position advances the following arguments:
·Properly construed, the labour review forms part of a broader workforce review mechanism which focuses upon the performance of the Respondent’s business comprising both operations and maintenance employees. Nothing in the text of clause 8.13.8, or its context or purpose, indicates that the clause should be applied at a team level. The Applicant’s construction requires the Commission to read words into clause 8.13.8, omit other words, and ignore important contextual factors.
·Properly construed, subclause 8.13.8 contemplates one labour review conducted at the whole-of-business level (that is encompassing both operations and maintenance employee cohorts). Textual, contextual, and purposive considerations all support that conclusion;
·Two textual matters support the Respondent’s construction.
· First, the chapeau to clause 8.13.8 makes clear that the four Appointment Metrics set out in subclauses (a) to (d) are tools by which the parties assess the ultimate criterion, being “business performance”.
· Second, the subclauses make no distinction between groups of employees. Clauses 8.13.5 and 8.13.6 envisage a single Labour Review, and do not in terms contemplate separate team-based analyses. Clause 8.13.8 applies each of the Appointment Metrics to the whole employee cohort covered by the 2020 EA.
·Three contextual matters also support the Respondent’s construction.
· First, clause 8.13.8 is a subclause falling within the broader clause 8.13. That broader clause is headed “Workforce Review Mechanism”. Its intent is expressed in clause 8.13.1 as follows:
· This clause is intended to provide a structured approach to workforce reviews that take into account prevailing business conditions and to enable employees to provide feedback on business requirements; - where changes to the composition of the workforce are required;
· Clause 8.13.2 maintains that focus at the “business” level. It provides for meetings to be convened under clause 8.13 in the event of “significant business changes”;
· The intent expressed in those subclauses – focusing, as it does, on the prevailing conditions of the “business”, and upon the composition of the “workforce” – sits awkwardly with the segmented approach for which the CFMMEU contends.
· Second, subclauses 8.13.5-8.13.9 are grouped under the heading “Positive Circumstances – Labour Review”. They must be read contextually with the brace of subclauses that follow under the headings “Business Downturn” (subclauses 8.13.10-8.13.15), “Process for Implementing Measures” (subclauses 8.13.16-8.13.25), and “Reversion” (subclauses 8.13.26-8.13.29).
· These groups of provisions form a coherent scheme – or, as clause 8.13.1 puts it, a “structured approach” – dealing with changes to workforce levels based on the changing performance of the Respondent’s business (whether those changes be positive or negative).
· Critically, those changes turn on the performance of the business (not merely some isolated team or division within that business). Beyond the intent provisions set out above, so much also emerges from:
(a) clause 8.13.10’s use of the defined term Business Downturn, and its focus upon “a loss of volume (actual or forecast)” causing potential redundancies. That sort of analysis cannot sensibly be conducted at a team-based level;
(b) the fact that clause 8.13.27 – which deals with the circumstances in which work altered under the Business Downturn provisions revert back to their pre- Downturn arrangements – is triggered when “the business meets previous volumes and the projected work stream remains sustainable”. Again, that sort of analysis cannot sensibly be conducted at a team-based level.
· Third, the 2020 EA expressly treats operations and maintenance employees as part of a single work group in other areas (such as for the purposes of health and safety representation, and the general operations roster).
·The Applicant’s contentions that the Appointment Metrics are properly assessed at a team or work group level) fails for the following reasons.
· First, the Applicant’s contention requires the Commission to read words into (at least) clauses 8.13.7 and 8.13.8. The Commission would be slow to adopt that course, particularly where the Respondent’s construction is textually and contextually coherent on the face of the document.
· Second, the Appointment Metrics are merely tools to assess the operative criterion of “business performance”. The maintenance and operations divisions are not separate businesses. The maintenance division does not report separately.
· Third, it is purposively nonsensical to assess “business performance” with reference to the maintenance division only. The labour review’s evident purpose – reflected in clauses 8.13.1, 8.13.3, and 8.13.8 – is to ensure that VSE-FSE promotions are supported by a sound and sustainable business case. The maintenance division is self-evidently a cost centre: to assess metrics against the maintenance division in isolation from the operations division (which generates revenue) would plainly not take into account prevailing business conditions” as clause 8.13.1 requires.
· Fourth, if the union’s construction was adopted, there would be a wide array of potential constructions and applications of the clause so altered. The Commission would be slow to embrace a construction of such uncertain application.
· Fifth, the mere existence of several different rosters under the 2020 EA – and the fact that those rosters might be utilised differently – does not support the Applicant’s contention. The roster utilisation metric (measured against a target shift ratio) assesses the ratio of the different shifts performed (for which payments are made to permanent employees under the minimum guaranteed salary), and thus the value that the Respondent derives from those minimum guaranteed salaries. Not only is it capable of being assessed on different roster arrangements, but the metric is also directed toward measuring the value of those different roster arrangements.
· Sixth, the fact that the 2020 EA does not permit the cancellation of maintenance FSE shifts supports the global construction for which the Respondent contends. If the Applicant’s construction were correct, the criterion would have no work to do with respect to the maintenance division. The fact that clause 8.13.8 makes no distinction in its application to the maintenance cohort tells strongly against the Applicant ’s contention.
· Seventh, the same issue infects the Applicant’s contention vis-à-vis the ‘no idle time’ metric. If the Applicant is right that there can be no idle time in the maintenance roster, the metric cannot be sensibly applied to the maintenance team in isolation. Had the 2020 EA’s framers intended that the maintenance team be assessed separately, one would expect them to have set out a separate list of metrics for that team.
· Eighth, the ‘availability of skills’ metric is relevant only insofar as it demonstrates positive business performance (which cannot sensibly be assessed with reference to a cost centre in isolation).
· Ninth, the Respondent accepts that the VSE earnings metric “is intended to prevent the promotion of VSEs where it is not worthwhile…to pay them an FSE salary” and that clause 8.13.8 “is intended to facilitate promotions where there is sufficient business performance”. A sensible assessment of the Respondents’ “business performance” cannot be made with reference to a cost centre in isolation.
The Appointment Metrics Are Not Satisfied in Respect of The Maintenance Roster
·Mr Jeffries gives evidence that the 2021 labour review data showed that:
(a) a number of employees did not meet the roster utilisation target;
(b) there were a number of ‘not required’ shifts (or NRQs), meaning that there was idle time; and
(c) VSE earnings were not, on average, 15 per cent above the minimum salary in the 2020 EA.
·The submission concerning roster utilisation misunderstands the relevant metric. The Applicant advances no evidence beyond Mr Xuereb’s observations to support its submission concerning ‘idle time’ and the attempt to extrapolate from Mr Xuereb’s salary to all other maintenance employees plainly cannot provide a safe basis to accept the Applicant’s submission concerning the ‘VSE earnings’ metric.
Consideration
In accordance with the principles earlier stated, the construction of the Agreement begins with a consideration of the “ordinary meaning of the words, read as a whole and in context.”[9] Context may appear from the text of the Agreement viewed as a whole, or the place and arrangement of the clause in the Agreement. The statutory framework under which the Agreement was made and in which it operates may also provide context. The interpretative task also requires a consideration of the “language of the particular agreement, understood in the light of its industrial context and purpose.” [10] It is also accepted that “a purposive approach to interpretation is appropriate and a narrow or pedantic approach is misplaced.”[11] There is no real contest between the parties as to the approach to the interpretation of the terms of an enterprise agreement.
I note that clause 8 is headed “contract of employment” and comprehensively deals with a broad range of matters including terms applicable to termination of employment and redundancy. Relevantly, at clause 8.13 there is a “mechanism” set out for the conduct of a workforce review, the purpose of which is stated at clause 8.13.1 to “provide a structured approach to workplace reviews that take into account prevailing business conditions and to enable employees to provide feedback on business requirements –where changes to the composition of the workforce are required”. Further, clause 8.13.3 provides that “the Parties will work together to promote strong performance, minimise redundancies, sustainable and secure permanent employment where possible.”
Following from the workforce review mechanism provisions at 8.13.1 is the heading “Positive Circumstances –Labour Review” which at clause 8.13.5 states that “there will be a Labour Review in July each year”. What follows at 8.13.7 is a statement that the “Union” and the “ERC” will be provided with “Relevant Data” in advance of the Labour Review. It is worth noting that “Relevant Data is defined in a list from clause 8.13.7(a) to (i). There is no contest, and I agree that the purpose of the Labour Review is to “assess the opportunity for promotion of VSE to FSE roles” where “there is business performance evidenced by” (a) roster utilisation, (b) maintained availability of skills e.g. across weekends, (c) no idle time and (d) VSE earnings are consistently on average 15% above the minimum salary in clause 30.3. Further, clause 8.13.8 states that “Additional FSE roles will be appointed to the extent that the appointment will not impact the above”.
There is no dispute that the 2021 Labour Review was conducted in September 2021. I also observe the Applicant’s submission that “the critical question for the resolution of this dispute” is whether the criteria set out at clause 8.13.8 is to be assessed globally by reference to the Respondent’s entire workforce, and if it is assessed globally, “the union’s case fails at the threshold”. I agree with the Applicant that its case “fails at the threshold” if the criteria set out at clause 8.13.8 is assessed by reference to the Respondent’s overall “business” as opposed to a distinct part, namely the “maintenance” part of the Respondent’s business. For the reasons set out below, I am not persuaded by the Applicant’s submissions. In my view, having regard to the principles of construction, and identifying the objective meaning of clause 8.13.8, taking into account the industrial reality, the criteria set out at clause 8.13.8 are to be assessed by reference to the Respondent’s overall business as opposed to the maintenance division only.
First, it is apparent on the face of clause 8.13.8 that what is contemplated is one labour review conducted at the whole-of-business level (that is encompassing both operations and maintenance employee cohorts). The chapeau to clause 8.13.8 indicates that the four Appointment Metrics set out in subclauses (a) to (d) are tools by which the parties assess the ultimate criterion, being “business performance”. I note that clauses 8.13.5, 8.13.6 and 8.13.8 make no distinction between groups of employees, nor do they appear to contemplate and apply mechanisms for the application of analyses of the metrics on a team basis. Rather, they support a conclusion that the entire employee cohort is subject to the assessment matrix set out at clause 8.13.8.
Second, there is nothing in clause 8.13.8 to suggest that the assessment matrix should be applied to maintenance employees as a distinct group. In accordance with the principles of construction of enterprise agreements, I observe that the construction advanced by the Applicant would require a re-writing of the Agreement. In this regard, I accept the Respondent’s submission that “if the union’s construction was adopted, there would be a wide array of potential constructions and applications of the clause so altered. The Commission would be slow to embrace a construction of such uncertain application.”
Third, I agree with the Respondent that the Review’s evident purpose – reflected in clauses 8.13.1, 8.13.3, and 8.13.8 – is to ensure that VSE-FSE promotions are supported by a sound and sustainable business case and that it is illogical to assess “business performance” with reference to the maintenance division only. I also agree with the Respondent’s submission that “the maintenance division is self-evidently a cost centre: to assess metrics against the maintenance division in isolation from the operations division (which generates revenue) would plainly not take into account prevailing business conditions as clause 8.13.1 requires.”[12]
Fourth, the contextual considerations and the placement of clause 8.13.8 support the Respondent’s interpretation. I agree with the Respondent that subclauses 8.13.5-8.13.9 are grouped under the heading “Positive Circumstances – Labour Review” and read contextually with the subclauses that follow under the headings “Business Downturn” (subclauses 8.13.10- 8.13.15), “Process for Implementing Measures” (subclauses 8.13.16-8.13.25), and “Reversion” (subclauses 8.13.26-8.13.29) form a coherent scheme for dealing with changes to workforce levels based on the changing performance of the Respondent’s overall “business”. Significantly, there is no provision in the analysis of changes to the Respondent’s business whether they be positive or negative changes for the assessment of performance to be considered on a departmental basis.
I note the Applicant’s submission that “there is no express indication as to whether the relevant criteria [in clause 8.13.8] should be applied by reference to the Respondent’s entire labour pool or only with respect to particular rosters”[13] and further, that the clause “contains a degree of ambiguity”. In my view, there is no ambiguity in the words of clause 8.13.8 nor is there anything in the text of clause 8.13.8, or its context or purpose, supporting the interpretation that the clause should be applied at a team level. It follows that I do not agree with the Applicant that the context in which clause 8.13.8 appears lends credibility to the assertion that there “does not need to be a vacancy for an FSE position” and that “to read clause 8.13.8 to require a vacancy would be incongruous with the context of clause 8.”
I also note the Applicant’s submission that the “textual and contextual factors point each way” and that “the tie breaker is the industrial reality that operations and maintenance are distinct groups of employees”.[14] I agree with the Applicant that the clause must be interpreted with an observance of the industrial realities but in doing so, regard must be had to the plain meaning of the words in their textual and contextual setting. In my view, the Respondent’s construction is textually and contextually coherent on the face of the document, and to adopt the construction posited by the Applicant would involve an impermissible re-writing of the Agreement to achieve the Applicant’s desired outcome.
I acknowledge that a purposive approach to the interpretation of an enterprise agreement is “appropriate” and that a narrow and pedantic approach is “misplaced”. I agree with the Applicant that the purpose of clause 8.13.8 is to facilitate the promotion of VSE roles to FSE roles. That said, clause 8 sets out a comprehensive scheme by which the labour review is to be conducted and the criteria which must be satisfied for new FSE appointments pursuant to that review. In my view it is apparent that the clause contemplates an assessment to be made of the Respondent’s overall business and not just the maintenance division of that business.
In coming to my decision, I have also taken into account the Applicant’s attempts to distinguish the maintenance and operational “labour pools” of the Respondent’s business and the submission that as “they’re different labour pools within the same business” that if “one of those metrics is met, in respect of one of those labour pools , then that would be a sufficient indicator of business performance, for the purpose of the clause”.[15] I do not agree. The Respondent’s construction of clause 8.13.8 is textually and contextually coherent on the face of the document, and in those circumstances, I see no reason to read words into clause 8.13.8 that are not there.
Taken at its highest, the Applicant’s evidentiary case with respect to the submission that the criteria in clause 8.13.8 ought be assessed against maintenance employees only and not the Respondent’s entire workforce, is that maintenance and operational employees, are different labour pools within the same business. In my view, even if that were the case, the words of the Agreement and clause 8.13.8 do not support a conclusion that the criteria set out in the clause should be read to apply to a particular labour pool, let alone the maintenance labour pool only.
I have noted the Applicant’s reliance on the history of the negotiations between the parties to support its interpretative analysis of clause 8.13.8. In all the circumstances, there is insufficient evidence before me to draw any meaningful conclusions as to the probative value of the Applicant’s submissions with regard to the history of the negotiations between the parties and as such I have had little regard to them in coming to my decision.
Conclusion
Having regard to the principles of construction referred to earlier, I have identified the objective meaning of clause 8.13.8, by construing the words of the Agreement in light of their industrial and textual context, and the answer to the question posed is “no”.
COMMISSIONER
Appearances:
Mr Mohseni for the Applicant
Mr Pollock for the Respondent
Hearing details:
2022
Melbourne
20 June
[1] Clause 4 of the Agreement.
[2] [2017] FWCFB 3005, [114].
[3] Australian Meat Industry Employees Union v Golden Cockerel Pty Ltd[2014] FWCFB 7447, [19] – [40].
[4] [2018] FCAFC 131, [197].
[5] Note: context is to be considered as part of the first stage: SZAL v Minister for Immigration and Border Protection [2017] 262 CLR 362 at [14] per Kiefel CJ, Nettle and Gordon JJ.
[6] Australian Meat Industry Employees Union v Golden Cockerel Pty Ltd[2014] FWCFB 7447, [41].
[7] Annexure C to F10, Email from Sean Jeffries, 8 November 2021.
[8] Applicant’s Outline of Submissions, 20 May 2022, [25]-[26].
[9] WorkPac Pty Ltd v Skene [2018] FCAFC 131, [197].
[10] WorkPac Pty Ltd v Skene [2018] FCAFC 131, [197], citing Amcor Limited v Construction, Forestry, Mining and Energy Union [2005] HCA 10; (2005) 222 CLR 241 at [2] (Gleeson CJ and McHugh J).
[11] Ibid.
[12] Respondent’s Outline of Submissions, 10 June 2022, [33].
[13] Applicant’s Outline of Submissions, 20 May 2022, [21].
[14] Transcript PN499.
[15] Ibid PN502.
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