Construction, Forestry, Maritime, Mining and Energy Union v Sydney International Container Terminal Pty Limited T/A Hutchison Ports Australia Pty Limited
[2020] FWC 1812
•26 MAY 2020
| [2020] FWC 1812 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.739—Dispute resolution
Construction, Forestry, Maritime, Mining and Energy Union
v
Sydney International Container Terminal Pty Limited T/A Hutchison Ports Australia Pty Limited
(C2019/1606)
DEPUTY PRESIDENT BULL | SYDNEY, 26 MAY 2020 |
Alleged dispute about any matters arising under the enterprise agreement and the NES – Private arbitration under dispute resolution procedure in an enterprise agreement – Meaning of ‘agreed locally’ – Power to award remedies as sought by applicant.
[1] On 13 March 2019, the Construction, Forestry, Maritime, Mining and Energy Union (the Union) filed an application pursuant to s.739 of the Fair Work Act 2009 (the Act) in respect of a dispute with Sydney International Container Terminal Pty Limited T/A Hutchison Ports Australia Pty Limited (SICTL). The application sought to have the Fair Work Commission (the Commission), in accordance with Clause 13 – Issue Resolution of the Sydney International Container Terminal Pty Limited (SICTL) and Brisbane Container Terminals Pty Limited (BCT) and Maritime Union of Australia (MUA) Enterprise Agreement 2015 (the Enterprise Agreement) resolve a dispute relating to:
• Clause 12 Consultation About Change and Continuous Improvement
• Clause 10 of Schedule 5 – Phase 2 Arrangements – 32 Hour Operations
• Clause 13 Issue Resolution; and
• A local maintenance agreement.
[2] The Enterprise Agreement has a nominal expiry date of 25 November 2018 and remains in operation as no replacement agreement has yet been agreed with the Union as the employees’ bargaining representative.
[3] Following allocation of the matter to my chambers, SICTL was requested to provide a response to the application. SICTL’s representative, Mr Brown, filed a response on 26 March 2019. SICTL stated that it had engaged in discussions with the Union in respect of the dispute and that employees subject to the dispute are not the subject of the document known as the Maintenance Local Agreement. It was further put by Mr Brown that reliance on the ‘status quo’ provisions of the Issue Resolution clause of the Enterprise Agreement was misplaced. It was also contended by Mr Brown that Schedule 5 of the Enterprise Agreement had not been breached by SICTL.
[4] SICTL asserted in the alternative that determining the matter in favour of the Union’s requested remedies would be beyond the Commission’s power as per s.739(5) of the Act.
[5] On 27 March 2019, a conciliation conference was held before the Commission. The outcome of the conference was that the parties were to hold further discussions.
[6] Some seven months later, on 29 October 2019, the Commission received an email from the Union advising that the parties had been unable to reach an agreement and requested that the matter be listed for arbitration. 1
[7] My chambers contacted the Union requesting advice on the outstanding issue/s to be arbitrated. On 11 November 2019, the Union provided the question they wished to be arbitrated:
“Whether all maintenance employees covered by the Sydney International Terminals Pty Limited (SICTL) and Brisbane Container Terminals Pty Limited (BCT) and Maritime Union of Australia (MUA) EA 2015 (EBA) are subject to the rostering arrangements set out in the Local Rostering Agreement executed by the parties in June 2016, pursuant to Schedule 5, clause 10 of the EBA.” 2
[8] The Union further advised that there were a number of maintenance employees who were not subject to the rostering arrangements in the Local Rostering Agreement and that SICTL intended to employ additional maintenance employees who would also not be subject to the rostering arrangements in the Local Rostering Agreement.
[9] Subsequently, directions were issued and a hearing date was scheduled for 4 February 2020. On 24 January 2020, the Union with agreement from SICTL requested the matter be relisted, and the matter was relisted for hearing on 18 March 2020.
[10] On 17 February 2020, the Union with the consent of SICTL requested an extension of time for the filing of submissions. A further set of amended directions were issued with the hearing date remaining.
[11] Leave was granted for SICTL to be represented by a solicitor pursuant to s.596(2)(a) of the Act, which was not opposed by the Union.
Applicant’s submissions and evidence
[12] The Union, in addition to its written submissions, supported its application with the evidence of two of its officials; Mr Paul McAleer Divisional Branch Secretary of the Sydney Branch of the Maritime Union of Australia Division of the Union and Mr Paul Keating Sydney Branch Deputy Secretary of the Maritime Union of Australia Division of the Union.
[13] The Union submitted that on 4 July 2016 maintenance employees at Port Botany were subject to a Local Roster Arrangement as agreed between the parties in 2016.
[14] Mr McAleer, who was not cross-examined, gave evidence that during 2014 negotiations for the Enterprise Agreement took place on the implementation of arrangements of fixed rosters for maintenance employees. 3 Sub clause 16.2 of the Enterprise Agreement provides that employees shall work in accordance with clause 16 and the roster and related rules in Schedule 4 or arrangements in Schedule 5 of the Agreement as applicable.
[15] The Commission approved the Enterprise Agreement to cover the Sydney and Brisbane container terminals, and Schedules 4 and 5 of the Agreement provide that Level 5 employees and maintenance employees covered by the Agreement will work in accordance with rostering arrangements to be agreed locally.
[16] Mr McAleer identified the difference between clause 16 of the Enterprise Agreement and clause 17 of the predecessor 2013 Greenfields Enterprise Agreement. 4 SICTL was a new entrant to the Australian waterfront having won contracts at Sydney and Brisbane ports and prior to commencing operations negotiated a greenfields agreement with the Union.5 It was noted in the 2013 Greenfield Agreement, that there would be a shift to Schedule 5 rosters where sufficient work existed, whereas in the Enterprise Agreement, more factors were to be considered, namely, the size and composition of the workplace and the transition arrangements from Schedule 4 to Schedule 5.6
[17] Mr McAleer’s evidence was that in 2016 a local maintenance agreement was entered into which provided that all maintenance employees will be rostered in accordance with the roster rules and arrangements in that agreement. 7
[18] Mr Keating provided a witness statement and a statement in reply. 8 Mr Keating stated that in late 2013 when SICTL first commenced operations, maintenance employees were employed as Phase 1 employees and worked irregular shifts and were not rostered in accordance with the roster in Schedule 4 or any roster.9
[19] Mr Keating’s evidence was that in early 2014, the Union and SICTL negotiated a local roster arrangement for maintenance employees that would include a fixed roster. In June 2016, he participated in negotiations to replace the first local agreement. Two local agreements resulted. One titled ‘Local Rostering Arrangement’ and the other titled ‘Local Rostering Arrangement for Maintenance Employees at Sydney International Container Terminal’ (Local Roster Agreement). These documents constitutea local rostering agreement for maintenance employees at Port Botany. The new local maintenance roster was implemented from 4 July 2016 as per an email from the SICTL Human Resources Manager. 10 Mr Keating’s evidence was that there was no intention that the Local Roster Agreement would only apply to current maintenance employees. 11
[20] The local rostering arrangement sets out the employment terms including rostering commitments, a 12-hour general maintenance roster, roster rules, remuneration, overtime, public holidays, long service, annual leave and personal leave entitlements and a requirement to conduct a roster review.
[21] There are 20 maintenance employees employed according to the Local Roster Arrangement of which 15 are Level 4 Maintenance employees and 5 are Level 5 Shift Leaders.
[22] On 20 September 2018, Mr Keating was informed by a maintenance employee that SICTL intended to employ new maintenance employees not subject to the local agreed arrangement. As a result, the matter was put into dispute as per the Issue Resolution clause of the Enterprise Agreement. Despite this, SICTL proceeded to employ five additional maintenance employees in September and October 2018 and roster them contrary to the Local Roster Agreement.
[23] Mr Keating noted that notwithstanding reference to the ‘status quo provisions’ in the Enterprise Agreement, SICTL has continued to employ the 5 additional maintenance employees contrary to the Local Roster Agreement.
[24] The new maintenance employees are only rostered to work day shifts Monday to Friday and work a 30-hour week which is not in accordance with any roster agreed to by the Union or in accordance with any roster in the Enterprise Agreement. While discussions have occurred regarding possible new rostering arrangements, no agreement has been reached.
[25] Mr Keating disputed the view of SICTL as expressed by Ms Mihalopoulos that the local roster agreement was a ‘General Maintenance Roster’ only, as it does not specify what kind of maintenance work is to be conducted by the maintenance employees and thus covers all maintenance employees performing all maintenance work. The 5 panels in the local roster agreement do not exclusively perform ‘general’ maintenance work but also undertake ‘preventative’ maintenance work. 12
[26] Mr Keating expressed the view that SICTL could not implement a new roster that had not been locally agreed and, as such, new maintenance employees can only be rostered in accordance with the 2016 local roster agreement. Mr Keating’s evidence was that both the new maintenance employees and those working according to the local roster agreement perform all types of maintenance work.
[27] Mr Keating was not subject to cross examination and stated that the Union was still open to a new local agreement that sets out a new roster for day shift only.
[28] The Union submits that in all circumstances all maintenance employees are subject to the rostering arrangements set out in the 2016 Local Roster Arrangement to the exclusion of other rosters unless and until a new roster is agreed. The Union submits that ongoing discussions have not been able to resolve the matter. 13
[29] The Union refers to paragraph [17] of Schedule 4 and paragraph [10] of Schedule 5 of the Enterprise Agreement which provides that employees will work in accordance with rostering arrangements to be agreed locally. The Union also referred to the ‘Parties and Scope’ clause of the Local Rostering Arrangement that states it applies to all SICTL maintenance employees. 14 The Union further submits that on or about 21 September 2018 it notified SICTL of a dispute and invoked clause 13.6(a) of the Issue Resolution clause of the Agreement.
[30] The Union notes that there are provisions in the Local Roster Agreement that provide for changes to be made based on operational or other requirements. It is submitted that parties had agreed at the time the Local Roster Agreement was made that maintenance employees would transition from Phase 1 arrangements to Phase 2 arrangements as per 3.4 of the Agreement. 15
[31] The Union asserts that the local rostering agreement is a term of the Agreement to the extent that it is the only document that provides for the rostering of maintenance employees. 16 It was noted that maintenance employees have never been rostered pursuant to any rosters in the Agreement as there is no roster for maintenance employees in the Enterprise Agreement.17 Since 2014 maintenance employees have been rostered pursuant to a local agreement. By not rostering in accordance with the Local Roster Agreement, the respondent is in breach of clauses 16.1 and 16.2 of the Agreement that state how the employer is able to roster its employees.
[32] The Union contend that when the Local Roster Agreement is read as a whole, all maintenance employees are covered. It is put that the employer is reading into the Local Roster Agreement limitations and restrictions that do not exist. It is noted that neither the Enterprise Agreement nor the Local Roster Agreement distinguish between which maintenance employees; either future or current are to be covered.
[33] The Union states that having regard to the ‘ordinary meaning’ and ‘custom and practice’ that the words ‘agreed locally’ at paragraph [10] of Schedule 5 includes the Union, employees and the employer. Reliance is also placed on the Union being a ‘party’ to the Enterprise Agreement.
[34] The Union seeks an order that:
• all maintenance employees are only rostered in and paid in accordance to the Local Rostering Agreement unless and until a new local rostering agreement is agreed;
• that all maintenance employees are rostered and paid within 5 days of the Order; and
• that SICTL breached clause 13 Issue resolution of the Agreement. 18
[35] The Union submits that if the Commission finds the second order is beyond power it should be in the form of a recommendation and to the extent the third order is beyond power it should be in the form of an opinion. 19
Respondent’s submissions and evidence
[36] SICTL’s initial response to the dispute application filed in the Commission on 26 March 2019 was to refute any alleged breach of the terms of the Enterprise Agreement and assert that the relevant maintenance employees were not the subject of the document described by the Union as the Maintenance Local Agreement.
[37] SICTL accepts that in July 2016 it entered into an agreement with the Union with respect to the establishment and rostering of five panels of general maintenance employees at its Port Botany site, 20 The agreement being reflected in a document titled Local Rostering Arrangements for Maintenance Employees at Sydney International Container Terminals Pty Limited. This agreement was entered into approximately seven months after the approval of the Enterprise Agreement by the Commission and was not a term of the Enterprise Agreement. The arrangement was specific to the needs of the respondent to ensure maintenance crew are available to support operations at the Port Botany site and to replicate the operational shift patterns.21
[38] The 2016 local agreement was to ensure a dedicated general maintenance crew was available to support the Port Botany site with maintenance employees working shifts that mirrored the operational shift patterns of the site. It is submitted that the 2016 local agreement roster arrangements concerned breakdown and operations coverage. The employer contends that the 2016 local agreement is not a term of the Enterprise Agreement.
[39] Following the 2016 local agreement covering breakdown and operations it became necessary to introduce a new and additional roster dedicated to preventative maintenance. In June 2017, the Union was advised of this and of the intention to recruit a day shift preventative maintenance crew. This in the employer’s view was not an amendment to matters previously agreed as the preventative maintenance crew would not support the day to day maintenance requirements of operating shifts and would be rostered exclusively on day shift. 22
[40] The Union was advised of SICTL’s intentions in June 2017 and discussions with the Union were held between July 2017 and April 2018. In September 2018, SICTL commenced a recruitment process for employees to perform work as day shift workers on a preventative maintenance crew. In October and November 2018 four employees were engaged. SICTL submits that ‘agreements with the four employees (new employees) contained a locally agreed rostering arrangement’. 23
[41] Clause 16.1 of the Enterprise Agreement provides that the employer will at all times be able to roster and allocate any employee individually in a flexible manner in accordance with the arrangements in the Enterprise Agreement. Further, subclause 16.2 provides that employees shall work in accordance with the arrangements detailed in the following sub-sections and the roster and related rules in Schedule 4 or arrangements in Schedule 5 of the Enterprise Agreement as applicable.
[42] It is submitted that the new day shift maintenance employees are engaged as Phase 1 employees as per Schedule 4 of the Enterprise Agreement, whereas the general maintenance employees are employed pursuant to Phase 2 under Schedule 5. Phase 1 being a reference to arrangements that apply from the commencement of the Agreement. 24 Schedule 4 under the heading Roster Rules states that in addition to the provisions of clause 16 the following allocation rules will apply which are then set out.
[43] It is contended that at the time of the Enterprise Agreement’s approval there was no negotiated matter with respect to the rostering of maintenance employees other than the ability under clause 16.2 to roster and allocate any employee individually in a flexible manner in accordance with the arrangements in the Enterprise Agreement. 25
[44] Ms Mihalopoulos the General Manager - Human Resources and Industrial Relations gave evidence 26 on behalf of SICTL and was subject to cross examination. Ms Mihalopoulos’ evidence was that at the time of making the Enterprise Agreement a small number of maintenance employees were employed to provide maintenance services on a day, evening and night rotating roster to deal with any breakdowns during a shift.
[45] Ms Mihalopoulos stated that in 2016 a large service contract was entered into that significantly increased the volume of work and required more plant and equipment which required regular and ad hoc maintenance to ensure safe and reliable operations. 27 A general maintenance roster in consultation with the Union was agreed and formalised in the document known as Local Rostering Arrangements for Maintenance Employees at Sydney International Container Terminals Pty Limited effective from July 2016. The local agreement ensured that there would be five panels of general maintenance employees at the Port Botany site.28 The five panel roster still operates in accordance with the local agreement.29 At the time of negotiating the local agreement SICTL had no requirement for a specific and dedicated preventative maintenance capability.30
[46] By 2017 SICTL had concerns about its ability to plan and complete pre-programmed maintenance in a context of increased operational hours as the equipment was now ageing. It was decided that additional maintenance employees would be engaged to carry out preventative maintenance.
[47] SICTL sought to introduce a new preventative maintenance roster in June 2017, which was to be separate from the five-panel breakdown or operations roster for maintenance employees. The new roster was for the purpose of a dedicated preventative maintenance crew, 31 and SICTL did not need an additional panel of employees to perform general maintenance at the Port Botany site.32
[48] In June 2017, Ms Mihalopoulos sent an email to the Union to discuss the proposal to introduce the additional maintenance roster distinct from the breakdown/operations roster. The email included the following paragraph:
“As this would require recruitment of additional trade-persons and discussion on rostering arrangements, we were hoping to meet to commence discussions on the current situation we believe supports the proposal and our initial ideas to be developed further with the Branch and delegates.” 33
(My underline)
[49] A number of meetings were then held with the Union including at the Union’s offices in July and August 2017 which Ms Mihalopoulos attended. 34 Further meetings between SICTL and the Union were held in December 2017 and January 2018. At a final meeting on 18 April 2018, Mr Raymond Hohle the then Senior Manager Engineering advised the Union that SICTL would be proceeding with its proposal. Ms Mihalopoulos attached to her witness statement an email she received from the Manager HR Corporate Services who attended this meeting and recorded the outcome which included the following comment:
“As PK (Paul Keating) was packing up, Raymond (Hohle) stated to him that we would be proceeding with the recruitment in accordance with EBA (i.e. Phase 1). PK stated "no you are not! You write to the union and we're going to put it in dispute!" 35
[50] It was submitted that prior to the commencement of employment of new employees on the preventative maintenance crew, the Union was made aware of SICTL’s intentions to recruit suitably qualified and trained individuals. 36 The Union in keeping with SICTL practices with respect to recruitment at the Port Botany site was given the opportunity to provide names of interested person/persons. Six names were provided by the Union; however, the individuals did not have the necessary post-trade qualifications. Four employees were later recruited to work day shifts as part of the preventative maintenance team.37
[51] Ms Mihalopoulos stated that offers of employment were made to four employees who were advised that they would be working on a dedicated day shift and would not be required to work as part of a rotating roster or on night shifts. 38 In response to an email of 26 October 2018 from Mr Keating regarding the conditions of employment for the preventative maintenance crew Ms Mihalopoulos included in her response on 29 October 2018, the following:
“New Starters have been employed on either the agreed local arrangement or on Schedule 4 until a local arrangement can be agreed.”
[52] Ms Mihalopoulos’s evidence in cross examination was that while preventative maintenance existed in 2016 it was only around 15% of the work undertaken by the maintenance crew. While accepting that the Union was a party to the Enterprise Agreement, Ms Mihalopoulos was of the opinion that a local agreement can be made directly between SICTL and employees.
[53] Under cross examination Ms Mihalopoulos accepted that there was no definition of general and preventative maintenance work. The reason for that was that it was not envisaged at the time that there was a need to do so as there was limited preventative maintenance work. It was submitted that at the time the 2016 Local Roster Agreement was implemented, it was predominantly general maintenance work which covered approximately 80-85% of the maintenance work.
[54] Ms Mihalopoulos stated that ‘locally agreed’ includes the employer and individual employees. Ms Mihalopoulos clarified that the five panels being referred to were not five employees.
[55] In regard to the application of the Enterprise Agreement, it is contended that the Day Shift Preventative Maintenance Crew are engaged as Phase 1 employees, and that maintenance employees who are engaged in general maintenance are employed pursuant to Phase 2. It is submitted that at the time of the approval of the Enterprise Agreement, there was no ‘negotiated’ matter as per clause 3.3 of the Enterprise Agreement with respect to rostering of maintenance employees. 39
[56] In SICTL’s closing oral submissions it was submitted that the local rostering agreement was made seven months after the approval of the Enterprise Agreement and is not a term of the Agreement.
[57] In referring to how the Enterprise Agreement should be interpreted, SICTL referenced the Full Bench decision of AMWU v Berri Pty Limited:
“2. The task of interpreting an agreement does not involve rewriting the agreement to achieve what might be regarded as a fair or just outcome. The task is always one of interpreting the agreement produced by parties.” 40
[58] It was submitted that the wording in Schedule 4 paragraph [17] is clear and that the Union is seeking to expand the meaning to include the Union. Further, it is submitted that while the 2016 Local Roster Agreement was signed by the Union, employees and the employer, it does not preclude the way in which a local roster agreement can be made. The fact that SICTL had previously reached agreement with the Union did not mean it was bound to do so in the future.
Jurisdiction of the Commission
[59] SICTL submits that the various remedies sought by the Union are beyond the power of the Commission to make. The first order sought, being that all maintenance employees are only to be rostered and paid in accordance with the Local Roster Agreement unless and until a new local roster is agreed to, is said to be contrary to s.739(5) of the Act as it would be an order inconsistent with the Enterprise Agreement. This is because clause 16.1 of the Enterprise Agreement provides that the employer is at all times able to roster and allocate any employee individually in a flexible manner in accordance with the arrangements in the Enterprise Agreement.
[60] In regard to the second order sought, being that all maintenance employees are rostered and paid within 5 days of the first order, it is submitted by SICTL that it would be an order in the nature of a declaration and contradicts an express term of the enterprise agreement. The Commission is said not to have the power to declare and or enforce the legal rights of the parties which is an exercise of judicial power which is a matter for a court to determine.
[61] In respect to the third order sought, being that SICTL has breached clause 13 Issue Resolution of the Enterprise Agreement, it is submitted by SICTL that there has been no breach of clause 13 and such a declaration would be a prohibited exercise of judicial power by the Commission. SICTL submits that the application by the Union calls on the Commission to exercise judicial power as opposed to arbitral power.
[62] SICTL submits that the Commission cannot deal with the dispute as the remedies sought by the Union seek a binding determination on the rights or obligations arising from the Enterprise Agreement as opposed to forming a view about the legal rights for the purpose of taking some other step in resolving the dispute within the Commission’s jurisdiction. 41
Consideration
[63] It is not apparently in dispute, and I accept on the evidence and submissions of SICTL, that due to the winning of more work and the age of existing infrastructure at its Port Botany site a separate local roster of maintenance employees dedicated to preventative maintenance was required. 42 What is in dispute is whether the Enterprise Agreement mandates that the rostering arrangements for a new dedicated maintenance crew can only be introduced through a local agreement and, if so, whether the agreement of the Union is required.
[64] The Union submits that SICTL is not adhering to the Enterprise Agreement in acting without their agreement in rostering employees on a separate preventative maintenance roster. This is disputed by SICTL.
[65] This Commission has consistently held that parties should honour their agreements. The Full Bench in Qantas Airways Limited v Australian Municipal, Administrative, Clerical and Services Union43 (Qantas v ASU) stated that the Commission should do all it can to encourage parties to honour their agreements.44 A similar sentiment was expressed by the Full Bench in Cochlear Limited v AMWU45 (Cochlear) at paragraph 35.
“It is self-evident that it is in the public interest that parties to an agreement abide by the terms upon which they had agreed. The principal object of the Act, as was the case with the pre-reform Act, is to provide a framework for cooperative workplace relations. Nothing could be more inimical to that object than to have parties reneging on their commitments as embodied in agreements made under the Act.”
(My underline)
[66] This is particularly more so where the objects of the Act encourage the registration of enterprise agreements.46 Agreements made and registered under the Act or its predecessors are given the protection of not being subject to unilateral change by either party but must be amended, varied or terminated subject to a legislated process.
[67] As raised by SICTL, when arbitrating disputes as per the terms of an enterprise agreement under s.739 of the Act the Commission is restrained from making a decision that is inconsistent with the terms of the Enterprise Agreement. Sections 739(4) and (5) of the Act in particular state:
“(4) If, in accordance with the term, the parties have agreed that the FWC may arbitrate (however described) the dispute, the FWC may do so.
Note: …
(5) Despite subsection (4), the FWC must not make a decision that is inconsistent with this Act, or a fair work instrument that applies to the parties.”
(My underline)
[68] While for the reasons provided below this Commission is not empowered to enforce the terms of an enterprise agreement, it is to be noted that a contravention of an enterprise agreement by a person covered by the enterprise agreement is a breach of s.50 of the Act. Being a civil remedy provision a finding that an enterprise agreement has been contravened should not be made lightly as per the reasons provided by Flick J in Australian Building and Construction Commissioner v Hall 47 and those of O’Callaghan J in Australian Nursing and Midwifery Federation v Bupa Aged Care Australia Pty Ltd.48This would apply equally to such a determination made by the Commission in the resolution of a dispute subject to a dispute resolution clause in an enterprise agreement.
Jurisdiction to deal with the dispute
[69] The Union has filed its application pursuant to s.739 of the Act. Section 739 is titled Disputes dealt with by the Fair Work Commission, and states at s.739(1):
“This section applies if a term referred to in section 738 requires or allows the Commission to deal with a dispute.”
[70] Further, sub-s.739(4) states:
“If, in accordance with the term, the parties have agreed that the Commission may arbitrate the dispute, however described, the Commission may do so.”
[71] It is therefore necessary to ascertain the nature of the dispute the Union requires the Commission to determine and whether the Enterprise Agreement includes a term that provides a procedure for dealing with the dispute, and whether such a procedure requires and allows the Commission to deal with the dispute, including by arbitration under ss.738 and 739 of the Act.49
[72] At clause 13 - Issue Resolution the Enterprise Agreement contains its own mechanism for resolving disputes. The clause is of wide application stating at 13.1:
“In the event of a dispute arising in the workplace in regard to the application of this Agreement, the National Employment Standards, or any matter pertaining to the employment relationship …”
[73] The clause allows the Commission to arbitrate the dispute after first attempting to resolve the dispute as it considers appropriate, including by conciliation. In this respect a conciliation conference was held on 23 March 2019 which adjourned on the basis that the parties would hold further discussions which took place, but a resolution was not reached and the Union subsequently requested that the matter be listed for arbitration. 50 The issue in dispute arises in connection with the terms of the Enterprise Agreement and the application of clause 16 and Schedules 4 and 5 of the Agreement.
[74] SICTL submitted that the application cannot be dealt with by the Commission as the remedies sought seek a binding determination on the rights or obligations arising from the Enterprise Agreement, as opposed to forming a view about legal rights for the purpose of taking some other step in resolving a dispute within the Commission’s jurisdiction. Although the submission was not supported by reference to any case authority, the argument made was addressed by a Full Court of the Federal Court in Construction, Forestry, Mining and Energy Union v Wagstaff Piling Pty Ltd and Others 51 where the majority, Buchanan and Katzmann JJ, stated at [21]:
“Although FWA cannot exercise the judicial power of the Commonwealth, it is well established that a federal industrial tribunal, exercising powers of conciliation and arbitration, may legitimately form and act upon opinions about legal rights and obligations as a step in the exercise of its own functions and powers (see Re-Cram; Ex parte Newcastle Wallsend Coal Company Pty Ltd (1987)163 CLR 140 at 149).
However, the decision of the Commissioner did not observe this fundamental distinction. The Commissioner expressed an opinion about a legal matter, but did not do so for the purpose of taking some further step within his own power.”
[75] As discussed above, the Union has in its written reply submissions amended its originating application should its application be successful, and the Commission finds that its orders 2 and 3 are beyond power, to seeking a recommendation and opinion respectively.
[76] In TWU v Mayne Nickless Ltd52 the Full Court of the Federal Court held that in determining whether an application requires the Commission to exercise judicial, as opposed to arbitral power, “a court should review the entire factual background to properly characterise the claim and the power sought to be invoked.”53 In ascertaining the nature of a dispute the Commission is not confined to the application.54
[77] In the High Court decision of Construction Forestry Mining and Energy Union v Australian Industrial Relations Commission55 it was stated that the power of arbitration under a dispute settlement clause is a power conferred by the parties under their agreement:
“[29] … As already indicated, it is incidental to the conciliation and arbitration power for the Parliament to permit parties to an industrial situation to agree on the terms on which they will settle the matters in issue between them conditional upon their agreement having the same legal effect as an award. So, too, it is incidental to that power for the Parliament to give legal effect to agreed procedures for maintaining a settlement of that kind and, also, for it to authorise the Commission to participate in those procedures.
[30] There is, however, a significant difference between agreed and arbitrated dispute settlement procedures. As already indicated, the Commission cannot, by arbitrated award, require the parties to submit to binding procedures for the determination of legal rights and liabilities under an award because Ch III of the Constitution commits power to make determinations of that kind exclusively to the courts. However, different considerations apply if the parties have agreed to submit disputes as to their legal rights and liabilities for resolution by a particular person or body and to accept the decision of that person as binding on them.
[31] Where parties agree to submit their differences for decision by a third party, the decision maker does not exercise judicial power, but a power of private arbitration. Of its nature, judicial power is a power that is exercised independently of the consent of the person against whom the proceedings are brought and results in a judgment or order that is binding of its own force. In the case of private arbitration, however, the arbitrator's powers depend on the agreement of the parties, usually embodied in a contract, and the arbitrator's award is not binding of its own force. Rather, its effect, if any, depends on the law which operates with respect to it.
[32] To the extent that s.170MH of the IR Act operates in conjunction with an agreed dispute resolution procedure to authorise the Commission to make decisions as to the legal rights and liabilities of the parties to the Agreement, it merely authorises the Commission to exercise a power of private arbitration. And procedures for the resolution of disputes over the application of an agreement made by parties to an industrial situation to prevent that situation from developing into an industrial dispute are clearly procedures for maintaining that agreement. Parliament may legislate to authorise the Commission to participate in procedures of that kind. Accordingly, s.170MH of the IR Act is valid. 56
[33] …
[34] The parties to an industrial situation are free to agree between themselves as to the terms on which they will conduct their affairs. Their agreement has effect according to the general law. If their agreement is certified, it also has effect as an award. To the extent that an agreement provides in a manner that exceeds what is permitted either by the Constitution or by the legislation which gives the agreement effect as an award, it cannot operate with that effect. But the underlying agreement remains and the validity of that agreement depends on the general law, not the legislative provisions which give it effect as an award.” (references omitted)
[78] The Commission's jurisdiction to deal with the Union’s application therefore arises from the Issue Resolution procedure in the Enterprise Agreement. When arbitrating a dispute pursuant to a dispute settlement procedure in an enterprise agreement, the Commission is not exercising judicial power, but a power of private arbitration.57 As a private arbitrator, the Commission is authorised to make decisions as to the legal rights and liabilities of parties to whom the enterprise agreement applies.58 That involves deciding “all questions both of law and of fact”59 that arise in the dispute, subject to any limitation on power in the dispute settlement clause and a requirement not to make a decision that is inconsistent with the Act, or a Fair Work instrument that applies to the parties.
[79] A Full Bench in Metropolitan Fire and Emergency Services Board v United Firefighters’ Union of Australia; Garth Duggan at [38] summarised the role of the Commission in the following manner:
“the Act now permits arbitration of disputes that the parties allow to be arbitrated under an enterprise agreement, limited only by the dispute settlement clause itself.” 60
[80] In characterising the nature of the dispute in this matter, the Commission is not confined to the dispute notification document. The entire factual background is relevant, including matters such as the submissions advanced. In this context, I adopt the approach taken by the Full Court of the Federal Court in TWU v Mayne Nickless Ltd. That is, in determining whether an application calls on the Commission to exercise judicial, as opposed to arbitral power, ‘a court should review the entire factual background to properly characterise the claim and the power sought to be invoked.’61
[81] In view of the authority of the Commission acting as a private arbitrator as per dispute settlement clauses of industrial instruments, I find that the Commission has the power to determine the meaning and effect of relevant clauses of the Enterprise Agreement even where this involves a finding on the legal rights and obligations under the Agreement.
[82] As stated by VP Lawler in Bernard Terence Bastian Pulle v Bernard Terence Bastian Pulle62 the outcome of an arbitration conducted pursuant to a dispute resolution procedure in an enterprise agreement is not an “order” enforceable as such but, rather, a determination that is binding on the parties by virtue of the fact that they are bound by the agreement itself. The enforcement of such a determination is not an enforcement of an “order” but enforcement of the dispute resolution procedure in the agreement. This conclusion was also reflected by a Full Bench in 2016:
“[60] … In the case of private arbitration, however, the arbitrator's powers depend on the agreement of the parties, usually embodied in a contract, and the arbitrator's award is not binding of its own force. An arbitrator’s decision in a private arbitration should be expressed as a determination because it cannot be enforced under the Act as an order.
[61] … The parties cannot confer a statutory power to make orders of a binding force on the Commission. All they can do is agree, as a matter of contract, to accept the outcome of arbitration. The power to arbitrate is created by the parties’ agreement and is enforceable as a matter of contract.” 63
[83] In view of the above, the Union has made the appropriate concession in not pursuing as a remedy ‘order’ for the Commission to issue should the Commission hold it is without jurisdiction to do so.
Interpretation of industrial agreements
[84] The Full Bench decision of Australasian Meat Industry Employees Union v Golden Cockerel Pty Limited64 (Golden Cockerel) traversed the approach to be taken in interpreting enterprise agreements and stated that the general approach to the construction of enterprise agreements was as explained in the judgment of French J, as he then was, in City of Wanneroo v Australian Municipal, Administrative, Clerical and Services Union (2006) (City of Wanneroo).
[85] In City of Wanneroo French J, observed:65
“The construction of an award, like that of a statute, begins with a consideration of the ordinary meaning of its words. As with the task of statutory construction regard must be paid to the context and purpose of the provision or expression being construed. Context may appear from the text of the instrument taken as a whole, its arrangement and the place in it of the provision under construction. It is not confined to the words of the relevant Act or instrument surrounding the expression to be construed. It may extend to ‘...the entire document of which it is a part or to other documents with which there is an association’. It may also include ‘....ideas that gave rise to an expression in a document from which it has been taken’ - Short v FW Hercus Pty Ltd (1993) 40 FCR 511 at 518 (Burchett J); Australian Municipal, Clerical and Services union v Treasurer of the Commonwealth of Australia (1998) 80 IR 345 (Marshall J).”66
[86] The Full Bench in Golden Cockerel then drew on other authorities to expand on the approach to be taken at paragraphs 20 to 22 of their decision including the decision in Kucks v CSR Limited67 (Kucks).
[87] In Kucks, being a matter relating to the interpretation of an industrial award, Madgwick J held that that a narrow pedantic approach to interpretation of awards should be avoided and meanings which avoid inconvenience or injustice may reasonably be strained for:
“It is trite that narrow or pedantic approaches to the interpretation of an award are misplaced. The search is for the meaning intended by the framer(s) of the document, bearing in mind that such framer(s) were likely of a practical bent of mind: they may well have been more concerned with expressing an intention in ways likely to have been understood in the context of the relevant industry and industrial relations environment than with legal niceties or jargon. Thus, for example, it is justifiable to read the award to give effect to its evident purposes, having regard to such context, despite mere inconsistencies or infelicities of expression which might tend to some other reading. And meanings which avoid inconvenience or injustice may reasonably be strained for. For reasons such as these, expressions which have been held in the case of other instruments to have been used to mean particular things may sensibly and properly be held to mean something else in the document at hand.
But the task remains one of interpreting a document produced by another or others. A court is not free to give effect to some anteriorly derived notion of what would be fair or just, regardless of what has been written into the award. Deciding what an existing award mean is a process quite different from deciding, as an arbitral body does, what might fairly be put into an award. So, for example, ordinary or well-understood words are in general to be accorded their ordinary or usual meaning.”68
[88] In 2017 a Full Bench of the Commission in Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (known as the Australian Manufacturers Workers Union (AMWU) v Berri Pty Ltd69 (Berri) made the following observations in relation to interpreting enterprise agreements:
“[41] The construction of an enterprise agreement, like that of a statute or a contract, begins with a consideration of the ordinary meaning of the relevant words. The disputed words must be construed in the context of the agreement as a whole. The process of interpretative analysis focusses upon the language of the agreement itself. In Amcor Limited v CFMEU,70 Gleeson CJ and McHugh J described the process in the following terms: ‘[t]he resolution of the issue turns upon the language of the particular agreement, understood in the light of its industrial context and purpose ...’.71 Or, as Kirby J put it in the same case, ‘[i]nterpretation is always a text-based activity’.72
[89] Later on, in their decision at paragraph [114] the Full Bench determined that the summary of principles relevant to the task of construing an enterprise agreement summarised in Golden Cockerel should be modified as follows:
“The principles relevant to the task of construing a single enterprise agreement may be summarised as follows:
1. The construction of an enterprise agreement, like that of a statute or contract, begins with a consideration of the ordinary meaning of the relevant words. The resolution of a disputed construction of an agreement will turn on the language of the agreement having regard to its context and purpose. Context might appear from:
(i). the text of the agreement viewed as a whole;
(ii). the disputed provision’s place and arrangement in the agreement;
(iii). the legislative context under which the agreement was made and in which it operates.
2. The task of interpreting an agreement does not involve rewriting the agreement to achieve what might be regarded as a fair or just outcome. The task is always one of interpreting the agreement produced by parties.
3. The common intention of the parties is sought to be identified objectively, that is by reference to that which a reasonable person would understand by the language the parties have used to express their agreement, without regard to the subjective intentions or expectations of the parties.
4. The fact that the instrument being construed is an enterprise agreement made pursuant to Part 2-4 of the FW Act is itself an important contextual consideration. It may be inferred that such agreements are intended to establish binding obligations.
5. The FW Act does not speak in terms of the ‘parties’ to enterprise agreements made pursuant to Part 2-4 agreements, rather it refers to the persons and organisations who are ‘covered by’ such agreements. Relevantly s.172(2)(a) provides that an employer may make an enterprise agreement ‘with the employees who are employed at the time the agreement is made and who will be covered by the agreement’. Section 182(1) provides that an agreement is ‘made’ if the employees to be covered by the agreement ‘have been asked to approve the agreement and a majority of those employees who cast a valid vote approve the agreement’. This is so because an enterprise agreement is ‘made’ when a majority of the employees asked to approve the agreement cast a valid vote to approve the agreement.
6. Enterprise agreements are not instruments to which the Acts Interpretation Act 1901 (Cth) applies, however the modes of textual analysis developed in the general law may assist in the interpretation of enterprise agreements. An overly technical approach to interpretation should be avoided and consequently some general principles of statutory construction may have less force in the context of construing an enterprise agreement.
7. In construing an enterprise agreement it is first necessary to determine whether an agreement has a plain meaning or it is ambiguous or susceptible of more than one meaning.
8. Regard may be had to evidence of surrounding circumstances to assist in determining whether an ambiguity exists.
9. If the agreement has a plain meaning, evidence of the surrounding circumstances will not be admitted to contradict the plain language of the agreement.
10. If the language of the agreement is ambiguous or susceptible of more than one meaning then evidence of the surrounding circumstance will be admissible to aide the interpretation of the agreement.
11. The admissibility of evidence of the surrounding circumstances is limited to evidence tending to establish objective background facts which were known to both parties which inform and the subject matter of the agreement. Evidence of such objective facts is to be distinguished from evidence of the subjective intentions of the parties, such as statements and actions of the parties which are reflective of their actual intentions and expectations.
12. Evidence of objective background facts will include:
(i) evidence of prior negotiations to the extent that the negotiations tend to establish objective background facts known to all parties and the subject matter of the agreement;
(ii) notorious facts of which knowledge is to be presumed; and
(iii) evidence of matters in common contemplation and constituting a common assumption.
13. The diversity of interests involved in the negotiation and making of enterprise agreements (see point 4 above) warrants the adoption of a cautious approach to the admission and reliance upon the evidence of prior negotiations and the positions advanced during the negotiation process. Evidence as to what the employees covered by the agreement were told (either during the course of the negotiations or pursuant to s.180(5) of the FW Act) may be of more assistance than evidence of the bargaining positions taken by the employer or a bargaining representative during the negotiation of the agreement.
14. Admissible extrinsic material may be used to aid the interpretation of a provision in an enterprise agreement with a disputed meaning, but it cannot be used to disregard or rewrite the provision in order to give effect to an externally derived conception of what the parties’ intention or purpose was.
15. In the industrial context it has been accepted that, in some circumstances, subsequent conduct may be relevant to the interpretation of an industrial instrument. But such post-agreement conduct must be such as to show that there has been a meeting of minds, a consensus. Post-agreement conduct which amounts to little more than the absence of a complaint or common inadvertence is insufficient to establish a common understanding.”
[90] As a private arbitrator for the purposes of the Issue Resolution clause I adopt the ratio of the above authorities and seek to provide an interpretation that gives effect to the terms of the Enterprise Agreement construed in a practical common-sense manner as expressed in Kucks 73 above and by Kirby J in Amcor (also referred to above)that construction of an industrial agreement:
“should not be a strict one but one that contributes to a sensible industrial outcome such as should be attributed to the parties who negotiated and executed the Agreement” 74
[91] In this dispute the Union contends that all maintenance employees are subject to the rostering arrangements set out in the Local Roster Agreement to the exclusion of other rosters unless and until a new roster is agreed to. That agreement needs to include the Union which has to date not been obtained. The use of the word ‘local’ is said to distinguish between the two ports of Sydney and Brisbane.
[92] I am satisfied on the evidence of Mr Keating that there exist two local agreements entered into between SICTL and the Union concerning rostering arrangements for maintenance employees at the Port Botany site. 75 These agreements are a reflection of rostering arrangements agreed locally in accordance with the provisions set out in the Agreement in particular as provided for under Schedule 5 of the Agreement.
[93] The agreed local roster arrangement for maintenance employees employed at SICTL’s Port Botany site is that reached with the Union in July 2016 titled Local Rostering Arrangement signed by both SICTL and the Union. A further document titled Local Rostering Arrangements for Maintenance Employees at Sydney International Container Terminals Pty Limited (SICTL) was tendered into evidence. An email from SICTL’s Human Resources Manager of 30 June 2016, thanking the Union for working with the employer to ‘develop this Local Arrangement’ confirms the authenticity of the local agreement. 76
[94] The Local Rostering Arrangement does not include the roster now being worked by new employees engaged to perform preventative maintenance work on day shift at the Port Botany site who were employed in September and October 2018.
[95] A local agreement with the Union has not been reached for these employees to work the roster now undertaken. Whether this work is subject to Schedule 4 or Schedule 5 of the Enterprise Agreement is also in dispute, 77 although for the purposes of this dispute both Schedules contain the same contentious wording being ‘… will work in accordance with rostering arrangements to be agreed locally’.78 The Union contend that in 2016 when the local roster arrangement was reached for maintenance employees the employees transitioned from Phase 1 arrangements under Schedule 4 to Phase 2 arrangements under Schedule 5. The Union submit that the only local agreement in existence are the arrangements entered into in 2016 with the Union. Whereas SICTL submits that it has entered into a more recent local agreement with a limited number of maintenance employees engaged subsequent to 2016 and in any event the 2016 local agreement has no application to these employees.
[96] The local agreement said by SICTL to exist between itself and employees working the day shift preventative maintenance roster was not in evidence before the Commission.
Are the Union party to the Enterprise Agreement?
[97] The Union advances, in part, its argument that it must be party to any local agreement on the basis it is a party to the Agreement.
[98] The Act does not identify “parties” to an enterprise agreement but refers to persons and organisations that will be covered by an agreement. 79 The provisions relating to a union’s coverage by an agreement are dealt with in s.53, s.183 and s.201(2) of the Act. In summary, they provide that an enterprise agreement can cover a union that was a bargaining representative for an agreement. After an enterprise agreement is made, an employee organisation (union) that was a bargaining representative for the proposed enterprise agreement concerned may give the Commission written notice stating that it wants the enterprise agreement to cover it.80 In any approval decision the Commission must then note in its decision to approve the agreement that the agreement covers the organisation. In the Enterprise Agreement approval decision this notation is reflected at paragraph [3] of the decision. 81
[99] Section 52 of the Act provides that an Agreement applies to an employee organisation where that agreement covers the employee organisation. Section 51 of the Act refers to obligations and entitlements where an agreement applies to a person. At s.53(2)(a) of the Act an agreement covers an employee organisation where the Commission has noted in its decision to approve the agreement that the agreement covers the employee organisation.
[100] In the 2014 decision of the Federal Full Court in Toyota Motor Corporation Australia Limited v Marmara 82(Marmara) the following was stated:
“[88] Under the FW Act, an enterprise agreement is an agreement in name only. Those who, by s 172(2), are empowered to “make” an enterprise agreement are the employer and “the employees who are employed at the time the agreement is made and who will be covered by the agreement”. A contract lawyer would assume that those persons would be parties to the agreement, and that the assent of all of them would be necessary for the agreement to be “made”. But the lawyer would be wrong on both counts. The FW Act does not identify the employer, or any employee, as a “party” to an enterprise agreement. Further, notwithstanding the specific empowering terms of s 172, it is not necessary for all the employees who are employed at the time an agreement is made and who will be covered by the agreement to assent to the terms of the agreement. Once a majority of those employees have agreed by voting, the agreement must be sent to the Commission for approval and, if approved, thenceforth applies to all the employees in the relevant group, even those who did not agree, and even those, subsequently taken into employment, who were not part of the relevant group at the time the vote was taken under s 182.”
[101] In the 2018 Federal Full Court decision of Energy Australia Yallourn Pty Ltd v Automotive, Food, Metal, Engineering, Printing and Kindred Industries Union 83 (Yallourn) the plurality Rares and Barker JJ made the following comments while referring to the decision in Marmara:
“[58] An enterprise agreement must be construed in its industrial and legislative context as an agreement made between parties engaged in an employment relationship in which employee organisations, such as the five unions, can, and often will, have a workplace right under ss.341(1) and or 183(1) of the Fair Work Act to play a part, including as a party to it.”
…
“[79] The approval mechanism that the Fair Work Act prescribes in ss 186, 187 and 201 does not, and is not intended to, exclude the role of an employee organisation, such as a union, to be a party to an enterprise agreement with the rights of each other party to it. That role, necessarily, is created and defined by the terms of an enterprise agreement and the exercise of any election by the union to give notice under ss 53(2) and 183(1) of the Fair Work Act to seek the Commission’s notation in its decision under s 201(2) that it be covered and, so, to have a statutory status as a party to, and with full legal capacity to enforce, it under ss 50-53, 183(1) and 341(1) both in a judicial proceeding and also in accordance with its terms in a dispute resolution process under s 186(6), including in respect of matters referred to in ss 172(1), 341 and 540(2).”
[102] In Yallourn the relevant enterprise agreement included the unions in the definition of ‘Party’ and the relevant unions were covered by the Agreement.
[103] In this Enterprise Agreement the term ‘Parties’, while always spelt with a capital ‘P’ and used throughout the Agreement, is not defined within the Agreement.
[104] Under the heading to clause 2 Parties and Scope, subclause 2.1 states that the Agreement covers the Union, the employer and relevant employees. Clause 3 Term of Agreement & Renegotiation of Agreement requires the ‘Parties’ to commence negotiations for a replacement agreement within a specified time and that the Parties agree to a number of other listed matters.
[105] At clause 13.3 of the Issue Resolution clause it allows ‘either Party’ to refer the matter to ‘National level’ for discussion between the Parties. This would appear to be a reference to the National offices of the employer and the Union. Clause 12.2 requires SICTL to notify the ‘National Office’ and the ‘relevant Branch Secretary of the Union’ when introducing specified changes.
[106] I am thus satisfied that where the term Parties is used in the Enterprise Agreement it includes the Union. So much appears to be accepted by SICTL. 84
What is the meaning of a local agreement?
[107] The Union contends that the reference to ‘rostering arrangements to be agreed locally’ in Schedules 4 and 5 of the Enterprise Agreement means that the agreement of the Union must be sought and obtained. This has been the custom and practice with previous local rostering agreements and the current local agreement negotiated in 2016 which names the Union as a party. 85 Further, the Union is covered by the Enterprise Agreement and had been in negotiations with SICTL for a new roster arrangement which has led to the dispute application before the Commission.
[108] When construing a particular provision in an enterprise agreement it is appropriate to have regard to the terms of the agreement as a whole. In some circumstances the proper construction of a particular clause can only be understood by considering other clauses in the agreement. 86
[109] SICTL relies on clause 16 - Allocation and Working Arrangements and in particular subclause 16.1 of the Enterprise Agreement. Clause 16 is a general provision relating to the allocation of employees and their working arrangements. Subclauses 16.1 and 16.2 are, as stated, subject to the arrangements in the Enterprise Agreement:
“16.1 The Company will at all times be able to roster and allocate any employee individually in a flexible manner in accordance with the arrangements in this Agreement.”
16.2 Employees shall work in accordance with the arrangements detailed in the following sub-sections and the roster and related rules in Schedule 4 or arrangements in Schedule 5 of this Agreement, as applicable. As noted in sub-clause 6.15 of this Agreement, when work volumes indicate, the roster and related rules in Schedule 5 of this agreement shall apply.”
(My underline)
[110] Clause 16.2 provides that employees will work in accordance with the roster and related rules in Schedule 4 or arrangements in Schedule 5 of the Enterprise Agreement as applicable.
[111] Under the heading Enterprise Employment clause 6.1 of the Agreement provides as follows:
“6.1 An employee covered by this Agreement will be employed as:
6.1.1 A full time employee engaged as such for an average of 30 hours per week in accordance with this Agreement in Schedule 4; or
6.1.2 A full time employee engaged as such for an average of 32 hours per week in accordance with this Agreement in Schedule 5; or…”
(My underline)
[112] Schedule 4 of the Enterprise Agreement is titled Phase 1 Roster and under the heading Roster Rules at [17] states:
“Level 5 employees and maintenance employees covered by this Agreement will work in accordance with rostering arrangements to be agreed locally.”
[113] Similarly, Schedule 5 of the Enterprise Agreement titled Phase 2 Arrangements – 32 Hour Operations under the heading Roster Rules and Related Commitments at [10] states:
“Level 5 employees and maintenance employees employed under this Agreement will work in accordance with rostering arrangements to be agreed locally.”
(My underline)
[114] The general rights of the employer to be able to roster and allocate employees in a flexible manner relied on by SICTL at clause 16.1 of the Enterprise Agreement are circumscribed by the specific and unambiguous reference to rostering and allocation of employees being undertaken ‘in accordance with the arrangements in this agreement’. Further, point 5 of the document Local Rostering Arrangement signed by SICTL on 30 June 2016 states that to the extent that the Local Rostering Arrangement is inconsistent with a term of the Enterprise Agreement it shall apply to the exclusion of the Enterprise Agreement.
[115] The ‘Roster Rules’ of both Schedules 4 and 5 require rostering arrangements to be ‘agreed locally’ in respect to maintenance employees. What ‘agreed locally’ means is not defined but it is understood that locally is a reference to the work sites at Port Botany and Brisbane.
[116] It is clear that in respect of the rostering of maintenance employees there exists in the Enterprise Agreement at Schedules 4 and 5 the arrangements referred to in clause 16.1. Both Schedules state that maintenance employees will work in accordance with rostering arrangements to be agreed locally. There is an inescapable obligation for rostering arrangements for maintenance employees to be agreed locally.
[117] It is not possible to ignore the words in 16.1 that the right of SICTL to roster and allocate employees in a flexible manner is to be exercised in accordance with the arrangements in the Enterprise agreement rosters. It appears that in the past at least, the actions taken by SICTL and the Union has been consistent with the terms of Schedules 4 and 5 at paragraphs [17] and [10] respectively in requiring and reaching a local agreement. This was demonstrated in the evidence of Mr Keating which was not contested. Mr Keating stated that in respect of maintenance employees a local agreement was entered into in July 2014 87 under the terms of the then in-term Greenfields Agreement 2013 with the Union.88 The Greenfields Agreement mirrors for all intents and purposes the relevant terms of the current Enterprise Agreement in respect of the rostering of maintenance employees being subject to local agreements.
[118] The 2014 local agreement was then superseded by the 2016 local agreement made during the life of the current Enterprise Agreement and entered into on the basis of an increased need for maintenance work. 89
[119] In 2018, SICTL engaged additional maintenance employees who commenced working rosters outside of those in the 2016 local agreement, without the agreement of the Union. Despite subsequent discussions no agreement with the Union resulted, although the employer submits it has the agreement of the maintenance employees concerned.
[120] The wording in Schedules 4 and 5 contain a specific provision dealing with rostering arrangements for maintenance employees, which as a matter of construction will normally override a more general provision dealing with the same topic.
[121] There is nothing in clause 16.1 or 16.2 that would suggest that it might override the more specific provisions in regard to maintenance roster arrangements contained in the Schedules to the Agreement or that the words as expressed in the schedules should be ignored.
[122] I am satisfied that the 2016 Local Agreement as expressed in the two documents tendered by the Union are arrangements entered into between SICTL and the Union in accordance with the provisions of the Enterprise Agreement. Further, I accept as put by the Union that on the wording of the local agreement it has application to all maintenance employees whether they perform general or preventative maintenance work. This is supported by the evidence of Ms Mihalopoulos who acknowledged that employees working under the 2016 local agreement, although it was a minor part of their duties, undertook preventative maintenance work. There is no reason to read down the words ‘cover all SICTL maintenance employees’ expressed in clause (1) under the heading Parties and Scope of the document titled Local Rostering Arrangements for Maintenance Employees at Sydney International Container Terminals Pty Ltd (SICTL) as applying only to general maintenance work.
[123] There is no specific guidance in the Enterprise Agreement of the mechanics on how ‘rostering arrangements to be agreed locally’ is to be applied. SICTL contends that a local agreement does not require the agreement of the Union and can be made with an individual employee.
[124] This is not to say, however, that the Enterprise Agreement provisions at Schedules 4 and 5 should be read as restricting a local agreement to a single agreement. That is, the existing 2016 local agreement could remain undisturbed and operational in conjunction with any another local agreement that is entered into. Indeed, the Union and SICTL had unsuccessfully entered into discussions to reach agreement on a separate arrangement for employees to work a day shift solely on preventative maintenance although whether this would have resulted in an additional local agreement or a replacement one was not explained.
[125] The real question is whether such a local agreement can be reached between SICTL and employees without the agreement of the Union. While on the evidence this has not been the past practice, the wording of the Enterprise Agreement allows an agreement to be reached without specifying that it must include the agreement of the Union.
[126] There was no reliance by SICTL on clause 25 Flexibility Clause of the Enterprise Agreement which allows the employer and an employee to directly make an individual flexibility arrangement to vary the effect of the terms of the Enterprise Agreement in relation to ‘arrangements for when work is performed’.
[127] The relevant wording ‘rostering arrangements to be agreed locally’ does not, like some other provisions of the Agreement, mandate who the parties to the local agreement must be. For example, in a number of other circumstances in the Enterprise Agreement, the following wording is used.
• 3.1(a) - mutually agreed by the Parties
• 4(a)(i) - agreed between the employee and the Company
• 8.27 - agreed between the Parties
• 16.7 - consult with the Union
• 16.13 - union and employees
• 16.16 - the Company and employees
• 17.16 - unless otherwise agreed on the job
• 18.11 - unless otherwise agreed between the Parties
• 18.13 - must be applied for by the employee and agreed by the Company
• 18.33 - otherwise agreed at a local level.
• 25.1(c) - is genuinely agreed to by the employer and employee
• Schedule 6 at 3.1(a) - is mutually agreed by the Parties
• Schedule 6 at 3.2 - at times agreed to by the Company
[128] In this case the wording does not specify that the purported local agreement is to be with the ‘Parties’ or the ‘Union’, and as such it would be an error of construction to insert such words when the drafters 90 of the Enterprise Agreement themselves have chosen in this instance, unlike in a number of other clauses in the Enterprise Agreement not to do so.
[129] It was not suggested by any party that the relevant wording in Schedules 4 or 5 were ambiguous or susceptible of more than one meaning, needing other than the plain meaning to be ascribed to the words. As the Full Bench in Berri stated: “The task of interpreting an agreement does not involve rewriting the agreement to achieve what might be regarded as a fair or just outcome”. 91
[130] While on this occasion the past practice of reaching agreement with the Union has been dispensed with by SICTL, I am satisfied that there is no warrant to interpret the Enterprise Agreement wording of ‘agreed locally’ as a requirement to obtain the Union’s agreement. As Kirby J stated in Amcor:
“In the present case, the Union's submission was that these generalities were all very well, but that in the end, the Court had to give effect to the language of the Agreement. Clearly, this is correct.” 92
[131] SICTL’s choice to introduce a local arrangement with agreement of employees without the Union’s agreement was open to it under the wording in the Schedules. SICTL was entitled to allocate any maintenance employee individually as expressed in clause 16.1 in a manner in accordance with arrangements agreed locally. Both SICTL and the Union would be conscious of the impact on their working relationship following the inability to reach an agreement in the first instance and SICTL’s decision to reach an agreement directly with employees without the agreement of the Union.
[132] How the local agreement with employees has been obtained was not made clear during the hearing. As mentioned above, the terms of SICTL’s local agreement with its employees employed to work on preventative maintenance were not provided to the Commission.
[133] In SICTL’s written submissions it is stated that:
“… agreements with the four employees contained a locally agreed rostering arrangement.” 93
[134] Ms Mihalopoulos’ evidence was that applicants were interviewed and SICTL initially made offers of employment. In each case successful applicants were advised they would be working on a dedicated day shift and would not be required to work as part of a rotating roster or on night shifts. 94 Ms Mihalopoulos also attached to her witness statement an email she had sent to Mr Keating on 29 October 2018 which included the following:
“New Starters have been employed on either the agreed local arrangement or on Schedule 4 until a local arrangement can be agreed.”
(My underline)
[135] Where employees have been initially engaged and subsequently enter into an agreement with SICTL concerning their roster arrangements as per the statement of Ms Mihalopoulos in the above email extract, this would be a local agreement for the purposes of the Enterprise Agreement.
[136] If, however, applicants are only employed on the basis that it is a condition of employment they work the preventative maintenance roster, it is my provisional view this would not constitute a local agreement for the purposes of the Enterprise Agreement. It would appear to circumvent the obligation in the Enterprise Agreement to reach a local agreement if a stipulated maintenance roster is a condition of employment and offer no real choice to the employee. No submissions were made on this point and, if required, can be the subject of supplementary submissions.
[137] In view of the conclusions reached above, the following determinations in respect of the Union application are made:
i. The rostering arrangements for maintenance employees must be determined under a local agreement.
ii. The rostering arrangements set out in the Local Rostering Agreement of June 2016 covers all maintenance employees unless a further local agreement/s is entered into.
iii. A local agreement does not require the agreement of the Union
[138] My further provisional view as expressed above, subject to both SICTL and the Union having the opportunity to make any submissions on this point if required, is that a local agreement cannot be made a condition of employment. Any party wishing to put submissions on this point should contact my chambers within 7 days of this decision issuing. If no submissions are received it is to be taken to be the Commission’s concluded view.
DEPUTY PRESIDENT
Appearances:
Ms S Danalis for the Applicant
Mr P Brown, Solicitor, and Ms H Mihalopoulos for the Respondent
Hearing details:
Sydney
2020
March 18
Printed by authority of the Commonwealth Government Printer
<PR718075>
1 Email from Ms Danalis for the Applicant dated 29 October 2019
2 Email from Ms Danalis dated 5 November 2019
3 Statement of Paul McAleer dated 19 February 2020, Exhibit A1 at [16]
4 Sydney International Container Terminals Pty Limited (SICTL) Brisbane Container Terminals Pty Limited (BCT) Maritime Union of Australia Terminals Greenfields Enterprise Agreement 2013 [2013] FWCA 2714
5 Statement of Paul McAleer dated 19 February 2020, Exhibit A1 at [7-8]
6 Ibid at [19-21]
7 Ibid at [22]
8 Exhibits A2 and A3
9 Witness statement of 19 February 2020 at [8]
10 Witness statement of 19 February 2020 Attachment PK4
11 Witness statement of 19 February 2020 at [14]
12 Reply statement of Mr Keating 17 March at [7-9] Exhibit A3
13 Applicant’s Outline of Submissions dated 19 February 2020
14 See attachment to Statement of Paul Keating dated 19 February 2020, Exhibit A2, Annexure PK3
15 Applicant’s Reply Submissions dated 17 March 2020 at [11]
16 Ibid at [19]
17 Reply Submissions dated 17 March 2020 at [15-16]
18 Outline of Submissions dated 19 February 2020 at [32-34]
19 Reply Submissions dated 17 March 2020 at [20-21]
20 Written submissions of 10 March 2029 at [7]
21 Ibid at [8]
22 Ibid at [11]
23 Ibid at [14]
24 See clause 3.4
25 Written submissions of 10 March 2020 at [23]
26 Statement of Harriet Mihalopoulos dated 10 March 2020, Exhibit R1.
27 Ibid at [9]
28 Ibid at [10]
29 Witness statement of Ms Mihalopoulos at [14]
30 Ibid at [11]
31 Ibid at 16]
32 Ibid at [22]
33 Attachment HM1 to witness statement of Ms Mihalopoulos
34 Witness statement of Ms Mihalopoulos at [18]
35 Attachment HM2 to witness statement of Ms Mihalopoulos
36 Exhibit R1
37 Witness statement of Ms Mihalopoulos at [25-29]
38 Ibid at [28]
39 Respondent’s Outline of Submissions dated 10 March 2020
40 AMWU v Berri Pty Limited [2017] FWCFB 3005
41 Outline of Submissions of 10 March 2020 at [27-34]
42 It is assumed by the Commission that the recent COVID-19 pandemic has reduced SICTL’s workload
43 Print R2578, 5 March 1999
44 Ibid at paragraph 52
45 [2009] AIRCFB 27, PR985266
46 See ss.3(f) and 171 of the Act
47 [2017] FCA 274 at [19] and [20]
48 [2107] FCA 1246 at [30]
49 CEPU v Thiess Pty Ltd (2011) 212 IR 327 (CEPU vThiess) at [42] & [47]; CFMEU v AIRC [2001] HCA 16
50 Email of 29 October 2019
51 [2012] FCAFC 87
52 [1998] 1022 FCA per Olney, Drummond and Moore JJ
53 This approach was adopted in AMWU v Holden Limited PR940366 at [47]
54 Ibid
55 [2000] 203 CLR 645
56 [2000] 203 CLR 645 at 657-658
57 Linfox Australia Pty Ltd v TWU [2013] FCA 659 at [38]; AMWU v ALS Industrial Australia Pty Ltd [2015] FCAFC 123 at [34]-[36]
58 CFMEU v AIRC (2001) 203 CLR 645 at [32]; Linfox Australia Pty Ltd v TWU [2013] FCA 659 at [19]-[24]; AMWU v ALS Industrial Australia Pty Ltd [2015] FCAFC 123 at [34]-[36]
59 AMWU v ALS Industrial Australia Pty Ltd [2015] FCAFC 123 at [36]
60 [2016] FWCFB 8120
61 [1998] 1022 FCA per Olney, Drummond and Moore JJ
62 [2011] FWA 7462 at [71]
63 Metropolitan Fire and Emergency Services Board v United Firefighters’ Union of Australia; Garth Duggan[2016] FWCFB 8120
64 [2014] FWCFB 7447
65 (2006) 153 IR 426
66 Ibid at 438
67 (1996) 66 IR 182
68 Ibid at 184
69 [2017] FWCFB 3005
70 (2005) 222 CLR 241
71 Ibid at 246
72 Ibid at 262
73 Kucks v CSR Ltd (1996) 66 IR 182 at 184 per Madgwick J
74 [2005] HCA 10 at [96], (2005) 222 CLR 241 at 270
75 Attachments PK2 and PK3 of witness statement of 19 February 2020
76 Attachments PK4 Paul Keating witness statement of 19 February 2020
77 The Union submit that Schedule 5 has application.
78 Paragraph [17] of Schedule 4 and paragraph [10] of Schedule 5
79 See the comments of the Full Bench in Berri at Point (5) of [114]
80 Form F18
81 [2015] FWCA 7949
82 [2014] FCAFC 84]
83 [2018] FCAFC 146
84 See oral evidence of Ms Mihalopoulos
85 At clause (3)
86 The Australian Workers’ Union; “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU)-New South Wales Branch; Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia - Electrical, Energy and Services Division - New South Wales Divisional Branch v BlueScope Steel (AIS) Port Kembla[2015] FWCFB 1798 at [12]
87 See attachment PK1 to Exhibit 2
88 Sydney International Container Terminals Pty Limited (SICTL) Brisbane Container Terminals Pty Limited (BCT) Maritime Union of Australia Terminals Greenfields Enterprise Agreement 2013 [2013] FWCA 2714
89 Witness statement of Mr Keating at [11]
90 Even accepting the drafters were lay persons
91 Point (2) of [114]
92 [2005] HCA 10 at [67]
93 Written submissions of 10 March 2020 at [14]
94 Witness Statement of 10 March 2020 at [28]
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