Construction, Forestry, Maritime, Mining and Energy Union v Ta Ann Tasmania Pty Ltd
[2019] FWCFB 5300
•13 SEPTEMBER 2019
| [2019] FWCFB 5300 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.604 - Appeal of decisions
Construction, Forestry, Maritime, Mining and Energy Union
v
Ta Ann Tasmania Pty Ltd
(C2019/2603)
VICE PRESIDENT HATCHER | SYDNEY, 13 SEPTEMBER 2019 |
Appeal against decision [2019] FWC 2189 of Deputy President Barclay at Hobart on 2 April 2019 in matter number C2019/1497.
[1] The Construction, Forestry, Maritime, Mining and Energy Union (CFMMEU) has lodged an appeal against a decision issued by Deputy President Barclay on 2 April 2019 1 (Decision). The Decision was made in resolution of a dispute between the CFMMEU and Ta Ann Tasmania Pty Ltd (Ta Ann) pursuant to arbitral powers conferred upon the Commission by the dispute settlement procedure in clause 48 of the Ta Ann Tasmania and CFMEU Enterprise Agreement 20172 (Agreement). The dispute concerned whether Ta Ann was entitled under the Agreement to stand down without pay employees at its timber mill in the Huon Valley in Tasmania following a bushfire which caused extensive damage to the mill. There was also a related issue concerning whether, in the circumstances, Ta Ann was required to make the employees redundant and pay them redundancy entitlements under the Agreement, but for reasons which will be explained that issue is now moot. The Deputy President determined that clause 42 of the Agreement authorised the stand down without pay. The CFMMEU contends in its appeal that the Deputy President erred in so deciding in that he proceeded upon an incorrect construction of clause 42.
[2] There was a dispute between the parties as to whether the CFMMEU required permission to appeal. Section 604(1) of the Fair Work Act 2009 (FW Act) provides that a person may appeal a decision made by the Commission only with the permission of the Commission. However because s 739(4) of the FW Act authorises the Commission to arbitrate a dispute in accordance with a dispute resolution term in (relevantly) an enterprise agreement, such an agreement may confer an independent right of appeal to a Full Bench of the Commission, in which case the requirement for permission to appeal in s 604(1) will not be applicable. 3 The CFMMEU submitted that it did not require permission to appeal in this matter because clause 48.11 of the Agreement, which provides “The decision of Fair Work Commission in an arbitration under this procedure may be appealed to a Full Bench of Fair Work Commission”, conferred upon it a right to appeal the Decision. This was disputed by Ta Ann, which submitted that the provision only contemplated that the appeal mechanism in s 604 of the FW Act may be utilised. We do not consider it necessary to determine to finality this issue because, if permission to appeal is necessary, we would grant it. The Decision concerns the pay entitlements of employees covered by the Agreement and deals with a contestable issue of interpretation, and that is sufficient in our view to justify the grant of permission to appeal.
[3] The relevant and non-contested facts underlying the dispute were set out in the Decision as follows:
“A. On 22 January 2019, employees were stood down because of a bushfire threat to Ta Ann’s Huon Site (Site).
B. During this time, a bushfire passed through the Site which resulted in damage to the mill and essential machinery, including:
i. damage to the log and billet processing line, waste line and waste fuelshed and all boiler facilities; and
ii. potential structural and lathe impacts.
C. On 19 February 2019, Ta Ann was notified by Tasmania Fire Service that the threat of bushfire to the Site had ceased.
D. Although the threat of bushfire had passed, the damage to Ta Ann’s machinery at the Site as described in paragraph B above was such that the employees could not be usefully employed.
E. Ta Ann has attempted to mitigate the employment situation by ceasing to use labour-hire, relocating some employees to its Smithton Mill on a temporary fly in-fly out basis and is continuing to explore similar options. A few employees are utilised at the Site to assist with clean-up operations and patrolling.
F. Ta Ann continued to pay its employees initially stood down because of the bushfire up until 24 February 2019.
G. Ta Ann made an additional ex-gratia payment until 3 March 2019 to mitigate the effect of the stand down on its employees (it seems the ex gratia payment was made by way of an additional weeks pay after the union became involved).
H. Ta Ann employees are currently stood down without pay until, at this stage, 9 April 2019, when a Board meeting will be held to determine the future of the Mill at Huon.
I. Ta Ann is reliant on expert reports relating to the damage to its specialised machinery, considering log supply options, potential government assistance, insurance considerations and a range of other matters in order to determine the future of the Mill.”
[4] In the appeal the CFMMEU contended, without contradiction from Ta Ann, that employees at the Huon Valley mill were stood down without pay from 8 March 2019. That remained the position at the time the Decision was issued on 2 April 2019. However, as we were informed at the appeal hearing, the employees were made redundant by Ta Ann effective from 15 April 2019, so that part of the Decision concerning the CFMMEU’s contention that Ta Ann was obliged to make the employees redundant, and the CFMMEU’s challenge in the appeal to that part of the Decision, has been overtaken by events. The CFMMEU’s sole remaining ground of appeal is that “the Deputy President erred in his construction of clause 42 of the Agreement”. At stake is whether the former employees at the Huon Valley Mill were entitled under the Agreement to be paid for the period from 8 March to 15 April 2019.
[5] Clause 42 of the Agreement provides:
42. Stand Down of Employees
42.1 The Employer may deduct payment for any full day the employee cannot be usefully employed because of any strike or because of any breakdown of machinery or because of any other stoppage of work for any reasonable cause subject to the following provisions:
42.2 The onus of proving reasonableness of the causes shall be on the Employer
42.3 Where a stand down continues beyond one week, the employee may terminate the employment without notice or forfeiture of a week’s wages.
42.4 The employer advises the union office of the commencement time and possible duration of the stand down.
42.5 Subject to any employee being ready, willing and available to work, nothing in this clause shall authorize deduction of payment for any time lost because the employee is prevented from working on account of rain, hail, snow, flood or bushfire or on account of a shortage of logs when such shortage is due to rain, hail, snow, flood or bushfire.
[6] In the Decision, the Deputy President gave the following general characterisation of the effect of clause 42 and the question to be determined:
“[9] Clause 42 provides that, in effect, an employee may be stood down without pay where they cannot usefully be employed because of any strike or because of any breakdown of machinery or because of any other stoppage of work for any reasonable cause. However this prima facie position is subject to clause 42.5 whereby clause 42.1 does not authorise a stand down without pay if the employee is prevented from working on account of rain, hail, snow, flood or bushfire or on account of a shortage of logs when such shortage is due to rain, hail, snow, flood or bushfire.
[10] I am required to determine whether, in this case subclause 42.5 applies such that the stood down employees are entitled to be paid while the mill is closed. That is, are the employees stood down on account of bushfire or are they stood down because of breakdown of machinery.”
[7] The Deputy President rejected the proposition that the determination of the dispute required the exercise of a discretion based on considerations of fairness, but said rather that it involved the question of construction which he had identified. He then answered that question in the following way:
“[26] Whilst I do not necessarily agree that the very old Latin maxim upon which the Respondent relies applies, I agree with the Respondent that the words “rain, hail, snow, flood or bushfire” are a class of events of a transient nature. In my view the parties objectively agreed that there would be an exception to the rule that stand downs were unpaid where the stand down was caused by a weather or similar event of short duration. That is, where there were circumstances which prevented the employees from working because of more extreme weather events they would nevertheless be paid until the event had dissipated.
[27] It is not without significance that shortage of logs caused by these events is included in the exclusion to clause 42.1. A shortage of logs may result in the mill not operating after the initial event (fire flood etc.) has passed. The fact that that circumstance was accounted for suggests the events described (rain, hail, snow etc.) were regarded by the parties to be of a transient nature applying only while water, hail snow and the like lay on the ground and prevented work. If the knock on effect of the event (difficulty in obtaining logs) had not been provided for then the workers would not, under clause 42.5 have been paid while they waited for logs. The parties directed their minds to at least one situation where the employees were prevented from working once the described events had ceased. This supports the construction placed on the clause by the respondent: that the exclusion applies while the weather event is affecting the workplace and not afterwards.
[28] In my opinion therefore as a matter of construction the exclusion provided in clause 42.5 applies while the immediate effects of the bushfire are present. That is, while the fire prevents access to the work place and until it is safe to return. This conclusion is consistent with the meaning of bushfire identified by the Respondent, and is consistent with the type of events described in clause 42.5. It is also consistent with the fact an event which occurs after the fire or flood ceases was provided for in the exclusion: the delay in obtaining logs.
[29] Accordingly I find that the current stand down is not because of the bushfire. Rather it is because machinery has broken down. While it is correct to say the machinery was damaged by the fire, the fire is no longer the operative reason for the closure of the mill. It is that the machinery has broken down. The situation has evolved since the fire was extinguished. Had the machinery not been damaged then the workers would have been back at work. I find that the cause of the current inability to work is no longer the bushfire but the damaged machinery.
[30] I conclude therefore that clause 42.5 of the Agreement is no longer operative and that clause 42.1 is applicable. Accordingly the employees who are stood down are not entitled to be paid during the stand down.”
[8] The CFMMEU submitted that:
• clause 42 was derived from provisions in the Ta Ann Union Collective Agreement (Construction, Forestry, Mining and Energy Union (Forestry and Furnishing Products Division)) 2007 (2007 Agreement), with the 2007 Agreement incorporating equivalent terms from the Timber and Allied Industries Award 1999;
• the award clause applied only to bush employees and rural sawmills who were as a matter of common sense more directly affected by weather events and natural disasters, and its purpose was to mitigate the higher than usual risk that employees faced of being prevented from performing work for reasons outside their employer’s control;
• the Deputy President erred by postulating the question of construction as one involving a choice of causation between a breakdown of machinery on the one hand and bushfire on the other;
• rather, clause 42.5 operates to require employees to be paid in circumstances where clause 42.1 would otherwise permit Ta Ann to stand them down without pay;
• because clause 42.5 involves an exception to the ordinary right and entitlement of employees to be paid if they are ready to work, it should be read down in the event of any ambiguity;
• the purpose of clause 42.5 is to mitigate the risk faced by Ta Ann’s employees, who work in the fire-prone Huon Valley, of being prevented from working by weather events and natural disasters by preserving their right to be paid;
• there was no textual support for the conclusion that the expression “on account of” in clause 42.5 required a direct causal connection to the weather event and excluded its consequences;
• clause 42.5 was not limited to prevention of attendance at work, and an employee might be prevented from working because they were unable to access the site, the machinery they used was inoperative or the employer refused to provide them with work;
• the test for causation under clause 42.5 should be the “but for” test;
• the named weather events are inseparable from their effects, so that for example rain itself does not prevent an employee from attending for work, but its effects do;
• “on account of” imports an element of causation, and it was inherently insensible to say that employees who had been stood down because bushfire had destroyed the machinery they worked on had not been stood down because of bushfire;
• the reference in clause 42.5 to the supply of logs being disrupted has regard to circumstances where the employee’s site was not affected by the weather event, but the supply chain has been;
• clause 42.5 requires employees to be paid where, firstly, they are ready, able and available to work, but are prevented from doing so, secondly, the employer would otherwise be entitled under clause 42.1 not to pay them and, thirdly, that the reason for the obstruction arises from the named weather events; and
• the above three conditions were satisfied in this case and therefore the exception in clause 42.5 was enlivened.
[9] Ta Ann submitted that the interpretation preferred by the Deputy President was correct for the reasons stated in the Decision.
Consideration
[10] Clause 42.5 must be interpreted in the context of clause 42 as a whole. Broadly speaking, the clause is structured such that clause 42.1 permits the deduction of an employee’s wages by Ta Ann in certain prescribed circumstances, but clause 42.5 prohibits any deduction of payment in other prescribed circumstances. The words “…subject to the following provisions” in clause 42.1 and “Subject to…” and “…nothing in this clause shall authorise deduction…” in clause 42.5 indicate an intention that clause 42.5 override the effect of clause 42.1, so that a deduction of payment is prohibited in respect of circumstances which fall within clause 42.5 even if such circumstances also fall within clause 42.1.
[11] Although clause 42.1 in express terms operates simply by reference to the employer’s right to “deduct payment”, read in the context of the clause as a whole it is apparent that it is concerned with the standing down of employees. The clause is entitled “Stand Down of Employees”, clause 42.3 refers to the position applicable where the stand down continues for more than a week, and clause 42.4 requires Ta Ann to notify the “union office” of the commencement time and possible duration of the stand down. Clauses 42.3 and 42.4 must be understood as operating in conjunction with clause 42.1, since clause 42.1 is also “subject to” those provisions, and confirm that the deduction of payment authorised by clause 42.1 is one that occurs in the context of a stand down.
[12] “Stand down” is a term with a well-understood industrial meaning. In Amalgamated Engineering Union v Metal Trades Employers Association, 4O’Mara J of the Commonwealth Court of Conciliation and Arbitration said:
“The expression ‘stand down’ is ordinarily understood as placing an employee in a position in which for the time being his rights and duties as an employee and the rights and duties of the employer in relation to him are suspended.” 5
[13] However a critical component of a suspension of employment in the form of a stand down is that work cannot usefully be performed by the employee for reasons beyond the control of the employer. In the Federal Court Full Court decision in Coal & Allied Mining Services Pty Ltd v MacPherson, 6 Buchanan J characterised a stand down in the following way:
“…it is an essential ingredient of a stand down, as commonly understood and as permitted by s 691A [of the Workplace Relations Act 1996] (or a provision in a contract of employment or industrial instrument to similar effect) that it is a unilateral decision taken by an employer to withhold work and payment even when an employee is prepared to perform all normal duties as directed. The unavailability of work to offer, for reasons beyond the control of an employer, is also important and distinguishes a stand down from a suspension but it is not, without the additional element I have identified, sufficient to distinguish a stand down (which is not available at common law) from ‘no work as directed, no pay’ (which is permitted at common law).”
[14] At common law, the employer has no right to suspend the employee without pay in circumstances where the employee cannot usefully be employed unless the contract of employment specifically provides otherwise. Stand down clauses were inserted in awards from the earliest days of industrial arbitration in Australia to provide employers with a lawful basis to suspend without pay or “stand down” employees in circumstances where there was no useful work for them to perform for reasons beyond the control of the employer.
[15] Clause 42.1, in summary, authorises stand downs which meet the following criteria:
• the stand down must be for a full day during which the employee cannot usefully be employed;
• it must be “because of” (1) any strike, (2) any breakdown of machinery or (3) any other stoppage of work for any reasonable cause;
• in relation to the third category above, the employer must if necessary prove the reasonableness of the cause(s); and
• the employer must have advised the “union office” of the commencement time and possible duration of the stand down.
[16] As we will shortly explain, the historical context indicates that a “reasonable cause” for the purposes of the second criterion above is one for which the employer cannot reasonably be held responsible. In Vehicle Builders Employees’ Federation of Australia v Ford Motor Co. of Australia Pty Ltd, 7 it was held that, under a similarly worded stand down provision in a federal award, an employer was only reasonably responsible for a stoppage of work if it were “the natural and probable consequence of his acts”.8 Thus the “other” stoppages of work referred to may be regarded as eiusdem generis with strikes and breakdowns of machinery, all constituting stoppages of work for which the employer cannot reasonably be held responsible. The causal connection connoted by the words “because of” must therefore be between a stoppage of work which falls within the requisite description and the fact that the employees in question cannot usefully be employed. In this case, it was not in contest that the relevant employees could not usefully be employed from 8 March 2019 until as it turned out, 15 May 2019, because of a breakdown in machinery for which Ta Ann was not reasonably responsible. It may be queried whether “breakdown in machinery” is an apt phrase to describe machinery that is damaged and rendered inoperable by fire, but this is of no moment since there could be no doubt that alternatively there was a stoppage of work for which the employer could not reasonably be held responsible. The question to be determined is whether clause 42.5 in the circumstances of this case prohibited any deduction of payment from the employees notwithstanding the operation of clause 42.1.
[17] The prohibition in clause 42.5 against deduction of payment operates where the following criteria are satisfied:
(1) there is time lost because the employee is “prevented from working”; and
(2) this is “on account of” either rain, hail, snow, flood or bushfire OR a shortage of logs due to rain, hail, snow, flood or bushfire.
[18] In respect of the first criterion, there is a noticeable difference in terminology as compared to clause 42.1. Clause 42.1 is concerned with where the employee “cannot usefully be employed”, which is a matter assessed from the perspective of the employer. 9 By contrast, the reference in clause 42.5 refers to where the employee is “prevented from working”, which we consider bespeaks of circumstances operating directly upon the employee’s capacity to perform their work rather than necessarily the capacity of the employer to supply work.
[19] The second criterion requires that the prevention from working be “on account of” the matters identified. The ordinary meaning of “on account of” is “because of” or “by reason of”. 10 These are expressions connoting causation. Expressions of this nature when used in commercial contracts, particularly insurance contracts, are ordinarily read as referring to the proximate cause or the direct cause, and not to more remote consequential effects. For example, in Australian Casualty Co. Ltd. v Frederico,11Gibbs CJ said: “…the words ‘caused by an accident’ naturally refer to the proximate or direct cause of the injury, and not to a cause of the cause, or to the mere occasion of the injury”.12 Such expressions have been distinguished from wider expressions concerned with consequential effects such as “arising out of”. For example, the High Court said in Dickinson v Motor Vehicle Insurance Trust:13
“The test posited by the words ‘arising out of’ is wider than that posited by the words ‘caused by’ and the former, although it involves some causal or consequential relationship between the use of the vehicle and the injuries, does not require the direct or proximate relationship which would be necessary to conclude that the injuries were caused by the use of the vehicle.” 14
[20] The proximate or direct cause of an event excludes what is indirect, and refers to the cause which is dominant, proximate in efficiency, and the real effective cause. 15
[21] A different approach to causation is taken in the law of negligence, but that is not concerned with the interpretation of expressions of causation found in legal instruments and is therefore of lesser relevance to our interpretational task here. In any event, in that context the “but for” test of causation urged by the CFMMEU has been rejected, at least as a definitive test, in favour of an approach whereby causation is treated as a question of facts to be answered by reference to common sense and experience. 16
[22] That the expression “on account of” in clause 42.5 is concerned with the proximate and direct cause of the relevant employees being prevented from working is, as the Deputy President reasoned, supported by the fact that the identified causes in the provision separately include “a shortage of logs due to rain, hail, snow, flood or bushfire”. These words would be superfluous if “on account of rain, hail, snow, flood or bushfire” was to be read as encompassing the consequential effects of rain, hail, snow flood and bushfire as well any incapacity to work on the part of employees which they directly caused. Conversely, if “on account of” is read as referring to the direct cause, the inclusion of these additional words has work to do because they concern a situation whereby employees are prevented from working at a timber mill because of a lack of logs to work with which would not be encompassed by the words “on account of rain, hail, snow, flood or bushfire”.
[23] For these reasons, we consider that the textually correct interpretation of clause 42.5 is that the prohibition upon deduction of payment applies where employees are prevented from working and the proximate and direct cause of this is either “rain, hail, snow, flood or bushfire” or “a shortage of logs due to rain, hail, snow, flood or bushfire”.
[24] The CFMMEU is correct in submitting that the relevant elements of clause 42 of the Agreement may be traced back to stand down provisions in federal awards applying to the timber industry. We accept that the history and purpose of those provisions assist in ascertaining the meaning of clause 42, since they constitute objective background facts relevant to the making of the Agreement. However in this case the history goes back much further than adverted to in the CFMMEU’s submissions, and is demonstrative of a historical purpose in the instrumental ancestry of the Agreement that is contrary to the position contended for by the CFMMEU. Rather, it confirms the textual interpretation which we prefer.
[25] Clause 42.1 of the Agreement finds its progenitor in clause 41(d) of the award for timber workers made by the Court of Conciliation and Arbitration (Deputy President Webb) in 1923. 17 The context in which Webb DP introduced this provision requires some explanation. In 1920 the Court (Higgins J, President) made the first federal award to cover timber workers.18 As part of this award, weekly employment was introduced to the timber industry for the first time; previously, all timber workers were engaged on a purely hourly basis. Higgins J’s reasoning for the introduction of weekly employment included the following (emphasis added):
“The claim for weekly engagement is a claim to which the union attaches great importance on many grounds. The claim is for a weekly rate, instead of an hourly, for about 127 varieties of occupation in this industry. It does not apply to the case of pieceworkers, or to the case of men loading or unloading timber which is carried on vessels or railway trucks—men whose work is casual, analogous to that of wharf labourers. Hitherto the practice has been in all the States (I think), to pay hourly nates to nearly all the timber employees—to pay the men nothing for hours when for any cause, they do not actually work—even when their work is stopped for causes out of their control. For the hours when his work is stopped by shortage of logs, or by breakdown of machinery, or by bad weather, or by a recognised holiday, the man gets no pay. This is a most unsatisfactory position, especially in the case of men who are employed in the same undertaking month after month, often year after year. Wherever it is possible, a weekly engagement is far better than a daily or an hourly. It secures steadier employees; and it gives to them some certainty as to their income for at least a week. It relieves the employer of the necessity of paying higher rates per hour, based on unforeseen and incalculable contingencies.” 19
[26] The award made by Higgins J therefore required, as an incident of the introduction of weekly employment, that the employer now pay employees for time not worked during ordinary hours as a result of, among other things, a “shortage of logs, or by breakdown of machinery, or by bad weather, or by a recognised holiday.” The context in which Higgins J discussed these matters suggests that the problem he identified and intended to rectify was one where employees were not paid where work stopped as a direct result of the occurrence of these matters.
[27] In his 1923 decision, Webb DP reviewed what Higgins J had described as the “experiment” of weekly employment in the timber industry, and identified two adjustments which were required. The first was explained in the following terms (emphasis added):
“It is now some years since the Court first decided to grant weekly employment in industry; this policy is now generally adhered to in its decisions. But in each case the incidents of weekly employment have been modified, and in the evolution of its work it has been generally recognised that in industry it has been necessary to make certain safeguards in awards of the Court. The ordinary safeguards will be provided for in this award in respect of work done in towns and cities. With regard to these safeguards, they will make little difference in the present terms of employment. It is, I think, just that an employer should be protected from loss consequent on strikes and matters over which he has no control.” 20
[28] The provision included in the new award made by the Deputy President to effect this was (emphasis added):
(d) The employment to be terminated only by a week’s notice on either side, and such notice may be given at any time during any week. This shall not affect the right of the employer to dismiss any employee without notice for malingering, inefficiency, neglect of duty or misconduct and in such cases wages will be paid up to the time of dismissal only or to deduct payment for any day the employee cannot usefully be employed because of any strike of the said union or any other union or through any breakdown of machinery or any stoppage of work for any cause the employer cannot be held responsible for. 21
[29] Secondly, Webb DP also dealt with the issue of whether, under the weekly employment model, employers should be required to pay employees who were declined to work because of rain. In this respect his Honour said (emphasis added):
“The conditions in the bush and at bush mills, however, present a very difficult problem. Mr. Justice Higgins stated that when he awarded a weekly rate for bush conditions he did it only as an experiment. The evidence called by the employers and the knowledge which I have gained of the industry convince me that the weekly wage could only be continued in the bush under further restrictions… If a shower of rain comes and employees decide to stay in their huts, work for the day is suspended, however unjust and perverse such decision may be, and the employer has to foot the bill. I do not see how industry can be carried on under such conditions. It is not surprising to find that a large number of applications to vary the award with regard to this provision have been made on behalf of employers who own bush saw-mills. I have decided to alter the conditions of employment to provide that employees in the bush and at bush saw-mills are to be paid for those days when they are ready and willing to work and perform such duties as the employer requires them to perform. This will result in loss of time in the bush, and such loss of time must be considered when fixing the basic wage.” 22
[30] In other words, employees were not to be paid when rain (and presumably like phenomena) caused them not to attend for work, and this was to be taken into account in the setting of their weekly wages. The above passage is evidently referring to a failure to attend for work directly due to the occurrence of rain. The provision awarded to effect the change which was identified as necessary was as follows (and immediately preceded the provision concerning deduction from wages):
(c) Any employee not attending for duty will lose his pay for the actual time lost unless he produces or forwards within 24 hours of the commencement of such absence evidence satisfactory to the employer or to the Board of Reference that his non-attendance was due to a personal accident arising out of and in the course of his employment or to personal ill-health necessitating such absence.
[31] The clause concerning deductions from wages placed into the award for timber workers in 1923 was in fact one that, in the same or similar terms, was common amongst awards of the time. A provision in virtually identical terms in the award which subsequently became known as the Metal Industry Award was considered by the Court of Conciliation and Arbitration (Powers J, President) in 1922 in Federated Engine Drivers and Firemen’s Association of Australasia v Albany Bell Limited 23in the circumstances of a dispute arising from the employer’s stoppage of a day’s pay to employees who could not usefully be employed at a dockyard because of the occurrence of wet weather. Powers J determined the dispute as follows (emphasis added):
“Both parties have agreed to abide by any decision I come to as to whether the member as a weekly employee should be paid the day’s pay in the circumstances.
If the submission means that they agree that the amount will be paid if I hold that the members are legally entitled to the day’s pay on a legal interpretation of the award as it stands at present, I would have to say that as the employer cannot reasonably be held responsible for a stoppage of work caused by rain that the members are not legally entitled to recover the amount. At the same time I have to so interpret it because of the omission of the word ‘such’ or ‘similar’ before the word ‘stoppage’ which words have been inserted in other awards containing the same clause.
I intended by the award to secure to the workers a weekly wage to cover wet days or parts of days when no work was available for want of orders, &c., or for any cause except through stoppages by strikes or breakdowns or similar causes, and I am prepared at the earliest opportunity to vary the award to carry out that intention.
In the Mining Companies’ award one respondent took advantage of the defect in the clause and I amended it in their case, on an application to vary, by inserting the word ‘such’ before the word ‘stoppage’, and I added ‘not including stoppages for want of orders’.
I hold therefore—
1. Legally the member is not entitled to the day;
2. The intention of the Court in granting a weekly wage was to include stoppages through rain; and
3. The Court will, if applied for, vary the award to secure the members full weekly pay in cases similar to the one referred to and in cases where the stoppage is through want of orders.
Employers complain of employees taking advantage of the weekly clause, and 1 have tried to protect employers from frauds; but if employers take advantage of the clause I will have to consider whether I will not limit the exceptions to strikes and complete breakdowns of machinery.”
[32] Thus, in the days prior to the era of purposive interpretation, the outcome in the above decision which prevailed was contrary to the known intention of the maker of the relevant award. However the contemplated variation to the award to give effect to the original intention was later made, as explained in a decision of Powers J issued in 1923 (footnote omitted):
“The material words in the sub-clause are: —
to deduct payment for any day the employee cannot be usefully employed because of any breakdown of machinery or any stoppage of work by any such cause which the employer cannot reasonably prevent.
The claimant organization claims that weekly employees are entitled to days the employers do not provide work for them even if the days on which no work is provided for them are State Public Holidays in any State.
The respondents in question contend that the employers are excused from payment for such days on the ground that the members cannot be usefully employed because of a cause ‘which the employer cannot reasonably prevent’ - that is the declaration of a day as a State holiday.
In a previous case before the Court under another award, namely in the Engine Drivers’ case No. 14 of 1921 on the 20th December, 1922, the employer refused to pay for a day on which the rain was so heavy that the members could not be usefully employed. In that case he succeeded because the clause omitted the word ‘such,’ and I held that it meant for ‘any cause’ the employer could not prevent.
The clause in question was later on varied by inserting the word ‘such’ so as to secure to the employee on weekly wages a full week’s wage whether work was available or not.
In this case I am in reality asked by the respondents to interpret the clause as if the word ‘such’ was not in it.
I hold that the word ‘such’ was intended to and does refer to similar causes to that mentioned in the preceding words of the clause, and the clause cannot fairly be read as if the word ‘such’ had not been inserted.
For the reasons stated I hold that if any employer does not employ a member who is willing and ready to work at ordinary rates on a State holiday not an award holiday it is not a cause included in the special causes mentioned in the clause or in the words ‘by any such cause.’
The members on a weekly wage are therefore entitled to payment for days not award holidays on which they are not employed and are willing and ready to work.”
[33] The meaning of the altered provision in the relevant award was in 1924 considered by the High Court in Pickard v John Heine & Sons Pty Ltd. 24 In that case, the employer declined to pay an employee covered by the award his pay on Anzac Day on the basis that he could not usefully be employed without the assistance of other workmen on the site who were covered by a State award, had an entitlement for double time on the day, and who were accordingly not engaged because it was uneconomic to do so. The Court determined that the employer was obliged to pay the employee in the circumstances described. Isaacs ACJ interpreted the provision in the following way:
“Then, construing sub-clause (h) as it stands, I do not agree with the Magistrate's view that the word ‘such’ must be judicially eliminated. Nor can I agree with the argument addressed to us that the word ‘which’ should be read as ‘as’ so as to leave the ‘cause’ absolutely indeterminate in nature, and applicable as a valid reason for deducting a day's pay if only the employer can show it is one he could not ‘reasonably prevent.’ The latitude that would be attributable to ‘reasonably prevent’ would not be measurable. No weekly employee would know where he stood in such a case. If outside circumstances, utterly unconnected with the immediate working operations, such as economic reasons, trade competition, quarrels with customers, and so on, can be introduced to test the reasonableness of prevention or non-prevention, there is little or nothing of security or definiteness left to the employee. Indeed, if the interpretation suggested be correct, the reference to "breakdown of machinery" is quite superfluous. Of course a breakdown of machinery is properly regarded in itself as a valid cause, for primarily it denotes that the working apparatus itself is incapable, by reason of its own inherent inefficiency, of enabling operations to be carried on. But, if the words ‘any such cause’ are read as ‘any cause’ and if the word ‘which’ is read as ‘as,’ besides the cardinal sin of altering the language of a document there would be no necessity of inserting strikes or breakdown of machinery.
When the number and variety of respondents are regarded, including Government enterprises, shipping companies, engineering establishments, newspaper undertakings, and so on, the scope of the suggested clause would be so unmeasurably wide as to mean little but difficult litigation to employees if they wished to contest a deduction. First, I rely on the words themselves in their collocation. For clarity sake I segregate the provision thus:—‘This shall not affect the right of the management ... to deduct payment for any day the employee cannot be usefully employed—(1) because of any strike by the union or any other union or (2) through (a) any breakdown of machinery or (b) any stoppage of work by any such cause which the employer cannot reasonably prevent.’ It is the composite expression ‘stoppage-of-work-by-any-such-cause’ that is the antecedent of ‘which.’ The word ‘such’ relates to breakdown of machinery. Any ‘such cause’ means, in my opinion, any cause similar to or of the same nature as the breakdown of machinery. A cause is of that nature, in my opinion, if it is so connected with the working of the machinery as to prevent it operating in a manner that makes the employment of the men useful. One might imagine as ‘such’ causes the deprivation of electric current or coal or water, or the desirability of replacing old machinery by new, or putting on protection guards, or overhauling a machine to prevent danger, where signs of possible danger were observed. If these, and others of a like nature which might be mentioned, caused a stoppage of work, because the machinery could not be properly operated, then the range of consideration as to whether the employer could ‘reasonably prevent’ the stoppage would be reduced to understandable limits.” 25
[34] Gavan Duffy J took a similar approach. 26 Starke J however read the award provision, which he described as “obscure and ungrammatical”, as if the word “such” had not been added so that it encompassed “any stoppage of work by any cause such as the employer cannot reasonably prevent.”27 Nonetheless his Honour reached the same outcome on the basis that the stoppage of work was brought about by the employer’s own action in declining to engage the assistant workmen and pay them on holiday rates.
[35] The timber workers award provision made in 1923 by Webb DP did not include the addition of the word “such” as had occurred in the metal industry award following the 1922 decision of Powers J in 1922 in FEDFA v Albany Bell Limited. Accordingly it must be understood to have the meaning assigned to the original metal industry clause by Powers J in that decision, namely that it authorised deduction of payment not only in the case of strikes and breakdowns of machinery and the like, but also for any other stoppage for any other cause for which the employer could not be reasonably responsible, including where work could not be usefully performed because of the occurrence of wet weather. This is consistent with the modification of the award by Webb DP to not require payment of wages when employees decided not to work because of rain, as earlier set out.
[36] In the new award for timber workers made by the Court of Conciliation and Arbitration (Lukin J) in 1929, 28 the stand down provision was reformulated (by consent29) into a stand-alone subclause of the provision of the award concerned with weekly employment, but its effect did not change as compared to the previous award. The new provision was as follows:
(6) The employer may deduct payment for any day the employee cannot be usefully employed because of any strike by or participation in any strike by the union, by any branch of the union, or by any members or member of the union employed by the employer or because of any strike by or participation in any strike by any other union, branch of any other union or members or member of any other union employed by the employer, or because of any breakdown of machinery, or because of any other stoppage of work for any other cause for which the employer cannot be held responsible. 30
[37] In the next timber workers award made by the Court (Dethbridge CJ) in 1937 31, the following sentence was added to the stand down clause, which was otherwise in the same terms: “The onus of proving reasonableness of the cause shall be on the employers.”32 Dethbridge CJ simply said about this:
“As to stoppage of work the suggestion of the union as to onus of proof is accepted and included in sub-clause (6).” 33
[38] It may be noted that this clause is equivalent in effect to clause 42.2 of the Agreement.
[39] The clause was simplified in the award made by the Court (O’Mara J) in 1941 34 as follows:
(6) The employer may deduct payment for any day the employee cannot be usefully employed because of any strike or because of any breakdown of machinery, or because of any other stoppage of work for any reasonable cause. The onus of proving reasonableness of the cause shall be on the employer. 35
[40] It may be noted that at this point in the above clause the words “any reasonable cause” have replaced the previous words “any other cause for which the employer cannot be held responsible”. However there is no indication that the new formulation was intended to change the meaning of the clause in this respect, and we will proceed on the basis that the meaning was the same, or at least encompassed the meaning of the previous provision.
[41] The clause was the subject of reconsideration by the Court (O’Mara J) in 1945 36 in response to a claim by the Timber Workers Union that it be modified to add: “Provided that no deduction from pay shall he made by any employer because an employee is prevented by rain, hail or snow from working.” O’Mara J determined to grant the claim, saying (footnotes omitted):
“Under the award which was made by Higgins J on 21st May, 1920 deductions from the wages of employees working under a weekly engagement were not allowed in respect of time lost on account of rain, hail or snow. On 7th May, 1923 in making a new award Webb DP, discontinued this provision but loaded the wage to meet the contingency of time lost on account of wet weather. This loading was removed by Lukin J on 23rd January, 1929 for reasons which if they were sound then are no longer applicable.
Rain, hail or snow may result in employees in this industry losing time for which they are not at present entitled to payment. In the case of the bush workers the weather prevents work from being carried out and this in turn may result in a mill becoming short of logs and being unable to carry on. The Court ordinarily includes in its awards provisions to safeguard an employee in respect of the loss of opportunity of earning on account of wet weather and in my opinion it is anomalous that the rates prescribed by this award have not been assessed having regard to that principle. I also consider that since the reasons which actuated the Court in discontinuing the loading no longer operate it is anomalous that the present rates should not be altered.
. . .
I have considered prescribing casual rates in lieu of regulating the matter on the lines of the Union’s claim but I am not satisfied that such a scheme is proper in the case of employees who must be left to work without supervision. Upon the evidence it appears that with proper management it should be practicable to keep logs up to a mill so that little if any time would be lost on account of rain, hail or snow in the case of mill employees. As to bush workers they appear on the whole not to have been subject to deduction from wages for time lost and the variation which I am about to make is not likely to make any difference in fact in their case. If the variation is followed by imposition the case of workers who do not work under supervision the employers have the right to apply to the Court. Upon the evidence the variation should if anything reduce absenteeism as in the past the absence of any guarantee as to payment has resulted in employees remaining away from work on days on which after a threatening morning the weather has cleared and work has been possible.” 37
[42] The variation which was made by O’Mara J added the following to the deduction of payment clause:
Subject to the employee being ready, willing and available to work nothing in this clause shall authorize deduction of payment for any time lost because the employee is prevented from working on account of rain, hail or snow or on account of a shortage of logs when such shortage is due to rain, hail or snow. 38
[43] The above award clause was clearly the ultimate progenitor of clause 42.5 of the 2018 Agreement. Its purpose, as explained by O’Mara J and understood in the earlier historical context we have set out, is clear. It was intended to prevent any deduction from payment for bush workers - that is, timber harvesters working in the bush who were responsible for the supply of logs to mills - where they were prevented from working because of the occurrence of rain, hail or snow, and it also prevented any deduction from payment for mill workers where the downstream effect of the bush workers not being able to work was that work could not be performed by them as well because of an inadequate supply of logs. The clause was not intended to have any wider application to mill workers or to deal more broadly with all the possible indirect consequential effects of rain, hail or snow, and was certainly not intended to narrow the capacity of the employer to deduct payment for a breakdown of machinery or like event.
[44] The consolidated award made by the Court (Conciliation Commissioner Stewart) in 1947, by consent, included a modified version of the clause (clause 16(e)) which allowed for an employer and employees (by majority vote) to opt out of the new provision awarded by O’Mara J in 1945 by the payment of a loading in lieu thereof. The full provision was as follows:
(e) The employer may deduct payment for any day the employee cannot be usefully employed because of any strike or because of any breakdown of machinery, or because of any other stoppage of work for any reasonable cause. The onus of proving reasonableness of the cause shall be on the employer.
Subject to any employee in the bush and in bush saw-mills and in log sawmills outside the towns and cities named in Table “A” of clause 1a of this award being ready, willing and available to work, nothing in this clause shall authorize deduction of payment for any time lost because the employee is prevented from working on account of rain, hail or snow or on account of a shortage of logs when such shortage is due to rain, hail or snow.
Notwithstanding anything in this sub-clause, an employer may elect and, with the mutual consent of the majority of employees concerned, pay a general loading of 7s. 6d. per week to the rates of pay prescribed in this award as an alternative to the conditions set out herein in respect of pay for time lost through hail, rain or snow or on account of shortage of logs where such shortage is due to hail, rain or snow. An employer adopting such alternative at any one mill must obtain the consent of the Union in writing and must agree to continue such loading for at least twelve months from the date of obtaining the consent of the Union. In the event of the employees and/or the Union not consenting the employer may have the matter settled by a Board of Reference. 39
[45] This provision then remained substantially unchanged (apart from alterations to the amount of the loading) for a long period of time. It appeared as clause 16(f) in the Timber Industry Consolidated Award 1974. 40
[46] In 1987 the Timber Industry Consolidated Award 1987 was made by the Australia Conciliation and Arbitration Commission (Commissioner Merriman) by consent. 41 This contained a reformulated clause (clause 20(f)) in the following terms:
(f) The employer may deduct payment for any full day the employee cannot be usefully employed because of any strike or because of any breakdown of machinery or because of any other stoppage of work for any reasonable cause subject to the following provisions:
(i) The onus of proving reasonableness of the causes shall be on the employer.
(ii) Where a stand down continues beyond one week, the employee may terminate the employment without notice or forfeiture of a week's wages.
(iii) The employer advises the union office of the commencement time and possible duration of the stand down.
(iv) Subject to any employee in the bush and in bush sawmills and in log sawmills outside cities and towns being ready, willing and available to work, nothing in this clause shall authorise deduction of payment for any time lost because the employee is prevented from working on account of rain, hail, snow, flood or bushfire or on account of a shortage of logs when such shortage is due to rain, hail, snow, flood or bushfire.
[47] This provision closely resembles clause 42 of the Agreement. Subclauses (ii) and (iii) represent new provisions compared to the 1947 clause. Subclause (iv) was modified to include references to flood and bushfire, but apart from this the language and structure of the provision remained fundamentally the same, and there is nothing to indicate an intention to alter the meaning which may be ascribed to it arising from the 1945 decision of O’Mara J. The references to flood and bushfire have simply been “slotted in” to the existing linguistic formulation. It may also be noted that the capacity of the employer to adopt the alternative of deducting payment and paying a loading instead was removed.
[48] The provision was subsequently reproduced as clause 18 of the Timber and Allied Industries Award 1999 42 (1999 Award) under the heading “Stand Down of Employees”.
[49] In 2007, the Ta Ann Union Collective Agreement (Construction, Forestry, Mining and Energy Union (Forestry and Furnishing Products Division)) 2007 was made. This appears to have been the first enterprise-specific agreement entered into by Ta Ann. It had the same coverage as the Agreement. Clause 20 of this agreement provided:
20. Stand Down
This clause applies to the exclusion of clause 18 and (but not 18.1, 18.2. or 18.3) of Appendix 1 to this Agreement.
20.1 Notwithstanding anything elsewhere contained in this Agreement the employer shall have the right to deduct payment for any time an employee cannot usefully be employed because of any strike or breakdown in machinery or any stoppage of work by any cause for which the employer cannot reasonably be held responsible. Employees may request to have such a period of stand down paid as annual leave if they have an annual leave entitlement.
[50] Appendix 1 of the 2007 agreement contained the entire text of the 1999 Award, with some minor modifications. Clause 4.2 of the agreement provided that terms of the 1999 Award were incorporated at Appendix 1. Appendix 1 included the text of clause 18 of the 1999 Award. It is not entirely clear whether it was intended to incorporate clause 18.4 of the 1999 Award having regard to the (defectively drafted) underlined words at the commencement of clause 20, but if it was incorporated, it was incorporated with the same text and presumably therefore the same meaning.
[51] The following agreement was the Ta Ann Tasmania and CFMEU Collective Agreement 2011. At clause 46, it contained a provision in identical terms to the current clause 42 of the Agreement. Clause 42.5 in the 2011 agreement and in the current Agreement reproduce clause 18.4 of the 1999 Award, except that the words “in the bush and in bush sawmills” have been removed. This is explained by the fact that the agreements only covers employees at two mills operated by Ta Ann - the mill in the Huon Valley the subject of the dispute (referred to as the Geeveston site in the coverage provision in clause 3 of the Agreement) and another mill at Smithton in Tasmania – and does not apply to workers “in the bush” harvesting timber. The historical context we have described causes us to conclude that clause 42.5 was objectively intended to have the same meaning as the award provision from which it was derived. As explained above, the award provision was concerned with the proximate or direct causes of employees being prevented from working, and not with indirect consequential effects.
[52] For the period 8 March to 15 April 2019, the proximate or direct cause of employees being prevented from working at the Huon Valley mill was the fact that the machinery at the mill had been rendered inoperative. That was a circumstance which fell squarely within the terms of clause 42.1. The bushfire, which had ceased well before this time, was not the direct causes, but rather only the cause of the cause or the indirect cause. The employees were not prevented during this period from working “on account of” bushfire, and clause 42.5 was not applicable.
[53] For these reasons, we consider that the Decision of the Deputy President was correct. The appeal is dismissed.
VICE PRESIDENT
Appearances:
Y Bakri of Counsel with D Malbasa for the Construction, Forestry, Maritime, Mining and Energy UnionN Dobson and S Masters on behalf of Ta Ann Tasmania Pty Ltd
Hearing details:
2019.
Melbourne:
24 July.
Printed by authority of the Commonwealth Government Printer
<PR710851>
1 [2019] FWC 2189
2 AE426042
3 See e.g. Australian Manufacturing Workers’ Union v Silcar Pty Ltd [2011] FWAFB 2555, 208 IR 33 at [26]- [28]; Shop, Distributive and Allied Employees Association (Queensland Branch) Union of Employees v Woolworths Limited[2013] FWCFB 2814, 232 IR 255 at [22]; McWhirter v Endeavour Energy[2017] FWCFB 5955 at [22]- [23]
4 (1945) 55 CAR 307
5 Ibid at 310
6 [2010] FCAFC 83, 185 FCR 383, 270 ALR 414
7 (1962) 3 FLR 198
8 Ibid at 200
9 Townsend v General Motors-Holden’s Ltd [1983] FCA 204, 4 IR 358 at 367-370
10 Macquarie Online Dictionary
11 [1986] HCA 32, 160 CLR 513
12 Ibid at 521
13 [1987] HCA 49, 163 CLR 500
14 Ibid at 521
15 Lasermax Engineering Pty Limited v QBE Insurance (Australia) Limited [2005] NSWCA 66 at [43]-[44]
16 March v Stramare (E & MH) Pty Ltd [1991] HCA 12, 171 CLR 506
17 (1923) 18 CAR 325
18 (1920) 14 CAR 811
19 Ibid at 836
20 (1923) 18 CAR 325 at 343
21 Ibid at 408
22 Ibid at 343-344
23 (1922) 16 CAR 1248
24 [1924] HCA 38; 35 CLR 1
25 Ibid at 8-9
26 Ibid at 10-11
27 Ibid at 12
28 (1929) 27 CAR 577
29 Ibid at 628
30 Ibid at 645
31 (1937) 37 CAR 273
32 Ibid at 294
33 Ibid at 279
34 (1941) 46 CAR 20
35 Ibid at 42
36 (1945) 54 CAR 654
37 Ibid at 655
38 Ibid at 659
39 (1947) 59 CAR 1309 at 1330
40 (1974) 163 CAR 115 at 133
41 Print H0320, 18 December 1987
42 Print R4683, 13 May 1999
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