Construction, Forestry, Maritime, Mining and Energy Union v Ta Ann Tasmania Pty Ltd
[2019] FWC 2189
•2 APRIL 2019
| [2019] FWC 2189 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.739—Dispute resolution
Construction, Forestry, Maritime, Mining and Energy Union
v
Ta Ann Tasmania Pty Ltd
(C2019/1497)
DEPUTY PRESIDENT BARCLAY | HOBART, 2 APRIL 2019 |
Alleged dispute about any matters arising under the enterprise agreement and the NES;[s186(6)].
[1] The Applicant has made an application pursuant to s.739 of the Fair Work Act 2009 (the Act) to deal, pursuant to a Dispute Settlement Procedure (DSP), with a dispute relating to the standing down of a number of employees employed by the Respondent in southern Tasmania.
[2] The matter came on for conference on 13 March 2019 at which time the matter was unable to be resolved. Directions were made to enable the matter to be listed for hearing on 27 March 2019.
[3] The parties, in accordance with pre hearing directions filed Facts and Contentions and have agreed that the matter can be deal with on the papers.
Facts
[4] The relevant facts are set out in the Respondents Facts and Contentions (which are not disputed by the Applicant). I set them out:
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 fuel shed 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 gracia 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.
[1] There are 19 employees who are affected by the stand down. As noted the duration of the stand down is not known until a Board meeting of the respondent which it to occur on 9 April 2019.
The Dispute
[2] The Applicant relies on clause 42 of the Ta Ann Tasmania and CFMEU Enterprise Agreement 2017 (the Agreement) and submits that the employees who are currently stood down are entitled to continue to be paid at least until a decision on the future of the mill is made by the Respondent. Alternatively the Applicant says that the duties which the employees carry out are no longer required to be carried out by anyone (due to the fire) and that therefore the stood down employees are redundant and that I should order the Respondent pay redundancy entitlements calculated from 11 March 2019.
[3] The Respondent contends that clause 42 of the Agreement does not entitle the employees who are stood down to be paid further. The Respondent further submits that I should not make any other orders or recommendations as to redundancy because I am not empowered to do so given the characterisation of this dispute and the fact the Application is made pursuant to a DSP and not pursuant to s 526 of the Act relating to stand down under s 524.
Clause 42
[4] Clause 42 is in the following terms:
“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.”
[5] 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.
[6] 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.
The Parties Contentions
The Applicant
[7] The Applicant, in characterising the dispute, submits that this matter is to be determined by considerations of fairness and that resolving the dispute therefore involves the exercise of a discretion.
[8] The Applicant relies on Coal and Allied Operations Pty Ltd v. AIRC1 in support of the proposition that determining the dispute involves the exercise of a discretion. I do not regard that case as authority for the proposition advanced. Coal and Allied Operations was a case about the nature of an appeal under s 45 of the Workplace Relations Act 1996. It says nothing that I can see about disputes generally and that disputes require the exercise of a discretion. Indeed the paragraph to which I am referred (19) describes the nature of a discretion and how it may be exercised in the context of an appeal against the exercise of a discretion.
[9] I agree however that resolving a dispute may well involve the exercise of a discretion. However that will not always be the case. A pure question of construction for example does not involve the exercise of discretion. If, however the Applicant intended to submit that I may exercise a judgment as to an appropriate remedy, then within the bounds of the dispute and the DSP I agree.
[10] The Applicant does not identify any authority for the proposition that this matter is to be determined by considerations of fairness. However from reading the Applicants Facts and Contentions as a whole and the reliance of Stephen Ball v. Thomas Foods International Murray Bridge Pty Ltd2 I infer that the authority for the proposition is s 525(4) of the Act.
[11] Ball related to a dispute brought pursuant to s 526 of the Act. Therefore the Deputy President was bound to have regard to fairness. It was not a private arbitration brought pursuant to a DSP. While the case is useful for the treatment of the facts, and that it relates to a stand down caused by fire, I do not regard Ball as of great assistance as to the outcome of this case. I am bound by the provisions of a DSP. The DSP does not invoke considerations of fairness. In my view the case is not to be determined by any overriding requirement of fairness. Again however fairness my play a role when considering any remedies which may be available.
[12] The Applicant has also referred me to Schell v Ensign Australia Pty Ltd3 and SSX Services Pty Ltd v The AWU4. Both of these cases are cases brought under s 526 of the Act. As indicated above in relation to Ball, they are of little assistance given they involve the statutory right of stand down and the statutory regime as applied to those disputes. That regime does not apply to this case. This is a private arbitration pursuant to a DSP and is to be determined in accordance with the DSP. The statutory obligation to accord fairness and thus incorporating an overall discretionary factor does not apply to this dispute under this DSP.
[13] I note the DSP is contained in clause 48 of the Agreement. The DSP extends to any work related dispute (including of course as to the NES or about the Agreement). It simply provides that the dispute may be referred to the Fair Work Commission5 for resolution by conciliation or arbitration. It also provides that the Commission may exercise such powers in relation to conciliation and arbitration as are necessary to make the conciliation or arbitration effective including all the powers given to the Commission by the Act.6 There is otherwise no provisions relating to the way in which the Commission is to exercise its powers.
[14] In respect to the construction question identifies in paragraph 10 above, the Applicant relies on Berri7. I note the Respondent also relies on Berri. The Applicant then submits8:
“It is the Union’s submission that Clause 42.5 does not authorise deduction of payment when employees are stood down on account of bushfire. But for the bushfire, the workers would not have been stood down. The breakdown of machinery is because of the bushfire. The two cannot be decoupled. In accordance with the principles in Berri (above) the wording of the clause is plain and capable of only one meaning (that is, when workers are stood down due to bushfire they should be paid). An overly technical approach to interpretation of this clause should be avoided.”
[15] The Applicant does not otherwise address the construction of the words of clause 42 of the Agreement.
The Respondent
[16] The Respondent identifies a question which it submits I am required to answer as follows:
Isthe Respondent’s inability to usefully employ the employees covered by Ta Ann Tasmania and CFMEU Enterprise Agreement 2017 (Agreement) since 19 February 2019 because of a breakdown of machinery and not on account of bushfire?
[17] The Respondent submits that if the answer is “yes” it can stand down the employees without pay. If the answer is “no” then the employees are entitled to be paid. The Respondent submits that I cannot otherwise make any orders because fairness considerations are not applicable to the dispute (I agree with that proposition although as I have said such considerations might be applicable if I am considering whether the Applicant is entitled to any specific remedy beyond the answer to the construction question).
[18] In respect to the construction question the Respondent submits that (omitting footnotes)9:
13. “The interpretation of clauses 42.1 and 42.5 requires detailed consideration of the meaning of when a stoppage of work can be held to be ‘on account of’ ‘bushfire’.
14. It is well settled that the phrase ‘on account of’ means ‘because of’ or ‘by reason of’. Most recently, the Supreme Court of Victoria has discussed the meaning of ‘on account of’, commenting:
[95] Brennan and Deane JJ agreed with Gibbs CJ that the primary meaning of ‘on account of’ was ‘because of’. Brennan J also stated relevantly:
The primary meaning of the phrase ‘on account of’ is ‘because of’: Shorter Oxford Dictionary. Counsel for the respondent submitted that the statutory phrase means ‘in respect of’, but that phrase does not reflect the notion of causality which inheres in ‘on account of’. Giving ‘on account of’ its primary and natural meaning, the third element requires that the doer of the harassing act should do it because of the harassed person’s performance of his duties. This element relates to the state of mind of the doer of the act, namely, his motive.
[96] As O’Sullivan v Lunnon demonstrates, however, there is an essential element of causation in the phrase ‘on account of’. For action to be taken on account of a specific matter, there must be a causal link between the matter and the action.
15. The phrase ‘on account of’ is of different effect to the words ‘in relation to’ or ‘in respect of’. The expression “in relation to” has been determined to be of wide and general import which should not be read down without compelling reason. Similarly, the words “in respect of” have traditionally been construed as being expansive in nature and of broad meaning.
16. If it was intended for clause 42.5 to be of wide import, it would be appropriately drafted by use of words to the effect of ‘in relation to’ or ‘in respect of’. If the clause was drafted in this manner, it may be broad enough to capture the resultant effects of the bushfire and not just the bushfire itself.
17. ‘Bushfire’ is defined by the Collins English Dictionary to mean “an uncontrolled fire in the bush; a scrub or forest fire”.
18. Applying the plain and ordinary meaning of these words, it follows that the reason for the current stoppage of work must be because of an uncontrolled fire in the bush in order for clause 42.5 to be activated.
19. Whilst the bushfire remained active, this was clearly the case. This remained the case no later than when the Respondent received notification from Tasmania Fire Service that the bushfire threat had ceased.
20. In circumstances where there is no uncontrolled fire in the bush affecting the Site, this can no longer be the cause of any stoppage of work. Despite the bushfire having ceased, the Respondent remains in the unfortunate position where its employees are unable to be usefully employed due to damage to its machinery.
21. In Ball v Thomas Foods International Murray Bridge Pty Ltd, the Fair Work Commission determined that when machinery or equipment has been destroyed to a point of either disrepair or being beyond repair, it is classified as broken down6.
22. There is no dispute that the Respondent’s machinery is in a state of disrepair for the purpose of section 42.1. The Respondent’s position is that the reason for the stand down since 19 February 2019 is a breakdown of machinery.
23. The Respondent’s position is that there is no reason to depart from the ordinary meaning of the words in the Agreement.
24. In any event, the Respondent submits that principles of statutory interpretation identified by the courts assist to promote a narrow interpretation of the clause.
25. Specifically, the Commission should have regard to the principle of ‘copulatio verborum indicat acceptationem in eodem sensu’ meaning that the coupling of words together shows that they are to be understood in the same sense, or that where a word ‘stands with’ other words it ‘must mean something analogous to them”.
26. The word bushfire ‘stands with’ other words being rain, hail, snow and flood. The Collins English Dictionary defines those words to mean:
a) rain – “water that falls from the clouds in small drops”,
b) hail –”small balls of ice that fall like rain from the sky”;
c) snow – “a lot of soft white bits of frozen water that fall from the sky in cold weather”; and
d) flood – “a large amount of water covers an area which is usually dry”.
27. It is clear from these definitions, and the ordinary meaning of those words, that they relate to transient climatic events. The word ‘bushfire’ ought to be interpreted in the same sense.
28. The absence of a general expression such as ‘or other similar events’ (which would ordinarily invoke the ejusdem generis rule) is consistent with a narrow interpretation of clause 42.5 which is confined to specific, transient climatic events.”
[1] The Respondent also submits that the main purpose of clause 42 is to enable stand downs without pay in the defined circumstances of clause 42.1. The Respondent submits I must bear that in mind when construing the exception provided by clause 42.5. That is, the exclusion should be read down so far as is consistent with the language of the exclusion so as to ensure the principal purpose of the clause (42.1) remains.
[2] The Respondent finally submits on the question of construction that the true cause of the stand down is the breakdown of machinery. If the machinery had not broken down, when the fire had passed by 19 February 2019 the workers would be back at work. That is the reason the workers cannot work is not the fire (which has long passed) but on account of, or because of the breakdown in the machinery.
Consideration
[3] As can be seen from what precedes this, I agree with the Respondent that there is no requirement akin to s 526(4) of the Act to take account of fairness in respect of this dispute brought pursuant to the DSP. It follows that I do not have an overall discretion to exercise in respect of the dispute, although discretionary matters may arise in respect to remedy. I am first dealing with a question of construction: are the workers prevented from working due to breakdown of machinery or on account of bushfire.
[4] 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.
[5] 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.
[6] 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.
[7] 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.
[8] 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.
Redundancy
[9] The Applicant has sought that I order the Respondent to pay the workers currently stood down redundancy entitlements from 11 March 2019 in the event I do not determine that they are entitled to be paid during the stand down.
[10] The Respondent submits that I have no power to do so. It says that I can only make orders consistent with the nature of the dispute. It submits that the dispute is about the construction of the Agreement and that once determined the dispute is at an end. Putting it slightly more broadly the dispute is about whether the employees are entitled to be paid during the present stand down. Once that issue is resolved the matter is at an end.
[11] The Applicant submits that as a matter of fairness I can make the order sought. It also submits I can make the orders because of s 595(2) and (3) of the Act. As I have said, it seems the Applicant misapprehends the nature of its application. It has made an application under the DSP. It has not been made under s 526. Indeed it would seem that such an application could not be made because the Respondent had no power to stand the employees down other than in accordance with the Agreement10 and did not purport do so.
[12] What the Applicant sought in its Application was a conciliation of the matter in the first instance. That was attempted on 13 March 2019 without success. The Applicant then sought compliance with clause 42.5 of the Agreement. I have found that clause 42.5 no longer operates. It also sought an order recommendations or suggestions from the Commission to avoid arbitration. Arbitration was not able to be avoided as the Respondent maintained (as it was entitled to do) its stance that no wages were payable. It also noted that no decision had been made about the future of the mill including the issue of redundancies.
[13] In its Facts and Contentions the Applicant sought the order regarding redundancy. That formed no part of the initial Application. However that is not necessarily fatal to the Applicant. I am to perform my functions without unnecessary technicality.11 However I am not prepared to make any orders in respect to redundancy. That is primarily because I have no evidence about redundancies and whether all 19 affected employees may be entitled to a redundancy payment or only some of them. Further there does not appear to have been any decision made that any roles are in fact to be made redundant (although it may well be that some at least will be). The future of the mill is uncertain.
[14] However, given that there is a Board meeting in a weeks’ time and given the nature of the industry and the difficult economic circumstances facing the industry in Tasmania as a whole I am prepared to recommend that the Board, as part of its decision making regarding the future of the mill, confirm that if the mill is to be shut down or if reinstating the mill will be a prolonged process, that it instructs the relevant officers or employees of the Respondent to commence the redundancy process forthwith. The employees have been without income for a number of weeks. An early resolution of the issue is required. It seems that a decision will be made on 9 April 2019 as to the future of the mill. There is no reason I can see that the question of redundancies should not form part of the decision making process on 9 April.
DEPUTY PRESIDENT
Appearances:
Applicant
Mr Daniel Malbasa
Mr Scott Mclean
Respondent
Mr Rod Collinson
Mr Robert Yong
Ms Nicola Dobson
Hearing details: none
Final written submissions: 26 March 2019
Printed by authority of the Commonwealth Government Printer
<PR706479>
1 (2000) 203 CLR 194 at [19]
2 [2018] FWC 2483
3 [2005] FWC 8825 at [22]
4 (2015) 250 IR 377 at [17].
5 Clause 48.3
6 Agreement clause 49.6
7 [2017] FWCFB 3005
8 Paragraph 27 of its Facts and Contentions
9 Respondents Facts and Contentions
10 See s 524(2) of the Act.
11 See s 577 of the Act.
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