Construction, Forestry, Maritime, Mining and Energy Union v Tahmoor Coal Pty Ltd

[2019] FCCA 292

FEDERAL CIRCUIT COURT OF AUSTRALIA

CONSTRUCTION, FORESTRY, MARITIME, MINING & ENERGY UNION & ORS v TAHMOOR COAL PTY LTD [2019] FCCA 292

Catchwords:
INDUSTRIAL LAW – Application for relief of an alleged contravention of an enterprise agreement – application for declaratory relief and payment of compensation – no contravention of s.50 of the Fair Work Act 2009 is made out – application dismissed.

Legislation:

Fair Work Act 2009 (Cth), ss.4, 5, 6, 12, 14, 50, 51, 52, 53, 54, 184, 185, 545, 566
Fair Work (Registered Organisations) Act 2009 (Cth)

Cases cited:

Construction, Forestry, Mining and Energy Union v Endeavour Coal Pty Ltd t/a Appin Mine [2017] FWCFB 4487

First Applicant: CONSTRUCTION, FORESTRY, MARITIME, MINING AND ENERGY UNION

Second Applicant: CHAD NATHAN MALBY

Third Applicant: PAUL GARETH TOOK

Fourth Applicant:  STEPHEN JAMES GAUCI

Respondent: TAHMOOR COAL PTY LIMITED
(ACN 076 663 968)

File Number: SYG 377 of 2018

Judgment of: Judge Street

Hearing date: 11 February 2019

Date of Last Submission: 11 February 2019

Delivered at: Sydney

Delivered on: 11 February 2019

REPRESENTATION

Solicitors for the Applicant: Mr A Walkaden
Construction, Forestry, Mining and Energy Union

Counsel for the Respondent: Mr J Murdoch

Solicitors for the Respondent: Ashurst

ORDERS

1. Grant leave to the applicants to amended the name of the first applicant by inserting the word “Maritime,” after “Forestry,” and the Court dispenses with the need for the filing of any amended application in that regard.

2. The application is dismissed.

DATE OF ORDER: 11 February 2019

FEDERAL CIRCUIT COURT
OF AUSTRALIA
AT SYDNEY

SYG 377 of 2018

CONSTRUCTION, FORESTRY, MARITIME, MINING AND ENERGY UNION

First Applicant

CHAD NATHAN MALBY

Second Applicant

PAUL GARETH TOOK

Third Applicant

STEPHEN JAMES GAUCI

Fourth Applicant

And

TAHMOOR COAL PTY LIMITED (ACN 076 663 968)

Respondent

REASONS FOR JUDGMENT

Background

1. These are proceedings within the Court’s jurisdiction under s 566 of the Fair Work Act 2009 (Cth) (“the Act”). The proceedings seek relief in respect of an alleged contravention of an enterprise agreement under s 50 of the Act, for which declaratory relief is sought as well as for payment of compensation pursuant to s 545 of the Act as well as penalties under s 4, 5 and 6 of the Act.

2. The enterprise agreement is the Tahmoor Colliery Site Enterprise Agreement 2010 (“the Agreement”), which was the subject of an approval under s 185 of the Act by the Fair Work Commission on 20 October 2010. The first applicant was the bargaining representative for the agreement the subject of that approval, and the second, third and fourth applicants are or were employees of the respondent and members of the first applicant.

3. The Tahmoor Colliery is a coal mining operation located near the town of Tahmoor, approximately 100 kilometres southwest of Sydney. It has a coal handling and preparation plant on the surface. Evidence was led that there were 172 employees in the underground operation and the coal handling and preparation plant. All of the employees are covered or were covered by the Tahmoor Colliery Site Enterprise Agreement 2017 (“the 2017 Agreement”).

4. There has been substantial agreement between the parties in relation to the facts and, effectively, if the applicants succeed on the alleged contraventions there is an amount of $811.54 that would be payable to the second applicant, an amount of $1379.73 that would be payable to the third applicant, and there is an amount of $1160.81 that would be payable to the fourth applicant.

5. The Agreement was the subject of an approval process which relevantly, under s 182 of the Act, included a voting process by a majority of employees. Section 51 of the Act through to s 54 of the Act identify the application of the enterprise agreement and there is no issue with the fact that it applies in the present case to the respondent.

6. The respondent is a national systems employer within the meaning of s 14 of the Act and, at the relevant time was the employer of the second, third and fourth applicants. The first applicant is an organisation registered pursuant to the Fair Work (Registered Organisations) Act 2009 (Cth) and an employee organisation within the meaning of s 12 of the Act.

7. The alleged contraventions in the present case concern, first, the Mine Production Bonus and involve the proper construction of clause 20 of the Agreement. The second issue involves one of the allowances in clause 21 in Part 4 of the Agreement, being the shift loading for the night shift.

8. The principles in respect of the construction of the agreement are not in dispute and are succinctly summarised in the reasons of the Full Court of the Federal Court in Construction, Forestry, Maritime, Mining and Energy Union v Hay Point Services Pty Ltd [2018] FCAFC 182 at [8] and [9]:

   8. The applicable principles for interpreting an enterprise agreement were recently recounted by a Full Court in WorkPac Pty Ltd v Skene [2018] FCAFC 131 (Tracey, Bromberg and Rangiah JJ) at [197]:

   The starting point for interpretation of an enterprise agreement is the ordinary meaning of the words, read as a whole and in context: City of Wanneroo v Holmes [1989] FCA 369;(1989) 30 IR 362 at 378 (French J). The interpretation “... turns on the language of the particular agreement, understood in the light of its industrial context and purpose ...”:Amcor Limited v Construction, Forestry, Mining and Energy Union [2005] HCA 10; (2005) 222 CLR 241 at [2] (Gleeson CJ and McHugh J). The words are not to be interpreted in a vacuum divorced from industrial realities (Holmes at 378); rather, industrial agreements are made for various industries in the light of the customs and working conditions of each, and they are frequently couched in terms intelligible to the parties but without the careful attention to form and draftsmanship that one expects to find in an Act of Parliament (Holmes at 378–9, citing Geo A Bond & Co Ltd (in liq) v McKenzie [1929] AR(NSW) 498 at 503 (Street J)). To similar effect, it has been said that the framers of such documents were likely of a “practical bent of mind” and may well have been more concerned with expressing an intention in a way likely to be understood in the relevant industry rather than with legal niceties and jargon, so that a purposive approach to interpretation is appropriate and a narrow or pedantic approach is misplaced: see Kucks v CSR Limited (1996) 66 IR 182 at 184 (Madgwick J); Shop Distributive and Allied Employees’ Association v Woolworths SA Pty Ltd[2011] FCAFC 67 at [16] (Marshall, Tracey and Flick JJ); Amcor at [96] (Kirby J).

   9. The reference there made to the observations of Kirby J at [96] of Amcor is a reference to his Honour’s remarks that the construction to be given to a clause in an industrial instrument “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”.

9. The terms of clause 20 of the Agreement are as follows: 

   20 Mine Production Bonus

   20.1 The Mine Production Bonus scheme shall consist of a Development Bonus and a Run Of Mine (ROM) Bonus and will only apply to metres and tonnes produced by Tahmoor employees. The Mine Production Bonus will be calculated and paid on a weekly basis.

   20.2 The mine production bonus will be paid on all forms of approved paid leave and for the first 39 weeks of accident pay. Eligible employees will be paid average bonus on public holidays.

   20.3 The Mine Production Bonus is designed on a nominal 5 days per week production cycle. It is recognised that from time to time normal business activities may vary this balance. Mine Production Bonus is paid on a per employee basis.

   20.4 Where there is a major change to the projected mine operations the Company will review the mine bonus scheme. 20.5

   Development bonus

   The development bonus shall be paid at the following rate:

   • $1.10 per linear metre of advance up to 130m;

   • For greater than 130m, $1 .20 per linear metre of advance for all metres including the initial 130m.

   • Where the forecast quarterly metres are achieved, all metres in excess of the forecast metres will be paid at the rate of $1 .50 per linear metre

   Development bonus will not apply to floor brushing, roof brushing or roadway widening except for the longwall install roadway which will be calculated as per above.

   20.6 Run of mine bonus

   ROM Bonus will be paid at the rate of $0.004 per ROM tonne

   20.7 Longwall escalated bonus

   If the longwall relocation is completed in less than forecast duration then bonus for all tonnes produced from the commencement of the longwall until the end of the forecast duration will be calculated at the rate of $0.01 per ROM tonne.

10. The terms of clause 21 of the Agreement are as follows:

    21. Allowances

    21 .1 Shift Loading

    21.1.1 Afternoon Shift: Employees working a roster where the ordinary hour component of that shift ends after 6:00pm and before 1.00am are entitled to an additional 15% loading on their paid ordinary hours for each shift of attendance.

    21.l.2 Night Shift: Employees working a roster where the ordinary hour component of that shift ends after 1.00am and before 9:00am are entitled to an additional 25% loading on their paid ordinary hours for each shift of attendance.

    21.2 Mines Rescue

    21.2.1 Employees who are nominated by the Company to carry out Mines Rescue training are not required to attend their normal shift and will be paid the following for attending Mines Rescue training:

    Shift

    Normal rostered

    Non-working Day

    Normal rostered

    Paid as if attended for work

    7 hours @ overtime rates

    21.2.2 Mines Rescue employees who are called out to attend an incident and do not attend their normal shift, or who are required to leave the mine to attend an incident, are normally paid by the Mines Rescue and are to have their pay made up by the Company as if they had attended their normal shift.

    21.2.3 If Mines Rescue training is held on an employee's weekend, overtime rates are paid. This does not apply to employees attending weekend competitions.

    21.2.4 Mines Rescue employees are, in respect of attendance and participation in Mines Rescue competitions, paid by the Mines Rescue Service (NSW). Any shortfall between MRS payment and normal shift payment will be made up by the Company.

    21.3 Tool Allowance

    Employees required by the Company to provide their own trade tools will receive a Tool Allowance of $13.00 per week. The allowance will be paid annually and on a pro-rota basis for years l and 4 of this Agreement. Payment will be made in the first pay period in December.

    21.4 Occupational First Aid

    An employee appointed by the Company as an Occupational First Aid Officer will receive the Occupational First Aid Allowance of $30.00 per week worked. Payments are deducted for absences on a pro rata basis.

    21.5 First Aid

    In accordance with Clause 16.3.5, the Company will support all employees to obtain, and maintain as current, first aid qualifications. Accordingly, employees will not be entitled to a first aid allowance.

11. The terms of clause 35 of the Agreement are as follows:

    35. Public Holidays

    35.1 The recognised public holidays are those gazetted from time to time by the NSW Government or any day observed by the people of NSW in lieu of one of the above days. The miner's picnic day public holiday is currently observed on Easter Tuesday.

    35.2 Management and employees can agree to observe an alternative day to the above public holidays. A simple majority of employees is needed and all employees are bound by that agreement. In cases of such agreement, Public Holiday conditions apply to the alternative day, not to the public holiday being substituted.

    35.3 Employees are paid at a rate of triple time for all time worked on recognised public holidays. (Triple time is made up of classification rate plus double time for the ordinary rostered hours and triple time for all other hours worked.)

    35.4 If a public holiday falls on a day an employee is normally rostered to work, and the employee is not required to work, they will be paid for their rostered hours of work at their ordinary rate (excluding allowances). An employee is not entitled to payment for the public holiday if, without good and sufficient reason, they fail to attend work on their last working day immediately before the Public Holiday or their first working day after the public holiday.

    35.5 Employees are paid their classification rate for seven ordinary hours for public holidays, which fall on the employee's rostered day off or a non working day.

    35.6 Those employees who work a weekend roster or a seven day roster and who are required to work on public holidays as part of their roster will not be required to work Christmas Day and Boxing Day.

    35.7 Monday to Friday employees working shifts of up to 8.5 ordinary hours are not required to work on public holidays. However such employees may, in exceptional circumstances, be required to work on public holidays to meet operational needs.

The Agreement

1. It is appropriate to deal, first, with the construction dispute concerning the Mine Production Bonus. The applicants contend that under clause 20.2 the Mine Production Bonus should have been paid to the applicants not just for public holidays occurring during weekdays but also for public holidays occurring during weekends. There is agreement between the parties as to the financial consequences of that construction if correct. There is no dispute as to the days that are public holidays. The applicants contend that on the ordinary meaning of the term public holidays there is no warrant for excluding public holidays that occur on weekends.

2. Clause 20 appears in Part 4 in ‘Remuneration and Related Matters’ of the Agreement. These are terms within a six Part Agreement. The Agreement identifies certain definitions in clause 2, relevantly, including the “Classification rate” meaning the hourly rate contained in clause 19.1 of the Agreement. Clause 2 defines “ordinary week’s pay”, meaning the employee’s classification rate in respect of 35 day ordinary hours. The definition of “non-working days” are days not worked in the pattern of work or roster cycle. “Normal shift” or “normal rostered shift” is the arrangement of ordinary hours and rostered over time that are worked by an employee on a daily basis. “Rostered overtime” is overtime which is an integral part of an employee’s roster and must be worked.

3. Clause 3 under Part 1 of the Agreement identifies the binding nature of the Agreement. The Agreement has since expired and been replaced, albeit it applied during the relevant period the subject of claims by the applicants.

4. Clause 5 identified the Agreement objectives:

   5. Agreement Objectives

   5.1 The objective of this Agreement is to clearly set out the agreed terms and conditions of employment that apply at Tahmoor and to provide a framework for the operation of a safe, low cost and efficient mine that delivers quality product to our customers.

   5.2 The principals that underpin this Agreement are:

   5.2.1 This Agreement is a key factor in the long term success of the Company and its employees;

   5.2.2 A work environment where safety comes first and high standards of safety and productivity are achieved and maintained;

   5.2.3 A work environment with flexible work arrangements;

   5.2.4 An acknowledgement that the Company have the responsibility, the right and the obligation to manage the business, and recognition that all employees have responsibility for the success of the operation;

   5.2.5 Continuous improvement in all aspects of the mining and surface operations;

   5.2.6 Job satisfaction with fair, reasonable and competitive employment conditions and remuneration;

   5.2.7 A commitment from all employees to assist wherever possible with minimising operational costs.

5. Clause 6 of the Agreement identified individual flexibility and the capacity to agree to make an individual a flexible arrangement to vary the effects of terms of the agreement in certain circumstances specified. Clause 7 of the Agreement acknowledged that there would be no extra claims.

6. Clause 9 under Part 2 of the Agreement imposed an obligation in relation to consultation regarding major workplace changes, and clause 10 provided a grievance and dispute procedure that was not engaged in relation to the dispute the subject of these proceedings. Clause 11 of the Agreement identified standards and action procedures in respect of employees, and clause 12 provided for employee representation and meetings. Clause 13 of the Agreement referred to the intention of the company not to implement redundancies for the term of this Agreement in the context of security of employment.

7. Clause 14 under Part 3 of the Agreement identified the different types of employment including, full-time, part-time, fixed-term employees and casual employees. Clause 15 refers to supervisors and leading hands, and clause 16 imposed an important obligation upon employees to reasonably comply with the company’s procedures, management systems, rules and relevant workplace policies. That included obligations for the employees to undertake certain duties, carry equipment, undertake training, wear appropriate clothing, participate in appropriate investigatory steps, provide first aid, undergo medical examinations, maintain their fitness for work, as well as a provision concerning probation period, and an ability to stand down employees.  

8. Clause 17 of the Agreement concerned the termination of employment, and clause 18 addressed the decision by the company to reduce a number of full-time employees by means other than ordinary and customary turnover of labour and that the Company will hold discussions and the undertake steps that were required.

9. Under Part 4 of the Agreement, which is the provision containing clause 20 and clause 21, clause 19 identifies wage rates and classifications and refers to the hourly rates of pay and classifications being set out in a table. That table has classification of different positions comprising inexperienced worker, mine worker, mechanical worker, electrical mine worker, leading hand and supervisor and provided, over different periods, different hourly rates. Clause 19 also set out, in respect of payment of wages, that wages are paid on an agreed day each week directly into an employee’s nominated account and that where a payday falls on a recognised public holiday, payment is made on the day before. The clause also referred to salary sacrifice and vehicle lease.

10. Clause 22 of the Agreement deals with superannuation, and in clause 23 overtime, and clause 24 accident pay. Clause 25 refers to payroll deductions and clause 26 deals with the clothing, safety and protective equipment.

11. In Part 5 of the Agreement, clause 27 deals with the hours of work and the ordinary hours at work being the average of 35 hours per week, and that these hours will be averaged over the roster cycle. Clause 27.2 refers to all ordinary hours worked by an employee at the following rates, and there is there a day per week identified as Monday to Friday with a rate of pay being single time; Saturday, first four hours at time and a half, and after four hours at double time; Sunday, at double time. Clause 27.3 refers to rostered hours in excess of the 35-hour average per week will be paid at the rate of double time.  

12. Clause 28 of the Agreement refers to roster arrangements and that the roster arrangements can vary through the life of the Agreement in accordance with the need to the operation. Subject to the terms of the Agreement, the company may determine the roster and shift lengths to be worked up to a maximum of 12 hours. There are other provisions concerning the roster, including a requirement of four weeks’ notice for any change of roster.

13. Clause 29 of the Agreement refers to labour allocation and team work and is directed towards the safe and efficient operation of the mine and the coal handling preparation plant. Clause 30 provides that the starting and the finishing times for shifts worked may vary during the life of the agreement. Clause 31 concerns crib breaks and meal allowances.

1. In Part 6 of the Agreement, clause 32 refers to annual leave, and relevantly in clause 32.2 refers to an employee who works a seven-day roster or a roster which requires ordinary shifts on public holidays and not less than 272 ordinary hours per year on a Sunday is entitled to six weeks’ annual leave. Clause 32.3 identifies all other employees are entitled to five weeks’ annual leave, and the provision otherwise identifies the circumstances or the requirements for payment of annual leave.

2. Clause 33 provides for personal leave and includes an entitlement to unpaid carers’ leave. Clause 34 deals with long service leave and does have a provision that addresses what occurs where a recognised public holiday falls within an employee’s long service leave and on a day which would have ordinarily been a working day for that employee, as well as dealing with work transfer. Clause 35 concerns public holidays and has been set out above. Clause 36 deals with compassionate leave. Clause 37 concerns parental leave; clause 38, jury service; clause 39, community service leave; and clause 40, defence service leave.

Mine Production Bonus Issue

1. The applicants submit that the reference to the “eligible employees” is one that effectively means all employees other than those on unpaid leave or those who for whom the 39 weeks of accident pay have expired. In clause 20.2 of the Agreement, the reference to being paid the average bonus on public holidays does not of itself identify any obvious limitation to weekdays. However, the clause should not be read in isolation. The clause must be read in the context of the agreement as a whole, and in its context materially in the present case, includes clause 20.3 that refers to the mine production bonus being one that’s designed on a nominal 5 days per week production cycle.

2. The production bonus can be identified in clause 20.1 as consisting of the Development Bonus and Run of Mine Bonus, and has application only to metres and tonnes of production by Tahmoor employees. The Mine Production Bonus is to be calculated and paid on a weekly basis. The balance of clause 20.3 does identify that normal activities may vary the balance on which the production bonus has been designed.

3. The clause also provides, in clause 20.4, where there has been a major change for the company to review the mine bonus scheme. There are then provisions that identify the Development Bonus and the Run of Mine Bonus and the Longwall Escalated Bonus. Clause 20.3 is of importance in the construction of clause 20.2. There is no genuine dispute, but the reference to a nominal five days per week is a reference to weekdays.

4. This is of significance because it means that the Mine Production Bonus was designed on a five-day weekday per week production cycle. That gives meaning and content to the reference of public holidays, albeit on a literal construction there is force in the contention advanced by the applicants that weekends should be included before the averaging of the bonus. That is not consistent with the context of the provision and the obvious industrial purpose in respect of the weekdays in the design of the mine production bonus.

5. The purpose of the provision is to be gleaned from the text and context, and on its face it is clearly a provision to incentivise employees. The obligation to pay the average bonus on public holidays on its face supports the purpose of not disadvantaging the employees in relation to the mine production bonus at a designed normally five day per week production cycle where one of those five days per week is a public holiday.

6. I do not accept the contention that the literal construction should be preferred. The applicants’ construction effectively ignores the reading of the provision in the whole of its context. Further, when regard is had to clause 32.2 of the Agreement and a reference to a seven-day roster, it is apparent that the parties turned their minds in formulating the agreement to the difference between five days whether it be a production cycle or seven days being a roster. Had clause 20.3 referred to a design on a nominal seven days per week production cycle, the applicant’s construction would be correct.

7. It is not appropriate to construe clause 20.2 in isolation to the balance of clause 20, and taking into account the ordinary meaning of the text, context, the Agreement as a whole and purpose of clause 20.2, the respondent was correct to adopt a construction about the payment of the average bonus on public holidays is concerned with public holidays occurring during weekdays. No contravention of s 50 of the Act in respect of the Mine Production Bonus is made out.

Night Shift Allowance

1. The substance of the applicant’s construction in the present case is that clause 21.1.2 of the Agreement provides an additional loading to which the third and fourth applicants should have been entitled, notwithstanding the receipt of triple pay under clause 35 on public holidays.

2. The applicants submit that the literal meaning of clause 21.1.2 of the Agreement supports an entitlement to both the night shift entitlement as well as the triple time entitlement on public holidays. The applicants refer to the decision of the Fair Work Commission in Construction, Forestry, Mining and Energy Union v Endeavour Coal Pty Ltd t/a Appin Mine [2017] FWCFB 4487 (“CFMEU v Endeavour”), dated 31 August 2017, where, in the context of a provision that included payment rules, it was identified that the purpose of this provision was for the inconvenience of working unsociable and non-family-friendly hours and that the rationale applies with at least equal force to shift work worked on an ordinary day as it does to a shift worked on a public holiday. The Fair Work Commission opined that the provision of the agreement could have been clear that the public holiday penalty rates were high enough to compensate the employee for all inconvenience associated with working on a public holiday.

3. The purpose of clause 21.2 of the Agreement is clearly to address the inconvenience of working the unsociable and non-family-friendly night shift hours. There is, however, no material difference in the purpose of clause 35 of the Agreement as working on public holidays, could equally be described as working unsociable and non-family-friendly hours. The observation of the Fair Work Commission that the rationale applies with at least equal force is consistent with a recognition of an overlap of purpose.

4. Unlike the provision in the CFMEU v Endeavour, in the present case, clause 35.3 of the Agreement expressly refers to employees being paid a rate of triple time “for all time worked on a recognised public holiday”. The words “for all time worked” must be given their natural and ordinary meaning, and their natural and ordinary meaning may displace the entitlement that might otherwise arise in respect of employees working a roster where the ordinary hours of that shift end after 1 am and before 9 am. Those words “for all time worked”, in the context of the agreement, and other provisions as a whole, do not support the applicant’s contention that they are entitled to night shifts on top of triple time in respect of public holidays, so far as concerns the third and fourth applicants.

5. To the extent that the Fair Work Commission in the CFMEU v Endeavour adopted a different construction, the payment rules and provisions have no similar provision to that found in the present case in clause 35.3 of the Agreement. The Agreement must be read as a whole, and I accept the respondent’s submission that clause 35.3 governs the whole of the allowances that might be provided for time worked on a recognised public holiday, and in respect of “all time worked” it was intended to be exhaustive and not supplemented by the night shift allowance. No contravention of s 50 of the Act in respect of the night shift allowance is made out.

Conclusion

1. Accordingly, the application is dismissed.

I certify that the preceding thirty-nine (39) paragraphs are a true copy of the reasons for judgment of Judge Street

Associate:  

Date:  26 March 2019