Construction, Forestry, Mining and Energy Union v Bowen and Pomeroy Pty Ltd
[2012] FWA 10620
•19 DECEMBER 2012
[2012] FWA 10620 |
|
DECISION |
Fair Work Act 2009
s.739—Dispute resolution
Construction, Forestry, Mining and Energy Union
v
Bowen & Pomeroy Pty Ltd
(C2012/5218)
Timber and paper products industry | |
COMMISSIONER GOOLEY | MELBOURNE, 19 DECEMBER 2012 |
Alleged dispute in relation to Redundancy and alternative employment.
Introduction
[1] The Construction, Forestry, Mining and Energy Union (CFMEU) notified a dispute between it and Bowen & Pomeroy Pty Ltd (the Respondent) on 7 September 2012.
The industrial instrument
[2] The parties are bound by the Bowen and Pomeroy Enterprise Agreement 2009 (the Agreement) an agreement approved by Commissioner Blair and in accordance with s.54 of the Fair Work Act 2009 operated from 18 November 2010.
[3] The Agreement at clause 2.5 provides for the resolution of disputes about the Agreement and provides at clause 2.5.6 for Fair Work Australia to conciliate or arbitrate such disputes.
[4] The Agreement at clause 5.5 of the Agreement deals with redundancy as follows:
“5.5 REDUNDANCY
i. This agreement shall apply in circumstances where Bowens has made a definite decision that they no longer wish the job an employee has been doing to continue, and no alternative position is available for that employee.
ii. This agreement shall not apply where an employee is offered reasonable alternative employment as a result of any internal restructuring within their existing Branch. Clauses 5.5 (vii), 5.5 (viii) and 5.5 (xiv) shall not apply to employees who are offered and who take up reasonable employment as outlined in Clause 5.5 (iii) and 5.5 (iv).
iii. Reasonable alternative employment shall be defined as employment in a role/function/job not usually performed by the employee, provided that the employee is capable and or skilled to perform the role/function/job. Being capable and or skilled to perform the role/function/job, may require further training, before, during and or after engagement in alternative employment.
iv. Alternative employment offered at a geographically separate location shall constitute reasonable alternative employment even where the employee is required to travel within nominated region as per Clause 3.3 (iii). Where an employee is offered alternative employment at a geographically separate location which requires travel outside of the nominated region, it shall not constitute reasonable alternative employment, however, it may constitute reasonable alternative employment where agreed to by the employee affected.
v. The PCC and or ECC, whichever appropriate and the chosen representative of the affected employees are to be consulted when management, either through restructuring of the enterprise or a general downturn in the industry deems it necessary to make redundant certain jobs and that decision may lead to termination of employment. Consultation shall cover any reasons for the proposed terminations, measures to avoid or minimize the terminations and measures to mitigate any adverse effects on any terminations on the employees concerned.
vi. Selection of employees to be made redundant is to take into consideration but not limited to the following factors:-
a) Employees length of service
b) Employees skills and versatility
c) Employees volunteering for redundancy
d) Affirmative Action and EEO criteria
e) Employees ability to transfer to another position in the current or another location.
vii. An employee made redundant, is to be paid out Long Service Leave entitlements on a pro rata basis from the 5th completed year of service
viii. Any employee who at the time of being notified of their impending redundancy has 104 hours or more of sick leave, will have up to $250 credited to them
ix. Any employee whose job is made redundant, and who is offered alternative employment, at another Branch of the company, which requires extra travelling within the nominated regions as per Clause 3.3 (iii) to or from the previous place of employment will be entitled to a four week familiarization period, during which time they can decide whether to either accept or reject the offer of alternative employment. The notice period shall commence upon the initial written notification of the redundancy
x. Where an employee elects to reject alternative employment, either before, during or at the expiration of the four week familiarization period, they will be entitled to redundancy payment in accordance with this agreement
xi. Where an employee elects to trial or accepts alternative employment at another Branch that employee will be entitled to the following:
a) Where an employee uses public transport and as a result of their redeployment they incur extra public transport costs the employee will be entitled to reimbursement of those extra costs only, or
b) Where an employee who uses their own vehicle and as a result of their redeployment they are required to travel extra kilometres, that employee will be entitled to be reimbursed only for those extra kilometres travelled in accordance with the rate as specified in Attachment 1 Clause 27.4. The number of extra km travelled must be agreed on. This Clause will only apply for one month from the time of redeployment.
xii. Where an employee, under official notice of redundancy, or engaged in the four week familiarization period, dies from whatever cause, then that employee’s nominated beneficiary will receive all the entitlements which the employee would normally have received. If such an employee, on notice, had breached a condition of the employees Superannuation Fund (either Company or FIRST), which disentitles the employee from compensation under the relevant scheme, or fund, then there is no obligation on the company to pay such compensation or entitlement that the employee, or nominated beneficiary, which they would normally have received from such scheme, or fund.
xiii. An employee who is to be made redundant will be given the following notice:
From | To | Weeks Notice |
Date of Commencement | 2 years of completed service | 2 weeks |
Third Year | 4 years of completed service | 4 weeks |
Fifth Year | 6 weeks |
xiv. An employee made redundant will be entitled to the following redundancy payment:
Beginning of Service | Completion of Service | Pay for each year |
First year | Seventeenth year | 3 weeks |
Eighteenth year | Beyond eighteen years | 2 weeks |
Each period of service stands alone and is to be calculated separately | ||
Maximum of 52 weeks | ||
xv. Any employee made redundant will be given preferential consideration for a 12 month period following their redundancy, if they choose to apply for a position which is advertised by Bowers.”
Background
[5] In or around June 2012 the Respondent decided to close production at its Hasting Branch. The Respondent offered the twenty one affected employees a transfer to its Dandenong site. 1
[6] Nine employees did not accept the offer and resigned their employment on 4 July 2012. 2 The remaining twelve employees (the transferring employees) accepted the offer of transfer.3
The matter in dispute
[7] The dispute is whether the transferring employees who accepted a transfer to Dandenong are entitled to
(a) a familiarization period of four weeks from the date of commencement of alternative employment;
(b) a redundancy payment if the employee elects to reject the alternative employment during the familiarisation period; and
(c) a travel allowance for the first month immediately after commencement of the alternative employment.
[8] The Respondent denied the transferring employees these entitlements.
Jurisdiction of Fair Work Australia
[9] There is not dispute that Fair Work Australia has the jurisdiction to resolve the dispute.
Submissions the Respondent
[10] The Respondent submitted that the Agreement should be seen in the context that the majority of its employees are in its retail business and that the “language used and the purpose of Clause 5.5 was to provide the parties with a [although somewhat convoluted] process of transferring the retail business staff to other roles and other locations.” 4
[11] The Agreement, it was submitted, defines reasonable alternative employment as follows:
“Reasonable alternative employment shall be defined as employment in a role/function/job not usually performed by the employee, provided that the employee is capable and or skilled to perform the role/function/job. Being capable and or skilled to perform the role/function/job, may require further training, before, during and or after engagement in alternative employment.”
[12] It is then submitted that the first sentence at sub-clause (iv) augments the definition of reasonable alternative employment as follows:
“Alternative employment offered at a geographically separate location shall constitute reasonable alternative employment even where the employee is required to travel within nominated region as per Clause 3.3 (iii).”
[13] It is not disputed that Dandenong and Hastings are in the same nominated region.
[14] The Respondent submitted that “an offer alternative employment is an offer of employment that is not reasonable within the definition. Alternative employment is employment that the employee does not have the necessary skill and capability to perform despite further training and/or it requires the employee to travel outside the nominated Regions in sub-clause (iv).” 5
[15] Because the offer of alternative employment may not be suitable the employee is provided with an opportunity to familiarise him or herself with the position before deciding whether to take up the alternative position.
[16] It is submitted that it is not uncommon for an industrial agreement to provide that an employee whose job is made redundant who is offered a comparable position is required to accept the position and if they chose not to are not entitled to be paid redundancy pay. It was submitted that if no comparable position is available and the employee is offered suitable alternative employment then the employee has a period of time to accept the suitable alternative position or be paid the redundancy benefits. 6
[17] It was submitted that the transferring employees were not offered alternative employment within the meaning of clause 5.5. They are doing the same tasks under the same classification structure at a different location.
[18] The Respondent submitted that the transferring employees were not made redundant and therefore do not have any entitlements under clause 5.5 of the Agreement.
[19] Alternatively if the Tribunal finds the transferring employees were made redundant and were offered reasonable alternative employment they are not entitled to the benefits set out in 5.5(ix), (v) and (vi) as they are confined to those offered only alternative employment.
The CFMEU submissions
[20] The CFMEU submitted that the transferring employees had been made redundant. The CFMEU relies on authorities that conclude that the job is made redundant not the individual employee. 7
[21] The CFMEU relied on the relocation of employment to support a finding that the jobs of the employees had been made redundant. The relocation from Hastings to Dandenong was not, it was submitted, minor or insignificant as it requires employees to travel an additional 35 kms each way to get to and from work. 8
[22] The CFMEU submitted that because alternative employment has been offered at Dandenong this becomes by definition reasonable alternative employment. 9
[23] The CFMEU submitted that this does not deprive the transferring employees of the entitlements under clause 5.5.
[24] It was submitted that only transferring employees who “take up” reasonable alternative employment who become disentitled to any entitlements. 10 It is submitted that the transferring employees have not taken up alternative employment they “are merely availing themselves of the familiarisation period to which they are entitled under sub-clause (x) of the Redundancy Clause.”11
[25] Further it was submitted that even if they have “taken up” reasonable alternative employment, sub-clause (ii) only disentitles the transferring employees to long service leave, the bonus and in certain circumstances the redundancy payment. 12
[26] It was submitted that the transferring employees are entitled to a familiarisation period of four weeks, a redundancy payment if they chose to reject the alternative employment and back pay of the travel allowance.
[27] In response to the Respondent’s submissions, the CFMEU submitted that the Respondent’s interpretation of the difference between “alternative employment” and “reasonable alternative employment” was narrow and pedantic and should not be upheld. 13 The CFMEU also rejected this submission because the Agreement itself states that in certain circumstances “alternative employment” is “reasonable alternative employment.”14 Further the CFMEU rejected the contention that the provisions should be seen in the light of the fact that a majority of employees were retail employees.15 The CFMEU submitted that the clause applies to all employees covered by the Agreement.16 The CFMEU further submitted that reasonable alternative employment contemplates “a transfer within a nominated region whether or not it also involves a change of role.”17
[28] The CFMEU submitted that the construction put forward by the Respondent would disentitle an employee who accepted alternative employment outside the nominated region from a travel allowance, a familiarisation period and the ability to elect to be made redundant. This is submitted was illogical. 18
[29] Further it submitted that if the construction put forward by the Respondent is correct it would be able to transfer employees to locations within the same region which may involved distances of up to 200kms without a familiarisation period, travel allowance or the right to elect to take a redundancy package. 19 This interpretation would lead to a clear injustice and should be avoided.
Principles of construction
[30] The parties agreed that the principles set out in AMWU v Silcar Pty Ltd 20 sets out the correct approach to the interpretation of agreements and I adopt that approach.
History of the Clause
[31] No material was put before the Tribunal about the history of this clause and no evidence was provided about the negotiations that led to the clause being included in the Agreement to assist in determining what the mutual intention of the parties was.
Conclusion
[32] I do not accept the submissions of the Respondent that the purpose of sub-clause 5.5 is to provide for a process of transferring retail staff to other roles and to other locations. There is nothing in the Agreement or any evidence before Fair Work Australia to support such a finding.
[33] The clause clearly applies to all employees within the scope of the Agreement.
[34] The first question that needs to be determined is whether the transferring employees’ jobs were made redundant.
[35] I do not accept the submissions of the Respondent that the transferring employees’ jobs were not made redundant.
[36] It is clear from the agreed facts that the closure of the Hastings Branch of the Respondent made the jobs performed by the transferring employees at the Hastings Branch redundant. There was no evidence that the Respondent had a right either under the Agreement or under the transferring employees’ contracts of employment to unilaterally transfer them from the Hastings Branch to the Dandenong Branch. I accept the proposition that relocation can trigger redundancy. 21 In this case I accept, as there is no evidence to the contrary, the submissions of the CFMEU that the transfer would require the transferring employees to travel an additional 35kms each way. This is a sufficient change to find that the jobs performed by the transferring employees were redundant.
[37] The Agreement then contemplates four circumstances in which the operation of clause 5.5 is modified:
(1) If the employee is offered alternative employment as a result of any internal restructuring within their existing branch.
(2) If the employee is offered a role/job not usually performed by the employee.
(3) If the employee is offered a position at a geographically separate location within their geographical region.
(4) If the employee is offered a position at a geographically location outside of their geographical region and the employee agrees that this is reasonable alternative employment.
[38] In the case of situation (1) the employee is not entitled to any of the provisions of clause 5.5.
[39] In situations (2), (3) and (4) clauses 5.5(vii), (viii) and (xiv) do not apply.
[40] It is clear that had clause 5.5(iii) stood alone the transfer of employees from Hastings to Dandenong to do the same job would not constitute reasonable alternative employment. However I agree with the CFMEU that clause 5.5(iv) deems alternative employment offered at a geographically separate location to be reasonable alternative employment whether the employee is doing the same job or not.
[41] As a consequence clauses 5.5(vii), (viii) and (xiv) do not apply to employees who are offered and take up alternative employment.
[42] It is clear from clause 3 of the Agreement that one of the branches of the Respondent is the Hastings Branch. It is clear that the transferring employees were not offered reasonable alternative employment as a result of any internal restructuring within their existing branch.
[43] It clear that if transferring employees take up reasonable employment as outlined in clauses 5.5(iii) or (iv) they are not entitled to certain benefits under the Agreement.
[44] It is clear that clause 5.5(iii) has no application in this case.
[45] It is clear that alternative employment at a geographically separate location has been offered to the transferring employees and as they are only required to travel in their nominated region this constitutes reasonable alternative employment. Consequently they are not entitled to the benefits set out in clauses 5.5(vii), 5.5(viii) and 5.5(xiv) of the Agreement.
[46] I do not accept the submissions of the Respondent that there is a different meaning to be given to the expression “alternative employment” and “reasonable alternative employment.”
[47] The Agreement uses the expression:
“no alternative position” in clause 5.5(i)
“reasonable alternative employment” in clauses 5.5(ii), (iii)
“reasonable employment” in clause 5.5(ii)
“alternative employment” in clauses 5.5(iii), (iv), (ix), (x), (xi)
[48] I do not consider that there was any intention to given different meaning to these phrases. To do so would be to take a pedantic approach to the interpretation of the Agreement without any evidence that the parties intended such fine distinctions to be made. If such a construction were upheld then an employee offered an new role/function job in clause 5.5(iii) would not be entitled to a familiarisation period as that only applies to an employee who is offered alternative employment. Such an outcome would be contrary to the very submissions made by the Respondent. Further if there is any ambiguity clause 5.5(iv) makes it clear that “alternative employment offered at a geographically separate location shall constitute reasonable alternative employment.”
[49] While the transferring employees are not entitled to the benefits of clauses 5.5(vii), (viii) and (xiv) they are entitled to the benefits of clause 5.5(ix).
[50] Clause 5.5(ix) provides that transferring employees who are offered alternative employment are entitled to a familiarisation period.
[51] I do not accept the submissions of the Respondent that the familiarisation period only applies to those employees who are offered a different role. While it is clear that an employee who has not done a particular job before may want to try out the role before deciding whether to finally accept the offer of the transfer so may an employee who is required to travel an additional distance to work. The employee will not, until they have experienced the additional travel, be able to assess if any issues of fatigue arise or if the additional travel time has a detrimental effect on family responsibilities. There is nothing in the Agreement or any evidence put before me to suggest that this provision should be read down so that it only applied to employees who changed roles.
[52] Therefore the employees who chose to trial the new position are entitled under clause 5.5(x), if they reject the position, to be paid redundancy pay. They are not entitled to the entitlements in clauses 5.5(vii) and (viii).
[53] In addition the employees are entitled to the provisions set out in clauses 5.5(xi) and (xii).
[54] It is clear that the provisions in the Agreement are designed to ensure that an employee who after the familiarisation period elects to remain employed is not entitled to both the job and the redundancy benefit.
[55] I accept the submissions of the Respondent that generally employers are protected from paying redundancy pay to employees who are offered reasonable alternative employment. 22 Case law has established that the test for determining what is reasonable alternative employment is an objective one. However this Agreement has prescribed what an offer of reasonable alternative employment entails and also provided a familiarisation period which expressly allows, in the familiarisation period, an employee to reject what might otherwise objectively be reasonable alternative employment and still be paid redundancy pay.
[56] I therefore conclude that the transferring employees are entitled to a familiarisation period, the payment of the travel allowance and if they elect to reject the alternative employment during the familiarisation period the transferring employees are entitled to be paid redundancy pay.
COMMISSIONER
1 Agreed statement of facts at [1]-[2]
2 Ibid at [3]
3 Ibid at [4]-[5]
4 Respondent’s submissions at [10]-[11]
5 Ibid at [20]
6 Ibid at [23]
7 R v Industrial Relations Commission of South Australia; Ex parte Adelaide Milk Supply Co-Op Limited (1977) WL166175 (SASC), Amcor Limited v CFMEU [2005] HCA 10, Termination, Change and Redundancy case [1984] 9 IR 115
8 Submissions of the CFMEU at [24]
9 Ibid at [27]
10 Ibid at [29]
11 Ibid
12 Ibid at [30]
13 Submissions in reply by the CFMEU at [2]
14 Ibid at [5]
15 Ibid at [4]
16 Ibid
17 Ibid at [6]
18 Ibid at [7]
19 Ibid at [13]
20 [2011] FWAFB 2555 at [9]-[11]
21 See Commonwealth of Australia v Finance Sector Union of Australia 25 FCR 9 at [29]
22 See section 120 of the Fair Work Act 2009
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