Construction, Forestry, Mining and Energy Union v De Martin & Gasparini Pty Ltd

[2016] FWC 3499

[2016] FWC 3499 [Note: An appeal pursuant to s.604 (C2016/4174) was lodged against this decision.]

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.739 - Application to deal with a dispute

Construction, Forestry, Mining and Energy Union
v
De Martin & Gasparini Pty Ltd
(C2016/3194)

COMMISSIONER RIORDAN SYDNEY, 1 JUNE 2016

Alleged dispute about any matters arising under the enterprise agreement and the NES;[s186(6)].

[1] This decision relates to an application by the Construction Forestry Mining and Energy Union (CFMEU) for an Order to stop De Martin & Gasparini Pty Ltd (DMG) from directing its trailer pump crew employees to start and finish work at locations other than the DMG yard at Homebush Bay.

[2] DMG is the largest concrete pumping and placement company in New South Wales. It employs 134 field employees – 100 concreters and 34 pump crew employees. The pump crew employees are currently split evenly between those that work on the mobile pumps and those that work on the trailer pumps. The trailer pumps remain on site for the duration of a job whilst the mobile pumps travel to site every day. Of the 17 current employees allocated to the trailer pumps, 5 have volunteered to start and finish on site at Barrangaroo for their own convenience.

[3] Leave was granted to allow Mr Ian Latham of Counsel to represent the CFMEU and for Mr Jason Donnelly from National Workplace Lawyers to represent DMG.

[4] This matter has been the subject of conciliation conferences by the Fair Work Commission (FWC), as presently constituted, on 7 April, 4 and 12 May 2016. Despite genuine attempts by both parties to reach an agreement, the matter remains unresolved.

[5] The parties have agreed that the Fair Work Commission (FWC), in accordance with Clause 26 – Disputes Resolution Procedure of the De Martin & Gasparini / CFMEU Collective Agreement 2015 - 2018 1 (the Agreement), has the power to arbitrate this dispute.

[6] The parties agree that the Commission must not make a decision which is inconsistent with the Act or the Agreement in accordance with section 739 (5) of the Fair Work Act, 2009 (the Act)

[7] The parties agree that the provisions of the Building and Construction General On-Site Award 2010 2 (the Award), have been incorporated into the Agreement.

“4. INCORPORATION OF AWARD PROVISIONS

a) The terms and conditions of the Building and Construction General On-site Award 2010, except clause 13 of the BCGOA, are hereby expressly incorporated as terms of this Agreement as if the same were set out in full herein and must be binding upon the parties during the currency of the Agreement, by operation of this Agreement.

b) In the event of any inconsistency between the terms and conditions of the BCGOA which are incorporated into this agreement by operation of (a) above and any other express provision of this Agreement, the express provision/s of this Agreement must prevail to the extent of such inconsistency, unless the express provision of the Agreement provides otherwise or unless contrary to law.”

[8] DMG trailer pump crew employees currently start at the DMG yard at 6.30am. They are then driven in, or drive, a company vehicle to the relevant building site to undertake their day’s work. At the end of the day’s job, the employees are then driven, or drive, back to the DMG yard, where they are provided with on additional 15 minutes to shower. Employees are paid overtime from 3pm until they leave the DMG yard.

[9] Thirty witness statements have been submitted in relation to the substantive issue for determination, ie, whether having trailer pump crew employees start and finish at the DMG yard was a term of the contracts of employment for these employees.

[10] DMG have raised a threshold jurisdictional issue in relation to this matter. As a result of a telephone Directions Hearing on 27 May 2016, I have decided to deal with this issue at first instance.

Submissions

[11] DMG argued that the terms of the Agreement “override” any actual or perceived contractual obligation on the basis that Clause 8 of the Agreement states that the Agreement provides all terms of the employment relationship.

“8. NO EXTRA CLAIMS

It is a term of this Agreement that the Company, Employees and the Union signatory to this Agreement must not pursue any further claims during its period of operation in regard to any matters contained within this Agreement. This Agreement is exhaustive of all terms and conditions of the employment relationship except site specific conditions such as site allowances.”

(my emphasis)

[12] DMG submitted that Clause 25.1 of the Award allows DMG to determine the start and finish location of its employees.

“25. Fares and travel patterns allowance

25.1 Employees will start and cease work on the job at the usual commencing and finishing times within which ordinary hours may be worked, and will transfer from site to site as directed by the employer. Other than in the case of an employee directed by the employer to pick up and/or return other employees to their homes, time spent by an employee travelling from the employee’s home to the job and return outside ordinary hours will not be regarded as time worked. No travelling time payment is required except as provided for in clauses 21.1, 24.7, 25.5, 25.7 and 36.3. The fares and travel patterns allowance recognises travel patterns and costs peculiar to the industry, which include mobility in employment and the nature of employment on construction work.

25.9 Transfer during working hours
(a) An employee transferred from one site to another during working hours will be paid for the time occupied in travelling and, unless transported by the employer, must be paid reasonable cost of fares by the most convenient public transport between such sites.”

(my emphasis)

[13] DMG also submitted that Clause 25.1 of the Award allows DMG to not pay employees to travel to and from their residence to the work site. I note that all DMG employees, including trailer pump operators, currently receive the $40 per day fares and travel patterns allowance as per Clause 15 of the Agreement.

[14] DMG argued that the word “job” in the phrase “on the job” in Clause 25.1 of the Award is a noun (rather than an adjective as submitted by the CFMEU). DMG submitted that the job every morning for members of a trailer pump crew is to prepare the trailer pump for the day ahead. The trailer pump is located on the relevant building site – not in the DMG yard. DMG do not require any member of the trailer pump crews to undertake any work in the yard. The employees simply arrive at the yard and wait to be transported to the site.

[15] DMG referred me to the Federal Court decision in Master Builders Association of Victoria v. The Australian Buildings Construction Employees & Builders Labourers Federation 3where Evatt and Northrop JJ. held;

“21. The word “transport” is used in a clause which makes provision for the payment of a fares allowance. One of the expressed justifications for that payment is the travel patterns and costs peculiar to the industry. In that industry, the place of work varies from job to job, jobs vary in length and there is no permanent place of employment. It is the duty of the employee to report for work at the job site.”

[16] DMG tabled the decision 4 of Watson SDP in the FWC review of the Building and Construction Industry Modern Award. In response to an application by the Housing Industry Association and the Master Builders Association to limit the payment of the daily fares and travel patterns allowance, relevantly, His Honour found that;

“[243] It is immediately clear, that the variations sought are erroneously premised on the basis that the fares and travel patterns allowance is prescribed solely in compensation for travel costs.

[244] The misconceived basis of the fares and travel patterns allowance on which the MBA and HIA submissions are demonstrated on the face of clause 25.1, which requires employees to start and cease work on-site, without payment for travel except in the circumstances specified in clauses 21.1, 24.7, 25.5, 25.7 and 36.3. It then provides that the fares and travel patterns allowance recognises travel patterns and costs peculiar to the on-site building and construction industry, which include mobility in employment and the nature of employment on construction work. The two elements are related. As observed by the CFMEU, the provision has a long history, recounted up until 1979 by a Full Bench of the Commonwealth Conciliation and Arbitration Commission in an anomaly matter concerning The National Building Trades Construction Award 1975.205 The Full Bench approved an increase in the allowance, but noting that problems had arisen from misleading and changing titles to the
allowances, they did so on the basis that the title of the clause reflected the purpose of the allowance, renaming it “Compensation for travel patterns, mobility requirements of employees and the nature of employment in the construction work covered by this award”.

[246] The HIA and MBA proposition that the allowance is provided wholly in relation to travel expenses incurred by employees and should not be paid when the employer meets the costs of transport, ignores the history of clause 25.1, the basis of the fares and travel patterns allowance and the nature of the industry. Those elements of the HIA and MBA applications are dismissed.”

[17] DMG also took me to the Federal Court decision in Construction Forestry Mining and Energy Union (Construction & General Division) v The Master Builders* Group Training Scheme Inc 5where Besanko J made the following comments:

“35 First, cl 38.1 provides an indication of the purpose of the travel patterns allowance. It states that it is to be paid to employees:

‘…for travel patterns and costs peculiar to the industry which include mobility requirements on employees and the nature of employment on construction work.’

36 The nature of the building and construction industry is that a worker engaged in the industry is often required to travel to different sites to perform his employment duties. Unlike many other industries where a worker in the industry reports to the same place of employment every working day, a worker in the building and construction industry may be required to travel significant distances to his places of employment over a period of time.”

[18] DMG argued that if the FWC granted the Orders sought by the CFMEU, then such a decision would extinguish the rights held by DMG, ie, to direct employees to start on the relevant construction site, in accordance with the terms of the Agreement. DMG referred me to the decision of the Full Bench of the FWC in DL Employment Pty Ltd v Australian Manufacturing Workers' Union 6, where it was held:

“[42] The terms of the contract of employment may, of course, be affected in their operation by a statutory instrument such as an award or agreement made or approved under industrial legislation applying to the same employment. The contract of employment may provide for matters additional to and not inconsistent with such a statutory instrument, and in that circumstance the instrument and the contract may be said to co-exist, but where the contract contains provisions inconsistent with those in the instrument, the provisions in the instrument will apply by virtue of the statute which gives it effect, and the inconsistent provisions of the contract will be displaced in their operation and rendered inoperative.28 In the case of an enterprise agreement made and approved under the FW Act, the effect of s.50 of the FW Act is that a person bound by the enterprise agreement must not contravene any of its terms…

[50] The broad scope of s.172(1) - in particular paragraph (a) - is readily apparent…
A provision in an enterprise agreement to the effect that the rights and obligations of the employer and employees covered by the agreement are exhaustively stated in the agreement is therefore permissible under s.172(1). Whether such a provision would render inoperative a provision in a State law otherwise applicable to the relevant employment relationship would depend upon how s.29 of the FW Act applied in a
particular case. But in respect of the contract of employment, we consider that a provision of this nature would validly operate to displace any rights and obligations in the contract of employment inconsistent with or not contained in the enterprise agreement, with the possible exception of terms implied by law…”

[19] DMG argued that the CFMEU’s application to have trailer pump crew employees report only to the DMG yard constituted an “extra claim” and was therefore a breach of the “No Extra Claims” provision of the Agreement (Clause 8 – see above).

[20] In response to a question from me, DMG submitted that they have consulted in relation to this proposal since October 2015. DMG argued that they have satisfied the consultation provisions of the Agreement and that there is no cogent reason to delay the introduction of their decision, which was due to be implemented on 1 June 2016.

“31. CONSULTATION FOR PURPOSES OF s 205 of the FAIR WORK ACT 2009
31.1 Consultation regarding major workplace change

(a) Company to notify/discuss

(i) Where the Company is seriously considering, and prior to the taking of any definite decision on, the introduction of major workplace changes that are likely to have a significant effect on Employees, the Company must notify and consult with the Employees and their Union/s or other representative/s.
The Company must recognise the Union (or other representative appointed by an Employee) and consult in good faith in relation to such proposed changes, including by allowing entry to Company premises to assist with representing Employees in the consultations relating to the proposed workplace changes.
Provided however this clause must not be construed as providing any rights which are inconsistent with s 194( f) or (g) of the FW Act.

(ii) Significant effects include termination of employment; major changes in the composition, operation or size of the Company's workforce or in the skills required; the elimination or diminution of job opportunities, promotion opportunities or job tenure; the alteration of hours of work; the need for retraining or transfer of Employees to other work or locations; and the restructuring of jobs. Provided that where this Agreement makes provision for alteration of any of these matters an alteration is deemed not to have significant effect.

(b) Company to discuss change

(i) The Company must notify/discuss with the Employees affected and their Union/s or other representative/s the effects the changes are likely to have on Employees and measures to avert or mitigate the adverse effects of such changes on Employees and must give prompt consideration to matters raised by the Employees and their Union/s or other representative/s in relation to the changes.

(ii) The discussions must commence as early as practicable and prior to a definite decision being made by the Company to make the changes referred to in clause 34.1(a).

(iii) For the purposes of such discussion, the Company must provide in writing to the Employees concerned and their Union/s or other representative/s all relevant information about the changes including the nature of the changes proposed, the expected effects of the changes on Employees and any other matters likely to affect Employees.”

[21] The CFMEU argued that the employees were all told at the time of their respective interviews and appointment that they would start and finish at the DMG yard at Homebush Bay and that, as a result of this direction, this practice became a part of the employees’ contract of employment.

[22] The CFMEU submitted that DMG has determined that the place where work started and finished was the yard. The CFMEU claimed that the plain and ordinary meaning of the Agreement makes it clear that starting “on the job” is different to starting “on site”. For the clause to be logical, it was submitted that starting and finishing at the Yard was an explicit term of each employee’s contract of employment.

[23] The CFMEU argued that this proposal by DMG was an extra claim and in breach of Clause 8 of the Agreement (see above).

[24] The CFMEU argued that this matter turns on the meaning given to the term “on the job” in Clause 25.1 of the Agreement. The CFMEU submitted that if this phrase means “on the construction site” then their argument falls away in accordance with the relevant precedents identified by DMG.

[25] However, the CFMEU submitted that such a definition would be irrational. The Union encouraged the FWC to look at the plain and ordinary meaning of the words and to look at the context and manner in which they have been applied.

[26] The CFMEU referred me to the decision of Flick J, in The Australian Workers’ Union v Cleanevent Australia Pty Ltd 7;

“[31] Counsel for the applicant contended that the past conduct of the parties could be relied upon as an aid in the construction of the Certified Agreement. There is authority that, if a provision has appeared in a series of agreements between the same parties, and if they can be shown to have conducted themselves according to a common understanding of the meaning of that provision, then it can be taken that they have agreed that the term should continue to have the commonly understood meaning in the current agreement…”

[27] The CFMEU submitted that these employees had been traveling to the DMG yard, every day, for many years and that this conduct showed that the parties interpreted Clause 25.1 to mean that the yard is their job location for the purposes of Clause 25.1.

[28] The CFMEU highlighted the quote from French J in City of Wanneroo v Australian Municipal, Administrative, Clerical and Services Union 8which was supported by Justice Flick in Cleanevent;

“[57] It is of course necessary, in the construction of an award, to remember, as a contextual consideration, that it is an award under consideration. Its words must not be interpreted in a vacuum divorced from industrial realities.”

[29] The CFMEU identified the various clauses in the Award which mention the term “site”, such as the definition of “air conditioning work means the on-site fabrication and/or installation of air conditioning” and “refrigeration work means the installation, servicing or repairing of refrigeration plant and equipment and/or ancillary components and equipment on a construction site.” The CFMEU submitted that there was no correlation between the terms “site” and “on the job” in the Award. On this basis, it was submitted, the only logical conclusion was to determine that the two phrases have different meanings.

[30] The CFMEU made submissions in relation to the beneficial aspects of maintaining the status quo via an Interim Order whilst a final determination is considered. DMG resolved this issue by advising that they were prepared to delay the implementation of their proposal until either the date of this decision or 13 June 2016.

Consideration

[31] I have taken into account all of the submissions that have been made by the parties in relation to this threshold issue.

[32] I have taken into account the long history of the fares and travel patterns allowance. I note that in 1979, a Full Bench of the Conciliation and Arbitration Commission approved an increase in the allowance on the basis that it was “compensation for travel patterns, mobility requirements of employees and the nature of the employment in the construction work covered by this award.”

[33] From my earlier working experience, I know that the work in the construction industry is often described as being itinerant. Employees could be required to move from site to site on a project, monthly, weekly, daily or even hourly basis. Construction employees do not normally have a fixed depot or yard. Their workplace is the building site to which they have been sent by their employer. Employees in the metal and manufacturing industries, for example who traditionally work in a workshop or depot in a fixed location, do not receive a fares and travel allowance to go to work. I have taken this into account.

[34] A Full Bench of the FWC in The Australasian Meat Industry Employees Union v Golden Cockerel Pty Limited 9provided a useful summary in relation to the legal precedent to be followed when interpreting industrial agreements:

“[41] From the foregoing, the following principles may be distilled:

1. The AI Act does not apply to the construction of an enterprise agreement made under the Act.

2. In construing an enterprise agreement it is first necessary to determine whether an agreement has a plain meaning or contains an ambiguity.

3. Regard may be had to evidence of surrounding circumstances to assist in determining whether an ambiguity exists.

4. If the agreement has a plain meaning, evidence of the surrounding circumstances will not be admitted to contradict the plain language of the agreement.

5. If the language of the agreement is ambiguous or susceptible to more than one meaning then evidence of the surrounding circumstance will be admissible to aide the interpretation of the agreement.

6. Admissible evidence of the surrounding circumstances is evidence of the objective framework of fact and will include:

(a) evidence of prior negotiations to the extent that the negotiations tend to establish objective background facts known to all parties and the subject matter of the agreement;

(b) notorious facts of which knowledge is to be presumed;

(c) evidence of matters in common contemplation and constituting a common
assumption.

7. The resolution of a disputed construction of an agreement will turn on the language of the Agreement understood having regard to its context and purpose.

8. Context might appear from:

(a) the text of the agreement viewed as a whole;

(b) the disputed provision’s place and arrangement in the agreement;

(c) the legislative context under which the agreement was made and in which it operates.

9. Where the common intention of the parties is sought to be identified, regard is not to be had to the subjective intentions or expectations of the parties. A common intention is identified objectively, that is by reference to that which a reasonable person would understand by the language the parties have used to express their agreement.

10. The task of interpreting an agreement does not involve rewriting the agreement to achieve what might be regarded as a fair or just outcome. The task is always one of interpreting the agreement produced by parties.”

[35] The decision of Flick J in Cleanevent supports these rules. I have taken this into account.

[36] I have taken into account the provisions of the Award and the issues associated with the use of specific words in different clauses. I note that the premises of an employer has been described as an employer’s business or branch (Clause 25.4(a)), an employer’s establishment (Clause 25.4(b)) and employers premises (Clause 36.3).

[37] I have taken into account the decision of the Full Bench of the FWC in DL Employment Pty Ltd v Australian Manufacturing Workers’ Union. This decision provides definitive clarity in relation to the applicability of a term of a contract of employment which is contrary to a provision of the relevant industrial instrument.

[38] I have taken into account the decision of a Full Bench of the Australian Industrial Relations Commission in Re Rubber, Plastic & Cable Making Industry (Consolidated) Award 1983 10, where it was held:

“The reference to ‘the job’ is primarily a reference to the physical and mental tasks carried out for the employer, but aspects of the work, including location of the work, are not excluded from consideration as elements of the job. In a different statutory context there is a somewhat similar usage of the term under the United Kingdom Employment Protection (Consolidation) Act 1978 under which written particulars must be supplied to employees of the terms of employment, including “the title of the job which the employee is employed to do”. There “job means the nature of the work which the employee is employed to do in accordance with his contract and the capacity and place in which he is so employed.”

[39] I have taken into account the statement of French J (as he then was) in Wanneroo that the words of an award must not be interpreted in a vacuum divorced from industrial realities.

[40] I have taken into account the long standing custom and practice of trailer pump employees starting and finishing at the yard. However, I am not convinced that this practice necessary leads me to a conclusion that this practice was the result of a commonly understood interpretation of the Award clause. Such an outcome may have been borne out of the need for flexibility and training with the mobile plant crews, who continue to start and finish at the yard, or for a plethora of other reasons, including goodwill.

Determination

[41] I do not agree with the submission that the phrase “on the job” renders the term “job” as an adjective. For example, “on the job training” can be defined as the competency obtainment component of training compared to the theoretical training undertaken in a TAFE College or private training provider. I agree with the submission of DMG that the term “job” in clause 25.1 is a noun.

[42] I do not find any ambiguity in the wording of Clause 25.1. The phrase “on the job”adequately describes the place or location where an employee is required to utilise their skills and competencies. It is not possible to utilise these skills and competencies at a location where no work is required to be performed. DMG have categorically stated that they do not want these employees to perform any work in the yard. I find the phrase “on the job” refers to a building site.

[43] The phrase “and will transfer from site to site” in Clause 25.1 reflects the itinerant nature of the building and construction industry. This industry characteristic and requirement has been one of the factors which proved to be the genesis for the fares and travel patterns allowance. The transfer from site to site during a shift is regulated by Clause 25.9 of the Award. The transfer identified in Clause 25.1 relates to the capacity of the employer to move their employees around on an “as needs” basis. One day they may be on a site next door to their residence, the next day on a site 20km away. Such a scenario is the industrial reality of the itinerant nature of the industry.

[44] I accept the argument and find that, in accordance with the Full Bench decision in DLE, the incorporation of the Award provisions into the Agreement, extinguishes any contractual right which may have existed from a contract of employment. The exhaustive nature of this exercise renders any notion pertaining to any contrary provision in a contract of employment null and void.

[45] If I am wrong in relation to my interpretation of Clause 25.1 of the Award, I find that DMG has consulted in accordance with Clause 31 of the Agreement. I do not accept the submissions of the CFMEU that DMG has not consulted appropriately. Numerous compromises were submitted by DMH in an attempt to resolve this dispute. I note that DMG first floated this proposal in October 2015.

[46] I accept that DMG’s proposition will have a significant change on a small number of employees employed by DMG in their trailer pump crew. Likewise, the benefit associated with this proposal, ie, a net saving of $300,000 by DMG, in a highly competitive and difficult market, is an efficiency and productivity improvement that is envisaged by the Agreement and the Act. It is why a consultation provision is a mandatory provision of every Enterprise Agreement.

[47] For the reasons mentioned, I find that the proposal requiring trailer pump crew employees of DMG, to start and finish on the site to which they have been directed to work, to be in accordance with the Agreement. I remind DMG of the need to ensure compliance with the provisions of the NSW Work Health and Safety Act, 2011, especially in relation to the provision of appropriate bathroom facilities.

[48] The application is dismissed.

COMMISSIONER

 1   [2015] FWCA 2186

 2   [MA000020]

 3 [1981] FCA 58

 4   [2013] FWC 4576

 5 [2007] FCA 435

 6   [2014] FWCFB 7946

 7 [2015] FCA 1477

 8 [2006] FCA 813 at [57]

 9   [2014] FWCFB 7447

 10 (1989) AIRC 528

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