Construction, Forestry, Mining and Energy Union v Huhtamaki Australia Pty Ltd

[2019] FWC 770

[2019] FWC 770

FAIR WORK COMMISSION

DECISION

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

Construction, Forestry, Mining and Energy Union
v
Huhtamaki Australia Pty Ltd
(C2017/2331)

Timber and paper products industry
COMMISSIONER CIRKOVIC	MELBOURNE, 11 FEBRUARY 2019

Application to deal with a dispute – interpretation of agreement

Introduction

[1] This decision involves an application brought by the Construction, Forestry, Mining and Energy Union (“the Applicant”) under section 739 of the Fair Work Act 2009 (“the Act”). The Respondent is Huhtamaki Australia Pty Ltd (“the Respondent”).

[2] The parties are covered by the Huhtamaki Australia Pty Ltd, Moulded Fibre Division Preston Plant Enterprise Agreement 2017 (“the Agreement”). The Agreement was approved by the Fair Work Commission (“the Commission”) on 21 September 2017. It has a nominal expiry date of 10 May 2020.

Background

[3] The matter has a lengthy procedural history.

[4] The Applicant filed the application on 2 May 2017. Despite several conferences, the matter was not resolved and the Applicant sought to have its application proceed to arbitration. The parties agreed to have the matter decided “on the papers” and by reference to agreed facts. 1

[5] It is common ground, and I agree, that the Commission is authorised by the terms of the Agreement to arbitrate the dispute.

Issues in Dispute

[6] The facts of this matter are not contentious. The Respondent is a producer of paper products and the Agreement covers employees of its plant in Preston, Victoria. The “Union” to which the Agreement refers is the Applicant.

[7] The parties jointly submitted the following questions for arbitration:

“QUESTIONS FOR ARBITRATION

(1) Concerning the operation of clause 25.2 of the [Agreement], is the Union’s agreement required for roster arrangement?

(2) Is the roster currently in operation at Huhtamaki Australia Pty Ltd’s Preston Plant consistent with the terms of the Agreement at cl 25.2.

NOTE: In the event that answer to question 2 is ‘no’, the parties intend to make submissions as to the appropriate orders to be made, and jurisdiction of the Commission to make such orders, if any.” 2

[8] The parties provided a brief statement of agreed facts, as follows:

“(1) Huhtamaki Australia Pty Ltd (“Huthamaki”)[sic] employs shiftworkers at Huhtamaki’s Preston facility who perform work within the ambit of the scope provisions of the [Agreement]

(2) In about May 2017 the roster for production shiftworkers at the site was varied.

(3) The union did not and does not agree with roster as varied.”

[9] It is common ground that in or about May 2017, the Respondent gave notice to affected employees of an intention to alter roster arrangements. The details of the roster arrangements in place prior to May 2017 and the subsequent changes have not been presented in evidence in this matter, nor have the parties referred to the arrangements in any detail in any of their respective submissions.

Principles of Interpretation of Enterprise Agreements

[10] The parties agree that the principles that apply to the interpretation of enterprise agreements are settled.

[11] The principles to be applied to the interpretation of enterprise agreements were detailed by the Full Bench of the Commission in The Australian Meat Industry Employees Union v Golden Cockerel Pty Ltd (“Golden Cockerel”).³ The summary of the applicable principles set out in Golden Cockerel was modified in Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union’ known as the Australian Manufacturing Workers Union (AMWU) v Berri Pty Limited (“Berri”). 4

[12] Both parties sought to rely on these principles to advance their case in their submissions. I adopt and apply the principles in Berri in this decision without restating them.

Submissions

[13] In support of their respective positions, both parties submitted that clause 25.2 contains two parts, separated by “and”, with each part having different effects. Those two parts are as follows:

•  “The thirty-five average ordinary hours for such shift workers will be fixed by agreement between the company and the Union" (“Part One”); and

•  “may be determined in accordance with a roster arrangement which provides for the average of thirty-five hours to be calculated over a number of weeks” (“Part Two”).

[14] Both parties submit that Clause 25.2 is unambiguous in its plain meaning, however, disagree as to that meaning.

The Applicant’s Submissions

[15] The Applicant submits that:

● Part One constrains the circumstances in which a roster arrangement may operate, in particular that a roster arrangement must be agreed between the company and union; 5

● Part Two facilitates the averaging of the ordinary-hours over multiple weeks, and that this mechanism is not relevant;  6

● no ambiguity arises as to the textual meaning of Part One and Part Two; 7 and

● as the Applicant did not agree to the Respondent’s unilateral roster “variation”, the roster arrangement is not compliant with the Agreement, meaning that the answer to question (1) is yes and the answer to question (2) is no. 8

The Respondent’s Submissions

[16] The Respondent submits that:

● Part One is only concerned with fixing the quantum of working hours to an average of thirty-five; 9

● as Part One does not contain any reference to a “roster”, the Applicant’s submission that it constrains the circumstances in which a roster arrangement may operate is a “fiction”; 10

● The phrase “will be fixed” means “will be fastened securely in its position” in accordance with the Oxford Dictionary definition of the word “fixed” 11

● The phrase “may be determined” in Part Two stands in contrast to the phrase “will be fixed”; 12

● Part Two does not require such determination to be “by agreement”, again, in contrast with Part One; 13 and

● therefore, the only agreement required of the Applicant was in establishing the quantum of average working hours. 14

[17] In support of its position, the Respondent refers to the context of clause 25.2 within the Agreement and the historical circumstances of the Agreement, particularly its past iterations and the meaning and operation of those past agreements in the context of the contemporary statutory award scheme.

[18] In relation to context, the Respondent relies on clauses 54, 23.4, and 23.5 of the Agreement. Clause 54, in summary, provides that the Respondent is to consult with the Applicant and any affected employees in relation to decisions effecting ‘major workplace changes’. 15 The Respondent particularly points to clause 54.9, which is as follows:

“Where the employer proposes to change an employee’s regular roster or ordinary hours of work, the employer must consult with the employee or employees affected and the Union or any other employee representatives, if any, about the proposed change.” 16

[19] The Respondent also points to clauses 23.4 and 23.5, which appear under the heading “Shiftwork”, and respectively provide that an employee “may be transferred from day work to shift work” or “may be required to change from one shift to another, or from shift work to day work”, with reference being made to overtime compensation and notice requirements but no reference to a requirement of “agreement”. 17

[20] The Respondent submits that these clauses indicate that working and roster arrangements are “not fixed in place, but may be changed, specifically at the direction of the employer and in the case of clause 54 with consultation, but not the agreement of the affected employees and the [Applicant]”. 18

[21] The Respondent relies on the history of the Agreement to support its interpretation in resolving any ambiguity. Its submissions in this regard are summarized below:

•  The Agreement’s origins can be traced at least to the Van Leer Food Packaging Dvision Preston Plant (Enterprise Agreement 1995 – 22 August 1995) (“the 1995 Agreement”). 19

•  The equivalent provision of the 1995 Agreement to clause 25.2 of the instant Agreement, clause 20.1, reads identically save for the added underlined emphases, as follows:

○ ‘The thirty-five average ordinary hours for such shift workers will be fixed in each workplace by agreement between the company and the relevant Unions and may be determined in accordance with a roster arrangement which provides for the average of thirty-five hours to be calculated over a number of weeks’. 20

•  The “sole role” of the clause in the 1995 Agreement was to override the forty ordinary hours prescribed by the Pulp and Paper Industry (Production) Award 1973 (“the 1973 Award”), where agreed according to the clause. 21

•  The underlined phrases above were removed such that clauses identical to clause 25.2 of the Agreement were included in subsequent enterprise agreements in 2000, 2005, 2010 and 2011. 22

[22] The Respondent submits that question (1) should be answered in the negative and question (2) should be answered in the affirmative. 23

Consideration

[23] In accordance with the principles earlier stated, the construction of the Agreement begins with a consideration of the ordinary meaning of the relevant words. Context may appear from the text of the Agreement viewed as a whole, or the place and arrangement of the clause in the Agreement. The statutory framework under which the Agreement was made and in which it operates may also provide context.

[24] Clauses 23 to 25 of the Agreement relevantly provide:

23. SHIFT WORK

23.1 Definitions:

• "Day Shift" means any shift commencing not earlier than 6.00 am and finishing not later than 6.00 pm.

•"Afternoon Shift" means any shift finishing after 6.00 pm and not later than

Midnight.

• "Night Shift" means any shift finishing after midnight and not later than 8.00 a.m.

• "Continuous Work" means work carried on with consecutive shifts throughout the 24 hours of each day of the week on a roster arrangement which requires employees to work on any day of the week including Saturdays, Sundays and Public Holidays without interruption except during meal breaks, breakdowns, general overhaul or stoppages due to causes beyond the control of the company.

• A "Shift Worker" is an employee who is engaged in work which is carried on for two or more shifts during five, or more days per week, or one who works any day, afternoon or night shift as described herein.

23.2 Subject to section 62 subsections 2 and 3 of the Fair Work Act, shift workers recognise their obligations to continue at work until relieved; provided that they are not required to work more than two consecutive shifts. The company shall avoid double shifts as far as possible by using every endeavour to arrange reliefs, and shall limit the number of double shifts worked by an employee to one in any week except in unavoidable circumstances. Shift workers recognise their obligation to notify impending absence from work to avoid double shifts or other overtime caused by the failure to relieve workmates, where practicable to notify the company a minimum of 2 hours prior to the start of their shift if unable to report to duty as rostered.

23.3 Shift allowances per week shall be paid in accordance with Schedule A. The

percentage wage increases as nominated in clause 20.3.1, 20.3.2 and 20.3.3 shall be

applied to all shift allowance. The above allowances shall be calculated to the nearest 5 cents and shall be adjusted with Agreement wage rate increases.

23.4 An employee may be transferred from day work to shift work, and in such cases shall be paid at the appropriate overtime rate for day workers for all time worked outside the ordinary day worker's hours:

23.4.1 Until the expiration of seven days from the employees receipt of notification of such transfer; and

23.4.2 On any afternoon or night shift which does not continue for at least five

consecutive afternoons and nights; and such time shall be counted in the computation of the ordinary working hours for the purposes of clause 24.1 of this Agreement.

23.5 An employee may be required to change from one shift to another, or from shift work to day work, provided that:

23.5.1 The employee shall be given at least forty-eight hours' notice of such change, or shall be paid at the rate of double time for all ordinary time worked after such change until the expiration of forty-eight hours' notice.

23.5.2 Where such change requires that the employee shall work on a day which otherwise would have been a rostered day off, the employee shall be paid at the rate of double time for all time worked on that day unless the employee has received at least fourteen days' notice of such requirement.

23.5.4 Paragraph 23.5.1 shall not apply to changes from day shift to day work, which

may be made without penalty.

24. HOURS OF WORK – DAYWORKERS

24.1 The average ordinary hours of work for day workers shall be thirty-five per week between 6.00 am and 6.00 pm Monday to Friday inclusive, provided that the spread of hours herein prescribed, and the meal breaks, may be altered by agreement between the company and the Union signatory to the Agreement.

24.2 The thirty-five average ordinary hours per week for day workers will be fixed by agreement between the company and the Union and may be determined in accordance with a roster arrangement which provides for the average of thirty-five hours to be calculated over a number of weeks.

25. HOURS OF WORK – SHIFTWORKERS

25.1 The average ordinary hours of work for shift workers employed on:

• a permanent shift.

• alternating day and afternoon shifts for five consecutive days per week.

• three shifts per day for five consecutive days per week.

shall not exceed an average of thirty-five per week.

25.2 The thirty-five average ordinary hours for such shift workers will be fixed by agreement between the company and the Union and may be determined in accordance with a roster arrangement which provides for the average of thirty-five hours to be calculated over a number of weeks.

25.3 Each shift shall consist of no more than ten hours inclusive of crib time. Provided that:

25.3.1 In any arrangement of ordinary working hours where ordinary working hours are to exceed eight on any shift the arrangement of hours shall be subject to agreement between the company, the Union and the majority of employees in the plant or section concerned; and

25.3.2 By agreement of employees in the plant, work section or sections concerned, ordinary hours not exceeding twelve on any day may be worked subject to:

• Proper health monitoring procedures being introduced;

• Suitable roster arrangement being made; and

• proper supervision being provided.

[25] The first question to which the parties seek an answer is whether clause 25 .2 requires union agreement for roster arrangement. For the reasons that follow, the answer is yes.

[26] I reject the Respondent’s submission that the phrase ‘will be fixed’ has no greater work to do other than to ‘secure’ the quantum of hours. That construction is not supported by an ordinary reading of the whole clause, and reading clause 25.2 within the context of the other sub-clauses of clause 25.

[27] Clause 25 purports to regulate hours of work for shift workers as indicated by the heading of the clause. Clause 25.1 establishes that ordinary hours of shift workers within the three listed structures “… shall not exceed an average of 35 per week”. T therefore determines at least, a maximum quantum of ordinary working hours. Any doubt as to whether the maximum is all that is determined by clause 25 is defeated by then reading clause 25.2, which begins with “the thirty-five average ordinary hours for such shift workers” (underline emphasis added). The definite article “the” indicates that the quantum of hours to be worked by shift workers has already been specifically set at thirty-five, irrespective of any further agreement between the company and union. It is in my view incompatible with a plain reading of the clause to suggest, as the Respondent does, that further agreement would be required to ‘fix’ the quantum of hours at thirty-five, where the Agreement includes express, repeated reference to ‘the’ average ordinary working hours being thirty-five.

[28] Clause 25.3 prescribes that parties must agree where shifts exceed particular lengths. It is clear that clause 25, read as a whole, determines the quantum of working hours for shift workers, and expressly contemplates that shift-workers will work an average of thirty-five hours per week, with further agreement required in certain circumstances as to the division or structuring of those hours. 24

[29] In my view, the linking of Part One and Part Two of clause 25.2 by the word “and” means that the Parts operate together, such that the company and union must agree as to the determination of a roster arrangement.

[30] The Respondent points to other provisions in the Agreement, which I have taken into account and considered in coming to my conclusion.

[31] I am not persuaded by the Respondent’s submission that requirements to consult employees, or discretionary powers to allocate employees to different shifts, are inconsistent with or cannot coexist with a requirement that the company agree with the union as to the determination of a roster arrangement. 25 The Agreement clearly requires that the parties reach agreement in relation to some, but not all circumstances involving employee shifts. One of these circumstances is the determination of a roster arrangement. Therefore it is not necessary to read-down clause 25.2 in the manner sought by the Respondent.

[32] In relation to the historical lineage of clause 25.2, reference to its forebear in clause 20.1 of the 1995 Agreement does not favour the Respondent’s submission. It is doubtful that the “sole role” of the phrase was to override the forty hours prescribed by the 1973 Award, 26 because the immediately preceding phrase is expressed in the same manner as clause 25.1 of the Agreement. I have already found at paragraph [27] above that phrase to be determinative of the quantum of working hours. Further, the phrase “in each workplace” does not appear in clause 25.2 of the Agreement.27 In any case, my task is to construe clause 25.2 of the Agreement, not clause 20.1 of the 1995 Agreement. And ultimately, I am not persuaded that reference to clause 20.1 of the 1995 Agreement resolves any ambiguity in clause 25.2 in favour of the Respondent.

[33] To adopt the meaning sought by the Respondent would in my view involve some straining on the ordinary meaning of the words and is devoid of contextual meaning gleaned from the agreement in totality.

[34] The Applicant contends that, in circumstances where the answer to question 1 is in the affirmative, it follows that the answer to question 2 is no. I agree. In coming to this conclusion I note that the roster arrangement in question was not put before me, and therefore I only find that the roster arrangement is incompliant with the Agreement in that the Applicant did not agree to the determination of its current iteration. 28 I do not make any findings about the roster arrangement otherwise.

[35] Directions will be issued as to the orders sought and jurisdiction of the Commission to make any such orders.

COMMISSIONER

Final written submissions:

Applicant’s Reply Submissions on Questions 1 & 2, filed 21 December 2018

Respondent’s Outline of Submissions, filed 14 December 2018

Applicant’s Submissions on Questions 1 & 2, filed 3 December 2018

Printed by authority of the Commonwealth Government Printer

<PR704689>

 1   Applicant’s Submissions on Questions 1 & 2 filed 3 December 2018 at [2]; Agreed facts, filed 23 November 2018.

 2   Questions for Arbitration, filed 23 November 2018.

3 The Australian Meat Industry Employees Union v Golden Cockerel Pty Ltd[2014] FWCFB 7447, [19]–[40].

 4   [2017] FWCFB 3005.

 5   Applicant’s Submissions on Questions 1 & 2 [9](a).

 6   Ibid [9](b).

 7 Ibid [10].

 8   Ibid [11]-[15].

 9   Respondent’s Outline of Submissions [16], [22].

 10 Ibid [33].

 11   Ibid [17]-[22].

 12   Ibid [23]-[25].

 13 Ibid [26].

 14 Ibid [27].

 15   Ibid [60]-[61].

 16 Ibid [60].

 17   Ibid [62]-[63].

 18 Ibid [64].

 19   Ibid [44]-[45].

 20 Ibid [51].

 21   Ibid [53]-[54].

 22   Ibid [57]- [58].

 23   Ibid [65]-[71].

 24   see Agreement clause 25.3.

 25   see Applicant’s Reply Submissions on Questions 1 & 2 [23]-[24], [27].

 26   see Respondent’s Outline of Submissions [53]-[54].

 27 see Applicant’s Reply Submissions on Questions 1 & 2 [18].

 28   Agreed facts, filed 23 November 2018.