Construction, Forestry, Mining and Energy Union v Leighton Contractors Pty Ltd

[2012] FWA 9896

[2012] FWA 9896

FAIR WORK AUSTRALIA

DECISION

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

Construction, Forestry, Mining and Energy Union
v
Leighton Contractors Pty Ltd
(C2012/1223)

Coal industry
SENIOR DEPUTY PRESIDENT HAMBERGER	SYDNEY, 26 NOVEMBER 2012

Application to deal with a dispute in accordance with a dispute settlement procedure; right of employer to direct employees to take annual leave during a shutdown.

[1] This is an edited version of a decision given ex tempore on Thursday, 22 November 2012. It concerns an application by the Construction, Forestry, Mining and Energy Union (CFMEU, the applicant) in relation to a dispute under the terms of the Leighton Duralie Enterprise Agreement 2011 (the enterprise agreement). According to the application, Leighton Contractors Pty Ltd (the respondent) informed employees covered by the enterprise agreement that they intend to shut the operation down for the period 17 December 2012 to 6 January 2013 and informed the employees that they are required to take annual leave. The applicant contends that this is not open to the respondent under the enterprise agreement.

[2] The issue to be determined is whether the respondent has the right to direct its employees to take annual leave during a period of shutdown.

[3] The dispute failed to settle at conciliation and was referred to me for determination. Written submissions and statements were filed and a hearing held in Sydney on 22 November 2012.

[4] The enterprise agreement came into effect on 28 April 2011 and is within its nominal term. It contains a dispute settlement procedure that enables Fair Work Australia (FWA) to arbitrate unresolved disputes and make a determination that is binding on the parties. The procedure is to be used in relation to disputes arising out of the interpretation of the enterprise agreement, or over the NES, or in the course of employment generally. The current dispute clearly falls within FWA's arbitral jurisdiction.

Consideration

[5] Prior to the enterprise agreement, the parties were covered by the HWE Mining Gloucester Coal Workplace Agreement 2008 (the former agreement). The former agreement, at Clause 34, provided that:

‘The Company may at its discretion declare either a partial or total shutdown of operations. Where the employer exercises this discretion the employer may direct an employee to take paid leave. The employer will give employees four weeks’ notice of a shutdown. Leave taken shall be paid in accordance with the employees leave accrual, if available, however, if no leave (is) available employees will be stood down on leave without pay.’

[6] The enterprise agreement does not contain a similar clause. However the former agreement was a stand-alone workplace agreement which replaced in its entirety all awards and agreements applying to the parties, including the then parent award - the Coal Mining (Production & Engineering) Consolidated Award 1997.

[7] The current agreement by contrast is not a stand-alone agreement. It contains the following clause:

‘4.1 This Agreement shall be read and interpreted in conjunction with the Award at the time of approval of the Agreement. In the event of any inconsistency or difference between the Award and the Agreement, the terms of the Agreement shall prevail.’

[8] Similar clauses to this are quite common in enterprise agreements and have a well understood meaning. In this case I am satisfied that Clause 4.1 of the enterprise agreement means that all the provisions of the Award apply to the employees - unless there is a provision in the agreement that is inconsistent, in which case the terms of the agreement apply. I do not accept the applicant’s contention that clause 4.1 is just a statement of fact that one needs to look at the Award in relation to certain conditions referred to in other parts of the agreement and does not in itself incorporate any of the terms of the award into the agreement. The applicant’s contention is inconsistent with the plain meaning of Clause 4.1 and would render nonsensical the second sentence of the clause - that in the event of any inconsistency or difference between the award and the agreement, the terms of the agreement shall prevail. Moreover, the clause clearly has application to the agreement as a whole - it does not only apply where there is a further specific reference to the award. It follows that the clauses in the award apply to the employees, unless there is a clause in the agreement that is inconsistent or different.

[9] The Award in question is the Black Coal Mining Industry Award 2010. That award, at clause 24.4 (c) provides that the employer may direct an employee to take all or part of an annual leave entitlement, provided at least 28 days’ notice in writing is given to the employee. Clause 24.10 under the heading ‘Shutdown’ further provides as follows:

‘(a) An employer that shuts down all or any part of its operation must give employees at least 28 days’ notice of the shutdown or such shorter period as agreed between the employer and the employees affected.

(b) Employees directly affected by the shutdown who have an entitlement to annual leave may take all or part of that entitlement during the shutdown period.

(c) Employees who are directly affected by the shutdown and who are not yet entitled to sufficient annual leave, may, during the shutdown period, take any annual leave accrued in accordance with clause 24.9.’

[10] These provisions, in combination, permit an employer to direct an employee to take annual leave, including as part of a shut down, as long as sufficient notice has been given - as is the case with regard to the current matter.

[11] As previously noted, the current agreement does not contain a shutdown provision. While it contains a provision about annual leave, I can find nothing in that clause to suggest that it ‘covers the field’ when it comes to the issue of annual leave. Moreover the provisions of agreement clause about annual leave can be applied quite consistently with the respondent having the right to direct its employees to take annual leave as part of a shutdown. Accordingly, I find that the provisions of the award relating to directions to take annual leave and shutdowns have application to the employees covered by the agreement.

[12] Consistent with Codelfa 1, I have not based my interpretation of the agreement on evidence given during the hearing about the parties’ intentions, as revealed during the negotiation process. However even were I to have taken into account that evidence, it would not have altered my conclusion. It appears that the only discussions that took place during the negotiations for the current agreement on the issue of shutdown concerned a claim put forward by the applicant for the respondent to agree to an annual mandatory shutdown of the operation from 24 December to 2 January. This claim was rejected by the respondent. This is not consistent with the proposition that the current agreement was intended to remove the previously existing right of the respondent to have an annual shut-down. Rather, I am satisfied that the reason the shutdown provision was removed from the agreement was that it was unnecessary to include such a provision as this matter was already covered by the award - and in contrast to the former agreement - the award provisions could operate side by side with the agreement.

[13] In conclusion, I am satisfied that Leighton Contractors Pty Ltd (the respondent) has the right under the terms of the enterprise agreement to direct its employees to take annual leave during a period of shutdown.

SENIOR DEPUTY PRESIDENT

Appearances:

K. Endacott for the Construction, Forestry, Mining and Energy Union.

M. Moy for Leighton Contractors Pty Ltd

Hearing Details:

2012

Sydney:

November 22.

 1   Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337

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