Construction, Forestry, Mining and Energy Union v Thiess Pty Ltd

[2015] FWC 2055

[2015] FWC 2055

The attached document replaces the document previously issued with the above code on 7 April 2015.

Typographical errors in paragraphs [19], [66] and [76] have been corrected.

Edrea Tio

Associate to Senior Deputy President Harrison

Dated 20 April 2015.

[2015] FWC 2055  [Note: Appeals pursuant to s.604 (C2015/3720,C2015/3780,C2015/3781,C2015/3849) were lodged against this decision - refer to Full Bench decision dated 2 October 2015 [[2015] FWCFB 5530] for result of appeal.]

FAIR WORK COMMISSION

DECISION

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

Construction, Forestry, Mining and Energy Union
v
Thiess Pty Ltd; Mt Owen Pty Ltd
(C2013/578, C2013/579)

SENIOR DEPUTY PRESIDENT HARRISON SYDNEY, 7 APRIL 2015

Dispute about matters arising under an enterprise agreement - protected industrial action - whether the employers were required to pay wages and an allowance in respect of periods during which action was taken - construction of the terms of the enterprise agreement - s.470 of the Act.

[1] This decision concerns two applications made by the Construction, Forestry, Mining & Energy Union (the CFMEU) pursuant to s.739 of the Fair Work Act 2009 (the Act)for the Fair Work Commission (the Commission) to deal with a dispute in accordance with the dispute settlement procedure in an enterprise agreement. The agreement is called the Mt Owen Mine Enterprise Agreement 2010 1 (the Agreement). The CFMEU is covered by the Agreement.

The first application is a dispute between the CFMEU and Thiess Pty Ltd (Thiess) and the second is a dispute between the CFMEU and Mt Owen Pty Ltd (Mt Owen). Both Thiess and Mt Owen are covered by the Agreement. Each dispute concerns employees of these two employers who work at the Mt Owen Coal Mine (the mine).The mine is located in the Hunter Valley, in the state of New South Wales.

In summary, the disputes concern whether payments of salary and an allowance should be made by the employers in respect to certain periods of protected industrial action. The arbitration of the disputes necessitates the finding of facts in respect of a number of days when protected industrial action was taken at the mine, the interpretation of a number of provisions of the Agreement and consideration of the terms of s.470 of the Act.

There are two aspects to the disputes which arise in each matter. The first concerns the question of whether the Safety and Production Allowance (Allowance) contained in Annexure 6 of the Agreement should have been paid to employees during periods when they engaged in protected industrial action. I will refer to this as the Allowance dispute. The second concerns the question whether the employers should have paid employees who attended work at a time which coincided with the rostered commencement time of that shift. The issue is whether the employees were participating in protected industrial action at the relevant time, as the employers assert, or whether they were ready, willing and able to commence their shift and entitled to be paid as asserted by the CFMEU. I refer to this as the Wages dispute.

Although the disputes concern related issues they, and the relevant facts in each, are not exactly the same. Nonetheless, it was the submission of all parties that the matters should be heard concurrently. The evidence filed in each was marked separately and the submissions made were directed to one or the other application. The employers were separately represented. Thiess was represented by Mr Darams of counsel and Ms Brattey. Mt Owen was represented by Mr de Flamingh. In each matter the CFMEU was represented by Mr Walkaden.

[2] These disputes have taken a significant period of time to reach arbitration. They relate to a period of time in late 2012. The notifications in relation to them were not made until April 2013. After a number of conferences they were then adjourned for a lengthy period of time pending the outcome of a High Court decision to which I later refer. It was expected that the decision would inform one of the particular aspects of the dispute. Subsequently, the original member who had carriage of this matter ceased his involvement and the files were transferred to me. I then had conferences with the parties and listed the matters for arbitration. Regrettably, due to a period of ill health I had to abandon those dates. Subsequently, later dates were listed taking into account the availability of representatives and witnesses. Fortunately, little in this matter depends on the recollection of witnesses of the specific aspects of what was said on particular dates. Objective facts of what occurred are either not contentious or not determinative of the matters in issue.

The Act and the Agreement - relevant provisions

[3] I have reproduced the extracts from the Agreement relevant to these two disputes at Annexure A. The main provisions addressed by the parties are clauses 7, 13 and Annexure 6.

[4] The relevant provision of the Act is s.470. It is contained in a division of the Act which deals with payments which can be made to employees in respect of periods during which they participated in industrial action. It is in these terms:

“470 Payments not to be made relating to certain periods of industrial action
(1) If an employee engaged, or engages, in protected industrial action against an employer on a day, the employer must not make a payment to an employee in relation to the total duration of the industrial action on that day. ...”

The Thiess dispute

[5] This dispute concerns CFMEU members employed by Thiess who work at the mine.

Thiess operates the mine under a contract it has with Glencore Xstrata, the owner of the mine.

[6] Most of the facts are not in dispute. The following were not contentious and are largely taken from the Statement of Agreed Facts. 2

[7] The Mine is operated by Thiess on a continuous basis and is staffed by 4 crews called A, B, C and D crew. Employees work shifts of 12.5 hours in length either:

(a) a day shift commencing at 6:45am and ending at 7:15pm; or

(b) a night shift commencing at 6:45pm and ending at 7:15am.

[8] There is a 30 minute handover between shifts during which both incoming and outgoing crew are performing work. This 30 minute overlap is designed to enable a handover from the outgoing crew to the incoming crew.

[9] A protected action ballot order was made³ and subsequently there was a vote in favour of the taking of a number of forms of industrial action identified in the ballot order. The first notifications given under s.414 of the Act of an intention to take protected industrial action were on 25 September 2012. Thereafter, numerous notices pursuant to s.414 were given between that date and 11 December 2012. The action taken in accordance with those notices occurred on various dates between 1 October 2012 and 18 December 2012.⁴ The statement of agreed facts identifies each of the dates when s. 414 notices were given, the nature of the action and whether the action was taken. I do not propose to detail all of those occasions and will here only identify those which directly relate to the Wages dispute in relation to 2 October 2012, 5 and 19 November 2012 and 18 December 2012. It is adequate that I reproduce paragraphs [48] to [60] of the agreed facts.

“3.1 Wages on 2 October 2012
48 The circumstances which give rise to the dispute as it relates to payment for wages on 2 October 2012 concern the industrial action taken pursuant to the notices given on 25 September 2012 (as referred to in paragraphs 13 and 15 above). In the first notice the CFMEU notified of the intention of their members who were employed by Thiess under the Agreement to take protected industrial action in the form of a stoppage of work of 24 hours and 30 minutes in duration (ie commencing at 6:45am on Sunday 30 September 2012 and finishing at 7:15am on Monday 1 October 2012).
49 In the second notice the CFMEU notified of the intention of their members who were employed by Thiess under the Agreement to take protected industrial action in the form of a stoppage of work of 24 hours and 30 minutes in duration (ie commencing at 6:45am on Monday 1 October 2012 and finishing at 7:15am on Tuesday 2 October 2012).
50 Employees participated in the notified industrial action. On Sunday 30 September 2012 the night shift D crew were rostered to finish work at 7:15am. The crew stopped work at 6:45am. B crew were rostered to commence day shift at 6:45am and finish at 7:15pm and did not attend for work. D crew were rostered to commence their night shift at 6:45pm and finish at 7:.15am on Monday 1 October 2012 and also did not attend for work.
51 C crew were rostered to commence work at 6:45am on Monday 1 October 2012 and did not attend for work. A crew were rostered to commence night shift at 6:45pm and finish at 7:.15am on Tuesday 2 October 2012 and did not attend for work. The on-coming day shift, C crew were rostered to commence work at 6:45am on Tuesday 2 October 2012.
3.2 Wages on 5 November 2012
52 The circumstances which give rise to the dispute as it relates to payment for wages on 5 November 2012 concern the industrial action taken pursuant to the notice given on 29 October 2012. In this notice the CFMEU notified of the intention of their members who were employed by Thiess under the Agreement to take protected industrial action in the form a stoppage of work of 24 hours and 30 minutes in duration as referred to at paragraph 29 above (ie commencing at 6:45am on Sunday 4 November 2012 and finishing at 7:.15am on Monday 5 November 2012).
53 Employees participated in the notified industrial action. On Sunday 4 November 2012 the night shift C crew were rostered to finish work at 7:15am. The crew stopped work at 6:45am. A crew, were rostered to commence day shift at 6:45am and finish at 7:15pm and did not attend for work. C crew were rostered to commence their next night shift at 6:45pm and finish at 7:15am on Monday 5 November 2012 and also did not attend for work. The on-coming day shift, B crew were rostered to commence work at 6:45am on Monday 5 November 2012.
3.3 Wages on 19 November 2012
54 The circumstances which give rise to the dispute as it relates to payment for wages on 19 November 2012 concern the industrial action taken pursuant to the notice given on 13 November 2012. In this notice, the CFMEU notified of the intention of their members who were employed by Thiess under the Agreement to take protected industrial action in the form of a stoppage of work of 24 hours and 30 minutes in duration as referred to at paragraph 35 above (ie commencing at 6:45am on Sunday 18 November 2012 and finishing at 7:15am on Monday 19 November 2012).
55 Employees participated in the notified industrial action. On Sunday 18 November 2012 the night shift A Crew were rostered to finish work at 7:15am. The crew stopped work at 6:45am. C crew, were rostered to commence day shift at 6:45am and finish at 7:15pm, did not attend for work. A crew were rostered to commence their next night shift at 6:45pm and finish at 7:15am on Monday 19 November 2012 and also did not attend for work. The on-coming day shift, D crew were rostered to start work at 6:45am on Monday 19 November 2012.
3.4 Wages on 18 December 2012
56 The circumstances which give rise to the dispute as it relates to payment for wages on 18 December 2012 concern the industrial action taken pursuant to the notice given on 11 December 2012. In this notice, the CFMEU notified of the intention of their members who were employed by Thiess under the Agreement to take protected industrial action in the form of a stoppage of work of 24 hours and 30 minutes in duration as referred to at paragraph 45 (ie commencing at 6:45am on Sunday 16 December 2012 and finishing at 7:15am on Monday 17 December 2012) and a second stoppage of work of 24 hours and 30 minutes in duration (ie commencing at 6:45am on Monday 17 December 2012 and finishing at 7:15am on Tuesday 18 December 2012).
57 Employees participated in the notified industrial action. On Sunday 16 December 2012 the night shift A crew were rostered to finish work at 7:15am. The crew stopped work at 6:45am. C crew were rostered to commence day shift at 6:45am and finish at 7:15pm and did not attend for work. A crew were rostered to commence their next night shift at 6:45pm and finish at 7:15am on Monday 17 December 2012 and also did not attend for work.
58 D crew were rostered to commence work at 6:45am on Monday 17 December 2012 and did not attend for work. B crew were rostered to commence night shift at 6:45pm and finish at 7:15am on Tuesday 18 December 2012 and did not attend for work. The on-coming day shift D crew were rostered to commence work at 6:45am on Tuesday 18 December 2012.
59 The CFMEU say:

(a) that on 2 October 2012, 5 November 2012, 19 November 2012 and 18 December 2012 their members (in the relevant crews C,B,D as outlined above), were ready, willing and able to work at 6:45am (ie for the first 30 minutes of their shift); and

(b) as such clauses 7.3 and 13 of the Agreement required their members to be paid.

60 Thiess say:

(a) that the relevant Employees were still participating in industrial action until 7.15am on 2 October 2012, 5 November 2012, 19 November 2012 and 18 December 2012 ie until the end of the notified period of industrial action as given in the notice; and

(b) on the basis that the Employees were participating in industrial action, Thiess was prohibited by section 470(1) of the Fair Work Act 2009 from paying the Employees for the period from 6:.45am to 7:15am on 2 October 2012, 5 November, 19 November 2012 and 18 December 2012.”

[10] I should indicate that the statement of agreed facts contained details of the actual terms of the relevant s.414 notices. The notices were referred to in several exhibits but it is adequate to note they were annexed to the statement of Mr Lawman. 5 In relation to the action that was taken on 2 October, 5 November, 19 November and 18 December the content of the notices was similar except, of course, for the reference to the relevant calendar dates. I will give as an example the second notice dated 25 September 2012 which is related to the claim for payment on 2 October 2012. It notified there would be “......a stoppage of work of twenty four (24) hours and thirty (30) minutes in duration commencing at 6:45am on Monday, 1 October 2012.”6 As can be seen from the notice it gives a commencement time and a duration time. It contains no reference to any shift or crew which may be rostered to work during the hours which straddle the period of the notified protected industrial action. Although the notice does not contain a reference to the time or the day when the action would terminate, the parties agreed on how the notices were to be read, i.e. they agree what was intended to be the expiry date and expiry time.

In respect of the Allowance dispute, on each occasion when CFMEU members took protected industrial action the CFMEU submits that Thiess was required, by the terms of the Agreement, to pay the Allowance. It submits that s.470 of the Act does not constrain Thiess paying the Allowance. The facts establish that throughout the period during which protected industrial action was being taken Thiess did not adopt a consistent position in relation to payment of the Allowance. 7 I return to this later but it is sufficient to note that initially Thiess paid the full amount of the Allowance and then subsequently a pro-rated amount.

Thiess contends that the Allowance is paid for attendance at work and is a payment of wages. It submits s.470 prohibits it from making that payment when employees were taking protected industrial action. 8

The questions to be answered

[11] Thiess and the CFMEU agreed that the there are two questions that need to be answered. They are:

1. Was Thiess prohibited by s.470(1) of the Act from paying the employees the Allowance provided for in an Annexure 6 to the Agreement at times that they were taking industrial action as set out in the agreed statement of facts ?
2. Were the employees on the in-coming crew on the dates of 2 October 2012, 6 November 2012, 19 November 2012 and 18 December 2012 engaged in protected industrial action between 6:45am and 7:15am?

The witnesses

[12] In the Thiess dispute, statements of the following witnesses were tendered by the CFMEU and each was called to give oral evidence.

● Mr Robert Lawman, Mining Operator and Lodge President
● Mr Timothy Fraser, retired Mining Operator and previously Lodge Vice President
● Mr Peter Lochrin, Mining Operator

[13] Thiess tendered statements of the following witnesses and each of them was called to give oral evidence.

● Mr Rod Dooley, OCE Supervisor
● Mr James Armstrong, Mine Manager
● Ms Leanne Johnson, Manager, Human Resources

Additional findings on the witness evidence

[14] Much of the witness evidence forms the basis for the agreed facts and I do not need to refer to it. There are some matters which were in contest which I need to make findings about. It is unfortunate that neither party would make any concession about these matters. There was no documentary evidence in the nature of sign on records or the like which may have supported one or the other party’s position. I have found this a difficult exercise. I make the following findings.

[15] At the start of a shift the incoming crew are required to be in the muster room. They are required to be dressed in work uniform with the appropriate personal protective equipment and be ready to commence work. The open cut examiner (OCE) will then conduct a shift briefing. The briefing covers a number of matters including incidents on the outgoing shift and the allocation of labour and resources on the incoming shift. Thereafter, the incoming crew are transported in vehicles to the machine they have been assigned to operate. Employees on the outgoing crew will give a short verbal overview of their shift and hand over the particular machine. Incoming crew employees will commence to work on the machine. 9

[16] I find that the incoming crew rostered to start work at 6:45am on 2 October were in the muster room by that time, dressed in their work uniform. Mr Lawman was ready to start work at that time and I also find the other members of the crew in the muster room at that time were also ready to start work. I find it is probable that all of the crew were in or about the muster room at that time. On that morning, Mr Lawman had a discussion with Mr Dooley and Mr Armstrong. Mr Lawman said words to the effect that the crew was ready to work and Mr Dooley indicated that the company believed the employees were still on strike until 7:15am. The crew then waited until 7:15am and then commenced work. 10

Mr Armstrong’s evidence was largely consistent with the evidence given by Mr Lawman about what happened on the morning of 2 October 2012. On that morning, Mr Armstrong was either in, or in the vicinity of the supervisor's office (also referred to as the OCE's office) and he could see into the muster room. He observed that the majority of the crew were in room at about 6:45am and were dressed in work uniform. 11 Mr Armstrong conducted the pre-start meeting at 7:15am on 2 October 2012.

Mr Armstrong had been involved in making contingency plans after the s.414 notices had been received. He explained that he had arranged essential coverage for the stoppage that was to commence at 30 September 2012 at 6:45am and continue through to 2 October 2012 at 7:15am. 12

Mr Fraser was a member of the relevant incoming crew rostered to work at 6:45am on 5 November. I accept his evidence that he was ready to commence work at that time. Despite Mr Fraser being ready to start at that time he said he knew Thiess would not let him do so. Mr Fraser did not have any conversation with any management person about the starting time. He relied on a number of his workmates who had told him that Thiess had said that they were still on strike and could not start work until 7:15am. 13 I am not able, on the balance of probabilities, to make the finding that the other crew members who were in or about the muster room at around 6:45am were ready to start. I am not able to make any finding about how many persons are in this group or who they were. It is likely others were in their cars waiting for a start at 7:15am. I can make no finding about how many are in this group.

Mr Lawman was not a member of the crew rostered to start at 6:45am on 5 November 2012 although he gave evidence about his understanding of what occurred on that morning. He understood they had presented for work at the rostered time but were not permitted to commence work until 7:15am. These comments were not challenged in cross-examination.

Mr Armstrong said that as far as he was aware the incoming crew were not present ready for work at 6:45am on 5 November 2012. He recalled that at about 6:45am on that day there was no one in the muster room other than a small number of employees having a cup of coffee prior to the shift starting. No one from management said anything to them at 6:45am. He thought the crew was acting in accordance with the union notice and they knew they were to be ready to start work at 7:15am. 14

Mr Lochrin was a member of the crew rostered to start work at 6:45am on 19 November 2012. He said he, and the majority of the crew, were in their work uniform and in the muster room. I accept his evidence that he was ready to start although I also note he said he knew that he and other crew members would not be starting until 7:15am. He did not depose to any conversation he had with any management person which forms the basis for this, he said he just held the belief that the company would not permit the crew to start work until 7:15am. 15 I am unable to find, on the balance of probabilities, there was a majority of crew in the muster room at 6:45am. Even if I had made that finding I would not be able to find they were all ready to start work at that time.

[17] Mr Lochrin was a member of the crew rostered to commence work at 6:45am on 18 December 2012. He was in his uniform and in the muster room ready to work by 6:45am. I accept his evidence that he was ready to start but also note he did not depose to any conversation with management that occurred on that morning about start times. He said he continued to hold the belief that the crew would not start work until 7:15am. 16 I am unable to find, on the balance of probabilities, there was a majority of crew in the muster room at 6:45am. Even if I had made that finding I would not be able to find they were all ready to start work at that time.

Mr Armstrong said that in relation to the shifts that had been due to start at 6:45am on 19 November and 18 December 2012 either no one or very few of the workforce had presented themselves as ready to start work at 6:45am on those days. In both cases he said hardly anyone was in the muster room at that time on each of the days. 17 He said they had largely fallen into a routine being aware that the relevant notices did not expire until 7:15am.18 In light of the findings I have made above, I am not persuaded that no one was in the muster room at 6:45am. It is likely there were some but I cannot say how many. More importantly, I have made findings about whether they were ready to start work at that time and those findings are consistent with Mr Armstrong’s evidence.

The Mt Owen dispute

[18] This dispute concerns CFMEU members employed by Mt Owen at the Coal Handling and Preparation Plant (CHPP) which it operates.

[19] The CHPP operates 24 hours a day, 7 days a week. It is staffed by four crews, known as A, B, C and D Crew. Employees work shifts of 12.5 hours in length, being either a day shift commencing 6:45am and ending at 7:15pm, or a night shift commencing 6:45pm and ending at 7:15am. There is a 30 minute handover period between shifts during which both the incoming and outgoing crew are performing work.

[20] The following facts are extracted from the Statement of Agreed Facts. 19

“14 On 19 October 2012, the CFMEU served Mt Owen with three notices notifying in accordance with section 414 of the FW Act that members of the CFMEU who are employed by Mt Owen under the Agreement would take protected industrial action in the form of nine two hour stoppages of work on the operation commencing at 12am, 2am and 5:15am on each of 26, 27 and 28 October 2012. Copies of these notices are annexed to the Statement of Nicholas Hodge and marked “NH-8”, “NH-10” and “NH-12”.
15 On each of 26, 27 and 28 October 2012 industrial action was taken by members of the CFMEU employed by Mt Owen.
16 The circumstances which give rise to the dispute as it relates to payments for 26 October 2012 are:

a. all Employees required to work at 5:15am engaged in industrial action between 5:15am and 7:15am;

b. Mt Owen implemented measures to mitigate the disruption caused by the stoppage;

c. Employees required to commence work at 6:45am arrived on site at 6:45am (incoming crew); and

d. Mt Owen did not pay Employees on the incoming crew for the period 6:45am to 7:15am.

17 The circumstances which give rise to the dispute as it relates to payments for the incoming crew during the period 6:45am to 7:15 am on 27 and 28 October 2012 are materially identical.”

[21] I refer to the terms of the s.414 notices referred to in paragraph 14 of the agreed facts. Other than the date on which the stoppage was to take effect, the terms of each of the three notices given on 19 November were the same. I will refer to the first of the notices marked as exhibit NH8 to the statement of Mr Hodge. It provided that it gave “notice of the intention of members” of the CFMEU employed by Mt Owen under the Agreement to take protected industrial action. The form of the action was described in three paragraphs which were in the same terms. The commencement times in each were 12am, 2am and 5:15am. It was the notification described in the third paragraph of each notice which is the subject of this dispute. That paragraph read “A stoppage of work on the operation commencing at 5:15am on Friday, 26 October 2012 for two (2) hours in duration.”

[22] In respect to the Allowance Mt Owen paid it on a pro-rata basis when CFMEU members were engaged in protected industrial action in the form of strikes.

The questions to be answered

[23] Mt Owen and the CFMEU agreed that there were two questions that needed to be answered. They are:

1. Was Mt Owen required to pay the identified employees during the contested period? The identified employees are those who attended work as part of the incoming day shift on 26, 27 and 28 October 2012.
2. Was Mt Owen required to pay the employees the full amount of the Allowance contained in Annexure 6 of the Agreement during periods when the employees engaged in protected industrial action in the form of strike action? 20

The witnesses

[24] In the Mt Owen matter, the CFMEU tendered the following witness statements and each gave oral evidence:

● Mr Nicholas Hodge, CHPP Technician and Lodge Secretary
● Mr Damian Hall, CHPP Technician and Shift Delegate on B Crew

[25] Mt Owen tendered the statement of Mr Neil Hassett, CHPP Manager and he was called to give oral evidence.

My findings on the witness evidence

[26] Based on the evidence of Mr Hodge I note there was an earlier s.414 notice given by the CFMEU to Mt Owen on 2 October 2012. It was in similar terms to the notice that gave rise to the Wages disputes in respect to the later October 2012 dates. In the case of this earlier notice the expiry time was 7:15am Tuesday, 9 October 2012. In this case the crew rostered to start work at 6:45am on 9 October 2012 attended at work and were allowed to start at that time. They were paid for the whole of the hours worked on that shift. 21 Mr Hassett said that on this occasion the company had been a bit naive and misread the notice and had later realised its mistake.22

The parties raised an issue concerning a conversation that occurred on 26 October 2012 between Mr Hall and Mr Hassett. In short, there was a difference as to whether a conversation took place in the CHPP crib room or the muster area. There is also a difference between them in relation to what was actually said in the conversation. Finally, there was a difference between them as to whether, following the conversation, the employees on the incoming crew went to the first aid room area or whether they stayed in the muster area. The parties agreed that it was not necessary for me to express a preference as to which version should be accepted. I note however that Mt Owen indicated there might be an issue about whether employees on the incoming shift were “able to perform work”. 23

Based on the evidence of Mr Hall and Mr Hassett, I find they had a conversation at around 6:45am on 26 October 2012. What exactly was said does not need to be commented upon further. It is adequate to indicate that Mr Hassett said words to the effect that he understood the employees were on strike until 7:15 a.m. and they would not commence work until that time. Mr Hall said words to the effect that they were not on strike, the previous crew had been and this crew was ready to start work at 6:45am. The crew started work at 7:15am.

On the basis of Mr Hassett’s understanding of the notices the day shift would not start until 7:15 am on the relevant days. Accordingly, he had made an arrangement to put together a composite crew to cover the stoppages on those days including the two hour stoppage from 5.15am to 7:15am. The nature of the composite crew is described in his statement as are other arrangements he put in place to cover the expected absences during the periods of protected industrial action. 24 A similar arrangement had been made in respect of covering the work of the outgoing crew who were on strike from 5:15am to 7:15am on 27 and 28 October 2012.

Mr Hassett was not present at the CHPP at or about 6:45am on 27 and 28 October 2012. No other employer witness was called to depose to what occurred on the morning of those two days.

In relation to the crew rostered to start work at 6:45am on 27 October 2012 and at 6:45am on 28 October 2012 I make similar findings to those I have made in relation to 26 October 2012. The employees on that crew were ready to start work at 6:45am. They were advised at that time by Mr Robinson, the Shift Supervisor, that they would not be allowed to start work until 7:15am. On each of these days the crew started work at 7:15am. On each occasion that crew was not paid for the 30 min period.

[27] There was evidence about the payment by Mt Owen of the Allowance in respect to periods when CFMEU members were absent from work on union business. For example, on 8 February 2013 and 19 April 2013 Mr Hodge was on unpaid leave. On each occasion he attended a district union meeting. The payslips for the week in which these two days fell were in evidence. 25 In each case the payslips reflect that he received the full amount of a “normal bonus” of $464. The reference on the pay slip to normal bonus is a reference to the Allowance.

The evidence also establishes that Mr Hodge and Mr Hunter, the President of the Lodge, were not paid the full bonus in relation to days in October, November and December 2012. On each occasion they were on unpaid leave attending either a National Convention or a delegates meeting. The failure to pay the full amount of bonus was raised in an e-mail by Mr Hodge with Mr Hassett. In his response, Mr Hassett acknowledged that they had been underpaid and that he would “fix it tomorrow”. Subsequently, in August 2014 Mr Hodge and Mr Hunter were on unpaid leave attending “union functions” and Mr Hodge again raised concerns about not being paid the full allowance for the relevant week of the absences. Mr Hassett responded that the company had decided the Allowance would be paid in relation to absences to attend enterprise agreement negotiations but not otherwise for “union functions.” 26 Mr Hassett accepted Mr Hodge had been paid the Allowance during periods of unpaid leave to attend to union business in the past.27 However, by May 2014 the company had decided it would only pay the bonus to employees in respect to unpaid leave when that related to enterprise agreement negotiations.28

Judgments and decisions

[28] Next I should refer to two decisions. The first is a judgment of the High Court of Australia and the second is a decision of a Full Bench of the Commission.

[29] The High Court judgment in Construction, Forestry, Mining & Energy Union v Mammoet Australia Pty Ltd (Mammoet) 29 was referred to by the parties. The relevance of this judgment relates to the Allowance dispute. The facts were that the employer (the respondent) was engaged on a large construction project on the Burrup Peninsula in the north-west of Western Australia. The employees worked under “fly in/fly out” arrangements and the respondent provided their accommodation while on location.

The relevant employees met the definition of “Distant Workers” in the enterprise agreement which covered them and accordingly the respondent was obliged by its terms to either provide them with suitable accommodation or to pay a living away from home allowance. The respondent chose to provide their accommodation.

The employees notified an intention to engage in protected industrial action as part of the process of negotiating an enterprise agreement with the respondent. The respondent notified that it intended to cease providing accommodation to them, contending it was obliged to do so by s.470(1) of the Act.

In both the Federal Magistrates Court and the Federal Court the respondent succeeded in persuading the courts that the provision of accommodation was the making of a payment and thus prohibited by s.470(1) of the Act. There was then an appeal to the High Court.

[30] I can pass over that part of the High Court’s judgment which deals with the meaning of “payment to an employee”. It found that the true construction of “payment” within the meaning of s 470(1) is a payment of money. In the two disputes before me it was accepted by the CFMEU that the Allowance, if paid, would be a payment of money.
[31] I turn to the comments made about the phrase “...in relation to the total duration of the industrial action” in s.470(1). The High Court said:

“"In relation to the total duration of the industrial action"

1. Section 470(1) prohibits the making of "a payment to an employee in relation to the total duration of the industrial action on that day." That is a prohibition upon the making of a payment to recoup, in whole or in part, what would have been payable in relation to the time during which the employee engaged in industrial action had the employee worked during that period.

1. An employee who engages in industrial action does not, for the duration of the industrial action, render the services on which the entitlement to remuneration commonly depends. But to say that is distinctly not to say that entitlements of an employee which are dependent on the subsistence of the contract of employment, rather than the actual performance of services, even if sensibly described as "payments", are "payment[s] ... in relation to the total duration of the industrial action". To speak of "a payment to an employee in relation to the total duration of the industrial action" is to speak of a period of employment in respect of which no remuneration is earned by the employee. The concern addressed by s 470(1) of the Act is that the taking of industrial action must not be the occasion of a payment by the employer. The obligation to provide accommodation was not the occasion of the industrial action taken by the relevant employees.

1. The legislative history confirms that the relationship between payment and industrial action contemplated by s 470(1) is that the non-performance of work by the employee is the occasion of the proscribed payment. These indications support the view that the purpose of the provision is to prohibit "strike pay", that is, payments by an employer to "make up", in whole or in part, wages not earned by the employee during the period of industrial action.

...

1. The legislative history, the Second Reading Speech, and the observations of Ryan J point strongly to the conclusion that the mischief at which s 470(1) is directed is the payment of strike pay, that is, the making of payments whose relationship to industrial action is to be found in the recoupment of wages lost during the period of the action. There is no suggestion that the purpose of s 470(1) is to suspend the entirety of the employer's obligations under the relationship of employment. Indeed, the Act contemplates the continued subsistence of the employment relationship during and after the industrial action.

1. Whether the prohibition is apt to capture any given payment may depend on the circumstances of the case. For example, a payment by way of a gift might be caught if the circumstances were such as to show that it was made by way of recompense for wages not earned. It is not necessary or desirable to attempt an exhaustive statement of those circumstances.

1. It is sufficient for the purposes of this case to say that the entitlement of the relevant employees to accommodation was established under cl 6 of Appendix 7 of the Agreement. The provision of that accommodation was a benefit to which the relevant employees were entitled upon attending at the work site unless and until they were directed to return to their usual place of residence. It was neither a payment of money, nor provided in relation to the non-performance of work during the period of industrial action.”

[32] I next turn to the Full Bench decision in Boral Resources (NSW) Pty Ltd (Boral Resources). 30 This decision was addressed by the parties in respect of the Wages dispute. This matter was an appeal against my decision refusing an application by Boral for orders under to s.418 of the Act. The orders were sought against the Australian Workers' Union, New South Wales (the AWU) and its members employed by Boral Resources (NSW) Pty Ltd (Boral) at its Dunmore Quarry located on the South Coast of New South Wales.

[33] The background to the s.418 application was that the AWU had notified Boral, pursuant to s.414 of the Act, that employees would be taking industrial action on 29 October with a 24-hour stoppage of work to occur on that day. In response to the notice, Boral took various actions to minimise the disruption to its business and customers, including advising customers that it would be unable to provide them with product on that day and cancelling rail and road transport arrangements. On 29 October the employees did not take the industrial action identified in the notice and attended for work as normal. The AWU gave no prior notice to Boral that the employees would not be taking action on that day.

[34] On 3 and 4 November the AWU notified Boral that its members would not attend for work and would cease work for 24 hours on 9 November and then again on 10 November. In response to these notices, Boral advised customers it would be unable to provide product on 9 and 10 November and cancelled some trains. The employees took industrial action on 9 November. However, the AWU notified Boral on the morning of that day that the industrial action planned for 10 November would not take place.

[35] Boral then applied to FWA for the making of orders under s.418 and s.229 of the Act. I need say no more about the s.229 application as it was not pursued by Boral. The orders sought by Boral under s.418 were directed to prevent interruptions to work brought about by what it described as misleading notices of industrial action. In effect, it argued that the conduct of the AWU in giving notice of intention to take industrial action on a particular day and the employees then attending for work on that day resulted in a restriction, limitation and delay in the performance of work and that it was appropriate for an order to be made pursuant to s.418 to stop the action. The Full Bench said:

“[13] In the present matter, we do not consider that the conduct of the AWU complained about can be properly described as a "ban, limitation or restriction on the performance of work… or on the acceptance of or offering for work" within the ordinary meaning of paragraph (b) of the definition in s. 19(1) of the Act. As the Senior Deputy President noted in her decision:

"There was no evidence at all that, at the time the s. 414 notice was given, it was not the intention of the Union and its members to take the foreshadowed action. Furthermore the reason for giving the notice is that it is a requirement under the Act to enable the Union and its members to take protected action. But, having given the notice, nothing in the Act suggests that the Union and its members are obliged to carry through with the action as foreshadowed. There may be numerous reasons for not taking the action which may have arisen after the date of the notice."

[14] There is no doubt that the notice requirements in s. 414 are an important part of the scheme of the Act relating to industrial action and provide the employer with an opportunity to take defensive action as may be appropriate to protect its business and custom. Part of the consideration of what defensive action to take will include an assessment of the likelihood of the industrial action being taken. This might cover the possibility of early agreement being reached either as to issues in dispute or the process of addressing those issues as well as the possibility of some or all employees deciding for whatever reasons not to take part in the action. The assessment might also involve consideration of past practice and experience between the parties in relation to bargaining and the taking of industrial action. However there is no legislative requirement that industrial action once notified must be taken and, as the Senior Deputy President noted in her decision, it is not unusual in the current bargaining regime and that under the WR Act for notices to take protected industrial action to be withdrawn or not acted upon.”

Principles of interpretation of enterprise agreements

[36] As is apparent from my earlier comments, these disputes necessitate the interpretation of the terms of the Agreement. Each of the parties referred to a number of decisions which addressed the approach to be taken to such an exercise. There was no dispute between the parties in relation to the proper principles that should be applied in interpretation of enterprise agreements. I also note that these disputes were heard before the Full Bench decision in The Australasian Meat Industry Employees Union v Golden Cockerel Pty Limited (Golden Cockerel). 31 The principles the parties addressed are consistent with the summary of principles as set out in paragraph [41] of Golden Cockerel.

Consideration

The Allowance dispute

[37] The union submits there are two parts to its argument. It accepts that first, it has to satisfy me that under the Agreement there is an entitlement to payment of the Allowance notwithstanding the fact protected industrial action was being taken, that is, employees are not working. Next, it needs to persuade me that payment of the Allowance is not contrary to s.470 of the Act.

[38] This matter requires close consideration of the terms of the Agreement. As I have earlier indicated the relevant provisions are in Annexure A to this decision.

[39] I refer first to clause 7.3. It provides that an employee not attending or not performing work is to lose payment for the actual time of such non-attendance or non-performance. This however is “except as otherwise provided in the Agreement”. In my opinion, the Allowance, being an amount of money payable in accordance with Annexure 6 to the Agreement, is such an exception.

[40] Clause 7.3 should be read together with clause 13. I prefer an interpretation that the reference to payment in clause 7.3 is to be read as a reference to the salary an employee is to be paid as set out in clause 13 which is titled “Salaries & Payment”.The relevant payments referred to in that clause are to an annualised salary. The Agreement provides at clause 13.1 that the salary is to be paid by weekly instalments. The amounts of those instalments are contained in clause 13.7.

[41] Clause 13.5 is also relevant. It identifies the components of the salary to be paid and what they are compensating the employee for. They represent “compensation for all time worked under the roster cycle prescribed in Annexure 3 of this Agreement and are inclusive of all other payments (including holiday loading, shiftwork and all allowances)...” The payment is for working one of the shift rosters in Annexure C. The Allowance is expressly excluded from the compensation that is paid for time worked.

[42] Clause 14 is consistent with this construction making it clear that for the purposes of calculating superannuation “ordinary time earnings” not only the annualised salary rates as contained in clause 13.6 or 13.7 are to be included but the calculation is also to include the Allowance. It is made clear by that clause that the Allowance is not considered to be earnings of “...annualised Salary Rates as defined at clause 13.6 or 13.7 in respect of rostered hours of work......”

[43] This construction is also consistent with the definition of“Salary Rate” in clause 3. It makes no reference to the Allowance. The definition refers to either the annualised salary in clause 13.6 or the “weekly salary” in clause 13.7.

[44] My preferred construction is also consistent with the terms of Annexure 6. It is clear that the Allowance there referred to is to be paid to an employee “with their salary”. The clear suggestion is that it forms no part of the salary paid for working the relevant roster; is a discrete and separate payment to remuneration for that work.

[45] Clause 7.3 does not, in my opinion, preclude payment of the Allowance when an employee is participating in protected industrial action. I next refer to Annexure 6.

[46] The competing constructions of the Annexure 6 urged upon me by the CFMEU on the one hand and the employers on the other are both arguable. I have decided the better construction to be given to the Annexure is that for which the CFMEU contends. In this respect, I note that the Allowance is for a set amount and there is no occasion or circumstance identified when it will not be paid. The quantum of the Allowance was agreed in the negotiations for the Agreement. In the first year it was “fixed” at $ 441.00 and in the second year $454.00. That quantum is made up of three components with a dollar value for each having been agreed by the parties. Thereafter, the Allowance only envisages an adjustment by way of an increase in the event the performance levels criteria, as described in paragraphs a, b or c are achieved. If none are achieved the Allowance remains the same for the life of the Agreement.

[47] I accept and adopt the following submissions of the CFMEU. I should note these are extracted from the submissions filed in the Thiess dispute but the same submissions were also made in the Mt Owen dispute.

“31. The plain and ordinary meaning of the words found in Annexure 6 of the enterprise agreement confirm the CFMEU contention. This is evident from the words found in item 1 of Annexure 6:
The company will pay a Safety and Production Allowance of $441.00 per week to each permanent employee with their salary from the commencement of this Agreement, subject to the following:

(1) At the start of this Agreement, this Allowance is comprised of the following 3 components:

a) Lost Time Injury - amount of $105.00;
b) Restricted Work Injury - amount of $21.00; and
c) Productivity- amount of $315.00. (my emphasis).
32. 1t can be seen that the Allowance has three components. A prohibition on the taking of protected industrial action or even attendance at work is clearly not a component. Each of the three components is defined at item 2 of Annexure 6.
33. 1t can also be seen that the Allowance was set at $441.00 per week for the first year of the enterprise agreement.
34. Item 2 of Annexure 6 then goes on to provide that on the satisfaction of specific objectives relevant to each component, the Allowance will increase from $441.00 per week by a prescribed amount.
35. Importantly, Annexure 6 does not permit regression. That means, once the specific objectives relevant to each component have been satisfied, the Allowance is to increase. Annexure 6 does not provide that continued payment of the Allowance requires continual satisfaction of any specific objective. Once the specific objectives have been met and consequently the requirement to increase the Allowance from $441.00 per week has been enlivened, Annexure 6 does not permit Thiess to reduce or cease paying the Allowance.
36. It is the satisfaction of those specific objectives that requires the continued payment of the Allowance to each permanent employee. None of those objectives expressly require attendance at work. None of those objectives relate to protected industrial action. In particular, Annexure 6 does not expressly state that the taking of protected industrial action disentitles employees from the Allowance.
37. During the period of protected industrial action, the Allowance had increased to $464.00 per week. This occurred because specific objectives outlined in item 2 of Annexure 6 had been satisfied.
38. As noted above, Annexure 6 does not permit regression. The effect is that Annexure 6 requires payment of the Allowance at $464.00 per week including during periods when protected industrial action was taken.
39. This is consistent with the purpose of the Annexure 6. The evident purpose of the Annexure 6 is to incentivise employees to work safely and productively. The purpose of the Annexure 6 is not to discourage or punish employees for exercising their lawful right to take protected industrial action.”

[48] I also consider it clear the Allowance is paid to all employees be they union members or not. The increases that may be made to one or other of the components of the Allowance are calculated looking backwards over the preceding 12 months. All employees are entitled to the minimum amount of the Allowance or an increased amount having achieved, in the previous 12 months, one or other of the targets in the components. This does not suggest that subsequently, on any occasion, the payments can properly be reduced.

[49] Item 4 of Annexure 6 was relied on by the employers as supporting their construction that the Allowance is only paid when the employee attends at work and performs work. I am not persuaded it is as significant as the employers contend. If the item was not in the Annexure, there would be an argument that the Allowance would not be payable when any of the occasions of leave identified in the item was taken. This is because the salary referred to in the Agreement which is paid to employees does not include the Allowance. If the Allowance was also to be taken into account when paid leave was to be taken it was necessary for there to be an express provision to that effect. That is what is achieved by item 4. It does not follow that the item provides any suggestion that on other occasions the Allowance is not to be paid. This item does not expressly provide the Allowance is not paid when taking approved unpaid leave, unapproved unpaid leave or protected industrial action. It simply does not deal with whether the Allowance is required to be paid on those occasions.

[50] The employers submit that not paying the Allowance when an employee is taking protected industrial action is a sensible industrial outcome, a consideration they say is relevant when considering the construction to be given to the terms of an enterprise agreement. I observe that, in my experience, what might be considered a sensible industrial outcome is often seen through the eyes of the beholder. The terms of Annexure 6 require the Allowance be paid, at least at the minimum amount identified. In light of those terms, to adopt the employers’ construction would be, in effect, to rewrite the terms in a manner which is not permissible. Also, it is not that surprising that the terms of the Agreement are silent as to whether the Allowance is to be paid when an employee may take protected industrial action. It is to be borne in mind that until the nominal expiry date of the Agreement was reached no industrial action was to be organised or taken. This is what s.417 of the Act provides. In the event any industrial action was taken it is to be assumed the parties knew a s.418 application would promptly put it to an end.

[51] I turn now to the question of whether s.470 of the Act prohibits the payment of the Allowance when the employees engaged in the protected industrial action identified in the agreed facts.

[52] I refer first to Mammoet. That makes clear that s.470 contains two elements and both are to be met for the prohibition upon payment to be enlivened. The first element is that there must be a payment to an employee. A payment in money would satisfy this element. The CFMEU concedes that the Allowance is a payment in money. It follows that the first element is satisfied.

[53] The second element is that only payments in relation to the “total duration of the industrial action on the day” are prohibited. The High Court in Mammoetfound that only “strike pay” or payments to “make up”, in whole or part, wages not earned by the employee during the period of industrial action was a payment in relation to the total duration of the industrial action. That is, the prohibition is on the making of a payment to recoup, in whole or in part, what would have been payable in relation to the time during which the employee engaged in industrial action had the employee worked during that period. The Court acknowledged that depending on the particular facts, there might be some payments not caught by this prohibition. At paragraph [59], which I have earlier reproduced, the Court said that there is no suggestion that the purpose of s.470 is to suspend the entirety of the employer’s obligations under the relationship of employment. The continued subsistence of the employment relationship during and after the industrial action is contemplated. Applying these principles to the Agreement, I am persuaded that it is only the payment of the salary to an employee who engages in protected industrial action that is constrained by s.470. It constitutes the wages that are not earned, or are lost, by the employee during the period of industrial action. The obligation under the Agreement to pay the Allowance is not affected by the section.

[54] Furthermore, s.470 constrains a payment of money which is “in relation to the total duration” of the protected industrial action. For the reasons I have earlier given, the Allowance is not a component of salary. It is not calculated by reference to the annualised amount of pay (and its weekly value) for working the rosters in the Agreement. To mathematically calculate its value by reference to say an ordinary average of 35 hours per week is inconsistent with the purpose of the Allowance and the components that make it up. Those components cannot be readily attributed to any particular periods of time. As I have earlier indicated, the Allowance was set at the commencement of the Agreement and was adjusted during its life when one or other of the performance criterion was met. That adjustment occurred looking backwards to the achievements over the previous 12 months. It is not appropriate to reduce the amount which is to be paid by reference to a time period when, after the nominal expiry date of the Agreement, any protected action was taken.

[55] In my opinion, the Allowance does not constitute wages not earned during the periods when protected industrial action was taken. Section 470 does not constrain the payment of the Allowance during any such periods.

[56] Before leaving the Allowance dispute I should indicate that the fact Thiess was inconsistent in the manner in which it paid the Allowance was not of any particular weight. The exercise before me was one of arbitrating the dispute referred to the Commission and in the manner agreed by the parties. Either the terms of Agreement, read together with s.470 of the Act, required the Allowance to be paid in the circumstances or it did not. In a different matter, maybe one where an exercise of discretion arises, it may have been a relevant consideration.

The Wages dispute

[57] The industrial action here taken by employees of Thiess and Mt Owen is described in the Act as employee claim action. For it to be protected s.409 requires a number of preliminary steps to be taken. Those which are particularly relevant to this dispute are that the industrial action must be authorised by a protected action ballot and must meet what is described as the common requirements as set out in the Act. 32 It is not in issue that in the two Wages disputes the action notified in the respective s.414 notices was action which was of a kind authorised by a protected action ballot. There is also no issue that the notices comply with the requirements of s.414(6) in that they specify the nature of the action to be taken and the day on which it would start. The agreed facts also reflect that the parties also well understood the date and time at which each period of protected industrial action would cease.

For the following reasons, I have decided that in each case during the relevant 30 minutes the employees were taking protected industrial action and the employers were entitled to rely on the notices that the action would cease at 7:15am. Further, for that 30 minute period, s.470 of the Act prohibited any payment of salary being made.

I refer to a number of provisions of the Act. I do so however acknowledging that the parties accept that no part of my consideration of the facts, the terms of the Agreement or the Act necessitate my considering whether, at any time, the employers stood down employees or that the stand down provisions in either the Agreement or the Act are relevant to these disputes. 33

[58] I first refer to the role and status of a bargaining representative. In this respect I need only refer to the role of an employee organisation which is a bargaining representative of an employee. In this case it is the CFMEU which was the bargaining representative of employees of Thiess and Mt Owen who were to be covered by the proposed enterprise agreement. There was no suggestion that the status of the union as a bargaining representative was revoked at any time. Nor was there any suggestion that any of the relevant employees to be covered by the proposed enterprise agreement had appointed themselves, or another of their work colleagues, to act as their bargaining representative.

[59] The Act gives bargaining representatives a particular status, rights and responsibilities. For example, a bargaining representative is obliged to comply with the good faith bargaining requirements and may make applications for bargaining orders. A bargaining representative may apply under s.240 of the Act for the Commission to deal with a dispute about a proposed enterprise agreement. When an enterprise agreement is reached, the Act places an obligation upon a bargaining representative to make application, in a timely way, for approval of the agreement. Of particular relevance to the matters in dispute here, the Act provides that it is the bargaining representative of an employee who may apply to the Commission for a protected action ballot order. The ballot order contains details of the nature of the proposed industrial action for which authorisation is sought. When employees authorise that action they do so on the basis that, in the event it is to be taken, it will be the bargaining representative who will initiate it in accordance with the provisions of the Act. No provision in the Act identifies a role for the employee having any input as to which of the types of actions he or she has approved which are then identified in a s.414 notice. There is no provision requiring a further approval of an employee prior to a bargaining representative giving such a notice. The employees had already, by approving the kinds of industrial action identified in the protected action that may be taken, empowered the bargaining representative to act on their behalf to initiate the taking of those actions. In this respect, I agree with the submission of the employers that there is no suggestion in the Act that individual employees, who are not bargaining representatives, are authorised to notify their employer of protected industrial action. The ability to give such notice is preserved for the bargaining representative only.

 1   [2010] FWAA 5399.

 2   CFMEU 3 (Thiess).

3 PR527508.

4 See CFMEU 3 (Thiess), paras. 13-46.

 5   CFMEU 4; RL5; RL8; RL9 (Thiess).

 6   CFMEU 4, RL5 (Thiess).

 7   See, for example. CFMEU 4 paras. 42-9 (Thiess); CFMEU 6, paras. 21-23 (Thiess).

 8   CFMEU 3, Agreed facts paras. 63-4.

 9   CFMEU 4, paras. 12-4 (Thiess).

 10   Thiess 2, paras. 24-9.

 11   PN922-8.

 12   Thiess 3, para. 1.

 13   CFMEU 6, para. 10.

 14   Thiess 3, paras. 32-7.

 15   CFMEU 8, paras. 8-10.

 16   CFMEU 8, para. 18.

 17   Thiess 3; PN33-49.

 18   Thiess 3, paras. 46-9.

 19   CFMEU 3 (Mt Owen).

 20   Question 2 is in the amended terms as agreed at PN1179.

 21   CFMEU 4 paras. 29-32.

 22   PN742-4.

 23   PN116.

 24   Mt Owen 1, paras. 9, 14; PN672-6.

 25   CFMEU 6 (Mt Owen).

 26   CFMEU 7 (Mt Owen).

 27   PN749.

 28   PN793-800.

 29 [2013] HCA 36.

 30   [2010] FWAFB 1771.

 31   [2014] FWCFB 7447.

 32   Fair Work Act 2009 (Cth) ss.409 (1)(c), 409(2), 413, 414.

 33   PN199.

 34   See decisions discussed in Energy Australia Yallourn v CFMEU[2013] FWCFB 3793, including Telstra Corporation Limited v CEPU[2009] FWCFB 1698, Davids Distribution Pty Ltd and National Union of Workers [1999] FCA 1108 and Telstra Corporation Limited v CFMEU[2009] FWAFB 1698.

 35   PN1778-80.

 36   Question 2 is in the amended terms as agreed at PN1179.

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