EnergyAustralia Yallourn Pty Ltd v Construction, Forestry, Mining and Energy Union

[2016] FWC 2133

[2016] FWC 2133

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.739—Dispute resolution

EnergyAustralia Yallourn Pty Ltd
v
Construction, Forestry, Mining and Energy Union
(C2015/3852)

COMMISSIONER CIRKOVIC MELBOURNE, 5 APRIL 2016

Alleged dispute about any matters arising under the EnergyAustralia Yallourn Enterprise Agreement 2013 – Bunker Lancing – Outsourcing – Arbitration.

Introduction

[1] This decision involves an application brought by EnergyAustralia Yallourn Pty Ltd (EnergyAustralia) under s.739 of the Fair Work Act 2009 (Cth) (the Act). The Respondent is the Construction, Forestry, Mining and Energy Union (CFMEU).

[2] The parties are covered by the EnergyAustralia Yallourn Enterprise Agreement 2013 (the Agreement). The Agreement was approved by the Commission on 28 November 2013. It has a nominal expiry date of 28 November 2017.

[3] EnergyAustralia and the CFMEU are in dispute about whether the Agreement prevents EnergyAustralia from contracting out the task of bunker lancing of the four coal bunkers at the Yallourn Power Station. Bunker lancing is a cleaning and maintenance task which is performed at the Yallourn Power Station when there is a build-up of coal stuck to the sides of the coal bunker. When this occurs, the coal that is stuck to the side of the bunker causes difficulties for new coal to travel through the bunker and out of the bunker outlets onto the feeder conveyer.

[4] There is no dispute between the parties that historically and currently the task of bunker lancing is performed by Yallourn power workers. There is also no dispute that the task is performed by Yallourn power workers on an ad hoc basis as required during overtime hours.

[5] This matter was the subject of a site inspection at the Yallourn Power Station on 29 February 2016 and was heard on 1 and 2 March 2016. EnergyAustralia was represented by Mr Brendan Avallone of Counsel, instructed by Minter Ellison. Mr Adam Walkaden appeared for the CFMEU.

[6] The purpose of the site inspection was to view the coal bunkers where the task of bunker lancing is performed. This included an overview of the various processes within the power station, observing the locations where bunker lancing is performed, observing the task of trimming the feeders and being provided with a demonstration of the use of the various lengthed air-lances used to perform the task of bunker lancing.

Background

[7] EnergyAustralia filed this application for the Commission to deal with the dispute in accordance with the Agreement’s dispute resolution procedure on 6 May 2015. The application was allocated to Commissioner Lewin.

[8] Commissioner Lewin listed the application for conference at the Commission on 19 June 2015. Following this conference, Commissioner Lewin listed the application for further telephone conferences on 17 July 2015 and 28 July 2015.

[9] Following the final telephone conference, Commissioner Lewin issued a Recommendation dated 28 July 2015. The Recommendation provided that:

“[1] When bunker lancing work is required, EnergyAustralia Yallourn Pty Ltd invite all relevant qualified employees to volunteer to perform the work at overtime rates, including but not limited to, power workers.

[2] Three (3) days notice be given of the commencement of the work.

[3] The parties meet and confer in order to reach agreement to ensure that any overtime equalisation process or requirements which would prevent this recommendation being adopted in an efficient manner be modified so as to ensure that a full crew of five (5) employees is available for bunker lancing work.”

[10] On 25 November 2015, representatives for EnergyAustralia wrote to the Commission advising that they wished the matter to be referred for arbitration by the Commission. On the same date the matter was reallocated to my chambers.

[11] On 30 November 2015, I issued Directions for the filing of a minute of proposed consent directions for the filing of materials.

[12] This matter was listed for Mention on 16 December 2015 to canvass preliminary issues relating to the hearing of this matter. On 21 December 2015, Directions were issued for the filing of materials, a site inspection of the Yallourn Power Station on 29 February 2016 and for hearing on 1 and 2 March 2016.

Issues in Dispute

[13] In summary, the issue in dispute requires an interpretation of the following clauses in the agreement:

“30 Roles & Responsibilities

The classification, duties and responsibilities of an employee shall not be changed unless agreed between the employee and the company.

30.20 Operations Role Descriptors

External to this agreement is a document entitled “Operations Role Descriptors” which defines the roles and duties of classifications within the Shift Operations Group. The Operations Role Descriptors document cannot be varied during the term of the Agreement except by mutual agreement of the operator’s representatives and the Company. The Operations Role Descriptors document forms part of this Agreement for the purposes of the Dispute Resolution clause.”

[14] Further, within clause 6 titled “Employment Security”, the Agreement provides that:

“Contractors and labour hire companies may be used for the performance of work on the Power Station and associated infrastructure from time to time to meet workloads provided that job security of employees is not affected.”

[15] Furthermore, within clause 32.2 titled “Skills Mix”, the Agreement provides that:

“Contractors and labour hire companies may be used for the performance of work provided that Operations employees are fully utilised.”

Jurisdiction

[16] Section 739 of the Act prescribes when disputes under an enterprise agreement can be dealt with by the Commission. Section 739 of the Act is as follows:

“739 Disputes dealt with by the FWC

(1) This section applies if a term referred to in section 738 requires or allows the FWC to deal with a dispute.

(2) The FWC must not deal with a dispute to the extent that the dispute is about whether an employer had reasonable business grounds under subsection 65(5) or 76(4), unless:

(a) the parties have agreed in a contract of employment, enterprise agreement or other written agreement to the FWC dealing with the matter; or

(b) a determination under the Public Service Act 1999 authorises the FWC to deal with the matter.

Note: This does not prevent the FWC from dealing with a dispute relating to a term of an enterprise agreement that has the same (or substantially the same) effect as subsection 65(5) or 76(4) (see also subsection 55(5)).

(3) In dealing with a dispute, the FWC must not exercise any powers limited by the term.

(4) If, in accordance with the term, the parties have agreed that the FWC may arbitrate (however described) the dispute, the FWC may do so.

Note: The FWC may also deal with a dispute by mediation or conciliation, or by making a recommendation or expressing an opinion (see subsection 595(2)).

(5) Despite subsection (4), the FWC must not make a decision that is inconsistent with this Act, or a fair work instrument that applies to the parties.

(6) The FWC may deal with a dispute only on application by a party to the dispute.”

[17] Clause 28 of the Agreement provides a dispute resolution process for the parties to the Agreement. Clause 28 of the Agreement provides:

“Dispute Resolution Process

The DRP process is to be used to assist in resolving any matter or dispute pertaining to the employment relationship.

For matters that are in dispute, that go to the application or interpretation of this Agreement or with matters arising under the National Employment Standards (NES), this clause facilitates access to the Fair Work Commission for conciliation and, if necessary, arbitration (‘category 1 matters’).

For all other matters pertaining to the employment relationship that do not go to the application or interpretation of the Agreement or are not matters arising under the NES ('category 2 matters'), the steps set out below shall apply, except that the Fair Work Commission shall only be empowered to exercise conciliation powers.”

[18] Following the conciliation conference before Commissioner Lewin on 19 June 2015, the parties were asked, amongst other things, to file written submissions advising the Commission whether the application involved a Category 1 or Category 2 matter as defined in clause 28 of the Agreement.

[19] In their submissions, both parties agreed that the matter should be categorised as a Category 1 matter as it is a dispute about the interpretation of clauses 30, 30.20, 32.2 and 6 of the Agreement.

[20] In respect of Category 1 matters, the Agreement provides that should a dispute remain unresolved after conciliation, the FWC may resolve category 1 matters by arbitration. Therefore, I am satisfied that the Commission has jurisdiction to arbitrate this dispute pursuant to s.739(4) of the Act.

The Evidence

[21] The following witnesses gave evidence and tendered witness statements on behalf of EnergyAustralia:

● Mr Dale Stephen Hogarth by witness statement dated 22 January 2016 and at the hearing. Mr Hogarth is the operations leader for EnergyAustralia. He describes his principle responsibilities as the “overall management of operation activities and associated resources at the Yallourn Power Station”. 1 A supplementary witness statement of Mr Hogarth dated 11 February 20162 and a further supplementary witness statement dated of Mr Hogarth dated 19 February 20163 were also filed.

● Mr Justin Felsbourg by witness statement dated 19 February 2016 and at the hearing. Mr Felsbourg is the operations team leader employed by EnergyAustralia. 4

[22] The following witnesses gave evidence and tendered witness statements on behalf of the CFMEU:

● Mr Geoffrey Thomas Aitken by witness statement dated 12 February 2016 and at the hearing. Mr Aitken is a power worker grade 3 employed at the Yallorn Power Station. Mr Aitken is also currently the lodge president of the CFMEU at the Yallourn Power Station. Mr Aitken describes his role as lodge president as playing a significant role in a range of matters affecting lodge members including negotiating the enterprise agreements, resolving disputes and member grievances and, attending to the running of the lodge and consulting with EnergyAustralia management.  5

● Mr Adam George Smith by witness statement dated 12 February 2016 and at the hearing. Mr Smith is also employed as a power worker having commenced employment at the Yallourn Power Station in the maintenance group. 6 Mr Smith states that he is “willing and able to perform bunker lancing”. 7

Principles of Interpretation of Enterprise Agreements

[23] The parties agree that the principles that apply to the interpretation of enterprise agreements are settled and the parties are in agreement as to the principles to be applied.

[24] 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[2014] FWCFB 7447 (Golden Cockerel). The Full Bench considered, in great detail, the principles to be applied to the interpretation of enterprise agreements.  8 The Full Bench summarised those principles as follows:

1. The Acts Interpretation Act 1901 (Cth) 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.  9

[25] I adopt the principles as set out and applied by the Full Bench in Golden Cockerel and the authorities it refers to within.

Submissions

[26] In the present matter there is a dispute between the parties as to the interpretation and operation of clauses 30, 30.20, 32.2 and 6 of the Agreement.

[27] The questions to be determined are whether:

1. Clauses 30 and 32.20 of the Agreement, together with the reference to ‘cleaning of coal feeder conveyors & chutes’ in the Power Worker role descriptor referred to in clause 32.20, incorporates the task of bunker lancing, thus preventing EnergyAustralia from contracting out the task of bunker lancing without mutual agreement with the operators representatives; and

2. Clause 32.2 of the Agreement, which provides that contractors may be used for the performance of work ‘provided that Operations employees are fully utilised’, and clause 6 which provides that contractors may be used to meet workloads provided job security of employees is not affected, prevents the contracting out of bunker lancing work in circumstances where the work is performed as overtime and not during ordinary hours. 10

Clauses 30 and 32.20

EnergyAustralia

[28] EnergyAustralia submits that:

● Clauses 30 and 32.20 of the Agreement are to be read together, and that the effect of reading the clauses together is that the duties set out in the Operations Role Descriptors cannot be varied during the term of the agreement, other than by mutual agreement between the operator and EnergyAustralia.

● It is necessary to go to the relevant Operations Role Descriptors to determine whether contracting out the bunker lancing work would require a variation to the duties set out in the power workers job descriptor. 11

● The particular duties contained in the power worker job descriptor includes responsibility of ‘cleaning of coal feeder conveyors and chutes’ which does not encompass the task of bunker lancing.

● The task of bunker lancing, as outlined and described by Mr Hogarth, does not fall within the role descriptor.

● The task of bunker lancing essentially involves a person assisted by a team standing above the coal bunker using a 6.2 metre long lance (with a 15 millimetre bore) which is attached to an air hose pushing the coal which has built up on the sides of the bunker until it comes loose to allow coal to flow freely out of the bunker. Additionally, bunker lancing involves standing at the bottom of the bunker and inserting a short lance into the poke-hole doors at the bottom of the bunker.

● Given that the duties set out in the power workers job descriptor do not include bunker lancing, the contracting out of bunker lancing will not vary the power workers’ duties. As a result, because there is no variation to duties, no agreement is required under clauses 30 or 32.20, and these clauses do not prevent the contracting out of the work.

CFMEU

[29] The CFMEU submits that:

● Clause 30 and 32.20 do not restrict the Commission to a narrow enquiry to ascertain whether the duty in question is referred to in the Operations Role Descriptors and thereby caught by these clauses. The CFMEU submits that to do so would be engaging in a kind of narrow and pedantic approach to interpretation of enterprise agreements as cautioned against in Kucks v CSR Limited. 12

● The relevant enquiry is to ask whether on approval of the Agreement the duty of bunker lancing was that of a power worker, which the CFMEU submits is the case.

● The effect of clauses 30 and 32.20 of the Agreement is that EnergyAustralia can only alter the duties of power workers after reaching mutual agreement with the power workers, and mutual agreement with the power worker is required as outsourcing of the task of bunker lancing would alter the duties of power workers.

● In the alternative, that the task of bunker lancing is referred to in the Operations Role Descriptors and thereby caught by these clauses. The CFMEU submits that it is evident from the basic descriptor of the Operations Role Descriptors relevant to power workers that the power workers are required to have a detailed working knowledge and perform work on the station bunkers. The CFMEU contends that this extends to the performance of bunker lancing.

Clauses 32.2 and 6

EnergyAustralia

[30] EnergyAustralia submits that:

● An employee is considered to be ‘fully utilised’ within the meaning of clause 32.2 if they are 100% occupied with work during their ordinary hours. It is submitted the term is to be given its natural and ordinary meaning, read in the context of the stated intention of clauses 6 and 32.2, which is job security.

● An employee’s job security is not threatened by an initiative which will leave employees with sufficient work to perform during their ordinary hours.

● Power workers and other operators will remain fully utilised during their ordinary hours and, notwithstanding the contracting out of bunker lancing, will continue to have the opportunity to work overtime on other tasks.

● Therefore, in circumstances where employees have enough work to keep them occupied during their ordinary hours, EnergyAustralia submits clause 32.2 does not prevent the contracting out of bunker lancing.

CFMEU

[31] The CFMEU submits that:

● Clauses 6 and 32.2 both prohibit EnergyAustralia from engaging contractors and labour hire companies. These clauses express the restriction in different terms. The restriction in clause 6 is focused upon the job security of employees while the restriction in clause 32.2 is focused upon whether the operators are fully utilised. Relevantly, the Agreement does not define ‘job security’ in clause 6 nor what is meant by ‘fully utilised’ in clause 32.2.

● The term ‘job security’ is ascertained by reading clause 6 in its entirety revealing that the term is focused on an employee remaining employed by EnergyAustralia. An employee who does not have sufficient work to put them to use for their ordinary hours is at risk of losing their job due to redundancy.

● It follows that the relevant enquiry is to ask if the engagement of contractors and labour hire companies means that the employees that would otherwise perform that work have sufficient work to put them to use during their ordinary hours.

● The wording in clause 12.2 of the Agreement provides employees may be required to work reasonable overtime. A power worker will therefore only be fully utilised within the meaning of clause 32.2 of the Agreement if they are working their ordinary hours and a reasonable amount of overtime.

● Contracting out the bunker lancing will result in the power workers experiencing a noticeable reduction in overtime worked and as a consequence, these workers will not be fully utilised within the meaning of clause 32.2.

Consideration of clauses 30 and 30.20

[32] The parties submit that the Commission should have regard to the plain and ordinary meaning of the words in the Agreement. However, the parties differ in their interpretation of the Agreement and the words of clauses 30 and 30.20 of the Agreement. Therefore, I am satisfied that the Agreement contains an ambiguity as the words of clauses 30 and 30.20 are susceptible to more than one meaning.

[33] In accordance with the principles in Golden Cockrel, evidence of the surrounding circumstances is admissible to assist the Commission to interpret the Agreement. The resolution of the disputed construction of the Agreement will turn on the language of the Agreement understood having regard to its context and purpose, namely as an enterprise agreement between EnergyAustralia, the CFMEU and employees at the Yallourn Power Station.

Should clause 30.20 be read on its own?

[34] Clause 30.20 is headed ‘roles and responsibilities’ and provides that ‘the classification duties and responsibilities of an employee shall not be changed unless agreed between the employee and the company’.

[35] I do not accept the proposition advanced by the CFMEU that the proper construction is to read clause 30 in isolation. To give proper meaning to the words it is necessary to look to the terms of clause 30.20 and the terms expressed in the role descriptor. To do otherwise would involve an overly technical and pedantic approach and make the terms expressed in the role descriptor redundant.

Interpreting Clause 30 and 30.20

[36] Clause 30.20 incorporates a document external to the Agreement entitled ‘Operations Role Descriptors’ which provides that the role descriptors cannot be varied for the life of the Agreement, except by mutual agreement. The parties agree that there is no mutual agreement to vary those descriptors.

[37] Turning to the document itself, the contention is founded primarily in the interpretation of two bullet points, firstly to ‘ensure coal is delivered to the power station boilers as required’ and secondly ‘cleaning of coal feeder conveyor and chutes’. EnergyAustralia gave evidence that the responsibility of ‘cleaning of coal feeder conveyor and chutes’ involves the task of ‘trimming the feeders’. The task of ‘trimming the coal feeders’ involves standing at the bottom of the bunker and inserting a short air lance up and into the outlet gate to dislodge any coal that is stuck. This results in the coal being discharged through the outlet gates into the primary feeder conveyor. I note that there appears to be agreement between the parties that references to the task of ‘trimming the feeders’ and to the task of ‘cleaning the feeders’ are references to the same task. The parties agree that this task is currently performed during the normal working hours of power workers and on a daily basis.

[38] By contrast, the task of bunker lancing is performed outside the normal working hours of power workers, as part of overtime hours and on an ad hoc basis as required. Some evidence was sought to be led as to the historical basis of this development, the extent and nature of which does not form part of my reasoning. In order to perform the task of bunker lancing, the coal levels in the bunker must be lowered so that access can be gained to the coal which is stuck to the walls of the bunker. This ensures that coal which is removed from the bunker wall can flow down and out of the bunker. The task of bunker lancing is not performed on a daily basis, and it is possible to go a period of months without the need to perform bunker lancing.

[39] There is no dispute that the task of bunker lancing is currently performed by a minimum of five power workers, which includes an operator or driver of the conveyor shuttle, workers lancing the bunker at the top of the bunker and workers lancing the bunker at the bottom. There was evidence in relation to a 2014 health and safety audit that concluded the minimum number of workers required to safely perform the task of bunker lancing. The question before me does not require a consideration of the reasons for that assessment or any analysis of it appropriateness.

[40] The starting point to determine whether the responsibility of ‘cleaning of coal feeder conveyor and chutes’ incorporates the task of bunker lancing is giving the words their ordinary and natural meaning read in the context of the Yallourn Power Station. In doing so, I accept that the first bullet point is a general descriptor and ought not be interpreted to mean literally each and every task engaged in by workers from the mining of coal to the pulverised coal entering the boilers in the power station.

[41] In order to give the words meaning I need to interpret the word ‘chute’. The parties disagree as to the meaning of the word ‘chute’ in the Operations Role Descriptors. The issue is whether the movement of coal by way of conveyor from one chute to another is distinct form the storage of coal in the bunker. I am of the view that the word chute, given its natural and ordinary meaning in the context of the Yallourn Power Station, means a channel through which coal moves from one conveyer belt to another, as distinct from a bunker where coal is temporarily stored. The crux of the issue is whether the movement of coal by way of a chute from one conveyer to another is distinct from the storage of coal in the bunker. The former is a form of free flowing movement, whereas the latter is a receptacle for storage. The bunker in this context is where the coal is held for a period of the normal operation. The length of the storage period is not relevant to this assessment.

[42] Based on the analysis and consideration above, I do not consider that the responsibility of ‘cleaning of coal feeder conveyers and chutes’, including the task of ‘trimming the feeders’, incorporates the task of bunker lancing as they are separate and discreet tasks. Therefore, the task of bunker lancing is not incorporated into the Operations Role Descriptors for power workers.

Consideration of clauses 32.2 and 6

[43] The part of clause 6 of the Agreement relevant to these proceedings is identified above. Clause 6 is concerned with job security.

[44] The relevant part of clause 32.2 of the Agreement is identified above. Clause 32.2 requires a consideration of the meaning of the words ‘fully utilised’. In the context of the Agreement, a fully utilised employee is one who has sufficient work available to them to perform during their ordinary hours across their roster cycle. It is not contested that an employee at the Yallourn Power Station is rostered to work 36 ordinary hours per week averaged across a rostered cycle. Any work performed outside those hours is above their utilisation rate.

[45] Clause 32.2 does not require a utilisation rate that equates to greater than a 100%, and employees are fully utilised if they have sufficient work to perform their ordinary rostered hours averaged out across their roster cycle.

[46] I do not consider that an employee is required to perform a ‘reasonable’ amount of overtime hours in order to be ‘fully utilised’. Clause 12.2 provides EnergyAustralia with an ability to require an employee to work reasonable overtime at overtime rates in certain circumstances. Clause 12.2 does not have the effect of providing employees with an entitlement to reasonable overtime at overtime rates. I consider that such an interpretation goes beyond the words of the Agreement and would lead to a rewriting of the Agreement, rather than interpreting the Agreement as made between EnergyAustralia, the CFMEU and the employees at the Yallourn Power Station.

Conclusion

[47] For the reasons above, I consider that clauses 30 and 32.20 of the Agreement, together with the reference to the responsibility of ‘cleaning of coal feeder conveyors & chutes’ in the power worker role descriptor, does not incorporate the task of bunker lancing.

[48] The outsourcing of the task of bunker lancing would not impact on the job security of power workers as contemplated by clauses 6 and 32.20 of the Agreement.

COMMISSIONER

Appearances:

B Avallone of Counsel, instructed by Minter Ellison, for EnergyAustralia Yallourn Pty Ltd

A Walkaden for Construction, Forestry, Mining and Energy Union

Hearing details:

2016.

Melbourne:

March 1, 2

 1   Exhibit A1, [2]

 2   Exhibit A2

 3   Exhibit A3

 4   Exhibit A7

 5   Exhibit R1, [11]

 6   Exhibit R3

 7   Exhibit R3, [3]

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

 9   Ibid [41]

 10   Outline of submissions of EnergyAustralia, dated 22 January 2016, [1.4]

 11   Exhibit R1, attachment GTA-1

 12   Kucks v CSR Limited (1996) 66 IR 182, 184

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