Forgacs Engineering Pty Limited

[2015] FWC 689

[2015] FWC 689

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.217—Enterprise agreement

Forgacs Engineering Pty Limited
(AG2014/11088)

FORGACS ENGINEERING PTY LTD ENTERPRISE AGREEMENT 2013

Manufacturing and associated industries
DEPUTY PRESIDENT GOSTENCNIK	MELBOURNE, 29 JANUARY 2015

Application for variation of the Forgacs Engineering Pty Ltd Enterprise Agreement 2013.

Introduction

[1] On 22 September 2014 Forgacs Engineering Pty Ltd (Forgacs) applied to the Fair Work Commission (Commission) under s. 739 of the Fair Work Act 2009 (Act) for the Commission to deal with a dispute in accordance with the Forgacs Engineering Pty Ltd Enterprise Agreement 2013 (Agreement). The dispute concerned the proper application of clause 33.1 of the Agreement (Dispute proceeding). The Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (AMWU) was a party to the dispute.

[2] The dispute was listed for arbitration before me commencing on 10 December 2014. At the request of the parties I facilitated a conference before proceeding to deal with the dispute by arbitration with a view to resolving the dispute by agreement.

[3] The parties subsequently resolved the dispute by agreement, the terms of which are recorded in a statement issued by me on 15 December 2014.

[4] On 24 December 2014 Forgacs made application under s 217 of the Act to vary the Agreement. Forgacs is the employer covered by the Agreement. The AMWU supports the Application and is also covered by the Agreement. I have decided to vary the Agreement to remove an uncertainty in the operation of clause 33.1 of the Agreement for the reasons that follow.

Legislative context and principles

[5] Section 217 of the Act provides the following:

“Subdivision B—Variations of enterprise agreements where there is ambiguity, uncertainty or discrimination

217 Variation of an enterprise agreement to remove an ambiguity or uncertainty
(1) The FWC may vary an enterprise agreement to remove an ambiguity or uncertainty on application by any of the following:

(a) one or more of the employers covered by the agreement;
(b) an employee covered by the agreement;
(c) an employee organisation covered by the agreement.

(2) If the FWC varies the enterprise agreement, the variation operates from the day specified in the decision to vary the agreement.”

[6] As I have already indicated above, Forgacs is the employer covered by the Agreement and therefore has standing to make the Application.

[7] As seems clear from the text of s 217 the discretion to vary an agreement may only be exercised if first the Commission is satisfied that there is ambiguity or uncertainty in the agreement. The principles that are to be applied in considering an application under s 217 may be shortly stated:

• The Commission should approach an application in two stages. First, as a jurisdictional pre-requisite, it should identify whether there is an uncertainty or ambiguity. Secondly, if an ambiguity or uncertainty is identified, it should consider whether to exercise its discretion to vary the agreement the subject of the application; 1



• The process of identifying ambiguity or uncertainty involves making an objective assessment of the words used in the provisions under examination. The words used are construed having regard to their context; 2



• The Commission will generally err on the side of finding an ambiguity or uncertainty where there are rival contentions advanced and an arguable case is made out for more than one contention; 3



• However, the Commission must make a positive finding that an agreement the subject of an application under s 217 is ambiguous or uncertain. Prima facie satisfaction of ambiguity or uncertainty is not sufficient; 4



• The mere existence of rival contentions as to the proper construction of the terms of an agreement will also be an insufficient basis to conclude the existence of ambiguity or uncertainty. Such contentions may be self serving. The task is to make an objective judgment as to whether the wording of a provision is susceptible to more than one meaning; 5



• Once an ambiguity or uncertainty has been identified, in exercising the discretion whether to vary the agreement, the Commission is to have regard to the mutual intention of the parties at the time the agreement was made. 6

Is clause 33.1 of the Agreement ambiguous or uncertain?

[8] Clause 33.1 of the Agreement deals with that which is described as a compressed work week arrangement and provides as follows:

33.1 Compressed Work Week Arrangement

Within 6 months of signing the Agreement, the Parties agree to jointly develop a concept model for a rearrangement of the normal working week, based on a compressed work week over a 9-day cycle.

Variations to the concept model may operate to suit the particular requirements for each of the ship building and engineering/ship repair businesses, which will include (i) for Ship Building – 1 fixed and 1 flexible day off over a 4-week cycle, and (ii) for Engineering/Ship Repair – 2 flexible days off over a 4-week cycle. For Ship building, involving a fixed day off on a Friday, any work carried out on this day, would be subject to overtime provisions (ie. First two hours paid at time-and-half and double time thereafter), and any work carried out on the Saturday immediately following the Friday fixed day off would be subject to double-time overtime provisions.

Payment of weekly normal time wages will be equalised over the 2-week cycle.

Following the development and review of the proposed concept model, and prior to the implementation of such change, if it is the view of a Party that the proposed model could adversely affect the operation of the Company and/or its employees, the existing arrangement of the normal working week will remain.

If the Parties reach agreement on a proposed model, the Parties will then agree timing of implementation of such for an initial 3-month trial. The Parties shall conduct a joint review immediately at the completion of the 3-month trial. If as a result of the review a Party proposes a major change to the operation of the compressed work week, the trial can be extended for up to a further 3 month period if required.

A Party with 14 days notice during the trial period, or within 14 days after the expiry of the trial period, may give notice to discontinue, and revert to the pre-existing arrangement of the normal working week set out about at clause 33.

For the purposes of this sub-clause, the view of the AMWU shall be taken to be the view of the Employees, the agreement of the AMWU shall be taken to be agreement of the Employees, and notice given by the AMWU shall be taken to be notice given by the Employees.

[9] In or about November 2013, Forgacs and the AMWU developed a concept model for the rearrangement of the normal working week, based on a compressed work week over a 9-day cycle.

[10] On 5 February 2014, the initial 3-month trial of the concept model for the rearrangement of the normal working week commenced. The initial three month trial ended on 6 May 2014.

[11] During the period of initial trial and following the conclusion of the initial trial, Forgacs and the AMWU met on several occasions to review the operation of the concept model for the rearrangement of the normal working week.

[12] On 23 May 2014, Forgacs and the AMWU each proposed changes to the operation of the compressed work week. Forgacs proposed changing the Rostered Days Off (RDO) for shipbuilding from 1 flexible RDO and 1 fixed RDO to 2 fixed RDOs. The AMWU proposed changing the RDO’s for shipbuilding from 1 flexible RDO and 1 fixed RDO to 2 flexible RDOs.

[13] On 3 June 2014, Forgacs and the AMWU agreed to trial of the CWWA with changes for a further 3 month period and agreed that trial would commence on 25 June 2014 and end on 23 September 2014. Forgacs maintained this was an extension of the trial within the meaning of clause 33.1. The AMWU took a contrary view.

[14] On 17 September 2014, Forgacs gave its employees and the AMWU notice to discontinue the trial and revert to the pre-existing arrangement of the normal working week set out in clause 33 of the Agreement.

[15] A central issue in the Dispute proceeding was whether an extension of the trial contemplated by clause 33.1 could only be for a period which would ensure that the trial as extended would be complete by no later than six months from the date the initial trial commenced. The resolution of this question would in turn determine the validity of a notice of discontinuance given by Forgacs on 17 September 2014.

[16] During the course of the Dispute proceeding, the parties advanced competing constructions of clause 33.1 of the Agreement. For Forgacs it was submitted that clause 33.1 of the Agreement allows parties to extend an initial three month trial period for up to a further three month period if a party proposes a major change to the operation of the compressed work week. Properly construed, clause 33.1 allowed for an initial trial period, followed by a review at the conclusion of the initial trial period, and then if during the review major change to the compressed working week arrangement was proposed, the initial trial could be extended for a period of up to three months. There was no requirement for extended period to commence immediately upon the conclusion of the initial trial period or for the extended period to conclude no later than 6 months after the initial trial commenced.

[17] The AMWU submitted that clause 33.1 of the Agreement provided for a maximum period of a trial of six months from commencement. The initial period and the extended period could together in total be no longer than six months from the commencement of the initial period. That the extended trial period must end no later than six months from the commencement of the initial trial period is borne out by the words “extended for up to”.

[18] Whilst I consider that the view taken by Forgacs about the proper construction of clause 33.1 of the agreement is a better view, the construction contended for by the AMWU is properly arguable and not without merit. Taking into account the rival contentions and on a fair reading of the provisions at issue I am satisfied that clause 33.1 of the Agreement is uncertain, in that it is not clear whether any extended trial period can be a separate period of three months in duration or whether the length of any extended period is determined by reference to the date on which the extended period commences and the date ending six months after the commencement of the initial trial.

Removal of the uncertainty in clause 33.1

[19] In order that the uncertainty identified is removed, Forgacs proposes the following amendments.

[20] First it proposes that paragraph 5 of clause 33.1 be amended to include the words underlined as follows;

If the Parties reach agreement on a proposed model, the Parties will then agree timing of implementation of such for an initial 3-month trial. The Parties shall conduct a joint review immediately at the completion of the 3-month trial. For the avoidance of doubt, “immediately” will be taken to be as soon as reasonably practicable as can be arranged between the parties. If as a result of the review a Party proposes major change to the operation of the compressed work week, the trial can be extended following the review, for up to a further 3 month period if required, starting and ending on dates agreed to between the parties.

[21] Secondly, it proposes that paragraph 6 of clause 33.1 be amended to include the words underlined as follows;

A Party with no less than 14 days notice during the trial period (which, for the avoidance of doubt, includes any extension to the trial period), or within 14 days after the expiry of the trial period, may give notice to discontinue, and revert back to the pre-existing arrangement of the normal working week set out about (sic) at clause 33.

[22] I am satisfied that the proposed amendments would remove the uncertainty identified in clause 33.1 of the Agreement.

[23] I am also satisfied that it is desirable and appropriate that I exercise my discretion to vary the agreement to remove the uncertainty because, as is evident from the discussion earlier above, the construction of the clause and rights that might be exercised under the clause have been the subject of disputation and that disputation arose directly as a consequence of the uncertainty identified. The positions adopted by the parties in dispute were each arguable on a fair reading of clause 33.1 That the parties are in agreement as to the manner in which the uncertainty should be removed is also a factor that weighs in favour of the exercise my discretion to vary the agreement.

[24] Since the uncertainty identified impacts on steps already taken by the parties, it seems to me appropriate that the variation of the agreement should operate from the date on which the Agreement commenced operation.

[25] An order giving effect to this decision is separately issued in PR560511.

DEPUTY PRESIDENT

 1   See Re Tenix Defence Systems Pty Ltd Certified Agreement 2001 - 2004 PR917548 at [28], [32] and [35]

 2   Ibid at [29]

 3   Ibid at [31]

 4   See Colnvest Ltd v Visionstream Pty Ltd (2004) 134 IR 43 at [57]

 5   See Re Civil Construction Corporation Enterprise Agreement PR939346; SJ Higgins v CFMEU PR903843; RE CFMEU Appeal Print R2431.

 6   See Re Tenix Defence Systems Pty Ltd Certified Agreement 2001 - 2004 PR917548 at [32]

Printed by authority of the Commonwealth Government Printer

<Price code C, AE402153  PR560505>