Griffin Coal Mining Company Pty Ltd v Construction, Forestry, Mining and Energy Union
[2015] FWC 4899
•27 JULY 2015
| [2015] FWC 4899 [Note: An appeal pursuant to s.604 (C2015/5710) was lodged against this decision - refer to Full Bench decision dated 9 November 2015 [[2015] FWCFB 7424] for result of appeal. |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.739—Dispute resolution
Griffin Coal Mining Company Pty Ltd
v
Construction, Forestry, Mining and Energy Union
(C2015/1945) and (C2015/2187)
and
Construction, Forestry, Mining and Energy Union
v
Griffin Coal Mining Company Pty Ltd
(C2015/1955)
COMMISSIONER WILLIAMS | PERTH, 27 JULY 2015 |
Applications to deal with a dispute.
[1] This decision concerns three applications made under the provisions of the Griffin Coal (Production) Collective Agreement 2012 [AE895579](the Agreement). Each of the applications generally concerns the same issue which is a dispute between the parties regarding the desire of the Griffin Coal Mining Company Pty Ltd (Griffin) to introduce a new additional roster.
[2] The Agreement was approved on 7 August 2012. The nominal expiry date of the Agreement is 31 July 2016.
[3] The parties have agreed upon the questions to be determined by the Commission which are as follows:
(1) Do the terms of the Agreement allow Griffin to unilaterally implement the roster at Annexure B to the application in matter C2015/1945 (New Roster)?
(2) If the answer to (1) is no, do the terms of the Agreement allow the Fair Work Commission (the Commission) to order that the New Roster be implemented?
(3) If the answer to (2) is yes, should the Commission make an order implementing the New Roster?
(4) If the answer to (1) or (3) is yes, can Griffin and the Construction, Forestry, Mining and Energy Union (CFMEU) agree on the annualised salaries for the employees of Griffin who will be working the New Roster under the Agreement?
(5) If the answer to (4) is no, what does the Commission determine are the annualised salaries for the employees of Griffin who will be working the New Roster under the Agreement?
Background
[4] The Collie Basin south of Perth is currently the only domestic source of thermal coal supply in Western Australia. There are two coal mine operators in the Collie Basin, Yancoal Premier and Griffin.
[5] Griffinowns several mining tenements around the Collie area in Western Australia. It currently mines coal at the Ewington mines.
[6] Griffin has three customers: Bluewaters Power Pty Ltd, BHP Billiton Worsley Alumina Pty Ltd and Cockburn Cement Ltd which together require, on average, a total of 2.85 million tonnes of coal per year.
[7] Griffin has been operating at a loss since at least January 2010, when it was placed into voluntary administration by its previous owners. On 28 February 2011 Lanco Infratech Limited acquired Griffin from the administrators. Since acquisition, Griffin has continued to incur very significant operational cash losses totalling approximately $160 million.
[8] Griffin currently employs production employees whose employment is governed by the provisions of the Agreement.The production employees are primarily responsible for running the waste removal and coal extraction operations, including the coal handling plant.
[9] The majority of production employees currently work a roster of 4 days on, 4 days off on two 12 hour day shifts and two 12 hour night shifts. There are 4 panels which enable operations to occur 24 hours per day, 7 days a week, throughout the year. The remaining production employees also work 4 days on, 4 days off on 12 hour shifts, but they do not work night shifts.
[10] The production employees are entitled to an annualised salary under the Agreement, which is currently calculated based on double time rates for Saturday and Sunday shifts, overtime hours at one and a half time and double time rates, and a 25% loading for night shifts. The current annualised salaries are calculated on the basis that employees will work 35 ordinary time hours and up to 7 overtime hours per week.
[11] One measure Griffin says is necessary to assist it to restore the financial viability of its operations is for there to be a significant reduction in labour costs.
[12] Griffin argues there is not a need to have all production employees working on the current rosters to meet current customer demands. Consequently an additional roster is required.
[13] Griffin has proposed to its employees that an additional roster be implemented to complement current production and substantially reduce labour costs. The majority of production employees would then work on this roster.
[14] Under the New Roster labour costs will be lowered by reducing the number of hours worked per week and reducing the number of worked hours that attract a loading or penalty rate.
[15] Under the New Roster, production employees will work 5 shifts of 7 hours per shift Monday to Friday and have 2 days off (Saturday and Sunday).
[16] The shifts will change over the period of four weeks, as follows:
(a) one week is comprised of shifts commencing at 6.00 a.m. and finishing at 1.00 p.m.;
(b) one week is comprised of shifts commencing 12.00 p.m. and finishing at 7.00 p.m.;
(c) one week is comprised of shifts commencing at 6.00 p.m. and finishing at 1.00 a.m.; and
(d) one week is comprised of shifts commencing at 12.00 a.m. and finishing at 7.00 a.m.
[17] On any given week, each of the four crews will work 1 of the 4 shift times. Each crew cycles through each of the 4 different shift times over a 4 week period.
[18] The production employees will continue to work 35 ordinary hours per week. The average hourly rate for ordinary hours will remain unchanged.
[19] Employees working on the New Roster would receive an annual salary of approximately 38% less than the annualised salary currently prescribed in the Agreement.
[20] Following consultations the employees have not agreed to Griffin implementing the New Roster.
Jurisdiction
[21] The CFMEU submits that there is no jurisdiction for the Commission to arbitrate and determine the questions set out in [3] above.
[22] There is a need to distinguish between whether the Commission generally has the jurisdiction under section 739 of the Fair Work Act 2009 (the Act) to determine these three applications by arbitration as distinct from whether the Commission, under the terms of the Agreement, is able to determine any of the particular questions as they are framed.
[23] With respect to jurisdiction generally it is clear from the applications that the CFMEU has replied to Griffin’s proposal to introduce the New Roster by consulting with its Members, and then with Griffin and has advised Griffin by letter that its Members are opposed to the introduction of the New Roster.
[24] Application C2015/1945 was made by Griffin on 4 March 2015 and seeks the Commission arbitrate and set the appropriate annualised salary for the New Roster. The application asserts the Agreement permits the introduction of new rosters but provides that the annualised salary to be applied to a new roster if it cannot be agreed is to be determined by the Commission.
[25] Application C2015/1955 made on 5 March 2015 by the CFMEU was made on a form F10 which is an application for the Commission to deal with a dispute in accordance within a dispute settlement procedure and was expressly referred to the Commission pursuant to the dispute settlement procedure in the Agreement. That application refers to the fact that Griffin has previously made an application to the Commission (C2015/1945) for determination of the annualised salaries for production employees based on the New Roster. The CFMEU say they oppose the implementation of the New Roster and seek that the dispute be dealt with prior to the determination of new annualised salaries for production employees under the Agreement. Under the heading relief sought the CFMEU say they seek conciliation in the first instance but if the matter cannot be resolved seeks the matter be programmed for arbitration. Their application says that should arbitration be necessary they seek a determination that Griffin cannot implement the New Roster.
[26] Application C2015/2187 made on 20 March 2015 by Griffin refers to the earlier applications and the factual background and seeks the Commission arbitrate the disputed matter and order that the New Roster be implemented and the Commission set the annual salary for that New Roster in terms proposed by Griffin. Reliance is put upon clause 20−Dispute Resolution Procedure of the Agreement and clause 21−Consultation of the Agreement.
[27] The Dispute Settlement Procedure and the Consultation clause of the Agreement is set out below:
“20. Dispute Resolution procedure
Avoidance of Disruption to Operations
20.1 The parties agree that they are committed to the avoidance of any disruption to operations due to disputes and agree that the continued supply of coal to customers is critical I essential to the growth and survival of Griffin, its employees and the industry.
20.2 Griffin, its employees and the Union (where the union is the employees' chosen representative) will genuinely attempt to resolve all disputes at the workplace level.
Grievance and/or Disputes Procedure
20.3 If an employee raises a grievance, the following procedure will apply during which time work will continue in accordance with the reasonable direction of Griffin. During this procedure, the employee may elect to involve the Union representative to assist in the resolution of the dispute.
Step 1
Details of the dispute or grievance will be discussed (verbally) between the employee and the employee's immediate supervisor. The supervisor will provide a response to the issue as soon as practicable and where possible within 48 hours.
Step 2
If resolution has not been achieved, the matter will be referred in writing by the employee to the relevant superintendent or supervisor for further discussion involving the above parties. The superintendent will provide a written response to the issue as soon as practicable and where possible within 48 hours.
Step 3
If resolution has not been achieved, the matter may be referred in writing by the employee to the appropriate manager. The manager;
a) is of the opinion that the issue can not be resolved within 48 hours the manager will advise in writing a revised timeframe to achieve resolution
b) will arrange discussions between the parties in an attempt to resolve the issue
c) will advise in writing his outcomes of the investigation
Step 4
If the matter remains unresolved it will be referred for discussion to the nominated senior personnel of Griffin and may, at the election of the employee, involve the district official representative of the Union or other representative of the employee’s choice.
Step 5
If discussions at the workplace Level do not resolve the dispute, a party to the dispute may refer the matter to Fair Work Australia for conciliation, mediation and/or arbitration.
20.4 The parties to the dispute agree to be bound by a decision made by Fair Work Australia in accordance with this term. (This clause does not diminish the right to appeal the decision at higher jurisdictions)
Steps may be bypassed
20.5 Subject to agreement between Griffin and the employee and/or the Union, steps in this dispute resolution procedure may be bypassed.
Representation
20.6 The employee and Griffin are each entitled to engage a representative of their choice to represent either party during the Fair Work Australia process including the services of a legal practitioner.
21. Consultation
21 .1 This term applies if:
(a) Griffin has made a definite decision to introduce a major change to production, program, organisation, structure, or technology in relation to its enterprise; and
(b) the change is likely to have a significant effect on employees of Griffin.
21.2 Griffin must notify the relevant employees of the decision to introduce the major change.
21.3 The relevant employees may appoint a representative (for the purpose of the Agreement the CFMEU will be the recognised representative) for the purposes of the procedures in this term.
21.4 If;
(a) a relevant employee appoints, or relevant employees appoint, a representative for the purposes of consultation; and
(b) the employee or employees advise Griffin of the identity of the representative; Griffin must recognise the representative.
21.5 As soon as practicable after making its decision, Griffin must:
(a) discuss with the relevant employees:
(i) the introduction of the change; and
(ii) the effect the change is likely to have on the employees; and
(iii) measures the employer is taking to avert or mitigate the adverse effect of the change on the employees; and
(b) for the purposes of the discussion - provide, in writing, to the relevant employees:
(i) all relevant information about the change including the nature of the change proposed; and
(ii) information about the expected effects of the change on the employees; and
(iii) any other matters likely to affect the employees.
21.6 However, Griffin is not required to disclose confidential or commercially sensitive information to the relevant employees.
21.7 Griffin must give prompt and genuine consideration to matters raised about the major change by the relevant employees.
21.8 If a term in the enterprise agreement provides for a major change to production, program, organisation, structure or technology in relation to the enterprise of Griffin, the requirements set out in subclauses (2), (3) and (5) are taken not to apply.
21.9 In this term, a major change is likely to have a significant effect on employees if it results in:
(a) the termination of the employment of employees; or
(b) major change to the composition, operation or size of the employer's workforce or to the skills required of employees; or
(c) the elimination or diminution of job opportunities (including opportunities for promotion or tenure); or
(d) the alteration of hours of work; or
(e) the need to retrain employees; or
(f) the need to relocate employees to another workplace; or
(g) the restructuring of jobs.
21.10 In this term, relevant employees means the employees who may be affected by the major change.
21.11 If the changes through consultation cannot be agreed upon by Griffin Management or its employees in the disputed matter can be referred to Fair Work Australia for conciliation or arbitration.”
[28] Considering these terms of the Agreement and the terms of the three applications that have been made and the nature of the dispute I am satisfied that the dispute may be determined by the Commission through clause−20 Dispute Resolution Procedure as is provided for at Step 5.
[29] Alternatively I am satisfied in this case that the New Roster Griffin seeks to implement is a major change to the enterprise’s program and this major change is likely to have a significant effect in terms of the alteration to the hours of work for some employees. Clearly the changes sought by Griffin have not been agreed through consultation and therefore I am satisfied the disputed matter can arbitrated by the Commission as provided for in subclause 21.11 of clause−20 Consultation.
The evidence
[30] At the hearing of this matter witness statements were tendered by Griffin from Mr Raj Kumar Roy (Mr Roy) the President of Griffin and Mr Vanga Vinod Kumar (Mr Kumar) the Executive Director of Griffin. For the CFMEU a witness statement was tendered from Mr Gary Norman Wood (Mr Wood) the District Secretary of the Western Australian District Branch of the CFMEU - Mining and Energy Division. Neither party sought to cross-examine the evidence of the others’ witnesses however the CFMEU objected to the relevance of Griffin’s witnesses given the nature of the matters to be determined and Griffin identified various objections with respect to Mr Wood’s evidence ranging from it being it inadmissible opinion evidence to some evidence being hearsay, speculation or conclusion.
Submissions
Griffin’s submission
[31] Griffin argues that the objectives of the Agreement set out in clause 5 provide the guiding principle for how the Agreement should be construed. Those objectives refer to securing the future of Griffin and the employees through efficient and effective operating practices and minimising the cost of operations. The objectives refer to the parties being jointly committed to a process of continuous improvement and making the mine cost efficient and productive.
[32] Griffin submit the evidence is that there is a need for labour costs to be reduced given the total costs of production are above the fixed price received per tonne of coal from Griffin’s customers. The evidence is that the total wages paid to production, maintenance and staff employees was the highest single operational cost of the business at around 43% of total operating costs.
[33] As of April 2015 the total wages paid to production employees was approximately 26% of Griffin’s total operating costs.
[34] Griffin says its planning demonstrates there is not any need to have all production employees working on the current roster in order to meet current customer demand and so an additional new roster could be introduced as they propose.
[35] Griffin submits that there is nothing in the Agreement that prevents Griffin as the employer introducing the New Roster and this is a reasonable exercise of managerial prerogative.
[36] Griffin recognises that the exercise of managerial prerogative is not unfettered and refers to the relevant principles set out in the case of CFMEU v HWE Mining Pty Ltd 1.
[37] Griffin submits that in the absence of ambiguity and giving the relevant words in the Agreement, their ordinary meaning, there is nothing which can be construed as preventing Griffin from exercising its managerial product to introduce the New Roster. Griffin submits that the introduction and implementation of the New Roster would not be an unjust or unreasonable exercise of its managerial prerogative.
[38] Griffin submits that the evidence of its witnesses demonstrates that Griffin’s goal of reversing its significant losses would be assisted by the New Roster. It is the assessment of Griffin’s managers that Griffin can meet the anticipated supply requirements for the next two years with the majority of its production employees working the New Roster. Consequently the additional New Roster will allow Griffin to meet its current coal supply requirements and significantly reduce its labour costs. These changes are a pre-requisite for the improved profitability of Griffin which is a prerequisite for its ongoing operation.
[39] With respect to the relevant terms of the Agreement Griffin note that subclause 9.2 set out below refers to the current roster and does not prescribe that the current rosters will be the only rosters that can be worked.
“9 Hours of Work and Rosters
Hours of Work
9.1 The ordinary hours of work in this Agreement average 35 hours per week. The current annualised salary in Schedule A includes a payment for an average of an additional 7 hours per week calculated at overtime rates. The average weekly hours of work for each full-time employee are 42 hours for Schedule A. The parties acknowledge that these hours are reasonable.
Rosters
9.2 The current roster Employees will work is in Schedule C. Shift rosters will specify the normal commencing and finishing times of ordinary working hours of each shift. In accordance with Clause 9.3 these times may be varied by Griffin to maximise plant utilisation, operational effectiveness and efficiency for genuine operational needs.
Start and Finish Times and Locations
9.3 Shift start and finish times within a panel may be staggered (up to a maximum of 1 hour) and may be varied by Griffin to meet its operational requirements.
9.4 Each shift will start and finish at the nominated bathroom unless otherwise agreed between Griffin and the majority of affected employees.
9.5 An employee shall be provided with a minimum of 12 hours notice of a change to the location that they normally start or finish their shift, provided that a lesser period of notice may be agreed between Griffin and the employee. …”
[40] Griffin acknowledges there are numerous references to 12 hour shifts in the Agreement however argue that does not indicate that they are the only shifts or rosters which can be worked. Griffin submits that these references do no more than reflect the existing roster at the time the Agreement was made and if they were the only type of roster that could be worked the Agreement could have had said this expressly.
[41] Importantly Griffin submits subclause 10.1 specifically contemplates the introduction of a new roster. Under this subclause, set out below, the introduction of a new roster requires a new annualised salary to be agreed or determined. There is a mechanism for the calculation of an annual salary referred to in this provision.
“10. Salaries and Other Benefits
Annualised salary
10.1 Subject to this Agreement each employee will be entitled to an annualised salary in accordance with Schedule A. Provided that where a new roster is introduced the annualised salary in Schedule A will not be payable to the affected employees and a new annualised salary will be agreed (or determined by FWA). The new annualised salary must be calculated using the principles in Schedule A. …”
[42] Griffin submit that if the Agreement was intended to operate in a way which prohibited the introduction of a new roster or shift length in the absence of agreement between the parties that would have been an obvious drafting requirement and a term could have been unambiguously expressed to that effect.
[43] Some evidence was provided to the Commission by Griffin as to the negotiations leading up to the making of the Agreement. Griffin concede that evidence does not demonstrate any mutual understanding between the parties as to the construction of the Agreement.
[44] What is objectively known is that the predecessor agreement to the Agreement was the Griffin Coal (Production) Collective Agreement 2009 [AC320057] (the 2009 Agreement). The 2009 Agreement was made under the Workplace Relations Act 1996.
[45] A number of the provisions in the Agreement relevant to this matter are different from similar provisions in the 2009 Agreement. These similar provisions from the 2009 Agreement are set out below.
“9. Hours of Work and Rosters
Hours of Work
9.1 The ordinary hours of work in this Agreement average 35 hours per week. The annualised salary in Schedule A includes a payment for an average of an additional 7 hours per week calculated at overtime rates. The average weekly hours of work for each full-time employee shall be 42 worked in accordance with a four panel roster (12 hour shifts) or two panel roster (12 hour shifts). The parties acknowledge that these hours are reasonable.
Rosters
9.2 Employees will work the roster in Schedule B. Should Griffin wish to introduce a different roster, Griffin will consult with the employees and their elected representative on the proposed roster. In the event that agreement cannot be reached following consultation, Griffin may give 28 days written notice to the affected employees of Griffin's intention to introduce the proposed roster.
9.3 The affected employees may, within 7 days of the receipt of the written notice under subclause 9.2, advise Griffin in writing whether they dispute the introduction of the proposed roster. Unless agreed otherwise Griffin shall, within 7 days of the receipt of the written dispute notification, refer the dispute to the Commission for conciliation. Despite the Dispute Resolution Procedures in this Agreement, the powers of the Commission in relation to disputes notified under this subclause are limited to conciliation. For the avoidance of doubt, where agreement is not reached the proposed roster shall not be introduced.
Start and Finish Times and Locations
9.4 Shift start and finish times within a panel may be staggered (up to a maximum of I hour) and may be varied by Griffin to meet its operational requirements.
9.5 Each shift will start and finish at the nominated bathroom unless otherwise agreed between Griffin and the majority of affected employees.
9.6 An employee shall be provided with a minimum of 12 hours notice of a change to the location that they normally start or finish their shift, provided that a lesser period of notice may be agreed between Griffin and the employee. …” (Underlining added)
“10. Salaries and Other Benefits
Annualised salary
10.1 Subject to this Agreement each employee will be entitled to an annualised salary in accordance with Schedule A - Salaries. Provided that where a new roster is introduced the annualised salary in Schedule A will not be payable to the affected employees and a new annualised salary will be agreed (or determined by the Commission). The new annualised salary must be calculated using the principles in Schedule A. …”
“22. Variations to Agreement
22.1 Any variation, amendment, deletion or addition to this Agreement (including those that may arise from subclause 10.1) shall be in accordance with the Act and lodged with the Workplace Authority.
Schedule A – Salaries
4 Panel
Classification | Commencement Date | 1st Anniversary of Commencement Date |
Level 3 - Production Employee | $90,365 | $90,365 |
Level 2 - Production Employee | $105,000 | $110,250 |
Level 1 - Production Employee | $107,000 | $112,350 |
2 Panel
Classification | Commencement Date | 1st Anniversary of Commencement Date |
Level 3 - Production Employee | $82,880 | $82,880 |
Level 2 - Production Employee | $96,270 | $101,096 |
Level 1 - Production Employee | $98,110 | $103,026 |
Level 3 -Production Employee
An employee starting work with Griffin who is inexperienced in mining or related work will commence as a Level 3 Production Employee. Once the employee is trained to a point where the employee is assessed and authorised as competent in an operational skill (truck I dozer etc.) they will be appointed to Level 2. Griffin commits to provide the necessary training for such assessment to occur within a 6 month period.
Level 2 - Production Employee
An experienced employee authorised by Griffin as competent to perform work in all operational circumstances.
Level 1 - Production Employee
Appointment from Level 2 Production Employee to Level I Production Employee will be determined by Griffin and signed off by senior management, taking into account the following factors:
- attendance at work;
- safety performance;
- skill and competency; and
- business requirements.
For the purpose of this Agreement, the ordinary hourly rates shall be in accordance with the table below:
Classification | Commencement Date | 1st Anniversary of Commencement Date |
Level 3 - Production Employee | $27.48 | $27.48 |
Level 2 - Production Employee | $31.92 | $33.52 |
Level 1 - Production Employee | $32.53 | $34.16 |
Calculation Principles ordinary hourly rate
The ordinary hourly rate is determined by dividing the annual salary by 6.5 and then by 506. The roster in schedule B .of this Agreement has a cycle of 8 weeks. It follows that there are 6.5 roster cycles in one year. An employee is paid the equivalent of 506 single time hours (paid hours equivalent) in each roster cycle. This is based upon a 12 hour shift being made up of 10 hours at single time; and 2 hours at double time.
In each roster cycle an employee works:
(a) 20 shifts that fall on Monday to Friday;
(b) 4 shifts that fall on Saturday; and
(c) 4 shifts that fall on Sunday
There are 14 night shifts for which a 25% loading has been included in the annualised salary.
Applying the foregoing the paid hours equivalent in each roster cycle is as follows:
Work Arrangement | Paid Hours Equivalent |
20 x Monday to Friday shifts x I 0 hours at single time | 200 |
20 x Monday to Friday shifts x 2 hours at double time | 80 |
4 x Saturday shifts x 4 hours at one and a half time | 24 |
4 x Saturday shifts x 8 hours at double time | 64 |
4 x Sunday shifts x 12 hours at double time | 96 |
14 x Night shifts x 12 hours at 0.25% loading | 42 |
Total | 506 |
Example - 4 Panel Roster
$90,365 per annum divided by 6.5 roster cycles = $13,902.30 per cycle divided by 506 paid hours equivalent each roster cycle= $27.47 per ordinary hour.” (Underling added).
[46] There was no provision similar to clause 21−Consultation of the Agreement in the 2009 Agreement.
[47] Griffin submits that the removal from the 2009 Agreement of the absolute employee veto set out in subclause 9.3 above over changes to rosters, in conjunction with the removal of the express prohibition on the Commission arbitrating any disputed alternative roster, should be interpreted as demonstrating that under the Agreement as it is today the employees are not empowered to prevent the introduction of a new roster by not agreeing to it nor is the Commission prohibited from determining any disputed roster by arbitration.
[48] Griffin acknowledges that many of the terms of the Agreement that prescribe conditions of employment for the employees are expressly based on 12 hour shifts. Griffin acknowledges that those production employees who would work the New Roster will no longer be working 12 hour shifts nor will they be working 42 hours per week.
[49] Griffin submits that as a result the following clauses of the Agreement will not apply to production employees while they are working the New Roster:
(a) clause 4.1 – Definition of Salary Rate;
(b) clauses 8.15 and 8.16 – Types of Employment;
(c) clause 8.27 – Casual Employees;
(d) clause 9.6 – Breaks;
(e) clauses 9.12 and 9.13 – Payment for working outside of rostered hours;
(f) clause 9.14 – Payments for Emergency Call Outs;
(g) clause 10.4 – Relief Supervisor Allowance;
(h) clause 13.1 – Annual leave;
(i) clauses 14.4, 14.5 and 14.14 – Personal leave;
(j) clause 15.1 – Long service leave; and
(k) clause 24.1 – Union Meetings and Training.
[50] Griffin submits that when the terms of an enterprise agreement do not regulate or adequately regulate, all of the terms and conditions of that employment, it would be proper and practical, to look beyond the enterprise agreement for assistance.
[51] In some cases, that assistance will come from a contract of employment. In other cases, it will come from the relevant Modern Award, which would otherwise set the safety net for employee entitlements and provides an industry baseline. Sometimes, it will be mandated by statute, such as the National Employment Standards.
[52] It is submitted that if practically required, these matters could be spelled out in writing to the employees working the New Roster by Griffin and in this way the employees would be aware of what their entitlements will be that take the place of the above clauses in the Agreement set out in [49].
[53] So it is submitted the fact that the New Roster, if implemented, would render a wide range of clauses in the Agreement unworkable for the affected employees is not an impediment to Griffin introducing the New Roster nor is it a basis to conclude that such a roster based other than on 12 hour shifts cannot be introduced.
[54] Accordingly, Griffin Coal submits that the questions to be determined should be answered as follows:
(1) Do the terms of the Agreement allow Griffin to unilaterally implement the New Roster? - Yes (the Agreement does not govern or prevent it).
(4) If the answer to (1) or (3) is yes, can Griffin and the CFMEU agree on the annualised salaries for the employees of Griffin who will be working the New Roster under the Agreement? - No (agreement has not been reached).
(5) If the answer to (4) is no, what does the Commission determine are the annualised salaries for the employees of Griffin who will be working the New Roster under the Agreement? - The annualised salaries should be those in paragraph 64 of Griffin’s outline of submissions.
[55] In the alternative, if the answer to (1) above is ‘No’ and Griffin is not able to unilaterally implement the New Roster, Griffin submits that the questions be answered as follows:
(2) If the answer to (1) is no, do the terms of the Agreement allow the Commission to order that the New Roster be implemented? - Yes
(3) If the answer to (2) is yes, should the Commission make an order implementing the New Roster? - Yes
(4) Can Griffin and the CFMEU agree to annualised salaries for employees for Griffin who will be working the new roster under the Agreement? - No (agreement has not been reached).
(5) In the alternative, if Griffin and the CFMEU cannot agree on annualised salaries, what does the Commission determine are the annualised salaries for the employees of Griffin who will be working the New Roster? - The annualised salaries should be those in paragraph 64 of Griffin’s outline of submissions.
The CFMEU’s submission
[56] The CFMEU argue it is not possible under the terms of the Agreement for Griffin to introduce the New Roster.
[57] Firstly the CFMEU point out that clause 7−Application of the Agreement goes to considerable lengths to expressly state that the Agreement is the entire agreement between the parties.
[58] This position is consistent with the statement by the Full Court in Toyota Motor Corporation Australia Ltd v Marmarra 2that, “It is as clear as may be that it was an object of the agreement to set down the specific terms and conditions that would govern the employment of employees covered by it until the nominal expiry date.”
[59] The proposal for the New Roster seeks to re-engineer the Agreement which is plainly based upon 12 hour shifts with included overtime into a roster more akin to a standard industry Award.
[60] The proposed consequential changes to annualised salary will result in a substantial drop in remuneration and a significant proportion of production employees will be subject to a drop in remuneration in excess of $50 000 per annum.
[61] In addition if the changes occurred there would be a consequential dramatic negative impact on employees’ leave and redundancy entitlements.
[62] Given the parlous economic state of Griffin as explained in their evidence employees are very concerned that if they in due course are made redundant by Griffin there will be a reduction in their redundancy entitlements similar to the 38% reduction in their annualised salary. Mr Wood in his evidence estimates that if all the employees were made redundant under the Agreement currently then redundancy payments in aggregate of approximately $30 million would be owed to the employees by Griffin. However if this redundancy situation was to occur after the New Roster and the new reduced annualised salary was in place this amount would be reduced in aggregate by approximately $11 million. This does not take into account the similarly reduced entitlements to accrued annual leave, personal leave or long service leave that would be paid out on termination.
[63] The CFMEU argue that the merits in favour of making the changes in the New Roster as put forward by Griffin are irrelevant. Rather the question for the Commission is whether the proposed alterations to the roster arrangements can be considered at all in these proceedings.
[64] The CFMEU submit that Griffin’s central contention that the terms of the Agreement permit it to make the changes to the roster it proposes ignores the fact that the Agreement is predicated upon a 12 hour roster and does not contemplate an alteration of the scale and scope proposed by Griffin.
[65] The clauses concerned with hours of work and rosters are clause 9 and Schedule C of the Agreement which provide:
“9 Hours of Work and Rosters
Hours of Work
9.1 The ordinary hours of work in this Agreement average 35 hours per week. The current annualised salary in Schedule A includes a payment for an average of an additional 7 hours per week calculated at overtime rates. The average weekly hours of work for each full-time employee are 42 hours for Schedule A. The parties acknowledge that these hours are reasonable.
Rosters
9.2 The current roster Employees will work is in Schedule C. Shift rosters will specify the normal commencing and finishing times of ordinary working hours of each shift. In accordance with Clause 9.3 these times may be varied by Griffin to maximise plant utilisation, operational effectiveness and efficiency for genuine operational needs.
Start and Finish Times and Locations
9.3 Shift start and finish times within a panel may be staggered (up to a maximum of 1 hour) and may be varied by Griffin to meet its operational requirements. …”
“Schedule C – Roster
2 Panel Roster
A roster in the sequence of four days on followed by four days off followed by four days on followed by four days off. Normal hours of work will be 6:30am to 6:30pm.
4 Panel Roster
A roster in the sequence of two days on followed by two nights on followed by four days off. Normal hours of work will be 6:30am to 6:30pm and 6:30pm to 6:30am.”
[66] The CFMEU note in particular, that subclause 9.3 contains the onlymechanism in clause 9, or anywhere else in the Agreement, whereby employees’ rosters may be varied (aside from temporary changes allowable pursuant to subclauses 9.7 to 9.10 of the Agreement). Subclause 9.3 of the Agreement allows for start and finish times ‘within a panel’ to be staggered or varied by Griffin to meet its operational requirements. ‘Panel’ is defined in the Agreement in subclause 4.1 as “those employees working on the same Shift within a roster.”
[67] It is submitted subclause 9.3 of the Agreement does not allow for the variation of the length of a shift, the total of ordinary hours, or the average hours worked by employees. While the CFMEU accepts that the commencing and finishing times of a roster may vary in accordance with subclause 9.3, the Agreement as a whole is otherwise entirely premised upon production employees working 12 hour shifts (35 ordinary hours and 42 rostered hours).
[68] Multiple other provisions in the Agreement are based on employees working 12 hour shifts and a 42 hour week (See clause 4 (in the definition of salary rate) and subclauses 9.6, 10.4, 13.1, 14.4, 14.5 and 15.1).
[69] To illustrate the CFMEU points out the following:
Clause 9 of the Agreement provides for a total of 60 minutes of breaks for a 12 hour shift based upon 3 breaks per shift; there is no provision for breaks for any other shift length;
Clause 10 of the Agreement provides that an employee’s normal shift length is 12 hours;
Clause 13 of the Agreement provides that an employee is entitled to 252 hours annual leave (effectively 6 weeks) for 12 hour shifts for each 12 months of continuous service. No other annual leave entitlement is provided for shifts lengths other than for 12 hours;
Clauses 14.4 and 14.5 of the Agreement deal with personal leave. Full time employees for the purposes of the subclauses are defined as employees working a 12 hour shift. No other personal leave entitlements are found in the Agreement for full time employees not working a 12 hour shift;
Clause 15.1 of the Agreement provides that employees working the current roster, being the 12 hour shift roster, are entitled to long service leave of 45.5 shifts (5 for 6 hours) after 8 years of continuous service. The Agreement does not provide for long service leave entitlements other than for employees working a 12 hour shift.
[70] Subclause 10.1 of the Agreement does refer to a new roster being introduced. In such circumstances, the annualised salary in Schedule A is not to be payable and a new annualised salary will be agreed or determined by the Commission. Subclause 10.1 provides no mechanism for the introduction of a new roster and it is submitted, in any event, that it would not be open to the Commission to arbitrate any new annualised salary in the absence of a clear mechanism which was itself consistent with the Agreement and the Act.
[71] The CFMEU submits that if the New Roster was to be introduced it must be with the agreement of the production employees concerned. Likewise, any consequent change to annualised salary can only occur with the agreement of the relevant production employees.
This contention is supported by subclause 25.1 of the Agreement set out below.
“25. Variations to Agreement
25.1 Any variation, amendment, deletion or addition to this Agreement (including those that may arise from subclause 10.1) shall be in accordance with the Act and lodged with Fair Work Australia for conciliation or arbitration.”
[72] The CFMEU argue that means, any variation to the Agreement, including a roster change, hours of work and annualised salary, must be in accordance with the provisions of the Act relating to variation of enterprise agreements (see Division 7 of Part 2-4 of Chapter 2 of the Act).
[73] Any application lodged with the Commission is notone that is dealt with by ‘conciliation or arbitration’ as referred to in subclause 25.1 of the Agreement; it is strictly limited to its closely circumscribed dispute settlement function.
[74] The CFMEU contends that, absent relevant variations to the Agreement in accordance with Division 7 of Part 2-4 of the Act, no change can be made to the requirement that employees work 12 hour shifts, 35 ordinary hours or 42 rostered hours per week. The only variation of employees’ rosters allowed by the Agreement is contained in subclause 9.3 and such a change is confined to when employees within a panel will start and finish their rostered hours.
[75] The effect of the scheme of the Act and the terms of the Agreement itself is that without the agreement of its employees, Griffin cannot implement anychange to rosters or consequential changes to annualised salaries which go beyond the changes envisaged in subclause 9.3 of the Agreement; in particular changes of the kind now proposed by Griffin.
[76] In summary, the CFMEU contends that the Agreement does not permitGriffin to make the type of changes that have been proposed without employee agreement.
[77] For completeness, the other possiblesource of support for the changes proposed mightbe found in clause 21 of the Agreement; although this is not a position put squarely by Griffin. Relevantly the clause provides:
“21. Consultation
21.1 This term applies if:
(a) Griffin has made a definite decision to introduce a major change to production, program, organisation, structure, or technology in relation to its enterprise; and
(b) the change is likely to have a significant effect on employees of Griffin.
…
21.11 If the changes through consultation cannot be agreed upon by Griffin Management or its employees in the disputed matter can be referred to Fair Work Australia for conciliation or arbitration.”
[78] The CFMEU submit it is clear that the changes contemplated by the clause are changes that may only be adopted in a manner which is consistent with, and compliant with, the Agreement. To suggest otherwise would be to achieve by recourse to clause 21.11, a course whereby the Agreement could be varied in a substantive way; a course that is simply not open to eitherparty.
[79] Any such variation can only be achieved under section 209 of the Act; it cannot be the subject of a private arbitration in the nature of what was formerly known as an application to vary under the Award system 3. To the extent that the clause proposes something different it cannot have effect. To the extent that it canhave any efficacy it must be interpreted in a manner which is consistent with Agreement and the Act.
[80] In conclusion and summary regarding the dispute settlement clause and issues arising from them, the CFMEU submit it must be steadily borne in mind that such disputes ‘necessitate the interpretation of the terms of the Agreement’ 4.
[81] The only qualification imposed on the Commission’s powers to settle such disputes is that they are circumscribed by section 739 (5) of the Act. That provision stipulates that in arbitrating a dispute in accordance with a dispute resolution procedure in an enterprise agreement the Commission must not make a decision that is inconsistent with the enterprise agreement itself 5.
[82] As observed above, it remains that the only hope for Griffin to achieve its proposal is with the cryptic words in subclause 10.1 of the Agreement: “Provided that where a new roster is introduced the annualised salary in Schedule A will not be payable to the affected employees and a new annualised salary will be agreed (or determined by FWA).”
[83] Griffin would have these relatively few words achieve the objective of turning the entire Agreement inside out. It suggests that they permit the root and branch re-engineering of the Agreement to convert it from one whose central structural feature is a 12 hour roster to one whose essential feature is a 7 hour roster. In order to achieve this objective significant provisions in the Agreement must be ‘read down’ to render them in a form entirely contrary to their express terms.
[84] Put simply Griffin’s proposal would, if accepted, render large and significant parts of the Agreement nugatory. The approach must be wrong. It endeavours to achieve by this convoluted and indirect route what it could not do directly by an application to vary the Agreement.
[85] There is a simple and straightforward interpretation of subclause 10.1 of the Agreement which avoids the approach advanced by Griffin. A new roster may be introduced but it must be within the 12 hour roster structure. Any new ‘annualised salary’ will, of necessity, have to conform with the definition of salary rate in the Agreement (clause 4) which stipulates that the annualised salary (set out in Schedule A or ‘determined’ will be divided by 52 (weeks) and then divided by 42 (hours)); a formula which acknowledges the 12 roster structure.
[86] With respect, it is not for the CFMEU or the Commission to spell out what an alternative roster might look like. The questions for determination are simply whether the terms of the Agreement allow for the implementation of the particular roster that is proposed by Griffin.
[87] The consequences of the interpretation advance by Griffin would, if adopted, be calamitous and fly in the face of the entire Agreement as already explained; rendering many of the clauses otiose. It would require anyone dealing with the application of the Agreement to guess or infer what entitlements arose under the newly ‘altered’ Agreement in respect of the catalogue of entitlements set out in [68] above. As Griffin would have it, the reader would ignore the existing entitlements and have to guess or infer how these entitlements were to be applied in a new structure. Such a construction of the Agreement is untenable.
[88] The CFMEU submits that the wished-for construction of clause 10 of the Agreement in combination with clause 20 advanced by Griffin is bound to fail. As an exercise in pure construction it faces insurmountable obstacles. Where the evidence does not allow the Commission to find in favour of a construction urged by an applicant, it is bound to reject the application. The whole approach of Griffin flies in the face of the evidence of the industrial history and negotiations and context of the Agreement provided by Mr Wood in his evidence.
[89] For the reasons set out in detail in the witness evidence of the CFMEU even if the Commission were somehow able to vary the Agreement, it should not do so. It must be stressed that the CFMEU contends that the ‘merits’ of the Griffin application cannot be entertained, and that to do so would involve the Commission in jurisdictional error. The case would, in any event, fail on the merits for all of the reasons and upon the facts and circumstances set out in the witness statement of Mr Wood, including but of course not limited to:
(1) the failure of Griffin to demonstrate that the New Roster will lead to, or even allow for, efficient and effective operating practices;
(2) the failure of Griffin to demonstrate satisfactorily that the New Roster will allow for production levels to meet the requirements of its customers, including Bluewaters power station;
(3) the failure of Griffin to demonstrate any reduction in the price of coal during the life of the Agreement; and
(4) the extraordinary adverse impact on the remuneration and entitlements of employees covered by the Agreement (should the proposed changes to the roster and annualised salaries of Griffin be implemented).
[90] As already stated, the question of the merits of Griffin’s proposal cannot be reached on jurisdictional grounds since the Commission has no jurisdiction to vary the Agreement other than accordance with the Act. The application fails to invoke the dispute settlement mechanism in any permissible way. The proceeding should be dismissed.
[91] The CFMEU submits that the Commission must answer the questions as follows:
(1) Do the terms of the Agreement allow Griffin to unilaterally implement the New Roster? - No
(2) If the answer to (1) is no, do the terms of the Agreement allow the Commission to order that the New Roster be implemented? - No
(3) If the answer to (2) is yes, should the Commission make an order implementing the New Roster? - No
(4) If the answer to (1) or (3) is yes, can Griffin and the CFMEU agree on the annualised salaries for the employees of Griffin who will be working the New Roster under the Agreement? - Irrelevant
(5) If the answer to (4) is no, what does the Commission determine are the annualised salaries for the employees of Griffin who will be working the New Roster under the Agreement? - The Commission may not make any determination.
Consideration
[92] In the decision of The Australasian Meat Industry Employees Union v Golden Cockerel 6 the Full Bench at paragraph [41] summarised the principles of construction of agreements which the Commission is bound to apply as follows.
“[41] From the foregoing, the following principles may be distilled:
1. The AI Act 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.”
First question
[93] The first question to be considered is:
(1) Do the terms of the Agreement allow Griffin to unilaterally implement the New Roster?
[94] Clause 9−Hours of Work and Rosters of the Agreement directly addresses matters relevant to the questions to be determined. Firstly subclause 9.1 refers to the annualised salary in the Agreement at Schedule A as the “current” annualised salary. Next subclause 9.2 refers to the rosters in Schedule C as the “current” roster. The plain meaning of these words demonstrates that a roster different from that in Schedule C and annualised salaries different from those in Schedule A are permissible. The relevant clause is set out below.
“9 Hours of Work and Rosters
Hours of Work
9.1 The ordinary hours of work in this Agreement average 35 hours per week. The current annualised salary in Schedule A includes a payment for an average of an additional 7 hours per week calculated at overtime rates. The average weekly hours of work for each full-time employee are 42 hours for Schedule A. The parties acknowledge that these hours are reasonable.
Rosters
9.2 The current roster Employees will work is in Schedule C. Shift rosters will specify the normal commencing and finishing times of ordinary working hours of each shift. In accordance with Clause 9.3 these times may be varied by Griffin to maximise plant utilisation, operational effectiveness and efficiency for genuine operational needs. …”
[95] The references in subclause 9.2 to Griffin varying the times of ordinary working hours of a shift for operational effectiveness and efficiency is limited to variation of those times specified on a shift roster for the normal commencing and finishing times of ordinary working hours of each shift. This provision empowers Griffin to make such changes unilaterally. However subclause 9.2 states that such variations must be in accordance with subclause 9.3 which says that shift start and finish times within a panel may be staggered up to a maximum of one hour only. These limited changes to the roster can be actioned unilaterally by Griffin but obviously implementing the New Roster unilaterally is well beyond the scope of this provision.
[96] The next clause relevant is clause 10−Salaries and Other Benefits set out below.
“10. Salaries and Other Benefits
Annualised salary
10.1 Subject to this Agreement each employee will be entitled to an annualised salary in accordance with Schedule A. Provided that where a new roster is introduced the annualised salary in Schedule A will not be payable to the affected employees and a new annualised salary will be agreed (or determined by FWA). The new annualised salary must be calculated using the principles in Schedule A. ...”
[97] The second sentence of subclause 10.1 says that “…where a new roster is introduced…” the annualised salary in Schedule A would not be payable and a new annualised salary will be either agreed or determined by the Commission. The plain meaning of these words also demonstrates that a roster different from that in Schedule C and consequently annualised salaries different from those in Schedule A are permissible.
[98] Whilst both clause 9−Hours of Work and Rosters and clause 10−Salaries and Other Benefits demonstrate the terms of the Agreement do envisage that a roster and an annualised salary different from those prescribed in Schedule C and Schedule A can come into operation in the future neither clause determines how a different roster is able to be introduced. These clauses do not indicate whether a new roster can be implemented unilaterally by Griffin.
[99] Another clause in the Agreement that is relevant to the first question is clause 25−Variations to Agreement which is set out below.
“25. Variations to Agreement
25.1 Any variation, amendment, deletion or addition to this Agreement (including those that may arise from subclause 10.1) shall be in accordance with the Act and lodged with Fair Work Australia for conciliation or arbitration.”
[100] If the New Roster is to be implemented the Agreement will have to be changed to include the specifics of this additional roster and to allow employees to work under the New Roster. For example subclause 9.2 which reads “The current roster Employees will work is in Schedule C” will need to be changed to also refer to some employees working on the New Roster. Without some change to the Agreement the existing terms remain enforceable and employees will work on the Schedule C roster and Griffin remains obliged to pay the Schedule A annualised salary.
[101] Assumedly, the specifics of the New Roster could be expected to be added into Schedule C. Other changes to the Agreement may also be necessary or prudent. As can be seen implementing the New Roster, putting it into effect in the workplace, will doubtless necessitate variation, amendment, deletion or addition to the Agreement.
[102] Clause 25 of the Agreement refers to any “variation, amendment, deletion or addition to this Agreement...”. On its plain meaning this clause applies to any change to the Agreement necessary for the New Roster to be implemented. The words “(including those that may arise from subclause 10.1)” is a specific reference to a new roster and the different annualised salary which has come into being as a consequence of it being introduced.
[103] The facts are that the New Roster Griffin seeks to implement also requires a new annualised salary being prescribed in the Agreement, regardless of whether the amount of that annualised salary is agreed between the parties or has been determined by the Commission.
[104] Whatever variation, amendment, deletion or addition to the Agreement is required for the implementation of the New Roster and associated new annualised salary the plain meaning of clause 25 requires that this “…shall be in accordance with the Act and lodged with Fair Work Australia for conciliation or arbitration.”
[105] Sections 207 through to section 218 of the Act deals with the limited circumstances in which there can be a variation, amendment, deletion or addition to the Agreement.
[106] In summary these are:
1. Variations jointly made by an employer and the affected employees. This involves a majority vote by the employees in support of the variation. An application is then to be made to the Commission for approval of the variation to the agreement. The Commission’s considerations as to whether or not to approve the variation go to whether the procedural requirements within the Act have been satisfied and whether there are serious public interest grounds for not approving the variation and whether the variation would result in a person committing an offence against the law of the Commonwealth or being in contravention of the law of the Commonwealth. (See sections 207 to 216 of the Act).
2. Variations to remove an ambiguity or uncertainty may be applied for by an employer, an employee or an employee organisation covered by the agreement. (See section 217 of the Act).
3. A review of an agreement by the Commission which has been referred to it by the Australian Human Rights Commission because it believes the agreement is a discriminatory industrial instrument. If the Commission considers the agreement requires a person to do an act that would be unlawful under other anti-discrimination legislation then the Commission must vary the agreement to no longer require the person to do such an act that would be unlawful. (See section 218 of the Act).
[107] In dealing with any such applications the Commission will be conciliating or arbitrating as is required, in accordance with the Act, dependent upon the nature of the particular application and the particular surrounding circumstances of the application.
[108] Of the three circumstances under the Act for a variation, amendment, deletion or addition to the Agreement the introduction of a new roster can only be achieved under the first of those set out in [106] above. The only option in this case is that under section 207 of the Act; Griffin and the employees jointly make a variation of the Agreement to allow for the implementation of the New Roster and new annualised salary. An application would then be made to the Commission under section 210 of the Act for the approval of this variation agreed by Griffin and the employees. Clause 25 does not allow unilateral introduction of the New Roster.
[109] Griffin points out that the 2009 Agreement in subclauses 9.2 and 9.3 included an employee veto over roster changes with a restriction on the Commission’s power limiting it to conciliation on such matters. These terms are not part of the Agreement which replaced the 2009 Agreement. Griffin says the surrounding circumstances of this particular change to the Agreement support a construction that there would be no requirement for employee agreement to roster changes under the Agreement. Griffin submits this is at odds with the words in clause 25 and so the Agreement is ambiguous.
[110] These surrounding circumstances do not in my view support a conclusion that the Agreement contains an ambiguity. This is because clause 25 of the 2009 Agreement remains in the Agreement in similar terms and this clause in both Agreements and the scheme of the Act now and as it applied to the 2009 Agreement 7 provided an effective employee veto over unilateral roster changes being implemented. The changes to subclauses 9.2 and 9.3 did not actually involve a removal of the employee veto. Rather the specific consultation obligations for roster changes in subclause 9.2 were made superfluous by the statutory obligation to include the general consultation obligation contained in clause 21−Consultation and retaining the general requirement for all variations to the Agreement, which includes roster changes, to be subject to employee agreement in accordance with the scheme of the Act in clause 25 of the Agreement made the specific veto on roster changes also superfluous.
[111] In summary then the plain meaning of the Agreement does permit the New Roster to be brought into operation however clause 25−Variations to Agreement requires that the variations or amendments to the Agreement necessary to accommodate and reflect the implementation of the New Roster and new annualised salary must be in accordance with the Act which in practice means jointly agreed by Griffin and the employees and an application must be made to the Commission under section 210 to vary the Agreement as required. In short the terms of the Agreement do not allow Griffin to unilaterally implement the New Roster.
[112] Consequently the answer to question (1) is – No.
Second question
[113] I will now consider the second question to be determined.
(2) If the answer to (1) is no, do the terms of the Agreement allow the Commission to order that the New Roster be implemented?
[114] There is only one term of the Agreement that specifically deals with the Commission’s involvement with a new roster and that is clause 10−Salaries and Other Benefits set out in [96] above.
[115] Subclause 10.1 provides that “…where a new roster is introduced…” then “…a new annualised salary will be agreed (or determined by FWA).” When making the Agreement the parties have expressly provided that in the absence of agreement between them on a new annualised salary for a new roster that new annualised salary would be determined by the Commission. The plain meaning of these words does not provide a mandate though for the Commission to order that the New Roster be implemented.
[116] Relevant to the further consideration of this second question is clauses 20−Dispute Resolution Procedure and 21−Consultation. Neither of these clauses has any express reference to the implementation of new rosters however both clauses must be considered because they both in different circumstances empower the Commission to arbitrate matters.
[117] Both clauses have been set out earlier in this decision.
[118] As explained earlier when dealing with the question of the Commission’s general jurisdiction I am satisfied that these applications have enlivened the Commission’s powers under clause 20−Dispute Resolution Procedure. Specifically I am satisfied considering the terms of subclause 20.5 that implicitly by their actions there has been agreement between the CFMEU and Griffin that some steps in this dispute resolution procedure may be bypassed. The CFMEU in raising its concerns with Griffin about Griffin’s proposal to introduce the New Roster appear to have bypassed Step 1 and the parties thereafter appear by agreement to have moved directly to Step 4 of the procedure. The matter was then referred to the Commission under Step 5. In those circumstances then under Step 5 clause 20−Dispute Resolution Procedure the Commission has the power to conciliate, mediate and/or arbitrate the dispute.
[119] I think there is no doubt that the Commission is empowered to deal with these disputes by conciliation and mediation and in fact has done so in conference.
[120] Had conciliation or mediation been successful then Griffin and the employees would have had the opportunity to deal with the implementation of the New Roster by jointly varying the Agreement under section 207 of the Act and then making an application under section 210 of the Act for the Commission to approve the variation of the Agreement. That process would have allowed implementation of the New Roster and been consistent with clause 25−Variations to the Agreement.
[121] Conciliation and mediation was unsuccessful so what remains is the determination as to whether subclause 20.3 at Step 5 is a term of the Agreement that allows the Commission, when arbitrating, to order the implementation of the New Roster.
[122] Before considering this point I will first consider whether clause 21−Consultation raises a similar issue to that explained above for clause 20−Dispute Settlement Procedure.
[123] Clause 21−Consultation was set out earlier in this decision. As discussed earlier, when considering the question of jurisdiction generally I am satisfied the circumstances here fall within the scope of this clause.
[124] Griffin has made a definite decision to introduce a major change to the program, being the shift rosters, and that change if it is implemented is likely to have significant effects in terms of the alteration of the hours of work on the employee’s involved. Consequently under the terms of clause 21−Consultation Griffin is obliged to notify the relevant employees of its decision to introduce the major change and for there to be consultation over this. Indeed this is what has occurred.
[125] Subclause 21.11 of the Agreement states that if the changes cannot be agreed “the disputed matter can be referred to Fair Work Australia for conciliation or arbitration.”
[126] The parties have participated in a conciliation conference dealing with the disputed matter which is Griffin’s decision to implement the New Roster. There is no doubt the Commission was empowered to deal with the disputed matter by conciliation.
[127] Given conciliation was unsuccessful what remains is the determination as to whether subclause 21.11 is a term of the Agreement that allows the Commission, when arbitrating, to order the implementation of the New Roster.
[128] Effectively for the purposes of this decision whether the Commission is allowed to order the implementation of the New Roster or not under either subclause 20.3 Step 5 or subclause 21.11 are questions that raise the same issues and have the same answer.
[129] It is clear that by both clause 21−Dispute Settlement Procedure and clause 21−Consultation the parties have agreed that the Commission may arbitrate disputes. However subsection 739 (5) of the Act specifies that in any such arbitration the Commission must not make a decision that is inconsistent with the Act or inconsistent with a fair work instrument that applies to the parties. Section 12 of the Act defines a ‘fair work instrument’ to mean, amongst other instruments, an enterprise agreement.
[130] Section 739 of the Act is set out below.
“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.”
[131] If the Commission ordered that the New Roster be implemented would such a decision be inconsistent with the Act or the Agreement?
[132] The current roster under clause 9−Hours of Work and Rosters is based on shifts of 12 hours per day and an average of 42 weekly hours for full-time employees. Both Griffin and the CFMEU acknowledge that there are a large number of clauses in the Agreement where the rights and entitlements of the parties are expressed on a basis that assumes the employees are working 12 hour shifts and/or 42 hours per week. Recognising that the New Roster is based on shifts of 7 hours per day and 35 hours per week both parties have put submissions as to what the impact would be for these rights and entitlements in the Agreement if the Commission did order implementation of the New Roster.
[133] In addition to the rosters and salary in Schedule C and Schedule A, based on 12 hour shifts and a 42 hour week the rights and entitlements prescribed in the Agreement that are relevant in this consideration include, the definition of ‘salary rate’ which assumes a 42 hour week is worked, the pro rata entitlements for a part-time employee which assumes a 42 hour week, shift breaks which assume a 12 hour shift, the relief supervisor allowance which assumes a shift of 12 hours, workers compensation payments which are paid on the basis of the current annualised salary which is based on 12 hour shifts and 42 hours per week, the annual leave entitlement which is expressed in hours for each year and based on 12 hour shifts, the personal leave entitlement which is only provided for full time employees working a 12 hour shift and finally the long service leave entitlement which is only provided for an employee working a 12 hour shift roster and is based on 12 hour shifts.
[134] Considering all of these clauses it is obvious that the Agreement, as a whole, envisaged shifts will be 12 hours in length and weekly hours will average 42. The fact that clause 10−Salaries and Other Benefits indicates that a different roster to that in Schedule C might be introduced is not at odds with this construction. This clause would allow other rosters to be introduced which are based on 12 hour shifts and an average of 42 hours per week. Such a new roster for example could be similar to the current rosters in Schedule C but with any number of different start and finish times perhaps.
[135] Section 739 (5) of the Act prevents the Commission making a decision that is inconsistent with the Agreement. The Agreement considered as a whole provides only for shifts of 12 hours and an average of 42 hours a week. A decision by the Commission to order the implementation of the New Roster based on 7 hour shifts and an average of 35 hours a week would be inconsistent with the Agreement as a whole. Consequently for these reasons I find that the Commission is not permitted to order the implementation of the New Roster.
[136] A further consideration is that what is sought is for the Commission to order that the New Roster be implemented. Such an order is to put the New Roster into effect. A general statement by the Commission that Griffin can implement the New Roster would not resolve the dispute and would not put the New Roster into effect. Griffin in practise would be unable to implement the New Roster without changes to the Agreement. As the Full Bench explained in [2013] FWCFB 2301 at paragraph [34] “The terms of the enterprise agreement remain in effect and enforceable ….notwithstanding the determination of the private arbitration.”
[137] Of necessity then the Commission would need to issue an order to alter the Agreement to facilitate the New Roster being put into effect and to resolve the conflicts with particular terms of the Agreement. Changes to the Agreement would have to be made to allow the roster to operate. This obviously would be a decision of the Commission that was inconsistent with the terms of the Agreement.
[138] Any conclusion to the contrary (that the Commission is empowered to change the terms of the Agreement when settling disputes) would support the view that arbitration allowed by the term of an agreement and section 739 (4) of the Act empowers the Commission to vary agreements without constraint and the Commission would be empowered to alter as it saw fit the negotiated bargain parties have made when they entered into the Agreement. Section 739 (5) of the Act expressly denies the Commission such broad powers.
[139] This interpretation does not damage the efficacy of clause 20−Dispute Settlement Procedures and clause 21−Consultation of the Agreement. These clauses both continue to allow the Commission to deal with a multitude of grievances and proposals for change in the workplace which are ones that can be resolved without necessitating any change to the terms of the Agreement. Indeed it is commonplace that many such grievances or proposals for change will involve matters that are not dealt with by the terms of the Agreement at all. Separately both clauses provide a role for the Commission in terms of conciliation or mediation that does not conflict with the prohibition in section 739 (5) of the Act.
[140] For the reasons explained above my decision is that clause 20−Dispute Settlement Procedure and clause 21−Consultation of the Agreement do not allow the Commission to order the New Roster be implemented.
[141] In summary the requirement of section 739 (5) of the Act that the Commission must not make a decision inconsistent with the Agreement means the terms of the Agreement do not allow the Commission to order the New Roster be implemented.
[142] The answer to question (2) is – No.
Conclusion
[143] Having answered questions (1) and (2) ‘No’ questions (3), (4) and (5) are not relevant.
[144] The outcome of these applications has been determined by the constraints placed on Griffin, the employees and the Commission by the provisions of the Agreement the parties made in 2012 and the scheme of the Act. These constraints do allow changes to the arrangements prescribed by the Agreement where both Griffin and the employees agree to these changes. The Commission remains available to assist the parties to this end if they wish.
COMMISSIONER
Appearances:
A Power of Counsel for Griffin.
J Nolan of Counsel for the CFMEU.
Hearing details:
2015.
Perth:
July 13.
1 [2011] FWA 8288 at paragraphs [7] to [10].
2 [2014] FCAFC 84 at paragraph [70].
3 [2014] FCAFC 84.
4 [2015] FWC 2055 and [2015] FWC 1836.
5 [2015] FWCFB 1798 at paragraph [18] and [2013] FCA 659 at paragraph [29].
6 [2014] FWCFB 7447.
7 See sections 367 to 380 of the Workplace Relations Act 1996.
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