Holcim (Australia) Pty Ltd
[2020] FWCA 5387
•8 OCTOBER 2020
| [2020] FWCA 5387 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.217—Enterprise agreement
Holcim (Australia) Pty Ltd
(AG2020/2880)
HOLCIM (AUSTRALIA) PTY LTD - NSW/ACT STAFF ENTERPRISE AGREEMENT 2019
Cement and concrete products | |
DEPUTY PRESIDENT SAUNDERS | NEWCASTLE, 8 OCTOBER 2020 |
Variation of enterprise agreement to remove an ambiguity or uncertainty pursuant to s 217 of the Fair Work Act 2009 (Cth) – application unopposed – applicant granted.
Introduction and background
[1] On 4 June 2020 I approved the Holcim (Australia) Pty Ltd – NSW/ACT Staff Enterprise Agreement 2019 (Enterprise Agreement).
[2] On 23 September 2020 Holcim (Australia) Pty Ltd (Holcim) filed an application under section 217 of the Fair Work Act 2009 (Cth) (Act) to vary the Enterprise Agreement to remove an ambiguity or uncertainty.
[3] On 24 September 2020 I made directions requiring Holcim to serve a copy of its application to vary the Enterprise Agreement, together with a copy of my directions, on each employee covered by the Enterprise Agreement and each entity that was a bargaining representative for the Enterprise Agreement when it was made. On the basis of a statutory declaration made by Ms Helen Jones, Executive General Manager – Human Resources & Communications, Holcim, on 30 September 2020, I am satisfied that Holcim complied with its obligations to serve these materials on all employees covered by the Enterprise Agreement. I am also satisfied that the bargaining representatives for the Enterprise Agreement when it was made – the Australian Workers Union and the CSR, Holcim, Wilmar & Viridian Staff Association known as Salaried Staff United (SSU) – were provided with a copy of the variation application, together with my directions.
[4] Pursuant to my directions the employees covered by the Enterprise Agreement and relevant bargaining representatives were given an opportunity to make submissions opposing or supporting the variation application.
[5] On 28 September 2020 the SSU notified the Commission, in writing, that it supported Holcim’s application to vary the Enterprise Agreement.
[6] One employee filed a short submission opposing the variation application but withdrew that submission after receiving an explanation from the SSU addressing his concern. No other submissions were filed in relation to the variation application.
Variation sought
[7] The variation application seeks to delete clause 13.7 of the Enterprise Agreement and replace it by a new clause. The existing clause and proposed new clause are set out below:
Existing clause 13.7
13.7 Notification of Salary Status Change
Holcim shall:
13.7.1 notify the Association if it decides to cease paying an Employee as a Salaried Employee; and
13.7.2 consult with the Association prior to effecting the change set out in this clause 13.7.
Proposed new clause 13.7
13.7 Consultation Salary Status Change
13.7.1 This clause applies if Holcim has made a definite decision to introduce a change of employment status of salaried employee in relation to employees of its enterprise.
13.7.2 Holcim must:
13.7.2.1 give notice of the changes to all employees who may be affected by them and their representatives (if any); and
13.7.2.2 discuss with affected employees and their representatives (if any):
13.7.2.2.1 the introduction of the changes; and
13.7.2.2.2 their likely effect on employees; and
13.7.2.2.3 measures to avoid or reduce the adverse effects of the changes on employees; and
13.7.2.2.4 commence discussions as soon as practicable after a definite decision has been made.
13.7.3 For the purpose of the discussion under clause 13.7.2.2, Holcim must give in writing to the affected employees and their representatives (if any) all relevant information about the change including:
13.7.3.1 their nature; and
13.7.3.2 their expected effect on employees; and
13.7.3.3 any other matters likely to affect employees.
Basis for the variation application
[8] In recent correspondence, the Australian Building and Construction Commission (ABCC) has indicated to Holcim that, in its view, clause 13.7 of the Enterprise Agreement is inconsistent with section 11 of the Code for the Tendering and Performance of Building Work 2016 (Building Code) insofar as clause 13.7 is inconsistent with the freedom of association requirements set out in section 13 of the Building Code. These requirements include that a code covered entity must protect freedom of association in respect of building work, and must adopt policies and procedures which ensure persons are free to be represented, or not represented, by building associations.
[9] Holcim holds the view that clause 13.7 of the Enterprise Agreement is not of the effect or of the character as suggested by the ABCC. Holcim points to the fact that the Enterprise Agreement has its coverage based on whether employees are salaried employees or not. If they are salaried employees, then they are covered by the Enterprise Agreement. If not, then the Enterprise Agreement has no application.
[10] Holcim contends that the purpose of clause 13.7 has nothing to do with employees per se or how they are or are not represented. It creates a separate obligation on Holcim in circumstances when an employee agrees to move from being paid on a salaried basis to a wages basis. Any such agreement is a matter of contract between the parties. Holcim contends that the clause has nothing to do with the actual process between Holcim and the employee but rather involves a notification and consultation obligation separately to the SSU before such a contractual change occurs.
[11] On the basis that the ABCC takes a contrary view of the effect of clause 13.7, including that the current wording of clause 13.7 may regulate:
(a) the actual process between Holcim and the employee varying their salary status including any consultation process; and
(b) rights accruing for SSU to be involved in the process between an employee and Holcim and the rights to representation of an employee in such a process,
Holcim submits that an ambiguity or uncertainty exists as to the effect of the existing clause 13.7. This is strongly supported, so Holcim contends, by the fact that competing contentions as to its effect are already being advanced by Holcim and the ABCC. In part, Holcim says that this ambiguity or uncertainty arises from the novel status of the coverage of the Enterprise Agreement and the historical context of not only the Enterprise Agreement but of the SSU as, in effect, the ‘in-house’ union of CSR.
[12] Holcim submits that the amended clause seeks to address the ambiguity or uncertainty by identifying with clarity the appropriate consultation process between Holcim and an individual employee and their representative (if any). Holcim submits that the amended clause will clarify the intention of the parties in respect of the relevant consultation and notification process. Holcim also submits that equity, good conscience and the merits of the matter warrant the making of the variation in the form sought, particularly having regard to the consent of each party and the potential consequences should the clause in its current form be retained.
Consideration
[13] Section 217 of the Act gives the Commission a discretion to vary an enterprise agreement to remove any ambiguity or uncertainty on application by, inter alia, an employer covered by the enterprise agreement.
[14] The scope of s 217 was recently considered by the Full Court of the Federal Court in Bianco Walling Pty Ltd v CFMMEU: 1
“Ambiguity exists when a provision in an enterprise agreement is capable of more than one meaning. … The ambiguity may be apparent on the face of the document or may become apparent only when extrinsic evidence is adduced. A provision may be ambiguous even though it is capable of interpretation … This means that it was not necessary for the FWC to interpret the 2016 Agreement in order to reach a conclusion concerning the presence of ambiguity or uncertainty….
There are practical consequences for the FWC’s ascertainment of ambiguity or uncertainty for the purpose of s 217 being different in character from the interpretation of an enterprise agreement. One is that there was no need for the FWC to feel constrained in the matters to which it may have regard by the principles developed for the interpretation of enterprise agreements. Moreover, the FWC is obliged, in performing its functions or in exercising its powers in relation to a matter under the FW Act, to take into account, amongst other things, “equity, good conscience and the merits of the matter” – see s 578 of the FW Act. Furthermore, the FWC is not bound by the rules of evidence and procedure in relation to a matter …
It may well be the case that the mere existence of rival contentions as to the meaning or application of a provision or provisions in an enterprise agreement is not sufficient to indicate ambiguity or uncertainty for the purposes of s 217…. Instead, the FWC is to consider the matter objectively…. In that objective consideration, an assessment of the matters relied upon for the competing contentions will be important, including evidence that the parties to the agreement had a common understanding as to the meaning of the terms they used in their agreement. A reading of the enterprise agreement as a whole may indicate ambiguity or uncertainty in one or more of its clauses. And, as was noted by the Full Bench in Tenix, “the [FWC] 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.”
[15] I am satisfied, for the reasons advanced by Holcim, that clause 13.7 of the Enterprise Agreement is ambiguous or, in the alternative, uncertain. I am also satisfied in the circumstances that it is appropriate to exercise my discretion under s 217 of the Act to vary clause 13.7 in the manner sought. The proposed amended provision addresses the concern appropriately, in my view, by imposing a clear consultation process between Holcim and the relevant employee, together with their representative (if any). That was essentially what was intended when the Enterprise Agreement was made.
Conclusion
[16] For the reasons given, pursuant to s 217 of the Act, I vary clause 13.7 of the Enterprise Agreement by deleting it and replacing it with the following provision:
13.7 Consultation Salary Status Change
13.7.1 This clause applies if Holcim has made a definite decision to introduce a change of employment status of salaried employee in relation to employees of its enterprise.
13.7.2 Holcim must:
13.7.2.1 give notice of the changes to all employees who may be affected by them and their representatives (if any); and
13.7.2.2 discuss with affected employees and their representatives (if any):
13.7.2.2.1 the introduction of the changes; and
13.7.2.2.2 their likely effect on employees; and
13.7.2.2.3 measures to avoid or reduce the adverse effects of the changes on employees; and
13.7.2.2.4 commence discussions as soon as practicable after a definite decision has been made.
13.7.3 For the purpose of the discussion under clause 13.7.2.2, Holcim must give in writing to the affected employees and their representatives (if any) all relevant information about the change including:
13.7.3.1 their nature; and
13.7.3.2 their expected effect on employees; and
13.7.3.3 any other matters likely to affect employees.
[17] Pursuant to s 217(2) of the Act, this variation will operate from 12 October 2020. The Enterprise Agreement as varied is attached to this decision.
DEPUTY PRESIDENT
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