John Green v AGL Energy Limited

[2016] FWC 7972

[2016] FWC 7972

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.739—Dispute resolution

John Green
v
AGL Energy Limited
(C2016/1892)

VICE PRESIDENT WATSON MELBOURNE, 4 NOVEMBER 2016

Dispute about matters arising under the enterprise agreement – Whether the Commission has jurisdiction to hear dispute – Interpretation of enterprise agreement – Whether applicant is covered by the enterprise agreement – Fair Work Act 2009, s.739.

Introduction

[1] This decision concerns an application for the Fair Work Commission (the Commission) to deal with a dispute. The application is made by John Green under s.739 of the Fair Work Act 2009 (the Act). It concerns a dispute relating to the payment of entitlements to Mr Green upon redundancy and the identification of the proper instrument under which these payments were required to be made.

[2] The issue is essentially whether the AGL Business Energy Services Technicians Enterprise Agreement 2015 – 2018 (the Agreement) applied to Mr Green’s employment. In the context of the dispute it is not of any significance whether the Gas Industry Award 2010 (the Award) applied to Mr Green as the payments made to him exceeded those under the Award. If the Agreement applied he would be entitled to a larger redundancy payment.

[3] The matter was listed for conference on 25 August 2016. The parties were unable to reach an agreed resolution and the matter was listed for arbitration. At the hearing on 27 October 2016, Mr Green appeared on his own behalf and Ms J Doak appeared for AGL Energy Limited (AGL).

[4] AGL sought to have these proceedings dismissed on the basis that the Commission lacks jurisdiction to hear this dispute. It submitted that while the Agreement does contain a dispute resolution clause permitting the Commission’s involvement, Mr Green is not a person to whom the Agreement applies. The resolution of this issue will also essentially resolve the dispute about the entitlement to redundancy pay.

Background

[5] Mr Green commenced permanent full-time employment with AGL on 15 September 2014 in the position of Technical Services Manager. His employment was governed by the terms and conditions contained in his contract of employment. The contract was based on the template offered to salaried employees. The offer was for the position of Technical Services Manager on a Total Fixed Salary of $110,725pa. The contract provided for additional payments, inserted at the request of Mr Green, for late night call outs and weekend work. As a result of the staff remuneration review, Mr Green’s salary was increased in September 2015 to $112,940.

[6] On 1 July 2016, Mr Green’s position was made redundant. Mr Green received a severance payment of 5.37 weeks in accordance with the AGL Redundancy and Retrenchment Policy (the Policy). The payment was in line with the amount payable under the Award.

[7] In his application, Mr Green sought payment of redundancy entitlements as provided for under the Agreement. Mr Green’s contract makes no express provision for redundancy entitlements. The only reference to the Agreement or the Award in the contract is contained in subclause 4.3.3 in relation to hours of work as follows:

“4.3.3 From time to time the employee will be required to perform late night call-outs and weekend work. The work is referred to as ‘agreed overtime’ When the employee is required to perform agreed overtime, the agreed overtime will be paid in accordance with the ‘Merchant Energy Technicians Enterprise Agreement 2013-2015’ (Award).”

[8] By email to Ms Doak dated 22 August 2016, Mr Green claimed:

“The copy of my employment contract that I have has an amendment at the base of section 4.3.2 ‘excluding A/H callouts, weekends to be paid as per EBA. Sean agreed to this amendment.”

[9] Mr Green maintained this position in his written materials and in oral evidence, stating that he had hand-written the express reference to the Agreement in the original version of the contract he was provided, before receiving an amended version for signing, which incorporated the change.

[10] In her email response of 23 August 2016 and written submissions, Ms Doak claimed that the reference to the Agreement was a typographical error, and that the relevant clause in the Agreement should have referred only to the Award. Ms Kilpatrick, the Head of People and Culture at AGL’s New Energy division, gave evidence supporting this position. In relation to the subject matter of late night callouts and weekend work the terms of the Award and Agreement provide for similar entitlements.

Was Mr Green Covered by the Agreement?

[11] The Agreement applies to employees employed in a classification in the agreement. Clause 4.1 (Parties Bound) of the Agreement states:

“4.1 This Agreement applies to Employees of AGL Energy Ltd (ACN 115 061 735) and to any successor, assignee or transmittee business as defined by Chapter 2, Part 2-8 of the Act, unless the Fair Work Commission orders otherwise and its employees. It shall apply in all states and territories of the Commonwealth of Australia.”

[12] Clause 2.12 (Definitions) defines “Employee” for the purpose of the Agreement:

“2.12 ‘Employee’ or ‘Employees’ means a person or persons employed by the Employer respondents to this Agreement in a position within the classification structure as detailed in Appendix A to this Agreement.

Unless specified otherwise, a reference to Employee includes permanent full-time, permanent part-time, flexible part-time, casual and fixed term Employees but does not include a contractor, sub-contractor or their Employees.”

[13] The classification structure of the Agreement contains a series of pay scales without definitions. This appears to be a reference to AGL pay scales for classifications of technician and similar employees it employs under those pay scales. The pay scales are expressed as fortnightly amounts for 8 classification levels. The rates as at 31 August 2015 ranged from $1,858.97 ($48,333.22pa) to $3,782.31 ($98,340.06pa).

[14] AGL submitted that Mr Green was not a person employed in a position within the classification structure in Appendix A to the Agreement. It submitted that Mr Green was employed in a management position, as his contract makes clear, and he was not paid in accordance with the pay scales or classifications in the Agreement.

[15] Mr Green, in oral submissions and evidence presented in his written statement, contended that owing to an express reference to the Merchant Energy Technicians Enterprise Agreement 2013-2015 (the predecessor agreement to the Agreement) in clause 4.3.3 (Hours) of his AGL Employment Agreement dated 3 August 2014 (TFR Contract) and the duties he was engaged to perform and actually performed for AGL, he was a person covered by the Agreement.

[16] Ms Kilpatrick gave evidence that the key focus of Mr Green’s employment was to identify new business opportunities and work with the AGL Sales team to grow the technical service business in Victoria. It was understood that he would need to perform hands on service delivery work particularly while building up the business and recruiting technicians.

[17] AGL contended that while Mr Green’s role was managerial in nature, he did perform work “on the tools” in addition to his managerial responsibilities. However, the calculations as to the proportion of time spent on the tools differed greatly between the parties. Ms Kilpatrick estimated that Mr Green spent approximately 8% of his working days “on the tools, and that the time spent performing this work had decreased significantly as the business grew and engaged two additional service technicians. Mr Green estimated that his time performing this work was closer to 80%, though had decreased for a period following an injury.

[18] In order to determine whether Mr Green was covered by the Agreement it is necessary to have regard to the terms of the Agreement itself. The Agreement contains coverage provisions which determine its application. It is not determinative of whether Mr Green was employed under a typical staff contract or a typical technician contract. The application clause of the Agreement is the relevant touchstone of its coverage.

[19] Unfortunately, the wording of the agreement is not clear. It establishes coverage by the classification structure as the determinant of agreement coverage. The classification structure contains no definitions. It is therefore necessary to give a meaning consistent with the apparent intention of the parties to the Agreement.

[20] It appears that the parties to the Agreement had a clear picture of the employees covered by it. By having 8 classification levels, and increments within each level, it appears that the parties intended that the employees covered would be classified at a particular level and progress to increments within that level on the basis of generally understood progression rules. It does not appear that payments above those levels were contemplated for Agreement covered employees.

[21] Mr Green was not employed on that basis. He was employed on a higher salary and subject to reviews of a different kind. Further, it appears that the fundamental nature of his employment was as a managerial position, notwithstanding that he was required to perform service delivery work while the relevant employees were being recruited, trained and were able to take over the service delivery workload.

[22] In my view the evidence in this matter does not support a conclusion that Mr Green was employed under the Agreement at the time his employment was terminated or at any earlier time. It follows that Mr Green’s notification of a dispute under the Agreement does not validly invoke the jurisdiction of the Commission.

[23] For the above reasons the application by Mr Green to deal with a dispute under the Agreement must be dismissed.

VICE PRESIDENT

Appearances:

Mr J Green, Applicant.

Ms J Doak, for AGL Energy Limited.

Hearing details:

2016.

Melbourne.

27 October.

Final written submissions:

Mr Green on 21 October 2016.

AGL Energy Limited on 7 October 2016.

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