Kendrick Andrew Knuplez v Visy Glass Operations (Australia) Pty Ltd T/A Visy Glass
[2023] FWC 586
•10 MARCH 2023
| [2023] FWC 586 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.739—Dispute resolution
Kendrick Andrew Knuplez
v
Visy Glass Operations (Australia) Pty Ltd T/A Visy Glass
(C2022/7834)
| DEPUTY PRESIDENT ANDERSON | ADELAIDE, 10 MARCH 2023 |
Dispute about matters arising under the enterprise agreement and the NES; [s186(6)] – machine mechanic – foreman allowance – entitlement ‘red circled’ – whether allowance payable under 2019 and 2022 enterprise agreements – if payable, whether an “all-purpose allowance” – principles of construction – allowance found to be payable under 2019 agreement according to its terms – allowance found not to be payable under 2022 agreement – dispute determined
On 28 November 2022 Kendrick Andrew Knuplez (Mr Knuplez or the applicant) applied to the Commission under s 739 of the Fair Work Act 2009 (Cth) (the FW Act) to deal with a dispute.
Mr Knuplez is represented by the Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (SA Branch) known as the Australian Manufacturing Workers’ Union (AMWU).
The respondent is Visy Glass Operations (Australia) Pty Ltd (Visy, the employer or the respondent).
The subject of the dispute is a foreman’s allowance which had, until November 2022, been paid by Visy to Mr Knuplez.
The dispute came before the Commission under the dispute settlement procedure of the Visy Glass Adelaide Enterprise Agreement (Mechanical Maintenance) 2022 (the 2022 EA). The dispute was not resolved at the workplace level. It was referred to the Commission under cl 6.1 of the 2022 EA.
Visy oppose the application. No jurisdictional issues were raised.
A conference was conducted by the Commission on 8 December 2022. The dispute did not settle. Both parties sought arbitration.
Directions were issued on 8 and 15 December 2022 and 16 February 2023.
On 1 March 2023 I granted permission for Visy to be legally represented.[1]
I heard the matter by video on 2 March 2023.
Evidence
I received evidence from two persons:
· Kendrick Andrew Knuplez (applicant);[2] and
· Andrew James Butler (Plant Reliability Lead, Visy).[3]
Witness statements were admitted by consent (subject to submissions on weight and relevance). Neither person was required for cross examination.
In determining this matter I have regard to all material before me.
Facts
A Statement of Agreed Facts was submitted.[4] Other facts not included in the agreed facts are relevant and set out in the witness statements. Overall, the factual background is somewhat complex, but not in contest.
Agreed Facts
“…
1.Visy Glass Operations (Australia) Pty Ltd (Visy Glass) conducts a glass manufacturing operation at its site located at 625 Port Road, Croydon, South Australia (Site).
2.Visy Glass has been part of the Visy group of companies since its acquisition in 2020. Prior to that acquisition, Visy Glass formed part of the Owens Illinois group of companies, and was named 0-1 Operations (Australia) Pty Ltd.
3.From 20 July 2013, the 0-1 Adelaide Workplace Agreement (Maintenance) 2013 (2013 Agreement) applied to Visy Glass’s mechanical maintenance employees at the Site.
4.From 25 August 2017, the 0-1 Adelaide Enterprise Agreement (Maintenance) 2016 (2016 Agreement) applied to Visy Glass’s mechanical maintenance employees at the Site.
5.From 13 September 2019, the 0-1 Adelaide Enterprise Agreement (Maintenance) 2019 (2019 Agreement) applied to Visy Glass’s mechanical maintenance employees at the Site.
6.From 5 July 2022, the Visy Glass Adelaide Enterprise Agreement (Mechanical Maintenance) 2022 (2022 Agreement) applied to Visy Glass’s mechanical maintenance employees at the Site.
Employment of Kendrick Andrew Knuplez
7.The dispute relates to the hourly rate of pay of Mr Kendrick Andrew Knuplez.
8.In October 2014, Mr Knuplez was employed in the Machine Maintenance Department of the Site as a Forman, in classification level Mech C6 under the 2013 Agreement.
9.At that time, pursuant to cl 24.1 (f)(i) of the Manufacturing and Associated Industries and Occupations Award 2010 (as at October 2014), which was incorporated into the 2013 Agreement by virtue of cl.6 of the 2013 Agreement, Mr Knuplez was entitled to a minimum hourly wage of 122% of the minimum hourly wage paid to the highest technically qualified employee that he supervised or trained.
10.On 16 October 2014, Visy Glass sent Mr Knuplez a letter advising that the position of Foreman in the Machine Maintenance Department was no longer required to be undertaken, that he would revert to the position of mechanical Fitter, and that his foreman rate of $7.54641 (Foreman Allowance) would be absorbed into future Workplace Agreement wage increases (Attachment 1 ).
11.At 16 October 2014, Mr Knuplez’s base hourly rate under the 2013 Agreement was $41.7609, meaning he was paid a total hourly rate of $49.3073.
12.The rates of pay Mr Knuplez has received since 2014 are as follows:
13.Mr Knuplez’s Foreman Allowance was increased in November 2017 to resolve a claim that his Foreman rate in 2014 should have been higher such that he should have been paid a total pay rate of $53.8131.” (emphasis in original)
Enterprise Agreements
Two industrial instruments made under the FW Act are the subject of the dispute:
· the O-I Adelaide Maintenance Enterprise Agreement 2019 (the 2019 EA); and
· the Visy Glass Adelaide Enterprise Agreement (Mechanical Maintenance) 2022 (the 2022 EA).
Both the 2019 and 2022 agreements (EA’s) covered “maintenance mechanical and electrical employees who are engaged within the classifications” in each agreement and employed at West Croydon in Adelaide, South Australia.[5]
Mr Knuplez was covered by both EA’s and their predecessor agreements.
The AMWU is an employee organisation covered by both EA’s.
The 2019 EA was made on 22 July 2019 and approved by the Commission on 6 September 2019. It operated from 13 September 2019. It reached its nominal expiry date on 31 July 2022.
The 2022 EA was made on 31 May 2022 and approved by the Commission on 28 June 2022. It has operated since 5 July 2022. It has not reached its nominal expiry date (31 July 2025).
2014: foreman position and ‘red circling’ allowance
In 2014, and whilst working under the terms of the 2013 Agreement, Mr Knuplez was employed as a foreman in the machine maintenance department.
In 2014, the employer decided to dispense with the position of foreman in that department.
By letter dated 16 October 2014, Mr Knuplez was advised (the 2014 arrangement):[6]
“Dear Ken
This letter is to confirm discussions held with you, your Manager and the Production Support Manager on Tuesday, 14th October 2014 and discussions held with your Union Representative, David Douris.
Due to the recent down-sizing of the Plant, the Company no longer requires the position of Foreman in the Machine Maintenance Department to be undertaken by yourself or any other employee. You will revert to the position of Mechanical Fitter in the Machine Maintenance Department.
The department structure will operate with one Leading Hand.
As a result, please be advised that your Foreman rate of $7.54641 per hour will now be absorbed into future Workplace Agreement wage increases.
If you have any questions, please let us know.
Regards
Nicola Powell
Human Resources Manager
O-I Adelaide Plant”
At the date the foreman position was abolished, Mr Knuplez was and had been in receipt of a foreman’s allowance. That allowance was paid as an hourly rate (rounded from four decimal points) for hours worked. It was added to Mr Knuplez’s base rate as a mechanic level C6 under the 2013 Agreement.
From that date, Mr Knuplez came to be known as one of a number of ‘red circled’ foremen. The notion of being ‘red circled’ was that Mr Knuplez, though no longer being employed as a foreman, would continue to receive a foreman’s allowance (and, under the terms of the 2014 arrangement, over time a receding portion thereof) until the allowance was absorbed by future increases in his base wage rate:[7]
“… your Foreman rate of $7.54641 per hour will now be absorbed into future Workplace Agreement wage increases”.
For the remainder of the life of the 2013 Agreement and then during the term of the 2016 Agreement Mr Knuplez received a foreman’s allowance on the aforementioned basis.
According to the table at paragraph 12 of the Agreed Facts, the value of the allowance between 14 July 2014 and 13 November 2017 receded from $7.5464 per hour to $4.5558.
In November 2017, and following a complaint by Mr Knuplez about past calculation of the red circled foreman’s allowance, the employer agreed to increase the amount paid to $9.0617 per hour (from $4.5558). From 13 November 2017, and consequent on the increase, Mr Knuplez was paid $9.0617 per hour. Thereafter, this amount continued to recede in accordance with the 2014 arrangement.
Payment of allowance during life of 2019 EA
The 2019 EA commenced on 13 September 2019.
Clause 2.2 provided for 2.5% increases to the base rate of pay from 1 July in each of 2019, 2020 and 2021.[8]
Part 11 provided for wages and allowances.
Clause 11.1.3 provided that certain allowances increase “in accordance with the agreed percentage increases in cl 2.2”. This included the following:
| Allowance type | FIRST FULL PAY PERIOD ON OR AFTER 1 JULY 2019 | First full pay period on or after 1 July 2020 | First full pay period on or after 1 July 2021 |
| Red circled Foreman (hourly) | $2.51964 | $1.34995 | $0.15101 |
During the life of the 2019 EA Mr Knuplez received a foreman’s allowance on this receding basis in accordance with the terms of the 2019 EA though he continued (as he had since November 2017) to be paid an amount above the Agreement rate. Hence, although the 2019 EA provided for a receding foreman’s allowance of:
· $2.51964 from 1 July 2019;
· $1.34995 from 1 July 2020; and
· $0.15101 from 1 July 2021
Mr Knuplez was in fact paid (with the supplement) a receding amount of:
· $7.0255 from 1 July 2019; and
· $5.8558 from 1 July 2020.
However, from 8 July 2021 Mr Knuplez was paid a higher, not receding amount. The payment Mr Knuplez received increased from $5.8558 per hour to $8.1667 per hour.
Payment of allowance during life of 2022 EA
The 2022 EA commenced on 5 July 2022. At that time, the value of Mr Knuplez’s foreman’s allowance under the 2019 EA had receded to $0.15101 per hour (though he was, in fact, being paid $8.1667 per hour).
The 2022 EA also provided for 2.5% increases to the base rate of pay from 1 July in each of 2022, 2023 and 2024.[9]
Part 11 provided for wages and allowances.
Allowances were set out in cl 11.1.3, 11.1.4 and 11.1.5.
No foreman’s allowance was provided for. Unlike the 2019 EA, no “Red circled Foreman (Hourly)” allowance was prescribed in the 2022 EA.
However, from the time the 2022 EA commenced Mr Knuplez continued to be paid an hourly amount in addition to his base rate. The hourly amount was $8.1667 from the 8 July 2022 pay period.
Removal of allowance November 2022
In April 2022 Mr Butler, as part of his regular duties, conducted a payroll audit of employees within his remit.
Mr Butler noticed that Mr Knuplez’s receding foreman’s allowance had in fact been increased (not decreased) in July 2021.
Upon investigation, Mr Butler formed the view that this had occurred due to a payroll system error.[10]
In September 2022 Mr Butler informed Mr Knuplez that the company had detected an error (overpayment) in the allowance and that he considered the correct amount as supplemented to be $3.4279 per hour and not the $8.1667 per hour that was being paid.
Between September and November 2022 the matter was the subject of communication between the employer and Mr Knuplez and his representative but no agreement or compromise was reached.
In November 2022 Mr Butler directed payroll to correct what he considered to be the error, and reduce the amount paid to Mr Knuplez from $8.1667 to $3.4279 per hour.
This reduced amount was paid from 14 November 2022.
Dispute
As the matter had not been resolved at the workplace level, on 28 November 2022 the AMWU notified a dispute in the Commission.
Despite a conference being held on 8 December 2022, the dispute remained at a stalemate.
The parties sought arbitration.
Question to be determined
The parties were directed to agree a question to be arbitrated, and have done so.
The question is:[11]
“What rates of pay were applicable to the Applicant under the terms of the O-I Adelaide Enterprise Agreement (Maintenance) 2019 over its period of operation; and are presently applicable to the Applicant under the terms of the Visy Glass Adelaide Enterprise Agreement (Mechanical Maintenance) 2022?”
This question has two limbs. It seeks an answer to the rates of pay that were applicable to Mr Knuplez and payable under the 2019 EA. Separately, it seeks an answer to the rates of pay that are “currently applicable” under the 2022 EA.
Submissions
Mr Knuplez[12]
Mr Knulpez submits that he was entitled to be paid a foreman’s allowance after the position of foreman was abolished in 2014 because his entitlement was ‘red circled’ under the 2014 arrangement.
Mr Knuplez submits that during the life of the 2019 EA he was entitled to receive the base wage rate applicable to the C6 mechanic classification as increased by 2.5% from each 1 July 2019, 2020 and 2021, plus entitled to receive the red circled foreman’s allowance as set out in Part 11 of the 2019 EA as had been supplemented by Visy in November 2017.
Mr Knuplez submits that during the life of the 2022 EA he was and is entitled to receive the base wage rate applicable to the C6 mechanic classification as increased by 2.5% from 1 July 2022 (and each 1 July thereafter), plus being entitled to receive the foreman’s allowance that was being paid to him as of 1 July 2022 and with that allowance also being increased by 2.5% each year.
Mr Knuplez submits that the foreman’s allowance was payable under the 2022 EA because it is an “allowance for all purposes” within the meaning of cl 2.2.2 of the 2022 EA.
Mr Knuplez submits that the dollar value of this allowance as of 1 July 2022 must be increased by 2.5% on 1 July each year because cl 2.2.3 of the 2022 EA provides that the percentage wage increase “will also be applied to all-purpose allowances”.
Mr Knuplez submits that he was entitled under the 2022 EA to an “increase” in the allowance whereas Visy has, in fact, decreased the allowance because it has failed to correctly apply the 2022 EA.
Separately, Mr Knuplez also submits that he was entitled to the foreman’s allowance during the life of the 2019 EA and the 2022 EA because he performed the work of a foreman on a higher duties basis during three weeks in 2021 and during three weeks in 2022.[13]
It follows that Mr Knuplez says that the answer to the first limb of the question (the 2019 EA) is an all-up rate (base rate plus foreman’s allowance) of $53.8131 per hour from 1 July 2019 and 1 July 2020, and $57.3229 per hour from 1 July 2021.
It also follows that Mr Knuplez says that the answer to the second limb of the question (the 2022 EA) is an all-up rate (base rate plus foreman’s allowance) of $58.55 per hour increasing by 2.5% from 1 July 2023 and from 1 July 2024.
Accordingly, Mr Knuplez seeks a determination that these rates were and are payable, and that Mr Knuplez had been underpaid since November 2022.
Visy[14]
Visy agree that Mr Knuplez was entitled to be paid a foreman’s allowance after the position of foreman was abolished in 2014 but only on the basis of the ‘red circled’ 2014 arrangement as provided for in subsequent industrial instruments.
In relation to the 2019 EA, Visy submit that the applicable base rate payable to Mr Knuplez was the rate applicable to the C6 mechanic classification as increased by 2.5% from 1 July 2019, 2020, and 2021. Visy submit that the foreman’s allowance payable was as stated in cl 11.1.3 (Red circled Foreman (Hourly)). Visy submit that this was a receding amount consistent with the 2014 arrangement.
In relation to the 2022 EA, Visy submit that the applicable base rate payable to Mr Knuplez was the rate applicable to the C6 mechanic classification as increased by 2.5% from 1 July 2022 and to be increased by 2.5% from 1 July 2023 and 1 July 2024.
In relation to the foreman’s allowance, Visy submit that no foreman’s allowance (or ‘red circled’ allowance) is provided for in the 2022 EA and therefore none is payable under the terms of the EA. Visy submit that no red circled foreman’s allowance was provided for in the 2022 EA because the dollar value of the allowance had, by the time the 2022 EA commenced, been fully absorbed by the 2.5% increases to the C6 base rate of pay (including the increase from 1 July 2022).
Separately, Visy submit that cl 2.2 of the 2019 EA and the 2022 EA does not apply. It submits that the foreman’s allowance is not an all-purpose allowance.
Insofar as the 2019 EA is concerned Visy submit that even if it is said that the foreman’s allowance is an all-purpose allowance (which it contests), cl 2.2.3 operates “as per the wage and allowance schedule” and that Part 11 (schedule) contains a specific provision (cl 11.1.3) for a ‘red circled foreman’ such as Mr Knuplez. Visy claims that this specific provision overrides any more general increase to allowances.
Insofar as the 2022 EA is concerned, Visy submit that cl 2.2 cannot operate to increase a non-existent allowance. It submits that the allowance that was being paid to Mr Knuplez was and is no longer an allowance provided for under the agreement.
Finally, Visy submit that the amount of the allowance paid since July 2021 included an amount paid in error, and even if that was an amount payable under the 2022 EA (which is denied), it was appropriate for Visy to correct the error. The employer submits that the correction of the error did not result in Visy not making payments to Mr Knuplez as required by the 2022 EA.
It follows that Visy say that the answer to the first limb of the question (2019 EA rate) is:
· from 1 July 2019: $49.3072 (base rate $46.78763 plus “red circled” foreman’s allowance $2.51964);
· from 1 July 2020: $49.3072 (base rate $47.95732 plus “red circled” foreman’s allowance $1.34995); and
· from 1 July 2021: $49.66636 (base rate $49.15626 plus “red circled” foreman’s allowance $0.5101).
It follows that Visy say that the answer to the second limb of the question (2022 EA rate) is $50.3852 (base rate only) from 1 July 2022, with $51.5188 payable from 1 July 2023 and $52.5492 payable from 1 July 2024.
Visy submit that any additional amounts that it is paying or may continue to pay to Mr Knuplez are not provided for or payable under either the 2019 or 2022 EAs and cannot form part of the answer to the questions posed.
Accordingly, Visy submit that it paid Mr Knuplez at least at the levels required of it by the 2019 EA and the 2022 EA and that there is no past or current underpayment.
Consideration
Jurisdiction
In this matter, the role of the Commission is one of private arbitration, defined by the terms of the EA.
Section 739(4) of the FW Act provides that “if, in accordance with the term, the parties have agreed that the FWC may arbitrate (however described) the dispute, the FWC may do so”. However, the Commission “must not exercise any powers limited by the term” (s 793(3)), and “must not make a decision that is inconsistent with this Act, or a fair work instrument that applies to the parties” (which includes an enterprise agreement) (s 93(5)).
Clauses 6.1.3 to 6.1.8 of the 2022 EA provide:
“ 6.1.3 On all occasions, any issue, grievance or dispute over any matter between the parties to this Agreement shall be settled in accordance with this procedure without resorting to any industrial action. This shall apply whether the matter in dispute relates directly to a matter dealt with by this Agreement, or not.
6.1.4. Where an issue, grievance or dispute arises, the matter will be initially discussed and resolved between the Employee (and if the Employee so desires, an Employee representative) and the Employee’s immediate supervisor.
6.1.5. If the issue, grievance or dispute remains unresolved after discussions outlined above, the employee (and if the employee so desires, an employee representative and /or union official} and more senior management as appropriate (including Employer Organisation if required) shall discuss and resolve the matter.
6.1.6 Notification of an employee grievance shall be made in the first instance in writing. Such written notification shall be dated, briefly describe the grievance and copies of such notice shall be given to the Supervisor.
6.1.7 If the dispute still remains unresolved, either party may refer the dispute to the Fair Work Commission or where agreed a private arbiter for conciliatton and, if necessary arbitration.
6.1.8 The parties agree to be bound by the decision of the Fair Work Commission or where applicable the agreed private arbiter.”
Jurisdictional issues are not in dispute.
It is agreed, and I so find, that the dispute is a matter “between the parties” within the meaning of cl 6.1.3.
It is also agreed, and I so find, that the preconditions in cl 6.1.7 requiring the dispute to have been first dealt with at the workplace level have been met.
I am also satisfied that the question asked is within jurisdiction in that it is asking the Commission to settle a dispute over the application of the 2019 and 2022 EA’s by expressing a considered view on what were and are the applicable rates payable to Mr Knuplez. The dispute concerns rates of pay under the EA and emanates from a decision by the employer in November 2022 to cease making certain payments to Mr Knuplez. It is within the Commission’s jurisdiction to express an opinion on a legal question such as rates of pay in the course of settling an industrial dispute.[15] The answers I will provide to the question will be the expression of that opinion.
An important limit on the Commission’s jurisdiction is to be noted. Not being a court, the Commission does not exercise judicial power.[16] The Commission cannot make a final determination whether Mr Knuplez has, at law, been lawfully paid or underpaid. Only a court can do that. Nor can the Commission make orders for sums due even if the Commission forms a view in the course of determining the dispute that payments have not been made in accordance with an industrial instrument.[17]
In this respect, the determinations sought by Mr Knuplez at paragraphs 4, 5 and 6 of the application (F10 items 3.1 and 2.5) as to the “correct” rate of pay, that he “does not owe money” to the respondent, and that he is entitled to a “payment in arrears” are determinations sought that can only be expressions of opinion in settlement of the dispute.
This limit on jurisdiction is acknowledged by Mr Knuplez at paragraph 4 of his written submission.
I note however that cl 6.1.8 of the 2022 EA provides that “the parties agree to be bound” by the decision of the Commission.
Principles applicable to the interpretation of enterprise agreements
Determining this matter requires interpretation of the terms of the 2019 and 2022 EAs.
Principles governing the interpretation of enterprise agreements are well established and need not be repeated. To the extent required, I adopt the summary of those principles set out by a Full Court of the Federal Court of Australia in James Cook University v Ridd.[18]
I now consider the questions posed.
Payments applicable under 2019 EA
What rates of pay were applicable to Mr Knuplez under the terms of the 2019 EA?
It is not in dispute that Mr Knuplez was a C6 Machine Mechanic.
Under the 2019 EA, wages were payable under cl 2.2 in accordance with the classifications and rates set out in the Part 11 ‘Wage and Allowance Schedule’ (the 2019 EA Schedule).
Under cl 11.1 of the 2019 EA Schedule, the base hourly rate of pay for each ordinary hour of work by Mr Knuplez was:
· from 1 July 2019: $46.78763;
· from 1 July 2020: $47.95732; and
· from 1 July 2021: $49.15626.
Accordingly, Mr Knuplez was entitled by way of wage to the aforesaid base hourly rates of pay under the 2019 EA.
With respect to the foreman’s allowance, I conclude that Mr Knuplez was entitled under the 2019 EA to those amounts set out in cl 11.1.3 of the 2019 EA Schedule designated under the “allowance type” as the “red circled foreman (hourly)”. These amounts were:
· from 1 July 2019: $2.51964
· from 1 July 2020: $1.34995; and
· from 1 July 2021: $0.5101.
Accordingly, when these two amounts (base rate and red circled foreman’s allowance) are combined, I conclude that Mr Knuplez was entitled under the 2019 EA to a total hourly rate of:
· from 1 July 2019: $49.3072;
· from 1 July 2020: $49.3072; and
· from 1 July 2021: $49.66636.
I make these findings for the following reasons.
Firstly, these are the amounts expressly provided for in the 2019 EA. These amounts give effect to the ordinary language of the 2019 EA read as a whole and in context.
Secondly, the “red circled” foreman’s allowance hourly rates provided for in cl 11.1.3 were applicable to Mr Knuplez because he was a ‘red circled’ foreman during the life of the 2019 EA and had been such since 16 October 2014.
I do not accept the submission by Mr Knuplez that he was entitled, during the life of the 2019 EA, to an increase in the allowance of 2.5% each 1 July on the basis that it was an all-purpose allowance and required by cl 2.2.4 to be increased in that manner. Even if the red circled foreman’s allowance was an “all-purpose” allowance (which for the following reason I need not decide), this submission fails to take into account that cl 2.2.3 provides that all-purpose allowances are payable “as per the wage and allowance schedule”. The 2019 EA Schedule specifically provides for a payment of a red circled foreman allowance according to an expressly specified receding quantum. On the ordinary principles of interpretation applicable to industrial instruments, that expressly receding scale applied.
Whilst it is unnecessary to have regard to the history of cl 11.1.3 given the ordinary meaning of the 2019 EA read as a whole and in context, that history accords with this construction. A receding allowance being payable to a red circled foreman such as Mr Knuplez appears to have been the expression of the continuing operation of the 2014 arrangement.
I note that cl 11.1.3 of the 2019 EA provides for a “Leading hand (hourly)” allowance. To the extent that Mr Knuplez was required to perform leading hand duties during the life of the 2019 EA he was entitled to that allowance for the hours such work was performed. That allowance was increased from 1 July in each of 2019, 2020 and 2021 in accordance with the terms of cl 11.1.3.
Accordingly I conclude that Mr Knuplez had no entitlement under the 2019 EA to an increase (of 2.5% or otherwise) in the ‘red circled’ foreman’s allowance he was being paid at the commencement of the 2019 EA or during its life. He had an entitlement to the receding rate of the ‘red circled’ foreman’s allowance as set out in cl 11.1.3 of the 2019 EA. He also had an entitlement to the leading hand allowance under the 2019 EA as and when he worked as a leading hand.
Payments applicable under 2022 EA
What rates of pay were and are applicable to Mr Knuplez under the terms of the 2022 EA?
It is not in dispute that Mr Knuplez continues to be employed as a C6 Machine Mechanic.
Under the 2022 EA, wages are payable under cl 2.2 in accordance with the classifications and rates set out in the Part 11 ‘Wage and Allowance Schedule’ (the 2022 EA Schedule).
Under cl 11.1 of the 2022 EA Schedule, the base hourly rate of pay for each ordinary hour of work by Mr Knuplez was:
· from 1 July 2022: $50.3852;
· from 1 July 2023: $51.5188; and
· from 1 July 2024: $52.5492.
Accordingly Mr Knuplez is entitled by way of wage to the aforesaid base hourly rates of pay under the 2022 EA.
Is a foreman’s allowance or red circled foreman’s allowance presently applicable to Mr Knuplez under the 2022 EA?
I think not.
The evidence clearly establishes that no such allowance is provided for in Part 11 of the 2022 EA nor in any other cl of the EA. The red circled foreman’s allowance that appeared in cl 11.1.3 of the 2019 EA does not form part of the 2022 EA. In closing submissions it was acknowledged by Mr Knuplez that this payment “is not borne out by the agreement and is outside the agreement”.[19]
Mr Knuplez relies on cl 2.2.3. He submits that the allowance he received is not non-existent because it is an all-purpose allowance. Visy submit that cl 2.2.3 cannot operate to increase a non-existent allowance. I agree with Visy’s submission. An allowance not provided for in the EA cannot be an all-purpose allowance nor increased on that basis.
Clause 11.1.3 of the 2022 EA also provides for a “Leading hand (hourly)” allowance. To the extent Mr Knuplez is required to perform leading hand duties during the life of the 2022 EA he is entitled to that allowance for the hours he performs such work. That allowance increases from 1 July each year in accordance with the terms of cl 11.1.3.
However, that allowance is not the red circled foreman’s allowance that had been formerly provided for in the 2019 EA.
Accordingly I conclude that Mr Knuplez has no entitlement under the 2022 EA to an increase (of 2.5% or otherwise) in the ‘red circled’ foreman allowance he had formerly been entitled to under the 2019 EA because that allowance is no longer provided for in the EA. Mr Knuplez has an entitlement to the leading hand allowance under the 2022 EA as and when that entitlement arises.
I make three final observations.
Firstly, as noted, I have taken into account Mr Knuplez’s submission that he was entitled to the foreman’s allowance during the life of the 2019 and 2022 EAs because he performed the work of a foreman on a higher duties basis during three weeks in 2021 and during three weeks in 2022. The fact of that additional work in six weeks of that two year span appears not to be contested. As Mr Knuplez was required to work higher duties in those weeks, he was entitled to be paid the relevant higher duties allowance provided for by the 2019 and 2022 EAs for the relevant hours of higher duty. The evidence of Mr Butler[20] is that a “Higher Duty Ordinary time” allowance was paid at least in October 2021.
That Mr Knuplez did, from time to time, perform higher duties does not disturb the conclusion I have reached concerning either the base rate of pay applicable under the 2019 or 2022 EAs or the receding and then non-existent foreman’s allowance.
Secondly, in reaching this overall conclusion I have had regard to the terms of the question asked. The question concerns the rates of pay that were applicable to Mr Knuplez under the terms of the 2019 EA and the 2022 EA. The question does not invite consideration of whether Mr Knuplez was entitled by contract to payments over and above what is provided for in those industrial instruments.
It is self-evident from the factual narrative that during 2017 and into the life of the 2019 EA that Visy agreed to supplement the allowance paid to Mr Knuplez by an increased amount and continued thereafter to make payments or part payments on that basis. Whether those increased amounts constitute a past or continuing contractual entitlement is not a matter on which I express an opinion. The relevant issue in this matter is that, on the material before the Commission, there is no evidence that such amounts were applicable to or are payable under the terms of the 2019 EA or the 2022 EA. That said, I agree with Mr Knuplez that certain payments were made according to business practices and business records. However, I am only able to determine this dispute by reference to the terms of the relevant EA’s. That I have done.
Thirdly, as I have not found that Mr Knuplez had a continuing entitlement to the ‘red circled’ foreman’s allowance under the 2022 EA and as I am not dealing with contractual matters, it has not been necessary to express an opinion on the reduction in the rate paid to Mr Knuplez from $8.1667 to $3.4279 per hour in November 2022, as neither of those amounts are applicable under the terms of the 2022 EA. I express no view on whether the higher of those amounts was paid in error, or whether the decrease was a correction of an error, or whether (if it was), whether the decrease was consistent with established legal and industrial principles applicable to the correction of payroll errors by employers.
Conclusion
Mr Knuplez had no entitlement under the 2019 EA to an increase (of 2.5% or otherwise) in the ‘red circled’ foreman allowance he was paid at the commencement of the 2019 EA or during its life. He had an entitlement to the receding rate of the ‘red circled’ foreman’s allowance set out in cl 11.1.3 of the 2019 EA. He also had an entitlement to the leading hand allowance under the 2019 EA as and when that entitlement arose.
Mr Knuplez has no entitlement under the 2022 EA to an increase (of 2.5% or otherwise) in the ‘red circled’ foreman allowance he had formerly been paid under the 2019 EA because that allowance is not provided for in the 2022 EA. Mr Knuplez has an entitlement to the leading hand allowance under the 2022 EA as and when that entitlement arises.
Disposition
The answers to the questions requiring determination are as follows.
In respect of the 2019 EA the rates of pay applicable to Mr Knuplez were:
a base hourly wage for each ordinary hour of work of:
· from 1 July 2019: $46.78763;
· from 1 July 2020: $47.95732;
· from 1 July 2021: $49.15626; and
a “red circled foreman (hourly) allowance of:
· from 1 July 2019: $2.51964
· from 1 July 2020: $1.34995;
· from 1 July 2021: $0.5101; and
comprising a total (base rate and red circled foreman’s allowance) of:
· from 1 July 2019: $49.3072;
· from 1 July 2020: $49.3072; and
· from 1 July 2021: $49.66636.
In respect of the 2022 EA the rates of pay applicable to Mr Knuplez were:
a base hourly wage for each ordinary hour of work of:
· from 1 July 2022: $50.3852;
· from 1 July 2023: $51.5188;
· from 1 July 2024: $52.5492; and
no red circled foreman’s allowance was payable or subject to increase under the terms of the 2022 EA.
The dispute is determined accordingly.
DEPUTY PRESIDENT
Appearances:
Mr M O’Loughlin, on behalf of Mr K A Knuplez
Mr B Popple, with permission, with Ms S Hill, on behalf of Visy Glass Operations (Australia) Pty Ltd T/A Visy Glass
Hearing details:
2022
Adelaide (by video)
2 March
[1] Email ‘Chambers – Anderson DP’ 1 March 2023 10.52am
[2] A1 Statement 16 February 2023
[3] R1 Statement 22 February 2023; R2 Statement 28 February 2023
[4] A2
[5] 2019 EA clause 1.3 ‘Parties Bound’; 2022 EA clause 1.3 ‘Parties Bound’
[6] A2 Attachment 1
[7] ibid
[8] 2019 EA Clause 2.2.1
[9] 2022 EA Clause 2.2.1
[10] R1 paragraphs 4 - 6
[11] Applicant’s submission paragraph 1; Respondent’s submission paragraph 4
[12] Applicant’s submission 16 February 2023
[13] A1 paragraph 13
[14] Respondent’s submission 22 February 2023
[15] Qantas Airways Limited v Mathew Mazzitelli[2020] FWCFB 2628 at [34]]
[16] Re Cram; Ex parte Newcastle Wallsend Coal Co Pty Ltd (1987) 163 CLR 140 and authorities referred to therein; Construction, Forestry, Mining and Energy Union v BHP Billiton Nickel West Pty Ltd[2017] FWCFB 217 at [27]
[17] Qantas Airways Limited v Mathew Mazzitelli[2020] FWCFB 2628 at [33]
[18] (2020) 278 FCR 566, (2020) 298 IR 50, [2020] FCAFC 123 at [65]
[19] Audio recording of Hearing, 2 March 2023, 1:41:53-1:42:03
[20] R2 paragraphs 4 and 5
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