Kogan Creek Power Pty Ltd T/A CS Energy v Construction, Forestry, Maritime, Mining and Energy Union
[2022] FWC 162
•31 JANUARY 2022
| [2022] FWC 162 [Note: An appeal pursuant to s.604 (C2022/1274) was lodged against this decision.] |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.739—Dispute resolution
Kogan Creek Power Pty Ltd T/A CS Energy
v
Construction, Forestry, Maritime, Mining and Energy Union
(C2021/502)
| DEPUTY PRESIDENT ASBURY | BRISBANE, 31 JANUARY 2022 |
Alleged dispute about any matters arising under the enterprise agreement and the NES;[s186(6)]
Background
This decision concerns an application by Kogan Creek Power Pty Ltd T/A CS Energy (CS Energy) under s.739 of the Fair Work Act 2009 (FW Act) seeking that the Fair Work Commission (the Commission) deal with a dispute under the dispute resolution procedure in the Kogan Creek Power Station Enterprise Agreement 2020 (2020 Agreement). The Respondent is the Construction, Forestry, Maritime, Mining and Energy Union (the CFMMEU). The Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (the CEPU) and Professionals Australia are also covered by the 2020 Agreement and were granted permission to intervene in the dispute as interested parties on the basis that both organisations had members whose interests may be affected by the outcome.
The 2020 Agreement provides at clause 4.10(f) for an arrangement under which employees who work overtime can nominate to be paid overtime at the applicable penalty rate or to be paid for half of the time at an applicable penalty rate and an equivalent amount of time (time at the applicable penalty rate multiplier) credited to bank titled “Mutually Managed Time” (MMT) to be taken as time off in the future. Clause 4.10(g) provides that MMT will be capped at 60 hours and prescribes arrangements for dealing with hours in excess of the cap. The dispute relates to whether future MMT booked by employees, but not taken, is counted for the purposes of the cap. The dispute arose when CS Energy commenced paying out MMT in circumstances where MMT (including future MMT approved as time off) exceeds 60 hours.
Conferences of the parties were conducted which narrowed the issues between them but did not resolve the dispute. The Grievance and Dispute Settling Procedures in clause 8 of the 2020 Agreement provide for arbitration if a dispute remains unresolved after conciliation. It is common ground that the dispute was not resolved following conciliation and that the Commission is empowered to arbitrate the dispute. The parties agreed to the following question for arbitration:
“For the purposes of clause 10(g) of the Kogan Creek Power Station Enterprise Agreement 2020, in determining whether an individual’s accumulated MMT exceeds 60 hours, does this include or exclude MMT leave booked into the future but not yet taken?”
Directions were issued for a hearing requiring the parties to file and serve outlines of submissions and statements of evidence from witnesses to be relied on at the hearing. Evidence for CS Energy was given by Mr Jacques Dippenaar, General Manager, Kogan Creek Power Station.[1] Evidence for the CFMMEU was given by Mr Michael Gleeson, Production Control Operator and Lodge Secretary for the Kogan Creek Lodge of the CFMMEU.[2] A hearing was conducted on 24 August 2021.
Permission was granted for CS Energy to be represented by Mr M Rodgers, of Mapien Workplace Strategists, in the capacity of paid agent. Permission was granted on the basis that I was satisfied that the matter is complex, involves the proper construction of an enterprise agreement and allowing CS Energy to be represented by paid agent would enable the matter to be dealt with more efficiently. The CFMMEU was represented by its Senior Legal Officer, Mr C Newman. Mr J Young appeared for the CEPU and Mr T Whibley for Professionals Australia. The CEPU and Professionals Australia did not make submissions or seek to lead evidence and supported the submissions made by the CFMMEU.
Principles relevant to construction of enterprise agreements
The approach and the principles relevant to the task of construing the terms of an enterprise agreement was most recently set out in a Decision of a Full Bench of the Commission in Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU) v Berri Pty Ltd[3] as follows:
“1. The construction of an enterprise agreement, like that of a statute or contract, begins with a consideration of the ordinary meaning of the relevant words. The resolution of a disputed construction of an agreement will turn on the language of the agreement having regard to its context and purpose. Context might appear from:
(i) the text of the agreement viewed as a whole;
(ii) the disputed provision’s place and arrangement in the agreement;
(iii) the legislative context under which the agreement was made and in which it operates.
2. 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.
3. The common intention of the parties is sought to be 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, without regard to the subjective intentions or expectations of the parties.
4. The fact that the instrument being construed is an enterprise agreement made pursuant to Part 2-4 of the FW Act is itself an important contextual consideration. It may be inferred that such agreements are intended to establish binding obligations.
5. The FW Act does not speak in terms of the ‘parties’ to enterprise agreements made pursuant to Part 2-4 agreements, rather it refers to the persons and organisations who are ‘covered by’ such agreements. Relevantly s.172(2)(a) provides that an employer may make an enterprise agreement ‘with the employees who are employed at the time the agreement is made and who will be covered by the agreement’. Section 182(1) provides that an agreement is ‘made’ if the employees to be covered by the agreement ‘have been asked to approve the agreement and a majority of those employees who cast a valid vote approve the agreement’. This is so because an enterprise agreement is ‘made’ when a majority of the employees asked to approve the agreement cast a valid vote to approve the agreement.
6. Enterprise agreements are not instruments to which the Acts Interpretation Act 1901 (Cth) applies, however the modes of textual analysis developed in the general law may assist in the interpretation of enterprise agreements. An overly technical approach to interpretation should be avoided and consequently some general principles of statutory construction may have less force in the context of construing an enterprise agreement.
7. In construing an enterprise agreement it is first necessary to determine whether an agreement has a plain meaning or it is ambiguous or susceptible of more than one meaning.
8. Regard may be had to evidence of surrounding circumstances to assist in determining whether an ambiguity exists.
9. If the agreement has a plain meaning, evidence of the surrounding circumstances will not be admitted to contradict the plain language of the agreement.
10. If the language of the agreement is ambiguous or susceptible of more than one meaning then evidence of the surrounding circumstance will be admissible to aid the interpretation of the agreement.
11. The admissibility of evidence of the surrounding circumstances is limited to evidence tending to establish objective background facts which were known to both parties which inform the subject matter of the agreement. Evidence of such objective facts is to be distinguished from evidence of the subjective intentions of the parties, such as statements and actions of the parties which are reflective of their actual intentions and expectations.
12. Evidence of objective background facts will include:
(i) 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;
(ii) notorious facts of which knowledge is to be presumed; and
(iii) evidence of matters in common contemplation and constituting a common assumption.
13. The diversity of interests involved in the negotiation and making of enterprise agreements (see point 4 above) warrants the adoption of a cautious approach to the admission and reliance upon the evidence of prior negotiations and the positions advanced during the negotiation process. Evidence as to what the employees covered by the agreement were told (either during the course of the negotiations or pursuant to s.180(5) of the FW Act) may be of more assistance than evidence of the bargaining positions taken by the employer or a bargaining representative during the negotiation of the agreement.
14. Admissible extrinsic material may be used to aid the interpretation of a provision in an enterprise agreement with a disputed meaning, but it cannot be used to disregard or rewrite the provision in order to give effect to an externally derived conception of what the parties’ intention or purpose was.
15. In the industrial context it has been accepted that, in some circumstances, subsequent conduct may be relevant to the interpretation of an industrial instrument. But such post-agreement conduct must be such as to show that there has been a meeting of minds, a consensus. Post-agreement conduct which amounts to little more than the absence of a complaint or common inadvertence is insufficient to establish a common understanding.”
In CFMEU v Endeavour Coal Pty Ltd T/A Appin Mine[4] a Full Bench of the Commission held that the context of an agreement provision is significant. In this regard, the Full Bench set out the explanation of this point by the NSW Court of Appeal in Mainteck Services Pty Ltd v Stein Heurtey SA[5] emphasising the following matters:
· Until a word or phrase is understood in the light of the surrounding circumstances, it is rarely possible to know what it means[6] and there is always some context to any statement;[7]
· Language considered in its context will often have a clear meaning and context will often not displace that meaning – “but not always”;[8]
· To state that a legal text is clear reflects the outcome of an interpretation process and means that there is nothing in the context that detracts from the ordinary literal meaning and cannot mean that context can be put to one side;[9]
· The phrase used by Mason J in Codelfa “if the language is ambiguous or susceptible of more than one meaning” does not mean that the susceptibility of the language to more than one meaning must be assessed without reference to the surrounding circumstances and in order to determine whether more than one meaning is available it may be necessary to turn to context;[10] and
· Context has also been described as surrounding circumstances and the meaning of terms normally requires consideration not only of the text, but of the surrounding circumstances known to the parties and the purpose and object of the transaction[11]
The case law in relation to the approach to the construction of enterprise agreements makes it clear that context and purpose must be considered even where the words of the provision being construed appear, on their face, to have a clear and unambiguous meaning. In principle 15 in Berri the Full Bench dealt with the relevance of post-agreement conduct to the construction of the terms of an enterprise agreement citing the judgment of Gray J in ALHMWU v Prestige Property Services Pty Ltd[12] in which his Honour observed that:
“I am prepared to accept that the construction of an award can be affected by a common understanding of the parties to it about a particular state of affairs. If such a common understanding existed when the award was made, it should not be departed from when the Court comes to construe the award at a subsequent time. Care must be taken however, to distinguish a common understanding from common inadvertence ... In order to have an understanding, it is necessary that there be a meeting of minds, a consensus. There can be no meeting of minds, no consensus, if no one has thought about the issue.”[13]
In that case Gray J then went on to observe that the case he was dealing with was not one where a party had changed its mind and gone back on a common assumption but rather, was a case where no common assumption ever existed.[14] Also relevant in the present case are the observations his Honour made in Shop Distributive and Allied Employees’ Association v Woolworths Limited[15] as follows:
“If the presumption of consistent use of terminology is so weak in legislative drafting, it must be even weaker in the context of a Certified Agreement. Typically such agreements are the product of hard negotiation, in which the wording of particular clauses is often agreed without reference to other provisions of the same document. Provisions are often transmitted from one agreement to the next in a series, without regard to whether their terminology sits well with the words used in newly adopted terms. The use of other agreements, and awards, as precedents can often result in the borrowing of provisions, again without regard to whether the words used in them are consistent with the rest of the agreement under consideration. For these and other reasons, consistency will often be absent. It is easy to see that the same word can be used in different provisions with different meanings.”
I have applied these principles in determining the matters in dispute.
Relevant 2020 Agreement Provisions
Consistent with principle 1 in Berri it is necessary to consider the text of the 2020 Agreement as a whole and the place of the disputed provision in the Agreement. Set out below is the disputed clause and other relevant clauses of the 2020 Agreement which it is necessary to consider, to understand the context of the disputed clause in terms of the Agreement as a whole.
The 2020 Agreement provides for types of employment at clauses 2.2 – 2.6 being Permanent full-time; Permanent part-time; Fixed term; or Casual employment. Clause 2.7 of the Agreement provides for categories of employment – A to H. Clause 2.7(a) provides that the employer may offer employment conditions under an “Alternative Individual Agreement” (AIA). AIAs are required to be underpinned by the 2020 Agreement and the conditions in an AIA in an “aggregate sense” are not to be less than the conditions in the 2020 Agreement. Employees on AIAs can revert to the 2020 Agreement and work the same nominal ordinary hours by giving 3 months’ written notice, which may be reduced by mutual agreement.
The categories of employment set out in 2.7(c) differentiate between employees based on whether they work under the 2020 Agreement or an AIA and whether they are day workers or shift workers. Categories A, B and C are employees who work under the Agreement. Day workers are category A or B depending on whether they work 72.5 hours per fortnight or 80 hours per fortnight, Monday to Friday. Category C employees are shift workers who work an average of 36.25 hours per week on a 7 day continuous roster.
Categories D – F cover employees on AIAs. Category D and E respectively cover day workers whose pattern of attendance is based on an average of 72.5 hours per fortnight or 80 hours per fortnight while category F covers shift workers who work an average of 36.25 hours per week on a 7 day continuous roster. Category G covers shift supervisors who work an average of 40 hours per week on a 7 day continuous roster under the Agreement and category H covers shift supervisors who work those hours under an AIA. For category G and H, the balance of hours is managed on a monthly basis, separate from the MMT process. Clause 4.9 deals with call out and recall and provides for compensation on the basis of employment category. Employees in categories A, B, C and G, (day workers and shift workers not on AIAs) are paid applicable penalty rates as per clause 4.10. Employees on AIAs are compensated for callouts by MMT at single time where an 8 hour MMT threshold is not reached for the month, or the applicable penalty rate in clause 4.10 where the 8 hour MMT threshold is reached for the month.
The ordinary hours of work for dayworkers, are dealt with in clause 4.2 of the 2020 Agreement which provides a weekly span of Monday to Friday, and a daily span of 6.00 am to 6.00 pm, with the ability for agreement to be reached on ordinary being worked outside this span. Work performed on a Saturday or Sunday by day workers is overtime and not counted as ordinary hours. Work on a public holiday is paid for at the rate of double time and a-half for all hours that fall on the holiday. Where the public holiday falls on a weekday (Monday to Friday) employees are also credited with MMT at single time for the ordinary hours of work that fall on that day. Where a public holiday falls on an RDO, the RDO will be moved or the applicable hours credited to the employees MMT balance at single time.
Clause 4.3 provides for day work rosters with a standard pattern of attendance of nine rostered days of work with one rostered day off per fortnight. Hours of work total 72.5 hours (8 hours 3 minutes per day) or 80 hours (8 hours 53 minutes per day) hours per fortnight. The ordinary hours depend on whether employees are working under an AIA, the details of which are not relevant to this dispute.
The 2020 Agreement also provides at clause 4.4 for a 7 day permanent roster for Production Control Operators (PCOs). Hours under such roster are worked continuously over 7 days a week, 24 hours a day with shifts of 12 hours and 5 minutes duration, based on an average of 36.25 ordinary hours per week. The standard pattern of attendance for a shift worker is 4 shifts on followed by 6 days off, with the 4 shifts worked comprised of 2 day shifts followed by 2 night shifts.
Clause 4.7 provides that remuneration in the Appendices to the Agreement is deemed to include compensation for shifts, shift rosters, and all ordinary hours worked outside the usual spread of hours Monday to Friday, public holidays, weekend and other penalties. The remuneration does not include plant outages or major overhaul work in clause 4.8. By virtue of clause 4.7(b) all up rates include a 3% overtime payment which covers: shift handovers; “incidental additional time worked less than 30 minutes on any day”; phone calls outside of hours (up to 30 minutes in a 24 hour period); and flexibility in the taking of meals to suit the continuity of work. Clause 4.7(c) provides that: “Subject to clause 4.10 where an employee works 30 additional minutes or more on any one day, overtime or MMT, as applicable, will be applied for the total additional time.”
Clause 4.8 contains provisions about plant outages and overhauls, and relevantly states at (b) that “subject to the monthly 8 hour minimum MMT threshold being met (as applicable to AIA employees), payment of overtime is worked during overhaul and outage conditions will be paid at double the all-up Agreement rate.”
Clause 4.10 deals with compensation for additional hours, and is in the following terms:
“4.10 Compensation for Additional Hours
(a) Employees will work reasonable additional hours to meet operational and business requirements, to provide relief for absences, in circumstances of break downs, call outs, recalls, emergency work and for maintenance associated with plant shut downs.
(b) It is not the Employer’s intention to require employees to work excessive additional hours. Where additional hours are required to be worked, the system of allocation of the working of these additional hours, operating as at the date of approval of this agreement, will continue. The Employer and the employees will use their best endeavours to avoid the need for working such hours.
(c) All additional hours worked must be authorised by the relevant Supervisor, Manager or General Manager prior to being performed.
(d) During overhauls and outages, a process will be implemented to roster employees who work shifts to equalise the time/shifts worked with due consideration to the roles required to be performed.
(e) With the exception of overtime worked during outages and overhauls as prescribed in clause 4.8, employees who are required to work additional hours to their normal roster pattern will receive the following compensation:
| Employment Category | Overtime Worked | Overtime Rate |
| Category A, B | Monday to Saturday—day workers and non- continuous shift workers | Time and a half calculated on the allup rate for the first two (2) hours on any day and double time calculated on the all-up rate thereafter |
| Hours contiguous with the varied ordinary hours (e.g. If on a twelve hour night shift the hours after the employee’s ordinary hours (e.g. 8 hours)) | Double time the all-up rate | |
| Sunday | Double time calculated on the all-up rate | |
| Public Holiday | refer to clause 5.7 (e) | |
| Category C & G | Additional 12 hour shift | Double time calculated on the all-up rate |
| Any further authorised additional hours | Double time calculated on the all-up rate | |
| Category D, E | First eight (8) hours of overtime worked in any calendar month | Number of hours worked to be credited as MMT at single time |
| Overtime hours worked over and above eight (8) hours in any calendar month. | Time and a half for the first two (2) hours on any day then double time on the all-up rate thereafter. | |
| Subject to the eight (8) hour MMT requirement, hours contiguous with the varied ordinary hours (eg. If on a twelve hour night shift the hours after the employee’s ordinary hours (e.g. 8 hours)). | Double time the all-up rate | |
| Sunday – where overtime hours are above eight (8) hours in any calendar month | Double time calculated on the all-up rate | |
| Public Holidays | Refer clause 5.7(f) | |
| Category F & H | First eight (8) hours of overtime in any calendar month. | Number of hours worked credited as MMT at single time. |
| Overtime hours worked over and above eight (8) hours in any calendar month. | Double time calculated on the all-up rate. |
(f) Where the employee is requested to work additional hours, other than the 8 hour MMT requirement for AIA employees, the employee will be entitled to nominate the overtime payments as either:
(i) Paid overtime at the applicable penalty rate or;
(ii) Paid for half of the time at the applicable penalty rate and half of the time at the applicable penalty rate multiplier, credited to the employee’s MMT balance. For example, an employee who worked 2 overtime hours at the rate of time and a half is entitled to 1 hour paid at time and a half and 1.5 hours credited to their MMT balance (i.e. 50/50 split).
(g) MMT that is accrued as set out in 4.10(f)(ii), will be capped at 60 hours. Where an individual’s accumulated MMT exceeds 60 hours the employee must make a plan with their Supervisor to take the MMT balance in excess of the 60 hour cap. Where this does not occur, the employer will pay out the MMT balance in excess of 60 hour cap at single time.”
Clause 4.11 deals with employee requested MMT and provides as follows:
“4.11 Employee Requested Mutually Managed Time (MMT)
(a) At the request of the employee, and where the employer agrees, an employee may exchange time worked outside of that employee’s normal attendance for an equal amount of time off, at a mutually agreed time.
(b) Where employees are eligible to accrue MMT for authorised additional hours, the Procedure for Mutually Managed Time shall apply as provided for in clause 9.2 Other Benefits.”
Clause 9.2 is titled “Other Benefits” and provides that procedures do not form part of the 2020 Agreement, but that rates of monetary entitlements, leave entitlements and other benefits existing as at the date of approval of the Agreement, including but not limited to procedures and policies listed in the clause, will not be reduced during the life of the Agreement, subject to ATO rules. Item l in the list is CS – HR – 65 Kogan Creek Mutually Managed Time (MMT) Procedure. The MMT Procedure was not tendered by either party in these proceedings.
Appendix 1 sets out “All-up” rates of pay for each classification for employees working under Agreement and AIA conditions depending on whether they are working a 36.25 hour week or a 40 hour week. Appendix 2 sets out examples of remuneration calculations for employees based on their rosters. The calculations for both 36.25 hours and 40 hours per week include the 3% overtime allowance. The calculation for a 40 hour week includes an additional 17.5% in the base rate, as “40 hour loading”. Appendix 3 provides for alterations to nominal ordinary hours of work and engagement type, and is in the following terms:
“APPENDIX 3 - ALTERATIONS TO NOMINAL ORDINARY HOURS OF WORK AND ENGAGEMENT TYPE
(a) Employment under this Agreement may be on an 80 hours per fortnight basis or 72.5 hours per fortnight basis, subject to the following:
(i) Employees may be employed under Alternative Individual Agreements (AIAs) -
(1) Where they choose to remain on a current AIA upon approval of the Enterprise Agreement; or
(2) Where an AIA is subsequently offered by the Employer and accepted by the individual, during the period of the Enterprise Agreement.
(ii) Employees covered by AIAs, may revert to Enterprise Agreement conditions either -
(1) Immediately upon approval of the Enterprise Agreement; or
(2) Given three (3) months’ notice to the Employer during the period of the Enterprise Agreement.
(b) During the period of the Agreement, Day Worker Roster Employees employed on an 80 hours per fortnight basis may change to a 72.5 hour fortnight basis, given three (3) months’ notice to the Employer.
(c) By mutual Agreement with the Employer, Day Worker Roster Employees employed under Agreement conditions and working 72.5 hours per fortnight may change to working 80 hours per fortnight under Agreement conditions.
(d) Shift Supervisors are required to work 40 hours per week in order to fulfil their supervisory duties. There is no provision for shift supervisors to alter their rostered nominal hours of work.
(e) Where an individual chooses to remain on an AIA at the commencement of this Agreement or to accept an offer of an AIA during the period of this Agreement, allowances and conditions, as referred to in this Agreement shall be applicable to those Employees, unless otherwise indicated. Provided that any reference to the “all-up Agreement rate” in this Agreement shall also be read as referring to the “all-up AIA rate” in the case of AIA Employees.”
Evidence and submissions
CS Energy
Mr Dippenaar has been the General Manager of Kogan Creek Power Station since 11 May 2020 after acting in that role from 13 January 2020. Mr Dippenaar was also employed as Maintenance Manager – Callide Power Station from 8 May 2018 to 12 January 2020. Mr Dippenaar’s evidence can be summarised as follows. Mr Dippenaar stated that the Kogan Creek Power Station (Kogan) employs 99 employees pursuant to the 2020 Agreement, including 69 day workers and 30 shift workers working a 72.5-houror 80 hour fortnight as follows:
· Day Workers working across a 9-day fortnight with one RDO per fortnight which changed to a 4-day working week as of 13 June 2021 in accordance with the 4-day working week trial referenced in Appendix 5 of the Current EA; and
· Production Control Officers (PCO)’s working shiftwork across A - E shifts with a roster of 2 days, 2 nights and 6 days off.
Additional hours (Overtime) are worked as directed by CS Energy, however Mr Dippenaar states that it is determinative that clause 4.4.2.3 (a) of the 2020 Agreement requires that “reasonable efforts will be made to ordinarily have three (3) PCOs rostered on a shift”.
Mr Dippenaar also gave evidence about the allocation of overtime. For day workers there is no system to allocate additional hours referenced within the Current EA, and allocation is undertaken by the relevant supervisor based on skill set and/or experience required. Overtime for shift workers is the subject of “the System of Fairness” (SOF), which is the system of allocation of the working of additional hours for PCO’s. Mr Dippenaar states that the SOF is referred to in the 2020 Agreement in clause 4.10(b) which provides as follows:
“It is not the Employer’s intention to require employees to work excessive additional hours. Where additional hours are required to be worked, the system of allocation of the working of these additional hours, operating as at the date of approval of this agreement, will continue. The Employer and the employees will use their best endeavours to avoid the need for working such hours.”
Mr Dippenaar explained that the SOF is controlled and administered by the PCO group. This includes eligibility to participate in the SOF. In recent times, CS Energy has proposed the inclusion of shift supervisors as well as the PTW Coordinator, however, there has been “pushback” from some delegates who reference back to clause 4.10 (b).
The SOF consists of a spreadsheet which includes:
· A tab setting out each PCO’s name and their overtime worked; and
· A tab with a set of rules around how the SOF is to be applied.
Mr Dippenaar stated that CS Energy is required to utilise the SOF for all PCO overtime allocation. The only exception is where there is a requirement for an employee with a specific skill set, in which case the allocation is to those within that skill group. An example is the requirement for an electrical switching officer in the Permit to Work (PTW) office to produce an electrical isolation. However, this is a very limited discretion.
Mr Dippenaar said that additional hours are required:
· If the overtime applies to a Production Control Officer (PCO) this is allocated via the SOF.
· If the overtime is to be applied to a non PCO this is allocated by the relevant supervisor.
The employee who works overtime, then elects to either be paid overtime at the applicable penalty rate or be paid for half of the time at the applicable penalty rate and half of the time at the applicable penalty rate multiplier, credited to the employees MMT balance in hours, as provided in clause 4.10(f) of the 2020 Agreement. If there is an election for half overtime payment and half MMT accrual, this is added to the employee’s MMT balance (MMT accrual) in the Payroll system – referred to on site and by Payroll as SMT by the Payroll system. Mr Dippenaar stated that there is no automated cap within the Payroll system and the employee can exceed the 60 hour accrual cap referred to in clause 4.10(g) of the Current EA.
Mr Dippenaar gave evidence of what he described as “excessive MMT accumulation”. According to Mr Dippenaar, since 2019, there have been two major sources of MMT accumulation: the 2019 planned outage and the Simulator Project during 2019 and 2020. During this period a large amount of MMT was accumulated, without applying any limitations of the 60-hour cap or paying out excess hours as per clause 4.10(g). There have only been two recorded instances that Mr Dippenaar is aware of where MMT has been paid out to the employee.
When Mr Dippenaar commenced in the Acting General Manager role in January 2020, at which time the Enterprise Agreement in place was the Kogan Creek Power Station Enterprise Agreement 2017 (the 2017 Agreement):
· There was no clear framework or process for supervisors and managers (Leaders), to manage MMT, nor was there any consistent practice of the employee attempting to make a plan to take MMT leave once it was accumulated, or a focus from leaders in reminding employees to make a plan to take the leave; and
· As a result, the total MMT accumulated balances for all employees at Kogan Creek in January 2020, not including that accumulated pursuant to clause 4.11 or the 8 hour per month AIA allocation, was 6235 hours. This included 33 individuals who each had a total MMT balance, excluding accrued MMT booked but not yet taken, above the 60-hour cap.
Mr Dippenaar tendered an excel spreadsheet with deidentified employee balances as at January 2020.[16] Mr Dippenaar reviewed the information available to him regarding overtime and staffing, including the Report undertaken by Partners in Performance dated October 2017 (PIP Report), which confirmed that “There is enough staffing capacity, with minor adjustments, to meet operational demands for the next five years if supervisors and operators increase coverage of critical skills”. CS Energy has implemented, or is in the process of implementing, five out of the six recommendations in the PIP Report.
Based on this information, Mr Dippenaar applied a focused effort on reducing the total MMT balances as well as looking for different methods of reducing overtime (thereby reducing the ability to accrue MMT), by various means including; shift swaps and utilising alternative rosters during high peak work periods such as outages. However, it was clear to him that without being able to pay out large balances in order to “reset” the balances, these other tools would only result in a minimal improvement to MMT accrual and not provide a future proof solution.
To the best of Mr Dippenaar’s knowledge and after conferring with Human Resources and Payroll, there has not been a time that CS Energy has taken leave off the MMT balance when it is booked and approved. Leave only comes off the balance when it is taken. Further, CS Energy commenced to put the “available” MMT hours on payslips to assist with understanding what balance was still unallocated. This did not change the accrual. With no application of the 60-hour cap, MMT accumulation has peaked at 635.08 hours for one individual, and above 100 hours for another 20 individuals as of January 2020.
The impacts of these high balances are that an additional burden is placed on the remainder of the team to cover the workload. Further, where minimum shift numbers are required, it results in backfilling employees on MMT leave, which then results in additional MMT being accrued or overtime payments being made. Mr Dippenaar gave as an example, a situation where if a PCO works an additional (overtime) shift and elects to be compensated as per clause 4.10 (f) of the 2020 Agreement, that employee will accumulate an additional 12.5 hours of MMT plus overtime amounting to approximately $1,215. This is equal to one shift, and therefore the cycle may repeat itself when the employee takes the MMT leave. This does not allow other team members to reduce their MMT balances.
Mr Dippenaar’s view is that the impact is an unforeseen consequence of the introduction of clause 4.10(f) and CS Energy’s failure to manage MMT accruals as per the process envisaged in clause 4.10(g). That is, it was not intended nor anticipated that someone could accrue several hundred hours, let alone more than 600 hours of MMT, without it being paid out.
Mr Dippenaar’s evidence was that the current MMT option as per clause 4.10(f) and (g) of the 2020 Agreement, was first introduced as a part of the 2017 Agreement at clauses 4.10(f) and (g). Upon analysis of payroll data over a two-year period during 2018 to 2020, the Payroll team received 89 individual requests to cancel MMT leave booked into the future. Some of these requests were multiple requests from the same individuals. This meant that there was an additional financial burden of a three per cent enterprise agreement increase where MMT was not taken from one year to the next.
Mr Dippenaar stated that it became clear that the 60-hour cap was central to CS Energy’s ability to manage MMT. As a result of the issues with MMT, Mr Dippenaar sought to include a claim in CS Energy’s log of claims in the negotiations for a replacement of the 2017 Agreement. Initially Mr Dippenaar sought to remove all references to MMT other than the 8 hours referenced for AIA employees and to instead pay overtime for any additional hours worked. This was based on:
· Ensuring that there was a simple, easy to manage system in place which compensated employees, with overtime rates, for working additional hours as required by the business;
· The MMT, as well as overall leave accruals at that point in time. The business was caught in a cycle whereby it was difficult to make any reduction in balances due to the requirement of clause 4.4.2.3(a) and the pressure to backfill on each occasion;
· Recognising the importance of work life balance however, also acknowledging that a shift worker spends approximately 1400 hours at work per year (working a roster pattern of 2 days, 2 nights and 6 days off), out of a total 8760 hours.
Mr Dippenaar’s evidence was that CS Energy’s proposal was not accepted by the Single Bargaining Unit (SBU) and the SBU sought to instead increase the MMT cap from 60 hours to 120 hours. According to Mr Dippenaar, this was an acknowledgement by the SBU that there was a role for a cap albeit that there was disagreement on the quantum of that cap. CS Energy then considered any alternative proposal for MMT that would assist with the accrual issue, but also be acceptable to the SBU.
On this basis, Mr Dippenaar stated that CS Energy put an alternative proposal to the SBU which was to implement a “hard cap” within the payroll system so that accruals in excess of 60 hours would be automatically paid as single time. This applied to all methods of accruing MMT including the 8 hours as an AIA employee. The rationale for this alternative proposal was that it:
· Provided a systematic resolution of the issue, by way of the automatic payment once the cap was reached; and
· Lessened the administrative requirement on the supervisor to have to check the balance and have to step in to ensure the accruals were under the cap. It also sought to lessen the administrative burden on the individual employee.
Mr Dippenaar’s evidence was that, as the General Manager, throughout the negotiations he was told on multiple occasions words to the effect that Management could manage within the current clause and that there needed to be better management of the MMT by CS Energy. The SBU declined CS Energy’s alternative proposal on that basis. Mr Dippenaar states the SBU submitted some proposed revised wording on 16 July 2020 for Clause 4.10 Compensation for Additional Hours. The revised wording was as follows:
“4.10 Compensation for Additional Hours
(g) MMT that is accrued as set out in 4.10(f)(ii), will be capped at 60 hours. Where an individual’s accumulated MMT exceeds 60 hours the employee’s supervisor is to notify the employee, and the employee must make a plan with their Supervisor to take the MMT balance in excess of the 60 hour cap within 28 days of being notified. Where this does not occur the employer will pay out the MMT balance in excess of 60 hour cap at single time.”
CS Energy declined the revised wording because it shifted the accountability onto the Supervisor, whereby the existing clause required the individual with the balance to make the plan to take the MMT and on the basis that it did not address the fundamental issue which was that there needed to be the ability to pay the excessive balance out without the ongoing back and forth of the plan, which based on past practice could be cancelled at any time and for any reason. At the point Mr Dippenaar made his statement, balances totalled 4,906.83 hours for 105 employees. Mr Dippenaar’s evidence was that CS Energy’s proposed amendment to MMT was not successfully negotiated and as such did not form part of the 2020 Agreement. As such, the issue of MMT continues to be a significant issue for Management post the negotiations.
Mr Dippenaar stated that he has taken to heart what the SBU said during the negotiations around managing MMT within the current clause and as a result, he is seeking to more actively manage it within the provisions of clause 4.10 (f) and 4.10 (g), so as to attempt to control the accruals. However, this requires a focus on a more consistent and structured approach to the current MMT clause which involves the employee taking the initiative to make a plan once the accrual reaches 60 hours; and where this does not occur, the balance above 60 hours being paid out at single time.
Mr Dippenaar explained that currently there are only two ways to reduce the MMT once accumulated: the employee either takes the MMT or it is paid out. Until either has eventuated, the total accumulated MMT as owed by the company to the employee remains as an accrual, as hours accumulated but not taken or paid. Mr Dippenaar also explained that employees are able to book leave into the future, and the hours of leave are not deducted from the employee’s balance until the leave is taken. Employee Self Service (ESS), which employees use to book leave, shows future booked leave and available leave balances.
On the employee’s payslip, it provides available leave balances and indicates if an employee has future leave booked by a footnote. This is to ensure that the employee is aware of how many hours of leave they have available to book, should they wish to book further leave at that point in time. Mr Dippenaar stated that MMT is treated no differently to any other type of leave at CS Energy, in that the hours of leave are not removed from the employee’s leave balance until the leave is actually taken or paid out. Future booked leave is indicated in ESS.
Upon booking the future leave, the hours are not removed from the employee’s balance. While the hours are shown as future leave in ESS and are not included on the “available” balance, those hours still form part of the employee’s accumulated accrual. The intent of the wording “available” balance is only to show the total balance that is not booked at that point. This is reinforced by the fact that where employees have booked future leave and then cancelled it, the hours remain in the employee’s accumulated balance for subsequent use.
Mr Dippenaar stated the initial approach in preventing the accumulation of excessive MMT balances was to apply the hard 60-hour cap within the payroll system, whereby the employee could not physically accumulate more than 60 hours of MMT. Subsequently, CS Energy moved to an alternative position of managing the accumulation of MMT in accordance with clause 4.10 (g). The alternative position is that once the employee’s MMT balance reaches 60 hours, the employee is required to make a plan to take the hours in excess of 60 within a defined period, and if this is not done, the excess hours are paid out to the employee at single time. The 60-hour cap is based on the accumulated balance and includes future booked leave as this is not removed from the accumulated balance until the employee takes the leave or it is paid out.
In his evidence in reply, Mr Dippenaar stated that he has reviewed CS Energy’s records and ascertained that a summary of the terms and conditions relating to the proposed 2017 Agreement was provided by CS Energy to all employees at the Kogan site via email on 13 October 2017, prior to eligible employees voting on the 2017 Agreement. This summary specifically sought to clarify, with respect to MMT, that where the 60 hour cap is reached employees have two options being to take the MMT balance; or to have that excess paid to them at single time. The two options are detailed on page 5 of the Summary, as follows:
“Clause 4.10 Compensation for Additional Hours. New provisions regarding an employee’s ability to agree to receive their overtime entitlements in the form of half Mutually Managed Time (MMT) accrual and half payment have been included. Total compensation will be calculated at the applicable penalty rate. MMT accrued under this agreement is capped at 60 hours. If the 60 hour cap is reached employees will have the option to take the MMT balance in excess of the 60 hours or have it paid out at single time.”
Mr Dippenaar also gave further evidence on the five (out of six) Recommendations provided by the PIP Report that CS Energy is in the process of implementing, as follows:
· “Make all shifts 5 operators” where adding 2 operators to make all shift rotations equal with 5 operators will allow for greater flexibility in planned leave and reduce overtime. Mr Dippenaar advised this was undertaken based on the PIP recommendation. However, due to natural attrition and the recent Permit to Work (PTW) trial being undertaken, this is no longer the preferred method of manning at present. He further advised that there are now two people on shift in the week performing PTW duties. This is something that the Production Control Operators (PCO’s) previously had to do resulting in less work for the PCO’s.
· “Train supervisors as operators”, where it is expected that training supervisors in operations will create flex capacity for unplanned activities, such as leave and outages. Mr Dippenaar advised that this commenced with all of the supervisors currently gaining competency in Station plant.
· “Improve PTW efficiency” where it is expected will free capacity for overhaul planning and projects. Mr Dippenaar advised that the PTW trial has concluded and was deemed a success. This has been operating for the past year and is in the process of being embedded as normal operational methodology, that is, permanently implemented.
· “Spread existing skills across crews” as addressing skill gaps need to be the priority to mitigating LOA risks over the next 5 years. Mr Dippenaar advised that the Simulator was completed and in use and training manuals are being updated. Further, Management have moved a PCO from one shift to another to balance skills with further movements under consideration.
· “Trainees” where the recommendation stated that “yearly intake of 2-3 trainees will be critical in succession planning, given retirement and attrition risks – can be sourced through maintenance or external.” Mr Dippenaar confirmed this has been undertaken.
· “Operator training” where the upskilling teams will remove key person reliance which would reduce operational risks and flexibility for operator leave. Mr Dippenaar advised that the Simulator is in place and in use. The PTW Leads are now allocated to the PTW office delineating some duties allowing more focussed attention.
In response to Mr Gleeson’s evidence about the MMT “bucket”, Mr Dippenaar said that he had checked CS Energy’s records and made enquiries and to the best of his knowledge there is no “bucket” as described by Mr Gleeson in his evidence. Employees are able to book leave into the future, and the hours of leave are not deducted from the employee’s balance until the leave is taken. Further, the employee’s payslip provides available leave balances and indicates if an employee has future leave booked by a footnote. This is to ensure that the employee is aware of how many hours of leave they have available to book, should they wish to book further leave at that point in time.
Under cross-examination, Mr Dippenaar was shown the printout he had tendered showing employees’ MMT balances. Mr Dippenaar agreed that the spreadsheet has three columns labelled “SMT balance today”; “SMT less future” and “Future SMT”. In response to the proposition that the spreadsheet indicates that the amount of future SMT booked but not taken, is deducted from the employee’s balance, and split off into a separate amount, Mr Dippenaar maintained that the first column showing the total including the future SMT is the actual balance. Mr Dippenaar described this as an “accounting measure to show what leave can be booked in the future and what leave has been booked in the future” and “the SMT balance in the first column remains the balance.”[17]
Mr Dippenaar was also shown a document later tendered by Mr Gleeson, which had been prepared by Mr Allan McGraw, a former payroll officer with CS Energy. Mr Dippenaar agreed that Mr McGraw referred to the SMT and reporting as a “bucket”. Mr Dippenaar accepted that it is not unreasonable for employees to refer to MMT as a “bucket”.[18] Mr Dippenaar was cross-examined about an example of a payslip he tendered and agreed that the SMT balance shown on the pay slip is the balance of SMT less future leave that has been booked and approved.[19] Mr Dippenaar was also cross-examined about an email dated 8 January 2019, tendered by Mr Gleeson, sent by former Kogan Creek HR Business Partner Ms Taylor, to Mr Christensen, who was Mr Gleeson’s supervisor at that time. Mr Dippenaar said that this was Ms Taylor’s view about how clause 4.10(g) operates and he could not explain why the email highlighted the amount of leave that needed to be addressed as being SMT less future leave for both Mr Gleeson and another employee referred to in the email.[20] Mr Dippenaar also maintained an employee with a balance of 42.5 hours of SMT less future leave taken, and 60.4 hours of future leave booked, who was not identified by Ms Taylor as being over the 60 hour limit, was over that limit according.[21]
Mr Dippenaar agreed that attempts by CS Energy to renegotiate MMT provisions in the 2020 Agreement were not successful and that if the claim had been successful employees would not have had the ability to utilise overtime in that manner. Mr Dippenaar also agreed that the 2017 Agreement provisions were rolled over and did not change. In relation to his statement that MMT continued to be a significant issue for management, Mr Dippenaar said that after the 2017 Agreement there was no consistent way of saying what happens when an employee has a balance that exceeds 60 hours, and that the clause simply states that employees should go their supervisors. This was something that had not ever been managed.[22] In response to Mr Gleeson’s evidence that employees had accrued amounts of MMT because of specific events including a project, rather than day to day operations or management issues, Mr Dippenaar said that the matters highlighted in his evidence were not the only contributing factors. Mr Dippenaar had the following exchange with Mr Newman in cross-examination:
“What I’m suggesting to you is that your evidence was that the reason all these balances are so high is that you didn’t have managerial control. That was your evidence. I’m suggesting to you that’s not true. It has nothing to do with managerial control. I’m suggesting to you that the reason for the high balances were specific issues that a few employees have dealt with in terms of an overhaul and in terms of the PCO project. Those are the specific reasons why and it had nothing to do with managerial control; you agree with me? ‑ ‑ ‑ No, I do not, because we’ve got a three people minimum clause in the EA and then we’ve got the system of fairness, and the managerial control is extremely limited around those two factors.
So, that’s the reason, isn’t it just? That’s the reason. You want control over who gets the overtime, don’t you just? You still want control over who gets the overtime, don’t you? ‑ ‑ ‑ No, I don’t necessarily. The system of fairness is built into the EA, as well as the three people minimum. That’s part of our EA.”[23]
Mr Dippenaar agreed that there had been a reduction in numbers of employees with MMT balances over the cap and that at the time he gave his evidence there were 11 employees with such balances including one employee with a balance of 300 hours. In response to a question as to what he had done about that person, Mr Dippenaar said: “Well nothing yet, I don’t think. As I said, there’s no clear framework for managing it, which is what we’re trying to achieve.” In response to a question as to whether anyone had a conversation with the employee about taking the leave, Mr Dippenaar said he did not know.[24] Mr Dippenaar agreed that when the 2017 Agreement was made, Mr Phil Mather was in his role as Manager, and is still employed by CS Energy. Mr Dippenaar said he had confirmed his interpretation of the 2017 and 2020 Agreements with Mr Mather but could not explain why Mr Mather was not giving evidence in these proceedings. Mr Dippenaar also said that he had not spoken to Ms Taylor about her understanding of how MMT operate and the email sent by Ms Taylor to Mr Christensen which was tendered by Mr Gleeson.
CS Energy submitted that insofar as the accumulation of MMT is concerned, that Clause 4.10(g) has a plain meaning and is not ambiguous or susceptible of more than one meaning. It The Clause provides that MMT that is accrued “will be capped at 60 hours” and according to the Oxford English Dictionary the verb “capped” means: “to limit the amount of money that can be charged for something or spent on something” or to “place a limit or restriction on (prices, expenditure or other activity)”.
CS Energy submitted that but for the rest of Clause 4.10(g), any MMT accrued as per Clause 4.10(f)(ii) would be capped – ie. limited or restricted – at 60 hours. However, the remainder of Clause 4.10(g) envisages a situation where the accumulated MMT exceeds the 60 hour cap and in this situation an employee must make a plan with their supervisor to take the MMT balance in excess of the 60 hour cap. The phrase used in Clause 4.10(g) is “accumulated MMT”. CS Energy submitted that according to the Oxford English Dictionary the word “accumulate” means: “gather together or acquire an increasing number or quantity of” or “gradually gather or acquire (a resulting whole)”
CS Energy contended that all MMT accrued by an employee under Clause 4.10(f)(ii) goes to make up an employee’s accumulated MMT or the “resulting whole” amount of MMT. Where accumulated MMT exceeds 60 hours then the employee is obligated to make a plan with their supervisor to take the MMT balance that is in excess of the 60 hour cap.
It was further contended by CS Energy that there is nothing in the wording of Clause 4.10(g) that would support the interpretation that the CFMMEU seeks to attribute to the Clause, namely that an individual’s accumulated MMT excludes MMT leave booked into the future but not yet taken. Furthermore, CS Energy highlighted that quite clearly an employee’s accumulated MMT can only be reduced if the employee takes the leave such that the leave is no longer capable of being taken or if the employee is paid out the leave as envisaged in Clause 4.10(g).
Accordingly, CS Energy submitted that as the clause in dispute has a plain meaning, no evidence of the surrounding circumstances should be admitted to contradict the plain language of the agreement. CS Energy also submitted that a consideration of the ordinary meaning of the relevant words of Clause 4.10(g) supports its assertion that in determining whether an individual’s accumulated MMT exceeds 60 hours, CS Energy is entitled to include MMT leave booked in the future but not yet taken.
The evidence of Mr Dippenaar establishes that employees have previously booked MMT leave into the future, then cancelled the leave and rebooked the leave going forward. This demonstrates that the accumulated MMT was not diminished by the action of booking the leave but is diminished once the leave has been taken, because leave that is cancelled and rebooked is still available to be taken. In contrast, leave that is taken (or paid out) can never be accessed again. Accordingly, until such time as that balance in excess of the 60 hour cap is taken (or paid out), the employee’s accumulated MMT incorporates the future leave booked but not yet taken.
In relation to principles 2 and 3 in Berri, CS Energy submits that the objective intention of the parties was:
· to place a notional cap of 60 hours on MMT that is accrued as per clause 4.10(f)(ii);
· where an individual’s accumulated MMT exceeds the 60 hour cap the employee must make a plan with a supervisor to take the MMT balance in excess of the 60 hour cap;
· where a plan is not made or the MMT is not taken the MMT balance in excess of the 60 hour cap can be paid out by the employer at single time.
CS Energy submitted that a reasonable person would not understand that in determining whether an individual’s accumulated MMT exceeds the 60 hour cap, that MMT leave booked into the future but not yet taken, is excluded. Such an interpretation was never within the contemplation of any of the parties at the time and there are no words in the clause that seek to qualify the term “an individual’s accumulated MMT”, so that future leave is excluded from the accumulated total of MMT.
In relation to principle 4 in Berri the Agreement does intend to establish binding obligations on the parties and in this regard, there is nothing in the disputed clause 4.10(g) that indicates that CS Energy is obligated to exclude MMT leave booked into the future but not yet taken from an individual’s accumulated MMT.
Relevant to principle 15, the evidence of Mr Dippenaar establishes that CS Energy has failed to apply Clause 4.10(g) in accordance with the provisions of the clause and in effect failed to manage the accumulation of MMT. In this regard:
· No cap was applied and employees exceeded the 60 hour accrual cap at will.
· Supervisors and managers did not manage the accrual of MMT and nor did they remind the employees to make a plan to take MMT in excess of the 60 hour cap.
· Employees for their part, did not attempt to make a plan with their supervisor to take MMT when it exceeded the 60 hour cap.
· Excessive MMT accumulations (in excess of 100 hours) occurred with at least 20 employees.
CS Energy concedes that the intended application of Clause 4.10(g) is without doubt different to that of its post agreement conduct. However, CS Energy submits that failure to appropriately manage MMT as per clause 4.10(g) does not prohibit the Company from rectifying the situation, which is akin to “inadvertence”. There certainly was no common understanding or meeting of the minds to apply the clause in the manner that CS Energy did, and accordingly, it should not be prevented from applying the clause in accordance with its clear grammatical meaning.
Mr Dippenaar’s evidence does not seek to contradict the plain language of the Agreement, but appropriately, in an open and transparent manner, details CS Energy’s concerns with the accumulation of MMT and the steps CS Energy has taken to attempt to resolve those concerns. Further, Mr Dippenaar’s evidence provides an insight into how employees may regard their accumulated MMT as not including MMT leave booked into the future but not yet taken.
CS Energy submitted that this has to do with the fact that employee payslips show an SMT (MMT for purposes of Clause 4.10(g)) balance that excludes or is adjusted by future approved leave requests. This is to ensure that an employee is aware of how many hours of leave they have yet to book should they wish to book further leave at that time. However, the total of accumulated MMT is not reduced until such time as future leave is taken or paid out.
Further, CS Energy submitted that employees are aware via ESS of what their future SMT approved leave is and what their SMT available balance is and have visibility of their total accumulated MMT by simply adding the future approved leave to the available leave. It is this accumulated MMT figure that should be used to determine whether an individual’s accumulated MMT exceeds 60 hours for the purposes of Clause 4.10(g).
In reply submissions, CS Energy confirmed that it does not attempt to argue there is some ambiguity in the disputed clause. In addition, CS Energy submits that the CFMMEU agrees CFMMEU that once an item has been used it can no longer be considered to be “accumulated”. CS Energy, however, rejects the proposition that by booking MMT leave in advance, the MMT leave is used and contends that the leave can only be used if it is taken or is paid out. But for either of these events occurring, CS Energy argued that the MMT leave remains as part of the employee’s accumulated MMT, to be used or paid out later… CS Energy submitted that this is reinforced by undertaking 2, that was given in relation to the approval of the 2017 Enterprise Agreement, namely:
“2. Where an employee has accrued Mutually Managed Time (“MMT”) in accordance with the Agreement, any accrued and unused MMT will be paid out upon termination of employment at the rate of single time.”
Rather, the decision to roll-over an agreement containing a provision about which there was no common ground, was a risk for each party, that one or other of the competing positions they now advance would not be confirmed in any proceedings before the Commission under the Grievance and Dispute Resolution Procedure in the Agreement.
At the point the dispute arose, CS Energy had informed employees that it intended to put in place a hard cap, so that as soon as an employee’s accumulated MMT (comprising accrued MMT and MMT approved to be taken) exceeded 60 hours, all additional hours would simply be paid for at overtime rates. This proposal is not consistent with the way in which MMT operates and the entitlement of employees to take it as leave.
To construe the clause to allow this to occur, would result in CS Energy having the ability to override the rights of employees under the agreement to nominate an option for the payment of overtime. The right for employees to nominate one of two options for payment of overtime is consistent with other provisions of clause 4.10 under which employees have agreed to work reasonable additional hours and CS Energy has stated its intention not to require employees to work excessive additional hours. The 2020 Agreement also provides at 4.11 that an employee may request to exchange time worked outside of the employee’s normal attendance for an equal amount of time off, at a mutually agreed time. Such time is also referred to as MMT. Conversely, to exclude MMT leave booked into the future from accumulated MMT for the purposes of the 60 hour cap, would render the cap of no effect.
As I understand its evidence and submissions, CS Energy has now departed from its initial position of imposing a hard cap and now proposes to implement the provisions of clause 4.10(g) by requiring that a plan to take accumulated MMT in excess of 60 hours is made by an employee with a supervisor within a specified period of time. Details of exactly what is proposed have not been provided. However, my provisional view is that, depending on the details of the proposal, it is not inconsistent with clause 4.10(g) to impose such a time limit, provided it is reasonable.
I also note that CS Energy concedes that MMT has not been properly managed and that the CFMMEU and its members have indicated to the Company that the provisions of the 2020 Agreement give CS Energy the ability to manage MMT in a way that addresses the concerns it raises in these proceedings. In my view, the position of the CFMMEU and its members on this point is correct. There is no reason why CS Energy cannot pay out MMT when an employee cancels a plan to take it as leave. A pay out of MMT in those circumstances would also be reasonable.
Conclusion
For the reasons set out above, and subject to the views expressed, I have determined that for the purposes of clause 10(g) of the Kogan Creek Power Station Enterprise Agreement 2020, in determining whether an individual’s accumulated MMT exceeds 60 hours, MMT leave booked into the future but not yet taken is included.
DEPUTY PRESIDENT
Appearances:
Mr M Rodgers of Mapien for the Applicant.
Mr C Newman for the CFMMEU.
Mr J Young for the CEPU.
Mr T Whibley for Professionals Australia.
Hearing details:
24 August.
2021.
By video using Microsoft Teams.
[1] Exhibit A1 – Witness Statement of Jacques Dippenaar; Exhibit A2 – Witness Statement in Reply of Jacques Dippenaar.
[2] Exhibit R1 – Witness Statement of Michael Gleeson.
[3] [2017] FWCFB 3005 at [14].
[4] [2017] FWCFB 4487.
[5] [2014] NSWCA 184 at [71] – [85].
[6] Manufacturers’ Mutual Insurance Ltd v Withers (1988) 5 ANZ Ins Cas 60-853 at 75-343.
[7] Kirin-Amgen Inc v Hoechst Marion Roussel Ltd [2004] UKPC 6; [2005] 1 All ER 667 at [64].
[8] Project Blue Sky v Australian Broadcasting Authority [1998] HCA 28; 194 CLR 355 at [78].
[9] Charter Reinsurance Co Ltd v Fagan [1997] AC 313 at 391 per Lord Hoffman, approved in Campbell v R [2008] NSWCCA 214; 73 NSWLR 272 at [48] (Spiegelman CJ, Weinberg AJA and Simpson J agreeing)
[10] Franklins Pty Ltd v Metcash Trading Ltd [2009] NSWCA 407; 76 NSWLR 603 at [17] cited in Mainteck Services Pty Ltd v Stein Heurtey SA (2014) 310 ALR at [71] – [85].
[11] Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52; 219 CLR 165 at [40].
[12] [2006] FCA 11.
[13] Ibid at [44].
[14] Ibid at [46]
[15] [2006] FCA 616.
[16] Exhibit R1 Annexure “JD2”.
[17] Transcript PN59 – 66.
[18] Transcript PN75, 80 – 82.
[19] Exhibit A1 Annexure “JD11”; Transcript PN86 – 89.
[20] Exhibit R1 Annexure “MG2”; Transcript PN104 – 111.
[21] Transcript PN110.
[22] Transcript PN127.
[23] Transcript PN140 – 141.
[24] Transcript PN145 – 147.
[25] [2020] FWC 471
[26] Exhibit R1 Annexure “MG1”.
[27] Exhibit R1 Annexure “MG2”.
[28] Exhibit R2.
[29] Transcript PN299.
[30] Transcript PN300.
[31] Transcript PN332 – 336.
[32] Transcript PN361 – 363.
[33] Transcript PN431 – 435.
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