Laing O'Rourke Australia Construction Pty Ltd T/A Laing O'Rourke v Construction, Forestry, Mining and Energy Union

[2017] FWC 4050

[2017] FWC 4050

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.739—Dispute resolution

Laing O’Rourke Australia Construction Pty Ltd T/A Laing O’Rourke
v
Construction, Forestry, Mining and Energy Union
(C2017/3048)

(C2017/3049)

DEPUTY PRESIDENT DEAN SYDNEY, 28 AUGUST 2017

Applications to deal with a dispute.

[1] On 7 June 2017 Laing O’Rourke Australia Construction Pty Ltd (LORAC) filed two applications pursuant to s.739 of the Fair Work Act 2009 (the Act) for the Fair Work Commission to deal with a dispute arising in relation to the Laing O'Rourke Australia Construction Pty Ltd - Building (ACT) Enterprise Agreement 2016 – 2020 1(the ACT Agreement) and the Laing O'Rourke Australia Construction Pty Ltd - Building (NSW) Enterprise Agreement 2015 – 20182 (the NSW Agreement) (together referred to as the Agreements).

[2] The applications were the subject of a conciliation conference before me on 19 June 2017. The Commission issued a recommendation in relation to the resolution of the disputes on 22 June 2017.

[3] The disputes were not resolved by way of conciliation and the two applications were heard together on 2 August 2017, as the issues arising in each application were identical albeit the relief sought differed.

[4] LORAC was represented, with permission, by Mr GJ Hatcher SC. The CFMEU was represented by Mr M Aird, Legal Officer of the Construction, Forestry, Mining and Energy Union (CFMEU).

Issues for determination

[5] The disputes arise in relation to the operation of paragraph 3 of clause 1.5 of the Agreements, which are identical and in the following terms:

“The Parties will ensure that this Agreement, in its terms, implementation or operation, is compliant with relevant Federal and State codes of practice and guidelines for the building and construction industry. Should this Agreement at any time, be found to be or deemed to be non-Code and Guidelines compliant, in its terms, implementation or operation, the Parties commit to amending the Agreement as required to ensure compliance.”

[6] LORAC sought a determination that, consistent with the commitment reflected in clause 1.5, the Agreements be implemented and/or operate in a manner that ensured compliance with the relevant code. LORAC submitted that the relevant code is the Federal Governments Code for the Tendering and Performance of Building Work 2016 (the 2016 Code).

[7] LORAC submitted that the primary apparent purpose of the 2016 Code is ‘to ensure flexibility is available to an employer to meet the needs of the project or work upon which workers are engaged. Accordingly, provisions within the Agreements which dictate fixed working hours or rosters are non-compliant with the 2016 Code’ 3.

[8] In support of the Commission making the determinations sought, LORAC argued that 4:

“[27] Most of the relevant clauses imposing such restrictions in each Agreement have, within them, an internal process for flexibility by agreement with the employees and/or the CFMEU. To the extent that a particular clause does not have such a facility, the workplace flexibility clause (clause 1.7) and/or the model flexibility term is permissive of such agreements with employees being arrived at.

[28] In LORAC’s submission, the effect of clause 1.5 on such provisions, is that the agreement contained within clause 1.5 to achieve 2016 Code compliance must be imputed into the operative provision, such that the relevant clause might be implemented by the employer setting such hours and rosters in accordance with the needs of the project and the employees and the CFMEU are taken to have agreed to the departure from the primary position prescribed by the Agreements.”

[9] The CFMEU objected to the Commission dealing with the applications on the basis that there was no jurisdiction to do so.

[10] I decided that the most efficient way of dealing with the applications was to hear the jurisdictional objections and the substantive applications at the same time.

[11] In determining these applications, I have had consideration to the principles applicable to the construction of an enterprise agreement which were canvassed in detail by a Full Bench of the Commission in AMWU v Berri Pty Ltd 5(Berri) and which are set out later in this decision.

[12] While I may not have specifically dealt with all of the evidence and submissions made by the parties, I have had regard to all of the matters before the Commission in determining these applications. In summary, and for the reasons set out below, I find that:

a. there is jurisdiction for the Commission to deal with the disputes, and

b. the Commission cannot grant the relief sought by LORAC.

Background

[13] Clause 1.2 of the Agreements sets out the parties and persons bound by the Agreement as LORAC, employees of LORAC engaged in the classifications contained within the Agreement within its respective NSW/ACT Building Groups, and the CFMEU.

[14] The CFMEU is covered by the Agreements.

[15] LORAC is a ‘code covered entity’ under the 2016 Code. Section 11 of the 2016 Code provides that a code covered entity must not be covered by an enterprise agreement in respect of defined ‘building work’ which contains content that is proscribed.

[16] A ‘code covered entity’ may be excluded from eligibility to be awarded contracts on Federally funded building work if it is not compliant with the 2016 Code 6.

[17] A significant proportion of LORAC’s work is federally funded building work.

[18] In May 2017, the Australian Building and Construction Commission (ABCC), on request from LORAC, provided advice as to the clauses the ABCC deemed to be non-compliant with the 2016 Code.

[19] LORAC wrote to the CFMEU and proposed variations to the Agreements to ensure the Agreements were compliant with the 2016 Code.

[20] Representatives of LORAC and the CFMEU NSW Branch met on 24 May 2017 to discuss the variations proposed by LORAC. The unchallenged evidence of Mr Olsson was that in this meeting, the CFMEU representative stated that the CFMEU was not prepared to renegotiate the Agreements because its Executive had made a decision to not do so. A similar discussion was held with representatives of the CFMEU ACT Branch.

[21] Further correspondence was sent by LORAC to the CFMEU NSW after the meeting, inviting the CFMEU to consent to the implementation and/or operation of the non-compliant clauses in a way proposed by LORAC in a schedule to the correspondence. Again, similar correspondence was sent to representatives of the CFMEU ACT.

[22] LORAC held meetings with employees covered by the Agreements on various dates to discuss with them the non-compliant clauses and the need to act on the obligation under clause 1.5 of the Agreements. Mr Olsson’s evidence was that the feedback LORAC received from employees was that Employees had to follow the advice of the CFMEU, and that advice was to not vote in favour of any variation.

[23] On 20 June 2017, LORAC’s solicitors wrote to the CFMEU to propose a way to resolve the disputes. Mr Olsson’s evidence was that as at the date of making his statement, the CFMEU had not responded to this offer.

[24] On 28 June 2017, the ABCC provided LORAC with its final advices in relation to code compliance of the Agreements. Copies of these advices were provided to the CFMEU’s ACT and NSW branches by email on 30 June 2017.

Evidence

[25] LORAC, in support of its applications, filed witness statements made by Mr Lindsay Olsson, Employee and Industrial Relations Manager for LORAC and Mr Richard Scott, Head of Estimating and Cost Planning for LORAC. The statement of Mr Scott was the subject of a confidentiality order made by the Commission on 6 July 2017. 7

[26] The CFMEU did not file any evidence in the proceedings, and by email of 1 August 2017, confirmed that it did not require Mr Olsson or Mr Scott for cross-examination. However it had a number of evidentiary objections to those statements, which were dealt with at the commencement of the hearing.

[27] The CFMEU objected to the entirety of Mr Scott’s confidential statement on the basis that it did not contain information that was relevant to the dispute and could not assist the Commission in considering whether to make a determination. The CFMEU made concessions recognising that LORAC needed to have agreements that are ‘code compliant’ in order to access future federal government work post 1 September 2017, and that a substantial part of LORAC’s work is federally funded work 8. As a result of those concessions, LORAC did not press the admission of Mr Scott’s statement and did not press paragraphs 19 to 21 of Mr Olsson’s statement.

[28] The CFMEU did not dispute that the Agreements are not compliant with the 2016 Code.

Principles for construing an enterprise agreement

[29] Before turning to the jurisdictional objections of the CFMEU, I will briefly outline the principles relevant to the task of construing an enterprise agreement, which were recently summarised in Berri 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 aide 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 and 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.” 9

[30] It is clear from these principles that I must start by considering the ordinary meaning of the words used, having regard to the context and evident purpose of the provision or expression being construed.

[31] Extrinsic material going to context or surrounding circumstances may be used to aid the resolution of an ambiguity. If the words used in the agreements have a plain meaning, and there is no ambiguity, then evidence of surrounding circumstances will not be admitted to disregard, re-write or contradict the plain language of the agreement to give effect to an externally derived conception of that which was the parties’ intention or purpose 10.

[32] In interpreting the Agreements in the context of a dispute under s.739, I cannot reverse the effect of a clause or rewrite its terms. I cannot construe an enterprise agreement in a way that is inconsistent with the plain meaning of the relevant words. My task is to interpret the Agreement produced by the parties, and this does not involve rewriting the Agreement to achieve what might be regarded as a fair or just outcome.

Jurisdictional Objections by the CFMEU

[33] The CFMEU objected to the Commission dealing with the applications, arguing that there was no jurisdiction to do so. The three grounds for this objection were set out in its written submissions filed on 17 July 2017 as follows:

“a. The Applicant has not complied with the dispute resolution procedure at clause 7.5 of the agreement; and

b. The Respondent (sic) has failed to properly characterise the “dispute” and;

c. The Fair Work Commission does not have the power to make the determination requested in the application.”

[34] The CFMEU filed additional submissions the evening before the hearing, raising a fourth jurisdictional objection. The basis for the fourth objection was twofold. First, clause 1.5 was an invalid clause in that it purported to require the parties to vary the Agreements to the extent necessary to make the Agreements code compliant. Second, clause 1.5 was also an objectionable term in that it had the effect of requiring or purporting to require, or had the effect of requiring, a contravention of s.340 of the Act, by purporting to impel employees to exercise their workplace right to vary the Agreements in a particular way on pain of civil penalty.

[35] At the commencement of the hearing, the CFMEU raised a fifth jurisdictional objection. The fifth jurisdictional objection was that ‘Building Code’ was defined in clause 1.4(g)(e) of the Agreements as ‘the Federal Governments Building Industry Code 2013 as amended’, however the 2016 Code did not amend this 2013 Building Code, and therefore the 2016 Code was not contemplated by clause 1.5 of the Agreements.

[36] I will deal with each of the CFMEU’s jurisdictional objections, however I will deal with the third objection, that being whether the Commission has the power to make the determination sought by LORAC, last, as my consideration of this objection effectively determines the substantive application.

Objection 1 - Has LORAC complied with the dispute resolution procedure (clause 7.5) of the Agreements?

[37] The relevant provisions of the dispute resolution procedure in the Agreements are as follows:

7.5 Industrial Relations Disputes Procedure

Any industrial relations dispute arising in the workplace and/or project including, but not limited to the matter arising out of this Agreement or the National Employment Standards (NES) shall be dealt with in the following manner:

a) The Employee or Employees concerned shall raise the matter with their relevant Supervisor for resolution.

b) If not resolved, the Employee or Employees will raise the matter with the Site Manager or if required more senior levels of management as appropriate. Each Employee has the right to determine whether they wish to be represented by a Union Delegate, Employee Representative, another representative of their choosing or not at all.

c) If a dispute is unable to be resolved at the workplace and/or project, and all agreed steps for resolving it have been taken, the matter may be referred by either Party to Fair Work Commission (FWC) for mediation and/or conciliation and where the matter in dispute remains unresolved the dispute may proceed to arbitration. If arbitration is necessary Fair Work Commission may exercise procedural powers in relation to hearings, witnesses, evidence and submissions which are necessary to make the arbitration effective. Any decision by Fair Work Australia shall not be inconsistent with the Building Code 2013 (as amended) and the Australian Government Implementation Guidelines (as amended).

d) Notwithstanding subclause c) above, either Party may exercise a right of appeal against any decision by FWC to a Full Bench.

……

[38] The CFMEU argued that LORAC had not fully complied with the dispute resolution procedure because, unlike the Model Dispute Resolution Clause, clause 7.5 of the Agreements appeared to require an Employee to raise the dispute 11. It argued that LORAC was required to satisfy paragraphs a) and b) of clause 7.5 and had not done so. To this extent, it made the following submissions during the course of the hearing:

“The steps with (a) and (b) are a requirement.  We would concede only that there may be, in particular, factual circumstances, some appropriate analysis about how the dispute procedure should be applied.  But it doesn't give you the opportunity to not invoke, it doesn't give you the opportunity to not make it clear that employees are in dispute with you and simply follow a dispute at 7.5(c), being no employees being aware - no evidence that there's any employees being aware that they have a dispute with Laing O'Rourke.  We've said in our submissions that the evidence only conveys a dispute with the CFMEU.” 12

[39] In this regard the CFMEU submitted that a matter can only be referred to the Commission if all of the prerequisite discussions have occurred.

[40] LORAC contended that the requirements of clause 7.5 had been met and that the dispute was properly before the Commission. It submitted that, based on the evidence of Mr Olsson, an industrial relations dispute existed under clause 7.5 of each of the Agreements, and that its evidence demonstrated that the disputes had not been resolved in its discussions with relevant employees at the workplace. It argued that paragraph (c) of clause 7.5 was one of the steps available for the resolution of ‘any industrial dispute’ that arose in the workplace. It further argued that section 186(6)(a) of the Act requires the Commission to be satisfied that an enterprise agreement includes a term that provides a procedure to settle disputes about matters arising under the agreement. To have been approved, it argued, the Commission must have been satisfied that clause 7.5 of the Agreements are procedures that require the Commission to resolve disputes about any matters arising under the Agreements, whether raised by the employees or employer.

[41] During the course of the hearing I put to the CFMEU’s legal representative the proposition that clause 7.5 should be read as follows 13: if an employee or employees are raising a dispute they commence with step (a) and if the employer is raising a dispute it starts at the step in the dispute procedure as it applies to them, being step (c). The CFMEU submitted that this approach was incorrect because the precedent steps were required to be followed by the employer.

[42] There is no doubt that there is a requirement for parties to comply with the steps of a dispute resolution procedure, and that the Commission may only deal with the dispute after the steps in the procedure have been complied with 14. However, to comply with a step in a procedure there must be an obligation on that party to do something. A party cannot be said to have refused, failed to follow, or bypassed a step where that step does not require that party to do anything.

[43] In my view, a proper construction of the Agreements does not require LORAC to comply with steps (a) and (b). This is not envisaged by the words of the clause. It is not unusual that parties may have different obligations under a dispute resolution procedure. In this case, steps (a) and (b) are steps that relate to actions required to be taken by the Employee or Employees, not LORAC. To read the clause any other way would be nonsensical. I find that the words are clear on their face and not ambiguous, and do not require LORAC to take any particular action.

[44] The dispute resolution procedure is clearly intended to deal with ‘any industrial relations dispute arising in the workplace and/or Project including but not limited to the matter arising out of this Agreement …’. I consider a dispute in relation to the operation of paragraph 3 of clause 1.5 of the Agreements to be a dispute contemplated by clause 7.5.

[45] Further, it appears to me that the dispute resolution procedure is a valid procedure for the purposes of s.186(6) of the Act, in that clause 7.5 of the Agreements is a procedure that requires or allows the Commission to resolve disputes about any matters arising under the Agreements, whether raised by employees or LORAC. In my view, this is not affected by the parties having different or no obligations under particular steps of clause 7.5.

[46] I am satisfied that LORAC has satisfied the steps necessary to refer a dispute to the Commission for determination.

Objection 2 - Has LORAC properly characterised the dispute?

[47] The CFMEU argued that while LORAC made references to disputes in it submissions, it had failed to actually identify or characterise those disputes. It argued that a failure to characterise the disputes precluded the Commission from exercising its functions as a private arbitrator.

[48] LORAC’s written submissions dated 3 July 2017 set out in paragraph 25 the following:

“25. To resolve the disputes arising out of the Agreements, so as to have the third paragraph of clause 1.5 of the Agreements produce the result that the Parties intended when they agreed to the mutual obligation therein, it is respectfully submitted that the Commission must make a Determination that clauses of the Agreements that are presently non-compliant with the 2016 Code are to operate and/or be implemented so as to be compliant with the 2016 Code, in terms set out in the attached Schedule for each of the Agreements.”

[49] Further, in relation to each application, LORAC provided a draft determination at the commencement of the hearing which is set out in an appendix to this decision (the Draft Determinations). The Draft Determinations are in substantially similar terms to the Schedule attached to its written submissions dated 3 July 2017.

[50] I am satisfied and find that LORAC adequately and properly characterised the dispute in its written submissions, and by way of the Schedule to its written submissions and the Draft Determinations. I am further satisfied that LORAC discharged its responsibility to identify the matters in dispute and the relief it sought. Accordingly I find that the Commission can exercise its powers to determine this dispute.

Objection 4 - Is clause 1.5 an objectionable term and/or an invalid clause?

[51] The basis of the objection that clause 1.5 is an invalid clause is that it purports to require the parties to vary the Agreements to the extent necessary to make them code compliant. The requirements of the clause, the CFMEU argued, are inconsistent with the procedures outlined in Part 2-4, Enterprise Agreements, having regard to the requirements to vary an enterprise agreement at s.207 to s.216 of the Act. It further argued that clause 1.5 purports to be a mandatory condition, in that it purports to require the parties to make a variation and to that end is inconsistent with the Act.

[52] The basis of the objection that clause 1.5 is an objectionable term is because “it has the effect of requiring or purporting to require or having the effect of requiring a contravention of s.340 of the Act, but purporting to impel employees to exercise their workplace right to vary the enterprise agreement in a particular way on pain of civil penalty.” 15

[53] I do not consider that it is necessary for me to deal with this objection given my decision not to grant the relief sought by LORAC. However, to the extent it is necessary, I do not consider that clause 1.5 purports to require the parties to vary the Agreements in a manner inconsistent with the Act. It is also clear from the submissions made by LORAC that it does not consider that clause 1.5 requires the parties to vary the Agreements in a manner inconsistent with the Act. Further, I do not consider that clause 1.5 has the effect of impelling employees to exercise their workplace right to vary the Agreements in a particular way.

Objection 5 – Is the 2016 Code contemplated by clause 1.5?

[54] The CFMEU submitted that the ‘relevant Federal and State codes of practice and guidelines for the building and construction industry’ was a reference to ‘Building Code’ being a defined term in clause 1.4 - Definitions. The definition is in the following terms:

“‘Building Code’ means the Federal Government’s Building Industry Code 2013 as (amended).”

[55] The CFMEU contended that the 2016 Code did not amend the Building Industry Code 2013, and that reading the Agreements in their entirety, clause 1.5 should be read as referring to the Building Code 2013 as defined. As a result, the 2016 Code is not contemplated by clause 1.5 of the Agreements.

[56] During the hearing the following exchange 16 took place between the Commission and the legal representative for the CFMEU:

DEPUTY PRESIDENT: So, Mr Aird, are you suggesting that the Code for the Tendering and Performance of Building Work 2016 is not a Federal and State code of practice or guideline for the building and construction industry? Is that your submission?

MR AIRD: I don’t know about the Federal and State codes of practice. I don’t know … It’s my understanding that they make the claim that the 2016 Building Code applies by virtue of clause 1.5. We say it does not and cannot; that the 2013 Building Code has not been amended.

[57] Senior Counsel for LORAC pointed out that ‘Building Code’ (the defined term) is not used in clause 1.5. LORAC argued that the adoption by the parties of the expression ‘relevant Federal and State codes of practice and guidelines’ in clause 1.5 demonstrated that they had “something wider in mind in clause 1.5. They meant any relevant Federal and State code of practice, and on any view this (the 2016 Code) is a relevant code of practice or guideline for the building and construction industry”. 17

[58] In my view, the stated purpose of clause 1.5 is that the Agreements would be compliant with ‘relevant Federal and State codes of practice and guidelines for the building and construction industry’.

[59] The Parties did not limit any reference to code compliance to the defined term of ‘Building Code’. On the contrary, the reference to Federal and State codes and guidelines clearly contemplated something broader than the Building Code 2013. This is evidenced by the use of ‘and’ between Federal and State, and the use of the plural ‘codes’ and ‘guidelines’ in the relevant sentence in clause 1.5.

[60] I consider that any reasonable person would understand the language chosen by the parties to contemplate something broader than just the Building Code 2013. I cannot accept, as was suggested by the CFMEU and outlined in paragraph 56 above, that the CFMEU does not know whether the 2106 Code is a code of practice or guideline for the building and construction industry. While neither party led any substantial evidence as to the history or application of the 2016 Code or other Federal and State codes of practice and guidelines for the building and construction industry, it is indisputable in my view that the 2016 Code is a relevant code for the purpose of clause 1.5 of the Agreements.

[61] I find that the 2016 Code is a ‘relevant code of practice or guideline for the building and construction industry’ and is applicable to clause 1.5 of the Agreements. I also find that it matters not whether the 2016 Code amended the Building Code 2013, because 2016 Code is ‘a relevant code’ for the purpose of clause 1.5.

Objection 3 – Does the Commission have the power to make the determination requested by LORAC?

[62] I note firstly that the Commission is given a power of private arbitration by virtue of clause 7.5 of the Agreements to resolve disputes arising in the workplace and/or project including, but not limited to, matters arising out of the Agreements or the National Employment Standards. I have indicated earlier that I am satisfied that there is a dispute arising in relation to clause 1.5 of the Agreements, and that I am able to determine this dispute. Relevantly to this objection, the CFMEU made the following submission:

“19. The CFMEU has not contended that a dispute addressing the factual lacuna disclosed in the proceedings cannot be progressed pursuant to the dispute procedure in the Agreements. Indeed we would contend such an issue can be progressed through the dispute procedures contained in clause 7.5 in the Agreements. Whilst we allege the factual lacuna of this dispute could have been pursued under the dispute procedure what is not available is the nature of the dispute the Applicant has sought to pursue and the relief the Applicant has sought ...” 18

[63] The CFMEU’s outline of submissions suggested that the relief sought in LORAC’s applications required the CFMEU to “support a ‘schedule of clauses’, solely determined by the Applicant that purports to make the Agreements ‘code compliant’. The support would be by way of requiring the CFMEU to recommend the clauses be approved by employees, that is to recommend employees vote in favour of the schedule of clauses for a variation to the Agreements, pursuant to the variation to an agreement processes contained at s.209(1) of the Act”. 19

[64] The CFMEU also asserted that the relief sought ‘is prohibited under the Act or is otherwise repugnant to the Act. The Act prohibits the Commission from arbitrating a dispute (however described) in regards to a variation to an agreement pursuant to s.217A(3)’. 20

[65] It also asserted that ‘the clauses being sought by the Applicant are excessive and unnecessary to achieve the outcome sought by the Applicant’, however it did not specify the basis for this assertion.

[66] In response, LORAC submitted that it has not sought a determination that the CFMEU ‘supports’ anything. It reinforced that it did not seek to progress a grievance against the CFMEU, nor it did not ask the Commission to vary the Agreements. Rather, it seeks a determination to give effect to the parties’ agreement, reflected in the third paragraph of clause 1.5 of the Agreements, that the Agreements be implemented and/or operate in a manner that ensures compliance with the relevant code.

[67] LORAC submitted that the primary apparent purpose of the 2016 Code is to ensure flexibility is available to an employer to meet the needs of the project or work upon which workers are engaged, and the secondary apparent purpose was to limit union access to workplaces.

[68] LORAC contended that the non-code compliant clauses had within them an internal process for flexibility by agreement with employees and/or the CFMEU. To the extent that a particular clause did not have such facility, the Workplace Flexibility clause (1.7) was permissive of such agreements with employees being arrived at. It was submitted that the effect of clause 1.5 on such provisions is that the agreement to achieve 2016 Code compliance must be imputed into the operative provision, such that the relevant clause might be implemented by the employer settling such hours and rosters in accordance with the needs of the project and the employees and the CFMEU are taken to have agreed to the departure from the primary position prescribed by the Agreements. 21

[69] LORAC further contended that the secondary apparent purpose of the 2016 Code, i.e. limiting union access to the workplace, could readily be achieved by implementing the Agreements in such a fashion that every provision granting access to the union is interpreted to mean access to non-working places. It argued that this did no more than to give effect to the terms of clause 1.5, ensuring that in operation, each of the Agreements is 2016 Code compliant.

[70] LORAC acknowledged that if so much as one clause in one of the Agreements was incapable of being read in a way that was code compliant, then LORAC will not be a code compliant entity.

[71] To the extent that the Agreements can be read in a way consistent with the commitment made by the parties to code compliance found in clause 1.5, I find I should do so. This is what the plain meaning of the words in clause 1.5 reveal, and this is supported by the principles that ‘all words in an enterprise agreement must prima facie be given some meaning and effect’ 22; and ‘it may be inferred that such (enterprise) agreements are intended to establish binding obligations’23. However I can only read the relevant provisions in the Agreements in a way consistent with the parties’ commitment to code compliance if the words permit such an interpretation.

[72] Having applied the relevant principles to each provision of the Agreements dealt with in the Draft Determinations, I consider that there are a number of provisions that are incapable of being construed in a way that is code compliant. Given the acknowledgement of LORAC set out above that all clauses must be code compliant for it to be a code compliant entity, I will only deal with four of the provisions in the Draft Determinations that I consider incapable of being read in a way that is code compliant as reasons for my conclusion.

Clause 4.1 Hours of Work – General Building and Construction Projects

[73] The second provision referred to in each of the Draft Determinations relates to clause 4.1 - Hours of Work - General Building and Construction Projects. The fourth paragraph of clause 4.1 provides as follows:

“Starting times and the taking of rest pauses and meal breaks can be staggered to suit project requirements by mutual Agreement between the Parties to this Agreement.”

[74] The Draft Determinations seeks that ‘the fourth paragraph of clause 4.1 is implemented and/or operates by the expression ‘Parties’ being taken to mean, for the purposes of this clause, Laing O’Rourke and its employees’.

[75] ‘Parties’ is a defined term (clause 1.4(g)(g)) and means ‘the Parties to this Agreement as defined at Clause 1.2 Parties to the Agreement’.

[76] Clause 1.2 of the ACT Agreement is in the following terms:

“The parties and persons bound by the Agreement are as follows:

a) Laing O’Rouke Australia Construction Pty Ltd (ABN 39 112 099 000) (The Company). The Company’s “Short Title” is Laing O’Rourke.
b) Employees of the Company engaged in the classifications contained within this Agreement on the Company’s Building Group (ACT) general building and construction projects in Australian Capital Territory.
c) Construction, Forestry, Mining and Energy Union (CFMEU).”

[77] The NSW Agreement is in the same terms except that it references New South Wales rather than ACT in subparagraph (b).

[78] In my view, it is clear that Parties mean the three parties named in clause 1.2, being LORAC, Employees, and the CFMEU. No ambiguity arises as to who comprise the Parties. I do not consider that this provision can be implemented or operate in a way that effectively excludes one of the named parties. To do so would be contrary to the ordinary meaning of the relevant words. I do not consider that clause 1.5 can overcome what is the plain and unambiguous definition of Parties, nor the requirement that ‘mutual agreement between the Parties’ is necessary.

Clause 4.2 - Rostered Days Off

[79] The third provision in the Draft Determinations relates to clauses 4.2(c), 4.2(d) and 4.2(g) which are in the following terms:

“4.2(c) Work shall not be undertaken on the six (6) weekends and agreed RDO’s adjacent to Australia Day, Good Friday/Easter Monday, Anzac Day, Queen’s Birthday, Labour Day and Industry Picnic Day has identified in the calendar at Appendix E and the Saturday of these weekends shall be referred to as a ‘no work Saturday’.

4.2(d) Where there is an agreed emergency or a special client need and subject to the agreement of all the relevant Parties to this Agreement and the Union, where the affected employees choose Union representation the required work may be undertaken on the work weekends and adjacent fixed RDO’s. Unless impracticable the Company will give the other Parties 7 days notice of any such need for work so as to ensure appropriate consultation.

4.2(g) An Employee will be eligible for an RDO after achieving 7.2 hours RDO accrual. However, a new Employee shall be eligible to use lesser RDO accruals for the no work Saturdays and adjacent fixed RDO’s for the weekends nominated in this clause.”

[80] The Draft Determinations seeks that ‘for the purposes of clause 4.2(d) the Union will be taken to have agreed to the required work being undertaken by operation of clause 1.5 of the Agreement’.

[81] Again, in considering the ordinary meaning of the relevant words, it is plain that there is a prohibition on work being undertaken on particular days (cl.4.2(c)). This prohibition may be overcome where there is an agreed emergency or a special client need, and the Parties agree to work being undertaken on those particular weekends and adjacent fixed RDO’s (cl. 4.2(d)). In effect there are two triggers found in clause 4.2(d), that being an agreed emergency or a special client need and agreement of the Parties.

[82] It is unclear as to whether the Draft Determinations are intended to override the requirement that there be an agreed emergency or a special client need before work may be undertaken on the specified days in the clause, or whether it is only intended to override the need for agreement of the Parties to so work in such circumstances.

[83] Either way, I do not consider that clause 4.2 can be implemented or operate in the manner proposed by LORAC because to do so would be contrary to the ordinary meaning of the relevant words.

Clause 4.6 Overtime

[84] The second paragraph of clause 4.6 is in the following terms:

“The Company may require an Employee to work reasonable overtime. However reasonable overtime shall not include a requirement on the part of Employees to work 8 hours overtime each Saturday and it shall not for any purpose, be regarded as a restriction or limitation for Employees not to so work.”

[85] The Draft Determinations seek that this paragraph be implemented and/or operate by Employees being deemed to have agreed, by operation of clause 1.5 of the Agreement, to such overtime as is necessary to be worked, whether by way of Saturday overtime or otherwise.

[86] The significant difficulty with the Draft Determinations in relation to the second paragraph of clause 4.6 above is that there is no capacity on the face of the words for employees to be required to work overtime in a manner inconsistent with the this paragraph.

[87] The words specifically provide that reasonable overtime ‘shall not’ include a requirement to work 8 hours overtime each Saturday. There is nothing ambiguous about the words ‘shall not’ in my view. It does not contemplate any ability for LORAC to require an Employee to work overtime in these circumstances.

[88] I find that clause 1.5 is insufficient to allow the second paragraph of clause 4.6 to be implemented and/or operate in the manner proposed by LORAC.

Clause 7.5 Industrial Relations Dispute Procedure

[89] Clause 7.5 is the dispute resolution procedure dealt with earlier in this decision. Clause 7.5(g) differs slightly between the NSW and ACT Agreements. The ACT Agreement provides as follows:

“At levels (a) to (d) inclusive of the above, the Employee may choose to have a representative in attendance who may be a Union Delegate, Employee Representative, or another representative of their choosing.”

[90] The NSW Agreement at clause 7.5(g) is in the following terms:

“At levels (a) to (d) inclusive of the above, the Employee may have a representative in attendance who may be a union official.”

[91] The Draft Determinations seek that clause 7.5(g) in the Agreements be implemented and/or operate ‘by only permitting entry by union officials to Company premises where building work is not performed’.

[92] The Draft Determinations seek a restriction on access by union officials to Company premises where building work is not performed. Clearly there is no such restriction contained within clause 7.5(g). There is no basis in my view, notwithstanding the commitments in clause 1.5, to be able to read the ordinary meaning of the relevant words in a way sought in the Draft Determinations. It is simply not available on the face of the words.

[93] Given I cannot read at least one of the provisions of the Draft Determinations in the manner sought by LORAC, the Agreements will not be code compliant and LORAC will not be a code compliant entity.

Concluding comments and recommendations

[94] On the evidence before me, I consider that it is a fundamental requirement for the ongoing viability of LORAC, as a code covered entity, that its Agreements be compliant with the 2016 Code.

[95] The unchallenged evidence of LORAC is up to 90% of its projected work for the foreseeable future will result from federally funded building work, i.e. work that requires LORAC to be compliant with the 2016 Code. Mr Olsson’s evidence concluded with the following:

“Were Laing O’Rourke excluded from Federally-funded building work it would decimate its business and cause the employment of many employees to be terminated. The level of privately funded building work in Australia would not be enough to sustain the business.” 24

[96] Compliance with the 2016 Code ought to be of fundamental importance to Employees. If Employees covered by the Agreements do not abide by their commitment to ensure compliance with the 2016 Code, they put in jeopardy not just their own jobs but the jobs of some 2,900 employees of LORAC.

[97] The evidence in this matter in my view is clear that LORAC entered into the Agreements in reliance on the commitment made by the Employees and CFMEU in clause 1.5. The evidence is also clear that the CFMEU NSW’s Divisional Executive subsequently passed a resolution that it would not ‘re-open agreements’ to make them code compliant - despite the agreement it had made with LORAC to do so.

[98] Parties should be held to the agreements that they reach. While I cannot compel compliance with the Agreements, in the circumstances I consider it appropriate to make a further recommendation to resolve the disputes.

[99] I make the following RECOMMENDATIONS:

a) That the CFMEU advise their members covered by the Agreements to take all steps necessary to give effect to the commitment they made to ensure the Agreements are compliant with the relevant code, being the 2016 Code.

b) That the Employees covered by the NSW Agreement to take all steps necessary to give effect to the commitment they made to ensure the NSW Agreement is compliant with the relevant code, being the 2016 Code.

c) That the Employees covered by the ACT Agreement to take all steps necessary to give effect to the commitment they made to ensure the ACT Agreement is compliant with the relevant code, being the 2016 Code.

[100] Further, I DIRECT the CFMEU to advise my Chambers in writing within seven days of the date of this decision as to whether it has complied with the recommendations above.

[101] For the reasons set out above, and with regret, I cannot grant the relief sought by LORAC and accordingly dismiss the applications.

DEPUTY PRESIDENT

Appearances:

GJ Hatcher SC with P Ludeke for Laing O’Rourke Australia Construction Pty Ltd.

M Aird with T Fischer for Construction, Forestry, Mining and Energy Union.

Hearing details:

2017.

Sydney:

August 2.

Appendix A

Appendix B

 1   C2017/3048.

 2   C2017/3049.

 3   Written submissions of LORAC dated 3 July 2017 at paragraph 26

 4   Ibid at paragraphs 28 and 29.

 5   [2017] FWCFB 3005.

 6   Section 18 of the 2016 Code.

 7   PR594379.

 8   Transcript PN 84.

 9   Ibid.

 10   Kucks v CSR Limited (1996) 66 IR 182 at [184].

 11   CFMEU outline of submissions dated 17 July 2017 at paragraph 11

 12   Transcript PN284.

 13   Transcript PN 246 to PN 249.

 14   CFMEU v Lend Lease Building Pty Ltd[2014] FWC 4032.

 15   Further submissions of the CFMEU – jurisdictional objection dated 1 August 2017.

 16   Transcript PN59 and PN60.

 17   Transcript PN64.

 18   CFMEU outline of submissions dated 17 July 2017 at paragraph 19.

 19   See paragraph 29 of the CFMEU outline of submissions.

 20   Ibid at paragraph 31.

 21   See written submissions of LORAC dated 3 July 2017 at paragraph 28.

 22 Ibid at [44].

 23   Ibid at [144]

 24   Exhibit A1 at paragraph 49.

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