Laing O'Rourke Australia Construction Pty Ltd v The Australian Workers' Union

[2013] FWC 9809

[2013] FWC 9809

FAIR WORK COMMISSION

RECOMMENDATION

Fair Work Act 2009
s.739 - Application to deal with a dispute

Laing O'Rourke Australia Construction Pty Ltd
v
The Australian Workers' Union; "Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union" known as the Australian Manufacturing Workers' Union (AMWU); Construction, Forestry, Mining and Energy Union; Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia
(C2013/6514)

Northern Territory
SENIOR DEPUTY PRESIDENT RICHARDS	BRISBANE, 17 DECEMBER 2013

Summary: Whether agreement obligates employer to ensure employees leave Project by designated finishing time - construction re where and when duties commence and finish under the agreement - contextual construction - defined terms - artifice - productivity

[1] On 23 October 2013 Laing O’Rourke Australia Construction Pty Ltd (“the employer”) lodged a dispute application under s.739 of the Fair Work Act 2009 (“the Act”) in relation to a workplace issue that had been the subject of a prior application under s.418 of the Act. A stop order had been made against the employees who were the subject of the application. The employer subsequently notified this dispute in relation to the Construction, Forestry, Mining and Energy Union (“the CFMEU”), the “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (“the AMWU”), the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (“the CEPU”) and the Australian Workers’ Union (“the AWU”) (“the unions”).

[2] The unions subsequently objected to the application proceeding on jurisdictional grounds. However, ultimately, it was the CFMEU alone which maintained its objection, with the other unions withdrawing their objections over time.

[3] Following the receipt of written submissions and a hearing, a decision was published in respect of the CFMEU’s objections in [2013] FWC 9456. In short, the objections were dismissed and a conference was conducted on the substantive matters.

[4] A conference involving the employer and the CFMEU and the AWU (with the CEPU and the AMWU having ceased subsequently to be parties to the dispute) was conducted on Wednesday 4 December 2013. The issues were discussed and the prospect of a managed solution explored. This was a fruitless endeavour. In the end, the employer proposed that I issue a recommendation in relation to the issue in dispute.

[5] The CFMEU and the AWU opposed this course and submitted that I lacked sufficient exposure to the issues to make an informed recommendation (despite the discussions in the conference about the relative merits of each side’s claims, along with my understanding of the issues arising from the jurisdictional proceedings and familiarity with the transcript of evidence from the proceedings under s.418 of the Act).

[6] The CFMEU and the AWU claimed I should consider “evidence” before issuing a recommendation. In the alternative, the unions preferred the option of standing the matter down and allowing for the effluxion of time and other developments to determine the course of the dispute, and/or for the employer to adopt the practices of other contractors on the Project.

[7] I do not consider that it is helpful to leave the matter without some prospect of closure, or advancement through the disputes process. The matter has already been subject to delayed consideration owing to the agitation of the jurisdictional objections, which I have dismissed. Further, it is evident from the proceedings under s.418 of the Act the matter is the subject of some very considerable anxieties at the workplace level, and there is some demonstrable expectation on the part of employees concerned that the matter will be addressed. This latter observation was apparent from the evidence led in the application under s.418 of the Act.

[8] I note as well that the stop order made under s.418 of the Act has lapsed.

[9] In view of this, I decided that I would issue a recommendation, but only after I received any further material from the unions (and the employer). This was intended to ensure there were no deficiencies in my understanding of the perspectives on the dispute.

[10] The recommendation below follows the receipt of the additional materials from the parties. The union material did not add to the merits of the dispute (on the issue of construction) but essentially re-agitated the arguments above.

[11] I add at this juncture that the AWU did not make a submission in respect of the prospective recommendation. It indicated that it had resolved its differences with the employer. The employer so agreed and the AWU ceased to be a party to the dispute.

Summary

[12] By way of summary, the dispute - now only between the CFMEU and the employer - concerned whether or not the employer should provide for employees to depart from the Site or Project (by bus) at the designated finishing time, or whether work should finish at the workface, as it may be on the Project, at the designated finishing time. I will elaborate on this issue further below.

[13] It was this issue, I add, that was at the centre of the application made under s.418 of the Act referred to earlier.

The Agreement

[14] Section 8.1 of the Laing O’Rourke Construction Australia Proprietary Limited Ichthys Onshore Construction Greenfields Agreement (“the Agreement”) provides relevantly as follows:

[...]

(b) The Parties additionally recognise and support the right of the Employer to require their employees to consistently report on time for the commencement of their shift and not leave their designated work area prematurely prior to any designated break during the work day or at the finish time of each designated work day. The Employer shall make clear what are the reasonable time frames for wash-up [...] prior to a break and to pack up and wash-up prior to the end of each designated work day. [...]

(c) The Parties and Employees bound by the Agreement commit to:

[...]

(5) be present, ready to commence work at the pre-start meeting each day at the specified start time; and

(6) remain at their workface until their designated finishing time.

[15] The Agreement does not define “workface”. Nor does it define “designated work area”. But the Agreement does define both “Project” and “Site”.

[16] The Project “means the Icththys LNG Onshore Construction Project situated at Blaydin Point.”

[17] The Site “means the Icththys Onshore Facility situated at Blaydin Point, south of Darwin, Northern Territory.”

[18] The requirements to remain at the “workface” or not to leave the “designated work area prematurely” cannot be said to mean or refer to the Project or the Site, as a consequence, because the latter two terms are defined. The term “workface” and the reference to the “designated work area” must mean something else. The plain language of the Agreement cannot be clearer.

[19] The employer contends the workface and the designated work area refer to the immediate place at which duties are performed, presumably in accordance with its contracted scope of works; that being the cryogenic tanks construction area.

Issues in contest

[20] This matter aside for the moment, the issues between the parties are as follows.

[21] The security gates which are the entry point to the Project or Site are some 2 km from the crib facilities and pre-start area.

[22] The CFMEU contended that the Agreement provides for employees to have exited (by bus) the Project or Site via the security gates by the designated finishing time (of 5 PM).

[23] The CFMEU contend that other contractors on Site observed this practice.

[24] If the employer here was to accede to the CFMEU’s construction, it would need to allow employees to conclude the performance of their duties (at the workface or designated work area, as the employer defines it) at a time that would permit them (the employees) to move to the crib facility/pre-start area, wash up, and board buses so that the employees exit through the security gates - some 2 km distant - at or by 5 PM.

[25] In the proceedings under s. 418 of the Act, the evidence put by the CFMEU organiser was as follows:

The Site procedure has been set from the beginning. Everyone has come on board with this that you leave the Project - you bus out of the Project at 5 pm at knock off.

[...]

When you say “leave the Project at 5 o’clock”, does that mean they walk out of the gate at 5 o’clock, or does that mean they to leave their work area at 5 o’clock? No, that means they leave the Project, the security gate at 5 o’clock. So for example probably the furthest [indistinct] they furthest part of the Project [indistinct] there guys would probably leave about 4.30, 4.35 with intention of getting off the Project at 5 o’clock. [..] The Site standard is they leave the Project at five o’clock, and that’s when they stopped getting paid.

[26] This evidence reflects the claims made by the CFMEU in this matter. Clearly, employees would need to cease productive work at around 4.30 pm in order to exit the Site by 5.00pm. The aggregated loss of productivity (against the employer’s expectation) is open to calculation.

[27] The employer, of course, takes a contrary view of the finishing times.

[28] I understand the employer’s current practice to be to permit employees to leave the pre-start area\crib faculties so that they can depart the crib facilities/pre-start area by bus by or at 5 PM). The employer contends that in order to achieve this outcome it routinely releases employees at around 4:45 to 4:50 PM (given the close proximity of the workface to the crib facilities/pre-start area.

Consideration

[29] I should firstly address the meaning of the “workface”, and the “designated work area”, about which much has been said in this dispute.

[30] As mentioned above, the Agreement defines Site and Project, but not “workface” or “designated work area”.

[31] In the context of the current state of the argument, and given that Site and Project are defined terms, the workface or the designated work area appears to mean no more than the immediate construction area within which the employer is carrying out its contracted works (on the two cryogenic tanks).

[32] The defined terms Site or Project are frequently referred throughout the Agreement in various contexts. But the terms referred to above, on a plain reading, are much narrower in their scope of meaning, given their specific context which concerns the circumstances in which the working day starts and concludes, and how breaks are to be taken.

CFMEU position

[33] The CFMEU would argue that the terms mean what was intended by the parties when the Agreement was made (though nothing was put to me in any detail about this at all). But clearly here there is likely to be a divergence of subjective views between the parties who made the Agreement, which would be unhelpful for the purpose of construction. In the end, the plain words of the Agreement, the Agreement read as a whole and the relevant clauses taken in their context would be the basis of the proper construction.

[34] In any event, if I were to accept the position of the CFMEU then work would finish at the designated finishing time when the employees passed through the security gates and exited the Site or Project. That is, “workface” or “designated work area” would mean “Project” or “Site” under the Agreement. But workface and designated work area do not mean Project or Site, as I have set out above. I cannot make the reference to either term disappear and, by so doing, deny clause 8.1(c)(6) and clause 8.1(b) of the Agreement any work to do as a term of the Agreement.

[35] Even if this difficulty could be set aside, which it cannot, the proposition that the designated working day ends when the employees pass through the Site security gates some 2 kilometres from the construction area and the pre-start meeting area/crib facilities is an unpersuasive construction. Work does not start at the specified time at that point when employees pass through the security gates at the Site entry (see clause 8.1(b) of the Agreement). Work starts, instead, at the pre-start meeting at the specified hour (6.30 am). Nor therefore can work be said to end at the point at which employees pass through the Site security gates either (see clauses 8.1(b) and 8.1(c) (6) of the Agreement).

[36] If the Agreement was intended by its framers to establish some such contrasting arrangements between the start and finish of work, it would say as much, or provide some surer guide that it intended as such. There is an elaboration of this argument below in respect of the employer’s argument.

[37] There is a further reason not to construe the definition of Site or Project as being referrable to the designated work area or the workface. A point remote from the immediate work area would not be referrable to the circumstances in crib breaks, as clause 8.1(b) of the Agreement cites. Plainly, because the designated work area is referenced in respect of crib breaks it is a place of work adjacent to or in close proximity to crib facilities. The defined terms “Project” or “Site”, if substituted for the phrase “designated work area” in this context would render clause 8.1(b) of the Agreement puzzling, at best. This is an outcome to be avoided in the construction of an Agreement.

[38] There is a further consequence to this construction. Because the reference to finish time and “designated work area” occur in the same clause, they too are to be read contextually as referring to an area adjacent to the crib facilities (and not some distant point relevant to the Site or the Project boundaries).

[39] In all, on the current state of the argument, there is no support in my view under the Agreement for an obligation to fall upon the employer to ensure the employees have exited the Project\Site security gates at or by the designated finishing time - 5.00pm. The Project’s security gates do not constitute “a designated work area” any more than does the “workface”, given the confined nature of the tanks construction area.

[40] I cannot therefore endorse the CFMEU view of the operation of the Agreement. But this is not the end of the process of construction.

[41] I now turn to the employer’s position.

Employer’s position

[42] Work does not commence at the workface, or at the designated work area, but when employees arrive at the pre-start at the specified time. Similarly, crib breaks are not taken until employees are released from the designated work area. That much is obvious. Paid work commences when employees arrive at the pre-start meeting at the specified commencement time of their shift. Clause 8.1(b) and 8.1(c) (5) of the Agreement say as much.

[43] Equally, according to clause 8.1(b) of the Agreement, “the end of each designated work day” follows employees having been directed to pack up and wash up. Clause 8.1(b) of the Agreement so states. Clause 8.1(c)(6) of the Agreement states that employees must remain at their workface until their designated finishing time

[44] Clause 8.1(b) of the Agreement, on its face, is not entirely in accord, therefore, with clause 8.1(c) (6) of the Agreement. The latter presupposes that the employees will remain at the workface until the designated finishing time. The former presupposes that there will be a time at which the employer will release the employees from the workface, or the designated work area, prior to the designated finishing time, so that they might wash up and exercise control over any tools and equipment.

[45] The employer’s construction requires the particularised reference to “workface” in clause 8.1(6) (c) (6) of the Agreement to be read as the “designated work area” (referred to in clause 8.1(b) of the Agreement).

[46] The Agreement is drafted imperfectly. Ideally, it should not be necessary to construe terms and phrases such as this in a wider contextual setting.

[47] But nonetheless, a fair reading of the Agreement suggests that “workface” and “designated work area” should be interchangeable in meaning. As discussed above, both refer to the immediate area within which work is performed on the contracted tasks (the construction of the tanks). Workface means as it does ordinarily the particular location at which work is performed. And the designated work area is the area of work from which employees are released by the employer prior to a crib break and prior to the end of the designed work day. That is, both terms refer to the same location: that being the particularised location at which the employees perform construction related work.

[48] The somewhat greater difficulty, however, in my view is the command in clause 8.1(c) (6) of the Agreement for employees not to leave the workface before the designated finish time, and the ostensibly qualified demand for employees (at clause 8.1(b) of the Agreement) not to leave the designated work area before they are released for wash and pack up prior to the end of the designated work day.

[49] I see no need to resolve the tension between the commands by construing the pack up and wash up period as being activities that are undertaken at the “workface” or at the designated work area. That would result in artifice only, and undermine the authenticity of the construction process.

[50] On a fair reading, I think the more detailed obligation under clause 8.1(b) of the Agreement is to be accorded standing as providing guidance as to the course of the working day. That is, employees are to remain at the workface\designated work area (the tanks construction area) until such time as they are released by their employer to move from that location in order to pack and wash up prior to the end of the designated work day (5.00pm). The reasonableness of the release time, of course, is contingent on the proximity of the workface to the crib facilities. In the current case, given the photographs of the Project I have seen, the workface is very close to the crib facilities, and from which the busses operate. This would explain why the employees are being released by the employer at around 4.45 or 4.50 pm.

[51] Clause 8.1(c) (6) of the Agreement at best, therefore, only underscores the demand evident across clause 8.1 of the Agreement, read as a whole, that employees shall not leave the workface\designated work area prematurely, and (other than for crib breaks) only at such time as they are released by their employer to do so for wash up and pack up purposes prior to the designated finish time - 5.00pm. I do not think the clause can do any more work than this, given clause 8.1(b) of the Agreement and the detailed procedure it steps out.

[52] I add also that this construction provides for some consistency in the working day beginning, in so far as the working day ends at the same point at which the work commences (the pre-start\crib hit facilities), and at the specified or designated times. This is in contrast to the CFMEU’s construction.

[53] The contextual approach to the construction of the Agreement, I think, also preserves as much as possible the operative effect of clause 8.1(b) and clause 8.1(c)(6) of the Agreement (but certainly while conditioning the absolute nature of the command in that latter clause)

[54] There are, of course, the reasons I have given earlier in relation to the difficulties with the CFMEU’s argument.

Recommendation

[55] Given the above discussion, I recommend that the employees recognise that the obligation on them under the Agreement is to finish work at the workface (which means the cryogenic tanks construction area where they work) at the time indicated by the employer that is sufficient to allow for wash up and to exercise care over the employer’s equipment and tools prior to the designated finish time to the day - 5.00pm.

[56] That is the obligation, at least on my view as set out above, that falls upon the employees because of the operation of the Agreement made by their industrial representatives and to which they are subject.

[57] As I have set out above, I see no argument at all of any persuasive quality that the Agreement should be read as obligating the employer to ensure employee’s exit the Site security gates by the designated finish time - 5.00pm. Work finishes (at the “designated” time) where it begins each day (at the “specified” time).

[58] Other contractors on the Project may have applied a different approach under the template agreements to which they are bound than this employer. If this is true, I do not know their circumstances, or how they might have managed their commercial and industrial risks. As I mentioned above, there are 130 employees of the employer on site and important productivity issues arise from the contest over the construction of the Agreement.

[59] I recognise, however, that inconsistent application of template agreements across a Project is frequently a source of industrial instability. But in the end, I can only deal with the circumstances of the application before me, and the issue of construction with which I was presented. And I do so by way of the above recommendation.

SENIOR DEPUTY PRESIDENT

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