[2015] FWC 4352

FAIR WORK COMMISSION

DECISION

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

Mt Arthur Coal Pty Ltd
v
Construction, Forestry, Mining and Energy Union
(C2014/6428; C2014/7835)

Coal industry
SENIOR DEPUTY PRESIDENT HARRISON	SYDNEY, 30 JUNE 2015

Dispute about matter arising under the Mt Arthur Coal Enterprise Agreement 2011 - interpretation of reduction in hands clause - evidence of surrounding circumstances - CFMEU interpretation accepted.

[1] This decision concerns two applications, each made under s.739 of the Fair Work Act 2009 (Cth) (the Act), for the Fair Work Commission (the Commission) to deal with a dispute in accordance with a dispute settlement procedure in an enterprise agreement. The enterprise agreement is the Mt Arthur Coal Enterprise Agreement 2011 (the Agreement). 1 It was made between Mt Arthur Coal Pty Ltd (Mt Arthur or the company) and its employees engaged in production and engineering positions at the Mt Arthur Coal Mine (the mine). Three unions are covered by the Agreement. One is the Construction, Forestry, Mining and Energy Union (CFMEU).2

[2] In the hearing before me Mr Warren and Mr Rauf, both of counsel, were granted permission to appear for Mt Arthur. Mr Endacott and Mr Howard appeared for the CFMEU.

Background

[3] The mine is an open cut mine which produces thermal coal for domestic and export power generation. It is located southwest of Muswellbrook in the State of New South Wales. It is owned and operated by Mt Arthur, which is a subsidiary company of BHP Billiton Limited.

[4] The mine operates 24 hours a day, 363 days a year. Mt Arthur employs approximately 1056 employees in various production and engineering roles who are covered by the Agreement.

[5] Mt Arthur has decided to reduce its workforce. There were two occasions when such a decision was made. Each gave rise to a dispute notification and both are the subject of this decision.

[6] It is not in issue in these matters that Mt Arthur complied with its obligations about notifying its employees, and the CFMEU, of the proposed changes, and participated in discussions aimed at averting or mitigating the adverse effects of the changes on employees.

[7] The first decision concerns a group of 47 positions in the maintenance department which were to be made redundant, within which there are 14 boilermaker positions. The 14 boilermaker positions represent the total number of boilermaker positions at Mt Arthur. 3

[8] The second decision concerns a group of 150 positions which include employees, staff and contractors. 4 It is not clear how many are in positions covered by the Agreement, but I note that in the relevant s.739 application5 it indicated there were 68 positions in the maintenance department to be made redundant. Of these there are nine high-voltage electrician positions, six auto-electrician positions and four service person positions to be made redundant.

[9] In each matter, the dispute concerns the interpretation and application of clause 21.1 of the Agreement. The parties differ as to the proper interpretation and application of the clause.

[10] Clause 21.1 is in these terms:

“21 Retrenchment

21.1 REDUCTION IN HANDS
When a reduction of hands is decided upon by the Company it shall be regulated by the principle “the last to come the first to go” in the respective Production stream, Mechanical and Electrical Engineering streams according to length of service at the Mt Arthur Coal operation. Provided that if an agreement is arrived at between the Company and the appropriate employee representatives, such agreement will be binding notwithstanding that it may be inconsistent with the foregoing provisions of this Section.

…”

[11] The two competing interpretations are summarised in the grounds of the s.739 applications. I refer first to an extract from the grounds in the application which concerns the boilermaker positions:

“The dispute is about the proper interpretation and application of clause 21.1 of the Agreement to the proposed redundancies impacting the 14 boilermaker positions. Clause 21.1 requires that where there is a reduction of hands it shall be regulated by the principle “the last to come the first to go”.

It is the view of the Company that the correct interpretation and application of clause 21.1, in the circumstances, is to treat boilermakers as employed in a distinct trade and occupation in the Mechanical Engineering stream so that, where all 14 of the current boilermaker positions are redundant, it is the 14 employees employed in those boilermaker positions whose employment is to be terminated.

It is the contention of the CFMEU that the principle “the last to come the first to go” applies to all employees generally in the Mechanical Engineering stream regardless of their trade or occupation within that stream. The CFMEU therefore contends that, in relation to the decision of the Company to make 14 boilermaker positions redundant, clause 21.1 requires that the 14 employees at the bottom of the seniority list in an undifferentiated Mechanical Engineering stream, as a whole, are made redundant, regardless of the trade and occupation in which those 14 least senior employees are employed.”

[12] I next refer to an extract from the grounds in the application which concerns the high-voltage electrician, auto-electrician and service person positions.

“The dispute is about the proper interpretation and application of clause 21.1 of the Agreement to the proposed redundancies impacting the 9 high voltage electrician positions, 6 auto electrician positions and 4 serviceperson positions. Clause 21.1 requires that where there is a reduction of hands it shall be regulated by the principle “the last to come the first to go”.

It is the view of the Company that the correct interpretation and application of clause 21.1, in the circumstances, is to treat the high voltage electricians and auto electricians as employed in distinct and separate trades and occupations in the Electrical Engineering stream and to treat servicepersons as a distinct occupation within the production stream. Accordingly the correct interpretation of clause 21.1 requires that employees in the separate trades and occupations of high voltage electrician, auto electrician and serviceperson are made redundant based on length of service of employees in these distinct trades or occupations.

It is the contention of the CFMEU that the principle “the last to come the first to go” applies to all employees generally in the Electrical Engineering stream and the Production stream regardless of their trade or occupation within the streams. The CFMEU therefore contends that, in relation to the decision of the Company to make 9 high voltage electrician positions and 6 auto electrician positions redundant, clause 21.1 requires that the 15 employees at the bottom of the seniority list in an undifferentiated Electrical Engineering stream, as a whole, are made redundant, regardless of the trade in which those 15 least senior employees are employed. Likewise the CFMEU contends that in relation to the decision to make 4 serviceperson positions redundant clause 21.1 requires that the 4 employees at the bottom of the seniority list in an undifferentiated Production stream, as a whole, are made redundant, regardless of the occupation in which those 4 least senior employees are employed.”

The witnesses

[13] Mt Arthur relied on the evidence of the following witnesses:

● Mr Dwaine Jones, Qualified Mechanical Engineer

● Mr Jeff Kelly, Maintenance Manager

● Mr David Murrie, previously Manager Human Resources at Mt Arthur and also Head Human Resources NSW Energy Coal, BHP Billiton

● Mr Mitchell Seears, Superintendent Field Mechanical Maintenance

● Mr Xavier Wagner, General Manager Operations

● Mr Russel Wood, Senior Electrical Engineer

[14] The CFMEU relied on evidence from the following witnesses:

● Mr Andrew Carey, mine employee

● Mr Jeffrey Drayton, Vice President, CFMEU Mining and Energy Division, Northern Mining and New South Wales Energy District

● Mr Stephen Mepham, mine employee

● Mr Stephen Prosser, mine employee

● Mr Luke Turner, mine employee

The Agreement and its predecessors

[15] To understand the evidence of the witnesses, I should first refer to the provisions of a number of enterprise agreements that have covered employees in production and engineering roles at the mine. The CFMEU was either a party to, or covered by, each of the enterprise agreements I now refer to.

[16] The first agreement which was referred to is the Bayswater/Mount Arthur North Enterprise Flexibility Agreement 2001 6 (the 2001 agreement). It is apparent from its terms that it replaced an earlier agreement, but I do not need to refer to that instrument.7

[17] The 2001 agreement contains the term and definition “Work Model- the classification system that determines the Level (rate of pay) and Skills that Production and Engineering Employees employed by the Company use on the integrated Bayswater and Mount Arthur North mine site”. 8

[18] Clause 11.1 deals with the “Weekly Agreement Rate”. The payment of that rate was subject to maintaining flexibility of operations consistent with the implementation of the Work Model in Appendix 2, and also the requirement that all employees perform duties that they are trained and competent to perform, in accordance with the Work Model. The classification levels in the 2001 agreement comprised one Leadership Level and five lower levels described as Levels A, B, C, D and E.

[19] Clause 22 is titled “Reduction in Hands”. It is in these terms:

“When a reduction of hands is decided upon by the Company it shall be regulated by the principle “the last to come the first to go” in the respective Production or Engineering stream according to length of service at the Bayswater/ Mount Arthur North operation. Provided that if an agreement is arrived at between the Company and the appropriate union, such agreement will bind such members notwithstanding that it may be inconsistent with the foregoing provisions of this Section.”

[20] Clause 27.0 is titled “Work Clothes and Safety Boots”. I do not need to set it out in full. It is sufficient for me to note that, in the clause, there is a reference to the “Engineering stream”, the “Service sub-stream” and the “CHPP stream”.

[21] Appendix 2 to the 2001 agreement is the “Work Model”. The aim of the Work Model is “to improve efficiency, flexibility and cost effectiveness, to establish a simplified and consistent structure and, in doing so, provide a more rewarding work environment for all our employees”. One change that is to occur to achieve the aim is “[a] clearer definition of Production and Engineering work which is appropriately covered by either stream consistent with the Production and Engineering Award principles” and the provision of structured and accredited training for employees’ performance at work.

[22] The next part of the appendix is titled “Introduction”. It provides that the Work Model is based on sixlevels of pay, and production and engineering employees are required to hold a minimum number of core skills for each level. Later, it reads:

“The model is shown in Tables A-1 and A-2 and consists of TWO streams:
• PRODUCTION
• ENGINEERING
The PRODUCTION stream is further subdivided into
• Mining
• Coal Handling & Preparation (CHPP)**
• Service
and the ENGINEERING stream is subdivided into:
• Mechanical
• Electrical
**It is an inherent part of this model that Engineering Employees, as well as Production Employees, are employed in the CHPP sub-stream. For the purpose of retrenchment (see Section 22) the parties acknowledge that these employees retain their gate seniority.”

[23] The next part notes that:

“CHPP and Service streams consist of a smaller proportion of the total numbers of Production employees. It is not the intention to build “brick walls” around these two sub-streams but rather to have well trained competent employees who on a daily basis would have the knowledge and expertise to carry out the various tasks in their respective areas. In addition, employees assigned to these two sub-streams will be required on occasions to work in the Mining sub-stream in accordance with operational requirements and their skills.

Likewise Mining employees will be required to work in the CHPP and Service areas as the need arises.”

[24] The appendix then identifies a number of key components of the agreement. I will not set them all out. It is adequate to indicate they deal with the need for employees to work flexibly across identified streams.

[25] Next, there are provisions dealing with the transition into the Work Model of employees who were engaged as at the commencement of the agreement, and those recruited following that date. Other provisions deal with the progression of employees to the higher levels in the model. The appendix then deals with “Training and Development” and “Skills Accreditation”.

[26] Table A-1 in the appendix is titled “Work Model” and sets out the classification levels and the number of core skills an employee in Mining, CHPP, Service and Engineering is required to have.

[27] Table A-2 is titled “Work Model - Core and Ancillary skills”. It contains two major headings, “Production” and “Engineering”. Under “Production” are the subheadings “Mining”, “CHPP” and “Service”. Under “Engineering” are the subheadings “Mechanical” and “Electrical”.

[28] The next agreement is the Mt Arthur Coal Enterprise Flexibility Agreement 2004 9 (the 2004 agreement). It replaced the 2001 agreement. It has a definition of “Work Model” in similar terms to that in the 2001 agreement.10

[29] Clause 11.1 deals with the “Weekly Agreement Rate” and is in similar terms to the corresponding clause in the 2001 agreement.

[30] Clause 22 is titled “Reduction in Hands”. It is in these terms:

“When a reduction of hands is decided upon by the Company it shall be regulated by the principle “the last to come the first to go” in the respective Production stream, Mechanical and Electrical Engineering streams according to length of service at Mount Arthur Coal operation. Provided that if an agreement is arrived at between the Company and the appropriate union, such agreement will bind such members notwithstanding that it may be inconsistent with the foregoing provisions of this Section.”

[31] Clause 27.0 is titled “Work Clothes and Safety Boots”. It provides:

“The Company will provide free of charge to each Mt Arthur Coal employee the equivalent of one jacket or jumper, two sets of industrial clothing and one pair of safety boots per year in accordance with the Company Clothing Issue Point System (see appendix 7).

Because of the nature of the work, Mt Arthur Coal employees working permanently in the Engineering stream and Service sub-stream and some Mt Arthur Coal employees working permanently in the CHPP stream will receive one additional set of industrial clothing per year.

All Workshop Fitters, Electricians, Service people and CHPP Technicians will be entitled to an annual clothing issue to the value of 200 points, all other employees will be entitled to an annual clothing issue to the value of 150 points.”

[32] Appendix 2 is the “Work Model”. It is largely in the same terms as the “Work Model” in Appendix 2 in the 2001 agreement. The content of the “Aim” clause is shorter and there is no reference to the seniority clause “**”. The streams and sub-streams are described in the same manner as those in the 2001 agreement, which I have set out earlier at paragraph [22].

[33] The clauses which deal with key components, transition and progression are in largely the same terms as the corresponding clauses in the 2001 agreement. The differences are minor and of no significance to this decision.

[34] Table A1 is in similar terms to the corresponding table in the 2001 agreement. Table A-2 is titled “Work Model - Core and Ancillary Skills”. It is in an identical format to the corresponding table in the 2001 agreement. However, the description of some of the core and ancillary skills are different.

[35] The next agreement is the Mt Arthur Coal Workplace Agreement 2008 (the 2008 agreement). 11 It replaced the 2004 agreement. This agreement also has a definition of “Work Model”. It is in the same terms as the 2004 agreement.

[36] Clause 22 is the reduction in hands clause. The first sentence is in the same term as clause 22 in the 2004 agreement. The words in the second sentence “and the appropriate union, such agreement will bind such members” are replaced by “and the appropriate employee representatives, such agreement will be binding”.

[37] Clause 26.0 “Work Clothes and Safety Boots” is in the same terms as Clause 27.0 of the 2004 agreement. 12

[38] Appendix 1 is titled “Work Model” and is largely in the same terms as Appendix 2 in the 2001 and 2004 agreements. It contains the same reference to the two streams of production and engineering and to the same subdivisions into which those streams were divided. It introduced some new wording about the parties acknowledging some work of employees that staff may undertake and vice versa. The following was also new wording in the introduction part of the 2008 agreement:

“Employees are engaged in a stream/sub-stream within the work model which describes their principal work activities. Employees may be required from time to time to perform duties utilising skills contained within other streams/substreams provided those duties are within the limits of the employees' skills, competence and training and that those duties are within safe working practices and statutory requirements.”

[39] Table A1 is in the same terms as the 2004 agreement. Table A-2, “Work Model-Core and Ancillary Skills” is also in the same chart format as the 2004 agreement and contains many identical or similar core and ancillary skills to those contained in the corresponding table in that earlier agreement.

[40] The Agreement replaced the 2008 agreement. There is no reference in the definitions to “Work Model”. There is a reference in the definitions clause to “Skills Matrix- identifies current core and ancillary skills at Mt Arthur”. 13 Thereafter, that term is not used in the Agreement.

[41] Clause 2 is titled “Aims and Objectives”. It is in similar terms to the corresponding clause in the 2004 and 2008 agreements. It identifies the need for Mt Arthur to “realise productivity gains and obtain increased flexibility in the use of labour, which will lead to better utilisation of the workforce reductions in costs”.

[42] Clause 5.1 is titled “Continuous Improvement Process” In this clause, the parties and employees commit to “continually seeking and vigorously pursuing”, amongst other things, “a real reduction in operating costs”.

[43] Clause 7 deals with “Security of Employment”. It notes that Mt Arthur “continues to undergo major expansions including a significant increase in production and employment levels...”.

[44] Clause 10 concerns wage rates and bonus payments. It contains no reference to a Work Model. The classification structure differs to earlier agreements. This agreement has three adult levels: Mineworker Advanced, Mineworker and Trainee Commencement.

[45] Clause 21.1, the reduction in hands clause, has been reproduced by me at paragraph [10] of this decision.

[46] Clause 23 deals with “Work Clothes and Safety Boots” and is relevantly in the same terms as the corresponding clauses, clause 27.0 of the 2004 agreement and clause 26.0 of the 2008 agreement. 14 It refers to streams and sub-streams for the purposes of identifying some employees who will be allocated additional industrial clothing.

[47] There is no appendix titled “Work Model” in the Agreement. Appendix 1 is titled “Training & Development”. Relevant extracts are as follows:

“APPENDIX 1- TRAINING & DEVELOPMENT

All full time employees will be provided with the training opportunities to hold a minimum of 3 core skills and which for Production Employees shall include a truck skill. The Company will provide this training over a three year time period from the commencement of employment.

Employees are engaged in principal work activity in either Production or Engineering work.

Production is further subdivided into Mining, Service and CHPP.

Engineering work is further subdivided into Mechanical and Electrical.

Employees may be required from time to time to perform duties utilising skills contained within other areas provided those duties are within the limits of the employees' skills, competence and training and that those duties are within safe working practices and statutory requirements.

This arrangement will give the flexibility necessary to cover for employee absences, plant breakdowns, the irregular dispatches of coal off site and other day-to-day occurrences.”

[48] Thereafter is a list which refers to the need for either production or engineering employees to perform work in other areas of production and/or engineering. That is, a need to work flexibly and to train others in the skills they have acquired.

[49] The next part of the appendix, titled “Skills Accreditation”, contains the following sentence:

“Engineering stream employees may be required to attend TAFE courses held on or off site in order to increase their skills for which the Company will pay any costs including employee's travel if required.”

[50] A chart in Appendix 1 is titled “Core &Ancillary Skills - Example of relevant skills applying at commencement of Agreement”. It is in the same format as Table A-2 in the 2001, 2004 and 2008 agreements. It retains the main headings of “Production” and “Engineering” and each of the sub-headings also remains the same. It is to be recalled that in those agreements the corresponding table was titled “Work Model - Core and Ancillary Skills”. Many of those core and ancillary skills in this chart in the Agreement are in the same terms as those contained in the corresponding Table A-2 in the earlier agreements.

The evidence - my findings

[51] In addition to the facts I have referred to in paragraphs [3] to [10] above, the following relevant facts are established on the evidence.

[52] This is the first occasion Mt Arthur has needed to implement a reduction in hands and for clause 21.1 to be applied. On no earlier occasion has there been a need for there to be a reduction in hands and the application of the corresponding clause in predecessor agreements.

[53] The job title “fitters” was used at the mine to refer to a generic class comprising all of the employees within the mechanical stream. It was the description used at the top of the seniority list of mechanical tradespersons, to which I will shortly refer. Mr Kelly agreed that in the previous organisational charts, the reference to the fitter was to the generic term which covered mechanical trades employees. Those employees may hold a range of different trade certificates. They included employees qualified as fitters, fitter and turners, automotive mechanics, motorcycle mechanics, aircraft mechanics, boilermakers and sheet metal workers. 15

[54] In the new maintenance organisational structure, there would no longer be a job title of fitter and now the reference would be to plant mechanic. The job title or classification of plant mechanic is not one referred to in the Agreement. It is not apparent that it was a classification or job title used in the predecessor enterprise agreements. It is not identified in the maintenance organisational charts which existed prior to the restructure which has given rise to these proceedings. As is apparent from these proceedings, the new organisational chart does not have any boilermakers.

[55] For at least the last 15 years, there have been seniority lists placed on noticeboards or walls at the mine. It seems that at all relevant times, a list has been placed in what was described as the main bathhouse or at the entrance to that bathhouse. It appears that there is also another copy of the lists in another bathhouse, although it is not clear how long this bathhouse had been in operation. 16 A copy of the list for production employees is posted in or about the CHPP. The lists were updated from time to time.17

[56] There are three seniority lists. One is the mechanical tradesmen list, the second is the electrical tradesmen list and the third is the operations production list. 18 The seniority list for mechanical tradesmen was titled “fitters”. It covers employees who are in the engineering mechanical stream and includes employees with diverse qualifications. It includes boilermakers.19 The one for electricians is for electrical trades employees in the engineering electrical stream. The one titled “Operations Seniority” is for employees in the production stream.

[57] The practice in the past has been that Mt Arthur would inform the CFMEU when inductions of new employees were to occur. A draw was then conducted whereby employees would take numbers out of a box. The number would determine the employee’s seniority on the relevant list. For the majority of time in the past the draw was conducted at the mine site and in work time. For a period, the CFMEU was asked by Mt Arthur not to conduct the draw in work time and it would appear not to do so at the mine site. That arrangement only lasted some six weeks, after which Mt Arthur indicated to the CFMEU that it could again hold the draw on site. 20 Representatives of the CFMEU Lodge would conduct the draw. Often, representatives of management would be in attendance at the draw.21 If there were production, mechanical and electrical employees in the group that was starting, there would be three separate draws undertaken. Which list they went on depended on what they were employed as. If it was as a production employee, they would go onto that seniority list, although it may be that such an employee had an electrical or mechanical trade certificate.22 In this respect, I also note the evidence of Mt Arthur that service persons in the production stream do not need to have a trade qualification, although in fact a number of the service persons do.23

[58] The seniority lists identify the name of the employee, their start date and their seniority number.

[59] I find that the existence of the lists and their role to nominate the seniority of employees in the three work streams was well known by management at the mine. I find the existence of the lists and their function was a common understanding of employees, the CFMEU and Mt Arthur management. None of the three lists have ever contained any reference to any subset of employees within them, or to any subset of the trades or occupations of those employees.

[60] During negotiations for the 2004 agreement, Mt Arthur representatives said that the company did not want seniority to apply for the purposes of redundancy. The employee representatives on the negotiating committee rejected that proposal. Mt Arthur then proposed that seniority should not be on the basis of length of service in the production and engineering streams, but should be by reference to the sub-streams contained within the work model in the then enterprise agreement. It proposed that seniority would be applied on the basis of the sub-streams of mining, CHPP, service, mechanical and electrical. 24

[61] Notes of meetings held in respect of the negotiations and copies of draft proposed enterprise agreements were in evidence. The documents reflect proposals by Mt Arthur that seniority should apply by reference to the abovementioned five streams. The wording suggested by the company to go into the reduction in hands clause was “in the respective streams being Mining; CHPP; Service; Mechanical; Electrical according to length of service…”. 25 This was rejected by employees and the CFMEU’s counterproposal was that there should be three streams only: production, mechanical engineering and electrical engineering. Mt Arthur accepted that proposal. The upshot of this was that the reference in the 2001 agreement reduction in hands clause to the “the respective Production or Engineering stream” was then changed to read, in the 2004 agreement, “the respective Production stream, Mechanical and Electrical Engineering streams”.26

[62] In the 2008 negotiations, the company's preference was to remove reliance on seniority lists. 27 Other than Mr Murrie’s statement that there was no real consideration then given to how the reduction in hands clause would apply, there was no other relevant evidence about the negotiations for the 2008 agreement.

[63] I turn to the negotiations for the Agreement. As part of Mt Arthur’s strategy in the negotiations, it wanted to reduce the impact of seniority on its operations. Mr Murrie said Mt Arthur wanted to focus on a performance-based system and, if there was to be a reduction in jobs, to be able to select employees on the basis of objective criteria other than length of service. Mt Arthur was opposed to the concept of a seniority list operating and the culture which such a list encouraged among employees. 28

[64] I accept that at the time of negotiations for the Agreement, Mt Arthur was not expecting to have to implement the reduction in hands clause. In fact, it had expectations of significant growth and the engagement of more employees.

[65] Mr Drayton said that at the commencement of negotiations for the Agreement, a list of discussion points was given to the CFMEU by the Mt Arthur representatives. One point was described as “Remove gate seniority”. 29

[66] I accept the evidence of Mr Drayton and Mr Prosser that the reduction in hands clause and the associated issue of the role of seniority was discussed on numerous occasions in the negotiations. 30

[67] The CFMEU’s position was that it would not agree to any change to the existing reduction in hands clause with the exception of the introduction first of a voluntary redundancy provision. I find that it is more likely than not that the representatives of Mt Arthur gave a more detailed explanation of their proposed clauses and how they would operate than the company now suggests in its evidence.

[68] I accept the evidence of Mr Drayton and Mr Prosser that representatives of Mt Arthur spoke about the proposals to get rid of gate seniority and the manner in which a reduction in hands should apply. It wanted to be able to select employees on the basis of six skills groups rather than on the basis of the three current streams. 31

[69] I find that in those negotiations there was detailed consideration given to the existing terms of clause 21.1. Mt Arthur first proposed that the clause should be deleted altogether and then, in the alternative, proposed different wording with one proposal incorporating grandfathering of existing employees and a merit-based process for new employees. 32

[70] One proposal of Mt Arthur was put in the form of a marked-up version of the then-existing 2008 agreement. 33 I do not reproduce the specific terms of the proposal, but it is adequate to note that it provided that, should there be a need to retrench employees, expressions of interest for voluntary redundancy would first be sought provided the company did not have to accept an expression from any employee where their skills were required for ongoing mine operations. In the case of forced redundancies, selection would be made on the basis of certain identified criteria which included skills, qualifications, suitability and length of service.

[71] A further company proposal for the reduction in hands clause (dated February 2011) was in evidence. 34 I find this proposal was considered and drafted against a background of a clear and common understanding of how the clause presently operated and the CFMEU’s opposition to its modification. I do not reproduce all of the terms of that clause. It is adequate to note that it proposed the company would first take into account expressions of interest and the skills required for the ongoing operation. Then, in the event forced redundancies were required, no existing employee would be forcibly retrenched until all other employees within their skill group had been retrenched first. In this respect the clause provided that “a seniority list of employees currently employed... will be maintained...”. The clause went on to provide that in order to maintain the required skills following any redundancy program, seniority would be applied within the respective skills groups. The following groups were then listed: “Production, Servicing, CHPP, Mechanical, Fabrication and Electrical”. The clause then provided for the retrenchment of employees not engaged at the date of approval of the agreement and in respect of contractors and supplementary labour.

[72] The employees’ negotiating committee rejected the company’s proposals and Mt Arthur decided to not press any variation to the clause. Clause 21.1 went into the Agreement in its current terms.

[73] It is here convenient to refer briefly to relevant legislation and regulations which impact on the qualifications of employees undertaking maintenance work in mines.

[74] Until around the end of 2014, the Coal Mine Health and Safety Act 2002 (NSW) and the Coal Mine Health and Safety Regulation 2006 (NSW) regulated the qualifications or competency requirements to be held by employees who undertook certain specified functions. 35 In the case of a “qualified mechanical tradesperson”, the requisite “evidence of competence” was a “relevant mechanical trades certificate, or Employment as a mechanical tradesperson at a coal operation for a period of not less than 2 years prior to the commencement of this clause”.36

[75] New legislation and regulations are now in operation. 37 The qualifications to be held to undertake what are called “Statutory Functions” are set out in Schedule 10 to the regulations. Relevantly, in the case of a qualified mechanical tradesperson, it provides the individual nominated must have a “Certificate III in Engineering-Mechanical Trade or an equivalent qualification”.

[76] Mt Arthur's witnesses frequently indicated that boilermakers had a trade qualification that was a fabrication trade and was not a mechanical trade. It now wanted only to have employees with a mechanical trades certificate and Mr Jones said preferably a certificate in Mobile Plant Technology. I note Mr Jones said in his evidence that when he used the term plant mechanic and the term mobile plant mechanic they were interchangeable. 38 Mr Jones gave evidence about a Certificate III in Mobile Plant Technology (or equivalent) and a Certificate of Proficiency in Mobile Plant Technology (or equivalent). I accept his evidence that it appears that none of the 14 boilermakers hold such a qualification.39

[77] It is Mt Arthur’s evidence that none of the boilermakers could readily qualify by virtue of the alternative route to obtain such certification, which would recognise prior learning and require certain minimum periods of work in the maintenance and repair of plant equipment. 40 I am unable to make a finding about whether any boilermakers could readily qualify by the alternative route. However, I do accept that the employees in the “fitters” group who hold a mechanical trade certification will be able to more readily acquire the skills or core competencies the company wants its plant mechanics to have. Their skills more closely align with those of a mobile plant mechanic (or, one assumes, are already at a Certificate III in Engineering - Maintenance level or equivalent classification).41

[78] Mt Arthur’s position is that the core skills required to undertake the work of a plant mechanic were not those skills held by a boilermaker. Mr Kelly had reviewed the boilermaker employee records and held the view that none of the boilermakers had the necessary competencies to perform plant mechanic work.

[79] The evidence establishes that the boilermakers did do some work that the company accepted was described as plant mechanic work. However, it emphasised that the work they did was uncomplicated or was in the nature of trades assistant work to employees who did hold a mechanical qualification. The CFMEU’s witnesses emphasised the range and quantity of work they did which they described as plant mechanic work. I give as an example the evidence of Mr Turner. He commenced employment with Mt Arthur in February 2007. He holds a Certificate III in Engineering - Fabrication. He was approached by a Mt Arthur superintendent and a shift supervisor indicating there was a job going at Mt Arthur for a boilermaker. They said that they wanted someone who had experience in maintenance and servicing. 42 He was given a copy of an advertisement for the position. It was for “Mechanical Tradespersons (Boilermakers)”.43 When he started working, Mr Turner was placed in the mechanical stream. He works on teams with a mix of employees with a range of qualifications. As long as he had worked at Mt Arthur, he worked within a team and he had become experienced in performing mechanical trades tasks.44

[80] Mr Turner had undertaken the role of a “pit fitter”, which role necessitated doing some of the type of work that plant mechanics did. A reference he had from a Mt Arthur superintendent indicated he had undertaken both boilermaker work as well as conducting mechanical repairs to machinery onsite. It indicated that he had extensive knowledge of the mechanical work required to maintain heavy machinery onsite. 45

[81] Similarly, I accept the evidence of Mr Carey that, although he was a boilermaker by trade, he had performed maintenance work on ultra-class haul trucks when he was working as a contractor for Mt Arthur. Mt Arthur decided to insource that work. When interviewed for a job with Mt Arthur, he was informed that it would be exactly the same work as he had been performing for the contractor and that he would go into the mechanical stream seniority list and be guaranteed a “job for life”. 46 Soon after he started, he noticed that there was a seniority list at the entrance to the bathhouse and that his name was placed in what he described as the mechanical stream on that seniority list.47

[82] Mr Carey had made an assessment over random dates between August 2014 and December 2014 of tasks he had undertaken that he said were mechanical tasks rather than boilermaker tasks. It also indicates when he had been put in the store to work and when contractors were brought in to do work he said he could have done.

[83] Mr Seears gave evidence about his assessment of the tasks Mr Turner and Mr Carey had relied upon as showing the amount of maintenance work they had done. 48 He said much of it was either of low complexity and not difficult, was trade assistant type work assisting a fitter or was in fact boilermaker work.

[84] I accept that the boilermakers did mechanical maintenance work both alone and as a member of a team. I am not able, with any confidence, to find how much time they spent or how often they worked alone and unaided on such work. In light of the approach I have taken to the interpretation of clause 21.1, it is not necessary for me to make any further findings about this consideration.

[85] In recent years, the Mt Arthur coal business has been negatively impacted by declining coal prices and a high Australian dollar. Its operating costs were considered high relative to other export coal producers. A decision was made to identify the workforce structure which would best meet the projected needs of the company's operation and to increase productivity by maximising equipment availability and utilisation as well as reducing costs.

[86] Mr Kelly was asked to review the mines maintenance strategy and the manner in which maintenance tasks were undertaken. He undertook this task together with Mr Seears. The review established that Mt Arthur had excess labour for the work that needed to be done. Consideration was given to the specific trades and occupations that were required to perform the maintenance work. A new maintenance organisational structure was proposed. One aspect of it was a reduction of the workforce of contractors and employees. A direct consequence was that 14 boilermaker positions were redundant. The new organisational structure for the maintenance department was adopted by Mt Arthur.

[87] Mr Wagner, Mr Kelly and Mr Seears all said that the work of boilermakers was irregular and/or there was not enough of that type of work that needed to be performed to keep them fully engaged. This meant they were required to perform other work such as assisting mechanical employees. They were unable to perform plant mechanic work themselves other than very basic plant mechanic work. 49

[88] There was a considerable amount of evidence about notifications given to the CFMEU of the decision to introduce the new structure and the consequences it may have for employees. Evidence was given about the many meetings between representatives of the CFMEU and Mt Arthur. Much of this evidence I do not need to summarise. It is not suggested that Mt Arthur failed to comply with its obligations in relation to consultation with the CFMEU and its employees. However, some evidence about what was said in some of these meetings should be referred to.

[89] There was a meeting on 8 July 2014. Copies of presentations made by Mr Wagner and others to the CFMEU were in evidence. I note that in each of the slides concerning maintenance there is no reference to a classification described as “plant mechanic” but rather there is a reference throughout to fitters. There is also a reference to boilermakers within the various maintenance division slides. More importantly, though, I note that slide 18, titled “Reduction in Hands Stream - Confirmation”, refers to both fitters and boilermakers being within the mechanical stream. 50 Slide 21 proposes that the approach in relation to maintenance and electrical stream reductions should be to “apply seniority per trade (fitters; boilermakers; auto electricians and electricians)” and, within those trades, “As per clause 21.1, reductions to be based on seniority”.

[90] Following this meeting, the terms of a communication to be sent to relevant employees was agreed between Mt Arthur and the CFMEU. A document titled “Broadcast Alert” dated 8 July 2014 was sent to employees. 51 It refers to Mt Arthur having proposed that certain employees currently in the production stream would be redeployed. It also refers to a Mt Arthur proposal that employees in certain trades roles would have seniority applied as per their trade “(and not per work stream)” and confirms that the CFMEU had proposed that seniority would be based “on an employee’s current work stream (e.g. mechanical trades or electrical trades)”.

[91] There was another meeting on 14 July 2014. Slides presented at that meeting were in evidence. 52 Slide 7 in that presentation is titled “Company proposed revised approach: Redundancy selection process”. This slide commenced with the comment “We accept union interpretation of clause 21 in the EA (mechanical, electrical and production work streams)-not based on trades within each stream.” The slide went on to note that that position created a “challenge within the mechanical stream...” and made some proposals. The company had proposed there would be voluntary redundancy for boilermakers, as the whole of this group was affected and, once voluntary redundancy for boilermakers was completed, seniority would be applied to make up the balance of the 36 affected employees in the mechanical stream. Boilermakers who remained would be utilised as the company required.

[92] I accept the evidence of Mr Drayton that, in the 14 July 2014 meeting, a representative of Mt Arthur indicated that it had given consideration to the terms of clause 21.1 and accepted the CFMEU interpretation that employees fell within three streams for the purpose of selection for redundancy, and that selection was not based on the trades of employees within each of the streams. 53

[93] Mr Wagner said that slide 7 reflected a company proposal that was on the basis it would accept the CFMEU interpretation of clause 21.1 but that there were also other conditions associated with the proposal. It did not constitute a concession that the company agreed with the CFMEU interpretation of clause 21.1.

[94] A document titled “Broadcast Alert” was issued by Mt Arthur on 18 July 2014. 54 On this occasion, it was not an alert agreed upon with the CFMEU. It refers to the consultation meeting which had been held in relation to “Mechanical and Electrical stream employees” and advised that:

“Mt Arthur Coal has changed its original position and accepted the CFMEU's interpretation of the redundancy clause in the enterprise agreement, which requires that redundancies will be based on length of service (seniority), per stream i.e. Mechanical, Electrical and Production.
Therefore seniority will be used to select the nine affected employees in the Electrical stream.
In the Mechanical stream, the Company proposed offering voluntary redundancies to boilermakers given that it is these roles which are being made redundant. Following this, it was then proposed that the balance of the 36 affected employees in the Mechanical stream will be selected on the basis of seniority, as per the enterprise agreement. The Company is awaiting the CFMEU’s response to this proposal.
...”

[95] Subsequently, Mr Kelly was asked to undertake a further analysis of the maintenance operational structure. The outcome of this was that nine high-voltage electricians, six auto- electricians and four service persons (as well as others) would be made redundant. Mr Wagner referred to the 49 affected positions as plant mechanic positions, although I note in the slide presented to the workforce in November 2014 about this proposal they were referred to as fitter positions. 55

[96] A service person is in the production stream and will generally drive a service truck delivering fuel and oil to vehicles in the field or perform the lubrication service in the workshop. There is no requirement for a service person to have a trade qualification, although, as I have earlier noted, a number of the service persons at Mt Arthur do in fact have a trade qualification. 56

[97] Electricians are in the engineering electrical stream. I accept the evidence given by Mt Arthur about the different qualifications of auto-electricians and electricians. In particular, I accept the evidence given by Mr Wood 57 that an auto-electrician trade qualification is distinct and separate to that of an electrician. Auto-electrician roles are described in his evidence as qualified to install and maintain and repair electrical wiring and computer-based equipment on motor vehicles and earthmoving equipment. The work is predominantly undertaken at extra low voltage of 12 to 24 volts DC. Auto-electricians are not qualified to perform the work of an electrician.

[98] Electricians, on the other hand, will undertake either low-voltage or high-voltage work and can do auto-electrician work. All electricians at the mine must hold both an electrical trade certificate and a Qualified Supervisor Certificate (issued by the Department of Fair Trading). All of Mt Arthur’s electricians have also done an additional one to three day training course assessed through a Registered Training Organisation to be able to perform high-voltage work.

Principles of interpretation

[99] The principles to be applied to the interpretation of an enterprise agreement were considered in the Full Bench decision of Australasian Meat Industry Employees Union v Golden Cockerel Pty Limited. 58 A summary was given at paragraph [41] of the decision in these terms:

“[41] From the foregoing, the following principles may be distilled:

1. The AI Act does not apply to the construction of an enterprise agreement made under the Act.
2. In construing an enterprise agreement it is first necessary to determine whether an agreement has a plain meaning or contains an ambiguity.
3. Regard may be had to evidence of surrounding circumstances to assist in determining whether an ambiguity exists.
4. If the agreement has a plain meaning, evidence of the surrounding circumstances will not be admitted to contradict the plain language of the agreement.
5. If the language of the agreement is ambiguous or susceptible to more than one meaning then evidence of the surrounding circumstance will be admissible to aide the interpretation of the agreement.
6. Admissible evidence of the surrounding circumstances is evidence of the objective framework of fact and will include:

(a) 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;
(b) notorious facts of which knowledge is to be presumed;
(c) evidence of matters in common contemplation and constituting a common assumption.

7. The resolution of a disputed construction of an agreement will turn on the language of the Agreement understood having regard to its context and purpose.
8. Context might appear from:

(a) the text of the agreement viewed as a whole;
(b) the disputed provision's place and arrangement in the agreement;
(c) the legislative context under which the agreement was made and in which it operates.

9. Where the common intention of the parties is sought to be identified, regard is not to be had to the subjective intentions or expectations of the parties. A common intention is 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.
10. 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.”

Consideration

[100] I turn first to consider if the terms of clause 21.1 have a clear meaning or if they are ambiguous.In this consideration, when I refer to “the principle” it is a shorthand reference to the principle of “the last to come the first to go” referred to in clause 21.1.

[101] Mt Arthur submits that the clause is ambiguous. It submits that the words stream or streams are broad and not specifically defined in the Agreement. They are not given any precise or technical meaning by any other part of the Agreement. It submits that the words “in the respective Production stream, Mechanical and Electrical Engineering streams” mean that if a decision is made to retrench an employee in one stream, you look only to seniority in that stream and not across the workforce as a whole. However, the words do not require the employer to apply the “last to come first to go” principle to all employees who are employed in that stream. Mt Arthur submits that it is still able to decide to make redundant and retrench employees in particular classifications, trades or occupations (or classes of work) within a stream and apply the “last to come first to go” principle only to employees in the classification, trade or occupation which the employer has decided it no longer needs, or needs fewer of.

[102] Mt Arthur submits that the effect of the words “in the respective” prior to the reference to the production stream and the mechanical and electrical engineering streams are capable of comprehending more than one type or class of employee within that stream. Similarly, the mechanical and electrical steams are qualified by the word “respective” and comprehend more than one type or class of employee within these streams. It submits the clause does not require the retrenchment of employees according to an undifferentiated production, mechanical engineering or electrical engineering stream.

[103] I do not agree with this construction of the clause. In my opinion, the use of the word “respective” serves only to identify that there are three streams against which the principle is to be applied. It serves to identify that the principle, when applied, is done by reference to employees in one or other of the three streams. It is not, for example, applied against the whole of the workforce on the basis of gate seniority. It is applied by reference to all of the employees who are in the corresponding stream in respect of which the company has decided there will be a reduction in numbers.

[104] Nothing in the words of the clause suggests that there is any further subset of employees by reference to which the principle may be applied. I do not read the clause as accommodating a sub-stream or subdivision of employees by reference to a trade or classification within one of the three streams. The principle is applied to the employees in the stream where hands are to be reduced and then only by reference to the seniority of all of the employees in that stream.

[105] This construction is consistent with the words which follow in that same first sentence of the clause. That is, the principle is applied “according to length of service at the Mt Arthur operation”. That does not suggest the principle is applied according to length of service in a particular trade, classification or occupation which is one of several in a stream.

[106] The fact that the word “stream” or “streams” is not defined in the Agreement matters not. It is clear on the evidence that employees, upon commencement at Mt Arthur and depending on the terms of their contracts of employment, are identified as being engaged in a position that is in one or other of two streams, either production or engineering. In the case of employees engaged in the engineering stream, they are identified, from commencement of employment, as being in one or other of the two sub-streams of maintenance or electrical. The evidence clearly establishes that the terminology of streams and sub-streams has commonly been used by employees, the CFMEU and Mt Arthur.

[107] I agree with the CFMEU’s submission that the clause has a plain meaning. It specifies the principle that is to be applied in the event of the need to reduce hands. It shall be on the basis of “the last to come the first to go”, and be applied by reference to employees in one of the three identified streams. In the case of production employees, although there are three sub-streams commonly known and referred to, clause 21.1 refers only to the whole of the production stream. In production, the principle is applied to employees on the basis of their seniority in the whole of the undifferentiated production stream. In this respect it can be contrasted with the engineering stream where, for the purposes of a reduction in hands, clause 21.1 expressly provides that the principle is to be applied to the two sub-streams.

[108] This construction is also consistent with the title of clause 21 – “Retrenchment”. The clause is better understood as being referable to actual individual employees, not a position being made redundant. The employees are the hands who are to be reduced. This construction allows the clause to operate in the context of the fact, established on the evidence, that upon commencement, employees are allocated a seniority number within the relevant stream in which they are engaged.

[109] In my consideration of whether the words of clause 21.1 are clear, I am able to look to evidence of surrounding circumstances to ascertain if an ambiguity exists. I am also permitted to look at such evidence if, in the alternative to my preferred finding, I was persuaded the clause was ambiguous and susceptible to more than one meaning. In this respect I refer first to the evidence of the negotiations for the 2004 agreement. This evidence was not challenged. 59 It is clear all involved in the negotiations knew the then-existing clause operated by reference only to employees in either the production or the engineering streams. The company wanted the clause to apply by reference to a greater number of streams and identified the five streams it wanted to be in the clause. They were the same as the five work areas, which were referred to by the parties in their negotiations as sub-streams, contained in the work model. This was not accepted and the compromise was to allow the principle, in the case of engineering employees, to be applied by reference to one or other of the two engineering sub-streams of mechanical or electrical. None of the evidence about these negotiations suggests it was contemplated by any of the participants that the principle would be applied by reference to any subset of employees, however they may be described, who may be within these streams.

[110] The existence and role of the seniority lists is also, in my opinion, evidence of surrounding circumstances constituting a common understanding or even a notorious fact which the parties can be taken to have known. I have already referred to these lists when considering if clause 21.1 has a clear or plain meaning. I adopt the same observations here. The lists and their role identified the seniority of employees in the event of a reduction in hands. They do not contemplate that within any of the three lists there is any subset of seniority on the basis of a trade or occupation. The parties had this understanding when, in the negotiation for replacement agreements, they considered whether any variation to the clause would be agreed. The lists constitute evidence of surrounding circumstances and are consistent with the construction of the clause for which the CFMEU contends.

[111] I next turn to the negotiations for the Agreement, which also constitute evidence of surrounding circumstances which may be taken into account in the interpretation of clause 21.1. The proposal of Mt Arthur in the negotiations for the Agreement was to move away from the reference in the reduction in hands clause to selection on the basis of seniority in one of the three identified streams, and to identify skills as one of the factors upon which the company could select employees to be retrenched. Its developed draft contained a proposal for a reduction in hands to operate by reference to skill groups from which employees may be chosen, on the basis of seniority within the relevant skill group. The company documentation and the evidence of discussions establish that the company representatives well understood the manner in which clause 21.1 would operate and wanted it changed so that it could select employees by reference to six skill groups. One of these was “Fabrication”, which had never been expressly identified in the past in the clause or in the seniority lists. Another skill group was “Servicing”, which had never in the past been expressly identified in the clause or in the seniority lists. They had only referred to the one undifferentiated production stream.

[112] I do not accept the company’s evidence that it did not consider how the clause in its current terms would operate; it is just not plausible on the basis of the evidence. Mt Arthur negotiators well knew what the clause meant, and sought to first delete it and then to reword it so that a reduction in hands would not operate by reference to the seniority of employees in the three streams in the clause, but rather by reference to identified trade or occupational groups.

[113] I now consider the context arguments. In this respect, I refer to a number of terms of the Agreement on which the parties relied, which, they submitted, assisted with the interpretation of clause 21.1. I refer first to Appendix 1 to the Agreement.

[114] Mt Arthur submits Appendix 1 provides no assistance in interpreting clause 21.1. It notes that the wording of the appendix makes it clear it is dealing with the topic of training and development and has nothing to do with the subject matter of a reduction in hands. It also submits that the chart in the appendix only lists skills and says nothing about qualifications, certification or classifications of employees. The chart does not refer to a stream and does not assist with the interpretation of clause 21.1, it is submitted.

[115] I accept that the appendix and the chart within it do not refer to streams or the topic of a reduction in hands. I also note that the wording in the appendix changed significantly between the 2008 agreement and the Agreement, although much of the wording remains in the same terms as was contained in the Work Model appendices to the earlier agreements. The change to the wording in the appendix to the Agreement is associated with the Work Model no longer being referred to. However, I do not think the wording in the appendix and the chart is entirely irrelevant to the interpretation of clause 21.1. In this respect, the appendix and chart reflect the parties’ acknowledgement that there are principal work activities at the mine and these, although now described as divisions and subdivisions, are in precisely the same terms as previous agreements had used to describe the streams and sub-streams. The titles of the columns in the chart are exactly the same as in Table A-2 in the 2001, 2004 and 2008 agreements. Some of the core skills and ancillary skills have changed or been renamed, but many remain in the same terms.

[116] I also note that the appendix does not entirely exclude reference to streams. In this respect I note the reference to “Engineering stream employees” in that part of the appendix titled “Skills Accreditation”.

[117] Mt Arthur submitted that I should interpret clause 21.1 in the context of the whole of the terms of the Agreement and, in this respect, referred to clauses 2 and 5.1. Those clauses refer to the need to realise productivity gains and increase flexibly in the use of labour, to reduce operating costs and increase operational efficiency and the need to implement changes to work practices and procedures. I have considered those provisions but nothing in them causes me to alter the interpretation which I believe should be given to clause 21.1.

[118] I next refer to clause 23 of the Agreement. This is an acknowledgment by the parties that there are streams and sub-streams, but more importantly the wording supports a finding that when the parties intended to refer to a trade or classification group within the streams they did so expressly e.g. “service sub-stream”, “service people”, “workshop fitters” and “CHPP technicians”. It supports the CFMEU’s construction of clause 21.1.

[119] Mt Arthur submits that an interpretation which avoids what it described as an absurd and impractical consequence of interpreting clause 21.1 should be adopted by me. It submits it makes no sense for the company to retrench persons who can do a particular function which function continues to be required, and retain in employment persons who cannot do that function. It submits the CFMEU’s construction will result in that outcome and must be seen as contrary to the intention and words of clause 21.1. In support of its submission, Mt Arthur refers to the judgement of Tracey J in Transport Workers Union of Australia v Linfox Australia Pty Ltd. 60 It submits that this decision supports an approach to interpretation so that an interpretation which “accords with business common sense will be preferred to one which does not”.61

[120] On the assumption that such a principle is applicable to the interpretation of enterprise agreements, it is not readily apparent what, in the context of this case, could objectively be taken to be the “business common sense” interpretation to be given to the clause. It cannot be what Mt Arthur subjectively views it to be. There is no suggestion there was a common intention or meeting of minds of the parties in negotiations that this consideration would dictate how the clause would operate. I also expect what the company, in a given factual scenario, considers to be business common sense, may well differ to the CFMEU’s view. This case in fact provides an example. The parties were well apart in their views about, for example, the desirability of the company keeping on the boilermakers who had developed maintenance skills and using them in other areas and/or retraining them. In my opinion, to interpret the clause in the manner for which Mt Arthur contends would in effect require a rewriting of the clause. Such an interpretation is not one I should adopt.

[121] I accept the practical difficulties that the interpretation for which the CFMEU contends visits upon Mt Arthur. Indeed, the CFMEU conceded as much. In this context it submits, however, that clause 21.1 is the deal which was reached between the employee representatives and Mt Arthur. The fact that the occasion has now arisen for the first time for the clause to be applied, and that it causes the employer practical difficulties, is no justification to rewrite it. I agree with this submission. I also think there is some merit in the CFMEU’s submission that the inconvenience or practical difficulties submitted by Mt Arthur have been overstated. 62 This is so at least on the facts in this matter, rather than the theoretical scenarios Mt Arthur cited. However, whether the boilermakers could be utilised in a gainful and useful way is not a finding I need make. My task is the interpretation of what the clause means.

[122] I also think the second sentence of clause 21.1 reflects the parties’ agreement as to the basis upon which there may be a departure from the application of the principle therein. The parties agreed that any modification of the application of the principle would itself need to be the subject of agreement. That is the manner in which the parties would address any operational or practical difficulties with which an application of the first sentence of the clause might be attended. That is the deal which was done and had been done in each of the 2001, 2004 and 2008 agreements. 63 It may have proved to be one the company regrets but that does not warrant an interpretation which would in effect be a rewriting of the clause.

[123] I now turn to the findings I made about the discussions and documentation associated with the July 2014 meetings between the parties when they discussed the redundancies the company had decided would occur and the manner in which they would be implemented. In this respect I have made findings about what was said and what the company put in writing. If it was appropriate to rely on this as evidence of surrounding circumstances, I would find it supports my preferred construction of clause 21.1. However, it appears it may not be permissible for me to take account of this evidence if it constitutes conduct of the parties which occurs after an industrial instrument is made. That is, in those circumstances, I cannot use this evidence as an aid to my interpretation of clause 21.1. 64

Conclusion

[124] For the reasons I have given, I resolve the two disputes, the subject of this decision, by deciding that the construction of clause 21.1 for which the CFMEU contends is correct.

SENIOR DEPUTY PRESIDENT

Appearances:

R Warren of counsel and B Rauf of counsel with A Morris for Mt Arthur Coal Pty Ltd.

K Endacott and M Howard for the Construction, Forestry, Mining and Energy Union.

1 [2011] FWAA 3302, print PR509945, agreement ID AE885861.

2 The AMWU and CEPU are also covered, but did not participate in this matter.

3 This dispute is matter no. C2014/6428.

4 Mt Arthur 1 (statement of agreed facts), para 10.

5 This dispute is matter no. C2014/7835.

6 Print PR908840, agreement ID AG810408.

7 Clause 4.0 of the 2001 agreement refers to a 1998 agreement it was to replace.

8 The definitions clause does not have a clause number.

9 Print PR953513, agreement ID AG837600.

10 The only difference is that it only refers to Mt Arthur. The definitions clause does not have a clause number.

11 Agreement ID AC314119, Workplace Authority ID CAUN084807946.

12 This clause is reproduced at paragraph [31].

13 The definitions clause does not have a clause number.

14 See paragraph [31] for the terms of the clause.

15 PN1101-PN1111.

16 PN3338.

17 CFMEU 2, paras 11-12; PN2187-PN2195; CFMEU 8, paras 13, 16.

18 PN2160-PN2200.

19 PN2217-PN2221.

20 CFMEU 8, paras 17-18.

21 CFMEU 2, paras 24-27; CFMEU 8, paras 7-11, 15.

22 See e.g. CFMEU 8 (statement of Mr Prosser), para 2.

23 Mt Arthur 8, para 2.

24 CFMEU 6, para 10.

25 CFMEU 6, attachment SEM 8.

26 CFMEU 6, paras 10-21.

27 Mt Arthur 6, para 10.

28 Mt Arthur 6, paras 7, 9-10.

29 CFMEU 2, para 34.

30 CFMEU 2, paras 35-46.

31 CFMEU 2, paras 31-46; CFMEU 8, paras 28-31.

32 PN630, PN664.

33 CFMEU 2, annexure JMD 8.

34 CFMEU 8, annexure SP2.

35 Coal Mine Health and Safety Act 2002 (NSW) s.125; Coal Mine Health and Safety Regulation 2006 (NSW) reg.162.

36 Coal Mine Health and Safety Regulation 2006 (NSW) reg.162.

37 Work Health and Safety (Mines) Act 2013 (NSW); Work Health and Safety (Mines) Regulation 2014 (NSW).

38 PN919-PN920.

39 The relevant qualification for a boilermaker is a Certificate III in Engineering-Fabrication Trade (or equivalent).

40 Mt Arthur 7, para 16; PN921-PN928.

41 PN1485-PN1514.

42 CFMEU 7, paras 6-9.

43 CFMEU 7, annexure LT1.

44 Ibid, paras 25 to 28.

45 CFMEU 7, annexure LT3.

46 CFMEU 5, paras 11 to 17.

47 Ibid, para 22.

48 Mt Arthur 11 and Mt Arthur 12.

49 Mt Arthur 4 paras 19 and 26, Mt Arthur 9 paras 14-16.

50 Mt Arthur 4 paras. 24 and 25, annexure XW7 slide 18.

51 CFMEU 2, annexure JMD 12.

52 Mt Arthur 4, annexure XW8.

53 CFMEU 2, para 53.

54 CFMEU 7, LT8.

55 Mt Arthur 4, paras 31-32 and annexure XW10, page 116.

56 Mt Arthur 8, para 26.

57 Mt Arthur 5.

58 [2014] FWCFB 7447.

59 The evidence of Mr Mepham was not challenged.

60 [2014] FCA 829 (unreported).

61 Ibid, para 34.

62 Another example Mt Arthur relied on was the need for licensed shot firers, although I note the explanation about this given by Mr Drayton at PN2362.

63 Albeit in the 2001 and 2004 agreements any such arrangement reached would be between the company and the union and that arrangement would bind union members. In the 2008 agreement and the Agreement, the arrangement is one reached between the company and appropriate employee representatives.

64 Essential Energy v ASU & Ors[2015] FWCFB 1981, para [39].

Printed by authority of the Commonwealth Government Printer

Mt Arthur Coal Pty Ltd v Construction, Forestry, Mining and Energy Union

[2015] FWC 4352

30 JUNE 2015

DECISION