National Union of Workers v GrainCorp Operations Limited

[2015] FWC 5117

[2015] FWC 5117

FAIR WORK COMMISSION

DECISION

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

National Union of Workers
v
GrainCorp Operations Limited
(C2015/4130)

VICE PRESIDENT WATSON MELBOURNE, 31 JULY 2015

Dispute concerning 24 hour coverage of shipping at terminal – Provisions of GrainCorp Operations Ltd. (Sunshine, Portland & Geelong) and National Union of Workers Comprehensive Agreement 2013 – Whether provisions require company to roster employees on specific shift arrangements when 24 hour coverage is required for shipping purposes – Fair Work Act 2009, s.739.

Introduction

[1] This dispute concerns an application for the Fair Work Commission (the Commission) to deal with a dispute. The application is made by the National Union of Workers (the NUW) under s.739 of the Fair Work Act 2009 (the Act) and concerns employees employed at the Portland terminal of GrainCorp Operations Limited (GrainCorp). The dispute relates to a provision of the GrainCorp Operations Ltd. (Sunshine, Portland & Geelong) and National Union of Workers Comprehensive Agreement 2013 (the Agreement) which concerns 24 hour coverage of ship loading at terminals.

[2] The matter was listed for conference on 5 June 2015 and a further report back on 17 June 2015. The parties were unable to reach an agreed resolution and the NUW requested that the matter be listed for arbitration. At the hearing Mr A. Snowball appeared for the NUW and Mr R. West, of counsel, appeared for GrainCorp.

Background

[3] GrainCorp is engaged in the storage, handling and distribution of cereal grains at a number of terminals in Victoria. The main work that is undertaken by the Geelong and Portland terminals is the loading of ships with grains and woodchips for export. It is a priority that ship loading occurs expeditiously so that the amount of time a vessel spends in dock is minimised. In order to load ships as quickly as possible, GrainCorp operates 24 hours a day when loading ships. Given that ship loading is not an everyday occurrence, GrainCorp engages casual employees to supplement its labour when loading a ship.

[4] The disputed clause is contained in the shift work clause of the Agreement. Because it is necessary to interpret it in context and to consider its interaction with other relevant provisions it is appropriate to set out the clause in full. Clause 20 provides:

“20. SHIFT WORK

In the event that shift work needs to be introduced at the Portland, Geelong and Sunshine Terminal, the following shall apply:

20.1 Definition of Shift Work

Afternoon Shift- any rostered shift finishing after 7:00 pm and at or before midnight

Night Shift- any rostered shift finishing after midnight and at or before 6.00am

An afternoon or night shift may be extended beyond the finishing times (as described above) in order to finish a task. In such circumstances, any additional hours would be paid as overtime and would be subject to consent by employees in accordance with reasonable overtime requirements.

20.2 Implementation of Shift Work

The Company shall have the right to require any employee to work in shifts where, in the opinion of the Company it is not reasonably practicable to carry on the operations of the Company without such shift work.

20.3 Shift Work -Ordinary Hours

The ordinary hours of work for a shift worker shall be 38 per week averaged overthe one complete cycle of the roster. A shift shall not exceed eight hours.

20.4 Payment for Afternoon Shift

Employees engaged on shift work while on afternoon shift shall be paid an allowance at the rate of 20 per cent of their ordinary time rate for all hours worked, but not while on day shift.

20.5 Payment for Night Shift

Employees engaged on shift work while on night shift shall be paid an allowance at the rate of 30 per cent of their ordinary time rate for all hours worked, but not while on afternoon or day shift.

20.6 Shift Work Rosters

20.6.1 Employees shall be given 24 hours notice prior to the altering or changing of a normal shift.

20.6.2 An employee who has not worked a complete twenty-day four-week cycle shall receive pro-rata accrued entitlements for each day worked or regarded as having been worked in such cycle payable for the rostered day off or in the case of termination of employment on termination.

20.6.3 Employees required to work shift work - An employee when required to work shift work will be provided with one complete working week of work (minimum) on that shift. (or less by mutual agreement between the employer and employee)

20.7 Twenty-Four Hour Coverage - Shipping at Geelong and Portland Terminals.

In the event that twenty four hour coverage is required for shipping purposes at the Geelong and Portland Terminals, the following shall apply:

20.7.1 Where the Company requires an employee to work a thirteen and a half hour shift during the day for shipping purposes, that employee shall be paid eight hours pay at ordinary time and five and a half hours at double time. Actual start and finish times shall be determined and varied by local agreement between the parties, with the "hot seat change over" principle remaining.

20.7.2 Where the Company requires an employee to work an eleven hour shift, during the night for shipping purposes, that employee shall be paid eight hours pay at ordinary time with 30 per cent shift loading and three hours pay at double time. Actual start and finish time shall be determined and varied by local agreement between the parties, with the “hot seat change over"” principle remaining.

20.8 Utilisation of Maintenance Personnel in BGW role

Where the Company at their Geelong and Portland sites require terminal operations to continue and there is no skilled BGW's on shift, or available via call-in, this includes skilled casual employees, to perform a particular skilled operational task that will ensure the ongoing daily operation of the site, then Maintenance Personnel may undertake the operational task until replaced by a skilled BGW.”

[5] For a number of years, when a ship is in port, GrainCorp commonly operates a 24 hour operation. At Portland, employees have been required to work a 13.5 hour day shift and an 11 hour night shift. Employees required to work these shifts are paid in accordance with sub-clauses 20.7.1 and 20.7.2. In Geelong, because of differences in scale, frequency and labour availability, GrainCorp traditionally operates three 8 hour shifts for ship loading over the 24 hour period.

[6] In April 2015, GrainCorp advised employees at the Portland terminal that it intends to change the usual shift arrangements to reflect the practice at the Geelong terminal. Hence employees would be required to work an eight hour shift arrangement. The NUW contends that this change has left a number of employees financially worse off and that the Agreement requires GrainCorp to roster employees on one of the two shifts provided for in clause 20.7. It submits that GrainCorp is presently in breach of the Agreement as a result of the change by rostering 8 hour shifts.

[7] The parties have agreed that the dispute is to be determined by answering the following question:

“Does the GrainCorp Operations Ltd. (Sunshine, Portland & Geelong) and National Union of Workers Certified Agreement 2013 require GrainCorp to roster employees on one of the two shift arrangements specified at clause 20.7.1 and 20.7.2 when twenty four hour coverage is required for shipping purposes?”

[8] The dispute involves a disputed interpretation of a clause of the Agreement and ultimately must be resolved by reference to the proper meaning of the clause.

Jurisdiction

[9] The dispute comes to the Commission by way of the dispute settlement clause of the Agreement. This clause provides:

“14. PROCEDURES FOR THE AVOIDANCE OF INDUSTRIAL DISPUTES

14.1 Any dispute or claim (whether any such dispute or claim that arises out of the National Employment Standards (NES), the operation of this Agreement or not) as to the wages or conditions of employment of any and its employees shall be settled in the following manner:

14.1.1 The matter shall first be discussed between the aggrieved employee and his/her supervisor.

14.1.2 If settlement is not reached the matter shall be discussed between the employee and his/her representative, which can be a site union delegate, and the site manager or other appropriate officer of the Company.

14.1.3 If not settled the matter shall then be discussed between a more senior employee representative such as the Union's site Organiser and the appropriate representative of the Company.

14.1.4 If agreement is not reached, the matter may then be discussed between a representative of the head of the office of the company and the State Secretary of the Union where appropriate.

14.1.5 If the matter is still not settled it shall be submitted to FWA, for conciliation and if necessary, arbitration.

14.1.6 Until the matter is determined, the status quo will prevail.

14.1.7 Powers of FWA under the disputes procedure. If arbitration is necessary the parties agree that FWA shall have the power to do all such things as are necessary for the just resolution or determination of the matter in dispute. This includes the exercising of procedural powers in relation to directions, hearings, witnesses, evidence and submissions which are necessary to make the arbitration effective.

14.1.8 Should during the life of the Agreement FWA be replaced by a successor body, the rights conferred within this Agreement shall be conferred onto the successor body.

14.1.9 In accordance with this clause, where so requested by an employee, the NUW may represent the employee in discussions with the Company in relation to issues including but not limited to disciplinary procedures and drug and alcohol policy. This right to represent does not limit the right of the company to direct questions to an employee and to receive a response from an employee.”

[10] The range of disputes that can be progressed under this procedure and ultimately brought before the Commission for arbitration is very broad. The parties agree that the Commission has jurisdiction to arbitrate this dispute. I accept that this is the case.

Principles of interpretation

[11] The principles for interpreting terms of enterprise agreements are well established and were recently summarised by a Full Bench of the Commission as follows 1:

“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.”

[12] I will apply these principles to the interpretation of the Agreement.

Interpretation of the Agreement

[13] Clause 20.7 of the 2013 Agreement has existed in substantially the same form in predecessor agreements in relation to the Geelong terminal since at least 1998. The clause was expanded in 2009 to cover the Portland terminal and renumbered as a result of other changes to the Agreement. Until 2009 the clause was confined in its operation to the Geelong terminal. The current clause is set out in full above.

[14] The NUW submits that clause 20.7 of the Agreement is clear and unambiguous. The NUW views the clause as primarily governing the nature of shifts that can be worked when 24 hour shift arrangements are required for shipping purposes. It contends that it provides for two pre-requisites. First, 24 hour coverage is required, and secondly, that this is for shipping purposes. The NUW submits that if the two prerequisites are satisfied, the shift arrangements contained in sub-clauses 20.7.1 and 20.7.2 are required to be applied by application of the words “shall apply” in the preamble to the clause. It submits that the Commission is required to interpret the clause in accordance with its plain and ordinary meaning, and that there is no alternate way in which this clause can be interpreted.

[15] In relation to the context of the clause in dispute, the NUW notes that clause 20.7 is a sub-clause of clause 20 of the Agreement which contains various shift work provisions. It submits that clause 20.7 is separate and distinct from the general shift work provisions which are contained at clauses 20.1 to 20.6 of the Agreement as it is designed to provide a distinct set of shift arrangements that operate as a code in the specified circumstances. The NUW contends that the words in the Agreement cannot be read down as this would mean that the clause would have no purpose and no work to do, and therefore no reason for being included in successive enterprise agreements.

[16] The NUW submits that it is relevant that during negotiations for the current Agreement (and prior to and subsequent to the negotiations) the parties were adhering to the requirements of clause 20.7 – that is that, for a period of approximately 20 years, the shifts were being performed as described by sub-clauses 20.7.1 and 20.7.2 and GrainCorp had acted as though it was bound by the clause. Evidence was given in support of such shift arrangements by Mr T. Smith, NUW delegate, and Ms B. Jacobi, NUW Lead Organiser. The union contends that this fact was known by all parties during negotiations for the Agreement and formed part of the objective framework of facts underpinning the making of the Agreement. Despite this, there was no change to the wording of clause 20.7 in the new Agreement. The NUW submits that this indicates that the objective intention of the parties when making the Agreement was for clause 20.7 to remain unchanged and for it to continue to be applied in the manner in which it had previously applied, that is by way of rosters comprising only 13.5 day shifts and 11 hour night shifts.

[17] The NUW also submits that it is relevant that during the negotiations for the current Agreement, GrainCorp sought to introduce shift arrangements that would see employees working three 8 hour shifts when 24 hour coverage was required for shipping purposes and that this claim was later withdrawn by the company. Evidence was given by Ms B. Jacobi in relation to these circumstances. The NUW submits that it is illogical that GrainCorp would make a claim to introduce such an arrangement into the Agreement if they believed that they already had the ability to do so under the Agreement and that GrainCorp’s assumption that it would have the ability to roster employees on a three shift arrangement is not relevant.

[18] GrainCorp adopts a different interpretation. It submits that the purpose of the clause is to provide for particular payments in prescribed circumstances. On its construction the preconditions for payments to be made in accordance with sub-clauses 20.7.1 and 20.7.2 are that employees first be required to work on a 24 hour basis for shipping purposes, and secondly the relevant employee is required by GrainCorp to work a 13.5 or 11 hour shift. If both preconditions apply then the payments provided by the clause are payable in lieu of the overtime payment regime in clauses 18 and 19. GrainCorp contends that if employees are not engaged in the manner provided for in the clause then it has no application. It submits that the clause does not regulate the length of shifts that can be worked. The terms of the Agreement permit shifts of varying lengths to be rostered by the Company at its discretion and the clause does not modify this right.

[19] In support of its position, GrainCorp relies on evidence given by Mr C. Cochrane, GrainCorp Victorian Ports Manager, that the company has consistently used three 8 hour shifts to achieve 24 hour coverage for shipping purposes at the Geelong terminal and that it is only where there are insufficient employees available that employees are rostered on 13.5 or 11 hour shifts. The company submits that to impose such a requirement as suggested by the NUW’s interpretation of the clause would effectively rewrite the clause to require it to roster employees only on 13.5 or 11 hour shifts.

[20] GrainCorp submits that in order for the conduct of the parties to impact on the construction of the Agreement, there must be clear and positive evidence that the parties have acted upon a common understanding and that there is no such evidence available here. It argues that evidence of the conduct by the parties after the clause was agreed upon, as far back as 1998, is not relevant to the objective intention of the parties in the making of the current Agreement and that there was no mutuality in relation to clause 20.7 during negotiations. It submits that the evidence of negotiations concerned a company claim for a different purpose which has no bearing on the interpretation of the clause. As no changes were made to the clause the only mutual intention was that the pre-existing meaning be retained.

[21] The starting point in interpreting the clause must be the ordinary meaning of the words of the clause itself. The wording does not incorporate a limitation on the types of shift that can be worked or the lengths of shifts that the company can roster. There is a precondition in the preamble premised by the words “In the event that…” There is a further set of preconditions in each sub-clause premised by the words “Where the Company requires…” If the first precondition and one of the second set of preconditions are also met, an obligation arises to make the relevant prescribed payment. If the preconditions are not met, the clause does not modify the effect of the other shift work and overtime provisions of the Agreement. In my view it is not possible to read into the clause a notion that the company is precluded from adopting different shift lengths to those set out in the second set of preconditions.

[22] The context of the clause supports this interpretation. It provides the company with the right to require shift work to be worked where it is not reasonably practical to carry on the operations otherwise. In so doing it does not limit the length of shifts except in relation to ordinary hours. Shift hours that exceed the weekly average or the daily maximum ordinary hours in clause 20.3 are payable at overtime rates in accordance with clauses 18 and 19. Clause 20.7 is an exception to this general approach. It requires a more generous overtime regime for the particular shifts that are specified. The clause performs a function that is logical and understandable.

[23] I do not consider that the clause can be described as ambiguous - or that it is an available interpretation to read it as limiting the lengths of shifts that can be worked when 24 hour operations are required. Recourse to the history supports the interpretation based on the ordinary meaning. The clause has applied at Geelong far longer than it has applied at Portland. Eight hour shifts have been worked at Geelong under the clause without the contention being raised that this constitutes a breach of the clause. The history of negotiations does not disclose any relevant evidence of contrary mutual intention.

Conclusion

[24] In my view, the answer to the question requires the words in the clause to be given their ordinary meaning. That meaning, as explained above requires the dispute to be determined by answering the agreed question as follows:

Question:

“Does the GrainCorp Operations Ltd. (Sunshine, Portland & Geelong) and National Union of Workers Certified Agreement 2013 require GrainCorp to roster employees on one of the two shift arrangements specified at clause 20.7.1 and 20.7.2 when twenty four hour coverage is required for shipping purposes?”

Answer:

No.

VICE PRESIDENT

Appearances:

Mr A. Snowball for the National Union of Workers.

Mr R. West, with Ms K. Lehane, for GrainCorp Operations Limited.

Hearing details:

2015.

Melbourne.

28 July.

Final written submissions:

The National Union of Workers on 17 July 2015

GrainCorp Operations Limited on 24 July 2015.

 1   [2014] FWCFB 7447.

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