National Union of Workers v Parmalat Australia Pty Ltd
[2018] FWC 3799
•3 JULY 2018
| [2018] FWC 3799 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.739 - Application to deal with a dispute
National Union of Workers
v
Parmalat Australia Pty Ltd
(C2018/262)
DEPUTY PRESIDENT MASSON | MELBOURNE, 3 JULY 2018 |
Application to deal with contraventions involving dismissal Alleged dispute about any matters arising under the enterprise agreement and the NES;[s186(6)].
Background to dispute
[1] On 16 January 2018, the National Union of Workers (NUW) applied to the Fair Work Commission (the Commission) to deal with a dispute pursuant to s 739 of the Fair Work Act 2009 (the Act) under the dispute resolution procedure at clause 43 of the Parmalat Australia – Rowville – TWU/NUW Enterprise Agreement 2017 –2020 (the 2017 Agreement). 1 The Respondent in the matter is Parmalat Australia Pty Ltd (Parmalat).
[2] Parmalat is engaged in the production and distribution of dairy products for the Australian domestic and international markets. The dispute concerns employees who are employed at the Rowville site and are covered by the 2017 Agreement.
[3] The dispute concerns the proper construction of clauses 19.3 and 19.7 of the 2017 Agreement and the circumstances in which Parmalat is required to give permanent employees the “first opportunity of reasonable overtime” prior to the engagement of casuals where there is an “excess work requirement.”
Jurisdiction
[4] Section 739 of the Act empowers the Commission to deal with certain disputes under enterprise agreement dispute settlement terms. The 2017 Agreement contains such a term which is clause 43 Dispute Prevention and Settlement. The relevant sub-clauses going to the jurisdiction of the Commission in the settlement of disputes are as follows:
“43. DISPUTE PREVENTION AND SETTLEMENT
43.1. Where possible issues in dispute or grievances in relation to the Agreement or the NES will be resolved between the employees and management at the premises of Parmalat.
43.2. When required, the job delegate and appropriate company representative will assist in resolving of the dispute.
43.3. If the matter remains unresolved, it may be referred to the Consultative Committee for resolution.
43.4. Should issues remain unresolved; the appropriate union official and company representatives will then become involved.
43.5. If the matter remains unresolved then it shall be referred to Fair Work Australia for conciliation and, if necessary, arbitration.
43.6. Without prejudice to either party, work should continue in accordance with this agreement while the matters in dispute are being dealt with and the status quo will prevail.
43.7. Disputes over the interpretation or application of this agreement which cannot be resolved by agreement of the parties, will be determined by Fair Work Australia.”
[5] It was not contested that the question to be determined by the Commission was capable of constituting a dispute over the interpretation or application of the 2017 Agreement. Nor was it in dispute that the steps taken by the parties to resolve the dispute constituted compliance with the dispute resolution provision of the Agreement. Having regard to the information in the Form F10 application and the views of the parties, I am satisfied that the Commission has jurisdiction to deal with the dispute, including by arbitration.
[6] Conciliation before the Commission did not resolve the dispute and the matter is now to be determined by the Commission by arbitration.
The hearing
[7] The matter was listed for hearing on Tuesday, 12 June 2018, in advance of which the parties were required to file statements and material on which they intended to rely.
[8] The NUW was represented by Mr Dominic Melling. Mr Ben Cooper of Livingstones sought permission to appear on behalf of Parmalat. That application was considered and granted by the Commission pursuant to s 596 of the Act.
Issue for arbitration
[9] The question to be determined by the Commission is as follows:
“Does the term “excess work requirements” as expressed in the definition of overtime at clause 19.7 of the 2017 Agreement mean those additional shifts required to be filled that are over and above the coverage requirements for normal rostered shifts?”
[10] The determination of the matter turns on the proper construction of overtime provisions found at clause 19 of the 2017 Agreement and specifically sub-clauses 19.3 and 19.7. Clause 19 is reproduced below:
“PART 4- OVERTIME-WHERE 10 ORDINARY HOURS, OR LESS, IS WORKED
19. STANDARD PROVISIONS
19.1. Parmalat may require employees to work reasonable overtime, provided that employees will not be rostered to work more than 12 hours on any one day. Overtime shall be paid for all hours worked on the instruction of Parmalat in excess of ordinary hours and shall be calculated on the basis of the employee's ordinary hourly base pay.
19.2. Except in the circumstances covered by clause 19.3 and 19.4 of this Agreement, overtime shall be paid as follows:
• Monday to Saturday inclusive - time and a half for the first two hours and double time thereafter
• Sunday - double time.
• Or as per Clause 14.5
19.3. Where an employee is called in to work overtime on a non-working day, they shall be paid for a minimum of four hours as follows:
• Monday to Friday inclusive - time and a half for the first two hours and double time thereafter
• Saturday- double time for the first 4 hours, then double time and one half
• Sunday - double time and a half.
Permanent regular employees will have the first opportunity for "reasonable levels" of overtime in their normal work area of the business.
Reasonable overtime, where required, should be offered on a fair and equitable basis, taking into account the required skills along with: - Safety, health, welfare and work /life balance.
Whilst it is acknowledged that full time employees have the first option, with regard to overtime, it is emphasised that excessive overtime levels should not be the result for individual employees. The safety health and welfare of our workforce is paramount and excessive overtime levels may jeopardise Parmalat’s legal and moral obligations in this regard.
19.4. Call-Back : An employee recalled to work overtime after leaving Parmalat premises (whether notified before or after leaving the premises) shall be paid for a minimum of four hours at the rate set out in clause 19.3 for each time the employee is so recalled; provided that Parmalat may, at its discretion, not require the employee to work the full four hours if the job the employee was recalled to perform is completed within a shorter period and there is no other useful work for the employee to perform.
This sub clause shall not apply in cases where it is customary for an employee to return to Parmalat premises to perform a specific job outside the employee's ordinary working hours or where the overtime is continuous (subject to a reasonable meal break) with the completion or commencement of ordinary working time.
Overtime worked in the circumstances specified in this sub-clause shall not be regarded as working time for the purpose of clause 9.1.
A 15 minutes break will be observed during the 4 hour call back unless a shorter working timeframe is required.
19.5. Any employee required to work more than 8.6 hours on any day which Includes more than sixty minutes overtime shall be paid, In addition to the overtime payable, a meal allowance of $12.67.
19.6. Overtime Allocation Guidelines
Parmalat will address employees with excessive absenteeism and/or a clear pattern of absenteeism e.g. Excessive single day absences.
If an employee brings a carer's certificate, and has a good record of attendance, they will be considered equally for an opportunity (where available) to work overtime in the week of the absence.
19.7 Overtime is defined as excess work requirements within a specific area and does not include the coverage of paid personal leave for single day absences (not consecutive).”
The NUW case
[11] The NUW called evidence from the following persons:
Mr Robert Dent – NUW Organiser; and
Ms Mira Radman – Laboratory Technician at Parmalat Rowville site and NUW site delegate.
Evidence of Mr Robert Dent
[12] Mr Dent gave evidence that he has been employed by the NUW as an Organiser since 2006 and has been the site Organiser for the Parmalat Rowville site since February 2017. Mr Dent stated that he was involved in the negotiations that led to the 2017 Agreement.
[13] Mr Dent stated in his evidence that in March 2017 he participated in a meeting at the site with Ms Radman and HR Manager, Mr Luke Donia, to discuss the issue of casual employees being called in to work overtime in preference to overtime being first offered to permanent employees which, in the NUW’s view, was contrary to clause 19.3 of the 2017 Agreement. According to Mr Dent there was no firm outcome from the meeting. 2
[14] Mr Dent gave further evidence that during the negotiations for the 2017 Agreement, Parmalat raised a claim that sought to amend clause 19.3 of the 2014 Agreement by removing the word “first” where it appeared immediately before “opportunity” in the second paragraph of the clause and tendered the relevant minutes from the negotiations. 3 The effect of the claim, if agreed, would have been to remove the requirement for Parmalat to give preference to permanent employees in offering overtime prior to engaging casual employees. According to Mr Dent, the delegates made clear to Parmalat during negotiations that the claim was a “deal breaker” and was subsequently withdrawn by Parmalat.4
[15] Mr Dent gave further evidence that in November 2017 the issue had resurfaced and he again met with Ms Radman, Mr Donia and site manager, Mr David Reid to discuss the issue of casuals being offered overtime rather than permanent employees being given first opportunity.
[16] Mr Dent stated that during the November 2017 meeting, Parmalat sought to clarify the meaning of clause 19.7 of the 2017 Agreement and in what circumstances the “first opportunity” for overtime would be offered to permanent employees. Mr Donia subsequently wrote to Mr Dent on 1 December 2017 detailing Parmalat’s position, which was not accepted by the NUW. The following explanation was provided by Mr Donia in that correspondence:
“As discussed, Clause 19.7 of the Agreement defines overtime in Rowville as excess work requirements within a specific area. Overtime is not offered for coverage of rostered hours, therefore, the first right of overtime does not go to full time employees.
Should there be excess work requirement (i.e. additional volume in the coolroom) where on a shift we require additional hours worked than what is normally rostered, the first right of overtime will go to permanent employees instead of filling that shift with a casual.” 5
Evidence of Ms Mira Radman
[17] Ms Radman gave evidence that she has been employed by Parmalat at the Rowville site since 1998 and has been an elected NUW delegate on the site since 2008. Ms Radman stated that during that period she has been involved in the negotiations for the following enterprise agreements:
• Parmalat Australia – Rowville – TWU/NUW Enterprise Agreement 2011 –2014 (the 2011 Agreement) 6;
• Parmalat Australia – Rowville – TWU/NUW Enterprise Agreement 2014 –2017 (the 2014 Agreement) 7; and the
• 2017 Agreement. 8
[18] Ms Radman gave evidence that the preference of reasonable overtime being offered to permanent regular employees was not a “recent development” and that it pre-dated her involvement as an NUW delegate. She believed it was first included in the enterprise agreement reached in 2002. 9
[19] Ms Radman stated that during the negotiation of the 2014 Agreement, Parmalat had sought to “water down” their obligation to provide “first opportunity of reasonable overtime” before offering work to casual employees. The claim was, according to Ms Radman, resisted by employees and a compromise was reached. Ms Radman gave evidence that the compromise reached was that permanent employees would continue to receive “first opportunity of reasonable overtime” except in the case of covering single day absences for employees on paid personal leave, in which circumstance, Parmalat could engage causals to fill the vacancy without being required to first offer the overtime to permanent employees. 10
[20] Mr Radman described the negotiation of the new clause that was included in the 2014 Agreement during cross examination by Mr Cooper:
“You agree that clause 19.7 was a new clause which changed what had existed beforehand, which was a unilateral first right of overtime?---No, we didn't agree to change that happening currently. How this clause came about if you'll allow me, that was company claimed was sounded exactly how I will say now. Work to be covered with casual for all pre-planned overtime, which they meant annual leave or long sick leave, which meant then we're going back to members that was out of question, they would never agree with that. Then like during the negotiation they company tried to water it down so it was like can we have them three days, that was talk, only like if someone call for sick for three days, then two days, we didn't agree because every time we would go back to members and then come back to negotiating table. And then in the end we agreed only if it is one day sickie and if they - that they can call casual only for one day sick absence. And then they said Linda was involved then as the HR. I mean that wouldn't be like, you know, practical anyway because lots of departments - machine operators lab you can't call casual just for one day because they don't have you know experience, expertise to just fit in for shift. So, you know, - - -
So you had those discussions and then clause 19.7 was drafted. Is that right?---Yes, that came in that context just to allow company to call casual for one day absence sick leave, that was it.” 11
[21] Ms Radman stated in her evidence that the issue of Parmalat engaging casuals without giving permanent employees “first opportunity of reasonable overtime” first emerged in late 2016 when the issue was raised with her by NUW members. The issue was subsequently escalated to a meeting with Mr Donia in March 2017 but remained unresolved at the conclusion of the meeting. From March to September 2017, Ms Radman stated that the issue appeared to have been fixed but re-emerged in September 2017 shortly after the ballot to approve the 2017 Agreement. A meeting conducted with Mr Dent, Mr Donia and Mr Reid failed to resolve the dispute and Mr Donia subsequently confirmed Parmalat’s interpretation of clauses 19.3 and 19.7 in the correspondence to Mr Dent on 1 December 2017. 12
[22] Ms Radman supported Mr Dent’s evidence that Parmalat sought changes to clause 19.3 during bargaining for the 2017 Agreement, which if agreed, would have removed the requirement for “first” opportunity for reasonable overtime to be provided to employees prior to engaging casuals. She confirmed that the claim was withdrawn by Parmalat during the negotiations when NUW representatives confirmed their opposition to any changes. 13
NUW Submissions
[23] The NUW submit that the meaning of clauses 19.3 and 19.7 is clear and unambiguous. They submit that the definition of overtime in clause 19.7 is for the purpose of the operation of clause 19.3 and that “excess work requirements within a specific area” in clause 19.7 refers to all situations where there is more work required to be performed than available labour for such work. This includes work that may otherwise be offered to casuals at ordinary time rates of pay. According to the NUW, the existence of “excess work requirements” requires that permanent employees be offered overtime prior to casuals being engaged. The NUW submit that the only limitations to the “first opportunity” of overtime obligation under clause 19.3 are that:
(1) The “excess work requirements” must be within an employee’s normal work area; and
(2) The obligation to provide “first opportunity” of overtime to permanent employees does not operate in circumstances of covering paid personal leave for a single day absence (non-consecutive); and
(3) The overtime must fall within the scope of the term “reasonable overtime” which includes consideration of health and safety factors.
[24] Subject to the above limitations, the NUW submit that the proper construction of clauses 19.3 and 19.7 requires that “first opportunity” of overtime to permanent employees in the circumstances of an “excess work requirement” must be made prior to casual employees being engaged. The NUW reject the construction advanced by Parmalat that seeks to define “excess work requirements” as only additional production shifts or additional work required over and above the coverage required for absences on normal rostered shifts.
[25] In rejecting Parmalat’s construction, the NUW refer to the plain meaning of the words and the evidence of Ms Radman and Mr Dent regarding the history of the negotiation and operation of the relevant clauses. The NUW submit that inclusion of clause 19.7 in the 2014 Agreement, while falling short of the change sought by Parmalat at the outset of those negotiations, was ultimately agreed and included to enable Parmalat some flexibility. According to the NUW the inclusion of the reference to “single day absences” in clause 19.7 was intended to operate as a specific exclusion to the general obligation to give “first offer” of overtime to permanent regular employees as required under clause 19.3.
[26] The NUW further submit that the objective intention of the parties in earlier negotiations is also evident through the efforts of Parmalat to re-negotiate clause 19.3 during the course of bargaining for the 2017 Agreement. The NUW also refer to the custom and practice, save for the disputes that arose in 2016/2017, which is consistent with the Applicant’s construction.
The Parmalat case
Evidence of Ms Annalise Quint
[27] Ms Quint stated that she is Parmalat’s National Industrial Relations Manager and gave evidence in relation to the negotiation of the 2017 Agreement. She states that one of the claims pursued by Parmalat during those negotiations was that of a provision that would allow permanent part-time employees to agree to “flex” their hours of work up to 38 hours per week. She further states that the union’s concern with the claim was that it would, if agreed, have taken away permanent employees’ first right of refusal of overtime. 14 She also states that Parmalat’s position during the negotiations was that “excess work requirements” was only that work that was beyond the required coverage of ordinary rostered shifts.15
[28] During cross-examination, Ms Quint further clarified the position that Parmalat adopted during the negotiations in relation to the meaning of “excess work requirements”:
MR COOPER: Just quickly, your Honour. Ms Quint, in regards to the evidence that you just gave in relation to item 7 or paragraph 7 of your statement?---Yes.
Are you saying that clause 19.7 which referred to excess work requirements was a point of negotiation between the parties or was it a discussion that was clarifying the interpretation of that clause?---It was a discussion that was clarifying an interpretation of the clause.
So the negotiation was not in regards to clause 19.7 but in regards to clause 19.3?---Yes, that's right. It was specific to the first right of overtime and initially the claim was to remove the first right of overtime and it organically I suppose became a discussion about what is considered to be overtime. So it was a clarification of what Parmalat considered to be overtime for the purposes of 19.7. The claim about the first right was then dropped by Parmalat.
[29] Ms Quint confirmed during cross-examination that she was not involved in the negotiation of the 2014 Agreement.
Parmalat Submissions
[30] Parmalat submit that the plain meaning of words is clear that “work requirements” means those tasks and duties undertaken by employees to meet its regular operating requirements and that “excess” work requirements are those requirements that exceed its regular operating requirements. Consequently, the replacement of employees on leave would not constitute “excess work requirements” pursuant to the definition in clause 19.7 that requires permanent employees to be provided with “first opportunity” of overtime.
[31] Parmalat further submit that the reference in clause 19.7 that overtime “…does not include the coverage of paid personal leave for single day absences” is merely a clarifying example and does not operate to limit the definition of overtime.
[32] Parmalat concedes that “excess work requirements” is not defined within the Agreement nor was there any other documentation available that supported its construction of the term. Parmalat argued however, that the evidence of Ms Radman regarding established work requirements and rosters supported its contention as to the meaning of the terms “excess work requirements”. The following exchange is relevant:
THE DEPUTY PRESIDENT: I take it - no one's drawn my attention to it - excess work requirements is not defined within the agreement elsewhere
MR COOPER: No, it's not.
THE DEPUTY PRESIDENT: Right. Is there any other documentation that you can point me to that - other than the opinion of the company that that would give clarity as to where that - what that term means?
MR COOPER: No, there's no documentation. So we would rely upon what we say is the plain meaning of those words, that there are - - -
THE DEPUTY PRESIDENT: Is excess work intended to be excess work of an individual or excess work of the department?
MR COOPER: Excess work of the department.
THE DEPUTY PRESIDENT: Where does it say that?
MR COOPER: It doesn't say that but it doesn't also say excess work of an individual either.
THE DEPUTY PRESIDENT: No, no, but you say the meaning is clear on its wording and I'm saying there are different meanings that can be drawn from those three words. It could be either on an individual basis and it could be on a departmental basis.
MR COOPER: Well, looking at the evidence that Ms Radman gave - - -
THE DEPUTY PRESIDENT: Yes.
MR COOPER: - - - she indicated that there were established work requirements, that there were established rosters and that those rosters were generally fixed. Now she obviously is talking about her own particular experience as a lab technician but as a site delegate she was able to speak about other areas of the business that she spoke about, how they had fixed rosters from week to week, rotating rosters. We say that the rosters do give evidence as to what are the work requirements, that the company plans its roster arrangements, it knows what those - that level of work requirement is going to be and it plans accordingly through the rosters.
[33] Parmalat accept that prior to the negotiation of the 2014 Agreement, there were no circumstances, other than where the overtime required was excessive, in which it could engage casuals without providing “first opportunity” of overtime to permanent regular employees and that was because clause 19.7 did not exist in agreements prior to the 2014 Agreement.
[34] Parmalat further submit that the insertion of clause 19.7 in the 2014 Agreement and inclusion of the words “excess work requirements” was intended to open up the opportunity to use casuals to fill gaps created by absences on normal rostered shifts. Parmalat was unable to explain why, having secured the flexibility it claims is reflected in its construction of clause 19.7 in the 2014 Agreement, it did not then pursue that greater flexibility until 2016. No evidence was adduced by Parmalat as to the objective intention of the parties in including clause 19.7 in the 2014 Agreement.
Approach to construing enterprise agreement terms
[35] The approach to construing enterprise agreements was most recently set out in a Decision of a Full Bench of the Commission in “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU) v Berri Pty Ltd16 as follows:
“1. The construction of an enterprise agreement, like that of a statute or contract, begins with a consideration of the ordinary meaning of the relevant words. The resolution of a disputed construction of an agreement will turn on the language of the agreement having regard to its context and purpose. Context might appear from:
(i) the text of the agreement viewed as a whole;
(ii) the disputed provision’s place and arrangement in the agreement;
(iii) the legislative context under which the agreement was made and in which it operates.
2. The task of interpreting an agreement does not involve rewriting the agreement to achieve what might be regarded as a fair or just outcome. The task is always one of interpreting the agreement produced by parties.
3. The common intention of the parties is sought to be identified objectively, that is by reference to that which a reasonable person would understand by the language the parties have used to express their agreement, without regard to the subjective intentions or expectations of the parties.
4. The fact that the instrument being construed is an enterprise agreement made pursuant to Part 2-4 of the FW Act is itself an important contextual consideration. It may be inferred that such agreements are intended to establish binding obligations.
5. The FW Act does not speak in terms of the ‘parties’ to enterprise agreements made pursuant to Part 2-4 agreements, rather it refers to the persons and organisations who are ‘covered by’ such agreements. Relevantly s.172(2)(a) provides that an employer may make an enterprise agreement ‘with the employees who are employed at the time the agreement is made and who will be covered by the agreement’. Section 182(1) provides that an agreement is ‘made’ if the employees to be covered by the agreement ‘have been asked to approve the agreement and a majority of those employees who cast a valid vote approve the agreement’. This is so because an enterprise agreement is ‘made’ when a majority of the employees asked to approve the agreement cast a valid vote to approve the agreement.
6. Enterprise agreements are not instruments to which the Acts Interpretation Act 1901 (Cth) applies, however the modes of textual analysis developed in the general law may assist in the interpretation of enterprise agreements. An overly technical approach to interpretation should be avoided and consequently some general principles of statutory construction may have less force in the context of construing an enterprise agreement.
7. In construing an enterprise agreement it is first necessary to determine whether an agreement has a plain meaning or it is ambiguous or susceptible of more than one meaning.
8. Regard may be had to evidence of surrounding circumstances to assist in determining whether an ambiguity exists.
9. If the agreement has a plain meaning, evidence of the surrounding circumstances will not be admitted to contradict the plain language of the agreement.
10. If the language of the agreement is ambiguous or susceptible of more than one meaning then evidence of the surrounding circumstance will be admissible to aide the interpretation of the agreement.
11. The admissibility of evidence of the surrounding circumstances is limited to evidence tending to establish objective background facts which were known to both parties which inform and the subject matter of the agreement. Evidence of such objective facts is to be distinguished from evidence of the subjective intentions of the parties, such as statements and actions of the parties which are reflective of their actual intentions and expectations.
12. Evidence of objective background facts will include:
(i) evidence of prior negotiations to the extent that the negotiations tend to establish objective background facts known to all parties and the subject matter of the agreement;
(ii) notorious facts of which knowledge is to be presumed; and
(iii) evidence of matters in common contemplation and constituting a common assumption.
13. The diversity of interests involved in the negotiation and making of enterprise agreements (see point 4 above) warrants the adoption of a cautious approach to the admission and reliance upon the evidence of prior negotiations and the positions advanced during the negotiation process. Evidence as to what the employees covered by the agreement were told (either during the course of the negotiations or pursuant to s.180(5) of the FW Act) may be of more assistance than evidence of the bargaining positions taken by the employer or a bargaining representative during the negotiation of the agreement.
14. Admissible extrinsic material may be used to aid the interpretation of a provision in an enterprise agreement with a disputed meaning, but it cannot be used to disregard or rewrite the provision in order to give effect to an externally derived conception of what the parties’ intention or purpose was.
15. In the industrial context it has been accepted that, in some circumstances, subsequent conduct may be relevant to the interpretation of an industrial instrument. But such post-agreement conduct must be such as to show that there has been a meeting of minds, a consensus. Post-agreement conduct which amounts to little more than the absence of a complaint or common inadvertence is insufficient to establish a common understanding.”
[36] In CFMEU v Endeavour Coal Pty Ltd T/A Appin Mine,17 a Full Bench of the Commission held that the context of an agreement provision is significant. In this regard, the Full Bench set out the explanation of this point by the NSW Court of Appeal in Mainteck Services Pty Ltd v Stein Heurtey SA,18 emphasising the following matters:
• Until a word or phrase is understood in the light of the surrounding circumstances, it is rarely possible to know what it means 19 and there is always some context to any statement;20
• Language considered in its context will often have a clear meaning and context will often not displace that meaning – “but not always”; 21
• To state that a legal text is clear reflects the outcome of an interpretation process and means that there is nothing in the context that detracts from the ordinary literal meaning and cannot mean that context can be put to one side; 22
• The phrase used by Mason J in Codelfa “if the language is ambiguous or susceptible of more than one meaning” does not mean that the susceptibility of the language to more than one meaning must be assessed without reference to the surrounding circumstances and in order to determine whether more than one meaning is available it may be necessary to turn to context; 23and
• Context has also been described as surrounding circumstances and the meaning of terms normally requires consideration not only of the text, but of the surrounding circumstances known to the parties and the purpose and object of the transaction. 24
[37] The case law in relation to the approach to the construction of enterprise agreements makes it clear that context and purpose are relevant to the construction of provisions in an enterprise agreement and must be considered even where the words of the provision being construed appear, on their face, to have a clear and unambiguous meaning.
Consideration
[38] The issue in dispute in this matter is that of the meaning and effect of the term “excess work requirements” in clause 19.7 of the 2017 Agreement and in what circumstances Parmalat is required to give the “first opportunity” of overtime to permanent regular employees pursuant to clause 19.3 of the 2017 Agreement.
[39] Both parties submit that the clause 19.7 is clear and unambiguous. If the construction advanced by the NUW is found to be correct, then save for the overtime being reasonable and in the normal work area of the employee, the obligation to give the “first opportunity” arises in all circumstances of additional labour being required except in circumstances where coverage for paid personal leave of single day absences (non-consecutive) is required. In that limited circumstance, Parmalat would be able to engage casuals without first offering overtime to permanent employees.
[40] If in the alternative Parmalat’s construction of “excess work requirements” were found to be correct, then the only circumstance in which permanent regular employees would be entitled to “first opportunity of reasonable overtime in their normal work area” would be where additional production shifts or additional work were required to be performed over and above normal rostered shifts. This construction would mean that the coverage of all planned and unplanned employee absences for normal rostered shifts could be achieved by Parmalat through the use of casuals without first offering overtime to permanent employees. The implications in terms of permanent employee overtime costs versus casual employee costs are obvious if not quantified by Parmalat.
[41] It was not contested by the parties that the current clause 19.7 was first inserted into the 2014 Agreement and was retained in similar terms in the 2017 Agreement. The link contended by both the NUW and Parmalat between clause 19.7 and clause 19.3 of the 2017 Agreement requires consideration of the meaning of clause 19.3 and how its construction was impacted by the insertion of clause 19.7 in the 2014 Agreement.
[42] The wording found in clause 19.3 of the 2017 Agreement is identical to the wording found in clause 19.3 of 2014 Agreement, clause 18.3 of the 2011 Agreement and clause 18.3 of the Parmalat Australia – Rowville – TWU/NUW Enterprise Agreement 2008 –2011 (2008 Agreement) 25. The relevant wording is as follows:
“Where an employee is called in to work overtime on a non-working day, they shall be paid for a minimum of four hours as follows:
• Monday to Friday inclusive - time and a half for the first two hours and
double time thereafter
• Saturday- double time for the first 4 hours, then double time and one half
• Sunday - double time and a half.
Permanent regular employees will have the first opportunity for "reasonable levels" of overtime in their normal work area of the business.
Reasonable overtime, where required, should be offered on a fair and equitable basis, taking into account the required skills along with: - Safety, health, welfare and work /life balance.
Whilst it is acknowledged that full time employees have the first option, with regard to overtime, it is emphasised that excessive overtime levels should not be the result for individual employees. The safety health and welfare of our workforce is paramount and excessive overtime levels may jeopardise Parmalat’s legal and moral obligations in this regard.”
[43] The construction of clause 19.3 is clear and would on a plain reading require Parmalat’s permanent regular employees to be given “first opportunity” of overtime or as stated otherwise, the first right of refusal of overtime in their normal work area. The only conditions imposed on the obligation to offer overtime within clause 19.3 are that the overtime must be in the relevant employees’ normal work area and must be reasonable having regard to health and safety considerations. No other conditions are specified within clause 19.3 for the overtime preference to be given to permanent employees, be that coverage of planned or unplanned leave for example or whether additional production requirements require coverage.
[44] While clause 19.3 expresses Parmalat’s obligation to give “first opportunity” of overtime to permanent regular employees in a particular work area subject to health and safety considerations, it does not express to what class of persons such preference operates against. The clause could be read so as to give permanent employees in a particular work area preference of overtime allocation in that work area before such overtime was offered to appropriately skilled permanent employees from another work area. It could also be read as to give preference of overtime allocation to permanent regular employees in a particular work area before alternate labour sources were tapped, such as casual employees or contract labour.
[45] As stated, the 2017 Agreement and its predecessor agreements are silent on the persons to whom the preference for overtime allocation to permanent regular employees operates against. It is common ground, however, between the parties that prior to the 2014 Agreement, clause 19.3 operated so as to require the offer of overtime to permanent regular employees prior to offering such work to casual employees. That practice is consistent with the plain meaning of the clause, in my view, as casual employees, while not specified, fall into that category of persons who are not permanent regular employees.
[46] I am satisfied that, read in isolation from clause 19.7, there is no ambiguity in the meaning of clause 19.3. It operates so as to require (conditional) preference be given to permanent regular employees in a particular work area in the allocation of overtime prior to Parmalat offering that work to other persons, which may include casual employees. I do not believe there is any ambiguity as to the requirement for preference in the overtime allocation to be given to permanent regular employees. In any case, the conduct of the parties and consensus as to its meaning supports the plain meaning of clause 19.3.
[47] I now turn to consider the construction of clause 19.7 which states as follows;
“Overtime is defined as excess work requirements within a specific area and does not include the coverage of paid personal leave for single day absences (not consecutive).”
[48] While the controversy between the parties is in respect of the meaning of the term “excess work requirements”, a necessary preliminary consideration is that of what purpose the definition of overtime serves, as it is not apparent on a plain reading of the clause.
[49] One possible explanation is that the definition of overtime is provided for general reference within clause 19, in which case, it would condition the entitlement to overtime penalty payments. If that were the case, then the penalty payments referenced in both clauses 19.2 and 19.3 would only be payable where the work performed satisfied the definition of overtime. Coverage of paid personal leave for single day absences is excluded under the definition of overtime and as such, the working of additional hours to cover those single day absences would not attract overtime penalty payments. Such a construction would be a nonsense, as was conceded by both parties, as the entitlement to overtime payments under the 2017 Agreement are driven by an employee’s ordinary hours of work being exceeded, not by the purpose for which the additional hours are worked.
[50] In understanding the purpose for which the definition is provided, a useful pointer is found in the reference within clause 19.7 to the overtime being concerned with excess work requirements in a “specific area”, wording that is similar though not identical to the reference in clause 19.3 to first opportunity for overtime being in the “normal work area”. While the references may infer a link between clauses 19.7 and 19.3, it is not determinative and I am not satisfied that the plain and ordinary meaning of the words in clause 19.7 makes clear the purpose for which the definition applies. It is therefore necessary to consider the surrounding context and circumstances of the clause.
[51] The NUW adduced evidence through Ms Radman as to the circumstances leading to the insertion of clause 19.7 into the 2014 Agreement. Parmalat agree that the inclusion of the clause arose from negotiations for the 2014 Agreement during which Parmalat sought to achieve greater flexibility in the use of casual employees in the coverage of planned and unplanned leave absences of permanent regular employees. I am satisfied that by including clause 19.7 in the 2014 Agreement, the parties sought to define “overtime” for the purpose of the required “first opportunity” of overtime preference in clause 19.3. In simple terms, clause 19.7 seeks to define the circumstances in which overtime must be offered to permanent regular employees pursuant to clause 19.3 prior to Parmalat engaging casuals.
[52] Having been satisfied that clause 19.7 is concerned with defining overtime for the purpose of the preference of overtime allocation under clause 19.3, I turn now to consider the meaning of the words “excess work requirements” because it in is in the circumstances of “excess work requirements” that the overtime preference obligation in clause 19.3 operates.
[53] The NUW contend that the term “excess work requirements” refers to any circumstances that requires additional staffing in a particular work area. whereas Parmalat submit that the term “excess work requirements” is confined to work that is in excess of the coverage requirements for normal rostered shifts. Unhelpfully, there is no definition in the 2017 Agreement of the meaning of the disputed term.
[54] There is a tension between the construction advanced by Parmalat and the exclusion of “personal leave for single day absences” in the definition of overtime in clause 19.7. If the term “excess work requirements” does in fact mean additional shifts required beyond normal rostered shift coverage, then reference to “personal leave for single day absences” is otiose. That is so because single day personal leaves coverage would be a normal rostered shift coverage requirement and would not need to be explicitly excluded. While the exclusion of personal leave single day absences in the definition tells against the construction advanced by Parmalat, I am not satisfied that the meaning of the clause is unambiguous. It is susceptible to more than one meaning and such it is necessary to examine the context and circumstances of the clause.
[55] I am satisfied on the evidence of Ms Radman that clause 19.7 was negotiated and included in the 2014 Agreement, during which negotiations, Parmalat sought to achieve greater flexibility in the use of casuals by watering down the overtime preference obligation contained in clause 19.3. Ms Radman also gave evidence that employees resisted the scope of flexibility initially sought by Parmalat during those negotiations and that ultimately Parmalat conceded ground on its claim and accepted a lesser position, that being it would be able to engage casuals for single day absences without being required to give permanent regular employees first opportunity of overtime. It is significant that Parmalat failed to adduce any evidence in relation to the 2014 Agreement negotiations and consequently Ms Radman’s evidence is uncontested and which I accept.
[56] Post agreement negotiation conduct is also useful to consider. There is no evidence that Parmalat took immediate steps in the wake of concluding the 2014 Agreement to implement greater flexibility in the use of casuals to cover planned and unplanned leave absences, consistent with the construction of clause 19.7 it now contends. Nor was it able to explain its failure to do so, although submitting that it had never resiled from its interpretation of the clause and claimed to have confirmed that position during the 2017 Agreement negotiations. While sporadic disputes did arise from 2016 in relation to the use of casuals, it is significant that the NUW disputed such casual use in 2016 and again in 2017.
[57] In summary, I am satisfied that clause 19.7 emerged from negotiations from the 2014 Agreement; that employees resisted the relaxation of the overtime preference obligation sought by Parmalat during those negotiations; and that Parmalat ultimately conceded ground on its bargaining claim and accepted a lesser position (from its perspective), that of securing an ability to use casuals to cover paid personal leave for single day absences.
[58] There was no evidence that, at the time of the negotiation and inclusion of clause 19.7 in the 2014 Agreement, the meaning of the term “excess work requirements” was objectively understood by the parties to mean additional production shifts. In fact the evidence is to the contrary.
[59] Further evidence as to Parmalat’s dissatisfaction with the operation of the overtime preference obligation can be seen in its efforts to negotiate changes to clause 19.3 in the negotiations for the 2017 Agreement by seeking to remove reference to the “first” opportunity for overtime being provided to “permanent regular employees.” The claim was dropped during negotiations in the apparent face of resistance by NUW bargaining representatives.
[60] Clause 19.7 is in my view ambiguous and I have necessarily had regard to the context and circumstances surrounding the clause. Having done so, I am satisfied that the proper construction to be applied to clause 19.7 is that it defines “overtime” for the purpose of the required preference of overtime allocation to “permanent regular employees” under clause 19.3. In defining “overtime” as “excess work requirements…”, that latter term means all work in a specific work area that requires additional labour, including coverage of planned and unplanned absences on normal rostered shifts, as well as additional production shifts or additional work activities beyond normal rostered shifts, but explicitly excludes required coverage of paid personal leave for single day absences. In the case of coverage required of paid personal leave for single day absences, Parmalat is not required to provide “first opportunity” of overtime to permanent regular employees before engaging casual employees.
[61] It follows from the above that the NUW’s interpretation of clause 19.7 is in my opinion the correct one.
Conclusion
[62] For the foregoing reasons the question to be determined is answered as follows;
“Does the term “excess work requirements” as expressed in the definition of overtime at clause 19.7 of the 2017 Agreement mean those additional shifts required to be filled that are over and above the coverage requirements for normal rostered shifts? – No, “excess work requirements” includes coverage of planned and unplanned absences on normal rostered shifts as well as additional production shifts or additional work activities beyond normal rostered shifts.
[63] The dispute is determined accordingly.
DEPUTY PRESIDENT
Appearances:
Mr D. Melling on behalf of the Applicant.
Mr B. Cooper on behalf of the Respondent.
Hearing details:
2018.
Melbourne.
12 June.
Printed by authority of the Commonwealth Government Printer
<PR608498>
1 AG2017–2020.
2 Exhibit A2, Witness statement of Mr. Robert Dent, dated 18 May 2018 at paragraph [4].
3 Ibid, Attachment 2, Bargaining minutes containing Parmalat’s log of claims.
4 Ibid at paragraph [5].
5 Ibid, Attachment 1, Email correspondence from Luke Donia.
6 AG2011/2316.
7 AG2014/1494.
8 Exhibit A1, Witness statement of Ms. Mira Radman, dated 18 May 2018 at paragraph [3].
9 Ibid at paragraph [4].
10 Ibid at paragraph [5].
11 Transcript at PN155 – PN156.
12 Exhibit A1 at paragraph [9].
13 Ibid at paragraph [8].
14 Exhibit R1, Witness statement of Ms. Annalise Quint at paragraph [5] – [6].
15 Ibid at paragraph [7].
16 [2017] FWCFB 3005 at [114].
17 [2017] FWCFB 4487.
18 [2014] NSWCA 184 at [71] – [85].
19 Manufacturers’ Mutual Insurance Ltd v Withers (1988) 5 ANZ Ins Cas 60-853 at 75-343.
20 Kirin-Amgen Inc v Hoechst Marion Roussel Ltd [2004] UKPC 6; [2005] 1 All ER 667 at [64].
21 Project Blue Sky v Australian Broadcasting Authority [1998] HCA 28; 194 CLR 355 at [78].
22 Charter Reinsurance Co Ltd v Fagan [1997] AC 313 at 391 per Lord Hoffman, approved in Campbell v R [2008] NSWCCA 214; 73 NSWLR 272 at [48] (Spiegelman CJ, Weinberg AJA and Simpson J agreeing) and Dale v The Queen [2012] VSCA 324 at [73].
23 Franklins Pty Ltd v Metcash Trading Ltd [2009] NSWCA 407; 76 NSWLR 603 at [17] cited in Mainteck Services Pty Ltd v Stein Heurtey SA (2014) 310 ALR at [71] – [85].
24 Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52; 219 CLR 165 at [40].
25 AG870704-2.
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