Opal Packaging Australia Pty Ltd T/A Opal Fibre Packaging v “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers' Union (AMWU) - [2022] FWC 1840

[2022] FWC 1840

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009

s.739—Dispute resolution

Opal Packaging Australia Pty Ltd T/A Opal Fibre Packaging
v

“Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU)

(C2022/1228)

COMMISSIONER MCKINNON

SYDNEY, 20 JULY 2022

Alleged dispute about matters arising under the Orora Fibre Packaging National Enterprise Agreement 2019.

Opal Packaging Australia Pty Ltd (Opal) has applied to the Commission to deal with a dispute with the “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU) under the Orora Fibre Packaging National Enterprise Agreement 2019 (the Agreement).

The dispute is about Opal’s proposal to vary site-specific hours of work arrangements for maintenance employees covered by the Agreement at 10 Fitzpatrick St, Revesby NSW 2212 (the Revesby site). The employees are currently rostered to work 37 hours per week (8 hours per day from Monday to Thursday and 5 hours on Friday). Under the Agreement, ordinary hours of work at the site cannot exceed 35 hours per week. The additional 2 hours are worked, “banked” and taken as equivalent time off at a later time.

Opal proposes to cease rostering the additional 2 hours per week, which will mean an end to the regular banking of hours. Employees will instead be rostered for their 35 ordinary hours per week plus 10 minutes overtime for handover purposes before the start of each shift. Hours rostered in excess of 35 hours per week will be worked and paid as overtime. The stated purpose of the change is to align hours of work for Revesby maintenance employees with the hours of work of production and despatch employees.

The AMWU resists the change and says that it is unsafe. The AMWU also submits that the change cannot be made under clause 5 of the Agreement (which preserves historic site differences) and clause 9.1(m) (which prevents further claims).

The question is whether Opal can change the rostered weekly hours for Revesby maintenance employees from 37 hours per week (whereby two hours are banked for the purpose of taking additional leave) to 35 ordinary hours per week, plus a 10-minute shift changeover paid at overtime rates? For the reasons that follow, I have decided that the answer to the question is “Yes, but only on or after 1 October 2022”.

The Agreement

The Agreement is a single enterprise agreement made by Orora Packaging Australia Pty Ltd (Orora) and its production, despatch and maintenance employees. It covers and applies to Opal and relevant employees because of a transfer of business from Orora to Opal on 1 May 2020. Both the AMWU and the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU) are covered by the Agreement.

Clause 1 of the Agreement describes its main purpose, which is to ensure the ongoing commitment of management and employees of Orora and the union parties to the Agreement to the principles of Continuous Improvement (as stated in Annexure 1), high levels of productivity and operational excellence.

Clause 3(b) of the Agreement incorporates the pre-reform Graphic Arts General Award 2000 (Graphic Arts Award) and Metal, Engineering and Associated Industries Award 1998 (Metals Award) as they stood on 1 March 2006 as terms of the Agreement (subject to clause 9.1 of the agreement, which provides for improved wages and conditions). The provisions of the Agreement prevail to the extent of any inconsistency with the incorporated awards. Only the incorporated terms of the Metals Award are relevant to the dispute, as it affects maintenance employees, but not production and despatch employees.

Clause 5 of the Agreement is titled “Historical site differences”. It states as follows:

“(a) The parties acknowledge that Orora Fibre Packaging has acquired a number of companies in recent years and as such it is recognised that each site may have practices and conditions not in place at any other site/s.
(b) The parties agree that interstate site differentials will be maintained for the period of the Agreement and recognise that Wage Parity across Orora Fibre packaging sites is an issue between the parties. The parties agree to consult with each other at a national level to review their respective positions on Wage Parity prior to the next EBA. Initial consultation will commence 3 months after approval of the agreement by FWC, except that where within a state a site is identified as having a significant wages anomaly, then the parties shall meet within one month of the Agreement being accepted by the members to ensure an outcome which will rectify the anomaly.

(c) The process of removing significant anomalies will recognise proposed adjustments to be implemented by the introduction of skill based pay and the need for the Company to attract specialised skills in seasonal businesses.”

Clause 7 of the Agreement deals with the “Implementation of this Agreement”. It provides as follows:

“(a) The parties have agreed to work within the spirit and intent of this Agreement to implement agreed changes and genuine productivity, efficiency, cost and customer service improvements within the framework of this Agreement.
(b) To realise the levels of productivity required to build a successful business the parties are committed to an ongoing review of the success of the Agreement on a site by site basis.

(c) Such a review will be held six monthly or on an as needs basis.

(d) This review will involve elected employee representative/s and the site manager, and other representatives and the site manager, and other representatives of the parties as required, to ensure that the commitment of the parties set out in clause 1 are being met at a site level and this review will be part of the consultative process over the implementation of this Agreement.

(e) Where there are matters of dispute these will be referred to the Dispute Resolution Procedure at clause 15 in this Agreement.”

Clause 8 deals with “Continuous Improvement”. It states:

“(a) The parties are committed to achieving Continuous Improvement in all areas designed to improve the overall business performance of Orora Fibre Packaging. Orora and its employees commit to striving to identify and implement all opportunities to enhance customer satisfaction and reduce total unit costs using the principles outlined in Annexure 1.
(b) In addition to the provisions referred to in sub-clause 9.2, it is intended by the parties that a range of initiatives be developed at the plant level and implemented during the life of this Agreement.

(c) The parties are committed to implementing Continuous Improvement initiatives in a consultative manner with full regard to equal employment opportunities and high standards of occupational health, safety and environment.

(d) In recognition of the above and specific site continuous improvement initiatives noted in the agreements, various wage increases and improvements to conditions of employment have been agreed to by the parties. These are set out in clause 9 (Wages and Conditions).”

Clause 8 is supplemented by clause 13, which provides for information sharing on factors affecting the performance of the business and its branches, and by Annexures 1 (continuous improvement principles) and 2 (plant consultative committees). The purpose of such committees is “to ensure the most effective consultative processes are in place … to achieve Continuous Improvement.”

Clause 9 deals with wages and conditions. As noted above, clause 9.1 provides for improvements in wages and conditions in recognition of the commitment to continuous improvement. Clause 9.1(m) expressly states that there will not be any “claims imposed upon the parties for changes to wages and conditions except as provided for” in the Agreement.

Clause 9.2 of the Agreement deals with operational efficiency, productivity and costs of production. Its terms “are designed to facilitate optimal operating performance and are the minimum standards to apply in the absence of other agreed improvements being reached at the plant.” Under clause 9.2(b), the hours of work in the incorporated pre-reform awards apply, except as follows:

“(i) The ordinary hours of work will not exceed 35 hours per week for Orora’s existing operations located at Scoresby, Brooklyn, Knoxfield, Revesby, Athol Park, Spearwood and Launceston or 37.5 hours per week at Rocklea and Townsville.

(ii) Ordinary hours of work for day workers may vary within the spread of hours between 6 a.m. and 6 p.m.

(iii) Starting and finishing times may be staggered to ensure maximum plant capacity utilisation.

(iv) Where required the timing of meal periods for employees in a plant or section may be staggered.

(v) It is accepted that operational requirements may necessitate a change in the method of organising ordinary working hours during the life of this Agreement. If the Company seeks to make such a change, the following procedure shall be followed:

·An assessment shall be made as to which method best suits the business and the proposal shall be discussed with the employees concerned, the objective being to reach agreement on the method.

·In the absence of agreement at the plant or section level, the following procedure shall apply without delay:

oConsultation shall take place within the plant.

oIf the matter is unable to be resolved at the plant level, the matter may, at the employee’s request be referred to the relevant union/s, at which level a conference of the parties shall be convened without delay.

oIn the absence of agreement the Dispute Resolution clause contained within this Agreement will be followed.”

Clause 14 of the Agreement deals with occupational health and safety, including commitments to abide by relevant laws and consultation processes.

Clause 16 of the Agreement deals with consultation in the workplace. It applies to the proposed change, which involves changes to the regular roster of Revesby maintenance employees. Under clause 16, Opal must notify and consult with employees and the Union/s as soon as practicable about the proposed change, including its introduction, the likely effects on employees and measures being taken to avert or mitigate adverse effects of the change on employees.

Annexures 5 and 6 to the Agreement contain skills‑based classification structures and related pay rates. It is here that one can see the clearest example of “site differentials” contemplated by clause 5 of the Agreement. Wages at the Revesby site are the highest of site wages provided for in the Agreement.

The Metals Award

Terms of the Metals Award operate as terms of the Agreement in relation to Revesby maintenance employees. Like the Agreement, the Metals Award deals with hours of work. However, to the extent that the hours of work provisions of the Metals Award are inconsistent with clause 9.2(b), they have no effect.

Clause 6.1.4(a) of the Metals Award provides that “Subject to the employer's right to fix the daily hours of work for day workers from time to time within the spread of hours referred to in 6.1.1(c) and the employer's right to fix the commencing and finishing time of shifts from time to time, the arrangement of ordinary working hours is to be by agreement between the employer and the majority of employees in the enterprise or part of the enterprise concerned. This does not preclude the employer reaching agreement with individual employees about how their working hours are to be arranged.”

Like clause 9.2 of the Agreement, this clause is dealing with the rostering of ordinary hours of work. The clause is inconsistent with clause 9.2(b) to the extent that it requires the arrangement of ordinary working hours (up to 38 hours per week) to be by agreement between the employer and majority of employees. Under the Agreement, ordinary working hours at the Revesby site are capped at 35 hours per week and there is no requirement for majority agreement for the arrangement of ordinary hours of work. Instead, the Agreement contemplates changes in the method of organising ordinary working hours, including without majority agreement, under the process prescribed in clause 9.2(b)(v). The result is that clause 9.2(b) of the Agreement displaces clause 6.1.4(a) of the Metals Award to that extent. It does not displace the right of Opal to fix the commencing and finishing time of shifts from time to time (subject to consultation under clause 16 of the Agreement). Its application to the proposed change is otherwise limited because the change is about the practice of rostering overtime rather than the method of organising ordinary hours of work.

The Agreement does not deal with overtime in any substantive way. It leaves this work to be done by clause 6.4 of the Metals Award. Clause 6.4.1 of the Metals Award provides for overtime to be paid at overtime rates unless an employee chooses (with Opal’s consent) to take time off during ordinary hours instead of overtime, in which case the time off is paid at ordinary rates of pay. Clause 6.4.2 of the Metals Award gives Opal the right to require reasonable overtime to be worked, subject to the reasonable refusal of employees. Clause 6.4.3 then bans the practice of “one in, all in” in relation to overtime and requires that “the assignment of overtime by an employer to an employee is to be based on specific work requirements.”

Clause 6.4 of the Metals Award is problematic for the current rostering practice of “banked hours”. While it permits such an arrangement for individual employees who choose it, clause 6.4.3 prohibits the adoption of a rostering practice of this kind across the board. This is because a “one in, all in” practice of rostering overtime is not permitted. The allocation of overtime must be to meet Opal’s specific work requirements.

Consideration

Section 739 of the Fair Work Act 2009 empowers the Commission to deal with disputes under enterprise agreement dispute settlement terms. The Agreement contains a dispute settlement term at clause 15 that applies to disputes about all matters pertaining to the relationship between the parties and the Union/s covered by the Agreement. The dispute must now be arbitrated under clause 15 because the agreed process has been followed and conciliation failed to resolve the dispute. Pending resolution of the dispute, the status quo remains.

As noted above, the dispute is about whether the Agreement prevents Opal from introducing the proposed change. This requires an understanding of what the Agreement says about changes to rostering practices, the preservation of historic site differences and the scope of a commitment to no further claims. The principles to be applied in the interpretation of enterprise agreements are well settled.[1] The first step is to determine whether the disputed terms of the agreement have a plain meaning or are instead ambiguous or susceptible to more than one meaning. The language of disputed terms is to be construed objectively, having regard to both context and purpose, and a narrow or pedantic approach to interpretation is to be avoided. Where there is ambiguity, evidence of surrounding circumstances can be admitted, but only to establish objective background facts relevant to the meaning of disputed terms.

In the present case, there is no ambiguity of meaning in the terms in dispute. By clause 9.2 of the Agreement, ordinary hours are capped at 35 hours per week. The 2 additional rostered hours of work each week are overtime for the purposes of the Agreement. Overtime is regulated by the incorporated clause 6.4 of the Metals Award, which allows for the working of reasonable overtime, provides for compensation either at overtime rates or by the taking of equivalent time off at a later time, and prohibits overtime on a “one in, all in” basis – instead requiring that overtime be assigned only to meet Opal’s specific requirements. The current practice of rostering 2 hours overtime per week for Revesby maintenance employees is inconsistent with this latter requirement.

This does not mean the rostering practice is in breach of the Agreement. The problem is overcome to an extent by clause 5 of the Agreement, which preserves historical “interstate site differentials” for the period of the Agreement. Although the primary concern of clause 5 is “wage parity”, interstate site differentials is a wider concept that is explained by reading clauses 5(a) and (b) together. As clause 5(a) explains, “each site may have practices and conditions not in place at any other site/s”. These are the differences, or differentials, to which clause 5 refers. Clause 5(b) then goes on to preserve these differentials. Used in this context, the word “interstate” in clause 5 reflects no more than that the Agreement covers different sites across the five Australian states. The word “differentials” is used interchangeably with the word “differences”, as the heading of clause 5 makes clear.

The rostering practice is one of these. It has a long history (approximately 30 years) and appears to be unique to the Revesby site. As terms of the Agreement prevail over terms of the Metals Award to the extent of inconsistency, clause 5 preserves the current practice of rostered overtime, despite the prohibition on such practices in clause 6.4.3 of the Metals Award. However, clause 5 only prevails over clause 6.4.3 of the Metals Award “for the period of the Agreement”. The period of the Agreement is set out in clause 2 of the Agreement and means until 30 September 2022.

The prohibition on further claims in clause 9.1(m) of the Agreement does not apply to the proposed change, which involves a rostering practice rather than any change to wages or conditions of employment. Wages and conditions prescribed by the Agreement will remain unaltered. Employees will retain the benefit of a 35‑hour working week, with overtime applicable to hours worked in excess of 35 hours. Employees will retain the right to elect to take time off instead of overtime at a later time, with Opal’s consent. Absent that consent, employees will be entitled to be paid for overtime worked at overtime rates. Finally, removing rostered “one in, all in” overtime (except for the proposed shift handover) will give effect to the Metals Award obligation to ensure that overtime is assigned based on Opal’s specific requirements. In other words, the proposal would apply the existing terms and conditions of employment in the Agreement, rather than seek to change them.

There is another reason why the prohibition on further claims in clause 9.1(m) of the Agreement does not apply. Subject to clause 5, the proposed change is one provided for in the Agreement, including by clause 6.4 of the Metals Award, which both permits Opal to fix the commencement times of shifts subject to other terms of the Agreement and requires Opal’s consent for overtime to be compensated by time in lieu of overtime. Further, clauses 15 and 16 of the Agreement provide for consultation over changes to regular rosters and establish a mechanism to resolve disputes where agreement cannot be reached.

I am not satisfied on the evidence that the proposed change will be unsafe or inconsistent with Opal’s obligations under relevant safety legislation or the Agreement. Other employees are working the same shifts that are now proposed for the maintenance employees. The change will result in employees being rostered to work fewer hours of work each week. To the extent that there is evidence in relation to the quality of shift handover, it would appear to confirm that a proposed 10‑minute proposed handover period will usually be adequate, including because no handover is required at all on Monday mornings and Fridays. Shift bubbles introduced throughout the pandemic saw the suspension of shift handovers with alternative mechanisms for information sharing adopted. Further, in cases where a longer handover is required in a particular case, this can be managed safely by releasing employees from ordinary work before the end of their shift or asking them to work overtime where specific needs arise for handover purposes.

For completeness, if it were necessary to decide I would find that the dispute settlement term at clause 15 of the Agreement prevents implementation of the proposed change until resolution of the dispute (in this case, by arbitration). This is because the parties have agreed in clause 15.3(a) that the “status quo remain” while disputes are being resolved, which is not limited to the separate agreement that “work shall continue normally”. Specifically in contemplation of preserving the status quo, the parties have agreed that “no employee’s duties, shift, occupation or income will be changed” during the dispute resolution process. As the proposed change would change the shifts of Revesby maintenance employees by altering their commencement times, it could not proceed until the dispute was resolved.

Conclusion

Opal is required to maintain the current rostering practice at the Revesby site for the period of the Agreement, which expires on 30 September 2022. Subject to its consultation obligations under the Agreement, implementation of the proposed change can proceed at the Revesby site on and from 1 October 2022.

Between now and then, the obligation to consult under clause 16 of the Agreement continues. To date, the consultation process has complied with clause 16 of the Agreement. Further written notice dealing with the timing of the proposed change will be required having regard to the effect of this decision. This might necessitate a further additional explanation about the expected effect of the change on employees and measures being taken to avert or mitigate any such adverse effects. If requested, the written information is to be provided in languages other than English. Employees can again be invited to give their views about the revised impact of the change so that further meaningful consultation on these matters can occur and Opal can consider any views provided by employees and/or the AMWU before 1 October 2022. In this respect, Opal must take reasonable steps to mitigate any adverse effects of the change on employees.

Subject to these additional steps, the change can proceed on and from 1 October 2022. Noting the emphasis on continuous improvement under the Agreement and the express commitment in clause 7 to implementation of genuine productivity, efficiency and cost improvements, it is expected that employees and the AMWU will cooperate with Opal on implementation of the change from that time on.

The dispute is determined accordingly.

COMMISSIONER

Hearing details:

Determined on the papers.

[1] Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union known as the Australian Manufacturing Workers’ Union (AMWU) v Berri Pty Limited[2017] FWCFB 3005; The Australasian Meat Industry Employees Union v Golden Cockerel[2014] FWCFB 7447; see also Workpac v Skene [2018] FCAFC 131.

Printed by authority of the Commonwealth Government Printer