Qenos Pty Ltd T/A Qenos Pty Ltd v Construction, Forestry, Maritime, Mining and Energy Union
[2018] FWC 5920
•24 SEPTEMBER 2018
| [2018] FWC 5920 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.739—Dispute resolution
Qenos Pty Ltd T/A Qenos Pty Ltd
v
Construction, Forestry, Maritime, Mining and Energy Union; Australian Workers’ Union, The
(C2018/2041)
| Commissioner McKinnon | MELBOURNE, 24 SEPTEMBER 2018 |
Alleged dispute about any matters arising under the enterprise agreement - whether disputes procedure followed - proposed shift roster change – whether allowed under enterprise agreement.
Qenos Pty Ltd (Qenos) has applied to the Commission under section 739 of the Fair Work Act 2009 (Act) for assistance in relation to a dispute under the AWU/CFMEU Qenos Botany Operations Enterprise Agreement 2013[1] (Agreement). The Agreement is a single enterprise agreement made by Qenos and its employees at Botany, NSW. The Australian Workers’ Union (AWU) and the Construction, Forestry, Maritime, Mining and Energy Union (CFMMEU) are covered by the Agreement.
The dispute is about a proposal by Qenos to implement a roster change so that employees in the Site Utilities Plant (SUP) work a four shift roster instead of the current five shift roster. The proposal is one of a number of changes proposed by Qenos as part of its “Securing our Future” strategy, which seeks to absorb rising feedstock and energy costs and involves a reduction in employee numbers at Botany as well as its Altona site by 15%.[2]
Section 739 of the Act empowers the Commission to deal with certain disputes under enterprise agreement dispute settlement terms. Clause 11 of the Agreement provides for disputes over the application of the Agreement, “plant agreements” or the National Employment Standards (NES) to be referred to the Commission after attempts at the workplace to resolve the matter have failed. If conciliation then fails to resolve the dispute, clause 11 permits a party to refer the dispute for arbitration.
The parties accept that the dispute falls within the ambit of clause 11 and there is no dispute that conciliation in this matter failed to resolve the dispute. There is, however, a dispute about whether the procedure in clause 11 has been followed such that the Commission can now deal with the dispute by arbitration.
The parties have agreed to the questions for determination, as follows:
Has clause 11 of the Agreement been followed in relation to the dispute?
Can Qenos implement its proposed four shift roster for the Site Utilities Plant at Botany?
For the reasons that follow, and subject to notice, the answer to each question is ‘yes’.
The Agreement
Clause 5 explains the context for the Agreement. It describes the relationship between all levels of Qenos as a “Strategic Partnership”, as follows:
“5.1 The Consultative Committee has prepared this Agreement. The intention of the Agreement is the continued development of a sustained strategic partnership between all levels of the organisation at the Qenos Botany Site. This partnership will be based on absolute trust, commitment and cooperation, recognising that there will be genuine two-way communication and regular performance feedback.
We recognise that the effort and performance of individuals and the teams to which they belong will result in growth for Qenos, satisfaction and development for the individual, long term sustainability and job security and achievement of our business vision.
5.2 As a strategic partnership we will actively meet the "needs of the business". It is recognised that all employees are part of the "business" and contribute to defining the "needs”.
…
5.4 The success of Qenos is based upon customer satisfaction through continuous improvement. This is the driving force behind our vision, strategies and daily actions. The most significant impact that we can make upon customer satisfaction is for us to continually improve our plants safely, reliably, efficiently and effectively.
5.5 We are jointly committed to achieving our company objective which is to “Make & Sell Plastics Profitably”.”
Clause 20 explains that the Agreement “indicates the way Qenos Botany operates.” The Agreement is supplemented by “plant agreements” for individual plant areas, including the SUP (the SUP Plant Agreement). Plant agreements are not part of the Agreement but operate concurrently and deal with plant-specific matters including work practices, manning levels and safety initiatives.
Clause 11 contains the Issue Resolution and Settlement Process, including flowcharts setting out the process to be followed in dealing with any work related “disputes, grievances or issues”.
Clause 12 deals with Workplace Change, which applies as follows:
“12.1 The parties agree that throughout the life of this Agreement major change initiatives, including initiatives in relation to production, program, organisation, structure, or technology, may be initiated which have Site-wide implications and which may significantly change working conditions. (refer to PCRT involvement in Clause 11 above).”
Clause 15 and Appendix 2 to the Agreement set the method of remuneration for employees, who are paid an annualised salary inclusive of all but three specified allowances[3]. In the SUP, salaries for Process Technicians range from $104,856.20 (Level 1 Shift) to $165,585.51 (Level 6 Shift).[4]
Has clause 11 of the Agreement been followed?
Clause 11.1 provides as follows:
“11.1All efforts will be made to resolve disputes, grievances or issues regarding this Agreement, the NES and any work related issue(s) at the most appropriate organisational level. A dispute, grievance or issue in relation to this Agreement, the NES or any other work -related issue will, as far as possible, be dealt with in accordance with the process outlined below (Stage One). The nature of the issue may necessitate (by agreement with the PCRT) bypassing one or more of the steps in the process. When implementing the following process the status quo will remain, with team members having the option of employee representation at any stage.”
Clause 11.2 provides as follows:
“11.2Issues raised at this point would include for example a review of employee resources. Employee numbers in the business will be in accordance with the 'needs of the business' (increased or decreased) as reviewed from time to time.
Issue Resolution Process
11.2.1Local decisions and actions (workgroup and/or plant) must be considered for site and/or company-wide implications and the relevant parties (eg. CC, Management Team) consulted as appropriate.
11.2.2Advice may be received at any stage from any source (eg. union, legal, EEO and Harassment, Employee Assistance Program etc) which may make it appropriate to return to the previous step.”
The shift roster change is specific to the SUP and is designed to achieve a reduction in employee numbers in that plant by natural attrition.[5] As Qenos’ Site Manager, Garry Fox, said:
“If we went through the process and identified a different way of achieving 22, down to 22, and I presented it to Mr Lake, I'm sure he would have been willing to adopt it. But the opportunities to get down to 22, without changing to a four shift roster, is extremely limited… I had to reduce it to 22, definitely, yes.”[6]
It is clear that there is a work related “dispute, grievance or issue” in relation to the proposal to change shift rosters at the SUP, enlivening clause 11 of the Agreement. The issue is to be dealt with firstly in “Stage One” of clause 11 (Issue Resolution Process).
The first step in “Stage One” is to consider whether the issue can be resolved by the PCRT or management.
Stage one – Issue Resolution Process
Ms Hammond gave evidence that its first step in dealing with the issue was as part of its broader obligation to consult about the “Securing our Future” strategy decision. After consulting with the Consultative Committee on 7 September 2017, the SUP roster proposal was referred to the relevant Plant Composite Review Team (PCRT), which is responsible for dealing with “any plant related changes”.[7]
Can the issue be resolved by PCRT or management?
According to the SUP Plant Agreement, the PCRT is “an open forum for all stakeholders and affected workgroups to be represented”. It meets “when the need arises”. Team representatives are from “Plant manager, shift and reliability team members”. Subgroups of the committee can be formed to address particular issues.[8]
The first meeting of the PCRT was held on 11 September 2017 and the matter was referred to a subcommittee of the PCRT comprising Garry Fox and three employee representatives, Sean Mallinson, Paul Whiteway and Dave Delay.[9] Scott Raymond participated by telephone. Employees met to consider the company proposal on 18 September 2017 and resolved not to accept it, but to continue to discuss the issue.[10]
On 26 September 2017, the PCRT subcommittee met. Prior to the meeting, an organisational change risk assessment and a revised version of that assessment with “issues and comments raised” was circulated to the subcommittee.[11] The proposal was discussed but not agreed. The PCRT also met to discuss the proposal.[12] No agreement was reached in that forum.
On 28 September 2017, both the PCRT and the PCRT subcommittee met again. The proposal was discussed and a revised risk assessment was presented to the subcommittee. Options were discussed and Qenos agreed to respond to an employee proposal and, subject to approval, to put an alternative proposal at the next subcommittee meeting.
On 5 October 2017 the PCRT subcommittee met and a revised risk assessment was presented and accepted. The proposal was discussed, responses provided and an alternative proposal put by Qenos.[13] Employees in the workgroup met on 11 October 2017, rejected the alternative proposal and endorsed their own alternative proposal.
The PCRT subcommittee met again on 12 October 2017.[14] Feedback from the employee workgroup meeting was provided and further alternative proposals discussed. The subcommittee agreed to report back to the PCRT and then to the Consultative Committee that agreement had not been reached.
On 12 October 2017 the PCRT met and, consistent with the Issue Resolution Procedure in clause 11.2 of the Agreement, agreed to report back to the Consultative Committee that agreement had not been reached.[15]
On 21 October 2017, the PCRT met[16] and on 26 October 2017 the PCRT comprised of Mr Fox, Mr Beattie, Mr Mallinson, Mr May and Mr Portese met with Jason Porter, an observer, to further discuss the proposal.[17] No agreement was reached.
On 10 and 30 November 2017, the PCRT met again. It confirmed that no agreement had been reached and that the next stage was to report this to the Consultative Committee.[18]
On 9 January 2018, Mr May (on behalf of employees) asked for CFMMEU Organiser Mark McGrath to represent them at the next PCRT meeting. Mr Fox replied to the effect that it was not appropriate for Mr McGrath to attend the PCRT (or PCRT subcommittee) but that he would meet him outside that forum.
On 15 January 2018, the PCRT met and agreed again that the shift roster change should be raised with the Consultative Committee.[19] Mr McGrath did not participate in the PCRT meeting.[20] Qenos (Mr Fox and Mr Raymond) met separately with Mr McGrath, Andrew May and Mr Mallinson (Shift Team Leaders) later that day.
Despite genuine efforts to reach agreement in the PRCT, I am satisfied that the issue was unable to be resolved by the PCRT or management in accordance with Stage One of the Issue Resolution Procedure.
Issue presented for review by the Consultative Committee
The second step in Stage One is to present the issue for review by the Consultative Committee.
On 19 and 27 October 2017, the Consultative Committee met and was given an update on consultation about the proposed four shift roster change. The Committee was advised that the SUP proposal had been rejected by the workgroup and that the workgroup had not walked away from continuing consultation.[21]
On 5 February 2018, the Consultative Committee met again. Representatives of Qenos and employees who were also members of the PCRT were present.[22] Qenos advised that consultation about the SUP change had completed. Employees formally raised a dispute under clause 11 of the Agreement. The Committee agreed it would be unable to change the position of the workgroup given the discussions that had taken place. It decided to bypass the steps of referring the matter back to the PCRT or forming working groups to consult further. Instead, it agreed the next step was a meeting between Qenos (Mr Raymond and Mr Beattie) and AWU and CFMMEU Organisers under the Agreement’s Issue Settlement Process.[23]
The agreement not to refer the matter back to the PCRT or form working groups was in effect an agreement to bypass the final two steps of Stage One on the basis that the issue was unlikely to be resolved by the Consultative Committee alone. I am satisfied that the agreement was made with a group that included members of the PCRT.
Having regard to the history of the matter, I am satisfied that Stage One (Issue Resolution Process) of clause 11 has been followed.
Stage Two - Issue Settlement Process
The next step under clause 11 is to implement the Issue Settlement Process in clause 11.3 (Stage Two).
Clause 11.3.1 provides as follows:
“11.3.1Issue settlement will only be used as a last resort. As a strategic partnership we expect to resolve all issues internally.
11.3.2Matters unresolved by the issue resolution process (clause 11.1) will be referred to the Qenos Human Resources Manager and the employee or the employee's representative.
Ms Hammond gave evidence that the position of “Qenos Human Resources Manager” had since become redundant and that for the purposes of this dispute, the role in clause 11.3.2 of the Agreement had been delegated to Scott Raymond, the relevant Senior HR Adviser.[24] I accept her evidence.
On 7 February 2018, the CFMMEU formally wrote to the Consultative Committee advising that it was “triggering the Issue Settlement Process” (that is, Stage Two).
On 15 March 2018, Qenos (including Mr Raymond), Mr McGrath (CFMMEU), Chris Donovan (AWU) and several employee representatives met to discuss the proposed change to a four shift roster.[25] A further meeting was held on 12 April 2018.[26] It is common ground that the meetings on 5 March 2018 and 12 April 2018 did not result in a resolution of the issue and that employees in the Work Group voted to reject Qenos’ final offer to resolve the dispute on the evening of 12 April 2018.[27]
The meetings on 15 March 2018 and 12 April 2018 represented the final step in Stage Two.
I am satisfied that Stage Two of clause 11 has been followed and that attempts to resolve the matter at the workplace ultimately failed.[28]
Despite the proposed change having been initially contemplated for implementation in October 2017,[29] consultation continued well beyond that time. It was the CFMMEU and AWU representatives on the Consultative Committee who formally sought to invoke Stage Two after agreement could not be reached in Stage One. I am satisfied that Stage Two was only commenced as a ‘last resort’.
Stage Three – referral to the Commission
The next stage of clause 11 is referral of unresolved disputes to the Commission.
Qenos applied to the Commission for assistance with the dispute by conciliation in the first instance on 17 April 2018. Conciliation occurred on 27 April 2018 and 14 May 2018 but the matter was not resolved.
I am satisfied that each procedural step of clause 11 preceding arbitration of the dispute was followed by the parties in a genuine effort to resolve the dispute.
Refusal to allow CFMMEU Organiser to attend meetings
It is not in dispute that Mr McGrath was not permitted to attend a meeting of the PCRT on 15 January 2018.
The CFMMEU also submits that Mr McGrath was not permitted to attend Consultative Committee meetings, relying on the evidence of Mr Mallinson. The available records, including minutes taken of meetings of the various PCRT and Consultative Committee (CC) meetings over the period in dispute, confirm that there was a refusal to allow Mr McGrath to attend the PCRT meeting on 15 January 2018.[30] They do not, however, record any refusal to permit Mr McGrath to participate in Consultative Committee meetings.
There is evidence that Mr Mallinson was prevented from raising the issue of union representation generally at an extraordinary Consultative Committee meeting on 5 February 2018, after participants (including employee representatives) agreed to confine the meeting to the single agenda item of the shift roster change. Mr Mallinson was advised that the issue could instead be raised in the next Consultative Committee meeting on 15 February 2018.[31] Having regard to the weight of evidence, I am not satisfied that Mr McGrath was denied participation in the Consultative Committee meetings in the relevant period.
The question is what effect the refusal to allow Mr McGrath to participate in the PCRT had on compliance with the procedure in clause 11 of the Agreement.
Clause 4.8 defines "Plant Composite Review Teams" (PCRT) as “the plant having a single consultative team overseeing the issues related to the three main occupational groups together with management. This team is called together when the CC requires individual plant discussions on topics. The plant will have an effective composite review team, which will be responsible for implementing, when necessary, relevant sections of the Agreement and being a plant based consultative forum.”[32]
On its terms, it seems clear that membership of the PCRT is drawn from management and members of the relevant plant team (that is, employees). To the extent that there is any ambiguity, the definition of PCRT in the SUP Plant Agreement referred to above provides guidance.[33] It defines the PCRT as comprising the “Plant manager, shift and reliability team members”.
The PCRT is separate to the Consultative Committee. Clause 4.7 defines “Consultative Committee” as follows:
“The Site employee representatives & management, as determined by the parties to suit the circumstances. The team has a membership of 4 employee representatives and 4 management representatives. A quorum is defined as 2 employee representatives and 2 management representatives. The team will meet on a monthly basis. The team will meet at other times to deal with issues as they arise. A meeting may be called by either the employee representatives or management representatives with at least 24 hours' notice. The committee's responsibilities and accountabilities include:
4.7.1delivering the intent, commitments and processes of the existing Agreement for the Botany Site;
4.7.2 formulating future agreements for Qenos Businesses on site;
4.7.3communicating to all Site personnel their roles and responsibilities under the Agreement; and
4.7.4implementing the philosophy of the relevant sections of this being the consultative forum to decide local issues for the site.”
While the definition refers to “Site employee representatives”, membership and participation in the Consultative Committee is not limited to management and employees. This is because “Employee Representative” is defined in clause 4.14 as “a representative of an employee or employees, who may include a representative of the AWU or the CFMEU.” Consistent with that definition, clause 19 of the Agreement, which deals with “Employee Representatives”, includes “acting as a resource in issue resolution” as one of the roles of an employee representative.
On a plain reading of the Agreement, union representatives can be members of the consultative committee when that is determined by the parties to suit the circumstances, for example during enterprise bargaining.
As to participation more broadly in the process in clause 11 of the Agreement, clause 11.1 of the Agreement includes the following statement:
“When implementing the following process the status quo will remain, with team members having the option of employee representation at any stage.”
Clause 11.3(d) of the Agreement is inconsistent with clause 11.1. It provides as follows:
“During each stage of the dispute resolution process (other than the first stage) the employee(s) concerned and Qenos may choose to be accompanied or represented by another person of their choice.”
The meaning of the Agreement in relation to employee representation for the purposes of Stage One of clause 11 is, in this respect, ambiguous. The terms are each located in different parts of the clause. Their evident purpose is to clarify when employees (and in the case of clause 11.3(d), Qenos) can be represented in that process. However, on a literal reading of each term, clause 11.1 provides for representation at “any stage” while clause 11.3(d) limits representative participation to Stage Two and subsequent proceedings in the Fair Work Commission.
The principles to be applied in the construction of enterprise agreements are set out in Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (AMWU) v Berri Pty Limited.[34] The starting point is to consider the ordinary meaning of the words used, having regard to their context and evident purpose. The search is for the objective common intention of the makers of the enterprise agreement, having regard to the language used to give effect to their agreement. Where there is ambiguity, evidence tending to establish relevant objective background facts known to both parties can be admitted to aide interpretation.
The SUP Plant Agreement sheds light on the intended approach to representation and participation in local disputes. While not part of the Agreement, the SUP Plant Agreement provides as follows:
“Issues
a)In the event that an issue cannot be resolved within the original work-group the issue will be dealt with at PCRT or appropriate sub-group.
b)After full consultation with all workgroups the PCRT has the authority to make consensus decisions which are binding on all parties.
c)If the PCRT is unable to resolve an issue it will [sic] taken up by the Botany consultative committee. (union representatives may attend this meeting)”
In other words, the PCRT, which is comprised of the Plant manager, shift and reliability team members, does not extend to union representatives. The PCRT has authority to make consensus decisions within its scope. Where consensus cannot be reached and the matter is then taken up by the Consultative Committee, union representatives can attend relevant meetings of the Consultative Committee to assist.
It is also relevant to consider the distinction drawn in clause 11.3(d) of the Agreement between an employee being “accompanied” or “represented”.
I find that while employees can be represented at any stage of the process in clause 11, they cannot be accompanied by a representative of a person of their choice in every forum held in that process. The Agreement makes a clear distinction between the PCRT and the Consultative Committee. Participation in the PCRT is limited to management and employees, while depending on the circumstances, participation in the Consultative Committee process is not.
I am satisfied that the refusal to allow Mr McGrath to participate in the PCRT meeting on 15 January 2018 was not inconsistent with clause 11.
I also note that Qenos and Mr McGrath met on the same day he was refused access to the PCRT meeting. The meeting involved relevant representatives of Qenos and the same subject matter of the four shift roster proposal was discussed. I do not consider that the refusal for Mr McGrath to participate in the PCRT was conduct that undermined the parties’ comprehensive efforts to resolve their dispute through the Issue Resolution and Settlement Process.
Clause 11 of the Agreement has been followed in relation to the dispute.
Can Qenos implement its proposed four shift roster for the Site Utilities Plant at Botany?
Clause 9 regulates the hours of work at Qenos. It provides as follows:
“9.1 Each Work Group will maintain its own rosters, ensuring that an agreed minimum complement of employees will be rostered to safely meet the needs of the business and each Work Group, whilst recognising leave requirements.
9.2 Extra hours shall be worked as required and managed by each Work Group, subject to clause 6.10.
9.3 Rosters will reflect an average working week of 38 ordinary hours.
9.4 "Shift Roster" consists of either a day/night or a day/afternoon roster covering 365 days a year.
9.5 "Day roster" refers to any roster that is not a shift roster.”
As can be seen, clause 9.1 of the Agreement requires each Work Group to maintain its own rosters. The CFMMEU and the AWU each submit that this clause gives autonomy to the Work Group to decide on its own roster, including how many employees are required and whether employees work a five or four shift roster. They say the reference to ‘roster’ in clause 9.1 should be taken to mean the ‘pattern and structure of shifts’, as distinct from a reference to ‘individuals placed within the pattern of shifts’.[35] Qenos disputes this characterisation and says that Qenos decides the ‘panel’ employees are going on (for example, a four or five panel roster) and employees decide how people are rostered on shifts.[36]
There is a dispute about which representative of Qenos management is a member of the Work Group. I prefer and accept the evidence of Mr Fox that he is the relevant management representative.[37] The inclusion in the Work Group of a management representative[38] tends against an interpretation that gives employees complete autonomy over their roster arrangements.
Clause 9.1 contemplates an agreed minimum complement of employees. That agreed minimum is recorded in the SUP Plant Agreement. Where there is a dispute over the agreed number of employees, or indeed the agreed roster in the SUP Plant Agreement, clause 11 applies and provides ultimately for the resolution of disputes by the Commission.[39]
It is unlikely that by conferring autonomy on employees to maintain their own rosters, it was intended to also give them the right to decide how many employees would be employed for those rosters, or whether the roster was a day roster, day/night or day/afternoon roster. Such an interpretation would unreasonably curtail Qenos’ right to determine its hours of operation and to ‘hire and fire’ at Botany by in effect delegating those responsibilities to employees on a plant by plant basis. Employees in each plant could decide on a ‘day roster’ only, limiting Qenos’ hours of business operation to 8 or 9.5 hours per day. Plants whose operations relied on each other could each adopt different roster patterns, with the result that Botany would only be fully operational when rosters determined by employees coincided.
Clause 10.3 of the Agreement contemplates the working of a range of different roster configurations, including a 4 shift roster and a 5 shift roster. It includes the following table by way of example:
| Roster System | Annual leave (hours) | Other entitlements (hours) | Leave days or shifts |
| 4 shifts (12 hours) | 204 | 120 + ph | 27 + ph |
| Day (8 hours) | 160 | 96 + ph | 32 + ph |
| (40 hour week) (5 day week) | |||
| 5 shifts (12 hours) | 204 | 0 + ph | 17 + ph |
| Day (9.5 hours) 38 hour week (4 day week) | 152 | 0 + ph | 16 + ph |
Under the Agreement, all plants at Botany work a different roster.[40] Other than the SUP, each plant works a four shift roster.[41] The annual salaries and leave entitlements of employees “depend upon the roster worked,”[42] having regard to the plant, classification, and roster of the employee (which means, in the context of clause 15 and Appendix 2, whether the roster is a day, shift or continuous shift roster).[43]
In my view, clause 9 has a plain meaning.
Clause 9.1 confers responsibility on employees to maintain their own rosters, as distinct from deciding on the overarching roster system to be worked. As the clause makes clear, the responsibility is to ensure that there are enough employees rostered on each day of the year so that the needs of the business and Work Group (including leave requirements) are safely met. It is to implement the required roster system by deciding how individuals are placed within the overall pattern and structure of shifts, within the parameters set by the Agreement.
Clauses 9 and 10 set those parameters, including an “average working week of 38 ordinary hours”, coverage of 365 days a year, an average 7 public holidays per shift member, such extra hours “as required and managed by each Work Group” and time in lieu for day roster employees and process technicians. Clause 6.10 imposes a limit of 16 continuous working hours.
Clause 9.2 provides for extra hours to be worked as required and managed by each Work Group, up to 16 continuous hours in any shift.
Clause 9.3 provides for an average working week of 38 ordinary hours (for example, a working week where rostered days off are accrued in lieu of overtime). It is not a general prohibition on the working of more than 38 hours. If that were the case, the word ‘ordinary’ would have no work to do.
There is no express impediment to the working of a four shift roster by employees in the Agreement. The fact that clause 10.3 contemplates the working of four shift rosters, and that all other plants covered by the Agreement are doing precisely that, tells against a construction of the Agreement to the contrary.
I find that the Agreement does not limit the capacity of Qenos to require employees to work a particular roster system, such as a roster system of the type contemplated by clause 10.
The parties have agreed through the SUP Plant Agreement that the “roster will be as agreed” and that the current roster “is a five shift rotating roster with four shift posts and one relief operator”. The roster can change by agreement of the parties and if agreement cannot be reached, a dispute about the application of the SUP Plant Agreement are ultimately resolved through clause 11.
The proposed shift change
Qenos seeks that employees in the SUP move to a four post, four shift roster with six holiday relief (a total of 22 employees).[44] Who works when, and for how long on each shift, is to be determined by the Work Group. Leave arrangements will be those applicable to a four shift roster under the Agreement, including 10 rostered shifts off, 17 annual leave shifts and 7 public holidays.[45] Qenos seeks to implement this change without adjustment to the annual salaries of employees.
I accept that while under this proposal employees will be required to attend work on the same number of occasions each year, a four shift roster will increase employee’s rostered hours by an average of approximately 1.7 hours per week. I also accept that employees may be required to work more night shifts than they currently work, depending on how the roster is implemented by the Work Group.[46]
Other plants at Botany currently work a four shift roster, but each actual roster is different. It is not possible to know with any precision what the implications of a four shift roster will be for employees in the SUP because that is a matter for the Work Group to decide.
On my analysis, employees are currently rostered to work less than an average of 38 ordinary hours per week, for reasons including that four of the eight required ‘make up’ training days are not currently required to be worked.[47] Depending on the shift an employee currently works (A, B, C, D or E Shift), current average rostered working hours are between 36.6 and 37.5 hours per week. Accepting the consensus figure of an additional 1.7 hours per week under a proposed four shift roster, employees’ total average rostered hours are likely to increase to an average of between 38.3 and 39.2 hours per week.
Good faith bargaining obligations – delay in resumption of bargaining
The AWU says the proposed change should not be implemented because Qenos is in breach of the good faith bargaining requirements and in particular, by its capricious and unfair conduct that undermines collective bargaining contrary to section 228(e) of the Act. It points to the delay in resumption of enterprise bargaining after it was suspended by agreement in 2017.
There is no dispute that bargaining commenced on or about 14 February 2017[48] and the parties agreed to suspend bargaining in April 2017 related to Qenos’ need to seek board direction in connection with a major commercial dispute at that time.[49]
Between September 2017 and October 2017, employee representatives on the Consultative Committee asked that bargaining recommence and in November 2017, wrote to Qenos seeking a resumption in bargaining.[50] On 21 September 2017, the Consultative Committee discussed resumption of bargaining in the context of employees having rejected a proposal by Qenos to rollover the current enterprise agreement for twelve months. Qenos advised that it would not be in a position to start negotiations until November 2017. The parties agreed that a request to bring the date forward would be taken to the Qenos Executive.[51] A similar discussion occurred on 28 September 2017, in the context of ongoing consultation about the Securing our Future strategy as well as scheduled November plant shutdowns.[52]
In the Consultative Committee meeting on 27 October 17, Qenos advised it was not likely to be ready to commence negotiations until 2018 as “organisational change targets had not yet been met”. A future presentation on Qenos’ financial position from Andrew Lake, General Manager of Operations was proposed.[53] That position must be seen in context.
Qenos was dealing with an annual $50 million increase in feedstock costs related to reduced supply and increased demand, export competition, low oil prices, higher gas and electricity costs and government resources policy. It had adopted a range of strategies including ‘Securing our Future’ in a bid to absorb those costs as it was concerned that the business may not be financially viable otherwise.[54] By September 2017, it had achieved savings of approximately $10 million, well short of the required $50 million target but in circumstances where a protracted commercial dispute with a major supplier had not yet resolved.[55] Consultation on Securing our Future was ongoing.[56]
On 7 February 2018, Qenos and the CFMMEU met to gauge interest in ‘interest-based bargaining’ facilitated by the Commission under its New Approaches model.
Over the period from 19 February 2018 to 20 March 2018, there was discussion between the parties and the Commission about the scope of a proposed agreement and participation in interest-based bargaining.[57] In the meantime, on 21 February 2018, the CFMMEU requested that bargaining recommence as soon as possible.
Qenos’ final offer to resolve the dispute was finally rejected by employees on the evening of 12 April 2018,[58] and conciliation in the Commission occurred on 27 April 2018 and 14 May 2018. On 18 May 2018, the CFMMEU advised that it had decided not to participate in interest-based bargaining facilitated by the Commission, and instead sought to expedite negotiations directly with Qenos.[59] The AWU also formally withdrew from interest-based bargaining on 22 May 2018.[60]
On 24 May 2018, Qenos advised that it would schedule a business briefing for the Consultative Committee on 31 May 2018 and sought to establish a calendar for negotiations and engagement principles.[61] Bargaining for a new enterprise agreement has now resumed.[62]
In the circumstances, I am not satisfied that the conduct of Qenos in firstly, proposing a ‘rollover’ agreement and when this was rejected, seeking to defer bargaining having regard to its uncertain financial position during 2017, was either capricious or unfair conduct that could be said to undermine collective bargaining. The initial suspension of bargaining occurred in good faith by agreement. While bargaining itself had not resumed, the parties were actively consulting with each other on a range of matters. They were actively exploring participation in the Commission’s interest-based bargaining stream. Qenos was being both realistic and transparent about its uncertain financial outlook and the likely effect of that on its ability to participate in bargaining in good faith. It is also relevant, but not determinative, that no assistance under the good faith bargaining provisions of the Act was sought.
Compliance with clause 12
The AWU submits that Qenos’ refusal to recognise union representatives under clause 12 of the Agreement means that it had not met its obligations under the Agreement.[63]
The parties agree, and I accept, that clause 12 applies to the decision to implement the Securing our Future strategy, which has implications across both the Botany and Altona sites. That consultation has been continuing since the strategy was presented to employees on 5 September 2017.
While Qenos refused to allow Mr McGrath to participate in a PCRT meeting about the proposed change from a 5 shift roster to a 4 shift roster, I am not satisfied that the refusal falls within the ambit of clause 12 of the Agreement. It arises in the context of dealing with an issue under clause 11, over a matter that is specific to the SUP. The proposal to move to a four shift roster does not have Site-wide implications. In my view, it is not a major change the purposes of clause 12.
In any event, the evidence establishes that Qenos did recognise both the CFMMEU and AWU as the representatives of employees in this matter. Qenos met with Mr McGrath on 15 January 2018, the same day that it refused to allow him to participate in the PCRT meeting. That refusal was consistent with the Agreement and the SUP Plant Agreement. It was not a refusal to recognise Mr McGrath as the employee’s representative.
Self-managed rosters and ordinary hours
The AWU submits that the proposed increase of 1.7 hours is “in defiance” of clause 9.3. As noted above, this submission ignores the distinction between working hours and ordinary hours.
I do not accept that the annualised salary of employees under the Agreement is paid by reference to ordinary hours of work only.[64] Annual salaries are expressed to be “all inclusive”[65] and “extra hours”[66] can be required. Time in lieu is available for employees who have worked “additional hours of work” in certain circumstances.[67] The fact that employees work extra hours ‘without payment’ to ensure roster coverage over the year[68] tells against the proposition, as do the express terms of the Agreement.
Clearly, the Agreement contemplates that overtime will be worked as a feature of the Agreement. Annual salaries under the Agreement are in the range of $104,856.20 (Level 1 Shift) to $165,585.51 (Level 6 Shift), which is significantly more than the maximum annual salary for ordinary hours in the Manufacturing and Associated Industries and Occupations Award 2010[69] of $56,893.20.
In my view, annual salaries in the Agreement are intended to compensate for any hours employees may be required to work in a year, having regard to the needs of the business (as defined). That understanding is consistent with the evidence of Mr Fox that records of actual hours of worked are not kept and there is no way of knowing with certainty what those hours are.[70]
The four shift roster proposal is not in defiance of clause 9.3. It will result in rostered ordinary hours of work for employees of at least 38 hours per week, as well as ‘extra’ hours contemplated by clause 9.2 of the Agreement.
Conclusion
The Agreement reflects the parties’ commitment to the continued development of a sustained strategic partnership between them. It is intended to be based on “absolute trust, commitment and cooperation”. Qenos and its employees have agreed to actively meet the needs of the business, including the needs of employees.[71] They have committed to continuous improvement in safety, reliability, efficiency and effectiveness. They have agreed to the company objective of making and selling plastics “Profitably”. Working together on strategies to address rising business costs affecting Qenos’ viability falls within the broad ambit of those commitments.
Employees are concerned about the effect of the roster change on their work/life balance and sleep cycles. Many of the employees are close to retirement age and I accept that there will be disruption to their lifestyles and current arrangements if the change is implemented. That disruption is relevant in considering whether the change meets the “needs of the business” under clause 5 of the Agreement. Such disruption must be balanced against the commitments made by employees to work in partnership with Qenos and to work cooperatively with it. It may be that the actual roster configuration adopted by the Work Group can assist to minimise the level of disruption to employees.
As the history of this matter reveals, the parties have gone to significant lengths to resolve their dispute at varying levels of the organisation. In the meantime, the status quo remains and the proposed implementation of the four shift roster has been delayed by almost 12 months.
The Agreement contemplates the working of four shift rosters and there is no barrier to that occurring on the material before me. On balance, I find that transitioning the SUP to a four shift roster will help meet the needs of the business. Securing the long term future of Qenos at Botany is in the interests of both Qenos and its employees.
The current five shift roster has been in place for many years.[72] It is appropriate that employees have time to adjust their affairs before the new roster system is implemented. A period of 28 days’ notice will also allow for the Work Group to develop its preferred four shift roster and for revision of the SUP Plant Agreement. Individual circumstances may need to be addressed separately in implementing and developing the roster on a case by case basis, including with regard to the factors set out in section 65 of the Act.
In summary:
Clause 11 of the Agreement been followed in relation to the dispute.
Qenos can implement a four shift roster for the SUP at Botany under the Agreement within the parameters set by the Agreement.
If Qenos decides to implement a four shift roster, it must give employees at least 28 days’ notice of the commencement of such roster.
The dispute is determined accordingly.
COMMISSIONER
Appearances:
A Farr for Qenos Pty Ltd
K Endacott for the Construction, Forestry, Maritime, Mining and Energy Union
R Walsh for The Australian Workers’ Union
Hearing details:
2018.
Sydney; Melbourne (video to Sydney):
July 25-26; August 8.
<PR700706>
[1] [2013] FWCA 6600, AE403763
[2] Exhibit 3, Statement of Garry Fox
[3] Allowances not included in the annualised salary are annual leave loading, GAP Allowance and BERT Allowance.
[4] Exhibit 3, Attachment GF-26. Salaries adjusted for wage increases applied under Appendix 2 to the Agreement
[5] Exhibit 3 at [48], Attachment GF-5
[6] Transcript, 25 July 2018, PN633-634
[7] Transcript, 25 July 2018, PN216
[8] Exhibit 9, Statement of Andrew May, Attachment AM-2
[9] Exhibit 3 at [51]-[52], Attachment GF-5; Transcript, 25 July 2018, PN587
[10] Exhibit 3, Attachment GF-8
[11] Exhibit 3, Attachment GF-8
[12] Exhibit 3, Attachment GF-9
[13] Exhibit 3, Attachment GF-14
[14] Exhibit 3, Attachment GF-15
[15] Exhibit 3, Attachment GF-16
[16] Exhibit 3, Attachment GF-21
[17] Exhibit 3, Attachment GF-21
[18] Exhibit 3, Attachment GF-20 and GF-21
[19] Exhibit 9, Attachment AM-5
[20] Exhibit 3 at [136] to [139]
[21] Exhibit 3, Attachment GF-17 and GF-18
[22] Exhibit 3, Attachments GF-24 and GF-25
[23] Exhibit 3, Attachment GF-25
[24] Transcript, 25 July 2018, PN174 - 175
[25] Exhibit 3, Attachment GF-26
[26] Exhibit 3, Attachment GF-29
[27] Exhibit 3, Attachment GF-30
[28] Exhibit 3, Attachment GF-31
[29] Exhibit 3, Attachment GF-4
[30] Exhibit 9, Attachment AM-5
[31] Exhibit 3, Attachment GF-25; Exhibit 9, Attachments AM-4 and AM-5; Exhibit 10, Statement of Mark McGrath, Attachment MM-2
[32] “CC” is a reference to the Consultative Committee (see Agreement, clause 4.7)
[33] Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (AMWU) v Berri Pty Limited[2017] FWCFB 3005
[34] [2017] FWCFB 3005
[35] “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU) v Silcar Pty Ltd [2011] FWAFB 2555
[36] Exhibit 4, Supplementary Statement of Garry Fox
[37] Transcript, 25 July 2018, PN414, PN417
[38] Agreement, clause 4.4
[39] Agreement, clause 11.3
[40] Transcript, 26 July 2018, PN1153-1157
[41] Transcript, 25 July 2018, PN563, PN734; Transcript, 26 July 2018, PN 1323, PN1835
[42] Agreement, clauses 10 and 15, Appendix 2
[43] Agreement, Appendix 2
[44] Exhibit 3, Attachment GF-28
[45] Exhibit 8, Statement of Sean Mallinson, Attachment SM-1
[46] Exhibit 3, Attachment GF-26; Exhibit 8; Exhibit 4
[47] Yearly Hours Worked spreadsheet filed by Qenos on 7 August 2018
[48] Exhibit 2, Supplementary Statement of Rosanna Hammond at [5], Attachment RH-9
[49] Exhibit 2, Attachment RH-2
[50] Exhibit 2 at [8]-[9], Attachment RH-3
[51] Exhibit 3, Attachment GF-7
[52] Exhibit 3, Attachment GF-12
[53] Exhibit 3, Attachment GF-18
[54] Exhibit 7, Statement of Andrew Lake
[55] Exhibit 7; Transcript, 25 July 2018, PN253, PN259
[56] Exhibit 7, Attachment AL-2
[57] Exhibit 2, Attachment RH-7, RH-8
[58] Exhibit 3, Attachment GF-30
[59] Exhibit 2, Attachment RH-9; Exhibit 10, Attachment MM-1
[60] Exhibit 2, Attachment RH-10
[61] Exhibit 2, Attachment RH-11
[62] Transcript, 25 July 2018, PN271
[63] AWU’s Outline of Submissions filed on 2 July 2018
[64] Exhibit 8 at [14]
[65] Agreement, Annexure 2
[66] Agreement, clause 9.2
[67] Agreement, clause 9.8
[68] Exhibit 8 at [14]
[69] MA000010
[70] Transcript, 25 July 2018, PN698
[71] Agreement, clause 5
[72] Transcript, 25 July 2018, PN466
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