Shop, Distributive and Allied Employees Association v Coles Group Supply Chain Pty Ltd
[2010] FWA 7813
•14 OCTOBER 2010
[2010] FWA 7813 |
|
DECISION |
Workplace Relations Act 1996
s.170LW - pre-reform Act - Application for settlement of dispute (certified agreement)
Shop, Distributive and Allied Employees Association
V
Coles Group Supply Chain Pty Ltd
(C2010/3611)Retail industry | |
COMMISSIONER SIMPSON | BRISBANE, 14 OCTOBER 2010 |
Method of allocation of overtime - whether inconsistent with terms of agreement - construction of agreement.
[1] This application for Fair Work Australia to deal with a dispute in accordance with a dispute settlement procedure was filed by the Shop Distributive and Allied Employees Association (“SDA”) on 6 May 2010. The dispute settlement procedure is contained in a pre-reform Certified Agreement which is the Coles Myer Logistics Forest Lake - Certified Agreement 2005 (“the Agreement”).
[2] An Order was made by Senior Deputy President Richards granting an extension and variation of the pre-reform certified agreement in accordance with clause 2A(1) schedule 7 of the Workplace Relations Act 1996 on 24 December 2008 and the nominal expiry date of the Agreement was extended until 5 August 2011.
[3] Clause 8 of the Agreement states:
8. DISPUTE SETTLEMENT PROCEDURES
8.1 It is agreed that every endeavour will be made to amicably settle any grievance which may arise in the Distribution Centre by direct negotiation and consultation between the parties to this Agreement. It is recognised that from time to time, a need may arise where an employee may seek a support person to accompany them. To facilitate the settlement of any such grievance the following channel of communication shall apply:
8.1.1. Should any matter arise that causes the employee concern, that employee shall raise the matter with the responsible line manager;
8.1.2. If the matter is not settled to the satisfaction of the employee within 24 hours of first raising the matter, the employee shall draw it to the attention of the elected delegate (where relevant). The matter shall then be discussed between the employee, the line manager and the elected delegate (where relevant);
8.1.3. If not satisfactorily settled within Four (4) calendar days, the delegate (where relevant) shall approach the next level of management for further discussion. The matter shall then be discussed between the employee, the employee’s line manager, the elected delegate (where relevant) and the next level of management;
8.1.4. If the matter is still not resolved within Four (4) calendar days, the elected delegate (where relevant) shall advise the appropriate union official as nominated by the State Secretary of the Union. Discussions shall then be held between the nominated representative of the Company and the appropriate union official. The elected delegate, the employee and appropriate line manager may be involved at this level;
8.1.5. If the matter is not settled it may be submitted to the Australian Industrial Relations Commission which will conciliate with the parties to resolve the issue, or failing settlement by conciliation, shall arbitrate to resolve the issue;
8.2. At all times, it is agreed that while the dispute settlement procedure is in process, the status quo shall prevail and work will proceed normally.
[4] Part 6-2 of the Fair Work Act 2009 (“the FW Act”) does not apply to the dispute resolution procedure in this agreement, or by reason of s. 7 of the Workplace Relations Act 1996 (“WR Act”), Part 13 of the WR Act. The correct legislative provision for the conduct of this dispute is s.170LW of the Workplace Relations Act 1996 (“pre-reform Act”). The Respondent is Coles Group Supply Chain Pty Ltd (“the Respondent”). The Respondent helpfully set out its understanding of the transitional arrangements which provide the jurisdiction for Fair Work Australia to deal with this dispute as an Appendix to its submissions 1.
[5] The application concerns the interpretation of clause 26.6 of the Agreement and its interaction with the manner in which the employer wishes to allocate overtime to employees.
[6] Conciliation of the dispute was conducted before another member of the Tribunal and as the conciliation was unsuccessful in resolving the dispute the matter was allocated to me for arbitration.
[7] A hearing was conducted on Friday 27 August 2010. The Applicant was represented by Mr John Dwyer of Counsel, instructed by Ms Louise Hogg of Sciaccas Lawyers and Consultants and the Respondent was represented by Mr Steven Amendola of Blake Dawson Solicitors.
[8] Prior to the hearing a number of witness statements were prepared by both parties, however following discussions the matters in issue between the parties were narrowed to the point where the parties agreed that the issue in dispute could largely be determined on submissions.
[9] At the hearing the Respondent relied on the evidence of one witness Mr McInerney. It was agreed between the parties that as the Respondent would only seek to rely on paragraphs 1 to 7, 10 to 17 and 19 to 25 of Mr McInerneys witness statement the Applicant would not require Mr McInerney to be called to give evidence. 2 On that basis the statement was tendered in amended form.3 The Applicant did not call any witnesses.
[10] An outline of submissions was tendered by both the Applicant 4 and the Respondent.5
[11] In order to assist the parties in resolving the dispute between them I issued directions requiring the Applicant and Respondent to provide an agreed statement of facts and also a list of questions that the parties require the Tribunal to answer.
[12] The agreed statement of facts was tendered at the hearing as follows:
STATEMENT OF AGREED FACTS
In accordance with the directions issued by Commissioner Simpson, the Applicant and Respondent set out the following agreed statement of facts:
1. The Respondent operates several distribution centres nationally and for the purposes of these proceedings operates three distribution centres at Heathwood, Brisbane. These centres are Coles Forest Lake, Coles Heathwood and Liquorland - Heathwood.
2. The Applicant represents the interests of union members engaged by the Respondent in the sites at Coles Forest Lake, Coles Heathwood and Liquorland - Heathwood.
3. Employees of the Respondent are engaged and work under the conditions set out in the agreement known as the Coles Myer Logistics Forest Lake Distribution Centre Certified Agreement 2005 (Agreement).
4. That clause 26 of the Agreement outlines the process for allocation and payment of overtime to employees.
5. That clause 8 of the Agreement outlines the process for settlement of disputes pertaining to the Agreement
6. That clause 5 of the Agreement outlines a number of objectives regarding the application of the Agreement to which the Applicant and the Respondent have agreed.
7. The Respondent has the ability to monitor the performance of its employees.
8. The ability to work overtime at the Respondent’s distribution centre both before and after February 2010 was generally available to those employees who volunteered for it.
9. Before February 2010, most employees who volunteered for overtime hours were given the opportunity to work overtime unless there was a particular reason not to do so, such as absenteeism.
10. After February 2010, in order to increase the efficiency of the distribution centre, the Respondent took measures to reduce the amount of overtime that was worked in its operations.
11. Volunteering on its own was not enough to guarantee overtime work.
12. In those circumstances, the Respondent distributed available overtime hours initially to those volunteers who were the most productive. 6
[13] The parties also tendered the following question to be answered by the Fair Work Australia:
QUESTION
• Is productivity based allocation of overtime inconsistent with clause 26.6 of the Coles Myer Logistics Forest Lake Distribution Centre Certified Agreement 2005?
[14] RELEVANT PROVISIONS OF THE AGREEMENT
Clause 5 of the Agreement provides as follows:
5. OBJECTIVES OF THE AGREEMENT
The parties to this agreement acknowledge that the objective of this Agreement should be to work collectively to improve the working environment and to increase the productivity, flexible operation, efficiency and prosperity of the Company.
The terms of this agreement are aimed at providing, in a competitive market place, a Supply Chain that is in conformity with the vision and goals of the Company. The Company and the Union recognise the contribution of all parties to this agreement in setting a framework for increased productivity and profitability, and to the long-term security and financial well being of its employees.
The parties further agree that in order to improve its competitive position the Company requires full flexibility to operate on a twenty-four hour, seven day per week basis around the needs of stores, suppliers and customers.
The provisions of this agreement are aimed at providing the basis for continued flexibility and security of employment through:
1. All employees, including managers at all levels and elected union representatives, working co-operatively as a team;
2. Continuous monitoring of performance, behaviour and results to ensure that the Company continuously improves productivity with the aim of meeting and/or exceeding world best practice;
3. Ensuring that the total workforce is committed to quality of product, personal and workplace safety and meeting or exceeding customer needs;
4. Ensuring all employees benefit from the improved competitiveness and prosperity of CML;
5. Employees understanding and accepting Company Policies and Procedures which are made known to them and which are necessary to ensure a safe and efficient operation.
The parties to this Agreement recognise their shared interests in maintaining and enhancing the efficiency, productivity and continuous improvement of CML in the competitive market in which it operates.
The parties to this Agreement further agree to work to facilitate the introduction of such innovations in work practices and technology in order to achieve the goals of protecting employment, improving the productivity, competitiveness and prosperity of the Company.
To assist in achieving the desired objectives, the Company will carefully select the best people available to work in its operation and to create a safe work environment that fosters teamwork and co-operation amongst employees at all levels.
This environment will ensure, job satisfaction for all employees, high productivity and confidence in Coles Group Supply Chain Pty Ltd to continue to invest in the Company to the benefit of employees and customers alike.
The parties to this Agreement acknowledge that workplace flexibility (as per the terms in this agreement) is a condition of employment of all employees. All employees will carry out reasonable and lawful directions and duties that are within their skill, competency and training, provided the employee is capable of performing the work in a safe manner.
The parties further agree that the Company has the ability to maximise the efficiency of its operations through flexibility in the assignment of appropriately skilled employees. Employees will perform the full range of tasks, required by the Company limited only by their skills, knowledge, training, capability, and safety considerations.
Maximising permanent employment within the workforce wherever possible. When a vacancy occurs the Company will give first consideration to the employment of a permanent employee depending on the needs of the business. Management reserves the right to continue to manage the business on a commercial basis.
It is acknowledged between the parties that this clause is to be interpreted in the context of the all other clauses in this Agreement.
[15] Clause 12.2 of the Agreement provides as follows:
12. CLASSIFICATION STRUCTURE
12.2 Grade 1 Store persons-
...
Promotional Criteria
The Company recognises the minimum performance level of 85%. Employees are encouraged to perform at this level. Performance at less than 85% will be investigated individually.
[16] Clause 26.6 of the Agreement provides as follows:
26. OVERTIME
26.6 Overtime will be offered as evenly as possible to employees. Operational factors may also influence the allocation of overtime - e.g. the Company may need a Grade 6 employee to perform Grade 6 functions in overtime.
APPLICANTS CASE
[17] The SDA made the submission that the issue in dispute has arisen as a result of changes made by the Respondent during February of 2010 to its procedure for determining how overtime is allocated to employees who are employed at the Forest Lake Distribution Centre.
[18] In the Applicants submission the change involved the Respondent giving preference to employees who attain a ‘pick rate’ of 100% or higher in a context where an 85% ‘pick rate’ is considered the acceptable minimum rate and where bonuses are paid to employees who exceed that rate. 7 The Applicant has asserted that the custom and practice at the workplace prior to February of 2010 was that employees of the Respondent who volunteered for overtime were generally successful in obtaining it - if not that day then on the basis that there name was effectively in a queue.
The practice was that persons working in the distribution centre wanting to access overtime on a weekly basis, as I’m instructed, would place their name on the list as being interested in performing overtime hours and, subject to the hours available, the persons on the list would be allocated an allotment of overtime. If there were less hours than people, what would happen typically would be that a person who missed out in one week would be given priority the following week and, in effect, the system operated in a way that for most part anybody who had an interest in performing overtime would get access to it; if not in the week that they put their hand up, in the following week.
It was a system which we say was in the spirit of clause 26.6, in that the overtime was allocated evenly to people who were interested in performing that work. The offer was an open offer in the form that people just had to go and sign the list and then, subject to the availability of hours, they would be assigned overtime.
THE COMMISSIONER: So you’re saying there was an assembly line almost and, as your name came up the list, your allocation was granted?
MR DWYER: Precisely.
THE COMMISSIONER: Okay.
MR DWYER: As I’m instructed, there were names on the list. They worked down the list until they reached the - they exhausted the hours available and then anybody who was cut off, anybody who missed out that week, would be effectively moved to the top of the list for the following week, assuming that that was suitable to them; if they were available the next week to do the hours...” 8
[19] Clause 12 of the Agreement provides that the minimum performance level of 85% (which I understand to mean a ‘pick rate’ of 85%) is the level at which clause 12 provides employees are encouraged to perform at.
[20] It was the Applicants contention that when the procedure for the allocation of overtime was altered by the Respondent in February 2010 the effect of that alteration was that employees who would otherwise have accessed overtime are now being denied access to overtime. The Applicant submits that this alteration offends clause 26.6 of the certified agreement. The Applicant explained it this way in submissions;
MR DWYER:....A new system was introduced in the early part of this year; around February or March it commenced operation. The allocation of overtime followed roughly the same practice, with one very significant exception; that is, that overtime was allocated based on a new criterion. It wasn’t just the appearance of your name on the list, but it was a demonstrated performance in the preceding week of a pick rate of 100 per cent or more. 9
It wasn’t the only criteria, but it was a preferential criteria, so that in effect the starting point for the allocation was overtime was to not have regard to the names on the list but to have regard to the names on the list that had a 100 per cent pick rate or higher. That occurs in the context of a workplace where the recognised minimal acceptable pick rate for employees is 85 per cent, so it’s a reward based allocation of overtime as opposed to the previous system which was, “Put your hand up and if there are hours available, you’ll get them.” 10
The effect of the two systems, we say, is this: under the previous system and the appropriate application of 26.6 as we see it, in essence nobody missed out on overtime. Under the new system we say that there are a significant number of people missing out and even on the figures provided by the respondent, there is on average three people per week who would previously have had access to overtime now being excluded by virtue of their failure to achieve the 100 per cent pick rate. 11
[21] The Applicant made reference to data provided by the Respondent and made the submission that based on the Respondents data between 28 March 2010 and 11 July 2010 (a period of 15 weeks after the change to procedure) 286 allocations of overtime were made (approximately 19 per week). That data indicates 47 refusals for overtime due to the employee being below the set ‘pick rate’ of 100% which is on average just over three per week.
[22] The Applicant contends that the Respondents current practice is inconsistent with clause 26.6 because it is not distributing overtime “evenly”. The Applicant referred to the decision in Nylex Industrial Products Pty Ltd v TCFUA [2007] FMCA 2084 to support the submission that the meaning of clause 26.6 can be determined by reference to :
(i) the natural meaning and ordinary meaning of the words; and
(ii) the context of the words in the clause and the agreement as a whole; and
(iii) the meaning and intent of the parties to the agreement (by reference to the practices adopted in respect of the clause).
[23] To support its contentions about the natural and ordinary meaning of the word “evenly” found in clause 26.6 the Applicant tendered an extract from the Shorter Oxford English Dictionary 6th Edition Volume 1 12 which defined “evenly as:
In an equal degree or proportion; In equal shares, equally; as much on one side as on the other; To the same degree throughout...”
[24] The Applicant also tendered an extract from 3rd Revised edition of the Macquarie Dictionary which does not define the word “evenly” however defines “even” as:
“...equal in measure or quantity...”
[25] The Applicant contends the obvious meaning of “evenly” having regard to the definitions provided is synonymous with the word “equally”.
[26] To support its contentions regarding the interpretation of the words in the clause in the context of the Agreement as a whole the Applicant described clause 26.6 as contemplating an “offer” of overtime to “employees”. The word “evenly” is to be read in conjunction with the word “offer” and “employees”. Therefore the Applicant contends “evenly” describes the way in which the offer is made, and “employees” describes who the offer is made to.
[27] On this basis clause 26.6 should be read to mean the “offer” of overtime is an offer at large to employees and is not open to limitation in this class of persons. The second part of clause 26.6 reads as follows:
“Operational factors may influence the allocation of overtime - e.g. the Company may need a Grade 6 employee to perform Grade 6 functions in overtime”.
[28] The Applicant submits that this part of the clause relates solely to the type of work available which might limit the persons who may access the overtime because they are not suitably qualified to perform the nature of the overtime available.
[29] To summarise the Applicants reading of clause 26.6, for an offer to be made “evenly” to “employees” who are otherwise qualified it cannot expressly or by effect exclude employees who are otherwise qualified.
[30] In reference to clause 5 the Applicant made reference to a number of passages within clause 5 to support its view that clause 5 only reinforces its reading of clause 26.6.
[31] The Applicant submitted that since 2005 the accepted minimum level of performance was a ‘pick rate’ of 85% and referred to clause 12.2 and 12.3 of the Agreement to support this view and also to what it described as the custom and practice at the workplace. The Applicant said this custom and practice was the best evidence of the parties with regard to the intended meaning of clause 26.6.
[32] On this basis the meaning and intent of the parties to the agreement by reference to the practices adopted in respect of the clause support the conclusion that it is contrary to the parties’ intention to limit access to overtime of employees who are exceeding the accepted minimum level of performance by 15%.
[33] The Applicant also made the submission which was not contested that the Agreement also operates at other sites run by the Respondent and that the allocation of overtime at the Healthwood Distribution Centre, which is in close proximity to the Forest Lake facility, is not subject to the restrictions that have been introduced at Forest Lake.
[34] In conclusion the Applicant requested that Fair Work Australia should order that the productivity based allocation of overtime at the Forest Lake Distribution Centre should cease. The Applicant made no submission as to why an order was necessary as opposed to making a decision on the question that had been agreed between the parties.
RESPONDENTS CASE
[35] The Respondents case focussed heavily on Clause 5 of the Agreement. The Respondent in its submissions made reference to the Macquarie Dictionary definition of objective and object which it set out as;
Objective:...of or relating to that which can be known, or to that which is an object or a part of an object.
Object....the end towards which the effort is directed: the object of the visit. 13
[36] The Respondent submitted that the purpose of clause 5 of the Agreement is to set out the end towards which the parties’ efforts in making the agreement are directed.
[37] It was the submission of the Respondent that the last sentence in clause 5 is a non sequitur.
That paragraph reads:
“It is acknowledged between the parties that this clause is to be interpreted in the context of the all other clauses in this Agreement.”
[38] The Respondent submitted that a literal approach in the interpretation of clause 5 results in an absurdity, and that the correct interpretation of the last paragraph must be that the specific provisions of the Agreement are to be read in the context of the objectives of the clause, otherwise the objectives clause would have no work to do. 14
[39] The Respondent argued a literal or technical interpretation would restrict the effectiveness of clause 5 to achieve a legitimate practical purpose. On that basis it argued that clause 5 should be read as if modified to avoid absurdity and inconsistency and that clause 5 should be read as if it says that other clauses of the Agreement are to be interpreted in the context of the objectives set out in clause 5.
[40] The Respondent relied upon Project Blue Sky Inc v Australian Broadcasting Authority (1998) 153 ALR 490 and the following passage at [78]:
...the duty of a Court is to give the words of a statutory provision the meaning that the legislature is taken to have intended them to have. Ordinarily the meaning (the legal meaning) will correspond with the grammatical meaning of the provision. But not always. The context of the words, the consequences of a literal or grammatical construction, the purpose of the statute or the cannons of construction may require the words of a legislative provision to be read in a way that does not correspond with the literal or grammatical meaning.
[41] The Respondent also relied upon Nylex Industrial Products Pty Ltd v TCFUA [2007] FMCA 2084 where Federal Magistrate O’Sullivan concluded at [30] that:
The principles....distilled for the purpose of this matter, are to:
• assert the ‘natural and ordinary’ meaning of the words used; and
• read the words in the context of the clause in which it is contained and the agreement as a whole; and
• do so having regard to the nature and purpose of certified agreements under the Act.
[42] The Respondent also referred to the following part of paragraph [22] of that decision which says:
Those principles are usefully summarised in City ofWanneroo v Holmes (1989) 30 IR 362 at 378...
it must be remembered that awards are made for the various industries in the light of the customs and working conditions of each industry, and they frequently result ... from an agreement between the parties, couched in terms intelligible to themselves but often framed without that careful attention to form and draughtsmanship which one expects to find in an Act of Parliament. I think, therefore in construing an award, one must always be careful to avoid a too literal adherence to the strict technical meaning of words, and must view the matter broadly, and after giving consideration and weight to every part of the award, endeavour to give it a meaning consistent with the general intention of the parties to be gathered from the whole award.” - see also Re Crown Employees (Overtime) Award (1969) AR(NSW) 60, 63; Re Hospital Employees Administrative and Clerical (State) Award (1982) 2 IR 123....’
[43] The Respondent also relies on paragraph [24] of that decision where Federal Magistrate O’Sullivan said as follows:
Although made in the context of the interpretation of awards, the approach of His Honour Justice Madgwick in Kucks v CSR Ltd (1996) 66 IR 182 (“Kucks”) is also applicable in the interpretation of agreements. The relevant passage from Kucks reads:
“It is trite that narrow or pedantic approaches to the interpretation of an award are misplaced. The search is for the meaning intended by the framer(s) of the document, bearing in mind that such framer(s) were likely of a practical bent of mind: they may well have been more concerned with expressing an intention in ways likely to have been understood in the context of the relevant industry and industrial relations environment than with legal niceties or jargon. Thus, for example, it is justifiable to read the award to give effect to its evident purposes, having regard to such context, despite mere inconsistencies or infelicities of expression which might tend to some other reading.
And meanings which avoid inconvenience or injustice may reasonably be strained for. For reasons such as these, expressions which have been held in the case of other instruments to have been used to mean particular things may sensibly and properly be held to mean something else in the document at hand.
But the task remains one of interpreting a document produced by another or others. A court is not free to give effect to some anteriorly derived notion of what would be fair or just, regardless of what has been written into the award. Deciding what an existing award means is a process quite different from deciding, as an arbitral body does, what might fairly be put into an award. So, for example, ordinary or well-understood words are in general to be accorded their ordinary or usual meaning.”
[44] The Respondent argues that if clause 5 is read in this context it gives meaning to the words “as evenly as possible” in clause 26.6 of the Agreement. The Respondent also relies on a series of statements extracted from clause 5 which generally demonstrate a joint commitment to productivity, efficiency and flexibility 15 to support its contention that a purposive approach should be preferred to a literal approach to achieve a proper construction of the Agreement.
[45] The Respondent submits that section 5 is an ‘agreement in advance’ that entitles the Respondent to take account of operational factors such as a desire to maximise efficiency, productivity and prosperity of its operations by selecting the best people when it offers overtime hours pursuant to clause 26.6.
[46] In the alternative the Respondent argued that even if the submission that clause 26.6 should be read in the manner it contends is not accepted, in any event the Respondent has not failed to offer overtime as evenly as possible. The Respondent argues that this is so because it was in the context of an overall reduction in the number of overtime hours worked at Forest Lake which was occurring as part of a commercial approach to reduce the allocation of overtime and other work requirements to achieve the lowest possible cost to the business.
[47] The Respondent argued that this approach is supported by the second sentence in clause 26.6, “...operational factors may also influence the allocation of overtime...” and that such operational factors would include the need to reduce the amount of overtime available and the cost of that overtime to the business.
CONSIDERATION
[48] His Honour, Vice President Lawler, in Watson & Ors and ACT Department of Disability Housing and Community Services [2008] AIRC 291 (8 April 2008), summarised the approach to the construction of an industrial instrument in the following way;
“In summary, the general principles governing the construction of contracts laid down by the High Court in Codelfa Construction Pty Ltd v State Rail Authority of New South Wales applies to the construction of industrial agreements.
However, consistent with the approach in Kucks and Short v FW Hercus Pty Ltd, an industrial agreement must always be construed in context: the context of particular provisions within the agreement as a whole and the context in which the agreement was made including any relevant statutory or historical context. Extrinsic evidence as to the context in which the agreement was made, including the statutory and historical context, will be admissible to demonstrate the existence of ambiguity and or to resolve ambiguity.”
[49] I am required in this matter to consider the plain words of the Agreement, within the broader terms of the agreement, and the circumstances and facts surrounding the making of the agreement to determine its intention.
[50] Point 9 of the Agreed Statement of Facts supports the conclusion that overtime was generally available to all employees who volunteered to perform it before at least February 2010 regardless of the employees “pick rate”. The exception being, if there was a particular reason to refuse access to overtime, such as absenteeism.
[51] It is logical to deduce from this that if overtime is being offered on the basis that it is shared evenly amongst those who seek to perform it then a reasonable expectation would exist that those who volunteer for overtime will receive an equal share of the overtime that is available, whatever that may be.
[52] The evidence of Mr McInerney provides an explanation for how the move to a productivity based system for the allocation of overtime from an allocation system based on the order of employees volunteering has contributed to productivity improvements at the distribution centre. I do not doubt the evidence of Mr McInerney in that regard although he does say in his evidence that “A reduction in overtime was one of many factors which were a part of our continuous improvement activities at Forest Lake.” 16
[53] Of course evidence of the achievement of a productivity gain in its own right cannot justify operating outside the terms of an agreement which parties have entered into and are bound to comply with.
[54] Points 10, 11 and 12 of the Agreed Statement of Facts between the parties establishes that the Respondent accepts following the introduction of the new method of allocating overtime hours that such hours were being offered firstly to those volunteers with ‘pick rates’ of 100% or higher.
[55] During submissions there was some discussion on this point and it is my understanding that the Respondent accepted the submission of the Applicant that the number of employees whose request to perform overtime was refused on the basis that the employee had a ‘pick rate’ of less 100% was just over an average of three per week. 17
[56] I have given consideration to the submissions regarding the words in the second part of clause 26.6 “Operational factors may influence the allocation of overtime - e.g. the Company may need a Grade 6 employee to perform Grade 6 functions in overtime”. I am persuaded by the submission of the SDA that the reference to “operational reasons” is intended to pertain primarily to the type of work required to be performed.
[57] Allocation of available overtime may be limited by an employee’s training depending on the nature of the work. It may also extend for example to situations where a particular machine is not in working order. I do not believe whether an employee has a ‘pick rate’ of for example 90% as compared to 105% falls within the meaning of the expression ‘operational factors’ as contained in clause 26.6.
[58] I am also influenced by the Applicants argument with regard to custom and practice regarding overtime allocation. The Applicant made the submission which was not contested that the custom and practice regarding the manner in which overtime has been allocated from 2005 until February 2010 has been consistent with the method it described as having operated before February 2010 where overtime was shared equally between those who volunteered to perform it.
[59] Under the terms of the WR Act for an agreement to be extended and varied it needs to go through an approval process. In accordance with Section 2A(4) of Division 1 of Part 2 of Schedule 7 of the WR Act such an extension and variation required a valid majority of employees bound by the Agreement at the time of making the extension and variation to agree to it. The Agreement in this matter went through an approval process for extension and variation and the method of allocating overtime remained consistent before and after this process. The manner of allocating overtime was consistent for a considerable period of time both before and after the extension and variation.
[60] It is the Respondents view that if clause 26.6 is read in the context of clause 5 the employer is entitled to offer overtime in the manner it proposes.
[61] The final paragraph of Clause 5 reads as follows:
“It is acknowledged between the parties that this clause is to be interpreted in the context of the all other clauses in this Agreement”.
[62] The Respondent has argued that this part of clause 5 is a non- sequiter. On my reading of the last paragraph of clause 5 I do not believe that paragraph when read in the context of the rest of the Agreement needs to be modified to avoid absurdity and inconsistency as has been suggested.
[63] As I understand the last paragraph of clause 5 it is an acknowledgement that clause 5 is to be interpreted in the context of all other clauses, in other words the correct construction of clause 5 is that other clauses are not intended to be read down or made subordinate to clause 5.
CONCLUSION
[64] I have had regard to the outline of submissions tendered by both parties, the oral submissions made by the parties at the Hearing, and the evidence in the witness statement provided by the Respondent.
[65] The Respondent is perfectly entitled to reduce the number of overtime hours performed at the workplace, and that is accepted by the Applicant. 18 However the Respondent has not only reduced the number of overtime hours, it has introduced a new criteria for determining who will work those overtime hours with preference being given to employees whose productivity is at the 100% ‘pick rate’ or above. Ordinarily that would not be controversial.
[66] In this particular case however the Respondent has sought to introduce this new criteria for the allocation of overtime while being a party to an Agreement that has been on foot since 2005 and says in quite clear terms ‘Overtime will be offered as evenly as possible to employees’.
[67] In Queensland Public Sector Union of Employees v Department of Corrective Services 19President Hall of the Queensland Industrial Relations Commission stated:
“....it must be emphasised that the purpose of an award is now the starting point rather than a consideration to which regard may be had where analysis of the natural and grammatical meaning of words used does not lead to the formation of a conviction that a particular construction is correct.”
[68] According to submissions it has been the custom and practice at the workplace from 2005 until February 2010 that overtime has been allocated evenly amongst those who volunteered to perform overtime. This was conceded by the Respondent. 20 It is also consistent with a plain reading of the language in clause 26.6 of the Agreement. In fact the Applicant stated in submissions that the practice predates the 2005 Agreement.21
[69] It appears to me that clause 26.6 has been interpreted and accepted by both parties in a particular way and that intent had been reflected in the practice of the parties for a number of years.
[70] I believe this consistent pattern of conduct is a reasonable indication that the agreed intention of the parties regarding clause 26.6 was to give effect to such a method of allocating overtime as had been done between 2005 and February 2010. There is support for this conclusion from the fact that the agreement was varied and extended in October 2008 and clause 26.6 remained unchanged.
[71] To now have one party unilaterally depart from this adopted interpretation and practice suggests that it was simply fortuitous at a particular moment in time to adopt a different view about what had been agreed. There has been no mystery about how clause 26.6 had worked. An opportunity arose to review clause 26.6 in 2008 however it was allowed to continue to operate on the same principles as it had done for a number of years. The confusion that the employer now says surrounds the interpretation of the agreement is disingenuous.
[72] It appears sufficiently clear to me from the evidence that at least some employees who wish to volunteer for overtime and are achieving a ‘pick rate’ of less than 100% are beginning to receive less overtime then employees who are achieving a ‘pick rate’ of 100% or greater. Over time under the method of overtime allocation the Respondent has implemented since February 2010 this will necessarily continue to occur.
[73] It is also sufficiently clear to me that this is occurring because of the new method of allocating overtime that was introduced in February 2010.
[74] I base this view on the statistics contained at paragraphs 5, 6 and 7 of the Applicants submissions which are not contested and reveal that on 47 occasions (or an average of just over three times per week) from March 2010 to July 2010 employees with a ‘pick rate’ of under 100% were refused overtime.
[75] I am satisfied that at least some employees who are achieving a ‘pick rate’ of less than 100% are not being offered overtime as evenly as employees who achieve a ‘pick rate’ of 100% or greater. In fact it is common ground between the parties that this is what is occurring and the Respondent has explained that this is part of a strategy to improve productivity and efficiency.
[76] Clause 26.6 is a specific clause which describes what the parties have agreed in regard to the allocation of overtime. The current method of allocating overtime being utilised by the Respondent as described in the witness statement of Mr McInerney at paragraphs 14, 15 and 16 is not ensuring that overtime is offered as evenly as possible.
[77] I am of the view that a plain reading of clause 26.6 reveals a clear agreement between the parties about the manner in which overtime will be distributed. I believe it is inappropriate to interfere with the clear meaning in clause 26.6 by attempting to interpret it in another way by reference to other clauses when no ambiguity or confusion arises from the words in the clause when given their natural meaning.
[78] For the reasons I have discussed earlier I do not agree with the Respondents submission regarding the need for the reading of the last paragraph in clause 5 to be modified to avoid absurdity and inconsistency. I have formed a clear view about the natural and grammatical meaning of the words used in clause 26.6.
[79] The question that I have been asked to answer by agreement between the parties is as follows:
Is productivity based allocation of overtime inconsistent with clause 26.6 of the Coles Myer Logistics Forest Lake Distribution Centre Certified Agreement 2005?
[80] It is my view that the answer to this question is yes, and that is so because the current productivity based system has led to a distribution of overtime in a manner that is inconsistent with clause 26.6. The Applicant in the final paragraph of its written submission stated that Fair Work Australia should order that productivity based allocation of overtime at the Forest Lake Distribution centre should cease. There was nothing further put on this point by either party in support or in opposition.
[81] I do not intend to make an order. I have addressed the question that the parties agreed to put for arbitration before the Tribunal. Instead I recommend that the parties have discussions as soon as possible in order to give effect to my determination as a means of resolving the dispute between them and ensuring that overtime is allocated in accordance with the terms of the Agreement.
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1 Exhibit 7
2 Transcript PN72-88
3 Exhibit 5
4 Exhibit 6
5 Exhibit 7
6 Exhibit 3
7 Exhibit 6 paragraph 3
8 Transcript PN 30 - 33
9 Transcript PN 1
10 Transcript PN 2
11 Transcript PN 35 -37
12 Exhibit 2
13 Exhibit 7 Paragraph 8
14 Exhibit 7 Paragraph 17
15 Exhibit 7 Paragraph 21
16 Exhibit 5 Paragraph 23
17 Transcript PN 94-102
18 Transcript PN133
19 Queensland Public Sector Union of Employees v Department of Corrective Services 170 QGIG 422 at 424
20 Transcript PN 121
21 Transcript PN 54
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