The Association of Professional Engineers, Scientists and Managers, Australia v GM Holden Ltd

[2013] FWC 7416

[2013] FWC 7416

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.739—Dispute resolution

The Association of Professional Engineers, Scientists and Managers, Australia
v
GM Holden Ltd
(C2013/376)

Vehicle industry
DEPUTY PRESIDENT GOOLEY	MELBOURNE, 25 SEPTEMBER 2013

Alleged dispute concerning scope of agreement, top of band payment and wages and allowances.

[1] The Association of Professional Engineers, Scientists and Managers, Australia (APESMA) is in dispute with GM Holden Ltd (Holden) over whether Professional Engineers who are at Pay Points 4 and 5 of Band 4 are entitled to a top of the band payment.

The industrial instrument

[2] APESMA and Holden are covered by the Holden Enterprise Agreement 2011 (the Agreement).

[3] The Agreement provides for a Professional Engineer classification structure which has four bands and each band has a number of pay points. Progression though the pay points is based on performance. 1

[4] The Agreement provides for wage increases at clause 2.1.

[5] Professional Engineers are able to select one of three pay increase options. In this dispute we are only concerned with the consequences if a Professional Engineer chooses option A(i) or A(ii).

[6] Option A(i) provides for a 3% wage increase each year but Professional Engineers who select this option are not eligible for a pay point progression review during the life of the Agreement. 2

[7] Option A(ii) provides for participation in the 2011 and 2012 pay point progression reviews and if the Professional Engineer meets the criteria each year he/she will be entitled to a pay point progression and receive a 3% base pay increase in November 2013. 3

[8] Under option A(ii), if an employee reaches the top of the band as a result of the pay point progression in year one then they will receive a 3% increase in year two.

[9] In addition, clause 2.1.4.4 provides for an additional gainshare payment to those Professional Engineers who elect Option A(i) or Option A(ii) and who are at the top of the band in year two of the Agreement.

The dispute

[10] This dispute has arisen because of the decision in bargaining for the 2008 Agreement to make Pay Point 4 of Band 4 the highest pay point in the classification structure. If a Professional Engineer wished to progress to Pay Point 5 after the commencement of the Agreement they must opt out of the Agreement. Any Professional Engineer who was at Pay Point 5 of Band 4 at the commencement of the 2008 Agreement could elect to remain covered by the Agreement or could opt out of the Agreement.

[11] As a consequence there are Professional Engineers at Pay Point 4 and 5 of Band 4 who cannot access via the Agreement any pay increases other than through Option A(i) or Option B.

[12] APESMA submits that both groups of employees are at the top of the band while Holden submits that only those on Pay Point 5 of Band 4 are at the top of the band.

The negotiations

[13] The parties accepted that there was no discussion during bargaining about who was at the top of the Band 4.

[14] APESMA had included in its log of claims, a claim for an additional payment equivalent to the percentage difference between Pay Point 4 and 5 when the employee has reached the top of the band at as well as the reinstatement of Band 4, Pay Point 5 for the Engineering Classification Structure. Holden, as part of its log of claims, had sought the removal of Band 4 from the Engineering Classification Structure. 4

[15] Ms Sharelle Herrington an Industrial Officer with APESMA, said that during negotiations, APESMA had expressed concern that those employees who were at the top of their band were not able to choose the pay point progression option. After negotiations, Holden offered the additional payment in year 2 for those at the top of the band.

How the dispute arose

[16] The question of who was at the top of the band was raised in presentations given to employees by Ms Melanie Francese, Holden’s HR Manager, about the various pay options after the Agreement was approved. In answer to a question from a Professional Engineer about which pay point was the top of the band, Ms Francese said that Pay Point 5 of Band 4 was the top of the band. Mr Scott Gibbins, a Professional Engineer employed by Holden and an APESMA representative, told Ms Francese that APESMA did not agree with her answer. The dispute was then progressed through the dispute resolution procedure.

The Submissions of APESMA

[17] APESMA submitted that employees on Pay Point 4 of Band 4 and on Pay Point 5 of Band 4 have reached the top of the band as they cannot progress any further unless they opt out of the Agreement. APESMA submitted that the parties did not turn their minds to what was the top of Band 4. APESMA submitted that there is no definition of the phrase “top of the relevant band” and that the clause does not say that the employee must be at the highest enumerated pay point of a Band to be considered “top of the relevant band”.

[18] Further, APESMA submitted that the Agreement does not say that there can only be one pay point within a band that is the “top of the relevant band”. Consequently APESMA submitted that the highest-paid point which an individual employee can reach and maintain under the various options set out in the Agreement, is that employee’s relevant “top of the band” for the purpose of clause 2.1.4.4

The Submissions of Holden

[19] Holden submitted that the term “Top of Band” should be given its plain and logical meaning and that as a result, there is only one pay point at the top of the band.

[20] Holden further contends that the employees who are at the top of the band are those in Band 4, Pay Point 5.

[21] Ms Francese said that Professional Engineers on Pay Point 4 of Band 4 are not at the Top of the Band as they can elect to progress outside of the 2011 Agreement and be paid the equivalent to Pay Point 5 of Band 4. 5 In addition she said that while there were still employees at Band 4, Pay Point 5 then Pay Point 5 will constitute the top of the band.6

Clause 1.2.(b) of the Agreement

[22] The parties were invited to make submissions on whether clause 1.2(b) of the Agreement which provided for these employees to opt out of the Agreement is an unlawful term because it provides a method by which an employee or employer may elect (unilaterally or otherwise) not to be covered by the Agreement. 7

[23] Neither party addressed this in their final submissions.

[24] Clause 1.2(b) provides as follows:

“The Parties agree that Pay Point 4 of Band 4 of the Engineering Classification Structure (which is set out in clause 5.6.4) is the highest pay point to which a Professional Engineer or Scientist can progress after the date of this Agreement and still be covered by this Agreement.

A Professional Engineer or Scientist who, after the date of this Agreement, is eligible to and who chooses to progress beyond Pay Point 4 of Band 4 of the Engineering Classification Structure shall not be covered by this Agreement. From the date of the new contract of employment, the employee’s pay shall be increased to an amount equivalent to Pay Point 5 of Band 4 of the Engineering Classification Structure and the employee will not be covered by this Agreement.

A Professional Engineer or Scientist who, after the date of this Agreement, is eligible to progress beyond Pay Point 4 of Band 4 of the Engineering Classification Structure, but who wishes to still be covered by this Agreement, shall remain classified at and shall continue to be paid at Pay Point 4 of Band 4 of the Engineering Classification Structure and be eligible for all salary increases in accordance with clause 5.6.4 of this Agreement.

A Professional Engineer or Scientist who, as at the date of this Agreement, is paid at Pay Point 5 of Band 4 of the Engineering Classification Structure, may choose whether or not he or she is covered by this Agreement. If such an employee chooses not to be covered by this Agreement, the employee shall sign a new contract of employment. From the date of the new contract of employment, the employee will not be covered by this Agreement. If such an employee chooses to remain covered by this Agreement, or does not make a choice, the employee shall continue to be paid at Pay Point 5 of Band 4 of the Engineering Classification Structure, and be eligible for all salary increases in accordance with clause 5.6.4 of this Agreement.”

[25] The clause provides for certain employees to opt of the Agreement and it is my preliminary view that this clause is unlawful. As such the submissions of Holden that employees at Pay Point 4 of Band 4 of the Engineering Classification Structure are not at the top of the band because they have a choice to opt out of the Agreement, cannot be sustained.

[26] However, for the purposes of this decision, and given the parties have chosen not to address this issue in their submissions, I will assume that such a choice is available to these employees.

Findings

[27] It is clear that it was the intention of the parties to have a classification structure that concluded at Pay Point 4 of Band 4 of the Engineering Classification Structure. As the Agreement says it is the highest pay point to which an employee can progress.

[28] That decision was made as part of the 2008 enterprise bargaining round. Pay Point 5 of Band 4 remains in the Agreement to set the minimum rate of pay for an employee who opts out of the Agreement and to set the rate of pay for those employees who were at Pay Point 5 of Band 4 when the 2008 agreement was made and who have chosen to remain covered by the Agreement.

[29] It is clear from the language used in clause 1.2(b) that Band 4, Pay Point 5 is no longer a classification in the Agreement. Clause 1.2(b) makes it clear that employees at Band 4, Pay Point 4 are classified and paid at that level, while employees at Band 4, Pay Point 5 are paid at that level. The Agreement does not provide that they are classified at that level.

[30] I do not accept the submissions of the APESMA that in Band 4 there are two tops of band. In doing so I accept the submission of Holden that on the plain ordinary meaning of the language used in the Agreement there can only be one top of band.

[31] However I do not accept the submissions of Holden that the top of band is Pay Point 5 of Band 4. Under the Agreement an employee reaches the top of the band when he or she reaches a point in the classification structure in the Agreement where he or she cannot progress unless she or she is appointed to a position at a higher band or the job he or she is doing is reclassified at a higher band. For employees in Band 4 this occurs when he or she reaches Pay Point 4. No employee has been able to progress to Pay Point 5 of Band 4 since the 2008 Agreement was approved.

[32] It is not relevant that these employee can receive a pay increase equivalent to the pay point progression if he or she opts out of the Agreement. What is relevant is what is possible within the Agreement.

[33] While I accept that employees on Pay Point 5 of Band 4 cannot progress further under the Agreement, their position is different to the employees on Pay Point 4 of Band 4, as they have had their positions grandparented in that they are paid at Pay Point 5 of Band 4 even though this classification is no longer available under the Agreement.

[34] I do not accept the submissions of Holden that while there are still employees covered by the Agreement at Pay Point 5, Band 4, that this is the top of the band, and that when those employees are no longer covered by the Agreement, the top of the band would become Pay Point 4.

Conclusion

[35] The parties agreed that it was their intention to provide employees who had reached the top of the band with access to an additional pay increase. As I have concluded that Pay Point 4 is the top of Band 4, these employees are entitled to any pay increase that flows from clause 2.1.4.4 of the Agreement.

DEPUTY PRESIDENT

Appearances:

M Anthony for the Association of Professional Engineers, Scientists and Managers, Australia

F Anderson for GM Holden Ltd

Hearing details:

2013.

Melbourne.

18 July.

 1   See clause 5.6 of the Agreement.

 2   See clause 5.6.4.1 of the Agreement.

 3   Ibid.

 4   Exhibit R1 at MF4.

 5   Exhibit R1 at 19.

 6   Ibid.

 7   See section 194 of the Act.

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