The Australian Workers' Union v Fluor Rail Services Pty Ltd
[2015] FWC 3137
•12 MAY 2015
| [2015] FWC 3137 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.739 - Application to deal with a dispute
The Australian Workers' Union
v
Fluor Rail Services Pty Ltd
(C2014/6881)
COMMISSIONER CLOGHAN | PERTH, 12 MAY 2015 |
Alleged dispute about any matters arising under the enterprise agreement.
[1] This is an application by the Australian Workers’ Union (AWU or Applicant) to the Fair Work Commission (Commission) to deal with a dispute in accordance with a dispute settlement procedure (DSP).
[2] The AWU is in dispute with Fluor Rail Services Pty Ltd (Employer).
[3] The application is made pursuant to s.739 of the Fair Work Act 2009 (FW Act).
[4] The DSP is contained in the Fluor Rail Services Pty Ltd, Pilbara Region, Maintenance (AWU) Enterprise Agreement 2013 (Agreement).
[5] At the hearing, the AWU was represented by Ms E Douglas, Legal and Industrial Officer. Evidence was given on behalf of the AWU by Mr C Wright, Resurfacing Operator and Mr C Lister, Track Worker.
[6] The Employer was represented, with permission, by Ms E Hartley of counsel.
RELEVANT BACKGROUND TO DISPUTE
[7] The Employer provides rail maintenance services to various mine sites in the Pilbara region of Western Australia.
[8] Approximately 180 employees are employed on rail maintenance services pursuant to a contract of employment and the Agreement.
[9] In September 2014, the Employer issued to employees, subject of this application, a notice regarding a proposed new work cycle.
[10] The then 14 days work following by 7 days off roster (14:7 roster) was to be changed to a 7 days work, followed by 7 days off roster (7:7 roster).
[11] As a consequence of a change to the work roster, the Employer reduced the annual salaries in the Agreement by 25%.
[12] The AWU does not agree to the roster change, but is not in dispute with the Employer regarding the roster change.
[13] The AWU is in dispute with the Employer regarding the 25% reduction in the employees’ annualised salaries as a consequence to the roster change.
[14] The new 7:7 roster commenced, for some employees in October 2014, and for other employees in January 2015. The employees received a 25% reduction in their annualised salary on commencement of the new roster.
RELEVANT PROVISIONS OF THE ENTERPRISE AGREEMENT
[15] The relevant provisions of the Agreement are as follows:
“PART C - FLY IN FLY OUT EMPLOYEES
This section applies to employees whose point of hire is outside the Pilbara Region.
36.0 WAGE RATES AND RELATED MATTERS
The annual salary includes compensation for travel time, working on public holidays, overtime loadings, annual leave loadings and any and all disabilities associated with the work, and the fly in fly out nature of the employment. (my emphasis)
36.1 Annual Salaries
The annual salaries contained hereunder apply to all full time and project hire employees, are all purpose rates and compensate for any and all disabilities associated with the work including annual leave loading. (my emphasis)
| CLASSIFICATION | AS AT 1 JANUARY | AS AT 1 JANUARY | AS AT 1 JANUARY | AS AT 1 JANUARY |
New Starter | $112,381 | $116,876 | $121,552 | $126,414 |
RW 1 | $120,452 | $125,270 | $130,281 | $135,492 |
RW 2 > 2 yrs service | $122,537 | $127,439 | $132,536 | $137,838 |
RW 1 > 5 yrs service | $124,635 | $129,621 | $134,805 | $140,198 |
RW 2 | $125,560 | $130,582 | $135,806 | $141,238 |
RW 2 > 2 yrs service | $127,776 | $132,887 | $138,202 | $143,730 |
↓ | ||||
Resurfacing Operator 6 (RO6) | $171,155 | $178,001 | $185,121 | $192,526 |
38.0 WORK CYCLES AND HOURS OF WORK
The annual salaries outlined above are based on a three week cycle of 2 weeks work and 1 week of roster.
The daily hours of work are 12 hours per day, usually worked between the core hours of 6:00 am and 6:00 pm.
Where the operational needs of the business require a different pattern of hours or work cycle, the annual salaries for the above work pattern will be used as a basis for calculating the appropriate annual salary for the new work pattern.” (my emphasis)
[16] The Agreement also provides, at Clause 4, the following provision:
“4.0 NO EXTRA CLAIMS
This Agreement shall form the complete agreement covering all terms and conditions of employment. It shall operate to the exclusion of any and all other agreements or awards.
The parties agree that this Agreement is intended to cover all industrial matters and agree not to make claims in respect of any matter during the life of this Agreement.
This Agreement is a complete statement of the mutual rights and obligations between us to the exclusion (to the full extent permitted by law) of other laws, awards, agreements, and like instruments.”
[17] The DSP at Clause 8 relevantly reads:
“8.0 DISPUTE RESOLUTION
...
Should the above steps not resolve the matter FRS and employee(s) agree:
- To allow either party to refer the matter to the Fair Work Commission for conciliation; and
- That if either party refers the matter to the Fair Work Commission, both parties will participate it eh conciliation process in good faith.
Where the dispute remains unresolved, it will be submitted to the Fair Work Commission for arbitration. The Fair Work Commission may exercise the procedural powers in relation to hearings, witnesses, evidence and submissions which are necessary to make the arbitration effective. The decision of the Fair Work Commission will bind the parties to the dispute, subject to either party exercising a right of appeal against the decision to a Full Bench.”
AWU SUBMISSION
[18] The AWU does not dispute that the annual salaries contained in the Agreement compensate for working a 14:7 roster and “travel time, working on public holidays, overtime loadings, annual leave loadings”.
[19] The AWU also does not dispute that the then existing annual salaries, and work cycle of a 14:7 roster, must be used to determine the annual salaries as a result of any new work cycle - in this case, the 7:7 roster.
[20] The AWU acknowledges that in calculating the annualised salaries for the new 7:7 roster, it must take into account the decreased working hours (on an equivalent hours basis). However, the AWU contends that the resetting of the annual salaries, must also take into account the increased travel time incurred by employees working the new 7:7 roster.
[21] In general terms, the AWU submits that the Employer’s reduction of 25% in the annual salaries should also include compensation for increased travel time. Should the additional travel time be compensated, it would, for the AWU, lessen the 25% reduction in annual salaries.
EMPLOYER’S SUBMISSION
[22] The Employer’s submission can be distilled to two matters.
[23] Firstly, the annual hours of actual work on the 14:7 roster were 2,912 hours. The annual work hours on a 7:7 roster are 2,184 hours. This reduction of 728 work hours is 25% of the previous 2,912 hours. Accordingly, the annual salaries have been reduced by 25%.
[24] With respect to travel, the Employer submits that, “Travel time has been compensated for as part of the overall annual salary and not as an additional hourly rate. This is due to the changing nature of when employees will be required to travel depending upon which panel/gang they are on, how long it can take and that travel can be during the paid work cycle, during the employee’s rest time or a combination of both.” 1
[25] The Employer “agrees that annualised salaries include compensation for travel time, but the quantum of this consideration cannot be identified as a discrete component within the annualised salary.” 2 However, “as the existing annual salary does not include a separate figure or component which can be extracted for travel time (and the same for the other disabilities, penalties and loadings), the only basis that can be used to reduce the annual salary is the reduced hours which are rostered to work in the new roster”3.
DISPUTE
[26] In my view, the dispute between the parties can be reduced to the proper construction of Clause 38 of the Agreement.
CONSIDERATION
[27] The Full Bench of the Commission, recently in The Australian Meat Industry Employees Union v Golden Cockerel Pty Limited[2014] FWCFB 7447, summarised the principles to be applied in the construction of an enterprise agreement. They are, for the purposes of this application, relevantly as follows:
“[41] From the foregoing, the following principles may be distilled:
1. ...
2. In construing an enterprise agreement it is first necessary to determine whether an agreement has a plain meaning or contains an ambiguity.
3. Regard may be had to evidence of surrounding circumstances to assist in determining whether an ambiguity exists.
4. If the agreement has a plain meaning, evidence of the surrounding circumstances will not be admitted to contradict the plain language of the agreement.
5. If the language of the agreement is ambiguous or susceptible to more than one meaning then evidence of the surrounding circumstance will be admissible to aide the interpretation of the agreement.
6. Admissible evidence of the surrounding circumstances is evidence of the objective framework of fact and will include:
(a) evidence of prior negotiations to the extent that the negotiations tend to establish objective background facts known to all parties and the subject matter of the agreement;
(b) notorious facts of which knowledge is to be presumed;
(c) evidence of matters in common contemplation and constituting a common assumption.
7. The resolution of a disputed construction of an agreement will turn on the language of the Agreement understood having regard to its context and purpose.
8. Context might appear from:
(a) the text of the agreement viewed as a whole;
(b) the disputed provision’s place and arrangement in the agreement;
(c) the legislative context under which the agreement was made and in which it operates.
9. Where the common intention of the parties is sought to be identified, regard is not to be had to the subjective intentions or expectations of the parties. A common intention is identified objectively, that is by reference to that which a reasonable person would understand by the language the parties have used to express their agreement.
10. The task of interpreting an agreement does not involve rewriting the agreement to achieve what might be regarded as a fair or just outcome. The task is always one of interpreting the agreement produced by parties.”
[28] The plain facts are that the Employer has changed the 14:7 work cycle to a 7:7 roster. As a consequence of this change in the work pattern, it is necessary, in accordance with paragraph three of Clause 38 of the Agreement, to determine what is the appropriate annual salaries for the new 7:7 roster using, as a basis, the then 14:7 roster.
[29] Both parties addressed the dispute primarily in relation to hours of work and travel time. Similarly in this Decision, I have primarily referred to hours of work and travel time but with a caveat explained later.
[30] A deconstruction of the third paragraph of Clause 38 of the Agreement can be set out as follows to determine whether it has a plain and unambiguous meaning:
1. when there is a requirement for a different pattern of hours of a work cycle;
2. the existing annual salaries;
3. for the 14:7 work cycle, will be used as the basis;
4. for calculating the appropriate annual salary for the new work pattern.
Is Clause 38 of the Agreement capable of more than one meaning?
[31] There is no dispute between the parties as to the quantum of the annual salaries referred to Clause 38 of the Agreement.
[32] There is no dispute between the parties that the annual salaries include compensation for “travel time, working on public holidays, overtime loadings, annual leave loadings and any and all disabilities associated with the work, and the fly in fly out nature of employment”.
[33] Where the parties disagree is the methodology of determining “appropriate” annual salaries, when there is a change in the work pattern.
[34] The Applicant submits that travel time must be considered and accounted for when there is a change in work pattern. This is because annualised salaries in Cause 36 of the Agreement, include a component for travel time.
[35] The Employer asserts that, while travel time is compensated for in annual salaries, the extent or proportion of that compensation, is unknown. Accordingly, as “the roster change reduces the actual hours worked by Employees by 25%...this is the proper basis upon which the reduction in annualised salaries should be based”. 4
[36] Clearly, both parties have contesting views as to the meaning and application of Clause 38 of the Agreement.
[37] I am satisfied that the construction of Clause 38 of the Agreement is capable of more than one interpretation as demonstrated by the submissions of both parties. Further, it is not clear in Clause 38, which party to the Agreement, has the enabling power to determine what are the “appropriate” annual salaries when there is a change in the work cycle.
[38] The annualised salaries in subclause 36.1 of the Agreement clearly have a nexus with the 14:7 work pattern, as well as other matters set out in Clause 36.
[39] The 14:7 roster provided for return travel in each three (3) week period for employees hired outside the Pilbara region of Western Australia. The new pattern of work requires return travel every two (2) weeks for employees.
[40] From the two subclauses in Clause 36 of the Agreement, it is patently clear that “travel time, working on public holidays, overtime loadings and annual leave loading” were factors included in the overall construction of annualised salaries.
[41] What is not clear from this combination of factors, is the “make up” or apportionment going towards the annual salaries. For example, if employees were no longer required to work on public holidays, to what extent (if any) would this factor be assessed and extracted from the annual salaries set out in subclause 36.1 of the Agreement.
[42] The factors of “travel time”, “working on public holidays”, “overtime loadings” and “annual leave loading” (with all other unnamed disabilities), and hours of work in a 14:7 roster, go towards the “whole” of annual salaries.
[43] Having established the components of annualised salaries in subclause 36.1 of the Agreement, it is necessary to return to paragraph three (3) of Clause 38 of the Agreement and determine what they should be, when there is a change in the work pattern.
What are the bases for “appropriate” new annual salaries?
[44] I am satisfied that the proposition in paragraph three (3) of Clause 38 of the Agreement is clear. If the work cycle changes, the hours in the work pattern (14:7) will be used as part of the bases for calculating the appropriate annual salary for any new work pattern.
[45] What is not clear in paragraph three of Clause 38 of the Agreement is, as I have already indicated, who determines what is “appropriate” and the method to determine what is the “appropriate” annual salaries.
[46] One view of the third paragraph of Clause 38 of the Agreement is that the “who” is not relevant, and the “appropriate” annual salaries logically follow from the annual total hours of work set out in paragraphs one (1) and two (2) of Clause 38. If this was the case, it would be reasonable to assume that the parties to the Agreement would have written paragraph three (3) in such a way that, if the total work hours were to be reduced to meet operational needs, the annual salaries would be reduced on a proportionate or pro-rata basis. In doing so, there would be no uncertainty of the meaning of the third paragraph, and the Employer’s methodology would withstand any criticism.
[47] However, total annual hours worked by employees is only one component of the make up of annual salaries.
[48] The word “appropriate”, according to the New Shorter Oxford English Dictionary, means “attached or belonging (to) as an attribute, quality, or right; peculiar (to), inherent, characteristic; specially suitable (for, to) proper fitting”.
[49] Having established the connection between annual salaries and its component parts of “hours”, “travel time” and the remaining factors in Clause 36 of the Agreement, it would seem inappropriate to include two particular variable factors when the work pattern changes, and ignore the remaining factors which make up annual salaries.
[50] In summary, it would seem odd or wrong, to consider only two components of the make-up of annual salaries when there is a change in the work pattern, and not the remaining constituent parts.
[51] By way of illustration, the Employer, when considering an “appropriate” disciplinary outcome (see subclause 13.2 of the Agreement), is required to consider, but is not limited to, the following:
- the seriousness of conduct;
- repetition or duration of the conduct;
- prior conduct and./or disciplinary action; and/or
- previous responses to disciplinary action.
[52] Shortly put, the parties, when making the Agreement, recognised that an “appropriate” outcome to poor performance or inappropriate behaviour, is not one dimensional but multi factorial. In the same way, annual salaries have multiple components and a change in one component (hours of work), in my view, cannot be considered in isolation and relied upon to produce the whole (annual salaries) divorced from constituent parts.
[53] In conclusion, I make the following observation. The Commission has not been provided with evidence, if there is any, regarding the apportionment of annual salaries. In the absence of this evidence, I consider that the parties in making the Agreement, adopted a global approach to the matter of travel time and its other constituent parts of annual salaries. Accordingly, the evidence of individual employees, while informative, is not persuasive of what, if any, travel time, should be accounted for in the resetting of the annual salaries following the introduction of the 7:7 roster.
[54] I consider it safe to say that individual travel circumstances were not considered in the making of the Agreement. Accordingly, a global approach would appear to be the only method to be used in resetting the annual salaries, when taking into account the changed travel time arrangements.
[55] I also make the observation that while travel time has increased with the new 7:7 roster, the annual salaries also include compensation for “disabilities associated with...the fly in fly out nature of employment”. Clearly, the disability of being away from home and family/friends for 14 days, has now decreased to seven (7) days during the new roster cycle. While this “disability” does not lend itself to quantification in the same way as hours and travel time, it would also seem appropriate that the positive improvement in this factor, and any other intangibles, be taken into account when resetting the annual salaries.
[56] In summary, I consider both parties have approached Clause 38 of the Agreement with a degree of selectivity. The Employer has focused exclusively on actual hours of work. The AWU, while acknowledging that there must be a focus on hours (equivalent) worked, has only considered “travel time”, but ignored other constituent parts which go to the “whole”, that is, annual salaries.
[57] Although Ms Hartley stated that it was impossible to “unscramble the egg” 5, the change to the 14:7 roster, has meant that the parties need to do that. The parties have to discover how many “parts” there are to hours of work, travel time, and the rest of the ingredients which make up annual salaries. Having done so, this will assist in determining the “appropriate” salaries for the 7:7 roster.
[58] While hours worked and travel time may be significant to a party’s analysis of what are the “appropriate” annual salaries for the new 7:7 roster should be, the parties have failed to take into account the remaining components which are clearly set out in Clause 36 of the Agreement. Selectivity, in my view, will inevitably lead to further interpretation issues relating to the third paragraph of Clause 38 of the Agreement should the 7:7 roster change in the future.
CONCLUSION
[59] In conclusion, I am not persuaded that the methodology adopted by both parties in determining the “appropriate” annual salaries following the introduction of the 7:7 roster is correct.
[60] Clauses 38 and 36 of the Agreement are inextricably linked. Accordingly, the “appropriate” annual salaries following any change in work pattern, must be determined taking into account all the constituent parts which go to make up those salaries. While the outcome may be the same as currently implemented by the Employer, there may be a different outcome. The “appropriate” annual salaries should be the subject of further discussions between the parties. Finally, the change to a 7:7 roster has clearly exposed flaws in Clause 38 of the Agreement and should be addressed, either before or during bargaining, for a replacement agreement.
COMMISSIONER
Appearances:
E Douglas, for the Applicant.
E Hartley, of counsel, on behalf of the Employer.
Hearing details:
2015:
Perth,
28 April.
1 Exhibit R1 p14
2 Exhibit R3 p2
3 Exhibit R1 (15)
4 Exhibit R4 (21)
5 Transcript PN283
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