The Australian Workers' Union v Treasury Wine Estate

[2015] FWC 4911

[2015] FWC 4911

FAIR WORK COMMISSION

RECOMMENDATION

Fair Work Act 2009
s.739—Dispute resolution

The Australian Workers’ Union
v
Treasury Wine Estate
(C2015/4477)

COMMISSIONER LEWIN MELBOURNE, 17 JULY 2015

Alleged dispute about matters arising under an enterprise agreement – dispute resolution – redundancy entitlements – recommendation.

[1] This Recommendation concerns a dispute the subject of an application made under s.739 of the Fair Work Act 2009 (Cth) by the Australian Workers’ Union (AWU), on behalf of its member Mr Arron Ball.

[2] The dispute concerns the application of the terms of the Treasury Wine Estates Vinters Ltd – Karadoc Enterprise Agreement 2012 (the Agreement). The Agreement contains a term for the settlement of disputes at cl.16. That term is set out below:

“16. Disputes Settling Procedure

16.1 This clause sets out the procedures for resolving disputes arising over the operation of this Agreement and the National Employment Standards.

16.2 The intention is to try and address matters arising in the work area concerned. If the matter involves issues affecting two or more work areas then it may be referred to the site consultative committee for consideration, however this will not operate to restrict or limit the operation of these procedures. If the matter requires urgent consideration or concerns matters involving either individual employees or single work areas or involves laboratory and/or maintenance employees, then it will be dealt with directly between employees, and if requested their representatives and the Company. The following process will apply for all matters:

Step 1 The employee/s concerned will first meet and confer with their immediate supervisor. A party to the dispute may appoint another person, organisation or association to accompany or represent them in relation to the dispute. If the matter involves issues affecting two or more work areas, and it is practicable to do so, then the matter may be referred to the site consultative committee for consideration.

Step 2 If the matter is not resolved at Step 1 the parties will arrange further discussions involving more senior site management, which may involve management representatives from other company offices.

Step 3 If a dispute in relation to a matter arising under the agreement is unable to be resolved at the workplace under Step 2, the dispute may be referred to Fair Work Australia or successor (“the Tribunal”) for resolution by mediation and/or conciliation and, where the matter in dispute remains unresolved, arbitration. If arbitration is necessary the Tribunal may exercise procedural powers in relation to hearings, witnesses, evidence and submissions which are necessary to make arbitration effective.

16.2 In order to facilitate this procedure:

16.2.1 The party with the grievance must notify the other party at the earliest opportunity of the problem;

16.2.2 Throughout all stages of the procedure all relevant facts must be clearly identified and recorded; and

16.2.3 Sensible time limits must be allowed for completion of the various stages of discussion. However, the parties must co-operate to ensure that the disputes resolution procedures are carried out as quickly as possible.

It is a term of this agreement that while the dispute resolution procedure is being conducted the status quo existing immediately prior to the matter giving rise to the dispute will remain. Work will proceed without stoppage or the imposition of any ban, limitation or restriction unless an employee has a reasonable concern about an imminent risk to his or her health or safety. However, the employee must not unreasonably fail to comply with a direction by the Company to perform other available work, whether at the same enterprise or another enterprise, that is safe and appropriate for the employee to perform.”

[3] By the operation of ss.738 and 739 of the Act the Commission may deal with a dispute arising over the operation of the Agreement in accordance with cl.16. The subject matter of the dispute is the operation of various terms of the Agreement which apply in redundancy situations. On my reading of the Agreement, the relevant clause is cl.21, which will be set out below.

[4] Mr Ball was until 1 July 2015, an employee of Treasury Wine Estates at its Karadoc Winery, in its packaging department. On 31 March 2015, Treasury Wine Estates informed the the Australian Stock Exchange (ASX), the AWU and its employees of what it referred to as intended “supply chain optimisation plans” in which notice of significant changes to the company’s supply chain network and cost base in both Australia and the USA was announced. Under the heading “Australia”, the following appears as part of the plan:

“…the packaging and warehousing of wines previously processed at Karadoc near Mildura Victoria will now occur at TWE’s state-of-the-art Wolf Blass facility in the Barossa, South Australia. The phased closure of packaging and warehouse operations at Karadoc is due to be completed during fiscal 2016.”

[5] Mr Ball was informed by this notice of the intention of Treasury (and discussions following) to cease packaging operations at Karadoc near Mildura and to have the operations performed at Nuriootra Park in the Barossa Valley.

[6] In light of the notification of the intended closure of the packaging department at Karadoc, in which Mr Ball was employed, Mr Ball sought other employment and was successful.

[7] The issue in dispute is the proper application (if any) of cl.21 of the Agreement, which is as follows:

“21. Redundancy

21.1 Discussions before Termination

21.1.1 Where an employer has made a definite decision that the employer no longer wishes the job the employee has been doing done by anyone and this is not due to the ordinary and customary turnover of labour and that decision may lead to termination of employment, the employer will hold discussions with the employees directly affected and with their Union or Unions.

21.1.2 The discussions will take place as soon as is practicable after the employer has made a definite decision which will invoke the provisions of the Introduction of Change clause 21.1.1 hereof and will cover, inter alia, the reasons for the proposed terminations, measures to avoid or minimise the terminations and measures to mitigate any adverse effects of any terminations on the employees concerned.

21.1.3 For the purpose of the discussion, the employer will, as soon as practicable, provide in writing to the employees concerned and their Union or Unions, all relevant information about the proposed terminations including the reasons for the proposed terminations, the number and categories of employees likely to be affected, and the number of workers normally employed and the period over which the terminations are likely to be carried out. Provided that any employer will not be required to disclose confidential information the disclosure of which would be harmful to the employer’s interests.

21.1.4 The Company, wherever possible will meet any redundancy requirements by way of voluntary redundancies. Whilst the acceptance or rejection of voluntary redundancies will be at the Company’s discretion it will make genuine endeavours to accommodate applications for voluntary redundancies. These endeavours, wherever possible will include retraining and redeploying other employees.

21.1.5 Business requirements, skills retention, redeployment and training opportunities are factors to be taken into account in deciding upon any voluntary or involuntary redundancies.

21.2 Redundancy Payments and Other Provisions

21.2.1 The redundancy provisions outlined in Appendix 2 to this Agreement will apply to all qualifying employees who are covered by this Agreement.”

[8] It will be observed that the Agreement provides for specified discussions to take place pursuant to cl.21.1 in a redundancy situation and prescribes redundancy payment and other provisions by cl.21.2 and Appendix 2 of the Agreement. Appendix 2 of the Agreement is set out below:

“Appendix 2 – Redundancy Provisions

1. Transfer

An employee whose current position becomes redundant may be offered an alternative position. Any such employee accepting a new position shall not be entitled to redundancy payments should the new position prove to be unsuitable at a later time. The transmission of business rules set out in the Act will otherwise apply

2. Entitlement

From the date of notification of intending redundancy all such employees shall be entitled to full redundancy payments calculated to their actual termination date if they elect to terminate prior to the nominated redundancy date.

3. Time off for Interviews

All such employees shall be allowed reasonable time off to attend job interviews subject to providing proof acceptable to the Company.

4. Assistance

The Company undertakes to assist all such employees in gaining new employment by liaison with other employers and the local employment network.

5. Ordinary Dismissals

An employee dismissed as a result of gross negligence, misconduct or unsatisfactory work performance during the course of ordinary business shall not be entitled to any severance payments.

6. Superannuation

All such employees who are members of the Company’s Superannuation Funds shall receive all entitlements as defined under the Trust Deeds.

7. Notice of Retrenchment

All such employees will receive a minimum of four (4) weeks notice of termination of employment or payment in lieu thereof.

8. Redundancy Payments

8.1 In addition to clause 7 redundant employees shall be entitled to a severance payment calculated as follows:

8.1.1 All such employees will receive four (4) weeks pay.

8.1.2 All such employees will receive an additional payment at the rate of four (4) weeks pay for each completed year of service plus pro-rata payment for each additional completed month of service.

8.1.3 All such employees shall be paid pro-rata Long Service Leave after five (5) years service.

8.1.4 All such employees shall be paid the full value of accrued personal leave, if any.

8.2 For the purpose of this clause a “weeks pay” shall be deemed the all purpose weeks pay presently used as a basis for calculation of Annual Leave entitlements, (i.e. in accordance with rates identified in clause 7). For annualised wages employees a “weeks pay” shall be the enterprise agreement base rate for their grade.

9. Annual Leave

All such employees shall also be paid the full value of all payments legally due to them in respect to outstanding Annual Leave.”

(emphasis added)

[9] The Commission conducted a Conference at Melbourne for the purpose of Mediation and/or Conciliation in accordance with Step 3 of cl.16 Dispute Settling Procedure of the Agreement in order to resolve the dispute.

[10] The dispute arises because Mr Ball submits that the proper application of the relevant terms of the Agreement is that he is entitled to the redundancy benefits and other provisions prescribed by Appendix 2. Whereas, Treasury maintain that these provisions have no application to Mr Ball’s circumstances.

[11] The AWU submitted that the necessary preconditions of cl.16 leading up to the Commission’s jurisdiction and powers to resolve the dispute have been met. Treasury Wine Estates did not offer any jurisdictional objection to the Commission dealing with the dispute. The conference proceeded accordingly.

[12] The parties addressed the Commission respectively in support of their positions, including outlines of the factual circumstances in which Mr Ball became aware of Treasury’s decision that it would close the packaging department at Karadoc in accordance with the notice referred to above.

[13] Treasury did not dispute that a definite decision has been made to close the packaging operation at Karadoc and that this intention had been communicated to the AWU and Treasury Wine Estates employees in the packaging department, and that discussions had been conducted in accordance with cl.21.1 of the Agreement. Mr Ball was not offered a transfer of his employment to Nuriootra Park in the Barossa Valley or an alternative elsewhere.

[14] It seems to me therefore the announcement of the closure of the packaging department at Karadoc is a redundancy situation to which cl.21.1.1 of the Agreement applies. Treasury has made a definite decision that the job Mr Ball has been doing will no longer be required and that this is not due to the ordinary and customary turnover of labour. The decision is one which would lead to the termination of Mr Ball’s employment. Moreover, on what has been put to me, the relevant discussions prescribed by cl.21.1.1 have occurred.

[15] Given my consideration of the application of cl.21.1.1 to the circumstances affecting Mr Ball arising from Treasury’s intention as referred to above and my construction of cl.21.1.1 I consider Mr Ball to be a “qualifying employee”  1 referred to in cl.21.2 In my view, cl.21.1.1 is the referent term of the Agreement for the purposes of discerning when an employee will be a “qualifying employee” for the purposes of cl.21.2.

[16] I therefore consider that Appendix 2 applies to Mr Ball’s circumstances.

[17] I now turn to Appendix 2. For the purposes of my consideration I must focus on paragraph 2 of Appendix 2, have regard to the relevant context in which that paragraph appears both in Appendix 2 and cl.21, apply the plain meaning of the relevant words and if there is any uncertainty discern the mutual intentions of the makers of the Agreement.

[18] It seems to me that a reading of Appendix 2 establishes a catalogue of relevant considerations for these purposes, which clearly include termination of the employment of an employee whose position will become redundant prior to the time at which the effect of the intended redundancy is nominated as likely to be manifest. Paragraph 2 in particular concerns early election by an employee, to terminate prior to the nominated redundancy date. This entitlement is consistent with the provision of time off whilst working after the intended redundancy has been announced but not yet taken effect. Paragraph 4 and 1 may be characterised similarly.

[19] In this particular context, I consider that Paragraph 2 of Appendix 2 is an employee entitlement to elect to terminate their employment prior to a nominated redundancy date. In this respect the following is relevant:

● Treasury’s announced intention (as set out previously) was that the closure of the packaging department in which Mr Ball was employed would be completed during fiscal year 2016.
● At the conference the AWU indicated that during the discussions referred to above (pursuant to cl.21.1.1), February 2016 had been nominated as the likely date. This was not disputed.

[20] I therefore find as follows:

● Mr Ball was a qualifying employee within the meaning of cl.21.2.1.

● Appendix 2 applied to Mr Ball subsequent to the announcement of the intended redundancy of the positions in the packaging department at Karadoc on 31 March 2015 to the Australian Stock Exchange and communicated to the AWU and employees at Karadoc.

● Mr Ball was entitled to elect to terminate his employment prior to the nominated redundancy date in February 2016.

● Mr Ball was entitled to do so without loss of redundancy payments prescribed by Appendix 2, calculated up to the effective termination date of his employment.

[21] I therefore recommend that Treasury pay to Mr Ball the amount of redundancy entitlement prescribed by Appendix 2 of the Agreement.

COMMISSIONER

 1   I note that the term “qualifying employee” does not appear elsewhere in the Agreement.

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