The Griffin Coal Mining Company Pty Ltd v Construction, Forestry, Mining and Energy Union
[2015] FWCFB 7424
•9 NOVEMBER 2015
| [2015] FWCFB 7424 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.604—Appeal of decision
v
Construction, Forestry, Mining and Energy Union
(C2015/5710)
SENIOR DEPUTY PRESIDENT ACTON |
|
Appeal against decision [[2015] FWC 4899] of Commissioner Williams at Perth on 27 July 2015 in matters number C2015/1945, C2015/2187 and C2015/1955 – dispute resolution – enterprise agreement – permission to appeal refused.
Introduction
[1] The Griffin Coal Mining Company Pty Ltd (Griffin) lodged a notice of appeal on 17 August 2015 against a decision of Commissioner Williams. 1
[2] The Commissioner’s decision was in respect of dispute applications made to the Fair Work Commission (the Commission) having regard to s.739 of the Fair Work Act 2009 (Cth) (FW Act) and the dispute resolution procedure clause of the Griffin Coal (Production) Collective Agreement 2012 (the GC Agreement). 2
[3] Section 739 of the FW Act concerns the powers of the Commission in respect of such dispute applications.
[4] Two of the applications before the Commissioner were made by Griffin 3 and the third application was made by the Construction, Forestry, Mining and Energy Union (CFMEU).4
[5] The dispute applications concerned a new work roster Griffin wanted to introduce and implement.
Background to the dispute applications
[6] The background to the dispute applications is set out in the Commissioner’s decision, as follows:
“[4] The Collie Basin south of Perth is currently the only domestic source of thermal coal supply in Western Australia. There are two coal mine operators in the Collie Basin, Yancoal Premier and Griffin.
[5] Griffin owns several mining tenements around the Collie area in Western Australia. It currently mines coal at the Ewington mines.
[6] Griffin has three customers: Bluewaters Power Pty Ltd, BHP Billiton Worsley Alumina Pty Ltd and Cockburn Cement Ltd which together require, on average, a total of 2.85 million tonnes of coal per year.
[7] Griffin has been operating at a loss since at least January 2010, when it was placed into voluntary administration by its previous owners. On 28 February 2011 Lanco Infratech Limited acquired Griffin from the administrators. Since acquisition, Griffin has continued to incur very significant operational cash losses totalling approximately $160 million.
[8] Griffin currently employs production employees whose employment is governed by the provisions of the [GC] Agreement. The production employees are primarily responsible for running the waste removal and coal extraction operations, including the coal handling plant.
[9] The majority of production employees currently work a roster of 4 days on, 4 days off on two 12 hour day shifts and two 12 hour night shifts. There are 4 panels which enable operations to occur 24 hours per day, 7 days a week, throughout the year. The remaining production employees also work 4 days on, 4 days off on 12 hour shifts, but they do not work night shifts.
[10] The production employees are entitled to an annualised salary under the Agreement, which is currently calculated based on double time rates for Saturday and Sunday shifts, overtime hours at one and a half time and double time rates, and a 25% loading for night shifts. The current annualised salaries are calculated on the basis that employees will work 35 ordinary time hours and up to 7 overtime hours per week.
[11] One measure Griffin says is necessary to assist it to restore the financial viability of its operations is for there to be a significant reduction in labour costs.
[12] Griffin argues there is not a need to have all production employees working on the current rosters to meet current customer demands. Consequently an additional roster is required.
[13] Griffin has proposed to its employees that an additional roster be implemented to complement current production and substantially reduce labour costs. The majority of production employees would then work on this roster.
[14] Under the New Roster labour costs will be lowered by reducing the number of hours worked per week and reducing the number of worked hours that attract a loading or penalty rate.
[15] Under the New Roster, production employees will work 5 shifts of 7 hours per shift Monday to Friday and have 2 days off (Saturday and Sunday).
[16] The shifts will change over the period of four weeks, as follows:
(a) one week is comprised of shifts commencing at 6.00 a.m. and finishing at 1.00 p.m.;
(b) one week is comprised of shifts commencing 12.00 p.m. and finishing at 7.00 p.m.;
(c) one week is comprised of shifts commencing at 6.00 p.m. and finishing at 1.00 a.m.; and
(d) one week is comprised of shifts commencing at 12.00 a.m. and finishing at 7.00 a.m.
[17] On any given week, each of the four crews will work 1 of the 4 shift times. Each crew cycles through each of the 4 different shift times over a 4 week period.
[18] The production employees will continue to work 35 ordinary hours per week. The average hourly rate for ordinary hours will remain unchanged.
[19] Employees working on the New Roster would receive an annual salary of approximately 38% less than the annualised salary currently prescribed in the [GC] Agreement.
[20] Following consultations the employees have not agreed to Griffin implementing the New Roster.” 5
Nature of the dispute applications
[7] Having set out the background to the dispute applications, the Commissioner then went on in his decision to set out the nature of the dispute applications before him, as follows:
“[24] Application C2015/1945 was made by Griffin on 4 March 2015 and seeks the Commission arbitrate and set the appropriate annualised salary for the New Roster. The application asserts the [GC] Agreement permits the introduction of new rosters but provides that the annualised salary to be applied to a new roster if it cannot be agreed is to be determined by the Commission.
[25] Application C2015/1955 made on 5 March 2015 by the CFMEU was made on a form F10 which is an application for the Commission to deal with a dispute in accordance within a dispute settlement procedure and was expressly referred to the Commission pursuant to the dispute settlement procedure in the [GC] Agreement. That application refers to the fact that Griffin has previously made an application to the Commission (C2015/1945) for determination of the annualised salaries for production employees based on the New Roster. The CFMEU say they oppose the implementation of the New Roster and seek that the dispute be dealt with prior to the determination of new annualised salaries for production employees under the [GC] Agreement. Under the heading relief sought the CFMEU say they seek conciliation in the first instance but if the matter cannot be resolved seeks the matter be programmed for arbitration. Their application says that should arbitration be necessary they seek a determination that Griffin cannot implement the New Roster.
[26] Application C2015/2187 made on 20 March 2015 by Griffin refers to the earlier applications and the factual background and seeks the Commission arbitrate the disputed matter and order that the New Roster be implemented and the Commission set the annual salary for that New Roster in terms proposed by Griffin. Reliance is put upon clause 20−Dispute Resolution Procedure of the Agreement and clause 21−Consultation of the Agreement.” 6
Questions to be determined by the Commission
[8] Ultimately, the parties to the dispute applications agreed that in dealing with the applications the Commissioner should determine the following questions:
“(1) Do the terms of the [GC] Agreement allow Griffin to unilaterally implement the roster at Annexure B to the application in matter C2015/1945 (New Roster)?
(2) If the answer to (1) is no, do the terms of the [GC] Agreement allow the Fair Work Commission (the Commission) to order that the New Roster be implemented?
(3) If the answer to (2) is yes, should the Commission make an order implementing the New Roster?
(4) If the answer to (1) or (3) is yes, can Griffin and the Construction, Forestry, Mining and Energy Union (CFMEU) agree on the annualised salaries for the employees of Griffin who will be working the New Roster under the [GC] Agreement?
(5) If the answer to (4) is no, what does the Commission determine are the annualised salaries for the employees of Griffin who will be working the New Roster under the [GC] Agreement?” 7
Commissioner’s decision
[9] The Commissioner’s answer to questions (1) and (2) was “No”. Further, given his answer to those questions was “No”, the Commissioner considered questions (3) to (5) were not relevant. The Commissioner concluded as follows:
“[144] The outcome of these applications has been determined by the constraints placed on Griffin, the employees and the Commission by the provisions of the [GC] Agreement the parties made in 2012 and the scheme of the Act. These constraints do allow changes to the arrangements prescribed by the [GC] Agreement where both Griffin and the employees agree to these changes. The Commission remains available to assist the parties to this end if they wish.” 8
[10] In coming to his answer on Question (1), the Commissioner said:
“First question
[93] The first question to be considered is:
(1) Do the terms of the [GC] Agreement allow Griffin to unilaterally implement the New Roster?
[94] Clause 9−Hours of Work and Rosters of the [GC] Agreement directly addresses matters relevant to the questions to be determined. Firstly subclause 9.1 refers to the annualised salary in the [GC] Agreement at Schedule A as the ‘current’ annualised salary. Next subclause 9.2 refers to the rosters in Schedule C as the ‘current’ roster. The plain meaning of these words demonstrates that a roster different from that in Schedule C and annualised salaries different from those in Schedule A are permissible. The relevant clause is set out below.
‘9 Hours of Work and Rosters
Hours of Work
9.1 The ordinary hours of work in this Agreement average 35 hours per week. The current annualised salary in Schedule A includes a payment for an average of an additional 7 hours per week calculated at overtime rates. The average weekly hours of work for each full-time employee are 42 hours for Schedule A. The parties acknowledge that these hours are reasonable.
Rosters
9.2 The current roster Employees will work is in Schedule C. Shift rosters will specify the normal commencing and finishing times of ordinary working hours of each shift. In accordance with Clause 9.3 these times may be varied by Griffin to maximise plant utilisation, operational effectiveness and efficiency for genuine operational needs. …’
[95] The references in subclause 9.2 to Griffin varying the times of ordinary working hours of a shift for operational effectiveness and efficiency is limited to variation of those times specified on a shift roster for the normal commencing and finishing times of ordinary working hours of each shift. This provision empowers Griffin to make such changes unilaterally. However subclause 9.2 states that such variations must be in accordance with subclause 9.3 which says that shift start and finish times within a panel may be staggered up to a maximum of one hour only. These limited changes to the roster can be actioned unilaterally by Griffin but obviously implementing the New Roster unilaterally is well beyond the scope of this provision.
[96] The next clause relevant is clause 10−Salaries and Other Benefits set out below.
‘10. Salaries and Other Benefits
Annualised salary
10.1 Subject to this Agreement each employee will be entitled to an annualised salary in accordance with Schedule A. Provided that where a new roster is introduced the annualised salary in Schedule A will not be payable to the affected employees and a new annualised salary will be agreed (or determined by FWA). The new annualised salary must be calculated using the principles in Schedule A. ...’
[97] The second sentence of subclause 10.1 says that ‘…where a new roster is introduced…’ the annualised salary in Schedule A would not be payable and a new annualised salary will be either agreed or determined by the Commission. The plain meaning of these words also demonstrates that a roster different from that in Schedule C and consequently annualised salaries different from those in Schedule A are permissible.
[98] Whilst both clause 9−Hours of Work and Rosters and clause 10−Salaries and Other Benefits demonstrate the terms of the [GC] Agreement do envisage that a roster and an annualised salary different from those prescribed in Schedule C and Schedule A can come into operation in the future neither clause determines how a different roster is able to be introduced. These clauses do not indicate whether a new roster can be implemented unilaterally by Griffin.
[99] Another clause in the [GC] Agreement that is relevant to the first question is clause 25−Variations to Agreement which is set out below.
‘25. Variations to Agreement
25.1 Any variation, amendment, deletion or addition to this Agreement (including those that may arise from subclause 10.1) shall be in accordance with the Act and lodged with Fair Work Australia for conciliation or arbitration.’
[100] If the New Roster is to be implemented the [GC] Agreement will have to be changed to include the specifics of this additional roster and to allow employees to work under the New Roster. For example subclause 9.2 which reads ‘The current roster Employees will work is in Schedule C’ will need to be changed to also refer to some employees working on the New Roster. Without some change to the [GC] Agreement the existing terms remain enforceable and employees will work on the Schedule C roster and Griffin remains obliged to pay the Schedule A annualised salary.
[101] Assumedly, the specifics of the New Roster could be expected to be added into Schedule C. Other changes to the [GC] Agreement may also be necessary or prudent. As can be seen implementing the New Roster, putting it into effect in the workplace, will doubtless necessitate variation, amendment, deletion or addition to the [GC] Agreement.
[102] Clause 25 of the Agreement refers to any ‘variation, amendment, deletion or addition to this Agreement...’. On its plain meaning this clause applies to any change to the [GC] Agreement necessary for the New Roster to be implemented. The words ‘(including those that may arise from subclause 10.1)’ is a specific reference to a new roster and the different annualised salary which has come into being as a consequence of it being introduced.
[103] The facts are that the New Roster Griffin seeks to implement also requires a new annualised salary being prescribed in the [GC] Agreement, regardless of whether the amount of that annualised salary is agreed between the parties or has been determined by the Commission.
[104] Whatever variation, amendment, deletion or addition to the [GC] Agreement is required for the implementation of the New Roster and associated new annualised salary the plain meaning of clause 25 requires that this ‘…shall be in accordance with the Act and lodged with Fair Work Australia for conciliation or arbitration.’
[105] Sections 207 through to section 218 of the Act deals with the limited circumstances in which there can be a variation, amendment, deletion or addition to the [GC] Agreement.
[106] In summary these are:
1. Variations jointly made by an employer and the affected employees. This involves a majority vote by the employees in support of the variation. An application is then to be made to the Commission for approval of the variation to the agreement. The Commission’s considerations as to whether or not to approve the variation go to whether the procedural requirements within the Act have been satisfied and whether there are serious public interest grounds for not approving the variation and whether the variation would result in a person committing an offence against the law of the Commonwealth or being in contravention of the law of the Commonwealth. (See sections 207 to 216 of the Act).
2. Variations to remove an ambiguity or uncertainty may be applied for by an employer, an employee or an employee organisation covered by the agreement. (See section 217 of the Act).
3. A review of an agreement by the Commission which has been referred to it by the Australian Human Rights Commission because it believes the agreement is a discriminatory industrial instrument. If the Commission considers the agreement requires a person to do an act that would be unlawful under other anti-discrimination legislation then the Commission must vary the agreement to no longer require the person to do such an act that would be unlawful. (See section 218 of the Act).
[107] In dealing with any such applications the Commission will be conciliating or arbitrating as is required, in accordance with the Act, dependent upon the nature of the particular application and the particular surrounding circumstances of the application.
[108] Of the three circumstances under the Act for a variation, amendment, deletion or addition to the [GC] Agreement the introduction of a new roster can only be achieved under the first of those set out in [106] above. The only option in this case is that under section 207 of the Act; Griffin and the employees jointly make a variation of the [GC] Agreement to allow for the implementation of the New Roster and new annualised salary. An application would then be made to the Commission under section 210 of the Act for the approval of this variation agreed by Griffin and the employees. Clause 25 does not allow unilateral introduction of the New Roster.
[109] Griffin points out that the 2009 Agreement in subclauses 9.2 and 9.3 included an employee veto over roster changes with a restriction on the Commission’s power limiting it to conciliation on such matters. These terms are not part of the [GC] Agreement which replaced the 2009 Agreement. Griffin says the surrounding circumstances of this particular change to the [GC] Agreement support a construction that there would be no requirement for employee agreement to roster changes under the [GC] Agreement. Griffin submits this is at odds with the words in clause 25 and so the [GC] Agreement is ambiguous.
[110] These surrounding circumstances do not in my view support a conclusion that the [GC] Agreement contains an ambiguity. This is because clause 25 of the 2009 Agreement remains in the [GC] Agreement in similar terms and this clause in both Agreements and the scheme of the Act now and as it applied to the 2009 Agreement provided an effective employee veto over unilateral roster changes being implemented. The changes to subclauses 9.2 and 9.3 did not actually involve a removal of the employee veto. Rather the specific consultation obligations for roster changes in subclause 9.2 were made superfluous by the statutory obligation to include the general consultation obligation contained in clause 21−Consultation and retaining the general requirement for all variations to the [GC] Agreement, which includes roster changes, to be subject to employee agreement in accordance with the scheme of the Act in clause 25 of the [GC] Agreement made the specific veto on roster changes also superfluous.
[111] In summary then the plain meaning of the [GC] Agreement does permit the New Roster to be brought into operation however clause 25−Variations to Agreement requires that the variations or amendments to the [GC] Agreement necessary to accommodate and reflect the implementation of the New Roster and new annualised salary must be in accordance with the Act which in practice means jointly agreed by Griffin and the employees and an application must be made to the Commission under section 210 to vary the Agreement as required. In short the terms of the Agreement do not allow Griffin to unilaterally implement the New Roster.
[112] Consequently the answer to question (1) is – No.” 9 (Endnotes omitted)
[11] In answering Question (2), the Commissioner said:
“Second question
[113] I will now consider the second question to be determined.
(2) If the answer to (1) is no, do the terms of the [GC] Agreement allow the Commission to order that the New Roster be implemented?
[114] There is only one term of the [GC] Agreement that specifically deals with the Commission’s involvement with a new roster and that is clause 10−Salaries and Other Benefits set out in [96] above.
[115] Subclause 10.1 provides that ‘…where a new roster is introduced…’ then ‘…a new annualised salary will be agreed (or determined by FWA).’ When making the Agreement the parties have expressly provided that in the absence of agreement between them on a new annualised salary for a new roster that new annualised salary would be determined by the Commission. The plain meaning of these words does not provide a mandate though for the Commission to order that the New Roster be implemented.
[116] Relevant to the further consideration of this second question is clauses 20−Dispute Resolution Procedure and 21−Consultation. Neither of these clauses has any express reference to the implementation of new rosters however both clauses must be considered because they both in different circumstances empower the Commission to arbitrate matters.
[117] Both clauses have been set out earlier in this decision.
[118] As explained earlier when dealing with the question of the Commission’s general jurisdiction I am satisfied that these applications have enlivened the Commission’s powers under clause 20−Dispute Resolution Procedure. Specifically I am satisfied considering the terms of subclause 20.5 that implicitly by their actions there has been agreement between the CFMEU and Griffin that some steps in this dispute resolution procedure may be bypassed. The CFMEU in raising its concerns with Griffin about Griffin’s proposal to introduce the New Roster appear to have bypassed Step 1 and the parties thereafter appear by agreement to have moved directly to Step 4 of the procedure. The matter was then referred to the Commission under Step 5. In those circumstances then under Step 5 clause 20−Dispute Resolution Procedure the Commission has the power to conciliate, mediate and/or arbitrate the dispute.
[119] I think there is no doubt that the Commission is empowered to deal with these disputes by conciliation and mediation and in fact has done so in conference.
[120] Had conciliation or mediation been successful then Griffin and the employees would have had the opportunity to deal with the implementation of the New Roster by jointly varying the [GC] Agreement under section 207 of the Act and then making an application under section 210 of the Act for the Commission to approve the variation of the [GC] Agreement. That process would have allowed implementation of the New Roster and been consistent with clause 25−Variations to the Agreement.
[121] Conciliation and mediation was unsuccessful so what remains is the determination as to whether subclause 20.3 at Step 5 is a term of the [GC] Agreement that allows the Commission, when arbitrating, to order the implementation of the New Roster.
[122] Before considering this point I will first consider whether clause 21−Consultation raises a similar issue to that explained above for clause 20−Dispute Settlement Procedure.
[123] Clause 21−Consultation was set out earlier in this decision. As discussed earlier, when considering the question of jurisdiction generally I am satisfied the circumstances here fall within the scope of this clause.
[124] Griffin has made a definite decision to introduce a major change to the program, being the shift rosters, and that change if it is implemented is likely to have significant effects in terms of the alteration of the hours of work on the employee’s involved. Consequently under the terms of clause 21−Consultation Griffin is obliged to notify the relevant employees of its decision to introduce the major change and for there to be consultation over this. Indeed this is what has occurred.
[125] Subclause 21.11 of the [GC] Agreement states that if the changes cannot be agreed ‘the disputed matter can be referred to Fair Work Australia for conciliation or arbitration.’
[126] The parties have participated in a conciliation conference dealing with the disputed matter which is Griffin’s decision to implement the New Roster. There is no doubt the Commission was empowered to deal with the disputed matter by conciliation.
[127] Given conciliation was unsuccessful what remains is the determination as to whether subclause 21.11 is a term of the [GC] Agreement that allows the Commission, when arbitrating, to order the implementation of the New Roster.
[128] Effectively for the purposes of this decision whether the Commission is allowed to order the implementation of the New Roster or not under either subclause 20.3 Step 5 or subclause 21.11 are questions that raise the same issues and have the same answer.
[129] It is clear that by both clause 21−Dispute Settlement Procedure and clause 21−Consultation the parties have agreed that the Commission may arbitrate disputes. However subsection 739 (5) of the Act specifies that in any such arbitration the Commission must not make a decision that is inconsistent with the Act or inconsistent with a fair work instrument that applies to the parties. Section 12 of the Act defines a ‘fair work instrument’ to mean, amongst other instruments, an enterprise agreement.
[130] Section 739 of the Act is set out below.
‘739 Disputes dealt with by the FWC
(1) This section applies if a term referred to in section 738 requires or allows the FWC to deal with a dispute.
(2) The FWC must not deal with a dispute to the extent that the dispute is about whether an employer had reasonable business grounds under subsection 65(5) or 76(4), unless:
(a) the parties have agreed in a contract of employment, enterprise agreement or other written agreement to the FWC dealing with the matter; or
(b) a determination under the Public Service Act 1999 authorises the FWC to deal with the matter.
Note: This does not prevent the FWC from dealing with a dispute relating to a term of an enterprise agreement that has the same (or substantially the same) effect as subsection 65(5) or 76(4) (see also subsection 55(5)).
(3) In dealing with a dispute, the FWC must not exercise any powers limited by the term.
(4) If, in accordance with the term, the parties have agreed that the FWC may arbitrate (however described) the dispute, the FWC may do so.
Note: The FWC may also deal with a dispute by mediation or conciliation, or by making a recommendation or expressing an opinion (see subsection 595(2)).
(5) Despite subsection (4), the FWC must not make a decision that is inconsistent with this Act, or a fair work instrument that applies to the parties.
(6) The FWC may deal with a dispute only on application by a party to the dispute.’
[131] If the Commission ordered that the New Roster be implemented would such a decision be inconsistent with the Act or the [GC] Agreement?
[132] The current roster under clause 9−Hours of Work and Rosters is based on shifts of 12 hours per day and an average of 42 weekly hours for full-time employees. Both Griffin and the CFMEU acknowledge that there are a large number of clauses in the [GC] Agreement where the rights and entitlements of the parties are expressed on a basis that assumes the employees are working 12 hour shifts and/or 42 hours per week. Recognising that the New Roster is based on shifts of 7 hours per day and 35 hours per week both parties have put submissions as to what the impact would be for these rights and entitlements in the [GC] Agreement if the Commission did order implementation of the New Roster.
[133] In addition to the rosters and salary in Schedule C and Schedule A, based on 12 hour shifts and a 42 hour week the rights and entitlements prescribed in the [GC] Agreement that are relevant in this consideration include, the definition of ‘salary rate’ which assumes a 42 hour week is worked, the pro rata entitlements for a part-time employee which assumes a 42 hour week, shift breaks which assume a 12 hour shift, the relief supervisor allowance which assumes a shift of 12 hours, workers compensation payments which are paid on the basis of the current annualised salary which is based on 12 hour shifts and 42 hours per week, the annual leave entitlement which is expressed in hours for each year and based on 12 hour shifts, the personal leave entitlement which is only provided for full time employees working a 12 hour shift and finally the long service leave entitlement which is only provided for an employee working a 12 hour shift roster and is based on 12 hour shifts.
[134] Considering all of these clauses it is obvious that the [GC] Agreement, as a whole, envisaged shifts will be 12 hours in length and weekly hours will average 42. The fact that clause 10−Salaries and Other Benefits indicates that a different roster to that in Schedule C might be introduced is not at odds with this construction. This clause would allow other rosters to be introduced which are based on 12 hour shifts and an average of 42 hours per week. Such a new roster for example could be similar to the current rosters in Schedule C but with any number of different start and finish times perhaps.
[135] Section 739 (5) of the Act prevents the Commission making a decision that is inconsistent with the [GC] Agreement. The [GC] Agreement considered as a whole provides only for shifts of 12 hours and an average of 42 hours a week. A decision by the Commission to order the implementation of the New Roster based on 7 hour shifts and an average of 35 hours a week would be inconsistent with the [GC] Agreement as a whole. Consequently for these reasons I find that the Commission is not permitted to order the implementation of the New Roster.
[136] A further consideration is that what is sought is for the Commission to order that the New Roster be implemented. Such an order is to put the New Roster into effect. A general statement by the Commission that Griffin can implement the New Roster would not resolve the dispute and would not put the New Roster into effect. Griffin in practise would be unable to implement the New Roster without changes to the [GC] Agreement. As the Full Bench explained in [2013] FWCFB 2301 at paragraph [34] ‘The terms of the enterprise agreement remain in effect and enforceable ….notwithstanding the determination of the private arbitration.’
[137] Of necessity then the Commission would need to issue an order to alter the [GC] Agreement to facilitate the New Roster being put into effect and to resolve the conflicts with particular terms of the [GC] Agreement. Changes to the [GC] Agreement would have to be made to allow the roster to operate. This obviously would be a decision of the Commission that was inconsistent with the terms of the [GC] Agreement.
[138] Any conclusion to the contrary (that the Commission is empowered to change the terms of the [GC] Agreement when settling disputes) would support the view that arbitration allowed by the term of an agreement and section 739 (4) of the Act empowers the Commission to vary agreements without constraint and the Commission would be empowered to alter as it saw fit the negotiated bargain parties have made when they entered into the [GC] Agreement. Section 739 (5) of the Act expressly denies the Commission such broad powers.
[139] This interpretation does not damage the efficacy of clause 20−Dispute Settlement Procedures and clause 21−Consultation of the Agreement. These clauses both continue to allow the Commission to deal with a multitude of grievances and proposals for change in the workplace which are ones that can be resolved without necessitating any change to the terms of the [GC] Agreement. Indeed it is commonplace that many such grievances or proposals for change will involve matters that are not dealt with by the terms of the [GC] Agreement at all. Separately both clauses provide a role for the Commission in terms of conciliation or mediation that does not conflict with the prohibition in section 739 (5) of the Act.
[140] For the reasons explained above my decision is that clause 20−Dispute Settlement Procedure and clause 21−Consultation of the [GC] Agreement do not allow the Commission to order the New Roster be implemented.
[141] In summary the requirement of section 739 (5) of the Act that the Commission must not make a decision inconsistent with the [GC] Agreement means the terms of the [GC] Agreement do not allow the Commission to order the New Roster be implemented.
[142] The answer to question (2) is – No.” 10
Grounds of appeal
[12] Griffin has raised numerous grounds of appeal. Central to Griffin’s grounds of appeal is that the Commissioner erred in failing to find whether the GC Agreement, by its express terms, prohibited Griffin from unilaterally, in the exercise of its managerial prerogative or otherwise, introducing and implementing the “New Roster”. That “New Roster” being the roster set out in paragraphs 15 to 17 of the decision of the Commissioner which is the subject of the notice of appeal in this matter.
Consideration of the appeal
[13] We are not persuaded there is any error in the Commissioner’s answers to the questions determining the three s.739 applications before him. We think that in his decision the Commissioner at least implicitly found that the GC Agreement, in conjunction with the FW Act, prohibits Griffin from unilaterally implementing the “New Roster” during the life of the GC Agreement.
[14] In the absence of “express terms” in the GC Agreement prohibiting Griffin from unilaterally implementing the “New Roster”, the Commissioner’s approach was to consider the relevant terms of the GC Agreement as a whole, in the context of relevant provisions of the FW Act. An approach consistent with authority.
[15] We concur with the Commissioner’s answers to the questions before him.
[16] The “Hours of Work and Rosters” clause of the GC Agreement relevantly provides as follows:
“Hours of work
9.1 The ordinary hours of work in this Agreement average 35 hours per week. The current annualised salary in Schedule A includes a payment for an average of an additional 7 hours per week calculated at overtime rates. The average weekly hours of work for each full-time employee are 42 hours for Schedule A. The parties acknowledge that these hours are reasonable.
Rosters
9.2 The current roster Employees will work is in Schedule C. Shift rosters will specify the normal commencing and finishing times of ordinary working hours of each shift. In accordance with Clause 9.3 these times may be varied by Griffin to maximise plant utilisation, operational effectiveness and efficiency for genuine operational needs.
Start and Finish Times and Locations
9.3 Shift start and finish times within a panel may be staggered (up to a maximum of 1 hour) and may be varied by Griffin to meet its operational requirements.”
[17] The “Salaries and Other Benefits” clause of the GC Agreement relevantly provides as follows:
“10. Salaries and Other Benefits
Annualised salary
10.1 Subject to this Agreement each employee will be entitled to an annualised salary in accordance with Schedule A. Provided that where a new roster is introduced the annualised salary in Schedule A will not be payable to the affected employees and a new annualised salary will be agreed (or determined by FWA). The new annualised salary must be calculated using the principles in Schedule A.”
[18] Schedules A and C to the GC Agreement are relevantly as follows:
“Schedule A – Salaries
4 PANEL | |||||
Classification | 1st Sept 2011 | Date of signing (4%) | 1st Anniversary 2013 (5%) | 2nd Anniversary 2014 (6%) | 3rd Anniversary 2015 (7.5%) |
Level 3 – Production Employee | $90,365 | $93,980 | $98,679 | $104,599 | $112,444 |
Level 2 – Production Employee | $110,250 | $114,660 | $120,393 | $127,617 | $137,188 |
Level 1 – Production Employee | $112,350 | $116,844 | $122,686 | $130,047 | $139,801 |
2 Panel | |||||
Classification | 1st Sept 2011 | Date of signing (4%) | 1st Anniversary 2013 (5%) | 2nd Anniversary 2014 (6%) | 3rd Anniversary 2015 (7.5%) |
Level 3 – Production Employee | $82,880 | $86,195 | $90,505 | $95,935 | $103,130 |
Level 2 – Production Employee | $101,096 | $105,140 | $110,397 | $117,021 | $125,797 |
Level 1 – Production Employee | $103,026 | $107,147 | $112,504 | $119,255 | $128,199… |
Schedule C – Roster
2 Panel Roster
A roster in the sequence of four days on followed by four days off followed by four days on followed by four days off. Normal hours of work will be 6:30 am to 6:30 pm.
4 Panel Roster
A roster in the sequence of two days on followed by two nights on followed by four days off. Normal hours of work will be 6:30 am and 6:30 pm to 6:30 am.”
[19] The predecessor agreement 11 to the GC Agreement contained Schedules A and B as follows:
“Schedule A – Salaries
4 Panel | ||
Classification | Commencement Date | 1st Anniversary of Commencement Date |
Level 3 – Production Employee | $90,365 | $90,365 |
Level 2 – Production Employee | $105,000 | $110,250 |
Level 1 – Production Employee | $107,000 | $112,350 |
2 Panel | ||
Classification | Commencement Date | 1st Anniversary of Commencement Date |
Level 3 – Production Employee | $82,880 | $82,880 |
Level 2 – Production Employee | $96,270 | $101,096 |
Level 1 – Production Employee | $98,110 | $103,026… |
For the purpose of this Agreement, the ordinary hourly rates shall be in accordance with the table below:
Classification | Commencement Date | 1st Anniversary of Commencement Date |
Level 3 – Production Employee | $27.48 | $27.48 |
Level 2 – Production Employee | $31.92 | $33.52 |
Level 1 – Production Employee | $32.53 | $34.16 |
Calculation Principles – ordinary hourly rate
The ordinary hourly rate is determined by dividing the annual salary by 6.5 and then by 506. The roster in schedule B of this agreement has a cycle of 8 weeks. It follows that there are 6.5 roster cycles in one year. An employee is paid the equivalent of 506 single time hours (paid hours equivalent) in each roster cycle. This is based upon a 12 hour shift being made up of 10 hours at single time; and 2 hours at double time.
In each roster cycle an employee works:
(a) 20 shifts that fall on Monday to Friday;
(b) 4 shifts that fall on Saturday; and
(c) 4 shifts that fall on Sunday.
There are 14 night shifts for which a 25% loading has been included in the annualised salary.
Applying the foregoing the paid hours equivalent in each roster cycle is as follows:
Work Arrangement | Paid Hours Equivalent |
20 x Monday to Friday shifts x 10 hours at single time | 200 |
20 x Monday to Friday shifts x 2 hours at double time | 80 |
4 x Saturday shifts x 4 hours at one and a half time | 24 |
4 x Saturday shifts x 8 hours at double time | 64 |
4 x Sunday shifts x 12 hours at double time | 96 |
14 x Night shifts x 12 hours at 0.25% loading | 42 |
Total | 506 |
Example – 4 Panel Roster
$90,365 per annum divided by 6.5 roster cycles = $13,902.30 per cycle divided by 506 paid hours equivalent each roster cycle = $22.47 per ordinary hour.
Schedule B – Roster
2 Panel Roster
A roster in the sequence of four days on followed by four days off followed by four days on followed by four days off etc.
4 Panel Roster
A roster in the sequence of two days on followed by two nights on followed by four days off and set out in the following table.”
[20] Numerous other clauses of the GC Agreement are predicated on the roster in Schedule C of the GC Agreement. For example, the casual employment, breaks, temporary roster changes, relief supervisor and leave provisions of the GC Agreement.
[21] In respect of casual employment, clause 8 of the GC Agreement relevantly provides as follows:
“8.16 A casual employee is one engaged and paid as such. Casual employees will be paid at a rate of 86% of the applicable 4 or 2 Panel – Level 2 salary rate under this agreement (calculation of ordinary rate plus 25%), with a minimum of four hours payment on each engagement.…
8.27 Casual employees will be paid at a rate of 86% of the applicable 4 or 2 Panel – Level 2 salary rate (calculation of ordinary hourly rate plus 25%)”.
[22] The breaks clause of the GC Agreement relevantly states:
“9.6 A total of 60 minutes (for 2 and 4 panel rosters of 12 hours) paid breaks shall be taken within a Shift in accordance with the following:
(a) At the commencement of this Agreement there will be three breaks for a 12 hour shift.
(b) There will be 1 x 30 minute crib break in a crib hut which shall usually be taken at the same time as agreed by the panel and the panel supervisor. This break will normally be commenced between 5 hours and 8 hours from the commencement.
(c) There will be 2 x 15 minute breaks in the pit or in an employee’s machine and those breaks shall usually be taken at the same times as agreed by the panel and the panel supervisor.”
[23] The temporary roster changes clause of the GC Agreement relevantly states:
“Temporary Roster Changes
9.7 When the temporary roster change is a transfer from four panel to two panel and is for a period of five or less consecutive blocks, the employee shall continue on their higher panel rate for that period.
9.8 If the temporary roster change is for six or more blocks, the rate applicable to the new roster will be paid from the start of the change provided that if for any reason the roster change does not exceed five blocks then payment of the higher panel rate will be applied retrospectively.
9.9 When a temporary roster change is from a two panel roster to a four panel roster, the employee will be paid the higher panel rate.
9.10 When a temporary roster change is to a day shift only roster, Griffin will call for expressions of interest from Production Employees. Appointment to a temporary dayshift roster will be at the sole discretion of Griffin.”
[24] The relief supervisor clause of the GC Agreement states:
“10.4 Whilst an employee is appointed to a relief supervisor role they may be required to work the same shift lengths as permanent supervisors. Any hours worked in a relief supervisor role in excess of the employee’s normal shift length (12 hours) will be paid at the employee’s Salary Rate as specified in Schedule A.”
[25] The leave clauses of the GC Agreement relevantly provide as follows:
“13. Annual leave
Entitlement
13.1 An employee shall be entitled to 252 hours annual leave (for 12 hour shifts) for each year (12 months) of continuous service. Employees are encouraged to take annual leave within 12 months of it accruing.…
14. Personal leave
Entitlement – Full-time Employees
14.4 A full-time employee (being an employee working a 12 hour shift) will be credited with 120 hours of paid Personal/Carers Leave on the 18th February annually.
14.5 Any full-time employee (being an employee working a 12 hour shift) who commences work post the 18th February shall be credited with paid Personal/Carers leave in accordance with subclause 14.4 on a pro-rata basis.
14.6 Full-time employees are only entitled to use a maximum of 120 hours of paid Personal/Carers Leave as paid Carers leave in any 12 month period.…
15. Long Service Leave
Entitlement
15.1 An employee who works a four panel and a two panel 12 hour shift roster shall be entitled to long service leave of 45.5 shifts (546 hours) after eight years of continuous service. Employees will accrue long service leave whilst on workers compensation leave. No accrual of long service leave is applicable during periods of salary continuance or parental leave or other leave that is not entitled to accrue as prescribed by any relevant Act.”
[26] Having regard to the terms of these clauses of the GC Agreement we reject the submission of Griffin that the sole purposes of such clauses is that they are “either used to calculate the hourly salary rate or they are used as a method… for calculating a particular entitlement, sometimes to ensure wage parity internally or externally in the case of contractors, for example, or they are used as a reference back to Schedule A” 12 of the GC Agreement. Such a submission also appears inconsistent with another submission of Griffin that such clauses would not apply to the employees working the “New Roster”.13
[27] There are also exclusion and variation clauses in the GC Agreement as follows:
“7. Application
Exclusions
7.1 Except as otherwise expressly agreed by the parties, this Agreement is the entire agreement between the parties and the parties, to the extent permissible by law, expressly exclude any other statutory laws, awards (including without limitation notional agreements preserving State awards) and agreements (whether written or unwritten, registered or unregistered) or orders that pertain to the employment relationship between the parties other than laws dealing with long service leave, occupational safety and health, workers compensation or training.
7.2 Further, the parties expressly exclude any protected and/or preserved entitlements and/or conditions as defined by the Act including but not limited to entitlements in relation to annual leave, personal leave, parental leave, long service leave, notice, jury service, superannuation, public holidays, rest breaks (including meal breaks), shift/overtime loadings, annual leave loading, allowances, penalty rates and incentive-based payments and bonuses, except as provided for by this Agreement.…
25. Variations to Agreement
25.1 Any variation, amendment, deletion or addition to this Agreement (including those that may arise from subclause 10.1) shall be in accordance with the Act and lodged with Fair Work Australia for conciliation or arbitration.”
[28] Further, as the Commissioner has indicated, ss.207 to 218 of the FW Act concern the variation of an enterprise agreement and s.739(5) of the FW Act concerns the Commission’s dealing with disputes where an enterprise agreement allows the Commission to do so.
[29] There are no clauses or terms in the GC Agreement which expressly allow Griffin to unilaterally introduce and implement, or expressly prohibit Griffin from unilaterally introducing and implementing, the “New Roster”.
[30] Rather, considered together, the clauses and terms of the GC Agreement, in conjunction with the FW Act, indicate that during the life of the GC Agreement only the roster in Schedule C of the GC Agreement is to apply, subject to clause 9.3 of the GC Agreement concerning start and finish times and unless otherwise expressly agreed by the parties to the GC Agreement.
[31] There is no proper basis to conclude that it was or is agreed by the parties to the GC Agreement that during the life of the GC Agreement Griffin can unilaterally, in the exercise of reasonable managerial prerogative or otherwise, introduce and implement the “New Roster”. Nor is there any proper basis to conclude that it was or is agreed by the parties to the GC Agreement that during the life of the GC Agreement Griffin is not prohibited from unilaterally introducing and implementing the “New Roster”.
[32] The effect of the clauses and terms of the GC Agreement and the FW Act is to prohibit Griffin, during the life of the GC Agreement, from unilaterally introducing and implementing the “New Roster”.
[33] The reference in clause 10.1 to a new roster is not sufficient to enable a conclusion that during the life of the GC Agreement Griffin may unilaterally introduce and implement, or is not prohibited from unilaterally introducing and implementing, the “New Roster”. The reference in clause 10.1 to a new roster has work to do in circumstances where the parties agree to a new roster.
[34] Clause 21 of the GC Agreement concerning consultation on major change provides a means by which the parties to the GC Agreement may, during the life of the GC Agreement, reach agreement on the introduction and implementation of a new roster. Including agreement on how the new roster is to be introduced, to whom it will apply and its provisions.
[35] However, the consultation and dispute resolution procedure clauses of the GC Agreement, which empower the Commission to arbitrate certain disputes, are not sufficient to enable a conclusion that during the life of the GC Agreement Griffin may unilaterally introduce and implement, or is not prohibited from unilaterally introducing and implementing, the “New Roster”. The clauses and terms of the GC Agreement, in conjunction with the FW Act, also preclude the Commission in arbitrating from ordering or making a decision for the introduction and implementation of the “New Roster”. Further, they preclude the Commission in arbitrating from ordering or making a decision for terms and conditions associated with the “New Roster” which are inconsistent with the terms and conditions of employment in the GC Agreement.
[36] Nothing said by the Commissioner, or us, is inconsistent with the objectives set out in clause 5 of the GC Agreement which is as follows:
“5. Objectives
Secure future for Griffin and the employees
5.2 The principal objective of this Agreement is to secure the future of Griffin and employees covered by it through the establishment of efficient and effective operating practices which, in turn, will minimise Griffin’s cost of operations and lead to an expansion of operations.
5.3 To achieve this objective, the parties jointly commit to a process of continuous improvement to make the Mine operations as safe, cost efficient and productive as possible and to maximise the use of Griffin’s resources for the purpose of maintaining or increasing demand for Griffin’s coal. The parties and Griffin’s employees will co-operate to achieve the objective and recognise that cost and quality are the main factors which may contribute to making Griffin’s coal more competitive with other energy sources.”
[37] It follows from our consideration of the matter central to Griffin’s grounds of appeal that we concur with the answers of the Commissioner to the questions before him determining the three s.739 applications before him.
[38] Our consideration effectively disposes of, and dismisses, all of the grounds of appeal raised by Griffin.
Permission to appeal
[39] Before us the parties proceeded on the basis that permission to appeal was required and we accept that. However, we are not persuaded we should grant permission to appeal in this matter in the public interest or otherwise. The managerial prerogative, consultation or dispute resolution clause issues and construction and interpretation issues raised by Griffin in the appeal are not sufficient in our view to attract the public interest, including the public interest considerations raised in Glaxo Smith Kline Australia Pty Ltd v Makin. 14 Further, for the reasons we have given, we discern no appealable error in the Commissioner’s decision. We refuse permission to appeal and, to the extent it is necessary, dismiss the appeal.
SENIOR DEPUTY PRESIDENT
Appearances:
A. Power, counsel with J. Bowman, solicitor for Griffin Coal Mining Company Pty Ltd.
J. Nolan, counsel with A. Kentish for the Construction, Forestry, Mining and Energy Union.
Hearing details:
2015.
Perth:
September 25.
Final written submissions:
Appellant, 7 September 2015.
Respondent, 18 September 2015.
1 Griffin Coal Mining Company Pty Ltd v Construction, Forestry, Mining and Energy Union, [2015] FWC 4899.
2 AE895579.
3 Griffin Coal Mining Company Pty Limited, C2015/1945 and C2015/2187.
4 Construction, Forestry, Mining and Energy Union, C2015/1955.
5 Griffin Coal Mining Company Pty Ltd v Construction, Forestry, Mining and Energy Union, [2015] FWC 4899.
6 Ibid.
7 Ibid.
8 Ibid.
9 Ibid.
10 Ibid.
11 Griffin Coal (Production) Collective Agreement 2009.
12 Transcript in C2015/5710 at PN75.
13 Griffin Coal Mining Company Pty Ltd v Construction, Forestry, Mining and Energy Union, [2015] FWC 4899 at [49].
14 [2010] FWAFB 5343 at [27].
Printed by authority of the Commonwealth Government Printer
<Price code C, PR573374>
1
2
0