The Maritime Union of Australia v Co-Operative Bulk Handling Limited T/A CBH Group

[2017] FWC 149

[2017] FWC 149

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.739—Dispute resolution

The Maritime Union of Australia
v
Co-Operative Bulk Handling Limited T/A CBH Group
(C2016/6355)

COMMISSIONER WILLIAMS PERTH, 13 JANUARY 2017

Application to deal with a dispute.

[1] This decision concerns an application made under section 739 of the Fair Work Act 2009 (the Act) by the Maritime Union of Australia (the MUA). The Respondent is Cooperative Bulk Handling Limited trading as CBH Group (CBH).

Background

[2] Jurisdiction for this application is founded in Clause 41 Dispute Settlement Procedure of the CBH Kwinana Plant Operators Collective Union Agreement 2013 (the Agreement). There is no dispute between the parties and I am satisfied that the Commission has jurisdiction to determine the matter by arbitration.

[3] The genesis of the dispute is the decision by CBH to engage 11 additional casual employees as plant operators to work at the CBH Kwinana grain terminal. The MUA argue that CBH was required to, but did not, comply with Clause 34 Consultation about Change of the Agreement before engaging these casual employees. CBH do not agree Clause 34 Consultation about Change applied to the circumstances here.

[4] The MUA have pursued the matter with CBH directly through the dispute settlement procedure in Clause 41. The matter was referred to the Commission as the parties remained in dispute. A conference was convened however the matter was not resolved.

[5] Subsequently the MUA has requested that the Commission issue interim orders that CBH:

1. Cease engaging any new casual employees until this matter is finally heard and determined; and

2. not utilise any casuals engaged after this dispute was notified on 19 September 2016 until this matter is finally heard and determined.

Relevant terms of the Agreement

[6] Clause 34 Consultation about Change of the Agreement prescribes the particular circumstances in which CBH is obliged to notify and consult with their employees and their representatives about change and the manner in which this is to be done. This clause is set out below.

“34. Consultation about Change

34.1. This Agreement recognises that CBH is obligated to carry out its responsibilities in accordance with CBH policies and additionally, where such policies relating to production, program, organisation or technology may also affect the rights and interests of its employees, CBH is also obligated to consider the rights and interests of its employees in the implementation of such policies. Accordingly:

34.2. Company Duty to Notify
Where CBH is likely to introduce changes in production, program, organisation, structure or technology that are likely to have significant effects on employees, CBH undertakes to notify the employee who may be affected by the proposed
changes.

Without limiting the generality thereof, significant effects includes termination of employment, changes in the composition, operation, or size of the workforce or in the skills required, the elimination or diminution of job opportunities, promotion opportunities or job tenure, the alterations of hours of work , the need for retraining or relocation or transfer of employees to other work or locations, the restructuring of jobs, the use of contractors and the legal or operational structure of the business.

34.3. Company Duty to Discuss Change
CBH undertakes to discuss with the employees affected, and where applicable the employee's representative, in good faith, inter alia, the introduction of the changes referred to in clause 34.1 and clause 34.2, the effects the changes are likely to have on employees, measures to avert or mitigate any adverse effects of such changes on employees and give prompt consideration to matters raised by the employees and/or employees and/or the union in relation to the changes.

The discussion shall commence as early as practicable after CBH has determined it is likely to make the changes referred to in clause 34.1 and clause

34.2. For the purpose of discussions, CBH undertakes to provide in writing to the employees concerned, all appropriate relevant information about the changes including the nature of the proposed changes, the expected effects of the changes on employees and any other matter likely to affect employees.

CBH must act in good faith in relation to the consultation and the procedure provided within this clause.

34.4. Implementation of Change

The parties agree that after the above notification and discussion has taken place, that CBH after careful genuine consideration of the views of employees may implement the change with seven days notice. Subject to the employees right to utilise clause 41 Dispute Settlement Procedure.”

[7] The dispute settlement procedure in the Agreement is contained in Clause 41 Dispute Settlement Procedure. This clause is set out below.

“41. Dispute Settlement Procedure

41.1. CBH and the employees are committed to a prompt and fair resolution of all grievances, problems or issues that may arise in the workplace. The parties acknowledge the importance of providing an uninterrupted service to customers, shareholders and clients and agree that any dispute should be able to be resolved without recourse to industrial action and within an informal framework.

41.2. Accordingly the parties agree that should any question, dispute or difficulty arise out of the operation of this Agreement, work shall continue as normal while the matter is being resolved and be handled in strict accordance with the following procedure.

41.3. The purpose of the dispute settlement procedure is to ensure that disputes and grievances are resolved as quickly as possible and as close to the source of the issue as possible.

41.4. The dispute settlement procedure shall be followed under the following circumstances:

1) Where there is an individual employee grievance; or
2) Where there is a dispute or issue concerning interpretation or
application of the National Employment Standards, Agreement or the

Award; or

3) Where the parties to the Agreement have an issue concerning matters in the workplace which require resolution.

41.5. The mechanism and procedures for resolving disputes will include the following:

1) The employee/s concerned will first meet and confer with their immediate supervisor. If the employee so chooses, the employee may invite a representative, which may include a union delegate, to be involved. Where the employee representative is involved he/she shall be allowed the necessary time during working hours to interview the employee/s and the supervisor.

2) If the matter is not resolved at such meeting the parties will arrange further discussions involving more senior management as appropriate. The employee, and if the employee chooses, the employees representative, shall be allowed the necessary time for discussion on the matter with a fully accredited union official of the union to which the employee belongs, should the employee wish.

The employee and if the employee chooses, the employee's representative shall be allowed at a place designated by the employer, a reasonable period of time to discuss the matter with the duly accredited union official.

3) If the matter remains unresolved, the employer may refer it to a more senior level of management or to a more senior national officer within the employee organisation. The employee may, if the employee so chooses, invite a more senior employee representative to be involved in the discussions. In the event there is no agreement to refer the matter to a more senior level or it is agreed that such a reference would not resolved the matter, the parties shall jointly or individually refer the matter to FWC for assistance in resolving the matter by mediation and/or conciliation and where the matter in dispute remains unresolved, arbitration. The decision of FWC will bind the parties, subject to either party exercising a right of appeal against the decision to a full bench. For the avoidance of doubts, the parties expressly confer on the FWC all necessary and incidental powers to conduct the Conciliation and Arbitration.

41.6. In order to facilitate the process:

1) The party with the grievance must notify the other party in writing at the earliest opportunity of the problem;

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

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 settlement procedures are carried out as quickly as possible.

4) While the parties are attempting to resolve the matter the parties will continue to work in accordance with the Agreement and their contract of employment unless the employee has a reasonable concern about an imminent risk to his or her health and safety. Subject to relevant provisions of any State or Territory occupational health and safety law, even if the employee has a reasonable concern about an imminent risk to his or her health and safety, the employee must not unreasonably fail to comply with a direction by his or her employer to perform other available work that is safe and appropriate for the employee to perform.

41.7. Status Quo

Whilst a matter in dispute is being progressed according to this clause, and subject to there being no stoppage of work as a result of a matter raised under this clause, the status quo will remain. The status quo shall be the state of affairs that existed prior to the issue that has been put in dispute.”

Evidence and factual findings

[8] Evidence was given by Mr Jeff Cassar, the Assistant Branch Secretary of the WA Branch of the Maritime Union of Australia (the MUA). He has had responsibility for employees of CBH at its Kwinana terminal for approximately 4 years.

[9] The employment of the employees at CBH Kwinana is covered by the terms of the Agreement 1 which was approved by Fair Work Commission on 4 November 2013 and reached its nominal expiry date on 17 May 2016.

[10] In September 2015 employees at CBH made Mr Cassar aware that CBH had commenced engaging approximately 11 casual employees to assist with the harvest period, which runs from around November until the end of February. The employees told him that CBH had not consulted with them prior to commencing this recruitment nor did CBH consult the MUA.

[11] On 19 September 2016 Mr Dave Palmer, Plant Operator, emailed the CBH Kwinana Terminal Manager advising he wished to initiate a “formal dispute” on behalf of the workforce as CBH was in the process of “recruiting casual employees without having first complied with the provisions of Clause 34 of the Agreement.”. CBH referred this matter to Mr Bignell, CBH’s Kwinana Zone Manager, to respond.

[12] On 4 October 2016, Mr Bignell responded to Mr Cassar and Mr Palmer in relation to the email of 19 September 2016. On 14 October 2016, Mr Cassar replied to Mr Bignell on behalf of the MUA and its members and addressed the matters he raised in his correspondence of 4 October 2016. Mr Cassar also sought to escalate the matter through the dispute procedure at that point to endeavour to resolve the dispute. On 21 October 2016, Mr Cassar sought a response from CBH. On 24 October 2016, Mr Bignell advised that CBH believed the dispute settlement procedure had been exhausted and the matter could be referred to the Fair Work Commission for resolution.

[13] The MUA made this application on 25 October 2016.

[14] The MUA’s members have told Mr Cassar that the effect of engaging the 11 casual employees will be to reduce their opportunity to work overtime and full hours in the workplace. The MUA members are also aware that in 2015 several casuals were engaged for the harvest period but were retained by CBH after the harvest period had ended and are still in the workplace.

[15] In prior years before this instance, CBH has engaged casuals on at least two occasions. Mr Cassar’s evidence was that prior to 2015 when this had occurred there had been some consultation.

[16] In March 2015 he became aware that CBH were putting on casuals but MUA members had not been consulted about this. Mr Cassar put this matter into dispute but it was a bit late in his view because the recruitment had already started. His evidence was the union was used to being told before the recruitment had happened, but that didn’t happen on this occasion.

[17] On 4 August 2015 Mr Cassar had sent an email 2 to Ms Ross of CBH regarding what the MUA viewed as CBH’s failure to consult versus what CBH viewed as the absence of any obligation for them to consult on this. That email did not refer to raising a formal dispute in relation to that matter. Included in that email was a sentence that read:

“There is no retrospective claim related to the absence of consultation in relation to previous recruitment, but we need to clarify the application moving forward.”

[18] Mr Cassar’s evidence was that in the years prior to this recruitment of casuals in 2015 there had been no dispute.

[19] Evidence was also given by Ms Nadine Ross, who has been employed with CBH since August 2012 and has been the Employee Relations Manager since November 2015.

[20] In this role Ms Ross is responsible for advising the relevant terminal and zone managers on employee relations matters. She has regular telephone and email contact with the Terminal Manager at Kwinana, during which they discuss any employee issues he is experiencing at the Terminal.

[21] CBH is Australia's biggest co-operative and operates in the grain industry. CBH manages storage, handling and transportation for over 85 percent of Western Australia's annual grain harvest. Through its wholly owned subsidiary, CBH Grain Pty Ltd, CBH trades grain throughout Australia and to over 20 markets worldwide.

[22] CBH commonly has an increase in workload during and immediately after harvest. Harvest and its associated high demand shipping period generally commences in around mid-October and ends in late-March the following year. Consequently mid-October to late-March is a critical period each year for CBH at the Kwinana Terminal.

[23] Ms Ross is familiar with the requirements of the Agreement.

[24] CBH has engaged casual employees at regular intervals to assist with high workload periods, particularly during harvest. At the Kwinana Terminal involved in this matter casuals would have been engaged each year since she has been employed in 2012. To her knowledge CBH has never on any of these previous occasions consulted with the MUA prior to the engagement of casuals. She disagrees with Mr Cassar that there has previously ever been any consultation with the MUA, however accepts it is possible, but unlikely, that someone else on behalf of CBH consulted with the union.

[25] In early March 2015, CBH engaged eight Casual Plant Operators to perform work at the Kwinana Terminal. Ms Ross had a high level of oversight of the engagement process. CBH did not consult with the plant operators already employed at the Kwinana Terminal at that time. In August 2015, Mr Cassar emailed her and advised he considered consultation was required. Ms Ross replied that CBH did not agree this was required. No dispute was brought by the MUA or employees in this regard.

[26] Around late July to early August 2016, Mr Jeremy O'Neill, Terminal Manager Kwinana, was in discussions with human resources over a proposal to engage several additional Casual Plant Operators to perform work at the Kwinana Terminal in the months leading into and during harvest.

[27] On 12 September 2016, CBH commenced advertising online on 'Seek' for Casual Plant Operator positions. On 18 September 2016, applications for Casual Plant Operator positions closed. CBH received 118 applications in total. CBH began shortlisting applicants for interviews.

[28] One week later on 19 September 2016 Ms Ross attended a bargaining meeting in relation to a replacement enterprise agreement covering plant operators engaged at the Kwinana Terminal. Mr Cassar was in attendance as the bargaining representative for the employees who would be covered by the proposed new agreement. Mr David Palmer, a Plant Operator was also there as a site delegate. During a break in the meeting, Mr O'Neill received an email from Mr Palmer advising of his wish to initiate the dispute resolution procedure in Clause 41 of the Agreement in relation to CBH's obligation to consult with the workforce prior to commencing recruitment for casual employees. Mr O'Neill subsequently forwarded a copy of this email to Ms Ross. At the time Mr O'Neill received this email the recruitment process for Casual Plant Operators had already commenced and was well underway.

[29] On 13 and 14 October 2016, CBH interviewed 30 candidates for the Casual Plant Operator positions. Between 7 and 11 November 2016, CBH made offers of employment to the 11 successful Casual Plant Operators (the Casual Plant Operators). On 21 November 2016, CBH commenced conducting on site inductions for the 11 new Casual Plant Operators. Shortly after completing their site inductions, these new Casual Plant Operators commenced performing work at the Kwinana Terminal.

[30] If CBH is ordered to cease employing the new Casual Plant Operators or allocating them work until this dispute has been resolved, CBH will be required to either terminate the employment of the new Casual Plant Operators, or cease allocating them hours until after this dispute has been heard and determined.

[31] CBH will suffer significant financial and reputational damage if the interim orders are granted. If CBH is prevented from utilising the new Casual Plant Operators over the next few months, it is likely that:

(a) CBH will need to arrange for existing plant operators at the Kwinana Terminal to perform additional hours of work during harvest; or

(b) CBH Grain will fail to meet its obligations with respect to the shipment of grain under its handling and trading contracts during this period.

[32] Failure by CBH Grain to meet its obligations with respect to the shipment of grain under its handling and trading contracts will have significant financial and reputational ramifications for the CBH Group, in the form of lost revenue, legal (breach of contract) claims and damage to its reputation as a reliable place to ship grain from.

[33] Additional hours of work performed by plant operators are governed by Clause 18 of the Agreement. In summary, the effect of this clause is that the acceptance of additional hours of work by plant operators:

(a) is entirely voluntary, pursuant to clause 18.3.9;

(b) is subject to the restrictions contained in clauses 18.3.1, 18.3.2, 18.3.3, 18.3.4, 18.3.6, 18.3.8, 18.3.10 and 18.1.11; and

(c) comes at an additional cost to CBH, in the form of higher rates of pay under clause 18.3.5, or accrued Time in Lieu under clause 18.3.7.

[34] Ms Ross’ evidence is that the new casual employees engaged in November 2016 have been, on average, working between 3 ½ and 4 shifts per week. The original intake of casual employees in November 2016 was 11 however there are now only 8 of these casual employees remaining.

[35] Ms Ross has not discussed with the plant operators whom triggered this dispute whether they would be willing to accept allocated additional hours or not, however her evidence is that there is not currently a significant take up of voluntary additional hours by the existing plant operators.

[36] The plant operators, other than these new casuals, currently work an average of 42 hours per week. The allocation of the additional hours that would need to be worked if the 8 new casuals are no longer available as a result of granting the interim orders, would also need to be done in a safe manner, taking into account CBH's fatigue management protocols. Ms Ross’s evidence is that the number of extra shifts the pre-existing plant operators would be asked to work if the new casual operators were not available is quite significant and this would cause fatigue if they accepted all those additional shifts. Allocating additional hours to existing employees over a sustained period could create fatigue issues which could cause CBH to lose shipping capacity.

[37] There is a minor discrepancy of two casual employees in the evidence of Mr Cassar versus the evidence of Ms Ross as to the total workforce involved at the Kwinana terminal. On balance I prefer the evidence of Ms Ross and find that currently CBH employs 91 employees in the area subject to this dispute, this total being made up of 56 permanent plant operators, 32 casual employees and 3 Guaranteed Wage Earner (“GWE’s”) at the site in Kwinana. Guaranteed Wage Earners are permanent employees who work a set number of shifts for a guaranteed amount each week. Of the 32 casual employees, 8 are the additional casual employees engaged in November 2016. Prior to the additional casual employees being engaged in November 2016 there were 83 employees (“the original employees”) in total. All employees whether, permanent, casual or guaranteed wage earners, are engaged as plant operators.

Applicant’s submission

[38] The MUA seeks interim orders as follows:

That the FWC order the Respondent to:

1. Cease engaging any new casual employees until this matter is finally heard and determined; and

2. Not utilise any casuals engaged after this dispute was notified on 19 September 2016 until this matter is finally heard and determined.

[39] The Respondent employs approximately 56 permanent plant operators, 34 casual employees and 3 guaranteed wage earner (GWE’s) at the relevant site in Kwinana.

[40] Around the beginning of September 2016, the Respondent commenced a process to engage approximately 11 casual employees to assist with the harvest period which runs from in or about the beginning of November until the end of February. The Respondent had not consulted with the Applicant or the employees prior to commencing this recruitment process.

[41] On 19 September 2016 Mr Dave Palmer, Plant Operator, emailed the Terminal Manager in Kwinana and advised him that he wished to initiate a “formal dispute” on behalf of the workforce as CBH was in the process of recruiting casual employees without having first complied with the provisions of Clause 34 of the Agreement. The matter was the subject of email correspondence between the Applicant and the Respondent. On 24 October 2016, the Respondent advised that it believed the dispute settlement procedure had been exhausted and the matter could be referred to the Fair Work Commission for resolution.

[42] Section 589 of the act provides the following:

“589 Procedural and interim decisions

(1) The FWC may make decisions as to how, when and where a matter is to be dealt with.

(2) The FWC may make an interim decision in relation to a matter before it.

(3) The FWC may make a decision under this section:

(a) on its own initiative; or

(b) on application.

(4) This section does not limit the FWC’s power to make decisions.

[43] In the Health Services Union v Victorian Hospitals Industrial Association and Others 3, the Full Bench held the test for making an interim order was the test set out by the High Court in Australian Broadcasting Corporation v O’Neill4.

[44] The Applicant submits that the Agreement provides a very broad obligation on the Respondent to consult with employees when two triggers are met. They are:

1) The Company must be likely to introduce change (or changes) in production, program, organisation, structure or technology; and

2) that change must be likely to have significant effects on employees.

[45] The Applicant submits that it is clear that the recruitment of 11 casual employees is a change to the organisation of labour in the workplace or a change to the structure of the workforce such that it meets the first trigger.

[46] The Applicant further submits that the meaning of “significant effect” within the Agreement can be discerned by looking at the text of Clause 34.2 which provides that:

“Without limiting the generality thereof, significant effects include termination of employment, changes in the composition, operation, or size of the workforce or in the skills required, the elimination or diminution of job opportunities, promotion opportunities or job tenure, the alterations of hours of work, the need for retraining or relocation or transfer of employees to other work or locations, the restructuring of jobs, the use of contractors and the legal or operational structure of the business.”

[47] The Applicant submits that it is obvious from a plain reading of the text of Clause 34.2 of the Agreement that the recruitment of 11 additional casual employees is a change to the composition of the workforce and/or a change to the size of the workforce. Further, it is clear from the evidence that the engagement of 11 casual employees will result in the diminution of opportunities to work overtime for at least some employees.

[48] The Applicant submits that, on the evidence, it has a very strong prima facie case so the first test for the Commission to make an interim order has been satisfied.

[49] In the circumstances, the Applicant submits that the second trigger for interim orders is also clearly met. The evidence is that the harvest will be over by February 2017 and the detriment by way of lost opportunity for employees to work overtime will have already been suffered. The Applicant submits that the balance of convenience weighs heavily in its favour.

[50] Accordingly, the Applicant submits that orders in the terms sought should be made in the circumstances.

[51] The Applicant notes that Clause 41.7 of the Agreement provides that:

“41.7. Status Quo
Whilst a matter in dispute is being progressed according to this clause, and subject to there being no stoppage of work as a result of a matter raised under this clause, the status quo will remain. The status quo shall be the state of affairs that existed prior to the issue that has been put in dispute.”

[52] The Applicant submits that it has progressed the dispute in accordance with this clause and that there has been no stoppage of work as a result of the matters raised under this clause. In the circumstances, the Applicant submits that it is entitled to the benefit of Clause 41.7 of the Agreement.

[53] The Applicant submits that while the FWC cannot make a determination that past conduct constitutes a breach of the Agreement it can determine the meaning and effect of the Agreement and make an order that prevents its breach.

[54] Accordingly, the Applicant submits that interim orders in the terms sought should be made in the circumstances.

Respondent’s Submission

[55] The Respondent operates in the grain industry and is responsible for the storage, handling and transportation of over 85 percent of Western Australia's annual grain harvest.

[56] In its industry, the Respondent frequently experiences an increase in workload during harvest. Harvest generally commences in around mid-October and ends in around late-March the following year.

[57] The Respondent has a long history of engaging casual employees throughout its business during busy periods to provide temporary assistance.

[58] In previous instances when the Respondent has engaged Casual Plant Operators at its Kwinana grain processing terminal the Respondent has not consulted with the existing Plant Operators employed at the time prior to engaging those Casual Plant Operators.

[59] Clause 34 of the Agreement deals with consultation requirements in relation to 'changes in production, program, organisation, structure or technology that are likely to have significant effects on employees'.

[60] On 13 and 14 October 2016, the Respondent interviewed 30 candidates for the Casual Plant Operator positions.

[61] Between 7 and 11 November 2016, the Respondent made offers of employment to the 11 successful Casual Plant Operators.

[62] On 21 November 2016, the Respondent commenced conducting site inductions for the 11 new Casual Plant Operators. Following completion of their inductions, all Casual Plant Operators commenced working, and have continued to perform work, at the Kwinana Terminal from time to time.

[63] The Applicant is seeking interim orders requiring the Respondent to:

(a) Cease engaging any new casual employees until this matter is finally heard and determined'; and

(b) not utilise any casuals engaged after this dispute was notified on 19 September 2016 until this matter is finally heard and determined.

[64] It is noted at the outset that the interim orders sought are not limited to casual employees engaged to work as plant operators at the Kwinana Terminal. To that end, the Respondent submits that on their face, the interim orders sought go beyond the scope of the dispute.

[65] For interim orders to be granted, the applicant for such orders must satisfy the Fair Work Commission that:

(a) they have an arguable case;

(b) they will suffer prejudice that cannot be remedied by damages if the interim orders are not granted; and

(c) the balance of convenience favours granting the orders sought 5.

[66] The party seeking the orders bears the onus of proving the above.

[67] The Respondent submits the Applicant has not met the burden of proof required for the Fair Work Commission to be satisfied the making of interim orders is necessary.

[68] The Respondent submits the Applicant has not demonstrated it has an arguable case.

[69] Clause 34 of the Agreement requires the Respondent to consult with affected employees when the Respondent is likely to introduce changes in production, program, organisation, structure or technology that are likely to have significant effects on employees.

[70] The Respondent submits the Applicant has not demonstrated it has an arguable case that the proposal to employ a small number of Casual Plant Operators on a temporary basis is a 'change'.

[71] The Respondent has, for many years, engaged temporary casual employees to deal with high workload periods.

[72] In the event the Commission takes a contrary view, the Respondent further submits the Applicant has not demonstrated it has an arguable case that the proposal to employ a small number of Casual Plant Operators on a temporary basis is a 'change' to 'production, program, organisation, structure or technology'. Further, the Respondent submits the Applicant has not demonstrated an arguable case that the proposal to employ a small number of Casual Plant Operators on temporary basis will have a 'significant effect' on any existing Plant Operators at the Kwinana Terminal.

[73] Finally, or in the alternative, even if it was found that the Respondent was required to consult with plant operators in the circumstances (which is denied), the Respondent submits the Applicant does not have an arguable case that the Respondent has failed to meet its obligations in this regard.

[74] Specifically, there is no evidence that any existing Plant Operators are, or will be, affected by the proposal to employ a small number of Casual Plant Operators on a temporary basis.

[75] Employees do not have a 'right' to work overtime, when the take up of overtime is entirely voluntary 6. Accordingly, there would be no employees with whom the Respondent would be required to consult even if Clause 34 did apply in these circumstances.

[76] The Applicant submits that 'the detriment' that will be experienced by the plant operators if the interim orders are not made is 'lost opportunity to work overtime'. Accordingly, the key detriment that the Plant Operators will suffer if the interim orders are not made and the Applicant subsequently goes on to succeed with the substantive dispute, is monetary in nature (overtime payments).

[77] The Respondent submits that this detriment can be easily quantified and remedied by damages, if required. This can be done by the Respondent calculating the number of hours of work that were performed by the new Casual Plant Operators during the relevant period, and then quantifying what the value of this work would have been had it been allocated to existing Plant Operators instead.

[78] The Applicant has not led any evidence from any existing plant operators to the effect that they will suffer any detriment if the interim orders are not granted. Specifically, the Applicant has not led any evidence from existing plant operators to the effect that they are not currently allocated sufficient additional hours.

[79] In contrast, the prejudice that will be experienced by the Respondent if the interim orders are made will be significant and cannot be easily remedied by damages.

[80] If the interim orders are granted, the Respondent will most likely need to arrange for existing plant operators at the Kwinana Terminal to perform additional hours of work during harvest 7.

[81] The acceptance of additional hours by employees is entirely voluntary. If the Respondent is prevented from continuing to employ the Casual Plant Operators, but receives insufficient volunteers to complete the relevant work, it will likely be unable to meet its shipment obligations under its trading and handling contracts. This in turn has significant on-going financial ramifications for the Respondent, in the form of lost revenue, lost contracts, reputational/brand damage and legal claims 8.

[82] The Respondent's ability to allocate additional hours of work to plant operators is also constrained by limitations contained in Clause 18 of the Agreement 9. If, in order to meet its obligations under its trading contracts, the Respondent allocated additional hours to existing Plant Operators outside the limitations contained in the Agreement, the Respondent could face civil penalties for breaching its Agreement.

[83] Further, to the extent existing plant operators volunteered to perform additional hours in a manner that was unsafe and caused a fatigue related risk, this could have far reaching personal ramifications for the health and wellbeing of the existing plant operators which could not be easily remedied by compensation.

[84] If the interim orders sought were granted, this would cause a detriment to the additional Casual Plant Operators who have already been employed by, and are performing work for, the Respondent, in the form of loss of employment or opportunities for work 10.

[85] The Applicant has not proven to the standard required that it, or its members, will suffer a prejudice that cannot be remedied by damages if the interim orders are not granted. In contrast, the Respondent has proven that it will suffer a prejudice that cannot be remedied by damages if the interim orders are granted.

[86] Given that the Applicant has not shown it has an arguable case, or that it or the plant operators will suffer irreparable damage if the orders are not granted, the balance of convenience weighs against granting the orders.

[87] In the event the Commissioner is minded to grant the interim orders sought, the Respondent seeks an undertaking from the Applicant that it will compensate the Respondent for any damage, expense or loss reasonably incurred by the Respondent in this regard.

[88] In seeking the interim orders, the Applicant relies on Clause 41.7 of the Agreement, which provides:

“Whilst a matter in dispute is being progressed according to this clause, and subject to there being no stoppage of work as a result of a matter raised under this clause, the status quo will remain. The status quo shall be the state of affairs that existed prior to the issue that has been put in dispute.”

[89] There are previous decisions which have considered the application of status quo clauses contained in enterprise agreements. These decisions are all predicated on there having been some clear change in the way work is to be performed.

[90] In this case, the decision by the Respondent to employ a small number of Casual Plant Operators to perform work on a temporary basis at the Kwinana Terminal was not a workplace change. Rather, it was part of the Respondent's ordinary course of business.

[91] The status quo can only be maintained in the event there is a change made or proposed in the workplace, In the event there is a change, the interpretation of status quo provisions and their effect is dependent upon the way in which they are drafted, the provisions or issues that are in dispute and the particular circumstances of a dispute 11.

[92] The party seeking to rely on a status quo provision to prevent management from making some change bears the onus of proving that the changes proposed should not be made, or should be offset by some compensation or other adjustment 12.

[93] In Australian Meat Industry Employees' Union, Newcastle and Northern Branch v Sunnybrand Chickens and another 13, Deputy President Harrison held:

“The purpose of the disputes procedure and the invocation of the status quo is to allow resolution of the substantive dispute to occur without prejudice or with minimal prejudice to either party. The disputes procedure and insistence on the status quo cannot be used as an open ended mechanism for delay or obstruction of lawful and legitimate management initiative.”

[94] In Automotive, Food, Metals, Engineering, Printing & Kindred Industries Union v Ardmona Foods Limited 14, Justice Ryan considered the application of a status quo provision that referred to 'status quo as existed immediately before the dispute will remain while the dispute is being resolved'. Justice Ryan held that a procedure which was part of 'normal work' should be allowed to continue notwithstanding a status quo provision.

[95] In CEPU v Tasman Water Sewerage Corporation Pty Ltd (Tasman Water) 15, the employer had already embarked on a course of termination of employment prior to the dispute arising. The subsequent termination of the employee's employment (following the dispute being raised) was held to be the status quo16.

[96] In Seiffert v Patrick Projects Pty Ltd 17, Commissioner Cloghan considered a status quo clause which contained identical wording to Clause 41.7 of the Agreement. In that case, an employee had brought a dispute which related to the termination of his employment. Commissioner Cloghan held that an order maintaining the 'status quo' which existed prior to the dispute arising was 'not possible' because the relevant action had already occurred.

[97] Historically, the Respondent has always recruited casual employees throughout its business, including at the Kwinana Terminal, without consulting its existing employees 18.

[98] The engagement of casual employees from time to time is part of normal work at the Kwinana Terminal and does not represent a change.

[99] The “state of affairs that existed prior to the issue that has been put into dispute” is the engagement of Casual Plant Operators at the Kwinana Terminal without consultation taking place first with the Plant Operators.

[100] The Respondent commenced a recruitment process for the Casual Plant Operators in August 2016, well before the Applicant's dispute was first raised on 19 September 2016 19. The Applicant took no steps to dispute the process being followed in this regard until 19 September 201620.

[101] Recruitment was already underway when the Applicant first raised its dispute 21.

[102] All the Respondent has done since it was notified of the dispute on 19 September 2016, is continue the recruitment process that had already begun 6 weeks earlier.

[103] A majority of the decisions relating to status quo come from cases involving a dispute about the introduction of a new workplace change. The dispute in this instance does not concern the introduction of a change or action. That is, the Applicant is not disputing whether or not the Respondent can, or should, employ the Casual Plant Operators at all. Rather, the dispute in this instance concerns the correct interpretation of Clause 34, and whether (pursuant to that clause) the Respondent is required to consult with the plant operators in these circumstances.

[104] The Respondent submits that if the 'status quo' provision was interpreted in a way that prevented the Respondent from employing the Casual Plant Operators for the duration of the dispute, that would go beyond the intended reach of a status quo provision. Even if the Applicant succeeds in its substantive dispute, the Respondent will ultimately have the discretion to employ Casual Plant Operators. The question is just whether or not this occurs following consultation with the other plant operators.

Conclusion

[105] The Applicant's application for interim orders should not be granted, because the Applicant has not been able to prove:

(a) that it has an arguable case;

(b) that it will suffer prejudice that cannot be remedied by damages if the interim orders are not granted; or

(c) that the balance of convenience favours making the orders sought.

[106] The decision to employ a small number of Casual Plant Operators at the Kwinana Terminal does not represent a change. Rather, it is part of normal work, or the ordinary course of business. The Respondent has not historically consulted with the plant operators at the Kwinana Terminal about a decision to employ a small number of Casual Plant Operators.

[107] This is a dispute about the interpretation of the consultation obligations contained in Clause 34 of the Agreement. It is not a dispute about whether or not the Respondent can employ Casual Plant Operators. Even if the Applicant succeeds in the substantive dispute, the Respondent will have the right to employ casual Plant Operators at an appropriate time. Accordingly, orders which prevent the Respondent from employing Casual Plant Operators go beyond the scope of the dispute.

[108] In the event the Commission takes a contrary view, it is submitted that at the time the issue came into dispute, the recruitment process for Casual Plant Operators was already well underway. That is the status quo which should apply until the substantive dispute has been determined.

Consideration

The applicable principles

[109] Both parties submit that the principles the Commission should apply to an application for interim orders are those set out by the High Court of Australia in the decision of Australian Broadcasting Corporation v O'Neill 22. In this decision Gleeson CJ and Crennan JJ site with approval23 the explanation of these principles in the separate reasons of Gummow and Hayne JJ set out below,

“Interlocutory injunction:

65. The relevant principles in Australia are those explained in Beecham Group Ltd v Bristol Laboratories Pty Ltd 24. This High Court decision (Kitto, Taylor, Menzies and Owen JJ) said that on such applications the court addresses itself to two main inquiries and continued:

“The first is whether the plaintiff has made out a prima facie case, in the sense that if the evidence remains as it is there is a probability that at the trial of the action the plaintiff will be held entitled to relief ... The second inquiry is ... whether the inconvenience or injury which the plaintiff would be likely to suffer if an injunction were refused outweighs or is outweighed by the injury which the defendant would suffer if an injunction were granted.”

By using the phrase "prima facie case", their Honours did not mean that the plaintiff must show that it is more probable than not that at trial the plaintiff will succeed; it is sufficient that the plaintiff show a sufficient likelihood of success to justify in the circumstances the preservation of the status quo pending the trial. That this was the sense in which the High Court was referring to the notion of a prima facie case is apparent from an observation to that effect made by Kitto J in the course of argument. With reference to the first inquiry, the Court continued, in a statement of central importance for this appeal:

“How strong the probability needs to be depends, no doubt, upon the nature of the rights [the plaintiff] asserts and the practical consequences likely to flow from the order he seeks.”

[110] Consequently the Commission is required to determine whether the MUA on the evidence has a prima facie case, that is whether there is a serious issue to be tried, and secondly whether the balance of convenience favours granting the orders sought.

Arguable Case

[111] The Commission’s task in the future proceedings concerning this application will be to determine whether Clause 34 Consultation about Change had application in the particular circumstances of this matter.

[112] Sub Clause 34.2 concerns a duty to notify affected employees “Where CBH is likely to introduce changes in production, program, organisation, structure or technology that are likely to have significant effects on employees.”

[113] A first question is whether CBH by engaging the additional casual employees as it did, was introducing a change in production, program, organisation, structure or technology?

[114] The Respondent argues there has been no change because its actions in 2016, in engaging additional casual employees, were no different from and involved no change to the past practice. The MUA argue that engaging the additional casual employees was a change in the organisation of labour or to the structure of the workforce.

[115] Certainly employing additional employees was a change. It possibly is a change in organisation or structure so I accept the MUA has an arguable case on this point.

[116] The second question is whether the change, employing additional casual employees, was likely to have significant effects on employees.

[117] Clause 34.2 says that “Without limiting the generality thereof, significant effects includes termination of employment, changes in the composition, operation, or size of the workforce or in the skills required, the elimination or diminution of job opportunities, promotion opportunities or job tenure, the alteration of hours of work, the need for retraining or relocation or transfer of employees to other work or locations, the restructuring of jobs, the use of contractor’s and the legal or operational structure of the business.”

[118] The MUA submit that the employment of additional casual employees is a change in the composition of the workforce and/or a change to the size of the workforce and is a significant effect. It is also argued this change will result in the diminution of opportunities to work overtime for at least some employees. The Respondent rejects both arguments.

[119] On this second question I accept it is arguable that the employment of additional casual employees is a change in the composition or size of the workforce, a type of effect mentioned in 34.2. I doubt however that a reduction in the opportunity to work overtime could be said to be a “...diminution of job opportunities...”. If what occurred here was a change in the composition or size of the workforce that by itself is not enough, it must also be “…likely to have a significant effect on employees…” to trigger an obligation to notify.

[120] Not all changes to the composition or size of a workforce will in my view be a significant effect. If one additional employee was engaged and the particular workforce numbered one thousand employees this would not be a significant effect on those employees even though it was a change to the size of the workforce. The word “significant” must have some work to do when interpreting these provisions.

[121] In the circumstances of this case it is open to be contested whether the effect of the change will be a significant effect on the original employees, but I accept the MUA has demonstrated that there is an arguable case.

[122] I am satisfied then that the MUA does have a prima facie case that in the particular circumstances of this matter Clause 34 Consultation about Change of the Agreement applied. That is not to say that it has been demonstrated that it is more probable than not that at a full hearing the MUA would succeed.

Balance of Convenience

[123] The MUA submit in terms of the balance of convenience that the evidence is that the harvest which triggers the demand by CBH for additional employees will be over by February 2017, and consequently the detriment by way of lost opportunity for the original employees to work additional hours will have already been suffered by the time a final hearing of this matter is concluded and a decision issued. The MUA say these facts weigh heavily in favour of granting the interim orders.

[124] In response the Respondent argues that whatever lost opportunity to work overtime there may be for the original employees; this detriment could be quantified and remedied by damages in future if required. The Respondent also points out there is no evidence as to the willingness of the original employees to work additional hours if they are offered. It is unknown how many would be willing to do so and it is unknown how many hours they would be willing to accept and how long they would be willing to accept this additional work week by week.

[125] The Respondent submits that in contrast, the prejudice and detriment that would be experienced by CBH and others if the interim orders are made will be significant and cannot be easily remedied by damages. The Respondent will be constrained in completing all of the work it needs to by the willingness and capacity of the original employees to complete all of the shifts that the additional casual employees would otherwise have worked. There is every likelihood then that the work CBH needs to have done, won’t all be done and so it is likely to be unable to meet its shipment obligations and satisfy its trading and handling contracts. This would have significant on-going financial ramifications involving a loss of revenue, potentially lost contracts and reputational damage and would expose CBH to legal claims for breach of contract.

[126] Separately there would be significant detriment to the additional casual employees who have been working for CBH since November as they would lose all their income.

[127] The Respondent also argues that the context needs to be borne in mind; that what is complained of by the MUA in the substantive application is only that CBH did not consult with them prior to engaging the additional casual employees. The obligations in Clause 34 of the Agreement, if it did apply, would in no way limit the right of CBH as necessary to employ additional casual employees. Consequently the interim orders sought, which would prevent CBH from employing the number of staff it wishes to, go beyond any relief the MUA could achieve even if it was successful with it substantive application.

[128] Before turning to consider the parties submissions it is useful to review the evidence before the Commission.

[129] The evidence for the MUA with respect to the balance of convenience is that the MUA’s members have told Mr Cassar that the effect of engaging the 11 casual employees will be to reduce their opportunity to work overtime and full hours in the workplace. The MUA members are also aware that in 2015 several casuals were engaged for the harvest period but were retained by CBH after the harvest period had ended and are still in the workplace.

[130] The evidence for CBH with respect to the balance of convenience issue is that if the interim orders are issued CBH will be required to either terminate the employment of the 8 additional casual employees or cease allocating them hours until after this dispute has been heard and determined. If this occurs CBH will suffer significant financial and reputational damage. This is because CBH will need to attempt to have the hours that would otherwise have been worked by the additional casual employees worked as additional hours by the original employees. However currently there is not a significant take-up of voluntary additional hours when these are offered to the original employees. The original employees cannot be required to work additional hours when these are offered, their acceptance of additional hours is voluntary. Even for those original employees willing to work significant additional hours there are constraints on how much they can work because of fatigue risks given the original employees already work 42 hours per week. There would also be an additional cost in terms of the payment rates for these additional hours if worked by the original employees above what would be paid to the additional casual employees for the doing the same hours or a bank of time in lieu would be accrued.

[131] The onus is on the MUA to prove that the balance of convenience favours granting the interim orders it seeks.

[132] The MUA argues the effect of engaging new casual employees is that the original employees are denied the opportunity of working additional hours to do the work the additional casual employees are doing. There is no evidence as to the situation of those original employees in terms of their capacity to accept additional hours offered, nor of their willingness to do so if additional hours are offered to them. There is no evidence before the Commission then as to how many of the original employees in reality have been affected nor to what extent they have been affected. Indeed the only evidence on this issue is the evidence of Ms Ross which was that when additional hours have been offered to the original employees there has been limited take-up of this. This indicates whatever negative effect there is on the original employees in theory will likely be less is practice. Some of the original employees will probably not be willing to work any additional hours and those that are willing can only accept additional hours up to the point of fatigue management constraints.

[133] There are two groups of employees that will be affected by the interim orders the MUA seeks. Whilst the two groups of employees may have theoretically conflicting interests neither is to be preferred over the other by the Commission in determining whether the interim orders should issue. There is no basis on which the interests of the original employees should be raised above the interests of the additional casual employees nor vice versa. However some comparison can be made as to the impact on the two different groups in granting or not granting the interim orders the MUA seeks.

[134] If no interim orders are issued the original employees will not be offered the additional work that would have been done by the additional casual employees. For those original employees willing to work additional hours there is therefore some financial lost opportunity but this will be constrained because of fatigue risks and the fact they are already working 42 hours per week. Meanwhile the additional casual employees will continue to have the opportunity to work 3 ½ to 4 shifts per week which will amount to considerably more financial benefit for them than the quantum of lost financial opportunity of any individual original employee willing to work additional hours.

[135] If interim orders are issued, those original employees willing to work additional hours will receive some financial benefit, albeit constrained by their capacity to work additional hours on top of their existing 42 hours per week. Meanwhile the additional casual employees will not work at all and therefore will individually suffer a financial loss greater than the additional financial benefit received by those of the original employees willing to work additional hours.

[136] The evidence is that it is likely that CBH, being limited to only using the original employees, will not be able to complete all the work that it needs to. There is also the likelihood of CBH then not being able to meet its shipment obligations resulting in the consequential loss of revenue, reputational damage and exposure to legal consequences for not meeting its contractual obligations to its customers. There will be some additional financial cost in any event in terms of higher rates being paid to the original employees.

[137] If the interim orders are issued, CBH for an unknown period would also be prohibited from engaging new casual employees regardless of any future business necessity to do so. This goes far beyond any outcome that could result even if the MUA succeed with the substantive matter. Obviously the Commission should be very cautious indeed when considering constraining the right of an employer to manage its business as it sees fit, let alone removing an employer’s fundamental right to employ new employees as and when it wishes.

[138] In my view the balance of convenience is most definitely weighted against granting the interim orders the MUA seeks. The MUA has not led evidence with any specificity as to the consequences of not granting the interim orders, however, what is known is that the negative consequences for the original employees are limited to some of those who are desirous of working additional hours beyond 42 per week not having that opportunity to do so if they want to. Weighing against this are the significantly greater financial consequences for the additional casual employees who will lose all of their income from CBH if the interim orders were issued and the significant negative consequences for CBH detailed in the evidence above.

[139] Finally with respect to the status quo provision contained within the Agreement’s dispute settlement procedure, given the dispute here involves a primary contest between the parties as to whether or not there has been any change at all and this question will only be finally determined by the Commission following a full hearing to determine the MUA’s application, there is no basis to favour one side or the other’s view of the status quo at this preliminary stage.

[140] My decision is that the interim orders sought by the MUA should not be issued.

COMMISSIONER

Appearances:

L. Edmonds of the MUA for the applicants.

B.Pole of Counsel for the respondent.

Hearing details:

2016.

Perth:

December 14.

 1   [2013] FWCA 8665.

 2   Exhibit R1.

 3   [2012] FWAFB 2901.

 4 (2006) 227 CLR 5.

 5 (2006) 227 CLR 57, at paragraph 19.

 6   [2012] FWA 2795 at paragraph 33 and 69 to 71.

 7   Exhibit R2, at paragraph 31.

 8   Exhibit R2, at paragraphs 31 and 32.

 9   Exhibit R2 at paragraph 33.

 10   Exhibit R2 at paragraph 29.

 11   [2015] FWC 4177, at paragraph 18.

 12 (2006) 157 IR 93, at paragraph 17 to 20.

 13 [2003] NSWIRComm 361, at paragraph 48.

 14 [2006] FCA 1039.

 15 [2015] FCCA 2382.

 16   Ibid. at paragraph 60.

 17   [2014] FWC 7019.

 18   Exhibit R2, at paragraph 15 to 17.

 19   Ibid., at paragraph 18.

 20   Ibid., at paragraph 18 and 23.

 21   Exhibit A1 at paragraph 5.

 22 [2006] HCA 46 227 CLR 57.

 23   Ibid., at paragraph 19.

 24 [1968] HCA 1; 118 CLR 618.

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