Toyota Motor Corporation Australia

[2010] FWA 9254

Note: An appeal pursuant to s.604 (C2011/3021) was lodged against this decision - refer to Full Bench decision dated 13 April 2011 [[2011] FWAFB 2132] for result of appeal.

[2010] FWA 9254

FAIR WORK AUSTRALIA

DECISION

Fair Work Act 2009
s.217 Application to vary an agreement to remove an ambiguity or uncertainty

Toyota Motor Corporation Australia
(AG2010/17657)

Fair Work Act 2009
s.739—Dispute resolution

“Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU)
v
Toyota Motor Corporation Australia
(C2010/4778)

Workplace Relations Act 1996
s.170LW - pre-reform Act - Application for settlement of dispute (certified agreement)

“Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU)
v
Toyota Motor Corporation Australia
(C2010/4220)

Vehicle industry
COMMISSIONER BLAIR	MELBOURNE, 22 DECEMBER 2010

Regarding the payment of penalty rates.

[1] This decision arises out of two applications before Fair Work Australia (the Tribunal). The first application is an application under s.217 of the Fair Work Act 2009 (the Act) to vary an agreement to remove an ambiguity or an uncertainty (AG2010/17657). The second application is an application s.739 of the Act to deal with a dispute (C2010/4778). C2010/4778 supersedes the original application under s.170LW of the pre-reform Act for settlement of a dispute (certified agreement) which is C2010/4220.

[2] The various applications go to the issue regarding the payment of penalty rates for early morning shifts.

[3] In the s.217 application the applicant is Toyota Motor Corporation Australia (the Company) and in the s739 application the applicant is the “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU) (the Union).

[4] A number of conferences were held between the parties and chaired by the Tribunal in order to settle the matter; however, the parties were unable to agree to a settlement and the matter was set down for arbitration on 25 November 2010. Directions were issued by the Tribunal and were complied with by the parties.

Jurisdiction under s.217 of the Act

[5] An issue arose during proceedings that related to whether or not the Tribunal has the power to deal with an application under s.217 of the Act. It was asserted by the Union that s.217A(3), which states:

“(3) FWA must not arbitrate (however described) the dispute.”

[6] S.217 reads as follows:

“217A FWA may deal with certain disputes about variations

(1) This section applies if a variation of an enterprise agreement is proposed.

(2) An employer or employee organisation covered by the enterprise agreement or an affected employee for the variation may apply to FWA for FWA to deal with a dispute about the proposed variation if the employer and the affected employees are unable to resolve the dispute.

(3) FWA must not arbitrate (however described) the dispute.”

[7] Upon reviewing the arguments raised by the respective parties in terms of the jurisdiction of the Tribunal, the Tribunal is satisfied that it does have power under s.217, “variation of an enterprise agreement to remove ambiguity or uncertainty”. This view is endorsed by the decision of VP Watson in [2010] FWAA 7742, issued in Sydney on 9 November 2010. In that matter before His Honour the question of jurisdiction was raised and his Honour referred to that issue at [9] of his decision where he quotes s.217 of the Act.

[8] It is the Tribunal’s view that the argument by the Union under s.217A, where it states that the Tribunal does not have jurisdiction to arbitrate the dispute, is based on a misreading of the Act. It is the Tribunal’s view that the application of s.217A relates to an application under s.207 of the Act. Section 217 is a distinct provision and has no relation to s.217A. Therefore, the Tribunal would determine that, on the preliminary issue it does have jurisdiction to deal with the matter.

Merits of the Applications

[9] The Tribunal will deal with both applications, as part of this decision, for the arguments overlap and are fundamentally the same.

The Union’s Argument

[10] The Union states that this dispute relates to the interpretation of clause 41.6 of the 2008 variation to the 2005 Agreement and the 2010 Agreement, in the context of Toyotas decision not to pay employees in accordance with clause 41.6, at the overtime rate where the employee(s) work the early morning shift for less than 5 days. Clause 41.6 states;

“41.6 Rates for Shift Workers

An Employee working on Early Morning Shift an Afternoon Shift or Night Shift;

• which does not continue for five successive Working Days or more, will be paid at the rate of time and one-half;

• which has been in operation for five successive Working Days or more shall be paid, in addition to the ordinary rate, an amount equal to the following relevant percentage of the ordinary rate:

1. 15% for working on Early Morning Shift only,

2. 18% for working on Afternoon Shift only;

3. 30% for working on Night Shift only”

[11] The Union is seeking an order that employees who work or have worked an early morning shift that does not continue for 5 successive working days or more be paid at the rate of time and half for the time worked on those days. The Union states that upon receipt of the Unions submissions the company decided to apply to remove uncertainty and/or ambiguity. The Union submits that that course is not open to the company. The Union relies upon the following clauses to demonstrate why.

“2. RELATIONSHIP TO OTHER AWARDS

In order to produce a single document that sets out applicable terms and conditions and to comply with the Fair Work Act 2009.

This Agreement consolidates the following documents:

• Toyota Australia Vehicle Industry Award 1988;

• Toyota Australia (Vehicle Industry Long Service Leave) Award 1988;

• Toyota Australia (Professional Engineers and Scientists) Consent Award 1992;

• Toyota Motor Corporation Australia Limited (Enterprise Bargaining) Agreement 1992;

• Toyota Australia Workplace Agreement (Altona) 1995;

• Toyota Australia Workplace Agreement (Altona) 1999;

• Toyota Australia Workplace Agreement (Altona) 2002;

• Toyota Australia Workplace Agreement (Altona) 2005;

• AMI Toyota Limited Second Tier Negotiations;

• 1989 National Wage Case;

• Toyota Australia Interim Workplace Agreement (Altona 1994);

• Structural Efficiency Agreement;

• Toyota Australia Workplace Agreement (Altona) 1996;

• Toyota Motor Corporation Australia (TMCA) Workplace Agreement (Altona) 2005 (as varied and extended)

• Toyota Motor Corporation Australia (TMCA) Workplace Agreement (Port Melbourne, Sydney & Regions) 2005 (as varied and extended)

• All existing Letters of Understanding & Memorandum of Understanding

The above awards and agreements are superseded by this Agreement.

2.1 Savings Provision

From the date of coming into affect of this Agreement, the Parties agree that the Awards and Agreements used in the 2008 consolidation process are intended to be superseded by this Agreement, but, no rights, obligations or liabilities incurred or accrued under the above mentioned Awards or Agreements shall be affected by such supersession, and that notwithstanding anything else in this Agreement, the legal entitlement of an Employee (in respect of such rights, obligations or liabilities) shall not be reduced by reason of the making of this Agreement.

The Parties agree that a dispute arising from the Awards and Agreements will be able to be raised in accordance with the Disputes Settlement procedures of this Agreement.

2.2 Parties Intention

In consolidating the existing Awards and Agreements, The Parties have used their best endeavours to include those provisions which continue to have effect and discard provisions which are obsolete.

2.3 Errors and Omissions

The Parties agree that should it be discovered that a material provision has been inadvertently excluded from or mistakenly included in this Agreement as a result of the consolidation process, that they will make application, consistent with the Fair Work Act 2009, as amended from time to time, to vary the Agreement to include or exclude the provision (as the case may be).”

[12] The Union states that the changed clause 41.6 of the Agreement was by consent and arose out of the 2008 variation to the 2005 Agreement. Evidence was provided by Charlie Mamara, Senior Shop Steward for the Union at the Toyota Altona site, who provided a statement and gave verbal evidence.

[13] Mr Mamara stated that he represented the Vehicle Division of the AMWU in top to top negotiations of the 2008 variation. He states that in his role as a Senior Shop Steward he was aware of the practice of managers at the Altona site, who would start members early but only make them work up to three days rather than 5 days so as to avoid shift obligations. Mr Mamara states that in the 2008 negotiations, he raised this issue and asked for the same rule to apply to early morning shifts as applied to afternoon and night shifts. He states that these negotiations concerning this specific matter occurred in or around September 2008. He states that the company representatives agreed to extend the provisions that applied to afternoon and evening shift to early morning shifts. He also states that during the 2009 negotiations the company raised no issues concerning the application of this particular clause. Mr Mamara states that he does not believe that there was an inadvertent inclusion of the early morning shift as claimed by the company.

[14] It is important to note that the Union’s application and their submissions state that what the Union seeks is a determination in respect of the future payments pursuant to clause 41.6 for employees working early morning shifts for less than 5 days rather than a determination of whether there is a breach of pre-existing legal rights.

The Respondent’s Argument

[15] The Respondent’s argument is that Clause 41 is ambiguous and uncertain when viewed as a whole. The company states the negotiations for the 2008 variation included a substantial consolidation exercise in which the applicable conditions in the Toyota Australia Vehicle Industry Award 1988 together with other industrial instruments including previous Enterprise Agreements and letters of understanding were to be consolidated into a single comprehensive agreement.

[16] They state that the parties had agreed that Clause 41 should adopt the conditions in Clause 15 of the Award, and the inclusion of the words 'Early Morning Shift' in the first line of clause 41.6 was a drafting anomaly or error.

[17] The company submits that clause 41.1, 41.6 and 41.7 are susceptible to more than one meaning in relation to how they apply to an employee who works less than 5 successive shifts, starting between 4am and 6am. Evidence was provided by Ms Joanne Romano and Ms Jenny Saunders. Miss Romano is currently employed by the company as the Manager Employee Relations Victoria. Miss Saunders is employed by the company as the Corporate Manager Employee Relations. Both gave evidence saying that the variation of clause 41.6 was done inadvertently and was not subject to negotiations as indicated by the Union.

[18] Ms Saunders indicated that any claim during the negotiation that had a cost impact, a costing exercise would be conducted. In this matter, there was no costing exercise done because the company asserts that there were no negotiations around this issue. Firstly because a log of claims served by the Federation of Vehicle Industry Unions (FVIU) in or around July 2008 made no mention of any claim relating to shift allowances or penalties for early morning shifts. Secondly, the inclusion of the early morning shift reference in clause 41.6 of the 2008 variation arose because Mr Marmarasaid words to the effect;

"There's a mistake there, why have we got 3 shift references here [lower down in the clause] but only 2 shift references in the top line. We need to put Early Morning Shift in as well as its missing" [witness statement of Joanne Romano pg 7, para 33]

[19] Ms Romano says that at the time Mr Marmara's suggestions seemed logical.

"We thought it was simply a drafting omission and it was not discussed any further. The words Early Morning Shift were added into the first line of clause 41.6 on that basis". [witness statement of Joanne Romano pg7, para 34]

[20] Ms Romano states the conversation which Mr Mamara raised this issue was about 10-20 seconds, in the context of a meeting which had gone for some hours, and there was no discussion or negotiation. Ms Romano states that it was very clear in the negotiations that the parties understood that they were brining the Award provisions across.

[21] This was consistent with the process of retaining the existing Award provisions and incorporating them into the Agreement itself. This was the clear purpose of a consolidation exercise. Ms Romano states that any changes in language from an Award clause were moved across into the Agreement (including clause 41) were not intended to change the effect of the Award provision and were meant to update or simplify the language.

[22] Ms Romano finally states that at no time during the negotiations for the 2008 variation was there any claim made by the Union that changed the operation of early morning shift or to change the effect of the Award. If there had been it would have been opposed and either rejected by the company or been the subject of significant negotiation.

Conclusion

[23] In reviewing the Decision of His Honour Vice President Watson, in Ambulance Victoria v Liquor, Hospitality and Miscellaneous Union ([2010] FWAA 7742, issued 9 November 2010) His Honour makes reference at paragraph 21 which refers to a Decision of Senior Deputy President Marsh in Beltana Highway Mining Pty Ltd (PR932468) which sets out a useful summary of the relevant principles to be applied under s.217. His Honour then refers to the following principles;

“The following guidance can be discerned from authorities which have dealt with s.170MD(6) applications:

• before exercising its discretion to vary an agreement pursuant to s.170MD(6)(a) the Commission must first identify the ambiguity or uncertainty (PR917548 at para.28, Print M2454 at p.3, Print 2431 at para.8);

• the Commission may then exercise the discretion to remove the ambiguity or uncertainty by varying the agreement (PR917548 at para.28, PR903843 at para.7, Print M2454 at p.4);

• the first step i.e. identification of an ambiguity or uncertainty requires the determination of a "jurisdictional fact" (PR917548 at para.33, 199 CLR 135 at 148);

• the correct approach to identifying an ambiguity or uncertainty requires the making of an objective judgment as to whether, on the proper construction of the relevant provision of an agreement, the wording of that provision is susceptible to more than one meaning (PR917548 at para.49, PR903843 at para.7, Print M2454 at p.3);

• the words used in the provision are construed in their context including where appropriate the relevant parts of the parent award with which a complementary provision is to be read (Print Q2603 at para.30 per Munro J);

• s.170MD(6)(a) is not confined to the identification of which words of a clause give rise to an ambiguity or uncertainty. A combination of clauses may have that effect (Print R2431 at para.12);

• the Commission will generally err on the side of finding an ambiguity or uncertainty where there are rival contentions advanced and an arguable case is made out for more than one contention (Print M2454 at p.4, Print R2431 at para.14);

• the Commission's task is to make an objective judgment as to whether the wording of a provision is susceptible to more than one meaning. It must avoid contentions that are "self serving" (PR924146 at para.20 and PR903843 at para. 7);

• the second step in the process is the exercise of discretion as to whether or not an agreement should be varied to remove the ambiguity or uncertainty (PR917548 at para.54);

• the Commission may not appropriately use its power to rewrite an agreement to install something that was not inherent to the agreement when it was made (Print Q2603 at para.29);

• the Commission is to have regard to the mutual intention of the parties at the time the agreement was made (PR917548 at para.54) and subsequent conduct of the parties;

• the Commission is empowered to remove an ambiguity or uncertainty by varying an agreement to remove it in a manner which gives effect to the mutual intentions of the parties at the time the agreement was made. The Commission is not limited by the form of the application before it (PR917548 at para.56);

• in looking at the context of a provision the Commission is entitled to consider (46 IR 128 at p.134):

• the effect of a prefatory statement made by the parties at the time when it was introduced into the award;

• the circumstances of the origin and use of the clause;

• the time when and the circumstances under which the instrument is made;

• the entire document of which the contentious provision is part or other documents with which there is an association;

• ideas that give rise to an expression in a document.” (paragraph 21 of [2010] FWAA 7742).

[24] In looking at Clause 41, Shift Patterns and Rates for Shift Workers, as a whole, the Tribunal can see that there is a discrepancy in 41.6 as opposed to 41.7 of the Agreement.

“41 SHIFT PATTERNS AND RATES FOR SHIFT WORKERS

41.1 Shift Patterns

Employees will work shifts in one of the following fixed shift patterns (normally worked Monday to Friday):

1. Early Morning Shift

2. Day Shift

3. Afternoon Shift; or

4. Night Shift

For the purposes of this clause:

1. Early Morning Shift means a regular eight hour shift commencing after 4:00am and before 6:00am

2. Day Shift (Ordinary hours) means a regular eight hour shift commencing after 6:00am and finishing before 6:00pm

3. Afternoon Shift means a shift commencing not later than 6:00pm on any day;

4. Night Shift means a shift commencing at any time after 6:00pm on any day

41.2 Transfer To Preferred Shifts

TMCA recognises that there are Employees who wish to transfer to their preferred shifts. In most cases this is a desire by Afternoon Shift and Night Shift Employees to work on the Day Shift. As a way to facilitate transfers, new Employees including Fixed Term Employees will be employed on the Afternoon Shift to allow long term Employees who wish to transfer to Day Shift the first option to do so.

See also Clause 31.5 Shift Area Transfers – Employee Initiated.

41.3 Variation of Shift Times

The method of working shifts may in any case be varied by agreement between TMCA and the Union to suit TMCA's operational requirements and, in the absence of agreement, by seven days notice of alteration given by TMCA to the Employees concerned.

41.4 Commencing and Finishing Times

Shift rosters shall specify the commencing and finishing times of ordinary working hours of the respective shifts.

41.5 Prohibition of Juniors

Employees under the age of sixteen years cannot be required or permitted to work on Afternoon Shift or Night Shift.

41.6 Rates for Shift Workers

An Employee working on Early Morning Shift an Afternoon Shift or Night Shift;

• which does not continue for five successive Working Days or more, will be paid at the rate of time and one-half;

• which has been in operation for five successive Working Days or more shall be paid, in addition to the ordinary rate, an amount equal to the following relevant percentage of the ordinary rate:

1. 15% for working on Early Morning Shift only,

2. 18% for working on Afternoon Shift only;

3. 30% for working on Night Shift only

41.7 Start-Up Shift Rate

For the purposes of this clause:

1. Afternoon Shift means a shift commencing not later than 6:00pm on any day;

2. Night Shift means a shift commencing at any time after 6:00pm on any day;

3. Early Morning Shift means a regular eight hour shift commencing after 4:00am and before 6:00am

An Employee working on an Afternoon or Night Shift (other than a continuous work shift) which does not continue for five successive working afternoons or nights or more in a five day workshop, or six successive afternoons or nights or more in a six day workshop shall be paid at the rate of time and one half for each such shift.

An Employee working continuous work shifts whilst on an Afternoon or Night Shift shall be paid in addition to the ordinary rate an amount equal to fifteen per cent of the ordinary rate.

Where a shift worker’s normal 38 hour roster requires the Employee to work Afternoon, Night or Early Morning Shift on a Saturday, Sunday or Public Holiday, the Employee shall be paid an additional $3.55 for each such shift providing a complete shift is worked.

Payments prescribed by this clause shall stand alone and shall not be included for any other purposes of this Agreement.

Notwithstanding anything else contained in the above clause for the purposes of payment for clerical Employees on shift work, the following definitions shall apply:

1. Afternoon Shift means any shift finishing after 6:00pm and at or before midnight;

2. Night Shift means any shift finishing subsequent to midnight and at or before 8:00am.

[25] Having considered the principles indentified by Her Honour SDP Marsh in Valtana Highway, the Tribunal is satisfied that there is an inconsistency in the wording that could give rise to an ambiguity or uncertainty arising out of the variation of clause 41.6, which in the Tribunals view was an inadvertent variation.

[26] The Tribunal is satisfied that such variation was not subject to too-ing and fro-ing as part of any negotiating process, and most certainly was not subject to any costing exercise, given that the company in this matter refers to a possible liability of in excess of $500,000.00.

[27] The Tribunal is therefore satisfied that the ambiguity and or uncertainty should be remedied to reflect what the mutual intentions of the parties were. That was, as part of a consolidation process, to move award provisions relating to shifts into the Agreement to not only reflect accurately what the Award said but also to reflect the custom and practice which existed and still exists within the company's operations.

[28] The Tribunal is also satisfied that such a variation is allowable under clause 2.3, Errors and Omissions, under clause 2 Relationship to other Awards, given that the Tribunal has found that the change to clause 41.6 was an inadvertent change.

[29] Accordingly the variation will occur with the effect from 1 September 2008. An Order for the variation is attached to this decision.

COMMISSIONER

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