Transport Workers' Union of Australia v McColls Transport Pty Ltd T/A McColls Transport

[2020] FWC 3299

[2020] FWC 3299

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.739—Dispute resolution

Transport Workers’ Union of Australia
v
McColls Transport Pty Ltd T/A McColls Transport
(C2019/4120)

COMMISSIONER WILSON MELBOURNE, 30 JUNE 2020

Alleged dispute about any matters arising under the enterprise agreement and the NES;[s186(6)].

[1] This decision concerns an application made by the Transport Workers’ Union of Australia (TWU), pursuant to s.739 of the Fair Work Act 2009 (the Act) for the Fair Work Commission (the Commission) to deal with an alleged dispute arising under an enterprise agreement regarding the classification of employees of McColl’s Transport Pty Ltd (McColl’s). The Respondent operates a national fresh milk collection and distribution business; however the alleged dispute is in relation to only part of the business, being its Northern Victorian operations covered by the McColl’s Transport Group Holdings Pty Ltd Northern Farm Milk Collective Agreement 2017 – 2019 1 (the Agreement).

[2] The matter was the subject of a hearing before me on 29 April 2020. Mr Justin Cooney and Mr Darryl Coghill appeared for the TWU and Mr Paul Ryan, from the Victorian Transport Association appeared for McColl’s after the company was given permission by me for representation by a lawyer or paid agent, pursuant to the provisions of s.596(2) of the Act. Two witnesses provided evidence through written statements, however neither was required to give oral evidence. The witnesses were Mr Peter Greenway, a longstanding employee and driver, who gave evidence on behalf of the TWU; and on behalf of McColl’s, Mr Roger Robilliard, the company’s General Manager, Dairy Division.

QUESTION FOR DETERMINATION

[3] Two Questions for Determination were proposed by the TWU 2 and have been answered by me in this decision in the following manner:

Q1: Under the McColl’s Transport Group Holdings Pty Ltd Northern Farm Milk Collective Agreement 2017 – 2019 must the employer advise employees of their classification grade and of any changes to their classification grade according to the work the employee performs?

A1: NO.

Q2: Under the McColl’s Transport Group Holdings Pty Ltd Northern Farm Milk Collective Agreement 2017 – 2019 can the employer reduce the classification grade of an employee when the employee performs work classified at a lower grade?

A2: YES.

BACKGROUND

[4] The context of the application is that members of the TWU are employed by McColl’s as drivers of heavy vehicles transporting fresh milk, including from farmyard pickups. The work is covered by an enterprise agreement and is undertaken from McColl’s facilities at Tongala and Cobram, Victoria. The Agreement operates in certain respects in conjunction with two Awards.

[5] At the time of the hearing those awards were, the Road Transport and Distribution Award 2010 3 (the Road Transport Award 2010 or, the RTDA 2010) and the Road Transport (Long Distance Operations) Award 20104 (the Long Distance Award 2010, or LDA 2010). Since the hearing was conducted, each of the awards have been replaced by new modern awards, the Road Transport and Distribution Award 2020 (the Road Transport Award 2020) and the Road Transport (Long Distance Operations) Award 2020 (the Long Distance Award 2020). Each of the 2020 awards differ from the 2010 versions in certain respects. For the purposes of consistency with the submissions made to me, where it is necessary to refer to an award this decision will usually refer to the 2010 version, with a cross-reference then made to the 2020 award. A reference to the “Road Transport Awards” will generally be a reference to both versions, as will a reference to the “Long Distance Awards”, and a reference to “Awards” will generally be a reference to all four.

[6] While including only two wages classifications the Agreement’s scope is expansive:

“1.2 PARTIES BOUND

This agreement is binding on:-

1.2.1 The Transport Workers Union of Australia and its Branches, officers and officials.

1.2.2 McColl's Group Holdings Pty Ltd - This includes all employees employed by McColl's Tankers Pty Ltd and McColl's Transport Pty Ltd in Tongala, Cobram and Northern Victoria.

1.2.3 All current and future Employees of the company and its wholly owned subsidiaries engaged in any of the classifications specified in the Road Transport and Distribution Award 2010 and the Road Transport (Long Distance Operations) Award 2010.”

[7] The two classifications included in the Agreement are Transport Workers Grade 6 and Transport Worker Grade 8. The relevant descriptors are within Appendix 1, which is in these terms:

“APPENDIX 1- CLASSIFICATIONS & WAGE RATES

Employees are classified and paid according to the following:

Transport Worker Grade 6

Employees appointed to this grade can be required to perform any of the following functions for which they have been trained:

•  Driver of a articulated vehicle with more than three-axle and a GCM greater than 22.4 tonnes- capacity over 22 tonnes.

•  Driver of a rigid vehicle and heavy trailer combination with more than 3 axles and a GCM greater than 22.4 tonnes- capacity up to 22 tonnes.

•  Tanker Washer in the washbay area.

Transport Worker Grade 8

Employees appointed to this grade can be required to perform any of the following functions for which they have been trained:

Driver of a rigid vehicle and trailer(s) of double articulated vehicle exceeding 53.4 tonnes gross combination mass (GCM) including b'doubles.”

[8] The TWU submits about these classifications:

“11. Transport Worker Grade 6 (TWG6) and Transport Worker Grade 8 (TWG8) in the Agreement reflect the classification requirements of TWG4 and TWG5 in the LDA 2010 respectively.

12. Generally speaking the distinction between Agreement TWG6 and TWG8 is whether the vehicle being driven is a B-Double, if so the employee classification is TWG8.

13. At the time of engaging an employee the Respondent does not advise the employee if they are classified TWG6 or TWG8 under the Agreement. The employee is hired as a driver and the employee is paid the allocated rate for the work performed on any given day.

14. For instance, if an employee performs local work collecting milk from a dairy driving a B-Double the employee is paid at TWG8, if the employee performs local work collecting milk from a dairy driving a single vehicle the employee is paid at TWG6. The Applicant understands that broadly speaking this characterisation is not in dispute.” 5

[9] The full-time base rates provided for within the Agreement and operative from 1 January 2019 are $30.41 per hour for a “single grade 6” and $31.46 for a B-Double Grade 8.

[10] The dispute arises because McColl’s will assign drivers between the different types of vehicle within its fleet according to its needs as well as the licence held by the driver. The evidence of Roger Robilliard, the General Manager of McColl’s Dairy Division, sets out the substantial nature of the company’s operations. It operates nationally in an arc spanning from Northern New South Wales to South of Perth, Western Australia. During the last spring season it peaked at 220 farm milk collection drivers. The company operates from 16 farm milk depots nationally, collecting between 1.5 and 2 billion litres of milk. Pertinent to the circumstances of this enterprise agreement:

“8. Over the past year, there have been 78 drivers employed under the Agreement;

a. 68 hold an MC licence (B Double), and

b. 10 hold a HC licence (single) only,

9. Over those 12 months, approximately 129K hours were driven from the Tongala depot.

10.Of those hours, about 90% were B double hours and the balance single hours.

11.Apart from 1 driver, who holds a B double licence, but only drives a single because of access requirements to the farms, all other MC licence holders spend some time in a single.” 6

[11] When McColl’s advertises for a new driver it does so with an open call, not differentiating between the Agreement’s classifications. In this regard it publishes “a generic job advertisement for a ‘professional driver’ and it simply seeks, amongst other skills and experience, that an MC license is preferred”. 7 An MC, or multi-combination, license holder may drive a B-Double, whereas an HC licence holder, or heavy combination licence, may not, and under this Agreement would be restricted to single-articulated vehicles.8

[12] Once engaged the driver will have their employment confirmed through a generic employment contract. 9 While distinguishing between engagement as a local interstate driver and employment either as a full-time employee or a casual employee, the generic contract does not set out the classification under which the person would be employed.

[13] The circumstances of McColl’s operations include that it is required to take different size trucks over country roads at all hours of the day. Not only does it have to contend with managing the different needs of its vehicle fleet, it also must manage the fact that different drivers have different types of licence. It also of course needs to contend with the fact that some vehicles may not be suitable for particular routes. These factors require it to make constant change to its operations.

[14] The level of constant change was related in the witness statement from a McColl’s employee, Peter Greenway, filed on behalf of the TWU. After setting out that he held an MC license which permits him to drive a B-Double and that he has been employed by McColl’s since around 2000, he stated he has never been advised by McColl’s of his classification rate under the Agreement. Mr Greenway gave this evidence indicating that his driving requirements may change on a daily basis:

“11. On any given work day I do not know if I will be driving a single or B-Double.

12. When I arrive at work I am allocated a truck to drive.

13. I understand that if I drive a single I will be paid the TWG6 classification rate, if I drive a 8-Double I will be paid at the TWG8 rate of pay.

14.The majority of my work is driving B-Doubles.

15. However I do on occasion drive a single and am paid at the TWG6 classification rate for that work.

16. When I take leave, whether annual or personal or long service leave etc, the leave is calculated at TWG8 hourly rate.” 10

[15] What may be summarised from the material before the Commission is that McColl’s practice is to engage a driver under the Agreement and to take the view that the contract of employment they have with the driver is either for a full-time or casual employment basis as well as making a distinction between whether the person was employed for long-distance or local driving. In the case of the person holding an HC licence allowing them to drive a single vehicle only they would only ever be paid at Transport Worker Grade 6 since they are, because of the licence they hold, ineligible to be paid at Transport Worker Grade 8. On the other hand, since the overwhelming majority of employees engaged under the Agreement hold an MC license, entitling them to drive a B-Double as well as a single vehicle, McColl’s takes the view those employees may be required to undertake duties associated with either of the classifications in the Agreement. If they work in only one of the classifications for the day they will be paid in accordance with the relevant rate, which may be either Grade 6 or Grade 8. If they “drive both a single and a B double on the same day, then the employee will be paid at the Grade 8 rate for that whole day”. 11

[16] The TWU’s construction of the Agreement is that an employee is assigned a classification at the time of employment which remains with them for the duration of their employment. The TWU advances a construction that “once classified the employee maintains that classification unless it is altered pursuant to the Agreement or the Award”; further “a dispute about whether the employee is appropriately classified then this could be determined by the Commission in the normal manner”. 12 The TWU submits that the Commission is not being asked to conduct a classification exercise, but rather whether at commencement of employment an employee must be advised of that classification.13 It draws upon the annual leave provision within the Agreement which it says makes it plain that employees have something which is “their classification”, personally held by the employee. Rather than annual leave being paid in accordance with a formula associated with the hours worked by the employee in each classification, the TWU submits that “[a]nnual leave is paid at the base hourly rate of their classification rate, not rates”.14

[17] The clause, so far as is relevant, provides as follows:

“4.1 ANNUAL LEAVE

Employees are entitled to twenty (20) days annual leave per calendar year. All Employees are paid the base hourly rate for their classification (classification of where majority of hours are worked in the calendar year) while on annual leave at thirty eight (38) hours per week.”(remainder of clause omitted; underlining added)

[18] The TWU also submits that account should be taken of the provisions of the Agreement’s Appendix 1 dealing with classifications and wage rates which refers in both classifications to “Employees appointed to this grade”. It submits that it is instructive that the reference of appointment “to this grade” is singular, and not to grades plural. Consequently, it submitted “the use of “appointed” in this context is to declare, to make known, that the employee is appointed to TWG6 or TWG8. That is that it is announced that the employee is classified TWG6 or TWG8”. 15

[19] The TWU also draws upon the fact that the Road Transport Award 2010 does not cover an employee when they undertake long distance driving, suggesting that the fact there is no such carve-out in the Agreement means a long distance driver is classified in accordance with their license, rather than their work; “… whilst undertaking long distance operations a driver is not covered by the RTDA 2010. There is no such call out in the Agreement vis-à-vis Grade 6 and Grade 8”. 16 The union also relies for the purposes of support for its construction upon the provisions of the Clerks Private Sector Award:

“The operation of clause 4.8 (which is also contained in the LDA 2010 means that an employee is covered by the Award classification most appropriate to the work performed by the employee. Again, the reference is to classification, not classifications as the Respondent would likely prefer to have it.” 17

[20] The TWU also draws upon considerations in the recent award modernisation processes:

“36. On Friday, 14 February 2020 the Fair Work Commission issued determinations [2020] FWCFB 690 pursuant to the 2014 four year review, in regard to the Road Transport and Distribution Award and the Road Transport (Long Distance Operations) Award. The terms of these awards will come into operation on 4 May 2020. Both awards will be varied as follows:

At the time of engagement the employer will inform each employee of their terms of engagement. (Clause 8.2 in the LD Award); and

At the time of engagement, an employer will inform each employee of the terms of their engagement and, in particular, whether they are to be full-time, part-time or casual. This decision will then be recorded in a time and wages record. (Clause 8.2 in the RTD Award)

37. The terms of engagement will include the start date, job position, classification, pay, hours of work and other entitlements. Clearly the Commission in making the two awards intends that employees are advised of their correct classification.” 18

[21] Finally, the TWU notes the provisions of the Act, dealing with the interaction between the terms of an award and potentially inconsistent agreement provisions. After noting the operation of s.57, which provides that an award does not apply to an employee if an enterprise agreement applies, it notes that such restriction is limited because of s.206. It argued that:

“38. The proper operation of the Fair Work Act rests upon employees being correctly advised of their classification. Section 57 of the FW Act provides that:

57 Interaction between modern awards and enterprise agreements

(1) A modern award does not apply to an employee in relation to particular employment at a time when an enterprise agreement applies to the employee in relation to that employment.

(2) If a modern award does not apply to an employee in relation to particular employment because of subsection (1), the award does not apply to an employer, or an employee organisation, in relation to the employee.

41. However, section 206 provides a limited exception to the general rule about the interaction between modern awards and enterprise agreements, as set out in s.57. [(Ferrymen Pty Ltd v The Maritime Union of Australia) [2013] FWCFB 8025 @ ¶16]. Section 206 provides that the base rate of pay under an enterprise agreement must not be less than the modern award rate.

42. The Fair Work Commission itself oversees observance of s206 via the employer's statutory declaration in support of an application for approval of an enterprise agreement (the Form F17). Specifically question 3.2 requests:

Are any of the employee classifications in the agreement different from the classifications in any of the modern award(s) listed in your answer to question 3.1?

43. The FW Act’s stringent measures to ensure employees are paid at least the correct minimum award rate would be would be undermined if an employee was not advised by their employer of their classification.” 19 (numbering of clauses in s.57 amended; consequently paragraphs 39 and 40 not used)

[22] McColl’s disputes the TWU’s reasoning and preferred construction and relies upon several matters for doing so.

[23] It argues that there have been at least 6 occasions over the last decade in which the TWU has raised the same subject with those occasions ranging between November 2010 and October 2019. It also points to other occasions on which the subject has been a matter of the dispute notification for the Commission but which has not been taken to conclusion. 20 A consequence of the TWU claim flowing from the fact that 68 of its drivers hold an MC licence, compared with 10 who do not, would be that the company would lose control of its classification discretion:

“17. If the company engaged a driver who happened to hold an MC licence to drive a single, because that is the only vehicle fit for the task at hand, then under the TWU's claim such a driver would have to be paid at the higher Grade 8 level.

18. To take that logic a step further, the TWU would submit that a driver with an MC licence, driving a small rigid - again the only vehicle fit for the task - would still have to be paid as a Grade 8. This is nonsensical.” 21

[24] The Road Transport Award 2010 and its predecessors have consistently provided for employees to be paid only “the minimum wage of the highest classification of work performed on any one day and for the whole of that day”. 22 This leads to two conclusions:

“24. So, an employee driving a single for 2 hours and who then drives a B Double for the rest of the day will be paid at the higher Grade 8 rate for all of that day.

25. If a driver, with an MC licence, is required to drive a single for a day then such driver should be paid at the Grade 6 rate as the skill in driving a single is less than that associated with driving a B double - he does not need those extra skills on that day and should not be remunerated for simply possessing, but not applying, those additional skills and qualifications by holding an MC licence.” 23

[25] The Respondent also submits, extraneously, that the “road transport industry has always calculated its charging rates to customers on a model that involves fixed costs, variable costs and labour costs”. 24

[26] While a requirement to notify part-time employees of their classification exists under the Road Transport Award 2010 none exists for a full-time employee, with it being the case that “it is abundantly clear that a provision in one specific part of the award dealing with part-time employment cannot be read into a separate clause applying to full-time employment.” 25

[27] McColl’s also submitted that account should be taken of the fact that the Fair Work Regulations do not require an employee’s classification level to be disclosed on their payslip, drawing the inference that they would do so if the TWU’s submissions that an employee must be informed of their classification is correct. 26

[28] It also submitted that the Agreement is not a “closed agreement” in the sense that all conditions of employment are drawn entirely from the Agreement. Instead, common to many road transport agreements, “anything not covered in the Agreement reverts to the terms of the applicable Award”. 27 The company’s generic contract of employment confirms this, through its reference to employment either as a local or interstate driver, and without reference to a classification as such. The proposition that the Agreement is not “closed” in turn leads to a consideration of clause 19 of the Road Transport Award 2010, dealing with the matter of higher duties, which provides this:

“19. Higher duties

Where an employee is required to perform two or more grades of work on any one day the employee is to be paid the minimum wage for the highest grade for the whole day.” 28

[29] It is argued that:

“44. This means that the Clause 19 - Higher Duties - has a direct and meaningful application in the day to day operation of the Agreement, particularly where the same employee drives both a single and B double on the same day.

45. So that, should an employee drive both a single and a B double on the same day, then the employee will be paid at the Grade 8 rate for that whole day.” 29

[30] Finally, McColl’s submit that account must be taken of the annual leave provisions in the Agreement’s clause 4.1 but drawing a different conclusion to the TWU. While the provision provides a situational entitlement to payment for the leave, providing that payment is at the base hourly rate for the employee’s classification, being the “classification of where majority of hours are worked in the calendar year”, the “clause would be meaningless if the TWU's submissions are accepted because every employee would then be paid annual leave at the rate of a specific classification advised to them at the time of their engagement, irrespective of the vehicle driven over that year”. 30

RELEVANT PRINCIPLES FOR DETERMINATION OF THE DISPUTE

[31] In dealing with a dispute such as this the Commission is not undertaking an exercise of judicial power but is instead exercising a power of private arbitration, with that power deriving from the parties’ agreement to submit their differences for decision by a third party. The resultant arbitrator’s award is not binding of its own force but instead its effect depends on the law which operates with respect to it. 31 It is accepted that while not exercising judicial power, the Commission “may legitimately form and act upon opinions about legal rights and obligations as a step in the exercise of its own functions and powers”.32

[32] The Commission is required to examine whether an enterprise agreement’s dispute settlement procedure “requires or allows” the Commission to deal with the dispute. In order to do so, it is necessary to look at the text of the dispute settlement procedure, understood in light of its industrial context and purpose, to determine whether the dispute, properly characterised, falls within it. 33 The scope of a dispute settlement procedure in an enterprise agreement should not be narrowly construed; “to do so would be contrary to the notion that certified agreements are intended to facilitate the harmonious working relationship of the parties during the operation of the agreement.”34

[33] In characterising the nature of a dispute the Commission is not confined to the application filed to deal with the dispute. 35 The entire factual background is relevant, and may be ascertained from the submissions advanced by the parties on the question of jurisdiction.36 Further, a dispute may evolve during proceedings in the Commission. It may therefore be necessary in some cases when ascertaining the character of a dispute to have regard to both the nature of the dispute alleged in an originating application and the factual circumstances as they evolve.37 The character of the dispute is distinguishable from any relief which may be sought, or granted, following an arbitration of the dispute.38 However, the relief sought may cast light on the true nature of the dispute in some cases.39

[34] If the Commission has jurisdiction to deal with the dispute, the nature of the relief that the Commission may grant will depend on the limitation in s.739(5) 40 and the agreement of the parties as recorded in their enterprise agreement, provided that such relief is reasonably incidental to the application of the enterprise agreement to which the dispute relates.41

[35] Interpretation of an enterprise agreement requires construction of the words of the instrument, with the Full Bench in Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union’ known as the Australian Manufacturing Workers Union (AMWU) v Berri Pty Limited 42 (Berri) setting out the principles for such a task. In that matter, and after an extensive analysis of the subject, the Full Bench summarised the principles to be applied in the following way:

“[114] The principles relevant to the task of construing a single enterprise agreement may be summarised as follows:

1. The construction of an enterprise agreement, like that of a statute or contract, begins with a consideration of the ordinary meaning of the relevant words. The resolution of a disputed construction of an agreement will turn on the language of the agreement having regard to its context and purpose. Context might appear from:

(i) the text of the agreement viewed as a whole;

(ii) the disputed provision’s place and arrangement in the agreement;

(iii) the legislative context under which the agreement was made and in which it operates.

2. The task of interpreting an agreement does not involve rewriting the agreement to achieve what might be regarded as a fair or just outcome. The task is always one of interpreting the agreement produced by parties.

3. The common intention of the parties is sought to be identified objectively, that is by reference to that which a reasonable person would understand by the language the parties have used to express their agreement, without regard to the subjective intentions or expectations of the parties.

4. The fact that the instrument being construed is an enterprise agreement made pursuant to Part 2-4 of the FW Act is itself an important contextual consideration. It may be inferred that such agreements are intended to establish binding obligations.

5. The FW Act does not speak in terms of the ‘parties’ to enterprise agreements made pursuant to Part 2-4 agreements, rather it refers to the persons and organisations who are ‘covered by’ such agreements. Relevantly s.172(2)(a) provides that an employer may make an enterprise agreement ‘with the employees who are employed at the time the agreement is made and who will be covered by the agreement’. Section 182(1) provides that an agreement is ‘made’ if the employees to be covered by the agreement ‘have been asked to approve the agreement and a majority of those employees who cast a valid vote approve the agreement’. This is so because an enterprise agreement is ‘made’ when a majority of the employees asked to approve the agreement cast a valid vote to approve the agreement.

6. Enterprise agreements are not instruments to which the Acts Interpretation Act 1901 (Cth) applies, however the modes of textual analysis developed in the general law may assist in the interpretation of enterprise agreements. An overly technical approach to interpretation should be avoided and consequently some general principles of statutory construction may have less force in the context of construing an enterprise agreement.

7. In construing an enterprise agreement it is first necessary to determine whether an agreement has a plain meaning or it is ambiguous or susceptible of more than one meaning.

8. Regard may be had to evidence of surrounding circumstances to assist in determining whether an ambiguity exists.

9. If the agreement has a plain meaning, evidence of the surrounding circumstances will not be admitted to contradict the plain language of the agreement.

10. If the language of the agreement is ambiguous or susceptible of more than one meaning then evidence of the surrounding circumstance will be admissible to aide the interpretation of the agreement.

11. The admissibility of evidence of the surrounding circumstances is limited to evidence tending to establish objective background facts which were known to both parties which inform and the subject matter of the agreement. Evidence of such objective facts is to be distinguished from evidence of the subjective intentions of the parties, such as statements and actions of the parties which are reflective of their actual intentions and expectations.

12. Evidence of objective background facts will include:

(i) evidence of prior negotiations to the extent that the negotiations tend to establish objective background facts known to all parties and the subject matter of the agreement;

(ii) notorious facts of which knowledge is to be presumed; and

(iii) evidence of matters in common contemplation and constituting a common assumption.

13. The diversity of interests involved in the negotiation and making of enterprise agreements (see point 4 above) warrants the adoption of a cautious approach to the admission and reliance upon the evidence of prior negotiations and the positions advanced during the negotiation process. Evidence as to what the employees covered by the agreement were told (either during the course of the negotiations or pursuant to s.180(5) of the FW Act) may be of more assistance than evidence of the bargaining positions taken by the employer or a bargaining representative during the negotiation of the agreement.

14. Admissible extrinsic material may be used to aid the interpretation of a provision in an enterprise agreement with a disputed meaning, but it cannot be used to disregard or rewrite the provision in order to give effect to an externally derived conception of what the parties’ intention or purpose was.

15. In the industrial context it has been accepted that, in some circumstances, subsequent conduct may be relevant to the interpretation of an industrial instrument. But such post-agreement conduct must be such as to show that there has been a meeting of minds, a consensus. Post-agreement conduct which amounts to little more than the absence of a complaint or common inadvertence is insufficient to establish a common understanding.” 43

[36] The application of these principles, and especially to those in which ambiguity may be considered was further considered by the Full Bench in United Firefighters Union of Australia v Emergency Services Telecommunications Authority:

“[35] As stipulated in Berri, the starting point for interpreting an enterprise agreement is to have regard to the ordinary meaning of the words used. Further, the text must be interpreted in the context of the agreement as a whole. Principles 7 and 10 elicited in Berri emphasise that ambiguity in a provision within an enterprise agreement must be identified before one is to have regard to evidence of the surrounding circumstances. However, principle 8 makes it clear that, in determining whether ambiguity exists, one may have regard to evidence of the surrounding circumstances. That is, such evidence can be used to identify and resolve any ambiguity.” 44

CONSIDERATION

[37] At a practical level the contentions put forward by the TWU are twofold; McColl’s should notify each employee of the classification under which they are employed when they commence employment and that classification remains with the employee for the duration of their employment. The consequence of this would be that a person classified as Grade 8 could not be paid less than the wage rate for that position even when performing lower duties; and a person classified at Grade 6 could not perform higher duties without a temporary uplift in their pay.

[38] In forming the construction of the Agreement, it is to be noted that it contains only the two classifications referred to above. There is no specific provision to the effect that McColl’s must notify an employee or prospective employee of their classification.

[39] Examination of each of the 2010 Awards and their more recent 2020 versions shows a larger scheme of classifications, obviously intended to cover a broad range of work throughout a large industry. From these industry schemes, it could be said, the Agreement has taken and amended the two classifications relevant to it and added and adapted them to their needs. At first glance, the Agreement’s classifications are extracted from the 2010 Award provisions and what is extracted appears similar; however, there are what could be regarded as significant differences.

[40] There is no higher duties provision in the Agreement, however, the Agreement operates in tandem with the Awards referred, each of which include higher duties clauses. 45

[41] The Awards provide for three types of employment – full-time, part-time or casual. Clause 12.2 of the Road Transport Award 2010 requires this about notification of employees “terms of engagement”:

“12.2 At the time of engagement, an employer will inform each employee of the terms of their engagement and in particular whether or not they are to be full-time, part-time or casual. Such decision will then be recorded in a time and wages record.” 46

[42] Clause 12.3 of the Road Transport Award 2010 deals with full-time employment but does not make any reference to the employee’s classification. 47 Clause 12.4 deals with the subject of part-time employment. The clause includes an obligation to agree upon “the classification applying to the work performed”.48

[43] Clause 12.5 of the Road Transport Award 2010 provides for the employment of casual employees and requires an employee to be paid an hourly rate according to “their classification”. 49

[44] Each of the Awards deal with the subject of employee classifications and minimum wage rates for each classification, however do not specifically address the subjects in dispute in this matter. 50 In particular they make no reference to employees being notified of their classification or what should occur in the eventuality of a person temporally working at a lower grade than usual. The Awards though do deal with the subject of higher duties (clause 19 of the Road Transport Award 2010 is set out above).

[45] The Awards include descriptors for each classification. 51

[46] The Agreement includes a clause entitled “contract of employment” which appears to deal with general expectations of both parties and, with one exception does not particularly deal with the matter of a person’s assignment to a particular classification of the duties within the classification. The clause is in the following terms, and the exception referred to is the provision within clause 2.2.8 to the effect that employees may be rotated by agreement “between roles and divisions as part of the training and development process”:

“2.2 CONTRACT OF EMPLOYMENT

The following terms of employment apply under this agreement:

2.2.1 The Company requires its Employees to perform their primary roles and any other tasks necessary in the course of meeting its customers' needs.

2.2.2 The Company will never ask an Employee to do something that the Employee is not trained to do safely.

2.2.3 The Company will never ask an Employee to do something that is unsafe or illegal.

2.2.4 The Company expects the Employees to learn new skills in order to increase their capabilities.

2.2.5 The Employees expect that the Company will make training and development opportunities available where reasonable.

2.2.6 The Employees agree to work within the Company's policies.

2.2.7 The Company may deploy Employees within and between sites to meet the tasks at hand within reason and agreement with the Employee.

2.2.8 The Company may rotate Employees between roles and divisions as part of the training and development process by agreement.

2.2.9 If, after consultation, the company decides to engage supplementary labour, the company will take all necessary steps to ensure that all company drivers and equipment are fully utilized prior to the engagement of supplementary labour.”

[47] Whereas the Agreement includes provisions dealing with the employment of full-time and casual employees the terms are not comprehensive. The Agreement’s provisions are as follows:

“2.3 EMPLOYMENT

Employment is by the week, except for casuals who are employed by the hour.

2.3.1 Full-time Employment

Full-time Employees are engaged to work a minimum of thirty-eight (38) ordinary hours per week.

All Employees are expected to make themselves generally available to work overtime in accordance with normal practices of the depot.

2.3.2 Casual Employment

Casual Employees are engaged on an hourly basis and are notified in writing of their casual status.

For work performed, casual Employees are paid an hourly rate of 1/38th of the ordinary weekly rate, plus a loading as outlined in Appendix 1.

Casual Employees must be rostered for a minimum callout (or payment) of four (4) consecutive hours on each day required to be worked or as per the minimum engagement definition.

A casual Employee must be notified by the end of the day if their services are not required the next working day or be paid for a minimum engagement (four hours) for the next working day.” (clauses 2.3.3 (Seasonal Employment) and 2.3.4 (Labour Hire) are omitted)

[48] In the context of an enterprise agreement which states specifically that “anything not covered in this document reverts to the terms of the award” the full-time and casual employee prescriptions need to be seen as likely dealing only with the subject matters within them. It would then follow that matters which are not dealt with in the Agreement are then captured by the provisions dealing with the operation of the Award with it then being the case that the specific award provision operates as well.

[49] The same needs to be said for the operation of clause 2.4 (New Employees) in the terms set out below, which largely goes to the process of a person becoming a new employee of McColl’s:

“2.4 NEW EMPLOYEES

2.4.1 Joining

When New Employees join the Company:

2.4.1.1 During the Probationary Period, the Company can terminate their employment with one (1) weeks' notice or payment in lieu of notice.

2.4.1.2 ~II Employees must go through a medical, hearing test, D&A test and police check before starting work as directed at the Company's expense. Should an employee require further ongoing medical testing for non-work related conditions it will be at the employee's expense.

2.4.1.3 All Employees are issued with an introductory set of Company

uniforms.

2.4.1.4 All Employees are given required induction training so that they can perform their roles safely, compliantly and productively.

2.4.1.5 This induction t raining will include the provision of a TWU prepared and supplied starter pack which will provide information on t he agreement, TWU delegates and duties.

2.4.1.6 New employees will be provided a copy of this Agreement and the Fair Work Information Statement.

2.4.2 Leaving

If the Employee voluntarily leaves the Company within the Probationary Period, the following items will be deducted from the Employee's final pay:

2.4.2.1 The full cost of medical and police checks.

2.4.2.2 50% of the uniform cost.

2.4.2.3 Any training costs incurred by the Company.

When any Employee leaves the Company, he/she must return the drivers' manual, access cards, keys and any other Company property prior to the payment of any entitlements.”

[50] Both parties reference the operation of the Agreement’s annual leave clause, in the manner summarised above, as being relevant to their preferred construction. Clause 4.1 of the Agreement, set out above, provides for annual leave payments to be individually calculated with employees being paid according to the classification in which they worked the majority of hours that calendar year.

[51] The provision, or something similar to it, does not feature in either Award. The Long Distance Awards provide for payment on the basis of an employee’s “applicable minimum weekly rate” with a further loading payable. 52 While the rate of payment for annual leave is not specified in the Road Transport Award 2010, annual leave under that Award is paid in the manner set out in s.90, which provides:

“90 Payment for annual leave

(1) If, in accordance with this Division, an employee takes a period of paid annual leave, the employer must pay the employee at the employee’s base rate of pay for the employee’s ordinary hours of work in the period.” (s.90(2) omitted)

[52] The Road Transport Awards also include a provision for the calculation of annual leave loading, referable to the employee’s “minimum wage rate”. 53

[53] Both the Agreement and the Awards may be regarded as ambiguous on the subjects of appointment of employees to an ongoing classification and movement between classifications. Despite the submissions of the TWU about the modern award provision that at the time of engagement the employer will inform each employee of the terms of their engagement, the provision is a long standing one, featuring in the Awards as first made on 1 January 2010 54 and there is no material before me about the meaning of the phrase. Rather than resolving any ambiguity, the phrase to which the union points is itself susceptible of more than one meaning. It is not clear what is meant by “an employer will inform each employee of the terms of their engagement”. The fact that the Long Distance Awards see a need to run the phrase on by specifying that the information will be “in particular, whether they are to be full-time, part-time or casual” does not assist with clarity. Is the requirement satisfied if only details of full-time, part-time or casual are provided? Is it satisfied if, in the case of a casual employee they are notified only of their employment status and the expected duration of their employment? It is also the case that there is no extrinsic material before me capable of being relied upon for resolution of the disputed meaning of the Agreement. It falls then to determine the construction of the Agreement by consideration of the plain and ordinary meaning of its terms.

[54] In support of the proposition that employees must be advised of their classification grade and of any changes is the language of the Road Transport Award 2010 in clause 12.1 requiring an employee to be informed “of the terms of their engagement” with those terms to be recorded in a “time and wages record”. 55 While the Regulations deal with the content of a time and wages record, and require it to be recorded whether the employee is full-time or part-time and whether employment is permanent, temporary or casual (r.3.32), there is no requirement to record an employee’s classification. Clause 12 of the Road Transport Award 2010 also requires, for a part-time employee only, for there to be agreement before employment commences on “the classification applying to the work to be performed” (clause 12.4(b)(ii)). There is no similar provision in that Award for full-time or casual employees.

[55] Also in support of the TWU’s arguments are the provisions of the Awards’ Higher Duties clauses if they are to be taken as a provision which builds wages for higher work performed upon a predetermined “base” classification. The Road Transport Award 2010’s annual leave provisions, operating as they do in conjunction with the National Employment Standards, would also lend support to the proposition that an employee under that Award has a base classification, and that classifications are not fixed daily according to the work performed on that day.

[56] Against these indicators are the matters referred to by McColl’s. The Agreement is silent on the matter of notification of classification. There is a long history of claims on the subject, and in the face of those claims the Agreement has been drafted only in the way that it is; that is, the parties have not chosen to unambiguously confirm that employees have a fixed classification.

[57] The Agreement’s Appendix 1 (Classifications & Wage Rates) differs from the corresponding Award provisions in two important respects. First is the preamble, that “Employees are classified and paid according to the following” and that each classification commences with the words “Employees appointed to this grade can be required to perform any of the following functions for which they have been trained”. Second, is the fact that each descriptor is different from that within the Award. At one level those differences include the omission of duties probably unimportant to McColl’s. More significantly, the differences are about the duties to be performed. Side-by-side, the following is apparent (referencing only the Agreement indicated duties):

TRANSPORT WORKER GRADE 6
Road Transport Award 2010	Long Distance Award 2010	Agreement
Driver of a rigid vehicle and a heavy trailer combination with more than three axles and a GCM greater than 22.4 tonnes up to and including 53.4 tonnes	Driver of rigid vehicle and heavy trailer combination with GCM over 22.4 tonnes but not more than 42.5 tonnes.	Driver of a rigid vehicle and heavy trailer combination with more than 3 axles and a GCM greater than 22.4 tonnes- capacity up to 22 tonnes.
Driver of an articulated vehicle with more than three axles and a GCM greater than 22.4 tonnes	Driver of articulated vehicle with GCM over 22.4 tonnes.	Driver of a articulated vehicle with more than three-axle and a GCM greater than 22.4 tonnes- capacity over 22 tonnes.
Tanker Washer in the washbay area.

TRANSPORT WORKER GRADE 8
Road Transport Award 2010	Long Distance Award 2010	Agreement
Driver of a rigid vehicle and trailer(s) or double articulated vehicle exceeding 53.4 tonnes GCM including B—Doubles	Driver of rigid vehicle and trailer(s) or double articulated vehicle with GCM over 53.4 tonnes (includes B-doubles).	Driver of a rigid vehicle and trailer(s) of double articulated vehicle exceeding 53.4 tonnes gross combination mass (GCM) including b'doubles.

[58] The differences in language between the instruments for a Grade 8 employee are subtle but potentially important.

[59] Whereas the comparable Grade 8 descriptors in each Award provide that the classification is applicable to the driving of a rigid vehicle and trailer(s) OR double articulated vehicle exceeding 53.4 tonnes GCM, defined to include B-Doubles, the Agreement seemingly changes a reference to an alternative to a conjunction: Driver of a rigid vehicle and trailer(s) OF double articulated vehicle exceeding 53.4 tonnes gross combination mass (GCM) including B-Doubles. It may be argued that this is a simple drafting error, with the word “of” being used instead of “or”, however that seems unlikely given the way in which McColl’s has employed its drivers, apparently for some time. The manner in which McColl’s argued its case was to put forward that employees driving B-Doubles are classified and paid at Grade 8 and those who do not are paid at Grade 6.

[60] The differences in the language employed of the duties suggest a possible different intention for the scheme of classifications under the Agreement than the Awards, with the primary distinction being whether or not a B-Double is driven. That scheme is fundamentally different from that within the Awards, which is of cumulatively greater responsibility, mainly, but not always, according to the vehicle’s gross combination mass. However, it is also necessary to take into account the preface to each classification which provides for an appointment of an employee to “this grade”.

[61] Despite the evident ambiguities, the Higher Duties clauses in the Awards are unambiguously applicable to McColl’s employees. 56 There is no comparable clause in the Agreement, and the Award provisions continue to operate for McColl employees for reason of the provision in the Agreement’s clause 1.4, that “Anything not covered in this document reverts to the terms of the award”.

[62] The importance of the Higher Duties clauses is that each requires payment of an employee at the highest grade for the whole day if they are required to perform two or more grades of work on any one day. Under these clauses an employee does not receive additional pay if they work on higher duties for a week or a month or some other longer qualifying period; instead the assessment is for every day of work. These are provisions which are instructive as to how the Agreement (and its reversion to the Awards for terms not dealt within it) is intended to operate.

[63] The overall scheme of the Agreement and the Awards suggests that an employee is employed and entitled to the benefit of the instruments as applicable in their actual case, but that there is no obligation in the Agreement for them to be contracted into a particular classification.

[64] They are assigned duties consistent with two things: their drivers’ licence and McColl’s operational needs. In the environment about which McColl’s provided evidence, with a large number of B-Double vehicles and 90% of hours worked on those vehicles compared with single articulated vehicles, 57 a driver with the requisite MC licence would most normally be required to drive B-Doubles and would be paid at the Grade 8 rate.

[65] However, on those occasions when the work roster or route did not require assignment of a particular employee to a B-Double, the employee would be assigned to a lower classification vehicle and paid at the Grade 6 rate. When an employee came to take annual leave, the specific provisions of the Agreement’s clause 4.1 would apply, and in particular they would be “paid the base hourly rate for their classification (classification of where majority of hours are worked in the calendar year)”. There would be no need for such a provision, of individual calculation of leave payments, if employees were assigned to a classification at the start of their employment and never moved from that classification. The stipulation that employees will be paid for their annual leave according to the “classification of where majority of hours are worked in the calendar year” logically means the drafters of the Agreement intended that employees may spend their time working under different classifications. The provision is not inconsistent with anything in the Awards, which in any case are to be interpreted in conjunction with the provisions in the National Employment Standards. Whereas the Long Distance Award routinely provides for a 30% loading upon the taking of annual leave 58, the Road Transport Award does not, drawing the minimum annual payment for annual leave entirely from s.90 which provides the employee is entitled to be paid at their “base rate of pay for the employee’s ordinary hours of work”. The term “base rate of pay” is in turn defined in s.16(1) as “the rate of pay for his or her ordinary hours of work” excluding certain amounts.

[66] The consequence of these matters is to accept that there is neither an obligation under the Agreement to advise employees of their classification when they commence employment, or afterward, and no restriction on paying employees at a lower classification grade when the work undertaken permits that.

[67] This is no doubt an unusual situation, stemming as it does from the Agreement’s provisions. The situation though is not dissimilar with the arrangement under the two Awards when the particular work undertaken may cause an employee to shift their employment temporarily at least, or perhaps longer, from the Road Transport Award to the Long Distance Award and vice versa. The scope of the Road Transport Award is explicit in stating that it “does not cover employers and employees covered by the … Road Transport (Long Distance Operations) Award 2010 whilst undertaking long distance operations”, 59 with long distance operations defined to mean “any interstate operation, or any return journey where the distance travelled exceeds 500 kilometres and the operation involves a vehicle moving livestock or materials whether in a raw or manufactured state from a principal point of commencement to a principal point of destination …”.60 The Long Distance Award 2010 amplifies the likelihood of shifting coverage; although an employee may have coverage under one award for their predominant duties, there will not be exclusive coverage:

“4.2 The award does not cover an employee while they are temporarily required by their employer to perform driving duties which are not on a long distance operation, provided the employee is covered by the Road Transport and Distribution Award 2010 while performing such duties.” 61

[68] Plainly, such a coverage clause would mean that an employee’s entire award rights and obligations may shift according to the work they perform from time to time. An employee who travels 499 kilometres and meets the other conditions of the coverage clause is covered by one award with one set of payment entitlements and obligations; when the same employee travels 501 kilometres he or she will be covered by another, with a very different set of payment entitlements and obligations.

[69] In some respects the concluded construction of the Agreement enables a not dissimilar arrangement, depending not upon the distance they have travelled, but upon the vehicle they have driven.

[70] As a result of these considerations, it follows that the first of the questions put forward by the TWU should be answered in the negative and the second in the affirmative.

CONCLUSION

[71] On the basis of the foregoing, the Questions for Determination proposed by the TWU are answered in the following manner:

Q1: Under the McColl’s Transport Group Holdings Pty Ltd Northern Farm Milk Collective Agreement 2017 – 2019 must the employer advise employees of their classification grade and of any changes to their classification grade according to the work the employee performs?

A1: NO.

Q2: Under the McColl’s Transport Group Holdings Pty Ltd Northern Farm Milk Collective Agreement 2017 – 2019 can the employer reduce the classification grade of an employee when the employee performs work classified at a lower grade?

A2: YES.

[72] The dispute is determined accordingly.

COMMISSIONER

Appearances:

Mr J. Cooney and Mr D. Coghill for the Applicant

Mr P. Ryan of theVictorian Transport Association for the Respondent

Hearing details:

2020.
Melbourne (via telephone);
29 April.

Printed by authority of the Commonwealth Government Printer

<PR720442>

 1   AE423661.

 2   Exhibit A1, Applicant’s Outline of Submissions, 21 February 2020, [16].

 3   MA000038.

 4   MA000039.

 5 Exhibit A1, [11] – [14].

 6   Exhibit R2, Witness Statement of Roger Robilliard, 7 April 2020, [8] – [11].

 7   Exhibit R1, Respondent's Outline of Submissions, 8 April 2020, [43] and Attachment 4.

 8   Ibid, [3].

 9   Ibid, [41].

 10   Exhibit A2, Witness Statement of Peter Greenway, 21 February 2020, [11] – [16].

 11   Ibid, [43].

 12 Exhibit A1, [20] – [21].

 13   Ibid, [23].

 14   Ibid, [25].

 15   Ibid, [28].

 16   Ibid, [33].

 17   Ibid, [31].

 18 Ibid, [36] – [37].

 19   Ibid, [38]; [41] – [43].

 20 Exhibit R1, [6] – [10].

 21 Ibid, [17] – [18].

 22   Ibid, [23].

 23 Ibid, [24] – [25].

 24   Ibid, [26].

 25 Ibid, [35]; ]33] – [34].

 26   Ibid, [36]; see FW Regulations, rr.3.33 – 3.45.

 27 Ibid, [38] – [41].

 28   The same provision is in the Road Transport Award 2020 (see Clause 17.4); Long Distance Award 2010 (see Clause 16.7) and the Long Distance Award 2020 (see Clause 16.7).

 29 Exhibit R1, [44] – [45].

 30   Ibid, [48].

 31   Construction, Forestry, Mining and Energy Union v The Australian Industrial Relations Commission [2001] HCA 16; (2001) 203 CLR 645 [30]–[32]; cited in Endeavour Energy v Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia [2016] FCAFC 82 at [25].

 32   Construction, Forestry, Mining and Energy Union v Wagstaff Piling Pty Ltd [2012] FCAFC 87 [21], cited in Kentz (Australia) Pty Ltd v Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia[2016] FWCFB 2019 [52].

 33   CEPU v Thiess Pty Ltd (2011) 212 IR 327 at [42], [47]; CFMEU v AIRC [2001] HCA 16.

 34   SDA v Big W Discount Department Stores PR924554 at [23].

 35   AMWU v Holden Limited PR940366 at [47]; MUA v ASP Shipping Management Pty Ltd[2015] FWC 4523 at [23].

 36 Ibid [47].

 37   MUA v ASP Shipping Management Pty Ltd[2015] FWC 4523 at [19], [23]; R v Bain; Ex parte Cadbury Schweppes Australia Ltd (1984) 159 163 at 168; United Firefighters’ Union v Metropolitan Fire and Emergency Services Board PR973884.

 38   MUA v Australian Plant Services Pty Ltd PR908236; MUA v ASP Shipping Management Pty Ltd[2015] FWC 4523 at [21]-[22].

 39   United Firefighters’ Union v Metropolitan Fire and Emergency Services Board PR973884 at [20].

 40 The Commission must not make a decision that is inconsistent with the FW Act, or a fair work instrument that applies to the parties.

 41   MUA v Australian Plant Services Pty Ltd PR908236 at [63]; Seven Network (Operations) Ltd v CPSU (2003) 122 IR 97 at [31]-[32].

 42   [2017] FWCFB 3005.

 43   Ibid, [114].

 44   [2017] FWCFB 4537.

 45   See Road Transport Award 2010, Clause. 19; Road Transport Award 2020, Clause 17.4; Long Distance Award 2010, Clause 17; and the Long Distance Award 2020, Clause 16.7.

 46   The corresponding term in the Road Transport Award 2020 is Clause 8.2. The provision in the Long Distance Award 2010 is similar, although it omits the words after “engagement” (Clause 8.2); see also the Long Distance Award 2020 (Clause 8.2).

 47   See Road Transport Award 2020, Clause 9; Long Distance Award 2010, Clause 9; and the Long Distance Award 2020, Clause 9.

 48   See Road Transport Award 2020, Clause 10; the corresponding (but not identical) clause in the Long Distance Award 2010 is Clause 10; and the Long Distance Award 2020, Clause 10.

 49   See Road Transport Award 2020, Clause 11; the corresponding (but not identical) clause in the Long Distance Award 2010 is Clause 11; and the Long Distance Award 2020, Clause 11.

 50   The applicable clauses in the Long Distance Award 2010 are Clauses 12 and 16; Long Distance Award 2020, Clauses 12 and 16; Road Transport Award 2010, Clause 15; and the Road Transport Award 2020, Clauses 12 and 17.

 51   See Road Transport Award 2010, Schedule B; Road Transport Award 2020, Schedule A; Long Distance Award 2010, Clause 12; and the Long Distance Award 2020, Clause 12.

 52   See Long Distance Award 2010, Clause 20; and the Long Distance Award 2020, Clause 20.

 53   See Road Transport Award 2010, Clause 29; and the Road Transport Award 2020, Clause 24.

 54   See Road Transport Award 2010, Clause 12.2, Print PR986380; and the Long Distance Award 2010, Clause 10.2, Print PR986381.

 55   The provision in the Long Distance Award 2010 is similar, but with no reference to the need to record the details in a time and wages record; Clause 8.2.

 56   And similarly, Clause 16.7 of the Long Distance Award 2010.

 57   Exhibit R2, [10].

 58   See Long Distance Award 2010, Clause 23.2(b)(ii); and the Long Distance Award 2020, Clause 20.2(b)(ii).

 59   Long Distance Award 2010, Clause 4.2; and the Long Distance Award 2020, Clause 4.3.

 60   Long Distance Award 2010, Clause 3.1; and the Long Distance Award 2020, Clause 4.2(b).

 61   See also Long Distance Award 2020, Clause 4.3.