United Workers' Union v Tatura Milk Industries Pty Ltd
[2024] FWC 3021
•31 OCTOBER 2024
| [2024] FWC 3021 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.739—Dispute resolution
United Workers’ Union
v
Tatura Milk Industries Pty Ltd
(C2023/7466)
| DEPUTY PRESIDENT MILLHOUSE | MELBOURNE, 31 OCTOBER 2024 |
Application to deal with a dispute arising under an enterprise agreement.
This decision concerns an application by the United Workers’ Union (UWU) under s 739 of the Fair Work Act 2009 (Cth) (Act) for the Commission to deal with a dispute in accordance with the dispute settlement procedure at clause 15 of the Bega Tatura Production and Warehouse Enterprise Agreement 2022[1] (Agreement).
Broadly, the UWU describes the dispute as relating to the operation of clause 32 of the Agreement in instances where the respondent, Tatura Milk Industries Pty Ltd, receives expressions of interest for voluntary redundancy and determines to make another employee compulsorily redundant instead.
Jurisdiction and the issue for determination
Following attempts at conciliation before another Member of the Commission, there was no resolution to the dispute. The parties agreed that the Commission should determine the following question in resolution of the application:
In respect of clause 32 of the Bega Tatura Production and Warehouse Enterprise Agreement 2022, is the Respondent entitled to reject an employee’s application for voluntary redundancy in circumstances where another employee (who has not applied for voluntary redundancy) will be made redundant instead, provided the decision not to accept the application for voluntary redundancy is based on skills, education, and knowledge of the plant, requirements for skills both current and future and replacement of skills?
The pre-requisites to the Commission’s involvement having been followed, I am satisfied that the Commission is empowered to resolve the dispute by determination of the agreed question in accordance with the dispute settlement procedure at clause 15 of the Agreement and s 739 of the Act.
The Agreement
The Agreement commenced operation on 16 December 2022 and will reach its nominal expiry date on 31 March 2026.[2] The Agreement incorporates the Food, Beverage and Tobacco Manufacturing Award 2020 (Award), to the extent that in the case of any inconsistency between the Agreement and the Award, the Agreement shall prevail to the extent of the inconsistency.[3] It is not contended in this application that the clause in dispute in the Agreement is inconsistent with the Award.
The Agreement covers and is binding upon the respondent, the UWU and ‘the Employees,’ where Employee is defined in the Agreement to mean an employee of the respondent whose employment is located at the relevant Tatura ‘site’ and who is engaged to perform work in one of the classifications at Appendix 1 of the Agreement.[4]
Clause 32 of the Agreement provides as follows:
32. Redundancy
Application and objectives
32.1 The application of clause 32 is limited to Full-Time and Part-Time Employees.
32.2 The objectives of clause 32 are to ensure fair, equal processes for Employees, that skills and knowledge are not unduly lost from the Company and positive relationships are maintained between the Parties.
Discussions
32.3If the Company makes a definite decision that the Company no longer wishes the job a Employee has been doing to be done by anyone, and this is not due to the ordinary turnover of labour and that decision may lead to termination of employment, the Company will hold discussions with the Employees directly affected and the Union.
32.4The discussions will take place as soon as is practicable after the Company has made a definite decision and will cover any reasons for the proposed terminations, measures to avoid or minimise the terminations and measures to mitigate any adverse effects of any terminations on the Employees concerned.
32.5For the purposes of the discussion the Company will, as soon as practicable, provide in writing to the Employees concerned and the Union, all relevant information about the proposed terminations including the reasons of the proposed terminations, the number and categories of Employees likely to be affected, and the number of workers normally employed and the period over which the terminations are likely to be carried out. However, the Company will not be required to disclose confidential information the disclosure of which would be detrimental to the Company’s interests. The Company will endeavour where possible to find the Employee a comparable position.
Severance and other pay payments
32.6Subject to clause 32.7 to 32.9, if an Employee’s employment is terminated on the grounds of redundancy, they are eligible to receive the following payments:
(a)four week’s severance pay, or five week’s severance pay if the Employee is over 45 years of age (this payment is in lieu of any notice period under clauses 31.1 and 31.2); and
(b)four week’s pay for each completed year of service, up to a limit of 25 years of service; and
(c)all accrued entitlements including annual leave, annual leave loading and RDO’s will be paid in full. Pro-rata long service leave will be paid after five year’s continuous service; and
(d) accrued paid personal / carer’s leave entitlements under the following scale:
32.7 In relation to the payments in clause 32.6:
(a)Employees will be paid at their Ordinary Rate of Pay except for annual leave, annual leave loading and long service leave entitlements which will be paid at the all-purpose rate of pay (ie: the Employees Ordinary Rate of Pay plus shift worker allowances and weekend penalties averaged over the 12 months before termination of employment); and
(b)Employees over the age of 45 years will receive a 10% loading on the payment.
32.8A Employee who becomes redundant will be entitled to a $1,000 retention payment provided the Employee terminates at a date agreed with the Company.
32.9Employees have no entitlement to the payments under clauses 32.6 to 32.8 if they have completed less than one year of continuous service, they are apprentices whose terms of employment are governed by the State Training Board, they are Casual Employees or they are Seasonal / Temporary Employees.
Implementation process
32.10To avoid forced redundancies, the Parties agree to review other options such as redeployment and retraining, reduction of Casual and Seasonal / Temporary Employees, natural attrition, reduction in working hours and voluntary redundancy.
Voluntary redundancy
32.11Where the options reviewed do not avoid the need for redundancies, expressions of interest for voluntary redundancy will be called. The Company will have no obligation to accept a volunteer and will make a decision based on skills, education, training and knowledge of the plant, requirements for skills both current and future and replacement of skills. In making such decisions the Company acknowledges the benefit of voluntary separation rather than compulsory redundancy.
32.12After confirmation of acceptance by the Company of voluntary redundancy, such redundancy will be binding.
32.13The Company will retain the right to examine each case on its merits given business requirements with respect to all applications for voluntary redundancy.
Compulsory redundancy
32.14Where compulsory redundancy is necessary, Employees will be selected on the criteria of plant knowledge and capability, skills, training and experience.
32.15The Company in making such decisions recognises the strengths and value of its recruitment and training programs to deliver quality products, continuous improvement and competitive placement in local and domestic markets. In making this recognition the Company will not allow the loss of these key attributes to ensure the business remains successful and maximises the future employment security of all Employees.
Outplacement service
32.16The Company will make an outplacement resource available to Employees made redundant. The provider will be mutually agreed upon by the Parties.
Principles of interpretation
The principles of enterprise agreement interpretation were summarised by the Full Federal Court in James Cook University v Ridd:[5]
(a)The starting point is the ordinary meaning of the words, read as a whole and in context.[6]
(b)A purposive approach is preferred to a narrow or pedantic approach – the framers of such documents were likely to be of a ‘practical bent of mind.’[7] The interpretation ‘turns upon the language of the particular agreement, understood in the light of its industrial context and purpose.’[8]
(c)Context is not confined to the words of the instrument surrounding the expression to be construed.[9] It may extend to ‘…the entire document of which it is a part, or to other documents with which there is an association.’[10]
(d)Context may include ‘…ideas that gave rise to an expression in a document from which it has been taken.’[11]
(e)Recourse may be had to the history of a particular clause ‘Where the circumstances allow the court to conclude that a clause in an award is the product of a history, out of which it grew to be adopted in its present form…’[12]
(f)A generous construction is preferred over a strictly literal approach,[13] but ‘Awards, whether made by consent or otherwise, should make sense according to the basic conventions of the English language. They bind the parties on pain of pecuniary penalties.’[14]
(g)Words are not to be interpreted in a vacuum divorced from industrial realities but in the light of the customs and working conditions of the particular industry.[15]
Contentions
UWU’s position
The UWU’s position is that the answer to the question posed for arbitration is ‘no.’ In summary, the UWU submits that the respondent relies only upon subclause 32.11 and in particular, the line that reads, ‘The Company will have no obligation to accept a volunteer and will make a decision based on skills, education, training and knowledge of the plant, requirements for skills both current and future and replacement of skills.’ The UWU says that in relying upon only this provision, the respondent fails to consider each of the elements of clause 32, which must be read as a whole and in context.
The UWU points to subclause 32.2 which specifies that the objectives of the clause are to ensure (a) fair, equal processes for employees; (b) that skills and knowledge are not unduly lost; and (c) that positive relationships are maintained between the parties. The UWU submits that the respondent’s approach only considers the objective at (b), thereby nullifying the remaining two objectives, resulting in an unfair, unequal and unjust process weighed heavily in favour of the respondent.
In relation to the first objective in subclause 32.2, the UWU submits that a fair, equal process for employees should be interpreted as placing a positive duty on the respondent to provide employees with a fair and equal process. The UWU says that the rejection of an employee’s application for voluntary redundancy in circumstances where another employee (who has not applied for voluntary redundancy) will be made redundant instead is antithetical to this objective, even if the decision not to accept the application for voluntary redundancy is based on skills, education, training and knowledge of the plant, requirements for skills both current and future and replacement of skills.
As to the second objective in subclause 32.2, the UWU submits that it is crucial to consider the practical implications of choosing employees for redundancy who have not applied for voluntary redundancy, over employees who have done so. The UWU contends it risks the erosion of skills and knowledge as it undermines the confidence of other employees in the stability of their employment, potentially prompting increased risk of staff turnover, a loss of key attributes and adverse impacts upon employment security and business success.
In relation to the third objective in subclause 32.2, the UWU contends that the rejection of an employee’s application for voluntary redundancy and the selection by the respondent of another employee to be made compulsorily redundant, weighs heavily against maintaining a positive relationship between the parties.
The UWU also points to the ultimate sentence of subclause 32.11 and says that there is a preference in the Agreement for voluntary separations over compulsory redundancies.
The UWU considers that the above considerations demonstrate that the respondent is to consider matters beyond the criteria in subclause 32.11. It submits that there is a limited capacity for the respondent to refuse applications for voluntary redundancy pursuant to subclause 32.11. This is said to be because the refusal would be contrary to the objectives of clause 32 and that is so even if the decision not to accept the voluntary redundancy application is based on skills, education, training and knowledge of the plant, requirements for skills (both current and future) and replacement of skills. It rejects the respondent’s contention that its construction erroneously requires the Commission to imply a limitation on the right stated in subclause 32.11.
Respondent’s position
The respondent’s position is that the answer to the agreed question is ‘yes.’ In summary, the respondent submits that subclause 32.11 of the Agreement expressly and unambiguously states that it has no obligation to accept a volunteer for redundancy. It says that the UWU seeks to imply a limitation on that unambiguous right, where such limitation is neither capable of implication as a term,[16] nor is it an interpretation supported by the plain language of the Agreement.
The respondent contends that the only considerations mandated by the Agreement in respect of its assessment of expressions of interest in voluntary redundancy are that the decision will be made based on skills, education, training and knowledge of plant, requirements for skills both current and future and replacement of skills, as set out in subclause 32.11. It says that this is supported by subclause 32.13 which provides that the respondent will ‘retain the right to examine each case on its merits given business requirements with respect to all applications for voluntary redundancy.’ The respondent submits that the UWU ignores this clause and its reinforcement of the respondent’s right to determine all applications for voluntary redundancy on their merits, without any requirement to automatically accept an application for voluntary redundancy.
Consideration
Clause 32, titled Redundancy, comprises of seven subclauses dealing with employee redundancies and the process for them. Subclauses 32.1 and 32.2 appear beneath the heading Application and objectives. Relevantly, subclause 32.2 provides the three objectives of clause 32:
32.2 The objectives of clause 32 are to ensure fair, equal processes for Employees, that skills and knowledge are not unduly lost from the Company and positive relationships are maintained between the Parties.
The subclauses appearing beneath the headings Discussions, Severance and other pay payments and Implementation process concern the respondent’s obligation to hold discussions with directly affected employees and the union following a definite decision (subclauses 32.3 to 32.5), the severance and other payment obligations that follow from a dismissal on redundancy grounds (subclauses 32.6 to 32.9), and the measures that will be taken to avoid forced redundancies (subclause 32.10). The construction and meaning of these provisions did not form a direct part of the application.
Where the options reviewed do not avoid the need for redundancies, expressions of interest for voluntary redundancy will be called. This matter is addressed at subclauses 32.11 to 32.13 beneath the heading Voluntary redundancy. Upon receipt of expressions of interest for a voluntary redundancy, the Agreement states that the respondent will have ‘no obligation to accept a volunteer.’ The provision requires that the respondent’s decision will be ‘based on skills, education, training and knowledge of the plant, requirements for skills both current and future and replacement of skills.’ In making such decisions the respondent ‘acknowledges the benefit of voluntary separation rather than compulsory redundancy’ (subclause 32.11).
The UWU’s position is that in the context of assessing an expression of interest for voluntary redundancy, the respondent is required to consider ‘matters’ beyond the criteria in subclause 32.11, including the listed objectives in subclause 32.2. In summary, the UWU contends that any decision to decline an expression of interest in voluntary redundancy would ‘go against the objective of the clause, even if the decision not to accept the application for voluntary redundancy is based on skills, education, training and knowledge of the plant, requirements for skills both current and future and replacement skills.’[17] For the reasons that follow, I do not accept the UWU’s construction.
First, I do not consider that the objectives in subclause 32.2 are to be applied in the manner contended by the UWU. The text of subclause 32.2 itself does not contain mandatory language that obliges or requires the respondent to take particular steps. Where mandatory obligations are imposed upon the respondent, the language of the Agreement makes this clear by specifying, for instance, that ‘the Company will hold discussions,’[18] or ‘will make an outplacement resource available.’[19] The language of subclause 32.2 contains no such mandatory language.
Second, the UWU’s construction obliges the respondent to first accept volunteers before making an employee compulsorily redundant. The UWU contends this is so even if the decision not to accept an application for voluntary redundancy were based on skills, education, training and knowledge of the plant, requirements for skills both current and future and replacement of skills for refusing a volunteer – as referred to in subclause 32.11.[20] However, such a limitation it is at odds with:
(a)the unambiguous term providing that there is no obligation on the respondent to accept a volunteer (subclause 32.11);
(b)the respondent’s right to examine each application for voluntary redundancy on its merits given business requirements (subclause 32.13); and
(c)the express terms which make it clear that an expression of interest will only be binding upon acceptance by the respondent (subclause 32.12).
There is no basis, having regard to the language in the Agreement, to read down these terms by giving primacy to the objectives in subclause 32.2 in the manner contended by the UWU. Further, if the respondent is first obliged to accept volunteers, the above provisions have no work to do. It is ordinarily to be assumed that the framers of an instrument will not have intended for words included in the instrument to be ineffectual.[21]
Third, and relatedly, the UWU relies upon the ultimate sentence of subclause 32.11 in support of its position that voluntary separations should be made over compulsory redundancies.[22] I do not accept this construction, as it finds no support in the plain language of the subclause. While subclause 32.11 identifies that there is a benefit to voluntary separation which the respondent acknowledges, I consider that it strains the language of subclause 32.11 to read those terms as compelling the respondent to first accept volunteers. Such a construction would further contradict other elements of subclause 32.11 set out at [23] above, including the unambiguous statement that the respondent has no obligation to accept a volunteer.
Properly construed, the respondent’s decision in relation to the expressions of interest it receives for voluntary redundancy is required to be made by reference to the following considerations, demonstrated by the use of the term will in subclause 32.11:
(a)The respondent will make a decision based on ‘skills, education, training and knowledge of the plant...’ This requires an assessment by the respondent of the skills of the employee who has expressed interest in voluntary redundancy and that employee’s education, training and plant knowledge.
(b)The respondent will make a decision based on ‘…requirements for skills both current and future and replacement of skills.’ This involves an assessment by the respondent of the requirements of the business insofar as it concerns employee skills, both at the time it is considering the expression of interest and at a future time. Further, the respondent is required to consider the replacement of skills should such skills be lost in the event of it accepting an expression of interest. This consideration is therefore a broader assessment of the skills profile of the employee cohort within the relevant business department.
The requirement to make a decision by reference to the above matters can be contrasted with the non-obligatory acknowledgement in the ultimate sentence of subclause 32.11. That the respondent acknowledges the benefit of voluntary separation does not dilute the express and unambiguous language of the voluntary redundancy provision. That is, the respondent will have no obligation to accept a volunteer. But as noted at [26] above, the respondent will make decisions about those applications by reference to the specified criteria in subclause 32.11. This involves an assessment of the expressions of interest with a view to preserving, inter alia, required skills or employee experience. Subclause 32.13 of the Agreement reinforces this right by making it clear that the respondent will ‘retain the right’ to examine each application ‘on its merits given business requirements.’ A voluntary redundancy will be binding only ‘after confirmation of acceptance’ by the respondent (subclause 32.12).
On my preferred construction, subclause 32.2 has meaningful work to do by prescribing the aspirations or aims of clause 32. These objectives are achieved where the respondent adheres to the mandatory obligations imposed upon it within clause 32. Against this context, I do not consider that subclause 32.2 provides additional matters against which a voluntary redundancy application is to be assessed. Nor does the language of the Agreement support such a construction.
Where compulsory redundancy is ‘necessary,’ the Compulsory redundancy provision will be triggered (subclauses 32.14 and 32.15). Subclauses 32.14 and 32.15 provide that the respondent will not allow the loss of key attributes pertaining to plant knowledge and capability, skills, training and experience. This prohibition on the loss of these key attributes appears to provide contextual support for the construction of the voluntary redundancy provision in the manner set out in this decision.
Conclusion and disposition
For the reasons given, the answer to the agreed question is ‘yes.’ In respect of clause 32 of the Agreement, the respondent is entitled to reject an employee’s application for voluntary redundancy in circumstances where another employee (who has not applied for voluntary redundancy) will be made redundant instead, provided the decision not to accept the application for voluntary redundancy is based on skills, education, and knowledge of the plant, requirements for skills both current and future and replacement of skills.
The dispute is determined accordingly.
DEPUTY PRESIDENT
Appearances:
L McDonald for the applicant.
K Aistrope of HWL Ebsworth for the respondent.
Hearing details:
2024.
Melbourne (by video):
August 29.
[1] AE518496
[2] [2022] FWCA 4335 at [4]
[3] Agreement, cl 5
[4] Agreement, cl 1.1
[5] [2020] FCAFC 123 at [65]
[6] City of Wanneroo v Holmes [1989] FCA 553; 30 IR 362 at 378 (City of Wanneroo v Holmes); City of Wanneroo v Australian Municipal, Administrative, Clerical and Services Union [2006] FCA 813; 153 IR 426 at [53] (City of Wanneroo v AMACSU); WorkPac Pty Ltd v Skene [2018] FCAFC 131; 264 FCR 536 at [197] (WorkPac v Skene))
[7] Kucks v CSR Limited [1996] 66 IR 182 at 184 (Kucks v CSR); Shop Distributive and Allied Employees' Association v Woolworths SA Pty Ltd [2011] FCAFC 67 at [16]; WorkPac v Skene at [197])
[8] Amcor Limited v Construction, Forestry, Mining and Energy Union [2005] HCA 10; 222 CLR 241 at [2]
[9] City of Wanneroo v AMACSU at [53]
[10] Short v FW Hercus Pty Ltd [1993] FCA 51; 40 FCR 511 at 518 (Short v FW Hercus); Australian Municipal, Administrative, Clerical and Services Union v Treasurer of the Commonwealth of Australia [1998] FCA 249; 82 FCR 175 at 178
[11] Short v FW Hercus at 518
[12] Ibid
[13] Geo A Bond and Co Ltd (in liq) v McKenzie [1929] AR 499 at 503-504; City of Wanneroo v AMACSU at [57]
[14] City of Wanneroo v Holmes at 380
[15] City of Wanneroo v Holmes at 378-379; WorkPac v Skene at [197]
[16] AMWU v UGL Operations and Maintenance Pty Ltd[2022] FWC 3059
[17] Digital Court Book (DCB) 34 at [43]-[44]
[18] Agreement, cl 32.3
[19] Agreement, cl 32.16
[20] DCB 31 at [29]
[21] See, for example, CMP Manufacturing Pty Ltd v Barbieri [2018] FCA 622; 275 IR 465 at [39]
[22] DCB 33-34 at [42]
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