Visy Paper Pty Ltd T/A Visy Recycling v "Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union" known as the Australian Manufacturing Workers' Union (AMWU)

[2012] FWA 3723

Note: An appeal pursuant to s.604 (C2012/4016) was lodged against this decision - refer to Full Bench decision dated 17 August 2012 [[2012] FWAFB 7072] for result of appeal.

[2012] FWA 3723

FAIR WORK AUSTRALIA

DECISION

Fair Work Act 2009
s.739 - Application to deal with a dispute

Visy Paper Pty Ltd T/A Visy Recycling
v
"Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union" known as the Australian Manufacturing Workers' Union (AMWU)
(C2011/4880)

COMMISSIONER CARGILL SYDNEY, 10 MAY 2012

Wages and leave.

[1] This decision arises from an application pursuant to section 739 of the Fair Work Act 2009 (the Act) for Fair Work Australia (FWA) to deal with a dispute. The application is a joint application made by Visy Paper Pty Ltd trading as Visy Recycling (Visy or the company) and the “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU or the union).

[2] The dispute is described by the applicants as being in relation to current roster calculations with specific reference to annual leave and the average pay calculation within the sixty week cycle of the shift roster.

[3] The matter was the subject of a conciliation conference on 4 July 2011 but did not resolve. The parties agreed that the dispute should be dealt with by arbitration and a hearing for that purpose was listed on 7 September 2011. That date was vacated at the request of the parties. Ultimately the matter was heard on 3 April 2012. Throughout the process Visy has been represented by Mr Farr, solicitor, who appeared with permission. At the hearing on 3 April the AMWU was represented by Mr Walkaden.

[4] Three witnesses gave evidence in the union’s case. These are:

Mr M Roelofs Employee of Visy and AMWU delegate. His witness statement dated 19 March 2012 was marked Exhibit AMWU 1. Mr Roelofs was not required for cross examination;

Mr A Suffling Employee of Visy, AMWU delegate and Father of the Chapel at the relevant site. His witness statement dated 20 March 2012 was marked Exhibit AMWU 2. Mr Suffling’s oral evidence is at PN 50-105 of Transcript; and

Mr P Lord Employee of Visy and member of the AMWU. Mr Lord was an AMWU delegate from 1997 to 1999. His witness statement dated 16 March 2012 was marked Exhibit AMWU 3 and his oral evidence is at PN 106-263 of Transcript.

[5] Mr L Kingma gave evidence on behalf of Visy. Mr Kingma was employed by Visy between 1994 and 2011. He was the General Manager of the relevant site between May 2010 and August 2011. Mr Kingma’s evidence is at PN 276-689 of Transcript.

QUESTIONS / ISSUES TO BE DETERMINED

[6] As at the date of the hearing the parties had not agreed on the precise question or issues which are to be determined.

[7] Visy’s position is that, consistent with an agreement between the parties reflected in Exhibit Visy 7, the issues to be decided are as follows:

“In respect of Paper employees employed at Visy’s Smithfield site pursuant to the Visy (Smithfield, Warwick Farm, Dandenong, O’Connor, FAG Carole Park) Enterprise Agreement 2010, Fair Work Australia is asked to determine:

1. The weekly pay to be paid to each employee pursuant to the roster and average weekly pay arrangement; and

2. That the allocation of annual leave pursuant to the roster arrangement is in accordance with the entitlement to annual leave under the Agreement.

No other matter is part of this agreed dispute and is not relevant to any consideration of FWA.”

[8] The AMWU’s position is that there are three issues to be decided. These are:

“i. The gross weekly wage to be paid to each employee for working to the current roster and current pay arrangement.

ii. Whether the treatment of annual leave pursuant to the roster is in accordance with the Visy (Smithfield, Warwick Farm, Dandenong, O’Connor, FAG Carole Park) Enterprise Agreement 2010 (“the current enterprise agreement”).

iii. Whether any proposed reduction to the gross weekly pay of the employees in the manner contemplated by Visy and the change with respect to the treatment of the four (4) days annual leave implemented by Visy is a valid exercise of managerial prerogative.”

[9] As can be seen, although there are some fine points of distinction between the parties in relation to the first two issues, the main difference concerns whether or not the question of managerial prerogative is within the boundaries of the dispute. It should be noted that the issue is put in the form of an alternative submission by the union, only relevant in the event of a finding in Visy’s favour in relation to either or both of the first two matters.

BACKGROUND, FACTS AND EVIDENCE

[10] Visy operates a paper mill at Smithfield in Sydney. The company, the AMWU and the relevant employees who work at that mill are parties to the enterprise agreement referred to in paragraphs 7 and 8 above (the Agreement). As the name of the Agreement suggests, it applies at a number of sites. These are set out at Appendix 1 to the Agreement. It also binds other parties; another corporate entity within the Visy group and another union. Neither of those parties is affected by this dispute, nor does the dispute relate to any of the sites other than the paper mill at Smithfield.

[11] The paper mill operates 24 hours a day, 7 days a week, 365 days a year and 366 days in each leap year. All production employees work to a roster.

[12] Mr Lord and Mr Roelofs both commenced employment at the mill in 1988 when it was run by a predecessor organisation to Visy. Mr Lord’s evidence is that, until 1998, employees worked a roster based on a five week cycle. It consisted of seven day shifts followed by two days off, then seven afternoon shifts followed by two days off, then seven night shifts followed by ten days off. Each shift was of eight hours duration. There was no annual leave built into the roster. Each employee was able to take their five weeks leave at a time of their choice.

[13] Mr Lord’s evidence is that, in 1998, the company proposed the introduction of a new roster with inbuilt annual leave. There were a number of meetings about the issue between Visy and AMWU representatives. Mr Lord was one of the latter. The company put forward a number of proposals each of which was put to the employees. Ultimately, in May or June 1998, one of those proposals was accepted by the employees. That proposal is the current roster worked at the mill. The roster has never been part of a formal registered, certified or approved agreement but has operated as a site arrangement between the parties.

[14] The new roster is based on a 60 week cycle. Each employee is allocated to one of five shifts: A, B, C, D, or E. Mr Suffling is on the B shift; Mr Roelofs is on the C shift; and Mr Lord is on the D Shift. The length of each shift worked is now 12 hours. The day shift runs from 7am to 7pm and the night shift from 7pm to 7am.

[15] Under the current roster employees work two day shifts followed by two night shifts and then have four days off. This cycle repeats for seven weeks at which time employees have either a fourteen day or a twenty-two day break. It should be noted that some of the evidence suggested that these latter breaks were actually of twenty-one days duration.

[16] An analysis of the roster is at Appendix A to the company’s outline of submissions, Exhibit Visy 8. It shows that each cycle of 420 days (60 weeks) is broken up as follows: 42 work cycles amounting to 168 days; 36 four day breaks amounting to 144 days; three fourteen day breaks amounting to 42 days; and, three twenty-two day breaks amounting to 66 days.

[17] A copy of the roster cycle which covers the period from 22 March 2011 to 14 May 2012 is attached to the outline of Visy’s submission. A more legible version of the same document is at Exhibit Visy 4.

[18] Under cross examination Mr Lord agreed that, during the negotiations in 1998 for the new roster, the company had not suggested that it intended to provide employees with more than their statutory entitlements as a result of the introduction of the roster.

[19] When the roster was introduced Visy made calculations to determine the average weekly pay for each employee. These calculations included various penalty rates and loadings and the result is that, regardless of the actual number of hours worked in a particular week or the timing of that work, employees receive the same gross weekly wage each week. At present that gross weekly wage is $1838.95 which is derived by multiplying the present hourly rate set out in Appendix 3 of the Agreement by 52.95 hours.

[20] A copy of what is said to be calculations made by Visy around the time of the introduction of the roster is Attachment 2 to Exhibit Visy 8. It is also separately marked as Exhibit Visy 6. Mr Kingma is not sure of the exact provenance of the document. He was not at Smithfield at that time and is not the author of the document.

[21] In any event the calculations show that, after including penalty rates, overtime and an all purpose allowance, the total paid hours for 55 weeks worked is 52.49. After then accounting for annual leave including the additional 26.95 hours owing because the roster cycle is 60 not 52 weeks, the total average number of hours each week was calculated as being 52.95.

[22] Employees were paid on the basis of that calculation from 1998. In 2009 the company conducted an audit of its long service leave liability. As a result of that audit the calculation of the average number of hours per week was reviewed. It was decided that it was incorrect. Mr Kingma prepared a detailed revised calculation which is Attachment 2 to Exhibit Visy 8 and also Exhibit Visy 5.

[23] Mr Kingma’s evidence is that the original calculation contained a number of errors including an incorrect multiplier, the wrong amount of rostered overtime and the inclusion of penalty rates whilst employees were on annual leave. His revised calculation determined that the proper average paid hours per week should be 51.98, not 52.95 as previously calculated.

[24] It is Mr Lord’s evidence that, following the introduction of the new roster in 1998, the issue of the treatment of the extra 26.95 hours of annual leave remained outstanding. His evidence is that he was informed by management at the time that five weeks annual leave was built into the roster and the extra 26.95 hours could be either incorporated into the employee’s weekly pay or alternatively, taken as leave at a time of each employee’s choice.

[25] Mr Lord’s evidence is that the issue was put to a vote of employees. The outcome of the vote was that the extra hours would be taken as leave. A memorandum of 11 August 1999 and voting slips is at Annexure PL2 to Exhibit AMWU 3. Further memoranda from the company to employees dated 19 and 26 October 1999 are at Annexure PL3 and 4 respectively. Each deals with the different ways in which employees could take the leave, either as single days or as a four day block.

[26] It is the evidence of Mr Suffling and Mr Roelofs that this arrangement has provided employees with some flexibility and choice in their leave arrangements and has been of great benefit.

[27] As a result of the long service leave audit referred to in paragraph 22 above, Visy determined that the roster actually accounted for the entire amount of annual leave, including the extra 26.95 hours. Consequently, the employees were not entitled to the extra four days.

[28] The AMWU was informed of the revised calculation of the average weekly hours and the company’s position in relation to the extra annual leave. A number of meetings were held to discuss these issues. Exhibits Visy 1, 2 and 3 are letters from Visy to the union referencing some of those discussions.

[29] Ultimately in July or August 2009 the company ceased its practice of giving the extra 26.95 hours leave outside of the roster cycle. It did this by converting four rostered days off into annual leave days. The AMWU and employees did not agree to this change in arrangements.

[30] It should be noted that the evidence and submissions variously refer to the “extra” annual leave as being 26.95 hours, .77 or .75 of a week or alternatively, four days. Although the parties disagree on the manner in which this “extra” leave should be treated, there is no real issue between them as to the actual amount of leave which the employees accrue from the additional eight weeks of the roster cycle over and above the usual yearly accrual.

[31] There has been no alteration to the average weekly pay calculation. The issue has been the subject of ongoing debate between the parties including during the most recent round of bargaining. The company’s understanding of the parties’ positions in relation to the manner in which both this issue and the leave question are to be resolved is set out in Exhibit Visy 7. I have no evidence before me as to the union’s understanding on this point other than it has been agreed that the issue is to be decided by way of this arbitration.

AMWU SUBMISSIONS

[32] The AMWU provided a written outline of submissions, Exhibit AMWU 4. Mr Walkaden also made oral submissions.

[33] Mr Walkaden submitted that the power to determine the issues between the parties derived from clause 23 of the Agreement which sets out a dispute resolution procedure that includes arbitration by FWA. The issues to be determined by FWA deal with fundamental terms and conditions of employment and clearly arise out of the implementation and operation of the Agreement.

[34] Mr Walkaden submitted that the question of whether the gross weekly wage should be determined by multiplying the hourly rate in the Agreement by 52.95 as contended by the union or by 51.98 as proposed by Visy is a significant issue. He submitted that the gross difference over the 60 week roster cycle based on present rates is $2020.80 for each employee. That would be a significant reduction in wages for employees.

[35] Mr Walkaden acknowledged that employees are provided with their full annual leave entitlement. He submitted that the issue between the parties in relation to leave is the company’s unilateral change in its treatment of annual leave in the roster by, in effect, requiring the employees to work an extra four shifts during each 60 week cycle. This also amounts to a material reduction for employees. In this regard Mr Walkaden referred to the evidence of the employees as to the advantages which they had derived from the flexibility of the extra four days off at a time of their own choice.

[36] Mr Walkaden noted that the introduction of the roster had been the subject of an agreement between the company, the AMWU and the employees. He also noted that the change to the annual leave arrangements was implemented by Visy without any negotiation with or agreement from the employees.

[37] A number of submissions are made about the principles governing the interpretation of industrial instruments. It is noted that the Agreement in its terms provides for the incorporation of the Graphic Arts General Award 2000 (the Award).

[38] The AMWU submits that the established approach to interpreting an industrial instrument is to give the relevant words their plain and ordinary meaning but not adopt a pedantic or literal approach. Regard should be given to the instrument as a whole as well as the context and purpose of the clause in question. It is not necessary to find an ambiguity. The AMWU relies upon a number of decisions: Kucks v CSR Limited (1996) 66 IR 183 @ 184; The Australian Workers’ Union, Western Australian Branch v Co-Operative Bulk Handling Limited [2010] FWAFB 4801 @ paras 6-14; Catholic Regional College Sydenham v Independent Education Union of Australia [2011] FWAFB 2784 @ paras 37-39; Shop, Distributive and Allied Employees Association v Woolworths SA Pty Ltd [2010] FCAFC 67 @ paras 14-18; Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v QR Limited [2010] FCA 591 @para 39; Amcor Limited v Construction, Forestry, Mining and Energy Union (2005) 222 CLR 241; and, The Australasian Meat Industry Employees Union v Coles Supermarkets Australia Pty Ltd (1998) 80 IR 208 @ 212.

[39] The union submits that the decision of City of Wanneroo v Australian Municipal, Administrative, Clerical and Services Union (2006) 153 IR 426 is instructive in understanding what is meant by context.

[40] The AMWU advances three points to support its argument that the multiplier should be 52.95 hours. It relies on clause 4 of Appendix 6 of the Agreement and submits that the words “the current pay arrangements” in that clause can only mean the arrangements in force prior to the commencement of the instrument. Those arrangements include the use of 52.95 hours. The union submits that any change to that figure by Visy during the life of the Agreement would be in contravention of it.

[41] The second point relates to the manner in which employees have been paid. The union submits that it is incorrect to suggest that the employees have received an annualised salary. This is because the roster is based on a 60, not a 52, week cycle. The union also submits that it is not clear that the arrangement should properly be described as an averaged pay. Because of the absence of contemporaneous evidence setting out the way in which the 52.95 hours was calculated in 1998, it is open to FWA to determine that it was simply an agreed rate. It follows that it should not be disturbed now.

[42] In his submissions Mr Walkaden noted that the evidence showed that, at various times, other figures had been mentioned. This included references in Exhibit Visy 2 to 52.25 and Mr Lord’s recollection that at one stage 53.77 was proposed by the company.

[43] The third point is relied upon if the earlier two points are rejected. The union submits that the calculations relied on by Visy are incorrect and that averaging the entitlements under the Agreement does not result in a rate of 51.98 hours. The AMWU submits that there are two particular components of the calculation which are incorrect: the overtime rate for Monday - Friday work; and, the annual leave loading.

[44] The union submits that the hours worked by the employees under the roster mean that part of the weekday overtime component should be paid at double time. In this regard reference is made to clause 6.4.2 of the Award. The company’s calculations incorrectly pay all weekday overtime at time and a half.

[45] The AMWU submits that Visy has also erred in relation to the annual leave loading of 10% it has included in its calculations. The union relies on clauses 6.2.3 and 7.1.2(a) and (b) of the Award as establishing that the rate should instead be 17.5%. Mr Walkaden submitted that such a rate was the minimum for all employees covered by a federal award. In this regard he referred to a decision concerning the Airports and Overseas Passenger Terminals Employees’ Award 166 CAR 610.

[46] In relation to the question of the changed treatment of annual leave the union submits that the company’s actions are not in accordance with the Agreement. Clause 4 of Appendix 7 provides that arrangements for working the 35 hour week are summarised in existing site agreements. It is noted that the same provision formed part of the predecessor 2007 agreement.

[47] The AMWU submits that the only possible interpretation of the clause is that the company had committed to the then current site agreement for the life of the Agreement. By taking the extra four days annual leave from employees and converting the four rostered days off into annual leave days Visy has treated the leave in a manner which conflicts with the paper mill site agreement and this in turn conflicts with the Agreement. The union submits that I should determine that employees should receive an additional four days annual leave to be taken on shifts they are otherwise rostered to work.

[48] The union submits that, if I find in Visy’s favour in relation to the first two issues, the question of managerial prerogative becomes critical. Neither of the company’s changes are a proper exercise of such prerogative.

[49] The AMWU submits that I should follow the exposition of relevant principles by Vice President Lawler in two recent decisions: Construction, Forestry, Mining and Energy Union v H W E Mining Pty Limited[2011] FWA 8288 (HWE) and Pulle v Commonwealth of Australia acting through the Secretary of the Department of Parliamentary Services[2011] FWA 7462.

[50] The union submits that Visy’s changes are obviously unjust and unreasonable and consequently should not take place. The changes are contrary to arrangements agreed to by the company, union and employees. Furthermore, those arrangements have been in place for a significant period of time. Some employees have accepted employment with Visy on the basis of such arrangements. There is no agreement to the changes. The comments of Vice President Lawler at paragraph 29 of the HWE decision are particularly relevant.

[51] Mr Walkaden submitted that it is very important that industrial parties be held to settlements they reach. In this regard he referred to the decision of a Full Bench in Cochlear Limited v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union - New South Wales Branch [2009] AIRCFB 27 @ 35.

[52] The union submits that the changes will cause financial and other personal difficulties for employees particularly in relation to balancing their personal and family commitments. The objects of the Act, especially as set out in section 3(d), are relevant in this regard.

[53] It is submitted that, if the company wished to change the agreed arrangements, it should have negotiated this in enterprise bargaining. It didn’t and its attempts to unilaterally alter employees’ terms and conditions should not be condoned.

SUBMISSIONS ON BEHALF OF VISY

[54] A written outline of submissions on behalf of Visy was provided and marked Exhibit Visy 8. Mr Farr also made oral submissions.

[55] Mr Farr supported Mr Walkaden’s submissions in respect of the power of FWA to arbitrate the dispute. He referred to sections 738 and 739 of the Act and noted that clause 23 of the Agreement provides a very wide power to the Tribunal to deal with disputes.

[56] Mr Farr noted that it was clear that there was no written agreement between the parties in respect of either the weekly hours or extra annual leave arrangements. However, he submitted that the evidence of both Mr Suffling and Mr Kingma was that, at the time of the introduction of the present roster, there was no agreement that Visy would pay anything more than the employees’ statutory entitlements. Mr Lord’s evidence also supported this position.

[57] Mr Farr rejected any suggestion that the figure of 52.95 hours had been enshrined by agreement. The company’s primary submission is that mistakes had been made in the original calculations and the employees have had the benefit of those mistakes between 1998 and August 2009 in respect of the extra annual leave and from 1998 to the present in respect of the weekly hours. Mr Farr submitted that the union could not rely on those mistakes to establish that the parties had agreed to the 1998 arrangements.

[58] Mr Farr noted that Visy had raised both issues with the AMWU and the employees in early 2009 and, following a substantial consultation process, as evidenced in Exhibits Visy 1, 2 and 3, implemented the changed annual leave arrangements. Mr Farr emphasised that, despite the company’s view about the accuracy of its weekly hours figure, it had not altered the wages throughout the dispute.

[59] Mr Farr submitted that the union’s contention as to the meaning of clause 4 of Appendix 7 of the Agreement should not be accepted. The words of the clause must be read in the light of the arrangement between the parties which is set out in Exhibit Visy 7. Mr Farr submitted that the Exhibit showed that part of the then existing site arrangement for the paper mill at Smithfield was that the parties were unable to agree on the two issues in dispute and would put the matter to FWA to arbitrate. He submitted that the Agreement must be read subject to that understanding. Mr Farr made the same submission in relation to the reference to “current pay arrangements” in clause 4 of Appendix 6. Mr Farr noted that, if the company’s arguments are accepted, the changed arrangements are to be backdated to the commencement of the Agreement.

[60] Mr Farr made a number of submissions about the calculations and, in particular, refuted the submissions put by the AMWU in relation to the issues of the annual leave loading and overtime rates. Mr Farr submitted that, on the basis of the definitions in the Award, it is clear that the employees are continuous shift workers for all purposes. As a consequence, the provisions of clause 7.1.2(a) cannot apply.

[61] Mr Farr submitted that, on one interpretation, the employees are not entitled to any annual leave loading at all. However, Visy does not press such a position. The company submits that the relevant loading is derived from the shift allowance which is set out in Appendix 6 to the Agreement i.e. 20% for night shift, zero for day shift, an average of 10%. A broad and more beneficial interpretation of clause 7.1.2(b) of the Award sees that 10% shift loading added to the wage rate instead of 17.5%.

[62] Mr Farr disputed the AMWU submission that there is a minimum annual leave loading of 17.5%. He noted that there is no minimum loading set out in the National Employment Standards (NES). Consequently, subject to an enterprise agreement passing the relevant legislative tests, parties can bargain about this issue as they have in relation to this Agreement.

[63] Mr Farr also rejected the AMWU submission about the accuracy of the overtime rates set out in the company’s calculations at Exhibit Visy 5. He noted Mr Kingma’s evidence on this point and submitted that it was entirely consistent with the company’s award obligations.

[64] Mr Farr submitted that the system is an averaging process. It does not require examination of the amount of overtime worked on each shift. Rather, .7 of each shift attracts an overtime premium. If the work takes place on a Monday to Friday shift the premium is calculated at time and a half. If it is worked on Saturday and/or Sunday it is double time.

[65] Mr Farr submitted that the fact that the company’s original calculations were incorrect highlighted the difficulty of the issues. He submitted that Mr Kingma’s evidence had indicated the fundamental flaws in those original calculations.

[66] Mr Farr rejected the union submission that management prerogative was an issue in this matter. The agreement of the parties as to the manner in which the questions were to be determined is set out in Exhibit Visy 7 which speaks for itself.

[67] Mr Farr submitted that the employees were not entitled to receive more than their statutory entitlements. There is no impediment to Visy, having realised its mistake, in seeking to implement the changes. Mr Farr submitted that the company indeed had a mandate to make such changes. It had consulted the employees and the AMWU about the issues. Mr Farr rejected any suggestion that Visy was attempting to exercise an unjust or unreasonable discretion.

[68] Mr Farr submitted that, on the question of fairness, employees had received the benefit of the company’s mistakes for a number of years. Visy was not attempting to recover any money from the employees prior to the agreed date of the commencement of the Agreement.

AMWU SUBMISSIONS IN REPLY

[69] Mr Walkaden noted that the wording of clause 4 of Appendix 6 and clause 4 of Appendix 7 to the Agreement were each in the same terms as the corresponding provisions of the 2007 enterprise agreement. He submitted that this demonstrated that the parties were simply reconfirming their commitment to existing site arrangements with respect to hours of work and current pay arrangements.

[70] Mr Walkaden noted that the AMWU was not suggesting that the employees were not shift workers. Rather the union’s position was that the employees were not shift workers as the term is used in the Award. They do not receive the shift allowance prescribed by clause 6.2.3 of the Award and consequently must receive an annual leave loading of 17.5%. Mr Walkaden noted that the parties had not dealt with the subject of an annual leave loading in the Agreement and had not agreed that it would be a rate which was lower than 17.5%.

[71] Mr Walkaden submitted that the only evidence about the original arrangement was that provided by Mr Lord which showed that there was an agreement between the parties, voted on by the employees. It cannot be characterised as a mistake, an error or an underpayment. The only way in which the parties’ agreement can be changed is through bargaining.

ADDITIONAL MATERIAL

[72] In correspondence to my Associate dated 17 April 2012 Mr Farr drew my attention to a decision of Blair C handed down on that date: SCA Hygiene Australasia Pty Limited v Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia, “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU) and Construction, Forestry, Mining and Energy Union[2012] FWA 2946 (SCA Hygiene). He observed that the decision concerned similar issues to the matter before me.

[73] The AMWU responded in a letter dated 20 April 2012. In that letter Mr Walkaden objected to Mr Farr’s observation, submitted that there were no similarities between the two matters and further submitted that the SCA Hygiene decision should not be considered.

CONCLUSIONS

[74] Before determining the two main issues between the parties I need to consider whether FWA has jurisdiction over the dispute. As indicated earlier in this decision, the application to deal with the dispute was made pursuant to section 739 of the Act. That section provides that it applies if a term referred to in section 738, being a term which provides for a procedure for dealing with disputes, requires or allows FWA to deal with the dispute.

[75] Clause 23 of the Agreement is headed “Dispute Resolution Procedure”. Subclause 23.1 provides that disputes/grievances arising out of the implementation and/or operation of the Agreement and/or its provisions and the operation of the NES shall be dealt with under the procedure. The clause then sets out a staged process for that purpose.

[76] Subclause 23.5 provides that if a matter remains unresolved it may be referred to FWA for conciliation. Subclause 23.6 provides that if a matter is not resolved by conciliation “the parties will submit the matter to arbitration” by FWA.

[77] As noted in paragraph 37 above, the terms of the Award are incorporated into the Agreement by way of clause 4.2. So, to the extent that it is the interpretation of the terms of the Award that is in question, they are terms of the Agreement and consequently covered by the process in clause 23.

[78] There is no issue between the parties as to the way in which industrial instruments are to be interpreted. In the circumstances it is sufficient if I refer to my comments in “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU) v Rheem Australia Pty Ltd[2011] FWA 7602 @ paragraph 71.

[79] I now turn to the first of the substantive issues in the dispute: whether the gross weekly wage for employees should be derived by multiplying the hourly rate set out in the Agreement by 52.95 hours, as submitted by the AMWU, or by 51.98 hours, as submitted by Visy or indeed by some other figure.

[80] I have given careful consideration to all of the evidence and submissions dealing with this issue. I have paid particular attention to Mr Kingma’s evidence as to the manner in which he arrived at the calculations in Exhibit Visy 5 and the flaws that he perceived in the calculations in Exhibit Visy 6.

[81] I consider that there is a degree of uncertainty surrounding the incorporation of the annual leave loading and overtime components of the calculations. I note that, if the annual leave loading is included as 17.5% rather than 10%, the average hours become 52.23. I further note that this figure is very close to Visy’s calculation of 52.25 hours set out in Exhibit Visy 2 which is dated 3 June 2009. The overtime factor would also impact on the average.

[82] In the light of the totality of the material on this issue I consider that the figure of 52.95 is the appropriate multiplier for calculating the employees’ gross weekly wage.

[83] I now turn to the second substantive issue in dispute: whether the present treatment of annual leave is in accordance with the Agreement. There is no dispute between the parties that the employees are receiving their annual leave entitlements. The issue is whether the company’s actions in converting the rostered days off into annual leave are in accordance with the Agreement.

[84] I do not accept the AMWU’s submission that the wording of clause 4 of Appendix 7 of the Agreement prevents Visy from changing the roster arrangements. The oral evidence of Mr Kingma, and the material set out in Exhibit Visy 7 demonstrate that, at least from the company’s perspective, as part of the settlement terms of the Agreement, the parties agreed to refer the two disputed issues to FWA for determination. There is no evidence before me to suggest that the AMWU disagreed that that was part of the settlement.

[85] Whilst it may have been helpful if there had been a note to that effect in the Agreement, I am satisfied that clause 4 of Appendix 7 is to be read subject to Exhibit Visy 7. It follows that, in changing the leave arrangements in the roster, the company was not acting in a manner which is contrary to the Agreement. I note in passing, although this has no bearing on my decision, that as of August 2009 when the changes were made, the Agreement did not exist. The 2007 agreement was in place at that time.

[86] I do not consider that Visy’s actions were unjust or unreasonable. Exhibits Visy 1, 2 and 3 are evidence of the company’s attempts to engage with employees and the AMWU about the issues which arose out of the audit. It is true that, as a result of the new arrangements, employees have lost some flexibility in their leave arrangements. However, this needs to be balanced against the fact that the employees had received those extra days for a period of eleven years when, strictly speaking, they were not entitled to them.

[87] In summary my conclusions are:

1. The multiplier for the purposes of calculating the gross weekly wage is 52.95 hours;

2. The present treatment of annual leave entitlements under the roster is not in conflict with the Agreement.

[88] I determine accordingly.

COMMISSIONER

Appearances:

A. Farr, solicitor, for Visy Paper Pty Ltd trading as Visy Recycling

A. Walkaden for the “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU)

Hearing details:

Sydney.
2012.
April, 3.

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