[2011] FWA 1891 |
|
DECISION |
Workplace Relations Act 1996
s.170LW - pre-reform Act - Application for settlement of dispute (certified agreement)
Textile, Clothing and Footwear Union of Australia
v
Tuftmaster Carpets Pty Ltd
(C2011/3332)
Textile industry | |
COMMISSIONER GOOLEY |
MELBOURNE, 31 MARCH 2011 |
Alleged dispute concerning the use of stand down provisions.
[1] The Textile Clothing and Footwear Union of Australia (the TCFUA) applied on 16 February 2011 for Fair Work Australia to deal with a dispute between it and Tuftmaster Carpets Pty Ltd (Tuftmaster) in accordance with a dispute resolution procedure in an agreement. The matter was listed for conciliation on 23 February 2011 but the dispute was not resolved.
[2] The application was referred to arbitration and directions were issued for the filing of submissions. The matter was heard on 8 March 2011.
[3] Mr Malcolm Harding of Counsel appeared on behalf the TCFUA and Mr Anthony Dalton of the Australian Industry Group appeared for Tuftmaster.
Preliminary matters
[4] Mr Dalton opposed permission being granted to Counsel for the TCFUA to appear. The TCFUA filed an affidavit of Ms Michele O’Neil the National Secretary of the TCFUA in support of its application for Mr Harding to be granted permission to appear. In that affidavit Ms O’Neil deposed that the National Industrial Officer of the TCFUA who normally appeared for the Victorian Branch of the TCFUA before Fair Work Australia was on leave and that the Victorian Branch’s Industrial Officer had a pre-arranged conflicting commitment and that as Ms O’Neil was a witness in the proceeding she was not able to appear.
[5] Mr Dalton submitted that the matter was not one of any complexity. Further he submitted that the TCFUA had not demonstrated its good faith by not advising Tuftmaster as soon as possible that it was to be legally represented and that this meant that Tuftmaster did not have sufficient time to arrange legal representation for itself. Mr Dalton also submitted that he was not legally trained or qualified.
[6] Mr Harding submitted that the matter before the Tribunal was significant. Further he submitted that how a stand down clause is construed is a matter of law and that goes to the question of complexity. Further he relied upon the evidence of Ms O’Neil that the TCFUA’s normal representatives were not available and having Ms O’Neil as both witness and advocate would not be efficient. Mr Harding submitted that Tuftmaster had been on notice since the filing of the TCFUA material that the TCFUA was legally represented and given Mr Harding signed the outline of submission Tuftmaster cannot be surprised that Mr Harding sought permission to appear.
[7] I determined to grant Mr Harding permission to appear. I did so because it would have been unfair not to allow the TCFUA to be represented as the TCFUA had no industrial officer available to represent it and Ms O’Neil could not be expected to be both witness and advocate. Given the urgent nature of the matter before the Tribunal I did not consider it appropriate to adjourn the proceedings. I further did not accept that Tuftmaster would be prejudiced by the appearance of Mr Harding in this matter. Mr Dalton is an experienced representative and is capable of representing the interests of his member in this matter.
The matter in dispute
[8] Tuftmaster is a manufacturer of carpets and operates a factory in Cope Street Preston. 1 On 8 January 2011 there was a fire in the northern building of the factory (the top mill) which houses the samples department and the dye house. There was significant damage to the building, machinery housed within the building and to stock held in the building.2
[9] The southern building (the bottom mill) on the site which houses the other operational areas of the factory including administration, warehouse, tufting and finishing was not affected by the fire. 3
[10] Employees were on annual leave at the time and were due to return to work on 17 January 2011. Employees were advised by letter dated 10 January 2011 of the fire and the consequences for them.
[11] In the top mill, six employees were employed in the dye house, 43 employees were employed in spinning, one employee was employed in samples and four employees were maintenance employees. 4
[12] In the bottom mill, 25 employees were employed in tufting, two employees were employed in quality control, eight employees were employed in finishing and five employees were employed in the warehouse. 5
[13] Employees who worked in the top mill were notified that they were stood down “under the relevant provisions of the Enterprise Agreement/Award and Fair Work Act 2009. 6” The employees were advised that the period of the stand down was unknown and that employees could access annual leave or if they had more than eight years service they could access their long service leave. 7
[14] Employees who worked in areas unaffected by the fire were informed that they would return to work as scheduled.
[15] On 17 January 2011 a meeting was held between Tuftmaster and the TCFUA and Tuftmaster advised the TCFUA that it would have to stand down employees in the top mill due to the fire. The employees in the bottom mill were employed full time for five-six weeks after the fire using yarn that had been in storage. After that time there was insufficient work for employees to work full time and they worked on a part time basis or in other words were stood down for part of the week. Tuftmaster sourced yarn from New Zealand which at the time of the hearing had started arriving and it was anticipated that within a week or two the bottom mill would be back in production and the employees would return to their normal work. 8
[16] At the date of the hearing approximately 40 employees had been stood down from full time work and were only being offered part time work and 50 workers had been stood down from all work. 9
The industrial instrument
[17] The TCFUA and Tuftmaster are parties to and bound by the Tuftex-TCFUA Certified Agreement 2004 (the Agreement). 10
[18] The Agreement was certified pursuant to section 170LT of the Workplace Relations Act 1996 on 26 May 2005.
[19] The Agreement at clause 7 provides for the resolution of disputes as follows:
“7. DISPUTES / GRIEVANCE PROCEDURE
7.1 If an employee or shop steward has any grievance or complaint concerning any matter connected with employment or job conditions, they should first submit it to a supervisor or manager.
7.2 If the matter is not resolved to the satisfaction of the employee or TCFUA representative, the grievance or complaint should be referred to the manufacturing or human resources manager.
7.3 The matter will be discussed between the union representative and the appropriate manufacturing or human resources manager.
7.4 If the matter is not settled between the union representative and the appropriate executive of the employer the matter may then be referred by the Shop Steward to the Secretary of the TCFUA and a meeting will be arranged between the employer and if the employer so desires his or her Association and the TCFUA and a conference will take place as soon as possible.
7.5 If the matter is not settled in accordance with sub-clause 7.4 of this clause the matter may be referred by either party to the Australian Industrial Relations Commission for conciliation and/or arbitration. Where the dispute is arbitrated by the Commission, both parties will accept the decision of the Commission as final determination of the dispute, subject to normal appeal rights under the Act.
7.6 Where the above procedures are followed work will continue normally. No party will be prejudiced as to the final settlement by the continuance of work in accordance with this sub-clause.
7.7 Notwithstanding anything contained in the preceding sub-clauses of this clause, the parties will be free to exercise their rights if the dispute is not finalised without reasonable delay.
7.8 This clause will not apply to any dispute as to a bona fide safety issue.”
[20] The Agreement provides at clause 9 as follows:
“9. RELATIONSHIP TO PARENT AWARDS AND OTHER AGREEMENTS
9.1. This agreement will be read in conjunction with the Textile Industry Award 2000 (“the 2000 Award”). In the event of any inconsistency, the terms of this Agreement will prevail over the 2000 Award to the extent of any inconsistency.
9.2. It is agreed between the parties that the existing Award provisions as they stood at 30 June 1998 under the Textile Industry Award 1994 (“the Award”) (Attachment A) will be the minimum conditions to apply to all employees (and future employees) employed by the Employer, (excepting Clause 45, Preference of Employment shall not apply).
9.3. Attachment A will form part of this Agreement and will operate in conjunction with other provisions of this Agreement. To the extent that the terms of Attachment A is inconsistent with any other provision of this Agreement then that other provision will prevail over Attachment A to the extent of the inconsistency.
9.4. Every reference in Attachment A to “an employer” or to a “respondent to this Award” or to a “respondent employer” shall be construed as a reference to the Employer.”
[21] It is not disputed that the relevant clause in dispute is clause 22 of the Textile Industry Award 1994 (the 1994 Award) 11 as it stood at 30 June 1998.
[22] The 1994 Award at clause 22 provides as follows:
“(a) Employment in the industry covered by this award shall be by the week, except in the case of part-time workers.
(b) An employee to become entitled to payment under this award shall be ready, willing and available for work at the times and during the hours usually worked by him.
Provided that any employee starting work shall be entitled to at least one half day’s pay and any pieceworker to one half day’s work.”
[23] Clause 22(c) deals with termination of employment.
[24] Clause 22(d) of the 1994 Award provides for the standing down of employees as follows:
“(i) Notwithstanding anything elsewhere contained in this clause, the employer shall have the right to deduct payment for anytime the employee cannot be usefully employed because of any strike or through any breakdown of machinery or any stoppage of work by any cause for which the employer cannot reasonably be held responsible.
(ii) Employees may be stood down at any time when no work is offering subject to the following procedure:
(1) (A) Prior to any stand-down there is consultation with the relevant
employees including the duration and reason(s) for the stand-down, the number of employees affected and arrangements for ongoing communications between the employees, the Textile, Clothing and Footwear Union of Australia (TCFUA) and the employer;
(B) There is agreement between the affected employees and the
Employer;
(C) The TCFUA is advised prior to the proposed stand-down and
details thereof; and
(D) There is agreement in writing between the relevant State Secretary or his or her representative of the TCFUA and the employer prior to the proposed stand-down. The union will not unreasonably delay the process or withhold its agreement.
(2) An employer and the relevant State Secretary of the TCFUA or his or her representative may adopt a different procedure in writing than that contained in subparagraph (1) hereof.
(3) Provided that, when a weekly employee has been given notice of termination, he shall not be stood down when no work is offering.
(4) Provided also that such standing down of an employee shall not break the continuity of service for the purpose of annual leave, holidays and sick leave. Employees cannot be stood down due to a lack of work on a public holiday. Employees’ entitlements in respect of accrual of annual leave, sick leave and public holidays shall not be reduced as a result of being stood down.
(5) In the event of a dispute arsing in respect of a stand down due to lack of work, the employer or the TCFUA may refer the matter to the Australian Industrial Relations Commission to have the matter resolved.”
[25] The remaining subclauses are not relevant to this application.
History of the Clause
[26] In the proceeding neither party made any submissions about the history of the clause though Tuftmaster tendered an order 12 made by Commissioner Cargill on 2 May 1996 which varied the Textile Industry Award 1981 (the 1981 Award).
[27] That order varied the 1981 Award to include the clause now found in the 1994 Award. Lest there be confusion on this, while called the 1994 Award this award was not in fact made until June 1996.
[28] I made this file available to the parties and gave leave to the parties to make further submissions.
[29] The TCFUA filed further submissions on 11 March 2011. Tuftmaster did not file any further submissions.
[30] In its further submissions, TCFUA traced the history of the stand down clause in the textile industry industrial awards.
[31] Prior to Commissioner Cargill’s order the relevant clause in the 1981 Award was as follows:
“22(d) Notwithstanding anything elsewhere contained in this clause, the employer shall have the right to deduct payment for any time the employee cannot be usefully employed because of any strike or through any breakdown of machinery or any stoppage of work by any cause for which the employer cannot reasonably be held responsible, or for a stand down of employees at any time when no work is offering. Provided that, when a weekly employee has been given notice of termination, he shall not be stood down when no work is offering.”
[32] The application made by the TCFUA in 1995 was to delete clause 22(d) and replace it with the following clause:
“Notwithstanding anything elsewhere contained in this clause, the employer shall have the right to deduct payment for any time the employee cannot be usefully employed because of any strike or through any breakdown of machinery or any stoppage of work by any cause for which the employer cannot reasonably be held responsible other than on account of lack of orders and/or a shortage of material.”
[33] The application was opposed and set down for arbitration. The arbitration did not occur as the parties had reached an agreement on the proposed variation.
[34] At the hearing, after consent had been reached, it was said by the TCFUA’s advocate that the purpose of the amendment “was to rectify what the union believed was the unfair reliance on those particular provisions or those particular words by certain employers; certainly not the bulk of the industry; but some employers have been less than fair in their dealings with their employees and the union previously when the employer believed no work was offering.” 13
[35] The advocate for the TCFUA then submitted that the new clause “involves a process where an employee may be stood down at any time when no work is offering subject to a particular procedure.” 14 The respondents to the application did not put any contrary submissions to the Commissioner.
[36] The order made by Commissioner Cargill was made by consent.
[37] No evidence was called and no submissions were made about the intention of the parties in including this clause in the Agreement.
Jurisdiction of Fair Work Australia
[38] It is not disputed that Fair Work Australia is able to resolve this dispute 15.
Characterisation of the dispute
[39] The parties are in dispute over whether Tuftmaster was entitled to stand down the employees. 16
Submissions and evidence of the Applicant
[40] The TCFUA relied upon the witness evidence of Ms O’Neil. 17 Mr Dalton objected to the acceptance of this evidence as it was filed the day before the hearing and after Tuftmaster had filed its material. I determined to allow the TCFUA to call Ms O’Neil as her evidence was responsive to the evidence filed by Tuftmaster and the matters deposed were within the knowledge of Tuftmaster and in any event there were few, if any, relevant factual matters in dispute.
[41] Further the TCFUA relied upon a number of authorities and Mr Dalton objected to the provision of those authorities to the Tribunal as they had not been referred to in the TCFUA’s outline of submissions. I determined to permit the TCFUA to rely on the authorities.
[42] The TCFUA submitted that it was incumbent on the Respondent to justify the stand down. 18 The TCFUA submitted that at all times the employees were ready, willing and available for work.19
[43] The TCFUA submitted that the obligation to pay wages under the Agreement arose unless the Respondent could establish that the preconditions set out in clause 22(d) (i) were met and the procedures set out in clause 22(d) (ii) were followed. The TCFUA submitted that as the procedures in clause 22(d)(ii) were not complied with, and this is not in dispute, Tuftmaster were obliged to pay wages to the employees for the period that the employees were ready willing and available for work.
[44] The TCFUA submitted that clause 22(d)(i) gave Tuftmaster the right to deduct payment if the conditions precedent in the clause were met. However the right to stand down the employees came from clause 22(d)(ii) and that arose when “no work is offering”. The TCFUA submitted that the reason no work may be offering is not limited by the circumstances set out in clause 22(d) (ii). However they submitted that employees can only be stood down if the procedures in 22(d) (ii) (1) are followed.
[45] The TCFUA submitted that as the procedures in 22(d) (ii) (1) were not followed the stand down was ineffective and the employees are entitled to be paid their wages.
[46] The TCFUA sought the following orders:
“1. In this Order, the expression “affected employees” shall mean any employee stood down at the direction of the respondent from 17 January 2011.
2. The Respondent is not and never was permitted by sub-clauses 22(d)(i) or (ii) of the Textile Industry Award 1994 (the Stand Down Clause) as incorporated into the Tuftex-TCFUA Certified Agreement 2004 to:
(a) stand down an affected employee
(b) deduct any amount or refuse payment of such wages as would otherwise be payable by the Respondent to an affected employee under the terms and conditions of their employment for their usual work.
3. The Respondent is hereby directed:
(a) not to rely on the Stand Down Clause to deduct any amount from or refuse payment of such wages as would otherwise be payable to an affected employee under the terms and conditions of their employment for their usual work; and
(b) not to rely on the Stand Down Clause to request or require or to continue to require an affected employee to use any form of paid leave in lieu of such wages as would otherwise be payable to an affected employee under the terms and conditions of their employment for their usual work.”
[47] The effect of this order would be that employees would be entitled to be paid from 17 January 2011.
[48] Further the TCFUA submitted that, while it was not part of their submissions that the Tribunal determine if the employees were redundant, the following recommendation should be made:
“To assist in further resolution of issues arising as a result of the Order, the Tribunal makes the following recommendation:
1. In order to mitigate adverse effects, in the event the workers are made redundant, I recommend Tuftmaster puts out a general call for voluntary redundancies. This provides an opportunity for workers in the top mill who are eligible for redundancy but wish to remain employed to swap with workers in the bottom mill who wish to take redundancy.
2. Those workers who volunteer for redundancy receive their full entitlements as per the current enterprise agreement including recognition of service for the period of ‘stand down’.
3. In the event fire damaged departments of the mill re-open, those workers who have taken redundancy are those workers who have taken redundancy are those first offered re-employment on the basis of being treated as a new employee (ie there is no claim for previous service to be considered).”
Submissions and evidence of the Respondent
[49] Tuftmaster relied upon the evidence of Mr Brian Grace the Human Resources Manager. 20
[50] Tuftmaster submitted that the construction of clause 22(d) proposed by the TCFUA was not correct. Tuftmaster submitted that in this matter only clause 22(d)(i) was relevant as the employees employed in the top mill cannot be usefully employed because of a “stoppage of work by any cause for which the employer cannot reasonably be held responsible”, in this case, the fire. Further it was submitted that the employees in the bottom mill cannot be usefully employed on a full time basis because of the fire.
[51] Tuftmaster submitted that the construction put forward by the TCFUA would require the consent of the employees on each and every occasion there was a stand down and “clearly that is not the history of these cases, not the history of the Commission, not the history of this clause in any way, shape or form.” 21
[52] Tuftmaster, while accepting that the relevant clause was clause 22(d) in the 1994 Award, submitted in support of its construction of the clause, that regard could be had to the equivalent provision in the Textile Industry Award 2000. The equivalent clause they submitted provided that the only circumstances in which the procedures sought to be relied upon by the TCFUA in this matter must be followed is when “no work is offering.” 22
[53] Tuftmaster made submissions that employees were not redundant, and further, Tuftmaster opposed the making of the orders and recommendation sought by the TCFUA.
[54] Tuftmaster accepted that the stand down clause did not permit the employer to stand down employees indefinitely. It was submitted that the length of the stand down was able to be determined by the Tribunal and is “subject to the discretion of the Commission in the circumstances that apply to each particular matter.” 23 It was submitted that the Tribunal should determine that “the stand down provisions were applied lawfully and what sort of period that may apply for.”24
Principles of construction
[55] Vice President Lawler set out detail in Watson v ACT Department of Disability Housing and Community Services the legal principles to be adopted when construing awards and agreements. 25 A Full Bench in The Australian Workers’ Union - West Australia Branch v Co-operative Bulk Handling Limited26 cited Vice President Lawler with approval and made reference to the decision of Logan J in Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v QR Limited.27 Logan J said:
“The starting point must always be the language employed by the parties to an industrial agreement but industrial context and purpose are always relevant when construing that language.”
[56] The Full Bench concluded that “the extract from Watson and the approach of Logan J, inform the manner in which we approach the test of construing the agreement and leads to the conclusion that regard must be had to extrinsic material in order that the meaning of the clause in question may be properly understood.”
[57] I adopt the approach endorsed by the Full Bench.
Conclusion
[58] I do not accept the construction of clause 22(d) put forward by the TCFUA. I do not consider that the procedural requirements set out in 22(d)(ii)(1) apply to stand downs which arise from the circumstances described in clause 22(d)(i). I do not accept the submissions of the TCFUA that clause 22(d)(i) is not a stand down provision but simply a provision that relieves the employer of their obligation to pay wages.
[59] The standard stand down clause included in many awards was expressed in similar terms to that in clause 22(d)(i). For example the Metal Industry Award 1984 provided as follows:
“The employer shall have the right to deduct payment for any day the employee cannot be usefully employed because of any strike or through any breakdown in machinery or any stoppage of work by any cause for which the employer cannot reasonably be held responsible.”
[60] Applying the TCFUA’s construction, this clause would not authorise the stand down of employees. I do not accept this construction.
[61] Clause 22(d)(i) enables the employer to stand down employees in circumstances which are beyond the control of the employer.
[62] Clause 22(d)(ii) enables the employer to stand down employees when no work is offering provided the procedure set out is followed. For example it would permit the stand down of employees when there was a lack of orders.
[63] If the construction put forward by the TCFUA were correct then clause 22(d)(i) would have no work to do as it is totally encompassed by clause 22(d)(ii).
[64] Support for this construction is found in the variation made by consent to the 1981 Award.
[65] In applying to vary the 1981 Award the TCFUA did not seek to impose conditions on stand downs which occurred for reasons beyond the employer’s control. It sought to prevent employers standing down employees when no work was offering presumably for reasons which included circumstances which were within the employer’s control. The consent position arrived at provided for a procedure to be followed in those circumstances.
[66] Further support for this construction can be found in the Textile Industry Award 2000 (the 2000 Award) which was made as a result of the award simplification process. Stand down was an allowable matter and the provision included in the 2000 Award neither added to or diminished the circumstances in which an employee could be stood down. Clause 23 of the 2000 Award clearly provides, that the circumstances in which there must be agreement about the stand down is limited to “any time when no work is offering”. There is a quite separate right for the employer under the 2000 Award to deduct payment for “any stoppage of work by any cause for which the employer cannot reasonably be held responsible.”
[67] Subsequent disputes notified to the Australian Industrial Relations Commission have arisen over the application of clause 22(d)(ii) and have dealt with situations where there was “a lack of work and subject to customer order levels” 28 or “a shortfall in orders because of cheaper imports, a rising dollar and a soft domestic market.”29 The parties were not able to point to any decision of the Tribunal or the Australian Industrial Relations Commission dealing with disputes over stand downs in circumstances set out in clause 22(d)(i).
[68] I have therefore concluded that the stand down of employees was permitted by the Agreement.
[69] However it is clear that the clause does not permit the indefinite stand down of employees. Stand downs are by their nature temporary. In the Award Simplification case the Australian Industrial Relations Commission reviewed the 1994 Award 30 and refused to subject the stand down provisions to the facilitative clauses in the simplified award and said “the concept and rationale for a stand down provision, in my opinion, is to address a specific situation and/or event. It should not have a continuing application or life. Therefore, flexibility in its application does not or should not arise.”
[70] In this case the employees in the top mill have been stood down since 17 January 2011. At the time of the hearing there was no indication of when these employees would return to work. The employees in the bottom mill have been stood down on an intermittent basis since approximately the end of February.
[71] I do not consider that the Agreement permits the employer to stand down employees indefinitely. Tuftmaster agreed with this proposition. 31
[72] The question then to be determined is how long can Tuftmaster stand down its employees? Tuftmaster submitted that that this must be determined on the facts and circumstances of the particular case. The Tribunal must “adopt a course which is both fair and just in the circumstances to both the employer and the employees.” 32
[73] Tuftmaster submitted that ending the stand down of employees will have significant financial costs particularly if the employees are made redundant. 33 The TCFUA submitted that the stand down is having a significant impact on employees. Ms O’Neil gave unchallenged evidence that employees face difficulty in finding alternative employment.
[74] I have formed the view that the period of the stand down for the employees employed in the top mill must be ended by 7 April 2011.
[75] At the hearing I was advised that the employees in the bottom mill would return to work within a couple of weeks of the hearing. Consequently I do not propose to make any determination about the length of their stand down.
[76] If these workers have not returned to work as normal by the 7 April 2011 I give the TCFUA liberty to apply for further orders.
[77] I do not propose to make the recommendation sought by the TCFUA. I do however recommend that the TCFUA and Tuftmaster meet to discuss the consequences of this determination.
COMMISSIONER
Appearances:
Mr Malcolm Harding for the Textile Clothing and Footwear Union of Australia.
Mr Anthony Dalton for Tuftmaster Carpets Pty Ltd.
Hearing details:
2011.
Melbourne:
March 8.
1 Respondent’s outline of submissions at [1]
2 Ibid at [5]-[6]
3 Ibid at [7]
4 Exhibit TCFUA 2 at [9]
5 Ibid at [10]
6 Ibid attachment 1
7 Ibid attachment 1
8 Exhibit TC 1 at [10]
9 Exhibit TCFUA 2 at [15]
11 T0007
12 Print N0519
13 C 38959 of 1995 Transcript page 8 at line 30
14 Ibid page 9 at line 2
15 Outline of submissions of the TCFUA 2 March 2011 at [2]-[4]
16 Transcript PN 69
17 Exhibit TCFUA 2
18 Written submissions of the TCFUA at [8]
19 Ibid at
20 Exhibit TC 1
21 Transcript PN 514
22 Submissions of Tuftmaster at [50]-[52]
23 Transcript PN 490
24 Ibid PN 525
25 [2008] AIRC 29 at [7]-[15] and
27 [2010] FCA 591 at [39]
28 TCFUA v Synthetic Dyeworks Industries Pty Limited Print R5242 at [4]
29 Bruck Textiles Pty Ltd TCFUA v TCFUA [2007] AIRC 921 at [12
30 Review of award pursuant to Item 51 of Part 2 Schedule 5 of the Workplace Relations and Other Legislation Amendment Act 1996 Print R1336 at 11.
31 Submissions of Tuftmaster at [34]
32 Ibid at [35]
33 Ibid at [31] and [32]
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