| [2015] FWC 6350 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.739 - Application to deal with a dispute
National Union of Workers
v
Onesteel Metalcentre
(C2015/4464)
COMMISSIONER ROE |
MELBOURNE, 15 SEPTEMBER 2015 |
Resolution of dispute in accordance with the dispute resolution procedure of the One Steel Distribution Agreement 2014-2015. Dispute concerning the arrangement of ordinary working hours.
[1] This dispute is about the organisation of ordinary hours of work. Since the 1980s the workers at the Western Australia processing and distribution centre have worked the 38 hour week with two hours per week accumulating towards an 8 hour RDO in each four weeks. RDOs accumulate and can be taken at a mutually agreed time or in accordance with a roster. This was the practice when the business was owned by Email and covered by the Email Metals Distribution Enterprise Agreement 1999-2001 and it continued after One Steel acquired the business in April 2001. The shifts are non-rotating shifts with Day shift from 6.30am to 3pm, Afternoon shift from 2.30pm to 11pm and Night shift from 10.30pm to 7am. There are two main areas of work: processing and distribution.
[2] The company propose to do away with the RDO system and have shifts operating as follows: Day shift 6.30am to 2.36pm; Afternoon shift 2.30pm to 10.36pm and Night Shift 10.30pm to 6.36am. The changes are proposed to meet changed business circumstances. One Steel say that there is operationally a reduced need for overlap time between shifts and that the current time is not productive and not required by the business. One Steel also requires changed employee numbers at particular times.
[3] There has been an extensive period of consultation about the proposed changes. The business case for the changes is not in dispute. A majority of the employees oppose the change. The company have agreed to pay a lump sum in compensation to each affected employee if the changes are introduced.
[4] Conciliation before the Fair Work Commission did not resolve the matter. The parties agree, and I am satisfied, that the dispute is a matter within the scope of the disputes settlement procedure of the One Steel Distribution Agreement 2014-2015 (the Agreement) and that the relevant steps of the procedure have been followed and that I can and should arbitrate a resolution to the dispute.
[5] I have had regard to a Statement of Facts which was agreed between the parties, the written submissions of the parties and the uncontested evidence of three employees.
[6] The NUW submit that the changes cannot occur in the manner proposed without the agreement of the employees concerned. The NUW argues that the hours of work arrangement including the accrual and entitlement to an RDO is an established custom and practice as well as an implied term of each employee’s contract of employment. The NUW also argue that the Agreement does not contemplate or allow the change as proposed. The NUW say that the clause which provides the capacity to change shift rosters does not permit disturbance of the agreed pattern of hours of work and days of work.
[7] One Steel asserts that subject to the required notice period specified in the Agreement it is entitled to introduce the change. One Steel argue that there is no basis to incorporate the right to an RDO as an implied term of the employee’s contract of employment.
[8] The relevant clauses of the Agreement are:
“4.2 Savings Provision
No employee will as a result of the making of this Agreement, suffer any loss of wages or other benefits to which the employee is entitled prior to the date of the coming into operation of this Agreement except where specifically provided for by this Agreement.
6.2 Relationship to Other Agreements
This Agreement shall supercede the OneSteel Distribution Agreement 2011 ~2014 provided that all rights, liabilities and obligations accrued or incurred under the above agreement shall not be affected unless specifically provided for herein.
20. HOURS OF DUTY
20.1 Ordinary hours of work will be an average of 38 per week worked on one of the following bases:
20.1.1 Ordinary hours will not exceed 10 hours on any day and if more than 10, then after consultation and agreement of the majority of employees concerned.
20.1.2 The ordinary hours of work may be worked on any one day or all of the days of the week, Monday to Friday.
21. STARTING AND FINISHING TIMES
21.1 Ordinary hours of work will be Monday to Friday inclusive from 6.00a.m. to 6.00 p.m. or otherwise as agreed between the employer and the employees affected. Agreement will not be unreasonably withheld.
21.2 Starting and finishing times may be altered with 7 days notice to the employees. Such notice shall be in writing unless agreed otherwise at the workplace.
21.3 However, in an emergency, starting and finishing times may be changed immediately by agreement between the employer and the employees affected. This may only occur once per month. Where requested, an employee’s representative which may include the Union will be notified in writing as soon as possible of any change.
26. SHIFT WORK
26.1 Hours
Employees may be required to work shift based upon the following conditions:
26.1.1 ordinary hours for shift workers will consist of an average 38 hours per week and not more than 152 hours in 28 consecutive days;
26.1.2 the ordinary hours of shifts may be worked between Monday and 8.00 a.m. Saturday, unless otherwise agreed between the majority of employees and the employer.
26.1.3 shifts will be arranged so that by rotating shifts at least one third of the time is day shift, unless otherwise agreed between the employee and / or the employee’s nominated representative which may include the union and the employer.
26.2 Definitions of Shifts
26.2.1 “Afternoon shift” means any shift finishing after 6.00 pm and at or before midnight.
26.2.2 “Night shift” means any shift finishing after midnight and at or before 8.00 am.
26.2.3 In the event of any ambiguity about the definition of a shift the span of hours, in which the majority of hours are worked will define the shift, provided that the status quo as to the definition of a shift applies at worksites working shifts as at the date of approval of this Agreement.
26.3 Shift Allowance
26.3.1 When afternoon or night shifts rotate so that employees have at least one third of their time on day shift in each work cycle, a shift allowance of 15% additional to the classification rate will be paid.
26.3.2 Employees working on any non-rotating afternoon shift will be paid a shift allowance of 20% more than their classification rate.
26.3.3 Employees working on any non-rotating night shift will be paid a shift allowance of 30% more than their classification rate.
26.3.4 Employees who work ordinary shifts on a public holiday will be paid at the rate of double time and a half.
26.3.5 Shift workers will be given an unpaid meal break of 30 minutes. However a break of less than 30 minutes will be counted as time worked but no meal break will be less than 20 minutes.
26.3.6 The employer will roster shifts at least 48 hours in advance. Shift rosters may be changed by agreement between the employer and the employee and / or where requested, their nominated representative which may include the Union, or with 7 days notice. However in cases where a change is required due to circumstances outside the control of the employer, the roster may be changed by giving 24 hours notice.
26.3.7 Employees may be transferred to or from shift work with 14 days notice or may have their shift altered with 14 days notice or where sudden or unforeseen circumstances arise, with 24 hours notice.
26.3.8 During temporary shift changes employees will retain their normal shift earnings provided that;
(a) the temporary shift change is at the initiation of the employer to meet operational requirements, roster coverage and training needs;
(b) the temporary shift change is not ordinarily more than 4 weeks and as advised in advance; and
(c) retention of shift earnings shall not apply where the temporary shift change is as a result of the employer having insufficient work to maintain or warrant normal shift operations (e.g. due to lack of sales or disruption to business)”
[9] One Steel argue that I am not permitted to consider this issue as part of the resolution of this dispute. They point to Section 739(5) of the Act which prevents a decision which “is inconsistent” with the terms of the Agreement. They argue that because the Act prevents me from making a determination which is contrary to the Agreement, if the Agreement permits something to be done then I cannot make a determination that it cannot be done.
[10] The dispute is about whether or not the RDO arrangement can be altered without agreement. The disputes settlement clause allows for the resolution of disputes on “matters arising under this Agreement”. This is a broader scope than the application or interpretation of the Agreement. The contracts of employment may be relevant to the resolution of a dispute arising under the Agreement about whether or not and how the RDO arrangement can be altered. If the proper interpretation of the Agreement is that it provides that the RDO can be removed without agreement or majority agreement then One Steel are correct; I cannot make a determination which would prevent this occurring. If I do not make such a positive finding then I could resolve the dispute having regard to equity, good conscience and the substantive merits of the case.
[11] I accept that the contracts of employment may be relevant to understanding whether or not there is an implied term of the Agreement and/or to the context relevant to the proper interpretation of the Agreement. The NUW accept the One Steel submission that for a term to be implied in an agreement because of custom and practice each of the following conditions must be satisfied:
● It must be reasonable and equitable;
● It must be necessary to give business efficacy to the contract so that no term will be implied if the contract is effective without it;
● It must be obvious that “it goes without saying”;
● It must be capable of clear expression; and
● It must not contradict any express term of the contract.
[12] I have had regard to the long history of the provision and the expectations of employees as demonstrated in the employee evidence. I accept the submission of One Steel that the express term of the employment contracts of at least 11 current employees provide that hours of work will be in accordance with the relevant Award or Agreement.
[13] I am satisfied that the term is not so obvious that it goes without saying. I am satisfied that the contract has business efficacy without the RDO term.
[14] I am not satisfied that the right to an RDO is an implied term of the contracts of employment.
[15] I do not accept the submission of One Steel that the object of the Fair Work Act concerning efficiency and productivity is of any particular assistance in determining the proper meaning of these clauses of the Agreement. The legislative context is of course a relevant consideration, however, I am not satisfied that it is appropriate to select one object in isolation from others. Furthermore, I am not satisfied that it was the mutual intention of the parties that the Agreement should be read in the context of a particular object of the Act. I also do not accept the submission of One Steel that unless the Agreement prohibits the change I cannot make a decision which interferes with the One Steel proposal. I am empowered by the Agreement to resolve the dispute and the only restriction upon that in the circumstances of this case is that I cannot make a decision which is inconsistent with the terms of the Agreement.
[16] The parties cannot find any written record of the agreement or arrangements concerning the introduction of the RDO system. The parties agree that the system has been in existence since around 1990. The system was extended to cover all employees when the business was consolidated after the purchase of the Email Metals business by One Steel in 2001 or 2002. The NUW submit, and I accept, that the Email Metals Distribution Enterprise Agreement 1999-2001 applied to employees prior to the acquisition of the business by One Steel. I accept the evidence and submissions of the NUW that the 1999 Agreement provided that one option for working the ordinary hours for day workers was to take an RDO as part of a four week cycle. Where that option was utilised the 1999 Agreement provided conditions for the taking of the RDOs and for their accumulation. This was not the only available arrangement for the working of ordinary hours in the 1999 Agreement.
[17] The parties agree that none of the subsequent industrial instruments after the 1999 Agreement make any mention of the RDO arrangement. The subsequent instruments were reached with One Steel and their hours of work provisions are largely consistent with the provisions in the current Agreement.
[18] I am satisfied that Clauses 20 and 21 apply to the day shift workers and Clause 26 applies to the afternoon and night shift workers.
[19] I am satisfied that Clause 20 expressly permits the 38 hour week to be worked on the basis of 152 hours within 28 days. This clearly permits the current roster system for day shift which includes an RDO. However, Clause 20 also allows for 38 hours within 7 days which would clearly permit the roster proposed by One Steel. There is nothing in the Agreement which prevents changes between the relevant options for the organisation of ordinary hours of work subject to consultation and notice provisions. The plain or ordinary meaning of a clause of this sort is that it permits change between the relevant options subject to any other provisions of the agreement. In some circumstances a clause which provides the options which will be utilised can be read as meaning that an option once selected cannot be altered except by agreement. However, in this case there is nothing in the other provisions of the Agreement which suggest that the clause should be read as meaning that the option once selected cannot be altered except by agreement.
[20] Clause 21 provides that “Starting and finishing times may be altered with 7 days notice to the employees.” I am satisfied that this means that, provided the alteration is within the permitted spread of hours, the start and finish time may be altered with the appropriate notice. Consultation provisions will also need to be satisfied but I am satisfied that these requirements have been satisfied by the long period of intensive consultation which has occurred about this significant change. The NUW argues that the words mean that changes can only be made if both the start and the finish times are changed. This would not prevent the start time being changed by more than the finish time or vice versa and hence the NUW’s reading would not prevent changes to start and finish times to remove the RDO. However, I am satisfied that, having regard to the context of the surrounding clauses, to read the clause as preventing a change which did not involve both start and finish times would be narrow and pedantic. The ordinary meaning of the words considered in context is that both start and finish times can be altered within the spread following appropriate notice. The word “and” is used in an inclusive sense.
[21] I am satisfied that start and finish times are a narrower and different concept to the method of organising the ordinary hours of work. Generally however a change between the specified options for organising the ordinary hours of work will require or be accompanied by a change to the start and finish times. The provisions of Clause 21 do not prevent changes between the specified options in Clause 20. In many cases the provisions of Clause 21 will need to be complied with in making a change between the specified options in Clause 20.
[22] I am also satisfied that both the current arrangements and the proposed arrangements meet the shift work ordinary hours prescription that “ordinary hours for shift workers will consist of an average 38 hours per week and not more than 152 hours in 28 consecutive days” (Clause 26). Clause 26 then provides that:
“the employer will roster shifts at least 48 hours in advance. Shift rosters may be changed by agreement between the employer and the employee and / or where requested, their nominated representative which may include the Union, or with 7 days notice. However in cases where a change is required due to circumstances outside the control of the employer, the roster may be changed by giving 24 hours notice.”
[23] One Steel argue that the implementation of the change is not inconsistent with other Agreement terms. The NUW does not point to inconsistency with any other terms of the Agreement other than the savings and supercession clauses which I deal with later.
[24] The NUW argue that the power to change start and finish times and to change shift rosters is different from the ability to change the organisation of hours of work more generally. I accept that this may be the case in some Awards and agreements depending upon the context. However, this Agreement specifically permits the employer to change workers from day work to shift work and vice versa and they may have their shift altered. The change from day work to night work and vice versa is a major change with very significant impacts upon employees. This capacity was part of the 1999 Agreement although at that time only 7 days’ notice was required for change to a different shift. The Agreement now requires 14 days’ notice for this type of change. Of course the capacity to change an individual from night shift to day shift is a different concept from changing the applicable shift rosters for the group of employees. However, there is a relationship between the two concepts. A new shift roster can include changes to the particular shift of individual workers including where a roster changes from a fixed shift roster to a rotating shift roster. The length of shifts can also be varied as part of the shift rosters provided they are within the range permitted by other provisions. It is inevitable that the number of days off in a roster cycle will change if the length of shifts change. This sort of change could make the concept of a single fixed 8 hour RDO each 4 weeks problematic.
[25] In the context of this Agreement the power to change rosters is a very wide power indeed. I am not satisfied that shift rosters should be read narrowly to exclude changes to days of work or to the period over which hours are averaged provided it is 152 hours or less in 28 days. There are provisions which deal with fixed shift arrangements and with notice of change of shift roster and of change between shifts. If the parties had intended to regulate the issue of the RDO then I consider it would have been included in the Agreement.
[26] As I observed earlier the Agreement identifies a limited range of options for the organisation of the 38 hour week for both day workers and shift workers. I am satisfied that the proper reading of the Agreement is that the specified limited range of options is available to the employer. In some Awards and agreements it is clear that changes between the options for organising ordinary hours is only by majority agreement but there is no such requirement in this Agreement.
[27] In this context I am satisfied that the concept of shift rosters in the Agreement includes changes to the way in which the ordinary hours are arranged provided that they are an average of 38 hours per week over not more than 152 hours in 28 consecutive days and that the other specific limitations in the Agreement (e.g. spread of hours and shift length) are observed. Clause 26.3.6 specifically allows shift rosters to be altered at 7 days’ notice.
[28] The NUW argues that the historical context suggests that the Agreement should be interpreted as providing that the RDO cannot be removed or alternatively cannot be removed without majority agreement. I accept that there has been a long history of working the roster which provides an RDO. However, absent any indication in the Agreement I cannot see a basis to imply such an Agreement term. I agree with One Steel that the fact that the 1999 Agreement was replaced by an agreement which specifically removed any reference to an RDO suggests that it was the mutual intention of the parties not to specifically protect RDO arrangements. The agreement which replaced the 1999 Agreement did include other provisions specific to the WA employees who had formerly been covered by the 1999 Agreement. If it was the mutual intention of the parties to protect or preserve RDO arrangements why wasn’t it specifically dealt with as occurred with other matters such as redundancy and pay rates? I do not accept that the historical context alters my conclusions based upon the plain words of the Agreement. For the same reasons I do not accept that it is an implied term of the Agreement that the RDO cannot be removed without agreement.
[29] I am satisfied that Clause 26 permits the change sought by One Steel for shift workers subject to appropriate notice and consultation. Clause 20 permits the change sought by One Steel for day workers subject to appropriate notice and consultation.
[30] The first agreement after the acquisition of the business by One Steel was the OneSteel Distribution Certified Agreement 2001-2003. That Agreement specifically referred to some particular conditions for the incoming Email Metals workers. For example, there were transitional arrangements in respect to redundancy and wage rate parity. The Agreement stated that it superceded the Email Metals Agreement “provided that all rights, liabilities and obligations accrued or incurred under” the agreement “shall not be effected unless specifically provided for herein.” Similar clauses were included in each of the subsequent agreements. I am satisfied that these clauses, including Clause 6.2 of the Agreement, protect any RDOs which may have accrued. However, I am not satisfied that Clause 6.2 prevented a change to RDOs utilising the provisions of the new agreement.
[31] The NUW argues that the Savings Clause 4.2 prevents the change sought by One Steel. That clause provides:
“No employee will as a result of the making of this Agreement, suffer any loss of wages or other benefits to which the employee is entitled prior to the date of the coming into operation of this Agreement except where specifically provided for by this Agreement.”
[32] The NUW submits that a clause of this sort was included in the predecessor agreements including the 2001 agreement. I accept the submission of the NUW that the RDO is a benefit to employees which has been a consistent practice for many years.
[33] The expression as a result of the making of this Agreement is a reference to changes which are brought about because of the making of the Agreement. It is difficult to conceive of what changes are brought about as a result of making an Agreement other than the terms of the Agreement itself. It may be that there are entitlements which were included in the previous Agreement but which are not included in the new Agreement and where the failure to include them did not reflect a mutual intention of the parties to change or remove an entitlement. To the extent that the benefits to which the clause refers are benefits under the previous agreement there can be no loss as the RDO was not a benefit to which the employee was entitled under that previous agreement. The clause specifically refers to the result of making this Agreement so it is not possible to go back to agreements beyond the immediate predecessor.
[34] It is possible that the parties intended by this clause to protect entitlements other than those codified in the Agreement. I do not favour this interpretation but will consider it in case I am wrong. It is possible that the clause protects benefits which are established custom and practices at the workplace. However, for customs and practices to meet the description of entitlements they are generally documented policies and agreements or terms of contracts of employment. There is no such policy or agreement in respect to the RDO. Further, for the reasons discussed earlier, I am satisfied that the capacity to alter hours of work is specifically provided for in the Agreement. It is the capacity to change hours arrangements which is relevant to the test of whether the change is specifically provided for in the Agreement. The fact that the employer did not exercise any rights they had to change hours arrangements before now is not relevant to the task of interpreting the Agreement in these circumstances. I am satisfied that the Agreement specifically provides for ordinary hours to be organised without the provision of an RDO. This was also the case in the predecessor to the agreement. Therefore, no employee is suffering any loss of an entitlement to wages or other benefits as a result of the making of the Agreement.
[35] I determine as the resolution of the dispute that the Agreement permits the changes to working hours arrangements proposed by One Steel.
COMMISSIONER
Final written submissions:
NUW submissions filed 18 August 2015.
One Steel’s submissions filed 26 August 2015.
NUW submissions in reply filed 2 September 2015.
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