[2016] FWC 3852 [Note: An appeal pursuant to s.604 (C2016/4478) was lodged against this decision - refer to Full Bench decision dated 20 September 2016 [[2016] FWCFB 6783] for result of appeal.]
FAIR WORK COMMISSION

DECISION


Fair Work Act 2009

s.739 - Application to deal with a dispute

Construction, Forestry, Mining and Energy Union
v
Port Kembla Coal Terminal Limited
(C2016/3037)

VICE PRESIDENT WATSON

MELBOURNE, 23 JUNE 2016

Dispute about matters arising under the enterprise agreement – Interpretation of enterprise agreement – Whether obligation to consult has arisen in relation to the initiative to de-man the Rail Shed – Fair Work Act 2009, s.739.

Introduction

[1] This decision concerns an application for the Fair Work Commission (the Commission) to deal with a dispute. The application is made by the Construction, Forestry, Mining and Energy Union (CFMEU) under s.739 of the Fair Work Act 2009 (the Act) and concerns employees employed by Port Kembla Coal Terminal Limited (PKCT). The dispute relates to the provisions of the Port Kembla Coal Terminal Limited Enterprise Agreement 2012-2015 regarding consultation about major workplace change.

[2] The matter was listed for conference on 28 April 2016 before Deputy President Booth. The parties also participated in a facilitated session before the Deputy President on 5 May 2016. The parties were unable to reach a resolution and the CFMEU requested that the matter be listed for arbitration.

[3] The matter was listed for arbitration before me on 14 June 2016. At the hearing of the matter Mr A Walkaden appeared on behalf of the CFMEU and Mr B Rauf, of counsel, appeared on behalf of PKCT.

Jurisdiction

[4] The dispute comes to the Commission by way of the dispute settlement procedure in the Agreement. The clause relevantly provides:

[5] I am satisfied that the parties have empowered the Commission to arbitrate this dispute under the terms of the Agreement.

The Question for Determination

[6] The parties have agreed that the dispute is to be determined by answering the following question:

[7] In order to determine this question it is necessary to consider whether the point of time at which consultation is required to commence under the Agreement has been reached.

Background Facts and Evidence

[8] In a general sense the dispute has arisen after Mr Craig Johnston, Operations Superintendent of PKCT, raised an improvement initiative with his Manager and communicated his intention to undertake a risk assessment in relation to the proposal. The suggestion involves re-allocating some of the duties of the Rail Receival Operator to an existing third party Pacific National Operator and other duties to the inbound Main Control room Operator during the unloading of trains at Rail Receival, thereby obviating the need for a Rail Receival Operator on shift. As this dispute may depend on precisely what events have occurred and what is envisaged in the future I propose to summarise the events and circumstances in more detail.

[9] Mr Johnston is the Operations Superintendent of PKCT. He reports to the Operations Manager, Mr John Gorman, who in turn reports to the overall manager of the facility, Mr Green. Four shift operator teams report to Mr Johnston. A Maintenance superintendent also reports to Mr Gorman. Various other planning, engineering and specialist advisory staff also report to Mr Green.

[10] In December 2015 Mr Gorman had a discussion with Mr Johnston in which he indicated that the Project Review Council of the PKCT had decided not to allocate funding for a particular efficiency at the Rail Receival area of the operations. Later that month, Mr Johnston, who is responsible for the Rail Receival area informed Mr Gorman that he had an idea for an alternative efficiency of reallocating duties of the Rail Receival Operator during the unloading of trains. Mr Johnston requested further analysis of the idea including a summary of benefits and disadvantages so that he could assess the feasibility of the proposal.

[11] Mr Johnston sent an email to the coordinators of the shift work teams on or about 2 March 2016 which read as follows:

[12] The question that needs to be determined relates to the relevance of consultation obligations in the Agreement to the circumstances described above.

The Relevant Clauses of the Agreement

[13] The dispute relates to clause 7 of the Agreement, which provides as follows:

[14] This clause has been the subject of litigation in the Federal Court. In the course of the Court’s consideration Murphy J said the following in relation to the obligation to consult: 1


[15] In my view the question that arises in this case is not answered by the above analysis. PKCT contends that any proposal is at an embryonic and relatively unformed stage – different facts to those that were before His Honour. Nevertheless the decision acknowledges that there is a category of circumstances that do not trigger the consultation obligations. The question posed by the parties requires a determination of whether the facts that have now arisen fall within that category.

Principles of Interpretation

[1] The principles for interpreting terms of enterprise agreements are well established by various High Court and Federal Court decisions. They have been summarised by a Full Bench of the Commission as follows 2:

[2] I will apply these principles to the interpretation of the Agreement.

Has the Obligation to Consult under clause 7 arisen?

[3] It is not disputed that any proposal by the Company to reduce the number of operators employed at the rail shed would require consultation with the workforce in accordance with clause 7. The dispute in this case relates to the time when that obligation might arise.

[4] In essence, the CFMEU submits that the obligation arises when a management representative, in the course of exercising management responsibilities, is considering a change. The CFMEU submits that this point has been reached by virtue of Mr Johnston initiating a risk assessment with the knowledge of Mr Gorman.

[5] PKCT submits that the obligation only arises when the Company is considering a proposal, and this occurs when the manager responsible for considering changes, in this case Mr Gorman, adopts a proposal for consideration by the Company, in this case by the management team. PKCT submits that the initiative is still in an embryonic stage of a Superintendent considering the feasibility of the change. If Mr Johnston considers that the idea is feasible and advantageous, and Mr Gorman agrees, then the idea will move to being a proposal under consideration by the Company. In such circumstances consultation under clause 7 will occur and the management team will be involved in the consideration of the matter with the benefit of views and perspectives arising from consultation with the workforce.

[6] In accordance with the principles of interpretation outlined above it is first necessary to consider the words of the relevant provision. In my view the words of the Agreement are clear. There is no ambiguity in the words used in clause 7. Rather it is a matter of determining whether the test established by the parties in clause 7 is satisfied in given circumstances. The obligation to consult arises “where the Company is considering introducing a major change” of the specified kind. The dispute involves a consideration of the factual circumstances to determine whether that trigger point in clause 7.1 has been reached. This essentially requires the determination of the meaning of the term “the company” in clause 7.1 in relation to the factual circumstances which are not relevantly in dispute.

[7] In my view the terms of the agreement need to be considered in a common sense practical manner – and not a strict technical way. Consideration of a possible option by a superintendent, who does not have the power to decide on a change, does not constitute consideration by the Company in a legal sense. For a company to consider a proposal the relevant decision-makers would need to be involved.

[8] In my view it would be wrong to consider the question by reference to whether the consideration by a member of staff is in the course of performing the staff member’s duties. Any preliminary consideration would fall into that category. Such a notion does not assist in identifying the trigger point.

[9] The purpose of the clause is helpfully set out in the clause itself. That is a relevant consideration. In my view the purposes of the clause can be met by adopting either of the interpretations contended for. Hence regard to that purpose is not necessarily determinative of the question before the Commission. Nevertheless it is significant that the purposes of the clause can be met without adopting the broad notion contended for by the CFMEU.

[10] In my view, when parties in an industrial agreement talk of matters under consideration by “the Company”, they can be presumed to intend that the consideration concerned be by the employees with relevant authority to decide on such matters. In my view they would not intend that a preliminary investigation of feasibility by a member of management, a supervisor or an operational employee with no authority to make the decision, is consideration “by the Company”.

[11] If the consideration is undertaken with a view to advising senior management, who do have authority to make the decision, whether such a proposal is feasible, it suggests that consideration by the Company will come at a later point in time. If the manager with authority to decide receives a proposal and commences a consideration of the proposal then in my view the consultation obligation is clearly triggered at or around that point. On the facts of the present case that point has not been reached.

Determination

[12] For the above reasons I determine the dispute as follows:

Seal of the Fair Work Commission with member’s signature.
A: No.

VICE PRESIDENT

Appearances:

Mr Walkaden, A on behalf of the CFMEU.

Mr Rauf, B of counsel with Ms Linton, A on behalf of PKCT.

Hearing details:

2016.

Sydney.

14 June.

Final written submissions:

CFMEU on 31 May 2016.

PKCT on 9 June 2016.

 1   [2015] FCA 1088.

 2   [2014] FWCFB 7447.

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