DECISION

Fair Work Act 2009
s.739—Dispute resolution

Australian Municipal, Administrative, Clerical and Services Union
v
Moreland City Council
(C2017/1235)

Application to deal with a dispute.

[1] The Australian Municipal, Administrative, Clerical and Services Union (ASU) has made an application to the Fair Work Commission (Commission) to deal with a dispute pursuant to s.739 of the Fair Work Act 2009 (FW Act). The application is made in accordance with clause 8.5 of the Moreland City Council Enterprise Agreement 2015 1 (the Agreement).

[2] The dispute relates to a decision by Moreland City Council (MCC) to (continue to) contract out the waste collection in the Southern District of the Council. Waste collection for the Northern District would continue to be done by MCC employees.

[3] In essence the ASU seek orders that MCC not execute a contract for services with a contractor for the Southern District kerbside garbage, recycling and waste collection; that MCC meet and confer with the ASU and interested employees for the purpose of giving effect to clause 6.2 of the Agreement; that MCC make arrangements for the procurement of an in-house bid for the collection of Southern District kerbside garbage, recycling and waste collection.

[4] When the matter was first raised with the Commission and during conciliation I sought to attempt to get agreement from the parties as to the question to be answered. Given the dispute as to jurisdiction this was not possible. The ASU, however, said that the question it sought to have answered in the arbitration was:

a. Would Moreland City Council fail to comply with cl. 6.2 of the Moreland City Council EBA 2015 if in all the relevant circumstances it were to contract with an external contractor now to provide the Southern District kerbside garbage, recycling and green waste collection service as proposed to Council on 8 March 2017 in the following resolutions:

“To award the Tender, for the Southern District, to CityWide Service Solutions Pty Ltd ABN 94 066 085 for the collection of garbage, recycling and green waste, using existing trucks for two years and delivering recycling to Visy Paper Pty Ltd, for a period of six years and nine months commencing on 2 October 2017 with a further one year extension option.”

“That the Director City Infrastructure be authorised to do all things necessary to execute the [contract].”

b. If the answer to a. is yes, what relief should be granted?

[5] Whilst MCC preferred a slightly different formulation of the question to be answered it effectively sought the same ends. To the extent that the dispute was notified by the ASU its formulation of the question is to be preferred.

Order sought

[6] The ASU seeks that the Commission make the following orders in relation to its application

The Fair Work Commission orders as follows:

1. That the Moreland City Council would fail to comply with cl. 6.2 of the Moreland City Council Enterprise Bargaining Agreement 2015 at the date of this order if it were to authorise its Director of Infrastructure (or other relevant officer, employee or agent) to execute a contract for services with a contractor for the provision of the Southern District kerbside garbage, recycling and green waste collection service as proposed to Council on 8 March 2017 in the following resolution:

“To award the Tender, for the Southern District, to CityWide Service Solutions Pty Ltd ABN 94 066 085 for collection of garbage, recycling and green waste, using existing trucks for two years and delivering recycling to Visy Paper Pty Ltd, for a period of six years and nine months commencing on 2 October 2017 with a further one year extension option.”

2. That the Moreland City Council, the ASU and those employees covered by the Moreland City Council Enterprise Bargaining Agreement 2015 who wish to do so meet and confer for the purpose of identifying steps and measures that will give effect or further effect to cl. 6.2 of the Moreland City Council Enterprise Bargaining Agreement 2015, consistent with the reasons for decision given in relation to this application.

3. That the Moreland City Council make arrangements for the procurement of an in-house proposal or bid for provision by Moreland City Council employees of the garbage, recycling and green waste service in the Southern District of Moreland in consultation with the ASU and those of the employees covered by the Moreland City Council Enterprise Bargaining Agreement 2015 who wish to participate.

4. The application is otherwise adjourned to a date to be fixed by the Commission.

5. Liberty to apply. 2

Background

[7] The parties to the dispute have prepared an agreed statement of facts. These include:

● The MCC provides a kerbside waste collection service. The service consists of the kerbside collection of garbage and recycling on a weekly basis and the kerbside collection of green waste on a fortnightly basis (the Waste Collection Service).

● The Waste Collection Service is provided in two collection areas: the Southern Collection District and the Northern Collection District. Bell Street is the boundary between these two districts. This division was instituted in 2001.

● The Southern District Waste Collection Service is currently undertaken by an external contractor under a contract that expires on 30 September 2017. The contractor is and since 2001 has been Citywide Service Solutions Pty Ltd (Citywide). The Waste Collection Service in the Northern District is and has since 2001 been undertaken by direct employees of the MCC.

● In late 2016, the MCC publicly called for tenders to provide the Southern District Waste Collection Service after expiry of the current contact. (the Tender) This was reported to the MCC in papers prepared for a Council meeting on 8 March 2017. A copy of that extract from the Council Report for that meeting which relates to the Waste Services Tender (excluding Attachment 1 to that Report, being contained in the confidential section of the Agenda for the Council meeting and hence not available to the public) is attached as Annexure A to this Agreement Statement of Facts (the Report).

● The Report recommended, inter alia, that the MCC awards the Tender for the Southern Collection District to Citywide for collection of Garbage, Recycling and Green Waste, using existing trucks for two years and delivering recycling to Visy Paper Pty Ltd, for a period of six years and nine months commencing on 2 October 2017 with a further one year extension option.

● On 5 November 2016 the Tender was advertised in The Age newspaper.

● On 14 December 2016, the Tender closed.

● No MCC employee or group of MCC employees submitted an in-house tender or bid for provision of the Southern District Waste Collection Service after expiry of the current contract.

The Agreement

[8] Clause 6.2 of the Agreement states:

6.2 Job Security

The parties acknowledge the current skills mix and staffing levels at the Moreland City Council, and will strive to maintain and expand, if required, to meet the needs of the community.

6.2.1 If any factors result in changes to services or staffing that may impact on job security, genuine and detailed consultation with employees and unions will take place in accordance with Clause 6.1 Introduction of Change.

6.2.2 In the event of changes that threaten job security, the Council and unions will endeavor (sic) to reach agreement on any compulsory redundancies. Such agreement will not be unreasonably withheld.

6.2.3 Priority will be given to redeployment over redundancies in accordance with Clause 6.3 Redeployment and Redundancy.

6.2.4 Council recognises the benefits of maintaining in-house services rather than contracting out services to third parties where such services are efficient and competitive.

During the life of this agreement Council may undertake Best Value Reviews in line with the Best Value Principles of the Local Government Act 1989. If the outcome of the review does not favour the retention of an in-house service, the parties agree to investigate and introduce measures to improve the performance of the service.

Where it is deemed that market testing of a service is necessary, Council will resource the staff to submit an in-house bid.

[9] The dispute settling provisions of the Agreement provide that:

8.5 Dispute & Grievance Resolution

In the event of a dispute/grievance in relation to a matter arising under this agreement, which may include a recruitment and selection decision, or in relation to the National Employment Standards, the following steps will generally be followed:

8.5.1 In the first instance, the parties will attempt to resolve the matter at the workplace by discussions between the employee or employees concerned and the relevant supervisor, with union representation as appropriate.

8.5.2 If a grievance is reported to a supervisor, the matter is to be acknowledged within a 48- hour period and a time frame provided to the employee with the course of action to be followed to address the grievance.

8.5.3 If such discussions do not re solve the dispute, the parties will endeavour to resolve the dispute through discussions between more senior levels of management, up to and including the CEO and senior union officials.

8.5.4 If a dispute about a matter under this Agreement is unable to be resolved at the workplace, and all appropriate steps above have been taken, a party to the dispute may refer the dispute to Fair Work Australia.

The parties may agree on the process to be utilised by Fair Work Australia including mediation, conciliation and consent arbitration.

8.5.5 Where the matter in dispute remains unresolved, Fair Work Australia may exercise any method of dispute resolution permitted by the Fair Work Act that it considers appropriate to ensure the settlement of the dispute.

8.5.6 An employer or employee may appoint another person, organisation or association to accompany and/or represent them for the purposes of this clause.

8.5.7 While the dispute resolution procedure is being conducted, the existing situation, terms and conditions of work and work practices (relating to the matter/s being disputed) immediately prior to the grievance or the dispute occurring will not be altered. All other work and agreed changes must continue in accordance with this Agreement and the Fair Work Act. Subject to applicable occupational health and safety legislation, an employee must not unreasonably fail to comply with a direction by the employer to perform work, whether at the same or another workplace, that is safe and appropriate for the employee to perform.

Jurisdiction

[10] The dispute focuses on the introductory paragraph of clause 6.2 3 which states:

The parties acknowledge the current skills mix and staffing levels at the Moreland City Council, and will strive to maintain and expand, if required, to meet the needs of the community.

[11] MCC raises a jurisdictional objection to the Commission dealing with the application. It submits that the dispute settlement procedure in the Agreement, confined to dealing with a “dispute/grievance in relation to a matter arising under this agreement… or in relation to the National Employment Standards”, is such to deprive the Commission of the power to deal with a dispute with respect to making an in-house bid for work subject to a contract for the external provision of services. It says that the reliance of the ASU on clause 6.2 to ground its dispute is misplaced and the job security clause of the Agreement is not applicable to the dispute before the Commission.

[12] The ASU submits that, just because MCC has a different interpretation of clause 6.2, does not mean that there is no proper dispute before the Commission.

[13] The dispute resolution procedure of the Agreement confers jurisdiction on the Commission to deal with disputes in relation to a number of matters including “a matter arising under this agreement”. There is nothing in the dispute resolution procedures that would operate to limit the Commission’s powers with respect to any particular matter arising under the Agreement.

[14] In Seven Network (Operations) Limited v CPSU, the Community and Public Sector Union 4 a Full Bench of the Australian Industrial Relations Commission (AIRC) was considering an appeal against an Order issued by a single member. In allowing the appeal the Full Bench considered the process of determining jurisdiction and found that:

… to determine whether a dispute is over the application of the agreement requires a finding which characterises the dispute. This requires a finding as to jurisdictional fact. The first issue on appeal which the Full Bench must be concerned with is whether a dispute existed, on the evidence, over the application of the agreement. There is a need to characterise the dispute and then to decide whether the dispute, thus characterised, has nexus or sufficient nexus to the provisions of the agreement itself… 5

[15] It is necessary to have regard to the nature of a dispute said to arise under the terms of the agreement having regard to the original notification and the relevant factual circumstances as they evolve through the process of conciliation and arbitration of the dispute. Such a broad approach was endorsed by the Full Bench of the AIRC in Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union v Holden Limited 6 where the following is stated:

[45] A dispute referred to the Commission must be properly characterised before powers conferred by a dispute settlement provision in a certified agreement are exercised. This is necessary in order to determine whether the dispute is ‘over the application of the agreement’ within the meaning of s.170LW of the WR Act. As noted by a majority of the Full Bench in Automated Reading Services (AMRS) v ASU, this expression has not been judicially considered. The majority went on to observe that:

“A relationship between the provisions of the relevant agreement and the subject matters in dispute would appear to be an essential element in the identification of any dispute over the application of the agreement. ...”

[46] We adopt these observations. Further, in our view the expression should not be narrowly construed. In this context we agree with the observation of the Full Bench in Shop, Distributive and Allied Employees Association v Big W Discount Department Stores that:

“...what comprises a dispute over the application of the agreement should not be narrowly construed; to do so would be contrary to the notion that certified agreements are intended to facilitate the harmonious working relationship of the parties during the operation of the agreement.”

[47] In characterising the nature of the dispute in this matter the Commission is not confined to the dispute notification document. The entire factual background is relevant, including matters such as the submissions advanced. In this context we note that in TWU v Mayne Nickless Ltd the Full Court of the Federal Court held that in determining whether an application calls on the Commission to exercise judicial, as opposed to arbitral, power ‘a court should review the entire factual background to properly characterise the claim and the power sought to be invoked.’

[Endnotes omitted]

[16] In this case MCC has determined to continue past practice of contracting waste collection services in the Southern District of MCC to an external provider. The ASU says that, in doing so, MCC has failed to fulfil its obligation under clause 6.2 of the Agreement to strive to maintain and expand the skills mix and staffing levels within MCC.

[17] I am satisfied that there is an appropriate nexus between the awarding of a contract for the delivery of MCC services and the application of clause 6.2 of the Agreement. The dispute at least raises issues as to the intent and purpose of clause 6.2 in such circumstances. This is, in my view, adequate to enliven the jurisdiction of the Commission.

[18] Whether the obligation of clause 6.2 extends to a requirement to facilitate an in-house bid for the work is a separate matter but this does not diminish the characterisation of the dispute.

[19] I am therefore satisfied that the matter before me is a matter arising under the Agreement. Further, I am satisfied that the ASU has properly met the requirements of clause 8.5 in making its application to the Commission.

[20] I am satisfied that the dispute is properly before the Commission and the Commission has jurisdiction to deal with the matter.

Principals relevant to the interpretation of an Agreement

[21] The principals relevant to the interpretation of an Agreement are set out in The Australasian Meat Industry Employees Union v Golden Cockerel Pty Limited 7 and have more recently been developed in the decision of the Full Bench of the Commission in Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union known as the Australian Manufacturing Workers Union (AMWU) v Berri Pty Limited8.

Evidence

[22] Evidence was given in these proceedings by Mr Richard Duffy, Branch Secretary of the ASU, Mr Gavin Campbell and Mr Douglas Cutler, both ASU Delegates in Waste Collection Services at MCC, Mr Phillip Lowry, Unit Manager Waste Services at MCC, and Mr Grant Thorne, Director City Infrastructure for MCC.

[23] Mr Duffy gave uncontested evidence that he became involved in bargaining for the Agreement in late 2015 in relation to job security (clause 6.2) and wages. He said that he had direct discussions with Ms Nerina Di Lorenzo, MCC Chief Executive Officer, both in person and over the telephone.
[24] Mr Duffy said that he told Ms Di Lorenzo that the job security clause had to include the word “expand” to ensure expanding services caused by population growth were included and to “bring back in-house those functions and services currently provided by contractors.” He said that he explicitly cited the example of waste collection in the Southern District. Mr Duffy said he did not recall the response of Ms Di Lorenzo but in later conversations it was agreed “expand” would stay in the clause and the words “if required to meet the needs of the community” were added.

[25] Mr Duffy said he would not have committed to the ASU supporting the Agreement if he had not been able to reach an agreement with Ms Di Lorenzo on wages and job security. Mr Duffy gave evidence that, whilst there had been no in-house bid in the past for the Southern District waste collection, the focus of members had shifted in recent years to job security and that this involved keeping work in-house and bringing work back in house that had previously been contracted out. Mr Duffy also said that continued outsourcing of Southern District waste collection caused job insecurity for MCC waste services employees because of the cheaper cost of the outsourced work.

[26] Mr Duffy said that he became aware that MCC was considering the awarding of the contract for Southern District when he saw the papers for an upcoming Council meeting in March 2017. He saw these papers because he is a resident of MCC. He was not otherwise aware that the contract was being awarded. Mr Duffy denied that this dispute with MCC was a confection designed to effect Citywide (who have the current contract) with whom the ASU is in dispute in relation to bargaining for an enterprise agreement.

[27] Mr Campbell gave evidence that he was not aware that the waste collection for Southern District would be awarded to a contractor until advised by the ASU in early 2017. He says he was not made aware of the contracting process or decision this through ToolBox meetings and that these meetings were, in any event, sporadic and the minutes were not made available to waste services employees. Mr Campbell said that he had seen Mr Lowry taking notes during the meeting but was not confident such minutes would be accurate.

[28] Mr Cutler gave evidence that there were no longer regular ToolBox meetings and that, when meetings were held, minutes were not taken or circulated. He said that, at the ToolBox meetings he had attended, contracting of Southern District waste collection was not raised. He said he vaguely recalled an injunction against the awarding of the Sothern District contract was raised in relation to why a vacancy was not to be filled.

[29] Mr Lowry gave evidence in relation to a number of ToolBox eetings he conducted and the resulting notes arising from those meetings that he said he placed on the waste services notice board. He said the notes of a meeting would remain on the notice board until the next meeting notes were ready to replace them. Mr Lowry said that the frequency and timing of ToolBox meetings was determined by the Safety Risk Department who would outline those mandatory matters to be covered at a ToolBox meeting.

[30] With respect to the ToolBox meeting for July/August 2016, Mr Lowry said that he outlined the issues with respect to the waste services contract as outlined in the notes. He said that the discussion about redundancy “tip talk” (chatter in the workplace) led into the discussion about the waste services contract. Further, he said that there was very little discussion about the issue in the September 2016 meeting.

[31] Mr Lowry said that he had been approached by a waste services employee (Mr Peter Panousopoulos) in April 2017, on the day of the Council meeting, and given letters signed by a number of waste services employees. Mr Panousopoulos wanted the letters passed on to Ms Di Lorenzo and Mr Thorne. Mr Lowry agreed to do so. Mr Panousopoulos had indicated to Mr Lowry that he was concerned about his long term employment with MCC and had expressed concern as to how some of the waste services drivers were conducting themselves.

[32] Mr Thorne gave evidence that an advertisement for requests for tender for Southern District was placed in The Age newspaper on 5 November 2016. Three tenders were received in response to the advertisement. No in-house bid was made. Further, he said that, to the best of his knowledge there had been no in-house bid made for the work since it was first outsourced in 2001.

[33] Mr Thorne was involved in the development of the Waste Services Review at MCC. This report recommended the maintenance of existing arrangements for waste collection – that is that Southern District be again placed out for tender and that Northern District continue to be provided in-house – and that for this reason no in-house bid team was needed. The tender documentation reflected the Waste Services Review. Mr Thorne agreed that neither the ASU nor employees in waste services were engaged in the Waste Services Review. Mr Thorne agreed that the tender documentation specified that employees of MCC “are not permitted to tender, directly or indirectly” for the waste collection services subject to the tender and “that there will be no in-house tender submitted for any of the services”. 9

[34] Mr Thorne gave evidence that, if an in-house bid was to be made, an isolated team would be established to put the tender together and would be headed up by a manager, not involved in waste services, appointed by the CEO. This team would operate in isolation from the tender evaluation and waste services area. He said that it would not be the responsibility of employees in waste services to make the bid for the work.

[35] Mr Thorne agreed that waste collection is an essential service for resident of MCC.

Clause 6.2 of the Agreement

[36] Prior to considering submissions, it should be noted that the parties agreed that some additional words (underlined below) needed to be read into clause 6.2 of the Agreement for it to make grammatical sense so that it should properly read:

The parties acknowledge the current skills mix and staffing levels at the Moreland City Council, and will strive to maintain and expand the skills mix and staffing, if required, to meet the needs of the community…

[37] The ASU submits that clause 6.2 places a positive obligation on Council and the ASU (as a party to the Agreement 10) and other parties to do certain things. It submits that the use of the word “will” creates a positive obligation in this sense.

[38] It submits that the ordinary meaning of the word “strive” is:

1. to exert oneself vigorously; try hard;

2. to make strenuous efforts towards any end: to strive for success;

3. to contend in opposition, battle, or any conflict; and

4. to struggle vigorously, as in opposition or resistance: to strive against fate. 11

[39] The ASU submits that the use of the phrase “will strive” conveys a promise to apply great or strenuous effort. It requires the Council to take positive steps to engage with its employees and other parties and to do what it can to facilitate this engagement. It submits that, as the obligation is placed on all parties to strive, it necessarily implies that they co-operate to give effect to the obligation. It says that it may be inferred that there will be information exchanges between the parties as to how their expectations and the obligation might be met.

[40] Whilst the term “strive” does not appear to have been judicially considered, the ASU submits that it is analogous to “best endeavours” and decisions with respect to that phrase may provide guidance. In Sheperd v Felt Textiles of Australia Ltd. 12 (Shepard) his Honour Dixon J considered the meaning of “best endeavours”. He said:

The express promise of the appellant is to use his best endeavours to obtain orders for the respondent and to influence business on its behalf necessarily includes an obligation not to hinder or prevent the fulfilment of its purpose. 13

[41] The ASU submits that the evidence demonstrates that there was no striving by MCC to achieve the obligation outlined in clause 6.2:

● MCC conducted the Waste Services Review with an outcome to maintain the status quo;

● The status quo was put into effect through the tender documents which made plain that there would be no in-house bid for the Southern District waste collection services;

● MCC clearly had turned its mind to the possibility of an in-house bid for the work but took that off the table prior to the call for tenders; and

● By its actions MCC completely foreclosed on the possibility of clause 6.2 being able to be utilised.

[42] The ASU submits that:

● There could be no striving for maintenance and expansion of employment levels by means of considering how the service might be provided by employees or if it could be provided by employees because that option was taken off the table by the unilateral actions of the Council; and

● As to the requirements of clause 6.2, that no information was provided to it as a party to the Agreement and there is a real question as to whether information was provided to employees such that the joint obligation imposed by clause 6.2 could be met (as opposed to informing employees of the outcomes after the fact).

[43] The ASU further submits that clauses 6.2.1 to 6.2.4 are not subordinate provisions to the opening paragraph of the clause, and nor do they operate to condition the paragraph but rather each establishes a different obligation that has nothing to do with the “striving” required in the opening paragraph of clause 6.2. That is, the opening paragraph of clause 6.2 should not be read down by the sub-clauses but rather as an obligation “in and of itself”.

[44] As to the submissions of MCC, the ASU submits that:

● There are no grounds to read clauses 6.2.1 to 6.2.3 together and then read clause 6.2 in the context of clause 6.2.4;

● Whilst job losses may be one way in which the clause works there is no basis to confine the clause to this matter;

● To accept the submission of MCC would give the words “maintain and expand” no work to do;

● It is irrelevant to the matter before the Commission that Southern District waste collection has been contracted out since 2001; and

● It is incorrect to say that clause 6.2 is aspirational only.

[45] MCC submits that the construction, context and wording of clause 6.2 make it clear that the clause is “dealing with the potential of job losses in a situation where services which are currently provided in-house, are outsourced.” It submits that this is clear and unequivocal when clauses 6.2.1 to 6.2.3 are read together. Further, it submits that clause 6.2.4 codifies the circumstances when an in-house bid would be considered.

[46] MCC says that clauses 6.2.1 to 6.2.4 are the active parts of the clause and that they act as a “guardian” of clause 6.2. It submits:

Moving along just briefly the guardian phase of that clause, the fact that it proposes to either prevent the loss of jobs through job security elements in 6.2.1 to 6.2.4 gives a substantial context to how one should view the operation of 6.2 itself. In other words where 6.2 is very general and in a sense passive 6.2.1 and 6.2.4 are really active. In the case of 6.2.4 there are at least three distinct provisions contained within that one multi-headed clause which require things to be done when various triggers are met. 14

[47] MCC submits that any obligation created under clause 6.2 resides in the requirements of clause 6.2.4 where a particular review may not favour the retention of in-house services. It is in these circumstances only that there may well be a claim for the resourcing of an in-house bid. In any event, MCC submits that the words “and to expand” along with the words “strive to maintain” in clause 6.2 are aspirational in nature and do not impose any obligation on MCC.

[48] MCC says that clause 6.2 creates no obligation – it is not clear to a reader of the Agreement what is required to be done to satisfy clause 6.2. To this extent it submits that it is necessary to be able to determine what is required by the obligation the ASU says is created by the clause. The need to pinpoint the requirement is important at least because it may be the basis of a penalty being imposed upon a party pursuant to s.50 of the FW Act.

[49] MCC submits that it is a false construction (and cherry picking) of the ASU that would require MCC to consult with employees and the unions and facilitate an in-house bid every time it went out to tender for a contract for services which are already outsourced. Further, MCC submits that the words “to strive and expand” have appeared in the 2009 and 2012 enterprise agreements and at no stage through those agreements has the ASU or employees in waste services raised any issue about being consulted on tender processes for the Southern District waste collection services.

[50] MCC says that, in considering the evidence before the Commission I should accept the evidence of Mr Lowry and Mr Thorne. It says that Mr Lowry was not challenged seriously on the content or posting of the ToolBox meeting notes and Mr Thorne was expansive, coherent and not challenged.

[51] MCC submits that the reliance of the ASU on the decision in Sheperd is misplaced – that decision is based on an obligation at common law and has little value in deciding a matter not founded on a contractual breach.

[52] As to the orders sought by the ASU, MCC says that the orders would compel the MCC to do a thing not contemplated by the Agreement.

Consideration

[53] I should observe that the task before me involves a number of steps. The first is to determine if the clause in question is susceptible to more than one meaning or is ambiguous. If it is I must then consider the meaning of the clause, having regard to relevant authorities on the approach to be taken to such a task.

[54] Having completed this task I must then consider what relief, if any, should be granted to the ASU. It is important not to confuse the characterisation of the dispute or relief sought with a determination of the intent of the clause itself. These are distinct matters which much each be properly carried out.

[55] The first step in construing a provision of an enterprise agreement is to determine if it has a plain meaning or it is ambiguous or susceptible of more than one meaning. 15 It is reasonable to have regard to the evidence of surrounding circumstances in undertaking this task. I am satisfied, on the basis of the submissions before me that the clause is ambiguous and susceptible to more than one meaning. The mere structure of the clause with an apparent opening paragraph and a number of sub-paragraphs creates uncertainty. It is not clear, on its face, the extent to which the opening paragraph of the clause interacts with the following sub-clauses.

[56] The ASU places the opening paragraph as a stand-alone obligation on both MCC and the ASU as a party to the Agreement. MCC says that the paragraph is generally aspirational and must be read in conjunction with clause 6.2.4.It is not the case that just because opposing parties put different submissions as to meaning before the Commission that ambiguity or susceptibility of more than one meaning necessarily follows. In this case however, I am satisfied that the clause is susceptible of more than one meaning based on these differing submissions.

[57] In determining the intent of the clause the starting point is the ordinary meaning of the words and their placement in the Agreement. Further, “as a general principle, all words in an enterprise agreement must prima facie be given some meaning and effect.” 16

[58] Clause 6.2 of the Agreement sits within section Six of the Agreement. Section Six is headed “Employment Relationship & Related Matters”. The clause headings in section 6 are “Introduction of Change” (clause 6.0); “Significant Effects” (clause 6.1); “Job Security” (clause 6.2); “Redeployment, Retraining & Redundancy” (clause 6.3) and “Transfer of Business” (clause 6.4).

[59] Clause 6.2 therefore sits within a raft of clauses that deal with change in the workplace, the consequences of that change and how it will be managed. Clauses 6.2.1 and 6.2.2 have a direct relationship with the change contemplated in clauses 6.0 and 6.1 and clause 6.2.3 has a direct bearing on the operation of clause 6.3.

[60] I am satisfied that the opening paragraph of clause 6.2 places a clear obligation on MCC and other parties named in the Agreement. The use of the term “will” gives force to this finding. There is no basis on which to read any limitation or mere aspiration into the word. The obligation placed on the parties is to “strive” to do something. That the paragraph does not set out with great particularity what the parties “will” do does not diminish the obligation imported by the use of the term “will”. 17

[61] I agree with the submissions of the ASU that the word “strive” should be given its ordinary meaning. This can be found in the Macquarie dictionary and the definition set out above in the submissions of the ASU is accepted. The positive obligation is that the parties make strenuous efforts to “maintain and expand” existing skills mix and staffing levels.

[62] The next matter however is whether striving required of clause 6.2 is limited or if the obligation can only be achieved by way of those matters set out in clauses 6.2.2 to 6.2.4.

[63] There is nothing in the opening paragraph of clause 6.2 that suggests the following sub-clauses are the limitation on what it is required to do to meet the obligation in the opening paragraph. It appears that each of clauses 6.2.2 to 6.2.4 creates an obligation of its own:

● Clause 6.2.1 requires that the consultation obligations in clause 6.1 be carried out and that the consultation be “genuine and detailed”;

● Clause 6.2.2 place an obligation on MCC and the unions to “endeavour” to reach agreement on redundancies contemplated in clause 6.3;

● Clause 6.2.3 places an obligation on MCC to ensure “[p]riority will be given to redeployment over redundancy” contemplated by clause 6.3; and


● Clause 6.2.4 creates a clear obligation to facilitate an in-house bid in circumstances where contracting out of the work is being considered.

[64] I do not accept the submissions of MCC that the lack of a “shopping list” of things that must be done suggests that there is no obligation on MCC. To accept this submission would require prescription in every clause where an obligation is created. There is no prescription in the relation to clauses 6.2.1 to 6.2.4 but it seems to me the obligations in each of those clauses are clear.

[65] MCC does not suggest that the opening paragraph of clause 6.2 operates in respect to clauses 6.2.1 to 6.2.3. In these circumstances it is difficult to see how or why it should operate exclusively in relation to clause 6.2.4.

[66] There is no basis on which to conclude that clause 6.2 is aspirational or that, to the extent that it creates an obligation, it is only in the circumstances set out in clause 6.2.4. The use of the word “will” creates force – it takes the paragraph from the aspirational to the obligatory. Clause 6.2.4 may be indicative of a specific circumstance where the parties have agreed certain things will be done but there is nothing to suggest that this is the extent to which the opening paragraph can operate. The submissions of the MCC to this extent must be rejected.

[67] However, what the opening paragraph of clause 6.2 does not do is dictate how the identified objective of maintaining and expanding skills mix and staffing levels is to be achieved – that is, there is no prescription on the actions to be taken by the parties and I do not read any specific requirements into the clause – to do so would be contrary to established authority that the task of interpreting an agreement is not to re-write the agreement to achieve what might be considered “fair and just”.

[68] The parties clearly put their minds to when a positive obligation should be imposed to facilitate an in-house bid for work – so much is clear from the wording of clause 6.2.4. It is in circumstances where a Best Value Review does not favour the retention of in-house services. The current situation does not fall within the ambit of clause 6.2.4. That is not in dispute.

[69] On the evidence of Mr Duffy, he had in mind that the obligation in clause 6.2 would be enlivened at contract renewal time. If it had been the intention that this would require the facilitation of an in-house bid it is reasonable to conclude that this would have been mandated as it is in clause 6.2.4. It is not. In this context it is not possible to conclude that clause 6.2 imposes an obligation on MCC to facilitate an in-house bid in circumstances where it is considering a further contract for work already contracted out. The submissions of the ASU to this extent must be rejected.

[70] This of course does not preclude the facilitation of an in-house bid in circumstances such as those before me. The facilitation of an in-house bid is one way in which the obligation in clause 6.2 might be met but this is not prescribed by the clause and I do not read it into the clause. Evidence of surrounding circumstances to the making of the Agreement can be considered but only to the extent that it helps establish objective facts.

[71] Little evidence has been put before me as to the surrounding circumstances establishing the parties’ objective intentions in including clause 6.2 in the Agreement. Whilst I accept that the Agreement was made under the FW Act between MCC and its employees there is no evidence of the intention of employees in entering into the Agreement except that given by Mr Duffy, Branch Secretary of the ASU and the default bargaining representative for a number of employees.

[72] Mr Duffy’s uncontested evidence is that clause 6.2 was subject to specific discussion between himself and Ms Di Lorenzo and they resolved the final wording for inclusion in the Agreement. Mr Duffy said that, in including the words of the opening paragraph in clause 6.2 he had in his mind, and specifically raised with Ms Di Lorenzo, circumstances such as those before the Commission. Ms Di Lorenzo did not give evidence in circumstances where MCC was well aware of the evidence of Mr Duffy. To the extent that it is not clear (as is evidenced by the differing interpretations put forward by the parties) as to the subject matter of the opening paragraph of clause 6.2, I am satisfied, on the evidence of Mr Duffy that the continued inclusion (it was in the predecessor agreement) of the word “expand” in clause 6.2 was to encompass situations where Council may provide services in the future that it did not currently provide.

[73] MCC has proposed that I should have regard to the fact that the two agreements prior to this one contained job security clauses, both of which required that the parties “strive to maintain and expand” the skills mix and staffing levels but that no claim had been made to facilitate in-house bids for work subject to contracting at contract renewal time. This, it said, was evidence that the ASU’s claim was not genuine and was, in fact, a screen for its dispute with Citywide. In addition, it says that there has been no agitation by employees to seek to bring the contracted work in-house.

[74] The lack of a complaint by the ASU as to application of predecessors to clause 6.2 is not sufficient to read down the clause or to make any findings that this application is a proxy for some other dispute the ASU has with Citywide. As set out above, I have not read into the clause any absolute requirement within the clause for MCC to do an in-house bid. That this might be a means by which the obligation is achieved but has not been sought in the past when a contract is renewed can have no bearing on the interpretation and intent of the clause.

[75] With respect to Citywide I have no evidence before me that would enable me to draw any conclusion with respect to a dispute the ASU may have with it.

When is the obligation enlivened?

[76] I am satisfied that the opening paragraph of clause 6.2 of the Agreement places a positive obligation on the parties to strive to maintain and expand the skills mix and staffing levels. This obligation, in its execution, can only be directed at meeting the needs of the community.

[77] The ASU suggests that the time of contract renewal is an appropriate time at which the needs of the community can be identified (in this case for Southern District residents to have their waste collected). MCC says that if this submission is accepted then an in-house bid would have to be facilitated every time a contract comes up for renewal.

[78] There are a number of things to say of these submissions:

● I have not read into the paragraph that the obligation requires the facilitation by MCC of an in-house bid although I accept it is a means by which the obligation could be met;

● At the time a contract is up for renewal (a process exists in clause 6.2.4 in relation to an initial decision to contract) the needs of the community are easily identifiable and steps to meet the obligation have some meaning. Part way through a contract for the provision of services that meets the needs of the community does not seem to be (although it could not be precluded by the clause) the most efficient time to undertake an assessment of how the services are best offered; and

● MCC considered contract renewal time as an appropriate time to consider if an in-house bid should be considered – a process that would look at maintaining and expanding skills and staff levels – but determined not to do so.

[79] These circumstances suggest that the time of contract renewal is an entirely appropriate time to consider the obligation imposed by clause 6.2 and how or if this can be met. To this extent for MCC to renew the Southern District waste collection contract when it has not fulfilled its obligations, along with other parties under clause 6.2 of the Agreement, would be contrary to the Agreement.

[80] I would also observe that the obligation may also be met in full or in part by engaging the parties to the Agreement in processes that precede the recommendation to further contract the work such as the Waste Services Review. MCC has an obligation to not prematurely close off options for the meeting of the obligation by, for example, including statements in tender documents that would stop an in-house bid or some other action that would have the effect of increasing the skill mix and staffing levels within MCC.

[81] I should also note, for completeness, that I do not consider the discussions that may have occurred at Toolbox Meetings with staff about the decision to continue the contracting out as meeting the obligations imposed by clause 6.2. The Toolbox Meetings did not engage the ASU as a party the Agreement in the process. That ASU delegates may have been present at Toolbox Meetings does not overcome this.

[82] In light of my conclusions I am compelled to find that the answer to the question the ASU put forward to be answered is “yes”.

Remedy

[83] In Maritime Union of Australia v Australian Plant Services Pty Ltd 18 Senior Deputy President Lacy, said that “…importantly, the character of the dispute is distinguishable from the orders that may be made in settlement of the dispute.”19

[84] Further, he said:

What then of the orders that the Commission may make in the exercise of powers under an agreement in settlement of a dispute over its application. It seems that the scope and nature of the orders that the Commission may make in such circumstances will depend on the agreement of the parties as recorded in their certified agreement, provided only that it is reasonably incidental to the application of the agreement to which the dispute relates. The Agreement in this case confers on the Commission the right “to conciliate and, if necessary, arbitrate the matter in dispute.” 20

[footnote omitted]

[85] In this case the dispute settlement procedure authorises the Commission to “exercise any method of dispute resolution permitted by the Fair Work Act that it considers appropriate to ensure the settlement of the dispute.” 21

[86] In Metropolitan Fire and Emergency Services Board v United Firefighters’ Union of Australia; Garth Duggan 22 a Full Bench of the Commission found:

[60] In the extract of the High Court decision in CFMEU v AIRC above it is made clear that the exercise of judicial power results in an order that is binding of its own force. So too is an order made under the Act pursuant to a specific power to make orders of binding force. In the case of private arbitration, however, the arbitrator's powers depend on the agreement of the parties, usually embodied in a contract, and the arbitrator's award is not binding of its own force. An arbitrator’s decision in a private arbitration should be expressed as a determination because it cannot be enforced under the Act as an order.

[87] Having found that:

● there is a binding obligation on the parties created by the first paragraph of clause 6.2;

● that contract renewal time seems an obvious (but not exclusive) point in time to consider how the obligation in clause 6.2 can be met; and

● there is no obligation created by clause 6.2 on MCC to facilitate an in-house bid for the work being considered for further contract

the question as to the appropriate form of remedy arises.

[88] The ASU seeks, in effect, a declaration that MCC would fail to comply with the requirements of clause 6.2 of the Agreement if it authorises the execution of a contract for Southern District waste collection services. 23 It says that the order is “intended to be declaratory of what we say is the proper construction of clause 6.2”.24

[89] The ASU also seek orders that would have the effect of putting a hold on the award of the contract for Southern District waste collection; would require the parties to meet to confer for the purpose of identifying the steps necessary to meet the obligation under clause 6.2 and would require MCC to facilitate an in-house bid for the Southern District waste collection. 25
[90] Importantly however, the ASU says that this is not the final resolution of the dispute currently before the Commission:

It might be there are other things that the parties could identify to answer that question. That’s not a matter that you have to identify. That’s beside the point for the purposes of the Commission. That’s in the hands of the parties, because it’s the parties’ obligation to strive, not the Commission’s. The Commission's function is to explain what the clause means and to declare what the effect of it is, in order to resolve that part of the dispute.

It then goes over to the parties to sort out, according to the meaning that’s been declared how they might frame the striving that the clause requires of them. That doesn’t end the dispute, because there hasn’t been a resolution of how that unfolds. Accordingly, that’s why the order has been arranged in the way it has, allowing the parties to bring the matter back on in order to - as the striving unfolds towards the end that the clause requires. 26

[91] No objection was raised by MCC to the form of the orders sought by the ASU should I find in the ASU’s favour. However, I am not satisfied, that in exercising powers pursuant to the dispute settling procedure of the Agreement, I have powers to issue a declaration (it not being a power available under the FW Act in such circumstances) nor do I have the power to issue an order.

[92] Having found the answer to the question posed by the ASAU is “yes” I do not see that I need to deal any further with the “declaration” sought by the ASU.

[93] Having found that there is a positive obligation on the parties to strive to maintain and expand the skill mix and staffing levels within MCC and in view of my observation that contract renewal seems a logical time when this obligation might be given effect, it is reasonable to require that the parties meet and confer as to how they might meet the obligation in the clause 6.2.

[94] I have found above that there is nothing in clause 6.2 that places a requirement of MCC to facilitate an in-house bid for the work subject to the contract under consideration. That may be an option open to the parties but there is no basis on which I should presume the outcome of the endeavours of the parties. For this reason Item 3 of the Proposed Draft Order as sought by the ASU is declined. Having done so I would observe that there is nothing that precludes the consideration of an in-house bid and I would strongly encourage the parties to investigate this option.

[95] I consider it reasonable, as a step towards the settlement of the dispute, that MCC engage with the other parties to the Agreement with a view to giving effect to clause 6.2. It seems to me that any action by MCC to cause to have executed the contract for Southern District would make my decision and findings redundant. The proposed Item 4 of the Proposed Draft Order is reasonable.

[96] A determination 27 will be issued reflecting my decision.

COMMISSIONER

Appearances:

M. Harding of counsel for the Australian Municipal, Administrative, Clerical and Services Union.

T. Donaghey of counsel for Moreland City Council.

Hearing details:

2017.

Melbourne:

June 30.

<Price code C, PR594441>

 1   AE416327.

 2   Exhibit ASU-5.

 3   The opening paragraph of clause 6.2 is referred to, for ease as “clause 6.2” in this decision. Where the sub-clauses are referred to it is by the full clause number (e.g. clause 6.2.1 etc). Where the totality of the clause is referred to this is made clear in the text.

 4   PR933766.

 5   Ibid at [32].

 6   PR940366.

 7   [2014] FWCFB 7447.

 8   [2017] FWCFB 3005.

 9   Exhibit ASU-9.

 10   See clause 1.3 of the Agreement where the ASU, along with other unions, are named as “parties” to the Agreement.

 11   Macquarie On-line dictionary.

 12   (1931) 45 CLR 359

 13   Ibid at 378.

 14   Transcript, PN1354.

 15   Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union known as the Australian Manufacturing Workers Union (AMWU) v Berri Pty Limited [2017] FWCFB 3005 at [114].

 16   Ibid at [44].

 17   See for example, National Tertiary Education Industry Union v Victoria University [2014] FWC 7711.

Macquarie On-line dictionary.

 18   PR908236.

 19   Ibid at [57].

 20   Ibid at [63].

 21   Moreland City Council Enterprise Agreement 2015 [AE416327] at cl. 8.5.5.

 22   [2016] FWCFB 8120.

 23   Exhibit ASU-5, paragraph 1.

 24   Transcript, PN28.

 25   Exhibit ASU-5, paragraphs 2-4.

 26   Transcript, PN1263-4.

 27   PR594505.

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