[2017] FWCFB 1344
FAIR WORK COMMISSION

DECISION


Fair Work Act 2009

s.604—Appeal of decision

Construction, Forestry, Mining and Energy Union-Construction and General Division
v
Bluescope Steel (AIS) Pty Ltd T/A Bluescope Steel
(C2016/6961)

VICE PRESIDENT CATANZARITI
DEPUTY PRESIDENT LAWRENCE
COMMISSIONER CAMBRIDGE

SYDNEY, 16 MARCH 2017

Appeal against decision [2016] FWC 7842 of Commissioner Riordan at Sydney on 7 November 2016 in matter number C2016/4193.

[1] On 7 November 2016, Commissioner Riordan issued a Decision, 1 which found that the allowances identified in clause 9.1.2 (“Hot Work Allowance”) and 9.3.1 (“Height Allowance”) of the Bluescope Steel Port Kembla Steelworks Agreement 2015 (“the Agreement”) apply to the classifications contained in Part C of the Agreement, that is, “bricklayers” and “labourers assisting bricklayers” employed by Bluescope Steel (“the Respondent”). Accordingly, the Commissioner found that these allowances are not payable to employees who are classified as “Refractory Installers” or “Refractory Installation Bricklayers”.

[2] On 28 November 2016, the CFMEU (“the Appellant”) lodged a Notice of Appeal, appealing the Decision made by the Commissioner and subsequently lodged an amended Notice of Appeal on 3 February 2017.

[3] We heard the appeal on 2 March 2017 and reserved our Decision. At the hearing, Mr P. Boncardo appeared for the Appellant and Mr K. Brotherson, solicitor, sought permission to appear for the Respondent. Given the complexity of the matter, and having regard to section 596 of the Act, permission was granted to the Respondent to be represented.

Decision

[4] The Commissioner found that the phrases “bricklayers” and “labourers assisting bricklayers” are descriptors of the applicable classifications, not the skills being utilised by the employee. As such, the Commissioner found that the Hot Work Allowance and the Height Allowance apply to those employees who are classified under the unrestructured classifications in Part C of the Agreement, that is, “bricklayers” and “bricklayer’s labourers”. In this regard, the Commissioner noted that it was a convenient but fallacious argument for the Appellant to suggest that a “bricklayer’s labourer” is a different role to a “labourer assisting bricklayer”. The Commissioner noted that if he were to accede to the CFMEU’s argument, then those employees who are employed as Refractory Installation Bricklayers or Refractory Installers would be paid these allowances twice, which could not be condoned.

[5] Applying the principles in Australian Meat Industry Employees Union v Golden Cockerel Pty Ltd 2 (“Golden Cockerel”), the Commissioner found that the Hot Work Allowance and the Height Allowance are payable to the classifications contained in Part C of the Agreement, that is, “bricklayers” and “bricklayer’s labourers”. Accordingly, the Commissioner found that these allowances are not payable to employees who are classified as Refractory Installers or Refractory Installation Bricklayers.

The Appeal

[6] At the heart of the Appeal was whether Refractory Installers and Refractory Installation Bricklayers employed by the Respondent were entitled to the Hot Work Allowance and the Height Allowance.

Appellant’s Submissions

[7] The Appellant submitted three main grounds of appeal, which we summarise as follows.

[8] Firstly, the Appellant contended that the plain and ordinary meaning of the actual words used should be the starting point for determining the meaning of a term in an enterprise agreement. 3 In this regard, the Appellant submitted that the Commissioner paid little, if any, regard to the plain and ordinary meaning of the provisions of clauses 9.1.2 and 9.3.1 of the Agreement, nor did he have regard to the salient surrounding clauses or the object of the disability allowances.

[9] The Appellant asserted that clause 9.1.2 of the Agreement does not limit the entitlement to a Hot Work Allowance to any particular classification under the Agreement. Rather, the Appellant posited that clause 9.1.2 directs attention to the nature of the work being performed and not a particular classification. In this regard, the Appellant contended that the “work” clause 9.1.2 encapsulates is defined in two ways:

[10] On this basis, the Appellant contended that employees who engage in the act of laying bricks fall within clause 9.1.2. The Appellant asserted that the Commissioner’s conclusion that “bricklayers” captured only the classification of “bricklayer” in Part C of the Agreement untenably attempted to distinguish between the classification of “bricklayer” from “Refractory Installation Bricklayers”. Further, the Appellant submitted that the Commissioner’s analysis pays no regard to the fact that no classifications for “carpenters” and “plumbers” also encompassed by clause 9.1.2(b)(iv) appear in the Agreement. As such, the Appellant submitted that this points to the allowance being payable depending on the type of work performed, not the classification.

[11] Additionally, the Appellant posited that the categories of workers encompassed by clause 9.1.2 are included in the classifications for the restructured rates of pay set out in Part B. Therefore, the Appellant noted that this is an important contextual indicator against the allowances being payable only in relation to unrestructured classifications in Part C. The Appellant contended that the Respondent led evidence that, from time to time, its employees work in the conditions contemplated by the allowance. 4 The Appellant submitted that the evident purpose of clause 9.1.2 was to compensate employees from time to time to work in invidious hot conditions. In this regard, the Appellant asserted that the Commissioner was bound to construe clause 9.1.2 in accordance with its purpose and in a manner beneficial to employees.5 The Appellant noted that it was not clear how an allowance that applies intermittently, and may never apply at all to an employee, could be incorporated into an hourly rate.

[12] In relation to clause 9.3, the Appellant similarly contended that the Height Allowance was directed to a type of worker performing a type of work. In this regard, the Appellant contended that the use of the phrase “bricklayers” conveys that it is not limited to the classification “bricklayer”, but captures any employee performing bricklaying work. The Appellant asserted that the use of the conjunctive word, “when”, identifies three conditions precedent to an entitlement to the allowance:

[13] The Appellant submitted that the Commissioner had no regard to these three propositions. The Appellant noted that the Commissioner also failed to consider a further contextual matter in construing clauses 9.1.2 and 9.3.1, namely, the location of Table 8 in Part B of the Agreement. The Appellant asserted that the rates set out in Part B, including the “other rates and allowances” in Table 8 are clearly contemplated to pertain to employees falling within any of the restructured classifications. If the parties had intended these rates and allowances to apply only to unrestructured classifications, logic would have dictated, firstly, that the Agreement stipulate this and, secondly, that they be located in Part C of the Agreement which deals with unrestructured classifications.

[14] For the above reasons, the Appellant contended that the Commissioner’s construction of clauses 9.1.2 and 9.3.1 was erroneous.

[15] Secondly, the Appellant contended that the Hot Work Allowance and Height Allowance are additional to the 38-hour weekly rate employees are entitled to. The Appellant contended that the Commissioner ignored this and found that the allowances are not additional to the rates of pay for a 38-hour week contained in Part B of the Agreement, but rather, already included in them. In this regard, the Appellant noted that the introductory words of clause 9 demonstrated that the allowances provided under that clause are additional to the rates of pay prescribed under clause 6. The Appellant asserted that clauses 9.5, 9.7, 10.2, 11 and 18.1, in particular, demonstrate that the Agreement contemplates disability allowances being separate to and distinct from the 38-hour weekly rates. Therefore, the Appellant concluded that there was no basis for the Commissioner to find that the disability allowances were already “rolled up” in the 38-hour weekly rates.

[16] Thirdly, the Appellant contended that the Commissioner erred in considering the 1995 Decision of Hungerford J 6 when construing the Agreement. The Appellant submitted that the Respondent failed to put the Award made by Hungerford J into evidence and contented itself by latching onto a cryptic remark made by Hungerford J. Namely, the Respondent latched onto Hungerford J’s statement that “separate allowances will be incorporated in the wage rates” to ground an assertion that disability allowances were incorporated into an employee’s hourly rate of pay in an enterprise agreement made 18 years later. In this regard, the Appellant asserted that the Commissioner took a drastic and unwarranted step in reading qualifications or caveats into the Agreement that were not present in the language of that instrument.

[17] For the above reasons, the Appellant contended that the appeal should be allowed, that the Commissioner’s Decision be quashed and the Full Bench make the orders sought by the Appellant.

Respondent’s Submissions

[18] The Respondent contended that there was no appellable error in relation to the construction of the Agreement by the Commissioner. In particular, the Respondent asserted that the Commissioner properly formed the view that if the wording of the Agreement was not otherwise plain, the history of the relevant classifications confirmed that the claimed disability allowances are not applicable to employees classified as Refractory Installation Bricklayer and Refractory Installer.

[19] The Respondent submitted that there is no error in the Commissioner’s finding that the Heat Allowance and the Height Allowance are not applicable to employees classified as Refractory Installation Bricklayer and Refractory Installer. The Respondent noted that the Commissioner concluded that the terms “bricklayers” and “labourers assisting bricklayers” in sub-clauses 9.1.2(a) and 9.3 are references to the relevant unrestructured classifications of “bricklayer” and “bricklayer’s labourer” and not general descriptors of a type of work. In this regard, the Respondent contended that this was a proper finding, and one open to the Commissioner.

[20] The Respondent submitted that the Appellant’s position that the entitlement to relevant allowances arises for a type and/or location of work ignored the context of the Agreement. Rather, the Respondent asserted that the correct position is that entitlements to differing allowances arise from the specific circumstances specified in the various sub-clauses, which can be:

[21] The Respondent noted the Appellant’s assertion that the use in the relevant provisions of the plural terms “bricklayers” and/or “labourers assisting bricklayers” is as a descriptor and indicative of a type of work or worker rather than a particular classification. In this regard, the Respondent contended this assertion had no weight and outlined that the history of applicable instruments confirms these terms existed prior to the establishment of the classifications of Refractory Installation Bricklayer and Refractory Installer to which no separate allowances have ever applied or been paid.

[22] The Respondent further asserted there was nothing in the Decision at first instance to support the Appellant’s submission that the Commissioner erred by not taking account of the purpose or object of the disability allowances. In this regard, the Respondent contended that the Commissioner’s findings at paragraph [14] and [15] of his Decision confirm that he did understand those issues, but did not accept that what the Appellant claimed was provided for in the Agreement.

[23] The Respondent submitted that based on the evidence, including the restructure of its refractory operations in 1995 and the Decision of Hungerford J, the Commissioner was entitled to conclude the rates of pay for employees classified as Refractory Installation Bricklayer and Refractory Installer included compensation for disability rates.

[24] Further, the Respondent contended that, to the extent the plain meaning of the provisions does not resolve the issue, and an ambiguity exists, evidence of surrounding circumstances and the context and purpose of the provisions reaffirms the construction advocated by the Respondent. The Respondent outlined nine examples that it contended were relevant to the Decision at first instance in relation to the history of the Agreement. We will not recite those for the purposes of this Decision.

[25] The Respondent submitted that, to the extent of any ambiguity in the relevant provisions, the Commissioner was entitled to have regard to evidence of surrounding circumstances, including the relevant history, in making his Decision and having regard to those circumstances, the Commissioner was entitled to find as he did. Further, the Respondent asserted that the Commissioner was not bound to observe rules of evidence, and was entitled to have regard to the restructure of its refractory operations, Refractory Award and the Decision of Hungerford J.

[26] For the above reasons, the Respondent contended that permission to appeal should not be granted, or in the case that permission to appeal is granted, the appeal be dismissed.

Consideration – Permission to Appeal

[27] This appeal is one to which section 400 of the Act applies. 7 Section 400 provides that:

[28] In the Federal Court Full Court Decision in Coal & Allied Mining Services Pty Ltd v Lawler and others, Buchanan J (with whom Marshall and Cowdroy JJ agreed) characterised the test under section 400 as “a stringent one”. 8 The task of assessing whether the public interest test is met is a discretionary one involving a broad value judgment.9 In GlaxoSmithKline Australia Pty Ltd v Makin a Full Bench of the Commission identified some of the considerations that may attract the public interest:

[29] It will rarely be appropriate to grant permission to appeal unless an arguable case of appealable error is demonstrated. This is so because an appeal cannot succeed in the absence of appealable error. 11 However, the fact that the Member at first instance made an error is not necessarily a sufficient basis for the grant of permission to appeal.12

[30] We now turn to consider whether permission to appeal should be granted.

[31] The Appellant contended that the Commissioner had little, if any, regard to the plain and ordinary meaning of clauses 9.1.2 and 9.3.1. We do not agree with this submission. The Commissioner had regard to the principles elicited in Golden Cockerel in relation to construing the Agreement at paragraph [8] of his Decision. In applying those principles, the Commissioner undertook an orthodox approach in construing the Agreement. Therefore, we are not satisfied the Commissioner erred in this regard.

[32] Additionally, the Appellant submitted that the Commissioner erred in finding that Refractory Installers and Refractory Installation Bricklayers employed by the Respondent were not entitled to the Hot Work Allowance or the Height Allowance. Further, that the Commissioner erred by failing to consider the purpose or object of the disability allowances. The Commissioner demonstrated his understanding of the objects of the disability allowances at paragraphs [14]-[15] of his Decision. However, he found that Refractory Installers and Refractory Installation Bricklayers were not entitled to the Hot Work Allowance or the Height Allowance. In particular, the Commissioner noted at paragraph [15] of his Decision that:

[33] In reaching this conclusion, the Commissioner had considered the context and purpose of the Agreement and, in doing so, undertook an orthodox approach. Accordingly, we are not satisfied that the Commissioner erred in making this finding.

[34] The Appellant also contended that the Commissioner erred by taking into account the 1995 Decision of Hungerford J. We disagree with this submission. The Commissioner referred to Golden Cockerel at paragraph [8] of his Decision, which stipulates that “regard may be had to surrounding circumstances in determining whether an ambiguity exists.” 13 Accordingly, there was nothing preventing the Commissioner from having regard to evidence of surrounding circumstances, including the relevant history, in making his Decision. Thus, we are not satisfied that the legal principles applied by the Commissioner were disharmonious when compared to Golden Cockerel and, therefore, we are of the view there is no arguable case of error in relation to this part of the Commissioner’s Decision.

[35] The Appellant also submitted that the Commissioner erred in finding that Hot Work Allowance and the Height Allowance were “rolled up” in the 38 hour weekly rates. The Commissioner had regard to the Decision of Hungerford J in concluding at paragraph [14] of his Decision that such allowances were, in fact, “rolled up”. As noted above, the Commissioner was entitled to have regard to the surrounding circumstances, including the relevant history, in making his Decision. In doing so, we are not satisfied that the Commissioner construed clauses 9.1.2 and 9.3.1 in an unorthodox manner such that his construction demonstrated a failure to apply the ordinary meaning of the words in those clauses. Accordingly, we are not satisfied that the Commissioner erred in this regard.

[36] We are also not satisfied that there is an arguable case of error in relation to any other ground for appeal asserted by the Appellant. Further, we have considered whether this appeal attracts the public interest, and we are not satisfied that:

Conclusion

[37] For the reasons set out above, we are not satisfied, for the purposes of section 400(1) of the Act, that it would be in the public interest to grant permission to appeal.

[38] Permission to appeal is not granted.

Seal of the Fair Work Commission with member's signature

VICE PRESIDENT

Appearances:

P. Boncardo for the Appellant.

K. Brotherson, solicitor, for the Respondent.

Hearing details:

2017.

Sydney:

2 March

 1   [2016] FWC 7842.

 2   [2014] FWCFB 7447, [20].

 3   Bryce v Apperley (1998) 82 IR 448, 452; Franklins Pty Ltd v Metcash Trading (2009) 76 NSWLR 603, [19]-[23].

 4   Statement of Paul Cugaly, paragraph [5], AB 132.

 5   TWU v Toll [2006] NSWIRComm 123, [24].

 6   IRC95/967 – BHP Steel (AIS) Pty Ltd – Port Kembla Restructured Refractory Employees Classifications Rates of Pay Award. Dated: 18/05/95.

 7   See Australia Postal Corporation v Gorman [2011] FCA 975 at [37].

 8   (2011) 192 FCR 78 at [43].

 9   O’Sullivan v Farrer (1989) 168 CLR 210 per Mason CJ, Brennan, Dawson and Gaudron JJ; applied in Hogan v Hinch (2011) 85 ALJR 398 at [69] per Gummow, Hayne, Heydon, Crennan, Kiefel and Bell JJ; Coal & Allied Mining Services Pty Ltd v Lawler and others (2011) 192 FCR 78 at [44] -[46].

 10   [2010] FWAFB 5343 at [27], 197 IR 266.

 11   Wan v AIRC (2001) 116 FCR 481 at [30].

 12   GlaxoSmithKline Australia Pty Ltd v Makin [2010] FWAFB 5343 at [26]-[27], 197 IR 266; Lawrence v Coal & Allied Mining Services Pty Ltd t/as Mt Thorley Operations/Warkworth [2010] FWAFB 10089 at [28], 202 IR 288, affirmed on judicial review in Coal & Allied Mining Services Pty Ltd v Lawler (2011) 192 FCR 78; NSW Bar Association v Brett McAuliffe; Commonwealth of Australia represented by the Australian Taxation Office [2014] FWCFB 1663 at [28].

 13   Australian Meat Industry Employees Union v Golden Cockerel Pty Ltd [2014] FWCFB 7447, [41].

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