T12350
|
TASMANIAN INDUSTRIAL COMMISSION Industrial Relations Act 1984 Construction, Forestry, Mining and Energy Union, Tasmanian Branch and Zinifex Hobart Smelter
Industrial dispute - the alleged breach of a registered agreement - effect of two agreements covering same employees REASONS FOR DECISION [1] On 24 October 2005 the Construction, Forestry, Mining and Energy Union, Tasmanian Branch (CFMEU) applied to the President, pursuant to s.29(1) of the Industrial Relations Act 1984 ("the Act"), for a hearing before a Commissioner in respect of an industrial dispute with Zinifex Hobart Smelter ("the company") arising out of the alleged breach of Clause 4.1 of the Zinifex Hobart Smelter Enterprise Agreement 2004 regarding underpayment of salaries to named employees. [2] The application reads:
[3] A hearing commenced at the Commonwealth Law Courts, Hobart, on Thursday 8 December 2005. Mr B Bodkin appeared for the CFMEU and Mr R West was granted leave to appear on behalf of the company. The hearing continued on 18 and 19 January 2006. On 19 January Mr R Flanagan from the Australian Workers Union, Tasmania Branch (AWU) sought and was granted leave to intervene. BACKGROUND [4] The Zinifex Hobart Smelter is subject to the Zinifex Hobart Smelter Enterprise Award ("the award"). [5] In 1996 Pasminco Australia Limited (now Zinifex) and the four unions who represent employees at the smelter entered into an enterprise agreement, registered under s.55 of the Act. A single bargaining unit negotiated a single agreement which covered award employees. This remained the case until 2004, with the last single site agreement being the Pasminco Hobart Smelter (Administrator Appointed) Agreement 2002 ("the Pasminco agreement"). The unions party to the single site agreements were the CFEMU, the AWU, the Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union ("the AMWU") and the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia ("the CEPU"). Broadly, the CFMEU and the AWU represent production employees and the AMWU and the CEPU represent maintenance employees. [6] In 2004 there was a difference of opinion between the unions over the issue of performance-based pay. This resulted in the breakdown of the single bargaining unit. As a consequence, the CFMEU and the AWU entered into an agreement with the company which purported to cover production employees - the Zinifex Hobart Smelter Enterprise Agreement 2004 ("the production agreement") and the AMWU and the CEPU entered into a separate agreement - the Zinifex Hobart Smelter Maintenance Employees Enterprise Agreement 2004 ("the maintenance agreement") for maintenance workers. [7] The maintenance agreement introduced a new classification structure for trades persons and trades assistants, which included a class of employee described as "non-trades maintenance employees". The company subsequently applied that classification to employees who had previously been classified and paid as production/service persons under the award and under the Pasminco agreement. At the same time, the new production agreement retained the structure and classification for production/service person. [8] The dispute concerns a number of CFMEU members who were previously classified as production/service persons and who the company has reclassified as non-trades maintainers under the maintenance award. These employees are now being paid a lower salary than they would have received under the production agreement; for example, the CFMEU claims that one employee, Mr Peter Riley, is being paid $1178 less per annum than he would have been entitled to as a production/service person under the production agreement. They say that under the production agreement he would have been a Grade 7 production/service person at an annual rate of $46,738, whereas under the maintenance agreement his salary has been determined as being $45,560. [9] The CFMEU's claim is that the employees should be recognised as being covered by the production agreement and that they should be back paid the amount that they would have received under that agreement. [10] Throughout the hearing the employees concerned were variously referred to as production/service persons, trades assistants, TAs, and non-trades maintainers. It is common ground that all the titles referred to the employees in question and that their duties were the same regardless of what title was used. The Award and the Agreements [11] The Zinifex Hobart Smelter Enterprise Agreement 2004 (the production agreement) Section 1.2 "Scope" reads: "This Agreement is established in respect to the production of electrolytic zinc, zinc oxide, and other products of zinc ores at Zinifex Hobart Smelter's operations at the Risdon Plant." Section 1.3 sets out the parties bound as being the Zinifex Hobart Smelter, the AWU, the CFMEU and "employees classified within Section 4 of this agreement." Section 1.4 reads:
Section 4 sets out classifications and remuneration. It includes the classifications of Production/Service Persons for 12 hour day - day work; 12 hour - shiftwork; 8 hour day - day work; and 8 hour day - 7 days shift. The employees the subject of this dispute are 8 hour day workers. [12] There is no definition of "production service workers" contained in the production agreement, however there are classification descriptors contained in the parent award. [13] The Zinifex Hobart Smelter Maintenance Employees Enterprise Agreement 2004 (the maintenance agreement) Section 1.2 "Scope" reads:
Section 1.3 sets out the parties bound as being the Zinifex Hobart Smelter, the CEPU, the AMWU and "employees classified within Section 4 of this agreement." Section 1.4 says:
Section 4 sets out classifications and remuneration. It includes the classifications of Trades Employees - Daywork; Tradesperson - Shiftwork; and Non Trades Maintenance Employees - Daywork. [14] There is no definition of the classification "non trades maintenance employees" in either the maintenance agreement or the parent award. Appendix 6 - Clause 3 deals with transitional arrangements:
[15] The Zinifex Hobart Smelter Enterprise Award Clause 3 - "Scope" reads:
Part II - Clause 3 - contains classification descriptors. There are two streams, one for "Production/Service Person" and one for Trades/Technical Person. Production/Service Person "shall mean an employee who has acquired......points from the relevant Production/Service Person Training Matrix". Trades/Technical Person "shall mean an employee who is employed in a recognised trade classification and who has.....points from the relevant Trade/Technical Training Matrix, or....modules from the appropriate......course." Progression up the classification structure is based upon the acquisition of points from the relevant training matrices. THE EVIDENCE Mr Marshall Reeves gave evidence for the applicant. Mr Matthew Double gave evidence for the respondent. Marshall Reeves [16] Mr Reeves, by way of written statement1 attested that he was an organiser with the CFMEU and that his core duties were to service and represent members at the Zinifex Hobart Smelter. Prior to that, he had been employed at the smelter for more than eighteen years. [17] He gave evidence of the history of the agreements and awards as they related to production/service workers. He said that when he commenced work there were two streams of production workers: operators and general service persons. According to Mr Reeves, it has always been understood that production/service persons are production employees and that the maintenance work they perform is part of the production process. [18] In 1988 a Restructuring Agreement reflected a new seven level structure for production/ service person classifications. Employees' skills were given a points value on a training matrix (one point per hour of training) and they were classified according to the points value of their training. That system has not changed. [19] In 1993, following redundancies, employees were required to multi-skill and cross-skill. Production/service persons were asked to acquire skills in the trades/technical areas, and trades assistants were asked to cross-skill into the production service person area, thus reducing what had previously been a clear demarcation. [20] Mr Reeves said that the production/service persons have trade skills, maintenance skills and industrial cleaning skills and they do not performance maintenance tasks only. They are on eight-hour shifts, compared to operators who are on 12 hours shifts. He agreed that they work the same shifts as tradesmen and are in maintenance teams working under the supervision of a team maintenance leader, and through him, to a maintenance superintendent. There are separate operations superintendents. [21] In 2004, after a split between unions in the single bargaining unit relating to performance-based pay, there were separate meetings and votes for the two different agreements. The employees [the subject of this dispute] were present when the production agreement was voted on. Mr Riley had been part of the CFMEU/AWU negotiating committee. Mr Reeves' evidence was that they told him that they did not attend the maintenance agreement meetings. There was no discussion involving the CFMEU and the maintenance unions, nor with Zinifex, in relation to any reclassification of production/ service persons. [22] The CFMEU was never told, either before or after, that the position of production/service person - 8 hour day - would be replaced by the non trades daywork classification. He was adamant that he had no knowledge of the non-trades maintainers classification until Mr Riley showed him a letter in November 2005. It was Mr Reeves' understanding and belief that the employees would continue to be employed under the same classification as before and that they would be covered by the production agreement. [23] In November 2005 CPSU members had their salaries "red circled" [frozen] following their pay review. If they had been classified as production/service persons they would have received an increase of about $1800 on top of the 2004 increase. For example, Mr Riley's new salary is $45,560, under the production agreement it would be $46,738. [24] Mr Reeves said that when he raised the matter with Zinifex he was told that the employees were now under the maintenance agreement, which had introduced a new classification structure and pay scale that covered all employees previously classified as Production Service Person - 8 hour - Daywork. Matthew Double [25] A written statement was tendered.2 Mr Double's evidence was that he had been employed for two years as the Human Resources Manager for the Zinifex Hobart Smelter. [26] He said that the smelter has four production departments where production employees are directly involved in the operation of equipment and the production of electrolytic zinc and other products. [27] There are seven "non-trades maintainers"; five are the subject of this claim. Their role is to service and maintain the smelter, performing non-trades maintenance work. It has always been the case that they report to a maintenance team leader who reports to the maintenance superintendent. They are not trained or required to operate the production equipment. Four employees who are not involved in maintenance are classified as production/service persons under the production agreement. The other employees classified under that agreement are operators in the production streams. [28] Mr Double did not agree that the employees had a service role within the production departments. He said that they had a service role within the maintenance department; they went into the production departments to service the plant and equipment. [29] Mr Double agreed that the non-trades maintainers are performing the same work as they did under the 2002 Pasminco agreement when they were classified as production/service persons and that there has been no change to the organisational structure. The term "non-trades maintainer" was invented for the purposes of the maintenance agreement. [30] The CFMEU and AWU called off enterprise bargaining negotiations in February 2004 because of an impasse over performance-based pay. Mr Double said that the AMWU and the CEPU later told Zinifex that they would continue negotiations if Zinifex would consider a new classification structure for maintenance employees. This happened, and, whilst originally intended to apply only to tradesmen traditionally covered by those unions, "at the eleventh hour" and at the instigation of the AMWU, the negotiations included non-trades maintainers. This was about mid-August 2004. [31] Mr Double agreed that he had never "put it on the table" during the negotiations with the CFMEU and the AWU that the employees would cease to be covered by the production agreement, which was agreed upon in late August. He informed the CFMEU and the AWU about the separate negotiations, but he did not formally keep them updated on progress. [32] Zinifex communicated with all employees about the negotiations by way of notices and presentations. He believed that the CFMEU and AWU representatives were aware of the communications and he advised Marshall Reeves that non-trades maintainers would be included. When cross-examined, he said: "I had a discussion and albeit very briefly" [with Mr Reeves]3. [33] Mr Double said that the company made approximately 100 copies of the maintenance agreement and a summary document which said that:
[34] External consultants were brought in and a structure for the maintenance agreement was developed based on the Metal, Engineering and Associated Industries Award, 1998. Employees were assessed against the structure prior to voting on the agreement. All the employees, with the exception of Mr Riley who was on annual leave, were assessed before the vote. After the assessments the team leaders told each employee of the outcomes. Mr Double agreed that assessment against the competency standards does not mean that a person would come under some new agreement, but the reason they were assessed was to determine what their rate of pay would be under the new agreement. This happened for all tradespeople and non-trades maintainers but not for production employees. [35] Mr Double said that it was recognised that the new structure would involve some tradesmen and non-trades maintainers becoming entitled to a lesser rate of pay than under the production agreement and that was dealt with in an appendix to the maintenance agreement which ensured that no-one had a pay reduction. [36] The production agreement was made before the maintenance agreement. The final vote for the approval of the production agreement was 31 August 2004. The hearing for approval of the production agreement was 6 September 2004. One month later, on 4 October 2004, the vote for the maintenance agreement was held. Mr Double agreed that whilst employees were released from duty to attend the maintenance vote he could not be certain that they had attended the meeting. On 5 October 2004 the maintenance agreement was lodged with the Commission. [37] Mr Double's evidence included extract from transcripts of the Commission hearings of the making of the two agreements, during which Mr Flanagan of the AWU told the Commission that, in relation to the production agreement,
[38] and that:
[39] When the maintenance agreement came before the Commission on 18 October 2004, Mr Double told the commission in relation to coverage that:
SUBMISSIONS Mr Bodkin for the CFMEU [40] Mr Bodkin said that Mr Reeves is well qualified to inform the Commission about the general service person classification and the 2004 negotiations. His evidence was not shaken during cross-examination. [41] Mr Reeves' evidence was clear that no one had informed him that the employees would be covered by the maintenance agreement, which conflicts with Mr Double's evidence. Mr Reeves' evidence was that the relevant production/service persons attended meetings and voted to accept the production agreement. That was in late August well before the vote on the maintenance EBA, which took place on 4 October 2004. Significantly, the evidence was that the proposal was conceived by the AMWU and raised very late during the negotiations. The relevant employees could not have known before at the very earliest late August 2004. It is clear that the production agreement was wrapped up by 16 August. [42] Mr Bodkin submitted that the CFMEU and its members had every right to believe that the production agreement regulated the employment of production/service persons. He said that Mr Double's evidence showed that he agreed that the duties and responsibilities of the employees had not changed, the organisational structure had not changed and the rosters had not changed. The only change was in the industrial agreement coverage and the job title. [43] Whilst Mr Double said that he accepted the AMWU's assurance that they would liaise with the CFMEU, the evidence was that it did not happen. Mr Double said he assumed that non-trades maintainers knew they would come under the maintenance agreement; that is simply an assumption. Mr Double said that it was the understanding of the four unions on site; Mr Reeves and Mr Flanagan made it clear that there was no such understanding. [44] In Mr Bodkin's submission, it is ludicrous to suggest that employees would knowingly enter into a new arrangement whereby their pay rise for one year would be absorbed into the following year's pay rise. Nor is it probable that the CFMEU would accept the AMWU and Zinifex doing a deal about the CFMEU's members without demur. [45] Mr Bodkin submitted that the evidence invited two conclusions: one, that the CFMEU was not aware of the proposal when it completed its own EBA, which included the production/service persons eight hour day classification; and the second is that Zinifex negotiated the inclusion of non-trades maintainers in the maintenance agreement with the AMWU after reaching agreement with the CFMEU about the production/service persons. [46] Mr Bodkin contended that the employees should be paid according to the production agreement. He said that the parent award has two underpinning streams and that the employees the subject of this dispute had been classified according to the production/service person stream under the award. The company had acted unilaterally in moving the employees from one stream to the other in reclassifying them as non-trades maintenance workers. [47] The scope clause of the maintenance agreement differs from the production agreement with the insertion of the words "repair and maintenance of plant associated with". These are words of limitation, intended to distinguish repair and maintenance work from the production work. The work of production/service persons has always been understood to be production work as the title denotes. [48] Clause 1.4 of the production agreement says that it is to be read in conjunction with the award, therefore in order to interpret the meaning of production/service person in the agreement it is necessary to go to the classification descriptors in clause II of part 3 of the award and to utilise the point system which has been in place since 1990. [49] As the maintenance agreement does not define the duties for the classification of non-trades maintainers and the parent award does not contain that classification it is impossible to ascertain from the relevant industrial instruments the duties and responsibilities of "non-trades maintainers". Each of the employees has been classified and paid as a production service person in accordance with the skills matrix, the award and the single agreement that operated until 2004. [50] The employees had voted on the production agreement and had no involvement in the meetings or the voting in relation to the maintenance agreement. Their classifications were retained in the production agreement. The employees were engaged in the production of zinc and are able to be distinguished from maintenance workers who are tradesmen and trades assistants. [51] Mr Bodkin contended that if some or all of the work of production/service person is capable of being covered by the maintenance agreement that does not remove the work from coverage of the production agreement. [52] The work performed by the employees is covered in both agreements, although the name is different the work is the same. Where two agreements prescribe different benefits what benefits apply is well settled in the award arena. In the TCFU v National Coating Company 2003 a Full Bench of the Australian Industrial Relations Commission ("AIRC") found:
[53] It was said in CSROA v CSR Limited [1997] that:
[54] Mr Bodkin said that prima facie he could see no reasons why the same principle should not apply to industrial agreements. Section 58(2) of the Act provides:
[55] The production agreement clearly provides more favourable conditions and rates of pay for the relevant employees than the maintenance agreement. [56] Mr Bodkin submitted that when the maintenance award was before the Commission, Zinifex should have fully and frankly informed Commissioner Abey of the circumstances and the detail of what had happened in respect of the production/service persons. If the Commission had been informed by the company that employees traditionally covered by the CFMEU were to be transferred to a new agreement to which they were not a party then the Commission may have exercised its discretion under s.55(4)(b) and have hesitated to approve the agreement. [57] Mr Bodkin said that parties appearing before a Court or Tribunal have a duty to fully and frankly inform them in relation to all relevant matters. A Full Bench of the Commission in Energy Developments Limited10 said:
[58] The Commission may have been placed in the position where it inadvertently failed to accord natural justice to the relevant employees adversely affected by the making of the maintenance agreement. It is a matter of fairness to the employees and there is a clear duty in this jurisdiction for the Commission to act according to equity, good conscience and the merits of the case. The employees in this concerned have not been treated fairly. [59] Mr Bodkin said that he was not seeking to have the maintenance agreement set aside, but to remedy the situation in relation to the five employees. Whilst the primary position was that the maintenance agreement does not apply, if the Commission finds that both agreements apply, then employees should be entitled to the superior benefits. Mr Flanagan for the AWU [60] Mr Flanagan said that it was the view and understanding of the AWU that the production agreement extends to and covers TA's [production/service persons]. [61] The Commission is being asked to determine whether or not there is a breach of the production agreement. If that is the case then the Commission should issue an order to ensure compliance with that agreement. The Commission should rely on the Acts Interpretation Act of Tasmania. The Commission must look at the words that are used in the industrial agreement. There is no ambiguity and it is only when there is ambiguity that the Commission should look to other evidence to determine whether there has been a breach of an obligation. There is no need to consider whether there has been a meeting of the minds on a particular matter, it is only necessary to determine whether there has been a breach of an agreement on a simple reading of the document. Mr West for Zinifex [62] Mr West submitted that the employees were properly classified under the new classification structure set out in the maintenance agreement. [63] It was the company's position that the employees were aware of the implications at the time they voted for the new agreements and they knew they would be translated to the maintenance agreement. There were open negotiations with the relevant unions and the unions entered into the agreements after consultation with the employees. [64] The company accepts that if the employees are subject to the maintenance agreement that does not mean they are not subject to the production agreement. An employee can be subject to two agreements. If the Commission finds that they are subject to the production agreement, then the company accepts the submissions of Mr Bodkin that they are entitled to the benefits of both agreements and therefore the higher entitlement applies. [65] Mr West submitted that what the Commission has to determine is whether the production agreement was intended by both parties to apply to production/service persons - eight hour day work. The company's position is that it never intended that it did, and the union's is they did intend that it should. There is what purports to be an agreement, yet the parties are disagreeing about what they agreed to. Courts and Tribunals have developed some principles in dealing with such cases. [66] The Commission should, when interpreting an agreement, apply the rules applicable to the construction of contracts. Finkelstein J, in the case of the Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union and Skilled Engineering, said:
[67] The company submitted that there are two considerations which have been taken into account when the common law has dealt with the issue of how to construe a contract where the parties are putting alternative constructions. The first is referred to in Contract Law of Australia:
[68] This is illustrated in the case of Scriven Bros & Co, referred to in the text.
[69] Mr West said that in the present case the Commission should find that there is no agreement between the parties in respect of the classification of production/service person - 8 hour day classification. [70] He said that the second approach is, as referred to in Contract Law of Australia:
[71] If two parties contend different things the Court is able to accept one party's version and enforce the contract on that construction. [72] The Commission is required to view the matter objectively and not to have regard to the subjective intent of the parties. The Full Bench of the AIRC in an appeal in the case of Telstra and the CPSU and Ors reviews this issue in a case where there was an ambiguity or uncertainty in a certified agreement.
[73] The decision then lists a number of points of principle for resolving ambiguity in contracts, and goes on to say:
[74] Mr West submitted that the Commission is to objectively assess the facts to determine if there is a mutual agreement. If it concludes that the parties are not at idem then the conclusion must be that there has been no agreement. Objectivity requires the Commission to assess the circumstances from the perspective of a reasonable bystander. [75] Mr West said that the Commission ought give careful consideration to the submissions made by Mr Flanagan on behalf of the AWU. Mr Flanagan informed the Commission that the agreement only applied to the production workforce not the maintenance workers. [76] The decision to include non-trades maintainers in the maintenance award was public. There is conflict of evidence between Mr Double and Mr Reeves; Mr Double was definite that he had informed Mr Reeves and Mr Reeves was adamant that he had not. It is not uncommon for two individuals to have a misunderstanding of this kind; the Commission may choose to accept the evidence of one witness over another but it is equally open to find that there are two credible witnesses who give conflicting views and the Commission cannot be certain on that point. [77] An objective assessment of facts would show that non-trades maintainers were to be part of the maintenance agreement and the agreement with the CFMEU and the AWU was to be a production agreement, but if the Commission cannot come to that view then it is not reasonably open to conclude objectively that the joint intention of the parties was that the non-trades maintainers would be covered by the production agreement. [78] Mr West said that there is no argument about the duty of advocates to properly inform the Commission, whether a consent matter or not. In the Tasmanian legislation there is little guidance as to what are the relevant considerations for the Commission. In this case there was full disclosure of the terms of the agreement and there was some discussion on transcript about the implementation of the classification structure. It is not clear from Mr Bodkin's submissions exactly what relevant information should have been disclosed. [79] Mr West submitted that the correct approach based on the authorities is an objective assessment of the evidence without having regard for the subjective intent of the parties. The weight of evidence would make it unreasonable to accept the unions' view. If the Commission concludes that it can't accept the company's view then the Commission would have to conclude that there was no agreement and that particular provision of the production agreement would be void. FINDINGS I have read and considered all of the evidence and all of the authorities that were presented. [80] I make the following findings of fact: the employees had previously been classified as production/service persons; there was such a classification in the parent award; there had been such a classification in the Pasminco Agreement; there had been no change in the structure; and there had been no change in the work performed. It is common ground that the negotiations for the production agreement had commenced on the basis that production/service persons would be included in the production agreement; it is also common ground that the separate negotiations with the AMWU had been initiated on the basis of tradesmen only. [81] The CFMEU argued that the employees concerned were involved in a service role in the production departments, and the company argued that the employees were involved in maintenance work servicing the plant and equipment in the production departments. Clearly, both arguments are correct, according to point of view. I have concluded that, in this case, it is not necessary for me to make a determination as to whether the employees concerned were involved in production work or maintenance work. It is only necessary for me to determine, on a plain reading of the words in the agreements, which of the agreements applies to them. [82] The scope clauses in both agreements could equally apply to the employees: In the production agreement:
In the maintenance agreement:
[83] The parties bound by the agreements include, for both agreements - "Employees classified within Section 4 of this agreement." [84] There are classifications in both agreements that apply to the employees - Production/services Persons - 8 hour day - day work in the Zinifex Smelter Enterprise Agreement 2004 (production agreement) and Non Trades Maintenance Employees - Daywork in the Zinifex Hobart Smelter Maintenance Agreement 2004 (maintenance agreement). [85] There is a definition for production/service persons in the award but not in the production agreement and there is no definition for non-trades maintainers either in the award or in the maintenance agreement. The award is to be read in conjunction with the agreements. [86] It is common ground that the two classification titles "production/service persons" and "Non Trades Maintenance Employees - Daywork" are titles used to describe the same tasks and the same employees. The only difference being that the company has chosen to classify those employees as non-trades maintainers under the maintenance award, whereas previously, under the Pasminco Award, they had been classified as production/service persons. [87] The evidence was that the company's decision to reclassify the employees as non-trades maintainers and to pay them according to the maintenance agreement resulted in their salaries being frozen or "red-circled" at a later date, which means that they are currently receiving less than they would have under the production agreement. It is not clear whether that it is the case for all employees who have been reclassified in this manner and there was detailed evidence in respect of only one employee, Mr Riley. It is clear from that evidence that Mr Riley's salary under the maintenance agreement is less than it would have been under the production agreement. [88] The company argued that it suits their structure to include the employees in the maintenance agreement and the evidence was that the employees report up through the maintenance hierarchy. This was the first occasion that the employees were covered by separate agreements representing separate streams. The evidence is also that the proposition did not originate with the company but came from the AMWU. The attraction of such an arrangement for the company and for the AMWU is self-evident; whether it is fair that it should result in a structure resulting in lower wage outcomes for the employees concerned is another matter. [89] Historically, the employees in question have been production/service persons under the terms of the award and the Pasminco agreements. That is not to say that it is not open to the parties to change that situation through the agreement-making process. [90] Section 60 of the Act provides:
[91] In mid-August 2004, at the instigation of the AMWU, the company agreed to include non-trades maintainers in the maintenance negotiations. From the evidence it appears that until the suggestion was raised by the AMWU it had been the company's intention that the employees would continue to be covered by the production agreement, which was made before the maintenance agreement. The CFMEU and the AWU, as parties to the production agreement, had no reason (unless specifically informed) to suppose that anything had changed in relation to the employees. I accept that by the time the production agreement was before the Commission for approval and registration, the company intended that the maintenance agreement would apply to the employees. Whilst I do not go so far as to say that the company deliberately concealed their dealings with the AMWU in relation to the employees, it is clear that little if any effort went into informing the CFMEU. Mr Double's evidence was that he relied upon the AMWU to inform the CFMEU. There is dispute as to whether or not Mr Double informed Mr Reeves. It is more likely that he did not, given that it is unlikely that Mr Reeves would forget such a thing and he was unshaken in cross-examination. [92] I find that, on the balance of probabilities, the CFMEU and the AWU were unaware at the time the production agreement was registered in the Commission that the company was negotiating an agreement with the AMWU which included a classification which purported to cover the production/service persons, renamed non-trades maintainers. [93] As to whether or not the employees themselves were aware, I find it more probable that they were not aware. The evidence is inconclusive as to whether or not they attended maintenance agreement meetings, Mr Reeves says that CFMEU members told him that they did not; it is clear, however, that some at least did attend production agreement meetings and voted for that agreement. There is insufficient evidence to support a definite finding that the employees' participation in the competency assessment meant that they knew that they would be covered by a different agreement. The evidence was that the assessment took place some time before 31 August, but does not disclose how long before. The production union members approved the revised production agreement on 31 August. [94] The evidence shows that the parties were not at idem when the production agreement was made. Notwithstanding the submissions of Mr Flanagan on the day the production agreement was made, I find that the unions thought that they were making an agreement which would apply to the employees the subject of this dispute and that the company knew that there would be a subsequent agreement which would cover those same employees. [95] To summarise so far: I have found that the scope of both agreements could apply to the employees; that there are classifications in both agreements that could apply to the employees; that when the production unions made the production agreement they were unaware and their members were most likely unaware that the company was negotiating with another union for the inclusion of the employees in a subsequent agreement; and I have found that for at least some of the employees their inclusion in the later agreement has resulted in a reduction of earnings. [96] The question now arises: if both agreements could apply then which of them should apply? [97] Mr West has argued that the relevant provisions in the production agreement should be void on the basis that, because the parties were not of the same mind at the time the agreement was made, there is no agreement. [98] He cited Contract Law of Australia:
and referred in particular to the case of Scriven where a buyer purchased tow in the mistaken belief that they were bidding for hemp. [99] Alternatively, according to Mr West, the Commission might, on the evidence, decide that the only reasonable construction is that contended for by one party and therefore determine that the contract should be construed in that manner. [100] The Commission is not bound by the rules applicable to the construction of contracts. I am simply required to determine what the agreements themselves mean. If there is an ambiguity in the agreements then extrinsic material can be considered, including the evidence put forward by the parties as to the events surrounding the making of the agreement. [101] It is the case that the parties were not of the same mind when the production agreement was made, but that does not, of itself, make the agreement ambiguous. [102] The Commission generally follows the principles set out by then President Koerbin in T30 of 1985:
[103] I find that the wording in the production agreement is not ambiguous insofar as the classification for production/service employees is concerned. Section 4 - Remuneration - Classification and Salaries - of the Zinifex Hobart Smelter Enterprise Agreement 2004 - contains the classification of Production Service person - 8 Hour - Daywork and lists grades and applicable salaries. I can detect no ambiguity. On the plain English meaning of the words the grades and the salaries apply to those persons. There can be no other meaning read into those words. There is no attempt within the agreement to define the meaning of those words. The agreement is read in conjunction with the award. The award defines those persons as being employees who have attained points through training according to the production/service person training matrix. It is clear that the classification in the agreement applies to the employees, and I so find. [104] I find that the maintenance agreement is not ambiguous insofar as the classification for non-trades maintainers is concerned. Section 4 - Remuneration - Classification and Salaries - of the Zinifex Hobart Smelter Maintenance Employees Enterprise Agreement 2004 - contains the classification of Non Trades Maintenance Employees - Daywork and lists grades and applicable salaries. On the plain English meaning of the words those grades and those salaries apply to employees who are not tradesmen who perform maintenance duties. It is clear that the classification in the agreement applies to the employees and I so find. [105] I have also found that the work performed by the employees could be described as production service work and as maintenance work and that the scope clause in both agreements applies to the work performed by the employees. [106] I find that the employees are covered by both agreements. [107] I note the arguments put by the parties in relation to the duties of advocates to properly inform the Commission of relevant matters, even when the agreement is by consent. I think it regrettable that Abey C was not informed that the maintenance agreement would have application to employees already covered by the production agreement which was approved by Commission approximately one month before. The Commission has a duty to prevent industrial disputes and it may be that the present dispute could have been avoided. Further, the Commission, in the exercise of its jurisdiction, must act according to equity and good conscience and the merits of the case. As submitted by Mr Bodkin for the CFMEU, it is a matter of fairness to the employees, and the Commission should not have been placed in the position where the employees have been adversely affected by the making of the maintenance agreement without being given the opportunity to be heard in relation to that agreement. [108] The parties were agreed that where two agreements apply to the same employees then the more beneficial provisions are to be applied. Mr West said:
[109] In my view that is the correct approach. I find Zinifex Hobart Smelter has failed to pay the relevant employees wages that they are entitled to be paid under the provisions of Section 4.1 of the Zinifex Hobart Smelter Enterprise Agreement 2004. [110] I leave it to the parties to confer as to the amounts to be paid to the employees by way of back pay. If they are unable to reach agreement then it is open to either party to apply to have the matter brought back on. If agreement is able to be reached then the applicant is directed to so inform the Commission, following which the file will be closed. P C Shelley Appearances: Date and place of hearing: 1 Exhibit A2
|