Amcor Limited v CFMEU

Industrial Relations Commission (NSW)|2013-12-19

Overview 1This is a decision made in the context of an industrial dispute notified pursuant to s.130 of the Industrial Relations Act 1996 ('the Act') by the NSW Local Government, Clerical, Administrative, Energy, Airlines and Utilities Union ('the USU') concerning rates of pay for certain employees of Marrickville Council ('the Council') in a closed period between 2003 and 2013. 2The dispute centres on the terms of a Council Agreement formed between the Council and the USU pursuant to what is now the Local Government (State) Award 2010. ('the Award') The Council Agreement, formed in 2003, is titled the Waste Services Agreement 2 ('the 2003 Agreement'). 3Conciliation having failed to resolve the dispute, it came before the Commission for arbitration in December 2013.

The subject matter of the dispute 4The dispute, put simply, was an assertion by the USU, rejected by the Council, that the Council had an obligation to pay employees additional monies to that which it had paid for waste collection work performed under the Award, and subject to the 2003 Agreement, between 2003 and 2013. 5Specifically, the obligation asserted by the USU was said to arise under Clause 11 of the 2003 Agreement.

The Commission's powers under s.175 11It is clear that the powers given the Commission under s.175 do not stand alone, permitting applications for declaratory relief simpliciter, but rather may be exercised only 'for the purpose of exercising [the Commission's] functions in a matter before it', in this case the powers set out in s.136 of the Act: Australian Rail, Tram and Bus Industry Union, New South Wales and State Transit Authority [2013] NSWIRComm 102 at [67]; Health Services Union v Director-General, Department of Health (NSW) [2010] NSWIRComm 42; (2010) 193 IR 359 at [57] - [58]. 12I am satsified that the Commission has powers to provide an interpretation of, as here, a clause in an industrial instrument pursuant to s.175 if that is a step necessary to take for the purpose of exercising its powers under s.136. 13I make it clear, however, that once the Commission is seised of an industrial dispute, it is not confined to considering the relief sought by the parties, but may deal with the dispute as it sees fit within the powers available under the Act, and specifically under s.136: Act, s.136(2); Sydney Water Corporation and Australian Services Union (New South Wales and Australian Capital Territory Branch) (2005) 146 IR 388 at [36]-[37] 14Indeed, the Commission is obliged to deal with industrial disputes, to deal with them expeditiously (Act, s.162(2)(a)) and in dealing with an industrial dispute, as in any other step it may take, is expressly enjoined to act according to equity, good conscience and the substantial merits of the case without regard to technicalities or legal forms: Act, s.163(1)(c). 15That brings me to the central elements of the case.

The 2003 Agreement 16The 2003 Agreement commenced operation on 5 May 2003 and was terminated with effect on 15 May 2013. 17The Agreement, while not a creation of the Commission, is an industrial instrument: Act, s.8. 18As I note above, the USU advanced the proposition that the 2003 Agreement, properly read, made provision for the payment of additional monies for waste collection work that the Council had not paid. In particular, the USU position was that, properly understood, Clause 11 of the 2003 Agreement required Council to pay employees additional monies calculated on the basis of the sum of $0.30 per truck per day for each additional waste bin the Council had issued since 2004. 19The 2003 Agreement provided at clause 11: 11.1 It is agreed that, at six monthly intervals following the implementation of this Agreement, a review will be conducted of the waste collection workloads based upon the number of bins requiring collection, and negotiations entered into to ascertain the need for, and extent of, any increase or decrease in wage levels, common throughout the service arising from trends in the overall figures. 11.2. It is agreed that the baseline for productivity measurement as that the commencement of this Agreement will be an average of 1158 bins per vehicle per day. 11.3. Means of assessing numbers bins collected - at the end of each six monthly period a printout will be obtained from Council's computer recording system, reflecting the number of Mobile Garbage Bins currently available for collection. This figure will be compared with the total for the corresponding date six months prior, and negotiation based on the difference in bin totals. 11.4. Formula: ? (MGB's) x 5(days per week) x $0.30 (per bin) 3 (number of crew) 20The core of the USU's contention was that the Agreement itself required a productivity payment of $0.30 per bin to be paid for every bin issued by the Council above 26,460 bins. This was to be divided amongst Waste Services employees according to the formula: ? (MGB's) x 5(days per week) x $0.30 (per bin) 3 (number of crew) where '?' would mean the increase in the number of bins on issue. 21The first step is to ascertain whether the Agreement properly construed so provides.

Interpretation of terms of an industrial instrument 22The Agreement is an industrial instrument drafted not by legislators or even a tribunal but by the parties themselves. That gives rise to particular principles of interpretation. I turn briefly to the principles of interpretation as they apply specifically in industrial tribunals. 23The High Court has recently and comprehensively stated the principles of statutory construction: Certain Lloyd's Underwriters and Underwriters Subscribing to Contract No IHOOAAQS v Cross (2012) 293 ALR 412; [2012] HCA 56. 24Nothing there said modifies the principles set out by the Full Bench of this Commission in Director of Public Employment by her agent the Commissioner of New South Wales Fire Brigades and New South Wales Fire Brigades Employees' Union [2008] NSWIRComm 158, which also establishes that the canons of construction there identified apply equally to industrial instruments. 25The basic and overriding principle is that construction of any provision must involve a purposive approach: Certain Lloyd's Underwriters loc cit at [25]; Fire Brigade Employees loc cit at [42]. That step must involve the consideration of the meaning of a provision in the context of the instrument as a whole: Certain Lloyd's Underwriters loc cit at [23], [88]. 26Despite the requirement for a purposive approach, in interpreting an industrial instrument a tribunal must determine what was meant by the words used, not what the framers of the instrument intended to say. What is involved is the search for an objective intention of the framers of the instrrument, not their subjective intention: Fire Brigade Employees loc cit at [42]. 27Consideration is to be given to the differences between statutes and industrial instruments. '[I]t must be remembered that awards are made for the various industries in the light of the customs and working conditions of each industry, and they frequently result ... from an agreement between parties, couched in terms intelligible to themselves but often framed without that careful attention to form and draughtsmanship which one expects to find in an Act of Parliament': George A Bond & Co Ltd (in liquidation) v McKenzie [1929] 28 AR (NSW) 498 at 503. 28An industrial agreement is to be understood in the light of its industrial context and purpose and must have regard to the industrial purpose of the agreement, and the commercial and legislative context in which it applies: Amcor Limited v CFMEU (2005) 222 CLR 241 at [2], [13], [30]. 29In that context, regard is to be had to all of the surrounding circumstances which were known to the parties at the time the document was created: Shop, Distributive and Allied Employees' Association v Woolworths SA Pty Ltd [2011] FAFC 67 at [17]-[18]. 30It is possible that the context of the words, the consequences of a literal or grammatical construction, the purpose of a statute or the canons of construction may require that the words of a provision are read in a way that does not conform with their literal or grammatical meaning: Certain Lloyd's Underwriters loc cit at [68], Momcilovic v The Queen (2011) 245 CLR 1 at [45]. 31Nevertheless, a tribunal is not permitted to attach to a provision of an industrial instrument a meaning which the words of the instrument cannot reasonably bear: Cooper Brookes (Wollongong) Pty Ltd v The Commissioner of Taxation of the Commonwealth of Australia [1981] HCA 26; (1981) 147 CLR 297 at 321. 32Specifically, a tribunal is not free to give effect to some anteriorly derived notion of what would be fair or just, regardless of what has actually been written in the industrial isntrument: Kucks v CSR Limited (1996) 66 IR 182 at 184; Marmara v Toyota Motor Corporation Australia Ltd [2013] FCA 1351 at [21]-[22].

Clasue 11 of the 2003 Agreement 33I have applied those principles in forming a view of the correct meaning of Clause 11 of the 2003 Agreement. 34I have had regard to the purpose of the clause, and the instrument as a whole. I can say here that it is perfectly apparent that the purpose of the clause itself, which is to be found in an instrument having the purpose of, primarily, providing terms and conditions of employment, was to provide a basis on which additional payments might be made in certain circumstances for additional work performed. 35Without simply repeating all this evidence here at great length, I have had regard to the evidence surrounding the making of the clause and of the parties' respective understanding of its meaning. I have had regard to the fact that it was common ground that Clause 11 could properly be viewed in the light of the terms of the predecessor Council Agreement, styled the Waste Services Agreement, formed in 1995 ('the 1995 Agreement'). I have therefore had regard to the evidence concerning the formation of and operation of the 1995 Agreement, including that certain payments were actually made by reference to the clause there appearing. I have also had regard to the fact that for many years nothing was done nor sought to be done pursuant to the clause. I have had regard to the evidence that at times parties evidently believed that additional payments, if such there were to be, relied on bins actually presented rather than bins on issue. I have had regard to the evidence of those involved in the making of the Agreement and, particularly, the union representatives involved in its negotiation and application. 36I have had particular regard to the fact that it is apparent that the parties intended that the 2003 Agreement expressly address the possibility, at least, of additional monies being paid based on an increase in bins issued. 37Ultimately, however, I am bound first to have regard to the actual words used. Even allowing for all the possible flexibilities that might be available in reading an industrial instrument, and reading the instrument with regard to the intent to which I refer in the paragraph immediately above, the fact is that the words of Clause 11, on the most generous construction, simply cannot give rise to the result sought by the claimant union. 38That is for a number of reasons arising from the actual words of the Agreement. 39The most telling of those reasons are, first, that the Agreement itself provides in terms simply this: that 'a review will be conducted of the waste collection workloads based upon the number of bins requiring collection, and negotiations entered into to ascertain the need for, and extent of, any increase to or decrease in wage levels ... arising from trends in the overall figures.' 40Those words, viewed purposively, viewed in the context of the whole of Clause 11 including the formula and the whole of the instrument, simply cannot give rise to an interpretation that there was an obligation on Council to pay a wage increase according to the formula provided in the clause or at all. There was an obligation to conduct a review, and to enter into negotiations as to whether there was to be an increase or indeed a decrease in the rates to be paid. That is however the extent of the obligation on any reading of the words, and that is a great way short of an obligation to pay any sum. Indeed, the words themselves contemplate a circumstance arising from negotiations in which no sum at all is paid. 41I am not permitted to rewrite the Agreement to match what I might think were the subjective intentions of the parties. But even if I were, quite impermissibly, to do so, there was no evidence that it was the joint subjective, let alone objective, intention of the parties that the clause provide for a necessary obligation to pay increased monies. I could certainly not find any basis for holding that the Agreement required a productivity payment of $0.30 per bin to be paid for every bin-on-issue above 26,460 as the USU has sought, or indeed any precise payment. 42The second reason is that the formula contained within Clause 11 is itself simply incapable of comprehension. If it were the case that the intended objective meaning of the formula could be ascertained, it might be possible to read certain terms as if they were there to permit the formula to work: Rail Corporation of NSW v Brown [2012] NSWCA 296 at [45]. 43But the terms used in the formula simply do not permit even an assumption to be made about what was intended to be produced by the formula. They certainly do not provide any basis on which a finding that an obligation to pay monies could be made, let alone a calculation of the sum of any such obligation. 44There are further and other reasons why the Agreement cannot be interpreted in the way that the Union sought, which reasons include that neither party throughout the life of the two Agreements displayed any consistent understanding of the terms themselves. Certainly neither party had any consistent belief that the clause meant any guaranteed payment at all. In fact neither party displayed any clear understanding of the terms at all, or even displayed a consistent view - despite flashes of interest - that the terms of the clause required any action at all. 45That evidence also disposes of any suggestion of the existence of an estoppel by convention requiring a payment, a matter which the parties addressed at the Commission's invitation.

The industrial dispute 46There nevertheless remains an industrial dispute before the Commission. That dispute centres on the question of whether or not additional monies ought be paid for additional work done by employees engaged in waste collection between 2003 and 2013. 47As I say above, notwithstanding that Clause 11 of the 2003 Agreement is simply incapable of supporting a reading that would give rise to monies being owed, it is clear that the parties had a broad intention that, were there increases in work performed, consideration would be given to wage increases. Such increases were not a foregone conclusion, but could be available by negotiation if there were an increase in workload. That much I think can be ascertained as the mutual objective intention of the parties. 48That is reinforced by the fact that some limited increases were paid under the 1995 Agreement, and it is supported by the document made by the Council entitled 'Waste Agreement 2 - Workload Review Formula' dated 28 May 2003. 49The question that was not asked in terms, but which appears to underlie the disputation between the parties is this: in all fairness, given what the parties appear to have intended to do industrially, even though that is not reflected in the terms of the Agreement itself, should Council have paid some additional sum for waste collection work? 50Certainly there was at least an intermittent expectation, although it lay fallow for years at a time, that there should be an additional payment. More to the point, it is clear that the parties to the Agreement intended that there be some monetary recognition of increased workloads measured by the number of bins that the Council issued, which was accepted (despite confusion along the way) as being the way in which the workload should be measured. 51In my view it would be fair for Council to give some recognition in a financial sense to any proven increase in workload between 2003 and 2010, simply because it agreed to the insertion of clauses that must, if taken to have been inserted in good faith, have been meant to lead to a consideration of some payment if workload increased, even if they did not in their terms prove capable to resulting in that outcome. 52The question then becomes, was there an increase in workload of the kind contemplated by the parties? 53Certainly as Council argued its case, there was not an increase in workload over the life of the 2003 Agreement but rather a reduction. Council presented what was styled a 'workload differential calculation' which on Council's argument showed that when one takes into account the fluctuations in green waste collection and the falling rates of bin presentation, there had been in fact a reduction in overall collection workload. Nevertheless, as Mr Jauncey, solicitor for Council, conceded, 'The garbage workload has gone up since 2003. No-one's denying that. No-one's walking away from that.' (tpt 19 December p 42) 54So far as there was to be an assessment of workload increases, that was in the parties' minds properly to be done on the basis of the number of bins on issue, even though at times the parties thought that it might be done on the basis of bins presented. 55That is, it must be said, a very simplistic measurement of the workload. 56However, so far as any mutual understanding and agreement can be determined from the terms of Clause 11 of the 2003 Agreement, that understanding and agreement was that Council was open to negotiate an increase in wages based on any increase in the number of bins issued. The parties simply did not contemplate the more elaborate and overarching exercise essayed in the 'workload differential calculation' now carried out by Council. Certainly Council did not advance at the time of the 2003 Agreement that such a calculation would be carried out; it dealt solely in bin numbers. 57It is clear that there was an increase in bins issued. While I accept from Council's figures that that does not necessarily mean that there was an increase in overall workload at any point in the life of the Agreement, that was, as I say, the measure that the parties elected to use as the basis for negotiations of possible increases. It is not an unfair basis, in any event, given that it is not in contest that, independent of bin numbers, the garbage workload went up over the life of the Agreement. 58While the Agreement cannot itself be read to provide that there is an enforceable - or even calculable - sum that could be said to arise from its terms, in my view it is proper, in resolution of this long-standing industrial dispute, that Council give some effect to a clause which it not only agreed to include in its 2003 Agreement, but had carried over from an agreement going back to 1995. 59The question is how and to what extent the intent behind the clause is to be given effect. 60One sees in the column G, 'Reconversion to theoretical Garbage Differential', which Mr Jauncey described as being created so as to 'compare apples with apples' and so that 'we are not short-changing people', that there were years over the life of the agreement when bin numbers on issue by this calculation increased and years when they decreased. 61Even though Council characterised the bin payments actually made as a 'productivity bonus', Council, while pointing out that on one view of the Agreement a reduction would be available, did not seriously argue that there should be a reduction in payments in years of decrease. Clearly, though, there could be no payment increase bearing any relationship to those years. 62If - for the purposes of this consideration - one applies the formula appearing in Clause 11 as Council (without conceding that it ought to give rise to any payments) argued that it should properly be read to the numbers in column G, ignoring 2005 and 2006 when there was no increase, Council would be required to pay additional amounts in respect of each year ranging from $3.60 per man per week for the 2004 year to $21.12 per man per week, or $1098 for the year, for 2010, the year with the highest increase. 63But that would be to apply a formula which was not that which was actually agreed between the parties, and, more, to apply it as a binding and absolute clause when it is very far from that, but at most expressed itself to be a basis for negotiations. It would also be to ignore that, while bin numbers have increased, other aspects of the overall workload, particularly green waste collections, decreased at times during the life of the Agreement. 64Indeed, to repeat what I have said above, it is clear that there is no enforceable obligation under the Agreement on Council to pay any employee any additional sum at all pursuant to Clause 11 of the 2003 Agreement. 65Nevertheless Council did agree, pursuant to the 2003 Agreement, to consider wage increases, or additional payments, for increases in bin numbers. Further, it did so in the context that a number of other changes which were effected by the 2003 Agreement. That Agreement must be read as a whole, and it may well be the case, as the USU argued, that other matters in the Agreement to the benefit of Council were obtained as a part of a whole agreement that contained Clause 11, with some degree of expectation on the part of employees that a payment or payments would flow under that.

Resolution of dispute 66In my view the proper resolution of this matter is that Council make a payment to relevant employees in complete resolution of the industrial dispute, and specifically in resolution of any claim, practical or moral, under the 2003 Agreement. That payment should be in my view a sum of $2,000 gross to each current employee who worked for the whole of the ten years' life of the Agreement, between 2003 and 2013, in waste collection work. So far as a current employee worked a lesser period than ten years in waste collection during that period 2003-2013, for example by commencing work after 2003, the payment would be reduced proportionately on a simple calculation based on a proportion, given the employee's starting date, of the total number of calendar days in the ten years for which the Agreement was on foot. Absences on leave and workers' compensation should count toward days worked. 67I do not recommend that Council consider a payment to former employees. The recommendation I make is by way of resolution of an industrial dispute on foot at present, not by way of a compromise of any claim for outstanding monies over the life of the Agreement; no such claim has been or could be mounted for the reasons I give above. 68The reason that I regard such a payment as being fair in resolution of the dispute will be discernible from the reasons I give above, but put shortly, it is this; the Council entered into an agreement, the 2003 Agreement, which contained certain elements favourable to it, and in doing so agreed to a term which held out the potential for negotiated additional payments if bins on issue were increased in number. The bins on issue were increased in number, and indeed the garbage workload increased, as Council submitted. 69The sum I have identified is a discretionary figure the Commission has devised based on the evidence before the Commission going to the intent of the parties about any productivity payments, the evidence of workload changes brought by Council, and the provisions of the Agreement itself and particularly clause 11 so far as those provisions assist, and having regard to the parties' submissions concerning the proper way to read the formula they devised. 70I point out that the payment I recommend is a payment very significantly less than that which would flow if the clause had been worded so as to be enforceable. It is nevertheless in a sum reflecting my view that the clear industrial intent of the parties which lay behind the terms of Clause 11 should not give rise to absolutely nothing, when the criterion of bin increases, which the parties both accepted as a basis for potential increases in payments, was in many years met, even if the terms the parties devised for themselves are not strictly capable of being enforced.

No dispute order made 71As I say above, this is a recommendation in resolution of the dispute. It is a recommendation made within the powers conferred on the Commission within subs.136(1)(a) of the Act. It is not a dispute order and could not form the subject of a dispute order. 72Put shortly, the scope of dispute orders is confined by s.137 of the Act. In my view s.137 is, on a proper reading, a comprehensive code as to the kinds of dispute orders the Commission is empowered to make. That is notwithstanding the use of the word 'may' in the section. It will readily be observed, without setting out the whole text of s.137 in this decision, that none of what is sought by the USU falls within the possible scope of a dispute order that the Commission may make.

Effect of acceptance of recommendation 73This recommendation has an effect on both parties. If the recommendation is accepted by the parties, that is, if the payments I recommend are offered and accepted in settlement of the dispute, the subject matter of the dispute would be for all time put to rest. The Commission's recommendation, however, is no more than a recommendation, albeit a strong one. The payments I recommend would not be enforceable by anyone and could not on any basis be claimed by any third party, including former employees.

Decision and recommendation

The notifier's amended application for interpretation pursuant to s.175 of the Act is dismissed.
I recommend, pursuant to s.136(1)(a) of the Act, that Council make payments in the terms set out in paragraph 66 above in full and final settlement of this industrial dispute.
If the recommendation is accepted by the parties, the notifying Union is to file a Notice of Discontinuance within 7 days of the payments being effected.

Amendments 20 February 2014 - The word "leat" amended to "least" Amended paragraphs: 50 DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 20 February 2014

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Judgment (13 paragraphs)

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