//
[82]
[2022] FWCFB 231
General information, not legal advice.
Fair Work Commission (Full Bench)
2022-12-09
Original judgment source is linked above.
s.604 - Appeal of decision
Appeal against decision [2022] FWC 1840 of Commissioner McKinnon at Sydney on 20 July 2022 in matter number C2022/1228.
[1] The Australian Manufacturing Workers' Union (AMWU) has lodged an appeal against a decision[1] of Commissioner McKinnon dated 20 July 2022 in relation to a dispute with Opal Packaging Australia Pty Ltd (Opal) under the Orora Fibre Packaging National Enterprise Agreement 2019[2] (2019 Agreement). The 2019 Agreement applies to Opal and its employees because of a transfer of the fibre packaging business of Orora Packaging Australia Pty Ltd (Orora) to Opal from 1 May 2020.
[2] The dispute concerns Opal's proposal to vary site-specific hours of work arrangements for maintenance employees covered by the 2019 Agreement employed at its Revesby site in New South Wales. Currently, Revesby maintenance employees work 37 hours per week, comprising eight hours Monday to Thursday and five hours on Friday. This is two hours in excess of the 35 ordinary hours permitted for the Revesby site under clause 9.2(b)(i) of the 2019 Agreement (extracted below at paragraph [13]). The additional two hours are then banked and taken as time off at a later time. This practice has been in place for over 30 years. Opal proposes to change this arrangement so that the Revesby maintenance employees will only be rostered for 35 ordinary hours per week (7 hours per day) plus 10 minutes of overtime per day for the purpose of completing a handover before the start of each shift. Rostered hours in excess of 35 would be paid as overtime. The proposed change would end the practice of banking two hours per week. Opal contends that the purpose of this change to rostering arrangements is to align the hours of work of Revesby maintenance employees with those of its production and despatch employees employed at Revesby, and that it is entitled to introduce the change pursuant to clause 9.2(b) of Part 1 of the 2019 Agreement (including under the award provisions incorporated by reference in clause 9.2(b) read in conjunction with clause 3(b)).
[3] The AMWU opposes this proposed change on a number of grounds including, for relevant purposes, that it is not permitted by clauses 5(b) and 9.1(m) of Part 1 of the 2019 Agreement. After the dispute could not be resolved at the workplace level pursuant to the dispute resolution procedure in clause 15 of Part 1 of the 2019 Agreement, the AMWU lodged an application under s 739 of the Fair Work Act 2009 (Cth) (FW Act) for the Commission to deal with the dispute. After conciliation failed to resolve the dispute, the Commissioner arbitrated the dispute pursuant to s 739(4) of the FW Act. The Commissioner characterised the question to be arbitrated as being "whether Opal can change the rostered weekly hours for Revesby maintenance employees from 37 hours per week (whereby two hours are banked for the purpose of taking additional leave) to 35 ordinary hours per week, plus a 10-minute shift changeover paid at overtime rates?"[3] The answer given to that question by the Commissioner was: "Yes, but only on or after 1 October 2022".[4]
[4] The AMWU brings its appeal on the following grounds:
The Commissioner erred in her construction of the 2019 Agreement by:
(a) construing the phrase "period of the Agreement" in clause 5(b) to mean the nominal expiry date of the 2019 Agreement, being 30 September 2022;
(b) finding that Opal could implement the proposed roster change by virtue of the dispute resolution procedure and/or consultation pursuant to clauses 15 and 16 of the 2019 Agreement;
(c) finding Opal's proposed roster change was not an extra claim pursuant to clause 9.1(m) of the 2019 Agreement; and
(d) answering the question for determination "Yes, but only on or after 1 October 2022".
[5] The appeal was lodged on 22 August 2022, 33 days after the Commissioner's decision was published. Rule 56(2) of the Fair Work Commission Rules 2013 (FWC Rules) provides that a notice of appeal under s 604 of the FW Act must be filed within 21 calendar days after the date of the decision the subject of the appeal, or within such further time as may be allowed by the Commission on application by the appellant. Accordingly, the AMWU requires the grant of an extension of time for its appeal. It is not in dispute that permission is required for the appeal.
[6] On 21 September 2022, Opal filed a notice of contention in respect of the appeal, by which it contends that the Commissioner's decision should be affirmed on grounds other than those relied upon by the Commissioner. Specifically, it relied on the following grounds it advanced before the Commissioner but which (it contends) were not addressed in the Commissioner's reasons:
(1) the phrase "practices and conditions" in clause 5(a) of the 2019 Agreement imposes no operative right or obligation (but merely records the parties' acknowledgment and recognition of certain matters);
(2) the phrase "practices and conditions" in clause 5(a), read conformably with the operative provisions in subclauses 5(b) and 5(c), is confined to dealing with mechanisms to achieve wage parity, and the present dispute does not concern such a mechanism;
(3) the ordinary industrial meaning of the term "differentials" means differences in rates of pay (whether wage, salary, or allowances) between groups or classifications of employees. The present dispute does not concern such a difference;
(4) the limiting term "interstate" is contextually informed by clause 5's history in antecedent agreements, dating back to the Amcor Fibre Packaging Enterprise Agreement 1992 (1992 Agreement) in which a relevant connection with an interstate industrial dispute was necessary in order to be enforceable, but such connection is absent in the present dispute;
(5) the AMWU's construction cannot be reconciled with several other terms of the 2019 Agreement, including (amongst others) clauses 1, 7(a), 8(b), 9.2(b)(i)-(v), 9.3(c)(i)-(ii), and Annexures 1 and 2; and
(6) the AMWU's construction impermissibly requires a general provision (being clause 5) to prevail over specific provisions dealing with the scenario in dispute (being incorporated clauses 6.4.1 and 6.4.2 of the Metal, Engineering and Associated Industries Award 1998 (Metals Award 1998) as at 1 March 2006).
[7] The 2019 Agreement is comprised of three parts and eight annexures. All the provisions to which we will refer are contained in Part 1, unless otherwise specified.
[8] Clause 1 of the 2019 Agreement identifies the purpose of the agreement as ensuring the ongoing commitment of management, employees and unions to the principles of Continuous Improvement (as stated in Annexure 1), high levels of productivity and operational excellence. Clause 2 provides:
Date and period of operation
This Agreement will come into force on the seventh day after it is approved by the Fair Work Commission (FWC) and will remain in force until 30 September 2022 or thereafter until a replacement Agreement is negotiated.
[9] Clause 3(a) of the 2019 Agreement provides that it applies to all employees of Orora engaged in positions covered by the classification structure in Annexures 5 and 6 and employed at the sites listed in clause 4.1. The list of sites in clause 4.1 consists of Revesby, four sites in Victoria, two in Queensland, and one each in South Australia, Western Australia and Tasmania. Clauses 3(b) and 3(c) provide that, subject to clause 9.1, all the provisions of the Graphic Arts General Award 2000 and Metals Award 1998 as they stood on 1 March 2006 are incorporated into the 2019 Agreement, but that in the event of any inconsistency the provisions of the agreement prevail over those of the incorporated awards.
[10] Clause 5 provides:
Historical site differences
(a) The parties acknowledge that Orora Fibre Packaging has acquired a number of companies in recent years and as such it is recognised that each site may have practices and conditions not in place at any other site/s.
(b) The parties agree that interstate site differentials will be maintained for the period of the Agreement and recognise that Wage Parity across Orora Fibre packaging sites is an issue between the parties. The parties agree to consult with each other at a national level to review their respective positions on Wage Parity prior to the next EBA. Initial consultation will commence 3 months after approval of the agreement by FWC, except that where within a state a site is identified as having a significant wages anomaly, then the parties shall meet within one month of the Agreement being accepted by the members to ensure an outcome which will rectify the anomaly.
(c) The process of removing significant anomalies will recognise proposed adjustments to be implemented by the introduction of skill based pay and the need for the Company to attract specialised skills in seasonal businesses.
[11] Clause 7(a) records the agreement of the parties to "work within the spirit and intent of this Agreement to implement agreed changes and genuine productivity, efficiency, cost and customer service improvements within the framework of this Agreement," and clauses 7(b), (c), (d) and (e) provide for a review of "the success of the Agreement" to occur at each site, with any matters in dispute to be referred to the dispute resolution procedure in clause 15. Clause 8 records further details of the parties' commitment to implementing continuous improvement initiatives, and clause 8(d) in particular provides that the wage increases and improvements to conditions of employment have been agreed in recognition of these continuous improvement initiatives.
[12] Clause 9.1 sets out the wage increases payable under the agreement as well as various leave and other entitlements. Clause 9.1(m) provides:
The parties agree that during the term of this Agreement there will not be any claims imposed upon the parties for changes to wages and conditions except as provided for in this Agreement.
[13] Clause 9.2(b) of the 2019 Agreement deals with hours of work and provides:
9.2 Operational Efficiency, Productivity and Costs of Production
The following provisions are designed to facilitate optimal operating performance and are the minimum standards to apply in the absence of other agreed improvements being reached at the plant.
Hours of Work in the Awards incorporated in accordance with sub-clause 3(b) of this Agreement will apply save and except for the following:
(i) The ordinary hours of work will not exceed 35 hours per week for Orora's existing operations located at Scoresby, Brooklyn, Knoxfield, Revesby, Athol Park, Spearwood and Launceston or 37.5 hours per week at Rocklea and Townsville.
(ii) Ordinary hours of work for day workers may vary within the spread of hours between 6 a.m. and 6 p.m.
(iii) Starting and finishing times may be staggered to ensure maximum plant capacity utilisation.
(iv) Where required the timing of meal periods for employees in a plant or section may be staggered.
(v) It is accepted that operational requirements may necessitate a change in the method of organising ordinary working hours during the life of this Agreement. If the Company seeks to make such a change, the following procedure shall be followed:
An assessment shall be made as to which method best suits the business and the proposal shall be discussed with the employees concerned, the objective being to reach agreement on the method.
In the absence of agreement at the plant or section level, the following procedure shall apply without delay:
Consultation shall take place within the plant.
If the matter is unable to be resolved at the plant level, the matter may, at the employee's request be referred to the relevant union/s at which level a conference of the parties shall be convened without delay.
In the absence of agreement the Dispute Resolution clause contained within this Agreement will be followed.
[14] Clause 9.2(c) deals with skill utilisation, and provides in summary that employees may be directed to carry out all duties within the limits of their skill, competence and training, using tools and equipment as directed in which the employees have been properly trained, consistent with a safe and healthy working environment. Annexure 1 sets out the six principles of continuous improvement, and Annexure 2 provides for the continuation or implementation of plant consultative committees with the objectives, among other things, of dealing with "[m]easures to improve customer service, quality, productivity, efficiency and flexibility" and "[i]mplementation of change, including new technology".
[15] Clause 16 of the 2019 Agreement requires consultation with employees and their unions/representatives concerning any "definite decision" made by the employer concerning, among other things, "a change to the employee's regular roster or ordinary hours of work".
[16] The wage rates for employees under the 2019 Agreement are set out in Annexures 5 and 6. These disclose that markedly different rates of pay apply at different sites for persons at the same skill level.
[17] After setting out the background facts and the relevant provisions of the 2019 Agreement, the Commissioner examined the provisions of the pre-reform 1 March 2006 version of the Metals Award 1998 which were incorporated as terms of the agreement and would affect the Revesby maintenance employees.[5] The Commissioner specifically referred to clause 6.1.4(a) of the Metals Award 1998,[6] which provides:
"Subject to the employer's right to fix the daily hours of work for day workers from time to time within the spread of hours referred to in 6.1.1(c) and the employer's right to fix the commencing and finishing time of shifts from time to time, the arrangement of ordinary working hours is to be by agreement between the employer and the majority of employees in the enterprise or part of the enterprise concerned. This does not preclude the employer reaching agreement with individual employees about how their working hours are to be arranged."
[18] The Commissioner found that clause 6.1.4(a) of the Metals Award 1998 was inconsistent with clause 9.2(b) of the 2019 Agreement to the extent that it required ordinary working hours (up to 38 hours per week) to be agreed between the employer and the majority of employees. No such requirement exists in the 2019 Agreement, which instead contemplates changes in the method of organising ordinary working hours to occur consistent with the process set out in clause 9.2(b)(v). The Commissioner found that clause 9.2(b) of the 2019 Agreement therefore displaces clause 6.1.4(a) of the Metals Award 1998 to that extent, but did not displace Opal's right to fix start and finish times, subject to compliance with consultation requirements under clause 16 of the 2019 Agreement.[7]
[19] The Commissioner next found that the application of clause 6.1.4(a) of the Metals Award 1998 to the dispute was otherwise limited because the proposed change was about rostering overtime rather than organising ordinary hours of work[8] and, as the 2019 Agreement did not deal with overtime in any substantive way, it was necessary to consider clause 6.4 of the Metals Award 1998. Under clause 6.4.1 overtime is paid at overtime rates unless an employee chooses to take time off during ordinary hours instead, which is paid at ordinary rates. Clause 6.4.2 provides an employer the right to require reasonable overtime to be worked, subject to the reasonable refusal of employees, and clause 6.4.3 requires that assigning overtime is based on specific work requirements and bans the "one in, all in" practice for overtime.[9]
[20] In her consideration of the issue in dispute, the Commissioner first found that there was no ambiguity of meaning in the terms of the 2019 Agreement in dispute.[10] She found that the two additional hours of work for which the maintenance employees at Revesby are rostered each week are overtime for the purposes of the 2019 Agreement, with overtime being regulated by the incorporated clause 6.4 of the Metals Award 1998, which allows for the working of reasonable overtime, provides for compensation either at overtime rates or by the taking of equivalent time off at a later time, and prohibits overtime on a "one in, all in" basis - instead requiring that overtime be assigned only to meet Opal's specific requirements. The Commissioner therefore held that the current practice of rostering 2 hours overtime per week for Revesby maintenance employees is inconsistent with this latter requirement.[11] However the Commissioner then said:
"[26] This does not mean the rostering practice is in breach of the Agreement. The problem is overcome to an extent by clause 5 of the Agreement, which preserves historical "interstate site differentials" for the period of the Agreement. Although the primary concern of clause 5 is "wage parity", interstate site differentials is a wider concept that is explained by reading clauses 5(a) and (b) together. As clause 5(a) explains, "each site may have practices and conditions not in place at any other site/s". These are the differences, or differentials, to which clause 5 refers. Clause 5(b) then goes on to preserve these differentials. Used in this context, the word "interstate" in clause 5 reflects no more than that the Agreement covers different sites across the five Australian states. The word "differentials" is used interchangeably with the word "differences", as the heading of clause 5 makes clear.
[27] The rostering practice is one of these. It has a long history (approximately 30 years) and appears to be unique to the Revesby site. As terms of the Agreement prevail over terms of the Metals Award to the extent of inconsistency, clause 5 preserves the current practice of rostered overtime, despite the prohibition on such practices in clause 6.4.3 of the Metals Award. However, clause 5 only prevails over clause 6.4.3 of the Metals Award "for the period of the Agreement". The period of the Agreement is set out in clause 2 of the Agreement and means until 30 September 2022."
[21] The Commissioner found that the prohibition on further claims for changes to wages and conditions during the term of the agreement (clause 9.1(m)) did not apply to the proposed change because it involved a rostering practice rather than a change to wages and conditions.[12] The Commissioner was satisfied that the proposed change would apply the existing terms and conditions of employment in the 2019 Agreement and was consistent with the applicable obligations in the Metals Award 1998.[13] The Commissioner was not satisfied that the proposed change would be unsafe or inconsistent with Opal's obligations under relevant safety legislation or the 2019 Agreement.[14]
[22] The Commissioner determined that Opal was required to maintain the current rostering practice at Revesby for the period of the 2019 Agreement (as she defined it), and could proceed with its proposed change from 1 October 2022, subject to compliance with consultation obligations.[15]
[23] As to the issue of extension of time to appeal, the AMWU relied on a witness statement of Katie Gillen filed on 20 September 2022. Ms Gillen is employed as a legal secretary at the AMWU and gave evidence that she inadvertently failed to file the notice of appeal within the 21-day timeframe, and immediately did so once she was made aware of this on 22 August 2022. The AMWU submitted that this constitutes a representative error and, because Ms Gillen had been given clear instructions to file the notice of appeal within the 21-day timeframe and failed to do so, but did so promptly upon the omission being identified, this was a satisfactory reason for the grant of the extension of time. The AMWU submitted that the length of the delay - 12 days - is not significant and therefore weighed in favour of granting an extension. The AMWU submitted that there is sufficient likelihood one or more appeal grounds would be upheld, and no prejudice to Opal would result from an extension of time, which supported the grant of such an extension of time. The AMWU also submitted that the interests of justice weigh in favour of granting an extension of time to file the appeal.
[24] As to the merits of the appeal, the AMWU submitted that the Commissioner correctly construed clause 5 of the 2019 Agreement insofar as she found that it preserved the pre-existing practice at Revesby of rostering overtime and banking overtime hours, but erred in finding that clause 5 only operated to do this until the nominal expiry date of the agreement, being 30 September 2022. The AMWU submitted that this construction was inconsistent with the plain wording of clause 2 and that the effect of clause 2 is that where the 2019 Agreement has not been replaced by its nominal expiry date, it continues to operate until a new agreement comes into operation or is terminated under s 225 of the FW Act. Further, the AMWU submitted that "anomalous consequences" arose from the Commissioner's finding that historical site practices and conditions could only continue until the nominal expiry date of the 2019 Agreement which also could not have been intended.
[25] The AMWU submitted that clause 5 would continue to operate for the entire operative period of the 2019 Agreement, and that in these circumstances Opal's consultation rights would be "fettered" by clause 5 which would preserve the entitlement to bank overtime hours. Further, because "interstate site differentials" was not a matter which was singled out as one in relation to which Opal was required to consult if it were considering making changes under clause 5(b), the AMWU submitted that this demonstrated changes could not be made to such differentials during the life of the 2019 Agreement.
[26] The AMWU submitted that the Commissioner's finding that clause 9.1(m) of the 2019 Agreement which provided that "there will not be any claims imposed upon the parties for changes to wages and conditions except as provided for in this Agreement" did not apply was incorrect. The AMWU characterised Opal's proposed roster change for the Revesby maintenance employees as a change to the wages and conditions of these employees because it would reduce their overtime and remove the ability for them to bank those hours as time off in the future, which it said is inextricably linked to the wages and conditions of these employees. For this reason, Opal's proposed roster change was in fact a further claim within the meaning of clause 9.1(m) and could not be proposed during the life of the 2019 Agreement.
[27] The AMWU also submitted that the Commissioner incorrectly construed clause 6.4.3 of the Metals Award 1998, which prohibits "one in, all in" overtime, but in any event the Commissioner's finding that clause 5 of the 2019 Agreement prevailed over provisions of the Metals Award 1998, apart from the period of time in which it operates. It submitted that we should grant an extension of time to appeal, allow the appeal, quash the Commissioner's decision and answer the question for arbitration "no".
[28] Opal submitted that an extension of time for the AMWU to appeal should not be granted because the representative error principles relied upon by the AMWU do not apply as the error was the AMWU's own error, not an error of its representative, and no satisfactory reason for the delay had been demonstrated. It also submitted that permission to appeal should not be granted because none of the reasons advanced by the AMWU in this regard provides a sufficient basis to support the grant of permission. Opal submitted that the Commissioner's decision does not raise any question of general importance or application and the AMWU had not demonstrated any error in the decision.
[29] As to the AMWU's appeal grounds, Opal urged their rejection. In relation to ground 1(a), Opal submitted that the Commissioner's construction of the phrase "period of the Agreement" was correct. It was wrong for the AMWU to contend that clause 2 simply reflects the operation of s 58(2) of the FW Act because clause 2 applies until a replacement agreement is "negotiated" whereas s 58(2) preserves the operation of an enterprise agreement until a replacement agreement commences operation. In this context, the word "negotiated" renders the AMWU's preferred construction of clause 2 uncertain because it is not clear at what point "negotiation" would render the extant agreement inoperative. Further, Opal submitted, the words "period of the Agreement" had to be given work to do in clause 5, which the Commissioner's construction achieved by giving them a temporally limiting effect.
[30] In relation to appeal ground 1(b) Opal submitted that it would not be restrained from implementing the proposed roster change after consultation as the AMWU contends. Opal referred to its notice of contention in relation to whether the Commissioner's finding that the proposed change was an "interstate site differential". Opal submitted that, even if the banking of hours amounted to an interstate site differential, the 2019 Agreement would not preserve the entire arrangement because clauses 6.4.1(d)(i)-(iii) of the Metals Award 1998 require the employer's consent to the taking of time off in lieu of overtime. Opal inherited that existing arrangement when it purchased the Revesby site in May 2020 but, by its proposed change, no longer consents to such an arrangement. It submitted that there is no inconsistency between clause 6.4.1(d) of the Metals Award 1998 and clause 5 of the 2019 Agreement because clause 5 does not confer any entitlement but instead only maintains site practices to the extent that they are "interstate site differentials". Finally, Opal submitted that the scope of the specific consultation process in clause 5(b) of the 2019 Agreement does not fetter its ability to consult on proposed changes more broadly.
[31] As to appeal ground 1(c), Opal submitted that the AMWU's contentions regarding "no further claims" rest on the proposition that Opal has no legal or industrial means at its disposal to implement the proposed change. Opal submitted that this proposition is wrong because the proposed change concerns the number of reasonable overtime hours each employee is required to work and the way they are taken and paid, and does not involve a claim for changes to wages or conditions because no employee has an entitlement to overtime nor an entitlement to a banked hours arrangement such as those which currently exist. Opal submitted that even if the proposed change were properly characterised as such, the 2019 Agreement provides for the proposed change by the operation of clause 6.4.1(d) of the Metals Award 1998 and, consistent with this, the proposed change does not amount to an attempt by Opal to strike a new bargain.
[32] In relation to its notice of contention, Opal submitted that the Commissioner did not take into account the parties' competing constructions of clause 5 of the 2019 Agreement below. The AMWU advanced a construction of clause 5 below which would constrain Opal from implementing the proposed change as well as any change to a site practice or condition during the operation of the 2019 Agreement. Against this, Opal advanced eight reasons as to why that construction should be rejected, which Opal submitted were not taken into account by the Commissioner because she decided the dispute on an alternate basis. Opal again advanced those eight reasons as the basis on which the dispute should be decided in its favour should permission to appeal be granted, and submitted that:
(1) The AMWU's submission that clause 5 of the 2019 Agreement requires maintenance of practices and conditions on a site-by-site basis finds no support in the text of the agreement. The phrase "practices and conditions" which appears in clause 5(a) records the parties' acknowledgement and recognition of certain matters but does not impose any right or obligation.
(2) The AMWU's construction impermissibly reads the phrase "practices and conditions" in clause 5(a) of the 2019 Agreement separately from the remainder of clause 5, which gives it an artificially wide construction. The phrase must be read with the operative provisions in clauses 5(b) and (c).
(3) The AMWU's construction adopts a "bootstraps approach" which gives the term "practices and conditions" an artificially wide construction.
(4) The AMWU's construction is at odds with the ordinary meaning of the term "differentials" which has historically been understood to mean differences in rates of pay between groups or classifications of employees.
(5) The AMWU's construction fails to give effect to the word "interstate" in the composite phrase "interstate site differentials". Clause 5 of the Agreement was first included in the 1992 Agreement, which was a certified agreement under s 134C of the Industrial Relations Act 1988 (Cth) (IR Act) as it stood in November 1992. The IR Act then provided for such agreements to be lodged with the Australian Industrial Relations Commission for certification if a range of statutory pre-certification requirements were met and the agreement's terms had a sufficient connection with the industrial dispute that triggered its making. Because of this, clause 5 was required to have a relevant connection with an interstate industrial dispute to be enforceable. Although Part 2-4 of the FW Act does not rely on the conciliation and arbitration power, this constitutional limitation which applied at the time clause 5 was first inserted is a significant contextual matter which informs its proper construction and demonstrates the importance of the word "interstate" in the phrase "interstate site differentials". No relevant "interstate" connection arises here because by the proposed change Opal will bring the practices applying to Revesby maintenance employees into line with other employees at Revesby. The proposed change is not directed towards changing the relationship between Revesby and other interstate sites.
(6) The AMWU's construction fails on a contextual analysis because any change to a site practice would be prohibited where it differs in any way with those in place at other sites. Such a construction is inconsistent with a number of other terms of the 2019 Agreement.
(7) The AMWU's construction fails from a purposive perspective because it would bind Opal to the status quo across all practices at each of its sites in circumstances where various provisions of the 2019 Agreement suggest its purpose is to facilitate ongoing commitment to improving productivity. In this context, the construction of clause 5 put forward by the AMWU would defeat that purpose.
(8) Opal submitted that the AMWU's reliance on the maxim generalia specialibus non derogant does not assist it in this case.
[33] In response to Opal's notice of contention, the AMWU submitted that Opal's eight reasons should be rejected and the notice of contention dismissed. In relation to reasons 1, 2 and 3, the AMWU submitted that the phrase "interstate site differentials" in clause 5(b) is referable to the "practices and conditions not in place at any other site/s" in clause 5(a), which supports the AMWU's contention that clause 5(b) imposes an obligation on the parties to maintain these interstate site differentials for the period of the 2019 Agreement. The AMWU submitted that such a construction of clause 5(a) conforms with the background to its inclusion. In relation to reason 4, the AMWU submitted that Opal did not demonstrate the word "differentials" has an established industrial meaning, and the scope of the meaning of this word would depend on its context.
[34] In relation to reason 5, the AMWU submitted that the industrial history identified by Opal in its submissions says little about the construction of individual clauses within an agreement. It submitted that the conciliation and arbitration power is of no significance to construing clause 5 of the 2019 Agreement because the FW Act no longer relies on this power. The provision must be construed having regard to the legislative background against which it was made and operates, noting that it has been recodified in enterprise agreements subsequent to the 1992 Agreement since the FW Act was enacted. In this regard the AMWU submitted that the 1992 Agreement made no reference to "interstate site differentials", and this term was first inserted in clause 4 of the Amcor Fibre Packaging Enterprise Agreement 1994 (1994 Agreement). The AMWU submitted that the parties had subsequently revised the wording in subsequent enterprise agreements such that interstate site practices and conditions are maintained for the duration of the relevant agreement. As to reasons 6 and 7, the AMWU submitted that the only site practices or conditions which are maintained by clause 5 are those which are connected to the employees' employment and are a "differential". Clause 5 does not preserve trivial practices or conditions, which limits the types of practices and conditions caught by clause 5.
[35] In relation to reason 8 the AMWU submitted that the constructional maxim generalia specialibus non derogant does apply, despite Opal's submission to the contrary, with respect to the interaction between clause 5 and the consultation provisions in clause 16 of the 2019 Agreement. The AMWU submitted that the consultation obligation in clause 16 applies where Opal has made a "definite decision" regarding various matters that would have a significant effect on employees. This threshold could not be met where the subject matter of the consultation is prohibited by clause 5. In the alternative, the AMWU submitted that if consultation is not prohibited by clause 5, introduction of the proposed change is prohibited because clause 5 preserves interstate practices and conditions for the period of the 2019 Agreement.
[36] The principles concerning whether an extension of time to lodge an appeal should be granted pursuant to r 56(2)(c) of the FWC Rules which are usually applied are as stated in Jobs Australia v Eland.[16] The principal considerations are whether there is a satisfactory reason for the delay in filing the appeal, the length of the delay, the nature of the grounds of appeal and their prospects of success, and any prejudice to the respondent if time were extended. The question to be answered by reference to these considerations is whether, in all the circumstances, the interests of justice favour an extension of the time within which to lodge the appeal.
[37] In this case, we accept that, but for error on the part of an employee of the AMWU, the appeal would have been lodged within the time prescribed by r 56(2). Whether this may strictly be characterised as "representative error" does not, in our view, really matter: what is clear is that the appeal was lodged out of time due to no fault on the part of those employees whose interests are, at least in their perception, adversely affected by the Commissioner's decision. The delay is a short one and has not caused any prejudice to Opal's capacity to respond to the appeal. For the reasons set out below, we consider that one of the AMWU's appeal grounds has substantial merit. Accordingly, we consider that the interests of justice favour an extension of time to lodge the appeal, and we grant such an extension.
[38] Because we similarly consider that the decision under appeal is, at least in one respect, attended by sufficient doubt such as to warrant its review, permission to appeal is granted.
Historical origin of the relevant provisions of the 2019 Agreement
[39] An important contextual consideration in the interpretation of the relevant provisions of the 2019 Agreement is the historical origin of the provisions.[17] Despite giving an impression of contemporaneity (for example, clause 5(a) refers to events "in recent years"), the terms of the 2019 Agreement relevant to the determination of this appeal are actually of considerable antiquity. The origin of clause 5 was explained in the evidence of Mr Peter Dwyer, who was the General Manager of Human Resources for Amcor Fibre Packaging, a division of Amcor Limited (Amcor), from 1989 to 2008. Amcor became Orora in 2013, and the business was acquired by Opal in 2020. Mr Dwyer explained that Amcor acquired a number of businesses engaged in corrugated box making in the late 1980s and early 1990s, and consolidated these into its Amcor Fibre Packaging business. This process resulted in Amcor Fibre Packaging operating a number of sites which had diverse rates of pay and other employment practices.
[40] Mr Dwyer's evidence was that, during negotiations for the 1992 Agreement, the AMWU advanced claims for preservation of beneficial site practices and conditions at each site and for wage parity across all sites. The practice at the Revesby site which Opal now wishes to change whereby maintenance workers work two hours in excess of 35 ordinary hours each week which are banked and later taken as time off was in place at this time, and Mr Dwyer was aware from his participation in bargaining discussions that this was one of the practices which the AMWU was seeking to preserve. Mr Dwyer said that, on his recommendation, Amcor proposed to the AMWU that specific site practices and conditions should be maintained in exchange for the AMWU rescinding its claim for wage parity. The AMWU accepted this proposal. The provision to give effect to this agreement was drafted in broad terms because, Mr Dwyer said, it would have been too difficult to specify all existing practices and conditions. Clause 18 of Part A of the 1992 Agreement, which was personally drafted by Mr Dwyer, provided:
EXISTING AGREEMENT AND CONDITIONS OF EMPLOYMENT
The parties acknowledge Amcor Fibre Packaging has acquired a number of companies in recent years and as such it is recognised that each branch may have its own site agreements and practices which contain conditions not in place at any other site/s. The parties recognise that historical differences in working conditions throughout Amcor Fibre Packaging exist and the parties are committed to not imposing additional cost to a business unit/s in order to standardise working conditions or wages.
[41] Clause 1(3) of the 1992 Agreement relevantly provided that, "[s]ubject to that which is otherwise provided in this Agreement", the provisions of the Metals Industry Award 1984 - Part 1 (Metals Award 1984), as varied from time to time, applied to and were binding on the parties to the 1992 Agreement. The 1992 Agreement included a range of provisions concerning commitment to and the implementation of the concept of continuous improvement. It contained no equivalent to clause 9.2 of the 2019 Agreement nor any provision specifically concerned with hours of work.
[42] Mr Dwyer's evidence was that, in bargaining for the following enterprise agreement, the AMWU again made a claim for wage parity across sites. In response, on Mr Dwyer's recommendation, Amcor proposed in addition to maintaining site-based practices and conditions that a transition to a skills-based classification structure should be introduced which would appropriately reward multi-skilling. This proposal was accepted by the AMWU and incorporated into the 1994 Agreement. The provision concerning the preservation of site-based practices and conditions was "drafted and refined" by Mr Dwyer. Clause 4 of Part 2, Structural Provisions and Conditions to Facilitate Continuous Improvement of the 1994 Agreement provided:
HISTORICAL SITE DIFFERENCES
The parties acknowledge Amcor Fibre Packaging has acquired a number of companies in recent years and as such it is recognised that each branch may have its own site agreements and practices which contain conditions not in place at any other site/s.
The parties agree that interstate site differentials will be maintained for the period of the Agreement except that where within a state a site is identified as having a significant wages anomaly, then the parties shall meet within one month of the Agreement being accepted by the members to ensure an outcome which will rectify the anomaly.
The process of removing significant anomalies will recognise proposed adjustments to be implemented by the introduction of skill based pay and the need for the Company to attract specialised skills in seasonal businesses.
[43] The 1994 Agreement also contained provisions concerning hours of work broadly equivalent to those in clause 9.2 of the 2019 Agreement as follows:
The following provisions are designed to facilitate Continuous Improvement and have been agreed to by the parties:
9.2.2.1 Ordinary hours of work for day workers may vary within the spread of hours between 6 a.m. and 6 p.m.
9.2.2.2 Starting and finishing times may be staggered to ensure maximum plant capacity utilisation.
9.2.2.3 The timing of meal periods for employees in a plant or section may be staggered.
9.2.2.4 It is accepted that operational requirements may necessitate a change in the method of organising ordinary working hours during the life of this Agreement. If the Company seeks to make such a change, the following procedure shall be followed:
[44] Similarly to the 1992 Agreement, the 1994 Agreement provided (in clause 5.1) that it was to be read in conjunction with a number of awards including the Metals Award 1984, provided that the agreement prevailed to the extent of any inconsistency. It also had a range of provisions referring to the parties' commitment to and implementation of continuous improvement.
[45] The text of clauses 4 and 9.2 of the 1994 Agreement were reproduced in the following succeeding agreements:
Amcor Fibre Packaging National Enterprise Agreement 1998 (1998 Agreement) - as clauses 5 and 10.3.2 of Part 1 respectively;
Amcor Fibre Packaging National Enterprise Agreement 2001 (2001 Agreement) - as clauses 5 and 11.3 of Part 1 respectively; and
Amcor Fibre Packaging National Enterprise Agreement 2004 (2004 Agreement) - as clauses 5 and 11.3.2 of Part 1 respectively.
[46] The above agreements also included a range of provisions concerning continuous improvement, and provided for the continued application of the Metals Award 1984.
[47] The Amcor Fibre Packaging National Enterprise Agreement 2007 (2007 Agreement) also reproduced the text of clause 4 of Part 1 of the 1994 Agreement (as clause 5 of Part A). However, the hours of work provision which first appeared as clause 9.3 of the 1998 Agreement was modified in clause 9.2 of Part A of the 2007 Agreement such that it was in the same terms as clause 9.2 of the 2019 Agreement (save that there was a reference to "Amcor" rather than "Orora" in clause 9.2(b)(i)). The 2007 Agreement also, in clause 3.2, incorporated the terms of the Metals Award 1998 as in operation just before the making of the agreement, but clause 3.5 provided that, in the event of any inconsistency, the express terms of Part A of the agreement would "take precedence". The 2007 Agreement substantially retained the continuous improvement provisions of the 2004 Agreement.
[48] In the following agreement, the Amcor Fibre Packaging National Enterprise Agreement 2010 (2010 Agreement), clause 5 of Part 1 was modified to provide:
HISTORICAL SITE DIFFERENCES
5.1 The parties acknowledge that Amcor Fibre Packaging has acquired a number of companies in recent years and as such it is recognised that each site may have practices and conditions not in place at any other site/s.
5.2 The parties agree that interstate site differentials will be maintained for the period of the Agreement and recognise that Wage Parity across Amcor Fibre packaging sites is an issue between the parties. The parties agree to consult with each other at a national level to review their respective positions on Wage Parity prior to the next EBA. Initial consultation will commence 3 months after approval of the agreement by FWA, except that where within a state a site is identified as having a significant wages anomaly, then the parties shall meet within one month of the Agreement being accepted by the members to ensure an outcome which will rectify the anomaly.
5.3 The process of removing significant anomalies will recognise proposed adjustments to be implemented by the introduction of skill based pay and the need for the Company to attract specialised skills in seasonal businesses.
[49] Clause 9.2 of Part 1 of the 2010 Agreement remained the same as in the 2007 Agreement. The effect of clauses 3.2 and 3.5 of the 2007 Agreement were repeated in clause 3.2 of the 2010 Agreement. Clauses 3.2, 5 and 9.2 retained the same numbering and text in the Amcor Fibre Packaging National Enterprise Agreement 2013 (2013 Agreement). In the following agreement, the Orora Fibre Packaging National Enterprise Agreement 2016 (2016 Agreement), clause 5 of Part 1 was modified so that the references to "Amcor" were replaced with "Orora" and the reference to "FWA" was replaced with "FWC". This meant that the clause was in the same terms as clause 5 of the 2019 Agreement. Clause 9.2 remained in the same terms. Clause 3 was in the same terms as clause 3 of the 2019 Agreement. The 2010, 2013 and 2016 Agreements all retained broadly similar provisions concerning continuous improvement.
Proper construction of clause 5 of the 2019 Agreement
[50] Before turning directly to the grounds of appeal and the notice of contention, we will first identify what we consider to be the proper construction of clause 5. That construction is necessarily informed, we consider, by the clause's history in the predecessor agreements dating back to 1992 and the objective background facts disclosed in Mr Dwyer's evidence.
[51] The phrase used in the heading of clause 5, "Historical site differences", although not repeated in the text of the clause itself, serves to identify the clause's subject matter. The use of the word "Historical" which, on its ordinary meaning, means "dealing with history or past events", operates to confine the subject matter so that the clause cannot be read as applying to any site differences which might arise.
[52] This "historical" limitation on the scope of the clause is confirmed by clause 5(a) which, although not an operative provision as such, states the context and purpose of the clause. Notwithstanding the reference to Orora in clause 5(a), the origins of the clause in the 1992 and 1994 Agreements and the evidence of Mr Dwyer establish that the "number of companies" which have been "acquired ... in recent years" must be read as referring to the acquisitions made by Amcor in the late 1980s and early 1990s to form the Amcor Fibre Packaging business. The substitution of Orora for Amcor in the 2016 Agreement merely reflects that the Amcor Fibre Packaging business, assembled in the way described in the evidence of Mr Dwyer, was acquired by Orora in 2013, and this modification appears to have been simply a part of a general replacement of all references to Amcor with Orora in the 2016 Agreement as compared to the 2013 Agreement. Thus the historical context described by clause 5(a) leads to the conclusion that, insofar as clause 5 is concerned with the subject matter of "site differences", being "practices and conditions" at a site not in place at any other site(s), it is concerned only with site differences which existed as a result of this historical acquisition process. It is these site differences which are the subject matter of clause 18 of the 1992 Agreement and the first version of the "Historical site differences" clause found in the 1994 Agreement. Importantly, the evidence of Mr Dwyer establishes as an objective background fact that the current working hours practice for maintenance workers at the Revesby site was one of the historical site differences existing at the time of the 1992 and 1994 Agreements. Mr Dwyer's evidence also makes it clear that differences between wage rates at the site, which was the subject of a claim by unions for "wage parity", was another of these historical site differences.
[53] The first sentence of clause 5(b) contains the relevant operative provision. We agree with the Commissioner's conclusion in paragraph [26] of her decision that the expression "interstate site differentials" is a wider concept than the wage differentials sought to be addressed by the "wage parity" claim. As a matter of language, "interstate site differentials" is not confined to the issue of wages and, as the Commissioner stated, the use of the word "interstate" merely reflects the fact that the 2019 Agreement (as did the 1992 and 1994 Agreements and all agreements since) covers different sites across five Australian states. Further, the context provided by clause 5(a) indicates that the phrase "interstate site differentials" encompasses all differences in "practices and conditions" between sites. The bargain disclosed by clause 5(b) is that interstate site differentials (including wage differentials) of the requisite historical nature will be maintained "for the period of the Agreement" - an expression the meaning of which we deal with below - in return for the parties consulting about the wage parity issue prior to the next enterprise agreement and rectifying any "significant wages anomaly" at any site. In this respect, the text is consistent with the evidence of Mr Dwyer concerning the common understanding the parties had reached prior to the 1992 and 1994 Agreements.
[54] By virtue of clause 3(b), clause 5(b) of the 2019 Agreement prevails over any inconsistent incorporated provision of the Metals Award 1998 (as the Commissioner found). We also consider that the application of the maxim generalia specialibus non derogant would apply such that clause 5(b), insofar as it makes specific provision for the maintenance in operation of interstate site differentials of the requisite historical nature, would prevail over any of the general provisions of the 2019 Agreement to the extent of any inconsistency.
[55] It is convenient, before we turn to the grounds of appeal, to deal with Opal's notice of contention. Based upon the construction of clause 5 which we prefer, we consider that the Commissioner was correct in concluding that the effect of clause 5(b) of the 2019 Agreement is to preserve, for the period of the agreement, the hours of work practice for maintenance employees at the Revesby site. As earlier stated, that practice existed prior to the 1992 Agreement and, as an objective background fact, constituted one of the site differences which was intended to be addressed by clause 18 of Part A of the 1992 Agreement and clause 4 of Part 2 of the 1994 Agreement. As such, it is an "historical" site difference to which clause 5 applies. Clause 5 prevails over any inconsistent incorporated provisions of the Metals Award 1984 and, insofar as it applies to the historical working hours practice at the Revesby site, prevails over the general provisions of the 2019 Agreement.
[56] We were initially attracted to the proposition that clause 9.2(b)(v) of the 2019 Agreement, which permits changes in the method of organising ordinary working hours during the life of the 2019 Agreement, might permit an alteration to the practice at the Revesby site. This was premised on the assumption that clause 9.2(b)(v) was a provision of more recent origin than clause 5 and, because it dealt with the specific subject matter of changing working hours during the currency of the agreement, was not relevantly subject to the generalia specialibus non derogant maxim. However, as the above historical analysis has demonstrated, that assumption is incorrect. Clause 9.2(b)(v) is of the same antiquity as clause 5: it is the same in substance as clause 9.2.2.4 of the 1994 Agreement. As such, we do not consider that an intention may be discerned from its text that it is to displace the operation of clause 5(b) of the 2019 Agreement in respect of an historical site difference. Additionally, it may be inferred that the parties have, from the 1994 Agreement up to the 2016 Agreement, treated the earlier equivalents of clause 5 as preserving the Revesby working hours practice notwithstanding the existence of the earlier equivalents of clause 9.2(b)(v). This past accepted practice informs the construction of clauses 5 and 9.2(b)(v) of the 2019 Agreement.
[57] In respect of the eight propositions advanced in connection with Opal's notice of contention, we have effectively dealt with, and rejected, propositions (1), (2), (3) and (8). In relation to proposition (4), we do not accept that the term "differentials" has historically been understood to be confined to differences in rates of pay between groups or classifications of employees. No elucidation of this proposition has been provided by Opal. The premise of proposition (5) is, strictly speaking, incorrect and in any event it has no merit. The expression "interstate site differentials" was not used in the 1992 Agreement; it first appeared in clause 4 of the 1994 Agreement, which was certified pursuant to s 170MA of the Industrial Relations Act 1988 (Cth) as it was in 1994. Although s 170MA was enacted pursuant to the interstate industrial dispute resolution power in s 51(xxxv) of the Constitution, there is no reason to think that the use of the word "interstate" in clause 4 of the 1994 Agreement is to be read as referable to the constitutional concept of an interstate industrial dispute. Instead, as explained earlier, "interstate" is simply to be read in the way discussed by the Commissioner. The evidence of Mr Dwyer as to the objective background facts at the time of negotiations for the 1994 Agreement confirms this conclusion.
[58] In respect to propositions (6) and (7), for the reasons earlier stated we do not consider that the effect of clause 5 of the 2019 Agreement is to preserve in entirety the status quo at each site or to prevent any change to a practice or condition at any site which is different to any other site; rather, it only preserves those site differences of an historical nature which existed at the time of the 1992 and 1994 Agreements. We do not consider therefore that clause 5, properly construed, defeats the purpose of those provisions of the 2019 Agreement which involve a commitment to and the implementation of the principles of continuous improvement in order to improve productivity. Our earlier historical analysis also plainly demonstrates that provisions concerned with continuous improvement and productivity enhancement have existed side by side with the earlier equivalents of clause 5 ever since the 1994 Agreement, which indicates that the parties have never treated the preservation of historical site differences as defeating the former category of provisions. It might finally be observed that the fact that the issue of wage parity has not been addressed in the past 30 years indicates that the original bargain whereby the wage parity issue was to be deferred in return for the maintenance of historical site differentials has continued throughout.
[59] It is only necessary for us to consider ground 1(a) of the AMWU's appeal. The term "period of the Agreement" in clause 5(b) of the 2019 Agreement is not defined. There is no dispute that the term is to be construed by reference to clause 2. In her decision the Commissioner stated, without explanation, that the "period of the Agreement is set out in clause 2 of the 2019 Agreement and means until 30 September 2022."[18] For the reasons which follow, we respectfully disagree with that conclusion.
[60] Clause 2 is entitled "Date and period of operation". The heading identifies the subject matter of the clause and, consistent with the heading, the text of the clause deals with, first, the date of commencement of operation of the 2019 Agreement and, second, the period of operation of the agreement. In respect of the second matter, the clause provides that the 2019 Agreement "...will remain in force until 30 September 2022 or thereafter until a replacement Agreement is negotiated."
[61] It may be noted that the "period of operation" to which the heading of the clause refers is the period in which it "will remain in force...". This immediately draws attention to the statutory context in which the 2019 Agreement was made, and a number of provisions of the FW Act are relevant in that context. Section 186(5) provides, as a requirement for approval, an enterprise agreement must specify a "nominal expiry date" that is no more than four years after the Commission approves the agreement. However, the FW Act does not provide that an enterprise agreement automatically ceases to remain in force upon reaching its nominal expiry date. Instead, s 54(2) provides that an enterprise agreement, once it commences operation, does not cease to operate until the earlier of (a) the day on which a termination of the agreement comes into operation under ss 224 or 227 or (b) the day on which s 58 first has the effect that there is no employee to whom the agreement applies. In respect of s 54(2)(b), s 58(2) provides that if, in respect of an enterprise agreement that applies to an employee, a later agreement comes into operation which covers the same employee, the first agreement ceases to apply to the employee if it has passed its nominal expiry date and can never apply again. Thus, if a new agreement is made which covers all the same employees as an existing agreement and the nominal expiry date of the existing agreement has passed, the existing agreement ceases to operate.
[62] Clause 2 is to be construed as referable to this statutory framework governing the period in which enterprise agreements have operation. The 30 September 2022 date specified in clause 2 is the nominal expiry date, but the text expressly contemplates that the agreement will continue in force thereafter "until a replacement Agreement is negotiated." It is clear enough, despite the infelicitous use of the word "negotiated", that this is intended to be a reference to the circumstances dealt with in ss 54(2)(b) and 58(2) whereby an enterprise agreement will cease to operate once a new agreement covering the same employees comes into effect and the nominal expiry date has passed. Thus, the period of operation of the 2019 Agreement described in clause 2 is intended to be same as the period of operation prescribed under those provisions of the FW Act. In concluding that the period of the operation of 2019 Agreement under clause 2 was until 30 September 2022, the Commissioner erred by disregarding the full text of the provision and, further, by confining the period of operation of the agreement in a manner inconsistent with the relevant provisions of the FW Act.
[63] We consider therefore that, in the first sentence of clause 5(b), the "period of the Agreement" is the period in which the 2019 Agreement remains in force until it ceases operation consistent with ss 54(2)(b) and 58(2) of the FW Act - that is, until such time as a replacement agreement comes into effect at a time after 30 September 2022. It may be added that this approach creates a temporal alignment between the first sentence of clause 5(b) and the second sentence, which provides that the parties agree to consult and review their positions as to wage parity "prior to the next EBA". This alignment is consistent with the underlying bargain whereby historic site differentials are maintained in return for wage parity being reviewed prior to the next agreement.
[64] The Commissioner's incorrect construction of the expression "period of the Agreement" in clause 5(b) of the 2019 Agreement caused her to give the incorrect answer to the question posed for determination. Properly construed, clause 5(b) operates to require Opal to preserve the historical practice of working hours for maintenance workers at the Revesby site until the 2019 Agreement ceases to operate by reason of a replacement agreement coming into effect after 30 September 2022. The appeal is therefore upheld, and we substitute the answer "No" for the answer given by the Commissioner.
(1) Time is extended for the AMWU to file its appeal in this matter until 22 August 2022.
(5) The decision of Commissioner McKinnon issued on 20 July 2022 ( [2022] FWC 1840) is quashed.
(6) The dispute in matter C2022/1228 is determined as follows: the answer to the question "Can Opal change the rostered weekly hours for Revesby maintenance employees from 37 hours per week (whereby two hours are banked for the purpose of taking additional leave) to 35 ordinary hours per week, plus a 10-minute shift changeover paid at overtime rates?" is "No".
Sydney with video link to Melbourne using Microsoft Teams:
[17] See James Cook University v Ridd [2020] FCAFC 123, 278 FCR 566, 298 IR 50 at [65(iv)-(v)] per Griffiths and SC Derrington JJ
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Australian Manufacturing Workers' Union
Opal Packaging Australia Pty Ltd [2022] FWCFB 231