s.739 - Dispute resolution

Construction, Forestry and Maritime Employees Union

Dispute arising under enterprise agreement - expression of view

• [1] The Construction, Forestry and Maritime Employees Union (CFMEU) has made an application under s 739 of the Fair Work Act 2009 (Act) and the dispute resolution procedure in clause 31 of the Bhagwan Marine Pty Ltd and CFMMEU (Maritime Division) Victoria Enterprise Agreement 2022 (Agreement). The application refers to the Commission a dispute that has arisen between the CFMEU and Bhagwan Marine Pty Ltd (Bhagwan) about the meaning of clause 39 of the Agreement, which provides for a 'construction travel allowance'. The clause states that employees 'engaged in construction works outside of the Maintenance Contracts' shall be entitled to $48.60 per day for travel. The Agreement does not define 'construction works', nor does it define 'the Maintenance Contracts'.

• [2] The CFMEU contends that 'construction' has a broad and well-understood industrial meaning that is consistent with the scope and application of the Building and Construction General On-site Award 2020 (Award) and the Building Act 1993 (Vic), and that to be 'engaged in construction works' would extend to playing a role in a construction project even if the work performed by the employee did not actually entail building or construction, and would also cover an employee's use of construction skills, such as welding or carpentry. It says that employees perform such work on most days, including when it forms part of broader maintenance work.

• [3] The CFMEU contends that the exclusion in respect of 'the Maintenance Contracts' applies only to those contracts entered into between Bhagwan and the Port of Melbourne as of the time the Agreement was made (23 June 2022). It says that so much is clear from an email exchange in May 2022, in which the parties' representatives spoke about excluding the 'POM Maintenance Contract' from the application of the allowance. The CFMEU also points to explanatory material that Bhagwan provided to employees prior to their vote on the proposed agreement, which stated that there would be a 'travel allowance outside of the maintenance contracts'. The CFMEU contends that the allowance is payable in respect of all construction work, other than on days when employees work solely on Port of Melbourne maintenance contracts that existed on 23 June 2022, and that in practical terms this means that the allowance should be paid as a matter of course.

• [4] Bhagwan contends that the word 'construction' in clause 39 should be given its ordinary meaning, which is building or putting parts together, and that maintenance work is different from construction work, even if sometimes it might involve elements of such work. Bhagwan submitted that the meaning of 'construction works' had to be determined in the context of the Agreement, not definitions in other industrial instruments or in legislation, and whether an employee is engaged in construction works was a question of fact that would turn on the nature of the work and whether it consisted substantially (although not necessarily primarily) of construction.

• [5] Bhagwan further contended that the words 'the Maintenance Contracts' meant any maintenance contracts that existed at the time when the Agreement was made. It said that the capitalisation was a drafting error, and that the words carried their ordinary meaning. The correspondence between the parties prior to the vote was not reflective of any common intention that the words should have a more limited meaning, nor was the very general explanatory material that was given to employees of interpretative assistance. Bhagwan said that the allowance was only payable when employees engaged in construction (work substantially involving building or putting parts together), and that it did not apply to any of the maintenance contracts that existed when the Agreement was made, including but not limited to those with the Port of Melbourne.

• [6] At the first conference in this matter, the dispute was discussed at some length but was not resolved by agreement. I offered to express a view to the parties and suggested that I first afford them an opportunity to summarise and confirm their factual and interpretative contentions. They agreed. Having received the parties' summaries and heard from them further at a conference earlier today, I expressed the following view on the merits of the application, in the exercise of conciliation powers under clause 31 of the Agreement. That view was as follows:

• The meaning of 'construction works' is to be ascertained in the context of the Agreement, not the Award or the Building Act. Clause 4 states that the Agreement covers employees who fall within the classification structure and who perform 'Inshore Work'. This is defined in clause 3 as including 'maintenance' and 'wharf maintenance and construction'. There is no bright line in the Agreement between maintenance and construction. The Agreement contemplates maintenance and construction work occurring at the same time. But they are separate concepts. A broad view of 'construction' would leave little work for 'maintenance'. This supports Bhagwan's contention that 'construction' has its ordinary meaning. Further, the reference in clause 39 to construction works tends to focus attention on the nature of the work or project, rather than the specificity of any construction-related tasks being undertaken by an employee, which also tells against the union's broad construction.

• On the CFMEU's interpretation, employees would be performing construction work on most days. But the allowance in clause 39 is not a general allowance. It is a construction travel allowance. That is how the heading of the clause describes the allowance. That is what the substantive terms of the clause prescribe. It applies when employees are engaged in construction works. The clause is evidently not intended to provide for an all-purpose or general allowance. In my view it is improbable that the parties would have chosen such specific words to establish a generally applicable allowance. Had a general travel allowance been intended, why have words of limitation referable to construction? In my view, 'construction' has its ordinary meaning of building or putting together.

• The question of whether an employee is 'engaged in construction works' will necessarily be a question of fact. The application of clause 39 requires a consideration of the overall character of the work that an employee performs on a particular day. If the work consists substantially of construction, the clause is engaged. For example, if the maintenance of a wharf requires new pylons to be built, the employees who are building them will likely be engaged in construction works on those days. But if they are maintaining or repairing existing pylons, they would not be engaged in construction works, even if some of their duties could be said to pertain to construction.

• Then it will be necessary to consider the exclusion in clause 39. The definite article and the capitalisation in the expression 'the Maintenance Contracts' connote that the contracts in question are known to the parties. The exclusion does not apply to all maintenance contracts. The email exchange between the parties prior to the Agreement being made refers to the exclusion of the Port of Melbourne contract, but that does not mean that it was the common intention of the parties that only that contract be excluded. This may have been what the CFMEU wanted, but the words that were used in the clause went beyond this to cover 'the Maintenance Contracts'. This is consistent with the explanatory note sent to employees before the vote, which stated that the travel allowance would be 'outside of the maintenance contracts', not outside the Port of Melbourne contract. The note refers simply to a 'travel allowance'; this might be thought to support the CFMEU's broad interpretation of the 'construction', which would see the allowance operating as a general travel allowance on most days. But in my view the explanatory note is simply a very general one that tells employees that there will be a travel allowance. It does not negate the detail in the clause, which provides for a construction travel allowance.

• The dispute is framed in abstract terms. The parties have asked the Commission to express a view about how clause 39 applies generally. I have endeavoured to assist the parties by doing so. My views, of course, do not formally determine this matter. The CFMEU is at liberty to ask the Commission to arbitrate the matter. However, formal arbitration of an abstract dispute would be unlikely to prevent disputes arising about the application of the clause to particular circumstances. I would encourage the parties to develop an agreed framework for the application of clause 39 by reference to the work currently being undertaken, with a view to confirming what activities involve substantial building works and are not covered by the exclusion.

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