Construction, Forestry, Mining and Energy Union v Anglo Coal

THE AGREEMENT 3 The enterprise agreement was entitled the Callide Mine Union Enterprise Agreement 2012 ("the Agreement"). It contained the following relevant provisions: "3. Parties Bound & Application This Agreement is between Anglo Coal (Callide Management) Pty Ltd (Company) and each Employee of the Company who is a member of the CFMEU or AMWU or CEPU, and employed in a classification set out in clause 9 of this Agreement (Employee). This Agreement will also cover the Construction, Forestry, Mining and Energy Union, the Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union and the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (Union). … 7. Definitions … Employee When prefixed with a capital "E" shall mean an Employee as referred to in clause 3. … Temporary Employee Shall mean an Employee engaged by the Company an (sic) paid in accordance with clause 8.1(b). Workplace Representative Shall mean an Employee elected as a member of the Lodge/Branch Executive or a Shift Delegate or any other person/s chosen by an Employee to represent them under this Agreement or during the course of employment (in accordance with Union rules). 8.2 Recruitment and Selection Recruitment and selection decisions for new Production or Engineering Employees will be based on merit and undertaken with the involvement of up to two Employees from the relevant workgroup. The final decision rests with Management. 8.3 Duties The Company is committed to the effective and efficient utilisation of all its Employees. The Company recognises that each Employee has developed a particular set of skills over time through relevant workplace training and experiences. These skills are generally aligned to a particular functional area and through the effective application of these skills Employees can make a valuable contribution to the workplace. Priority in training will be given to Employees engaged in accordance with this Agreement. a) An Employee will safely perform work as reasonably directed within their recognised skills, competence and training, and actively participate in or conduct any necessary training that is reasonably required by the Company. Trainers will be required to train others as reasonably directed however where the person they are required to train is not: • covered by this Agreement; • supplementary labour; • an OEM; or • a Maintenance Contractor. such training will be by agreement between the Employee and the Company. b) An Employee will have a principal function in the Production or Engineering area but will be required to safely perform any other duties as reasonably directed within their recognised skills, competence and training. c) An Employee will permit any employee, regardless of their principal function, to perform work within their recognised skills, competence and training that would normally be conducted by Employees as outlined in clause 9 of this Agreement. The Company may withhold payment from an Employee for any period that work is not performed in accordance with clauses 8.3(a), (b) or (c). … 9.1 Production Classification Levels Unless employed in accordance with clause 10, the Company will classify an Employee as either: • Production Employee Level 1; • Production Employee Level 2; or • Production Employee Level 3 … (d) The main duties of a Production Employee Level 3 will be in accordance with the Company's Position Description as varied from time to time for the position of either Shotfirer or Open Cut Examiner, and may include those duties prescribed in 9.1(c) and other duties specified by the Company in accordance with applicable legislation. The Company may at its discretion also appoint other Employees performing existing production skills as a Production Employee Level 3. … 16. Grievance Procedure 16.1 Continuation of Work Any grievance, dispute or claim arising out of the application of this Agreement and the National Employment Standards (NES) shall be dealt with in accordance with clause 16.2. Whilst this procedure is being followed, work will continue in accordance with the reasonable work directions of an authorised Company representative, within the Employee's recognised skills competence and training, and in accordance with safe working practices. The parties will seek speedy resolution of grievances arising out of the application of this Agreement and will not unreasonably hinder genuine endeavours for the speedy resolution of a grievance. 16.2 Procedure a) The matter shall first be discussed between the Employee, the Employee's Workplace Representative and their immediate Supervisor. b) If the matter remains unresolved, it shall be referred in writing by the person raising the grievance for discussion between the Employee, the Employee's Workplace Representative and the relevant Process Coordinator or their representative. c) If the matter remains unresolved, it shall be referred for discussion between the Employee, the Employee's Workplace Representative and the relevant Department Manager or their representative. d) If the matter remains unresolved, it shall be referred to an official or employee of the Employee's union, and senior Company officials for resolution. e) If the matter remains unresolved, it will be referred to Fair Work Australia or court of competent jurisdiction. By agreement between the parties all or any of the steps c) or d) may be bypassed in the interests of speedy resolution."

THE FACTUAL BACKGROUND 4 The parties filed an agreed statement of facts and the primary judge, having heard evidence from Mr Richard Hibble (an employee of Anglo Coal and the President of the Callide Valley Lodge of the Union) and Mr David Palmer (a senior manager at the Callide Mine at relevant times), made further findings which were not challenged on this appeal. The following summary is drawn from these sources. 5 The Agreement was made under the Fair Work Act 2009 (Cth) ("the Act"). It was approved by Fair Work Australia (as it was then) and commenced operation on 11 April 2012. The Union and Anglo Coal were parties to the Agreement. 6 At the beginning of 2014 Anglo Coal was sustaining substantial losses in operating the mine. It determined that it needed greater flexibility in the manner in which it conducted operations. One measure that was agreed on was the creation of three new positions of OCE/Supervisor. 7 Part of the process of creating the new positions involved the raising of a "Position Vacant Requisition Form" for each of the proposed positions. In dealing with the position to which Mr Ellis Brunker was later to be appointed, it was noted that: "Terry Daly is a current OCE employed under the EA. He has requested LSL for 15 months from 16.06.14 - 18.09.2015." At another point the drafter of the form said that the person appointed to one of the OCE/Supervisor positions "will be on exactly the same roster as: Terry Daly …". 8 Anglo American published a role profile for the OCE/Supervisor position. The role summary explained that: "The Open Cut Examiner/Supervisor (OCE/Supervisor) exists to perform two core functions within the Production team. In the capacity as an appointed Supervisor, the role is accountable for building effective working relationships with mine management, team members and other teams, and will be responsible for monitoring operating techniques and productivity, team member development, performance management and leave management for the shift as well as ensuring that personnel are aware of their obligations and the required standards so as to allow the operation to be efficient as well as compliant. In the capacity as appointed Open Cut Examiner, the role executes a statutory duty to the mining operation focusing on ensuring a safe workplace for coal mine workers, including monitoring, inspecting and reporting on mining activities and conditions and taking corrective actions or issuing corrective actions to make the activity or area safe." 9 Among the "key work outputs and accountabilities" of the position were included: "• To lead production crews to achieve targets in accordance with mine plans and safety, policies, procedures and statutory requirements; … • Build, lead and develop a team to deliver departmental plans and continuous improvement objectives; … • Contribute to the leadership of the team and work collaboratively with other Supervisors and the Superintendent to deliver on mining objectives in line with the business plan; … • Monitor and manage the team's performance against the objectives of the department in line with the plan; • Be an effective leader and team member by demonstrating a commitment to safety and positive working behaviours." 10 The qualifications for the position included supervisory experience in mining operations, a demonstrated experience supervising a team to deliver against targets and a track record in driving continuous improvement. The successful applicant was required to have strong interpersonal and communication skills so as to be able effectively to lead a team. 11 The organisation chart placed the OCE/Supervisor position on the same level as production supervisors and immediately above production crews. The OCE/Supervisor was to report to the Production Superintendent and the production crews reported to the OCE/Supervisor. 12 Throughout the life of the mine Anglo Coal had employed OCEs. This was because the governing legislation (s 59 of the Coal Mining Safety and Health Act 1999 (Qld) and reg 105 of the Coal Mining Safety and Health Regulation 2001 (Qld) ("the Regulations")) required that a person holding an OCE's certificate of competency was to be present at the mine to oversee safety requirements during surface excavations. For practical purposes, the mine could not function without an OCE being present. 13 Under the Agreement a person holding OCE qualifications was classified as a "Production Employee Level 3". Other, more senior, employees, including supervisors and managers were qualified OCEs. The duties of OCEs were normally performed by employees who were classified as Production Employees. If such a person was not available it was necessary, from time to time, for a more senior employee holding the necessary qualifications to perform the role in order to ensure that production work could continue. Under the Regulations the person performing the OCE role at any given time had to treat that role as being his main responsibility although he could perform other duties. 14 Anglo Coal determined that holders of OCE/Supervisor positions would not undertake both OCE and supervisory duties at the same time. As a result, when they were rostered on a shift, they performed one or other but not both of these duties. 15 The positions were advertised on 14 March 2014. Applications closed on 28 March 2014. The advertisement for the position contained the following paragraphs: "Callide Mine is open to new ideas and encouraging change through process, systems improvements and a leadership focus. As a leader at Callide Mine, you will bring along leadership that embraces values of accountability and delivery of results. We currently have vacancies for experienced OCE/Supervisors on various Fixed Term contracts which extend through until 2015. As the OCE/Supervisor your role will be to monitor, inspect and report across mining operations to ensure all activities and conditions are safe, compliant with relevant legislation and Callide SHEC requirements. Your strong track record of leadership and proactive safety management and demonstrated commitment to continuous improvement along with excellent communications skills and the capacity to deliver compliance through direction, education and consultation as required is essential." 16 The advertisements for the OCE/Supervisor positions did not disclose wage or salary levels. The "total cost" of each of these positions was, according to the position vacant requisition form, to be $244,890 per annum. There was further evidence that Anglo Coal proposed to pay Mr Brunker about $40,000 more than what he would have received had he held a production level 3 classification under the Agreement for the 15 months of his employment as an OCE/Supervisor. 17 Three appointments were made. Mr Ellis Brunker was employed on 14 May 2014, Mr Dallas Anthony on 15 May 2014 and Mr Keith Hallam on 13 June 2014. 18 Mr Brunker was appointed in anticipation that one of the company's long term employees, an OCE, Mr Terry Daly, was about to proceed on long service leave for 15 months. Mr Brunker was given a fixed term contract for that period. There was some evidence, to which it will be necessary to return, about whether Mr Brunker was rostered exclusively as an OCE on shifts after Mr Daly went on leave. There was no equivalent evidence relating to Mr Anthony and Mr Hallam and counsel for the Union frankly conceded that its case in respect of these two appointees was not as strong as that relating to Mr Brunker. 19 At some time between March and May 2014 Mr Hibble became aware that Anglo Coal had advertised the new positions, had filled at least one of them and, in doing so, had not involved any person from the relevant workgroup in the recruitment or selection process for the positions. He considered that Anglo Coal had failed to comply with its obligations under clause 8.2 of the Agreement. On 19 May 2014 Mr Hibble discussed the issue with Mr Paul Higgins, the Acting Production Supervisor and Production Superintendent at the mine. These discussions did not resolve the issue. 20 On 19 May 2014 Mr Hibble completed a "Document of Grievance" which bore the subheading: "Step 2 - Meeting Under Grievance Procedure". Mr Hibble referred to the advertisement for the OCE/Supervisor positions and drew attention to the provisions of clause 8.2 of the Agreement. He then said that "no employees from the relevant workgroup have been involved in the recruitment and selection of the position of OCE/Supervisor (Callide) - Fixed Term Contract." He suggested that the dispute be processed in accordance with clause 16 of the Agreement. 21 On the following day Mr Hibble emailed a copy of the document to Ms Stephanie Oppermann, the Human Resources Superintendent for Anglo Coal at the mine. In the email Mr Hibble advised that both his supervisor and the Production Superintendent had signed the document "as require[d] by the grievance procedure which is now at step c) of the [Agreement]." He asked Ms Oppermann to "confirm whether the meetings to progress steps c) and d) are required or do we agree to bypass those steps and move onto step e) in the interest of a speedy resolution." 22 Ms Oppermann responded by letter dated 26 May 2014 addressed to Mr Hibble. In that letter she advised that: "This [OCE/Supervisor] role is not covered by the [Agreement]. Therefore, the recruitment of this role is not subject to the [Agreement's] Recruitment & Selection clause or the Grievance Procedure. The Company is not therefore required to progress your Grievance under the Grievance Procedure of the [Agreement]." 23 On 6 August 2014 Mr Hibble wrote to Ms Oppermann advising that the Union considered the OCE/Supervisor positions to fall under the coverage of the Agreement and that the grievance should be processed in accordance with clause 16. He requested "that the company progress the dispute in accordance with clause 16 … within 48 hours of receipt of this correspondence." 24 Anglo Coal did not respond to this letter.

THE PROCEEDING 25 The Union then commenced the present proceeding. It alleged that Anglo Coal had contravened s 50 of the Act by failing to comply with the requirements of clauses 8.2 and 16 of the Agreement. It sought declarations that these contraventions had occurred and the imposition of pecuniary penalties on the company. 26 The primary judge held that the alleged contraventions had not occurred and dismissed the Union's application. 27 His Honour held that the OCE/Supervisor positions were not covered by the Agreement. The positions were, he considered, both qualitatively and quantitatively different from those of OCEs who were classified, under the Agreement, as Production Employees Level 3. The principal difference was that the new positions carried supervisory responsibilities. His Honour said that: "37. Here … a construction of the [Agreement] such that, if an Employee performed any OCE duty, that person should be classified and paid as a Production Employee Level 3, because Open Cut Examiner is one of the example positions in clause 9.2 [of the Agreement] for that level, would yield an odd outcome. The rate of pay fixed for the OCE/Supervisor position is greater than that of a Production Employee Level 3. This aside, both as a matter of language and read in context, clause 8.3 b) is directed to the additional undertaking of duties which are not the principal function of the position holder. The use of the term 'principal function' in both clause 8.3 b) and clause 8.3 c) complements the use of the terms 'core operating skills' and 'main duties' in clause 9.1 and 'main duties' in clause 9.2. Evident in the [Agreement] is an intention to classify Employees as either Production or Engineering Employees according to their principal function. None of the exemplified operating skills for either a Production Employee or an Engineering Employee include 'supervision' of other Employees. … 40. A quality which a person holding an OCE/Supervisor position had to have in order to be appointed to that position was supervisory skills. Just to have an open cut examiner's certificate was necessary but not sufficient. The quality which dictated that the holder of an OCE/Supervisor position had to have to be paid at least as much as persons already employed in positions where the duties were supervisory (and perhaps occasionally coincidentally that of OCE) was possession of supervisory skills. That the position holder would also perform as occasion required the duties of an OCE dictated that the new position attracted yet slightly higher pay. Even so, the quality which lifted the new position beyond the pay rate applicable to an OCE and thus beyond a Production Level 3 Employee was the skills necessary to undertake and the undertaking of supervisory duties. 41. Once it is concluded, as in my view it has to be on the evidence, that the new position is not a sham substitute for a pre-existing OCE position filled either by a contractor or an employed OCE, the result must be that the [Agreement] does not apply to a person employed in the new position. It is a supervisory position the occupant of which must be able to undertake, as required, the duties of an OCE. The latter is not through the principal quality of the position. The 'principal function', 'main duties' or 'core operating skills' are supervisory." 28 Although his Honour did not deal expressly with the Union's complaint that Anglo Coal had failed to comply with clause 16 of the Agreement, it is implicit in his reasons that he accepted the company's contention that, because the new positions were not comprehended by the Agreement, the grievances relating to the advertising and filling of the positions did not arise under it and that clause 16 was, as a result, not engaged.

THE APPEAL 29 In its appeal to this Court the Union challenged his Honour's finding that the Agreement did not apply to persons employed as OCE/Supervisors. It also complained that the primary judge had failed to deal with its allegation that Anglo Coal had contravened clause 16 of the Agreement and maintained that this clause was engaged whether or not there had been a contravention of clause 8.2. 30 Anglo Coal filed a notice of contention in which it sought to uphold the primary judge's decision on three additional grounds. They were that: Because it was not obliged to comply with clause 8.2, no "valid" grievance existed within the meaning of clause 16. It did not, in any event, breach clause 16, because it did not prevent the Union from referring any purported grievance to a department manager, a state-wide conference, the Fair Work Commission or a court of competent jurisdiction. It did not breach clause 16 of the Agreement (even if it was engaged) because the Union had failed to comply with the third step prescribed by clause 16.2 in that Ms Oppermann was not the relevant "representative" of the "Department Manager" who was required to deal with this stage of the grievance process on the company side. 31 At trial, Anglo Coal did not press the third ground of its notice of contention.

CLAUSE 8.2 32 It was common ground that no employees of "the relevant workgroup" were involved (whatever that may be understood to mean) in the recruitment and selection decisions for the OCE/Supervisor positions. What was in dispute was whether the OCE/Supervisors were "new Production or Engineering Employees" to whom clause 8.2 applied. New OCEs met this description because they were classified as Production Employees pursuant to clause 9.1. The Union contended that so too did the holders of the new positions. 33 The Union further complained that the primary judge had erred by dealing collectively with the three OCE/Supervisor positions. It contended that he should have treated them discretely. Had this happened, so it was said, the Union might have succeeded in establishing a contravention in relation to the filling of the first position (that to which Mr Brunker was appointed) even if it may have failed in respect of the other two. 34 The points of difference between Mr Brunker's position and the others included: Mr Brunker was chosen to replace an OCE (Mr Daly) who was classified as a Production Employee Level 3. Mr Daly was about to commence a period of 15 months' long service leave and Mr Brunker was given a 15 month fixed term contact which covered substantially the same period during which Mr Daly was to be absent. There was some evidence to suggest that Mr Brunker had been rostered to perform OCE but not supervisory duties on most (if not all) shifts which he worked having been appointed as an OCE/Supervisor in May 2014. 35 There were in evidence before the primary judge at least two versions of rosters at the mine. One was in the form of excel spreadsheets, the other was described as "a scroll format". They covered the period between 1 February 2014 and 31 January 2015. The evidence suggested that the author of the documents was the company's Superintendent for Drill and Blast Crews, Mr Trevor Douglas. The rosters were maintained on the company's computer system and were subject to change on a regular basis. A principal purpose of the rostering was to ensure that the statutory requirement that an OCE be present at all times during production work was met. Mr Palmer referred to the roster as "a planning tool". It seems likely that the roster was originally drawn up at some time prior to 1 February 2014. The version that was in evidence would appear to be a later amended version. The three OCE/Supervisors were not appointed until later in the year but their names appear on the roster. It is not possible, on the evidence, to determine when the version of the roster which was in evidence came into existence. 36 Mr Daly and Mr Brunker were members of the same "crew". Mr Daly was not rostered on to perform OCE work at any time between 1 February 2014 and his commencement of leave on 15 June 2014. During this period Mr Brunker (who was not then an employee) was "rostered" on for "OCE relief" on a number of days. On other days he was listed as attending training courses or being on leave. Between 16 June 2014 and 31 January 2015 Mr Brunker was rostered on continuously (apart from some school holidays) on every day as working on "OCE relief". 37 Mr Palmer was taken to these rosters when he was cross-examined. The Union placed particular reliance on what it said were a number of concessions made by Mr Palmer to the effect that: The document definitely suggested that Mr Brunker was rostered on to work only as an OCE during any given shift in replacement of Mr Daly (T44.37); The document definitely indicated that Mr Brunker would be providing coverage of the same shifts which Mr Daly would have worked had he not been on leave (T45.10); and Only Mr Brunker was allocated to shifts which Mr Daly would otherwise have worked (T45.21). 38 Having examined the rosters, which he described as "planning" documents the primary judge found (at [33]) that: "Consistently with this and on the evidence, roster planning at the Callide Mine in 2014 contemplated that an OCE/Supervisor would regularly undertake OCE duty, sometimes for an extended period, sometimes not at all. However, regard to that planning does not bear out that each of the new OCE/Supervisor position holders was always allocated OCE duty only. For example, regard to one such planning document, Exhibit 5, discloses that, during the June/September 2014 period, Mr Dallas Anthony was not allocated OCE duty whereas Mr Ellis Brunker was extensively allocated to OCE duty." 39 In our view the Union's contentions must be rejected. 40 Clause 8.2 does not, in terms, impose any obligation on Anglo Coal. It may, however, be accepted that it is implicit that recruitment and selection decisions were to be made by the company in accordance with procedures determined by it. So much is suggested by the final sentence which makes it plain that the choice of new employees "rests with Management". Any "involvement" of employees would occur in the course of the management-directed process. Anglo Coal could only contravene clause 8.2 if the provision was susceptible of the further implication that the company was required to facilitate the involvement of those employees. 41 The recruitment and selection decisions covered by clause 8.2 were those "for new Production or Engineering Employees". It was common ground that these were persons who, prior to appointment, were not employees of the company and who would, on appointment, be classified as either production or engineering employees pursuant to clause 9. Relevantly, clause 9.1(d) provided that employees whose main duties were performed in the position of OCE were to be classified as Production Employees Level 3. 42 The new positions differed significantly from the OCE role. They carried important additional supervisory responsibilities. This is made plain by the role profile, the "key work outputs and accountabilities" and the qualifications required for appointment. As can be seen from the passages set out above (at [8]-[10]) OCE/Supervisors were to act as team leaders, managing performance with a view to achieving prescribed objectives. They were to have responsibility for the development and performance standards of team members for whom they were responsible. They also had an educative role in relation to matters such as compliance with statutory standards and the maintenance of safety. These responsibilities were additional to those of an OCE. 43 The OCE/Supervisors were placed on the same organisational level as Production Supervisors. Persons qualified as OCEs who were classified as Production Employee Level 3 reported to them. Their additional responsibilities were recognised by their entitlement to a considerably higher level of remuneration than that paid to Production Employees Level 3. It matters not, in our view, that the company determined that, on any given shift, OCE/Supervisors would not perform both OCE and supervisory functions, even though it would have been possible for them, lawfully, to have done so. Their dual roles provided the company with what it considered to be necessary flexibility. 44 This evidence amply supported the primary judge's findings that the new positions were not "shams" and that they did not fall within the Production Employee Level 3 classification in the Agreement. 45 Even had it been the case (inconsistently with the primary judge's finding) that Mr Brunker had been engaged to replace Mr Daly and had been rostered on each and every shift which Mr Daly would have performed during the 15 month period on which he was on leave, this would not have altered the foregoing analysis because Anglo Coal would have been free to adjust the roster at any time and require Mr Brunker to perform supervisory rather than OCE duties on any of the shifts. In any event the roster on which the Union relied covered only about half of the period during which Mr Daly was to be on leave. There was no evidence about what duties Mr Brunker did, in fact, perform between 1 February 2014 and the completion of Mr Daly's leave in September 2015. Furthermore, any determination of whether clause 8.2 imposed an obligation on Anglo Coal would have had to have been made at the time the selection process was being undertaken and could hardly have been influenced by the work Mr Brunker actually performed in the 15 month period after his appointment. 46 The OCE/Supervisor positions were not to be filled by "new Production or Engineering Employees" within the meaning of clause 8.2. As a result Anglo Coal was not required to involve existing employees in the recruitment and selection process and did not contravene the sub-clause by failing to do so.

clause 16 47 At trial the Union argued that a broad construction should be accorded to the words "grievance, dispute or claim" and the phrase "arising out of the application of this Agreement" at the commencement of clause 16 such that it was engaged even if Mr Hibble was mistaken in his belief that clause 8.2 applied to the recruitment and selection process for the OCE/Supervisor positions. It submitted that Anglo Coal had failed to satisfy its obligations under clause 16 and, as a result, had contravened that clause. On this appeal the Union complained that the primary judge had "failed to engage with and address" these submissions. 48 Anglo Coal, both at trial and on appeal, conceded that the complaints made by Mr Hibble on 19 May 2014 and 6 August 2014 were capable, as a matter of law, of being characterised as "a grievance, dispute or claim." The company, nonetheless, contended that the Agreement, properly construed, did not have the effect that a grievance, dispute or claim relating to a position not covered by it was caught by clause 16. It also sought to rely, if need be, on the grounds contained in its notice of contention (see above at [30]). 49 As already noted it was common ground that Mr Hibble's complaint constituted a grievance or dispute within the meaning of clause 16. What was (and is) at issue was whether that grievance or dispute arose out of the application of the Agreement. 50 In Alcoa of Australia Pty Ltd v Amalgamated Engineering Union (Australian Section) (1965) 7 FLR 180 Spicer CJ and Eggleston J considered the meaning of the words "dispute or claim arising out of the operation of this award." Their Honours expressed the view (at 183) that: "It seems clear to us that a dispute or claim cannot be said to arise out of the operation of an award unless it has some kind of relation with the provisions of the award itself. What sort of relationship must exist may be a matter for argument in other cases." 51 The question which their Honours left for determination in other cases has been answered in later decisions having regard to grammatical norms and the context in which the words appear. 52 One such case, relied on by the Union, was Construction, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Thiess Pty Ltd (2011) 212 IR 327. An employer exercised a discretionary power, under an agreement, to terminate rostering arrangements. The union invoked a dispute settlement clause in the agreement. It dealt with "procedures to settle disputes and grievances relating to any and all matters arising out of or in connection with the application or interpretation of this Agreement …". All parties accepted that the phrases "relating to", "arising out of" and "in connection with" were of wide import. Relevantly it was held (at 337) that: "The phrase "arising out of" implies "a sense of consequence": see Government Insurance Office (NSW) v RJ Green & Lloyd Pty Ltd (1966) 114 CLR 437 at 447 (per Windeyer J). It refers to a less immediate association than a direct causal relationship between the dispute or grievance on the one hand and the application and interpretation of the Agreement on the other." 53 The construction of this phrase was not controversial. The question which divided the parties was what was meant by the word "application". It was held, having regard to the terms of the agreement as a whole, that "application" extended to a decision to terminate a rostering arrangement in the exercise of the company's discretionary power, conferred by the agreement, to do so: see at 339-340. 54 The terms of the Agreement, presently under consideration, differ materially from those in the Thiess case. Most obviously, the words which forge the link between the disputes and grievances and the Agreement ("arising out of") are more narrowly drawn. Furthermore, the grievance procedure in Thiess (unlike the present case) was attracted if a dispute or grievance arose in relation to the "interpretation" of the agreement. 55 In the context of clause 16.1 "the application of this Agreement" will occur when a party seeks to bring one of its provisions into use for some purpose. It may also be attracted if one party complains that another has failed to do something which the Agreement required that party to do. The clause will not, however, be engaged unless the association between the grievance and the Agreement is founded on something more substantial than an assertion that it has application. The grievance will not arise out of the application of the Agreement unless it can be said that, on its proper construction, the Agreement has the effect for which the aggrieved person contends. 56 The Union was unable to point to the invocation, by Anglo Coal, of any provision of the Agreement. Mr Hibble's complaint was founded in his belief that clause 8.2 applied to the process of appointment of OCE/Supervisors. Anglo Coal's response was that the process was not covered by the Agreement and that, as a result, neither clause 8 nor clause 16 was engaged. It may have been, in these circumstances, that there could be said to have existed a dispute over the interpretation of the Agreement. What cannot be said is that there was a dispute relating to its application. The Agreement was not applied simply because Mr Hibble thought, mistakenly, that clause 8.2 had been engaged. 57 Although it is not strictly necessary to do so we would add that we would not have been disposed to hold that Anglo Coal had contravened clause 16.2 had it applied. The process, prescribed by clause 16.2, was to commence with a discussion between an employee or Union representative and the employee's immediate supervisor. If that discussion did not resolve the matters in dispute there was a staged and ascending process which might, in a given case, end with a referral to Fair Work Australia (as it was then). 58 There was a dispute between the parties as to whether the first step had been taken. When Mr Hibble first raised his grievance in writing he did so in a document which referred to "step 2" which we understand to be a reference to paragraph 16.2 b). On the following day he told Ms Oppermann that he considered the grievance procedure had now reached step c), which we understand to be a reference to paragraph 16.2 c). That paragraph provided that an unresolved dispute "shall be referred for discussion between the Employee, the Employee's Workplace Representative and the relevant Department Manager or their representative." The obligation to refer for discussion was not imposed on any particular party. We note that paragraph 16.2 b) provides for referral in writing by the person who raised the grievance. It may be that the draftsman contemplated that the same, unsatisfied, party carried the obligation to make a referral at the next stage. If so that burden fell on Mr Hibble, not Anglo Coal. 59 We also note that the latter stages of the procedure (paragraphs d) and e)) also provide for referral but do not impose the obligation to do so on any particular party. At no stage did Anglo Coal impede or prevent Mr Hibble from referring his grievance to higher levels of management, to the Fair Work Commission or to a court of competent jurisdiction.

disposition 60 The appeal should be dismissed. I certify that the preceding sixty (60) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justices Tracey, Flick and Rangiah.