1
[Note: refer to the Federal Court decision dated 14 June 2012 [2012] FCAFC 87 for result
of appeal.]
[2011] FWAFB 6892
DECISION
Fair Work Act 2009
s.604 - Appeal of decisions
Wagstaff Piling Pty Ltd; Thiess Pty Ltd
v
Construction, Forestry, Mining and Energy Union
(C2011/5615)
SENIOR DEPUTY PRESIDENT O'CALLAGHAN
DEPUTY PRESIDENT IVES
COMMISSIONER GAY
ADELAIDE, 7 OCTOBER 2011
Appeal against decision [[2011] FWA 5221] of Commissioner Blair at Melbourne on 5
August 2011 in matter number DR2011/208.
[1] On 26 August 2011 Wagstaff Piling Pty Ltd (Wagstaff) and Thiess Pty Ltd (Thiess)
(the appellants) lodged an appeal pursuant to s.604 of the Fair Work Act 2009 (the FW Act)
against a decision of Blair C. That decision was recorded on transcript at the conclusion of a
hearing on 5 August 2011 and was published1 to the parties on 9 August 2011.
[2] Thiess was admitted as an intervener in the proceedings before Commissioner Blair.
To the extent that it was necessary that we did so, the Full Bench similarly admitted Thiess as
an intervener in this appeal. The Master Builders Association of Victoria also sought to
intervene in these proceedings. Given the initial involvement of that organisation in the matter
as a representative of various other subcontractors to Thiess who operated under similar
agreement provisions and the absence of any objection to this intervention, this request was
granted. A request for intervention made by the Australian Industry Group (AiG) was refused.
The AiG advised that it had a member with a similar agreement but its intervention request
was primarily founded on its general representational role. The AiG was not involved in the
matter at first instance which was conducted on a confidential basis. The AiG’s intervention
request was opposed. On the material provided to us we were not satisfied that the AiG had
established to us that it was a party aggrieved so as to be permitted to intervene.
[3] The decision, the subject of this appeal, was made pursuant to the dispute settlement
procedures in the Wagstaff Piling Pty Ltd and the CFMEU Piling Industry Enterprise
Agreement 2008-20112 (the Wagstaff agreement).
[4] The dispute settlement provisions of the Wagstaff agreement state:
“10. DISPUTES RESOLUTION PROCEDURE
AUSTRALIA FAIR WORK AUSTRALIA
http://www.judgments.fedcourt.gov.au/judgments/Judgments/fca/full/2012/2012fcafc0087
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10.1 A major objective of this Agreement is to eliminate lost time and/or production
arising out of disputes or grievances. Disputes over any work related or industrial
matter or any matters arising out of the operation of the Agreement or incidental to the
operation of the Agreement should be dealt with as close to its source as possible.
Disputes over matters arising from this Agreement (or any other dispute related to the
employment relationship) shall be dealt with according to the following procedure.
10.2 In the event of any work related grievance arising between the Company and
an employee or employees, the matter shall be dealt with in the following manner:
a. The matter shall be first submitted by the employee/s or his/her
employee representative or other representative to the site foreperson,
supervisor or the other appropriate site representative of the Company, and if
not settled, to a more senior Company representative.
b. Alternatively, the Company may submit an issue to the employee/s
who may seek the assistance and involvement of the employee representative
or other representative.
c. Work shall continue without interruption from industrial stoppages,
bans and/or limitations while these procedures are being followed. The pre-
dispute status quo shall prevail while the matter is being dealt with in
accordance with this procedure.
d. If still not resolved, there may be discussions between the relevant
Union official (if requested by the employee/s), or other representative of the
employee, and senior Company representative.
e. The relevant union official commits to make him/herself available to be
involved at any stage of the procedure as required, or in respect of any
potential dispute.
f. Should the matter remain unresolved either of the parties or their
representative shall refer the dispute at first instance to the Victorian Building
Industry Disputes Panel (which shall deal with the dispute in accordance with
the Panel Charter.
g. Either party may, within 14 days of a decision of the Panel, refer that
decision to the Australian Industrial Relations Commission (AIRC) for review.
The AIRC may exercise its conciliation and/or arbitration powers in such
review.
10.3 Any outcome determined by the Victorian Building Industry Disputes Panel or
the AIRC pursuant to this procedure will not be inconsistent with the Australian
Government Implementation Guidelines for the National Code of Practice for the
Construction Industry, the Workplace Relations Act 1996 or the Building and
Construction Industry Improvement Act 2005.
10.4 This procedure shall be followed in good faith without unreasonable delay.
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10.5 If any party fails or refuses to follow any step of this procedure the non
breaching party will not be obligated to continue through the remaining steps of the
procedure, and may immediately seek relief by application to the AIRC.”
[5] That dispute settlement process does not confer an appeal mechanism. As a
consequence, either s.604 of the FW Act has application or, in the alternative, s.120(1)(f) of
the Workplace Relations Act 1996 (the WR Act) could be taken to found the appeal.
[6] Section 576(2)(d) of the FW Act establishes that Fair Work Australia (FWA) is able to
exercise functions conferred on it by other Commonwealth laws. Schedule 19 of the Fair
Work (Transitional Provisions and Consequential Amendments) Act 2009 and the provisions
of the WR Act empower FWA to act under the Wagstaff agreement.
[7] Accordingly, we are satisfied that an appeal may be made pursuant to s.604 of the FW
Act, against that decision, and we have proceeded on that basis.
[8] We note that there was little dispute between the parties as to the practical significance
of this issue given the nature of the dispute and the capacity to similarly consider the matters
pursuant to s.120(1)(f) of the WR Act.
The background to the appeal
[9] Wagstaff is subcontracted to Thiess to undertake piling work on the Tulla-Sydney
Alliance Project (the Project) which involves substantial freeway widening and construction
work.
[10] Thiess has a comprehensive Fitness for Work policy (the FFW policy) which includes
requirements for drug and alcohol testing for its employees, and those of subcontractors
commencing on the project. The FFW policy also requires that employees are subject to
random drug and alcohol testing during a preannounced period each month. Wagstaff is
contractually obliged to facilitate participation by its employees in this testing.
[11] The monthly drug and alcohol testing programme operated on the project from
January 2010 until March 2011. In May 2011 the Construction, Forestry, Mining and Energy
Union (CFMEU) and at least one other union confirmed that Wagstaff and various other
subcontractor employees would not cooperate with the announced testing for that month. An
Order3 issued on 20 May 2011 prohibited industrial action on this basis and the testing
resumed for that month.
[12] On 25 May 2011, and pursuant to the Wagstaff agreement dispute resolution
provisions, the CFMEU advised the Victorian Building Industry Disputes Panel (the Panel) of
a dispute with 13 subcontractors on the project. The CFMEU asserted that the drug and
alcohol testing procedures were in breach of the relevant agreements.
[13] A number of these subcontractors (including Wagstaff) had agreements with common
provisions in the following terms:
“48. DRUGS & ALCOHOL POLICY
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The parties acknowledge the affect that employees with drug and/or alcohol problems
can cause in the workplace. Any employee with such a problem can lead to a loss in
productivity, an unsafe workplace and loss of morale amongst the company. To this
end the parties encourage such persons with a problem to seek help.
To that end the parties agree to apply the Drug & Alcohol policy as contained in
Appendix I.”
[14] Appendix I in these agreements contained the Victorian Building Industry Alcohol and
Other Drugs Policy (the Policy). The Preamble to the Policy relevantly states:
“This policy aims to facilitate the implementation of practical ways in which building
workers themselves can address the alcohol and other drug issues which affect them,
thei4r families or co-workers. It provides guidelines which may be adapted to meet the
specific conditions of different workplaces.”
[15] The Policy is founded on the following Principles:
“PRINCIPLES
Safety is paramount on building sites.
Prevention of safety and health problems is the primary goal of alcohol and drug
policy formulation.
Policy implementation and program management is best founded on consultation
and collaboration between employees and management.
Employees with alcohol and/or other drug problems will be provided with
appropriate assistance, support and access to intervention programs without
jeopardising their employment.”
[16] The Policy sets out objectives and goals which refer to the need for cooperation in
workplaces. In terms of persons affected by alcohol or other drugs it specifies that:
“3. Persons Affected by Alcohol and/or Other Drugs
3.1 A person who is under the influence of alcohol and/or any other drug will not
be allowed to work on a building site whilst he/she is incapable of performing
safe work practices.
3.2 Any person who believes another person on site is a risk to his/her own or
another’s safety should advise an Occupational Health and Safety
representative in confidence. The OH&S representative shall take appropriate
action, based on his/her assessment of the situation.
3.3 If the matter remains unresolved, the OH&S Committee and management in
consultation with the person concerned and the person’s representative will
decided whether that person is capable of performing safe work practices.
3.4 Disciplinary action may be taken by management following consultation with
the OH&S Committee and the person’s representative.
3.5 If disciplinary action is to be taken, one verbal warning, one written warning
shall apply.
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3.6 The OH&S Committee will, as a matter of course, follow up to ensure that the
person is aware of the policy and resources available to people with alcohol
and/or other drug problems, or other problems which may underlie them.”
[17] The Policy then continues to address rehabilitation, preventative strategies and the role
of site safety committees.
[18] On 9 June 2011 the Panel concluded that:
“[8] The Panel is aware that the Drugs and Alcohol Policy has existed in the
industry in Victoria for many years, having been launched in October 1993. Its
formulation was the result of the Victorian Building Industry Alcohol and Other Drugs
Project which commenced in October 1992 with the aims of designing and
implementing practical strategies for promoting health and safety and minimising the
harmful use of alcohol and other drugs in the Victorian building industry. Initially
funded by the Victorian Government and later by Incolink, the project’s original
Advisory Committee included representatives of industry unions and employers,
including the MBAV. The project (and the policy) has since been overseen, along with
other industry occupational health and safety matters, by the Advisory Committee, the
membership of which has, from time to time, changed but, at all times, has continued
to include representatives of industry unions and the MBAV. The formulation of the
Drugs and Alcohol Policy and its endorsement over the years by all the unions and
employer organisations in the industry is but one example of what can and has been
achieved in the industry by mutual co-operation and concentration on achieving results
through cultural change. Its continued inclusion in numerous enterprise agreements,
including those with the employers party to this dispute, is also recognition by the
industry of the importance of maintaining a safe workplace. The Drugs and Alcohol
Policy provides the agreed means by which the industry seeks to address a particular
potential problem relating to safety in the workplace. It does not contain any provision
for testing but rather relies upon co-operation, communication, commitment and trust.
[9] The Thiess Agreement does not, however, contain such a clause or policy.
Rather, at Clause 13.6, it provides as follows:
13.6 Fitness for Work
The Company is committed to promoting the safety, health and wellbeing of its
employees. The Company will adopt a Fitness for Work procedure which
includes effective strategies for the identification and management of fatigue,
fitness for work, drugs and alcohol. The parties will consult regarding the
Fitness for Work procedure during the project.
[8] From the information provided to the Panel, it appears that, despite the
existence of this provision in the Thiess Agreement, Thiess, without consultation
and/or agreement with the CFMEU, has formulated a Fitness for Work procedure and
has unilaterally sought to apply that procedure on the Tulla Sydney Alliance Project,
not only in respect to its own employees but also in respect to the employees of the
employers parties to this dispute. In respect to the latter group of employees, it has
done so, apparently, through its commercial agreements with the employers of those
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employees, agreements to which neither the CFMEU nor the affected employees are
parties.
[9] As a result, the employees of those employers parties to the dispute are being
subjected to random testing in respect to drugs and alcohol. Random testing is not
provided for in the Drugs and Alcohol Policy. Bearing in mind the history of the
Drugs and Alcohol Policy, the basis upon which it was formulated, namely co-
operation, communication, commitment and trust, and its continued endorsement over
many years by the industry by its inclusion as a feature of numerous enterprise
agreements, the Panel is of the view that the employees of the employers party to this
dispute should not be subjected to involuntary random testing.
[10] The Panel has reached this view notwithstanding the declaration made by an
employee on the Project Induction Request Form which states:
I will undertake and follow all OHS guidelines detailed in the Safety Handbook
and any other OHS requirements as may be issued by the Tulla Sydney
Alliance from time to time during the course of the Project.
[11] In the Panel’s view, the making of such a declaration does not override the
contents of the enterprise agreement that applies to the employment of the employees
of the employers parties to this dispute.
[12] The CFMEU seeks a recommendation from the Panel that any random testing
on the Project of employees of the employers party to this dispute cease. In the
circumstances of this matter, the Panel is prepared to make such a recommendation
and it does so.”4 (sic)
[19] Consistent with the Wagstaff Agreement dispute settlement process, Wagstaff
requested FWA to review the Panel's recommendation.
[20] There is no dispute that the issue put to the Commissioner for determination was:
“Does the Wagstaff Agreement, in particular clause 48 when read with Appendix I
prevent Wagstaff from requiring (directly or indirectly via Thiess) a Wagstaff
employee on the Project to submit to a drug and alcohol test if randomly selected for
the test as part of the announced drug and alcohol testing procedures in the FFW
Policy?”
[21] The Commissioner concluded:
“[7] Given that clause 48 appendix 1 is silent, it cannot be interpreted that you can
apply a drug and alcohol testing regime. It is the Tribunal’s view that you cannot read
an entitlement into an agreement that, in the Tribunal’s view, is clearly not there. The
Applicant is not entitled to do more than what clause 48 appendix 1 allows them to do.
[8] Therefore, the Applicant, in the Tribunal’s view, and I determine accordingly,
cannot impose a regime of drug and alcohol testing either on a voluntary or
involuntary basis.”
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[22] The appellants argued that the Commissioner erred by proceeding on the premise that,
as the Wagstaff agreement did not expressly or implicitly entitle Wagstaff to conduct drug
and alcohol testing, it could not do it. Wagstaff argues that neither the agreement itself, nor
the Policy could be regarded as prohibiting compulsory drug and alcohol testing. Wagstaff
contended that compulsory drug and alcohol testing represents a lawful and reasonable
instruction and reflects the occupational health safety and welfare obligations imposed upon
both it and Thiess to take appropriate steps to protect employees from safety risks.
[23] Further, Wagstaff argued that as a result of the focus on this different issue of whether
the agreement, including the Appendix I entitled Wagstaff to conduct drug and alcohol
testing, the Commissioner did not address the matter in dispute and hence failed to exercise
the jurisdiction to settle the dispute.
[24] Wagstaff assert that there is a public interest in ensuring that FWA decisions are not
affected by errors of this nature and that the decision has significant implications for
Wagstaff, the Project and other employees covered by similar agreement provisions.
[25] The CFMEU position was that the Commissioner's conclusion was a logical
consequence of clause 50 of the Wagstaff Agreement which states:
“50. NO EXTRA CLAIMS
This Agreement is intended to deal comprehensively with all the matters which pertain
to the employment relationship between the Company and its employees. The parties
acknowledge and agree that the Agreement is in full and final settlement of all matters,
claims and demands however described whether or not any matter, claim or demand is
specifically addressed within the Agreement.
The parties must not, during the term of this Agreement, pursue any further claims
about any matter which pertains to the employment relationship. The parties further
undertake to not, during the life of this Agreement, initiate any campaigns of direct
industrial action intended to secure new and improved rates and conditions during the
term of this agreement or at the end of this Agreement.”
[26] The CFMEU says that the agreement makes clear that the intention of the parties was
that "The words of the policy by necessary implication preclude compulsory drug and alcohol
testing in that compulsory drug and alcohol testing is inimical to the bases underpinning the
policy."5
[27] In this respect the CFMEU asserts that the policy is founded on consultation and
cooperation which concepts are inconsistent with mandatory drug and alcohol testing.
[28] The CFMEU argued that the relevant occupational health and safety legislation did not
oblige either Wagstaff or Thiess to implement mandatory drug and alcohol testing and that
links between such testing and safety had not been conclusively established.
Findings
[29] We are satisfied that the matter is of significant importance to both Wagstaff and
Thiess and that it raises an issue of the construction of the Wagstaff agreement which has the
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potential for broader implications such that there is public interest in granting permission to
appeal.
[30] The matter initially referred to FWA simply went to the Wagstaff question of whether
the agreement, and in particular, clause 48 when read with Appendix I, prevented Wagstaff
from requiring an employee on the project to submit to a drug and alcohol test.
[31] The Commissioner concluded that clause 48 and Appendix I were silent on this issue.
We think that conclusion was correct. However, we do not agree that such a finding then
permits a conclusion that, absent an entitlement in the agreement to conduct compulsory drug
and alcohol testing, such testing is not permissible. In effect, the Commissioner's conclusions
were directed at a consideration of whether the agreement specifically enabled Wagstaff to
conduct mandatory drug and alcohol testing, but that was not the issue before him.
[32] In this respect the Commissioner's conclusion represents a mischaracterisation of the
matter in dispute. In our view the decision represents a misapplication of the dispute
settlement jurisdiction and an error at law in terms of the construction of the Wagstaff
agreement.
[33] The CFMEU position that there was a necessary implication in the Wagstaff
agreement such that it must be read as prohibiting mandatory drug and alcohol testing must
fail on any objective analysis of the agreement.
[34] We do not consider clause 48 operates to limit drug and alcohol testing, or for that
matter, other safety initiatives. Appendix I and the Policy clearly endorse a cooperative and
collective approach to the management of drug and alcohol issues but cannot be read as
prohibiting mandatory drug and alcohol testing. Indeed testing of this nature was not as
common an issue at the time of the inception of the Policy in 1993 as it is now. Other
provisions of the Wagstaff agreement recognise the need for continuous change and
improvement and the obligations on Wagstaff to advance workplace safety. The risks to
employee safety posed by drug and alcohol use have long been recognised by this Tribunal6
and compulsory drug and alcohol testing is, of itself, not so extraordinary that it could not be
argued to be a reasonable employer instruction or that it could be regarded as an extra claim
for the purposes of clause 50 of the Wagstaff agreement.
[35] We therefore uphold the appeal and determine that the Commissioner's conclusion was
without proper foundation. It follows that we disagree with the conclusion and
recommendation of the Panel.
Disposition
[36] We consider it appropriate to determine the specific issue put to the Commissioner of
whether the Wagstaff agreement, and in particular, clause 48 and Appendix I, prevent
Wagstaff from requiring (directly or indirectly via Thiess) a Wagstaff employee on the Project
to submit to a drug and alcohol test if randomly selected for the test as part of the announced
drug and alcohol testing procedures in the FFW policy.
[37] For the reasons we have already detailed, we do not consider that any provisions of the
Wagstaff agreement, including clauses 48, 50 and Appendix I, prevent or prohibit Wagstaff
from requiring an employee to submit to drug and alcohol testing.
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[38] We note that there might well be concerns over the implementation or means of
implementation of such compulsory drug and alcohol testing and we would expect that any
dispute about such matters will be addressed through the Wagstaff agreement dispute
settlement process.
Appearances:
R Dalton of Counsel for Wagstaff Piling Pty Ltd and Thiess Pty Ltd.
E White of Counsel for the Construction, Forestry, Mining and Energy Union.
L Cross for the Master Builders Association of Victoria.
Hearing details:
2011.
Melbourne:
September 21.
Printed by authority of the Commonwealth Government Printer
Price code C, PR515379
1 [2011] FWA 5221
2 AC327904
3 PR509791
4 Appellant’s Appeal Book, Tab 13, pp.250-252
5 Exhibit C1, para.35
6 Sirijovski v Bluescope Steel Ltd [2007] AIRC 680; Darvell v Australian Postal Corporation [2010] FWAFB 4082, CFMEU
v MacMahon Contractors Pty Ltd PR965459 per Giudice J, Lawler VP and Raffaeli C at [19]
OF FAIR WORK AUSTRALI SENIOR DEP TY PRESIDENT HE SEAL OF
