Fair Work Act 2009
s.604—Appeal of decision

Appeal against decision [2015] FWC 383 of Deputy President Bartel at Adelaide on 23 January 2015 in matter number C2014/6393 - determination pursuant to dispute resolution provision - whether proposed roster introducing new shift arrangements would be a breach of the enterprise agreement or unfair to the employees - no extra claims provision - issues of fairness and safety - permission to appeal granted - appeal dismissed.

[1] This is an application for permission to appeal and, if granted, an appeal against a decision of Deputy President Bartel determining an application by the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU) pursuant to s.739 of the Fair Work Act 2009 (the Act).

[2] The issues of concern raised by the CEPU in its application to the Commission concerned a proposal by Utilities Management Pty Ltd trading as SA Power Networks (SAPN) to implement a roster including night shifts for its central business district operations. The implementation of the roster was opposed by the CEPU on the grounds that the proposed roster would breach the enterprise agreement which covers the relevant employees and/or the manner of the implementation of the roster was unfair. 1

[3] The dispute was brought to the Commission pursuant to clause 11 of Attachment 2 to the Utilities Management Pty Ltd Enterprise Agreement 2014 (the Agreement). Both the CEPU and SAPN agreed that the issues raised in relation to the proposed roster should be determined by the Commission. The Deputy President was satisfied that the Commission could exercise its arbitral powers to settle the dispute in accordance with s.739(4) of the Act. 2

The decision appealed against

[4] The introduction of the proposed roster affects some 26 employees who perform work in the CBD workgroups in Adelaide. Their work includes planned and unplanned maintenance and capital works on Adelaide CBD’s electricity infrastructure. 3 The Deputy President referred to the changes for employees as a result of the new roster as follows:

“[8] The proposed roster introduces three changes to the current roster arrangements. Affected employees will work on a Sunday (day) followed by three consecutive night shifts in one week of a 4 week roster cycle. The current ordinary hours are worked in the remaining 3 weeks of the cycle. An availability roster will continue to operate for those employees currently on the roster, although the frequency will be one week in 4 for some employees and 1 week in 8 for other employees. The period an employee is rostered for availability will overlap with the period of Sunday work and the three night shifts. SAPN intends to commence the new rosters on 11 April 2015.
...
[46] I accept SAPN’s submission that the introduction of the proposed roster has the effect of converting the affected employees from day work, performed in accordance with clause 5, to non-continuous shift work performed in accordance with clause 9 of the Agreement. That is, I accept that working three consecutive night shifts in a 4 week roster satisfies the definition of non-continuous shift work, which in turn allows ordinary hours to be worked on Sundays.” 4

[5] In the proceedings before the Deputy President, the CEPU submitted that the introduction of the night shift would be a breach of the Agreement or, if the Commission was not persuaded about such breach, that the introduction of the new roster and the manner of its introduction would be unfair to employees. It was put that the issues of concern to employees warranted the intervention of the Commission to determine a fair and equitable outcome.

[6] SAPN submitted that there were sound operational reasons for introducing the new roster and that this was permitted under clause 9.1 of the Agreement or by provisions in the contracts of employment of the relevant employees which specifically refer to the potential requirement for shift work. It was contended by SAPN that the dispute should be determined on the basis of the terms of the Agreement and not according to notions of fairness. If there was no breach of the Agreement or health and safety concerns, then it was submitted that SAPN should be allowed to proceed with the proposed roster.

[7] The Deputy President considered the evidence and submissions presented by the parties and the relevant terms of the Agreement, including those concerning the purpose and principal objectives of the Agreement (clause 7), consultation (clause 3 of Attachment 2), ordinary hours of work (clause 5 of Attachment 2), standing by (clause 6.5 of Attachment 2) and shift work (clause 9 of Attachment 2). The Deputy President concluded that:

● the introduction of the proposed roster was not prohibited by the Agreement and was not required to be implemented by agreement with employees; 5

the introduction of the proposed roster does not constitute a breach of the “no extra claims” provision in the Agreement; 6

● it is a term of their contracts of employment that relevant employees may be required to perform shift work; 7

the issues of concern to the CEPU, namely the adverse impacts on employees resulting from the proposed change, should form the basis of discussions between the parties in accordance with the consultation clause in the Agreement; 8

it was not open to the Commission to prevent SAPN from exercising its rights under the contracts of employment where the Agreement and statutory requirements have been complied with; 9

there is a obligation on the employer to give proper consideration to the issues of concern with a view to minimising any adverse effects on employees; 10 and

the implementation of the proposed roster should be delayed to allow further discussion between the parties on a range of matters 11 and to ensure appropriate health and safety mechanisms are put in place.12

[8] The Deputy President concluded as follows:

“[85] I have determined that the Agreement is silent on the conversion of day workers to shift workers and that applying the principles of construction to the Agreement, there is no common intention to be discerned that such conversion is prohibited unless agreed by the employees. The term of the contract of employment of the affected employees which enables the employer to require that shift work be undertaken does not reduce or modify any existing entitlement under the Agreement, and SAPN is entitled to rely upon it.

[86] The introduction of the change is to be dealt with in accordance with the consultation clause of the Agreement, also taking into account the principal objectives of the Agreement. There is an obligation on the employer to minimise the adverse consequences upon the employees and this requires an active consideration of the issues of concern. The nature of the discussions held to date and further developments as advised in the course of the evidence suggest that further discussions should take place between the parties in advance of the implementation date.”

The appeal

[9] In the appeal, the CEPU submitted that the Deputy President erred in her construction of the Agreement and that this error affected the findings made on the proper application of the “no extra claims” provision and the interaction between the contracts of employment and the provisions of the Agreement. It was said that the interpretation of the Agreement was not a matter for discretion and that the correct interpretation should be determined by the Full Bench. 13 It was also submitted that the Deputy President erred in her consideration of the question of fairness and in permitting the implementation of the proposed rosters in circumstances where all appropriate steps had not been taken to minimise risks to safety and health.

[10] We turn to consider the various grounds relied upon by the CEPU in the appeal.

(a) Breach of the Agreement?

[11] It was submitted by the CEPU that the employees in question are employed or engaged as “day workers” under the Agreement and that the Agreement mandates the ordinary hours of work for these workers. In the absence of provision in the Agreement for conversion from day workers to shift workers, the obligation and entitlement in respect of the ordinary hours for day workers under the Agreement is not altered. The contracts of employment should be read down to be consistent with the Agreement.

[12] The Deputy President considered the relevant clauses of the Agreement and concluded that the Agreement did not preclude the conversion of the relevant employees from day work to shift work. In particular it was found that the Agreement is silent on the issue of conversion of day workers to shift workers and does not require such conversion to be agreed by the employees. 14

[13] We agree with the Deputy President’s conclusions in regard to the construction of the Agreement. Although the Agreement uses the terms “day worker” and “shift worker”, these are not employment categories into which employees are engaged and then fixed. The employment categories specified in the Agreement are full time, part time, casual, defined term or apprenticeship 15 and workers in these categories may be assigned to day work and/or shift work. The Agreement provides for the entitlements of workers according to the hours and shifts worked. The description of workers as day workers or shift workers is done for the purpose of determining the terms and conditions of employment for those workers, such as ordinary hours, overtime and shift penalties. For example, in relation to working hours, the Agreement provides that a full time worker works the ordinary hours prescribed for day workers or shift workers.16

[14] We therefore conclude that the relevant employees were not employed or engaged by SAPN under the Agreement as “day workers”. Accordingly the submissions of the CEPU based upon this premise must fail.

[15] The CEPU also submitted that the introduction of the night shift roster for employees in the CBD workgroup was prohibited because it would contravene the “no extra claims” clause of the Agreement. It was said that the unilateral imposition by an employer of changes to the employment characterisation of an employee constitutes the making of an extra claim. 17

[16] Clause 10 of the Agreement provides as follows:

“The parties bound by this Agreement undertake that, until the nominal expiry date set out in Clause 4, they will not make any extra claims relating to terms or conditions of employment (whether dealt with in this Agreement or not) in respect of the employees covered by this Agreement.”

[17] The Deputy President decided that the introduction of the proposed roster does not impact on the rights and entitlements of the relevant employees under the Agreement. 18 This was because the proposed roster involves the application of the terms and conditions of employment under the Agreement to the term of their contracts of employment which stipulates that they may be required to perform shift work.

[18] We consider that the Deputy President was correct in deciding that the introduction of the proposed roster did not constitute a breach of the “no extra claims” clause in the Agreement. In this regard we note that clause 10 prohibits the making of “extra claims relating to terms or conditions of employment”. As the Deputy President found, the proposed roster would involve the application of the terms and conditions of employment provided under the Agreement to the rosters which the employees might be assigned to work under their contracts of employment. The introduction of the proposed roster could not therefore be properly characterised as being an “extra claim” which would materially change the terms and conditions of employment as set out in the Agreement. 19

[19] Further we consider that the Agreement does not prevent the employees being required to work according to the proposed roster. The Agreement operates in conjunction with the contracts of employment of the relevant employees. It provides for the respective rights and obligations of the employer and employees covered by it. It does not displace the individual contracts of employment which brought the employment relationship into existence. The evidence before the Deputy President was to the effect that each of the affected employees was a party to a contract of employment with SAPN in substantially similar terms and that these contracts provided that the employees “may be required to participate in an availability roster and/or shift roster”. These provisions allow SAPN to determine the hours and shifts to be worked by the relevant employees. The Agreement deals with the pattern of shift work and the length of roster cycles 20 and provides for the payment of appropriate shift allowances and penalties for such work.21

[20] The Agreement does not otherwise prohibit or prevent the introduction of the proposed roster. The contractual right of SAPN to provide shift rosters for the relevant workers is not inconsistent with the terms of the Agreement or the conditions of employment provided in the Agreement. The introduction of the proposed roster would therefore, as found by the Deputy President, not be in breach of the Agreement.

(b) The fairness issues

[21] The CEPU submitted that the Deputy President did not, consistent with the issue resolution clause of the Agreement, give proper consideration to questions of fairness in respect of the manner of introduction or the fact of introduction of the proposed shift roster. In particular it was submitted that the Deputy President erred in failing to give proper effect or sufficient weight to the issue resolution clause in considering whether the implementation of the proposed roster could be disallowed on the grounds of fairness. In this regard, particular reference was made to the following paragraph of the decision:

“[74] It is not open to the Commission to prevent SAPN from exercising its rights under the contract of employment in circumstances where the Agreement and statutory requirements have been complied with. The consultation provision of the Agreement, read in conjunction with the purpose and principal objectives of the Agreement provide the mechanism for the implementation of the proposed roster. The issues of concern identified by the CEPU witnesses are to be dealt with in that context”

[22] The dispute resolution provisions of the Agreement are as follows. Clause 11 of the Agreement deals with dispute and issue resolution and provides:

“The parties agree to follow the issue resolution process outlined in Clause 11 of Attachment 2 of this Agreement as a means of resolving disputes arising out of this Agreement.”

[23] Clause 11 of Attachment 2 to the Agreement deals with issue resolution and provides a four step process involving a series of discussions to be held at various levels within SAPN in an endeavour to resolve issues of concern, with the final step being the reference of matters to the Commission for conciliation and/or arbitration. As set out in the clause, the issue resolution process applies to:

“All issues of concern to management and employees (including all disputes arising under this agreement or under the National Employment Standards) will be dealt with in accordance with the following procedure with a view to issues being resolved promptly at the workplace level.”

[24] We agree with the submission of the CEPU that the issue resolution clause has a wider operation than merely dealing with matters arising out of the Agreement. It is also clear that the resolution of issues of concern might involve the consideration of a range of matters.

[25] In the decision, the Deputy President noted the statutory limitations on the Commission’s powers in making decisions in matters under s.739 of the Act 22 and the obligation on the Commission under the Agreement in dealing with issues of concern referred under the dispute resolution provisions “to consider all relevant circumstances including the substantive and procedural terms of the Agreement”.23

[26] On our reading of the decision, the Deputy President determined the matters referred to her by the parties under the dispute resolution provisions and in doing so had regard to the relevant considerations. The decision, including what is said in paragraph 74, has to be considered with regard to the matters that the Deputy President was asked to determine. While industrial disputes can vary in their scope before they come to the Commission and indeed while they are before the Commission, ultimately the dispute that the Deputy President had to determine is described in paragraph 1 of her decision as follows: “The grounds of the opposition to the proposed roster are that it would breach the Agreement and/or the manner of its implementation is unfair.” Neither party before us suggested that the Deputy President had erred in characterising the dispute in this way.

[27] The first matter for decision by the Deputy President was whether the introduction of the proposed roster would involve a breach of the Agreement. The Deputy President found that it would not.

[28] The determination of this part of the dispute primarily involved a consideration of the contractual rights and obligations of the parties and the relevant provisions of the Agreement. Much emphasis was placed in the CEPU’s submissions upon the first sentence in paragraph 74 of the decision as indicating that the Deputy President did not have regard to fairness considerations in determining the matters before her. However that sentence, read in the context of the decision as a whole, does no more than state the Deputy President’s finding with respect to the first part of the dispute, namely that the introduction of the shift roster would be consistent with the contracts of employment and not in breach of the Agreement. On that basis the Deputy President took the view that it was not open to her to prevent SAPN from introducing the proposed roster.

[29] Although it is not necessary to go further in this regard, we consider that it is implicit in the decision of the Deputy President that “fairness” considerations did not warrant a different determination regarding the introduction of the proposed roster having regard to the other matters referred to. It is not unfair to require employees to work shift rosters where their contracts of employment specifically provide for this possibility. However given that the proposed roster is significantly different from the current work arrangements and would have significant impacts upon the incomes and lifestyles of some workers, fairness would require that consideration be given to possible ways of minimising adverse impacts for those concerned.

[30] The second matter which was referred by the parties to the Commission for determination was whether the manner of the implementation of the proposed roster was unfair. In considering this part of the dispute, the Deputy President had regard to the various issues raised by the CEPU. The Deputy President did so under the headings of Occupational Health and Safety, Family Responsibilities and Financial Implications. The Deputy President found that the consultation between the parties was not as thorough as it could have been; that a failure to implement the draft directive and associated training in advance of implementation of the roster would not be appropriate on health and safety grounds; that requests for flexible working arrangements should be used to deal with concerns about family responsibilities; and ‘that it was appropriate that further discussion between the parties occur to deal with the financial implications for individual employees arising from the implementation of the new rosters.

[31] The Deputy President concluded that the introduction of the proposed roster should be dealt with in accordance with the consultation clause of the Agreement and having regard to the obligations on SAPN to minimise the adverse consequences upon the employees and to give active consideration to the issues of concern. 24

[32] We consider that the CEPU’s submissions involve an unduly narrow reading of the Deputy President’s decision. Reading the decision as a whole, and having regard to the specific matters referred by the parties to the Commission for determination, we consider that the Deputy President took into account the relevant considerations in reaching her conclusions on those matters.

(c) Safety concerns

[33] It was submitted by the CEPU that the Deputy President, having accepted the expert evidence that the proposed roster should not be implemented until appropriate tools and mechanisms to minimise risks to health and safety were put in place, erred in not making orders to that effect.

[34] In the decision, the Deputy President decided that the introduction of the proposed roster should be dealt with in accordance with the consultation clause of the Agreement and that the issues of concern identified by the CEPU witnesses should be dealt with in that context. 25 The Deputy President said that the delayed implementation of the roster changes provided an opportunity for further discussions between the parties and that the observations she made, regarding matters such as health and safety issues, should assist the parties in the further process of consultation.26 In this regard, the Deputy President noted that the expert evidence was to the effect that the proposed roster should not be implemented until the draft SAPN Fatigue Management Field Directive was finalised and a worker education and training program put in place.

[35] We consider that the approach adopted by the Deputy President was open to herand appropriate in the circumstances of the matter. The parties were to endeavour through the process of consultation, and with the assistance of the discussion and observations made in the decision, to address the outstanding issues of concern relating to the implementation of the changes. As the Deputy President noted, it would be open to the CEPU to notify a dispute to the Commission should it consider that the provisions of the consultation clause were not met. 27

Conclusion

[36] Having considered the submissions of the parties in the appeal, we do not consider that it has been demonstrated that there is any error in the approach adopted by the Deputy President in the determination of the matters which had been referred to the Commission under the issue resolution provisions of the Agreement.

[37] The Deputy President made a thorough and detailed examination of the issues raised by the parties and reached conclusions on the matters which were fair and reasonable in the circumstances. This took into account the rights and obligations of the parties under the Agreement and the contracts of employment as well as health and safety concerns and the adverse impacts that the introduction of the proposed roster would have on some of the employees concerned. We consider that, having regard to the evidence and material before the Deputy President, the conclusions reached on the matters were both reasonably open to her and correct.

[38] We recognise that the implementation of the proposed roster will have significant effects on the employees concerned and the importance to those employees of the issues raised in the appeal. We also recognise the importance placed upon the proper interpretation and application of the issue resolution process under the Agreement and the contractual rights of the parties. In these circumstances, we have decided to grant permission to appeal. However, for all the reasons given, we have decided to dismiss the appeal.

SENIOR DEPUTY PRESIDENT

Appearances:

E. White of counsel for the CEPU.

F. Parry QC with M. Follett of counsel for Utilities Management Pty Ltd T/A SA Power Networks.

Hearing details:

2015.

Melbourne:

April 16.

 1   [2015] FWC 383 at [1].

 2   The dispute was the subject of conciliation before Commissioner Lewin on 27 October 2014.

 3   [2015] FWC 383 at [4].

 4   Ibid at [4] and [46].

 5   Ibid at [58] and [65].

 6   Ibid at [65].

 7   Ibid.

 8   Ibid at [67].

 9   Ibid at [74].

 10   Ibid at [75].

 11   Ibid at [76], [81] and [84].

 12   Ibid at [78].

 13   Pawel v AIRC [1996] FCA 1660; 97 IR 392; (1999) 94 FCR 231 at 238-239.

 14   [2015] FWC 383 at [54], [58] and [85].

 15   See cl.2 of Attachment 2 to the Agreement.

 16   See cl.2.3.1 of Attachment 2 to the Agreement.

 17   See DL Employment Pty Ltd v “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU) [2014] FWCFB 7946.

 18   [2015] FWC 383 at [65].

 19   See Toyota Motor Corporation Australia Ltd v Marmara [2014] FCAFC 84 at [37], [55]-[56]; (2014) 222 FCR 152 at 166, 170.

 20   See cl.9.2 of Attachment 2 to the Agreement.

 21   See cll.9.3, 9.4, 9.5, 9.6 and 9.7 of Attachment 2 to the Agreement.

 22   [2015] FWC 383 at [72]. Section s.739(5) provides that the Commission “must not make a decision that is inconsistent with this Act, or a fair work instrument that applies to the parties.”

 23   Ibid at [73].

 24   Ibid at [86].

 25   Ibid at [75] and [86].

 26   Ibid at [76].

 27   Ibid at [75].

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