FEDERAL COURT OF AUSTRALIA

Construction, Forestry, Mining and Energy Union v Newlands Coal Pty Ltd [2006] FCAFC 71

INDUSTRIAL RELATIONS – interpretation of certified agreements – whether clauses in certified agreements prevail over Australian workplace agreements made after the certified agreements were entered into – whether the form of declarations at first instance reflected the jurisdiction being exercised

Workplace Relations Act 1996 (Cth), Pt VIB, Pt VID, ss 170LI, 170LJ, 170LL, 170LT, 170LW, 170VF(1), s 170VQ(6)(a), 347, 412 and 413A

Newlands Coal Pty Ltd v Construction, Forestry, Mining & Energy Union [2005] FCA 1512; (2005) 147 IR 304 varied

CONSTRUCTION, FORESTRY, MINING AND ENERGY UNION v NEWLANDS COAL PTY LTD (ACN 010 082 578)

QUD 6 OF 2006

KIEFEL, KENNY AND GYLES JJ

19 MAY 2006

BRISBANE

ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA

THE COURT ORDERS THAT:

1. The appeal be allowed.

2. The declarations made on 7 December 2005 be set aside.

3. In lieu thereof, it be declared:

(1) The expression ‘all other Awards, Certified Agreements and industrial instruments’ in clause 4 of the Newlands Open Cut Coal Mine Certified Agreement 2003 (2003 Agreement):

(a) refers to all such other awards, certified agreements and industrial instruments as were in existence at the commencement of the 2003 Agreement; and

(b) does not refer to Australian Workplace agreements that Newlands Coal Pty Ltd entered into with employees after the commencement of the 2003 Agreement.

(2) The expression ‘all other Awards, Certified Agreements and industrial instruments’ in clause 4 of the Newlands Coal Preparation Plant Certified Agreement 2002 (2002 Agreement):

(a) refers to all such other awards, certified agreements and industrial instruments as were in existence at the commencement of the 2002 Agreement; and

(b) does not refer to Australian Workplace agreements that Newlands Coal Pty Ltd entered into with employees after the commencement of the 2002 Agreement.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

ON APPEAL FROM A SINGLE JUDGE OF THE FEDERAL COURT OF AUSTRALIA

REASONS FOR JUDGMENT

THE COURT

1                     This appeal concerns the interplay between certified agreements and Australian workplace agreements made pursuant to the Workplace Relations Act 1996 (Cth) (the Act) as it stood in 2005. The appeal is against declarations made by Dowsett J on 7 December 2005 pursuant to s 412 and s 413A of the Act (Newlands Coal Pty Ltd v Construction, Forestry, Mining & Energy Union [2005] FCA 1512; (2005) 147 IR 304).

2                     The respondent, Newlands Coal Pty Ltd (Newlands), operates underground and open-cut coal mines and a coal preparation plant. Conditions of employment at the open-cut mine and the coal preparation plant are regulated by two agreements certified pursuant to Pt VIB of the Act, respectively: the Newlands Open Cut Coal Mine Certified Agreement 2003 (the Open Cut Agreement); and the Newlands Coal Preparation Plant Certified Agreement 2002 (the Preparation Plant Agreement). The principal parties to each certified agreement were Newlands and the appellant, Construction, Forestry, Mining and Energy Union (CFMEU).

3                     The Open Cut Agreement was made pursuant to s 170LL of the Act and on 24 December 2002 was certified in accordance with s 170LT of the Act to come into force from 1 February 2003 and remain in force until 31 January 2006, the latter being the nominal expiry date. The Preparation Plant Agreement was made pursuant to s 170LJ of the Act and, on 27 September 2002, was certified in accordance with s 170LT of the Act to come into force from 26 September 2002 and to remain in force until the nominal expiry date of 25 September 2005. Each remained in force at the time of the primary judgment. The agreements are similar, although not identical, and are a detailed set of terms and conditions governing employment.

4                     In April 2005, Newlands commenced offering an Australian Workplace Agreement (AWA) pursuant to Pt VID of the Act to individual employees at both the open cut mine and the coal preparation plant. Some have accepted the offer and entered into such an agreement. A template of an AWA is in evidence. There is no evidence as to the precise terms of the executed agreements with particular individual employees.

5                     The CFMEU objected to the offer of an AWA being made to individual employees covered by the certified agreements. The point arises in this way. Clause 4 of the Open Cut Agreement provides:

‘This Agreement contains all conditions of employment and entitlements of employees employed under its terms and conditions by Newlands Coal Pty Ltd to the exclusion of all other Awards, Certified Agreements and industrial instruments.’

Clause 4 of the Plant Preparation Agreement provides:

‘This Agreement contains all conditions of employment and entitlements of employees employed under its terms and conditions by Newlands Coal Pty Ltd to the exclusion of all other Awards, Agreements and industrial instruments.’

It was contended for the CFMEU that these clauses of the certified agreements prohibited Newlands from offering AWAs as the certified agreements prescribed all conditions of employment and entitlements for the relevant employees to the exclusion of all other terms and conditions arising from the operation of all other awards, agreements and industrial instruments. This applied whether the award, agreement or industrial instrument existed at the time at which the certified agreement was made and certified or if it came into existence thereafter.

6                     Newlands did not agree and the dispute was referred to the Australian Industrial Relations Commission pursuant to s 170LW of the Act. The Commissioner who dealt with the matter accepted the contention of the CFMEU. On that basis, Newlands was not entitled to offer AWAs to employees covered by the Certified Agreements.

7                     The response of Newlands was to bring an application pursuant to s 412 and s 413A of the Act seeking the following declarations:

‘1. On its proper interpretation clause 4 of the Newlands Open Cut Coal Mine Certified agreement 2003 (OC agreement) does not exclude the operation of the Australian Workplace Agreement at Annexure 1 (AWA1) in its entirety, or in part, by reason of s 170VQ6(a) of the WRA [the Act] or otherwise.

2. On its proper interpretation clause 4 of the Newlands Coal Preparation Plant certified agreement 2002 (CPP agreement) does not exclude the operation of AWA1 in its entirety, or in part, by reason of s 170VQ(6)(a) of the WRA or otherwise.

3. Any Australian Workplace Agreement offered or made by the Applicant, in the terms of AWA1, to or with its employees, since 25 April 2005 is not excluded from operation in whole or in part by either the OC agreement, CPP agreement and s 170VQ(6)(a) of the WRA.

4. On its proper interpretation clause 4 of the OC agreement does not prevent the Applicant from making payments or providing other benefits to its employees (including those employees who have entered into an Australian Workplace Agreement in the terms of AWA1 with the Applicant and which have come into operation in accordance with s 170VJ of the WRA) in excess of those entitlements specified in the OC agreement.

5. On its proper interpretation clause 4 of the CPP agreement does not prevent the Applicant from making payments or providing other benefits to its employees (including those employees who have entered into an Australian Workplace Agreement in the terms of AWA1 with the Applicant and which have come into operation in accordance with s 170VJ of the WRA) in excess of those entitlements specified in the CPP agreement.

6. Such further Orders as this Honourable Court sees fit.’

8                     Dowsett J was concerned both as to whether the point in dispute between the parties had sufficient clarity and legal basis to be the subject of a declaration and whether the individual employees who had entered into an AWA should have been joined in the proceedings. His Honour concluded (at [11]):

‘… given that the only dispute is between the applicant and the respondent, the nature of industrial relations in this country and the role of trade unions such as the respondent, there may be utility in resolving the dispute between the present parties without joining individual employees.’

9                     Having referred to various arguments advanced by the parties and to some of the legislative provisions, Dowsett J concluded as follows (at [25]):

‘The right to enter into an AWA conferred by s 170VF is, apparently, unlimited. If the parties to an AWA agree to a provision which is inconsistent with a provision of an extant certified agreement, subs 170VQ(6) operates to resolve the matter. Whether there is such an inconsistency is a matter of construction. Whilst it is theoretically possible that a certified agreement might “cover the field”, such an outcome cannot legitimately be created by giving an unreasonably broad meaning to cl 4, particularly when it is seen in its legislative context. In my view, the wording of cl 4 is not apposite to produce the result for which the respondent contends. The natural meaning of the words is that the agreement contains all current terms and conditions to the exclusion of others previously prescribed or agreed.’

10                  Declarations were made as follows:

‘1. As to the Newlands Open-Cut Coal Mine Certified Agreement 2003:

(a) that any Australian Workplace Agreement, previously entered into in accordance with the Workplace Relations Act 1996 (Cth) and approved by the Employment Advocate pursuant thereto, between the applicant and any employee or potential employee whose employment is, or will be, subject to the said certified agreement, takes effect subject to par 170VQ(6)(a) of that Act; and

(b) that the applicant may pay to any such employee by way of remuneration for his or her employment, an amount payable pursuant to the Australian Workplace Agreement between the applicant and said employee, notwithstanding that the amount may be greater than that payable pursuant to the said certified agreement; and

2. As to the Newlands Coal Preparation Plant Certified Agreement 2002;

(a) that any Australian Workplace Agreement previously entered into in accordance with the Workplace Relations Act 1996 (Cth) and approved by the Employment Advocate pursuant thereto, between the applicant and any employee or potential employee whose employment is, or will be, subject to the said certified agreement, takes effect as follows:

(i) in the case of Australian Workplace Agreements coming into operation prior to the nominal expiry date of the said certified agreement, subject to the provisions of par 170 VQ(6)(a) of the said Act; and

(ii) in all other cases, in accordance with par 170VQ(6)(c) of the said Act; and

(b) that the applicant may pay to any such employee, by way of remuneration for his or her employment, an amount payable pursuant to the Australian Workplace Agreement between the applicant and said employee, notwithstanding that the amount may be greater than that payable pursuant to the said certified agreement.’

11                  It is not necessary to deal with challenges to various strands of the reasons of the primary judge which were collateral to the ultimate basis for decision. On the main issue, counsel for the CFMEU submitted that the construction of each of the relevant clauses favoured by Dowsett J did not accord with the ordinary meaning of the language, particularly when taken in its context, both in the agreement and in the general setting of the Act. It was then argued that, if his Honour was wrong in limiting the effect of the clause to the situation at the time that the relevant agreement was entered into, and s 170VQ(6)(a) was applied, the effect of cl 4 in each certified agreement would be that the certified agreement would prevail over any subsequent AWA as any such AWA would be a ‘legislative instrument’ within the meaning of the clause. It would follow, so it was put, that there was no need to conduct any more detailed inquiry as to inconsistency. Section 170VQ(6) was as follows:

‘(6) The relationship between an AWA and a certified agreement is as follows:

(a) a certified agreement prevails over the AWA to the extent of any inconsistency if:

(i) the certified agreement is in operation at the time the AWA comes into operation; and

(ii) the nominal expiry date of the certified agreement is after the date on which the AWA comes into operation; and

(iii) the certified agreement does not expressly allow a subsequent AWA to operate to the exclusion of the certified agreement or to prevail over the certified agreement to the extent of any inconsistency;

(b) a certified agreement that comes into operation after the nominal expiry date of the AWA prevails over the AWA to the extent of any inconsistency;

(c) in all other cases, the AWA operates to the exclusion of any certified agreement that would otherwise apply to the employee's employment.’

12                  In our opinion, Dowsett J was correct in construing cl 4 in each certified agreement as speaking as at the commencement of the relevant agreement. The words of each clause are capable of bearing that meaning. It is a construction which gives the clause significant work to do. It is not in conflict with other provisions of the Agreement, including cll 2, 3, 5 and 8 referred to by counsel for the CFMEU in the case of the Open Cut Agreement and corresponding clauses in the Preparation Plant Agreement. Most significantly, however, an ambulatory construction of each clause would create an apparent conflict with the provisions of s 170VF which were as follows:

‘(1) An employer and employee may make a written agreement, called an Australian workplace agreement, that deals with matters pertaining to the relationship between an employer and employee.

(2) The AWA may be made before commencement of the employment.’

13                  As his Honour had said (at [19]):

‘Implicit in the respondent’s submission is the proposition that a certified agreement may exclude the statutory right to enter into AWAs by using a device such as cl 4. In principle it may be possible for a person to bargain away his or her statutory rights, at least in the absence of a statutory prohibition. However one would not readily construe the unqualified language of s 170VF as permitting such a course. This is particularly so given the presence in the Act of subs 170VQ(6). That subsection contemplates an AWA being partially inoperative because of inconsistency with a certified agreement. This suggests that it will continue to operate in areas where there is no such conflict. It is unlikely that such areas are to be limited to those in which the AWA is in identical terms to the certified agreement. Such an arrangement would be pointless. Clearly, Parliament contemplated AWAs dealing with issues not dealt with in a relevant certified agreement.’

We find that reasoning compelling. Indeed, if construed as contended for by the CFMEU, there would be a real question as to whether cl 4 in each certified agreement would be ‘about matters pertaining to the relationship between an employer and employees’ as required by s 170LI of the Act.

14                  It follows that Newlands was not prohibited from offering AWAs to employees covered by the certified agreements. A question would remain as to whether AWAs along the lines of the template in evidence would be wholly inconsistent with the certified agreements (cf Ferdinands v Commissioner for Public Employment (2006) 224 ALR 238). Notwithstanding two of the grounds of appeal, that argument was not put below or on appeal and the evidence would not enable it to be answered. In any event, it is at least doubtful whether such an issue would fall within the description of interpretation of a certified agreement within the meaning of s 413A of the Act.

15                  We are concerned about the form of declarations which were made. The jurisdiction being exercised is limited to giving an interpretation of a certified agreement. It does not appear to us that the declarations made answer that description unless they are given a rather tortured construction. In our opinion, the resolution of the issues which would arise if there were an alleged conflict between particular AWAs and one or other of the certified agreements, is best left to be decided in a substantive proceeding. We are conscious of the fact that the parties were given the opportunity of making submissions about the form of the declarations that were made. However, in our opinion, they do not reflect the controversy that was settled at first instance and should not stand.

16                  Although the appellant CFMEU has not succeeded on the substance of the matter, the appeal should be allowed, the declarations made should be set aside and, in lieu thereof, it be declared:

(1) The expression ‘all other Awards, Certified Agreements and industrial instruments’ in clause 4 of the Newlands Open Cut Coal Mine Certified Agreement 2003 (2003 Agreement):

(a) refers to all such other awards, certified agreements and industrial instruments as were in existence at the commencement of the 2003 Agreement; and

(b) does not refer to Australian Workplace agreements that Newlands Coal Pty Ltd entered into with employees after the commencement of the 2003 Agreement.

(2) The expression ‘all other Awards, Certified Agreements and industrial instruments’ in clause 4 of the Newlands Coal Preparation Plant Certified agreement 2002 (2002 Agreement):

(a) refers to all such other awards, certified agreements and industrial instruments as were in existence at the commencement of the 2002 Agreement; and

(b) does not refer to Australian Workplace agreements that Newlands Coal Pty Ltd entered into with employees after the commencement of the 2002 Agreement.

17                  Those declarations, which will be effective from the date of the original declarations, are sufficient to settle the dispute which was live between the parties as to the interpretation of the certified agreements without trespassing upon other issues.

18                  There will be no order for costs in view of s 347 of the Act. We do not view the appeal as having been instituted vexatiously or without reasonable cause.

Associate:

Dated: 19 May 2006