Federal Court of Australia
Hempel (Wattyl) Australia Pty Ltd v United Workers Union [2024] FCAFC 98
ORDERS
HEMPEL (WATTYL) AUSTRALIA PTY LTD Appellant | ||
AND: | Respondent | |
DATE OF ORDER: |
THE COURT ORDERS THAT:
1. The appeal be allowed.
2. The judgment of the South Australian Employment Court in matter ET-22-04296 be set aside and, in lieu thereof, it be ordered that the application in each of that matter and another in that court, matter ET-22-04298, be dismissed.
Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.
[9] | |
[19] | |
[21] | |
[25] | |
[35] | |
[37] | |
[50] | |
[56] | |
[58] | |
The appropriate approach to construction of the classification criteria | [64] |
[76] | |
[81] | |
[83] | |
[90] | |
[91] | |
[95] | |
[117] | |
[118] | |
Pallet paperwork, (order consolidation,) (dispatch paperwork) other documentation | [122] |
[132] | |
[148] | |
[158] |
RANGIAH J:
1 This is an appeal from an order of the South Australian Employment Court declaring that the appellant (the Employer) contravened s 50 of the Fair Work Act 2009 (Cth) (the FW Act) by failing to pay wages and entitlements of six employees in accordance with the requirements of two enterprise agreements.
2 The appeal is brought under s 565 of the FW Act, which provides that an appeal lies from a decision of an “eligible State or Territory Court” exercising jurisdiction under the FW Act to be brought in the Federal Court of Australia. The South Australian Employment Court (the Employment Court) is prescribed as an “eligible State or Territory court” under reg 1.05 of the Fair Work Regulations 2009 (Cth).
3 The Employer manufactures and distributes paint products. The proceeding before the Employment Court was brought by the respondent (the Union) on behalf of six employees who work at the Employer’s distribution facility at Kilburn in South Australia. I will refer to these workers together as “the Employees”.
4 The Employees were initially covered by the Valspar Paint (Australia) Pty Ltd (Kilburn) Warehouse and Distribution Enterprise Agreement 2018 (the 2018 Agreement) from 8 October 2018. The 2018 Agreement was replaced by the Sherwin-Williams National Operations Enterprise Agreement 2020 (the 2020 Agreement) on 5 June 2020. I will refer to these enterprise agreements together as “the Agreements”.
5 The Employer classified and paid the Employees as Grade 3 Level 1 employees under the Agreements. Before the Employment Court, the Union claimed that the Employees’ correct classification was at Grade 3 Level 3, or in the alternative, Grade 3 Level 2.
6 The Union sought orders declaring that the Employer had contravened cll 14, 20 and 25 of the 2018 Agreement and cll 12, 18 and 20 of the 2020 Agreement, and had thereby contravened s 50 of the FW Act. The Union also sought orders for payment of a pecuniary penalty and compensation.
7 On 3 July 2023, a Deputy President of the Employment Court determined that the Employees had been wrongly classified as Grade 3 Level 1 employees and ought to have been classified at Grade 3 Level 3. On 14 November 2023, his Honour made the declaratory order the subject of the appeal.
8 I will describe the relevant facts and the reasons of the primary judge before considering the parties’ submissions.
9 Many of the facts are the subject of agreement under a Statement of Agreed Facts.
10 The Employer operates a manufacturing plant and distribution centre at Kilburn. The Kilburn manufacturing plant produces water-based paint which is distributed in Australia and New Zealand.
11 The Employees are Donnato Tronnolone, Carlo Curtale, David Heffernan, Grant Cutler, Philip Hughes and Tony Aurora. They work in the Employer’s distribution centre as store-workers (store-persons). They do not work in the manufacturing plant.
12 Between 2014 and 2018, the Employees were covered by the Valspar (WPC) Pty Ltd (Kilburn) Warehouse and Distribution Agreement (the 2014 Agreement). Under the 2014 Agreement, the Employees were classified as Grade 3.6 employees.
13 The Employees sought a new enterprise agreement because they wanted to be represented by a different union, one that represented the employees working in the Employer’s manufacturing plant, and had evidently received advice that this required that they be covered under a new enterprise agreement.
14 The 2014 Agreement was replaced by the 2018 Agreement, which has been described as a “temporary site-specific agreement”. The 2018 Agreement was then replaced by the 2020 Agreement. The relevant terms of the 2018 Agreement and the 2020 Agreement are the same.
15 The duties of the Employees have remained the same over the course of their employment with the Employer, regardless of which enterprise agreement applied (with the immaterial exception of one employee who acted in higher duties at times). The Employer classified and paid the Employees as Grade 3 Level 1 employees under the Agreements (again, with the one immaterial exception).
16 The Employees all have forklift licences and are required to operate an electric forklift (reach truck) and a gas forklift in their employment. That entitled them to at least Grade 3 Level 1 classification under the Agreements.
17 The Employees also perform duties that are within the criteria for classification under Grade 2. These tasks generally involve using a piece of equipment called a “low-level order picker” or “electric pallet jack”. The Statement of Agreed Facts contains the following:
[18] The following agreed facts provide a general overview of the work done by the Employees using a low-level order picker. It is not inclusive of all tasks and duties performed by the Employees.
Manual and RF picking and packing
[19] One of the tasks performed by each of the Employees is order picking and packing using a low-level order picker. In brief, to pick and pack an order:
a. the Employees collect a Pre-Built Label which has been prepared, printed and placed in the Pre-Built Label pigeon hole by a Team Leader or other manager, such as the Operations Controller, from the warehouse desk;
b. the Employees use the RF unit to scan the barcode on the Pre-Built Label;
c. once the barcode has been scanned on the Pre-Built Label, the RF unit directs the Employees where to go in the warehouse to collect and scan each item relevant to the Pre-Built Label;
d. when the Employees scan an item relevant to the Pre-Built Label, the RF unit directs the Employees to the next item required in accordance with the Pre-Built Label;
e. as directed by the RF Unit, the Employees collect each item required in accordance with the Pre-Built Label and places each of the relevant items onto a pallet;
f. once the Employees have finished scanning each relevant item on the Pre-Built Label, the Employees confirm the order is complete by inputting “1 pallet” on the RF Unit. The Employees then input the pallet destination that is written on the Pre-Built Label into the RF Unit, for example “Victoria”.
g. when the order is complete, a packing slip listing each of the items which have been scanned is generated by the RF Unit using the data input by the Employees as detailed in 19f above (packing slip);
h. when the Employees have finalised the order on the RF Unit as outlined above, the RF Unit then sends the generated packing slip to the printer in the warehouse;
i. the Employees go and collect that printed packing slip from the warehouse printer and place it on the pallet with the original Pre-Built Label prepared by the Team Leader or other manager.
[20] Once the Employees have picked the items for the order and placed the Pre-Built Label and packing slip next to the pallet, the Employees place the picked pallet on the auto wrapping machine. The Employees are prompted on the RF Unit to choose “yes” or “no” under the prompt “send LPN to auto wrapper”. The Employees choose the option ‘yes’ once the pallet is on the wrapping machine. The auto wrapping machine then wraps the pallet in plastic wrap and applies certain barcode stickers to the pallet wrapping.
[21] If the auto wrapping machine is malfunctioning or out of operation, the Employees will wrap the pallets using a manual wrapping machine and apply the barcode stickers onto the pallet manually.
[22] Once a pallet has been wrapped, the Employees place the wrapped pallet onto a conveyer belt. The conveyer belt takes the pallet outside, where the person operating the gas forklift reads and checks the packing slip for ‘dangerous goods’ and applies the relevant stickers.
[23] Sometimes Employees will not need to pick and pack orders on an empty pallet and the pre-prepared order ticket will tell them to scan and place items onto an existing pallet or a pallet that is specifically being built as a pallet of mixed items. The process of using the RF unit is the same when this is required.
Replenishment
[24] Another task often completed by the Employees is replenishment using a low-level order picker. In order to complete replenishment, the RF unit sends the Applicant Member to certain locations in the warehouse to collect items. Once the items are found and scanned by the Applicant Member, the RF unit tells the Applicant where those items need to be placed in the warehouse bays. The Applicant Member then takes those items to the bay indicated on the RF unit.
Receipt and dispatch of goods
[25] The Employees often operate low level order pickers to-perform receipt and dispatch of goods. This work involves organising the stock that is to be loaded off of, or onto, distribution trucks by the person operating the gas forklift.
Work not undertaken by Employees
[26] Other than when David Heffernan undertook higher duties as set out in paragraph 12 above, the Employees do not undertake the following tasks:
a. printing a manifest which details an overview of each consignment in the relevant geozone group, including the products, weight and whether or not the pallet contains dangerous goods;
b. printing the consignment note for each consignment within the geozone group;
c. printing an Emergency Procedure Guide card for each consignment;
d. printing and completing a multimodal dangerous goods form as required;
e. logging onto the Ports Victoria DG Hub and filling out the details in relation to orders as required (for pallets travelling over waters within Australia);
f. collating the manifest, consignment note, EPG Card, multimodal dangerous goods form or DG Hub information (if required) (together, the documents) and emailing to freight carriers;
g. liaising with freight carriers and separating out from the documents various items based on location (geozone) of consignments;
h. providing the documents to freight carriers;
i. assessing customer returned stock and determining whether stock is good (and can be resold) or bad (ie damaged);
j. determining whether stock returned from other stores has quality issues and is good (and can be resold) or bad (ie damaged);
k. reconciling the stock on a returned pallet by recording into the Oracle ERP System its status as good or bad, and then placing the stock (or causing it the stock to be placed) in either the ‘damages area’ of the warehouse, or back into the general area of the warehouse for resale; and
l. replacing and/or maintaining beams that are damaged in the pick and reserve locations.
18 Following the hearing of the appeal, the parties filed a Statement of Further Agreed Facts. The parties agree that the following work is not undertaken by Grade 2 workers, as it requires the use of a forklift and must therefore be work at the Grade 3 levels:
Full Pallet Picking; and
Gas Forklift/Reach Truck Duties, including replenishment, production line, goods receipt, purchase orders, loading/unloading (including CHEP pallet dockets).
19 The Employees were classified as Grade 3.6 employees under the “2005 classification structure” in cl 14 of the 2014 Agreement. This meant that they performed the first six of the duties described in the classification criteria for Grade 3 employees.
20 Under the 2014 Agreement, the Grade 3 and 4 criteria (under the “2005 classification structure”) were as follows:
Grade 3:
(xi) Gas Forklift
(xii) High Level Order Picker
(xiii) Tinting
(xiv) Outside Lines
(xv) Bulk Wrapping
(xvi) Goods Receipt
(xvii) Self Propelled Scissor Lift
(xviii) Country Packing
Grade 4: Team Leader Assistant (by appointment only)
(xix) Must have achieved all Grade 2 and Grade 3 skills
(xx) Local Deliveries
(xxi) Draft and check all orders to ensure they are complete and correct
(xxii) Complete appropriate dispatch documentation (i.e. Consignment Notes, Dangerous Goods manifests and pallet transfers/exchanges)
(xxiii) Manifest completed orders
(xxiv) Monitor and prioritise release of orders to ensure delivery dates/times are met
(xxv) Consolidate loads for local carriers (north run, south run etc)
(xxvi) Consolidate loads for country carriers
(xxvii) Organise transport for local deliveries and country pickups
(xxviii) Write up bulk loads for interstate warehouse
(xxix) Supervisor errors
(xxx) Export Orders
(xxxi) Receipt of goods from external suppliers
(xxxii) Receipt of goods from other Wattyl warehouses
(xxxiii) Pallet control
(xxxiv) Waste liquid management
(xxxv) Damaged stock control
(xxxvi) Credit returns
(xxxvii) Rework returns
(xxxviii) Act as Team Leader when instructed
21 The 2018 Agreement was a temporary site-specific agreement in the same terms as the then national agreement.
22 Clause 14 of the 2018 Agreement contained the classification structure under which employees were engaged to perform work. Clause 20 provided for the payment of wages and cl 25 provided for the payment of superannuation contributions.
23 Clause 14.1 described the classification structure and the criteria for those classifications as follows:
GRADE 1
• Trainee. Picking, packing, (all order types) Health safety and environment.
• Level 1. Manual and RF picking, packing, (all order types) replenishment, stretch-wrapping, electric pallet truck . cycle counting.
• Level 2. Maintenance electric pallet trucks, hand trucks etc, use of computer, receipt and dispatch of all goods
• Level 3. Machine tinting (All Products) and checking colour against standard. (all product types) Performs all tasks of Grades 1 and 2.
GRADE 3
• Level 1. Forklift Licence(all Material Handling Equipment), including person up order pickers and cranes (to perform all tasks related to this equipment) and forklift maintenance. (loading and unloading of vehicles and relevant paperwork associated)
Involves being able to perform all duties in level 1 and 2 in both warehousing and manufacturing.
• Level 2. Dangerous goods paperwork, pallet paperwork, (order consolidation,) (dispatch paperwork) other documentation. Credit and other returns, (pallet reconciliation)
• Level 3. Export Order Paperwork and coordination. Maintenance of pick and reserve locations. Performs all work of Grades 1, 2, and 3.
GRADE 4
• Level 1. Involves being able to perform all duties in both warehousing and manufacturing of Grades 1, 2, 3 and 4.
• Level 2. Tinting. Acts as team leader as required.
GRADE 5
• Team Leader
Team Leaders will be active participants in the daily supervision of operations processes and employees. Working closely with their supervisor/manager they will form the team that ensures operations processes occur safely, effectively and efficiently. Team Leaders will have regular meetings, with their supervisor/manager to discuss process outcomes, problems and any other issues. Team Leaders will not be expected to issue warnings, nor lead disciplinary processes.
24 The 2018 Agreement was replaced by the 2020 Agreement. Clause 12 of the 2020 Agreement provides for the payment of wages and cl 18 provides for the payment of superannuation contributions. Clause 20 sets out the classification structures which apply to employees covered by the agreement. The Employees are classified as distribution workers under the relevant classification structure found in Appendix J, which adopts the same language and punctuation as cl 14.1 of the 2018 Agreement.
The reasons of the Employment Court
25 The primary judge noted that the Union had submitted that the Employees were wrongly classified at Grade 3 Level 1, when their correct classification was Grade 3 Level 3, or, alternatively, Grade 3 Level 2. The Employer had submitted that the Employees were correctly classified at Grade 3 Level 1.
26 The primary judge noted that the Employer had relied on the history of differently worded earlier instruments dating back to 2005, but considered that the wording of the previous criteria to be significantly different. Further, there was no evidence of any common intention as to their meaning, or what each of the historically described tasks or duties entailed at different times. Accordingly, his Honour considered the history to be irrelevant.
27 The primary judge considered the first issue was whether the Employees’ duties satisfied the criteria of Grade 3 Level 2 and then, if so, whether they also satisfied the sole relevant criterion of Grade 3 Level 3, “Export Order Paperwork and coordination”.
28 The primary judge considered that the punctuation (in particular commas, full stops and brackets) used in the criteria was too unreliable to clarify the meaning of the criteria.
29 The primary judge accepted the Union’s submission that “paperwork” in the Grade 3 criteria is a reference to, “any type of written information about orders, loads or things that have associated responsibilities, duties or tasks to be performed”. His Honour considered this, “includes papers, labels, invoices, forms, notices and self-adhesive notices in the form of stickers”.
30 The primary judge observed that the Grade 5 criteria do not use the term “paperwork”. They instead refer to “documentation”, and place responsibility for processing documentation on a Team Leader. The primary judge inferred that the documentation for which Team Leaders are responsible includes documentation to satisfy local freight carriers, export carriers, export safety regulators, and the Employer’s interstate business units. The Grade 5 role does not identify specific types of paperwork that relate to individual orders, in contrast to the Grade 3 criteria.
31 The primary judge considered that the small pay difference of approximately $20 per week between Levels was said to provide a contextual indicator that overall responsibility for consignment documentation or external documentation is not intended, and that performing additional specific paperwork-related tasks is intended to be recognised at the different Grade 3 Levels.
32 The primary judge noted that Grade 2 employees do not have, “any specified responsibility for any paperwork”, and that “paperwork” first becomes a requirement for a Grade 3 Level 1 worker. His Honour concluded that Grade 3 Level 2 workers have more duties or responsibilities for paperwork than Grade 3 Level 1 workers have: that is, Grade 3 Level 2 requires more than only dealing with paperwork associated with basic loading and unloading of pallets into and out of vehicles.
33 The primary judge noted that the criteria do not indicate that sole responsibility for processing or dealing with any of the identified types of paperwork rests with a Grade 3 worker. His Honour considered the difference between the broader and informal term “paperwork” at Grade 3 and the more formal term “documentation” at Grade 5 accorded with the different purposes of the paperwork, the degree of complexity and associated responsibility varying significantly.
34 The primary judge observed that the Grade 3 criteria mean that workers need to read and respond to the identified types of paperwork. They may need to check the paperwork is correct, or identify which other paperwork is required and then deal with it by, for example, attaching it to a load, as in the case of packing slips and invoices, or identifying which category of dangerous goods notice or sticker may need to be applied to a load. They may need to fill in paperwork such as the internal CHEP pallet reconciliation form after checking what has been returned.
35 The primary judge stated that it was necessary to understand the reference to “paperwork” in Grade 3 Level 1. His Honour found that the paperwork duty associated with basic vehicle loading and unloading with a forklift is to check all labels so that the correct pallets in the staging lane or on the conveyor are loaded into the correct vehicle.
36 For unloading pallets from vehicles, the associated paperwork tasks are described in the Employer’s Standard Operating Procedures (SOPs) for “Internal Receipt”. Such paperwork includes removing the packing slip from the pallet, checking the contents are an exact match, noting any differences, writing the date received, signing the slip and giving it to the Operations Controller.
37 The primary judge turned to consider whether the Employees carried out the duties described in Grade 2 Division 2.
38 The primary judge first considered the task of “Dangerous goods paperwork”, rejecting the Employer’s submission that checking labels for dangerous goods and then selecting the correct category of required notice or notices and fixing them to the loaded order is not within Grade 3 Level 2. His Honour considered that this submission disregarded the fact that this task needs to be carried out by someone, that the task is important, and is carried out by the Employees. His Honour considered that the Employer’s submission placed no value on the performance of this responsible duty, which is not required to be performed at lower classifications.
39 The Employer’s submission that “Dangerous goods paperwork” also requires completion of multimodal dangerous goods documentation and the Emergency Procedure Guide for export consignments was held to unrealistically attribute high-level responsibility for all dangerous goods documents to Grade 3 store-workers. The primary judge concluded that the Employees in fact perform the distinct responsible task of “Dangerous goods paperwork”, and they satisfy this aspect of the Grade 3 Level 2 criteria.
40 The primary judge then considered the “order consolidation” duty in Grade 3 Level 2, referring to the Employer’s submission that the “order consolidation” is not the physical task of consolidating palletised orders of cross-stock with a local order for the same customer or destination and then relabelling it, but the task of consolidating all the paperwork for consignments with multiple orders. The Employer had submitted that physical order consolidation and relabelling are duties of unloading vehicles at Grade 3 Level 1.
41 However, the primary judge considered that, as a matter of plain meaning of the text and context within the classification structure, consolidation and relabelling of orders falls within Grade 3 Level 2. The primary judge considered that the duty is not to consolidate all orders or dispatch paperwork and that the performed duty cannot be disregarded and displaced by a higher administrative function. His Honour found that the Employees do perform the intended duties regarding palletised order consolidation with new labelling.
42 The primary judge next considered “dispatch paperwork”, noting the Union’s submission that this task refers to labels being printed and attached to loaded pallets by the workers after they have completed a full pick. The labels contain dispatch details consisting of the customer’s details and address, the transport carrier and the pallet’s weight. A worker then also places a white sticker on the loaded pallet and writes on it the same details for ease of loading, which the primary judge considered to be more than the Grade 3 Level 1 duty of checking the paperwork for the purpose of correctly loading vehicles. The primary judge found the Employees engage in “dispatch paperwork”.
43 The primary judge accepted that obtaining and placing invoices on completed small orders fits the description of “other documentation” within Grade 3 Level 2.
44 The primary judge next considered, “Credit and other returns, (pallet reconciliation)”, noting the Union’s submission that this duty is fulfilled by the Employees’ role in making a written record of daily reconciliation of the CHEP pallets sent out with orders and later returned. His Honour accepted the Employer’s submissions that “credit returns” refers only to the Grade 5 duty of determining whether returned stock can be resold, and that the task of recording the number of CHEP pallets leaving and returning is paperwork associated with unloading vehicles, a Level 1 duty.
45 The primary judge found that recording the number of CHEP pallets does not involve “credits”, and accepted that the bracketed words “pallet reconciliation” relate to “other returns”. His Honour found that “credits” refer to products returned by customers for a credit. Where there is a credit return of this kind, it is first necessary to determine whether the product is “good” or “bad” for resale purposes. The primary judge accepted the unchallenged evidence that this task is not required to be performed by any Grade 3 worker, as it is performed at the Grade 5 level.
46 However, the primary judge then held that:
The practical removal of this duty from the scope of Grade 3 means it cannot be a valid classification criterion for Level 2 or 3. It is not an intended duty for Grade 3 workers, is impossible to perform at Grade 3 and thus cannot have been intended by the parties as an applicable criterion.
47 In a paragraph that is difficult to understand, the primary judge stated that, “the Union’s submission” (the submission was not identified) is incorrect because it disregards the wording of “pallet reconciliation” being a Level 2 duty and, “focuses only on the credit return duty”. The primary judge then accepted that, “the workers do perform the pallet reconciliation duty meant by this criterion”.
48 The primary judge noted that the Union also submitted that the workers perform another duty regarding “other returns”, namely restoring stock returned from interstate sites of the Employer to its correct location in the warehouse. His Honour considered this to involve more than simply unloading a pallet of goods, which is a Grade 3 Level 1 task.
49 The primary judge found that all the Grade 3 Level 2 criteria had been satisfied by the Employees throughout the claim period.
50 The primary judge next considered whether the Employees satisfied the Grade 3 Level 3 criteria, which required, “Export Order Paperwork and coordination”.
51 The Union submitted that the Employees perform additional responsible duties regarding paperwork for export orders. They scan all the labels on the loaded pallets that make up an export order, then print off additional export labels and place the relevant paperwork with each correct order. They physically check that each export order’s label corresponds with its packing slip, and that the packing slip matches the order’s contents, a different process to local orders.
52 The Union submitted that the Employees also perform a responsible duty of helping to coordinate the loading of export orders to New Zealand into closed shipping containers. When loading these orders, they advise the stock controller of a container’s remaining capacity to take more pallets, having regard to volumes and weights.
53 The Employer submitted that the Grade 3 Level 3 duty is to individually coordinate the loading of a whole export consignment, and to take responsibility for all the Employer’s export documentation for each consignment. That task is in fact performed by a Team Leader on a desktop computer in the dispatch office. The primary judge’s view was that the Employer’s submission was unrealistic, as it both disregarded the duty that was being performed and it attributed a Team Leader office-based responsibility for export consignments to a Grade 3 store-worker based in the warehouse.
54 The primary judge found the criterion for Grade 3 Level 3 to be satisfied by the Employees and concluded they should have been classified at that level throughout the claim period.
55 On 14 November 2023, the primary judge made the following declaration:
Further to the reasons given in United Workers Union v Hempel (Wattyl) Australia Pty Ltd [2022] SAET 53, I make a declaration that the Respondent contravened s50 of the Fair Work Act 2009 (Cth) by failing to pay the Employees wages and entitlements as Grade 3 Level 3 workers in breach of clauses 14, 20 and 25 of the Valspar Paint (Australia) Pty Ltd (Kilburn) Warehouse and Distribution Enterprise Agreement 2018 and clauses 12, 18 and 20 of the Sherwin-Williams National Operations Enterprise Agreement 2020.
56 The sole ground of appeal alleges that the Employment Court erred in fact and in law in concluding that the Employees undertook the duties of Grade 3 Level 3 workers (and, consequently, Grade 3 Level 2 workers), pursuant to the Agreements:
1. The Court erred in fact and in law in concluding that the relevant workers undertook the duties of Grade 3 Level 3 workers (and, consequently, Grade 3 Level 2 workers) pursuant to the Valspar Paint (Australia) Pty Ltd (Kilburn) Warehouse and Distribution Enterprise Agreement 2018 (2018 Agreement) and the Sherwin-Williams National Operations Enterprise Agreement 2020 (2020 Agreement), when it should have found the relevant workers were appropriately classified as Grade 3 Level 1 workers under those instruments. In particular, the Court:
1.1 erred in law when, at [25] of the judgment, it concluded that the history of the parties and prior enterprise agreements were not relevant to construing the meaning of the duties in the Agreements;
1.2 erred in fact and law by concluding, at [33] of the judgment, that ‘paperwork’ had a generic meaning without considering both the industry and practical contexts;
1.3 erred in fact by finding, at [53] and [54] of the judgment, that there had been a “practical removal” of a duty from the scope of Grade 3 Level 3 work, the finding of which has no evidentiary foundation;
1.4 erred in fact by conflating the duties of workers across the different classifications, thereby misconstruing what was meant by the duties at each classification.
57 It may be seen that the ground of appeal begins by alleging that the primary judge reached the wrong conclusion and then goes on to allege four specific errors.
58 The appeal is brought under s 565(1) of the FW Act, which provides that an appeal lies to the Federal Court from a decision of an eligible State or Territory court exercising jurisdiction under that Act. In Ghimire v Karriview Management Pty Ltd (No 2) (2019) 290 IR 331, Colvin J held at [19]–[21] that such an appeal is an appeal by way of rehearing. I respectfully agree.
59 In an appeal by way of rehearing, the powers of the appellate court are only exercisable where the appellant demonstrates that the judgment is the result of error: Allesch v Maunz (2000) 203 CLR 172 at [23].
60 In Lee v Lee (2019) 266 CLR 129, the plurality observed at [55]:
A court of appeal is bound to conduct a “real review” of the evidence given at first instance and of the judge’s reasons for judgment to determine whether the trial judge has erred in fact or law. Appellate restraint with respect to interference with a trial judge’s findings unless they are “glaringly improbable” or “contrary to compelling inferences” is as to factual findings which are likely to have been affected by impressions about the credibility and reliability of witnesses formed by the trial judge as a result of seeing and hearing them give their evidence. It includes findings of secondary facts which are based on a combination of these impressions and other inferences from primary facts. Thereafter, “in general an appellate court is in as good a position as the trial judge to decide on the proper inference to be drawn from facts which are undisputed or which, having been disputed, are established by the findings of the trial judge”.…
(Footnotes omitted.)
61 At first instance, the Employment Court declared that the Employer had contravened s 50 of the FW Act by failing to pay the Employees their wages and entitlements as Grade 3 Level 3 workers in breach of the Agreements.
62 The central question in the appeal is whether the primary judge erred in holding that the Employer had wrongly classified and paid the Employees as Grade 3 Level 1 employees. That question requires consideration of whether their correct classification is in fact Grade 3 Level 3 or, alternatively, Grade 3 Level 2.
63 It will be necessary to undertake a comparison of the duties stipulated under Grade 3 Levels 1, 2 and 3 with the duties actually performed by the Employees. There is little dispute about what duties they actually perform. What is in contest is how the classification criteria should be interpreted and whether the duties performed correspond to the criteria.
The appropriate approach to construction of the classification criteria
64 It is necessary to bear in mind the principles applicable to construction of an enterprise agreement. A number of relevant principles were summarised in WorkPac Pty Ltd v Skene (2018) 264 FCR 536 at [197] as follows:
The starting point for interpretation of an enterprise agreement is the ordinary meaning of the words, read as a whole and in context. The interpretation “turns on the language of the particular agreement, understood in the light of its industrial context and purpose”. The words are not to be interpreted in a vacuum divorced from industrial realities; rather, industrial agreements are made for various industries in the light of the customs and working conditions of each, and they are frequently couched in terms intelligible to the parties but without the careful attention to form and draftsmanship that one expects to find in an Act of Parliament. To similar effect, it has been said that the framers of such documents were likely of a “practical bent of mind” and may well have been more concerned with expressing an intention in a way likely to be understood in the relevant industry rather than with legal niceties and jargon, so that a purposive approach to interpretation is appropriate and a narrow or pedantic approach is misplaced.
(Citations omitted.)
65 In Ridd v James Cook University (2021) 274 CLR 514, the High Court observed at [17]:
…In that process of interpretation, an important matter of context is the industrial nature of the instrument. Industrial instruments are not always drafted carefully by lawyers or professional drafters, and hence the literal words of a provision might more readily be understood to have a meaning other than their ordinary meaning if the context so suggests.
(Footnotes omitted.)
66 It would be an understatement to say that the classification criteria in the Agreements were not drafted carefully. Their language is imprecise, uncertain and ambiguous. The criteria describe a number of tasks or duties in words or phrases evidently intended to be understood by those responsible for performing them and managing their performance, but in a number of instances, the language used in the evidence to describe particular tasks does not correspond with the language of the classification criteria.
67 The punctuation used in the classification cannot be relied on in construing the criteria. The placement or absence of full stops and commas is somewhat random. The bracketing of words after identification of a task tends to be used to explain or give examples of what is involved in the task, but sometimes appears to describe a different task, rather than merely providing an example.
68 The imprecision of the language and the unhelpfulness of the punctuation make the context particularly important to interpreting the classification criteria. The context includes the structure of the classification criteria, the circumstances in which the Agreements came to be made and the nature of the work customarily performed by the Employees.
69 The criteria for classification are based upon the nature, variety and importance of tasks that are undertaken, which, in turn, are generally dependent upon the level of experience, skill and training of the employee. Accordingly, the lowest classification, Grade 1, applies to trainees. Grade 2 then requires use of electric pallet trucks and performance of additional tasks. The Grade 3 criteria require that employees have a forklift licence and use a forklift and other mechanical equipment, as well as attending to various kinds of “paperwork”. Grade 4 requires employees to act as a Team Leader. Grade 5 applies to a permanent Team Leader.
70 Each of the Employees has a forklift licence and regularly performs work using electric and gas forklifts and is, accordingly, entitled to classification at least at Grade 3 Level 1. It was not in dispute that the criteria should be construed such that employees within Grade 3 are required to also perform work at each lower Level of Grade 3 and at each Level of Grade 2 (notwithstanding that the Agreements are unclear on this point). The evidence demonstrates that the Employees in fact regularly perform tasks within Grade 2 as well as Grade 3.
71 While the Employees work at the distribution centre and not in the Employer’s manufacturing operation, the classification criteria refer to both the manufacturing and distribution duties. For example, the criteria for Grade 2 Level 3 refer to, “Machine tinting (All Products) and checking colour against standard”. That seems to be because the criteria were taken from, or are part of, national agreements covering employees performing a combination of distribution and manufacturing duties. It is common ground that the manufacturing duties are not intended to apply to the Employees and can be disregarded.
72 The history of the Agreements has some relevance. The Employees were classified as Grade 3.6 employees under the 2014 Agreement. In 2017, some of the Employees indicated that they wished to transfer to coverage under the Employer’s national enterprise agreement. It was agreed that a temporary site-specific agreement (the 2018 Agreement) with the same terms and conditions as the existing national agreement would be entered until a new national agreement was made and the Employees could be covered (the 2020 Agreement). It may be noted that the Employer did not submit before the primary judge or in the appeal that any agreement or acquiescence by the Employees to their classification under Grade 3 Level 1 was relevant to the interpretation of the classification criteria: cf. Commissioner for Public Service v Dunk (1999) 66 SAIR 401 at 406.
73 The Employer submits that it is relevant that the description of the Employees’ duties under the 2014 Agreement did not include any of the “higher duties” under the classification criteria and that their actual duties did not change when the 2018 Agreement was entered. By “higher duties”, the Employer appears to mean the duties specified under the Grade 3 Levels 2 and 3 criteria. The submission seems to be that as the Employees’ classification under the 2014 Agreement did not reflect the “higher duties”, and their duties did not change, their classification under the 2018 Agreement can be expected to similarly not reflect any “higher duties”.
74 It is true that under the 2014 Agreement, the Employees’ classification at Grade 3.6 did not reflect the criteria at Grade 3 Levels 2 and 3 of the Agreements. However, it is also apparent that before entry into the 2018 Agreement, the Employees performed a number of “higher duties” which did not come within the Grade 3 criteria under the 2014 Agreement and were instead listed within the Grade 4 Team Leader criteria. Such duties included: “consolidate loads for local carriers”; “consolidate loads for country carriers”; “receipt of goods from external suppliers”; “receipt of goods from other Wattyl warehouses”. Those duties now appear to come within Grade 3 Level 2 of the 2018 and 2020 Agreements.
75 The parties negotiated for a new agreement which became the 2018 Agreement. It should be inferred that the new classification criteria under the 2018 Agreement were intended to capture the duties actually performed by the Employees. That was reflected in the removal of the consolidation and receipting duties described in the preceding paragraph from the Team Leader criteria at Grade 4 and included (as will be discussed) as part of the Grade 3 Level 2 criteria. I reject the Employer’s submission that as the Employees’ classification under the 2014 Agreement did not reflect Grade 3 Level 2 duties, their proper classification under the Agreements similarly does not reflect any Grade 3 Level 2 duties. In fact, the contrary is true. The Grade 3 classification criteria under the Agreements should be taken as broadly intended to reflect the duties actually performed by the Employees.
The nature of the work actually performed
76 The nature of the duties performed by the Employees is demonstrated by the evidence of two of them, David Heffernan and Donnato Tronnolone, and the SOPs produced by the Employer for some of the duties. The affidavit and oral evidence of Mr Heffernan and Mr Tronnolone was accepted by the primary judge.
77 The Employees frequently use an RF unit, which is a hand-held computer. It is used to scan QR codes or barcodes on documents or cartons, which then brings up relevant information on the screen. For example, the RF unit shows the Employees what stock to collect and the location of that stock, or where to take stock for replenishment of shelves. The Employees can also input data into the RF unit, by selecting an option from those displayed on the screen or by entering a numerical code. The RF unit is linked to a printer and the Employees can print documents that are automatically generated from the information that is inputted.
78 On each shift, the Employees are rostered to operate one of three pieces of machinery:
a “low-level order picker” (also called an “electric hand truck”); or
an “electric forklift” (also called a “reach truck”); or
a “gas forklift”.
79 The Employees use the same piece of machinery throughout a shift, but the tasks they perform involving that piece of machinery may change.
80 The duties involved in operating an electric forklift and gas forklift are within the Grade 3 criteria, since those criteria require the employee to have a forklift licence. The duties involved in operating a low-level order picker or electric pallet truck are generally within the Grade 2 criteria since the Grade 2 classification specifically refers to use of that apparatus. It is accordingly instructive to understand what using each piece of equipment entails.
Duties using a low-level order picker
81 The main duty using a low-level order picker, or hand truck, is “part-picking”. That task is done within the warehouse.
82 The Employees engage in a “part-pick” in the following way:
an order ticket is collected and the QR code or barcode is scanned using the RF unit, which then displays which area of the warehouse to go to collect the cartons for the order;
an empty pallet is collected using the “low-level order picker”, and the Employee moves through the warehouse picking up each required carton for the order and placing it on the pallet;
the QR code or barcode on each carton is scanned, which tells the RF unit the item has been picked;
once all the cartons for the order have been picked, the RF unit indicates that the order is complete;
an option is selected on the RF unit which indicates that the pallet is to be wrapped;
the pallet is taken to the wrapping area of the warehouse;
an option is selected on the RF unit to confirm that the order is complete, and the RF unit then sends a complete record of the order to the printer;
the printed documents are checked to ensure that they are correct and that everything in the order has been included in the documents;
the documents and the order ticket are placed with the pallet;
the pallet and documents are wrapped by an automatic wrapping machine, and the pallet is sent down the production line to outside the warehouse;
if the ticket indicates that the order is of loose cartons (usually 10–20 kg), instead of using the automatic pallet wrapper, a lid is placed on the cartons and they are taken to the strapping machine and paperwork is placed with the carton (a dangerous goods sticker is placed on top of the carton where appropriate); and
a variation called a “cluster pick” involves collecting a number of order tickets for different orders and packing them together on the same pallet.
Duties using a reach truck (electric forklift)
83 A forklift licence is required to operate an electric forklift or reach truck so that work done on a shift where the operator is assigned to use that equipment generally involves Grade 3 duties.
84 There are five main duties involved: “replenishment”; “full pick”; “production line”; “goods receipts”; and “purchase orders”. “Replenishment” involves replenishing an empty bay with stock. “Full pick” involves picking up pallets from storage to take outside so that the gas forklifts can place them on trucks. “Production line” involves taking pallets directly from the production line and placing the pallets outside in the staging lane or in the storage area within the warehouse. “Good receipts” involves receiving pallets of paint that have come from the Employer’s interstate distribution centres. “Purchase orders” refers to receiving pallets of stock that have come from other businesses.
85 “Replenishment” involves the following tasks:
the RF unit shows the location to which to take the electric forklift;
the relevant pallet is picked off the rack and brought down;
the RF unit is used to scan the QR code or barcode;
the RF unit asks for information about the pallet, which is entered into the RF unit by selecting the appropriate field;
the RF unit then directs the employee where to take the pallet in the warehouse;
the pallet is taken using the electric forklift to the correct location and placed in that location; and
the bay is scanned with the RF unit to check that it is the correct location, and the RF unit confirms that it is in the correct location.
86 A “full pick” involves picking a full pallet. The task involves the following:
a number code is entered into the RF unit indicating whether the pallet is to be exported to New Zealand or distributed within Australia;
the RF unit displays the location of the relevant pallet and the electric forklift is taken to that location;
the wrapped pallet is picked up with the electric forklift;
the pallet is scanned and information is inputted into the RF unit about the type of pallet;
“enter” is selected in the RF unit, which generates a document;
the document is collected from the printer and placed with the pallet;
an “EAN label” containing a customer’s details, address and other information is collected and placed on the pallet;
the Employee writes the customer’s details, the name of the transport carrier and weight of the pallet on a white sticker so the forklift driver can see the information;
the pallet is picked up and taken to the appropriate location outside the warehouse; and
when an order is going to New Zealand, the electric forklift operator is required to check if dangerous goods are contained in the pallet and applies a “dangerous goods sticker” if required.
87 “Production line” duties involve the following:
the production line takes stock directly down the line from the factory which is next to the distribution centre (100 to 200 pallets that come down during a shift);
all the pallets are checked to make sure that what is on the label is actually on the pallets and that the batch number is correct;
the pallets are scanned with the RF unit which will show where the pallet needs to be placed; and
the pallets are taken to the correct location, usually either in staging lanes or the warehouse storage area.
88 “Goods receipt” involves the following:
the RF unit is used to receive stock delivered from the Employer’s interstate distribution centres into the system;
the stock is checked to ensure it is not damaged; and
the electric forklift is used to put away the stock in storage or in another area.
89 “Purchase orders” involve the following:
the RF unit is used to scan stock, such as cardboard boxes, cardboard lids or paint tins, brought in from other producers;
the items and quantity are checked to ensure that they match the supplier’s document;
it is ensured that the pallet is in good condition; and
the employee checks that the number of pallets is correct, writes down the number of pallets and signs a document to verify that number.
Duties when using a gas forklift
90 Work using the gas forklift involves Grade 3 duties. The tasks are as follows:
taking pallets off trucks and placing them onto racks;
where there are loose cartons or individual drums of paint are required, cutting the pallets open and taking out the individual cartons or drums and placing them on the corresponding pallet or in another location, consolidating the loose cartons or drums with pallets that have been picked locally, and then wrapping the “consolidated pallet”, including placing dangerous goods stickers where necessary;
loading trucks with pallets for dispatch; and
checking the paperwork on the pallets and applying dangerous goods stickers where necessary.
The Grade 2 classification criteria
91 When allocated to use a low-level order picker, or electric pallet truck, on a shift, the Employees are generally doing duties that fall within Grade 2.
92 The Agreements describe the Grade 2 classification as follows:
• Level 1. Manual and RF picking, packing, (all order types) replenishment, stretch-wrapping, electric pallet truck . cycle counting.
• Level 2. Maintenance electric pallet trucks, hand trucks etc, use of computer, receipt and dispatch of all goods
• Level 3. Machine tinting (All Products) and checking colour against standard. (all product types) Performs all tasks of Grades 1 and 2.
93 As has been explained, what Employees call a “low-level order picker” is described as an “electric pallet truck” in the Grade 2 classification criteria.
94 As has also been explained, a number of tasks described in Grade 2 using an electric pallet truck, such as “RF picking”, “packing, (all order types)” and “stretch-wrapping”, require the Employees to use an RF unit by manually inputting information or scanning documents and reading instructions on the screen.
The Grade 3 Level 1 classification criteria
95 It is not in dispute that the Employees’ duties satisfy at least the Grade 3 Level 1 classification criteria.
96 The Grade 3 Level 1 criteria are as follows:
Level 1. Forklift Licence(all Material Handling Equipment), including person up order pickers and cranes (to perform all tasks related to this equipment) and forklift maintenance. (loading and unloading of vehicles and relevant paperwork associated)
Involves being able to perform all duties in level 1 and 2 in both warehousing and manufacturing.
97 The Grade 3 Level 1 criteria require an employee to have a forklift licence and also have a licence for all other “Material Handling Equipment” that is used and requires a licence, including, “person up order pickers and cranes”. It appears that “person up order pickers”, also called “scissor lifts”, are used by the Employees but there was very little evidence about their use. The criteria also require the employee to, “perform all tasks related to this equipment”. Such tasks include, “loading and unloading of vehicles and relevant paperwork associated”.
98 The evidence does not refer to the task of, “forklift maintenance”, but the Employer has not contended that this is intended to be a necessary duty under the Grade 3 Level 1 criteria.
99 The requirement of being, “able to perform all duties in level 1 and 2”, must be understood as intended to mean, “all duties in Grade 2 Level 1 and Grade 2 Level 2 (apart from duties relating to manufacturing)”.
100 It is apparent that the Employees’ use of a gas forklift and electric forklift to perform a task falls within at least the Grade 3 Level 1 criteria.
101 The reference to “(loading and unloading of vehicles…)” provides an example of the tasks that are undertaken using a gas forklift (electric forklifts are not, on the evidence, used to load or unload vehicles).
102 The reference to “(…relevant paperwork associated)” is a reference to paperwork associated with loading and unloading of vehicles. It is not a reference to paperwork associated with tasks other than loading and unloading vehicles.
103 The classification criteria are generally task-based. In that context, while “paperwork” is a noun, in the Grade 3 Level 1 criteria, it should be understood as involving doing a task. In other words, what is meant is, “doing paperwork”. The use of “paperwork” in the Grade 3 Level 2 criteria should be understood in a similar way.
104 The Union submits that the central or key issue to determining the appeal is the meaning of “paperwork” in the Grade 3 classification criteria. The Union submits, as it did before the primary judge, that the word has its ordinary meaning of, “written or clerical work, as the keeping of records, especially considered as an essential but uninteresting part of some occupation”: see Macquarie Dictionary Online. The primary judge accepted the Union’s submission about the application of that meaning, saying:
I accept the applicant’s submission that ‘paperwork’ is a reference to any type of written information about orders, loads or things that have associated responsibilities, duties or tasks to be performed. This includes papers, labels, invoices, forms, notices and self-adhesive notices in the form of stickers.
105 His Honour went on to find:
In my view, the criteria mean that Grade 3 workers need to read and respond to the identified types of paperwork. They may need to check it is correct, or identify which other paperwork is required and to then deal with it by for example attaching it to a load, as in the case of packing slips and invoices, or identifying which category of dangerous goods notice or sticker may need to be applied to a load. They may need to fill in paperwork such as the internal CHEP pallet reconciliation form after checking on what has been returned.
106 The difficulty with the primary judge’s construction of “paperwork” as, “any type of written information about orders, loads or things…”, is that it pays insufficient attention to the whole of the classification structure and criteria. The word “paperwork” does not appear in the criteria for Grade 1 or Grade 2 and appears for the first time within the Grade 3 Level 1 criteria. In addition, the classification criteria are structured such that a wider range of tasks is added at each ascending Grade and Level and those tasks generally require more experience, training, skill and responsibility. In that context, “paperwork” must be understood as requiring tasks that are different to those required under Grade 1 or Grade 2.
107 Under the primary judge’s construction, all the tasks that the Employees are required to do using an RF unit at Grade 2 would amount to “paperwork”. In ordinary contemporary usage, “paperwork” does not necessarily require the use of paper, and encompasses inputting data in electronic form. If it were correct to say that “paperwork” in the Grade 3 criteria, is, “a reference to any type of written information about orders, loads or things”, it would follow that those Employees also “do paperwork” when inputting data into an RF unit by scanning documents, or selecting an option, or entering a numerical code, which are tasks performed at Grade 2 Levels. The specific inclusion of the word “paperwork” in the Grade 3 criteria indicates that something more is required.
108 In understanding the meaning of “paperwork” and “doing paperwork”, an important part of the context is that a store-person’s duties predominantly involve manual handling and operation of machinery. They are not like administrative or managerial staff whose work is predominantly with documents. In that context, “paperwork” in the Grade 3 criteria must refer to documentation having a lesser level of complexity than that dealt with by a Team Leader under the Grade 5 criteria.
109 Another matter of context is that, as the primary judge found, there is only a difference of about $20 per week between wages payable under Grade 3 Level 1 and Grade 3 Level 2. That suggests that the “paperwork” required for the Grade 3 Level 2 classification is not particularly complex or involved.
110 In the classification criteria under the Agreements, what constitutes “paperwork” should be given a liberal or generous interpretation such that it need not necessarily be complex or involved.
111 In my opinion, what is meant by “paperwork” in the Grade 3 criteria is working with actual paper in a task involving some greater level of complexity or decision-making than merely inputting data into an RF unit by scanning a document, or entering a numerical code, or selecting an option from those displayed.
112 However, my disagreement with the breadth of the primary judge’s definition of “paperwork” does not necessarily require disagreement with his Honour’s analysis concerning whether the Employees’ duties fall within the relevant classification criteria. I will first consider his Honour’s analysis of the “paperwork” duties under the Grade 3 Level 1 criteria.
113 The criteria for the Grade 3 Level 1 classification begin by describing the qualifications that are necessary and the broad tasks that are involved. They then specify, “(loading and unloading of vehicles and relevant paperwork associated)”. As I have indicated, the reference to, “relevant paperwork associated”, is to only the doing of paperwork that is associated with loading and unloading of vehicles using a gas forklift.
114 The primary judge found that the paperwork duty associated with loading vehicles using a forklift is to check all paper labels so that the correct pallets in the staging lane or on the conveyor are loaded into the correct vehicle. His Honour found that for unloading pallets from vehicles, the associated paperwork tasks are those described in the SOP for “Internal Receipt”, and include removing the packing slip from the pallet, checking the contents are an exact match, noting any differences, writing the date received, signing the slip and giving it to the Operations Controller.
115 The primary judge’s analysis is not in dispute, and I respectfully agree with it. The tasks described by his Honour involve working with paper and involve some greater level of complexity or decision-making compared to the tasks involved in using an RF unit. The Employees are required to check that information on physical labels is correct and, in the case of unloading, verify their correctness or note and sign (and thereby be accountable) for any differences.
116 This analysis of what doing “paperwork” requires under the Grade 3 Level 1 criteria is relevant to understanding what the criteria require at Grade 3 Level 2 and Level 3.
The Grade 3 Level 2 classification criteria
117 The Grade 3 Level 2 classification criteria are as follows:
Level 2. Dangerous goods paperwork, pallet paperwork, (order consolidation,) (dispatch paperwork) other documentation. Credit and other returns, (pallet reconciliation)
118 The first criterion is doing, “Dangerous goods paperwork”. The Employees’ duties involving dangerous goods are to check the printed manifest to see if dangerous goods are contained in the pallet and, if so, to apply a “dangerous goods sticker” to the pallet. It is necessary to choose which dangerous goods sticker is the appropriate one. The sticker is essential for the health and safety of those who will be handling the goods.
119 The Employer did not repeat the submission rejected by the primary judge that the “Dangerous goods paperwork” criterion requires attendance to, “multimodal dangerous goods documentation and the Emergency Procedure Guide”. Instead, the Employer’s submission is that the application of “dangerous goods” stickers is done by employees operating a low-level order picker and is therefore a Grade 2 duty. However, that bald submission is inconsistent with the Statement of Agreed Facts which indicates (at para 22) that the employee using a low-level order picker places the wrapped pallet onto a conveyer belt after which the gas forklift operator reads and checks the packing slip for “dangerous goods” and applies the relevant stickers. That there is an element of decision-making or judgement involved in choosing the appropriate dangerous goods sticker is demonstrated by the SOP for “Order Picking – Cluster Picking” which requires employees to “obtain the matching DG sticker” and to place the “appropriate DG sticker on the packages”.
120 The evidence of Mr Heffernan indicates that the application of “dangerous goods” stickers is a task generally and routinely done by an employee operating a gas forklift or electric forklift, which suggests that they are tasks done at Grade 3 level. Since using a forklift necessarily engages Grade 3 criteria, it can be expected that generally tasks associated with use of a forklift may also involve Grade 3 duties. In my opinion, tasks that require an employee to write down information or label cartons while exercising a degree of judgement may well involve “paperwork” within the Grade 3 criteria.
121 The only circumstance where a low-level order picker operator may apply a dangerous goods sticker is that of picking an order of loose cartons. The task requires the employee to check the printed manifest to see if dangerous goods are contained in the pallet and, if so, to apply a “dangerous goods sticker” to the pallet. I have held that “paperwork” within the Grade 3 criteria involves working with paper in a task involving some greater level of complexity, importance or decision-making compared to Grade 2 duties. The importance of the “dangerous goods” task and the element of decision-making involved indicates that even when done by an employee picking loose cartons, that task itself is a Grade 3 duty. Therefore, I find that the Employees engage in “Dangerous goods paperwork”.
Pallet paperwork, (order consolidation,) (dispatch paperwork) other documentation
122 The next part of the Grade 3 Level 2 criteria is, “pallet paperwork, (order consolidation,) (dispatch paperwork)”. On one view this may be part of a single criterion, but another view is that they are different criteria. It clearly requires that employees do “pallet paperwork”. The Employer’s submission is that, “order consolidation” and “dispatch paperwork” are examples of “pallet paperwork”. The Union’s submission is that “order consolidation” refers to a physical task, rather than paperwork. The primary judge preferred the latter construction.
123 Mr Tronnolone gave a detailed description of the task of “consolidating orders”. Trucks come from the Employer’s distribution sites from Victoria or New South Wales loaded with paints not manufactured in South Australia but ordered by local shops. The employee on the gas forklift unloads the pallets from the trucks then works out which paint cartons need to be consolidated with the pallets already picked and ready to go to those local shops. The employee combines the cartons from interstate with the picked pallet of local products and re-wraps the pallet, applies any additional “dangerous goods stickers” (the paint from Victoria is flammable) and re-labels the pallet for its destination. The task involves splitting apart the mixed pallets from interstate, sorting the destinations of cartons and then consolidating the pallets with the local orders. The work can be time-consuming and sometimes confusing as there are lots of loose cartons and drums that need to be sorted and moved.
124 It can be accepted that precisely what is meant by “order consolidation” within the phrase, “pallet paperwork, (order consolidation,) (dispatch paperwork)” is uncertain. The fact that “order consolidation” appears between two phrases that have the word “paperwork” tends to suggest that what is meant is “order consolidation paperwork”. On the other hand, the word “paperwork” is not used, suggesting that what is referred to is the task of “order consolidation”.
125 It may be noted that the Grade 3 Level 1 criteria involve doing both physical tasks and associated paperwork. In that context, it would be unsurprising for the Grade 3 Level 2 criteria to similarly describe a mixture of physical tasks and paperwork.
126 The task of “order consolidation” is within Grade 3 duties since it is closely connected with the operation of the gas forklift. The task can be time-consuming and complex. On the Employer’s construction, the task of “order consolidation” does not appear in the Grade 3 criteria at all and the phrase is only used to refer to the paperwork involved in that task. However, it seems quite unlikely that such a lengthy and complex task would be excluded from mention. The appropriate conclusion is that “order consolidation” refers to the whole of the task, rather than merely the paperwork involved. The task includes the physical and mental elements involved in consolidating the orders, as well as re-labelling the pallet. In any event, even if the Employer’s construction were correct, I would find that re-labelling the pallet would come within the description of “order consolidation” paperwork.
127 The Employer submits that “pallet paperwork” consists of preparation of a manifest detailing each consignment, a consignment note, an Emergency Procedure Guide card and any dangerous goods paperwork. A witness called by the Employer, Santosh Gandi, stated that these tasks are done by the Team Leader, not the Employees. However, the fact that the Employees do not attend to every piece of paperwork associated with pallets does not mean that they do not do “pallet paperwork”. It may also be noted that the evidence of Mr Heffernan and Mr Tronnolone makes it clear that the Employees in fact do dangerous goods paperwork and that evidence was accepted by the primary judge.
128 In any event, there are also other tasks that are appropriately described as “pallet paperwork”. The SOP for “Goods Receipt” requires the electric forklift operator to check for discrepancies between packing slips and the received goods, make a note of any discrepancies, tick off the correct items, initial and date the packing slip and place a large tick on the wrapping. The SOP for “Purchase Order Receipts” also requires similar checks to be done. In addition, when receiving goods, the employee also checks that the number of pallets is correct, writes down the number of pallets and signs a document to verify that number. In my opinion, these tasks answer the description of “pallet paperwork” in the Grade 3 Level 2 criteria.
129 The Grade 2 Level 2 criteria refer to “(dispatch paperwork)”. The primary judge accepted that “dispatch paperwork” refers to labels being printed and attached to loaded pallets by the workers after they have completed a full pick. In this respect, the evidence shows that an Employee operating an electric forklift and doing a “full pick” uses the RF unit to print an “EAN label”, which is placed on the pallet. An EAN label contains the dispatch details of the customer’s details and address, the transport carrier and the pallet’s weight. I have held that “paperwork” within the Grade 3 criteria involves working with paper in a task involving some greater level of complexity, importance or decision-making than that involved in Grade 2 duties. Printing an EAN label using an RF unit and attaching it to the pallet does not answer that description.
130 However, the Employee is also required to write the customer’s details, the name of the transport carrier and weight of the pallet on a white sticker and attach the sticker to the pallet so the forklift driver can readily see the information. In my opinion, having to physically write this information is “paperwork” since it is not a duty of the type required at Grade 2 Levels. I also agree with the primary judge that this task is not, “loading and unloading of vehicles and relevant paperwork associated” within Grade 3 Level 1. I find that the Employees do “dispatch paperwork” within Grade 3 Level 2.
131 The reference to “other documentation” in the Grade 3 Level 2 criteria is to miscellaneous other paperwork. An example that Mr Heffernan described is doing a stocktake of pallets, including by scanning them, counting how many were in each bay and checking the product, the label and quantity of each pallet. What must be required is writing down the outcome of the checks.
Credit and other returns, (pallet reconciliation)
132 The next part of the Grade 3 Level 2 criteria is, “Credit and other returns, (pallet reconciliation)”. The Union submitted before the primary judge that these duties are fulfilled by the Employees’ role in making a written record of daily reconciliation of CHEP pallets returned to the Employer. His Honour rejected that submission, finding that returning CHEP pallets does not involve “credits” of any type and that while the reconciliation duty does relate to returned things, CHEP pallets are not things for which credit is applicable.
133 The primary judge accepted the Employer’s submission that “Credit returns” refers to products that are returned by customers for a credit. His Honour found that the main duty involved in credit returns is to determine whether the product is “good” or “bad” for resale purposes and that task is not required to be performed by any Grade 3 worker, and is instead performed at the Grade 5 level.
134 However, his Honour went on to hold that the practical removal of the “Credit returns” duty from the scope of Grade 3 meant that it could not be a valid classification criterion. His Honour considered that the duty was not an intended duty for Grade 3 workers as it was impossible to perform at that Grade and could not have been intended by the parties as an applicable criterion.
135 The Union submits that what is meant by “Credit returns” in the Grade 3 Level 2 criteria is the task of receiving and dealing with returned products, not determining whether the product is “good” or “bad” for resale purposes.
136 Mr Tronnolone’s evidence is that pallets of stock are returned from time to time, including from interstate warehouses. The Employees deal with such returns as part of their duties using an electric forklift, providing an indication that this is a duty within the Grade 3 criteria. The pallets of stock are unloaded, the label on each pallet is scanned into the RF unit and the location to which the stock will be placed is inputted into the unit, and then that location is entered into the unit once the pallet has been placed.
137 There is no evidence that any form of “credit” is involved with the returns described by Mr Tronnolone. Accordingly, I do not accept that these duties involve “Credit returns”.
138 The Employees are responsible for checking the numbers of CHEP pallets being returned. This duty is done by the Employee assigned to use an electric forklift, indicating that it is a Grade 3 duty. The pallets are hired at some substantial expense and it is important to reconcile the number of pallets being returned by customers because the Employer will ultimately have to pay for the shortfall. When a truck arrives with the empty pallets to be unloaded, the truck driver hands the Employee the “CHEP documentation”, which states the number of pallets being returned. The Employee compares the numbers of pallets physically unloaded and records any discrepancy and may sign the documentation. While dealing with the CHEP pallet does not involve “Credit returns”, I find that the duty involves “other returns”.
139 I find that the Employees do not perform the duty of “Credit returns” within the criteria for Grade 3 Level 2. This is the only duty within Grade 3 Level 2 that is not performed by the Employees.
140 The Employer submits that all the criteria must be fulfilled in order for an Employee to be classified as a Grade 3 Level 2 employee. The Union submits that it is only necessary that the Employees perform the “major and substantial” part of those duties.
141 The concept of “major and substantial employment” in the context of award classification has been developed through a number of cases essayed by Moore J in Logan v Otis Elevator Company Pty Ltd [1997] IRCA 200 at 68–73.
142 In Ware v O’Donnell Griffin (Television Services) Pty Ltd [1971] AR (NSW) 18, Sheldon J was required to consider by which of two awards an employee’s employment was covered. His Honour observed at 18–19:
The finding of the Chief Industrial Magistrate raises two questions: firstly, whether this is a case to be determined on the principle of major and substantial employment…
It seems to me that this is clearly a case to which this principle is applicable. This principle is almost as old as industrial arbitration and it makes a practical approach to determining the application of awards where duties are of a mixed character and contain elements which have taken alone would be covered by more than one award. This is not an appropriate occasion on which to discuss the method by which this test should be applied except to say that it is not merely a matter of quantifying the time spent on the various elements of work performed by a complainant; the quality of the different types of work done is also a relevant consideration.
143 In Logan v Otis Elevator Company Pty Ltd, Moore J was required to determine whether the employee came within a particular classification within an award. His Honour considered the principle described by Sheldon J in Ware v O’Donnell Griffin (Television Services) Pty Ltd to be applicable to that circumstance and resolved the issue by determining what the major and substantial employment of the employee involved.
144 In Construction, Forestry, Mining and Energy Union v Anglo Coal (Callide Management) Pty Ltd [2015] FCA 696, Logan J at [38] agreed with Moore J that the observations made by Sheldon J should not be confined to choosing which of two industrial instruments is applicable. That passage from the judgment of Logan J was cited with approval by Bromberg J in Choppair Helicopters Pty Ltd v Bobridge [2018] FCA 325 at [65].
145 The issue of whether it is intended that the Employees do not fall within Grade 3 Level 2 unless they satisfy each element of the criteria must ultimately be determined as a matter of construction of the Agreements. Accordingly, although application of the “major and substantial test” provides helpful guidance, it cannot of itself be determinative.
146 In the present case, there is no doubt that the Employees’ duties encompass a major and substantial portion of the criteria under Grade 3 Level 2. The only duty mentioned in the criteria that they do not perform is “Credit returns”. The Grade 3 Level 2 criteria that they in fact perform are not criteria within any lower Grade or Level. Accordingly, if the Employer is correct that the Employees must satisfy all the criteria, even though they perform the major and substantial part of Grade 3 Level 2 duties, they will only be remunerated at the rate applicable to a lower classification. The Employer would, in effect, get something for nothing. That seems unlikely to be the intention of the Agreements.
147 In my opinion, it is sufficient that the Employees perform the major and substantial portion of the duties specified under Grade 3 Level 2 for them to be classified at that Level.
The Grade 3 Level 3 classification criteria
148 The Grade 3 Level 3 classification criteria are as follows:
Level 3. Export Order Paperwork and coordination. Maintenance of pick and reserve locations. Performs all work of Grades 1, 2, and 3.
149 It was common ground that, “Maintenance of pick and reserve locations”, is not a required duty. On the basis of my findings, the Employees perform all work of Grades 1, 2, and the lower levels of Grade 3. Accordingly, the only issue that arises is whether the Employees perform the tasks of, “Export Order Paperwork and coordination”.
150 The primary judge accepted the Union’s submission that the Employees perform the duty described in the Grade 3 Level 3 criterion. His Honour found that the Employees scan the labels on loaded pallets that make up an export order, then print off additional export labels and place the relevant paperwork with each correct order. They physically check that each order’s label corresponds with its packing slip, and that the packing slip matches the contents. His Honour considered that to be a different process to that applicable to local orders.
151 His Honour accepted the Union’s submission that the Employees also perform a responsible duty of helping to “coordinate” the loading of export orders to New Zealand into closed shipping containers. When loading these orders, they advise the stock controller of a container’s remaining capacity to take more pallets.
152 The primary judge rejected the Employer’s submission that the required Level 3 duty is to individually coordinate loading of a whole export consignment and to take responsibility for all the Employer’s export documentation for each consignment. The Employer had submitted that this task is performed by a Team Leader using a desktop computer in the dispatch office. His Honour rejected the Employer’s submission as being unrealistic, as it disregarded the duty being performed and then it attributed the applicable duty to a Team Leader.
153 The evidence does not bear out the primary judge’s finding that the Employees’ duties in dealing with export orders is a, “different process to that applicable to local orders”. Mr Heffernan’s evidence was that New Zealand orders are “slightly different” because a different sticker had to be applied, “when paint is travelling over water” (noting that such a sticker has not been required for export orders since 2022). However, the evidence of Mr Tronnolone and Mr Gandi indicated that such a sticker is also required when paint is sent over the sea to Tasmania, so that aspect of export duties is not different. Otherwise, the Employees’ task of scanning labels on loaded pallets, printing off labels and placing the relevant paperwork with the pallet was no different than for local orders. The Employees’ task of physically checking that each order’s label corresponds with its packing slip, and that the packing slip matches the contents was also no different in comparison to the procedure required for local orders. Accordingly, the duties with respect to export order paperwork fall within Grade 3 Level 2.
154 I do not accept that the Employees engage in “coordination” of export orders. In the context, the term refers to being responsible for coordinating export orders rather than merely cooperating in the coordination of export orders by someone else. The evidence demonstrates that it is an Operations Controller (a management level position) who coordinates export orders, including by determining how many pallets can be added to a container having regard to volumes and weights. The Employees’ role is only to tell the Operations Controller when asked how much room is left in a container. It is the Operations Controller who determines how many more pallets can be added. The Employees’ role cannot be described as “coordination”.
155 I find that the Employees do not perform the task of, “Export Order Paperwork and coordination”.
156 The primary judge seems to have reasoned that if a duty is included within the Grade 3 criteria but was in fact performed by a Team Leader at Grade 5, there could not have been an intention that the duty apply to a Grade 3 employee. His Honour reasoned that the duty could then be ignored and if the Employee fits within the remaining criteria, the Employee would be classified at that Level.
157 However, the classification criteria focus on the duties actually performed by the Employees. If the requisite duties are not performed, the Employees do not satisfy the criteria. The fact that the Employer may choose to have a duty performed by an employee at a higher Grade does not mean that there was no intention when the Agreements were made that the duty should form one of the criteria for a lower Grade. Accordingly, the fact that the Employer has a Team Leader who performs the duty of, “Export Order Paperwork and coordination” cannot mean that an employee who does not perform those duties can be classified at Grade 3 Level 3.
158 I conclude that the primary judge erred in determining that the Employees are appropriately classified at Grade 3 Level 3 of the classification criteria under the Agreements. In my opinion, their appropriate classification is Grade 3 Level 2.
159 It is not in contest that if the Employees’ appropriate classification is Grade 3 Level 2, the Employer has contravened cl 14, 20 and 25 of the 2018 Agreement and cll 12, 18 and 20 of the 2020 Agreement.
160 Consequently, I would set aside the declaratory order made by the primary judge and replace it with a declaration that:
Hempel (Wattyl) Australia Pty Ltd contravened s 50 of the Fair Work Act 2009 (Cth) by failing to pay Donnato Tronnolone, Carlo Curtale, David Heffernan, Grant Cutler, Philip Hughes and Tony Aurora their wages and entitlements as Grade 3 Level 2 workers in breach of clauses 14, 20 and 25 of the Valspar Paint (Australia) Pty Ltd (Kilburn) Warehouse and Distribution Enterprise Agreement 2018 and clauses 12, 18 and 20 of the Sherwin-Williams National Operations Enterprise Agreement 2020.
161 I would remit the matter to the Employment Court to determine any remaining issues, including any pecuniary penalties and compensation.
I certify that the preceding one hundred and sixty-one (161) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Rangiah. |
Associate:
REASONS FOR JUDGMENT
SNADEN J:
162 I am fortunate to have had an opportunity to review in draft the reasons of Rangiah J. I am indebted to his Honour for the way in which he has recited the background to the present appeal, the findings of the learned Deputy President and the issues that fall for determination.
163 Adopting the same defined terms as those that his Honour has employed, I respectfully agree that the learned Deputy President erred by concluding that the Employees ought to have been paid at the grade 3, level 3 classification described in Appendix J of the 2020 Agreement (or the equivalent and materially identical clause of its predecessor). I am unable, however, to agree that they were engaged to perform tasks consistent with the grade 3, level 2 classification. Instead, I consider that they were correctly classified as grade 3, level 1 employees.
164 Those baseline conclusions stated, it follows that I would allow the appeal, set aside the judgment of the Employment Court and, in its place, order that the respondent’s application to that court be dismissed with no order as to costs (in reality, there appear to have been two such applications—both dated 1 September 2022—one for compensation and interest, and one for the imposition of pecuniary penalties).
165 By the proceeding below, the respondent charged the appellant with having contravened s 50 of the FW Act. That provision prohibits an employer from contravening a term or terms of an “enterprise agreement”. The contraventions alleged were said to have arisen because the appellant Employer had paid the Employees as though they were engaged as grade 3, level 1 employees under the 2020 Agreement and its predecessor. There is no dispute that the relevant instruments were enterprise agreements for the purposes of s 50.
166 Section 50 of the FW Act is a “civil remedy provision”: FW Act, s 539(1). Alleged contraventions of it are actionable within “eligible State or Territory court[s]”: FW Act, s 539(2). The Employment Court is such a court: FW Act, s 12; Fair Work Regulations 2009 (Cth), r 1.05.
167 This court has jurisdiction to entertain appeals from decisions of “eligible State or Territory court[s]”: FW Act, s 565(1). Here, the decision in question was limited in its scope to questions of liability (that is, whether the Employer did, as alleged, misclassify and, thereby, underpay the Employees relative to what the relevant instruments required). Issues of quantum and penalty were reserved for further consideration, which has yet to occur.
168 The primary judgment is almost certainly an “interlocutory judgment” of the kind to which s 24(1A) of the Federal Court of Australia Act 1976 (Cth) refers: Monash Health v Singh (2023) 327 IR 196, 202-206 [27]-[44] (Katzmann, Snaden and Raper JJ). That notwithstanding, the present appeal lies without any requirement of leave: FW Act, s 565(2).
169 As his Honour, Rangiah’s J reasons for judgment make clear, the appeal turns upon the proper construction of Appendix J of the 2020 Agreement (and the materially identical clause of its predecessor, cl 14.1 of the 2018 Agreement). In James Cook University v Ridd (2020) 278 FCR 566, 580-581 [65] (Griffiths and SC Derrington JJ, Rangiah J in dissent but not relevantly for present purposes), this court summarised that construction task as follows:
65 The relevant principles applicable to the interpretation of an enterprise agreement may be stated as follows:
(i) The starting point is the ordinary meaning of the words, read as a whole and in context (City of Wanneroo v Holmes (1989) 30 IR 362 at 378; City of Wanneroo v Australian Municipal, Administrative, Clerical and Services Union (2006) 153 IR 426 at [53]; WorkPac Pty Ltd v Skene (2018) 264 FCR 536 at [197]).
(ii) A purposive approach is preferred to a narrow or pedantic approach — the framers of such documents were likely to be of a “practical bent of mind” (Kucks v CSR Limited (1996) 66 IR 182 at 184; Shop Distributive and Allied Employees’ Association v Woolworths SA Pty Ltd [2011] FCAFC 67 at [16]; WorkPac Pty Ltd v Skene (2018) 264 FCR 536 at [197]). The interpretation “turns upon the language of the particular agreement, understood in the light of its industrial context and purpose” (Amcor Ltd v Construction, Forestry, Mining and Energy Union (2005) 222 CLR 241 at [2]).
(iii) Context is not confined to the words of the instrument surrounding the expression to be construed (City of Wanneroo v Australian Municipal, Administrative, Clerical and Services Union (2006) 153 IR 426 at [53]). It may extend to “… the entire document of which it is a part, or to other documents with which there is an association” (Short v FW Hercus Pty Ltd (1993) 40 FCR 511 at 518; Australian Municipal, Administrative, Clerical and Services Union v Treasurer of the Commonwealth (1998) 82 FCR 175 at 178).
(iv) Context may include “… ideas that gave rise to an expression in a document from which it has been taken” (Short v FW Hercus Pty Ltd (1993) 40 FCR 511 at 518).
(v) Recourse may be had to the history of a particular clause “Where the circumstances allow the court to conclude that a clause in an award is the product of a history, out of which it grew to be adopted in its present form …” (Short v FW Hercus Pty Ltd (1993) 40 FCR 511 at 518).
(vi) A generous construction is preferred over a strictly literal approach (George A Bond & Company Ltd (in liq) v McKenzie [1929] AR (NSW) 498 at 503-504; City of Wanneroo v Australian Municipal, Administrative, Clerical and Services Union (2006) 153 IR 426 at [57]), but “Awards, whether made by consent or otherwise, should make sense according to the basic conventions of the English language. They bind the parties on pain of pecuniary penalties” (City of Wanneroo v Holmes (1989) 30 IR 362 at 380).
(vii) Words are not to be interpreted in a vacuum divorced from industrial realities but in the light of the customs and working conditions of the particular industry (City of Wanneroo v Holmes (1989) 30 IR 362 at 378-379; WorkPac Pty Ltd v Skene (2018) 264 FCR 536 at [197]).
170 Appendix J of the 2020 Agreement is not well written. In multiple respects, it presents as little more than a jumble of random terms that appear unlikely to have ever made sense, even to those who wrote them. Nonetheless, the court’s task now (like that of the Employment Court before it) is to divine what the parties to the 2020 Agreement must be presumed, in fact, to have intended.
171 Looking structurally at the component levels that constitute “grade 3”, it is apparent that there are two species of tasks referred to under “Level 2” that are intended to distinguish it from “Level 1”. The first is “Dangerous goods paperwork, pallet paperwork, (order consolidation,) (dispatch paperwork) other documentation.” The second is “Credit and other returns, (pallet reconciliation)”.
172 I address the first component first. One of the few things that I regard as comparatively clear about the description applicable to “Level 2” is that the first half of it is concerned with some kind of interaction with written material (which is to say, “paperwork” or “documentation”). That observation is at odds with the conclusion of the learned Deputy President. He determined that the parenthesised reference to “order consolidation” should be understood as a reference to a separate species of work; namely work concerned with the consolidation of orders. To that end, the learned Deputy President reasoned as follows (primary judgment, [45]-[46]):
45 In my view the applicant’s submission is correct. The described consolidation and relabelling of orders match the plain meaning of the text, and the context of this duty within the structure. The duty is not to consolidate all order or dispatch paperwork. The performed duty cannot be disregarded and displaced by a higher administrative function.
46 I find the workers do perform the intended duties regarding palletised order consolidation with new labelling.
173 The evidential foundation for that conclusion is unclear. In the course of his evidence in chief, one of the respondent’s witnesses, Mr Heffernan, was questioned by the learned Deputy President about what he (Mr Heffernan) “underst[ood]” to be contemplated by “order consolidation, paperwork”. Mr Heffernan’s evidence was as follows:
WITNESS: Order consolidation paperwork, I know that in terms of order consolidation, that’s something we do every day. When we receive stock from interstate. What they call, “cross stock.” So we receive already picked orders. Pallets from - that arrive to us from interstate, from places, like, New South Wales, for example. And our dangerous goods warehouses. And it’s up to the person on the forklift outside in the morning to receive those pallets. Count those pallets. Make sure that we have what the paperwork says, the manifest says that we have.
And then we consolidate - we receive the pallet, a pallet at least, or sometimes several pallets of smaller cartons, smaller orders, cartons and drums, in the morning. That might be, for example, three cartons for an order, but there’ll be a lot of those very small orders in it. Then it’s up to us to marry up those up, if you like, with pallets that we’ve already picked, ready for despatch that day. So we’ll unload that truck and then identify what we have, and match them up with what we’ve already got, if that makes sense. And consolidate those orders.
HIS HONOUR: All right. Now is there any paperwork you have to look at in that process, and consider?
WITNESS: In terms of unloading a truck in the morning containing that stock?
HIS HONOUR: Yes.
WITNESS: We need to count, it’s our responsibility to count the pallets, primarily the CHEP pallets. And make a note of what we’ve taken off. And just ensure that that matches up with what it says on the manifest paperwork that we receive. And then we hand that paperwork into the people in the despatch office.
HIS HONOUR: Okay. So that’s counting and recording the stock that’s on the CHEP pallet.
WITNESS: What - really we’re counting the CHEP pallets themselves. As far as the stock, that information, all that information regarding the stock and the paperwork of what we will be receiving as a warehouse, is sent through via email the night before.
HIS HONOUR: Okay.
174 It is, I think, tolerably clear that what Mr Heffernan was there describing was not the performance of paperwork tasks; but, rather, work that is undertaken by way of receiving, picking and loading goods. Mr Tronnolone described similar work in his evidence, albeit not (or not obviously) in the context of what might or might not amount to “order consolidation” work.
175 With respect to the learned Deputy President, it is not apparent how any of that should inform the proper construction of the descriptor that Appendix J of the 2020 Agreement attaches to the grade 3, level 2 classification. It was not in contest that, in order that they might fulfil individual orders, the Employees were required, from time to time, to take stock from the Kilburn warehouse at which they worked and combine it with stock received from other warehouses. Doing so plainly required that stock from elsewhere should first be received, and then taken from in whatever way or ways that that process of consolidation required. If the parenthesised reference to “order consolidation” in the classification descriptor applicable to grade 3, level 2 employees should be understood as a reference to work of that kind, then it would likely follow that the Employees, having performed it, should properly have been classified at that level.
176 But why should the parenthesised term be understood in that way, rather than as a reference to a particular species of “paperwork”? Respectfully, one searches in vain through the evidence and the reasoning of the learned Deputy President for any answer to that question.
177 I consider it clear enough that the first half of the description applicable to grade 3, level 2—namely “Dangerous goods paperwork, pallet paperwork, (order consolidation,) (dispatch paperwork) other documentation”—is a description of the various kinds of paperwork in which a grade 3 employee must partake in order to attract classification at level 2. There are a number of contextual indicators as to why that is so.
178 First and most powerfully, the concluding use of “other documentation” suggests that the preceding concepts were intended to be of like kind. It would be, to say the least, a curious turn of phrase for the descriptor to conclude with a general and inclusive reference to “other documentation” after having listed constituent concepts not themselves linked in some way to “documentation”. A list of that kind would be self-evidently incongruous—much like, for example, a reference to “rugby league, Australian rules football, ice cream and other full-contact sports”. At least in the absence of some powerful evidential basis for doing so, the court should be slow to favour a construction that gives effect to incongruity of that nature. Instead, the reference to “order consolidation” should be read ejusdem generis with the other concepts that surround it.
179 Second, there is no obvious reason of industrial policy or principle why work associated with the loading, unloading, picking or packing of “consolidated” orders—that is to say, orders that are to comprise of goods that originate partly from the Kilburn warehouse and partly from other sources—should warrant classification at a higher level than other loading, unloading, picking or packing tasks that fall within grade 3. Unlike the preparation of paperwork—which plainly does involve work additional to or qualitatively different from those baseline warehousing duties—the sorts of work described by Mr Heffernan are distinguishable from level 1 warehousing tasks only insofar as concerns the origins of the stock that is to be distributed. Why that should attract classification at a higher level is anything but clear and, with respect to the learned Deputy President, neither his reasons nor the evidence offer any indication as to why that might be presumed to have been intended.
180 Third, the historical application of the grade 3 classification structure suggests, at least from the point that the 2020 Agreement came into effect, that it was understood that the work that the Employees performed was not of a kind to which level 2 would apply. There was evidence below that the appellant and the respondent had agreed as much at the time that the 2018 Agreement was made. That evidence is likely not competent to inform the proper construction of the clause as it was originally expressed: Bianco Walling Pty Ltd v Construction, Forestry, Maritime, Mining and Energy Union (2020) 275 FCR 385, 397 [59] citing with approval Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union v Berri Pty Ltd (2017) 268 IR 285, 310 [114]. Nonetheless, it is apparent that the parties thereafter (throughout the relatively short life of the 2018 Agreement) conducted themselves consistently with the accord that was struck. Having agreed to a clause in the same terms in the 2020 Agreement, they should ordinarily be presumed to have intended that there should be no change to the manner in which it had been applied to that point.
181 To repeat, then, I accept that the first half of the description applicable to the grade 3, level 2 classification references the performance of various types of “paperwork”. With respect, the learned Deputy President was wrong to conclude otherwise.
182 Having so concluded, the question to which attention should then turn is whether any of the Employees should properly be understood to have performed any of the “paperwork” or “documentation” tasks to which the first half of the grade 3, level 2 descriptor refers.
183 The learned Deputy President accepted (primary judgment, [33]) that:
…‘paperwork’ is a reference to any type of written information about orders, loads or things that have associated responsibilities, duties or tasks to be performed. This includes papers, labels, invoices, forms, notices and self-adhesive notices in the form of stickers.
184 Later (at [38]), the learned Deputy President accepted that the grade 3, level 2 classification contemplated “…more than only dealing with paperwork associated with basic loading and unloading of pallets into and out of vehicles”. At [40], he reasoned that:
…the criteria mean that Grade 3 workers need to read and respond to the identified types of paperwork. They may need to check it is correct, or identify which other paperwork is required and to then deal with it by for example attaching it to a load, as in the case of packing slips and invoices, or identifying which category of dangerous goods notice or sticker may need to be applied to a load. They may need to fill in paperwork such as the internal CHEP pallet reconciliation form after checking on what has been returned.
185 Respectfully, I am unable to accept that those observations (at least in their entirety) are consistent with a realistic conception of “paperwork”. Read properly and in context, the reference in the grade 3, level 2 descriptor to various forms of “paperwork” or “other documentation” cannot credibly be understood as contemplating mere interaction with written material. Were it otherwise, it is difficult to see how any work undertaken under the 2020 Agreement by employees with forklift licences could fall within the grade 3, level 1 classification. As is clear from what were accepted to be the essential characteristics of the Employees’ tasks, all such work necessarily requires at least some degree of interaction with written records, including records containing information about dangerous goods, pallets and consignments.
186 By its ordinary meaning, attending to “paperwork” involves generating written records that pertain to the completion of other work. Taking a written record as an instruction to do something or as a source of information to be processed in some way would not ordinarily qualify; nor would using computers or other machines (such as printers) to compile or produce in written form information that was collected or generated electronically. To do “paperwork” is, in my view, to create something that is to serve as a written record that pertains in some way to the performance of other work.
187 So understood, attention can turn to what the Employment Court accepted as the examples of “paperwork” to which the Employees routinely attended.
188 The learned Deputy President accepted, first, that they undertook some dangerous goods paperwork; specifically, in that they were responsible for checking the content of orders prepared for dispatch and, in the case of contents that required it, attaching a “dangerous goods sticker” (and possibly other written notices) to the pallet. Again with respect, work of that nature is not to be equated with the “doing” of “paperwork”. It does not involve the creation of anything. It involves the checking of manifests and the application of notices or stickers that have been elsewhere prepared. Indeed, the evidence before the Deputy President was that, on smaller orders that did not require the use of forklifts, the checking of packing slips and the application of dangerous goods stickers were tasks that were performed by grade 2 employees.
189 Further, it is not the case that the Employees were responsible for, as the learned Deputy President put it, “…selecting the correct category of required [dangerous goods] notice”. On the contrary, that information came pre-stipulated on packing slips or on labels attached either to wrapped pallets or to cartons within them. The task for the Employees was simply to follow an instruction (an important one, to be sure).
190 It follows that I consider that the learned Deputy President was wrong to conclude that the Employees’ work was apt to include “dangerous goods paperwork”.
191 Next, the Employment Court considered whether the Employees undertook paperwork associated with “order consolidation”. Although it could be clearer from his reasons, with respect, it appears that the learned Deputy President accepted not only that the reference to “order consolidation” was a reference to a physical task (or set of tasks); but also that, to the extent that it contemplated “paperwork”, the Employees satisfied that aspect as well because “order consolidation” involved “relabelling” consolidated pallets.
192 It is not clear precisely what the learned Deputy President meant by that reference to “relabelling” but it doesn’t much matter. The evidence is tolerably clear that the process of labelling or relabelling consolidated pallets was not one that involved “paperwork” in any sense that accords with what I have observed above. At most, it involved printing out records—that is to say, records of information prepared electronically or otherwise than by the Employees themselves—and applying them to pallets. I do not accept that that might properly be described as “paperwork” and, to the extent that he held otherwise, the learned Deputy President did so in error.
193 Next (and perhaps relatedly), the Employment Court accepted (primary judgment, [48]) that “…tasks performed regarding ensuring the correct dispatch labels are fixed to orders completed by the [Employees] is a relevant Level 2 dispatch paperwork duty”. Again and for reasons equivalent to those outlined in the last paragraph, that conclusion is unsustainable.
194 Something should be said of what constituted the “correct dispatch labels” to which the learned Deputy President referred. In the case of each individual order, there were two: the first was what was described as an “EAN [presumably European Article Number] label”; the second was “a white sticker” upon which was to be written the name of the carrier by which the pallet was to be transported and the weight of the pallet in question. The latter was to be attended to so as to more easily enable forklift drivers to ascertain what they were loading and where they needed to take it. The EAN label contained equivalent information.
195 On the conception of “paperwork” to which I am drawn, there is an argument to be made that the preparation of those “white stickers”—containing, as they plainly do, information about the content of pallets and the carriers that are engaged to dispatch them—might amount to the “doing” of “pallet paperwork” (or possibly “dispatch paperwork”). The stickers assume a written form, and contain information that is generated by an employee and pertains to the performance of other work (in particular, the loading of pallets into vehicles).
196 There are, however, two circumstances that incline me away from concluding that that work falls within the descriptor applicable to the grade 3, level 2 classification. First, it is apparent that the creation of “white stickers” is a task that is undertaken for the benefit of forklift drivers. They are devices to assist drivers to see (presumably from the cabin of their forklifts) information about the pallets with which they are to work. They do not record information that isn’t already recorded on the labelling that is already affixed to pallets; they are merely more accessible manifestations of some of that same information. So understood, it is difficult to constitute them separately as “records” in the sense that I consider inherent to the concept of “paperwork”.
197 Second and perhaps more importantly, the creation of the “white stickers” seems inextricably linked with the loading of pallets into vehicles. The learned Deputy President was disposed to conclude (primary judgment, [47]) that the placing of white stickers on pallets was “…more than the Level 1 duty of checking the paperwork for correctly loading vehicles”. But, respectfully, the “Level 1 duty” is more broadly expressed: it refers (admittedly with the same want of clarity that plagues the rest of Appendix J of the 2020 Agreement) to “loading and unloading of vehicles and relevant paperwork associated”. It is unclear why the preparation of information on a sticker that displays details about a pallet in a way that is intended to make it easier for a forklift driver to load it into a vehicle should not qualify as the preparation of paperwork associated with the loading of pallets into vehicles. It should and does.
198 It follows that I consider that the learned Deputy President was wrong to conclude that the Employees were engaged in “pallet paperwork” or “dispatch paperwork” of kinds sufficient to attract the application of the grade 3, level 2 classification.
199 The learned Deputy President also found (primary judgment, [49]) that, inasmuch as they had occasion to obtain and place invoices “…on completed small orders”, the Employees were engaged to perform “other documentation”. For reasons that might, by now, be apparent, I do not accept that the obtaining and placement of invoices could amount to what is contemplated by the reference to “other documentation”. That reference, like the others that precede it, is apt to describe the preparation of written material to record some aspect about the performance of work. On no view could the printing and placing of invoices satisfy that description. Respectfully, the learned Deputy President was wrong to conclude otherwise.
200 The evidence makes clear that there is a suite of “paperwork” that is prepared and provided to freight carriers when they collect pallets from the Employer. It includes consignment manifests and notes, emergency procedure guides, and (in some cases) “multimodal dangerous goods forms”. None of that is or was prepared by any of the Employees. Although it is unnecessary to conclude for present purposes, it seems likely that the references to “paperwork” within the grade 3, level 2 descriptor were intended as references to paperwork of that nature.
201 The interactions that the Employees undoubtedly have with various written records cannot properly be shoehorned into the performance of “paperwork” (or otherwise as attendance to “other documentation”) within the contemplation of what the classification description for grade 3, level 2 employees provides. To the extent that the learned Deputy President concluded otherwise, he did so in error.
202 That leaves for consideration the second half of the description that Appendix J of the 2020 Agreement attaches to the grade 3, level 2 classification: namely, “Credit and other returns, (pallet reconciliation)”.
203 The learned Deputy President was satisfied that the Employees were engaged in the performance of work of that kind; specifically, because they attended to “pallet reconciliation” work. It repays here to set out the reasoning that led the learned Deputy President so to conclude (primary judgment, [50]-[55]):
50 The applicant submits the ‘Credit and other returns, (pallet reconciliation)’ duty is fulfilled by the workers’ role in making a written record of daily reconciliation of CHEP pallets sent with orders and later returned.
51 The respondent submits this criterion refers only to the Grade 5 duty of determining if returned stock can be resold. It submits the task of recording the number of CHEP pallets leaving and returning is paperwork associated with unloading vehicles, a Level 1 duty.
52 In my view the applicant’s interpretation cannot be applied to Credit returns, as returning pallets are not credits of any type. The CHEP reconciliation duty does relate to returned things, i.e. pallets, but they are not things for which credit is applicable. In reaching this conclusion I accept that the bracketed words ‘pallet reconciliation’ relate to ‘other returns’ despite the comma before the brackets.
53 I accept the respondent’s submission that returns for which a credit may be relevant are products returned by customers for a credit. I accept the duty regarding credit returns, after they have been unloaded, is to first determine whether the product is ‘good’ or ‘bad’ for resale purposes. I accept the unchallenged evidence that this task is not required to be performed by any Grade 3 worker, as it is performed at the Grade 5 level.
54 The practical removal of this duty from the scope of Grade 3 means it cannot be a valid classification criterion for Level 2 or 3. It is not an intended duty for Grade 3 workers, is impossible to perform at Grade 3 and thus cannot have been intended by the parties as an applicable criterion.
55 The respondent’s submission is incorrect because it disregards the wording of ‘pallet reconciliation’ being a Level 2 duty and focuses only on the credit return duty. Nor does the Internal Receipt [Standard Operating Procedure] used for unloading vehicles include this duty. If this criterion was not specified as a Level 2 duty there may be force in the respondent’s submission, but that is not how the criteria are expressed. I accept the workers do perform the pallet reconciliation duty meant by this criterion.
204 Although it is unclear from [55] what the learned Deputy President considered was sufficient to warrant the conclusion that the Employees “perform the pallet reconciliation duty”, it seems likely that he was referring to what is described at [50]: namely, that the Employees had a “…role in making a written record of daily reconciliation of CHEP pallets sent with orders and later returned”.
205 The evidential foundation for that conclusion is similarly unclear. It is not apparent on the evidence that the Employees made any such record. Rather, they were responsible for ensuring that the number of pallets that, from time to time, were returned to the Employer matched what was recorded in the transport documentation with which they were returned (and, perhaps also, for bringing to the attention of their team leaders any discrepancies that were apparent from those endeavours). In other words, they made sure that what the relevant documentation said was being returned was, in fact, received.
206 Again—and appreciating the want of clarity inherent in the manner in which the classification description is framed—I do not consider that work of that nature fairly or properly contorts into what might be conceived of as “pallet reconciliation” work. Ensuring that what they load or unload from a vehicle accords with what they are meant to load or unload strikes very much as an elemental component of loading and unloading vehicles. It is properly regarded as being within what the grade 3, level 1 classification contemplates.
207 The learned Deputy President was also satisfied that the Employees were engaged in the work of “other returns” in that they had occasion, from time to time, to take stock that was returned to the Kilburn warehouse and place it “…in its correct location in the warehouse”. Again with respect, that conclusion rests upon an unrealistically generous conception of what might be meant by “Credit and other returns”. Receiving stock that customers have returned no more involves the processing of “Credit and other returns” than the receiving of stock from other warehouses for distribution in consolidated consignments involves the processing of sales or purchases. Taking receipt of things necessarily entails putting them somewhere. Again, that is an elemental component of unloading vehicles. It strikes me as most unlikely that a higher classification was thought appropriate to cover the receipt of some goods merely because of where they might have come from.
208 The better—and, in my view, the most sensible—way to read the descriptor that Appendix J of the 2020 Agreement attaches to the grade 3, level 2 classification is as signifying the performance of tasks that are qualitatively different from those that fall within the level 1 classification. That is traditionally the way in which graduating classification structures operate. It is also consistent with the introduction of “paperwork” as a “higher” or additional duty (relative to those performed by grade 3, level 1 employees), the performance of which should attract a higher classification and payment of a higher wage.
209 Respectfully, the learned Deputy President was wrong to conclude that the Employees were engaged in the performance of “other returns”.
210 More broadly, the Employment Court was wrong to conclude that the Employees performed work sufficient to constitute them as grade 3, level 2 employees under Appendix J of the 2020 Agreement (or the equivalent clause of its predecessor). The appeal should be allowed. The judgment of the Employment Court should be set aside and, in its place, it should be ordered that the respondent’s applications to that court (both dated 1 September 2022) be dismissed. Consistently with s 570(1) of the FW Act, there should be no order as to costs, either in the appeal or as concerns the proceeding below.
I certify that the preceding forty-nine (49) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justice Snaden. |
Associate:
Dated: 22 July 2024
REASONS FOR JUDGMENT
ABRAHAM J:
211 I agree with the orders of Snaden J, generally for the reasons he gives.
I certify that the preceding one (1) numbered paragraph is a true copy of the Reasons for Judgment of the Honourable Justice Abraham. |
Associate:
Dated: 22 July 2024
