FEDERAL COURT OF AUSTRALIA

Construction, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Thiess Pty Ltd [2011] FCA 1020

UPON the Respondents by their counsel undertaking to abide by the dispute resolution procedure prescribed by Clause 15.1(b) of the Thiess Degrémont and AMWU, AWU, CEPU and CFMEU Victorian Desalination Project Greenfields Agreement 2009 in respect of the disputes described in paragraph [67] of the reasons for judgment delivered herein on 31 August 2011 and undertaking to abide by those terms until 4:15 pm on 9 September 2011:

THE COURT ORDERS THAT:

1.    The further hearing of this proceeding and any necessary directions hearing be adjourned to 2:15 pm on 9 September 2011.

2.    Liberty to apply.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

1    A new desalination plant is being constructed near Wonthaggi. The respondents are the principal contractors responsible for building the plant. Electricians engaged on the project are represented by the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (“the CEPU”).

2    A dispute has arisen between the parties. It relates to a proposal by the respondents to vary rostering arrangements for electricians at the site. The CEPU alleges that the respondents have attempted to implement the changed rostering arrangements without observing certain procedural requirements prescribed by the applicable industrial agreement.

3    The issues raised by the CEPU’s application include whether, in the circumstances, the respondents are obliged to comply with the prescribed procedures and, if they have failed to do so, whether a pecuniary penalty should be imposed for any contravention.

THE BACKGROUND FACTS

4    The employment of electricians and other employees engaged on the project is governed by an enterprise agreement approved by Fair Work Australia. The agreement is entitled “Thiess Degrémont and AMWU, AWU, CEPU and CFMEU Victorian Desalination Project Greenfields Agreement 2009” (“the Agreement”). The Agreement was approved by Fair Work Australia on 12 January 2010. It has operated since 19 January 2010. Its nominal expiry date is 31 December 2012.

5    The Agreement provides for employees (including the electricians) to work either what is known as a 56 hour roster or a 4 on 4 off roster.

6    In the course of the present calendar year some electricians were working under the 56 hour roster arrangements and others on the 4 on 4 off roster.

7    Towards the middle of the year the respondents engaged a large number of additional electricians. Many of these new employees were, they say, induced to give up other employment because of assurances from the respondents’ staff that work at Wonthaggi would be available until the end of the year or, in some cases, well into 2012. Some of these newly engaged employees committed themselves to leases of houses near the project site. Some altered family arrangements and moved their children into new schools.

8    In June 2011 the respondents became concerned that there had been a considerable fall in the level of productivity on the part of electricians working under the 4 on 4 off roster. It raised these concerns with the CEPU.

9    The concerns about productivity persisted. In mid August 2011 the respondents determined to move most of those electricians working on the 4 on 4 off roster onto a 56 hour roster. A consequence of this change, if it is implemented, will be that approximately 160 electricians will be made redundant. On the afternoon of 17 August 2011 the respondents arranged for the electricians to attend meetings on the site. The employees were handed a memo which advised them that:

“The purpose of this memo is to notify you that TD will move the majority of electrical employees to the 56 hour roster effective from 25 August 2011. Accordingly, please be advised on the following:

1.    TD is meeting with the ETU today to notify them of this decision and to discuss associated issues;

2.    The decision has been taken on the basis that we have not achieved the level of productivity from the 4 x 4 roster required to meet the needs of the project and on current performance, the roster does not provide value for money;

3.    TD expects that there will be approximately 160 electrical positions demobilised (made redundant);

4.    TD will commence consultative sessions on the demobilisation process with electrical employees and their representatives later today. These sessions will continue over the coming week;

5.    TD intends to retain the most competent and skilled electrical employees on the project;

6.    More information will be provided to you through your Supervisor and in the consultative sessions, commencing from today …”

10    Shortly after these meetings concluded representatives of the respondents met with Mr Troy Gray, the Assistant State Secretary of the ETU Division of the CEPU and Mr Scott Riches, the ETU Delegate at the site. The company representatives advised the CEPU officials about the proposed course of action, the reasons for it and the consequential redundancies. Mr Gray said that the CEPU would be “putting this into dispute”.

11    Later that afternoon managers conducted meetings with electricians to provide more details of the proposed changes. In one of these meetings Mr Gray directed foul and abusive language to one of the respondents’ managers.

12    During the evening of 17 August 2011 Mr Gray telephoned Ms Anna Morris, the People, Safety and Community Director, of the respondents. He asked permission to hold a meeting of members on site. Ms Morris refused the request because of Mr Gray’s behaviour earlier in the day. She told him that his standing invitation to enter the site was revoked. She offered to meet him at 7:00 am the next morning to discuss the changes which had been announced but reiterated that he was not to come on to the site.

13    At about 5:35 am on 18 August 2011 Mr Gray arrived at the site and, despite being told by a security officer at the gate to wait until he was cleared to enter, Mr Gray proceeded to enter the site. At about 6:15 am a mass meeting of the electrical employees commenced. Mr Gray addressed that meeting.

14    At about 6:30 am Mr Gray led a group of approximately 220 electricians as they proceeded through the cafeteria towards an administration block. Outside the administration block the employees yelled abuse at management staff.

15    At about 7:15 am some electrical employees commenced work. Work had been scheduled to commence at 6:30 am. A group of electrical employees did not commence work for the day until 10:30 am.

16    At 9:26 am Mr Gray advised the respondents that the CEPU was invoking the dispute settling procedures provided for in the Agreement in order to deal with the roster changes proposed by the respondents.

17    Mr Gray’s advice was confirmed later that day in a letter from him to the respondents. The respondents were notified that:

“We formally notify as the appointed employee representative of the electrical employees that they have a dispute and grievance in relation to the matters referred to in your MEMO.

The electrical employees dispute and are aggrieved by the decision and the effects of the decision to terminate the existing roster, to introduce a new roster and to terminate the employment of 160 employees, and the process and manner in which the matters have and will be implemented, including the lack of meaningful consultation.

…

Therefore, in accordance with the first step of the dispute settling procedure contained in clause 15.1(b)(i) of Part 1 of the Agreement, we seek a meeting to occur between the immediate supervisors, the electrical employees and the requested employee representative, which is us, the Union, so that genuine attempts can be undertaken to resolve the grievance. …”

18    Later on 18 August 2011 the solicitors acting for the respondents wrote to Mr Gray advising that, because of what was described as “the violent and threatening conduct by both yourself and that of your members and delegates” the respondents and its management sought undertakings that their personal safety would be respected in dealings with CEPU members and officials. The letter concluded with the statement that, nonetheless, two senior managers of the respondents were “prepared to meet with you off site to continue to discuss the issues arising from the change of roster.”

19    On 19 August 2011 the respondents’ solicitors responded to the letter, sent by Mr Gray, on the previous day. The solicitor’s letter contained the following two paragraphs:

“In relation to the application of clause 15 of the Agreement, and the operation of clause 15.1(a)(iii), TD will consult with the ETU about the redundancies. That does not however mean that the notice of cessation will not operate as that is an existing right that TD has under the Agreement and represents the status quo of rights and obligations under the Agreement.

On this basis TD does not accept that it is restrained from proceeding in the manner in which it has advised employees and the Union and will be implementing the roster change.”

20    On 22 August and 24 August 2011 meetings took place between representatives of the respondents and officials of the CEPU regarding the implementation of the proposed redundancies. The respondents also organised what they described as ‘consultation sessions’ at the project site at which the respondents’ decision to vary the roster and the consequent need for redundancies was explained to employees. Questions from the employees were answered. These discussions did not take place as part of the disputes settling procedure.

THE COMMENCEMENT OF THE PROCEEDING

21    Electrical employees engaged on the 4 on 4 off roster were due to conclude their shift on the evening of 21 August 2011. A new shift was due to commence that night and continue until the night of 25 August 2011.

22    The CEPU was apprehensive that the respondents would implement the new roster arrangements on the Sunday night and, at that time, commence to terminate the services of employees who were deemed to be redundant. This apprehension was founded, at least in part, on the respondents’ failure to give the CEPU an undertaking not to act in this way.

23    Urgent interim injunctive relief was sought by the CEPU late in the afternoon of 19 August 2011. The respondents had been advised that the CEPU was proposing to make the application and they were represented at the hearing.

24    The Court indicated that it would hear the application, if need be, the following morning. The respondents were, however, prepared to undertake that they would not terminate the employment of any electricians on redundancy grounds without first giving 24 hours’ notice to the CEPU. Senior counsel advised the Court that the respondents had no intention of taking such action before the night of 25 August 2011.

25    The application for interlocutory relief was adjourned until 23 August 2011.

26    On 22 August 2011 the CEPU filed and originating application seeking the following relief:

“1.    A declaration that the Respondents have contravened s 50 of the Fair Work Act 2009 (Cth) (“the Act”) by contravening clause 15 of the Thiess Degrémont and AMWU, AWU, CEPU and CFMEU Victorian Desalination Project Greenfields Agreement 2009 (“the Agreement”), in that they have on and since 18 August 2011 failed to observe and/or to act in accordance with clause 15 in respect a dispute and grievance of which they were given notice by the Applicant on 18 August 2011 (“the dispute”).

2.    A declaration that the Respondents have contravened s 50 of the Act by contravening clause 15.1(a)(iii) of the Agreement, in that they have on and since 19 August 2011, refused to withhold implementation of their decision for electrical employees employed by them on the Victorian Desalination Project in Wonthaggi in Victoria (“the Project”) to work a 56 hour roster and for 160 of the said electrical employees to be made redundant.

3.    An order under s 546(1) of the Act that the Respondents pay a pecuniary penalty in respect of their contraventions of s 50 of the Act referred to in paragraphs 1 and 2 above.

4.    An injunction under s 545(1) of the Act in respect of the Respondents’ contraventions of s 50 of the Act referred to in paragraphs 1 and 2 above, restraining the Respondents from implementing a 56 hour roster for electrical employees employed by them on the Project and from making 160 of the said electrical employees redundant, until the disputes settling procedure contained in clause 15 of the Agreement has been undertaken and completed in respect of the dispute.

5.    Further or in the alternative to paragraphs 1-4 above, a declaration that, by their failure on and since 18 August 2011 to observe and/or to act in accordance with clause 15 of the Agreement in respect of the dispute, the Respondents proposed to contravene clause 15 of the Agreement and thereby proposed to contravene s 50 of the Act.

6.    Further or in the alternative to paragraphs 1-4 above, a declaration that, by their refusal on or about 19 August 2011 to withhold implementation of their decision for electrical employees employed by them on the Project to work a 56 hour roster and for 160 of the said electrical employees to be made redundant and from making 160 of the said electrical employees redundant, the Respondents proposed to contravene clause 15.1(a)(iii) of the Agreement and thereby proposed to contravene of s 50 of the Act.

7.    Further or in the alternative to paragraphs 1-4 above, an injunction under s 545(1) of the Act in respect of the Respondents’ proposed contraventions of s 50 of the Act referred to in paragraphs 5 and 6 above restraining the Respondents from implementing a 56 hour roster for electrical employees employed by them on the project and from making 160 of the said electrical employees redundant, until the disputes settling procedure contained in clause 15 of the Agreement has been undertaken and completed in respect of this dispute.

8.    An order under s 546(3)(b) of the Act that any penalties by paid to the Applicant.”

27    When the hearing resumed on 23 August 2011 the CEPU pressed its application for injunctive relief to restrain the respondents from implementing the proposed rostering changes and terminating employees on the grounds of redundancy pending the hearing and determination of its application or further order.

28    As argument developed it became clear that the issue at the heart of the dispute between the parties turned on the question of whether the dispute settlement procedure, prescribed by the Agreement, had to be complied with before the respondents could terminate the 4 on 4 off rostering and revert to the 56 hour roster.

29    In these circumstances I indicated that I would be prepared to fix the proceeding for trial on 29 August 2011 provided that the respondents were prepared to defer implementation of the proposed changes until the hearing could take place. Such undertakings were forthcoming.

THE AGREEMENT

30    Rostering is dealt with in Clause 7.5 of Division A Part 2 of the Agreement. That Clause provides:

“Rosters

(a)    For the purpose of this Division the following indicative working rosters shall apply to the Plant:

(i)    a 56 hour roster to be worked in accordance with the Industry Calendar based on 4 days of 10 hours each (Monday to Thursday) and two days of 8 hours each (Friday to Saturday).

(ii)    The parties have developed a 4 on/4 off roster that is set out in Part 2 Schedule 1A – 4 on/4 off roster.

(b)    The introduction of the roster arrangements provided for in 7.5(a)(ii) may be implemented at TD’s initiative and following full consultation and agreement with the relevant Union(s) via the Organiser and delegate. The Union(s) will not unreasonably withhold agreement.”

31    By Clause 1.3 of Part 2 of Schedule 1A to the Agreement the respondents may terminate the implementation of the 4 on 4 off roster at their discretion. This was the power which they proposed to exercise. It appeared in these terms:

“The implementation of the 4/4 roster may be terminated by TD. Once terminated the 4/4 roster may be re-implemented in the manner provided for in Clause 7.5 of Division A of Part 2.”

32    The CEPU insisted that the power could not be exercised until the disputes settling procedure, provided for in Clause 15.1 of the Agreement, had been complied with. Clause 15.1 provides:

“(a)    General

(i)    This clause sets out procedures to settle disputes and grievances relating to any and all matters arising out of or in connection with the application or interpretation of this Agreement or the National Employment Standards (“NES”).

(ii)    In order to comply with this clause the parties acknowledge that it is a fundamental requirement that it be observed in its entirety.

(iii)    It is an express condition of this Agreement, that while the steps below are being followed normal work shall continue and the status quo shall remain (as it was prior to the matter in dispute), unless an employee has a reasonable concern about an imminent risk to his or her health and safety. If such concern exists, the employees must not unreasonably fail to comply with a direction given by the employer to perform other available work which is within their skills and classification and that is safe for the employee to perform.

(iv)    Sensible time limits shall be allowed for all steps of the disputes and grievances procedure to be finalised as quickly as possible. When a dispute is referred under this procedure, it will be dealt with expeditiously. The parties agree to prioritise the resolution of disputes and to act not to frustrate the RDO Flexibility available in the respective Divisions in Part 2 through the use of this disputes procedure.

(v)    Matters may only be referred to the PDP by the direct parties to the Division of Part 2 in relation to which a matter in dispute or grievance has arisen.

(vi)    A party to a dispute may appoint a representative at any stage during the use of this procedure.

(vii)    Nothing in this clause is intended to remove any of the parties rights under the Fair Work Act 2009 or other statute or at common law.

(b)    Procedure

(i)    Step 1 – Where a grievance arises, the matter shall initially be taken up at the workplace between the immediate Supervisor and the employees concerned and, if requested by the employee/s concerned, the relevant Union delegate. A genuine effort by all will be made to resolve the grievance at this level.

(ii)    Step 2 – If the grievance is still unresolved after discussions referred to above, an attempt will be made to resolve the matter by discussions between the employee, the relevant Union delegate of the employee, and TD’s Superintendent and/or HR Manager or nominated representative.

(iii)    Step 3 – Should the above steps discussions fail to resolve the grievance, the matter shall be referred to the Area Project Director (or nominated representative), who shall meet in an attempt to resolve the grievance with the employee and the relevant responsible full time official of the Union.

(iv)    Step 4 – If the grievance is still unresolved either party may refer the matter to the PDP which may attempt to resolve the dispute including by mediation, conciliation, expressing an opinion, making a recommendation or making a binding determination.

(v)    The use, operation and powers of the PDP are as described in Part 1 – Schedule 3 of this Agreement. Any binding determination will be subject to either party’s right to lodge an appeal to FWA within 14 days. An appeal is by way of rehearing.

(vi)    Step 5 – If the grievance is still unresolved, or as allowed by Part 1 – Schedule 3, either party may refer the matter to FWA which may first attempt to resolve the dispute including by mediation, conciliation, expressing an opinion or making a recommendation. If FWA is unable to resolve the dispute at the first stage, it may then:

    (A)    arbitrate the dispute; and

    (B)    make a determination that is binding on the parties.

(vii)    A decision that FWA makes when arbitrating a dispute is a decision for the purpose of Division 3 of Part 5.1 of the Fair Work Act 2009. Therefore, an appeal may be made against the decision.

(viii)    The parties agree to be bound by a decision made by FWA in accordance with this clause.”

The acronym “PDP” refers to the project disputes panel established under the Agreement.

THE LEGISLATION

33    The CEPU seeks relief under the Fair Work Act 2009 (Cth) (“the Act”).

34    Section 50 of the Act creates a civil remedy provision which stipulates that a person must not contravene a term of an enterprise agreement. By s 539(2) an employee organisation may apply for orders relating to the contravention or proposed contravention of an enterprise agreement. The application may be made in this Court. The maximum penalty which may be imposed on an individual for a contravention of s 50 is $6,600 and, on a body corporate, $33,000.

35    Section 540(2) of the Act provides that:

“(2)    An employee organisation … may apply for an order under this Division, in relation to a contravention or proposed contravention of a civil remedy provision in relation to an employee, only if:

(a)    the employee is affected by the contravention, or will be affected by the proposed contravention; and

(b)    the organisation … is entitled to represent the industrial interests of the employee.”

36    Among the orders which this Court is empowered to make is the granting of an injunction to prevent, stop or remedy the effects of a contravention of a civil remedy provision: see s 545(2). By s 546(1) the Court may “order a person to pay a pecuniary penalty that the court considers is appropriate if the court is satisfied that the person has contravened a civil remedy provision.” The Court may order that the pecuniary penalty (or part of it) be paid to various entities including an employee organisation: see s 546(3).

37    Section 739(5) of the Act should also be noted. It deals with the powers of Fair Work Australia when the parties to an enterprise agreement have agreed to a term, such as Clause 15.1(b)(vi), which empowers Fair Work Australia to resolve a dispute arising between them by arbitration. Section 739(5) stipulates that, in exercising such an arbitral power, Fair Work Australia “must not make a decision that is inconsistent with this Act, or a fair work instrument that applies to the parties.” A “fair work instrument” is defined, in s 12 to include an enterprise agreement.

SUBMISSIONS

38    The CEPU submitted that, once it had advised the respondents that a dispute existed in relation to the decision to vary the rostering arrangements, Clause 15.1 of the Agreement was engaged and both parties were required to comply with its terms. The respondents’ unwillingness to do so constituted contraventions or proposed contraventions of the Agreement.

39    The principal contention of the respondents was that they had an “unqualified right” to make and implement their decision to terminate the 4 on 4 off roster and revert to the 56 hour roster without first having to comply with the dispute settling procedure. In particular, they contended that the procedure had no application in the present circumstances and that there was, as a result, no obligation on them to maintain the status quo until all the prescribed steps had been taken.

40    The respondents accepted that the language of Clause 15.1(a)(i) was broad but submitted that the words were “still predicated on the ‘application or interpretation of the agreement’”. As a result, so it was submitted:

“… a dispute cannot logically be to the effect:

(a)    something agreed in the agreement is not agreed;

(b)    some right in the agreement cannot apply or must be qualified;

(c)    some amorphous test of merit or fairness gets applied to a right any party has under the agreement.”

41    The respondents also pointed to the provisions of s 739(5) of the Act which qualifies the arbitral power conferred on Fair Work Australia by Clause 15.1(b)(vi) of the Agreement.

CONSIDERATION

42    The respondents’ contentions fall to be tested by reference to the language employed by the parties in Clause 15(1) of their Agreement, understood in an industrial context.

43    In the well known passage in his judgment in Kucks v CSR Limited (1996) 66 IR 182 at 184 Madgwick J observed that:

“It is trite that narrow or pedantic approaches to the interpretation of an award are misplaced. The search is for the meaning intended by the framer(s) of the document, bearing in mind that such framer(s) were likely of a practical bent of mind; they may well have been more concerned with expressing an intention in ways likely to have been understood in the context of the relevant industry and industrial relations environment than with legal niceties or jargon. Thus, for example, it is justifiable to read the award to give effect to its evident purposes, having regard to such context, despite mere inconsistencies or infelicities of expression which might tend to some other reading. And meanings which avoid inconvenience or injustice may reasonably be strained for. For reasons such as these, expressions which have been held in the case of other instruments to have been used to mean particular things may sensibly and properly be held to mean something else in the document at hand.”

This passage was quoted with approval by both Kirby and Callinan JJ in Amcor Limited v Construction, Forestry, Mining and Energy Union (2005) 222 CLR 241 at 271 and 282-3.

44    In Amcor Kirby J, speaking of a certified agreement, said (at 270) that:

“The nature of the document, the manner of its expression, the context in which it operated and the industrial purpose it served combine to suggest that the construction to be given to cl 55.1.1 should not be a strict one but one that contributes to a sensible industrial outcome such as should be attributed to the parties who negotiated and executed the Agreement.”

The need to have regard to the language of an agreement “understood in the light of its industrial context and purpose” was also emphasised by Gleeson CJ and McHugh J (at 246) and by Gummow, Hayne and Heydon JJ (at 253).

45    These guides to construction were recently applied by a Full Court of this Court in Shop Distributive and Allied Employees’ Association v Woolworths SA Pty Ltd [2011] FCAFC 67 at [14]-[18].

46    The construction issues in the present case do not turn on jargon or industrial usage. It is, however, necessary to have regard to the context in which Clause 15.1 is to be found and to the purposes which it and the Agreement as a whole are designed to serve. It is also necessary to take into account the fact that the agreement is a greenfields agreement with multi union parties which is designed to regulate the terms and conditions of hundreds of workers on a unique project located in a remote part of Victoria.

47    Attention must, however, first be directed to the language of Clause 15.1. The Clause is plainly intended to have operation in a wide range of circumstances. It prescribes procedures which are designed (relevantly) “to settle disputes and grievances relating to any and all matters arising out of or in connection with the application or interpretation of this Agreement …”: see Clause 15.1(a)(i). The Agreement contemplates that during its life, disputes and grievances will arise between the parties which will need to be resolved. Not all disputes and grievances which might conceivably occur on the project will be subject to the dispute settling procedure. The operation of Clause 15.1 will only be attracted if they can be linked to “the application or interpretation” of the Agreement.

48    The draftsman has employed very broad language in forging the link between relevant disputes and grievances and the Agreement. The link will be established if the disputes and grievances can be said to relate to “any and all matters arising out of or in connection with” the application or interpretation of the Agreement.

49    All parties accepted that the phrases “relating to”, “arising out of” and “in connection with” were of wide import. They were correct to do so.

50    The phrase “in relation to” was said by Mason J in Fountain v Alexander (1982) 150 CLR 615 at 629 to be “an expression of wide and general import, [which] should not be read down in the absence of some compelling reason for so doing.” See also IBM Australia Limited v National Distribution Services Limited (1991) 22 NSWLR 466 at 483 (per Clarke JA). In Timic v Hammock [2001] FCA 74 at [9], Sundberg J acknowledged the expansive effect of the words “or relating to” when he said that they were apt to pick up “issues beyond the agreement itself”.

51    The phrase “arising out of” implies “a sense of consequence”: see Government Insurance Office of New South Wales v R J Green and Lloyd Pty Ltd (1966) 114 CLR 437 at 447 (per Windeyer J). It refers to a less immediate association than a direct causal relationship between the dispute or grievance on the one hand and the application and interpretation of the Agreement on the other.

52    The phrase “in connection with” is apt to broaden the required nexus even further. As Giles CJ Comm D observed in Elkateb v Lawindi (1997) 42 NSWLR 396 at 402:

“The phrase ‘in connection with’ has on many occasions been said to be of considerable width, satisfied by a link or an association (Commissioner for Superannuation v Miller (1985) 8 FCR 153) or a relationship (Our Town FM Pty Ltd v Australian Broadcasting Tribunal [No 1] (1987) 16 FCR 465; Drayton v Martin (1996) 137 ALR 145) and summed-up in the phrase ‘having to do with’: see the same cases and Nanaimo Community Hotel Ltds v Board of Referees [1945] 3 DLR 225. As with the phrase ‘in relation to’, no doubt the context or the purpose may require that the link, association or relationship be of a particular kind, sometimes described as an appropriate or relevant relationship (Perlman v Perlman (1984) 155 CLR 474; R v Ross-Jones; Ex parte Green (1984) 156 CLR 185 and O’Grady v Northern Queensland Co Ltd (1989) 169 CLR 356), but it should not be read down unless there be compelling reason to do so (Fountain v Alexander (1982) 150 CLR 615).”

53    The central construction dispute between the parties centred on the word “application”. The respondents submitted that their decision to exercise the discretionary power conferred on them by Clause 1.3 of Part 2 of Schedule 1A to terminate the operation of the 4 on 4 off roster was not an application of the Agreement within the meaning of Clause 15.1(a)(i).

54    They relied on part of the definition of the word “application” in the Macquarie Dictionary (Fifth Edition). That part was:

“application noun 1. The act of putting to a special use or purpose: the application of common sense to a problem. 2. the quality of being useable for a particular purpose or in a special way; relevance: this has no application to the case. 3. use (of a word, phrase, etc.) with assignation of a particular meaning or reference;…”

55    They contended for a narrow construction of “application” which was “more akin to its neighbour ‘interpretation’”. Relying on the second listed meaning, they submitted that a dispute over whether the Agreement applied in particular circumstances would be a dispute over its application. Such a dispute could not arise in such cases such as the present where there could be no doubt that the power could be exercised when and if the respondents so determined. They stressed that, while the relevant power was discretionary in nature it was unfettered by any preconditions or qualifications. In this respect Clause 1.3 was contrasted with provisions which contained limitations or restrictions. An example, to which attention was drawn, was Clause 6.1 in Part 1 which contemplated that the respondents can engage contractors to do work covered by the Agreement but requires that “they shall only use contractors who apply wages and conditions that are no less favourable to employees and contractors than the wages and conditions provided for in this Agreement …” If the respondents were to engage a contractor on what were alleged by employees to be less favourable terms than those prescribed by the Agreement a dispute or grievance could arise which would fall to be resolved under Clause 15.1.

56    The respondents also relied on the third listed meaning to submit that a dispute over whether the terms of the Agreement permitted the respondents to vary working arrangements would constitute a dispute over the application of the Agreement.

57    They submitted that a wider construction which equated “application” with “use” or “operation” would enable a disgruntled employee to forestall the respondents’ exercise of any unfettered power provided for in the agreement by invoking Clause 15.1.

58    The CEPU relied on another usage to be found in the Macquarie Dictionary. The fifth listed meaning of “application” in that dictionary is “the act of applying”. The respondents had determined to exercise the power conferred on them by Clause 1.3 and had announced their intention to do so. In this sense they had applied the Agreement.

59    Another meaning of the word “application” is to be found in the Oxford English Dictionary. This meaning is “bringing a rule into use, putting something to practical use.”

60    While it is necessary to exercise caution in resorting to dictionary definitions (see Australian Municipal, Administrative, Clerical and Services Union v Treasurer of the Commonwealth (1998) 82 FCR 175 at 181) they do serve to establish that the word “application” is used in many different senses, some of which may be understood as supporting a broad and some a narrower construction of the word.

61    Both parties sought to bolster their construction arguments by reference to certain of the objectives and purposes of the Agreement. The respondents emphasised the size of the project, its importance for the State, the completion deadline and the financial implications of a failure by them to meet that deadline. A disputes settlement procedure which required them to put much needed but unpopular changes on hold whilst the procedure was worked through supported, they contended, a restricted reading of the word “application”.

62    The CEPU acknowledged the importance of all of these considerations but submitted that they only served to emphasise the need to ensure an harmonious industrial relations regime during the life of the project. Given the inevitability of disputes and grievances arising between such a large workforce and the employers it was important that processes should be in place to ensure the speedy resolution of such disputes and grievances. The processes prescribed by Clause 15.1 were not necessarily time consuming and could, with good will on both sides, achieve a resolution of any dispute within a relatively short time.

63    Resort to such broader considerations has been of limited assistance to me in resolving the conflicting construction arguments. In the end I have concluded that the issue is to be resolved, principally, by reference to the language employed by the parties in framing their agreement. I consider that language to be clear.

64    In my view the ordinary and natural meaning of the word “application” extends to a decision by the respondents, made under Clause 1.3, to terminate the operation of the 4 on 4 off rostering arrangement. In doing so they have made use of or applied the provision to bring about a change for which the Agreement provides.

65    I am reinforced in adopting this broader construction of the word “application” by the provisions of Clause 17.2 of the Agreement. It provides:

“TD, at its sole discretion, may withdraw this [right of entry] invitation by giving a union party written notice to this effect. Withdrawal of this invitation by TD is not subject to any dispute resolution processes in this Agreement.”

The first sentence of this sub-clause is even more explicit than Clause 1.3 in conferring an unqualified discretionary power on the respondents. If a narrow construction of the word “application” of the kind contended for by the respondents had been intended there would have been no need for the express exclusion of the operation of Clause 15.1 which is to be found in the second sentence.

66    The respondents have decided that the 4 on 4 off rostering arrangement which is presently being worked by many electricians should be terminated save for some few exceptions. It has also announced that a consequence of the termination of the arrangement will be that the employees will commence to work a 56 hour roster and that about 160 of them will be rendered redundant. The respondents have thereby foreshadowed that they propose to terminate the employment of those employees. The process whereby these redundancies will be effected will be governed, in part at least, by the Agreement.

67    The CPEU, acting through Mr Gray and on behalf of its members employed on the project, has advised the respondents that the employees are aggrieved by the decision to change the rostering arrangements and to enforce 160 redundancies. The terms in which the notice of dispute was given in his letter of 18 August 2011, whilst lacking precision, made it clear enough that the Union members wished to take the first step described in Clause 15.1(b) at the earliest possible opportunity. The matters which were the subject of dispute were identified in the letter. They were the two matters just mentioned and a “lack of meaningful consultation” about the “manner in which the matters have and will be implemented.” The alleged shortcomings of the consultation process were not detailed. No mention was made of this third grievance in the CEPU’s originating application or during argument. It may be put to one side.

68    When the CEPU so notified the respondents disputes arose which, in my opinion, attracted the operation of Clause 15.1 of the Agreement. The respondents’ decision to change the rostering arrangements was made under a power to do so which was conferred by the Agreement. It involved an application of the Agreement. Furthermore, the CEPU has expressed opposition to electricians being made redundant as a result of the change to roster arrangements.

69    These concerns fit comfortably within the concept of disputes and grievances. The dispute concerning the changes to rostering arrangements arose directly out of the application by the respondents of Clause 1.3 of the Agreement. It related to such application and could also be said to have arisen out of or in connection with it. The decision to enforce 160 redundancies was a consequence of the decision to change the rostering arrangements. It had a less direct connection with the application of Clause 1.3. Nonetheless it can be said to have arisen out of and been connected with that application.

70    I accept the respondents’ submissions that Clause 1.3 confers an unfettered discretion on them and that the right there conferred may not be abrogated against their will even if the dispute ultimately falls to be dealt with by arbitration. These considerations do not, however, compel the conclusions that Clause 15.1 is not intended to and does not operate in circumstances such as the present or that the processes mandated by Clause 15.1(b) lack practical utility. At each stage prior to a determination being made by the PDP there is scope for the respondents, should they be so minded, to reconsider the decision which has given rise to the disputes. If they do so they might choose to rescind it or to modify the process by which the decision is to be implemented. This could involve, for example, delaying or staggering the introduction of the roster changes or allowing more time for employees who are rendered redundant by the changes to make alternative domestic arrangements or obtain alternative employment. The respondents may be moved to take such ameliorative action, if in the course of negotiations, conciliation or mediation they become aware of matters of which they were previously unaware. Ultimately, however, they may not be so persuaded and, if so, they will be entitled, consistently with the Agreement, to implement their decision to exercise the power conferred on them by Clause 1.3 and to enforce redundancies subject to the requirements of the Agreement.

71    Once a dispute or grievance arises which attracts the operation of Clause 15.1 a number of consequences follow. The first is that each of the steps stipulated in Clause 15.1(b) must, potentially, be taken. So much is clear from the terms of Clause 15.1(a)(ii) which mandates that compliance with the procedures “is a fundamental requirement that [must] be observed in its entirety.”

72    Disputes and grievances of many different kinds will fall to be resolved under Clause 15.1 of the Agreement. They will range from issues affecting individual employees to those which may have implications for the entire workforce on the project. It may be that disputes involving a few employees on the one hand and those involving a large section of the workforce on the other might lend themselves to different dispute settling procedures. This view did not commend itself to the draftsman of Clause 15.1. Each of the five steps prescribed by Clause 15.1(b) must, if need be, be followed regardless of the nature of the grievance or dispute and whether a single employee or hundreds of employees are involved. This is made clear, not only by the provisions of Clause 15.1(a)(ii) but also by the reference, in Clause 15.1(a)(iii), to the need to follow the prescribed steps and the requirement, in Clause 15.1(a)(iv) that sensible time limits are to be allowed “for all steps of the dispute and grievances procedure to be finalised”. I say “if need be” because it is implicit in Clause 15.1(b) that it is not necessary for the parties to exhaust the process if the dispute is settled at one of the steps preceding arbitral determination.

73    The second consequence of the invocation of the disputes resolution procedures, which is stipulated in Clause 15.1(a)(iii), is that a stand fast arrangement will apply: the workers will continue work as usual and the status quo which applied on the project immediately prior to the dispute arising will be maintained until the dispute is resolved at one of the steps provided for in Clause 15.1(b). In the present circumstances this requires the respondent to retain the 4 on 4 off roster for those electricians presently working that roster until the disputes resolution procedure had led to a resolution of the dispute either by agreement or arbitration.

74    It follows from what I have said that the CEPU has notified the respondents of a dispute or grievance which attracts the operation of Clause 15.1 of the Agreement. The consequences are that they are required to participate in the settlement procedures prescribed by Clause 15.1(b) and, until the disputes and grievances identified by the CEPU have been resolved, they must not implement the new rostering arrangements. A further consequence will be that electrical employees who are working a 4 on 4 off roster may not be rendered redundant on the ground that the proposed rostering changes necessitate the respondents so acting.

MATTERS FOR FURTHER CONSIDERATION

75    I turn next to the question of whether, in the circumstances earlier outlined, it can be said that the respondents have proposed to contravene or contravened a term of the Agreement.

76    As already recorded, the existence of disputes or grievances were notified by the CEPU by letter on 18 August 2011. On the following day the respondents’ solicitors advised the CEPU that they did not consider that the decisions announced on 17 August 2011 were subject to the dispute resolution procedures contained in Clause 15.1. They explained the legal basis on which the respondents’ position was founded. This is a position which they have maintained consistently during the short period which has passed since 19 August 2011. The proceeding has been before the Court throughout this period. The respondents have facilitated the conduct of a speedy hearing so that a ruling on the proper construction of the Agreement could be obtained from the Court. In the meantime the respondents have voluntarily agreed not to implement the new rosters or terminate any electrician’s employment on redundancy grounds. They have also, through their representatives, engaged in discussions with Union officials and electrical employees about the matters raised in the memorandum, albeit not under the rubric of Clause 15.1.

77    Once the parties have had the opportunity of reading these reasons I will hear them as to what, if any, orders should be made having regard to the findings which I have made. Before making any injunctive orders I would need to be persuaded that the respondents have proposed or propose to contravene a term of the Agreement or have done so. It is, at least, arguable that they have, thus far, done no more than raise bona fide legal issues relating to the construction of the Agreement. Whether or not a proposed contravention or contravention has already occurred the legal position will have altered upon publication of these reasons. Should the respondents be prepared to give undertakings to abide by the disputes settling procedures prescribed by Clause 15.1(b) I would need to consider whether injunctive relief would be an appropriate remedy.

78    It was agreed that there should be a separate and later consideration of matters relating to whether the respondents are liable to the imposition of a pecuniary penalty and, if so, what penalties would be appropriate. Issues which will then arise include whether the respondents have proposed to contravene or contravened the Agreement and whether a pecuniary penalty may be imposed if all that has occurred is that the respondents have proposed to contravene a term of the Agreement. Consideration will also need to be given to the implications of the conduct of Mr Gray and members of the CEPU at the site on 17 and 18 August 2011.

79    Directions will also be required as to the filing and serving of any material and submissions relating to the CEPU’s applications for the imposition of pecuniary penalties.

Associate:

Dated:     31 August 2011