FEDERAL COURT OF AUSTRALIA

Construction, Forestry, Mining and Energy Union v BHP Coal Pty Ltd [2011] FCA 1294

THE COURT ORDERS THAT:

1.    The question as identified below is to be heard as a separate question in the civil penalty proceedings. The question is as follows:

(a)    Whether on the true construction of the BHP Coal Pty Ltd Workplace Agreement 2007 the respondent is permitted by clause 17.3 of that agreement to conduct a trial of changed starting and finishing times and after that trial to implement those changes; or

(b)    Whether, having regard to the terms of clause 5.5 of Schedule F to that agreement, the starting and finishing times can only be changed by agreement?

2.    The question separately identified should be answered in this way:

(a)    On the true construction of the agreement the respondent is not permitted by clause 17.3 of that agreement to conduct a trial of changed starting and finishing times and after that trial to implement those changes.

(b)    Were the respondent to agree, pursuant to clause 17.1.2, with a group of “affected employees”, as defined pursuant to clause 17.1.2, changed starting and finishing times, no need for any further agreement would be required. Clause 17.1.2 would, per force of clause 4.5 of the agreement, prevail over clause 5.5 of Schedule F to that agreement.

3.    The proceeding is otherwise adjourned to a date to be fixed.

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

REASONS FOR JUDGMENT

1    The Construction Forestry Mining and Energy Union (the Union) has instituted civil proceedings under the Fair Work Act 2009 (Cth) against the respondent, BHP Coal Pty Ltd, (BHP). At the heart of the proceeding lies a question of construction with respect to the relevant industrial instrument, namely the BHP Coal Pty Ltd Workplace Agreement 2007 (the Agreement). Given the centrality of the construction question, a course which commended itself to the parties at the commencement of the hearing today was the determination, as a separate question, of a question with respect to the construction of that agreement.

2    Determination of separate questions can be fraught with the prospect of elongating rather than truncating the hearing and determination of a matter. In this case, having regard to the submissions of the parties with respect to the desirability of the determination of the separate question and the prospect that it will, if determined one way or another, effectively dispose of the whole of the proceeding it seemed to me in the interests of justice that a separate question be determined. As identified by the parties, that separate question became this:

Whether on the true construction of the Agreement the respondent is permitted by clause 17.3 of that Agreement to conduct a trial of changed starting and finishing times, and after that trial, to implement those changes; or

Whether, having regard to the terms of clause 5.5 of Schedule F to that Agreement, the starting and finishing times can only be changed by agreement?

3    As will become apparent in the course of these reasons for judgment, while the alternatives posited in that separate question reflect the positions respectively taken by the Union and BHP, there is a yet further alternative which lies between the positions adopted by the parties. For convenience, I extract the relevant provisions of the Agreement at the conclusion of these reasons for judgment.

4    It is first necessary to give some account of the background facts which have given rise to the controversy concerning the true construction of the Agreement. Those facts are for all practical purposes relating to the construction question at least, agreed between the parties having regard to the agreement bundle of documents and to the admissions on the pleadings and other admissions made, particularly in relation to the defence, in open court by the Union.

5    BHP wishes to implement at its Crinum mine in central Queensland, what is known as a “hot seat changeover” roster arrangement for what are known as development employees. The means by which BHP wishes to effect this is by changing the starting and finishing times for the night shift at the mine for those employees from 7pm and 7am to 6pm and 6am respectively. It also wishes to leave the day shift starting and finishing times as 7am and 7am respectively. As can be seen, the effect of that change in respect of the night shift is to allow for a changeover period to occur whilst the day shift is still on duty, hence the term “hot seat changeover”.

6    It is common ground between the parties that the affected employees have not agreed to this change. It is also a fact that the workforce as a whole at the Crinum mine has not agreed to this change.

7    BHP’s initiative to implement such a change dates back to May this year. The proposal to effect such a change was raised by BHP’s representatives at a Local Consultative Committee (LCC) meeting held on 13 May 2011. There was further discussion at a later LCC meeting on 5 August 2011 on the subject of a changing in shift times. It is fair to say that, while the precise times to allow an overlap have changed over time, BHP has, since May, wished to implement some form of hot seat changeover and, as yet, has not been able to secure agreement either from affected employees, or more generally, the workforce at the Crinum mine.

8    Whether or not such agreement, be it of the workforce generally or of a more limited class, is necessary depends upon the true construction of the Agreement.

9    Some general principles have been developed over time in relation to the construction of industrial instruments. I referred to these in my judgment in Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union v QR Ltd (2010) 268 ALR 514 at [39]. That particular discussion of principle was not affected by the subsequent appeal to the Full Court: see QR Ltd v Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (2010) 204 IR 142. It is helpful in relation to principle, particularly to recall the following passage from Kucks v CSR Ltd (1996) 66 IR 182 at 184 (Kucks Case), where Madgwick J stated:

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 more 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.

10    Later, in Australasian Meat Industry Employees Union v Coles Supermarkets Australia Pty Ltd (1998) 80 IR 208 at 212, Northrop J considered that the principle stated by Madgwick J in Kucks Case had even stronger application when dealing with certified agreements. I approach the construction of this Agreement guided by the same considerations as moved Northrop J to express that particular agreement with what had been said by Madgwick J in Kucks Case.

11    The Agreement takes the form of what is described within it as the “central agreement” to which is attached a number of schedules. These schedules running A through to and including G, are specific to particular mines. Schedule F contains provisions specific to the Crinum Mine.

12    As was aptly observed by counsel in the course of submissions on the hearing, it is evident that the schedules have a local flavour, not only in title but also in form. By that I mean that it is evident from the schedules that particular type of drafting unique to those responsible for the drawing each particular schedule has been employed. I understand that the Agreement was the result of central agreement terms being agreed as a result of particular negotiations, with the schedules coming as a result of more site specific bargaining. For all that, the end result is but one agreement. The view I take, which I will regard as consistent with Kucks Case, is that I should endeavour to reach a construction of the Agreement which is harmonious as between the central agreement portion of it and the schedules, insofar as the language of the Agreement reasonably admits of such a construction.

13    The Agreement itself provides a means of resolving any inconsistency as between the central agreement portion and the schedules in the event that, making due allowance for all of the principles which attend the construction of an industrial instrument, an inconsistency nonetheless results. Clause 4.5 informs firstly that the employees’ terms and conditions are governed by the central agreement and the relevant mine schedule. It then goes on to specify that the central agreement will prevail over any inconsistency between it and the schedules appended to it.

14    Clause 17 of the central agreement is expressly directed to the subject of hours of work. A noteworthy feature of the sub-clauses within clause 17 is the differentiation as between ordinary hours of work (clause 17.1), number and spread of shifts (clause 17.2), and, materially, change to roster arrangements (clause 17.3).

15    Clause 17.3 provides that changes to roster arrangements which are not agreed after genuine negotiations may be trialled in accordance with the continuous improvement provision provided that the company does not introduce an unreasonable number of new arrangements for trial. The reference in the first sentence of clause 17.3 to the continuous improvement provision is a reference to clause 16 of the central agreement.

16    Read in isolation, it is by no means impossible to construe clause 17.3 as admitting of application to starting and finishing times of workers. Why that is so emerges from the ordinary meaning of the word “roster”. As defined in the New Shorter Oxford Dictionary “Roster” materially means “a list or plan showing the rotation of duties and leave for individuals or groups in any organisation originally a military force”. The definition of the word in the Macquarie Dictionary is not materially different, namely “a list of persons or groups with their turns or periods of duty”. In the industrial instrument context in which it appeared in Royal Melbourne Institute of Technology v National Tertiary Education Industry Union (2011) 203 IR 294 at [89] (Royal Melbourne Institute Case), Lander J was of the opinion that the word bore just that ordinary meaning.

17    It is necessary, though to remind oneself of what Madgwick J observed in Kucks Case as to how words may have different meanings depending on the context in which they are used in particular industrial instruments. That “roster” bore its ordinary meaning in the circumstances of the Royal Melbourne Institute Case is by no means determinative of whether it carries with it in all of its uses in the Agreement here the ordinary meaning of the word. What is clear is that there is no special industrial meaning to give to the word. There was no evidence of any such meaning offered by either party.

18    The ordinary meaning of the word “roster” is apt to embrace starting and finishing times. One feature of an arrangement which lists terms or periods of duty is the delineation of when a period of duty starts and when a period of duty finishes. That is achieved not just by specifying a particular day, week and month, but also by a time to start and a time to finish on a particular day.

19    Of course, to read clause 17.3 in isolation is precisely what one must not do in relation to the construction of this agreement. So to do would offend basic principle. If read in conjunction with clause 16, as on its face it anticipates, clause 17.3 would allow BHP to implement, unilaterally, a change to starting and finishing times, subject only to the provisos which appear within clause 16. Of these, the proviso which featured in submissions particularly was clause 16.1.9, in which the intention not to reduce award standards or the terms and conditions of employment specified in the agreement is stated with respect to the continuous employment provision. That potential for managerial unilateralism, albeit after a trial period, gives pause for thought about whether clause 17.3 does indeed, as BHP submitted, admit of an ability to change starting and finishing times.

20    Why that is so is not just the product of provision in clause 5.5 of schedule F in respect of starting and finishing times, but, more particularly, the presence of clause 17.1.2 in the central agreement itself. That clause provides that the starting and finishing times of the ordinary working hours of any shift will be worked between those hours that are agreed between the company and the majority of the “affected employees”. The clause then goes on to define “affected employees” to mean those employees in the work areas, (eg dragline, field maintenance etc), that are directly impacted by the alteration to their starting and finishing times.

21    A noteworthy feature of clause 17.1.2 is that, unlike clause 17.3 and also unlike clause 17.1.3, it does not incorporate by reference the continuous improvement provision. In other words, when one reads the Agreement as a whole, it is apparent that, where the parties have conceded to BHP an ability to act unilaterally, that ability is stated either expressly, via for example clause 17.2, (may be varied by the company), or via the incorporation of the mechanism set out in the continuous improvement provision. That to me, is a compelling reason why it is that starting and finishing times ought to be regarded as carved out of the operation and effect of clause 17.3.

22    Were there to be an agreement with the “affected employees” as defined, that would necessarily override, per force of clause 4.5 of the central agreement, the site specific starting and finishing times which are specified in clause 5.5.1 of Schedule F. It is also common ground in this case that there is no specific agreement with any group whom one might term, for the purposes of clause 17.1.2, “affected employees”. That being so, the position as stated in clause 5.5.1 of Schedule F is the position which presently prevails under this agreement.

23    That does not mean that BHP is unable to seek to reach agreement as to change of start and finishing times with a particular group of employees. It does not need the agreement of all employees to affect a change of start and finishing times. In the absence of that, though, there is no inconsistency between the central agreement and clause 5.5. That is because clause 17.3, on the true construction of the Agreement, has no work to do at all in relation to starting and finishing times.

24    What that means, in turn is that, in the absence of any agreement with a particular group, starting and finishing times are governed by clause 5.5, and in particular, clause 5.5.1 of Schedule F. Clause 5.5.2 of schedule F requires that there be an ongoing review within the of starting and finishing time arrangements. However, it is both the letter and obvious intention of that particular subclause that, failing agreement reached as a result of that ongoing review within that consultative committee, the express provision in 5.5.1 applies to the whole of the workforce. As I have said, in the event that a particular agreement with a particular group as to starting and finishing times were to be struck under clause 17.1.2, that would prevail, but only then.

25    There is no inconsistency on the construction which I have adopted as between clause 17.3 and either clause 17.1.2 or clause 5.5 in Schedule F.

26    I was also taken, in the course of submissions by each of the parties, to other schedules. It is evident from these that differing approaches have been taken in respect of particular minds as to whether particular start or finishing times should be expressly stated. In some cases, they are, in other cases, they are not. What is clear from all of the schedules is that none of them can affect the position apparent on the face of the central agreement itself, which is that there is what I have termed a “carve-out” from what would otherwise be the embrace of clause 17.3, having regard to the ordinary meaning of the word “roster”, of starting and finishing times by virtue of clause 17.1.2.

27    It follows from this analysis of the agreement, that the question separately identified should be answered in this way: On the true construction of the Agreement the respondent is not permitted by clause 17.3 of that Agreement to conduct a trial of changed starting and finishing times and after that trial to implement those changes. Were the respondent to agree, pursuant to clause 17.1.2, with a group of affected employees, as defined pursuant to clause 17.1.2, changed starting and finishing times, no need for any further agreement would be required. Clause 17.1.2 would, per force of clause 4.5 of the Agreement, prevail over clause 5.5 of Schedule F to that Agreement.

28    It is unnecessary to determine, for the purpose of giving that answer, whether the change is one which would, in terms of clause 16.1.9, reduce standards or the terms and conditions of employment specified in this agreement.

29     The question is answered accordingly.

Associate:

Dated:    14 November 2011

SCHEDULE OF CLAUSES

4.    Incidence and Application

4.5    Employees’ terms and conditions are governed by this Central Agreement and the relevant Mine Schedule. This Central Agreement will prevail over any inconsistency between it and the Schedules appended to it.

16.    Continuous Improvement Provision

16.1    Where the Company proposes a change to work practices and/or arrangements, the following will occur:

16.1.1    The affected employees and, if they request, their representatives will be notified of the proposal, in writing, by the mine management, which will include the business reasons supporting the proposals, as well as the necessary duration for gaining the required evidence for evaluating the success of the trial. A genuine attempt will be made by all parties to reach an agreement.

16.1.2    If the majority of affected employees agree, the proposal will be implemented.

16.1.3    If there is no agreement, the Company may elect not to proceed with the proposal.

16.1.4    If the Company elects to proceed, a trial may be implemented for a maximum period of up to six (6) months depending on the nature of the proposal.

16.1.5    At the end of the trial period either of the following may occur: either

(a)    The Company decides not to proceed with the proposal;

(b)    There will be full implementation.

16.1.6    If once the Company has decided to implement a trial, the affected employees are of the view that the trial is having/may have an effect on them, that is harsh, unreasonable or unjust, the affected employees or if requested, their representatives, may progress the dispute to the AIRC in accordance with the final step of the Disputes Settlement Procedure (“DSP”) in Clause 32 to seek to have the trial cease or amended or not proceed because of the existence of such an effect. Each party to the agreement agrees to accept the outcome of the DSP.

This provision is not to be used to preclude a trial from proceeding or continuing merely because the trial represents a change to previous circumstances, may involve a reduction in employee earnings, or may be deemed to constitute a perceived inconvenience to employees. This provision is only to be used to argue that the effect of any trial is so unreasonable as to be contrary to the spirit of continuous improvement.

16.1.7    Notwithstanding 16.1.6 above, during the last four (4) weeks of any trial, an effected employee or if requested, their representatives, may refer any disputed issue connected to the trial to the AIRC through the final step of the DSP. Each party to the agreement agrees to accept the outcome of the DSP.

16.1.8    This provision will not be used to permit a proposal to be trialled which would involve a breach of occupational health and safety regulations.

16.1.9    It is not the intention of this provision to reduce award standards or the terms and conditions of employment specified in this Agreement.

16.1.10    The term “business reasons” as referred to in 16.1.1 means an overview of the key financial and/or efficiency benefits that will accrue to the mine from the proposal. It does not mean a detailed business case.

17.    Hours of Work

17.1    Ordinary Hours of Work

17.1.1    The ordinary hours of work will be an average of thirty five (35) hours per week.

17.1.2    The starting and finishing times of the ordinary working hours of any shift will be worked between those hours that are agreed between the Company and the majority of the affected employees. “Affected employees” means those employees in the work areas (e.g. Dragline, Field Maintenance etc) that are directly impacted by the alteration to their starting and finishing times.

17.1.3    The ordinary working hours on any shift will be no less than six (6) ordinary hours and not more than twelve (12) ordinary hours provided that with appropriate notification the Company may determine the shift length up to ten (10) ordinary hours. Shifts longer than ten (10) hours (whether or not the shift contains overtime) can only be introduced with the agreement of the majority of the affected employees required to work the shifts or trialled in accordance with the Continuous Improvement Provision.

17.2    Number And Spread of Shifts

The number and spread of ordinary shifts may be varied by the Company.

17.3    Change To Roster Arrangements

Changes to roster arrangements which are not agreed after genuine negotiations may be trialled in accordance with the continuous improvement provision. Provided that the Company will not introduce an unreasonable number of new arrangements for trial.

Schedule “F”

Clause 5.5

5.5    Start and Finish Times

5.5.1    The shift start and finishing times incorporate the following provisions:

a)    7.00am/pm – Ready for duty

b)    7.00pm/am – Depart from the designated crib room.

c)    Payment made for 12.5hr shifts

d)    All reasonable steps will be taken to make a Toyota available for shift change

5.5.2    There shall be an ongoing review within the LCC of Start and Finish time arrangements. Failing any agreement, the abovementioned clause will apply.