Mount Arthur North Consent Award 2001application by Labor Council of NSW for variation re agreed point of hire clause [2003] NSWIRComm 89 (1 April 2003)

Last Updated: 22 May 2003

NEW SOUTH WALES INDUSTRIAL RELATIONS COMMISSION

CITATION : Mount Arthur North Consent Award 2001Application by Labor Council of NSW for variation re agreed point of hire clause [2003] NSWIRComm 89

FILE NUMBER(S): IRC 1286

HEARING DATE(S): 19/03/2003

DECISION DATE: 01/04/2003

PARTIES:

Labor Council of New South Wales

Australian Industry Group, New South Wales Branch

JUDGMENT OF: Harrison DP

LEGAL REPRESENTATIVES

APPLICANT

Mr R Alexander for Labor Council of NSW and affiliated unions

Mr G Mohan, Automotive, Foods, Metals, Engineering, Printing & Kindred Industries Union, NSW Branch

RESPONDENT

Ms E Morson

Australian Industry Group, NSW Branch

CASES CITED: Electrical Trades Union of Australia v Queensland Electricity Commission and Ors (1986) 16 IR 292

Transport Workers' Union of Australia, New South Wales Branch & CSR Limited [2000] NSWIRComm 1008

Smith’s Snackfoods Company Limited (South Australia) Award [2001] SAIRComm 50

Construction, Forestry, Mining and Energy Union (New South Wales Branch) v Shell [1998] NSWIRComm 275

LEGISLATION CITED: Industrial Relations Act 1996

Workplace Relations Act 1996 (Cwth)

JUDGMENT:

- 12 -

INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES

CORAM: HARRISON DP

Tuesday, 1 April 2003

Matter No IRC 1286 of 2003

MOUNT ARTHUR NORTH CONSENT AWARD 2001

Application by the Labor Council of NSW for variation re agreed point of hire clause.

DECISION

[2003] NSWIRComm 89

1    This is an application by the Labor Council of NSW seeking variation of the Mount Arthur North Consent Award 2001 336 IG 690 (‘the Project Award’) by insertion of provisions for the establishment of a designated point of hire and associated conditions of employment where the point of hire is distant from the site so as to require mobilisation of employees.

2    The variation sought is in the following terms:

The award is varied:

1. By inserting a new clause 30 as follows;

30. POINT OF HIRE

30 Agreed Point of Hire

30.1.1 Each employee shall, prior to commencement of employment at Mount Arthur North, have an agreed point of hire.

30.1.2 This point of hire shall be:

The capital city or major regional centre in the case of each State and Territory.

30.21 Mobilisation

30.22.1 Upon initial mobilisation to Mount Arthur North an employee will receive:

the most direct route from his/her point of hire to the site at the commencement of employment.

economy class air travel from his/her point of hire to Mount Arthur North;

reimbursement of actual and reasonable excess baggage costs up to $70.00 for the purpose of transporting personal tools and effects. (Receipts required);

payment, in his/her first scheduled pay, of actual time spent travelling to Mount Arthur North up to a maximum of eight hours in any day and twelve hours overall, payable at his/her ordinary rate of pay.

30.22.2 An employee who:

• resigns within three months;

• is dismissed-

shall reimburse the Company the costs of the mobilisation airline ticket. The Company may deduct this cost from the employee's final pay.

30.3 Rest and Recreation Leave

30.3.1 An employee shall be eligible for Rest and Recreation Leave in accordance with this Clause after the completion of each 6 weeks' service for the Company at Mount Arthur North provided that he/she is estimated to have at least one month's employment remaining.

30.3.2 Rest and recreation may be taken when due or banked and utilised at a time agreed between the Company and individual employee.

30.3.3 An employee entitled to rest and recreation leave shall receive:

· economy class air travel to his/her point of hire and return to Mount Arthur North (or cash in lieu to facilitate alternate travel arrangements by employee) (both by the most direct route); two days off without loss of ordinary time earnings; accrued unpaid rostered days off in accordance with paragraph 25.3.5.

30.3.4 Additional leave shall be as arranged between the Company and employee.

30.3.5 An employee who does not return from Rest and Recreation Leave may be considered to have abandoned his/her employment. In these circumstances, the cost of the Rest and Recreation Travel may be deducted form the employee's final pay.

30.4 Demobilisation

30.4.1 Upon termination of an employee's service by the Company or upon resignation by the employee after the completion of six months service an employee will receive: transport by the most direct route to his/her point of hire; economy class air travel from Mount Arthur North to his/her point of hire;

• an allowance of $70.00 to cover return excess baggage costs, included in his/her final pay;

• eight ordinary hours travel pay included in his/her final pay.

30.4.2 Where an employee, upon termination with the Company, takes up employment pursuant to this Agreement with another employer without leaving Mount Arthur North, the subsequent employer shall be liable for these demobilisation requirements, to the exclusion of the initial employer. The intent of this provision is that the employee only receives demobilisation benefits when he/she actually demobilises.

3    The matter was subject to hearing on 19 March 2003. Mr R Alexander appeared on behalf of the Labor Council of New South Wales, the Electrical Trades Union of Australia, New South Wales Branch (ETU), The Australian Workers' Union, New South Wales (AWU), Construction, Forestry, Mining and Energy Union (New South Wales Branch) (CFMEU), Transport Workers' Union of Australia, New South Wales Branch (TWU), and the New South Wales Plumbers and Gasfitters Employees Union, Plumbing Division (CEPU). Mr G Mohan appeared on behalf of Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union, New South Wales Branch (AFME&PKIU). Mrs E Morson appeared on behalf of Australian Industry Group, New South Wales Branch (AIG) with Mr J Stanton, and Mr J Punter of Sinclair Knight Mertz (SKM), the principal contractor and project manager.

4    Mr Alexander, supported by Mr Mohan, submitted that the variation sought is in the terms of the industry standard taken directly from the National Metal and Engineering On-Site Construction Award 1989 (Print H8482 [N0100]] (‘the Federal Award’)

5    The Project Award is an award made by consent of the parties. The application and scope are found in cl 2 336 IG at 691 in the following terms:

2. Application and Scope

This Award shall apply only to all contractors, sub-contractors, and suppliers of supplementary labour engaged on surface construction work at the Mount Arthur North Project, New South Wales.

Provided that the Award shall not apply to:

Statutory employees

Management and supervisory personnel

Future operations personnel

Engineers/Surveyors

Clerical and Administration Personnel

Security Personnel

Employees of suppliers engaged in the deliveries of materials and equipment to and from the site. The parties agree that this exclusion shall not apply to employees who upon delivering materials and equipment from off-site to the project perform construction work on the project eg. employees who deliver scaffolding to the project who then erect the scaffolding are covered by this Award in respect of the work performed on the project.

Off site infrastructure and pre-assembly work associated with the project undertaken by all contractors, sub-contractors or suppliers of supplementary labour in any premises, workshop or fabrication shop that is not attached to, or part of the project site.

This Award shall have no application to plant commissioning, operations or maintenance or to any other work after turnover of work or to any other activities for which the contractors and sub-contractors are not responsible.

6    Also of relevance to the instant application are Clause 4, Intent; Clause 5, No extra Claims; Clause 6, Community Standards; and Clause 7, Period of Operation, found at 336 IG at 692 in the following terms:

4. Intent

This Award shall stand on its own and shall not except as specifically provided for in this Award be affected by outside wage or condition movements.

This Award shall apply exclusively to the services activities as described in Clause 2 and to the maximum extent permitted by the Industrial Relations Act 1996, no other Industrial Awards or Agreements (whether State or Federal) shall apply to the employees, the employer or the Unions bound by this Award.

No alteration shall be made to this Award during its period of operation other than by mutual agreement of the parties or determination pursuant to Clause 20 Disputes Procedure.

This Award shall not be used as a precedent by any of the Parties in respect of any other project or enterprise.

5. No Extra Claims

It is a term of this Award that the parties bound by this Award shall not pursue any extra claims, award or over-award, for the duration of the Award.

This includes claims related to changes arising from Award variations or decisions of the Industrial Relations Commission of New South Wales (the Commission) other than as provided for in Clause 6, Community Standards.

6. Community Standards

The parties acknowledge that during the term of this Award significant changes to community standards in respect of terms and conditions of employment may occur.

In the event that such a change/s does occur other than to wages and allowances but including casual loadings the parties to this Award shall discuss this change and the implications of a possible variation to this Award to the Mount Arthur North Project.

If the parties are unable to resolve any issue arising out of these discussions the issue shall be processed through the Disputes Procedure (Clause 20).

This shall not constitute a re-opening of negotiations on the terms and conditions of this Award.

The operation of this Clause is subject to no industrial action being or having been taken by employees engaged on the project in relation to the change.

7. Period of Operation

This Award shall operate from the first pay period to begin on or after 3 October 2001 and shall remain in force for a period of three (3) years from that date.

7    The grounds and reasons filed in support of the application are:

E: Grounds and Reasons:

1 . The Industrial Relations Commission is able to vary the Award in paragraph 3 of Clause 4 Intent of the Mount Arthur North Consent Award 2001.

2. Unions are not seeking that the Award be varied due to outside wage movements.

3. This is not an extra claim or over award payment.

4. At the making of the Award, the Union parties to the award could not reasonably foresee the extent to which the contractors would be reliant upon distant and interstate workers.

5. Employees are disadvantaged because of out of pocket expenses and real costs of travel for mobilisation and demobilisation.

6. The remedy sought is consistent with the industry standard at remote locations.

7. The remedy is consistent with Section 3 Sub-Section (a) and (g) of New South Wales Industrial relations Act 1996.

8. The remedy sought is not inconsistent with the state wage fixing principle as enunciated in the State Wage Case 2002

9. It is consistent with the objects of these types of Awards over an extended period of time.

10. Similar entitlements should apply to all classifications, for employees working side by side.

11. There should not be an industrial vacuum when mobilising at the point of engagement and demobilising.

8    Mr Alexander submitted that the application was motivated by the unprecedented extent to which contractors had brought people from interstate to work on the Mount Arthur North project and the mixed practices adopted in remuneration.

9    Mr Alexander put that mobilisation of labour from interstate has had very limited use in the Hunter Valley prior to this project and that, in his experience and knowledge, contractors have applied the terms of the relevant Federal Award. There is no evidence to support this contention, however, it is not challenged in any way.

10    In support of this argument Mr Alexander submitted that a vast number of project agreements applicable in the Hunter Valley over previous years have not included provision for mobilisation as there had never been a problem or issue not resolved by discussion between the parties, resulting in application of the relevant Federal Award.

11    Mr Alexander submitted that contractors on the Mount Arthur North project have found need for mobilisation of a significant number of employees with some applying the terms of the Federal Award, others applying the Federal Award at first for some employees, and others declining to make any payments.

12    Mr Alexander submitted that contractors refusing payment had relied upon clause 4, Intent and scope of the Project Award, in particular para 2 thereof, which states:

This Award shall apply exclusively to the services activities as described in Clause 2 and to the maximum extent permitted by the Industrial Relations Act 1996, no other Industrial Awards or Agreements (whether State or Federal) shall apply to the employees, the employer or the Unions bound by this Award.

13    In opposing the application Ms Morson put that a copy of the proposed variation had been given to all contractors at Mount Arthur North and a meeting of all contractors held on site, resulting in a unanimous decision to oppose the application.

14    Ms Morson set out a number of grounds upon which the application is opposed:

2. The Application filed by the Labor Council is barred by Clause 5 of the Award "No Extra Claims".

The "No Extra Claims" clause is intended to protect the sanctity of the Award and provide the parties with industrial certainty.

3. The Application is barred as a result of Clause 4 "Intent", which states that no alteration shall be made to the Award other than by the "mutual agreement” of the parties.

4. The variation as proposed by the Labor Council is the inclusion of a provision from the National Metal and Engineering On-Site Construction Industry Award 1989.

Clause 4 “Intent” states;

"... no other Industrial Award or Agreements (whether State or Federal) shall apply to the employees, the employer or the Unions bound by this Award.-

Accordingly, the provisions of the National Metal and Engineering On-Site Construction Industry Award 1989 should not be read into the Award.

5. As outlined in Clause 2 "Application and Scope" the Award applies only to surface construction work performed on the Mount Arthur Project. The Award does not apply to work associated with the Project and performed off site. As such the Award only applies from the gate and any "work" performed off site, or immediately prior to commencement of employment on site does not fall within the scope of the Award and cannot be covered by the Award.

6. It is not in the Public Interest to vary the Award as proposed. The proposed variation has the potential to impact upon a number of other Project Awards in the region.

The purpose of such awards is to provide industrial certainty and as such their sanctity should be protected.

15    Ms Morson conceded that no party to the making of the Project Award anticipated the extent to which interstate workers would be required. Ms Morson put that mere inconvenience is not a basis for variation.

16    Ms Morson relied upon the decision in Electrical Trades Union of Australia v Queensland Electricity Commission and Ors (1986) 16 IR 292 to support this argument. In ETU a Full Bench of the Australian Conciliation and Arbitration Commission (Ludeke J, Riordan DP and Brown C) said at 316:

“It is a cornerstone of proper industrial relations that agreements made must be honoured even if they subsequently prove to be inconvenient to one or other of the parties. If there is not a guarantee that agreements will be honoured the processes of conciliation as a means of resolving industrial disputes will be at least inhibited and possibly frustrated. This would be contrary to the specific objects of the Conciliation and Arbitration Act.”

17    Ms Morson referred to the decision in Transport Workers' Union of Australia, New South Wales Branch & CSR Limited [2000] NSWIRComm 1008 wherein Connor C stated:

“There is, after all, an established policy to preserve the sanctity of State awards and not re-open them during their nominal term unless there are good and cogent reasons for doing so [the Soap and Candle Makers (State) Award Case (1946) AR 264, the Sydney Daily Newspaper Agreement Case (1960) AR 271 and the Nurses (Female) &c State Hospitals and Homes Award Case (1966) AR 191].”

18    Ms Morson further relied upon the decisions in The Smith’s Snackfoods Company Limited (South Australia) Award [2001] SAIRComm 50 and Construction, Forestry, Mining and Energy Union (New South Wales Branch) v Shell [1998] NSWIRComm 275 to support this argument as to the proper interpretation of the No Extra Claims provision of the Project Award.

19    In Smith’s Snackfoods Bartel C of the South Australian Industrial Relations Commission (SAIRC) said at para 25:

“Both the Shell and Foxtel decisions involve an interpretation of the clause in question. They variously involve looking at the intention of the parties, the background to the issue and the conduct of the parties in relation to the clause. Such an approach is consistent with the principles of interpretation adopted in the South Australian jurisdiction (see Deckers v Minda Home Inc (Referral of Question of Law) Case, (1978) 45 SAIR 69 at 75, also s 11(2) of the Act).

20    In Shell his Honour Marks J sets out succinctly the principles of interpretation to be applied in the following terms:

“...it is necessary to refer briefly to the relevant principles of interpretation. They are set out, in my opinion, succinctly but comprehensively in the judgment of Burchett J in the Full Court of the Federal Court of Australia in Short v F W Hercus Pty Ltd (1993) 46 IR 128. His Honour considered whether it was permissible for the purpose of construing a clause of an industrial award to look at the "history of the provision". In his Honour's opinion "common sense" dictated that in considering the meaning of a clause of an award it was legitimate to look at the context in which it was made including, relevantly, the history behind the particular provision.

The judgment of Burchett J details the authorities on which his Honour relies in reaching this conclusion and discusses at some length those authorities. I agree with his Honour's reasoning and adopt what his Honour has said in this regard.

There is a line of authority from decisions of the predecessor to this Commission which in my opinion determine that not only is it permissible to have regard to the history of an industrial award in determining the meaning of the provisions of that award to resolve any uncertainty of meaning or ambiguity but that it is permissible to have regard to that history in order to ensure that the approach to construction proposed to be taken is correct. 1 have made reference to those decided cases in Cepus v Heggies Transport Pty Ltd (1994) 52 IR 123 at 143.

21    Ms Morson’s submissions in this regard are found at pages 12 and 13 of transcript in the following terms:

“A proper interpretation of the no extra claims clause needs to look at the intention of the parties, the background to the issue, and the conduct of the parties, in relation to the clause. Now on that basis, we submit the following:

Firstly in relation to the intentions of the party. We say that the award was negotiated with the understanding that there would be no extra claims for wage increases, or other benefits, during the nominal term of the award.

In relation to the background, we say that distant entitlement provisions have never been included in project awards in this reason, as a result of the fact that we have relied on local labour, and that customer practice has always been that contractors have made arrangements for travel to and from site, under relevant State or Federal Awards, as Mr Alexander has already outlined.

Thirdly, in relation to the conduct of the parties in relation to the clause - customer practice in relation to this project has been that any changes to the award, have been made by the consent of the parties, that is by continuation of the negotiation process, that originally formed the award.

Further, we say that the conduct of the parties and the intention of the parties is clearly outlined in clause four of this award, which states that no alteration should be made to the award during its operation, other than by the mutual agreement of the parties, or by determination subject to a dispute. Now, while Mr Alexander has outlined that today, we say that the intention of the parties is that they will do that by consent, by negotiation ourselves, and this has been the experience with the award on other matters, where the parties have found difficulty, that those issues have been negotiated and variations have been made by consent.

Further, we say that clause four of the award, that is the intent clause, states that the award applies exclusively to the maximum and extent permitted by the Industrial Relations Act, and that no other industrial awards or agreements shall apply to the employees, the employer or the Unions bound by this award.

We would therefore say that the terms of the National Metal and Engineering On Site Construction Industry Award, cannot extend to apply to this award, to the employees or the Unions bound by the award.

Further the Mount Arthur North Award was negotiated between the parties to cover the work at the Mount Arthur North project, and as a project award, it was intended to cover all terms and conditions relating to employment on the site. “

... ...

“... this award, under the application and scope, is intended to apply only on this site. It's intended, as the application and scope states, to apply to contractors, sub--contractors engaged on surface construction work at Mount Arthur North project. Now further to that, clause two of the award, which is the application and scope then outlines a number of exclusions or a number of activities which this award does not apply to, including delivering material, making equipment off-site which is associated with the project, but not performed on site.

We say that this award, in many ways, starts at the gate, once the employees set foot on the site, and are engaged in the construction work, so following on from that, we would say that the travel is such, is not work as is intended to be covered by the application and scope of this award.”

CONSIDERATION

22    The application in this matter requires consideration of the intersection between the Project Award made by consent of the parties pursuant to the Industrial Relations Act 1996, and the Federal Award made by the Australian Industrial Relations Commission (AIRC) pursuant to the Workplace Relations Act 1996 (WRA).

23    The jurisdiction of the AIRC is restrained by the provisions of s111AAA of the WRA, which require the AIRC to cease dealing with industrial dispute in certain circumstances, in the following terms:

(1) If the Commission is satisfied that a State award or a State employment agreement governs the wages and conditions of employment of particular employees whose wages and conditions of employment are the subject of an industrial dispute, the Commission must cease dealing with the industrial dispute in relation to those employees, unless the Commission is satisfied that ceasing would not be in the public interest.

(2) In determining the public interest for the purposes of subsection (1), the Commission must give primary consideration to: (a) the views of the employees referred to in subsection (1); and (b) the views of the employer or employers of those employees.

(3) The Commission must inform itself as quickly as it can about the views referred to in subsection (2), and may inform itself in such manner as it thinks fit.

(4) In this section:

cease dealing, in relation to an industrial dispute, means:

(a) to dismiss the whole or a part of a matter to which the industrial dispute relates; or

(b) to refrain from further hearing or from determining the industrial dispute or part of the industrial dispute.

24    It is inconceivable on the arguments advanced by the respondents here that the AIRC would be constrained by s 111AAA in a dispute over the application of mobilisation provisions for employees at the Mount Arthur North Project arising pursuant to a relevant Federal Award as the Project Award is silent on the subject, and the respondents oppose the insertion of a provision. The Project Award applies wholly within the perimeter of the project while mobilisation arrangements occur extant at geographically remote locations.

25    The submission by the Labor Council that employment cannot occur in an industrial vacuum is valid, and consequently matters not covered by the Project Award in respect to parties to another award making specific provision must fall within the regulatory scope thereof.

26    I am convinced, on the arguments put to me, that the application is not an extra claim, as would be excluded by clause 5 of this Award. I am convinced that as a matter of equity, in circumstances where employees are engaged in distant places to work on their site, they should be paid industry standard conditions, which are those found in the application put forward by the Labor Council, taken from the relative Federal Award.

27    There needs to be caution and restraint in the re-opening of awards during their term as demonstrated by the submission of Ms Morson. In the present circumstances there appears no need, as remedy is available by application of relevant Federal Awards which both describe the community standard and apply to a practice that by its nature is essentially interstate employment.

28    The employers cannot rely upon the Project Award to exclude the operation of those Federal Awards in the present circumstances.

29    Prima facie, the argument advanced by Ms Morson that this Award applies within the perimeters of the construction site and any activities undertaken extant thereof cannot, as Mr Alexander puts, be in an industrial vacuum, they must be regulated in some way. If the employer is bound by the Federal Award, then the Federal Award would apply from the point of engagement to the perimeter of the construction site, and for that purpose of mobilisation and de-mobilisation, and those circumstances would be actionable in the appropriate jurisdiction, pursuant to the Federal Award.

30    Any defence that the employers might put that this Award protects them from the application of the parent Federal Award in respect to mobilisation and de-mobilisation is simply not sustainable.

31    There may be some circumstances, not identified in these proceedings, where employers are not covered by an appropriate federal prescription. That would require a separate examination in respect to state regulation. There are dispute procedures available under the Project Award, and other state awards, to deal with those circumstances.

32    The application for variation is refused.

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LAST UPDATED: 17/04/2003