WESTERN AUSTRALIAN INDUSTRIAL MAGISTRATES COURT

CITATION : 2019 WAIRC 00342

DELIVERED : Thursday, 4 JULY 2019

FILE NO. : M 126 OF 2018

CLAIMANT

AND

Freo Group Pty Ltd

Respondent

CatchWords : INDUSTRIAL LAW – Preliminary issue – Determination of the enterprise agreement applicable to the claimant’s employment – Application of section 58 of the Fair Work Act 2009 (Cth)

Legislation : Fair Work Act 2009 (Cth)

Instrument : Freo Group Pty Ltd Wheatstone Project Agreement 2013
Freo Group Pty Ltd Maintenance and General Services Agreement 2016
Freo Group Pty Ltd Kwinana and Welshpool Transport and Stores Agreement 2014

Case(s) referred to

in reasons : Construction, Forestry, Maritime, Mining and Energy Union v Hay Point Services Pty Ltd [2018] FCA 182

WorkPac Pty Ltd v Skene [2018] FCFA 131

City of Wanneroo v Holmes (1989) 30 IR 362

Amcor Limited v Construction, Forestry, Mining and Energy Union (2005) 222 CLR 241

Kucks v CSR Ltd (1996) 66 IR 182

Re Harrison; Ex Parte Hames [2015] WASC 247

Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355

Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (2009) 239 CLR 27

Commissioner of Taxation v Consolidated Media Holdings Ltd (2012) 250 CLR 503

Result : Preliminary issue resolved

Representation:

Claimant : Mr. P. Mullally (agent)

Respondent : Ms J. Flinn (of counsel) as instructed by MinterEllison

REASONS FOR DECISION

1          Freo Group Pty Ltd (the Respondent) employed Bernard Chipadza (the Claimant) in various roles from 2009. On 26 September 2015, the Claimant was offered employment as a mechanical fitter on the Wheatstone Project where the applicable enterprise agreement was the Freo Group Pty Ltd Wheatstone Project Agreement 2013 (approved by the Fair Work Commission on 9 July 2013) (EBA 2013).

2          The nominal expiry date for EBA 2013 was 9 July 2017, although EBA 2013 would continue to operate beyond the nominal expiry date until it was replaced or terminated in accordance with the Fair Work Act 2009 (Cth) (FWA).

3          The Claimant commenced work on the Wheatstone Project in October 2015.

4          On 12 August 2016, the Fair Work Commission approved the Freo Group Pty Ltd Maintenance and General Services Agreement 2016 which operated from 19 August 2016 (EBA 2016).

5          On 12 November 2016, the Respondent notified the Claimant that the Respondent’s contract on the Wheatstone Project would finish by 31 December 2016. Consistent with the terms of the offer of employment, the Claimant was also informed that his employment on the Wheatstone Project would end at the same time and there was an opportunity to transfer his employment on the Wheatstone Project to Bechtel.

6          On 13 November 2016, the Claimant lodged an expression of interest seeking employment with Bechtel but he was not offered employment. The Respondent offered the Claimant three further positions (not on the Wheatstone Project), which were not accepted by the Claimant.

7          The Claimant resigned from his employment on 6 December 2016 with a finish date on 22 December 2016. The Respondent’s contract on the Wheatstone Project terminated on 31 December 2016.

8          It is unnecessary at this stage to reconcile the parties’ position with respect to the cessation of the Claimant’s employment.

Determination of a Preliminary Issue

9          The parties agree that there is a preliminary issue for determination which may resolve the Claimant’s claim alleging the Respondent breached cl 20.8 of the EBA 2016 by failing to pay redundancy pay and cl 18.1 of the EBA 2016 by failing to pay in lieu of notice (and thereby contravening s 50 of the FWA).

10       The preliminary issue to be determined is the application of s 58 of the FWA to EBA 2013 and EBA 2016 and determining whether EBA 2013 or EBA 2016 applies to the Claimant at the time of the cessation of his employment.

11       The Claimant contends that EBA 2016 applies to the Claimant:

• when the Respondent notified the Claimant on 12 November 2016 that its contract was to end on the Wheatstone Project, and thereafter EBA 2013 ceased to have any application to the Claimant;
• any future offers of employment by the Respondent came within EBA 2016; and
• section 58 of the FWA does not apply because EBA 2013 was not part of any employment relationship.

12       The Respondent contends that EBA 2013 applies to the Claimant:

• where pursuant to s 58 of the FWA only one enterprise agreement can apply to an employee and a later agreement cannot apply if the earlier agreement has not yet passed its nominal expiry date; and
• because EBA 2013 applied to, and covered, the Claimant where his employment end date was on or around 22 December 2016 and EBA 2013 expired on 9 July 2017.

Application of Section 58 of the FWA to EBA 2013 and EBA 2016

13       Section 58 of the FWA provides:

Only one enterprise agreement can apply to an employee

(1)               Only one enterprise agreement can apply to an employee at a particular time.

General rule—later agreement does not apply until earlier agreement passes its nominal expiry date

(2)               If:

(a)      an enterprise agreement (the earlier agreement) applies to an employee in relation to particular employment; and

(b)      another enterprise agreement (the later agreement) that covers the employee in relation to the same employment comes into operation; and

(c)      subsection (3) (which deals with a single‑enterprise agreement replacing a multi‑enterprise agreement) does not apply;

then:

(d)      if the earlier agreement has not passed its nominal expiry date:

(i)        the later agreement cannot apply to the employee in relation to that employment until the earlier agreement passes its nominal expiry date; and

(ii)                         the earlier agreement ceases to apply to the employee in relation to that employment when the earlier agreement passes its nominal expiry date, and can never so apply again; or

(e)      if the earlier agreement has passed its nominal expiry date—the earlier agreement ceases to apply to the employee when the later agreement comes into operation, and can never so apply again.

Special rule—single‑enterprise agreement replaces multi‑enterprise agreement

14       Section 58(3) of the FWA has no applicability to the Claimant’s case.

15       Pursuant to s 51(1) of the FWA, ‘[a]n enterprise agreement does not impose obligations on a person, and a person does not contravene a term of an enterprise agreement, unless the agreement applies to the person’.

16       An enterprise agreement applies to an employee, employer or employee organisation if: (a) the agreement is in operation; and (b) the agreement covers the employee, employer or organisation; and (c) no other provision of the FWA provides, or has the effect, that the agreement does not apply to the employee, employer or organisation.1

17       The reference to an enterprise agreement applying to an employee is a reference to the agreement applying to the employee in relation to particular employment.2

18       In terms of particular employment, the Explanatory Memorandum to the Fair Work Bill 2009 (at [205]) says:

This means that, if a national system employee has more than one job, each job is treated separately in determining the effect of an award or agreement on the employee’s entitlements in relation to each job.  For instance, the rule that only one enterprise agreement can operate in relation to a person at a particular time (in reference to s 58 of the FWA) does not mean that two agreements cannot cover, or apply to, an employee in relation to two different jobs.

19       An enterprise agreement covers an employee or employer if the agreement is expressed to cover (howsoever described) the employee or the employer.3 A reference in the FWA to an enterprise agreement covering an employee is a reference to the agreement covering the employee in relation to particular employment.4

20       An enterprise agreement ceases to operate on the earlier of the day on which a termination of the agreement comes into operation under s 224 or s 227 of the FWA or the day on which s 58 of the FWA first has the effect that there is no employee to whom the agreement applies.5

21       The applicable principles for interpreting an enterprise agreement were referred to in Construction, Forestry, Maritime, Mining and Energy Union v Hay Point Services Pty Ltd [2018] FCA 182 [8] by reference to WorkPac Pty Ltd v Skene [2018] FCFA 131, and in summary include:

• the interpretation of an enterprise agreement begins with consideration and ordinary meaning of the words used, read as a whole and in context;6
• the interpretation turns on the language of the particular agreement, understood in light of its industrial context and purpose, and must not be interpreted in a vacuum divorced from industrial realities;7
• industrial agreements are made for various industries in the light of the customs and working conditions of each and they are frequently couched in terms intelligible to the parties but without the careful attention to form and draftsmanship that one expects to find in an Act;8
• narrow and pedantic approaches to the interpretation of an award are misplaced and a purposive approach to interpretation is appropriate;9 and
• an instrument should be construed as a whole construction that makes the various parts of an instrument harmonious.10

22       Similar principles apply in respect to statutory construction. The starting point to determine the meaning of a statutory provision is the text of the statute, having regard to context in which the text appears and the general purpose and policy of the legislation.11 Extrinsic materials cannot be relied upon to displace the clear meaning of the language contained in the text of the legislation.12 Where only one meaning is reasonably open on the language of a provision, the court must adopt that meaning.13 Where more than one meaning is reasonably open, the court may adopt that meaning which best achieves the purpose or object of the statutory provision. The court must always consider context and extrinsic material in the first instance regardless of whether ambiguity appears on the face of the legislation.14

23       The applicable clauses of EBA 2013 and EBA 2016 are attached in Schedule 1 of these reasons.

EBA 2013

24       The combined effect of clauses 2 and 3(1) of EBA 2013 is that EBA 2013 is binding upon the Respondent, employees employed by the Respondent who are employed in the classifications in cl 9 of EBA 2013 performing work at the on-site construction work for the Wheatstone Project.

25       Clause 3(2) of EBA 2013 outlines areas to which EBA 2013 does not apply, which have no effect in respect of the Claimant’s claim.

26       As previously identified, the nominal expiry date for EBA 2013 was 9 July 2017.

27       The Claimant was employed as a mechanical fitter on the Wheatstone Project and, as such, performed work within the classification of ‘Trade & Technical Classifications’ in cl 9 of EBA 2013.

28       Therefore, EBA 2013 was in operation at the time of the Claimant’s employment with the Respondent and EBA 2013 was expressed to cover (by being binding upon) the Respondent and the Claimant in relation to particular employment, namely as a mechanical fitter on the Wheatstone Project.

29       Accordingly, pursuant to s 51 of the FWA, EBA 2013 applied to the Respondent and the Claimant in relation to particular employment, namely as a mechanical fitter on the Wheatstone Project.

EBA 2016

30       Clause 1.2 of EBA 2016 provides that EBA 2016 covers the Respondent and each employee engaged under the mechanical and general services classification structure referred to in Schedule 1 employed in Freo Group Pty Ltd branches and associated projects throughout Australia (save that for the general services classification an exception arises where the scope of the Freo Group Pty Ltd Kwinana and Welshpool Transport and Stores Agreement 2014 applies).

31       If, for the purposes of resolving the preliminary issue, it is assumed the Claimant’s classification comes within Schedule 1, ‘Mechanical Trade Person’, a difficulty arises as to identifying what the Claimant was engaged to do in relation to EBA 2016.

32       In November and December 2016, the Claimant was working on the Wheatstone Project. His employment ceased just prior to the Respondent’s contract ending on the Wheatstone Project. There was no other employment to which the Claimant had thereafter been engaged, because no offer of employment had either been offered to, or accepted by, the Claimant.

33       To the extent that the Claimant says that EBA 2016 took over from EBA 2013 while he was employed on the Wheatstone Project, s 58 of the FWA is determinative where an earlier agreement applies to an employee in relation to particular employment.

34       In the Claimant’s case, EBA 2013 applied to him in relation to particular employment (as a mechanical fitter on the Wheatstone Project) and the nominal expiry date did not pass (cease) until 9 July 2017. EBA 2016 came into operation on 19 August 2016, but, arguably, did not cover the Claimant for the same employment, even if it covered the Claimant at all.

35       However, even if EBA 2016 covered the Claimant, pursuant to s 58(d)(i) of the FWA the later agreement cannot apply to the Claimant until the earlier agreement passes its nominal expiry date.

36       Therefore, in terms of it applying to or covering the Claimant, in the first instance EBA 2016 did not cover or apply in relation to the same employment relevant to the Claimant. There was no job, in the present or in the future, to which EBA 2016 applied where EBA 2013 applied and covered the Claimant in relation to particular employment.

37       Secondly, s 58(d)(i) of the FWA gives effect to EBA 2013 as the enterprise agreement to operate first in time to the Claimant while he was employed by the Respondent on the Wheatstone Project unless the nominal expiry date had passed, which it had not.

Outcome

38       Having regard to the operation of s 58 of the FWA, and the relevant clauses in EBA 2013 and EBA 2016 in the context of the particular employment relevant to the Claimant in November and December 2016, I find that EBA 2013 covered the Claimant and applied to his employment by the Respondent on the Wheatstone Project.

D. SCADDAN

INDUSTRIAL MAGISTRATE

1 Section 52(1) of the FWA.

2 Section 52(2) of the FWA.

3 Section 53(1) of the FWA.

4 Section 53(6) of the FWA.

5 Section 54(2) of the FWA.

6 City of Wanneroo v Holmes (1989) 30 IR 362 at 378.

7 Amcor Limited v Construction, Forestry, Mining and Energy Union (2005) 222 CLR 241 [2] and Holmes at 378.

8 Holmes at 378.

9 Kucks v CSR Ltd (1996) 66 IR 182; Amcor Ltd v CFMEU [2005] HCA 10.

10 Re Harrison; Ex Parte Hames [2015] WASC 247 [50].

11 Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355.

12 Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (2009) 239 CLR 27.

13 Commissioner of Taxation v Consolidated Media Holdings Ltd (2012) 250 CLR 503.

14 Alcan (NT) Alumina Pty Ltd.

Schedule I

Freo Group Pty Ltd Wheatstone Project Agreement 2013

2. PARTIES AND PERSONS BOUND

This Agreement shall be binding upon:

•                   Free Group Pty Ltd ("the Company"); and

•                   Employees of the Company employed in the classifications set out in Clause 9 of this Agreement and performing work falling within the Application of this Agreement; and

•                   The Australian Workers' Union.

3. APPLICATION OF AGREEMENT

(1)            This Agreement shall apply to the on-site construction work for the Wheatstone Project (the Project) at Ashburton North near Onslow.

(2)            Provided that the Agreement shall not apply to:

(a)             Maintenance, upgrades, preparatory works, minor works, shut down and associated work undertaken to Chevron Australia Pty Ltd;

(b)            The transport of personnel to and from the Project;

(c)             Deliveries of materials and equipment to and from the Project;

(d)            The construction, maintenance or upgrades of off-site infrastructure (for example roads, power and communication systems which service the Site);

(e)             Off-site manufacture and off-site fabrication associated with the Project;

Freo Group Pty Ltd Maintenance and General Services Agreement 2016

1. Parties and Persons Bound
   1.               This agreement shall be known as the Freo Group Pty Ltd Maintenance and General Services Agreement 2016.
   2.               The Agreement covers:
      1.                Freo Group Pty Ltd (Employer) and;
      2.                Each employee engaged under the mechanical classification structure referred to in Schedule 1 – Classifications of Employment and Performance Recognition (Employees) employed in FG branches and associated projects throughout Australia.
      3.                Each employee engaged under the general services classification structure referred to in Schedule 1 – Classifications of Employment and Performance Recognition (Employees) employed in FG branches and associated projects except for circumstances where the scope of Freo Group Pty Ltd Kwinana and Welshpool Transport and Stores Agreement 2014 is applicable.