FEDERAL COURT OF AUSTRALIA Reeves v MaxiTRANS Australia Pty Ltd [2009] FCA 970 INDUSTRIAL LAW – collective agreement – interpretation – requirement for consultation with employee's chosen representative – extent to which provision merely hortatory or aspirational – whether enforceable obligation imposed Workplace Relations Act 1996 (Cth) ss 340(2), 719 and 824 Kucks v CSR Ltd (1996) 66 IR 182 Federated Municipal and Shire Council Employees Union of Australia v Shire of Albany (1990) 32 IR 470 National Tertiary Education Industry Union v University of Wollongong [2002] FCA 31 Ambulance Service Victoria (South Western Region) v Australian Liquor, Hospitality and Miscellaneous Workers Union (1998) 80 IR 275 Soliman v University of Technology, Sydney (2008) 176 IR 183 Ventana Pty Ltd v Federal Airports Corp and Fairways Group Pty Ltd and Fairways Leisure Market Pty Ltd [1997] FCA 538 Van Efferen v CMA Corporation Limited [2009] FCA 597 Bell v Minister for Health [2006] FCA 134 Termination Change and Redundancy Case (1984) 8 IR 34 United Firefighters' Union of Australia v Metropolitan Fire and Emergency Services Board (2006) 152 FCR 18 Automotive, Food, Metals, Engineering, Printing & Kindred Industries Union v Qantas Airways Limited (2001) 106 IR 307 HELEN REEVES and CRAIG CAMBLIN v MAXITRANS AUSTRALIA PTY LTD VID 701 of 2008 RYAN J 28 AUGUST 2009 MELBOURNE IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY VID 701 of 2008 FAIR WORK DIVISION BETWEEN: HELEN REEVES First Applicant CRAIG CAMBLIN Second Applicant AND: MAXITRANS AUSTRALIA PTY LTD Respondent JUDGE: RYAN J DATE OF ORDER: 28 AUGUST 2009 WHERE MADE: MELBOURNE THE COURT ORDERS THAT: 1. The application be dismissed. Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. The text of entered orders can be located using eSearch on the Court's website. IN THE FEDERAL COURT OF AUSTRALIA VICTORIA DISTRICT REGISTRY VID 701 of 2008 FAIR WORK DIVISION BETWEEN: HELEN REEVES First Applicant CRAIG CAMBLIN Second Applicant AND: MAXITRANS AUSTRALIA PTY LTD Respondent JUDGE: RYAN J DATE: 28 AUGUST 2009 PLACE: MELBOURNE REASONS FOR JUDGMENT 1 Before the Court is an application which turns largely on its own facts. In September 2008, the Respondent's employees, upon it being put to them for a second time, voted for the MaxiTRANS Australia Collective Agreement 2008 ("the 2008 Agreement"), which replaced the MaxiTRANS Australia Pty Ltd Collective Agreement 2006 ("the 2006 Agreement"). 2 The question raised by the amended statement of claim is whether consultation with the union representatives of two of the respondent's employees, the applicants in this case, complied with the requirements of the 2006 Agreement with respect to consultation. Contingently on a negative answer to that question, the applicants seek the imposition of a penalty pursuant to s 719 of the Workplace Relations Act 1996 (Cth) ("the WR Act"). Background 3 The respondent, MaxiTRANS Australia Pty Ltd ("MaxiTRANS") is a manufacturer of truck trailers. Its primary factory site is at Ballarat in Victoria. Each of the applicants was, at all relevant times, an employee of MaxiTRANS. Each was also a member of the Automotive, Food, Metals Engineering, Printing and Kindred Industries Union ("the AMWU"), and had indicated a desire to be represented by the AMWU in negotiations in relation to collective agreements. 4 When the dispute now before the Court first arose, the 2006 Agreement was in force. It provided, by cl 12; 12. EMPLOYEE REPRESENTATION MaxiTRANS Australia has an open door policy for employees to express any issue relating to their employment. Employees elect their own Employee Committee representative to consult with management on issues and are encouraged to use this system of representation. The company also recognizes "freedom of association". Therefore regardless of who an employee chooses as a representative they will be treated equally and without prejudice. See Appendix 1 for Consultative Committee Constitution Appendix 1 contained various provisions directed to the role, composition and operation of the Consultative Committee ("the Committee"). It provided, in relevant part; Preamble The employees and management of the company are committed to workplace improvement and effectiveness through a focus on communication and consultation through the committee… Scope of the Committee The Committee has scope to address all matters relating to the employee/ management relationship, provided such matters raised have been dealt with through proper channels, where they exist. The Committee will have the central role in (but not be limited to) the development, implementation and monitoring of: Enterprise Agreements and productivity measures; work arrangements and working conditions; and communication… Structure The Consultative Committee will comprise of – nine employee representatives elected by the employees; one team leader representative elected by Team Leaders and; three management appointed representatives. … 5 The factual controversy between the parties revolves around the extent to which the applicants' AMWU representatives have been given access to representatives of MaxiTRANS management and an opportunity to make submissions about the content of the 2008 Agreement while it was being negotiated. The evidence of an officer of the AMWU, Mr Nunns, was that, during a notified bargaining period, he sought meetings between May and August 2008 with the MaxiTRANS Human Resources manager, Mr Archon, and he sought to have incorporated in the proposed 2008 Agreement certain provisions, including, specifically, one ordaining a particular dispute resolution procedure. Those approaches, he said in evidence, were rebuffed. In his evidence, Mr Archon did not dispute that he had been unreceptive to the AMWU's approaches. He regarded it, he said, as unnecessary to respond at the time because MaxiTRANS was negotiating directly with its employees through the Committee. 6 On 18 August 2008, without any meeting having occurred between representatives of MaxiTRANS management and any officers of the AMWU, the 2008 Agreement was put to a vote of MaxiTRANS employees. It was not approved by the requisite majority. On 20 August, Mr Nunns wrote to Mr Archon a letter which included this passage; [T]he events of this week provide management at Maxitrans Australia Pty Ltd with a window of opportunity to reconsider its position and to engage in a sensible and productive manner with the AMWU – Vehicle Division to achieve a fair and reasonable outcome for the workforce. Subsequently, on 29 August 2008, three MaxiTRANS employees, including the applicants, sent to Mr Archon a standard form letter under cover of a facsimile from Mr Nunns. The letter contained this statement; We are all AMWU members and understand that the Union was not able to meet with the Company at all to negotiate over the failed proposed agreement, notwithstanding that the AMWU was appointed as a bargaining agent by many employees including us. Clause 12 of [the 2006 Agreement] states as follows: … The Company recognises freedom of association. Therefore regardless of who an employee chooses as a representative they will be treated equally and without prejudice. We now ask that you comply with your legal obligations by engaging in meaningful negotiations for a new collective agreement with AMWU officials David Nunns and Ashley Mayne. We ask that you do this as a matter of urgency as we understand that you may be seeking to put a proposed further agreement to another vote of employees in a great hurry. We are concerned that you are doing this so as to avoid involving the Union in negotiations for a new agreement. 7 Mr Archon did not respond to the letter of 29 August because, he said, he was; … of the view that the purpose of clause 12 was to ensure that members of the consultative committee were treated equally and without prejudice. I did not understand the clause to provide an alternative avenue for representation in the negotiation of collective agreements. Exchange of solicitors' letters followed, as did further meetings of the Committee. On 8 September, Mr Archon informed Mr Nunns that the proposed draft 2008 Agreement had been provided to employees, and offered, at that point, to meet with representatives of the AMWU. On 15 September 2008, that meeting took place. 8 There were differing perceptions of how useful or productive that meeting was. Mr Archon said that it involved a "detailed" discussion lasting for some hours, and listed ten discrete matters which had been discussed. Mr Nunns agreed that the meeting occurred and occupied some hours during which the topics identified in Mr Archon's affidavit sworn 13 March 2009 were discussed. However, he characterised the discussion as unproductive, and deposed that the representatives of MaxiTRANS management who participated had been variously unresponsive, hostile and evasive. 9 Notwithstanding the meeting of 15 September, a second vote on the 2008 Agreement took place on 18 September 2008, when it was approved by the requisite majority of employees. 10 It is reasonably clear, then, that officers of the AMWU did not have the degree of input into the negotiations for the 2008 Agreement or the influence over its content that they wished. Counsel for the applicants contended that the AMWU representatives had been accorded "diminished treatment" which resulted in prejudice to the applicants because their views had not been put to MaxiTRANS by their "chosen representatives". Whether or not those criticisms reflect a departure by MaxiTRANS from good industrial relations, the question of the imposition of a penalty turns essentially on a construction of cl 12 and Appendix 1 of the 2006 Agreement. Principles of Interpretation 11 It is common ground that the correct approach to the construction of an industrial instrument is reflected in the observations of Madgwick J in Kucks v CSR Ltd (1996) 66 IR 182, at 184; 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. But the task remains one of interpreting a document produced by another or others. A court is not free to give effect to some anteriorly derived notion of what would be fair or just, regardless of what has been written into the award. Deciding what an existing award means is a process quite different from deciding, as an arbitral body does, what might fairly be put into an award. So, for example, ordinary or well-understood words are in general to be accorded their ordinary or usual meaning. It also goes almost without saying that an industrial document is to be read so as to give each provision its plain and ordinary meaning, and that it should be read as a whole and in context: see Federated Municipal and Shire Council Employees Union of Australia v Shire of Albany (1990) 32 IR 470, per French J, esp. at 475. 12 The essential proposition which emerges from the competing contentions of Counsel for the applicants and MaxiTRANS and the authorities to which they have referred is that, in construing an industrial instrument, weight is to be given to the intentions of the parties making the agreement, and what the Court infers that those parties would have understood themselves to have agreed. That task is to be performed with an eye to the "nature and purpose of certified agreements" (National Tertiary Education Industry Union v University of Wollongong [2002] FCA 31, per Branson J at [28]), and with the general, rather than any particular individual, in mind: Ambulance Service Victoria (South Western Region) v Australian Liquor, Hospitality and Miscellaneous Workers Union (1998) 80 IR 275, per Northrop J at 280; see also Soliman v University of Technology, Sydney (2008) 176 IR 183, per Jagot J at [202]-[203]. Canons of construction applicable to a statute or a commercial agreement are not always, or completely, available in the interpretation of an industrial agreement. That is a reflection of the function of documents of that kind and the fact that they frequently embody the outcome of negotiations between lay persons unfamiliar or uncomfortable with legal drafting techniques or modes of expression. 13 Although there was no essential difference in the approach contended for on each side, Counsel for the applicants and MaxiTRANS respectively argued that the application of that approach to the present facts led to a different result. The Applicants' Contentions 14 In support of the conclusion for which they contended, namely that the AMWU had not been sufficiently consulted in the process of formulating the 2008 Agreement, Counsel for the applicants argued; · First, when cl 12 says that employees are "encouraged" to use the "system of representation" by means of the Committee there described, it impliedly acknowledges that each employee has a choice and can elect to use some other form of representation. · Secondly, whomsoever is chosen by an employee as his or her representative is to be treated "equally and without prejudice", in accordance with the final sentence of cl 12. · The third proposition, to be erected on the two preceding propositions, is that whatever representative is chosen by an employee that representative is entitled to be treated in the same way as a member of the Committee. That contention is supported, in the applicants' submission, by the reference in Appendix 1 to the Committee having the "central role" in the development of Enterprise Agreements. The Respondent's Contentions 15 Counsel for MaxiTRANS submitted that the applicant's construction, outlined at [14] above, "does not accord with the natural and ordinary meaning of the words in clause 12 and, in the context of ongoing enterprise bargaining negotiations, could readily give rise to absurd, exploratory, capricious and irrational outcomes". That submission was premised on the contention that it would be unworkable to allow each and every employee to choose his or her own representative, and then for each such representative to be treated with complete equality in the process of negotiating an enterprise agreement. Consideration 16 It will readily be perceived that the three limbs of the applicants' argument as distilled at [14] above do not purport to constitute a logical syllogism. I accept that the use of the word "encouraged" in cl 12 of the 2006 Agreement was an acknowledgement that employees might have represented their views or interests to management otherwise than through "their own Employee Committee representative" or the Committee as a whole. The clause, I consider, did not preclude employees, either individually or as a group, from approaching management directly or through a representative, including a union organiser or delegate, who was not an Employee Committee representative or other member of the Committee. The weight to be accorded to such alternative forms of representation would, however, have been a matter for MaxiTRANS management and may well have varied according to the circumstances and the nature of the matter in issue. 17 The effect which, in my view, should be given to the word "encouraged" in cl 12 does not entail that precisely the same treatment is to be accorded to each representative of an employee who has been chosen to represent that employee in relation to a particular issue. The phrase "equally and without prejudice" in cl 12 is a compound one and gains colour from its proximity to the recognition in the same clause of "freedom of association." Understood in this way the phrase does not qualify an Employee Committee representative "elected" by employees to the Consultative Committee as contemplated by the first part of the cl 12. Rather, it refers to the representative "chosen" by one or more employees to represent him, her or them in respect of a particular issue. As suggested at[16] above, MaxiTRANS was obliged to entertain representations from such a representative without adverse discrimination or "prejudice" referable to, for example, the union affiliation, or lack of it, of the chosen representative or the fact that he or she had been chosen in preference to the Employee Committee representative on the Consultative Committee. However, that obligation was, I consider, not so extensive as to require MaxiTRANS to accord equal, or any particular, weight to the submissions on a specific issue of such a chosen representative. As already indicated, that weight might reasonably depend on a multitude of factors, including the inherent cogency of the submission, the number of employees represented and the nature of the issue to which the submission was directed. 18 The principal feature of the applicants' third proposition identified at [14] above which militates against its acceptance in all circumstances is that its universal application would render cl 12 practically unworkable in many situations. The preamble to Appendix 1 expressly provided that the Consultative Committee was to have "the central role" in "the development, implementation and monitoring of Enterprise Agreements." The centrality of the Committee's role would clearly have been destroyed if MaxiTRANS had been obliged to accord equal, or similar, time and weight to a consultation about a proposed Enterprise Agreement with each other representative (not being a Committee member) of a group of employees or even a single employee. This objection gains added force when it is remembered that the Committee for which cl 12 and Appendix 1 made provision was not itself entrusted with the making of a collective agreement. As its name, "the Consultative Committee" suggested, it was only required to be consulted about the content of a proposed agreement before the agreement was put to a vote pursuant to s 340(2) of the WR Act. That suggestion is reinforced by the composition of the Committee on which MaxiTRANS management had only three representatives whereas nine members were to be elected by rank-and-file employees and one by team leaders, whom I have taken to be equivalent to foremen and leading hands. 19 It is to be borne in mind that an industrial agreement is the product of negotiation and often of compromise on each side. Not every provision in such a document is to be taken as intended to impose an enforceable obligation on one party or another so as to expose that party to the imposition of a penalty in the event of non-compliance with the provision. Some provisions may be characterised as "hortatory" or merely reflective of a desirable policy or end which the parties have agreed to implement or attempt to achieve but without attracting penal consequences if the efforts of either party towards that end are later seen to be lacking in some respect. A helpful analogy is afforded by Ventana Pty Ltd v Federal Airports Corp and Fairways Group Pty Ltd and Fairways Leisure Market Pty Ltd [1997] FCA 538 (unreported, Federal Court of Australia, 20 June 1997). That case concerned a provision of the Federal Airports Corporation Act 1986 (Cth), which required that a statutory body "endeavour to perform its functions" in a certain manner. Those words, I considered; … embody no more than an exhortation as to what the [statutory body] should try to achieve as far as circumstances, and what can obviously be the conflicting demands of some of its various functions and powers, permit. Hortatory words of that kind, I consider, are inapt to import an enforceable obligation. 20 Clearly, the analogy between that interpretation and the construction of the present cl 12 is not exact. Ventana concerned a section of a statute, not a consensual industrial instrument. Nevertheless, the interpretative technique to the be applied is similar. As Tracey J remarked in Van Efferen v CMA Corporation Limited [2009] FCA 597, at [40]; The terms in which industrial instruments are drafted often require a distinction to be drawn between aspirational and promissory statements. In accordance with the objective theory of contract expounded in Toll [(FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165] a provision in a document proffered by an employer, will be treated as promissory in nature if the hypothetical, reasonable, potential employee to whom the document is presented would have concluded that [the employer] intended to be contractually bound to follow the procedures, outlined in it… The same is true of provisions which are merely "facultative". This point has been made, in the context of a rostering system operating in "a practical industrial relations context", by Marshall J in Bell v Minister for Health [2006] FCA 134; see esp. at [20]. A similar understanding informed the observation of a Full Bench of the Australian Conciliation and Arbitration Commission (Sir John Moore P, Madden J and Brown C) in the Termination Change and Redundancy Case (1984) 8 IR 34 at 52 that; We are aware that procedures for notification, consultation and provision of information have generally been settled by negotiation and agreement and we are of the view that, generally speaking, they are not matters which lend themselves to effective legislation or award prescription. However, at this stage, we are prepared to include in an award a requirement that consultation take place with employees and their representatives as soon as a firm decision has been taken about major changes in production, program, organization, structure or technology which are likely to have significant effects on employees. 21 The contrary construction, that MaxiTRANS was to accord identical time to a consultation with each non-Committee representative or give equal weight to submissions made by each such representative, does not conform with the principles discussed at [12] of these reasons; see also United Firefighters' Union of Australia v Metropolitan Fire and Emergency Services Board (2006) 152 FCR 18, at [74]-[77]. 22 These reflections have led me to conclude that, if the instrument read as a whole in its industrial context contains a hortatory or aspirational provision or one reflecting some philosophy which the parties intend should inform their industrial relations, it is not to be taken as imposing a positive obligation enforceable by the imposition of a penalty. Except to the extent that it requires MaxiTRANS to have some consultation of an appropriate kind with the chosen representative of each employee, I regard cl 12 of the 2006 Agreement as attracting the less Draconian interpretation which I have endeavoured to describe. 23 In proceedings before this Court the moving party bears the onus of establishing a breach of a certified agreement. In the present case that required the applicants to persuade the Court that the interpretation of the 2006 Agreement for which they contended was preferable to that advanced by MaxiTRANS; see Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union v Qantas Airways Limited (2001) 106 IR 307, per North J at 326. There, the applicants did not establish that their interpretation was correct, so the application for imposition of a penalty was dismissed. Subject to the qualification noted below, the present applicants have similarly failed to demonstrate that the construction for which they have contended is the preferable one. Conclusion 24 In the result, cl 12 of the 2006 Agreement can be construed as imposing an obligation on MaxiTRANS enforceable by the imposition of a penalty under s 719 of the WR Act only to the extent of requiring some consultation with each chose representative of the relevant employees. I am not persuaded that the consultation with AMWU representatives which clearly did occur before the second vote by employees on a collective agreement was insufficient to satisfy the requirements of cl 12. There was, on the evidence, no consultation at all with AMWU representatives before the first version of the collective agreement was put to a vote on 18 August 2008. That may have been because MaxiTRANS management had not been notified until 29 August 2008 that some employees had "chosen" Mr Nunns or any other officer of the AMWU as a representative for the purpose of negotiations or consultations about a proposed 2008 collective agreement. In any event, the negative vote on 18 August 2008 on a 2008 collective agreement meant that the agreement then put to the vote was effectively nugatory. For that reason, I would regard it as an inappropriate exercise of the discretion conferred by s 719 of the WR Act to impose a penalty for any failure by MaxiTRANS, before 18 August 2008, to consult with an AMWU representative. For all of the reasons outlined above, the application must be dismissed. In accordance with s 824 of the WR Act there will be no order as to costs. I certify that the preceding twenty-four (24) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Ryan. Associate: Dated: 28 August 2009 Counsel for the Applicants: Mr A Weineman Solicitor for the Applicants: Maurice Blackburn Counsel for the Respondent: Mr C O'Grady Solicitor for the Respondent: Deacons Date of Hearing: 6 April 2009 Date of Judgment: 28 August 2009