Australia -New “Hybrid” Roles: Are They Covered And Can The Union Dispute Coverage?

Construction, Forestry, Mining and Energy Union v Anglo Coal (Callide Management) Pty Ltd [2016] FCA 696 

 

What you need to know  

 

• In some circumstances, employers can create "hybrid" positions which are not covered by an enterprise agreement, despite some of the duties falling with an enterprise agreement's classification structure.
• A critical issue in determining whether or not the applicable enterprise agreement will cover the new positions will be whether the "primary" aspect of the new position is or is not covered.
• However, an employer should not create new positions as a "sham" in order to attempt to avoid the application of an applicable enterprise agreement. 

 

In Construction, Forestry, Mining and Energy Union v Anglo Coal (Callide Management) Pty Ltd, a unanimous Full Court of the Federal Court dismissed an appeal by the CFMEU against a decision of Justice Logan and found that Callide Mine had not breached the Callide Mine Union Enterprise Agreement 2012 (Callide Agreement).

 

The Construction, Forestry, Mining and Energy Union (CFMEU) had alleged that Callide Mine contravened section 50 of the Fair Work Act 2009 (Cth) as they did not act in accordance with clauses 8.2 and 16 of the Callide Agreement.

 

The Callide Agreement

 

The Callide Agreement requires that recruitment and selection decisions for new production employees will be based on merit and undertaken with the involvement of up to two employees from the relevant workgroup.

 

The position of "Open Cut Examiner" (OCE) is a role which is classified as a "Production Employee Level 3" under the Callide Agreement. The position of "Production Supervisor" is not a role which is covered by the Callide Agreement.

 

The hybrid: OCE/Supervisor

 

In early 2014, Callide Mine decided that, in order to reduce its costs base, it would employ people in a new OCE/Supervisor position who could provide both Production Supervisor and OCE coverage. The new OCE/Supervisor position was to be a staff position. Employees in that role would be paid a salary higher than a Production Supervisor and would report directly to a Production Superintendent.

 

On or about 14 March 2014, Callide Mine advertised vacancies for the position of "OCE/Supervisor" at the Mine. The positions were fixed term roles, engaged pursuant to common law contracts of employment. Callide Mine hired three OCE/Supervisors in

May and June 2014.

 

The dispute

 

The CFMEU formed the view that Callide Mine had, by advertising for and hiring the OCE/Supervisors, contravened the Callide Agreement. The CFMEU claimed that the OCE/Supervisor role was a role which was covered by the Callide Agreement.

 

Mr Hibble, on behalf of the CFMEU, then sought to put the matter in dispute under the dispute resolution procedure contained in the Callide Agreement. Callide Mine declined to deal with the dispute under the terms of the Callide Agreement on the basis that the OCE/Supervisor role was not covered by the Callide Agreement.

 

The CFMEU then commenced proceedings in the Federal Court. 

 

Callide Mine's Position 

 

Callide Mine accepted that it had not involved two employees from the relevant work group in the recruitment and selection of the new employees for the OCE/Supervisor positions.

 

It was Callide Mine's position that:

 

• As at 14 March 2014, the primary purpose of the OCE/Supervisor position was to perform Production Supervisor duties.
• A subsidiary requirement of the OCE/Supervisor position was to provide OCE coverage.
• The major and substantial part of the work to be performed in the OCE/Supervisor position was to perform Production Supervisor duties.

 

Callide Mine said therefore that the position of OCE/Supervisor was not a position covered by the Callide Agreement and it was therefore not obliged to comply with clause 8.2 of the Callide Agreement.

 

Further, there was no breach of clause 16 as the role was not covered by the Callide Agreement.

 

Callide Mine also said that, irrespective of whether a valid grievance existed, there was no breach of clause 16 as Callide Mine did not prevent the CFMEU from referring any purported grievance to a department manager, a state-wide conference, the Fair Work Commission or a court of competent jurisdiction. 

 

The CFMEU's Position 

 

The CFMEU considered the OCE/Supervisor positions to fall within the coverage of the Callide Agreement because it was a "new Production Employee" role.

 

The CFMEU argued that Callide Mine had not involved two employees from the relevant work group in its decision to create three new positions at the Callide Mine, in breach of clause 8.2 of the Callide Agreement.

 

Further, the CFMEU said that Mr Brunker, one of the new OCE/Supervisors, replaced an OCE named Mr Daly who was classified as a Production Employee Level 3 while he was on long service leave.

 

Although the CFMEU considered the OCE/Supervisor role to fall within the scope of the Callide Agreement, they argued that this was irrelevant to whether the grievance should be resolved in accordance with clause 16 of the Callide Agreement.

 

The CFMEU submitted that the words 'grievance, dispute or claim' and 'arising out of the application of this Agreement' should be construed broadly and imposed an obligation on Callide Mine to deal with Mr Hibble's dispute under the dispute resolution clause. 

 

At First Instance

 

Justice Logan at first instance dismissed the CFMEU's application.

 

Were the OCE/Supervisors covered?

 

Justice Logan held that the evidence showed that the OCE aspect of the OCE/Supervisor position was to be secondary to that of the Production Supervisor aspect.

 

Justice Logan found that the OCE/Supervisor position was not a sham position. His Honour said that such a conclusion would be inconsistent both with the pay for the new position and the way in which holders of the new position came to be rostered.

 

Justice Logan said that the OCE/Supervisor position was a supervisory position, the occupant of which must also be able to undertake, as required, the duties of an OCE. 

 

His Honour commented that the dilemma presented in terms of whether the new position fell within or outside the governing industrial instrument was neither unique to this case or these times.

 

Justice Logan noted that the need inherent in any business to adapt to changes in technology, economic conditions or fresh ideas as to how most efficiently to undertake tasks, not infrequently yields a type of employment entailing duties that were not in contemplation at the time that the particular industrial instrument was made.

 

As his Honour said:

 

A pithy way of putting the same proposition is that both quality and quantity are relevant when it comes to employee classification, subject always to the language employed in the particular industrial instrument. 

 

Had Callide Mine breached the dispute resolution clause?

 

Justice Logan decided that, as he had concluded on the evidence that the new OCE/Supervisor position was not a sham substitute for a pre-existing OCE position filled either by a contractor or an employed OCE, the result must be that the enterprise agreement does not apply to a person employed in the new position.

 

There was no breach of clause 16 of the Callide Agreement and the application was dismissed.

 

The Appeal

 

The Full Court of the Federal Court of Australia, comprising Justices Tracey, Flick and Rangiah, unanimously dismissed the appeal brought by the CFMEU against Justice Logan's decision.

 

Were the OCE/Supervisors covered?

 

The OCE/Supervisor role required additional responsibilities to that of an OCE role.

 

These additional responsibilities were evidenced by:

 

• the description included in the role profile which outlined the key outputs and responsibilities of the role and the requisite qualifications;
• placing the OCE/Supervisor on the same organisational level as Production Supervisors; and
• the considerable increase in remuneration compared to an OCE who received remuneration in accordance with that paid to Production Employees Level 3.

 

These additional responsibilities underscored the significant differences between the OCE/Supervisor role and the OCE role.

Importantly, the Full Court found that it was irrelevant that on any given shift, an OCE/Supervisor would not perform both OCE and Supervisory functions.

 

The Court's reasoning was applied to dismiss the CFMEU's arguments that Mr Brunker's role should have been considered independently of the other two OCE/Supervisor roles awarded.

 

Their Honours unanimously supported Justice Logan's view that an OCE/Supervisor may only be allocated OCE work and conversely, may only be allocated supervisor work, during any set period. 

 

Thus, Mr Brunker's replacement of Mr Daly's OCE shifts did not preclude him from being an OCE/Supervisor.

 

In fact, Callide Mine could require Mr Brunker to perform supervisory work rather than OCE work at any given time.

 

The Full Court also noted that the relevant time period to determine whether clause 8.2 of the Callide Agreement applied was the time the selection process was undertaken. The work actually performed by the OCE/Supervisor after the appointment was irrelevant.

 

The Full Court concluded that the OCE/Supervisor roles were not to be filled by "new Production or Engineering Employees" within the meaning of clause 8.2 of the Callide Agreement.

 

Callide Mine was therefore not required to involve existing employees in the recruitment and selection process. Callide Mine did not contravene the Callide Agreement in this respect.

 

Had Callide Mine breached the dispute resolution clause?

 

Their Honours found that the meaning of 'the application of [the Callide Agreement]' differed in a material way to that of the phrase 'arising out of or in connection with the application or interpretation of this Agreement' in dispute before the Federal Court in Construction, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Thiess Pty Ltd (2011) 212 IR 327.

 

The Full Court accepted Callide Mine's submissions.

 

Their Honours found that clause 16.1 'will not be engaged unless the association between the grievance and the [Callide Agreement] is founded on something more substantial than an assertion that it has application.'

 

Therefore, the dispute resolution clause did not apply because there was no dispute relating to the application of the Callide Agreement.

 

Further, even if the dispute resolution clause had applied, Callide Mine had not contravened it because the process prescribed was a staged and ascending process which might end up with a referral to the Fair Work Commission.

 

At no stage did Callide Mine impede or prevent the referral of the grievance to high levels of management, to the Commission or to a court of competent jurisdiction. 

 

MAKING THE CASE: Insights from Geoff Giudice

 

Section 186(6) of the Fair Work Act 2009 requires an enterprise agreement to contain a provision for settling disputes about, among other things, "any matters arising under the agreement". It has been held that s.186(6) is a minimum and a dispute resolution provision may apply to other kinds of disputes as well. The Callide case graphically shows that the terms of a dispute resolution provision establish the legal limits within which the provision operates.

 

The dispute in Callide concerned an alleged breach of the appointment process provided for in the agreement. The dispute resolution provision applied to disputes about the "application" of the agreement. The appointments concerned were held to be supervisory ones. The Court found that because supervisors were not covered by the enterprise agreement, a dispute about their appointment was not one relating to the "application" of the agreement.

 

The Court went on to express the tentative view that there may nevertheless have been a dispute over the "interpretation" of the agreement. While one might wonder how there could be a dispute about the "interpretation" of an agreement which has no "application", it is clear that the scope of dispute resolution provision can depend upon such differences in wording.

 

Dispute resolution provisions should therefore be drafted with a keen eye not only to the minimum statutory requirements but also to other types of dispute which they might potentially cover.