C2015/293, Transcript of Proceedings [2015] FWCTrans 140 (23 March 2015)

TRANSCRIPT OF PROCEEDINGS

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Fair Work Act 2009                                                     1051523-1

                                                                                                                   

SENIOR DEPUTY PRESIDENT HAMBERGER
DEPUTY PRESIDENT BOOTH
COMMISSIONER CARGILL

C2015/293

s.604 - Appeal of decisions
 
Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union known as the Australian Manufacturing Workers' Union (AMWU)-New South Wales Branch & The Australian Workers' Union and Another

and

BlueScope

(C2015/293)

Sydney

9.59 AM, MONDAY, 9 MARCH 2015

PN1

SENIOR DEPUTY PRESIDENT HAMBERGER: Yes, could I have the appearances please?

PN2

MR A HOWELL: Thank you, your Honour. Howell, initial A on behalf of the appellants.

PN3

SENIOR DEPUTY PRESIDENT HAMBERGER: Thank you.

PN4

MR DARAMS: May it please the Commission, Darams. I appear for the respondent with my instructing solicitor Mr Jay Vido.

PN5

SENIOR DEPUTY PRESIDENT HAMBERGER: Thank you. Mr Howell, I'd just say we have already received your written submissions or written outline of submissions and you can assume that we have read them. But obviously this is an opportunity if you want to elaborate, emphasise, add anything.

PN6

MR HOWELL: Thank you, your Honour. I should say the written submissions are extensive. They're more than an outline and so I'll endeavour to be brief this morning. In the proceedings below the Commissioner was exercising a power of dispute resolution conferred by clause 35 of the agreement, the 2012 Bluescope Agreement which is referred to in the written submissions and I'll take the Commission to it in due course. That dispute resolution provision included the capacity to resolve a dispute by arbitration, and I'll come to that shortly. The background to the matter itself is summarised in the written submissions at paragraphs 1 to 9 and the Commission, having read them, would appreciate that the proceedings below ultimately related to one aspect of a broader dispute arising from a series of changes to the operations of the respondent's Port Kembla steelworks.

PN7

SENIOR DEPUTY PRESIDENT HAMBERGER: Are you in a position to just give us a bit more background on the broader dispute?

PN8

MR HOWELL: There are a series of changes which the respondent seeks to introduce into a number of different work areas. There's change at what's known as the plate mill and there are other changes which operate in other areas. It's perhaps unnecessary to elaborate much more than that, other than to say so far as it is relevant to permission to appeal in this case, in one of those other matters there is a dispute about the capacity of the respondent to introduce what we have said in the other proceedings to be a new classification of work. That is to say, something outside the classification structure contemplated by the agreement and the descriptors, which one has to source elsewhere, but ultimately the descriptors one finds that apply to that classification structure. So, so far as the central contention in these proceedings is or goes to the powers of the Commission to resolve a dispute under this agreement that relates to the implementation of change, what ‑ ‑ ‑

PN9

SENIOR DEPUTY PRESIDENT HAMBERGER: So does that change – as far as you're aware does that rely – does the company – and obviously Mr Darams can tell me if you've got it wrong or don't know, but is that relying again on clause 35?

PN10

MR HOWELL: I can say two things about that. Firstly the case has been run and is presently reserved and, yes, they did rely upon clause 35.2.

PN11

SENIOR DEPUTY PRESIDENT HAMBERGER: Right.

PN12

MR HOWELL: And indeed they relied specifically on the interpretation of clause 35.2 found within this decision in order to support the contentions that they advanced in those other proceedings.

PN13

SENIOR DEPUTY PRESIDENT HAMBERGER: Right. Okay, thanks.

PN14

DEPUTY PRESIDENT BOOTH: And just to clarify, the effect of the decision that upheld the company's right to change would be to add or to change a classification that was in the agreement?

PN15

MR HOWELL: To introduce – or, sorry, I'll put that a slightly different way. To implement a change which includes the adoption of what we have said in the proceedings below - and that itself is the subject of dispute in these proceedings - the implementation of a change that includes the introduction of a type of worker not reflected in the classification structure. So one of the things that we have debated in those proceedings and then ultimately we debate in these proceedings is what is the Commission empowered to do by way of resolution of a dispute of that kind under this agreement.

PN16

It's why you'll see in the written submissions there's – and I won't do this today. I won't go through all that today, but there's quite an elaborate discussion about the interaction between clause 35.2 the implementation of change provision, and clause 5 the no extra claims provision. The same issue does arise in these proceedings but it arises in a slightly different way in these proceedings. The short point is if the Commissioner is right – sorry, I'll take a step back.

PN17

The short point is if the Commission in these proceedings, the Full Bench in these proceedings, accepts what we say about clause 13.1.1 intending to, or being intended to, be a limitation on the capacity to introduce ordinary hours of work shifts in excess of eight, then what the Commissioner has done by way of his decision is permit the implementation of a scheme of work which is inconsistent with the agreement itself, and that ultimately flows through to the remainder of the arguments we run about whether it's consistent with the Act and whether it's consistent with the agreement itself i.e. the section 739 points.

PN18

To reduce that to its bare bones basics - again I won't elaborate upon it because it's dealt with in written submissions, but to reduce that to its bare bones basics, if the decision permits the implementation of a scheme of work inconsistent with the agreement then the decision extends beyond the jurisdiction conferred by section 739 more accurately transgresses the limitation imposed by section 739(5).

PN19

That is to say any decision in relation to a dispute arising under an enterprise agreement cannot result in a decision which is inconsistent with a Fair Work instrument, relevantly the agreement, and it could not permit something to be done that is inconsistent with the Act. If the Commission accepts what we say about 13.1.1 intending to be a limitation, then in essence, substance rather than form I hasten to add, what's being permitted is the implementation of a scheme of work inconsistent with the agreement, in a way which in essence purports to vary the agreement. That is to say to avoid the limitation that we rely upon.

PN20

DEPUTY PRESIDENT BOOTH: Are there any other reserved decisions or are there any other matters arising out of that dispute that are still in play?

PN21

MR HOWELL: There are. There's one other matter that was heard and reserved, I think from recollection before the decision that is the subject of these proceedings. I think it's fair to say though so far as the issues arising in that matter is concerned they are different to the issues that would arise in these proceedings. No doubt clause 35.2 is important to those proceedings but I suppose it's more accurate to confine it to more a merit type style argument than whether or not what is proposed by that additional change is inconsistent with the agreement or not. Does that assist?

PN22

SENIOR DEPUTY PRESIDENT HAMBERGER: Thanks.

PN23

MR HOWELL: Thank you, your Honours. The central issue in these proceedings is articulated in our written submissions – well I shouldn't say our – in my written submissions at paragraph 10. I understand my friend accepts that characterisation, or at least insofar as what's outlined in paragraph 10 in the first sentence. That is to say my friend accepts, if I understand his written submissions, that:

PN24

The central issue in the appeal is whether on its proper construction the agreement permits the respondent to implement ordinary hours shift lengths within a relevant work area -

PN25

Here that is the plate mill, and there has been no challenge in the proceedings to date that the plate mill is a relevant work area for the purposes of the agreement:

PN26

- in excess of eight hours' duration within any 24 hour period in the absence of an agreement between the company and a majority of the employees concerned in the relevant work area.

PN27

SENIOR DEPUTY PRESIDENT HAMBERGER: Sorry, just to jump in again. I'm just trying to get the background, I guess.

PN28

MR HOWELL: Yes.

PN29

SENIOR DEPUTY PRESIDENT HAMBERGER: I mean presumably there have been negotiations designed to try and reach agreement with a majority of employees in that area?

PN30

MR HOWELL: Yes, there were and there was no – I should also clarify. One of the them the – I'll take a step back. The proceedings below were run in a way which was designed to ensure that they would be conducted most efficiently. That meant there were a series of concessions which were made, and one would see from the decision itself there was no cross‑examination of the witnesses. It really resolved itself into an argument about the proper operation of the agreement. There were some submissions put about fairness. Those were resolved against my client. No appeal is taken in that connection. One of the concessions which was made was that insofar as these proceedings were concerned the respondent had complied with its obligation under clause 35.2.3, which I will come to in due course, which was about consultation. Notification, consultation, decision on implementation, subsequent dispute. As I say, I'll come to that.

PN31

SENIOR DEPUTY PRESIDENT HAMBERGER: And this meant actually what, talking to the employees? How many – it's probably in the background but the number of employees affected?

PN32

MR HOWELL: There are approximately 150 employees affected. In terms of the current working situation, if the Commission will bear with me one moment. The statement of Mr Gerovasilis, which one will find in tab 8, the opening tab of appeal book volume 2, between paragraphs 10 and 14 – this is page 593 and 594 of the appeal books – sorry, your Honour. It describes the current situation in the plate mill, so the Full Bench will see there are 150 personnel. There are three particular areas:

PN33

Plate rolling mill –

PN34

Paragraph 11:

PN35

Currently structured to operate three crews on a five day 24 hour operation.

PN36

You'll note in there there's a correction there to the time 7.20 pm. That should be 11.20 pm. That's when that relevant night shift kicks off. But otherwise you'll see that's the description of the current work ‑ ‑ ‑

PN37

SENIOR DEPUTY PRESIDENT HAMBERGER: So some people work – presumably a small number – work a 12 hour shift now?

PN38

MR HOWELL: Yes.

PN39

SENIOR DEPUTY PRESIDENT HAMBERGER: Yes.

PN40

MR HOWELL: In essence those who operate a slightly different shift arrangement to keep the furnace going over the weekend.

PN41

SENIOR DEPUTY PRESIDENT HAMBERGER: Yes.

PN42

MR HOWELL: And things of that kind.

PN43

SENIOR DEPUTY PRESIDENT HAMBERGER: Yes.

PN44

DEPUTY PRESIDENT BOOTH: Do we know how many they number roughly?

PN45

MR HOWELL: From recollection, no, I don't think that was ventilated in the proceedings. It might well be, but I can certainly say that it's a very small number compared to the overall proportion. So in essence the central issue is whether or not this agreement permits the implementation of a working hours arrangement that involves ordinary hours shift lengths in excess of eight in the absence of majority agreement. We say it contains a limitation. That limitation we say arises from clause 13.1.1 of the agreement and it's perhaps convenient to jump off at that point.

PN46

So if I can invite the Full Bench to open the appeal book volume 2 again. I should say – and I apologise for this because it means the Full Bench now has a wealth of paper before it – the industrial history was canvassed in the proceedings below in evidence that was filed on behalf of both sides. There was little difference between them. It's convenient though in these proceedings if I refer – and I should say as a consequence that history is replicated twice in the appeal books, so I apologise for that.

PN47

The more convenient place to find the relevant instruments I think is in volume 2. It's behind tab 11 and so I'll make my references to the agreement contained there. The agreement itself starts at page 829 of volume 2 of the appeal book. You'll see it's the last of a series of instruments which are contained behind tab 11. The reason I say it's the convenient place to find it is I'll take the Commission in a little while to some of the earlier instruments which are outlined conveniently and chronologically in the way that they are.

PN48

So if that's a convenient course for the Commission I'll keep referring to volume 2. Now clause 35 itself is to be found at page 867 of – sorry, I withdraw that. 13 is the provision I'm taking the Full Bench to and one will find that – and of course mine is folded over - at page 847 of the appeal book. Now the construction of clause 13 is dealt with in the written submissions at some length between paragraphs 17 and 21, so I'll endeavour not to repeat myself. But I think it's important that I take the Full Bench to it nonetheless, for the purposes of the argument. So clause 13, the first provision in division 3 of the agreement, hours of work, and the Commission will see 13.1:

PN49

Ordinary hours of work will be an average of 38 per week over the full cycle of the relevant work roster.

PN50

Now I'd note the mandatory language in the next part of this provision, "Ordinary working hours will not exceed" and some parameters are then set out in the fairly typical way that one sees ordinary hours of work provisions outlined:

PN51

Eight hours during any consecutive hours, or up to 12 hours during any consecutive 24 hours where there is agreement between the company and the majority of employees concerned in the relevant work area or one 52 in 28 consecutive days –

PN52

with an exception then outlined. We then have 13.2. Again parameters surrounding shifts to be worked in ordinary hours for day workers and similarly again 13.3 parameters around how ordinary hours are to be worked for shift workers. The particular provision upon which the unions rely is of course 13.1.1:

PN53

Eight hours ordinary working hours will not exceed eight hours during any consecutive 24 hours, or up to 12 hours during any consecutive 24 hours where there is agreement between the company and the majority of employees concerned in the relevant work area.

PN54

Now as we outlined in the written submissions, particularly from paragraph 19 onwards, the language of this provision is very clear and it is emphatic. Its effect is to establish ordinary hours shift lengths within any consecutive 24 hour period – sorry, I withdraw that. To establish max ordinary hour shift lengths within any 24 hour consecutive period and it does so by providing that in the absence of something else, ordinary working hours will not exceed eight hours during any consecutive 24 hours.

PN55

It provides a flexible mechanism for that limitation to be avoided. That is to say up to 12 hours, so it puts caps on it again, the mechanism being the agreement of the majority of the workers to be employed in the relevant work area. The function of requiring that agreement in the context of clause 13 is, in my respectful submission, quite clearly to limit the capacity of the employer to impose ordinary hours shift lengths beyond eight hours. That's its purpose.

PN56

That's its only purpose, and it does that by providing (A) the mechanism for the change and (B) the outcome in the event that there is a dispute. That is to say ordinary working hours will not exceed eight hours during any consecutive 24 hours in the absence of something more. The agreement of the majority is a precondition of the working of shift lengths beyond eight and up to 12. It's quite clearly intended to be a limitation on the capacity to do that, in my respectful submission. Now that really is the nub of the dispute. I should note again – this is really in passing, but clause 40.7 of the agreement - this is in a very different context but clause 40.7 which is to be found at page 879 of the appeal book provides another example of a limitation imposed by the agreement where the limitation is imposed by requiring agreement. So 40.7.1:

PN57

If an employee is required to attend authorised training outside ordinary working hours on a Saturday, Sunday, public holiday or rostered day off the employee will be entitled to the appropriate penalty or by agreement time off in lieu.

PN58

So again the requirement for agreement there is intended to be a limit on the capacity of the employer to provide compensation for the requirements to perform authorised training in the way contemplated by the provision, and it does so by limiting it to those circumstances where there is agreement. Now as I understand my friend's contention, particularly at paragraph 9 of his written submissions, it doesn't cavil with any of those propositions surrounding the operation of clause 13, save and except that they say it doesn’t amount to a limitation, it is simply one of the means by which ordinary hours shift lengths beyond eight can be worked.

PN59

In essence their contention boils down to this: one reads the agreement as a whole, and of course one must. When one reads the agreement as a whole one sees that there's a dispute resolution provision. It includes a dispute resolution provision that operates in the context of change and as such, given the dispute resolution provision in the context of change ultimately results in arbitration, the arbitration mechanism permits one to avoid or in essence override what is otherwise, in my respectful submission, a clear limitation imposed by the terms of clause 13.1.1.

PN60

It was in essence that proposition which was accepted by the Commissioner below, we say erroneously. For my friend's proposition he relies upon clauses 35 and the no extra claims provision in clause 5, but in particular clause 35, so I might take the Full Bench to that now. It will be found in volume 2 of the appeal book commencing on page 867. Now again in the written submissions we canvass the operation of clause 35 in some detail so I won't – it's at paragraphs 54 to 59. I won't elaborate upon it too greatly today but I ought take the Full Bench through it briefly.

PN61

So clause 35 really has three main provisions, 35.1 which is the general dispute resolution provision, the arbitration power I mentioned at the outset is to be found 35.1.7 on page 867 of volume 2 of the appeal book and I'll come back to that in a moment if it's convenient. The second element of clause 35 is the introduction of change including outsourcing provision in 35.2, which one will see commences at page 868, and I'll come back to that. And the third part which can be ignored for present purposes can be found at 35.3 entitled, "Stand down of employees in summary dismissal" and commences on page 871. As I say, that's irrelevant for the purposes of today.

PN62

We come back to 35.2 starting on page 868. Internally one sees again it has really four core parts, or really three core parts and one informs one of them. So the first is the general principles concerning the management of change and you would note from the decision itself the Commissioner relies quite heavily on the existence of subparagraphs (a) and (b), 35.2.1(a) and (b). Subparagraph (c) defines what a change is for the purposes of this agreement, and the parties have conducted the proceedings to day, and others, on the basis that that is the test to be applied by the Commission in the event there is ultimately a dispute which goes to arbitration in relation to the operation of clause 35.2.

PN63

SENIOR DEPUTY PRESIDENT HAMBERGER: So just in terms of even though the disputes procedure at 35.1.1 says it applies with respect to disputes about matters arising under the agreement and in relation to the NES, which on level is quite a – is about as narrow – you have to have that in every agreement. Some agreements have broader dispute resolution procedures. In practice because of this 35.2, leaving aside that any arbitration for example has to be consistent with the agreement.

PN64

MR HOWELL: Yes.

PN65

SENIOR DEPUTY PRESIDENT HAMBERGER: This actually means that any dispute about change potentially is a dispute about the application of the agreement and therefore can be subject to the dispute resolution procedure in a way that wouldn't necessarily be the case under some other agreements. Is that right?

PN66

MR HOWELL: There are specific provisions in 35.2 which direct one back to clause 35.1 and I'll come to those in a minute, but I think the short answer to your Honour's question is yes.

PN67

SENIOR DEPUTY PRESIDENT HAMBERGER: Right. Yes.

PN68

MR HOWELL: Or at the very least to the extent that the agreement otherwise confers a capacity to resolve a dispute more generally than that provided for in clause 35.1, there's no doubt that one can source that conferral of power by reference to other provisions. So I don't know that it really matters greatly as to ‑ ‑ ‑

PN69

SENIOR DEPUTY PRESIDENT HAMBERGER: No, no, I just ‑ ‑ ‑

PN70

MR HOWELL: But the short answer is there is a specific mechanism. So if you go to – and I'll take the Commission to that now. So if we return to 35.2.1. As I say, test outlined in (c), general statement of principles in (a), (b), (d) and (e), and these are overriding principles with respect to the implementation of change. The rubber starts to meet the road when we get to clause 35.2.2. You'll see starting provision, subclause (a):

PN71

Where changes are significant in nature as defined in this subclause they will be the subject of the processes outlined in 35.2.3.

PN72

I'll get there in a moment. Little B deals with those changes that are not defined as significant in nature:

PN73

Changes which are not significant in nature shall be introduced in accordance with the principles set out in 35.2.1 and the provisions of this agreement. Disputes in relation to such changes shall be dealt with in accordance with 35.1, procedures for resolving disputes.

PN74

One then goes to the definition of 35.2.2. I should say in answer to your Honour's question, that's the starting point where one finds a specific conferral of power to engage.

PN75

SENIOR DEPUTY PRESIDENT HAMBERGER: I mean, what I'm saying is it's conceivable in fact you almost don't need that.

PN76

MR HOWELL: Quite. Yes.

PN77

SENIOR DEPUTY PRESIDENT HAMBERGER: But that does make it very clear that you can deal with those kinds of disputes under the dispute resolution procedure.

PN78

MR HOWELL: Quite. When we go to C:

PN79

Change is significant in nature if it has effects on –

PN80

Sorry, I withdraw that:

PN81

- significant effects on -

PN82

I'll start that again:

PN83

Change is significant in nature for the purposes of this clause if the change will have substantial effects on -

PN84

I beg the Commission's pardon, a series of matters which are then outlined, and then (d) there's a clarifying provision:

PN85

Where a change is otherwise provided for in this agreement it will not be regarded as a significant change.

PN86

DEPUTY PRESIDENT BOOTH: Can I just ask you about that?

PN87

MR HOWELL: Yes, your Honour.

PN88

DEPUTY PRESIDENT BOOTH: Did the parties consider that this change was of the nature described in (d) or not?

PN89

MR HOWELL: The submissions that I advanced below, and I otherwise repeat again in the written submissions here, is that this change is within (d) and therefore is not a change that is significant in nature.

PN90

DEPUTY PRESIDENT BOOTH: Because it's otherwise provided for in this agreement.

PN91

MR HOWELL: By the agreement, that's right. Now I should hasten to add though that the only material difference – and I'll show you this in one moment. The only material difference between changes that are significant in nature and those that are not is the obligation to consult.

PN92

SENIOR DEPUTY PRESIDENT HAMBERGER: Yes. Yes.

PN93

MR HOWELL: All right.

PN94

SENIOR DEPUTY PRESIDENT HAMBERGER: Because in fact you've got the – so the two – so the significant changes have to go through the consultation clause. That's right, isn't it?

PN95

MR HOWELL: 35.2.3, yes.

PN96

SENIOR DEPUTY PRESIDENT HAMBERGER: So it is 35.2.3.

PN97

MR HOWELL: Yes.

PN98

SENIOR DEPUTY PRESIDENT HAMBERGER: So this is 35.2.2(a) directs the significant in nature changes to this consultation clause in 35.2.3 and non-significant changes you don't need to do that?

PN99

MR HOWELL: You don't have to consult about, but importantly they nonetheless must be, to use (b):

PN100

Introduced in accordance with the principles set out in 35.2.1 -

PN101

SENIOR DEPUTY PRESIDENT HAMBERGER: Yes.

PN102

MR HOWELL: "And the provisions of this agreement".

PN103

SENIOR DEPUTY PRESIDENT HAMBERGER: Yes. Yes.

PN104

MR HOWELL: So then we come to the consultation provision in 35.2.3 and again it's outlined in the written submissions so I won't elaborate on it too much. But (c), "Consultation will commence". That's when consultation is required to be kicked off, (d) through to (g) describe the consultation process. So (d), how is it kicked off? Well it's kicked off by notification in writing and otherwise consultation is described in (d) through to (g). At the outset I mentioned that there were four parts to this clause. 35.2.4 entitled "Nature of consultation" which is on page 871 is another matter which informs the nature of the consultation contemplated by this first part of 35.2.3 but otherwise that's really its only function. You then come back to 35.2.3 and pick up at (h):

PN105

Following consideration of all aspects of the change including consultation the company will advise employees and relevant unions as to whether or not the company will proceed with the introduction of the change.

PN106

And there's then some detail about how that will be done.

PN107

SENIOR DEPUTY PRESIDENT HAMBERGER: So actually in this case did they – are you saying that the company did actually go through all these steps?

PN108

MR HOWELL: They did ‑ ‑ ‑

PN109

SENIOR DEPUTY PRESIDENT HAMBERGER: Except then obviously when it gets to the end of it, when there's no agreement you say they can't keep on - you know, they've sort of, if you like, voluntarily gone down this path because it's not required to because it's a non-significant change.

PN110

MR HOWELL: Yes. Well, remember this part of the chain – this part, this is one aspect of the dispute ‑ ‑ ‑

PN111

SENIOR DEPUTY PRESIDENT HAMBERGER: It's part of the bigger – yes.

PN112

MR HOWELL: ‑ ‑ ‑ which is a broader suite of changes.

PN113

SENIOR DEPUTY PRESIDENT HAMBERGER: Yes.

PN114

MR HOWELL: And there's no dispute that the broader suite of changes are significant in nature.

PN115

SENIOR DEPUTY PRESIDENT HAMBERGER: Right.

PN116

DEPUTY PRESIDENT BOOTH: So the consultation concerned the package of proposals?

PN117

MR HOWELL: That’s right.

PN118

SENIOR DEPUTY PRESIDENT HAMBERGER: Yes.

PN119

MR HOWELL: And the vice we say lies at the heart of it is of course that what's ultimately the produce of the process here purports to be inconsistent ‑ ‑ ‑

PN120

SENIOR DEPUTY PRESIDENT HAMBERGER: Has to be consistent.

PN121

MR HOWELL: ‑ ‑ ‑ with the limitation.

PN122

SENIOR DEPUTY PRESIDENT HAMBERGER: Yes.

PN123

MR HOWELL: But I'll come back to that. So (h) deals with the ending of the consultation and the employees have to be notified and the union has to be notified, both in writing:

PN124

(j) Where agreement is reached as to change, the change may be implemented immediately.

PN125

Surprise, surprise, and then (k) is where we find the reference to arbitration again. So:

PN126

Where there is disagreement as to the change to be implemented, a party to the consultation process must give written notice to the other parties that it disputes the limitation of the change and must follow the procedures for resolving disputes outlined as per clause 35.1.7.

PN127

Then there's the status quo provision which your Honour, Hamberger SDP, would appreciate I took the Commission to in the context of the earlier stay application, is the status quo provision. We then return to 35.1.7 and again as I've already described. Whether it's a change that is significant in nature or a change that is not, all roads lead to Rome. Ultimately they come back to the arbitration provision. All the arbitration provision – well, I should say firstly the arbitration provision is quite clearly intended to contemplate the full gamut of disputes that might arise under the agreement. It's crafted in very general terms. Insofar as it empowers the Commission to do anything, it's simply charged with the responsibility of providing a resolution to the dispute. Nothing in 35.2 or 35.1 empowers the Commission to do something that is, in my respectful submission, inconsistent with the agreement.

PN128

SENIOR DEPUTY PRESIDENT HAMBERGER: And nor could it actually.

PN129

MR HOWELL: Nor could it.

PN130

SENIOR DEPUTY PRESIDENT HAMBERGER: Because the Act says so.

PN131

MR HOWELL: Quite. Which is ultimately we say underlies ground 5. It's part of the statutory context which informs what the parties had intended when making this agreement. And if the Full Bench otherwise accepts what I say about the proper construction of clause 13.1.1, it's what informs the operation of ground 5 about extending beyond jurisdiction, and again I don't want to elaborate any more generally on that for the purposes of this morning. The point however is that the mechanism that one sees in clause 13 for the implementation of ordinary hours shift lengths in excess of eight is very different to the ordinary hours - the process for the implementation of change contemplated by clause 35.

PN132

Clause 13 internally, as I said before, provides not only the starting point but it provides for the outcome in the event that there is no agreement; ordinary hours will not exceed eight hours during any consecutive 24 hours. It's the interaction between these range of provisions which ultimately informs the debate we had below, and ultimately the debate here. Of course one of the other indicators in the agreement about what the parties intended can be seen by clause 5, which is the no extra claims provision – and I might ask the Full Bench to go to that now. It will be found in volume 2 of the appeal book behind tab 11 at page 835. Two sentences, very simple in its form:

PN133

The parties to this agreement will not make any further claims prior to the nominal expiry date of this agreement.

PN134

The second sentence of course no doubt informs the first:

PN135

This does not however prevent the implementation of change or raising and progressing of issues where provided for by the terms or processes of this agreement.

PN136

So no doubt the second sentence informs what is meant by a further claim in the first sentence. The parties are self‑evident. Indicating that you can pursue certain matters. Certain matters are those provided for by the terms or processes of this agreement, and if I understand my friend's contention correctly, because the dispute proceeded by way of a process contemplated by clause 35, what is contained – or, sorry, the subject matter of the dispute is not a further claim. In other words if one looks at that second sentence:

PN137

---where provided for by the terms or processes of this agreement---

PN138

"Or" should be read disjunctively, and if it's provided for by the processes of this agreement then that is enough. This is again discussed in the written submissions but if one takes that to its logical conclusion that would permit the implementation of almost any change provided it was pursued as part of the processes of this agreement. So one could attach - theoretically at least, on the way that the argument flows - a change to almost any provision within the agreement provided you attached it to a change that was defined as being significant in nature, or indeed a change otherwise. The roads ultimately lead to the same point. That is to say, arbitration.

PN139

In my respectful submission that simply cannot be right because (A) it would be inconsistent with the scheme of the Act but (B) it can't be what the parties have intended because it would read the first sentence out of existence. In my respectful submission a change that is permitted by this agreement is a change that is not only provided for by the processes of this agreement but also is permitted by the terms of the agreement. So one can engage in a process of change which deals with the impact of, or the effect of, a change at the workplace but the scheme provided for the agreement otherwise prevails, so the terms and conditions otherwise provided for in the agreement would prevail.

PN140

That's why I say the real crux of this is whether or not 13.1.1 imposes a limitation on the ordinary hours shift lengths beyond eight. Because if it is understood in that way then it is part, in my respectful submission, of that suite of terms and conditions provided for by the agreement, and it cannot simply be overridden by the pursuit of a change ultimately by way of arbitration. If it intended to operate as a limitation, if the limitation is intended to be conditioned by the majority agreement of the workers within the relevant work area, then one simply cannot override it by the implementation of change because to do so would be inconsistent with the terms of the agreement and amount to a further claim.

PN141

DEPUTY PRESIDENT BOOTH: Mr Howell, was there any discussion below about why the word "claim" wasn't used again in the second sentence? If the parties had intended there to be a subset of claims that could be pursued, would they not have used the word "claim" as opposed to "issue" or "issues"?

PN142

MR HOWELL: No, there was no discussion about it and I understand the point, your Honour, and all I can say is if one understands claim in the way – well, actually I'll take a step back. The reason for that is the parties' understanding on what the word "claim" meant in this context was at one. We were not in dispute at all about what a claim was nor were we in dispute about what a further claim was. This is why I say the debate really came down to whether or not it was enough that a process contemplated by the agreement would permit a particular outcome, rather than whether or not the change itself was consistent with the terms of the agreement.

PN143

It's dealt with in the written submissions. I can find the reference if your Honour would appreciate it. But the short answer is everyone understood that a claim, more accurately a further claim, was either a change that would involve a change or variation to the terms of the agreement or amounted to a material change to the terms and conditions provided for by the agreement. In essence everyone accepted that the construction given to a no extra claims provision, as was adopted by the Full Federal Court in Toyota Motor Corporation v Marmara and subsequently adopted by the Full Bench of this Commission in DL Employment - and I'll give the Commission the full references in due course – was the correct construction of what a claim and a further claim or an extra claim was for the purposes of this agreement.

PN144

So the interaction between 35.2 and clause 5 ultimately boiled down to whether or not the change contemplated – the change that was the subject of dispute was one provided for by the terms or processes of the agreement. It's why I say there is a lack of reasoning in the decision of the Commissioner because, with no disrespect, one will not find in any of the reasoning a discussion about how the language of clause 13 and clause 35 is to be reconciled, how one reconciles the purpose of clause 13.1.1 in the context of this agreement, noting as it must clause 5 and clause 35.2.

PN145

In particular there's no discussion about whether or not this was a change that was significant in nature and, if it was not, how it can be said that what is proposed, that is to say the subject matter of this dispute, the change to ordinary hours of work, was in any way consistent with clause 35.2.2(b). That is to say how it was consistent with not only 35.2.1 but the provisions of this agreement. One sees - and again no disrespect intended to the Commissioner, but one sees no reasoning which comes to grips with the difficulties that arise from the language and structure of the agreement at all.

PN146

There is simply the expression, "I find that these two can live together" - it's in paragraph 35 of the decision – without coming to grips with those various matters. When one applies the test of what amounts to adequate reasons as determined – as is I think it's fair to say well settled and, you know, relevant statement of principle can be found in Barach v University of New South Wales 194 IR 259. Again it's a decision which the Full Bench is no doubt well familiar with so I won't elaborate on it. But one simply does not see any reasoning which enables the parties or the Full Bench to understand how the Commissioner reconciled the relevant provisions.

PN147

I don't mean to be dismissive in describing it in this way but it's simply an ipse dixit that, "I find that these two things can sit together", and one sees that at paragraph 35 of the decision. So we come back to the core issue. The written submissions deal at length with what the unions say the Commission can do in the context of an arbitration in the arbitration contemplated by clause 35.1.7. It's dealt with at length in paragraphs 45 to 90 of the written submissions and I'm sure the Full Bench will be relieved to know I don’t intend to take it through all of those provisions this morning.

PN148

Suffice it to say the end point of those submissions is, as I've articulated a moment ago, any resolution of a dispute by the Commission pursuant to clause 35.1.7 in my respectful submission must be consistent not only with the processes contemplated by the agreement but also by the terms of the agreement itself, most importantly for present purposes including any limitation or parameter in relation to the way work is to be performed as provided for by the agreement. That arises from two key things. One is the language of the agreement itself. That's dealt with in the written submissions at paragraphs 46 to 82, and the other is the statutory context, which is dealt with at paragraphs 83 to 90.

PN149

The point of those contentions, coming back to the central issue in the proceedings, is that in the context of a dispute over a change to ordinary hours shift lengths the agreement does not empower the Commission to override the specific limitation provided for in clause 13.1.1, and for the Commissioner to have concluded otherwise was an error. Why? That's dealt with in the written submissions at paragraphs 22 to 30 but again by way of summary, there are really three reasons. The first is the language of the instrument itself, and I've already taken the Full Bench to clause 13.1.1 and I don't intend to do it again.

PN150

Suffice it to say that the mechanism for the implementation of a change to ordinary hours shift lengths is dramatically different to that which is provided for, for the implantation of change more generally in clause 35.2. That direct inconsistency gives life to the principle of interpretation known as generalia specialibus non derogant. Secondly, it's consistent with the history of the relevant provisions, the interaction between what is now clause 13 and in fact has always been clause 13 and the change provision, which I'll take the Commission to in a moment.

PN151

Thirdly, in the agreement itself the parties have been quite specific in identifying when a change, the implantation of a change, may be done pursuant to clause 35.2 and where it has not. If I can start firstly with the ordinary principle of construction generalia specialibus non derogant. It's a principle which the Full Bench has no doubt canvassed before so I'll endeavour not to repeat it. As I say, it's dealt with in the written submissions starting at paragraph 22. I accept that the principle requires firstly an identification of inconsistency between the two competing provisions.

PN152

That's what we deal with in paragraph 22, or what I deal with in paragraph 22 of the written submissions, and it's in essence what I outlined in broad terms before. 13.1.1, unlike 35.2, is not conditioned by reference to a change that is safe, efficient, legal and fair. There's no qualification to when and how that agreement might be withheld by the majority of the workers in the relevant work area, as provided for in clause 13.1.1 and perhaps more significantly there is nothing in 13.1.1 which in terms contemplates arbitration as a means for the implementation of a scheme of ordinary hours of work involving shift lengths beyond eight hours.

PN153

As I say, there are other provisions in the agreement which indicate where there is an implementation of change dispute that is not agreed. It expressly refers to implementation being pursued through that provision. But as I say, taking it in stage, the principle itself is outlined in paragraph 23. There's a very short extract from the sort of seminal statement of Goodwin v Phillips [1908] HCA 55; (1908) 7 CLR 1 at 14. I don't think the principle needs any more elaboration than that. There are a couple of illustrations of that principle which are referred to – sorry, in the cases which are referred to at paragraph – sorry, I withdraw that – at footnote 31 on page 10 of the written submissions, and I might take the Full Bench briefly to a couple of those illustrations of the principle, and really to inform its operation. But I don't want to delay this too much because again, I'm sure the Full Bench is well familiar with its operation.

PN154

So if I can start by handing up copies of a decision of the Full Bench in Leading Age Services Australia NSW - ACT (2014) FWCFB 129. As I say, it's a relatively recent example of this principle being applied in a context of the interpretation of an industrial instrument, albeit in an award. Your Honours, the proceedings concerned an application for permission to appeal an appeal from a decision of Deputy President Gooley which concluded the two year transitional review of the Aged Care Award, and one will see that in paragraph 1.

PN155

The Commission will see a summary, the summary in paragraphs 2 and 3 of the decision, that the substance of the review undertaken by Deputy President Gooley involved the resolution of a series of applications - in particular I should say from paragraph 3 - a series of applications for variations. The Full Bench would well recall many of the reviews ultimately turned into applications of that kind. In the appeal the employer interests sought to revisit the refusal of three of the variations sought.

PN156

The discussion of variation 1 is the only discussion that I need to trouble the Full Bench with and it's dealt with between paragraph 4 and paragraph 30, and it related to what was perceived to ban inconsistency between the operation of clauses 10 and 22; clause 10 providing for the engagement of part‑time workers and as one typically saw and then sees in modern awards, and as provided for here in clause 10.3(b) and (c) of the award that was the subject of review, it provided that part‑time employees had to be the subject of a specific engagement. That is to say, in writing with hours of work and days of work agreed in advance.

PN157

The conflict that was perceived was the conflict that arose from that requirement for there to be such an agreement and in particular for variations to be in writing, which is 10.3(c) - your Honours will see that on the top of page 3 of 18 - and otherwise the capacity in clause 22.6 which dealt with rosters, for the employer to alter hours of work by the giving of relevant notice, which was 2.6(c), and one will see at paragraph 7 that's a statement of the nature of the issue. Paragraphs 18 to 30, here the Full Bench engaged in what it described as the interpretational contest, how the two provisions were to be reconciled. If we can go to paragraph 18 and 19. In paragraph 18 on page 7 of the report that I handed up:

PN158

Insofar as there is an interpretational contest as to how clauses 10.3(c) and 22.6(c) interrelate with each other, we consider it appropriate to express our views on the subject. Our conclusion is that the effect of clause 10.3(c) is to require any changes to the agreement entered into before the commencement of employment pursuant to clause 10.3(b), including any changes to the number of hours worked each week, the days...

PN159

And so on:

PN160

...to be by further written agreement, and that clause 22.6(c) does not permit the employer to make unilateral changes...The reasons for our conclusion are as follows.

PN161

The first reason identified is this principle of interpretation:

PN162

Clause 10.3 contains a scheme of provisions specific to the subject matter of part-time employment. Applying –

PN163

The relevant principle:

PN164

...the specific provisions of clause 10.3 should be read as prevailing over other more general provisions of the Award in the case of inconsistency unless the context dictates otherwise.

PN165

Can I then invite the – the Full Bench can no doubt read the remainder of paragraphs 18 and 19 at their leisure. Can I ask the Full Bench to then go to paragraphs – sorry, I should say paragraphs 19 to 26 then deal with other matters which were said to be reflective of relevant context, and then in paragraph 27 one sees the application of the relevant principle:

PN166

The appellants’ submissions concerning the effect of clause 22.6(c) and its relationship with clause 10.3(c) suffer from two major flaws. The first is that it leads to a result whereby the requirement for “reasonably predictable hours of work” in clause 10.3(a) is left without any substance...

PN167

And otherwise the Full Bench refers to the fact that they could unilaterally vary the agreement by a rostered change at any time after the employment commenced, upon the giving of the relevant notice. Again 27, 28, 29 can be reviewed at the Full Bench's leisure but I would note at paragraph 29 the Full Bench refers to an earlier Full Bench decision in Transport Workers Union v Qantas Airways Limited (2008) AIRCFB 1198. For present purposes again it's sufficient to have regard to the extract of the TWU decision, paragraph 14, which one will see extracted at page 11 of 18 of the Leading Services Australia decision. Again the Full Bench there identifying a provision of conflict in a significant way:

PN168

The conflict should be resolved by according greater weight to the provisions which deal specifically with changes in part‑time hours. To do otherwise would render those provisions almost meaningless.

PN169

I should say so it is here. If clause 13.1.1 – if the limitation – I'll start that again, sorry. If clause 13.1.1 is intended to provide a limitation on the ordinary hours of work as provided for by the agreement, 35.2 if applied in terms could render it meaningless. It could effectively write it out of the agreement. It would enable that precondition of majority agreement to be rendered meaningless. This, in my respectful submission, is a classic illustration of the circumstances in which one would apply that usual rule of interpretation. That is to say the specific overrides or operates as a proviso to the general.

PN170

SENIOR DEPUTY PRESIDENT HAMBERGER: What about the proposition actually I think you alluded to right at the beginning which is that it could be seen as just one way of doing it. In other words – I'm just trying to think. So yes, you can change it. You can introduce 12 hour shifts, let's say by agreement of the majority of employees. Or you can go through clause 35 but you can only do that – you have to meet all these other tests and then you've got to win an arbitration case, if you like. And so it wouldn't be necessarily saying it has got no meaning, because you could argue it's an alternative way of achieving the same goal. If you didn't have it in there at all – well, you would have to go through the other route to change it. If you didn't have the provision for a majority change – a change by majority for example ‑ ‑ ‑

PN171

MR HOWELL: If 13.1.1 said nothing more than ordinary hours shift lengths will be somewhere between eight and 12 you would still be required to go through clause 35.2 if you wanted to change ordinary hours of work from eight to 12.

PN172

SENIOR DEPUTY PRESIDENT HAMBERGER: No, but this way you wouldn't have to go through clause – if you can get agreement of the workers involved you don't need to go through all that process.

PN173

MR HOWELL: That’s right. But that really is the point. Because they've put in a specific and limited measure that empowers the invocation of that change or the implementation of that change the parties have intended, in my respectful submission, for that provision to govern the field, for want of a better way to describe it.

PN174

SENIOR DEPUTY PRESIDENT HAMBERGER: Yes, that might be right but that's not quite the same as saying the clause would have – even if you accepted that you could alternatively go down the clause 35 to get the change you want, that doesn’t necessarily render completely nugatory, or of no purpose, clause 13.

PN175

MR HOWELL: Save and except that the opening words of clause 13.1 are:

PN176

Ordinary working hours will not exceed those relevant hours identified with the relevant precondition.

PN177

I'd have to accept that it would have some work to do. In my respectful submission the point, however, is it would be given work very different to what the parties had intended. The language of clause 13.1.1 is emphatic and importantly, in light of your Honour's question, it hasn't changed despite the implementation of change provision. It was there back in 2000. Indeed there was a concession made below that it had been there for some time before that, although you won't see that anywhere in the evidence just in the transcript. But so far as the instruments themselves are concerned – and I'll quickly take the Commission through this momentarily – you'll see a provision in identical terms, well almost identical terms, to 13.1.1 in 2000, in 2002 when the change provision starts to come into play, and it is repeated again in 2006 and in 2009 and in 2012.

PN178

What you otherwise will see in the agreement in its current form is – perhaps it can be quickly done in this way, by reference to clause 39 which the Full Bench will find in volume 2 of the appeal book commencing on page 875, and the Commission will there note what we're dealing with here is departmental work agreements. What you don't see in clause 13 however is what you do see in clause 39.4:

PN179

Should the company or relevant employees in a specific department or work area wish to vary or end, this may occur at any time by agreement or...

PN180

Clearly intending to provide another mechanism for the implementation of a departmental work agreement in accordance with 35.2, and I should otherwise note that even in that context the instrument itself still says:

PN181

Provided that any variation or termination must ensure that the minimum entitlements of employees under this agreement are satisfied.

PN182

And one will see that also repeated in 39.3. So again that invites a question of what is the minimum entitlements of employees. Well, in my respectful submission, the limitation contemplated by 13.1.1 is part of that minimum entitlements of employees. They've got the protection and benefit of it. Now clause 39 doesn't directly apply to this case but it's important in the context of reading this agreement as a whole, because where the parties have contemplated clause 35 potentially overriding a limitation that would otherwise arise from the terms of the agreement they have said so. Remembering that clause 35.2 is about the implementation of a change, not about the arbitration of a variation.

PN183

DEPUTY PRESIDENT BOOTH: Mr Howell does 35 have – not the same obviously or you'd have taken us to it differently, but does it have a sort of similar flavour anywhere in any of the words that the change contemplated by – that is processed via 35 need be consistent or need not undermine the minimum entitlements set out in the agreement? Are those words or anything like that there?

PN184

MR HOWELL: No, I'm afraid the – sorry, I'll take that back. So far as change that is not significant in nature is concerned, I think I've taken the Full Bench already to 35.2.2(b) which says change must be consistent with the general principles in 35.2.1 but also the provisions of the agreement.

PN185

DEPUTY PRESIDENT BOOTH: And you believe that the change that we're talking about here is of that character?

PN186

MR HOWELL: Quite.

PN187

DEPUTY PRESIDENT BOOTH: So that's relevant. But in relation to change that is defined as significant in nature there isn't such a reference.

PN188

MR HOWELL: No, that's right. The only other limitation that would arise would be from the operation of 35.2.1(c). That is to say change must be ‑ ‑ ‑

PN189

DEPUTY PRESIDENT BOOTH: Yes, legal.

PN190

MR HOWELL: ‑ ‑ ‑ safe, efficient, legal and fair. Legal of course in this context, in my respectful submission, as outlined in the written submissions must include at least consistent with the Act and consistent with in particular clause 37 and 39 which requires that any decision that arises from a dispute arising under a dispute provision in an enterprise agreement or a modern award must not be inconsistent with the Act or with a Fair Work instrument. This agreement of course being an instrument.

PN191

DEPUTY PRESIDENT BOOTH: Yes, but it would be the case, wouldn't it – just indulge me for a moment.

PN192

MR HOWELL: Certainly, your Honour.

PN193

DEPUTY PRESIDENT BOOTH: I’m interested in this point more generally. That even if a majority of employees – if that provision wasn't in 13.1 about a majority of employees affected, because if a majority is correctly counted then that obviously causes any change to be legal. But if that wasn't there and a change was processed generally through the change provision, but an individual employee wanted to enforce their entitlement to a particular shift length, would they not be free to do that in an enforcement‑appropriate jurisdiction?

PN194

MR HOWELL: I think it's the last point at which I would depart. That is to say if there was a majority and the employer implemented a change then they're not entitled to the more confined treatment.

PN195

DEPUTY PRESIDENT BOOTH: Yes, but I guess I'm thinking more generally about let's take – let's move away from 13 and go to that provision you just referred us to.

PN196

MR HOWELL: 39, yes, your Honour.

PN197

DEPUTY PRESIDENT BOOTH: 39. If everyone agreed that they wanted to do something differently around allowances or shift penalties or something, but the shift penalty provision was still in the agreement, then an individual who didn't agree and wanted to enforce their entitlements under the agreement could pursue their entitlements in an alternative jurisdiction, obviously not the Fair Work Commission but the Federal Court.

PN198

MR HOWELL: I’m sorry, I misunderstood your Honour's question. If your Honour's question is if the – whether the majority agreed or not, absent a variation under division, I think it's 7 of Part 2-4 of the Act. If the majority agreed that you should do whatever the relevant thing is in some different way and the employer purported to do that and it was inconsistent with the agreement, yes, then yes of course the individual could enforce their relevant right and entitlement under the agreement in an appropriate place. I should say there is an individual flexibility provision, confined albeit in its operation as the Act requires, provided elsewhere. What clause 39 deals with is not an individual agreement. It deals with an agreement across the particular department or work area.

PN199

DEPUTY PRESIDENT BOOTH: But staying with the logic then, because we're an arbitral Tribunal and Commissioner Riordan has made a decision, assuming that decision was not quashed by this Full Bench, and yet an individual still said, "I ought not be required to work the 12 hour shifts in the plate mill because there wasn't a majority of employees who agreed to it", then they in your submission would be able to enforce that right.

PN200

MR HOWELL: That gives rise to a number of different and quite difficult considerations. The starting point would be that the parties themselves have conferred upon this Commission a private arbitral jurisdiction to deal with disputes.

PN201

DEPUTY PRESIDENT BOOTH: Yes.

PN202

MR HOWELL: There is nothing which prohibits parties who confer on this place at jurisdiction submitting to a determination of this place on matters of law. So says his Honour Rares J in a matter which I understand my friend will probably refer you to in TWU v Linfox. Albeit it's a step consistent with the Full Federal Court in Wagstaff, albeit it is a step in the resolution of a dispute there's still nothing inconsistent with the idea of the parties referring a binding determination on the Commission. Again provided it's a step in the resolution of a dispute.

PN203

So in your Honour's circumstances that might well create a difficulty in someone trying to enforce an entitlement that was inconsistent with that binding arbitration. It's not the sort of jurisdictional issue which his Honour Rares J considered in the TWU v Linfox case, but it would still - your Honour's question was about enforcing an entitlement under the instrument. That would potentially give rise to an estoppel question and a number of others. But it's a difficult proposition to deal with on the run but I
think ‑ ‑ ‑

PN204

DEPUTY PRESIDENT BOOTH: It's also absolutely fascinating.

PN205

MR HOWELL: It's potentially problematic, but nonetheless I think ‑ ‑ ‑

PN206

DEPUTY PRESIDENT BOOTH: The presiding member will estoppel me in a moment, kick me underneath the Bench. But, you know, in the quest to make awards flexible and responsive to the changing needs of employers and employees it is to me of great interest. But anyway I will not pursue it.

PN207

MR HOWELL: But nonetheless - so returning then to where we started, the agreement itself identifies when the parties have considered implementation of change in a manner inconsistent with the agreement, with a particular term of the agreement, and 39 is an illustration of that. So you can have a departmental work agreement. A departmental work agreement is confined to certain matters. In the absence of an agreement about those matters, it can be implemented in one of two ways, either by agreement or by the pursuit of change. One sees nothing of that kind in 13.1.1. So one is left to infer, on my friend's case, that that's what was intended by the introduction of this general change provision and, in my respectful submission, one can't read 35.2 in that way because it reads the limitation in 13.1.1 out of existence. You would have to insert different words for it to make sense:

PN208

Ordinary hours will not exceed eight hours during any consecutive 24 hours or up to 12 hours in the circumstances currently contemplated by 13.1.1 with the addition of words or as otherwise provided for in the introduction of change provision.

PN209

And that would be a provision of a very different kind. Can I in support of that proposition provide the Full Bench with another Full Bench authority? This is the Australian Licensed Aircraft Engineers' Association v Qantas Airways Limited (2007) 166 IR 388. The head note sets out the sufficient background and before I progress any further I'll leave that to the Commission. So it's in essence the flip side of what you have in this case. There has been agreement to introduce a 12 hour shift, the parties are trying to resile from that agreement, the employer is arguing that one can't simply walk away from that earlier agreement, and the Full Bench comes to deal with that in paragraphs 11 to 13 of the decision, which can be found at page 391 of the report.

PN210

Qantas' submissions depends upon the implication of a limitation on the association's right to agree. The effect of that would be that the association could not withhold its agreement to any shift length up to and including 12 hours if the shift length was demonstrably reasonable or efficient...

PN211

And so on, and I note what's said in clause 13:

PN212

There is another reason to doubt that the framers of the clause intended that it should operate subject to an implication of the kind Qantas supports. The clause prescribes what is to occur if there is no agreement, namely the shifts are to be of eight hours. On its face the clause provides two alternatives only. Shift lengths of no more than eight hours but not exceeding 12 hours may be worked by agreement. In default eight hour shifts must be worked.

PN213

In my respectful submission that's precisely the submission that I've just advanced to this Full Bench and it's precisely the proper construction of clause 13.1.1 of this agreement. Of course 13.1.1 has to be read in the context of the agreement as a whole but nonetheless it is, in my respectful submission, precisely the construction the Full Bench would come to. Now the Full Bench doesn’t use the statement of principle. That is to say it doesn’t identify the maximum of construction generalis specialibus non derogant, but nonetheless this is a classic illustration of it.

PN214

Can I invite the Full Bench to have regard to one other decision, and this one is much closer to home. In fact it involves the same parties and a clause in exactly the same terms, and a contention fundamentally the same as which we advance here, albeit it involves a single member of the New South Wales Industrial Relations Commission before Bluescope's operations were effectively dragged federal. For the record, it's Bluescope Steel Limited v Australian Workers Union (2008) NSWIRC 1054, a decision of Commissioner C published 9 July 2008.

PN215

Now this case involved a dispute over the interpretation of clause 13.1.1 of the Bluescope Steel Limited Spring Hill and CRM Employees Award, which was in identical terms to 13.1.1 in these proceedings. One will see that description in paragraph 1 of the decision. The background to the proceedings is described at length by Commissioner Connor between paragraphs 12 and 43 at a level of detail that I really don't need to trouble the Full Bench with. In short, the workers in a work area at the Spring Hill plant known as the No. 3 Paintline, in particular the painting and finishing – or the paint line was in the painting and finishing department of the Spring Hill site, had agreed to undertake a trial of 12 hour shifts and that trial had been in place for a number of years, and you'll see that from paragraph 15 of the decision.

PN216

For reasons that I don't need to trouble the Full Bench with the workers within the No. 3 Paintline withdrew their agreement to work the 12 hour shifts and the question before the State Commission, which came before the State Commission pursuant to a 146A agreement, a similar conferral of power to privately arbitrate then under the State Act, the central question before the State Commission was, as outlined in paragraph 2, the proper construction of clause 13.1.1. Now the submissions of the parties are summarised over paragraphs 44 to 53. Can I ask the Full Bench to go to paragraph 47? This is a submission of Mr Brotherson, which I apprehend will be almost identical to the submission my friend will make in a couple of minutes.

PN217

DEPUTY PRESIDENT BOOTH: He probably just had to open his filing cabinet and look at 2008.

PN218

MR HOWELL: Quite. Can I then ask the Full Bench to go to paragraph 49. This is the proposition then being advanced by Mr Taylor, now Mr Taylor SC, again entirely consistent with the proposition that I've just advanced to the Full Bench here. One then goes to the Commissioner's conclusions which are recorded from paragraph 58 onwards. Now in particular the principles of interpretation are discussed between paragraphs 58 and 61 and they will no doubt be familiar to the Full Bench and I don't intend to take the Full Bench through them. They refer to Amcor and all of the relevant authorities, but can I ask the Commission to go to paragraph 64? Again this is another well known qualification to the general principles of construction. The Commission says, having been taken to Amcor and what his Honour Kirby J says about making sure one adopts a harmonious construction and one which is seen to be fair:

PN219

I still should not adopt an interpretation of any industrial instrument in a manner which would offend the actual wording of that instrument. The task before me in this hearing –

PN220

And I would respectfully interpose, the Full Bench in this Commission:

PN221

- confined as it is by the section 146A referral agreement, is simply a question of interpretation of Clause 13.1.1 and, as Mr Taylor asserted in his written outline...

PN222

And the Commission can read the remainder for itself. We then go to paragraph 66 and this was the conclusion that the Commissioner reached in those proceedings:

PN223

In this case I am satisfied that the plain meaning of Clause 13.1.1 would permit the revocation by employees of any agreement to work 12 hour shifts at any time, subject only to the proper notice ... The views expressed by the Full Bench –

PN224

I note the authority to which I've just taken the Full Bench -

PN225

would support such a conclusion. The special provisions of Clause 13.1.1 were written into the BlueScope Steel Award in contemplation of the more general provisions of Clause 36 and, to that extent they must be read as a qualification of the obligations to which Mr Brotherson has referred in his submissions.

PN226

I would note otherwise what is said at paragraph 68. That proposition that the Commissioner accepted is, in my respectful submission, entirely accurate. It is entirely consistent with the history of this instrument, and I'll take the Full Bench to that in a moment. But the short answer – the short point is despite the enduring language of clause 13.1.1 – sorry, I'll withdraw that. Despite the introduction of clause 35.2 the language of 13.1.1 has endured. It has continued the same throughout. To make good that proposition can I ask the Full Bench to open again volume 2 of the appeal book behind tab 11, and this time we'll start at tab 11, in particular at page 722. You'll see that this is the BHP Steel AIS Pty Limited Port Kembla Steelworks Employees' Award 2000, then an award of the State Commission.

PN227

If I can ask the Full Bench just to quickly peruse the arrangement provision in clause 2. One will see hours of duty in clause 13. Clause 36 deals with the procedure for resolving claims, issues and disputes. There are a range of other provisions, 42 through to 45, dealing with work redesign agreements and the like. I don't trouble the Full Bench with those. Suffice for the present purposes to go to clause 13, which is at page 735 of the appeal book, volume 2 of the appeal book; 13.1.1 and indeed 13 as a whole in the same terms as we currently find it. This is as at 2000.

PN228

We then go to the next instrument, which was an enterprise agreement which commences at page 778 of the appeal book. This enterprise agreement comes as part of the management of a large dispute. The only reason I mention that is it's not intended to be a comprehensive instrument. You'll see from the – sorry, bear with me for one moment. It has not been reproduced. It appears the relevant part has not been reproduced, but I don't think it's in dispute that this agreement was intended to operate concurrently with the 2000 award which I just took the Full Bench to.

PN229

Suffice to say what one sees by this agreement is the introduction of change provision which one will see at clause 7 of the agreement starting at page 780. Again I don't invite the Commission to read it all at this point. It's simply to trace the history as we move through. We then have the 2006 award which starts at page 792. I should note there is an interim award. There was the enterprise agreement of 2002, there was then an interim award in 2004 of the State Commission. I don’t need to take the Commission to it. 2006 is when we have the full creation of a new instrument.

PN230

Again you'll see clause 13, "Hours of duty". Now you will see clause 36, "Procedures for resolving claims, issues and disputes". Clause 13 one finds at 796, again the same terms as here. Not qualified in any way by the introduction of clause 36 in terms, and I should add of course it didn't need to be in the days of the State Commission. Section 17 of the New South Wales Industrial Relations Act 1996 permitted and still permits the variation of an award both during its nominal term and after its nominal term in certain circumstances.

PN231

One sees that in section 17 the circumstances in which it may be done differ, depending upon whether one is within its nominal term or otherwise. But for present purposes I don't need to trouble the Commission with that too greatly, other than to simply acknowledge section 17 of the 1996 Act in New South Wales would have permitted variation in any event provided one could meet the statutory tests. We then have clause 36 which one finds at page 797, and of course the whole of the award hasn't been reproduced. This is where we see the genesis or the continuing genesis of what is now clause 35.

PN232

So again 13.1.1 continues to be in its present form despite the introduction of change, and then that position is reinforced in 2009, which starts at page 806. Commissioner Cargill transforming the state instrument into a transitional instrument under the federal system as it then was. Again clause 13 in the same terms as one finds today. This is at page 818. Clause 36, here 36.4 starting on page 823, again outlining in some detail the process for the implementation of change, and then we come to the 2012 agreement.

PN233

So throughout, despite the introduction of what is now clause 35.2, clause 13 and the hours of work scheme provided by the agreement has remained the same. It has continued that same precondition - in my respectful submission a precondition - in the hours of work; shift lengths for ordinary hours of work being confined to eight hours absent majority agreement, and in my respectful submission the agreement means what it says and has always meant what it has always said, just as Commissioner Connor determined in the 2008 award; and for Commissioner Riordan to have concluded otherwise was, in my respectful submission, an error. Unless the Full Bench has anything else for me, those are my submissions.

PN234

SENIOR DEPUTY PRESIDENT HAMBERGER: Thanks very much. Thank you.

PN235

Mr Darams?

PN236

MR DARAMS: May it please. Just picking up on the issues that you started asking my learned friend about, about the context of the dispute, would it assist if I provided a bit more information?

PN237

SENIOR DEPUTY PRESIDENT HAMBERGER: Yes.

PN238

MR DARAMS: I'm not sure whether you're ‑ ‑ ‑

PN239

SENIOR DEPUTY PRESIDENT HAMBERGER: If you could, yes.

PN240

MR DARAMS: Just in relation to the other parts of the dispute and what is reserved, one of the specific aspects which is reserved is a proposition by the company to have its trades employees perform work from time to time whilst they were at work that is currently done by non-trade employees, and my friend has referred to that as an introduction of new classification of worker. I must say I thought he came back from that proposition in that case, but we'll see where that lies. So that's basically having the employees who are trades qualified employees from time to time on shift just so we can use their services a bit better.

PN241

Because generally what they do is they fix the machines when they break down and there are periods of time during the day - in addition to when they're doing maintenance work or sort of spot maintenance work, and we want to use their services a bit more efficiently. So that's one part of the dispute. But another part of the dispute is a proposal to outsource work done by certain employees. Now I don't have specific knowledge about that part of the dispute because I wasn't involved in it but that's another part that is of the overall scheme which is reserved before the Commissioner.

PN242

There's obviously a much broader context to this and there's no dispute that the respondents in relation to this here, because the plate mill business is one part of what's called the hot strip mills, and you'll see that background from the Commissioner's decision. There's no dispute that this part of the business, the plate mill, has experienced and is forecasted to continue to experience declining demand for its product. Now at the moment as it currently operates i.e. pre the change, it's structured to deliver about 300,000 tonnes of product per annum. That's with its current structure of three crews working eight hour shifts over five days.

PN243

Now again this issue isn't in dispute, but in the financial year 2016 the estimate is that the company's demand for the product from the plate mill is about 75,000 tonnes per annum less than its current capacity. What the company did – and again this isn't in dispute – it has considered all the alternatives that it could in order to address this specific issue and it decided, and has determined, that the only realistic solution for it is to move to a two crew times 12 hour shift pattern. Now that context was referred to by the Commissioner and he refers in paragraph 37 of his decision that the restructure of the plate mill is fundamental to the survival of the plant. That's not challenged and that's the context with what we're dealing with here, and it will be important when I come to take you in a little bit more detail but with a little bit more emphasis or differ

PN244

DEPUTY PRESIDENT BOOTH: Mr Darams, if the restructure of the plate mill were to proceed in the way in which Bluescope believe is necessary ‑ ‑ ‑

PN245

MR DARAMS: Yes.

PN246

DEPUTY PRESIDENT BOOTH: Would that be accompanied by any redundancies?

PN247

MR DARAMS: Sorry?

PN248

DEPUTY PRESIDENT BOOTH: Would that be accompanied by any redundancies?

PN249

MR DARAMS: Yes, the whole package of changes, noting the other changes to the classification of workers, yes it will result in redundancies. There is a relatively detailed process which goes through where – and this has been canvassed in the conciliation and it's also canvassed as a part of the ultimate decisions as to whether or not the proposals are fair under the rubric in the Act. So all of that is considered and has been taken into account. Specifically to the extent that it was an issue in this decision, and it might not have been such a significant one, it is or has been relied upon in the matter that I appeared personally for that s reserved before Commissioner Riordan in relation to the classification of workers dispute.

PN250

I note that you have read our written submissions and hopefully they are relatively clear as to the differences of what we're advancing in this respect so I won't focus too much on what's in writing. There are some contexts that I need to give in order to understand the company's position. But before I do that I wanted to raise these matters. There's no dispute that the Commissioner did not understand what the parties were asking him to do. There's no challenge here that he misunderstood the question. What he was asked to do was resolve a dispute which had arisen.

PN251

Now some of the cases that are coming out of the Federal Court talk about what Commission members can do in those circumstances, and I'll make good this proposition by reference to some of the cases. But effectively – and I think this is in the Wagstaff Piling decision, Katzmann and Buchanan JJ held that it can't be a condition of the Commission's participation in the private arbitration process, it can't be a condition of that that they get for instance an interpretation of an agreement right.

PN252

It's a matter that is given to the Commission to determine, because obviously it's not a judicial determination, but determining what an agreement means is a part of the dispute resolution process. But that's fundamentally what we're dealing with here, a dispute resolution process, and that's the context which I'm going to ask – submit is how this matter comes before or how it came before the Commissioner and how it comes before you as a Full Bench. Because we finished on it, I just want to note the history of how what is currently clause 35 came into the awards, and my learned friend has just recently taken you to those matters.

PN253

We obviously put a different emphasis on that history. That is, clause 13.1.1, the provision has been around for some time and it was in its – the existence it appears today was in that form when the dispute resolution agreement, as it's known in the agreement now or as it appears in the agreement now, first became part of these instruments. Now the emphasis we play on that is that when one looks at the terms of the dispute resolution agreement and the reference to hours of work, the proposition we make is that clause 13.1.1 clearly, construing the agreement as a whole, is subject to the dispute resolution process, and whatever the result of the dispute resolution process.

PN254

So in answer to some of the submissions that have just been put that while there's no reference like - I think the example used was clause 40.39(sic). If we go to clause 39.4 what we say about that is that yes, there is a reference back in clause 35.2 to clause 13.1.1 and it's specifically raised in the definition of what changes are significant in nature. In this instance, clause 35.2(c)(v). So the parties recognised on the implementation of changes that could be significant in nature, they would form a part of this process. There was no need for the parties to specifically include another provision to that effect.

PN255

DEPUTY PRESIDENT BOOTH: Just pausing, Mr Darams. I take it - I wasn't looking at the actual provision when you were reading that, but I'm assuming you mean the words "hours of work"?

PN256

MR DARAMS: Yes.

PN257

DEPUTY PRESIDENT BOOTH: Yes, so what do you think hours of work mean?

PN258

MR DARAMS: Well, you need to go – it's clearly broad enough – and I'll come in a moment to the Walton recommendation, but just dealing with this question it's clearly broad enough in this context in relation to this to cover those matters in clause 13.1.1, because it's difficult to see other provisions in the agreement which impact upon hours of work. So the proposition here is the change which is proposed impacts upon hours of work, on a reading of those words.

PN259

So that this clause when it was introduced into the agreements between the parties is done in a context where clause 13.1.1 plus the other provisions in clause 13 were already in existence. But the parties recognised that there could be changes which impacted upon those hours of work which would be processed through this agreement and which could ultimately end up in an arbitrated decision.

PN260

DEPUTY PRESIDENT BOOTH: Could a proposal for increasing ‑ ‑ ‑

PN261

MR DARAMS: Sorry?

PN262

DEPUTY PRESIDENT BOOTH: Could a proposal for increasing the hours of work from 38 to 40 ‑ ‑ ‑

PN263

MR DARAMS: Could that ‑ ‑ ‑

PN264

DEPUTY PRESIDENT BOOTH: Could such a ‑ ‑ ‑

PN265

MR DARAMS: Yes.

PN266

DEPUTY PRESIDENT BOOTH: Could that be such a proposal?

PN267

MR DARAMS: Yes. Yes it could.

PN268

DEPUTY PRESIDENT BOOTH: And could the Commission in your submission, exercising the power of private arbitration, decide that the resolution of the dispute was that the ordinary hours of work be increased from 38 to 40?

PN269

MR DARAMS: Obviously subject to any argument about whether it infringed the Act or the like. Yes. Whether it would ‑ ‑ ‑

PN270

DEPUTY PRESIDENT BOOTH: Well, of course we've got the NES so it's a bad example.

PN271

MR DARAMS: Yes. Yes, so you might not get that one through. What this dispute is obviously about is increasing from eight to 12. That's the crux of it and it boils down simply to the company says look, under the dispute resolution mechanism which empowers the Commission to resolve and deal with the dispute, there was sufficiently broad power under private arbitration for the Commissioner to decide that the change could be implemented having regard to whether it was safe, efficient, legal et cetera, and that's the context in which the Commission under the procedure would consider the change.

PN272

Now the agreement obviously of the employees, in my submission, would be something that you would take into account i.e. the lack of agreement here, in determining whether or not the company should be able to implement that change. What I mean by that is that yes, the company hasn't disputed that the provision provides that the change could be implemented by the agreement of the majority. That's clearly what is set out in there. The company's position is that that's not the only way that the change can be implemented, and it can be as part of an arbitrated decision.

PN273

The Commission could take into account the lack of agreement or the views of the employees in determining whether, for instance, the change was otherwise fair. Now that seems to have been what the Commissioner did in this case in relation to the relevant employees' commitments after work et cetera. So it's not that there isn't anything to do with the – sorry, it's not that those words don't have any work to do. They clearly do and they have a circumstance where you would have to go through the detailed consultation process so you could just reach an agreement. Alternatively, as I've just been putting to the Commission, they could be something which would impact upon the ultimate decision to be made by the Commissioner.

PN274

DEPUTY PRESIDENT BOOTH: I have one more question.

PN275

MR DARAMS: Yes.

PN276

DEPUTY PRESIDENT BOOTH: What if the change proposed didn't offend the NES? And I'm thinking of something like a change in start finish times of a shift such as to render the shift subject to one or other shift penalty regimes. Would that be capable of being progressed through the change proposal and determined by the Commission, notwithstanding that the agreement had specific spreads in relation to a particular shift and where an allowance applied to the period of time in that spread.

PN277

MR DARAMS: The answer is yes, and the answer is yes clearly because one goes back to what is set out in clause 35.2.1 particularly (a) and (b), and this is where we see the parties – now my friend, and no criticism, has obviously taken a very technical and strict reading of all these provisions but we all know that the principles of interpretations of enterprise agreements require obviously the context of the provisions to be taken into account but also the fact that the parties – sorry, the agreements are ordinarily drafted by those parties who might not have a particular experience or detailed drafting ‑ ‑ ‑

PN278

SENIOR DEPUTY PRESIDENT HAMBERGER: These are pretty well drafted agreements.

PN279

MR DARAMS: They are.

PN280

SENIOR DEPUTY PRESIDENT HAMBERGER: And these provisions have been around for a long while.

PN281

MR DARAMS: Yes, they are.

PN282

SENIOR DEPUTY PRESIDENT HAMBERGER: I mean, this is a bit different, can I put it to you, from the average enterprise agreement we get to see, to be honest. It looks like it has been very carefully drafted.

PN283

MR DARAMS: And I'll take that to say to the next point. Obviously when you look at 35.2.1, particularly (a) and (b), is the acceptance of the parties of the primacy, for want of a better description, of change in this business. That is change is inevitable. Change must continue, all directed obviously to the viability of the plant and the business, all directed around security of employment and the like. Now they are extremely strong statements of the intention of the parties to the agreement that are expressed in clause 35.2.1(a) and (b).

PN284

There is obviously a little bit of context to this provision which I'd like to take the Commission to. Now what I've handed you all are copies of a decision of Walton J. There's also a decision of the decision of the Full Court of the Federal Court in – well the second one is the Linfox decision of Rares J and then there's a decision of the Full Court of the Federal Court in CFMEU v Wagstaff Piling. Could I just take the Commission to the first of those, being the Walton recommendation. This is a decision of Walton J, or a recommendation, in May 2002.

PN285

The background or the introduction to that is in paragraph 4 and my learned friend referred to this as being a resolution of a significant dispute in 2001 and 2002, essentially involving the spin out of the operations from BHP. Then over at paragraph 49 one sees the start of the recommendations and the Commission there noting that it wouldn't at this stage of proceedings deal with the final form of the instrument which will emerge from the recommendations, but rather make recommendations resolving all of the claims et cetera, et cetera. Now of particular note is paragraph 76 and this is where he says here:

PN286

The parties did not define precisely the areas of change that were intended to be caught by this provision. They should further confer as to that matter. However it is intended that this recommendation will concern the full panoply of changes affecting employees at the workplace including proposals for outsourcing, where those changes are substantial in nature.

PN287

Then one sees in paragraphs 79 and following, certain other recommendations about the process and ultimately these became the clause which ended up in the agreement which is behind tab 11 of the appeal book, being the BHP Steel Port Kembla Operations Agreement 2002, and as my learned friend took you to, to the Full Bench to, those provisions have followed subsequently in the latter agreements. But what we say about that obviously, as we pointed out before, is that there was the insertion of that and the reference to specifically the hours of work needs to be seen in that context. That is, the parties intended the provisions of the agreements which were existing at that time would be subject to this ‑ ‑ ‑

PN288

SENIOR DEPUTY PRESIDENT HAMBERGER: Sorry, where does it say that?

PN289

MR DARAMS: Sorry?

PN290

SENIOR DEPUTY PRESIDENT HAMBERGER: Where does it say that?

PN291

MR DARAMS: This is a submission that we are putting.

PN292

SENIOR DEPUTY PRESIDENT HAMBERGER: You're not saying this says that though, are you?

PN293

MR DARAMS: No, no. Sorry. Sorry, no, putting ‑ ‑ ‑

PN294

SENIOR DEPUTY PRESIDENT HAMBERGER: Right, I thought you were saying the recommendation says that.

PN295

MR DARAMS: No, the recommendation doesn’t say that. The recommendation is obviously very broad. The result of the recommendation that I've just taken you to is the dispute resolution clause in the current – in effect the current terms as it exists. Now that history – I just want to touch briefly on the history because my friend took the Full Bench to firstly the decision of Commissioner Connor in Bluescope Steel Limited v AWU. What we say about those cases or this case in particular, firstly it's clear that that decision was in a different context.

PN296

That is, the Commissioner wasn't being asked to resolve a dispute which Commissioner Riordan was being asked to resolve. It was a very specific question which was put to the Commissioner and he notes that in paragraph 64 of his judgment. So in that case there was already an agreement between the parties on the working with 12 hours and the specific question was whether that agreement could be effectively rescinded. It's not a case whereby a dispute was being processed through the dispute resolution agreement with an arbitrated result at the end.

PN297

Now it's important to note that – so in one respect the benefit that this Commission will obtain from that is limited because we're not talking about the same specific question. And likewise if I could just deal with – sorry, the last point I wanted to make about that is if we do consider paragraph 66 of the decision there are two points we wanted to note about that. My learned friend referred to the first sentence:

PN298

In this case I am satisfied the plain meaning of clause 13.1.1 would permit the revocation by employees of any agreement to work 12 hour shifts at any time, subject only to proper notice...

PN299

Now we don't see proper notice in that clause 13.1.1 so Commissioner Connor was clearly reading something else into it, and my friend skipped over these words:

PN300

...and any obligations which flow from the dispute resolution procedure.

PN301

Obviously we say what that's a reference to is on its face a dispute resolution procedure and what might flow from that. Clearly what he's envisaging here, if the dispute was run particularly that way, that one would go through the dispute resolution process and that would have, or potentially have, some impact on clause 13.1.1. I should just note that we don’t accept the last sentence:

PN302

The special provisions of Clause 13.1.1 were written into the BlueScope Steel Award in contemplation of the more general...

PN303

We say it's the other way around. 13.1.1 was always in the previous agreements and what is now 35.2, or 36 back then, was written in that context.

PN304

SENIOR DEPUTY PRESIDENT HAMBERGER: That clause 13 predates the ‑ ‑ ‑

PN305

MR DARAMS: Correct, yes.

PN306

SENIOR DEPUTY PRESIDENT HAMBERGER: Yes.

PN307

MR DARAMS: Now can I just finish that point, and I think we've made this point in the submissions but I just want to make it again. There would be – and it's a short point, is that given that history, 13.1.1 applying, the Walton recommendation which leads to the quite detailed provision for dispute resolution, the specific reference in clause 35.2.2(c)(v) of hours of work, my submission is it's clear that the parties intended, if one gives this agreement or the proper construction of this agreement, that a dispute about hours of work could be - one, it's a significant issue, but would ultimately result in a process of arbitration; and that arbitration, which is our fundamental point, could result in an increase of the ordinary hours from eight to 12, absent agreement of the employees.

PN308

I wanted to just touch a bit more briefly – in a little bit more detail at the moment on this proposition about the dispute process and what the Commission was empowered to do. Could I ask the Full Bench to go to the Linfox decision. Now at the heart of this decision involved a 739 dispute that was before the Commission as a single member, then the Full Bench. The Commission was being asked to as a part of its process interpret agreements which applied and awards which applied. Then there is a – I want to specifically take the Full Bench to paragraph 18. Here his Honour Rares J is referring to what he sets out in paragraph 17 but also the interrelationship between section 739(5) of the Act which seems to be a significant point relied upon by my learned friend ultimately in this case, and I think it probably all boils down to that, is as the way I apprehend his submissions. Then his Honour discusses the concept of private arbitration and then in paragraph 20 he picks this up:

PN309

In Wagstaff Piling, Buchanan and Katzmann said after referring to what the court had said in the Gordonstone case –

PN310

That being a High Court case:

PN311

“Parties to an industrial arrangement of the kind represented by the agreement could not make it a condition of the valid participation of –

PN312

Here, the Commission -

PN313

in a dispute settling mechanism that any opinion reached or stated be a legally correct opinion.”

PN314

He then does note in paragraph 21 that that was probably obiter. I won't read out paragraphs 22 and 23 but I do invite the Full Bench to read them in the context. But the next paragraphs I'd like to draw specifically to the Full Bench's attention are paragraph 25 in words that are obviously familiar to the Full Bench:

PN315

It is important to appreciate that the statutory scheme under the Act has, as its central foundation, the premise that an enterprise agreement must include a term that establishes a procedure that allows either the Commission, or another person independent of the parties covered by that agreement, to settle disputes about any matters arising under it.

PN316

Then he provides and on-follows and then the next part, you will see from paragraphs 26 and following a consideration of various provisions of the enterprise agreement, and then in paragraph 29 he says here:

PN317

In this case, the decision of the Full Bench necessarily involved the construction of the enterprise agreement and so much of the fair work instruments (being the Federal Award and the State Award) that it incorporated expressly by reference. The Commission’s private arbitral function was to resolve the dispute that had arisen between the parties. Linfox initiated the proceedings by its application to the Commission for the purpose of arriving at a binding resolution of that dispute. Such a resolution was consistent with both the fair work instruments that applied to the parties... and the Act. Indeed, it was the very thing the Act contemplated –

PN318

So he's focussing here on the nature of the arbitration:

PN319

Indeed, it was the very thing the Act contemplated would occur in the regime of dispute resolution that section 186 of the Act required the parties to include in their enterprise agreement. Each of section 739(4) and its cognate provision, section 740(3), contemplated that the Commission or a third person could arbitrate a dispute as a private arbitrator if the parties had agreed to confer such arbitral functions on the Commission or that person. Nonetheless, such a private arbitrator was not capable of making a decision that was inconsistent with the Act or a fair work instrument that applied to the parties.

PN320

In my opinion, there was no inconsistency with the Act (or the two Awards) in the Full Bench’s decision. Such an inconsistency might arise if a private arbitration arrived at an outcome in which one or more employees was worse off overall (see –

PN321

The clause of the award:

PN322

However, that was not an issue in the present case. The construction –

PN323

And this is the point I made before:

PN324

The construction of the fair work instruments by a private arbitrator in arriving at an award is as much a part of what the parties agreed that person could resolve in a binding manner as any other aspect of their dispute.

PN325

Then he refers to Goode v Bechtel in the rest of that paragraph and then in paragraph 31:

PN326

Thus, the Full Bench of the Commission when acting as a private arbitrator under the enterprise agreement had the power, given to it by the parties as a part of their agreement, to decide a question of law, such as the construction of the fair work instruments, in a way that bound the parties in the resolution of that dispute.

PN327

SENIOR DEPUTY PRESIDENT HAMBERGER: Presumably you're going to deal with this but, I mean, we're the Full Bench.

PN328

MR DARAMS: Yes.

PN329

SENIOR DEPUTY PRESIDENT HAMBERGER: I mean, I'm not quite - I suppose I'm jumping ahead a bit about where you're going to take this.

PN330

MR DARAMS: Yes.

PN331

SENIOR DEPUTY PRESIDENT HAMBERGER: But, I mean, it's one thing to say that the Federal Court is not going to intervene even if they think the Federal Court has got this kind of thing wrong. But ‑ ‑ ‑

PN332

MR DARAMS: No. No, what – sorry. No, my apologies.

PN333

SENIOR DEPUTY PRESIDENT HAMBERGER: But that's – and look, I might be jumping – I might be anticipating what you might – and maybe you're not going to argue it, but if you're going to say even if we think Commissioner Riordan has got it wrong, really he's just doing his job and therefore we shouldn't interfere, then it's a bit different - I mean, this doesn’t seem authority for that. Maybe that's not what you're about to say so perhaps I'm being a bit unfair, but.

PN334

MR DARAMS: No, I'll come to the proposition because I'll go to Wagstaff in a moment. Could I pause on there, and clearly what needs to be appreciated is that what the – and this is what I'm saying, there's no dispute here about what Commissioner Riordan was doing. He was resolving a dispute. As a part of that process he was obviously interpreting the agreements and he has come up with a dispute. Now what is being challenged is his decision, so that's an important context in ‑ ‑ ‑

PN335

DEPUTY PRESIDENT BOOTH: But what about all those authorities, Mr Darams, that go to the point that the private arbitration itself must firstly of course draw its authority from the terms of the agreement.

PN336

MR DARAMS: Correct.

PN337

DEPUTY PRESIDENT BOOTH: But also from the constraints imposed by the Act.

PN338

MR DARAMS: Yes, and this authority is inconsistent with that and we're not submitting – and I'll make this submission in a moment about the fact that the ultimate decision being made wasn't inconsistent with the instrument.

PN339

SENIOR DEPUTY PRESIDENT HAMBERGER: Sure. We appreciate that.

PN340

DEPUTY PRESIDENT BOOTH: Right, okay.

PN341

SENIOR DEPUTY PRESIDENT HAMBERGER: I'm sure that's what – yes.

PN342

MR DARAMS: And I think we've encapsulated that in our written agreement(sic) and I think you've understood the argument.

PN343

SENIOR DEPUTY PRESIDENT HAMBERGER: Yes. Yes.

PN344

MR DARAMS: That we've raised in that respect that it's not inconsistent. That is, 13.1.1 is one way in which you can proceed.

PN345

DEPUTY PRESIDENT BOOTH: Yes.

PN346

MR DARAMS: And we say construed as a whole, 13.1.1 read with 35.2 and the power which the Commissioner had in private arbitration in the context of whether the changes were safe, efficient et cetera, that was the other way in which this change can be implemented. Just on a reading of the Act. So we ultimately say he committed no error, which are the bases upon which this appeal proceeds from. So I won't need to take you any further. You understand when I'm not saying that there's a licence to get everything wrong, but what he's exercising there, his power wasn't inconsistent with any of the instruments nor was his decision. So nor was the decision.

PN347

SENIOR DEPUTY PRESIDENT HAMBERGER: But the key issue is whether his decision was – whether he was doing something that was inconsistent with the Fair Work instrument.

PN348

MR DARAMS: Yes, and we say clearly ‑ ‑ ‑

PN349

SENIOR DEPUTY PRESIDENT HAMBERGER: No, I understand you're saying it's not but I'm not quite sure what this decision is adding.

PN350

MR DARAMS: Sorry?

PN351

SENIOR DEPUTY PRESIDENT HAMBERGER: This judgment, the Rares decision. I'm not quite sure where you're saying this takes us.

PN352

MR DARAMS: Well, let me go back one. It's understanding the context of – I apologise, I'll put it back this way. It's to give context to whether the decision of Commissioner Riordan was inconsistent with the Act – sorry, the instrument. The instrument empowered him to resolve this dispute by arbitration. That is ‑ ‑ ‑

PN353

SENIOR DEPUTY PRESIDENT HAMBERGER: Well isn't that but in a manner that's consistent with the instrument?

PN354

MR DARAMS: Could I just ‑ ‑ ‑

PN355

SENIOR DEPUTY PRESIDENT HAMBERGER: I mean, it can only do that.

PN356

MR DARAMS: Sorry?

PN357

SENIOR DEPUTY PRESIDENT HAMBERGER: It can only do that. It can only ‑ ‑ ‑

PN358

MR DARAMS: Because of the restriction in – yes, I accept that.

PN359

SENIOR DEPUTY PRESIDENT HAMBERGER: Yes.

PN360

MR DARAMS: Because of the restriction in 739 ‑ ‑ ‑

PN361

SENIOR DEPUTY PRESIDENT HAMBERGER: And that's the issue, isn't it? I'm not quite sure ‑ ‑ ‑

PN362

MR DARAMS: Yes.

PN363

SENIOR DEPUTY PRESIDENT HAMBERGER: Yes, okay.

PN364

MR DARAMS: Well, I won't press the point.

PN365

SENIOR DEPUTY PRESIDENT HAMBERGER: Okay.

PN366

MR DARAMS: I won't press the point.

PN367

SENIOR DEPUTY PRESIDENT HAMBERGER: Good.

PN368

MR DARAMS: You've understood the specific issue that we raise in any event.

PN369

SENIOR DEPUTY PRESIDENT HAMBERGER: Okay.

PN370

MR DARAMS: Now I just wanted to take you briefly to the CFMEU v Wagstaff Piling again just to note – now I accept there's a reference to this case was dealing with jurisdictional error and the like, and I won't read them out, but just invite the Full Bench to consider these provisions – sorry, these sections. Paragraph 22, paragraph 31 and paragraph 32 and 33, and obviously it's talking about the jurisdiction of the Commission and this is why I started with the proposition that there's no dispute here that what Commissioner Riordan was doing was – there's no dispute that he misunderstood the question he had to determine and there's no dispute that he didn't have the power to arbitrate this dispute. So what these two judges are saying in effect is provided that the decision isn't inconsistent with the Act there is a degree of latitude given in relation to the construction of agreements or power to members of the Commission.

PN371

DEPUTY PRESIDENT BOOTH: May I finish your sentence and just test ‑ ‑ ‑

PN372

MR DARAMS: Sorry, I was waiting for you. Yes.

PN373

DEPUTY PRESIDENT BOOTH: Well that was helpful as it happened. You just said that provided the decision isn't inconsistent with the Act there is a degree of latitude in construction.

PN374

MR DARAMS: Yes.

PN375

DEPUTY PRESIDENT BOOTH: And would you finish the sentence, could you finish the sentence by saying, "And the decision need not be what a court would say was the correct construction of the agreement"?

PN376

MR DARAMS: Absolutely. Absolutely, and that's what Rares J was saying and that's what Katzmann and Buchanan JJ are saying. So that if the point was – again this comes back to Commissioner Riordan was resolving a dispute. He was resolving it in private arbitration. Members of the Commission have a degree of leeway in relation to how they resolve that dispute, excepting obviously the provisions of 739 of the Act. This is what these decisions say. A court might come up with a different conclusion or different construction of an agreement but that doesn’t mean that there is any particular error by the Commission member because they're not exercising any judicial power in that respect.

PN377

So we clearly don't say that Commissioner Riordan got the interpretation wrong, and that's clear from our submissions. But the focus here is on whether or not he understood the question he was asked, whether he made a decision which he was empowered to do, and none of those are disputed. The only thing it therefore seems to turn upon is whether or not the decision was inconsistent with the instrument. It has not been pointed out as to how this decision is inconsistent with the Act and I'm not sure that it's relied upon.

PN378

SENIOR DEPUTY PRESIDENT HAMBERGER: Well if his decision is inconsistent with the agreement then it's inconsistent with the Act, so.

PN379

DEPUTY PRESIDENT BOOTH: It's circular.

PN380

MR DARAMS: Sorry, no, there's no separate ground saying – sorry, I should be a bit more specific. It's not alleged here that the decision is inconsistent with say section 60 something of the Act.

PN381

SENIOR DEPUTY PRESIDENT HAMBERGER: Right.

PN382

MR DARAMS: That's what I'm saying. That's not the allegation here. The allegation here is it's inconsistent with the Act - sorry, the instrument.

PN383

DEPUTY PRESIDENT BOOTH: But it's circular somewhat isn't it?

PN384

MR DARAMS: Sorry?

PN385

DEPUTY PRESIDENT BOOTH: Because if you form a view that the instrument means X and the decision is Y then it is inconsistent with the instrument. And yet earlier you said that you agreed that provided the decision wasn't ‑ ‑ ‑

PN386

MR DARAMS: No.

PN387

DEPUTY PRESIDENT BOOTH: ‑ ‑ ‑ inconsistent with the Act there's a degree of latitude in construction. The decision need not be what a court would say was the correct construction.

PN388

MR DARAMS: Sorry, you just trailed off a bit.

PN389

DEPUTY PRESIDENT BOOTH: Yes, I did. I'm trying to get my head around it basically. Yes, I just had a sense then, an unfinished feeling in the argument, that there was a sort of circularity to it. Because you said I think in the last sentence that a member couldn't make a decision in resolving a dispute that the decision itself was inconsistent with the instrument.

PN390

MR DARAMS: Correct. No, no, and that's what the Act provides.

PN391

DEPUTY PRESIDENT BOOTH: And yet isn't that what the appellant in this matter asserts?

PN392

MR DARAMS: They do assert that and we obviously say it's entirely inconsistent.

PN393

DEPUTY PRESIDENT BOOTH: So therefore we can't stop there in our reasoning. We have to keep going on listening to you to say how it is that ‑ ‑ ‑

PN394

MR DARAMS: Sorry, provided it's not inconsistent – yes.

PN395

DEPUTY PRESIDENT BOOTH: ‑ ‑ ‑ how it is that this decision is not inconsistent with the instrument.

PN396

MR DARAMS: Yes.

PN397

DEPUTY PRESIDENT BOOTH: That's where we have to be satisfied.

PN398

MR DARAMS: Yes. I think we are all on the one page. I think what I'm suggesting, and this will be the submission, our submission is that this will turn on whether or not the decision is inconsistent with clause 13.1.1 because for some reason the Commission could not use the dispute resolution process, the arbitrated dispute resolution process, to implement or permit the company to implement this change. That is the nub of the issue and all of the other arguments that are relied upon really come back to, in my respectful submission, that one point and that's what this case will turn upon. Commissioner, your Honours ‑ ‑ ‑

PN399

SENIOR DEPUTY PRESIDENT HAMBERGER: No, I think so but yes, I'm not quite sure – okay. Yes, I agree basically it's you're saying, "Well, yes, 13.1 can be one way of introducing change".

PN400

MR DARAMS: Correct.

PN401

SENIOR DEPUTY PRESIDENT HAMBERGER: "But there's this other way".

PN402

MR DARAMS: Correct.

PN403

SENIOR DEPUTY PRESIDENT HAMBERGER: "And that if you do it the other way under the more general change management procedure ‑ ‑ ‑

PN404

MR DARAMS: Correct.

PN405

SENIOR DEPUTY PRESIDENT HAMBERGER: ‑ ‑ ‑ then you can effectively not worry about clause 13". Or it might be – yes, you don't need to worry about clause 13. The fact there's no agreement might be a relevant consideration but clause 13, it essentially makes clause – in these circumstances you don't have to worry about clause 13 essentially. That's what you're really saying, isn't it? Because that's just another way to the same – another route to the same outcome.

PN406

MR DARAMS: Yes.

PN407

SENIOR DEPUTY PRESIDENT HAMBERGER: And you've got this other outcome.

PN408

MR DARAMS: Correct.

PN409

SENIOR DEPUTY PRESIDENT HAMBERGER: And he has done – you know, the Commissioner has done nothing wrong in the conclusions he has drawn. That's the case?

PN410

MR DARAMS: Exactly.

PN411

SENIOR DEPUTY PRESIDENT HAMBERGER: Yes. Good.

PN412

MR DARAMS: Yes.

PN413

SENIOR DEPUTY PRESIDENT HAMBERGER: But that's what you've got to persuade us of.

PN414

MR DARAMS: Yes, and hopefully that's what we've been ‑ ‑ ‑

PN415

SENIOR DEPUTY PRESIDENT HAMBERGER: But I mean the problem obviously – and you can sort of beat around the bush but you've got this very, very clearly worded provision that has been in the agreement and its predecessors for many, many years that has a very clear - you know, if you take all the context out, if you like, it has a very clear meaning. And you're saying there's this general provision which deals with change and all sorts of different types of changes. It's expressed in extremely broad terms, and that somehow that is an alternative avenue and you can basically – it essentially overrides clause 13. You don't have to worry about clause 13 if you follow the process in the – I've forgotten the clause number, but the general provision. That's essentially what you're arguing as far as I can see, and that's not an easy argument, can I put it to you? I'm being completely frank with you.

PN416

MR DARAMS: No, I know.

PN417

SENIOR DEPUTY PRESIDENT HAMBERGER: It's not really obvious that that would be the right – because there is the general rule that, you know, the specific overrides the general.

PN418

MR DARAMS: And it's clear from the Full Bench decision that it's all contextual, seen in the context.

PN419

SENIOR DEPUTY PRESIDENT HAMBERGER: Yes, okay.

PN420

MR DARAMS: Now that's what I was – and we’re putting this forward, all the history of the agreement, on that basis. That is the context within which the Commission needs to view the agreement as a whole and the context being that, yes, there was a specific clause, clause 13.1 which existed in the award. But then you have the Walton recommendation on the dispute. Then you have a very detailed disputes resolution process which refers specifically to hours of work.

PN421

SENIOR DEPUTY PRESIDENT HAMBERGER: Well, hours of work is a pretty broad expression, can I put it to you.

PN422

MR DARAMS: Well you need to ‑ ‑ ‑

PN423

SENIOR DEPUTY PRESIDENT HAMBERGER: I mean, it's still very general.

PN424

MR DARAMS: And can I suggest to you why it was used as general words? I go back to what Walton J, now President Walton, said in paragraph 76; it is intended that the agreement would cover the full panoply of changes. So that was the intention of the parties. So then they draft ‑ ‑ ‑

PN425

COMMISSIONER CARGILL: Isn't that more the intention of his recommendation?

PN426

MR DARAMS: The parties implementing that recommendation.

PN427

COMMISSIONER CARGILL: Well that ‑ ‑ ‑

PN428

MR DARAMS: They had to do that and that's what they came up with, and when they did come up with that they included hours of work as a specifically identified matter which would be a change which had substantial effects on and would be a significant change.

PN429

SENIOR DEPUTY PRESIDENT HAMBERGER: But it's going to take something pretty specific to override another clause that - I mean, if they had said, "Well, you know, it will include changes in relation to the introduction of 12 hour shifts" for example, or an increase in the number of hours per shift then you might start thinking, "Well, maybe you'd have to read clause 13 in the context of the broader clause". But hours of work is a very broad provision, a very broad term.

PN430

MR DARAMS: Well only if one then doesn’t construe and consider the rest of the agreement. Hours of work is dealt with in clause 13. Now your Honour has said to me yes, it's a very broad reference ‑ ‑ ‑

PN431

SENIOR DEPUTY PRESIDENT HAMBERGER: But sorry, you can't – but obviously this provision about change, the introduction of change, is about more than the specific clauses. It's not only about things that are covered by the agreement, in a sense. It's expressed in very broad terms. It could be changes in the hours of work that might not be things that are referred to in the agreement, for example.

PN432

MR DARAMS: Potentially yes, but you're suggesting – and maybe I'm reading this wrong. The way I read the suggestion that the broad wording in the clause or potentially broad reach wasn't what the parties intended.

PN433

SENIOR DEPUTY PRESIDENT HAMBERGER: But it's one thing to say it's broad, but it's another thing to say it's broad and also overrides other provisions of the agreement.

PN434

MR DARAMS: Well, the other ‑ ‑ ‑

PN435

SENIOR DEPUTY PRESIDENT HAMBERGER: That would be a very unusual reading of a clause like this.

PN436

MR DARAMS: To be read in the context and if I could go back to – this is why the statement of the principles concerning the management of change are important, and one sees that – again if I could go back to it, clause 35.2.1. It's perhaps no surprise that the parties included those first two principles of their intention. What they were trying to do here is to give as much flexibility, in my submission, as possible to deal with these two matters. That is, the inevitability of change. Now to ask parties at the commencement of the agreement to identify every single specific thing that might ‑ ‑ ‑

PN437

SENIOR DEPUTY PRESIDENT HAMBERGER: Sure.

PN438

MR DARAMS: ‑ ‑ ‑ might be subject to that would be near impossible. You would get a cumbersome agreement.

PN439

SENIOR DEPUTY PRESIDENT HAMBERGER: Of course.

PN440

MR DARAMS: So that's how they record it. So, your Honour, when you refer to the broad nature of it, what I'm suggesting is that that's not necessarily a pejorative or a ‑ ‑ ‑

PN441

SENIOR DEPUTY PRESIDENT HAMBERGER: No, it's not a criticism of it. I'm not criticising the clause. I'm just saying that – no, that doesn't really matter. It's not that there's anything wrong with the clause per se.

PN442

MR DARAMS: No.

PN443

SENIOR DEPUTY PRESIDENT HAMBERGER: It just doesn't - the question is does it do what you say it does?

PN444

MR DARAMS: Yes, and one would have – and then I go back to this. If the clause, if an arbitration or a process, a change – if a change that the company wanted to implement couldn't have the effect of impacting upon what is set out in clause 13 it's the submission it's difficult to see what the reference to those words, hours of work, have to do. So the flip side of that, in our submission, is that what's caught in 13.1 is clearly something which would be subject to the introduction of change and the process that ultimately is the end – sorry, the circumstance which is at the end of that change process, arbitration.

PN445

Because you need to remember here what's said against us and what's said against the Commissioner's decision is that these provisions are mutually exclusive. Now we're trying to say no, here you need to read them in context and that's clearly what he has done here. So once you start on that process you can't deny the end of the process, being the arbitration of the dispute. So yes, your Honour, it's correct that there might be other provisions that would fall within it but the provision we need to focus on is whether or not 13.1.1 is subject to that dispute resolution process.

PN446

DEPUTY PRESIDENT BOOTH: Mr Darams, are you going to talk about the submission that's in the outline of the appellant's submissions in relation to the variation of agreements and the inconsistent ‑ ‑ ‑

PN447

MR DARAMS: Yes, I was ‑ ‑ ‑

PN448

DEPUTY PRESIDENT BOOTH: Or the striking at the heart of the purpose of the Act is to have this process of variation, and that if agreements themselves had self‑referential internal variation provisions then that would be acknowledged by the Act and it isn't.

PN449

MR DARAMS: Yes, we deal with it in our written submissions. We deal with it at paragraph 24 through to 30 and again there is sometimes a little bit of method behind ones madness. The reason I started with the proposition about the Commissioner understanding what he was doing explaining – we're really talking about private arbitration here. We're not talking about a variation of the agreement. We're talking about resolving a dispute in respect of a matter arising under the agreement. Now we do not accept that this decision results in a variation of the agreement.

PN450

If you accept that proposition - because that would be trammelling upon a judicial function – if you accept that proposition, Marmara falls out the window. You're not talking about that because this decision isn't inconsistent - and I've expanded in paragraph 26 in that regard. Marmara is sort of light years away from this sort of circumstance here and in fact could I be – the point about this is the clause in Marmara which was struck down would be the first sentence in clause 5 of this agreement, not a dispute resolution agreement - sorry, my friend is correct. If read down there would be some inconsistency.

PN451

So it's not the dispute resolution agreement here which would be read down, because fundamentally there's no variation of the agreement and that's really what that case, the Marmara case, is directed to. I should just note obviously the workplace - sorry, the Fair Work Act provides several provisions pursuant to which one can vary an agreement or apply to vary an agreement, and this decision doesn't impact upon that or prohibit that actually happening. It provides one mechanism by which it can occur.

PN452

So the short point of it all is there's nothing inconsistent with this decision and / or inconsistent or repugnant to the Act and that's how - one has to read Marmara in that context, and could I also add Marmara really is a decision about a specific clause of a particular agreement which is in distinctly different terms to – well, clearly clause 35.2 but even the no extra claims in Marmara is different to this clause 5 because in Marmara you don't have the second sentence of clause 5 – sorry, a sentence like we have in this agreement.

PN453

Again another acknowledgement of the parties about effectively the importance or significance of continual change within this business, again directed to the viability or maintaining the viability of the plant's operations. The second point is really that issue in paragraph 30, the point we've been discussing a bit, about whether the decision is ultimately inconsistent with the instrument and I don't need to go in any more detail. Was there anything more specific that you needed assistance on in relation to that argument?

PN454

DEPUTY PRESIDENT BOOTH: No.

PN455

SENIOR DEPUTY PRESIDENT HAMBERGER: No.

PN456

MR DARAMS: No. There are just a couple of minor points that I wanted to make. Just in relation to the decision of ALAEA v Qantas that my learned friend took you to, again we say that this case is distinguishable. You really get the distinguishing factor from paragraph 11 of the decision of the Full Bench. Here they were talking about I guess Qantas' submission depending upon the implication of a limitation of a particular right.

PN457

What we say in that respect is obviously what we have in our favour here is clause 35.2, and it doesn’t appear from this decision that there was any other provision of a similar type. The reason I say that is obviously there's a reference in there to efficient and obviously it appears that Qantas tried to use the terminology or the reference to efficiency et cetera. Whereas you'll see from this agreement that in fact they are expressly referred to in the agreement about the implementation of change.

PN458

So they are on a different footing and I guess I can just harp back on it. It doesn’t appear in that Qantas decision that the particular issue that was being decided there was the same as the particular issue here. That is, does this agreement through the introduction and management of change process permit the Commission to make a decision in settlement of a dispute which would allow the company to introduce this change?

PN459

The final point - and I hope that you have understood this otherwise I've floundered – is our proposition obviously is that the construction principles generalia et cetera obviously depend upon context. That's what Leading Age says. The context here importantly is clause 35.2 in this agreement and the types of changes the parties envisaged could be implemented during the life of the agreement and how that context, that is the way that those changes, consultation et cetera leading to the arbitration, impact upon clause 13.1.

PN460

DEPUTY PRESIDENT BOOTH: And on that point, is there anything relevant about the sequencing of the evolution of the instruments, the instrument? The fact that 13.1 is an enduring historical feature and that as the circumstances of the sector and this company in particular became apparent, the change proposals came after that? Is there anything about the sequencing of that?

PN461

MR DARAMS: Well we would rely upon – firstly we've relied upon it to say that Commissioner Connor's decision is - when you look at the actual sequence he's wrong. But secondly, yes, because of the reference to the hours of work in the change provision we say that supports the parties' intention is that the hours of work provision would be subject to a dispute. That is, whilst it provides one mechanism by which the hours can be changed by agreement, it doesn't prevent what happened in this circumstance.

PN462

So it would be read subject to it, even though those provisions have been there for some while. This is just the first time the company has proceeded with a change absent, I guess, agreement. Obviously there was the agreement in the other agreement, the paint line decision, where the parties had themselves agreed to implement 12 hour rosters. But yes, there is some significance and it's the significance in the fact that these clauses, clause 13.1, would be subject to the latter clause coming in.

PN463

Even though it's general it's clear that the parties intended the clause to be general and broad‑reaching because of the dispute that led to the recommendation and because of the statement of the parties' intention about the need to continually change this business in order to remain viable. Which again, as I started, is a finding which the Commissioner has made in this case, that this restructure is fundamental to the viability. Unless there was anything more specific?

PN464

SENIOR DEPUTY PRESIDENT HAMBERGER: No. Thank you very much.

PN465

Mr Howell?

PN466

MR HOWELL: I'll endeavour to be brief by way of reply. Can I start by dealing with the matters that your Honour Deputy President Booth was taking up with my friend at the end. Yes, the sequencing is important and yes, Commissioner Connor got it right when he characterised it in this way at paragraph 66 of that 2008 decision. What the Commissioner said was this:

PN467

The special provisions of clause 13.1.1 were written into the Bluescope Steel Award in contemplation of the more general provisions of clause 36.

PN468

Now what you draw from the chronology is this. The starting point is 13.1.1 is a special provision. It existed in the context of other dispute resolution provisions long prior to the introduction of the significant change provision. What its purpose and function was back then, as much as it is today, was to limit the capacity to implement certain types of ordinary hours arrangements. Its function in 2000 and its function today is the same. It was to operate as a limitation on a very confined subject matter; ordinary hours of work, shift lengths beyond eight hours.

PN469

It is a very limited specie of the general concept reflected in the significant change definition. That is to say a very limited species of a change with respect to hours of work, and my friend says, "Well, the parties must have intended that that broad provision would encapture changes to the ordinary hours of work". With the greatest of respect, the principle upon which I rely does not work unless the two can potentially cover the same field. The whole point of the principle is to understand how two inconsistent provisions, one general, one specific, which operate the same territory are to be understood.

PN470

That is why Commissioner Connor was quite correct when he said back in 2008, "This provision", that is to say 13.1.1, "was introduced" or I should say more accurately reintroduced, continued, persists in the face of the general change provision. In the absence of them having the same operation, the principle of interpretation upon which I rely has no work to do. My friend says, "Well, what work is hours of work to do and what is the reference to hours of work of employees to have in the context of clause 35 in the existing provision?"

PN471

One needs go no further than flip the present factual circumstances on their head. Let us say we were dealing with the circumstance contemplated by his Honour – sorry, by the Full Bench in the ALAEA v Qantas matter or by Commissioner Connor back in 2008. Let's say we had ordinary hours shift lengths that provided 12 hours and the company wanted to reduce them to eight. You'd still be required to pursue the change in accordance with the significant change provision. It's a significant change. It's a significant change to hours of work. Yes, you could pursue it by way of arbitration.

PN472

The rubber meets the road at the next point. What would the Commission be empowered to do in the context of an arbitration? Yes, if it was safe, efficient, fair and legal it could do it. It could say, "Go back to eight hours. By all means, go right ahead". The problem arises because what we are dealing with here is the reverse and the limitation that is imposed by the operation of the agreement. It is a limited species of problem in relation to hours of work and internally clause 13.1.1 provides the mechanism for the implementation of change and the default position in the absence.

PN473

Overlaying 35.2 or reading 35.2 as though it essentially permitted that provision to be read out of existence fundamentally would adopt an approach, in my respectful submission, fundamentally inconsistent with the principles of construction that one would ordinarily apply. In relation to the matters that more generally arise, Wagstaff and the Linfox v TWU decision, can I make two simple submissions. The first thing is we're not dealing here with the jurisdiction of the Federal Court to review for jurisdictional error. We're dealing with a re-hearing arising under the provisions of the Fair Work Act.

PN474

Whether they're jurisdictional error or not, the question for this Full Bench is ultimately whether or not Commissioner Riordan erred in his interpretation of the agreement, which no doubt formed one part of a step in – to use the language in Wagstaff – the resolution of a dispute. So is this Full Bench. This Full Bench is still exercising a function in the resolution of that dispute. It's what 35.1.7 says in terms. The proper construction of the agreement is no less important because it is a step in the context of a dispute resolution than it is in any other – than the proper operation and understanding of an enterprise agreement or an award is in any other context.

PN475

If the Commissioner has erred in his interpretation of the instrument it is self‑evident that it has impacted upon the way he has exercised the substantive power which he subsequently does, that is to say to resolve the dispute. He informs his view about what the operation of the instrument is and says in terms in clause – sorry, not clause, paragraph 35 and paragraph 36 of the decision, "I’m satisfied these two things can live together" and he proceeds to resolve the dispute in that way. In my respectful submission if he has erred then that's an error which this Full Bench, in my respectful submission, should correct, of course permission to appeal being granted. I've dealt with ‑ ‑ ‑

PN476

SENIOR DEPUTY PRESIDENT HAMBERGER: Well I just wanted to ask you what specifically are you asking the Full Bench to do?

PN477

MR HOWELL: I am asking the Full Bench to grant permission to appeal, to set aside his Honour's decision and to make its own decision consistent with – what is it section 607, I think from memory, of the Act - that is in my respectful submission consistent with a proper construction of the agreement. If that is done, the inevitable, the ineluctable conclusion is, if my central argument is accepted, the change cannot proceed because to permit, to make a decision that construes clause 13.1.1 in the way that my friend would have it, that is to see it as only one of a number of ways that could lead to the particular outcome, would be an error. It would be inconsistent with what's contemplated by section 739(5) of the Act.

PN478

That is to say it would be inconsistent with a Fair Work instrument, namely this instrument, and as such the resolution of the dispute - again mindful that the dispute is narrow in these proceedings and is limited to the 12 hour shift arrangement – the resolution of the dispute would be that this is not a change that is safe, efficient, legal and fair in accordance with clause 35.1.7 – sorry, 35.2.1(c) of the agreement. In particular it is not legal because it is not a change contemplated by the agreement that can be pursued through clause 35.2. It is a change which would be inconsistent with the agreement or the provisions of the agreement because it does not involve the majority agreement of the persons working in the plate mill.

PN479

SENIOR DEPUTY PRESIDENT HAMBERGER: What we propose to do actually is to adjourn for about 15 minutes and then we'll come back.

PN480

MR HOWELL: May it please. Thank you, your Honour.

PN481

SENIOR DEPUTY PRESIDENT HAMBERGER: So we'll come back at ten to one.

PN482

MR HOWELL: I should also note if the Commission is considering what it would finally do, there ought be something done with the stay which your Honour imposed earlier in time, one way or another.

PN483

SENIOR DEPUTY PRESIDENT HAMBERGER: Yes, yes.

SHORT ADJOURNMENT                                                                  [12.35 PM]

RESUMED                                                                                             [12.51 PM]

PN484

SENIOR DEPUTY PRESIDENT HAMBERGER: We have decided to give our decision in this matter now. More detailed reasons for our decision will follow at a later date.

PN485

These proceedings concern applications under section 604 of the Fair Work Act 2009 by each of the three unions for permission to appeal and appeal against a decision of Commissioner Riordan on 30 January 2015 under the dispute resolution procedure in the Bluescope Steel Port Kembla Steelworks Agreement 2012. In that decision the Commissioner found a proposed change to the rostering system in the plate mill, which would require employees to work 12 hour shifts, to be safe, efficient, legal and fair and by implication permitted under the terms of the enterprise agreement.

PN486

This is despite a specific provision within clause 13.1.1 of the enterprise agreement that ordinary working hours would not exceed eight hours during any consecutive 24 hours or up to 12 hours during any consecutive 24 hours where there is agreement between the company and the majority of employees concerned in the relevant work area. In reaching his decision the Commissioner relied on clause 35.2 of the enterprise agreement which deals with the introduction of change.

PN487

So in brief we grant permission to appeal, and the appeal, and set aside the Commissioner's decision. We are satisfied that the Commissioner misconstrued the enterprise agreement. In particular we are satisfied that clause 35.2 of the enterprise agreement cannot be used to, in effect, override the quite specific provision in clause 13.1.1, and we will order that the Commissioner's decision be set aside.

PN488

We have no doubt that the company has good business reasons to want to introduce a 12 hour shift in the plate mill. However, if it wishes to do so it must act consistently with the enterprise agreement by which it is legally bound. In the circumstances of this case we find that this means that it must obtain the agreement of the majority of employees concerned in the relevant work area.

PN489

We would strongly encourage the parties to have further discussions to see if agreement can be reached. The Commission would be willing to assist facilitate any such discussions, and the parties are encouraged to contact my chambers so that we can facilitate those discussions.

PN490

We will adjourn now.

ADJOURNED INDEFINITELY                                                         [12.53 PM]