[2012] FWAFB 9782 [2012] FWAFB 9782 Download Word Document FAIR WORK AUSTRALIA DECISION Fair Work Act 2009 s.604 - Appeal of decisions Alan Champion v IGA Distribution (Vic) Pty Ltd (C2012/4487) SENIOR DEPUTY PRESIDENT ACTON DEPUTY PRESIDENT HAMILTON COMMISSIONER GREGORY MELBOURNE, 11 DECEMBER 2012 Appeal against decision [ [2012] FWA 4794 ] of Commissioner Lee at Melbourne on 19 June 2012 in matter number C2012/2816. Introduction [1] This decision concerns an appeal by Alan Champion, who is a storeworker employed by IGA Distribution (Vic) Pty Ltd (IGA), against a decision of Commissioner Lee of 19 June 2012. 1 The decision of the Commissioner concerned an application 2 to Fair Work Australia (FWA) under the “Disputes Procedures” clause of the IGA Distribution Vic. Pty Ltd and Shop Distributive and Allied Employees Association, Enterprise Agreement 2010 (the Agreement). 3 The issue in dispute between Mr Champion and IGA is set out in the Commissioner’s decision. The issue in dispute is whether IGA was entitled, under the terms of the Agreement, to issue a written warning to Mr Champion. 4 The Commissioner determined that the answer to that question is “yes”. 5 [2] At this point it is convenient to refer to the “Disputes Procedures” clause in the Agreement, the clauses in the Agreement relevant to the dispute between the parties and the written warning issued by IGA to Mr Champion. “Disputes Procedures” clause [3] Clause 37 of the Agreement is its “Disputes Procedures” clause. It is a stepped procedure providing for resolution of matters of concern to an employee, initially at workplace level and ultimately by notification of the dispute to FWA “for conciliation and if necessary arbitration”. 6 [4] No party disputed that the Commissioner had jurisdiction to arbitrate the dispute before him. Clauses in the Agreement [5] The dispute before the Commissioner concerned the application of clauses 38 and 39 of the Agreement. [6] Clause 38 of the Agreement is as follows: “ 38. WARNINGS PROCEDURE The parties agree to implement the following Warnings Procedure:- (a) Warnings Where an employee's attendance, punctuality of attendance or work performance is not to the satisfaction of the company, the employee shall be entitled to two separate warnings. (b) Such warnings shall be given formally and shall be in writing. A copy of the warning report shall be given to the nominated representative. (c) The nominated representative (if requested) of the shift in question shall be present at the time of warning. (d) If following the aforesaid warnings the employee's attendance, punctuality of attendance or work performance remains not to the satisfaction of the Company, the employment may be terminated forthwith. (e) Warnings will be removed from the record when a period of nine months has elapsed since the last warning was given.” [7] Clause 39 of the Agreement is as follows: “ 39. ENGINEERED STANDARDS (a) The parties recognise that the introduction of Engineered Standards has, and will continue to result in significant productivity increases. The parties also recognise that the Engineered Standards as a system of work will require continuing commitment by both parties to ensure the system operates in such a manner so as to be fair and reasonable to all concerned. (b) The ‘Agreed Standards’ need to be well maintained so as to reflect work methods in use at the time. Methods and procedures may change frequently and facilities for updating need to be on hand to maintain the consistency of the Standards. (i) Consequently a joint Engineered Standards Consultative Committee will be responsible for maintaining the Standards and to consider and resolve problems brought to its attention by employees regarding the operation of the Standards. The members of the joint Consultative Committee will be trained in the formulation and understanding of the basic application of the Standards. The training will include input by qualified Industrial Engineers. The Committee must establish clear time lines and identify the person responsible to resolve the problem(s). If the problem(s) cannot be resolved in the time allocated the issue will be referred [sic] the nominated representative and senior management of the Company for resolution. (ii) If, into the future, there are reasonable grounds to believe that the basis of a particular standard has changed or is no longer appropriate or fair and reasonable, those trained members of the Committee will conduct a preliminary investigation as soon as possible and will adjust the Standard if necessary to ensure it is appropriate and fair and reasonable. If agreement is not reached on the appropriate remedial action the employee nominated representative and the Company’s State Distribution Manager will discuss the matter in an attempt to resolve the issue. If unable to agree, the issue will be dealt with pursuant to the agreed Grievance Procedure. (c) 100% of the agreed standard will be the target for all storeworkers. The consistent achievement of this target will be measured over the normal weekly work period. All storeworkers will be required to participate in an Associate Technique Review (ATR) as reasonably required. The objective of the ATR is for both the Company and the Storeworker to explore opportunities to improve the likelihood for achievement of the target and to ensure the use of the preferred method of work. The ATR shall not be a substitute or another device for issuing warnings or the like. Initially, a trained and competent Leading Hand should conduct the ATR. Further ATR’s may be conducted by a Supervisor or Management. Remedial action recommended by the ATR should be followed through and its success reviewed. All storeworkers must participate fully and cooperatively in the process of ATR’s. Any reasonable directions to a Storeworker to adopt the preferred methods of work must be carried out. (d)     (i) Each Storeworker shall perform their duties diligently in accordance with the preferred method and conduct themselves in a manner consistent with the principle of ‘a fair days work for a fair days pay’. (ii) Engineered work standards shall be adopted for each defined function in the Distribution Centre. However, insofar as the consistent achievement of ‘the target’ is concerned, its inclusion within an assessment of a storeworkers performance shall be indicative only i.e. (a) No Storeworker shall be terminated merely for not achieving work standards or not achieving the target in an area where standards are established and implemented. (b) No Storeworker shall be subject to unnecessary ATR’s if he/she is diligent and conscientious in his/her work performance and has completed any reasonable retraining requirements. (c) The employer shall be fair and reasonable when expecting each Storeworker to achieve the target in an area where standards have been established and implemented. (e) No Storeworker shall be disadvantaged in his/her employment status or grade if he/she is diligent and conscientious in his/her work performance but is not able to achieve the work standards or the target in an area where standards have been established and implemented. (f) Alleged misconduct and/or unsatisfactory work performance will be investigated and dealt with in accordance with the agreed disciplinary procedure.” Written Warning [8] The written warning issued by IGA to Mr Champion was as follows: [9] We turn then to the grounds of appeal. Grounds of appeal [10] Mr Champion submitted the Commissioner erred in finding that the dispute between the parties should be answered in the affirmative. 7 He maintained this is because, firstly, the written warning issued to him is invalid in its entirety and, secondly, the written warning issued to him is in contravention of the Agreement and therefore beyond power and invalid. 8 [11] In support of these grounds of appeal, Mr Champion submitted: The written warning issued to him was issued solely for his failure to meet the 100% target of the Engineered Standards. However, clause 39 of the Agreement does not permit IGA to issue a warning in relation to the Engineered Standards in a way that applies the target as a mandatory requirement for the employees to whom the Agreement applies. As a result the written warning issued to him is invalid. 9 To the extent the written warning was issued to him partly for his failure to meet the 100% target of the Engineered Standards, the requirements in clause 39 of the Agreement render invalid IGA’s exercise of the power under clause 38 of the Agreement to issue such a warning and, therefore, the warning cannot stand. 10 Consideration of the appeal [12] There was no dispute between the parties that FWA has jurisdiction to entertain the appeal in this matter. We accept that we have jurisdiction to do so. [13] IGA’s submissions to the Commissioner advised that the Engineered Standards are a system through which IGA identifies the time required for an employee to complete the assembly of an order. 11 IGA also has a Standard Operating Procedure in respect of the assembly of orders for dispatch. 12 Sub-clauses 39(c) and (d)(i) of the Agreement require a storeworker to carry out reasonable directions to adopt the preferred methods of work and to perform his or her duties diligently in accordance with the preferred method. [14] Contrary to the submission put to him by IGA, 13 the Commissioner found that the written warning was issued to Mr Champion partly for his failure to meet the 100% target of the Engineered Standards 14 and, by implication, not solely for that reason. [15] In our view, when properly read, it is apparent that the written warning was issued to Mr Champion because of his unsatisfactory work performance, rather than solely or even partly because he failed to meet the 100% target of the Engineered Standards. [16] The unsatisfactory work performance of Mr Champion was his persistent departure from the Standard Operating Procedures, for which he had failed to acknowledge accountability. For example, his rehandling of boxes, the insufficient bending of his knees and the insufficient urgency in his work. It was a departure which was evident from the Associate Technique Reviews (ATRs) conducted in respect of Mr Champion over a period of time. The objective of the ATRs being “to explore opportunities to improve the likelihood for achievement of the target and to ensure the use of the preferred method of work.” 15 Further, it was a departure which persisted despite weekly support sessions from IGA management. [17] We recognise that in the written warning IGA states that it has “reiterated many times the expectations of all employees that they must achieve 100% on all functions in their capacity as store men” and that the action required of Mr Champion is to “reach and maintain the required agreed company standard of 100% over the following month”. However, in the written warning IGA also recognises there may be a valid or satisfactory reason why the 100% target or the standards are not met. This recognition is consistent with sub-clause 39(d)(ii)(c) of the Agreement and qualifies the tenor of IGA’s other statements in the written warning regarding the target or standards. [18] We also recognise that the written warning states that it is based on Mr Champion’s regular and consistent performance in relation to the expected engineered standard, and contains other references to Mr Champion’s achievements in relation to the target or standards. However, we note that sub-clause 39(d)(ii) of the Agreement provides for a storeworker’s achievement of the target to be included within an assessment of a storeworker’s performance on an indicative basis and for alleged misconduct and/or unsatisfactory work performance to be investigated and “dealt with in accordance with the agreed disciplinary procedure”. 16 The parties agree that the “agreed disciplinary procedure” is the warnings procedure, including the written warnings for unsatisfactory work performance, in clause 38 of the Agreement. We think that the references to Mr Champion’s achievements in relation to the target or standards are similarly included in the written warning on an indicative basis. As we have indicated, they are not the actual reason for the written warning. Documents of this kind, as with awards and agreements, have to be read in full and in context. A narrow or pedantic approach to them should not be taken. [19] The Commissioner’s finding to the effect that the written warning does not offend sub-clause 39(c) which requires that ATRs are not to be a substitute or another device for issuing warnings or the like 17 was not challenged on appeal. Nor was his finding on the consequences for the validity of the written warning of who conducted the ATRs for IGA. 18 We concur with them. [20] In our view, the written warning is not contrary to clause 39, including its sub-clauses 39(d)(ii)(a) and (e). It does not involve Mr Champion being disadvantaged in his employment status or grade because he is not able to achieve the target or standards. Nor does it concern him being terminated for not achieving the target or standards. [21] Since clause 38 of the Agreement provides for a written warning to be given to an employee for their unsatisfactory work performance and the written warning issued to Mr Champion was for unsatisfactory work performance by him, we concur with the conclusion of the Commissioner that IGA was entitled under the terms of the Agreement to issue the written warning dated 6 February 2012 to Mr Champion. Conclusion [22] The appeal before us was premised on the written warning having been issued to Mr Champion solely or partly for his failure to meet the 100% target of the Engineered Standards. We have found that was not the reason for the written warning. [23] However, we grant permission to appeal in the public interest and otherwise. The appeal concerns the interaction between the warnings procedure and engineered standards clauses in the Agreement, which are similar to clauses in a significant number of other enterprise agreements. Further, the Commissioner wrongly concluded that IGA regards achievement of the 100% target of the Engineered Standards as a mandatory requirement. 19 As a result, the Commissioner erred in his finding as to the reason IGA issued the written warning to Mr Champion 20 and his finding that the warning was not invalid “in its entirety”. 21 As we have intimated, we consider the written warning was entirely valid. These findings of the Commissioner were material to his determination that IGA was entitled under the terms of the Agreement to issue the written warning to Mr Champion. [24] Nonetheless, for the reasons we have given, we concur with the conclusion of the Commissioner that IGA was entitled under the terms of the Agreement to issue the written warning dated 6 February 2012 to Mr Champion. We therefore confirm the Commissioner’s determination in that regard. SENIOR DEPUTY PRESIDENT Appearances : J. Bornstein , solicitor, for Alan Champion. J. Forbes , of counsel, for IGA Distribution (Vic) Pty Ltd. Hearing details: 2012. Melbourne: October 15. Endnotes : 1 Alan Champion v IGA Distribution Pty Ltd , [2012] FWA 4794 . 2 Alan Champion v IGA Distribution Pty Ltd , C2012/2816. 3 AE882362 4 Alan Champion v IGA Distribution Pty Ltd , [2012] FWA 4794 at paragraphs 6 and 76. 5 Ibid at paragraph 77. 6 IGA Distribution Vic. Pty Ltd and Shop Distributive and Allied Employees Association, Enterprise Agreement 2010 at clause 37(d). 7 Appeal exhibit B1 at paragraph 51. 8 Ibid at paragraph 21. 9 Ibid at paragraph 22. 10 Ibid at paragraph 23. 11 Written submissions of IGA Distribution (Vic) Pty Ltd of 27 April 2012 in matter C2012/2816 at paragraph 24. 12 Ibid at paragraph 18. 13 Ibid at paragraphs 72 and 87. 14 Alan Champion v IGA Distribution Pty Ltd , [2012] FWA 4794 at paragraphs 62-66. 15 IGA Distribution Vic. Pty Ltd and Shop Distributive and Allied Employees Association, Enterprise Agreement 2010 at clause 39(c). 16 Ibid at clause 39(d)(ii)(f). 17 Alan Champion v IGA Distribution Pty Ltd , [2012] FWA 4794 at paragraphs 67-70. 18 Ibid at paragraphs 71-73. 19 Alan Champion v IGA Distribution Pty Ltd , [2012] FWA 4794 at paragraphs 62-63 and 66. 20 Ibid at paragraphs 62-66. 21 Ibid at paragraph 66. Printed by authority of the Commonwealth Government Printer <Price code C, PR531464>