PR942189 PR942189 Download Word Document AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION Workplace Relations Act 1996 s.99 notification of industrial dispute Construction, Forestry, Mining and Energy Union and Wambo Coal Pty Limited (C2003/2697) Coal industry COMMISSIONER ROBERTS SYDNEY, 18 DECEMBER 2003 Re disciplinary action. DECISION [1] This decision concerns a dispute notified by the Construction, Forestry, Mining and Energy Union (the CFMEU or the Union) on 27 May 2003 pursuant to s.99 of the Workplace Relations Act 1996 (the Act) over the interpretation and application of clause 21 ("Discipline") of the Wambo Coal Handling and Preparation Plant (CHPP) CFMEU Certified Agreement 2001 (the Agreement) by Wambo Coal Pty Limited (Wambo or the Company). [2] The matter first came before Senior Deputy President Drake on 11 June 2003 in Sydney. That hearing was followed by conciliation between the parties presided over by her Honour. The matter next came before her by way of teleconference on 24 June 2003. The matter was subsequently referred to me for arbitration and came before me on 11 July 2003 for mention and programming and for arbitration on 27 August 2003. The CFMEU was represented by Mr K Endacott and Wambo was represented by Mr A Longland of Freehills Solicitors. Mr W Riley and Mr J Musgrove were called by the CFMEU to give evidence, their witness statements were marked as Exhibits A1 and A2 respectively. Mr P Brooker was called to give evidence for Wambo, his principal and supplementary witness statements were marked as Exhibits R1 and R2 respectively. Background [3] On Thursday 17 April 2003, at approximately 7.10 pm, Mr Wayne Riley, an Electrician at Wambo's Coal Handling Preparation Plant (CHPP), was involved in an incident (the Incident) resulting in a chitter truck colliding with the raw conveyor belt. Chitter is reject material from mining operations. This collision caused minor damage to the truck but considerable damage to the belt, resulting in repair costs to Wambo of around $100,000.00. Mr Riley was asked for, and provided, a written report on the Incident which was provided to the Company at around 11 pm on 17 April 2003. [4] The Incident was investigated by Wambo and on 6 May 2003 Mr Riley was notified of his suspension from duty for a period of five shifts, without pay. He returned to normal duties on 13 May 2003. [5] The CFMEU maintained that the penalty imposed on Mr Riley was not imposed in accordance with the provisions of clause 21 of the Agreement. In the CFMEU's view: " The Company was not permitted under a true operation and interpretation of the Discipline clause of the Certified Agreement to suspend Mr Riley on 6 May, 2003. " (Exhibit A3) [6] Mr Endacott submitted that the resolution of this matter: "... ultimately requires the Commission to interpret the operation of Clause 21 Discipline of the Certified Agreement generally and sub-clause 21.3.4 and 21.3.5 of the Agreement specifically ." (Exhibit A3) [7] Subclauses 21.3.4 and 21.3.5 of the Agreement provide: "21.3.4 Suspension of an employee will be undertaken only on those occasions where the employee has previously been counseled or re-trained other than those occasions where the offence warrants immediate suspension. 21.3.5 Dismissal of an employee will be undertaken only on those occasions where the employee has previously been counselled or re-trained other than those occasions where the offence warrants immediate dismissal." Evidence of Mr Riley [8] It was Mr Riley's sworn evidence and witness statement (Exhibit A1) that: He was first employed by Wambo around 1988 and was retrenched in October 1998. He returned to Wambo in October 2000. He is employed as an Electrician performing electrical maintenance and fault finding. In addition, he has been trained up to operate the CHPP and to operate heavy mobile equipment. Prior to the Incident, he had never been warned or counselled about any aspect of his employment and had never been required to undergo retraining of any kind. [9] On 17 April 2003 he was instructed by his Supervisor (Mr G Ballantyne) to empty the chitter bin and proceed to a chitter dump known as Charlie's Hole. After discharging the load: " I then operated the override switch in order move the truck forward to empty the last of the load, and at the same time operated the down lever to return the back of the truck to a horizontal position. Believing that the back of the truck had fully returned to this position, I started to return to chitter bin ." (Exhibit A1) [10] The distance from the dump site to the chitter bin is approximately 600 metres. He maintained a safe operating speed on the return trip but: " The safety feature of the truck was negated because the truck would normally not be able to move in a forward direction whilst ever the back of the truck is raised ." (Exhibit A1) [11] Mr Riley's evidence went on to say that: Lights from the dump area were shining in his eyes as he left the dump site. The route was rough and he was not aware that the back of the truck had remained in a raised position. He noted an intersection that occurs approximately 30 metres from the dump site. That intersection is not directly lit and is "... of a tight nature so care and attention needed to be taken to negotiate this intersection, as well as the rest of the route back to the chitter bin. " " As I approached the belt that I was to pass under, I noticed the loop take-up shake slightly and I immediately applied the brakes of the truck, which was only travelling at approximately 5 kilometres per hour. It was at this point that I realised I had come in contact with the belt, and I immediately contacted the control room and requested the belt to be stopped, and I also contacted my supervisor that his attendance was immediately required. I wasn't aware of how much damage may have occurred and I had a concern that the overhead conveyor may collapse. I kept the truck in this position until a proper assessment of the safety of the truck and the belt structure could be carried out ." (Exhibit A1) Mr Ballantyne inspected the site of the Incident and concluded that it was safe to move the truck away from the belt structure. An inspection of the truck and the belt was then carried out. Mr Ballantyne requested him to write a report concerning the Incident, this report was handed to Mr Ballantyne at the end of Mr Riley's shift at 11 pm. The shift worked on 17 April 2003 was his last before proceeding on the Easter break. He returned to work on 23 April 2003 and continued to carry out his normal duties. He was not asked to provide further details about the Incident. On commencement of his shift on 6 May 2003 he was called to the Manager's office. Also present at the subsequent meeting were Mr G Musgrove, the CFMEU Lodge Secretary, Mr P Brooker, the Plant Manager and Mr H Upward, the Production Supervisor who was tasked to carry out the Company's investigation of the Incident. At the meeting, he was handed Mr Upward's written report. At the conclusion of the meeting, he was given a letter dated the same day and signed by Mr Brooker advising him of his suspension from duty without pay for five shifts. He returned to work on 13 May 2003 and resumed normal duties. He is still employed at Wambo. On returning on 13 May 2003, he "... noticed that the lower lever for the back of the truck was still faulty and staying in the down position after being operated." (Exhibit A1) He reported the fault in writing to Mr Ballantyne. No action was taken and he reported the fault on three consecutive days without result. He then approached Mr Upward to inform him that the fault had not been repaired. Mr Upward was unaware of any continuing problem with this lever "... and I suggested to him that a better system needed to be put in place to make sure these and other issues were addressed accordingly. The faulty lever on the truck was subsequently repaired the following day. " (Exhibit A1) [12] "Substantial changes have been made since the incident that occurred on 17 April, 2003 to the truck and the chitter route. These include:- An audible alarm was fitted to the truck to make the driver aware when the body is raised. Significantly improved lights have been fitted to the front of the truck to allow for easier and safer night operation. The route to the chitter bin was changed so that there was no need for the truck to travel under the belt structure or to come in close proximity with the rest of the plant. The road surface of the route near the chitter bin, which was once unlevel, slippery and made driving conditions difficult, has now been levelled and improved considerably. As has been put in place at other mining operations, the Company is in the process of installing a safety wire on the chitter route near the plant . This will make the driver aware if the back of the truck is in the raised position prior to reaching the plant and chitter bin ." (Exhibit A1) [13] Mr Riley said that had the above changes been in place prior to the Incident: "... this accident would not have occurred. " (Exhibit A1) [14] Under cross-examination by Mr Longland, Mr Riley agreed that he had some fourteen years' experience in the coal industry and had been driving a truck at Wambo for approximately twelve months at the time of the Incident. On average, he would have made about ten truck driving trips per week. [15] Mr Riley confirmed that he had produced a written report immediately following the Incident and given that report to Mr Ballantyne. He denied that he was aware, prior to 6 May 2003, that the Company was conducting an investigation into the Incident and that his written report would be used in that investigation. [16] Concerning the Incident itself, the following exchanges occurred between Mr Longland and Mr Riley: "Now, on the night in question, the rear of the truck collided with the conveyor. That is right, isn't it?---Yes. The conveyor suffered up to $100,000 worth of damage. You don't dispute that, do you?---I'm not disputing it. It sustained substantial damage. Yes. Yes. You have driven under that very same conveyor in that very same truck on that very same road at approximately 1000 times, haven't you?---Yes, well, they have been numerous. Yes. You don't seriously say that your conduct wasn't a substantial cause of this incident? You accept that you were at fault?---I accept that I made an error. Yes?---Yes. You don't have any argument, do you, that the company has a responsibility to take some disciplinary action, does not it?---Yes, I guess I would dispute that. Right. So you are disputing that the company has a responsibility to take disciplinary action? You are suggesting that the company should do nothing? Is that your suggestion?---I'm suggesting that they look at your track record. They look at the amount of years that you've been working with that company and they look at the incident under the accident that happened and with comments that have been made to me by some of the company, that I didn't believe that I was an employee that they needed to take disciplinary action on. Let me ask you this question. Because you'd done that more than 1000 times and because you are an experienced mine worker, it wasn't necessary for you to be trained in how to drive the truck. You knew how to drive the truck. Do you agree with that?---You are talking trained or retrained? Retrained?---Right. No, I don't believe I - - - That would have been - - - ?---I don't believe that I was required - that I needed any particular extra instruction on the truck. Right. This is the case of an employee who knows what to do, has demonstrated 1000 times that he can do it, who made a mistake?---Yes." (Transcript PNs217-227) Evidence of Mr Musgrove [17] It was Mr Musgrove's sworn evidence and witness statement (Exhibit A2) that: He had worked for the Company since May 1984, first as an Underground Fitter and since 1987 as an Operator/Fitter at the CHPP. He is the Wambo CHPP CFMEU Lodge Secretary and has held that position since October 1997. As part of his duties as Lodge Secretary, he has been a member of the Negotiating Committee for the certified agreements that have regulated work at Wambo CHPP. He was present at the CHPP when the Incident occurred. He attended the site of the Incident and inspected the damage. On 17 April 2003, Mr Ballantyne had completed an Incident Report and Mr Riley had been requested to prepare a statement as to what had occurred. Work at the CHPP resumed after the Easter break on the evening of 22 April 2003. He had returned to work on 23 April 2003 and Mr Ballantyne was at that time absent on leave and Mr Upward was acting as Production Manager. To his knowledge, Mr Upward did not commence investigations into the Incident until 28 April 2003. At the meeting on 6 May 2003, Mr Riley had "... raised objections with some aspects of the investigation and some observations that had been made ." (Exhibit A2) He had disputed the Company's right to suspend Mr Riley from duty without pay given the length of time which had elapsed since the Incident. When Mr Riley had been handed his notice of suspension, he (Mr Musgrove) had told the Company that it was in breach of the Agreement. The suspension had been put into dispute by way of a Dispute Procedure Form on 7 May 2003. A meeting was held with the Company on 19 May 2003 to attempt to resolve the dispute. That meeting was attended by Mr Brooker, Mr B Dean (Mine Manager), Mr I Murray (CFMEU Official), Mr D Avery (CFMEU Wambo CHPP Lodge Vice President) and himself. The CFMEU had told the Company that, under the terms of the Agreement, the only action open to the Company to take against Mr Riley was retraining or counselling. The CFMEU had also alleged that the Company had not followed the required consultation procedures set out in the Agreement as the action taken against Mr Riley was pre-determined. Mr Murray had indicated to Mr Dean that the Union intended to progress the dispute before the Commission and the Company had agreed to abide by the outcome of such proceedings. [18] Under cross-examination by Mr Longland, Mr Musgrove agreed that Mr Riley had admitted making an error on 17 April 2003. (Transcript PN269) He further agreed that he did not know of any occasion in the past where a truck had collided with a conveyor belt. (Transcript PN283) He maintained his view that Mr Riley had been treated in a manner not provided for under the Agreement. Evidence of Mr Brooker [19] It was Mr Brooker's sworn evidence and witness statements (Exhibits R1 and R2) that he is the Plant Manager at Wambo's coal mining operation at Warkworth in New South Wales and is "... responsible for managing all aspects of the operation of the Coal Handling and Preparation Plant (CHPP) and for managing the surplus electrical power distribution system. " (Exhibit R1) [20] It was Mr Brooker's further evidence that: The collision between the truck and the Raw Coal Conveyor did not result in injury to any person but caused damage to the Conveyor of around $100,000.00. An investigation of the Incident instigated by him had "... concluded that Mr Riley had acted contrary to his training, the Manager's Rules for the site and safe operating procedures. Mr Riley admitted that he was negligent when I put that conclusion to him after the investigation was complete and accepted that my decision to suspend him was appropriate. " (Exhibit R1) After receiving the written report from Mr Riley, and before Mr Riley returned to work on 23 April 2003, he "... discussed the issue with one of the Company's directors and concluded that in the interests of procedural fairness a thorough investigation of the incident should be conducted. " (Exhibit R1) On Mr Riley's return from the Easter break, he was permitted to continue working, as Mr Brooker "... anticipated the investigation would conclude that the incident had been caused by machinery failure rather than being the fault of the operator. In any case if Mr Riley was found to be at fault he was experienced and competent with over 10 years experience at Wambo. On that basis the fault would be an oversight or negligence and after such an event the operator would be expected to work with additional care ." (Exhibit R1) On 24 April 2003 he had instructed Mr Upward to investigate, report and make recommendations. Mr Upward's investigation was completed by 6 May 2003 and his report determined that: "(a) there were no functional issues with the truck; (b) Mr Riley had received training which specifically dealt with the need to ensure that the tray was down prior to leaving the dump; (c) the training assessment showed that Mr Riley understood the training; (d) Mr Riley had acted in breach of the following Managers Rules for the mine: ` 5.15.1 General A person shall not operate on haulage roads or in a vehicle without due care and attention at all times. 5.1.6 Dumping Procedures vi. A driver shall not move his vehicle with the tipping body in a raised position except for the purposes of maintenance or for the controlled discharging of material.'; and (e) Mr Riley had acted negligently and in breach of his training." Based on Mr Upward's report, it was decided to suspend Mr Riley without pay for five working shifts. The decision to suspend Mr Riley without pay was implemented "... immediately rather than after counselling or retraining because of the determination that Mr Riley's act had been negligent ." (Exhibit R1) At a meeting on 6 May 2003, attended by the local CFMEU delegate, the report's findings were put to Mr Riley, he was given an opportunity to respond and he "... accepted that he had been negligent in causing the incident to occur. " (Exhibit R1) When advised of the penalty to be imposed on him, " Mr Riley said that he was `happy to accept the suspension'. " (Exhibit R1) On 8 May 2003, the CFMEU had notified a dispute to the Company alleging certain defects in the truck that Mr Riley had been driving on 17 April 2003, that these defects had been reported but not rectified and had subsequently contributed to the Incident. He had " ... pointed out Mr Riley had driven the truck some 40 times since January 2003 and had not completed a single vehicle inspection sheet as he was required to. " (Exhibit R1) On 19 May 2003 he and Mr Dean had met with local and district representatives of the CFMEU over the notified dispute and the CFMEU had indicated that an application would be made to the Commission pursuant to section 99 of the Act if the Company and the Union could not agree on a settlement. Mr Murray had "... asked Mr Dean if Wambo would accept a ruling by the Australian Industrial Relations Commission on the definition of the word `immediate' under clause 21.3.4 of the CHPP Agreement. Mr Dean said he `believed so' but could not be sure as he was not 100% sure on industrial law. " (Exhibit R1) " In my view, the union was arguing that I should only exercise my right to suspend without pay at the exact time that an incident occurred. If I had taken this approach with Mr Riley I would have taken action without knowing whether it was warranted. My decision to suspend Mr Riley was made after the investigation and determination that Mr Riley had been negligent in causing the incident to occur. " (Exhibit R1) [21] In his supplementary witness statement (Exhibit R2), Mr Brooker said that: Mr Riley works an average of 45 hours per week of which at least five hours are spent driving the chitter truck. During the past twelve months, Mr Riley had spent approximately 225 hours driving the truck and he estimated that " ... Mr Riley would have driven the truck along the route between `Charlies Hole' and under the Raw Coal Conveyor some 1000 times. " (Exhibit R2) The Incident was not a notifiable one and therefore he did not believe that he was required to follow the investigation process set out in the Coal Mines Regulation Act and Regulations . On the night of the Incident, he had telephoned Mr D Nichols (District Inspector of Coal Mines), Mr Dean, Mr Ballantyne and Mr Upward. He had also telephoned Mr P Tompkin (Principal Engineer - Kinmont Engineers) "... to request a structural inspection of the Raw Coal Conveyor to ensure that it was safe and to understand the nature of the impact ..." (Exhibit R2) On the night of the Incident, he had asked Mr Ballantyne to obtain a statement from Mr Riley and had also arranged for a full inspection of the truck. He had returned to work after the Easter break on 22 April 2003 and had discussed the Incident with management "... and prepared the scope of issues for Hugh Upward to cover in finalising an Investigation Report. " (Exhibit R2) " Mr Upward and I met with Wayne Riley and Gregory Musgrove on 6 May 2003. The purpose of the meeting was to discuss the outcome of the Investigation Report. The Investigation Report and its findings were put to Mr Riley and he was given time to comprehend the document and opportunity to respond. I had the letter advising Mr Riley of his suspension prepared only to be used in the event that the discussion with Mr Riley led to his suspension. I had not reached a final conclusion about whether to suspend Mr Riley and was prepared to hear his view in this meeting although I was not obliged to as the investigation had concluded that he was in breach of the Manager's Rules. I recall spending almost two hours talking with him ." (Exhibit R2) " At the meeting Mr Riley raised some issues about environmental conditions and the condition of the truck. I noted these issues and later acted on them but I did not think they mitigated Mr Riley's negligence in moving the truck from the dump with the tray in the air. I also observed that in relation to the mechanical issues raised, there had been no defect reports to that effect from Mr Riley. Mr Riley just like every other employee is required to complete a defect report. I did not give Mr Riley the letter until I had completed the full discussion and given Mr Riley a proper hearing and considered nothing he had added through consultation explained or mitigated his negligence in failing to ensure that the tipping body of the truck was not in a raised position before he left the dump. " (Exhibit R2) [22] Under cross-examination by Mr Endacott, Mr Brooker agreed that the Incident was a serious safety incident (Transcript PN431) but said that the property damage was not serious as the conveyor structure had not been knocked down and on that basis he did not believe it to be a notifiable incident. (Transcript PNs432-433) [23] Mr Brooker stated that no decision had been made on 17 April 2003 to suspend Mr Riley as: " The circumstances were too complicated to understand who was at fault or what was at fault. " (Transcript PN482) He said that it would have been unfair to have suspended Mr Riley on 17 April 2003: " ... because I didn't understand the situation at the time. " (Transcript PN483) [24] Mr Brooker agreed that he prepared the letter of suspension prior to the meeting on 6 May 2003 but denied that the outcome of the meeting was therefore pre-determined. He was asked by Mr Endacott: " I put to you that at the meeting of 6th, you had made a decision to suspend, you had prepared a letter to that effect and that was prior to even speaking to Mr Riley about it. I put that to you? " Mr Brooker replied: " That is a nonsense, because we had done our investigation, I was heading towards a suspension for Wayne and I had prepared a letter in case that happened. " (Transcript PN496). He had not spoken to Mr Riley prior to preparing the letter. (Transcript PN498). However, he had not issued the letter before consulting with Mr Riley for some two hours. (Transcript PN517) [25] On this point, I asked the witness: " Mr Brooker, your evidence is that you had a letter pre-prepared and signed which would have the effect of suspending the employee if you chose to hand it to him. Was it - at the meeting, was it open to the employee to convince you or were you open to being convinced by the employee at the meeting that you should not issue such a letter? " Mr Brooker replied: " Yes, I was. I was. I held that meeting so that I could give him an open and fair hearing and listen to what he had to say and I hadn't - I was open to changing my mind at that point ." (Transcript PN518) [26] I then asked Mr Brooker: " I think what Mr Endacott is putting to you is that you had conducted the trial in your own mind and he was going to get the letter no matter what. Is that true or not? " He replied: " That's not true and I can see that concern and I think maybe, in hindsight, preparing a letter in advance might not have been good practice but I think that we certainly hadn't determined that that was going to happen whatever Wayne had to say ." (Transcript PN519) [27] In re-examination by Mr Longland, Mr Brooker said that Mr Upward's report had recommended that Mr Riley be suspended without pay for two weeks. He then said: " I chose to apply a 1 week suspension because Wayne, in this case, had made an error and he had a good track record and a reasonably good attitude so I reduced the term ." (Transcript PN532). Termination of Mr Riley's employment had been considered but Mr Brooker decided that a penalty of suspension for one week was adequate. (Transcript PN533) CFMEU Submissions [28] Written submissions were filed by the CFMEU (Exhibit A3) and supported by oral submissions from Mr Endacott. [29] The Union said that the case was, in essence, a request from the Union to resolve a dispute over the application of the terms of the Agreement in the circumstances surrounding Mr Riley's involvement in the Incident. [30] As to the particular circumstances of this case, the Union conceded that: "In part, the incident was caused by the failure of Mr Riley to operate the plant in accordance with the Mine Manager's rules. In that the plant was being operated without the tipping body being fully lowered." [31] The Union went on to submit that: The Company did not meet its obligations under the Coal Mines Regulation Act and Regulations to notify the Incident to the District Check Inspector or the Department of Mineral Resources Inspector, nor did it maintain the scene of the Incident for a period of 24 hours or for such period as directed by the District Check Inspector or Department Inspector. No immediate action was taken to investigate the Incident. The Company did not speak to Mr Riley until 6 May 2003. The disciplinary action taken against Mr Riley was not open to the Company pursuant to the Agreement as the Agreement does not allow an employee to be suspended where that employee has not previously been counselled or retrained, except where an offence by an employee warrants `immediate' suspension. The term `immediate' can only mean that the action must occur soon after an alleged offence. Mr Riley's actions did not warrant immediate suspension and the action taken on 6 May 2003 to suspend him "... cannot be held to be immediately under any definition or any application of the term `immediate' in the context of the Certified Agreement or otherwise ." The Company failed in its duty to investigate the matter as soon as practicable after the Incident had occurred. The action taken against Mr Riley on 6 May 2003 was of a pre-determined nature and denied Mr Riley a fair chance to put his case. Company Submissions [32] Written submissions were filed by Wambo (Exhibit R3) and supported by oral submissions from Mr Longland. The Company's written submissions stated that: Mr Riley's actions on 17 April 2003 were in breach of the Manager's Rules and disciplinary action against him was warranted in the circumstances. " Clearly, because significant damage was done, it was open for Mr Brooker to form the view that re-training and/or counselling would not be a sufficient disciplinary penalty in the circumstances. " It is not necessary for the Commission to investigate the circumstances of Mr Riley's alleged misconduct but rather to establish the correct interpretation of the relevant provisions in the Agreement. " In the present matter, the investigation showed that Mr Riley was an experienced and competent driver who had acted negligently. Mr Brooker determined that counselling and retraining were not appropriate for a driver who is competent but had been grossly negligent in allowing this serious and costly incident to occur. In these circumstances management exercised its right to skip the sanctions of counselling and retraining and go immediately to the option of suspension. " [33] The Company further submitted that there is no ambiguity in subclauses 21.3.4 and 21.3.5 of the Agreement and that the power of suspension without first resorting to counselling or retraining cannot only be used when it is exercised `immediately' in the sense that suspension can only occur directly after an offence warranting suspension has occurred. " This leads to an absurd consequence that management can only use the sanction of suspension without pay if the sanction is imposed immediately after the offence is committed. Significantly, they say this must occur before any investigation of the conduct occurs. " The Company said, in relation specifically to subclause 21.3.5 of the Agreement, " If the CFMEU submission is correct, then the right to dismiss an employee for a particular offence can only be exercised immediately after the offence occurs and before there is any time for an investigation of the offence. The absurdity of the CFMEU submissions are that they support an interpretation of the Certified Agreement that denies procedural fairness for their own members. " Jurisdiction [34] On jurisdiction, the Company submitted that the terms of the Agreement do not provide the Commission with a power to arbitrate. Section 170LW of the Act does not empower the Commission to arbitrate where " ... there is no express power of arbitration provided to the Commission under a certified agreement ... ". [35] In its written submissions the Company went on to say that: " It will obviously not be necessary for the Commission to make a determination on the point of jurisdiction and the power to arbitrate if the Commission adopts our submissions in relation to the interpretation of the subclause in question ." [36] In its written submissions (Exhibit A3), the Union argued that: " Section 170LW of the Act permits the Commission to act as arbitrator to resolve a dispute over the interpretation of the Agreement if it is empowered by a Certified Agreement to do so ." The Union submitted that clause 13 of the Agreement, specifically subclause 13.4.1, so empowers the Commission. On this point, the Union drew my attention to the unanimous decision of the High Court in CFMEU v Australian Industrial Relations Commission [2001] HCA 16 (15 March 2001). That decision considered section 170MH of the Industrial Relations Act 1988 (the predecessor section to the current section 170LW). The High Court said: "30 There is, however, a significant difference between agreed and arbitrated dispute settlement procedures. As already indicated, the Commission cannot, by arbitrated award, require the parties to submit to binding procedures for the determination of legal rights and liabilities under an award because Ch III of the Constitution commits power to make determinations of that kind exclusively to the courts. However, different considerations apply if the parties have agreed to submit disputes as to their legal rights and liabilities for resolution by a particular person or body and to accept the decision of that person as binding on them. 31 Where parties agree to submit their differences for decision by a third party, the decision maker does not exercise judicial power, but a power of private arbitration. Of its nature, judicial power is a power that is exercised independently of the consent of the person against whom the proceedings are brought and results in a judgment or order that is binding of its own force. In the case of private arbitration, however, the arbitrator's powers depend on the agreement of the parties, usually embodied in a contract, and the arbitrator's award is not binding of its own force. Rather, its effect, if any, depends on the law which operates with respect to it. 32 To the extent that s 170MH of the IR Act operates in conjunction with an agreed dispute resolution procedure to authorise the Commission to make decisions as to the legal rights and liabilities of the parties to the Agreement, it merely authorises the Commission to exercise a power of private arbitration. And procedures for the resolution of disputes over the application of an agreement made by parties to an industrial situation to prevent that situation from developing into an industrial dispute are clearly procedures for maintaining that agreement. Parliament may legislate to authorise the Commission to participate in procedures of that kind. Accordingly, s 170MH of the IR Act is valid." [37] Relevantly, clause 13 of the Agreement ("Dispute Procedures") provides at 13.2.5 and 13.2.6 that: "13.2.5 If the matter remains unresolved, it will be referred by either party to the appropriate Industrial Authority and the powers of the Industrial Authority (or private arbitrator as referenced in 13.4.3) shall be limited by the terms of this agreement, allowable matters which have arisen in the application of the agreement or specific relief claimed by the parties to the dispute. 13.2.6 All parties agree that the decision of the appropriate Industrial Authority will be accepted as final unless the authority has made a decision which, under the laws governing the operation of the authority, allow an appeal against the authority's decision." [38] Subclause 13.4 of the Agreement (headed "Appropriate Industrial Authority") relevantly provides at 13.4.1 and 13.4.2 that: "13.4.1 The parties agree that the accepted Industrial Authority, in the event of a dispute will be the Australian Industrial Relations Commission and that, in the absence of agreement to do otherwise, that authority will be the one utilised for the resolution of disputes, should the need arise. 13.4.2 Notwithstanding the general requirements of Clause 13.4.1, where the parties agree that the jurisdiction or powers of the Australian Industrial Relations Commission are not required for the resolution of the dispute, the parties may agree that the matter will be referred to an agreed private arbitrator for resolution." [39] After careful consideration of the submissions of the parties, I find that the Agreement clearly bestows jurisdiction and power on the Commission to arbitrate this matter pursuant to subclauses 13.2.5 and 13.2.6. [40] My view on jurisdiction is supported by, but not dependent upon, what occurred in a hearing before Senior Deputy President Drake on 22 November 2001 (AG2001/6990), at the end of which hearing the Agreement was certified. At that hearing, her Honour (speaking to a Ms Quinn of Freehills representing the Company) stated: " I don't understand 13.2.5 ... ". Some discussion then ensued and Ms Quinn later said: " It is arguable that the disputes referred to, the AIRC or private arbitrator, will be limited to allowable matters. " Her Honour responded that she did not view it as acceptable that the matter would be arguable, she said: " I mean, you're here to resolve an agreement. You have to have actually reached an agreement about what the agreement is. I mean, I don't care which it is, but I think the parties actually need to know what you're referring to ." Her Honour later went on to say: " The time to resolve what they mean is not when you have a dispute and you turn up here and want some assistance in it and we have to have a fight about what it means. It's good to know what it means before you sign the agreement, and then when you have a dispute everyone is at least in accord on that. So I want to know what the parties agree, `limited by the terms of the agreement' means, because certified agreements contain matters that are not allowable award matters. They are matters in excess of allowable matters, and that is because the parties are able to make agreements about non-allowable matters, and in the ordinary course matters that are in the agreement are matters that would be referred for resolution, you know, subject to rights of appeal. So if the parties are in disagreement about that, I think they ought not to be. I don't want in this panel to have a matter referred to me for dispute and then have a fight between the parties about whether the issue is one that's covered by the agreement or not ." [41] When pressed by her Honour, Ms Quinn sought leave to seek further instructions from her client. Later on the same day, a Mr Wood appeared for the Company and the following exchanges occurred between him and her Honour: "MR WOOD: Your Honour, I understand that prior to the adjournment there was some discussion regarding the terms of the disputes or grievance procedure in clause 13.2. Can I tender a copy of a letter which has been given to Mr Endacott. THE SENIOR DEPUTY PRESIDENT: I will just read it. Have a seat. Right. You say that is the joint position of the parties? MR WOOD: Certainly that was the understanding the parties had on the interpretation that was to apply to the agreement. THE SENIOR DEPUTY PRESIDENT: So if it arises out of the agreement, as long as it arises in relation to a term of the agreement, it's not limited to allowable matters, it's limited to matters within the agreement. As to a dispute outside the terms of the agreement, it's limited to allowable matters, as in any event would be the case? MR WOOD: Correct. Those are the terms of the - - - THE SENIOR DEPUTY PRESIDENT: But to make it absolutely certain, Mr Woods, as to matters within the agreement there is no limitation as to allowable or otherwise as long as it's within the agreement, a dispute within one of - - - MR WOOD: If it's a matter dealt with in the agreement as outlined, yes, that would be the position. " [42] The tendered letter from Wambo to the local CFMEU District Office dated 18 July 2001 concerned another certified agreement, but one which contained a provision in the same terms as the provision contained in the Agreement. That letter relevantly said: "The intent was that in the event of a dispute occurring and arbitration being sought by either party, the dispute would be limited to those issues relating directly to the dispute. Reference to sections of the Agreement would be limited to direct impacts on the dispute itself and any reference to instruments outside of the Agreement would be limited to allowable matters as prescribed in the Award. This Clause is not intended to restrict the ability of either party to raise a dispute (refer 19.1.1 - `in the event of any dispute arising as to the interpretation of this Agreement, or any dispute arising in the course of employment') but is intended to restrict any arbitration to the dispute only." [43] Her Honour then said: " I will mark it as an exhibit 1, and I will order transcript of these proceedings and provide a copy to both parties and put a copy on the file so that the next member who gets this file, should there ever be a dispute under the agreement, will understand what the understanding of the parties is ." Mr Wood responded: " Hopefully that won't be necessary, your Honour ." [44] When the material concerning the above proceedings was raised by Mr Endacott, Mr Longland responded: "... that for the Commission to adopt the representations made on transcript as they were part of the agreement, that would be a subversion of the processes of the Act. All I'm saying is that the focus needs to be on what those words mean and we submit that they are words of limitation ." (Transcript PN752) Mr Longland also said: "... for reasons which perhaps are not totally comprehended by some, it has become a bit of a practice when agreements come before the Commission for questions to be asked about dispute resolution procedures. No doubt parties before the Commission on those occasions answer the questions. The reason it is difficult to understand the relevance of them is that they don't form part of the agreement and there is very good policy reasons why they should not. The system provides that agreements that have the enforceability of the Act, that have been certified, must go through a process. They must be provided to employees. Employees must have a chance to vote on them . Now, if we get ourselves into a situation where we can run an agreement past a bunch of employees and have them vote on it and then a couple of people turn up here weeks later and say, well, this is really what it means and here is the transcript so henceforth this is what you have got to apply, it is pretty obvious what sort of subversion that wreaks upon the processes of the Act ." (Transcript PNs747-748) [45] I agree that material and undertakings by the parties presented to a certification hearing cannot form part of a certified agreement. However, I reject Mr Longland's submission that I should totally disregard the clear undertakings made by Mr Wood, acting on instructions from Wambo, during the certification proceedings. This is particularly the case when Mr Wood's statements were apparently replied upon by Senior Deputy President Drake in making her decision to certify the Agreement. Conclusion [46] It is apparent to me, and at least partly conceded by the CFMEU, that Mr Riley acted negligently and in contravention of the Mine Manager's Rules on 17 April 2003 and was responsible for the Incident. Two matters arise for determination: 1. Was Mr Riley dealt with by the Company in accordance with the terms of the Agreement? 2. Was the Company's investigation conducted properly and fairly? [47] There then remains the question that if the Company was entitled to discipline Mr Riley by way of a suspension from work without pay, was the penalty applied appropriate in the circumstances. [48] The Union's argument as to the procedure to be followed pursuant to subclauses 21.3.4 and 21.3.5 of the Agreement boils down to the view that Mr Riley could only have been suspended provided he had been previously counselled or retrained unless the incident was a serious offence warranting suspension without pay. The Union's view was that action to suspend in such circumstances must be taken immediately after the event i.e. very soon after the event warranting suspension has occurred. In Mr Riley's case, as he had not been previously counselled or retrained, the delay until 6 May 2003 in taking action to suspend him without pay meant that the Company `missed the boat' and was unable to take the action that it did. [49] On a literal interpretation of subclause 21.3.4 of the Agreement, there would appear to be little doubt as to the meaning of the word `immediate'. However, in the luminous phrase of Burchett J in Short v Hercus (1993) 40 FCR 511, it is not always possible to examine a word or expression "... standing bare in alien ground." Weinberg J in McCormick v Riverwood International Australia Pty Ltd (1999) FCA 1640 said: " The parties may be bound by the meaning reasonably to be inferred in the circumstances, even if it does not conform to the interpretation advanced by either. It is not necessary that a statement should be subjectively intended to be a term of a contract in order to be one; it is enough if it can reasonably be so understood ." [50] Gibbs CJ in Cooper Brookes (Wollongong) Pty Ltd v Federal Commissioner of Taxation (1981) 147 CLR 297 said: " There are cases where the result of giving words their ordinary meaning may be so irrational that the court is forced to the conclusion that the draftsman has made a mistake, and the canons of construction are not so rigid as to prevent a realistic solution in such a case: see per Lord Reid in Connaught Fur Trimmings Ltd. v. Cramas Properties Ltd. (1965) 1 WLR 892, at p 899; (1965) 2 ALL ER 382, at p 386 ." In the same decision, Mason and Wilson JJ stated: " There are statements of the rule which would confine the courts to the ordinary grammatical sense of the words used unless that produces an absurdity or inconsistency ." [51] Neaves J in Meat and Allied Trades Federation of Australia v The Australasian Meat Industry Employees' Union (1984) 2 FCR 419 at 426 said: " The true meaning and effect of the award must be ascertained not by construing the language used in isolation but by construing that language in its setting and its context and in the light of all the relevant surrounding circumstances. " Similarly, Mason J in K and S Lake City Freighters Pty Ltd v Gordon & Gotch Ltd (1985) 157 CLR 309 at 315 said: " Problems of legal interpretation are not solved satisfactorily by ritual incantations which emphasize the clarity of meaning which words have when viewed in isolation, divorced from their context ." [52] Street J in George A Bond & Co Ltd v J Mckenzie (1929) 28 AR at 503-504 said: " Now speaking generally, awards are to be interpreted as any other enactment is interpreted. They lay down the law affecting employers and employees in their relations as such, and they have to be obeyed to the same extent as any other statutory enactment. But at the same time, it must be remembered that awards are made for the various industries in the light of the customs and working conditions of each industry, and they frequently result, as this award in fact did, from an agreement between parties, couched in terms intelligible to themselves but often framed without that careful attention to form and draughtsmanship which one expects to find in an Act of Parliament. I think, therefore, in construing an award, one must always be careful to avoid a too literal adherence to the strict technical meaning of words, and must view the matter broadly, and after giving consideration and weight to every part of the award, endeavour to give it a meaning consistent with the general intention of the parties to be gathered from the whole award. " [53] In the case before me, to interpret the word `immediately', in the manner put forward by the Union, and with the effect which adoption of the Union interpretation would have, would, in my view, produce an absurdity. The core of that absurdity would lie in finding against the Company because the Company had not acted precipitately in suspending Mr Riley. It would be absurd to, in effect, punish the Company for carrying out a thorough investigation. I was impressed by the evidence of Mr Brooker which indicated to me that he had started out with an open mind about the Incident and in fact found it difficult initially to conceive that Mr Riley could have been responsible for it. In the circumstances, Wambo's submission that it acted `immediately' after the conclusion of the investigation process on 6 May 2003 is reasonable. [54] Mr Endacott suggested that the Incident could not be considered to be a serious one deserving of suspension from duty without pay as the Company had decided that the Incident was not notifiable under the Coal Mines Regulation Act and Regulations . Whether the Incident was a notifiable one under that Act is not for me to decide and is not relevant to these proceedings. By any reasonable definition, the Incident was serious and the Union did not contest the Company's estimate of the cost as being in the order of $100,000.00. [55] The Company acted expeditiously to obtain a written statement from Mr Riley on the evening of the Incident and (given the fact that the mine was closed from 11 pm on 17 April 2003 until 11 pm on 22 April 2003) the time taken to investigate the Incident thoroughly reflects well on the fairness of the investigation process adopted. I do however find it curious that the Company did not involve Mr Riley or the CFMEU in the investigation process. It would have been a reasonable expectation for Mr Riley and the Union to be so involved. Given the evidence of Mr Riley and Mr Musgrove and the concessions made in the CFMEU's submissions, their involvement would not however have altered the outcome of the investigation. Nevertheless, the Company failed in some measure to treat Mr Riley fairly in this regard. The preparation of Mr Riley's letter of suspension prior to the meeting on 6 May 2003 was not in my view indicative of a pre-determined outcome but rather was a prudent step by the Company in the light of Mr Upward's findings. I accept that the Company was open to persuasion by Mr Riley and/or the CFMEU during the 6 May 2003 meeting. [56] All in all, I believe that the Company has treated Mr Riley fairly. On the evidence before me, the Company appears to have had at least a prima facie case to dismiss him but chose not to do so in the light of his length of service and good employment record. The fact that Mr Brooker reduced Mr Upward's suggested suspension period from two weeks to one week again speaks on behalf of the fair treatment meted out by the Company to Mr Riley. [57] At no time during the hearing did the Company attempt to portrait Mr Riley as anything other than a competent and valued employee. It has not sought to change his duties since the Incident but has argued that the suspension from duty without pay for a period of five shifts was a reasonable punishment for the single incident of negligence on 17 April 2003. I agree. Findings [58] In the light of my conclusions above, I therefore find: 1. that Mr Riley was dealt with by the Company in accordance with the terms of the Agreement as reasonably interpreted in the circumstances. that the Company investigation was conducted properly but contained some elements of procedural unfairness in its failure to involve Mr Riley or the CFMEU. 3. that the penalty applied by the Company against Mr Riley was more than fair in the circumstances. [59] My duty in these proceedings has been to interpret the reasonable meaning and operation of subclause 21.3.4 of the Agreement, to make an assessment of the facts and circumstances which surrounded the Incident and following events and then to make a judgement as to whether the penalty imposed on Mr Riley was fair and just in the circumstances. I believe the penalty was fair and just and accordingly the Commission will confirm the penalty. BY THE COMMISSION: COMMISSIONER Appearances: K Endacott , for the Construction, Forestry, Mining and Energy Union. A Longland , solicitor, for Wambo Coal Pty Limited Hearing details: 2003. Sydney: July 11; August 27. Printed by authority of the Commonwealth Government Printer <Price code F>