Union fails to secure better deal for labour hire workers

Cases

Union fails to secure better deal for labour hire workers

A union's bid to have a company’s labour hire workers paid the same rates as employees has failed.

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A union's bid to have a company’s labour hire workers paid the same rates as employees has failed.

The Fair Work Commission found that the company’s enterprise agreement treated its labour hire workers and employees differently.

Facts and background


CHEP Australia Limited operates a pallet service centre in Altona, Victoria. It has employees whose employment is covered by the CHEP Altona (Vic) Service Centre Enterprise Agreement 2015. It also engages labour hire agencies to provide it with additional labour. The agencies then send their own employees to undertake work for CHEP at the Altona premises. The labour hire workers are typically casual employees of the relevant agency.

The National Union of Workers (NUW) made an application asking the Fair Work Commission (FWC) to deal with a dispute, namely whether clause 29.2(c) of the agreement required CHEP to ensure employees of labour hire agencies received the rates of pay afforded to CHEP employees.

CHEP and NUW failed to resolve the dispute at conference and mediation, and the matter proceeded to arbitration.

The law


The NUW made an application under section 739 of the Fair Work Act 2009 to the FWC to deal with the dispute.

The question


The question here was whether clause 29.2(c) of the agreement imposed an obligation on CHEP to ensure that labour hire workers who were engaged to perform work on the Altona premises were paid the same rates as CHEP employees.

Arguments


The NUW argument hinged on the interpretation of the phrase “any person engaged to perform work in accordance with the classification system” under clause 29.2 of the agreement.

Its main submission was that the words ‘any person’ included CHEP employees and contractors such as labour hire agency employees.

This was because the words ‘any person’ were a clear departure from the language used in other clauses of the agreement. For example, the agreement specifically used the word ‘employee’ in clauses where obligations related exclusively to direct employees. Therefore, the clause in question, by using the words ‘any person’, intended to have a wider application, so as to capture employees of labour hire agencies.

Furthermore, the NUW relied upon the fact that up until late 2017, labour hire workers engaged to perform work with CHEP were paid the same rates as employees under clause 29.2.

CHEP maintained that the employees of labour hire agencies were not covered by the clause. It argued that the words ‘any person’ rather than ‘employee’ was merely “loose drafting”, and that the proper meaning of the words was to be understand in the context of the clause and the agreement as a whole.

Considerations and decision


The FWC decided that clause 29.2(c) of the agreement did not require CHEP to ensure that labour hire workers who were engaged to perform work at the Altona site were paid the same rates as CHEP employees. The commission took into account the ordinary meaning of the clause, in the context of the agreement as a whole.

The bottom line: Labour hire workers may not be covered by a company’s enterprise agreement unless the interpretation of the document, considering the ordinary meaning of clauses and context of the agreement as whole, suggests otherwise.

Read the judgment


National Union of Workers v CHEP Australia Limited [2018] FWC 3797 (2 July 2018)
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