[2017] FWC 2535

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009

s 739 - Application to deal with a dispute

Transport Workers' Union of Australia

v

Jetstar Services Pty Limited

(C2016/7317)

DEPUTY PRESIDENT SAMS SYDNEY, 29 MAY 2017

Dispute about a matter arising under an enterprise agreement – entitlement to

overtime – interpretation of cl 17 of the Jetstar Services Agreement 2016 – dispute

settlement procedure – principles of agreement interpretation – ordinary meaning

of words used – incorrect and inconsistent application over 10 years – ‘work’ does

not mean period of time when the employee is on leave – impermissible to examine

surrounding circumstances – dispute resolved accordingly.

INTRODUCTION

[1] This decision will determine an application to deal with a dispute, pursuant to s

739 of the Fair Work Act 2009 (‘the Act’) filed by the Transport Workers’ Union

of Australia (‘the Union’) on 13 December 2016. The dispute is with Jetstar

Services Pty Ltd (‘Jetstar’ or ‘the respondent’). It concerns a question of whether

Jetstar ground crew employees are entitled to have periods of personal and other

leave, which fall during a pay week or roster cycle, taken into account when

calculating overtime payments, under cl 17 of the Jetstar Services Agreement

2016 (the ‘2016 Agreement’). Clause 17 of the Agreement reads as follows:

‘17. OVERTIME

17.1. Where a full time employee works for:

17.1.1 a longer period than his or her rostered shift period; or

17.1.2 an average of more than 38 hours per week, averaged

over a roster cycle (and taking into account RDO entitlements);

the additional time worked will be treated as overtime.

17.2. Where a part-time employee works more than 8 hours per day

or 38 hours in a pay week

the additional time worked over 8 hours per day or 38 hours per week

will be treated as overtime.

17.3. Where an employee works on 7 consecutive days they will be

paid overtime for all hours worked on the 7th day.

17.4. Where a casual employee works for more than 7.6 hours on any

day, the time over 7.6

hours will be treated as overtime.

17.5. Overtime rates are as follows:

17.4.1 day worker – time and a half for the first 2 hours and

then double time; and

17.4.2 shift-worker – double time.’

BACKGROUND

[2] The dispute is brought pursuant to the Dispute Settlement Procedure (DSP)

found at cl 10 of the Agreement and, in particular, the function of the Fair Work

Commission (the ‘Commission’) to ‘take any or all of the following actions as it

considers appropriate to resolve the dispute’ and ‘where the matter, or matters, in

dispute cannot be resolved (including by conciliation) arbitrate or otherwise

determine the matter, or matters, in dispute’ (cl 10.3). The subsequent sub clauses

in the DSP read as follows:

‘10.4. The FWC must follow due process and allow each party a fair and

adequate opportunity to present their case.

10.5. Any determination by the FWC under clause 10.3 must be in writing if

either party so requests, and must give reasons for the determination.

10.6. Any determination made by the FWC under clause 10.3 must be

consistent with applicable law and must not require a party to act in

contravention of an applicable industrial instrument or law.

10.7. Where relevant, and circumstances warrant, the FWC will consider

previous relevant decisions of the FWC and the Courts.

10.8. The FWC must not issue interim orders, 'status quo' orders or interim

determinations.

10.9. The parties are entitled to be represented including by legal

representatives, in proceedings pursuant to this dispute resolution

procedure.’

[3] While Jetstar had initially raised a jurisdictional objection concerning a claim

the Union had not followed the steps set out in the DSP of the Agreement, that

objection was not ultimately pressed at the hearing. As there are no other

jurisdictional impediments to the Commission hearing and determining the matter

in dispute, I will proceed on that basis. Before doing so, I note a conciliation

conference was convened by the Commission on 9 January 2017; however,

settlement of the dispute proved elusive. Accordingly, the Commission issued

directions for the filing and service of evidence and short outlines of submissions.

The matter was listed for arbitration on 11 April 2017.

[4] At the hearing, Mr M Gibian of Counsel appeared for the Union and Mr

N Ogilvie, Solicitor, appeared for Jetstar. Given the unusual terms of cl 10.9 above,

there appears to be no requirement for the Commission to consider s 596 of the

Act, in respect of permission for the parties to be represented by legal practitioners.

However, for abundant caution and given no issues of unfairness arise where both

parties are legally represented and do not object to the other side being legally

represented, I am satisfied that the matter would proceed more efficiently if the

parties are legally represented. As I said at the conclusion of the hearing, this last

observation was borne out in that none of the three witnesses were required for

cross-examination, the relevant issue for determination was property focussed and

addressed and, as a result, an estimated day’s hearing was completed within one

and a half hours. I am grateful for Mr Gibian’s and Mr Ogilvie’s efficient and

effective contributions to the proceeding.

THE EVIDENCE

[5] The following persons provided uncontested statements of evidence in the

proceeding:

● Mr Shane O’Brien, Director of Aviation Campaigns for the Transport

Workers’ Union of Australia;

● Mr Dissio Markos, Branch Organisation/Aviation at the

Victorian/Tasmanian Branch of the Transport Workers’ Union of Australia;

and

● Mr Mohammed Ramahi, Leading Hand GC4 at Jetstar Services Pty Ltd.

● Mr Maciek Zielinksi, Employment Relations Advisor Jetstar Airways Pty

Ltd

[6] The four witness statements provided the historical and contextual framework

to the dispute. Should it become necessary for the purposes of construing the

words in cl 17, this evidence may become relevant. Accordingly, I set out the

statement evidence in summary below.

Mr Shane O’Brien

[7] Mr O’Brien is the Union’s official responsible for representing members in the

aviation industry. Since December 2014, he has been involved in bargaining for

the current 2016 Agreement. The 2016 Agreement replaced the Express Ground

Handling Agreement 2010 (the ‘EGH Agreement’). It was Mr O’Brien’s evidence

that the majority of the clauses in the EGH Agreement were simply rolled over into

the 2016 Agreement. At the time, Jetstar had not proposed any changes to the

payment of overtime under that clause. Discussions had been initiated by the

Union about the payment of overtime to part time employees when they were

required to work on their sixth or seventh consecutive day. This resulted in a new

cl 17.3 of the 2016 Agreement; otherwise cl 17 is identical in the EGH Agreement.

[8] Mr O’Brien said that in early February 2016 he had been advised by Victorian

Branch Organiser, Mr Markos that Jetstar had notified employees that the

Company had been incorrectly paying overtime for 10 years. The notification

relevantly said:

‘Overtime - There have been some examples of leave hours being counted

towards overtime, contrary to the EBA. We won't recover any previous

overpayments that may have been made, however, the system has been set

up in line with the correct EBA interpretation so only time physically

worked counts towards overtime. This will ensure consistency moving

forward, but may result in some team members noticing a change compared

to previous pay runs.’

[9] It was Mr O’Brien’s understanding that at the Sydney, Melbourne and Brisbane

airports the practice had always been that annual leave and sick leave were taken

into account as hours worked, for the purposes of calculating the entitlement to

overtime payments. The practice had existed for at least 10 years. Mr O’Brien was

not aware of any question being raised during that time about the correctness of

this approach in calculating overtime payments. Mr O’Brien made subsequent

inquiries of delegates at Cairns and Adelaide airports and was informed of a

different practice, in that the Company had not counted leave hours when

calculating overtime.

[10] Mr O’Brien believed that Qantas Companies, including Jetstar, were

beginning to adopt the new interpretation of the overtime clause in September

2016, during negotiations for the Qantas Ground Services Pty Limited Ground

Handling Agreement 2015. He said the change of approach had a particular effect

on the large number of part time employees, who while being guaranteed 20 hours

a week, regularly work additional shifts up to 38 hours a week. Under the new

approach, an employee working 38 hours a week will be deprived of overtime,

simply because the employee accesses authorised leave. Mr O’Brien had discussed

the matter with Mr Zielinski, but no agreement could be reached about the correct

interpretation of cl 17 of the 2016 Agreement.

Mr Dissio Markos

[11] Mr Markos described how he had dealt with a complaint from one of his

delegates, Mr Mohammed Ramahi, that members in Melbourne were being

incorrectly paid when they were sick and called in to work overtime on another

day. Mr Markos had raised the issue with Airport Services Manager, Mr Marc

Jamieson, who confirmed that the Company’s position was that the payments for

overtime had been incorrectly calculated and he would be posting a notice to

employees advising of the mistake. Mr Markos disputed Jetstar’s interpretation of

cl 17. Mr Jamieson told him that if he Union did not agree, then it should lodge a

dispute with the Commission.

Mr Mohammed Ramahi

[12] Mr Ramahi has been employed by Jetstar for about five years. He confirmed

the evidence of Mr Markos about when and how the dispute had been raised and

handled by the Union.

Mr Maciek Zielinski

[13] In his role with Jetstar, Mr Zielinski was involved in bargaining for the 2016

Agreement. He confirmed Mr O’Brien’s evidence about the origins of cl 17.3

during negotiations for the 2016 Agreement. Mr Zielinski added that at the time,

Mr O’Brien had welcomed the payment for overtime for work performed on the

seventh consecutive day, but requested it be extended to the sixth day. Before the

vote for approval of the 2016 Agreement, the Company wrote to employees and

provided a summary of key changes. The summary indicated that if an employee

was required to work on seven consecutive days, overtime would be paid for hours

worked on the seventh day.

SUBMISSIONS

[14] Both parties dealt with the principles to be applied by the Commission when

interpreting the provisions of an enterprise agreement and the authorities pertaining

thereto; Most notably The Australasian Meat Industry Employees Union v Golden

Cockerel Pty Limited [2014] FWCFB 7447 (‘Golden Cockerel’.) I will come back

to those principles and authorities later, suffice to observe at this point that the

parties are ad idem as to the relevant principles to be applied in this case.

Unsurprisingly, they strenuously disagree as to the outcome of the application of

those principles to the subject matter of this dispute.

For the Union

[15] In written submissions it was said that in the 2016 Agreement, cl 17 confers

an entitlement on a full time employee to be paid overtime when the employee

works for a longer period than his or her rostered shift or an average of more than

38 hours per week over a roster cycle; and for a part time employee who works

more than eight hours per day or 38 hours in a pay week. Overtime should be

payable, irrespective of any leave entitlements accessed during the pay week or

roster period. In determining whether the employee has worked more than 38

hours, authorised leave entitlements should be taken into account.

[16] The Union submitted that a number of factors support this interpretation of cl

17:

(a) The ordinary common sense understanding of the words used supports a

proposition that any permitted or authorised leave is part of an employee’s

work time;

(b) Section 62 of the Act prescribes maximum hours of work and s 62(4)

defines hours of work as including ‘any hours of leave, or absence, whether

paid or unpaid, that the employee takes in the week and that are

authorised...’. It may be assumed the parties intended ‘work time’ to have

the same meaning as in s 62 of the Act;

(c) The circumstances at the time the 2016 Agreement was made; namely,

the long standing practice in Sydney, Melbourne and Brisbane, to include

periods of leave when calculating overtime. Past practice supports the

conclusion for which the Union contends. This is further supported by the

fact that:

i. Jetstar did not seek to alter the long standing practice during

the negotiations for the 2016 Agreement; and

ii. The equivalent provision in the EGH Agreement was simply

rolled over.

(d) Jetstar’s interpretation gives rise to the provision being considered an

‘objectionable term’ and therefore, ‘unlawful’ under s 194 of the Act.

Moreover, it might be said that cl 17 involves the exercise of a ‘workplace

right’ being for employees to take personal or other leave under the

Agreement and the NES. Adverse action would arise if an employee was

dismissed for exercising that ‘workplace right’; and

(e) Jetstar’s interpretation would be contrary to the rationale for the payment

of overtime, being to compensate an employee for working outside their

usual pattern of hours and to act as a disincentive for employers to require

employees to work excessive hours; see: Re Glass Workers Award (1953)

76 CAR 17.

[17] In oral submissions, Mr Gibian stressed that Jetstar had only altered its

interpretation and application of c 17 shortly after the 2016 Agreement had been

approved and after many years of a long standing practice to the contrary.

Mr Gibian emphasised that one of the important approaches to agreement

interpretation is that an overly literal and/or technical approach is to be eschewed.

The interpretive task is to have regard to industrial reality, context and history,

particularly where the same wording has been used in successive agreements.

[18] Counsel put that there is no definition of what constitutes ‘work time’, in a

general sense, in the 2016 Agreement and in that context, it is capable of having

different meanings. The task of interpreting words is to give them a sensible

operation, consistent with the meaning of the words and their context when views

as a whole. He relied on a recent decision of the Full Bench in Construction,

Forestry, Mining and Energy Union v Broadspectrum Australia Pty Ltd [2017]

FWCFB 269 (Broadspectrum) which held that compulsory training, required to be

undertaken by employees, constituted ‘work’ for the purposes of cl 19 of the

Broadspectrum Agreement. Mr Gibian put that the same approach should be

applied in this case, where the word ‘work’ is capable of different meanings in

different contexts.

[19] In analysing the words of cl 17, Mr Gibian used an example of a part time

employee who is ordinarily rostered on Monday to Thursday shifts, but is sick

from Monday to Wednesday and is called in on the Friday to work an additional

shift. On Jetstar’s interpretation, the employee would not receive overtime for that

shift. If the employee had not been sick and the 38 hour threshold was reached,

he/she would have been entitled to receive overtime pay. Similarly, if a full time

employee takes two weeks leave in the first half of the roster period, then in the

successive two weeks, the employee may be forced to work very long hours,

without any overtime entitlement arising. Counsel also gave the example of a part

time employee who is guaranteed 20 hours a week under cl 12.4, and the employee

would have to work 20 hours a week, in addition to any authorised leave in that

week, to avoid Jetstar being in breach of the 2016 Agreement.

[20] It was argued that these examples demonstrate an absurd outcome if Jetstar’s

interpretation of c 17 was to prevail. Mr Gibian noted that cl 14.4, in respect to a

downturn in labour requirements, provides a note which states, ‘work and leave

hours will be included when calculating the average hours’. This squarely

answered the Company’s argument that there is no other specific provision which

deal with the interpretation for which the Union contends. In addition, Jetstar’s

submissions adopt the very approach which is generally discouraged - that is to

adopt an overly literal or technical interpretation. Nevertheless,

Mr Gibian acknowledged that while cl 17 could have been better drafted, the

Commission must do its best to ensure a logical and sensible outcome.

[21] Mr Gibian also relied on the rostered days off (‘RDO’) provision in the

Agreement. One RDO is accrued every month, which includes periods when the

employee is on authorised leave. On Jetstar’s approach, one RDO a month might

actually require six weeks to accrue, if the employee takes two weeks leave in the

relevant period.

[22] Mr Gibian reiterated the Union’s submissions concerning s 62 of the Act

dealing with maximum weekly hours. He said that while the statutory context is

not determinative, it is relevant. Counsel conceded that s 62 did not expressly deal

with overtime.

[23] Mr Gibian dealt with the past history by reference to the evidence of Mr

O’Brien and the longstanding practice which was altered by Jetstar in

October/November 2016. Indeed, the terms of the cl 17 were rolled over from

predecessor agreements. This longstanding practice was a clear indication of the

intentions of the parties as to the interpretation of cl 17. Mr Gibian added that there

is nothing in the new cl 17.3, which suggests a change to the traditional approach.

He emphasised this new subclause had been at the Union’s initiative - not Jetstar’s.

For Jetstar

[24] In written submissions it was put that the central question to be determined by

the Commission is whether paid leave or other paid absences constitute ‘work’ in

the sense that it counts towards the weekly hours threshold for calculating whether

an entitlement to overtime arises.

[25] It was submitted that:

a) the clear and unambiguous meaning of ‘work’, discernible from the 2016

Agreement, does not require reference to extrinsic materials; and

b) even if any ambiguity exists, the recent conduct of the parties

demonstrates a clear understanding of ‘work’, within cl 17, which is against

the Union’s construction.

[26] It was further put that ‘work’ means the actual performance of duties and is a

different concept to ‘ordinary time’, ‘ordinary hours of work’ or ‘rostered hours’.

It can also be distinguished from paid authorised absences. Section 62 of the Act is

not relevant because the definition of ‘work’ is referable to its usage throughout the

2016 Agreement. These references include:

(a) Clause 10.10 provides for the maintenance of the ‘status quo’ in the way

work is performed whilst a dispute is on foot;

(b) Clause 16.2 provides for the payment of higher duties where an

employee works higher duties for part or all of a shift;

(c) Clause 18.3.1 provides that an overtime meal allowance is payable to an

employee who works more than 1 hour of overtime, and then after each

subsequent 4 hours of overtime worked;

(d) Clause 20.2 provides for the payment of double time where an employee

works a shift whose start and/or finish time is changed by more than 30

minutes with less than 48 hours’ notice;

(e) Clause 23 provides for meal breaks according to time actually worked;

(f) Clause 28 provides for public holiday penalties to be paid for time

actually worked on a public holiday; and

(g) Clause 31 provides for the provision of notice on termination, and allows

the period to be worked, or for a payment to be made in lieu of it being

worked.

[27] Jetstar added that cl 17.1 expressly takes into account ‘RDO entitlements’, but

includes no mention of paid leave or authorised absences. The manner in which

RDOs are accrued, recognising actual performance of work, is necessary before an

RDO is paid. This is identical to the requirement to perform actual work before

overtime is paid. Clause 14.4 also expressly distinguishes between ‘work’ and

‘leave hours’.

[28] In addition, cl 17.4 provides for casuals to be paid overtime where they work

more than 7.6 hours a day. As casuals do not accrue, nor are they entitled to paid

leave, ‘work’ in cl 17.4 cannot logically be intended to include periods of paid

leave or authorised absences.

[29] Even if ambiguity is found to exist, the new cl 17.3 prescribes for overtime

payments where an employee works on seven consecutive days. This was

understood by both parties to mean that payment of overtime on the seventh

consecutive day required work to be actually performed on the seventh consecutive

day. This is consistent with the correct interpretation of cl 17.

[30] The Company rejected the Union’s reliance on s 62(4) of the Act, as the 2016

Agreement does not incorporate the definition of ‘work’ from that section of the

Act. The absence of any specific inclusion of leave in cl 17 demonstrates the word

has its plain, common sense meaning. In addition, the Act does not require

penalties for performing overtime; penalties are set by the relevant industrial

instrument.

[31] Finally, it was said that the Union’s submission concerning adverse action was

misplaced as it assumes a workplace right exists when that very question turns

upon the proper construction of cl 17. It is a ‘cart before the horse’ argument.

[32] In oral submissions, Mr Ogilvie acknowledged the 2016 Agreement contains

no definition of ‘work’ or ‘work time’ and is used in a wide array of contexts

throughout the 2016 Agreement, including within cl 17 itself. He stressed that the

entitlement to overtime only arises in circumstances where an employee is

physically at work for more than 8 hours per day or 38 hours in a pay week.

[33] As to the principles of interpretation, Mr Ogilvie put that the Commission is

not free to give effect to some anteriorly derived notion of what would be fair and

just, regardless of the plain and ordinary meaning of the words in the Agreement.

[34] Mr Ogilvie advised that the Company employs 350 to 360 employees; the vast

majority of whom are part time and who will be impacted more than full time

employees. Mr Ogilvie said that there is no inconsistent approach to cl 14.4 and

12.4, because the clauses do different things in respect to minimum work hours.

Clause 12.4 deals with a guarantee of 20 hours per week and cl 14.4 deals with a

rolling three month average. Predicted leave is rostered during that longer period.

Mr Ogilvie said it should always be borne in mind that overtime entitlements only

arise by virtue of the employees having undertaken more hours of work than their

roster and beyond 38 hours a week.

[35] Mr Ogilvie said that s 62(4) of the Act has no application because that

provision is for the specific purpose of calculating maximum hours; not for any

other purpose.

[36] As to the Union’s submissions going to the long standing practice at Sydney,

Brisbane and Melbourne, Mr Ogilvie noted that Adelaide has a long standing

practice which reflects Jetstar’s interpretation and there was no evidence of what

applies at Cairns. It followed, there was no consistency in approach. Other of

Jetstar’s ports use third party providers for their ground handling services.

[37] Mr Ogilvie put that whether a workplace right actually exists ultimately

depends on a proper construction of the clause. If there is no entitlement to

overtime, it cannot be said that denying the right to overtime is an adverse action.

[38] Mr Ogilvie distinguished the decision in Broadspectrum by observing that the

case concerned different circumstances; namely, compulsory training. That case is

not authority for the proposition that ‘work’ includes personal leave or any other

form of leave.

[39] In reply, Mr Gibian gave a further example of an employee who works for

five or six 10 hour shifts, or even 12 hour shifts, without reaching the threshold and

then has two weeks leave within that roster period. This is a practical outcome

which would be inconvenient and unjust. Mr Gibian also said that the concept of

20 hours of ‘guaranteed’ part time work cannot be reconciled, if an employee takes

three days of leave and then has to be ‘guaranteed’ 20 hours of actual physical

work.

[40] Mr Gibian referred again to the purpose of overtime to compensate employees

for working outside of their usual pattern of hours and serves as a disincentive to

employers requiring employees to work excessive hours. He stressed that Jetstar’s

approach, particularly for part time employees who work outside the usual pattern

of hours, would result in them not receiving any compensation by way of overtime

payments.

CONSIDERATION

[41] Stripped to its fundamental essence, the question for the Commission to

determine is whether the words ‘works’ or ‘worked’ in cl 17 should be read to

include periods of all forms of approved leave (not only personal/carer’s leave) for

the purposes of calculating overtime. It is apparent from the submissions of the

parties, that this is the crux of their dispute. Accordingly, I intend to approach the

matter from that standpoint, which begins with the principles to be applied by the

Commission when interpreting the words in an industrial agreement; in this case an

enterprise agreement.

[42] In Cape Australia Holdings Pty Ltd T/A Total Corrosion Control Pty Ltd v

Construction, Forestry, Mining and Energy Union [2012] FWAFB 3994 the Full

Bench of Fair Work Australia (as the Commission was then styled) said at paras 7-

9:

‘[7] As to the general approach to the construction of enterprise agreements

the observations of French J, as he then was, in City of Wanneroo v

Australian Municipal, Administrative, Clerical and Services Union

(Wanneroo)are apposite:

“[53] The construction of an award, like that of a statute, begins with

a consideration of the ordinary meaning of its words. As with the task

of statutory construction regard must be paid to the context and

purpose of the provision or expression being construed. Context may

appear from the text of the instrument taken as a whole, its

arrangement and the place in it of the provision under construction. It

is not confined to the words of the relevant Act or instrument

surrounding the expression to be construed. It may extend to ‘...the

entire document of which it is a part or to other documents with

which there is an association’. It may also include ‘....ideas that gave

rise to an expression in a document from which it has been taken’

- Short v FW Hercus Pty Ltd (1993) 40 FCR 511 at 518 (Burchett

J); Australian Municipal, Clerical and Services union v Treasurer of

the Commonwealth of Australia (1998) 80 IR 345 (Marshall J).”

[8] While his Honour’s observations were made in the context of

interpreting an award the same principles apply to the interpretation of

enterprise agreements. For example, similar observations were made by

their Honours Gummow, Hayne and Heydon JJ in Amcor v CFMEU:

“Clause 55.1.1 must be read in context. It is necessary, therefore, to

have regard not only to the text of cl 55.1.1, but also to a number of

other matters: first, the other provisions made by cl 55; secondly, the

text and operation of the Agreement both as a whole and by reference

to other particular provisions made by it; and, thirdly, the legislative

background against which the Agreement was made and in which it

was to operate.”

[9] The fact that the instrument being construed is an enterprise agreement is

itself an important contextual consideration. As French J observed

in Wanneroo, at paragraph [57]:

“It is of course necessary, in the construction of an award, to

remember, as a contextual consideration, that it is an award under

consideration. Its words must not be interpreted in a vacuum divorced

from industrial realities - City of Wanneroo v Holmes (1989) 30 IR

362 at 378-379 and cases there cited. There is a long tradition of

generous construction over a strictly literal approach where industrial

awards are concerned - see eg Geo A Bond and Co. Ltd (in liq) v

McKenzie [1929] AR (NSW) 498 at 503-504 (Street J). It may be that

this means no more than that courts and tribunals will not make too

much of infelicitous expression in the drafting of an award nor be

astute to discern absurdity or illogicality or apparent inconsistencies.

But while fractured and illogical prose may be met by a generous and

liberal approach to construction, I repeat what I said in City of

Wanneroo v Holmes (at 380):

“Awards, whether made by consent or otherwise, should make

sense according to the basic conventions of the English

language. They bind the parties on pain of pecuniary

penalties.”’

[43] In Australian Workers’ Union, West Australia Branch v Co-operative Bulk

Handling Limited [2010] FWAFB 4801, the Full Bench of FWA reemphasised the

first principle of agreement interpretation – that a finding should first be made as to

whether the word/s are ambiguous, uncertain or capable of more than one meaning.

It is only after making such a finding that the Commission may look to

‘surrounding circumstances’ to establish the meaning of the words. At paras 12-13,

the Full Bench observed:

‘[12] Neither Swire nor Watson is authority for the proposition that in

resolving the question of whether terms of an agreement are

ambiguous and susceptible of more than one meaning, regard may not

be held to extrinsic material. In so holding the commissioner erred.

Because the manner in which agreements should be construed is in

issue in this appeal, it is worthwhile extracting, in full but omitting

footnotes, the distillation of the law by Vice President Lawler

in Watson:

“[8] There are well established principles under the

general law for the construction of contracts. Those

principles are generally applicable in the construction of

certified agreements. For example, in Telstra

Corporation Ltd v CEPU a Full Bench of the

Commission was concerned with applications to vary a

number of certified agreements and, in the course of its

decision, summarised the principles governing the

resolution of ambiguity in a certified agreement:

“[33] The judgment of the High Court

in Codelfa Construction Pty Ltd v State

Rail Authority of NSW established widely

accepted principles for resolving

ambiguity in contracts. In that case Mason

J stated the rule thus:

‘The true rule is that evidence of

surrounding circumstance is admissible to

assist in the interpretation of the contract if

the language is ambiguous or susceptible

of more than one meaning. But it is not

admissible to contradict the language of

the contract when it has a plain

meaning. Generally speaking facts existing

when the contract was made will not be

receivable as part of the surrounding

circumstances as an aid to construction,

unless they were known to both parties,

although, as we have seen, if the facts are

notorious knowledge of them will be

presumed’ (my emphasis)

[34] In BP Australia Pty Ltd v Nyran Pty

Ltd, Nicholson J distilled, by reference to

Codelfa, the following points of principle

for resolving ambiguity in contracts:

• it is necessary firstly to determine

whether the contract has a plain

meaning or contains an ambiguity;

• if the contract has a plain

meaning, evidence of surrounding

circumstances will not be

admissible to contradict the

language of the contract;

• if the language of the contract is

ambiguous or susceptible of more

than one meaning evidence of

surrounding circumstances is

admissible to assist in the

interpretation of the contract;

• the concept of surrounding

circumstances is to be understood to

be a reference to the objective

framework of facts. It will include:

• evidence of prior negotiations so

far as they tend to establish

objective background facts known to

both parties and the subject matter

of the contract;

• facts so notorious that knowledge

of them is to be presumed;

• evidence of a matter in common

contemplation and constituting a

common assumption. (my emphasis)

[35] After referring to the foregoing points

of principle Nicholson J continued as

follows:

‘From the evidence of that setting the

parties’ presumed intention may be taken

into account in determining which of two

or more possible meanings is to be given to

a contractual provision. What cannot be

taken into account is evidence of

statements and actions of the parties which

are reflective of their actual intentions and

expectations. Objective background facts

can include statements and actions of the

parties which reflect their mutual actual

intentions. That is, evidence of the mutual

subjective intention of the parties to a

contract may be part of the objective

framework of facts within which the

contract came into existence. It is the

mutuality which makes the evidence

admissible’”

[9] In Kucks v CSR Limited Madgwick J held:

“It is trite that narrow or pedantic

approaches to the interpretation of an

award are misplaced. The search is for the

meaning intended by the framer(s) of the

document, bearing in mind that such

framer(s) were likely of a practical bent of

mind: they may well have been more

concerned with expressing an intention in

ways likely to have been understood in the

context of the relevant industry and

industrial relations environment than with

legal niceties or jargon. Thus, for example,

it is justifiable to read the award to give

effect to its evident purposes, having

regard to such context, despite mere

inconsistencies or infelicities of expression

which might tend to some other reading.

And meanings which avoid inconvenience

or injustice may reasonably be strained

for. For reasons such as these, expressions

which have been held in the case of other

instruments to have been used to mean

particular things may sensibly and

properly be held to mean something else in

the document at hand.

But the task remains one of interpreting a

document produced by another or others.

A court is not free to give effect to some

anteriorly derived notion of what would be

fair or just, regardless of what has been

written into the award. Deciding what an

existing award means is a process quite

different from deciding, as an arbitral body

does, what might fairly be put into an

award. So, for example, ordinary or well-

understood words are in general to be

accorded their ordinary or usual

meaning.” (my emphasis)

[10] These remarks were made in the context of

construing an award. However, Madgwick J’s approach

has been adopted in relation to the construction of

certified agreements. In Australasian Meat Industry

Employees’ Union v Coles Supermarkets Australia Pty

Ltd Northrop J observed:

“The increase in the number of certified

agreements gives rise to an area of

possibly greater dispute as to the

construction of provisions contained in the

agreements. The parties may adopt a

multitude of different structures and

methods of terminology. No common

pattern may develop. Nevertheless certified

agreements are to be construed adopting

the same methodology as that used in

construing awards. In Kucks v CSR

Limited(1996) 66 IR 182 Madgwick J,

sitting as a judge of the Industrial

Relations Court of Australia, at 184

expressed his opinion on the legal

principles to be applied in construing

awards under the Act. I agree with that

statement of principles. They have even

stronger application to certified

agreements.”

[11] This view was approved by the Full Court of the

Federal Court in Ansett Australia Limited v Australian

Licensed Aircraft Engineers’ Association.

[12] In United Firefighters’ Union of Australia v

Metropolitan Fire and Emergency Services Board the

Full Court of the Federal Court, in the context of

construing a dispute resolution clause in a certified

agreement, noted:

“The parties agree that the proper

approach to the construction of industrial

instruments was stated by Madgwick J

in Kucks at 184. His Honour’s statement of

the principles was followed by a Full Court

in Ansett Australia Limited v Australian

Licensed Aircraft Engineers’

Association [2003] FCAFC 209 at [8] and

by two Justices of the High Court in Amcor

Limited v Construction Forestry Mining &

Energy Union [2005] HCA 10 at[96] per

Kirby J and at [130] per Callinan J. That

was the approach which was adopted by

the learned primary judge.

A narrow or pedantic approach is not to be

taken. The intention of the framers of the

document is to be ascertained objectively,

bearing in mind that they are likely to have

been people of a practical bent of mind.

Their intention may well have been

expressed in ways likely to have been

understood in the relevant industry, rather

than in “legal niceties or jargon.”;

see Kucks at 184.

Clearly enough, the language of the

instrument must be construed in its context,

having regard to the subject matter and the

wording of the entire agreement: Short v

FW Hercus Pty Limited [1993] FCA 51;

(1993) 40 FCR 511 at 518. The context

will include the statutory context in which

the agreement is made.” (emphasis added)

[13] In Short v FW Hercus Pty Ltd Burchett J, with

whom Drummond J agreed, considered whether inter

alia, with whether it is legitimate, for the purpose of

construing a clause of an award, to look at the history of

the provision. After considering a number of authorities,

Burchett J observed:

“No one doubts you must read any

expression in its context. And if, for

example, an expression was first created

by a particularly respected draftsman for

the purpose of stating the substance of a

suggested term of an award, was then

adopted in a number of subsequent clauses

of awards dealing with the same general

subject, and finally was adopted as a

clause dealing with that same general

subject in the award to be construed, the

circumstances of the origin and use of the

clause are plainly relevant to an

understanding of what is likely to have

been intended by its use. It is in those

circumstances that the author of the award

has inserted this particular clause into it,

and they may fairly be regarded as having

shaped his decision to do so. The rules of

construction, Mason and Wilson JJ. said

in Cooper Brookes (Wollongong)

Proprietary Limited v. The Commissioner

of Taxation of the Commonwealth of

Australia [1981] HCA 26; (1981) 147 CLR

297 at 320, are really rules of common

sense. Common sense would be much

offended by a refusal to look at the facts I

have summarized. As Isaacs J. said

in Australian Agricultural Company v.

Federated Engine-Drivers and Firemen’s

Association of Australasia [1913] HCA

41; (1913) 17 CLR 261 at 272, citing Lord

Halsbury L.C.: “The time when, and the

circumstances under which, an instrument

is made, supply the best and surest mode of

expounding it.”

The context of an expression may thus be

much more than the words that are its

immediate neighbours. Context may extend

to the entire document of which it is a part,

or to other documents with which there is

an association. Context may also include,

in some cases, ideas that gave rise to an

expression in a document from which it has

been taken. When the expression was

transplanted, it may have brought with it

some of the soil in which it once grew,

retaining a special strength and colour in

its new environment. There is no inherent

necessity to read it as uprooted and

stripped of every trace of its former

significance, standing bare in alien

ground. True, sometimes it does stand as if

alone. But that should not be just assumed,

in the case of an expression with a known

source, without looking at its creation,

understanding its original meaning, and

then seeing how it is now used. Very

frequently, perhaps most often, the

immediate context is the clearest guide, but

the court should not deny itself all other

guidance in those cases where it can be

seen that more is needed. In literature,

Milton and Joyce could not be read in

ignorance of the source of their language,

nor should a legal document, including an

award, be so read.

...Where the circumstances allow the court

to conclude that a clause in an award is

the product of a history, out of which it

grew to be adopted in its present form,

only a kind of wilful judicial blindness

could lead the court to deny itself the light

of that history, and to prefer to peer

unaided at some obscurity in the language.

“Sometimes”, McHugh J. said

in Saraswati v. R [1991] HCA 21; (1991)

172 CLR 1 at 21, the purpose of legislation

“can be discerned only by reference to the

history of the legislation and the state of

the law when it was enacted”. Awards

must be in the same position.

But even if the language, read alone,

appeared pellucidly clear, the tendency of

recent decisions - and this is the other

answer to the argument put - would seem

to require the court to look at the full

context. Only then will all the nuances of

the language be perceived. The judgment

of Mason J. (with which Stephen and

Wilson JJ. expressed agreement)

in Codelfa Construction Proprietary

Limited v. State Rail Authority of New

South Wales(1982) 149 CLR 337 at 347-

353 contains an extended discussion of the

principles upon which a court may take

account, when construing a contract, of the

circumstances surrounding the agreement

of the parties upon those particular terms.

In the course of that discussion, Mason J.

suggested (at 350) that “perhaps ... the

difference ... is more apparent than real”

between the view that evidence is

admissible only to resolve an ambiguity,

not to raise it, and the view that extrinsic

evidence is receivable both to raise and to

resolve an ambiguity. He concluded (at

352):

“The true rule is that evidence of

surrounding circumstances is

admissible to assist in the

interpretation of the contract if the

language is ambiguous

or susceptible of more than one

meaning. But it is not admissible to

contradict the language of the

contract when it has a plain

meaning. Generally speaking facts

existing when the contract was made

will not be receivable as part of the

surrounding circumstances as an

aid to construction, unless they were

known to both parties, although ... if

the facts are notorious knowledge of

them will be presumed.” (my

emphasis)

The fact is that words are frequently

susceptible of more than one meaning.

Paradoxically, ambiguity may be born of

the reader’s clarity of thought which

perceives a potentiality for an alternative

meaning. But in many cases only evidence

of extrinsic facts can show that the

potentiality has substance. The old

case Macdonald v. Longbottom (1859) 1 El

and El 977 [1859] EngR 635; (120 ER

1177), to which Mason J. referred, is an

example, since there is nothing necessarily

ambiguous in the expression “your wool”

(indeed Erle J. at 986 described it as

“most explicit”) - only evidence that at the

time the vendor had both wool of his own

growing, and also wool which he had

bought in from others, could raise an

ambiguity, while at the same time solving it

once the other party was shown to have

known the facts.

Mason J. returned to the subject in his dissenting

judgment in K. and S. Lake City Freighters Proprietary

Limited v. Gordon and Gotch Limited [1985] HCA

48; (1985) 157 CLR 309 at 315, when he 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. The

modern approach to interpretation insists

that the context be considered in the first

instance, especially in the case of general

words, and not merely at some later stage

when ambiguity might be thought to

arise.”

This is a broad proposition, applicable to

problems of construction generally,

although it was put forward in the context

of statutory interpretation. ...”

[14] While Short v FW Hercus Pty Ltd was concerned

with the proper construction of a clause in an award, it is

clear it is equally applicable to the construction of

certified agreements as illustrated by the reliance placed

upon it by the Full Court in United Firefighters’ Union

of Australia in the passage set out above.

[15] In summary, the general principles governing the

construction of contracts laid down by the High Court

in Codelfa Construction Pty Ltd v State Rail Authority

of New South Wales apply to the construction of

industrial agreements. However, consistent with the

approach in Kucks and Short v FW Hercus Pty Ltd, an

industrial agreement must always be construed in

context: the context of particular provisions within the

agreement as a whole and the context in which the

agreement was made including any relevant statutory or

historical context. Extrinsic evidence as to the context in

which the agreement was made, including the statutory

and historical context, will be admissible to demonstrate

the existence of ambiguity and or to resolve ambiguity.”

[13] Recently, Logan, J, after citing the passage from Kucks succinctly stated:

“The starting point must always be the

language employed by the parties to an

industrial agreement but industrial

context and purpose are always relevant

when construing that language...”’ (my

emphasis)

[44] Of course, in the quaintly titled and oft quoted decision of Golden

Cockerel, the Full Bench of the Commission summarised the relevant principles at

paragraph [41] as follows:

‘1. The Acts Interpretation Act does not apply to the construction of an

enterprise agreement made under the Act.

2. In construing an enterprise agreement it is first necessary to

determine whether an agreement has a plain meaning or contains an

ambiguity.

3. Regard may be had to evidence of surrounding circumstances to

assist in determining whether an ambiguity exists.

4. If the agreement has a plain meaning, evidence of the surrounding

circumstances will not be admitted to contradict the plain language of

the agreement.

5. If the language of the agreement is ambiguous or susceptible to

more than one meaning then evidence of the surrounding

circumstance will be admissible to aid the interpretation of the

agreement.

6. Admissible evidence of the surrounding circumstances is evidence

of the objective framework of fact and will include:

(a) evidence of prior negotiations to the extent that the

negotiations tend to establish objective background facts

known to all parties and the subject matter of the agreement;

(b) notorious facts of which knowledge is to be presumed;

(c) evidence of matters in common contemplation and

constituting a common assumption.

7. The resolution of a disputed construction of an agreement will turn

on the language of the agreement understood having regard to its

context and purpose.

8. Context might appear from:

(a) the text of the agreement viewed as a whole;

(b) the disputed provision’s place and arrangement in the

agreement;

(c) the legislative context under which the agreement was

made and in which it operates.

9. Where the common intention of the parties is sought to be

identified, regard is not to be had to the subjective intentions or

expectations of the parties. A common intention is identified

objectively, that is by reference to that which a reasonable person

would understand by the language the parties have used to express

their agreement.

10. The task of interpreting an agreement does not involve rewriting

the agreement to achieve what might be regarded as a fair or just

outcome. The task is always one of interpreting the agreement

produced by parties.’

[45] A recent Full Bench of the Commission neatly set out the first step in the

interpretive process. In Thiess Pty Ltd v Construction, Forestry, Mining and

Energy Union [2017] FWCFB 2459 the Full Bench said at para 21:

‘[21] Without reciting at length the principles applicable to the

construction of an enterprise agreement, much like the approach to

construing a statute, the construction of an enterprise agreement

begins with a consideration of the ordinary meaning of the words

used, having regard to the context and evident purpose of the

provision or expression being construed.Context may be found in

the provisions of the agreement taken as a whole, or in their

arrangement and place in the agreement being considered. The

statutory framework under which the agreement is made may also

provide context, as might an antecedent instrument or instruments

from which particular provisions might have been derived.’ (my

emphasis)

[46] In my view, with these principles steadily borne in mind, the words ‘works’ or

‘worked’ in the context of cl 17 of the Agreement are not ambiguous, uncertain or

capable of more than one meaning. The word ‘works’ or ‘worked’ must mean

being physically at work and performing work or other functions associated with

work, at the employer’s direction. This conclusion accords with what the Full

Court of the Federal Court said in Warramunda Village Inc v Pryde [2002] FCA

250 where Lee, Finkelstein and Gyles JJ said at para [17]:

‘It cannot be said that, in rendering a "sleep-over shift", an employee

is "on call" within the meaning of cl 32. For the purpose of cl 32 an

employee who is off duty but "on call" is free to conduct his, or her,

private life subject to the employer being able to direct the employee

to report for duty, and to the employee organizing his or her affairs to

be able to respond to that direction if given. (See: Suffolk County

Council v Secretary of State for the Environment [1984] ICR 822

(House of Lords)). An employee who attends at the place of

employment pursuant to the employer's direction to be at the

employer's premises for a period of time and be available to

provide service at the premises as required by the employer, is

not carrying on private activities but is providing service to the

employer. Such an employee is at "work" for the purposes of the

1995 Award and is entitled to be remunerated according to the

terms of the Award. (See: Hospital Employees' Industrial Union of

Workers, WA v Proprietors of Lee-Downs Nursing Home (1977) 51

WAIG 455 per Burt CJ at 456).’ (My emphasis)

[47] Moreover, this result is entirely consistent with what a reasonable lay observer

would understand to be the meaning of the words and their purpose and the usual

and logical definition of the word ‘work’. The Macquarie Dictionary defines work

as meaning:

‘ 1. Exertion directed to produce or accomplish something; labour; toil.

2. That on which exertion or labour is expended; something to be made or

done; a task or undertaking.

3. Productive or operative activity…’

[48] Further, as was said by Madgwick J, in Kucks v CSR Ltd (1996) 66 IR 182

(‘Kucks’):

‘But the task remains one of interpreting a document produced by

another or others. A court is not free to give effect to some anteriorly

derived notion of what would be fair or just, regardless of what has

been written into the award. Deciding what an existing

award means is a process quite different from deciding, as an arbitral

body does, what might fairly be put into an award. So, for example,

ordinary or well-understood words are in general to be accorded

their ordinary or usual meaning.’ (my emphasis)

[49] When viewed in this way, I cannot see how it is possible or logical that ‘work’

includes periods where no tasks are undertaken and nothing is made or done for the

benefit of the employer. Axiomatically, this must include periods of annual leave,

personal leave and other leave.

[50] I am also satisfied that this conclusion is consistent with how the word is used

in the context of the Agreement as a whole. For example:

(a) Clause 10.10 provides for the maintenance of the ‘status quo’ in the

way work is performed whilst a dispute is on foot;

(b) Clause 16.2 provides for the payment of higher duties where an

employee works higher duties for part or all of a shift;

(c) Clause 17.3 requires work to be actually performed on a seventh

consecutive day before overtime is payable.

(d) Clause 18.3.1 provides that an overtime meal allowance is payable to an

employee who works more than 1 hour of overtime, and then after each

subsequent 4 hours of overtime worked;

(e) Clause 20.2 provides for the payment of double time where an

employee works a shift whose start and/or finish time is changed by more

than 30 minutes with less than 48 hours’ notice;

(f) Clause 23 provides for meal breaks according to time actually worked;

(g) Clause 28 provides for public holiday penalties to be paid for time

actually worked on a public holiday; and

(h) Clause 31 provides for the provision of notice on termination, and allows

the period to be worked, or for a payment to be made in lieu of it

being worked.

[51] Support for Jetstar’s interpretation can also be found by how overtime is

treated within cl 17 itself. Subsection (4) of cl 17 provides for overtime for casual

employees. As casual employees do not receive annual leave or sick leave, the

interpretation for which the Union contends cannot possibly apply to them. This is

entirely consistent with how the clause should be properly interpreted as it applies

to all categories of employment. In addition, this consistent approach within the

clause itself is also reflected in the new cl 17.3 which requires overtime to be paid

for actual work to be performed on a seventh consecutive day. It would be

nonsensical to suggest that overtime was to be paid if the seventh day was a leave

day.

[52] Moreover, when viewed in the context of the underlying beneficial purpose or

social intent (jury service, blood donor leave, community service etc.)

underpinning various forms of leave, the meaning of ‘works’ or ‘worked’ is

manifest and obvious. Let me further explain.

[53] The origin and evolutionary extension of annual and long service leave was to

recognise that workers require reasonable periods of time away from work to

recover from the physical and/or psychological impacts of work and be able to

spend quality time at leisure or on holidays with family or friends; in other words,

activities undertaken in a private capacity. To my mind, this is the very antitheses

to being ‘at work’, using ‘exertion to produce or accomplish something’.

[54] Similarly, a worker’s entitlement to access personal leave for sickness or

injury or to care for a sick or injured family member, is respectively because the

worker has no capacity for ‘work’ or to be ‘at work’. In my opinion, it is difficult

to reconcile the notion of ‘work’ with the very opposite notion of incapacity to

work or an inability to attend for work because of carer’s responsibilities.

[55] Further, in my judgement, the Union can take little comfort from the decision

in Broadspectrum. This is so because that decision can be readily distinguished

from the present case on a number of bases. The question

in Broadspectrum concerned whether the time taken by employees when

undertaking compulsory training constituted ‘work’ for the purposes of the

applicable agreement. This is an entirely different concept, with a different

industrial purpose, to paid leave.

[56] Training which is compulsory (that is a requirement of the employer), has as

its purpose, the enhancement of the skills or abilities of the employee. This is

undoubtedly a prospective benefit for both the employer’s business and the

employee’s future employability. It could hardly be said that the accessing of an

entitlement to annual leave, personal leave, long service leave, community service

or other leave, results in a beneficial outcome for the employer. The reasonable lay

observer’s understanding of an entitlement to leave, arising in an employment

context, would clearly be different to a requirement of the employer that an

employee, do or undertake something which results in a benefit to the employer’s

business or enterprise. In addition, in Broadspectrum, the Full Bench said any

distinction between work and training depends, in a particular case, on the

principles to be applied to the construction of enterprise agreements (Golden

Cockerel), rather than by a preliminary assumption that parties seek to distinguish

between work and training (see paragraph [96]).

CONCLUSION

[57] Having found no ambiguity or uncertainty with words ‘works’ and ‘worked’

in cl 17, it is impermissible according to the principles of agreement interpretation,

to look to ‘surrounding circumstances’ to seek an outcome incompatible with the

plain, ordinary English understanding of the words, or look to history or other

circumstances to produce a fairer or more just outcome. As was said by KatzmannJ

in Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing

and Allied Services Union of Australia v Excelior Pty Ltd [2013] FCA 638 at para

[77]:

The consequences for Mr Butterworth are unfortunate. In the

21st century it is hard to see why an employee who is required by the

terms of his contract of employment to attend training far from his

accustomed workplace should have to shoulder the lion’s share of the

costs of travel and accommodation to enable him to do so. But the

Court’s task is to interpret the award, not to remake it. It would

be “wrong to strain the words of the award to achieve a result

that might be considered fair or desirable according to some a

priori standard of fairness or proper employment practice” (ACX

Ltd v DCT at [115]). The remedy lies elsewhere. (My emphasis)

See also: Kucks supra above.

In any event, I consider the interpretation I prefer, does not produce an unjust,

unfair or unreasonable outcome.

[58] For these reasons, I reject the interpretation of cl 17 in the 2016 Agreement

pressed upon the Commission by the Union. The dispute is determined accordingly

and the application is dismissed.

DEPUTY PRESIDENT

Appearances:

Mr M Gibian of Counsel for the Transport Workers’ Union of Australia.

Mr N Ogilvie, Solicitor, for Jetstar Services Pty Ltd.

Hearing details:

Sydney.

2017.

April 11.

Final written submissions:

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