[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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