Application by Egans Asset Management Pty Ltd
[2011] FWA 4129
•8 JULY 2011
[2011] FWA 4129 |
|
DECISION |
Fair Work (Transitional Provisions and Consequential Amendments) Act 2009
Sch. 3, Item 10 - Application to vary transitional instrument to remove ambiguity
Application by Egans Asset Management Pty Ltd
(AG2011/9309)
Road transport industry | |
COMMISSIONER LEWIN | MELBOURNE, 8 JULY 2011 |
Transitional Instrument - ambiguity or uncertainty - application to vary - principles - mutual intention of parties at time Agreement made
[1] This decision concerns an application to vary the Egan’s Asset Management Pty Ltd Employee Collective Agreement (AC314330/ CAEN084889274) (the Agreement). The applicant is Egans Asset Management Pty Ltd (Egans). The Agreement is a workplace agreement made and approved under the provisions of the Workplace Relations Act 1996 (the WR Act).
[2] The Agreement is a transitional instrument within the meaning of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (the Transitional Act). Schedule 3 of the Transitional Act provides for the continued existence of instruments made under the WR Act as transitional instruments including workplace agreements made under that Act.
[3] Part 3 of Schedule 3 of the Transitional Act provides for the variation of a transitional instrument. In particular Item 10 of Part 3 of that Act provides as follows:
“10 All kinds of transitional instrument: variation to remove ambiguities etc.
(1) On application by a person covered by a transitional instrument, FWA may make a determination varying the instrument:
(a) to remove an ambiguity or uncertainty in the instrument; or
(b) to resolve an uncertainty or difficulty relating to the interaction between the instrument and a modern award; or
(c) to remove terms that are inconsistent with Part 3-1 of the FW Act (which deals with general protections), or to vary terms to make them consistent with that Part.
Note: For variation of a transitional instrument to resolve an uncertainty or difficulty relating to the interaction between the instrument and the National Employment Standards, see item 26.
(2) A variation of a transitional instrument operates from the day specified in the determination, which may be a day before the determination is made.”
[4] Egans’ application relies upon Item 10(1)(a) above. Egan’s submit that the provisions of Clauses 1(a) and (b) of the Agreement are ambiguous and/ or uncertain. Clause 1 of the Agreement is set out below:
“1. Parties
(a) Egans Asset Management Pty Ltd (Egans); and
(b) The employees engaged by Egans in any of the positions referred to in the Classification Structure in Schedule 1 of this Agreement (“you/your/the Employees”).”
[5] Egans have explained the circumstances which give rise to the application in written submissions as follows:
“At the time the Agreement was lodged, the only employees so engaged were engaged in Victoria. Egans’ operations have since expanded to include engagement of employees in the Agreement’s Classification Structure outside Victoria.
In circumstances where Egans’ operations have expanded, an ambiguity or uncertainty arises as to whether the employees now engaged in Egans’ operations outside Victoria, who fall under the Classification Structure in the Agreement, are parties to the Agreement. This ambiguity or uncertainty arises because of the absence of express words in clause 1 of the Agreement stating that the parties to the Agreement are all employees of Egans regardless of the location in which they perform their work.
Fair Work Australia may exercise its discretion to remove this ambiguity or uncertainty by varying the Agreement.”
[6] The engagement outside Victoria is currently limited to two employees in South Australia.
[7] The order sought by Egans is set out in the application as follows:
“(a) the insertion of the words ‘as it operates within Australia’, in clause 1(a), as follows (variation underlined):
‘(a) Egans Asset Management Pty Lyd (“Egans”), as it operates within Australia; and’
(b) the insertion of the words ‘anywhere in Australia’ in clause 1(b), as follows (variation underline):
‘(b) The employees engaged by Egans, anywhere in Australia, in any of the positions referred to in the Classification Structure in Schedule 1 of this Agreement (“you/your/the Employees”)
[8] It may be conveniently noted that the variation sought, in relevant circumstances, would potentially extend the operation of the terms of a workplace agreement made between Egans and its employees in Victoria, at a time when Egans had no operations outside Victoria, throughout the Commonwealth.
[9] Egans made submissions in writing that the principles upon which the application should be decided are as stated by Vice President Lawler in Association of Professional Engineers, Scientists and Managers, Australia v Oceanic Coal Australia Pty Ltd [2011] FWA 3146.
[10] The Vice President stated as follows in that decision:
“(a) The discretion to vary an agreement to remove ambiguity or uncertainty not enlivened unless and until the tribunal identifies ambiguity or uncertainty.
(b) Once ambiguity or uncertainty has been identified it is a matter of discretion as to whether or not the agreement should be varied to remove the ambiguity or uncertainty.
(c) In exercising that discretion the tribunal must have regard to the mutual intention of the parties at the time the agreement was made as a matter to which significant weight should be accorded. In particular:
(i) The tribunal should have regard to the mutual intention of the parties objectively ascertained. That is, the tribunal should have regard to the construction of the relevant clause that is yielded by an application of the conventional principles of construction of industrial agreements. This will usually, if not invariably, involve the tribunal in considering the objective matrix of facts within which the agreement was made.
(ii) The tribunal should also have regard to whether there was a mutual subjective intention, that is, whether the subjective intention of the parties coincided. Such an intention may be discerned from the circumstances at the time and the subsequent conduct of the parties.
(d) Regard should be had to the objects of the Act in which the power to vary is found.
(e) While the discretion should be exercised having regard to all the circumstances of the case, other matters to which regard may be had include representations as to the effect of the agreement made to employees by the employer, directly or through an agent (which may include a union).” (Footnotes omitted).
[11] A hearing of the application was conducted on 6 June 2011 at which Mr Foster, General Manager of Egans gave evidence. I have had regard to all of that evidence, however for reasons which will become clearer below I consider the following extract from the evidence to be of particular relevance to this matter:
“What was contemplated was for all employees to be determined by the job descriptions to be covered by the agreement.” 1
“It wasn't specifically contemplated that we would expand to other states, but it wasn't necessarily discounted. It wasn't addressed at the time.” 2
[12] The submission of Egans is that the provisions of Clause 1, of the Agreement are uncertain as to the geographic area within which the Agreement has application. This is so by the omission of any descriptive words addressing this subject. Accordingly, the Agreement might be alternatively considered to operate only in respect of Egans’ operation in Victoria or any operation of Egans in Australia or beyond, where the WR Act gave and the Transitional Act gives statutory force to the terms of the Agreement.
[13] Accepting that such uncertainty arises in this case, as I do, the issue then becomes one of what remedy if any should be determined.
[14] In my view, the mutual intention of the parties to the Agreement at the time it was made was to provide terms and conditions of employment for the employees employed at the time in Egan’s Victorian operations. So much is made certain by the Employer’s Declaration signed by Mr Foster on 29 April 2008 and received by the Workplace Authority on 2 May 2008. An extract from the Employer Declaration Form submitted to the Workplace Authority is set out below:
[15] I obtained the abovementioned information from the Fair Work Ombudsman and provided Egans with an opportunity to make submissions following consideration of this material for the purposes of the application. Egans advised that they did not wish to make further submissions in relation to this material.
[16] Since the making of the Agreement many things have changed, the operations of Egans in South Australia are arguably subject to the Fair Work Act 2009 (the Act). The Act provides significantly different rights, duties and obligations for employers and employers to those provided by the WR Act at the time the Agreement was made. Furthermore, there are enterprise bargaining and agreement approval provisions under the Act which are also significantly different to those applying at the time the Agreement was made.
[17] To vary the Agreement as sought would have the effect of denying to employee(s) currently employed in South Australia the rights to bargain in accordance with the provisions of the Act.
[18] Moreover, the variation sought would have the effect of extending the effect of the Agreement made in Victoria, in 2008, to effectively exclude the operation of provisions of the Act in relation to enterprise bargaining and modern awards made under the Act in respect of any employee who may be employed in other states and territories of the Commonwealth in future.
[19] Having regard to what I consider to be the clear mutual intention of the parties at the time the Agreement was made, to provide terms and conditions of employment for employees of Egans at the relevant time in the state of Victoria, it is appropriate to vary the Agreement so as to make certain the effect of that intention by providing terms that confine the operation of the Agreement to Victoria.
[20] An order varying the terms of the Agreement to provide such certainty will issue accordingly.
COMMISSIONER
Appearances:
C Sullivan for Egans Asset Management Pty Ltd.
Hearing details:
2011.
Melbourne:
June 6.
1 PN61
2 PN62
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