Australasian Meat Industry Employees' Union, The v Brismeat Queensland (Woolworths Limited) t/a Brismeat

[2017] FWC 4700

[2017] FWC 4700

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s 739 - Application to deal with a dispute

Australasian Meat Industry Employees’ Union, The
v
Brismeat Queensland (Woolworths Limited) t/a Brismeat
(C2015/1935)

Meat Industry
DEPUTY PRESIDENT SAMS	SYDNEY, 20 OCTOBER 2017

Dispute about a matter arising under an enterprise agreement – meat industry – overweight allowance – whether allowance payable on all forms of approved absences from work – interpretation of relevant clause – principles of interpretation – principles modified by Full Bench decision in ‘Berri’ – whether words used ambiguous, uncertain or capable of more than one meaning – cl 3.7 ambiguous and uncertain – use of extrinsic material – minutes of bargaining meetings for 2011 Agreement – no intention to apply meaning of words as contended by the Union – overweight allowances do not apply to all forms of authorised absences, except for personal leave and jury duty (the exceptions) – pro rata absences recognised – dispute resolved .

BACKGROUND

[1] This matter has its genesis in an application, filed by the Australasian Meat Industry Employees’ Union (the ‘Union’) on 4 March 2015, in which the Union sought to have the Fair Work Commission (the ‘Commission’) deal with a dispute in accordance with a dispute settlement procedure (‘DSP’) under an agreement. The application names Brismeat Queensland (Woolworths Ltd) (‘Brismeat’) as the respondent to the dispute under the Woolworths Limited - Brismeat, Queensland and the Australasian Meat Industry Employees' Union Agreement 2011[AE885980] (the ‘2011 Agreement’).

[2] In essence, the dispute concerns the interpretation of cl 3.7 of the Agreement (the ‘disputed clause’) and whether, in the Union’s view, overweight payments are payable on all forms of authorised absences from work, including but not limited to, annual leave, long service leave and workers’ compensation. The Union claims that as a consequence of its interpretation, 180 employees at Brismeat’s factory in Churchill, Ipswich, Queensland have been underpaid for about five years. The Union seeks back pay for all affected employees employed during the life of the 2011 Agreement. Of course, the exact number of employees affected will be greater if employees have left the employ of Brismeat over that period and are taken to have claims against Brismeat. This would include about half the workforce that were made redundant during the life the 2011 Agreement. I was informed that the overweight allowance is based on a complicated formula relating to the body weight of the processed animal and results in about $200 a week for each employee. The allowance forms part of ordinary time earnings.

[3] In this context, I understand the parties have agreed that the following question be put before the Commission for determination:

‘Does the proper application of cl 3.7 of the Agreement provide that all authorised absences, where the employee is entitled to payment for the absence, such as annual leave and other forms of paid leave, attract overweight payments?’

[4] The disputed clause in the 2011 Agreement reads as follows:

3.7 OVERWEIGHT PAYMENTS

3.7.1 Butchers, Follow-on Knifehands, and Follow-on Labourers, must work the full week (i.e. 38 hours) to obtain any overweight payment for that week.

3.7.2 Absence from Work

If an employee is absent from work, then the following clauses apply:

a) Employees must have any absence authorised, and be entitled to payment for the absence, in order to receive an overweight payment for the week.

For example, an employee who is absent from work due to illness, and whose absence is approved by the Company as paid personal leave, is entitled to receive the overweight payment for the week.

b) An employee who is a late starter, and is docked the relevant amount of time for that day, will not be entitled to the full week overweight payment. Instead, the employee will be entitled to a proportionate amount of the weekly overweight payment.

c) An employee who leaves early and is docked the relevant amount of time for leaving early, receives no overweight payment for the week.

d) An employee absent to attend Jury Duty, and whose absence is authorised by the Company, will be entitled to receive the full overweight payment for the week.

e) An employee absent due to workers' compensation, authorised annual leave or authorised compassionate leave (i.e. to attend a funeral) will be entitled to a pro rata overweight payment for the day of authorised absence. In the case of an employee being absent for authorised compassionate leave (i.e. to attend a funeral), the following conditions and limitations apply:

i) The employee must prove to the satisfaction of the Company the person's name, time and place of the funeral;

ii) Upon abuse or failure to provide adequate information, the Company reserves the right to refuse payment.

3.7.3 General Labourers And General Knifehands;

a) Working in the Boning Room receives a pro-rata weekly overweight payment. In other words, the payment is based on the number of days the General labourers and general knifehands are working in the Boning Room.

b) Working in the Boning Room must, on any day of absence, have that day authorised by the Company, and be entitled to payment for the absence, in order to be entitled to any overweight payment for the week, the payment is based on the number of days worked in the Boning Room. For example, an employee who is absent from work due to illness, and whose absence is approved by the Company as paid personal leave, is entitled to receive the overweight payment for the week.

c) Working in the Boning Room for four consecutive days, and in circumstances where the fifth consecutive day is a public holiday, will be entitled to the full overweight payment for that week.

3.7.4 Casual Employees

a) The following applies to casual employees (other than new Employees):

i) They must work 38 hours per week to be entitled to receive the overweight payment for that week.

ii) Casual employees (other than new Employees) working four consecutive days in the Boning Room, and in circumstances where the fifth consecutive day is a public holiday, will be entitled to the full overweight payment for the week.

b) In the case of new casual Employees, the following applies:

i) They will only be entitled to a pro rata overweight payment based on the days worked in the Boning Room.

3.7.5 Part Time Employees Part-time employees working in the Boning Room will be entitled to a pro-rata overweight payment based on the days worked in the Boning Room.

[5] The 2011 Agreement replaced the Woolworths, trading as Brismeat and the Australasian Meat Industry Employees’ Union Agreement 2007 (the ‘2007 Agreement’). The corresponding clause in the 2007 Agreement was quite different to the disputed clause. It reads:

3.7 OVERWEIGHT PAYMENTS

3.7.1 Butchers, Follow-on Knifehands and follow-on Labourers must work the full week (38 hours) to obtain any overweight payment for that week.

3.7.2 Employees must have sufficient accrued Personal Leave entitlement due when taking time off for sickness in order to receive an overweight payment.

3.7.3 A General labourer working in the Boning Room three days receives three-fifths of the available overweight payment.

3.7.4 A General labourer working in the Boning Room three days and absent one day whilst in the Value-Adding still receives three-fifths of the available overweight payment if sufficient Personal leave is accrued.

3.7.5 A General labourer working in the Boning Room three days and absent one day whilst in the Value-Adding receives none of the available overweight payment if insufficient Personal leave is accrued but is paid the three days at follow-on rates.

3.7.6 If a follow-on staff member is late starter and is docked relevant amount of time for that day will still receive four-fifths of any available overweight payment.

3.7.7 Staff member docked for one day receives NO overweight payment.

3.7.8 Staff member who leaves early and is docked, eg. 1 pm docked one hour 41 mins loses overweight payment for the week.

3.7.9 Annual Leave starting returning mid-week NO overweight payment for that week.

3.7.10 One day Family Leave (Annual) 4/5 overweight payment.

3.7.11 Returning mid-week from compensation receives proportionate overweight payment.

3.7.12 If absent for Jury Duty overweight payment will be paid for that week.

3.7.13 If absent due to illness for entire week overweight payment will be paid if sufficient sick pay is accrued.

3.7.14 A casual employee must work a full 38 hours to receive the overweight payment with the exception of a new starter where a proportionate payment will be made.

3.7.15 PUBLIC HOLIDAY an employee (permanent) loaded in the Value-Adding but working in the Boning Room four days (fifth day public holiday) will receive the FULL overweight payment.

3.7.16 PUBLIC HOLIDAY a casual employee working four days in the Boning Room (5th day public holiday) will receive the FULL overweight payment BUT if he works three days (eg) he will receive three fifths of the overweight payment.

3.7.17 One day annual leave during the week – receive no overweight payment.

3.7.18 Employees working in the Boning Room attending a funeral will be entitled to overweight payments on a pro-rata basis. Subject to the following conditions and limitations. The employee must prove to the satisfaction of their employer the person’s name, time and place of the funeral. Upon abuse or failure to provide adequate information, the employer reserves the right to refuse payment.

[6] It is relevant to note that given the passage of time, the 2011 Agreement has itself been replaced by the Woolworths Limited - Wow Meat Company Churchill and the Australasian Meat Industry Employees’ Union Agreement 2014 [AE414319] (the ‘2014 Agreement’). Clause 3.7 of the 2014 Agreement is in different terms, but not relevantly different to distinguish the Union’s claim under both Agreements. It reads:

3.7.1 Butchers, follow-on Knifehands, and Follow-on Labourers, must work the full week (i.e. 38 hours) to obtain any overweight payment for that week.

3.7.2 Absence from Work

If an employee is absent from work, then the following clauses apply:

a) Employees must have any absence authorised, and be entitled to payment for the absence, in order to receive an overweight payment for the week.

For example, an employee who is absent from work due to illness, and whose absence is approved by the Company as paid personal leave, is entitled to receive the overweight payment for the week.

b) An employee who is a late starter, and is docked the relevant amount of time for that day, will not be entitled to the full week overweight payment. Instead, the employee will be entitled to a proportionate amount of the weekly overweight payment.

c) An employee who leaves early and is docked the relevant amount of time for leaving early, received no overweight payment for the week.

d) An employee absent to attend Jury Duty, and whose absence is authorised by the Company, will be entitled to receive the full overweight payment for the week.

e) An employee absent due to workers’ compensation, authorised annual leave or authorised compassionate leave (i.e. to attend a funeral) will be entitled to a prorate overweight payment for the day of authorised absence. In the case of an employee being absent for authorised compassionate leave (i.e. to attend a funeral), the following conditions and limitations apply:

i. The employee must prove to the satisfaction of the Company the person’s name, time

and place of the funeral;

ii. Upon abuse or failure to provide adequate information, the Company reserves the right to refuse payment.

3.7.3 General labourers and General Knifehands

a) Working in the Boning Room receives a pro-rata weekly overweight payment. In other words, the payment is based on the number of days the General labourers and general knifehands are working in the Boning Room.

b) Working in the Boning Room must, on any day of absence, have that day authorised by the Company, and be entitled to payment for the absence, in order to be entitled to any overweight payment for the week, the payment is based on the number of days worked in the Boning Room.

For example, an employee who is absent from work due to illness, and whose absence is

approved by the Company as paid personal leave, is entitled to receive the overweight payment for the week.

c) Working in the Boning Room for four consecutive days, and in circumstances where the fifth consecutive day is a public holiday, will be entitled to the full overweight payment for that week.”

[7] Since April 2015, the dispute has been before Deputy President Asbury for numerous conferences. The parties themselves have held many meetings in an attempt to resolve their impasse over the meaning of the disputed clause, or reach some other agreed arrangement.

[8] From a perusal of the file, it is evident that considerable effort was were undertaken by the Deputy President to resolve the dispute, including ultimately a comprehensive recommendation, issued by Her Honour on 9 June 2016. Notwithstanding this lengthy history, the parties are no closer to resolving their disagreement and given Her Honour’s recommendation, the matter has been referred to me for arbitration in accordance with the Grievance Procedure in cl 2 of the 2011 Agreement. I do not apprehend there to be any jurisdictional impediment to the Commission exercising all of its powers, including by arbitration, in accordance with the terms of the Grievance Procedure under the 2011 Agreement. I intend to proceed on that basis.

[9] The matter was listed for hearing on 24 May and 5 June 2017, with both parties providing written submissions. Mr Jason Smith, Human Resources Business Partner provided a written statement which was objected to (in its entirety) by Mr E Dalgleish, Industrial Officer for the Union. Nevertheless, Mr Smith was subject to extensive cross examination on the second day of the hearing.

[10] Four days after the Commission had reserved its decision in the matter, a Full Bench of the Commission published a decision on 9 June 2017 in Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union’ known as the Australian Manufacturing Workers Union v Berri Pty Ltd (AMWU) [2017] FWCFB 3005 (‘Berri’), which modified the principles of enterprise agreement interpretation; hitherto the principles frequently cited and quoted were those set out in the decision Australian Meat Industry Employees Union v Golden Cockerel Pty Ltd [2014] FWCFB 7447 (‘Golden Cockerel’). A further Full Bench decision on 10 July 2017, relied on these modified principles to uphold an appeal in an interpretive decision at first instance which had been determined before the publication of Berri; see: EnergyAustralia Yallourn Pty Ltd t/a EnergyAustralia v Construction, Forestry, Mining and Energy Union [2017] FWCFB 3574. This prompted me to invite the parties to put further submissions on the relevance and/or application to this matter of the principles set out in Berri. Directions were issued accordingly and the parties filed further submissions on 26 July 2017.

THE EVIDENCE

Mr Jason Smith

[11] Mr Smith has been employed by Woolworths since May 2014 and is currently Human Resources Business Partner. Mr Smith acknowledged that he had not participated in the bargaining meetings for the 2011 Agreement. His evidence was based on the business records of the respondent, including the minutes of the bargaining meetings at the time. He believed these records were an accurate account of the matters discussed at the meetings and the communications with employees.

[12] Mr Smith described how the respondent had applied the disputed clause during the term of the 2011 Agreement:

• if an employee was absent on paid personal leave or jury duty for a full week or part of the week, they received the normal overweight payment which they would otherwise receive for the full week;



• if an employee was on an authorised absence for a full week, other than personal leave or jury duty (e.g. workers’ compensation, annual leave or compassionate leave), they are not paid any overweight payment for that week. If the employee is on such an authorised absence for a part of a day or a part of a week they are not paid the overweight allowance for that period, but are paid pro rata for work performed on the remainder of the day or week.

[13] In respect to the negotiations for the 2011 Agreement, Mr Smith said there were 19 bargaining meetings, in which employees were represented by the Union. He described how each item and its outcome in each meeting was recorded in the minutes. Mr Smith extracted from the minutes the relevant reference to the discussion, progress and outcomes concerning the overweight allowance. The first bargaining meeting was on 10 August 2010. The minutes record:

Re Employee log of claims:

9 Revision of current overweight difference payments - To be discussed This is open ended as there are difference [sic] opinions on different shifts; the general talk is of a fairer system. This will be clarified to the next meeting

Re Company log of claims

6 Overweight payment Simplify the calculation and the application of the clause and assist in understanding The Employees have indicated that they will work do some work on what they are looking for. The company’s intent is to maintain flexibility and simplify the administration which is difficult to administer. A broader range of weights opens up a broader market for range of supply, to ensure that beef can always be maintained.

[14] At the second bargaining meeting on 24 August 2010, it is recorded as follows:

18	Overweight payments 3.7 Review application and simplify process	10/08/10: The Employees have indicated that they will do some work on what they are looking for. The company's intent is to maintain flexibility and simplify the administration which is difficult to administer. A broader range of weights opens up a broader market for range of supply, to ensure that beef can always be obtained. 24/08/10: As above
19	Overweight payments 3.7 Revision of current overweight payments - TBA	10/08/10: This is open ended as there are difference opinions on different shifts; the general talk is of a fairer system. This will be clarified to the next meeting. 24/08/10: Holidays of 1-2 days in the middle of the week, receive the portion for the days that are worked through the week eg 4/5 or 3/5. WOW to prepare a proposal.

[15] The next bargaining meeting, on 7 September 2010 records:

18	Overweight payments 3.7 Review application and simplify process	10/08/10: The Employees have indicated that they will do some work on what they are looking for. The company's intent is to maintain flexibility and simplify the administration which is difficult to administer. A broader range of weights opens up a broader market for range of supply, to ensure that beef can always be obtained. 24/08/10: As above 07/09/10: PH handed a draft proposal (handout 4) to employees. The intent remains the same; however, the employee’s proposal (as below) has been accounted for. Employees to respond by Friday.
19	Overweight payments 3.7 Revision of current overweight payments - TBA	10/08/10: This is open ended as there are difference opinions on different shifts; the general talk is of a fairer system. This will be clarified to the next meeting. 24/08/10: Holidays of 1-2 days in the middle of the week, receive the portion for the days that are worked through the week eg 4/5 or 3/5. WOW to prepare a proposal. 07/09/10 As no 18. Employees to respond by Friday

[16] An employee ‘Handout 4’ reads as follows:

HANDOUT 4 07/09/2010

3.7 OVERWEIGHT PAYMENTS

3.7.1 Butchers, Follow-on Knifehands and Follow-on Labourers must work the full week (38 Hours) to obtain any overweight payment for that week.

3.7.2 ABSENCE FROM WORK

(i) Employees must have any absence fully paid in order to receive an overweight payment for the week i.e. accrued personal leave

(ii) An employee who is a late starter and is docked relevant amount of time for that day will not receive the overweight for the day, but will receive a pro-rata payment for the week.

(iii) An employee who leaves early and is docked receive no overweight payment for the week.

(iv) An employee absent due to worker’s compensation, annual leave or to attend a funeral receives a pro-rata overweight payment. In the case of a funeral the following conditions and limitations apply:

a. The employee must prove to the satisfaction of the Company the person’s name, time and place of the funeral.

b. Upon abuse or failure to provide adequate information, the Company reserves the right to refuse payment

(v) An employee absent for Jury Duty will receive the full overweight payment.

3.7.3 GENERAL LABOURERS AND GENERAL KNIFEHANDS

(i) Working in the Boning Room receive a pro-rata overweight payment.

(ii) Working in the Boning Room must have any absence fully paid to receive any overweight payment for the week i.e.

accrued personal leave.

(iii) Working in the Boning Room four days, with the fifth day public holiday will receive the full overweight payment.

3.7.4 CASUAL EMPLOYEES

(i) Must work a full 38 hours to receive the overweight payment with the exception of a new starter where a pro-rata payment will be made.

(ii) Working four days in the Boning Room (5th day public holiday) will receive the full overweight payment BUT if they work less days, they will receive a pro-rata overweight payment.

3.7.5 PART TIME EMPLOYEES

(i) Receive a pro-rata overweight payment.

[17] The fourth bargaining meeting (14 September 2010) records:

18

Overweight payments 3.7 Review application and simplify process

10/08/10: The Employees have indicated that they will do some work on what they are looking for. The company's intent is to maintain flexibility and simplify the administration which is difficult to administer. A broader range of weights opens up a broader market for range of supply, to ensure that beef can always be obtained. 24/08/10: As above 07/09/10: PH handed a draft proposal (handout 4) to employees. The intent remains the same; however, the employee’s proposal (as below) has been accounted for. Employees to respond by Friday. 14/9/10: Employees happy in principle. CN would like to redraft. Employees wanted to review another clause – leave early forfeit weeks overweight payment. CN needs to discuss with employees before responding. This is not in the original log of claims and is hence considered an additional request.

[18] Mr Smith said the minutes of the fifth meeting on 29 September 2010, record the overweight allowance clause was discussed and finalised. The minutes record as follows:

18

Overweight payments 3.7 Review application and simplify process

10/08/10: The Employees have indicated that they will do some work on what they are looking for. The company's intent is to maintain flexibility and simplify the administration which is difficult to administer. A broader range of weights opens up a broader market for range of supply, to ensure that beef can always be obtained. 24/08/10: As above 07/09/10: PH handed a draft proposal (handout 4) to employees. The intent remains the same; however, the employee’s proposal (as below) has been accounted for. Employees to respond by Friday. 14/9/10: Employees happy in principle. CN would like to redraft. Employees wanted to review another clause – leave early forfeit weeks overweight payment. CN needs to discuss with employees before responding. This is not in the original log of claims and is hence considered an additional request. 29/09/10 Accepted

[19] The issue arose again at the tenth bargaining meeting on 7 December 2010. The respondent proposed an offer which included:

‘Overweight – Annual leave mid week, without loss of payment.’

This proposal is recorded as ‘accepted by the majority of employees’ at the next meeting on 5 January 2011.

[20] The respondent presented a new offer which included the following reference at the thirteenth bargaining meeting on 9 February 2011:

'Overweight Payment - Boning room able to take annual leave mid week and return mid week without any affect to overweight payment.’

This new offer in respect to overweight payments was accepted at the fourteenth meeting on 21 February 2011. Reference in the minutes records:

‘Overweight Payment – Agreed as per Company offer.’

Mr Smith said this meant if an employee commenced annual leave mid week and returned mid week their full overweight allowance was unaffected.

[21] The minutes of the final bargaining meeting (19 April 2011) records employee acceptance of the respondent’s offer concerning overweight payments.

Overweight Payment

• Agreed as per Company offer

[22] Mr Smith’s evidence was that he could draw the following conclusions from this history:

(a) There were discussions about the disentitlement to overweight payments associated with an employee commencing or concluding annual leave mid-week, which appeared in the 2007 Agreement version of the clause.

(b) There were also discussions about the disentitlement to overweight payments associated with an employee taking a full day/part day of annual leave during a week, which appeared in the 2007 Agreement version of the clause.

(c) In response to these discussions Woolworths put forward a proposal that employees who took annual leave of one or two days in the middle of the week would receive a portion of the overweight payment for days that are worked through the week i.e. a 3/5 or 4/5 payment. This proposal was accepted by employees.

(d) The proposal was later articulated to the effect that employees could take annual leave mid-week and return mid-week without any effect to their entitlement to overweight payments for those weeks. This proposal was accepted by employees. I can identify no document which suggests this reflected a different proposal to the one set out in (c) above.

(e) I can identify no record of any discussion relating to changes to the existing entitlements (i.e. as they were under the 2007 Agreement) with respect to full week absences.

SUBMISSIONS

For the Union

[23] Mr Dalgleish made four primary submissions. Firstly, the words used in the disputed clause should be understood by their ordinary meaning or the natural meaning of the words; see: Re City of Wanneroo v Holmes (1989) FCA 369 (‘City of Wanneroo’). The words in cl 3.7 are not obscure or ambiguous and are straightforward. They do not produce an unreasonable or absurd result. The mutual intent (of the parties) can be drawn from the ordinary and natural meaning and the Union’s interpretation produces a functional result. Further, there is no other meaning of words in the 2011 Agreement to displace the plain language of the clause. Interpretation of the disputed clause does not mean rewriting the terms of the Agreement.

[24] It should not be accepted that the respondent made ‘linguistic mistakes’; see: Investors Compensation Scheme v West Bromwich Building Society [1998] 1 All ER 98, 115; Spigelman, James, ‘From Text to Context: Contemporary Contractual Interpretation’ (2007) 81 Australian Law Journal 322; McLauchlan, David ‘Plain Meaning and Commercial Construction: Has Australia Adopted the ICS Principles?’ (2009) 25 Journal of Contract Law 7, 11.

[25] There is nothing hidden in the vocabulary of the text that would limit the disputed clause’s reach and effect. The construction is supported by a textual analysis, viewed in its context within the purpose and objects of the Act, its legislative history and the 2011 Agreement.

[26] Secondly, the Union submitted that ‘authorised absence’ means a legally or formally sanctioned absence from work; see: WorkPac Pty Ltd v Bambach (2012) 220 IR 313.

[27] The Oxford Dictionary defined the following words:

• ‘Week’ means the five (working) days Monday to Friday and the time spent working in the period (a 38 hour week);



• ‘Weekly’ (for the week) means a period of time from week to week;



• ‘Day’ means the time in the day during which work is normally done; and



• ‘Pro rata’ means proportional.

[28] Mr Dalgleish opined that these definitions mean an employee:

• may take annual leave on a weekly basis, without loss of the overweight payment;



• who has an authorised absence to cover for non work on a particular day, may take annual leave on a daily basis, without loss of the overweight payment;



• who leaves work early and has an authorised absence, such as paid annual leave on a pro rata basis, without loss of overweight payment for the part of the day.

[29] It followed that if an employee has an authorised absence and accrued entitlements to annual leave, long service leave and personal leave, or has an entitlement to be paid workers compensation, annual leave, and compassionate leave, then the employee will be entitled to overweight payment for the whole week, or part thereof according to the duration of the absence.

[30] Mr Dalgleish put that the language of the disputed clause could not be more explicit. The question is ‘what is the meaning of what the parties have said?’ not ‘what did the parties mean to say?’; see: Harbour City Real Estate Pty Ltd v Cargill (no.3) (2009) 186 IR 260. Further, it is not permissible to import into an award, by implication, a provision that its language does not express.

[31] Thirdly, the Union rejected the alleged reliance by the respondent on the subjective intention of the parties as may be reflected in negotiations, background materials, drafts and prior discussions. Statements of lay witnesses of subjective intent are not relevant or admissible; see: Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165. Extrinsic material is irrelevant when the words have an ordinary, or well understood meaning; see: Kucks v CSR Limited (1996) 66 IR 182 (‘Kucks’).

[32] It was posited that the respondent may not have understood the Agreement that it was making, but the employees voted on the text of the Agreement, not earlier recorded positions.

[33] Under each of the following headings the Union submitted:

Text

[34] The approach to the construction of agreements and commercial contracts is the same as statutory construction; see: Byrnes v Kendle [2011] HCA 26.

Construction

[35] The construction task is not speculation and it is not repair; see: Taylor v The Owner – Strata Plan No 11564 [2014] HCA 9 at [65].

Text and extrinsic material

[36] The task must begin with the text itself. Historic consideration and extrinsic material cannot be relied upon to replicate the clear meaning of the text; see: Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (Northern Territory) (2009) 239 CLR 27.

Extrinsic Materials

[37] Evidence of surrounding circumstances is admissible if the words are ambiguous, uncertain or capable of more than one meaning; see: Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337 (‘Codelfa’). The extrinsic material relied upon by Brismeat is unhelpful and irrelevant.

Conduct

[38] The subsequent conduct of the parties is not available as an aid to interpretation; see: R v Commonwealth Court of Conciliation & Arbitration; Ex parte Kirsch (1938) 60 CLR 507, 538. The Agreement is the final record of the consensus of the parties.

Context

[39] Given the width of the expression and according the clause a beneficial intent, the provision should be construed to give the fullest relief which the fair meaning of its language will allow; see: Bull v Attorney General (NSW) (1913) 17 CLR 370 and IW v The City of Perth (1997) 191 CLR 1.

[40] Finally, Mr Dalgleish put that while the fault of the employer has given it a financial gain over a long period, this does not justify the extinguishment of the right of employees to enjoy the ‘fruits’ of the 2011 Agreement.

Submissions regarding Berri

[41] The Union reaffirmed its submission that subsequent conduct or post-agreement conduct is not available as an aid to interpretation. This principle has been affirmed by the High Court; see: Agricultural & Rural Finance Pty Ltd v Gardiner (2008) 238 CLR 570; Whitworth Street Estates Ltd v Miller [1970] AC 583 at 603 per Lord Reid, repeated by Gibbs J in Administration of Papua and New Guinea v Daera Guba (1973) 130 CLR 353 at 446; [1973] HCA 59; Franklins Pty Ltd v Metcash Trading Ltd [2009] NSWCA 407 at [10] and [327] per Allsop P at 1; Giles JA at 42; Campbell JA at 66. It submitted that the purpose of this ‘exclusionary rule’ is that to examine 'subsequent conduct' leads to a 'subsequent meaning' being given to the words of the contract, which is not an 'objective' approach to contractual interpretation.

[42] The Union further submitted that there are sound reasons for the Commission not to interpret terms of agreements, based on what the parties intended the words to mean; see: Codelfa at [77]. The Union also reaffirmed its position regarding the exclusion of extrinsic evidence of prior negotiations (see: para [37] above).

[43] For these reasons, (in a rather brave submission I might say), the Union put that the decision in Berri was incorrectly decided by the Full Bench. However, it submitted that even if the Commission does take into account subsequent conduct of the parties in the present dispute, the highest it can be put is that ‘the post-agreement conduct amounted to little more than the absence of a complaint about the non-payment of an overweight allowance’.

[44] The Union submitted that there was no evidence as to a course of conduct or common understanding based on the non-payment of the overweight allowance. Nor was there any evidence about what the employees covered by the Agreement were told about the overweight allowance.

For Brismeat

[45] Brismeat submitted that cl 3.7 of the Agreement does not have a plain meaning. It is ambiguous and uncertain; the area of ambiguity is whether an employee who is absent on a full week of annual leave, receives any overweight payment for that week. Should the Union’s interpretation of the disputed clause be correct (in that all authorised absences attract payment in full), then it would mean:

(a) Clause 3.7.1 would be virtually meaningless; and

(b) Almost the entirety of clauses 3.7.2 and 3.7.3 would be unnecessary, or at least easily summarised into one or two lines.

[46] It was said that the core of the ambiguity arises in sub clause 3.7.2(e):

'3.7.2(e) An employee absent due to Workers' Compensation, authorised annual leave or authorised compassionate leave (ie to attend a funeral) will be entitled to a pro-rata overweight payment for the day of authorised absence. In the case of an employee being absent for authorised compassionate leave (ie to attend a funeral) the following conditions and limitation apply …'

Brismeat submitted the phrase emphasised above is at least inaptly and ambiguously drafted. When one focuses on clause 3.7 in its entirety (particularly the intended interaction between clause 3.7.2 and the basic 'rule' set out in clause 3.7.1) it can only be concluded that the 'pro rata' payment is not for the day of the absence, but rather for the remaining days or part days in the week which are actually worked. Otherwise there would be no requirement for the use of the word 'pro rata' at all. It would simply provide for the overweight payment to be paid for the day of the absence. Once this is understood it becomes clear that the overweight payment is nevermade on part days or days where an employee is absent on authorised annual leave. It is therefore axiomatic that an employee is not entitled to any overweight payment for a week where he or she is absent on authorised annual leave for the entire week. When he or she is absent for part of a week, payment is pro rata based on the days or part days worked. Brismeat contended that this result is consistent with the course of the 2010/11 negotiations, which it said is objectively ascertainable from the business records (the meeting minutes) provided by Mr Smith.

[47] Brismeat acknowledged that both parties share accountability for the infelicitous drafting of the clause. Notwithstanding this, where the mutual intention of the parties is clear, one party (in this case the Union and its members) should not be permitted to exploit the ambiguity to achieve an unintended ‘windfall’ result, wholly inconsistent with their mutual intention.

[48] Furthermore, as the clause is ambiguous, evidence of ‘surrounding circumstances’ (in the form of extrinsic material) is admissible to aid in the interpretation of the clause, pursuant to Codelfa. The Commission must, as the appointed arbitrator under the DSP, have regard to the text and meaning of the Agreement, pursuant to s 739(5) of the Act. It was put that the mutual intention of the parties was not that the overweight payment would be payable on authorised leave of absences, but rather the opposite – the only intended qualification to the 'general rule' in clause 3.7.1 is in relation to annual leave where an employee who takes annual leave for part of a week, but works the rest of the days or part days, would be entitled to pro rata payment based on the time or days worked.

[49] In regard to other leave provisions within the Agreement, it was submitted there are a number of relevant provisions. These include the following:

[50] Clause 5.1 deals with annual leave and relevantly provides as follows:

'5.1.1 All employees, other than casuals, shall be entitled to annual leave in accordance with the FW Act.'

For the purposes of taking leave, s 88(1) of the Act provides that 'Paid annual leave may be taken for a period agreed between an employee and his or her employer.' Pursuant to s 88 (and clause 5.1), annual leave may be taken in part days or single days.

[51] Clause 5.2.1 deals with compassionate leave and provides as follows:

'Full time and part time employees are entitled to compassionate leave in accordance with the NES.

…

compassionate leave may be taken as a single unbroken period of 2 days, or 2 separate periods of 1 day each, or any separate periods of up to 2 days to which the employee and the Company agree.'

[52] Clause 5.5 deals with personal leave and relevantly provides as follows:

'5.5.1 Full time and part time employees are entitled to personal leave in accordance with the NES. Full time and part time employees are also entitled to personal leave under this clause to the extent that it provides a greater benefit than the NES. The leave benefits in this clause are inclusive of, and not in addition to, any entitlement to personal leave under the NES arising in respect of the same circumstances.'

Clause 5.5.2 provides that a full time employee's entitlement is 76 hours per 12 months of continuous service, which equates to 10 days (as per the NES entitlement).

[53] Clause 5.7.4 deals with jury service and provides as follows:

'5.7.4.1 Where jury service (or time spent for a shift worker asleep in preparation for the next work shift as a result of performing jury service) results in a loss of time at the workplace, the employee shall provide to the Company the full jury service allowance paid to the employee but not inclusive of any additional amount received for expenses (eg travel expenses).

5.7.4.2 In return the Company shall pay up to a full day's wages (depending on the number of hours involved) for each day spent on jury service, including any allowances (e.g. shift allowances).

…

5.7.4.6 If jury service is not more than 2 hours duration (exclusive of travel time), an employee would be expected to return to work to complete.’

[54] Like the Union, Brismeat also outlined a detailed examination of the principles of agreement interpretation which I do not repeat here.

Ordinary meaning of clause 3.7 and areas of ambiguity

[55] Brismeat submitted that the ordinary meaning of the words in cl 3.7.1, is that an employee must 'work' the 'full week (i.e. 38 hours)' to obtain 'any' overweight payments for that week (the ‘general rule’). Giving the words in clause 3.7.1 their ordinary meaning, the general rule requires an employee to be present in the workplace performing duties (i.e. 'working') on the days that they are rostered to work (i.e. the 'full week') in order to be entitled to receive 'any' (i.e. possibly part/possibly full) overweight payments for that week. However, clause 3.7.1 is then qualified by clause 3.7.2 which provides a number of exceptions to the general rule.

[56] Clause 3.7.2 deals with absences from work, and sets out five examples (3.7.2(a) – (e)) in which absences from work will affect the receipt of overweight payments for that week. In summary, these relate to:

(a) authorised absences generally, and absences on paid personal leave specifically (3.7.2(a));

(b) late starters (3.7.2(b));

(c) early leavers (3.7.2(c));

(d) jury duty (3.7.2(d)); and

(e) workers' compensation, authorised annual leave and authorised compassionate leave (3.7.2(e)).

[57] Brismeat submitted that it is not clear, from the wording of clause 3.7.2 whether:

(a) An employee is only entitled to an overweight payment if they are absent for only part of the week and at work for the remainder of the week;

(b) Alternatively, an employee is also entitled to an overweight payment if they are absent for a full week on authorised absence;

(c) An employee is entitled to the full overweight payment for a week in which they take an authorised absence (i.e. a payment which includes the absent days); and

(d) Alternatively, an employee is entitled to a proportionate payment of the full overweight payment for a week in which they take an authorised absence (i.e. a payment for the days worked that week, excluding the absent days).

When clause 3.7 is read as a whole, it does not have a plain meaning and is ambiguous.

[58] Further, in relation to sub clauses 3.7.2(b)-(e), employees are entitled to the following amounts of overweight payments during particular types of leave:

(a) Late starter – not entitled to the full week overweight payment. Instead entitled to a proportionate amount of the weekly overweight payment (i.e. referable to the days the employee works, or another authorised absence which entitles an employee to payment e.g. jury duty/paid personal leave).

(b) Early leaver – receives no overweight payment for the week.

(c) Jury duty – receives the full overweight payment for the week (i.e. including any days on which the employee is absent).

(d) Workers' compensation/annual leave/compassionate leave – pro-rata overweight payment for the day of authorised absence.

[59] Obviously, there is a distinction in the clause between the ‘full’ payment and payment ‘for the week’ and that it should be treated as two different concepts. In particular, payment ‘for the week’ should not be equated to the ‘full overweight payment’. It was put that if the drafters intended it to be the same, they would have used the same words.

[60] Developing this point, Brismeat submitted that clause 3.7.2(e) does not prescribe, (as does clause 3.7.2(d) for jury duty), that employees absent on those types of leave are entitled to the full overweight payment for the week i.e. including the absent days. The failure to use that wording, and the express use of the wording 'pro rata', demonstrates that it was not the intention of the parties to provide employees with the full overweight payment for a week in which they were absent for a period of time on workers' compensation/annual leave/compassionate leave. The use of the term 'pro rata' in the clause contemplates a full day, as well as a part day absence on one of those types of leave, and entitles an employee to an overweight payment referable to that part of the day/those days of the week during which an employee is at work (or absent on a different type of authorised absence which entitles them to payment e.g. jury duty/paid personal leave).

[61] In addition, clauses 3.7.3, 3.7.4, 3.7.5 and 3.6.5 all refer to an entitlement of various employees (including casual employees, part time employees and employees transferred to work in the boning room) to overweight payments referable to time/days worked in the boning room. This context (i.e. reading clause 3.7 as a whole, and the placing and arrangement of the particular sub-clauses of clause 3.7 in the 2011 Agreement) supports an interpretation that:

(a) Authorised absences do not disentitle an employee to an overweight payment in the week in which they occur.

(b) However, overweight payments are only paid in respect of time worked during a particular week, and not for a day/time which is an authorised absence, unless it is expressly stated otherwise (i.e. an authorised absence for jury duty, paid personal leave, or a public holiday).

[62] Accordingly, Brismeat put that it is clear that the exceptions in clause 3.7.2 relate to part week and part day absences and there is no intention in the clause, except as expressly stated (i.e. in relation to personal leave and jury duty) to make overweight payments to employees where they are absent from work for a full week, even if the absence is authorised.

Reliance on extrinsic material

[63] Brismeat submitted that cl 3.7, when viewed as a whole, does not have a plain meaning. It is ambiguous and therefore evidence of ‘surrounding circumstances’ (in the form of extrinsic material) is admissible to aid interpretation of the 2011 Agreement.

[64] Reference was made to the corresponding clause in the 2007 Agreement. It contrasted these terms and submitted that while the wording was different, the entitlements conveyed by the clause remained broadly similar with the following exceptions:

(a) Clauses 3.7.9, 3.11 and 3.7.17 of the 2007 Agreement were removed and replaced by clause 3.7.2(e) in the 2011 Agreement; and

(b) As a result, under the 2011 Agreement (unlike the 2007 Agreement) employees were entitled to receive a proportionate payment of the overweight payment referable to the days they worked during the week, if they had been absent on annual leave, workers' compensation or compassionate leave, for part of that week.

[65] During the term of the 2007 Agreement, Brismeat’s practice had been to not pay employees overweight payments for full week absences, except where those related to paid personal leave and jury duty. This is the same approach as was taken under the 2011 Agreement.

[66] In relation to the minutes of the negotiating meetings for the 2011 Agreement, Brismeat submitted that they support the interpretation that unless it is expressly stated (i.e. in relation to personal leave and jury duty), there is no intention for overweight payments to be paid to employees, where they are absent from work for a full week, even if the absence is authorised.

Submissions regarding Berri

[67] In relation to the principles of agreement interpretation outlined in Berri, Brismeat submitted that its principal submission remains that the ambiguity in clause 3.7 can be resolved by a textual and contextual analysis of the clause, in particular by looking to the ordinary meaning of the term 'pro rata' in clause 3.7.2(e).

[68] In respect to the extrinsic material, the respondent accepted that following the reasoning in Berri, this material should not be treated as evidence of a mutual understanding of the clause, shared by employees who voted for the 2011 Agreement. However, it qualified this by submitting that the material was not tendered or explained on that basis, but rather on the basis that it demonstrates that, at no time, had the parties discussed a proposal to provide the allowance in all circumstances where an employee accesses paid leave. Brismeat submitted that the reasoning in Berri does not affect its submissions in relation to the relevance the 2007 Agreement.

[69] In relation to the new principle 15 in Berri, a comment was made in oral submissions on behalf of Brismeat regarding the post-agreement conduct of the parties to the effect that there had been a longstanding pattern of compliance with clause 3.7 in accordance with the Company’s interpretation. However, Brismeat also acknowledged the correctness of the Union’s submission that this conduct does not of itself say anything about how clause 3.7 should be interpreted.

[70] Brismeat noted that the Full Bench in Berri observed that 'as a general principle, all words in an enterprise agreement must prima facie be given some meaning and effect' and that the inclusion of particular words 'should not be regarded as superfluous or insignificant'. Consistent with this observation, Brismeat submitted that it must be accepted that the term 'pro rata' in clause 3.7.2(e) was used for a specific reason. Effect must be given to the ordinary meaning of that term (i.e. 'proportionate'). Accordingly, there cannot be a full payment for a week in which the relevant authorised absence occurs. Otherwise, there would be no requirement for the use of the term 'pro rata' and it would have no work to do.

[71] In a reply submission, Mr Dalgleish stressed that there is no ambiguity or obscurity on the face of the words used in cl 3.7. The plain meaning of the words is readily ascertainable and the Commission should not be tempted to divert attention from this plain meaning by resort to extrinsic material. Such material, including a psychoanalysis of the views of Mr Smith, who was not even involved in the 2011 Agreement, is neither relevant or useful.

[72] In addition, it was said that the rule is that facts must be reasonably known to the parties, that are notorious, rather than knowledge which is presumed. Mr Dalgleish put that the final document approved by the employees provides for the payment of overweight allowances on all forms of leave. The employer cannot now seek to correct an error or modify an afterthought.

[73] In accepting the rules of evidence do not apply in this matter; see: Australasian Meat Industry Employees’ Union v Dardanup Butchering Co Pty Ltd [2011] FWAFB 3847 and Hail Creek Coal Pty Ltd v Construction, Forestry, Mining and Energy Union (2004) 143 IR 354, Mr Dalgleish objected to Mr Smith’s evidence on the grounds of relevance, hearsay, conclusion, opinion and argument. It was particularly noted that Mr Smith did not participate in, and was not present during the bargaining meetings for the 2011 Agreement. In addition, business records (the minutes), are not evidence of mutual intention of the parties. Even if there was a mutual intention, it is not the actual intention found in the 2011 Agreement. If the employer had wished to alter the Agreement, it should have sought to vary the Agreement. It did not do so.

CONSIDERATION

[74] The fundamental contention of the Union is that the words used in cl 3.7 of the 2011 Agreement are unambiguous, perfectly clear and readily ascertainable according to their plain and ordinary meaning. The corollary, so the argument goes, is that the Union’s view, as to the interpretation of the Agreement, is the only one the Commission can accept. The result is that existing and former employees are entitled to back pay over some five to six years.

[75] Of course, an ordinary bystander, might ask the obvious question – how is it that if the words are so manifestly obvious in their meaning, that the parties have been haggling over their meaning for over two years and that the Company’s interpretation has seemingly been uncontroversially accepted for many years (at least since 2007)?

[76] In truth, nowhere in the 2011 Agreement, or indeed in any of its predecessor iterations does one find simple words, such as ‘overweight allowances are to be paid on all periods of approved absences’. If these words were used, that would be the end of the matter. Yet this is how the Union asks the Commission to interpret the disputed clause. To do so would be to rewrite the clause to give effect to that outcome – an impermissible approach to agreement interpretation; see: Berri Principle 2. Moreover, I have difficulty reconciling this request with its primary position that the words are completely unambiguous and perfectly clear on their face. I must, respectfully disagree.

[77] In my view, the disputed clause is ambiguous, or at the very least gives rise to confusion by omission. Obviously, the clause is poorly drafted. This is not uncommon for industrial instruments, drafted without a keen eye to future interpretive ‘fine tooth comb’ analysis. I imply no criticism at all in this respect.

[78] That said however, the clause cannot possibly be interpreted in the manner contended for by the Union, particularly given that different absences have been negotiated to attract different considerations, as to whether the overweight payments, are to be applied at all. The disputed clause most certainly does not adopt a universal, or all encompassing interpretation for which the Union contends. More correctly, it provides in simple terms, for a general rule with a number of agreed exceptions. I will now elaborate.

[79] As mentioned earlier, the decision of the Full Bench in Berri modified the principles of agreement interpretation previously set out in Golden Cockerel. In Berri, the Full Bench reaffirmed the permissibility of considering extrinsic material where the words in an agreement are ambiguous, unclear, or capable of more than one meaning. At paras 61-65, the Full Bench said:

‘[61] Having identified ambiguity it is permissible to consider evidence of the surrounding circumstances as an aid to the task of interpreting the agreement. As Mason J observed in Codelfa Construction Pty Ltd v State Rail Authority (NSW) (Codelfa):

‘... 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 where it has a plain meaning.’

[62] The admissibility of evidence of the surrounding circumstances is limited to evidence tending to establish objective background facts which were known to both parties and the subject matter of the contract. Evidence of such objective facts is to be distinguished from evidence of the subjective intentions of the parties, such as statements and actions of the parties which are reflective of their actual intentions and expectations. As Mason J observed in Codelfa:

‘... when the issue is which of two or more possible meanings is to be given to a contractual provision we look, not to the actual intentions, aspirations or expectations of the parties before or at the time of contract, except insofar as they are expressed in the contract, but to the objective framework of facts within which the contract came into existence, and to the parties’ presumed intention in this setting.’

[63] As noted in Golden Cockerel, evidence of relevance to the objective framework of facts will include:

(i) 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;

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

(iii) evidence of matters in common contemplation and constituting a common assumption.

[64] As to category (i), evidence of prior negotiations will be admissible – but only for a defined purpose. As Mason J observed in Codelfa:

‘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.

It is here that a difficulty arises with respect to the evidence of prior negotiations. Obviously the prior negotiations will tend to establish objective background facts which were known to both parties and the subject matter of the contract. To the extent to which they have this tendency they are admissible. But in so far as they consist of statements and actions of the parties which are reflective of their actual intentions and expectations they are not receivable. The point is that such statements and actions reveal the terms of the contract which the parties intended or hoped to make. They are superseded by, and merged in, the contract itself. The object of the parole evidence rule is to exclude them, the prior oral agreement of the parties being inadmissible in aid of construction, though admissible in an action for rectification.’

[65] Admissible extrinsic material may be used to aid the interpretation of a provision in an enterprise agreement with a disputed meaning, but it cannot be used to disregard or rewrite the provision in order to give effect to an externally derived conception of what the parties’ intention or purpose was. So much is clear from the oft-quoted statement of Madgwick J in Kucks v CSR Limited:

‘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.’’

[80] The modified principles of agreement interpretation (the ‘Berri principles’) are set out at para 114 as follows:

1. The construction of an enterprise agreement, like that of a statute or contract, begins with a consideration of the ordinary meaning of the relevant words. The resolution of a disputed construction of an agreement will turn on the language of the agreement having regard to its context and purpose. Context might appear from:

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

(ii) the disputed provision’s place and arrangement in the agreement;

(iii) the legislative context under which the agreement was made and in which

it operates.

2. 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.

3. The common intention of the parties is sought to be 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, without regard to the subjective intentions or expectations of the parties.

4. The fact that the instrument being construed is an enterprise agreement made pursuant to Part 2-4 of the FW Act is itself an important contextual consideration. It may be inferred that such agreements are intended to establish binding obligations.

5. The FW Act does not speak in terms of the ‘parties’ to enterprise agreements made pursuant to Part 2-4 agreements, rather it refers to the persons and organisations who are ‘covered by’ such agreements. Relevantly s.172(2)(a) provides that an employer may make an enterprise agreement ‘with the employees who are employed at the time the agreement is made and who will be covered by the agreement’. Section 182(1) provides that an agreement is ‘made’ if the employees to be covered by the agreement ‘have been asked to approve the agreement and a majority of those employees who cast a valid vote approve the agreement’. This is so because an enterprise agreement is ‘made’ when a majority of the employees asked to approve the agreement cast a valid vote to approve the agreement.

6. Enterprise agreements are not instruments to which the Acts Interpretation Act 1901 (Cth) applies, however the modes of textual analysis developed in the general law may assist in the interpretation of enterprise agreements. An overly technical approach to interpretation should be avoided and consequently some general principles of statutory construction may have less force in the context of construing an enterprise agreement.

7. In construing an enterprise agreement it is first necessary to determine whether an agreement has a plain meaning or it is ambiguous or susceptible of more than one meaning.

8. Regard may be had to evidence of surrounding circumstances to assist in determining whether an ambiguity exists.

9. If the agreement has a plain meaning, evidence of the surrounding circumstances will not be admitted to contradict the plain language of the agreement.

10. If the language of the agreement is ambiguous or susceptible of more than one meaning then evidence of the surrounding circumstance will be admissible to aid the interpretation of the agreement.

11. The admissibility of evidence of the surrounding circumstances is limited to evidence tending to establish objective background facts which were known to both parties which inform and the subject matter of the agreement. Evidence of such objective facts is to be distinguished from evidence of the subjective intentions of the parties, such as statements and actions of the parties which are reflective of their actual intentions and expectations.

12. Evidence of objective background facts will include:

(i) 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;

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

(iii) evidence of matters in common contemplation and constituting a common assumption.

13. The diversity of interests involved in the negotiation and making of enterprise agreements (see point 4 above) warrants the adoption of a cautious approach to the admission and reliance upon the evidence of prior negotiations and the positions advanced during the negotiation process. Evidence as to what the employees covered by the agreement were told (either during the course of the negotiations or pursuant to s.180(5) of the FW Act) may be of more assistance than evidence of the bargaining positions taken by the employer or a bargaining representative during the negotiation of the agreement.

14. Admissible extrinsic material may be used to aid the interpretation of a provision in an enterprise agreement with a disputed meaning, but it cannot be used to disregard or rewrite the provision in order to give effect to an externally derived conception of what the parties’ intention or purpose was.

15. In the industrial context it has been accepted that, in some circumstances, subsequent conduct may be relevant to the interpretation of an industrial instrument. But such post-agreement conduct must be such as to show that there has been a meeting of minds, a consensus. Post-agreement conduct which amounts to little more than the absence of a complaint or common inadvertence is insufficient to establish a common understanding. 

[81] At this juncture, I should say that Mr Dalgleish’s submission that the decision of the Full Bench in Berri, was wrongly decided, is a brazen and valiant one; but an entirely unacceptable proposition that I am ill-disposed to accept. Notwithstanding the obvious – that the Commission is bound by Full Bench authority (particularly given it is of such recent vintage) – I am entirely in accord with the Full Bench’s practical development and modification of the principles of enterprise agreements to reflect the contemporary statutory regime under the Fair Work Act.

[82] Moreover, I can ascertain no basis for Mr Dalgleish’s submission, save for the fact that the Berri decision does not sit comfortably with the Union’s narrative in this case. This is precisely the reason why I adopted the cautious approach of inviting further submissions following the release of the Berri decision.

[83] With respect, it is unnecessary, in my view, to go beyond the Berri Principles by searching out other obscure cases which deal with the interpretation of commercial contracts or other written instruments. The Berri Principles are entirely consistent with the long line of accepted authority on the subject of the interpretation of industrial instruments; see: Kucks, Codelfa, City of Wanneroo, and appropriately reflect the contemporary statutory scheme dealing with the negotiations for, and approval process for enterprise agreements, under the Act. There is no reason - let alone a good one - to depart from the Berri Principles.

[84] In accordance with Principles 11-13 set out in Berri, I have given careful consideration to the negotiations for the 2011 Agreement and the minutes of the various bargaining meetings leading to that Agreement. In my view, these meetings - which could not seriously be challenged by the Union - establish objective facts, going not just to the positions of the employees and the parties, but what had actually been agreed as to the conditions surrounding the payment of overweight allowances.

[85] Mr Dalgleish attempted to reconstruct a scenario of heated controversy during the bargaining meetings as to what was said during these meetings in respect to the overweight allowances. Nothing seemingly jumps out from the minutes to corroborate this alleged controversy. I treat the minutes as business records only. Furthermore, I agree with Mr Williams that Mr Smith’s comments on the minutes can be put aside for present purposes. That said, the Union could have brought evidence from any one of the participants in the many meetings (including its own officials) to confirm its subjective reconstruction of events. It chose not to do so; perhaps for obvious reasons. In my view, it seems highly improbable that such a level of hostility or disagreement existed. Not content with this submission, Mr Dalgleish sought to impugn the minutes by presuming that:

(a) they might be incorrect because they were not comprehensive;
(b) they could have been deliberately or inadvertently been wrong;
(c) the authors of the minutes did not give evidence;
(d) none of the participants in the meeting gave evidence;
(e) the person/s who wrote the minutes were unknown;
(f) no witness had direct knowledge of what happened, or what was said, or who said it;
(g) there was no evidence the minutes were sent to the Union or signed off by the Union;
(h) the time between the meetings and when the minutes were created, was unknown; and
(i) there was no evidence the minutes were posted on the Company notice board complaints.

[86] In my view, these complaints are nonsense. They are an attempt to ridicule and impugn a historic process, without any evidentiary foundation, and which has not, until this case, ever been challenged. The minutes would have been circulated to the Union, and in accordance with usual procedure, adopted as a true and correct, (albeit abbreviated), record of the discussions. There was no evidence of any of these minutes being challenged until now. No evidence was brought by the Union to support its implausible propositions. It cannot seriously be suggested that these minutes are wrong, either deliberately or by inadvertence. Mr Dalgleish’s attemptto do so was little more than a reconstruct of history.

[87] In my opinion, these minutes are an objective account of the outcome of discussions as to the agreement of the negotiating parties and the employees concerning the conditions applying to the payment of the overweight allowances. In particular, I note that there was an exchange of proposals and an agreement as to what was put to employees in the vote for an approval of the agreement. There was an employee ‘handout’; see: para [16] above. I note that the proposal accepted by employees included:

(a) Pro rata payment where either a single day or two days of annual leave was taken during a week; and
(b) Employees would not lose their entitlement if they took annual leave mid week and returned from annual leave mid week.

[88] While I concede it is not necessarily determinative, I have also taken into account that the interpretation as contended for by Brismeat, has been applied (and presumably accepted), since at least the 2007 Agreement, after the 2011 Agreement and up to around when the dispute was lodged in 2015. I accept, as Brismeat properly conceded, that the post agreement conduct of the parties is not a matter which will determine the interpretive exercise; see: Agricultural & Rural Finance Pty Ltd v Gardiner [2008] CLR 570 and Franklins Pty Ltd v Metcash [2009] NSWCA 407 and Principle 15 of the Berri Principles.

[89] In my view, the only sensible approach to determining the ordinary meaning of the words in cl 3.7 is to begin from the starting point of what mischief the overweight allowance is intended to cure. Unless expressly stated otherwise, any allowance or disability payment is intended to compensate an employee for performing certain work, or performing work under particular or unusual conditions. It follows that if an employee is not at work and obviously not experiencing any disability, or unusual conditions, then it makes no logical or industrial sense why a payment for a disability not encountered, should be paid. Of course, that general approach (described in this case as the ‘general rule) can be modified by agreement between the parties to provide for allowances to be paid on specific forms of leave, such as the case here, for personal leave or jury duty. However, consistent with the above approach, the payment is made pro ratafor the time so taken on approved leave.

[90] The reference to pro rata in cl 3.7(2)(e) is the clearest indicator that pro rata payment of the allowance must apply to other incidents of leave, subject to any other express intention to the contrary. This is particularly so in circumstances where the extent of the payment is unclear or unstated. This approach is to give the words their ordinary meaning, in accordance with the context of the clause itself and the Agreement as a whole; the entirely orthodox approach to agreement interpretation. It is abundantly clear that the parties have agreed on circumstances where employees do not receive the overweight payment at all (early leaver) or it is paid on a pro rata basis (later starters, workers compensation or compassionate leave).

[91] Furthermore, that pro ratapayments are an essential feature of the arrangement in cl 3.7, is no better exemplified by the fact that payment of the allowance for approved compassionate leave can only be pro rata for the week, because the entitlement to such leave is two days leave only. In addition, there is much force to the submission that the reference to pro rata in cl 3.7(2)(e) is a reference to the payment for the absence and the pro rata payment for the balance of the days, or part days actually worked. Therein lies the confusion. It does not follow that the exclusion applying to compassionate leave (or any other leave for that matter) can be inferred to apply to the payment of the allowance where the employee is absent on authorised annual leave for the full week. Obviously, part days or weeks worked are pro rata according to the time actually worked.

[92] The notion of a pro rata entitlement to overweight payments, is to be further understood in the context of the corresponding provision in the 2007 Agreement (cl 3.7.3) which provides a pro rata payment for labourers and knife hands where these employees work in the boning room (see also cl 3.6.5).

[93] It seems to me that if the Union’s interpretation is correct, there would have been no need to provide for the exclusions to the general rule in cl 3.7. The Union’s approach would be to ignore the exclusions and give their placement in the clause, no work to do at all. That cannot possibly have been the intention of the parties when they were negotiating the Agreement to extend the exclusions from the general rule, in the ordinary to and fro banter of seeking enhancements to the clause by departures from the general rule in 3.7.1.

[94] In my view, the Union’s reliance on s 3.7.2(a) as meaning any authorised absence of less than a week entitles an employee to overweight payments for the full week, is misconceived and erroneous. It is obvious that s 3.7.2(a) is referring to the exception of personal leave, as the very next phrase gives the examples of personal leave being authorised for the entitlement to the full week’s overweight payment to apply. Sub section (a) is not an overarching provision applying to the followings sub sections (b) to (e). Each of these subsequent sub sections deal with a different circumstance for which the payment is pro rata, or not paid at all (except for jury duty at (d)).

[95] It seems to me that if the Union’s interpretation of sub section (a) was to apply to the subsequent different circumstances, it would have plainly said so. This would have rendered sub sections (b) to (e) otiose.

[96] In summary then, I would conclude that the words used in cl 3.7.1 namely; that employees ‘must work the full week to obtain any overweight payment for that week’ is the general rule. This general rule is subject to the exceptions set out in cl 3.7.2 and which provide, in different circumstances, for the payment for absences for an entire week, pro rata or not at all. The only two forms of leave for which employees are entitled to be paid for the full week where authorised absence is less than the full week are personal leave and jury duty - cl 3.7.2(a) and (d) respectively.

[97] It follows that where an employee is absent on other authorised leave – annual leave, long service leave, workers’ compensation and compassionate leave for a full week, no entitlement to overweight payments arise. These forms of leave are plainly not exceptions to the general rule. However, where such leave is taken for less than the full week, the employee is logically entitled to pro rata overweight payments for the days they are at work.

[98] In my view, the question posed by the parties for determination by the Commission, must be answered in the negative. The dispute is resolved and determined accordingly.

DEPUTY PRESIDENT

Hearing details

2017.

Brisbane.

June 5.

Appearances:

Mr E Dalgleish for the applicant

Mr D Williams for the respondent

Final written submissions:

2017.

July 26.

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