Australian Institute of Marine & Power Engineers v OSM Australia Pty Ltd

[2024] FWC 3360

[2024] FWC 3360

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009

s 739—Dispute resolution

Australian Institute Of Marine & Power Engineers
v

OSM Australia Pty Ltd

(C2024/5332)

COMMISSIONER LIM PERTH, 3 DECEMBER 2024

Application to deal with a dispute in accordance with a dispute procedure in an enterprise agreement whether obligation to backpay includes casual loading – interpreting an enterprise agreement – wording clear and unambiguous – obligation to backpay does not include casual loading.

1. Introduction            

1. This decision is about a dispute between the Australian Institute of Marine & Power Engineers and OSM Australia Pty Ltd over a quantum of backpay payable under the OSM Australia Pty Ltd & AIMPE Maritime Offshore Oil and Gas Industry Engineers Enterprise Agreement 2024. AIMPE applied to the Commission under s 739 and the Agreement’s dispute resolution procedure for the Commission to deal with the dispute.

1. The parties have agreed that the question for determination is:

Schedule One (Pay Schedule) Note 1 states, “Backpay – the payrate set out in Column Two above shall be treated as effective from 30 September 2023 and Employees will be back paid any shortfall in the first pay period after the commencement of this Agreement”.

The Agreement commenced on 24 April 2024. Does the obligation to backpay to 30 September 2023 under Schedule One, Note 1 include the casual loading in clause 14.3 of the Agreement?

1. I conducted a hearing of the matter on Friday 20 September 2024. Mr Michael Carroll (National Organiser) represented AIMPE. I granted permission to Mr S Rogers of Counsel to represent OSM. Neither side called witnesses. 

1. Having considered the text in the Agreement and the submissions of the parties, I find that the answer to the question is ‘no’.

1. My detailed reasons follow.

1. The Agreement and the dispute

1. The Fair Work Commission approved the Agreement on Wednesday 17 April 2024, and the Agreement came into operation on Wednesday 24 April 2024.

1. Schedule One of the Agreement is as follows:

1. From Note 1 in Schedule One, the payrates in Column Two are effective from 30 September 2023.

1. Clause 14.3 of the Agreement provides:

14.3     Casual Employment

(a)A Casual Employee engaged as such will be paid a casual loading of 25% over the life of the agreement in accordance with 14.3(b), in lieu of:

i.Annual leave and personal/carer/s leave;

ii.Private health insurance;

iii.Short-term loading.

(b)Casual Loading will be 21.5% upon approval of the Agreement and shall increase as follows:

i.1^st March 2024 casual loading increases to 23%

ii.1^st March 2024 casual loading increases to 24%

iii.1^st March 2026 casual loading increases to 25%.

1. Submissions

3.1      AIMPE

1. AIMPE’s submissions can be summarised as follows:

(a)   The words “any shortfall” in Note 1 of Schedule 1 should be read and understood in its common meaning. This common meaning is “any amount that was less than the

level that was expected”.[1] 

(b)   The use of “any shortfall” has given rise to the “reasonable expectation” that “any shortfall” would include payment of the casual loading.[2]

(c)   This expectation is reasonable when the words are read in the entirety of the explanatory paragraph that accompanies the salary column.[3]

3.2      OSM

1. OSM filed comprehensive written submissions that I do not intend to repeat here. In summary, OSM’s submission is that there is no ambiguity in Note 1 of Schedule 1. Properly constructed, Clause 14.3 has no relevance to OSM’s obligation to backpay in Note 1 of Schedule 1. OSM further submits that AIMPE is seeking to read into the Agreement words that do not exist, and this should be rejected.

1. Consideration

1. There is no contest, and I find that the parties have complied with the requirements of the dispute settlement procedure in the Agreement and the Commission has been authorised to arbitrate the dispute.

1. In interpreting an award or enterprise agreement, the task is to construe the document in a practical manner and within the industrial environment in which it was drafted.[4] The Full Court of the Federal Court in WorkPac Pty Ltd v Skene[5] affirmed this approach and other relevant precedents at [197]:

The starting point for interpretation of an enterprise agreement is the ordinary meaning of the words, read as a whole and in context:  City of Wanneroo v Holmes (1989) 30 IR 362 at 378 (French J). The interpretation “… turns on the language of the particular agreement, understood in the light of its industrial context and purpose …”: Amcor Limited v Construction, Forestry, Mining and Energy Union (2005) 222 CLR 241 at [2] (Gleeson CJ and McHugh J). The words are not to be interpreted in a vacuum divorced from industrial realities (Holmes at 378); rather, industrial agreements are made for various industries in the light of the customs and working conditions of each, and they are frequently couched in terms intelligible to the parties but without the careful attention to form and draftsmanship that one expects to find in an Act of Parliament (Holmes at 378–9, citing Geo A Bond & Co Ltd (in liq) v McKenzie [1929] AR(NSW) 498 at 503 (Street J)).  To similar effect, it has been said that the framers of such documents were likely of a “practical bent of mind” and may well have been more concerned with expressing an intention in a way likely to be understood in the relevant industry rather than with legal niceties and jargon, so that a purposive approach to interpretation is appropriate and a narrow or pedantic approach is misplaced:  see Kucks v CSR Limited (1996) 66 IR 182 at 184 (Madgwick J); Shop Distributive and Allied Employees’ Association v Woolworths SA Pty Ltd [2011] FCAFC 67 at [16] (Marshall, Tracey and Flick JJ); Amcor at [96] (Kirby J).

1. With these principles in mind, I make the following findings:

(a)   The words of Note 1 in Schedule One are clear and unambiguous. The first part of the sentence sets out that “the payrate set out in Column 2 shall be treated as effective from 30 September 2023”. Column 2 sets out the pay rates for the relevant classifications in the Agreement. There is no reference to other allowances or conditions in Column 2.

(b)    The second half of the sentence sets out that employees “will be paid any shortfall in the first pay period after the Commencement of this Agreement”. This clearly contemplates that the Agreement could come into operation after 30 September 2023.

(c)   The “shortfall” can only refer to the rates in Column 2. There is nothing in the words of Schedule One that suggests otherwise. Even if I were to accept an argument that the words of Schedule One are ambiguous, there is nothing in the rest of the Agreement that would support a construction that the “shortfall” encompasses anything beyond the rates in Column 2 of Schedule One.

(d)   AIMPE makes the submission that there is an expectation (presumably from its members) that the “shortfall” would include the payment of the casual loading in Clause 14.3. No evidence was led as to what created that expectation and more importantly, it was unclear as to how that had relevance to the task of interpreting the words in the Agreement.

(e)   There is nothing in the words in Clause 14.3 that supports a finding that the casual loading is to be included in the “shortfall” in Note 1 of Schedule One.

1. For these reasons, the answer to the question for determination outlined in [2] of this Decision is ‘no’.

COMMISSIONER

Appearances:

M Caroll for the Applicant.
S Rogers of Counsel for the Respondent.

Hearing details:

2024:
Perth, by video using Microsoft Teams:
20 September.

[1] AIMPE written submissions at [12].

[2] Ibid.

[3] Ibid at [13].

[4] Kucks v CSR Ltd (1996) 66 IR 182 at 184 (“Kucks”).

[5] [2018] FCAFC 131.

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