Australian Maritime Officers' Union v TT-Line Company Pty Ltd
[2022] FWC 244
•8 FEBRUARY 2022
| [2022] FWC 244 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.739 - Dispute resolution; s.217 - application to vary an enterprise agreement
Australian Maritime Officers’ Union
v
TT-Line Company Pty Ltd
(C2021/3216), (AG2021/6581)
| Deputy President Colman | MELBOURNE, 8 FEBRUARY 2022 |
Application to deal with a dispute under an enterprise agreement – application to vary an agreement under s 217 to remove ambiguity or uncertainty – alleged error in personal leave clause, conferring greater entitlement – common intention of employer and union – error not explained to employees – dispute determined – application under s 217 dismissed
This decision concerns two related applications that have been made under the Fair Work Act 2009 (FW Act). The first is an application by the Australian Maritime Officers’ Union (AMOU) for the Commission to determine a dispute between the union and TT-Line Company Pty Ltd (company) under the dispute resolution procedure in clause 8 of the TT-Line Company Pty Ltd/Australian Maritime Officers’ Union, Shipwrights/Pursers Modern Enterprise Agreement 2016 (Agreement). In accordance with industry practice, employees of the company are either rostered for work at sea, or rostered off work ‘on leave’, at which time they draw on a pool of leave that includes personal leave. Clause 17 of the Agreement provides employees with an additional ten days of personal leave. The dispute concerns when that leave may be taken. Clause 17.3 states that employees may take the personal leave ‘during a period they are on leave or when they are ill or injured at the time they are due to return to duty’ (emphasis added). The AMOU contends that the clause means what it says and that employees may take the personal leave in either of these two situations. The company contends that the word ‘or’ is a mistake and that, read in context and in light of the surrounding circumstances, it should be understood to mean ‘and’. It submits that the purpose of clause 17 was to cover a gap in the availability of personal leave, because employees who are unable to board a vessel for illness are neither ‘on leave’ nor eligible for shipboard leave.
The second matter to which this decision relates is an application by the company to vary the Agreement under s 217 of the FW Act to remove ambiguity or uncertainty. The company contends that the word ‘or’ in clause 17.3 creates ambiguity or uncertainty and that the Commission should vary the clause by changing ‘or’ to ‘and’, so as to reflect the intention that it provide for additional personal leave to cover the ‘gap’ referred to above. The AMOU opposes the application and contends that the Agreement should not be varied because clause 17.3 is not ambiguous or uncertain, and that in any event the Commission should not exercise its discretion to vary the Agreement in a way that would significantly dilute an entitlement.
The two applications were heard concurrently before me on 4 February 2022. For the reasons that follow, I have determined that the company’s jurisdictional objection to the AMOU’s s 739 application must be dismissed, and that the union’s construction of clause 17.3 is correct, namely that it means what it says and goes beyond the company’s intended purpose of covering the ‘gap’. As to the company’s application under s 217, I consider that the Agreement is not ambiguous or uncertain, and that in any event it would not be appropriate for the Commission to vary clause 17.3, because there is no basis to conclude that employees who voted to approve the Agreement could have or should have understood that clause 17.3 had the different, narrower meaning contended for by the company.
The evidence
Mr John McGrath is the company’s general manager of human resources. Mr McGrath gave evidence that in 2016 he was involved in the drafting of a new agreement to replace the TT-Line Company Pty Ltd / AMOU Shipwrights/Pursers’ Modern Enterprise Agreement 2010 (2010 Agreement). One of the provisions in the 2010 Agreement that was the subject of negotiations between the company and the AMOU was clause 17.1, which stated that permanent employees were ‘entitled to 10 days cumulative personal leave for each year of service with the employer’. Mr McGrath said that there had been some confusion about how clause 17.1 of the 2010 Agreement applied, because of the nature of the leave-taking arrangements in the seagoing industry. In this regard, Mr McGrath said that employees are either ‘on duty’ (on board a vessel) or ‘on leave’ (off duty, on land). When employees are on duty and fall ill, their personal leave is covered by Marine Orders made under the Navigation Act 2012. When employees are ‘on leave’, they draw on a pool of leave, which includes annual and personal leave. An employee who falls ill at this time simply continues to be paid. However, if employees are ill or injured at the time when they are due to resume work on board a vessel, and consequently do not board the vessel, they are no longer ‘on leave’, nor are they on duty. Mr McGrath described this as the personal leave ‘gap’.
Mr McGrath said that it was the intention of both the company and the AMOU that the new clause 17.3 of the Agreement would make clear that the personal leave provided for in clause 17.1 was available for the purpose of covering the personal leave gap. That is, employees would be able to take personal leave under clause 17 if they were ill or injured and ‘missed the boat’. Mr McGrath gave evidence that on 21 November 2016, Mr John Wydell, the industrial officer for the AMOU representing the union in negotiations for the new agreement, sent him a draft of the proposed agreement in advance of a bargaining meeting, and that on 25 November 2016 they met to discuss the draft document. Mr McGrath said that it was agreed at this meeting that clause 17 of the 2010 Agreement should be amended to reflect the intention of the company and the AMOU that the additional personal leave would be available to ‘cover the gap’, and that the wording should be in the same terms as the entitlement that would be afforded to employees under another enterprise agreement that was being negotiated at that time between the company and the Maritime Union of Australia (MUA). Mr McGrath said that after this meeting, he emailed to Mr Wydell the wording for a new clause 17.3 which was taken from the draft of the MUA agreement. The draft MUA agreement was amended prior to its approval so as to make clear that employees can only take the additional personal leave if they are ill or injured at the time they are rostered to return to duty (see TT-Line Company Pty Ltd & MUA Seagoing Employees, Retail & Hospitality Management and In Port Workers, Enterprise Agreement 2017 (MUA Agreement), clause 18.1(c)). No amendment was made to clause 17.3 of the document that became the Agreement.
Mr McGrath said that on 15 December 2016, Mr Wydell sent him a final version of the Agreement which included clause 17.3, but that neither he nor Mr Wydell noticed that the clause contained an error (reading ‘or’ rather than ‘and’). Mr McGrath said that after the Agreement was approved, he became aware of the mistake and contacted Mr Wydell, who agreed that the clause contained an error.
Mr Wydell subsequently left the AMOU. In late August 2017, Mr McGrath sent a letter to another AMOU official, Ms Jan Thompson, asking whether it was her understanding that the intention of the clause was that the word ‘or’ in clause 17.3 should read ‘and’. Ms Thompson was on leave and suggested that they discuss the matter later. There was some further correspondence but no record of a response from Ms Thompson to Mr McGrath’s question.
Over a year later, on 5 September 2018, Mr Stuart Michael, the company’s general manager of marine operations, sent a letter to Mr Mark Davis, an executive officer of the AMOU. Mr Michael’s letter referred to recent communications about the personal leave clause in the Agreement and noted that the company and the AMOU ‘agree on the meaning and application’ of clause 17, and that the ‘basis of that agreement’ was that employees ‘can only access personal leave when they are ill or injured, from the day they are rostered to return to duty.’ On 18 September 2018, Mr Davis replied by letter, stating that ‘the application set out in your letter is also our understanding of how the provision should be applied and this is agreed’. It further stated that when the Agreement was renegotiated the parties would amend any wording that ‘could have led to a misapplication’ of clause 17.3.
Another year passed by. Then on 12 November 2019, Mr Davis sent a further letter to Mr McGrath, stating that he had failed to consult with delegates about the content of his letter of 18 September 2018, and that he had been instructed to retract it, as the delegates did not agree that clause 17.3 of the Agreement contained an error.
Mr McGrath’s evidence was that the company’s practice in respect of clause 17.3 had been to apply it to fill the personal leave ‘gap’, that is, when an employee is ill or injured on the day when they are due to commence work on a vessel and miss the boat. He said that there had been instances where the company had applied the clause in the manner contended for by the union, but that this had been the result of human error.
The AMOU did not lead any witness evidence. However, it tendered a memorandum issued by Ms Paula Blackett, the company’s manager for employment and development, to all crew on 6 January 2014, at which time the 2010 Agreement was in operation. The subject line of the document was ‘Leave entitlements – commonly asked questions.’ Under a heading ‘Personal Leave (Sick Leave & Carer’s Leave)’ the document stated:
“Personal leave can be accessed when the employee is sick or injured or when the employee needs to care for an immediate family or household member who is sick, injured or has an unexpected emergency.”
A number of questions and answers follow this statement, the first of which read as follows:
“• If I am on accrued leave, can I access personal leave?
Yes, but a medical certificate must be provided or other evidence that would satisfy a reasonable person (eg a certificate from a Chemist).”
The parties differ as to the application of clause 17.3 when employees are ill or injured during the period when they are ‘on leave’. The company contends that clause 17.3 does not apply, and that employees simply continue to draw on their pool of leave, as normal. The AMOU contends that employees may elect to take paid personal leave under clause 17.3, such that no deduction is made from their pool of leave. The company views the additional personal leave under clause 17.3 as applying only to the ‘gap’. The AMOU submits that it applies to the gap, as well as to any period when the employee is ‘on leave’, as the clause states.
Terms of the Agreement
The Agreement was approved by the Commission on 8 February 2017. Its nominal expiry date was 30 June 2020. The parties are currently in negotiations for a new enterprise agreement. The following provisions are relevant to the present dispute.
Clause 4 of the Agreement states that it is to be ‘read and interpreted wholly in conjunction with the Award’, namely the Seagoing Industry Award 2010 (Award).
Clause 8 contains the dispute resolution procedure. It states:
“8. Dispute Settlement Procedure
8.1 The employees, AMOU and the Company agree to strictly adhere to the dispute settlement procedure so that any dispute shall be promptly resolved by conciliation in good faith.
8.2 This is in recognition that it is for the overall benefit of the employer and employees. The procedure that will be followed to ensure the highest standard of industrial relations reliability is detailed as follows. In following this procedure all parties recognise and respect the valid roles of the other parties.
8.3 The parties to this agreement shall undertake all necessary steps to ensure that the following procedures apply in the event of any grievance or dispute. The intention of this clause is to ensure that any dispute shall be promptly resolved by conciliation in good faith without provocative action or resort to industrial bans or stoppages. It is also agreed that this Agreement is reached on the understanding that the settlement of disputes procedure will be strictly adhered to at all times.
8.4 For matters that are likely to become industrial issues:- the employer and the employee or the AMOU shall respectively notify each other as soon as possible of any industrial matter which in the opinion of that party might give rise to an industrial dispute. If the issue is vessel based all efforts will be made to resolve the matter onboard in the first instance.
8.5 In the event of a dispute at shipboard level:-, the employee or their nominated representative shall confer with Master and they shall attempt to resolve the issue without delay or within 24 hours of notification of the issue.
8.6 If no agreement is reached at the shipboard level:-, the employee or the employee's representative (which may include the AMOU) shall refer the matter to senior management in order to resolve the dispute. Such discussions shall occur within 48 hours or at such other time as mutually agreed between the parties.
8.7 In the event that the preceding steps have failed to resolve the dispute, a party may refer the dispute to the FWC for conciliation and/or arbitration pursuant to section 739 of the Act.
8.8 It is the intention of the parties that in fulfilment of this clause, the FWC shall exercise the functions and powers normally associated with private arbitration. Accordingly, the parties expressly confer upon the FWC, the full range of conciliation and arbitration powers necessary to resolve the matter or matters in dispute.
8.9 For the avoidance of doubt, the parties consent to the FWC exercising any powers or functions reasonably incidental to the conciliation and/or arbitration of the dispute.
8.10 The parties agree that any decision or determination of the FWC under this clause shall be binding and final by virtue of this clause.
8.11 Employees and their representatives who are directly involved in the matter will be released from normal duties without loss of pay to assist in case preparation and to attend the proceedings.
8.12 Both parties will meet their own legal costs and the company will pay any cost charged by the FWC for its services performed in conciliation or arbitration.
8.13 Pending the completion of the procedure set out in this clause work shall continue without interruption. No party shall engage in provocative action and pending the resolution of the dispute the status quo shall apply. The rights of individuals or parties shall not be prejudiced by the fact that work has continued under this process.”
Clause 12.4 of the Agreement provides that the duty roster will be ‘four weeks on and four weeks off or as otherwise agreed between the parties.’
Clause 13 concerns ‘leave accrual’. It states:
“For each day of duty on the vessel, including the day of joining the vessel, leave will accrue on the basis of 1.166. Leave will not accrue on the day of leaving the vessel. The 1.166 leave accrual commenced on 14 November 2010 as a part of the agreed compromise for the making of the TT-Line/AMOU Shipwrights/Pursers’ Modern Enterprise Agreement 2010.”
The parties agreed that leave under clause 13 accrues on the basis of 1.166 days of leave for each day of duty. The leave in question is a combination of annual, personal, and compassionate leave. Clause 13 gives effect to the requirement in the National Employment Standards that employees receive at least ten days of personal and carer’s leave for each year of service (s 96(1)). Clause 13 of the Agreement is similar to, but more generous than, clause 19.1 of the Award, which states:
“Subject to clause 19.1(c), for each day of duty on a vessel or a day during which the employee is involved in travelling to or from a vessel or place of work as required by the employer, an employee will accrue an entitlement to 0.926 of a day’s leave without loss of pay.”
It may be noted that clause 20.1 of the Award states that clause 19.1 ‘gives full effect to the NES entitlements to annual leave’, and clause 22.1 states that clause 19.1 ‘gives full effect to the NES entitlements to personal/carer’s leave and compassionate leave.’
Clause 14.1 of the Agreement concerns ‘supplementary leave’. It states:
“In a desire to utilise the supplementary leave resulting from the Leave Accrual, the parties agree employees will, in every twelve month period, roster and (sic) addition (sic) 14 days (sic) leave.”
Supplementary leave is the accrued pooled leave that is left over, once all of the periods on and off duty have been rostered.
Clause 17 of the Agreement is in the following terms:
“17. Personal Leave
17.1. Permanent employees will be entitled to 10 days cumulative personal leave for each year of service with the employer. Personal Leave will accrue from 1 July 2006.
17.2. The Employer agrees to recognise the accrued sick leave entitlements of any ex shore staff employees and such entitlement will be added to the Personal Leave entitlements referred to in 17.1 above.
17.3. For the avoidance of doubt, Permanent and Permanent Part Time employees can only utilise accrued Personal Leave entitlements during a period they are on leave or when they are ill or injured at the time they are due to return to duty.
17.4. An Employee accessing Personal (Sick) Leave will be required to produce Medical Certificates. It is the responsibility of the employee to ensure that a Medical Certificate confirms the Employee is unfit for work and identifies the duration of the absence. The Employee is responsible for the costs of attending a Medical Practitioner.
17.5. The Company reserves the right to require further information in relation to claims made under 17.1 where it believes the entitlements are not being properly claimed.
17.6. This clause will be read in conjunction with the Company Leave Policy TTL-POL 608 of March 2016. Any issues arising will be discussed between the parties.”
Neither party referred to the policy identified in clause 17.6.
Clause 23.6 of the Agreement states that when an employee’s sickness or injury results in the employee being incapacitated for work on board a vessel, the company must pay the employee’s wages in full until the employee is ‘repatriated’, meaning returned to shore. This clause reflects relevant Marine Orders made under the Navigation Act 2012.
The application under s 739
I will deal first with the AMOU’s application under s 739. The following question was submitted for arbitration:
“Are Permanent and Permanent Part Time employees under the TT-Line Company Pty Ltd/Australian Maritime Officers’ Union, Shipwrights/Pursers Modern Enterprise Agreement 2016 only able to access personal leave under clause 17.3 when they are ill or injured at the time they are due to return to duty?”
Before considering the merits of the application I must determine the company’s jurisdictional objection. Section 739(5) of the FW Act states that the Commission ‘must not make a decision that is inconsistent with this Act, or a fair work instrument that applies to the parties’. A ‘fair work instrument’ includes an enterprise agreement. Consistent with this stipulation, a Full Bench of the Commission in AWU v MC Labour Services Pty Ltd[2017] FWCFB 5032 stated that the Commission’s function in dealing with a dispute referred to it under an enterprise agreement depends on the terms of that agreement, and that the parties to an agreement ‘may structure or limit the role of the Commission’ (at [25]). If the enterprise agreement requires certain steps to be taken as a precondition to the Commission’s arbitration of the dispute, the Commission has no power to arbitrate unless those steps have been taken.
The company contended that the dispute resolution provision in the Agreement is one that requires certain steps to be taken before the Commission is authorised to determine a dispute (see clause 8.1 and 8.7), and that several of these steps had not been taken in the present case. In this regard, the company submitted that, prior to making its application in the Commission, the AMOU had not notified the company of an ‘industrial matter’ which might give rise to an industrial dispute, as required by clause 8.4; had not raised the relevant issue with the Master, as required by clause 8.5; and had not referred the matter to senior management in order to resolve the dispute and have discussions, in accordance with clause 8.6.
I reject these contentions. As to the step required by clause 8.4, I consider that the AMOU notified the company of the ‘industrial matter’ by its letter of 12 November 2019, in which Mr Davis retracted his earlier letter. The industrial matter was the disagreement about the meaning of clause 17.3. The letter of 12 November 2019 explained the union’s objection to the company’s interpretation and stated that clause 17.3 should continue to be applied in accordance with its terms. The industrial matter was one that might give rise to an industrial dispute. Such a dispute does not necessarily involve industrial action. An industrial dispute, in this context, is simply an argument, debate, quarrel or contest of an industrial nature. I note that clause 8.4 requires that the industrial matter be notified ‘as soon as possible’. But this requirement was also met. It is clear from the letter of 12 November 2019 that it was only around this time that it had become apparent to the AMOU that an industrial matter existed, following a recent issue involving the application of clause 17.3 to a particular employee.
Clause 8 does not require the relevant party to invoke the disputes procedure generally or the relevant step specifically. It requires particular steps to be taken in certain circumstances. It is concerned with substance rather than form. As to the requirements in clauses 8.5 and 8.6, they are not relevant, because they concern disputes at ‘shipboard level’. The present dispute is about the meaning of a provision that has no application during times when an employee is on board a ship. It concerns the question of whether employees may utilise personal leave under clause 17.3 when they are ‘on leave’. As to clause 8.6, the matter was in any event discussed with senior management.
In my view, clause 8.3 also imposes a step that is a precondition to arbitration. It states that ‘(t)he intention of this clause is to ensure that any dispute shall be promptly resolved by conciliation in good faith without provocative action or resort to industrial bans or stoppages.’ This clause does not mean that all disputes must be resolved at conciliation, because clause 8.7 goes on to provide for arbitration of unresolved disputes. What clause 8.3 requires is that the parties engage in conciliation and endeavour conscientiously to resolve disputes. The AMOU has complied with this clause. Conciliation was attempted but was unsuccessful. And there has been no resort to industrial bans or stoppages.
Clause 8.7 states that it is only in the event that ‘the preceding steps have failed to resolve the dispute’ that a party may refer the dispute to the Commission. This must sensibly be read as requiring the relevant steps to have been taken. The AMOU has complied with the relevant steps. The Commission is therefore authorised by clause 8 to determine the dispute by arbitration. The company’s jurisdictional objection is dismissed. I will now consider the substance of the union’s application under s 739.
The AMOU contended that clause 17.3 has a plain and unambiguous meaning, and that there is no need or warrant for the Commission to have regard to the surrounding circumstances. It said that clause 17.3 provides for an additional ten days of personal leave that may be taken in either of the two circumstances set out in the clause. The AMOU submitted that it had only been since October 2018 that the company had adopted the practice of confining clause 17.3 to times at which employees are returning to duty but are unable to board the ship for illness, and that previously the company’s practice had aligned with the union’s interpretation. The union said that evidence of this past practice was found in the company memorandum issued to employees in 2014, which stated in clear terms that personal leave under clause 17 of the 2010 Agreement could indeed be taken during periods of ‘accrued leave’.
The company contended that clause 17.3, when read in the context of the Agreement and having regard to the evidence of the surrounding circumstances, was ambiguous. The company noted that the leave provisions in the seagoing industry were unique and entailed the accrual, and deemed taking, of pooled leave. The company’s leave provisions had historically been consistent with those of the Award. When employees are ashore and ‘on leave’, they are deemed to be taking a combination of leave and receive their normal pay, and if an employee is in fact sick or injured while on leave, they are receiving paid time off and have no need of the additional personal leave under clause 17.3. If an employee becomes sick or injured on board a vessel, clause 23.6 ensures that they receive payment while they are incapacitated. But if an employee is ill or injured at the time of reporting for duty, and cannot sail, the employee will be left behind, without being ‘on leave’. In this situation the employee would not be entitled to paid personal leave, were it not for clause 17.3. The company contended that this was the gap that the additional paid leave was designed to fill.
The principles that apply to the interpretation of enterprise agreements are well-known and I will not recite them. The task begins with a consideration of the ordinary meaning of the relevant words, read in their context, taking into account any evident purpose. In this case, the plain words of clause 17.3 state that employees may take personal leave under clause 17 in either of the circumstances referred to in the provision. The relevant context includes the framework of the leave-taking arrangements established by the Agreement, which reflect the structure in the Award. In this regard, clause 4 of the Agreement requires that the Agreement be interpreted in conjunction with the Award. It is relevant to note that the pooled leave arrangements are a peculiarity of the industry. It is also the case, as the company emphasises, that in the absence of a provision such as clause 17.3 of the Agreement, there would be a ‘gap’ in employees’ ability to take personal leave, because no other provision affords employees personal leave if they are ill or injured at a time when they are required to go to sea and consequently miss the boat. This context provides an evident rationale, or purpose, for a provision affording employees additional paid personal leave. However, there is no contextual or other reason why the clause should be confined to the gap, when on its plain terms the clause goes beyond it. There is nothing unreasonable about a provision that covers the gap by affording employees a more generally available additional entitlement to personal leave.
Contrary to the company’s contention, I do not consider it to be nonsensical for an employee to take personal leave while they are already on leave. It is common for an industrial instrument to make provision for the conversion of annual leave to personal leave. It is true that, because the pooled leave includes personal leave, an employee who is ‘on leave’ is already taking a component of personal leave, and that an employee who took personal leave under clause 17.3 while ‘on leave’ would, in a sense, be taking personal leave while already on such leave. But this is only because of the pooling of leave and the deemed taking of this leave. These arrangements are a construct to facilitate practical and predictable working arrangements for workers who go to sea. In my opinion, there is no reason to be found in the context of the Agreement or the surrounding circumstances why the words of clause 17.3 should not mean what they plainly say: that employees can take up to ten days additional personal leave at times when they are ‘on leave’ or when they are ill or injured at the time when they are due to return to duty. The clause provides for a benefit that goes beyond the gap.
The company contended that clause 17.3 is ambiguous because when employees are ashore ‘on leave’, they are rostered off on full pay, and there is no need for employees to take personal leave in respect of a period when they are not required to work and are receiving full pay. But there is no reason to think, certainly from the perspective of employees who read and voted on the Agreement, that clause 17.3 should be concerned only with necessity. Clause 17.3 provides for ten additional days of personal leave. It can be used in situations where an employee misses the boat for illness; but employees can also use the additional leave when they are ill while ‘on leave’, thereby saving their pooled leave. If they do so, they reduce the amount of additional leave that may be available for the gap. But that is their choice. Clause 17.3 does not state that it is confined to cases of necessity, or that it only covers the gap. It says that personal leave is available while employees are ‘on leave’, or when they are ill at the point of returning to duty at sea. The provision is generous, but not unreasonable in its effect.
Although Mr McGrath did not explicitly say so, I understand his evidence to be that the intention of the company and the AMOU, reflected in his discussion with Mr Wydell, was that the additional personal leave under clause 17.3 would apply so as to cover the gap, and that it would only apply to the gap. I accept Mr McGrath’s evidence in this regard. However, the company’s submissions about the common intention of the ‘parties’ overlooks the significance of the employees who voted to approve the Agreement. Leaving aside greenfields agreements, Part 2-4 of the FW Act does not recognise parties to enterprise agreements. In this respect, it differs from the position that obtained under the Workplace Relations Act 1996. Decisions of the Commission that refer to the ‘parties’ to enterprise agreements do so in a shorthand, non-technical manner, usually referring to those persons and entities that negotiated the agreement. Under the FW Act, an agreement is made when it is approved by employee vote (s 182). To the extent that arguments are advanced about ‘common intention’ as to the operation of particular provisions, they should in my view have regard to the employees who were employed at the time of the vote. In this connection, it is relevant to take account of what if anything was said to employees about the relevant provisions at the time when the employer explained the proposed agreement to employees in accordance with s 180(5) of the FW Act (see Energy Australia Yallourn Pty Ltd v CFMEU[2017] FWCFB 3574 at [76]).
There was no evidence of the explanatory material provided by the company to the employees in respect of the Agreement. There was however evidence of what the AMOU said to its members about the new agreement. Mr McGrath said that on 5 December 2016, Mr Wydell forwarded to him a draft member communication. It stated that clauses 17.3 to 17.6 ‘are new and discuss when a person may take Personal Leave and the evidence to be provided the Company (sic)’. It then stated: ‘There is no need to be concerned with these inclusions.’ In my view this conveyed to employees that nothing of great significance would change as a result of these new clauses. What then was the position under the 2010 Agreement?
The company contended that, even under the 2010 Agreement, the purpose of clause 17 had been to provide personal leave to cover the gap. But the clause did not say this. It simply provided for ten days of personal leave, separate from the pooled leave in clause 13, without any limitation on its availability. Mr McGrath acknowledged that there had been confusion about the application of clause 17 of the 2010 Agreement. In fact, the company had told employees in its 2014 memorandum that personal leave could be accessed while on ‘accrued leave’. It was not disputed that this was a reference to the ‘pooled leave’ in clause 13 of the 2010 Agreement. The company submitted that the 2014 memorandum contained a mistake in this regard, and that it further demonstrated the need for clause 17 of the 2010 Agreement to be ‘clarified’ in the new agreement. But if this too was a mistake, there is no evidence that it was formally corrected. Nor was the position clarified in the text of clause 17.3 of the Agreement. Importantly, there is no evidence of any explanation to employees that clause 17.3 was intended to confine the additional personal leave to the gap, or to address any confusion that existed surrounding clause 17 of the 2010 Agreement. In my view, confining personal leave under clause 17 to the ‘gap’ would have been a change of significance. I consider that s 180(5) would have required the employer to provide some explanation of this change to employees, particularly when the plain words of clause 17.3 stated that it was not confined to the gap.
There is no basis to assume, as the company’s submissions appeared to do, that because the AMOU was a bargaining representative, its understandings or intentions in respect of the Agreement should be imputed to employees. Under the FW Act, unions can be bargaining representatives for their members, but they are not agents by default, and there is no evidence of actual agency in this case. An enterprise agreement is not made until, and is only made if, a valid majority of employees vote to approve it (see s 182). What they approve is the text of the agreement, informed by the employer’s explanation of the agreement. The surrounding circumstances may affect the objective meaning of a provision in an agreement. However, employees are not bound by, or presumed to be aware of, understandings between their employer and a union about the meaning of the agreement, particularly when these are contrary to the plain words of the agreement. It is the employer that carries the obligation under s 180(5) to take all reasonable steps to ensure that the terms of the agreement, and the effect of those terms, are explained to the relevant employees.
I will briefly address some final textual arguments. First, I do not accept the company’s contention that the AMOU’s interpretation leaves no work for the word ‘only’. That interpretation restricts the taking of leave to two circumstances. It could not be taken, for example, when an employee is sick while on duty, or during a period of unpaid leave. Secondly, I do not consider that the words ‘for the avoidance of doubt’ assist the company’s case. They suggest merely that without the words that follow, some doubt might exist, presumably about the fact that the entitlement is confined to the two circumstances that are then identified. Thirdly, on the company’s reading of clause 17.3, the words ‘during a period they are on leave or’ would have little work to do, because the clause would only be concerned with ‘filling the gap’, a situation that can only arise when an employee is ill or injured and cannot go to sea at the conclusion of a period when they have been ‘on leave’. The clause could simply have said that personal leave may only be taken when employees are ill at the time when they are due to return to duty. There would have been no reason to refer to employees being ‘on leave’.
I do not consider clause 17.3 to be ambiguous. Consideration of the surrounding circumstances and the evidence led by the company does not persuade me that there was a common intention of all relevant persons to confine personal leave to the gap. There is no basis to conclude that employees had any knowledge of any understanding as between the company and the AMOU about the intended effect of clause 17.3. There is nothing that would have suggested to employees that the clause contained an error. The plain meaning of clause 17.3 is not an unreasonable one. The clause means what it says: personal leave can be taken during a period when employees are ‘on leave’ or when they are ill at the time when they are due to return to duty. The answer to the question posed for determination is ‘no’.
The application under s 217
Section 217 states that the Commission ‘may vary an enterprise agreement to remove an ambiguity or uncertainty’. The principles that apply to the Commission’s consideration of such applications are well-settled (see Bianco Walling Pty Ltd v CFMMEU [2020] FCAFC 50 (Bianco); see also United Voice v MSS Security Pty Ltd[2016] FWCFB 4979 at [19] to [24], and Bradnam’s Windows and Doors Pty Ltd [2019] FWCA 979 at [11]). The presence of ambiguity or uncertainty is a jurisdictional prerequisite to the exercise of the discretion to vary an enterprise agreement under s 217. The Commission must make a positive finding as to whether the relevant provisions of the agreement are ambiguous or uncertain. The consideration of this question involves an objective assessment of the words in question, considered in their context. The task of the Commission is not to interpret the enterprise agreement (see Bianco at [66] to [72]), and it is important that the Commission bear in mind the distinction between ambiguity and uncertainty (see Bianco at [73] to [83]).
Taking into account all of the circumstances and adopting a broad approach to the question of whether there is ambiguity or uncertainty, which in my view is consistent with the authorities, I find that the Agreement is not ambiguous, either patently or latently (see Bianco at [75]), nor is it uncertain. The text and application of clause 17.3 are clear. Evidently the company and the AMOU, represented by Mr Wydell, did not intend for clause 17.3 to travel beyond the ‘gap’. But the agreement that the company asked employees to approve by vote contained a provision that did so. The fact that the company may have made errors (in the 2014 memorandum, in the text of clause 17.3, and in the application of the Agreement) does not mean that the Agreement contains an ambiguity or uncertainty.
Even if I had concluded that the Agreement was ambiguous or uncertain, I would not have exercised my discretion to vary it under s 217. In a decision I issued in 2019, Re Australian Workers Union[2019] FWCA 4371, I noted that s 217 vests in the Commission a discretion to remove ambiguity or uncertainty, not to make substantive alterations to the terms of the agreement. Applications that seek the latter should be made under s 210 of the Act. At [4], I stated: ‘A decision of the Commission under s 217 to remove uncertainty or ambiguity should give effect to the substantive agreement that was ambiguously or uncertainly reduced to writing in the terms of the enterprise agreement.’ This text has recently been employed by another member in a decision that was cited in the AMOU’s submissions. In my view, the company’s application under s 217 seeks to effectuate a substantive change, rather than to give effect to the original agreement. There is no basis to conclude that employees understood or ought to have understood that clause 17.3 was confined to the ‘gap’ or contained an error. Clause 17 of the 2010 Agreement contained no restrictions on when additional personal leave could be taken. The 2014 memorandum told employees that they could take personal leave while they were on accrued leave. And clause 17.3 of the Agreement is to the same effect. The company submits that it intended to confine the personal leave in clause 17 to the ‘gap’. But this intention was not manifested to employees.
Varying the Agreement in the manner proposed would result in the reduction of an entitlement that formed part of the package of conditions that employees endorsed when they voted to approve the Agreement. This would be unfair to employees in this case. I consider this to be a compelling discretionary reason not to vary the Agreement. Errors in enterprise agreements may be rectified by bargaining, or by application to terminate the relevant agreement after its nominal expiry date.
Conclusion
The Commission is authorised by clause 8 to determine the AMOU’s application under s 739 because the relevant steps in the disputes procedure have been taken. The company’s jurisdictional objection to the AMOU’s application under s 739 is dismissed. The answer to the question that was posed for determination is ‘no’.
As to the company’s application under s 217, I do not consider the Agreement to be ambiguous or uncertain. Even if I did, for the reasons given above, I would not exercise my discretion to vary the Agreement. The Agreement was approved by employees on the basis that they would receive an additional ten days of personal leave, to be available in either of the two circumstances described in the clause. It is not appropriate to vary the Agreement to remove one of those circumstances. The application under s 217 is dismissed.
DEPUTY PRESIDENT
Appearances:
J. Moran for the Australian Maritime Officers’ Union
S. Masters for TT-Line Company Pty Ltd
Hearing details:
2022
Melbourne
4 February
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