Australian Municipal, Administrative, Clerical and Services Union
[2012] FWA 7782
•28 SEPTEMBER 2012
[2012] FWA 7782 |
|
DECISION |
Fair Work Act 2009
s.217 - Application to vary an agreement to remove an ambiguity or uncertainty
Australian Municipal, Administrative, Clerical and Services Union
(AG2012/1508)
Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union
(AG2012/5116)
Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia
(AG2012/5117)
Sydney Water Corporation;
(AG2012/1508)
SENIOR DEPUTY PRESIDENT DRAKE | SYDNEY, 28 SEPTEMBER 2012 |
Application to vary the Sydney Water Enterprise Agreement 2009 and Sydney Water Trades and Apprentices Enterprise Agreement 2010 to remove an ambiguity or uncertainty.
[1] This decision arises from three applications lodged pursuant to s.217 of the Fair Work Act 2009 (the Act). The applications were filed on 4 May 2012 by the Australian Municipal, Administrative, Clerical and Services Union (ASU), the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU) and the Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union known as the Australian Manufacturing Workers' Union (AMWU) (the applicant unions).
[2] The applications seek to vary the Sydney Water Enterprise Agreement 2009 (the 2009 Agreement) and the Sydney Water Trades and Apprentices Enterprise Agreement 2010 (the 2010 Agreement) to remove an alleged ambiguity or uncertainty relating to the Redundancy and Redeployment provisions of the Agreements.
[3] The nominal expiry date of the 2009 Agreement is found at clause 3.1 in the following terms:
“This Agreement will come into force when approved by Fair Work Australia and will remain in force up until 30 June 2012”
[4] Clause 6.13.1 of the 2009 Agreement states:
“All cases of redundancy or redeployment that occur during the nominal life of this agreement will be managed in accordance with the Sydney Water Redundancy and Redeployment policy as reproduced in Schedule 1 of this agreement.”
(My emphasis)
[5] Clause 47.4 of the 2009 Agreement states:
“Where, during the nominal life of this Agreement, the introduction of significant organisational change may give rise to redundancies, Schedule 1 will apply.”
(My emphasis)
[6] Mirror provisions are found in the 2010 Agreement.
[7] Schedule 1, the Sydney Water Redundancy and Redeployment policy, has a maximum accrual of 120 weeks for employees with 30 or more years of service.
[8] On 6 March 2012 Sydney Water Corporation (Sydney Water) advised the ASU that Schedule 1 would cease to apply from 1 July 2012, that is, the day after the nominal expiry date of the 2009 and 2010 Agreements. 1 Sydney Water advised that the redundancy entitlements would thereafter be governed by the National Employment Standards as set out in s.119 of the Act.
[9] On 23 March 2012 Sydney Water advised the ASU that, notwithstanding the proposed withdrawal of Schedule 1, it would apply the following redundancy standard as a matter of policy:
- Four weeks pay for each year of service;
- Accrual to 52 weeks; and
- No redeployment beyond an immediate search for an alternate job. 2
[10] Acceptance of Sydney Water’s construction of the Agreement would mean a reduction in the maximum entitlement to redundancy pay from 120 weeks to 12 weeks under the National Employment Standards or 52 weeks according to Sydney Water’s offer.
[11] On 29 March 2012 the ASU filed an application 3 pursuant to s.739 of the Act seeking that Fair Work Australia (FWA) deal with a dispute arising under the 2009 and 2010 Agreements. The subject of the dispute was Sydney Water’s proposed withdrawal of the Redundancy and Redeployment provisions in Schedule 1 of the Agreements.
[12] The ASU opposed the proposed withdrawal of Schedule 1 on the basis that the two Agreements require that Schedule 1 be applied during what they understood to be the nominal life of the Agreement, that is, until the Agreement is terminated by FWA or replaced by a new enterprise agreement. The dispute was listed for conference before Commissioner Roberts on 13 April 2012. The dispute was not resolved.
[13] The ASU, CEPU and AMWU subsequently filed the present applications pursuant to s.217 of the Act which is extracted below.
(1) FWA may vary an enterprise agreement to remove an ambiguity or uncertainty on application by any of the following:
(a) one or more of the employers covered by the agreement;
(b) an employee covered by the agreement;
(c) an employee organisation covered by the agreement.
(2) If FWA varies the enterprise agreement, the variation operates from the day specified in the decision to vary the agreement.
[14] The three applications were heard together before me on 28 June 2012. Mr Slevin of Counsel appeared for the applicant unions. Mr Goot of Senior Counsel appeared for Sydney Water. The Grounds relied on are:
“3. The ambiguity or uncertainty arises from the use of the words ‘nominal life of this agreement’.
4. The words have been a source of disputation.
5. The applicant contends that the words mean that the provisions apply while the agreement remains in force in accordance with the Act.
6. The respondent contends that the words mean that the provisions apply while the agreement is in force in accordance with clause 3.1 of the Agreement. Clause 3.1 provides that the Agreement is in force until 30 June 2012.
7. Given the competing contentions of the parties the words are ambiguous as they are susceptible to more than one meaning.
8. The words also give rise to uncertainty as to the operation of the clauses.
9. The Applicant contends that the mutual intention of the parties in reaching agreement on redundancy and employment was to make the Respondent’s redundancy and redeployment policy a legally enforceable part of the Agreement.
10. Contemporaneous documents from the time the agreement was reached demonstrate that:
a. when the agreement was put to the employees for a vote the Respondent told employees that the intention was to make the Respondent’s redundancy and redeployment policy a legally enforceable part of the Agreement.
b. the Applicant told the employees that the intention was to protect redundancy entitlements in the Agreement.
c. the Respondent’s executive was informed that the current redundancy and redeployment policy would be in the Agreement.
11. The Applicant recommended that the Agreement be accepted by the employees on the understanding that the redundancy and redeployment benefits would continue in the same way as other benefits of the agreement.
12. The Respondent now contends that the clauses should be read as including a sunset provision on redundancy and redeployment benefits effective on 30 June 2012.
13. The Applicant contends that the proposition that the redeployment and redundancy provisions would include a sunset provision was not put during negotiations.
14. The Applicant contends that had a sunset provision be put as part of the proposed agreement then it would not have recommended the agreement and it would not have been approved by the employees.
15. The Respondent has announced the introduction of significant change that will involve redeployment and redundancies and is likely to occur after 30 June 2012.
16. The Respondent has proposed to reduce the benefits to redeployment and redundancy pay. For example, the Respondent proposes to reduce the cap on redundancy pay for many employees from 120 weeks to 52 weeks.
17. The Agreement has been subject to a number of proceedings where the wording of the Agreement has been the subject of dispute.
18. The variation sought will resolve the dispute between the parties over the correct interpretation of the clause.
19. The variation will give effect to the mutual intention of the parties at the time the agreement was made.
20. Such other grounds as the tribunal sees fit.”
[15] The Applicant unions seek an order that the provisions of each Agreement be varied as follows:
“All cases of redundancy and redeployment will be managed in accordance with the Sydney Water Redundancy and Redeployment policy as reproduced in Schedule 1 of this Agreement.”
and,
“Where the introduction of significant change may give rise to redundancies, Schedule 1 will apply.”
[16] The applicant unions submitted that an ambiguity or uncertainty arises from the use of the words “nominal life of this agreement”. This term is not defined in the Agreements or the Act.
[17] The difference between the parties is straightforward. The applicant unions contend that “nominal life of this agreement” means “while the Agreement remains in force in accordance with the Act”, therefore, in force until the Agreements are terminated by FWA or replaced. Sydney Water’s interpretation of the words “nominal life of this agreement” is that Schedule 1 applied until 30 June 2012, which is the nominal expiry date of the Agreements and, therefore, the end date of the nominal life of the Agreement.
[18] It was submitted by the applicant unions that these competing contentions indicate that the phrase “nominal life of this agreement” is ambiguous as it is susceptible to more than one meaning and that the interpretation of an industrial instrument turns on its industrial context. In relation to this application the context was said to be the negotiation of the two Agreements, during which securing the continued application of the Redundancy and Redeployment policy in Schedule 1 for the period of operation of the Agreements was a key issue for the applicant unions. It was submitted that none of the applicant unions would have recommended the Agreement unless they understood it was agreed that the Redundancy and Redeployment policy applied for the full period of the operation of the Agreement and that the membership would not have voted for the Agreement without that understanding having been conveyed by the applicant unions.
[19] The applicant unions submitted that in exercising its discretion FWA should have regard to the mutual intention of the parties at the time that the Agreements were made, taking into account the subject matter and wording of the Agreement as a whole. The mutual intention of the parties in relation to both Agreements was to make Sydney Water’s Redundancy and Redeployment policy a legally enforceable part of the Agreements for the whole of the period that the Agreements were in operation and that FWA should exercise its discretion in this matter in order to resolve an ambiguity by varying the relevant clauses in both Agreements.
[20] Sydney Water opposed the orders sought by the applicants. It submitted that that there is no ambiguity or uncertainty regarding the relevant clauses of the Agreements. It submitted that the phrases “that occur during the nominal life of this Agreement” and “during the nominal life of this Agreement”are words of limitation. All of the words in the clauses, in particular words of limitation, are to be given meaning and effect. The word “during” linked to “nominal life of this Agreement” was said to refer to the nominal expiry date of 30 June 2012 and thus limit the operation of the clauses. Further, the word “nominal” qualifies “the life of this Agreement” and unambiguously refers to the nominal expiry date referred to in clause 3.1.
[21] Sydney Water submitted that the existence of any ambiguity must be objectively ascertained and that there must also be an arguable case made out for more than one contention. The mere existence of competing contentions is not sufficient. The principles of interpretation of an industrial instrument begin with the plain and ordinary meaning of the words used. On this basis the clauses limit the mandatory application of Schedule 1 to the nominal life of the Agreements which is the nominal expiry date of the Agreements.
[22] Sydney Water also submitted that the interpretation of the clauses must be in the context of the Agreements and Act as a whole. In particular, Sydney Water submitted that the expression “nominal life of this agreement” is not so differentto “nominal expiry date” that it creates any ambiguity. This was said to be strengthened by the requirement that pursuant to s.186(5) of the Act that an enterprise agreement specify a nominal expiry date.
[23] The circumstances surrounding the making of the Agreements cannot be used to contradict the plain language used in the clauses. However, even if the Tribunal were to give consideration to those circumstances, they are not of benefit to the applicant unions’ argument, as the applicant unions had the opportunity to review the clauses during the negotiation period but did not raise any objection. Sydney Water opposed the orders sought on the basis that there is no ambiguity or uncertainty in the relevant provisions in the Agreements.
[24] Oral evidence for the applicant unions was given by Naomi Arrowsmith, Sally McManus and Jeanette Boulais. Statements were tendered on behalf of Asren Pugh, Michael Flinn, Robert McLean, Stuart Hatter, Paul Muller and Marion Dzurik. Mr Raymond Ferrier gave evidence for Sydney Water.
[25] Ms Arrowsmith is an Organiser for the ASU. She was the primary negotiator with Sydney Water for the 2009 Agreement. Between February and November 2009 she attended 30 or more negotiation meetings.
[26] Ms Arrowsmith stated that before the 2009 Agreement conditions of employment at Sydney Water were regulated by the Sydney Water Award 2004, a state award of the New South Wales Industrial Relations Commission. Under this regime, redundancy and redeployment was provided for by way of policy.
[27] Prior to March 2008, Sydney Water’s redundancy policy provided a maximum entitlement of 120 weeks pay upon redundancy. In March 2008 Sydney Water unilaterally altered the policy, reducing the maximum entitlement to 52 weeks. Therefore:
“......the issue of redundancy rights was a key agenda item for the ASU. A principal objective of the Union’s bargaining team in negotiating the 2009 agreement was to ensure that redundancy rights and entitlements would become legally enforceable in the agreement and not be capable of unilateral removal, reduction, or alteration by Sydney Water.” 4
[28] On 8 September 2009 the Sydney Water update, issued in response to the ASU bargaining position of 2 September 2009, was:
“ASU Claim
Reinstate and protect the pre-March 2008 redundancy entitlements
Sydney Water’s response - as claimed by the ASU
Include 4 weeks per year of service and 52 weeks cap in agreement. Refuse to include any further aspects of the policy.
The facts
We have very generous redundancy provisions compared to other organisations.
Although there was a greater entitlement before March 2008 it is still very fair.
We have included 4 weeks per year of service and 52 weeks in the agreement. We do not want to include any further aspects of the policy in the agreement. As it is such a generous package the New South Wales government may not approve our agreement for fear of a flow on effects to other organisations. By including it in the agreement it ultimately puts the entitlement at risk. Although only a policy, this entitlement has a greater chance of being protected if not included in the agreement. There are no plans to change the redundancy entitlements.” 5
(my emphasis)
[29] By mid-September 2009, it was agreed between the parties that the 120 week entitlement would be included in the Agreement and preserved for those employees employed before March 2008. The 16 October 2009 draft agreement confirmed this.
[30] Ms Arrowsmith deposed to an increasingly tense bargaining environment developing in October 2009. However, on 22 October 2009 Kerry Schott, Managing Director for Sydney Water, confirmed in a letter to Ms Arrowsmith that the entire redundancy policy would be included as a schedule to the 2009 Agreement:
“The full redundancy policy is contained in the current proposal as a schedule. If the wording in the body of the agreement needs to be changed to reflect that it applies, this can be done.” 6
[31] Ms Arrowsmith treated Ms Schott's e-mail as an assurance that the members’ entitlements to redundancy payments would remain unaltered, that is, that they would continue to apply during the entire period of the operation of the Agreements.
“50. ......On receiving these reassurances from Sydney Water I took steps to ensure that the material being distributed to our members the next day was amended to show that Sydney Water had clarified the redundancy issue with the Union. At no time did Kerry Schott or any other representative of Sydney Water tell me that these assurances and protections were limited such that they would come to an end before the renewal or termination of the agreement.” 7
[32] The 16 October 2009 draft agreement forwarded to the union did not contain the word “nominal” before the phrase “life of this agreement”. It said:
“39. At clause 6.13.1 the 16 October 2009 Draft Agreement stated as follows:
‘All redundancy payments made during the life of this agreement will be calculated in accordance with the Sydney Water redundancy and redeployment policy in effect as at 1 July 2009 as reproduced in Schedule 1 of this agreement.’
40. On reviewing the document I noticed that at schedule 1 the 16 October 2009 Draft Agreement reproduced the existing Sydney Water redundancy entitlements in full, including the preservation of the 120 week entitlement for employees engaged before March 2008. This reflected the agreement we had reached in September. I understood this meant that the redundancy schedule would now be legally enforceable as part of the agreement and that the schedule would continue to operate throughout the life of the agreement, namely until such time as the agreement was terminated or replaced by new agreement.” 8
[33] Ms Arrowsmith’s evidence then turned to the 10 November 2009 draft agreement. The draft agreement was emailed to her by Mr Saunders of Sydney Water. Ms Arrowsmith stated that the email did not refer to what changes had been made to the previous draft, nor were the changes tracked on the draft itself. Ms Arrowsmith’s evidence was that she reviewed the document but she had no knowledge that the draft agreement had been varied to include the word “nominal” in clauses 6.13 and 48.4.
[34] Subsequent drafts were provided to Ms Arrowsmith on 16 November and 17 November 2009. Ms Arrowsmith maintained that Sydney Water did not highlight the changes that were made in each of these drafts. She stated that the draft of 18 November 2009 did mark changes made from the previous draft, but did not highlight the previously unidentified changes in the previous drafts. She asserted that she was not aware of the insertion of the word “nominal ” during this period.
[35] Ms Arrowsmith gave evidence as to the agreement approval process. On 18 November 2009 a final copy of the proposed Agreement and information relating to the Agreement were made available on the Sydney Water intranet site. Ms Arrowsmith quoted the documents as stating:
“Redundancy entitlements are now included as a legally enforceable part of the agreement”; and
“Current redundancy and redeployment benefits included in the agreement.”
[36] Ms Arrowsmith said that this information affirmed her understanding that the application of the Redundancy and Redeployment provisions of the Agreement continued whilst ever the Agreement operated.
[37] Ms Arrowsmith responded to the evidence of Mr Ferrier by confirming his evidence that he had never made any reference to or used the word “nominal” in negotiations to describe the life of the Agreement. She went further and said that he did not make any other comment that raised any suggestion of any limitation applying for the duration of the Agreement. Further, in discussions regarding the imposition of a penalty on redundancy payments for those who remained in the redeployment pool for long periods, there was no discussion concerning a limited application for the normal life of the Agreement. 9
[38] Ms Arrowsmith’s correspondence of 18 September 2009 confirmed:
“5. ......that the 16 September 2009 meeting had resulted in ‘significant movement’ on the part of Sydney Water - at this point in time the redundancy issue had essentially been resolved. The arrangement was then included in the 16 October draft (ASU BD 16 & RF 33), which was reviewed and confirmed at the subsequent bargaining meeting of 19 October 2009. There was no discussion of a ‘nominal life’ or other limitation at the meeting of 19 October, by this stage we had moved on from the redundancy issue, the agreed position was ticked off at the meeting.” 10
[39] Ms Arrowsmith’s response to Mr Ferrier's description of how he and Mr Saunders had reviewed the 16 October draft for the purpose of removing ambiguities and uncertainties was that:
“7. ...... During the course of the negotiations Sydney Water took responsibility for drafting versions of the agreement that captured the matters agreed in principle between the parties. In principle agreement had been reached about the redundancy provision on 16 September, this agreement was reflected in the draft presented to the Unions by Sydney Water on 16 October 2009. Thereafter it was my understanding that Sydney Water were making changes that had been agreed to between the parties.” 11
[40] Ms Arrowsmith denied that Mr Ferrier had ever said the words"many clauses have been changed from draft to draft to reflect Sydney Water's understanding of what has been agreed”. She confirmed, as Mr Ferrier acknowledged, that she had complained that many changes had been made to the 10 November draft without reference to the applicant union. The change referred to by Mr Ferrier, affecting civil maintenance competencies, was also not the subject of tracked changes in drafts or correspondence highlighting the change. In summary Ms Arrowsmith's evidence was that:
“8. At no time did Mr Ferrier or Mr Saunders bring to my attention the changes inserting a ‘nominal life’ reference into the redundancy provisions at clause 6.1.3 or clause 50.5.1 as part of a review or any other drafting process. This change was not marked in any draft documents and was not identified in any accompanying correspondence. At no time during negotiations did I have cause to think that the redundancy provisions were protected other than for the life [sic] the agreement, that is until the agreement was replaced by new agreement.” 12
[41] Ms McManus is the Secretary of the ASU of New South Wales. She was involved in a general sense in the bargaining process with Sydney Water throughout 2009. She became directly involved in the negotiations with the general manager of Sydney Water, Kerry Schott, in November 2009. Ms McManus’ evidence regarding the negotiations was substantially the same as that of Ms Arrowsmith.
[42] Ms McManus’ evidence was that neither Ms Arrowsmith, nor any other member of the ASU, raised any concern with her that Sydney Water had sought to limit the operation of the Redundancy and Redeployment provisions to the nominal expiry date of the Agreement. Further, Ms McManus stated that she had read all of the correspondence sent by Sydney Water to its employees during the negotiations, none of which drew attention to this possibility.
[43] Ms McManus did not become aware that Sydney Water had inserted the words “nominal life” in clauses 6.13 and 47.4 until early 2012.
[44] Had she been aware of Sydney Water’s intention to terminate the application of the Redundancy and Redeployment provisions as at the nominal expiry date, she would not have recommended the Agreement to the ASU’s members.
[45] These Agreements were the first agreements applicable to Sydney Water under the federal system. Ms McManus’ evidence was that under the state system it had not been necessary to push for matters of policy to be included in agreements and awards because “....the NSW Industrial Relations Commission had wide dispute settling procedures, the Union’s experience was that disputes had been able to be deal (sic) with these matters effectively. This is why the ASU in the past, like many other unions, did not always push for many issues of policy to be included in Awards or Agreements.” 13
[46] There has been a history of change to the Redundancy and Redeployment policies following corporatisation of Sydney Water in 1994, including a reduced entitlement to redundancy payments from a maximum of 120 weeks to a maximum of 52 weeks for employees employed after 2008, as well as reduced entitlements for employees who are in the redeployment pool for a longer period. This history has affected the ASU’s attitude to bargaining on the issue of redundancy. Ms McManus said:
“8.....they introduced their new policy in March 2008. As a result, the ASU determined to pursue the matter in bargaining for a new agreement with the dual aim, firstly to protect redundancy provisions in the new agreement so they could not be unilaterally changed by SWC and, secondly, to restore the pre-March 2008 rights.
9. ......As part of this decision the ASU embarked on an education campaign with members around the importance of converting redundancy rights from policy to an industrial instrument so they could not be unilaterally taken away in the future. ......” 14
[47] In her statement Ms McManus discussed the action taken by the ASU in communicating with its members on this issue and in May 2009 she spoke at a conference of Delegates.
“14. ......I spoke at this conference and impressed on delegates the importance of securing redundancy rights in the Agreement, especially given our experience in 2008 and in the context of the likely change of government. This position was strongly supported by delegates at this Conference. 15
[48] Ms McManus described her view regarding the outcome of negotiations and the conclusions of those who were negotiating as reported to her.
“21. At the end of September, I was informed by our negotiators that SWC had now agreed to the full current redundancy provisions to be included (sic) the Agreement. Whilst this was not our claim (we were seeking the pre-March 2008 policy for all staff), I knew from discussions at the CoM and with delegates that this offer would be acceptable to members. I believed at this stage that SWC had made the decision to concede this claim. At no time did Naomi Arrowsmith, Asren Pugh, or any other members of the ASU negotiation team state that the protection of redundancy entitlements was to be set for a fixed term only. If the redundancy entitlements had been the subject of a limited protection period, this would not have been acceptable.
......
24. At no stage did Naomi Arrowsmith or any other members of the ASU negotiating team raise a concern or the prospect that SWC was only offering to protect redundancy rights in the Agreement until 30 June 2012. I read all of the correspondence SWC sent to employees during the negotiations and at no time did they raise the prospect that the agreement on the redundancy provisions differed in that these provisions have a set expiration date. Therefore it never even crossed my mind that this was something SWC wished to achieve.” 16
[49] On 18 November 2009 the ASU communicated with its members by e-mail in relation to the key points of the proposed agreement. This e-mail confirmed "redundancy pay and/or current redundancy entitlements included in the agreement". That report reflected the agreement on redundancy as understood by the ASU. Ms McManus’ evidence was that:
“45. ......At no point prior to this time, or indeed after this communication was sent to all members, did Sydney Water negotiators inform me of any intention on their part to restrict the terms of the redundancy protections to a sunset provision.” 17
[50] Ms McManus gave evidence regarding her advice to the 1000 members who attended a paid mass meeting on 25 November 2009 at Parramatta Stadium called to discuss whether or not there would be a “yes” vote for the Agreement. Her evidence was that the attitude of the ASU, and its understanding of what was agreed, is demonstrated by its officers’ explanation to the members. It was on the basis of this explanation that the “yes” vote was carried unanimously.
“50. My role at this meeting was to speak to the Sydney Water ASU Members Bulletin, a copy of which is at ASU BD Tab 66. During the meeting I took members through each of our claims and explained what the final result was and took questions. In regard to the issue of redundancy I said words to the effect of:
‘Redundancy is now no longer a policy that Sydney Water can change on their own. The redundancy provisions are now part of the Agreement and are legally enforceable. Along with other EBA conditions, these entitlements can now only be taken away as part of future negotiations. The only way redundancy could be taken away from employees in the future is if you vote to allow them to be taken away in a future Agreement.’
I said to members, ‘this is a big win, we are the first public sector union to protect redundancy provisions in an Enterprise Agreement.’
51. This meeting went for approximately four hours with much discussion on the EBA. In the end, the vote to accept the Agreement was unanimous. On this basis the Union urged members to vote in favour of the Agreement in the formal ballot.
52. Had I been aware Sydney Water’s intentions to terminate the redundancy provisions as at 1 July 2012 I would never have recommended the agreement to the ASU membership. Further, on the basis of my experience I am of the opinion that had the members been aware of Sydney Water’s intentions, the majority of members would not have voted to accept the agreement.
53. Subsequent to the Union vote, the enterprise agreement was endorsed strongly at the formal ballot. 18
[51] When the final draft of the Agreement was reviewed by Ms McManus and Ms Boulais on the weekend of 14/15 November, Ms McManus did not check the wording of the redundancy provisions. Ms Boulais didn't draw her attention to the fact that the word "nominal" had been inserted before the words “life of this agreement” and she considered that they were an agreed matter, "done and dusted", and settled by Ms Schott’s undertaking 19 that all cases of redundancy and redeployment would be managed in accordance with the policy in Schedule 1.
[52] The union was under pressure to check the document on that weekend because Sydney Water was insisting on putting the Agreement to a vote of employees in the immediate future. Ms McManus and Ms Boulais therefore limited their review of the Agreement to those matters most recently raised by Mr Saunders from Sydney Water.
[53] Ms Boulais is a delegate of the ASU at Sydney Water. At the time of the negotiations with Sydney Water she was a member of the Water Division Committee of Management.
[54] Ms Boulais gave evidence that she attended most of the meetings that took place during the 2009 negotiation process. During these negotiations her understanding was that the 2009 Agreement was to include the redundancy and redeployment entitlements for the life of the Agreement and that this meant that the provisions would be preserved until a new agreement was negotiated.
[55] In October 2009, when the proposed Agreement was to be put to a vote, Ms Schott (Managing Director of Sydney Water) placed a message on the Sydney Water intranet site that said:
“There is no removal of your redundancy rights”.
[56] This message confirmed her understanding that the protection of redundancy entitlements would continue. The reference to redundancy entitlements being legally protected, which was contained in the voting packs provided to employees, also affirmed her view. 20
[57] Ms Boulais became aware of the use of the words “nominal life” in the relevant clauses towards the end of the negotiation period. She mentioned this to one of her colleagues. She did not believe that this altered what she believed to have been agreed between the parties, that is, that the redundancy and redeployment policy would apply until a new agreement was negotiated.
[58] In the period leading up to the vote for the Agreement at Sydney Water her colleagues at Sydney Water were very conscious of the importance of redundancy and redeployment entitlements being protected by the Agreement. She gave evidence that Sydney Water would have been aware that the employees to be covered by the 2009 Agreement were under the impression that the policy was to have effect until a new agreement was negotiated. In her capacity as delegate Ms Boulais had frequent conversations with co-workers. Her evidence in relation to that contact, her advice to those workers and how that reflected her understanding of the Agreement is set out below.
“16. In my capacity as a union delegate from my work area, and because I had participated on the negotiation team, during the voting period I was approached by a number of co-workers who wanted to know how the agreement affected redundancy rights. On several occasions I told my co-workers ‘It’s in the agreement, it is unchanged, it can’t be altered until we negotiate a new agreement.’ Everyone working in and around my vicinity at Sydney Water was talking about how important it was that we got the redundancy entitlements protected in the agreement. I am certain that Sydney Water management would have been well aware that we all understood that the redundancy entitlements were protected on the basis that they could not be changed by Sydney Water. I never had a conversation with any of my co-workers about the idea that the redundancy provisions might have an end date that was different to the agreement as a whole. This never occurred, because it just was not thought of as an issue at the time. There was no concept that the redundancy entitlements were in any way protected for a limited period only.” 21
[59] As to the basis of the discussions between the ASU and Sydney Water Ms Boulais’ evidence was that:
“9. At paragraph 182 Mr Ferrier acknowledges that at the meeting of 11 November I complained that changes had been made to the 10 November draft ‘without letting the Union know’. Mr Ferrier did not say words to the effect that ‘many clauses have been changed from draft to draft to reflect Sydney Water’s understanding of what has been agreed.’” 22
[60] Mr Pugh is an Assistant Secretary of the ASU of New South Wales. At the time of the negotiations of the 2009 Agreement he was engaged by the ASU as an Organiser. Mr Pugh was involved in the bargaining with Sydney Water until late September 2009.
[61] Mr Pugh’s evidence was that at no stage during the meetings held between the ASU and Sydney Water in August 2009, did Sydney Water say that the Redundancy and Redeployment policy would be limited in its effect to the nominal expiry date of the 2009 Agreement.
[62] Mr Pugh attended a meeting on 16 September 2009 between the ASU and Sydney Water. At this meeting Sydney Water agreed to include a maximum cap of 120 weeks pay upon redundancy for employees engaged before March 2008. Mr Pugh stated that at this meeting Sydney Water did not address the fact that the redundancy and redeployment provisions would cease to have effect on the nominal expiry date. 23
[63] Mr Pugh denies that Mr Ferrier ever said that he limited his agreement to “the life of this agreement”. His evidence was that there was no conversation from Mr Ferrier intimating any intention to limit redundancy entitlements to a fixed period. 24There was no such limitation referred to in either his own notes or Mr Ferrier's notes attached to his statement.25
[64] In support of his contention that there was no agreement that the entitlements be limited, Mr Pugh points to the Sydney Water Executive Meeting Enterprise Agreement Update, 3 December 2009, at Attachment 1. Under the heading Redundancy and Redeployment there is a reference to “Current Redundancy and Redeployment Policy in Agreement”. It contains no mention of a limitation to 30 June 2012. 26
[65] Mr Flinn is the Deputy Secretary of the ASU. He was involved in the negotiations with Sydney Water from mid-October 2009 to 13 November 2009.
[66] Mr Flinn’s evidence regarding the negotiations was substantially similar to that of Ms Arrowsmith. He attended a meeting with Sydney Water on 9 November and 11 November 2009. His evidence was that at neither of these meetings did Sydney Water mention that Schedule 1 would cease to have effect on the nominal expiry date of the 2009 Agreement.
[67] Mr Flinn referred to Mr Ferrier’s evidence that he and Mr Saunders reviewed the 16 October draft to remove ambiguities, and to reflect Sydney Water's agreement. Mr Flinn’s evidence was that:
“2. At paragraph 111 Mr Ferrier describes a process whereby he and Mr Saunders reviewed the 16 October draft agreement ‘to remove any ambiguity or uncertainty and to reflect what Sydney Water had agreed to and what Sydney Water was willing to agree to.’ At no time during my negotiations with Sydney Water did Mr Ferrier or Mr Saunders suggest that the redundancy provisions in the 16 October draft were uncertain or ambiguous or required alteration. Nor did Mr Ferrier or Mr Saunders advise me that they were undertaking a review of the wording of the agreement. I certainly did not authorise the Sydney Water negotiators to conduct a review of this nature on behalf of the parties.” 27
(my emphasis)
[68] Mr McLean is the President of the Water Division of the ASU of NSW. Mr McLean has been involved in the negotiations of at least four previous enterprise agreements with Sydney Water. Mr McLean’s evidence regarding the bargaining process was substantially similar to that of Ms Arrowsmith.
[69] Mr McLean’s evidence was that the words “nominal life” had not been used by Sydney Water at any stage during the negotiation process.
“7. There was never any doubt in my mind about what the phrase ‘life of the agreement’ meant; it meant that the rights would be carried over until we negotiated a new agreement. This has always been my experience of negotiations with Sydney Water. Sometimes there is a gap between the conclusion of one agreement and the making of a new agreement, in this situation the entitlements carry over. For example, with the 2009 Agreement, the previous agreement finished at the end of June and we did not end up getting a final agreement with Sydney Water until late November. The actual approval process took even longer because of a dispute, but in the meantime the existing conditions carried through. At no stage in discussing the redundancy clause with Sydney Water was there any suggestion that we would move away from this arrangement. I am absolutely certain that no one from Sydney Water ever suggested that the redundancy entitlements would die at the end of June.
8. I also have no recollection of anyone involved in the negotiations using the phrase ‘nominal life’. I had never heard of the word until earlier this year when I was told that Sydney Water had recently claimed that the redundancy schedule came to an end on 30 June 2012.” 28
[70] Mr McLean was certain that Mr Ferrier never said anything to cause him to think that these entitlements were limited in application to 30 June 2012. He said "if this had been raised I would have jumped up and down about it as the members had been quite clear that the redundancy entitlements needed to be protected". 29
[71] Mr McLean’s evidence was that Ms McManus advised members at a mass meeting at Parramatta Stadium that the redundancy was locked in the agreement. At a roadshow conducted by Mr Ferrier, he said words to the effect of "the redundancy provisions are now going to be in the agreement". He did not recall Mr Ferrier using the word “nominal” or “nominal life” and Mr Ferrier did not tell anyone that the redundancy provisions were only protected for a fixed period. 30 Mr McLean attended the meetings to make sure that members were being accurately informed as to what had been agreed. The feedback from members also confirmed Mr McLean's understanding.31
[72] During the negotiation period between the ASU and Sydney Water Mr Hatter was an organiser for the ASU. Mr Hatter was involved in the negotiations from late September 2009.
[73] Mr Hatter’s evidence was that he had reviewed the 16 October 2009 draft agreement. His understanding of the phrase “life of the Agreement” in the relevant clauses was that the redundancy and redeployment policy would continue to apply until the 2009 Agreement was replaced.
[74] He attended meetings on 19 October and 28 October 2009. At no time during these meetings or in any of the correspondence exchanged between the parties was the phrase “nominal life” used by Sydney Water. Further, there were no discussions between the parties about the redundancy and redeployment provisions expiring on 30 June 2012. When Mr Hatter joined the negotiating team there was already agreement in relation to the redundancy entitlements being included in the Agreement. The 16 October 2009 Draft Sydney Water Enterprise Agreement, which reflected that agreement, stated at Clause 6.13:
“6. ...... ‘All redundancy payments made during the life of this agreement will be calculated in accordance with the Sydney Water redundancy and redeployment policy in effect as at 1 July 2009 as reproduced in schedule 1 of this agreement.’” 32
[75] The only remaining concern was whether or not the redeployment conditions were included as well, not whether or not there was a time limit to the application of the policy. After that issue had been resolved by Ms Schott, Mr Hatter was certain that the payments and redeployment were preserved in the Agreement.
[76] Mr Muller is a Vice President of the Water Division of the ASU of New South Wales. He was a member of the ASU enterprise agreement negotiation team in 2009.
[77] Mr Muller said that the draft agreement provided by Sydney Water to the ASU in mid-October 2009 “made it clear” that the redundancy entitlements were in place for the life of the Agreement. He interpreted this to mean that they would be in place until the 2009 Agreement was replaced by a new enterprise agreement. The redundancy entitlement was there for the life of the agreement. This was a priority for Mr Muller because of the workers he represented. He specifically did not want a further unilateral reduction in entitlements by Sydney Water as had occurred in 2008.
[78] Sydney Water gave no indication to him or the employees covered by the Agreement that the policy would cease to have effect after the nominal expiry date of the Agreement. Mr Muller made specific reference to the undertaking given by Ms Schott on 22 October 2009, confirming that there was to be no removal of redundancy rights. Mr Muller’s evidence was that “nominal life” was not a phrase used in the negotiations. He would have remembered if it had been used and, if he had understood that Sydney Water intended to limit the application of the redundancy provisions, he would not have allowed that to have been agreed to. 33
[79] At the roadshow conducted by Sydney Water, which Mr Muller attended, there was no reference to "nominal life" or a fixed term limit to redundancy entitlements, neither was that the understanding of any member who approached Mr Muller. Whenever a member approached Mr Muller with enquiries he confirmed that the policy applied until a new agreement was negotiated. 34
[80] In response to Mr Ferrier’s evidence that he and Mr Saunders conducted a review of the draft agreement to remove ambiguities, Mr Muller stated that there was no occasion when Mr Ferrier or Mr Saunders suggested there were uncertainties or ambiguities. There was no agreement for Sydney Water to redraft the agreement. The redundancy provisions were agreed to operate for the life of the agreement that is, until a new agreement was made. 35
[81] Mr Muller denies that Mr Ferrier ever said at a meeting which he attended "your redundancy benefits will be protected for the duration of the agreement – that is 30 June 2012.", or that "your redundancy benefits are in the agreement but only for the duration of the agreement". 36
[82] Ms Dzurik is a delegate of the AMWU at Sydney Water. She was involved in the negotiation of the 2010 Agreement with Sydney Water. Ms Dzurik stated that she attended all meetings with Sydney Water regarding the Agreement where substantial issues were discussed.
[83] Ms Dzurik’s evidence was that during the negotiations some of the draft agreements provided by Sydney Water to the AMWU did not include track changes. This made it difficult to ascertain what, if any, changes had been made to the previous draft. The union sought to have redundancy entitlements included in the agreement. The Sydney Water representatives agreed to this and indicated that the current redundancy provisions would not change. Ms Dzurik understood that the Schedule 1 entitlements would remain for the duration of the agreement. On that basis the agreement was recommended to AMWU members.
[84] During the negotiations there was no discussion of clauses 6.14 and 45.4 of the 2010 Agreement. Ms Dzurik’s understanding was that the redundancy and redeployment policy, found at Schedule 1 of the proposed Agreement, would remain in place until the Agreement was terminated or replaced by a new agreement.
[85] Evidence for Sydney Water was given by Mr Raymond Ferrier. Mr Ferrier is the Industrial Relations Manager for Sydney Water. He led the negotiations on behalf of Sydney Water for the 2009 and 2010 Agreements.
[86] Mr Ferrier’s evidence regarding the negotiations started with the meetings with the applicant unions on 12 and 13 February 2009. His evidence was that matters relating to redundancy were not discussed at these meetings by Sydney Water because it intended to continue regulating redundancy and redeployment entitlements by way of policy.
[87] The first draft agreement dated 27 January 2009 was provided to the applicant unions on 5 March 2009. It contained no reference to entitlements upon redundancy or redeployment.
[88] On 13 May 2009 a log of claims was sent by the ASU and APESMA to Sydney Water. The applicant unions sought to “reinstate and protect the pre-2008 redundancy entitlements in the agreement”.
[89] On 21 May 2009 a meeting was convened by Sydney Water with the ASU and APESMA. At this meeting he said that Sydney Water wished to maintain the status quo regarding redundancy and redeployment entitlements including the ability to vary the policy in the future if required. The ASU and APESMA responded by saying that they were not ready to address Sydney Water’s proposal.
[90] On 11 May 2009 the AMWU sent Sydney Water a log of claims. On 21 May 2009 the CEPU sent Sydney Water its log of claims. There was no mention of redundancy or redeployment in either of these documents.
[91] On 27 May and 11 June 2009 meetings were held between Sydney Water, the AMWU and CEPU. Mr Ferrier’s evidence is that there was no discussion of redundancy or redeployment at these meetings.
[92] On 30 June 2009 the AMWU filed a Notice to Initiate a Bargaining Period under the Workplace Relations Act 1996. “Employment security and redundancy” was proposed as being one of the matters to be dealt with in the application.
[93] On 29 July and 30 July 2009, a meeting was held with the ASU and APESMA. The ASU agitated for the inclusion of the Sydney Water Redundancy and Redeployment policy in the proposed Agreement however this was rejected by Sydney Water.
[94] On 17 August 2009 a meeting was held between the ASU, APESMA and Sydney Water. Mr Ferrier stated in his evidence that at this meeting the ASU raised the inclusion of the policy in the proposed 2009 Agreement. Mr Ferrier stated that he said words to the effect:
“It could be incorporated into the agreement but it would need to be at 4 weeks per year of service and 52 weeks maximum payment for all.” 37
[95] The ASU however was seeking the entitlements that existed before the March 2008 changes.
[96] On 8 September 2009 Mr Ferrier prepared a document for Sydney Water staff entitled “Sydney Water Negotiations: ASU Claims and Responses”. An excerpt of this document was included in Mr Ferrier’s statement. It summarises the parties’ positions regarding redundancy as they were at that time. 38
[97] In September 2009 Sydney Water was reluctant to include the Redundancy and Redeployment policy as a part of the proposed Agreement. Sydney Water regarded the existing policy as too generous and wanted to be able to renegotiate the policy in future. This was explained to the ASU and APESMA in the meetings in August 2009.
[98] On 14 September 2009 a meeting took place between the ASU, APESMA and Sydney Water. Mr Ferrier’s evidence was that he stated that Sydney Water agreed that the policy could be included as a part of the Agreement, but only after further amendments were made.
[99] On 16 September 2009 a further meeting was held. Mr Ferrier testified that Sydney Water agreed at that meeting to include the Redundancy and Redeployment policy as part of the 2009 Agreement but he explicitly stated at the meeting that he was "... happy to incorporate the policy into the agreement but only for the life of this agreement”. The parties were still in dispute about the amount of maximum payment to be made upon redundancy. He said he emphasised the word “but”.
(My emphasis)
[100] Mr Ferrier acknowledges that he did not on this occasion use the words “the nominal life of the agreement”. His evidence was:
“91. I acknowledge that I never used the words ‘nominal life of the agreement’ during our discussion on 16 September 2009, as I did not feel the need to. In my view, given the level of this discussion, there was no doubt about what I meant. I believed that limiting the Policy for the ‘life of the agreement’ was effectively the same as for the ‘nominal life of the agreement’. I added the qualification of ‘but for the life of this agreement’ when agreeing to incorporate the Policy: for the purpose of differentiating this clause from the rest of the clauses in the Agreement (which did not include such a limitation or qualification); and because Sydney Water did not want to be bound indefinitely not to change the terms of the then current Policy.” 39
(my emphasis)
[101] On 18 September 2009 Sydney Water sent a letter to the ASU which said with respect to redundancy:
“Subject to agreement on wording, we believe we are close to agreement on issues”. 40
[102] On 9 October 2009 the ASU told its members that Sydney Water had agreed that redundancy entitlements would be included in the Agreement. Mr Ferrier notes in his statement that at this time, the parties were still negotiating the exact wording of the policy.
[103] On 12 October 2009 a meeting was held. Mr Ferrrier’s notes state:
“Redundancy - as a schedule, whole policy”.
[104] During September and October 2009 Mr Ferrier and Mr Nick Saunders were involved in drafting the proposed Agreement.
[105] On 16 October 2009 a draft agreement was sent to the ASU and APESMA. Mr Ferrier’s evidence confirms that the 16 October draft did not include the word “nominal”. The reference was to “the life of this agreement” only. 41
[106] On 21 October 2009, Ms Arrowsmith responded by letter. The ASU was concerned that the draft did not include the whole policy as a term of the Agreement, but rather just the rates that were to be paid to an employee upon redundancy. In his evidence Mr Ferrier said that he understood Ms Arrowsmith’s concerns.
[107] Early in November 2009 Mr Ferrier and Mr Saunders worked further on drafting the Agreement. Mr Ferrier’s evidence was that the word “nominal” was inserted before “life” in clauses 6.13 and 47.4 of the Agreement “because ‘during the life of the Agreement’ might not convey the limitation we intended on the operation of the clause”.
[108] Mr Ferrier’s evidence is that Sydney Water never intended that the policy be binding after 30 June 2012. He stated that this was why the wording of the clauses was changed.
“113. It was always my understanding that Sydney Water only intended to agree, and had only agreed to the Policy being binding on it pursuant to the Agreement, up to 30 June 2012 and not afterwards. I was not aware of a different view, that is why Mr Saunders and I changed the wording so that the clauses reflected, as closely as possible, what was intended by Sydney Water when we agreed that the Policy would be incorporated into the draft enterprise agreement but only for a limited time.” 42
[109] On 10 November 2009 a draft agreement was sent to the ASU. This draft included the words “nominal life” in the relevant clauses. Mr Ferrier’s evidence is that these clauses did not change again for the remainder of the negotiation period. He conceded in his statement that the covering email sent by Mr Saunders to the ASU did not particularise each of the changes made in this draft and that the insertion of the word “nominal” was not brought to the attention of the unions.
[110] Mr Ferrier made the point that it was incumbent on all parties to carefully read the draft agreements since nearly every clause had been changed. He was not aware that the ASU was not carefully reviewing the drafts of the proposed enterprise agreement.
[111] During November Mr Ferrier and Mr Saunders made several presentations to Sydney Water staff regarding the proposed Agreement. Mr Ferrier’s evidence is that in these meetings, he said to employees words to the following effect:
“Your redundancy benefits are in this agreement but only for the duration of this agreement” or
“Your redundancy benefits are in this agreement but only for the duration of this agreement - that is 30 June 2012”.
(My emphasis)
[112] Mr Ferrier's explanation for the track changes in the 18 November 2009 draft not identifying the insertion of the word “nominal” at clause 6.13 or clause 47, is that those changes were made in the 10 November draft and were not part of the changes made between 17 and 18 November 2009.
[113] Sydney Water conducted 35 staff presentations in November 2009, with employee numbers between 10 and 12 or 60 to 70 depending on the size of the workplace. He presented the information sessions to between 1300 and 1500 employees. The first 2 presentations were conducted with Mr Saunders. The balance were conducted by one or the other. The presentations were conducted with information slides with a verbal commentary, followed by questions. Under "Other Changes" the information on the slides said "redundancy entitlements now included as a legally enforceable part of the agreement".
[114] Mr Ferrier's evidence about what he said at the meetings relating to both Agreements is set out below:
“136. I recall that at or close to the beginning of each presentation I said words to the effect:
‘The duration of the agreement is until 30 June 2012.’
In respect of redundancy I said:
‘Your redundancy benefits will be protected for the duration of the agreement - that is 30 June 2012.’
I do recall saying, as a variation to the above, in respect of redundancy:
‘Your redundancy benefits are in the agreement but only for the duration of the agreement.’
The wording I used in these meetings might have varied between the meetings, as there were so many to get through, but the above was the effect of what I said in each meeting.
I do not recall being asked questions about redundancy and redeployment, generally. Most of the questions were about pay and the new competencies framework.” 43
[115] Mr Ferrier stated that his instructions to negotiate only extended to the inclusion of Schedule 1 to the nominal life of the agreement. Mr Ferrier rejected the evidence of the applicant unions’ witnesses 44 that he had not mentioned any limitation on the duration of the application of Schedule 1 to the nominal expiry date.45 He said that the limitation was also made explicit in the 10 November draft.46
[116] Mr Ferrier does not recall the applicant unions’ objectives being expressed in the terms articulated by Ms Arrowsmith in her statement. 47 He recalls saying to Ms Arrowsmith "Many clauses may have been changed from draft to draft to reflect Sydney Water's understanding of what has been agreed."48
Conclusion
[117] The law concerning applications such as this was comprehensively reviewed in a recent decision of FWA. 49
“[72] ----- the main question for consideration is whether there is an “ambiguity or uncertainty” in the Award such as to provide a basis for its variation -----------------
[73] The general principles governing the construction of contracts have been applied to the construction of industrial instruments. In Codelfa Construction Pty Ltd v State Rail Authority of N.S.W the High Court considered the widely accepted principles for resolving ambiguity in contracts. In that case Mason J (with whom Stephen and Wilson JJ agreed) stated the rule as follows:
“The true rule is that evidence of surrounding circumstances is admissible to assist in the interpretation of the contract if the language is ambiguous or susceptible of more than one meaning. But it is not admissible to contradict the language of the contract when it has a plain meaning. Generally speaking facts existing when the contract was made will not be receivable as part of the surrounding circumstances as an aid to construction, unless they were known to both parties, although, as we have seen, if the facts are notorious knowledge of them will be presumed.”
[74] In the present case, the starting point is essentially a question of construction: to determine whether the clause has a plain meaning or contains an ambiguity. This involves a consideration of the intent - objectively ascertained - of the award-maker. It is a consideration of what is the proper meaning of the clause as distinct from the making of a judgment as a matter of arbitral discretion as to what the clause should provide.
[75] As Madgwick J said in Kucks v CSR Limited:
“It is trite that narrow or pedantic approaches to the interpretation of an award are misplaced. The search is for the meaning intended by the framer(s) of the document, bearing in mind that such framer(s) were likely of a practical bent of mind: they may well have been more concerned with expressing an intention in ways likely to have been understood in the context of the relevant industry and industrial relations environment than with legal niceties or jargon.
...
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.”
[76] The industrial purpose of an award provision is a relevant consideration in construing its meaning. However as was observed by Jessup J in Chief Commissioner of Police v Kerley:
“Care must ... be taken not to perceive a particular industrial purpose in a combination of contemporary circumstances that differs from those obtaining when the words were written. I also consider that, generally, the words used by the award maker should be the starting point for the ascertainment of his or her purpose.”
and,
“[14] While Short v FW Hercus Pty Ltd was concerned with the proper construction of a clause in an award, it is clear it is equally applicable to the construction of certified agreements as illustrated by the reliance placed upon it by the Full Court in United Firefighters’ Union of Australia in the passage set out above.
[15] In summary, the general principles governing the construction of contracts laid down by the High Court in Codelfa Construction Pty Ltd v State Rail Authority of New South Wales apply to the construction of industrial agreements. However, consistent with the approach in Kucks and Short v FW Hercus Pty Ltd, an industrial agreement must always be construed in context: the context of particular provisions within the agreement as a whole and the context in which the agreement was made including any relevant statutory or historical context. Extrinsic evidence as to the context in which the agreement was made, including the statutory and historical context, will be admissible to demonstrate the existence of ambiguity and or to resolve ambiguity.” 50
(footnotes omitted)
[118] There were issues addressed in the evidence before me concerning, amongst other things, flexibility provisions and parental leave. The key issues involve an allegation of deceitful conduct regarding the terms of the Agreement. There is insufficient material before me to deal with those allegations and, in any event, they are not sufficiently relevant to the resolution of the issue before me regarding the application of Schedule 1. I do not intend to deal with those issues.
[119] Nominal is defined in the Macquarie Dictionary as follows:
“Nominal” - 1. Being such in name only; so-called: nominal peace. 2. (of a price, consideration, etc.) named as a mere matter of form, being trifling in comparison with the actual value. 3. Of, relating to, or consisting in a name or names. 4. Grammar a. Of, relating to, or producing a noun or nouns. b. Used as or like a noun. 5. Assigned to a person by name; nominal shares of stock. 6. Containing, bearing, or giving a name or names. 7. US satisfactory; within acceptable limits, as of the launch of a spacecraft.
(my emphasis)
[120] There is no dispute about what "the nominal expiry date" means. It is the named date on which an agreement expires. When the "nominal expiry date" has passed it does not mean that an agreement has ceased to apply. An agreement continues to apply until it is terminated or replaced. 51 The use of the adjective "nominal" before the phrase "life of this agreement" might also arguably apply the same meaning to that phrase.
[121] Mr Goot submitted that "nominal expiry date" and "nominal life of the agreement" are words of limitation and should be given their full meaning.
[122] Mr Slevin pointed out that "nominal life of the agreement" and "nominal life" are not defined in the Act. He submitted that they are terms which, to give them any meaning, have to be defined by reference to extrinsic material. The words on their own do not conclusively determine the meaning.
[123] Also against Sydney Water’s interpretation is the frequently loose usage of the phrase"the life of this (or the) agreement" by parties appearingbefore FWA. The phrase "nominal life of this or the Agreement" has been used by parties appearing before me to include that period over which the life of the Agreement is extended beyond the nominal expiry date until it is either terminated or replaced.
[124] I am not aware of any decisions of either the Australian Industrial Relations Commission (AIRC) or FWA in which the meaning of the phrases "the life of this (or the) agreement" or "the nominal life of this (or the) agreement" have been specifically considered, although there have been many decisions where the expressions have been referred to, and on those occasions the phrases "nominal expiry date" and "nominal life of the agreement" appear to have been treated as interchangeable. 52
[125] Mr Goot submitted that Sydney Water's interpretation of "the life of this agreement" is strengthened by the requirement of s.186(5) of the Act that enterprise agreements specify an expiry date. I am not persuaded by that submission. The nominal expiry date may be relevant for a number of purposes but most significantly it is relevant to define in what circumstances industrial action might be protected industrial action in the context of the negotiation of the terms of a new agreement. It has almost no relevance for the period of operation of an agreement.
[126] Mr Slevin made persuasive submissions regarding the existence of ambiguity or uncertainty arising from the nomination of a nominal expiry date in the Act and other provisions affecting the period of operation of agreements.
[127] There is also an uncertainty arising from the alleged use of the phrase "the life of this Agreement" by Mr Ferrier in negotiations on 16 September 2009, the applicant union's denial that Mr Ferrier used the phrase at all and the alleged unilateral insertion of changes into the later drafts. Hearing the evidence it became apparent that the argument about ambiguity and uncertainty was not confined to the explicit meaning of the relevant provisions. The applicant unions assert that Mr Saunders and Mr Ferrier inserted the word "nominal" into the post October 2009 drafts without drawing those changes to the attention of the unions. Therefore, the agreements that went forward for approval to FWA did not accord with the agreement on the application of Schedule 1 which was reached between the parties on 16 September 2009, set out in the 16 October 2009 draft and was the basis of the "yes" vote by employees.
[128] I am satisfied and find that there is an arguable case for both the contentions of Sydney Water and the applicant unions.
[129] There was a consistent denial by all of the union negotiators who gave evidence before me that there was any mention by Mr Ferrier on 16 September 2009 or any other date, of any limitation to Schedule 1 to the life of the agreement, to 30 June 2012 or to the nominal expiry date.
[130] Mr Ferrier’s evidence of the meeting of 16 September 2009 is that he did not use the word "nominal" or the expression "nominal expiry date" as purporting to limit the operation of Schedule 1. He says that he referred to the application of Schedule 1 as being for "the life of the agreement". It is his evidence that he was intending to limit the operation of the policy, but he acknowledges that he did not use any words suggesting a limitation on the operation of policy. His evidence was that he believed that limiting the application of the policy for the life of the agreement was effectively the same as saying that he intended to limit it for the nominal life of the agreement.
[131] I prefer the evidence of the union witnesses as to what was said at the meeting of 16 September 2009. Their evidence is consistent with that of each other and their subsequent conduct is consistent with the evidence of their understanding.
[132] However, even if Mr Ferrier's version is accepted he does not say that he made any reference to the nominal expiry date or the nominal life of the agreement. Despite what he now says about his then understanding that those phrases "life of the agreement" and "nominal life of the agreement" were interchangeable, they are not the same. If Mr Ferrier thought they meant the same thing there would have been no need to use different phrases when preparing the November drafts of the agreement. Why amend the words? If Mr Ferrier wasn't convinced that they meant the same thing and therefore an ambiguity or uncertainty needed to be corrected then that was surely a matter that needed to be brought to the attention of the applicant unions. It was not a change that was appropriate to be inserted into the next draft without comment. Having decided to insert the changes into the 10 November draft, why didn't he only use the phrase "nominal expiry date" if he thought it meant the same thing as "nominal life of the agreement"? Nominal life of the agreement and nominal expiry date are not the same thing. The adjective used is the same but the subject of each phrase is different.
[133] I am satisfied and find that Mr Ferrier understood that the applicant unions’ understanding of the operation of Schedule 1 was different from his own, that is, different from the position that he says arises from the amendments inserted by him and Mr Saunders in the drafts provided after 16 October 2009. In 2012 when he explained Sydney Water's position regarding the relevant clauses 53 he only referred to the wording of the clauses that he and Mr Saunders changed. He does not refer to any conversations, common understandings or agreements. He only refers to the words of the clauses he changed. The correspondence appears predicated on Mr Ferrier’s knowledge that the applicant unions would not agree with his position and that he had to point to the clauses to justify his position. Why would he have to write to the ASU on 6 March 201254 and point out the operation of a clause about which the parties already had a common understanding?
[134] The ambit bargaining position of the applicant unions at commencement of bargaining for these Agreements was that they wanted the 2008 redundancy and redeployment change in policy reversed and all employees to have the same redundancy entitlement no matter when their employment commenced. That was not achieved but I am satisfied and find that it was the absolute minimum requirement of the applicant unions that the Redundancy and Redeployment policy set out in Schedule 1 become part and parcel of the Agreement. That was the position supported by the membership.
[135] I have considered the evidence of all the witnesses before me. I am satisfied and find that the applicant unions would not have settled for any limitation on the application of Schedule 1 to 30 June 2012.
[136] I am satisfied and find that the applicant unions did not understand that there was ever any such restriction intended to be placed on the application of Schedule 1 by Sydney Water or that that was the basis on which the Agreement was being proposed by Sydney Water.
[137] I am satisfied and find that the applicant unions did not recommend to their members that they accept the Agreements on the basis of any such limitation. They would not have recommended to the membership that they vote "yes" if they had understood that that was the basis of the agreement.
[138] I am satisfied and find that the "yes" vote occurred because of the recommendation of the applicant unions based on their understanding that Schedule 1 applied for the life of the Agreement.
[139] The behaviour of the applicant unions has been consistent with their being unaware of the changes inserted into the November draft. The ASU, as chief negotiator for the applicant unions, conducted itself at all times as if the Redundancy and Redeployment policy contained in Schedule 1 was part and parcel of the agreement and would be for the entire period of its operation, that is, for the period extending beyond the nominal expiry date to the date on which the agreement was either terminated or replaced. The ASU conveyed its understanding of the situation to its members and secured the "yes" vote on that basis.
[140] Mr Ferrier's evidence regarding his advice to employees did not satisfy me that employees would have gained any understanding that Schedule 1 only applied to 30 June 2012. His evidence was that what he told employees at the employee roadshows varied from meeting to meeting. At some of the employee meetings Mr Ferrier attended he described the period of the application of Schedule 1 as being "for the duration of the Agreement". He remembered saying "Your redundancy benefits are in the agreement but only for the duration of the agreement." His evidence that he explained the proposed limitation on the application of Schedule 1 is contradicted by other witnesses who were also at some of the meetings. I am satisfied and find that most employees would consider that the phrase "the duration of the agreement", in its ordinary industrial context, was a reference to the period of the operation of an agreement and that that is the period over which Schedule 1 would have applied. The period of the operation of an agreement is the operation of the Agreement until it is terminated or replaced.
[141] Had the Agreements contained the limitation suggested by Sydney Water, the obligation to explain that matter to employees would have been paramount. There would be no room for half-hearted, variable, inaccurate or vague explanations. An accurate script would have been necessary at all meetings.
[142] The draft agreement forwarded after the meeting on 16 October 2009 did not contain the words of limitation relied on by Sydney Water. The words of limitation inserted into the November draft were not brought to the attention of the applicant unions by Mr Saunders in any exchange with Ms McManus, Ms Boulais or Ms Arrowsmith. Mr Saunder’s letter of 16 September 2009 55 was very specific as to Sydney Water's requirements regarding redundancy and redeployment, but it did not mention any time limit on the application of Schedule 1. I accept that no advice was given to the applicant unions that Mr Ferrier and Mr Saunders intended to remove what they considered to be any ambiguities from the October draft and the insertion of the word "nominal" was not brought to the attention of the applicant unions.
[143] I understand that parties have an obligation to check that documents represent the agreed position. In this case however the October draft which represented the 16 September agreed position was checked and was correct. Subsequently, Sydney Water did not point to any change to those clauses in the later draft which affected the redundancy and redeployment position. They were not track changed. They were not highlighted. They were overlooked by the applicant unions because of the urgency of the need to have the Agreement checked before the vote and because they directed their attention and perusal to the changes identified by Mr Saunders. Ms Boulais noticed the word nominal but I was not persuaded that that amounted to knowledge by the negotiating team. Ms Boulais was a junior member of the team, her notice was cursory and superficial. She dismissed it. She did not understand it. Whether or not the applicant unions should have noticed the amendments, the fact is they didn't.
[144] The only difference of note following the October draft was whether or not the whole of the redundancy and redeployment policy was to be included in the agreement, or just the rates. That issue was resolved by the intervention of the Managing Director Ms Schott and it was confirmed that Schedule 1 was to comprise the whole policy. Ms Schott was not called to say that when she issued her e-mail to all employees, she had intended to convey an intention to limit the period of the application of the policy in Schedule 1.
[145] Had there been any sunset proposed for the application of Schedule 1, I would have expected that to be referred to in Sydney Water's own documents, the e-mail of Ms Schott and the package provided to employees for their information prior to their voting on the agreement.
[146] I am satisfied and find that an agreement between Sydney Water and the applicant unions on the inclusion of the Redundancy and Redeployment policy in the Agreement was reached on 16 September 2009. The terms of that agreement were set out in the draft of 16 October. That draft, which did not contain any reference to the nominal life of the agreement, the nominal expiry date or any other such limitation on the application of the policy, represented the agreed position between the parties and the 2009 and 2010 Agreements should be amended to represent the actual agreement as to terms as set out in the 16 October draft.
[147] Mr Slevin represented the contest between the parties in relation to these agreements as a dispute between text and context with Sydney Water having the greater weight of merit on text and the applicant unions having the greater weight of merit on context. Mr Goot submitted that the merit on text was so evident that I should not consider context. I have already rejected that position and found that both contentions are arguable. Context is in favour of the applicant unions’ position and a very important factor in my consideration of context was that I am satisfied and find that the applicant unions’ contention delivers the outcome that employees voted "yes" for and Sydney Water’s contention does not.
[148] I am satisfied and find that the Agreements are ambiguous and uncertain in relation to the period of the application of Schedule 1. However, if I am wrong and the agreements are not ambiguous, I would still be satisfied and find that the agreements are uncertain. Mirror provisions to the 2009 Agreement were inserted in the 2010 Agreement without demur, the union parties accepting that the clauses in both Agreements represented the 16 September 2009 agreement. Both the Agreements will be amended to reflect the agreement reached between the parties regarding the redundancy and redeployment on 16 September 2009 and subsequently set out in the 16 October 2009 draft. The applicant unions should provide a draft order.
SENIOR DEPUTY PRESIDENT
Appearances:
T Slevin Counsel on behalf of the applicant unions
R Goot Senior Counsel on behalf of Sydney Water
Hearing details:
2012
Sydney
June 28
1 Exhibit Sydney Water 1 - Attachment RF-62
2 Exhibit Sydney Water 1 - Attachment RF-67
3 C2012/313
4 Exhibit Applicant 14 para 9
5 Exhibit Applicant 14 para 32
6 Exhibit Sydney Water 1 Attachment RF-35
7 Exhibit Applicant 14 para 50
8 Exhibit Applicant 14 paras 39 and 40
9 Exhibit Applicant 15 para 5
10 Exhibit Applicant 15 para 5
11 Exhibit Applicant 15 para 7
12 Exhibit Applicant 15 para 8
13 Exhibit Applicant 13 para 4
14 Exhibit Applicant 13 para 8 - 9
15 Exhibit Applicant 13 para 14
16 Exhibit Applicant 13 para 21 and 24
17 Exhibit Applicant 13 para 45
18 Exhibit Applicant 13 paras 50 - 53
19 Transcript PN342
20 Exhibit Applicant 15 para 15
21 Exhibit Applicant 16 para 16
22 Exhibit Applicant 15 para 9
23 Exhibit Applicant 5 para 17
24 Exhibit Applicant 6 para 3
25 Exhibit Applicant 6 para 5
26 Exhibit Applicant 6 para 7
27 Exhibit Applicant 4 para 2
28 Exhibit Applicant 8 paras 7 and 8
29 Exhibit Applicant 9 para 2
30 Exhibit Applicant 8 paras 12 and 13
31 Exhibit Applicant 8 para 15
32 Exhibit Applicant 7 para 6
33 Exhibit Applicant 10 para 12
34 Exhibit Applicant 10 paras 14 and 15
35 Exhibit Applicant 11 para 3
36 Exhibit Applicant 11 paras 5 and 6
37 Exhibit Sydney Water 1 para 70
38 Exhibit Sydney Water 1 para 79
39 Exhibit Sydney Water 1 para 91
40 Exhibit Sydney Water 1 Annexure RF-28
41 Exhibit Sydney Water 1 para 103
42 Exhibit Sydney Water 1 para 113
43 Exhibit Sydney Water 1 para 136
44 Exhibits Applicant 14 - Ms Arrowsmith para 40, Applicant 13 - Ms McManus para 24, Applicant 5 - Mr Pugh para 12, Applicant 7 - Mr Hatter paras 7 and 17, Applicant 8 - Mr McLean para 7 and Applicant 16 - Ms Boulais para 8
45 Exhibit Sydney Water 1 paras 89 91
46 Exhibit Sydney Water 1 para 178
47 Exhibit Applicant 14
48 Exhibit Sydney Water 1 para 182
49 [2011] FWAFB 3706 Australian and International Pilots Association v Qantas Airways Limited and Jetconnect Limited - Boulton J, Drake SDP, Hampton C
50 Vice President Lawler [PR981370] 8 April 2008
51 Section 54 of the Fair Work Act 2009
52 Commissioner Lewin [N9980] - 22 April 1997; Commissioner Hampton [PR501084] - 30 September 2010
53 Exhibit Sydney Water 1B Attachment 66
54 Exhibit Sydney Water 1B Attachment 62
55 Exhibit Sydney Water 1 Attachment 27
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