[2020] FWC 4359

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s 739—Dispute resolution

Australian Rail, Tram and Bus Industry Union
v
NSW Trains t/a NSW Trainlink
(C2020/441)

Rail industry
DEPUTY PRESIDENT SAMS	SYDNEY, 26 AUGUST 2020

Application to deal with a number of disputes related to the new NSW InterCity Rail Fleet – interlocutory proceedings – interpretation of enterprise agreement – principles considered – various interrelated clauses – whether NSW Trains can implement new roles for Drivers and Guards without in-principle agreement of the Union and a ballot of affected employees – whether NSW Trains’ proposal an ‘extra claim’ – whether consultation process exhausted – words in disputed clauses not ambiguous or susceptible to more than one meaning – Berri Principles applied – words must be read in context of the Agreement as a whole – Cl 12 requires formal variation of the Agreement – no variation is sought or necessary – NSW Trains’ proposal not an extra claim – Cl 12.5 is pro tanto invalid as it is repugnant to the Act’s provisions governing variations of an enterprise agreement – extensive and protracted consultation – no application to have the Commission determine merits of the disputes – answer to question in the negative – no orders made.

BACKGROUND

[1] The Fair Work Commission (the ‘Commission’) is presently superintending a number of disputes arising from the NSW Government’s purchase, through Transport for NSW, of new rail rolling stock from South Korea, to replace its InterCity rail fleet. at a cost of approximately $2.4 billion. The new fleet will be operated by NSW Trains. I shall hereafter refer to this as the ‘NSW Trains proposal’ or the ‘proposal’. The first dispute was lodged on 16 August 2018 (in matter C2018/4567) and concerned an alleged failure by NSW Trains to properly consult with the Union (the Australian Rail, Tram and Bus Industry Union or the ‘RTBU’), its delegates and members and a requirement for Union representatives to sign non-disclosure agreements. A second dispute lodged on 28 January 2020 (in matter C2020/441) arose when NSW Trains commenced discussing the classification of Drivers for the new fleet and a phasing in of changes affecting Guards in 2023. NSW Trains had sought a relisting of the first dispute and the Union responded by filing a new dispute about this subject matter. A third dispute (in matter C2020/4062) filed on 28 May 2020, related to the Union’s claim of deficiencies in the new fleet’s Operating Instruction Model (‘OIM’).

[2] All of the disputes were filed by the Union under s 739 of the Fair Work Act 2009 (the ‘Act) and seek to have the Commission deal with the disputes pursuant to the Disputes Settlement Procedure (‘DSP’) in the NSW Trains Enterprise Agreement 2018 (the ‘Agreement’) which expires on 1 May 2021. There are no jurisdictional issues going to the exercise of the Commission’s powers in arbitrating the disputes according to the vesting of such powers to the Commission at Step 4 of the DSP in the Agreement. It will be apparent that the DSP at Cl 8.2 permits disputes about a broad range of matters pertaining to the general employer/employee relationship.

[3] Although all three matters remain ‘active’ in the sense they are listed together for convenience, this decision will deal only with the interpretation of certain clauses in the Agreement as to whether or not NSW Trains can implement the necessary changes arising from the technological advances of the new fleet, as they affect Train Drivers and Train Crew who will be titled ‘Intercity Specialist Drivers’ and ‘Customer Service Guards’ respectively.

[4] At the hearing on 23 July 2020, Ms L Saunders of Counsel appeared for the Union instructed by Ms S Scully-Leaf and Ms G Morgan-Cocks, and Mr S Meehan of Counsel appeared for NSW Trains instructed by Mr T Woods, Partner, and Ms S Wescott, Senior Associate, Lander & Rogers. At the request of the parties, the hearing was conducted in person, notwithstanding the restrictions COVID-19 has meant for limited in-person hearings. Appropriate social distancing and other safety measures were applied to the courtroom procedures. I thank the parties for their cooperation in this regard.

THE EVIDENCE

[5] It is the Union’s position that on a practical level, there will be a change to the role of the Driver as demonstrated by NSW Trains’ proposal to introduce new classifications for Drivers and Guards. It is said that such changes can be introduced, but only if Cl 12 is strictly followed. Two alternative submissions were posited. In the first alternative, the Union submits that the change cannot be introduced at all, because it is an extra claim expressly barred by Cl 13 (but not Cl 12). In the second alternative, it was argued that the consultation process has not been exhausted and the process is still being followed under Cl 7.4, including by reference to maintaining the status quo until the merits of outstanding matters are arbitrated by the Commission.

[6] In support of its position, the Union relied on statements from:

• Ms Lizanne Bennett – Industrial Officer, RTBU; and

• Mr Robert Newham – Organiser and Assistant Secretary, Locomotive Division.

Objections to these statements were taken by Counsel for NSW Trains, largely on the grounds of relevance and the subjective intention of the Union negotiators (as expressed by the Union’s witnesses) when this Agreement and its antecedents were negotiated. It was said that this is irrelevant to, and does not inform the proper interpretation of the clauses in the Agreement, particularly when there is no ambiguity or uncertainty with the words used in the contested clauses. With the objections noted and with the usual caveats acknowledged, I accepted both statements into evidence. Ms Bennett and Mr Nguyen were not required for cross examination.

[7] NSW Trains relied on the statements of:

• Mr Robert Hutchinson – Workplace Relations Manager, NSW Trains; and

• Mr George Peters – Director, Network Services, NSW Trains.

Both witnesses were required for short cross examination, which I will come to shortly.

The referenced clauses in the Agreement

[8] I set out below the clauses and schedules in the Agreement relied on by both parties in the proceeding.

‘5. COVERAGE OF AGREEMENT

5.1. This Agreement shall be binding on:

(a) NSW Trains

(b) All Employees of NSW Trains and the following organisations of Employees, their branches, officers and members employed in NSW Trains:

i. Australian Municipal, Administrative, Clerical and Services Union;

ii. Australian Rail, Tram and Bus Industry Union; and

iii. Association of Professional Engineers, Scientists and Managers, Australia’

‘7. CONSULTATIVE PROCESS

7.1. Consultation will take place at two levels within the Employer's organisation:

(a) Peak Level – a regular forum that will meet at least quarterly will be established to provide consultation regarding matters which have an organisational-wide impact or implications. This forum will include representation from senior management and one nominee of each of the Union parties to this Agreement; and

(b) Local Level – shall take place with the affected Employee(s) or through local consultative committees and working parties established as and when required. Such committees include representation from local management and Employee representatives nominated or elected by the affected workforce.

7.2 Issues subject to consultation

Issues subject to consultation may include, but are not limited to the following:

(a) changes in the composition, operation, location or size of the workforce, or in the duties and skills required; the elimination or reduction of job opportunities;

(b) alterations to hours of work;

(c) the restructuring of jobs and the consequent need for retraining, training, transfer, or secondment of Employees to other work;

(d) changes to classification structures or position descriptions applying to a job or jobs; and

(e) changes to the operational structure of the Employer.

7.3 Consultative Arrangements

The Employer will consult with Employees when there is a proposed change that will impact upon the working arrangements of the Employees. Consultation shall be conducted in good faith with reasonable time for the Employees, Union(s) and their members to respond to the proposed changes.

When a change is proposed that will impact upon the working arrangements of Employees, the Employer will communicate the proposed change to the affected Employees and Employee Representatives.

(a) The Employer will provide relevant information about:

i. The proposed change;

ii. Any effects of the Employees (including workload changes); and

iii. The rationale for the proposed changes based on business needs.

(b) The Employer will meet with the affected Employees and/or their Union Representative(s) and discuss the effects of the changes on the Employee(s) concerned and measures proposed to avoid or otherwise minimise any possible adverse impact on affected Employees.

(c) The Employee(s) will be given an opportunity to provide input and discuss the proposed change with their Union Representative(s) to consider the change and respond.

(d) The Employer will respond to any Employee feedback.

(e) Where local consultative committees meet at a regular forum the meeting notice and any agenda shall be provided to representatives on that committee at least one week prior to the meeting.

(f) Where the Employer proposes the introduction of a new policy/procedure or a change to an existing policy/procedure that impact[s] on employees, the Employer shall in the first instance provide a copy to the nominated representative of each Union for review.

7.4 Unresolved Matters

Where matters cannot be resolved through the consultative process the dispute will be dealt with in accordance with the Dispute Settlement Procedure at Clause 8 of this Agreement.’

‘8. DISPUTE SETTLEMENT PROCEDURE (DSP)

8.1 The purpose of this procedure is to ensure that disputes are resolved as quickly and as close to the source of the issue as possible. This procedure requires that there is a resolution to disputes and that while the procedure is being followed, work continues normally.

8.2 This procedure shall apply to any dispute that arises about the following:

(a) matters pertaining to the relationship between the Employer and Employees (including workload matters);

(b) matters pertaining to the relationship between the Employer and the Employee organisation(s), which also pertain to the Agreement and/or the relationship between the Employer and Employees;

(d) the National Employment Standards; and

(e) the operation and application of this Agreement.

…

8.4 Any dispute between the Employer and Employee(s) or the Employee’s Representative shall be resolved according to the following steps:

…

STEP 4: If the dispute remains unresolved any party may refer the matter to the Fair Work Commission for conciliation. If conciliation does not resolve the dispute the matter shall be arbitrated by the Fair Work Commission provided that arbitration is limited to disputes that involve matters listed in sub-clause 8.2 of this procedure.’

‘12. FACILITATION OF CHANGES TO THE TERMS OF THIS AGREEMENT

The parties acknowledge that continuous improvement, the acceptance of ongoing change and commitment to safety are fundamental to success of NSW Trains. Associated with NSW Trains’ continuous improvement program and commitment to best practice, changes in technology, organisational structures and work practices will occur. The following provisions will facilitate such changes to the operation of the terms of this Agreement as specified in this clause following a ballot of affected Employees who will share the benefits of agreed changes.

12.1 Train Crew

(a) Notwithstanding the other terms of this Agreement, prior to the nominal expiry date of this Agreement, the Australian Rail, Tram and Bus Industry Union and the Employer may agree in principle to implement changes for Train Crew (as define in clause 100) (Affected Employees) to the operation of:

i. clause 24;

ii. clauses 99 to 128 of Section 4 and Schedules 4A and 4B inclusive; and

iii. the conditions of employment (as defined in clause 13.1(d)) contained within the Drivers Rostering and Working Arrangements (including the Overtime Bonus) (DRWA), Guards Rostering and Working Arrangements (GRWA), Stable Rostering Code and Drivers Depot Transfers and Roster Placement Policy / Procedure.

(b) The changes may include changes to working arrangements, conditions and payments and will be compensated for by the payment of additional remuneration.

i. an aggregate payment in lieu of currently specified payments;

ii. compensation for changes or variations to the operation of clauses and/or conditions of employment; and/or

iii. Payment in recognition of employee related cost savings delivered by changes or variations to the operation of clauses and/or conditions of employment.

(d) Where agreement in principle is reached with any classification of Affected Employees, e.g. Drivers or Guards, clause 12.5 will apply. Any clause of this Agreement or in the DRWA, GRWA, Stable Rostering Code and/or Drivers Depot Transfer and Roster Placement Policy/Procedure the operation of which is changed in accordance with this sub-clause or for which a payment is made in accordance with this sub-clause will cease to apply to Affected Employees upon commencement of an Agreement approved in accordance with sub-clause 12.5. Any additional remuneration will be paid to Affected Employees in accordance with clauses 12.5(f) and (g).

12.2 Station Staff Work Locations Agreement

Notwithstanding the other terms of this Agreement, prior to the nominal expiry date of this Agreement, the relevant Union parties to this Agreement and the Employer may agree, in principle, to implement a Station Staff Work Locations Agreement aligned with customer needs for employees employed in any of the following classifications (“Affected Employees”).

Salaried	Wages
Station Manager	Customer Service Attendant
Duty Manager	Customer Service Team Leader
Sales Account Team Leader
Salesperson
Sales Support Officer
Station Support Officer

The Station Staff Work Locations Agreement developed in accordance with this sub-clause will include the payment of additional remuneration in recognition for employee related cost savings delivered by changes to any or all of the following conditions of employment:

Subject	Clauses to be negotiated
Home/Depot Station	41

The above clause will cease to apply to Affected Employees upon commencement of the Station Staff Work Location Agreement.

Any additional remuneration will be paid to Affected Employees in accordance with clauses 12.5 (f) and (g) below.

12.3 Cleaning staff work locations Agreement

Notwithstanding the other terms of this Agreement, prior to the nominal expiry date of this Agreement, the relevant Union parties to this Agreement and the Employer may agree to implement work location arrangements aligned with customer needs for employees employed in any of the following classifications (“Affected Employees”).

Cleaning Attendant

Cleaner-in-charge

The Cleaning Staff Work Locations Agreement developed in accordance with this sub-clause may include the payment of additional remuneration in lieu of employee related cost savings delivered following changes to any or all of the following conditions of employment:

Subject	Clauses to be negotiated
Home Depot/Station	41

The above clause will cease to apply to affected employees upon commencement of the Cleaning staff work location Agreement.

Any additional remuneration will be paid in accordance with clauses 12.5 (f) and (g) below.

12.4 Consultation Process

(a) The following consultation process will apply where the Employer proposes to enter into negotiations with the relevant Union parties to this Agreement to introduce any of the items outlined in subclauses 12.1 to 12.3:

(i) When changes are proposed, the Employer will make available in writing all relevant information (including their costings) relating to the change at the commencement of negotiations. The commencement of negotiations should not be understood as acceptance by the relevant union parties of the costings provided.

(ii) The parties will negotiate in good faith.

(iii) Negotiations on facilitation proposals will commence within 18 months of the certification of this Agreement and conclude within 12 months of the initiation of negotiations, except where agreed by both parties to extend the timeframe.

(iv) Either the employer or union/s may seek to have the matter referred to an agreed mediator.

(v) An agreed mediator may be utilised by the parties in order to better facilitate negotiations about matters where agreement can’t be reached.

12.5 Voting Process

Where agreement in principle between the Employer and the relevant Union parties to this Agreement is reached relating to the introduction and terms of the change, and prior to its implementation, the following will occur:

(a) The Employer will identify any employee related costs savings as generated by the introduction of the change.

(b) The terms of any in principle agreement reached will be reduced to writing in an agreement. The agreement will specify the clauses in this Agreement that will cease to apply, any increase in remuneration and when each change is to take effect.

(c) The parties will commence a process of consultation and information sharing with Employees to provide affected Employees with an understanding of the terms of the agreement and have ready access to its terms.

(d) Following the process of consultation with Affected Employees, the agreement will only be implemented with the approval of a majority of Affected Employees. Such approval will be formed if:

(i) The Employer has provided all of the Affected Employees a reasonable opportunity to meet and discuss with their Union representatives the proposed change.

(ii) The Employer has provided each of the Affected Employees a copy of the agreement.

(iii) A vote has been conducted by ballot of all Affected Employees and a majority of Affected Employees who have voted agree to approve the making of the agreement.

(e) The agreement shall take effect on a date to be specified in the agreement. This date will be negotiated based on the lead time necessary to implement the agreed arrangements.

(f) All Affected Employees will be paid in accordance with the agreement.

(g) Any wage/salary increase paid in accordance with Clause 12 will be in addition to any pay increase payable in accordance with clause 11 of this Agreement and will be cumulative with any other wage/salary increase paid in accordance with any other applicable agreement made pursuant to Clause 12.

12.6 For the avoidance of any doubt, Employees will continue to be covered by this Agreement including the Dispute Settlement Procedure in Clause 8 and the terms of this Agreement will continue to apply to the Employee, other than those terms which cease to apply as a result of an agreement made in accordance with this clause.’

‘100. DEFINITIONS AND INTERPRETATION

…

Train Crew means the essential crew that are required to move a train and includes InterCity Drivers and Guards and Regional (Former CountryLink) Drivers.

…’

‘13. NO EXTRA CLAIMS OTHER THAN IN ACCORDANCE WITH THIS AGREEMENT

13.1. This clause is subject to the right to a variation of this Agreement in accordance with Part 2-4 Division 7 of the Fair Work Act 2009 (Cth). This Agreement covers the field. During the life of this Agreement the parties:

(a) will continue to recognise the Employer’s managerial prerogative to propose and implement change in compliance with this Agreement;

(b) except in accordance with the terms of Clause 12, shall make no extra claims for any changes in remuneration or conditions of employment;

(c) agree that where any change proposed in Clause 12 above, impacts upon Employees’ existing rates of pay and/or conditions of employment under this Agreement, then it will only be implemented in accordance with the consultation and voting process included in Clause 12 of this Agreement;

(d) for Train Crew it is recognised that “conditions of employment” includes current:

(i) depot transfer and roster placement procedures; and

(ii) rostering codes and conditions.’

‘SCHEDULE 4A

Post approval by FWC			12 months after approval			24 months after approval
Without Industry Allowance	With Industry Allowance	Without Industry Allowance	With Industry Allowance	Without Industry Allowance	With Industry Allowance
Train Crew
Driver 1 Year Trainee	$1,321.95	$1,385.25	$1,361.60	$1,426.80	$1,402.45	$1,469.60
Driver 1 Year Competent	$1,328.65	$1,391.95	$1,368.50	$1,433.70	$1,409.55	$1,476.70
Driver 2nd Year	$1,393.95	$1,457.25	$1,435.75	$1,500.95	$1,478.80	$1,545.95
Driver Thereafter	$1,427.05	$1,490.35	$1,469.85	$1,535.05	$1,513.95	$1,581.10
Driver Trainer	$1,598.90	$1,662.20	$1,646.85	$1,712.05	$1,696.25	$1,763.40
Principal Driver Intercity	$1,657.20	$1,720.50	$1,706.90	$1,772.10	$1,758.10	$1,825.25
Regional (Former CountryLink) Driver	$1,507.65	$1,570.95	$1,552.90	$1,618.10	$1,599.50	$1,666.65
Principal Regional (Former CountryLink) Driver	$1,737.75	$1,801.05	$1,789.90	$1,855.10	$1,843.60	$1,910.75
Guard 1 Year Trainee	$1,171.80	$1,235.10	$1,206.95	$1,272.15	$1,243.15	$1,310.30
Guard 1 Year Completion	$1,177.75	$1,241.05	$1,213.10	$1,278.30	$1,249.50	$1,316.65
Guard 2nd Year	$1,197.40	$1,260.70	$1,233.30	$1,298.50	$1,270.30	$1,337.45
Guard Thereafter	$1,226.40	$1,289.70	$1,263.20	$1,328.40	$1,301.10	$1,368.25
Trainer Guard	$1,400.40	$1,463.70	$1,442.40	$1,507.60	$1,485.65	$1,552.80
Principal Guard	$1,454.00	$1,517.30	$1,497.60	$1,562.80	$1,542.55	$1,609.70’

For NSW Trains

Mr Robert Hutchinson

[9] In a long and detailed statement, Mr Hutchinson set out the lengthy process of consultation with the Union, its delegates and employees since July 2016. Mr Hutchinson had been involved in many of these presentations, meetings and discussions. I shall refer to the number and scope of these discussions later.

[10] In cross examination, Mr Hutchinson acknowledged that the new trains have certain technological improvements which can operate under different models, including a Driver only model. Other models include Driver/Guard and Driver/second person. However, the new train could not be operated exactly the same as present; that is, Driver and Guard. One difference is that the new fleet has traction interlocking on the crew door, in addition to the existing fleet’s customer door traction locking. The new fleet uses CCTV for this purpose. This means the role of the guard will not remain the same because of technological changes.

[11] Mr Hutchinson agreed that a Driver only model (which is not proposed) is substantially cheaper, but the savings on the now proposed model are only marginal. Mr Hutchinson said that the current Drivers will continue to drive trains on the electric lines, but under the new proposal Drivers will be required to obtain additional competencies and accountabilities, including a higher level of responsibility for the safe operation of the trains. For this, the Drivers will be given a new job title – InterCity Specialist Driver – and a salary increase of 4%. Drivers will operate either just diesel, just electric or both diesel and electric trains, depending on where they work. It is proposed that the existing Guards on the current InterCity fleet will be made redundant, or may apply for a direct transition to the new Customer Service Guard role. In the new role, some of their duties will be subsumed by the technology. Mr Hutchinson said that as a consequence, the new position will be paid less than the existing guard position and have a different title.

[12] Mr Hutchinson said that there has been ongoing consultation with the Union about the new operating model since August 2019, with no agreement reached. Mr Hutchinson believed that in various items identified in his documentary evidence, consultation has been exhausted and concluded. He agreed the Union still disputes a number of key items.

Mr George Peters

[13] As Director, Network Services, Mr Peters manages all key operational functions, including network services. He commenced employment as a Trainee Driver in 1983. In a detailed statement, Mr Peters set out the respondent’s intercity rail operations which includes electric and diesel passenger services between Sydney and the Southern Highlands, Illawarra, Blue Mountains, Newcastle and the Hunter. He described the features of the new fleet as:

‘(a) new and better onboard technology that improves safety, such as CCTV cameras that monitor passenger body side doors, customer help points and alarms. CCTV cameras improve customer and staff safety because they will allow for the entire length of the platform to be observed during the platform departure process, including around curved platforms and in poor weather conditions. The CCTV capability means there is no requirement for staff to hang out the door during train arrival and departure to monitor the platform train interface, which can expose them to injury;

(b) customer help points differ from current operations in that calls will go directly to the Network Services Coordination Centre (NSCC), which has visibility of the whole network and can provide timely and comprehensive information about timetables, connections, etc.;

(c) enhanced customer onboard information such as screens within carriages and on exterior doors showing how full the carriage is, where available seats are and upcoming stops. There will also be modern customer friendly features such as charging points and tray tables;

(d) improved accessibility for customers with disabilities, e.g. indicators on the outside of the train that indicate where designated wheelchair spots are located, larger vestibules and less-steep stairs;

(e) Automatic Selective Door Operation (ASDO) technology which means only doors aligned with the platform will be able to be opened after the driver releases the doors at a station, e.g. doors of carriages that do not fit on a short platform will remain locked. On V-sets, all doors are released at every station and can be manually opened by customers. On OSCars, the guard must manually select the cars on which doors can open at a short platform. The manual selection has a limited set of configurations, e.g. the guard must select the rear car, rear four cars or rear six cars or all cars;

(f) improved fault diagnosis technology. NIF fault diagnosis technology will cover more train systems than other fleets. Unlike on older fleets, train faults will also be visible to the Network Services Coordination Centre (NSCC). This means that drivers on the NIF will have better "shore based" support; and

(g) access to real time information, i.e the Train Management System (TMS), which is the drivers' interface with the train system, will be able to be automatically updated with information from the NSCC about changed stopping patterns, boarding assistance information and announcements.’

Mr Peters set out the Fleet’s operating model and its impact on Driver and Guard duties.

[14] In cross examination, Mr Peters was questioned as to how it is proposed to operate the new fleet which will service the Central Coast, Newcastle and the South Coast lines. Presently, these lines are serviced by the electric fleet with a Driver/Guard configuration and assistance in some locations by station staff.

[15] Mr Peters accepted that a number of stations on the Blue Mountains line have curved platforms. In these cases, a ‘repeater’ staff member will travel on the train and position in the middle of the train, not at the extremities. Mr Peters agreed this role will be affected by the new CCTV and ASDO (‘Automatic Selective Door Opening’) technology. Mr Peters did not accept that Repeaters were on the train to protect a person from falling between the train and the gap to the platform. They are observing for hazards to ensure the train can safely depart.

[16] Although Mr Peters did not have an in-depth knowledge of the tender process, he was aware that the proposed model is for a Driver/second person and not Driver only or Driver/Guard. He was not aware the tender provided for a Driver/Guard model.

[17] Mr Peters understood that the existing Drivers will not be offered voluntary redundancy, some will continue to operate the existing electrical fleet and the others will be required to undertake training on new additional tasks and responsibilities, including managing platform departure, with a guard as a lookout. Nevertheless, there will be some shared accountability between the driver and the second person. He conceded that from time to time, the Driver will operate the train alone (i.e. an empty car running).

[18] Mr Peters said that existing Guards can opt to transition to the new role or take voluntary redundancy. The current role involving ensuring doors are locked will be automated, and this and other tasks performed now will be performed by the Driver using new technology. He believed the new fleet will be safer than the current operating model, but he could not say if it was cheaper in terms of staffing costs.

For the Union

Ms Lizanne Bennett

[19] Ms Bennett has been employed by the Union since March 2008 as a Lead Organiser and Industrial Officer. Ms Bennett referred to the introduction of the facilitation clause in the 2010 RailCorp Agreement, which was to be read in conjunction with the No Extra Claims Clause. She said the intention was to permit RailCorp (the predecessor entity to NSW Trains) to change its operations, but only where the employees could ‘veto’ the changes by a vote.

[20] Ms Bennett was the Union’s lead negotiator for the 2014 Agreement during a period where the NSW Government had imposed a public sector pay policy limiting wage increases to 2.5%, unless additional increases were offset by costs savings. In the 2014 Agreement, the facilitation clause was expanded to cover changes to staff work locations and flexible work arrangements, but again only where the majority of affected employees vote in favour. Ms Bennett believed that during negotiations for the 2018 Agreement, there was some discussion about the facilitative clause, but with some improved wording, the provision was not substantially changed from 2014.

Mr Robert Newham

[21] Before being employed by the Union in 2010, Mr Newham was a Train Driver from September 1985 with the State Rail Authority, then RailCorp. Mr Newham has been involved in the design and implementation of rolling stock, including the Waratah A and B trains.

[22] Mr Newham described the early negotiations for the operating model of the new fleet. He referred to a Memorandum of Understanding (‘MOU’) between the parties in June 2017 which ensured the fleet would be capable of three different operating modes and that any changes to entitlements would be made in accordance with Cl 12 of the Agreement.

[23] Mr Newham said that the Union has consistently opposed, on safety grounds, the operating model proposed by NSW Trains in June 2019 for a Driver and Customer Service Guard mode. Mr Newham referred to an inspection of the uncompleted train in South Korea by a number of Union delegates and Health and Safety Representatives in October 2019. The first train arrived in Australia on 23 December 2019 when testing commenced. Mr Newham attended a second ‘static’ inspection of the new trains on 12 March 2020.

[24] Mr Newham had limited involvement in the negotiations for the 2014 and 2018 Agreements, but had an understanding of the agreement reached on the facilitative clause as described by Ms Bennett.

[25] Mr Newham said that on 28 November 2019, NSW Trains issued a booklet to employees titled ‘Your Guide to the New Intercity Fleet’. Mr Newham claimed the booklet was issued without any consultation with the Union and the changes were not agreed to. After the issue was put into dispute, NSW Trains’ CEO, Mr Peter Allaway, responded to the Union, and said that these were new positions with new classifications and existing classifications and conditions would remain unchanged. Mr Newham said that on 9 April 2020, NSW Trains issued Expressions of Interest (‘EOIs’) to Drivers and Guards for the new fleet. The same day, Mr Hutchinson advised that all roles at NSW Trains will become roles on the new fleet and there was no differentiation between positions.

SUBMISSIONS

For the Union

[26] In initial written submissions, the Union posed the following question for arbitration:

‘Can NSW Trains introduce the new classifications (and related pay rates and associated changes to conditions of employment) of:

(a) Intercity Specialist Driver; or

(b) Customer Service Guard?’

Further, it sought on an order restraining NSW Trains from introducing the changes until further order of the Commission.

[27] Ms Saunders acknowledged that there was no argument with NSW Trains about the Commission’s approach to the interpretation of enterprise agreements. She commenced her analysis by reference to the scheme of the Agreement and the unusual breadth of coverage as set out in the Coverage clause (5). As the Agreement covers NSW Trains, all employees of NSW Trains and the relevant Unions, this is the first indicator it is intended to be a comprehensive document. She noted the Agreement is in two parts – a general section applying to all employees and then discrete sections providing specific entitlements for particular cohorts of employees. A further indicator is found at Cl 13 – the No Extra Claims clause, which states ‘this agreement covers the field’.

[28] In respect to the train crew, Ms Saunders said that Schedule 4A sets out the rate of pay of each listed position and governs operations staff in the Schedule. There is a broad definition of the critical train crew, namely, ‘the essential crew that are required to move a train’, without delineating particular classifications. There are then 27 substantive clauses dealing with all aspects of the employment relationship. Ms Saunders noted the Driver grades are experience-based.

[29] Turning to Cl 12 – Facilitation of Change – Ms Saunders conceded it was an unusual facilitation clause, and one not usually found as standard in most awards and agreements. She described it as providing a ‘fetter on what would otherwise be managerial prerogative’, but also opens up a process to amend agreements, without a formal variation process. The train crew changes as proposed are clearly comprehended by this clause and applies to anyone who is presently driving or guarding on a train. The specific clauses within Section 4 and Schedule 4A and changes to them, are covered by Cl 12.

[30] Ms Saunders described the process at sub-Cls 12.5 and 12.6 which provides for an agreement between the parties, to be balloted for employee approval. It ensures that despite any change, employees continue to be covered by the Agreement and its terms will continue to apply, other than those terms which cease to apply as a result of any agreement made.

[31] Ms Saunders submitted that the Union’s interpretation of Cl 12 applies to changes in employees’ pay and conditions, including restructuring their jobs. The central question is: does NSW Trains’ proposal fall within Cl 12? In answering this question, it is necessary to characterise the proposal, by looking at its practical effect in proper industrial context. One cannot put that the clause does not apply by not calling a proposal a ‘change’. In simple terms, NSW Trains says it is inserting new classifications (presumably not ‘changing’ classifications). The Union’s position is that it is changing old classifications. On either view, the proposal falls within Cl 12, because on NSW Trains’ view, Schedule 4A will no longer apply to certain train crew, where it otherwise would. It is self-evident that adding classifications alters the operation of the present comprehensive classification structure.

[32] As to the changes for Guards, Ms Saunders said that while pay will not change until 2023, their duties will be changed before this. It is therefore irrelevant the wage rates are grandfathered to 2023. If changes are proposed for both Drivers and Guards, NSW Trains can only do so under the strictures of Cl 12. It would be wrong and impractical to allow changes solely through a designation of the change as not altering the existing classifications, and designating it as a new classification.

[33] Ms Saunders submitted that the introduction of a new fleet with enhanced technological developments, requiring changes to the way jobs and work are structured, is exactly the kind of situation Cl 12 was designed to address. It would be an absurd result to characterise a proposal by very limited interpretation, to effectively rob Cl 12 of its fundamental purpose of facilitating change.

[34] In a discussion with the Bench about the effective veto of any proposal under Cl 12 if the Union/s do not agree, Ms Saunders accepted that the option for NSW Trains is to seek a vote under the variation to enterprise agreement provisions of the Act. Nevertheless, despite being an unusual clause, it has been negotiated, agreed to and signed up to with NSW Trains over a number of years.

[35] Turning to the No Extra Claims clause, Ms Saunders agreed with the approach considered in Toyota Motor Corporation Australia Limited v Marmara [2014] FCAFC 84 (‘Toyota v Marmara’). Such clauses are designed to preserve the integrity of the bargaining outcome and there is no basis to exclude new classifications from a no extra claims application which covers the field. The words used in Cl 13.1(b) could not be clearer:

‘Except in accordance with the terms of Clause 12, shall make no extra claims for any changes in remuneration or conditions of employment’.

It is unarguable that changes to rates of pay and conditions of employment, such as required by NSW Trains’ proposal, are captured by the no extra claims provision.

[36] In respect to the consultation clause (Cl 7), Ms Saunders put that this too was an unusual consultation clause, which similarly provides a restraint on the ordinary ability of an employer to introduce change unilaterally, after completed consultation. Its mandatory terms require a merits arbitration of any change after the Steps in the DSP are followed.

For NSW Trains

[37] In opening his submissions, Mr Meehan put that the gist of the proposal is that ‘Train drivers will be deployed to work on the new InterCity fleet and will be classified as Intercity Specialist Drivers’. Their role is substantially and substantively that of driving a train. Mr Meehan observed that the current classifications in Schedule 4A deal with this general title and sets no other boundaries to Train Crew and Drivers, other than yearly service references after Driver Year 2. He referred to Mr Hutchinson’s statement that at the moment, Train Drivers drive a variety of rolling stock, and what is now proposed is driving a new fleet of rolling stock, albeit with improved technology and a different OIM. When seen in this way, Mr Meehan submitted that there is no proposal, and never has been, to vary Schedule 4A to add a new classification, as none is needed. The existing generic title of ‘Driver’ covers what is proposed. There is no requirement for a new classification to affect the necessary training of existing Drivers to sign off as competent to drive the new fleet. Further, there is no requirement to vary Schedule 4A to pay the Drivers a rate higher than set out in the Schedule.

[38] In any event, Mr Meehan referred to the extensive and fulsome consultation about this training, as set out in Mr Hutchinson’s statement. There have been many, many meetings considering different operating models and detailed consultation. In respect to the proposed Customer Service Guard role, Mr Meehan said that similarly, there is no need to alter any term of the 2018 Agreement as existing Guards will be able to transition into the new role with the necessary training. While NSW Trains contends for a lower rate of pay for this role, there is no need to change Schedule 4A as the existing pay rate is preserved until 2023, well within the likely term of a new agreement and, in any event, negotiations for a new agreement are to shortly take place to address this issue.

[39] Turning to the Union’s submissions in Cl 12, Mr Meehan accepted that the Agreement is comprehensive and covers all employees of NSW Trains, with particular reference to pay rates at Schedule 4A. Mr Meehan put that the Union’s submission glossed over some important textual considerations of Cl 12, which cannot be overlooked, notably at the preamble, where these words are used:

‘The parties acknowledge that continuous improvement, the acceptance of ongoing change and commitment to safety are fundamental to the success of NSW Trains. Associated with NSW Trains’ continuous improvement program and commitment to best practice, changes in technology, organisational structures and work practices will occur. The following provisions will facilitate such changes to the operation of the terms of this Agreement as specified in this clause following a ballot of affected Employees who will share the benefits of agreed changes.’

[40] Mr Meehan submitted that the clause plainly envisages that an agreement can be reached on changes or variations to the operation of clauses and/or conditions of employment. This proposition is supported by the words in Cl 12.1(d): ‘… this sub-clause will cease to apply to Affected Employees …’ and at Cl 12.5(b) says: ‘The terms of any in principle agreement reached will be reduced to writing in an agreement. The agreement will specify the clauses in this Agreement that will cease to apply …’.

[41] Mr Meehan argued that it is difficult to imagine clearer language to establish that Cl 12 is concerned with changing the application and operation of clauses in the Agreement. When viewed in this way, and given the proposal does not require any change or variation to the Agreement, the engagement and strict compliance contended for by the Union, simply does not arise.

[42] As to the Union’s no extra claims submission, Mr Meehan put that the primary submission of NSW Trains is that the proposal is not an extra claim and secondly, if it is a claim under Cl 13(1)(b) which requires in-principle agreement with the Union (Cl 12.5(b)), it is pro tanto invalid because it would be repugnant to the provisions of the Act; namely: Part 2-4 Div 7 permitting variations of enterprise agreements during their term by agreement between the employer and its employees and requiring a statutory voting process. There is no requirement to reach agreement with the Union. Simply, the effective veto right of the Union in Cl 12 is repugnant to the Act and is pro tanto invalid; see: Toyota v Marmara at para 7, where the Full Court said:

‘The respondents contended that Toyota’s proposals of 11 and 15 November 2013 were further claims within the meaning of cl 4 of the Agreement. The primary Judge accepted that contention. From that point, Toyota advanced three main arguments against the respondents’ case that it had contravened cl 4 of the Agreement. First, it was contended that, if the Agreement were to be construed as proposed by the respondents, it would be inconsistent with, or repugnant to, the relevant provisions of the FW Act.’

and at para 74:

‘… It is necessary to commence with the proposition that, ignoring for the moment the prospect that the no further claims provision of cl 4 of the Agreement could itself be removed by variation, that provision would be invalid or void on account of inconsistency with, or repugnancy to, the Act under which the agreement was approved, and which gives it its legal efficacy.’.

[43] Mr Meehan contended that if Cl 13.1(b) has the effect of requiring any claim for change to proceed in accordance with a provision that restricts its efficacy by requiring an in principle agreement with the Union, it is unanswerable that it would be inconsistent with the Act’s provisions which enables an employer to do so directly with its employees.

[44] Mr Meehan noted that in upholding the appeal, the Full Court said at para 105:

‘We also consider that the primary Judge’s conclusion that the no further claims term in cl 4 of the Agreement is valid to the extent that it imposes restrictions on (but does not wholly exclude) Toyota and its employees having access to the provisions of Subdiv A of Div 7 cannot stand alongside a line of cases which have struck down regulations which placed pre-conditions to, or qualifications upon, the exercise of rights granted or assumed by the relevant empowering statutes.’

and at para 108:

‘… the no further claims term in cl 4 of the Agreement is to be regarded as repugnant to the FW Act because the Act itself has given detailed, and specific, attention to the matter of the conditions under which a variation to an enterprise agreement may be approved by the Commission.’

and at para 110 the Full Court concluded:

‘For the above reasons, we take the view that the operation of the no further claims provision in cl 4 in a context in which Toyota proposed no more than that the Agreement be varied under Subdiv A of Div 7 of Pt 2-4 of the FW Act was and is in conflict with the provisions of that subdivision, and pro tanto invalid. The proceeding below should have been dismissed.’

[45] Mr Meehan submitted that the Commission would conclude that NSW Trains had acquitted its consultation obligations under Cl 7, conceding that there will be ongoing consultation about some matters. However, the substantive proposal should not be impeded by a false suggestion of inadequate consultation.

[46] Mr Meehan contended that the dispute is framed in such a way as the Commission is dealing with whether Cl 12 prevents NSW Trains proceeding with its proposal. There is no application for a merits arbitration and there is nothing before the Commission which engages any unresolved matter over merit. Accordingly, if the Commission determines the dispute as NSW Trains contends, the orders sought by the Union do not arise. In essence, what is sought is an interlocutory injunction, seeking to prohibit NSW Trains doing certain things – a power not available to the Commission.

[47] In reply, Ms Saunders stressed that NSW Trains’ position has changed since the letter to the Union’s Secretary, Mr Glaasens of 4 December 2019 and the final sentences in point 1:

‘Accordingly, we propose to create new classifications that are appropriate for operating the NIF. Clause 12 does not prevent NSW TrainLink from doing this’.

[48] Ms Saunders observed the inherent dangers in allowing NSW Trains to artificially narrow disputes by asking a question. The substance of the change sought is whether NSW Trains can unilaterally and fundamentally change the work of current employees. The Union says ‘no’ for the three alternative reasons earlier developed. Ms Saunders submitted that the obvious next step is a merits arbitration, but the parties are not there yet and a further dispute may be lodged depending on the outcome of this interim process.

[49] As to the no extra claims point and the repugnancy argument, Ms Saunders put that all Toyota v Marmara does is consider the question of whether an agreement can exclude a statutory right to vary. Even if Cl 13 was invalid to that extent, the change proposed can only proceed in two ways; namely, through Cl 12 or through a statutory variation. NSW Trains cannot unilaterally do it without asking its employees on way or the other.

[50] Ms Saunders relied on the decision in Minister for Employment and Workplace Relations [2010] FWAFB 3552 which dealt with the interaction between changes and effects of change in operations and the necessity of examining what the effect is on subsisting legal rights and obligations. Ms Saunders argued that Cl 12 is not confined to terms which cease to apply; see: Cl 12(a)(iii).

[51] However, properly interpreted this change involves the classification structure no longer applying to a cohort of Drivers and Guards. In any event, the change is of such magnitude and substance, it does require a new classification; so much is evident by the redundancy of existing Guard positions. Ms Saunders contended this is not a shift in duties or alternation. It is a substantially new role with the existing job not being required to be performed by anyone; hence the offer of voluntary redundancy to Guards. Ms Saunders accepted the classification structure consists of titles; but titles in the context of the existing operating model.

CONSIDERATION

[52] The first task of the Commission is to properly characterise the dispute which the Commission is to determine in accordance with the DSP in an agreement; see: Construction, Forestry, Mining and Energy Union v Mt Arthur Coal Pty Ltd [2016] FWC 2959 at [8], where Commissioner Saunders (as the Deputy President then was) said:

‘[8] In characterising the nature of a dispute the Commission is not confined to the application filed to deal with the dispute. The entire factual background is relevant, and may be ascertained from the submissions advanced by the parties on the question of jurisdiction. Further, a dispute may evolve during proceedings in the Commission. It may therefore be necessary in some cases when ascertaining the character of a dispute to have regard to both the nature of the dispute alleged in an originating application and the factual circumstances as they evolve.’

[53] . Invariably, this task will involve the positing by the parties of an agreed question which the Commission is asked to answer, either in the affirmative or the negative, or occasionally, somewhere in between. Although the parties put different questions, as I apprehend their submissions and the characterisation of the dispute framed in that context, the question is:

Does Cl 12 of the NSW Trains Enterprise Agreement 2018 prevent NSW Trains from implementing its proposals in respect to the New InterCity Fleet, unless there is an in-principle agreement with the Union?

[54] Two ancillary questions have also emerged from the parties’ submissions:

• Is NSW Trains’ proposal an extra claim not permitted by Cl 13?

• Have the provisions of the Consultation Clause (Cl 7), requiring arbitration as to the merits of the proposal, been completed?

[55] On one view, these are interlocutory questions, as answering them does not necessarily involve any considerations as to the merits of the proposal. As Ms Saunders put, this may be a consequential step requiring the Commission’s future consideration. That said, I am prepared to approach this dispute by answering the above questions, having regard to the detailed and helpful submissions of the parties.

Relevant principles and authorities

[56] Unsurprisingly, the parties are ad idem as to the principles to be applied by the Commission when undertaking the exercise of interpreting the words in an enterprise agreement. These principles are now notoriously known as the Berri Principles which were established in Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union’ known as the Australian Manufacturing Workers Union (AMWU) v Berri Pty Limited[2017] FWCFB 3005. I set out the Berri Principles below:

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

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

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

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

2. The task of interpreting an agreement does not involve rewriting the agreement to achieve what might be regarded as a fair or just outcome. The task is always one of interpreting the agreement produced by parties.

3. The common intention of the parties is sought to be identified objectively, that is by reference to that which a reasonable person would understand by the language the parties have used to express their agreement, without regard to the subjective intentions or expectations of the parties.

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

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

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

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

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

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

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

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

12. Evidence of objective background facts will include:

(i) evidence of prior negotiations to the extent that the negotiations tend to establish objective background facts known to all parties and the subject matter of the agreement;

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

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

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

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

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

[57] The principles applying to the interpretation of an enterprise agreement were summarised by the Full Court of the Federal Court in WorkPac Pty Ltd v Skene [2018] FCAFC 131 at para 197:

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

[58] The general legal principles applicable to the interpretation of enterprise agreements are the same as those which have traditionally applied to Awards. In a judgement of the Federal Court of Australia, Rangiah J in Swissport Australia Pty Ltd v Australian Municipal Administrative Clerical and Services Union (No 3) [2019] FCA 37 provided a helpful summary by reference to the frequently cited authorities. At para 52 His Honour said:

‘The principles of construction of awards are well-settled and include the following:

(1) The canons of construction found in the Acts Interpretation Act 1901 (Cth) apply to awards of the Commission: City of Wanneroo v Australian Municipal, Administrative, Clerical and Services Union (2006) 153 IR 426 at [52]; Construction, Forestry, Mining and Energy Union (Construction and General Division) v Master Builders’ Group Training Scheme Inc (2007) 161 IR 86 at [33]; Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Excelior Pty Ltd [2013] FCA 638 at [29]; Sydney Night Patrol and Inquiry Company Limited trading as SNP Security v Pulleine [2014] FCA 385 at [26].

(2) The task of construction begins with the natural and ordinary meaning of the words used: City of Wanneroo at [53]; Kucks v CSR Limited (1996) 66 IR 182 at 184; Australian Workers’ Union v Cleanevent Australia Pty Ltd [2015] FCA 1477 at [13].

(3) An award is to be interpreted in light of its industrial context and purpose: City of Wanneroo at [53]; Zader v Truck Moves Australia Pty Ltd [2016] FCAFC 83 at [27]; Prestige Property Services Pty Ltd v Liquor, Hospitality and Miscellaneous Union (2007) 161 FCR 95 at [56] and [109]; Soliman v University of Technology, Sydney (2008) 176 IR 183 at [82]

(4) An award is also to be interpreted in light of the commercial and legislative context in which it applies: Amcor Limited v Construction, Forestry, Mining and Energy Union (2005) 222 CLR 241 at [2] and [13]; Construction, Forestry, Mining and Energy Union v John Holland Pty Ltd (2010) 186 FCR 88 at [90]; Shop Distributive and Allied Employees’ Association v Woolworths SA Pty Ltd [2011] FCAFC 67 at [14]-[18]; Zader at [27].

(5) An award “must not be interpreted in a vacuum divorced from industrial realities”: City of Wanneroo at [57]; Australian Workers’ Union v Cleanevent Australia Pty Ltd at [14].

(6) The relevant “context” to be considered in interpreting an award extends to the origins of a particular clause. However, most often the immediate context, being the clause, section or part of the award in which the words to be interpreted appear, will be the clearest guide: Short v FW Hercus Pty Limited (1993) 40 FCR 511 at 517-19.

(7) The Court should not make too much of infelicitous expression in the drafting of an award. Ultimately, as awards bind the parties on pain of pecuniary penalties, they should make sense according to the basic conventions of the English language: City of Wanneroo at [57]. Narrow or pedantic approaches to the construction task are misplaced, but a court is not free to give effect to some anteriorly derived notion of what is fair or just regardless of what has been written in the award: Kucks at 184; Excelior Pty Ltd at [30].

(8) While context and purpose of an award will be relevant, ultimately the Court’s task is to give effect to the meaning of the award as expressed in its words, objectively construed: Amcor Limited at [70], [77]–[114].’ (citations omitted)

[59] As required by the Berri Principles, the starting point for the interpretative exercise is the ordinary meaning of the words used, when read as a whole and in context. If the words are ambiguous, uncertain or susceptible to more than one meaning, resort may be had to ‘surrounding circumstances’, much of which in this case, was reflected in the evidence of Ms Bennett and Mr Newham.

[60] True it is that the Berri Principles permit resort to ‘surrounding circumstances’ to establish ambiguity, but in my view, one need not go to those matters, as I am comfortably satisfied that the words in Cl 12 have a plain meaning and are not ambiguous, uncertain or susceptible to more than one meaning, including the purported requirement to reach an in-principle agreement with the Union and a ballot of affected employees, before NSW Trains can introduce changes to the fleet as envisaged in the proposal.

[61] In my view, ascertaining the meaning of the words in Cl 12 is not only clear on their face, but their plain, ordinary meaning is informed by reference to other clauses in the Agreement, thereby satisfying the principle of establishing the meaning of words in their context and in the context of the Agreement when read as a whole. To submit that Cl 12 is unusual is, to my mind, a classic understatement. In my view, this is an effective veto – in effect allowing a Union from preventing any change of new rolling stock at all. I hasten to add that I do not attribute any such mala fide intent by this Union in this case. The Union is properly and responsibly responding appropriately to its members’ legitimate concerns.

[62] That said, I agree with Ms Saunders that the words in Cl 12 are not ambiguous, and NSW Trains must live with the clause it agreed to, which requires in-principle agreement with the Union in such circumstances. However, for a number of reasons I will come to, that is not the end of the matter.

[63] In my opinion, it is not open for the Union, on the one hand, to argue that despite Cl 12 being unusual and unorthodox, and as the words are clear and unambiguous, and NSW Trains must live with the bargain it had agreed to, but on the other hand, ignore the totality of Cl 12 and the unequivocal and unambiguous words in numerous places in the clause which demonstrates, beyond doubt, the foundational underpinning of what is required by the clause, before even getting to the in-principle requirement in Cl 12.5. It cannot be seriously doubted that the clause is predicated on any proposal having the effect of changing or altering a clause/s in the Agreement, specifically here the rates of pay and certain conditions of employment. Absent such an intention to alter or vary any clause in the Agreement to achieve a change proposal, Cl 12 cannot be relied on and has no work to do in this instance. Here, NSW Trains has not proposed, has never proposed and has no intention to seek any change to the Agreement, specifically in Schedule 4A, or the instruments referred to in Cl 12.1(a)(iii); namely, DRWA, GRWA and the Rostering and Depot Transfer Codes.

[64] Moreover, for reasons I shall come to – it does not need to. As Mr Meehan carefully set out, Cl 12 abounds in references to a proposal only being introduced by effecting a change or alteration to other clauses in the Agreement by formal variation, and not otherwise. It is not as if there are obscure words, hidden in the text of the clause.

[65] It also seems to me that the Union’s entire focus on the words ‘agreement in principle with the relevant Union’, is inconsistent with the interpretative principle that the words in a clause must be read in their context, having regard to the purpose and intent of the clause when read as a whole. To do otherwise would be to perilously stray into appellate error.

[66] Of course, as the Union contended, it may be said that a strict literal reading of the words might result in impractical industrial outcomes, and give the clause no work to do. Notwithstanding this is precisely what the Union presses upon me in respect to Cl 12.5 (a strict literal reading), this is not the point. In any event, the clause may have work to do – where a variation of the Agreement is proposed as being necessary in respect to a particular change – but not in the present circumstances by reference to the words in the context of the Agreement when read as a whole.

[67] Further, it is impermissible to interpret the words in an enterprise agreement by importing into a disputed provision, words which are not there, in order to produce a fair or just outcome; see: Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Excelior Pty Ltd [2013] FCA 638 and Berri Principle 2. Of course, the converse is true – that is interpreting a disputed clause by ignoring critical words which unarguably establish the plain ordinary meaning of the clause, is not permissible. This is what is glaringly apparent in the Union’s submissions.

[68] I am satisfied that what NSW Trains proposes, does not require resort to Cl 12. This is so, because when the Agreement is read as a whole, and what relevantly informs how the new fleet proposal is to be introduced, and why no Union agreement is required, is entirely permitted and provided for in Schedule 4A itself. Schedule 4A contains the classification titles of Driver and Guard under the heading ‘Train Crew’. ‘Train Crew’ is defined at Cl 100 as follows:

‘Train Crew means the essential crew that are required to move a train and includes InterCity Drivers and Guards and Regional (Former CountryLink) Drivers.’

[69] This definition and Schedule 4A titles are obviously generic and very broad; probably for very good reason. It may be reasonably assumed that the parties deliberately intended that such general terms (with service increments) were to address the very circumstances reflected in this matter.

[70] There is no distinction as to what ‘train’ the essential crew are required to move; be it electric, diesel, steam, drone, fuel cell/electric, other hybrid combinations, or any other type of locomotive (not yet developed). The reference in the definition to InterCity Drivers and guards and Regional Drivers, is obviously a reference to the train lines a train crew works on, as distinct to the type or kind of rolling stock (train) they are required to move (drive or guard). This is an important distinction.

[71] Indeed, drivers have traditionally driven new updated rolling stock, subject obviously to the requisite training in new and/or different competencies. In my view, the new InterCity fleet is no different to this generic context; see: Mr Hutchinson’s evidence at [106]-[114]. The Driver will still be driving and be in charge of a train, albeit a modern, technologically advanced species. Nothing alters the Drivers’ fundamental role as reflected in the definitions and classification title in Schedule 4A. The fact NSW Trains proposes to pay a higher rate of pay (4%) is irrelevant. It is entirely within managerial prerogative to do so.

[72] Further, the fact the Drivers will be required to undertake further training to ensure their competency for driving the new train, is similarly beside the point. In accordance with their letters of appointment, the terms of the Agreement and NSW Trains’ policies and procedures, Drivers, indeed all NSW Trains employees, undertake various training, on a regular basis, including for example, on legislative and regulatory changes, new rail lines, the Code of Conduct, promotional requirements, human resources and employment related issues. Such training is regular and routine and does not mean an automatic pay rise, let alone a requirement to vary the Agreement.

No Extra Claims clause

[73] It might be said that when viewed in isolation (that is, without considering context in terms of the intent and context of the Agreement overall), the NSW Trains proposal and its impact on Drivers and Guards, might be considered an extra claim. However, for reasons I have endeavoured to explain, when Cl 12 is read according to its plain meaning, as informed by Schedule 4A, and subject to consultation, there is no impediment to NSW Trains introducing the new role for Drivers and most likely the changed role for Guards (given the rates of pay for Guards on the new fleet are ‘grandfathered’ until 2023).

[74] Put another way, it is difficult to reconcile circumstances where the Driver will receive a 4% pay rise for driving the new train after obtaining the necessary competencies expected of a Driver’s usual and regular training updates, with a notion of an extra claim resulting in a detriment, as envisaged by an extra claim sought by the employer. Similarly, although I concede in the very unlikely event there is no new agreement negotiated in the next two and a half years, there is no detriment for the Guards whose rate of pay remains the same, notwithstanding their role will change where it is accepted that some existing Guard duties will no longer be required. In other words, they are not being asked to do more, just differently.

Repugnancy argument

[75] Even if I am wrong about my findings of the changes not constituting impermissible extra claims, and the requirement in Cl 12.5 for an in principle agreement with the Union is unnecessary, Mr Meehan submitted that if the proposal results in an extra claim, requiring an in principle agreement with the Union, Cl 12.5 would be pro tanto invalid because it would be repugnant to the variation of agreement provisions in the Act. Mr Meehan relied on the decision of the Full Court in Toyota v Marmara to make good this proposition.

[76] Assuming the Commission has jurisdiction to determine what, on one view, seems to be a form of declaratory relief, I consider Mr Meehan’s arguments compelling. I would conclude that the judgement in Toyota v Marmara is apposite to the terms of Cl 12, to the extent it seeks to establish a competing process for the variation of an enterprise agreement which is inconsistent with, and repugnant to Part 2-4 Div 7 of the Act, most notably the requirement for an in principle agreement with the Union which triggers a voting process of affected employees.

[77] Let me add the following observations. Like the making of an enterprise agreement, a variation of an enterprise agreement during its nominal term, requires a similar process set out in Sections 208-211:

208 Employers may request employees to approve a proposed variation of an enterprise agreement

(1) An employer covered by an enterprise agreement may request the affected employees for a proposed variation of the agreement to approve the proposed variation by voting for it.

(2) Without limiting subsection (1), the employer may request that the affected employees vote by ballot or by an electronic method.

209 When a variation of an enterprise agreement is made

Single-enterprise agreement

(1) If the affected employees of an employer, or each employer, covered by a single-enterprise agreement have been asked to approve a proposed variation under subsection 208(1), the variation is made when a majority of the affected employees who cast a valid vote approve the variation.

Multi-enterprise agreement

(2) If the affected employees of each employer covered by a multi-enterprise agreement have been asked to approve a proposed variation under subsection 208(1), the variation is made when a majority of the affected employees of each individual employer who cast a valid vote have approved the variation.

210 Application for the FWC’s approval of a variation of an enterprise agreement

Application for approval

(1) If a variation of an enterprise agreement has been made, a person covered by the agreement must apply to the FWC for approval of the variation.

Material to accompany the application

(2) The application must be accompanied by:

(a) a signed copy of the variation; and

(b) a copy of the agreement as proposed to be varied; and

When the application must be made

(3) The application must be made:

(a) within 14 days after the variation is made; or

(b) if in all the circumstances the FWC considers it fair to extend that period—within such further period as the FWC allows.

Signature requirements

(4) The regulations may prescribe requirements relating to the signing of variations of enterprise agreements.

211 When the FWC must approve a variation of an enterprise agreement

Approval of variation by the FWC

(1) If an application for the approval of a variation of an enterprise agreement is made under section 210, the FWC must approve the variation if:

(a) the FWC is satisfied that had an application been made under subsection 182(4) or section 185 for the approval of the agreement as proposed to be varied, the FWC would have been required to approve the agreement under section 186; and

(b) the FWC is satisfied that the agreement as proposed to be varied would not specify a date as its nominal expiry date which is more than 4 years after the day on which the FWC approved the agreement;

unless the FWC is satisfied that there are serious public interest grounds for not approving the variation.

Note: The FWC may approve a variation under this section with undertakings (see section 212).

Modification of approval requirements

(2) For the purposes of the FWC deciding whether it is satisfied of the matter referred to in paragraph (1)(a), the FWC must:

(a) take into account subsections (3) and (4) and any regulations made for the purposes of subsection (6); and

(b) comply with subsection (5); and

(3) The following provisions:

(a) section 180 (which deals with pre-approval steps);

(b) subsection 186(2) (which deals with the FWC’s approval of enterprise agreements);

have effect as if:

(d) references in sections 180 and 188 to the proposed enterprise agreement, or the enterprise agreement, were references to the proposed variation, or the variation, of the enterprise agreement (as the case may be); and

(e) references in those provisions to the employees employed at the time who will be covered by the proposed enterprise agreement, or the employees covered by the enterprise agreement, were references to the affected employees for the variation; and

(f) references in section 180 to subsection 181(1) were references to subsection 208(1); and

(g) the words “if the agreement is not a greenfields agreement—” in paragraph 186(2)(a) were omitted; and

(h) paragraph 186(2)(b) were omitted; and

(ha) references in paragraphs 186(2)(c) and (d) to the agreement were references to the enterprise agreement as proposed to be varied; and

(hb) subparagraph 188(a)(ii) were omitted; and

(j) the words “182(1) or (2)” in paragraph 188(b) were omitted and the words “209(1) or (2)” were substituted.

(4) Section 193 (which deals with passing the better off overall test) has effect as if:

(a) the words “that is not a greenfields agreement” in subsection (1) were omitted; and

(b) subsection (3) were omitted; and

(c) the words “the agreement” in subsection (6) were omitted and the words “the variation of the enterprise agreement” were substituted; and

(d) the reference in subsection (6) to subsection 182(4) or section 185 were a reference to section 210.

(5) For the purposes of determining whether an enterprise agreement as proposed to be varied passes the better off overall test, the FWC must disregard any individual flexibility arrangement that has been agreed to by an award covered employee and his or her employer under the flexibility term in the agreement.

Regulations may prescribe additional modifications

(6) The regulations may provide that, for the purposes of the FWC deciding whether it is satisfied of the matter referred to in paragraph (1)(a), specified provisions of this Part have effect with such modifications as are prescribed by the regulations.

[78] Neither process envisages an in-principle agreement with a Union, even if the Union is a bargaining representative for employees, or ultimately seeks to be covered by the agreement to be approved by the Commission (s 201(2)). The underpinning objective of these provisions dealing with the making and variation of enterprise agreements, is that the agreement is made when a proposed agreement or variation of an agreement is requested by the employer to be voted on by the relevant employees and approved by the Commission, when inter alia specific requirements under s 186 are satisfied.

[79] In simple terms, there is no legislative impediment to an employer putting a proposed variation to a vote of affected employees, in the face of vigorous and strident opposition from a Union, which may have even been the sole bargaining representative of the employees to be covered by it. It is instructive to set out a lengthy quote from the decision in Toyota v Marmara where the Full Court of the Federal Court of Australia said at paras 102-110:

‘102. We turn next to the critical consideration by reference to which the primary Judge decided the case in favour of the respondents. Although his Honour accepted that a term of an enterprise agreement which purported to exclude the employer and its employees completely from having access to the process of variation under Subdiv A would be repugnant and invalid, he said:

121 That is not to say however that the scheme of the FW Act has set its face against the prospect that by their agreement, parties to an enterprise agreement may impose restrictions on their capacity to agree to a variation without ousting their capacity to do so. Those restrictions may take the form of a range of required steps. A requisite period of consultation prior to a proposal for variation being pursued provides one possible example. A facility for employees to meet and consult with their union as a prerequisite step may provide another example. So long as, practically speaking, the capacity for parties to access the Subdiv A variation process is not ousted, a term imposing restrictions is not necessarily inconsistent with the FW Act.

122 It is then necessary to consider whether the terms of the no extra claims component of cl 4 foreclose the capacity of the parties to the Agreement to consensually access the Subdiv A variation process. The terms of cl 4 preclude any further claims “in relation to wages or any other terms and conditions of employment”. Those terms do not exclude the capacity of the parties to effectuate a variation to cl 4 itself including by removing it. That can be done without breaching the enterprise agreement and if it is done, the parties will have unfettered access to the Subdiv A variation process in relation to desired variations to wages or any other terms or conditions of employment.

Thus the primary Judge took the view that cl 4 had not “ousted the capacity of Toyota or its employees to access the Subdiv A variation process in order to vary wages and other terms and conditions of employment specified by the Agreement”. The clause imposed “an extra step in the process of achieving a desired variation, but [did] not foreclose access in either a technical or practical sense to the Subdiv A variation process.” His Honour held that there was, therefore, no inconsistency between the no further claims component of cl 4 and the FW Act.

103. For the purposes of considering this point, we are prepared to accept, contrary to the premise upon which the cross-appeal is based, that a claim to remove cl 4 would not be a claim “in relation to wages or any other terms and conditions of employment”, and that cl 4 would not, therefore, set up an embargo on a claim for its own removal. Nonetheless, we do not, with respect, consider that this compartment of his Honour’s reasons withstands examination.

104. At all relevant times, the no further claims element of cl 4 has been, and remains, part of the Agreement. The question which arose had to be confronted against the facts as they existed. With respect to his Honour, we do not consider that the answer to the question was to be found in an analysis of the law that would be applicable to a different set of facts. There was no proposal to remove the no further claims provision from the Agreement. Had it previously been removed, of course, the question which has occupied the court, both at first instance and on appeal, would never have arisen. However, the provision was there, and the respondents sued on it. If, as the respondents submitted and still submit, the operation of the clause was both absolute and categorical, it is no answer to Toyota’s challenge to its validity to propose that Toyota might have, in effect, arrived at the desired destination by a different route, one which involved first requesting its employees to agree to the removal of the provision itself.

105. We also consider that the primary Judge’s conclusion that the no further claims term in cl 4 of the Agreement is valid to the extent that it imposes restrictions on (but does not wholly exclude) Toyota and its employees having access to the provisions of Subdiv A of Div 7 cannot stand alongside a line of cases which have struck down regulations which placed pre-conditions to, or qualifications upon, the exercise of rights granted or assumed by the relevant empowering statutes. The principle here, on a reading of the cases, is that the setting up of such a pre-condition or qualification gives rise to repugnancy no less than the imposition of a complete prohibition. This principle has to do with the quality of the inconsistency and is not, in our view, applicable only to statutes which use the “not inconsistent with” formula, the “necessary or convenient” formula, or both.

106. In Wells v Finnerty (1910) 12 WALR 41, it was held that a regulation imposing a requirement to register, within a stated period, a charge or lien which arose under a provision of the relevant empowering statute, and for the charge or lien to lapse if not registered within that period, was beyond power. The case of Inre The Metropolitan Abattoirs Acts 1908-1930 [1932] SASR 184 concerned a regulation which required any person who brought meat of a certain description into a particular area to obtain a permit. The empowering statute had dealt with the subject of the sale of meat within the area, but had not required a permit for merely bringing meat into the area. It was held in the Full Court that the regulation was beyond power, Piper J (with the concurrence of Murray CJ) stating ([1932] SASR at 193-194):

It cannot be said that any of the sections now referred to shews any object or purpose justifying interference by regulation with conduct which the Act leaves perfectly lawful – the mere transport of meat into the area, it not being carried “for delivery on sale” and not being exposed for sale, or in possession of a person apparently for the purpose of sale for human consumption.

107. We have mentioned these cases specifically because they were not complicated by the presence of either of the now conventional formulae to which we have referred. However, as mentioned above, we do not think that the presence of any such formula affects the principle involved in this aspect of the present case. For cases which did involve a formula of the now conventional kind, we refer to Ex parte Lawes [1908] SALR 130, to IRA, L & AC Berk, Ltd v The Commonwealth (1930) 30 SR (NSW) 119 and to R v Commissioner of Patents; Ex parte Martin (1953) 89 CLR 381.

108. Under a slightly different, but harmonious, line of authority, the no further claims term in cl 4 of the Agreement is to be regarded as repugnant to the FW Act because the Act itself has given detailed, and specific, attention to the matter of the conditions under which a variation to an enterprise agreement may be approved by the Commission. It is true, as the respondents stressed, that the making of such a variation is a much simpler undertaking than the making of an enterprise agreement in the first place. But there are many conditions specified nonetheless: see s 211. On any view, the legislature has given specific attention to the question of the conditions which should be so imposed, and to the discriminations appropriate to be made as between Divs 2, 3, 4 and 8, on the one hand, and Div 7, on the other hand. The situation is, in our view, one in which the approach articulated in Morton v Union Steamship (83 CLR at 813) and Ex p Martin (89 CLR at 406-407) should be taken.

109. In the light of the authorities to which we have referred, we do not, with respect, agree with the primary Judge that “[a] requisite period of consultation prior to a proposal for variation being pursued” is a restriction that could lawfully become part of an enterprise agreement made under Pt 2-4. Such a restriction would too closely intrude into the area governed by s 180 in its application to a proposed amendment under s 211(3) to be regarded as anything other than repugnant to the scheme of the FW Act. The no further claims term in cl 4 of the Agreement is, of course, a fortiori: as construed by his Honour, it goes further than merely to defer the taking of steps otherwise available under Div 7. Subject only to it not having been removed by a separate, anterior, process of variation, it prohibits the taking of those steps.

110. For the above reasons, we take the view that the operation of the no further claims provision in cl 4 in a context in which Toyota proposed no more than that the Agreement be varied under Subdiv A of Div 7 of Pt 2-4 of the FW Act was and is in conflict with the provisions of that subdivision, and pro tanto invalid. The proceeding below should have been dismissed.’

[80] Thus, it seems to me an unassailable proposition that any provision in an enterprise agreement, be it an extra claims clause or otherwise, which imposes a requirement for in principle agreement from the Union before a proposed variation of the Agreement is put to a vote of affected employees, is repugnant to the Act and is therefore pro tanto invalid. I accept NSW Trains’ submissions in this regard.

Consultation clause

[81] In Construction, Forestry, Maritime, Mining and Energy Union v BHP Coal Pty Ltd [2020] FWC 4322, Deputy President Asbury usefully set out the approach to be adopted in respect to consultation. At [224]-[229] Her Honour said:

‘[224] The concept of consultation in the form set out in the Model Consultation term is not new. As the Full Court of the Federal Court observed in QR Limited v Communications Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia in relation to such provisions:

“It may be said immediately that the process of consultation with which cl 36 is concerned is not to be confused with the ordinary and familiar processes of negotiation over industrial claims and counterclaims about “pay and conditions”. Clause 36 of the agreement constitutes an intrusion upon the managerial prerogative of employers; but the legitimacy of such intrusion and the importance attached to such provisions has long been recognised. More than a quarter of a century has elapsed since Murphy J said in Federated Clerks’ Union (Aust) v Victorian Employers’ Federation (1984) 154 CLR 472 at 493-494:’

‘In the history of industrial law, many matters which were within the exclusive managerial prerogative of employers have been brought within the scope of industrial regulation, by the legislature or industrial tribunals. Sometimes the former prerogative has been eliminated, for example by health and safety laws which prohibit certain practices. Sometimes it has been restricted, for example by minimum wage provisions. Various privileges which were once exclusive to the employer are now shared with employees (or their organizations).

During this generation, there has been an accelerating trend towards concentration of economic power in fewer and fewer persons. The growth of the great national corporations, their mergers and expansion into transnationals have transformed the methods of production, distribution and exchange. The power of the greatest corporations transcends that of most governments. A reaction to the submergence of the individual worker is the demand by organized workers for some share in deciding what work is to be done, by whom and when, where, and how it is to be done. The thrust of the demand is not merely the improvement in existing pay and conditions. It extends to the protection of jobs, for themselves treated as more than wage-hands – to be treated as men and women who should be informed about decisions which might materially affect their future, and to be consulted on them. It is a demand to be emancipated from the industrial serfdom which will otherwise be produced by the domination of the corporations; a demand to be treated with respect and dignity’.”

[225] In Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v QR Limited Logan J traced the history of consultation provisions in industrial instruments. In relation to the meaning to be given to consultation and the right to be consulted, his Honour observed:

“A key element of that content is that the party to be consulted be given notice of the subject upon which that party’s views are being sought before any final decision is made or course of action embarked upon. Another is that while the word always carries with it a consequential requirement for the affording of a meaningful opportunity to that party to present those views. What will constitute such an opportunity will vary according the nature and circumstances of the case. In other words, what will amount to “consultation” has about it an inherent flexibility. To elaborate further on the ordinary meaning and import of a requirement to “consult” may be to create an impression that it admits of difficulties of interpretation and understanding. It does not. Everything that it carries with it might be summed up in this way. There is a difference between saying to someone who may be affected by a proposed decision or course of action, even, perhaps, with detailed elaboration, “this is what is going to be done” and saying to that person “I’m thinking of doing this; what have you got to say about that ?”. Only in the latter case is there “consultation”.

[226] His Honour went on in that case to cite authorities where it was held that consultation:

• is never to be treated perfunctorily or as a mere formality;

• is no empty term;

• can be of very real value in enabling points of view to be put forward which can be met by modifications of a scheme and sometimes even by its withdrawal;

• is a right that is valuable and should be implemented by giving those who have the right an opportunity to be heard at a formative stage of proposals, before the mind of the executive becomes unduly fixed; and

• though a valuable right, is not a right of veto.

[227] In a later judgment in Construction, Forestry, Mining and Energy Union v BHP Coal Pty Ltd, Logan J considered the interaction between the Model Consultation Term and the Redundancy provisions in the BMA Agreement 2012. In relation to the Model Consultation Term (in the form in which it was then) and the definition of “consultation” in the 2012 Agreement (which is also found in the 2018 Agreement) his Honour said:

“In the present case, it is necessary not just to remind oneself that a person’s right to be consulted does not confer any right of veto. It is also necessary to understand that the cl 47 definition affirms what an ordinary understanding of the word, “consult” would in any event suggest, which is that the obligation to consult does not carry with it any obligation either to seek or to reach agreement on the subject for consultation. Consultation is not an exercise in collaborative decision-making. All that is necessary is that a genuine opportunity to be heard about the nominated subjects be extended to those required to be consulted before any final decision is made…. That genuine opportunity entails furnishing such information about the occasion for consultation as is reasonably necessary for the making of suggestions in respect of the subject for consultation and being receptive to any resultant suggestions. It does not mean that one cannot approach consultation with a particular outcome in mind, only that one’s mind not be unduly fixed.

…

An assertion by or on behalf of the person subject to an obligation to consult as to an absence of an unduly fixed mind is relevant but hardly conclusive as to the existence of a genuine opportunity. Whether a genuine opportunity has been extended is to be determined objectively in the circumstances of a particular case, of which such an assertion is but one.”

[228] His Honour went on in that case to observe in relation to the provision of information that:

“…a contravention of a consultation obligation is not proved by a failure to provide each and every item of information requested. What is necessary is an examination of the whole of the circumstances, including the nature and extent of information provided and not provided, so as to determine, objectively, whether the requisite genuine opportunity has been extended.”

[229] His Honour further observed that the fact that a party subject to a consultation obligation does not accept the assertions of the party being consulted, does not result in a failure to meet that obligation, stating that: “Acceptance of a proffered proposition is no part of a consultation obligation.” (citations omitted)

[82] Despite being one of the most frequently debated and controversial words in the industrial relations lexicon, a few fundamental principles emerge from the above citations. Consultation does not mean agreement, and a party is not required to abandon a strongly held position and agree to the other party’s strongly held position. However, nor does consultation just mean an exchange of information. It is not a mere formality or triviality, and a party cannot merely pay lip service to an obligation to consult. Consultation must be meaningful, open and transparent, and involve a reasonable and realistic assessment of each other’s views.

[83] That said, there is no doubt that the Consultation Process (Cl 7) is linked to the DSP at Cl 8 by Cl 7.4 which reads:

‘Unresolved Matters

Where matters cannot be resolved through the consultative process the dispute will be dealt with in accordance with the Dispute Settlement Procedure at Clause 8 of this Agreement’

[84] While not strictly necessary to the determination of this discrete dispute, Mr Meehan invited the Commission to find that NSW Trains had acquitted its obligations under the Clause 7 – Consultation – in respect to its ‘proposal for the working of the new InterCity fleet’. He relied on the spreadsheet in Mr Hutchinson’s evidence. Without setting out the details of the consultation it cannot be seriously suggested that the consultation on this proposal commencing in July 2016, has not been protracted, extremely detailed and comprehensive. It has involved literally hundreds of meetings and presentations (roadshows), involving Union officials and delegates, including consultation on train design and various modes of operation and safety considerations. Delegates have been released to study proposals, meet with management and communicate with members. There have been updates and communications with employees and a number of Commission proceedings. Hundreds of documents have been put and exchanged between the parties, including a MOU in May 2017. Moreover, the Union has made representations to Government to seek assurances about the ongoing role of the Guard (which were given). It is anticipated that this consultation will be ongoing, as the training and testing of the new fleet continues.

[85] In my view, one would be hard pressed to find a more rigorous and thorough consultative process than that which has taken place, and which is set to continue. This does not mean, however, the parties must agree on all, and every aspect of the proposal. Consultation obligations, notwithstanding Cl 12.5 (repugnant as it is) cannot go on indefinitely, or impede the orderly delivery and introduction of a new improved InterCity fleet to benefit the travelling public.

[86] As I said earlier, this decision may be characterised as an interlocutory decision and to that extent, as Ms Saunders submitted, the merits of the proposal have not been considered; let alone determined by the Commission as contemplated by Step 4 in the Consultation Clause. However, on the Union’s own submissions it has not sought an arbitration on the merits of the matter, and in fact, further proceedings are listed for hearing on 1 September and 21 September 2020, in respect to any ‘live’ issues arising under Matter C2018/4567 and the third dispute in Matter C2020/4062 going to the OIM.

[87] For the reasons herein expressed, I am not persuaded that the answer to the Union’s question (as refined by me) is ‘No’, or that the orders it seeks should be made (assuming I had jurisdiction to do so). The dispute is determined accordingly.

DEPUTY PRESIDENT

Appearances:

Ms L Saunders, of Counsel, instructed by Ms S Scully-Leaf and Ms G Morgan-Cocks, for the Union.

Mr S Meehan, of Counsel, instructed by Mr T Woods, Partner, and Ms S Wescott, Senior Associate, Lander & Rogers,for NSW Trains.

Hearing details:

2020.

Sydney:

23 July.

Printed by authority of the Commonwealth Government Printer

Australian Rail, Tram and Bus Industry Union v NSW Trains t/a NSW Trainlink

[2020] FWC 4359

26 AUGUST 2020

DECISION