Australian Workers' Union, the v Dalby Bio-Refinery Limited
[2016] FWC 1397
•2 March 2016
[2016] FWC 1397
DECISION
| Fair Work Act 2009 | |
| s.739 - Application to deal with a dispute | |
| Australian Workers' Union | |
| v | |
| Dalby Bio-Refinery Limited | |
| (C2015/5216) | |
| DEPUTY PRESIDENT SAMS | SYDNEY, 2 MARCH 2016 |
Application to deal with a dispute under a dispute settlement procedure – payment to night
shift employees – whether annualised salary comprehends night shift allowance – ‘no
disadvantage test’ – whether rates adequately compensate employees – no ambiguity or
uncertainty – words given their plain, ordinary meaning – annualised salary includes night
shift allowance – matter concluded.
[1] This decision arises from an application, pursuant to s 739 of the Fair Work Act 2009,
to have the Fair Work Commission (the ‘Commission’) deal with a dispute in accordance with
the dispute settlement procedure (cl 22) under the DBRL Enterprise Agreement 2009
[AE878199] (the ‘Agreement’). Relevantly, the Agreement was approved by Asbury C (as
Her Honour then was) in 2010. It took effect on 10 June 2010 and had a nominal expiry date
of 9 June 2014. It names the Australian Workers’ Union as being covered by the Agreement.
[2] As noted by Her Honour in the decision approving the Agreement (See: Dalby Bio-
Refineries Ltd [2010] FWAA 4162), the Agreement was made under the Fair Work
(Transitional Provisions and Consequential Amendments) Act 2009 (the ‘Transitional Act’)
and Part 2-4, Chapter 2 of the Act. One of the critical tests for the approval of the Agreement
during the ‘bridging period’ was the ‘no disadvantage test’. In undertaking this exercise, Her
Honour designated the following instruments as the relevant Awards for that purpose:
Clerical Employees Award – State 2002 [AN140067]
Engineering Award – State 2002 [AN140107]
Miscellaneous Workers Award – State 2002 [AN140180].
[2016] FWC 1397
[3] In the present dispute, the applicant is the Australian Workers’ Union and the
respondent is Dalby Bio-Refinery Limited (the ‘Company’) located at Dalby in the Darling
Downs region of Queensland. In short, the dispute concerns the interpretation of a number of
the Agreement’s provisions in the context of the Union alleging that shift employees are not
receiving the night shift allowance, in accordance with cl 45.5 of the Agreement when they
work night shift.
[4] Attempts at conciliating the dispute were made on three occasions involving both
myself and Spencer C, but settlement of the dispute remained elusive. Accordingly, on 30
October 2015, I issued directions for the filing and service of submissions and, by agreement,
have determined the matter ‘on the papers’.
Agreed Statement of Facts
[5] The parties helpfully provided an Agreed Statement of Facts, which is set out
hereunder:
‘The Applicant
1. The Australian Workers’ Union (“the AWU”) is and was at all material times:
a. an organisation registered pursuant to the Fair Work (Registered
Organisations) Act 2009 (Cth);
b. an employee organisation within the meaning of the Fair Work Act 2009
(Cth) (“the FW Act”); and
c. an industrial association within the meaning of the FW Act;
2. The AWU had at all material times members employed by Dalby Bio-Refinery
Limited (DBRL). The AWU is entitled to represent the industrial interests of some of
the employees of DBRL.
The Respondent
3. DBRL is an employer, and is a national system employer within the definition of
the FW Act.
4. DBRL was purchased by United Petroleum in 2012.
The Agreement
5. The employees of DBRL to whom this dispute relates are employed under the
DBRL Enterprise Agreement 2009 (the Agreement), attached and marked AF-1.
6. The Agreement was approved by Deputy President Asbury on 3 June 2010.
[2016] FWC 1397
7. The Agreement nominally expired on 9 June 2014.
8. The Agreement was approved with undertakings in accordance with s190 of the FW
Act.
9. The undertakings include:
“Clause 76 Hourly Wage Rates
The ordinary wage rates contained in this section do not include loadings for
the following entitlements in this Agreement:
1. Overtime as defined in clauses 38, 39 and 41 of the Agreement as hours in
excess of 76 per fortnight;
2. Allowances in clause 45 of the Agreement; and
3. Public holiday loadings in clause 58 of the Agreement.
The shift wage rates contained in this section do not include loadings for the
following entitlements in this Agreement:
1. Overtime as defined in clauses 38, 39 and 41 of the Agreement as hours in
excess of 12.5 hour shift or an average of 86 per fortnight; and
2. Allowances in clause 45 of the Agreement.”
10. Clause 39 of the Agreement states:
“39 Hours of work
…
39.4 Shift Employees are paid a loaded (all-up) hourly base rate to account
for the nature of rotating shift work. Where the shift employees’ ordinary
roster falls on Saturday, Sunday or Public Holidays they will be paid the all-
up rate.”
11. Clause 45 of the Agreement states:
“45 Allowances
…
45.4 Shift Allowance – Where an employee is engaged as a Shift Employee,
they will be paid a 15% shift allowance on top of the base rate for work
performed on night shift.
…”
[2016] FWC 1397
12. Clause 76 of the Agreement states:
“76 Hourly Wage Rates
…
76.2 Employees’ rates of pay incorporate payment in lieu of all loadings
including loadings, allowances, overtime rates, any leave entitlements, unless
otherwise stated in this Agreement.
…”
13. Clause 76 of the Agreement sets out a table showing the pay rates. The table
provides two different figures: one for the base hourly rate and one for the expected
annual salary as follows.
Classification Base Hourly Rate Expected
(excludes night shift Annual Salary loading) (include night shift loading)
14. The dispute resolution procedure is found in clause 22 of the Agreement.
15. Clause 22.5 of the Agreement provides the Fair Work Commission (the FWC) the
power to arbitrate the dispute and make a decision that is binding on the parties.
Employees to whom this dispute relates and current rate of pay
16. The employees are “Shift Employees” under the Agreement.
17. The rates set out in the table in clause 76 of the Agreement reflected the rates in
place at the date the Agreement was approved. However, these rates have been
reviewed from time to time and do not reflect the rates currently being paid.
18. Each Shift Employee is and has at all times been paid an annual salary under the
Agreement. At no time prior to the present dispute has the AWU or any of the Shift
Employees claimed that the night shift loading is payable in addition to the annual
salaries paid under the Agreement.
Proceedings
19. On 26 August 2015 the AWU made application to the FWC under s739 of the FW
Act (the application).
20. The application alleges that employees are not receiving the night shift allowance
in accordance with clause 45.4 when they work night shift.
21. A copy of the application is attached and marked AF-2.
[2016] FWC 1397
22. A telephone conference was held before Commissioner Spencer on Friday 11
September 2015.
23. Further telephone conferences were held before Deputy President Sams on 22 and
30 October 2015.
24. It was agreed between that parties that Deputy President Sams could determine the
matter on the papers and directions were issued for each party to file written
submissions.’
[6] Annexed to this decision (Annexure A) is the complete wage rates schedule found at
Schedule A of the Agreement.
SUBMISSIONS
[7] Both parties provided two sets of submissions which largely replicate their respective
positions. I have had regard to all the submissions in determining this matter.
The Union’s submissions
[8] The Union’s first submission is set out below:
‘1. Employees of Dalby Bio-Refinery Limited (DBRL) are subject to the terms of the
DBRL Enterprise Agreement 2009 (the Agreement).
2. The Agreement was approved by Deputy President Asbury on 3 June 2010 with
undertakings in accordance with s190 of the Fair Work Act 2009 (Cth) (the Act).
3. Section 190 of the Act states:
“FWA may approve an enterprise agreement with undertakings
1) This sections applies if:
a. An application for the approval of an enterprise agreement has been
made under section 185; and
b. FWA has a concern that the agreement does not meet the
requirements set out in sections 186 and 187.
2) FWA may approve the agreement under section 186 if FWA is satisfied that
an undertaking accepted by FWA under subsection (3) of this section meets the
concern.
Undertakings
3) FWA may only accept a written undertaking from one or more employers
covered by the agreement if FWA is satisfied that the effect of accepting the
undertaking is not likely to:
[2016] FWC 1397
a. Cause financial detriment to any employee covered by the
agreement; or
b. Result in substantial changes to the agreement.
…”
4. Section 191 of the Act states:
“Effect of undertakings
1) If:
a. FWA approves an enterprise agreement after accepting an
undertaking under subsection 190(3) in relation to the agreement; and
b. the agreement covers a single employer;
the undertaking is taken to be a term of the agreement, as the agreement
applies to the employer.
…”
5. Section 186 of the Act states:
“When FWA must approve as enterprise agreement – general requirements
Basic rule
1) If an application for approval of an enterprise agreement is made under
section 185, FWA must approve the agreement under this section if the
requirements set out in this section and section 187 are met.
2) FWA must be satisfied that:
a. …
d. The agreement passes the better off overall test. (emphasis added)
…”
6. Section 187 of the Act is not relevant to this matter so need not be considered.
7. By virtue of s191 of the Act the undertaking is a term of the agreement.
8. The undertaking when read together with the table on clause 76 of the Agreement
creates an ambiguity.
9. We submit that Deputy President Asbury required the undertaking in order for s186
of the Act to be satisfied. As such the undertaking takes precedence over clause 76.
10. Clause 76 purports to include payment in lieu of all loadings, including loadings,
allowances, overtime rates and any leave entitlements.
[2016] FWC 1397
11. We submit that the shift wage rates contained within clause 76 of the Agreement
do not adequately compensate employees. This is the reason that Her Honour sought
the undertakings that were provided by DBRL prior to approval of the Agreement.
12. We rely on our earlier written submissions and these additional points to submit
that the undertakings were given at the request of Her Honour to meet the BOOT prior
to approval and the night shift loading in clause 45.4 of the Agreement is payable in
addition to the rates listed in the table at clause 76 of the Agreement.’
[9] In a second submission, Mr T McKernan, for the Union, relied on the approval of the
Agreement by Asbury DP in 2010 and submitted that the Undertaking (see point 9 of para [5])
required by Her Honour, takes precedence over cl 76 of the Agreement (see points 12 and 13
of para [5]). It was said that cl 76, as applied by the Company, does not adequately
compensate night shift employees and this was the reason why the Undertaking was sought
and provided by the Company.
Company’s submissions
[10] Mr A McLean, General Counsel, outlined the Company’s submissions as follows:
‘1. At the hearing of the application on 11 September 2015, the Respondent undertook
to provide a further response to the Applicant’s contention that it is failing to pay
employees in accordance with the DBRL Enterprise Agreement 2009.
2. The controversy concerns the rates in Schedule A of the Agreement for the six listed
levels of Operations Employees. Each level, designated as O1 and O6, specifies a rate
of pay for ordinary employees (ie non-shift-employees) and then a second, higher, rate
of pay for shift employees. The rates for shift employees are clearly marked in bold
type, with an asterisk, and the final column indicates an annual rate, which is
expressed to include the night shift loading.
3. The higher annual salary for shift employees results from two factors – being the
higher number of hours ordinarily worked by shift employees, and the incusion of the
night shift loading.
4. Using the rate for employees at level O3 as an example, the hourly rate for both
categories of employees is calculated as follows:
Ordinary employees
Annual rate $40,000 Working hours per annum 52 weeks @ 38 per week = 1976 Hourly rate $40,000/1976 = $20.24 per hour Shift employees Annual rate $50,000 Working hours per annum 182.5 days per annum (ie half of 365 days, based on 4 days on and 4 days
[2016] FWC 1397
off)
Average shift: 12.25 hours (day shift
12 hours and night shift 12.5 hours)
182.5 days @ 12.25 = 2235.625
hours
Hourly rate %40,0000/2235.625 = $2237 per hour
5. A similar methodology may be followed in calculating the hourly rate of the other
classifications.
6. The result is a higher base rate for hsift employees, which is sufficient to cover the
night shift loading. There is no basis for concluding that the employees, whether
working ordinary hours or shift work, would not be better off overall by reference to
the entitlements under the relevant underlying awards.
7. In any event, these matters were issues to be taken into account at the time the
Agreement was approved by the Commission. The Agreement was, in fact, approved,
and has been applied since that time. The question which arises in the present dispute
is simply one of interpretation – is there an entitlement to the night shift loading above
the rates in bold in clause 76?
8. On the face of the Agreement, it is clear that the bold rates include the night shift
loading. The annualised rates are expressly stated to “include night shift loading”. The
base hourly rate is derived from dividing the annual rate by the expected annual hours.
The higher hourly rate for shift employees bears no other explanation than the
inclusion of the night shift loading.
9. The issue then is whether the undertakings, provided prior to the approval of the
Agreement, were intended to create an entitlement to an additional payment of the
shift loading.
10. At the time of the approval of the Agreement, Commissioner Asbury (as her
Honour then was) sought undertakings from the employer, on a range of matters raised
in the Commissioner’s letter dated 20 April 2010. A copy of that letter is attachment 1
to this submission. The letter seeks undertaking [sic] concerning the rates set out in
clause 76, concerning the “allowances in clause 45 of the Agreement”, although no
express reference is made to the shift allowance set out in clause 45.4. The
undertaking subsequently provided by the employer, on 13 May 2010, refers to the
rates in clause 76 not including the “allowances in clause 45 of the Agreement”, and
does not expressly refer to the shift allowance. The addition of shift loading on top of
rates which expressly refer to the shift allowance. The addition of shift loading on top
of rates which expressly included that loading does not seem to have been an issue in
the concerns raised by Asbury C or the undertakings that were provided.
11. With hindsight, it would perhaps have been better if the undertakings had
specifically stated that the reference in the undertaking to the “allowances in clause 45
of the Agreement” did not include the night shift loading under clause 45.4. But the
exclusion of the night shift loading is, in the context of clause 76, abundantly clear.
Clause 76 contains rates for shift employees which expressly includes the loading
[2016] FWC 1397which the AWU now seeks to be paid a second time. After five years of operation of
the Agreement, after its nominal expiry date, the union raises a point of interpretation
which is at odds with how the agreement has always been applied.
12. The present application is an attempt to create, and benefit from an ambiguity,
when no such ambiguity exists. The employer has, for the life of the Agreement, been
paying rates which expressly include the shift loading. The union is seeking to double-
dip with the payment of a loading already included in the rates paid, and the
application should be dismissed.’
[11] In a further submission, Seyfarth Shaw, lawyers for the Company, summarised the
Company’s position as follows:
‘5. The Respondent’s position, as outlined below, is that the night shift allowance
should not be paid in addition to the expected annualised salary referred to in clause 76
of the Agreement. Clause 76 set out two different types of remuneration:
(a) The “Base Rate” which represents the hourly rate payable under the
Agreement. This amount is not inclusive of the shift allowance; and
(b) The “Annualised Salary”, which is an all-in amount, inclusive of the shift
allowance. (For completeness, we note that clause 76 does not actually
prescribe the rates of the Annualised Salaries, but provides an “expected”
estimate only. This is discussed further below.)
6. For the reasons set out below, the Respondent submits that the undertaking related
to the Base Rates only. The Annualised Salary was calculated on the basis that it was
inclusive of the night shift allowance. Accordingly, the night shift allowance is
incorporated in the Annualised Salary amount and does not need to be paid in addition
to the Annualised Salary.
7. The Agreement has been in operation since 2010. At all times since that date, the
Respondent has engaged and paid its employees on the basis that the Annualised
Salary is inclusive of the night shift allowance. The employees the subject of this
dispute receive an Annualised Salary. This has not been disputed until the parties
recently commenced bargaining for a new enterprise agreement.’
[12] The submission then dealt with the authorities and principles in respect to the
interpretation of enterprise agreements. While these principles are not in dispute, I note that
the submission states, that the Acts Interpretation Act 1901 (Cth), ‘also applies to the
interpretation of enterprise agreements’. This is incorrect; See: Australasian Meat Industry
Employees’ Union v Golden Cockerel Pty Limited [2014] FWCFB 7447 (‘Golden Cockerel’)
at para [41].
[2016] FWC 1397
[13] By reference to cl 45 (a 15% shift allowance paid on top of the base rate of pay for
night shift work) and cl 39.4 (Shift employees are paid a loaded (all up) hourly base rate to
account for the nature of rotating shift work), the Company put that the Agreement
contemplates two distinct concepts for remunerating shift workers – a base rate and
annualised salary. The two concepts are reflected in the table of wage rates at cl 76. The
Company submitted that the two concepts differ in the following key aspects:
‘(a) It is not an hourly rate. It is an annualised rate.
(b) It is not an ordinary rate of pay. It expressly includes the night shift allowance.
(c) It is calculated by reference to the Base Rate required to be paid in respect of the
work being performed. The Annualised Salary has been set at a level which
incorporates the night shift allowance, as set out in the previous submissions filed for
the Respondent9 as an “all-in” amount to be paid.
(d) The “Expected Annual Salary” is not set out in clause 76 as the wage rates payable
under the Agreement. The description of this amount as being an “expected” salary
shows that clause 76 provides this detail by way of an indicative amount only. Put
another way, there was no employee who had an entitlement to an annualised salary as
payment for ordinary hours under the agreement.’
[14] It was submitted that the actual words in the Undertaking relate to ‘hourly wage rates’
(as is clear from the heading). The Undertaking was expressly given in relation to ‘ordinary
wage rates’, meaning base rates. As an annualised salary is neither an hourly or ordinary wage
rate, it is clear that the Undertaking refers to base rates of pay. This plain interpretation is
consistent with other terms in the Agreement, including cl 39.4 and cl 76.
[15] The Company further submitted that it is common practice for it to pay above the
terms of the Agreement by means of annualised salary and, in fact, it has done so, as provided
for in the Agreement. There simply can be no basis for a claim that shift work employees
have been underpaid the base rates in the Agreement. Indeed, the Union accepted as much in
an email to the Commission, dated 10 September 2015, in which it was said: ‘We agree that
the respondent is paying in accordance with the rates found in cl 76.’
[16] In response to the Union’s arguments, the Company submitted that the terms of the
Undertaking are not unclear or ambiguous. As to the employees not being appropriately
compensated by the rates in cl 76, the Company said this was incorrect because:
[2016] FWC 1397
‘(a) the undertaking for the hourly rates directed at clarifying the position on the Base
Rates in clause 76,13 not at the Annualised Salary;
(b) the correspondence with Commissioner Asbury regarding the approval
requirements for the Agreement did not refer to the Annualised Salary, but only the
Base Rates;
(c) there was no requirement for the night shift loading to be paid in addition to the
“expected” Annualised Salary in order for the Agreement to pass the “no disadvantage
test”;
(d) the terms of the Agreement (including the undertaking as to the Base Rate)
satisfied the “no-disadvantage test”; and
(e) as set out in the previous submissions, the “expected” Annualised Salary amounts
set out in clause 76 of the Agreement were sufficient to incorporate both the Base
Rates and the additional night shift allowance and to pass the “no-disadvantage test”
[footnotes omitted].’
[17] The Company put that the Union’s analysis, in which it claimed the annualised salary
was insufficient to incorporate base rates, night shift allowance and other loadings and
allowances, was flawed.
[18] In a reply submission, Mr McKernan acknowledged the principles of agreement
interpretation as identified by the Company. He put that the issue is not whether the Company
is paying the correct amounts in cl 76, but whether these amounts should also be subject to an
additional 15% loading under cl 45.4. He said that to suggest the annualised salary was an
‘estimate’ was ‘ludicrous’, as it is an expected salary.
[19] Mr McKernan said that even if the annualised salary included the night shift loading,
then cl 76.2 is incapable of being complied with, as the annualised salary does not compensate
for all loadings, allowances, overtime rates and any leave entitlements.
[20] Mr McKernan put that the words ‘includes night shift loading’ in the table at cl 76
cannot be relied on because the table includes day shift employees who never work night
shift. He added that an ‘all up rate’, as suggested by the Company, must take into account all
loadings and allowances in cl 76.2. It is not sufficient to refer only to the night shift loading
when calculating an ‘all up rate’.
[21] Mr McKernan rejected the Company’s submission that the Undertaking only related to
hourly wage rates. Clause 76 deals with both hourly wage rates and annualised salaries so the
Undertaking, must apply to both. Mr McKernan insisted that the Undertaking was given in
[2016] FWC 1397
order for the Agreement to pass the ‘no disadvantage test’ and that the Undertaking prevails
over the words in cl 76.
[22] Mr McKernan submitted that for the Company to put that the rates to be paid can be
higher than the Agreement, it must use the base rate for ordinary day workers under the
Agreement, not the Award rates.
CONSIDERATION
[23] Before turning to the principles regarding the interpretation of enterprise agreements
and their application to this matter, I intend to make one observation and two points
concerning the Union’s submissions.
[24] Firstly, I find it somewhat troubling that this dispute, concerning the correct rates of
pay for night shift employees, has been raised almost five years after the Agreement was
approved by Asbury DP in June 2010. Indeed, this application to the Commission was filed
after the Agreement’s nominal term had expired. I do not understand there to be any dispute
that for all this time and operating a 24 hour, seven day a week business, that the Company
has been applying its interpretation of the relevant clauses in the Agreement. The Union now
claims this is incorrect. There has seemingly been no expression of uncertainty; let alone any
claims of underpayment, from night shift employees until recently; although I concede this is
not necessarily determinative to the interpretation of a provision in an enterprise agreement.
[25] That said, I understand that at the time of the filing of submissions in this matter, the
parties are in the process of negotiating the terms of a new enterprise agreement. In my
opinion, should the Union have any lingering doubts about this issue, it is appropriate for it to
address its concerns in the current bargaining context.
[26] One of the Union’s key submissions was that the terms of the Undertaking should take
precedence over the terms of cl 76. With respect, I know of no authority – nor did the Union
offer any – for such a curious proposition. Moreover, there is simply no statutory foundation
for such a submission. Had there been such a foundation one might expect it to be found at s
191 of the Act, headed ‘Effect of Undertakings’. This section is expressed as follows:
191 Effect of undertakings
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(1) If:
(a) the FWC approves an enterprise agreement after accepting an undertaking
under subsection 190(3) in relation to the agreement; and
(b) the agreement covers a single employer;
the undertaking is taken to be a term of the agreement, as the agreement applies
to the employer.
(2) If:
(a) the FWC approves an enterprise agreement after accepting an undertaking
under subsection 190(3) in relation to the agreement; and
(b) the agreement covers 2 or more employers;
the undertaking is taken to be a term of the agreement, as the agreement applies
to each employer that gave the undertaking [emphasis added].
[27] The plain, ordinary meaning of the words in s 191 do not support, or even infer, that
an undertaking has a distinct or discrete, let alone preferential character, to any other term of
the Agreement. In my view, the fact that an undertaking, unquestionably becomes a term of
the Agreement, cannot clothe the undertaking with any greater or lesser standing than any
other of the Agreement’s terms. It most assuredly cannot mean that the undertaking should be
weighted any differently when interpreting the other provisions of an enterprise agreement. Of
course, that is not to say that one term of an enterprise agreement might be in direct conflict
with another term or it may be unclear or ambiguous standing alone, or by reference to
another term of the enterprise agreement. However, resolving that contest is an entirely
orthodox interpretative exercise. It does not involve a proposition that an undertaking is to be
preferred or is able to displace the other terms of an enterprise agreement. The Union’s
submission in this respect must be rejected.
[28] Mr McKernan further submitted that the rates shown in the table at ‘cl 76 do not
adequately compensate employees for the hours they are working when performing night shift
work.‘ With respect, this is not the test. Whether an enterprise agreement ‘adequately
compensates employees’ is not a consideration the Commission must, or should take into
account, when approving an enterprise agreement.
[2016] FWC 1397
[29] In this case, the relevant test is whether the enterprise agreement satisfied the No
Disadvantage Test, pursuant to the Transitional Act. Notions of adequacy, fairness or
reasonableness simply do not arise. I accept the Union did refer to the BOOT (See point 12 at
para [8]) above). However, the Union provided no cogent evidence that the BOOT (if it had
been applied), had not been met when the Deputy President approved the Agreement.
[30] In my opinion, it is not clear if the required Undertaking was sought by Her Honour in
order for her to be satisfied that the No Disadvantage Test had been met. Certainly, there is
nothing in Her Honour’s decision which expressly refers to the Undertaking as being
necessary to satisfy the No Disadvantage Test for night shift employees. It would appear to
me to be more likely to have been intended to clarify the effect of certain allowances on the
base hourly rates of pay.
[31] In any event, given that the Deputy President was satisfied that the No Disadvantage
Test had been met by reference to the three State-designated Awards, it must be presumed she
did so fully ‘alive’ to the words in the Wage Rates Table at cl 76. It is not for me to ‘second
guess’ Her Honour, let alone displace her finding that the No Disadvantage Test had been
satisfied. In any event, having regard for the Award rates of pay at the time, compared to the
terms and conditions under the Agreement, it is highly unlikely that Her Honour was wrong in
this regard.
[32] I turn now to the interpretation of the disputed clause.
[33] The Union would have me ignore altogether the words used to expressly provide that
the night shift allowances are included in the annualised salaries column in cl 76. This would
seem to be the only way the Union’s case could be sustained. However, such an approach is
misconceived and contrary to the principles of enterprise agreement interpretation.
[34] These principles have been recently set out in Golden Cockerel, a decision in which
the Full Bench set out at para [41] the following:
‘1. The [Acts Interpretation Act 1901] does not apply to the construction of an
enterprise agreement made under the [Fair Work Act 2009].
[2016] FWC 1397
2. In construing an enterprise agreement it is first necessary to determine whether an
agreement has a plain meaning or contains an ambiguity.
3. Regard may be had to evidence of surrounding circumstances to assist in
determining whether an ambiguity exists.
4. If the agreement has a plain meaning, evidence of the surrounding circumstances
will not be admitted to contradict the plain language of the agreement.
5. If the language of the agreement is ambiguous or susceptible to more than one
meaning then evidence of the surrounding circumstance will be admissible to aide the
interpretation of the agreement.
6. Admissible evidence of the surrounding circumstances is evidence of the objective
framework of fact and will include:
(a) 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;
(b) notorious facts of which knowledge is to be presumed;
(c) evidence of matters in common contemplation and constituting a common
assumption.
7. The resolution of a disputed construction of an agreement will turn on the language
of the Agreement understood having regard to its context and purpose.
8. Context might appear from:
(a) the text of the agreement viewed as a whole;
(b) the disputed provision’s place and arrangement in the agreement;
(c) the legislative context under which the agreement was made and in which it
operates.
9. Where the common intention of the parties is sought to be identified, regard is not to
be had to the subjective intentions or expectations of the parties. A common intention
is 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.
10. 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 [emphasis added].’
See also: Kucks v CSR Ltd (1996) 66 IR 182, Amcor Ltd v Construction, Forestry, Mining and
Energy Union (2005) 222 CLR 241, [2005] HCA 10 and Codelfa Construction Pty Ltd v State
Rail Authority (NSW) (1982) 149 CLR 337.
[2016] FWC 1397
[35] In my view, there can be no doubt as to the meaning of the words in cl 76 of the
Agreement. If there was any doubt (although there is none), it is utterly swept away by the
two columns, Base Hourly Rates and Annualised Salaries, which are expressly mutually
exclusive on the relevant issue of night shift allowances. When one reads the two columns
side by side, the meaning is even more glaringly self-evident. The base hourly rate excludes
night shift allowances and the annualised salary includes night shift allowances. Nothing
could be more straightforward than that.
[36] By further reference to the Undertaking, it is plain that the heading is Hourly Wage
Rates. Mr McKernan simply says that the heading was wrong and should be ignored. I
disagree. These headings confirm the exclusion in the first column in the Undertaking, which
refer to hourly rates of pay, whereas there is no reference to Annualised Salaries in the
Undertaking or the allowances in cl 45.4. Indeed, this dichotomy is reaffirmed by the words in
cl 45.4:
‘45.4 Shift Allowance – Where an employee is engaged as a Shift Employee, they will
be paid a 15% shift allowance on top of the base rate for work performed on night
shift [emphasis added].’
[37] The Union further submitted that the heading of cl 76 ‘Hourly Wage Rates’ was also a
mistake and should be disregarded. This approach is far too simplistic. To adopt an approach
which ignores words of plain, ordinary meaning would lead to error by the Commission in
interpreting the disputed clause. The correct approach is to interpret the clause by reference to
its purpose and context and within the Agreement as a whole.
[38] In my judgement, the interpretation argued for by the Union would also result in the
perverse outcome of a 15% night shift penalty being paid twice for the same inconvenience.
Putting aside the clear and unambiguous words in cl 76 of the Agreement, this cannot
possibly be the purpose or intent of the provision, nor is it likely to have been the intention of
the parties who negotiated the Agreement in 2009/2010.
[2016] FWC 1397
[39] In view of my findings above, this dispute notification filed by the Union, is resolved
and the matter is concluded.
DEPUTY PRESIDENT
Final written submissions:
For the Australian Workers’ Union: 16 November, 4 December 2015
For Dalby Bio-Refinery Limited: 30 November 2015
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[2016] FWC 1397
Annexure A
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