Australian Workers' Union, The v Manildra Stockfeeds Manufacturing Pty Ltd & NSW Sugar Milling Co Op Ltd t/a Sunshine Sugar
[2019] FWC 1978
•4 APRIL 2019
| [2019] FWC 1978 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s 739 - Application to deal with a dispute
Australian Workers’ Union, The
v
Manildra Stockfeeds Manufacturing Pty Ltd & NSW Sugar Milling Co Op Ltd t/a Sunshine Sugar
(C2018/4343)
DEPUTY PRESIDENT SAMS | SYDNEY, 4 APRIL 2019 |
Application to have the Commission deal with a dispute arising under an enterprise agreement – sugar crushing and refining industry – meaning of the phrase ‘day or shift’ for the purposes of the payment of higher duties – principles of enterprise agreement interpretation – Berri Principles applied – disputed words have a plain, natural and ordinary meaning – higher duties to be paid for entire day or shift irrespective of whether overtime is worked – dispute determined.
INTRODUCTION
[1] On 7 August 2018, the Australian Workers’ Union (‘AWU’ or ‘the Union’) filed an application, pursuant to s 734 of the Fair Work Act 2009 (Cth) (the ‘Act’), in which it seeks to have the Fair Work Commission (the ‘Commission’) deal with a dispute under the Dispute Settlement Procedure (‘DSP’) of the Sunshine Sugar Enterprise Agreement 2017 (the ‘Agreement’ or the ‘2017 Agreement’). The application identified two discrete matters said to have been the subject of meetings with Manildra Stockfeeds Manufacturing Pty Ltd & NSW Sugar Milling Co Op Ltd t/a Sunshine Sugar (‘Sunshine Sugar’ or the ‘respondent’) and about which no agreement had been reached. The first matter concerned the Union’s request for the release of one of its delegates, at the Condong site in Queensland to attend the Union’s National Women’s Conference in Sydney on 22-23 October 2018. This matter was resolved by an urgent recommendation made by me on 16 August 2018 in The Australian Workers’ Union v Manildra Stockfeeds Manufacturing Pty Ltd & NSW Sugar Milling Co Op Ltd t/a Sunshine Sugar [2018] FWC 4833. The second matter concerned the correct interpretation of cl 22 of the Agreement dealing with Higher Duties and the circumstances in which higher duties payments are payable during an employee’s overtime. Clause 22 – Higher Duties reads:
An employee who is engaged on duties which carry a higher wage rate than the employee’s normal classification wage rate will be paid the higher rate for the day or shift.’
[2] Despite the parties’ ongoing discussions and the Commission convening a conference about the matter, the dispute was not able to be resolved. The parties filed witness statements and submissions and agreed that the interpretation of cl 22 by the Commission could be determined ‘on the papers’, in accordance with the Commission’s well known principles 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 (‘Berri’) – the ‘Berri Principles’. The Construction, Forestry, Maritime, Mining and Energy Union (the ‘CFMMEU’) which also has members affected by this decision, subsequently became involved in the proceedings and sought leave to put submissions in support of the AWU. While Sunshine Sugar later submitted the CFMMEU had no standing to be a party to the dispute, I have decided to accept its submissions. In any event, the CFMMEU’s submissions supported and largely replicated the AWU’s submissions.
BACKGROUND
[3] Sunshine Sugar, as its name suggests, operates three sugar crushing mills and a refinery in Harwood, Broadwater, Condong and Murwillumbah, in Queensland and New South Wales. It employs over 400 employees who may be permanent, fixed term, casual or seasonal workers, engaged under the Agreement. The workforce increases significantly during the crushing season in, and around May-December each year.
[4] The Agreement’s dispute settlement procedure is set out at cl 33 and permits the Commission to arbitrate at Step 5 ‘any matter between the parties about this Agreement and the NES.’ It is common ground that the Commission is able to determine this dispute about the correct application of cl 22 in the Agreement. I shall proceed to do so based on this common understanding.
SUBMISSIONS AND EVIDENCE
For the AWU
[5] Mr Sage, Industrial Officer, relied on the ‘Berri Principles’, and contended that the plain, unambiguous meaning of the words in cl 22 requires all overtime hours to be paid at the higher duties rate, if the overtime is worked continuously with a rostered shift to which cl 22 applies. In the alternative, if the clause is found to be ambiguous, the context and history of the provision further supports this interpretation. Mr Sage put that the text of the Agreement, read in context, creates an entitlement in cl 22 for an employee to receive higher duties for the entire period of the day or shift, regardless of whether the higher duties work is performed for part of the shift or day. That proposition is not limited by any express or implied words in the text and nothing in the Overtime Clause (cl 16) limits the application of cl 22. It followed, Mr Sage argued, that a ‘day or shift’ includes all hours in question, whether they are ordinary hours or overtime hours.
[6] In support of this contention, Mr Sage said that its context can be understood by having regard to the history of the provision. In this respect, the corresponding clause in the NSW Sugar Industry (AWU) Award 1999 (AP790767) (the ‘NSW Sugar Award’) reads:
‘An employee who is engaged during a day or shift on duties which carry a higher wage rate than the employee’s normal classification wage rate will be paid the higher rate for the day or shift.’
Further, the Sugar Industry Award 2010 [MA000087] (the ‘Modern Award’) provides at cl 26 as follows:
‘With the exception of bulk sugar terminals employees, where any person on any one day performs two or more classes of work to which a differential rate is applicable, such person, if employed for more than four hours on the class or classes of work carrying a higher rate, must be paid in respect of the whole time during which the employee works on that day at the highest rate in respect of any of such classes of work, and if employed for four hours or less on the class or classes of work which carry a higher rate, the employee must be paid for such higher rate for four hours.’
[7] Mr Sage said that the Modern Award provides for two relevant circumstances:
(a) if the higher duties are performed for less than four hours, the rate is payable only for the time the higher duties work is performed; and
(b) if the higher duties are performed for more than four hours the rate is payable ‘for the whole of the time during which the employee works on that day.’
Mr Sage opined that this means if the employees’ shift (the ‘whole time’) spans across two calendar days, the higher duties provision applies for the ‘whole’ of the shift across both days.
[8] Mr Sage noted that neither the Modern Award, nor cl 22 of the Agreement makes any distinction between ordinary or overtime hours.
[9] Mr Sage further submitted that the clause in the relevant Modern Award tends to indicate that the objective intention of the parties needs to reflect the industry standard and the text of the Agreement. There is no limitation of its beneficial effect to rostered hours, particularly in circumstances where it would be contrary to the Modern Award.
[10] Although accepting that the words of the current Agreement cannot be altered by reliance on the words in previous Agreements, Mr Sage noted the following aspirational clause in the Sunshine Sugar Enterprise Agreement 2015-2017 [AE422800] (the ‘2015 Agreement’) which dealt with ‘Rationalisation’:
‘In developing this Enterprise Agreement, the bargaining parties have attempted to incorporate all relevant conditions of employment from a number of source documents. Due to this specific context it has been agreed that where a condition of employment has been left out of this Enterprise Agreement as a result of having escaped the notice of the parties, attempts will be made to have the condition incorporated into this Agreement by the processes available under Section 208 and 217 of the Fair Work Act 2009. Any person or organisation covered by the agreement can request that a left out condition be dealt with under this term and Section 208 or 217. A left out condition is a condition of employment that applied to one or more employees covered by this Enterprise Agreement immediately prior to the commencement of this Enterprise Agreement.’
[11] Mr Sage put that this clause signalled a determination of the parties to confine their bargaining to the terms and conditions therein, except where certain practices or conditions were inadvertently left out, then a mechanism was available to address the matter. This is relevant because the predecessor Sunshine Sugar Enterprise Agreement 2011 [AE888245] (the ‘2011 Agreement’) contained the following provision at cl 27:
‘An employee who is engaged during a day or shift on ordinary time duties which carry a higher wage rate than the employee’s normal classification wage rate will be paid the higher rate for the day or shift.
An employee who is engaged during a day or shift on overtime duties which carry a higher wage rate than the employee’s normal classification wage rate will be paid the higher rate for the actual overtime worked at the higher wage rate.’
[12] Mr Sage acknowledged that this clause limits the higher duties payable only to the ordinary shift unless the higher duties continues to be performed in the overtime period. However, the respondent’s reliance on this clause and the ‘Rationalisation’ clause in the 2015 Agreement, is unconvincing. The more likely view is that ‘rationalisation’ meant bringing the industrial conditions in line with the Modern Award and the NSW Sugar Award. This contention is fortified by the removal of the separate overtime rule from the 2011 Agreement, suggesting that the Union’s interpretation must reflect the intention of the removal of that limitation.
[13] The AWU relied on witness statements of two employees employed by the respondent at the Condong site as General Labourers (Dayworker) - Mr Detlef Jansen and Mr Jeremy Harry. Both employees work ordinary hours from 7am-3:30pm Monday to Friday. On occasion, they are required to undertake rigging and scaffolding duties on a higher rate of pay which is paid for the entire time they are on site that day. During the crushing period (June-December) they both regularly work Saturday overtime shifts and until recently have been paid the higher rate of pay for the entire six hour shift, if part of the shift time is engaged in rigging and scaffolding. Mr Jensen and Mr Harry both stated that irrespective of how many hours are undertaken on higher duties on overtime shifts, the higher rate was always paid for all hours worked on that shift.
[14] The Union’s Organiser, Mr Steven Carter, also provided a witness statement. It was Mr Carter’s evidence that since being responsible for representing members in the sugar mill and refinery industry since August 2002, this issue has never been raised by any delegate or member, until early July 2018, when he was informed by a site delegate of a change in practice to the application of the Higher Duties clause during overtime hours. Mr Carter approached Mr Parker, Manager of Human Resources, a number of times about the matter, but it remained unresolved.
[15] Mr Carter agreed with Mr Parker that the 2011 Agreement was a flawed document. Mr Carter understood that in 2013 the parties agreed to simplify the 2011 Agreement, including by revisiting the Mixed Functions clause. He believed that during the rationalisation process, the parties agreed to document provisions in a new agreement, according to how they were currently being applied.
[16] Discussions were held involving 20 or more meetings over 2½ years in which the Mixed Functions or Higher Duties Clause became cl 19 of the 2015 Agreement and was very different to the 2011 Agreement’s corresponding clause. Mr Clark said that numerous drafts were exchanged in which the current wording was included. It eventually was included in the final voting draft agreement put to and agreed to by the employees. He claimed there was no oversight. The omission of the 2011 Agreement wording and the changed wording was by agreement and no anomalies over the 3 years of the 2015 Agreement were ever identified.
[17] Mr Carter said he had sought the handwritten time sheets for the relevant periods, but was told they are only kept for a week or two. He believed these documents would have supported the AWU’s position.
For the CFMMEU
[18] The CFMMEU filed written submissions on 22 October 2018, and while acknowledging it had ‘come late to the proceedings’, its submissions supported the AWU’s submissions and the AWU’s construction of cl 22 of the Agreement.
[19] By also relying on the ‘Berri Principles’ the CFMMEU submitted that the words in cl 22 have a plain and unambiguous meaning. To accept the respondent’s construction would require importation of additional words, such that higher duties are only payable during the shift as it was originally rostered, and not the hours in fact worked during the remainder of the day or shift.
[20] While cl 22 is a single short sentence, the words in dispute are ‘for the day or shift’. By reliance on the Oxford Dictionary definition of a ‘day’, the respondent’s restricted limitation of the payment only to ordinary hours cannot be sustained. That definition is:
‘Each of the twenty-four-hour periods, reckoned from one midnight to the next, into which a week, month or year is divided, and corresponding to a rotation of the earth on its axis.’
[21] The CFMMEU noted that the respondent put that a day would ordinarily involve a shift. However this is incorrect as a 12 hour shift, say from 7pm-7am under cl 15.2, may extend over 2 calendar days. On the respondent’s construction the higher duties rate would only be payable for the remainder of the day (7pm-12am) and therefore cease at midnight. This cannot be a correct result. The reference to ‘day’ in cl 22 is inclusive of the remainder of the day during which higher duties are performed. It was emphasised that cl 22 does not provide that higher duties is to be paid for the duration of the shift; rather it is to be paid for the ‘day or shift’, meaning the remainder of the day or shift, whether the person works overtime beyond an original rostered period. The CFMMEU also adopted the AWU’s submissions as to textual context of the phrase ‘day or shift’ where it appears elsewhere in the Agreement, resulting in cl 22 being susceptible to only one meaning.
[22] In the alternative, if the Commission finds ambiguity, it would regard the extrinsic evidence with some caution. That evidence falls into three categories.
[23] Firstly, in respect to a reliance on past agreements, the general approach to textual analysis supports a conclusion that a change in wording of a clause, will usually denote a difference in meaning. In this case, there was a substantial change in wording from the previous Mixed Functions clause in the 2011 Agreement to its simple form in the 2015 Agreement.
[24] Secondly, taking into account evidence of past negotiations as to subjective intent of the parties should be avoided, except for a defined purpose; see: Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337 and Kucks v CSR Limited [1996] IRCA 166. The CFMMEU put that the Higher Duties clause was not ‘left out’ in the context of the ‘Rationalisation’ clause as it was given very different wording to the Mixed Functions clause. Further, Mr Parker’s subjective intention should not be taken into account. Reliance on very general comments in exchanged emails about retaining terms and conditions, but in a simplified form, falls a long way short of objective evidence of a common intended meaning.
[25] The CFMMEU noted Mr Harry’s evidence that he had always been paid the higher rate for the entire time on site on a particular day when undertaking rigging or scaffolding work. The respondent had brought no evidence of the past or present practice to support its construction of cl 22.
For the respondent
[26] The respondent relied on the ‘Berri Principles’ and submitted that cl 22 does not require higher duties to be paid for the whole period, as higher duties are limited to the rostered shift in which higher duties may be performed. The respondent put that the plain words of cl 22 do not contain any positive obligation to pay higher duties during overtime. The obligation only arises if the higher duties are actually worked during the overtime period and not otherwise.
[27] By reference to the meaning of the words ‘shift’ and ‘roster’, the employee’s rostered shift does not include overtime. This means the payment for higher duties is not necessarily for the ‘whole day’, but can apply to a lesser period being the rostered shift. Further, the reference to the word ‘day’ does not disclose a plain meaning, but must be interpreted as day work performed during ordinary hours. The Unions’ approach involves the impermissible task of rewriting the clause to obtain a fair and just outcome.
[28] In the alternative, the respondent conceded that cl 22 could be considered ambiguous, for which ‘surrounding circumstances’ can be admitted to resolve any ambiguity. Further, the words ‘day’ or ‘shift’ are capable of more than one meaning.
[29] By reference to the ‘surrounding circumstances’ or objective facts, per the ‘Berri Principles’, the respondent submitted:
(a) the parties had always interpreted the Higher Duties/Mixed Functions clauses such that higher duties is only payable during overtime, where the employee is performing those duties during the overtime period;
(b) the history of the clause clearly established how the clause was to apply; that is, the wording of cl 27 of the 2011 Agreement: see para [11] above;
(c) this wording was in early agreements from 2003 and prior to that time;
(d) there had never been any negotiations or discussions between the parties to alter the historic meaning;
(e) the change in the wording in the 2015 Agreement reflected a less than ideally drafted document, but was not intended to alter the substance of the clause;
(f) the AWU’s log of claims for the 2015 Agreement did not state or suggest that cl 27 of the 2011 Agreement should be interpreted differently;
(g) the parties agreed the substance of the 2011 Agreement was to remain the same and there was never any intention that cl 27 would be applied differently;
(h) while there were other substantial changes to the 2011 Agreement in the 2015 Agreement, this resulted in an agreement to the ‘Rationalisation’ clause (2);
(i) while this clause was removed from the current Agreement, it was a common understanding that the intent of that clause would not be abused;
(j) during the term of the 2015 Agreement, cl 23 was interpreted as it always had been; and
(k) similarly, there was no specific discussion of cl 22 during negotiations for the 2017 Agreement as to any different interpretation of the clause and there was no such claim in the AWU’s log of claims.
[30] The respondent further submitted that prior to the vote for the 2015 Agreement, employees were provided with an explanation document outlining the changes from the 2011 Agreement. The changed wording to the clause was advised, but it did not result in any significant change to the clause.
[31] As to the Unions’ reliance on the corresponding provisions in the Modern Award and the NSW Sugar Award, this was not relevant because of cl 5 of the 2017 Agreement which reads:
‘This Agreement replaces all other Agreements between the parties and shall be read and applied in its entirety without reference to any other arrangements as they exist from time to time or Industrial Agreements (whether registered or otherwise) unless specified herein. This agreement nominates the Sugar Industry Award 2010 as the appropriate award for the purpose of application of the better off overall test in the Fair Work Act 2009.
The provisions of the Sugar Industry Award 2010 (Modern Sugar Award) are incorporated into this Agreement. Where there is any inconsistency between an express provision of this Agreement and a provision in the Award, the provisions of this Agreement shall prevail to the extent of any inconsistency.
The provisions of this Agreement will be consistent with the NES and apply to employees covered by this Agreement.’
This demonstrates the Agreement was to apply differently to those instruments.
[32] The respondent relied on two statements from Ms Leanne Mulligan, Mill Accountant at the Harwood site and Mr Glenn Parker, Manager of Human Resources.
[33] Ms Mulligan has worked in payroll for Sunshine Sugar for 30 years. She confirmed the existing practice as disputed in this case; namely, higher duties is paid for all ordinary hours on a 8 hour or 12 hour shift, whether worked at the higher rate for the whole shift or not. Higher duties is not paid where overtime continues after the day or shift and are only paid for the actual time the duties are performed during overtime. Ms Mulligan said this was clearly communicated in a 1976 Memorandum which stated:
‘The phrase “whole of such day or shift” refers to an employee’s ordinary working hours. The mixed functions Clause of the award does not apply to overtime where penalty payments are prescribed.’
It was also clearly stated in the Sunshine Sugar Collective Agreement 2006, which reads:
‘4.17 Mixed Functions
An employee who is engaged during a day or shift on ordinary time duties which carry a higher wage rate than the employee’s normal classification wage rate will be paid the higher rate for the day or shift.
An employee who is engaged during a day or shift on overtime duties which carry a higher wage rate than the employee’s normal classification wage rate will be paid the higher rate for the actual overtime worked at this higher wage rate.’
This was the only change made in her 30 years of experience.
[34] Ms Mulligan said that an employee’s payments are processed based on the supervisor filling out of the timesheet. She conceded some supervisors are more ‘vigilant than others’ in correctly recording the overtime hours for which higher duties are paid.
[35] As to Mr Jansen’s and Mr Harry’s claims, Ms Mulligan noted they were relatively new employees. From her own inquiries, she was unable to establish whether they had been correctly paid or not. Ms Mulligan attached payroll records from 2011-2018 for a number of other employees which disclose the correct practice on how higher duties is paid on overtime.
[36] Mr Parker was involved in the negotiations for the 2015 Agreement and the 2017 Agreement and had some knowledge of the 2011 Agreement negotiations. Mr Parker believed that prior to his appointment and since, Sunshine’s Managers had always interpreted the relevant higher duties provisions as not being payable on overtime, unless higher duties is performed during the overtime period. This was more expressly stated in the 2011 Agreement; see: para [11] above. However, Mr Parker recalled the 2011 Agreement had not been well drafted - it had 42 pages of historic attachments, memos, etc., was hastily written and ended up being 99 pages in length, resulting in numerous errors and causing disputes.
[37] Mr Parker had been part of the discussions for the 2015 Agreement which were intended to simplify the Agreement. What followed were exchanges of draft documents and a log of claims from the Union. Mr Carter, from the AWU, as the lead Union negotiator, had said at the time:
‘I would like to clarify that the EBA simplification process is a separate task to these negotiations. The company have given us an undertaken (sic) from the commencement of that process that no current entitlements/conditions would be omitted in the re-drafting.’
[38] Mr Parker understood that the resultant ‘Rationalisation’ clause (2) see: para [10] above, was to ensure that unless a term was specifically negotiated between the parties, the 2015 Agreement would not apply in a way different to existing practice. The wording in cl 27 was amended to simplify the wording (cl 23), but was not intended to vary its effect.
[39] Mr Parker also referenced the explanation documents provided to employees before the vote and observed there was no mention of any significant change to the Mixed Functions/Higher Duties provisions. He understood that since that time, the clause continues to be interpreted as the Company intended.
[40] Mr Parker’s evidence was that a similar provision was again advanced by the AWU and Mr Carter in negotiations for the 2017 Agreement. There was no mention of the clause being interpreted differently. Mr Carter had agreed to remove the ‘Rationalisation’ clause, as it was ‘no longer required’. He had understood this was because there was no risk the Agreement could be interpreted differently to existing practice.
[41] In reply to the CFMMEU’s submissions, the respondent firstly put that the CFMMEU had no standing in relation to this dispute, because it had not followed the DSP in the Agreement. In the alternative, the respondent relied on a different Dictionary definition of the word ‘day’ as found in the Macquarie Dictionary, being:
‘1.The interval of light between two successive nights; the time between sunrise and sunset. 2. The light of day; daylight.’
Accordingly, the respondent put that the word ‘day’ is susceptible to more than one meaning.
[42] The respondent rejected the Union’s definition of a ‘shift’ in cl 22. If it had been intended to include overtime, it would have clearly said so. Words cannot be read into a disputed clause to give it a different meaning. In rejecting the CFMMEU’s argument concerning a 7pm-7am shift spanning 2 calendar days, the respondent noted it is referred to as a Night Shift, meaning higher duties is payable for the entire shift, and not a lesser period of 12 hours. This contention supports the proposition that payment for higher duties on a day shift is limited to that period only, and not any extension by reason of overtime. This contention is further supported by the same words appearing in other clauses where there is also a reference to ‘ordinary hours’, particularly in respect to the definition of Overtime in cl 6, being work ‘outside of Ordinary hours in any day or shift’.
[43] The respondent submitted that had the meaning of cl 22 been intended to include periods of overtime, it could have easily said so, and it does not. The respondent also rejected the CFMMEU’s arguments as to the intention of the Rationalisation Clause in the 2011 Agreement.
[44] The Commission should take into account Mr Parker’s evidence in this respect and Mr Carter’s statement that ‘The company have given us an undertaken (sic) from the commencement of that process that no current entitlements/conditions would be omitted in the redrafting’, as the parties’ common intention.
[45] The respondent denied ever adopting the Unions’ approach to the interpretation of cl 22. The evidence does not establish Mr Jansen or Mr Harry were paid the higher role for periods of overtime and the payslips do no demonstrate that such payments were made, one way or the other. Further, the respondent had not been able to verify the accuracy of the information in the statements of Mr Jansen and Mr Harry, despite an examination of the pay records since the commencement of their employment. Other historic payslip evidence is to the contrary. This demonstrates that at least since 1976, the relevant clause has always been limited to ordinary hours.
AWU’s reply
[46] The Union rejected the respondent’s view that the meaning of ‘day’ or ‘shift’ is limited to ‘day work performed during ordinary hours’ and ‘shift’ is limited to an employee’s rostered shift. The Union noted that the phrase ‘day or shift’ appears four times in the Agreement in the context of overtime or higher duties. These are found at:
a. Clause 6 (Definitions), which relevantly states:
Overtime means all time worked outside of Ordinary Hours on any day or shift.
b. Clause 16.2 (Payment for Working Overtime), which states:
Unless provided otherwise, for all work done outside or in excess of an employee’s ordinary hours/rostered hours on any day or shift the overtime rate of pay is time and a half for the first two hours and double time thereafter until the completion of the overtime work. For shift workers the rate for working overtime is double time.
c. Clause 16.6 (Rest Periods During Overtime), which relevantly states:
Where overtime is to be worked immediately after the completion of ordinary work on a day or shift and the period of overtime is to be more than one hour, an employee, before starting the overtime is entitled to a rest break of 20 minutes to be paid at the overtime rate.
d. Clause 22 (Higher Duties), which states:
An employee who is engaged on duties which carry a higher wage rate than the employee’s normal classification wage rate will be paid the higher rate for the day or shift.
[47] The Union contended that these provisions taken together, extend their application to work performed by both day workers and shift workers. It means any single period of work performed by a day worker or shift worker. The Union submitted that if the respondent’s construction was accepted, it would be inconsistent with the meaning of the same phrase in cls 6, 16.2 and 16.6; see: the ‘Berri Principles’ in respect to construction being ascertained by the language of the Agreement having regard to its context and purpose when viewed as a whole.
[48] If ‘surrounding circumstances’ are to be considered, the evidence of Mr Parker does not disclose a common intention of the parties during the negotiations for the 2015 Agreement. Mr Parker had confirmed a common intention to not alter the terms and conditions as a result of the rationalisation process. That provision (cl 12) accepted that it was possible there may be ‘left out conditions’. This is inconsistent with a confined reading of cl 22. In addition, as the 2017 Agreement deleted the ‘Rationalisation’ clause, it can be assumed the parties were satisfied that it was unnecessary to retain the clause in the current terms and conditions. Notably, both Mr Parker and Mr Carter had agreed to redraft the Higher Duties/Mixed Function provisions, but neither could recall the detail of their conversations.
[49] The AWU further submitted that the evidence of Mr Parker, Mr Jansen and Mr Harry and the payroll records confirm that the existing practice was as the AWU contended and contrary to the respondent’s position. The fact that certain supervisors and payroll staff have adopted the Unions’ interpretation, supports the proposition that there was no common intention of the parties. Further, the new wording in the 2015 Agreement is virtually identical to the words used in the NSW Sugar Award.
CONSIDERATION
Relevant principles and authorities
[50] Both parties appropriately relied on the ‘Berri Principles’ as being applicable to this matter. The ‘Berri Principles’ are as follows:
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 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.
[51] Apart from the non-application of the Acts Interpretation Act 1901 (Cth), the general principles of the interpretation of enterprise agreements are the same as those which have traditionally applied to Awards. In a recent judgment of the Federal Court of Australia, Rangiah J, in Swisspect Australia Pty Ltd v Australian Municipal, Administrative, Clerical and Services Union (No 3) [2019] FCA 37 provided a helpful summary linked to the frequently cited authorities at para [52] as follows:
‘52. 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] FCA 813; (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] IRCA 166; (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] FCAFC 137; (2007) 161 FCR 95 at [56] and [109]; Soliman v University of Technology, Sydney [2008] FCA 1512; (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] HCA 10; (2005) 222 CLR 241 at [2] and [13]; Construction, Forestry, Mining and Energy Union v John Holland Pty Ltd [2010] FCAFC 90; (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].’
[52] It is common ground that the contentious words in the disputed clause (22) are ‘day or shift’. No other words in the relatively short one sentence clause, are controversial.
[53] In one sense, the differences in construction between the parties is that the respondent’s approach is one of limitation of the words, such as to mean a day or shift is that period of work performed in ordinary hours, because that link is to be found in other clauses in the Agreement where the phrase ‘day or shift’ is used: see [47] above.
[54] In the opposing corner, the Unions’ construction is premised on the plain, ordinary and natural meaning of the words ‘day or shift’ where the employee is engaged for the whole period in a day or on a shift, irrespective of whether that shift includes overtime. Further, if the plain, ordinary meaning of the words is applied, it is not permissible to import other words of limitation to alter their essential characteristic.
[55] All parties submitted that the Commission would be satisfied that the construction of the contentious words can be resolved by applying their natural and ordinary meaning within the textual context of the Agreement as a whole. However, the parties also agreed that if the Commission came to the view that the words are ambiguous, uncertain or capable of more than one meaning, then resort might be had to ‘surrounding circumstances’ to establish the common intention of the parties. Unsurprisingly, the parties’ claim that the ‘surrounding circumstances’, including previous agreements, the negotiations for the 2015 and 2017 Agreements and existing custom and practice, support their different substantive approach to the meaning of the words. However, in my opinion, the task of interpreting the words does not need to go beyond the primary test of establishing the words’ plain, ordinary and natural meaning within the context of the Agreement as a whole. Accordingly, it is impermissible to take into account ‘surrounding circumstances’ being the witness evidence, previous agreements, common intention and the parties’ submissions going to those matters.
[56] The opposing parties relied on two different definitions of ‘day’ in the Oxford and Macquarie Dictionaries; see paras [41] and [20] above. While resort to Dictionary definitions may be helpful in the construction exercise, such definitions might not be the complete answer when plain, ordinary and natural meaning or common usage is called in aid of the construction task. This is particularly so in interpreting a phrase in an agreement where account should be had for the textual context of the Agreement when read as a whole.
[57] In my view, the meaning of a ‘day’ is readily ascertained by reference to its common English usage. Let me demonstrate this. When one asks the question, ‘how many days are there in a week?’, the answer is not 7 periods of daylight and 7 periods of night. Obviously, it is 7 days – being seven 24 hour periods. Many other examples demonstrate this point e.g. How many days in July? Or in a year? Complementing this is the definition of a ‘day’ in scientific parlance; namely, ‘A period of 24 hours, being the time it takes for the earth to complete one rotation on its axis, traditionally measured from midnight to midnight’. The distinction can be brought closer to home when the Commission issues directions in proceedings, such as requiring compliance within 7 days. No one could seriously suggest that this means compliance within 7 periods of daylight or 7 periods of night. Without wanting to labour the analogy much further, when one considers travel across the International Date Line, one loses or picks up a day of 24 hours’ duration, not a part day of daylight or night time.
[58] When viewed in this way, the inescapable conclusion for the meaning of ‘day’ in cl 22, untrammelled by any surrounding words of express limitation, must be as the Unions contend. In my opinion, the construction preferred by the respondent could only be correct if there were an express restriction on higher duties to ‘ordinary hours’. It is trite that in interpreting a disputed clause or phrase, one cannot do so by adding words to give it a different meaning to what the plain words reasonably bear. As was said by Katzmann J in Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Excelior Pty Ltd [2013] FCA 638 at [77]:
‘The consequences for Mr Butterworth are unfortunate. In the 21st century it is hard to see why an employee who is required by the terms of his contract of employment to attend training far from his accustomed workplace should have to shoulder the lion’s share of the costs of travel and accommodation to enable him to do so. But the Court’s task is to interpret the award, not to remake it. It would be “wrong to strain the words of the award to achieve a result that might be considered fair or desirable according to some a priori standard of fairness or proper employment practice” (ACX Ltd v DCT at [115]). The remedy lies elsewhere.’
The fact the words ‘ordinary hours’ do not appear in cl 22, but do so in the other clauses where reference is had to the phrase ‘day or shift’ only serves to demonstrate that cl 22 must have a separate and distinct meaning consistent with its common and natural usage.
[59] To the extent there is Commission authority for the meaning of ‘day’ I refer to Construction, Forestry, Maritime, Mining and Energy Union v CBI Constructors Pty Ltd [2018] FWCFB 2732 where a Full Bench of the Commission said at [20]-[23] (footnotes omitted):
‘[20] We consider it is appropriate to grant permission to appeal with respect to grounds 1-3 of the Unions’ appeal. Hydro Electric Corporation, McKechnie Iron Foundry and the Decision are divided first instance authorities on a question of construction of the FW Act that is of general significance to the Commission’s agreement approval function under Pt 2-4 Div 4 of the FW Act.
[21] The starting point for the consideration of these appeal grounds is the common law presumption that, in respect of prescribed time periods and time limitations, a “day” means an indivisible calendar day. In Prowse v McIntyre Windeyer J said:
“For most purposes of the law time is measured by days; and events are assigned in time to calendar days. Lawyers naturally adopt the spatial concept of time of ordinary thought and language. It follows that time is measured in periods; and any period or space of time, a year, a day, an hour, is, in theory at all events, divisible. But, as a day is for law the unit of measure in most cases, it was early said that the law was not concerned with divisions of a day…
A day, the period of the earth's axial rotation, is the natural and fundamental division of time. A day for legal purposes is the mean solar day, a period of twenty-four hours. These hours are reckoned from midnight to midnight, the instant of midnight being both the end of one day and the beginning of the next, for there are no rests in time, and as each instant comes it goes. A day has a significance for law in two ways: first, as a division of time, that is the space of time within which an event happened or is to happen, or something was done or is to be done: secondly, as a measure of the passage of time, a unit in a period of time.”
[22] Therefore when a time period of a specified number of days is expressed to run from an event that occurs on a particular day, it will not ordinarily be read as being constituted by 24-hour periods counted from the precise time of the event, but rather as constituted by whole calendar days. In that circumstance, the question then arises as to whether the day upon which the events occurs is to be counted for the purpose of the calculation of the time period, as Windeyer J went on to explain in Prowse v McIntyre:
“As has been said, the law in reckoning time by days ordinarily takes no account of fractions of a day. The result is that, whenever a period of days has to be computed from an act or an event that occurs within the space of a day, a decision must be made whether to start the reckoning from the beginning or the end of that day. Much the same question arises when a period is to be calculated up to the time when an act is done or an event happens. It may be that the mediaeval fondness for the period of a year and a day was in some way related to a desire to ensure the lapse of a full year. In the form the question is ordinarily now put it is whether the day of commencement of a period (or the day of its completion) is to be included or excluded in counting a given number of days. As to that, there is no universal rule. Where it is not prescribed by statute … the answer depends upon context and circumstances…”
[23] Section 36(1) of the AI Act (as it was at 25 June 2009) supplies a statutory answer to the question identified by Windeyer J. The rationale for s 36(1) was explained in Pearce and Geddes’ Statutory Interpretation in Australia as follows:
“The thinking underlying the Interpretation Act provision owes much to the difficulties that arise if the time is to run from the day of the event. If it is to commence at the first moment of time on that day, there is then an effective backdating of the period. If it is to commence from the time of the triggering event there are practical problems in identifying that precise time. It is for these reasons that the general approach has been adopted by courts of not paying credence to parts of days…”’
[60] In my judgment, there are no words of limitation, or distinction, such as to treat the word ‘shift’ as not being interchangeable with the word ‘day’. This must be so because of the preposition ‘or’ in the phrase ‘day or shift’. The interchangeability of the words ‘day’ and ‘shift’ finds support in the respondent’s preferred Dictionary. In the Macquarie Concise Dictionary (5th Ed), the 10th available definition of a ‘shift’ is:
‘the portion of the day scheduled as a day’s work when a factory, etc., operates continuously during the 24 hours, or works both day and night.’
In my view, both words connote a period of performing work that may include overtime, in a single block of time, even when a shift may be continuous over two calendar days. Indeed, the fact a shift may span two calendar days reinforces the construction of the word ‘day’ which I prefer. It is further reinforced by the notion that a day worker can also be said to be working a day shift.
CONCLUSION
[61] For these reasons, I am satisfied that the phrase ‘day or shift’ in cl 22 of the Agreement has a plain, ordinary and natural meaning, and resort to ‘surrounding circumstances’ to ascertain the meaning is not permitted.
[62] Accordingly, the Unions’ submissions as to the meaning of the phrase ‘day or shift’ are accepted. Finally, although the 2017 Agreement has a nominal expiry date of 31 July 2020, should the parties wish to change the wording of cl 22 to give it another meaning, and application, that is a matter which can be addressed in the next round of negotiations for a new agreement. This dispute is now concluded.
DEPUTY PRESIDENT
Appearances:
Mr A Sage for the applicant.
Mr T Capelin for the respondent.
Final written submissions:
For the applicant: 15 October 2018
For the respondent: 6 November 2018
For the Construction, Forestry, Maritime, Mining and Energy Union: 22 October 2018
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