Australian Workers' Union, The v Treasury Wine Estate

[2016] FWC 1528

[2016] FWC 1528

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.739 - Application to deal with a dispute

Australian Workers' Union, The
v
Treasury Wine Estate
(C2015/4477)

Wine industry
COMMISSIONER JOHNS	MELBOURNE, 9 MARCH 2016

Alleged dispute about matters arising under an enterprise agreement – dispute resolution – redundancy entitlements – notice of intended redundancy.

[1] This decision concerns a dispute the subject of an application made under s.739 of the Fair Work Act 2009 (Cth) by the Australian Workers’ Union (AWU), on behalf of its member Mr Arron Ball.
[2] The Respondent is Treasury Wine Estate. (Respondent).
[3] The dispute concerns the application of the terms of the Treasury Wine Estates Vintners Ltd – Karadoc Enterprise Agreement 2012 (the Agreement). The Agreement contains a term for the settlement of disputes at cl.16. The parties agree that the Fair Work Commission (Commission) is properly invested with jurisdiction to arbitrate the matter.
[4] The subject matter of the dispute is the operation of various terms of the Agreement which apply in redundancy situations. The relevant clause is cl.21, which will be set out below.
[5] In July 2015 the dispute was subject to a conference before Commissioner Lewin. Commissioner Lewin usefully summarised the factual circumstances (which were not substantially in dispute between the parties) as follows:

[4] Mr Ball was until 1 July 2015, an employee of Treasury Wine Estates at its Karadoc Winery, in its packaging department. On 31 March 2015, Treasury Wine Estates informed the Australian Stock Exchange (ASX), the AWU and its employees of what it referred to as intended “supply chain optimisation plans” in which notice of significant changes to the company’s supply chain network and cost base in both Australia and the USA was announced. Under the heading “Australia”, the following appears as part of the plan:
“…the packaging and warehousing of wines previously processed at Karadoc near Mildura Victoria will now occur at TWE’s state-of-the-art Wolf Blass facility in the Barossa, South Australia. The phased closure of packaging and warehouse operations at Karadoc is due to be completed during fiscal 2016.”
[5] Mr Ball was informed by this notice of the intention of Treasury (and discussions following) to cease packaging operations at Karadoc near Mildura and to have the operations performed at Nuriootra Park in the Barossa Valley.
[6] In light of the notification of the intended closure of the packaging department at Karadoc, in which Mr Ball was employed, Mr Ball sought other employment and was successful.
[7] The issue in dispute is the proper application (if any) of cl.21 of the Agreement, which is as follows:
“21. Redundancy
21.1 Discussions before Termination
21.1.1 Where an employer has made a definite decision that the employer no longer wishes the job the employee has been doing done by anyone and this is not due to the ordinary and customary turnover of labour and that decision may lead to termination of employment, the employer will hold discussions with the employees directly affected and with their Union or Unions.
21.1.2 The discussions will take place as soon as is practicable after the employer has made a definite decision which will invoke the provisions of the Introduction of Change clause 21.1.1 hereof and will cover, inter alia, the reasons for the proposed terminations, measures to avoid or minimise the terminations and measures to mitigate any adverse effects of any terminations on the employees concerned.
21.1.3 For the purpose of the discussion, the employer will, as soon as practicable, provide in writing to the employees concerned and their Union or Unions, all relevant information about the proposed terminations including the reasons for the proposed terminations, the number and categories of employees likely to be affected, and the number of workers normally employed and the period over which the terminations are likely to be carried out. Provided that any employer will not be required to disclose confidential information the disclosure of which would be harmful to the employer’s interests.
21.1.4 The Company, wherever possible will meet any redundancy requirements by way of voluntary redundancies. Whilst the acceptance or rejection of voluntary redundancies will be at the Company’s discretion it will make genuine endeavours to accommodate applications for voluntary redundancies. These endeavours, wherever possible will include retraining and redeploying other employees.
21.1.5 Business requirements, skills retention, redeployment and training opportunities are factors to be taken into account in deciding upon any voluntary or involuntary redundancies.
21.2 Redundancy Payments and Other Provisions
21.2.1 The redundancy provisions outlined in Appendix 2 to this Agreement will apply to all qualifying employees who are covered by this Agreement.”
[7] It will be observed that the Agreement provides for specified discussions to take place pursuant to cl.21.1 in a redundancy situation and prescribes redundancy payment and other provisions by cl.21.2 and Appendix 2 of the Agreement. Appendix 2 of the Agreement is set out below:
“Appendix 2 – Redundancy Provisions
1. Transfer
An employee whose current position becomes redundant may be offered an alternative position. Any such employee accepting a new position shall not be entitled to redundancy payments should the new position prove to be unsuitable at a later time. The transmission of business rules set out in the Act will otherwise apply
2. Entitlement
From the date of notification of intending redundancy all such employees shall be entitled to full redundancy payments calculated to their actual termination date if they elect to terminate prior to the nominated redundancy date.
3. Time off for Interviews
All such employees shall be allowed reasonable time off to attend job interviews subject to providing proof acceptable to the Company.
4. Assistance
The Company undertakes to assist all such employees in gaining new employment by liaison with other employers and the local employment network.
5. Ordinary Dismissals
An employee dismissed as a result of gross negligence, misconduct or unsatisfactory work performance during the course of ordinary business shall not be entitled to any severance payments.
6. Superannuation
All such employees who are members of the Company’s Superannuation Funds shall receive all entitlements as defined under the Trust Deeds.
7. Notice of Retrenchment
All such employees will receive a minimum of four (4) weeks’ notice of termination of employment or payment in lieu thereof.
8. Redundancy Payments
8.1 In addition to clause 7 redundant employees shall be entitled to a severance payment calculated as follows:
8.1.1 All such employees will receive four (4) weeks’ pay.
8.1.2 All such employees will receive an additional payment at the rate of four (4) weeks’ pay for each completed year of service plus pro-rata payment for each additional completed month of service.
8.1.3 All such employees shall be paid pro-rata Long Service Leave after five (5) years’ service.
8.1.4 All such employees shall be paid the full value of accrued personal leave, if any.
8.2 For the purpose of this clause a “weeks’ pay” shall be deemed the all purpose weeks pay presently used as a basis for calculation of Annual Leave entitlements, (i.e. in accordance with rates identified in clause 7). For annualised wages employees a “weeks pay” shall be the enterprise agreement base rate for their grade.
9. Annual Leave
All such employees shall also be paid the full value of all payments legally due to them in respect to outstanding Annual Leave.”
….
[10] The dispute arises because Mr Ball submits that the proper application of the relevant terms of the Agreement is that he is entitled to the redundancy benefits and other provisions prescribed by Appendix 2. Whereas, Treasury maintain that these provisions have no application to Mr Ball’s circumstances.
[11] The AWU submitted that the necessary preconditions of cl.16 leading up to the Commission’s jurisdiction and powers to resolve the dispute have been met. Treasury Wine Estates did not offer any jurisdictional objection to the Commission dealing with the dispute. The conference proceeded accordingly.
[12] The parties addressed the Commission respectively in support of their positions, including outlines of the factual circumstances in which Mr Ball became aware of Treasury’s decision that it would close the packaging department at Karadoc in accordance with the notice referred to above.
[13] Treasury did not dispute that a definite decision has been made to close the packaging operation at Karadoc and that this intention had been communicated to the AWU and Treasury Wine Estates employees in the packaging department, and that discussions had been conducted in accordance with cl.21.1 of the Agreement. Mr Ball was not offered a transfer of his employment to Nuriootra Park in the Barossa Valley or an alternative elsewhere.

[6] Commissioner Lewin then observed as follows:

[14] It seems to me therefore the announcement of the closure of the packaging department at Karadoc is a redundancy situation to which cl.21.1.1 of the Agreement applies. Treasury has made a definite decision that the job Mr Ball has been doing will no longer be required and that this is not due to the ordinary and customary turnover of labour. The decision is one which would lead to the termination of Mr Ball’s employment. Moreover, on what has been put to me, the relevant discussions prescribed by cl.21.1.1 have occurred.
[15] Given my consideration of the application of cl.21.1.1 to the circumstances affecting Mr Ball arising from Treasury’s intention as referred to above and my construction of cl.21.1.1 I consider Mr Ball to be a “qualifying employee”  1 referred to in cl.21.2 In my view, cl.21.1.1 is the referent term of the Agreement for the purposes of discerning when an employee will be a “qualifying employee” for the purposes of cl.21.2.

[16] I therefore consider that Appendix 2 applies to Mr Ball’s circumstances.

[17] I now turn to Appendix 2. For the purposes of my consideration I must focus on paragraph 2 of Appendix 2, have regard to the relevant context in which that paragraph appears both in Appendix 2 and cl.21, apply the plain meaning of the relevant words and if there is any uncertainty discern the mutual intentions of the makers of the Agreement.

[18] It seems to me that a reading of Appendix 2 establishes a catalogue of relevant considerations for these purposes, which clearly include termination of the employment of an employee whose position will become redundant prior to the time at which the effect of the intended redundancy is nominated as likely to be manifest. Paragraph 2 in particular concerns early election by an employee, to terminate prior to the nominated redundancy date. This entitlement is consistent with the provision of time off whilst working after the intended redundancy has been announced but not yet taken effect. Paragraph 4 and 1 may be characterised similarly.

[19] In this particular context, I consider that Paragraph 2 of Appendix 2 is an employee entitlement to elect to terminate their employment prior to a nominated redundancy date. In this respect the following is relevant:

• Treasury’s announced intention (as set out previously) was that the closure of the packaging department in which Mr Ball was employed would be completed during fiscal year 2016.
• At the conference the AWU indicated that during the discussions referred to above (pursuant to cl.21.1.1), February 2016 had been nominated as the likely date. This was not disputed.

[7] Commissioner Lewin found as follows:

[21] I therefore find as follows:

• Mr Ball was a qualifying employee within the meaning of cl.21.2.1.

• Appendix 2 applied to Mr Ball subsequent to the announcement of the intended redundancy of the positions in the packaging department at Karadoc on 31 March 2015 to the Australian Stock Exchange and communicated to the AWU and employees at Karadoc.

• Mr Ball was entitled to elect to terminate his employment prior to the nominated redundancy date in February 2016.

• Mr Ball was entitled to do so without loss of redundancy payments prescribed by Appendix 2, calculated up to the effective termination date of his employment.

[8] Commissioner Lewin recommended as follows:

[22] I therefore recommend that Treasury pay to Mr Ball the amount of redundancy entitlement prescribed by Appendix 2 of the Agreement.

(Recommendation)

[9] On 3 August 2015 the respondent wrote to Commissioner Lewin and advised him that, having carefully reviewed the Recommendation, in their view a “different conclusion would be reached by the Fair Work Commission after a full hearing of all evidence.” The respondent stated that “the positions of employees within the Karadoc Packaging Centre continue to be required by the business and as such yet to become redundant. And, Treasury Wine Estates has not provided any notification to such employee to that effect.” As a consequence the respondent indicated that it did not accept the Recommendation. Because the dispute was not resolved by the Recommendation it became necessary to list the matter for arbitration.
The hearing
[10] At the hearing on 9 November 2015, with permission, pursuant to section 597(2)(a) of the FW Act:

a) the applicant was represented by Ms F Knowles of counsel;
b) the respondent was represented by Mr R Dalton of counsel.

[11] Final calculations about the amount of severance payments due to Mr Ball (if any) were received from the respondent on 19 November 2015 without any admission of liability on the part of the respondent. That amount was calculated at $25,376.95.
[12] Background
[13] In advance of the hearing a witness statement was filed on behalf of Mr Ball (Exhibit “A2”). Mr Ball was not required for cross examination. Consequently, the following matters were either common ground between the parties or not otherwise contested:

a) On 9 January 2012 Mr Ball commenced employment with Southcorp Wines Pty Ltd trading as Treasury Wine Estates). He was employed as a packaging technician in the KPC Bottling and Packaging area at the Lindeman’s Karadoc site.
b) At 8.00 am on Tuesday, 31 March 2015 employees were gathered into a meeting room and told about the announcement made by the respondent to the ASX. Employees were told that the operations of the KPC facility would be moved to the Wolf Blass facility in the Barossa, South Australia.
c) Employers were told there was no official date on the exact time when the Karadoc packaging facility would be closed down, but it was believed that it would not occur in 2015.
d) At 4.00 pm on 11 May 2015 employees were again assembled for a further meeting to explain the restructuring process in more detail.
e) Mr Ball says that during the meeting he asked “if I decide to leave tomorrow will the company honour my redundancy?” 2 His evidence was that Peter Milton, the respondent’s Global HR Director – Supply, responded by indicating that “it depends on the situation of the individual, the circumstances will be reviewed and a decision will be based on that. As you can understand we can’t let all of you go because we still have a factory to run but, in saying that, we will still try to help you as much as we can.”3
f) On 1 June 2015 Mr Ball received an offer of a job with the Costa Group.
g) On 5 June 2015 Mr Ball wrote to the respondent in the following terms “I would like to confirm that Treasury Wine Estates will honour payment of my redundancy entitlements, if I need to take up alternative employment prior to the 1 July 2015 redundancy date of my currently held position.”
h) Also on that date Mr Ball tendered his resignation and gave four weeks’ notice (noting that his last working day would be 30 June 2015).
i) On 9 June 2015, having received some advice from his packaging manager, Mr Ball resubmitted the request for redundancy and asked that he be advised of the same by close of business on Friday, 12 June 2015.
j) On 11 or 12 June 2015 the respondent’s Human Resources Manager replied to Mr Ball in the following terms,

… It is important to note that on 31 March 2015, no employee was provided with notice of termination of employment on account of redundancy. Rather, the announcement on the 31 March 2015 merely outlined the introduction of the changes (as provided for in the ASX announcement).

Given that notice of termination of employment on account of redundancy has not been provided and, nor have any volunteers for redundancy being called for, there can be no entitlement to the provisions of redundancy as set out in… [the Agreement].

k) On 15 June 2015 Mr Ball accepted the job offer from Costa Group.
l) He then took two weeks’ sick leave.
m) On 30 June 2015 Mr Ball ceased employment with the respondent.

Issue in dispute
[14] The applicant contended that, “pursuant to clause 21.1.1, the redundancy provisions outlined in Appendix 2 to the Agreement have been satisfied given that:

a) there are qualifying employees who are covered by the Agreement;
b) the entitlements in clause 2 of Appendix 2 applied in circumstances where qualifying employees have been given notification of intending redundancy”

[15] The applicant submitted that the Commission should make orders “to the effect that:

a) notification of intending redundancy was given on 31 March 2015 to packaging and warehouse employees of Treasury Wine Estates at its Karadoc site and as such an employee shall be entitled to redundancy payments under clause 8 of Appendix 2 of the Treasury Wine Estates Vintners Ltd - Karadoc Enterprise Agreement 2012 calculated to their actual termination date if they elect to terminate prior to being given notice of retrenchment pursuant to clause 7 of Appendix 2 of the Agreement;
b) Arron Ball be paid redundancy payments pursuant to clause 8 of Appendix 2 of the Treasury Wine Estates Vintners Ltd-Karadoc Enterprise Agreement 2012 calculated to his actual termination date of 30 June 2015.”

[16] The respondent more succinctly defined the question in dispute as follows, “… whether Mr Ball, having elected to resign effective 30 June 2015, was entitled to severance pay under the Agreement”. The respondent submitted that the Commission should answer the question in the negative.
[17] What was common ground between the parties was that:

a) the resolution of the dispute turns on the proper construction of clause or item 2 of Appendix 2 of the Agreement. That clause reads as follows,

From the date of notification of intending redundancy all such employees shall be entitled to full redundancy payments calculated to their actual termination date if they elect to terminate prior to the nominated redundancy date.

b) the respondent never provided to Mr Ball a notification of a definite date upon which he would be retrenched or his position would be made redundant.

[18] The applicant submitted that it was sufficient that the respondent had identified February 2016 is intended date of redundancy. The respondent submitted that the absence of a definite date was fatal to Mr Ball’s entitlement to a redundancy payment.
Evidence
Applicant
[19] At the hearing, in addition to the witness statement that was filed on behalf of Mr Ball, Ms Knowles called evidence from:

a) Bernadette Billington, a machine operator employed by the respondent and the AWU delegate at Karadoc. Ms Billington had filed two witness statements in relation to the matter (Exhibits “A3” and “A4”) and was cross-examined. Ms Billington’s evidence about the staff meetings on 31 March 2015 and 11 May 2015 were consistent with the evidence of Mr Ball. She also gave evidence about a meeting between the AWU and the respondent on 31 March 2015 where, she says the respondent’s general manager, Kent Robinson, and Global HR Director-Supply, (Peter Milton) indicated that employees would be let go with their entitlements if they found alternate employment (a proposition denied by both); and

1) Adam Algate, an organiser employed by the AWU and responsible for the Karadoc site. Mr Algate had also filed two witness statements in relation to the matter (Exhibits “A5” and “A6”) and was cross-examined. Mr Algate also gave evidence about the meeting on 31 March 2015 in respect of which he took a contemporaneous file note. The file note indicates that all employees would be made redundant, the redundancies would be around February 2016 and “staff will get redundancy if they leave early”. In his first witness statement Mr Algate says Mr Robinson indicated that employees would get their entitlements “but we will deal with it on a case-by-case basis”. The remainder of his evidence related to exchange the correspondence between the AWU and the respondent after 31 March 2015.

Respondent
[20] At the hearing, Mr Dalton:

a) called evidence from:

i. Kent Robinson, the respondent’s General Manager Winery and Packaging Operations. Mr Robinson had filed a witness statement in relation to the matter (Exhibit “R2”) and was cross-examined. Mr Robinson gave evidence about the presentation made by him and Mr Milton on 31 March 2015. He said that in relation to questions about the timing of the closure he said the respondent was looking “at around February 2016” in relation to the packaging operations. He says “I recall indicating a rough time frame of the end of financial year 2016 (i.e. June 2016)” in relation to the warehousing operations. He admits that he told employees “we will try and look after you” but he denies making any specific promise that employees would be paid their redundancy if they resigned to take up alternative employment. In answer to questions from the Commission Mr Robinson indicated that the respondent had still not yet “locked in on a specific date” for the closure, but that they expected to be able to do so “before Christmas”. In any case Mr Robinson said he anticipated that the packaging site would close in February 2016. 4
ii. Mr Peter Milton, the respondent’s Global HR Director – Supply. Mr Milton had filed a witness statement in relation to the matter (Exhibit “R5”) and was cross examined. Substantially Mr Milton’s evidence was consistent with that of Mr Robinson. It was a concern that Mr Milton, in his position as Global HR Director, gave evidence that, prior to the meeting on 31 March 2015, he had not looked at the redundancy provisions in the Agreement and that he was not “in great detail” familiar with the terms of the Agreement. 5 It seemed to be a somewhat cavalier approach for a senior representative of the respondent to take in advance of communicating to employees a decision that was likely to have a significant impact on their lives.

b) tendered two further witness statements on behalf of Brett Thurman (Site Packaging Operations Manager at Karadoc) (Exhibit “R3”) and Vural Karakurt (Packaging Optimisation Efficiency Manager at Karadoc) (Exhibit R4”). Neither Mr Thurman nor Mr Karakurt were required for cross-examination.

[21] It is to be observed that none of the evidence of the witnesses included evidence of:

a) prior negotiations of the Agreement that could 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; nor
c) matters in common contemplation and constituting a common assumption.

[22] To the extent that most of the evidence related to events that occurred after the making of the ASX announcement on 31 March 2015, it was of marginal relevance to the task before the Commission which was to interpret the meaning of the Agreement. Ms Knowles submitted that it was of some relevance (albeit limited) in that, she submitted, “what was said on 31 March was the notification of the intending redundancy is within the meaning of clause 2 of Appendix 2.” 6
[23] Noting that the respondent had rejected the Recommendation made by Commissioner Lewin on the basis that, in their view, “a different conclusion would be reached by the Fair Work Commission after a full hearing of all the evidence”, the nature of the evidence filed on behalf of the respondent was somewhat surprisingly irrelevant. The Commission, as presently constituted, found most of the evidence of both parties to be of little assistance.
Principles of construction of agreements
[24] In October 2014 a Full Bench of the Commission heard an appeal in The Australian Meat Industry Employees Union v Golden Cockerel Pty Limited (Golden Cockerel). 7 In short summary the appeal concerned the principles relevant to the interpretation of an agreement. The Full Bench went to great lengths to set out the relevant principles and relevant authorities. In coming to this decision the Commission, as presently constituted, has had regard to those authorities referred to by the Full Bench and the relevant principles which can be summarised as follows:

[41] From the foregoing, the following principles may be distilled:
1. The AI Act does not apply to the construction of an enterprise agreement made under the Act.
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.

Submissions
[25] In the present matter there is a dispute between the parties as to the operation of clause 2 of Appendix 2 of the Agreement. That clause reads as follows,

From the date of notification of intending redundancy all such employees shall be entitled to full redundancy payments calculated to their actual termination date if they elect to terminate prior to the nominated redundancy date.

Applicant
[26] The Applicant submitted that:

a) a “qualifying employee” employee in respect of which:

i. the respondent has made “a definite decision that [it] no longer wishes the job the employee has been doing done by anyone…”; and
ii. the redundancy provisions outlined in Appendix 2 of the Agreement apply.

b) the respondent made a definite decision that he no longer wishes the jobs of the packaging and warehouse employees at the Karadoc site to be done by anyone as evidenced by its decision to move the packaging and warehouse operations to its Wolf Blass facility in South Australia;
c) a decision which may lead to the termination of employment by reason of redundancy of a position is sufficient for the purposes of the Agreement and it is not necessary that a decision be made to retrench an employee;
d) the decision to transfer the package and warehouse operations to South Australia was such a decision;
e) all that is required under clause 2 of Appendix 2 is a notification of an intention to make employees redundant;
f) it does not require the giving of notice of retrenchment (rather “notice of retrenchment” is dealt with separately in clause 7 of Appendix 2);
g) consequently, employees who elect to terminate their employment prior to the nominated redundancy date are entitled to full redundancy payments calculated to their actual termination date, which is the date that they actually cease employment;
h) the respondent had nominated a redundancy date (i.e. designated) at the meeting on 31 March 2015, variously described as within the next three months, around February 2016 or not immediately but within the next 12 months; and
i) it necessarily follows that the conditions of clause 2 of Appendix 2 of the Agreement were met.

Respondent
[27] The Respondent submitted that:

a) clause 2 of Appendix 2 of the Agreement unambiguously requires the resigning employee to have been notified of a redundancy date;
b) the preferable construction is at the notification of intending redundancy requires more the notification of a decision that triggers consultation obligations. Early announcement a notification to employees of a restructure should not be discouraged by the prospect of triggering premature obligations to pay severance to employees;
c) the expression “qualifying employees” is not defined in clause 21 or anywhere else in the Agreement. It is therefore necessary to derive its meaning from the rest surrounding text and context of the Agreement;
d) if Appendix 2 identifies who is eligible to receive redundancy pay and in what circumstances, the most logical reading of “qualifying employees” is that it means employees who qualify under Appendix 2 for redundancy pay or other benefits set out in that part of the Agreement:
e) in order to understand who is a “qualifying employee” one must understand the meaning of “all such employees” as contained in clause 2 of Appendix 2 of the Agreement;
f) the expression “all such employees must be reference to item 1 of Appendix 2 which refers to “an employee whose current position becomes redundant…”; So a “qualifying employee” is employee whose current position becomes redundant to me:
g) having regard to long standing principles relating to termination change and redundancy the phrase “no longer wishes” requires that the job of the employee ceased to exist;
h) the evidence clearly establishes that while the respondent had indicated that there would be a future closure it still required the packaging warehousing jobs to be performed for at least several months;
i) at the time that Mr Ball resigned there had not been a notification of intended redundancy because there had not been a definite date set by which Mr Ball’s employment would become redundant.

Consideration
[28] Both parties contend that the Commission should have regard to the plain and ordinary meaning of the words in the Agreement. However, in doing so, conflicts arise between the interpretations they each urge upon the Commission.
[29] It is necessary therefore to apply the Golden Cockerel principles.
1. The AI Act does not apply to the construction of an enterprise agreement made under the Act.
[30] The AI Act is not to be and has not been applied to the Commission’s interpretation of the Agreement.
2. In construing an enterprise agreement it is first necessary to determine whether an agreement has a plain meaning or contains an ambiguity.
[31] Both counsel sought to rely upon the decision in Amcor v CFMEU 8. Mr Dalton referenced the decision of Callinan J when his honour wrote “It is important to keep in mind therefore the desirability of a construction, if it is reasonably available, that would operate fairly towards both parties”.
[32] Ms Knowles preferred the joint judgement of Gleeson CJ and McHugh J when they wrote that the interpretation of an agreement “Turns on the language of the particular agreement, understood in the light of its industrial context and purpose.”
[33] I have had regard to the submissions of counsel and accept that the purpose of clause 2 of Appendix 2 of the Agreement must be determined objectively are not according to the subjective state of mind of either party.
[34] Both counsel also referred to the Commission to the decision in Short v Hercus 9 again citing different passages in relation to the proper interpretation of clause 21.1.1 of the Agreement. The Commission, as presently constituted, has had regard to the entirety of the decision in Short v Hercus in coming to this decision and accepts that clause 21.1.1 of the Agreement must be determined objectively taking into account the industrial history and meaning of the phrase which begins “where an employer has made a definite decision….”
[35] However, noting the divergent submissions about how the Agreement (in its entirety) is to be interpreted and notwithstanding the application of the accepted principles, the Commission, as presently constituted, finds that clause 2 of Appendix 2 of the Agreement does not have a plain meaning. It is apparent; having regard to the nature of the dispute between the parties that ambiguity is to be found in the Agreement. It is not immediately apparent on a reading of the Agreement which interpretation of it is to be preferred.
3. Regard may be had to evidence of surrounding circumstances to assist in determining whether an ambiguity exists.
[36] Neither party led any evidence of surrounding circumstances that would assist the Commission 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.
[37] Having decided that the Agreement does not have a plain meaning the Commission, as presently constituted has not taken into account evidence of surrounding circumstances such that it would contradict the plain language of the Agreement. In any case, no such evidence was led.
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.
[38] Having found that the language of the Agreement is ambiguous or susceptible to more than one meaning the Commission was entitled to have regard to evidence of surrounding circumstances that would aide the Commission in interpreting the Agreement; however, no such evidence was led before the Commission. This is
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.

[39] For the reasons stated above this Golden Cockerel principle is not relevant in the present matter.
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.

[40] Principles 7 and 8 from the decision in Golden Cockerel are the most relevant in the present matter.
[41] Clause 2 of Appendix 2 of the Agreement reads as follows,

From the date of notification of intending redundancy all such employees shall be entitled to full redundancy payments calculated to their actual termination date if they elect to terminate prior to the nominated redundancy date.

[42] However, it is necessary to consider clause 2 of Appendix 2 in the context of the Agreement viewed as a whole.
[43] Clause 21.2.1 provides that,

The redundancy provisions outlined in Appendix 2 of this Agreement will apply to all qualifying employees who are covered by this Agreement.

[44] In order to establish who is a “qualifying employee” it is necessary to have regard to clause 21.1.1. It provides that,

Where an employer has made a definite decision that the employer no longer wishes the job the employee has been doing done by anyone and this is not due to the ordinary and customary turnover of labour and that decision may lead to termination of employment, the employer will hold discussions with the employees directly affected and with their Union or Unions.

[45] The word “definite” is an adjective, therefore a “definite decision” is one that is clearly stated and decided; it cannot be vague or doubtful.
[46] The largely uncontested evidence in this matter suggest that what occurred on 31 March 2015 was a communication that the respondent had made a definite decision to implement change that would likely have a significant effect on the employees in the packaging and warehouse departments. A fair interpretation is that the respondent was indicating a timeframe, sometime well into the future, when positions would be made redundant. Everything about when the respondent would close the packaging and warehouse departments was, as at 31 March 2015, vague.
[47] No doubt the respondent had made a definite decision that it no longer wanted to operate the site at Karadoc. But, it had not made a definite decision that it no longer wanted the jobs being performed by employees to not be performed by anyone. On the contrary, for valid reasons associated with production needs and the desire to build up stock levels, the respondent had a need to retain employees in their jobs until it was ready to properly give them notice of termination.
[48] Clause 2 of Appendix 2 of the Agreement must be read in this context. The use of the phrase “intending redundancy” is unhelpful and arguably inconsistent with the notion of “a definite decision”. It is therefore understandable that the applicant and the respondent’s employees treated what occurred on 31 March 2015 as a notice of “intending redundancy”. But if that is so, that does not automatically entitle employees to resign and receive a redundancy payment
[49] Clause 2 of Appendix 2 of the Agreement must he read in its entirety. The “redundancy payments [are to be] calculated to their actual termination date if [the employee elects] to terminate prior to the nominated redundancy date.”
[50] It is simply not possible to undertake the calculation of the redundancy payment unless there is an actual/identified/clearly stated calendar date. The use of the definite article “the” before the phrase “nominated redundancy date” unambiguously requires the respondent to have articulated an actual day upon which the employment of the employee is to be made redundant (i.e. when it no longer wants the job being performed by the employee to be performed by anyone). Resignation before such a date has been articulated by the respondent does not entitle the employee to be paid their redundancy payment.
[51] In this regard the submissions made by the respondent and the authorities referred to by it are to be preferred. The word “date” at the end of clause 2 of Appendix 2 of the agreement requires an actual date or a particular day to have been identified.
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.

[52] No evidence was led about the intentions or expectations of the parties at the time that the Agreement was negotiated and the Commission, as presently constituted, has not had regard to the subjective intentions or expectations of the parties.
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.
[53] No rewriting of the Agreement has been undertaken in coming to the decision in this matter. The Commission, as presently constituted, has interpreted the agreement produced by the parties that, on 9 January 2013, was approved by the Commission.
Conclusion
[54] Having considered all that has been submitted in these proceedings and the relevant authorities, for the reasons set out above, the Commission, as presently constituted, has determined that Mr Ball, having elected to resign effective 30 June 2015, was not entitled to severance pay under the Agreement.
[55]For the reasons set out above the Commission, as presently constituted, prefers the interpretation of the Agreement (and in particular clause 2 of Appendix 2) advanced by the respondent and declines to make the Orders sought by the applicant.

COMMISSIONER

Appearances:

Ms F Knowles of counsel for the applicant.

Mr R Dalton of counsel for the respondent.

Hearing details:

Mildura,

Monday, 9

November 2015

Final submissions

19 November 2015.

 1   I note that the term “qualifying employee” does not appear elsewhere in the Agreement.

 2   Transcript PN16

 3   Transcript PN167

 4   Transcript PN316-319.

 5   Transcript PN367-371.

 6   Transcript PN33.

 7   [2014] FWCFB 7447.

 8 (2005) 222 CLR 241.

 9 (1993) 40 FCR 511.

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