Australian Workers' Union v Murrumbidgee Irrigation Ltd - [2011] FWA 5306

[2011] FWA 5306

FAIR WORK AUSTRALIA

DECISION

Workplace Relations Act 1996
s 709 - Application to FWA to have a dispute resolution process conducted (Div 5)

Australian Workers' Union
v
Murrumbidgee Irrigation Ltd
(DR2011/30)

DEPUTY PRESIDENT SAMS

SYDNEY, 21 SEPTEMBER 2011

Dispute concerning ‘grandfathering’ of annual leave - evaluation of positions - Mercer Job Evaluation System - remuneration benchmarking - transitional arrangements - negotiations for enterprise agreement - interpretation of annual leave clause - principles of construction - actual words used - intended purpose - balancing terms of agreement - overwhelming employee endorsement of agreement - Union’s interpretation not made out - findings made as to proper construction of clause

BACKGROUND

Legislative framework underpinning the decision

[1] On 2 February 2011, the Australian Workers’ Union, Greater New South Wales Branch (‘the Union’) filed an application under s 709 of the Workplace Relations Act (‘the WR Act’) for Fair Work Australia (FWA) to deal with a dispute in accordance with a dispute settlement procedure. The respondent to the dispute is named as the Murrimbidgee Irrigation Limited (MIL).

[2] The dispute arises under the terms of the Murrimbidgee Irrigation Limited Workplace Agreement 2008 (‘the 2008 Agreement’), a Union collective agreement made under s 340(2) of the WR Act. The Agreement was made following a vote of 109 employees on 24 July 2008 in which 107 employees voted to support the Agreement and two abstained. The 2008 Agreement was lodged with the Workplace Authority on 28 July 2008, but curiously, not approved by the Authority until 7 January 2009. The commencement date of the Agreement was therefore 14 January 2009, and it has a nominal term of five years.

[3] There is no controversy that the 2008 Agreement is a transitional instrument for the purposes of the FairWork (Transitional Provisions and Consequential Amendments) Act 2009 (‘the Transitional Act’). There is also no argument that the WR Act continues to apply in relation to a dispute arising under the 2008 Agreement and FWA has jurisdiction to deal with such a dispute where previously the Australian Industrial Relations Commission (AIRC) had such jurisdiction; subject to any limitations expressed in the terms of the Agreement itself, and those referable to s 711 of the WR Act - most notably there being no powers available to FWA to make orders in this matter (s 711(2)).

[4] For completeness, the provisions of cl 28.8 of the 2008 Agreement permits the AIRC (now FWA) to resolve this dispute by dispute resolution procedures, including arbitration. The clause is expressed as follows:

If the dispute remains unsettled the matter shall be notified to an appropriate dispute resolution provider. If parties cannot decide who should conduct dispute resolution, then either party may apply to the Australian Industrial Registry. There is then a further two week period during which the parties must try to agree on the dispute resolution provider. If they are still unable to agree, then the Australian Industrial Relations Commission (AIRC) will provide dispute resolution services. Should the matter…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

Keep reading for free

Create a free CaseChat account to read Australian Workers' Union v Murrumbidgee Irrigation Ltd and more:

Read every judgment in full
Ask AI and get answers linked to paragraphs
See how each paragraph was cited in later cases
Download judgments as PDF or Word

Continue with Google

One click creates your free account or signs you in.

By continuing you agree to the Terms and Privacy Policy.

Details

Case: [2011] FWA 5306
Decision Date: 21 SEPTEMBER 2011

CaseChat Overview and Summary

The Australian Workers' Union (AWU) took Murrumbidgee Irrigation Ltd (MIL) to court, challenging the company's interpretation of its annual leave clause in an enterprise agreement. The case was heard by the Fair Work Commission, Australia's workplace relations tribunal. The AWU argued that the clause provided for the "grandfathering" of existing annual leave balances, while MIL contended that no such grandfathering was provided for. The dispute centred on the proper construction of the annual leave clause in the context of the enterprise agreement, and the Commission was tasked with determining the correct interpretation.

The legal issues before the Commission were the proper interpretation of the annual leave clause in the enterprise agreement, and whether it provided for the grandfathering of existing annual leave balances. The AWU argued that the clause should be interpreted in light of the intended purpose of the agreement, while MIL contended that the actual words used in the clause should be given effect. The Commission considered the principles of construction, the purpose of the agreement, and the overwhelming endorsement of the agreement by employees. The Commission also considered evidence regarding the use of the Mercer Job Evaluation System and remuneration benchmarking in the negotiation of the agreement.

In its decision, the Fair Work Commission held that the AWU's interpretation of the annual leave clause was not supported by the actual words used in the clause or the intended purpose of the agreement. The Commission found that the clause did not provide for the grandfathering of existing annual leave balances, and that the proper construction of the clause was consistent with MIL's interpretation. The Commission emphasised the importance of giving effect to the actual words used in the clause, and noted that the AWU had not made out its case for an alternative interpretation. The Commission also noted the overwhelming employee endorsement of the agreement, which supported MIL's interpretation of the clause.

The Fair Work Commission made findings as to the proper construction of the annual leave clause in the enterprise agreement, and rejected the AWU's interpretation. The Commission did not make any orders in relation to the dispute, as the matter had been resolved through the interpretation of the agreement. The decision provides useful guidance for employers and employees when negotiating and interpreting enterprise agreements, and highlights the importance of giving effect to the actual words used in the agreement.

Orders