"Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union" known as the Australian Manufacturing Workers' Union (AMWU) v Boral Cement Limited

[2021] FWC 6159

[2021] FWC 6159

FAIR WORK COMMISSION

DECISION

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

"Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union" known as the Australian Manufacturing Workers' Union (AMWU)
v
Boral Cement Limited
(C2021/3722)

The Australian Workers' Union
v
Boral Cement Limited
(C2021/3731)

Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia
v
Boral Cement Limited
(C2021/3733)

Construction, Forestry, Maritime, Mining and Energy Union-Construction and General Division, New South Wales Divisional Branch
v
Boral Cement Limited
(C2021/4482)

COMMISSIONER RIORDAN SYDNEY, 11 NOVEMBER 2021

Alleged dispute about any matters arising under the enterprise agreement and the NES;[s186(6)].

[1] On 1 July 2021, the "Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union" known as the Australian Manufacturing Workers' Union (the AMWU), the Australian Workers' Union (the AWU) and the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (the CEPU) lodged applications pursuant to s.739 of the Fair Work Act 2009 (the Act) for the Fair Work Commission (the Commission) to deal with a dispute with Boral Cement Limited (the Respondent). On 3 August 2021, the Construction, Forestry, Maritime, Mining and Energy Union-Construction and General Division, New South Wales Divisional Branch (the CFMMEU) filed an application pursuant to s.739 of the Act also for the Commission to deal with a dispute with the Respondent. At the Applicants’ request, and as agreed by the Respondent, the applications were dealt with jointly.

[2] The joint dispute relates to the interpretation of the phrase “paid for all purposes of the Agreement” in relation to the allowances identified in clause 13.1 of the Boral Cement Ltd (NSW) Enterprise Agreement 2018 (the Agreement).

[3] A number of unsuccessful Conferences were conducted in this matter. A Telephone Hearing took place on 12 October 2021.

[4] The Applicants proposed the following questions for arbitration:

a. Whether the phrase “paid for all purposes of the Agreement” in Clause 13.1 is

ambiguous?

b. Whether the allowances being paid as a weekly allowance is incompatible

with the phrase “for all purposes of the Agreement”?

[5] The Respondent, however, submitted that the questions proposed by the Applicants’ did not properly address the subject matter of the dispute. The Respondent stated that the matter for determination by the Commission is whether, when paying the allowances, the Company should adopt the Compounding Approach, or alternatively, whether the Stand-alone Approach is correct. The Compounding Approach is where the weekly allowance is divided by 38, which is then added to the hourly rate of pay for an employee and paid for all purposes of the Award. The Stand-Alone Approach is where an employee only receives the weekly allowance rate no matter how many hours the employee actually works. The Respondent opposed the Applicants’ application on both jurisdictional and merits grounds.

[6] At the hearing, Ms K Presdee appeared for the AMWU, Mr T Craven appeared for the AWU, Mr D Austin appeared for the CEPU and Mr D Syron appeared for the CFMMEU. Mr J Donnelly, Partner, National Workplace Lawyers, was granted leave to appear on behalf of the Respondent.

[7] Mr Clive Collier, an electrician of the Respondent who works at its Berrima plant, gave evidence at the Hearing. Witness statements were also admitted by Mr Matthew Carlon, a mechanical maintenance planner at the Berrima site, Mr Sean Burke, an Organiser with the AWU, and Mr Gauravjit Singh, the People & Culture Partner for the Respondent.

[8] The parties are aware of my employment history and background. For the record, I advise that I am an Electrical Fitter/Mechanic by trade and I hold an Electrical Licence (now known as a Qualified Supervisors Certificate – Electrical) from when I worked in the Electricity Distribution Industry in the 1980’s.

Relevant Provisions of the Agreement

[9] Clause 13.1 of the Agreement states:

“13.1 All Purpose Allowances

In addition to the rates of pay ascertained from clause 12.2, an employee shall receive the following allowances (paid for all purposes of this Agreement):

(a) Licence Allowance- An additional amount shall be paid per week to an employee employed and working as an Electrical Tradesperson and possessing the New South Wales Electrical 19 Mechanic's Licence issued under the Electricity Development Act 1945 as set out in Items 1 and 2 of Table 2- Other Rates and Allowances, of Part 10, Monetary Rates.

(b) Tool Allowance - In addition to the rates of pay set out in Table 1A of Part 10, the Tool Allowances set out in Items 3, 4, 5 and 6 of Table 2 shall apply.

(c) Disability Allowance- In addition to the rates prescribed herein, a disability allowance per week as set out n Item 7 of Table 2 shall apply.

(d) A bricklayer and an employee appointed to assist the bricklayer in the alteration or repair to kilns or refractory work shall be paid an additional amount per hour as set out in Item 10 of Table 2, whilst so engaged.”

[10] Clause 13.2 of the Agreement states:

“13.2 Allowances (Not All Purpose)

In addition to the rates of pay ascertained from clause 12.2, an employee shall receive the following allowances (not paid for all purposes of this Agreement):

(a) An employee required to work in the following shall, be paid an additional 50 per cent of their ordinary-time rate of pay:

(i) Inside mills, within two hours of these having been shut down.

(ii) Inside any rotary kiln, or kiln precipitator, within 12 hours of the kiln being shut down.

(iii) Lime Plant (Quicklime) Marulan:

(A) Scraper feed gates and scraper cooling fan whilst kiln is operating or within 12 hours ofthe kiln being shut down.

(B) Barker dust collector situated on the 400 tonne bin.

(C) Dust collector on top of 100 tonne bin.

(D) Twin cell dust collector.

(E) Rusden-Birrel dust collector.

(iv) Inside the slag drying chamber at Maldon whilst heat is retained in the combustion chamber.”

[11] Clause 14.1 of the Agreement provides:

“14 Penalties not cumulative

14.1 Shift Allowances Etc

Shift allowances and allowances set out in clause 13.2 shall not be subject to any premium or penalty additions.”

(my emphasis)

[12] The Disputes Settlement Procedure is provided at clause 41 of the Agreement as follows:

“41. Disputes Settlement Procedure

41.1 Disputes Procedure

(a) If a dispute relates to:

(i) a matter arising under the Agreement; or

(ii) the NES; or

(iii) any matter pertaining to the employment relationship between the Company and the employees covered by this Agreement,

this clause sets out procedures to settle the dispute.

41.2 A party to the dispute may appoint a representative of their choice for the purposes of the procedures in this clause. In the case of an employee such a representative may include the employee's union.

41.3 In the first instance, the parties to the dispute must try to resolve the dispute at the workplace level, by discussions between the employee or employees and relevant supervisors.

41.4 If the dispute remains unresolved following the step referred to immediately above, the parties to the dispute must again try to resolve the dispute at the workplace level, by discussions between the employee or employees and the relevant manager of the site to which the dispute relates.

41.5 If the dispute remains unresolved following the step referred to immediately above, the parties to the dispute must again try to resolve the dispute at the workplace level, by discussions between the employee or employees and the relevant operations and/or HR/IR manager nominated by the Company to conduct this higher level discussion in relation to the particular dispute.

41.6 If discussions at the workplace level do not resolve the dispute, a party to the dispute may refer the matter to the Fair Work Commission ("the Commission") for conciliation but only after the above steps for attempting to resolve the matter at the workplace level have been exhausted and provided that the Fair Work Commission is satisfied that genuine attempts have been made to resolve the dispute at the workplace level in accordance with this clause.

41.7 If the dispute or grievance is not resolved by conciliation either party may confer power on the Commission to arbitrate the dispute and the arbitrated outcome will, subject to any rights of appeal, be binding on the parties.

41.8 Any arbitrated decision of a single member of the Commission may be appealed by a party to a Full Bench of the Commission or the Federal Court. Further, any arbitrated decision of a Full Bench of the Commission can be appealed to the Federal Court.

41.9 The exercise of any power or function under this clause is subject to the requirements of s 740( 4) of the Act.

41.10 Whilst this procedure is being followed work shall continue normally in accordance with current custom or practice. No party shall be prejudiced as to final settlement by the continuance of work in accordance with this clause.”

[13] The Consultation clause at clause 42 of the Agreement provides:

“42. Consultation

42.1 Consultation must occur in accordance with Annexure "B" "Consultation Term" which is based on the model consultation clause in the Act.”

[14] Annexure B is extracted as follows:

“1 CONSULTATION TERM

1.1 This term applies if the Company:

(a) has made a definite decision to introduce a major change to production, program, organisation, structure or technology in relation to its enterprise that is likely to have a significant effect on the employees; or

(b) proposes to introduce a change to the regular roster or ordinary hours of work of employees.

Major Change

1.2 For a major change referred to in subclause 1.1:

(a) the Company must notify the relevant employees of the decision to introduce the major change; and

(b) subclauses 1.3 to 1.9 apply.

1.3 The relevant employees may appoint a representative for the purposes of the procedures in this term.

1.4 If:

(a) a relevant employee appoints, or relevant employees appoint, a representative for the purposes of consultation; and

(b) the employee or employees advise the Company of the identity of the representative;

the Company must recognise the representative.

1.5 As soon as practicable after making the decision, the Company must:

(a) discuss with the relevant employees;

the introduction of the change; and

the effect the change is likely to have on the employees; and

measures the Company is taking to avert or mitigate the adverse effect of the change on the employees; and

(b) for the purposes of discussion- provide, in writing, to the relevant employees:

all relevant information about the change including the nature of the change proposed; and

information about the expected effect of the change on the employees; and

any other matters likely to affect the employees.

1.6 However, the Company is not required to disclose confidential or commercially sensitive information to the relevant employees.

1.7 The Company must give prompt and genuine consideration to matters raised about the major change by the relevant employees.

1.8 If a term of this Agreement provides for a major change to production, program, organization, structure or technology in relation to the enterprise of the Company, the requirements set out in subclauses 1.2(a) and 1.3 and 1.5 are taken not to apply.

1.9 In this clause, a major change is likely to have a significant effect on employees if it results in:

(a) the termination of employment of employees; or

(b) major change to the composition, operation or size of the Company's workforce or to the skills required of employees; or

(c) the elimination or diminution of job opportunities (including opportunities for promotion or tenure); or

(d) the alteration of hours of work; or

(e) the need to retrain employees; or

(f) the need to relocate employees to another workplace; or

(g) the restructuring of jobs.

Change to regular roster or ordinary hours of work

1.10 For a change referred to in subclause l.l(b):

(a) the Company must notify the relevant employees of the proposed change; and

(b) subclauses 1.11 to 1.15 apply.

1.11 The relevant employees may appoint a representative for the purposes of the procedures in this term.

1.12 If:

(a) a relevant employee appoints, or relevant employees appoint, a representative for the purposes of consultation; and

(b) the employee or employees advise the Company of the identity of the representative; the Company must recognise the representative.

1.13 As soon as practicable after proposing to introduce the change, the Company must:

(a) discuss with the relevant employees the introduction of the change; and

(b) for the purposes of the discussion- provide to the relevant employees:

all relevant information about the change, including the nature of the change; and

information about what the Company reasonably believes will be the effect of the change on the employees; and

information about any other matters that the Company reasonably believes are likely to affect the employees; and

(c) invite the relevant employees to give their views about the impact of the change (including any impact in relation to their family or caring responsibilities).

1.14 However the Company is not required to disclose confidential or commercially sensitive information to the relevant employees.

1.15 The Company must give prompt and genuine consideration to matters raised about the changes by the relevant employees.

1.16 In this term:

relevant employees means employees who may be affected by a changed referred to in subclause 1.1.”

(my emphasis)

Applicants’ Submissions

[15] On 8 September 2021, the AMWU filed a joint submission on behalf of the AMWU, AWU and CFMMEU. These submissions were supported by witness statements of Mr Carlon and Mr Burke. In addition to these materials, the CEPU filed and relied on a witness statement of Mr Collier. The Union parties are jointly referred to as ‘the Applicants’.

[16] The Applicants represent workers at the Respondent’s plants at Berrima, Maldon and

Marulan across production and maintenance classifications. The Applicants are covered by the Agreement and have members who are in receipt of allowances contained in the Agreement.

[17] The Applicants submitted that the dispute arose over the decision of the Respondent to unilaterally change the way allowances are paid to new employees who are covered by the Agreement and to any employee who is permanently placed or promoted into a new role or position under the Agreement. The Applicants submitted that for these workers the allowances contained in clause 13.1 are being paid as a set weekly amount and are not being included in the calculation for penalty rates such as payment for overtime.

Commission’s powers to interpret enterprise agreements

[18] The Applicants submitted that the principles for interpreting an enterprise agreement are well established 1 and the Commission must determine whether the contested provision has a plain meaning or is ambiguous.2

[19] The Applicants submitted that in accordance with Tenix Defence Ltd (Tenix) 3, the identification of an ambiguity involves “an objective assessment of the words used in the provision under examination. The words used are construed having regard to their context…”.4 The Applicants submitted that as observed by Munro J in re Re Linfox - CFMEU (CSR Timber) Enterprise Agreement 1997 that an ambiguity requires that the words in the provision are susceptible to more than one meaning.5

Is the clause ambiguous?

[20] The Applicants submitted that whilst the phrase “paid for all purposes of the Agreement” is not specifically defined in the Agreement, the term is widely used in industrial instruments, has a clear, historical and widely accepted industrial meaning and is therefore not ambiguous. The Applicants submitted that ‘paid for all purposes’ with reference to a particular industrial instrument is generally accepted as being that if an employee is entitled to receive a particular loading or allowance, that loading or allowance is included in the base rate of pay of that employee for the purposes of calculating other entitlements under that instrument, such as penalty rates or overtime and when the employee is on annual leave. The Applicants submitted that a similar definition of ‘all purpose’ exists in a number of modern Awards including the Concrete Products Award 2020. 6

[21] Relevantly the Applicants noted that the allowances contained in Clause 13.1 are not included in Clause 14.1 of the Agreement, which would enable additional penalties to be added to those allowances. The Applicants submitted that the parties to the Agreement “knowingly set up a system where some allowances would be treated differently to other allowances”. The Applicants submitted that the allowances contained in Clause 13.1 were designated as “paid for all purposes of the Agreement” and were not caught by the limitation on other penalties being placed on them by Clause 14.1. Having regard to the ‘industrial meaning’, the Applicants submitted that the provision is not ambiguous when examined in the context of the Agreement.

[22] However, the Applicants submitted that in the event the Commission determines that the phrase “paid for all purposes of the Agreement” is ambiguous, the definition that should apply is the accepted general industrial meaning of the term, and noting that the allowances paid under Clause 13.1 are not included by any reference in Clause 14.1 “Penalties not cumulative”.

How has the Agreement been applied in practice?

[23] The Applicants relied on the evidence of Mr Burke and Mr Carlon that the wording used in Clause 13.1 and the practice of including the allowances in the ordinary hourly rate of pay has been longstanding. 7

[24] Mr Carlon’s evidence was that payslips as far back as 2001 did not separately record the payment of eligible allowances, but just an hourly rate of pay. Mr Carlon’s payslips do not show that he has been paid a tool allowance of $28.07 or a disability allowance of $91.86, nor does it show his weekly base rate of pay of $1927.64. The Applicants noted that Mr Carlon’s payslip shows an hourly rate of $53.8834. 8 In contrast, while an AMWU member’s payslip9 shows weekly tool and disability allowances, it shows an hourly rate of pay of $44.11; despite Table 1A of the Agreement showing that a Level 1 Mechanical Trades employee would receive a weekly rate of pay of $1,676.22; not an hourly rate of pay.10

[25] Mr Carlon’s evidence was that since 2006, there has not been any discussions about the payment of the allowances contained in Clause 13.1, save for general discussions about increases in wages and allowances. 11 The Applicant’s also relied on Mr Carlon’s research that the wording of Clause 13.1 in the Agreement is consistent with the wording in previous enterprise agreements and NSW State Awards that covered the employees at the sites since 2004.12

[26] The Applicants submitted that the understanding of the parties, as reflected by the consistent wording in previous industrial instruments, has been to treat the allowances under Clause 13.1 as part of the calculation of an hourly rate of pay for both ordinary time and for overtime, even though they are both listed in the Agreement as a weekly amount.

Does it matter if the payment is listed as a weekly rate of pay in the enterprise agreement?

[27] The Applicants submitted that to comply with Clauses 17.1 and 17.2 of the Agreement, the Respondent must translate a weekly rate into an entitlement that is paid in hours. The Applicant submitted that generally, this would be done by dividing a weekly rate by the number of ordinary hours worked per week. The Applicant submitted that on examining the payslip at Annexure MC-7, this is what the Respondent has done to determine the amount to pay for overtime worked.

[28] The Applicants submitted that there is nothing incompatible with being able to translate an allowance that is payable on a weekly basis into an hourly rate for the purposes of overtime. The Applicants noted that a number of industrial instruments, including modern awards, express ‘all purpose’ allowances as weekly amounts, whilst these allowances form part of the overtime hourly rate of pay. The Respondent has been following this practice since 2001.

Conclusion

[29] The Applicants provided, in summary, that an allowance “paid for all purposes of the Agreement” is something that has a widely known and understood meaning and application. It is an entitlement that goes to the calculation of any penalty rates that apply. Further, there is no limitation on the word ‘all’.

[30] The Applicants submitted that the Agreement reflects wording that goes back to the 2004 Award and there has been no differentiation between the ability to calculate an hourly rate of pay from weekly base rates of pay and allowances that are expressed as a weekly rate until now.

[31] The Applicants submitted that, given the widely known and understood meaning of the phrase “paid for all purposes of the Agreement”, clause 13.1 is not ambiguous and can be determined on its plain meaning. Further, merely expressing an allowance as a weekly amount is not incompatible with it being included as an all purpose rate; particularly when employees are paid a weekly, not hourly, base rate of pay.

[32] The Applicants concluded that the answers to the questions put forward for arbitration are “no”.

Respondent’s Submissions

[33] The Respondent submitted that the dispute concerns its application of the:

•  Licence Allowance – clause 13.1(a);

•  Tool Allowance – clause 13.1(b); and

•  Disability Allowance – clause 13.1(c),

•  does not relate to the Bricklayers allowance at clause 13.1(d) of the Agreement, as the Company no longer employs bricklayers (the Allowances).

[34] The Respondent noted that on the evidence before the Commission, the Company traditionally applied the ‘Compounding Approach’ to the Allowances. However, it submitted, in about November 2020, it discovered it had mistakenly been paying the Allowances on an hourly rather than weekly basis as required under the Agreement, and had mistakenly factored the Allowances into the base ordinary rate of pay for the purposes of calculating overtime and other penalties. 13 The Respondent submitted that in December 2020, it determined to correct its mistaken application of the Allowances in relation to:

•  any new employee engaged by the Company following December 2020; and

•  any existing employee (engaged by the Company prior to December 2020), but only if, and when, an existing employee is permanently promoted to a higher classification at a future point in time. 14

[35] The Respondent noted that existing employees, as at December 2020, did not suffer a reduction in their pay as a result. The Respondent submitted that there are 196 employees covered by the Agreement, 26 of whom were employed following the date of the Company’s correction to the application of the Allowances in December 2020 and 4 employees who have been promoted to a higher classification since the date of the correction. Therefore, 30 employees are currently paid in line with the Stand-alone Approach, whilst all other employees are paid in line with the Compounding Approach. 15

New Enterprise Agreement Negotiations

[36] The Respondent submitted that on 15 April 2021, the parties began negotiations for a new enterprise agreement. As part of its log of claims, the Union referred to “Disability Allowance – Supposed to be hourly – written as weekly”. In its submissions, the Respondent outlined various correspondence and bargaining meeting discussions with the AMWU regarding the Disability Allowance, although the parties were unable to reach a resolution. On 4 June 2021, Mr Stewart indicated that the AMWU would be lodging a dispute with the Commission about the matter.

[37] The Respondent submitted that it had made a number of requests to meet with Mr Stewart (AMWU Organiser) outside of the agreement negotiations process to discuss the matter, however these requests were not responded to by the Union.

Jurisdictional Objection

[38] The Respondent submitted that for the Commission to have jurisdiction to determine this dispute, the Applicants must have complied with all steps of the dispute resolution clause of the Agreement before bringing the matter before the Commission. 16

[39] The Respondent submitted that while it is arguable that the Union has complied with the dispute settlement procedure in relation to the Disability Allowance, there has been no compliance in relation to the Licence Allowance or Tool Allowance. The Respondent submitted there were no discussions between the parties in relation to these two allowances, therefore, it is open to the Commission to find that the Unions have not complied with the dispute settlement procedure in relation to any of the Allowances, but certainly in relation to the Licence Allowance and Tool Allowance.

Merit Based Objections

[40] Further and in the alternative, the Respondent submitted that the Applicants’ application should be dismissed on merit grounds.

[41] The Respondent submitted that the starting point for interpretation of an enterprise agreement is the “ordinary meaning of words, read as a whole and in context”, citing the principles outlined in WorkPac Pty Ltd v Skene (Skene) 17and “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers Union (AMWU) v Berri Pty Limited (Berri).18 The Respondent submitted further that in Tenix, the Full Bench held that a disputed provision of an enterprise agreement needs to be considered by reference to the other provisions of the agreement which interact with it. The Respondent submitted that on proper application of the relevant principles for interpretation of an enterprise agreement, the Commission must reject the Compounding Approach and endorse the Stand-alone Approach in this matter.

[42] The Respondent submitted that the Applicants’ interpretation case is unconvincing. The Respondent submitted that firstly, the Commission’s tasks is not to ascertain the meaning of the words “paid for all purposes” by having regard to an ‘alleged industrial meaning’ of the words. It submitted rather, the Commission’s task is to determine the meaning of the words having regard to the use of the words within the context of clause 13.1 and within the context of the Agreement as a whole. The Respondent submitted that the Applicants’ cases “hyper focuses on the mere existence of the words “paid for all purposes” in clause 13.1 of the Agreement, without having any regard to the context in which those words are used in the clause nor their interaction with other clauses in the Agreement”.

[43] The Respondent cited a decision in MSS Security Aviation Qld Enterprise Agreement 2014-2017 (which is properly cited as ‘MSS Security Pty Ltd t/as MSS Security’)(MSS Security)) 19 Deputy President Sams was required to consider the meaning of the words “all purpose allowance will apply per hour” in relation to an Aviation Allowance prescribed by the enterprise agreement. The Respondent cited paragraph [99] of that decision, where the Deputy President stated:

“While I acknowledge the general industrial understanding of the words ‘all purpose’ is as the union contends, it does not follow that it is a universal understanding in that there may be exceptions to that general understanding. For the following reasons, I consider the words ‘all purpose allowance’ used in the 2011 and 2014 agreements’ Aviation Allowance clauses are examples of this exception”.

[44] The Respondent submitted therefore, while there may be a general industrial understanding of the words “all purpose”, that is not determinative of the matter.

[45] The Respondent submitted secondly, the fact that several modern awards contain a definition of “all purpose”, including the Concrete Products Award 2020, is an irrelevant consideration. The Respondent submitted that the Agreement the subject of this dispute is a comprehensive agreement, which excludes the application of any other industrial instrument including any modern award. The Respondent cited clause 3.3(a) of the Agreement:

“Clause 3.3 Comprehensive Agreement

(a) This Agreement regulates the terms and conditions of employment of the employees covered by it to the total exclusion of any other industrial instrument that might otherwise apply including, but not limited to, any modern award or transitional instrument.”

[46] Further, the Respondent noted the Concrete Products Award 2020 has no application to the industry of cement manufacturing; and the relevant modern award covering the industry of the Respondent is the Cement, Lime and Quarrying Award 2020. The Respondent noted that while that award also contains a definition of “all purposes”, that definition has no application to the Agreement for the reasons already stated.

[47] The Respondent submitted thirdly, there is no legal merit to the Applicants’ contention that the wording of clause 14.1 supports the Applicants’ interpretation of clause 13.1. The Respondent submitted the fact that clause 14.1 makes no mention of clause 13.1 of the Agreement does not, as the Applicants assert, “enable additional penalties to be added to” the clause 13.1 Allowances. The Respondent submitted that the absence of a reference in clause 14.1 to the clause 13.1 Allowances, or any other penalties and allowances in the Agreement, does not mean that all such other penalties and allowances are subject to a penalty on penalty type calculation.

[48] By way of example, the Respondent noted that at clause 6.1(a) of the Agreement, casual employees are provided a 25% casual loading. The Respondent submitted that this casual loading is not referred to in clause 14.1 either, however, this does not mean that casual employees are entitled to a penalty on penalty in respect of casual loading. The Respondent also noted clauses 17.1 and 18.3, which provide the overtime penalty rate and public holiday penalty rate respectively. The Respondent submitted the fact that the overtime and public holiday penalties are not referred to in clause 14.1 would not ‘enable’ an employee to be provided with both the overtime rate and the public holiday rate for working overtime on a public holiday.

[49] The Respondent acknowledged it had historically factored the Allowances into the base ordinary rate for the purposes of calculating overtime and other penalties, however, it submitted that the historical arrangement does not inform the proper application of clause 13.1 of the Agreement, “particularly where it has made an error in the historical application of the clause”. 20

[50] The Respondent cited the decision in Shop, Distributive and Allied Employees Association v Woolworths Ltd, 21 which considered historical arrangements adopted by an employer as follows:

“…There is authority that, if a provision has appeared in a series of agreements between the same parties, and if they can be shown to have conducted themselves according to a common understanding of the meaning of that provision, then it can be taken that they have agreed that the term should continue to have the commonly understood meaning in the current agreement….It is necessary to take great care in the application of this limited principle, to avoid infringing the general principle that the conduct of parties to an agreement cannot be taken into account in construing the agreement. For the limited principle to operate, there must be clear evidence that the parties have acted upon a common understanding as to the meaning of the relevant provision and not for other reasons, such as common inadvertence as to its true meaning. See Australian Liquor, Hospitality and Miscellaneous Workers Union v Prestige Property Services Pty Ltd [2006] FCA 11 at [44].

In the present case, there is no evidence to indicate that there was any common understanding between the applicant and the respondent about the meaning of the relevant clauses in preceding agreements. All that has been established is that, until 2004, the respondent had a practice of paying employees entitled to long service leave at a rate of pay inclusive of penalties and shift premiums, if applicable. There is no evidence as to why it did this. The reason might have been inadvertence on the part of those responsible for making the payments as to the presence of the definition in the LSL Act. It may have been an act of generosity on the part of the respondent, from which it has now resiled…”

(Respondent’s emphasis)

[51] The Respondent submitted that the Applicants have not filed any evidence which establishes that the parties to the Agreement had acted upon a common understanding as to the meaning of the words “paid for all purposes of this Agreement” as used in clause 13.1 of the Agreement. The Respondent submitted rather, the parties’ evidence establishes that clause 13.1 of the Agreement was not the subject of any discussions between the parties at all until mid-2021 and only then in the limited context of the Disability Allowance.

The proper interpretation of clause 13.1 of the Agreement

[52] The Respondent submitted that while considering the words “paid for all purposes of this Agreement” in isolation might support the Compounding Approach advanced by the Applicants, that is an incorrect approach to take to the interpretation of an enterprise agreement, having regard to the Full Bench decision in Tenix. The Respondent submitted that consideration of the words “paid for all purposes of this Agreement”, both within the context of clause 13.1 of the Agreement as well as by reference to the other provisions of the Agreement which interact with clause 13.1, demonstrates that the meaning of the phrase is clear, unambiguous and supports a conclusion that the Allowances are ‘stand-alone’ and added separately on a weekly basis to an employee’s wage for the week.

[53] The Respondent submitted that no provisions of the Agreement expressly state that the Allowances must be factored into the base ordinary rate for the purposes of overtime and other penalties. The Respondent highlighted the title of clause 13 - ‘Additions to Wage’ – which it submitted indicates that the allowances prescribed in clauses 13.1 and 13.2 are ‘additions’ to an employee’s weekly wage rather than elements factored into the base ordinary rate of pay. Similarly, the Respondent noted that the opening words of clauses 13.1 and 13.2 are:

“In addition to the rates of pay ascertained from clause 12.2, an employee shall receive the following allowances…”

[54] The Respondent submitted that the language used refers to the allowances as an ‘addition’ to the rates of pay prescribed by the Agreement rather than the allowances being factored into, or forming a component of, the base ordinary rate of pay.

[55] The Respondent submitted that both the Licence Allowance and Tool Allowance referred to in clause 13.1 relate to the Company covering the cost of items/permissions required by tradespeople to undertake work. The Respondent submitted therefore, these allowances are not provided in connection with either the ordinary or overtime hours worked by an employee, and it would be an industrial anomaly for a payment made by an employer to an employee, to cover expenses, to form part of the base ordinary rate of pay for the purpose of calculating overtime and other penalties.

[56] The Respondent also submitted that clause 13.2 of the Agreement - titled ‘Allowances Not All Purpose’ - at subclauses (a), (b), (c) and (i) expressly refers to each such allowance being calculated on the employee’s “ordinary time rate of pay” rather than on a rate of pay that has the Allowances factored into it.

[57] As to clause 12.1(a), the Respondent submitted the Agreement expressly states that the ordinary time rate of pay an employee is entitled to is as set out in Part 10 Table 1A of the Agreement. The Respondent submitted that there is nothing in clause 12.2(a) that requires any allowances whatsoever to be factored into the ordinary rates set out in Part 10, Table 1A.

[58] As to the overtime provision at clause 17, the Respondent submitted it requires overtime to be calculated at the rates of “time and one-half” and “double time”, and there is nothing in that clause which requires the Allowances to be included in the overtime rate. Further, the Agreement provides at clause 18.2 that the rate of pay for Sunday work shall be at double the ordinary rate of pay whilst clause 18.3, which prescribes the rate of pay for public holidays, states that the rate of pay will be “double and a half the ordinary rate of pay”. The Respondent submitted that if employees were entitled to have the Allowances factored into the base ordinary rate of pay for the purposes of calculating their pay for work on a Sunday and public holidays, the Agreement would expressly state this entitlement.

[59] The Respondent also made reference to clause 21.3, which provides that a day worker shall be paid at the rate of “time and one half of ordinary time” for all work done during a scheduled meal break and thereafter until a meal break is taken. The Respondent submitted that there is no reference here to the working through a meal break penalty being calculated on the ordinary rate of pay inclusive of the Allowances.

[60] The Respondent referred to the shift allowance in clause 24.1 of the Agreement, which provides that an employee working afternoon or night shift is paid an additional allowance as set out in Item 15 of Table 2 – Other Rates and Allowances, of Part 10 Monetary Rates. The Respondent noted that there is no reference in the shift allowance clause to the rate of pay for a shift worker including the Clause 13.1 Allowances, rather Table 2 – Other Rates and Allowances at Item 15 refers to a flat additional shift payment.

[61] Further, the Respondent submitted that clause 29.2 of the Agreement provides that the 20% annual leave loading is to be calculated “excluding any other allowances, penalty rates, premiums, overtime or any other payments prescribed by this Agreement”. The Respondent submitted that if the clause 13.1 Allowances were intended to be factored into an employee’s base ordinary rate of pay for the purposes of calculating overtime and other penalties and loadings (such as the annual leave loading), then clause 29.2 of the Agreement would reflect this, however it provides the contrary.

[62] The Respondent also cited the redundancy entitlements under the Agreement, noting that clause 11.4 provides:

“For the purpose of this subclause for:

(a) day workers’ weeks’ pay shall include the weekly ordinary time rate and any all purpose allowances”.

(Respondent’s emphasis)

[63] The Respondent submitted that if other entitlements were intended to be calculated with the Allowances being included, each relevant provision of the Agreement would expressly state this in the same way as it has been stated with regard to redundancy pay.

[64] The Respondent therefore concluded that when the words “paid for all purposes of this Agreement” as used in clause 13.1 are read together with the other clauses of the Agreement, the Agreement does not reveal any intention whatsoever for the Allowances to be factored into the base ordinary rates of pay for the purpose of calculating overtime and other penalties. The Respondent submitted that the Allowances are ‘all purpose’ in the sense that employees must receive the allowances on a stand-alone basis each week regardless of the work performed, and are entitled to receive the full extent of the weekly allowance even when no work is performed at all, such as when an employee is on annual leave, sick leave, long service leave, or on an RDO. The Respondent submitted this is contrasted with the allowances in clause 13.2 of the Agreement, which are described as ‘Not All Purpose’.

Regard to relevant authorities

[65] The Respondent cited the 13 July 2015 4 yearly review of modern awards decision, 22 in which the Full Bench made clear that despite including a definition of “all purposes” in modern awards, a determination of whether or not a particular payment is to be factored into the base ordinary rate of pay for the purpose of calculating overtime and other penalties was to be determined on a case-by-case basis:

“[47] We are not persuaded to depart from established practice in relation to the operation of all purpose payments and how they interact with an employee’s rate of pay. Definitions of ‘all purpose’ and ‘ordinary hourly rate of pay’ will be inserted into all affected awards based on the wording in paragraphs [35] and [91]. Any issues as to whether a particular payment is payable for all purposes, and, in particular, whether an allowance should be added to a minimum rate before calculating a penalty or loading, will be dealt with on an award-by-award basis. Ultimately the resolution of these issues will turn on the construction of the relevant award and the context in which it was made.” 23

[66] These observations were considered by Deputy President Sams in the MSS Security case:

“Secondly, in the Modern Award Review Decision, the Full Bench acknowledged that despite the general understanding of the meaning of ‘all purpose’, it was open to a party to make an application to depart from the general understanding in particular circumstances”. 24

[67] The Respondent noted that the MSS Security case involved the interpretation of an

Aviation Allowance in the MSS Security Aviation Qld Enterprise Agreement 2014-2017 which

provided:

“The following all purpose allowance will apply per hour to employees working at an airport or seaport performing the following function…”.

[68] The Respondent submitted that the Deputy President made reference to the argument advanced by the employer as follows:

“While the union claims “all purpose” had a generalised and well understood meaning, one needs to look at other entitlements, such as loadings, penalties and overtime and ask whether the language used in these provisions, picks up the Aviation Allowance in a way which indicates it is to be compounded.” 25

[69] The Deputy President also observed at [107] that the union’s claim for the Aviation Allowance to be incorporated into the base rate of pay for the purposes of calculating overtime and other penalties, resulted in “a penalty being paid on another penalty.” The Respondent noted that the Deputy President ultimately found that while there may be a general industrial understanding of the words ‘all purpose’, there were exceptions to that general understanding and that the words ‘all purpose allowance’ as used in the Aviation Allowance clause was such an exception.

[70] The Respondent submitted that the issue of a penalty on a penalty situation has been considered in other decisions of the Commission, including by Commissioner Williams in Transport Workers’ Union of Australia v SCT Logistics, 26 in which the Commissioner stated:

“[16] In terms of general principles it is well established that it is not usual that an industrial instrument will provide for the payment of a penalty on a penalty…

[17] That is not to say that the parties to an agreement cannot have agreed to for example a shift penalty being applied to an hourly rate after that hourly rate had first been increased by a casual loading. That is a matter for the parties negotiating the agreement, however it would be hoped that if that was the parties’ intention this departure from the general rule would be expressly made plain in the agreement.”

(Respondent’s emphasis)

[71] The Respondent submitted that as to the current dispute, there is nothing in the Agreement which expressly demonstrates that the parties to the Agreement intended to depart from the general rule against an industrial instrument entitling an employee to a penalty on a penalty. Having regard to the authorities as outlined, the Respondent submitted that the Stand-alone Approach as advanced by the Company is the correct approach, and the Applicants’ application must be dismissed.

Applicants’ Submissions in Reply

[72] The AMWU filed joint submissions in reply on behalf of the AMWU, AWU, CEPU and CFMMEU.

[73] The Applicants submitted that the Respondent has sought to recharacterize the dispute, by arguing how the phrase “paid for all purposes of the agreement” is applied. The Applicants submitted that the Respondent argues that “paid for all purposes of the Agreement” is an ambiguous phrase, and has relied on the principles that the general understanding of the industrial meaning of “all purpose” is not a universal understanding.” 27 Further, the Respondent highlights the issues of “penalty on penalty” being “not usual”.28 The Applicants did not dispute these principles, however submitted that even if the Commission agrees with the Respondent that there is ambiguity in clause 13.1, the Respondent’s argument as to the Stand-alone Approach should be rejected. The Applicants restated their position that the phrase “paid for all purposes” of an industrial instrument has a generally understood industrial meaning. Further, when there is a general understanding that certain allowances will be included in the calculation of penalties, you do not need to highlight the obvious in that clause. The Applicants submitted instead, “you would more likely outline when the exception applies”.

[74] The Applicants did not contest that there has been no negotiation of the terms of clause 13.1 since at least 2006, until the negotiations for the replacement to the current agreement. The Applicants submitted the wording of the clause first appeared in the Blue Circle Southern Cement Ltd (State) Award 2004 (it is not in dispute that Blue Circle Southern Cement is the former owner/operator of the Respondent’s workplace) and this should be considered in any comparison of the text. The Applicants submitted that the clause has remained constant, save for a change from “Award” to “Agreement”, while the terms concerning the eligibility and calculation of other entitlements have changed around it. The Applicants submitted the inclusion of ‘paid for all purposes of Award’ in the 2004 Award suggests there was a deliberate intent on the parties to treat the allowances in a particular way. The Applicants also noted that, regarding the disability allowance, the relevant State Award in 2002 already provided it to be paid as a weekly amount, however in 2004 there was a “deliberate decision to name these allowances as ‘all purpose’, while other allowances were not”.

[75] The Applicants also noted that regarding the meaning of ‘all purpose’, the Allowances have been included for the purposes of calculating overtime rates of pay for a significant amount of time and have not appeared separately on a payslip.

[76] The Applicants submitted that taking this into account, “a difference in the wording of the instrument concerning the annual leave loading makes more sense”. Regarding the 2004 Award, the Applicants submitted the calculation of annual leave loading excludes all allowances that would have been paid. The Applicants submitted that this clause, like clause 13.1, has been replicated in the current enterprise agreement. The Applicants argued that this suggests that the exclusion of all allowances from the calculation of this entitlement suggests that it was agreed that the calculation of the loading was the exception to the general understanding, rather than the allowances themselves.

[77] The Applicants submitted the lack of specificity contained in the calculation of overtime payments also supports an application of the general industrial understanding rather than the exception. The Applicants submitted that when the Respondent determined a rate of double time or time and one half time for payment of overtime, they included the all purpose allowances in that calculation, until it changed the payments for some workers in late 2020.

[78] Further, the Applicants submitted that the Agreement was not ‘built from scratch’, and contains significant portions with their origins in state-based Awards. The Applicants submitted it is therefore ‘dangerous’ to assume that a clause that was introduced at a later time – such as the calculation of redundancy pay – automatically changed the meaning of “all purpose” for the discussion of the Allowances.

[79] The Applicants noted the Respondent’s argument that it would be an anomaly for an expense related allowance (such as the Tool Allowance) to be included in the calculation of penalties for matters such as overtime. The Applicants said this is incorrect; while a tool allowance is treated as an expense allowance under the Cement, Lime and Quarrying Award 2020, for the purposes of the Manufacturing and Associated Industries and Occupations Award 2020 and the Electrical, Electronic and Communications Contracting Award 2020 they are expressly included as all-purpose. The Applicants submitted that these are trade standard conditions and not mere anomalies.

[80] The Applicants agreed that the relevant authorities suggest the general understanding of ‘paid for all purposes’ does not apply in all circumstances. The Applicants argued, however, that this is no basis for the general understanding to not apply.

[81] The Applicants submitted the facts of the present dispute are distinguishable from cases such as MSS Security, noting the allowances are commonly included in the calculation of penalties, including by the Respondent. The Applicants also submitted that even though Saunders DP believed that penalties on penalties were “not usual” in the UGL case, he still supported the Union’s argument that the shift loading for casual workers was calculated on a compounding basis, not a stand-alone one. 29

[82] The Applicants restated their position that the Respondent’s change to the payments of the Allowances are contrary to the Agreement, and for their reasons outlined, the answers to the questions submitted by the Applicants should be “no”.

Jurisdiction issues

[83] In response to the Respondent’s jurisdictional objections, the Applicants submitted that the dispute over payment of allowances was first raised by an AMWU member in or about March 2021, concerning his pay. The Applicants submitted that as a mechanical tradesman, his query would have included both the disability and tool allowances. 30 The Applicants did, however, acknowledge that the escalation of the dispute to a more senior level was focused on the disability allowance.

[84] Having regard to these matters and based on the wording of the clause, the Applicants submitted the Commission has the jurisdiction to rule on the payment of the allowances.

Submissions at Hearing

Applicants’ submissions at hearing

[85] The AMWU submitted at hearing that ‘paid for all purposes’ means that the allowances are included in ordinary time, and do not stop applying “when the clock ticks off”.  While the Respondent submitted that a tool allowance is generally an expense allowance, the AMWU submitted that a tradesman who is using tools and eligible for a tool allowance does not throw away their tools at knock-off time, they keep going into overtime with them. 

[86] Likewise, the AMWU submitted that if an employee is working in an environment that gives rise to a general disabilities allowance because of the dust, inclement weather, or any other disabilities that have been rolled into that allowance, the environment does not become suddenly different once ordinary time turns into overtime.

[87] As to licences, the AMWU submitted that if an employee holds a licence, they hold and use that licence wherever they are performing their work, including whether that work is done in ordinary time or overtime. The AMWU submitted that employees should still be compensated for those allowances whenever the employee is performing that work.

Mr Singh’s evidence

[88] The AMWU submitted that further to Mr Singh’s evidence, one party to the Agreement has read one clause and changed its operation without any discussion or without any consultation with the other parties to the Agreement. The AMWU submitted this was done in isolation, without regard to the historical evidence or meaning of the Agreement. The AMWU submitted that Mr Singh did not confirm any shared understanding of ‘paid for all purposes’, as he has not dealt with these sorts of allowances before and no one else from his team gave evidence. The AMWU therefore submitted it is unclear why there has now been a departure from the historical application and general industrial meaning.

Consultation provision

[89] Regarding the consultation clause in the Agreement, being the model term, I asked Ms Presdee to give a submission as to why the Company needed to consult any of the parties to the Agreement in relation to their change to the interpretation of clause 13.1. Ms Presdee gave the following submission:

“MS PRESDEE:  There may not be an obligation under the clause, although I might suggest that if you're changing a significant component of someone's pay or if you're actually telling somebody that their pay may change, if they take a different position under the enterprise agreement, that would actually fall under the – it does affect, it may affect opportunities for promotion and other ranges, other aspects of employment.  A person, if all of a sudden, if you're told that you're no longer going to get the allowance that you are currently receiving, included in your overtime, that may actually be an impact on whether or not you choose to go for promotion.

THE COMMISSIONER:  But that becomes your choice though, doesn't it, with the employees (indistinct).

MS PRESDEE:  But it is an (indistinct).  It is.  It is your choice.

…

But it does impact your decision.  It could impact I should say – it could impact your decision.” 31

CEPU’s submissions at hearing

[90] The CEPU adopted the submissions of the AMWU, however also noted that as to the electrical licence allowance, evidence by Mr Collier provided that the licence allowance is paid for various reasons, including to be a qualified supervisor and to perform particular work. The CEPU submitted that in cross-examination, Mr Singh provided that the electricians licence allowance is paid for compliance with particular regulations, which the CEPU clarified are: the Home Building Act 1989, section 14; the Gas and Electricity Consumer Safety Act 2017,at section 75(1); and in the Work Health and Safety Regulations, regulation 155.

[91] The CEPU submitted that this lends to the industrial context argument, that the electrical licence allowance, in particular, is paid in compliance with those obligations under those Acts to maintain an electrical licence at all times while performing electrical work. In particular, in the case of the Work Health and Safety Regulations, the obligation to engage in testing on any electrical equipment before commencing electrical work to determine whether or not it is energised. That is, the CEPU submitted that in this context, it is clear that the electrical licence allowance is paid not only when someone is in ordinary time but also for work performed in overtime.

Respondent’s submissions at hearing

Consultation provision

[92] The Respondent submitted that on an objective view, the consultation provision within the Agreement is not triggered in these circumstances. The Respondent submitted that there has been no major change to production, program, organisation, stock shelf or technology.

Jurisdiction

[93] The Respondent expanded on its jurisdictional objection that the dispute resolution clause had not been complied with by the Applicants. The Respondent outlined the mandatory steps in the dispute resolution procedure, including the requirement that the Commission be satisfied the parties have made ‘genuine attempts’ at resolving the dispute. The Respondent cited the decision in Shields v Alfred Hospitals, 32 in which Senior Deputy President Kaufman considered a provision of a dispute resolution clause that required the parties to first make genuine attempts to resolve the dispute at the workplace level before bringing the matter before the Commission. The Respondent submitted that where genuine attempts have not been made, section 739(3) of the Act provides that the Commission cannot exercise power under a dispute resolution provision contrary to any limitations prescribed by the provision itself would deprive the Commission of jurisdiction.

[94] As to the current dispute, the Respondent submitted that the Commission cannot be satisfied that the Applicant made genuine attempts to resolve the dispute at the workplace level. It submitted that there is no evidence which indicates that there were any discussions with the relevant site manager or HR representative in relation to the tool allowance and license allowance. The Respondent noted the Applicants concession that escalation to the more senior workplace level focussed on the disability allowance and not the other two allowances. The Respondent submitted that the Applicants’ case at its highest, is that the disability allowance was raised with Mr Singh however no detail of what was said has been provided. The Respondent submitted that this goes to the issue of whether or not there was genuine attempts made to comply with the dispute resolution clause in relation to the disability allowance.

[95] The Respondent referred to the recent Full Bench decision in Seo v Bindaree Group Pty Ltd. 33 The Respondent noted that this Full Bench decision considered the fact that Mr Seo sought to add another element to his dispute, after notifying the dispute to the Commission. The Respondent submitted that, despite the second aspect of Mr Seo’s claim having a similar characteristic to the first aspect of his claim, the Full Bench found it had no jurisdiction to determine the second aspect and it had not been raised in line with the dispute resolution clause. The Respondent noted this was found despite the respondent in that matter having consented to the broadening of the dispute.

[96] Further to questioning by me at the Hearing, the Respondent submitted that an adjournment of the matter to allow the parties to have discussions about the allowances did not resolve the jurisdictional issue. The Respondent submitted that the discussions needed to occur before the matter came before the Commission, which was not the case. The Respondent submitted in any event, during the period of the adjournment the discussions related to the disability allowance:

“…But are you saying that in all of those discussions and meetings that you had and there was at least two without the Commission being present, that that wasn't consultation in accordance with the disputes procedure?

MR DONNELLY:  In relation to the disability allowance if you find, Commissioner, that those – that discussions that occur after the matter has been brought before the Commission can go to satisfying the jurisdictional element then I accept and concede that there were detailed discussions in relation to the disability allowance following the matter coming before the Commission.

THE COMMISSIONER:  Okay, thank you.

MR DONNELLY:  In relation to the other elements.  And, Commissioner, you will recall that the matter came first before the Commission, the matter was adjourned and you will recall the company – and I am happy to say this on record and way to the without prejudice nature, but the company made a without prejudice offer in relation to this matter and that was to give the unions the biggest slice of the pie and give them what they wanted in relation to the disability allowance.  And that was the focus of the union's concerns.  That's why that offer was made and you may recall the company thought they were over the line with that offer.  We came back before the Commission on the last occasion for the conciliation process and it's only at that time our offer was rejected on the basis of the ETU saying, 'No.  We essentially want all of these allowances.'

So the focus of even during that two-week period or the three-week period the focus of discussions was on the disability allowance and demonstrated by the fact that our company put that without prejudice offer in relation to the disability allowance.  I can't say anything more about it than that, Commissioner.  That's as high as I can put it.” 34

Mr Singh’s evidence

[97] Mr Singh advised that the only reason that the Respondent changed its position in relation to the payment of these allowances was because they were identified as weekly payments rather than hourly payments in the Agreement:

“Okay.  That's – okay, it is important that you have the correct interpretation but you were told that there was an error.  It wasn't your discovery that there was an error.  Is that correct?---Correct.

On what grounds were you told there was an error?---On the basis when the clause was reviewed.  It came up.  I understand it came up in – somebody had picked it up.

And why was it an error?---Because I think in the enterprise agreement it had – when you look at clause 13.3 – sorry, 13.1 – it states that those particular allowances are to be paid weekly, rather than what we were actually doing which was paying it hourly.” 35

[98] The Respondent gave submissions regarding my question to Mr Singh about whether discussions about the electrical license or the tool allowance would have made any difference to the company's position. The Respondent submitted that the transcript would likely reveal that Mr Singh did not properly understand the question put to him. The Respondent submitted that Mr Singh’s response was that those other tool allowances had not been discussed.

[99] Further, the Respondent submitted that even if Mr Singh made a concession that the company's position would not have changed, that does not determine the matter:

“THE COMMISSIONER:  Mr Singh, I have a few questions.  In relation to a comment that Ms Presdee just raised in relation to this jurisdictional objection that has been identified by Mr Donnelly, if the unions had have sat down and talked to you in relation to the changes to the electrical license allowance and the tool allowance would the company's answer have been any different?---No, that's right.  It would be the same, your Honour, in the sense that we have had no discussion in relation to those – the two issues you have just referenced.” 36

[100] The Respondent submitted that is “putting the cart before the horse” and it does not overcome the Respondent’s jurisdictional objection. The Respondent submitted that regardless of other matters, the Agreement has mandatory steps that must be followed, and which were not followed in this case.

Consideration

[101] I have taken into account all of the submissions and evidence that has been submitted by the parties. The fact that an issue is not mentioned in this decision does not mean that it has not been taken into account.

[102] Whilst the courts have recently reinforced the relevant principles that a Court and Tribunal should follow when interpreting enterprise agreements, the most concise and comprehensive decision which collated all of the historical precedent was the Commission’s Full Bench decision in Berri. 37 Relevantly, in Berri the Full Bench enunciated 15 principles:

“[114] The principles relevant to the task of construing a single enterprise agreement may be summarised 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.”

Determination

Jurisdiction

[103] I do not accept the Respondent’s argument that there is no aspect of this dispute which is properly before the Commission. 38

[104] The Respondent’s argument centres around whether there were “genuine attempts” to resolve the issue before a dispute was notified to the Commission.

[105] In relation to the issue of the disability allowance, I am satisfied that the Union attempted to resolve the issue at the workplace for a number of reasons:

i) Firstly, the Respondent created the dispute by implementing a change to the way that the way the Allowances were to be paid to new starters and newly promoted employees without a single word of consultation;

ii) Secondly, upon discovering this change, the Union requested the Company to revert back to the way that the allowances have been paid for at least the last 17 years;

iii) Thirdly, when confronted by Mr Stewart from the AWMU, Mr Singh pretended to be ignorant about the change, even though he had personally signed off and agreed with the altered interpretation implementation;

iv) Fourthly, the Respondent raised its jurisdictional concerns in relation to the disputes procedure at the first instance conference convened by the Commission on 7 July 2021. On that basis, the parties were directed to further confer on the disputed issues and report back on 23 July 2021;

v) Fifthly, on 23 July 2021 the Respondent tabled a without prejudice offer to resolve the dispute, which included all 3 allowances in one shape or form.

vi) Sixthly, the Applicants did not have the opportunity to discuss this proposal with their members prior to the 3August Conference, due to the Employer not providing the information within the agreed timeframe.

vii) Seventhly, at a conference of 18 August 2021, the Applicants reported that following meetings of members across the three sites of the Respondent, agreement was not able to be reached in relation to the Respondent’s proposal. The Respondent advised that it had tabled its final offer to resolve the dispute. As a result, I came to the conclusion that further consultation or conciliation would be of little utility. Directions were issued at the conclusion of this Conference.

[106] Whilst the Commission is not bound by the principles associated with the laws of equity, it has traditionally followed the practice that the parties must “attend with clean hands”. It stretches the limit of credibility that the Respondent, having changed the way that they paid the Disability Allowance from a time before any of the parties collective memory without uttering a single syllable to any employee or union official, would submit that the Union should not be able to notify a dispute to the Commission because they had not “genuinely attempted” to resolve the dispute at the local level simply because it failed to follow up on an invitation to meet with Mr Singh. I note that I sought to conciliate the dispute on 3 occasions without success as well as directing the parties to confer in an attempt to settle the dispute. I sincerely doubt that a further meeting at the workplace would have resolved the dispute, especially when it involves the interpretation of a long-standing provision of the Agreement.

[107] I find that the Commission does have jurisdiction to determine the dispute in relation to the Disability Allowance following the Commission’s direction to confer after the 7 July 2021 conference.

[108] In relation to the issues of the Tool Allowance and the Licence Allowance, the Union’s processes have either been inadequate or non-existent. Surprisingly, it would appear that the change to the way that the Licence Allowance is paid has not been raised as a dispute by the CEPU until very late in the process. However, based on the evidence of Mr Singh that the Respondent’s position would not have changed had a meeting been convened anyway, there is little utility in directing the parties to confer on the Licence or Tool Allowances. Further, I support the submissions of Ms Presdee that a close reading of clause 13.1 would lead the Commission to the conclusion that a finding in relation to one of the allowances being paid ‘for all purposes’ would result in all of the allowances being paid for all purposes. When looking at the provisions of clause 13.1, it is the preamble that contains the verb, ie, the required action to be undertaken, the sub clauses only identify the actual names of the allowances that are to be paid for all purposes.

[109] For the reasons stated above, I find that the jurisdiction of the Commission in this matter extends to the issues of the Licence Allowance and the Tool Allowance.

Consultation

[110] The Respondent submitted that the Consultation provisions of the Agreement did not apply in this circumstance on the basis that removing the payment of the Allowances on overtime for new employees or promoted employees did not amount to a “major change to production, program, organisation, structure or technology”.

[111] I am aware that the economic definition of production is the result of a variety of inputs, whether that be raw materials, the use of machinery and equipment or the utilisation of labour. I also note the 2012 Full Bench decision in Schweppes Australia Pty Ltd v United Voice - Victoria Branch, supported the identification of wages as an input to production when it stated:

“[45] Accordingly, we find that ‘productivity’ as used in s.275 of the Act, and more generally within the Act, is directed to the conventional economic concept of the quantity of output relative to the quantity of inputs. Considerations of the price of inputs, including the cost of labour, raise separate considerations which relate to business competitiveness and employment costs.” 39

[112] Further, the Explanatory Memorandum of the Act states:

“Clause 205 - Enterprise agreements to include a consultation term, etc.

875. This clause provides that an enterprise agreement must include a consultation term.

876. A consultation term must require the employer(s) to which the agreement applies to consult the employees to whom the agreement applies about major workplace changes that are likely to have a significant effect on those employees. The term must also allow for the representation of those employees during consultation (subclause 205(1)). A person representing the employees could be an elected employee or a representative from an employee organisation.”

[113] For the purpose of a comparison I have utilised a Level 3 Electrical Specialist employed before December 2020 and one employed after December 2020. I note that, in accordance with Part 10 – Monetary Rates, Table 1A, a Level 3 Electrical Specialist is currently paid $1843.76 per week. This translates to $48.52 per hour based on a 38-hour week. Table 2 proscribes that the current A-Grade Electrical Licence Allowance is $63.98 per week, the Tool Allowance for Electricians and Mechanical Fitters is $28.07 per week and that the Disability Allowance is currently $91.86 per week. For a Level 3 Licensed Electrician, these allowances total $183.91 per week, $4.84 per hour, or approximately 10% of the employees’ salary. Based on the Respondent’s new interpretation of clause 13.1 of the Agreement, a new employee or a recently promoted employee would receive 10% less pay for working the same amount of overtime than an employee who was either employed or appointed to their grade prior to December 2020. I find that a reduction of 10% in anything to be a major change, whether it be production, staffing, consultancy fees or hourly rates. I am satisfied that a 10% reduction in the hourly rate paid to an employee whilst working overtime falls within the scope of the term ‘significant effect’ as identified by the Parliament.

[114] I am satisfied and find that the consultation clause in the Agreement was enlivened by the decision of the Respondent to implement a new interpretation to clause 13.1 of the Agreement. It is not in dispute that the Respondent did not consult with either the employees or any of the Unions covered by the Agreement in relation to their new interpretation of clause 13.1 and simply implemented the change.

MSS Security

[115] The Respondent referred me to the decision in MSS Security Pty Ltd t/as MSS Security.In MSS Security, Sams DP accepted that there was a general and common understanding of the meaning of the phrase ‘all purpose’, but that there may be exceptions to this principle:

“[99] While I acknowledge the general industrial understanding of the words ‘all purpose’ is as the Union contends, it does not follow that it is a universal understanding in that there may be exceptions to that general understanding. For the following reasons, I consider the words ‘all purpose allowance’ used in the 2011 and 2014 Agreements’ Aviation Allowance clauses are examples of this exception.

[100] Firstly, the Union accepts that the current wording in the Agreements does not address the Aggregated Rates arrangement so as to easily accommodate the generally understood ‘all purpose’ Aviation Allowance. Indeed, the Union proposed that if any variation was considered necessary, it should only be to make clear that the Aviation Allowance applying to the Aggregated Rates employees is paid according to how MSS has been applying it since 2011. Mr Reed’s final submission was:

‘It would be contrary to authority to exercise a discretion in that way, in my respectful submission.  For those reasons, the application ought to be dismissed.  In the alternative, if there is any variation which might be proposed, the Commission might see some merit in inserting a proviso which made clear that the Aggregated Rate employees are to be treated differently and that they are to receive the aviation allowance in addition to the Aggregated Rate for all purposes.’

[101] In my view, there is no compelling reason why Aggregated Rates employees should be treated differently, let alone detrimentally, as demonstrated by Mr Dalton (see para [68] above). In my view, the small number of employees paid the Aggregated Rate is irrelevant. What is relevant is that both ‘non aggregate’ and ‘aggregate’ arrangements are provided for in both Agreements and this gives rise to an ambiguity or uncertainty as to why one approach to interpretation should be preferred over another. This is especially so when I think the better view is that the words in one clause of an agreement have the same meaning where they appear in another clause, except where the contrary intention is made clear.”

[116] The MSS Security decision can be distinguished on the facts. In MSS Security, there were two types of paid employees working across 2 agreements with the same provisions, those employees who were paid Aggregate Rates and those employees who were paid Non-Aggregate Rates. His Honour found that if he were to apply the Union’s position, that the Aggregate Rate employees would be disadvantaged. This was the principal reason for determining that there can be an exception to the general industrial understanding of the term ‘all purpose’.

[117] In the case before me, the Respondent has created the second class of employee with a detrimental outcome from its new interpretation of clause 13.1. Based on the obiter of MSS Security, this creates the ambiguity in the clause, which His Honour decided was not appropriate to create a situation to create one group of employees in a detrimental manner compared to the other group of employees.

[118] Further, MSS Security has always paid the ‘Aviation Allowance’ as a standalone weekly allowance, dating back to 2010. This allowance has previously been known as a Transport Allowance. I note that the allowance was a ‘live issue’ during the negotiations of the 2014 Agreement and the status quo prevailed.

[119] I also note that a decision by Spencer C in 2013 in United Voice v ISS Security Pty Limited 40 was on point and was followed by Sams DP in MSS Security.

[120] Relevantly, Sams DP paid particular attention to the conduct of the parties and determined what he believed to be the mutual intention and understanding of the parties, ie, that the Aviation Allowance did not form part of the all purpose hourly rate of pay.

[121] These scenarios do not exist in this case. The Disability Allowance and Tool Allowance have been part of an employee’s all purpose hourly rate since 2004. The Licence Allowance has been a component of the hourly rate for licenced electrical tradespersons since 2002. It has been paid in this manner without question or confusion and in the same manner as the applicable State Award and federal Enterprise Agreement.

[122] It is also worth noting that, for the Licence Allowance and Tool Allowance, the common rule NSW State Award for electricians, the Electricians &c Award, these allowances were paid for all purposes of the Award even though these allowances were identified as a weekly payment.

[123] In response to a series of questions from me, Mr Singh agreed that it would be logical for the Licence Allowance and the Tool Allowance to be paid to employees whilst working overtime because the Respondent requires their electricians to work in accordance with a variety of regulations as licensed electricians and also requires tradespersons to use their own tools whilst performing work outside of their ordinary hours.

[124] Mr Singh was unable to make any comment about the Disability Allowance because he did not understand why this allowance was paid.

[125] Further, I do not accept the proposition by Mr Donnelly that Mr Singh did not understand my question in relation to the Licence and Tool Allowances (see paragraph [99] above). Mr Singh is a senior HR practitioner who was the decision maker which led to the changed application of the Agreement without consultation. Whilst Mr Singh’s answer could suggest that he was a little confused, I took his evidence to mean that those two allowances had not been discussed but the answer from the Respondent would be the same.

Substantive Matter

[126] In adopting the principles in ‘Berri’, I am satisfied and find that the phrase “paid for all purposes of the Agreement” have a plain and ordinary meaning. Put simply, it means what it says. An allowance paid for “all purposes” of an award or agreement gets paid for all purposes, ie, overtime, annual leave, personal leave, long service leave, etc.

[127] If I am wrong in relation to my interpretation and the phrase “paid for all purposes” does not have a plain and ordinary meaning, I am satisfied that the parties intended for the 3 allowances identified in clause 13.1 of the Agreement to be paid for all purposes of the Agreement.

[128] Analysing the past practices of the parties, it is not in dispute that the Electrical Licence Allowance was paid for all purposes in the 2002 Blue Circle Southern Cement Award (a NSW State Award). From my previous knowledge and research, the former NSW common rule State Award, the Electricians &c State Award, also paid the Electrical Licence Allowance for all purposes of the Award. It is not in dispute that the Electrical Licence Allowance has been paid on overtime at the Respondent organisation for as long as anyone can remember as part of an eligible employee’s hourly rate. It is also not in dispute that the Electrical, Electronic and Communications Contracting Modern Award also identifies that the Electrical Licence Allowance as an all purpose allowance.

[129] The justification and logic behind the Electrical Licence Allowance being paid for all purposes is obvious and agreed to in the evidence by Mr Singh, ie, a licensed electrician is obligated to work in accordance with the requirements and obligations of the licence, whether that work is part of their normal weekly hours, rostered overtime or on a call in. It matters not if the work is performed on a Monday – Friday, Saturday, Sunday or public holiday, the Regulations continue to apply to the electrician, who faces the prospect of possible criminal prosecution for breaches of these statutory requirements.

[130] The Tool Allowance has a similar history. A Tool Allowance is paid to an employee to provide, maintain and hopefully insure their basic toolkit. The Tool Allowance became an all purpose allowance in the 2004 Blue Circle Southern Cement Award. It was also an all purpose allowance in the Electricians &c State Award. The Tool Allowance was also an all purpose allowance in the Engineers State Award and is an all purpose allowance in the Metal Trades Award.

[131] The justification and logic for the Tool Allowance to be paid as an all purpose allowance was agreed to in evidence by Mr Singh. Put simply, an employee is required to provide and use their own tools whilst at work during normal hours or whilst working overtime. It would not be logical if an employee used their own tools during normal hours only. The use of tools on overtime still carries the risk of the tools being damaged, lost or wearing out. Therefore, the allowance continues to be paid to cover this liability, otherwise the Respondent would be liable to replace any tool lost or damaged whilst being used on overtime. Such a scenario is illogical and open to abuse.

[132] There is no evidence before the Commission as to why a Disability Allowance is paid. However, it is not in dispute that the Disability Allowance has been paid for all purposes at the Respondent’s sites in living memory and was identified as an all purpose allowance in the 2004 Blue Circle Southern Cement Award. It is also not in dispute that the Respondent’s 3 plants are very dusty and dirty work sites, are exposed to the prevailing weather conditions and are located in areas of NSW which can be bitterly cold or excessively hot.

[133] Relevantly, Mr Donnelly agreed with my understanding of why the Disability Allowance is paid:

“MR DONNELLY:  Yes, Commissioner.  That's a fair observation for you to make and in terms of the disability allowance I agree with you that it's purpose is similar to the purpose you have just described.  It is a dusty place and there are areas that are no doubt not the most pleasant areas to work in and I accept that that's the purpose of the disability allowance in this enterprise agreement and for that reason it's a fair question for you to put as the employee not continue to suffer the inconvenience of that in working in such an environment in overtime as well.” 41

[134] It was not uncommon for any number of regularly claimed allowances, such as dirt and climatic allowances,to be rolled up in an ‘all in’ allowance in the 1990’s – 2000’s in order to simplify the payroll process and prevent backpay claims from employees who did not make a claim for these allowances at the relevant time. From memory, the rolling up of allowances formed part of the “second tier” National and State Wage Case offsets. I suspect that this scenario may have occurred in this industry as well.

[135] It is not in dispute that the disabilities associated with working in these plants continue outside of normal working hours. The plant at Marulan does not suddenly become clean simply because the employee is working overtime, nor does it suddenly become 24 degrees Celsius in the middle of July because it might be a Sunday. Logically, the disability continues and so should the payment.

[136] I do not accept the argument that by paying these allowances as “all purpose” somehow results in an employee receiving a penalty upon a penalty. These three allowances are not penalty allowances. It is not comparable to a scenario where an employee works overtime on a public holiday and wants both the public holiday and overtime penalties to apply. I have explained earlier the reasons why these allowances are paid. It is illogical to suggest that they are penalty allowances.

[137] I do not accept the argument that the fixed weekly allowances are set at a level which is more than adequate to compensate employees no matter how many hours they may work in a week. Such a scenario would mean that the value of the allowance would decrease for every additional minute that an employee works over their normal hours. In that scenario, an employee may be better off claiming the old allowances on an hourly rate that were wrapped up into the Disability Allowance. In relation to the Electrical Licence Allowance, I have never heard of the allowance payment being discounted in this manner.

[138] I do not accept the rationale and justification for the change proposed by the Respondent. The fact that the relevant allowances are identified as a weekly allowance is not unique, in fact, history shows that this practice has been the common approach across a variety of Awards. There is no dispute that all three allowances have been described as a weekly allowance in the predecessor Award (the Blue Circle Southern Cement Award) since 2004. I am aware that this practice was contained in the Electricians &c State Award for decades prior to this date.

[139] It is unfortunate that the architect of this change in practice was not called to give evidence to explain the reasons behind this change. It is clear that Mr Singh was not the architect and simply signed off on the proposal, a proposition which Mr Singh accepted was at odds with the logical reasons as to why the Electrical Licence and Tool Allowances are paid for all purposes.

[140] The Respondent has suggested that the Licence Allowance and the Tool allowance are expense related allowances and that they are some type of “cost recovery” payment from the employer. This submission is not accurate. The Licence Allowance is a payment for holding the licence, with all of the competency, skill and responsibility to which the licence holder must work. The requirement for a licence holder to renew their licence and pay an administration fee (currently less than $20 a year) is a requirement that was introduced inside the last 10 years. This small administration fee was not the reason that licence allowance has been paid throughout NSW for many, many decades.

[141] In relation to the submission of the Respondent that there is some inconsistency in wording in the provisions of the Agreement, I concur with the findings of Kirby J in Amcor Limited v Construction, Forestry, Mining and Energy Union:

“However, certified agreements such as this commonly lack the precise drafting of legislation. As appears from a scrutiny of the provisions of the Agreement, it bears the common hallmarks of colloquial language and a measure of imprecision. Doubtless this is a result of the background of the drafters, the circumstances and possibly the urging of the preparation, the process of negotiation and the omission to hammer out every detail - including possibly because such an endeavour would endanger the accord necessary to consensus and certification by the Commission.

. . .

The nature of the document, the manner of its expression, the context in which it operated and the industrial purpose it served combine to suggest that the construction to be given to cl 55.1.1 should not be a strict one but one that contributes to a sensible industrial outcome such as should be attributed to the parties who negotiated and executed the Agreement. Approaching the interpretation of the clause in that way accords with the proper way, adopted by this Court, of interpreting industrial instruments and especially certified agreements. I agree with the following passage in the reasons of Madgwick J in Kucks v CSR Ltd, where his Honour observed:

‘It is trite that narrow or pedantic approaches to the interpretation of an award are misplaced. The search is for the meaning intended by the framer(s) of the document, bearing in mind that such framer(s) were likely of a practical bent of mind: they may well have been more concerned with expressing an intention in ways likely to have been understood in the context of the relevant industry and industrial relations environment than with legal niceties or jargon. Thus, for example, it is justifiable to read the award to give effect to its evident purposes, having regard to such context, despite mere inconsistencies or infelicities of expression which might tend to some other reading. And meanings which avoid inconvenience or injustice may reasonably be strained for. For reasons such as these, expressions which have been held in the case of other instruments to have been used to mean particular things may sensibly and properly be held to mean something else in the document at hand.’ [references omitted]” 42

[142] I agree with the submissions of Ms Presdee that the common understanding of the phrase would result in the parties only inserting the exception into the Agreement, that is, when the payment of the allowances does not apply. Otherwise, there would be no reason to have an all purpose allowance. The parties would simply be required to insert the Allowances into every clause that they did apply. If I were to take the Respondent’s submissions literally, then clause 13.1 would have no work to do. Adopting the commentary of Kirby J in Amcor, I do not accept that such a scenario was the intention or the understand of the parties.

[143] Further, I agree with the Applicants that the existence of clause 13.2 titled “Allowances (Not All Purpose)” further supports the argument that the phrase “All Purpose” should be given its common meaning.

Mutual Understanding

[144] In relation to the issue of the mutual understanding of the parties, or as suggested by the Respondent the common inadvertence of the parties, I can find no evidence of any intention by the parties to not follow the NSW wide practice of paying the Allowances for all purposes of an award or agreement. That was certainly the practice throughout NSW in 2004. I have taken note of the comments of Sams DP in MSS Security where he said:

“[110] It hardly needs stating that mutual intention does not mean agreement. This is the whole premise of bargaining – one side may give up something they would rather retain in exchange for something else. In other words, mutual intention can often mean accepting something to which you are opposed. When viewed in that light, the Union’s non-acceptance of MSS’s interpretation of the means of calculating the Aviation Allowance does not trump or override a mutual intention of what is intended to apply by historical practice.

[111] That is not to ignore the Union’s strenuous opposition to the MSS view or that the Union does not have the right to express its view and to have its intentions taken into account in its statutory capacity as an employee bargaining representative. However, what is important to understand is that under the scheme of the Act, Unions are no longer parties to enterprise agreements, as that notion had been understood for many years (save for greenfields agreements). This is not to demean or reduce the importance of the unions as direct bargaining representatives or default bargaining representatives for employees and for unions to be covered by the Agreement (s 201(2)), but the scheme of Part 2-4 of the Act, makes it plain that the emphasis in bargaining is on agreements reached between employers and employees. In my view, the distinction between being ‘covered’ by an enterprise agreement to being a ‘party’ to an agreement is not merely a distinction without a difference. It is why I consider the views and understanding of the employees as disclosed by their actions (what they understood they were voting for) as imperative to understanding their intention. These are not subjective views, but objective intentions. This discourse plainly demonstrates to me that mutual intention is not to be exclusively found in the intentions of the Union. Rather, it is the mutual intention of the employees to be covered by the agreement and the employer to which the prime focus should be directed.

[112] The undisputed evidence of Mr Grasso and Ms Stinson, which I accept, makes clear that since its first contracts at Queensland airports in 2010, MSS had never given any impression or suggestion, let alone commitment, to alter its view as to how the Aviation Allowance is calculated. Moreover, its view is reflected by its own conduct and actions over a number of years. Seeking to remove the words and restoring them during negotiations for the 2014 Agreement, is not an indicator that it believed it had a problem. Rather, it was to make the prevailing, longstanding and ongoing position crystal clear in the face of sporadic claims to the contrary by the Union. MSS never did or say anything which would have left an impression with the employees, who ultimately voted to approve the 2014 Agreement, that they were voting on something different in respect to the Aviation Allowance that had always been applied by MSS. I am reminded by what Lord Wilberforce said in Prenn v Simmonds [1971] 1 WLR 1381, at 1385:

‘The words used may, and often do, represent a formula which means different things to each side, yet may be accepted because this is the only way to get ‘agreement’ and in the hope that disputes will not arise.’

[113] The evidence is that employees voted four times in favour of agreements which contained the words ‘all purpose’, but was not applied by the employer in the manner contended for by the Union (once where the former employer was ISS and three times where MSS was the employer in 2011, 2014 and 2015). It may be assumed that the Commission in approving the four Agreements was satisfied the employees had ‘genuinely’ agreed to the agreements (s188).

[114] It stretches credulity and is naïve to submit that the employees did not know or were confused as to how the Aviation Allowance had always been calculated and how MSS intended to do so in the future. There was certainly no evidence to that effect, rather the evidence of Mr Conn was to the contrary, as was the evidence as to how the Aviation Allowance appeared and what the amount was, on the employees’ payslip. These are objective, not subjective factors.”

[145] Following the obiter in MSS Security, I am satisfied and find that the mutual intention of the parties was to pay these allowances for all purposes of the Award/Agreement. That is what the employees agreed to in 2004 and in every Agreement between the parties since that date. Further, that is how the Respondent and its predecessors have paid these allowances.

Conclusion

[146] I find that the Commission has jurisdiction to deal with this dispute. There is no doubt that the parties discussed at length the changed application of the Disability Allowance, either prior to the dispute application being filed or after the first conference was conducted by the Commission. Whilst the Licence Allowance and Tool Allowance were not discussed to the same extent, it is beyond doubt that there is no capacity to exclude either of these allowances from the application of the Disability Allowance provision. It would be illogical to discard the Licence Allowance and Tool Allowance from this decision, simply because no discussions occurred prior to the application to the Commission. If such a scenario were to occur, the parties would have to come back and run exactly the same argument in a future hearing to achieve the same outcome regarding those additional allowances. There is little utility in having the parties bring multiple applications.

[147] As to the substantive dispute, I find that there is no ambiguity, there is no misunderstanding, and there is no exception to the common understanding of the phrase “paid for all purposes of the Agreement”. I find that clause 13.1 of the Agreement is clear and concise. The allowances in clause 13.1 are to be paid on the compounding basis, ie, they form part of an employee’s ordinary rate of pay.

[148] If I am wrong and the wording in clause 13.1 is not clear and concise and is open to a different meaning or an exception to the common understanding, then I find that, for the reasons stated above, the Allowances in clause 13.1 of the Agreement are to be paid for all purposes of the Agreement as part of an employee’s hourly rate on a compounding basis.

[149] The argument pursued by the Respondent has attempted to justify a decision which lacks logic and is contrary to the historical custom and practice throughout NSW.

[150] I so Order.

COMMISSIONER

Printed by authority of the Commonwealth Government Printer

<PR735058>

 1   Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union known as the Australian Manufacturing Workers Union v Berri Pty Ltd[2017] FWCFB 3005 (“Berri”); The Australian Meat Industry Employees Union v Golden Cockerel Pty Ltd[2014] FWCFB 7447.

 2   Berri.

 3   [2002] AIRC 531.

 4 Ibid at [29].

 5   Ibid at [29]; Print Q2603, 30 June 1998 at [30].

 6   As at Clause 18.2. Other Modern Awards that have similar definitions for how all purpose allowances are applied include the Manufacturing and Associated Industries and Occupations Award 2020 at Clause 30.2 and the Electrical, Electronic and Communications Contracting Award 2020.

 7   Statement of Sean Burke dated 7 September 2021; Statement of Matthew Carlon dated 8 September 2021.

 8   Applicant’s Outline of Submissions at [19]; Table 1A of the 2018 Agreement; Statement of Matthew Carlon dated 8 September 2021 at Annexure MC-2.

 9   Statement of Matthew Carlon dated 8 September 2021 at Annexure MC-7.

 10   Applicant’s Outline of Submissions at [19]; Table 1A of the 2018 Agreement; Statement of Matthew Carlon dated 8 September 2021at Annexure MC-7

 11   Statement of Mr Carlon at [9]-[12].

 12   Statement of Mr Carlon at [12]; The enterprise agreements are Blue Circle Southern Cement Ltd (NSW) Enterprise Agreement 2010, Boral Cement Ltd (NSW) Enterprise Agreement 2012, Boral Cement Ltd (NSW) Enterprise Agreement 2015 and the Blue Circle Southern Cement Ltd (State) Award 2004, Blue Circle Southern Cement Ltd (State) Award 2006.

 13 Statement of Mr Singh dated 29 September 2021 at [7].

 14   Ibid at [11]-[12].

 15 Ibid at [13].

 16   [2021] FWCFB 2691.

 17 [2018] FCAFC 131 at [197].

 18   [2017] FWCFB 3005 at [114].

 19   [2016] FWCA 2774.

 20 Statement of Mr Singh dated 29 September 2021 at [7].

 21 [2006] FCA 616 at [31]-[32].

 22   [2015] FWCFB 4658.

 23 Ibid at [47].

 24   MSS Security Pty Ltd t/as MSS Security [2016] FWCA 2774 at [102].

 25 Ibid at [67].

 26   [2013] FWC 1186.

 27   MSS Security Pty Ltd t/as MSS Security [2016] FWCA 2774.

 28   “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian

Manufacturing Workers Union v UGL Pty Ltd[2020] FWC 889 (“UGL”).

 29   UGL at [56].

 30 Statement of Mr Carlon at [15].

 31   Transcript at PN225-229.

 32   Dr Candice Shields; Dr Kymble Spriggs v Alfred Health[2012] FWA 162, at [34].

 33   [2021] FWCFB 2691.

 34   Transcript at PN289-293.

 35   Transcript at PN127-129.

 36   Transcript at PN174.

 37   [2017] FWCFB 3005.

 38   Transcript at PN245.

 39   [2012] FWAFB 7858.

 40   [2013] FWC 9306.

 41   Transcript at PN329.

 42 [2005] HCA 10; (2005) 222 CLR 241 at [94], [96].