“Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers' Union (AMWU) v Jobsforce Employment Services Pty Ltd

[2013] FWC 2108

[2013] FWC 2108

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.739—Dispute resolution

“Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU)
v
Jobsforce Employment Services Pty Ltd
(C2012/6265)

Manufacturing and associated industries
COMMISSIONER BLAIR	MELBOURNE, 9 APRIL 2013

Alleged dispute concerning wage rates

[1] This decision arises out of an application under s.739 of the Fair Work Act 2009 (the Act) by the “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU) (the Applicant) with the respondent to the application being Jobsforce Employment Services Pty Ltd (the Respondent).

[2] The dispute is referred to the Fair Work Commission (the Commission) pursuant to a dispute settlement procedure in the Jobsforce Employment Services Metals Labour Hire Agreement 2011-2013 (the Agreement). The matter in dispute relates to clause 12 of the Agreement, Wage Rates, which reads as follows:

12. Wage Rates

The Agreement provides for the following wage increases from the first full pay week after the agreement becomes operative:

Classification	Column 1 First full pay period on or after 16 January 2012	Column 2 First full pay period on or after 1 July 2012	Column 3 First full pay period on or after 1 January 2013
C12	$998.09	$1028.03	$1058.87
C11	$1054.97	$1086.62	$1119.21
C10	$1164.08	$1199.01	$1234.98
C9	$1212.73	$1249.11	$1286.59
C8	$1262.20	$1300.07	$1339.07

Note: The Award, tool and EFT allowance is included in the relevant classifications’ rate of pay set out above. This will be adjusted according to Agreement variations

[3] The issue in dispute is whether or not the wages rate in clause 12 of the Agreement are payable retrospectively once the Agreement become operative under the Act.

The Applicant

[4] The Applicant asks, in other words, did the coming into force of the Agreement on 27 November 2012, thereupon require the Respondent to pay to its employees to whom the Agreement applies, at least the rates in column 1 from the first full pay period on or after 16 January 2012 until the required rates in column 2 took over.

[5] The Applicant asserts that the Respondent has applied the Agreement so that the required wage rates in clause 12 only became payable from the first full pay week after 27 November 2012, ie. from 3 December 2012. The date of 27 November 2012 is the day the Agreement took statutory force under the Act.

[6] The Applicant states that it is noted that while the applicant maintains that the correct interpretation is that which is referred to in paragraph 11 of their submissions (ie. that the wage rates are fully retrospective), it is merely noted in passing that there is another possible interpretation. That is, the clause 12 rates are retrospective to the date of lodgement of the Agreement (ie. 1 November 2012) as per clause 7 of the Agreement, which reads as follows:

7. Date and Period of Operation

This Agreement shall apply from the date of lodgement with Fair Work Australia. The nominal expiry date of the Agreement is 30 June 2013.

[7] The Applicant asserts that, in supporting their contentions, the interpretation of clause 12 of the Agreement the strongest leg of the argument lies in the plain meaning of the text. It is stated that in the numbered columns the wages rates set out for the respective classifications are clearly prescribed. They state that using this aspect of the clause as a starting point it is contended that the Agreement evinces an intention to make the prescribed rates payable from the columns’ respective commencement dates.

[8] The Applicant concedes that further and additional words could make the contended retrospective operation of the prescribed wages rates more certain, it is submitted that this lack of precision and certainty should be put to one side as advised in Kucks v CSR Limited [(1996) 66 IR 182].

[9] It is also conceded that the head-clause in clause 12 of the Agreement refers to “... the following wage increases ...”. This reference as to “increases” rather than saying “wage rates” or some other such term detracts somewhat from the force in the Applicant’s case. That said, the express tabulation of whole dollar figures in the columns and rows as the wages rates to be applied, it is submitted, carries with it a strong directive as to how the Agreement should operate.

[10] It is further said that the next feature of significance in the head-clause is that the wage increases are provided “from the first full pay week after the agreement become operative”. Perhaps it is here the contest on the clause’s divergent meaning hinges. The proverbial question is, “does this passage, in combination with the table, confer retrospectively or not?”

[11] It is the Applicant’s contention here that these words when juxtaposed with the table sensibly mean that the tabulated rates spring to life as required by the table once the Agreement becomes operative. That means, for example, that for a C12 graded employee, in the period encompassed between that set out in Column 1 and Column 2 (ie. from the first full pay period on or after 16 January 2012 until the first full pay period on or after 1 July 2012) any C12 employee who worked in that period became entitled, on the first full pay period after the Agreement became operative, to a base rate wage of $998.09 for work done in that period; and so on for C11 etc. The Applicant further states that if this was not to occur, there cannot be any discernible purpose for so specifying this wage requirement.

[12] The Applicant finally states that the fact that these provisions appears in the Agreement is a strong indicator that they are meant to have effect, and, in accordance with standard principles for the interpretation of written instruments, these provisions should be given work to do. Their job is to confer an entitlement to the tabulated wage rates - including those rates that pre-date the Agreement’s operative dates - to eligible employees. If such is not done, these rates fail to serve any purpose whatsoever.

[13] The Applicant then seeks a ruling from the Commission in the following terms:

The Jobsforce Employment Services Metals Labour Hire Agreement 2011-2013, clause 12, requires that the wage rates set out in “Column 1” and “Column 2” be paid retrospectively to eligible employees.

The Respondent

[14] These Respondent states that the Applicant’s submission, that the wage rates in clause 12 of the Agreement are fully retrospective from the first full pay period on or after 16 January 2012, ignores five issues:

(i) the operation of the Agreement;

(ii) the principle against retrospectivity;

(iii) the wording in clause 12 of the Agreement;

(iv) the express wording in the Letter to Jobsforce employees attached to the Notice dated 18 October 2012; and

(v) clause 11 of the Agreement which provides for no extra claims.

[15] The Respondent refers to sections 52, 54 and 182 of the Act and state that those provisions work against the contention of the Applicant by identifying the time at which an agreement is made and becomes operative.

[16] The Respondent states that sections 52 and 54 of the Act focus on the operation of an agreement. Section 52(1)(a) provides that an agreement applies to an employee, employer or employee organisation if “the agreement is in operation”. Section 54(1) provides that an agreement approved by the FWC operates from “7 days after the agreement is approved” or a later day, if specified in the agreement. Section 182(1) provides that an agreement is “made” when a majority of employees asked to approve the agreement case a valid vote approving the agreement.

[17] The Respondent states that together, sections 52, 54 and 182 operate so that the Agreement could not have been:

(i) made earlier than 31 October 2012, the day on which the postal vote closed; and

(ii) operational prior to 27 November 2012, as it was approved on 20 November 2012.

[18] The Respondent asserts that for the Applicant’s submission to be correct, the Agreement would have had to have been in operation prior to the date it was “made”, a scenario clearly contrary to sections 52, 54 and 182 of the Act.

[19] The Respondent further states that adopting the Applicant’s contentions could result in a position where the pay rates in Column 1 and Column 2 of clause 12 mean that the Respondent has underpaid persons to whom the Agreement has never applied (because their employment ended before the Agreement began operating).

[20] The Respondent then deals with the issue of any order regarding retrospectivity and deals with the decision of the Full Bench of the Commonwealth Conciliation and Arbitration Commission in Ship Painters and Dockers [94 CAR 609] at 619-20.

[21] The Respondent states that the words “from the first full pay week after the agreement become operative” should also be “given work to do”. They state that these words are clear and without ambiguity in their intention that the increases be paid from 3 December 2012 (the first full pay week after the Agreement became operative).

[22] The Respondent further states that the words in clause 12 should be contrasted with express terms which could have been included in the Agreement providing for the backpay of wage increases. Examples of such express terms are those which provide for the calculation of backpay or those which provide for the payment of a specified amount referable to backpay. They contend that clause 12 does not include such terms.

[23] Finally, the Respondent states that, given the history of negotiation of the Agreement from a standardised document prepared by the Applicant, including as set out in paragraphs 1 and 2 of the SAF, no inference can or should be drawn from the fact that Columns 1 and 2 and the rates contained in them remained in the final version of the proposed agreement prior to the Agreement’s approval.

[24] The Respondent refers to the letter (which the Commission has not seen) which refers twice to the wage increases becoming effective from the first full pay week after the Agreement becomes operative. The Respondent states that the Applicant submits that the terms of the Agreement are adequate to support the contention that the wage rates in Columns 1 and 2 should be applied retrospectively and other contextual considerations do not have sufficient force to displace it. The Respondent disagrees. They state that the letter is a contextual consideration which is crucial in providing context to the meaning of the words in the clause. Read together, the letter and the words of clause evince the Respondent’s clear intention for wage increases to apply from the first full pay period after the Agreement becomes operative.

[25] Finally, the Respondent refers to clause 11 of the Agreement, No Extra Claims, which reads as follows:

The company, employees covered by this Agreement and the unions party to this Agreement agree that they will not, for the duration of this Agreement pursues [sic] any extra claims in relation to any matters where consistent with this Agreement.

[26] The Respondent submits that the Applicant is acting contrary to clause 11 of the Agreement by virtue of this application during the duration of this Agreement, which does not expire until 30 June 2013.

Conclusion

[27] The parties provided to the Commission a Statement of agreed Facts, as follows:

1. Jobsforce Employment Services Pty Ltd (Jobsforce) and the Australian Manufacturing Workers’ Union (AMWU) (AMWU) concluded negotiations for a new enterprise agreement, the Jobsforce Employment Services Metals Labour Hire Agreement 2011-2013 (Rejected Agreement). Jobsforce conducted a vote of its employees and obtained a valid majority in support of approval of this Rejected Agreement.

2. On 1 August 2012, Jobsforce sent the signed Rejected Agreement to the AMWU for it to lodge an Application for Approval of Enterprise Agreement with Fair Work Australia (FWA) on its behalf.

3. On 6 August 2012, the Rejected Agreement was lodged by the AMWU with FWA for approval.

4. On 28 August 2012, Commissioner Ryan declined to approve the Rejected Agreement as the voting timelines did not meet the requirements of the Fair Work Act 2009.

5. On 17 September 2012, Jobsforce advised its employees that a new ballot would be required.

6. On 8 October 2012, Jobsforce sent each employee a Notice outlining the process for conducting and participating in a postal ballot and seeking support for the approval of the proposed Agreement.

7. Attached to the Notice was a one-page letter (Letter), describing the changes and benefits proposed in the Agreement. With respect to pay increases, the Letter stated that:

(b) 'Wage increases become operative from the first full pay week after the agreement becomes operative.'

8. Ballot papers were posted on 17 October 2012. The postal vote closed on 31 October 2012.

9. On 7 November 2012, the proposed Agreement was sent to the AMWU as the Employee Bargaining Representative.

10. An official of AMWU signed the proposed Agreement as a bargaining representative of employees.

11. On 1 November 2012, Jobsforce lodged with FWA an Employer's Declaration in Support of Application for Approval of Enterprise Agreement.

12. The Agreement was approved by Commissioner Ryan on 20 November 2012.

13. Jobsforce began paying the wage rates in the Agreement from 3 December 2012, the beginning of the first full pay week after 27 November 2012.

14. Clause 12 of the Agreement contains a table with different sets of wage rates. Each column is headed 'First full pay period on or after...' with the dates: 16 January 2012; 1 July 2012 and 1 January 2013. The table is preceded by the statement 'The Agreement provides for the following wage increases from the first full pay week after the agreement becomes operative.'

15. The AMWU asserts that by the approval and commencement of operation of the Agreement, employees became entitled to back pay in line with the operative dates set out in the wage rates table in the Agreement.

16. Jobsforce denies that there is any obligation to pay back pay, including because of the statements in the Letter and clause 12 of the Agreement.

17. The AMWU filed an application with the Fair Work Commission (FWC) on 12 December 2012 for the Commission to deal with a dispute under the dispute settlement procedure of the Agreement.

18. FWC unsuccessfully attempted to resolve the dispute by conciliation.

19. The AMWU sought arbitration of the dispute.

20. On 13 February 2013 FWC issued Directions for the filling [sic] of written submissions.

21. The parties agreed to provide FWC with this Statement of Agreed Facts.

[28] At point 7 of the Statement of Agreed Facts, it states:

7. Attached to the Notice was a one-page letter (Letter), describing the changes and benefits proposed in the Agreement. With respect to pay increases, the Letter stated that:

(b) 'Wage increases become operative from the first full pay week after the agreement becomes operative

[29] Having considered the material provided to it by both the Applicant and the Respondent, the Commission would determine that the argument put forward by the Applicant does not have merit.

[30] Column 1 of the classification structure and the wage rates to apply in clause 12 of the Agreement states “first full pay period on or after 16 January 2012”; however, what it very clear and unambiguous is the wording above those columns under the heading “Wage Rates”. Those words are:

The Agreement provides for the following wage increases from the first full pay week after the agreement becomes operative.

[31] The words “after the agreement becomes operative” are very clearly identified in point 7 of the Statement of Agreed Facts in reference to the one page letter which was sent to each employee outlining the process for conducting and participating in a postal ballot and seeking support for the approval of the proposed agreement. It must have been very clear to all those who were participating in the voting process and participating in the negotiating sessions that any wage increases that would flow from the approval process of the agreement would only flow in the first full pay week after the Agreement becomes operative.

[32] The Commission accepts the principle as outlined in the Full Bench of the Commonwealth Conciliation and Arbitration Commission in Ship Painters and Dockers [94 CAR 609] at 619-20, which states:

There is a just ground for the disinclination on the part of the Court to give retroactive force and operations to its orders unless some very special reason exists for doing so.

The well established and firmly entrenched principle is that retrospective application will not be approved except where there is agreement between the parties; where there is no agreement between the parties the principle is to make the order prospective and not retrospective unless there have been some delays by the Tribunal or the Commissioner dealing with the matter.

[33] Given the views that the Commission has expressed above in support of the Respondent’s argument, the Commission would therefore dismiss the application by the Applicant.

[34] Accordingly, this application is now dismissed.

COMMISSIONER

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