“Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers' Union (AMWU) v The Trustee for Engineering and Maintenance Solutions Unit Trust T/A

[2021] FWC 6058

[2021] FWC 6058

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
The Trustee for Engineering and Maintenance Solutions Unit Trust T/A Engineering and Maintenance Solutions Pty Ltd
(C2021/3487)

DEPUTY PRESIDENT CLANCY MELBOURNE, 11 OCTOBER 2021

Alleged dispute about a matter arising under an enterprise agreement.

[1] On 21 June 2021, the “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU) filed an application under s.739 of the Fair Work Act 2009 (the Act) for the Commission to deal with a dispute about the accrual of rostered days off (RDOs). The AMWU made its application raising a dispute with The Trustee for Engineering and Maintenance Solutions Unit Trust T/A Engineering and Maintenance Solutions Pty Ltd (EMS) pursuant to clause 7 of the Engineering & Maintenance Solutions Enterprise Agreement 2016 1(the Agreement).

[2] A conference was conducted on 14 July 2021, after which the parties were required to agree upon the question to be arbitrated. They submitted the following question:

•  With regard to the Engineering & Maintenance Solutions Enterprise Agreement 2016, specifically, the accrual of RDOs, does an employee accrue time towards an RDO when ordinary time hours are not physically worked?

[3] I then issued directions for the filing and service of material and listed the matter for a hearing on 14 September 2021.

[4] On 10 September 2021, my Chambers received an email from the AMWU advising the parties had agreed that the hearing could be vacated, and the matter determined on the papers. Therefore, I vacated the hearing and have determined the matter based on the material they have filed, which includes unchallenged witness statements from Mr Franco Pilon, a boilermaker employed by EMS (for the AMWU) and Mr Mark Gabsch, the managing director of EMS.

Submissions

AMWU

[5] The AMWU submits the Commission should start with the Agreement’s text that most directly deals with the subject matter in dispute and then reconcile it within the relevant context. It submits that the question for determination cannot be answered conclusively with a simple “yes” or “no”. While the AMWU ‘concedes’ that a simple reading of the Agreement’s clause 26.1 ‘travels against’ the answer it propounds, it submits the three sources of context in this matter are:

1) The incorporationof the Manufacturing and Associated Industries and Occupations Award 2020 (the Award);

2) The difference in the Agreement and the Engineering & Maintenance Solutions Labour Hire Agreement 2011 (2011 Agreement); and

3) The explanation relating to the Agreement circulated by EMS ahead of the employee vote.

[6] The AMWU submits these factors are not discrete in the way they operate and ‘run together to create enough current to push back against the naked terms of clause 26.1.’ Clause 26.1 of the Agreement states:

“26.1 Employees shall accrue RDO’s based on an hourly worked accrual.”

[7] Addressing firstly the incorporation of the Award, the AMWU submits employees accrue time towards an RDO when not physically working if they are on annual leave, long service leave, public holidays, paid personal/carer’s leave, workers compensation, paid compassionate leave, paid training leave or jury service. It contends this is so because of the way in which the Award is incorporated into the Agreement pursuant to clause 6 of the Agreement. In advancing this proposition the AMWU observes that the Manufacturing and Associated Industries and Occupations Award 2010 referred to in clause 6 of the Agreement became the Award on 29 May 2020 and that while this change varied the terms of the Manufacturing and Associated Industries and Occupations Award 2010 considerably, the terms of what became clause 27.5 of the Award were materially unchanged. The AMWU argues clause 6 of the Agreement serves to incorporate clauses 27.5 (b) and 27.5 (c) of the Award because there does not appear to be ‘a clear push-out of the Award’s RDO credit terms’ in clause 26.1 of the Agreement. It says the two terms—the term incorporated from the Award and the express term from the Agreement—are fully capable of complementary operation. As such, the AMWU submits that when an employee is absent from work (i.e. not physically working), RDOs will accrue if the employee is on annual leave, long service leave, public holidays, paid personal/carer’s leave, workers compensation, paid compassionate leave, paid training leave or jury service but if the employee is absent for other reasons, RDOs do not accrue.

[8] The AMWU then suggests there are the following material differences between the Agreement and the 2011 Agreement:

•  The 2011 Agreement appeared to confer 13 RDOs annually come what may, with no express relationship between work and RDO accrual.

•  The 2011 Agreement did not contain the terms of Appendix 1 and Appendix 2 of the Agreement, suggesting that the weekly standard hours for employees under the 2011 Agreement was 38.

•  The Agreement provides that RDOs accumulate at different rates for employees covered by Appendix 1 and those covered by Appendix 2, whereas in the 2011 Agreement, the RDO system provided for was limited to 38-hour week employees.

•  As RDOs for a 38-hour week and 36-hour week are featured in the Agreement, the terms of clause 31.1 of the 2011 Agreement (“Employees that are on a 38 hour working week will accrue 13 RDO per year”) cannot transpose smoothly into the Agreement.

[9] The AMWU characterises the conferral of RDOs in the 2011 Agreement as being broad and non-discerning, contending that just by being employed, an employee could attract 13 RDOs annually. The AMWU suggests this was at odds with the usual principle allowing for RDO accumulation through the banking of extra hours worked and meant employees could, theoretically, cash in hours for RDOs without being at work or in receipt of pay. It proffers this appears to be the principal mischief the Agreement intends to address through its RDO terms.

[10] The AMWU submits that with clause 26 of the Agreement having RDOs “based on an hourly worked accrual” and apparently linking the generation of RDOs to hours worked towards their credit, it is relevant, in answering the question for determination, to consider whether an “hourly worked accrual” requires actual work or whether the taking of some forms of leave be enough. When doing so, the AMWU submits that the material distinction is not between physical work and absence, but rather, paid service and unpaid service.

[11] Finally, the AMWU submits that relevant context is found in the form of a document entitled “Summary of changes to the Mechanical EBA” (the Explanation document) given by EMS to its employees ahead of their voting on the Agreement, which used the clause numbers from the 2011 Agreement and relevantly stated:

“31.0 Rostered Days off

•  RDOs to be achieved using accrual on the basis of hours worked – current approach does not allow for circumstances such as leave without pay making it impossible to accrue 13 RDOs per year.

•  Maximum number banked reduced to 5 from 10.”

[12] The AMWU submits that because enterprise agreements are made primarily by the assent of an employer and a majority of affected employees, what passes between them can be an important source of guidance in interpretation. It submits that by EMS outlining for its employees the reasons for the change to the RDO provision in the Explanation document, an independent observer may take the view that the intention of the parties was to stop RDOs accruing when an employee had no entitlement to pay, but not otherwise.

[13] The position of the AMWU is that when the differing categories of context are aggregated, they combine to ‘solidify’ the argument that upholds its suggested answer to the question. AMWU submits that clause 26.1 of the Agreement cannot be given a narrow interpretation that is isolated from the ‘soup of circumstances’ from which the Agreement arose.

[14] The answer to the agreed question the AWMU contends for is: “When an employee is absent from work (i.e. not physically working), RDOs will accrue if the employee is on annual leave, long service leave, public holidays, paid personal/carer’s leave, workers compensation, paid compassionate leave, paid training leave or jury service. If the employee is absent for other reasons, an RDO does not accrue.”

EMS

[15] EMS submits that there is no necessary reason why RDOs should be accrued on annual leave, personal leave or RDOs taken under the Agreement, and that only time worked accrues towards RDOs.

[16] EMS submits that the Agreement is clear on its terms that RDOs only accrue when employees physically work and this position is consistent with industrial understanding of the way in which RDOs work, such that it is capable of being regarded as a notorious fact of which knowledge is presumed. EMS asserts the notorious fact regarding RDOs is that if a person works more hours than they receive pay for, some of the hours worked are banked for use at a later time. Inherent in this notorious fact is that a person is not working when they are on any form of leave or other absence from work and they do not accrue RDOs when they do not physically work.

[17] EMS submits the Commission would have to find that there was no plain meaning attributable to the words used in the Agreement before it allows the admission of extrinsic evidence. EMS submits there is no inconsistency between the following terms of the Agreement and the Award:

•  “Employees shall accrue RDO’s based on an hourly worked accrual” (Clause 26.1); and

•  “Work 40 hrs accumulate 2 hrs towards an RDO” (second dot point of Item 1 of Appendix 1).

[18] EMS submits these words from the Agreement have a plain meaning and make clear that an employee must work to accumulate an RDO. It says they provide that an employee accrues RDOs based on the hours they work and if 40 hours are worked in a week, an employee will receive 2 hours of RDO time. Further, it says the clarity of these words ‘is bolstered’ when the language of clause 26.3 a) of the Agreement is considered in context. In particular, EMS proffers that:

•  In providing that a deduction is made from gross ordinary weekly earnings, the Additional RDOs in clause 26.3 a) are monetary deduction RDOs, not RDOs accrued/accumulated from physically working.

•  in using specific wording that Additional RDOs do not accrue in hours, clause 26.3 a) of the Agreement makes it clear that RDO accrual under clause 26.1 is in relation to hours worked.

[19] While stating that clause 26.1 is expressed ‘in a grammatically clumsy manner’, EMS submits that an overly technical approach is to be avoided and just because the provision could be expressed in a different fashion is not a strong argument to allow for it to be interpreted in another way. EMA contends the Agreement already provides a fair and just outcome to employees in relation to receiving a RDO for working in excess of 38 hours per week.

[20] EMS submits the AMWU’s position creates a situation where employees “double dip”. EMS says that it appears that when the Agreement commenced, it continued accruing RDOs for employees on RDO and Public Holidays, when they were not working. EMS says inquiries made with its payroll software provider to ascertain whether there was a way to modify the accrual setup were to no avail, so rather than risk under-accrual of hours it decided to continue to accrue RDOs on Public Holidays.

[21] EMS submits another notorious fact is the definition of a ‘day’ which it says equates to 7.6 hours. EMS argues that while employees work 80 hours in a fortnight, they are entitled to 76 hours of personal/carer’s leave each year and the same equation is applied to annual leave. EMS says it deducts 7.6 hours, not 8, if an employee takes sick leave thereby maintaining the annual entitlement of 10 days sick leave. EMS argues its interpretation with regard to payment of a day of sick leave has been endorsed by the High Court 2 and that it is correct to deduct 7.6 hours from a leave balance (either personal/carers’ leave or annual leave) when an employee takes leave, rather than 8 hours, despite the employee normally working 8 hours. EMS argues this is the case on the basis that if the employee does not work, there is no 0.4 hours to attribute to an RDO.

[22] EMS submits the Award was incorporated in the Agreement at clause 6.1 to ensure that it was retained to underpin the Agreement without requiring each of its provisions to be incorporated as separate terms. EMS submits reference to clause 27.5 of the Agreement is of no assistance to the AMWU because that clause relates to averaging pay when ordinary hours of work are averaged so as to avoid wage fluctuations and has no application with regard to RDO accrual. It contends wages are monetary-based and RDOs are time-based and that it does not use wage averaging. EMS submits the relevant Award clause for RDOs is clause 17.5(b)(vi) of the Award, which allows for an accumulation of RDOs when hours of work are arranged in certain patterns. EMS submits the references to hours of work and ordinary working hours clearly indicate the need to physically work in order to receive RDOs and suggests there is no inconsistency between clause 17.5(b)(vi) of the Award and either clause 26.1 or Appendix 1 of the Agreement.

[23] In addressing the differences between the Engineering & Maintenance Solutions Labour Hire Agreement 2013-2016 (2013-2016 Agreement) 3 and the Agreement, EMS submits the 2013-2016 Agreement provided for the accrual of 13 RDO without tying RDO accrual to the performance of physical work whereas the Agreement clearly and unequivocally ties RDO accrual to work. EMS suggests there was an intention to address the RDO accrual method in the 2013-2016 Agreement that had given employees “something for nothing” through double dipping. EMS also suggests there was a change from the 36/38 hour week to working 40 hours and receiving 4/2 hours for RDOs which demonstrates the intention to change the method of accruing RDOs and the way hours are arranged. EMS submits the AMWU’s reference to paid and unpaid service require reading into the Agreement words that are not there, so as to change the meaning of clause 26.1 and Appendix 1.

[24] EMS submits the extrinsic material relating to the information provided to the employees ahead of the vote for the Agreement in the Explanation document shows that there was an intentional change from accruing 13 RDOs per year to accruing RDOs “on the basis of hours worked”. This was outlined in the Explanation document in the reference at “31.0 Rostered Days off”. EMS then suggests the words used at the same entry, “current approach does not allow for circumstances such as leave without pay making it impossible to accrue 13 RDOs per year”, could mean:

(a) There is an intention to make it possible to accrue 13 RDO per year by allowing accrual to occur on leave with pay (as an example); or

(b) It is considered impossible to accrue 13 RDO per year because they do not accrue on leave without pay (as an example) and a realistic/correct accrual on the basis of hours worked is to be instituted.

[25] EMS suggests it is best placed to determine the meaning of the words set out above because it drafted and circulated the extrinsic materials. It submits the interpretation set out in (b) above is supported by the witness statement from Mr Gabsch who was involved in refining and updating the Agreement and distributed the summary of changes document.

[26] The EMS position is that an employee does not accrue time towards RDOs when ordinary time hours are not physically worked. It submits that the terms of the Agreement mean that RDOs accrue only on hours physically worked and as such, the answer to the question is “no”.

Statements

[27] In addition to outlining some information relating to his experiences as an employee of EMS, Mr Pilon’s statement establishes that an explanation of the Agreement captured in a document summarising the changes made to the 2013-2016 Agreement was circulated to employees prior to the vote for the Agreement.

[28] Mr Gabsch’s statement outlined his opinion that:

•  The previous provision of 13 RDOs was unworkable because it was not possible to accumulate 13 RDOs within a 12-month period unless an employee worked 52 weeks of the year, not including public holidays and annual leave;

•  The intent of an RDO is to “work now and receive the benefit later” so the accounting system for managing payroll was only ever capable of managing accrual on an hour worked basis, which aligns with this intention;

•  The 13 RDOs a year failed to take into account the impacts of absence from work without pay or WorkCover related matters;

•  If an employee was absent from work for a period of six months or on WorkCover, under the 2013-2016 Agreement they were entitled to 6.5 RDOs, which is not the intended definition of an RDO;

•  It was decided that the ambiguous 13 RDOs from the Agreement should be removed and replaced with a more manageable and maintainable approach of accrual based on the hours worked; and

•  This was advised in a summary of changes provided to all staff and they were provided with an adequate opportunity to question the wording and the intent of the proposed change. There were no such enquiries from employees and he was not personally approached by any staff member requesting further explanation.

[29] The AMWU makes no objection to the tender of the statement of Mr Gabsch but submits that it has little to no probative value because it is merely reflective of the subjective intentions of EMS.

Consideration

[30] The principles that apply to the interpretation of an enterprise agreement have been outlined by the Full Bench of the Commission in AMWU v Berri Pty Ltd 4 (Berri), drawing on the earlier Full Bench decision in AMIEU v Golden Cockerel Pty Ltd.5 The Full Bench in Berri affirmed that the interpretation 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 dispute over the interpretation of an enterprise agreement will turn on the language of the agreement, having regard to its context and purpose. Context might appear from the text of the agreement as a whole, the disputed provision’s place and arrangement in the agreement, and the legislative framework under which the agreement was made.6

[31] Further, the correct approach was succinctly put by the Full Court of the Federal Court in WorkPac Pty Ltd v Skene 7as follows:

“[197] The starting point for interpretation of an enterprise agreement is the ordinary meaning of the words, read as a whole and in context. The interpretation “… turns on the language of the particular agreement, understood in the light of its industrial context and purpose …”. The words are not to be interpreted in a vacuum divorced from industrial realities; rather, industrial agreements are made for various industries in the light of the customs and working conditions of each, and they are frequently couched in terms intelligible to the parties but without the careful attention to form and draftsmanship that one expects to find in an Act of Parliament. To similar effect, it has been said that the framers of such documents were likely of a “practical bent of mind” and may well have been more concerned with expressing an intention in a way likely to be understood in the relevant industry rather than with legal niceties and jargon, so that a purposive approach to interpretation is appropriate and a narrow or pedantic approach is misplaced.” (citations omitted)

[32] Berri further provides that the first task in construing an enterprise agreement is to determine whether an agreement has a plain meaning or is ambiguous or susceptible of more than one meaning. 8 It is permissible to take into account the historical context in order to assist in determining whether ambiguity exists in the first place.9

[33] Clause 26 of the Agreement deals with RDOs as follows:

“26. Roster Days off (RDO) and Additional RDO

26.1 Employees shall accrue RDO’s based on an hourly worked accrual.

26.2 Employees shall not have more than 5 banked RDO’s at any one time.

26.3 Employees may accrue an additional 6 RDO’s per year (the “Additional RDO”).

a) The Additional RDO’s do not accrue in hours. The Additional RDO’s will continue to accrue by deducting the proper quantum (in dollars) from the employee’s gross ordinary weekly earnings, which is then set aside. The employee may take the Additional RDO when sufficient monies have been accrued.

b) The way in which the additional RDO are taken will be agreed between the parties, in consultation with the employees concerned.”

[34] Item 1 of APPENDIX 1 at clause 35 of the Agreement relevantly provides:

“35 Appendices

APPENDIX 1

Item	Condition	Application	Notes
1	38 Hour Week	•  4 week’s annual leave = 152 hrs •  Work 40 hrs accumulate 2 hrs towards an RDO

…”

[35] Similarly, Item 1 of APPENDIX 2 at clause 35 of the Agreement provides:

“APPENDIX 2 - Sugar Australia Site Specific Conditions

The following table defines the site specific conditions at Sugar Australia and applies to all EMS employees who are permanent site based staff.

Item	Condition	Application	Notes
1	36 Hour Week	•  4 week’s annual leave = 144 hrs •  Work 40 hrs accumulate 4 hrs towards an RDO

…”

[36] Clause 6 of the Agreement deals with the relationship between the Agreement and the Award as follows:

“6. Incorporation of Award Terms

6.1 This Agreement incorporates the terms of the Manufacturing and Associated Industries and Occupations Award 2010, as varied from time to time, the Metal, Engineering and Associated Industries (Accident Pay, Victoria) Award 1998 as in force on 1 March 2006; and, the Metal, Engineering and Associated Industries (Superannuation) Award 2000 as in force on 1 March 2006 (collectively referred to as “the Award”) provided that where there is any inconsistency between the express terms of this Agreement, and the incorporated terms of the Award, the Agreement shall prevail to the extent of the inconsistency.

6.2 In this Agreement references to the Award shall mean the Award as incorporated into this Agreement unless the context requires otherwise.” (my emphasis)

[37] The manufacturing and Associated Industries and Occupations Award 2010 has been varied since the Agreement commenced operation. Since 29 May 2020 10 it has been known as the Manufacturing and Associated Industries and Occupations Award 2020 (defined above in [5] as “the Award”). Clause 17.2(a) of the Award provides that subject to clause 17.5 of the Award, the ordinary hours of work for day workers are an average of 38 per week but not exceeding 152 hours in 28 days. Clause 17.5 of the Award allows for agreement to be reached regarding the accumulation of RDOs. Clause 27.5 of the Award relevantly provides:

“27.5 Absences from duty under an averaging system

Where an employee’s ordinary hours in a week are greater or less than 38 hours and such employee’s pay is averaged to avoid fluctuating wage payments, the following is to apply:

(a) The employee will accrue a credit for each day they work ordinary hours in excess of the daily average.

(b) The employee will not accrue a credit for each day of absence from duty, other than on annual leave, long service leave, public holidays, paid personal/carer’s leave, workers compensation, paid compassionate leave, paid training leave or jury service.

(c) An employee absent for part of a day, other than on annual leave, long service leave, public holidays, paid personal/carer’s leave, workers compensation, paid compassionate leave, paid training leave or jury service, accrues a proportion of the credit for the day, based on the proportion of the working day that the employee was in attendance.”

[38] I consider clause 6 of the Agreement is fundamental in resolving this dispute. I am satisfied that on a plain reading of clause 6 of the Agreement, clause 27.5 of the Award is incorporated into the Agreement save for when there is any inconsistency between the express terms of the Agreement and the incorporated terms of the Award, in which case those terms of the Agreement prevail to the extent of the inconsistency. I am also satisfied the terms of clauses 27.5(b) and 27.5(c) of the Award are not displaced by virtue of the operation of clause 6 of the Agreement. This is because the terms of the Agreement and in particular, clause 26, Appendix 1 and Appendix 2, do not expressly deal with the issue of the accrual of RDOs when an employee is absent from work. Nor do they state that employees shall only accrue RDOs based on an hourly worked accrual.

[39] I have determined that there is no ambiguity when clause 6, clause 26, Appendix 1 and Appendix 2 of the Agreement are read together. In doing so, I have considered the historical context. The AMWU referred to the 2011 Agreement for background context but it is evident the Agreement replaces the 2013-2016 Agreement. As much is apparent from the ‘Application of the Agreement’ clause in both the Agreement and the 2013-2016 Agreement and the Form F17 Employer’s declaration that was lodged by Mr Gabsch in support of the application for approval for the Agreement. Regardless, the 2011 Agreement and the 2013-2016 Agreement are all but identical in dealing with RDOs.

[40] The position of EMS is that the wording in the Agreement was intended to change the position in relation to the accrual of RDOs in the 2013-2016 Agreement whereby an employee would accrue 13 RDOs regardless of the hours they had physically worked. The accrual of RDOs was dealt with in clause 30.1 of the 2013-2016 Agreement as follows:

“30.1 Employees that are on a 38 hour working week will accrue 13 RDO per year”

[41] EMS relies on the change of this wording and contends that the reasoning for the change from what was in clause 30.1 of the 2013-2016 Agreement to that which appears in clause 26.1 of the Agreement is outlined in the Explanation document. This reasoning appears to have been based on the view of Mr Gabsch that RDOs should be accrued according to hours worked and would seem to account for the statement in the Explanation document that the “approach” to RDOs under the 2013-2016 Agreement, in stipulating 13 RDOs, did not allow for circumstances such as leave without pay. However, while Mr Gabsch appears to have held the view that RDOs should only accrue according to hours worked and not during periods of unpaid absences, he did not address the issue of whether or not RDOs accrue during periods of paid leave and nor was this covered in the Explanation document.

[42] While EMS has suggested there was an intention to address the RDO accrual method in the 2013-2016 Agreement because it gave employees “something for nothing”, it is apparent that the scope of the Agreement, in terms of employees covered, is broader than the 2013-2016 Agreement. As confirmed in the Explanation document, the Agreement includes the operations of EMS at the Sugar Australia site and whereas the employees of EMS at the Sugar Australia site work are subject to a 36 hour week and accumulate 4 hours towards an RDO if working a 40 hour week/9 day fortnight, the balance of the EMS employees covered by the Agreement are subject to a 38 hour week, accumulating 2 hours towards an RDO if working a 40 hour week. These scenarios are of course reflected in Appendix 1 and Appendix 2.

[43] It is therefore self-evident that regardless of the contents of the Explanation document that deal with RDOs and the belief of EMS and Mr Gabsch, the wording of clause 30.1 of the 2013-2016 Agreement stipulating 13 RDOs per year was not going to be applicable to the employees of EMS permanently based at Sugar Australia on a 36-hour week. A change to the wording of the clause stipulating 13 RDOs was going to be required regardless of the belief of EMS and Mr Gabsch that RDOs should only accrue according to hours worked and not during periods of unpaid absences. Accordingly, I am not persuaded that the difference in wording between the RDO clauses in the 2013-2016 Agreement and the Agreement is determinative in the resolution of the question as to whether ambiguity exists.

[44] The following principles from Berri assist with resolving the question of whether there are any objective facts that would assist in the task of interpretation:

“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.

…

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…

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. ……post-agreement conduct which amounts to little more than the absence of a complaint or common inadvertence is insufficient to establish a common understanding.” 11

[45] I have also considered the following observations of the Full Bench in Berri:

“[88] The diversity of interests involved in the negotiation and making of enterprise agreements warrants the adoption of a cautious approach to the admission and reliance upon evidence of positions advanced during the negotiation process. As Rares J recently observed, in Australian and International Pilots Association v Qantas Airways Ltd:

Substantially, the Act provided that the agreement was a tripartite document between a body of employees, a corporation with numerous officers and an industrial association. The involvement of so many individuals in the formation of the agreement re-emphasises the importance of approaching the construction of that document in accordance with the principle of objectivity. It is important, in doing so, to be cautious and bear firmly in mind the fact that the agreement was formed by a diversity of persons who had sought to protect their differing interests by various formulations of words in it. Those disparate intentions cannot be determinative of the proper construction to be given to the words chosen. In Health Services Union v Ballarat Health Services [2011] FCA 1256 at [79], Gray J said:

In the days when an award might be negotiated between a union and an employer, and made by consent, the existence of a common understanding between the union and the employer as to the meaning of terms might have had some role to play in their construction. Whatever were the terms of such an agreement, and whatever was their meaning, those terms were imposed upon the employees who became bound by the award. In the current era, most industrial instruments are required to be put to a vote of the employees whose work will be covered by them, before they can be certified or approved so as to become enforceable by statute. The union and the employer who negotiated the terms might have had a common understanding of the meaning of them, but that understanding might not have been shared by all or some of the employees who voted for the operation of the agreement. They may have been entirely ignorant of the common understanding. In those circumstances, the occasions on which it can be said that a party to an agreement who entered into it on a common understanding should not be allowed to resile from that understanding will be rarer than they have been in the past.” 12

[46] Applying these principles and observations to the material before me, I am not persuaded that any material objective background facts can be established from either the views held by Mr Gabsch or the contents of the Explanation document he circulated or that these are capable of informing the subject matter of the Agreement in relation to RDOs in the manner contended for by EMS. As established in Berri, evidence of objective facts is to be distinguished from evidence of the subjective intentions. In this case, the views and intentions of Mr Gabsch are subjective. This is all but admitted by EMS in the submission “EMS suggests it is best placed to determine the meaning of the words set out above because it drafted and circulated the extrinsic materials.” However the position of EMS and the view of Mr Gabsch are at odds with Mr Pilon’s belief and ongoing expectation that RDOs accrue while employees are on annual or personal leave. Further, while the Explanation document outlined that RDOs would be “achieved using accrual on the basis of hours worked”, it did not explicitly state that this would result in employees no longer accruing 13 RDOs per year and nor did it specifically deal with the question of whether or not RDOs would accrue on periods of paid leave.

Conclusion

[47] The parties to this dispute reached agreement that the question to be arbitrated by the Commission is:

“With regard to the Engineering & Maintenance Solutions Enterprise Agreement 2016, specifically, the accrual of RDOs, does an employee accrue time towards an RDO when ordinary time hours are not physically worked?”

[48] In its written submissions, the AMWU stated that this question cannot be answered conclusively with a simple “yes” or “no”. I agree because, as outlined above, I am satisfied that clauses 27.5(b) and 27.5(c) of the Award are incorporated into the Agreement through the operation of clause 6 of the Agreement. The effect of this incorporation is that employees accrue time towards RDOs when on authorised annual leave, long service leave, public holidays, paid personal/carer’s leave, workers compensation, paid compassionate leave, paid training leave or jury service but not when absent for other reasons.

[49] As Berri makes clear, the task of interpreting an agreement does not involve rewriting its terms to achieve what might be regarded as a fair or just outcome. The task is always one of interpreting the agreement produced by the parties. I have been persuaded that the answer to the agreed question is as follows:

“Employees accrue time towards RDOs when on authorised annual leave, long service leave, public holidays, paid personal/carer’s leave, workers compensation, paid compassionate leave, paid training leave or jury service but not when absent for other reasons.”

DEPUTY PRESIDENT

Final written submissions:

Australian Manufacturing Workers’ Union, 9 August 2021 and 10 September 2021.

The Trustee for Engineering and Maintenance Solutions Unit Trust T/A Engineering and Maintenance Solutions Pty Ltd, 6 September 2021.

Printed by authority of the Commonwealth Government Printer

<PR734558>

 1   AE424922.

 2   Citing Mondelez Australia Pty Lt v AMWU [2020] HCA 29 at [45].

 3   AE415386

 4   [2017] FWCFB 3005.

 5   [2014] FWCFB 7447.

 6   [2017] FWCFB 3005 at point 1 in [114].

 7 [2018] FCAFC 131, 264 FCR 536.

 8 Ibid at point 7 in [114].

 9 Ibid at point 8 in [114].

 10   MA000010  PR718704, 30 April 2020.

 11   [2017] FWCFB 3005 at [114].

 12 Ibid at [88].