[2021] FWC 6025

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
UGL Engineering Pty Ltd T/A UGL
(C2020/9084)

DEPUTY PRESIDENT ASBURY

BRISBANE, 1 OCTOBER 2021

Alleged dispute about any matters arising under the enterprise agreement and the NES;[s186(6)] – Construction of enterprise agreement – Relationship of agreement with award – Effect of incorporating award provisions into enterprise agreement - Inconsistency between Agreement and Award.

Overview

[1] This decision concerns an application by the Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union known as the Australian Manufacturing Workers’ Union (AMWU) under s.739 of the Fair Work Act 2009 (FW Act) seeking that the Fair Work Commission (the Commission) deal with a dispute under the dispute resolution procedure in the UGL Stanwell Corporation Enterprise Agreement 2020 (2020 UGL Agreement). The Respondent is UGL Engineering Pty Ltd T/A UGL, the employer covered by the Agreement (UGL).

[2] The AMWU and UGL and its employees are covered by the 2020 UGL Agreement which was approved by the Fair Work Commission on 10 July 2020 and commenced operation on 17 July 2020. UGL provides engineering maintenance services in the utilities sector, specifically electricity generation at power stations, owned and operated by Stanwell Corporation. The work undertaken by UGL at the Stanwell Power Station includes “outages” or “shut downs”.

[3] The dispute concerns the proper construction of clauses in the 2020 UGL Agreement relating to the requirements which must be met before an employee is entitled to be paid and classified at Level 2 Tradesperson Special Class under that Agreement. There is a table in clause 13.1 of the 2020 UGL Agreement which sets out “Wage Rates by Classification”. The table includes the following classification and description: “Tradesperson Special Class (Minimum 12 months or 5 UGL outages)”.

[4] The central issue in dispute is whether employees who have a minimum of 12 months or 5 UGL outages are entitled to be classified at Level 2 as a Special Class Tradesperson as contended for by the AMWU or whether the description in the Agreement operates in conjunction with the definition for Tradesperson Special Class in the Manufacturing, and Associated Industries and Occupations Award 2020 (Manufacturing Award) and is an additional requirement, in accordance with the construction advanced by UGL.

[5] The 2020 UGL Agreement provides for arbitration by the Commission after conciliation, and only where the dispute is limited to the interpretation, application or process of implementation of a term of the Agreement. It is common ground that conciliation has not resulted in the resolution of the dispute and that the Commission is empowered to arbitrate the dispute as articulated in the AMWU’s application and to make a determination in relation to it.

[6] Directions were issued requiring the parties to file and serve material. A hearing was conducted on 25 June 2021 in Brisbane. The AMWU was represented by its Industrial Advocate Mr T Bunnag. Permission was sought by Mr D Langridge to represent the Respondent, on the basis that Mr Langridge is employed by the Respondent’s parent company, UGL Pty Ltd as its Industrial Relations Manager and is also admitted as a Lawyer of the Supreme Court of New South Wales. The AMWU did not oppose the request, and having regard to the matters in s.596 of the Act, I granted Mr Langridge permission to the extent necessary to represent the Respondent.

[7] Evidence for the AMWU was given by Mr Willie Joe Cambourn, an employee of UGL and Mr Philip Andrew Golby, an Organiser for the AMWU. Evidence for UGL was given by Mr Mitchell John Warrener, Contract Manager for UGL at the Stanwell Power Station. Mr Langridge and Mr Warriner appeared by video link.

Relevant 2020 UGL Agreement provisions

[8] Clause 5 of the 2020 UGL Agreement relevantly provides as follows:

“5. RELATIONSHIP TO AWARD

5.1 The terms of the Award are incorporated into this Agreement, but only in respect of matters that are not in this Agreement.

5.2 To the extent of any inconsistency between the Award and this Agreement, the terms of this Agreement shall take precedence.”

[9] Clause 13.1 is in the following terms:

“13.1 Wage Rates by Classification

Level	Classification	First pay period on or after 30 April 2020	First pay period on or after 30 April 2021	First pay period on or after 30 April 2022
1	a) Big Bore Welder	$50.26	$51.51	$52.54
b) Welder Special Class (Tube Welder), Electrician Special Class	$49.04	$50.26	$51.27
2	Tradesperson Special Class (Minimum 12 months or 5 UGL outages), Officer in Charge (OIC)/AIW, Tested Welder	$46.77.	$47.89	$48.85
3	a) Tradesperson	$45.67	$46.81	$47.75
	b) Electrician	$46.72	$47.89	$48.85
	c) Crane Driver >80t	$42.89	$43.96	$44.84
4	a) Utility Worker, Dual Advanced Rigger & Scaffolder	$42.44	$43.50	$44.37
4	b) Rigger, Scaffolder, Crane Driver <80t, Experienced Lagger	$41.20	$42.23	$43.08
5	Storeperson, Lagger	$39.10	$40.07	$40.87
6	Trades Assistant, Peggy	$37.58	$38.52	$39.30

[10] The disputed provision relates to Level 2 in the Classification table. Clause 3 of the 2020 UGL Agreement sets out definitions. There are definitions in clause 3 for the following classifications contained in the Classification table: Electrician Special Class; Officer in Charge/Safe Work Co-ordinator (SWC); Tested Welder; Utility Worker; and Welder Special Class. It is not necessary to set out those definitions. There is no definition in clause 3 of the Agreement for Tradesperson Special Class.

AMWU evidence and submissions

[11] Mr Cambourn is a member of the AMWU and is a trade-qualified boilermaker. Mr Cambourn’s evidence can be summarised as follows. For the past seven years, Mr Cambourn has worked as a casual employee for a number of companies and has performed outages/shutdown work for various companies including CBH, MHPS, Downer and UGL. In his role as a boilermaker, Mr Cambourn generally just follows the work on outages/shutdowns. Mr Cambourn started in this work approximately seven years ago.

[12] After completing five shutdowns/outages, Mr Cambourn has always been recognised and paid as a Tradesperson Special Class by CBH, MHPS and Downer. He has worked intermittently (on outages/shutdowns) at the Stanwell Power Stations for approximately two to three years. Mr Cambourn estimates that he has undertaken, on average, four to five shutdowns per year, and has worked on approximately three outages/shutdowns with UGL at the Stanwell Power Stations.

[13] Under cross-examination, Mr Cambourn was asked why his statement did not refer to the “12 month” criteria in the 2020 UGL Agreement definition for Tradesperson Special Class and stated that he did not think that he had to refer to this matter as noted in the definition of a Tradesperson Special Class. Mr Cambourn also said that it is his understanding that employees would never work for one company and do five shuts in 12 months and Special Class rates are paid after five shut downs or more. Further, Mr Cambourn said that he goes from company to company to undertake shut down work and within 12 months does not work for just one company.¹

[14] Mr Cambourn’s understanding is that the requirement to be classified as a Tradesperson Special Class under the 2020 UGL Agreement is that an employee has worked on five or more UGL shutdowns and that this definition is both recognition for experience and a way to attract highly skilled tradespersons to work on shutdowns/outages. Mr Cambourn was not required to approach any of his previous employers about being paid as a Tradesperson Special Class, as he was just automatically paid the higher amount once eligible.

[15] Mr Cambourn accepted under cross-examination that he is not entitled to be paid Special Class rates by UGL because he has not worked on five shut downs. However, Mr Cambourn is aware of other employees on site who have worked on five or more outages and do not get paid Special Class rates. Mr Cambourn agreed that these employees were not giving evidence at the hearing.²

[16] Mr Golby has worked as an Organiser for the AWMU since 1 June 2006. Between June 2007 and August 2012, Mr Golby’s responsibilities included organising employees of contractors engaged at the Stanwell Power Station. During this period, Stanwell Power Station awarded the ongoing site maintenance to a number of different contractors. Mr Golby said that it is his experience in this industry sector that contractors commonly seek to adopt the terms of existing (settled) agreements when they commence a new contract. He understands that this is an arrangement that is agreed between the Power Station Operator (client) and the new contractor. Mr Golby stated that he believed the purpose of this arrangement is so the client can minimise the risk that a new contractor may become involved in protracted industrial disputes as employees seek to establish appropriate working conditions.

[17] Mr Golby’s current responsibilities include organising employees of contractors engaged at the Callide Power Station and the NRG Power Station in Gladstone. During his time as an Organiser, Mr Golby has negotiated the following agreements that he believes are relevant to the present dispute:

• Downer EDI Engineering Power Pty Ltd Queensland Maintenance Services and Minor Capital Enterprise Agreement 2019;

• DMH Plant Services Pty Ltd Enterprise Agreement 2018; and

• MHPS Plant Services Pty Ltd Enterprise Agreement.

[18] Mr Golby stated that each of the abovementioned agreements contains a provision for a Tradesperson Special Class, which is worded in a similar manner as the relevant provision in the 2020 UGL Agreement. Mr Golby has researched and refreshed his knowledge of other relevant agreements that currently apply or have applied to employees of contractors engaged in the Queensland Power Generation maintenance sector and states that the following agreements also contain a provision for a Tradesperson Special Class which is worded in the same manner as the relevant provision in the 2020 UGL Agreement:

• Clyde Babcock-Hitachi (Australia) Pty Ltd Enterprise Agreement 2008;

• Clyde Babcock-Hitachi (Australia) Pty Ltd Enterprise Agreement 2011; and

• Temmco Queensland Maintenance Power Stations Workplace Agreement 2014-2016.

[19] Mr Golby’s evidence was that he also reviewed the previous agreements that applied to employees of UGL who perform work on Power Stations in Queensland and they contain a provision for a Tradesperson Special Class which is worded in the same manner as the relevant provision in the 2020 UGL Agreement. Those agreements are:

• UGL Engineering Pty Ltd Stanwell Corporation – Enterprise Agreement 2014; and

• UGL Engineering Pty Ltd Stanwell Corporation – Enterprise Agreement 2016.

[20] Mr Golby tendered these agreements. It is Mr Golby’s understanding from reviewing these agreements and from his experience as the Organiser for the Central Queensland Region, that the provision for Tradesperson Special Class existed for many years before the 2014 UGL Agreement was negotiated. Further, based on his experience negotiating agreements in this sector and his review of the wording of the 2014 UGL Agreement, Mr Golby strongly believes that the persons who negotiated the 2014 UGL Agreement intended to copy most, if not all of the wording used in the previously negotiated Agreements.

[21] It is Mr Golby’s belief that the words “Tradesperson Special Class (Minimum 12 months or 5 UGL Outages)” should be interpreted to mean that all tradespersons, who have worked for UGL on Power Station work for at least 12 months or for 5 outages, are to be paid the rate of pay that corresponds with this level. The Contractor engaged to perform maintenance work at the Callide Power Station is the Downer Group, and the agreement that currently applies to this work is the DMH Plant Services Pty Ltd Enterprise Agreement 2018. The agreement that applied immediately prior to the current agreement is the MHPS Plant Services Pty Ltd Enterprise Agreement 2015.

[22] During the negotiations for the DMH Plant Services Pty Ltd Enterprise Agreement 2018 and the MHPS Plant Services Pty Ltd Enterprise Agreement 2015, Mr Golby did not recall that the issue of Tradesperson Special Class was discussed. Mr Golby stated that the interpretation of how the Tradesperson Special Class classification applied was changed by Downer management soon after the transfer of business from MHPS to DMH. Mr Golby believes that this occurred in 2017. It is his understanding that the changed interpretation resulted in a dispute between the employees and the company. He believed the former AMWU Assistant Secretary, Mr Terry Bradley, managed the dispute, but does not believe the dispute was notified to the Commission.

[23] It is Mr Golby’s recollection that the basis of the dispute was that there were employees who were paid the Tradesperson Special Class classification while employed by MHPS and when DMH took over, these persons were classified at the base trade level. Consequently, they began being paid at a lower classification level. The impacted employees did not agree with this change. While he was not directly involved in the negotiations for the outcome, Mr Golby recalled conversations where there had been an agreed outcome to resolve the dispute which was that the minimum agreed length of an Outage (for the purposes of reclassification) would be 5 weeks. Therefore, any employee who had worked on 5 or more outages (which each had a duration of 5 weeks) would be paid as a Tradesperson Special Class. Mr Golby has worked on that basis ever since.

[24] In preparation for the drafting of his statement, Mr Golby spoke with Mr Rowan Woodrow who is currently the Project Manager with responsibility for all maintenance work performed by Downer at Callide Power Station. He questioned Mr Woodrow about the Tradesperson Special Class classification and asked him how Downer determines eligibility. Mr Woodrow confirmed to him that Downer recognises Outages as periods of 5 weeks or more duration when determining the eligibility of tradespersons for the Tradesperson Special Class classification.

[25] Mr Golby stated that this definition aligned with his pre-existing understanding of the settlement of the dispute described in his evidence and with Mr Golby’s current understanding of how Downer applies the provision in practice. Mr Golby understands in the current dispute that there is contention about the fact that the Agreement does not contain a “definition” to support the criteria and information contained in the classification and wage rates matrix.

[26] Mr Golby’s personal experience as an Organiser who routinely negotiates agreements, including agreements containing this provision, is that it is commonplace for definitions to not be included in agreements. There are many reasons for this, but in Mr Golby’s experience, the clause was not contentious to the existing Downer workforce and so he did not see the need to change the status quo. Further, Mr Golby’s evidence was that given most employers zealously control the drafting process, it was very difficult to get agreed wording written into an agreement, unless the employer wants to resolve a significant existing dispute. Mr Golby stated that it is his preference to include definitions wherever that is possible, but, again, that is not always achieved or achievable.

[27] Mr Golby understands that consideration may be given in the current matter to the history of this provision. It is his belief that this provision was most likely originally written into earlier versions of the 2020 UGL Agreement to give employees who work on power station shutdowns recognition for the skills and contextual knowledge they have gained performing maintenance work on power generating assets. These facilities are highly complex and tradespersons with relevant experience working in them are more productive than persons without the experience. In a shutdown or outage situation, time is critical and any loss of time due to workers becoming familiar with the work or work environment will delay the unit being re-started and producing power. Consequently, it is in an employer’s interest to provide a higher rate to attract experienced tradespersons.

[28] Mr Golby also believes the construction of this customised classification needs to be analysed in order to get a proper understanding of it was created. In his role as an Organiser, Mr Golby has negotiated many shutdown agreements in the Central Queensland region. Most of these agreements are predicated on the Manufacturing Award. As a consequence, Mr Golby is familiar with the provisions of this Award.

[29] In particular, Mr Golby is familiar with the classification structure. He understands that the minimum Tradesperson Special Class classification (Level 1) aligns with the C8 level. The relativity of this level is 110% of the trade rate. There is also a more advanced Tradesperson Special Class classification (Level 2) which is at the C7 level. The relativity is 115%. Mr Golby has reviewed the wages matrix in the 2020 UGL Agreement, and it is his understanding that the Tradesperson Special Class classification relativity is 102.5% of the Tradesperson rate.

[30] It is Mr Golby’s belief that the setting of the Tradesperson Special Class classification in the various power station contractor maintenance agreements represents an intention by the negotiating parties to develop a mechanism whereby the employer can readily classify experienced tradespersons at a level that is higher than the base trade, whilst also limiting the potential increase which would otherwise have been 110%, based on the Award relativities.

[31] The existing mechanism, which Mr Golby has seen included in the numerous power station contractor agreements that he has negotiated, is one that he believes the negotiating parties developed and implemented without believing there was a need to also incorporate a detailed definition, separate to the criteria provided for in the classification structure.

[32] Further, Mr Golby currently organises workers who work under the DMH Plant Services Pty Ltd Enterprise Agreement 2018 an agreement that he negotiated which contains this classification, and that agreement does not contain a definition. As there is currently no dispute between Downer and the AMWU over how the provision is determined, he has not seen any necessity in demanding a definition be included in the agreement. In short, as a negotiator, he took the view that if there is nothing to argue over, let sleeping dogs lie.

[33] Mr Golby believes all tradespersons who have worked for Downer Group on Power Station work for at least 12 months or for 5 outages are paid the Level 2 rate of pay, which corresponds with the wording of this provision. Mr Golby has reviewed the DMH Plant Services Pty Ltd Enterprise Agreement 2018 and the definitions section does not include a definition of Tradesperson Special Class. To the best of his knowledge even though not documented in the EBA, DMH Plant Services management recognise an outage duration to be a period of 5 weeks.

[34] Finally, as an Organiser who visits these shutdowns on a regular basis, Mr Golby understands the importance of the recognition of this role as it gives the Tradespersons the ability and incentive to hold themselves in readiness to utilise their acquired skills for outages when they occur.

[35] Under cross-examination, Mr Golby agreed that there have been three iterations of the Agreement – 2014, 2016 and 2020. Mr Golby was not a bargaining representative for the 2020 Agreement or the earlier agreements. Mr Golby was taken to the Clyde Babcock Hitachi Agreement 2008 appended to his statement and agreed that the drafters of that agreement had specifically excluded the Award and adopted wording that could have been used by the drafters of the disputed UGL Agreement and was not used. Mr Golby could not recall a similar dispute in relation to the 2016 UGL Agreement. In response to a question as to whether he contended that an apprentice with 12 months experience should be paid Tradesperson Special Class rates, Mr Golby said that those rates should be paid to a person with the relevant qualification including having worked on power station shut downs under an agreement with the relevant definition.

[36] The AMWU submitted that the issue to be determined is:

“Given the terms of the Enterprise Agreement, are employees who are engaged as Tradespersons and who have either:

• Been employed by UGL for a minimum of 12 months; or

• Participated in 5 UGL Outages

entitled to be paid as a Tradesperson Special Class at the rate contained in clause 13.1 (level 2) of the Enterprise Agreement?”

[37] In determining what specific provisions in an agreement mean, the AMWU relied on the principles of construing an Agreement set out in Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union’ known as the Australian Manufacturing Workers Union (AMWU) v Berri Pty Limited (Berri).³ Applying Berri, the starting point is to consider whether an agreement has a plain meaning or it is ambiguous or susceptible of more than one meaning. This is done by considering the ordinary meaning of the relevant words that are in dispute.

[38] The AMWU submits that clause 13.1 of the 2020 UGL Agreement classifies and defines who is eligible to be appointed as, and accordingly remunerated as, a Tradesperson Special Class. The criteria that are established for this classification are clearly stated as being “Minimum 12 months or 5 UGL outages”. The words used within clause 13.1 in relation to Tradesperson Special Class are clear, simple and unambiguous. The ordinary meaning and construction of the terms used throughout the entirety of the clause, not just with respect to Tradesperson Special Class are clearly intended to be that if an employee meets the criteria expressed within the clause, they will be remunerated and classified accordingly.

[39] Similarly, the AMWU’s position is that clause 5 is unambiguous in terms of interpretation and application. Clause 5 of the 2020 UGL Agreement has two implications. The first implication is that the terms of the Manufacturing Award will be incorporated into the 2020 UGL Agreement only in circumstances where that Agreement is silent with respect to matters. The key words are “silent with respect to matters”.

[40] Through adopting the plain and ordinary meaning of the word “matters”, the AMWU submitted that it is clear that both the 2020 UGL Agreement and the Manufacturing Award contain terms relating to the same matters, which is the criteria for the classification of Tradesperson Special Class. The Manufacturing Award provides that to be classified as a Tradesperson Special Class at the C8 level, an employee must have completed “C10 [qualifications] + 40% towards a Diploma of Engineering, or equivalent”. There are further requirements under the Manufacturing Award to be classified as a Tradesperson Special Class under the C7 level. In contrast, the Agreement at clause 13.1 provides criteria for the classification of Tradesperson Special Class as being “Minimum 12 months or 5 UGL outages”.

[41] While the criteria for classification under the Manufacturing Award and 2020 UGL Agreement may be different, the AMWU submitted that the provisions deal with the same matter, which is how a person attains classification as a Tradesperson Special Class. Therefore, it cannot be said that the 2020 UGL Agreement is “silent” with respect to how a person attains classification as a Tradesperson Special Class, as this is provided for at clause 13.1 of the 2020 UGL Agreement. It was submitted by the AMWU that the second implication of the plain meaning of the words contained in clause 5 is that if there is any inconsistency between the Manufacturing Award and the 2020 UGL Agreement, the terms of the Agreement prevail over the terms contained in the Award.

[42] As both the Manufacturing Award and 2020 UGL Agreement deal with the same matter, which is the criteria for the classification of Tradesperson Special Class, the AMWU submitted that the effect of clause 5.2 is that the definition and criteria of Tradesperson Special Class contained within the 2020 UGL Agreement takes precedence over the definition and criteria contained within the Award as they cover the same matters. Put another way, the AMWU said that the definition and criteria within the 2020 UGL Agreement is plainly drafted to the extent that it alone provides for the classification of “Tradesperson Special Class” and the Award has no work to do in relation to this matter by virtue of clause 5.2.

[43] Throughout the course of this dispute, the AMWU submitted the Respondent has maintained that to be classified as a Tradesperson Special Class, an employee is required to meet the criteria under the Manufacturing Award (presumably at the C8 level but this is not settled) and in addition, the criteria under the 2020 UGL Agreement of “Minimum 12 months or 5 UGL shutdowns”.

[44] The AWMU’s view of this approach is that it is contrary to subclause 5.2 of the 2020 UGL Agreement and is a nonsensical double-dipping exercise by the Respondent which effectively requires employees to jump through two sets of hoops when there should only be one set of criteria, which exists within the 2020 UGL Agreement and takes precedence. The AMWU submitted that the Respondent cannot require an employee to meet the criteria of both the Manufacturing Award and 2020 UGL Agreement to be classified as a Tradesperson Special Class. The two sets of criteria for a Tradesperson Special Class under the Manufacturing Award and the 2020 UGL Agreement are not to be applied concurrently because they relate to the same matter.

[45] The AMWU submitted that, in the alternative, if the Commission considers that the language of the agreement is ambiguous or susceptible of more than one meaning then the AWMU has provided evidence of the surrounding circumstances to aide the interpretation of the agreement. As the Full Bench said in Berri, the resolution of a disputed construction of an agreement will turn on the language of the agreement having regard to its context and purpose. The AMWU submitted that the context can appear from the text of the agreement viewed as a whole and the disputed provisions place and arrangement in the agreement.

[46] In terms of the positioning of the disputed provisions in the 2020 UGL Agreement, while UGL has attached considerable weight to the fact that Tradesperson Special Class is not defined at clause 3 of that Agreement (definitions), the AMWU submitted that when viewed in the context of the Agreement as a whole, the fact that the term is not defined in clause 3 of the Agreement is irrelevant because:

• Not all terms and classifications that are defined in the 2020 UGL Agreement are defined within clause 3. For example, at clause 13.2, the term “Leading hand 1” and “Leading hand 2” are defined by reference to criteria which is labelled as a “description”, but neither of the positions/classifications are defined at clause 3 of the Agreement because this would be unnecessarily repetitive; and

• Both the criteria for Tradesperson Special Class under the Manufacturing Award and under the 2020 UGL Agreement are contained within a classification structure table/matrix, which sits independently from the definitions section contained at clause 3 of the Agreement and clause 2 of the Award.

[47] The AMWU submitted that the positioning of the criteria for classification as Tradesperson Special Class under both the Manufacturing Award and the 2020 UGL Agreement are almost identical. Contrary to the Respondent’s position throughout this dispute, the absence of the term Tradesperson Special Class from the definitions contained in clause 3 of the 2020 UGL Agreement, does not undermine the Union’s interpretation because similarly, the Award also does not contain a definition of Manufacturing Tradesperson Special Class at clause 2.

[48] The AMWU cited the decision of the Full Court of the Federal Court in James Cook University v Ridd ⁴ where it was said:

“Recourse may be had to the history of a particular clause “Where the circumstances allow the court to conclude that a clause in an award is the product of a history, out of which it grew to be adopted in its present form…”

[49] The AMWU submitted that the words in the 2020 UGL Agreement, in particular at clause 13.1 with respect to the criteria for a Tradesperson Special Class, are a product of a history as outlined in Mr Golby’s witness statement. Mr Golby has been an organiser with the Union since 1 June 2006 and his responsibilities include organising Employees of contractors engaged at the Stanwell Power Station in addition to other power stations throughout the Central Queensland region.

[50] Mr Golby’s evidence is that each of the agreements for other employers within the same industry contains a provision for a Tradesperson Special Class which is worded in a similar manner to Clause 13.1 of the UGL Stanwell Corporation Enterprise Agreement. Moreover, the AMWU submitted that Mr Golby’s evidence establishes that between June 2007 and August 2012, Stanwell Power Station awarded the ongoing maintenance to a number of different contractors including CBH. The Clyde Babcock-Hitachi (Australia) Pty Ltd Enterprise Agreement 2011, which effectively was the predecessor contractor agreement to the first UGL Stanwell agreement in 2014, contained the same wording for classification of a Tradesperson Special Class within the wages matrix as the current disputed provision. The crux of Mr Golby’s evidence is that the provision for Tradesperson Special Class existed for many years before the UGL 2014 Agreement was negotiated.

[51] In Ridd, it was further stated that “words are not to be interpreted in a vacuum divorced from industrial realities but in the light of the customs and working conditions of the particular industry”. Mr Golby’s evidence was said to establish that in the power generation and maintenance industry, contractors commonly seek to adopt the terms of existing agreements when they commence a new contract. Moreover, Mr Golby’s evidence is that other companies currently and previously engaged in the power generation maintenance industry, such as Downer, have previously been involved in disputation regarding the meaning of the same criteria for Tradesperson Special Class which are in dispute in the present case. Those companies have now adopted the position that any Employee who has worked on 5 or more outages (which each had a duration of 5 weeks) would be paid as a Tradesperson Special Class and similarly, this is the approach that has been taken by officials, such as Mr Golby, who negotiate these agreements.

[52] On this basis, the AMWU submitted that the widespread usage of this criteria (minimum 12 months service or 5 outages) is an industry standard for the classification of a person as a Tradesperson Special Class, which is why these particular words have appeared in power generation maintenance agreements for over a decade. This was before UGL had even been awarded a contract for power generation maintenance work.

[53] The AMWU’s submission that these criteria are a well-known industry standard is said to be further substantiated by the evidence of Mr Cambourn who gave evidence of his understanding as an employee that the requirements for Tradesperson Special Class are based on experience and/or time served, namely, that the tradesperson had completed 5 shutdowns/outages with the particular company, whether it be Downer or UGL.

[54] The AMWU submitted that it was understood that the historical agreements referred to, where the criteria for Tradesperson Special Class originated from, were negotiated by Officials like Mr Golby, whose intention was to develop instruments that could be readily interpreted at the workplace without the need for interpretation by qualified legal practitioners. Consequently, they were not focused on overly complex interpretations, but more so on practical necessity and an instrument that workers and workplace managers could readily implement.

[55] The AMWU submitted that this contention is supported by a logical interpretation of the words in the 2020 UGL Agreement. As Mr Golby outlines throughout his statement, the original framers sought to create a classification level that enabled experienced tradespersons to be paid at a higher classification level than other, less experienced tradespersons. They did not intend to reference the Manufacturing Award Classification structure because it did not readily suit the issue that was to be addressed. The Manufacturing Award Classification arrangements are complex, and the framers were seeking a simple mechanism.

[56] Further, the AMWU stated that this claim is further supported by the relativity that has been ascribed within the classification structure to the Tradesperson Special Class. Under the 2020 UGL Agreement, the relativity of a Tradesperson Special Class to a Tradesperson is 102.5%. Within the Manufacturing Award, the Tradesperson Special Class definition commences at C8, which is 110% of the Tradesperson rate. From the AMWU’s perspective, it makes sense that the framers chose to move away from the Manufacturing Award arrangements in this instance and to develop a simple and practical relativity that provided a lesser relativity in return for a simpler qualifying mechanism.

[57] In contrast, the AMWU submitted that the Respondent’s interpretation would suggest that the framers of the original set of words chose to reduce the relativity of a Tradesperson Special Class from the Award rate of 110% down to the Agreement rate of 102.5% and at the same time, expanded the existing Award requirements by adding an additional time period and specific industry experience measure.

[58] As a matter of logic, the AMWU submitted that it is difficult to understand how there could have been any “meeting of the minds” between the negotiating parties who drafted the original set of words, that by inserting the words (minimum 12 months or 5 UGL outages) the result would be that employees are required to meet additional classification criteria under the UGL 2020 Agreement than under the Manufacturing Award, for a lower rate of pay. The AMWU’s evidence was that any attempt to infer such an interpretation would be divorced from industrial realities of how bargaining works and how the power generation maintenance industry works.

[59] In summary, the AMWU submitted that clause 13.1 of the 2020 UGL Agreement provides criteria for an employee to be classified and paid as a Tradesperson Special Class. The criteria are “Minimum 12 months or 5 UGL outages”. The words are unambiguous. While the Manufacturing Award also contains criteria for classification as a Tradesperson Special Class, the effect of clause 5 of the 2020 UGL Agreement is that the criteria in the Agreement takes precedence because the Agreement and the Award cover the same matter.

[60] It was submitted by the AMWU that if the disputed words are ambiguous, then the evidence provided by the Union regarding the context surrounding the disputed provisions, the intention of parties and the industrial realities and practices of the industry, should leave the Commission well placed to answer the question for arbitration as follows:

“No, the terms of the Award do not apply, and the correct interpretation of Clause 13.1 is that Tradespersons who have:

a) Been in the employ of UGL for 12 months or more; or

b) Undertaken 5 UGL shutdowns should be classified as a Tradesperson Special Class and be paid accordingly.”

[61] In oral submissions at the hearing, Mr Bunnag emphasised that the 2020 UGL Agreement deals with the matter of the classification of employees at Level 2 by virtue of them meeting the criteria for Tradesperson Special Class in clause 13 of the Agreement – a minimum of 12 months or 5 UGL outages. Notwithstanding that this provision is in the Wages clause rather than the Definitions clause of the 2020 UGL Agreement, Mr Bunnag submitted that it is a definition. The Manufacturing Award deals with the matter of classification at the Level of Tradesperson Special Class by requiring that in order to be classified at that Level an employee is required to have completed 40% towards a Diploma of Engineering for Level 1 C8 and 60% for Level 2 C7.

[62] While the criteria for classification under the Manufacturing Award and the 2020 UGL Agreement differ, the provisions deal with the same matter and it cannot be said that the Agreement is silent with respect to how a person attains classification at Level 2 Tradesperson Special Class under the Agreement. As a result of the inconsistency between the Manufacturing Award and the 2020 UGL Agreement, the Agreement will prevail over the Award to the extent of the inconsistency.

[63] Mr Bunnag also pointed to the fact that the Manufacturing Award provides for two levels of Special Class Tradesperson at C8 and C7 respectively and that Mr Warrener’s evidence was that they would be treated in the same way if UGL’s construction of the 2020 UGL Agreement was correct. This was said to be a nonsensical approach which was never intended. It was also submitted that the Respondent was “double dipping” by trying to get employees to “jump through two sets of hoops” in order to be classified at the level of Tradesperson Special Class. In relation to the position of the definition for a Tradesperson Special Class in clause 13 of the 2020 UGL Agreement rather than with other definitions in clause 3, it was submitted that not all of the terms found in clause 13 in relation to classifications, are defined in clause 3.

[64] Mr Bunnag further submitted that the historical and industrial context in which the clause was drafted supports the construction of the 2020 UGL Agreement advanced by the AMWU. Reference was made to the evidence of Mr Golby of the inclusion of the same or similar provision in other agreements covering employees of contractors engaged at power stations throughout central Queensland, including CBH which held the contract to perform work at Stanwell prior to UGL. Reference was also made to Mr Golby’s evidence that new contractors commonly seek to adopt the terms settled for previous contractors. This was also said to be supported by the evidence of Mr Cambourn who is paid special class rates by other contractors when he has undertaken work on 5 outages. The parties who negotiated the 2020 UGL Agreement and its predecessors were submitted to have been attempting to establish a classification level that allowed experienced tradespersons to be paid at a higher rate than other less experienced tradespersons, without intending to reference the award classification structures. It was submitted that this is because the Manufacturing Award classification structures are complex and the original frames seemed to have been seeking a simple mechanism that reflected and rewarded experience working on particular pieces of power generation infrastructure.

[65] Mr Bunnag contended that this was apparent when the relativity ascribed to the Tradesperson Special Class within the 2020 UGL Agreement classification structure. The relativity between the Level 1 Tradesperson classification and the Level 2 Tradesperson Special Class classification in the 2020 UGL Agreement is 102.5% while the relativity for a Tradesperson Special Class Level 1 classification in the Award is 110%. To accept the construction advanced by UGL would require acceptance of the proposition that the AMWU officials who negotiated the 2014 UGL Agreement intended to reduce the relativity of a Tradesperson Special Class from 110% to 102.5% while at the same time, expand the existing Manufacturing Award requirements by adding an additional time period and a specific industry qualification. Such a construction would be divorced from industrial realities notwithstanding that the actual rates in the 2020 UGL Agreement exceed those in the Manufacturing Award.

[66] In submissions in reply, Mr Bunnag contended that the fact that UGL is unable to provide documentation to establish the basis of the definition for an Electrician Special Class in clause 3 of the 2020 UGL Agreement indicates that clause 3 is not a proper definitions clause and that the words in the classification table “(12 months or 5 UGL shutdowns)” are a definition.

UGL evidence and submissions

[67] Mr Warrener is currently employed as Contract Manager, managing the Respondent’s Stanwell contract, and has been in this position since 8 October 2018. Mr Warrener has worked in the resources, mineral processing and power industries in Queensland since 2003. In Mr Warrener’s experience in the power industry in Queensland, the only industry standard with respect to what a Tradesperson Special Class is defined by is that as set out in the Manufacturing Awardand its predecessors.

[68] In or around 2020, Mr Warrener was the manager responsible for bargaining on behalf of UGL. Mr Warrener was also responsible for explaining the Agreement to employees. Mr Warrener stated that Mr Willie Cambourn and Mr Phillip Golby are not known to him, and they did not participate in bargaining for the negotiation of the 2020 UGL Agreement. During the negotiations, the AMWU proposed a definition of Tradesperson Special Class to the effect that an employee would become a Tradesperson Special Class if they were a tradesperson (ie. a C10 level employee) with 12 months service or had experience in 5 UGL outages. Mr Warrener rejected this claim on behalf of UGL and informed the AMWU that the eligibility to be a Tradesperson Special Class would need to remain consistent with the qualification requirements in the Manufacturing Award. The AMWU informed him that they disagreed with his position. Mr Warrener responded by stating that UGL would be maintaining its position on this point.

[69] In or around April 2020, Mr Warrener held a number of explanatory sessions with the employees to be covered by the 2020 UGL Agreement. This involved two sessions which he conducted at Tarong, and another four sessions at the Stanwell site, he explained to the employees that:

• UGL had rejected the AMWU’s proposed revised definition of Tradesperson Special Class and therefore that the parties had reached an impasse on that claim; and

• UGL maintained that the Agreement as drafted and proposed to be voted on provided for the Award to be the instrument which defined the minimum qualifications and requirements for the “Tradesperson Special Class” classification.

[70] Mr Warrener stated that no employee at any of the sessions expressed any discontent to him or asked any questions about the definition of Tradesperson Special Class which he explained either at the sessions or after he gave the explanations above. Similarly, none of UGL supervisors reported that their employees had communicated to them any concerns or questions. At the hearing, Mr Warrener agreed that not every UGL employee attended these information sessions. The employees covered by the Agreement subsequently voted to approve the version of the 2020 UGL Agreement that Mr Warrener explained in the sessions.

[71] Under cross-examination, Mr Warrener agreed that his entire experience in the Queensland power industry before working for UGL comprises five years of employment at the Millmerran Power Station. Mr Warrener was shown a copy of the Broadspectrum Millmerran Queensland Enterprise Agreement 2017 and agreed that it specifically excludes the Award except where clauses of the Award are “specifically called up” and that the Agreement does not contain a classification for special class tradespersons. Mr Warrener also agreed that the classification table in the Millmerran Agreement makes no reference to the Manufacturing Award. Mr Warrener maintained that there had been employees covered by the Millmerran Agreement who had sought to have higher level skills recognised but could not recall how these claims had been dealt with.

[72] Mr Warrener agreed that the provisions of the 2014 and 2016 UGL Agreements included the same reference to Tradesperson Special Class as having a minimum of 12 months or 5 UGL outages as is currently found in the 2020 UGL Agreement. Mr Warrener agreed that he only negotiated one UGL Agreement being the 2020 Agreement and that he did not draft the original words found in the 2014 UGL Agreement. Mr Warrener also agreed that what the AMWU actually sought in the negotiations for the 2020 UGL Agreement was to move the wording relating to the Tradesperson Special Class from the wages table to the definitions clause and that the Company refused this claim.

[73] In relation to the Manufacturing Award classification definitions, Mr Warrener agreed that there are two levels of Special Class Tradesperson at C8 and C7 with the C7 classification being at a higher level and having a higher relativity to the C10 trade level. Mr Warrener said that UGL pays employees who would be entitled to be classified at either the C7 or C8 Level under the Manufacturing Award, at the same Level 2 rate for Special Class Tradesperson under the UGL 2020 Agreement. Mr Warrener said that UGL applies the Agreement so that the 12 months minimum experience or 5 UGL outages is an additional requirement to the classification requirements for C8 under the Manufacturing Award. Mr Warrener accepted that this resulted in the UGL 2020 Agreement being inconsistent with the Manufacturing Award based on his understanding of the application of the 2020 Agreement. In relation to the information sessions for the 2020 UGL Agreement, Mr Warrener agreed that not all employees attended and that he was not aware of how many casual employees attended.

[74] In response to questions from me, Mr Warrener agreed that there had been changes to the 2020 UGL Agreement when compared with the 2016 UGL Agreement with respect to a number of classifications including placing classifications for Electrician Special Class, Welder Special Class and Big Bore Welder at level 1 and including a classification for Tested Welder at Level 2. Mr Warrener agreed that a Tested Welder at Level 2 under the 2020 UGL Agreement would not have 40% of the modules towards a Diploma of Engineering as the Manufacturing Award requires for the C8 classification and then said that he was not sure as to whether the Tested Welder would have qualifications equivalent to 40% of the Diploma of Engineering modules.

[75] I also put to Mr Warrener that the Form F17 Employer declaration filed by UGL in support of the approval of the 2020 UGL Agreement, states that there was an explanatory handout provided to employees which included information about the classification of Tested Welder being inserted into Level 2 of the classification structure in the 2020 UGL Agreement. Mr Warrener said that this was to provide clarity. Mr Warrener agreed that under the 2020 UGL Agreement, the Electrician Special Class had been placed at a higher level than the Tradesperson Special Class as had the Big Bore Welder classification.

[76] UGL framed the question for arbitration as being:

“Whether an employee classified as a Tradesperson progresses to the higher Tradesperson Special Class classification by virtue of satisfying either of the following two elements in clause 13.1 for the Level 2 wage rate:

1. a minimum of 12 months; or

2. 5 UGL outages,

and should therefore be paid the Level 2 wage rate?

[77] UGL submits that the answer to this question is “No”. Clause 3 of the 2020 UGL Agreement contains definitions for some classifications, but not others: see for example “Electrician Special Class” and “Welder Special Class” as distinct from “Tradesperson Special Class”, or indeed “Tradesperson”. Clause 3 of the 2020 UGL Agreement defines the Award as meaning the Manufacturing and Associated Industries and Occupations Award 2020 (the Award).

[78] The Award provides for definitions of “Tradesperson” and “Tradesperson Special Class” as follows:

Schedule A—Classification Structure and Definitions

A.3 Classification Structure

The classification structure and definitions set out in clauses A.3 and A.4 apply to employees covered by the Award except where otherwise specified.

C7	Engineering/ Manufacturing Tradesperson—Special Class Level II	Certificate IV in Engineering, or C10 + 60% towards a Diploma of Engineering, 60% towards a Diploma of Laboratory Technology, or equivalent.	115%
C8	Engineering/ Manufacturing Tradesperson—Special Class Level I	C10 + 40% towards a Diploma of Engineering, or equivalent	110%
C9	Engineering/ Manufacturing Tradesperson—Level II	C10 + 20% towards a Diploma of Engineering or equivalent	105%
C10	Engineering/ Manufacturing Tradesperson—Level I	Recognised Trade Certificate, or Certificate III in Engineering— Mechanical Trade, or Certificate III in Engineering—Fabrication Trade, or Certificate III in Engineering— Electrical/Electronic Trade, or equivalent	100%

[79] UGL submitted that as would be the case where an agreement provides for a shift allowance of 50% but does not prescribe the span of hours of the shift, it is an entirely orthodox exercise in construction to look to the underpinning Award to understand the application of the clause.

[80] In relation to context, UGL submitted that the Applicant’s contentions about what occurs at other companies or what may have occurred in negotiations is mere speculation and takes the matter no further. Further, Mr Golby by his own admission was not present in any such negotiations and Mr Cambourn only gave evidence about how other companies may have agreed to a particular interpretation of a similar clause in other agreements. This says nothing of the context of those agreements and the approaches of others (even if they were relevant, which they are not). It speaks only to the subjective desire of the Applicant for the clause to mean what it wants it to mean rather than saying anything of the necessary mutual intention of the parties in this matter.

[81] UGL submitted that while it is unnecessary for the Commission to go to context, it is pertinent having regard to the evidence of Mr Warrener that:

a) During bargaining for the 2020 UGL Agreement, the AMWU sought to expressly define “Tradesperson Special Class” as being a tradesperson who had 12 months’ experience or had undertaken 5 UGL outages;

b) This claim was expressly rejected by UGL; and

c) UGL specifically told employees during the explanation of the 2020 UGL Agreement that a “Tradesperson Special Class” has to be qualified in accordance with the Manufacturing Award and also needed to have 12 months’ experience or have undertaken 5 UGL outages.

[82] Having regard to the above, UGL submitted that even if the Commission was minded to examine the context of the 2020 UGL Agreement having regard to Berri, then the mutually known background still squarely supports the contentions advanced by UGL and for these reasons, the question to be determined by the Fair Work Commission should be answered “No”.

[83] In oral submissions at the hearing, Mr Langridge for UGL contended that nothing had arisen as a result of the AMWU’s evidence which had caused the Company to change its position. The AMWU’ construction would give the term “Special Class” no meaning at all and would be a departure from the industrial understanding of the reference to Special Class Tradesperson which is clearly defined by the Manufacturing Award and incorporated into the UGL Agreement. It was submitted that if this had been the intention, the parties would have agreed to this during the bargaining for the 2020 UGL Agreement. Mr Langridge submitted that not only was this not agreed but the Union raised the issue during bargaining and it was rejected by UGL. In this regard, none of the AMWU’s witnesses were involved in bargaining for the Agreement and cannot give any first-hand evidence about issues that were canvassed during bargaining. This was contrasted with Mr Warrener’s evidence of first-hand knowledge of the negotiations, which should be accepted.

[84] In response to a question from me as to why, if there was an issue with the definition of Special Class Tradesperson raised by the AMWU in the negotiations for the 2020 UGL Agreement, the Company would not have clarified the matter by inserting a definition into clause 3 referring to the Manufacturing Award definition for that classification, Mr Langridge said that it was not considered necessary because it was understood that the Manufacturing Award was incorporated. In relation to the Electricians Special Class, Mr Langridge confirmed that UGL’s position is that there is no inconsistency between the definition of Special Class Electrician in the Manufacturing Award and the 2020 UGL Agreement because the Agreement contains a definition for Special Class Electrician in clause 3 which provides for definitions generally.

[85] Accordingly, UGL accepts that in relation to that classification there is an inconsistency between the 2020 UGL Agreement and the Manufacturing Award with respect to classification as an Electrician Special Class. In contrast, the 2020 UGL Agreement does not contain a definition for Tradesperson Special Class. It was also submitted that there is nothing unusual about Special Class Electricians being paid more than other tradespersons and that the 2020 UGL Agreement provided for this. Further, if the parties had intended that Tradesperson Special Class have a meaning other than the Manufacturing Award it would have been defined in a manner similar to the definition in clause 3 of the 2020 UGL Agreement for Electrician Special Class.

[86] Mr Langridge also submitted that the term Tradesperson Special Class should be given its plain and ordinary meaning as derived from the Manufacturing Award. Mr Golby’s evidence about what happened in negotiations for the 2020 UGL Agreement is speculative as he was not involved and the evidence about negotiations involving other employers and what those employers may have agreed to, is hearsay and irrelevant to the issues presently in dispute. Further, it was submitted by Mr Langridge that construing the 2020 UGL Agreement as contended for by the AMWU would involve rewriting the classification so that the words “Special Class” were deleted and the Level 2 was applied to Tradespersons with 12 months experience of 5 UGL outages.

[87] In response to further questions from me, UGL was unable to provide a copy of the definition contained in clause 3(39) of the Electrical Engineering Schedule of the Engineering Award – State referred to in the definition of Electrician Special Class in clause 3 of the 2020 UGL Agreement. However, it was contended that this had now been superseded by the current version of the Engineering Award – State on the basis that the definition in clause 3 is not limited to a particular point in time. Reference was made to clause 5.4.11 of the 2012 version of that Award which defines an Electrician Special Class as having completed “six appropriate modules in addition to the training requirements of a C10 Level, six appropriate modules towards a National Diploma or six appropriate modules towards an Advanced Diploma”.

Approach to the construction of enterprise agreements

[88] The issues raised by the Union parties concern the proper construction of the 2020 UGL Agreement. The approach to the task of construing an enterprise agreement was most recently set out in a Decision of a Full Bench of the Commission in Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU) v Berri Pty Ltd 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 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.”

[89] In CFMEU v Endeavour Coal Pty Ltd T/A Appin Mine⁵ a Full Bench of the Commission held that the context of an agreement provision is significant. In this regard, the Full Bench set out the explanation of this point by the NSW Court of Appeal in Mainteck Services Pty Ltd v Stein Heurtey SA,⁶ emphasising the following matters:

• Until a word or phrase is understood in the light of the surrounding circumstances, it is rarely possible to know what it means⁷ and there is always some context to any statement;⁸

• Language considered in its context will often have a clear meaning and context will often not displace that meaning – “but not always”;⁹

• To state that a legal text is clear reflects the outcome of an interpretation process and means that there is nothing in the context that detracts from the ordinary literal meaning and cannot mean that context can be put to one side;¹⁰

• The phrase used by Mason J in Codelfa “if the language is ambiguous or susceptible of more than one meaning” does not mean that the susceptibility of the language to more than one meaning must be assessed without reference to the surrounding circumstances and in order to determine whether more than one meaning is available it may be necessary to turn to context;¹¹ and

• Context has also been described as surrounding circumstances and the meaning of terms normally requires consideration not only of the text, but of the surrounding circumstances known to the parties and the purpose and object of the transaction¹²

[90] The case law in relation to the approach to the construction of enterprise agreements makes it clear that context and purpose are relevant to the construction of provisions in an enterprise agreement and must be considered even where the words of the provision being construed appear, on their face, to have a clear and unambiguous meaning. The Full Court of the Federal Court in Workpac Pty Ltd v Skene described the approach to the construction of enterprise agreements as 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: City of Wanneroo v Holmes (1989) 30 IR 362 (Holmes) at 378 (French J). The interpretation “… turns on the language of the particular agreement, understood in the light of its industrial context and purpose …”: Amcor Ltd v Construction, Forestry, Mining and Energy Union (2005) 222 CLR 241; 138 IR 286 (Amcor) at [2] (Gleeson CJ and McHugh J). The words are not to be interpreted in a vacuum divorced from industrial realities (Holmes at 378); 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 (Holmes at 378–9, citing George A Bond & Co Ltd(in liq) v McKenzie [1929] AR (NSW) 498 at 503 (Street J)). 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: see Kucks v CSR Ltd (1996) 66 IR 182 at 184 (Madgwick J); Shop Distributive and Allied Employees’ Association v Woolworths SA Pty Ltd [2011] FCAFC 67 at [16] (Marshall, Tracey and Flick JJ); Amcor at [96] (Kirby J). 13

[91] There is also a principle that the construction of industrial instruments should contribute to a sensible industrial outcome such as would be attributed to the parties who negotiated and executed the industrial instrument.¹⁴ As Madgwick J in Kucks v CSR 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.

But the task remains one of interpreting a document produced by another or others. A court is not free to give effect to some anteriorly derived notion of what would be fair or just, regardless of what has been written into the award. Deciding what an existing award means is a process quite different from deciding, as an arbitral body does, what might fairly be put into an award. So, for example, ordinary or well-understood words are in general to be accorded their ordinary or usual meaning.”¹⁵

Consideration

[92] I turn now to apply the principles relating to the construction of enterprise agreements to the relevant provisions in the present case. As the Full Bench of the Commission observed in Berri, the construction of an enterprise agreement begins with consideration of the ordinary meaning of the relevant words to determine whether the words have a plain meaning or are ambiguous or susceptible of more than one meaning.

[93] The disputed term “(Minimum 12 months or 5 UGL Outages)” appears immediately after classification title “Tradesperson Special Class”. It is common ground that the words in parentheses appearing immediately after the classification “Tradesperson Special Class” apply to that classification. It is also common ground that it is necessary for an employee classified as a Tradesperson Special Class at Level 2 of the UGL 2020 Agreement to have a minimum of 12 months or 5 UGL outages. The issue in dispute is whether 12 months or 5 UGL outages are the only criteria necessary for an employee to be classified at Level 2 as a Tradesperson Special Class or whether an employee is required to meet these criteria in addition to the requirements for classification as an Engineering/Manufacturing Tradesperson Special Class under the Award.

[94] The language of the disputed provision, read in isolation, appears to be plain, and there is no apparent ambiguity. On the face of the provision, a Tradesperson Special Class is an employee with a minimum of 12 months or 5 UGL outages. Both criteria are capable of objective identification and it appears to be clear that Tradespersons who meet these criteria are entitled to be classified as Tradesperson Special Class Level 2 and paid the hourly rate for the classification. However, that is not the end of the matter, and it is necessary to consider whether the provision is ambiguous or susceptible of more than one meaning having regard to context and purpose. Context may include the text of the 2020 UGL Agreement as a whole, the place of the disputed provision in the Agreement and the statutory context in which the Agreement was made.

[95] The disputed term is found in clause 13.1 of the 2020 UGL Agreement, which contains a table setting out “Wage Rates by Classification”. While enterprise agreements are not instruments to which the Acts Interpretation Act 1901 (Cth) applies, as the Full Bench in Berri observed, the modes of textual analysis developed in the general law may assist in the interpretation of enterprise agreements, although an overly technical approach to interpretation should be avoided. Headings are considered to be part of a statute and while a heading which is inconsistent with the language of a section gives way to the substantive provision in the event of inconsistency, there is no apparent inconsistency between the heading of the table in clause 13.1 of the 2020 UGL Agreement and the contents of the table. The table is clearly intended to specify both wage rates and classifications to which they apply. Accordingly, on the plain words of the heading and the contents of the table, it specifies both wages and necessary criteria for classification at a particular level.

[96] The term “classification” in the context of an award or enterprise agreement, when used as a noun, is a collection of criteria which may including skills, qualifications, experience and minimum training requirements necessary for an employee to be entitled to be classified or designated at a particular level and to a particular minimum payment. The disputed term, considered in the context of clause 13.1 as a whole, is a definition which sets out criteria necessary for an employee to be classified as a Level 2 Tradesperson Special Class. Read in conjunction with the classification it relates to, the disputed term does not require further definition to have effect and there is no practical reason why the classification of Tradesperson Special Class cannot operate as the entire definition for that classification.

[97] Commencing with clause 13.1 in its entirety, the table provides for 6 Levels from Level 1 to Level 6 in descending order. Wages are expressed as hourly rates and there are two escalations in addition to the starting rates so that the hourly rates apply from the first pay period on or after 30 April in 2020, 2021 and 2022. Levels 1, 3 and 4 in the table have sub-levels with Levels 1 and 4 having two sub-levels and Level 3 three sub-levels, designated as (a), (b) and (c). Level 3 includes classification titles for “Tradesperson”; “Electrician” and “Crane Driver >80t”. The Level 3 wage rate for a Crane Driver >80t is lower than the rates for Tradesperson and Electrician and the rate for an Electrician is higher than the rate for other Tradespersons. Level 2 in the table contains a single hourly rate (with two escalations) for “Tradesperson Special Class (Minimum 12 months or 5 UGL outages”; “Officer in Charge (OIC)/AIW” and “Tested Welder”. Level 1 includes two sub-levels with the highest hourly wage rate in (a) for employees classified as “Big Bore Welder” and the lower rate in (b) for employees classified as “Welder Special Class (Tube Welder)” and “Electrician Special Class”.
[98] Level 3 includes the classification “Tradesperson”. That Level also includes a classification for drivers of cranes more than 80 tonnes, which does not require trade qualifications or equivalent, albeit paid at a lower hourly rate within that Level than is applicable to employees who do hold trade qualifications and are classified as Tradespersons. The classification of “Electrician” is also included at Level 3 but is paid at a higher rate than other Tradespersons at the same level. The classification of “Electrician Special Class” is classified and paid at a higher Level – Level 1 – than other employees classified as “Tradesperson Special Class” who are classified at Level 2.

[99] In the context of the UGL 2020 Agreement as a whole, there are definitions in clause 3 of the Agreement for some, but not all, of the classifications in the table in clause 13.1. The definitions in clause 3 of the 2020 UGL Agreement relate to Level 1(a) Big Bore Welder; Level 1(b) Welder Special Class and Electrician Special Class; Level 2 Officer in Charge (OIC)/AIW and Tested Welder; and Level 4 (a) Utility Worker. The Welder Special Class classification in the table in clause 13.1 includes reference to “(Tube Welder)” and the definition of Welder Special Class in clause 3 of the 2020 UGL Agreement does not define or refer to “Tube Welder”. Accordingly, one of the criteria for classification as a Special Class Welder “(Tube Welder)” is referred to only in the table in clause 13.1 while other criteria for that classification are referred to in the definition of Special Class Welder in clause 3 of the Agreement.

[100] None of the other classifications – Tradesperson, Electrician, Crane Driver >80t, Dual Advanced Rigger & Scaffolder, Rigger, Scaffolder, Crane Driver <80t, Experienced Lagger, Storeperson, Lagger, Trades Assistant and Peggy – are defined in clause 3 of the 2020 UGL Agreement. As previously noted, the reference to Tradesperson Special Class includes “(Minimum 12 months or 5 UGL outages)” and there is no definition of Tradesperson Special Class in clause 3 of the 2020 UGL Agreement. The lack of definition in the Wages Rates by Classification table or clause 3 of the Agreement for these classifications is a matter to which I will return.

[101] It is convenient to next consider clause 5 of the 2020 UGL Agreement which deals with its relationship to the Manufacturing Award, before returning to the interaction between the definitions in clause 3 of the Agreement and the terms of the table in clause 13.1. Clause 5.1 of the 2020 UGL Agreement provides that the terms of the Manufacturing Award are incorporated into the Agreement, “but only in respect of matters that are not in the Agreement”. The ordinary meaning of the term “matter” is a subject or topic under consideration. It is a broad and inclusive term and giving the term that effect, the ordinary meaning of clause 5.1, is that where the Agreement deals with a particular subject or topic, the terms of the Manufacturing Award dealing with the same subject or topic, are not incorporated into the Agreement. The broad description “matters that are not in the Agreement” also indicates that it is sufficient that a matter is in the Agreement to exclude the Manufacturing Award, regardless of the position in the Agreement of the relevant term. In short, whether a matter in the Agreement is contained in a classification table or the definitions clause, has no impact on the operation of clause 5.1.,

[102] It is also the case that clause 5.2 the 2020 UGL Agreement provides that to the extent of any inconsistency between and the Award and the Agreement, the Agreement takes precedence. If the approach set out above was taken with respect to clause 5.1, a provision of the Manufacturing Award which is not incorporated into the 2020 UGL Agreement because the Agreement deals with the same matter, would be inconsistent with the Agreement by virtue of clause 5.2 and would have no effect.

[103] UGL’s construction of clause 5 of the 2020 UGL Agreement effectively requires that inconsistency is found where the 2020 Agreement is covers the matter but in different terms to those in the Manufacturing Award or that terms which apparently describe a classification do not exclude the Manufacturing Award description of the same matter because of the Agreement term is not in a clause entitled “Definitions” but that the Agreement term operates in addition to the Award term regardless of its position in the Agreement.

[104] UGL’s approach to the operation of clause 5 also requires acceptance that the Agreement does not cover the “matter” of describing the skills, qualifications or role necessary for an employee to be entitled to be paid and classified as a Special Class Tradesperson at Level 2 of the Agreement. That construction would also require that the entire definition for an Engineering/Manufacturing Tradesperson – Special Class Level 1 in the Manufacturing Award is taken to be incorporated into the 2020 UGL Agreement by virtue of clause 5.1 of the Agreement and to be given full operation on the basis that no part of the Award definition is inconsistent with the Agreement for the purposes of clause 5.2 of the Agreement.

[105] Accepting, for the sake of this discussion, that UGL’s approach is correct, then it follows that it would also apply with respect to other classifications for which no definition is provided in clause 3 of the 2020 UGL Agreement. For example, the relevant classification definition in the Manufacturing Award for persons who operate cranes and other load shifting devices (other than as an incidental task undertaken by a tradesperson) is Engineering Manufacturing Employee – Level V, regardless of the lifting capacity or tonnage of the crane. The minimum training requirement for that classification is an Engineering Production Certificate II or equivalent. Applying UGL’s approach, employees at Levels 3 and 4 of the 2020 UGL Agreement would be required to have this qualification or equivalent, in addition to being competent to operate a crane with the relevant capacity. There is no evidence that UGL applies this approach to other classifications.

[106] In the context of the 2020 UGL Agreement as a whole, to accept the argument of UGL in the present case would require that every clause in the Manufacturing Award dealing with a matter that is not dealt with in the Agreement is incorporated into the Agreement. Further, every clause of the Agreement that dealt in any way with a “matter” would also need to be mapped against Manufacturing Award provisions dealing with the same “matter”, even if the Award clause dealt with the matter differently, to determine the extent, if any, of inconsistencies. This would also likely result in unintended consequences given the myriad of provisions in the Manufacturing Award compared to the 2020 UGL Agreement.

[107] Contextual considerations of the 2020 Agreement as a whole point to a conclusion that the proper construction of clause 5 is that where the 2020 UGL Agreement deals with a matter in any way, the terms of the Manufacturing Award dealing with the same matter are not incorporated. It is not necessary for the 2020 UGL Agreement to exhaustively provide for a “matter” dealt with by the Manufacturing Award or for each provision of the Award to be reflected in a different provision in the Agreement, before clause 5.1 operates. In short – subject to the possible presumption that the 2020 UGL Agreement would not exclude a term of the Manufacturing Award in a manner which would have resulted in the Agreement failing the better off overall test or not meeting some other requirement of the Act for approval – a term of the Agreement dealing with a matter, covers the field with respect to that matter, and excludes a term of the Manufacturing Award which also deals with that matter, notwithstanding that the Award may deal differently with the matter. Further, once clause 5.1 of the 2020 UGL Agreement operates so that a provision of the Manufacturing Award is not incorporated into the Agreement, clause 5.2 of the Agreement applies to the term of the Manufacturing Award rendering it inconsistent with the terms of the Agreement.

[108] In the present case, the 2020 UGL Agreement deals with the matter of the classification of employees described as “Tradesperson Special Class” by indicating in clause 13.1 that such employees have completed a minimum of 12 months or worked on 5 UGL outages. The Award also deals with entitlements of employees to be classified as Special Class Tradespersons by providing for classifications of Engineering/Manufacturing Tradesperson – Special Class Level 1 and Engineering/Manufacturing Tradesperson Special Class Level 2. The minimum training requirement for classification at these levels as prescribed by the Award, is respectively, C10 plus 40% towards a Diploma of Engineering or equivalent or C10 plus 60% towards a Diploma of Engineering or equivalent. The Award also lists indicative skills for this classification level.

[109] For reasons set out above, it is not necessary for the Agreement to prescribe an equivalent or comprehensive definition for a Special Class Tradesperson to exclude the Award. It is only necessary that the Agreement deal with the same matter. The Agreement does this with respect to Tradesperson Special Class and thereby sets up an inconsistency with the Manufacturing Award to the extent of that matter. In the example provided above, the 2020 UGL Agreement deals with the matter of the level at which Crane Drivers are entitled to be classified, and thereby excludes the definition for C11 Engineering Manufacturing Employee – Level V in the Manufacturing Award.

[110] On the plain meaning of clause 5, the Award definitions for Engineering/Manufacturing Tradesperson Special Class Level 1 and Level 2, are not incorporated into the 2020 UGL Agreement, with respect to the Tradesperson Special Class classification at Level 2 of the Agreement, because the matter of the requirements to be met by employees to be classified at that level under the Agreement is in clause 13.1 of the Agreement.

[111] The fact that the requirements for an employee to be classified as a Tradesperson Special Class are contained in the table setting out Wage Rates by Classification in clause 13.1 of the 2020 UGL Agreement, rather than being set out with other definitions in clause 3, is not determinative of the effect of those requirements as definitions, for the following reasons. Firstly, there are classification titles and terms in clause 13.1 which are also not defined in clause 3 Definitions of the 2020 UGL Agreement. There is no definition of the classifications “Tradesperson” or “Electrician” in the 2020 UGL Agreement.

[112] Other classifications for which definitions are not provided in clause 3 of the 2020 UGL Agreement are Crane Driver >80t, Dual Advanced Rigger & Scaffolder, Rigger, Scaffolder, Crane Driver <80t, Experienced Lagger, Storeperson, Lagger, Trades Assistant and Peggy. It is notable that these classifications are also not specifically defined in the Manufacturing Award and there is no definition in that Award to incorporate into the Agreement with respect to those classifications. In my view, this is because the titles of the classifications are self-explanatory. I also note that there is additional verbiage in the table in clause 13.1 of the 2020 UGL Agreement which has the effect of defining the classifications in that table. An example is the reference to over 80 tonnes and under 80 tonnes with respect to Crane Drivers and Tube Welders in respect of the classification of Special Class Welder. These references act as definitions for the relevant classifications notwithstanding that they are not contained in clause 3 of the 2020 UGL Agreement. There is no basis for treating these references in a different manner to the reference to “Minimum of 12 months and 5 UGL outages” with respect to the classification of Tradesperson Special Class.

[113] Second, the Classification Structure table in item A3.1 of Schedule A to the Manufacturing Award, referred to by UGL in its submissions, does not of itself, exhaustively prescribe definitions for various classification levels in the Award. That table sets out Classification levels, Classification titles, Minimum training requirements and Relativity to C10 which is the base trade level in the Award from which the minimum wage rates in the Award were originally calculated as a percentage of the C10 or 100% rate. The table is read in conjunction with the definitions for the classification levels found in item A.4 of the Schedule, which includes the minimum training requirements from the table and additional descriptors of skills required for various levels. In summary, the Manufacturing Award defines classification levels in a number of provisions which are required to be read together, in the same way as the Definitions clause and the Wage Rates by Classification table in the 2020 UGL Agreement.

[114] Third, the internal structure of the table in clause 13.1 of the 2020 UGL Agreement, read as a whole and in the context of the Definitions in clause 3 of the Agreement and the classification structure in the Manufacturing Award, indicates that the Tradesperson Special Class at Level 2 is not required to meet the minimum training requirements or definition for an Engineering/Manufacturing Tradesperson Special Class Level 1 of the Manufacturing Award (much less the higher Level 2) in addition to the requirement to have a minimum of 12 months or 5 UGL outages. If UGL’s contention to the contrary is accepted, the classification structure in the table in clause 13.1 of the 2020 UGL Agreement, places classifications of employees not required to meet the Award definition for Engineering/Manufacturing Tradesperson Special Class Level 1, at higher levels than employees who are required to meet that definition, and places additional requirements on those employees of a minimum of 12 months and 5 UGL outages. In summary, employees at lower levels in the classification structure in the 2020 UGL Agreement, would be required to meet more onerous and demanding classification definitions and be paid at a lower rate, than employees in higher levels of the same classification structure.

[115] The construction advanced by UGL also creates anomalies between employees classified at the base trade level and higher levels of the 2020 UGL Agreement. The base trade level as defined at C10 in the Manufacturing Award, requires a recognised Trade Certificate or a Certificate III in Engineering – Mechanical Trade, Engineering – Fabrication Trade or Engineering – Electrical/Electronic Trade, or equivalent. The Special Class Level at C8 of the Manufacturing Award requires C10 plus 40% towards a Diploma of Engineering or equivalent. This is so regardless of whether the Trade qualification held by the employee is mechanical, fabrication or electrical/electronic.

[116] Therefore, on UGL’s construction, an employee classified as a Big Bore Welder or a Welder Special Class (Tube Welder) who is not required to have 40% towards a Diploma of Engineering or equivalent, would be classified at a higher level under the 2020 UGL Agreement than a Tradesperson Special Class who UGL contends is required to have 40% of a Diploma of Engineering or equivalent plus a further qualification of 12 months experience or 5 UGL outages. On UGL’s construction, a Tested Welder, who is also not required to hold such qualification or equivalent skills, would be entitled to be paid at the same rate as a Tradesperson Special Class and in addition, the Tradesperson Special Class would be required to have a minimum of 12 months or 5 UGL outages, while the Tested Welder does not.

[117] It is also the case that the classification of Electrician Special Class under the Agreement is placed at a higher level than the Tradesperson Special Class which includes mechanical and fabrication trades, in circumstances where the Manufacturing Award relied on by UGL as the basis for its argument, places special class tradespersons at the same levels regardless of their trade qualification. The definitions in clause 3 include a reference to a definition of Electrician Special Class from an early version of the Engineering Award – State, which contained an Electrical Engineering Section. The various sections of the Engineering Award – State were incorporated into that Award over time, and by 2002 the Engineering Award – State had been consolidated and did not have industry or trade specific schedules. Further, the Engineering Award – State has been revoked. If the definition of Electrician Special Class in the 2020 UGL Agreement is derived from either the previous Electrical Engineering Section of the Engineering Award – State or the now revoked Engineering Award, after the Electrical Engineering Section had been incorporated, it is doubtful that it is equivalent, in terms of minimum training requirements, to the current definition under the Manufacturing Award, for an Engineering/Manufacturing Tradesperson – Special Class Level 1. The fact that UGL’s first Agreement in 2014 was made well after the Engineering Award State provisions referred to were defunct, the 2014 UGL Agreement refers to this definition. This is indicative that it was adopted from other enterprise agreements in the industry at or around the time it was made.

[118] Even if the current definition of Engineering/Manufacturing Tradesperson – Special Class Level 1 in the Manufacturing Award applies to the Electrician Special Class under the UGL 2020 Agreement, that definition also applies to Special Class Tradespersons under the Manufacturing Award generally and not just to those in the Electrical/Electronic stream. If UGL’s argument that a Tradesperson Special Class at Level 2 of the UGL 2020 Agreement is required to satisfy the requirements for classification as an Engineering/Manufacturing Tradesperson – Special Class Level 1 in the Manufacturing Award, and in addition, have a minimum of 12 months or 5 UGL outages, the result is that such an employee is required to have skills that are at least equal to those required of an Electrician Special Class, who is classified and paid at a higher Level 1 under the Agreement. In addition, the Tradesperson Special Class at Level 2 would be required to have a minimum of 12 months or 5 UGL outages, which would not be required of an Electrician Special Class.

[119] Fourth, the relativities between the classifications and wage rates in the 2020 UGL Agreement, differ from the relativities between classifications in the Manufacturing Award. The relativities in the Manufacturing Award as reflected in the classification structure in A3.1, are calculated by reference to the Engineering/Manufacturing Tradesperson – Level 1 C10 classification. The Relativity for the Engineering/Manufacturing Tradesperson – Special Class Level 1 C8, is 110% of the C10 rate. The relativity for the Engineering/Manufacturing Employee Level IV C11, is 92.4% of the C10 classification rate. It is true that relativities in the Award do not currently reflect these percentages, because some wage increases since 1990 have been expressed in dollar amounts, which has compressed the relativities. This is noted in clause A3.2 of the manufacturing Award.

[120] In contrast, the relativities between the Tradespersons rate in the 2020 UGL Agreement place the hourly rate for the classification of Tradesperson Special Class at 102% of the Tradesperson rate and the hourly rate for the Electrician Special Class at 107% of the Tradesperson rate. While I accept that the rates in the 2020 UGL Agreement exceed those in the Manufacturing Award, the fact that the Tradesperson Special Class rate in the 2020 UGL Agreement bears a lower relativity to the Tradespersons rate and to the Electrician Special Class rate, is a further indicator that the construction contended for by AMWU should be accepted.

[121] Consistent with the principles in Berri, it is permissible to consider surrounding circumstances to expose or to resolve an ambiguity. Care must be taken to ensure that evidence of surrounding circumstances is limited to evidence of objective background facts known to both parties, and which inform the subject matter of the Agreement. In the present case, the objective background facts include that the 2020 UGL Agreement applies to work performed by UGL for the Stanwell Corporation. As provided in clause 2.1.1, the 2020 UGL Agreement applies to ongoing work such as maintenance and refurbishment as well as work on shutdowns and/or outages. The work is specialised and as Mr Cambourne’s evidence establishes, work on shutdowns or outages is undertaken by employees who move between Companies performing such work.

[122] In the latter context, it is logical that the 2020 UGL Agreement would recognise that a Tradesperson who has undertaken work on numerous shutdowns for UGL has skills that are of greater value to UGL than those who do not have such experience. It is also logical that the 2020 UGL Agreement would recognise – by designating 5 shutdowns for UGL as a prerequisite for Tradespersons to be classified at the higher Special Class level – that skilled Tradespersons who undertake such work will likely not have continuous service with UGL, because they work for numerous employers performing shutdown work. For employees performing ongoing maintenance work, skill levels are recognised by specifying 12 months of service, for classification at the higher Tradesperson Special Class.

[123] A further surrounding circumstance is that the classification structure in the 2020 UGL Agreement differs from that of the Manufacturing Award in significant respects which essentially involve placing certain classifications at levels relative to other classifications, which do not reflect Award relativities. The relevant classifications cover Electricians, specialised welders and drivers of large cranes. These are all classifications critical to undertaking work of the kind conducted by UGL for the Stanwell Corporation. In the circumstances where employees are undertaking skilled and time critical work, including outages and shutdowns, pre-outage/post-outage work and modifications, maintenance and upgrades on critical assets such as power stations, it is entirely understandable that employees in key classifications, are rewarded by being placed in a classification structure relative to other employees, in a manner which results in wage rates reflecting these matters.

[124] Of particular relevance is the fact that the 2020 UGL Agreement places Electricians at a higher level than other base Tradespersons, and Special Class Electricians at a higher level than other Special Class Tradespersons when compared to the Manufacturing Award. Under that Award, the classification level, minimum training requirements, incidental tasks and relativity to the base trade rate are prescribed for an Engineering/Manufacturing Tradesperson – Special Class Level 1, regardless of whether the relevant employee is within the Electrical/Electronic, Mechanical or Fabrication streams provided for in the Award. In summary, all Special Class Tradespersons are classified at C8 or C7 depending on the percentage of training requirements the employee has achieved towards a Diploma of Engineering or equivalent. Similarly Engineering/Manufacturing Tradespersons Level 1 are at the same level regardless of whether they are employed in the Electrical/Electronic, Mechanical or Fabrication streams provided for in the Award.

[125] It is also the case that the construction advanced by the AMWU is consistent with the practices in the industry adopted by other employers, including the predecessor to UGL. While not determinative, this could explain the inclusion of a reference to the Electrical Engineering Schedule of the Engineering Award – State, which has not existed since at least 2002, in the 2014 UGL Agreement, the 2016 UGL Agreement and the 2020 UGL Agreement.

[126] Finally, I do not accept UGL’s submission that I should place weight on the fact that the AMWU raised an issue about the classification of Tradesperson Special Class during negotiations for the 2020 UGL Agreement and that the Company refused to alter the provisions in relation to this matter in the manner sought by the AMWU. The evidence establishes that the AMWU sought to move the reference to “Minimum of 12 months or 5 UGL outages” to clause 3 Definitions, and the Company refused this request.

[127] The fact that that the AMWU did not dispute or press this matter prior to the Agreement being put to a ballot or that employees were informed of the Company’s position in relation to the provisions for Special Class Tradesperson before voting to approve the Agreement, does not constitute acceptance of that position by the AMWU or employees. At best, the only inference I can draw is that the Company and the AMWU agreed to disagree about the proper construction of the Agreement in relation to the requirements for employees to be classified as Tradesperson Special Class at Level 2 of the 2020 UGL Agreement and reserved their respective positions for another day.

Conclusion

[128] For these reasons, I determine that a Tradesperson (Other than an Electrician) is entitled to be classified and paid the Level 2 rate specified for Tradesperson Special Class under the UGL Stanwell Corporation Enterprise Agreement 2020 by virtue of satisfying either of the following two elements in clause 13.1:

• a minimum of 12 months; or

• 5 UGL outages.

DEPUTY PRESIDENT

Appearances:

Mr T Bunnag for the AMWU.

Mr D Langridge for the Respondent.

Hearing details:

25 June.

2021.

Brisbane (Video-link to Sydney).

Printed by authority of the Commonwealth Government Printer

1 Transcript at PN109.

2 Transcript at PN124 – 126.

3 [2017] FWCFB 3005.

4 [2020] FCAFC 123 at [65].

5 [2017] FWCFB 4487.

6 [2014] NSWCA 184 at [71] – [85].

7 Manufacturers’ Mutual Insurance Ltd v Withers (1988) 5 ANZ Ins Cas 60-853 at 75-343.

8 Kirin-Amgen Inc v Hoechst Marion Roussel Ltd [2004] UKPC 6; [2005] 1 All ER 667 at [64].

9 Project Blue Sky v Australian Broadcasting Authority [1998] HCA 28; 194 CLR 355 at [78].

10 Charter Reinsurance Co Ltd v Fagan [1997] AC 313 at 391 per Lord Hoffman, approved in Campbell v R [2008] NSWCCA 214; 73 NSWLR 272 at [48] (Spiegelman CJ, Weinberg AJA and Simpson J agreeing)

11 Franklins Pty Ltd v Metcash Trading Ltd [2009] NSWCA 407; 76 NSWLR 603 at [17] cited in Mainteck Services Pty Ltd v Stein Heurtey SA (2014) 310 ALR at [71] – [85].

12 Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52; 219 CLR 165 at [40].

13 [2018] FCAFC 131; (2018) 264 FCR 536 at 580 [197]. This approach has been applied by the Federal Court (including numerous Full Courts) subsequently.

¹⁴ Amcor Ltd v CFMEU [2005] HCA 10; (2005) 222 CLR 241 at 270-1 [96]; SDAEA v Woolworths SA Pty Ltd [2011] FCAFC 67 at [18]; Meatpak Pty Ltd v Moran [2005] FCAFC 111; (2005) 145 IR 248 at 250-1 [11]-[12]; Kucks v CSR Limited [1996] IRCA 166; (1996) 66 IR 182 at 184. See also Cooper Brookes (Wollongong) Pty Ltd v FCT [1981] HCA 26; (1981) 147 CLR 297 at 321.

15 Kucks v CSR Limited (1996) 66 IR 182 at 184.

“Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers' Union (AMWU) v UGL Engineering Pty Ltd T/A UGL

[2021] FWC 6025

1 OCTOBER 2021

DECISION