“Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers' Union v Opal Packaging Australia Pty Ltd - [2024] FWC 2962

[2024] FWC 2962

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
v

Opal Packaging Australia Pty Ltd

(C2024/2597)

COMMISSIONER MATHESON

SYDNEY, 25 OCTOBER 2024

Alleged dispute about any matters arising under the enterprise agreement and the NES

The “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU/Applicant) has made an application pursuant to s.739 of the Fair Work Act 2009 (Cth)(Act) seeking that the Fair Work Commission (Commission) deal with a dispute in accordance with a dispute settlement procedure. The respondent to the dispute is Opal Packaging Australia Pty Ltd (Respondent), a paper and packaging company that manufactures corrugated cardboard boxes across industry sectors.

It is not in contest that the Applicant is an employee organisation registered under the Fair Work (Registered Organisations) Act 2009 (Cth) and is an industrial association of employees for the purposes of the Act that, in accordance with its Rules, is entitled to represent the industrial interests of relevant employees of the Respondent.

The dispute relates to the Opal Fibre Packaging National Enterprise Agreement 2022 and, in particular, whether shift allowance should be included in the calculation of redundancy payments.

Background

On 1 May 2020, an asset sale arrangement completed between Opal and an unrelated entity, the Orora Group (Sale). The assets the subject of the Sale included the Orora Group’s national fibre packaging business operating at 10 different sites. As part of the Sale arrangements, Opal offered employment to each of the Orora Group employees covered by the Orora Fibre Packaging National Enterprise Agreement 2019 (2019 Agreement). Under the terms of those offers, Opal agreed to recognise the transferring employees’ service commencement date with Orora as their service commencement date with Opal for the purposes of calculating service-related entitlements. Employees who accepted the offer commenced employment with Opal on 1 May 2020.

This constituted a ‘transfer of business’ between the relevant Orora Group employers and Opal within the meaning of section 311 of the Act and the 2019 Agreement became a transferable instrument as defined by section 312 of the Act. Further, any new non-transferring employees employed by Opal at the sites within the classifications set out in the 2019 Agreement were also covered by the 2019 Agreement, pursuant to an order of the Commission dated 27 April 2020.[1]

Prior to the Sale there had been a history of enterprise agreements that applied to employees at sites falling at various times within the national fibre packaging business operated by the previous owners. The Applicant (or predecessor unions who were part of the amalgamation to form the Applicant) negotiated the terms of these agreements with the relevant employers. These agreements included:

Amcor Fibre Packaging Enterprise Agreement 1992;
Amcor Fibre Packaging Enterprise Agreement 1994;
Amcor Fibre Packaging National Enterprise Agreement 1998;
Amcor Fibre Packaging National Enterprise Agreement 2001;
Amcor Fibre Packaging National Enterprise Agreement 2004;
Amcor Fibre Packaging National Enterprise Agreement 2007 (2007 Agreement);
Amcor Fibre Packaging National Enterprise Agreement 2010 (2010 Agreement);
Amcor Fibre Packaging National Enterprise Agreement 2013;
Orora Fibre Packaging National Enterprise Agreement 2016;
2019 Agreement; and
Opal Fibre Packaging National Enterprise Agreement 2022 (Agreement).

Each enterprise agreement listed above includes a redundancy provision.

The Agreement came into operation from 30 January 2023 and remains in operation. The Applicant is covered by the Agreement.

Clause 3(b) of the Agreement, subject to clause 9, incorporates the provisions of the:

Graphic Arts General Award 2000 as it stood on 1 March 2006 (Incorporated Graphics Award); and
Metal, Engineering and Associated Industries Award 1998 as it stood on 1 March 2006 (Incorporated Metals Award).

In early 2023 the Respondent restructured its operations at two sites (Sites), being a site at Revesby and a site at Scoresby (Restructure). Prior to the Restructure:

the Revesby site operated three shifts over day, afternoon and night; and
the Scoresby site operated night shift and rotating day and afternoon shifts.

The Restructure entailed:

the cessation of the night shift at the Sites;
- reductions in the number of production employees required but not maintenance employees.

Employees employed at the Sites who are covered by the Agreement and who perform shift work, have an entitlement to shift allowances which, in the case of production employees, are set out in the Incorporated Graphics Award.

In calling for expressions of interest in relation to the voluntary redundancy process in the Agreement, employees (Relevant Employees) were provided with an estimate of their entitlement to redundancy pay. In calculating these entitlements, the Respondent excluded shift allowances because it does not consider shift allowances to meet the description of an “all purpose” allowance for the purposes of clause 25(d) of the Agreement. This has resulted in a dispute because the Applicant considers that the shift allowances should be included in the calculation of redundancy pay.

It is not in dispute, and I am satisfied that the parties have complied with the dispute resolution procedure at clause 16 of the Agreement, and therefore, the jurisdiction of the Commission to deal with the dispute is enlivened.

Hearing

A conference before the Commission was held on 14 May 2024 and the matter was unable to be resolved by way of mediation. Clause 16.2(f) of the Agreement provides that if the Commission is unable to resolve the dispute by way of mediation and/or conciliation and where the matter in dispute remains unresolved the matter will be heard by the Commission by way of arbitration. A hearing for this purpose was conducted on 22 July 2024.

The Respondent sought to be represented by a lawyer and permission was granted pursuant to s.596(2)(a) of the Act ahead of the hearing, given that the matter involved complex legal considerations regarding the proper construction of the Agreement and I considered that granting permission for the Respondent to be represented by a lawyer would enable the matter to be dealt with more efficiently, taking into account the complexity of the matter.

Issue in dispute

The parties conferred and sought that the Commission determine whether ‘shift allowances’, as provided by clause 6.2.3 of the Incorporated Graphics Award form part of a ‘Weeks Pay’ as defined in clause 25(d) of the Agreement. This is the question about which the parties are in dispute.

Relevant provisions

Clause 29.1 of the Agreement deals with redundancy payments and states:

29.1 Redundancy Payments

Redundancy payments are based on continuous years of service. The following redundancy payment is made in addition to the other termination benefits:

(a) Redundant employees with more than one year’s service will receive four (4) weeks’ pay for each year of service and pro-rata payment for each completed calendar month.

(b) The following age or service provision will apply on the basis of whichever is the greater benefit to the redundant employee (not all):

(i)Employees who are 50 years of age will receive an additional amount equivalent to one (1) week’s pay for each completed year of service after their 50th birthday. For the purpose of this clause continuous service after the 1st July, 1987 only, will be recognised.

OR

(ii)Employees with twenty (20) years or more service will be paid an additional four (4) weeks’ pay’ (emphasis added).

Clause 25(d) of the Agreement provides:

“Weeks Pay” means an employee’s normal rate of pay for an ordinary week’s work at the time of redundancy or relocation. Normal rate of pay does not include overtime, allowances and such payments unless such allowances are all purpose.

Clause 3 of the Agreement provides:

3. Application of this Agreement

(a) This Agreement applies to all employees of Opal Packaging Australia Pty Ltd trading as Opal Fibre Packaging who are engaged in positions covered by the classification structures described in Appendix E or Appendix F and employed at the sites listed in clause 4.1 of Part 1 of this Agreement.

(b) Subject to sub-clause 9, all the provisions of the Graphic Arts General Award 2000 and Metal, Engineering and Associated Industries Award 1998 as they stood on 1 March 2006 are hereby incorporated into this Agreement.

(c) Where there is any inconsistency between an express provision of this Agreement and a provision in the Awards, the provisions of this Agreement shall prevail to the extent of any inconsistency.

(d) If any provision, or part of a provision, of this Agreement is found to be or becomes unenforceable or contrary to law, it will be severed and this will not in any way affect the enforceability of the remaining terms contained in the Agreement.

As noted above this means the Incorporated Graphics Award and Incorporated Metals Award are incorporated into the Agreement subject to clause 9.

It is not in contention that the Relevant Employees receive a shift allowance for the shift or cycle in which they were engaged to work shiftwork in line with clause 6.2.3 of the Incorporated Graphics Award which provides:

6.2.3 Shift allowances

(a) An employee when on morning shift or when on afternoon shift or when on a night shift
which rotates with or alternates with day work and/or afternoon shift will, in addition to the day work wage by this award prescribed for the work that they perform, be paid 20% of that day work wage.

(b) An employee who:

(i)During a period of engagement on shift, works night shift only; or

(ii)Remains on night shift for a longer period than four consecutive weeks; or

(iii)Works on a night shift which does not rotate or alternate with another shift or with day work so as to give them at least 1/3 of their working time off night shift in each cycle;

will during such engagement period or cycle be paid for all time worked during ordinary working hours on such night shift 30% in addition to the day work wage prescribed by this award for the work they perform.

(c) The shift allowance is part of the employee’s weekly wage for the purpose of calculating the overtime rate payable in accordance with this award.

Applicant’s submissions

The Applicant submitted that the answer to the question of whether ‘shift allowances’, as provided by clause 6.2.3 of the Incorporated Graphics Award form part of a ‘Weeks Pay’ as defined in clause 25(d) of the Agreement is ‘yes’.

Circumstances in which shift allowance is payable based on the express wording of the instruments

The Applicant submitted that the shift allowance in clause 6.2.3 of the Incorporated Graphics Award is paid whenever an employee is working and whenever they are on approved paid absence from work.[2] In support of this proposition the Applicant pointed to:

clause 6.2.3(c) of the Incorporated Graphics Award which provides that the shift allowance is part of the employee’s weekly wage for the purpose of calculating the overtime rate payable;
clause 9.15 of the Agreement which provides that where an employee is a shift worker and would have received a shift allowance as prescribed by the Agreement had they not been on paid personal leave during the relevant period, then the shift allowance will be added to the wage of the employee;
clause 9.21(b) of the Agreement which provides that where an employee is a shift worker and would have received a shift allowance as prescribed by the Agreement had they not been absent for that public holiday, then the shift allowance will be added to the wage of the employee;
clause 7.1.2(b) of the Incorporated Graphics Award which provides that where an employee is a shift worker and would have received a shift allowance as prescribed by clause 6.2.3 had the employee not been on annual leave during the relevant period, then that shift allowance will be added to the rate of wage prescribed by clause 7.1.2(a), being the wages to be paid for the period of leave, instead of the 17.5% loading;
clause 9.3(b) of the Agreement which provides that payment of long services leave will be based on the employee’s ‘actual rate of pay’.[3]

Change to the wording of the ‘Weeks Pay’ definition in the 2010 Agreement

The Applicant submitted that the definition of ‘weeks pay’ has, in enterprise agreements dating back to 1992, for the Revesby site, been consistently based around an ‘employee’s normal rate of pay for an ordinary week’s work’.[4] The Applicant put forward the following examples:

clause 2.3 of Part C of the Amcor Fibre Packaging Enterprise Agreement 1992 and clause 2.4 of Part 3 of the 2007 Agreement which defined ‘weeks pay’ as:

‘an employee’s normal rate of pay for an ordinary weeks’ work at the time of redundancy or relocation. Normal rate of pay does not include overtime, disability allowances and other like payments that are not included for the purpose of calculating overtime and/or Annual Leave’;

clause 2.5 of Part 3 the 2010 Agreement and clause 2(e) of Part 3 of the Orora Fibre Packaging National Enterprise Agreement 2019 which both defined ‘weeks pay’ as

‘an employee’s normal rate of pay for an ordinary weeks’ work at the time of redundancy or relocation. Normal rate of pay does not include overtime, disability allowances and other payments unless such allowances are all purpose’.[5]

The Applicant submitted that prior to the introduction of the 2010 Agreement, normal pay excluded ‘overtime, disability allowances and other like payments that are not included for the purposes of including overtime and/or annual leave’.[6] The Applicant submitted that in accordance with this definition, shift allowance would be included in the calculation of ‘weeks’ pay’ because:

as the Incorporated Graphics Award mandates that shift allowance is part of the weekly wage for the purposes of overtime, it is therefore not excluded from the definition;
as the clause uses the wording ‘overtime and/or annual leave’, shift allowance only needs to be included in the calculation of one of those entitlements for it to be included in the definition of ‘weeks’ pay’; and
as workers who are paid a shift allowance are also paid that allowance while on annual leave, the shift allowance satisfies both conditions of the definition.[7] In this regard, the Applicant referred to clause 7.1.2(b) of the Incorporated Graphics Award which provides that where ‘an employee is a shift worker and would have received a shift allowance as prescribed by clause 6.2.3 had the employee not been on annual leave during the relevant period, then that shift allowance will be added to the rate of wage prescribed by 7.1.2(a) instead of the 17.5% loading.

The definition of ‘Weeks’ Pay’ introduced in the 2010 Agreement has been continued for all subsequent agreements up to and including the Agreement.[8] The Applicant submitted that this change is not one of substance but was merely one of form.[9] In this regard the Applicant sought to rely on the evidence of Margaret Hogan who, although not involved in the negotiation of the 2010 Agreement, reviewed files that had been kept by her colleague, Ms Ford, for previous negotiations.[10] Ms Hogan said one of the documents she located in this search was a PowerPoint presentation which contains slides explaining the changes to the proposed 2010 Agreement (Powerpoint Presentation).[11] Ms Hogan said she did not know who prepared the Powerpoint Presentation and does not personally know how accurate the contents are but as it used both the Applicant’s and Amcor’s logo she believed it represents the views of both parties at the time.[12] During the hearing the Applicant also pointed to page 4 of the Powerpoint Presentation which states ‘This has been agreed and endorsed by our Company, National Union & your Site delegates’ and submitted that the Powerpoint Presentation indicates what was agreed.

The Applicant pointed out that despite the presentation containing a slide that dealt with redundancy provisions there was no mention of changes to the definition of ‘Weeks’ Pay’ and that given a significant proportion of the employees would have been shift workers, the exclusion of shift allowance from the calculation of redundancy pay would have been highlighted as part of the changes and this was particularly the case where there appears to have been an increase in the redundancy pay for workers at a particular site being Smithfiled.[13]

During the hearing the Applicant noted that the redundancy clause was not the only clause that was varied in the 2010 Agreement, as compared to the 2007 Agreement, and a range of changes were made as explained in the Powerpoint Presentation. The Applicant submitted that the Powerpoint Presentation appears to be a full explanation of the changes to the 2010 Agreement in the context of a workforce that was overwhelming covered by ‘Graphic Arts’ awards.

The Applicant submitted that the Commission should give the Powerpoint Presentation weight as to what the parties were agreeing to in bargaining.[14]

Meaning of ‘all purpose’

Neither the Agreement nor the 2010 Agreement define ‘all purpose’ or expressly state that any payment is ‘all purpose’.[15] The Incorporated Graphics Award does not define ‘all purpose’.[16] While the phrase ‘all purpose’ is not defined in the Incorporated Metals Award, certain allowances are required to be paid ‘for all purposes of the Award’.[17]

In the four yearly review of modern awards, the Commission introduced the following definition into modern awards that contained an ‘all purpose’ allowance:

‘all purposes means the payment of will be included in the rate of pay of an employee who is entitled to the allowance, when calculating any penalties or loadings or payment while they are on annual leave’.[18]

The Applicant submitted that although the definition was determined after the negotiation of the 2010 Agreement, it is a useful tool for determining whether shift allowances are captured by the Agreement clause, noting that the Commission built on historical practice in determining the definition.[19] The Applicant observed that the definition of ‘Weeks’ Pay’ in the agreements did not change after 2012 even though three enterprise agreements were negotiated after the definition of ‘all purposes’ was inserted into modern awards.[20]

The Applicant submitted that shift allowance for production workers meets the definition because:

shift allowance is considered part of the rate of pay for the purposes of overtime;
the Incorporated Graphics Award also requires that the shift allowance be paid to workers who are on annual leave.[21]

Respondent’s submissions

The Respondent submitted that the answer to the question of whether “shift allowances”, as provided by clause 6.2.3 of the Incorporated Graphics Award form part of a “Weeks’ Pay” as defined in clause 25(d) of the Agreement is ‘no’ and that consideration of this question involves two steps of analysis:

First, interpretation: ascertaining the meaning of ‘all purpose’ in clause 25(d) of the Agreement. There is no definition of what is an ‘all purpose allowance’ nor is there any provision deeming the shift allowance to be an ‘all purpose’ allowance. Thus, the proper construction of this expression must be determined to expose the necessary characteristics of an ‘all purpose’ allowance;
Second, characterisation: determining whether the shift allowance has those characteristics of an ‘all purpose’ allowance.

Proper approach to construction of ‘all purpose’

The Respondent submitted that the applicable principles in determining the proper construction of the disputed provisions are as set out in AMWU v Berri Pty Ltd [22]and, by way of summary, submitted:

the task begins with the language of the disputed provision, understood in its context;
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;
if the agreement has a plain meaning, evidence of the surrounding circumstances will not be admitted to contradict the plan language of the agreement;
admissible evidence of surrounding circumstances is limited to evidence of objective background facts known to the parties.[23]

Text of the instrument

The Respondent submitted that neither the Agreement nor the Incorporated Graphics Award define or deem the shift allowance to be an ‘all purpose’ allowance.[24]

The Respondent did however note that clause 18.1(b) of the Agreement contains a definition of ‘normal pay’ for union delegates which expressly includes ‘any shift allowances’ and submitted that it would have been easy for the drafters to have adopted the same approach in clause 25(d) to include shift allowances in ‘weeks’ pay’/‘normal rate of pay’ but they did not and instead excluded ‘allowances’ unless they were ‘all purpose’.[25]

In relation to the text of clause 25(d) the Respondent submitted, by way of summary:

·   that the words ‘all purpose’ mean what they say;
·   the words ‘all purpose’ in clause 25(d) of the Agreement are adjectival, describing the nature or character of the allowance;
·   the word ‘purpose’ connotes a relevant purpose of the Agreement which is to set enforceable terms and conditions pertaining to the employment of the employees covered by it;
·   an allowance serves a purpose of the Agreement where it applies to an entitlement in the Agreement, such as the base rate of pay, an overtime or penalty rate, an entitlement to payment of annual leave and so on;
·   the reference to the word ‘all’ means the application of the allowance to the wages and other entitlements in the Agreement must be complete in that it must be applied to all of those purposes;
·   if an allowance applies for some purposes of the Agreement but not others, it is not an allowance that is ‘all purpose’.[26]

Industrial meaning of an ‘all purpose’ allowance

The Respondent submitted that the concept of an ‘all purpose allowance’ has a long-standing and well-understood industrial meaning’.[27] The Respondent submitted, by way of summary:

from at least the 1960s awards made provision for certain employees to be paid additional ‘margins’ or allowances on top of their base wage that were not contingent on some particular event being triggered but were paid based on the inherent requirements of the job being performed or level of responsibility;[28]
from around 1976 such allowances began to be expressed as being for ‘all purposes’, short-hand for ‘all purposes of [the] award’;[29]
during the four yearly review of modern awards the Full Bench observed that the awards had defined certain allowances as applying ‘for all purposes’ such as industry allowances, and that the historical treatment of these payments has been to include them as part of an employee’s wages for the purpose of calculating any penalties and loadings;[30]
the Full Bench decided to include into all affected awards a definition of ‘ordinary hourly rate’ to the hourly classification rate plus any ‘all purpose’ allowance applicable, reflecting the established practice that an all purpose allowance is applied to penalties and loadings on a compounding basis;[31]
the Full Bench decided to insert into affected awards a definition of ‘all purposes’ to mean ‘the payment will be included in the rate of pay of an employee who is entitled to the allowance, when calculating any penalties or loadings or payment while they are on annual leave’.[32] In this regard the Respondent submitted that a distinction was drawn between an ‘all purpose’ allowance and shift penalties, the reference to ‘any penalties’ appears to have been intended to include shift penalties and that being the case, a shift penalty could not itself be an all purpose allowance.[33]

The Respondent submitted that the following observation of Deputy President Lake in AMWU and CEPU v Joy Global Australia Pty Ltd[34] is consistent with the long established industrial meaning of an ‘all purpose’ allowance:

‘…I have adopted the common industrial understanding of an ‘all-purpose allowance’ which I articulate for ensuring clarity. An allowance that is regarded as an all purpose allowance is unlike other allowances as it applies for all purposes of the Award. The result of this is that an allowance that is regarded as an all-purpose allowance will form part of the employee’s base rate for the purposes of calculation for overtime and weekend penalties, are calculated on the compounded rate or pay.’[35]

Meaning of ‘all purpose’ allowance

The Respondent ultimately submitted that:

the words ‘all purpose’ means that an allowance that is ‘all purpose’ is paid for all purposes;
an ‘all purpose’ allowance is included in the calculation of wages and payments of leave, holiday pay, notice and severance pay;
- an ‘all purpose’ allowance is tethered to the base classification rate of pay, applying to overtime, penalties, allowances and other loadings to produce a compounding effect (as distinct from a cumulative effect); and
- this construction reflects the well-established industrial meaning of ‘all purpose allowance’ which is payable for the employment or role (e.g. industry allowance, trade allowance or leading hand allowance) and which is not contingent upon the performance of work during certain hours or in certain conditions.[36]

The Respondent submitted that the extrinsic evidence can be given little or no weight and cannot displace the clear words set and maintained in successive agreements since 2010.[37]

Shift allowance characteristics

The Respondent submitted that there are several reasons why the shift allowance in clause 6.2.3 of the Incorporated Graphics Award lacks the characteristics of an ‘all purpose’ allowance, including, by way of summary:

the shift allowance is not described or deemed in any sense in the Agreement or Incorporated Graphics Award as an ‘all purpose’ allowance;[38]

the shift allowance is not an allowance paid for the role or responsibility in which the employee is employed but, rather, is paid for each period or cycle in which the employee is engaged in working shifts that meet one of the descriptions attracting a particular shift allowance and this is consistent with its general nature in that it compensates employees for working unsociable hours;[39]

the shift allowance is not applied for ‘all purposes’, noting that:

clause 7.1.2(b) of the Incorporated Graphics Award substitutes the shift allowance for the 17.5% annual leave loading for periods of annual leave, rather than adding the shift allowance to the minimum rates of pay prior to the imposition of the 17.5% loading;[40]
a casual employee performing work on a public holiday is entitled to ‘the same rates as a weekly employee, with the addition of 25%’ pursuant to clause 7.5.8(b) of the Incorporated Graphics Award and this loading is ‘in substitution for and not cumulative on the shift allowances prescribed in 6.2.3;[41]
other entitlements in the Agreement, such as compassionate leave (clause 9.7), parental leave (clause 9.11) and family violence leave (clause 9.12) provide more beneficial entitlements than the NES but do not provide for the leave payment to include the shift allowance;[42]

there are other indicators in the Incorporated Graphics Award that the shift allowance was not to be applied for all purposes of that award including:

clause 3.1.2 of Appendix C titled ‘Workers’ Compensation Make-Up Pay’ and which states that ‘shift…allowances…are not usually payable to the employee when the employee is not working’;
clause 7.4.2 of the Appended Order dated 27 May 2024 in respect of the Victorian Common rule declaration which includes a definition of ‘ordinary time earnings’ that distinguishes between ‘shift loading’ and ‘allowances such as VDT allowances, leading hand allowances’ which are referred to as ‘all purpose’ allowances;
clauses 9.3, 9.15 and 9.21 which explicitly identify that the shift allowance is to be payable. In contrast to the Applicant’s submissions the Respondent submitted that the shift allowance requires explicit identification to ensure that the payment of the allowances is included when the unsociable hours are not worked and submitted that this supports its construction that the shift allowance is not an allowance that is treated as forming part of an employee’s wage.[43]

The Respondent submitted that the shift allowance (in clause 6.2.3 of the Incorporated Graphics Award) lacks the above characteristics of an ‘all purpose allowance’ and is not described as or deemed to be an ‘all purpose’ allowance in that it:

is not tethered to the base classification rate of pay in any sense;
it is not applied to all overtime and penalty rates in a compounding sense;
when it is payable for leave or holidays the Agreement ‘spells this out’ in the clause conferring the applicable entitlement to payment for that leave or holiday.[44]

AMWU reliance on the Powerpoint Presentation

The Respondent submitted that the Powerpoint Presentation cannot be relied on because:[45]

even if it could be regarded as a business record of the Applicant, there is no evidence as to its creation, use or context and there is no evidence of surrounding circumstances to establish any mutual understanding capable of informing the objective construction of the ‘weeks’ pay’ definition in the 2010 Agreement;[46]

the significance that the Applicant attaches to the non-mention of any change in the entitlement depends on two propositions that have not been established, being:

that the 2007 Agreement conferred an entitlement to include the shift allowance in the calculation of ‘weeks pay’ for redundancy pay calculations. The Respondent submitted this is far from clear noting that:

i.Part A, Part 3, clause 2 provides that the clause is to be read in conjunction with clause 4.2.5 of Part B;
ii.Part B contains provisions of the Incorporated Graphics Award and clause 4.2.5(a)(v) defines ‘weeks’ pay’ for redundancy pay and expressly excludes shift allowances;
iii.the interaction between the two definitions of ‘weeks’ pay’, which are to be read in conjunction with each other, is not addressed in the 2007 Agreement;

it may reasonably be presumed that the Applicant and Amcor had a mutual understanding that the entitlement to ‘weeks pay’ was only that prescribed in Part A, Part 3, clause 2.4, and that this could not be read in conjunction with the definition of ‘weeks pay’ in clause 4.2.5 of Part B;

the following factual assumptions are not grounded in evidence:

the document was agreed between the Applicant and Amcor;
the document was in final form;
the document was accurate and comprehensive;
the document was used in explaining the 2010 Agreement to employees;
any explanation to employees was confined to the matters in the document;
all employees to be covered by the 2010 Agreement (or at least a substantial majority of them) attended the presentations;

the notion of objective mutual intention is not readily transposed to an enterprise agreement;

the Federal Court has warned of the need to exercise caution is using ‘common understanding’ as an aid to the construction of an enterprise agreement with Wheelahan J observing:[47]

‘great care ... must be taken in drawing upon a suggested common understanding as an aid to construction ... The reasons for caution before regard may be had to a suggested common understanding commence from the premise that it is the instrument itself that is to be construed, and any recourse to industrial practices said to amount to a common understanding are no more than part of the context in which the text of the instrument is to be construed. Industrial practices do not take the place of the terms of the instrument. There is also the need to maintain coherence with other principles, including that: (1) usually, recourse to extrinsic matters cannot displace the clear meaning of text; (2) the subjective understanding of individuals is rarely relevant to objective meaning; (3) this is also the case in relation to collective agreements where surrounding circumstances might have to rise to the level of being notorious or known by those intended to be bound by the instrument ... and (4) parties cannot by words or conduct contract out of, or waive the terms of an enterprise agreement, which has statutory force…’.

the ‘surrounding circumstances evidence’ relates to the 2010 Agreement which is far removed from the Agreement and there is no evidence of any surrounding circumstances indicating a common understanding of the Applicant, Respondent and employees to be covered by the Agreement that the words ‘all purpose’ in the definition of ‘weeks pay’ would have a different meaning informed by the 2007 Agreement;

in Australian Meat Industry Employees Union v Woolworths Limited T/A Brismeat[48]the Full Bench considered the fact that a rail allowance was not expressly designated to be an ‘all purpose’ allowance and this was significant in the Full Bench reaching the conclusion that there was no entitlement to the rail allowance on paid leave. The Respondent noted that it had been so designated in an earlier agreement but the wording had been changed and this had been the case for successive agreements over several years.

Practical matter

As a practical matter, in its initial response to the application, the Respondent submitted that it would be practically impossible to properly apply the shift allowance when calculating redundancy pay on the basis of an ‘ordinary weeks’ work’ in circumstances where employees are not engaged on a fixed roster.[49] The Respondent submitted that some of the affected employees worked a rotating roster such that they were only paid shift allowance every second week and this tends towards a construction that the shift allowance is not an ‘all purpose’ allowance and therefore not applicable to the redundancy pay clause.[50]

During the hearing the Respondent also submitted that it was inherently unlikely that it was intended that production employees would be treated significantly more favourably than maintenance employees in relation to redundancy pay, that there would need to be a clear indication of that intention and there isn’t one.

Applicant’s submissions in reply

The Applicant filed submissions in reply and by way of summary:

submitted that the Respondent’s summary of the history of and industrial meaning of the term “for all purposes” provided a useful general understanding of what an “all purpose allowance” entails however primarily dealt with all purpose allowances pertaining solely to the job (such as an “industry allowance”) and neglected the ability of some allowances to be treated as all purpose allowances in some industries but not necessarily others;[51]
acknowledged that, across most industries, shift allowances are usually paid solely when a shift worker is performing work during set hours of the day and are not generally included in the calculation of penalties or overtime;[52]
submitted that the Incorporated Graphics Award specifically and deliberately breaks the nexus between the entitlement to a shift allowance for performing work at a particular time noting that clause 6.2.3(c) of the Incorporated Graphics Award explicitly requires that the shift allowance is part of the employee’s weekly wage for the purposes of calculating the overtime rate payable;[53]
submitted that just because the entitlement is different from entitlements in other instruments paid for all purposes does not mean that it is not;[54]
submitted that the treatment of the shift allowance in clauses such as 9.15 and 9.21 of the Agreement support an interpretation that the parties meant for the shift allowance to be applied more broadly than for payment when the employee was at work;[55]
submitted that the parties did not choose to say “shift allowances are all purpose allowances” does not mean that they are not;[56]
submitted that the Respondent’s argument that compassionate leave, parental leave and domestic and family violence leave are “all better than the NES but do not provide for the leave payment to include the shift allowance” is not conclusive as:

the NES does not include an entitlement to paid parental leave and there is nothing to define what the rate of pay is when “paid maternity leave” is referred to in the Agreement,[57] however the leave entitlement for the partner of the primary carer is based on their carer’s leave entitlement[58] which, as a part of personal leave, includes shift loading;[59]
domestic and family violence leave is paid at an employee’s full rate of pay[60] which includes allowances and loadings that would otherwise have been paid;[61]
compassionate leave is calculated at an employee’s base rate of pay[62] except if the Agreement contains a definition of ‘base rate’ for the purposes of the NES and there is no such definition in the Agreement or Incorporated Graphics Award;[63]

the Commission should not give undue weight to an interpretation of how the Australian Industrial Relations Commission interpreted and drafted the Incorporated Graphics Award but how the shift allowance is treated within the Agreement.[64]

As noted above, the Respondent noted that a casual employee performing work on a public holiday is entitled to ‘the same rates as a weekly employee, with the addition of 25%’ pursuant to clause 7.5.8(b) of the Incorporated Graphics Award and this loading is ‘in substitution for and not cumulative on the shift allowances prescribed in 6.2.3’.[65] During the hearing the Applicant pointed to clause 10 of the 2010 Agreement and submitted that casual employees were not meant to be employed for longer than 13 weeks in the Agreement and were only intended as supplementary labour.

In response to the Respondent’s submissions regarding differential treatment between production and maintenance employees, during the hearing the Applicant submitted that shift allowance was treated differently for these cohorts and there was no reason why that differential treatment couldn’t be carried over to definition of ‘Weeks Pay’.

Consideration

The principles regarding the interpretation of enterprise agreements are well settled. In AMWU v Berri Pty Ltd[66], a Full Bench of the Commission summarised those principles 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 aid the interpretation of the agreement.

11. The admissibility of evidence of the surrounding circumstances is limited to evidence tending to establish objective background facts which were known to both parties which inform and the subject matter of the agreement. Evidence of such objective facts is to be distinguished from evidence of the subjective intentions of the parties, such as statements and actions of the parties which are reflective of their actual intentions and expectations.

12. Evidence of objective background facts will include:

(i)evidence of prior negotiations to the extent that the negotiations tend to establish objective background facts known to all parties and the subject matter of the agreement;

(ii)notorious facts of which knowledge is to be presumed; and

(iii)evidence of matters in common contemplation and constituting a common assumption.

13. The diversity of interests involved in the negotiation and making of enterprise agreements (see point 4 above) warrants the adoption of a cautious approach to the admission and reliance upon the evidence of prior negotiations and the positions advanced during the negotiation process. Evidence as to what the employees covered by the agreement were told (either during the course of the negotiations or pursuant to s.180(5) of the FW Act) may be of more assistance than evidence of the bargaining positions taken by the employer or a bargaining representative during the negotiation of the agreement.

14. Admissible extrinsic material may be used to aid the interpretation of a provision in an enterprise agreement with a disputed meaning, but it cannot be used to disregard or rewrite the provision in order to give effect to an externally derived conception of what the parties’ intention or purpose was.

15. In the industrial context it has been accepted that, in some circumstances, subsequent conduct may be relevant to the interpretation of an industrial instrument. But such post-agreement conduct must be such as to show that there has been a meeting of minds, a consensus. Post-agreement conduct which amounts to little more than the absence of a complaint or common inadvertence is insufficient to establish a common understanding.”[67]

In James Cook University v Ridd,[68] the Full Court of the Federal Court of Australia summarised the principles as follows (references omitted):

“(i) The starting point is the ordinary meaning of the words, read as a whole and in context.

(ii) A purposive approach is preferred to a narrow or pedantic approach — the framers of such documents were likely to be of a “practical bent of mind”. The interpretation “turns upon the language of the particular agreement, understood in the light of its industrial context and purpose”.

(iii) Context is not confined to the words of the instrument surrounding the expression to be construed. It may extend to “... the entire document of which it is a part, or to other documents with which there is an association”.

(iv) Context may include “... ideas that gave rise to an expression in a document from which it has been taken”.

(v) 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...”.

(vi) A generous construction is preferred over a strictly literal approach, but “Awards, whether made by consent or otherwise, should make sense according to the basic conventions of the English language. They bind the parties on pain of pecuniary penalties”.

(vii) 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.”[69]

The Full Court of the Federal Court in WorkPac Pty Ltd v Skene[70] articulated the approach to be adopted 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. The interpretation “… turns on the language of the particular agreement, understood in the light of its industrial context and purpose …”. The words are not to be interpreted in a vacuum divorced from industrial realities; rather, industrial agreements are made for various industries in the light of the customs and working conditions of each, and they are frequently couched in terms intelligible to the parties but without the careful attention to form and draftsmanship that one expects to find in an Act of Parliament. To similar effect, it has been said that the framers of such documents were likely of a “practical bent of mind” and may well have been more concerned with expressing an intention in a way likely to be understood in the relevant industry rather than with legal niceties and jargon, so that a purposive approach to interpretation is appropriate and a narrow or pedantic approach is misplaced.”

As noted in the decisions referred to above, the starting point in considering the proper interpretation of the Agreement is to consider the ordinary meaning of the words, read as a whole and in context.

It is clear from clause 29.1 that an employee who is redundant will be entitled to a certain number of ‘weeks’ pay’, depending on their length of service.

Clause 25(d) of the Agreement defines ‘Weeks Pay’. While the term ‘weeks’ pay’ is not capitalised in clause 29.1, this is a matter of form over substance, and it is apparent that the term ‘Weeks Pay’ and ‘weeks’ pay’ where used in clauses 25(d) and 29.1 of the Agreement are intended as a reference to the same thing.

The first sentence within clause 25(d) provides:

‘“Weeks Pay” means an employee’s normal rate of pay for an ordinary week’s work at the time of redundancy or relocation.’

There are three limbs relevant to understanding what a ‘Weeks Pay’ refers to in the above sentence:

a ‘Weeks Pay’ is the employee’s ‘normal rate of pay’. This is not defined in the Agreement or Graphics Award. ‘Normal’, in the adjective sense, is defined in the Macquarie dictionary as:

‘1. Conforming to the standard or the common type; regular, usual, natural, or not abnormal: the normal procedure.

serving to fix a standard.’

Taking its ordinary meaning, the employee’s ‘normal rate of pay’ is to be understood as the rate an employee would usually or ‘normally’ be paid;

that ‘normal rate of pay’ must be in respect of an ‘ordinary week’s work’, i.e. their usual working hours for the week and not in respect of a working week that is unusual or out of the ordinary; and, specifically

it must be in respect of an ‘ordinary week’s work’ at the ‘time of redundancy or relocation’.

However the second sentence of clause 25(d) provides the following further qualifier in that the:

‘Normal rate of pay does not include overtime, allowances and other such payments unless such allowances are all purpose.’

It therefore follows that the shift allowance in clause 6.2.3 of the Incorporated Graphics Award does not form part of a ‘Weeks Pay’ if it is not an ‘all purpose’ allowance.

The shift allowance in clause 6.2.3 of the Incorporated Graphics Award is not expressly described as an ‘all purpose’ allowance in either the Incorporated Graphics Award or the Agreement. The Agreement does not define ‘all purpose’ and neither do the Incorporated Graphics Award and Incorporated Metals Award, although the Incorporated Metals Award does specifically set out a number of allowances which it states ‘shall apply for all purposes of the award’.[71]

The term ‘all purpose’ is only used in three places in the Agreement. As noted above, it appears in the definition of ‘Weeks Pay’ in clause 25, which is at the centre of this dispute. It also appears in clauses G.2(f) and (g) of Appendix G dealing with the definition of Ordinary Time Earnings for the purposes of superannuation. In G.2(f) and (g) of Appendix G ‘shift loading’ is expressly referred to as being included in the calculation of Ordinary Time Earnings. The use of the term ‘all purpose’ in this context does not shed light on the question as to whether ‘shift allowances’, as provided by clause 6.2.3 of the Incorporated Graphics Award form part of a ‘Weeks Pay’ as defined in clause 25(d) of the Agreement.

The meaning of the term ‘all’ is defined in the Macquarie Dictionary in the adjective sense as:

‘1.the whole of (with reference to quantity, extent, duration, duration amount or degree); all Australia; all the year round.
2. the whole number of (with reference to individuals or particulars, taken collectively): all women.
3. a large number of; many: he collects all kinds of things; all sorts of people were there.
4. any; any whatever: beyond all doubt.
5. the greatest possible: with all speed’.

Read in the context of an enterprise agreement, the reference to ‘purpose’ is a reference to the Agreement’s purpose. It follows that when the terms ‘all’ and ‘purpose’ are read together the ordinary meaning of term ‘all purpose’ is a reference to the whole number of purposes, or every purpose of, the Agreement. However, such a literal construction is awkward in the context of an instrument that sets out provisions directed at a range of purposes, some prescribing monetary entitlements and some dealing with other matters. In this regard a purposive approach is preferred to a narrow or pedantic approach and words are not to be interpreted in a vacuum divorced from industrial realities. In this regard the term ‘all purpose’ has an industrial understanding and it is appropriate to consider the term in that context.

As noted by both parties, during the 4 yearly review of modern awards[72] the Full Bench considered what form of definition of ‘all purpose’ should be included in the modern awards. The Full Bench made the following observation:

‘[40] Allowances and, less commonly, casual loadings, have been defined as applying ‘for all purposes’ in awards for many years. The payments were so identified during the Structural Efficiency process, following the disaggregation of allowances such as industry allowances that compensated for the disabilities associated with working in a particular industry, from properly fixed minimum rates of pay. These payments have historically been treated as part of an employee’s wages for the purpose of calculating penalties and loadings’.[73]

The Full Bench had inserted the following definition of ‘all purpose’ in the exposure drafts to the awards:

‘all purposes means the payment will be included in the rate of pay of an employee who is entitled to the allowance, when calculating any penalties or loadings or payment while they are on leave’.

The Full Bench decided to retain the wording it had included in the exposure draft but went on to say that:

‘… Any issues as to whether a particular payment is payable for all purposes, and, in particular, whether an allowance should be added to a minimum rate before calculating a penalty or loading, will be dealt with on an award-by-award basis. Ultimately the resolution of these issues will turn on the construction of the relevant award and the context in which it was made.’[74]

The four yearly review process did helpfully involve both:

identifying which allowances were to be ‘all purpose’ allowances in the modern awards; and
to the extent that an allowance was expressed to be payable for ‘all purposes’, including an express definition to clarify what that term meant.[75]

However the outcome of the four yearly review of modern awards is to be distinguished from the Agreement in that the Agreement does not:

specifically identify which allowances are to be paid for ‘all purposes’; and
does not define ‘all purpose’.

Importantly, the Full Bench’s approach in the four yearly review of modern awards also suggests that there was no uniform industrial understanding as to what allowances should be treated as ‘all purpose’ across all awards and the answer was to turn on the particular award’s construction and context in which it was made.

I accept that in an industrial sense if an allowance is an ‘all purpose’ it is generally required to be added to the rate of pay for the purposes of calculating any penalties or loadings in line with the historical practice identified by the Full Bench in the four yearly review.

I also accept that the shift allowance is expressly stated in the Agreement to be included for many purposes of the Agreement including:

for the purposes of calculating payment for personal leave, with clause 9.15 stating:

‘Where an employee is a shift worker and would have received a shift allowance as prescribed by this Agreement had the employee not been on paid Personal Leave during the relevant period then that shift allowance will be added to the wage of the employee’;

for the purposes of calculating payment for an absence on public holidays, and substituted public holidays under the flexibility provision, with clauses 9.21(b)(i) and 19(g)(i) stating:

‘Where an employee is a shift worker and would have received a shift allowance as prescribed by this Agreement had the employee not been absent for that public holiday then that shift allowance will be added to the wage of the employee’;

for the purposes of the definition of ‘Normal Pay’ in clause 18 dealing with union delegates, with clause 18.1(b) stating:

‘Normal Pay: includes any shift allowances, overtime (which includes hours outside the delegates normal shift and any hours that the delegate would have normally worked had they worked) and any penalties that the delegate would have normally received under this Agreement had they worked.’

Further as noted by the Applicant, clause 9.3(b) of the Agreement provides that payment of long services leave will be based on the employee’s ‘actual rate of pay’.[76]

The Applicant has also pointed to circumstances where the shift allowance is included in the rate of pay due to the incorporation of the Incorporated Graphics Award, including:

clause 6.2.3(c) of the Incorporated Graphics Award which provides that the shift allowance is part of the employee’s weekly wage for the purpose of calculating the overtime rate payable; and

clause 7.1.2(b) of the Incorporated Graphics Award which provides that where an employee is a shift worker and would have received a shift allowance as prescribed by clause 6.2.3 had the employee not been on annual leave during the relevant period, then that shift allowance will be added to the rate of wage prescribed by clause 7.1.2(a), being the wages to be paid for the period of leave, instead of the 17.5% loading.

However as noted by the Respondent, there are a number of other purposes where the shift allowance is not expressly identified as being payable, including:

compassionate leave, with clause 9.7(a) of the Agreement stating:

‘An employee’s entitlement to Compassionate Leave will be in accordance with the NES save for the number of days leave upon the death of a member of the employee’s immediate family which will be five.’

In this regard, the National Employment Standards (NES) provides that compassionate leave is to be paid at the employee’s ‘base rate of pay’ for the employee’s ordinary hours of work in the period.[77] ‘Base rate of pay’ (except where employees are pieceworkers and ss.16(2) or (3) apply) is defined in s.16(1) of the Act as the rate of pay payable to the employee for their ordinary hours of work, but noting including:

a.incentive-based payments and bonuses;
b.loadings;
c.monetary allowances;
d.overtime or penalty rates;
e.any other separately identifiable amounts;

parental leave for primary carers, with clause 9.11(i) of the Agreement stating that primary carer employees ‘will be entitled to paid maternity leave of four and a half weeks’ without stipulating the rate at which this will be paid;

family and domestic violence leave, with clause 9.12(a) of the Agreement stating that:

‘Employees will be entitled to family and domestic violence leave in accordance with sections 106A to 106C of the Act, except that the applicable entitlement will be a maximum of 10 days paid leave in a 12 month period’.

In this regard, although s.106BA of the Act provides for payment at an employee’s ‘full rate of pay’, defined in clause 18(1) of the Act to include loading and monetary allowances, there is no stipulation of the rate at which family and domestic violence leave will be paid in the Agreement.

Further the Respondent has pointed to the Incorporated Graphics Award and noted:

clause 7.1.2(b) of the Incorporated Graphics Award substitutes the shift allowance for the 17.5% annual leave loading for periods of annual leave, rather than adding the shift allowance to the minimum rates of pay prior to the imposition of the 17.5% loading;[78]

a casual employee performing work on a public holiday is entitled to ‘the same rates as a weekly employee, with the addition of 25%’ pursuant to clause 7.5.8(b) of the Incorporated Graphics Award and this loading is ‘in substitution for and not cumulative on the shift allowances prescribed in 6.2.3’.[79]

As the Court said in James Cook University v Ridd,[80] context is not confined to the words of the instrument surrounding the expression to be construed. It may extend to “... the entire document of which it is a part, or to other documents with which there is an association” and may include “... ideas that gave rise to an expression in a document from which it has been taken”.

In this regard, the Incorporated Graphics Awards from which the shift allowance is derived contains a definition of ‘Weeks’ pay’ in clause 4.2.5(a)(v). This term is used for the purposes of calculating severance pay in clause 4.2.5(d) of the Incorporated Graphics Award and expressly excludes payment of shift allowances as well as overtime, penalty rates, disability allowances, special rates, fares and travelling time allowances, bonuses and any other ancillary payments of a like nature. It does not make any reference to the term ‘all purpose’ and this is unsurprising given there is no definition of ‘all purpose’ in the Incorporated Graphics Award and no allowances are specifically given that express designation in that pre-modern award.

In my view, the notion of ‘all purpose’ in the definition of ‘Weeks Pay’ in the Agreement is more likely to have been a consequence of maintenance employees also being covered by the Agreement and the inclusion of the Incorporated Metals Award. The definition of ‘week’s pay’ in the Incorporated Metals Award also sets out a number of exclusions from the meaning of that term and does not make reference to ‘all purpose’ allowances. However, as noted above, the Incorporated Metals Award does expressly stipulate that certain allowances shall apply for ‘all purposes’ of that award including, for example, leading hand allowance.[81] In other words, the Incorporated Metals Award actually identifies what allowances are ‘all purpose’ such that the absence of a definition of ‘all purpose’ in the Agreement is not a concern for employees entitled to payment of all purpose allowances by reason of the Incorporated Metals Award.

The Respondent sought to rely on Australian Meat Industry Employees Union v Brismeat Queensland (Woolworths Limited) T/A Brismeat[82] (AMIEU v Brismeat) and submitted the Full Bench considered the fact that a rail allowance was not expressly designated to be an ‘all purpose’ allowance and this was significant in the Full Bench reaching the conclusion that there was no entitlement to the rail allowance on paid leave. AMIEU v Brismeat[83] concerned an enterprise agreement which provided that employees were to be paid annual leave based on their ‘ordinary rates of pay’ which was not a defined term. At first instance the then Deputy President considered the text of the agreement, context of the agreement and extrinsic material and concluded that the ‘rail allowance’ in the agreement was not payable when an employee was on annual or other forms of paid leave.[84] The Full Bench in AMIEU v Brismeat[85] considered a lengthy extract in which the then Deputy President considered the text of the Agreement and:

·   observed that there was no definition of ‘ordinary rates of pay’ for the purposes of clause 5.1.8 of the agreement;
·   observed that the manner in which the allowance was expressed was not distinguishable from certain other allowances, none of which were specifically designated as all-purpose allowances;
·   found there was no basis, on the plain words of the clauses which provided for those allowances for the rail allowance to be paid on a different basis;
·   found that if the allowance was intended to be an all-purpose allowance, there would be no reason to express it as a daily amount which varied on the basis of ordinary hours worked;
·   found there was a further indication that the allowance was payable while the work to which it related was being performed with a provision stating that the rail allowance was paid for duties performed on the rail;
·   observed that the terms in which the allowance was expressed could be contrasted with a term that made it clear that employees on morning or afternoon shift received a shift allowance which became the ordinary rate for the purposes of public holidays, personal leave, compassionate leave and long service leave;
·   observed that shift allowances were not included in the ordinary rate for annual leave given shift allowances were 15% and annual leave loading is 17.5%, consistent with the general principle that employees who are shift workers are paid for annual leave at their ordinary rate plus shift allowance or annual leave loading whichever amount is greater;
·   observed that under the agreement the rate of pay for employees on rostered days off included shift allowance;
·   observed that there was no reference to allowances being payable to employees while on personal leave or compassionate leave;
·   found that in the context of the agreement, read as a whole, where an allowance was considered to be part of the ordinary rate for the purposes of leave, and therefore payable to an employee while on leave, there was a specific provision to that effect and observed that there was no such provision with respect to the relevant allowance.[86]

The Full Bench in AMIEU v Brismeat[87] considered an extract in which the then Deputy President considered the context of the agreement and:

observed that the context in which the agreement was made included its earlier iterations and the provision in the agreement dealing with payment for annual leave was in identical terms to the provisions in six earlier versions of the agreement;
observed that the AMIEU did not challenge Brismeat’s submission that the allowance had not previously been paid on annual leave;
observed that an older 1994 agreement contained classifications and wage rates for both Rail Butchers and Table Butchers with the weekly wage rate for Rail Butchers being $20 per week higher than the weekly wage rate for Table Butchers;
observed that the 1996 version of the agreement provided that Rail Butchers would receive an ‘all purpose’ allowance of $4.80 per day but contained identical wage rates for Rail Butchers and Table Butchers;
considered the various iterations of the agreement since the 1996 version and observed that the reference to the rail allowance being an all purpose allowance was not found in any of the subsequent iterations of the clause prescribing the allowance;
observed that in versions of the agreement following the 1996 agreement the rail allowance was paid on a daily basis and the classification for Rail Butchers was to be phased out;
said that the ‘usual meaning of the term ‘all purpose’ when used in respect of an allowance, is that the allowance is part of the base or ordinary rate for the purposes of calculating payments for overtime and all forms of paid leave’;
found that regardless of any previous provisions it was clear that the rail allowance in the 2011 agreement, the subject of the dispute, was not an all purpose allowance.[88]

The Full Bench in AMIEU v Brismeat[89] considered an extract in which the then Deputy President considered the extrinsic material, being minutes of a meeting held for the purposes of negotiating the agreement, and:

found that there was nothing ambiguous about the provisions of the 2011 agreement in relation to which the AMIEU asserted an entitlement on the part of Table Butchers to be paid the allowance on all forms of leave;
found that on the plain meaning of the words in the relevant provisions of the agreement the allowance was not paid on all forms of leave;
did not accept that the minutes of the meeting established that the parties agreed that the allowance would be paid on annual leave or other forms of leave but rather established that the claim was raised and rejected;
- found that there was no basis for inferring that an understanding was reached and that the evidence was to the contrary.[90]

The Full Bench was not persuaded on appeal that the then Deputy President erred in her conclusion that the allowance was not payable to a Table Butcher when on paid leave and said:[91]

‘[38] We are fortified in our view that none of the “rates” terms include the “rail allowance” for paid leave purposes by the fact that the 2011 Agreement does not specify the “rail allowance” as being an “all purpose allowance”…’

before drawing out differences in the agreement the subject of that dispute compared with earlier iterations.

The facts of that matter are distinguishable from those present in this matter in that there was iterative change across multiple agreements in which an amount which was once included in the rate of pay for a classification became separated from that classification and characterised as an allowance. A change to the classification structure was also made to reflect this. The context in which the agreement was made was therefore different in that matter.

However in the current matter, it is also the case that no provision in the Agreement incorporated awards that specify that the shift allowance is an ‘all purpose’ allowance. To the contrary, there are two pre-modern awards incorporated in the Agreement and clause 4.2.5(a)(v) of the Incorporated Graphics Award and clause 4.4.1(c) of the Incorporated Metals Award define ‘week’s pay’ in a way that expressly excludes shift allowances. I accept the Applicant’s submission made during the hearing that the parties consciously replaced parts of the two incorporated awards when negotiating enterprise agreements but the text of the Agreement, read as a whole and in context, does not establish a clear intention on the part of the parties to include shift allowances in the definition of ‘Weeks’ pay’ for the purposes of redundancy pay. This is to be distinguished from other provisions in the Agreement that make specific provision for the inclusion of shift allowances in the calculation of certain entitlements. Considered in this context, it does not follow that the fact that the shift allowance is expressly stated to be payable for the purposes identified by the Applicant means that is it an ‘all purpose’ allowance for the purposes of the meaning of a ‘Weeks’ Pay’ in clause 25 of the Agreement.

The Applicant is seeking that the Commission look beyond the text of the disputed terms, and relies on a number of matters which it suggests are relevant in identifying the common intention of the parties, including the terms of instruments preceding the 2010 Agreement and explanatory material concerning the 2010 Agreement which was the enterprise agreement that first adopted the words now contained in clause 25 of the Agreement.

The common intention of the parties is 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. Objective background facts which were known to both parties and which inform the subject matter of the agreement may be relevant as distinct from the subjective intentions of the parties, which may be evident in statements and actions reflective of their actual intentions and expectations.

In this regard, there are difficulties in relying on the Powerpoint Presentation to ascertain the common intention of the parties. In particular Ms Hogan was not involved in the negotiation of the 2010 Agreement and, assuming employees were the intended audience for the presentation, the context in which the Powerpoint Presentation was given is unknown and it is also unknown as to whether the explanation in the Powerpoint Presentation was a complete explanation of the changes.

Further, while there was a change in the wording of the definition of ‘weeks pay/Weeks Pay’ between the 2007 Agreement and 2010 Agreement, the reasons for this change in wording are unknown. While I do not consider it necessary to make a finding about whether the Applicant’s construction of the 2007 Agreement or the Respondent’s alternative construction is correct, I accept that the definition ‘weeks pay’ in the 2007 Agreement is also complex. The Respondent points to some of this complexity given the interaction between Parts A and B of the Agreement and in this respect I note that in the 2007 Agreement:

a definition of “Weeks Pay” appears in Part A, Part 3, clause 2.4 which provides:

‘“Weeks Pay” means an employee’s normal rate of pay for an ordinary week’s work at the time of redundancy or relocation. Normal rate of pay does not include overtime, disability allowances and other like payments that are not included for the purpose of calculating overtime and/or Annual Leave’;

Part A, Part 3, clause 5 provides for redundancy payments based on ‘weeks’ pay’ and states:

“5.1 Redundancy Payments

Redundancy payments are based on continuous years of service. The following redundancy payment is made in addition to the other termination benefits:

5.1.1 Redundant employees with more than one year’s service will receive four (4) weeks’ pay for each year of service and pro-rata payment for each completed calendar month.

5.1.2 The following age or service provision will apply on the basis of whichever is the greater benefit to the redundant employee (not all):

(a) Employees who are 50 years of age will receive an additional amount equivalent to one (1) week’s pay for each completed year of service after their 50th birthday. For the purpose of this clause continuous service after the 1st July, 1987 only, will be recognised.

OR

(b) Employees with twenty (20) years or more service will be paid an additional four (4) weeks pay.”

Part B contains provisions of the Incorporated Graphics Award and clause 4.2.5(a)(v) defines ‘weeks pay’ for the purposes of ‘severance pay’ and expressly excludes shift allowances. The quantum of ‘severance pay’, while also based on years of service, is different to the quantum of redundancy pay calculated in accordance with Part A, Part 3, clause 5.1.

Part A of the Agreement may provide an answer to some of this complexity, explaining in the ‘Arrangement’ of the Agreement that ‘Part A will prevail over Part B to the extent of any inconsistency’. However I also note that the term ‘normal rate of pay’ was not defined in the 2007 Agreement. In the context of this complexity I accept the Respondent’s submission that it cannot be assumed that there was a mutual understanding about the entitlement in the 2007 Agreement or whether there had been a change in the entitlement in the 2010 Agreement.

In summary:

where an allowance is an all purpose allowance, in an industrial context, the historical treatment of these payments has been to include them as part of an employee’s wages for the purpose of calculating any penalties and loadings.[92] However there is no uniform ‘industrial’ understanding as to what allowances should be treated as ‘all purpose allowances’ and whether an allowance in an enterprise agreement is an ‘all purpose allowance’ will depend on the construction of the particular agreement, considered in context;

the Agreement does not define ‘all purpose’ and neither do the Incorporated Graphics Award and Incorporated Metals Award, although the Incorporated Metals Award does specifically set out a number of allowances which it states ‘shall apply for all purposes of the award’.[93] In this regard the notion of ‘all purpose’ in the definition of ‘Weeks Pay’ in the Agreement is more likely to have been a consequence of maintenance employees also being covered by the Agreement to whom the term ‘all purpose’ has a clear relevance in the context of their entitlements derived from the Incorporated Metals Award;
the Incorporated Graphics Award and Incorporated Metals Award define ‘week’s pay’ in a way that expressly excludes shift allowances and the text of the Agreement, read as a whole and in context, does not establish a clear intention on the part of the parties to include shift allowances in the definition of ‘Weeks’ pay’ for the purposes of redundancy pay. This is to be distinguished from other provisions in the Agreement that make specific provision for the inclusion of shift allowances in the calculation of certain entitlements;
further, the fact that other provisions of the Agreement expressly include shift allowance in the calculation of certain entitlements does not in and of itself mean that shift allowance is an ‘all purpose’ allowance, particularly considering it is paid for some purposes but not others;
the ordinary meaning of the words in the Agreement, read as a whole and in context do not support a finding that a ‘shift allowance’, as provided by clause 6.2.3 of the Incorporated Graphics Award, is an all purpose allowance such that it forms part of a ‘Weeks Pay’ as defined in clause 25(d) of the Agreement;
in the context of this dispute, the Powerpoint Presentation provides little assistance in understanding what parties were agreeing to in bargaining and does not displace the finding that the ordinary meaning of the words in the Agreement, read as a whole and in context, do not lead to the shift allowance being an all purpose allowance.

In determination of the dispute, I find that the answer to the question of whether ‘shift allowances’, as provided by clause 6.2.3 of the Incorporated Graphics Award, form part of a ‘Weeks Pay’ as defined in clause 25(d) of the Agreement is ‘no’.

COMMISSIONER

Appearances:

Ms K Presdee on behalf of the Applicant.
Mr R Dalton KC with Mr M Minucci, Counsel on behalf of the Respondent.

Hearing details:

2024.
Sydney.
July 22.

[1] PR718615.

[2] Applicant’s submissions at [15].

[3] Applicant’s submissions at [13] – [14].

[4] Applicant’s submissions at [17].

[5] Applicant’s submissions at [17].

[6] Applicant’s submissions at [17].

[7] Applicant’s submissions at [18].

[8] Applicant’s submissions at [20].

[9] Applicant’s submissions at [21].

[10] Statement of Margaret Hogan at [2] – [3].

[11] Statement of Margaret Hogan at [4], MH1.

[12] Statement of Margaret Hogan at [5].

[13] Applicant’s Submissions at [22] – [23].

[14] Applicant’s Submissions at [24].

[15] Applicant’s Submissions at [25].

[16] Applicant’s Submissions at [25].

[17] Applicant’s Submissions at [25], clause 5.9.1 of the Incorporated Metals Award.

[18] Applicant’s Submissions at [20] with reference to 4Yearly Review of Modern Awards [2015] FWCFB 4658.

[19] Applicant’s Submissions at [27].

[20] Applicant’s Submissions at [27].

[21] Applicant’s Submissions at [28].

[22] Respondent’s Submissions, para 9, AMWU v Berri Pty Ltd (2017) 268 IR 285 at [114].

[23] Respondent’s Submissions, para 9.

[24] Respondent’s Submissions, para 10.

[25] Respondent’s Submissions, para 11.

[26] Respondent’s Submissions, para 12.

[27] Respondent’s Submissions, para. 13.

[28] Respondent’s Submissions, para. 13.

[29] Respondent’s Submissions, para. 15.

[30] Respondent’s Submissions, para 16, 4 Yearly Review of Modern Awards [2015] FWCFB 4658 at [40].

[31] Respondent’s Submissions, para 16, 4 Yearly Review of Modern Awards [2015] FWCFB 4658 at [42] – [47].

[32] Respondent’s Submissions, para 16, 4 Yearly Review of Modern Awards [2015] FWCFB 4658 at [90].

[33] Respondent’s Submissions, para 16 - 17.

[34] [2021] FWC 2494 at [14].

[35] Respondent’s Submissions, para 18.

[36] Respondent’s Submissions, para. 7(a).

[37] Respondent’s Submissions, para. 7(c).

[38] Respondent’s Submissions, para. 20.

[39] Respondent’s Submissions, para. 21.

[40] Respondent’s Submissions, para. 22(a).

[41] Respondent’s Submissions, para. 22(b).

[42] Respondent’s Submissions, para. 22(c).

[43] Respondent’s Submissions, para. 23.

[44] Respondent’s Submissions, para. 7(b).

[45] Respondent’s Submissions, paras. 24 - 33.

[46] Respondent’s Submissions, para. 26.

[47] Australian Rail, Tram and Bus Industry Union v KDR Victoria Pty Ltd t/as Yarra Trams [2021] FCA 1377 at [63].

[48] [2015] FWCFB 1004.

[49] Respondent’s initial response filed 14 May 2024 at [4.12].

[50] Respondent’s initial response filed 14 May 2024 at [4.12].

[51] Applicant’s Reply Submissions at [5].

[52] Applicant’s Reply Submissions at [6].

[53] Applicant’s Reply Submissions at [8].

[54] Applicant’s Reply Submissions at [9].

[55] Applicant’s Reply Submissions at [13].

[56] Applicant’s Reply Submissions at [13].

[57] Agreement, cl. 9.11(a)(i).

[58] Agreement, cl. 9.11(a)(ii).

[59] Agreement, cl. 9.15.

[60] Fair Work Act 2009 (Cth), s.106BA.

[61]Fair Work Act 2009 (Cth), s.18.

[62] Fair Work Act 2009 (Cth), s.108.

[63] Applicant’s Reply Submissions at [14].

[64] Applicant’s Reply Submissions at [15].

[65] Respondent’s Submissions, para. 22(b).

[66] [2017] FWCFB 3005.

[67] Ibid, [114].

[68] [2020] FCAFC 123.

[69] Ibid, [65].

[70] [2018] FCAFC 131, 264 FCR 536.

[71] Incorporated Metals Award cl. 5.9.1 and Schedule C, cl. 4.

[72] [2015] FWCFB 4658.

[73] [2015] FWCFB 4658.

[74] [2015] FWCFB 4658 at [47].

[75] See for example clause 2, clause 26.2(a), Item B1.1 of Schedule A of the Graphic Arts, Printing and Publishing Award 2020.

[76] Applicant’s submissions at [13] – [14].

[77] Fair Work Act 2009 (Cth), s.106.

[78] Respondent’s Submissions, para. 22(a).

[79] Respondent’s Submissions, para. 22(b).

[80] [2020] FCAFC 123.

[81] See Incorporated Metals Award, clause 5.9, clause 4.0 of Schedule C.

[82] [2015] FWCFB 1004.

[83] [2015] FWCFB 1004.

[84] Australasian Meat Industry Employees Union, The v Brismeat Queensland (Woolworths Limied) T/A Brismeat [2015] FWCFB 1004 at [23] with reference to Australasian Meat Industry Employees Union, The v Brismeat Queensland (Woolworths) Limited T/A Brismeat [2014] FWC 8620.

[85] [2015] FWCFB 1004 at [24].

[86] Australasian Meat Industry Employees Union, The v Brismeat Queensland (Woolworths) Limited T/A Brismeat [2014] FWC 8620 at [57] – [66].

[87] [2015] FWCFB 1004 at [25].

[88] Australasian Meat Industry Employees Union, The v Brismeat Queensland (Woolworths) Limited T/A Brismeat [2014] FWC 8620 at [67] – [84].

[89] [2015] FWCFB 1004 at [26].

[90] Australasian Meat Industry Employees Union, The v Brismeat Queensland (Woolworths) Limited T/A Brismeat [2014] FWC 8620 at [85] – [93].

[91] [2015] FWCFB 1004 at [35].

[92] Respondent’s Submissions, para 16, 4 Yearly Review of Modern Awards [2015] FWCFB 4658 at [40].

[93] Incorporated Metals Award cl. 5.9.1 and Schedule C, cl. 4.

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