“Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers' Union v Steggles Pty Ltd

[2021] FWC 1265

[2021] FWC 1265

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
Steggles Pty Ltd
(C2020/8865)

DEPUTY PRESIDENT SAUNDERS NEWCASTLE, 9 MARCH 2021

Application to deal with a dispute in accordance with a dispute settlement procedure in an enterprise agreement – whether entitled to income protection.

Introduction

[1] The “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU) is in with dispute Steggles Pty Ltd (Steggles) in relation to whether Mr Laurie Donkin is entitled to income protection payments pursuant to clause 27 of the Steggles Beresfield Site (Maintenance Employees) Enterprise Agreement 2017 – 2020 (Agreement).

[2] On 8 December 2020, the AMWU filed an application in the Commission for it to deal with the dispute pursuant to the dispute resolution procedure in the Agreement. There is no dispute between the parties that the Commission has jurisdiction to deal with the dispute pursuant to s 739 of the Fair Work Act 2009 (Cth) (Act) and the disputes procedure at clause 10 of the Agreement.

[3] Following an unsuccessful conciliation of the dispute, I set the matter down for arbitration. The arbitration took place on 29 January 2021. Steggles filed, and both parties relied on, a medical report produced by Dr Martin Allen at the request of Steggles (Medical Report). No other evidence was adduced.

Question for determination

[4] The question for determination in this Dispute is as follows:

Does Mr Donkin have an entitlement to income protection payments under clause 27 of the Agreement?

[5] The parties are in dispute about both the correct interpretation of clause 27 of the Agreement and whether Mr Donkin’s circumstances enliven the entitlement under that clause.

Relevant provisions of the Agreement

[6] The following provisions of the Agreement are relevant to the Dispute:

“27. INCOME PROTECTION

27.1 The provisions of this clause apply to full-time and part-time employees (on a pro rata basis) but do not apply to casual employees. The entitlements of casual employees are set out in Clause 13.4 of this Agreement.

27.1.1 The provision of Income Protection is to provide income, or access to income, during a period of recovery from personal illness or injury from an accident that was not reasonably foreseeable. It is not intended to cover professional sports or high risk activities such as parachuting, hang gliding, powered vehicle racing etc., or unlawful activities such as drink driving.

27.2 Income protection cover provides the following benefits to existing employees as at the date the Agreement is approved by the FWC. Employees who commence after this date will become eligible for Income Protection after completion of more than 12 months service.

Income Protection will come into effect as follows:

Income Protection payment commences after the employee has been unable to work for a period of fourteen (14) calendar days.

(a) The Employee will be required to exhaust all other forms of paid leave which the Company can legally require them to use for the period of 14 calendar days as per clause 27.2 (a) including: Personal Leave, accrued RDOs, and accrued Annual Leave.

(b) Employees will be entitled to payment of wages which covers up to 12 weeks per annum at the normal pay for rostered hours, after qualifying for payment of income protection. Shift work employees ordinary rate of pay will include shift loading calculations as per clause 15.1.

(c) Where required, the employee will be entitled to a further 104 weeks continuous payment at 75% of the payment as noted above.

(d) Income Protection payments are subject to the employee meeting the requirements set out below:

› The Employee must complete the Baiada Group Application for Leave Form and submit it to their Supervisor or Site Manager.

› Attached to the Application Form must be all documentation relating to evidence of illness or injury such as a medical certificate from a duly qualified medical practitioner. Statutory Declaration is unacceptable. Medical Practitioner means a qualified practicing medical specialist licensed to practice his or her medical specialty qualifies him or her to diagnose a medical condition, an illness, or injury. The Medical Practitioner must not be a spouse, relative or business associate.

(e) The relevant General Manager Operations or National Human Resources Manager shall respond within 7 days from receipt of all the relevant information /documentation noted above in Clause 27.2.

(f) Income protection payments are not payable for injuries which are covered or potentially covered by a Workers’ Compensation Scheme.

27.3 In the event that the employee has insufficient leave to cover the period between exhausting all forms of paid leave and commencement of the Income protection payments, authorised unpaid leave will be granted to the employee. during this period.

27.3.1 Income protection is not an extension of personal leave and therefore will only apply when the Company is satisfied that the employee has a personal illness or injury from an accident that was not reasonably foreseeable that prevents them from returning to work for a continuous period in excess of 14 calendar days.

27.4 Return to Work Obligations

27.4.1 Employees must make reasonable efforts to return to work in suitable or pre-injury employment. Employees with some capacity to work have the obligation to make all necessary arrangements to return to work. Reasonable efforts to actively participate and cooperate in planning for return to work must be made by the employee and the Company to achieve the best return to work results.

27.4.2 Employees can request for the Company to provide a suitable employment role to cater to their capacity. The Company will comply, as long as it is practicable.

27.4.3 Employees that fail to make any reasonable effort to arrange their return to work, will have their income benefit suspended, or in some extreme cases, terminated.

27.5 The Company reserves the right to require employees to undergo, at the Company’s expense, examinations or other reasonable tests to confirm the occurrence of an event, entitlement to claim or capacity in relation to work duties. In addition we may conduct investigation to assess the validity of the claim.” [emphasis original]

Principles of construction

[7] There is no dispute between the parties as to the principles that I must apply in properly construing the Agreement. Those principles were summarised by the Full Bench in AMWU v Berri Pty Ltd 1 (Berri) 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.”

[8] More recently, the Full Court of the Federal Court of Australia stated the principles applicable to the interpretation of an enterprise agreements in James Cook University v Ridd: 2

“(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.” [references omitted]

Submissions

AMWU – proper construction of clause 27

[9] In relation to the proper construction of clause 27, the AMWU contends that the industrial context and purpose of clause 27 is to provide a benefit to employees who are recovering from a health condition where that employee is unable to work for more than 14 days and has exhausted their leave entitlements. The AMWU acknowledges that clause 27.3.1 clarifies that there must be a practical distinction in the operation of the schemes for personal leave and income protection, and that not all health conditions which would attract an entitlement to personal leave, either paid or unpaid, will be covered by clause 27.

[10] The AMWU argues that the plain text of clauses 27.1.1 and 27.3.1 impose an obligation on Steggles to provide income protection to employees who fall within two separate categories: (a) those affected by ‘personal illness’; or (b) those affected by ‘injury from an accident’. Further, they argue that health conditions are divided into ‘personal illness’ or ‘injury’ throughout the agreement (for example, clause 26.2 paid personal leave), and clauses 27.1.1. and 27.3.1. introduce the concept of ‘accident’ to the ‘injury’ category, tying this circumstance to the second category of health condition as an evidentiary precondition to entitlement under clause 27.

[11] The AMWU submits that clauses 27.1.1 and 27.3.1 have a plain meaning: they do not require personal illness to arise from an accident to enable an employee to claim income protection benefits and there is no requirement that personal illness be not reasonably foreseeable. They say the requirement for a condition not being reasonably foreseeable only applies to injuries. In the alternative they argue that any ambiguity in clause 27 should be resolved in Mr Donkin’s favour and the Commission should find that Mr Donkin is entitled to income protection. The AMWU also argue that Mr Donkin’s illness was not reasonably foreseeable.

[12] The AMWU puts forward that the Cambridge Dictionary defines ‘injury’ as ‘physical harm or damage to someone’s body caused by an accident or an attack’, or ‘physical harm that is done to someone’ and hence the word comprises two linked concepts; that there be harm occasioned, and that that harm be occasioned as a result of an external force of some kind. In contrast, they say the definition of ‘illness’ is broader, being ‘a disease of the body or mind’, or ‘a condition in which the body or mind is harmed because an organ or part is unable to work as it usually does; a disease or sickness’. The AMWU argues that it is difficult, if not impossible, to envision examples of conditions that would be classified as an ‘illness’ which arose out of an accident which would not be more appropriately classified as an ‘injury’. Hence, they argue the interpretation propounded by Steggles would render the phrase ‘personal illness’ in clause 27 otiose and offends the general principle that industrial instruments, like statutes, ought to be construed wherever possible to give effect to every word. For the interpretation propounded by Steggles to be accepted, the AMWU argues that a valid answer to the following question must be provided: what practical purpose does the phrase ‘personal illness’ in clauses 27.1.1. and 27.3.1. serve? The AMWU asserts that there is no practical purpose to this phrase if Steggles’ interpretation is accepted, and that Steggles’ interpretation must therefore be incorrect.

[13] The AMWU submits that if the only personal illnesses eligible for income protection benefits are those arising from an accident, this would lead to unusual, controversial and absurd outcomes. They say most employees suffering from serious and prevalent conditions including strokes, heart attacks or cancer would be unable to claim income protection benefits and that most ‘personal illnesses’ do not arise from accidents. Therefore the AMWU argues it reasonably follows that if the phrase ‘personal illness’ was included in clause 27, an accident would not be a condition precedent to recovering a benefit under the scheme if an employee was suffering from a ‘personal illness’, unless this was explicitly stated. If the common assumption of the parties had been that that the scheme would only cover employees for health conditions arising following an accident, there would have been no need to add the phrase ‘personal illness’ at all, so the AMWU contends.

[14] The AMWU argues that the correct construction of clause 27 is that the entitlement is subject to one additional requirement as compared to personal leave; that being, the requirement that, where the employee is claiming for an injury from an accident, the accident must have been ‘not reasonably foreseeable’. They say that interpretation is supported by the sentence immediately flowing from the qualification: ‘[O]r injury from an accident that was not reasonably foreseeable. It is not intended to cover professional sports or high risk activities such as parachuting, hang gliding, powered vehicle racing etc., or unlawful activities such as drink driving’.

[15] The AMWU contends that clause 27.1.1 explicitly provides examples of the types of activities that are not covered by clause 27, including activities that are either unlawful or at high risk of causing injury, harm arising from these types of activities is reasonably foreseeable which the AMWU says is the additional threshold for entitlement which distinguishes the income protection scheme contained within clause 27 from personal leave and satisfies clause 27.3.1.

[16] Furthermore, the AMWU submits that harm that is caused by these types of activities would most likely involve external force, and therefore be characterised as an injury, not a personal illness. They say that clause 27.1.1. could easily have provided similar examples of the types of personal illnesses that would not be covered, but did not, leading to the immutable conclusion that ‘accident’ refers only to the second category of health condition; namely, injuries. The fact that the Agreement provides clarification on the types of activities that could give rise to injuries that would not be covered because they resulted from an accident that was reasonably foreseeable, but is silent on personal illness in this respect, supports the conclusion that the category of personal illness does not need to arise from an accident to attract entitlement to income protection under clause 27, so the AMWU submits. The AMWU argues that if the Agreement had intended to exclude such a significant number of claims from the scheme in clause 27, this would have been clearly and explicitly stated in 27.1.1 by way of examples, as was provided for the injury category. They further contend that a construction which goes beyond the plain meaning of the clause and narrows the range of circumstances that would attract entitlement offends the industrial context and purpose of such clauses.

[17] The AMWU contends that for these reasons, clauses 27.1.1 and 27.3.1 do not require that a personal illness arise from an accident and be ‘not reasonably foreseeable’ in order for an employee to claim income protection payments under clause 27, and Steggles’ construction should be rejected.

AMWU – whether entitled to income protection payments

[18] In relation to whether Mr Donkin’s circumstances entitle him to income protection under clause 27, the AMWU submits that Mr Donkin’s circumstances fulfil the conditions precedent to be entitled to the benefits under clause 27 of the Agreement because:

(a) he has provided appropriate documentation in accordance with clause 27.2(d), including medical documentation that discloses that he is currently in recovery from a personal illness that renders him unable to attend work (27.1.1 and 27.3.1); and

(b) this examination was requested by Steggles following an invitation from the AMWU for Steggles to avail itself of its right under clause 27.5. Mr Donkin has demonstrated a willingness to satisfy Steggles of his entitlement throughout this dispute.

[19] The AMWU submits that the discretion contained within 27.3.1 for Steggles to be ‘satisfied’ must be exercised reasonably in order for the clause not to offend the industrial context and purpose of such clauses; an unfettered discretion to refuse protection provides no benefit as negotiated for during bargaining.

[20] Finally, the AMWU says that if the Commission construes clause 27 to mean personal illness, as well as injuries, must be not reasonably foreseeable for an employee to attract entitlement to income protection, Mr Donkin retains his entitlement. The medico-legal opinion obtained by Steggles specifically addressed the question of ‘reasonable foreseeability’, concluding, so the AMWU contends, that Mr Donkin’s current condition was not reasonably foreseeable.

Steggles – proper construction of clause 27

[21] In summary, Steggles submits that clause 27 reveals the following about the scheme of income protection under the Agreement: the scheme does not apply at large, but rather it is specifically directed at circumstances where an unforeseeable accident has caused personal illness or injury necessitating a period of recovery with consequential absence from work; the substantive entitlement to income payment does not apply at large but rather applies within the limits and boundaries marked out by the factual elements which underpin the entitlement; the employer retains a supervisory capacity over the scheme and may exercise its prerogative to intervene in order to test, suspend or even terminate an entitlement; and an entitlement to payment is not an unassailable right.

[22] Steggles submits that clause 27.1.1 is the critical provision in the scheme of income protection under the Agreement. The clause appears early in the arrangement of clause 27, and so serves to introduce the concept of income protection as envisaged by the Agreement; but the most significant purpose of the clause is that it explains the meaning of the entitlement and identifies the facts that are essential in order to establish substantive entitlement, so Steggles contends. They say that in this regard, in the collocation of words in the first sentence of the clause it is apparent that there are three factual elements which underpin the scheme: (1) ‘a period of recovery’, (2) ‘personal illness or injury and (3) ‘an accident’.

[23] In relation to ‘a period of recovery’, Steggles submits the language clearly conveys a particular type of period - being a period characterised by its association with recovery. They say it is clear from this that the scheme is not designed to respond to any period of absence but rather is specifically concerned with a period of absence dedicated to recovery.

[24] In relation ‘personal illness or injury’, Steggles contends that it is notable and significant that the preposition ‘from’ attaches to ‘personal illness or injury’ with the result being that the expression ‘from personal illness or injury’ operates as a prepositional phrase in the sentence. They say the significance of that syntactical approach is that the sentence conveys a causative relationship between ‘personal illness or injury’ and ‘a period of recovery’. Therefore, the expression ‘a period of recovery’ is to be understood as being a period of time which originates from a personal illness or injury. Succinctly put, Steggles submits that the clause envisages a period of recovery which has come into existence as a direct consequence of the occurrence of a personal illness or injury.

[25] In relation to ‘an accident’, Steggles argues that it is instructive that the preposition ‘from’ attaches to ‘an accident’ thereby forming a prepositional phrase which, in the context of the sentence, operates to identify ‘an accident’ as being the cause of the employee’s condition. Steggles says it follows that, regardless of whether the employee’s condition is one of personal illness or one of injury, the substantive entitlement is dependent on the fact of a condition which has resulted ‘from an accident’. The first sentence then concludes with a phrase which invests ‘an accident’ with the attribute of being ‘not reasonably foreseeable’; the second sentence illustrates activities and pursuits for which the scheme is not intended to cover. By this language, Steggles argues, the clause emphasises the specific and narrow focus of the income protection scheme.

[26] Steggles submits, in summary, that the income protection scheme under the Agreement is specifically directed at circumstances in which an unforeseeable accident has caused a personal illness or injury necessitating a period of recovery with consequential absence from work.

[27] In relation to clause 27.3.1, Steggles submits that as it repeats two of the factual elements expressed earlier at clause 27.1.1, being: the fact of personal illness or injury; and the fact of an accident (that was not reasonably foreseeable), the clause emphasizes the critical significance of those facts to the scheme of income protection. Further, they say the clause also reveals that the evidentiary threshold is subject to employer satisfaction because, according to the language of the clause, income protection ‘will only apply when the Company is satisfied’ as to the existence of the critical facts. They say that it is notable that, in the style of clause 27.1.1, the preposition ‘from’ attaches to ‘an accident’ and results in the prepositional phrase ‘from an accident’. This serves to confirm, so Steggles contends, that ‘personal illness or injury’ is synonymous with the consequences of ‘an accident’.

[28] Steggles further contends that clause 27.3.1 is notable for its declaration that income protection ‘is not an extension of personal leave’. They say that by this declaration, the clause gives further emphasis to the unique nature of the income protection scheme and, while there is similarity between the two entitlements insofar as both are dependent on the fact of personal illness or injury, the notable point of difference is that, in the case of the income protection scheme, the relevant illness or injury must arise from an unforeseeable accident.

[29] Steggles puts forward that clause 27.2(d) is only concerned with the practical operation of the scheme and is not concerned with the establishment of a substantive entitlement; succinctly put, it is an incidental provision. Further, they say clause 27.4.3 gives clear expression to the employer’s right to suspend or terminate income benefits and demonstrates that the scheme is subject to the prerogative and supervisory intervention of the employer so it follows that regardless of the establishment of substantive entitlement, the entitlement is not unassailable.

[30] Finally, Steggles argues that clause 27.5 conveys the employer's right to inform itself about important matters and demonstrates that employer prerogative is a relevant operational feature of the scheme and, under this income protection scheme, an entitlement to income protection payment is not an unassailable right or privilege.

Steggles – whether entitled to income protection payments

[31] In relation to whether Mr Donkin’s circumstances enliven income protection pursuant to clause 27, Steggles accepts that it is apparent from the Medical Report that Mr Donkin’s current condition is the consequence of his reaction to the failure of an investment, and while it can be accepted that Mr Donkin has a medical condition, this does not provide a sufficient basis for entitlement under the income protection scheme pursuant to clause 27. However, during oral submissions Steggles accepted that, based upon the Medical Report filed by the Steggles, Mr Donkin’s medical condition is a personal illness. Steggles argues that most critically, the report does not disclose the occurrence of any unforeseeable accident, or any accident at all. Hence, Steggles submits that it follows that Mr Donkin’s condition cannot be explained as being caused by an accident. Hence, they say as his condition is not shown to be the consequence of ‘an accident’, Mr Donkin’s circumstances do not fall within the scope of the income protection scheme at clause 27.

[32] Finally Steggles submits that the dispute application asserts that Mr Donkin qualifies for payment by reason of him having completed a leave form and attached documentation. Even if such documentation is completed and presented, this is not sufficient, so Steggles contends, to establish substantive entitlement to income payment: documentation requirements are procedural matters and the substantive entitlement is not established merely by the completion and presentation of documentation.

Consideration

[33] Save for the differences arising between the parties because of their conflicting views as to the interpretation of clause 27.1.1 of the Agreement, it is uncontentious, and I am satisfied on the evidence, that Mr Donkin meets the requirements to be entitled to income protection under clause 27. In summary:

•  Mr Donkin is a full-time employee (clause 27.1);

•  based upon the Medical Report of Dr Allen, Mr Donkin is suffering from major depression and anxiety which are personal illnesses (clause 27.1.1);

•  Mr Donkin has more than 12 months’ service and/or was an existing employee at the time the Agreement was approved (clause 27.2);

•  Mr Donkin has been unable to work for a period of at least 14 calendar days (clause 27.2);

•  in respect of the period of 14 calendar days, Mr Donkin exhausted all other forms of paid leave (including personal leave, RDOs, annual leave) (clause 27.2(a));

•  Mr Donkin applied for income protection (clause 27.2(d)); and

•  Mr Donkin is not suffering from an injury which is covered or potentially covered by a workers’ compensation scheme (clause 27.2(f)).

[34] The crux of the dispute is the parties’ opposing constructions of the first sentence of clause 27.1.1 of the Agreement. The constructional choice can be neatly summarised as follows: the provision of income protection is available under the Agreement to provide income, or access to income, during a period of recovery from:

AMWU (interpretation):

(1) personal illness; or

(2) injury from an accident that was not reasonably foreseeable.

Steggles (interpretation):

(1) personal illness from an accident that was not reasonably foreseeable; or

(2) injury from an accident that was not reasonably foreseeable.

[35] Because clause 27.1.1 of the Agreement is open to these arguable constructions, it is ambiguous. However, neither party sought to adduce evidence as to any surrounding circumstances which might assist in the resolution of the ambiguity. Accordingly, the constructional task is focused on the text of the provision, considered in context and in light of its purpose.

[36] I accept the AMWU’s submission that the ordinary meaning of ‘injury’ is ‘physical harm or damage to someone’s body caused by an accident or an attack’, or ‘physical harm that is done to someone’ and hence the word comprises two linked concepts; that there be harm occasioned, and that that harm be occasioned as a result of an external force of some kind. In contrast, the ordinary meaning of ‘illness’ is broader, being ‘a disease of the body or mind’, or ‘a condition in which the body or mind is harmed because an organ or part is unable to work as it usually does; a disease or sickness’.

[37] The concept of an injury arising from an accident is well understood and it is not difficult to think of numerous examples. For instance, a person may suffer a neck injury from a car accident. In contrast, it is unusual to think of an illness arising from an accident. One example of such an illness may be post-traumatic stress disorder arising from an accident. Another may be a person who falls from a ladder, suffers a graze which becomes infected leading to a blood infection. In such a case, the injury leads to a later illness.

[38] On the other hand, many common illnesses such as most cancers, heart disease, and diseases such as chronic fatigue syndrome and ross river fever do not ordinarily arise from an accident. If Steggles’ construction of clause 27 of the Agreement is correct, the income protection scheme provided for in the Agreement would have a very limited field of operation insofar as illnesses are concerned. It would mean that employees covered by the Agreement who suffer from an illness such as cancer, heart disease, or diseases such as chronic fatigue syndrome or ross river fever, which do not arise from an accident, would not have any entitlement to income protection under the Agreement. That would be an odd industrial outcome 3 in the context of an income protection scheme within an enterprise agreement. Indeed, it would be difficult to discern the purpose behind excluding such illnesses from the income protection scheme established by the Agreement. I accept that such an unusual industrial result could be achieved if clear language to that effect were used in the Agreement. In my opinion, there is no such clear wording in the Agreement.

[39] It is clear from clause 27.1.1 of the Agreement that the income protection scheme is not intended to provide protection for any loss of income. The loss of income must arise ‘during a period of recovery from personal illness or injury from an accident that was not reasonably foreseeable’. The purpose of the scheme is to provide protection against such losses.

[40] Reading clause 27.1.1 in its textual context provides several helpful indications about its proper construction. First, the second sentence of clause 27.1.1 makes plain that absences from work as a result of activities such as parachuting, hang gliding, powered vehicle racing, and drink driving are not intended to be covered by the income protection scheme. It is easy to see how those activities could give rise to one or more injuries from an accident that was reasonably foreseeable. But it is difficult to see how an illness could arise from an accident associated with such an activity. In my view, it is telling that the second sentence of clause 27.1.1 does not refer to, or give any examples of, an activity that would be likely to, or could readily be expected to, give rise to a personal illness from an accident.

[41] Secondly, if the objective intention had been as Steggles contends, the scheme provided for in clause 27 of the Agreement would have been more accurately described in the Agreement as an accident protection scheme, not an income protection scheme.

[42] Thirdly, the style of drafting in clause 27.1.1 may be contrasted with the style used in other nearby parts of the Agreement. For example, clause 26.2 of the Agreement provides:

“An employee may take paid personal leave if the leave is taken:

(a) because the employee is not fit for work because of a personal illness, or personal injury, affecting the employee; or

(b) to provide care or support to a member of the employee’s immediate family, or a member of the employee’s household, who requires care or support because of:

(i) a personal illness, or personal injury, affected the member; or

(ii) an unexpected emergency affecting the member.”

[43] The drafter of clause 26.2 has used commas in clauses 26.2(a) and 26.2(b)(i) to make it clear, in each case, that the personal illness must affect the employee/member in order for the entitlement to arise. If the drafter of clause 27.1.1 had used the same technique and objectively intended that the personal illness had to arise from an accident in order for the entitlement to arise, the provision would have included the following commas [emphasis added]:

“… during a period of recovery from personal illness, or injury, from an accident …”

[44] Fourthly, clause 27.3.1 provides (in part) that ‘[i]ncome protection is not an extension of personal leave…’ Steggles contends that if all personal illnesses are captured by clause 27.1.1 then it necessarily offends clause 27.3.1. I disagree. Personal leave is governed by clause 26 of the Agreement. It permits an employee to take paid personal leave if ‘the employee is not fit for work because of a personal illness, or personal injury, affecting the employee’. Unlike clause 27.1.1, clause 26 is not limited to personal injuries arising from an accident that was not reasonably foreseeable. Clause 26 covers any personal injury howsoever caused. It follows that clause 27, on either of the constructions advanced by the parties, provides an entitlement which is narrower than that provided by clause 26 (personal leave). The AMWU’s construction excludes injuries caused by reasonably foreseeable accidents whereas those same injuries may entitle an employee to personal leave. That is a construction which sits comfortably with clause 27.3.1.

[45] Fifthly, clause 27.3.1 provides (in part) that ‘[i]ncome protection… will only apply when… the employee has a personal illness or injury from an accident that was not reasonably foreseeable’. If the AMWU’s interpretation were correct, given that ‘personal illness’ is preceded by ‘a’, one would expect that ‘an’ would appear immediately prior to ‘injury’ so that that part of the sentence would read ‘a personal illness or an injury’. The absence of the word ‘an’ supports Steggles’ construction. However, clause 27.3.1 is not the operative provision within clause 27; the drafting here is simply one aspect of the context in which clause 27.1.1 appears. Further, care must be taken to ensure that an overly technical approach is not taken to the interpretation of industrial instruments.

Conclusion

[46] For the reasons given, having regard to the text of clause 27, construed in its context and taking a purposive approach as opposed to a narrow or pedantic approach, I prefer the AMWU’s construction of clause 27 over that for which Steggles contends. That is, Mr Donkin will be entitled to income protection if he is suffering a personal illness regardless of whether that personal illness was caused by an accident that was not reasonably foreseeable (assuming that he meets the other requirements of clause 27). Based upon the uncontested facts outlined above, I am satisfied that Mr Donkin’s circumstances satisfy each of the requirements for him to be entitled to income protection under clause 27.

[47] The answer to the question for determination is yes.

DEPUTY PRESIDENT

Appearances:

Ms K Tobin, National Legal Officer of the AMWU, for the Applicant
Mr J Stanton, Solicitor of AFEI Legal, for the Respondent

Hearing details:

2021.
Newcastle:
29 January.

Printed by authority of the Commonwealth Government Printer

<PR727614>

 1   [2017] FWCFB 3005

 2 [2020] FCAFC 123 at [65]

 3   ABCC v CFMMEU [2019] FCAFC 59 at [5]