BHP Billiton Iron Ore Pty Ltd v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union of Workers (Western Australian Branch)
[2006] WASCA 124
•27 JUNE 2006
BHP BILLITON IRON ORE PTY LTD -v- AUTOMOTIVE, FOOD, METALS, ENGINEERING, PRINTING AND KINDRED INDUSTRIES UNION OF WORKERS (WESTERN AUSTRALIAN BRANCH) & ORS [2006] WASCA 124
| WESTERN AUSTRALIAN INDUSTRIAL APPEAL COURT | Citation No: | [2006] WASCA 124 | |
| THE COURT OF APPEAL (WA) | |||
| Case No: | IAC:1/2006 | 1 JUNE 2006 | |
| Coram: | WHEELER J (DEPUTY PRESIDING JUDGE) ROBERTS-SMITH J PULLIN J | 27/06/06 | |
| 18 | Judgment Part: | 1 of 1 | |
| Result: | Appeal allowed in part | ||
| B | |||
| PDF Version |
| Parties: | BHP BILLITON IRON ORE PTY LTD AUTOMOTIVE, FOOD, METALS, ENGINEERING, PRINTING AND KINDRED INDUSTRIES UNION OF WORKERS (WESTERN AUSTRALIAN BRANCH) THE COMMUNICATIONS, ELECTRICAL, ELECTRONIC, INFORMATION, POSTAL, PLUMBING AND ALLIED WORKERS' UNION OF AUSTRALIA, ENGINEERING AND ELECTRICAL DIVISION, WA BRANCH THE AUSTRALIAN WORKERS' UNION, WESTERN AUSTRALIAN BRANCH TRANSPORT WORKERS' UNION OF AUSTRALIA, INDUSTRIAL UNION OF WORKERS, WESTERN AUSTRALIAN BRANCH |
Catchwords: | Award Construction of award Principles applicable to Whether any ambiguity Application to vary award Wage Fixing Principles Meaning of "rates" |
Legislation: | Industrial Relations Act 1979 (WA), s 37, s 90, s 114 Workplace Agreements Act 1993 (WA), s 4H, s 6 |
Case References: | City of Wanneroo v Holmes (1989) 30 IR 362 Geo A Bond & Co Ltd (in liq) v McKenzie [1929] AR (NSW) 498 Glover v Tip Top Bakeries (1984) 8 IR 308 Norwest Beef Industries Ltd & Anor v Australian Meat Industry Employees Union of Workers (WA Branch) (1984) 12 IR 314 Re The Manufacturing Grocers' Employees Federation of Australia; Ex parte The Australian Chamber of Manufacturers (1986) 160 CLR 341 Robe River Iron Associates v Amalgamated Metal Workers & Shipwrights Union of Western Australia (1987) 67 WAIG 1097 Seymour v Stawell Timber Industries Pty Ltd (1985) 9 FCR 241 Short v F W Hercus Pty Ltd (1993) 40 FCR 511 Walkley v Dairyvale Co-operative Ltd (1972) 39 SAIR 327 Australian Nursing Federation v St Xavier Cabrini Hospital Governing Board Inc [2006] FCA 124 Chamber of Commerce & Industry of Western Australia (Inc) v The Australian Liquor, Hospitality and Miscellaneous Workers Union, Western Australian Branch [2002] WASCA 24 Chappell & Co Ltd v Associated Radio Co of Australia Ltd [1925] VLR 350 National Wage Case - June 1986 (1986) 14 IR 187 National Wage Case - Minimum Wage (1975) 167 CAR 18 National Wage Case 1975 (September) (1975) 171 CAR 79 Re Crown Employees (Architects - Public Works Department) Award (1986) 16 IR 330 State Review of National Wage Decision 1983 (1983) 63 WAIG 2207 Wage Fixing Principles Case (1978) 211 CAR 268 |
JURISDICTION : WESTERN AUSTRALIAN INDUSTRIAL APPEAL COURT TITLE OF COURT : THE COURT OF APPEAL (WA) CITATION : BHP BILLITON IRON ORE PTY LTD -v- AUTOMOTIVE, FOOD, METALS, ENGINEERING, PRINTING AND KINDRED INDUSTRIES UNION OF WORKERS (WESTERN AUSTRALIAN BRANCH) & ORS [2006] WASCA 124 CORAM : WHEELER J (DEPUTY PRESIDING JUDGE)
- ROBERTS-SMITH J
PULLIN J
- Appellant
AND
AUTOMOTIVE, FOOD, METALS, ENGINEERING, PRINTING AND KINDRED INDUSTRIES UNION OF WORKERS (WESTERN AUSTRALIAN BRANCH)
THE COMMUNICATIONS, ELECTRICAL, ELECTRONIC, INFORMATION, POSTAL, PLUMBING AND ALLIED WORKERS' UNION OF AUSTRALIA, ENGINEERING AND ELECTRICAL DIVISION, WA BRANCH
THE AUSTRALIAN WORKERS' UNION, WESTERN AUSTRALIAN BRANCH
TRANSPORT WORKERS' UNION OF AUSTRALIA, INDUSTRIAL UNION OF WORKERS, WESTERN AUSTRALIAN BRANCH
Respondents
ON APPEAL FROM:
Jurisdiction : WESTERN AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION
Coram : RITTER AP, KENNER C, HARRISON C
Citation : [2006] WAIRC 3846
File No : FBA 19 of 2005
Catchwords:
Award - Construction of award - Principles applicable to - Whether any ambiguity
Application to vary award - Wage Fixing Principles - Meaning of "rates"
Legislation:
Industrial Relations Act 1979 (WA), s 37, s 90, s 114
Workplace Agreements Act 1993 (WA), s 4H, s 6
Result:
Appeal allowed in part
Category: B
Representation:
Counsel:
Appellant : Mr H J Dixon SC & Ms K O'Rourke
Respondents : Mr D Schapper
Solicitors:
Appellant : Mallesons Stephen Jaques
Respondents : Derek Schapper
Case(s) referred to in judgment(s):
City of Wanneroo v Holmes (1989) 30 IR 362
Geo A Bond & Co Ltd (in liq) v McKenzie [1929] AR (NSW) 498
Glover v Tip Top Bakeries (1984) 8 IR 308
Norwest Beef Industries Ltd & Anor v Australian Meat Industry Employees Union of Workers (WA Branch) (1984) 12 IR 314
Re The Manufacturing Grocers' Employees Federation of Australia; Ex parte The Australian Chamber of Manufacturers (1986) 160 CLR 341
Robe River Iron Associates v Amalgamated Metal Workers & Shipwrights Union of Western Australia (1987) 67 WAIG 1097
Seymour v Stawell Timber Industries Pty Ltd (1985) 9 FCR 241
Short v F W Hercus Pty Ltd (1993) 40 FCR 511
Walkley v Dairyvale Co-operative Ltd (1972) 39 SAIR 327
Case(s) also cited:
Australian Nursing Federation v St Xavier Cabrini Hospital Governing Board Inc [2006] FCA 124
Chamber of Commerce & Industry of Western Australia (Inc) v The Australian Liquor, Hospitality and Miscellaneous Workers Union, Western Australian Branch [2002] WASCA 24
Chappell & Co Ltd v Associated Radio Co of Australia Ltd [1925] VLR 350
National Wage Case - June 1986 (1986) 14 IR 187
National Wage Case - Minimum Wage (1975) 167 CAR 18
National Wage Case 1975 (September) (1975) 171 CAR 79
Re Crown Employees (Architects - Public Works Department) Award (1986) 16 IR 330
State Review of National Wage Decision 1983 (1983) 63 WAIG 2207
Wage Fixing Principles Case (1978) 211 CAR 268
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1 WHEELER J (DEPUTY PRESIDING JUDGE): I have had the advantage of reading in draft the reasons for decision of Pullin J. I agree with those reasons and have nothing to add.
2 ROBERTS-SMITH J: I have had the benefit of reading in draft the reasons of Pullin J. I agree with those reasons and have nothing to add.
3 PULLIN J: This is an appeal by BHP against a decision of the Full Bench. The appeal to the Full Bench was from the decision of Commissioner Wood who had dismissed the Union's application to amend the award to bring under it three train drivers who had once been on workplace agreements, and to insert into the award a new classification for train controllers.
The train drivers' issue - Ground 1
4 Although the Union application was to vary the award to bring the train drivers under the award, it first argued that the award already extended to them. BHP contended that it did not. Commissioner Wood held that it did not. The Union appealed and the Full Bench by Commissioner Kenner and Commissioner Harrison, held that it did. The Acting President dissented. BHP appeals against the decision of the majority.
5 Clause 3 of the award read:
"(1) This Award extends to and binds [BHP and the Union] and all employees employed by the Company in the classifications mentioned in this Award."
6 The award classifies a Level 5 driver as:
"A person at this level will have completed a level four (4) competency pass-out and shall be qualified to operate all trains under Driver Only Operation over the BHP Iron Ore Pilbara District Railroad."
7 At the time the award was made in 2003, the three train drivers were employed by BHP and were Level 5 train drivers. By reference to the words of the award, it extended to the three train drivers. However, this was not so because of the Workplace Agreements Act 1993, which, at the time the award was made, provided in s 6 that:
"(1) Where a workplace agreement -
- (a) has been made between -
(i) an employer and an employee under a contract of employment; or
(ii) an employer and employees under contracts of employment;
and
(b) has come into force,
no award, whether existing or future, applies to -
(c) that contract or those contracts of employment; or
(d) the employer or such employee is a party to any such contract,
so long as the workplace agreement remains in force."
8 Therefore the award did not extend to the train drivers for "so long as the workplace agreements remained in force".
9 Subsequently a new government was elected and it amended the Workplace Agreements Act in 2002 to provide for the termination of workplace agreements. Section 4H was inserted into the Act and subs (1) stated that the section applied where a workplace agreement ceased to have effect as provided by earlier sections also introduced into the Act in 2002. It is not in dispute that one or other of those earlier sections applied so that the workplace agreements of the three train drivers ceased to have effect in 2003 and before the matter came on for hearing before Commissioner Wood.
10 Section 4H provided:
"…
(2) The employment of an employee becomes subject to a contract of employment under this section.
(3) If -
(a) the workplace agreement that ceased to have effect was an individual workplace agreement …
- …
the contract of employment is one containing -
- (c) the same provisions as those of the workplace agreement … that has ceased to have effect …
…
(6) Despite subsection (2) the employer and the employee are bound by -
(a) any award that extends to them …"
12 Commissioner Wood, at [115] of his reasons, referred to the three train drivers under consideration and said:
"There can be little doubt, and I do not consider it to be in dispute, that these employees operate as locomotive drivers. On its face then the Award would seem to apply. However, I consider that a broader approach must be taken. There is no stipulation in the Award which actually specifies the FIFO drivers, or conditions which relate to them. Their conditions, as displayed at [Exhibit R1, Tab 15] are different to those relating to locomotive drivers under the Award. On this basis it might be said that the WPA/FIFO drivers are a specific group of employees and that the Award, as made, does not 'extend to them'. I consider this to be the better interpretation of the Workplace Agreements Act in concert with the Award. I find that the WPA/FIFO drivers are not covered by the Award."
13 The Union appealed against that conclusion.
14 Commissioner Kenner in the Full Bench said at [261]:
(Page 7)
- "In my opinion, the critical issue to determine coverage by the Award is the engagement in work falling within a classification contained in the Award. That is, what the scope clause of the Award says on its plain and ordinary meaning. In my opinion the learned Commissioner erred in his construction of clause 3 - Area and Scope of the Award in concluding that the Award does not extend to WPA drivers. It was submitted both at first instance and on appeal that the FIFO drivers have particular terms and conditions in relation to working arrangements as opposed to Award drivers. That may be so. Simply because however the terms of a former workplace agreement has become a statutory contract of employment by the operation of s 4H(2) of the WPA Act, and has some different conditions in it, does not mean that the Award does not also have application. It seems that the legislature has contemplated the co-existence of both awards and the terms of any workplace agreement preserved as a statutory contract by the combined effect of ss 4H(6), (7) and (8) of the WPA Act."
15 Commissioner Harrison at [295] agreed with Commissioner Kenner.
16 The Acting President dissented on this point. He said at [125]:
"I have set out above the Commissioner's reasoning on this topic. In my opinion, the reasoning of the Commissioner on this issue was correct. Locomotive engine drivers employed on an FIFO basis constitute a distinct class of employees. The award does not extend to them. The terms and conditions under which the WPA/FIFO drivers are employed are significantly different from those that apply to a Level 5 locomotive driver under the award. The relevant differences include the shift arrangements, hours, overtime arrangements, residential arrangements, the performance review processes, and different overall packages in relation to remuneration and incentive bonuses. … The award does not encompass the work of the FIFO engine drivers who work shifts of 12 days on and 10 days off. The view that the award does not extend to the WPA/FIFO drivers is also enhanced when one has regard to the history of the award variation application which was referred to by the Commissioner in his reasons …"
17 BHP submits that Commissioner Wood and the Acting President are correct in their reasons. BHP submits that cl 3 of the award should be
(Page 8)
- read as not extending to employees who were at the time of the award, on workplace agreements and argues that the award does not, and never did, extend to the three train drivers. BHP submits that in order to interpret the award, it is necessary to:
(a) have regard for, inter alia, the context in which it was made and its purpose: Short v F W Hercus Pty Ltd (1993) 40 FCR 511;
(b) in that regard, to have regard for the broader context of the industry and circumstances in which the award was made: Glover v Tip Top Bakeries (1984) 8 IR 308 at 310 - 311;
(c) appreciate that the context also includes the relevant provisions under consideration as they appear relative to the instrument as a whole;
(d) determine the intention of the tribunal making the award according to legal canons of construction and the obvious intention of the maker of the award: Glover (supra) at 310; Seymour v Stawell Timber Industries Pty Ltd (1985) 9 FCR 241 at 259 and 260.
(e) in carrying out the task, it is permissible to look at the reasons for decisions dealing with the relevant award as an aid to construction.
19 For my part, I adopt what was said in two decisions of this Court in Norwest Beef Industries Ltd & Anor v Australian Meat Industry Employees Union of Workers (WA Branch) (1984) 12 IR 314 and Robe River Iron Associates v Amalgamated Metal Workers & Shipwrights Union of Western Australia (1987) 67 WAIG 1097.
20 In the Norwest case, Brinsden J said (at 319) that, in interpreting an award, if the terms are clear and unambiguous, it is not permissible to look to extrinsic material to qualify that meaning. To the same effect see Kennedy J at 324 and Olney J at 331. In the Robe River case, Brinsden J
(Page 9)
- (at 1098) referred again to his observations in the Norwest case and added, drawing on contractual principles, that in a case where the issue is about which of two or more possible meanings is to be given to a provision, it is not permissible to look at actual intentions, aspirations or expectations of the parties, but to look only at the objective framework of facts within which the contract came into existence and to the parties' presumed intentions in that setting.
21 I also refer to City of Wanneroo v Holmes (1989) 30 IR 362 at 378 where French J said:
"The interpretation of an award begins with a consideration of the natural and ordinary meaning of its words: Re Clothing Trades Award (1950) 68 CACR 597 (Aust Indus Ct, Full Ct). The words are to be read as a whole and in context: Australian Timber Workers Union v W Angliss & Co Pty Ltd (1924) 19 CAR 172. Ambiguity if any, may be resolved by a consideration, inter alia, of the history and subject matter of the award: Picard v John Heine & Son Ltd (1924) 35 CLR 1. Resort to such matters as prefatory statements and negotiations is of dubious assistance if admissible at all: Seymour v Stawell Timber Industries Pty Ltd (1985) 13 IR 289 at 290; 9 FCR 241 at 244 (Northrop J) (13 IR at 299; 9 FCR at 254) (Keely J) cf 13 IR at 309; 9 FCR at 265 (Gray J). The logs of claim and arbitrator's reasons for decision may be referred to to determine the ambit of the dispute which led to the making of the award so that where there are two possible interpretations, one within the ambit and one without, the former may be preferred. Evidence of the conduct of the parties subsequent to the making of the award however, cannot be relied upon to construe it: Seamen's Union of Australia v Adelaide Steamship Co Ltd (1976) 46 FLR 444, 446, disapproving Merchant Seamen's Guild of Australia v Sydney Steam Collier Owners and Coal Stevedores Association (1958) 1 FLR 248. That is not to say the words must be interpreted in a vacuum divorced from industry realities. …"
22 See also Walkley v Dairyvale Co-operative Ltd (1972) 39 SAIR 327 per Olsson J at 362.
23 French J in City of Wanneroo v Holmes case, also referred to what Street J had said in Geo A Bond & Co Ltd (in liq) v McKenzie [1929] AR (NSW) 498 at 503, reminding courts that awards were made in the light of customs and working conditions of each industry and that they frequently
(Page 10)
- result from an agreement between parties couched in terms intelligible to themselves but often framed without that careful attention to form and draftsmanship which one expects to find in an Act of Parliament. Street J said that in construing an award, one must always be careful to avoid too literal adherence to the strict technical meaning of words and must view the matter broadly and after giving consideration and weight to every part of the award in giving meaning to it consistent with the general intention of the parties gathered from the whole award.
24 With those observations on the law, I now turn to BHP's argument. BHP argues that it was obvious from the Commission's reasons when the award was made, that the terms and conditions of train drivers to be covered by the award were to be different from train drivers employed under workplace agreements. It was submitted that these differences meant that the award was therefore only concerned with, and could only ever be concerned with, non-workplace agreement train drivers.
25 In my opinion this does not support the argument that there is any ambiguity in the award. The award says that it extends to "employees employed by the company in the classifications mentioned in this award". The word "employees" is susceptible of no ambiguity and no attempt has been made to argue that the three train drivers do not fit within the classification of Level 5 drivers. No ambiguity emerges from a consideration of the context in which the award was made at the time. It is true that no reference was made to workplace agreement train drivers or their conditions of employment, but the parties must be taken to have known that workplace agreement train drivers were not covered by the award only because of s 6 of the Workplace Agreements Act. It must have been quite obvious to all concerned at the time the award was made, that if workplace agreement train drivers ceased to be subject to a workplace agreement, then the award would extend to them. In those circumstances the conditions in the award would prevail and not the conditions in any contract between BHP and the employee. See s 37 and s 114 of the Industrial Relations Act 1979.
26 In my opinion, construing the award as a whole and giving the words their ordinary usage, it is clear that the award was intended to extend to all employees of BHP who fitted within the classifications in the award. I detect no ambiguity and the ordinary sense of the words do not have to be modified to avoid any absurdity, repugnance or inconsistency within the award. The three train drivers are "employees employed by the company" in the classification of a Level 5 driver.
(Page 11)
27 Some point was made by BHP of an earlier application made by the Union to vary the award to extend coverage to the three train drivers. The application was made and dismissed before the application which was made to Commissioner Wood, but after the workplace agreements ceased to have effect. The Commission dismissed that application on the basis that the three train drivers had not shown that they wished to be covered by the award. The Commission on that application did not consider or decide whether the award in fact already covered the three train drivers. BHP argues that the fact that the Union applied to vary the award means that it did not believe the award extended to the three train drivers. What the Union believed is not relevant to the proper construction of the award. In any event, those proceedings, having occurred after the making of the award, cannot bear upon the proper construction of the award. See Brinsden J at 319 and Kennedy J at 324 in Norwest (supra) and French J in the passage from City of Wanneroo v Holmes, quoted above.
28 I would dismiss ground 1.
Ground 2
29 Ground 2 concerns the respondent's application which had been made to Commissioner Wood in relation to train controllers. Train controllers were at the time of the application, members of staff and not covered by the award. The Union applied to vary the award to include a new classification of employees in Sch 1 to the award, namely "train controllers", and to insert the wage which was to be paid to employees within that classification.
30 The industrial matter requiring determination was whether train controllers were unfairly paid by comparison with other employees to whom the award extended, including award locomotive drivers and whether the award should be varied to cover the staff train controllers.
31 In the course of considering the question about whether the award should be varied, the provisions of cl 11(d) of the Wage Fixing Principles were considered. Commissioner Wood said this:
"I return to the two main themes of salary and working conditions. It is the case for reasons mentioned previously, that the valid comparison must be between remuneration packages and not simply salary levels. Exhibit R5 attempts those comparisons and this document was not damaged, in my view, by the applicants' submissions. This is with the exception that clearly the Train Controllers' shifts are not typically 12 hours in
(Page 12)
- length, but are extended by 15 minutes (approximately) in hand over at the start of each shift. Principle 11(d) states, in part, that the rates of pay for classifications which are to be inserted in an award 'will be assessed by reference to the value of work already covered by the award'. The assumption has been that Train Controllers work in concert with locomotive drivers and others and hence these are the rates which Train Controllers legitimately or otherwise have an eye to. This view point is understandable."
32 The reference to "Exhibit R5" was a reference to a table which is conveniently reproduced in the Acting President's judgment in the Full Bench in [80] of the Acting President's reasons and which is as follows:
"Staff Train Controller and Iron Ore and Production (BHP Billiton Iron Ore Pty Ltd)
Locomotive Driver Award Level 5
Train Controller (42 hours) |
(48 hours) |
(48 hours) | |
Current | $117,800 | $134,628 | $144,238 |
Superannuation | $13,3421 | $15,2482 | $10,155 |
Total | $131,142 | $149,876 | $154,393 |
Add Annual Leave Loading 25%3 | $2749 | $3141 | |
Add Bonus Payment4 | $8220 | $9399 | |
New Total | $142,1115 | $162,416 | $154,393 |
1 Employer superannuation is 14% of base wage (here $95,300) for staff employees.
2 Calculated on the base wage of $108,914 (48 hours).
3Annual leave loading of 25% calculated on base wages of $95,300.
4 The bonus is calculated as 8.63% of the base rate and is subject to the employee meeting performance criteria.
5This figure does not include other staff benefits for which Award employees are not eligible such as two free meals per day whilst on shift, long service leave loading of 20%; personal travel insurance; and study assistance."
(Page 13)
33 Commissioner Wood then concluded at [188]:
"… I do not consider that given the history of coverage of Train Controllers and the circumstances that now present, the Commission should act to amend the award as claimed. I am not persuaded by the applicants that having balanced the needs of the company and the employees, and having regard for s6(af) and 6(ca) of the Act, the relief sought is warranted. I would dismiss the claim."
34 This decision of Commissioner Wood was made the subject of an appeal to the Full Bench. The Union's grounds of appeal concerning this part of the decision were in ground 4 which read as follows:
"4. The Commission erred in refusing to add the claimed classification of 'train controller' to the award in that
4.1 in comparing the earnings of the train controllers with those of Level 5 drivers covered by the award the Commission treated superannuation as if it were the same as wages, which it is not; and
4.2 it failed to advert to and take into account the fact that the respondent's superannuation contribution was conditional upon the employee contributing 5% of his salary to superannuation; and
4.3 in comparing the earnings of the trail controllers with those of Level 5 drivers covered by the award the Commission treated the 'bonus' payment as if it were the same as wages, which it is not; alternatively
4.4 it erred in taking total remuneration rather then salary as the appropriate basis for comparison in that
• superannuation contributions are in the nature of deferred remuneration the availability and value of which differs vastly from individual to individual according to a wide variety of factors including their age, type of fund, performance of the fund etc
- • a bonus is entirely at the discretion of the Respondent and may or not be paid in the future. The quantum of any future bonus is fact to be paid is unknown as are any conditions to be attached to it"
35 On appeal to the Full Bench these grounds were upheld by Commissioner Kenner and Commissioner Harrison, with the Acting President dissenting. The Acting President's view is reflected in [94] and [96] of his reasons for decision which read:
"94 Appeal ground 4.1 asserts that the Commission erred in comparing the earnings of train controllers to Level 5 drivers covered by the award because the Commission treated superannuation as if it were the same as wages, when it is not. I have earlier set out the relevant comparison table which was tendered by the respondent and referred to the observations and findings made by the Commissioner at paragraph [179] of his reasons. The table included superannuation as part of the remuneration comparison and the Commissioner said that the appellants' criticisms of the table were, in effect, not accepted by him. In my view, it was open to the Commissioner to include a consideration of superannuation as part of the total remuneration package of the relevant employees. I do not think that he Commissioner's reasons show that he treated superannuation as if it were the same as wages. This ground is not established, in my opinion.
…
96 Ground 4.3 asserts the Commission erred in comparing the earnings of the trail controllers with those of Level 5 engine drivers covered by the award because it treated the bonus payment to train controllers as if it was the same as wages when it was not. I do not accept that the Commissioner treated the bonus as if it was the same as wages. Instead, the Commissioner accepted that there should be a comparison of remuneration and not just salary and that the bonus payment should be taken into account in endeavouring to make a valid comparison. In my opinion, it was open for the Commissioner to take this
- approach and to try and ensure that a comparison of remuneration was not selective,, but took into account base salary, employer superannuation contributions, annual leave loading and bonuses. It is accepted, as argued by the appellant, that the bonus payment I s discretionary and therefore in any particular year may not be paid to an employee. However, the evidence of Mr Hoare was that, over the three years in which he had been in his present position, bonuses had been paid (TFI 325). In my opinion, there would have been something of a lack of realism if the Commissioner had failed to take into account the bonus in comparing remuneration."
36 However, Commissioner Kenner reasoned as follows:
"228 A substantial part of the appellant's case at first instance involving mounting a comparison between the duties and responsibilities of a Train Controller and those of an Award level 5 driver. However, this was not the only basis of the appellant's case as it was clear from the opening and closing submissions, and the evidence adduced by the appellants, that the Commission was also invited to make relevant comparisons between the duties and responsibilities of Train Controllers and those of Crew Development Officers, Train Co-ordinators and Rail Supervisors. It can be seen from the terms of Principle 11(d) that in the case of the extension of an existing award to award-free work, which was the case in relation to Train Controller s, the Commission is obliged to assess the 'rates' applicable to such work by reference to the 'value of work' already covered by the Award. This is the essence of a work value comparison for the purposes of establishing an appropriate rate of wage or salary. In the context of an assessment of the wage or salary to be paid to a Train Controller, this requires a consideration of the skills, responsibility, qualifications for and conditions under which relevant work is performed.
229 In establishing a rate of wage or salary for classification purposes, the focus in terms of wage setting principles is on the rate of pay, being the component that reflects the
- qualifications, skills, responsibility and the conditions under which the work is performed. It is the rate of wage or salary, derived from an analysis of these matters, that reflects the work value for the particular position that is being assessed. Correspondingly, it is the rate of wage or salary that is to be used for comparison purposes in assessing relative work value as between different occupations. In my opinion, as part of this process, it is impermissible to have regard, as a part of valuing the worth of work relative to other work performed, under the terms of the Wage Fixing Principles, to components of remuneration package that are related to the value of work in terms of skills, responsibilities and the environment in which work is performed, such as superannuation payment and bonuses. Neither of the latter types of payments are related to the performance of work per se, in a work value sense. Superannuation is a payment made as a consequence of legislative and contractual obligations for the purposes of retirement benefits and its only link with the performance of work as such, is its derivation from a percentage of the wage or salary of the individual concerned. Similarly, in the case of the respondent's operations, the bonus payments on the evidence at first instance are comprised of a number of different components including the overall performance of the respondent's business. Furthermore, the payments are made at the discretion of the employer."
37 Commissioner Harrison's reasons were that:
"281 When dealing with work value considerations and comparing the value of an employee's classification with another relevant classification it is my view that the rates of pay or salary and not the remuneration of other relevant classifications should be reviewed and taken into account as part of this assessment as this reflects a proper comparison of the value of the work undertaken by different classifications.
282 In this jurisdiction the ordinary meaning of salary has generally been accepted as being a fixed payment made periodically by an employer to an employee in return for work and is a payment that an employee can expect to
- receive on a regular basis (see Totaliser Agency Board v Edith Fisher (1997) 77 WAIG 1889). In my opinion and with respect the learned Commissioner erred when he took into account what I regard to be irrelevant considerations by including payments which are guaranteed to an employee nor is it a payment made in return to the work undertaken and the Commissioner erred when he took into account payments made for superannuation purposes which are also not payments made for work undertaken."
38 The appellant appeals on the basis that Commissioner Kenner and (possibly) Commissioner Harrison erred in the construction of Principle 11(d). (Commissioner Harrison did not refer to Principle 11(d) but the discussion about "rates" suggests that this Principle was in mind.) The ground of appeal is within the jurisdiction of the Court (see s 90 of the Industrial Relations Act) because Principle 11(d) is a schedule to the General Order issued by the Commission in Court Session on 4 July 2005 (85 WAIG 2089).
39 I should however, mention what is not within the jurisdiction of the Court and which does not have to be considered by this Court. It is the general issue about whether or not train controllers were unfairly paid and whether or not the award should have been varied, or if varied, what salary rate should be inserted.
40 If Commissioner Kenner and Harrison however wrongly construed cl 11(d) of the Wage Fixing Principles, then that wrong construction affected the decision of the Full Bench because it was a wrong view about a consideration relevant to their decision.
41 The issue in this Court is confined entirely to the meaning of the phrase "the rates applicable to such workers" in Principle 11(d). The appellant submits that that phrase should not be restricted to refer to rates of salary or read to exclude other components of remuneration, namely superannuation and bonus payments. The respondent submits that the word "rates" is a broad term of widely variable meaning. It was submitted that the view taken by Commissioner Kenner and Commissioner Harrison was reasonably open to them. I agree with the respondent that the word "rates" is a broad term but this means that it should not be read as referring only to salary. In my view the word should be read as referring to rates of remuneration in whatever form it is paid. In my opinion Commissioner Kenner and Commissioner Harrison erred in restricting the
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- meaning of the word as referring only to salary. The Wage Fixing Principles are concerned with not only "wages" but also " conditions" (see the introductory clause).
42 I also agree with the appellant that employer superannuation contributions are commonly regarded as being an aspect of the terms or conditions of employment and are frequently offered or paid as part of the total remuneration of employees. See for example Re The Manufacturing Grocers' Employees Federation of Australia; Ex parte The Australian Chamber of Manufacturers (1986) 160 CLR 341 at 355. The respondent contended that superannuation payments were of less value to an employee than wages. That is debatable as a proposition but even accepting that superannuation moneys are locked away until retirement, it does not mean that superannuation payments are of no value. As to bonus payments, it is true that they are payment made voluntarily, but if history shows as was the case here that bonus payments were regularly made then it would be unreal in my opinion to exclude from consideration bonuses and the likelihood of their future payment when examining the rates applicable to the work in question.
43 During the appeal, counsel for the respondent submitted that the Wage Fixing Principles were not relevant at all when considering the issue about whether or not the award should be varied. He submitted that the Principles were only applicable to the issue of what salary rate should be inserted in the award after a decision had been made to vary the award. I disagree with that submission. The issue about whether to vary the award involves a consideration about whether train controllers were unfairly paid when compared with other employees. The rates of remuneration paid to others under the influence of the Wage Fixing Principles had to be considered in relation to that issue.
44 I would therefore uphold ground 2. The case must be remitted to the Full Bench for it to reconsider grounds 4.1 to 4.4 of the respondents' appeal to the Full Bench in light of these reasons for decision.
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2