Bianco Walling Pty Ltd T/A Bianco Precast
[2020] FWCA 5777
•29 OCTOBER 2020
| [2020] FWCA 5777 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
Section 217 - Application to vary an agreement to remove an ambiguity or uncertainty
Bianco Walling Pty Ltd T/A Bianco Precast
(AG2017/5792)
BIANCO WALLING PTY LTD (GEPPS CROSS SITE) ENTERPRISE AGREEMENT 2016 - OFF SITE
Building, metal and civil construction industries | |
DEPUTY PRESIDENT ANDERSON | ADELAIDE, 29 OCTOBER 2020 |
Application to vary an enterprise agreement to remove an ambiguity or uncertainty – redetermination - Bianco Walling Pty Ltd (Gepps Cross Site) Enterprise Agreement 2016 Off Site – scope – concrete manufacturing operations – surrounding circumstances – common intention – ambiguity or uncertainty found – operative date – retrospectivity – application granted
[1] This decision is a redetermination of an application made on 27 November 2017 by Bianco Walling Pty Ltd trading as Bianco Precast (Bianco) under section 217 of the Fair Work Act 2009 (FW Act) to vary an enterprise agreement to remove an ambiguity or uncertainty.
[2] The redetermination follows a decision of the Full Court of the Federal Court of Australia (the Court) on 24 March 2020.
[3] The subject of these proceedings is the Bianco Walling Pty Ltd (Gepps Cross Site) Enterprise Agreement 2016 – Off Site (the 2016 Agreement).
[4] Bianco seek to vary clause 1.2 of the 2016 Agreement, commonly referred to as the scope clause.
[5] It seeks a retrospective variation be made to the date the Agreement commenced.
[6] The application is opposed by the Construction, Forestry, Maritime, Mining and Energy Union (the CFMMEU).
The matter in issue
[7] These proceedings concern whether clause 1.2 of the 2016 Agreement is ambiguous or uncertain and, if so, what order (if any) should be made.
[8] Reduced to its most basic form, the ambiguity or uncertainty is said to affect whether the 2016 Agreement applies only to Bianco’s Pre-cast Division (as Bianco contends) or whether, in addition, it applies to Bianco’s Structural Division and Civil Division (as the CFMMEU contends).
First instance and appeal proceedings
[9] First instance proceedings were conducted on 25 June 2018. A decision was delivered on 17 September 2018. 1 I determined that, notwithstanding evidence of common intention and general merit, the language of clause 1.2 had a plain and ordinary meaning such that that no ambiguity or uncertainty existed. I dismissed the application.
[10] On appeal, a Full Bench of the Commission upheld the first instance decision. 2 The Full Bench concluded that whilst regard may be had to surrounding circumstances (such as evidence of common intention) it does not follow that regard must be had to such matters where the ordinary meaning of relevant words is plain. The appeal was dismissed.
Court decision
[11] Bianco sought judicial review of the Commission decisions.
[12] On 24 March 2020 the Full Court of the Federal Court of Australia granted prerogative relief in Bianco’s favour 3 (the Court decision). The Court quashed the first instance and Full Bench decisions and orders of the Commission. It ordered redetermination.
[13] The Court concluded that, at both first instance and on appeal, the Commission had “misunderstood the nature of the FWC’s jurisdiction under s 217 and therefore the very task required of the FWC”. 4
[14] In particular, the Court said: 5
“(a) the Full Bench failed to recognise that the hearing and determination of an application for variation under s 217 does not require the FWC to interpret the enterprise agreement in question, that is, to determine by a process of construction the true meaning of the enterprise agreement. That meant that the discharge by the Full Bench of its appellate function did not require it to determine whether or not the interpretation which the Deputy President had given to the 2016 Agreement was correct or otherwise. In taking a contrary view, the Full Bench misunderstood the nature of the opinion it had to form in the discharge of its appellate function;
(b) by applying the Berri principles as to the interpretation of enterprise agreements, the Full Bench made the same mistake as to the nature of the task required under s 217 as did the Deputy President;
(c) the endorsement of the Deputy President’s belief that he was unable to take into account “the evidence and findings of surrounding circumstances, including common intention and objectively established past or current practice” likewise involved the misunderstanding of the jurisdiction exercised by the Deputy President which was to be reviewed on appeal; and
(d) the Full Bench failed to recognise that the discharge of the FWC’s function under s 217 attracted the application of s 578 and did not require the application of the rules of evidence.”
Redetermination proceedings
[15] I conducted redetermination proceedings on 13 July 2020 and 5 August 2020.
[16] Leave previously granted for Bianco to be represented in proceedings was continued.
[17] In the redetermination proceedings I dealt with the matter afresh having regard to the law as stated by the Court and the evidence (including fresh evidence) and further submissions put before me.
[18] Bianco’s application remained unamended. The same parties to proceedings appeared (Bianco and the CFMMEU). No employee or other employee interests appeared.
[19] By directions of 1 May 2020 and 9 June 2020 leave was granted for filing supplementary evidence and submissions. At the redetermination, evidence taken in 2018 was re-admitted by consent but fresh evidence (oral and documentary) was filed and admitted.
[20] I received fresh documentary and oral evidence from Bianco’s Chief Financial Officer Mr Corbo, 6 who also gave evidence in 2018,7 and fresh documentary evidence from the CFMMEU.
[21] Much of Mr Corbo’s evidence concerned historical matters associated with making the 2016 Agreement and predecessor agreements. Whilst Mr Corbo had considerable direct knowledge of relevant facts, portions of his evidence was sourced from business records and from what he had been advised by others. Whilst generally credible, allowance needs to be made for gaps in Mr Corbo’s recall of events which occurred up to nine years earlier. Whilst some inconsistencies emerged between his 2018 evidence and that given in 2020, these were not matters that bear on credit. The lapse of time and additional documentary material produced in 2020 explain most differences or inconsistencies.
[22] I received evidence from the CFMMEU’s South Australian Assistant Secretary, Mr Kirner. 8 His evidence was admitted by consent, without being called for cross-examination.
[23] In advance of the redetermination, on 9 June 2020 I issued a Decision 9 and Order10 on the CFMMEU’s application that Bianco produce communications and drafts (other than privileged communications) related to the 2016 Agreement and two earlier Agreements: the Bianco Walling Pty Ltd (Gepps Cross Site) Enterprise Agreement 2011 – Off Site and the Bianco Walling Pty Ltd (On-Site) Enterprise Agreement 2011.
[24] A substantial volume of documents was produced consequent on the production order and admitted into evidence largely as attachments to the newly filed witness statements.
[25] Also re-admitted by consent was documentary and oral evidence given in 2018 by two employees, Mr Martin and Mr Scalzi. 11 Neither were recalled.
[26] At the conclusion of the redetermination proceedings I reserved my decision which I now deliver.
Submissions
Bianco
[27] Bianco submit that clause 1.2 of the 2016 Agreement is ambiguous or uncertain and that it should be varied to remove that ambiguity or uncertainty. The ambiguity or uncertainty Bianco asserts is in the meaning of the scope clause as a whole and in particular the phrase “Bianco’s concrete manufacturing operations”. It says that the phrase only has a plain meaning when interpreted in the context of Bianco’s operations, not concrete manufacturing operations in other businesses or in the abstract.
[28] It says that established custom and practice within Bianco’s business is that the 2016 Agreement (and its predecessors) applied only to concrete manufacturing operations in its Pre-cast Division (which is its primary business activity).
[29] It seeks an order deleting the phrase “concrete manufacturing operations” and inserting in lieu the words “Pre-cast division”. It says this would provide the clause a certain meaning and remove the ambiguity or uncertainty.
[30] Bianco also submit that such a variation would accord with the common understanding of both the employer and its employees since the 2016 Agreement was made and the common understanding during the life of its predecessor, the 2011 Agreement (Off-site).
[31] Bianco submit that should an ambiguity or uncertainty be found to exist, then an order varying the 2016 agreement to remove the ambiguity or uncertainty should follow.
[32] Bianco further submit that there are cogent reasons to warrant the retrospective operation of such an order.
CFMMEU
[33] The CFMMEU submit that there is no ambiguity or uncertainty in the scope of the 2016 Agreement. It says that the phrase “Bianco’s concrete manufacturing operations” has a plain meaning. It says that it is not a phrase that refers to a company specific lexicon, but is simply a clear description of business activity that can be described as “concrete manufacturing”. It says that the 2016 Agreement draws no distinction elsewhere between Bianco’s particular use of language and the generally understood plain meaning of words, and does not do so in the scope clause.
[34] The CFMMEU says that all persons employed in relevant classifications who work in Bianco’s concrete manufacturing operations are covered by the 2016 Agreement irrespective of what operational division they work in. It says that this includes persons working in the Structural Division and the Civil Division, and cannot be limited (as Bianco would) to employees in the Pre-cast Division.
[35] The CFMMEU further submit that evidence of surrounding circumstances (including objective facts or alleged common understandings of what the scope clause means or how it operated) is not relevant given that the words in clause 1.2 have a plain meaning and are not uncertain or ambiguous.
[36] The CFMMEU also submit there are compelling reasons weighing against the exercise of discretion to vary the 2016 Agreement even if it is found to be ambiguous or uncertain.
[37] Finally, the CFMMEU submit that it would be unjust and inconsistent with principle for an order (if made) to have retrospective effect.
Facts
[38] Whilst in proceedings before the Court no issue was taken about the findings of fact made in 2018, a redetermination conducted in circumstances where there is both fresh and supplementary evidence before me requires a redetermination of facts.
[39] In general, the facts as summarised by the Court, 12 including then agreed facts, are not disturbed by the fresh evidence before me. However, the fresh evidence particularly regarding the making and approval of the 2011 Agreement (Off-site) and the 2016 Agreement, requires additional or supplementary findings.
[40] I make the following findings.
Bianco’s operations
[41] Bianco is engaged in the construction industry in South Australia. It commenced bricklaying work in 1994 but the business enlarged over ensuing years. In about 2000, Bianco commenced manufacturing pre-cast concrete panels for use in the industry and shortly afterwards ceased bricklaying. Bianco undertook its manufacture of pre-cast concrete panels at premises at Waldaree Street, Gepps Cross in suburban Adelaide. In 2004, Bianco acquired a business located on Grand Junction Road, Gepps Cross, which produced pre-cast concrete architectural panels.
[42] In about mid-2005, Bianco closed its Waldaree Street factory and merged its operations there with the operations conducted at Grand Junction Road, Gepps Cross. From that time, Bianco referred to the merged operations as its “Pre-cast Division”. That Division has continued to manufacture pre-cast concrete panels (which Bianco had commenced manufacturing in about 2000) as well as the manufacture of pre-cast concrete architectural panels.
[43] On 1 July 2006, Bianco acquired another company which produced civil construction products including T-beams and drainage products. This business was located at Kilkenny, in suburban Adelaide.
[44] In July 2011, Bianco closed the Kilkenny site and relocated the business conducted there to its Gepps Cross premises.
[45] Within Bianco, the part of the business constructing the T-beams is known as the “Structural Division”. The part of the business constructing the civil construction products is known as the “Civil Division”. The effect is that, since July 2006, Bianco has had three divisions: the Pre-cast Division, the Structural Division and the Civil Division.
[46] The Pre-cast Division manufactures (at Gepps Cross) and installs (on client sites) pre-cast concrete panels. Those products are typically designed by architects and engineers for a specific project and usually have a “finish” applied to them.
[47] The Structural Division generally manufactures concrete T-beams for use on infrastructure projects. It does not, however, engage in installation of those beams. Bianco manufactures the T-beams in a pit housed in a purpose-built building on the same site at Gepps Cross at which the Pre-cast Division operates.
[48] The Civil Division manufactures culverts, pipes, pits and other drainage products, for use on civil construction projects. These are predominantly concrete but may be comprised of other materials such as PVC, cast iron, galvanised iron and poly pipe. The Civil Division does not install any of the products which it produces.
[49] Bianco operates each of its three divisions as separate business units. Each is organisationally and operationally distinct, including having:
(a) its own production workforce;
(b) separate management and supervision;
(c) separate estimating, project management and quality assurance processes;
(d) separate costing, key performance indicators (KPIs), profit and loss reports (only upper management and administration resources are shared among groups); and
(e) jobs have separate codings and profit and loss centres. Those codings clearly differentiate between divisions.
[50] Bianco’s workforce is separately organised. Although there are employees of both the Pre-cast and Structural Divisions (as well as a small number of employees in the Civil Division) located at Bianco’s Gepps Cross premises, they work in distinct areas on the site. Employees rarely move between the divisions but may do so from time to time (e.g. to avoid being laid off in times of work downturns). Employees in each division are classified by separate classification structures. Each workforce is paid according to that workgroup’s arrangements. The cost centre for the division in which each employee works is identified on the employees’ payslips.
[51] Only employees from the Pre-cast Division who are engaged in on-site installation of products manufactured in Bianco’s Pre-cast Division travel to sites at which Bianco clients are undertaking building work in order to install those products.
Award and agreement coverage
[52] Since its inception, Bianco has regarded only employees in the Pre-cast Division to be covered by the 2016 Agreement. The Concrete Products Award 2010, a modern award of the Commission, is applied to Bianco’s employees in the Structural Division and the Civil Division.
[53] There are four predecessor agreements to the 2016 Agreement. These are:
● the Bianco Walling Pty Ltd Enterprise Agreement 2001 (the 2001 Agreement) made under the Workplace Relations Act 1996 (Cth) (the WR Act);
● the Bianco Walling Pty Ltd Enterprise Agreement 2004 (the 2004 Agreement) made under the WR Act;
● the Bianco Walling Pty Ltd (Gepps Cross Site) Employee Collective Agreement 2008 – Off Site (the 2008 Agreement) made under the WR Act; and
● the Bianco Walling Pty Ltd (Gepps Cross Site) Enterprise Agreement 2011 – Off Site (the 2011 Agreement) made under the FW Act.
[54] The scope clause in the 2001 Agreement (clause 1.6) provided:
“This Agreement will apply in the State of South Australia to all employees of Bianco Walling Pty Ltd whilst they are performing on-site construction work as defined and covered by the National Building & Construction Industry Award 2000 and/or as defined and covered by the National Joinery and Building Trades Products Award 1993.”
[55] The scope clause in the 2004 Agreement (clause 1.6) provided:
“This Agreement will apply in the State of South Australia to all employees of Bianco Walling Pty Ltd whilst they are performing work as defined and covered by the National Joinery and Building Trades Products Award 2002.”
[56] The scope clause in the 2008 Agreement (clause 1.2) provided:
“This Agreement is between Bianco Walling Pty Ltd (Bianco) and employees that are engaged in work away from construction sites (ie, off-site) as labourers, panel makers, concrete finishers, crane drivers, riggers, carpenters and boiler makers at Bianco’s Gepps Cross facility (employees).”
[57] The scope clause in the 2011 Agreement (clause 1.2) provided:
“This Agreement is between Bianco Walling Pty Ltd (Bianco) and all employees that are engaged in the classifications contained in this agreement who work in Bianco’s concrete manufacturing operations, including the erection of these products on-site (employees).”
[58] The 2001 Agreement covered the division now referred to as Bianco’s Pre-cast Division as well as its on-site bricklaying business. The 2004 and 2008 Agreements covered only the division now referred to as Bianco’s Pre-cast Division.
[59] For current purposes I do not refer to the Bianco Walling Pty Ltd (On-Site) Enterprise Agreement 2011 as a predecessor to the 2016 Agreement, as its scope covered different categories of employees working at a client site and not at manufacturing operations conducted off-site at Gepps Cross or in installing pre-cast products.
[60] In relation to the predecessor agreements and in relation to the 2016 Agreement:
● with one exception, only employees in the Pre-cast Division had been notified of, participated in negotiations for, and voted on, each of the 2004, 2008, 2011 and 2016 Agreements (including its 2017 variation). The exception is that on-site installers and then scaffolders participated in making the 2011 and 2016 Agreements;
● no employee from either the Structural Division or the Civil Division sought to be included in negotiations for or voting on any of the predecessor Agreements or the 2016 Agreement or its 2017 variation;
● it was not until the CFMMEU claimed in 2017 that the 2016 Agreement applied to Bianco’s Structural Division that the possibility of it so applying became an issue for Bianco and its employees; and
● each of these agreements were made between Bianco and its employees. No employees were represented by an industrial association. No trade union sought to be covered by the agreements or be heard in proceedings for their approval.
Making and approval of the 2011 Agreement (Off Site)
[61] Bianco’s 2008 Agreement had covered workers at the Gepps Cross site (i.e. off-site employees). These were persons working in the Pre-cast Division (that then being the entirety of manufactured work performed on that site). By the time of negotiating the 2011 Agreement, Bianco had purchased the Structural Division and was in the process of relocating those employees from the (then) Kilkenny site to the Gepps Cross site. Because the move was impending, the coverage provision of the renegotiated off-site Agreement was amended.
[62] Bianco’s intention was that the amended coverage would not include Structural Division employees coming onto the Gepps Cross site but that, in addition to the (previously covered) Pre-cast Division, its coverage would include employees installing products manufactured by the Pre-cast Division.
[63] The 2011 Agreement was voted on by employees in the Pre-cast Division only (including installers).
[64] On 28 April 2011 Bianco’s representative lodged an application in the Commission for approval of the 2011 Agreement. Accompanying the application was a letter “setting out undertakings our member will make in relation to the agreement.” 13 The letter, under Mr Corbo’s hand, read:
“Dear Registrar,
Reference: Bianco Walling Pty Ltd (Gepps Cross Site) Enterprise Agreement 2011 - Off Site
Attached with this letter is our application for approval of the above agreement. In finalising our application, we identified some irregularities.
Firstly, this agreement does not expressly note that the agreement applies to employees who are engaged in pre-cast concrete manufacture and installation in the building and construction sector. It does not apply to persons engaged in pre-cast concrete manufacture in other sectors, such as civil construction. I note that employees in that part of the business were not part of the balloting process for the agreement.
Secondly, there is a reference to the Australian Fair Pay and Conditions Standard in clause 16.1. This was not amended in the draft agreement from the former agreement.
On that basis, the Company provides the following undertakings to support the approval
of this agreement:
1. This agreement shall apply to employees engaged in the classifications contained in this agreement who are engaged in the manufacture and installation of concrete products in general building and construction, as defined in the Building and Construction Industry General Onsite Award
2. References to the Australian Fair Pay and Conditions Standard will be read to mean the National Employment Standards.
I trust the above information provides you with sufficient information to approve our
application but if you require any further information, please contact Tom Earls to
discuss.
Yours sincerely
Joe Corbo
Chief Financial Officer”
[65] On 5 May 2011 the 2011 Agreement was approved by the Commission. 14
[66] Later that day, Bianco’s representative wrote to the Commission: 15
“Was the agreement approved with or without those undertakings?
It is our view that the undertakings will assist in the future interpretation of the agreement and to avoid any doubt about its scope of operation.”
[67] The Associate to the relevant Commission Member replied: 16
“I have spoken with the [Senior Deputy President] who confirmed to me that the agreement was approved without the undertakings proposed.
The SDP advised that the capacity to seek undertakings arises from s.190 of the FW Act such that Fair Work Australia may seek an undertaking if it is concerned that the agreement does not meet the requirements set out in ss.186 and 187.
The SDP advised he considered that the scope of the agreement was clear and that he took no issue with the various and leave provisions.
The SDP has indicated that he does not now propose to incorporate the undertakings.
However, the undertakings, and this e‐mail will be retained in the FWA file.”
[68] Bianco’s adviser then informed Mr Corbo: 17
“Please see the email below. This should not be an issue. But if you want to do a variation to the agreement to make it clear, let me know.”
[69] Mr Corbo’s evidence 18 was that Bianco took no further action to incorporate the undertaking as the Commission had advised that it “considered the scope of the agreement clear” and the employer’s adviser had advised that “this should not be an issue”.
[70] Separately, a variation to the 2011 Agreement was made and approved in 2014. That variation (a pay-freeze) was a response to then financial difficulties faced by the business. It was made and approved without participation by employees in the Structural Division (who by that time had moved to the Gepps Cross site) or the Civil Division.
Making and approval of the 2016 Agreement
[71] On 9 August 2016, Bianco provided employees in the Pre-cast Division:
a) a Notice of Employee Representational Rights (NERR) under section 173 of the FW Act in relation to making the 2016 Agreement; and
b) access to a printed copy of the proposed 2016 Agreement and documents incorporated by reference;
[72] Bianco provided these documents to employees in the Pre-cast Division during a meeting at the Gepps Cross site on 9 August 2016. Before the meeting, audible to those present, Bianco’s management asked employees from other divisions to leave, telling them that there was to be a meeting about the Pre-cast Division employees’ enterprise agreement.
[73] The 2016 Agreement was largely a roll-over of the coverage of the 2011 Agreement except that Bianco had shortly prior to negotiations purchased a scaffolding company. Employees of that (scaffolding) business assisted on-site installers (who in 2011 had been included in coverage of the 2011 Agreement). The coverage clause of the proposed (rolled-over) 2016 Agreement had the words “and the installation of props and frames (employees)” added, and a scaffolder classification included.
[74] A meeting (or meetings) with the installers was held on or around 9 August 2016 where the same documents relating to the proposed 2016 Agreement were given to employees. Mr Corbo’s recall was unclear as to the number of meetings held with installers and whether they occurred on-site or off-site. Little turns on those details. I am satisfied that installers were included in discussions and the subsequent vote.
[75] Whether and when Bianco also provided Pre-cast Division employees and installers a document explaining the proposed Agreement and a notice of the intended time and place of the ballot and voting method is less clear from Mr Corbo’s evidence, though employees were on 9 August 2016 or some time shortly thereafter provided balloting details.
[76] On 2 September 2016, Bianco conducted a ballot of 85 employees in the Pre-cast Division and its on-site installers (including scaffolders). Seventy-two employees cast a valid vote and 70 voted to approve the 2016 Agreement.
[77] The total number of Bianco’s employees in all three of its divisions in September 2016 was approximately 130.
[78] On 14 September 2016, Bianco applied to the Commission under section 185 of the FW Act for approval of the 2016 Agreement. The application was supported by a statutory declaration by Mr Corbo in which he declared (relevantly):
● the 2016 Agreement covers all persons engaged under the terms of the “Bianco Walling Pty Ltd (Gepps Cross Site) Enterprise Agreement 2011 – Off Site”;
● the primary activity of Bianco is “pre-cast concrete manufacture and installation”; and
● 85 employees would be covered by the 2016 Agreement.
[79] The Commission approved the 2016 Agreement under section 186 of the FW Act on 31 October 2016. 19
[80] On 25 September 2017, a variation to the 2016 Agreement was approved in like manner. 20
Consideration
Legal principles
[81] Section 217 of the FW Act provides:
“217 Variation of an enterprise agreement to remove an ambiguity or uncertainty
(1) The FWC may vary an enterprise agreement to remove an ambiguity or uncertainty on application by any of the following:
(a) one or more of the employers covered by the agreement;
(b) an employee covered by the agreement;
(c) an employee organisation covered by the agreement.
(2) If the FWC varies the enterprise agreement, the variation operates from the day specified in the decision to vary the agreement.”
[82] Having regard to the Court decision, I apply the following approach to the task required by section 217:
● the task is not one of interpretation of the 2016 Agreement in the sense of determining its “true meaning” or the “single correct meaning” of clause 1.2 of the 2016 Agreement. 21 The task is to determine whether a relevant ambiguity or uncertainty exists;
● whilst principles applying to the construction of enterprise agreements may be relevant, they are not to be strictly applied. 22 Factors to be taken into account include those referenced in section 578 of the FW Act such as the objects of the FW Act and equity, good conscience and the merits of the case.23 Evidence of surrounding circumstances including common intention or objectively established past or current practice is relevant in making the required evaluative assessment;24
● the Commission should endeavour to find the industrial purpose behind the disputed provision. This involves a consideration of the meaning of the relevant provision in context having regard to the words used by those who made the Agreement and their mutual intention (if any) at the time the Agreement was made 25; and
● the terms “ambiguity’ and ‘uncertainty” have different meanings, and each must be considered. 26
Is there Ambiguity or Uncertainty?
The Agreement
[83] Though the task is not one of construction, the words used in the Agreement are relevant, both in the context of the relevant clause and in the context of the Agreement as a whole.
[84] Clause 1.2 of the 2016 Agreement reads as follows:
“This Agreement is between Bianco Walling Pty Ltd (Bianco) and all Bianco employees that are engaged in the classifications contained in this agreement who work in Bianco’s concrete manufacturing operations, including the erection of these products on-site and the installation of props and frames (employees).”
[85] All words in an enterprise agreement must prima facie be given some meaning and effect. 27 This should “contribute to a sensible industrial outcome” and one “that will operate fairly towards both parties.”28
[86] Is clause 1.2 either as a whole or the particular phrase “Bianco’s concrete manufacturing operations” ambiguous or uncertain?
[87] Enterprise agreements are to be considered according to well-accepted principles long settled in the industrial context. 29 Those principles include the rejection of “narrow or pedantic approaches” and a recognition that provisions of an agreement (or award) are to be approached recognising that those who draft such provisions are likely to have “a practical bent of mind” and are “more concerned with expressing an intention in ways likely to have been understood in the context of the relevant industry and industrial relations environment than with legal niceties or jargon.”30
[88] I consider these observations relevant to the task required by section 217 of the FW Act.
[89] The phrase “concrete manufacturing operations” has, on one reading, a plain meaning: business operations in which concrete products are manufactured.
[90] However, concrete products are manufactured in each of Bianco’s three divisions. What is not express on the face of clause 1.2 is whether the “concrete manufacturing operations” referred to relate to one or other or all of Bianco’s operating divisions that manufacture concrete products.
[91] Further, as noted by the Court, it is an “obvious possibility” 31 that if a common intention that clause 1.2 applies to the Pre-cast Division only (considered below), then an alternative exists “namely, that the phrase was used in the agreement with a special meaning or at least a particular meaning understood by the parties to it”32.
[92] In deciding whether an ambiguity or uncertainty exists, clause 1.2 should also be read in the context of the Agreement as a whole.
[93] Relevantly, clause 2.1(b) of the Agreement provides:
“2.1 All employees are expected to:
(a) …
(b) Be prepared to travel to the various worksites where Bianco is building
(c) …”
[94] Only employees in Bianco’s Pre-cast Division engaged in on-site installation are required to travel to worksites at which Bianco clients are undertaking building work. This is a fact not displaced by the additional evidence before me.
[95] Given that, and as noted by the Court, clause 2.1(b) is capable of supporting an inference “that the 2016 Agreement, being the successor of the 2008 and 2011 Agreements, did not apply to employees in the Structural Division.” 33
[96] Also relevant is the final phrase of clause 1.2 “including the erection of these products on-site and the installation of props and frames (employees)”. I accept Bianco’s submission that the word “these” in this phrase is capable of establishing a link back to the products installed on-site (those being products only manufactured by the Pre-cast Division). Accordingly, I conclude that the final phrase of clause 1.2 also supports drawing this inference and the construction advanced by Bianco.
[97] I do not accept the CFMMEU’s submission that these are words of limitation. They contemplate on-site work by persons covered by the Agreement. When read in the context of clause 2.1(b) and the fact that employees in the Structural Division or Civil Division do not travel to or install on-site, this phrase supports an inference that the 2016 Agreement does not apply to employees in the Structural Division or Civil Division.
[98] Of further relevance is the fact that Bianco’s communication to employees on 9 August 2016 indicated that “we are proposing to enter into a replacement enterprise agreement with you.” 34 The use of the word “replacement” is of significance. At that time, there was no enterprise agreement in existence which covered persons working in the Structural Division or the Civil Division. The only employees engaged in Bianco’s off-site concrete manufacturing operations who were covered by an enterprise agreement on 9 August 2016 were employees in the Pre-cast Division (and installers). The fact that the 2016 Agreement was proposed as a “replacement” agreement supports the inference.
[99] I draw the inference for the aforementioned reasons.
[100] Bianco submit that the classification structure in the 2016 Agreement also supports drawing the inference. I agree, but only in part. Bianco correctly submit that clause 1.2 expressly restricts scope of the 2016 Agreement to “employees that are engaged in the classifications contained in this agreement”.
[101] The classification structure of the 2016 Agreement is consistent with this inference but is not wholly inconsistent with alternatives. The specific classification of “Concrete Finisher” is consistent with the evidence that, due to differences in the manufactured product and their purpose, employees in the Pre-cast Division only “finish” those products whereas in the Structural Division employees may “patch” T-beam blemishes but do not apply the same “finish” to the final product. An architectural product (produced in the Pre-cast Division) is qualitatively different to a T-beam (produced in the Structural Division) and has a more sophisticated and polished finish.
[102] However, some, though not all, of the classifications in the 2016 Agreement are capable of applying beyond the Pre-cast Division. Even if persons working as a “Concrete Finisher” are only found in the Pre-cast Division, it is not necessary that all classifications in an Agreement operate in each unit of a business for that Agreement, at least conceptually, to cover multiple units.
[103] That said, the classification structure of the 2016 Agreement is consistent with the inference drawn.
[104] I do not consider Bianco’s further submission that the possessive noun “Bianco’s” in clause 1.2 is itself evidence of a special meaning. The possessive noun is capable of utility to the rival meanings advanced by both Bianco and the CFMMEU. That said, the use of the possessive noun is not inconsistent with the inference drawn.
Surrounding circumstances
[105] A finding of common intention that the 2016 Agreement does not apply to employees in the Structural Division would be a matter of weight in considering whether an ambiguity or uncertainty exists.
[106] Past practice as well as immediate past history of the 2016 Agreement is relevant to whether common intention is found. It is apparent from the findings of fact that:
● the 2008 Agreement’s scope was restricted to the “Gepps Cross facility” but that the 2011 and 2016 Agreements were not so expressed;
● at the time of making the 2008 and 2011 Agreements only concrete manufacturing by the Pre-cast Division was conducted at the Gepps Cross site;
● the phrase “who work in Bianco’s concrete manufacturing operations” was first included in the 2011 Agreement and retained in the 2016 Agreement;
● the phrase “including the erection of these products on-site (employees)” was first used in the 2011 Agreement and then varied by the 2016 Agreement to add the words “including the erection of these products on-site and the installation of props and frames (employees)”; and
● to varying degrees, the scope clauses of each of the 2004, 2008, 2011 and 2016 Agreements differed from its predecessor.
[107] The evidence clearly establishes Bianco’s belief at the time of making the 2011 and 2016 Agreements that the phrase “Bianco’s concrete manufacturing operations” in those Agreements was intended by the company and as far as it understood, the relevant employees, to be a reference only to the pre-cast concrete panels and products manufactured in Bianco’s Pre-cast Division. Bianco’s conduct in making the 2011 and 2016 Agreements and during the life of those Agreements was consistent with that belief, whether it was conduct and communication with its employees (including the instruments upon which it paid wages), communication with its advisers, or in materials lodged with the Commission for approval of the 2011 and 2016 Agreements and their variations.
[108] Much of the additional evidence produced in the redetermination proceedings provides insight into Bianco’s internal deliberations when making the 2011 Agreement (and also the 2011 On-site Agreement). With respect to the 2011 Agreement, this evidence (documentary and oral) is consistent with and points strongly to the proposition that the 2011 Agreement was not intended to apply to the newly acquired Structural Division. This includes the undertaking Bianco proffered to the Commission in 2011. Whilst ultimately the undertaking was not incorporated as a term of the agreement (as, upon approval, the Commission did not require its incorporation), it is evidence of the employer’s intent and a desire on Bianco’s part to give clarity to that intent. Considered alone though, it is not evidence of common intention as there is no evidence before me that the undertaking was sent to the Commission with the knowledge of the relevant employees.
[109] I take into account that “common understanding” 35 is a “limited principle”36 and “only capable of application where there is clear evidence of a common understanding as to the meaning of the provision and that the parties did not act for another reason, including common inadvertence”37.
[110] A singular belief held by an employer is not itself evidence of common intention.
[111] The evidence concerning the making of the 2016 Agreement supports a conclusion that a common understanding existed between Bianco and employees covered by the 2016 Agreement such that the Agreement applied only to the Pre-cast Division and not to the Structural Division or Civil Division. The evidence includes:
● Mr Scalzi’s evidence that only Pre-cast Division employees were involved in negotiation of the 2016 Agreement and its 2017 variation, and that employees in the Structural Division were not involved in those negotiations or in making the 2011 Agreement. Mr Scalzi had worked in the Pre-cast Division for approximately 12 years;
● Mr Martin, an employee then working in the Structural Division, gave evidence that he knew that discussions were occurring in 2016 and 2017 between the employer and Pre-cast Division employees about the Agreement and its variation but that neither he nor other Structural Division employees were involved in those discussions;
● Mr Corbo’s evidence that employees of the Structural Division were not invited to discussions about the making of the 2016 Agreement. Whilst he could not exclude the possibility that an employee from another unit remained in the room during the bargaining meeting on 9 August 2016 (as no attendance record was taken), only Pre-cast Division employees had been asked to remain behind;
● the NERR issued in 2016 described the group of employees for the purpose of the proposed agreement (“employees that are covered” by the 2011 Agreement) 38. Though inaccurate in one respect (it omitted installers that were to be covered by clause 1.2), it did not include the Structural Division or Civil Division. Each employee who received the NERR did so on the basis of the coverage it advised. That coverage was not the Structural Division or Civil Division. This permits an inference to be drawn of common intention that the group of employees who made the 2016 Agreement were the group exclusively intended to be covered by it39;
● Structural Division employees knew that discussions were occurring between Bianco and employees in the Pre-cast Division about their Agreement in both 2016 and 2017 and were not involved in those discussions nor did they seek to be so involved;
● not having been included in the NERR or involved in the relevant discussions, employees of the Structural Division or Civil Division did not vote on the 2016 Agreement. As the disputed clause deals with coverage, those who voted on the agreement is a relevant fact in determining whether common intention as to coverage existed; and
● that the CFMMEU, the party contending for an alternate construction of clause 1.2, was not involved in negotiation of the 2016 Agreement (or its predecessors) or its variation, nor covered by it.
[112] I take into account that a diversity of interests is involved in making enterprise agreements. This warrants a cautious approach to evidence of positions advanced during negotiations. 40 I do not make a finding of common intention based on positions advanced in negotiations. I do so on the basis of an objective assessment of conduct and the history of the 2016 Agreement and its predecessors, and on the basis of inferences reasonably drawn.
[113] That history includes the fact that employees in the Structural Division and Civil Division were not involved in making the 2011 Agreement nor the 2014 variation. The manner in which the 2011 Agreement was applied is also relevant; it was applied only to employees in the Pre-cast Division. The making and manner in which the 2011 Agreement applied is of particular significance for two reasons. Firstly, it was the immediate predecessor to the 2016 Agreement. Secondly, it was the 2011 Agreement which first used the phrase “concrete manufacturing operations” in its scope. In large measure, the 2016 Agreement carried forward (rolled-over) the scope expressed in the 2011 Agreement. This phrase was carried over, unaltered.
[114] Conduct by those covered during the life of the 2016 Agreement also supports a conclusion of common intention. Bianco has at all relevant times (including during the life of its predecessor, the 2011 Agreement) applied the Agreement only to employees in the Pre-cast Division.
[115] Further, when Bianco and its employees agreed in 2017 to vary the 2016 Agreement, that variation was made (and approved) only by reference to employees in the Pre-cast Division (and installers and scaffolders).
[116] Based upon relevant surrounding circumstances and having drawn the aforementioned inference I conclude that a common intention existed between Bianco and the group of employees who made the 2016 Agreement that it apply only to Bianco’s Pre-cast Division (including installers and scaffolders of products manufactured by that Division) and not apply to employees in Bianco’s Structural Division or Civil Division.
Conclusion
[117] Without being exhaustive, the ordinary meaning of “ambiguity” includes the existence of a doubtful or equivocal meaning, or imprecision or vagueness in content or expression. The ordinary meaning of “uncertain” includes something not definitively or surely known or which gives rise to reasonably formed doubt. 41
[118] In the context of section 217 of the FW Act, an agreement may be ambiguous or uncertain if susceptible to more than one meaning or if its meaning is not clear. 42 This involves a consideration of the relevant terms of the agreement having regard to their ordinary meaning in the context of the agreement as a whole.43 The Commission will generally err on the side of finding an ambiguity or uncertainty where there are rival constructions advanced and an arguable case is made out for more than one contention44.
[119] As noted by the Court, the existence of common intention is a “strong indicator” 45 that the 2016 Agreement may be ambiguous or uncertain. Whilst overlap exists between the terms “ambiguity” and “uncertainty” it is at least arguable that the term “uncertainty” extends beyond a consideration of language and context into uncertainty in application arising from an ambiguity.
[120] An instrument can only have one proper lawful meaning. It is that lawful meaning which those covered by it are required to observe. Ultimately it is for a court of competent jurisdiction, and not the Commission, to determine that meaning and enforces consequential rights and obligations. However, where two rival meanings are reasonably open, that may support a conclusion under section 217 of the FW Act that there is an ambiguity or uncertainty.
[121] Undoubtedly there is dispute between Bianco and the CFMMEU over the meaning and application of clause 1.2 evidenced by the fact that two rival interpretations are advanced in this proceeding. However, the mere existence of a disputed interpretation is not sufficient to render words in an industrial instrument uncertain or ambiguous as such a contention may well be self-serving. 46 That conclusion can only be made upon an objective examination of the clause in the context of the instrument as a whole and other relevant circumstances.47
[122] Having examined the 2016 Agreement in the context of the evidence now before me, and applying the principles applicable to section 217 as outlined by the Court, I am satisfied that clause 1.2 is, at the very least, susceptible to more than one meaning. There is, in the words of the Court, an “obvious possibility” 48 that two alternate meanings exist:
1. that the phrase “Bianco’s concrete manufacturing operations” in clause 1.2 applies to each and every division of Bianco in which a concrete product is manufactured; or
2. that the phrase is used in clause 1.2 with a special meaning (or at least a particular meaning understood by the persons who made it) namely, that it means concrete manufacturing operations in the Pre-cast Division only.
[123] There being two alternate meanings objectively found, this supports the conclusion that an ambiguity exists within the meaning of section 217 of the FW Act.
[124] In this matter, I have also found a clearly established misalignment between common intention and one of the reasonably open alternate meanings of clause 1.2 (the meaning advocated by the CFMMEU).
[125] Leaving aside whether the contested clause has a special meaning, one of the plausible rival meanings is based not just on language but also objectively found surrounding circumstances (common intention and past practice) – that it was not intended to cover concrete products manufactured beyond the Pre-cast Division. Given the significance a scope clause has to the operation of an agreement, this misalignment leads to the conclusion that the 2016 Agreement is uncertain in the sense contemplated by section 217. Reasonably available competing conclusions exist with obvious practical consequences for determining rights and obligations of the employer and relevant employees.
[126] For these reasons I conclude that the 2016 Agreement, and in particular clause 1.2, is both ambiguous and uncertain.
Should the discretion be exercised?
[127] A finding of ambiguity or uncertainty in an enterprise agreement is a condition precedent for the exercise of power under section 217. 49
[128] That condition precedent is satisfied.
[129] However, it does not automatically follow that because the relevant jurisdictional fact(s) are established, that the discretion to remediate the ambiguity or uncertainty must be exercised. 50
[130] Is it appropriate to do so having regard to the overall circumstances?
[131] An enterprise agreement made and approved under the FW Act has legal force. It is an instrument of significance. It binds those covered by it. The rights and obligations created are matters of substance – wages and conditions of employment. Their legal efficacy arises under statute no less, not simply by private contract. 51 In this matter, the clause in question is not peripheral or incidental. It is one of central importance. Given the instrument’s binding nature, it is desirable that certainty exists as to who is covered and on what terms.
[132] These factors weigh in favour of exercising discretion to remove the ambiguity or uncertainty.
[133] Weight should also be given to the industrial context in which the ambiguous or uncertain terms were created. The instrument is not the result of a legal determination or arbitration. It is the product of collective bargaining between a private business and private individuals voting by ballot. Those covered are likely to have had a practical bent of mind focused more on the industrial relations environment than with legal niceties or jargon. 52 In making their agreement a meeting of minds arose between Bianco and the group of employees who made it. The rights and obligations each intended were reflected in language. Whether the language used accurately reflected common intent is a product of its adequacy. Given the practical bent of mind associated with making collective agreements, it should not be considered unusual that a collective agreement may contain an ambiguity or uncertainty. By enacting section 217, the legislature has contemplated such a scenario and provided a solution. It has conferred upon the Commission a discretionary power to vary an enterprise agreement to remove an ambiguity or uncertainty that exists.
[134] In this matter, the finding of common intent also weighs in favour of exercising the discretion. If the ambiguity or uncertainty is not rectified, it exposes Bianco and its employees to potential coverage of the 2016 Agreement that is different to (and broader than) their common intent. That would not be consistent with the orderly conduct of industrial relations:
● allowing an agreement to operate with an established but uncured ambiguity or uncertainty is capable of giving rise to industrial disputes and litigation;
● the ambiguity or uncertainty that has been established is not minor or incidental to the operation of the 2016 Agreement. It concerns a clause of importance – a clause determining who is covered by the instrument;
● given past and current practice, if broader coverage exists, Bianco would be required to alter terms and conditions of employment of employees in the Structural Division and Civil Division in circumstances where those employees were neither involved in making the 2016 Agreement nor heard on its approval (including the 2017 variation); and
● for employees in the Pre-cast Division the inclusion of a group of employees not intended to be covered would be a material change to the basis on which they negotiated and made the Agreement in 2016 and its 2017 variation.
[135] Further, Bianco could be exposed to potential disputes and claims about alleged non-observance of the 2016 Agreement by employees in the Structural Division or Civil Division in circumstances where neither Bianco nor the employees who made the 2016 Agreement intended that outcome.
[136] None of these consequences are consistent with the framework for collective bargaining set by the objects of the FW Act generally (section 3(f)) or Part 2-4 specifically. 53
[137] The statutory framework for making enterprise agreements is an orderly one. It is predicated on employees individually and collectively being able to participate in the negotiation or re-negotiation of agreements with potential impact upon them, to do so fully informed (including with respect to representation rights and intended coverage), to be part of a group to be covered which has been fairly chosen, to participate in collective decision-making whether to take protected action, to be able to vote without interference in favour or against a proposed agreement or its variation, and directly or via their representatives be able to be heard in proceedings for approval.
[138] In this matter, a failure to give effect to the common intent would be not be consistent with the orderly framework for collective bargaining nor “fair” within the meaning of section 3(f) or section 171(a) of the FW Act.
[139] Further, an unintended expansion of coverage is also capable of affecting Bianco’s operations or its actual or projected labour costs under the Agreement thus potentially impacting “productivity benefits” which the collective bargaining framework promotes. 54
[140] The common intent I have found has been well-established over many years. It has existed since at least 2011, six years prior to the employer being notified of an alternate view advanced by the CFMMEU acting on behalf of two former employees in the Structural Division who claim coverage.
[141] In combination, these are significant factors that weigh in favour of exercising discretion to remedy the ambiguity and uncertainty.
[142] There are however some factors which weigh against the exercise of the discretion:
● the 2016 Agreement has almost reached its nominal expiry. 55 That being so, it is already open to Bianco or its employees (including their representatives) to exercise statutory rights to re-negotiate a fresh enterprise agreement that does not have ambiguous or uncertain coverage;
● in proceedings for approval of the 2011 Agreement, Bianco sought but did not secure incorporation of its undertaking (limiting coverage to the Pre-cast Division and installers);
● in the 2016 re-negotiation of the 2011 Agreement and approval proceedings, Bianco could have sought to make express the common intention (by expressly limiting coverage to the Pre-cast Division and installers);
● in neither the negotiation nor approval of the 2017 variation or by seeking other variation, did Bianco seek to make express the common intention (by expressly limiting coverage to the Pre-cast Division and installers);
● the 2016 re-negotiation of the 2011 Agreement involved no significant to-and-fro bargaining. The employer submitted a roll-over proposal it had drafted and the relevant employees had time, but only limited time (24 days) to consider the proposal prior to a vote. Whilst it is not necessary to invoke the contra proferentem rule 56 (this being a contractual doctrine), this factor weighs against exercising the discretion; and
● declining to make orders under section 217 would not have the immediate effect of altering Bianco’s current practice. It would simply allow claims by current or past employees in the Structural Division or Civil Division to be brought before a court and tested against what a court would determine to be the correct meaning of the 2016 Agreement.
[143] I have considered these matters. I conclude that the factors in favour of exercising discretion to remedy the ambiguity or uncertainty weigh significantly more strongly than those against that course:
● having found the existence of an ambiguity or uncertainty of material significance it is prima facie fair and proper to exercise powers under section 217 of the FW Act to vary the agreement to cure the ambiguity or uncertainty, insofar as possible;
● leaving the ambiguity or uncertainty to be resolved by future collective bargaining invites unnecessary disputation (legal or industrial) over a matter which is and has been the subject of common intention since 2011 and would result in bargaining taking place on an ambiguous and uncertain foundation;
● it is speculative as to the outcome of collective renegotiation of the 2016 Agreement and whether the ambiguity or uncertainty would in fact be removed;
● even were the 2016 Agreement renegotiated on terms that cured the ambiguity or uncertainty, any fresh agreement would only have prospective effect 57 and could not address the current ambiguity and uncertainty impacting the present or past determination of rights and obligations of Bianco and its employees;
● the 2011 Agreement was approved by the Commission in circumstances where Bianco was advised by an officer of the Commission that the undertaking it proffered was not incorporated and the approving Member “considered that the scope of the agreement was clear”. Whilst this communication did not represent a decision of the Commission let alone provide an explanation of what was considered “clear”, it provided a reasonable basis for Bianco to consider that pursuing its undertaking was unnecessary (noting that undertakings on different issues were proffered in 2016 and incorporated);
● in circumstances where a common intent existed between it and its employees since 2011, and in circumstances where the 2011 Agreement had been approved without recourse to the undertaking and no then known dispute existed over the common intention, it was not unreasonable for Bianco to not seek to renegotiate this part of clause 1.2 during subsequent negotiations for the 2016 Agreement or its 2017 variation; and
● the objectively ascertained mutual intention of the parties at the time the 2016 Agreement was made is a “significant factor.” 58 Having ascertained that intention, it would be unusual for other considerations to weigh in favour of a variation that was inconsistent with the intention of the parties.59
[144] For these reasons and having regard to the overall merits (section 578 of the FW Act), it is appropriate to exercise discretion to vary the 2016 Agreement to remove, insofar as possible, the ambiguity or uncertainty.
[145] Bianco advance a further basis on which the discretion should be exercised. It submits that a failure to cure the ambiguity and uncertainty could have significant consequences for the lawfulness of the 2016 Agreement. The hypothesis it advances is as follows: should coverage of the 2016 Agreement be broader than the group of employees involved in its making, the 2016 Agreement is at risk of being set aside on the ground that it was not “genuinely agreed” by employees covered, as required by section 188 of the FW Act.
[146] I do not determine this matter on that basis. It involves hypothesis and assumption. Whilst an approved agreement may be open to collateral attack and set aside in some circumstances 60, such a consequence, if it were to arise, would be dependent on subsequent proceedings (if any) and orders of courts. The prospects are too speculative for this to be a reliable basis for decision-making in this matter.
Remedy
What remedy is appropriate?
[147] Having determined it appropriate to vary the 2016 Agreement, I now consider the terms of the variation.
[148] Bianco seeks an order deleting the phrase “concrete manufacturing operations” in clause 1.2 and inserting in lieu the words “Pre-cast division”.
[149] I consider that the variation sought would, insofar as possible, remove the ambiguity or uncertainty and be consistent with the common intention of Bianco and the group of employees who made the Agreement.
[150] I will make an order in the terms sought.
Should the variation be retrospective?
[151] I now turn to whether the order should be prospective or retrospective.
[152] There is a well-established principle against decisions and orders of courts and administrative bodies being retrospective. Retrospectivity has obvious potential to cause significant prejudice given that it displaces, alters or extinguishes previously existing and lawfully established rights and obligations relied upon or capable of being relied upon by affected persons. It is only where it is necessary to do so “in the interests of justice and fair play” 61 that decisions or orders should apply retrospectively. That there is power to do so with respect to section 217 matters is clear.62
[153] I am satisfied that the overall circumstances before me meet this threshold.
[154] Bianco made this application on 27 November 2017. Retrospectivity to the date of operation of the 2016 Agreement (7 November 2016) would be for a period of some twelve months prior to the commencement of these proceedings. In light of their lengthy history, it would now be a net period of almost four years from the date of order.
[155] Bianco’s submission in support of retrospectivity should not be prejudiced by the fact that proceedings on this application have occupied almost three years. Bianco has not been dilatory in prosecuting its claim. The lapse of time has been a consequence of the orderly conduct of first instance proceedings, the exercise of its lawful rights to appeal the first instance decision and then seek judicial review of both the first instance and full bench decisions and the conduct of redetermination proceedings.
[156] I do not accept the CFMMEU’s submission that Bianco failed to appropriately advance its case in 2018 by not adducing all the historical evidence now before the Commission. This is a redetermination required by the Court. Consequent on the Court decision, it was open to both Bianco and the CFMMEU to delve deeper into evidence concerning the making and approval of the predecessors to the 2016 Agreement. Whilst an additional body of evidence sourced from both Bianco’s records and the Commission archive is now before me, the absence of that depth of evidence in 2018 is not a basis to refrain from exercising the discretion or do so on a retrospective basis.
[157] There are two compelling reasons why the order should have retrospective effect:
● the variation gives effect to a pre-existing and currently held common intention by Bianco and the group of employees who made the instrument; and
● the potential prejudice to Bianco should a variation not be retrospective outweighs potential prejudice to employees outside that group should the variation be retrospective.
[158] The ambiguity and uncertainty to be removed is not simply the product of a technical argument about words. It is in part the product of a finding of common intention between Bianco and the group of employees who made the 2016 Agreement. I have found that common intention existed since the date of commencement of the Agreement. It existed during the life of the predecessor 2011 Agreement.
[159] This is a compelling factor. It is fair and appropriate to make the order retrospective so that the period of time during which the 2016 Agreement has operated parallels the period that the common intention has existed. Such an approach is consistent with prior decisions of the Commission. 63
[160] There is potential prejudice to Bianco should the variation not be retrospective. Given the court proceedings now commenced against it, there is cost and uncertainty associated with establishing past rights and the assessment of existing rights. Claims by current or former employees in the Structural Division or Civil Division would involve at the very least cost, expense and litigation uncertainty.
[161] Weighing against this is potential prejudice to employees in the Structural Division or Civil Division who have or may assert rights under the 2016 Agreement but who have not worked in the Pre-cast Division. This includes at least two former employees in the Structural Division on whose behalf the CFMMEU has brought this issue to Bianco’s attention. 64 In respect of the first employee (Mr Goulding), proceedings were issued in the South Australian Employment Tribunal in April 2019 for monetary sums. Those proceedings have been adjourned pending determination of this application.
[162] With respect to the second employee (Mr Cousins), the CFMMEU raised the issue with Bianco in March 2020. These two employees and any other past or present employee in the Structural Division or Civil Division who wish to make claims under the 2016 Agreement would have had the goal posts shifted should a retrospective variation be made. The terms of clause 1.2 would have changed, causing at the very least a reconsideration of their prospects of successfully pursuing a claim.
[163] I take this into account. However, those claims are yet to be determined by a court. They may or may not be merited. A retrospective variation interferes with an asserted right but not an established right. Further, if the claims are advanced it would be litigation conducted in the face of what I have found to have been a contrary common intention of the persons that made the 2016 Agreement: that the instrument was not intended to apply beyond the Pre-cast Division and those installing products manufactured in that division.
[164] In these circumstances, it cannot be said that the rights of persons who made the 2016 Agreement or were subsequently employed under it have or would have established and confirmed rights interfered with by an order of retrospectivity.
[165] In these circumstances, I consider it appropriate to make an order that the variation cover the period of the common intention. Such an approach places Bianco and employees who made the 2016 Agreement in the position they intended by their agreement. Neither the variation nor the date of operation are based on more general standards of industrial fairness or the rewriting of the Agreement to include something not inherent when it was made. 65
[166] I will order that the variation come into effect from 7 November 2016, being the date of operation of the 2016 Agreement.
Conclusion
[167] The Bianco Walling Pty Ltd (Gepps Cross Site) Enterprise Agreement 2016 – Off Site contains an ambiguity or uncertainty.
[168] It is appropriate to vary the Bianco Walling Pty Ltd (Gepps Cross Site) Enterprise Agreement 2016 – Off Site under section 217 of the FW Act to remove an ambiguity or uncertainty.
[169] The Order of the Commission is that the Bianco Walling Pty Ltd (Gepps Cross Site) Enterprise Agreement 2016 – Off Site be varied by deleting the phrase “concrete manufacturing operations” in clause 1.2 and inserting in lieu the words “Pre-cast Division”.
[170] The Order will operate from 7 November 2016.
[171] In conjunction with the publication of this decision I issue an Order 66 in these terms.
DEPUTY PRESIDENT
Appearances:
Mr C O’Grady QC with Mr B Avallone, with permission for Bianco Walling Pty Ltd T/A Bianco Precast
Mr P Russell for the Construction, Forestry, Maritime, Mining and Energy Union
(Redetermination) Hearing details:
2020
Adelaide (with video link to Melbourne)
13 July and 5 August
Final written submissions:
7 August 2020 - Supplementary submission of Construction, Forestry, Maritime, Mining and Energy Union
1 [2018] FWC 5823
2 [2019] FWCFB 161
3 [2020] FCAFC 50
4 Ibid [114]
5 Ibid [115]
6 A5, A6, A7 and A8: second, third, fourth and fifth Statements of Joe Corbo
7 A3: first Statement of Joe Corbo
8 R6, R7: first and second Statement of David Kirner
9 [2020] FWC 2995
10 PR720017
11 A1: Statement of Graham Martin; A2: Statement of Andrew Scalzi
12 [2020] FCAFC 50 at [15] to [40]
13 JC58 Email 28 April 2011 4.35pm
14 JC14 [2011] FWAA 2671
15 JC59 Email 5 May 2011 5.08pm
16 JC59 Email Associate to Senior Deputy President O’Callaghan to Tom Earls 6 May 2011 3.13pm
17 JC59 Email Tom Earls to Joe Corbo 9 May 2011 9.55am
18 A7 paragraph 9
19 JC37
20 JC18
21 [2020] FCAFC 50 at [72], [92] and [114]
22 Ibid [92]
23 Ibid [115(d)]
24 Ibid [115(c)]
25 Australian and International Pilots Association v Qantas Airways Limited[2014] FWCFB 8199 at [23]
26 Ibid [93]
27 AMWU v Berri Pty Limited (Berri) [2017] FWCFB 3005 at [44]
28 Amcor Limited v CFMEU (2005) 222 CLR 241 at 270 per Kirby J
29 Qantas Airways Ltd v Australian Licensed Aircraft Engineers Association (No 3) [2020] FCA 1428
30 Kucks v CSR Ltd 66 IR 182 at 184; see also Amcor Ltd v Construction, Forestry, Mining and Energy Union (2005) 222 CLR 241 at 270 per Kirby J
31 [2020] FCAFC 50 at [85]
32 Ibid
33 [2020] FCAFC 50 at [88]
34 A10
35 Transport Workers’ Union of Australia v Linfox Australia Pty Ltd [2014] FCA 829 at [36]
36 Shop, Distributive and Allied Employees’ Association v Woolworths Ltd [2006] FCA 616 at [31]
37 Liquor, Hospitality and Miscellaneous Workers Union v Prestige Property Services Pty Ltd [2006] FCA 11 at [44]
38 A10
39 CPSU v Telstra Corporation Ltd (2005) 139 IR 141 at [50]
40 Berri at [88]
41 Macquarie Dictionary 3rd edition
42 Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337 at 352 per Mason J; Re Beltana No 1 Salaried Staff Certified Agreement 2001 PR932468 at [23]
43 Glen Cameron Nominees Pty Ltd v Transport Workers Union of Australia[2018] FWCFB 3744
44 Re Tenix Defence Systems Pty Limited Certified Agreement 2001 – 2004 PR917548 at [32]; Re Beltana No 1 Salaried Staff Certified Agreement 2001 PR932468 at [23]; Re Victorian Public Transport Enterprise Agreement 1994 Print M2454 page 4
45 Ibid [71]
46 Ibid [49] citing SJ Higgins Pty Ltd v CFMEU Print PR903843 at [7]
47 Amcor Limited v CFMEU (2005) 222 CLR 241 at 246
48 [2020] FCAFC 50 at [85]
49 CFMMEU v Macmahon Contractors Pty Ltd[2018] FWCFB 4429 at [11]
50 CPSU v Telstra Corporation Ltd (2005) 139 IR 141 at [41]
51 Toyota Motor Corporation Australia Limited v Marmara [2014] FCAFC 84 at [89]
52 Kucks v CSR Ltd 66 IR 182 at 184
53 Section 171(a) and (b) FW Act
54 Section 171(a) FW Act
55 30 October 2020
56 CFMMEU (Maritime Union Division) v Transdev Brisbane Ferries Pty Ltd[2018] FWC 3421 at [12] to [18]
57 Section 54(1) FW Act
58 Re Australian and International Pilots Association (2007) 162 IR 121 at [17]
59 CPSU v Telstra Corporation Limited (2005) 139 IR 141 at [48]
60 One Key Workforce Pty Ltd v Construction, Forestry, Mining and Energy Union [2018] FCAFC 77
61 Warramunda Village Inc v Pryde [2002] FCA 250 at 50
62 Aged Care Services Australia Group Pty Ltd v Health Services Union & Australian Nursing and Midwifery Federation[2017] FWCFB 2806 at [22]
63 For example, Re MS Security Aviation Qld Enterprise Agreement 2014-2017[2016] FWCA 2774 and [2016] FWCFB 4979 at [22] – [24]; Aged Care Services Australia Group Pty Ltd v Health Services Union & Australian Nursing and Midwifery Federation[2017] FWCFB 2806 at [23]; Re Coles Myer Logistics Pty Ltd National Union of Workers Woodlands 2002 Agreement PR934488 at [72]
64 R6 DK1 and DK2
65 Re Australian and International Pilots Association[2007] AIRC 3030 at 17; Re Qantas Airways Limited Flight Crew (Short Haul) Workplace Agreement 2007 PR550766 at [9]
66 PR723922
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