Bridge and Civil Pty Ltd

[2020] FWCA 5743

[2020] FWCA 5743

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.217—Enterprise agreement

Bridge and Civil Pty Ltd
(AG2020/3017)

BRIDGE AND CIVIL ENTERPRISE AGREEMENT 2018 - 2021

Building services
DEPUTY PRESIDENT MASSON	MELBOURNE, 4 NOVEMBER 2020

Application for variation of the Bridge and Civil Enterprise Agreement 2018 - 2021.

[1] Bridge and Civil Pty Ltd (the Applicant) has made an application pursuant to s 217 of the Fair Work Act 2009 (the Act) to vary the Bridge and Civil Enterprise Agreement 2018 – 2021 (the Agreement) to remove ambiguity or uncertainty. The Applicant is the employer party to the Agreement and there are no unions covered by the Agreement.

[2] The Agreement was approved by the Commission on 9 April 2019 and commenced operation on 17 April 2019.

[3] Directions were issued on the 14 October 2020, requiring that the Applicant provide employees covered by the Agreement with the s.217 Application, the Directions and any supporting material by 19 October 2020. Those employees were then given 7 days from receipt of that material to provide any views to my Chambers.

[4] The Applicant filed a statutory declaration on 27 October 2020 prepared by its Corporate Services Director - Ms Olivia Bartolo 1 confirming the Respondent’s compliance with the Directions. Attached to Ms Bartolo’s statutory declaration were emails from affected employees indicating support for the proposed changes. No other submissions or materials were filed with the Commission by any affected employees of the Respondent.

Applicant’s case

[5] The Applicant submits that an ambiguity or uncertainty exists with respect to the maximum daily hours worked as provided for at clause 14.1 of the Agreement. Clause 14.1 states as follows;

“14.1 Except as provided in Clause 16, Shift Work, the ordinary hours of work are worked from Monday to Saturday between the hours of 6.00am and 6.00pm. The ordinary hours of work for full time Employees are an average of 38 hours per week. However, Employees may be required to work up to a maximum of fifty (50) ordinary hours per week. Employees agree that working these additional ordinary hours is reasonable.”

[6] The Agreement which was approved by Commissioner Riordan on 10 April 2019 does not expressly provide for the daily maximum ‘ordinary hours’ an employee may work, and only provides for the maximum weekly hours, being 50 ‘ordinary hours’ per week, that may be required to be worked.

[7] Clause 4.3 of the Agreement provides that where the Agreement is silent or does not provide for terms of conditions of employment that would otherwise apply under the Building and Construction General On-site Award 2010 2 (the Award), the relevant Award terms and conditions will apply. Clause 33 of the Award provides that the ordinary working hours will be 8 hours each day.

[8] According to the Applicant the Agreement contains an ambiguity or uncertainty in that no express maximum daily ‘ordinary hours’ are prescribed, but a maximum number of weekly ‘ordinary hours’ is prescribed (50) which is greater than the number of ‘ordinary hours’ that could be worked if the Award maximum daily ordinary hours were called-up. That is, the Award maximum daily hours are 8 and may be worked over six days under the Agreement, creating a maximum of 48 ordinary hours, when the Agreement expressly provides for a maximum of 50 ‘ordinary hours’ per week. The Applicant submits that the text of the Agreement does not resolve the ambiguity and there remains uncertainty in how the Agreement’s hours of work provisions regarding maximum daily ‘ordinary hours’ operates.

[9] According to Mr Shannon Drew (Senior Project Manager) who was involved in the negotiation of the Agreement, at the time the Agreement was made, the parties’ intention was that the Agreement would operate so as to allow the applicant to roster employees up to a maximum of 10 ‘ordinary hours’ a day, for 38 ‘ordinary hours’ per week on average, but with the ability to require a maximum of 50 ‘ordinary hours’ per week if required. 3

[10] According to Mr Drew, employees during bargaining expressed a preference for working ordinary hours on Monday to Friday and to be home on weekends, instead of having to attend for work on weekends and afterhours for overtime to make up a similar amount of pay. 4 Mr Drew goes on to state that the common intention of the parties during bargaining was that a week’s work would be able to be completed more intensively with ‘ordinary hours’ paid for at a higher loaded rate, leaving employees with more pay and their weekends free with no need to complete overtime to achieve equivalent earnings. Where work was required over and above 50 ‘ordinary hours’, the overtime rates in the Agreement would apply.

[11] The Applicant submits that it was the common intention that this would be achieved by providing for a maximum of 50 ‘ordinary hours’ per week (which is expressly provided for and agreed to), but the Agreement does not provide for maximum daily ‘ordinary hours’.

[12] The Applicant contends that in considering the circumstances leading to the Agreement, in particularly the identification of the 50 ‘ordinary hours’ per week and the background to that, the orders sought by the applicant will ensure that the Agreement accurately reflects the agreement the parties agreed to and could not be considered a re-write of the Agreement.

[13] The Applicant also identifies a further uncertainty and ambiguity in that clause 14.1 does not specify the hourly rates that apply in respect of the ‘ordinary hours’ of work. This is significant because Appendix A of the Agreement includes two tables of rates, one being “Base Hourly Rates of Pay” and the second being “Loaded Hourly Rates of Pay”. While Clause 15 Overtime makes clear that hours of work in excess of ‘ordinary hours’ attract overtime rates applied to the Base Hourly Rate, it is unclear from clause 14.1 whether the base hourly rates or loaded rates found in Appendix A of the Agreement apply to the ‘ordinary hours.’

[14] Mr Drew states that during the explanation of the terms of the Agreement to employees prior to the approval ballot, the calculation of the Loaded Hourly Rates was explained to employees. He says it was also explained to employees that once 50 ‘ordinary hours’ had been worked further hours would attract overtime rates in accordance with clause 15. The Applicant submits that the objective intention of the parties of applying the loaded rates to ‘ordinary hours’ of work is also supported by an email sent to Commissioner Riordan’s chambers on 4 April 2019 in response to a query from the Commissioner in relation to the better off overall test (the BOOT) being satisfied;

“The owners of B&C requested that we provide our workers with rates that are slightly higher than our competitors. Utilising the agreements/agreements we downloaded copies of our competitors agreements and prepared a comparison table of relevant rates. We also engaged an independent party (SEED People Consulting) to complete the BOOT on the proposed rates and compare this to the modern award. Utilising an inflation percentage of 2.5% we worked from 2016/2017 through to 2021. We have opted for a loaded rate to cover a 50 hour shift as this is generally the normal working week for the majority of our clients. The loaded rate is calculated by ((Ordinary Rate x 40) + (Ordinary Rate x 1.5 x 10) + (Ordinary Rate*2))/50 hours per week. This was then checked against our competitors rate at (Ordinary Rate x 40) + (Ordinary Rate x 1.5 x 10) per week. The goal was to be around 4% higher than our competitors. The last check was against the Modern Award rates.”

[15] The Applicant seeks to vary the Agreement in the following terms (edits highlighted) to remove the ambiguity or uncertainty in respect of the maximum daily ‘ordinary hours’ and the applicable rates for ‘ordinary hours’;

“14.1 Except as provided in Clause 16, Shift Work, the ordinary hours of work are worked from Monday to Saturday between the hours of 6:00am and 6:00pm. The ordinary hours of work for full time Employees are an average of 38 hours per week. However, Employees may be required to work up to a maximum of fifty (50) ordinary hours per week on the basis of a maximum of five 10-hour days Monday to Friday between the hours of 6:00am and 6:00pm. Employees agree that working these additional ordinary hours is reasonable. Ordinary hours are paid at the Loaded Hourly Rate in Appendix A.”

[16] The applicant seeks that the variation have retrospective effect and operate from the commencement of the Agreement on 17 April 2019 because it reflects the mutual intention of the parties at the time the Agreement was made.

Legal principles

[17] Section 217 provides for the variation of enterprise agreements to remove ambiguity or uncertainty as follows:

(1) FWA 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 FWA varies the enterprise agreement, the variation operates from the day specified in the decision to vary the agreement.

[18] In a recent decision in Bianco Walling Pty Ltd T/A Bianco Precast 5(Bianco Walling)Deputy President Anderson summarised the approach to be applied to the task required by s 217 following remittal of the matter back to him following a decision of the Full Court of the Federal Court6 in that matter. The Deputy President summarised the required approach, which I respectfully adopt, as follows;

[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.  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. 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. Evidence of surrounding circumstances including common intention or objectively established past or current practice is relevant in making the required evaluative assessment;

● 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; and

● the terms “ambiguity’ and ‘uncertainty” have different meanings, and each must be considered. (citations omitted)

Consideration

[19] Before turning to deal with the issue of maximum daily ‘ordinary hours’ of work I will deal firstly with the relevant rates of pay that apply to ‘ordinary hours’ of work. Appendix A has two pay rate tables, one of which provides for Base Rates of Pay and the second table provides for higher Loaded Rates of Pay. While both of these terms are defined in sub-clause 2.1(e) and 2.1(m) and clause 15 states that overtime penalties are applied to base rates of pay, the Agreement is silent on which of the two tables of rates applies to ‘ordinary hours’ of work. I consequently accept there is uncertainty as to which rates of pay found in Appendix A apply to ‘ordinary hours’ of work.

[20] I am satisfied based on the evidence of Mr Drew and the email sent to Commissioner Riordan on 4 April 2019 that the objective intention of the parties was to apply the Loaded Rates of Pay to all ‘ordinary hours’ and that where employees were required to work in excess of those ‘ordinary hours’ or outside the span of hours for ‘ordinary hours’ of work, they would receive overtime penalty rates applied to the Base Rate of Pay. Amendment of clause 14.1 in the manner proposed would remove the uncertainty as to what rates in Appendix A apply to ‘ordinary hours’ of work.

[21] Turning now to the issue of the daily maximum ‘ordinary hours’ of work. The first thing to be said is that the reference to ‘ordinary hours’ of work in clause 14.1 of the Agreement has a particular meaning which is different to the meaning of the term used in the Award. Clause 14.1 of the Agreement uses the term ‘ordinary hours’ to describe both the standard 38 ordinary hours of work required to be performed as a minimum each week and also the additional hours of work that may be required to be worked up to a maximum of 50 ‘ordinary hours’ per week. Those additional hours would be described and treated as overtime under the Award.

[22] Importantly, use of the term ‘ordinary hours’ in clause 14.1 does not connote use of an averaging arrangement whereby employees may work up to 50 ‘ordinary hours’ in one week and a lesser number of ‘ordinary hours’ in the following week such that an average of 38 ordinary hours are worked over that two week or longer weekly cycle. This is clear by the absence of specific ordinary hours averaging arrangements in the Agreement. Furthermore, save for the averaging of ordinary hours for the purpose of RDO accrual 7 the Award does not enable the averaging of hours in a manner that would allow up to 50 ‘ordinary hours’ per week to be rostered. Consequently, when the term ‘ordinary hours’ is used in clause 14.1 of the Agreement, it is taken to include both the base 38 ordinary hours per week and the ‘reasonable’ additional 12 hours overtime per week that employees may be required and have agreed to work under the Agreement.

[23] Use of the term ‘ordinary hours’ in clause 14.1 of the Agreement in describing both the base 38 ordinary hours and the 12 additional overtime hours per week, creating a maximum of 50 ‘ordinary hours’ per week, contributes to ambiguity when reference is made to the Award provisions that restrict ordinary hours per day to that of 8 ordinary hours. The Award does not limit the maximum hours per day that may be worked but does limit the number of “ordinary working hours” to 8 per day. 8 Subject to the requirement being reasonable, under the terms of the Award an employee may be required to work overtime in addition to 8 ordinary hours per day.9

[24] It is the use of the term ‘ordinary hours’ in the Agreement to describe both the base 38 ordinary hours and the additional required 12 hours of overtime per week that creates uncertainty when the silence of the Agreement on a daily maximum ‘ordinary hours’ leads to reliance on clause 33.1 of the Award which does specify a daily maximum of 8 ordinary hours. Applying the Award daily limit of 8 ordinary hours to the Agreement hours of work provision in circumstances where the term ‘ordinary hours’ has a different meaning in the Agreement to the Award, creates both ambiguity and uncertainty.

[25] The above is brought into focus when regard is had to the weekly limit of 50 ‘ordinary hours’ provided for in clause 14.1 of the Agreement. The maximum weekly figure of 50 ‘ordinary hours’ that may be required to be worked between Monday and Saturday cannot be reconciled with the maximum of 8 ordinary hours per day under the Award. The imposition of a maximum of 8 ordinary hours per day (due to the silence of the Agreement on the daily maximum) applied over 6 days from Monday to Saturday results in a maximum of 48 ‘ordinary hours’ which is less than the maximum 50 ‘ordinary hours’ per week provided for under clause 14.1 of the Agreement.

[26] I accept the evidence of Mr Drew, which is not contradicted by affected employees, that during bargaining for the Agreement, the parties intended that the 50 ‘ordinary hours’ per week provided by the Agreement would be able to be worked in a manner that compressed those ‘ordinary hours’ into a five day period i.e. Monday – Friday. I also accept that it was the preference of employees to work up to 50 ‘ordinary hours’ in a manner that avoided the need to work any of those 50 ‘ordinary hours’ on a weekend.

[27] It follows from the above that I am satisfied that there is both uncertainty and ambiguity in clause 14.1 in relation to the maximum ‘ordinary hours’ per day and that the proposed amendment of clause 14.1 would result in the removal of that uncertainty and ambiguity.

Conclusion

[28] On the basis of the material before me, I find that provisions in the Agreement which deal with the maximum daily ordinary hours of work and the rates of pay that apply to the ordinary hours are uncertain and ambiguous. Accordingly, the application is granted.

[29] The Agreement is varied as followed;

(i) By deleting the existing clause 14.1; and

(ii) By inserting the amended clause 14.1 in the following terms;

“14.1 Except as provided in Clause 16, Shift Work, the ordinary hours of work are worked from Monday to Saturday between the hours of 6:00am and 6:00pm. The ordinary hours of work for full time Employees are an average of 38 hours per week. However, Employees may be required to work up to a maximum of fifty (50) ordinary hours per week on the basis of a maximum of five 10-hour days Monday to Friday between the hours of 6:00am and 6:00pm. Employees agree that working these additional ordinary hours is reasonable. Ordinary hours are paid at the Loaded Hourly Rate in Appendix A.”

[30] The variation, as sought, will operate from 17 April 2019. An order giving effect to this decision will be separately issued.

DEPUTY PRESIDENT

 1   Statutory Declaration of Ms Olivia Bartolo, dated 27 October 2020

 2   MA000020

 3   Statement of Mr Shannon Drew, dated 6 October 2020 at [12]

 4   Ibid

 5   [2020] FWCA 5777

 6 [2020] FCAFC 50

 7   Award, clause 33.1(a)

 8   Ibid

 9   Ibid at clause 36

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