City of Stirling
[2022] FWCA 3438
•6 OCTOBER 2022
| [2022] FWCA 3438 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.217—Enterprise agreement
City of Stirling
(AG2022/1464)
City of Stirling Outside Workforce Agreement 2020
| Local government administration | |
| COMMISSIONER MATHESON | SYDNEY, 6 OCTOBER 2022 |
Application to vary the City of Stirling Outside Workforce Agreement 2020 to remove an ambiguity or uncertainty – application granted.
The City of Stirling (Applicant) has filed an application pursuant to s.217 of the Fair Work Act 2009 (Cth) (Act) to vary the City of Stirling Outside Workforce Agreement 2020[1] (Agreement) to remove an ambiguity or uncertainty (Application).
The Agreement is a single enterprise agreement. It was approved with undertakings on 7 February 2022[2] and came into effect on 14 February 2022. Section 191(1)(b) of the Act has the effect that the undertakings are taken to be a term of the Agreement.
The Australian Municipal, Administrative, Clerical and Services Union (ASU); Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia; Construction, Forestry, Maritime, Mining and Energy Union and Western Australian Shire Councils, Municipal Road Boards, Health Boards, Parks, Cemeteries and Racecourse, Public Authorities, Water Boards Union (WAMEU) are covered by the Agreement. The ASU and WAMEU oppose the Application.
Clause 15.2.2 of the Agreement provides that:
“Employees classified as Level 4 or higher in accordance with Annexure 1 of this Agreement may work ordinary hours Monday to Sunday (inclusive) for work performed in the following roles or work areas:
(i)Beach cleaners
(ii)Recycling Centre Balcatta
(iii)Container Deposit Scheme”.
In considering the application for approval of the Agreement, the Commission noted that the Agreement did not appear to provide penalty rates for ordinary hours worked on weekends and that clause 18.2 of the Agreement provide rates for overtime hours worked on weekends only. As such, the Commission raised a concern that part-time or casual employees working ordinary hours on a Saturday or Sunday may not be better off under the Agreement when compared to the Local Government Industry Award 2020 (Award), noting that clause 22.2 of the Award prescribes penalty rates of 150% for Saturday work and 175% for Sunday work.
The Applicant provided undertakings, which are terms of the Agreement. Paragraph 3 of the undertakings (Undertaking) currently states:
“If the City engages employees in the work areas set out in clause 15.2.2 to work ordinary hours on a Saturday or Sunday, those employees will be paid the following rates:
a) 150% of the minimum hourly rate for all ordinary hours worked on a Saturday; and
b) 175% of the minimum hourly rate for all ordinary hours worked on a Sunday”.
The Undertaking was accepted by the Commission after the views of the bargaining representatives were sought and no objections raised.
The Applicant now proposes a variation to the Undertaking so that it reads:
“Notwithstanding clause 15.2.2, if the City engages part time or casual employees to work ordinary hours in the roles or work areas referred to in clause 15.2.2 on a Saturday or Sunday, those employees will be paid the following rates:
a) 150% of the ordinary hourly rate for all ordinary hours worked on a Saturday; and
b) 175% of the ordinary hourly rate for all ordinary hours worked on a Sunday.”
Legislation
The relevant provision of the Act is as follows:
“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.”
Principles to be applied in considering a s.217 application
The principles to be applied in considering an application under s.217 of the Act have previously been summarised by the Commission as follows:[3]
· the Commission should approach an application in two stages. First, as a jurisdictional pre-requisite, it should identify whether there is an uncertainty or ambiguity. Secondly, if an ambiguity or uncertainty is identified, it should consider whether to exercise its discretion to vary the agreement the subject of the application;[4]
· the process of identifying ambiguity or uncertainty involves making an objective assessment of the words used in the provisions under examination. The words used are construed having regard to their context;[5]
· the Commission will generally err on the side of finding an ambiguity or uncertainty where there are rival contentions and an arguable case is made out for more than one contention;[6]
· however, the Commission must make a finding that an agreement the subject of an application under s.217 is ambiguous or uncertain. Prima facie satisfaction of ambiguity or uncertainty is not sufficient;[7]
· the mere existence of rival contentions as to the proper construction of the terms of an agreement will also be an insufficient basis to conclude the existence of ambiguity or uncertainty. Such contentions may be self-serving. The task is to make an objective judgement as to whether the wording of a provision is susceptible to more than one meaning;[8]
· however, the task of the Commission is to determine whether a provision in an agreement is ambiguous or uncertain. That task is distinct from determining the proper construction or true meaning of a provision of an agreement;[9]
· a provision in an agreement may be ambiguous even though it is capable of interpretation and it is not necessary for the Commission to interpret a provision of an agreement to reach a conclusion concerning the presence of ambiguity or uncertainty. Consequently there is no need for the Commission to feel constrained in the matters to which it may have regard by the principles developed for the interpretation of enterprise agreements;[10]
· moreover, the Commission is obliged, in performing its functions or in exercising its powers in relation to a matter under the Act, to take into account, amongst other things, “equity, good conscience and the merits of the matter” (s.578) and it is not bound by the rules of evidence and procedure in relation to a matter (s.591). These provisions of the Act apply to the discharge of the Commission’s functions under s.217(1), including by allowing the Commission to have regard to evidence of the parties’ common intention and to the history of the agreement provision as part of the “equity, good conscience and the merits” of the matter;[11] and
· once an ambiguity or uncertainty has been identified, in exercising the discretion whether to vary the agreement, the Commission may also have regard to the mutual or common intention of the parties at the time the agreement was made.[12]
If an ambiguity or uncertainty has been identified, in exercising the discretion as to whether an agreement should be varied, two questions arise: is it appropriate to vary the agreement? If so, what variation is appropriate?[13]
The position of the Applicant
Why is the Applicant seeking the variation?
The Applicant has submitted that in drafting the Undertaking:[14]
· It adopted the wording used in clause 22.2 of the Award to ensure that the Agreement gave part-time and casual employees, as a minimum, the weekend penalty rates provided for under clause 22.2 of the Award and therefore addressed the better off overall test (BOOT) concerns raised by the Commission, with the wording of clause 22.2(a) being:
“22.2 Weekend penalty rates
(a) An employee (other than an employee engaged in recreation centres or community services) who works on a Saturday or Sunday in a role/work area specified in clauses 13.1(e), 13.1(f) and 13.1(g) will be entitled to the following penalty rates for all ordinary hours worked:
(i)150% of the minimum hourly rate for all ordinary hours worked on a Saturday.
(ii)175% of the minimum hourly rate for all ordinary hours worked on a Sunday.”
· In doing so, it inadvertently created ambiguity and/or uncertainty about the entitlement to weekend penalty rates by not:
olimiting the Undertaking to those employees about which the Commission had raised a concern (being part-time or casual employees working ordinary hours on weekends); or
oconsidering how the Undertaking interacts with clause 15.2.2 of the Agreement.
Why does the Applicant say that ambiguity and/or uncertainty arises?
The Applicant has submitted that ambiguity arises in relation to the Undertaking because:[15]
· it is expressed to apply to employees regardless of whether they are full-time, part-time or casual;
· it is expressed to apply to employees regardless of their classification level (noting that the Undertaking does not refer to classification levels whereas clause 15.2.2 applies to employees classified as Level 4 or higher);
· it is expressed to apply to employees in the work areas set out in clause 15.2.2 (noting that clause 15.2.2 refers to both work areas and roles, meaning that employees in the role of beach cleaner may not be covered by the Undertaking); and
· it refers to the term “minimum hourly rate” which are not words used in the Agreement and it is unclear what rate is the “minimum hourly rate”.
The Applicant also submitted that the wording in the Undertaking creates uncertainty because:[16]
· the interaction between the Undertaking and words in clause 15.2.2 of the Agreement do not work together and do not contain clear words of predominance or subservience; and
· it is therefore uncertain which provision takes precedence, and how each provision relates to each other, leading to an uncertainty of application.
Why does the Applicant say the variation should be made?
The Applicant submitted that, given the uncertainty and/or ambiguity created by the Applicant’s drafting, the Undertaking could be interpreted in a way that does not reflect the intention of the Applicant when it was provided.[17] In this regard, the Applicant submitted that:[18]
· the intention in providing the Undertaking was to go no further than to address the concern raised by the Commission and provide weekend penalty rates to casual and part-time employees who would not otherwise receive weekend penalty rates because of clause 15.2.2 of the Agreement;
· the statement toward the end of the undertakings that “these undertakings are provided on the basis of issues raised by the Fair Work Commission” indicates that the Undertaking was provided for the purpose of addressing the specific issues raised by the Commission;
· it was not the intention of the Applicant to provide weekend penalty rates to full-time employees; and
· its intention was that clause 15.2.2 would continue to apply to full-time employees in classifications above level 3 working in the roles or work areas set out in clause 15.2.2.
The Applicant submitted that a significant factor in determining whether the Commission should use its discretion to vary an agreement is the objective ascertained mutual intention of the parties when the agreement was made[19] and that the variation it proposes reflects the intention of the parties during bargaining.[20] In this regard, the Applicant submitted:[21]
· the ASU and employees who are beach cleaners have previously advocated for an additional loading of 15% to be paid to beach cleaners in part to compensate full-time beach cleaners from having to work ordinary hours on weekends, despite acknowledging that the Applicant is not legally obliged to provide the loading;
· this loading was not raised as an issue or claim during bargaining and did not appear in the ASU’s log of claims;
· it cannot therefore be said that the Undertaking reflects the mutual intention of the parties at the time the Agreement was made;
· the ASU acknowledged that it understood the Undertaking was to address the part-time and casual employee issues and it is disingenuous and/or opportunistic for the ASU to now seek to rely on the Undertaking to assert that full-time employees are now entitled to the penalty rates provided by the Undertaking; and
· the Commission should use its discretion to make the variation as the Undertaking has the effect of undoing the ‘bargain’ reached in relation to clause 15.2.2 of the Agreement.
The Applicant also submitted that:
· the predecessor agreement, the City of Stirling Outside Workforce Agreement 2017, contained a similar clause to clause 15.2.2 in the Agreement and was applied so that the employees referred to in that clause who worked ordinary hours on weekends were not entitled to penalty rates;[22]
· there are a relatively small number of employees who will be affected by the variation, being employees who work full-time and have a roster pattern that includes regular weekend work. This is limited to:
othree employees working at the Container Deposit Scheme (CDS);
onine employees working at the Balcatta Recycling Centre; and
osix employees working in the role of beach cleaners;[23]
· that in varying the Undertaking, it is not necessary for the Commission to vary the terms of the Agreement that were approved by employees;[24]
· the Applicant will suffer financial damage if the variation is not made. In particular, the CDS operates as a commercial recycling enterprise, is not funded by rates, its budget did not contemplate having to pay penalty rates and the scheme may be at financial risk if full-time employees are required to be paid penalty rates when they work on weekends;[25]
· undertakings are:[26]
onot the product of negotiations and are less likely to take into account the parties’ mutual intentions at the time the agreement was reached given they are provided to address concerns raised by the Commission;
owhile the Commission is obliged by s.190(4) of the Act to seek the views of the bargaining representatives, an undertaking is drafted and provided by one party only and there is no requirement for bargaining representatives to provide their views;
onot provided to employees as a part of a seven day access period;
ooften provided within compressed timeframes (in this case four days), making them more vulnerable to errors; and
· overall, the equity, good conscience and merits of the matter weigh in favour of the amendment.[27]
When does the Applicant say the variation should take effect?
Section 217 of the Act provides that, if a variation is made, it will operate from the day specified in the decision to vary the agreement.
The Applicant seeks that the variation take effect from 14 February 2022, being the date upon which the Agreement was approved.[28]
In this regard, the Applicant submits:
· in deciding whether to exercise its discretion in other cases, the Commission has found that considerations of equity, good conscience and the substantial merits of the case favour a decision to apply the variation from the time of operation of the agreement to give effect to the common intentions of the parties during the creation of the agreement;[29] and
· because the ambiguity and/or uncertainty relates to the payment of wages, or has a wage related financial effect, it is appropriate for the Commission to make the variation from the time the Agreement commenced operation.[30]
The position of the unions
WAMEU
The WAMEU opposes the Application.
The WAMEU noted that it was declared in the Applicant’s “Form F17 Employers declaration in support of an application for approval of an enterprise agreement (other than a greenfields agreement)” (Form F17):
· at question 8, that the Award covers the employer and employees covered by the Agreement; and
· in response to question 13, “Does the agreement omit any entitlements that the modern award(s) listed in your answer to question 8 provide?”, that there was one condition omitted, being clause 19.2 of the Award dealing with leading hand allowance, with no reference made to weekend penalty rates.[31]
The WAMEU submitted that:[32]
· there is no ambiguity whatsoever in the Undertaking and its plain and ordinary meaning is clear;
· the words of the Undertaking are consistent with those in clause 22.2 of the Award;
· reliance should be place upon the Applicant’s Form F17 declaration in respect of conditions omitted or not omitted as proof that the Applicant accepted and intended for the weekend penalty rates to apply to all employees covered by the Agreement;
· the Undertaking is consistent with the Form F17 declaration in this respect;
· the Applicant had and has dedicated, experienced human resources personnel who also use external legal advice to guide and assist them in both informal and formal communications with the WAMEU, Commission and other parties to the Agreement. In light of this, the Applicant provided the undertakings and the Commission properly exercised its powers pursuant to s.186 of the Act; and
· in respect of the Applicant’s contentions with respect to the questions of “ambiguity” and/or “uncertainty”, the Commission is entitled to rely on the ratio applied in Application by Australian Nursing Federation [2011] FWA 2430:
“[44] However, the first step that Fair Work Australia is required to determine is whether there is ambiguity or uncertainty. Fair Work Australia has no general power to vary agreements to correct mistakes or errors. Fair Work Australia can only vary an agreement if there is ambiguity or uncertainty. There is nothing else in the Agreement which points to how the rate for the grade 2 ANUM was derived. For example the Agreement makes no reference to parity with public sector rates. As such, there is a figure set out in the Agreement which is, on its face, clear and unambiguous. I am therefore unable to vary the Agreement as sought by the ANF.”
ASU
The ASU also opposes the Application.
The ASU acknowledged that it did not raise claims during bargaining regarding the payment of weekend penalty rates for beach cleaners or other employees employed in roles or work areas within the scope of clause 15.2.2 of the Agreement.[33]
The ASU submitted that the Commission should not make the variation because the Applicant is seeking to correct a purported error, rather than an uncertainty or ambiguity.[34] In particular, the ASU submitted that:
· s.217 of the Act is not a ‘slip’ provision and cannot be relied upon to correct mistakes or drafting errors where no ambiguity exists;[35] and
· while the Applicant submits it was not its intention to provide weekend penalty rates for all employees and that their purported error was a product of both time constraints and adopting the language from clause 22.2 of the Award, this is of no consequence for the ascertainment of ambiguity or uncertainty, which must primarily be discerned from the disputed words read in context.[36]
The ASU also submitted that the Undertaking is not tainted by ambiguity or uncertainty and the Commission lacks jurisdiction to make the variation.[37] In this regard, the ASU submitted the Undertaking is not ambiguous because:[38]
· it applies to “employees in the work areas set out in clause 15.2.2” and this is an unambiguous reference to employees within the scope of the Agreement, being “employees classified as Level 4 or higher in accordance with Annexure 1 of the Agreement”;
· it only refers to “employees” rather than specifying full-time, part-time or casual employees, which means the Undertaking applies to all employees without regard to their employment basis; and
· the term “minimum hourly rate” is simply the hourly rate calculated from the “minimum rates of pay” contained at Annexure 1 of the Agreement.
The ASU also submitted that the reference to the words at the end of the undertakings that state:
“These undertakings are provided on the basis of issues raised by the Fair Work Commission in the application before the Fair Work Commission.”
only express that the Undertaking was made subsequent to concerns raised by the Commission and it is doubtful that the concerns raised can be relied upon in any way to assist in ascertaining whether the Undertaking is ambiguous or uncertain.[39]
The ASU submitted that all that can be drawn from the acceptance of the Undertaking is that the Commission was satisfied the Undertaking met the Commission’s legislative concerns, and that accepting the Undertaking was not likely to cause financial detriment to any employee covered by the Agreement or result in substantial changes to the Agreement.[40]
The ASU also submitted that no uncertainty arises from the interaction of the Undertaking and clause 15.2.2 of the Agreement and these provisions work harmoniously together such that there is no need for any hierarchical reconciling of the provisions.[41]
The ASU submitted that, even if the Commission did find that the Undertaking was ambiguous or uncertain, it should exercise its discretion to not make the variation as it would be doing so consistently with the intention of only the Applicant.[42] In this regard, the ASU referred to the decision of the Full Bench in United Voice v MSS Security Pty Ltd[43] (United Voice v MSS Security), which said:
“[23] It is possible in this case that the parties had different intentions as to the use of the words “all purpose”. The resolution of the matter requires the application of the following logic. If an ambiguity exists in relation to the payment of an additional amount, as in this case, and the evidence establishes that there is no mutual intention to pay the additional amount, then it would normally follow that the Commission should not vary the agreement to create an entitlement that is consistent with the intention of only one of the parties. Even if there is no clear mutual intention to not pay the additional amount, it would normally be desirable to resolve an ambiguity to make it clear that the amount is not payable when there is an insufficient basis to find that the parties agreed to pay the additional amount. Therefore, if there was no mutual intention to apply penalty calculations to the allowance, then absent any other compelling circumstance, the company’s application was likely to succeed.”
Consideration
As the Full Court of the Federal Court of Australia stated in Bianco Walling Pty Ltd v Construction, Forestry, Maritime, Mining and Energy Union[44] (Bianco Walling), there has been an evident legislative intention that intervention by the arbitral body into matters on which the parties themselves have agreed in the manner for which the legislation provides should be limited.[45] However, the term that the Applicant seeks to vary, being the Undertaking, was not a matter agreed by a majority of employees as a consequence of bargaining. The term is an undertaking provided by the Applicant to address concerns of the Commission. While the views of the bargaining representatives were sought and no objections raised, the Agreement of the bargaining representatives is not a prerequisite for the Commission accepting an undertaking and it is ultimately a decision for the Commission as to whether the undertaking should be accepted, taking into account the relevant considerations in s.190 of the Act. This distinguishes the matter from a variation application involving a term of an agreement as negotiated and made. If an undertaking is accepted, it is however taken to be a term of the agreement.
Ambiguity or uncertainty
The first question I must consider is whether the Undertaking is ambiguous or uncertain and thus is distinct from the question of the true meaning of the provision.[46]
The words “ambiguity” and “uncertainty”, where used in s.217 of the Act, are not synonyms and carry different meanings.[47]
The Macquarie Dictionary defines the word “ambiguity” as:
“1. doubtfulness or uncertainty of meaning ... 2. an equivocal or ambiguous word or expression...”;
and defines the term “uncertain” as:
“1. not definitely or surely known; doubtful. 2. not confident, assured or decided. 3. not fixed or determined. 4. doubtful; vague; distinct...”.
The process of identifying ambiguity or uncertainty involves making an objective assessment of the words used in the provisions under examination. The words used are construed having regard to their context.[48]
As the Full Court found in Bianco Walling, there may be uncertainty in an enterprise agreement even when its terms are not ambiguous and this uncertainty may arise from the application of the unambiguous terms to a given set of circumstances.[49]
The Undertaking states:
“If the City engages employees in the work areas set out in clause 15.2.2 to work ordinary hours on a Saturday or Sunday, those employees will be paid the following rates:
a) 150% of the minimum hourly rate for all ordinary hours worked on a Saturday; and
b) 175% of the minimum hourly rate for all ordinary hours worked on a Sunday.”
The Applicant has submitted that ambiguity arises in relation to the Undertaking because:[50]
· it is expressed to apply to employees regardless of whether they are full-time, part-time or casual;
· it is expressed to apply to employees regardless of their classification level (noting that the Undertaking does not refer to classification levels whereas clause 15.2.2 applies to employees classified as Level 4 or higher);
· it is expressed to apply to employees in the work areas set out in clause 15.2.2 (noting that clause 15.2.2 refers to both work areas and roles, meaning that employees in the role of beach cleaner may not be covered by the Undertaking); and
· it refers to the term “minimum hourly rate” which are not words used in the Agreement and it is unclear what rate is the “minimum hourly rate”.
As noted above, the ASU submitted the Undertaking is not ambiguous because:[51]
· it applies to “employees in the work areas set out in clause 15.2.2” and this is an unambiguous reference to employees within the scope of the Agreement, being employees classified as Level 4 or higher in accordance with Annexure 1 of the Agreement’;
· it only refers to “employees” rather than specifying full-time, part-time or casual employees, which means the Undertaking applies to all employees without regard to their employment basis; and
· the term ‘minimum hourly rate’ is simply the hourly rate calculated from the ‘minimum rates of pay contained at Annexure 1 of the Agreement.
The Applicant also submitted that the wording of the Undertaking creates uncertainty because:[52]
· the interaction between the Undertaking and words in clause 15.2.2 of the Agreement do not work together and do not contain clear words of predominance or subservience; and
· it is therefore uncertain which provision takes precedence, and how each provision relates to each other, leading to an uncertainty of application.
The ASU submitted that no uncertainty arises from the interaction of the Undertaking and clause 15.2.2 of the Agreement and these provisions work harmoniously together such that there is no need for any hierarchical reconciling of the provisions.[53]
The Commission will generally err on the side of finding ambiguity or uncertainty where there are rival contentions and an arguable case is made out for more than one contention.[54] However, mere existence of rival contentions as to the proper construction of the terms of an agreement will also be an insufficient basis to conclude the existence of ambiguity or uncertainty. Such contentions may be self-serving. The task is to make an objective judgement as to whether the wording of a provision is susceptible to more than one meaning.[55]
The ASU’s submissions have the effect of putting forward a construction of the Undertaking. While the Applicant’s submissions point to factors that it says establish ambiguity and/or uncertainty, it does not actually advance a competing construction of the Agreement. While the Applicant has made various further submissions about what it intended in providing the undertaking, these submissions are relevant to the question of whether I should exercise my discretion to make the variation applied for, which is a question that arises if I have first found that ambiguity or uncertainty exists.
As noted above, I need to make an objective judgement as to whether the wording of a provision is susceptible to more than one meaning. Based on a plain reading of the Undertaking alone:
· the Undertaking does not make a distinction between full-time, part-time or casual employees;
· the term ‘minimum hourly rate’ is likely calculated from the ‘minimum rates of pay’ referenced at Annexure 1 to the Agreement, although these are not expressed as hourly rates but are expressed as annual amounts; and
· the reference to work areas alone in the Undertaking, but not both work areas and roles as referred to in clause 15.2.2, may give rise to some uncertainty as to the application of the Undertaking to the role of beach cleaner.
Had I been required to apply the usual principles of enterprise agreement interpretation and read the Undertaking in the context of the Agreement, it is likely that an interpretation of the Agreement could be arrived at with little difficulty.
Prima facie satisfaction of ambiguity or uncertainty is not sufficient.[56] This requires me to go beyond the plain reading of the Undertaking alone. Further, a provision may be ambiguous, even though it is capable of interpretation.[57] In this regard, the ambiguity may be apparent on the face of the document or may become apparent only when extrinsic evidence is adduced. It is not necessary for the Commission to interpret the Agreement in order reach a conclusion concerning the presence of ambiguity or uncertainty[58] and the Commission is not constrained by the principles for interpreting enterprise agreements in dealing with applications such as these.[59] Further, the Commission is obliged, by virtue of s.578 of the Act, to take into account “equity, good conscience and the merits of the matter” and is not bound by the rules of evidence and procedure.[60]
This leads me to consider the relevant extrinsic evidence in this matter and circumstances in which the Undertaking was provided.
It is uncontroversial that the Commission raised a concern that part-time or casual employees working ordinary hours on a Saturday or Sunday may not be better off under the Agreement when compared to the Award, noting that clause 22.2 of the Award prescribes penalty rates of 150% for Saturday work and 175% for Sunday work and the Agreement did not prescribe such penalties in relation to ordinary hours worked on weekends. The Applicant was invited to address that concern.
The evidence of Ms Georgina Monkhouse, Service Lead, HR Operations for the Applicant, was that:[61]
· at the time the Commission requested a response, the HR Operations team, together with other parts of the Applicant, was fully occupied with coordinating reports, letters and notices to employees impacted by the WA State Government Proof of Vaccination Directions;
· the Applicant therefore sought assistance from its lawyers (HWL Ebsworth) to prepare the response to the Commission;
· the Applicant also requested an extension of time for providing the response, which was granted by the Commission;
· HWL Ebsworth advised the Applicant to provide undertakings and assisted with the drafting of the Undertaking; and
· the Undertaking was provided to the Commission and each of the employee organisations to be covered by the Agreement on 2 February 2022.
The views of the bargaining representatives, including the ASU and WAMEU, were sought, no objections were raised in relation to the Undertaking and the Commission approved the Agreement with the Undertaking on 7 February 2022.
Ms Monkhouse’s evidence was that:[62]
· on 9 February 2022, the Applicant realised there was an issue with the Undertaking when it was in the process of preparing communications to employees and realised it could be interpreted in a way that meant the Applicant was obliged to pay penalty rates to full-time employees when working ordinary hours on Saturdays and Sundays;
· the Applicant was “initially unsure whether [the Undertaking] needed to be amended to ensure it reflected the [Applicant’s] intention to go no further than address the issue raised by the Commission about part-time and casual employees who regularly work ordinary hours on weekends not being better off overall”;
· further, even though the issue raised by the Commission only related to part-time and casual employees, the Applicant wanted to ensure that full-time employees who regularly worked ordinary hours on weekends were also better off overall when compared to the Award and it therefore did better off overall testing of full-time employees which confirmed this; and
· after considering the consequences, costs and risks if the Undertaking was not amended, on 3 March 2022, the Applicant emailed the Commission seeking a correction to the Undertaking under s.602 of the Act.
The Commission declined to amend the undertaking under s.602 of the Act and this Application was subsequently made.
Having considered this evidence, I return to the question of whether, on my objective assessment, the Undertaking is susceptible to more than one meaning. As noted above, the Commission is also obliged, in performing its functions or in exercising its powers in relation to a matter under the Act, to take into account, amongst other things, “equity, good conscience and the merits of the matter.” While this would ordinarily enable the Commission to have regard to evidence of the parties’ common intention and to the history of agreement provision, these considerations do not arise as the Undertaking was not the subject of bargaining and was not a historical provision but, rather, was provided unilaterally by the Applicant. However, this does not render consideration of “equity, good conscience and the merits of the matter” irrelevant and, in the circumstances of this matter, these principles lend themselves to an approach where I have regard to the context in which the Undertaking was given.
The circumstances of this matter are somewhat unique in that the Undertaking was provided to address a concern of the Commission. The Commission’s concern was that, while clause 18.2 of the Agreement provides rates for overtime hours worked on weekends, clause 15.2.2 of the Agreement provided that certain employees could work ordinary hours on weekends and in these circumstances, the Agreement did not appear to provide penalty rates for ordinary hours worked on weekends. The Commission’s concerns related to part-time and casual employees working ordinary hours on Saturdays and Sundays.
The employees permitted by clause 15.2.2 of the Agreement to work ordinary hours on weekends include “Employees classified as Level 4 or higher in accordance with Annexure 1 of [the] Agreement” in relation to “work performed in the following roles or work areas:
(i)Beach cleaners
(ii)Recycling Centre Balcatta
(iii)Container Deposit Scheme”.
It is apparent to me that the drafting of the Undertaking was rushed and, while it is capable of interpretation, the omission of the reference to ‘roles’ could be read as meaning that the Undertaking would not apply to beach cleaners, being a ‘role’, although in order to address the Commission’s concern this was clearly not its purpose. The evident purpose of the Undertaking was that, in order to address the Commission’s concerns, the Undertaking would have application to the employees who performed work in both the work areas and roles in clause 15.2.2 of the Agreement.
That an error in drafting has been made in this regard raises questions around the balance of the Undertaking. It is clear that the Undertaking can be construed as applying to employees, regardless of their status as full-time, part-time and casual employees. While the Undertaking would address the concern of the Commission regardless as to whether it is read as applying to employees generally or only to part-time and casual employees, the broader application of the Undertaking to full-time employees was not required for the purposes of the approval of the Agreement. On my objective assessment, the reference to “employees” in the Undertaking could also be susceptible to another meaning directed at addressing the Commission’s discrete concerns in relation to part-time and casual employees, rather than all employees.
Accordingly, in the context in which the Undertaking was given, the meaning of the Undertaking is ambiguous and uncertain.
Should the Commission’s discretion to vary the Agreement be exercised?
Having found that there is both ambiguity and uncertainty in relation to the Undertaking, the next question I am required to consider is whether I should exercise my discretion to vary the Agreement. It is well established that, in doing so, the Commission may have regard to the mutual or common intention of the parties at the time the Agreement was made.[63]
The ASU submitted that, even if the Commission did find that the Undertaking was ambiguous or uncertain, it should exercise its discretion to not make the variation as it would be doing so consistently with the intention of only the Applicant.[64] In this regard, the ASU referred to the decision of the Full Bench in United Voice v MSS Security, which said:[65]
“[23] It is possible in this case that the parties had different intentions as to the use of the words “all purpose”. The resolution of the matter requires the application of the following logic. If an ambiguity exists in relation to the payment of an additional amount, as in this case, and the evidence establishes that there is no mutual intention to pay the additional amount, then it would normally follow that the Commission should not vary the agreement to create an entitlement that is consistent with the intention of only one of the parties. Even if there is no clear mutual intention to not pay the additional amount, it would normally be desirable to resolve an ambiguity to make it clear that the amount is not payable when there is an insufficient basis to find that the parties agreed to pay the additional amount. Therefore, if there was no mutual intention to apply penalty calculations to the allowance, then absent any other compelling circumstance, the company’s application was likely to succeed.”
However, United Voice v MSS Security involved an aviation allowance clause that formed part of an agreement reached through a process of bargaining and can therefore be distinguished from this matter. As I have noted earlier, this matter is somewhat unique in that the term of the Agreement that the Applicant seeks to have varied is an Undertaking rather than a provision agreed by a majority of employees as a consequence of bargaining. While the views of the bargaining representatives were sought and no objections raised, the agreement of the bargaining representatives is not a prerequisite for the Commission accepting an undertaking and it is ultimately a decision for the Commission as to whether the undertaking should be accepted, taking into account the relevant considerations in s.190 of the Act. This distinguishes the matter from a variation application involving a term of the Agreement as negotiated and made. As the Applicant has submitted:[66]
· undertakings are not the product of negotiations and are less likely to take into account the parties’ mutual intentions at the time the Agreement was reached given they are provided to address concerns raised by the Commission;
· while the Commission is obliged by s.190(4) of the Act to seek the views of the bargaining representatives, an undertaking is drafted and provided by one party only and there is no requirement for bargaining representatives to provide their views;
· undertakings are not provided to employees as a part of a seven day access period; and
· undertakings are often provided within compressed timeframes (in this case, four days).
If an ambiguity or uncertainty has been identified, in exercising the discretion as to whether an agreement should be varied, two questions arise: is it appropriate to vary the agreement? If so, what variation is appropriate?[67]
It is apparent that issues arise from the manner in which the Undertaking has been drafted. It is not the role of the Commission to draft undertakings for the employer covered by an agreement in order to address a concern. There may be a variety of forms in which an undertaking to address a BOOT concern may be presented to the Commission and it is the employer that needs to provide the undertaking and make a decision about its form for the consideration of the Commission and so the views of the bargaining representatives can be sought in relation to the undertaking before the Commission makes a decision about whether the undertaking should be accepted.
While a bargaining representative’s views are not determinative as to whether the Commission will accept an undertaking or not, they are a relevant consideration and the bargaining representatives may identify problems with the Undertaking that are relevant to the considerations the Commission is required to take into account in determining whether or not an agreement should be approved.
I consider that these factors may weigh against the exercise of discretion to vary the Agreement and applicants for approval of enterprise agreements should be encouraged to pay close attention to the wording of both the terms of any undertakings provided to the Commission as well as the provisions of the Agreement itself.
However, in the circumstances of this matter, I also consider it appropriate to have regard to meaning of the Undertaking as intended by the framer of the document in the context in which the Undertaking was given.
The Undertaking was provided to the Commission by the Applicant. While Ms Monkhouse’s evidence suggests the Applicant’s lawyers, HWL Ebsworth, “assisted” in the drafting of the Undertaking, I am satisfied that the concern raised by the Commission was the impetus for its drafting. In particular, the Undertaking was provided to address the concern of the Commission in relation to the BOOT concerning part-time and casual employees. The Undertaking was provided unilaterally by the Applicant and is not a term of the Agreement that has arisen as a consequence of bargaining and majority agreement.
The ASU and WAMEU each filed a “Form F18 Declaration of employee organisation in relation to an application for approval of an enterprise agreement (other than a greenfields agreement)” (Form F18), with both unions indicating that they supported the approval of the Agreement, without the inclusion of a term in the form of the Undertaking. The Undertaking did not change the terms upon which a majority of employees covered by the Agreement reached agreement, other than to confer an additional advantage upon some employees in relation to the payment of weekend penalty rates. The variation of the Undertaking in the manner sought by the Applicant would not change the terms upon which the majority of employees covered by the Agreement reached agreement, and which unions supported in their Form F18s, but would merely confine the advantage of the Undertaking to those employees referred to in clause 15.2.2 of the Agreement who work on a part-time and casual basis and who were the subject of the Commission’s concern in relation to the BOOT. The confinement of the variation in this way would not have impacted the Commission’s assessment as to whether the Agreement passed the BOOT.
The Undertaking currently states:
“If the City engages employees in the work areas set out in clause 15.2.2 to work ordinary hours on a Saturday or Sunday, those employees will be paid the following rates:
a) 150% of the minimum hourly rate for all ordinary hours worked on a Saturday; and
b) 175% of the minimum hourly rate for all ordinary hours worked on a Sunday.”
The Applicant wants to vary the Undertaking so that it states:
“Notwithstanding clause 15.2.2, if the City engages part time or casual employees to work ordinary hours in the roles or work areas referred to in clause 15.2.2 on a Saturday or Sunday, those employees will be paid the following rates:
a) 150% of the ordinary hourly rate for all ordinary hours worked on a Saturday; and
b) 175% of the ordinary hourly rate for all ordinary hours worked on a Sunday.”
Just as I am satisfied that it was the intention of the Applicant to extend the application of the Undertaking to employees in roles or work areas referred to in clause 15.2.2 of the Agreement, I am persuaded that the Applicant intended to limit the application of the Undertaking to the employees the subject of the Commission’s concern, being part-time and casual employees.
Having regard to all the circumstances, I consider it appropriate to exercise the discretionary power to vary the Agreement to give effect to the evident intention of the Applicant in providing undertakings to meet the concerns of the Commission in relation to casual and part-time employees captured by clause 15.2.2 of the Agreement.
The next question that arises is what variation is appropriate?[68] I have considered the variation proposed by the Applicant and one concern arises in its drafting. As I have referred to above, the Applicant submitted that the Undertaking refers to the term “minimum hourly rate”, which are not words used in the Agreement, and it is unclear what rate is the “minimum hourly rate”. The ASU submitted that the term “minimum hourly rate” is simply the hourly rate calculated from the minimum rates of pay contained at Annexure 1 of the Agreement and I have earlier found that the reference to “minimum rate of pay per annum” in clause 11.1 of the Agreement lends weight to this submission. The alternative term proposed by the Applicant, being “ordinary hourly rate” is also not defined in the Agreement. Notwithstanding this, the adoption of the term “ordinary hourly rate” would be no less beneficial than the term “minimum hourly rate” and I note that it is used in the context of part-time and casual employees in clauses 8.2.2 and 8.2.3 of the Agreement so will likely have established usage.
Conclusion
I have therefore decided to vary the Agreement in the manner sought by the Applicant. I consider that that considerations of equity, good conscience and the substantial merits of the case favour a decision to apply the variation from the time of operation of the Agreement to give effect to the evident intention of the Applicant in providing undertakings to meet the concerns of the Commission and because the ambiguity and/or uncertainty has a wage related financial effect.
An order to this effect will be issued accordingly. The order will operate on and from 14 February 2022.
I make a final observation that the Agreement has reached its nominal expiry date of 30 June 2022 and the parties are, or will likely soon be, in negotiation for its replacement. The parties may wish to turn their minds to the BOOT concerns raised by the Commission in relation to the Agreement during the next bargaining and agreement making process.
COMMISSIONER
Appearances:
Mr C Beetham of Counsel for the Applicant, instructed by Ms K Groves of MinterEllison.
Mr R Knox for the Australian Municipal, Administrative, Clerical and Services Union.
Mr A Johnson for the Western Australian Shire Councils, Municipal Road Boards, Health Boards, Parks, Cemeteries and Racecourse, Public Authorities, Water Boards Union.
Hearing details:
2022.
Sydney (by Video using Microsoft Teams).
June 22.
[1] AE514858.
[2] [2022] FWCA 373.
[3] See Hobsons Bay City Council [2021] FWC 6037, [27]; The Trustee for ePharmacy Trust T/A ePharmacy [2021] FWC 3447, [13].
[4] Re Tenix Defence Systems Pty Limited Certified Agreement 2001-2004 (PR917548), [28], [32], [35].
[5] Ibid, [29].
[6] Ibid, [31].
[7] Colnvest Ltd v Visionstream Pty Ltd (2004) 134 IR 43, [57].
[8] See Re Civil Construction Corporation Enterprise Agreement (PR939346); SJ Higgins Pty Ltd and Others v CFMEU (PR903843); Re CFMEU Appeal (Print R2431).
[9] Bianco Walling Pty Ltd v Construction, Forestry, Maritime, Mining and Energy Union [2020] FCAFC 50, [67].
[10] Ibid.
[11] Ibid, [68].
[12] Re Tenix Defence Systems Pty Limited Certified Agreement 2001-2004 (PR917548), [32].
[13] Australian and International Pilots Association Re Qantas Airways Limited Flight Crew (Long Haul) Certified Agreement 2005-2006 [2007] AIRC 303, [16]-[17].
[14] Applicant, ‘Attachment to Form F1 – Application’, filed 13 May 2022, [11]-[13].
[15] Applicant, ‘Applicant’s Outline of Argument’, filed 3 June 2022, [5.1]-[5.3].
[16] Ibid, [5.4].
[17] Ibid, [5.8].
[18] Ibid, [5.2(b)], [5.8].
[19] Ibid, [4.3], [6.1].
[20] Ibid, [2.2].
[21] Ibid, [6.2]-[6.6].
[22] Ibid, [5.9].
[23] Ibid, [2.1(d)], [9.1].
[24] Ibid, [10.4].
[25] Ibid, [2.1(e)], [9.2]-[9.3].
[26] Ibid, [10.2(a)].
[27] Ibid, [2.1(g)].
[28] Ibid, [11.3].
[29] Ibid, [11.4]-[11.5], with reference to James Darbey [2021] FWCA 5642, [8] and Queensland Transmission Corporation Limited T/A Powerlink Queensland [2022] FWCA 711, [12].
[30] Ibid, [11.6].
[31] WAMEU, ‘Submissions of the WAMEU’, dated 8 June 2022, [3]-[4].
[32] Ibid, [5]-[9].
[33] ASU, ‘Respondent’s Outline of Argument’, dated 10 June 2022, [4]-[5].
[34] Ibid, [18(b)].
[35] Ibid, [33] with reference to Application by Australian Nursing Federation [2011] FWA 2430.
[36] Ibid, [35] with reference to Hobsons Bay City Council [2021] FWC 6037, [27].
[37] Ibid, [18(a)], [41].
[38] Ibid, [23].
[39] Ibid, [24]-[25].
[40] Ibid, [28].
[41] Ibid, [32].
[42] Ibid, [40] with reference to United Voice v MSS Security Pty Ltd [2016] FWCFB 4979, [23].
[43] [2016] FWCFB 4979.
[44] [2020] FCAFC 50.
[45] Ibid, [50].
[46] Ibid, [67].
[47] Ibid, [73]-[75].
[48] Re Tenix Defence Systems Pty Limited Certified Agreement 2001-2004 (PR917548), [29].
[49] [2020] FCAFC 50, [75].
[50] Applicant, ‘Applicant’s Outline of Argument’, filed 3 June 2022, [5.1]-[5.3].
[51] ASU, ‘Respondent’s Outline of Argument’, dated 10 June 2022, [23].
[52] Applicant, ‘Applicant’s Outline of Argument’, filed 3 June 2022, [5.4].
[53] ASU, ‘Respondent’s Outline of Argument’, dated 10 June 2022, [32].
[54] Re Tenix Defence Systems Pty Limited Certified Agreement 2001-2004 (PR917548), [31].
[55] See Re Civil Construction Corporation Enterprise Agreement (PR939346); SJ Higgins Pty Ltd and Others v CFMEU (PR903843); Re CFMEU Appeal (Print R2431).
[56] Colnvest Ltd v Visionstream Pty Ltd (2004) 134 IR 43, [57].
[57]Bianco Walling Pty Ltd v Construction, Forestry, Maritime, Mining and Energy Union [2020] FCAFC 50, [67]; Cannon Hill Services Pty Ltd v Australasian Meat Industry Employees Union [2016] FWC 7255, [8].
[58] Bianco Walling Pty Ltd v Construction, Forestry, Maritime, Mining and Energy Union [2020] FCAFC 50, [67].
[59] Ibid, [68].
[60] Ibid; Fair Work Act 2009 (Cth), ss.578 and 591.
[61] Applicant, ‘Statement of Evidence of Georgina Monkhouse’, dated 3 June 2022, [19]-[23].
[62] Ibid, [25]-[27].
[63] Re Tenix Defence Systems Pty Ltd Certified Agreement 2001 – 2004 (PR917548), [32].
[64] ASU, ‘Respondent’s Outline of Argument’, dated 10 June 2022, [40] with reference to United Voice v MSS Security Pty Ltd [2016] FWCFB 4979, [23].
[65] [2016] FWCFB 4979, [23].
[66] Applicant, ‘Applicant’s Outline of Argument’, filed 3 June 2022, [10.2].
[67] Australian and International Pilots Association Re Qantas Airways Limited Flight Crew (Long Haul) Certified Agreement 2005-2006 [2007] AIRC 303, [16]-[17].
[68] Ibid.
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