Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Endeavour Energy
[2015] FWCFB 6750
•29 OCTOBER 2015
[2015] FWCFB 6750
The attached document replaces the document previously issued with the above code on 29 October 2015.
Footnote 6 should read: [2015] FWCFB 1981
Associate to Senior Deputy President Drake
Dated 29 October 2015
| [2015] FWCFB 6750 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.604 - Appeal of decisions
Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia
v
Endeavour Energy
(C2015/659)
| Senior Deputy President Drake DEPUTY PRESIDENT LAWRENCE | SYDNEY, 29 OCTOBER 2015 |
Appeal against decision [2015] FWC 1505 of Senior Deputy President Hamberger at Sydney on 9 March 2015 in matter number C2014/1137.
In an application[1] pursuant to section 739 of the Fair Work Act 2009 (the Act) his Honour Senior Deputy President Hamberger had before him for determination three questions regarding the application of a clause contained in the Endeavour Energy Enterprise Agreement 2012 (Agreement) at Appendix B - Allowances. The clause is set out below.
“Electrician’s Licence Allowance
An employee who holds a current Qualified Supervisors Certificate/Electrical Licence or its equivalent and the position requires the incumbent to hold the above qualification to fulfil their duties and the incumbent in the position has received it in accordance with past practice will be paid $31.94 per week from 25 December 2012 and $32.80 from 24 December 2013. This allowance is paid as an all purpose allowance.”
(our emphasis)
In accordance with the parties’ agreement, his Honour identified the three questions before him for decision as follows:
“Are employees in the following categories who hold a Qualified Supervisor’s Certificate entitled to payment of the electrician’s licence allowance provided for in the Endeavour Energy Enterprise Agreement 2012?
1. Employees who were appointed to positions which were advertised as requiring a Qualified Supervisor’s Certificate and/or whose letters of appointment and/or position description at the time of appointment nominate the possession of a Qualified Supervisor’s Certificate/Electrical Licence as a requirement of the position.
2. Employees who hold a Certificate who principally perform work on consumer installations and wiring, including but not limited to those positions specified in Annexure A.
3. Employees who are ordinarily engaged in positions with duties the adequate discharge of any portion of which requires employees to have the qualifications and experience necessary to obtain a Qualified Supervisor’s Certificate, including but not limited to those positions in Annexure B.”
His Honour identified his task as determining the correct interpretation of the clause and then determining how that interpretation applied to various roles. He identified the second basis on which the allowance can be paid as the critical element in dispute.
His Honour summarised the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia’s (CEPU’s) submission as follows:
“… in order to determine whether a particular employee is entitled to receive the allowance, one must examine the duties of the position the employee occupies, and assess whether those duties require ‘the knowledge and skill recognised by the holding of the licence.’ This, the CEPU contends, is consistent with the history of the allowance.”[2]
His Honour summarised Endeavour Energy’s position as follows:
“Endeavour Energy agrees that one must examine the duties of the position that the employee occupies. However whether the employee is required to hold the licence to fulfil these duties is to be determined by reference to the requirements in the applicable legislative scheme.”[3]
His Honour examined the relevant legislation, the history of the allowance, the meaning of “requires the incumbent to hold the licence to fulfil the duties”, and which employees are required by the regulatory regime to have the licence (and are therefore entitled to the allowance). He concluded that an entitlement to the allowance arose only if the regulatory regime required the employee to hold the licence to fulfil their duties and that only the roles identified in paragraph 2 of his conclusion were required by the regulatory regime to have a licence to fulfil their duties. He answered the three questions before him as follows:
“1. If Endeavour Energy currently requires the holder of a position to have a Qualified Supervisor’s Certificate/Electrical Licence (for example, by means of a current position description) then the employee is entitled to payment of the allowance (assuming they have a current licence and the person in that position has received the allowance in accordance with past practice). However, previous advertisements, letters of appointment and superseded position descriptions are not relevant for the purpose of determining whether the employee is currently entitled to the allowance.
2. Employees who hold a licence, are required to do so by the regulatory regime, and who occupy positions in which the incumbent has received the allowance in accordance with past practice, are entitled to be paid the allowance. Based on the evidence presented during the proceedings, only employees who perform one of the following eight roles fit within this category:
Customer Safety Officer;
EFM Customer Installations;
Electrical Fitter Mechanic (Metering);
Emergency Services Officer;
Field Officer - Licensed;
Installation Inspector;
Meter Technician; and
Senior Meter Technician.3. The only employees who are entitled to the allowance are those set out in response to questions 1 and 2 above.” [4]
His Honour’s decision has been appealed by the CEPU. The appeal was listed and heard by this Full Bench in Sydney on 26 June 2015. The CEPU was represented at the appeal, with permission, by Mr I Taylor of Senior Counsel with Mr O Fagir of Counsel, instructed by Mr R Whyburn, solicitor, of New Law Pty Ltd. Endeavour Energy was represented, with permission, by Ms K Nomchong of Senior Counsel, instructed by Mr G Phillips, solicitor, of K&L Gates.
Grounds of Appeal
The Grounds of Appeal are extracted below:
1.“An error in failing to find that the entitlement is one that arises from the duties of each position, arising wherever the duties require in whole or in part the skill and knowledge of a licensed electrician.
2.An error in failing to find that the parties’ mutual intention in drafting the clause was to maintain payment of an allowance on the same basis as it had been paid for decades.
3.An error in failing to find that the respondent employer has over the years required each of its licensed electrician employee to qualify for and hold a licence.
4.An error in finding that the clause is to be read as entitling the employer to remove a substantial part of the income of almost all of its licensed electrician employees by the simple expedient of stating that the licence is no longer required by the employer, in circumstances where their duties have not changed.
5.An error in finding that the content of job advertisements, letters of appointment and past position descriptions which contained a requirement to hold a licence and/or a statement that the allowance would be paid are not relevant for the purpose of determining whether an employee is currently entitled to the allowance, or in the alternative an error in failing to make clear that the rights of those who have contractual based claims arising, inter alia, from such material were not the subject of the proceedings.
6.An error in finding that employees are employed principally to perform work on customer installations within the meaning of regulation 22 of the Home Building Regulation 2004 (NSW) only if they are employed to perform that work “above all”, “pre-eminently” or “for the most part”.
7.An error in failing to uphold (or deal at all) with the contention that, at the very least, the entitlement applies to any employee who was required to hold an electrician’s licence at the time of the introduction of the electrician’s licence allowance provision.
8.An error in failing to uphold (or deal at all) with the contention that the entitlement arises in respect of any employee whose duties require them to comply with various of the respondent’s safe work method statements which contain a requirement that employees undertaking such work must hold an electrician’s licence.”
CEPU Submissions
The CEPU submitted that:
the Full Bench on appeal is required to consider whether Senior Deputy President Hamberger’s determination regarding the application of the Agreement is correct. In particular whether the word “require” in the phrase: “…the position requires the incumbent to hold the above qualification to fulfil their duties” means required by legislation or required by the employer from time to time.
the context of the clause needs to be examined in order to interpret its meaning insofar as it relates to the legislative scheme, the history of the payment, the employer’s requirements and the actual nature of the positions and duties.
it was the parties’ mutual intention in drafting the clause to preserve and maintain the payment of the allowance on the same basis as it had been paid for decades.
the Full Bench should proceed further than his Honour and determine that when a position objectively requires the knowledge and skill identified by the holding of an electrician’s licence, the allowance should be payable in recognition of the high level of training and professionalism of a licensed employee. In characterising the ELA as a margin of skill, the CEPU submitted that the allowance is distinguishable from the Electrical Safety Rule Allowance (ESRA) insofar as the ESRA does not include the wiring rules. Payment of the allowance in these circumstances would not be double dipping.
his Honour erred in finding that entitlement to the allowance is removed if the employer decides that the duties of the job no longer require the holding of a licence. The CEPU tendered numerous examples of position descriptions, job advertisements and job offers to demonstrate that each imposed or referred to a licence requirement. The CEPU asserts that there was no evidence of any change in the nature of the work carried out by the employees to demonstrate that the relevant skills were no longer applicable to the relevant employee’s work, nor was there any evidence of a policy change.
the decision is deficient because it does not find that the Safe Work Method Statements (SWMSs) are applicable to various tasks carried out by employees and that relevant tasks covered by the SWMSs are required to be carried out by a licensed person.
his Honour’s interpretation of the word “principally” is in error. Whether an employee is “…employed principally for the performance of work other than electrical wiring work” is not amenable to a mathematical based calculation of the proportion of time spent on that particular work. The CEPU assert that the appropriate question to be addressed by his Honour was whether work on consumer installations is a principal or essential part of the employee’s duties, and that any employee who routinely or regularly performs work on customer installations is required by statute to hold a licence and is therefore entitled to the allowance.
in summary, the CEPU submit that the allowance is payable whenever the position requires a licence, and that this occurs in circumstances where the position requires the knowledge and skill recognised by the holding of the licence. Furthermore, it would be unjust and capricious to remove payment of the allowance from employees who have received it for many years.
Endeavour Energy Submissions
Endeavour Energy submitted that:
the words of the allowance have a plain and unambiguous meaning.
the requirement to hold an electrician’s licence emerges from the operative provisions of the statutory scheme, or from the employer itself if it specifies it or requires an employee to have a licence in order to perform their duties. To expand the definition of when an employee is required to have an electrician’s licence to perform their duties would create uncertainty and ambiguity.
his Honour’s finding that the term “principally” refers to tasks performed “for the most part” or “above all” was correct, and furthermore, the CEPU’s contention that instead the term refers to tasks performed routinely or regularly is incorrect.
the Full Bench should not accept the CEPU’s assertions that draw upon the meaning and construction of other allowance provisions or from the negotiations preceding the 2010 Agreement, as the CEPU cannot demonstrate a series of agreements between the same parties to establish a common intention.
there are two consequences if the allowance continues to be paid to all electrical employees. Firstly, it would frustrate the employer’s efforts to effectively manage allowances. Secondly, if the allowance is paid as a “margin for skill” to someone who is not required to hold a licence, it would be “double dipping”. This is because of the allowance payable to someone required to work in accordance with the ESR’s. Employees are tested annually on their knowledge of the ESR’s and if they pass they receive an allowance of $120.00 per week. The employer differentiates this from an electrician’s licence, whereby an employee is required to regularly renew their licence and pay a fee, but no further training is required once the licence has been granted.
Endeavour Energy accepted that if it requires an employee, as part of the SMWSs, to perform duties in an area where an electrician’s licence is needed, that is a circumstance in which the allowance would be payable as long as other criteria have been met. However the requirement to hold an electrician’s licence must be a current requirement, and does not attach itself to the employee or the position indefinitely.
in summary, it was Endeavour Energy’s submission that there has been an examination of the allowance criteria, and what triggers an employee’s entitlement to the allowance, rather than a removal of $30 a week from an employee’s wages.
his Honour’s decision does not contain an appealable error and the appeal should be dismissed.
Permission to Appeal
This is an appeal pursuant to s.604 of the Act. This Full Bench must determine whether or not to grant permission to appeal. Permission to appeal must not be granted unless it is in the public interest to do so.
The CEPU submitted that permission to appeal should be granted because the appeal raises an important question as to whether a health and safety obligation could arise from a requirement to hold a particular qualification; because the decision contained significant errors of interpretation; because the decision resulted in a manifest injustice to employees and because the decision had the potential to impact other employers and their employees.
Endeavour Energy submitted that permission to appeal should not be granted because the application did not attract the public interest. It did not involve a broad application or a matter of principle, and its effect was limited to a discrete number of employees. There is insufficient doubt established by the Grounds of Appeal to warrant reconsideration, and there is no substantial injustice arising from the outcome.
We are satisfied that the obligation to pay the allowance, the subject of this dispute, is a significant matter for the parties, and the industry. If his Honour’s decision is correct the financial position of many employees of Endeavour Energy will be significantly adversely affected. If his Honour was in error the financial position of Endeavour Energy will be adversely affected as a result of the continued cost of the allowance, the interruption to its plan to control allowances and the possible effect on any contemplated privatisation of Endeavour Energy. We are satisfied that the resolution of this issue attracts the public interest and we have therefore decided to grant permission to appeal.
Consideration
Concerning the identification of an ambiguity in the terms of an enterprise agreement a recent Full Bench in Australian Meat Industry Employees Union v Golden Cockerel Pty Ltd (Cockerel) provided the following summary of principles:
“[41] From the foregoing, the following principles may be distilled:
1. The AI Act does not apply to the construction of an enterprise agreement made under the Act.
2. In construing an enterprise agreement it is first necessary to determine whether an agreement has a plain meaning or contains an ambiguity.
3. Regard may be had to evidence of surrounding circumstances to assist in determining whether an ambiguity exists.
4. If the agreement has a plain meaning, evidence of the surrounding circumstances will not be admitted to contradict the plain language of the agreement.
5. If the language of the agreement is ambiguous or susceptible to more than one meaning then evidence of the surrounding circumstance will be admissible to aide the interpretation of the agreement.
6. Admissible evidence of the surrounding circumstances is evidence of the objective framework of fact and will include:
(a)evidence of prior negotiations to the extent that the negotiations tend to establish objective background facts known to all parties and the subject matter of the agreement;
(b)notorious facts of which knowledge is to be presumed;
(c)evidence of matters in common contemplation and constituting a common assumption.
7. The resolution of a disputed construction of an agreement will turn on the language of the Agreement understood having regard to its context and purpose.
8. Context might appear from:
(a)the text of the agreement viewed as a whole;
(b)the disputed provision’s place and arrangement in the agreement;
(c)the legislative context under which the agreement was made and in which it operates.
9. Where the common intention of the parties is sought to be identified, regard is not to be had to the subjective intentions or expectations of the parties. A common intention is identified objectively, that is by reference to that which a reasonable person would understand by the language the parties have used to express their agreement.
10. The task of interpreting an agreement does not involve rewriting the agreement to achieve what might be regarded as a fair or just outcome. The task is always one of interpreting the agreement produced by parties.”[5]
We have considered the principles enunciated by the Full Bench in Cockerel and have applied those principles to the facts of this appeal and the questions before his Honour.
Another Full Bench in Essential Energy V Australian Municipal, Administrative, Clerical and Services Union; Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia; the Association of Professional Engineers, Scientists and Managers, Australia (Essential Energy) [6] has enunciated a further principle:
“… It is not permissible to take into account the conduct of parties which occurs after an industrial instrument is made as an aid to interpret that industrial instrument.”
We have considered the circumstances surrounding the creation of the 2012 Agreement when determining whether there is an ambiguity in the subject clause. We have, in particular, considered the history of the payment of this allowance preceding notification of this dispute. We have not taken into account the conduct of the parties after the relevant clause was inserted into the Agreement.
We are satisfied that the language of the clause has a plain meaning and is not ambiguous.
However, the construction of the words of the clause is disputed. We have considered the construction of the clause and resolution of the meaning of the words of the clause having regard to its context and purpose. Having done this we are persuaded that his Honour’s conclusion as to the construction and interpretation of the clause is in error.
His Honour concentrated his consideration of the clause on the words “the position requires the incumbent to hold the above qualification to fulfil their duties”. In particular he considered what was meant by the word “requires”. His Honour concluded that the clause should be read as meaning “required by law”.
“There is nothing complicated about the meaning of the phrase ‘requires the incumbent to hold the licence to fulfil the duties’ it means in simple English, you need a licence to be able to do your job. No reason to add a gloss.”[7]
Until Endeavour Energy changed its policy concerning the manner in which the allowance was paid, the allowance had been applied for many years so that any person who occupied a position which had required the holder to have a licence on commencement was paid the allowance.
Prior to the 2010 Agreement the Electrical Trades Union approached Endeavour Energy seeking the insertion into the award of a provision articulating the entitlement. That request was refused but, in July 2009, by way of compromise, Endeavour Energy confirmed by correspondence that the allowance would be paid in accordance with past practice and that an employee, the holder of the current Electrician’s License or its equivalent, would be paid the allowance.
In the 2010 Agreement a specific clause was inserted confirming the allowance. This was rolled over into the 2012 Agreement. The allowance was continued to be paid in accordance with past practice until the development of the recent dispute which brought the matter before his Honour Senior Deputy President Hamberger.
There has been no satisfactory explanation why if, as submitted by Endeavour Energy, the meaning of the clause is clear and unambiguous and has always had the meaning argued for by Endeavour Energy, it has paid the allowance in a manner contrary to its present contention. The only explanation provided is a conceded lack of intestinal fortitude on the part of management until an initiative by management identified an opportunity for savings, which then led to the present dispute regarding the application of the clause.
The subject of the sentence referred to by his Honour is “the position”. We are satisfied that primary consideration should be given to the meaning of what is referred to as “the position” in the context of the 2012 Agreement.
“Electrician’s Licence Allowance
An employee who holds a current Qualified Supervisors Certificate/Electrical Licence or its equivalent and the position requires the incumbent to hold the above qualification to fulfil their duties and the incumbent in the position has received it in accordance with past practice will be paid $31.94 per week from 25 December 2012 and $32.80 from 24 December 2013. This allowance is paid as an all purpose allowance.”
We are satisfied that the clear meaning of “the position” is that an employee must have needed the licence to obtain their position. There is no reference in the clause to any legislative requirement to hold a licence. We are satisfied that the position referred to is the employment position offered by the employer and filled by the employee. We are satisfied that this is what an ordinary reasonable person would understand the words to mean.
His Honour concluded:
“… It means in simple English, you need a licence to be able to do your job. No reason to add a gloss.”
(our emphasis)
The clause does not say what his Honour says it means. A meaning cannot be inferred in that fashion. There is no amplification of the word “position” in the clause. We are satisfied that the plain meaning of the clause is that the reference to position is a reference to a position with the employer, which may have had certain prerequisites, and was filled by the employee.
We are satisfied that it is his Honour who has imported a gloss to the words. His Honour has imported a meaning into the clause which does not arise from words of the clause. If a legislative requirement had been intended, the necessary words could easily have been inserted into the clause.
An employee’s position may require skills, training, certificates, degrees and licences above and beyond what is legislatively required for the performance of the work involved in the position. In this case Endeavour Energy has previously required an applicant for a position to hold a licence in various roles, even though the work they may perform may be exempted from the legislative requirement for a licence and even though it’s present position is that the licences are no longer required as prerequisites for positions except where required by the legislation.
Conclusion
It clear that persons employed principally for work on electrical equipment owned or used by an electricity supply authority are not required to have a licence,[8] but there is no agreement between the parties as to the meaning of “employed principally”. Unfortunately, this is a matter that will probably have to be determined position by position and we have determined that this issue is best determined by a member of the relevant panel at first instance. We are satisfied that this is a grandfathering provision and the question of identifying to which employees that grandfathering provision applies will also have to be determined.
It is clear that the requirements of the respondent as to the licensing or otherwise of its employees have changed. Negotiations should take place regarding the future operation of the agreement classifications and the future needs of Endeavour Energy.
We are satisfied that the conclusion of his Honour was wrong and amounted to an appealable error regarding the construction of the clause. The appeal is allowed. The decision of his Honour Senior Deputy President Hamberger is set aside. The industrial situation between these parties may well be amenable to the assistance of the Fair Work Commission in interest based bargaining. We return the application to the relevant Panel Head.
SENIOR DEPUTY PRESIDENT
[1] C2014/1137
[2] [2015] FWC 1505 para 7
[3] Ibid para 7
[4] Ibid para 36
[5] [2014] FWCFB 7447 para 41
[6] [2015] FWCFB 1981
[7] Ibid para 28
[8] Ibid para 18
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