Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v KDR Victoria Pty Ltd T/A Yarra Trams

[2018] FWC 968

[2018] FWC 968

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.739—Dispute resolution

Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia
v
KDR Victoria Pty Ltd T/A Yarra Trams
(C2017/4528)

COMMISSIONER GREGORY MELBOURNE, 14 FEBRUARY 2018

Alleged dispute in relation to the application of the High Voltage Operating Allowance to relevant employees.

Introduction

[1] This dispute concerns the application of the High Voltage Operating Allowance (“the HVO Allowance”) in sub clause 19.6 of Part One of the Yarra Trams Enterprise Agreement 2015 – Rolling Stock, Infrastructure, Administration, Technical & Professional 1 (“the Agreement”) that covers the parties. The Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (“the ETU”) claims all employees engaged as Power Control Operators, Sub Station Maintainers or Technical Officers, who meet the criteria in sub clause 19.6 in Part One, should receive the Allowance.

[2] However, Yarra Trams claims the entitlement only exists in respect of the “Salaried Employees” classification in Appendix Four of Part Four of the Agreement, and this is evident based on past practice.

[3] The matter was dealt with in conference on 19 September 2017, but was unable to be resolved. The ETU subsequently requested it be dealt with by arbitration and it was set down for hearing, with directions issued for filing and service of submissions and evidence.

[4] Ms Lucy Weber appeared on behalf of the ETU. Mr Nicholas Barkatsas from the Victorian Chamber of Commerce and Industry appeared on behalf of Yarra Trams.

The Submissions and Evidence

The ETU – Submissions and Evidence

[5] The Agreement is arranged in four Parts. Part One deals with “Common Conditions.” Parts Two, Three and Four set out terms and conditions which apply to particular categories of employment covered by the Agreement, i.e. Part Two – Rolling Stock, Part Three – Infrastructure, and Part Four – Administration, Technical and Professional Work. Each Part then refers to various associated Appendices, which also contain further terms and conditions that apply to the employees covered by each Part.

[6] The interaction between the various parts of the Agreement and the Appendices are dealt with at clause 2 in Part One in the following terms:

“2. Scope and Application

2.1 Part One of the Yarra Trams Enterprise Agreement 2015 – Rolling Stock, Infrastructure, Administration, Technical & Professional, Common Conditions, applies to all Yarra Trams employees who are employed in a classification contained within this Agreement.

2.2 The Common Conditions (Part One of the Agreement) must be read in conjunction with the relevant Part(s) of the Agreement applying to the workgroup of employees concerned and the relevant conditions contained in their respective Appendix.

2.3 When reading the various Parts and Appendices the following applies:

(a) To the extent of any inconsistency the provisions of Parts Two, Three and Four prevail over the provisions of Part One.

(b) To the extent of any inconsistency the provisions of a Part prevail over the provisions of an Appendix.

2.4 This Agreement expressly excludes employees nominated by Yarra Trams as people managers.” 2

[7] Clause 19 in Part One sets out various allowances which apply as common conditions under the Agreement. The HVO Allowance is dealt with in clause 19.6 of Part One in the following terms:

“19.6 High Voltage Operating Allowance

An employee that is an authorised high voltage operator and who may be required to issue high voltage access permits shall be paid the High Voltage Operating Allowance which will be payable for all purposes.” 3

[8] Sub clause 19.11(a)(iv) also provides that the HVO Allowance is adjusted by the same percentage amount and at the same time as the increase in wages. The value of the allowance is then set out in Schedule B (Allowance Schedule) to the Agreement. It currently provides for an amount of $2.37 per shift or $417.80 per annum.

[9] Appendix Four of Part Four, which applies only to Salaried Employees, also makes reference to a High Voltage Operating Allowance in the following terms:

“4.3 High voltage operating allowance

Employees who are authorised high voltage operators and who may be required to issue high voltage access permits shall be paid the following allowances which will be payable for all purposes:

(a) Where they perform such duties more than 26 times per year and whilst they are considered regular operators $387.90 per annum.

(b) Where they perform such duties less than 26 times per year $2.21 per shift.” 4

[10] The ETU continues to submit that employees who are authorised high voltage operators, and who may be required to issue high voltage access permits, include:

•  Network Operators (Power Control Operators), who work in the Control Room of Yarra Trams Power Centre. There are currently 19 employees working in this role.

•  Workers in the Sub – Station, including 2 Technical Officers and 4 Sub – Station Maintainers.

[11] The Power Control Operators are covered by Part Three of the Agreement and Appendix Two. The Technical Officers are covered by Part Four and associated Appendix Two. The Sub – Station Maintainers are covered by Part Three and associated Appendix Three.

[12] The ETU also submits that there may be other employees who satisfy the criteria in regard to the HVO allowance, however, the roles identified above encompass those employees that it is aware of who perform this work.

[13] The ETU continues to submit that the principles to be applied when interpreting an enterprise agreement were dealt with comprehensively in the recent Full Bench decision of “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU) v Berri Pty Limited 5(‘Berri’). It makes reference to the principles enunciated by the Full Bench at paragraph [114], and then considers how they should be applied in this matter.

[14] It submits at the outset that the HVO Allowance entitlement, and its place within the Agreement, is clear and unambiguous. In its submission sub clause 19.6 makes clear the HVO Allowance applies to an Authorised High Voltage Operator, who may be required to issue high voltage access permits. The use of the word “may” indicates the allowance is not predicated on the actual issuing of permits, or how frequently this occurs, but instead encompasses those employees who “may be required” to issue high voltage access permits, and are authorised to do so.

[15] In addition, when the sub clause is considered in conjunction with clause 2 in Part One of the Agreement it is clear that it is a “common condition,” and is not inconsistent with any other terms in other Parts of the Agreement, or the attached Appendices. It should therefore apply to any eligible employees covered by any Part of the Agreement.

[16] It also submits that it operates consistently with the Salaried Employees HVO Allowance in Appendix Four of Part Four, and those provisions prevail for employees covered by that Appendix, being Salaried Employees engaged as Senior Officers. However, it also submits that:

“The point is the only other part or appendix which refers to an HV allowance or to an allowance for the type of work that we're talking about is Appendix 4, and we accept that there's an inconsistency between Part 1 and that appendix and that for employees covered by Appendix 4, the allowance in Appendix 4 will prevail. But, we can't move backwards and say that because there is an allowance in Appendix 4, somehow the common condition doesn't apply. That is, in our submission, simply inconsistent with the plain wording of clause 2.” 6

[17] It continues to submit that while Appendix Four of Part Four details how the allowance is to apply to employees covered by that Part, the common conditions in Part One also apply to any other employee who qualifies to receive the allowance.

[18] The ETU also submits that the quantum of the HVO Allowance is clearly set out in Schedule B and, “If any ambiguity arises, it’s from the fact that Schedule B says that the allowance can be paid in one of two ways, but that doesn’t make the allowance itself ambiguous.” 7 It continues to submit that this does not mean that it has no application, “...it just means it may be applied in one of two ways.”8

[19] It also submits that the fact that some employees can also be entitled to the switching allowance, as well as the HVO Allowance, is of no relevance. In its submission the provisions are not ambiguous or susceptible to more than one meaning, and the placement of the clauses within the overall structure of the Agreement is clear and unambiguous. In these circumstances it is not appropriate for Yarra Trams to attempt to re-write the Agreement, and the subjective intentions or expectations of the parties are irrelevant. In addition, evidence of the surrounding circumstances should not to be admitted to contradict the plain language of the Agreement. It also submits that any failure to raise the dispute at an earlier time is not sufficient to establish or support the existence of a common understanding. The principles in Berri instead make clear that post agreement conduct, which amounts to little more than the absence of a complaint or common inadvertence, is insufficient to establish a common understanding.

[20] The ETU accordingly requests that the Commission make a determination confirming that the HVO Allowance applies to the employees referred to in its application.

Mr Aaaron Keeghan

[21] Mr Keeghan is a Power Network Operator and has worked in this role with Yarra Trams since June 2012. He also states that he is an “Authorised High Voltage Operator.” In this role he is authorised to work on high-voltage equipment within the Yarra Trams network. When high-voltage equipment needs to be accessed electrical access permits must first be issued by an Authorised High Voltage Operator. This authorisation is provided by Yarra Trams after the requisite training has been completed. This also involves refresher training every three years.

[22] Electrical access permits may be required in a diverse range of circumstances. Therefore, they need to be issued by whichever Authorised High Voltage Operator is available at the time. This might be a Power Network Operator, a Technical Officer, or a Substation Maintainer, depending on the nature and location of the problem.

[23] Mr Keegan said he had never received the HVO Allowance, despite being an Authorised High Voltage Operator who could be required to issue high-voltage access permits.

[24] While referring to himself in his witness statement as an Authorised High Voltage Operator he acknowledged in cross-examination that the term “Authorised Electrical Operator” was most commonly used in the workplace. 9 He also confirmed that since 2002 he understood that it had become a mandatory training component for Power Network Operators to be trained on high-voltage apparatus. This was known as the Level A authorisation. He also understood the claim for the High Voltage Operating Allowance “has been going since 2002,”10 but it was also included in the Union’s log of claims in 2012. He also understood the allowance was included in the common conditions in the Agreement in line with the reclassification of Power Control Operators, and all other operators performing high-voltage work.

[25] He also indicated in response to a question about why the dispute was now being pressed that, “my evidence is that I am now claiming for it as I am aware of it and have the time to do so.” 11

Mr Stephen Diston

[26] Mr Diston is a Branch Organiser with the ETU and has responsibility for its members employed by Yarra Trams. He claims that he was involved in bargaining for the 2015 Agreement, together with another ETU official who has since left the organisation. However, he was not involved in bargaining for the 2012 Agreement.

[27] Mr Diston agrees with the evidence of Mr Moore that during the negotiations for the 2015 Agreement it was agreed that the following words would be removed from the previous Agreement:

•  Sub clause 3.5 of Part Three which detailed the wage rates for Power Control Operators: “Yarra Trams, employees and their representatives in conjunction with an agreed independent and suitably qualified competency and skills based auditor will undertake a review of the Power Control Operator classification structure”; 12 and

•  Sub clause 19.6 which refers to the High Voltage Operating Allowance: “the application of this allowance will be considered as part of the PCO classification review detailed in clause 3.5 of Part Three.” 13

[28] Mr Diston said his recollection is that these words were removed because the parties agreed to no longer pursue a classification review of Power Control Operators. However, this decision had nothing to do with the application, or non-application, of the High Voltage Operating Allowance. The review was instead a separate exercise which was intended to review the classifications by reference to the National Metals Engineering Competencies Framework. In addition, there was nothing said or agreed about who was entitled to receive the HVO Allowance, and the ETU would not have agreed to an outcome that concluded it only had application to staff covered by Appendix Four of Part Four. In addition, there was no discussion, or any common understanding, in those negotiations about who the HVO Allowance applied to, and he could not recall any discussions at all about the application of the allowance.

[29] He also states that the allowance was not referred to in any of the “changes” 14 documents that were distributed to employees after the Agreement was concluded because it was not a new allowance. It was also not included in the Union’s log of claims for the 2015 Agreement for the same reason.

Yarra Trams – Submissions and Evidence

[30] Yarra Trams acknowledges that the relevant principles to be applied to the interpretation of an enterprise agreement are set out in the Full Bench decision in Berri. However, it submits at the outset that clause 19.6 does not have application to the employees represented by the ETU for the following reasons:

•  The designation of “Authorised High Voltage Operator” does not exist within the business.

•  Clause 19.6 when considered in the context of the entire Agreement is ambiguous in its application and operation.

•  The “objective framework of surrounding circumstances” 15 demonstrates that the allowance was never at intended to apply to the ETU’s members, and it is instead a “legacy provision”16 that derives from industrial agreements that predated privatisation of Victoria’s public transport system.

•  The employees represented by the ETU are already compensated by a separate allowance related to the attainment of an enterprise specific authorisation pursuant to an enterprise specific set of rules.

•  They receive a higher allowance which is intended to “cover the field.” 17

[31] In terms of the structure of the Agreement Yarra Trams acknowledges that it is organised into four Parts. Part One contains what are described as “common conditions,” and Parts Two, Three and Four then set out terms and conditions which are applicable to specific workgroups covered by those Parts. Parts Two, Three and Four also refer to associated Appendices. The Agreement also indicates that Parts Two, Three and Four prevail over Part One and, in addition, the terms in a Part of the Agreement prevail over the provisions in an Appendix.

[32] Yarra Trams next notes that sub clause 2.2 states as follows:

“The Common Conditions (Part One of the Agreement) must be read in conjunction with the relevant Part(s) of the Agreement applying to the work group of employees concerned and the relevant conditions contained in their respective Appendix.” 18

[33] It continues to submit that this sub clause is not qualified by the words “to the extent of any inconsistency,” 19 in contrast to the next sub clause, which does include these words. It states:

“When reading the various Parts and Appendices the following applies:

(a) To the extent of any inconsistency the provisions of Parts Two, Three and Four prevail over the provisions of Part One.

(b) To the extent of any inconsistency the provisions of a Part prevail over the provisions of an Appendix.” 20

[34] Yarra Trams continues to submit that the Commission has previously determined that “read in conjunction with” is not the same as “incorporated into,” and that “read in conjunction with” is ambiguous, as it is capable of both interpretations. 21

[35] It continues to submit that Part One cannot stand alone in all circumstances, and the conditions that apply to employees must be determined having regard to other Parts and/or Appendices of the Agreement. The Agreement makes clear that not all allowances in clause 19 are intended to apply to all employees, and the entitlement must instead be considered in conjunction with the relevant terms in each Part or Appendices before they can “be construed accurately and applied correctly.” 22 It then makes reference to each of the allowances dealt with in clause 19 of Part One, and submits that “… the inconsistent nature of how the allowances within clause 19 of Part One are referenced is a contextually relevant factor in construing the disputed allowance and its reliance on the applicable Part and Appendix Four its operation and application to specific employees.”23

[36] Yarra Trams continues to submit that the operation of sub clause 19.6, and its place in the Agreement, is ambiguous. It cites two reasons, in particular, in support of this submission. Firstly, on a plain reading of the Agreement sub clause 19.6 does not provide for the quantum or frequency of payment. While an amount is specified in Schedule B, this does not settle the issue definitively, as it provides for a per shift or per annum payment, without further clarification about which method is to be utilised and when.

[37] It continues to submit that Appendix Four states unambiguously that “This Appendix applies only to employees to whom it is expressed to apply in the “Appendices” clause of the respective Parts of this Agreement.” 24 In its submission these words have a plain meaning, and Appendix Four cannot apply to employees who it is not expressed to apply to. Therefore, it cannot apply to the employees in the way the ETU contends. Those employees fall under Part Four of the Agreement, and those terms override the terms of an applicable Appendix to the extent of any inconsistency. However, the Application clause in Part One does not contemplate what occurs in the event of an inconsistency between a term of an Appendix, which does not apply to a particular employee, and the term of a Part, which does cover their employment. It submits, in conclusion, that this creates ambiguity.

[38] It also notes that the employees represented by the ETU fall under Parts Two and Three of the Agreement, with the applicable Appendices being Appendix Two or Three. Clause 19.6 does not cover the field, and Appendix Four of Part Four cannot be relied upon for employees not falling within its coverage. For this reason the clause is ambiguous and evidence of the surrounding circumstances can be considered in accordance with the decision in Berri.

[39] It next submits that the evidence makes clear that the position or classification of “Authorised High Voltage Operator” does not exist within the business, and has not existed since at least 1997. In addition, there is no such permit as a “High Voltage Access Permit.” For example, it is self-evident that the designation requires authorisation, however, there is no indication about who the authorisation is to be provided by. For these reasons the clause is again ambiguous, and evidence of the surrounding circumstances can be considered.

[40] Yarra Trams emphasises again that after ambiguity is identified evidence of the surrounding circumstances can be admitted. It submits that Mr Moore’s evidence about the structure of the Agreement, and the 2012 and 2015 bargaining rounds, are of particular relevance in this context. It continues to submit that the evidence makes clear that the HVO Allowance was inserted into Part One of the Agreement in error, and this was not picked up at the time the reference to the proposed PCO review was removed from the Agreement. Yarra Trams also notes that the Operators are already entitled to the Electrical Operator Switching Allowance in sub clause 19.3 of Part One, which already encompasses the functions referred to in sub clause 19.6.

[41] It refers to the evidence of Mr David Moore in respect of those relevant “surrounding circumstances,” 25 and submits that it provides support for the following conclusions.

•  Various collective agreements and awards were consolidated prior to privatisation of the business. This is evident from the current structure of the Agreement.

•  The employees to be covered by the Agreement were never informed in the access period that the Authorised High Voltage Operator allowance in Appendix Four was to have broader application than to the Salaried Officers it applies to by virtue of Appendix Four in Part Four.

•  There was, however, a broad understanding that the electrical switching allowance in Part One applies, and continues to apply, to the relevant employees.

•  The post agreement conduct of the parties demonstrates a consensus that the allowance did not apply to any employees, other than those classified as Salaried Officers and dealt with under Appendix Four of Part Four.

•  This does not involve rewriting the Agreement to give effect to an externally derived conception of the parties’ intention or purpose, but demonstrates instead that the inclusion of the reference to the allowance in clause 19.6 of Part One was an error.

[42] It submits, in conclusion, that the correct application and interpretation of the disputed clause is that it continues to apply to those employees it has always been expressed to apply to, being those Salaried Officers falling under Appendix Four of Part Four of the Agreement.

[43] Yarra Trams finally makes reference to the Commission’s obligations to take into account equity, good conscience, and the merits of the matter in performing its functions. It notes in this context that the employees represented by the ETU are already compensated by way of the electrical switching allowance on a per annum basis, by an amount that is more than double that provided for by clause 19.6. In addition, during the course of bargaining for both the 2012 and 2015 Agreements no claim was ever made, or any discussion had, about the High Voltage Operating Allowance applying to a broader group of employees than those it has historically applied to under past Agreements, including the pre-privatisation enterprise agreements.

Mr David Moore

[44] Mr Moore was employed by Yarra Trams as its Employment Relations Manager from November 2001 until his recent retirement on 3 November 2017. The Yarra Trams Union Collective Agreement 2006 26 was the first time a single stand-alone Agreement had been put in place for all Yarra Trams employees. It was accordingly structured around several Parts covering the four functional workgroups in the business. These were intended to reflect the arrangements contained in previous Agreements. In addition, each Part called up relevant Appendices, which reflected the respective Federal Award conditions that applied to the employees prior to consolidation under the 2006 Agreement. This structure continued in the Agreements put in place in 2009, 2012 and 2015.

[45] Part One in each of the Agreements negotiated since 2006 has also contained “common conditions.” 27 They were “intended to be a consolidation of various entitlements across all the different Parts, however was always subservient to the specific components of the specific Parts (Two to Five).”28 In addition, since the establishment of the 2006 Agreement, the specific Parts of the Agreement (Two, Three and Four) prevail over the common conditions in Part One, and the terms in Parts Two, Three and Five also prevail over the associated Appendices. This reflects the intention that a negotiated agreement entitlement prevails over the former Award conditions, which are now reflected in the attached Appendices.

[46] Mr Moore’s witness statement continues to indicate that Appendix Four in the 2015 Agreement applies only to employees under Part Four of the Agreement. In addition, the HVO Allowance derives from the Railways Salaried Officers Award 1960, which applied to Salaried Officers employed by the then State Transport Authority, which was the predecessor to the Public Transport Corporation. Some of these employees later transferred to Yarra Trams during the privatisation process and the industrial instrument transferred with them.

[47] Mr Moore said that during the bargaining process leading up to the establishment of the 2012 Agreement the allowance was briefly discussed because no party had a clear understanding about who it applied to, or why it remained in the Agreement at all. For this reason it was agreed it would be considered as part of a broader classification review that was to take place during the life of the Agreement, and this intention was reflected in sub clause 17.6 in Part One of the 2012 Agreement. As such it was not costed or considered by Yarra Trams to be a new allowance that was applicable to a specific subset of employees. It was never referred to in any of the “Agreement Change” documents circulated to employees about either of the 2012 or 2015 Agreements. He also rejected the suggestion in his examination in chief that the claim for the allowance had been part of the 2015 negotiations. He stated instead, “the first time that I became aware of a claim for high voltage allowance is as a result of Mr Diston, in a meeting with myself and another Yarra Trams employee post 2015, being told that he had instructed his delegate, Aaron, to have a read through the agreement to see if there were any allowances or any payments or any terms or conditions in the agreement that were not being paid to him and, as result of that, my understanding is that Aaron had identified that there was one allowance, the high voltage allowance, which he was not being paid and had forwarded that information on to Mr Diston, and that was the genesis of the claim that we’re currently dealing with.” 29

[48] In addition, the allowance did not form part of the Union’s log of claims for the 2015 Agreement.

[49] He also indicated in cross examination that the high-voltage allowance had never been paid to anyone at Yarra Trams as far as he was aware, although if there was a Salaried Officer(s) working under Part Four of the Agreement then he/she should be paid the allowance in accordance with Appendix Four. He also stated in response to a question from the Commission that Appendix Four of Part Four had been included in the Agreement because at the time of privatisation a number of individuals had come from the railway industry and “… took with them their terms and conditions of employment that they had with their previous organisation.” 30 However, he was not aware of any existing employees at Yarra Trams covered by Appendix Four of Part Four.

Mr Frank Denino

[50] Mr Denino has been employed by Yarra Trams and its predecessors for 28 years. He is currently employed as Team Manager, Overhead, and has been in this role since April 2013.

[51] The Overhead team maintain the overhead network, including trolley wire, feeder cables and associated infrastructure assets. The employees in the team are classified as Line Workers and are deployed across the network, as needed. The Substation Maintenance team contains both Substation Maintainers, who are fitters by trade, and Technical Officers, who typically have a Diploma of Electrical Technology as a minimum qualification.

[52] After reviewing the witness statement provided by Mr Keeghan, Mr Denino stated that Yarra Trams has never had employees classified as “Authorised High Voltage Operators,” and the term is not used in any internal training or other documentation. In Yarra Trams “Yellow Book,” which contains all safety practices and procedures for workers who may work in the vicinity of electrical apparatus, there is no difference between high voltage and other voltage electrical access permits. In addition, all of the roles listed in Mr Keeghan’s statement would be entitled to receive the electrical switching allowance provided for by the Agreement.

[53] He also said Appendix Four of Part Four of the Agreement “was a legacy provision” 31 that remained from when the organisation employed some former Public Transport Corporation Rail Salaried Officers, who joined from the rail authority.

[54] Mr Denino also stated that he could not recall any mention of the allowance being raised during the 2012 bargaining round, and he was always of the understanding that the Level A operators receive the higher electrical switching allowance.

[55] Mr Denino also indicated in cross examination that the Level A operators were not the only employees able to issue electrical access permits, and the applicable training package covers all operators who are able to issue these permits.

Consideration

[56] The evidence provided by the parties in this matter makes clear that the High Voltage Operating Allowance, that is at the heart of the dispute, is not being paid to any employee at Yarra Trams at this time. In addition, the evidence of Mr Moore and Mr Denino, who has been employed by Yarra Trams and its predecessors for more than 28 years, indicates it has not been paid to any employee, as far as they are aware, during the time they have been employed. These circumstances are not necessarily of relevance to the determination of this matter. They are simply referred to as a matter of fact.

[57] One thing that both parties are in agreement about is that the principles enunciated by the Full Bench in Berri are to be applied in interpreting the terms and conditions contained in the Agreement. The ETU submits that the relevant provisions have a plain and ordinary meaning and, in accordance with the principles in Berri, should be applied in accordance with that plain and ordinary meaning. Yarra Trams has a different view. It submits the relevant provisions, and their place in the structure of the Agreement, are ambiguous and the principles in Berri entitle the Commission to have regard to the surrounding circumstances.

[58] Yarra Trams also submits that the Commission’s obligation to have regard to “equity, good conscience and merits of the matter” 32 is also of particular relevance in the context of the present application.

[59] I deal first with the decision of the Full Bench in Berri and the principles to be applied in determining this application. The Full Bench commenced its review of those principles by noting, “The construction of an enterprise agreement, like that of a statute or a contract, begins with a consideration of the ordinary meaning of the relevant words. The disputed words must be construed in the context of the agreement as a whole.” 33 In this context it referred to the decision in Amcor Limited v CFMEU.34

[60] It also noted that, as a general principle, all of the words contained in an enterprise agreement must, prima facie, be given some meaning and effect. It continued to note:

“Such an approach accords with the principles of statutory construction, and, as a general proposition, the principles developed in the general law in the context of the interpretation of statutes are applicable to the interpretation of enterprise agreements.” 35

It also noted that:

“There is a long line of authority in support of the proposition that a ‘narrow or pedantic’ approach to the interpretation of industrial instruments (such as enterprise agreements) is to be avoided, and that ‘fractured and illogical prose may be met by a generous and liberal approach to construction.” 36

It continued to note,

“A consequence of such an approach may be that some principles of statutory construction have less force in the context of construing an enterprise agreement.” 37

[61] In this context it referred to the decision in Shop, Distributive and Allied Employees’ Association v Woolworths Limited, 38 which observed that the processes of bargaining and agreement making can mean that consistency of wording is often absent, and the same words can be used in different provisions with different meanings.

[62] The Full Bench finally concluded that the Agreement before it was ambiguous. It was accordingly permissible to consider the evidence of surrounding circumstances as an aid to the task of interpreting the Agreement. However, it continued to note, “The admissibility of evidence of the surrounding circumstances is limited to evidence tending to establish objective background facts which were known to both parties and the subject matter of the contract. Evidence of such objective factors is to be distinguished from evidence of the subjective intentions of the parties, such as statements and actions of the parties which are reflective of their actual intentions and expectations. As Mason J observed in Codelfa:

‘… when the issue is which of two or more possible meanings is to be given to a contractual provision we look, not to the actual intentions, aspirations or expectations of the parties before or at the time of contract, except insofar as they are expressed in the contract, but to the objective framework of facts within which the contract came into existence, and to the parties’ presumed intention in this setting.” 39

[63] It then referred to the matters identified in Golden Cockerel 40 as evidence of relevance to the objective framework of facts including:

“(i) 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;

(ii) notorious facts of which knowledge is to be presumed; and

(iii) evidence of matters in common contemplation and constituting a common assumption.” 41

[64] It continued to note, “Admissible extrinsic material may be used to aid the interpretation of a provision in an enterprise agreement with a disputed meaning, but it cannot be used to disregard or rewrite the provision in order to give effect to an externally derived conception of what the parties’ intention or purpose was.” 42 In this context it referred to the often cited decision in Kucks v CSR Limited.43

[65] The Full Bench also made reference to the different structure of agreement making that now exists under the current legislation noting that the parties to agreements are no longer simply an employer and an employee organisation. An Agreement is instead now “made” 44 when the majority of employees to be covered have been asked to approve the Agreement and the majority of those vote in favour. This accordingly makes it more difficult to distil a common understanding among all of the employees that are covered by a particular Agreement at the time it is made. It follows that:

“The diversity of interests involved in the negotiation and making of enterprise agreements warrants the adoption of a cautious approach to the admission and reliance upon evidence of positions advanced during the negotiation process.” 45

[66] It also noted that, “The admissibility of the post-contractual conduct as an aid to the construction of a contract is a somewhat vexed issue, in respect of which no clear line of authority has emerged.” 46 It concluded in response at [106]:

“In the industrial context it has been accepted that, in some circumstances, subsequent conduct may be relevant to the interpretation of an industrial instrument. But, consistent with the view expressed by Santow J in Spunwill, the post-contractual conduct must be such as to found a common understanding – a settled interpretation accepted by the parties.” 47

[67] The Full Bench finally indicated in conclusion at [111]:

“We have given consideration to the resolution of the ambiguity in the 2014 Agreement, having regard to the evidence before us. We have not been persuaded by the arguments advanced by either the AMWU or Berri. The admissible extrinsic evidence of the surrounding circumstances is of limited assistance. There is a paucity of evidence regarding the negotiation of the 2014 Agreement and what, if anything, the employees covered by the agreement were told about the laundry allowance. In particular, there is no evidence of the explanation provided to the relevant employees, (pursuant to s.180(5)), of the terms of the 2014 Agreement and the effect of those terms.” 48

[68] As indicated, it also decided to modify the principles set out in Golden Cockerel as a consequence of its observations. It accordingly concluded:

“[114] The principles relevant to the task of construing a single enterprise agreement may be summarised as follows:

1. The construction of an enterprise agreement, like that of a statute or contract, begins with a consideration of the ordinary meaning of the relevant words. The resolution of a disputed construction of an agreement will turn on the language of the agreement having regard to its context and purpose. Context might appear from:

(i) the text of the agreement viewed as a whole;

(ii) the disputed provision’s place and arrangement in the agreement;

(iii) the legislative context under which the agreement was made and in which it operates.

2. 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.

3. The common intention of the parties is sought to be 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, without regard to the subjective intentions or expectations of the parties.

4. The fact that the instrument being construed is an enterprise agreement made pursuant to Part 2-4 of the FW Act is itself an important contextual consideration. It may be inferred that such agreements are intended to establish binding obligations.

5. The FW Act does not speak in terms of the ‘parties’ to enterprise agreements made pursuant to Part 2-4 agreements, rather it refers to the persons and organisations who are ‘covered by’ such agreements. Relevantly s.172(2)(a) provides that an employer may make an enterprise agreement ‘with the employees who are employed at the time the agreement is made and who will be covered by the agreement’. Section 182(1) provides that an agreement is ‘made’ if the employees to be covered by the agreement ‘have been asked to approve the agreement and a majority of those employees who cast a valid vote approve the agreement’. This is so because an enterprise agreement is ‘made’ when a majority of the employees asked to approve the agreement cast a valid vote to approve the agreement.

6. Enterprise agreements are not instruments to which the Acts Interpretation Act 1901 (Cth) applies, however the modes of textual analysis developed in the general law may assist in the interpretation of enterprise agreements. An overly technical approach to interpretation should be avoided and consequently some general principles of statutory construction may have less force in the context of construing an enterprise agreement.

7. In construing an enterprise agreement it is first necessary to determine whether an agreement has a plain meaning or it is ambiguous or susceptible of more than one meaning.

8. Regard may be had to evidence of surrounding circumstances to assist in determining whether an ambiguity exists.

9. If the agreement has a plain meaning, evidence of the surrounding circumstances will not be admitted to contradict the plain language of the agreement.

10. If the language of the agreement is ambiguous or susceptible of more than one meaning then evidence of the surrounding circumstance will be admissible to aide the interpretation of the agreement.

11. The admissibility of evidence of the surrounding circumstances is limited to evidence tending to establish objective background facts which were known to both parties which inform and the subject matter of the agreement. Evidence of such objective facts is to be distinguished from evidence of the subjective intentions of the parties, such as statements and actions of the parties which are reflective of their actual intentions and expectations.

12. Evidence of objective background facts will include:

(i) 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;

(ii) notorious facts of which knowledge is to be presumed; and

(iii) evidence of matters in common contemplation and constituting a common assumption.

13. The diversity of interests involved in the negotiation and making of enterprise agreements (see point 4 above) warrants the adoption of a cautious approach to the admission and reliance upon the evidence of prior negotiations and the positions advanced during the negotiation process. Evidence as to what the employees covered by the agreement were told (either during the course of the negotiations or pursuant to s.180(5) of the FW Act) may be of more assistance than evidence of the bargaining positions taken by the employer or a bargaining representative during the negotiation of the agreement.

14. Admissible extrinsic material may be used to aid the interpretation of a provision in an enterprise agreement with a disputed meaning, but it cannot be used to disregard or rewrite the provision in order to give effect to an externally derived conception of what the parties’ intention or purpose was.

15. In the industrial context it has been accepted that, in some circumstances, subsequent conduct may be relevant to the interpretation of an industrial instrument. But such post-Agreement conduct must be such as to show that there has been a meeting of minds, a consensus. Post-Agreement conduct which amounts to little more than the absence of a complaint or common inadvertence is insufficient to establish a common understanding.” 49

[69] I now turn to consider the circumstances involved in this matter based on the principles enunciated by the Full Bench in Berri. The first requirement is obviously to determine whether the relevant terms, and their place in the overall structure of the Agreement, can be said to have a plain and ordinary meaning and are therefore to be applied in that way, or whether they evidence ambiguity.

[70] The terms in sub clause 19.6 of Part One of the Agreement, and their place in the overall structure of the Agreement, have already been detailed in the submissions and evidence and are not restated now. I am also satisfied that the evidence of Mr Moore, in particular, provides a credible account of how the structure of the current Agreement, and its different Parts and attached Appendices, came into being.

[71] As indicated, the High Voltage Operating Allowance is contained in sub clause 19.6 of Part One of the Agreement. However, like most of the other allowances referred to in that Part, there is no description of the quantum of the entitlement. That detail is instead found in an Appendix to Part Four of the Agreement, being “Appendix Four – Salaried Employees.”

[72] Part Four of the Agreement is headed, “Administration, Technical & Professional.” The scope clause in Part Four states:

“1. Scope

Part Four, Administration and Technical, applies to all Yarra Trams employees engaged directly by Yarra Trams in positions involved in administrative, supervisory, technical and professional work. Administration and Technical includes the following classifications:

1.1 Administration Officers - All grades with the exception of Administration Officers working in a Tram Depot and who are Operations staff.

1.2 Foreman/Foreman Artisans/Foremen Supervisors/Track Foremen - All grades with the exception of Foreman Artisan Two employees attached to the R1 0 vehicle who are covered by Part Three and Appendix Two.

1.3 Professional Engineer

1.4 Technical Officer - All grades with the exception of employees attached to Tram Infrastructure who are covered by Part Four and Appendix Two.

1.5 Senior Officers - All grades” 50

[73] Clause 2 of Part Four under the heading “Appendices” also continues to indicate:

“2.1 Further terms and conditions of employment for employees covered by this Part

(Part Four) of the Agreement can be found in Part One and Appendix Two, Four and Five as detailed in the following table.” 51

[74] The attached table then continues to indicate that these further terms and conditions can be found in Appendix Two for the classifications of Administration Officers, Stores Officers, Foremen, Foremen Supervisor, Foreman Artisan, Track Foreman, Technical Officer, Technical Officer Senior, and Technical Officer Principal. For Senior Officers these additional terms and conditions are found in Appendix Four, and for Professional Engineers in Appendix Five.

[75] Against this background it is necessary to go to Appendix Four of Part Four to obtain further detail about the entitlements referred to in sub clause 19.6 of Part One of the Agreement. Appendix Four of Part Four is headed “Salaried Employees.” Then under the heading of “Application of Appendix” it states:

“This Appendix is based upon clauses of the Railways Salaried Employees (Victoria) Award 2002. This Appendix applies only to employees to whom it is expressed to apply in the “Appendices” clause of the respective Parts of this Agreement.” 52

[76] Clause 4 of Appendix Four of Part Four then deals with “Allowances and Expenses,” and then at sub clause 4.3 reference is made to the High Voltage Operating Allowance. The sub clause states in full:

“4.3 High voltage operating allowance

Employees who are authorised high voltage operators and who may be required to issue high voltage access permits shall be paid the following allowances which will be payable for all purposes:

(a) Where they perform such duties more than 26 times per year and whilst they are considered regular operators $387.90 per annum.

(b) Where they perform such duties less than 26 times per year $2.21 per shift.” 53

[77] For the sake of completeness it is also noted that the Agreement concludes with two Schedules. Schedule A – “Wage Schedule” sets out the different wage rates that apply for each classification level in each Part of the Agreement. It also sets out the increases to be applied to those rates during the life of the Agreement. Schedule B – “Allowance Schedule” then details the amounts of each allowance provided for under the different Parts of the Agreement, including the High Voltage Operating Allowance, and the increments to apply to each of those allowances during the life of the Agreement. In regard to the High Voltage Operating Allowance, it provides these details on both a per shift and per annum basis.

[78] The following points can be highlighted, in summary, based on the preceding review of the provisions in the Agreement, and their place within its overall structure and framework. Firstly, it is acknowledged that the High Voltage Operating Allowance is contained in the “Common Conditions” in Part One of the Agreement. However, the amount of the allowance is not specified at that point. Clause 19 instead indicates that, “The values of the allowances described in this clause are contained in Schedule B of this Agreement.” 54 Schedule B does set out these amounts on both a per shift and per annum basis, although it makes no reference to when the per shift or per annum approach is to apply.

[79] Secondly, sub clause 2.2 of Part One indicates that the Common Conditions in Part One “…. must be read in conjunction with the relevant Part(s) of the Agreement applying to the workgroup of employees concerned and the relevant conditions contained in their respective Appendix.” 55 Sub clause 2.3 continues to indicate that when reading the various Parts and Appendices, to the extent of any inconsistency, the provisions of Parts Two, Three and Four prevail over the provisions of Part One, and again to the extent of any inconsistency the provisions of a Part prevail over the provisions of an Appendix.

[80] The High Voltage Operating Allowance is then contained in Part Four of the Agreement, which specifically applies to employees of Yarra Trams engaged in Administrative, Supervisory, Technical and Professional Work. It continues to set out the particular classifications encompassed within that description. None of those employees are subject to the present application. It is also made clear at sub clause 2.1, and in the associated table, that Appendix Four of Part Four applies only to “Senior Officers.” This is reinforced by the wording at the start of Appendix Four to Part Four which states, “This Appendix applies only to employees to whom it is expressed to apply in the “Appendices” clause of the respective Parts of this Agreement.” 56 It also indicates that this Appendix is based upon clauses of the Railway Salaried Employees (Victoria) Award 2002.

[81] Finally, the wording in sub clause 4.3 of Appendix Four of Part Four in regard to the High Voltage Operating Allowance is the only point at which any explanation is provided in the Agreement about when the allowances is to be provided on either a per shift, or a per annum basis. As indicated, this clarification can only be obtained by going to Appendix Four of Part Four, which only applies to “Salaried Employees”.

[82] I am satisfied, in conclusion, having particular regard to each of the above factors that there is ambiguity in terms of how the High Voltage Operating Allowance is to be applied, and the nature of the entitlement cannot be said to have “a plain and ordinary meaning.” Without going again to the matters referred to above it is noted, in particular, that sub clause 2.1 of Part Four limits the entitlement in Appendix Four of Part Four to “Senior Officers” only, and sub clause 2.3 of Part One provides that the provisions of Parts Two, Three and Four prevail over those contained in Part One. In addition, the quantum of the allowance, and how it is to be applied, can only understood by reference to Appendix Four in Part Four.

[83] Having concluded that the Agreement is ambiguous, and susceptible of more than one meaning, the decision in Berri makes clear that evidence of the surrounding circumstances can be admissible as an aid to interpretation. This is, in turn, limited to objective background facts which inform the subject matter of the Agreement, and can be distinguished from evidence of the subjective intentions of a party which are simply a reflection of their intentions and/or expectations. Principle 12 in Berri also makes clear that evidence of objective background facts can include evidence of prior negotiations to the extent that they establish objective background facts known to both parties, or notorious facts of which knowledge is to be presumed, or evidence of matters in common contemplation that constitute a common assumption.

[84] I am satisfied in this context that the evidence of Mr Moore, in particular, constitutes objective background facts about which knowledge can be presumed. I do not intend to go to his evidence in detail. However, I refer, in particular, to his evidence about how the current Agreement came to have four different Parts, and the relationship between each Part and their respective Appendices. His evidence also details the derivation of the High Voltage Operating Allowance from the Railways Salaried Officers Award, which applied to Salaried Officers employed in a pre-privatisation era. His evidence also details how the High Voltage Operating Allowance came to be contained in sub clause 19.6 of Part One of the Agreement. I am satisfied that these can be said to constitute “notorious facts of which knowledge is to be presumed.” 57

Conclusion

[85] I also note in conclusion that s.578(b) of the Act requires the Commission when performing its functions or exercising its powers to take into account “equity, good conscience and the merits of the matter.” 58 The evidence of both parties makes clear that the High Voltage Operating Allowance has not been paid to any employee, at any time, in the past thirty years. In addition, I am not satisfied that it has been established that it was pursued as a claim in any of the recent enterprise bargaining rounds including, in particular, those in 2012 and 2015. It would seem extraordinary in these circumstances if the application of the principles in Berri somehow created an entitlement to the allowance for those employees who now claim this entitlement. However, this outcome has not eventuated. I am satisfied instead, based on the application of the principles in Berri, that the Agreement is not to be construed in the way that the ETU contends. The application of the High Voltage Operating Allowance is instead confined to any eligible employees covered by Appendix Four of Part Four of the Agreement. The application is accordingly dismissed.

COMMISSIONER

Appearances:

L Weber for the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia.

N Barkatsas for the Respondent.

Hearing details:

2017.

Melbourne:

November 30.

<PR600402>

 1   AE417552.

 2   Yarra Trams Enterprise Agreement 2015 – Rolling Stock, Infrastructure, Administration, Technical & Professional at Part One – Common Conditions, cl 2.

 3   Ibid,cl 19.6.

 4   Ibid,at Appendix Four – Administration, Technical & Professional, cl 4.3.

 5   [2017] FWCFB 3005.

 6   Transcript at PN392.

 7   Transcript at PN477.

 8   Transcript at PN477.

 9   Transcript at PN74.

 10   Transcript at PN139.

 11   Transcript at PN173.

 12   Exhibit ETU3, [5(a)].

 13   Exhibit ETU3, [5(b)].

 14   Exhibit ETU3, [13].

 15   Respondent’s submissions, dated 13 November 2017, p1.

 16   Ibid.

 17   Ibid.

 18   Yarra Trams Enterprise Agreement 2015 – Rolling Stock, Infrastructure, Administration, Technical & Professional at Part One – Common Conditions, cl 2.2.

 19   Respondent’s submissions, dated 13 November 2017, [10].

 20   Yarra Trams Enterprise Agreement 2015 – Rolling Stock, Infrastructure, Administration, Technical & Professional at Part One – Common Conditions, cl 2.3.

 21   Respondent’s submissions, dated 13 November 2017, [11].

 22 Ibid [14].

 23 Ibid [15].

 24   Respondent’s submissions, dated 13 November 2017, [18].

 25 Ibid [32].

 26 AC309534.

 27 Exhibit YT1 [12].

 28 Exhibit YT1 [13].

 29   Transcript at PN246.

 30   Transcript at PN272.

 31   Exhibit YT2, [14].

 32   Respondent’s submissions, dated 13 November 2017, [38].

 33   “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU) v Berri Pty Limited [2017] FWCFB 3005, [41].

 34 (2005) 222 CLR 241.

 35 Ibid [44].

 36 Ibid [46].

 37   Ibid.

 38 [2006] FCA 616.

 39   “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU) v Berri Pty Limited [2017] FWCFB 3005, [62].

 40   The Australasian Meat Industry Employees Union vGolden CockrelPty Ltd [2014]FWCFB 7447 (‘Golden Cockrel’).

 41   Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU) v Berri Pty Limited [2017] FWCFB 3005, [63].

 42 Ibid [65].

 43 (1996) 66 IR 182.

 44   “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU) v Berri Pty Limited [2017] FWCFB 3005, [86].

 45   “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU) v Berri Pty Limited [2017] FWCFB 3005, [88].

 46 Ibid [101].

 47 Ibid [106].

 48 Ibid [111].

 49 Ibid [114].

 50   Yarra Trams Enterprise Agreement 2015 – Rolling Stock, Infrastructure, Administration, Technical & Professional at Part Four – Administration, Technical & Professional, cl 1.

 51   Ibid cl 2.

 52   Ibid at Appendix Four.

 53   Ibid at Appendix Four, cl 4.3.

 54   Ibid at Part One – Common Conditions, cl 19.

 55   Ibid cl 2.2.

 56   Ibid at Appendix Four.

 57   “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU) v Berri[2017] FWCFB 3005 [63], citing Australian Meat Industry Employees Union v Golden Cockerel Pty Ltd[2014] FWCFB 7447.

 58   Fair Work Act 2009 (Cth) s s.578(b).

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