Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Siemens Ltd

[2016] FWC 2041

[2016] FWC 2041

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.739 - Application to deal with a dispute

Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia
v
Siemens Ltd
(C2015/6978)

DEPUTY PRESIDENT GOSTENCNIK MELBOURNE, 7 APRIL 2016

Alleged dispute about any matters arising under the enterprise agreement and the NES;[s186(6)];construction of Agreement; toll expenditure and e-TAG use; whether Agreement prevents employer from implementing particular e-TAG use and expenditure procedure; meaning of “use”; whether a practice is an employment condition or entitlement.

[1] The Siemens Building Technologies/“US” Utility Services and ET Enterprise Agreement 2010-2014 (Agreement) was approved by the Fair Work Commission (Commission) on 18 January 2012. 1Pursuant to s.54 of the Fair Work Act 2009 (Act) the Agreement commenced operation on 25 January 2012 and the nominal expiry date of 31 October 2014 has passed.2The Agreement continues in operation and covers Siemens Ltd (Siemens), certain employees of Siemens and the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU).3

[2] A number of employees, who are covered by the Agreement, are provided with the use of a motor vehicle by Siemens, known as a tool of trade (TOT) vehicle (affected employees).

[3] At least since January 1999, Siemens has promulgated and maintained various versions of a motor vehicle policy, each iteration of which set out terms for the provision to and use by employees of TOT vehicles, and the manner for settling certain associated expenses such as road tolls. 4At the time the Agreement was made, approved and commenced operation, the motor vehicle policy dated 4 September 2009 (2009 MV Policy) was in operation.5 The 2009 MV Policy is not incorporated into the Agreement, nor is it suggested that the policy is incorporated into any of the affected employees' contracts of employment.

[4] The 2009 MV Policy made provision for TOT vehicles but distinguished between those provided to total remuneration (TR) employees and non-TR employees. It is not in issue that the affected employees are non-TR employees. The 2009 MV Policy relevantly contains the following provisions:

“3. Eligibility and Conditions

3.1 Types of Allocation

There are three main categories of allocations of motor vehicles to employees: novated leases, tool of trade (TOT) and pool vehicles . . .  6

. . .

Tool of Trade (TOT) and Pool Vehicles

The business interests of the Company often require the allocation of motor vehicles to specific positions in order for the basic functions of the role to be completed. For these positions, the incumbent/s will be assigned a TOT vehicle via a fully maintained standard operating lease arrangement . . . 7

. . .

For non-TR employees the vehicle is not regarded as part of the employee’s package and the company reserves the right to reallocate assigned TOT vehicles. 8

5. Private Usage

There are no restrictions on Private Usage of a novated lease or TOT vehicles included in TR packages.

The following conditions apply with respect to Non-TR-TOT:

● The vehicle is expected to be available for business use at all times including during periods of absence of the employee, and if required and the vehicle will be reallocated by management
● If the employee undertaking a major driving holiday outside his/her usual State of residence, wishes to use the TOT vehicle, permission should be sought from Departmental Management. If granted, the running costs of the vehicle above normal usage level during the leave period will be borne by the employee (after-tax contribution). If not granted, the Company is under no obligation to provide a suitable vehicle or other benefit to the employee in lieu. 9

. . .

11. Parking Expenses etc

Parking expenses, toll charges etc. incurred as a result of Company business will be reimbursed in accordance with the Expense Reimbursement Policy. Costs incurred for private purposes are to the account of the employee.

12. Electronic road tolls

The cost of electronic road tolls related to business usage should be claimed via the normal business expense reimbursement process in accordance with the Expense Reimbursement Policy. This excludes travel between the employee’s residence and their normal place of work. Employees will be responsible for the management of electronic road toll (e-tag) accounts. Department Managers may choose to maintain their own electronic road toll (e-tag) accounts for the TOT vehicles in their Business Units. 10

17. Changes in Employment Circumstances

. . .

17.3 Extended Temporary Absence

. . .

. . . Similarly, TOT vehicles assigned to Non TR employees will generally not be available during periods of leave, unless permission has been granted in accordance with the conditions outlined in clause 5”. 11

[5] Since the promulgation of the 2009 MV Policy, Siemens has adopted further versions of motor vehicle policies 12 which deal with the assignment, use and maintenance of motor vehicles, and expenses including toll charges incurred through the use of motor vehicles. These policies are as follows:

● Motor Vehicle Policy- Australia, 15 December 2014; 13 and
● Motor Vehicle Policy - Australia, 6 November 2015. 14

[6] These policies contain terms that are similar to those found in the 2009 MV Policy. Common to all of these policies are terms dealing with the following:

● Provision of a TOT vehicle to an employee is on a fully maintained standard operating lease arrangement;
● The fully maintained standard operating lease arrangement covers expenses such as fuel and maintenance of the vehicle;
● Expenses such as parking and toll charges which are incurred as a consequence of business usage are reimbursed in accordance with the applicable expense reimbursement policy. Costs that are incurred by employees travelling between their residence and their normal place of work are not reimbursed;
● Employees are responsible for the management of the e-TAG accounts; and

● Department managers may choose to maintain e-TAG accounts for the TOT in their business units.

[7] The policies produced by Siemens refer to various companies in the Siemens group of companies. CEPU does not take issue that the policies produced in evidence are the policies that pertain to Siemens. 15It is not in dispute that Siemens provided e-TAGs for use in TOT vehicles assigned to the affected employees. It also appears that some employees,16 including two of the affected employees who gave evidence before me,17 signed a document acknowledging and accepting the terms on which the e-TAG was issued at about the time of its issue in relation to the TOT vehicle assigned to that employee. The document in question is titled “Siemens Building Technologies – E-Tags” and carries the name and details of “Siemens Building Technologies Pty Ltd” in its footer. The relevant document contains the following term:

“Use of the E-Tag will be strictly for business use only. Employees may be required to refund any non-business use of the E-tag to Siemens Building Technologies.”

[8] It also does not appear to be in dispute that despite the terms of the operative MV Policy, since at least October 2008 and perhaps much earlier, 18there has been a practice whereby Siemens did not seek reimbursement from the employees to whom an e-TAG has been issued for the cost of tolls incurred in relation to the private use of TOT vehicles.19

[9] It appears that one explanation for Siemens’ failure to seek reimbursement from employees of the toll expenditure incurred on e-TAGs when used for trips that involved the private use of TOT vehicles is that the e-TAG accounts appear to have been managed by Siemens’ lease provider, and the lease provider sends an invoice to Siemens which contains a breakdown of the toll charges incurred by each TOT vehicle. These invoices were simply paid by Siemens without any review of the circumstances or any oversight by the relevant managers of the various business units, and so toll charges incurred as a consequence of private use of a TOT vehicle were not identified. 20 This explanation was not challenged by the CEPU21 although; I note its submission that the explanation is not relevant to the issues in this proceeding.22 I agree that the evidence is not relevant to the construction of the Agreement, however it seems to me to be plainly relevant to the question whether the practice has become an implied contractual term by reason of custom and usage. This issue is dealt with later in this decision.

[10] At some stage prior to 29 September 2015, Siemens appears to have undertaken a review of various expenditure incurred by it. 23The review identified a high level of expenditure associated with e-TAG usage, particularly over weekends and travel time between an employee’s place of residence and place of work.24As a consequence, Siemens determined that effective from midnight on 15 October 2015, all Siemens provided e-TAGs would be cancelled and employees would be required to establish a toll account for use in vehicles from 16 October 2015, and the reimbursement of travel expenditure incurred for business use would be in accordance with the applicable motor vehicle policy.25

[11] The CEPU and some of the affected employees object to this course. On 19 October 2015, the CEPU made an application pursuant to s.739 of the Act for the Commission to deal with a dispute in accordance with the dispute settlement procedure set out in clause 14.2 of the Agreement. Subsequently I allowed the CEPU to amend its application to correctly identify the employer covered by the Agreement. There is no dispute that the jurisdiction of the Commission is properly invoked.

Issue in dispute

[12] The issue in dispute is whether, on a proper construction of the Agreement, Siemens is precluded by reason of the Agreement, from implementing the procedure relating to the provision of e-TAGs and reimbursement for toll incurred by employees using TOT vehicles for business purposes, as set out in a notice to employees issued on 29 September 2015 (the E-TAG procedure). 26The resolution of the dispute therefore turns upon the interpretation of particular provisions in the Agreement.

Relevant provisions of the Agreement

[13] Appendix C to Part B of the Agreement provides as follows:

“APPENDIX C - EMPLOYER SPECIFIC PROVISIONS
For the purposes of clause 7 - Overtime, it is agreed clause 7.1(a)(i) will apply and clause 7.1(a)(ii) will not apply for any project which was tendered on or before 30th September 2011.
Site Allowance
It is agreed a minimum site allowance of $1.50 per hour will be paid to each employee of Siemens Building Technologies Business Unit (SBT) under this agreement. If an SBT employee is required to work at a location where the allowance prescribed by this Agreement exceeds $1.50 per hour, then the higher amount will be paid for every hour worked at that location.
Vehicles
It is agreed that where a fully maintained vehicle is issued to an employee, they will ensure it is kept in a roadworthy condition. It is recognised that the vehicle is an advertisement for Siemens Building Technologies and shall be kept in a clean and tidy state.
Uniform
Is recognised by the parties that employees of SBT shall be issued with protective clothing and uniforms, with the appropriate SBT logo displayed. As SBT representatives they will conduct themselves in a manner and appearance in the best interests of SBT.

Travel Time Allowance
SBT accept that in lieu of the Travel Time and Fare Allowances in Appendix A (Allowances), all Service and Commissioning Technicians with a company vehicle would have use of their company vehicle for fair and reasonable private use on weekends, public holidays and all approved leave. It is agreed that employees may use their vehicle if taking pre-approved paid Paternal Leave for up to 18 weeks.
In relation to private travel interstate, management must be notified before such a journey is undertaken and the employee will be responsible for the petrol.”

[14] Some of the affected employees are covered by Part A of the Agreement and not Part B, however it is common ground that Appendix C is intended to apply to employees of Siemens who are covered by Part A of the Agreement as well as those covered by Part B. 27I will proceed on this basis.

[15] Clause 25.5 of Part B of the Agreement deals with “Fair, Travel and Toll Allowances” and provides as follows:

“25.5 Fares, Travel and Tolls Allowances

(a) General conditions

(i)  Commencing on job—an employee required to work at a job away from their workshop or depot must, at the direction of their employer, present themself for work at such job at the usual time of starting work.

(ii)  Location of workshop or depot—upon the commencement of employment, the employer must notify the employee of the location of the employee’s workshop or depot and such location will be recorded in the employee’s service record. For existing employees at the time of making this Agreement, the location of the employee’s workshop or depot shall be their workshop or depot used for travel allowance purposes immediately prior to this Agreement coming into operation and such location will be recorded in the employee’s service record. For the purposes of this clause, the workshop or depot shall be determined in accordance with this subclause. The workshop or depot may not be changed for an employee once determined pursuant to this subclause, unless genuinely agreed without undue pressure by the Employer and relevant Employee. Employees will not be discriminated against by reason of the location of their workshop or depot.

(iii)  A “workshop or depot” shall mean any office, workshop or depot of the employer at which the employer conducts business, including branch offices and site offices. The Employer shall not have more than one workshop or depot within a 50-kilometre radius within a State/Territory boundary, unless otherwise agreed by the Employer and the Union.
(iv) 50 km:

(A)  For the purposes of this clause, the distance of 50 km from the workshop or depot will be determined by using a 50km radius from the workshop or depot.
(B)  This radius will apply on all occasions except when geographical difficulties prevent direct road travel. In these circumstances the shortest direct road route will determine the 50km mark.

(b) Travel time allowance

(i) All employees shall be paid travel time allowance per day (as per Appendix A) for each day on which they present themselves for work. The allowance is to be paid for rostered days off and in the case of Apprentices, the days on which they attend trade school, but not payable for either sick leave, annual leave or public holidays. As it is an allowance received during ordinary time, it should also be included in calculations for superannuation contributions.

(c) Start and/or finish on job

(i)   When required by the employer to start and/or cease work on the job site, employees will be entitled to the following allowances as appropriate.

(ii)   Fares: Where the job site is situated up to 50 kilometres from the workshop or depot, the amount set out in Appendix A to this Agreement shall be paid to the employee per day.

(iii)  Travelling Time - where the job site is situated more than 50 kilometres from the workshop or depot, in addition to the Fares as per clause 25.5(c)(ii), the employee shall receive a payment for travelling time for each occasion the distance in excess of 50 kilometres is travelled either to start work on the job site or after ceasing work on the job site, with a minimum payment of a quarter of an hour of the employee’s all purpose rate. The rate will be:

(A)  Ordinary time Monday to Friday;–

(B)  Time and one half on Saturday and Sunday;

(C)  Double time on public holidays.

(iv)  Incidentals: Furthermore, for travel in excess of the 50km, employees using their own vehicle will be compensated for consideration of the ‘incidental expenses actually incurred’ at the rate set out in Appendix A to this Agreement. It is further agreed that when multiple employees are travelling to a site together this incidental allowance will only be paid to the employee who is actually driving the vehicle and actually incurring the expense.

(v)   Free Transport Fares: The entitlement to Fares as per clause 25.5(c)(ii) shall not apply where the employer offers to provide transport free of charge from the employee’s home or other location agreed between the relevant employee and Employer. In lieu of Fares as per clause 25.5(c)(ii) only, such an employee shall receive the amount set out in Appendix A to this Agreement per day.

(d) Motor allowance for use of private vehicle for business purposes

(i) Employees who in the service of their employer use their own vehicles at the request of their employer will be paid the amount specified in Appendix A per kilometre.

(e) Permanent Maintenance:

(i) Where the Employer provides permanent maintenance cover at which the employee is engaged solely to be part of the permanent maintenance crews or supplements the permanent maintenance crew (for the purposes of authorised absences only), the Employer must provide secure, off street car parking at the client’s premises. Where these conditions are met, the employee shall be paid the amount set out in Appendix A to this Agreement in lieu of the payments set out above in this clause.

(f) Tolls Reimbursement

(i) Where an employee incurs any toll or similar fee in the course of travelling at the Employer’s direction, during working hours, an amount equivalent to the sum incurred by the employee will be reimbursed by the Employer immediately upon proof of such expenditure by the employee. The Employer shall reimburse the costs incurred by the employee in obtaining any itemised account.

(g) Travel and Fares Allowance Table to be used as a Guide.”

[Table not reproduced]

[16] These provisions are replicated in Part A of the Agreement as clause 24.5 of that Part.

[17] Clause 5.2 of Appendix A to Part B (replicated in clause 4.2 of Appendix A of Part A) is also relevant as it describes and quantifies the travel and fair allowances for which provision is made in clause 25.5 of Part B (and 24.5 of Part A).

[18] Clause 2 of Part B of the Agreement contains the following provision:

“2.3   Any existing employment conditions or entitlements that are superior to those contained in this Agreement will continue to apply unless otherwise agreed by the parties. The Union will make the Employer aware of this clause and its effect at the time of entering into the agreement.”

[19] This provision is replicated in Part A of the Agreement as clause 2.3 of that Part.

Competing contentions

[20] The CEPU relies primarily on the terms of Appendix C to make good its case that Siemens is prevented by reason of the Agreement, from implementing the e-TAG procedure. It submits that there is an ambiguity in the wording of Appendix C as to the scope of that which is meant by the “fair and reasonable private use” of the vehicles.

[21] The CEPU submits that although Appendix C does not make specific reference to e-TAGs or tolls, it is clear that the wording contemplates the Respondent taking financial responsibility for the operational cost of the vehicles. For example, the implication to be drawn from the exclusion of petrol costs when a vehicle is used for private travel interstate (found in the final paragraph of Appendix C) is that Siemens is responsible for all other petrol costs. 


[22] The CEPU submits that, in the circumstances, regard may be had to evidence of the surrounding circumstances to assist in determining whether this ambiguity exists, and to identify the wording within its proper context and purpose. 


[23] The extrinsic material to which the CEPU alludes is the evidence to the effect that:

● TOT vehicles which have been provided to affected employees have equipped with Siemens provided e-TAGs and Siemens has covered the full cost of tolls incurred through the use of the e-TAGs for business and non-business purposes; 28 and 


● At bargaining, the CEPU understood this to be part of the arrangement set out in Appendix C under which employees have forfeited the rights they would otherwise have to travel time and fares allowances set out in cl 24.5 and Appendix A 29 of the Agreement. 


[24] Also relevant to context, according to the CEPU, is that provisions dealing with travel time and allowance offsets and toll reimbursement have been a feature of successive agreements covering Siemens and the CEPU since at least the year 2000, and although the wording of the various provisions has changed slightly over time, the changes operate only to expand the application of the “private use” arrangement to all forms of leave, and to impose the limitation relating to petrol costs when employees travel interstate in the course of their private use of a vehicle. 


[25] Consequently, the CEPU submits that, given the custom and practice that has applied, there was a common assumption between the parties that employees had an entitlement to the “fair and reasonable use” of the e-TAGs, within the parameters set out by the wording in Appendix C, and that this was notoriously known, is demonstrated by the prevailing custom and practice.

[26] As to clauses 24.5(f)(i) of Part A and 25.5(f)(i) of Part B, which deal with toll expenditure reimbursement, the CEPU submits that these provisions do not “cover the field” in relation to this dispute. It submits that these clauses are facilitative provisions which provide a mechanism for the reimbursement to an employee for toll charges incurred. For example, by an employee covered by the Agreement who is not provided with a company vehicle and who uses his or her private vehicle for business purposes. The CEPU submits that the clauses are silent on the issue of toll charges incurred during private use of TOT vehicles under Appendix C. It submits that the clauses are not expressly contrary to the terms of Appendix C, and the two entitlements can co-exist without contradiction. 


[27] The CEPU submits further that there is no evidence that the parties to the Agreement intended clauses 24.5(f)(i) of Part A and 25.5(f)(i) of Part B to have the effect of lessening the entitlements which employees enjoy under Appendix C. 


[28] As to clause 2.3 of Parts A and B, the CEPU submits additionally, or in the alternative, that the e-TAG procedure represents a detrimental change to a "condition of employment", or a non-consensual alteration of an existing "employment condition or entitlement", in contravention of clause 2.3. It submits that the superior “condition or entitlement” of employment is the arrangement reflected in the long-standing practice which has been applied including the use the e-TAG for private travel which is fair and reasonable private use on weekends, public holidays and approved leave (as contemplated by Appendix C), as well as travel to and from the workplace. 


[29] For its part, Siemens accepts that Appendix C represents the bargain struck for the private use of TOT vehicles but submits that the relevant provisions of Appendix C have a plain meaning and are not ambiguous. It submits that the benefit for which Appendix C provides is the "fair and reasonable use" by an employee of a TOT vehicle on the particular occasions specified.

[30] Siemens submits that the word “use” is not an ambiguous concept. It points to the Macquarie Concise Dictionary definition of the word “use” and says that the ordinary and well understood meaning of that word is confined to “employing or availing oneself to the relevant object” and does not extend to matters that may arise as a consequence of the manner in which the object is used. It submits that contrary to the position adopted by the CEPU, “use” does not involve Siemens taking financial responsibility for all costs associated with the manner in which a TOT vehicle is used.

[31] Siemens acknowledges, properly in my view, that the relevant provisions of Appendix C may well require Siemens to meet the petrol costs associated with “fair and reasonable use.” This may be inferred from the last paragraph in Appendix C, which makes an employee liable for petrol in circumstances of private interstate travel in a TOT vehicle.

[32] Siemens also points to clauses 24.5(f)(i) of Part A and 25.5(f)(i) of Part B as a supportive textual consideration for the construction it advances in so far as these provisions contemplate reimbursement to an employee of toll charges incurred while undertaking business related travel.

[33] Siemens submits that if, contrary to its primarily submission, the relevant provisions of Appendix C are ambiguous, the historical and industrial context in which Appendix C was included in the Agreement nevertheless supports its construction. Specifically, it points to the fact that is not in dispute that the question of e-TAGs was not discussed during the course of bargaining for the Agreement and that the evidence it has led shows that Siemens’ position on toll expenditure reimbursement for business use had been clearly communicated to employees through the various iterations of the motor vehicle policy in operation before and at the time the Agreement was made.

[34] As to the effect of clause 2.3 of Parts A and B, Siemens submits that these provisions do not impact on the e-TAG procedure it proposes because the essential precondition to their operation has not been met. It submits that as the CEPU did not, as it was required to do, make Siemens "aware of this clause and its effect at the time of entering into the agreement”, clause 2.3 is not engaged.

Consideration

[35] The principles applicable to the construction of an enterprise agreement have recently been canvassed at length in Australasian Meat Industry Employees Union v Golden Cockerel Pty Limited. 30 It is not necessary that they be repeated here. They are not in dispute and I apply them to the construction of the relevant provisions of the Agreement as required to resolve this dispute.

[36] Turning first to Appendix C, the relevant parts of which provide:

“SBT accept that in lieu of the Travel Time and Fare Allowances in Appendix A (Allowances), all Service and Commissioning Technicians with a company vehicle would have use of their company vehicle for fair and reasonable private use on weekends, public holidays and all approved leave. It is agreed that employees may use their vehicle if taking pre-approved paid Paternal Leave for up to 18 weeks.

In relation to private travel interstate, management must be notified before such a journey is undertaken and the employee will be responsible for the petrol.”

[37] As earlier noted, the CEPU maintains there is an ambiguity in the wording of Appendix C as to the scope of that which is meant by “fair and reasonable private use”. Whilst I agree that there can be disputes about whether a particular use of a TOT vehicle is “fair and reasonable use” within the meaning of Appendix C, it does not follow that there is an ambiguity.

[38] I consider that the word “use” has an ordinary meaning, which is well understood. “Use” means “to employ (an object) for some purpose; to avail oneself of (an object)”. 31 In the context of Appendix C, “use” means the capacity of an employee to avail him or herself of an assigned TOT vehicle for private purposes on weekends, public holidays and all approved leave. Such “use” however is not without qualification. It is not unencumbered “use” that is permitted rather it is “fair and reasonable” use.

[39] I do not accept that the phrase “fair and reasonable use” in Appendix C contemplates that Siemens must take financial responsibility for the whole of the operational costs, including toll expenditure, arising from the use by an employee of a TOT vehicle on weekends, public holidays and all approved leave. If that were intended, clear words to that effect would be needed, and moreover the words “fair and reasonable” would have no work to do.

[40] It seems to me clear that as TOT vehicles are provided to the affected employees pursuant to a fully maintained standard operating lease arrangement which covers expenses such as fuel and maintenance of the vehicle, “fair and reasonable use” of the vehicle by an affected employee includes the benefit of the fuel and maintenance arising from such use. Apart from the lease arrangement, it is evident from the text of Appendix C that the cost of fuel used as a consequence of the use by the employee of a TOT vehicle on weekends, public holidays and all approved leave would be borne by Siemens. If that were not the case there would seem to be no need for the provision that “the employee will be responsible for that petrol” arising from the use of a TOT vehicle for private interstate travel found in the final paragraph of Appendix C.

[41] I do not consider there is anything in the text of Appendix C which would prevent Siemens from implementing the e-TAG procedure, nor do I consider that the phrase “fair and reasonable use” includes a requirement that Siemens be responsible for toll expenditure incurred while using a TOT vehicle in the circumstances prescribed in Appendix C. That this is so, is all the more evident when regard is had clauses 24.5(f) of Part A and 25.5(f) of Part B of the Agreement. The text of these clauses is this follows:

“(f) Tolls Reimbursement

(i) Where an employee incurs any toll or similar fee in the course of travelling at the Employer’s direction, during working hours, an amount equivalent to the sum incurred by the employee will be reimbursed by the Employer immediately upon proof of such expenditure by the employee. The Employer shall reimburse the costs incurred by the employee in obtaining any itemised account.”

[42] There is nothing in the text of Appendix C that would suggest that this clause should not be given full operation and effect. Indeed, the bargain struck for the permitted private use of a TOT vehicle was “in lieu of the Travel Time and Fare Allowances in Appendix A”. The Appendix C benefit does not replace the other applicable provisions of clauses 24.5 and 25.5 of Parts A and B respectively. Clauses 24.5(f) of Part A and 25.5(f) of Part B of the Agreement are consistent with Siemens’ proposal concerning the e-TAG procedure. Moreover, these provisions make clear that under the Agreement, Siemens is liable only for toll charges incurred by an employee in the course of travelling at Siemens direction during working hours.

[43] Furthermore, I do not accept the CEPU’s submission that clauses 24.5(f) of Part A and 25.5(f) of Part B of the Agreement are confined to circumstances in which an employee uses his or her own vehicle. First, and most obviously, there is no reference to the provisions being so confined in the text of the clause. Secondly, where the Agreement intends a particular provision to be so confined, express language to that effect has been included. For example, clauses 25.5(c)(iv) and 25.5(d)(i) make provision as follows:

“(iv)  Incidentals: Furthermore, for travel in excess of the 50km, employees using their own vehicle will be compensated for consideration of the ‘incidental expenses actually incurred’ at the rate set out in Appendix A to this Agreement. It is further agreed that when multiple employees are travelling to a site together this incidental allowance will only be paid to the employee who is actually driving the vehicle and actually incurring the expense.

(d) Motor allowance for use of private vehicle for business purposes

(i) Employees who in the service of their employer use their own vehicles at the request of their employer will be paid the amount specified in Appendix A per kilometre. 32”[My underlining]

[44] A tangential element of this dispute is a claim by the CEPU that Siemens should be responsible for toll expenditure incurred by employees while travelling from home to work. On any view, Appendix C has no application to private use of a TOT vehicle by an employee for the purposes of travelling to and from work during Monday to Friday. This was accepted by the CEPU. 33 It relies on clause 2 of Parts A and B of the Agreement to make good this claim.34

[45] The parties to this proceeding tendered material and led evidence directed to the background and surrounding circumstances, context and purpose of the provisions being construed, and the Agreement more generally. To the extent that the CEPU relied on evidence about the course of bargaining and prior negotiations for the Agreement, that evidence discloses no more than the subjective intentions, aspirations or views of one party to the bargaining process. It is of no assistance in establishing any objective background fact known to all parties relevant to the subject matter of the Agreement that is now in issue. I have not found the material to be of any assistance in establishing whether there is ambiguity in the relevant provisions at issue in these proceedings. Moreover, as I have concluded that there is no ambiguity, the material can be of no further assistance in resolving the proper construction of the provisions of the Agreement discussed above.

[46] Turning next to clause 2 of Parts A and B of the Agreement, which relevantly provides:

“2.3   Any existing employment conditions or entitlements that are superior to those contained in this Agreement will continue to apply unless otherwise agreed by the parties. The Union will make the Employer aware of this clause and its effect at the time of entering into the agreement.”

[47] As earlier noted, the CEPU submits that the e-TAG procedure represents a detrimental change to a “condition of employment”, or a non-consensual alteration of an existing “employment condition or entitlement”, in contravention of clause 2.3, and that superior “condition or entitlement” of employment is the arrangement reflected in the long-standing practice concerning the use of the e-TAG for private travel. It submits that this practice is also “fair and reasonable private use” on weekends, public holidays and approved leave (as contemplated by Appendix C)

[48] The reference in the CEPU’s submission to Appendix C as a condition or entitlement that is contemplated by clause 2.3 is, with respect, misconceived. Clause 2.3 is concerned with existing “conditions or entitlements that are superior to those contained” in the Agreement.

[49] Clause 2.3 is not a “catch-all” provision. It contains an important caveat. In order for the clause to do the work sought by the CEPU, the CEPU must, at the time of entering into the Agreement, have made Siemens aware of the clause and its effect. The purpose of this clause seems to me to be clear; before Siemens is obliged by reason of the Agreement to apply “superior” employment conditions or entitlements, it must be made aware of the condition or entitlement said to be superior, and be told that the effect of this clause is that there is an obligation created by the clause for Siemens to continue to apply superior employment conditions or entitlements unless otherwise agreed by the parties.

[50] The CEPU submits that it has complied with its obligation to make Siemens aware of the clause and its effect at the time of entering into the Agreement. It relies on the evidence given by Mr Michael Montebello, an official of the CEPU, who was involved in bargaining for the Agreement. Mr Montebello's evidence was as follows:

“To the best of my recollection, during bargaining I brought clause 2.3 of the Agreement to the attention of the company during the bargaining process. I believe this because the wording of clause 2.3 was new to the Agreement.

. . .

Clause 2.3 of the Agreement was drafted by the union. I cannot recall when it was raised during the above process, or what exactly was said, but it was a new clause proposed by the ETU which the company had to consider and accept.

Both parties are aware, at the time of bargaining, that employees had full personal use of their work vehicles because there was also a change made to Appendix C of the Agreement to expand the clause to include personal use of vehicles during all approved leave. I cannot remember the exact detail of the conversations which we had at the time of bargaining about those changes, however it was well known to everybody at the time that the practice was that employees had personal use of the car and were not required to administer their own etags, or pay for the etag tolls. 35”

[51] This evidence falls well short of that which would be required to establish that the CEPU advised Siemens at the time of entering into the Agreement of the effect of the clause. I accept that since the parties were negotiating the inclusion of clause 2.3, that the evidence establishes that Siemens was made aware of the clause. However it is not enough, in my view, to rely on a self-serving and not particularly probative assertion that “both parties were aware” of a particular practice, as evidence that the effect of this clause was to oblige Siemens to continue the practice. First and most obviously, the mere existence of a practice is not, in and of itself, sufficient to convert of practice into an employment condition or entitlement. Secondly, clause 2.3 requires the CEPU to take the positive step of making Siemens aware of the effect of that clause. It is not enough, in my view, to simply rely upon knowledge of a practice and assert that because of that knowledge, Siemens was aware that the effect of clause 2.3 was to require it to continue the practice and failure to do so would constitute a contravention of the Agreement.

[52] There is no cogent reason advanced for the terms of clause 2.3 not to be given full effect and I reject the CEPU’s submission that it would have been unreasonable to expect it to have specifically raised the issue in circumstances where there had been a long-standing practice. As I have earlier indicated, clause 2.3 is not a “catch-all” provision. There is a condition precedent that must be met before the clause is engaged in relation to a particular employment condition or entitlement. I am not satisfied, on the evidence, that the condition precedent has been met in relation to the particular employment condition or entitlement asserted by the CEPU. It follows that clause 2.3 does not present a bar to the e-TAG procedure.

[53] In any event, I am not satisfied that it has been established that the practice, which is not in dispute, of not seeking reimbursement from the employees for the cost of toll charges incurred by the employees in relation to the private use of TOT vehicles, is an employment condition or entitlement.

[54] The CEPU submits that the practice is an employment condition or entitlement through custom and usage. To put it another way, the practice is to be implied into the contracts of employment of the affected employees through custom and usage. I do not accept that to be the case.

[55] In Con-Stan Industries of Australia Pty Ltd v Norwich Winterthur Insurance (Australia) Ltd  36 (Con-Stan)the High Court of Australia set out the circumstances in which trade custom or usage might form the basis for the implication of terms into a contract as follows:

“The cases have established the following propositions:


1 The existence of a custom or usage that will justify the implication of a term into a contract is a question of fact: Nelson v. Dahl (1879) 12 ChD 568, at p 575. The critical dependence of a finding of custom on the facts of the particular case means there is little to be gained by referring (as counsel for the appellant urged us to do) to the practices of the London marine market in the last century, notwithstanding that those practices formed the basis for the implication, in contracts of marine insurance, of a term similar to the first of the terms alternatively contended for in this case (see Power v. Butcher (1829) 10 B & C 329, at p 340; [1829] EngR 162; 109 ER 472, at p 476; Xenos v. Wickham (1867) LR 2 HL 296, at p 319; Universo Insurance Company of Milan v. Merchants Marine Insurance Company (1897) 2 QB 93, at pp 95-97, 99).

2 There must be evidence that the custom relied on is so well known and acquiesced in that everyone making a contract in that situation can reasonably be presumed to have imported that term into the contract: Young v. Tockassie [1905] HCA 17; (1905) 2 CLR 470, at p 478; Summers v. The Commonwealth [1918] HCA 33; (1918) 25 CLR 144, at p 148; Majeau Carrying Co. Pty Ltd v. Coastal Rutile Ltd [1973] HCA 22; (1973) 129 CLR 48, at pp 60-61. In the words of Jessel M.R. in Nelson v. Dahl, at p 575, approved by Knox C.J. in Thornley v. Tilley [1925] HCA 13; (1925) 36 CLR 1, at p 8:

"[The custom] must be so notorious that everybody in the trade enters into a contract with that usage as an implied term. It must be uniform as well as
reasonable, and it must have quite as much certainty as the written contract itself."

However, it is not necessary that the custom be universally accepted, for such a requirement would always be defeated by the denial by one litigant of the very matter that the other party seeks to prove in the proceedings.

3 A term will not be implied into a contract on the basis of custom where it is contrary to the express terms of the agreement: Summers v. The Commonwealth, at p 148; Rosenhain v. Commonwealth Bank of Australia [1922] HCA 41; (1922) 31 CLR 46, at p 53. One explanation of this principle is that, in so far as it relates to written contracts, it is simply an application of the parol evidence rule, by which extrinsic evidence is generally inadmissible to add to, vary or contradict the express terms of a contract which has been reduced to writing: Bacchus Marsh Concentrated Milk Co. Ltd (in liquidation) v. Joseph Nathan & Co. Ltd [1919] HCA 18; (1919) 26 CLR 410, at p 427; Hoyt's Proprietary Ltd v. Spencer [1919] HCA 64; (1919) 27 CLR 133, at pp 143-144. A more fundamental explanation is that the presumed intention of the parties, on which the importation of the custom rests (Produce Brokers Company Limited v. Olympia Oil and Cake Company Limited (1916) 1 AC 314, at p 324; cf. Treitel, The Law of Contract (1983) 6th ed., at p 164), must yield to their actual intention as embodied in the express terms of the contract, regardless of whether the contract is written or oral.

It has sometimes been said that the implication of a term into a contract does not depend on the parties' intention, actual or presumed, but on broader considerations: Shell U.K. Ltd v. Lostock Garage Ltd (1976) 1 WLR 1187, at p 1196; (1977) 1 All ER 481, at p 487; Lister v. Romford Ice and Cold Storage Co. Ltd [1956] UKHL 6; (1957) AC 555, at pp 576, 579; Liverpool City Council v. Irwin [1976] UKHL 1; (1977) AC 239, at pp 257-258. But these statements are directed to situations in which the courts have been asked to imply terms amounting to rules of law applicable to all contracts of a particular class. The present case is of a different kind in which it may be necessary to speak of presumed intention. In matters of this kind, that phrase means no more than that the general notoriety of the custom makes it reasonable to assume that the parties contracted on the basis of the custom, and that it is therefore reasonable to import such a term into the contract.

4 A person may be bound by a custom notwithstanding the fact that he had no knowledge of it. Historically the courts approached this question in a rather different way. It was said that, as a general rule, a person who was ignorant of the existence of a custom or usage was not bound by it. To this rule there was a qualification that a person would be presumed to know of the usage if it was of such notoriety that all persons dealing in that sphere could easily ascertain the nature and content of the custom. It would then be reasonable to impute that knowledge to a person, notwithstanding his ignorance of it (see Halsbury's Laws of England 4th ed., vol.12, pars 467-468; Jones v. Canavan (1972) 2 NSWLR 236, at p 243). In this way, the issue of notoriety discussed in (2) above came to be co-extensive with the question of imputed knowledge. The achievement of sufficient notoriety was both a necessary and sufficient condition for knowledge of a custom to be attributed to a person who was in fact unaware of it. The result is that in modern times nothing turns on the presence or absence of actual knowledge of the custom; that matter will stand or fall with the resolution of the issue of the degree of notoriety which the custom has achieved. The respondent's contention that industry practices unknown to the assured are incapable of forming the basis of an implied term of the contract cannot be sustained.” 37 

[56] As is evident from the decision in Con-Stan there is a high threshold to overcome before a term will be implied into a contract by reason of custom and usage. A number of factors in this case tell against the conclusion that the practice referred to earlier was so well known and acquiesced in that everyone making a contract in that situation can reasonably be presumed to have imported that term into the contract. First, there are the various iterations of the motor vehicle policy, which have been in place since at least January 1999 and have consistently provided, in effect, that toll charges incurred as a result of company business will be reimbursed and that toll costs incurred for private purposes are to the account of the employee. 38

[57] I do not need to resolve the question of whether the employees had notice of these policies because, in my view, the fact that those policies were promulgated is evidence that Siemens did not acquiesce in the practice; it maintained a policy contrary to it. In any event there is some evidence that policies were communicated and that some of the affected employees were aware of the policies. 39 Secondly, there is the uncontested evidence given by Ms Carris, a HR Operations Consultant with Siemens, to the effect that the practice developed by reason of a failure by the oversight of toll expenditure by managers of relevant business units.40 The failure in oversight indicates a failure by the relevant managers to comply with and apply the relevant motor vehicle policies. The practice which ensued as a consequence was one allowed to develop through inadvertence and poor management rather than there being acquiescence to it. Thirdly, there is evidence that some affected employees, including two who gave evidence, signed a document at the time when an e-TAG was issued acknowledging that the e-TAG was to be used “strictly for business use only”.41 Strictly speaking, the documents acknowledging limited use of the e-TAG is given for the benefit of Siemens Building Technologies Pty Ltd (ACN 003 124 276). This is not the entity that is party to this dispute, covered by the Agreement, or the current employer of the affected employees. I gave the parties an opportunity to make submissions on this issue.42

[58] Siemens submitted 43 that this entity was formerly known as Landis & Gyr (Australia) Pty Ltd and Staefa Control System Pty Limited. It submitted that this entity was acquired by the Siemens Group in or around 1998/99 and subsequently integrated into the Siemens Ltd business in or around 2003, with employees transferring to Siemens Ltd at that point in time.  It submitted that following the transfer of employees and integration into the Siemens Ltd business, the Siemens Building Technologies Pty Ltd entity was deregistered. 

[59] Siemens submitted that the Siemens Building Technologies Pty Ltd entity was the employer that was a party to the relevant predecessor enterprise agreements in which the provisions that are the subject of the current dispute initially appeared. It submitted that when employees were transferred from this entity to Siemens Ltd it was on the same terms and conditions of employment that applied in their employment with Siemens Building Technologies Pty Ltd immediately prior to the transfer and that this included the applicable enterprise agreement and any acknowledgments signed by employees in relation to e-TAGs.

[60] Apart from submitting that Siemens was not a party to the acknowledgement documents signed by some of the affected employees, the CEPU did not make any submission that contradicted the position advanced by Siemens, nor did the CEPU seek to make any further submissions by way of challenging the position advanced by Siemens. In the circumstances, I accept the submissions of Siemens and note that they are consistent with a common practice adopted, particularly unionised industries, when businesses restructure or are sold and employees are re-employed by the newly restructured entity, or by the entity acquiring a business.

[61] In these circumstances, the existence of the acknowledgement also tells against the implication into the contracts of employment of the affected employees of the practice to which earlier reference was made.

[62] It follows that clause 2.3 of Parts A and B of the Agreement does not prevent Siemens from proceeding to implement the e-TAG procedure. It also follows that clause 2.3 of Parts A and B of the Agreement is not a mechanism through which the claim for private use of a TOT vehicle by an employee for the purposes of travelling to and from work during Monday to Friday may be resolved.

Conclusion

[63] For the reasons given, there is nothing in Appendix C of the Agreement or in clause 2.3 of Parts A and B of the Agreement preventing Siemens from proceeding with the e-TAG procedure. Moreover clauses 24.5(f) and 25.5(f) of Parts A and B respectively, are consistent with the e-TAG procedure. This proceeding was confined to the resolution of the issue earlier noted. I was not asked to determine whether there may be other impediments to the implementation of various parts of the e-TAG procedure. The dispute is resolved accordingly and no order is necessary.

[64] Finally, I am aware that the parties have previously had discussions about the claim for private use of a TOT vehicle by an employee for the purposes of travelling to and from work during Monday to Friday. If the parties wish me to make a recommendation about how that issue might be resolved, I am content to make one upon receiving advice from both parties that a recommendation is sought. That advice should be given in writing and sent to my chambers within 14 days of the date of this decision.

DEPUTY PRESIDENT

Appearances:

Ms L Weber on behalf of the Applicant.

Mr J Tracey of Counsel on behalf of the Respondent.

Hearing details:

Melbourne.

2016.

March 2.

 1   [2012] FWAA 625.

 2   Clause 2 of the Agreement.

 3   Clause 1 of the Agreement, [2012] FWAA 65 at [5].

 4   Exhibit 7 at [3] and attachments SC – 1 to SC – 5 thereto.

 5   Exhibit 6 at [19], attachment AW-1; Exhibit 7, attachment SC-3.

 6   Exhibit 6, attachment AW-1 at p 3.

 7   ibid at p 4.

 8   Ibid.

 9   ibid at p 6.

 10   ibid at p 9.

 11   ibid at p 10.

 12 Exhibit 7 at [3].

 13   Ibid and attachment SC-4.

 14   Ibid and attachment SC-5.

 15   Email from CEPU (L Weber) to my chambers on 7 March 2016.

 16   Exhibit 7 at [4] – [5] and attachment SC-6 thereto.

 17   Exhibit 3 at [6] and attachment AH1 thereto; Exhibit 5 at [5] and attachment DH1 thereto.

 18   Exhibit 2 at [4]; Exhibit 3 at [6]; Exhibit 4 at [5]-[6]; Exhibit 5 at [5]-[7]; Exhibit 8 at [10]-[11].

 19   Exhibit 6 at [21]-[22].

 20   Exhibit 7 at [6] –[7].

 21   See Transcript PN166-PN181.

 22 Reply submissions of the Applicant, 26 February 2016 at [12].

 23   Exhibit 2, Attachment GV1.

 24   Ibid.

 25   Ibid.

 26   Several copies of the notice are in evidence; see for example Exhibit 2, Attachment GV1.

 27   Transcript PN 15-PN21.

 28   See Exhibits 2 to 6.

 29   And presumably also clause 25.4 and Appendix A of Part B.

 30   [2014] FWCFB 7447.

 31   See further Macquarie Concise Dictionary, Fifth Edition.

 32   The same provisions are to be found at clause 24.5(c)(iv) and (d)(i).

 33   Transcript PN 428-PN431.

 34   Ibid.

 35   Exhibit 1 at [4], [7]-[8].

 36 (1986) 160 CLR 226.

 37   Ibid at 236-237.

 38   See for example clause 7.2 of the January 1999 policy, Exhibit 7 attachment SC1.

 39 Exhibit 8 at [4], [10]-[11], attachment PS-2; Exhibit 3 at [9]; Exhibit 5 at [8].

 40   Exhibit 7 at [6]-[7].

 41   Exhibit 7 at attachment sc-6; Exhibit 3, attachment AH1 and Exhibit 5, Attachment DH1.

 42   See email from my Chambers to the Parties dated 3 March 2016.

 43   See email from Solicitors for Siemens to my Chambers dated 9 March 2016.

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