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

[2013] FWC 4712

[2013] FWC 4712

The attached document replaces the document previously issued with the above code on 19 July 2013.

The document has been amended by deleting the words “K. Reidy on behalf of the Applicant” from the Appearances at the end of the document.

Dean Berman

Acting Associate to Commissioner Lewin

Dated 20 August 2013

[2013] FWC 4712

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
SPI PowerNet Pty Ltd; SPI Electricity Pty Ltd & SPI PowerNet Pty Ltd
(C2011/5217)

COMMISSIONER LEWIN MELBOURNE, 19 JULY 2013

Application to deal with a dispute over the application of a term of an Enterprise Agreement- Interpretation of Enterprise Agreements- “income ordinarily earned”- principles of interpretation- extrinsic materials- overtime not income ordinarily earned- construction of Agreement by applicant not intended by Agreement makers.

Introduction

[1] This Decision concerns an Application for the Commission to deal with a dispute over the application of the terms of an Enterprise Agreement. The Agreement is the SPI PowerNet & SPI Electricity - ETU Enterprise Agreement 2010-2013 (The Agreement). The Agreement was approved by Commissioner Bissett on 8 November 2010. The dispute concerns the application of Clause 12 of the Agreement which will be set out further below. Section 739 of the Fair Work Act 2009 (the Act) provides that the Commission may deal with disputes of the kind in respect of which the Application is made as follows:

739 Disputes dealt with by the FWC

(1) This section applies if a term referred to in section 738 requires or allows the FWC to deal with a dispute.

(2) The FWC must not deal with a dispute to the extent that the dispute is about whether an employer had reasonable business grounds under subsection 65(5) or 76(4), unless:

(a) the parties have agreed in a contract of employment, enterprise agreement or other written agreement to the FWC dealing with the matter; or

(b) a determination under the Public Service Act 1999 authorises the FWC to deal with the matter.

Note: This does not prevent the FWC from dealing with a dispute relating to a term of an enterprise agreement that has the same (or substantially the same) effectas subsection 65(5) or 76(4) (see also subsection 55(5)).

(3) In dealing with a dispute, the FWC must not exercise any powers limited by the term.

(4) If, in accordance with the term, the parties have agreed that the FWC may arbitrate (however described) the dispute, the FWC may do so.

Note: The FWC may also deal with a dispute by mediation or conciliation, or by making a recommendation or expressing an opinion (see subsection 595(2)).

(5) Despite subsection (4), the FWC must not make a decision that is inconsistent with this Act, or a fair work instrument that applies to the parties.

(6) The FWC may deal with a dispute only on application by a party to the dispute.

[2] Section 738 of the Act is set out below:

738 Application of this Division

This Division applies if:

(a) a modern award includes a term that provides a procedure for dealing with disputes, including a term in accordance with section 146; or

(b) an enterprise agreement includes a term that provides a procedure for dealing with disputes, including a term referred to in subsection 186(6); or

(c) a contract of employment or other written agreement includes a term that provides a procedure for dealing with disputes between the employer and the employee, to the extent that the dispute is about any matters in relation to the National Employment Standards or a safety net contractual entitlement; or

(d) a determination under the Public Service Act 1999 includes a term that provides a procedure for dealing with disputes arising under the determination or in relation to the National Employment Standards.

[3] The Agreement applies to SPI PowerNet & SPI Electricity (SPI) and their employees. The Agreement includes terms that provide a procedure for dealing with disputes between SPI and their employees. The terms are set out at clause 7 of the Agreement as shown below.

7. DISPUTE RESOLUTION PROCEDURE

7.1 This procedure applies with respect to the following matters:

(a) the terms of this agreement;

(b) a matter that would fall within the scope of “permitted matters” as defined by the Fair Work Act 2009 (excluding “unlawful content” as defined by the Fair Work Act 2009); and

(c) the National Employment Standards.

7.2 At all stages of the procedure, a party to the dispute may appoint another person, organisation or association, which may include the Union, to accompany or represent them in relation to the dispute.

7.3 In the first instance, the parties to the dispute must try to resolve the dispute at the workplace level, by discussions between the employee or employees and relevant supervisors.

7.4 If the matter is not resolved according to clause 7.3 above, the matter will be referred to the appropriate line manager who will attempt to resolve the matter.

7.5 If still unresolved, the matter will be immediately referred to the appropriate General Manager, the Workplace Relations Manager and the relevant employee representative, if requested by the employee.

7.6 If the parties agree, the matter may go to an independent mediator (from an agreed list between the parties) before the matter being referred to the step set out in 7.7. Where mediation has been unsuccessful the parties may agree that the mediator propose in writing a resolution for the parties to consider.

7.7 If still unresolved or the parties don’t agree to go to mediation, the matter will be referred to Fair Work Australia (FWA) by either party for resolution, which includes conciliation, and arbitration, if necessary, and the parties shall abide by any outcome. If arbitration is necessary, the FWA may exercise its procedural powers in relation to hearings, witnesses, evidence and submissions which are necessary to make the arbitration effective.

Note: Any or all of steps 7.4 and 7.5 may be by-passed in the interests of a speedy resolution to the matter.

7.8 Further it is agreed:

(a) The parties will monitor the implementation of this Agreement and cooperate in resolving any problems which might arise in giving effect to any part of this Agreement.

(b) The Parties will attempt to settle any dispute quickly;

(c) While the dispute is being progressed through the steps in this procedure, the parties agree that the status quo at the time of the commencement of the dispute shall prevail;

(d) From the time a dispute first starts to when it is resolved, normal work shall continue, unless the performance of that work would place at risk the health and/or safety of the employee(s) concerned.

(e) If a dispute arises in relation to work practices, the company will revert to the work practice(s) in place prior to the dispute arising.

(f) Shop stewards will be allowed the necessary time/resources to properly represent their members, including reasonable time to where necessary meet with accredited union officials.

[4] The Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU) has made an application, on behalf of members of the organisation employed by SPI, whose employment is covered by the Agreement, for the Commission to deal with the dispute in accordance with the provisions of Clause 7 of the Agreement, under s.739 of the Fair Work Act 2009 (the Act).

[5] It will be noted that the terms of the Dispute Resolution Procedure of the Agreement require or allow the Commission to deal with a dispute of the kind subject to the Application in this matter. By Clause 7 of the Agreement the parties to the Agreement have agreed that the Commission may arbitrate a dispute of the kind that is the subject of the Application. It is not disputed by SPI that the matter is before the Commission for arbitration in accordance with the terms of Clause 7 of the Agreement and the provisions of s.739 of the Act.

Characterisation of the dispute

[6] The subject matter of the dispute is the proper application of Clause 12 of the Agreement. The terms of Clause 12 are set out below:

12. AVAILABILITY AND ALLOWANCES

12.1 Where an employee is moved by the employer from the availability roster, or the roster alters to reduce the availability allowances, or there is a restructure or a relocation by the employer that impacts on the employee, the employee will be entitled to 2 years compensation for the income that they would have ordinarily earned.

12.2 That is, two years payment will be made excepting that if an employee has been in receipt of the allowance for less than 2 years, a pro rata amount of lump sum compensation is to be paid.

[7] The relevant factual circumstances in which the dispute arises have been the subject of an earlier Decision of the Commission in Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU) v SPI PowerNet Pty LTD; SPI Electricity Pty Ltd. 1

[8] SPI is involved in the business of distributing electricity in Victoria. The operational organisation of maintaining the distribution infrastructure of SPI includes geographic divisional boundaries and depots from which maintenance crews respond to faults in the distribution infrastructure, within those defined geographic boundaries determined by SPI. Such faults can arise from a wide range of causes including storms, bushfires and deterioration of elements of the infrastructure.

[9] The dispute concerns the employees employed at the Benalla depot of SPI’s Victorian operation. SPI has restructured the boundaries within which crews from the Benalla depot respond to faults. Some of the geographic area within which those employees previously responded to faults has been allocated to other depots as a result of the restructure.

[10] The Benalla employees submit that a consequence of this restructure is that they have lost and will lose income they would have ordinarily earned as a consequence. They submit that Clause 12 of the Agreement requires that compensation must be paid by SPI for such loss of income.

[11] SPI submits that the proper construction of the Agreement does not require payment for the particular income which is said to be lost by the employees.

[12] Clearly, Clause 12 of the Agreement attracts a conflicting interpretation of the proper application of its terms to the circumstances of the employees working from the Benalla depot. It is however, necessary to characterise the dispute more precisely before proceeding to consider the application of Clause 12 to the relevant factual circumstances.

[13] The employees concerned are rostered to perform ordinary hours in accordance with the terms of the Agreement and at other times be available to attend for work and are paid respectively for these incidents of their employment. In the latter case employees are paid an amount referred to as an availability allowance. In addition to payment for rostered ordinary hours and for availability to work, employees may be required to work overtime in order to deal with faults occurring within the Benalla depot boundaries.

[14] The issue in dispute concerns the application of the terms of Clause 12 of the Agreement to overtime worked, or perhaps more precisely to overtime not worked, by employees as referred to above, as a consequence of the change to boundaries within which the employees working from the Benalla depot respond to faults.

[15] The issue is grounded in the submission that employees from other surrounding depots will now respond to faults which occur in the area previously within the boundaries of the Benalla depot’s responsibility. Consequently, it is submitted, fault responses which would have required overtime work under the old boundaries will no longer be attended to by employees from the Benalla depot and the remuneration for that overtime lost is the lost income for which Clause 12 of the Agreement requires the Benalla employees be compensated. This is because, on what is before the Commission, there has been no loss of income from changes to the Benalla employee’s rosters of ordinary hours of work or requirement of availability to attend for work and payment of availability allowance which arises from the restructuring of the geographic boundaries of the Benalla depot’s fault response allocations.

[16] Therefore, the facts upon which the CEPU rely are said to be reductions in the amount of remuneration of the relevant employees arising from the payment for overtime work which the CEPU says arise as a consequence of the restructuring of the depot boundaries, which it says are changes which impact upon the employees working at the Benalla depot as provided for by Clause 12 of the Agreement.

[17] Witness evidence was called by the CEPU which the CEPU submits establishes that some employees, at least, have received less remuneration for overtime work than they received prior to the boundary changes, as a consequence of the restructure.

Principles of construction

[18] It is appropriate at this point to refer to the approach to be taken to the interpretation of the terms of an Enterprise Agreement.

[19] Relevant authority governing the approach to the interpretation of Enterprise Agreements includes the decision of Madgwick J in Kucks v CSR Ltd (Kucks) 2 which has been followed with widespread approval by the Tribunal and its predecessors.3

‘It is trite that narrow or pedantic approaches to the interpretation of an award are misplaced. The search is for the meaning intended by the framer(s) of the document, bearing in mind that such framer(s) were likely of a practical bent of mind: they may well have been more concerned with expressing an intention in ways likely to have been understood in the context of the relevant industry and industrial relations environment than with legal niceties or jargon. Thus, for example, it is justifiable to read the award to give effect to its evident purposes, having regard to such context, despite mere inconsistencies or infelicities of expression which might tend to some other reading. And meanings which avoid inconvenience or injustice may reasonably be strained for. For reasons such as these, expressions which have been held in the case of other instruments to have been used to mean particular things may sensibly and properly be held to mean something else in the document at hand.

But the task remains one of interpreting a document produced by another or others. A court is not free to give effect to some anteriorly derived notion of what would be fair or just, regardless of what has been written into the award. Deciding what an existing award means is a process quite different from deciding, as an arbitral body does, what might fairly be put into an award. So, for example, ordinary or well-understood words are in general to be accorded their ordinary or usual meaning.’

[20] The Commission has also endorsed the well established principles in Short v FW Hercus Pty Ltd 4in relation to the interpretation of awards, which are equally applicable to the interpretation of industrial agreements.

“No one doubts you must read any expression in its context. And if, for example, an expression was first created by a particularly respected draftsman for the purpose of stating the substance of a suggested term of an award, was then adopted in a number of subsequent clauses of awards dealing with the same general subject, and finally was adopted as a clause dealing with that same general subject in the award to be construed, the circumstances of the origin and use of the clause are plainly relevant to an understanding of what is likely to have been intended by its use. It is in those circumstances that the author of the award has inserted this particular clause into it, and they may fairly be regarded as having shaped his decision to do so. The rules of construction, Mason and Wilson JJ. said in Cooper Brookes (Wollongong) Proprietary Limited v. The Commissioner of Taxation of the Commonwealth of Australia (1981) 147 CLR 297 at 320, are really rules of common sense. Common sense would be much offended by a refusal to look at the facts I have summarized. As Isaacs J. said in Australian Agricultural Company v. Federated Engine-Drivers and Firemen’s Association of Australasia (1913) 17 CLR 261 at 272, citing Lord Halsbury L.C.: “The time when, and the circumstances under which, an instrument is made, supply the best and surest mode of expounding it.”

The context of an expression may thus be much more than the words that are its immediate neighbours. Context may extend to the entire document of which it is a part, or to other documents with which there is an association. Context may also include, in some cases, ideas that gave rise to an expression in a document from which it has been taken. When the expression was transplanted, it may have brought with it some of the soil in which it once grew, retaining a special strength and colour in its new environment. There is no inherent necessity to read it as uprooted and stripped of every trace of its former significance, standing bare in alien ground. True, sometimes it does stand as if alone. But that should not be just assumed, in the case of an expression with a known source, without looking at its creation, understanding its original meaning, and then seeing how it is now used. Very frequently, perhaps most often, the immediate context is the clearest guide, but the court should not deny itself all other guidance in those cases where it can be seen that more is needed. In literature, Milton and Joyce could not be read in ignorance of the source of their language, nor should a legal document, including an award, be so read.

...Where the circumstances allow the court to conclude that a clause in an award is the product of a history, out of which it grew to be adopted in its present form, only a kind of wilful judicial blindness could lead the court to deny itself the light of that history, and to prefer to peer unaided at some obscurity in the language. “Sometimes”, McHugh J. said in Saraswati v. R (1991) 172 CLR 1 at 21, the purpose of legislation “can be discerned only by reference to the history of the legislation and the state of the law when it was enacted”. Awards must be in the same position.”

[21] While I consider the written evidence called by the CEPU is of questionable probative value in establishing that there has been a reduction in the remuneration payable to the relevant employees which can be attributed, with certainty, to the variation in the boundaries within which employees working at the Benalla depot respond to faults, I will first consider whether the terms of the Agreement operate in a way that, if such a factual scenario could be bought to convincing proof, a reduction of remuneration for such overtime work falls within the meaning of Clause 12 of the Agreement, so as to create an obligation upon SPI to compensate an employee.

[22] In the Commission’s decision of 26 August 2011 5, it was determined that the change to the depot boundaries under consideration constitutes a restructure which impacted upon employees working at the Benalla depot, thus the terms of Clause 12 of the Agreement apply, as far as they give rise to obligations upon SPI.

[23] The question now to be determined is limited to whether such obligations extend to compensation payable to employees for any reduction in remuneration earned from overtime work which can be said to be attributable to the restructuring of the depot boundaries.

[24] It is pertinent at this point to note that in construing a disputed term of an Enterprise Agreement the relevant terms must, among other things, be considered in the immediate context in which they appear and in the overall context of the Agreement.

[25] The CEPU submits that overtime remuneration can be characterised as “income that [an employee] would have ordinarily earned” prior to the restructuring of the Benalla depot boundaries, thus, any reduction in such remuneration is subject to the obligation expressed in Clause 12 of the Agreement upon SPI to compensate the relevant employees, as it arises from the restructure of the depot boundaries.

[26] In my view, unless such remuneration can, in the context of the terms of Clause 12 of the Agreement and the Agreement as a whole, be properly characterised as income an employee would ordinarily earn CEPU’s submission that the employees are entitled to compensation for any reduction in remuneration earned from overtime work as a result of the boundary restructure cannot succeed.

[27] SPI submit that a proper construction of Clause 12 limits SPI’s obligation to compensate employees to lost remuneration for availability to attend work, which is the money amount of availability allowance the affected employees would ordinarily earn. SPI draws attention to the heading of Clause 12, the introductory words to Clause 12.1 and the terms of Clause 12.2.

[28] If SPI’s submission is upheld the compensation obligation prescribed by Clause 12 of the Agreement is confined to any loss of remuneration for availability in the form of the amount of the availability allowance prescribed by the Agreement ordinarily paid to those who are affected by any event described in Clause 12 of the Agreement. On this submission The terms of Clause 12 of the Agreement have no other effect in any relevant circumstance.

[29] As a matter of fact, on what is before me, there is no such lost remuneration. That is to say, specifically, on what is before me, there has been no reduction in the amount of availability allowance ordinarily paid to the Benalla depot employees as a consequence of the boundary restructure.

Extrinsic Materials

[30] Evidence was called by SPI and the CEPU concerning the history of Agreement and negotiations for Agreements covering the period between the SPI PowerNet/ Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia Enterprise Bargaining Agreement 2004 (the 2004 Agreement) and the Agreement now under consideration.

[31] That evidence was a contest between the CEPU and SPI over conclusions which could be drawn from negotiations and interactions between them in relation to the history of the making of the Agreement. In essence, the purpose of the evidence was to extol competing views of the meaning of Clause 12 of the Agreement having regard to the negotiations between the making of the 2004 Agreement, a Common Law Agreement, and the 2010 Agreement, including the subjective perspectives and intentions of the parties in relation to Clause 12 of the Agreement and its predecessors. SPI’s evidence included reliance on the interpretation of the Agreement adopted in practice by SPI and actions of the CEPU in relation thereto. In these respects SPI submits that I should have regard to correspondence between SPI and the CEPU when the Agreement was being created.

[32] In this case, I find it unnecessary and undesirable to rely on extrinsic material to determine the dispute by reference to the subjective views of the parties to the negotiations for the making of the Agreement and the making of previous Agreements and any unilateral interpretation of the Agreement. I will confine my consideration to a textual construction of the Agreement.

[33] The general principle under which the determination of disputes concerning the proper application of an Enterprise Agreement by reference to extrinsic materials is that as far as possible the Commission should rely upon the words of the instrument. In my view, only if a commonsense meaning cannot be arrived at for the proper application of disputed terms of an Enterprise Agreement should the Commission consider resort to the use of extrinsic material.

[34] It is however notable that there was a change from the previous 2004 Agreementwhen the current Agreement was made.

[35] While I intend to construe Clause 12 of the Agreement without reliance on evidence of the negotiating behaviours and communications of SPI and the CEPU and their respective subjective intentions when the Agreement and its predecessors were made, I will note the historical evolution of relevant provisions of Agreements recorded by the parties as a result of their negotiations.

[36] The 2004 Agreement was made in Melbourne and was certified by the Australian Industrial Relations Commission on 16 December 2004.

[37] The 2004 Agreement contained the following provisions at Appendix A thereof:

3.6 Other Allowances

For employees who are in receipt of a radial allowance, or availability allowance, the following shall apply:

Employees relocated to a workplace where a different allowance applies, or where no allowance entitlement exists, shall receive, on relocation, either

(a) the higher allowance if it applies to the new location

(b) the difference between the allowances for a two (2) year period, if a lower allowance applies to the new location; or

(c) the total current allowance, assessed over a two (2) year period, as a lump sum payment if no allowance applies at the new location.

(d) Provided that where an employee has been in receipt of the allowance for less than two (2) years, the payment shall be calculated on a completed months basis.

[38] What was referred to as a common law Agreement was made in 2007 which contained the following provisions:

4.10 Availability and Allowances

Where an employee is moved by the employer from the availability roster or the roster alters to reduce the availability allowances, or there is a restructure or a relocation by the employer that impacts on the employee, the employee will be entitled to 2 years compensation for the income that they would have ordinarily earned.

That is, two years payment will be made excepting that if an employee has been in receipt of the allowance for less than 2 years, a pro rata amount of lump sum compensation is to be paid.

[39] On what is before me, it would seem that the provision of the 2004 Agreement is the first occasion upon which compensatory payments of the kind under consideration appeared in an Agreement between SPI and the CEPU. It is clear therefore that, at its origins, the scope of the subject matter of what is now Clause 12 of the Agreement was confined in highly specific terms to loss of availability allowance and radial allowance, due to the relocation of an employee.

[40] It will be observed that the provisions of the 2004 Agreement are not identical to the 2010 Agreement and the latter evidences a textual evolution between the 2004 Agreement and the 2010 Agreement to which some meaning must be ascribed. Consequently, it seems to me to be tolerably clear that the 2010 Agreement, via the Common Law Agreement, evidences an expansion of the scope of the obligations conferred by Clause 12 of the Agreement beyond a singular and exclusive provision for payment of an amount of compensation on account of a reduction in remuneration payable as availability allowance and radial allowance, due exclusively to the relocation of an employee.

[41] In my view, it is reasonable to construe the more expansive and less specific terms of Clause 12 of the Agreement as embodying something more than payment of compensation in the limited circumstances of Clause 3.6 of Appendix A of the 2004 Agreement. Clearly, for example, the conditions precedent to the payment of any such compensation is expanded to include a restructure, in addition to a relocation. Impacts arising from a restructure may differ from those arising from a relocation. Income ordinarily earned may include remuneration other than availability or radial allowances.

[42] Therefore, of significance for my consideration of Clause 12.1 of the Agreement is that the amount of remuneration in respect of which compensation is prescribed is not specifically and expressly referred to as radial or availability allowance but ‘income that an [employee] would have ordinarily earned.” This consideration raises the question of how far these different words convey a meaning of the amounts of remuneration in respect of which compensation is payable beyond the previous limited circumstantial entitlement to compensation for the allowances expressly provided for by Clause 3.6 of Appendix A of the 2004 Agreement.

Income - “ordinarily earned”

[43] In my view, it is reasonable to construe the meaning of the words income ordinarily earned to include all income which would have been earned because of the roster of ordinary hours and the availability allowance, or other such allowance, which form a constant and planned feature of the pattern of the employment of the relevant employees, as a consequence of a restructure of depot boundaries but, which is no longer earned. That is, such payments that would ordinarily be made, according to rostered ordinary hours or the pre-arranged pattern of work of the employees, as the usual course of the performance of their work, without requiring compensation for overtime.

[44] I think it is clear from the widespread approval of the approach to the interpretation of industrial instruments discussed in Kucks that a literalist or simple plain meaning approach to the text of such instruments must be applied cautiously. Industrial instruments are not created by parliamentary drafting officers or commonly by legal practitioners. The Commission should strive to discern the mutual intention of the Agreement makers and discern the purpose of the relevant terms and the mutuality of that purpose.

[45] In my view, remuneration for overtime work should not be construed as income that a relevant employee would ordinarily earn. Rather, overtime work is by the use of the words “income ordinarily earned”, impliedly, at least, excluded from the obligation to pay the relevant compensation claimed by the CEPU to employees by the express terms of the Agreement.

[46] Ordinarily is the adverb of the adjective ordinary. Ordinary in the Macquarie Dictionary has the following meanings:

1. such as a commonly met with; of the usual kind.

2. not above, but rather below, the average level of quality; somewhat inferior.

3. customary; normal: for all ordinary purposes.

4. immediate as contrasted with that which is delegated.

5. belonging to the regular staff or the fully recognised class.

6. the ordinary condition, degree, run, or the like: out of the ordinary.

7. something regular, customary or usual.

[47] The word usual has the following meaning:

1. habitual or customary: his usual skill.

2. such is commonly met with or preserved in experience: ordinary: the usual January weather.

3. in common use; common; say the usual things.

4. as usual, he will come as usual.

5. that which is usual or habitual.

(emphasis original)

[48] Overtime work is something that may or may not be performed by an employee in their employment. Rather than being usual, that is to say habitual, each day of work of an employee will normally have the potential, possibility and an unpredictable level of probability, but not the certainty, of overtime being worked. Accordingly, it is not appropriate to characterise the receipt of remuneration for overtime work as being an ordinary event but rather than one contingent upon particular circumstances both of fact and degree; a possible, indeed probable but unpredictable eventuality rather than one which is usual and known to be a part of the course of events which will be followed with certainty.

[49] In reaching this conclusion, I am mindful that the Agreement is an industrial instrument, the words ordinary/ordinarily, earn/earnings and income in various configurations and contexts are always capable of carrying shades of meaning derived from the context in which industrial instruments are made and how such instruments deal with these concepts for industrial purposes.

[50] While not expressly used in Clause 12 of the Agreement there would seem to be an affinity to the concept of ordinary earnings and even perhaps ordinary time earnings in the lexicon and terminology of industrial parlance, which marks a line between earnings which form part of the usual and scheduled pattern of hours, days and times of work on the one hand and the incidence of occasional overtime work which impacts upon an employee’s earnings in various ways from time to time.

[51] The effect of my interpretation is that Clause 12 of the Agreement obliges SPI to pay to an employee compensation for any remuneration lost by way of a change to their rostered ordinary hours of work and their rostered availability, or other such scheduled and usual payments ordinarily made over a period of two years from a restructure or relocation as described in Clause 12 of the Agreement.

The CEPU’s Application of the terms of the Agreement to relevant factual circumstances

[52] While the characterisation of a dispute concerning the application of the terms of an Enterprise Agreement should not be confused with potential remedies, it is informative to consider the CEPU’s position in relation to the practical application of the obligation to pay compensation it submits arises in relation to overtime work in the circumstances under consideration.

[53] As I understand it, in order to fulfil the relevant obligation the CEPU submits arises under Clause 12 of the Agreement, it would be necessary for SPI to identify faults attended to by employees from other depots within the excised portion of the geographic boundaries of the Benalla depot as a result of the restructure, over a two year period following the restructure. It would then be necessary to identify which of the Benalla employees would have performed the relevant work and if so as overtime, in order to attend to that fault, had the boundaries not been varied. The CEPU submits that this is income that the relevant Benalla employee would, prior to the boundary restructure, “have ordinarily earned”.

[54] The situation, which the CEPU concedes, is that, depending upon circumstance, an employee at the Benalla depot may in the two years following the restructure receive greater remuneration for overtime work than before the restructure. This is because if demands for overtime work increase within the restructured boundaries in those two years the CEPU’s construction of Clause 12 of the Agreement means that the employee may work the same if not more overtime within the new boundaries and in addition be compensated for overtime not worked by them but worked by employees from other depots attending to faults in excised geographic areas. I raised this unusual consequence of the CEPU’s position during the hearing. The difficulty was conceded. The CEPU suggested that perhaps some averaging or other approach of calculation of probabilities of lost opportunities to work overtime might facilitate the process whereby the compensation obligation they submit arises could be discharged in relation to the relevant employees

[55] The CEPU’s position is clearly extraordinary in its dimensions. It is difficult, to say the least, to be satisfied that the parties envisaged this when making the Agreement, without any consideration of their subjective intentions or communications. The position is predicated not on what employees would ordinarily earn or any loss of total overtime earnings but rather on what they might have earned in addition to any overtime actually earned if the boundaries had not been restructured.

[56] The position is based not on compensation for income earned in the ordinary or usual course of the employment of the employees but rather on a proprietary interest in overtime opportunities that might for example occur within two years after a depot boundary restructure. Moreover, employees would in accordance with this position be paid for overtime they are not required to and would not perform. Rather, they would be paid for work performed by other employees, who SPI would also pay for such work.

[57] In my view, this position illustrates the common sense of interpreting the intention of the parties to be to provide a measure of compensation to employees whose ordinary scheduled, fixed, or rostered working hours and availability to work are altered as a consequence of a restructure or a relocation, to maintain for the relevant two year period the reliability of the established and usual income ordinarily earned by them. In my judgement, this is the intention of Clause 12 of the Agreement as opposed to Clause 3.6 of the 2004 Agreement and the Agreement is to be applied accordingly.

Conclusion

[58] In this matter on what is before me the employees have not lost any income which, on my interpretation of the meaning of the Agreement, would be subject to the obligation to pay compensation prescribed by the terms of Clause 12 of the Agreement. On what is before me, the income ordinarily earned by the relevant employees subsequent to the restructure of the Benalla depot boundaries continues to be earned. Overtime continues to be earned in addition thereto as a contingent probability rather than a feature of income earned for the ordinary incidents of the employment. While overtime may give rise to income earned for the relevant employees it is not as incidents of the ordinary arrangement of their hours and availability to work but rather a purely coincidental and irregular occurrence, which may or may not arise, although probably will, over a period of their employment which cannot be predicted, either as a specific event or to a certain, ordinary, normal or usual degree.

[59] On what is before me the claim for compensation in respect of remuneration for overtime allegedly not worked as a result of the restructure of the geographic boundaries for fault response by the Benalla employees is not made out and is not an obligation of SPI under Clause 12 of the Agreement. I decide accordingly, by arbitration, pursuant to and for the purposes of Clause 7.7 of the Agreement; that this is the outcome of the dispute.

COMMISSIONER

Appearances:

K. Brotherson on behalf of the Respondent

Hearing details:

Before Commissioner Lewin

2013

Melbourne:

21 February 2013.

Final written submissions:

Applicant: 1 March 2013.

Respondent: 7 March 2013.

 1   [2011] FWA 5825.

 2 [(1996) 66 IR 182]

 3   AMWU v Silcar Pty Ltd [2011] FWAFB 2555.

 4 (1993) 40 FCR 511.

 5   [2011] FWA 5825.

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