Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v v/Line Maintenance Pty Ltd
[2023] FWC 568
•8 MARCH 2023
| [2023] FWC 568 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.739—Dispute resolution, s. 217 – Application to vary an enterprise agreement
Australian Manufacturing Workers’ Union; Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia
v
V/Line Maintenance Pty Ltd
(C2022/6818, C2022/6827)
V/Line Maintenance Pty Ltd
v
Australian Manufacturing Workers’ Union; Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia; and Australian Rail, Tram and Bus Industry Union
(AG2022/5335)
| DEPUTY PRESIDENT COLMAN | MELBOURNE, 8 MARCH 2023 |
Application to deal with a dispute under an enterprise agreement – wages table inconsistent with text – table contains obvious calculation error – whether wages formula also contains error – dispute determined – application to vary agreement under s 217 – agreement varied.
This decision determines three related applications that have been made under the Fair Work Act 2009 (FW Act). The first and second applications are made by the Australian Manufacturing Workers’ Union (AMWU) and the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU). They ask the Commission to determine a dispute between the unions and V/Line Maintenance Pty Ltd (V/Line) arising under the dispute resolution procedure in clause 42 of the Bombardier Transportation Australia V/Line Maintenance Victorian Sites Enterprise Agreement 2020 (Agreement). The two applications are made under s 739 of the Fair Work Act 2009 (Act). The dispute is about whether employees covered by the Agreement must be paid certain wages that appear in a table in clause 48.1, or whether the rates of pay are to be ascertained by reference to both the table and the text of clause 48, including in particular a formula that appears in clause 48.1.2, which produces slightly lower wages than the table. The unions’ primary contention is that V/Line must pay the wages in the table. V/Line contends that the table contains an obvious calculation error, and that the correct wages are determined with reference to the formula. The unions’ alternative contention is that if the Commission finds the wages table in clause 48.1.1 to be ambiguous, it should also conclude that the formula in clause 48.1.2 is ambiguous or erroneous in its treatment of an adjustment to wages in respect of the introduction of the 36-hour week, and that the formula should be read as providing for an additional payment per fortnight. V/Line disputes this and contend that the formula is clear and cannot be read in a manner that accommodates an additional payment.
The third application to which this decision relates is an application by V/Line to vary the Agreement under s 217 of the Act to remove ambiguity or uncertainty by correcting the erroneous figures in the wages table. The unions covered by the Agreement are the AMWU, the CEPU, and the Australian Rail, Tram, and Bus Industry Union (RTBU). Led by the AMWU, the unions oppose the application. They contend that the Agreement is not ambiguous or uncertain because it is clear that the wages in the table must be paid, and that even if the Agreement is ambiguous, the Commission should not alter the wages table because this would reduce employees’ entitlements.
For the reasons that follow, my determination of the s 739 applications is that the wages payable to employees are to be ascertained by reference to clause 48 as a whole. It is obvious that the table of wages contains a calculation error. However, I do not consider that the formula can be read as requiring an additional payment. As to the application under s 217, I have concluded that, although V/Line’s obligations under clause 48.1 are clear, the erroneous figures in the table create uncertainty for persons reading the Agreement, and that it is appropriate to remove this uncertainty by varying the table to correct those figures.
The s 739 applications
The applications lodged by the AMWU and CEPU under s 739 of the Act are in the same terms. Each submits that a dispute has arisen between V/Line and the unions, and that the dispute is that the wages currently being paid to employees covered by the Agreement are lower than the hourly rates set out in clause 48. That clause provides as follows:
“48.1 Wage Rates
48.1.1 The established weekly wage rate level and agreed increases over the life of this Agreement for employees are as follows:
48.1.2 Subject to agreed ongoing flexibility, the wage increases in the table above shall be payable as follows:
· On the first full pay period after the Agreement commences operation:
· Employees will receive a payment about equal to the amount they would have received if the increase on 1 July 2019 (2.5%) had taken effect. The amount will be calculated from the first full pay period on or after 1 July 2019 and will exclude allowances; and
· Employees will receive a payment about equal to the amount they would have received if the increase on 1 July 2020 (2.5%) had also taken effect. The amount will be calculated from the first full pay period on or after 1 July 2020 and will exclude allowances; and
· The parties agree that 5 minutes per shift (for 11 hour shift workers) will be included in the base hourly rate from the implementation of the 36-hour week arrangements, effective from the first full pay period in March 2021 (commencing 14 March 2021). For example: When Employees commence the 36-hour week, their weekly earnings, as described in clause 48.1.1 will be divided as per the calculated example below. The value of that calculation will be the employees new base hourly rate. This rate will increase in line with the future wage increases.
Example (actual figures as per wage table at clause 48.1.1) of the calculation of the new rate of $49.36 p/hr for a C7 employee working a 36 hour week (which will apply from the first full pay period in March 2021):
At 30 June 2019, a C7 employee is paid $1,765.33 per week, meaning $1765.33/38 hours = $46.4560 per hour.
Fortnight equivalent for 76 hours: $1,765.33 x 2 = $3,530.66.
Plus the employee currently receives an additional 0.5hrs as part of the roster pattern. The additional 0.5 hrs is equivalent to $23.228 ($46.456/2)
Total fortnightly pay for 76.5 hours: $3,530.66 + $23.228 = $3553.888
Divide $3553.888 by 72 for the proposed 36-hour week = $49.360
Therefore, $49.360 becomes the example base hourly rate for a C7 employee working a 36-hour week (based on the wage applicable at 30 June 2019)
· The remaining wage increases shall be payable from the beginning of the first full pay period on or after the dates shown in the table above at clause 48.1.1.
Weekly Wage rates include and compensate fully for:
· All allowances not prescribed in clause 48.2 (excluding the meal allowance);
· All skills and competencies within the employee’s classification.”
V/Line acknowledges that it does not currently pay employees the amounts in the table prescribed for the period commencing from the first full pay period after 1 January 2023, but contends that it is not required to do so, because those amounts are plainly wrong, as they reflect an obvious miscalculation in respect of the rates that were applicable from 1 July 2021, which has then affected the rates for the subsequent periods. V/Line maintains that the correct rates are ascertained by reading clause 48.1 as a whole, including the formula in clause 48.1.2. The unions refute this and insist that the company must pay employees the amounts in the table. Alternatively, they say that, if the table is erroneous, so too is the formula in clause 48.1.2, insofar as it pertains to an additional amount by which wages were adjusted in connection with the introduction of the 36-hour week, and that employees are entitled to a further amount.
The question that has been submitted for arbitration by the Commission is the following:
“In respect of the period commencing from the first pay period after 1 July 2021, does clause 48 of the Agreement require the respondent to pay employees: (a) the rates of pay appearing in the table in clause 48.1; or (b) rates of pay ascertained by reference to the table and the text that appears in clause 48.1?”
It was common ground between the parties that the Commission is authorised to determine this question under the dispute resolution procedure in clause 42 of the Agreement, and I am satisfied that they are correct.
Contentions of the parties
The AMWU and the CEPU contended that V/Line must pay employees the rates of pay appearing in the table in clause 48.1. They submitted that the figures in the table are clear and simply mean what they say, whereas the explanation in clause 48.1.2 of how those figures are determined is not clear, because the example that is provided after the fourth bullet point in clause 48.1.2 is inaccurate. First, the example refers to a 76.5-hour fortnightly roster pattern for 11-hour shift workers, when in fact they work a 77-hour fortnight (the roster error). Secondly, the example takes as its starting point for the calculation of rates for the 36-hour week the pay rates that existed when the Agreement was made, rather than the new rates of pay as of 1 July 2020 (the starting point error). The unions contended that because the wages table was clear, but clause 48.1.2 was unclear, the table determined the wages payable, and the Commission should give effect to it.
In the alternative, the unions contended that, if the Commission concluded that the wages table was erroneous, it should also conclude that the formula in clause 48.1.2 contained errors affecting the treatment of the 36-hour ‘adjustment’, and that the provision should be read in a manner that reflected its intended operation. In this regard, two different arguments were advanced. First, in their written submissions, the unions contended that the roster error meant that the formula short-changed employees by half an hour’s pay per fortnight. Secondly, in their submissions in reply, and in oral argument at the hearing, the unions contended that the formula contained yet another mistake: on the one hand, the fourth dot point in clause 48.1.2 stated that the additional amount would include ‘5 minutes per shift’, but on the other, the example applied an additional amount of 30 minutes per roster. This must be a mistake, said the unions, because employees worked seven shifts a fortnight, and seven times five is 35, not 30 (‘the 30-minute error’).
The unions contended that if the Commission took notice of any obvious error in the table in clause 48.1.1, it should do the same thing in relation to the roster error or the 30-minute error in clause 48.1.2 and read the provision as requiring wages to be adjusted by one hour rather than 30 minutes in respect of the former, or at least by 35 minutes instead of 30 minutes in respect of the latter.
The unions contended that the Agreement was approved by the employees on the basis of the plain and ordinary meaning of the document, including in particular the figures in the table. The employer had a duty under s 180(5) of the Act to take all reasonable steps to explain the Agreement to the employees, and if it was not intended that the rates of pay in the table would apply, it should have explained this to employees prior to the vote. Similarly, to the extent that clause 48.1.2 did not reflect employees’ actual working arrangements, this too should have been explained.
V/Line contended that accepted principles of interpretation required clause 48 to be read as a whole and in the context of the Agreement; it was impermissible to look only at the table, as the unions urged the Commission to do. The rates in the table in respect of the periods up to and including the introduction of the 36-hour week on 14 March 2021 were correct and the unions did not contend otherwise. Those rates were then clearly to be increased by 1.75% on each of the first full pay periods after 1 July 2021, 1 January 2022, 1 July 2022, and 1 January 2023. However, it was obvious that the figures in respect of the period from 1 July 2021 were not 1.75% higher than the 36-hour week rates. For example, the rate for a C7 classification on implementation of the 36-hour week was correctly stated to be $51.86. Increasing that rate by 1.75% from the first full pay period after 1 July 2021 produces a new rate of $52.768, not $52.96 as appears in the table. Although the figures for the three later periods did reflect multiples of 1.75%, they were distorted by the miscalculation in respect of the first 1.75% increase. V/Line submitted that the cause of these errors was the fact that the table’s weekly rates of pay effective from 1 July 2021 had been calculated by adding the 36-hour week hourly rate of 14 March 2021 to the weekly rates effective from 1 July 2020. This was an obvious error.
V/Line agreed with the unions that the example that appears in clause 48.1.2 also contains an obvious error, namely the starting point error: in demonstrating how the new 36-hour week rate had been ascertained for the C7 classification, the example had failed to factor in the two increases of 2.5%. When these increases were included, the 36-hour week hourly rate was the figure that appears in the table, namely $51.86. However, the starting point error was both obvious and inconsequential. It was not a reason to doubt the accuracy or clarity of the wages formula, which prescribed the manner in which the rates of pay under the Agreement are determined. That formula had been correctly reflected in the wages table up to and including the figures as of 14 March 2021, but the subsequent figures had been affected by the foundational mistake referred to above, where two figures had been wrongly added together.
V/Line contended that the Commission should reject the unions’ alternative contentions, which claimed, in effect, that the employer must pay employees entirely different and higher amounts in respect of the 36-hour week adjustment. The Agreement simply did not provide for a further half hour’s pay or an additional five minutes’ pay per fortnight in respect of the 36-hour week adjustment.
First, V/Line contended that the alternative contentions amounted to an extra claim, contrary to clause 4 of the Agreement, as they asked the Commission to vary the outcome arrived at in the Agreement in respect of the calculation of wages, and was designed to improve upon or advance the entitlements or interests of employees. V/Line referred in this regard to the decision of Toyota Motor Corporation Australia Limited v Marmara [2014] FCAFC 84 at [55]. Secondly, V/Line submitted that the unions’ alternative contentions did not pertain to the dispute that had travelled through the dispute resolution procedure in the Agreement. The unions had notified the present dispute in terms that contended that the company was paying wages in amounts lower than those appearing in clause 48. At no prior stage had the unions notified a dispute in respect of the company being required to pay wages by some different methodology not found in the Agreement. Thirdly, the alternative contentions were directly inconsistent with the express terms of the Agreement, and entailed a re-writing of the Agreement. The formula in clause 48.1.2 was clearly expressed, and referred to 76.5, not 77 hours. There was no legitimate basis on which the Commission could re-write the Agreement such that it referred to 77 hours, thereby setting new rates of pay. In this regard, the reference to 76.5 hours in clause 48 was consistent with the sixth dot point in clause 17.1.3, which states:
“The ordinary hours per week will be a minimum of 76.5 hours per fortnight, inclusive of one hour overtime, unless agreed otherwise by the parties, or amended via the roster change process at clause 18.”
Similarly, as to the unions’ further alternative argument, the formula clearly stated that ‘an additional 0.5h’ was to be included in the base rate of pay, not an additional 35 minutes. The fact that ‘5 minutes per shift’ might suggest an outcome of 35 minutes pay was not a reason to conclude that the formula was wrong. V/Line contended that the common intention of the parties was evident from the express terms of the Agreement, namely that the rates of pay would be calculated by reference to the ordinary hours per fortnight being 76.5. This was also consistent with the fifth dot point in clause 17.1.3, which reduced shift length by 5 minutes, with those 5 minutes to be incorporated into the 36-hour week divisor as per the example in clause 48.1.2.
Finally, V/Line submitted that, to the extent that it was necessary to refer to surrounding circumstances, the evidence of Mr Weimar showed that in negotiating the Agreement the parties had turned their minds to the issue of the additional time worked and had determined that 76.5 hours was the appropriate figure. In an email of 2 December 2020, Mr Douglass, a CEPU organiser, had proposed to the employer a formula for the calculation of rates based on a figure of 77 hours. On 8 December 2020, Mr Fabiyanic replied on the behalf of the employer. His email referred to a discussion between Mr Douglass and Mr Lindsay Menzies of the employer ‘and the agreement reached’; it then set out a formula, which reflects the formula that is found in clause 48.1.2 of the Agreement.
Consideration
The principles that apply to the interpretation of an enterprise agreement are well known and need not be restated here. In suffices to say that the terms of an agreement are to be given their ordinary meaning, and that this meaning must be understood in context, and with regard to any objectively manifested intention or purpose. In my view it is axiomatic that V/Line’s obligation to pay wages to employees pursuant to clause 48 must be ascertained by taking into account all of clause 48, read in the context of the Agreement as a whole.
It is convenient briefly to revisit the content of clause 48. The wages to which employees are entitled under this clause reflect several considerations. First, wages are increased retrospectively, twice, by 2.5%, effective from 1 July 2019 and 1 July 2020. As a consequence, employees received payments of amounts representing back-payment of these increases, and their rates increased by slightly more that 5%, because of the effect of compound interest. Secondly, because the Agreement introduced a new 36-hour week (see clause 17), it was necessary to revise wages to reflect the new working arrangements, rather than the previous 38 hour week. This involved two steps. An hourly rate was derived from the new higher wage rates by dividing those rates by 38 and multiplying them by 36. An additional amount was then included in this new rate for 11-hour shift workers. This is discussed further below. According to the example in clause 48.1.2, this adjusted the 36-hour week rate by an additional half hour’s pay per fortnight (the additional amount). Thirdly, the new rates of pay for the 36-hour week would be increased over the life of the agreement by 1.75% on 1 July 2021, 1 January 2022, 1 July 2022, and 1 January 2023 (the four prospective increases).
In my opinion it is obvious that the figures appearing in the table in respect of the period from 1 July 2021 are wrong. It is clear both from the formula in clause 48.1.2 and from the table that the 36-hour week figures, effective from 14 March 2021, are to be increased by 1.75%. When one conducts this calculation, it produces figures that are slightly less than those that appear in the table. The source of the error is clear. The weekly wages as of 1 July 2021 are figures that have been produced by adding the hourly rate of the 36-hour week to the weekly wage rates effective from 1 July 2020, rather than by increasing the 36-hour week rate by 1.75%. So for example, the weekly rate for a C7 as of 1 July 2020 is $1854.70; the new 36-hour week hourly rate is $51.86. The sum of these amounts is $1906.56, which is the weekly rate appearing in the table as of 1 July 2021. This is obviously a mistake. There is no basis whatsoever to add these figures together. What should have occurred in order to set the wages for 1 July 2021 was a multiplication of the 36-hour week hourly rates by 1.75%. When one increases the 36-hour week rate by 1.75% (that is, multiplies that figure by 1.0175) in order to arrive at the 1 July 2021 wage, the figure obtained for the C7 classification is $52.7675, not $52.9600 as appears in the table. Each of the remaining three wage increases in the table (for 1 January 2022, 1 July 2022 and 1 January 2023) reflects a 1.75% increase on the figures appearing in the table for 1 July 2021, but because the figures for 1 July 2021 are wrong, the subsequent figures are also wrong. V/Line has traced the error back to a spreadsheet that a company representative sent to the unions after the formula for the new 36-hour week had been agreed. But the error is apparent on the face of clause 48.
I reject the unions’ contention that the table is clear because the numbers themselves are clear. This argument essentially contends that any number has a clear meaning that should be understood in isolation from its context. But what is relevant in the present matter is not the meaning of numerical symbols, but the wages that must be paid to employees under clause 48. There is no doubt about the meaning of ‘$1906.56’. There is also no doubt that this is not the weekly rate of pay that V/Line must pay to a C7 employee from 1 July 2021, because this number is the product of the obvious mistake referred to above.
What of the alleged errors in clause 48.1.2? The parties agree, rightly, about the starting point error. The example took as its starting point for the setting of the 36-hour week rates the 2019 salary for the C7. The hourly rate as of 30 June 2019 was $46.4560 ($1765.33 divided by 38). The adjustment was applied to this rate. The drafter has forgotten to include the two 2.5% increases. When one includes these amounts, the correct starting point is $48.8079; this then produces an adjusted rate of $51.86, as appears in the table. But the formula is perfectly clear. It is unaffected by the starting point error. The mistake is inconsequential.
As to the unions’ alternative arguments concerning the alleged errors affecting the adjustment to the rate for the 36-hour rate, I would not characterise these as extra claims, to the extent that they purport to be arguments of construction. However, I agree with V/Line that these are matters which have not been taken through the disputes procedure in clause 42.2, as they are required to be before the Commission may arbitrate the question to which they pertain. In any event, I would nevertheless have rejected the unions’ alternative contentions, for the following reasons.
The unions’ first alternative argument was that if the wages payable under clause 48 are to be determined by reference to both the table and the text that appears in clause 48.1, the Commission should read the formula and the example in a way that aligns with the employees’ working arrangement and corrects the ‘working hours error’, such that employees’ base rate of pay reflects their 77-hour fortnightly roster pattern, rather than a work pattern of 76.5 hours. I do not accept this. Unlike the calculation error, which is mathematically obvious, it is not clear that there is in fact any ‘working hours error’. A new rate of pay is being created for a 36-hour week. The formula states that 76.5 hours will be recognised for this purpose. There is no reason why all 77-hours in the cycle would need to be included, particularly in the context of wages being increased in other ways. The unions’ alternative submission invites the Commission to ignore the text of clause 48.1.2 and to substitute a different formula in order to derive the rate for the 36-hour week. It asks the Commission to insert ‘77’ in place of ‘76.5’. It is not the role of the Commission to re-write an agreement to achieve what might be regarded as a fair or just outcome; to say, for example, that the full 77 hours of the roster cycle ought reasonably to have been included in the formula. That was a matter for bargaining. Rather, the Commission’s task remains one of interpreting an agreement produced by others. The construction of an enterprise agreement, like other legal instruments, begins with a consideration of the ordinary language, read in context. The text and context of clause 48.1 clearly identify the existing rates of pay and apply a formula to increase them twice by 2.5%, and then to derive an hourly rate of pay for a 36-hour week. In the course of doing so the formula takes into account an additional half hour’s pay, reflecting ‘total fortnightly pay for 76.5 hours’. The formula in this regard is clear. Further, to accept the unions’ contention would be contrary to s 739(5) of the Act, pursuant to which, in dealing with a dispute referred to it under s 739, the Commission ‘must not make a decision that is inconsistent with … a fair work instrument’, which instruments include enterprise agreements. To read the formula as though it referred to a 77 hour week instead of 76.5 hour week would be directly inconsistent with clause 48.1.2.
The unions’ further alternative contention has more merit however I am not persuaded by it. The fourth bullet point in clause 48.1.2 states that 5 minutes per shift will be included in the base hourly rate for 11-hour shift workers from the commencement of the 36-hour week, but does not translate this statement into a payment that is included in the adjustment. Instead, an additional 30 minutes’ pay is included in the rate, rather than 35 minutes, as one might expect for employees working seven shifts a fortnight. There is conflict in clause 48.1.2 between the statement that employees’ wages will be adjusted by 5 minutes per shift, and the statement that they will receive ‘an additional 0.5hr as part of the roster cycle’. Contrary to the unions’ contention however, it is not at all clear that the reference to an adjustment of half an hour is a mistake. It could be that the reference to 5 minutes per shift was a mistake, and that what was intended was a reference instead to about five minutes. The additional payment referred to in the formula is one of half an hour. This is in line with the statement in clause 48.2.1 recoding ‘total fortnightly pay for 76.5 hours’, which is then divided by 72 in order to produce a figure for the 36-hour week. This accords with the arrangements set out in clause 17.1.3 concerning the introduction of the 36-hour week. Against this, the reference to five minutes per shift stands on its own in clause 48.1.2; reading only the first sentence of the fourth dot point in clause 48.1.2, one cannot understand what adjustment calculation is intended. It is only when one reads the example that this becomes clear. The example is integral to the workings of this element of the formula. The clause states that employees’ wages will be ‘divided as per the calculated example below’. The example then states that the employee ‘currently receives an additional 0.5hrs as part of the roster pattern’, and that this payment of half an hour’s pay is added to the fortnightly amount. In my opinion, the objective meaning of clause 48.1.2, read in the context of the Agreement as a whole, is that the adjustment to wages for 11-hour shift workers in respect of the introduction of the 36-hour week is 30 minutes of pay per fortnight.
In my view, the adjustment of 30 minutes reflects an agreement reached in bargaining about the new rates for the new 36-hour week, rather than any mathematical prescription. There is nothing surprising about this. New hours of work were being introduced. Existing wages were being increased substantially, by two lots of 2.5%. The adjustment was simply one part of a wages deal, which set new rates of pay for the new 36-hour week. This conclusion is reinforced by the evidence of Mr Weimar, who appended to his witness statement an exchange of correspondence between the company and the unions (RW1). Mr Douglas of the CEPU had proposed that the new fortnightly pay for 11-hour shift workers be based on 77 hours per fortnight. Mr Fabiyanic replied to Mr Douglas that ‘as per … the agreement reached’, the third element of the formula would include ‘the remaining 0.5h’, and that this was currently paid at $23.228. The formula set out in Mr Fabiyanic’s email to Mr Douglas was then included in clause 48.1.2. The AMWU said that it was not copied in on Mr Fabiyanic’s response. However they received the text of the final draft agreement. It can be seen then that it is far from clear that there is any ‘30 minute error’ at all. In my view, it is more likely that there is ‘5 minute per shift’ error. By contrast, the calculation error and the starting point error are obvious mistakes.
The unions contended that the adjustment of only half an hour’s pay per fortnight would result in a loss of pay for 11-hour shift workers. I do not accept this. Clause 48.1 provides for a wage increase of over 12% over the life of the Agreement. The proper construction of clause 48 does not entitle employees to the additional amounts sought by the unions. There has been no loss of pay.
The unions submitted that the Commission should censure V/Line for unilaterally deciding to cease paying the rates of pay in the table in clause 48.1.2. But this matter does not relate to the question that has been referred to the Commission for arbitration. I would however note that it is regrettable that the text of the final agreement was not properly checked before it was put to a vote. If it had been, the calculation error and the starting point error would have been fixed and the present dispute would not have arisen.
The answer to the question submitted for arbitration is (b): the rates of pay are to be ascertained by reference to the table and the text that appears in clause 48.1, read in the context of the Agreement as a whole. The rates of pay that appear in the columns up to and including the seventh column – ‘36-hour implementation 14 March 2021’ – are correct, but the rates of pay in the following columns are clearly the product of a calculation error. The wages to which employees are entitled in respect of the first of the four prospective increases are the amounts obtained by increasing the 36-hour week hourly rates by 1.75% on 1 July 2021. Wages are then increased by 1.75% with effect from the first full pay periods after 1 January 2022, 1 July 2022, and 1 January 2023.
The application under s 217
V/Line’s application under s 217 asks the Commission to vary the Agreement to remove the uncertainty or ambiguity that is produced by the presence of erroneous figures in the table of wages in clause 48.1. The proposed variation would correct the figures appearing in the table in respect of the wages applicable from 1 July 2021, 1 January 2022, 1 July 2022, and 1 January 2023. In Bianco Walling Pty Ltd v CFMMEU (2020) 275 FCR 385 (Bianco Walling), the Full Federal Court noted that a provision ‘may be ambiguous or uncertain even though, by the application of techniques of construction, its true meaning can be ascertained’ (at [97]). In my view, the table is unambiguously wrong. Nevertheless, I consider that the presence in the table of erroneous figures creates uncertainty in the Agreement because the table suggests that the wage rates payable to employees are different from what is in fact the case. Further, it is necessary to undertake a careful analysis of the clause in order to ascertain the correct amounts; an employee who refers to clause 48 without undertaking the analysis will not understand why his or her legal entitlement to wages differs from what appears in the table.
As I am satisfied that the Agreement is uncertain, my power to vary it under s 217 is enlivened. I consider that it is appropriate to exercise the discretion for the following reasons. First, I consider that the variation I propose to make will reflect the agreement that was actually reached in relation to wages to be paid to employees. Although it is not the Commission’s role under s 217 to interpret the Agreement in any definitive sense (see BiancoWalling at [66]), it is relevant to the exercise of the Commission’s discretion to consider whether the proposed variation accords with the Commission’s opinion as to what agreement was reached in bargaining about the relevant subject matter. Further, in the present case, I have separately determined the unions’ s 739 application by way of private arbitration. That determination is plainly relevant to the exercise of my discretion in the s 217 matter.
Secondly, I do not consider that this is a case where employees are likely to have been misled by the erroneous figures in the table in deciding whether to vote in favour of the Agreement. V/Line produced a copy of an explanatory document provided by the company to employees prior to the vote, in connection with its obligation under s 180(5) of the Act to take all reasonable steps to ensure that the terms of the agreement and the effect of those terms were explained to employees. That document (attachment as exhibit RW5 to the witness statement of Mr Weimar) stated that all employees would receive a total increase of 12% over the life of the agreement: two backdated increases of 2.5%, and four prospective increases of 1.75%. It also stated that the Agreement would introduce a 36-hour week from 14 March 2021. There is no reference to the ‘adjustment’, nor would one necessarily expect a relatively minor matter such as this to be addressed in an explanatory document. I would also note that the differences between the erroneous rates appearing in the table and the correct rates produced by the formula are small, ranging from around $4-8 a week. I consider it unlikely that such margins would have been significant in employees’ deliberations on whether to accept a wage increase of 12% over the life of the Agreement.
A number of decisions of the Commission have varied agreements under s 217 to remove uncertainty caused by errors in wages schedules. There is nothing unusual about this course. I emphasise that the variation to the Agreement will not reduce employees’ entitlements to wages. It will correct calculation errors in the table and remove the uncertainty that those errors create.
V/Line alternatively asked the Commission to vary the Agreement under s 218A of the Act, which, since the commencement of the relevant part of the Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022, has allowed the Commission ‘to correct or amend an obvious error, defect or irregularity (whether in substance or form)’. The variation I propose to make to the Agreement can also be made under this provision, because the relevant errors are obvious, and I consider that it is appropriate to correct them.
V/Line contended that the variation should operate from 9 March 2021. Its contention proceeded on the basis that s 217(2) confers power on the Commission to vary an enterprise agreement with retrospective effect. The unions did not dispute this. However, the matter warrants some reflection. In MacDonalds Australia Enterprise Agreement 2013 [2019] FWCA 8563 (Re Kelly (2019) 291 IR 395), I rejected a contention that s 227 confers power on the Commission to terminate an enterprise agreement with retrospective effect (see [32] to [57]). That section, similar to s 217(2), states that the termination ‘operates from the day specified in the decision to terminate the agreement’. However, the context of s 227 is different from that of s 217(2). In particular, the termination of an enterprise agreement will almost inevitably alter the substantive terms and conditions of employment. It is improbable that Parliament intended that a person could be placed retrospectively in breach of an award that might apply following the termination of an enterprise agreement.
Nevertheless, assuming retrospective power is available under s 217(2), I am not persuaded to use it in this case. A variation should go no further than is necessary to remove the relevant ambiguity or uncertainty. The dispute about what wages are payable to employees under the Agreement has been resolved by my determination of the s 739 application. Uncertainty about the past has been removed. In my view, the only uncertainty now relates to the future, insofar as employees or future employees might consult the wages table and encounter erroneous figures that do not reflect their actual entitlements. That uncertainty will be removed by varying the Agreement with prospective effect.
V/Line submitted a replacement table that contains rates of pay that accord with my determination of the dispute referred to the Commission under s 739. It is appropriate to issue an order that deletes the second half of the table that appears in clause 48.1.1 and inserts the replacement table in its place.
An order giving effect to this decision will be issued separately.
DEPUTY PRESIDENT
Appearances:
R. Wainwright for the AMWU
P. Lawler for V/Line Maintenance Pty Ltd
Hearing details:
2023
Melbourne
21 February
Printed by authority of the Commonwealth Government Printer
<Pr760128>
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