Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Wormald Australia Pty Ltd T/A Wormald
[2023] FWC 2482
•26 SEPTEMBER 2023
| [2023] FWC 2482 |
| 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
Wormald Australia Pty Ltd T/A Wormald
(C2023/3302)
| DEPUTY PRESIDENT DOBSON | BRISBANE, 26 SEPTEMBER 2023 |
Alleged dispute about any matters arising under the enterprise agreement and the NES;[s186(6)]
This Decision concerns an application made on 9 June 2023 by the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (Plumbers Union/ the Applicant) pursuant to s.739 of the Fair Work Act 2009 (the Act) for the Fair Work Commission (the Commission) to deal with a dispute under the dispute resolution procedure in the Wormald Rockhampton & Gladstone Sprinkler Fitters 2021-2024 Enterprise Agreement (the Agreement). The application is made by the ETU on behalf of its member, Mr Tim Meakes. The Respondent is Wormald Australia Pty Ltd T/A Wormald (the Respondent), Mr Meakes’ employer.
The agreed questions for determination are as follows:
Question 1:
“Is Wormald required under Appendix 2 Special Conditions of the Wormald Rockhampton and Gladstone Sprinkler Fitters 2021 – 2024 enterprise agreement to pay the allowance stipulated when the employee is supplied with meals and accommodation when required to live away from home for their work?”
Question 2:
“Is the amount of $100.00 mentioned in clause Appendix 2 Special Conditions of the Wormald Rockhampton and Gladstone Sprinkler Fitters 2021 – 2024 enterprise agreement to be applied such that the two elements of “meals and incidentals” are to be read as separable, or are to be read as a combined allowance?”
Question 3:
“If the Enterprise agreement is silent in respect to Question 1 or Question 2, does Clause 4 of The Agreement “Relationship to Parent Award” apply?”
Legislation
The Act provides for the Commission to deal with disputes in relation to disputes under enterprise agreement dispute settlement terms. Section 739 of the Act states:
“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) effect as 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.”
The matter was allocated to Commissioner Spencer on 9 June 2023. The Commissioner issued directions for the filing of material, on 31 July 2023. The Directions included a requirement that the parties advise whether there were contested facts and the need for a hearing. On 30 August 2023, my Chambers contacted the parties to advise that the matter had been reallocated to me and confirmed that the directions remained in place and that the parties should advise whether there were contested facts and consequently whether they agreed that the matter could be heard on the papers.
Noting that there is no dispute that the pre-requisites to the Commission’s involvement have been followed, I am satisfied that the Commission is empowered to resolve the dispute by determination of the agreed questions in accordance with the dispute settling procedures at clause 21 of the Agreement and s 739 of the Act.
On 31 August 2023, the Respondent and Applicant contacted my chambers and confirmed that the parties had agreed that there were no contested facts and that they were in agreement that the matter could be determined on the papers.
Background
Mr Meakes is employed by the Respondent as a sprinkler fitter. Mr Meakes was directed by the Respondent to perform work at the Rio Tinto Batch Fire Mine, which required him to live away from home.
While Mr Meakes lived away from home, the Respondent provided him with on-site accommodation and three meals per day. The costs associated with the provision of accommodation and meals were incurred by the Respondent.
In accordance with Appendix 2 of the Agreement, Mr Meakes made a number of claims to the Respondent for payment of a $100 daily allowance for meals and incidentals (the Allowance). The Respondent rejected Mr Meakes’ claims and has not paid the Allowance to him at any stage throughout the disputed period.
Following the Respondent’s refusal to pay the Allowance, Mr Meakes discussed the matter with his supervisor. Mr Meakes then contacted the Applicant’s State Organiser, Mr Michael Wiech, who on 24 April 2023 initiated discussions with the Respondent’s Queensland Regional General Manager, Mr Nick Peterson, in an attempt to resolve the matter.
On 16 May 2023, Mr Meakes sent an email to Mr Peterson, confirming that he had elected to provide his own meals. He was subsequently informed by Mr Peterson on 23 May 2023 that the Respondent’s position had not changed and that he would continue not to receive the Allowance.
Mr Wiech and Mr Peterson were unable to resolve the dispute. Accordingly, the Applicant made an application to the Commission in accordance with dispute resolution procedure in Clause 21 of the Agreement, seeking a determination as to whether the Respondent is required to provide the Allowance where the Respondent has supplied an employee with meals and accommodation.
The Applicant contended that Appendix 2 of the Agreement requires the Respondent to pay the Allowance to all employees living away from home, regardless of whether the Respondent provides or incurs the cost of meals for employees. The Respondent argued that the requirement to provide the Allowance is not enlivened in circumstances where the Respondent provides meals at no cost to an employee. On that basis, the Respondent maintained that it was compliant with Appendix 2 of the Agreement as it applies to Mr Meakes.
Relevant Provisions of the Agreement and the Award
Clause 4 of the Agreement states:
“4. Relationship to Parent Award
This Agreement incorporates, and is intended to be interpreted in conjunction with, the National Employment Standards (NES) contained within the Fair Work Act 2009, and the Plumbing and Fire Sprinklers Award 2020 (Award).
Where this Agreement is silent, the terms of the above documents, as amended from time to time, apply.
Where there is conflict between a term of this Agreement and a term of any other document(s) or instrument(s) mentioned in this clause, or a conflict between two or more terms of this Agreement. The higher overall wage outcome, or other overall outcome more favourable to the employee, applies.
Except where otherwise stated in this Agreement, this Agreement encompasses all terms and conditions of employment and shall operate to the exclusion of any and all other agreements and awards.”
Appendix 2 of the Agreement relevantly states:
“Living away from home
The employer will provide the worker with reasonable lodging in a well kept establishment with adequate furnishing, good bedding, good floor coverings, good lighting and heating and with hot and cold running water in a single room and pay an allowance of $100 per day to cover meals and incidentals.”
Clause 21.10 of the Plumbing and Fire Sprinklers Award 2020 (the Award) relevantly states:
“21.10 Expense-related allowances—Living away from home—distant work
(a) Qualification
An employee will be entitled to the provisions of clause 21.10 when employed on a job or construction work at such a distance from their usual place of residence that the employee cannot reasonably return to that place each night.
…
(c) Entitlement
(i)Where an employee qualifies under clause 21.10(a) the employer will either:
· provide the worker with reasonable board and lodging;
· pay an allowance of $612.43 per week of 7 days but such allowance will not be wages. In the case of broken parts of the week occurring at the beginning or the ending of the employment on a distant job the allowance will be $87.55 per day. The foregoing allowances will be increased if the employee satisfies the employer that the employee reasonably incurred a greater outlay than that prescribed; or
· in circumstances prescribed in clause 21.10(d)(v) provide construction camp accommodation and messing.
…”
Applicant’s Submissions
The Applicant’s contentions are detailed in its submissions and evidence which I don’t intend to repeat, however briefly, the Applicant submitted that Appendix 2 of the Agreement obliges the Respondent to pay the Allowance to Mr Meakes while he lives away from home, notwithstanding that the Respondent continues to provide, at its expense, three meals per day for Mr Meakes.
The Applicant stated that on previous occasions not the subject of this dispute, the Respondent paid the Allowance to Mr Meakes when he was living away from home. The Applicant therefore argued that this demonstrated “a clear and custom practice” of the Allowance being paid, meaning that Mr Meakes is similarly entitled to the Allowance in respect of the present dispute. In support of this contention, the Applicant provided records of past wages and allowances paid to Mr Meakes, which showed occasions in March and July 2023 where the Allowance had been paid.
It was further submitted by the Applicant that the “meals” and “incidentals” components of the Allowance provided by Appendix 2 are inseparable. Therefore, the Applicant submitted that it is not open to the Respondent to pay only an “incidentals” portion of the $100 allowance if it considered, for example, that it had already satisfactorily provided for meals at no cost to an employee. The Applicant argued that where an employee lives away from home, that employee’s right to the full amount of the Allowance exists absolutely and is not affected by any action taken by the Respondent. In reply submissions, the Applicant argued that the “custom and practice” was that the $100 payment had been attributed to incidentals, which it stated was a wide-ranging component relating to costs associated with any employee being away from their primary place of residence.
Finally, the Applicant submitted that the Agreement is not silent in relation to the first two questions for determination. However, should I find that the Agreement is silent in relation to those questions, the Applicant argued that Appendix 2 of the Agreement would be inconsistent with the Award, meaning that Clause 4 of the Agreement would apply, which would entitle Mr Meakes to the Allowance, as this would be more beneficial than the entitlement provided by Clause 21.10 of the Award.
Respondent’s Submissions
The Respondent’s contentions are detailed in its submissions and evidence which I don’t intend to repeat, however briefly, the Respondent agreed with the Applicant’s submissions that Mr Meakes made claims for the Allowance and that the Respondent had not paid it to him. The Respondent’s main submission was that it is not obliged to pay the Allowance to Mr Meakes, as it is an “expense related allowance”. As Mr Meakes had not incurred any expense in relation to his meals while living away from home, the Respondent argued that the Allowance was not applicable, and that by instead providing Mr Meakes with meals at its expense, the Respondent is compliant with Appendix 2 of the Agreement.
In response to the Applicant’s submission regarding the Respondent’s payment of the Allowance to Mr Meakes in March and July 2023, the Respondent stated that these payments had been made in error.
The Respondent submitted that Appendix 2 of the Agreement imposes two requirements to be met by the Respondent:
· “a standard of accommodation; and
· a payment of $100 for a purpose of covering meals and incidentals.”
The Respondent argued that the covering of meals and incidentals is “an identified purpose”[1] and that if that purpose is fulfilled other than by providing the Allowance, then the Allowance is not payable, as the requirements of Appendix 2 will have already been met. To claim the Allowance in addition to meals provided by the Respondent would be to “double dip”,[2] according to the Respondent, which was not the intention of Appendix 2.
In order to properly construe Appendix 2 of the Agreement, the Respondent submitted that consideration must be given to the states of mind of the parties throughout the bargaining for the Agreement. The Respondent referred to the fact that the Agreement’s predecessors, Wormald Rockhampton and Gladstone Sprinkler Pipe Fitting 2017-2020 Enterprise Agreement and Wormald Rockhampton and Gladstone Sprinkler Pipe Fitting 2015-2016 Enterprise Agreement, do not provide an equivalent to the Allowance. The Respondent stated that the effect of this was that the Award would apply pursuant to Clause 4 of the predecessor agreements (which states that the Award applies where the Agreement is silent).
In relation to the present Agreement, the Respondent submitted that the relevant text of Appendix 2 was inserted only for the purpose of increasing the allowance payable to employees living away from home as compared to the Award. The Respondent argued that during bargaining for the Agreement, the parties did not seek to alter the conditions for payment of any living away from home allowance. The Respondent referred to the log of claims submitted by the Applicant during the bargaining process. Item 5 of the log of claims relates to the Allowance, which states:
“5) Living away from home
Employer to provide commercial rental accommodation, in consultation with employees and must be furnished to an acceptable standard.
a) Must be professionally cleaned once a week
b) Provide linen sheets, towels, blankets, pillows etc.
c) Maximum 2 employees sharing bathroom facilities
d) Provide adequate kitchen facilities oven with cooktop, microwave, fridge/freezer of adequate size crockery, utensils, pots and pans
e) All employees to have separate permanent rooms of adequate size with lockable door
f) BBQ facilities with supplied gas
g) Laundry facilities washing machine and dryer
h) Reverse cycle air conditioning in each room
i) Internet and pay tv connections
Allowance $100 per day for meals and out of pocket expenses increasing
31/7/2021 4%
31/7/2022 4%
31/7/2023 4%”[3]
The Respondent noted that the outcome of the negotiations was that the Allowance was fixed at $100, without the 4% annual increases mentioned in the log of claims.
The Respondent submitted that the log of claims demonstrates that during bargaining, the parties had no intention to change the circumstances in which the Allowance would be paid. Therefore, the Respondent argued that, without any contrary definitions or guidance provided by predecessor agreements, the conditions and purpose for payment of the Allowance must be drawn from the Award, which states that the employer is to provide the worker with reasonable board and lodging or pay an allowance.
If the Agreement is found to be silent in respect of the first two questions for determination, the Respondent submitted that Clause 4 of the Agreement would apply, which would direct the Commission to apply the Award provisions in relation to the Allowance.
Agreed Facts
The uncontested facts are:
“Mr Tim Meeks was directed to perform work on Rio Tinto Fire Mine, that work required Mr Meeks to live away from home (LAHA) under the term of the agreement.
Whilst Mr Meeks performed his duties and lived away from home Mr Meeks was provided:
·on site accommodation.
·3 meals per day.
It is agreed that the company has not paid the living away from home allowance (LAHA) mentioned in appendix 2 of the said Agreement.”[4]
Principles Relevant to the Interpretation of an Enterprise Agreement
The principles were conveniently summarised in the Full Bench decision of Berri[5] which I will set out here for completeness:
“1. The construction of an enterprise agreement, like that of a statute or contract, begins with a consideration of the ordinary meaning of the relevant words. The resolution of a disputed construction of an agreement will turn on the language of the agreement having regard to its context and purpose. Context might appear from:
(i)the text of the agreement viewed as a whole;
(ii)the disputed provision’s place and arrangement in the agreement;
(iii)the legislative context under which the agreement was made and in which it operates.
2. The task of interpreting an agreement does not involve rewriting the agreement to achieve what might be regarded as a fair or just outcome. The task is always one of interpreting the agreement produced by parties.
3. The common intention of the parties is sought to be identified objectively, that is by reference to that which a reasonable person would understand by the language the parties have used to express their agreement, without regard to the subjective intentions or expectations of the parties.
4. The fact that the instrument being construed is an enterprise agreement made pursuant to Part 2-4 of the FW Act is itself an important contextual consideration. It may be inferred that such agreements are intended to establish binding obligations.
5. The FW Act does not speak in terms of the ‘parties’ to enterprise agreements made pursuant to Part 2-4 agreements, rather it refers to the persons and organisations who are ‘covered by’ such agreements. Relevantly s.172(2)(a) provides that an employer may make an enterprise agreement ‘with the employees who are employed at the time the agreement is made and who will be covered by the agreement’. Section 182(1) provides that an agreement is ‘made’ if the employees to be covered by the agreement ‘have been asked to approve the agreement and a majority of those employees who cast a valid vote approve the agreement’. This is so because an enterprise agreement is ‘made’ when a majority of the employees asked to approve the agreement cast a valid vote to approve the agreement.
6. Enterprise agreements are not instruments to which the Acts Interpretation Act 1901 (Cth) applies, however the modes of textual analysis developed in the general law may assist in the interpretation of enterprise agreements. An overly technical approach to interpretation should be avoided and consequently some general principles of statutory construction may have less force in the context of construing an enterprise agreement.
7. In construing an enterprise agreement it is first necessary to determine whether an agreement has a plain meaning or it is ambiguous or susceptible of more than one meaning.
8. Regard may be had to evidence of surrounding circumstances to assist in determining whether an ambiguity exists.
9. If the agreement has a plain meaning, evidence of the surrounding circumstances will not be admitted to contradict the plain language of the agreement.
10. If the language of the agreement is ambiguous or susceptible of more than one meaning then evidence of the surrounding circumstance will be admissible to aid the interpretation of the agreement.
11. The admissibility of evidence of the surrounding circumstances is limited to evidence tending to establish objective background facts which were known to both parties which inform and the subject matter of the agreement. Evidence of such objective facts is to be distinguished from evidence of the subjective intentions of the parties, such as statements and actions of the parties which are reflective of their actual intentions and expectations.
12. Evidence of objective background facts will include:
(i)evidence of prior negotiations to the extent that the negotiations tend to establish objective background facts known to all parties and the subject matter of the agreement;
(ii)notorious facts of which knowledge is to be presumed; and
(iii)evidence of matters in common contemplation and constituting a common assumption.
13. The diversity of interests involved in the negotiation and making of enterprise agreements (see point 4 above) warrants the adoption of a cautious approach to the admission and reliance upon the evidence of prior negotiations and the positions advanced during the negotiation process. Evidence as to what the employees covered by the agreement were told (either during the course of the negotiations or pursuant to s.180(5) of the FW Act) may be of more assistance than evidence of the bargaining positions taken by the employer or a bargaining representative during the negotiation of the agreement.
14. Admissible extrinsic material may be used to aid the interpretation of a provision in an enterprise agreement with a disputed meaning, but it cannot be used to disregard or rewrite the provision in order to give effect to an externally derived conception of what the parties’ intention or purpose was.
15. In the industrial context it has been accepted that, in some circumstances, subsequent conduct may be relevant to the interpretation of an industrial instrument. But such post-agreement conduct must be such as to show that there has been a meeting of minds, a consensus. Post agreement conduct which amounts to little more than the absence of a complaint or common inadvertence is insufficient to establish a common understanding.”[6]
Consideration
Ordinary meaning of the words
The interpretation of clause 4 of the Agreement is required in order to answer the relevant questions. The plain meaning of clause 4 has 4 propositions:
That the Agreement incorporates and is intended to be interpreted in conjunction with the NES and the Award;
That where the Agreement is silent, the NES and the Award will apply;
Where there is a conflict between these, (given this is not a wage issue) the overall outcome more favourable to the employee will apply; and
Except where otherwise stated in the Agreement, the Agreement essentially stands alone.
Given in this case, the issue upon which the dispute arises is stated in the Agreement at Schedule 2, the 4th proposition is superfluous. There is no dispute about the 1st proposition. In respect of the 2nd proposition, despite the Respondents submissions, it is my view that it is clear on the face of the Agreement, that the Agreement is not silent on the issue of the Allowance. On that basis the Award is displaced. That means there can be no reliance on the argument[7] that the Allowance is “Expense-related”[8] because whilst this concept is mentioned in the Award[9] it is not mentioned in the Agreement.[10] Nowhere in the Agreement does it predicate the Allowance is a reimbursement nor that it is expense related.
In the alternative, if I am wrong on that point, the 3rd proposition of clause 4 of the Award, on its plain reading says that where there is a conflict, the more beneficial term will apply. The Agreement on its plain reading provides for the payment of the Allowance with no conditions. The Agreement does not state any requirement for employees to prove that they have expended monies, there is no heading to indicate the allowance is an expense allowance, nor is there any requirement for the employee to provide receipts for reimbursement. Put simply there are no pre-conditions for payment of the Allowance other than that the employee is “Living away from home”. Further, the Agreement does not provide for the Respondent to satisfy its obligations in-kind, for example to instead provide meals.
On this basis it is my view that the Agreement has a plain meaning and the other arguments put by the Respondent must be rejected. It is necessary to note that Berri sets out that in undertaking the interpretation exercise, it is not relevant if the outcome of the interpretation exercise is not fair or just. With that in mind, I note but reject the Respondent’s submission that the clause is ‘double dipping’ as the clause is plain and open to the interpretation on its face.
In respect of the splitting of the meals and incidental components of the allowance, the words of the Agreement are again plain. They require the Respondent to pay an allowance of $100 per day to cover meals and incidentals. There is no provision to split the Allowance into two components. Further, I reject the Respondent’s submissions[11] that it can use the manner in which it’s Agreements operate, to determine an amount for such a split. This proposition has no basis.
Conclusion
For these reasons, the answer to the questions for arbitration are as follows:
Question 1
“Is Wormald required under Appendix 2 Special Conditions of the Wormald Rockhampton and Gladstone Sprinkler Fitters 2021 – 2024 enterprise agreement to pay the allowance stipulated when the employee is supplied with meals and accommodation when required to live away from home for their work?”
Yes.
Question 2
“Is the amount of $100.00 mentioned in clause Appendix 2 Special Conditions of the Wormald Rockhampton and Gladstone Sprinkler Fitters 2021 – 2024 enterprise agreement to be applied such that the two elements of “meals and incidentals” are to be read as separable, or are to be read as a combined allowance?”
It follows from my reasons and my answer to Question 1 that it is not open to the Respondent to separate the allowance.
Question 3
“If the Enterprise agreement is silent in respect to Question 1 or Question 2, does Clause 4 of The Agreement “Relationship to Parent Award” apply?”
For the reasons set out in this decision I find that the Agreement is not silent and if I am wrong on that, that the more beneficial term in the Agreement applies and on that basis Clause 4 does apply in the manner I have outlined.
DEPUTY PRESIDENT
[1] DCB p.36 [4].
[2] DCB p.37 [6].
[3] DCB pp.78-80.
[4] DCB p.27.
[5] Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union’ known as the Australian Manufacturing Workers Union (AMWU) v Berri Pty Limited[2017] FWCFB 3005 (Berri).
[6] Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union’ known as the Australian Manufacturing Workers Union (AMWU) v Berri Pty Limited[2017] FWCFB 3005, [114] (Berri).
[7] DCB p.34 [14] and DCB p.33 [9].
[8] Award cl.21.10.
[9] Ibid.
[10] Agreement, App.2.
[11] DCB pp.7 and 13.
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