Construction, Forestry and Maritime Employees Union v MMA Offshore Vessel Operations Pty Ltd Trading as MMA Offshore
[2025] FWC 1585
•9 JUNE 2025
| [2025] FWC 1585 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s 739—Disputes dealt with by FWC
Construction, Forestry and Maritime Employees Union
v
MMA Offshore Vessel Operations Pty Ltd Trading AS MMA Offshore
(C2025/1120)
| DEPUTY PRESIDENT O’KEEFFE | PERTH, 9 JUNE 2025 |
Matters arising under the enterprise agreement and the NES (s 186(6)) - dispute over interpretation of agreement – long service leave provisions – interpretation found to be consistent with the position contended for by the CFMEU.
The Construction, Forestry and Maritime Employees Union (CFMEU) has made an application to the Fair Work Commission (FWC) under s 739 of the Fair Work Act 2009 (Cth) (the Act) for a determination of the proper meaning of clause 39.2 of the MMA Offshore Vessel Operations Pty Ltd and MUA Offshore Oil and Gas Enterprise Agreement 2023 (the Agreement). The Respondent is MMA Offshore Vessel Operations Pty Ltd t/a MMA Offshore (MMA).
The parties disagree as to the proper interpretation of clause 39.2 of the Agreement. I have conducted conciliation between them in an attempt to resolve the matter but little if any common ground could be found. As a result, the matter was programmed for hearing on 26 May 2025.
Background
The Agreement was approved by the FWC on 6 December 2023 and commenced operation on 13 December 2023. It replaced the MMA Offshore Vessel Operations Enterprise Agreement 2017 (the 2017 Agreement). It is uncontroversial between the parties that the negotiations canvassed the issue of long service leave and that the Agreement introduced new long service leave provisions. These provisions appear to be an improvement on the provisions found in the 2017 Agreement. For example, in terms of the quantum of entitlement, the 2017 Agreement provided as follows:
“36.1 A Permanent Employee who has completed at least 15 years continuous service with MMAVO shall be entitled to 13 weeks long service leave paid at the current rate of pay for the Permanent Employee’s classification and Schedule 2 of this Agreement.
36.2 Casual Employees are not entitled to any long service benefits under this provision although nothing in this clause alters any entitlements that these Employees may have under applicable laws.
36.3 For the purpose of this clause, continuous service has the meaning given to it by section 22 of the Fair Work Act.”
By way of contrast, the Agreement provides as follows:
“39.1 Employees will not receive a lesser entitlement of Long Service Leave than that which is provided in the applicable State or Territory Long Service leave legislation.
39.2 An Employee who has completed at least 10 years’ continuous service with the Employer shall be entitled to 13 weeks’ long service leave paid at their Aggregate Salary rate of pay. For every five (5) years of continuous employment with the Employer thereafter, an Employee shall be entitled to a further 6.5 weeks long service leave paid at their current Aggregate Salary. This entitlement will operate prospectively from the approval date of this Agreement.
39.3 Cadets, Trainees and ASTs are not entitled to any long service benefits under this provision although nothing in this clause alters any entitlements that these Employees may have under applicable State/Territory laws.
39.4 For the purpose of this clause, continuous service has the meaning given to it by section 22 of the Fair Work Act.”
It can be seen from the above that in the first instance casual employees are now captured by the same provisions as permanent employees. In addition, the Agreement provides for 13 weeks at 10 years’ service, rather than 13 weeks at 15 years’ service.
The crux of the argument between the parties is how the new provision operates in practice. The CFMEU’s argument is that once the Agreement was approved, the new entitlements applied immediately. To illustrate by way of example. An employee who had 10 years’ service on the day before the Agreement was approved would have been entitled to – on that day – 8.66 weeks of long service leave, albeit that this would only have been paid out at that point if the employee died or left on good terms. However, on the following day, when the Agreement was approved, the employee would immediately be entitled to 13 weeks of long service leave and would be eligible to take that leave.
MMA by contrast argues that what changes on approval of the Agreement is the rate of accrual of long service leave. In effect, prior to the Agreement being approved, eligible employees accrued leave at the rate of 0.866 weeks of leave per year – reflecting the entitlement of 13 weeks after 15 years. Once the Agreement was approved, this rate of accrual changed to 1.3 weeks per year – reflecting the entitlement of 13 weeks after 10 years. As such, there was no immediate change to an employee’s entitlement – the change would come by virtue of the employee accruing a greater amount of long service leave at their next accrual anniversary.
In terms of agreed facts, it is not contested that the Agreement was approved, replaced the 2017 Agreement and that MMA provided the explanatory document found in the court book to employees at the time of seeking their approval. The parties also agree that the relevant steps in the dispute resolution procedure in the Agreement have been followed and as such the FWC has jurisdiction to deal with the dispute.
Representation
The CFMEU was represented by Ms Sumayyah Sayed, who is an employee of the union. As such, no permission was required.
MMA sought leave to be represented. In addressing s 596(2)(a) MMA noted in its submissions that the matter concerned the proper construction of an agreement clause and as such would traverse issues of construction of clauses and of uncertainty and ambiguity. Given this, MMA argued that experienced counsel would assist the Commission. MMA also made relevant submissions with respect to ss 596(2)(b) and (c). However, as I only need to find one of the circumstances in s 596(2) to be applicable, I was persuaded that the complexity of the matter was such that the efficient conduct of the hearing would be best served by MMA being granted permission to be represented.
The question for the FWC
For the purposes of determining which construction is correct, it is clear that the FWC will need to pay particular attention to the final sentence of clause 39.2 which reads:
“This entitlement will operate prospectively from the approval date of this Agreement.”
I have explained the parties’ contentions regarding the correct interpretation above. In summary, the question for the FWC is best expressed as follows: given the wording of the Agreement and mindful of the final sentence of clause 39.2, is it the entitlement to leave which changes upon approval of the Agreement (the CFMEU position) or the rate of accrual of the leave (the MMA position).
Submissions and evidence
At the outset, I should note the position of MMA regarding the evidence of Mr George Gakis for the CFMEU, which was the only evidence before the FWC. MMA contended that Mr Gakis’ evidence should not be admitted, on the basis that it was nothing more than Mr Gakis’ subjective understanding of what was agreed between the parties. It did not rise to the level of common understanding but was rather simply Mr Gakis’ recollections of his understanding. In its written submissions MMA directed me to several cases touching on this issue. It drew upon the findings of Wheelahan J in ARTBIU v Yarra Trams, where His Honour stated:
“…(1) usually, recourse to extrinsic matters cannot displace the clear meaning of text; (2) the subjective understanding of individuals is rarely relevant to objective meaning…”[1]
MMA went on to quote the High Court’s disapproval of the admission of such material in Toll v Alphapharm where the Court stated as follows:
“A striking feature of the evidence at trial, and of the reasoning of the learned primary judge, is the attention that was given to largely irrelevant information about the subjective understanding of the individual participants in the dealings between the parties. Written statements of witnesses, no doubt prepared by lawyers, were received as evidence in chief. Those statements contained a deal of inadmissible material that was received without objection. The uncritical reception of inadmissible evidence, often in written form and prepared in advance of the hearing is to be strongly discouraged. It tends to distract attention from the real issues, give rise to pointless cross-examination and cause problems on appeal where it may be difficult to know the extent to which the inadmissible material influenced the judgment at first instance.”[2]
At the hearing this matter was addressed, and both parties were provided an opportunity to speak to the issue of whether Mr Gakis’ evidence should be admitted. MMA reiterated the position in its written submissions and noted that the reason it had not called its own witness was that such evidence as their witnesses might provide would be of the same standard as the evidence of Mr Gakis. The CFMEU submitted that it had only been advised that morning that Mr Gakis’ evidence was challenged. Notwithstanding this, it submitted that the witness statement should be admitted but given appropriate weight. Having heard from the parties I then took a short recess to review the case precedents and the material in Mr Gakis’ statements.
Having considered the nature of the evidence from Mr Gakis I formed the view that it was the case that it represented his subjective understanding of what went on and there was no suggestion that there had been a considered common position between the parties. As such, I determined that Mr Gakis’ evidence would not be admitted. Given this, the matter would be informed primarily by the submissions of the parties.
In making its written submissions, the CFMEU noted firstly the principles of interpretation summarised by a Full Bench of the FWC in AMWU v Berri Pty Ltd [2017] FWCFB 3005 (Berri). I do not intend to set those principles out in full but rather will refer to them as appropriate.
The CFMEU then addressed the use of “entitled” in the relevant clause. The CFMEU submitted that an entitlement is a benefit that a person has a right to claim. As such, the relevant clause is saying that at the point where an employee has 10 years’ service, they have an entitlement to – a right to claim - thirteen weeks of paid long service leave. The submissions then turn to the issue of operating prospectively.
The CFMEU submits that a plain reading of clause 39.2 means that the entitlement will operate from the approval date of the Agreement, as opposed to the commencement of operation of the Agreement – being seven days after the approval date. The CFMEU then draws on other provisions in the Agreement to assist in its argument. In doing so, it notes the finding in various cases[3] to the effect that context is not limited to the words surrounding the expression to be construed but may draw upon the entirety of a document.
The CFMEU drew my attention to the provisions of Schedule 1 to the Agreement. Specifically, in that schedule there is an entitlement to back pay created for employees who had worked for MMA from 1 July 2023. This entitlement was also set out in the explanatory document provided by MMA to employees[4]. The CFMEU submits that the use of “operate prospectively” in clause 39.2 was to ensure that there was no backpay on long service leave taken from 1 July 2023. When considering this argument, I have assumed that the CFMEU is suggesting that this exemption from backpay is for long service leave taken between 1 July 2023 and the date of approval. I am also mindful that the submission draws on the excluded statement of Mr Gakis and so I have given its evidential basis no weight.
The CFMEU goes on to submit that the use of “operate prospectively” was to:
“…ensure that clause 39.2, which has better long service leave provisions than its predecessor clause, has effect from an earlier date of 6 December 2023, which is 7 days earlier than the commencement date of the 2023 Agreement.”
I note again that this submission drew from the witness statement of Mr Gakis and so I have again treated it as a submission without an evidential basis.
In its written submissions, MMA proposed that the principles for construing industrial instruments are well settled and noted that they had been recently summarised by a Full Court of the Federal Court in Corporate Air Charter v AFAP [2025] FCAFC 45 at [8] – [12]. MMA provided a summary of the task for the FWC as follows:
“…to identify the meaning intended by the framers of the document by considering the language of the particular agreement, understood in the light of its industrial, commercial and legislative context and purpose. In doing so, the Commission must bear in mind that the framers were likely of a practical bent of mind: the Commission may give effect to the agreement’s evident purposes despite inconsistencies which might tend to some other reading, and reasonably strain for meanings which avoid inconvenience or injustice. That context can, of course, extend to ideas giving rise to a commonly-used industrial expression.”[5] (citations removed)
MMA submits that its interpretation should be preferred over that of the CFMEU from textual, contextual and purposive standpoints. In support of this proposition, it noted seven points to be considered:[6]
The CFMEU’s contention is that “prospectively” is to firstly give effect at an earlier date than commencement – being the date of approval - and secondly ensure no retrospective application prior to that date. However, in seeking to have the entitlement apply prior to commencement of the Agreement the CFMEU is actually seeking retrospective rather than prospective application.
The CFMEU’s purpose would be achieved by deleting “prospectively” from the final sentence of clause 39.2, meaning “prospectively” has no work to do.
The CFMEU’s construction sits awkwardly with other provisions such as changes to homeport, which operate from approval date but have no “prospectively” contained within their wording.
The CFMEU’s reliance on backpay is misplaced, as note (a) to Schedule 1 speaks of backpay on leave that is not just taken but also accrued. As such, if “prospectively” was to achieve the goal contended for by the CFMEU it would have to limit accrual to a prospective basis.
MMA’s construction neatly coheres with the natural and ordinary meaning of “prospectively” and gives the word work to do.
MMA’s construction more closely adheres to the way the Agreement treats other leave. For example, clause 31 speaks of leave being paid at the rate at which it was accrued, other than leave accrued from 1 July 2023 which will be paid as per Schedule 1. By contrast, the CFMEU position would mean increasing the value of entitlements to long service leave which were accrued long before the more beneficial provisions took effect.
The industrial context favours the MMA construction noting two issues. Firstly, the significantly more generous provision for long service leave introduced in the Agreement. Secondly:
“…long service leave entitlements, by virtue of the way that they accrue and the period over which they accrue, are by their nature retrospective. In that industrial context, one can readily understand why framers with a practical bent of mind would seek to deploy clear language to displace any retrospective application to accruals prior to the 2023 EA’s commencement. That is a far more industrially and commercially sensible construction than one which (on the CFMEU’s case) would see a ‘prospective’ term operating in a backdated way.”[7]
The CFMEU’s reply submissions were quite brief. It claimed that “prospectively” did have work to do under its interpretation, such as ensuring that the employee could actually take their long service leave entitlement from the approval date. It also noted that:
“(on) the correct application of the Agreement, there may be that a a (sic) larger financial weight is placed on the Respondent, and therefore, failing the Respondent’s ‘commercially sensible’ test. However, ‘the task of interpreting an agreement does not involve rewriting the agreement to achieve what might be regarded as a fair or just outcome for a party.”[8]
The parties also made oral submissions at hearing. The CFMEU stressed that clause 39.2 refers to an entitlement but contains nothing about the accruals of that entitlement. In its submission, “entitlement” should be distinguished from “accrual”. The CFMEU drew my attention to the provisions of clause 31, which sets out the way the Agreement deals with – amongst other things - annual, personal and compassionate leave. It noted that clause 31.1 speaks of how these particular leave types accrue and that clause 31.3 also deals with maximum accruals and the taking of the accrued leave. The CFMEU also drew a similar distinction with the 2017 Agreement, where the long service leave clause at 36.4 speaks of accruals of leave being cleared under certain conditions.
The CFMEU submitted that the long service leave entitlement should be regarded as a concept distinct from accruals and suggested that, as per clause 31, if clause 39.2 was about accruals it would have provided some methodology to deal with the accrual process yet it clearly does not. The CFMEU further distinguished the concepts with references to clause 21.3(a) and 21.1(b) where employees receive an entitlement in certain circumstances, suggesting that – in the case of 21.1(b) – that once the employee met the qualifying criteria, they receive the allowance. It suggested that this was akin to the long service leave provision whereby when an employee met the qualifying criteria, they receive the stated benefit.
In oral submissions, MMA took issue with the CFMEU’s focus on entitlement rather than accrual. It submitted that long service leave did in fact accrue and that the entitlement could not be separated from the accrual of leave based on service. MMA noted that clause 39.5 of the Agreement deals with pro-rata entitlements to long service leave and also accruals of long service leave, as does clause 39.6.
MMA – in response to my questions about the issue of accrual – did not resile from its position that the basis of the entitlement was the accrual, as reflected in clauses 39.5 and 39.6. Further, it submitted that clause 39.2 should not be read in isolation from clauses 39.5 and 39.6. MMA submitted that while clause 39.2 may not deal with accruals an argument that seeks to completely ignore the reality of accruals did not sit well with the provisions of clauses 39.5 and 39.6.
I also expressed a concern that – on MMA’s construction – an employee who had commenced with MMA prior to the Agreement and had, for example, five years of long service leave accruals at the time of approval would not, at the point they reached 10 years’ service, have 13 weeks of long service leave accrued. As such, at 10 years MMA would argue that the express provision of the Agreement should be over-ridden to – in effect – say that the employee was entitled to some amount less than 13 weeks. MMA contended that albeit that the Agreement did not seek to explain this issue in any detail, it nonetheless dealt with it by virtue of the use of “progressively” in the final sentence of clause 39.2, which it described as a “transitional mechanism” to deal with the reality – on MMA’s construction - that employees could have 10 years’ service without having accrued 13 weeks of long service leave.
MMA also expanded on their written submissions in respect of certain of the seven points as summarised in [23] above. In respect of the first and second of those points, it reiterated the need for the words in 39.2 to be given work to do. Further, it noted that the ordinary dictionary definition of “prospectively” could not be reconciled with the CFMEU interpretation which sought to have an entitlement apply – at least in part – retrospectively. MMA also noted that the word was in effect redundant in the CFMEU interpretation in that it could be removed and there would be no change to the effect of the clause as contended for by the CFMEU.
MMA also highlighted the wording of other clauses – such as 25.3(c) and 12.2(b) – that dealt with new entitlements which would apply from approval of the Agreement but did not use the word “prospectively”. Given the similarity of intention, MMA submitted that “prospectively” in clause 39.2 must be doing something else.
The MMA submissions also traversed the operation of clause 31 and particularly clause 31.3(e). That clause when applied logically results in “hybrid” accruals of leave whereby some leave that is accrued will be paid at one rate, other leave – of the same type – which is accrued will be paid at a different rate. Having established this notion of leave accruals made up of different rates, MMA submitted that it was not unusual that long service leave should also be capable of having “hybrid” accruals – in this case some leave accrued at 0.866 weeks per year and some accrued at 1.3 weeks per year.
Finally, MMA looked to the industrial and commercial context. It submitted that the new entitlement was generous, but that the substantially more generous interpretation contended for by the CFMEU could not have been sensibly priced into commercial contracts. The alternative model, being a transitional arrangement, was submitted to make more industrial and commercial sense. An outcome that delivered a substantial windfall at the outset was submitted to be inconsistent with both industrial and commercial common sense and such common sense was said to form part of the relative objective background facts.
Consideration
I think it perhaps appropriate that I begin by outlining the submissions that I have the most concerns with and explain why I have disregarded them. In the first instance, I do not accept the CFMEU argument found at [25] above that there is some major distinction to be drawn between clause 31 which speaks of accruals and clause 39.2 which speaks of entitlement. In fact, as highlighted by MMA, the concept of accrual can be found in the broader clause 39. Further, the concept of entitlement can be found in the broader clause 31 – for example see clause 31.2 (first sentence) and clause 31.3(b). Given this, I do not find anything of significance in such differences as do exist.
I am also not persuaded that there is anything to be found in comparing the provisions of the 2017 Agreement as the CFMEU submits – see [25] above. The 2017 Agreement long service leave provisions may well speak of accrual, but they also contain references to entitlement – for example see clause 36.4(a) and clause 36.5(b).
I also do not accept that prospectively has been used, as contended by the CFMEU, to provide an earlier – by one week - benefit than would otherwise be the case. Perusing the Agreement reveals a number of scenarios where a new benefit is said to apply from approval of the Agreement – for example see clause 12.2(b) and clause 25.3(c). It appears to me that the drafters have been of a mind to use “approval of the Agreement” where perhaps “the Agreement’s commencement date” would more accurately capture the actual working of the Act.
Nor am I persuaded that the intention of the word “prospectively” is designed to escape the backpay provisions provided for in Schedule 1. I think that it is clear on a reading of the Agreement that the backpay provisions related to the rate paid for time worked and leave taken in the period 1 July 2023 to approval. As such, if an employee had taken long service leave in that period, they would receive an amount equal to the difference in the rate at which they were paid, not the amount of leave to which they were entitled. The other reference in the Schedule is to accrued leave. I assess this to be a provision that addresses the rate of pay for leave provided for in clause 31. Such leave is usually paid – as per clause 31.3(e) – at the rate at which it was accrued. The only caveat to this is leave accrued from 1 July 2023 which is paid as per Schedule 1.
By contrast, there appears to be no application of this backpay provision in the Schedule to long service leave accruals because long service leave is simply paid at the employee’s “Aggregate Salary rate of pay” at the time of taking the leave. Put another way, an employee could conceivably take a lengthy period of clause 31 leave and receive payment at different rates for different portions of that leave. Long service leave would all be paid at the same rate – being the Aggregate Salary rate of pay which is defined in clause 3.1. In my view this also distinguishes long service leave from clause 31 leave in such a way as to counter the argument put by MMA in its point number six.
I should also note that I am not persuaded by MMA’s point number seven. While it is important to consider the nature of the drafters of industrial instruments, I cannot accept a proposition that persons of a practical bent of mind with different accrual rates front and centre of their thinking have drafted a clause to address this issue without mentioning “accrual” other than in later clauses that draw upon the entitlement created in clause 39.2.
If I then turn to the actual provisions of the clause, do I find an ambiguity? For the ease of reference, I will repeat clause 39.2 here:
39.2 An Employee who has completed at least 10 years’ continuous service with the Employer shall be entitled to 13 weeks’ long service leave paid at their Aggregate Salary rate of pay. For every five (5) years of continuous employment with the Employer thereafter, an Employee shall be entitled to a further 6.5 weeks long service leave paid at their current Aggregate Salary. This entitlement will operate prospectively from the approval date of this Agreement.
As I read the clause on its plain wording, it makes it clear that an employee who has completed 10 years of continuous service with the employer shall be entitled to 13 weeks’ long service leave. (I should not that for the purpose of this analysis I am assuming the rate of pay to be as stated, being the Aggregate Salary). This wording does not specify anything about accruals. It simply sets out what an employee’s entitlement is at a particular point in time. From this I think it is clear that no matter what the employer’s leave accrual records might show about what long service leave may – or may not - have been accrued at the point of ten years’ continuous service, the entitlement is to 13 weeks’ leave.
I can see no reason that an employee’s leave should not be expressed this way. It is the case that the Agreement in clause 31 expresses leave as an accrual – being in the case of permanent employees an accrual of 1.153 days of leave for each Duty Day. But that does not prevent the parties from expressing leave as an entitlement in other parts of the Agreement. Leave expressed as an entitlement is not uncommon: s 87 of the Act states that an employee is entitled to an amount of annual leave for each year of service. Section 8 of the Western Australian Long Service Leave Act 1958 (WA) (the LSL Act) speaks of entitlement to a certain amount of leave based on various levels of continuous employment.
Thus, while the employer might have its own internal processes for accruals – and no doubt the employer in this case does do so - in the case of an employee who reaches 10 years’ service, it does not seem to me that an argument could be made that the employee was not entitled to that leave because the internal system had not yet accrued the requisite number of weeks. The number of weeks is an entitlement clearly set out in the clause: the internal accrual process does not determine the entitlement. The entitlement is set by the clause. If anything, the entitlement drives the accrual process and not the other way around. MMA made the point that an entitlement is drawn from accruals which build up over time. In practice this is probably correct. However, the Agreement defines this entitlement not as a process of accruals at a certain rate – as in clause 31 – but as an absolute entitlement that is available at a point in time.
Dictionary.com defines “entitlement” as follows:
“a provision, amount, etc., to which one is entitled; a right:”
It therefore follows that an employee with ten years’ service has a right to thirteen weeks of long service leave. The question to then ask is this: are there any caveats placed upon this right other than that the employee must have ten years of continuous service. MMA says that there is a caveat, being what it describes as a “transition” provision and that this provision is found in the final sentence of clause 39.2.
As described above, MMA says that the word prospectively should be regarded as meaning that the entitlement to this much leave begins accruing from the date of approval of the Agreement. For completeness, this means that employees of MMA who were employed prior to approval of the Agreement keep their long service leave accrual as at the day before approval and then begin accruing at a new rate from the date of approval.
In my view there is an issue with this construction. The final sentence of clause 39.2 states (my emphasis):
This entitlement will operate prospectively from the approval date of this Agreement.
On my assessment, the plain meaning of this is that the entitlement - being 13 weeks’ leave - will apply to qualifying employees – being those who have ten years continuous service - prospectively from the approval date of the Agreement.
MMA is contending for a reading of the total of clause 39.2 that would produce a conclusion such as “a yearly rate of accrual of long service leave that would be consistent with providing 13 weeks of leave after 10 years will apply prospectively from the approval date of this Agreement.” The provision must consider this issue because on MMA’s construction it is clear that there would be employees who reached 10 years’ service who were not entitled to 13 weeks’ long service leave. Put another way, for those employees the clause could not simply be read on its plain words, which confer a 13-week entitlement. It seems to me that this contention is far too much of a stretch given the actual words that appear in the clause. Further – albeit subject to what is said below – it seems to me that the clause is not particularly ambiguous.
However, this does not deal with the issue of “prospectively”. MMA quite sensibly makes a point regarding the removal of this word. If it were to be removed, the clause would look like this:
39.2 An Employee who has completed at least 10 years’ continuous service with the Employer shall be entitled to 13 weeks’ long service leave paid at their Aggregate Salary rate of pay. For every five (5) years of continuous employment with the Employer thereafter, an Employee shall be entitled to a further 6.5 weeks long service leave paid at their current Aggregate Salary. This entitlement will operate from the approval date of this Agreement.
MMA submitted that if it was accepted that the actual version of the clause above confers the benefits as contended for by the CFMEU, then it needs to be asked what would change if “prospectively” is removed. The answer is almost certainly that nothing would change. This then raises the issue of “prospectively” having no work to do. MMA contends that it must have some work to do, consistent with both the principles of interpretation and the distinction drawn by it to clauses 25.3(c) and 12.2(b) (see [31] above). In the absence of work to do it may well provide a level of ambiguity that cannot be ignored.
MMA’s point is in essence that “prospectively” works to create the new rate of accrual based on 13 weeks for ten years. As I have stated above, I regard this as being too much of a stretch. However, this still does not answer the question of what “prospectively” means. I believe that looking at the surrounding clauses may give some indication of the sorts of issues the drafters of the document were trying to achieve.
Clearly, the long service leave provision in the Agreement are a significant change from the 2017 Agreement. The level of entitlement is increased. Further, under the terms of the 2017 Agreement, casuals were conferred no long service leave benefits. Such benefits as they had were provided by the LSL Act. With the transition to the Agreement, casuals began to receive their long service leave benefits from the Agreement, which appear to be superior to the provisions in the LSL Act. The LSL Act is a state act that is not exempted by s 26 of the Fair Work Act and as such provides a minimum entitlement for employees in Western Australia. Notwithstanding this, the parties have included in the Agreement at clause 39.1 the following:
“Employees will not receive a lesser entitlement of Long Service Leave than that which is provided in the applicable State or Territory Long Service leave legislation.”
It appears to me that this clause is practically redundant because the LSL Act itself would ensure the same outcome as clause 39.1. Put another way, the only real work the words have to do is to reinforce an entitlement that employees have whether the Agreement exists or not. I do not think this notion of reinforcement is uncommon in industrial instruments drafted by parties who are of practical bent of mind and who may use words that might be technically redundant to emphasize a point.
In Berri, the Full Bench noted as follows:
“There is considerable force in the Appellant’s contention that, as a general principle,
all words in an enterprise agreement must prima facie be given some meaning and effect.”[9]
From this it can be discerned that words must be given some effect. However, it need not be a profound or vitally important effect. Given this, I am comfortable that “prospectively” may have only a small amount of work to do, being to emphasize that the entitlement only applies once the Agreement is approved.
It is appropriate at this point that I engage with some of the other submissions put forward by MMA. In the first instance, MMA insists that commercial and industrial realities mitigate against the CFMEU’s interpretation. I note that this was nothing more than an assertion from the bar table about commercial and industrial realities without any evidence of what those realities might be said to be and without consideration of the particular circumstances of MMA itself. There was a suggestion that the MMA’s interpretation of clause 39.2 was generous of itself, but that the CFMEU’s interpretation somehow made the provision beyond the scope of reasonableness such that it could not be countenanced. I note that the entitlement is not unique to MMA and indeed is the standard provided for all South Australian employees under the Long Service Leave Act 1987 (SA). Put another way, I am not persuaded that the provision is such that it is completely industrially unreasonable for it to have immediate effect.
MMA also claimed that the use of “accrued” in clauses 39.5 and 39.6 ought to point me to a conclusion that accruals are essentially at the heart of the long service leave provisions in the Agreement. I cannot agree. As I read the clause in its entirety, the entitlement to long service leave is established by clause 39.2 which makes no mention of accruals. Clause 39.5(a) refers directly to clause 39.2 to derive the pro-rata entitlement on termination after seven years. While 39.5(b) speaks of accruals, it is clear that it does so only with respect to part payments in certain redundancy conditions. Clause 39.6 deals with taking leave in advance where the leave is neither accrued or due and seems to me to that it is therefore unconcerned with entitlements or accruals.
I should also note that I accept the argument from MMA about “hybrid” accruals – where the same type of leave accrues at different rates of accrual or at different values. I do not seek to say that these cannot – or indeed do not – exist. I accept that clause 31 of the Agreement creates such a scenario. However, I can find no sense of this hybrid approach in the wording of 39.2 either of itself or when considered in light of the entirety of clause 39.
Conclusion
It was conceded at hearing that there was little in the way of evidence that could assist the assessment of the clause and so I have endeavoured to focus on reading the words the parties have placed into the Agreement to determine what issues and ambiguities may be found within them to direct my analysis. In doing so, I have formed the view that the relevant words given their ordinary meaning do not lend themselves to a claim of ambiguity. While I appreciate that MMA may disagree, I find the concepts reasonably straightforward. An entitlement - a right – is established. That right is granted at a certain point in time being 10 years’ service. The provision that creates this right operated from the time the Agreement was approved such that after approval, an employee who clocks up ten years of continuous service becomes entitled to 13 weeks of long service leave.
The use of “prospectively” I assess as being to reinforce the notion that the higher entitlement only applies after the Agreement is approved. A small role for it to play but consistent with the reinforcement role played by clause 39.1.
Given these assessments, I find that the proper interpretation of clause 39.2 of the Agreement is that an employee who reaches 10 years of continuous service with MMA at a time after the approval date of the Agreement is entitled to thirteen weeks of long service leave, paid at their Aggregate Salary as defined.
DEPUTY PRESIDENT
Appearances
Ms S Sayed for the CFMEU
Mr A Pollock of counsel for MMA
Hearing Details
Perth 26 May 2025
[1] Australian Rail, Tram and Bus Industry Union v KDR Victoria Pty Ltd t/a Yarra Trams [2021] FCA 1377 at [63].
[2] Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd 2004 HCA 52 at [35].
[3] See City of Wanneroo v Australian Municipal, Administrative, Clerical and Services Union [2006] FCA 813 at [53]; and Short v FW Hercus [1993] FCA 51 at [7].
[4] See Court Book page 166 dot point one.
[5] See MMA Submissions page 11 paragraph 3.
[6] See MMA Submissions pages 4 – 5.
[7] MMA Submissions page 5 paragraph 20.
[8] CFMEU Reply Submissions page 1 paragraphs 3 – 5.
[9] AMWU v Berri Pty Ltd [2017] FWCFB 3005 at [44]
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