Construction, Forestry, Mining and Energy Union v MSS Security Pty Ltd & MSS Strategic Medical Pty Ltd T/A MSS Security & MSS Strategic Medical

[2016] FWC 5650

[2016] FWC 5650

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.739—Dispute resolution

Construction, Forestry, Mining and Energy Union
v
MSS Security Pty Ltd & MSS Strategic Medical Pty Ltd T/A MSS Security & MSS Strategic Medical
(C2016/134)

COMMISSIONER GREGORY MELBOURNE, 27 SEPTEMBER 2016

Alleged dispute about any matters arising under the enterprise agreement and the NES;[s186(6)].

Introduction

[1] This decision deals with a dispute notified by the Construction, Forestry, Mining and Energy Union – Mining and Energy Division – Victorian District Branch (“the CFMEU”). The employees involved are engaged in providing emergency services at the Loy Yang Power Station and Mine in the Latrobe Valley in Victoria. The employer is MSS Security Pty Ltd & MSS Strategic Medical Pty Ltd T/A MSS Security & MSS Strategic Medical (“MSS”).

[2] The parties are covered by the CFMEU MSS Enterprise Agreement 2012 (“the Agreement”) 1 and the dispute concerns the meaning and intent of the wording in sub clause 14.3 of the Agreement. The application was dealt with in conference on 26 February 2016, but was unable to be resolved. The CFMEU subsequently advised that it now sought to have the matter arbitrated, and the Commission accordingly listed the matter for hearing and issued directions for filing and service of submissions and evidence. Requests were subsequently received from both parties to have the hearing date extended, however, both then advised the Commission they had now agreed to have the matter determined “on the papers”.

The Issue to be Determined.

[3] The Agreement was approved by the Commission on 7 August 2012 and commenced to operate 7 days later. Its nominal expiry date is 30 June 2016.

[4] Clause 14 of the Agreement deals with various leave entitlements and sub clause 14.3 deals particularly with long service leave. The dispute in this matter concerns the meaning and intent of the final sentence in the sub clause, which states:

“The relevant parties will pursue an approved provider for the provision of portable long service leave.” 2

[5] The CFMEU submits, in response, that this sub clause imposes an obligation on MSS to establish and pay into a portable long service leave fund. It also submits an appropriate provider has been identified, and the fund should be established and in place, with payments made on a backdated basis.

[6] However, MSS submits the relevant wording only makes reference to “pursue” rather than, for example, “establish” or “obtain,” and it has therefore complied with its obligations in terms of what the Agreement requires.

[7] Therefore, the issue for determination concerns the meaning and intent of the relevant words in sub clause 14.3.

The Submissions and Evidence

[8] The CFMEU submits sub clause 14.3 requires the introduction of a portable long service leave scheme and this is intended to be achieved by the parties reaching agreement about “an approved provider”. 3 It submits that where this cannot be agreed upon, the provider is to be determined in accordance with the dispute resolution procedure in the Agreement.

[9] It continues to submit the dispute resolution procedure in clause 24 ultimately empowers the Commission to arbitrate when a dispute remains unresolved, and this is what should now occur given the failure of the parties to reach agreement about an appropriate provider.

[10] It also submits the plain and ordinary meaning of the words in the sub clause clearly require the CFMEU and MSS to enter into discussions with a view to reaching agreement about an approved provider of portable long service leave. It submits agreement about the establishment of a portable long service leave entitlement is not at issue; the only matter to be discussed is the identification of “an approved provider”. It submits, in the alternative, that it is not open to conclude that the sub clause simply requires the parties to discuss the introduction of a portable long service leave scheme.

[11] It continues to submit that its approach is logical and consistent, and parties involved in bargaining will often reach agreement in negotiations about an “enforceable entitlement,” and then provide that the facilitative steps are to be completed during the term of the Agreement. It again submits that any other interpretation would be at odds “with the evident purpose of the Agreement namely to set enforceable conditions of employment.” 4

[12] The CFMEU continues to submit that the parties have been unable to reach agreement on an appropriate provider, and this has occurred in large part because MSS has not participated genuinely in the discussions to this end. In the absence of this agreement the CFMEU submits the approved provider should be determined through the dispute resolution procedure in the Agreement, and clause 24.1(a) is wide enough to enable the Commission to be empowered to arbitrate as part of that process.

[13] The CFMEU also submits its investigations have established that the National Employment Security Trust (“NEST”) is a provider capable of providing a portable long service leave scheme, and MSS has not raised any legitimate objections to it being the provider. It therefore submits, in conclusion, that the Commission should determine that the provider, in accordance with sub clause 14.3, is the NEST.

[14] MSS submits, in response, that there are two questions to be dealt with in dealing with the dispute. 5 Firstly, what is the meaning of “pursue” in sub clause 14.3. Secondly, has MSS met its obligations to “pursue” a provider of portable long service leave.

[15] MSS submits that since the Agreement was approved the provision of portable long service leave entitlements for employees has been discussed informally by the parties. It notes that on 24 September 2015 it received correspondence from the CFMEU about the issue, and then met with the Union on 9 November 2015 to commence negotiations for a new Agreement. It submits it intended to discuss the issue of portable long service leave in the course of these negotiations. It then received a further letter from the CFMEU about the issue on 20 November 2015, and the issue was again raised by the Union in January this year. MSS submits it then provided a formal response to that correspondence on 22 January 2016.

[16] It also acknowledges that prior to September 2015 it had made “limited efforts” to pursue a provider, and its initial enquiries indicated the majority of providers only cater for the construction industry. It also submits that until it was made aware of the existence of the NEST it was of the view there may not be a provider that would accept contributions on behalf of employees who are not working in the construction industry.

[17] It then made contact with the NEST and engaged in a process of ongoing discussion through until March of this year. However, it was ultimately not entirely satisfied with the information and the responses received from NEST, and it decided to explore other alternatives.

[18] MSS also notes that the authorities concerning the interpretation of enterprise agreements are well established, and it refers to the decisions in AMIEU v Golden Cockerel Pty Ltd (“Golden Cockerel”) 6 and Kucks v CSR Limited (“Kucks”)7 in this context. It also submits the words in sub clause 14.3 should be given their plain and ordinary meaning. It continues to refer to the Macquarie online dictionary and notes it provides twelve different definitions of “pursue”. It submits that none of these definitions make reference to a “conclusion” or an “outcome” associated with the definition of “pursue”.

[19] It continues to submit that there is therefore no basis to contend that the reference to “pursue” creates an obligation for it to “secure” or “obtain” a provider of portable long service leave.

[20] MSS also submits that in the event the Commission finds there is ambiguity in the wording of the sub clause consideration should be given to the wording and construction of other clauses in the Agreement as a means of providing guidance to what was intended in sub clause 14.3. In this context it refers, in particular, to sub clause 6.10, which deals with entitlements to redundancy, and makes clear who is to be the provider, and what are the obligations imposed upon MSS. It continues to rely on the following extract from Golden Cockerel in support of its submissions:

“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.” 8

[21] MSS submits, in conclusion, that the only reference in the wording in sub clause 14.3 “… is to “pursue” a provider, not to appoint one or provide employees with portable Long Service Leave.” 9

[22] It also submits that while the provisions in the dispute resolution clause are “wide and far reaching” they do not extend to permit the Commission to mandate a service provider which the parties must use. It accordingly opposes the Commission making any determination regarding a specific provider. In its submission the Commission should instead determine that it has complied with its obligations under the sub clause through the actions taken to date, and the application by the CFMEU should be dismissed.

Consideration

[23] As MSS has noted in its submissions the Full Bench in its decision in Golden Cockerel summarised the relevant principles to be applied in interpreting an enterprise agreement. The Full Bench did so after a detailed review of the approach followed in the construction of agreements in previous decisions of this Tribunal and other Courts. Those principles are set out at [41] of the decision in the following terms:

"1. The AI Act does not apply to the construction of an enterprise agreement made under the Act.

2. In constructing an enterprise agreement it is first necessary to determine whether an agreement has a plain meaning or contains an ambiguity.

3. Regard may be had to evidence of surrounding circumstances to assist in determining whether an ambiguity exists.

4. If the agreement has a plain meaning, evidence of the surrounding circumstances will not be admitted to contradict the plain language of the agreement.

5. If the language of the agreement is ambiguous or susceptible to more than one meaning then evidence of the surrounding circumstance will be admissible to aide the interpretation of the agreement.

6. Admissible evidence of the surrounding circumstances is evidence of the objective framework of fact and will include:

(a) 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;

(b) notorious facts of which knowledge is to be presumed;

(c) evidence of matters in common contemplation and constituting a common assumption.

7. The resolution of a disputed construction of an agreement will turn on the language of the Agreement understood having regard to its context and purpose.

8. Context might appear from:

(a) the text of the agreement viewed as a whole;

(b) the disputed provision’s place and arrangement in the agreement;

(c) the legislative context under which the agreement was made and in which it operates.

9. Where the common intention of the parties is sought to be identified, regard is not to be had to the subjective intentions or expectations of the parties. A common intention is 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.

10. 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.” 10

[24] I now turn to deal with the present application against the background of these principles.

[25] I have made reference to the respective submissions of the parties already and do not restate them in detail now. However, after considering the relevant words in sub clause 14.3 I am satisfied, firstly, that they have a plain meaning. They refer at the outset to “the relevant parties”. In this context clause 2 of the Agreement indicates the only parties to the Agreement are MSS and the Victorian district branch of the Mining and Energy Division of the CFMEU, so clearly they are “the relevant parties”.

[26] The obligation then imposed on the parties is to “pursue an approved provider for the provision of portable long service leave”. I am satisfied that these words can also be said to have a plain meaning. They make clear that the obligation imposed on the parties is to “pursue an approved provider” in regard to the provision of portable long service leave entitlements for employees. The emphasis on finding an approved provider also means it is reasonable to conclude that the parties have already reached agreement about establishing a portable long service leave entitlement. If that agreement did not exist in the first place then there would be no requirement to “pursue an approved provider”.

[27] The meaning of the words “pursue an approved provider” must then be considered. MSS refers to the twelve different definitions of the word “pursue” in the Macquarie Online Dictionary, and submits that none of these make reference to a “conclusion” or “outcome”. It accordingly submits there is no obligation imposed on it by the words in the sub clause to actually “secure” or “obtain” a provider.

[28] It is, firstly, not entirely clear that reliance on the Macquarie dictionary definitions necessarily provides support for these submissions. The first of the definitions contained in the list is stated to be, “to follow with the view of overtaking, capturing, killing, etc.; chase.” 11 This definition gives a meaning to “pursue” that combines both the chase and the intention of achieving the objective. Without taking this further other definitions in the list can be viewed in a similar way. For example, “to prosecute” or “to strive to gain; seek to attain or accomplish (an end, object, purpose, etc.)”.12

[29] These dictionary definitions suggest that the definition of “pursue” is not limited simply to the “thrill of the chase,” but is also associated with achievement of the end outcome, and the definition combines both the pursuit and the intention to achieve the desired outcome.

[30] Both parties have also made reference to the often referred to decision of Madgwick J in Kucks. The decision was also referred to with approval by the Full Bench in Golden Cockerel. His Honour stated:

“It is trite that narrow or pedantic approaches to the interpretation of an award are misplaced. The search is for the meaning intended by the framer(s) of the document, bearing in mind that such framer(s) were likely of a practical bent of mind: they may well have been more concerned with expressing an intention in ways likely to have been understood in the context of the relevant industry and industrial relations environment than with legal niceties or jargon. Thus, for example, it is justifiable to read the award to give effect to its evident purposes, having regard to such context, despite mere inconsistencies or infelicities of expression which might tend to some other reading. And meanings which avoid inconvenience or injustice may reasonably be strained for.” 13

[31] I am satisfied that the approach to construction established by Kucks is to be preferred to an approach which relies on what might be described as “hair splitting” through reliance upon dictionary definitions, (albeit that I am not necessarily satisfied that this provides MSS with much assistance anyway). I am also satisfied that when narrow and pedantic interpretations are avoided, it can reasonably be concluded that when the Agreement refers to pursuing an approved provider to provide portable long service leave entitlements the intention is to obtain a provider through that process, and not simply to be engaged in the pursuit.

[32] Therefore, I find it difficult to accept the submissions that “will pursue” only creates an obligation that falls short of necessarily ever securing or obtaining “an approved provider”. If this view is accepted it follows that MSS is only ever obliged to engage in the pursuit, with no consequent obligation to ever reach the intended destination. I am not satisfied, in response, that this is a sensible or logical conclusion to arrive at given the commitment that exists to “the provision of portable long service leave”.

[33] If any further clarification of common intention is required I have had regard to principle 9 of the principles identified by the Full Bench in Golden Cockerel. 14 I am satisfied that an objective identification of common intention would also lead to the conclusion that sub clause 14.3 is to be read as indicating that agreement has been reached about the provision of portable long service leave, and the obligation imposed on the parties is to find an approved provider as a consequence. However, this has clearly not occurred in the present matter.

[34] MSS also submits that the Commission does not have the power to mandate a service provider which the parties must use, and it should find that MSS has complied with its obligations under the sub clause through the actions taken to date. It makes this submission despite acknowledging that the scope of the dispute resolution clause in the Agreement is “wide and far reaching”.

[35] The Dispute Resolution clause in the Agreement is in clause 24. It states at the outset, “In the event of any dispute arising as to the interpretation or application of this Agreement, or any matter arising in the course of employment the following procedure will apply”. I agree with the submission that the scope of the matters that can be dealt with under that dispute resolution procedure are wide and far reaching.

[36] Sub clause 24.2 then continues to indicate under the heading “Final Step Process’’ that any unresolved dispute under the dispute resolution procedure can be dealt with by this Commission, firstly, by conciliation, but if the dispute remains unresolved, by arbitration.

[37] This extends to a dispute about who should be the approved provider of portable long service leave for the employees covered by the Agreement. The CFMEU submits NEST should be the approved provider. MSS dismisses this suggestion without providing any real explanation, other than to indicate after making contact and engaging in telephone discussions it “did not form a positive opinion of NEST”. 15

Conclusion

[38] In conclusion, I am satisfied that sub clause 14.3 does intend to impose an obligation on MSS to establish and pay into a portable long service leave fund administered by an approved provider.

[39] However, based on the submissions before the Commission at this time I am in no position to determine whether it is appropriate for NEST to be the approved provider of portable long service leave entitlements for the employees. I accordingly intended to provide seven days from the date of this decision to enable MSS to provide submissions and or evidence about whether it is appropriate for NEST to be the provider. Depending on the nature of these submissions I will then provide a similar period of time for the CFMEU to respond. I will then determine the issue if no agreement has been reached in the meantime.

[40] The parties are, of course, at liberty to seek to resolve this issue in the meantime by agreement, if they wish. The Commission is prepared to participate in that process if both parties agree that it is appropriate.

COMMISSIONER

 1   AE895899.

 2   Ibid.

 3   CFMEU Outline of Submissions dated 4 April 2016.

 4 Ibid [19].

 5   MSS Outline of Submissions dated 11 April 2016.

 6   [2014] FWCFB 7447.

 7 [1996] 66 IR 182.

 8   Above n 6, [41].

 9   Above n 5, [32].

 10   Above n 6, [41].

 11   Above n 5, [22].

 12   Ibid.

 13   Above n 7, 184.

 14   Above n 6, [41].

 15   Above n 5, [17].

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