Contract Resources Pty Ltd T/A Contract Resources

Case •

[2022] FWCA 3355

•

28 SEPTEMBER 2022
[2022] FWCA 3355

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009

s.217—Enterprise agreement; s.739—Dispute resolution

Contract Resources Pty Ltd T/A Contract Resources

(AG2022/3077), (C2022/2666)

Contract Resources Pty Ltd (Lytton Refinery) Queensland Enterprise Agreement 2021

Manufacturing and associated industries

DEPUTY PRESIDENT LAKE

BRISBANE, 28 SEPTEMBER 2022

Application to deal with a dispute under an enterprise agreement – application to vary an agreement under s.217 to remove ambiguity or uncertainty – dispute over interpretation of clause 2.6 regarding annual wage increases – Ambiguity identified - varied the Agreement to remove ambiguity.

  1. This decision concerns two applications made by the same parties over a common issue made under the Fair Work Act 2009 (Cth) (FW Act). The first is an application by the Australian Workers’ Union (AWU) for the Commission to determine a dispute between the AWU and Contract Resources (Company) under the relevant dispute resolution procedure contained in the Contract Resources Pty Ltd (Lytton Refinery) Queensland Enterprise Agreement 2021 (Agreement). The dispute is over the interpretation of clause 2.6 of the Agreement which states that the “annual increase of wages will be the greater of 2% or the December CPI”. The dispute centres around the December CPI figure being interpreted as either the quarterly CPI figure for Brisbane or the Annual CPI figure for Brisbane. The AWU contends that the clause means that it is the annual figure for CPI in the December quarter and the Company asserts that it is the quarterly figure CPI. The Company has paid a 2% pay increase following the release of the December quarter figures based on their read of the clause.

  1. The second matter to which this decision relates is an application by the Company to vary the Agreement under s.217 of the FW Act to remove ambiguity or uncertainty. The company contends that the use of the phrase “December CPI” creates ambiguity or uncertainty and that the Commission should vary the clause by inserting the word quarterly in the clause next to December CPI. Which reflects the intention properly of the Company to apply the most recent data on wage movement to the following annual increase.

  1. In the recent submission the Union have accepted that there is ambiguity or uncertainty, and the resolution should be for the Commission to find that the word annual be inserted in clause 2.6 next to December CPI.

  1. The Respondent sought to be represented at the Hearing by Mr Matthew Follett of Counsel, briefed by Mills Oakley. I am required to consider whether permission ought to be granted under s.596 of the Act. Given the nuanced arguments in an agreement interpretation matter and the effects of a variation if granted, I was satisfied that it would be of use to the Commission – and would not unduly prejudice the Applicant – to have the assistance of the Respondent’s legal representative I was also satisfied that the presence of the Respondent’s Representative would also enable the matter to be dealt with more efficiently.

  1. The AWU, being covered by the Agreement does not need to seek permission.

Relevant Clause for Agreement

“2.6     Wage Increases

In consideration of the nature and duration of this Agreement, the following wageincreases (sic) shall apply as set out in “Appendix 1”:

·     On Saturday the 1st of January 2022 – 2% Increase to hourly rate or Brisbane December 2021 CPI whichever is greater;

·     On Sunday 1st January 2023- 2% increase to hourly rate or Brisbane December 2022 CPI whichever is greater; and

·     On Monday 1st of January 2024- 2% increase to hourly rate or Brisbane December 2023 CPI whichever is greater.”

  1. I have determined to hear both matters concurrently and will consider the s.217 matter first given that by determining if there is ambiguity or uncertainty, that will resolve the matter either for one or the other party.

Is The Clause Ambiguous or Uncertain?

Terms of the Agreement

  1. The Agreement was approved by the Commission on 28 January 2022 and commenced operation on 4 February 2022. The following provision is relevant to the present dispute.

  1. Clause 2.6 of the Agreement is headed “Wage Increases” and provides for three increases over the life of the Agreement. The first wage increase was payable for employment on and from 1 January 2022 and provides as follows:

“2% Increase to hourly rate or Brisbane December 2021 CPI whichever is greater”

  1. Brisbane December CPI is not defined in the Agreement and as will become apparent, there are at least two alternative positions giving weight to the argument that the clause is ambiguous or uncertain.

  1. Section 217 of the Act states:

“Variation of an enterprise agreement to remove an ambiguity or uncertainty

(1) The FWC may vary an enterprise agreement to remove an ambiguity or
uncertainty on application by any of the following:

(a) one or more of the employers covered by the agreement;
(b) an employee covered by the agreement;
(c) an employee organisation covered by the agreement.

(2) If the FWC varies the enterprise agreement, the variation operates from the

day specified in the decision to vary the agreement.”

  1. The relevant principles are well established.[1]

  1. Given each party has put forth rival contentions utilising the principles of construction that are uncontentious and consistent with the relevant precedents of interpreting agreements, a finding that there is ambiguity or uncertainty is a logical conclusion. The plain meaning of the clause is not apparent, and the usual methods of construction do not reveal any definitive outcome. Further, making a finding of ambiguity or uncertainty is not high[2] and follows given the arguments put forth by either party regarding the dispute.

  1. The Commission is not required to interpret the actual or true meaning of the relevant clause, rather whether objectively the clause is capable of more than one meaning or if no meaning is capable then the wording is uncertain.[3]

The Union’s Submissions

  1. The Union now accepts that there is ambiguity in the expression found in clause 2.6 of the Contract Resources Pty Ltd (Lytton Refinery) Queensland Enterprise Agreement 2019 (2019 Agreement). They purport that the rest of clause 2.6 assists in determining the common intention of the parties. The evidence of the Union goes to the purpose of the CPI increase was to provide pay rises that would maintain the real value of wages in the circumstance where the CPI was above the fixed percentage increase for the next 12 months.

  1. The Union says that the commonly accepted meaning of CPI amongst the general population is of an annual expression of CPI which the population utilises in a similar way as their percentage rate in their home loan. On this basis, the Union asserts that the common intention then was that the CPI referenced in clause 2.6 of the 2019 Agreement be the annual CPI.

  1. The Union asserts that if this is the case, and in the 2021 Agreement that clause was rolled over, understanding the term to be annual CPI, then the Company cannot rewrite the Agreement. The evidence of the Company that the quarterly CPI figure was referenced in enterprise bargaining agreements does not assist the Company nor does evidence from the company on notifying affected employees of their view of the provisions in the clause 2.6 particularly, as they did not do so prior to filing the application for approval. This is viewed by the Union as a failure to comply with the Company’s obligations under s.185(5) of the FW Act.

  1. The Union further contends that at a particular time during the negotiations that the CPI clause was not included in a draft copy. The Union say this supports their view that the Company knew the clause was contrary to their interests. This contention was removed in the Union’s Reply and the contention has been dropped from the Union’s case in the Union Reply submissions at paragraph 10.

  1. The Union draws the Commission’s attention to the fact that no minutes were produced by the Company of any of the bargaining meetings and a failure to produce any minutes suggest that the Company does not have evidence to support the assertions of their witnesses.

  1. Accepting that the relevant section of clause 2.6 is ambiguous and following on from the above assertions the Union contends that regard may be had to the Agreement as a whole and other extrinsic material and that only one conclusion is possible that the common intention of the parties was that the CPI provisions were referenced on the annual CPI figure.

  1. Concluding, the Union acknowledges the ambiguity in clause 2.6 and proposes that if the Commission finds ambiguity, that the Commission varies the Agreement to remove the ambiguity on the basis that the expression should reflect ‘annual’ CPI.

The Union’s Witnesses

James Wilson

  1. Mr Wilson is an organiser with the Queensland Branch of the AWU and has had responsibility for the Lytton Refinery site since 2013. He was involved in the 2019 Agreement negotiations and the recent 2021 Agreement negotiations.

  1. Mr Wilson states that the only discussion regarding the CPI clause was when the clause was removed from a working document. He states that he believes that all the AWU bargaining representatives understood the clause to mean annual CPI as the wage increase for the following 12 months would be based upon the movement of CPI if it was greater than the fixed increase that had been agreed to in the Agreement.

  1. He also asserts that his understanding of the CPI figure is to be quoted as an annual figure and that he believes most Australians similarly understand the CPI to be an annual expression.

  1. He states that at no point did any of the company bargaining representatives explain that the Company meant quarterly CPI and he attended as far as he could recall all bargaining meetings.

James Thain

  1. Mr Thain commenced with Contract Resources in approximately 2017 in the role of scaffolder. He was not involved in the 2019 Agreement.

  1. He asserts that his understanding of the clause in the 2019 Agreement which was rolled over into the 2021 Agreement was based on an annual CPI figure. He does not recall any specific discussions with staff from the Company or the negotiators about the meaning of the clause and assumed that the CPI figure referred to the annual CPI as it was being applied to determine a fixed annual pay increase and was inserted so as to provide a safety net should inflation exceed the fixed pay increases in the Agreement.

  1. He states that he recalls a conversation with one of the negotiators that the CPI was to be based upon an annual CPI figure and at the time CPI was below the fixed increases agreed to in the 2019 Agreement. He further claims that no materials were circulated to explain the meaning of CPI.

  1. Mr Thain asserts that at a meeting separate to the regular bargaining meetings that Mr Jamie Cotton provided a document headed September CPI and explained that the clause 2.6 in the Agreement referred to quarterly CPI. Mr Thain states that he told Mr Cotton that he did not understand his explanation of CPI and disputed his interpretation that the 2019 Agreement was referencing quarterly CPI.

  1. Mr Thain states that he does not recall attending the Toolbox session on 19 November 2021 and he is not aware of any minutes from the meeting that would support the view that the CPI clause was discussed.

John Cole

  1. Mr Cole commenced with Contract Resources in February 2017 as a scaffolder and was part of the Enterprise Bargaining team for the AWU. He states that two other negotiators in that agreement introduced the clause as they had a similar clause when they worked for BP Australia previously.

  1. Mr Cole understood the clause referencing December CPI was to ensure pay rises would keep up with inflation should the annual inflation figure exceed the fixed percentage pay increase in the Agreement.

  1. Mr Cole does not recall attending the 19 November 2021 toolbox meeting and does not remember any meeting where the Company explained the meaning of the CPI clause.

Tom Purchase

  1. Mr Purchase has been employed by the Company for approximately five to seven years in the role of industrial painter. He was not a negotiator in the 2019 Agreement however assumed that the CPI figure referenced in the 2019 Agreement was linked to annual CPI because it was to apply to annual pay increases and further, all other time frames in the Agreement were annual.

  1. Mr Purchase was one of the negotiators in the 2021 Agreement and attended the 19 November toolbox session and states that there was no discussion about the CPI clause and no documents were circulated to staff at this or any other meeting.

Aaron Willmann

  1. Mr Willmann commenced employment with Contract Resources around February 2020 in the role of scaffolder. He attended the toolbox meeting on 19 November and recalls Mr Cotton displaying a PowerPoint presentation on the enterprise agreement. He does not recall any reference to the use of CPI apart from clause 2.6 being displayed and he has no recollection of Mr Cotton discussing the meaning of the CPI clause.

Joseph Olexienko

  1. Mr Olexienko commenced with Contract Resources in September 2019 as a scaffolder. He attended a toolbox meeting in November where Mr Cotton spoke about the enterprise agreement that the workforce was about to vote on.

  1. He does not believe that the quarterly figure document was displayed, nor that Mr Cotton explained the meaning of the CPI clause.

The Union’s Supplementary Statements in Reply

Supplementary Witness Statement of Tom Purchase

  1. Mr Purchase having read the witness statements of the Company now states that he recalls Mr Cotton speaking about the 1.5% pay offer but not providing any comparisons. However, he concedes that this may have happened.

  1. Mr Purchase states that he does not recall a bargaining meeting where Mr Wilson and Mr Cotton discussed the meaning of the CPI clause. Further, he does not recall attending any bargaining meeting where Mr Thain and Mr Cotton discussed the meaning of the CPI clause or where Mr Cotton provided a copy of a document titled September CPI document.

  1. Mr Purchase attended the 19 November 2021 toolbox meeting and states that the quarterly CPI document was not part of Mr Cotton’s PowerPoint presentation, and he has no recollection that the quarterly CPI document was displayed on the screen separately.

  1. He has no recollection of Mr Cotton discussing the CPI as being based upon the quarter and the issue of which CPI has never been an issue previously.

Supplementary Witness Statement of Jim Wilson

  1. Mr Wilson states that at no point at any bargaining meeting that he attended was CPI discussed.

  1. He does recall Mr Kuun discussing the need for the Company to remain competitive with Monadelphous a main competitor for the Ampol Lytton contract. He does recall that Mr Kuun circulated a spreadsheet with possible competitor pay rates and that a rise of 1.5% would enable Contract Resources to be competitive with Monadelphous. He does not recall a discussion regarding the application of CPI in clause 2.6.

  1. Mr Wilson asserts that at no point was CPI discussed and that any reference to the 1.5% was the Company asserting that the rate was due to competitive pressure.

Supplementary Witness Statement of Jamie Thain

  1. Mr Thain states that there was a discussion of 1.5% offer but that there was no discussion about the meaning of the CPI increase. Mr Thain says that he now does recall having a discussion in a one-on-one meeting with Mr Cotton.[4]

  1. Mr Thain states that during the bargaining period but not at a bargaining meeting that Mr Cotton had a one-on-one meeting with him in which he claimed that the CPI was intended to mean a quarterly CPI figure.

  1. Mr Thain confirms that he did not attend the toolbox session on 19 November 2021.

  1. Mr Thain disputes the paragraphs 33 to 35 of Mr Cotton’s statement. He states he was puzzled by the quarterly CPI view of the clause and disagreed on that view. He does not dispute that the document had reference to quarterly CPI.

  1. Mr Thain maintains that he does not recall having a CPI discussion with Mr Kuun and Mr Cotton about the application of CPI.[5]

The Company’s Submissions

  1. The Company asserts that the evidence of the negotiations demonstrates that the mutual intention in an objective sense was that clause 2.6 would act to enable wage increases annually and if the fixed percentage was below the prevailing quarterly CPI inflation rate that the Brisbane CPI inflation rate as produced by the Queensland Government Statistician’s Office (QGSO) then the quarterly December CPI rate would be applied as an annual increase in January of the following year.

  1. The negotiation of the new Agreement occurred at a time where the Company was also negotiating its service contract with the refinery and reflects a mutual intention of the parties to remain competitive relative to competitors and retain the business with Ampol, the owner of the refinery.

  1. The Company asserts that there is no evidence of any common understanding of the similar clause that can be drawn from the 2019 Agreement. That the subjective understanding of the witnesses does not go to the question of a common understanding and further, there is no evidence for the assertion of the wider Australian public’s understanding of CPI. Thus, the Union’s assertions that the meaning of clause 2.6 had meaning and was understood and the Company did not make efforts to change the understanding in the 2021 Agreement fails.

  1. The Company asserts that they explained the meaning of the clause to the Union negotiators, other bargaining representatives, and employees prior to the vote being taken. No contrary views to that being asserted by the Company were posited.

  1. The Company contends that the Union’s contention that CPI being primarily expressed as annual CPI and commonly understood as such has no evidentiary basis and is not consistent with how the data is presented by the relevant agency.

  1. The Company asserts that the quarterly CPI is the most sensitive measure for cost-of-living pressure as it samples the most recent quarter prior to an annual increase and thus is the most recent and accurate measure of cost of living available.

The Company’s Witnesses

Jamie Cotton

  1. Mr Cotton is the Site Manager for Contract Resources at the Lytton Refinery and commenced on site in 2019 having had previously been employed by Contract Resources at other locations. He has approximately 17 years’ experience in the oil and gas industry.

  1. His role covers day to day operations, managing employees and contractors, and client relationships. Contract Resources provides general and specialised maintenance services on several sites nationally and internationally. The contract at Lytton refinery has a broader scope than most of the work the Company contracts to perform.

  1. Mr Cotton was involved in the 2019 Agreement negotiations and does not specifically recall any discussions regarding the CPI and whether the quarterly or annual figure would be applicable. He confirms that there were no discussions or questions regarding the application of clause 2.6 leading up to the vote from any employee or Union representative.

  1. In the 2021 enterprise agreement negotiations, Mr Cotton had a lead role for the organisation as the Site Manager along with Mr Kuun. He confirmed that Mr Wilson and Mr Cole were involved in the bargaining, representing the AWU members and Mr Thain was an employee representative who took a lead role.

  1. Mr Cotton stated that the Union Log of Claims was provided on 21 September 2021 and was for 3% year 1, 2.5% year 2, and 2.5% year 3.

  1. Mr Cotton recalls a meeting occurring late October or early November at the on-site office with Mr Kuun, Mr Thain, Mr Wilson, and other employee representatives. This meeting was to discuss the company offer of 1.5% for 2022 following the AWU’s position of 3% for the first year. Mr Cotton explained to the meeting that the rationale for the 1.5% offer was based upon the September quarterly CPI figure being 1.3% and that the offer of 1.5% was above the CPI and comparable with market conditions.

  1. In response to a question from Mr Thain regarding the application of the CPI matter, Mr Cotton presented Mr Thain with a copy of the CPI September Quarter data from the QGSO. Mr Cotton states that he explained the differences between the quarterly result of 1.3% and the annual result of 3.9%. Mr Kuun, Mr Cole, and Mr Wilson were present during this interaction.

  1. Following on from this explanation, Mr Cotton recalls that Mr Wilson concurred with the explanation and that the figure of 1.3% was the quarterly figure. The discussions were constructive and genuine and Mr Cotton attests that there were no questions regarding whether the Annual CPI rate of 3.9% should apply. Note that in negotiations that followed the final position reached by the parties on the minimum annual increase were 2%, 2%, and 2%.

  1. On 19 November 2021, meetings were convened to discuss the proposed 2021 Agreement. Approximately 80% of all eligible employees attended either of the two sessions. Mr Thain did not attend, and instead another employee representative assisted in the presentation. Mr Cotton presented a copy of the 2021 Agreement proposal and the key changes from the 2019 Agreement were highlighted during the walkthrough presentation. Mr Cotton presented clause 2.6 and the dates for the wage increases that would be effective. Further, he displayed a copy of the September CPI quarter sheet on the screen to support the reasons for a 2% in the first increase drawing the employee’s attention to the fact that quarterly CPI was 1.3% and the offer was for 2% in the first year.

  1. Mr Cotton states that he explained that if the Agreement was voted up then the December quarter CPI increase would apply if it was greater than the 2%. However, the December quarter data was not yet available but would be released in January and it was predicted to be around 1.3% to 1.5% and if that were the case, then the 2% would be applied. Further, Mr Cotton stated that he would circulate the December CPI data once released to the bargaining representatives and would then determine whether to apply the December quarter or the fixed 2% increase from January 2022.

  1. During the presentation he received no questions regarding the application of the December quarter or fixed increase and specifically recalls making eye contact with one of the employee representatives and there were no challenges or questions on the CPI application.

  1. In late January 2022, Mr Cotton provided a copy of the December Quarter CPI data and explained to Mr Thain that the 2% agreement increase was more than the December Quarter CPI which was 1.6% and thus the 2% figure would be used for the annual increase. Mr Cotton attests that there was no pushback from Mr Thain during this conversation.

  1. Mr Cotton had another discussion with Mr Thain on 23 February 2022 where Mr Thain questioned why the December quarterly CPI figure was being utilised and not the annual CPI figure. Mr Cotton replied that the quarterly CPI figure was always the reference point and said that they had discussed this previously during negotiations when Mr Cotton had presented Mr Thain with the September CPI data as an example. Following this discussion, Mr Cotton discussed the matter with the other company representative on the bargaining team, Mr Kuun. Mr Kuun had the same recollection that there had been a conversation regarding the CPI in the bargaining group and the September Quarter Data sheet had been utilised to illustrate how the CPI was obtained and how it fitted with the proposed wage increase of 1.5%.

  1. Mr Cotton understands that the quarterly CPI may be higher than the annual CPI and can also be less than annual CPI and that the quarterly CPI is the most recent data point to the January increases and thus if there are any unexpected increases in the CPI just prior to the annual increase that it will be best adjusted for via the quarterly CPI.

Extract from the September Data sheet

Extract from December Data sheet

CAPITAL CITY DECEMBER QTR 2021 September qtr 2021
Quarterly Annual Quarterly Annual
Brisbane 1.6 4.3 1.3 3.9
Sydney 1.2 3.1 0.7 2.9
Melbourne 1.1 2.5 0.8 2.9
Adelaide 1.5 3.3 0.7 2.5
Perth 1.4 5.7 0.8 3.2
Hobart 2.2 4.5 0.3 3.0
Darwin 0.8 6.0 1.5 5.9
Canberra 1.0 4.0 1.3 3.7
Australia 1.3 3.5 0.8 3.0

Peter Kuun

  1. Mr Kuun is the South East Regional manager for Contract Resources Pty Ltd and entered this position in January 2021 and had previously held other positions with the company. Mr Kuun attests that he was not involved in previous negotiations for an enterprise agreement. However, he was for the 2021 Agreement.

  1. Mr Kuun states that discussions regarding wage increases were focused upon the fixed percentage and not about CPI. However, there was a meeting that he attended along with Mr Cotton, Mr Wilson, Mr Thain, Mr Cole, and some other employee representatives. At this meeting, Mr Thain stated that he did not understand what was intended by the reference to CPI in clause 2.6 of the Agreement. Mr Kuun asserts that Mr Cotton then showed Mr Thain a copy of the September CPI quarter data sheet and explained that the first year’s percentage increase that was proposed as 1.5% was based upon the quarterly inflation rate in the sheet (1.3%). During this explanation, Mr Wilson, Mr Cole nor any other AWU representative questioned Mr Cotton’s explanation. The meeting was not hostile and Mr Kuun states that there was no mention of annual CPI being applied for the purposes of clause 2.6.

  1. Mr Kuun was not present at the 19 November 2021 toolbox meeting and in discussions with Mr Cotton after the meetings he recalls there was no mention that the CPI or wage increases were contentious.

  1. Mr Kuun confirms that he did have a conversation with Mr Cotton following Mr Thain’s assertion in February that the annual CPI figure should have been used to calculate the salary increases.

  1. Mr Kuun states that during the tender process, in discussions with the client Ampol, that the Company indicated that the wage increases would be 1.5% to 2% based upon the Brisbane quarter CPI in September of 1.3%. He attests that Ampol indicated they would not be competitive if the Log of Claims figure of 3% was in the Agreement.

The Company’s Supplementary Statements in Reply

Cotton’s Supplementary Statement in Reply

  1. Mr Cotton denies that he had any one-on-one meetings with Mr Thain as alleged by Mr Thain.[6] Mr Cotton restates that he presented the September CPI data sheet during a bargaining meeting and further, he provided a copy of the December CPI data sheet in January 2022 and after the 2021 Agreement had been approved to Mr Thain.

  1. Mr Cotton does not recall any one-on-one discussion with Mr Beau Nicholson regarding the CPI clause and its application. Rather, he discussed a classification contained within the Agreement with Mr Nicholson.

  1. Mr Cotton specifically rejects Mr Wilson’s assertion that there was no discussion regarding CPI apart from when the clause was not in a draft and that there was an understanding among the AWU representatives that it was the annual CPI that was to be utilised in clause 2.6.[7] Mr Cotton can specifically recall the meeting where the CPI was discussed, and he confirms that Mr Wilson was seated to his immediate right.

Cross-Examination

Purchase

  1. Mr Purchase was a bargaining representative and had been employed for over 5 years. He states he did not participate in the 2019 Enterprise bargaining as a representative. He was unable to recall much about the bargaining process, there was a lack of detail on the process, and he was unable to state how many meetings nor the composition of the team during the meetings apart from stating there were six to eight participants. He recalled he may have missed some meetings but was not sure which ones or how many he missed in total.

  1. He confirmed that at the November monthly toolbox meetings there was mention of the 2021 Enterprise Agreement. Under cross-examination, Mr Purchase recalled that the attendees were divided into two groups, due to the COVID limitations on meeting numbers. The draft EA was presented with changes highlighted in yellow and they were taken through the Agreement page by page. There was an opportunity to ask questions and he recalled that Mr Cotton presented the material.

  1. There were many changes to the old agreement and Mr Purchase could not recall all of them. Mr Purchase could not recall what the previous wage increases were and whether CPI was higher or lower.

Cole

  1. Mr Cole made a statement but did not appear at the hearing. The Respondent made several objections to his statement. I have taken the statement and the objections into consideration and determine that the statement of Mr Cole does not assist in determining this matter.

Olexienko

  1. Mr Olexienko gave oral evidence that he had been employed since September 2019. He attested to the fact that toolbox meetings were held monthly, the second Tuesday of every month. There are also Pre-Start meetings which are held daily prior to the commencement of work.

  1. Mr Olexienko stated that, “we never had anything about the EBA brought up in our pre-starts, no, just in our toolboxes.”

  1. He attested to the meeting in November where the draft Agreement was put on a screen and explained to the audience and allowed for a questions and answers. He confirmed that Mr Cotton presented the Agreement. He could not recall how many clauses were highlighted.

Willman

  1. Mr Willman attested to attending a toolbox session in November 2021 where Mr Cotton presented the draft Agreement via a PC and screen and that changes from the previous agreement were highlighted. He could not recall how many changes were discussed or highlighted and that he would have a recollection of some but not all the changes discussed.

Wilson

  1. Mr Wilson affirmed that he attended all of the bargaining meetings as far as he could recall though he may have missed one. He accepted that he could not recall all of the content of the meetings. He does recall discussions regarding the company offer of 1.5% for the first year of the Agreement and also a mention of a spreadsheet of competitors and reference to possible pay rises for the competitors.

“PN324 …Do you place that meeting of that discussion in the same meeting that Mr Cotton refers to in his witness statement in November 2021, where he refers to a discussion about CPI and the reference to the quarterly sheet? Yes. So, my only recollection of the discussion of the 1.5 per cent pay offer and the justification for it was in that meeting as a result of, you know, remaining in the same band as the – yes, the perceived competitors.

PN325
So you only recall one meeting, and that was the one with the competitors and the spreadsheet? Yes, that’s right, yes.

PN326
Do you agree with me that that discussion about competitors and the display of the spreadsheet was towards the end of bargaining, would have been slightly before 19 November? Yes, I would imagine so, yes

…

PN335
It’s possible, isn’t it, that what Mr Cotton says about the existence of a bargaining meeting where the one point – do you remember 1.3 per cent being raised? I don’t remember 1.3 per cent being raised, no.

PN336
Is it possible that it occurred and you just don’t remember it? Look, it is possible. When you’re bargaining – you know, when you’re a union organiser doing enterprise bargaining negotiations there’s a lot of discussions as you put forward – you know, I don’t need to explain the full process, I’m sure, but you know, you put through claims, and there’s some claims that your members are more passionate about or more interested in than others, and the one thing that members are always interested in, almost always above else, is how much money they’re going to get.”

  1. On the actual increase, Mr Wilson states the in the following exchange:

“PN343
You were asking for 3, 2.5 and 2.5? (percent) That was from the previous agreement. That’s what we had in that, yes.

PN344
It follows, I think from some of your answers, Mr Wilson, that your evidence is you either didn’t know, or you don’t now recall whether you knew, what the annual CPI figure was in September? No.

PN345
No. Do you remember Mr Thain asking where the company had got the 1.3 per cent figure from? No, I don’t, no.

PN346
Do you remember Mr Cotton showing a printed copy of the September quarterly sheet from the Queensland statistician’s office? I don’t, no.

PN347
When you say you don’t remember, it means it might have happened but you don’t remember? I think it’s very unlikely that it did. I mean, anything’s possible and so - - -

PN348
But you’re not ruling it out? No.”

  1. Mr Wilson states at PN349:

“PN349
And - - -?  ‑But certainly in any bargaining meeting I attended, no one was presented with a quarterly - or a document about CPI.

All right, and do you recall reading that Mr Cotton attributed a statement from you - - -?  ‑I do, yes.

Where he said that you said to Mr Thain that you agreed?  ‑Yes.

That’s what occurred, isn’t it?  ‑Do I recall that - - -

Yes?  ‑In reading it? Yes, I do. Yes, that – it never happened.

It never happened?  ‑No, it definitely didn’t happen. I would think that would be reflected in the minutes, had it happened, as well, but I don’t believe it is.”

Thain

  1. Mr Thain could not recall the conversation with Mr Cotton regarding what the wage increases would be included in the Log of Claims.

  1. In cross-examination, Mr Follet asked:

“PN502
And you have a specific recollection of him explaining to you that the company’s position was that the CPI amount was quarterly? No, I don’t. We spoke about how we got the percentage offer to our enterprise bargaining agreement and the percentage that they offered to come back with. I said, ‘Where did you get that figure from?’ and that’s when we had that conversation when he gave me the sheet.

PN503
Yes, and he said to you, ‘Here’s the sheet and it records quarterly CPI in September as 1.3’? Yes.

PN504
‘And that’s where we’ve got the 1.5 per cent’? Correct.

PN505
So, he was articulating that the company’s position was that the CPI meant a quarterly figure? Not to my recollection because why would he show me a September quarter when it’s not even stipulated in the agreement? It’s of no relevance; hence why I didn’t look at it. I asked the question of where he got the 1.5 per cent offer from, he handed me the September CPI sheet, explained that September quarter CPI was 1.3, ‘That’s where we got our offer from.

….

PN538
Do I take that to mean that he did produce the September quarterly CPI document in that meeting after you say he’d already separately given it to you and explained that the 1.4 per cent was derived from the September quarterly 1.3 per cent CPI increase? Yes.

PN539
So that did happen in the room with the other bargaining representatives from the AWU there? As far as I’m aware, yes, but it wasn’t given to me, it was given to other members of the table.

PN540
Who was it given to? Mr Wilson? I couldn’t tell you off the top of my head. It was just put on the table and whoever wanted to have a look at it, but we were all within a basic understanding of where it came from due to my previous meeting with Jamie.”

  1. Mr Follett, continuing his cross-examination, asks based upon Mr Cotton’s statement:

“PN618          
He says in late January, after that sheet came out, he gave it to you and told you that because the quarterly CPI was 1.6 per cent, that they would be implementing a 2 per cent pay increase? No, that wasn’t spoken about to me. To my recollection, that was spoken to with Beau Nicholson. He received a sheet, not myself.

PN619

In any case, you then approached Mr Cotton in or around February, late February, because you were aware the company had paid 2 per cent and you were of the view that they should have been paying 4.3 per cent? Correct.

PN620

4.3 per cent being the December 2021 annual CPI increase? Correct, as worded in the EBA.

PN621
THE DEPUTY PRESIDENT: That’s why we’re here.

PN622
MR FOLLETT: If only it was that simple, Mr Thain? I thought it was pretty straightforward.

PN623
Would you agree with me that 23 February was the first time you had ever raised with anyone at Contract Resources that you thought the CPI wording was an annual increase measured in December? The first time I spoke to anybody about it or spoke to Jamie about it?

PN624
Anybody at Contract Resources about it, a management representative, as it were? Yes, that was the first - Jamie was the first one I brought it up with, yes. (Emphasis added)

PN625
Would you agree with me that that was the first time anyone from the AWU had raised it in your presence with Contract Resources? I was the one who brought it up, I was the AWU representative, or did someone else from the AWU?

PN626
Did any other AWU representative bring it up in your presence? Not in front of me that I recollect, no.

PN627
Do you remember on that day that Mr Cotton said to you that it was always a quarterly figure? I do remember him trying to explain it, yes.

PN628
Do you remember he said to you words to the effect, ‘We talked about this. I remember explaining this to you when I showed you the CPI increase for the September quarter’? Yes, I do remember that.

PN629
And he said, ‘And I pointed out the sheet where the increase was based on each quarter and you agreed with that’? I agreed - - -

PN630
Do you remember him saying that? I remember him saying - yes, I do remember him saying that, yes.

PN631
Your response was words to the effect, ‘It’s not about morals, it’s about what is in writing’? That’s Jamie’s recollection of how it went down, yes.

PN632
Well, that’s what you said, isn’t it? At one stage of the conversation, but that’s not all I said, no.

PN633
But you’re not disputing you said that at one point in time? A hundred per cent I said it.

PN634
What you meant by, ‘It’s what’s in writing’ was you thought, as you’ve just expressed before, you thought the writing was pretty clear that CPI in December for Brisbane is an annual CPI figure; correct? Correct, yes.

PN635
What you meant about the morals bit was the reference to you changing your position from agreeing with him that it would be a quarterly CPI figure to now saying it’s an annual CPI figure because that was more opportunistic and beneficial to your members; correct? No, not correct.

You knew that by changing your position, you were being immoral and that’s why you said, ‘It’s not about morals, it’s about what’s in writing.’ Correct? No, I don’t - I couldn’t quite explain or understand why Jamie would have used that ‘morals’ because he approached it with me about morals. He said, ‘Well, you have to look at your morals’ and that was what pointed the response of, ‘It’s not about morals, it’s about what’s in black in white.’ So, I wasn’t quite sure what Jamie was referring to by ‘morals’. He didn’t quite explain himself.”

Consideration

Was there ambiguity or uncertainty?

  1. Ambiguity in a word or phrase asks for a choice to be made between alternative meanings. However, it does not provide a basis for that choice.

  1. A variation to remove an ambiguity or uncertainty should have regard to the mutual intention of the parties at the time the agreement was made[8] or in other words, the “substantive agreement that was ambiguously or uncertainly reduced to writing”.[9] Whilst this may not be the only relevant consideration to the exercise of the discretion (both as to whether to vary and if so, how), having ascertained that mutual intention, “it would be unusual for other considerations to weigh in favour of a variation that was inconsistent with the intention of the parties”[10]

  1. The principles that apply to the Commission’s consideration of such applications can be found in Bianco Walling,[11] United Voice,[12] and Bradnam’s.[13]

  1. The presence of ambiguity or uncertainty is a jurisdictional prerequisite to the exercise of the discretion to vary an enterprise agreement under s.217. The Commission must make a positive finding as to whether the relevant provisions of the agreement are ambiguous or uncertain. The consideration of this question involves an objective assessment of the words in question, considered in their context. The task of the Commission is not to interpret the enterprise agreement,[14] and it is important that the Commission bear in mind the distinction between ambiguity and uncertainty.[15]

  1. Taking into account all of the circumstances and adopting a broad approach to the question of whether there is ambiguity or uncertainty, which in my view is consistent with the authorities, I find that the words “December CPI” at clause 2.6 of the Agreement are genuinely ambiguous.

Intention of the parties

  1. The Company gave evidence that reinforced the common intention for a year one increase as being one that would address CPI of 1.3% and the competitive pressure of around 2%. The evidence is that Mr Cotton presented the increase proposed and the mechanism of using the most recent quarterly CPI firstly at a bargaining meeting, and then at a toolbox meeting, and thirdly directly to Mr Thain when confirming the December Quarter with him. The Company at no point indicated that they would pay or that they had intended to pay the annual CPI increase.

  1. At the meeting of the bargaining committee just prior to 4 November, The Company representatives Mr Cotton and Mr Kuun gave similar accounts about presenting the September CPI figure as an example of how the CPI clause would operate and answer questions from Mr Thain. Mr Cotton providing the reasons for the company offer of 1.5% and pointing out the September quarter CPI as being 1.3%. The events of this meeting, as put forth by the Company, was also corroborated later when Mr Kuun and Mr Cotton discussed the events of the meeting following Mr Thain’s assertion in February 2022 that it was to be based upon an annual CPI figure and the Company representatives had similar pellucid recollections that at the meeting in late October that quarterly CPI was the figure being utilised.

  1. The evidence of the Union regarding this meeting lacks credibility, at first there is a denial that the CPI data sheet was ever produced, Mr Wilson was clear in that he had never seen the data sheet before 2022 he says ‘At no point during bargaining, did any of the company representatives explain that they intended to mean a quarterly figure. As far as I can recall, I attended all bargaining meetings with the company’.[16]

  1. However, Mr Thain admitted in cross-examination at PN538:

“PN538
Do I take that to mean that he did produce the September quarterly CPI document in that meeting after you say he’d already separately given it to you and explained that the 1.4 per cent was derived from the September quarterly 1.3 per cent CPI increase? Yes.

PN539
So that did happen in the room with the other bargaining representatives from the AWU there? As far as I’m aware, yes, but it wasn’t given to me, it was given to other members of the table.

PN540
Who was it given to? Mr Wilson? I couldn’t tell you off the top of my head. It was just put on the table and whoever wanted to have a look at it, but we were all within a basic understanding of where it came from due to my previous meeting with Jamie.

PN541
But certainly, in that meeting, everyone was on the same page, that the company’s assertion as to where the 1.5 per cent came from was the CPI quarterly figure of 1.3 per cent? I won’t speak on anyone else’s behalf, but I understood where they got the figure from.”

  1. On balance, I prefer the Company’s evidence that there was a meeting in late October, early November, and the September CPI data sheet was presented and discussed and that it was the quarterly September CPI that was used as the basis for explaining the operation of Clause 2.6.

  1. The intention of using the quarterly CPI was further validated upon triangulating between; what the company wanted to achieve which was a renewed contract with Ampol, the competitive pressures of a number in the first year around 2%, and the Union proposal for a 3% increase in the first year. I cannot accept that in these circumstances, the Union are proposing 3% and the annual CPI is 3.9% that no one, not even the Union, raised the prospect that the increase, had annual CPI been the intention, may be well above the range being discussed of 1.5% to 3%. The final outcome is a rational one only when considering that the Company’s narrative is the correct one. There was no intention by the Company to pay a figure that may be close to 4% if the competitive data and to retain the contract sits around 2%. The Union did not express any intention that the annual CPI be used in negotiations prior to the Agreement approval.

  1. The evidence advanced by the Company regarding the toolbox sessions in November 2021 and the process by which the draft Agreement was presented and a question-and-answer session held is sound, the key witnesses from the Union – Mr Wilson and Mr Thain – were not present and the three other Union witnesses do not contribute a reliable account of what was explained, to a great extent they validate Mr Cotton’s evidence. Each of the Union’s witnesses that did attend state in their reply that they do not recollect seeing the quarterly figures, they do not say with certainty that the figures were not presented, in this matter Mr Cotton’s evidence of what occurred and what was presented provides a credible account that on balance I favour.

  1. Mr Thain was provided the December sheet by Mr Cotton in late January and the quarterly figure is 1.6% and next to that is the annual CPI of 4.3%. Mr Cotton states to Mr Thain that as the quarterly figure is lower than the 2% figure agreed upon then the Company would apply the higher figure of 2%. There was no complaint by Mr Thain that the Annual CPI was higher than the 2% and that the annual CPI should be applied. The Company contends that that occurred because at that stage there was still a common intention that the figure used for the purposes of 2.6 was the quarterly CPI figure. This would seem to be the logical and most persuasive view.

  1. The evidence regarding the bargaining negotiations and the communication to the employees supports the view in an objective manner that there was a mutual intention of the parties to provide a wage increase that would deal with CPI increases via a quarterly sample of the most recent, to the proposed annual increase, that is the Brisbane December Quarter CPI if it would be higher than the fixed increase that had been agreed to. I now consider whether to vary the Agreement.

  1. I am satisfied that there is ambiguity however I must ensure that I do not propose a substantive alteration to the Agreement as Deputy President Colman considered in [2022] FWC 244 at [46]:

“In a decision I issued in 2019, Re Australian Workers Union[2019] FWCA 4371, I noted that s 217 vests in the Commission a discretion to remove ambiguity or uncertainty, not to make substantive alterations to the terms of the agreement. Applications that seek the latter should be made under s 210 of the Act. At [4], I stated: ‘A decision of the Commission under s 217 to remove uncertainty or ambiguity should give effect to the substantive agreement that was ambiguously or uncertainly reduced to writing in the terms of the enterprise agreement.’”[17]

  1. In considering this, my view is that the Company’s application does not seek substantive change as referred to above and that indeed it seeks to clarify and give effect to what was put down in writing however through the rendering into a document clarity was lost.

  1. Noting also in the same decision, Deputy President Coleman stated:

“Part 2-4 of the FW Act does not recognise parties to enterprise agreements. In this respect, it differs from the position that obtained under the Workplace Relations Act 1996. Decisions of the Commission that refer to the ‘parties’ to enterprise agreements do so in a shorthand, non-technical manner, usually referring to those persons and entities that negotiated the agreement. Under the FW Act, an agreement is made when it is approved by employee vote (s 182). To the extent that arguments are advanced about ‘common intention’ as to the operation of particular provisions, they should in my view have regard to the employees who were employed at the time of the vote. In this connection, it is relevant to take account of what if anything was said to employees about the relevant provisions at the time when the employer explained the proposed agreement to employees in accordance with s 180(5) of the FW Act (see Energy Australia Yallourn Pty Ltd v CFMEU[2017] FWCFB 3574 at [76]).”[18]

(Emphasis added)

  1. The Company gave evidence, of which I am persuaded, that in two presentations on 19 November 2021 they detailed the draft Agreement with a page-by-page review whereby any proposed changes were highlighted. Further, it was done in an open forum and questions were encouraged and answered. There was evidence that the September Quarter CPI figure was used during this presentation to draw employees’ attention to the substance of the clause and how it might be derived. Mr Cotton’s evidence was that he presented the quarterly September CPI as an example of the operation of clause 2.6. He gave this evidence in a credible and convincing manner.

  1. I am satisfied that the relevant clause and an explanation of its operation was provided to employees in an open forum and relevant information to support the Company’s view of the operation of the clause was provided prior to the vote on the Agreement.

  1. The Union provides no credible alternative narrative to that put forward by Mr Cotton. He states he went through the Agreement page by page and overall, the witnesses for the Union agree that he did provide a briefing with any changes highlighted on the screen. The witnesses recollect that there was no discussion or questions regarding the CPI clause and its application, Mr Cotton purports to have put up the September CPI data sheet as an example. This would be consistent with Mr Cotton’s evidence regarding the enterprise bargaining meeting where he presented the same data sheet, which ultimately Mr Thain conceded was provided at the bargaining meeting. I note that Mr Wilson was adamant that the data sheet had never been presented at that meeting, this is in conflict and inconsistent with the evidence provided by Mr Cotton, Mr Kuun, and Mr Thain.

  1. There was a mutual intention that the quarterly CPI be applied. It was explained to the Union and to the employees, there was no disagreement, no pursuing another figure – the annual CPI. The Union now seeks to deny the events for which evidence has been given that there were no discussions or that the parties disagreed over the application of quarterly CPI. There was no evidence of any disagreement to the explanation from Mr Cotton either in the negotiation meeting nor in the two employee briefing sessions. Had the Company been aware of the potential ambiguity they would have drafted the clause and in all likelihood the Union and employees would have accepted given there was no debate about the matter prior to the Agreement being made.

  1. The Union’s position that there was always an intention or understanding on their part that the figure to be utilised in clause 2.6 was to be annual CPI is unconvincing on the evidence tendered. The two key witnesses, Mr Wilson and Mr Thain both suffered from gaps in their recollections that were convenient to their case and further Mr Wilson’s evidence regarding not seeing the data sheet at all was in direct contradiction to Mr Thain’s evidence and the evidence of Mr Cotton. This case put by the Union falls short of what I require to be satisfied that the Union’s position of annual CPI is the figure that should be utilised to vary the Agreement.

Should there be a variance to the Agreement?

  1. Varying the Agreement in the manner proposed by the Company would not result in the reduction of the wages or conditions that the employees approved and would not create an extra financial impost on the Company.[19] On that basis, I have determined that the Agreement be varied as the Company proposes and utilise the word quarterly in clause 2.6.

Conclusion

  1. I consider on the evidence of the parties that there was ambiguity in the wording of clause 2.6 and I make an order to vary the Agreement’s wording in clause 2.6 to the following:

2.6 Wage Increases

In consideration of the nature and duration of this Agreement, the following wage increases shall apply as set out in “Appendix 1”:

·Saturday the 1st of January 2022 - 2% Increase to hourly rate or the Brisbane

December 2021 quarterly CPI rate (as published by the ABS), whichever is greater;

·On Sunday 1st of January 2023- 2% increase to hourly rate or the Brisbane December 2022 quarterly CPI rate (as published by the ABS), whichever is greater;

And

·On Monday 1st of January 2024- 2% increase to hourly rate or the Brisbane

December 2023 quarterly CPI rate (as published by the ABS), whichever is greater.

  1. Furthermore, I order that the Union’s application pursuant to s.739 be dismissed as I have resolved the ambiguity and varied the Agreement.

DEPUTY PRESIDENT


[1] United Voice (108V) v MSS Security Pty Ltd T/A MSS Security[2016] FWCFB 4979 at [19] (Watson VP, Booth and Dean DPP) (‘United Voice’); Bianco Walling Pty Ltd v Construction, Forestry, Mining and Energy Union (CFMEU) (2020) 275 FCR 385 (Flick, White and Perry JJ) (‘Bianco Walling’); Application by United Workers’ Union (108V) [2022] FWC 754 at [9] (Colman DP); Application by Bradnam’s Windows and Doors Pty Ltd [2019] FWCA 979 at [11] (Gostencnik DP) (‘Bradnam’s’).

[2] United Voice (108V) [2016] FWCFB 4979 at [19].

[3] Cannon Hill Services Pty Ltd v AMIEU[2016] FWC 7256 at [8] citing Meehan v Jones (1982) 149 CLR 571 at 578.

[4] Contract Resources Pty Ltd T/A Contract Resources, ‘Witness Statement of Jamie Cotton’, Submission in Australian Workers’ Union v Contract Resources Pty Ltd T/A Contract Resources, C2022/2666; AG2022/3077,  15 August 2022, [20].

[5] Ibid [37].

[6] Australian Workers’ Union, ‘Witness Statement of Jamie Thain’, Submission in Australian Workers’ Union v Contract Resources Pty Ltd T/A Contract Resources, C2022/2666; AG2022/3077,  15 August 2022, [11].

[7] Australian Workers’ Union, ‘Witness Statement of James Gilmore Wilson’, Submission in Australian Workers’ Union v Contract Resources Pty Ltd T/A Contract Resources, C2022/2666; AG2022/3077, 11 August 2022, [7], [10].

[8] Bradnam’s [2019] FWCA 979 at [11], (sixth bullet point); United Voice [2016] FWCFB 4979 at [22]–[24]; Bianco Walling (2020) 275 FCR 385 at [69]–[70].

[9] Construction, Forestry, Mining and Energy Union (105N) & Australian Workers’ Union (002N) v Jessie Carroll & Specialist People Pty Ltd T/A Special People and Others[2019] FWCFB 6307 at [42] (Hatcher VP, Colman DP and Lee C).

[10] Community and Public Sector Union v Telstra Corp Ltd (2005) 139 IR 141 at [47]–[48] (Ross VP, Lacy SDP and Smith C).

[11] (2020) 275 FCR 385.

[12] [2016] FWCFB 4979 at [19]–[24].

[13] [2019] FWCA 979 at [11].

[14] See Bianco Walling (2020) 275 FCR 385 at [66]–[72].

[15] Ibid [73]–[83].

[16] Australian Workers’ Union, ‘Witness Statement of James Gilmore Wilson’, Submission in Australian Workers’ Union v Contract Resources Pty Ltd T/A Contract Resources, C2022/2666; AG2022/3077, 11 August 2022, [10].

[17] Australian Maritime Officers’ Union (001N) v TT Line Company Pty Ltd [2022] FWC 244 at [46].

[18] Ibid [38].

[19] United Voice [2016] FWCFB 4979 at [23].

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Australian Maritime Officers' Union v TT-Line Company Pty Ltd [2022] FWC 244