CPB Contractors Pty Ltd T/A CPB Contractors v Construction, Forestry, Maritime, Mining and Energy Union

[2019] FWCA 2663

[2019] FWCA 2663

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.739 - Application to deal with a dispute

CPB Contractors Pty Ltd T/A CPB Contractors

v

Construction, Forestry, Maritime, Mining and Energy Union

(C2019/1030)

CPB CONTRACTORS CFMEU NEW SOUTH WALES BUILDING AGREEMENT 2018

Building, metal and civil construction industries

COMMISSIONER JOHNS

SYDNEY, 17 APRIL 2019

Application for variation of the CPB Contractors CFMEU New South Wales Building Agreement 2018 because of ambiguity or uncertainty; appropriate that uncertainty be removed; new provisions inserted; agreement varied.

[1] On 15 February 2019 CPB Contractors Pty Ltd (CPB) made an application to the Fair Work Commission (Commission) pursuant to section 739 of the Fair Work Act 2009 (FW Act) to deal with a dispute in accordance with a dispute settlement procedure (s.739 Application). The respondent was named as the Construction, Forestry, Mining, Martine and Energy Union, Construction & General Division NSW Branch (CFMMEU).

[2] In short there is a dispute about the application of clause 10.3 of the CPB Contractors CFMEU New South Wales Building Agreement 2018 (Agreement) 1 concerning wage rates.

[3] The dispute did not settle at conciliation. It became necessary to program the matter for hearing. The matter was initially listed for 10 April 2019, but was relisted for today, 17 April 2019. CPB was represented by Mr Brad Hooper. The CFMMEU was represented by Mr Ben Kruse.

[4] The Agreement was approved on 21 August 2018 and commenced operation on 28 August 2018. It passed its nominal expiry date on 31 December 2018. The Agreement binds CPB and all persons engaged by it for building and construction works in NSW. The CFMEU is covered by the Agreement. 2

[5] In the present matter the Agreement confers jurisdiction on the Commission to resolve “a dispute arising from a matter dealt with by this Agreement or the National Employment Standards.”,  3 including by “conciliation and/or arbitration (except as provided for by clause 39.1.5)”.4 The dispute in this case falls within that description. It is common ground that the Commission has jurisdiction to arbitrate the dispute.

[6] Before me today CPB made an application vary the Agreement to remove an ambiguity and uncertainty. The application was made pursuant to s.217 of the FW Act (s.217 Application). The s.217 Application was supported by the CFMMEU. Noting that the Commission must perform its functions and exercise its powers in a manner that is quick, informal and avoids unnecessary technicalities 5 I waived compliance with the Rules and accepted the s.217 Application in substitution for the s.739 Application.

[7] CPB filed the following submission,

1. INTRODUCTION
1.1 These submissions are in support of an application by CPB Contractors to vary Clause 10.3 of the CFMEU/CPB Pty Ltd New South Wales Building Agreement 2017-2018 (Agreement) to remove an ambiguity and uncertainty.
2. RELEVANT LAW
2.1 The application is sought in accordance with s217 of the Fair Work Act 2009 (Act).
2.2 The parties submit s217 empowers the Commission to vary an agreement to remove an ambiguity and uncertainty. The relevant provision is:

217 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.

2.3 The Full Bench of the Fair Work Commission considered a similar provision in s170MD(6) Workplace Relations Act 1996 in Re: Tenix Defence Systems Enterprise Agreement⁶. The provision relevantly provided:

“The Commission may, on application by any person bound by a certified agreement, by order vary a certified agreement:

(a) for the purpose of removing the ambiguity or uncertainty”

2.4 In considering such an application the Full Bench laid down the principles for determining such an application and we submit they are relevant in this case. They are:

[28] Before the Commission exercises its discretion to vary an agreement pursuant to s.170MD(6)(a) it must first identify an ambiguity or uncertainty.⁷ It may then exercise the discretion to remove that ambiguity or uncertainty by varying the agreement.

[29] The first part of the process - identifying an ambiguity or uncertainty - involves an objective assessment of the words used in the provision under examination.⁸ The words used are construed having regard to their context, including where appropriate the relevant parts of a related award. As Munro J observed in Re Linfox - CFMEU (CSR Timber) Enterprise Agreement 1997:

“The identification of whether or not a provision in an instrument can be said to contain an ‘ambiguity’ requires a judgment to be made of whether, on its proper construction, the wording of the relevant provision is susceptible to more than one meaning. Essentially the task requires that the words used in the provision be construed in their context, including where appropriate the relevant parts of the ‘parent’ award with which a complimentary provision is to be read.”⁹

[30] We agree that context is important. Section 170MD(6)(a) is not confined to the identification of a word or words of a clause which give rise to an ambiguity or uncertainty. A combination of clauses may have that effect.¹⁰

[31] The Commission will generally err on the side of finding an ambiguity or uncertainty where there are rival contentions advanced and an arguable case is made out for more than one contention.¹¹

[32] Once an ambiguity or uncertainty has been identified it is a matter of discretion as to whether or not the agreement should be varied to remove the ambiguity or uncertainty. In exercising such a discretion the Commission is to have regard to the mutual intention of the parties at the time the agreement was made.¹²

…

[35] In the context of s.170MD(6)(a) the Commission must first identify the existence of an ambiguity or uncertainty before exercising its discretion to vary the agreement. We agree with the Full Bench in Re: CFMEU Appeal which described the existence of an ambiguity or uncertainty as “a necessary statutory prerequisite to any variation being made.”¹³

2.5 s.217A of the Act prohibits the Commission from varying the Agreement by arbitration. We submit that is not the case in this instance as this is a consent application.
3. AMBIGUITY AND UNCERTAINTY
3.1 We submit that there is an ambiguity and uncertainty in the Wages Table in Clause 10.3 of the Agreement as set out in Table 1.

Table 1 Agreement Wages Table

Classification Level	Wage Rate ($/hr) April 2017	Oct 2017 2.5%	April 2018 2.5%	Oct 2018 2.5%	April 2019 3.5%
CW1	31.71	$32.51	$33.32	$34.16	$37.14
CW2	33.15	$33.99	$34.84	$35.71	$38.83
CW3( NT)	34.54	$35.41	$36.29	$37.20	$40.45
CW3(T)	35.73	$36.63	$37.54	$38.48	$41.84
CW4	37.49	$38.43	$39.40	$40.38	$43.91
CW5	39.24	$40.23	$41.24	$42.27	$45.96
CW6	41.02	$42.05	$43.10	$44.18	$48.04
CW7	42.85	$43.93	$45.02	$46.15	$50.18

3.2 An analysis of the Wages Table in
3.3 Table 2 shows that the dollar hourly rates in the table do not reflect the percentages in each column heading particularly the increases slated for April 2019.

Table 2 Analysis of Wage Rates Table

Classification Level	Wage Rate ($/hr) Apr 17	Oct 2017 2.5%		April 2018 2.5%		Oct 2018 2.5%		April 2019 3.5%
$ in Agt	$ in Agt	Actual % Incr.	$ in Agt	Actual % Incr.	$ in Agt	Actual % Incr.	$ in Agt	Actual % Incr.
CW1	31.71	$32.51	2.52%	$33.32	2.49%	$34.16	2.52%	$37.14	8.72%
CW2	33.15	$33.99	2.53%	$34.84	2.50%	$35.71	2.50%	$38.83	8.74%
CW3( NT)	34.54	$35.41	2.52%	$36.29	2.49%	$37.20	2.51%	$40.45	8.74%
CW3( NT)	34.54	$35.41	2.52%	$36.29	2.49%	$37.20	2.51%	$40.45	8.74%
CW3(T)	35.73	$36.63	2.52%	$37.54	2.48%	$38.48	2.50%	$41.84	8.73%
CW4	37.49	$38.43	2.51%	$39.40	2.52%	$40.38	2.49%	$43.91	8.74%
CW5	39.24	$40.23	2.52%	$41.24	2.51%	$42.27	2.50%	$45.96	8.73%
CW6	41.02	$42.05	2.51%	$43.10	2.50%	$44.18	2.51%	$48.04	8.74%

3.4 The parties submit that the current Wages Table is internally conflicted and is susceptible to more than one meaning. That creates uncertainty and ambiguity for the parties to the Agreement and the employees covered by it.
3.5 Such ambiguity and uncertainty is in our submission inimical to the object of the Fair Work Act to “provide a balance framework for cooperative and productive workplace relations…” (Section 3 Object of this Act).
4. INTENTION OF THE PARTIES
4.1 On the assumption that the Commission is satisfied that there is an uncertainty and ambiguity the parties have sought to ascertain their mutual intention at the time the Agreement was made.
4.2 The parties have reviewed their notes from the negotiations of the Agreement and discussed with the personnel involved and agree that it was the intention of the parties that the rates should be the same as those in the CFMEU / John Holland Pty Ltd New South Wales Building Agreement 2017-2018 (John Holland Agreement).
4.3 The parties agree that their mutual intention was to insert rates as set out in Table 3.

Table 3 Intended Wage Rates Table

Classification Level	Wage Rate ($/hr) Apr 17	Oct 2017 2.5%	April 2018 2.5%	Oct 2018 2.5%	April 2019 3.5%
CW1	$31.71	$32.73	$33.55	$34.38	$35.58
CW2	$33.15	$34.20	$35.05	$35.93	$37.19
CW3( NT)	$34.54	$35.63	$36.52	$37.43	$38.74
CW3(T)	$35.73	$36.88	$37.80	$38.75	$40.11
CW4	$37.49	$38.69	$39.66	$40.65	$42.07
CW5	$39.24	$40.51	$41.52	$42.56	$44.05
CW6	$41.02	$42.33	$43.39	$44.47	$46.03
CW7	$42.85	$44.22	$45.32	$46.46	$48.09

5. CONSENT ORDER
5.1 CPB requests that the Agreement should be varied to give effect to their mutual intentions.
5.2 The issuance of the Draft Order in Schedule 1 will remove the uncertainty and ambiguity in the Agreement.
5.3 CPB submits that the Wages Table in Schedule 1 reflects the intentions of the Parties at the time the Agreement was made.

For such other grounds and reasons as the Commission pleases.

[8] Before me today I observed that the October 2017 rates are not 2.5% greater than April 2017 rates. Consequently, the remainder of the proposed new table suffers from the same error as the current table at clause 10.3. The parties agreed that this was an error. They jointly submitted that the October 2017 rates were always intended to be expressed in dollar terms and not as a percentage increase on April 2017 rates. If this is applied then the percentage increases in April 2018, October 2018 and April 2019 make arithmetic sense.

[9] The s.217 Application proposes a variation to the table at clause 10.3 of the Agreement in order that the numeric rates match the percentage increases in April 2018, October 2018 and April 2019. It is apparent on the face of the current table at clause 10.3 that it is not possible to arrive at the numeric rates if the relevant percentage increases are applied. It is not possible to make sense of the numeric rates and percentage increases. It remains uncertain whether the numeric rates or the percentage increases apply and which takes precedence over the other. Rival contentions can be advanced about how the table is to be applied and an arguable case made out for more than one contention The current table is clearly ambiguous.

[10] In order that the uncertainty identified is removed, the Applicant proposes that the table at clause 10.3 be replaced with the following:

Classification Level	Wage Rate ($/hr) Apr 17	Oct 2017	April 2018 2.5%	Oct 2018 2.5%	April 2019 3.5%
CW1	$31.71	$32.73	$33.55	$34.38	$35.58
CW2	$33.15	$34.20	$35.05	$35.93	$37.19
CW3( NT)	$34.54	$35.63	$36.52	$37.43	$38.74
CW3(T)	$35.73	$36.88	$37.80	$38.75	$40.11
CW4	$37.49	$38.69	$39.66	$40.65	$42.07
CW5	$39.24	$40.51	$41.52	$42.56	$44.05
CW6	$41.02	$42.33	$43.39	$44.47	$46.03
CW7	$42.85	$44.22	$45.32	$46.46	$48.09

[11] What is immediately apparent from the proposed new table is that the numeric rates and the percentage increases from April 2018 now align arithmetically.

[12] Section 217 of the Act provides the following:

“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.”

[13] The Applicant is the employer covered by the Agreement and therefore has standing to make the application.

[14] As seems clear from the text of s.217, the discretion to vary an agreement may only be exercised if first the Commission is satisfied that there is ambiguity or uncertainty in the agreement. The principles that are to be applied in considering an application under s.217 may be shortly stated:

•  The Commission should approach an application in two stages. First, as a jurisdictional pre-requisite, it should identify whether there is an uncertainty or ambiguity. Secondly, if an ambiguity or uncertainty is identified, it should consider whether to exercise its discretion to vary the agreement the subject of the application; 14 

•  The process of identifying ambiguity or uncertainty involves making an objective assessment of the words used in the provisions under examination. The words used are construed having regard to their context; 15 

•  The Commission will generally err on the side of finding an ambiguity or uncertainty where there are rival contentions advanced and an arguable case is made out for more than one contention; 16 

•  However, the Commission must make a positive finding that an agreement the subject of an application under s.217 is ambiguous or uncertain. Prima facie satisfaction of ambiguity or uncertainty is not sufficient; 17 

•  The mere existence of rival contentions as to the proper construction of the terms of an agreement will also be an insufficient basis to conclude the existence of ambiguity or uncertainty. Such contentions may be self-serving. The task is to make an objective judgment as to whether the wording of a provision is susceptible to more than one meaning; 18 and

•  Once an ambiguity or uncertainty has been identified, in exercising the discretion whether to vary the agreement, the Commission is to have regard to the mutual intention of the parties at the time the agreement was made. 19 

[15] Having considered the current table at clause 10.3 of the Agreement I am satisfied that the table creates an uncertainty which engages with s.217 of the Act. I am also satisfied that I should amend the Agreement to remove the uncertainty and that it is appropriate to do so in the manner proposed.

[16] In order to remove an uncertainty, I propose to vary the Agreement as outlined earlier. The application is granted and a variation order is issued separately.

COMMISSIONER

 1   AG2018/1720 [AE900003].

 2   [2018] FWCA 4902, para [4].

 3   Clause 39.1.

 4   Clause 39.1.5.

 5 s.577(b) FW Act.

6 Re: Tenix Defence Systems Enterprise Agreement PR917548 at [33] – [35] per Ross VP, O’Callaghan SDP and Foggo C.

7 Re Victorian Public Transport Enterprise Agreement 1994, Print M2454, 7 June 1995 per Ross VP, Polites

SDP and Grimshaw C at 3; and Re CFMEU Appeal, Print R2431, 25 February 1999 per Harrison SDP, Drake DP and Larkin C at paragraph 8.

8 Re Victorian Public Transport Enterprise Agreement 1994, Print M2454, 7 June 1995 per Ross VP, Polites SDP and Grimshaw C at 3.

9 Print Q2603, 30 June 1998 at paragraph 30.

10 Re CFMEU Appeal, Print R2431, 25 February 1999 per Harrison SDP, Drake DP and Larkin C at para 12.

11 Re: Victorian Public Transport Enterprise Agreement 1994, Print M2454, 7 June 1995 per Ross VP, Polites SDP and Grimshaw C at p. 4; Re: CFMEU Appeal, Print R2431, 25 February 1999 per Harrison SDP, Drake DP and Larkin C at para 13.

12 Re: Victorian Public Transport Enterprise Agreement 1994, Print M2454, 7 June 1995 per Ross VP, Polites SDP and Grimshaw C at 3-4.

13 Re CFMEU Appeal, Print R2431, 25 February 1999 per Harrison SDP, Drake DP and Larkin C at para 6.

 14   See Re Tenix Defence Systems Pty Limited Certified Agreement 2001 - 2004 (PR917548) at [28], [32] and [35].

 15 Ibid at [29].

 16 Ibid at [31].

 17   See Colnvest Ltd v Visionstream Pty Ltd (2004) 134 IR 43 at [57].

 18   See Re Civil Construction Corporation Enterprise Agreement (PR939346); SJ Higgins Pty Ltd and Others v CFMEU (PR903843); Re CFMEU Appeal (Print R2431).

 19    See Re Tenix Defence Systems Pty Ltd Certified Agreement 2001 - 2004 (PR917548) at [32].

Printed by authority of the Commonwealth Government Printer

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