Downer EDI Engineering Power Pty Ltd

[2016] FWCA 3669

[2016] FWCA 3669

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.185 - Application for approval of a single-enterprise agreement

Downer EDI Engineering Power Pty Ltd
(AG2016/965)

DOWNER EDI ENGINEERING POWER PTY LTD SYDNEY SERVICE ENTERPRISE AGREEMENT 2016

Electrical contracting industry
DEPUTY PRESIDENT LAWRENCE	SYDNEY, 6 JUNE 2016

Application for approval of the Downer EDI Engineering Power Pty Ltd Sydney Services Enterprise Agreement 2016.

Introduction

[1] On 21 April 2016 Downer EDI Engineering Power Pty Ltd (Downer) lodged an application for approval of an enterprise agreement known as the Downer EDI Engineering Power Pty Ltd Sydney Services Enterprise Agreement 2016 (the Agreement). The application was made pursuant to s.185 of the Fair Work Act 2009 (the Act). The Agreement is a single enterprise agreement.

[2] The application nominated the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU) as the union bargaining representative plus six individual employees.

[3] Downer’s statutory declaration stated that the procedural and compulsory content requirements of the Act had been complied with. It further asserted that employees covered by the Agreement had genuinely agreed to it. The ballot closed on 8 April 2016. Of the 72 employees eligible to vote, 58 cast a valid vote and 33 voted “yes”. Finally, it was asserted that the Better Off Overall Test (BOOT) was satisfied.

[4] The Agreement was considered by the Member Support Team which raised a couple of issues with Downer who provided an undertaking in response on 6 May.

CEPU Objection

[5] On 2 May, Hall Payne Solicitors on behalf of the CEPU, requested an opportunity to be heard before the Agreement was approved.

[6] On 6 May Hall Payne sent a letter to the Commissions setting out its grounds of objection to the approval of the Agreement.

[7] It is submitted that the “Application” clause 2.2 does not have any geographical restriction. This is despite the title of the Agreement referring only to Sydney and the Notice of Employee Representational Rights (NERR) being restricted to work within the county of Cumberland.

[8] Because the Agreement applies throughout Australia, all of the employees covered by it did not have an opportunity to approve it. The group of employees was not “fairly chosen” in accordance with s.186(3) nor could the Agreement have been genuinely agreed in accordance with s.186(2).

[9] The CEPU also submits that the term “level one contestable works” is ambiguous.

[10] Reference was also made to a group of employees at an Orica site in Mascot which are covered by a parallel construction agreement with Downer. There was concern that this agreement was being terminated and these employees would be covered by the Agreement under consideration.

[11] The CEPU also questioned whether the Agreement passed the BOOT.

[12] At the hearing the CEPU raised an additional issue of the discrepancy between the description of the Agreement in the NERR and the “Application” clause of the final agreement. However, I am satisfied that there is nothing in this respect that prevents the approval of the Agreement. Negotiations lead to an evolution in the final document. The fact is that those who were to be covered by the Agreement received the NERR in accordance with the Act.

Commission Proceedings

[13] The matter was allocated to me and listed for hearing on 23 May 2016.

[14] Prior to the hearing, my chambers undertook a separate consideration of the making and content of the Agreement.

[15] There were 11 negotiation meetings between Downer and the CEPU and one failed vote. The CEPU was obviously aggrieved that the Agreement reduced a number of conditions from the previous agreement. However, the issues the Commission must be satisfied about are whether the Agreement complies with the procedural and content requirements of the Act and whether it satisfies the BOOT.

[16] Subject to an issue about apprenticeship rates for adults, in respect of which an undertaking had already been provided, I am satisfied that the Agreement meets the BOOT.

[17] Mr J. de Flamingh, solicitor appeared for Downer. Mr J. Kennedy, solicitor, appeared for the CEPU. Both were granted permission to appear pursuant to s.596.

Consideration

[18] The CEPU did not press its BOOT objection. Downer tendered a further detailed comparison between the Agreement and the Electrical, Electronic and Communications Contracting Award 2010 [MA000025].

[19] The argument therefore was about the “Application” clause which provides:

“2.2 Application

(a) This Agreement covers:

(i) Downer EDI Engineering Power Pty Ltd (Company); and

(ii) The Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia, (CEPU), New South Wales Branch; and

(iii) Subject to (b) below, all employees of the Company who:

(A) are engaged in electrical maintenance services, fabrication, capital work, minor construction, turnaround and shutdown activities and any other similar work, and including significant ongoing maintenance / service work within the county of Cumberland; or

(B) are engaged to perform fitout, refurbishment or renovation work supervised by Facilities Managers or Builder/Principal Contractor in pre-tenanted or existing buildings; or

(C) Level one contestable works; or

(D) are engaged to perform asset replacement , renewal, repair work and minor construction at all Sydney Water site facilities including work incidental thereto; and

(E) perform work that is covered by a classification set out in this Agreement (Employees).

(b) this Agreement does not cover the following employees:

(i) employees who perform work that is within the scope of the following industrial instruments, or successor:

(A) the “Downer EDI Engineering Power Pty Ltd & Union ;- Sydney Division – Construction Enterprise Agreement 2012.”

[20] The Full Bench in AMIEU v Golden Cockerel Pty Ltd[2014] FWCFB 7447 (Golden Cockerel) at [41] summarised the approach established by the authorities in respect of the construction of agreements and listed the following principles:

“[41] From the foregoing, the following principles may be distilled:

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

2. In construing 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.”

[21] In my view, there is an ambiguity in clause 2.2 which needs to be resolved in accordance with the Golden Cockerel principles.

[22] It seems to me that the Agreement is intended to, and in fact applies to, employees in Sydney only or, to use a traditional term, the County of Cumberland. The ambiguity arises because the words “within the County of Cumberland” are used in sub-clause (A), but not (B) or (C). Sub-clause (D) relates only to Sydney Water sites so it is clear. As well “(C) Level One contestable works” is not defined.

[23] I was assisted by Ms Carly Carloss from Downer who gave evidence about the history of agreement coverage of Downer and the conduct of the negotiations. Her evidence, which was not challenged by the CEPU, was that the negotiations were on the basis that the Agreement would only apply to Sydney as had the previous agreement. She also said that the additional words in the “Application’ clause were simply to clarify the coverage of work.

[24] A New South Wales Department of Industry document entitled “Contestable Works” was tendered (Exhibit F1) which details the Accreditation Scheme that operates pursuant to the NSW Electricity Supply Act 1995. I am satisfied that the term “Level One contestable works” is an industry term understood by the parties.

[25] My conclusion about the geographical coverage of the Agreement is based on the evidence about:

● the terms of the Agreement considered as a whole;

● the history of agreements covering Downer;

● the history of the negotiations of this agreement.

[26] Copies of the Downer EDI Engineering Power Pty Ltd NSW Electrical Enterprise Agreement 2016 and the Downer EDI Engineering Power Pty Ltd Sydney Service Enterprise Agreement 2013-2015 were provided by Downer after the hearing. Sub-clauses (B) and (C) have been added to the 2016 – 2018 Agreement, as compared to the incidence clause in the 2013 – 2015 Agreement.

[27] This points to an intention and understanding of the parties that the Agreement was to employees in Sydney only. The CEPU did not substantially dispute this. It did not point to any real possibility of the Agreement applying in the rest of Australia.

[28] Clause 2.2 could have been drafted with more care but there are a number of other references in the Agreement which reinforce the conclusion that it was meant to apply in Sydney only, namely:

● the title;

● the reference to the NSW Branch of the CEPU;

● the Sydney Service allowance in clause 11;

● Appendix E which defines the County of Cumberland;

● Appendix F which provides a travel allowance for travel outside of the County of Cumberland.

[29] Downer provided an assurance with respect to the Mascot site which, I am satisfied, resolved that issue.

[30] The CEPU, at the conclusion of the hearing lodged a statutory declaration that it wished to be covered by the Agreement in the event that the Agreement was approved.

[31] I was provided with the decision of Commission Roe in respect of the Downer EDI Engineering Power Pty Ltd Queensland Maintenance Services & Minor Capital Agreement 2015-2018[2016] FWCA 1036 in which the Commissioner accepted an undertaking from Downer which confined that agreement to Queensland when the “Application” clause was general in nature. Downer have provided such an undertaking which is attached to this decision. In my view, it is not necessary but I have included it in any event.

Conclusion

[32] As a result of the conclusions I have reached with respect to the Application clause of the Agreement, I am satisfied that each of the requirements of ss186, 187 and 188 as are relevant to this application for approval have been met.

[33] The Commission notes and accepts the undertakings provided by Downer and they are taken to be a term of the Agreement. A copy of the undertakings are attached to this decision as Annexure A.

[34] The Agreement does not contain a consultation term with the content required by s.205(1) and (1A). Accordingly in accordance with s.205(2), the model consultation term contained in Schedule 2.3 of the Fair Work Regulations 2009 is taken to be a term of the Agreement.

[35] The Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU), being a bargaining representative for the Agreement, has given notice under s.183 of the Act that it wants the Agreement to cover it. As required by s.201(2) I note that the Agreement covers the organisation.

[36] The Agreement is approved. In accordance with s.54(1) it will operate from 13 June 2016. The nominal expiry date of the Agreement is 13 June 2018.

DEPUTY PRESIDENT

Appearances:

J. de Flamingh, solicitor for Downer;

J. Kennedy, solicitor for the CEPU.

Hearing Dates:

2016

Sydney:

May 23.

Attachment A

Printed by authority of the Commonwealth Government Printer

<Price code J, AE419260  PR581279>