Downer EDI Works Pty Ltd

[2022] FWC 1399

[2022] FWC 1399

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009

s.217—Enterprise agreement

Downer EDI Works Pty Ltd

(AG2022/1035)

DEPUTY PRESIDENT EASTON SYDNEY, 3 JUNE 2022

Application for variation of the Downer EDI Works Pty Ltd Emulsion Operations Enterprise Agreement 2021 – ambiguity or uncertainty – agreement varied.

1. Downer EDI Works Pty Ltd has applied to vary the Downer EDI Works Pty Ltd Emulsion Operations Enterprise Agreement 2021[1] under s.217 of the Fair Work Act 2009 (Cth). Downer claims there is an ambiguity in the Agreement because of a typographical error.

1. The ambiguity that is said to arise is in clause 6.1. Clause 6.1 is in the following terms:

   
   “6.1 Rates of Pay

   a)   The wage rates are in Attachment 1.2 of this Agreement.

   b)   The rates in Attachment 1.2 will apply from the first full pay period commencing on or after the date shown and are in compensation for all non-expense related allowances except those specifically provided for in this Agreement. In accordance with Attachment 1.2 the rate and occurrence of increase will be a minimum of:

   ·2% from 1 January 2021

   ·275% on 1 January 2022

   ·2.75% on 1 January 2023

   c)   The Company may pay to an Employee a higher rate than that provided for in Attachment 1.2, in recognition of an Employee's exceptional performance, or the Company's success, or take into account labour market demands. Any additional payment is at the sole discretion of the Company and must be approved in writing by the relevant General Manager.”

1. Attachment 1.2 of the Agreement is in the following terms:

“ATTACHMENT - 1.2 Pay Structure

The minimum pay rates for each classification are set out below. These are hourly rates of pay that are calculated to compensate Employees for each hour worked and include all compensation for any other allowance or amount that may be payable under a modern award that are not provided for elsewhere in this agreement.

Classification Level	Ordinary Hourly Rates of Pay
	First    full     pay period 1 January 2021	First    full     pay period 1 January 2022	First    full     pay period 1 January 2023
1	39.40	40.49	41.60
2	40.62	41.73	42.88
3	41.83	42.98	44.16
4	43.03	44.22	45.43

1. Clause 6.1(a) is the operative term of the Agreement that sets rates of pay, by in turn referencing Attachment 1.2.

1. Clause 6.1(b) determines when the respective rates apply and also declares that the rates are in compensation for all non-expense related allowances.

1. Clause 6.1(b) also purports to describe the percentage increases applied to the rates in Attachment 1.2. Unfortunately, the percentages listed in clause 6.1(b) are not correct.

1. Section 217 is as follows:

“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.”

1. The principles that are to be applied in considering an application under s.217 was summarised by DP Gostencnik in Forgacs Engineering Pty Limited[2]:

·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;

·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;

·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;

·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;

·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;

·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.

(footnotes omitted)

1. I am satisfied that there is the requisite ambiguity in the Agreement arising from the wording of clause 6.1(b) and the inclusion of an incorrect percentage in clause 6.1(b). I agree with Downer’s submissions that the reference to “275%” in clause 6.1(b) should properly read “2.75% on 01 January 2022”.

1. The last sentence in that subclause is susceptible of more than one meaning.[3] It is possible that it might be interpreted to confer upon employees covered by the agreement a pay increase of a certain percentage (in this case an incredible percentage). In that sense I find that it is “susceptible” to an unintended interpretation.

1. In support of the variation, the Applicant has filed the document used to explain the terms and effects to the employees during the bargaining and proposal process. In this document, the change to clause 6 – Remuneration was outlined:

“6.1 Rates of Pay – as per attachment 1.2, reflecting increases from full pay period after the following dates

2% from 1 January 2021
2.75% on 1 January 2022
2.75% on 1 January 2023
6.2 Superannuation rate updated to reflect current rate of 10%
6.4.2 Meal allowances increased from $90 to $95”

1. Even though the number that appears in the clause 6.1(b) is a mistake, attachment 1.2 sets out the actual minimum rates of pay for each classification. The ordinary hourly rates that applied from 1 January 2022 are 2.75% greater than ordinary hourly rates that applied from 1 January 2021.

1. In the circumstances I am satisfied that the Agreement should be varied as sought and I will make an Order to that effect. [4] The variation will operate from 3 June 2022 (per s.217(2)).

DEPUTY PRESIDENT

Appearances:

Mr A Lynch, for the Respondent
Mr J Cooney, on behalf of the TWU

Hearing details:

2022.
Sydney (By Telephone)
April 12.

DEPUTY PRESIDENT

[1] AE514469.

[2] [2015] FWC 689 at [7].

[3]  Aged Care Services Australia Group Pty Ltd [2017] FWCA 1201 at [29] citing Re Linfox – CFMEU (CSR Timber) Enterprise Agreement 1997, see also Application by Cannon Hill Services Pty Ltd [2016] FWC 7256.

[4] PR742291.

Printed by authority of the Commonwealth Government Printer

<PR742290>