Essential Energy v Australian Municipal, Administrative, Clerical and Services Union

[2015] FWCFB 1981

[2015] FWCFB 1981

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.604 - Appeal of decisions

Essential Energy
v
Australian Municipal, Administrative, Clerical and Services Union; Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia; The Association of Professional Engineers, Scientists and Managers, Australia
(C2014/6919 and C2014/6920)

VICE PRESIDENT HATCHER
DEPUTY PRESIDENT SAMS
COMMISSIONER MCKENNA SYDNEY, 4 MAY 2015

Appeal against decision [2014 FWC 5601] of Senior Deputy President Hamberger at Sydney on 2 October 2014 in matter numbers C2014/1048 and C2014/1458.

Introduction and background

[1] Essential Energy, a corporation owned by the NSW Government which distributes electricity, has applied for permission to appeal and appeals a decision issued by Senior Deputy President Hamberger on 2 October 2014 1 (Decision). The Decision was made in the exercise of arbitration powers conferred by the dispute resolution procedures in two enterprise agreements - the Essential Energy Enterprise Agreement 2011 (2011 Agreement) and the Essential Energy Enterprise Agreement 2013 (2013 Agreement). It arose out of two applications made by the Australian Municipal, Administrative, Clerical and Services Union (ASU) for the Commission to deal with a dispute under s.739 of the Fair Work Act 2009 (Act) - the first having been lodged on 16 June 2014, when the 2011 Agreement remained in effect, and the second on 12 August 2014, by which time the 2013 Agreement had come into operation. The Decision involved the interpretation of the coverage provision in the two agreements (which were in virtually identical terms). Essential Energy contends that the interpretation preferred by the Senior Deputy President was incorrect, and seeks that permission to appeal be granted, the appeal be upheld, the Decision be set aside, and the ASU’s dispute resolution applications be dismissed.

[2] The underlying dispute between Essential Energy and the ASU concerns the extent to which Essential Energy is able to employ its more senior and higher paid employees on individual contracts. This is affected by the scope of the coverage of the two agreements. Clause 1.3 of the 2011 Agreement provided as follows:

“1.3 COVERAGE

This Agreement applies to Essential Energy and its employees who are paid a base weekly rate of pay up to and including Pay Point 44 as contained in Section 6 Clause 6.13 (Table 1: Essential Energy Rates of Pay) of this Agreement. Employees whose base weekly rate of pay is above Pay Point 44 will not be covered by the terms of this Agreement and shall instead be in accordance with a Total Remuneration Package (TRP) contract of employment.

Under the terms of this Agreement, Essential Energy will not offer Total Remuneration Package (TRP) contracts to any new employees whose base weekly rate of pay is up to and including Pay Point 44 as contained in Section 6 Clause 6.13 (Table 1: Essential Energy Rates of Pay) of this Agreement.

This Agreement otherwise governs all employment, wages and conditions of the employees to whom this Agreement applies.”

[3] The nominal term of the 2011 Agreement expired on 30 June 2013. During negotiations prior to that date for a replacement enterprise agreement, Essential Energy refused to bargain in relation to some higher paid categories of employees who were, at that time, treated by the parties as covered by the 2011 Agreement. This led to a bargaining dispute about the scope of the replacement enterprise agreement. On 11 December 2013 an application was made by the ASU, the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU), and The Association of Professional Engineers, Scientists and Managers, Australia (APESMA) pursuant to s.240(1) of the Act for the Commission to deal with the bargaining dispute. By this time, all the provisions of the replacement enterprise agreement had been agreed except the coverage clause. Essential Energy consented with the three unions to the Commission arbitrating the bargaining dispute pursuant to s.240(4).

[4] The position adopted by Essential Energy in the arbitration was that the cut-off for coverage for the new agreement should be at pay point 41, except that all Area Managers, who were paid less than pay point 41, would also be excluded from the coverage of the new agreement, but that Senior Network Operators, who were at pay point 42, would be included. The three unions took the position that the coverage of the new agreement should be the same as the 2011 Agreement.

[5] The arbitration was conducted by the Senior Deputy President. The hearing was lengthy, and an extensive amount of evidence was adduced by the parties. In a decision issued on 9 May 2014 2, the Senior Deputy President determined that he was not satisfied that a case for change to the coverage of the enterprise agreement had been made out, and that the coverage for the new agreement should be the same as in the 2011 Agreement.3

[6] It is relevant that in the Senior Deputy President’s decision of 9 May 2014, the competing positions of the parties were described in the following terms:

“[62] For Essential Energy, approximately 4% of employees are not covered by the 2011 Agreement and are currently employed under individual contracts. The current agreement applies to employees up to pay point 44 which is $2455.37 per week or $127,679 per annum before including allowances and other additional payments or is up to about 163,609.40 per annum on a total remuneration package (TRP) basis. The scope proposed by Essential Energy would have the proposed agreement only apply to pay point 40 (other than for Network Operators, where the pay point would extend to pay point 42). Pay point 40 is $2137.56 per week or $111,580 per annum before including allowances and other additional payments, or is up to about $147,511 on a TRP basis...”

[7] In accordance with the arbitration agreement reached between Essential Energy and the unions, Essential Energy made arrangements for the new agreement, with the same coverage clause as the 2011 Agreement, to be put to a vote of its employees. The ballot for this was to commence on 10 June 2014. In a document distributed to employees in May 2014, Essential Energy described the effective coverage of the new agreement in the terms agreed as encompassing all employees with a total remuneration of up to $173,000. However, about a week before the ballot opened, Essential Energy wrote to the unions expressing an altered position as to the effect of the coverage clause. It now contended that staff with a total remuneration of $148,027 could be employed on individual contracts and outside the coverage of the new agreement (as well as the 2011 Agreement). The unions contested this approach, and this caused the first dispute resolution application to be lodged on 16 June 2014 pursuant to the dispute resolution procedure in the 2011 Agreement. The new agreement (the 2013 Agreement) was approved in the ballot of employees, and on 9 July 2014 was approved by the Commission with an operative date of 16 July 2014. On that basis the second dispute resolution application was lodged pursuant to the dispute resolution procedure in the 2013 Agreement on 12 August 2014.

The Decision

[8] In his decision, after reciting the parties’ submissions, the Senior Deputy President concluded he was satisfied that he had jurisdiction to arbitrate the dispute concerning the scope of coverage of the 2011 Agreement and the 2013 Agreement, but noted that his jurisdiction in this respect was limited by s.739(5) of the Act, which prevented him from determining the dispute in a manner inconsistent with the terms of the agreements. Following from that conclusion, the Senior Deputy President identified the issue to be determined in the following way:

“[9] The agreements deal quite explicitly with the issue of coverage, in clause 1.3. Given s.739 (5) of the Act, I consider that the Commission cannot resolve the dispute by deciding that the agreements should have coverage other than that provided by the agreements themselves. The key issue for the Commission therefore is to decide on the proper interpretation of Clause 1.3.”

[9] The Senior Deputy President then referred to a number of decisions concerning the principles for the proper interpretation of industrial instruments, including enterprise agreements under the Act 4 and, in doing so, quoted the following summary of those principles stated by the Federal Court in Australian Nursing and Midwifery Federation v Eastern Health5:

“* construction begins with a consideration of the ordinary meaning of the words used;

* regard should be had to the industrial purpose sought to be achieved; and

* to determine context and general purpose, it is appropriate to have regard to the history of the relevant provision and by examining its antecedents.” 

[10] In accordance with the above principles, the Senior Deputy President first considered the ordinary meaning of the words used in clause 1.3 of the two agreements. His analysis on this issue was as follows:

“[13] As was stated in Eastern Health ‘construction begins with a consideration of the ordinary meaning of the words used’. A literal reading of Clause 1.3 suggests that all one needs to know to determine whether an employee of Essential Energy is covered by the agreement is the employee’s ‘base weekly rate of pay.’ If this rate is at or below the amount that applies at Pay Point 44 (currently $2,589.75) then the employee is covered by the agreement.

[14] Employees covered by the agreement are entitled to a number of benefits provided by the agreement. This includes a 15% employer contribution to superannuation. Managers and Specialists who are covered by the agreement receive an additional 11% in return for working a 40 hour week and 10 day fortnight. An employee covered by the agreement may also be entitled to the Electrical Safety Rules allowance (ESRA) worth up to $120 per week. On the other hand, a literal reading of Clause 1.3 provides that if an employee has a base weekly rate of pay of more than applies at Pay Point 44 he or she is not covered by the agreement, and is not necessarily entitled to the benefits contained in the agreement. Such employees are employed under a ‘Total Remuneration Package (TRP) contract of employment’. It would therefore - at least in principle - be possible for an employee employed under such a contract to receive less in total remuneration than an employee under the agreement - as long as their ‘base weekly rate of pay’ was more than that $2,589.75.

[15] That much is clear. The issue that arises in this case is whether there is anything in the surrounding context, including the history of the 2011 and 2013 agreements, and their antecedents, and the industrial purpose of the clause to displace this literal construction. This includes the question of whether there was a ‘common understanding’ at the time the agreements were made along the lines asserted by the unions.”

[11] On the question of whether there was a “common understanding”, the Senior Deputy President then referred at length to evidence which had been received at the hearing of the matter concerning the “industrial history”, which included written and verbal communications between the parties in the course of the negotiations for the 2011 Agreement and the 2013 Agreement - in particular communications between Mr Brock, an official of the APESMA, and Mr Smith, Essential Energy’s Industrial Relations Manager. In relation to the industrial history prior to the 2011 Agreement, the Senior Deputy President found:

“[57] Having regard to all the evidence I am satisfied that prior to the 2011 agreement, Essential Energy adopted a standard practice whereby TRP contracts would only be offered to employees whose remuneration was above the total amount they would receive under the award or enterprise agreement. All employees whose remuneration fell below that level were treated as being covered by the award or enterprise agreement. This reflected the resolution of the dispute in the State commission about coverage reached in 2009. It was also a logical approach as it created a clear horizontal line, with more senior (and the most highly paid) employees on contract. There were a small number of exceptions but these were essentially anomalous.”

[12] The Senior Deputy President then identified the critical question as being whether the coverage clause in the 2011 Agreement had the effect of changing that previous approach. In answering that question, the Senior Deputy President made a number of findings based on the evidence on the industrial history that had been received:

“[59] There is no doubt, as I have already discussed, that on a literal reading the coverage clause could be read as allowing Essential Energy to offer TRP contracts to employees who - if they were covered by the award - would receive a greater level of remuneration. That is the interpretation now given by Essential Energy to the clause. I do note however that there would be no clear industrial logic behind such an approach as it would mean that less well paid employees (and therefore presumably less senior employees) could be on contract compared to those on the agreement.

[60] During the negotiations for the 2011 agreement the unions were concerned that - despite its lack of obvious logic - the new coverage clause proposed by Essential Energy could be read this way. Mr Brock in particular sought an assurance from Mr Smith that this is not how the clause would be applied. Despite his denials I am satisfied that Mr Smith did indeed provide Mr Brock with that assurance. It is true that he did not agree to vary the drafting of the clause, at this late stage in the negotiations. Mr Brock accepted this (even though he would have preferred the drafting of the clause to have been altered) on the basis that Mr Smith had assured him that only employees whose remuneration would be higher than they would have received under the agreement (taking into account matters such as the 11% loading for a 40 hour week, additional superannuation, and where applicable ESRA) would be treated as outside the agreement and offered TRP contracts.

[61] I have reached the conclusion that Mr Smith gave the assurance to Mr Brock for a number of reasons. First, I found Mr Brock a more convincing witness than Mr Smith, and I have preferred his evidence over that of Mr Smith, where it is in conflict. Mr Brock’s evidence was detailed, clear and consistent. Mr Smith, on the other hand, contradicted himself a number of times, and his replies during cross examination were often vague and unconvincing. Mr Brock’s version of what occurred is also more consistent with the contemporaneous written evidence. Mr Brock’s email of 23 August explicitly referred to his recent discussions with Mr Smith ‘regarding the intention that all Agreement-based benefits, including payment of the ESRA, the 11% loading for working a 10 day fortnight and the additional 6% employer superannuation contribution etc are paid in addition to the salary point 44 base rate of pay when determining the Agreement threshold.’ At no time did Mr Smith seek to disabuse Mr Brock that there was any such intention. Nor is there any evidence that Essential Energy told its employees at the time of the 2011 agreement that the agreement involved a significant change in coverage when compared to the existing situation (which would have been the case if the clause had the meaning Essential Energy now claims.) Indeed employees covered by the Managers & Specialists Agreement were explicitly told that they would remain covered by the enterprise agreement - something that would not necessarily be the case if the coverage had changed in the way Essential Energy now asserts.

[62] Indeed the evidence of what occurred after the implementation of the 2011 agreement is that Essential Energy did indeed have the same understanding of the coverage clause as the unions. Mr Smith contended that the practice Essential continued to apply concerning agreement coverage was only done so as a matter of discretion. However none of the contemporaneous evidence supports this. Indeed right through the proceedings that led to the scope decision, up until May 2014 (when the document compiled by Essential Energy to provide answers to common questions from staff about the proposed 2013 agreement was prepared), it is clear that Essential Energy accepted the proposition that only those employees in receipt of total remuneration above the amount that would be paid to an employee on Pay Point 44 were considered to be not covered by the agreement. Despite Mr Smith’s denials, I find that it was only in June 2014 that Essential Energy changed its view about how to interpret the coverage clause.”

[13] The Senior Deputy President then stated the following conclusions:

“[63] Based on the evidence, I find the parties, at the time of the making of the 2011 agreement, had a common understanding of the way in which Clause 1.3 operated. In relation to the 2013 agreement, the parties agreed to accept the scope decision, which was that the 2013 agreement should have the same scope as the 2011 agreement.

[64] In these circumstances, the literal construction of Clause 1.3 in both agreements must give way to this common understanding. As a consequence this means that, for the life of the 2013 agreement, Essential Energy must only offer TRP contracts to employees which have a total remuneration greater than the employee would have received if they were employed at Pay Point 44 under the agreement. Other employees must be employed under the terms of the agreement.”

Submissions

[14] Essential Energy submitted that the Senior Deputy President erred in the conclusion he reached concerning the meaning and effect of the coverage clause in the 2011 Agreement and the 2013 Agreement for the following reasons:

• the Senior Deputy President failed to give effect to what he correctly identified as the plain and literal meaning of the coverage clause;



• in circumstances where it was common ground between the parties that the coverage clause was not ambiguous, evidence of the surrounding circumstances should not have been admitted to contradict the plain language of the agreements;



• in reaching a conclusion which contradicted the express terms of the coverage clause, the Senior Deputy President determined the matter contrary to the requirement in s.739(5) of the Act that he not make a decision inconsistent with the 2013 Agreement;



• the negotiations for the 2011 Agreement made it clear that coverage was intended to be changed from a classification basis to one based on pay points, and Essential Energy had rejected any change to the coverage clause which it had proposed and which ultimately became clause 1.3 of the 2011 Agreement;



• any acceptance of the coverage clause by Mr Brock on the basis of an assurance said to have been given by Mr Smith could not ground a finding of common intention, since there was no evidence that Mr Brock was acting for any other union or its members;



• that Essential Energy, as a matter of managerial discretion, continued to offer individual contracts to the same class of persons after the 2011 Agreement came into operation as it had before that time was not relevant to the proper interpretation of the coverage clause;



• the Senior Deputy President erroneously relied on evidence concerning the subjective intention and understanding of some of the bargaining representatives, and the conduct of Essential Energy after the 2011 Agreement had come into effect, in reaching his determination;



• any finding as to a common understanding or common intention could only be used to aid the interpretation of the words used in the coverage clause, not to displace them;



• the objective background facts demonstrated that it was intended that coverage by reference to pay point be adopted in the 2011 Agreement, since this was directed towards establishing a clear and easy line of demarcation between those who were covered by the 2011 Agreement and those who were not;

• explanatory documents filed with the application for approval of the 2011 Agreement further demonstrated objectively that it was intended that the coverage of the 2013 Agreement operate by reference to the base weekly rate of pay up to pay point 44; and



• the Senior Deputy President erred in preferring the evidence of Mr Brock over that of Mr Smith, and the evidence of Mr Smith that there was a difference between the meaning of the coverage clause in the 2011 Agreement and the exercise of Essential Energy’s discretion in offering individual contracts should have been accepted.

[15] Essential Energy submitted that permission to appeal should be granted in the public interest because the Decision was inconsistent with the terms of the 2011 Agreement and the 2013 Agreement and was consequently made contrary to the requirement in s.793(5) of the Act, which amounted to jurisdictional error. The appeal also raised important questions about the principles of interpretation of enterprise agreements, including the applicability of the concept of “common understanding” and the meaning of the expression “base weekly rate of pay”.

[16] The ASU, CEPU and the APESMA, which appeared in the proceedings in opposition to the appeal, submitted that permission to appeal should be refused, or in the alternative that the appeal should be dismissed, because:

• Essential Energy was attempting, in substance, to re-litigate the s.240 matter concerning coverage in which it had been unsuccessful;



• it would be contrary to the principles of interpretation and perverse to adopt a meaning of the coverage clause based upon a literal reading of it in circumstances where the evidence demonstrated that that meaning was not the intention of the parties;



• the coverage clause was ambiguous, and its meaning could only be determined by a careful analysis of the history, from which it could be found that there was a common intended effect;



• the industrial history demonstrated, as the Senior Deputy President found, that the coverage clause of the 2011 Agreement had not been intended to change the pre-existing arrangements as to coverage;



• the manifest purpose of the industrial parties who negotiated the 2011 Agreement was to create a clear line between those to be covered by the agreement and those at a higher level, which was achieved by ensuring that those above the line had a higher total remuneration than those below it;



• as the Senior Deputy President correctly recognised, the interpretation advanced by Essential Energy under which the coverage line was drawn by reference to base weekly pay only led to the absurd consequence that an employee could fall outside of the coverage of the 2013 Agreement and be placed on an individual contract even though that employee had a significantly lower total remuneration than an employee who was covered by the 2013 Agreement and enjoyed all of its additional benefits simply because the first employee had a slightly higher base weekly rate of pay than the second employee;



• the common understanding of the parties before and after the 2011 Agreement as demonstrated by actual practice (until the opportunistic “bolt from the blue” in June 2014 when Essential Energy adopted a different approach) was that the coverage line for the application of collective agreements was based on the employee’s total remuneration;



• the position taken by Essential Energy in the s.240 proceedings was consistent with that joint intention and longstanding practice;



• the Senior Deputy President was correct in preferring the evidence of Mr Brock over that of Mr Smith, which supported the existence of this common understanding; and



• the assurance found to have been given by Mr Smith to Mr Brock could be relied upon because it was consistent with what all the parties commonly understood to be the case based on past history and current practice.

[17] The ASU, CEPU and the APESMA submitted additionally, or in alternative, that the reference in the coverage clause to “Employees whose base weekly rate of pay is above Pay Point 44” being outside coverage was, read in the context of the agreements as a whole, referring to employees who received a rate of pay for 40 hours of work in excess of pay point 44.

[18] Subsequent to the hearing of the appeal on 17 February 2015, we invited the parties to provide further submissions in relation to three questions:

(1) Is the “base weekly rate of pay” referred to in clause 1.3 of the 2011 Agreement and the 2013 Agreement a rate payable for an average 36 hours of work per week?

(2) Is an employee who receives a weekly salary in excess of the “base weekly rate of pay” for Pay Point 44 as prescribed in clause 6.12, “Table 1, Essential Energy Rates of Pay” excluded from the coverage of the 2013 Agreement in circumstances where the employee is required to work more than an average of 36 hours per week and has a lower hourly rate than that prescribed in clause 6.12 for Pay Point 44?

(3) Is the 2013 Agreement read as a whole to be interpreted so that all persons who fall within any of the classifications in clause 8.2 of the 2013 Agreement are covered by the 2013 Agreement and are entitled to its benefits?

[19] Essential Energy answered the first question in the negative and submitted that the base weekly rates of pay are payable irrespective of hours worked. On the second question, Essential Energy submitted that coverage was determined solely by reference to whether an employee’s base weekly rate of pay was in excess of pay point 44; if it was, the employee was excluded from coverage. On the third question, Essential Energy answered in the negative. It reiterated that coverage was determined solely by reference to pay point 44. Essential Energy also submitted that clause 8.2 was only concerned with progression between pay points and had nothing to do with coverage.

[20] The ASU, CEPU and the APESMA answered the first question in the affirmative consistent with the alternative submission it had earlier advanced. In relation to the second question, the unions submitted that the answer was “no”, consistent with the proposition that the base weekly rate of pay represented an amount payable for 36 ordinary hours of work. On the third question, the unions submitted that the answer was “yes”. They pointed to clause 1.18 of the 2013 Agreement as requiring that the weekly rates of pay in clause 6.12 “shall apply” to the employees in the respective classifications, and submitted that the 2013 Agreement should not be interpreted in a way which would permit the progression guidelines to be subverted.

Consideration

Whether appealable error

[21] The principles applying to the interpretation of enterprise agreements were comprehensively summarised in the recent Full Bench decision in The Australasian Meat Industry Employees Union v Golden Cockerel Pty Limited 6as follows:

“1. The [Acts Interpretation Act 1901 (Cth)] 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 aid 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.”

[22] Propositions 4, 9 and 10 above, which we consider to be of particular relevance to the determination of this appeal, were the subject of earlier discussion in the Full Bench decision in Shop, Distributive and Allied Employees Association (Queensland Branch) Union of Employees v Woolworths Limited T/A Woolworths 7 as follows:

“[12] It is undoubtedly the case that, in resolving a dispute as to the interpretation of a provision of an enterprise agreement approved under the Fair Work Act 2009, it is permissible to take into account the industrial context and purpose of the agreement. However, there are two important limitations upon this approach relevant to the determination of this appeal. The first is that the process of interpretative analysis must focus, first and foremost, upon the language of the agreement itself. For example, in Amcor Limited v CFMEU, the process was described by Gleeson CJ and McHugh J in the following terms: “The resolution of the issue turns upon the language of the particular agreement, understood in the light of its industrial context and purpose ...”. Or, as Kirby J put it in the same case, “Interpretation is always a text-based activity”. Admissible extrinsic material may be used to aid the interpretation of a provision in an enterprise agreement with a disputed meaning, but it cannot be used to disregard or re-write the provision in order to give effect to an externally derived conception of what the parties’ intention or purpose was. The oft-quoted statement of Madgwick J in Kucks v CSR Limited makes this clear:

‘But the task remains one of interpreting a document produced by another or others. A court is not free to give effect to some anteriorly derived notion of what would be fair or just, regardless of what has been written into the award. Deciding what an existing award means is a process quite different from deciding, as an arbitral body does, what might fairly be put into an award. So, for example, ordinary or well-understood words are in general to be accorded their ordinary or usual meaning.’

[13] The second limitation is that regard cannot be had to the respective subjective intentions and expectations of the parties as demonstrated by their “statements and actions” in negotiating the agreement. Rather, the task is to identify the common intention of the parties as they have expressed it in the terms of their agreement. In the context of commercial contracts, this task was described by the High Court in Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd in the following way:

‘It is not the subjective beliefs or understandings of the parties about their rights and liabilities that govern their contractual relations. What matters is what each party by words and conduct would have led a reasonable person in the position of the other party to believe. References to the common intention of the parties to a contract are to be understood as referring to what a reasonable person would understand by the language in which the parties have expressed their agreement. The meaning of the terms of a contractual document is to be determined by what a reasonable person would have understood them to mean. That, normally, requires consideration not only of the text, but also of the surrounding circumstances known to the parties, and the purpose and object of the transaction.’”

[23] In addition, there is one well-established further principle relevant to the interpretation of industrial instruments, including enterprise agreements, which we consider to be relevant, namely that it is not permissible to take into account the conduct of parties which occurs after an industrial instrument is made as an aid to interpret that industrial instrument. 8

[24] We do not consider, with respect, that the approach taken to the interpretation of the coverage clause in the 2011 Agreement and the 2013 Agreement in the Decision accorded with these principles. It is apparent that the reasoning process by which the Senior Deputy President reached the conclusion that he did involved the following steps: first, stating the literal meaning of the coverage clause; second, identifying an anomalous consequence of the literal meaning; third, posing the question whether there was anything in the surrounding context, including the industrial history, to displace the literal meaning; fourth, making findings based on the evidence concerning the industrial history; fifth, identifying a common understanding from that industrial history; and sixth, reaching a conclusion in which the literal meaning of the coverage clause was displaced by the identified common understanding.

[25] That approach involved a number of errors. As earlier identified, resort may be had to extrinsic matters in order to identify and resolve ambiguity in the language of a provision of an enterprise agreement. However, the extrinsic material was not used in this way in the Decision. No ambiguity in the coverage clause was ever identified, let alone resolved, by the use of that material. Instead, the extrinsic material was used to reach a conclusion that had no foundation in the text of the coverage clause but rather simply displaced what the clause said. The conclusion reached by the Senior Deputy President in paragraph [64] of the Decision referred to the common understanding he had identified as limiting Essential Energy’s capacity to offer individual or TRP contracts to employees with “a total remuneration greater than the employee would have received if they were employed at Pay Point 44 under the agreement”. Nothing in the Decision related that conclusion to the text of the coverage clause or of any other part of the 2011 Agreement or the 2013 Agreement. The line between those covered by the agreements and those not covered and to whom individual contracts could be offered was expressly drawn by reference to the “base weekly rate of pay” at pay point 44. The meaning of that expression in the context of the agreements as a whole is dealt with later in this decision, but there is no available reading of that expression which could equate it with total remuneration, nor was one suggested. For these reasons, the conclusion in the Decision was not one arrived at through a process of interpretation of the words used in the agreements, but was rather an exteriorly-derived view as to what the agreements should have said.

[26] Further, in considering the surrounding circumstances and industrial history of the coverage clause in the agreements, and in attempting to ascertain the common intention of the parties, the Senior Deputy President had regard to matters which went beyond what legitimately could be taken into account. It was appropriate to analyse the history of coverage of predecessor collective industrial instruments in Essential Energy’s workforce and compare that to the coverage clause in the 2011 Agreement and the 2013 Agreement. This was part of the objective framework of facts in which the 2011 Agreement was made. However, the extensive reliance upon communications between parties during the course of the negotiations for the 2011 Agreement - in particular the discussions between Mr Brock and Mr Smith - we consider to have been misplaced. These constituted what was described by Mason J in Codelfa Construction Pty Ltd v State Rail Authority of NSW 9 as “statements and actions of the parties which are reflective of their actual intentions and expectations” which should be excluded from consideration in the construction of agreements. Further, the Senior Deputy President had regard to conduct of Essential Energy occurring after the 2011 Agreement was made and approved in forming the view that he did concerning the common understanding of the parties. This was impermissible as earlier stated.

[27] The result of these errors was that the Senior Deputy President did not decide what he described as the “key issue”, being the proper interpretation of clause 1.3. Consequently we consider that permission to appeal should be granted, the appeal should be upheld, and the Decision should be quashed.

Re-hearing - interpretation of the coverage provisions of the 2011 Agreement and the 2013 Agreement

[28] Because of our conclusion, it is necessary to re-hear the matter and ascertain the correct interpretation of the coverage clause in the 2011 Agreement and the 2013 Agreement. Given that we have had the benefit of extensive written and oral submissions from the parties on this interpretation of the coverage clause, and any evidence of possible relevance is before us, we consider that it is appropriate to re-hear the matter ourselves on the material before us. As earlier noted, we also invited additional written submissions on a number of discrete questions following the hearing of the appeal. We are satisfied from the parties’ responses that the questions we posed have been properly understood and addressed. In those circumstances we do not, notwithstanding Essential Energy’s request for a further oral hearing in relation to those questions, propose to list the appeal for any further hearing concerning the interpretation of the coverage provisions of the agreements.

[29] We will address the interpretation question by reference to the 2013 Agreement, although in all relevant respects the provisions of the 2011 Agreement are virtually identical in their terms and effect, so that our interpretation of the coverage clause of the 2013 Agreement will supply the answer to the question of the proper interpretation of the coverage clause of the 2011 Agreement.

[30] We have already set out the coverage provision in clause 1.3. In order to properly construe clause 1.3 it is necessary to examine other provisions of the 2013 Agreement which provide its context. Clause 1.3 refers to “employees who are paid a base weekly rate of pay up to and including Pay Point 44 as contained in Section 6 Clause 6.13 (Table 1: Essential Energy Rates of Pay) ...”. It was common ground that the cross-reference to clause 6.13 was in error and that the table referred to was contained in clause 6.12 (the equivalent table was in clause 6.13 in the 2011 Agreement; the cross-reference in clause 1.3 was not adjusted in the 2013 Agreement when this changed to clause 6.12). Clause 6.12 is entirely comprised of “Table 1: Essential Energy Rates of Pay”. The table sets out pay rates for each pay point from C1-C3 (which a note explains are for Cadet Engineers only), and then from 1 to 44. For each pay point, as the headings to the columns in the table identify, are set out amounts for “Weekly $ 1.7.12”, “Hourly rate $ 1.7.12”, “Weekly $ 1.7.13 2.7%”, “Hourly rate $ 1.7.13”, “Weekly $ 1.7.14 2.7%”, “Hourly rate $ 1.7.14”. It is apparent, when comparing Table 1 to the equivalent table in the 2011 Agreement, that the wage rates for 1 July 2012 were those achieved under the previous 2011 Agreement - that is, they are the starting point wage rates - and the rates for 1 July 2013 and 1 July 2014 represent increases of 2.7% per annum to be implemented under the 2013 Agreement. Although the 2013 Agreement did not actually take effect until 16 July 2014 (a delay substantially caused by the dispute about its coverage and the s.240 proceedings), the inference to be drawn from Table 1 in the 2013 Agreement, the nominal expiry date of 30 June 2013 in the 2011 Agreement and the nominal expiry date of 30 June 2015 in clause 1.5 of the 2013 Agreement is that the 2013 Agreement was intended to provide for wage rates and wage increases over a two-year period from 1 July 2013 until 30 June 2015.

[31] The weekly rates specified in Table 1 are equal to the hourly rates multiplied by 36. This is consistent with clause 2.1.3 of the 2013 Agreement, which specifies methods of working ordinary hours which are based on an average of 36 ordinary hours per week. It may therefore be concluded that the weekly rates specified in Table 1 are payable for the working of an average of 36 ordinary hours per week.

[32] There are additional amounts and benefits payable under the 2013 Agreement. Table 2 in clause 6.13 specifies shift allowances payable for afternoon, night and early morning shift respectively. Table 3 in clause 6.14 identifies the amounts payable for allowances which are provided for in specified provisions of the 2013 Agreement. Table 4 in clause 6.15 specifies the amounts of the “Essential Energy Electrical Safety Rules Allowance”. Clause 1.24.1 provides that employees covered by the 2013 Agreement will receive a 15% employer contribution to superannuation, with any increases to the Commonwealth Government Superannuation Guarantee during the term of the agreement to be absorbed into this amount.

[33] The 2013 Agreement elsewhere provides for some additional payments for particular classifications of employees. Clause 7.2.1 provides that “Divisional Assistants” are required to be available to work a 10 day fortnight for a minimum of 40 hours per week, and are to be paid an additional superable amount of 11%. And of particular relevance to the underlying dispute in this matter is clause 7.3, which is entitled “Schedule 2 - Managers & Specialists”. Clause 7.3.1 provides:

“7.3.1 Hours of Work & Additional Loading

Employees under this Schedule shall devote their attention, time and skill during normal business hours, and at other times as necessary, to fulfil the requirements of their duties. The nominal hours of work will be 72 hours, to be performed over a 10 day fortnight, worked Monday to Friday, unless otherwise agreed.

Employees shall be remunerated at the appropriate rate of pay for their classification plus any relevant allowance that is required for the employee to perform their role. An additional eleven percent (11%) is paid in addition to the appropriate evaluated rate of pay in return for a forty (40) hour week and working a 10 day fortnight.”

[34] It may be noted that the additional 11% amount payable under clause 7.3.1 for Managers and Specialists who work a 40 hour week correlates closely with the percentage difference between 36 and 40 hours (which is 11.11%) 10. Clause 7.3.2 supplements this provision by providing that the “normal overtime provisions of this Agreement do not apply to employees under this schedule” (that is, Managers and Specialists). The clause goes on to provide that such employees are not intended to work excessive hours, and those who find themselves working excessive hours may, with the agreement of their manager (which is not to be unreasonably withheld), have those excessive hours paid at the “ordinary single rate of pay” or be granted “time-in-lieu for the actual hours worked”.

[35] Clause 1.20 of the 2013 Agreement provides:

“1.20 APPOINTMENTS AND PROGRESSION

Appointments will be made at the base classification rate for each applicable role. Appointments may be made above the entry level for the classification for an applicable role within the appropriate evaluated band subject to approval by executive level management.

Progression within each classification will be as described for each role in Section 8 - Progression Guidelines.

In addition to the progression criteria as mentioned above, all progression will be subject to satisfactory performance determined from performance review.”

[36] Section 8, referred to in clause 1.20 above, is headed “Progression Guidelines”, and in general terms assigns particular classifications to pay points and specifies the appointment and progression arrangements for each classification. Clause 1.18 creates an obligation upon Essential Energy to pay persons in each classification the rate of pay for the assigned pay point. It provides:

“1.18 CLASSIFICATION AND RATES OF PAY

The classification of all roles shall be determined by the major and substantial functions and duties of a position in accordance with the position description.

The corresponding weekly rates of pay in Section 6 Clause 6.12 (Table 1: Essential Energy Rates of Pay) of this Agreement shall apply to employees in their respective classifications. The rates are inclusive of annual leave loading. The rates are inclusive of a loading for work performed in the following circumstances: confined spaces, underground work, working at heights, wet and dirty places, and use of power tools.”

[37] The specific appointment and progression requirements are set out in clause 8.1 as follows:

“Appointments

(i) All appointments will be made at the entry level for the classification established for the position.

(ii) All new appointments should hold a relevant qualification for the position.

(iii) If an appointment is made where the employee does not hold the relevant qualification, they will remain at the entry level until such time as they achieve the required qualification.

(iv) Where an appointment has been made to a position which spans two classification bands the appointment will be made at the entry level of the lower classification band.

(v) Where an appointment has been made without the required qualification, the employee will be provided the opportunity to complete the qualification and be provided with study assistance as per the relevant Essential Energy policy.

(vi) Appointments may be made above the entry level classification for an applicable role within the appropriate evaluated band subject to approval by executive level management.

Progression

(i) Progression within the evaluated classification band shall be based on documented satisfactory performance review on an annual basis.

(ii) Where the evaluated classification of a position spans more than one classification band, progression to the higher classification band will only occur where the employee obtains the higher relevant qualification.

(iii) Employees employed prior to 01 January 2010 who remain in the same position will continue to progress annually to the top of the AQF evaluated classification band whilst occupying that position without the need to obtain the required qualification, subject to satisfactory performance.

(iv) Where Essential Energy initiates structural change and employees are redeployed to an alternate position, they will not be disadvantaged in relation to annual progression to the top of the AQF evaluated classification band of their original role (as at displacement date) subject to satisfactory performance.

(v) Where an employee is required to undertake training relevant to the attainment of AQF qualifications for the appointed position, training will be undertaken in the employees’ own time unless otherwise agreed.

(vi) Where an employee is required to obtain a qualification or relevant training outcome and Essential Energy has not provided the required training or support, the employee will not be disadvantaged with regard to progression except in circumstances of unsatisfactory performance.

(vii) Managers/Team Leaders are required to conduct annual performance reviews with all direct reports and are encouraged to provide six (6) monthly documented reviews with regard to progress. Employees are required to participate in the performance review process.”

[38] The 2013 Agreement thereafter in clause 8.2 sets out the progression arrangements and pay points for various categories of employees. By way of an example which, again, is of particular relevance to the underlying dispute between the parties is clause 8.2.17, which applies to “Managers & Specialists”. It provides as follows:

“8.2.17 MANAGERS & SPECIALISTS

MANAGERS & SPECIALISTS (BAND 1)
Level	Pay Point	Requirements
1	37	By appointment only • Relevant degree qualification or equivalent
2	38	• Progression will be determined by achievement of agreed key result areas/targets as per the terms of an individual performance agreement
3	39	• Progression will be determined by achievement of agreed key result areas/targets as per the terms of an individual performance agreement
4	40	• Progression will be determined by achievement of agreed key result areas/targets as per the terms of an individual performance agreement
Notes: • A loading of 11% is paid in addition to the above pay points in return for a 40 hour week.

MANAGERS & SPECIALISTS (BAND 2)
Level	Pay Point	Requirements
5	41	By appointment only • Relevant degree qualification or equivalent
6	42	• Progression will be determined by achievement of agreed key result areas/targets as per the terms of an individual performance agreement
7	43	• Progression will be determined by achievement of agreed key result areas/targets as per the terms of an individual performance agreement
8	44	• Progression will be determined by achievement of agreed key result areas/targets as per the terms of an individual performance agreement
Notes: • A loading of 11% is paid in addition to the above pay points in return for a 40 hour week.

[39] Apart from the top level of Managers and Specialists, the other categories of employees entitled to pay point 44 in clause 8.2 are the top level of Administration Officer, Technical Officer, Network Operator and Engineering Manager. In relation to the Engineering Manager only, an asterisked note provides “Employees appointed at this level will be employed under Schedule 2 - Managers & Specialists of the Enterprise Agreement”. This has the effect of applying the 40 hour week and the additional 11% loading to them.

[40] There are no definitional provisions in the 2013 Agreement which give further information about the classification descriptors in clause 8.2, a number of which (such as “Managers & Specialists”) are described in somewhat generic terms. Nor is there in relation to clause 8.2.17 any further information about the meaning of the requirement for “Relevant degree qualification or equivalent”.

[41] We consider that the provisions identified above provide contextual assistance to the proper interpretation of clause 1.3. The first sentence of clause 1.3 describes the class of employees to whom the 2013 Agreement applies by reference to the “base weekly rate of pay” which they are paid. It is clear, from the cross-reference to the rates of pay in Table 1, that the base weekly rate of pay referred to is the weekly rate of pay referred to for pay point 44 in Table 1. That rate is, at the current time, $2,589.75. That this is a rate payable for base hours of an average of 36 hours per week is demonstrated by, first, the specified hourly rates in Table 1 (being the weekly rate divided by 36); second, by the fact that the basic working hours obligation for which these weekly rates are payable is an average of 36 per week; and, third, by the fact that provision is made for additional wage payments (to Divisional Assistants, Managers and Supervisors, and Engineering Managers) where a 40 hour week is required to be worked.

[42] There is no textual support in the 2013 Agreement for the proposition that clause 1.3 operates by reference to an employee’s total remuneration. Clause 1.3 specifically refers to the base weekly rate of pay, not total remuneration, and nowhere in the 2013 Agreement, apart from the reference in clause 1.3 itself to “Total Remuneration Package (TRP) contracts” for employees not covered by the 2013 Agreement, is there reference to the concept of total remuneration. In the hearing at first instance and on appeal, total remuneration figures for employees on pay point 44 were referred to by the unions as representing the cut-off point for the coverage of the 2013 Agreement, but those figures do not appear in the 2013 Agreement; they are an external calculation of the specified separate remuneration elements for Managers and Specialists and Engineering Managers on pay point 44. Further, there is no consistent total remuneration amount calculable for employees at pay point 44, since Managers and Specialists and Engineering Managers at that pay point receive the additional 11% loading for working a 40 hour week, but Administration Officers, Technical Officers and Network Operators at the same pay point do not. The lack of a consistent total remuneration amount for employees at pay point 44 confirms that total remuneration was not the discriminator of coverage. Therefore, no interpretation alternative to the plain meaning of clause 1.3 is discernible in the text of the 2013 Agreement.

[43] The prior industrial history does not assist in discerning any alternative interpretation. The current Essential Energy business was formerly a part of the Country Energy business before the retail arm and brand name of the Country Energy business was privatised in 2011. Country Energy was formed in 2001 from a number of separate State-owned electricity businesses. The first industrial instrument applicable to it was the Country Energy Enterprise Award 2001, an award of the Industrial Relations Commission of New South Wales (NSW Commission). Clause 1(i) of that award provided that it applied to the classifications set out in the award. However, clause 1(ii) provided that “for the avoidance of doubt” the award did not apply to any employee within a specified classification if the employee “is receiving a Total Remuneration Package which exceeds $80,500 per annum”, with “Total Remuneration Package” being defined to mean “base salary plus superannuation”. Clause 1(iii) then provided that any employee in a professional classification whose pay rate was Professional Grade 3 or above who was not employed on an “individual employment agreement” would, notwithstanding clause 1(ii), “continue to have their terms and conditions of employment prescribed by the Award”. Table 2 of the Award specified weekly rates of pay for particular classifications. The classification with the highest weekly pay rate was the Professional Grade 3. This award therefore limited coverage in a dual way: firstly by reference to the classifications set out in the award, but secondly by reference to an overall cap of total remuneration subject to an exception pertaining to professional employees not on individual employment contracts.

[44] The position as to coverage changed in the next award, the Country Energy Enterprise Award 2004 (also an award of the NSW Commission). Clause 1(i) continued to provide that the award applied to employees employed in the classification in the award, but Table 2 of the award did not set out classifications and pay rates as in the previous award; instead it set out pay points (from 1 to 44) with weekly wage rates for each pay point and, in some cases, assigned Australian Qualification Framework (AQF) levels. Clause 1(ii) then provided:

“Existing employees employed in a Professional capacity whose rate of pay exceeds Professional Engineer Grade 8 who is not employed under an individual employment agreement shall continue to have their terms and conditions of employment prescribed by this Award.”

[45] This position remained the same in the subsequent Country Energy Enterprise Award 2005 and Country Energy Enterprise Award 2007,which were also awards of the NSW Commission; and the Country Energy Enterprise Agreement 2009, an enterprise agreement entered into under the Industrial Relations Act 1996 (NSW). These instruments appear to have operated in conjunction with internal business documents which assigned particular classification to pay points. In evidence was a document entitled “Country Energy Agreement: Progression Guidelines” dated 8 December 2009, which, we infer from its contents, was an updated version of a document which had existed for some time. It set out a range of classifications and the pay point and progression criteria for each classification in a manner very similar to clause 8.2 of the 2013 Agreement (and the 2011 Agreement). The classification of Professional Engineer Grade 8 was assigned pay point 44.

[46] Therefore in the 2004, 2005, 2007 and 2009 Country Energy instruments, although coverage was nominally determined by classification, in fact it operated by reference to an upper limit of pay point 44. There was an exception to this, namely for existing Professional Engineers paid above pay point 44 who continued to be covered by the instruments if not already subject to an individual employment contract. We conclude therefore that the concept of total remuneration as a discriminator of coverage was abandoned after the 2001 Award, and that thereafter coverage was effectively limited to the base weekly wage rate for pay point 44, subject to a grandparenting provision applying to Professional Engineers not on individual contracts and paid above pay point 44.

[47] The Country Energy Agreement: Progression Guidelines did not include Managers and Specialists. They were covered by separate enterprise agreements, the Country Energy Managers & Specialists Enterprise Agreement 2005 and subsequently the Country Energy Managers and Specialists Enterprise Agreement 2009. The latter of these two agreements covered “Employees who are covered by the Country Energy Award 2007, and successor instruments, and whose evaluated range falls within the following classification spread may be offered access to this Agreement where it is agreed between the parties to the Agreement that such an offer is warranted”. The “evaluated range” set out immediately thereafter refers to classification levels which, when read with the “Country Energy Agreement: Progression Guidelines”, align with pay points up to a maximum of 44. A significant feature of the Country Energy Managers and Specialists Enterprise Agreement 2009 is that it makes provision for managers and specialists covered by it to work a 40 hour week in return for an additional 11% loading.

[48] In addition to the Country Energy Managers and Specialists Enterprise Agreement 2009 a number of other occupation-specific groups including Personal and Executive Assistants and Human Resources Advisers were covered by separate enterprise agreements.

[49] When the terms of these earlier instruments we have referred to are compared to those of the 2011 Agreement, the intended coverage of the 2011 Agreement, and the successor 2013 Agreement, is clear. The 2011 Agreement, although it nominally no longer referred to coverage by reference to classifications, continued to operate on the basis that it covered employees paid a base weekly wage up to pay point 44. It did however exclude the previous grandparenting provision applicable to Professional Engineers paid above pay point 44. It also drew together conditions that were covered in a number of previous instruments and documents, including the Country Energy Agreement: Progression Guidelines and the Country Energy Managers and Specialists Enterprise Agreement 2009, into a single industrial instrument. In doing so, it established a clean limit of coverage at the base weekly wage rate of pay point 44, which except for the removal of the grandparenting provision was completely consistent with the position as to coverage which had operated since the Country Energy Enterprise Award 2004.

[50] The plain meaning of clause 1.3 is therefore confirmed by the industrial history.

[51] We have earlier referred to the unions’ submission that an interpretation of clause 1.3 consistent with its plain meaning cannot be correct because it leads to an anomalous outcome, namely that an employee whose total remuneration is below that of an employee covered by the 2013 Agreement may be placed outside the coverage of that agreement and engaged on an individual contract simply by increasing the employee’s weekly wage to a level slightly above the base weekly wage rate for pay point 44 prescribed in Table 1. We do not accept this submission, for two reasons.

[52] The first, as earlier stated, is that the base weekly pay rate at pay point 44 which serves as the limit of coverage of the 2013 Agreement is for the working of an average 36 ordinary hours per week. In relation to an employee required by Essential Energy to work a 40 hour week, it cannot be the case, as the unions suggested, that simply by paying a few dollars per week more than the current $2,589.75 weekly rate for pay point 44, the person thereby falls outside of the coverage of the 2013 Agreement. That person would clearly not be receiving, for the working of 36 hours per week, a base weekly pay rate in excess of pay point 44. In the case of Managers, Specialists and Engineering Managers, who under the 2013 Agreement are required to work a 40 hour week, the additional loading of 11% to them is, as earlier stated, roughly equal to the payment to them of an additional four hours at the hourly rate for pay point 44 prescribed in Table 1. That approach ensures that such employees, although working a 40 hour week, properly receive the base weekly wage for an average 36 hour week prescribed by Table 1. We do not consider that an employee required to work a 40 hour week would be receiving more than the base weekly rate for pay point 44 unless that employee’s hourly rate, multiplied by 36, exceeded that base weekly rate. Any other approach would fail to give proper effect to the fact that the coverage line in clause 1.3 is drawn by reference to a base weekly wage that is payable for an average 36 hour week.

[53] The second reason is that we do not consider that the 2013 Agreement contemplates persons in classifications covered by that agreement being moved outside its coverage by an alteration to their pay arrangements. Clause 1.3 expressly sets the limit of coverage of the 2013 Agreement at pay point 44, but equally clauses 1.18 and 8.2 expressly require that employees in the identified classifications be paid at specified pay points which are up to but not in excess of pay point 44. The effect of these provisions, read together, is clear: a coverage line at pay point 44 was drawn on the basis that any employees in the classifications in clause 8.2 were to be paid at pay point 44 or below, and were thus covered by the 2013 Agreement and entitled to its benefits. For example, clause 8.2.6 expressly refers to a Network Operator Level 8, who performs a Team Leader/Coordinator role, being paid at pay point 44. The clause, when read with clause 1.3, evinces an intention for the Network Operator Level 8 to be covered by the 2013 Agreement and to be entitled to its benefits, including 15% superannuation contributions. It would do violence to that intention if Essential Energy, by the expedient of the payment of a small amount in addition to the base weekly wage rate for pay point 44, could move a person properly classified as a Network Operator Level 8 and performing the work of that role out of the coverage of the 2013 Agreement and thus disentitle that person to the 5.5% superannuation contribution benefit additional to the current statutory superannuation contribution requirement of 9.5% for which the 2013 Agreement provides. The provisions of the 2013 Agreement we have identified, including in particular clause 1.18, do not contemplate this occurring or otherwise permit this to occur. Such a scenario would therefore be, we consider, a breach of the 2013 Agreement.

Conclusion

[54] We order as follows:

(1) Permission to appeal is granted.

(2) The appeal is upheld.

(3) The Decision is quashed.

[55] On the re-hearing of the matter, we interpret the coverage provisions of the 2011 Agreement and the 2013 Agreement in accordance with our earlier reasons for decision. It is presently unclear to us whether this interpretation will resolve to finality the disputes between the parties and whether any further orders need to be made. Therefore we grant liberty to apply to any party which considers that the exercise of further dispute resolution functions by the Commission is required.

VICE PRESIDENT

Appearances:

R. Kenzie QC and Y. Shariff of counsel, for the appellant.

I. Taylor SC and L. Doust of counsel, for the respondent unions.

Hearing details:

2015.

Sydney:

17 February.

Final written submissions:

14 April 2015.

 1  [2014] FWC 5601

 2  [2014] FWC 3065

 3   Ibid at [78], [84]

 4   Decision at [10]-[12]

 5   [2013] FCAFC 137 at [11]

 6  [2014] FWCFB 7447 at [41]

 7  [2013] FWCFB 2814

 8   Seamen’s Union of Australia v Adelaide Steamship Co Ltd (1976) 46 FLR 444 at 446; City of Wanneroo v Holmes (1989) 30 IR 362 at 378; AWU v Pasminco Australia Ltd (2003) 131 IR 1 at [39]

 9   (1982) 149 CLR 337 at 352

 10   The same conclusion applies in relation to the 11% additional payment to Divisional Assistants under cl.7.2.1.

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