Glen Cameron Nominees Pty Ltd (t/a Glen Cameron Trucking) v Transport Workers' Union of Australia - [2018] FWCFB 3744

[2018] FWCFB 3744

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009

s.604—Appeal of Decision

Glen Cameron Nominees Pty Ltd (t/a Glen Cameron Trucking)

Transport Workers’ Union of Australia

(C2017/1406)

VICE PRESIDENT CATANZARITI

DEPUTY PRESIDENT CLANCY
COMMISSIONER JOHNS

SYDNEY, 25 JUNE 2018

Appeal against decision [2017] FWC 911 of Deputy President Bull at Perth on 28 February 2017 in matter number C2016/5290.

Introduction

This is a decision about whether employees of Glen Cameron Nominees (trading as Glen Cameron Trucking) (Glen Cameron) who perform shift work are entitled to be paid a meal break when working afternoon and/or night shifts. The matter has been the subject of a number of decisions by both the Fair Work Commission (Commission) [1] and the Federal Court of Australia (FCA).[2] The Transport Workers’ Union of Australian (TWU) is the Respondent to the appeal which was reheard by this Full Bench on 22 March 2018.

The matter arises out of an appeal from a decision of Deputy President Bull (the Decision)[3] which dealt with a dispute arising under the Glen Cameron Nominees Pty Ltd NSW EBA 2015 - 2019 (Agreement). By operation of clause 2 of the Agreement,
“… all the terms of the [Road Transport and Distribution] Award, as amended from time to time, shall apply to employees covered by the Agreement provided however that where a clause of this Agreement is inconsistent with a clause of the Award in part or in whole, the clause in the Agreement shall prevail to the complete exclusion of the Award clause.”

That is to say, the Award is called-up into the Agreement. It was common ground between the parties that the Award is incorporated into the Agreement (to the extent that it is not inconsistent with the Agreement). Consequently, where a term of the Award applies, it does so as a term of the Agreement (not as a term of the Award). For this reason, in this decision, we refer to the Award as the “Incorporated Award”.

The Deputy President decided that,
“[59] … [because the] Agreement is silent on the engagement of shift workers, it is entirely appropriate to examine the Award which applies as per clause 2 of the Agreement to ascertain the terms under which shift workers may be engaged. The Respondent acknowledges that it engages shift workers as per the definition under the Award. This at least is applied by the Respondent in respect of the Award shift penalties. While the Agreement provides for employees to receive an unpaid 30 minute meal breach, I do not see this as being inconsistent with the specific provisions for shift workers to receive a paid meal breach under the Award.

[60] As a matter of legal interpretation, specific provisions will ordinarily override those which are general in nature. A common sense reading of the Agreement leads to the conclusion that the provisions regarding the engagement of shift workers have been left to those which exist in the Award, which is incorporated into the Agreement.

[61] The ability to engage shift workers derives from the shift work provisions of the Award; it is therefore highly artificial to rely on the general meal break provision under the Agreement as being inconsistent with the specific meal break provisions under the Award.

[62] There is nothing in the Agreement that suggests that the meal break provisions were to be exhaustive or exclusive provisions applying to both shift and non-shift workers, other than the reference to ‘an employee’ which the respondent submitted should be interpreted as an intention to exclude the specific shift work meal break provisions of the Award.

[63] This, in my view, is to take what is often criticised as a narrow and pedantic approach to interpretation.

[64] The Union have sought a determination stating that the provisions of clause 24 Shiftwork of the Award apply to employees of the respondent performing shift work and covered by the Agreement. A determination shall issue in the terms sought by the Union.”

An order[4] was issued to the following effect,
“[1] Further to the decision issued on 28 February 2017 (2017 FWC 911), the Commission determines that the provisions of clause 24, Shiftwork, of the Road Transport and Distribution Award 2010 … in respect of meal breaks apply to employees of Glen Cameron Nominees Pty Ltd, who perform shift work and are covered by the Glen Cameron Nominees Pty Ltd NSW EBA 2015-2019.”

Glen Cameron appealed the decision and order.

The Agreement and the Incorporated Award

The Agreement was approved on 6 January 2016 and commenced operation on 13 January 2016, with a nominal expiry date of 31 July 2019.[5]

The Agreement applies to,
“all [Glen Cameron] employees … which fall within the jurisdiction of the Road Transport and Distribution Award 2010 (the “Award”) with the exception of employees covered by, the Glen Cameron Huntingwood Warehouse Employees Enterprise Agreement 2009 to 2012.”[6]

The TWU is covered by the Agreement.[7]

The following clause in the Agreement is relevant:
“18.1 Meal Break
An employee shall be allowed a 30 minute unpaid meal break, for every five hours of work performed. The employee shall use their discretion to take the meal break but it may not be taken within the first 4 hours of commencing work and shall not be taken later than 5 hours after commencing work. The meal break shall be taken as directed by the Supervisor, only where it would otherwise cause a disruption to the on-going performance of work.” (Emphasis added).

As set out above, clause 2 of the Agreement incorporates the terms of the Road Transport and Distribution Award 2010 (RTD Award) into the Agreement. Relevantly for present purposes, the Incorporated Award also provides.
“24.9 Meal breaks
All shiftworkers while working on day, afternoon or night shift will be entitled to a paid meal break of 20 minutes. An employee must not be required to work more than five hours without a meal break.” (Emphasis added).

In circumstances where the:
a)Agreement provides “an employee” with “a 30 minutes unpaid meal break”, and
b)Incorporated Award provides “all shiftworkers” with an entitlement “to a paid meal break of 20 minutes”,
it is necessary to reconcile the operation of clause 18.1 in the Agreement with clause 24.9 in the Incorporated Award in order to determine the dispute.

His Honour Justice Perram observed,
“The terms of the Agreement relating to the issue of whether shift workers should have paid meal breaks were not especially clear or consistent and their interpretation was not free from difficulty.”[8]

By reason of the operation of clause 2 of the Agreement, if clause 18.1 of the Agreement is inconsistent with clause 24.9 of the Incorporated Award (in part or in whole) then clause 18.1 in the Agreement prevails to the complete exclusion of clause 24.9.

The Proceedings at First Instance

Proceedings at first instance were initiated by an application (C2016/5290) filed by the TWU pursuant to s.739 of the Fair Work Act 2009 (Cth) (FW Act) for the Commission to deal with a dispute arising under the Agreement. As mentioned earlier, the dispute concerned the entitlement of shift workers to a meal allowance. It was common ground that the Commission had jurisdiction to hear and determine the dispute.

The TWU contended that,

a)The Respondent employs a number of full time staff, whose hours are defined under clauses 8.1 (Full-Time) and 14 (Ordinary House of Work) of the Agreement.
b)The Agreement provides for the arrangement of these hours under clause 15 while clause 18 provides for meal and rest breaks.

c)The Respondent employs a number of staff who do not meet the definition of full-time in the Agreement because they are engaged outside the ordinary house of work defined in the Agreement defined under clause 14 of the Agreement (between 4.00am and 7.00pm).

d)The Agreement does not provide a framework or definition regarding these employees.

e)The Award is incorporated into the Agreement to the exclusion of any inconsistency under clause 2 of the Agreement. There is no inconsistency in the Agreement which would override the shiftwork clauses in the Award.

f)Clarification must be found in the Award.

g)The employees meet the shiftwork requirements under clause 24 of the Award. Additionally, the Respondent pays the employees the allowance located in clause 24.3 of the Award for hours worked outside the ordinary hours of the Agreement.

h)Therefore, the Respondent is not meeting its obligations under the Award and should:
i.pay the paid meal break entitlement located in 24.9 of the Award,
ii.honour all payments that have not been paid in relation to this entitlement since the Agreement commenced, and
iii.withdraw its demand to be reimbursed for the payment of this entitlement in the past.

The TWU called the following witnesses:
a) Liam Searle[9]
b) John Cini.[10]

Mr Searle’s evidence was to the effect that,
a)He has been employed by the Respondent as a PM Shunt Driver since 3 September 2013, normally working the hours of 2:00pm to 2:00am.

b)He received the shift allowance for the “afternoon shift”.

c)He had recently learned that shift workers employed at the Respondent’s St Mary’s site were receiving a paid meal break, an entitlement he had never received.

d)He raised the issue with the Respondent, who stated that they are not eligible for this entitlement.

e)The employees at St Mary’s are no longer receiving the paid meal break.

f)The issue had not been raised until after the Agreement had been voted on.[11]

Mr Cini’s evidence was to the effect that,
a)He is employed by the Respondent as a forklift operator since 16 August 2015, normally working the hours of 8:00pm to 4:00am on Sunday through to Thursday at the Respondent’s St Mary’s site.

b)He received the shift allowance for the “night shift”, being split 100% loading for working Sunday and 30% Monday to Thursday.

c)The issue of paid meal breaks were first raised in October 2015, which resulted in a decision by the Respondent that the employees were entitled to this payment.

d)On or around April 2016 the employees received back pay for this entitlement from August 2015 to April 2016, and were thereafter paid the entitlement.

e)The payment of the paid meal break continued until August 2016. Around the same time the Company’s representative, Glen Rohan held and meeting and stated that it would attempt to recoup all of the payments made for this entitlement.

f)The issue had not been raised during the Agreement’s negotiations when it was being made.[12]

Glen Cameron contended that,
a)Clause 2 of the Agreement incorporates the Award into the Agreement provided that the Agreement will prevail in any instances of inconsistency between the instruments.

b)The Respondent does engage employees which meet the definition of shiftwork in clause 24.1(d) of the Award.

c)Clause 18.1 of the Agreement provides for a 30 minute unpaid meal break for every five hours of work performed. The Agreement does not further contemplate meal breaks and makes no allowance for paid meal breaks for any employees.

d)Clause 24.9 of the Award provides that all shiftworkers be paid a 20 minute meal break while working day, afternoon or night shifts.

e)The predecessor agreement contained the same 30 minute unpaid meal break as the current Agreement.

f)Citing French J in City of Wanneroo v Australian Municipal, Administrative, Clerical and Services Union (2006) 153 IR 426 (Wanneroo) and Madgwick J in Kucks v CSR Ltd (1996) 66 IR 182 (Kucks), the interpretation of “employee” in Clause 18.1 of the Agreement is to take an ordinary and natural meaning broad enough to encompass all categories of people engaged in a contract of service, including shiftworkers.

g)The Agreement should be interpreted “holistically”, giving effect to the purpose of the document.

h)The Agreement does not make any specific provision in relation to employees engaged on shiftwork, rather it is concerned with the employees wholly.

i)With reference to the principles of interpretation from The Australasian Meat Industry Employees Union v Golden Cockerel Pty Ltd[2014] FWCFB 7447 (Golden Cockerel), that clause 18.1 of the Agreement excludes in its entirety, clause 24.9 of the Award by way of inconsistency pursuant to Clause 2 of the Agreement. Specifically, that by expressly providing for unpaid meal breaks for “employees”, there is an intention to exclude the operation of clause 24.9 of the Award by operation of clause 2 of the Agreement.

j)Further in relation to 18.1 of the Agreement that the Form 17 lodged with the Commission by the Respondent after the Agreement, and, the fact that the Respondent mistakenly paid the entitlement previously is not admissible in resolving any ambiguity, as these events occurred after the Agreement was made.

Glen Cameron called its Group Human Resources and Industrial Relations Manager, Glenn Rohan to give evidence.[13]

Mr Rohan’s evidence was to the effect that,
a)He has been employed by the Respondent as its Group Human Resources and Industrial Relations Manager for ten years and his responsibilities include negotiating agreements.

b)The Agreement was made between 17 and 24 November 2015 after approximately 5 months of negotiations which included 7 meetings.

c)Under the predecessor agreement, employees engaged on shift work received a 30 minute unpaid meal break.

d)On or about 15 March 2016, the Respondent incorrectly interpreted the terms of the Agreement as requiring it to provide employees who perform shift work with a 20 minute paid break. Effective from 29 February 2016, the Respondent commenced providing this entitlement.

e)On or about 15 June 2016, he reviewed the Respondent’s practices and formed the view that it was not required to make this payment.

f)On 27 June 2016, he sent a letter on behalf of the Respondent to the TWU and employees advising them of this error and giving the employees one month notice that the Respondent would cease making this payment.

As mentioned earlier, the Deputy President decided that the general provisions of the Agreement (dealing with all employees) yielded to the special terms of the Incorporated Award (dealing specifically with shift workers) such that shift workers were entitled to a paid meal break. This meant that the Agreement did provide an entitlement to a meal allowance for shift workers and he issued a determination to that effect.

In his decision the Deputy President:
a)characterised the dispute as we have set out earlier,[14]

b)set out the relevant clauses in the Agreement and the Incorporated Award,[15]

c)established the jurisdiction of the Commission to deal with the dispute,[16]

d)observed that,

“The Agreement makes no specific reference to shift work and the Union argue that pursuant to clause 2 of the Agreement, the shift work provisions of the Award operate including its meal break provision.”[17]

e)considered the submissions of and evidence from the TWU,[18]

f)observed that Glen Cameron,[19]

“Argues that in the absence of a provision in the Agreement providing for a paid meal break when working shift work, no such entitlement applies or is envisaged under the Agreement.”

g)considered the submissions of and evidence from Glen Cameron,[20]

h)then turned to the interpretation of the Agreement, considered a number of authorities[21] and set out the relevant principles, by reference to the Full Bench decision in Australian Meat Industry Employees Union v Golden Cockerel Pty Ltd.[22]

i)in accordance with Golden Cockerel, first considered whether the Agreement had a plain meaning or contained an ambiguity. He observed,

“… the interpretation of an industrial instrument begins with a consideration of the natural and ordinary meaning of the words in question. The words are to be read as a whole and in context. Ambiguity and uncertainty, if any, may be resolved by a consideration of the history and subject matter of the agreement.”[23]

j)found no ambiguity or uncertainty,[24] finding that,

“[48] … In interpreting the Agreement, the relevant clauses are capable of being given their plain meaning, thus there is no need to look to any surrounding circumstances to contradict the plain meaning of the relevant clauses.
[49] The dispute over the construction of the Agreement can be resolved by considering the text of the Agreement viewed as a whole; the language of the Agreement having regard to its context and purpose and the location in the Agreement where the dispute clause exists.
[50] … the Agreement does not contain any specific provisions relating to the performance of shift work outside the ordinary hours of work provided for in clause 14 of the Agreement. As such the Award must be relied upon to allow shift work to occur….”

k)further noted that,
“[53] …The High Court has generally formulated three approaches to ascertaining the existence of inconsistency. Inconsistency is present where it is impossible to obey both laws, where one law purports to confer a legal right which the other law purports to take away, or where one law evinces an intention to cover the field, that is, it shall be the law on the topic where or not there is a direct contradiction, this can be express or implied.”

l)observed where the Agreement and the Incorporated Award are consistent.[25]

m)rejected that the unpaid meal break provisions in the Agreement applied to shift workers,[26] because,

“[56] .… the Agreement does not deal with the engagement of shift workers and their separate entitlements e.g. shift penalties, whereas the Award make separate provision for shift workers and their various entitlements.”

n)found no inconsistency with the Incorporated Award providing for a paid meal break for shift workers.[27]

The Appeal

As we have observed previously an appeal of a decision made under the Agreement is as of right.[28] Permission to appeal need not first be obtained.

It is common ground that the decision subject to appeal relates to the proper construction of the Agreement and accordingly the issue for us is whether the interpretation adopted by the Deputy President was correct.[29] If we determine that the interpretation of the relationship between the Agreement and the Incorporated Award is different to that of the Deputy President it necessarily follows that the Deputy President erred in reaching his conclusion.[30]

On 22 March 2018 Glen Cameron was given leave to file an Amended Notice of Appeal. Before us Mr Baroni further refined the grounds of appeal. Leave was granted to do so.[31]

In the final form Glen Cameron advanced the following grounds of appeal:
The Deputy President:
1.erred by misapplying the relevant principles as set out … by the Full Bench … in [Berri] with respect to interpreting industrial instruments.
2.erred in his construction of clause 18.1 of the Agreement.
3.erred in taking into account irrelevant considerations; namely, by having regard to the F17 – Statutory Declaration in Support of the Application for Approval of an Enterprise Agreement and the conduct of the parties after the making of the enterprise agreement.
4.failed to give consideration to relevant evidence going to the intention of the parties prior to the making of the enterprise agreement and had regard to irrelevant evidence after the making of the Agreement.
5.adopted an erroneous approach in determining whether an inconsistency arose between the Agreement and the incorporated Award which approach led the Deputy President into error by finding that there was no inconsistency.

Principles of interpretation

The principles relevant to the task of construing an enterprise agreement were summarised in Golden Cockerel[32] as follows:
‘1. The [Acts Interpretation] Act does not apply to the construction of an enterprise agreement made under the [FW] 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.”

At first instance the parties addressed the principles in Golden Cockerel.

In 2017 a Full Bench of the Commission modified the above summary in Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (known as the Australian Manufacturers Workers Union (AMWU) v Berri Pty Ltd (Berri).[33] The Full Bench made the following observations:
“[41] The construction of an enterprise agreement, like that of a statute or a contract, begins with a consideration of the ordinary meaning of the relevant words. The disputed words must be construed in the context of the agreement as a whole. The process of interpretative analysis focusses upon the language of the agreement itself. In Amcor Limited v CFMEU,[34] Gleeson CJ and McHugh J described the process in the following terms: ‘[t]he resolution of the issue turns upon the language of the particular agreement, understood in the light of its industrial context and purpose ...’.[35] Or, as Kirby J put it in the same case, ‘[i]nterpretation is always a text-based activity’.[36]
….
[44] There is considerable force in the Appellant’s contention that, as a general principle, all words in an enterprise agreement must prima facie be given some meaning and effect. It would seem to follow that the inclusion of a laundry allowance in Appendix 3 of the 2014 Agreement should not be regarded as superfluous or insignificant. Such an approach accords with the principles of statutory construction,[37] and, as a general proposition, the principles developed in the general law in the context of the interpretation of statutes are applicable to the interpretation of enterprise agreements. As the Full Bench observed in Paper Australia Pty Ltd t/a Australian Paper v Australian Manufacturing Workers’ Union:[38]
‘Australian Paper made the submission that no principle of statutory construction has any application to the interpretation of enterprise agreements, and relied upon the proposition stated in Golden Cockerel that the Acts Interpretation Act 1901 (Cth) does not apply to the construction of enterprise agreements in support of that submission. The submission is rejected. It does not follow from the fact that enterprise agreements are not instruments to which the Acts Interpretation Act applies that modes of textual analysis developed in the general law in the context of the interpretation of statutes are incapable of application to enterprise agreements. While it undoubtedly remains necessary in interpreting a particular instrument to pay attention to the peculiar characteristics of that instrument, it is equally the case that there has been a convergence in the approach taken to the interpretation of statutes, agreements and other types of instruments - in particular, in the emphasis on the objective ascertainment of the instrument’s purpose and the move from textual to contextual interpretation. Additionally, many of the grammatical aides to the interpretation of statutes are equally applicable to other types of instruments. In the High Court decision in Royal Botanic Gardens and Domain Trust v South Sydney City Council, Kirby J said “... it would be indefensible for this Court, without good reason, to adopt a different approach in the ascertainment of the meaning of contested language in a contract from the approach observed in respect of legislation”. We therefore do not consider that Golden Cockerel should be taken as an exhaustive statement of the means by which the text of an enterprise agreement might be construed.’ (references omitted)
….

[46] There is a long line of authority in support of the proposition that a ‘narrow or pedantic’ approach to the interpretation of industrial instruments (such as enterprise agreements) is to be avoided,[39] and that ‘fractured and illogical prose may be met by a generous and liberal approach to construction’.[40] A consequence of such an approach may be that some principles of statutory construction have less force in the context of construing an enterprise agreement. For example, in Shop, Distributive and Allied Employees’ Association v Woolworths Limited,[41] Gray ACJ held that the presumption that a word used in one provision of a statute has the same meaning when it is used in another provision of the same statute, applied with less force in the context of an enterprise agreement:
‘Typically, such agreements are the product of hard negotiation, in which wording of particular clauses is often agreed without reference to other provisions of the same document. Provisions are commonly transmitted from one agreement to the next in a series, without regard to whether their terminology sits well with the words used in newly adopted terms. The use of other agreements, and awards, as precedents can often result in the borrowing of provisions, again without regard to whether the words used in them are consistent with the rest of the agreement under consideration. For these and other reasons, consistency will often be absent. It is easy to see that the same word can be used in different provisions with different meanings.’[42]

[47] We acknowledge that the fact that the instrument being construed is an enterprise agreement is itself an important contextual consideration. But it is also relevant that the instrument being interpreted in these proceedings is an enterprise agreement made pursuant to Part 2-4 of the FW Act and, as observed by White J in National Tertiary Education Union v La Trobe University,[43] it may be inferred that such agreements are intended to establish binding obligations:
‘The manner of making such agreements is subject to detailed prescription and their operation is contingent upon approval by the Fair Work Commission, the obtaining of which is itself a matter of detailed prescription. In my opinion, it is natural to suppose that parties engaging in this detailed process intend that the result should be a binding and enforceable agreement. To my mind, that is an important matter of context when approaching the construction of [the disputed clause in the agreement]’.[44]

[48] Of course his Honour’s observation does not mean that an enterprise agreement may not include ‘matters which are in the nature of statements of aspiration or commitment and not themselves intended to be enforceable obligations or entitlements’[45] – so much is clear from Reeves v MaxiTRANS Australia Pty Ltd.[46] The fact that the 2014 Agreement is an enterprise agreement made pursuant to Part 2-4 of the FW Act is also relevant to the weight to be given to evidence of prior negotiations, a point to which we shall return shortly.
….
[60] It seems to us that there is an ambiguity in the 2014 Agreement regarding the laundry allowance referred to in Attachment 3. In particular, it is unclear in what circumstances the amount specified is to be paid and to whom. The frequency with which any such payment is to be made is also unclear.

[61] Having identified ambiguity it is permissible to consider evidence of the surrounding circumstances as an aid to the task of interpreting the agreement. As Mason J observed in Codelfa Construction Pty Ltd v State Rail Authority (NSW) (Codelfa):[47]
‘… evidence of surrounding circumstances is admissible to assist in the interpretation of the contract if the language is ambiguous or susceptible of more than one meaning. But it is not admissible to contradict the language of the contract where it has a plain meaning.’[48]

[62] The admissibility of evidence of the surrounding circumstances is limited to evidence tending to establish objective background facts which were known to both parties and the subject matter of the contract. Evidence of such objective facts is to be distinguished from evidence of the subjective intentions of the parties, such as statements and actions of the parties which are reflective of their actual intentions and expectations. As Mason J observed in Codelfa:
‘… when the issue is which of two or more possible meanings is to be given to a contractual provision we look, not to the actual intentions, aspirations or expectations of the parties before or at the time of contract, except insofar as they are expressed in the contract, but to the objective framework of facts within which the contract came into existence, and to the parties’ presumed intention in this setting.’[49]

[63] As noted in Golden Cockerel, evidence of relevance to the objective framework of facts will include:
i.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;
ii.notorious facts of which knowledge is to be presumed; and
iii.evidence of matters in common contemplation and constituting a common assumption.

[64] As to category (i), evidence of prior negotiations will be admissible – but only for a defined purpose. As Mason J observed in Codelfa:
‘Generally speaking facts existing when the contract was made will not be receivable as part of the surrounding circumstances as an aid to construction, unless they were known to both parties, although, as we have seen, if the facts are notorious knowledge of them will be presumed.

It is here that a difficulty arises with respect to the evidence of prior negotiations. Obviously the prior negotiations will tend to establish objective background facts which were known to both parties and the subject matter of the contract. To the extent to which they have this tendency they are admissible. But in so far as they consist of statements and actions of the parties which are reflective of their actual intentions and expectations they are not receivable. The point is that such statements and actions reveal the terms of the contract which the parties intended or hoped to make. They are superseded by, and merged in, the contract itself. The object of the parole evidence rule is to exclude them, the prior oral agreement of the parties being inadmissible in aid of construction, though admissible in an action for rectification.’[50]

[65] 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 rewrite the provision in order to give effect to an externally derived conception of what the parties’ intention or purpose was. So much is clear from the oft-quoted statement of Madgwick J in Kucks v CSR Limited:[51]
‘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.’

….

[88] The diversity of interests involved in the negotiation and making of enterprise agreements warrants the adoption of a cautious approach to the admission and reliance upon evidence of positions advanced during the negotiation process. As Rares J recently observed, in Australian International Air Pilots Association v Qantas Airways Limited:[52]
‘Substantially, the Act provided that the agreement was a tripartite document between a body of employees, a corporation with numerous officers and an industrial association. The involvement of so many individuals in the formation of the agreement re-emphasises the importance of approaching the construction of that document in accordance with the principle of objectivity. It is important, in doing so, to be cautious and bear firmly in mind the fact that the agreement was formed by a diversity of persons who had sought to protect their differing interests by various formulations of words in it. Those disparate intentions cannot be determinative of the proper construction to be given to the words chosen. In Health Services Union v Ballarat Health Services [2011] FCA 1256 at [79], Gray J said:

“In the days when an award might be negotiated between a union and an employer, and made by consent, the existence of a common understanding between the union and the employer as to the meaning of terms might have had some role to play in their construction. Whatever were the terms of such an agreement, and whatever their meaning was, those terms were imposed upon the employees who became bound by the award. In the current era, most industrial instruments are required to be put to a vote of the employees whose work will be covered by them, before they can be certified or approved so as to become enforceable by statute. The union and the employer who negotiated the terms might have had a common understanding of the meaning of them, but that understanding might not have been shared by all or some of the employees who voted for the operation of the agreement. They may have been entirely ignorant of the common understanding. In those circumstances, the occasions on which it can be said that a party to an agreement who entered into it on a common understanding should not be allowed to resile from that understanding will be rarer than they have been in the past.”‘

….

[101] The admissibility of the post-contractual conduct as an aid to the construction of a contract is a somewhat vexed issue, in respect of which no clear line of authority has emerged.

[102] Some early High Court authority permitted the admissibility of post-contractual conduct as an aid to construction.[53] But obiter in more recent High Court judgements tends to support the view that such evidence is inadmissible.[54]

[103] Further, in Agricultural and Rural Finance Pty Ltd v Gardiner,[55] a majority of the High Court adopted the ‘general principle’ that ‘it is not legitimate to use as an aid to the construction of [a] contract anything which the parties said or did after it was made’. Of course, the expression ‘general principle’ is itself somewhat ambiguous, as Campbell JA observed in Franklins Pty Ltd v Metcash Trading Ltd (Metcash):[56]

‘It might mean that it is a principle that applies in all cases, or that it is a principle that usually applies, though perhaps being subject to exceptions.’

[104] As Allsop P observed in Metcash (at [6]), ‘much ink has been spilt over the last 30 years on this topic’. There is a daunting array of intermediate appellate court judgements on the admissibility of post contractual conduct,[57] but no clear consensus appears to have emerged.

[105] The judgement of Santow J in Spunwill Pty Ltd v BAB Pty Ltd[58] gave detailed consideration to whether subsequent conduct may be used as an aid to construction. Spunwill is a significant first instance judgement that has been considered, and cited with approval, in some of the intermediate appellate court judgements which have dealt with this issue. After considering the relevant authorities, Santow J concluded that the use of subsequent conduct as an aid to the construction of a contract:
‘… will be legitimate under the objective theory of contract in the limited circumstances where conduct evidences a clear and mutual subjective intention as to what the contract originally meant.’[59]

[106] In the industrial context it has been accepted that, in some circumstances, subsequent conduct may be relevant to the interpretation of an industrial instrument. But, consistent with the view expressed by Santow J in Spunwill, the post-contractual conduct must be such as to found a common understanding – a settled interpretation accepted by the parties.

[107] We also note that in Spunwill[60] Santow J observed that in deciding on the weight to be given to extrinsic evidence of post contractual conduct as part of the surrounding circumstances, it was useful to refer to the following passage from the judgment of Lambert JA in the Canadian case of Re Canadian National Railways and Canadian Pacific Ltd[61]:
‘In the case of evidence of subsequent conduct the evidence is likely to be most cogent where the parties to the agreement are individuals, the acts considered are the acts of both parties, the acts can relate only to the agreement, the acts are intentional and the acts are consistent only with one of the alternative interpretations. Where the parties to the agreement are corporations and the acts are the acts of employees of the corporations, then evidence of subsequent conduct is much less likely to carry weight. In no case is it necessary that weight be given to evidence of subsequent conduct.’”

The Full Bench then modified the summary set out in Golden Cockerel in light of the observations made in the course of our decision:

“[114] The principles relevant to the task of construing a single enterprise agreement may be summarised as follows:

1. The construction of an enterprise agreement, like that of a statute or contract, begins with a consideration of the ordinary meaning of the relevant words. The resolution of a disputed construction of an agreement will turn on the language of the agreement having regard to its context and purpose. Context might appear from:
i.the text of the agreement viewed as a whole;
ii.the disputed provision’s place and arrangement in the agreement;
iii.the legislative context under which the agreement was made and in which it operates.

2. 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.

3. The common intention of the parties is sought to be 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, without regard to the subjective intentions or expectations of the parties.

4. The fact that the instrument being construed is an enterprise agreement made pursuant to Part 2-4 of the FW Act is itself an important contextual consideration. It may be inferred that such agreements are intended to establish binding obligations.

5. The FW Act does not speak in terms of the ‘parties’ to enterprise agreements made pursuant to Part 2-4 agreements, rather it refers to the persons and organisations who are ‘covered by’ such agreements. Relevantly s.172(2)(a) provides that an employer may make an enterprise agreement ‘with the employees who are employed at the time the agreement is made and who will be covered by the agreement’. Section 182(1) provides that an agreement is ‘made’ if the employees to be covered by the agreement ‘have been asked to approve the agreement and a majority of those employees who cast a valid vote approve the agreement’. This is so because an enterprise agreement is ‘made’ when a majority of the employees asked to approve the agreement cast a valid vote to approve the agreement.

6. Enterprise agreements are not instruments to which the Acts Interpretation Act 1901 (Cth) applies, however the modes of textual analysis developed in the general law may assist in the interpretation of enterprise agreements. An overly technical approach to interpretation should be avoided and consequently some general principles of statutory construction may have less force in the context of construing an enterprise agreement.

7. In construing an enterprise agreement it is first necessary to determine whether an agreement has a plain meaning or it is ambiguous or susceptible of more than one meaning.
8. Regard may be had to evidence of surrounding circumstances to assist in determining whether an ambiguity exists.

9. If the agreement has a plain meaning, evidence of the surrounding circumstances will not be admitted to contradict the plain language of the agreement.

10. If the language of the agreement is ambiguous or susceptible of more than one meaning then evidence of the surrounding circumstance will be admissible to aide the interpretation of the agreement.

11. The admissibility of evidence of the surrounding circumstances is limited to evidence tending to establish objective background facts which were known to both parties which inform and the subject matter of the agreement. Evidence of such objective facts is to be distinguished from evidence of the subjective intentions of the parties, such as statements and actions of the parties which are reflective of their actual intentions and expectations.

12. Evidence of objective background facts will include:
(i) 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;
(ii) notorious facts of which knowledge is to be presumed; and
(iii) evidence of matters in common contemplation and constituting a common assumption.

13. The diversity of interests involved in the negotiation and making of enterprise agreements (see point 4 above) warrants the adoption of a cautious approach to the admission and reliance upon the evidence of prior negotiations and the positions advanced during the negotiation process. Evidence as to what the employees covered by the agreement were told (either during the course of the negotiations or pursuant to s.180(5) of the FW Act) may be of more assistance than evidence of the bargaining positions taken by the employer or a bargaining representative during the negotiation of the agreement.

14. 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 rewrite the provision in order to give effect to an externally derived conception of what the parties’ intention or purpose was.

15. In the industrial context it has been accepted that, in some circumstances, subsequent conduct may be relevant to the interpretation of an industrial instrument. But such post-agreement conduct must be such as to show that there has been a meeting of minds, a consensus. Post-agreement conduct which amounts to little more than the absence of a complaint or common inadvertence is insufficient to establish a common understanding.”

We adopt the principles as set out in Berri. Consequently, we must,
a)begin our analysis with a consideration of the ordinary meaning of the words of the relevant clauses in the Agreement and the Incorporated Award,
b)determine whether the Agreement (and the terms of the incorporated by the Award) have a plain meaning,
c)review the text of the Agreement as a whole,
d)not rewrite the Agreement to achieve what might be regarded as a fair or just outcome,
e)(in determining the objective intention of the parties) do so by reference to what a reasonable person would understand by the language used in the Agreement,
f)not adopt an overly technical approach to the interpretation of the Agreement, and
g)not contradict the plain language of the Agreement.

Submissions – Glen Cameron

Before us Glen Cameron contended that,
“… clause 18.1 of the Agreement operated to the exclusion of any incorporated Award provision which was in conflict with a provision of the Agreement by virtue of clause 2 of the Agreement…”

Further, Glen Cameron contended that,
a)“The Award is incorporated into the Agreement only to the extent that it is consistent with a term or terms of the Agreement.
b)Where the terms of the Award are inconsistent with the Agreement (whether in whole or in part) then the clause in the Award is completely excluded.
c)The terms of the Agreement are clear from both the text and the context that employees, including employees engaged on shift work, are entitled to a 30 minute unpaid meal break for every 5 hours of work performed; and
d)Therefore, due to the operation of clause 2 of the Agreement, the terms of clause 24.9 of the Award which are concerned with a 20 minute paid meal break are completely excluded.”

Glen Cameron submitted as follows,

“The Dispute
17.      The dispute application filed by the TWU below concerned the interpretation of:
(a)       Clause 2 of the Agreement;
(b)       Clause 18.1 of the Agreement; and
(c)       Clause 24.9 of the Award.

18. As noted above at paragraph 15, the Award is incorporated and to that extent it forms part of the Agreement and is not a separate document. This is by virtue of section 57 of the FW Act.

19. The TWU allege that employees engaged by the respondent within the coverage of the Agreement on afternoon or night shift were entitled to a paid 20 minute meal break pursuant to clause 24.9 of the Award. The appellant rejected this assertion.
20. Pursuant to clause 21 of the Agreement and section 739 of the FW Act, the TWU made an application to the Commission for this dispute to be resolved by arbitration.

21. Prior to the Agreement, the industrial arrangements in place for the appellant were regulated and governed in NSW by a former enterprise agreement called the Glen Cameron NSW EBA, 2009 to 2012 (the Former Agreement) which was approved by the Commission on 3 December 2009 by Commissioner Lewin.

22. The Former Agreement was subsequently replaced by the Agreement.

23. Clause 25A – Meal Break, of the Former Agreement was in the same terms as clause 18. Further, employees of the Appellant employed at the time the Former Agreement was in operation did not receive a paid meal break nor did the same employees receive a paid meal break once the Agreement was made or once the Agreement was approved by the Commission. This is the evidence of Mr Rohan and remained unchallenged by the TWU.

24. The Former Agreement operated until it was replaced by the Agreement, which was approved on 6 January 2016 and commenced on 13 January 2016.

25. The Agreement was made between 17 and 24 November 2015 when the employees of the appellant voted to approve the Agreement.

Approach to Interpretation

26. The principles, which are to be applied to the task of interpreting an enterprise agreement, are helpfully summarized in Golden Cockerel. The Appellant does not repeat them.

27. The dispute between the parties fundamentally requires the Full Bench to ascertain and give effect to the proper interpretation of the Agreement. The process of interpretation requires focus to be placed “first and foremost” on the language of the Agreements: SDA v Woolworths Ltd. Ultimately, the process of interpretation is directed to ascertaining the meaning of words. The task of determining what meaning words convey is to be undertaken having regard to the objective circumstances know to all the parties at the time and in the industrial context in which an agreement was made.

28. As such, it is a necessary first step for Full Bench to ascertain the meaning of the words of clause 18.1 of the Agreement.

29. As is well entrenched, the “golden rule” of the common law as to statutory construction is that the grammatical and ordinary sense of the words is to be adhered to: JJ Richards and Sons Pty Ltd v Fair Work Australia (2012) 201 FCR 297 at [50]. In this regard, it is non- controversial that the principles of statutory interpretation are applicable to the construction of enterprise agreements: Short v F W Hercus Pty Ltd (1993) 40 FCR 511 at 520; DP World Brisbane Pty Ltd [2013] FWCFB 8557 at [32]-[37].

30. In the present case, there is no basis for limiting the application of clause 18.1 to employees who only work a shift other than an afternoon or night shift.

31. Firstly, there is nothing that can be identified in the Agreement that would permit and conclusion that the express provisions of Agreement are limited to only applying to employees who work dayshift. Clause 2 of the Agreement makes pellucid that the Agreement covers, “…. all employees of the Company which fall with the jurisdiction of the [Award]…..”. It must follow therefore that all employees, irrespective of their classification or employment status are covered by the Agreement.

32. Secondly, clause 14 of the Agreement does no more than simply identify and stipulate what the ordinary hours of employees covered the Agreement are. It further expresses the methods by which such ordinary hours may be worked.

33. Thirdly, clause 15 of the Agreement describes the various rostering options in which employees may be directed to work their ordinary hours (emphases added).
34. Lastly, clause 18 is proscribes the “rules” for the taking of “Meal and Rest Breaks”. There is nothing in the clause that can lead to a conclusion that the clause is only relevant to employees who work a shift other than afternoon or night shift.

35. The task of interpretation includes a consideration of not only the text but also but also of the surrounding circumstance known to the parties, and the object of the transaction. In that context, what matters therefore is what each of party by words and conduct would have led a reasonable person in the position in the position of the other party to believe. As noted above at paragraph 27 this consideration must be undertaken objectively.

36.      The Appellant contends that, having regard to paragraph 35 above, it is not open to find that clause 18 of the Agreement does not apply to all employees for the following reasons:
(a) Whilst the Agreement does not expressly deal with shift workers as contemplated by clause 24 of the Award, clause 18 expressly deals with the taking of Meal and Rest Breaks for all employees;
(b) Clause 18 stands alone and is not a sub-clause or subordinate clause to another clause or clauses of the Agreement dealing with a specific subject matter. The clause stands in isolation.
(c) Given that clause 18 is a standalone clause, all other clauses in the Award dealing in whole or in part with the same subject matter must yield and give way to the supremacy of clause 18 as a consequence of clause 2 of the Agreement;
(d)       Further or in the alternative;
(i) there is objective evidence that the Appellant had employees working either afternoon and/or night shift at the time the Agreement was made and that clause 18.1 was in identical terms in the Former Agreement.
(ii)          There is further objective evidence by way of the minutes of the negotiations of the Agreement that the parties turned their attention to amending clause 18.2 and not 18.1 of the Agreement.

(e) The evidence referred to in sub-paragraph (d)(i) and (d)(ii) was unchallenged.

37. The Appellant submits that the evidence referred to in 36(e) is relevant and consequently admissible (which evidence was admitted below) as it gives context to the history of the Former Agreement and the Agreement because it aids in the objective construction of the Agreement by having regard to the context in which it was made and the mutually know facts at the time.

38. In Kucks v CSR the Court emphasized that it was:
“….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 and well-understood words are in general to be accorded their ordinary or usual meaning”

39. The Appellant therefore submits that the Full Bench is not to have regard to notions of fairness or what a shift worker may usually be entitled to when undertaking its task.

40. Of course, it is conceded that the unreasonableness of a particular construction is a relevant consideration. The more unreasonable the result the more unlikely it is the parties would not have intended that result. However, in the current circumstances the construction the Appellant contends for is not even remotely close to an unreasonable construction when one has regard to the objective evidence.

Common Understanding

41. In SDA v Woolworths[2013] FWCFB 2814, the Full Bench affirmed that in the process of interpretative analysis the “task is to identify the common intention of the parties as they expressed it in the terms of their agreement”. Although the Full Bench recognised that “…it is permissible to take into account the industrial context and purpose of the agreement”, the Full Bench held that there are two important limitations:
(a) first, as noted above, the process of interpretative analysis must focus, first and foremost, upon the language of the agreement itself; and,
(b) second, 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.

42. As noted at paragraph 36(d) above, unchallenged objective evidence was available to assist DP Bull with the interpretative task, which he was duty bound to undertake. In this context, his Honour failed to have regard to the “common understanding” of the parties as to the meaning of sub-clause 18.1 of the Agreement and clause 25A of the Former Agreement.

43. The principle of “common understanding” stated by Tracey J in Transport Workers’ Union of Australia v Linfox Australia Pty Ltd [2014] FCA 829 (Linfox) at [36] was as follows:
“A further aid to construction was referred to in submissions. It related to the possibility that the parties had, historically, adopted a common understanding as to the meaning and effect of disputed provisions in the relevant instruments”.

44. At [41] Tracey J cited with approval the decision of Gray J in the SDAEA case as follows:
“There is authority that, if a provision has appeared in a series of agreements between the same parties, and if they can be shown to have conducted themselves according to a common understanding of the meaning of that provision, then it can be taken that they have agreed that the term should continue to have the commonly understood meaning in the current agreement. See Merchant Service Guild of Australia v Sydney Steam Collier Owners and Coal Stevedores Assn (1958) 1 FLR 248 at 251 per Spicer CJ, 254 per Dunphy J and 257 per Morgan J, and Printing and Kindred Industries Union v Davies Bros Ltd (1986) 18 IR 444 at 452–453. It is necessary to take great care in the application of this limited principle, to avoid infringing the general principle that the conduct of parties to an agreement cannot be taken into account in construing the agreement. For the limited principle to operate, there must be clear evidence that the parties have acted upon a common understanding as to the meaning of the relevant provision and not for other reasons, such as common inadvertence to its true meaning.”

45. In Linfox, Tracey J applied this limited principle, but it is clear that his Honour did so by reference to a common understanding of the actual text contained in the relevant enterprise agreement. At [88], his Honour noted that the disputed words in question were “day shift” and set out its literal meaning. At [92], his Honour noted that provisions of earlier instruments “contained clauses in the same terms as those which are centrally relevant in the present proceeding”. At [93], his Honour noted that the “same provisions” had been incorporated into subsequent instruments and the “terms of the relevant provision” had been “consistently applied”.

46. It is apparent from this analysis that the limited principle of “common understanding” is (unsurprisingly) confined in its operation to the meaning of the actual words contained in an agreement. Hence, for example, in Linfox, the dispute related to a historical common understanding as to the meaning of the words “day shift”, in the ALHMWU case the dispute related to a historical common understanding as to the meaning of the words “instrumentalities” and in SDAEA case the dispute related to the meaning of the words “ordinary pay”. Likewise, in Merchant Service Guild of Australia v Sydney Steam Collier Owners and Coal Stevedores Assn (1958) 1 FLR 248, which was cited by both Tracey J in Linfox and Gray J in the SDAEA case, it was made apparent that the dispute related to the meaning of words which had been in “operation for over fourteen years” (per Spicer CJ at 251.2), where there were “similar provisions” (at 254 per Dunphy J) and the “same words” had been retained (at 257 per Morgan J) and had been used in successive instruments. In Printing and Kindred Industries Union v Davies Bros Ltd (1986) 18 IR 444 at 452–453, the dispute related to the meaning of the word “employee” as used overtime in successive awards.

47. It is critical to bear in mind, and it is axiomatic, that the principles as to “common understanding” are premised upon, and confined to, a historical understanding between the parties as to disputed words where those words and the relevant provisions of the contested instruments have remained unchanged. As Gray ACJ stated in the SDAEA case at [31]:
“There is authority that, if a provision has appeared in a series of agreements between the same parties, and if they can be shown to have conducted themselves according to a common understanding of the meaning of that provision, then it can be taken that they have agreed that the term should continue to have the commonly understood meaning in the current agreement.”

48. It is immediately evident that the principle so stated is confined to instances where (a) the relevant provision has appeared in a series of agreements, and (b) the parties have a consensus as to the meaning of that provision. However, both of those conditions existed in the present case: first, sub-clause 18.1 of the Agreement was drafted in identical terms to clause 25A of the Former Agreement, and, second, there was evidence before the Commission that all the employees engaged by the appellant, including those performing shift work received an unpaid 30 minute meal break after every 5 hours worked. This remained the case for the first break following the negotiation of the Agreement (the common understanding) but clause 25B of the Former Agreement was modified following negotiation to provide payment for the break taken after the second 5 hours worked as evidenced in clause 18.2 of the Agreement.

49. Further, the appellant contends that the learned Deputy President erred to not drawing an adverse inference from the TWU’s failure to call any witnesses who were present during the negotiation of the Agreement.

50. Finally, DP Bull failed to have regard to the minutes of the negotiation meetings, which gave rise to the Agreement.

51. For these reasons, the Appellant contends that the learned Deputy President:
(a) erred in the proper construction of the Agreement, misapplied the principles of interpretation;(b) erred in particular by applying the notion of “logic” to substitute his view of the manner in which the Agreement should operate and in so doing misapplied the principles of interpretation; and
(c) erred by failing to have regard to relevant evidence in determining whether the agreement gave rise to inconsistency.”

Submissions – TWU

The TWU submitted as follows,

“Relevant Provisions of the Agreement

18. The dispute between the parties turns upon the proper interpretation of the Agreement and, particular, the interaction between provisions of the Award which are incorporated into the Agreement by reference and the remainder of the Agreement. The approach to interpretation is described in detail in Australasian Meat Industry Employees’ Union v Golden Cockerel Pty Ltd (2014) 245 IR 294 at [41] and, more recently, in AMWU v Berri Pty Limited[2017] FWCFB 3005 at [114]. It is unnecessary to repeat them here.

19. Relevant provisions of the Agreement include the following. The parties to the Agreement are set out in clause 2 and are Glen Cameron Nominees Pty Ltd, the TWU and employees falling within the “jurisdiction” of the Award. Clause 2 further provides:
It is further agreed that all of the terms of the Award, as amended from time to time, shall apply to employees covered by this Agreement provided however that where a clause of this Agreement is inconsistent with a clause of the Award in part or in whole, the clause in this Agreement shall prevail to the complete exclusion of the Award clause.

20. Clause 12 of the Agreement provides that the “ordinary spread of hours are from 4.00 am to 7.00 pm.” Similarly, clause 14 provides for ordinary hours of work and, relevantly, provides that:
A full time employee must be rostered to work their ordinary hours, between the hours of 4.00am and 7pm, Monday to Sunday.

21. Clause 15 provides that “an employee may be rostered to work their ordinary hours” by a number of different methods. The rostering arrangements then set out in clauses 15.1 and 15.2 require provision for a “30 minute unpaid meal break”.

22. Clause 18 provides for “Meal & Rest Breaks” and provides as follows:
18.1 Meal Break
An employee shall be allowed a 30 minute unpaid meal break, for every five hours of work performed. The employee shall use their discretion to take the meal break but it may not be taken within the first 4 hours of commencing work and shall not be taken later than 5 hours after commencing work. The meal break shall be taken as directed by the Supervisor, only where it would otherwise cause a disruption to the on-going performance of work.

23. Clause 18.2 makes provision for an overtime crib break where an employee is required to work overtime for two hours or more after working ordinary hours.

24. The Award makes provision for the hours of work of day workers in clause 22. As an alternative, an employee covered by the Award may perform “shiftwork” which is defined in clause 24.1(d) as follows:
shiftwork means work extending for at least two weeks and performed either in daily recurrent periods, wholly or partly between the hours of 6.30 pm and 8.30 am or in regular rotating periods but does not include work performed by day workers employed under clause 22—Ordinary hours of work

25. Separate provision is made with respect to the conditions of employment of shift workers, including hours of work and rostering of shift workers (clause 24.2), the payment of shift allowances (clause 24.3), casual shift workers (clause 24.4), overtime payments for shift workers (clause 24.5), shift work on Saturdays and Sundays (clause 24.8), meal breaks (clause 24.9) and holiday shifts (clause 24.12).

26. Relevantly, clause 24.9 provides:
24.9 Meal breaks
All shiftworkers while working on day, afternoon or night shift will be entitled to a paid meal break of 20 minutes. An employee must not be required to work more than five hours without a meal break.

27. It is clear, as developed below, that the Award provides a separate regime of conditions for shift workers as opposed to day workers, at least with respect to hours of work, rostering and breaks. The Agreement, on the other hand, does not directly make provision for shift work at all.
[…]

Grounds of Appeal

30. The notice of appeal sets out 7 grounds of appeal. The more recent submissions of the [appellant] focus upon two submissions. Firstly, it is submitted that the construction adopted by the Deputy President was not open or otherwise erroneous. Secondly, the appellant relies upon what is said to be the “common understanding” of the interpretation of the relevant terms of the Agreement. These submissions will address those two matters and, where appropriate, repeats matters set out in the earlier submissions filed by the TWU.

Entitlement to Paid Meal Break

31. The appellant’s submissions rely upon the assertion that clause 18.1 of the Agreement should be interpreted to apply to shift workers and is, as a result, inconsistent with the application of clause 24 of the Award. It is submitted that the Deputy President departed from the “golden rule” of statutory construction which is said to be that the grammatical and ordinary sense of the words used is to be adhered to.”

32. The appellant’s submissions in effect seek to interpret clause 18.1 of the Agreement in isolation and are inconsistent is fundamental principles of statutory interpretation and the approach long adopted to the interpretation of industrial instruments. A particular statutory provision must be read in the context of the legislation as a whole: K & S Lake City Freighters Pty Ltd v Gordon & Gotch Ltd (1985) 157 CLR 309 at 314-315; Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at 381. In K & S Lake City Freighters Pty Ltd, for example, Mason J (as his Honour then was) said (at 315):
… to read the section in isolation from the enactment of which it forms a part is to offend against the cardinal rule of statutory interpretation that requires the words of a statute to be read in their context. … Problems of legal interpretation are not solved satisfactorily by ritual incantations which emphasize the clarity of meaning which words have when viewed in isolation, divorced from their context.

33. The approach of requiring a particular provision to be read in the context of an instrument as a whole has also been consistently applied in the interpretation of awards and industrial agreements. In City of Wanneroo v Australian Municipal, Administrative, Clerical and Services Union (2006) 153 IR 426, for example, French J (as his Honour then was) said (at 438):
The construction of an award, like that of a statute, begins with a consideration of the ordinary meaning of its words. As with the task of statutory construction regard must be paid to the context and purpose of the provision or expression being construed. Context may appear from the text of the instrument taken as a whole, its arrangement and the place in it of the provision under construction. It is not confined to the words of the relevant Act or instrument surrounding the expression to be construed. It may extend to “… the entire document of which it is a part or to other documents with which there is an association”. It may also include “… ideas that gave rise to an expression in a document from which it has been taken” — Short v FW Hercus Pty Ltd (1993) 40 FCR 511 at 518 (Burchett J); Australian Municipal, Clerical and Services Union v Treasurer of the Commonwealth of Australia (1998) 80 IR 345 (Marshall J)

34. In Amcor Ltd v Construction, Forestry, Mining and Energy Union (2005) 222 CLR 241, Gummow, Hayne and Heydon JJ said (at 253):
Clause 55.1.1 must be read in context. It is necessary, therefore, to have regard not only to the text of cl 55.1.1, but also to a number of other matters: first, the other provisions made by cl 55; secondly, the text and operation of the Agreement both as a whole and by reference to other particular provisions made by it; and, thirdly, the legislative background against which the Agreement was made and in which it was to operate

35. The Commission has, of course, adopted the same approach: see, for example, Australasian Meat Industry Employees Union v Teys Australia Beenleigh Pty Ltd (2014) 245 IR 170 at [29]- [37]; Australasian Meat Industry Employees Union v Golden Cockerel Pty Ltd (2014) 245 IR 294 at [19]-[22]; AMWU v Berri Pty Limited[2017] FWCFB 3005 at [114].

36. Bull DP applied relevant authorities in relation to the approach to the interpretation of industrial instruments, including City of Wanneroo, Kucks v CSR Limited and Golden Cockerel. The Deputy President was correct to interpret the meal break provisions of the Agreement in the context of the Agreement as a whole. The Deputy President would have fallen into error if he had, as urged by the appellant, interpreted a particular provision in isolation from other provisions of the Agreement.

37. When the Agreement is read as a whole, the Deputy President was correct to conclude that no inconsistency arose between the application of the shift work provisions of the Award and the remaining provisions of the Agreement. In particular, it is noted that:
(a) The provisions of the Agreement itself (leaving aside the incorporation of the Award) make no provision at all for shift work and sets no conditions of employment for shift workers. In those circumstances, it is appropriate to infer that the parties intended that the conditions of employment of shift workers be covered by the incorporated provisions of the Award.

(b) Clause 12 provides that the ordinary spread of hours are from 4am to 7pm and clause 14 requires that an employee “must” be rostered to work their ordinary hours of work between 4am and 7pm, Monday to Sunday. In contrast to the Award, the Agreement makes no provision for an employee to work ordinary hours other than as a day worker within the span of hours specified.

(c) Clause 15 deals with rostering and provides for the manner in which an employee “may be rostered to work their ordinary hours”, that is, the ordinary hours which must (in accordance with clause 14) be worked between 4am and 7pm. Clause 15.1 and 15.2 provide that the “ordinary hours” of an employee must be rostered so as to include a “30 minute unpaid meal break”. Those provisions can (in accordance with clause 14) only apply to workers working within the spread of hours in clause 12 of the Agreement.

(d) Clause 17 deals with overtime and requires that an employee who “exceeds the number of ordinary hours worked for their shift, during the spread of ordinary hours of 4.00am to 7pm Monday to Friday” or “during the spread of ordinary hours on a Saturday … and on a Sunday”. Again, the Agreement makes no provision for the performance of work outside the ordinary spread of hours and only provides for overtime to be worked within that spread.

(e) Clause 18 then deals with meal and rest breaks. Clause 18.1 provides that an employee shall be allowed a 30-minute unpaid meal break “for every five hours of work performed”. The expression “hours of work performed” in clause 18.1 can only, in the context of clauses 12, 14, 15 and 17, be read as a reference to hours worked between 4am and 7pm. The Agreement (leaving aside the incorporation of the Award) only provides for work to be performed between 4am and 7pm.

(f) There is no basis upon which clause 18.1 could be construed as making provision for meal breaks for employees performing work other than in the spread of hours provided for in the Agreement. It is also noted, in this respect, that clause 15.1 and 15.2 make clear that provision for a 30-minute unpaid meal break is a requirement for the rostering of “ordinary hours”, that is, the ordinary hours set out in clause 14.

(g) Clause 18.2 provides for a paid break of 20 minutes where an employee is required to work overtime for two or more “after working ordinary hours”. When read with clauses 14 and 17, it is clear that clause 18.2 is dealing with employees working within the spread of “ordinary hours” for which the Agreement provides. It would be most surprising if clause 18.1 was intended to apply to shift workers, but clause 18.2 was not.

38. The appellant’s assertion that the reference to “an employee” in clause 18.1 means “all employees, irrespective of their classification or employment status covered by the Agreement”,21 ignores the full terms of clause 18.1 and the surrounding provisions of the Agreement. The expression “hours of work performed” in clause 18.1 can only be understood as referring to the hours of work provided for in the Agreement and the clause can only have sensible application to day workers performing work in accordance with clauses 12, 14 and 15 of the Agreement.

39. For these reasons, the Agreement can only be interpreted as intending that the conditions of employment for employees performing shift work are to be dealt with by the incorporation of the provisions of the Award. Clauses 14, 15, 17 and 18 of the Agreement can only be read as applying to employees working within the spread of hours set out in clause 12. No inconsistency arises between those provisions, including clause 18.1, and clause 24 of the Award and clause 24 of the Award applies to shift work pursuant to clause 2 of the Agreement.

40. If the appellant were correct that clause 18 of the Agreement is inconsistent with clause 24 of the Award, the inconsistency component of clause 2 would have operation. Clause 2 provides that if a clause of the Agreement is inconsistent with a clause of the Award “in whole or in part”, the clause of the Agreement shall prevail “to the complete exclusion of the Award clause.” Accordingly, if the appellant’s submissions were correct, clause 24 of the Award would be completely excluded for employees covered by the Agreement.

41. The consequence would be that the Agreement (incorporating the Award) would make no provision for shift work at all. The appellant would be unable to roster employees other than in accordance with clause 14 of the Agreement which, as we have seen, only permits ordinary hours to be- rostered between 4am and 7pm. If the appellant wished employees to work outside those hours, it would be required to pay overtime and it would be liable for underpayments to employees who have, until now, been working outside the span of hours prescribed in clause 14 of the Agreement.

42. To the extent it is submitted that the Deputy President erred by reasoning by the use of “logic”, no error is demonstrated. Longstanding approaches to statutory interpretation include consideration of the consequences of a particular interpretation, including whether the interpretation proposed is logical or make sense. As Jordan CJ said in Hall v Jones (1942) 42 SR (NSW) 203 at 208, “[A] Court is entitled to pay the legislature the not excessive compliment of assuming that it intended to enact sense and not nonsense.”

43. An industrial agreement should be interpreted on the basis that it is intended to make sense. There was no error in the Deputy President endeavouring to read the Agreement as a whole and interpret the text of the Agreement in a manner that was “logical”. The interpretation of an agreement should include “a search of the evident purpose”: Kucks v CSR Limited (1996) 66 IR 182; Construction, Forestry, Mining and Energy Union v Broadspectrum Australia Pty Ltd (2017) 262 IR 122 at [80]-[81]. An appeal to logic does not involve the substitution of the Deputy President’s view of the manner in which the Agreement should operate.

Common Understanding

44. The appellant relies upon what is said to the “common understanding” of the parties as to the meaning of clause 18.1 of the Agreement said to arise from the past practice of the appellant in relation to payment of meal breaks.

45. The past practice of the appellant cannot assist in this case. The authorities make clear that reliance upon any “common understanding” of the parties in the interpretation of an industrial instrument is a “limited principle”: Shop, Distributive and Allied Employees’ Association v Woolworths Ltd (2006) 151 FCR 513 at 520. It is only capable of application where there is clear evidence of a common understanding as to the meaning of the provision and that the parties did not act for another reason, including common inadvertence: Australian Liquor, Hospitality and Miscellaneous Workers Union v Prestige Property Services Pty Ltd (2006) 149 FCR 209 at 222; Woolworths at 520.

46. The mere fact that successive agreements may have contained the same provision and no claim was made under an earlier instrument will not sustain an assertion that the parties had a common understanding as to the meaning of a provision. In Australian Manufacturing Workers’ Union v Energy Australia Yallourn Pty Ltd (2017) 262 IR 300, for example, the Full Bench concluded (at [46]):
[46] We also consider that Commissioner Gregory erred when he found that it was the common understanding of the parties that this was how the previous agreement had been interpreted and applied. We do so because there was no evidence before the Commission on which he could make this finding. We reject the submission that such a finding was able to be inferred from the evidence that the clause was in the same terms as the predecessor agreement; that the unions or the employees did not make any claim for the inclusion of casual loading in the overtime payment; and that this is how the predecessor agreement had been applied.

47. In this matter, the appellant relies upon the assertion that the previous agreement contained a provision in similar terms to clause 18.1 and that employees under the previous agreement received an unpaid meal break. On the authorities, that is an insufficient basis to sustain an assertion that the parties had a common understanding as to the interpretation of the clause. The evidence was that there was no discussion of paid meal breaks in the negotiations which resulted in the making of the Agreement.

48. Furthermore, the “common understanding” principle could only be applied with extreme caution with respect to enterprise agreements made under the current Act. The principle arose under earlier legislation under which industrial agreements were made directly between industrial parties. Under the current Act, an enterprise agreement is made by a process of voting by employees. An enterprise agreement does not have “parties” in the usual sense. In Toyota Motor Corporation Australia Ltd v Marmara (2014) 222 FCR 152, the Full Federal Court said (at [88]):
We do not accept that premise, or the appropriateness of the contractual analogy. Under the FW Act, an enterprise agreement is an agreement in name only. Those who, by s172(2), are empowered to “make” an enterprise agreement are the employer and “the employees who are employed at the time the agreement is made and who will be covered by the agreement”. A contract lawyer would assume that those persons would be parties to the agreement, and that the assent of all of them would be necessary for the agreement to be “made”. But the lawyer would be wrong on both counts. The FW Act does not identify the employer, or any employee, as a “party” to an enterprise agreement. Further, notwithstanding the specific empowering terms of s 172, it is not necessary for all the employees who are employed at the time an agreement is made and who will be covered by the agreement to assent to the terms of the agreement. Once a majority of those employees have agreed by voting, the agreement must be sent to the Commission for approval and, if approved, thenceforth applies to all the employees in the relevant group, even those who did not agree, and even those, subsequently taken into employment, who were not part of the relevant group at the time the vote was taken under s 182.

49. In circumstances in which an enterprise agreement does not have “parties” in the contractual sense, the “common understanding” principle is not capable of application.

50. Finally, it is submitted that the Deputy President erred in not drawing an adverse inference from the TWU’s alleged failure to call witnesses present during the negotiation of the Agreement. The submission is without merit. The appellant does not identify any factual question which was resolved against it in relation to which it is said an adverse inference should have been drawn nor what relevant evidence any TWU witness could have given in relation to the negotiations. No such inference could be drawn.”

Consideration

Grounds 1, 2 & 5

The starting point is to determine if the Agreement (with the Incorporated Award) is ambiguous or susceptible to more than one meaning. For the reasons below we do not think it is. While an interpretation of the Agreement (with the Incorporated Award) may not be free from difficulty it is the case that the principles developed in the general law in the context of the interpretation of statutes can usefully be applied.

Also, it is necessary to have regard to the ordinary meaning of relevant words. The first word to consider is “inconsistent”. Essentially, the Incorporated Award terms must be incompatible with the Agreement term in order for the Agreement term to prevail. Assessing inconsistency or incompatibility must be done through the prism of established principles.

As the Deputy President correctly identified,
“[53] Inconsistency has been examined on multiple occasions by the High Court. Section 109 of the Constitution provides that “when a law of a state is inconsistent with a law of the Commonwealth, the latter shall prevail, and the former shall, to the extent of the inconsistency, be invalid.” The High Court has generally formulated three approaches to ascertaining the existence of inconsistency. Inconsistency is present where it is impossible to obey both laws, where one law purports to confer a legal right which the other law purports to take away, or where one law evinces an intention to cover the field, that is, it shall be the law on the topic whether or not there is a direct contradiction, this can be express or implied.”

In relation to the Agreement term and the Incorporated Award term it is not impossible to obey both. There is no direct conflict in the sense that the Agreement term expressly takes away what the Incorporated Award term provides. Express words would be necessary to do the same and they are not to be found in the Agreement.

Further, the Agreement does not purport to cover the field. It is not enough to establish inconsistency that the Agreement term and the Incorporated Award term both deal with the same subject matter, namely meal breaks.

It is entirely consistent with the Berri principles that the rules of statutory construction be applied to assist in understanding the meaning of the Agreement (with its incorporated terms) as a whole. As the Full Bench observed in Berri,
“… the modes of textual analysis developed in the general law may assist in the interpretation of enterprise agreements. An overly technical approach to interpretation should be avoided…”

In the present matter there are specific provisions in the Incorporated Award dealing with shift works. The relevant Agreement term deals generally with employees and an unpaid meal break. Applying established principles it should not be presumed that it was the common intention of the parties to void the specific provisions by later agreeing to general words in the Agreement. No other common intention is to be discovered in the making of the Agreement or how it has been applied.

Once this tool of statutory construction is applied it becomes possible to apply both the Agreement and the Incorporated Award term (to shift workers). To do otherwise is to consider the Agreement term in isolation from the rest of the text of the Agreement as a whole with its Incorporated Award terms.

Quite properly the Deputy President found that the general does not derogate from the specific. It was an orthodox approach. For these reasons we discern no error in that approach. There was no misapplication of the relevant principles.

Grounds 3 & 4

We do not accept that the Deputy President took into account irrelevant considerations by having regard to:
a)the F17 – Statutory Declaration in Support of the Application for Approval of an Enterprise Agreement, nor
b)the conduct of the parties after the making of the enterprise agreement.

A proper reading of the decision as a whole does not support such a determination. While the Deputy President referred to those matters there is nothing in his findings that is suggestive that he took those matters into consideration.

Further, the Deputy President did not fail to have regard to relevant evidence. The evidence (as much as it was) was generally unhelpful in being able to determine the common intention of the parties. It was primarily subjective in nature. We discern no error in the Deputy President’s approach.

Conclusion

An examination of the Deputy President’s reasoning process does not disclose error and on that basis we have decided to dismiss the appeal.
The appeal is dismissed.

VICE PRESIDENT

Appearances:

Mr M Baroni of counsel instructed by Ms Raad for Glen Cameron Nominees Pty Ltd.

Mr M Gibian of counsel instructed by Mr Grumley for the Transport Workers’ Union.

Hearing details

2018.Melbourne with video link to Sydney.
22 March.

[1] Glen Cameron Nominees Pty Ltd t/a Glen Cameron Trucking v Transport Workers’ Union of Australia[2017] FWCFB 2007 (Appeal Decision); Glen Cameron Nominees Pty Ltd t/a Glen Cameron Trucking v Transport Workers’ Union of Australia[2017] FWCFB 4636 (Revocation Decision).

[2] Glen Cameron Nominees Pty Ltd v Transport Workers’ Union of Australia [2017] FCA 1026; Glen Cameron Nominees Pty Ltd v Transport Workers' Union of Australia (No 2) [2017] FCA 1515.

[3] [2017] FWC 911.

[4] PR590552.

[5] [2016] FWCA 51.

[6] Clause 2 of the Agreement.

[7] [2016] FWCA 51 at [4].

[8] [2017] FCA 1515 at [3].

[9] Appeal Book pp 77 – 78.

[10] Appeal Book pp 75 – 76.

[11] PN231.

[12] PN89-109.

[13] Appeal Book pp 85 – 215.

[14] [2017] FWC 911 at [2].

[15] [2017] FWC 911 at [3] – [10].

[16] [2017] FWC 911 at [12] – [13].

[17] [2017] FWC 911 at [14].

[18] [2017] FWC 911 at [21] – [28].

[19] [2017] FWC 911 at [15].

[20] [2017] FWC 911 at [29] – [41].

[21] [2017] FWC 911 at [42] – [45].

[22] [2017] FWC 911 at [46].

[23] [2017] FWC 911 at [47].

[24] [2017] FWC 911 at [48].

[25] [2017] FWC 911 at [54].

[26] [2017] FWC 911 at [56].

[27] [2017] FWC 911 at [59] – [64] (reproduced above).

[28] [2017] FWCFB 4636.

[29] Australian, Administrative, Clerical and Services Union v Australian Tax Office (ATO)[2013] FWCFB 4752.

[30] Branir Pty Ltd v Owston Nominees (No 2) Pty Ltd (2001) FCA 1833.

[31] Transcript PN7 – 16.

[32] [2014] FWCFB 7447 at [41].

[33] [2017] FWCFB 3005.

[34] (2005) 222 CLR 241.

[35] Ibid at 246.

[36] Ibid at 262.

[37] Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at 382 per McHugh, Gummow, Kirby and Jayne JJ.

[38] [2017] FWCFB 1621 at [21].

[39] Kucks v CSR Limited (1996) 66 IR 182 at 184.

[40] City of Wanneroo v Australian, Municipal, Administrative, Clerical and Services Union (2006) 153 IR 426 at 440; See in general Golden Cockerel at [19]–[22].

[41] [2006] FCA 616.

[42] Ibid at [26].

[43] [2015] FCAFC 142.

[44] Ibid at [108].

[45] NTEU v La Trobe University [2015] FCAFC 142 at [109] per White J.

[46] (2009) 188 IR 297 at [19]-[22].

[47] (1982) 149 CLR 337.

[48] Ibid at 352.

[49] Ibid.

[50] Ibid.

[51] (1996) 66 IR 182 at 184.

[52] [2017] FCA 346 at [29].

[53] See Howard Smith and Co Ltd v Verawa (1907) 5 CLR 68 at 78; Farmer v Hanon (1919) 26 CLR 183 at 197 and White v Australian and New Zealand Theatres Ltd (1943) 67 CLR 266 at 275 and 281.

[54] Administration of Papua New Guinea v Daera (1973) 130 CLR 353 at 446; Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337 at 348.

[55] (2008) 251 ALR 322 at [35] per Gummow, Hayne and Kiefel JJ, and at [163] per Heydon J.

[56] [2009] NSWCA 407 at [319] per Allsop P .

[57] Metcash at [330].

[58] (1994) 36 NSWLR 290 at 304.

[59] Ibid at 312.

[60] Ibid.

[61] (1978) 95 DLR (3d) 242 at 262.

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