[2021] FWC 6037

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.217—Enterprise agreement

Hobsons Bay City Council
(AG2020/4136)

Local government administration
COMMISSIONER HARPER-GREENWELL	MELBOURNE, 30 SEPTEMBER 2021

Application for variation of the Hobsons Bay City Council Enterprise Agreement 2016 - 2019.

[1] On 23 December 2020 Hobsons Bay City Council (the Applicant, HBCC) applied to the Fair Work Commission (the Commission) pursuant to section 217 of the Fair Work Act 2009(Cth) (the Act) to vary the Hobsons Bay City Council Enterprise Agreement 2016 - 2019 1(the Agreement) to remove an ambiguity or an uncertainty.

[2] The Agreement is a single enterprise agreement approved by the Commission on 30 January 2017 and came into operation on 6 February 2017.

[3] The Association of Professional Engineers, Scientists and Managers, Australia (APESMA), the Australian Municipal, Administrative, Clerical and Services Union (ASU) and the Australian Nursing and Midwifery Federation (ANMF) are employee organisations covered by the Agreement. The ASU was the only named Respondent to the application.

[4] On 1 March 2021, I issued Directions requiring HBCC to serve the application and Directions on each employee organisations covered by the Agreement providing APESMA and the ANMF the opportunity to advise the Commission if they wish to be made a party to the matter.

[5] On 12 March 2021 the ANMF notified the Commission it wished to be joined in these proceedings and in accordance with the Directions HBCC filed an amended application on 16 March 2021 naming the ANMF as the second respondent. No correspondence was received from APESMA.

[6] Further Directions were issued on 17 March 2021 requiring HBCC to provide a copy of the amended application and Further Directions to the ASU and ANMF (together referred to as the ‘Unions’) and all its current employees covered by Part B of the Agreement. The Further Directions included a timetable for the filing and serving of witness statements and submissions by HBCC and the Unions and for the employees to be provided with the material filed by the parties. Employees were invited to provide their views to the Commission in relation to the application. The Commission did not receive any submissions from employees in response to these Directions. The Directions also stated I intended to deal with the application on the papers and should any person wish to be heard they were to notify my chambers by 4:00pm Friday 11 June 2021.

[7] The ASU advised my chambers on 11 June 2021 that it sought an oral hearing in relation to the application. This request was supported by the ANMF, however HBCC advised that it did not consider an oral hearing necessary.

[8] On 18 June 2021 correspondence was sent to the parties advising that I had considered the submissions and materials filed by the parties and formed the view that the matter would be listed for hearing. A mention was held with the parties on 2 July 2021 and the matter listed for hearing before me on 22 July 2021.

[9] HBCC was represented by Ms Natalie Campbell of Counsel. Ms Terrie Rowe, Manager People and Culture, gave evidence on behalf of HBCC.

[10] The Australian Nursing and Midwifery Federation was represented by Mr Barry Megennis, Industrial Officer. The ASU was represented by Mr Jim Hartley of Counsel. Mr Luke Cherry, ASU Organiser, gave evidence on behalf of the ASU. The following ASU witnesses had their witness statements admitted into evidence but were not required for cross-examination:

• Mrs Dawn Clark, former employee;

• Mr William Horsley-Wyatt, ASU Organiser;

• Mr Angus MacKenzie, Associate, Maurice Blackburn Lawyers;

• Mr Billy King, Executive President Vic/Tas Authorities and Services Branch of the ASU.

Variations sought and relevant terms of the Agreement

[11] HBCC’s initial application states it is seeking that the Commission vary the Agreement by inserting words into clause 11 of Part A and inserting a new clause 4A into Appendix “A” of Part A. HBCC is also seeking that the variations have retrospective effect from 6 February 2017, being the statutory commencement date of the Agreement.

[12] Both the ASU and ANMF oppose the application.

[13] On 20 April 2021, HBCC filed proposed additional wording to be added to the orders it seeks. The proposed wording essentially seeks to ensure that up to the date of any order that may be made, employees who have received redundancy payments from HBCC are entitled to retain those redundancy payments. HBCC advised this is a consent position of the Applicant and ASU, and that the ANMF had confirmed it has no objection to the amendment, though both Unions still opposed any variation to the Agreement.

[14] The Commission is empowered under s.586 of the Act to amend an application or other document relating to a matter before it on any terms that it considers appropriate or to waive an irregularity in the form or manner in which an application is made to the Commission. On 21 April 2021, correspondence was sent to the parties advising that I was amenable to the additional wording sought being added to the application, I did not require a further amended application to be filed.

[15] The Agreement has three parts, of which two are relevant to the application before me. Part A of the Agreement contains a number of operative provisions that deal with matters specific to HBCC and its employees. Part B is titled ‘Victorian Local Authorities Award 2001’ (VLA Award) and is predominantly a reproduction of (most) of the old VLA Award. The VLA Award does not have remaining force independently of the terms of the Agreement.

[16] Clause 6 of Part A deals with ‘Relationship to Award Schedules’ and relevantly provides at 6(c) and (d):

“c) This Agreement should be read and interpreted wholly in conjunction with the following Schedules:

- Victorian Local Authorities Award 2001 (Part B)

- Nurses (ANMF- Victorian Local Government) Award 2015 (Part C), with the exception of Clause 26 -Annual Leave which is not a term of this Agreement.

d) Provided that where there is an inconsistency between the relevant clause in Part A, Part B and Part C, Part A of this Agreement will prevail.”

[17] Clause 11 of Part A deals with ‘Transmission of Business’. Paragraph three of clause 11 presently reads as follows:

“Any employee who is not transmitted, not redeployed, and where their position is made redundant, shall be paid all existing annual leave, long service leave, and redundancy entitlements in accordance with the provisions of this Agreement. Time in Lieu and RDOs should be taken if possible. If not, they will be paid out.”

[18] Clause 26 of Part A deals with ‘Redeployment and Redundancy’ and relevantly provides (at subclause 26.2):

“All redundancies will be in accordance with the Hobsons Bay Redundancy Agreement included as Appendix “A” which is deemed to form part of this Agreement.”

[19] Appendix “A” of Part A of the Agreement is the Hobsons Bay Redundancy Agreement (Redundancy Agreement). Clause 4 of Appendix “A” deals with ‘Severance Entitlements’.

[20] Clause 17 of Part B of the Agreement deals with ‘Redundancy’. Severance Pay entitlements are set out in subclause 17.3. Subclause 17.7 deals with ‘Transmission of Business and provides:

“17.7 Transmission of business

17.7.1 The provisions of this clause are not applicable where a business is before or after the date of this award, transmitted from an employer (in this clause called the transmittor) to another employer (in this clause called the transmittee), in any of the following circumstances:

17.7.1(a) Where the employee accepts employment with the transmittee which recognises the period of continuous service which the employee had with the transmittor and any prior transmittor to be continuous service of the employee with the transmittee; or

17.7.1(b) Where the employee rejects an offer of employment with the transmittee:

17.7.1(b)(1) In which the terms and conditions are substantially similar and no less favourable, considered on an overall basis, than the terms and conditions applicable to the employee at the time of ceasing employment with the transmittor; and

17.7.1(b)(2) Which recognises the period of continuous service which the employee had with the transmittor and any prior transmittor to be continuous service of the employee with the transmittee.

17.7.2 The Commission may vary clause 17.7.1 (b) hereof if it is satisfied that this provision would operate unfairly in a particular case.”

[21] HBCC seeks the following variations. First, that clause 11 of Part A be varied by inserting at the end of the first sentence in the third paragraph the words “……which includes without limitation, the provisions of clause 17.7 of Part B of this Agreement.” so that the paragraph reads:

“Any employee who is not transmitted, not redeployed, and where their position is made redundant, shall be paid all existing annual leave, long service leave, and redundancy entitlements in accordance with the provisions of this Agreement which includes without limitation, the provisions of clause 17.7 of Part B of this Agreement. Time in Lieu and RDOs should be taken if possible. If not, they will be paid out.” (emphasis added)

[22] Further, HBCC seeks to insert a new clause 4A into Appendix “A” of Part A of the Agreement as follows:

“For the avoidance of doubt, in accordance with the exclusion provisions of subclauses 17.7.1(a) or 17.7.1(b) of Part B of this Agreement, an employee is not entitled to redundancy or severance entitlements under Parts A or B of this Agreement where those exclusion provisions apply, subject to subclause 17.7.2 of Part B.”

[23] Finally, HBCC seeks the insertion of the following new clause:

“No claim against Paid Retrenched Employees

1. Paid Retrenched Employee means an employee of the Council who meets all three of these criteria:

(a) who was covered by this Agreement;

(b) whose employment was terminated by reason of redundancy in a transmission of business which occurred prior to the variation of this Agreement by the Fair Work Commission under section 217; and

(c) who received payments from the Council as a consequence of that retrenchment including without limitation severance pay and/or notice pay.

2. Any Paid Retrenched Employee is entitled to retain any payments of the kind referred to in clause 1(c), and, the Council shall not make any application or claim to any court or statutory body, seeking repayment, damages, compensation or the like, in relation to thereto.”

[24] For the reasons set out below, I have decided not to vary the Agreement. I am not satisfied that there are ambiguities or uncertainties in relation to the Agreement as identified by HBCC.

Legislative framework and legal principles

[25] Section 227 of the Act provides as follows:

“217 Variation of an enterprise agreement to remove an ambiguity or uncertainty

(1) The FWC may vary an enterprise agreement to remove an ambiguity or uncertainty on application by any of the following:

(a) one or more of the employers covered by the agreement;

(b) an employee covered by the agreement;

(2) If the FWC varies the enterprise agreement, the variation operates from the day specified in the decision to vary the agreement.”

[26] HBCC is the employer covered by the Agreement and has standing to make the application.

[27] The discretion to vary an agreement may only be exercised if first the Commission is satisfied that there is ambiguity or uncertainty in the agreement. If an ambiguity or uncertainty is identified, the Commission must then consider whether to exercise its discretion to vary the agreement. The principles that are to be applied in considering an application under s.217 are well established, and may be summarised as follows:

• The Commission should approach an application in two stages. First, as a jurisdictional pre-requisite, it should identify whether there is an uncertainty or ambiguity. Secondly, if an ambiguity or uncertainty is identified, it should consider whether to exercise its discretion to vary the agreement the subject of the application; 2

• The process of identifying ambiguity or uncertainty involves making an objective assessment of the words used in the provisions under examination. The words used are construed having regard to their context; 3

• The Commission will generally err on the side of finding an ambiguity or uncertainty where there are rival contentions, and an arguable case is made out for more than one contention; 4

• However, the Commission must make a finding that an agreement the subject of an application under s.217 is ambiguous or uncertain. Prima facie satisfaction of ambiguity or uncertainty is not sufficient; 5

• The mere existence of rival contentions as to the proper construction of the terms of an agreement will also be an insufficient basis to conclude the existence of ambiguity or uncertainty. Such contentions may be self-serving. The task is to make an objective judgement as to whether the wording of a provision is susceptible to more than one meaning; 6

• However, the task of the Commission is to determine whether a provision in an agreement is ambiguous or uncertain. That task is distinct from determining the proper construction or true meaning of a provision of an agreement. 7

• A provision in an agreement may be ambiguous even though it is capable of interpretation and it is not necessary for the Commission to interpret a provision of an agreement to reach a conclusion concerning the presence of ambiguity or uncertainty. 8 Consequently there is no need for the Commission to feel constrained in the matters to which it may have regard by the principles developed for the interpretation of enterprise agreements. Moreover, the Commission is obliged, in performing its functions or in exercising its powers in relation to a matter under the Act, to take into account, amongst other things, “equity, good conscience and the merits of the matter” (s 578) and it is not bound by the rules of evidence and procedure in relation to a matter (s 591). These provisions of the Act apply to the discharge by the Commission’s functions under s 217(1),9 including by allowing the Commission to have regard to evidence of the parties’ common intention and to the history of agreement provision as part of the “equity, good conscience and the merits” of the matter.10

• Once an ambiguity or uncertainty has been identified, in exercising the discretion whether to vary the agreement, the Commission may also have regard to the mutual or common intention of the parties at the time the agreement was made. 11

[28] I adopt these principles in determining the application before me.

Background facts and submissions

[29] HBCC seeks variation of the Agreement to resolve what it submits is ambiguity as to whether employees who reject an ‘Equivalent Offer’ in an outsourcing or subcontracting transfer of business, are entitled to a redundancy payment under the Agreement. A reference to ‘Equivalent Offer’ means an offer that meets the requirements of clause 17.7.1(b) of Part B of the Agreement. HBCC contends that the redundancy entitlement in Appendix “A” of Part A is subject to the exclusion under subclause 17.7.1(b) of Part B of the Agreement.

[30] The ASU contends that clauses 11, 26 and the Redundancy Agreement in Part A of the Agreement requires HBCC to make payments to employees who reject such offers calculated in accordance with the Redundancy Agreement, and in so far as subclause 17.7 of Part B denies this entitlement, it is inconsistent with the Part A clauses which prevail, by virtue of clause 6 of Part A.

[31] By way of background, HBCC determined that it would outsource the provision of in-home care to United Age Well (UAW) and transfer its business for the provision of in-home care to UAW. HBCC Home Support employees were offered employment with UAW on substantially the same terms and conditions that were no less favourable to them, consistent with clause 17.7.1(b) of Part B of the Agreement. Five employees rejected the offer with UAW and retired from the workforce upon the outsourcing of in-home care to UAW. All other in-home care employees received an offer from UAW, accepted that offer and transferred across.

[32] The ASU filed a proceeding seeking compensation and the imposition of pecuniary penalties in the Federal Court. The central issue in that proceeding is whether employees who rejected an Equivalent Offer of an outsourcing or subcontracting transfer of business are entitled to a redundancy payment under clause 11 of the Agreement. The ASU contends that clauses in Part A render clause 17.7.1(b) of Part B of the Agreement of no effect and therefore there is no question to be determined as to whether the offer was an Equivalent Offer. HBCC has applied for that Federal Court proceeding to be stayed pending determination of this section 217 application. That application is, at present, yet to be determined by the Court.

[33] HBCC submits the ASU’s contention is no more than something which is an arguable interpretation of the relevant wording in Part A and does not reflect the objective intention of the parties under the Agreement at the time the Agreement was made. It seeks to vary the Agreement to confirm that subclause 17.7.1(b) of Part B continues to have operative effect, and therefore employees who reject an Equivalent Offer do not receive redundancy pay, and clarify what it says is ambiguity or uncertainty as to the relevant words in Part A on which the ASU relies.

HBCC

Ambiguity or uncertainty?

[34] HBCC submits the Commission ought to be satisfied the Agreement is ambiguous, or in the alternative, uncertain, and that it is appropriate to exercise its discretion to vary the agreement in the terms sought, from the point in time that the Agreement was made, to reflect what it says are the objectively ascertainable intentions of the parties at the time the Agreement was made. The HBCC notes the variations sought excludes any employees who have already received a redundancy payment arising out of a transfer of business arrangement that was subject to the Agreement. It contends the standard of ambiguity is not a high one, and it is apparent the Agreement is ambiguous both on its face and when regard is had to the objective ascertainable material.

[35] HBCC argues whether or not redundancy ought be paid to employees who are given an Equivalent Offer under a transfer of business, but refuse those offers, is ambiguous or uncertain under the Agreement and arises because of the interaction between Part A and B of the Agreement, in particularly clause 11 of Part A and subclause 17.7 of Part B. HBCC contend it is specifically unclear and/or ambiguous what the ‘redundancy entitlement in accordance with the provisions of this Agreement’ referred to in clause 11 is owed to employees that refuse an offer of employment in a transfer of business situation, and whether it is encapsulating the entire Agreement, that being clause 17.7 of part B.

[36] HBCC contend this ambiguity is created by the fact that Parts A and B of the Agreement are to be read ‘wholly in conjunction’. It argues subclause 17.7 suggests that no redundancy entitlement arises, and it is therefore ambiguous as to whether redundancy pay is owing to employees who do not accept an Equivalent Offer made to them as a result of a transfer of business.

Exercise of discretion

[37] HBCC relies on the text of the Agreement, the VLA Award, the National Employment Standards (NES), HBCC’s post agreement conduct and historical versions of the Agreement as circumstances which the Commission can rely on in considering whether to exercise its discretion to make the variation sought.

[38] HBCC contends that when the Agreement is read as a whole, it is apparent that the variations sought reflect the intentions of the parties at the time of making the Agreement, being that redundancy is not payable where an equivalent offer is refused. Clause 11 of Part A (in the third paragraph) refers to circumstances where an employee is not transmitted, not redeployed and where their position is made redundant, and provides that such an employee shall be paid ‘all existing annual leave, long service leave, and redundancy entitlements in accordance with the provisions of this Agreement’. HBCC submits the reference to ‘in accordance with the provisions of this Agreement’ can only mean that the redundancy entitlement ought to be determined in accordance with clauses throughout the whole Agreement, which includes the VLA Award, not only in accordance with some of the provisions of the Agreement, or the provisions in Part A, or only in accordance with the provisions of the Agreement that set out formulas for payment and the like.

[39] Subclause 17.7.1(b) of Part B deals with the exclusion of redundancy pay for an employee who has rejected an offer of employment with the proposed new employer (to whom business has been transferred) that meets the circumstances in the subclause. HBCC state this circumstance is contemplated by subclause 17.7.1(b) of Part B being consistent with clause 11 of Part A, if subsequently the employee is not redeployed and is made redundant. When clause 11 of Part A and subclause 17.7.1(b) of Part B are read and interpreted together, it argues the overall effect is that for an employee who is not transmitted, not redeployed and where their position is made redundant and has rejected an Equivalent Offer, subclause 17.7.1 of Part B operates to exclude their redundancy entitlement in Annexure “A” of Part A.

[40] HBCC contend this intention is also reflected by the industrial realities, including the Nation Employment Standards (NES) of the Act. It argues that under s.120 and 122(3) of the Act an employee will not be entitled to redundancy pay if they reject the new employer’s job offer on certain conditions, which it says are met by the offers given by HBCC. Section 120 permits an employer to apply to the Commission to reduce an amount of redundancy pay that would be otherwise due if it finds other acceptable employment for an employee. Section 122(3) deals with a transmission of business scenario and provides an employee is not entitled to redundancy pay in certain circumstances which HBCC say are essentially the same as subclause 17.7.1(b) of Part B.

[41] HBCC submits this industrial practice is also found in the VLA Award (Part B of the Agreement). It argues the VLA Award appreciates the fact that an employee is not entitled to redundancy where an acceptable equivalent offer of employment is made, which reflects the reality that an employee who is given an equivalent offer is not intended to be compensated where that offer is rejected. 12 It contends it can be assumed that the parties were well aware of these realities at the time that the Agreement was made.

[42] HBCC also contend parties’ conduct during the consultation process for the in-home care outsourcing reveal their objective intentions about the meaning of the Agreement at the time that it was made. HBCC says it made it clear to the employees by way of a staff Q&A on 5 April 2018 that ‘redundancies are only payable in the event; the new provider does not offer an existing employee a position, the new provider does not offer a position that is similar to what the employee currently undertakes or the employee is not redeployed by HBCC…’. and indicated if an employee rejected an equivalent offer from UAW they would be made redundant but not paid any redundancy entitlements pursuant to subclause 17.7.1(b) of Part B of the Agreement. It says this position was reiterated to the ASU by email on 8 April 2019, to which they say no response was received.

[43] HBCC further submits the variations sought are consistent with the historical agreements and that these agreements can be used to objectively ascertain the intention of the parties at the time of making the Agreement. HBCC refers to the below paragraph from clause 11 ‘Transmission of Business’ in the 2004 Agreement:

“Where redeployment is not available and the employee elects not to transfer to the transmittee as of the date of the termination of employment, the employee, in addition to accumulated leave entitlements, will receive redundancy entitlements in accordance with Clause 20.2 and Appendix A.”

[44] It says the VLA Award was incorporated into the 2004 Agreement by reference, and included what is now subclause 17.7, noting that prior to the VLA Award being replaced in 2004 it did not contain subclause 17.7. In the 2007 Agreement the VLA Award was incorporated by Part B of the Agreement. HBCC notes the following amendments were made in the 2007 Agreement so that clause 10 ’Transmission of Business’ stated:

“Any employee who is not transmitted, not redeployed, and where their position is made redundant, shall be paid all existing annual leave, long service leave, and redundancy entitlements in accordance with the provisions of this Agreement. Time in lieu and RDOs should be taken if possible. If not, they will be paid out.”

[45] HBCC states this clause was adopted in the subsequent 2010, 2013 and 2016 (current) Agreement, and submits the historical agreements demonstrate there was no intention by the parties to move away from the position in the 2004 Agreement, that where an employee elects not to transfer a redundancy payment will not be payable. It contends this is supported by the fact the issue was not raised in any of the logs of claims for the agreements and argues it would have been a startling claim by employees in an enterprise agreement to render inoperative the provisions of subclause 17.7.1(b) of Part B of the Agreement.

[46] HBCC says it has now taken action to address the ambiguity (and/or uncertainty) in its current enterprise agreement bargaining and it can be inferred that had the issue been raised at an earlier time it would have taken steps to address this issue in the negotiation of the Agreement.

ASU

Ambiguity or uncertainty?

[47] The ASU submits that clauses 11, 26 and the Redundancy Agreement in Part A of the Agreement are not, on an objective assessment, ambiguous or uncertain. It submits the text and context of relevant clauses in the Agreement and the history of those clauses support its contention that the Agreement provides, in a way that is unambiguous and clear, for employees who are made redundant in a transfer-of-business situation to receive redundancy payments, even if they reject an offer of employment from the incoming employee.

[48] The ASU refers the Commission to the reasons given by Wheelahan J in Maribyrnong City Council v Australian Municipal, Administrative, Clerical and Services Union 13 (Maribyrnong) in support of its contention regarding text and context. That decision considered the terms of the Maribyrnong City Council Enterprise Agreement 2016 (Maribyrnong Agreement) which were similar to the Agreement I am being asked to vary, and ASU submits gave rise to the same issues as arise here. In that matter Maribyrnong City Council sought declaratory relief to the effect that the Part A clauses and Part B clause 17.7 were not inconsistent, such that it was entitled to refuse to pay redundancy entitlements to persons who were offered comparable employment in a transfer-of-business situation. Wheelahan J dismissed the application, finding that Part B clause 17.7 ‘cannot sensibly work together with Part A’.14 The ASU contend all of the textual and contextual reasons Wheelan J gave for finding that one could not sensibly read the Part B provisions of the Maribyrnong Agreement as modifying the Part A provisions apply here as well.

[49] ASU contends that each of clauses 11, 26 and the Redundancy Agreement in Part A are clear and consistent only with the ASU’s reading, and can only be read as follows. It submits that clause 11, by reference to the third and final paragraph, is not ambiguous as argued by HBCC. It argues it makes it very clear the parties contemplated precisely that where employment is not taken up then a person is entitled to redundancy payments. The ASU submits clause 11 is unambiguous in that it provides that in the event of a ‘transmission of business’ HBCC is required to pay to an employee: (a) who was not transmitted; and (b) who was not redeployed; and (c) whose position was made redundant, redundancy entitlements. The ASU argues an employee who rejects an offer made by the incoming employer, who is not redeployed, and whose employment is terminated based on redundancy, unequivocally satisfies each of these criteria. The final paragraph of clause 11 provides:

“Where an employee accepts an offer of employment with the transmittee and during the life of the contract with the Council, the transmittee’s business becomes insolvent, the Council shall pay the employee the redundancy package that the employee would have been entitled to, had the employee not taken up employment with the transmittee.

[50] The ASU submits this contemplates that a person who does not take up employment with the transmittee, is entitled to a redundancy payment, and there is no other way of reading it. It argues these words in this clause just taken by itself makes it absolutely clear that it’s straight-forward - if you're not transmitted and you’re not redeployed and your position is made redundant, you get redundancy payments.

[51] The ASU submits that clause 26 and the Redundancy Agreement are clearer still, and textually the Agreement couldn’t be clearer. Clause 26.1 provides that all redundancies - not some redundancies, and not redundancies except in a transfer-of-business situation where an offer is rejected - are to be in accordance with the Redundancy Agreement. The Redundancy Agreement applies to ‘any redundancy situation’ - not with exceptions, but any such situation. It applies where HBCC ‘for any other reason’ decides that an employee’s services or position is not necessary, is of the opinion that the work for which the employee is engaged is finished, or is of the opinion the quantity of work has diminished and has rendered necessary a reduction in the number of employees (clause 1) - all of which are satisfied in a transmission-of-business scenario. Where the Redundancy Agreement applies, and if the employee cannot be redeployed (as in the case of the five former employees), then: (a) the employee may be compulsorily retrenched by HBCC (clause 3); and (b) in that event, the employee ‘shall be entitled’ to the severance payments set out in clause 4 of this Redundancy Agreement. The ASU argue the drafting of the Agreement is very clear and straight forward and does not say, ‘shall be entitled except in a transfer-of-business situation where an offer is made and refused’, it says, ‘shall be entitled’.

[52] The ASU submits that as these clauses cannot be read in any other way, HBCC must submit that clause 17.7 in Part B introduces ambiguity. The ASU argues that for the same reasons that Wheelahan J gave in Maribyrnong, 15 ‘Part B of the Agreement cannot sensibly work together with Part A’16, such that Part A prevails. The ASU submits, taking the matters Wheelahan J identified as requiring this conclusion in turn:

(1) There are (at least) these differences between the redundancy provision in Part A and the redundancy provision in Part B:

(a) the consultation and redeployment provisions in Part A clause 26.1 are more extensive than Part B clause 17A; 17

(b) the entitlements in the Redundancy Agreement are much more generous than those in Part B clause 17.3; 18

(d) there are exceptions to redundancy entitlements in Part B (clause 17.8), but none in Part A; 20

(e) there is no transmission of business exception in Part A; 21

(2) Part A is concerned not only with severance payments in the event of redundancy but also with obligations of consultation concerning redeployment within HBCC that are the subject of Part A clause 26.1; 22

(3) Redundancy obligations in Part A are to be read in light of the commitment to employment security in Part A, i.e., security of employment with HBCC (Part A clause 12), with which clause 17.7 is inconsistent; 23

(4) To read Part B clause 17.7 - which disapplies ‘[t]he provisions of this clause’ - as also disapplying the provisions of different clauses in a different Part involves ‘some looseness of thinking,’ and ‘significant departure from the text of clause 17.7.1,’ would ‘involve error’; 24

(5) The intention that Part A should cover the field appears from:

(a) the fact that Part A was the subject of specific negotiation whereas Part B was not; 25

(b) Part A clause 6 expressly contemplating inconsistency between the parts (in which case Part A prevails); 26

(d) some Part B clauses being redundant in the context of current legislation (e.g., Part B clauses 17.5, 17.7.2, and 17.8, dealing with applications to the Commission to vary redundancy entitlements), to which the provisions of clause 17.7 are tied; 28

(e) Part A itself providing for circumstances in which an employee will not be entitled to redundancy payments - including, principally, where the employee is redeployed within HBCC (Part A, clause 11), where that redeployment is not agreed to be unsatisfactory within two months (Part A, clause 26.1, last paragraph); 29

(f) the context of the redundancy provisions in Part A being different from Part B including because of the commitment to employment security (Part A, clause 12). 30

[53] The ASU submits the present case is, if anything, stronger than Maribyrnong because the language of all relevant clauses in Part A of the Agreement clearly evinces an intention to cover the field:

(1) clause 11: ‘[a]ny employee who is not transmitted, not redeployed, and where their position is made redundant] - any, not some employees;

(2) clause 26.2: ‘[a]ll redundancies will be in accordance with the [Redundancy Agreement]’ - all, not some redundancies;

(3) Redundancy Agreement: ‘[t]his Appendix covers the entitlements … arising out of any redundancy situation’ - any redundancy situation, not some of them.

[54] The ASU submits that text and context, as in Maribyrnong, where none of the factors identified by Wheelahan J supported the Council’s interpretation, are all in the ASU’s favour. It contends it does not matter that Wheelahan J was engaged in construction whereas the Commission is not - it is determining whether there is ambiguity or uncertainty. 31 It argues all of the same textual and contextual matters that dictated the proper construction of the provision are also relevant to whether there is ambiguity, which the ASU contend there is not. It also notes that nowhere in the judgement did Wheelahan J say that he thought the clauses were ambiguous.

[55] The ASU agrees the Commission may look at the history of the clauses in determining whether ambiguity or uncertainty exist. 32 It argues that current Part A clause 6 is materially the same as clause 6 in the 2001, 2004, 2007, 2010 and 2013 Hobsons Bay City Council Agreements, and current Part A clause 26.2 is materially the same as clause 20.2 of the 2001 Agreement, clause 19.2 of the 2004 Agreement, clause 20.2 of the 2007 Agreement, clause 21.2 of the 2010 Agreement and clause 25.2 of the 2013 Agreement. It also contends that the Redundancy Agreement in the current Agreement is materially the same as the redundancy agreements in the 2001, 2004, 2007, 2010 and 2013 Hobsons Bay City Council Agreements. Given this, it submits nothing in the history of these clauses is relevant to whether there is ambiguity or uncertainty. In regard to the current Part A clause 11, the ASU notes it is identical to Part A clause 10 of the 2007, 2010 and 2013 HBCC Agreements. In the 2001 and 2004 Agreement the ASU notes the clause reads differently as follows:

[56] The ASU argue that this clause, dealing with transmission of business, provides expressly that an employee who elects not to transfer is still entitled to redundancy payments in accordance with the Redundancy Agreement, and cannot be read consistently with Part B clause 17.7. It contends on the language of the 2001 and 2004 Agreements HBCC’s submission of ambiguity would have been doomed, and refers the Commission to the HBCC’s submission set out above at [45] that there ‘was no intention by the parties to move away from the position in the 2004 Agreement’. The ASU submits the evident effect of the 2007, 2010, 2012 and 2016 HBCC Agreements is the same, the only difference is that the causes of the elements of entitlement are removed, being:

(1) pre-2007, the clause only applied if redeployment was unavailable; from 2007, it applies if you simply are not redeployed;

(2) pre-2007, the clause only applied if non-transmission was at your election; from 2007, it applies to all non-transmissions, whether at your election or otherwise.

[57] The ASU contend that the position is the opposite of what HBCC submit, and that while the historical agreements demonstrate no intention to move away from the 2004 Agreement position, the 2004 Agreement (and the 2001 Agreement) unequivocally support the ASU’s reading of the current Agreement, not HBCC’s, and the history of the relevant clauses strongly supports its argument that there is no ambiguity in the clause. It submits clause 11 provides now, as it did in 2001 and 2004, for payment to persons who are not transmitted in a transfer of business situation, whether as a result of election or otherwise and its history is strongly supportive if the ASU’s position.

Exercise of discretion

[58] The ASU submits that even if the Commission finds the Agreement is ambiguous or uncertain, the Commission should not exercise its discretion to vary so as to rectify that ambiguity. It contends the HBCC has not shown that the objectively-ascertained mutual intention of the parties at the time the Agreement was made was that there should be no redundancy entitlements in a transfer of business situation where employees rejected employment with the incoming employer. It argues the better conclusion is that the parties, being HBCC and the collective group of employees who voted on the Agreement, mutually intended the ASU’s construction of the relevant clauses.

[59] The ASU contends that in s.217 variation applications such as the one before me, where the only basis on which the Commission is being asked to exercise its discretion to vary is that the variation sought reflects the objectively ascertainable intentions of the parties at the time the Agreement was made, rectification is an appropriate concept for the Commission to apply. The ASU contend that this is the same test as for rectification – what was substantively the agreement between the parties as at the time the agreement was entered into. In such circumstances, it argues, the ‘objectively ascertained’ mutual intention of the parties should be understood as it is in the conceptually similar context of rectification, as outlined in Simic v New South Wales Land and Housing Corporation 33 (Simic). It submits the Commission should demand ‘clear and convincing proof’34 of that mutual intention which should be established ‘in the clearest and most satisfactory manner’,35 or proved to a ‘a high standard’36 consistent with the rectification standard, asrectification is ‘comparable’ to the s.217 regime.37 It argues for the same reasons a high standard is demanded for rectification, the Commission should demand a high standard where the basis for the variation is said to be that the parties intended something other than what they wrote.

[60] The ASU contend varying an enterprise agreement is not a small thing, noting the Act only provides for three ways of varying an agreement (pursuant to ss. 210, 217 or 218 of Ch 2, Part 2-4, Div 7, Subdiv A (Subdiv A), and if the Commission varies the Agreement it is re-writing the bargain that was submitted to the employees for a vote. The ASU submits for the Commission to vary based on a vaguely-proved mutual intention would undermine the purpose of bargain-making generally and in particular Subdivision A of the Act. It also contends that where the evidence fails to disclose a common intention in favour of any particular meaning, to vary would be to ‘impose on a party an outcome which it would not have countenanced when it entered into the agreement.’ 38

[61] In response to HBCC’s submission set out at [35] above regarding the reference in clause 11 to payment being made ‘in accordance with the provisions of this Agreement’ rather than for instance with the provisions of Part A alone, the ASU contends that this does not address any of the points made by Wheelahan J in Maribyrnong, which it submits apply equally to the present case, as to why Part B clause 17.7 cannot be read consistently with Part A clause 11. In particular, given:

(1) the clear intention that Part A cover the field in relation to redundancy in the context of transfer-of-business;

(2) the inability (without error) of reading “[t]he provisions of this clause” in Part B clause 17.7 as applying to a different clause in a different Part,

the provisions of ‘this Agreement’ relevant to redundancy in a transfer of business situation do not include Part B clause 17.7 because of its inconsistency with the Part A clauses.

[62] The ASU also submits there is no ‘industrial reality’ or ‘industrial practice’ which denies redundancy payments to employees who reject incoming employment, and the industrial context provides no basis to conclude the employees in this matter intended that to be the situation under this Agreement. It argues it is unremarkable that the NES and Award make less-favourable provision than an enterprise agreement, as the whole idea of enterprise agreements is that employees should be ‘better off overall’ and there is no authority for the proposition that employees who vote for an agreement - which by definition must leave them “better off overall” than an Award or the NES - are to be taken, if there is ambiguity, to have replicated the Award or the NES. Further, it submits the practices of some other Victorian Councils are opposite to the construction argued by HBCC and there are many examples, unambiguously, of provision for payment to such persons, referring the Commission to two other Councils who made such payments and six enterprise agreements applicable to other Councils that provide payments to employees who reject incoming employment in a transfer if business situation. The ASU contends that HBCC itself has paid people in such circumstances previously. It contends this is a neutral factor that doesn’t assist the Commission, as there are some situations where people do get paid in these circumstances, and other situations where they don’t.

[63] In response to HBCC’s submissions regarding the parties’ conduct during the consultation process in relation to transmission of business, the ASU contend the relevant question is the objectively-ascertained mutual intention of the parties at the time they made the agreement. The ASU submit the only kind of subsequent conduct that is material is that which evinces ‘a clear and mutual subjective intention as to what the [agreement] originally meant.’ 39 The ASU submits HBCC’s position about construction in 2018 is only relevant to that point in time, it does not demonstrate (clearly or otherwise) its intention in 2016; and it is irrelevant to what the employees intended in 2016, and the ASU not responding to HBCC’s email to it setting out HBCC’s position on redundancy is not evidence of the ASU’s construction or intention in 2019, in 2016 (even if it were a ‘party’), nor the intention of the employees in 2016.

[64] In response to HBCC’s submissions above regarding the issue not being raised in previous logs of claims, the ASU contend there is no need for it to have raised this issue in log of claims in 2016 as the construction of the current provisions favours its view. It also argues there is no evidence of the HBCC raising the issue in previous bargaining either, and further, the ASU’s bargaining position in 2010, 2013 and 2016 says nothing about the intention of the collective collective group of voting employees in 2016, particularly as employees voted to approve an agreement the ASU recommended should be rejected.

[65] In their reply submissions (see [73] below) HBCC contend if there was no mutual intention to redundancy pay where an equivalent offer was made and rejected by an employee, then absent any other compelling circumstance, a variation application ought to succeed, relying on the Full Bench decision of United Voice v MSS Security Pty Ltd T/A MSS Security 40(MSS Security). In response the ASU submits that the decision is distinguishable, what the Full Bench said is obiter, and in any event it is plainly wrong. The issue in that case was whether there should be an additional payment and the ASU note that as set out in [22] of the Full Bench decision the issue arose during negotiations, in contrast to the matter before me, and the Union’s request for an additional amount of money was rejected by the Employer. It also argues that in this case, what is being sought is not an additional payment or entitlement, it has always been in the Agreement since 2001. The ASU contend that, unlike in MSS Security, this is a case where, if there is an entitlement on a proper construction of the section, whatever the words mean, they have meant for 20 years, so it’s not an additional amount.

[66] In the decision subject to appeal, the Deputy President based his decision to vary the Agreements on a consideration of the mutual intention of the parties in relation to the meaning of the clause, finding ‘the intention of the parties, being the employees and MSS, as to the calculation of the allowance was as contended for by MSS’. 41 That finding was subject to appeal and leave to appeal that finding was refused. The Full Bench goes on to say (at [23]) ‘It is possible in this case the parties had different intentions’, which the ASU contend is obiter, dealing with a circumstance that might have arisen on a different set of facts but not this one. In the matter before me the ASU argues there is no subjective mutual intention. It submits that, even if the Commission did not think the Full Bench decision was distinguishable, I am not bound by it as what is said is obiter.

[67] Further, the ASU contend the decision is plainly wrong, there is ample authority 42 for the proposition that the Commission should not vary to impose on a party an outcome that it didn’t countenance, and the MSS Security decision is inconsistent with those authorities. The ASU also submits for the same reason it would be wrong in law to fetter what is a very open discretion in section 217 with some additional principle that ambiguities are to be resolved in favour of employers paying less money to employees, as it is the mutual intention of the parties that is to be considered, not the intention of one of the parties.43 It contends a correct statement of principle is that mutual intention is relevant in the sense that you vary to give effect to the substantive agreement, not the intention of one party only,44 and it would be inconceivable that when the authorities have said that mutual intention was relevant, what they really meant was mutual intention or, failing that, the intention of the employer. The ASU argues an approach to an exercise of discretion that says in the absence of the employer proving that there is a basis for varying the enterprise agreement, in any event, the Commission should vary if it means the employer paying less money if they didn’t need to is wrong in principle, inconsistent with the authorities referred to and would fetter the discretion in section 217 in a way that would be legally erroneous.

[68] The ASU contends the Commission can be satisfied, based on the text of the provisions and their history, the mutual intention of the parties was that entitlements would be payable to employees in a transfer of business situation who rejected offers of employment from an incoming employer. However, the ASU argue, it’s not necessary for it to show this in order for HBCC’s application to be refused as, regardless of the standard of proof used to establish the alleged mutual intention of the parties, HBCC bears the onus and has not proved the mutual intention for which it contends, nor provided any other reason as to why it would be appropriate to vary the Agreement in the terms sought.

[69] The ASU submits that, even if the Commission finds the clauses are ambiguous, and is satisfied HBCC has proved the mutual intention for which it contends, it should allow the existing clause to stand and not vary the Agreement given:

(1) These clauses have existed for 20 years. The same form of words has repeatedly been endorsed by HBCC and various employee collectives over time.

(2) The sole purpose of HBCC’s application is to deny liability to five employees. HBCC has adduced no evidence of financial hardship were it to have to make payments; there is, conversely, such evidence in regard to Mrs Clark.

(3) A replacement agreement is now the subject of an approval application.

[70] Finally, the ASU submit that should the Commission decide to exercise its discretion at all, it should do so prospectively, which would have regard to the fact that this is a set of clauses that HBCC has been content to leave in their enterprise agreement.

[71] The ANMF opposed the application on the same grounds as outlined by the ASU and relied on the submissions made by the ASU.

HBCC reply submissions

[72] HBCC submit that, in regard to the standard of proof for ambiguity, the ASU is seeking to inflate the standard beyond that which was set by the Full Court in Bianco Walling Pty Ltd v CFMMEU 45(Bianco Walling) by reference to rectification cases. HBCC contend that rectification cases do not assist the Commission in this matter, as s.217 of the Act has quite a different statutory purpose to that of a rectification in contract law. Rectification is available where parties had a particular intention, and by mistake, the intention was not properly reflected in the document, that being the contract. HBCC submits the purpose of a rectification is to ensure that the document conforms to the true agreement of the parties, which includes examining the parties’ subjective intent, and does not align with the broader power the Commission has under s.217 the purpose of which being where there is an ambiguity or an uncertainty in an enterprise agreement, the Commission has discretion to vary the agreement to address that uncertainty and that ambiguity. HBCC contend it is not a high standard for ambiguity and uncertainty for the precondition in 217 to be met, which demonstrates that rectification cases are inapt to provide the standard by which the Commission ought to find a clear and convincing proof of mutual intention. It submits the discretion under s.217 is broad and it would be inconsistent with that broad discretion to impose a particularly high standard of satisfaction in relation to mutual objective intention. HBCC submits in this matter the words of the Agreement itself are the best indication that the Commission has of the mutual intentions of the parties, objectively assessed at the time that the Agreement was made.

[73] In regard to the Maribyrnong decision, HBCC submits the Court was obliged to construe the Maribyrnong Agreement which is not the task required of the Commission. It submits the fact the Court was able to discern meaning does not mean that no ambiguity for the purposes of s.217 arises in that construction, and the fact it found the Maribyrnong Agreement could not be read sensibly when read together demonstrates that there is that uncertainty and ambiguity that HBCC contends for. HBCC submits that to the extent that the Maribyrnong Agreement and the Agreement in the current matter have some similarity, the Maribyrnong decision does not assist the Commission in determining whether or not there was ambiguity or uncertainty, and the Commission wouldn’t be bound by the interpretation Wheelahan J gave to Maribyrnong Agreement in considering that, given that it is a quite different test which has to be applied under s.217. It submits that, as identified by the Full Court in Bianco Walling, the identification of the true meaning of a provision is distinct from the question of whether it is ambiguous or uncertain, and is quite different to the task conducted by Wheelahan J in Maribyrnong. HBCC submit it is an accepted principle of interpretation of an industrial instrument that admissible extrinsic material may be used to aid the interpretation of a provision in an enterprise agreement with a disputed meaning, and the fact Wheelahan J resorted to the textual and contextual factors in the interpretation of an enterprise agreement indicates that there was ambiguity in the words of the Maribyrnong Agreement, so in that sense the decision is somewhat helpful.

[74] HBCC contend the ASU sets a high bar for the establishment of an ‘industrial practice’ and that standard is not accepted by HBCC in the context of the exercise of the Commission’s discretion under s 217. It relies on aspects of the industrial context and realities that suggest that the discretion should be exercised in its favour, and submits that the fact that some Councils might have negotiated different terms, be subject to different agreements with different wording, does not suggest that there wasn’t an historical practice that started with the VLA Award in 2004. It says it doesn’t accept it is a matter of everybody having the same position or everybody having a different position, and refers to the reply evidence of Ms Rowe who is aware of two other Councils that do not pay redundancy pay where an Equivalent Offer is rejected by a non-transferring employee.

[75] HBCC submits the historical position, industrial reality, and context of the Agreement it relies upon includes the Act and the VLA Award which demonstrate a scheme by which an employee who refuses to accept an equivalent transfer offer would not be entitled to redundancy pay. It argues the Commission is required to determine whether the parties intended to confer an additional entitlement on employees, and says the various agreements referred to by the ASU are examples of where Councils agreed and intended to move away from the historical reality to confer the additional entitlement. It submits HBCC and the two Councils referred to by Ms Rowe in her evidence did not agree to do so. HBCC contend examples of negotiated changes in the enterprise agreements of other Councils only reinforce the point that whilst the various Councils began at the same historical industrial reality, there is no clear language in the Agreement in question that indicate an intention to move away from that position to confer an additional entitlement to employees.

[76] HBCC also contend that if there was no mutual intention to redundancy pay where an equivalent offer was made and rejected by an employee, then absent any other compelling circumstance, a variation application ought to succeed. The Commission was referred to the Full Bench decision in MSS Security in support of this argument. In that case the Full Bench said that it was possible that parties had different intentions as to the use of certain words in an enterprise agreement. It held that that even if there is no clear mutual intention to not pay the additional amount, it would normally be desirable to resolve an ambiguity to make it clear that the amount is not payable when there is an insufficient basis to find that the parties agreed to pay the additional amount. 46 HBCC argues that on that basis if the Court is exercising its discretion it can take into account that this would be a case where there would be a requirement to pay an additional amount, that being the payment for redundancy on failure to accept a transferring offer. HBCC say it is apt in this case because there is a demonstration, potentially, of a case where the Commission may find in the alternative to its submission that there simply was no mutual intention between the parties on this particular issue, perhaps would find that there was an intention by one party but not another.

[77] HBCC argue in response to the submissions regarding Ms Clark’s financial circumstances that she was on notice that it did not intend to pay her a redundancy payment when she made her decision not to accept the transfer offer. HBCC note no evidence has been provided about how the other four former employees may be affected by the variations sought and there are no other employees who would be affected by the proposed variations. HBCC also state another issue for the discretion is the Federal Court Proceedings. The former employees are yet to have their claims determined and HBCC argue the retrospective variations it seeks interferes with their asserted right but not their established rights. It argues if the discretion is not exercised, their claims would be conducted in the face of what is an ambiguous clause contrary to the objectively ascertainable intention of the persons that made the Agreement. HBCC contend the Agreement was not intended to give rise to an entitlement to redundancy pay where an equivalent offer of employment had been refused, and in these circumstances it cannot be said that the rights of persons who made the Agreement, or were subsequently employed under it, have or would have established and confirmed rights interfered with by an order of retrospectivity. It argues, keeping in mind the statement about justice and merits set by Bianco Walling, it is not appropriate in the Commission’s discretion, not to vary where persons whose rights under the Agreement are being construed in an ambiguous situation that is not meritorious or just for that to occur, and on that basis it is appropriate for the Commission to make the variations sought.

Consideration

[78] On 30 January 2017, the Commission approved the Agreement. HBCC, the employer covered by the Agreement has made an application to vary a single enterprise agreement under s.217 (Variation Application). The principles that apply to the Commission’s consideration of s.217 applications are well settled and set out at [27] of this decision and I do not intend to repeat them again. The parties generally agree that before exercising my discretion to vary the Agreement, I must first identify whether the ambiguity or uncertainty relied upon exists. The presence of ambiguity or uncertainty is a jurisdictional prerequisite to the exercise of the discretion to vary the Agreement. The process of identifying ambiguity or uncertainty involves making an objective assessment of the words used in the provisions under examination. The words used are construed having regard to their context. 47 Though the task is not one of construction, and is distinct from determining the proper construction or true meaning of the provision, the words used in the Agreement are relevant, both in the context of the relevant clause and in the context of the Agreement as a whole.

[79] There are rival contentions and the basis of the respective contentions of the parties have been set out in some detail and are not restated at length again, however it is helpful to summarise those contentions. Specifically, the contention as to whether clauses in Part A render clause 17.7.1(b) of Part B of the Agreement of no effect. HBCC contends whether or not redundancy ought be paid to employees who are given an Equivalent Offer under a transfer of business, but refuse those offers, is ambiguous, or in the alternative, uncertain. The ASU contends that the text and context of the relevant clauses in the Agreement, and the history of those clauses render it clear and certain that the Agreement provides for employees who are made redundant in a transfer-of-business situation to receive redundancy payments, even if they reject an offer of employment from the incoming employer. HBCC argues that this was not the objective intention of the parties and seeks a variation to clarify the purported ambiguity or uncertainty to the relevant words in Part A on which the ASU relies. The mere existence of rival contentions is not a sufficient basis to conclude that there is ambiguity or uncertainty; the competing contentions should have merit. 48 It is therefore necessary to consider the text and context in Part A clause 11, clause 26 and the relevant clauses of the Redundancy Agreement in Part A Appendix “A” as part of my consideration as to whether ambiguity or uncertainty exist.

Ambiguity or Uncertainty

[80] In relation to the subject matter of redundancy, paragraph three of clause 11 of Part A, set out at [17], refers to circumstances where an employee is made redundant and is not transmitted or redeployed. The drafting in clause 11 is clear and concise in that HBCC is required to pay to an employee who is made redundant and is not transmitted and not redeployed their annual leave, long service leave, and redundancy entitlements in accordance with the provisions of the Agreement. There is no wording in clause 11 that could be construed to have the effect that an employee who declines to be redeployed should not be paid the redundancy entitlements. Clause 11 plainly provides that an employee who is not transmitted is to be paid redundancy entitlements. HBCC contend that reference to “in accordance with the provisions of the Agreement” in clause 11 suggests that the redundancy entitlement is determined in accordance with clauses throughout the entire Agreement and not only in accordance with Part A, giving rise to ambiguity. Reading the Agreement as a whole for the reasons set out below this cannot sensibly be the case.

[81] Clause 26 deals with the subject of redeployment and redundancy. Clause 26.2 provides that “All redundancies will be in accordance with the Hobsons Bay Redundancy Agreement included as Appendix A”. It is not contentious that Appendix “A” forms Part A of the Agreement. Clause 4 of Appendix “A” sets out the redundancy entitlements for employees of HBCC arising out of “any redundancy situation”. It is clear from the text in the introductory paragraphs of Appendix “A” that redundancy entitlements in clause 4 of Appendix “A” apply where HBCC as a result of either a structural review conducted by Council, or in the event of municipal boundary change and/or ‘de-amalgamation’, or for “any other reason” decides that an employee’s services or position is not necessary.

[82] There is nothing in the plain text by which the words in clauses 11, 26.2 or Appendix “A” can be read to suggest the entitlements in Appendix “A” do not apply to an employee who rejects an offer made by the incoming employer, who is not redeployed, and whose employment is terminated based on redundancy. Clauses 11, 26.2 and Appendix “A” are unambiguous in their terms.

[83] Having found that the relevant clauses in Part A are unambiguous in their terms, the next matter to consider is whether clause 17 of Part B which also deals with redundancy and redundancy entitlements give rise to an ambiguity or uncertainty. Clause 17.7.1(b) of Part B deals with the exclusion of redundancy pay entitlements for an employee who has rejected an offer of employment with the proposed new employer (to whom business has been transferred) that meets the circumstances set out in the subclauses 17.7.1(b)(1) and 17.7.1(b)(2). The text in clause 17 is on a plain reading unambiguous in its terms. However, HBCC submits an uncertainty arises out of the interaction between Part A and Part B of the Agreement, in particular clause 11 of Part A and clause 17.7 of Part B. HBCC submits ambiguity is created by the fact that Parts A and B of the Agreement are to be read “wholly in conjunction”.

[84] As outlined above at [15] the Agreement has three parts; Part A and B are relevant to the application before me. Part A of the Agreement contains a number of operative provisions and Part B is a partial replication of the former Victorian Local Authorities Award 2001. The drafting of clause 6 of Part A of the Agreement is clear and unambiguous. Clause 6 of Part A describes the relationship to the award schedules and the NES. Clause 6 provides at (a) the Agreement replaces the HBCC 2013-2016 Agreement, 6(b) describes the relationship between the Agreement to the NES, 6(c) sets out the relationship of the Schedules and provides that Part A should be read and interpreted wholly in conjunction with Part B. It is clear from the text of clause 6(d) that where there is inconsistency between the relevant clause in Part A, Part B and Part C, Part A of the Agreement will prevail.

[85] Wheelahan J in Maribyrnong 49 considered an agreement of similar terms. The obvious differences in the relevant provision in Part A and Part B of the Agreement have been set out in that decision which the ASU and ANMF rely on in their submission. Wheelahan J identified a number of differences between the redundancy provisions in Part A and the redundancy provisions in Part B and concluded that “Part B of the Agreement cannot sensibly work together with Part A”.50 In the present matter it is quite clear from the text when read in the context of the Agreement as a whole that Appendix “A” in Part A of the Agreement prevails over clause 17 in Part B of the Agreement. There are obvious differences that exist between clause 17.7 Part B which suggests that no redundancy entitlement arises where an employee rejects an offer of employment with the transmittee and Appendix “A” of Part A which has no such limitation. Notably the differences include more generous redundancy entitlements in Part A than those in Part B. The differences are obvious from the text and one does not need to interpret either of those clauses to ascertain they exist. There is no uncertainty or ambiguity that arises as a result of the differences in the redundancy terms in Part A and Part B of the Agreement because any inconsistency in those terms is resolved by clause 6 of Part A. It is reasonable to conclude that the redundancy provisions in Part B and Part A cannot sensibly operate together and where there is inconsistency, Part A of the Agreement prevails.

[86] In Bianco Walling a Full Federal Court rejected the proposition that an examination of context and extrinsic material was not permissible until an ambiguity was first found to exist – the Court in that case held that the Commission is not constrained by agreement interpretation principles and evidence of surrounding circumstances including common intention or objectively established past or current practice may be regarded in assessing whether an ambiguity or uncertainty exists. 51 The Commission may look to the history of clauses in determining whether ambiguity or uncertainty exists.

[87] The statutory context, the NES and the incorporated Awards include objective facts to which regard may be had for this purpose. The NES provide minimum redundancy entitlements, those entitlements are reflected in Part B of the Agreement. Clause 6 provides that the NES will be read in conjunction with the Agreement. Where there are matters in the NES which are not specifically included in the agreement then they shall apply to all employees covered by the Agreement. Where the NES are more beneficial than those provided in the Agreement then the NES shall apply to the extent of any inconsistency. Appendix “A” of Part A of the Agreement contains more beneficial entitlements than those of the NES and than those set out in Part B, it can be inferred that it was the intention of the parties for that to be the case. I do not otherwise consider the context of the statutory provisions to be of assistance in the task of determining ambiguity or uncertainty.

[88] The historical evidence establishes that the relationship to the Award found in clause 6 of Part A of the present Agreement also appeared in the 2001 Agreement, the difference being the 2001 Agreement did not contain Part B and C found in the current Agreement. However the 2001 Agreement did include text to the effect that any inconsistency between the Agreement and the Awards listed in clause 6 of that Agreement, the Agreement shall prevail to the extent of the inconsistency. The current Clause 6 of Part A is materially the same as its predecessor Agreements and the 2007 Agreement is the first instance in which the present clause appears. Historically it has been the case that to the extent of any inconsistency Part A of the Agreement prevails over Part B of the Agreement and there were no changes made to alter the wording in the present Agreement. In context the bargaining history or mere absence of negotiations pertaining to clause 6 of Part A does not assist in determining ambiguity or uncertainty.

[89] The historical origins of clause 11 of Part A which deals with transmission of business is set out in some detail above. In the 2001 and 2004 Agreement the clause read as follows:

[90] The text in the 2001 and 2004 Agreement expressly states that an employee who elects not to transfer is still entitled to redundancy payments in accordance with the redundancy agreement. The text as it appears in clause 11 of Part A of the current Agreement is identical to the text that appears in the 2007, 2010 and 2013 Agreements.

[91] The historical context establishes that employees were entitled to the redundancy provisions in Appendix “A” when they elected not to transfer to the transmittee. Ms Terri Rowe, Manager People and Culture at HBCC led the 2010 and 2013 Agreement negotiations. Ms Rowe submitted evidence of the log of claims for the 2010 and 2013 Agreements. Other than claims for better redundancy entitlements Appendix “A” remained substantially the same. The Current clause 26.2 of Part A is materially the same as clause 25.2 of the 2013 Agreement, clause 21.2 of the 2010 Agreement and clause 20.2 of the 2007 Agreement. There is nothing in the submissions or evidence of the parties pertaining to the history of the aforementioned clauses that would support a finding that there was a relevant ambiguity or uncertainty.

[92] For the reasons set out above, I am not persuaded that an ambiguity or uncertainty exists. Accordingly, the Commission’s power under s.217 cannot be exercised and the Variation Application is dismissed.

COMMISSIONER

Appearances:

N. Campbell of Counsel for Hobsons Bay City Council
J. Hartley of Counsel for the Australian Municipal, Administrative, Clerical and Services Union
B. Megennis of the Australian Nursing and Midwifery Federation

Hearing details:

2021.
Melbourne (by video link via Microsoft Teams):
July 22.

Printed by authority of the Commonwealth Government Printer

1 AE423189

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

3 Ibid at [29]

4 Ibid at [31]

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

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

7 Bianco Walling Pty Ltd v Construction, Forestry, Maritime, Mining and Energy Union [2020] FCAFC 50 at [67]

8 Ibid

9 Ibid at [68]

10 Ibid

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

12 Termination, Change and Redundancy Case; sub nom Amalgamated Metals Foundry and Shipwrights’ Union and BHP Co Ltd re Termination, Change and Redundancy (AILR) (Job Protection/Termination Change and Redundancy); (1985) 27 AILR 1; (1984) 295 CAR 673; (1984) 9 IR 115.

13 [2019] FCA 773

14 Ibid at [57]

15 Ibid at [56] – [60]

16 Ibid at [57]

17 Ibid at [56(1)] – [56(2)]

18 Ibid at [56(3)]

19 Ibid at [56(4)]

20 Ibid at [56(5)] – [56(6]

21 Ibid at [56(7)]

22 Ibid at [57]

23 Ibid

24 Ibid at [58] – [59]

25 Ibid at [60(1)]

26 Ibid at [60(2)]

27 Ibid at [60(3)]

28 Ibid at [60(4)] – [60(5)]

29 Ibid at [60(6)])

30 Ibid at [60(7)]

31 [2020] FCAFC 50 at [67]

32 Ibid at [68]

33 [2016] HCA 47 at [41] – [42] (Kiefel J) and [103] – [104] (Gageler, Nettle and Gordon JJ)

34 Seymour Whyte Constructions Pty Ltd v Ostwald Bros Pty Ltd (in liq) (2019) 99 NSWLR 317 at 323 [13] (Leeming JA, Payne and White JJA agreeing)

35 Ibid

36 Seymour Whyte Constructions Pty Ltd v Ostwald Bros Pty Ltd (in liq) (2019) 99 NSWLR 317 at 344 [122] (Sackville AJA, Leeming, Payne and White JJA and Emmett AJA agreeing); Simic v New South Wales Land and Housing Corporation at [41] (Kiefel J)

37 Re Sheraton Towers Southgate–LHMU–Employee Relations Agreement 2003 (PR935830, 7 August 2003) at [35] (Watson SDP)

38 Public Transport Corporation of Victoria v Australian Rail, Tram and Bus Industry Union (1995) 140 IR 388 at 392 (Ross VP, Polites SDP, Grimshaw C); Re Beltana No 1 Salaried Staff Certified Agreement 2001 (PR932468, 3 June 2003) at [17] (Marsh SDP)

39 Community and Public Sector Union v Telstra Corporation Ltd (2005) 139 IR 141 at 153 [45]

40 [2016] FWCFB 4979

41 [2016] FWCA 2774 at [115]

42 See Public Transport Corporation of Victoria v Australian Rail, Tram and Bus Industry Union (1995) 140 IR 388 at 392; Re Australian and International Pilots Association (2007) 162 IR 121 at 129; [2007] AIRC 303 at [17]; Re Beltana No 1 Salaried Staff Certified Agreement 2001 (PR932468, 3 June 2003) at [23]; Re Bianco Walling Pty Ltd (Gepps Cross Site) Enterprise Agreement 2016 Off Site[2020] FWCA 5777 at [110]; Re Ventia Boral Amey NSW Pty Ltd Enterprise Agreement 2018[2019] FWCA 4371 at [5]

43 See the cases cited above at endnote 42 and also Bianco Walling Pty Ltd v Construction, Forestry, Mining and Energy Union [2020] FCAFC 50 at [69]; Cannon Hill Services Pty Ltd v Australasian Meat Industry Employees Union[2016] FWC 7256 at [12]; Colnvest v Visionstream Pty Ltd (2004) 134 IR 43 at [43]; Community and Public Sector Union v Telstra Corporation Ltd (2005) 139 IR 141 at [20]

44 Construction, Forestry, Maritime, Mining and Energy Union v Specialist People Pty Ltd[2019] FWCFB 6307 at [42]

45 [2020] FCAFC 50 at [67]

46 Ibid at [23]

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

48 Ibid at [49] as cited in Bianco Walling at [70]; see also Construction, Forestry, Maritime, Mining and Energy Union v Specialist People Pty Ltd [2019] FWCFB 6307 at [41]

49 [2019] FCA 773 at [56] - [60]

50 Ibid [57]

51 Bianco Walling Pty Ltd v Construction, Forestry, Maritime, Mining and Energy Union [2020] FCAFC 50 at [87]

Hobsons Bay City Council

[2021] FWC 6037

30 SEPTEMBER 2021

DECISION