Kennedy Staff Pty Ltd and Kennedy Staff Geelong Pty Ltd

[2022] FWCA 898

[2022] FWCA 898

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009

s.217—Enterprise agreement

Kennedy Staff Pty Ltd and Kennedy Staff Geelong Pty Ltd

(AG2022/441)

Kennedys (Aust) Pty Ltd and CEPU - Plumbing Division (Victorian Branch) Enterprise Agreement 2021

Plumbing industry
DEPUTY PRESIDENT BELL	MELBOURNE, 25 MARCH 2022

Application for variation of the Kennedys (Aust) Pty Ltd and CEPU - Plumbing Division (Victorian Branch) Enterprise Agreement 2021

1. Kennedy Staff Pty Ltd and Kennedy Staff Geelong Pty Ltd are employers covered by the Kennedys (Aust) Pty Ltd and CEPU – Plumbing Division (Victorian Branch) Enterprise Agreement 2021 (Agreement), which was approved by the Fair Work Commission (Commission) on 19 November 2021. Under the Agreement, the employers are described collectively as the ‘employer’ but are covered severally, not jointly, as separate single interest employers when each employs (individually not jointly) an employee in the name Kennedys (Aust) Pty Ltd (ABN 47 160 208 613). For consistency, the applicants are described as the ‘employer’ in these reasons.

1. The employer has made an application under s 217(1) of the Fair Work Act 2009 (Cth) (Act) to remove an ambiguity or uncertainty in certain pay tables in the Agreement. There are two categories of variation sought, each connected with the pay tables in cl.71 of the Agreement for apprentices. In summary, the variations sought are:

·   First, the allowance described as ‘Travel (per day)’ (the daily travel allowance) in the pay tables for apprentices on pages 135 to 137 of the Agreement are currently identical to the relevant apprentices’ hourly rate in those tables. The employer contends the correct rate – for which a variation is sought – is that the daily travel allowance for apprentices ought to be one-quarter of the hourly rate.

·   Second, and again for apprentices only, the table of rates in cl.71 (Agreement, page 136) applicable for the first period on or after 1 March 2022 is the same as the rates for the earlier period (Agreement, page 135). The employer contends that the correct rate – for which a variation is sought - for the period on or after 1 March 2022 should be higher, as it ought to include an annual increase that was omitted.

1. The Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU) was notified of, and supported, the application. Also notified were each of the affected apprentices. The apprentices were given an opportunity to make any submissions or be heard, although none did so.

1. Section 217 of the Act provides that the Commission ‘may vary an enterprise agreement to remove an ambiguity or uncertainty’ on application. The employer (as defined) is a person entitled to make such an application. The principles applicable to an application under s.217 were considered by the Full Court of the Federal Court in Bianco Walling Pty Ltd v Construction, Forestry, Maritime, Mining and Energy Union[1] (Bianco).

1. It is not necessary to set out those principles in detail. It is sufficient to note that the existence of a relevant ambiguity or uncertainty is a jurisdictional fact required as a precondition to the exercise of the power.[2] The terms “ambiguity” and “uncertainty” are not synonymous, although there is some relationship between their meaning.[3]

“… There may, for example, be uncertainty in an enterprise agreement even when its terms are not ambiguous.  The uncertainty may arise from the application of the unambiguous terms to a given set of circumstances.  The distinction between patent ambiguity (linguistic ambiguity) and latent ambiguity (ambiguity in application) provides an illustration by analogy…”[4]

1. It is not necessary to interpret or construe an enterprise agreement for the purpose of s.217. “A provision may be ambiguous even though it is capable of interpretation”.[5] The ambiguity may be apparent on the face of the document or may become apparent only when extrinsic evidence is adduced.[6] Any established ‘common intention’ of parties concerning the impugned provision can be considered.[7]

1. As s.217 makes clear, if the jurisdictional requirements are met, the Commission “may” (not must) vary the agreement. Whether to exercise its discretion to vary the agreement will necessarily depend upon the circumstances of the matter.

The Agreement

1. By way of overview, the Agreement is structured into Parts A to E. In summary, Part A is directed at various machinery and mandatory clauses that apply to all employees covered by the Agreement. Part B similarly contains various terms and conditions that apply to all covered employees. Part C applies only to employees employed in certain work above a particular project value. Part D applies to employees employed in similar work but below a particular project value. Part E applies to employees engaged for different types of projects, such as ‘Commercial Residential Unit Industry Work’, among others.

The daily travel allowance variation sought

1. Turning to the first of the clauses where a variation is sought, cl.71 is titled “Wages (Part D)”. What follows in cl.71 is a series of tables with headings respectively directed at the classification of the employee, namely “Registered Plumber / Refrigeration Mechanic”, “Plumber (Provisional Registration) / Unregistered Plumber / Lagger”, “Plumbers Labourer”, and “Apprentices”.

1. There is a single table for each of the first three classifications. There are three tables for “Apprentices”. The additional tables for apprentices is evidently because it was not convenient to reduce the five categories of apprentices into a single table.

1. It is sufficient to illustrate the tables for “Registered Plumber / Refrigeration Mechanic” and the first of the tables for “Apprentices”. They are:

1. It can be seen from the table for Registered Plumbers that the hourly rate at the date of the approval of the Agreement is $40.90 and the daily travel allowance “Travel (Per Day)” is $10.23. The latter figure is one-quarter of the ordinary hourly rate, rounded up to the next cent. The same is the case for the other non-apprentice classifications (which are set out in different tables).

1. For apprentices, however, the hourly rate and the daily travel allowance are identical (and are also identical for pay periods after 1 March 2022 and 1 March 2023 which are set out in different tables).

1. As noted, the application by the employer states that the “correct” figures for the daily travel allowance should all be at one-quarter of the hourly rate. They were separately described as “typographical errors”.

1. Without more, that might not have been enough to indicate an ambiguity or uncertainty on the face of the Agreement, as there are differential rates in Part C of the Agreement that the applicant states are not reflective of a typographical error but were part of the bargain struck by the parties.

1. However, clause 72.3.1 of the Agreement states as follows (emphasis added):

“Travel in Own Time and / or from Worksite

72.3.1 An employee (except a plumbers’ labourer), who is required to provide his / her own transport and to travel in his / her own time to or from the work site within the radius from the centre for employment will receive an allowance of one quarter (1/4) of an hour per day travelling time calculated at ordinary time rates in addition to the amount of fares for each day on which the employee presents himself / herself for work on the job.”

1. That is, the ‘travel’ allowance component in Part D is pegged at one quarter of the hourly ordinary time rate. For the non-apprentice categories, the pay tables in cl.71 conform to what cl.72.3.1 provides. For apprentices, however, the tables in cl.71 and the provisions of cl.72.3.1 appear in conflict.

1. I am satisfied there is ambiguity and uncertainty in cl.71 noting the conflict with cl.73.2.1. The ambiguity and uncertainty also arise from the evidence of the applicants, without demur from the union, which was to the effect (and I accept) that the apprentice pay tables in cl.71 contained typographical errors and did not reflect the agreed bargain. That evidence indicates a common intention of the parties to the effect advanced by the applicants.

1. A correlative consequence is that the ‘x 5 days’ rows in the apprentice pay tables in cl.71 and the ‘Total Income’ row are ambiguous and uncertain. This follows because the first of those mentioned rows is simply a multiple of the daily travel allowance and the ‘Total Income’ row is a summation of the rows above it.

Apprentice pay increase – 1 March 2022

1. The second ambiguity or uncertainty concerns a different aspect of the apprentices’ pay table in cl.71. Within the pay tables in cl.71 for all classifications, there is provision for pay to increase after particular events: the base pay is from the date of the approval of the Agreement; the first increase occurs on or after 1 March 2022; the second and final increase occurs on or after 1 March 2023. The exception is for apprentices for the first pay period on or after 1 March 2022 – the amounts in that period are unchanged from the previous period.

1. While the absence of a pay increase for apprentices might cause an observer to wonder whether that was intended or not, that alone might not be sufficient to establish ambiguity or uncertainty. But in the present case, other than this one instance, there are agreed pay increases for every classification in each of Parts C, D and E of the Agreement for that time period, indicating a latent ambiguity. Moreover, the applicant’s evidence of what the relevant pay table “should” have contained – again without demur by the union – satisfies me that there is an ambiguity regarding the absence of any pay increase for apprentices in that period.

Conclusion

1. The application for variation has been made promptly following the approval of the Agreement. The variations have the support of the union. No affected party has indicated opposition and there are not matters of which I am aware which would weigh against the exercise of my discretion to vary the Agreement in the manner proposed.

1. The orders sought by the applicant included an order as to timing. The proposed orders sought that, in “accordance with s.165(3)” of the Act, the “determination” does not take effect until the first full pay period after 1 January 2022. The reference to s.165(3) appears to be an error, as it concerns the power to vary a modern award retrospectively, for which the Act allows in “exceptional” circumstances. I would decline to do so, even if that section applied.

1. In the circumstances, having found that the Agreement is ambiguous and uncertain, I exercise my discretion to remove that ambiguity and uncertainty by varying the Agreement by:

·   Deleting the three tables (and their associated headings and notes) under the heading “Apprentices” within clause 71 of the Agreement; and

·   Substituting those tables with the three tables in the Schedule.

1. The application is granted and the variations, as sought, will operate from the date of this decision.

DEPUTY PRESIDENT

SCHEDULE

The rates in the following table are payable from the first pay period on the date of approval of the Agreement

Apprentices	Adult Apprentice – 1st Year	Apprentice – 1st Year	Apprentice – 2nd Year	Apprentice – 3rd Year	Apprentice – 4th Year
Hourly Rate	$22.98	$18.29	$23.50	$30.61	$37.72
X 38 Hours	$873.24	$695.02	$893.00	$1,163.18	$1,433.36
Fares (Per Day)	$13.85	$13.85	$13.85	$13.85	$13.85
X 5 Days	$69.25	$69.25	$69.25	$69.25	$69.25
Travel (Per day)	$5.75	$4.58	$5.88	$7.66	$9.43
X 5 Days	$28.75	$22.90	$29.40	$38.30	$47.15
Total Income	$971.24	$787.17	$991.65	$1,270.73	$1,549.76
Overtime
Time and a Half	$34.47	$27.44	$35.25	$45.92	$56.58
Double Time	$45.96	$36.58	$47.00	$61.22	$75.44
Double Time and a Half	$57.45	$45.73	$58.75	$76.53	$94.30

Note:-                An employee provided with a Company Car (in accordance with Clause 47.20) will not be paid either the Fares Allowance and / or the Travel Allowance

Note     Where applicable, the Registration allowance, plumbing trade allowance, industry allowance and tool allowance are included in the hourly rates. 

Apprentices

The rates in the following table are payable from the first pay period on or after 1 March 2022

Apprentices	Adult Apprentice – 1st Year	Apprentice – 1st Year	Apprentice – 2nd Year	Apprentice – 3rd Year	Apprentice – 4th Year
Hourly Rate	$23.46	$18.64	$24.01	$31.33	$38.65
X 38 Hours	$891.48	$708.32	$912.38	$1,190.54	$1,468.70
Fares (Per Day)	$14.12	$14.12	$14.12	$14.12	$14.12
X 5 Days	$70.60	$70.60	$70.60	$70.60	$70.60
Travel (Per day)	$5.87	$4.66	$6.01	$7.84	$9.67
X 5 Days	$29.35	$23.30	$30.05	$39.20	$48.35
Total Income	$991.43	$802.22	$1,013.03	$1,300.34	$1,587.65
Overtime
Time and a Half	$35.19	$27.96	$36.02	$47.00	$57.98
Double Time	$46.92	$37.28	$48.02	$62.66	$77.30
Double Time and a Half	$58.65	$46.60	$60.03	$78.33	$96.63

Note:-                An employee provided with a Company Car (in accordance with Clause 47.20) will not be paid either the Fares Allowance and / or the Travel Allowance

Note     Where applicable, the Registration allowance, plumbing trade allowance, industry allowance and tool allowance are included in the hourly rates. 

Apprentices

The rates in the following table are payable from the first pay period on or after 1 March 2023

Apprentices	Adult Apprentice – 1st Year	Apprentice – 1st Year	Apprentice – 2nd Year	Apprentice – 3rd Year	Apprentice – 4th Year
Hourly Rate	$24.42	$19.37	$25.01	$32.69	$40.38
X 38 Hours	$927.96	$736.06	$950.38	$1,242.22	$1,534.44
Fares (Per Day)	$14.39	$14.39	$14.39	$14.39	$14.39
X 5 Days	$71.95	$71.95	$71.95	$71.95	$71.95
Travel (Per day)	$6.11	$4.85	$6.26	$8.18	$10.10
X 5 Days	$30.55	$24.25	$31.30	$40.90	$50.50
Total Income	$1,030.46	$832.26	$1,053.63	$1,355.07	$1,656.89
Overtime
Time and a Half	$36.63	$29.06	$37.52	$49.04	$60.57
Double Time	$48.84	$38.74	$50.02	$65.38	$80.76
Double Time and a Half	$61.05	$48.43	$62.53	$81.73	$100.95

Note:-                An employee provided with a Company Car (in accordance with Clause 47.20) will not be paid either the Fares Allowance and / or the Travel Allowance

Note     Where applicable, the Registration allowance, plumbing trade allowance, industry allowance and tool allowance are included in the hourly rates.

[1] Bianco Walling Pty Ltd v Construction, Forestry, Maritime, Mining and Energy Union (2020) 275 FCR 385; [2020] FCAFC 50

[2] Bianco, [49].

[3] Bianco, [67].

[4] Bianco, [75].

[5] Bianco, [67].

[6] Bianco, [67].

[7] Bianco, [68].

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