Linfox Armaguard Pty Ltd T/A Linfox Armaguard v Transport Workers' Union of Australia
[2024] FWCFB 373
•16 SEPTEMBER 2024
| [2024] FWCFB 373 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.604 - Appeal of decisions
Linfox Armaguard Pty Ltd T/A Linfox Armaguard
v
Transport Workers' Union of Australia
(C2024/2370)
| VICE PRESIDENT GIBIAN | SYDNEY, 16 SEPTEMBER 2024 |
Appeal against decision [2024] FWC 868 of Commissioner Hunt at Brisbane on 4 April 2024 in matter number C2023/1768 – entitlement of Armoured Vehicle Operators to be paid during meal breaks – whether entitlement to be paid arises only if an employee is required to remain in his or her vehicle – approach to the interpretation of an enterprise agreement – relevance of examination of successive enterprise agreements – extent to which history of negotiation of past agreements assists in construing present provisions of an enterprise agreement – employees entitled to be paid for a minimum period of 15 minutes at a rate of time and a half whether required to remain in the vehicle or not – decision of Commissioner correct – permission to appeal granted – appeal dismissed.
Introduction
Linfox Armaguard Pty Ltd (Armaguard or the appellant) is now the only major operator in the cash in transit industry in Australia. Armaguard is in dispute with the Transport Workers’ Union of Australia (the TWU) in relation to the entitlement of its employees to be paid with respect to meal breaks.
To be more precise, the dispute concerns whether clause 34.1.1 of the Armaguard Road (QLD) Agreement 2022 (the 2022 Agreement) provides an entitlement for employees to be paid for a minimum period of 15 minutes at the rate of time and a half during the meal break whether or not the employee is required to remain in his or her vehicle. The dispute was referred to the Commission under clause 15 of the 2022 Agreement. In a decision published on 6 April 2024 (the decision), Commissioner Hunt of the Fair Work Commission (the Commission) determined that clause 34.1.1 of the 2022 Agreement confers such an entitlement.[1]
Armaguard has filed a notice of appeal under s 604(1) of the Fair Work Act 2009 (Cth) (the Act), for which permission is required, against the decision. For the reasons that follow, the decision of the Commissioner is correct. Permission to appeal should be granted, but the appeal dismissed.
Background
Armaguard engages in business in the cash in transit industry throughout Australia and has branches in multiple states and territories across Australia. The 2022 Agreement covers and applies to Armaguard and its employees employed to operate its vehicles at its branches in Queensland. The employees covered under the 2022 Agreement are required to protect and guard cash and other valuables in a vehicle while in transit between Armaguard’s relevant branch and the premises of customers. These employees are known as Armoured Vehicle Operators (AVOs). At all times during their shifts, when operating an armoured vehicle, AVOs are required to carry a loaded firearm.
The history of the practices of AVOs in relation to meal breaks, and the entitlements conferred by successive enterprise agreements applying to the AVOs, has some relevance to the submissions advanced by Armaguard and the TWU. It is appropriate to summarise that history at least briefly.
Until around 2010, AVOs returned to their depots for their unpaid meal breaks. After 2010, the practice changed. Instead of returning to the depot, the AVOs were paid for a period of 20 minutes at time and a half while having lunch inside the armoured truck. The Commissioner recorded that Armaguard subsequently ceased to direct AVOs to remain inside the armoured vehicles during meal breaks. At least until 2021, Armaguard nonetheless continued to pay employees for a 15-minute period at a rate of time and a half during their meal breaks.
Armaguard relied on evidence which described the history of what it referred to as the ‘Lunch-on-Vehicle’ payment. The ‘Lunch-on-Vehicle’ payment has its origins in awards covering the cash-in transit industry over many years dating back at least to the Transport Workers (Armoured Vehicles) Award 1978 and later contained in the Transport Workers' (Armoured Vehicles) Award 2004. The modern award made as part of the award modernisation process, known as the Transport (Cash in Transit) Award 2010 and the current modern award, the Transport (Cash in Transit) Award 2020 (the 2020 Award), also contain make provision for ‘Lunch-on-Vehicle’ payments.
The relevant provisions of each of the awards which has existed since 1978 were essentially in the same terms. Clause 15.1 of the 2020 Award now provides that an employee, other than a shift worker, is allowed an unpaid meal break of a regular length of between 40 minutes and one hour. Clause 15.2 then provides as follows:
15.2 Break inside armoured vehicle
(a) Where an employee is required to remain inside an armoured vehicle at the direction of their employer for security reasons for part of the meal break, the employee will be paid at the rate of time and a half for the time spent inside the vehicle.
(b) The duration of the meal break must be one hour to enable all members of the vehicle’s crew to have some portion of their meal break outside the vehicle if they desire.
The development of the equivalent entitlement in the enterprise agreements applying to Armaguard’s operations in Queensland is more complex. Prior to 2019, there were separate enterprise agreements applying to Armaguard’s metropolitan and country operations in Queensland. The Armaguard and Transport Workers Union Queensland Metropolitan Branches Road Crew and Associated Areas Collective Agreement 2013 and the Armaguard Roadcrew Queensland Country Branches Collective Agreement 2014 dealt with meal breaks in two parts. The first part provided that employees were entitled each day to an unpaid meal break of 30 minutes. The second dealt with a situation where a break was spent inside the armoured vehicle and provided that, where an employee was required to remain inside the vehicle at Armaguard’s direction for security reasons for part of the meal break, the employee would be paid at a rate of time and a half for all time spent in the vehicle and, in the case of the metropolitan agreement, for a minimum of 15 minutes.
The Armaguard and Transport Workers Union Queensland Metropolitan Branches Road Crew and Associated Areas Collective Agreement 2015 and Armaguard and TWU Queensland Country Branches Road Crew & Associated Areas Collective Agreement 2015 contained equivalent provisions. Clause 32.2 of the 2015 agreements provided as follows:
32.2 Break inside armoured vehicle
32.2.1 Where an employee is required to remain inside an armoured vehicle at the direction of Armaguard for security reasons for part of the meal break, the employee will be paid at the rate of time and a half for the time spent inside the vehicle.
32.2.2 Employees required to spend time in the vehicle as set out in clause 32.2.1 will be paid a minimum of 15 minutes at time and a half. Accordingly employees working on a three person crew will be entitled to a 45 minute meal break.
The successors to the 2015 agreements were the Armagaurd and Transport Workers Union Queensland Metropolitan Branches Road Crew and Associated Areas Enterprise Agreement 2016 and the Armaguard and TWU Queensland Country Branches Road Crew & Associated Areas Agreement 2016 (the 2016 Agreements).
The evidence indicated that during negotiations for the new enterprise agreements in 2016, Armaguard sought to discontinue the practice of paying for the ‘Lunch in Truck Meal Break’ at the rate of time and a half. This was resisted by the TWU and its members and the Commissioner found that Armaguard agreed to continue making the meal break payment. New wording was negotiated for a paid meal break which was then included in the 2016 Agreements. In summary, clause 32 of the 2016 Agreements provided that for part of the meal break, employees would be paid at the rate of time and a half for a minimum of 15 minutes for security reasons. Where an employee was required to remain inside an armoured vehicle for longer than 15 minutes for security reasons, the employee was required to be paid at the rate of time and a half for the time spent inside the vehicle.
The 2016 Agreements were replaced by the Armaguard and Transport Workers Union Queensland Road Crew Enterprise Agreement 2019 (the 2019 Agreement) which consolidated the terms of the 2016 Agreements into a single enterprise agreement to apply to Armaguard’s operations in Queensland. The Commissioner found that Armaguard again sought to remove the payment, but ultimately did not press the claim. Clause 34 of the 2019 Agreement was in materially identical terms to clause 32 of the 2016 Agreements, save that it did not provide for variable loadings on the meal break payment. The Commissioner found that Armaguard continued to pay AVOs for 15 minutes of their meal breaks whether or not they were required to remain in their vehicles.
In or around August 2021, however, Armaguard stopped making the meal break payment to AVOs, which the TWU argued is an entitlement conferred by the 2019 Agreement.
Armaguard asserted that it was not required to pay employees a minimum of 15 minutes pay at time and a half during their 30-minute lunch breaks when they were not required to remain in their vehicles. A decision was apparently made at a national level to cease paying employees with respect to meal breaks throughout the country. Whether Armaguard could permissibly cease making payment employees during meal breaks was disputed by the TWU and employees in Queensland, although the dispute was not referred to the Commission under the 2019 Agreement.
In bargaining for the 2022 Agreement, the TWU sought ‘reinstatement’ of the meal break payment. The Commissioner found that the issue was ‘parked’ and, it would appear, simply not dealt with in the bargaining. Clause 34 of the 2022 Agreement replicated clause 34 of the 2019 Agreement without the parties seeking to address the dispute as to whether that clause required that AVOs be paid for a minimum of 15 minutes during their meal breaks at a rate of time and a half.
The TWU subsequently notified Armaguard of a dispute about the matter in December 2022. On 31 March 2023, the TWU made an application to the Commission under clause 15 of the 2022 Agreement. The dispute is one the Commission is able to deal with under s 739 of the Act and clause 15.8 of the 2022 Agreement provides that, if a dispute is not resolved by conciliation, the Commission ‘shall proceed to arbitrate the dispute and/or otherwise determine the rights and/or obligations of the parties to the dispute’.
Clause 34.1.1 of the 2022 Agreement, is the clause in dispute. It provides:
34. MEAL BREAKS
34.1 Regular meal break
Each employee is allowed an unpaid meal break of 30 minutes.
34.1.1The obligation to pay ordinary time under this clause in addition to weekly or other wages and overtime under any other clause is not cumulative, and the employee in cases coming within this clause is entitled only to the higher payment.
The meal period shall be taken not earlier than 3½ hours nor later than six hours after the commencement of work.
For part of the meal break prescribed above, employees will be paid at the rate of time and a half for a minimum of 15 minutes for security reasons.
If an employee is requested to work through their meal break they must be paid at the rate of double time until the commencement of their meal break.
Where an employee is required to remain inside an armoured vehicle longer than 15 minutes of the meal break at the direction of Armaguard for security reasons.
The employee will be paid at the rate of time and a half for the time spent inside the vehicle. Accordingly employees working on a three person crew will be entitled to a 45 minute meal break.
Employees who are rostered to work an 8 hour shift may take two 10 minute paid breaks or one 20 minute paid break at ordinary rates, per day which must be recorded in the Dyna Route System and/or on Run Sheets.
Employees who are rostered to work a four hour shift may take one ten minute paid break at ordinary rates, per day which must be recorded in the Dyna Route System and/or on Run Sheets.
The provision of the taking of these breaks is subject to the Road Crew meeting the servicing requirements of Armaguard’s clients each day.
Armaguard argued that the AVOs are not required to remain in their armoured vehicle during their unpaid meal break, and this decision, and the decision not to pay employees with respect to their meal breaks was made and implemented well prior to negotiations for the 2022 Agreement commencing.
The Commissioner’s Decision
The parties were unable to agree on the terms of the question the Commissioner should determine in arbitration of the dispute, although there does not appear to be any substantive difference between the questions posed by Armaguard and the TWU. The Commissioner decided to determine the dispute by adopting the question proposed by Armaguard which was in the following terms:
Is an employee who is not required to remain in his/her vehicle for any part of his/her lunch break entitled to payment under the third paragraph of clause 34.1.1 of the 2022 Agreement?
In her consideration of the matter, the Commissioner referred to the meal break provisions which applied to Armaguard’s employees around Australia. The Commissioner said that she was satisfied that clause 34.1 of the 2022 Agreement does no more or less than prescribe that the meal break is unpaid, and that it is of 30 minutes duration. The Commissioner noted it has been agreed throughout bargaining that, unlike the Award which provides for a minimum break of 30 minutes, Armaguard and its employees in Queensland have agreed to the unpaid meal break being for exactly 30 minutes. The Commissioner said that while Armaguard labelled clause 4.1 as the Basic Rule, she considered it more appropriate to label it as the starting point.[2]
The Commissioner went on to consider ‘Lunch in Truck’ entitlements in various Armaguard enterprise agreements around Australia. She noted that only the Tasmanian Agreement has a ‘Lunch-on-Vehicle’ allowance within the meal break clause. In the agreements in other States and Territories, the clauses are separated. The Commissioner observed that the common features across the agreements in other States and Territories are that most have a ‘Lunch on Truck Allowance’ heading and further the agreements each provide that Armaguard must require the employee to remain in the vehicle while taking their lunch break for the employee to be eligible to receive the payment. However, that is not the case in the agreements in Queensland. In the 2015 Agreements, the meal break payment was contingent on a direction from the employer to remain in the truck ‘for security reasons’. The Commissioner noted that the wording in the 2015 Agreements was explicit, clear and unambiguous, but that the evidence in the case showed that Armaguard provided employees the 15-minute payment at time and a half even when they were not directed by Armaguard to remain inside the armoured vehicle.[3]
The Commissioner observed that Armaguard sought to remove the payment when negotiating for the 2016 Agreement although Armaguard could have lawfully ceased making the payment by refraining from directing employees to remain in the vehicle. The TWU, on behalf of members, resisted the removal of the payment and Armaguard eventually agreed to maintain the payment in the Metropolitan Agreement. However, the Country Agreement provided that the payment would be eventually reduced during the life of the Agreement.[4]
The Commissioner then examined the circumstances in which the requirement that Armaguard direct the employee to remain in the vehicle was removed. The Commissioner said that it was clear that Mr Fernandez informed Armaguard that the TWU was trying to protect the entitlement. Mr Fernandez regarded Mr O’Brien as being a skilled negotiator. The Commissioner considered that Mr O’Brien should have known that the clause proposed by Mr Fernandez removed the requirement that Armaguard direct employees to remain in the vehicle for part of their lunch break to be entitled to the payment. Mr Fernandez did not have Mr O’Brien’s version of the clause when he sent Ms Thompson what he thought was the ‘agreed’ clause in June 2016.[5]
The Commissioner was satisfied that Mr Fernandez did not set out to hoodwink Ms Thompson and he provided what he understood to be the agreed version of the proposed clause. In any event, the Commissioner noted that Mr Chambers of Armaguard had been included in an email from Mr O’Brien to Ms Greig (who was also involved in the bargaining) on 4 March 2016, and could have forwarded that email to Ms Thompson. The fact that Mr O’Brien, Ms Greig, Ms Thompson or Mr Chambers may not have been cognisant of the removal of the payment being linked to Armaguard requiring employees is not because of any subterfuge of the TWU or Mr Fernandez.[6]
The Commissioner then turned to the meaning of the expression ‘for security reasons’ in clause 34.1.1 of the 2022 Agreement. She noted that, at one time, security reasons were relevant to the vehicle and the consignments prior to improved technology. The TWU witnesses informed the Commission that it was more relevant to personal safety and the carrying of a firearm and the fact that they can never fully relax while armed unless in the vehicle or at the depot. Security reasons could describe an unfolding situation; for example, an external threat where it would be prudent for employees not to leave the vehicle on account of what was going on outside of the vehicle.[7]
The Commissioner noted that during bargaining for the 2016 Agreements there was no discussion at the bargaining table as to what ‘security reasons’ meant, and whether this was in relation to the person or in respect of the vehicle and the consignment.[8] The Commissioner noted that the term ‘for security reasons’ is ambiguous and that she was satisfied that there was no meeting of the minds as to what the term means.[9]
The Commissioner noted that Mr Jones’ evidence was that security reasons would have to be qualified by someone like Mr Zagari, who was Head of Security at Armaguard. The Commissioner said that Mr Zagari’s evidence, while very impressive, carries no greater weight than that of any of the TWU witnesses as to the meaning of the phrase ‘security reasons’. In the same way that Armaguard submitted that the subjective intentions and beliefs of one negotiating party could not be received as evidence which would assist in the interpretation of a contentious clause, Mr Jones’ view of what it means is not determinative of the dispute.[10]
The Commissioner recorded that Armaguard contended that it was surprising that there was no celebration by the TWU of the outcome of the bargaining for the 2016 Agreements was that it had both defeated the Armaguard claim for removal of the payment and secured it as an entitlement with no conditions attached. The Commissioner said that not every clause is celebrated or commiserated line-by-line by bargaining parties and that the TWU should not be criticised in that regard.[11]
The Commissioner turned to the negotiations for the 2019 Agreement. The Commissioner found that Armaguard had again tried to remove the payment but had eventually agreed to retain it. The Commissioner observed that when Armaguard decided it did not need to make the payment in mid-2021, during the term of the 2019 Agreement, this would have been shocking and concerning for the TWU and its members. The decision was a national decision, affecting all relevant Armaguard agreements, yet the wording in the 2019 Agreement in Queensland is significantly different from that of other states and territories. The Commissioner considered that it was extraordinary that the TWU National Office did not authorise the Queensland branch to notify a dispute to the Commission while it waited for cases to be run in the Commission relevant to the ACT and Tasmania agreements. The Commissioner observed that if a dispute in respect of the 2019 Agreement in Queensland had been lodged in the Commission in 2021, it would have likely altered the course of the 2022 bargaining.[12]
The Commissioner was critical of the TWU waiting until December 2022 to lodge the dispute which was after the 2022 Agreement was approved. The Commissioner did not accept
Mr Wilkinson’s evidence that he only formed a strong view of the merits of the dispute after he did his research and was satisfied in December 2022 that the application should be made. The Commissioner did not accept Ms Dalton-Bridges’ evidence that the dispute was made in December 2022 due to the representations made by the members and increasing agitation/financial hardship. The Commissioner’s view was that the TWU waited for the 2022 Agreement to be approved before notifying the dispute, but it had, during the negotiations, every intent of bedding down the Agreement on a roll-over deal, and then taking an opportunity to advance this dispute.[13]
The Commissioner considered Armaguard’s submissions that the rule of contra proferentem should be applied to the TWU as the TWU is the party who seeks the benefit of a contractual term when it has been put by the TWU to Armaguard. The Commissioner said she was not satisfied that the rule of contra proferentem applied. The clause prepared by Mr Fernandez was shared between workplace relations specialists within Armaguard. Armaguard was comfortable with the words in the 2016 Agreements, the 2019 Agreement and the 2022 Agreement. When it removed the payment in 2021, Armaguard made its position clear in the 2022 Agreement, that the payment was only payable when employees were so directed by Armaguard to spend part of their meal break in the vehicle.[14]
The Commissioner concluded that the parties have simply agreed that the payment is to be made for security reasons, which is an explanation for the payment rather than a pre-condition. There is no pre-condition for the payment unlike other Armaguard agreements across the country where there is a requirement to be directed to remain in the vehicle.[15] The Commissioner determined that the answer is ‘Yes’ to the question posed by Armaguard. That is, the Commissioner found that an employee who is not required to remain in his/her vehicle for any part of his/her lunch break is entitled to payment under the third paragraph of clause 34.1.1 of the 2022 Agreement.
Grounds of Appeal
The grounds of appeal relied upon by Armaguard are as follows:
1. The Commissioner erred in her application of the principles applicable to the interpretation of ambiguous terms in the following respects:
(a) the Commissioner gave weight at paragraphs [603], [604] and [627] of her reasons to her finding that prior to the amendment of the term in the 2016 Agreements, Linfox had been paying employees for 15 minutes of their lunch break without requiring them to remain in their truck for that period. This was an erroneous finding and was in any event irrelevant to the task of interpreting relevant terms of the 2016, 2019 and 2022 Agreements;
(b) the Commissioner found erroneously at [626] that the term 'security reasons', when used in the 2016, 2019 and 2022 Agreements can encompass 'a vast array of situations' when in fact on a proper construction of the clause according to correct principle the term had one certain meaning;
(c) from [591] to [627] of her reasons, the Commissioner approached the task of interpretation of clause 34 of the 2022 Agreement by reference to evidence, findings and conclusions which were irrelevant and inadmissible in relation to the proper interpretation of the term, and failed to refer to, or apply, the principles properly applicable to the interpretation of an ambiguous term of an enterprise agreement, including by reference only to the terms of clause 34 in the context of and with regard to the purpose of the 2022 Agreement read as a whole and otherwise by reference only to extrinsic material properly admissible in those circumstances.
2. Having erred in her approach to interpretation, the Commissioner erred in finding that, on a correct construction of the 2022 Agreement, an employee is entitled to a payment at time and a half for a minimum of 15 minutes when the employee is not required to remain in his/her vehicle for any part of his/her lunch break.
As is apparent from the grounds, the appeal concerns the construction of an enterprise agreement. An enterprise agreement is an instrument given effect by the FW Act. The proper construction of a legal instrument is, obviously enough, a question of law to which there is only one true answer.[16] As such, the appeal is one to which the correctness standard applies.[17] The question on appeal, if permission is granted, is simply whether the answer given by the Commissioner is correct. If the answer given by the Commissioner to a question of construction is correct, any error made in the reasoning process will not result in the appeal being upheld. If we conclude that it was wrong, the appeal will be upheld, and the Full Bench must substitute the correct answer.[18]
Ground 1 in the notice of appeal alleges that the Commissioner erred in the application of the principles applicable to the interpretation of an enterprise agreement. Although the question on appeal is simply whether the construction arrived at by the Commissioner is correct, identification of error in the approach to the constructional task may, in some cases, be instructive in demonstrating that the outcome reached might be wrong. However, it is not necessary in this matter to address in detail the criticisms made by Armaguard of the Commissioner’s reasoning. It is sufficient to consider whether the construction adopted by the Commissioner is correct having regard to the submissions advanced on appeal.
Permission to appeal
Although we have concluded that the construction adopted by the Commissioner was correct, we have decided to grant permission to appeal. It should not be thought that permission to appeal will necessarily be granted in an arbitration undertaken under s 739 of the Act simply because a decision involves the interpretation of an enterprise agreement to which the correctness standard applies. Even if the answer to the question of construction raised is arguable, there will often be persuasive reasons for a Full Bench not granting permission to appeal simply to reagitate an argument not accepted at first instance.
In the circumstances of this matter, we have decided to grant permission to appeal for two reasons. First, although the conclusion reached by the Commissioner was correct, our reasoning for arriving at the same outcome differs somewhat from that of the Commissioner. We do not regard the content of enterprise agreements applying to Armaguard’s operations elsewhere in Australia or the evidence of interactions between Armaguard and the TWU as of assistance in construing the 2022 Agreement. Second, the submissions advanced by Armaguard raise some issues of significance in relation to the approach to interpretation, particularly as to the relevance of communications between bargaining representatives in the bargaining which preceded the making of an enterprise agreement.
Consideration
The question at issue before the Commissioner and on appeal concerns the proper construction of clause 34.1.1 of the 2022 Agreement. The principles to be applied in relation to the construction of enterprise agreements are well established. Enterprise agreements are to be construed as practical instruments that will apply to the working conditions known to employers and employees who work in the circumstances to which the instrument will apply.[19] Otherwise, words in an enterprise agreement are to be given their ordinary meaning, read within the instrument as a whole and in context, including the legislative context.[20]
Narrow or pedantic approaches to interpretation should be avoided. The search is for the meaning intended by the framers of the document objectively assessed, bearing in mind that the framers were likely of a practical bent of mind. They may have been concerned with expressing an intention in ways understood in the context of the relevant industry or industrial relations environment. The document can be read to give effect to its purpose, having regard to the industrial context despite inconsistencies which might give rise to a different reading.[21] Construction of ambiguous terms should, where possible, favour a sensible and practical industrial result.
The history of a particular provision is a potentially significant contextual matter in determining the proper construction of the terms of an enterprise agreement.[22] The history of provisions of an industrial instrument may demonstrate that expressions used in the instrument have been the subject of interpretation by the courts or industrial tribunals, which may then be taken to have an accepted meaning when, in the same or a similar context, they find their way into later instruments. Context may shed light on the proper meaning to be given to expressions that take their colour from the industrial context.[23]
However, it is important to bear in mind that enterprise agreements are sui generis instruments and cannot be treated as commercial contracts in the conventional sense.[24] An enterprise agreement is made by the employer and employees employed at the time the agreement is made who will be covered by it and, once approved, applies to all employees even those who did not agree to the agreement or who are subsequently employed.[25] Enterprise agreements are statutory artefacts and should not be treated as a form of bargain between unions or other representatives of employees and the relevant employer.
As a result, there are limits to the extent to which the history of bargaining can be properly brought to account in the constructional task unless they rise to the level of matters that would be notorious or known to those intended to be bound by the instrument who did not participate in the negotiations or dealings by which the terms were formulated. Evidence concerning the negotiations between bargaining representatives, which may not be known to the employee with whom the agreement is ultimately made, is of dubious assistance. In Sheehan v Thiess Pty Ltd [2019] FCA 1762, Colvin J explained (at [22]):
… peculiar contextual matters that may have been commonly known to representatives of Thiess and the Union when negotiating the terms of the Agreement are not matters to be brought to account. The Agreement is within the category of instruments where it is intended to apply to parties who were not participants in the process by which the terms of the instrument were formulated. In such cases, it may not be appropriate for surrounding circumstances to be brought to account unless they rise to the level of matters that would be notorious or known to those intended to be bound by the instrument who did not participate in the negotiations or dealings by which the terms were formulated: see, for example, Allandale Blue Metal Pty Ltd v Roads and Maritime Services [2013] NSWCA 103 (a case concerned with planning consents); Lion Nathan Australia Pty Ltd v Coopers Brewery Ltd [2006] FCAFC 144; (2006) 156 FCR 1 at [57]‑[66], [73] (Weinberg J), [225]‑[226] (Lander J), cp [123]‑[124] (Kenny J) (a case concerned with company constitutions); and Westfield Management Limited v Perpetual Trustee Company Limited [2007] HCA 45; (2007) 233 CLR 528 at [36]‑[39] (Gleeson CJ, Gummow, Kirby, Hayne and Heydon JJ) (a case concerned with easements).
Enterprise bargaining will often involve a competition between disparate interests. The general objective of employees is to increase wages and improve entitlements while the general objective of the employer is to reduce or resist an increase in employment costs. Where the economic power of the bargaining parties are not equal, the resulting agreement may more likely reflect the inequality of bargaining strength than industrial fairness. Further, an enterprise agreement will likely reflect the compromises made in the bargaining process. An industrial bargaining process will not always produce an agreement where each entitlement provided will be either objectively reasonable or rational and in harmony with other entitlements, or based on some objectively discernible purpose that may have explained the reason for its adoption in a predecessor agreement made under a different bargaining process.[26]
The appeal requires the Full Bench to construe clause 34 of the 2022 Agreement. To say that clause 34 is unhappily drafted is perhaps an understatement. The clause deals with the length and timing of meal breaks as well as payment for meal breaks in a manner that is not entirely consistent or clear. The parties both accepted that there are formatting errors within the clause, at least in that the fifth paragraph and first sentence of the sixth paragraph of clause 34.1.1 should be read together as a single sentence. The Full Bench was told that the reference in the sixth paragraph of clause 34.1.1 to three person crews is a ‘long forgotten historical artefact’ and have not existed for decades. The absence of internal numbering is further demonstrative of a provision which is not well drafted. In those circumstances, appeals to coherence or to adopting an approach of ensuring that all words in the clause be given work to do are of limited value.
It is appropriate to first consider the text of clause 34. Armaguard relied primarily on two aspects of the text of the clause which it contended are inconsistent with the Commissioner’s construction. Armaguard submitted that that clause 34.1, in providing that each employee is allowed an unpaid meal break of 30 minutes, provided for what it referred to as the ‘basic rule’. The ‘basic rule’ established by clause 34 was, according to Armaguard’s submissions, that meal breaks are to be unpaid. It submitted that clause 34.1.1 must be taken to give rise to exceptions to the ‘basic rule’ that meal breaks are unpaid because, otherwise, clause 34.1 would be immediately contradicted by the subsequent clause and would be untrue in all circumstances.
The second aspect of the text of clause 34 relied upon by Armaguard concentrated on the words ‘for security reasons’ in the third paragraph of clause 34.1.1. Armaguard submitted that the Commissioner’s construction gives the words ‘for security reasons’ no work to do. To give it work to do, Armaguard contended that the phrase ‘security reasons’ in the 2022 Agreement should be read and interpreted as ‘required to remain inside an armoured vehicle at the direction of Armaguard for security reasons’. It was submitted that any other construction would mean that the phrase ‘security reasons’ would have a different meaning in the third paragraph and the fifth paragraph of clause 34.1.1. Such a construction would be inconsistent with the principle that, ordinarily, a term used in one place in an agreement will be presumed to have the same meaning when used in a different part of the agreement.
The textual contentions advanced by Armaguard cannot be accepted. The Commissioner was correct to describe the provision for an unpaid meal break of 30 minutes in clause 34.1 as a ‘starting point’. Another way in which it may be described is as the default position. The various paragraphs within clause 34.1.1 then deal with the timing of meal breaks and the circumstances in which, and the extent to which, employees are to be paid with respect to meal breaks. Although the clause is not well drafted, we do not believe that the construction adopted by the Commissioner can be reconciled with the language of clause 34 read as a whole. The default position is that the meal break is of 30 minutes duration and is unpaid. An employee is, however, entitled to be paid to the extent that clause 34.1.1 provides such an entitlement.
That conclusion is reinforced by the third paragraph of clause 34.1.1. The third paragraph provides that for part of the meal break ‘prescribed above’ employees are to be paid at the rate of time and a half for a minimum of 15 minutes. The meal break ‘prescribed above’ can only be a reference to the meal break envisaged by clause 34.1 and which is taken within the timeframe prescribed in the second paragraph of clause 34.1.1. The express language of the third paragraph of clause 34.1.1 indicates that 15 minutes of the meal break referred to in clause 34.1 is to be paid. The third paragraph of clause 34.1.1 does not condition the entitlement to be paid for a minimum of 15 minutes of the meal break by reference to a direction or instruction being issued by Armaguard. The plain language of the third paragraph of clause 34.1.1 is inconsistent with the construction urged by Armaguard.
The practical effect of clause 34.1 and the third paragraph of 34.1.1, when read together, is that for a 30-minute break, employees receive the equivalent of payment for 22.5 minutes with the remaining 7.5 minutes unpaid. We do not accept that this creates a contradiction or an absurd result. The clauses were drafted at different times. Prior to the 2016 Agreements, if an employee was required to remain in the vehicle during part of the meal break, he or she was entitled to be paid for a minimum of 15 minutes at time and a half. If an employee was not required to remain in the vehicle, he or she would not receive the payment and simply have an unpaid break. The fact that there no longer appear to be circumstances in which an employee will have an unpaid meal break is likely to be reflective of the drafters of the 2016 Agreements being non-lawyers of ‘a practical bent of mind’. Although it may have been appropriate to amend clause 34.1 at the same time as inserting the third paragraph of 34.1.1, the fact that this was not done reflects the common practice in negotiating enterprise agreements that some clauses are amended or omitted while others remain unchanged and are carried over to successive enterprise agreements.
Similarly, Armaguard’s complaint that the third paragraph of clause 34.1.1 is inconsistent with the fifth and sixth paragraphs also needs to be considered in the context of the fifth and sixth paragraphs being in the 2015 Agreements and earlier versions of enterprise agreements applying to Armaguard and its employees. The fifth and sixth paragraphs of clause 34.1.1 of the 2022 Agreement apply to circumstances which since 20 August 2021 either rarely or no longer exist. Three person crews have not been used for many years. The reference to ‘security reasons’ in fifth and sixth paragraphs of clause 34.1.1 is squarely in relation to the security of the vehicle as the provision originates from the time that employees were required to have part of their meal break in the vehicle to ensure the security of the vehicle. However, the same cannot be said about the reference to ‘security reasons’ in the third paragraph of clause 34.1.1 given that this clause was drafted in 2016 when Armaguard no longer had concerns about the security of the vehicle. Consequently, ‘security reasons’ in the third paragraph refers to the work environment whereas the same term in the fifth and sixth paragraphs refers to the security of the vehicle. There is no inconsistency when the phrases are understood in this way.
Armaguard suggested that the reference to ‘security reasons’ had a well-understood and long-standing industrial history. Armaguard suggested that the provisions which have been contained in awards applicable to the cash in transit industry for decades established a general understanding that payment for meal breaks arose where there was a requirement to remain in the vehicle during the break period. The difficulty with that submission is that it finds no support in the third paragraph of clauses 34.1.1 of the 2022 Agreement. Clause 34 of the 2016 Agreements, the 2019 Agreement and the 2022 Agreement removed the link between the entitlement to payment and any direction or instruction by the employer. The contrast between the wording of the award provisions and clause 34 of the 2016 Agreements, the 2019 Agreement and the 2022 Agreement supports the construction adopted by the Commissioner.
Having regard to the natural and ordinary meaning of the words in the third paragraph of clause 34.1.1, we agree with the conclusion of the Commissioner that the words ‘for security reasons’ are not a pre-condition to the payment being made, but rather an explanation. We do not accept Armaguard’s submission that the words ‘for security reasons’ have no work to do. The meaning of the expression ‘for security reasons’ must be considered in the context of the objective background facts that existed at the time the clause was inserted into the Agreement. By 2016, technology had largely overcome concerns about the security of vehicles. Nevertheless, the nature of the cash in transit industry specifically contemplates that vehicles and those who operate them could be subject to criminal attack. The cash in transit industry involves the transport of cash and other valuables in vehicles which are constructed to withstand armed attack from ordinary handheld weapons. AVOs may be safer in vehicles than they were previously, however they are still required to carry firearms at all times. The phrase ‘for security reasons’ acknowledges the potentially dangerous environment in which AVOs work and that they are required to be constantly vigilant due to carrying a firearm.
Both parties referred to the history of the successive enterprise agreements which applied to Armaguard’s operations in Queensland in support of their respective positions. There can be little doubt that an objective analysis of the history of the agreements supports the construction adopted by the Commissioner. Until the 2016 Agreements, the applicable industrial instruments provided payment for part of the meal break only if Armaguard directed an employee to remain inside an armoured vehicle for security reasons during this period. However, the objective background facts establish a number of matters which are relevant to the context and purpose of the meal break payment clause.
The evidence indicated that in the years before armoured vehicles were able to be located and kept secure through GPS tracking, three person crews were necessary so that one crew person could remain in the vehicle at all times including during the lunchbreak. Three person crews were eventually replaced by two person crews, and it was no longer necessary for employees to have lunch in vehicles because of technological changes which improved the security of vehicles. Armaguard continued to provide payment for part of the meal break, although it did not require employees to remain in their vehicles. Armaguard proposed to remove the clause providing for lunch in vehicle payments during negotiations for the 2016 Agreements, which was resisted by the TWU. Mr Fernandez then proposed a new clause with revised wording, which in effect reflected the practice of Armaguard at the time of paying employees for part of the lunch break in circumstances where employees were not required to remain in their vehicles. This clause was accepted by Armaguard.
When assessed objectively against this background, the parties’ actions in amending the clause during negotiations for the 2016 Agreements are consistent with an intention to change the meaning of the clause to provide that there was no longer a requirement for employees to remain in the truck to receive payment for part of the lunch break. We do not accept Armaguard’s contention that the parties wanted to maintain the status quo and that this necessarily involved retaining a requirement that employees are directed to remain in the vehicle as a condition of payment being made. AVOs wanted to continue receiving a paid meal break and this is what was achieved by Armaguard’s acceptance of Mr Fernadez’s clause.
Armaguard resisted that conclusion by referring to the positions of the bargaining representatives in the bargaining which preceded the making of the 2016 Agreements. In short, Armaguard contended that the conclusion to be drawn from the events was that the parties changed the wording of clause 34 without changing the intended effect of the provision. Armaguard contended that what occurred in the bargaining preceding the making of the 2016 Agreements was that it sought to withdraw the benefit of payment for a period the employee was required to remain in the vehicle. Although it did not ultimately press that claim, Armaguard contended that it was inherently unlikely that it would have withdrawn the claim to discontinue payment but also gone further and agreed to an entitlement to be paid for part of the meal break even when an employee was not required to remain in the vehicle.
We do not accept this history can be relied upon to support the construction advanced by Armaguard. The submissions rely upon the positions communicated between bargaining representatives in the context of bargaining for the 2016 Agreement. For the reasons we have set out above, we doubt that the content of communications between bargaining representatives is capable of being relied upon in aid of the interpretation of an enterprise agreement which is subsequently made. It is doubtful that the history relied upon by Armaguard would be relevant to the interpretation of the 2016 Agreements. We reject the submission that communications between Armaguard and the TWU in the course of bargaining for the 2016 Agreements could be taken into account in relation to the interpretation of the 2022 Agreement.
Armaguard did rely upon two documents which were ballots collected by the TWU to gauge the level of support amongst its members for proposals put forward by Armaguard in the course of bargaining for the 2016 Agreements. The second ballot recorded the proposal of the company and the delegates as being ‘Lunch in Truck NO CHANGE’. Armaguard submitted that this was acknowledgement that the new provision was not intended to change the effect of the 2015 Agreements. There are at least two difficulties with that submission. The first is that the ballot document is ambiguous. In circumstances in which the Commissioner found that Armaguard was paying employees during meal breaks whether or not they were required to remain in their vehicle, the indication that there would be no change could be a reference to the practice rather than the existing enterprise agreement provision. The second difficulty is that the same clause was repeated in the 2019 Agreement and the 2022 Agreement. We do not accept that communications to employees in bargaining for the 2016 Agreements could be relevant to the interpretation of a successor enterprise agreement made in 2022.
The construction adopted by the Commissioner is correct. We agree with the Commissioner’s conclusion that an employee who is not required to remain in their vehicle for any part of their lunch break is entitled to payment under the third paragraph of clause 34.1.1 of the 2022 Agreement.
Conclusion
For the reasons set out above, permission to appeal should be granted, but the appeal must be dismissed. We order that:
(a)Permission to appeal is granted; and
(b)The appeal is dismissed.
VICE PRESIDENT
Appearances:
Mr D Williams, solicitor, MinterEllison for the Appellant.
Mr P Boncardo, of counsel, instructed by Ms H Dalton-Bridges, Senior Industrial Officer, Transport Workers Union, for the Respondent.
Hearing details:
2024.
Sydney.
13 June.
[1] Transport Workers’ Union of Australia v Linfox Armaguard Pty Ltd T/A Linfox Armaguard[2024] FWC 868.
[2] Ibid at [593]-[596]
[3] Ibid at [597]-[603].
[4] Ibid at [604]-[609].
[5] Ibid at [611]-[613].
[6] Ibid at [617]-[618].
[7] Ibid at [620]-[625].
[8] Ibid at [627].
[9] Ibid at [628].
[10] Ibid at [628].
[11] Ibid at [629]-[631].
[12] Ibid at [632]-[636].
[13] Ibid at [642]-[643].
[14] Ibid at [648]-[651].
[15] Ibid at [652]-[654].
[16] Onesteel Manufacturing Pty Ltd v BlueScope Steel (AIS) Pty Ltd [2013] NSWCA 27; (2013) 85 NSWLR 1 at [61] (Allsop P).
[17] Minister for Immigration and Border Protection v SZVFW [2018] HCA 30; (2018) 264 CLR 541 at [46] and [48]-[49] (Gageler J); FreshFood Management Services Pty Ltd v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union[2023] FWCFB 97 at [29].
[18] Rail Commissioner v Rogers[2021] FWCFB 371 at [61].
[19] Sheehan v Thiess Pty Ltd [2019] FCA 1762 at [20] (Colvin J) (Sheehan).
[20] WorkPac Pty Ltd v Skene [2018] FCAFC 131; (2018) 264 FCR 536 at [197] (Tracey, Bromberg and Rangiah JJ); Construction, Forestry, Maritime, Mining and Energy Union v Hay Point Services Pty Ltd [2018] FCAFC 182 at [8] (Reeves, Bromberg and O'Callaghan JJ).
[21] Kucks v CSR (1996) 66 IR 182 at 184 (Madgwick J); Transport Workers’ Union of Australia v Coles Supermarkets Australia Pty Ltd [2014] FCAFC 148; (2014) 245 IR 449 at [39] (Siopis, Buchanan and Flick JJ).
[22] King v Melbourne Vicentre Swimming Club Inc [2020] FCA 1173 at [126] (Wheelahan J) (King) citing Short v FW Hercus Pty Ltd (1993) 40 FCR 511 at 517-518.
[23] King at [127] (Wheelahan J); Ridd v James Cook University [2021] HCA 32; (2021) 274 CLR 495 at [17].
[24] Bianco Walling Pty Ltd v Construction, Forestry, Maritime, Mining and Energy Union [2020] FCAFC 50; (2020) 275 FCR 385 at [60] (Flick, White and Perry JJ).
[25] As explained in Toyota Motor Corporation Australia Ltd v Marmara [2014] FCAFC 84; (2014) 222 FCR 152 at [88]-[89] (Jessup, Tracey and Perram JJ).
[26] Target Australia Pty Ltd v Shop, Distributive and Allied Employees' Association [2023] FCAFC 66; (2023) 324 IR 304 at [54]-[55] (Bromberg J).
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