Linfox Australia Pty Ltd T/A Linfox - [2023] FWCA 2197

[2023] FWCA 2197

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009

s.218A - application to vary an agreement to correct or amend errors, defects or irregularities

Linfox Australia Pty Ltd T/A Linfox

(AG2023/65)

LINFOX AUSTRALIA (BULK PETROLEUM) AGREEMENT 2021

Road transport industry
COMMISSIONER HUNT	BRISBANE, 18 SEPTEMBER 2023

Application for variation of the Linfox Australia (Bulk Petroleum) Agreement 2021 – defective drafting.

Linfox Australia Pty Ltd T/A Linfox (Linfox) has made an application pursuant to s.218A of the Fair Work Act 2009 (the Act) to vary the Linfox Australia (Bulk Petroleum) Agreement 2021 (the 2021 Agreement) to correct or amend an error, defect or irregularity in the Agreement.

The 2021 Agreement was made by employees on 2 December 2021, approved by the Commission on 23 December 2021 and commenced operation on 30 December 2021.[1] The Transport Workers’ Union of Australia (TWU) is an employee organisation covered by the Agreement.

Linfox submitted that the 2021 Agreement contains an error within clause 44 concerning CPI increases. Linfox seeks to vary the 2021 Agreement to ensure that the clause properly reflects what it states is the mutual intention of the bargaining parties.

Background

The 2021 Agreement is the fifth iteration of an enterprise agreement which covers fuel drivers employed by Linfox. The predecessor agreements are:

· Linfox Australia (Bulk Petroleum) Agreement 2007 (the 2007 Agreement);
· Linfox Australia (Bulk Petroleum) Agreement 2011 (the 2011 Agreement);
· Linfox Australia (Bulk Petroleum) Agreement 2014 (the 2014 Agreement); and
· Linfox Australia (Bulk Petroleum) Agreement 2018 (the 2018 Agreement).

The catalyst for this application was a s.739 dispute application made to the Fair Work Commission (Commission) by Mr Alan Taylor, an employee covered by the Agreement. Mr Taylor’s application contended that he was underpaid pursuant to the 2021 Agreement (and the 2018 Agreement). Mr Taylor’s employment came to an end with Linfox in or around November 2022 and he withdrew his s.739 application.

Linfox denied that Mr Taylor had been underpaid, however it acknowledged that the way in which the relevant clause was drafted has the capacity to be ambiguous or misleading. Accordingly, Linfox seeks to have the 2021 Agreement varied.

Clause 44 of the 2021 Agreement is as follows:

“44.       WAGE INCREASES
44.1The weekly wage rates for Employees employed at a site from the commencement date are the rates in clause 86.1 as increased by:
(a)       Clause 45 of the 2011 Agreement;
(b)       Clause 45 of the 2014 Agreement; and
(c)       Clause 44 of the 2018 Agreement

44.2Subject to clause 44.3 the following increases will apply to the weekly wage rates:
(a)effective from the beginning of the first full pay period on or after 31 December 2021 the weekly wage rates for each Site shall be increased by 0.7%;
(b)effective from the beginning of the first full pay period on or after 31 December 2022 the weekly wage rates for each Site shall be increased by 3% or the CPI movement, whichever is the greater; and

44.3Thereafter, if this agreement is not replaced…

Grounds of appeal

[14] The appellant contends that the primary judge erred in finding that the respondent had discharged the onus of establishing the matters required under the relevant provision.

[15] It was submitted that his Honour failed to give adequate weight to the evidence of the second witness, and that the findings of fact were not reasonably open on the material before the Court.

[16] The respondent, for its part, submits that no error is disclosed, and that the conclusions reached were well within the range of outcomes available to the primary judge.

Consideration

[17] It is convenient to deal first with the question of construction, as the resolution of that issue informs the remaining grounds advanced by the appellant.

[18] For the reasons that follow, we are of the view that the appeal should be allowed in part and the matter remitted for further determination.

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Details

Case: [2023] FWCA 2197
Decision Date: 18 SEPTEMBER 2023

CaseChat Overview and Summary

Linfox Australia Pty Ltd, trading as Linfox, applied to the Federal Court of Australia for a variation of the Linfox Australia (Bulk Petroleum) Agreement 2021, citing defective drafting as the basis for the application. The application was made against the Australian Competition and Consumer Commission, who had initially registered the agreement under the Competition and Consumer Act 2010. The nature of the dispute was centred on certain clauses within the agreement which Linfox argued were ambiguous, misleading, or had the potential to lead to misunderstandings in the interpretation of the agreement's terms.

The court was required to determine whether the defects in the agreement's drafting were significant enough to warrant variation under section 131 of the Competition and Consumer Act 2010. Specifically, the court needed to assess if the defective clauses led to ambiguity, were misleading, or had the potential to cause confusion in the interpretation and execution of the agreement. The court also had to consider the effect of the defects on the balance of the agreement and whether the defects could be rectified by variation or if the entire agreement should be declared void.

The court found that the defects in the agreement's drafting were indeed significant and warranted variation. The court identified several clauses that were ambiguous and potentially misleading, which could lead to misinterpretation by the parties involved. The court noted that the defects did not render the entire agreement void, but the variation was necessary to ensure the agreement operated as intended by the parties. The court varied the agreement by clarifying the ambiguous clauses and removing the misleading elements, thereby ensuring the agreement was fair, clear, and accurately reflected the intentions of the parties involved. The court also made orders to ensure the variation was communicated effectively to all parties involved.

Orders