Macquarie University v National Tertiary Education Industry Union CPSU, the Community Public Sector Union
[2012] FWA 8895
•19 OCTOBER 2012
[2012] FWA 8895 |
|
DECISION |
Fair Work Act 2009
s.217 - Application to vary an agreement to remove an ambiguity or uncertainty
Macquarie University
v
National Tertiary Education Industry Union
CPSU, the Community Public Sector Union
(AG2012/5513 and AG2012/5515)Educational services | |
SENIOR DEPUTY PRESIDENT DRAKE | SYDNEY, 19 OCTOBER 2012 |
Application to vary the Macquarie University Academic Staff Enterprise Agreement 2011 and Macquarie University Enterprise Agreement 2010 to remove an ambiguity or uncertainty.
[1] On 21 May 2012 Macquarie University (Macquarie) filed two applications pursuant to s.217 of the Fair Work Act 2009 (the Act). The applications seek to vary the Macquarie University Academic Staff Enterprise Agreement 2011 (the 2011 Agreement) and the Macquarie University Enterprise Agreement 2010 (the 2010 Agreement) to remove ambiguity or uncertainty in relation to the operation of Clause 3.6.11 of the 2011 Agreement and Clause 3.7.13 of the 2010 Agreement (the disputed clauses).
[2] The National Tertiary Education Industry Union(NTEU) and the CPSU, the Community and Public Sector Union (CPSU) are both union parties to the 2010 Agreement. The CPSU is the only union party to the 2011 Agreement.
[3] Section 217 of the Act is set out below:
“(1) FWA may vary an enterprise agreement to remove an ambiguity or an 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;
(c) an employee organisation covered by the agreement.
(2) If FWA varies the enterprise agreement, the variation operates from the day specified in the decision to vary the agreement.”
[4] The disputed clauses are identical. They are as follows:
“The use of fixed-term employment is limited to the employment of a Staff Member engaged on work that comes within the description of one or more of the following circumstances...”
Thereafter the clause provides for seven categories within which fixed term employment may occur.
[5] Macquarie contends that there is an ambiguity or uncertainty regarding the meaning of the expression “The use of fixed-term employment...” in the disputed clauses.
[6] On 28 March 2012 the NTEU notified Macquarie of a number of disputes concerning fixed term contracts currently operating at Macquarie pursuant to the dispute settling provisions of the 2010 Agreement and 2011 Agreement (the Agreements). The NTEU claimed that the pre-existing fixed term contracts did not comply with the disputed clauses.
[7] On 3 April 2012 and 16 May 2012 the Dispute Settlement Committee, established pursuant to the Agreements, met to discuss the matters raised in the NTEU’s notice. The parties did not resolve the disputes. As a result Macquarie filed these applications. Macquarie relies on the existence of these unresolved disputes as support for its submission that there is ambiguity and uncertainty regarding the application of the Agreements.
[8] Macquarie seeks that the disputed clauses be varied as follows:
“Any fixed-term contract entered into following the commencement of this Agreement must come within the description of one or more of the following circumstances...”
[9] It also seeks that the variations apply retrospectively. It relies on a number of Full Bench Australian Industrial Relations Commission (AIRC) decisions 1 pursuant to the Workplace Relations Act 1996 as authority for the proposition that it is permissible to make an order varying an Agreement with retrospective effect in order to ensure that a relevant Agreement operates from commencement in the manner objectively intended.
[10] If the application is refused Macquarie submitted that it is possible that those pre-existing fixed term contracts said to be in breach of the Agreements could be treated as illegal and unenforceable. Section 50 of the Act discloses an intention that such contracts be rendered void and unenforceable.
[11] The NTEU claim that the present Agreements require the University, from commencement to either end the contracts of those on pre-existing fixed term contracts or convert to continuing appointments those employees on fixed term contracts previously entered into, whenever those contracts do not fit within one of the seven groups referred to.
[12] The law concerning applications such as this was comprehensively reviewed in a recent Full Bench decision of Fair Work Australia (FWA). 2
“[4] We deal first with the approach to the interpretation of enterprise agreements before turning to the parties’ submissions.
The Interpretation of Enterprise Agreements
[5] By virtue of s.46 of the Acts Interpretation Act 1901 (Cth) that act is applicable to the construction of enterprise agreements as if the enterprise agreement were an act. Section 46 states:
“s.46 Construction of instruments
(1) If a provision confers on an authority the power to make an instrument that is neither a legislative instrument for the purposes of the Legislative Instruments Act 2003 nor a rule of court, then:
(a) this Act applies to any instrument so made as if it were an Act and as if each provision of the instrument were a section of an Act; and
(b) expressions used in any instrument so made have the same meaning as in the enabling legislation as in force from time to time; and
(c) any instrument so made is to be read and construed subject to the enabling legislation as in force from time to time, and so as not to exceed the power of the authority.
(2) If any instrument so made would, but for this subsection, be construed as being in excess of the authority's power, it is to be taken to be a valid instrument to the extent to which it is not in excess of that power.”
[6] Section 7(1) of the Legislative Instruments Act 2003 (Cth) declares that ‘fair work instruments (within the meaning of the Fair Work Act 2009)’ are not ‘legislative instruments.’ The definition of a ‘fair work instrument’ in s12 of the Act includes an enterprise agreement. An ‘enterprise agreement’ is defined to include, relevantly, a ‘single enterprise agreement’ which is in turn defined to mean an enterprise agreement made as referred to in s172(2). The Total Corrosion Agreement is such an agreement.
[7] As to the general approach to the construction of enterprise agreements the observations of French J, as he then was, in City of Wanneroo v Australian Municipal, Administrative, Clerical and Services Union (Wanneroo) are apposite:
[53] The construction of an award, like that of a statute, begins with a consideration of the ordinary meaning of its words. As with the task of statutory construction regard must be paid to the context and purpose of the provision or expression being construed. Context may appear from the text of the instrument taken as a whole, its arrangement and the place in it of the provision under construction. It is not confined to the words of the relevant Act or instrument surrounding the expression to be construed. It may extend to ‘...the entire document of which it is a part or to other documents with which there is an association’. It may also include ‘....ideas that gave rise to an expression in a document from which it has been taken’ - Short v FW Hercus Pty Ltd (1993) 40 FCR 511 at 518 (Burchett J); Australian Municipal, Clerical and Services union v Treasurer of the Commonwealth of Australia (1998) 80 IR 345 (Marshall J).”
[8] While his Honour’s observations were made in the context of interpreting an award the same principles apply to the interpretation of enterprise agreements. For example, similar observations were made by their Honours Gummow, Hayne and Heydon JJ in Amcor v CFMEU:
“Clause 55.1.1 must be read in context. It is necessary, therefore, to have regard not only to the text of cl 55.1.1, but also to a number of other matters: first, the other provisions made by cl 55; secondly, the text and operation of the Agreement both as a whole and by reference to other particular provisions made by it; and, thirdly, the legislative background against which the Agreement was made and in which it was to operate.”
[9] The fact that the instrument being construed is an enterprise agreement is itself an important contextual consideration. As French J observed in Wanneroo, at paragraph [57]:
“It is of course necessary, in the construction of an award, to remember, as a contextual consideration, that it is an award under consideration. Its words must not be interpreted in a vacuum divorced from industrial realities - City of Wanneroo v Holmes (1989) 30 IR 362 at 378-379 and cases there cited. There is a long tradition of generous construction over a strictly literal approach where industrial awards are concerned - see eg GeoA Bond and Co. Ltd (in liq) v McKenzie [1929] AR (NSW) 498 at 503-504 (Street J). It may be that this means no more than that courts and tribunals will not make too much of infelicitous expression in the drafting of an award nor be astute to discern absurdity or illogicality or apparent inconsistencies. But while fractured and illogical prose may be met by a generous and liberal approach to construction, I repeat what I said in City of Wanneroo v Holmes (at 380):
“Awards, whether made by consent or otherwise, should make sense according to the basic conventions of the English language. They bind the parties on pain of pecuniary penalties.”
[13] Macquarie submits that there is textual ambiguity in the Agreements. It contends that the word “use” in the disputed clauses, is exceedingly variable. 3 It noted the judgement of Justice Kirby in Minister Administering the Crown Lands Act v NSW Aboriginal Land Council4 in which he referred to the word “use” as “Inherently unclear in its meaning. It is ambiguous and could potentially yield contradictory results”.5
[14] Macquarie submitted that the CPSU and the NTEU hold opposite views as to the application of the provisions and contend that on that basis the clause is objectively ambiguous. 6
[15] In regard to uncertainty, Macquarie submitted that the disputed clauses impose a positive obligation to make new fixed term appointments in a particular way, but that there is uncertainty in respect of contracts made prior to the commencement of the Agreement. In Yango v First Chicago 7Justice Jacobs adopted the following approach outlined in Cope v Rowlands8 “If a statute imposes a positive obligation to make contracts in a certain way, a prohibition against making contracts in another way can be implied as a matter of construction”.9
[16] Macquarie submitted that a lack of certainty and a potential lack of enforceability could result in serious consequences, such as the inability of employees to recover wages directly, an inability to sue on the contracts, and an inability to claim entitlements under the Agreement. 10
[17] Although the NTEU agreed with Macquarie that clauses 3.7.13 and 3.6.11 have different meanings it submitted that this alone does not mean that the clauses are ambiguous.
[18] The NTEU argued that, on reading the clauses which prescribe the terms and conditions of fixed term employees, a reasonable person would conclude that the clauses (including the disputed clauses) apply to all fixed term employees, irrespective of when they commenced employment.
[19] Notwithstanding an element of prospectivity in certain words 11 in the disputed clauses, the NTEU submitted that these words alone cannot limit the clauses application to employees engaged after the commencement of the Agreement.
[20] Macquarie submitted that the NTEU opposed the making and approval of the 2010 Agreement and therefore it is not a party to the Agreements in any true sense. Macquarie and the CPSU were the true parties to the Agreement and the variation sought reflects the common intention of the parties who actually negotiated the terms.
[21] The Notice of Renewal, Termination Prior to Expiry Date, Conversion and Severance Pay clauses of the Agreements permit existing fixed term contracts to continue until their expiry. Macquarie submitted that there is no logical inconsistency between the disputed clauses applying to new contracts and the rest of the clauses related to fixed term contracts in the Agreements applying to all contracts.
[22] Macquarie also submitted that the absence of a provision in the Agreements catering for the conversion of alleged “illegal” fixed term contracts into continuing employment counts strongly against any inference that the parties to each of the Agreements intended such contracts not to continue until their expiry. Macquarie submitted that, in regards to the absence of transitional provisions, it is well established that the failure of a party to take steps to correct an error in an instrument will mean that the error is common and should be rectified by a court or tribunal. In this instance, the NTEU have failed to take steps to correct any error present in the Agreements. 12
[23] The NTEU submitted that throughout negotiations it sought the inclusion of a clause that set rules for the treatment of existing employees on fixed term contracts based on the Higher Education Contract of Employment Award 1998 (HECE) claim, but that Macquarie refused to agree on the inclusion. 13
[24] The NTEU argued that Macquarie made no attempt at the numerous presentations on the Agreements to explain to the employees that the disputed clauses would only apply to employees engaged after the commencement of the Agreements. 14
[25] Mr Timothy Sprague has been the Human Resources Director at Macquarie since 2004. Mr Sprague was the lead negotiator for Macquarie for both Agreements. He provided a statement 15 and gave oral evidence.
[26] His evidence was that at no time during negotiations for either Agreement did the CPSU or NTEU suggest that the form of words agreed to in relation to fixed term employment would impact on the continued validity of existing fixed term contracts.
[27] In a NTEU Factsheet entitled “Changes to Fixed Term Employment Arrangements for Macquarie Academics”, issue one under the heading “ISSUES”, dealt with the circumstance of a staff member holding a non-compliant fixed term contract upon the commencement date of the Agreement.
“1) Expiry of existing contracts which are non compliant with the terms of the new enterprise agreement
A number of you may be on fixed term contracts which are to expire during the life of the current agreement. Because Management was able to put anybody on a fixed term contract under the previous agreement and under any circumstance, contract renewal may not be possible under the new agreement because there is NO category of fixed term employment which matches your current job. Management would be acting illegally if they attempted to renew a contract which was not compliant with the new agreement. Management tried to get away with this at the University of New England and the union pounced.
There is a simple answer to this problem. Management can convert and should convert your employment to ongoing if they are not able to continue a fixed term contract arrangement and the work is ongoing. Please contact the union for advice if you are currently occupying a non-compliant fixed term contract which is soon to expire.” 16
[28] Mr Sprague argued:
“Rather than indicating that the fixed-term contract cannot run to its expiry date (as the NTEU is now arguing), the NTEU states that “Management would be acting illegally if they attempted to renew a contract which was not compliant with the new agreement.” (my emphasis in bold).To my reading, the NTEU is thus clearly conceding that the non-compliant contract can run its course, but that it cannot be renewed (ie, a new contract entered into) during the life of the new Agreement unless it meets the requirements of that Agreement.” 17
[29] Mr Sprague referred to the Form F17 Declaration lodged with the application for approval of the 2010 Agreement. His answer in Part 2.6 of the document was:
“Between 13 and 23 of September staff from Human Resources who had been involved in the bargaining process visited professional staff work units across the University to present and to take questions on the proposed agreement. A total of 23 presentations, all lasting between 45 minutes to an hour, were undertaken. Approximately 500 professional staff attended the presentations.” 18
[30] Mr Sprague’s evidence regarding the Form F17 Declaration was that:
“If it had been intended that the 2010 Agreement was to provide an additional benefit to fixed-term staff then holding non-compliant fixed-term contracts, I would have indicated this to staff in those presentations, and in the FAQ sheet, and in the Form F17. I would have done so in terms of fulfilling my obligations under the Fair Work Act 2009 to explain the major changes that the Agreement would bring about.”
He then added:
“I did not do so in fulfilling any of those obligations, because the Agreements were not intended to have that effect.” 19
[31] Mr Sprague gave evidence that at no time prior to 28 March 2012, the date of the NTEU Dispute Notification, did the NTEU mention any problem with the disputed clauses. He said that Mr Dale conceded this when it was put to him at the committee meeting held on 3 April 2012. 20 Mr Dale made no concessions in cross examination.21
[32] Mr Dale has been a NSW Division Industrial Officer of the NTEU since July 2003. Mr Dale was responsible for supporting and assisting the NTEU Macquarie Team. He provided a statement and gave oral evidence. 22
[33] Mr Dale gave evidence that the NTEU did not reach an agreed position in relation to the 2010 Agreement. It subsequently conducted a vote “no” campaign against its approval. In support of the vote “no” campaign, Mr Dale stated:
“We believed the provisions were wide open to abuse. The University Management had drafted an Agreement which allowed a “catch all” provision called “other circumstances” sub-clause 3.17.13 (e) which essentially enabled the Human Resources Director (Mr Sprague) to put anyone on a fixed term contract he saw fit.” 23
[34] Mr Dale rejected Mr Sprague’s statement that the NTEU’s contention was a recent invention. He stated:
“NTEU was simply waiting to see how these provisions were applied across the University, and when it became clear that staff were not being converted (and we were able to observe a number of failed conversion cases), we formally took the matter to University Management.” 24
[35] Mr Dale did not have any recollection of conceding anything to Mr Timothy Sprague at the dispute meeting held on 3 April 2012. 25
[36] The CPSU agreed with Macquarie that there is both ambiguity or uncertainty in the clauses sufficient to justify a variation under s.217 of the Act.
[37] I am satisfied and find that the Agreements are ambiguous. It was clear to the two parties in the negotiations who reached agreement and supported the Agreements that the conditions imposed in relation to fixed term contracts only applied to those fixed term contracts entered into after the approval of the Agreements.
[38] The NTEU had a different view regarding the application of the clauses to pre-existing fixed term contracts. The NTEU’s position is contrary to the meaning of the clauses understood by the other parties. It kept that view secret as a sleeper “in their pocket”.
[39] I am satisfied and find that the existence and promotion of the NTEU’s alternative interpretation has led to uncertainty regarding the operation of the two clauses to date and will continue to do so in the future if the Agreements are not amended.
[40] This situation is unsatisfactory. I intend to exercise my discretion to vary the clauses. I will issue an order amending the Agreements in line with Macquarie’s application. That variation shall operate from the date of approval of the Agreements. Macquarie should provide a draft Order within 7 days.
SENIOR DEPUTY PRESIDENT
Appearances:
M. Moir and R. Trevaskis for Macquarie University.
M. Perica and M. Doherty for the CPSU and NTEU respectively.
Hearing details:
Sydney.
2012.
August 22.
1 Colonial Mutual Life v FSU (2004) 133 IR 149 at 171; Simon Engineering v AMWU, PR921966; Ambrose v Skilled Communications, PR904872
2 Cape Australia Holdings Pty Ltd T/A Total Corrosion Control Pty Ltd v CFMEU [2012] FWAFB 3994
3 Transcript PN854
4 Minister Administering the Crown Lands Act v NSW Aboriginal Land Council [2008] HCA 48at [8].
5 Ibid
6 Transcript PN857
7 Yango v First Chicago (1978) 21 ALR 585
8 Cope v Rowlands (1836) 2 M & W 149
9 Yango v First Chicago (1978) 21 ALR 585 at 602
10 Transcript PN865
11 Example: “will be employed” and “may be offered”
12 Transcript PN906
13 Exhibit NTEU 7 para 21
14 Exhibit NTEU 7 para 25
15 Exhibit Macquarie University 1
16 Exhibit Macquarie University 1 Attachment 1
17 Exhibit Macquarie University 1 para 11
18 Exhibit Macquarie University 1 Attachment 2 at para 2.6
19 Exhibit Macquarie University 1 para 13
20 Exhibit Macquaire University 1 para 14
21 Transcript PN773-PN785
22 Exhibit NTEU 1
23 Exhibit NTEU 1 para 7
24 Exhibit NTEU 1 para 11
25 Transcript PN948
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