Maritime Union of Australia v DP World (Fremantle) Limited

[2013] FWC 2914

[2013] FWC 2914

FAIR WORK COMMISSION

DECISION

AND

REASONS FOR DECISION

Fair Work Act 2009
s.739 - Application to deal with a dispute

Maritime Union of Australia
v
DP World (Fremantle) Limited
(C2012/1269)

COMMISSIONER CLOGHAN PERTH, 16 AUGUST 2013

Alleged dispute about any matters arising under the enterprise agreement and the NES; [s186(6)]

[1] This application concerns a dispute between the MUA and DP World (Fremantle) Limited over the application of a subclause in an enterprise agreement.

[2] The MUA assert, pursuant to the subclause, that unused personal leave accrued in excess of 28 days and “cashed out” should be at eight (8) hours per day. The Employer asserts that the unused personal leave accrued before 13 June 2012 should be cashed out at seven (7) hours per day and from 13 June 2012 at eight (8) hours.

PROCEDURAL BACKGROUND

[3] On 16 October 2012, the Maritime Union of Australia (MUA or Applicant) made application to Fair Work Australia, now Fair Work Commission (Commission) to deal with a dispute in accordance with a dispute settlement procedure (DSP).

[4] The MUA is in dispute with DP World (Fremantle) Limited (Employer).

[5] The DSP is contained in the DP World Fremantle Enterprise Agreement 2011 (2011 Agreement).

[6] The application was made pursuant to s.739 of the Fair Work Act 2009 (FW Act).

[7] The application was the subject of a conciliation conference on 5 November 2012.

[8] On 13 December 2012, the MUA advised the Commission that the dispute remained unresolved and requested the matter be referred for arbitration.

[9] Procedural directions were issued on 17 December 2012, 17 January and 18 February 2013.

[10] At the arbitral hearing on 12 April 2013, the MUA was represented by Mr L Edmonds, National Legal Officer. Evidence was given for the MUA by Mr A Evans, Deputy Branch Secretary, Western Australian Branch and Mr S Bickley, a crane driver employed by the Employer.

[11] The Employer was represented by Mr D Perry of Counsel. Evidence for the Employer was given by Mr A Adam, Director Operations, DP World Australia Limited.

[12] Written documentation received as a result of the procedural directions was incorporated into the arbitral proceedings. At the conclusion of the hearing, at the request of the Employer, I allowed further written submissions on a particular issue raised by the MUA. Those written submissions were received on 29 April 2013 and 3 May 2013.

[13] Having received the documentation and heard submissions and evidence, this is my decision and reasons for decision.

RELEVANT BACKGROUND

[14] Negotiations for the 2011 Agreement were conducted in two parts. Part A was negotiated jointly between representatives of DP World Australia Ltd and the MUA. The negotiations resulted in common terms and conditions of employment at the operations of DP World Australia Ltd and its related entities in the ports of Brisbane, Sydney, Melbourne, Adelaide and Fremantle.

[15] Part B of the 2011 Agreement was negotiated locally at each port and resulted in conditions specific to that worksite.

[16] Prior to the 2011 Agreement, the employees at the Port of Fremantle were covered by the DP World Fremantle Enterprise Agreement 2008 (2008 Agreement).

[17] Pursuant to the 2008 Agreement, employees were entitled to 13 days of personal leave, which consisted of up to 10 days sick leave and three (3) days of carer’s leave. The 2008 Agreement was to be read in conjunction with the Stevedoring Industry Award 1999 (SI Award 1999) in which employees were entitled to cash out sick leave in excess of 28 days as follows:

“23.3.6 Payment for accrued sick leave on retirement

Where an employee:

23.3.6(a) dies, retires, is made redundant or resigns his or her employment after 10 years services; or

23.3.6(b) is accepted by his or her superannuation fund as totally or permanently disabled;

the employee (or in the case of death, the employee’s personal legal representative) will be paid an amount equivalent to the employee’s unused accumulated sick leave entitlement at the ordinary rate of pay.

23.3.7 Payment for excess accrued sick leave

Where an employee has accumulated as at 1 July of any year more than 28 days unused sick leave, the employee may elect to receive an amount equivalent to all or part of the accumulated sick leave in excess of 28 days at the ordinary rate of pay in lieu of actual leave.

23.3.8 Payment for sick leave to reflect shift hours

Where an employee works shift work in excess of seven hours, a day’s sick leave must be paid according to the number of hours in the shift.”

(my emphasis)

[18] The relevant parts of Clause 16: Personal Leave of the 2011 Agreement are as follows:

“16.0 PERSONAL LEAVE

This clause shall be read in conjunction with clause 23 of the Stevedoring Award, and shall apply to the extent of any inconsistency.

16.1 Amount of Personal leave

16.1.1 Yearly Amount

A Permanent Employee shall be entitled to 13 days’ personal leave per year which shall consist of sick leave (up to 10 days per year) and carer’s leave.

16.1.2 Accumulation of Personal Leave

In any year, unused personal leave accrues at the rate of 10 days less:

- the amount of sick leave taken from the current years’ personal leave entitlement; and

- the amount of carer’s leave taken, in excess of 3 days, from the current years’ personal leave entitlement.

16.2 ...

16.3 ...

16.4 Payment for personal leave shall be as follows:

6.4.1 FSE’s shall be paid at the salary rate as specified for the Employee’s classification in the relevant section of this Agreement.

16.4.2 VSE’s shall be paid eight hours for each day of leave at the average graded rate worked for the previous 12 months as specified in clause 11.0 - Classifications and Rates of Pay of this Agreement.

16.5 ...

16.6 ...

16.7 ...

16.8 ...

16.9 Cashing out of Personal Leave

16.9.1 An Employee may have their accrued personal leave cashed out in accordance with the following provisions:

(a) resigns their employment after 10 years, retires, is made redundant or dies;

(b) is accepted by their superannuation fund as totally or permanently disabled;

(c) the Employee (or in the case of death, the Employee’s personal legal representative) will be paid an amount equivalent to the Employee’s unused accumulated sick leave entitlement;

(d) payment for excess accrued personal leave where at 1 July of any year, an Employee has accumulated in excess of 28 days unused personal leave.

16.9.2 Any personal leave cashed out in accordance with 16.9.1 will be paid at clause 11.0 - Rates of Pay where a day of personal leave is 8 hours.”

(my emphasis)

[19] Accordingly, subject to meeting the conditions in paragraphs (a), (b), (c) and (d) in 16.9.1, the parties agree that from 13 June 2012 (the operative date of the 2011 Agreement) each day of unused personal leave accrued in excess of 28 days, and cashed out, will be at 8 hours per day.

[20] Where the parties disagree is how each day of unused personal leave accrued prior to 13 June 2012 should be treated when cashed out.

[21] The MUA assert that all unused accrued days of personal leave prior to 13 June 2012 is to be cashed out at eight (8) hours per day.

[22] The Employer asserts that unused accrued personal leave prior to 13 June 2012 should be dealt with in accordance with the 2008 Agreement and its provisions, that is, seven (7) hours per day.

[23] The 2008 Agreement does not contain a similar provision to subclauses 16.7 to 16.9 in the 2011 Agreement, however reference is made that Clause 16.0 Personal Leave was to be read in conjunction with “clause 23 of the Stevedoring Award” which is presumably a reference to the SI Award 1999 and from 1 January 2010 the Stevedoring Industry Award 2010 (SI Modern Award 2010).

[24] The relevant provisions of the SI Award 2010 are as follows:

“23. Personal/carer’s leave and compassionate leave

23.1 ...

23.2 Payment for accrued personal/carer’s leave on retirement

Where an employee:

(a) dies, retires, is made redundant or resigns their employment after 10 years’ service; or

(b) is accepted by their superannuation fund as totally or permanently disabled;

the employee (or in the case of death, the employee’s personal legal representative) will be paid an amount equivalent to the employee’s unused accumulated sick leave entitlement at the ordinary rate of pay.

23.3 Payment for excess accrued sick leave

Where an employee has accumulated as at 1 July of any year more than 28 days unused sick leave, the employee may elect to receive an amount equivalent to all or part of the accumulated sick leave in excess of 28 days at the ordinary rate of pay instead of actual leave.

23.4 ...” (my emphasis)

[25] It is notable that the provision in the SI Award 1999 at subclause 23.3.8 Payment for sick leave to reflect shift hours, is not contained in the SI Modern Award.

[26] It is not in dispute between the parties that, pursuant to the 2008 Agreement, a day of personal leave, whether taken or cashed out, was seven (7) hours. Consequently, both parties agree that this dispute relates to the meaning and effect (interpretation for the Employer) of subclause 16.9 of the 2011 Agreement. In short, it is whether employees who are entitled to cash out unused personal leave days accrued before 13 June 2012 should be paid, according to the MUA at eight (8) hours per day or, according to the Employer, at seven (7) hours per day.

MUA SUBMISSION

[27] The MUA submits that:

● the matter in dispute relates to the meaning and effect of subclause 16.9 of the 2011 Agreement;

● there is no ambiguity in subclause 16.9 of the 2011 Agreement and consequently, in accordance with the general principles of interpretation, the words should be given their plain and ordinary meaning;

● subclause 16.9 cannot be interpreted, as submitted by the Employer, in a way which “quarantines accrued leave from the previous enterprise agreement”;

● in the event that the Commission determines that there is ambiguity in the clause, recourse to extrinsic material and the conduct of the parties demonstrates an intention of the parties to make personal leave payable, at the rate of eight (8) hours per day; and

● its interpretation of subclause 16.9 is consistent with the provisions of the National Employment Standards in the FW Act. Further, for the 2011 Agreement to have been approved by the Commission, it was necessary that the Agreement not contravene s.55 of the FW Act which requires that enterprise agreements not include a term which is detrimental to an employee when compared to National Employment Standards.

EMPLOYER’S SUBMISSION

[28] The Employer submits that:

● the 2008 Agreement provided that a day or personal leave, whether taken or “cashed out” was seven (7) hours;

● the genesis of the seven (7) hours is contained in the SI Award 1999;

● pursuant to the 2011 Agreement, the payment to which employees are entitled for a day of personal leave is 8 hours (rather than 7 hours). This increased entitlement was the outcome of negotiations between the parties and was part of a “new regime” for the accrual and cashing out of personal leave that formed part of the 2011 Agreement” 1 (my emphasis);

● the entitlements set out in the 2011 Agreement cannot be applied retrospectively to personal leave accrued under the 2008 Agreement, such that the Respondent’s personal leave liabilities would be retrospectively increased. Further, express words to the contrary, amendments to instruments do not have retrospective application;

● the entitlement to eight (8) hours per day, whether taken or cashed out, only applies from the commencement of the operation of the 2011 Agreement;

● leave accrued, but not taken pursuant to the 2008 Agreement should be dealt with in accordance with that 2008 Agreement;

● the terms of the 2011 Agreement cannot have any force in relation “to matters which occurred prior to the date on which it commenced operation, including the accrual of personal leave” 2;

● “subsection 7(2) of the Acts Interpretation Act prevents clause 16.9 of the 2011 Agreement from being applied retrospectively such that personal leave accrued under the 2008 Agreement could now be cashed out at a rate of 8 hours per day (rather than 7 hours per day, as was the case under the 2008 Agreement)” 3;

● Should it be necessary to consider extrinsic material in the construction of subclause 16.9 of the 2011 Agreement, negotiations demonstrate that the payment of a day of personal leave at eight (8) hours per day for past and future accruals was put by the MUA and rejected by the Employer. Having done so, the Employer proceeded on the basis that the claim for eight (8) hours related only to future accruals; and

● If the MUA is seeking an interpretation of subclause 16.9 of the 2011 Agreement, “so that the rights and obligations of the parties can be enforced...this is clearly a function of judicial power and beyond the jurisdiction of FWC” 4.

CONSIDERATION

Plain and ordinary meaning of the words in subclause 16.9 of the 2011 Agreement

[29] The introductory title to subclause 16.9 of the 2011 Agreement is “Cashing out of Personal Leave”. The title conveys the proposition that personal leave can be cashed out in lieu of being taken.

[30] The introductory preamble to subclause 16.9.1 of the 2011 Agreement is that an employee “may” cash out if certain conditions are fulfilled. Those conditions are set out in paragraphs 16.9.1(a)-(d). In this context, I consider the word “may” to express the meaning of positive permission subject to the conditions in subsection 16.9.1 being met.

[31] In the case of the condition in paragraph 16.9.1(d) of the 2011 Agreement, it is expressed in a way to convey the meaning that an employee can cash out accumulated personal leave in excess of 28 days. Paragraph 16.9.1(d) is not equivocal, ambiguous or vague; it says what it is meant to say, employees are entitled to cash out unused personal leave in excess of 28 days.

[32] However, the matters in paragraphs 16.9.1(a)-(d) of the 2011 Agreement are conditions necessary to cash out accrued personal leave but do not state the manner in which the accrued personal leave is cashed out. The manner in which the accrued personal leave is “cashed out” is linked, but a distinctly different consideration, to the conditions leading to eligibility for payment.

[33] The manner or the way payment of unused accrued personal leave is paid (cashed out) is in subclause 16.9.2 of the 2011 Agreement and that is “a day of personal leave is 8 hours”. In my view, these words are not vague, ambiguous or equivocal. Subsection 16.9.2 clearly states that a “day of personal leave” is defined as eight (8) hours for the purposes of 16.9.1.

[34] Should I be wrong in relation to the plain and ordinary meaning of subclause 16.9.2 of the 2011 Agreement, I now turn to material beyond the actual subclause itself.

Subclause 5.3 of the 2011 Agreement

[35] The 2011 Agreement commenced on 13 June 2012 and expressly states at subclause 5.3 as follows:

“This Agreement supersedes any other award, agreement whether certified or not, memorandum of understanding, exchange of correspondence, work practice(s), arrangement(s), written or unwritten which applied prior to the commencement of this varied Agreement and which regulated the terms and conditions of employment of employees covered by this Agreement.” (my emphasis)

[36] The word “supersedes” using the Australian Concise Oxford Dictionary (ACOD) means “to set aside, cease to employ, adopt or appoint another person or thing in place of, take the place of...”.

[37] I find that the wording in subclause 5.3 indicates that the parties had a mutual understanding and agreement that the terms and conditions in the SI Award 1999, 2008 Agreement and any arrangements (written or unwritten) which regulated the terms and conditions of employment ceased to exist and from 13 June 2012, the provisions of the 2011 Agreement would apply.

[38] Shortly put, I find that pursuant to the provisions of subcaluse 5.3, the parties agreed to set aside all previous terms and conditions of employment in favour of the content in the 2011 Agreement. The primacy of the 2011 Agreement had the consequence of stating that “a day of personal leave is 8 hours”.

The word “Any” in subclause 16.9.2 of the 2011 Agreement

[39] The Employer submits that the word “Any” in subclause 16.9.2 does not mean “all” unused personal leave cashed out but only that accrued after 13 June 2012. If the Employer is correct that “any” means some but not all unused accrued personal leave, it is necessary for the reader to discern which unused accrued personal leave does not apply.

[40] There are no additional provisions or words in subclause 16.9.2 of the 2011 Agreement which enable the reader to distinguish between payment of personal leave at eight (8) or seven (7) hours per day. Further, the Employer’s submission is at odds with the ordinary and plain meaning of “any” as meaning “any one”. The ACOD defines “any” as “one or some but no matter which” and “whichever (of all) is chosen”. The words “any personal leave cashed out” is analogous to “anybody” which is defined in the ACOD as “whatever person; a person no matter who”, or alternatively, “any place” which means “anywhere”.

“Absent express words to the contrary” - no retrospectivity

[41] The Employer has submitted that the 2011 Agreement cannot be applied retrospectively to unused personal leave accrued under the 2008 Agreement where personal leave was paid at seven (7) hours per day. The Employer submits that unless there are express words to the contrary, amendments to industrial instruments do not have retrospective application.

[42] As I understand the Employer’s submission, unless the provisions of subsection 16.9.2 of the 2011 Agreement expressly state that personal leave accrued prior to 13 June 2012 is to be paid at eight (8) hours per day, then the manner in which it was paid out in the 2008 Agreement should apply, that is, seven (7) hours per day.

[43] However, this submission is firstly at odds with subclause 5.3 of the 2011 Agreement as set out in paragraph [35].

[44] Secondly, the submission is contrary to the word “Any” in subclause 16.9.2 of the 2011 Agreement as set out in paragraph [40].

[45] Thirdly, the submission is inconsistent with the plain and straightforward meaning of the words “a day of personal leave is 8 hours”.

[46] Fourthly, as a matter of common industrial practice, where permissible, entitlements are carried forward from one industrial instrument to another and paid at the prevailing rate. It is uncommon for enterprise agreements to expressly set out that the “rate” is the “old” rate and not the prevailing rate. For example, four (4) weeks of accrued annual leave would be paid at the current rate of pay and not the rate of pay that was applicable at the time it was accrued.

[47] Finally, in view of the importance to the Employer, in financial terms, of the exemption of unused accrued personal leave prior to 13 June 2012, it is reasonable to ask the question, why this discrete exclusion was not enunciated immediately alongside the clear and unambiguous words of the general provision that a day of cashed out unused personal leave is eight (8) hours. Rather, the Employer contends that “absent express words to the contrary, amendments to instrument do not have retrospective application” and “personal leave accrued under the 2008 Agreement should be dealt with in accordance with the regime set out in that document”. 5

[48] It is notable that the 2008 Agreement did not have the express manner in which unused accrued personal leave was taken. It was “taken to be 7 hours, as the personal leave entitlements were derived from the SIA [SI Award 1999], which provided for a 35 hour week (or a 7 hour day)”. Simply put, while there was no express provision in the SI Award 1999, the practice was to cash out unused personal leave at a rate of seven (7) hours per day. Further, there is no express provision in the SI Award 2010 which sets out the manner in which unused personal leave was to be cashed out. Neither the SI Award 1999 nor the SI Modern Award 2010 provides a definition of “day of personal leave” to assist.

[49] In short, the 2011 Agreement is the first occasion on which any accrued personal leave to be cashed out, states what constitutes a day of personal leave is in numerical terms, that is, eight (8) hours.

[50] If the Employer’s objective was to exclude days of leave accrued before 13 June 2012, this could have been easily achieved and made clear in 16.9.2 of the 2011 Agreement rather than relying on the contention it has made in paragraph [41].

[51] I now turn to the evidence in the hearing to demonstrate that it would have been beneficial to have a term in the 2011 Agreement which clearly distinguished between the cashing out of accrued personal leave prior to and post 13 June 2012.

[52] Mr Perry took up his submission when cross examining Mr Evans as follows:

“You don't accept that it would've been clearer had that language been included?

---No. In fact in terms of the long service leave we had a prospective agreement for long service and to be clear we had a clause for long - just, I guess, to separate the two. For long service leave there was a date that we put in there that long service leave would accrue at a better rate from this date forward. So I don't think there's any requirement to say - if it's not prospective and the words are very clear I don't think there's any requirement to add any additional words.” 6

[53] In re-examination, Mr Evans’ evidence is clearer.

“Now Mr Perry asked you some questions about why you didn't explicitly provide for a reference to past and future accruals in the agreement when it was drafted. Did you explicitly provide for sick leave to be paid at the new hourly rate?

---No - sorry, that all sick leave is paid at the salary rate yes. But we didn't say that there - that it should apply to all previous accruals, no.

No, and did you do that with annual leave?---No.

Did you do that with long service leave?---Long service leave we did. We put a date in that would be a prospective agreement.

Right?---In that their long service leave used to accrue at 13 weeks for every 15 years and now it's 13 weeks for every 10 years from I think it was 1 July 2011, if not 2012. But there was certainly a date that was put in there prospectively.” 7

[54] The short point being made by Mr Edmonds in re-examination is that where a term of the 2011 Agreement distinguishes between past and future entitlements, as it did long service leave, this was specifically addressed in the wording of the clause. The entitlement to long service leave distinguishes between pre and post 1 July 2011 accruals.

History of negotiations

[55] The MUA state in their submission that “in the event the commission determines that there is ambiguity, recourse can be had to extrinsic material and to the conduct of the parties [and] the evidence is clear on the part of both parties to make personal leave payable at 8 hours per day” 8. The Employer makes a similar submission9 except to say that the conduct of negotiations would evident its submission that accrued leave prior to 13 June 2013 was to be cashed out at seven (7) hours per day.

[56] On 6 September 2011, the Employer provided to the MUA on a “without prejudice” basis a proposal with regards to “irregularly engaged employees”.

“3. Leave entitlements for irregularly engaged employees

- a day of personal leave for irregularly engaged employees (ie GWEs and VSEs) to be accrued and paid on the basis of 8 hours per day. (DP World to provide draft clause).

- this will be applied to current and future accruals from commencement of the Agreement.

- ...” 10

[57] The MUA’s response of 8 September 2011, similarly on a “without prejudice” basis is:

“sick leave is to be paid out at salary levels in the instance of redundancy”.

[58] A final offer of settlement made on the same “without prejudice” basis by the MUA on 15 December 2011, which includes under the hearing “Personal Leave”, the following:

“Personal leave to be paid out at salary in any circumstance”.

[59] Discussions occurred on 16 December 2011.

[60] Following the discussions, the MUA created a “without prejudice” draft agreement dated 10 February 2012 which was provided to the Employer on or about that date. The relevant draft clause is identical (save numbering) to the provisions contained in subclause 16.9 of the 2011 Agreement. A further draft agreement was created by the MUA on 23 February 2012, however, no changes were made, by either party, to subclause 16.9, Cashing out of Personal Leave.

[61] Mr Evans was jointly responsible for negotiations for Part A of the 2011 Agreement and involved in the local negotiations for the Port of Fremantle specific negotiations. Following negotiations, Mr Evans created and circulated a summary of outcomes prior to the ballot to approve the proposed agreement. Mr Evans’ summary reads:

“Sick leave paid at 8 hours for all employees including payout” 11 (my emphasis)

[62] Mr Evans’ summary which was circulated to employees at the time of the ballot and was not the subject of cross examination in the hearing.

[63] Mr Adam, in his written evidence, makes the point that the Employer’s offer of 6 September 2011 referred to in paragraph [56] with respect to “personal leave for irregularly engaged employee and paid on the basis of 8 hour per day, and this would be applied to current and future accruals” was not referred to specifically in relation to retrospectivity by the MUA in its response on 8 September 2011. Consequently, the Employer understood that its offer of retrospective application for accrued personal leave to be cashed out, had been rejected by the MUA and its subsequent negotiations proceeded on that basis 12. Simply, absent of any reference by the MUA to retrospectivity, the Employer considered that the Union had dropped the matter.

[64] Notwithstanding Mr Adam’s understanding as at 8 September 2011, in cross examination he gave evidence as follows:

“It was never really front and centre of the negotiations, was it? It was not an issue that you really concerned yourself with, was it?---What’s that?

That specific issue of the accrual of - - -?---Yes, it was, it was a central part of every discussion we had from November all the way through to early 2012. Not one meeting would go by without a discussion on personal leave and cashing out of sick leave.

So what was the MUA seeking at that point in time?---What they were seeking was sick leave to be paid at eight hours and of course cashing out that salary rate, the FSEs and eight hours for VSEs.

Okay. Would you agree with the proposition that if the concept of any increase in the payment of sick leave being applied to past and future accruals was agreed in September before you became involved there would be no need to keep rehashing that, would there?---No, no, I would say no. It was rejected so therefore - - -

If it was agreed there’d be no need for them to keep raising it with you, would there?---If it was agreed there would be no need - - -

If it was agreed that any changes to sick leave would be applied to past and future accruals they wouldn’t need to keep raising that point with you, would they?
---That proposal talked about the major issue of wage increases being 3.5 percent.” 13

“Did you ever put to the MUA any changes to sick leave, to the MUA negotiators, “Any changes to sick leave will only apply to future accruals”?---I was of the view in the resolution.” 14

“Mr Perry will ask you all sorts of questions to clarify what your evidence is so if I ask you again: did you ever put to the MUA after you became involved in negotiations that any changes to sick leave would only apply to future sick leave and didn’t apply to previous accruals?---I don’t recall ever having a discussion that the accruals were affected by the discussion of taking sick leave from seven to eight in 2011.

So the answer to that question would be no, you never put that to the MUA?---No, it was never – I never understood it to be affecting accruals.” 15(my emphasis)

[65] Mr Evans, in cross examination, maintained that all discussions between the MUA and the Employer after 6 September 2011 relating to sick leave as premised on the basis that “all sick leave be paid at eight hours” 16.

[66] Specifically:

“Yes, but it doesn't say sick leave already accrued, is what I'm asking you?---It said all sick leave, and I take the meaning of that to mean all sick leave, and including all of those accrued, to be paid at eight hours. And certainly that's the offer that was put from DP World to us very clearly, that current and future accruals will be eight hours.” 17

“And there's nothing in the documents attached to your statement to indicate that the MUA accepted that proposal, is there?---We didn't accept their offer because it was an offer of settlement of the full log of claims and not just the sick leave claim. But certainly we had a clear understanding from that point onwards that the - we were discussing current and future accruals and that was - that's why the plain meaning of the words were put into the agreement. That's why it continued in our claims from that way - that point forward in terms of our offers of settlement, that all sick leave is paid out at eight hours. In fact up until February our claim was simply that it should be eight or 12 hours, whichever shifts are worked.” 18

“Well I think what you were telling the Commission a moment ago is the company put a proposal which explicitly referred to current and future accruals, and the union never indicated its acceptance of that claim, and indeed never used that language in its subsequent documents?---If the company chooses to use current and future accruals to define something which I define as all in any way - in any case I think we agree violently.

When you then came to documenting the enterprise agreement in about February of last year if your understanding had been that the new regime would apply to current and future accruals, why did you not insist on that language being included in the agreement?---There was no requirement because it was very plain and simple in that all sick leave was paid out at eight hours.” 19

[67] For the purposes of this decision, it should be noted that Mr Adam only became involved in negotiations for the replacement agreement on or about 10 November 2011.

[68] Having considered the above submissions and evidence, I am satisfied that, if recourse to extrinsic material is necessary, it does not disturb the plain meaning of subclause 16.9 of the 2011 Agreement that all sick leave whether accessed or cashed out is eight (8) hours from the commencement of the 2011 Agreement.

Purpose of proceedings?

[69] The Employer referred me to the decision in Construction, Forestry, Mining and Energy Union v The Australian Industrial Relations Commission and Another (2011) 203 CLR 645 (CFMEU v AIRC) and the decision of Commissioner Richards, as he then was, in Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union and Others and EDI Rail Pty Ltd (PR960290) (AMWU v EDI Rail) in support of the proposition that the MUA was asking the Commission to:

“First of all to divine and declare the proper meaning of clause 16.9 of the agreement and secondly, to divine and declare the proper meaning of the National Employment Standard provisions that deal with personal leave which is we say very much on all fours with this decision. [AMWU v EDI Rail]” 20

[70] In addressing this submission, I begin with the provisions in s.739 of the FW Act where the Commission has the power to arbitrate a dispute if the parties have agreed, in an enterprise agreement, for the Commission to arbitrate the dispute. However, in arbitrating the dispute, the Commission cannot exceed the powers given to it by the parties and cannot make a decision that is inconsistent with the FW Act.

[71] The 2011 Agreement provides at Clause 24:

“In the event of a dispute arising in relation to the application of this [2011] Agreement or the National Employment Standards...the procedure to be followed to resolve the matter shall be as follows:

24.1 ...

24.1.1 ...

(a) ...

(b) ...

(c) ...

(d) ...

(e) where the dispute has not been resolved dispute ...

(my emphasis)

[72] The application sets out that:

“The parties are in dispute over the issue of whether personal leave accrued under the previous enterprise agreement but cashed out under the terms of the current enterprise agreement is paid out at the rate of 7 hours or 8 hours per day.”

[73] In accordance with Clause 24 of the 2011 Agreement, the Applicant seeks, in the application, for the matter to be resolved by arbitration.

[74] The application concludes with the following:

“The matter has been progressed through the dispute resolution process. The matter has been raised at the national level for discussion.

Both parties agree that the matter may now be referred to FWA for assistance”.

[75] These statements in the application were not contested in the hearing. In fact, the substantive submissions and evidence all gathered around the simple question of whether the cashing out of accrued personal leave should be 7 or 8 hours per day.

[76] The dispute resolution constrains itself to “disputes...in regard to the application of this [2011] Agreement”. The word “application” using the ACOD means the “bringing to bear upon the particular case”. Put shortly, in this dispute, how are the terms in 16.9 of the 2011 Agreement to be applied or put in practice. Put simply, the parties have requested the Commission to determine how subclause 16.9 of the 2011 Agreement is to apply because the parties cannot agree on how it is to apply.

[77] In my view, the Commission is exercising its powers consistent with the High Court in CFMEU v AIRC at paragraph 31 where the judgement states:

“Where parties agree to submit their differences for decision by a third party, the decision maker does not exercise judicial power, but a power of private arbitration. Of its nature, judicial power is a power that is exercised independently of the consent of the person against whom the proceedings are brought are results in a judgement or other that is binding of its own force. In the case of private arbitration, however, the arbitrator’s powers depend on the agreement of the parties, usually embodied as a contract, and the arbitrator’s award is not binding of its own force. Rather, its effect, if any, depends on the law which operates with respect to it.”

Other matters

[78] The MUA referred me to the operations of the National Employment Standards (NES) in support of its submission of subsection 16.9.2 of the 2011 Agreement and that Vice President Watson would not have approved the 2011 Agreement if it was not consistent with the NES.

[79] I find it unnecessary to consider the MUA’s submission or the Employer’s response because I find that the provisions in subclause 16.9.2 of the 2011 Agreement are clear, unequivocal and unambiguous. Further, I find no evidence in the bargaining for the 2011 Agreement which leads me to determine, even if the words in subclause 16.9.2 were ambiguous or uncertain, that the Employer concluded an enterprise agreement which excluded accrued personal leave being cashed out at seven (7) hours per day prior to 13 June 2012. An exclusion provision which, I note, it had done specifically in relation to long service leave.

CONCLUSION

[80] Subsection 595(3) of the FW Act gives the Commission power to deal with a dispute by arbitration (including by making any orders it considers appropriate) only if the Commission is authorised to do so under or in accordance with another provision of the FW Act.

[81] The Commission is expressly authorised to deal with this application in accordance with subsection 738(b) and section 739 of the FW Act.

[82] Paragraph 24.1.1(e) of the 2011 Agreement provides for the Commission to arbitrate on disputes concerning the application of the 2011 Agreement.

[83] Having heard the submissions and evidence, for the reasons set out above, I find that in accordance with subclause 16.9.2 of the 2011 Agreement, a day of personal leave is eight (8) hours and shall apply to all accrued personal leave and cashed out in accordance with subclause 16.9.1 of the 2011 Agreement.

COMMISSIONER

Appearances:

L Edmonds, for the Applicant.

D Perry of counsel for the Respondent.

Hearing details:

2013:

Perth,

12 April.

Final written submissions:

Applicant: 3 May 2013.

Respondent: 29 April 2013.

 1   Exhibit R2

 2   Exhibit R2

 3   Exhibit R2

 4   Exhibit R2

 5   Exhibit R2

 6   Transcript PN240

 7   Transcript PN283 to PN286

 8   Exhibit A1

 9   Exhibit R2

 10   Exhibit A4 (8)

 11   Exhibit A4 (15)

 12   Exhibit R7

 13   Transcript PN595-PN600

 14   Transcript PN605

 15   Transcript PN608 and PN609

 16   Transcript PN232

 17   Transcript PN233

 18   Transcript PN235

 19   Transcript PN238 and PN 239

 20   Transcript PN690

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