Maritime Union of Australia, Western Australian Branch v Mermaid Marine Vessel Operations Pty Ltd

[2013] FWC 8038

[2013] FWC 8038 [Note: a correction has been issued to this document]

FAIR WORK COMMISSION

DECISION

AND

REASONS FOR DECISION

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

Maritime Union of Australia, Western Australian Branch
v
Mermaid Marine Vessel Operations Pty Ltd
(C2013/398)

COMMISSIONER CLOGHAN PERTH, 17 OCTOBER 2013

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

[1] This is an application by the MUA seeking that overtime and call-outs be paid in accordance with the hourly rate of pay of annual salary employees at the Employer’s Dampier Supply Base Wharf. The annual salary is the total salary an employee would earn over a roster cycle of 12 months. The annual salary is inclusive of rostered overtime each weekday of 1.86 hours, weekend penalties for Saturday and Sunday, rostered weekend overtime and annual leave loading. The total annual salary has been reduced to an hourly rate for each classification covered by the enterprise agreement.

[2] The Employer asserts that overtime and call-outs be paid in accordance with the ordinary hourly rate of pay as it is the foundation for all of the components of the annual salary. To do anything otherwise, is having employees “double dipping” when it comes to overtime.

PROCEDURAL BACKGROUND

[3] On 18 March 2013, the Maritime Union of Australia (MUA or Applicant) made application to the Fair Work Commission (Commission) to deal with a dispute in accordance with a dispute settlement procedure (DSP).

[4] The MUA is in dispute with Mermaid Marine Vessel Operations Pty Ltd (Employer).

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

[6] The DSP is contained in the Mermaid Marine & MUA Dampier Supply Base Enterprise Agreement 2011 (2011 Agreement).

[7] The dispute was the subject of a number of conferences but remained unresolved.

[8] At the hearing on 19 August 2013, the MUA was represented by Mr L Edmonds, MUA National Legal Officer and evidence was given on behalf of the MUA by Mr D Heath, Organiser, Western Australian Branch.

[9] The Employer was represented by Mr D Parker of counsel. Evidence for the Employer was given by Mr M Gillett, General Manager, Human Resources.

[10] At the conclusion of the hearing, I reserved my decision. This is my decision and reasons for decision.

RELEVANT STATUTORY FRAMEWORK

[11] There was no dispute between the parties that the MUA could properly file the application and in accordance with Clause 9: Settlement of Disputes Procedure of the 2011 Agreement and pursuant to s.739 of the FW Act.

RELEVANT BACKGROUND

[12] The employees subject to this dispute are employed at the Mermaid Marine Supply base in Dampier, Western Australia and are covered by the 2011 Agreement. The employees were previously covered by the Mermaid Marine Dampier Supply Base Workplace Agreement 2008 (2008 Agreement).

[13] Bargaining to replace the 2008 Agreement commenced on or around 10 January 2011.

[14] Bargaining for the 2011 Agreement concluded in October 2011. The 2011 Agreement was approved by the Commission, as presently constituted, on 28 November 2011 and became operative on 5 December 2011.

[15] In the last quarter of 2012, the MUA, relevant employees and the Employer had discussions on the introduction and implementation of Roster A at the Dampier Supply Base Wharf. Roster A had a commencement date of 2 January 2013. Some of the relevant employees indicated that they would not work in accordance with Roster A commencing 2 January 2013.

[16] On 2 January 2013, the Employer filed an application to stop unprotected industrial action in accordance with s.418 of the FW Act (C2013/2511). The application was the subject of a hearing on 3 January 2013 and conferences in the Commission.

[17] As part of the resolution of C2013/2511, the MUA set out a summary of matters in dispute relating to the introduction of Roster A and the Employer provided a response to those matters. The matters were the subject of discussion within the Commission and separately between the parties.

[18] The MUA filed this application on 18 March 2013 1 and on 25 March 2013, the Employer discontinued its application C2013/2511.

THE DISPUTE

[19] Reduced to its essence, this dispute concerns the correct hourly rate of pay for employees on Roster A when undertaking overtime and call-outs in accordance with Clauses 13 and 14 respectively of the 2011 Agreement.

[20] The MUA contends that the correct hourly rate of pay for overtime and call-outs is contained in subclause 15.2 of the 2011 Agreement. The Employer asserts that the correct hourly rate of pay can be found in subclause 15.1 of the 2011 Agreement.

RELEVANT ENTERPRISE AGREEMENT PROVISIONS

2011 Agreement

[21] In accordance with Appendix 2 - Roster Arrangement, the Employer has introduced Roster A - 7 Day, 10 Hour, Day Shift Roster.

[22] Clause 11.1: Ordinary Hours of Work provides:

“The ordinary hours of work for day workers engaged under this Agreement will be 38 hours per week exclusive of a meal break.”

[23] Clause 11.2: Ordinary Hours of Work provides:

“The ordinary hours of work for shift workers will average 38 hours per week over a shift cycle and may be worked Monday to Sunday. Meal breaks shall be included as time worked...”

[24] Clause 13 is entitled Overtime. At 13.1 is the following:

“Hours of work performed outside the ordinary hours of work are overtime. Overtime will attract the rate of double the hourly rate for all overtime.”

[25] Clause 14: Call-outs includes at 14.2 the following:

“If an employee is recalled to work (Call-Out) (if notified at work or after leaving the job) or prior to the Employee commencing their normal start time, the employee shall be entitled to a minimum of 4 hours payment at double the hourly rate of pay...”

[26] Subclauses 15.1, 15.2 and 15.3 in Clause 15: Rates of Pay and Allowances are as follows:

“15.1 Ordinary Rates of Pay

The hourly rates of pay for the ordinary hours of work for each classification of employee to which this Agreement applies will be as follows (my emphasis)

Classification	Commence	1 Jan 2012	1 July 2012	1 July 2013
Employee Level 1	$30.14	30.74	32.59	34.54
Employee Level 2	$32.20	32.84	34.81	36.90
Employee Level 3	$33.81	34.49	36.56	38.75
Employee Level 4	$35.50	36.21	38.38	40.69
Employee Level 5	$37.28	38.03	40.31	42.73
Employee Level 6	$39.14	39.92	42.32	44.86

15.2 Annual Salary Rates - Roster A

The hourly Rates of Pay for each classification of employee who is required to work Roster A that is specified in, or can be implemented in accordance with, Appendix 2. (my emphasis)

Classification	Commence	1 Jan 2012	1 July 2012	1 July 2013
Employee Level 1	$41.37	42.19	44.72	47.41
Employee Level 2	$44.19	45.07	47.77	50.64
Employee Level 3	$46.41	47.34	50.18	53.19
Employee Level 4	$48.73	49.71	52.69	55.85
Employee Level 5	$51.16	52.18	55.31	58.63
Employee Level 6	$53.72	54.79	58.08	61.56

15.3 Annual Salary Principles

The above annual salaries and the annual salaries for any future roster that is established will be determined with the addition of the following components:

15.3.1 Ordinary Time Amount

The annual overtime amount = 38 hours x ordinary time hourly rate x 52 weeks.

For the purposes of calculating the ordinary hours of work / shift, the following formula is applied:

Ordinary Time Work Hours = 38 hours x length of shift roster (weeks)

Number of work days in shift cycle

15.3.2 Weekday Overtime Amount

The weekday overtime amount is the addition of all rostered overtime hours in addition to the ordinary time work hours that an employee is required to work over the roster cycle. This calculated by:

Weekday Overtime Amount = Number of weekdays worked per annum x (Shift Length - Ordinary Time Work hours) x ordinary time hourly rate x 2)

In other words, Shift Length - Ordinary Time Work Hours = Rostered Overtime Work Hours

15.3.3 Weekend Penalties & Overtime

The Weekend Penalties & Overtime amount is the addition of all penalty rates for ordinary time and overtime that is worked on a Saturday and Sunday. This is calculated by:

Weekend Penalties & Overtime Amount = number of Saturdays and Sundays that are worked per annum x [(Ordinary Time Work Hours x ordinary time rate) + (Rostered Overtime Work Hours x ordinary time rate x 2)]

15.3.4 Public Holiday Amount

The Public Holiday Amount is the addition of all penalty rates for ordinary time and overtime that is worked on Public Holidays that are required to be worked. This is calculated by:

Public Holiday Amount = number of public holidays worked per annum x [(Ordinary Time Work Hours x ordinary time rate x 1.5) + (Rostered Overtime Work Hours x ordinary time rate x 2.5)]

15.3.5 Annual Leave Loading Amount

The Annual Leave Loading Amount = number of weeks annual leave per annum x 38 hours per week x ordinary time hourly rate x 17.5%.

15.3.6 Shift Loading Amount

The Shift Loading Amount = 52 weeks x 38 hours per week x ordinary time hourly rate x 15%.

15.3.7 Note, the addition of the weekdays, Saturdays, Sundays and Public Holidays worked per annum must be equal to, and not greater than or less than, the number of rostered work days per annum less the amount of annual leave entitlement.”

2008 Agreement

[27] Clause 12: Hours of Work has identical wording to that contained in the 2011 Agreement found in paragraphs [22] and [23].

[28] Clause 12.6 reads as follows:

“Hours of work performed outside of the ordinary hours of work are overtime hours. On day work overtime will attract time and one half of the ordinary hourly rate for the first two hours of overtime worked Monday to Friday and on Saturday morning to 12 noon and double the hourly rate for all other overtime.”

[29] Overtime for employees working shift work is at subclause 12.7 and is as follows:

“Overtime on shift work will attract a penalty of double the ordinary rate of pay.”

[30] Clause 13 is entitled rates of Pay and Allowances and refers to Appendix 1 which contains a discrete hourly rate of pay for each classification of employee to which the 2008 Agreement applies.

APPLICANT’S CASE

[31] The MUA submits:

● there is no ambiguity in the 2011 Agreement when read in its normal way;

● the “hourly rate” in subclause 13.1 and “hourly rate of pay” in subclause 14.2 is a reference to the “hourly rate of pay actually being received by those employees for the ordinary time hours they work at that time”;

● for employees who work Roster A, the ordinary hourly rate of pay is that contained in subclause 15.2 Annual Salary Rates - Roster A set out at paragraph [26] above in subclause 15.1;

● in the event the Commission determines that there is ambiguity, recourse can be had to extrinsic material and to the conduct of the parties to negotiations for the 2011 Agreement;’ and

● the extrinsic material, pattern of negotiations and draft agreement “evince an intention on the part of both parties to make overtime and call-outs payable at double the hourly rate of pay actually being paid to those employees for the hours they are working”.

EMPLOYER’S CASE

[32] The Employer submits that:

● when the 2011 Agreement is read in its entirety all overtime, whether rostered or discretionary, is to be paid at double the rate set out in subclause 15.1;

● subclause 13.1 provides that all overtime is to be paid at double the hourly rate of pay;

● the only relevant hourly rate of pay is contained in subclause 15.1 which is entitled “Ordinary Rates of Pay” and sets out “the hourly rates of pay for the ordinary hours of work” for each classification;

● the hourly rates of pay in subclause 15.2 is an expression of the annual salary reduced to a notional hourly rate of pay;

● the notional hourly rate of pay in subclause 15.2 is indicative of the rostered overtime worked as part of working Roster A as well as other penalties and allowances;

● the rostered overtime component contained in the notional hourly rate in subclause 15.2 is calculated using hourly rates of pay contained in subclause 15.1;

● having factored overtime into an annualised salary and reduced that salary to a notional hourly rate of pay, it would be “double dipping” for further overtime, of a discretionary nature, to be calculated on the notional hourly rate of pay;

● its interpretation is consistent with the principles and purpose of “pay averaging” for an annual salary in contrast to a “wages and overtime” arrangement;

● the MUA’s interpretation is contrary to sensible industrial outcome where an employee on “wages and overtime” would be remunerated significantly less than an employee who is remunerated on an annual salary basis; and

● if resort is had to extrinsic material, it will demonstrate that the parties well understood that all overtime, whether rostered or discretionary, is calculated in accordance with the hourly rate in subclause 15.1

CONSIDERATION

Interpretation of Enterprise Agreements

[33] The Full Bench in Cape Australia Holdings Pty Ltd T/A Total Corrosion Control Pty Ltd v Construction, Forestry, Mining and Energy Union [2012] FWAFB 3994 (Cape Australia Holdings) set out under the heading “The Interpretation of Enterprise Agreements” the following:

“[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.”

[10] None of these principles were matters of contention in these proceedings and we have applied them in the determination of the appeal. The issue on appeal is the application of the principles to clause 5 of the Total Corrosion Control Agreement.”

[34] I have adopted the approach of the Full Bench in Cape Australia Holdings.

[35] The submissions and evidence suggest that there are three (3) relevant questions which the Commission needs to consider.

[36] The first question is whether there is uncertainty as to the correct hourly rate of pay for employees on Roster A when undertaking overtime and call-outs in accordance with Clauses 13 and 14 respectively of the 2011 Agreement. The fact that the parties are in an arbitration hearing tends to indicate that there is more than one answer to the question posed. Each party has attempted to persuade the other of the reasonableness of its argument and failed.

[37] The answer to the question posed is made all the more difficult in that the 2011 Agreement does not contain a “definitions” clause which may have been of assistance.

[38] The submissions of both parties as to the correct hourly rate of pay are within a band of reasonableness. However, the Commission can only come to one answer to the question of what is the correct hourly rate of pay for Roster A employees when undertaking overtime and call-outs.

[39] I find that the correct hourly rate of pay for overtime and call-outs is not readily discernible in Clauses 13 and 14 of the 2011 Agreement. Consequently, it is necessary to consider the 2011 Agreement in its entirety to determine whether the answer to the primary question posed can be discovered.

[40] Having found that there is uncertainty as to the correct hourly rate of pay for overtime and call-outs for those employees on Roster A, the second question is how does the 2011 Agreement, in its totality, assist in answering the question posed.

[41] The 2008 Agreement had the simplicity of stating that the ordinary hours of work are 38 for day workers between Monday and Friday and an average of 38 for shift workers between Monday and Sunday. Ordinary hours are scheduled in periods of not more than 10 continuous hours.

[42] Overtime in the 2008 Agreement is also straightforward. Day workers received one and one half of the ordinary hourly rate for the first two hours and double time thereafter for time worked beyond ordinary hours on Monday to Friday and Saturday until 12 noon. Overtime worked on Saturday after 12 noon and Sunday attracted a rate of double time.

[43] Employees on shift work in the 2008 Agreement are paid double the ordinary hourly rate of pay for all overtime worked beyond the ordinary hours of work.

[44] The plainness of the 2008 Agreement is also noticeable in that it contains one hourly rate of pay for each classification of employee contained in the workplace agreement.

[45] In contrast, Clause 11: Ordinary Hours of Work in the 2011 Agreement is more complex. It is noticeable that in subclause 12.3 of the 2008 Agreement, the ordinary hours for all employees was not more than 10 continuous hours per day. Whereas its equivalent in subclause 11.3 of the 2011 Agreement provides that the ordinary hours of work for all employees working Monday to Friday will be scheduled in periods of not more than 7.6 continuous hours.

[46] With respect to overtime, there is no separate term in the 2008 Agreement but it is contained within Clause 12: Hours of Work. However, the 2011 Agreement has a separate overtime term which is set out in clause 13: Overtime Hours.

[47] The opening sentence and provision of subclause 13.1 (Overtime Hours) of the 2011 Agreement is identical to subclause 12.6 of the 2008 Agreement and is:

“Hours of work performed outside the ordinary hours of work are overtime hours.”

[48] The second sentence and provision of subclause 13.1 (Overtime Hours) of the 2011 Agreement sets out that all overtime will attract double the hourly rate of pay. Two aspects of this provision, in comparison to the equivalent 2008 Agreement, are noticeable. First, the overtime rate has increased to double time for all overtime, and secondly, there is no distinction regarding which days of the week the overtime is worked.

[49] While the drafters of the 2011 Agreement may have, for reasons of familiarity, transferred over similar language from the 2008 Agreement regarding overtime, two distinct but related changes, have taken place. Firstly, the ordinary hours of work have been reduced from not more than 10 hours per day to not more than 7.6 hours per day, and secondly, the introduction of an annual salary and its reduction to an hourly rate of pay. Consequently, the 2011 Agreement now contains two hourly rates of pay in contrast to the one hourly rate of pay in the 2008 Agreement.

[50] Before completing consideration of the contrast between the overtime provisions in the 2008 and 2011 Agreements, the following is also noticeable.

[51] Subclause 12.6 of the 2008 Agreement reads as follows:

“On day work overtime will attract time and one half of the ordinary hourly rate...”

[52] For shift workers in the 2008 Agreement, the provision in subclause 12.7 reads:

“Overtime on shift work will attract a penalty of double the ordinary rate of pay.”

[53] The equivalent 2011 Agreement overtime provision reads as follows:

“Overtime will attract the rate of double the hourly rate of all overtime...”

[54] What is noticeable is that in the 2008 Agreement, the word “ordinary” was part of the definition of the hourly rate of pay. However, in the equivalent clause in the 2011 Agreement, the word “ordinary” has been removed. The impact of the removal of the word “ordinary” would not have been of significance in understanding the rate of pay for overtime and call-outs, if it had not been for the fact that the replacement 2011 Agreement has two hourly rates of pay. However, only one of the hourly rates of pay specifically mentions, in its definition, the word “ordinary”.

[55] At subclause 15.1 of the 2011 Agreement, the subheading is “Ordinary Rates of Pay” and the narrative leading to the actual rates of pay is “The hourly rates of pay for the ordinary hours of work for each classification...will be as follows”. Clearly, that is a reference to the ordinary hourly rate of pay.

[56] Subclause 15.2 of the 2011 Agreement is entitled “Annual Salary Rates - Roster A”. The title is misleading because there is no reference in the substantive subclause to annual salaries. The substantive content of the subclause is a reference to the hourly rate of pay for those employees who work Roster A and receive an annual salary.

[57] The difference between the hourly rates of pay for those employees on Roster A and receiving an annual salary, and the ordinary hourly rates of pay in subclause 15.1 of the 2011 Agreement, is approximately 37%. The difference in the hourly rate of pay is accounted for because the “Annual Salary Principles” in subclause 15.3 of the 2011 Agreement, factor into the hourly rate of pay the following components:

● ordinary time
● weekday overtime
● weekend penalties and overtime; and
● shift loading.

[58] The basis for calculating all of the above criterion in paragraph [57] immediately above is the “ordinary time hourly rate” in subclause 15.1 Ordinary Rates of Pay.

[59] To summarise, at this point the hourly rate of pay for Roster A employees is an amount of all the factors contained in subclause 15.3 Annual Salary Principles set out in paragraph [26]. Further, all the factors are based upon and relate back to the ordinary hourly rate of pay in subclause 15.1 of the 2011 Agreement.

[60] Despite having the ordinary hourly rate of pay as the basis for the annual salary, the MUA contends that the amalgamated hourly rate should now become the basis for all overtime to be paid beyond rostered overtime. The foundation for this contention is that the hourly rate in subclauses 13.1 and 14.2 in the 2011 Agreement refer to “hourly rate” and that the MUA argue is a reference to the actual hourly rate being received by the employees for the hours worked.

[61] While it is established that subclauses 13.1 and 14.2 of the 2011 Agreement do not refer to double the “ordinary” hourly rate of pay, the subclauses also do not refer to double the “actual” hourly rate of pay of employees.

[62] In the absence of the specificity of “ordinary” or “actual” in subclauses 13.1 and 14.2 in the 2011 Agreement, what can be relied upon in the 2011 Agreement to determine the correct hourly rate of pay for overtime and call out purposes?

[63] It is clear in the 2011 Agreement that the foundations of the annual salary hourly rates of pay are premised on the ordinary hourly rates of pay. In the construction of the 2011 Agreement, there appears to be no reason why subclauses 13.1 and 14.2 should be treated any different.

[64] I have already noted that overtime built into Roster A is calculated on the ordinary hourly rate of pay. Further, it is notable that the 2011 Agreement does not distinguish between “rostered” overtime and “discretionary” overtime. Consequently, it is necessary to determine, in the context of the totality of the 2011 Agreement, whether there was any intention to treat discretionary overtime different to rostered overtime. I can find no intention.

[65] The immediate predecessor to the 2011 Agreement contained equivalent provisions which made it absolutely clear that the hourly rate of pay for overtime was directly related to the ordinary hourly rate of pay. While speculative, it is reasonable to ask that if the parties have agreed to such a significant change, as contended by the MUA, why subclauses 13.1 and 14.2 of the 2011 Agreement did not palpably state that overtime, from commencement of the enterprise agreement, would be based upon the amalgamated annual salary hourly rate of pay.

[66] Finally, the Employer submits that to pay overtime and call-outs on the annual salary hourly rates of pay is effectively “double dipping”. By “double dipping”, the Employer means that employees are attempting to seek a penalty rate of pay for working overtime based upon a rate that is already inflated by approximately 37% for other purposes such as “rostered” overtime, annual leave loading and shift loading. In the old industrial relations parlance, the MUA is seeking a “penalty on a penalty”. The Employer submitted that this was not intended or a reasonable expectation of the parties. The Employer cites Shop Distributive and Allied Employees’ Association v Woolworths SA Pty Ltd (Woolworths)[2011] FCAFC 67 for the Commission not to reach an interpretation which would be absurd or unreasonable. I am of the view that such a significant change, if intended, would have required greater clarity and certainty.

[67] A consideration of the 2011 Agreement in its entirety and Woolworths inclines the Commission towards an interpretation that overtime and call-outs should be based upon the ordinary rate of pay contained in subclause 15.1 and not the annual salary hourly rates of pay in subclause 15.2. However, both parties referred extensively to negotiations to the 2011 Agreement. Consequently, it is appropriate to ask whether the bargaining for the 2011 Agreement reveals the intention of the parties as to the correct hourly rate of pay on which to base overtime and call-outs.

[68] Negotiations for the 2011 Agreement commenced in January 2011. At the meeting on 28 January 2011, the MUA tabled its log of claims which included the claim, “overtime for all workers after 1645 hours to be paid at double composite rate and all O/T, including CPDs at same rate” 2 (my emphasis).

[69] Following a telephone meeting on 7 February 2011, the Employer responded “overtime to be paid on a weekly basis. Consider as part of total package” 3. This response was tabled at a further meeting on 10/11 February 2011.

[70] In March 2011, the lead negotiators exchanged emails in which the Employer accurately sets out the MUA’s claim for double the composite hourly rate of pay and a comparable rate of pay in the 2008 Agreement in an overall cost assessment of the Union’s claims. It is clear from this document that each party knew the respective positions of the other party.

[71] On 15 April 2011, the Employer forwarded to the MUA its proposed draft agreement. The evidence of Mr Heath is that the Employer’s proposed draft agreement made minimal changes to the 2008 Agreement.

[72] On 22 April 2011, the MUA responded to the Employer’s draft agreement with its own draft proposed agreement. At draft subclause 13.6 of the MUA draft agreement it seeks for overtime to attract “double the ordinary hourly rate for all hours worked”.

[73] The MUA draft subclause 13.6 is a modification of subclause 13.6 of the 2008 Agreement. However, the proposed hourly rate of pay in draft Appendix A is significantly different, for example, the minimum level for a permanent employee increases from $28.30 per hour to $62.08. The significant increase is reflective of the MUA’s claim for a composite rate of pay where no additional allowances would be paid for normal hours of work 4.

[74] At a bargaining meeting on 6 May 2011, the Employer advised the MUA that, in order for a true comparison to be made between existing hourly rates of pay and the proposed composite hourly rate, it would be necessary to break down the proposed composite rate of pay into its component parts 5.

[75] On 12 May 2011, the Employer tabled a draft salary concept for the day shift roster and shift work. The MUA rejected the proposal and still sought a composite hourly rate of pay 6.

[76] On 2 and 3 August 2011, the bargaining discussions were elevated to the parties’ principal officers. At these meetings, Mr Gillett gives evidence that his understanding of the meetings is that the MUA dropped its claim for a composite hourly rate of pay and that a 6.5% salary increase would be applied to the 2008 Agreement 7. Mr Heath, who was at the 2 and 3 August 2011 meetings, agreed that Mr Gillett’s understanding is correct8.

[77] Mr Gillett gave further evidence that at the 2 and 3 August 2011 meetings, the MUA agreed that “all overtime for a proposed “48 hour week roster” would be paid at double the ordinary hourly rate of pay”. On this particular issue, which is at the heart of this dispute, Mr Heath’s evidence is that he could not recall the matter being discussed. 9

[78] Following the meetings on 2 and 3 August 2011, Mr Gillett forwarded to the MUA on 11 August 2011, an email which sets out the Employer’s understanding of what had been agreed to at the meeting and cross referenced them to a document tabled in the discussions. The document 10 sets out that “all additional overtime beyond the rostered hours of work to be paid at double the ordinary time” and this is reflected also in a comparable analysis for each classification included in the document. In addition, the Employer attached a further draft proposed agreement which sets out a draft subclause 12.7 in which it states that overtime will attract “double the ordinary rate of pay”11.

[79] On 27 September 2011, Mr Heath emailed Mr Gillett concerning matters which had been agreed over the course of negotiations. One of the items reads as follows:

“Overtime - All overtime regardless of whether or not an employee is engaged on a roster is to be paid at the rate of double time”. 12

[80] Mr Heath concedes, in retrospect, that he should have given greater clarification to make it clear that there were two different hourly rates and it would be double the respective rate of pay 13. Mr Parker, for the Employer, describes this concession as “rationalisation after the fact”14.

[81] Mr Heath does not admit in evidence that the MUA changed its claim for double the employees respective rate of pay. However, that claim was made at a time when the Union was seeking a single composite hourly rate of pay and the 2008 Agreement provided for the first two hours of overtime to be paid at time and one half.

[82] Over the course of bargaining for the 2011 Agreement, the concept of a composite rate of pay was replaced with an annual salary and related principles. In my view, this was an important change in negotiations and cannot be overlooked in terms of its consequences.

[83] The difficulty often with oral evidence in support of extrinsic facts, where there is uncertainty of interpretation in an enterprise agreement, is that the witnesses are predisposed to their respective positions. For this reason, safety of understanding and intention best comes from the relevant documentation.

[84] The documentation clearly demonstrates that the parties commenced from different positions on the hourly rate of pay for overtime. During the course of those discussions, Mr Gillett provided documentation and gave oral evidence that the Employer moved on overtime being paid at time and one half for the first two hours, to double the ordinary hourly rate of pay and that was agreeable to the MUA 15.

[85] While the MUA acknowledge that the overtime rate increased from time and one half to double time, it could not, either in oral evidence or documentation, demonstrate that the Employer agreed to double time at the employees respective hourly rate of pay. In fact, the only document the MUA relies upon is subclause 15.2 in the 2011 Agreement which is the subject of this dispute and, as I have already found, part of the ambiguity and uncertainty in the enterprise agreement.

CONCLUSION

[86] Having given consideration to the extrinsic material, the history of the 2011 Agreement in the form of the provisions in the 2008 Agreement, the principles of interpretation of enterprise agreements, submissions, in particular “double dipping” and the evidence, and for the reasons set out above, I determine that the hourly rate of pay for the purposes of Clause 13: Overtime and Clause 14: Call-Outs of the 2011 Agreement shall be that contained in subclause 15.2 of the enterprise agreement. In accordance with this Decision and Reasons for Decision, the application will be dismissed.

COMMISSIONER

Appearances:

L Edmonds for the Applicant.

D Parker of counsel for the Respondent.

Hearing details:

2013:

Perth,

19 August.

 1   Exhibit A2

 2   Exhibit A4(4)

 3   Exhibit A4(5)

 4   Exhibit A4(6)

 5   Exhibit A4(7)

 6   Exhibit A4(8)

 7   Exhibit R6(19)

 8   Transcript PN130

 9   Exhibit A4

 10   Exhibit R6(4)

 11   Exhibit R6(4)

 12   Exhibit R6(5)

 13   Transcript PN247

 14   Transcript PN 282

 15   Exhibit R6(27)

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