Mark Drew v Essential Energy
[2024] FWC 3489
•13 DECEMBER 2024
| [2024] FWC 3489 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.739—Dispute resolution
Mark Drew
v
Essential Energy
(C2024/2813)
| DEPUTY PRESIDENT EASTON | SYDNEY, 13 DECEMBER 2024 |
Alleged dispute about any matters arising under the enterprise agreement and the NES;[s186(6)] – classification – progression provision – qualification provisions – overlapping provisions – drafting deficiencies – interpretation.
A dispute has arisen regarding the terms of the Essential Energy Enterprise Agreement 2021 (2021 Agreement). Mr Mark Drew has been employed by Essential Energy and its predecessors since 1990. The dispute concerns the pay level Mr Drew should be paid under the enterprise agreement.
Mr Drew commenced employment with Northern Rivers County Council in 1990 as an electrical apprentice. He completed his apprenticeship in 1994 and was then employed as a Metering Technician, Metering Team Leader and then Meter Replacement Coordinator. In 2015 Mr Drew was appointed to the position of Program/Project Manager.
Significantly, from 2015 onwards he was paid as a Technical Officer Level 15.
The Essential Energy Enterprise Agreement 2013 (the 2013 Agreement) applied to Mr Drew’s employment at the time he was promoted to the position of Program/Project Manager. The 2013 Agreement contained three provisions that are important to the current dispute. The three terms are not materially different to the corresponding provisions in the 2021 Agreement:
The 2013 Enterprise Agreement:
1.20 APPOINTMENTS AND PROGRESSION
Appointments will be made at the base classification rate for each applicable role.
Appointments may be made above the entry level for the classification for an applicable role within the appropriate evaluated band subject to approval by executive level management.
Progression within each classification will be as described for each role in Section 8 - Progression Guidelines.
In addition to the progression criteria as mentioned above, all progression will be subject to satisfactory performance determined from performance review.
…
8.1 CLASSIFICATION GUIDELINES
…
Appointments
(i)All appointments will be made at the entry level for the classification established for the position.
(ii)All new appointments should hold a relevant qualification for the position.
(iii)If an appointment is made where the employee does not hold the relevant qualification, they will remain at the entry level until such time as they achieve the required qualification.
(iv)Where an appointment has been made to a position which spans two classification bands the appointment will be made at the entry level of the lower classification band.
(v)Where an appointment has been made without the required qualification, the employee will be provided the opportunity to complete the qualification and be provided with study assistance as per the relevant Essential Energy policy.
(vi)Appointments may be made above the entry level classification for an applicable role within the appropriate evaluated band subject to approval by executive level management.
Progression
(i)Progression within the evaluated classification band shall be based on documented satisfactory performance review on an annual basis.
…
8.2 PROGRESSION ARRANGEMENTS
…8.2.5 TECHNICAL OFFICER
…
TECHNICAL OFFICER (Degree/Technical Management) Level Pay Point Requirements 13 37 · Appropriate Degree qualification 14 38 · 12 months satisfactory performance at Level 13 15 39 · 12 months satisfactory performance at Level 14 16 40 · 12 months satisfactory performance at Level 15
The 2021 Enterprise Agreement
1.19 APPOINTMENTS AND PROGRESSION
Appointments will be made at the base classification rate for each applicable role. Appointments may be made above the entry level for the classification for an applicable role within the appropriate evaluated band subject to approval by executive level management or nominated delegate.
Progression within each classification will be as described for each role in Section 8 - Progression Guidelines.
In addition to the progression criteria as mentioned above, all progression will be subject to satisfactory performance determined from performance review.
…
SECTION 8 – PROGRESSION GUIDELINES
8.1 CLASSIFICATION GUIDELINES
…Appointments
(i)All appointments will be made at the entry level for the classification established for the position.
(ii)All new appointments should hold a relevant qualification for the position.
(iii)If an appointment is made where the employee does not hold the relevant qualification, they will remain at the entry level until such time as they achieve the required qualification.
(iv)Where an appointment has been made to a position which spans two classification bands the appointment will be made at the entry level of the lower classification band.
(v)Where an appointment has been made without the required qualification, the employee will be provided the opportunity to complete the qualification and be provided with study assistance as per the relevant Essential Energy policy.
(vi)Appointments may be made above the entry level classification for an applicable role within the appropriate evaluated band subject to approval by executive level management or nominated delegate.
Progression
(i)Progression within the evaluated classification band shall be based on documented satisfactory performance review on an annual basis.
8.2.5 TECHNICAL OFFICER
…
TECHNICAL OFFICER (Degree/Technical Management)
Level Pay Point Requirements 13 37 · Appropriate Degree qualification 14 38 · 12 months satisfactory performance at Level 13 15 39 · 12 months satisfactory performance at Level 14 16 40 · 12 months satisfactory performance at Level 15
Mr Drew was a Technical Officer which meant that his classification under the 2013 Agreement and the 2021 Agreement spanned classification levels 13 to 16. Mr Drew does not have a degree and so he does not hold the relevant qualification to be appointed as a Technical Officer. Even though he does not hold the relevant qualification, the classification guidelines allowed him to be appointed to the position. However, under the relevant appointment provisions he “will remain at the entry level until such time as [he] achieves the required qualification.” Mr Drew has not ever attained the required qualification.
Mr Drew argued that the “progression” provision in the 2013 Agreement and the 2021 Agreement entitled Mr Drew to progress through the classification ranges. Mr Drew based his argument on the fact that when he commenced as a Technical Officer he was paid at Level 15 instead of Level 13. Level 13 was and is the entry-level. Mr Drew argued that the ceiling on progression (that constrains him to the entry level) does not apply to him because he has never been paid at the entry-level. Therefore, Mr Drew argued, he should have progressed from level 15 to level 16 after completing 12 months of satisfactory performance at level 15.
In his written submissions Mr Drew said:
“The Applicant submits that the provision has no application to his appointment despite him not holding the relevant qualification as he was appointed to Level 15 not appointed to the “entry level” in the 2013 Enterprise Agreement (and subsequent instruments), which was Level 13. It is respectfully submitted that having not been appointed to the entry level, any provision requiring an employee to “remain at the entry level”, plainly, does not apply to the Applicant if the words of the relevant industrial instrument/s are given an objective or ordinary meaning.”
Interpretation principles
In AMWU v Berri Pty Limited [2017] FWCFB 3005 at [114], (2017) 268 IR 285 at 310, (“Berri”) the Full Bench distilled principles for interpreting enterprise agreements. Those principles are often quoted and are not controversial.
The Federal Court has applied substantially the same approach. In James Cook University v Ridd (2020) 278 FCR 566, (2020) 298 IR 50, [2020] FCAFC 123 at [65], the Full Court of the Federal Court summarised the relevant principles applicable to the interpretation of an enterprise agreement:
(i)The starting point is the ordinary meaning of the words, read as a whole and in context (City of Wanneroo v Holmes [1989] FCA 553; 30 IR 362, 378; City of Wanneroo v Australian Municipal, Administrative, Clerical and Services Union [2006] FCA 813; 153 IR 426 [53]; WorkPac Pty Ltd v Skene [2018] FCAFC 131; 264 FCR 536 [197]).
(ii)A purposive approach is preferred to a narrow or pedantic approach — the framers of such documents were likely to be of a “practical bent of mind” (Kucks v CSR Limited [1996] 66 IR 182, 184; Shop Distributive and Allied Employees’ Association v Woolworths SA Pty Ltd [2011] FCAFC 67 [16]; WorkPac Pty Ltd v Skene [2018] FCAFC 131; 264 FCR 536 [197]). The interpretation “turns upon the language of the particular agreement, understood in the light of its industrial context and purpose” (Amcor Limited v Construction, Forestry, Mining and Energy Union [2005] HCA 10; 222 CLR 241 [2]).
(iii)Context is not confined to the words of the instrument surrounding the expression to be construed (City of Wanneroo v Australian Municipal, Administrative, Clerical and Services Union [2006] FCA 813; 153 IR 426 [53]). It may extend to “… the entire document of which it is a part, or to other documents with which there is an association” (Short v FW Hercus Pty Ltd [1993] FCA 51; 40 FCR 511, 518; Australian Municipal, Administrative, Clerical and Services Union v Treasurer of the Commonwealth of Australia [1998] FCA 249; 82 FCR 175, 178).
(iv)Context may include “… ideas that gave rise to an expression in a document from which it has been taken” (Short v FW Hercus Pty Ltd [1993] FCA 51; 40 FCR 511, 518).
(v)Recourse may be had to the history of a particular clause “Where the circumstances allow the court to conclude that a clause in an award is the product of a history, out of which it grew to be adopted in its present form…” (Short v FW Hercus Pty Ltd [1993] FCA 51; 40 FCR 511, 518).
(vi)A generous construction is preferred over a strictly literal approach (Geo A Bond and Co Ltd (in liq) v McKenzie [1929] AR 499, 503-4; City of Wanneroo v Australian Municipal, Administrative, Clerical and Services Union [2006] FCA 813; 153 IR 426 [57]), but “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” (City of Wanneroo v Holmes [1989] FCA 553; 30 IR 362, 380).
(vii)Words are not to be interpreted in a vacuum divorced from industrial realities but in the light of the customs and working conditions of the particular industry (City of Wanneroo v Holmes [1989] FCA 553; 30 IR 362, 378-9; WorkPac Pty Ltd v Skene [2018] FCAFC 131; 264 FCR 536 [197]).
On review in Ridd v James Cook University (2021) 310 IR 109, [2021] HCA 32 at [17] the High Court observed:
“… Both parties sought to resolve any tension between the Enterprise Agreement and the Code of Conduct by interpretation of the Enterprise Agreement itself, particularly cl 14. In that process of interpretation, an important matter of context is the industrial nature of the instrument. Industrial instruments are not always drafted carefully by lawyers or professional drafters, and hence the literal words of a provision might more readily be understood to have a meaning other than their ordinary meaning if the context so suggests.”
As the Full Court in WorkPac Pty Ltd v Skene (2018) 264 FCR 536, [2018] FCAFC 131 summarised at [197]:
“The starting point for interpretation of an enterprise agreement is the ordinary meaning of the words, read as a whole and in context. The interpretation “turns on the language of the particular agreement, understood in the light of its industrial context and purpose.” The words are not to be interpreted in a vacuum divorced from industrial realities; rather, industrial agreements are made for various industries in the light of the customs and working conditions of each, and they are frequently couched in terms intelligible to the parties but without the careful attention to form and draftsmanship that one expects to find in an Act of Parliament. To similar effect, it has been said that the framers of such documents were likely of a “practical bent of mind” and may well have been more concerned with expressing an intention in a way likely to be understood in the relevant industry rather than with legal niceties and jargon, so that a purposive approach to interpretation is appropriate and a narrow or pedantic approach is misplaced.”
[Citations omitted]
Consideration
Clause 1.19 gives effect to the progression guidelines in Section 8 of the 2021 Agreement. The first and third paragraphs of clause 1.19 merely recite portions of the guidelines themselves:
The “Progression Guidelines” in Section 8 of the 2021 Agreement are in three parts: “appointments”, “progression” and “progression arrangements”.
The “progression” and “progression arrangements” parts of the Guidelines are interdependent insofar as neither part can be read without the other part. The “progression arrangements” contain numerous tables, each specifying the criteria for progressing within the grades/pay points. The “progression” part of the guidelines sets the rules for how employees can progress.
The root of the dispute between the parties is the apparent inconsistency between the “appointments” part of the guidelines and the “progression” part. The central problem in reconciling these two parts is that one subclause in the “appointment” part imposes a rule for progression. As such, the two parts cannot be considered completely independently of the other.
Worse still, the “appointments” part of the guidelines has its own internal inconsistency because it sets rules/guidelines for the appointment of employees to particular classifications but sets inconsistent rules attached to two different and unrelated criteria. That is, within the “appointments” part the guidelines set certain rules depending on whether the employee is newly appointed to the classification and then different rules depending on whether the employee has the minimum qualifications for the classification.
The most compelling interpretation/resolution of these drafting difficulties is to give priority to the provision in the “appointments” part of the guidelines that establishes the rule that employees do not progress through the grades of each classification unless they have obtained the minimum qualifications.
The default provisions within the guidelines most clearly show how, in broad terms, the guidelines are meant to typically operate. For Technical Officers such as Mr Drew the default provisions within the guidelines are as follows:
(a)new appointments as Technical Officers are made at the entry-level for the classification being Level 13, Pay Point 37;
(b)the “progression arrangements” for the Technical Officer classification records the “requirement” for progression at the entry level to be “appropriate degree qualification”;
(c)if the new Technical Officer appointee does not have the relevant qualification (degree) they will remain at the entry-level 13 until such time as they achieve the required classification;
(d)in order to progress from the entry-level (13) to the next level (14) the Technical Officer must meet the requirements of Level 13 (the appropriate degree) and the requirement for Level 14, being “12 months satisfactory performance at Level 13”;
(e)if the appointee does not ever obtain the appropriate qualification then they remain at the entry level (13).
The default position is that employees who do not obtain the appropriate qualification do not progress.
The guidelines allow for exceptions. Firstly the guidelines allow an employee to work indefinitely without obtaining the appropriate qualification. Secondly the guidelines allow an employee to commence their appointment at grades higher than the entry level, subject to approval by the employer.
The nub of Mr Drew’s argument is that the default provision (that employees who do not obtain the appropriate qualification do not progress to higher grades) does not apply because Mr Drew was the beneficiary of at least one of the two exceptions.
This argument relies heavily on the use of the word “remain” in the third of the “appointments” clauses. By Mr Drew’s reasoning only those who are appointed at the entry-level “remain” at the entry-level if they do not obtain the relevant qualification.
If Mr Drew is correct the outcome is counter intuitive. It would mean that employees who do not hold the relevant qualifications are treated differently, in terms of progression, if they commenced at different grades. A Technical Officer who commences at Level 14 but does not have the appropriate qualifications can progress through to level 16, but a Technical Officer who commences at Level 13 who also does not have the appropriate qualifications, does not ever progress beyond Level 13. There is no discernible rationale for why the Progression Guidelines would differentiate in this way.
I accept that there is some ambiguity in the terms of the Agreements that could arguably allow consideration of the surrounding circumstances. Essential Energy sought to rely on evidence of how the Progression Guidelines have been administered for the last decade as well as conduct since the 2021 Agreement was made. Essential Energy sought to rely on these materials as evidence of a common understanding between the parties about the terms of the Progression Guidelines.
At the contested hearing I allowed this evidence to be admitted and allowed witnesses to be cross-examined about the evidence. Mr Drew objected to much of the evidence at the time Essential Energy sought to tender it and for the most part I did not uphold Mr Drew’s objections. In dealing with Mr Drew’s objections I made it clear that the relevance of the evidence was clearly in contest and that the parties were able to make submissions about how much weight, if any, I could and should give to evidence of this kind.
The Commission must conduct itself in a matter that is “quick, informal and avoids unnecessary technicalities” (per s.577(1)(b)). Rather than making final rulings about admissibility and relevance during the evidentiary stage of the hearing it was, in my view, more expedient to receive the evidence and then allow the advocates to make submissions about that evidence after the full breadth and depth of the dispute had been revealed. This approach does not suit every matter but I was satisfied that there was no prejudice to the parties, and that the admission and receipt of the evidence was not likely to unduly prolong the hearing or waste the time and resources and the parties. In this case the parties, particularly Essential Energy, had every opportunity to present their argument about whether such evidence can be used and should be used to resolve the dispute at hand.
The evidence filed by Essential Energy included extensive evidence of the establishment and operation of a working group that was convened after the 2021 Agreement was made. One of the “matters reserved” in the 2021 Agreement (clause 6.13(a)) related to the classification structure and the AQF framework:
“(a) The Classification Structure and Progression Guidelines to determine if the current structure continues to retain its relevance and effectiveness; and to ensure the AQF System remains aligned to the skills, training and qualification outcomes which are necessary for a rapidly changing sector/business work methods, structures, systems and technology during the nominal term of this Enterprise Agreement.”
A working group was convened to address this matter and Essential Energy led evidence from Mr Andrew Parrish who is a member of that working group. The parties in the working group appear to carry the assumption that Technical Officers currently cannot progress beyond the entry level unless they obtain a degree.
This evidence is consistent with Essential Energy’s construction of the Agreement but is not determinative because I am satisfied that the ordinary meaning of the words in the three interrelated provisions do not require Mr Drew to be progressed beyond the entry-level for the classification being Level 13, Pay Point 37.
I have reached this conclusion by applying the well-established principles referred to above, by reference to the ordinary meaning of the words in the three interrelated provisions, read as a whole and in context, and read as generously as possible so they make sense according to the basic conventions of the English language.
The most internally cohesive construction of the terms of the Agreement is that employees who do not obtain the appropriate qualification do not progress beyond the entry level, subject to exceptions. The exception that applies to Mr Drew (that employees can commence their appointment at grades higher than the entry level, subject to approval by the employer) does not exempt him from every criteria or constraint contained in the balance of the provisions.
DEPUTY PRESIDENT
Appearances:
A Kentish for the Applicant
L Shanahan for the Respondent
Hearing details:
2024.
Sydney (By Video using Microsoft Teams and Telephone)
July 2, 3.
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