[2019] FWC 3830

FAIR WORK COMMISSION

DECISION

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

Ms Jodie Cross
v
The Smith’s Snackfood Company Ltd T/A The Smith’s Snackfood Company
(C2018/6218)

COMMISSIONER HUNT

BRISBANE, 3 JUNE 2019

Alleged dispute about any matters arising under the enterprise agreement and the NES;[s186(6)] – whether union payroll deductions include only those unions covered by the agreement .

[1] Ms Jodie Cross has made an application to the Fair Work Commission (Commission) pursuant to s.739 of the Fair Work Act 2009 (the Act) to deal with a dispute that she has with her employer relevant to union fees being deducted from her employer’s payroll system in accordance with clause 10.4 of The Smith’s Snackfood Company, Queensland – Enterprise Agreement 2017 (the Agreement). The Respondent to the dispute is The Smith’s Snackfood Company Ltd T/A The Smith’s Snackfood Company (Smiths).

Background

[2] Ms Cross is an employee of Smiths at its operation in Queensland. She has been employed as a process operator for seven years.

[3] The Agreement covers all sites of Smiths in Queensland, where the work is in connection with manufacturing, maintenance, warehousing and distribution. The Agreement was approved by the Commission on 21 December 2017 and commenced operation on 28 December 2017. The nominal expiry date of the Agreement is 19 September 2020.

[4] In accordance with clause 1.4 of the Agreement, and confirmed in the decision approving the Agreement, 1 the National Union of Workers (NUW), the Transport Workers’ Union of Australia (TWU), and the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU) are parties covered by the Agreement.

Australian Workers’ Union

[5] Ms Cross is one of 33 Smiths employees whom have become members of the Australian Workers’ Union (AWU) post-dating the approval of the Agreement. There is no contest that the AWU is entitled to represent the interests of the 33 employees.

[6] In correspondence dated 18 October 2018 from the AWU to Smiths, the AWU referred to a conversation that Ms Kristen Andrews, Senior HR Advisor had with the AWU, advising that Smiths would not agree to employee payroll deductions for members of the AWU. It was purportedly stated by Ms Andrews that Smiths would allow payroll deductions for NUW members, as provided for in the Agreement.

[7] Clause 10.4 of the Agreement provides as follows:

“Payroll Deductions

The Company will provide employees with the ability to have Union fees deducted from the payroll system”.

[8] In the above correspondence, the AWU requested that Smiths reconsider its decision not to allow payroll deductions for employees who are members of the AWU. On 23 October 2018, a representative of Smiths responded:

“As you would be well aware the AWU is not covered by the Smith’s Snackfood Company, Queensland Enterprise Agreement 2017 (the Tingalpa Agreement). The Unions who are covered by the Tingalpa Agreement are named in Clause 1.4 as well as in the approval decision by FWC, dated 21 December 2017.

Accordingly, any reference to “Union” or “Unions” within the Tingalpa Agreements refers to those Unions who are covered by the Agreement and not the AWU who was not a bargaining representative for the purposes of negotiating the Agreement.

Thus, it is only the Unions who are covered by the Tingalpa Agreement who are entitled to the benefits of the Union-related clauses in the Agreement, namely:

• Clause 10.1 – Union Recognition

• Clause 10.2 – Meetings of Team Members

• Clause 10.3 – Union Delegate Training

• Clause 10.4 – Payroll Deductions

On this basis we refuse your assertion that the AWU and your members who are our employees are entitled to the benefit of Clause 10.4 Payroll Deductions.”

[9] An employee memorandum was issued by Smiths on 24 October 2018, informing its wages employees employed at the Tingalpa worksite that Smiths had not granted the AWU the “benefits/privileges under our Agreement”, which included clause 10.4.

[10] Also on 24 October 2018, Ms Cross and 32 other employees submitted a grievance to Smiths, on the basis that Smiths had refused to provide them the benefit of having their union fees deducted from the payroll system in accordance with clause 10.4 of the Agreement.

[11] Smiths responded to the grievance on 25 October 2018, advising that its position remained consistent with its earlier correspondence.

[12] Ms Cross seeks, in filing her s.739 application that pursuant to clause 10.4 of the Agreement, Smiths provides her and the other 32 employees, with the ability to have their union fees deducted from the payroll system and remitted to the AWU.

Dispute before the Commission

[13] A conference between the AWU, Smiths and the NUW was conducted before me on 21 November 2018. The CEPU communicated that it did not wish to participate in the conference. No response was received from the TWU. The matter could not be resolved at the conference and directions were issued for the filing of material.

[14] Mr Benjamin Fullarton of the AWU filed written submissions on behalf of Ms Cross in support of her application. Smiths filed written submissions and a witness statement given by Ms Rebecca Cure, former senior HR Manager for Smiths. Ms Cross and the AWU did not file submissions in reply to Smiths’ submissions.

[15] The NUW filed an outline of submissions. No submissions were made by the TWU or the CEPU.

[16] While the AWU, Smiths and the NUW each proposed alternative wording for the question for arbitration, the parties ultimately agreed to the NUW’s phrasing of the question for arbitration as follows:

“Whether the proper construction of clause 10.4 of the Agreement is that the reference to ‘Union’ in clause 10.4 is a reference to only those Unions covered by the Agreement”.

[17] This matter was heard before me on 29 March 2019. At the hearing, Ms Cross appeared and was represented by Mr J.C. Dwyer of Counsel, instructed by the AWU. Smiths were represented by Mr M. Rodgers of Livingstones. Mr L. Tiley of Hall Payne Lawyers appeared on behalf of the NUW. Leave was granted pursuant to s.596 for the representatives to appear given the complexity of the matter.

Ms Cross’s evidence and submissions

[18] Ms Cross submitted that the reason for the refuel by Smiths to not extend the benefit of clause 10.4 of the Agreement to its employees who are members of the AWU, is an error.

[19] Ms Cross submitted that in accordance with clause 10.4, there is an obligation on Smiths to provide its employees, which includes Ms Cross, with the ability to have union fees deducted from the payroll system.

[20] Ms Cross submitted that the “Union” of which she is a member is irrelevant, having regard to the proper construction of the Act.

Proper construction of clause 10.4 of the Agreement

[21] Ms Cross submitted that, having regard to the relevant principles as articulated in the AMWU v Berri decision (outlined below), she is entitled to the benefit of clause 10.4 of the Agreement, notwithstanding that she is a member of the AWU.

[22] Ms Cross submitted that there is no definition of the noun “Union” in the Agreement.

[23] As to the context of clause 10.4 within Part 10 of the Agreement, Ms Cross submitted that clause 10.1 – Union Recognition – deals with particular benefits given to a “Union”; and clause 10.3 – Union Delegate Training – provides a benefit to a “Union”. However, Ms Cross submitted that clause 10.4 is distinguished from clauses 10.1 and 10.3, in that clause 10.4 provides a benefit to an employee, not a Union.

[24] It is submitted that, within the context of the relevant Part, clause 10.4 provides a benefit to an employee who “happens to be a member of a union”, which in the current circumstances is the union that has eligibility to represent Ms Cross and her industrial interests under the Act.

[25] Ms Cross submitted there is no reason to place a narrow restriction on the interpretation of the noun “Union” in clause 10.4. She submitted that if the parties had intended a limited operation, they would have expressed such as is done in relation to clause 10.1.3 as follows:

“10.1.3 Recognition of Union Officers – The Company recognises the Unions party to this Agreement in their representation of members employed at this site and will allow entry to duly authorised officers of these Union/s provided that:

(a) such entry is in accordance with applicable legislation;

(b) prior arrangements have been made with the Company, including advice of the purpose of the visit, and the authorised officer reports on arrival to the Company’s authorised representative;

[26] Ms Cross submitted that the fact that the Agreement does not cover the AWU is irrelevant. Clause 10.4 does not provide any concession or entitlement to the AWU. The “obligation” under clause 10.4 is on Smiths, to provide the ability to have union fees deducted from the payroll system; and the “entitlement” to an employee under the clause is to have the ability to have their union fees deducted from the payroll system.

[27] At the hearing of this matter, the AWU on behalf of Ms Cross made reference to a number of clauses in the Agreement that allow an employee of Smiths to elect a “union representative”. For example, the AWU referred to clause 4.4.5(c) which provides:

“First written warning: This involves a formal discussion between a team member and an operations coordinator or manager, a union representative or co-worker of the team member's choice.” 2

(Emphasis added)

[28] In referring to this clause, among others, the AWU submitted that the Agreement allows an employee to elect which union represents them for the relevant process, and that the clause cannot be read as allowing an employee only to elect a union covered by the Agreement. The AWU submitted that such a restriction would be unfair. 3

[29] I enquired how the AWU intended to apply their contextual position to the specific interpretation of clause 10.4 as relevant to this dispute. The AWU argued that clause 10.4 must be interpreted having regard to the text of the Agreement as a whole, as follows:

“THE COMMISSIONER: So how is the Commission tasked with dealing with only the question before it, without touching on all of these other clauses?

MR DWYER: Because, Commissioner, in the proper exercise of interpreting an EB, the construction process involves looking at the agreement as a whole. The ultimate proposition I'm going to put to you is that looking at clause 10.4, and 10.4, alone, the term, "union", must be read broadly. And I say it must be read broadly because of the language used in 10.4 which I'll come to in a moment, but the support for my proposition that you need to read it broadly and need to look at it in isolation as opposed to, by reference to other clauses, is that by going to these other clauses I can show you that in each of those clauses where the term, "union", is raised in one context or another, varied language is used and the varied language must be read in the context of the specific work that that specific clause has to do.

So, consultation is one specific purpose, one specific task, and there are different rights that flow from that, that stem from, in my submission, the underpinning principles of procedural fairness. The same with this, in terms of the disciplinary process. It would be, in my submission, absurd to suggest that a team member who is legitimately a member of the AWU, couldn't call upon the AWU to assist them with a disciplinary process. It would be an absurd – and it would be unfair in my submission. If the matter were to come before the Commission in the context of an unfair dismissal and that team member had been refused representation by the AWU, that would be a very serious thing to be taken into account in determining whether there was procedural fairness, in my submission. And that's how this agreement has to be read.

So, to answer your question, Commissioner, I am saying that this is not a broad based argument about what the term, "union", means in this EB. I take you to these various clauses to demonstrate that the term, "union", can mean different things in different clauses, and each one of these clauses, were it to fall into dispute, would need to be the subject of some discussion as to how it's going to be interpreted, hopefully not down here.

Now that's the difficulty with this EB because this issue has only arisen after it's been certified and there's no definition. But for today's purposes my ultimate submission is going to be that you need to look at clause 10.4, whilst considering the context and saying, okay, well, "union", is used in different ways, in different parts, so what does this mean? What does it mean in 10.4? It says, "the deduction of union fees", and my submission to you is that can be read broadly. And it can be read broadly because in other parts of the agreement it can be read broadly, as well, when having regard to what the purpose of the clause is. Does it confer a benefit? Does it protect a right? If so, then it ought to be read broadly. Is it a clause that deals with functions of the agreement, like bargaining and wage negotiation? Sure, maybe read it narrowly in those circumstances.” 4

[30] Further, the AWU submitted:

“And my submission is that if you look at the evidence of Ms Cure….. if you have a look at the background to it, none of that's disputed. There was no involvement of the AWU. But this isn't about the AWU. This isn't about the AWU having rights under this agreement, or trying to have rights under this agreement, or exercising rights under this agreement, specifically in respect of 10.4. This is about a clause, 10.4, that confers a benefit on a party to this agreement, namely an employee. It specifically, and exclusively and unilaterally confers a benefit on her that she can, if she wants to, have her union fees deducted through the payroll system and she's seeking to draw upon that benefit.” 5

[31] In response to Smith’s submissions as to the bargaining context of clause 10.4 (outlined below), the AWU submitted the following in support of Ms Cross’ application:

“MR DWYER: I will say again…..that the language throughout the agreement is – it's necessary to refer to it in terms of appreciating the context in which 10.4 arises. But when you look at the agreement as a whole it's readily apparent the language has been varied, or the language is varied, and it is varied in a manner that, whether it was by intention or not, generally suits the purpose of each particular clause. It is clearly used those earlier clauses around consultation for change and disciplinary process. There is a unilateral election of representation granted in the agreement where it says, "their union." So there is clearly a way in which this agreement can work quite comfortably and practically by reading each clause in its own particular narrow context. To that end, 10.4, in my submission is readily open to an interpretation that the term, "union", in that clause has to be read widely, given the rights that it infers and the functions that clause 10.4 has with respect to its employees.

THE COMMISSIONER: Given that it was a new clause should the Commission have regard to what was the bargain reached?

MR DWYER: The bargain reached, and again this is addressed in Ms Cure's affidavit, the bargain – and this is addressed in Berri, as well. The appropriate thing to look at is not what was agreed by the bargaining representatives, it's what was agreed to by the employees. I think in paragraph 13 of the paragraphs listed in Berri, that's the important thing. I think I'll take you to that passage, in fact, because it's helpful. paragraph 13, it says:

Looking at the factors that you can take into account the diversity of interests involved in the negotiation and making of enterprise agreements warrants adoption of a cautious approach to the admission and reliance upon the evidence of prior negotiations and the positions advanced during the negotiating process. Evidence as to what the employees covered by the agreement were told, so the employees covered by the agreement were told may be more of maybe more assistance than evidence of the bargaining positions taken by the employer or a bargaining rep during the negotiations of the agreement.” 6

[32] Ms Cross submitted that for the above reasons, the answer to the question for arbitration should be that Smiths will provide Ms Cross with the ability to have union fees deducted from the payroll system.

Smiths’ evidence and submissions

Proper construction of clause 10.4 of the Agreement

[33] Smiths conceded that clause 10.4 of the Agreement is “ambiguous or susceptible of more than one meaning”. 7 Smiths submitted that the phrase “Union fees” could have any of the following meanings:

(a) only the fees of those Unions covered by the Agreement (as contended by Smiths);

(b) the fees of any Union at large, whether they are registered or not;

(d) the fees of any registered Union who are entitled to enrol in its membership employees of the Respondent by virtue of the work they perform for the Respondent. 8

[34] Smiths made reference to the Full Bench decision in Public Transport Corporation of Victoria v Australian Rail, Tram and Bus Industry Union and Others, 9 which found:

“The Commission would generally err on the side of finding an ambiguity or uncertainty in circumstances where there are rival contentions advanced before it and an arguable case can be made out for more than one contention”.

[35] Smiths submitted that the contradictory contentions of Ms Cross and Smiths is supportive of a finding that ambiguity and uncertainty exists regarding the wording of clause 10.4 of the Agreement, and accordingly the evidence of surrounding circumstances is admissible in this case. Smiths rely on the evidence of Ms Cure.

Context and history of the clause

[36] Ms Cure gave evidence that the wording in clause 10.4 was first introduced in The Smith’s Snackfood Company – Enterprise Agreement 2014 (the 2014 Agreement), and that it did not previously exist. At the time of introducing the terms into the 2014 Agreement, Smiths was already providing a payroll deduction facility for union membership fees for the NUW. The NUW wanted to formalise the arrangement, and it was included in the NUW’s log of claims as:

“10. That the Employer provide a payroll deduction facility for employees’ Union membership fees and agree to a direct debit arrangement for the payment of employees’ union fees.”

[37] Ms Cure stated that a “Summary of Key Changes to The Agreement” document was circulated to all employees at the completion of the negotiation process, and that this document stated “New clause providing Team members with the ability to have union deductions from the payroll system”. 10 She gave evidence that Smiths “only ever had 3 representative Unions on site at the time”, and that it was site practice to refer to these unions collectively as “the Union” or “Union”.11 Ms Cure gave evidence that she participated in the communication sessions where the terms of the Agreement were explained to the employees, and that the explanation of the terms was consistent with the above.12

[38] Smiths submitted that the AWU were not a bargaining representative for the 2014 Agreement; the only Unions with members employed by Smiths at that time were the NUW, the TWU and the CEPU. At the hearing of this matter, Smiths made reference to the negotiations for the 2014 Agreement and the context of the agreed clause as follows:

“MR RODGERS: The only unions who did have members were the NUW, the TWU and the ETU. And the NUW submissions in this regard are very relevant to an understanding of the context of these negotiations, and that is that the NUW had been the entrenched union at the site together with the TWU, and then more latterly, the ETU. So, effectively, between these three unions we would submit that they covered the field. If somebody wanted to be a union member, they were a member of one of those unions.

The minutes do reflect that the clause was agreed to and that the company was going to draft that clause. That clause was drafted by Ms Cure who is a non-legally qualified person, and she inserted the clause in the agreement together with the now clause 10.3, which is the union training [inaudible], which was also negotiated and introduced in that agreement at that time. And we would say that that is highly relevant in that both of these clauses were new; a new clause. This was the deal that was being bargained for at the time in 2014 by the bargaining representatives. And we would say that, quite frankly, at that stage there was no suggestion, there was no contemplation that any other union was being contemplated or that the words that were being used were going to be later interpreted to apply broadly to any union at large.” 13

[39] Smiths contended that the common contemplation and assumption on the part of the NUW, the TWU, the CEPU, Smiths and its employees at the time of the 2014 Agreement was that the “Union fees” referred to were those of the existing Unions who were a known entity on site, and “who were covered by the Agreement” (emphasis added). 14 Smiths further submitted:

“Given the lack of any other Union on site the Respondent submits that the term “Union fees” as used in Clause 10.1.5 of the 2014 Agreement and as explained to employees via the “Summary of Key Changes to the Agreement” document, would have been understood by the employees covered by the Agreement to relate to the fees of the existing Unions. This is reinforced by the practice adopted by the Tingalpa site of using the term “Union” to refer to any of the three on site Unions at the time”. 15

[40] Smiths submitted that the Commission must have regard to the common intention of the parties, and what a reasonable person would understand clause 10.4 to mean having regard to the language the parties have used in the Agreement. In accordance with the above submissions, Smiths contended that the Commission should find there was an objective intention of the parties to afford the benefit under clause 10.4 in relation to those existing site unions at the time the clause was agreed, those unions being the NUW, the TWU and the CEPU (that is, the Unions covered by the Agreement). Smiths submitted that a reasonable person would not understand the parties to have intended clause 10.4 to be referring to “any union at large”. Smiths submitted such an interpretation was never within the contemplation of the bargaining representatives, or the employees, at the time the clause was inserted.

Context of clause 10.4 within the Agreement as a whole

[41] While Smiths conceded that the noun “Union” is not defined in the Agreement, it submitted that the only unions referred to in the Agreement are those covered by the Agreement.

[42] Smiths submitted that in two instances, the term “Union” is qualified by the words “party to this agreement”. It submitted that the different “descriptions” of the term “Union” can be partly explained by the fact that the Agreement clauses were drafted by different drafters and inserted into the Agreement at different times. Smiths submitted in this regard, that clause 10.4 was drafted by Ms Cure, a lay person, whereas clause 10.1 which makes reference to “Unions party to this agreement” was already in existence in the “antecedent Agreement to the 2014 Agreement”. Smiths submitted that use of the term “Union” in a qualifying manner is an exception, with the most prevalent usage being with a capital “U” and clearly referring to the Unions covered by the Agreement. 16

[43] Smiths submitted that, in accordance with the above, the benefit provided to an employee under clause 10.4 is only in relation to one of the Unions covered by the Agreement.

[44] In response to the AWU’s submissions at hearing that the Agreement must be read in its entirety, Smiths stated as follows:

“Firstly, clause 3.1.6(d), which Mr Dwyer took you to. Sorry, 3.1.6(a) where he wasn't prepared to make a concession but could see that that could apply to the unions covered by the agreement. But then he took you to 3.1.6(c), where the agreement talks about, "their union", and his submission was that that would include the AWU.

The respondent's submission is that that clause needs to be read in its entirety. And if you look at clause 3.1.6(d), that clause gives the relevant team members the ability to appoint a representative for the purpose of the procedure. If the relevant team member appoints a representative for the purpose of consultation and the team members advise the company of the identity of the representative, the company will recognise the representative.

So in response to Mr Dwyer's submission that it's nonsensical that the AWU would not be consulted on these matters, we say that the clause deals with that. The AWU, or the member who was covered by this agreement, and in this case, Ms Cross, she could appoint a member of the AWU to represent her. And by virtue of clause 3.1.6(d) the respondent would be obligated to interact with the AWU, as it would, any of the other unions covered.

…

… Under (c), if you look at 3.1.6(a) it talks about "the union." We say that clause is referring to capital "U", "a union covered by the agreement." Similarly, (c), "their union", or, "one of the unions", who are covered by the agreement. However, in terms of the ability of employees to be represented by the AWU, (e) gives them that ability.

Similarly, if you look at the disciplinary procedure which is clause 4.5(c), we say that this is a clause that has been negotiated for the benefit of those unions who are covered by the agreement. And wherever the term, "union", appears that relates only to those unions covered by the agreement. Mr Dwyer's submission was that it would be nonsensical and it would be contrary to the clause to not allow an employee to be represented by a member of the AWU. And in relation to that we say that this agreement does need to be read in conjunction with the Act. The agreement can't override the Act. Where there's a provision in the Act then the employer ought to adhere to that provision in the Act. And if you look at the unfair dismissal provisions in terms of Section 387(d), one of the considerations as to whether a dismissal is harsh, unjust unreasonable, is any unreasonable refusal by the employer to allow the person to have a support person present to assist in any discussion in relation to the dismissal.

…

… Elsewhere in the agreement the term, "the union", is predominantly used. And whilst Mr Dwyer has conceded, for example, in….6.1.10(a), that the words, "the relevant union", might mean a union covered by the agreement but then takes issue with the words, 6.1.10, "their union", we would say that once you've interpreted 6.1.10(a) to be the relevant union, and the relevant unions are the unions who are covered by the agreement, that then should be the interpretation that is placed on the agreement, going forward.

…

… And we would say that these clauses when they've been used, the deal that was struck at the time, given that this agreement has been drafted by non-legal, legal people and they have used the term, "the union", almost exclusively throughout a few smatterings of, "their union", and we would say that that, when you look at it in context, refers to the unions that are covered by the agreement. Because those were the unions that were in contemplation at the time. There was no suggestion that there would be other unions that would be covered by the agreement. It just simply wasn't within their contemplation. So that's not what the parties objectively intended those clauses to mean. And more particularly, clause 10.4.” 17

[45] Smiths further submitted that such an interpretation is “consistent with the site practice”. 18

[46] As to the placement and context of clause 10.4, Smiths submitted that clause 10.4 falls under “Part 10 – Agreement Compliance and Union Related matters”. Smiths submitted the clause 10.1 – Union Recognition – applies only to those Unions covered by the Agreement. It conceded that clause 10.1.1 does not specifically state this, and refers simply to the term “Union”. However, Smiths submitted that clause 10.1.3 clarifies the relevant application with reference to “Unions party to this Agreement”. It submitted that clause 10.3 relevantly provides for Union delegate training, and specifically refers to “Unions covered by the Agreement”.

[47] Smiths submitted that in referring to Unions covered by the Agreement, clause 10.1 and clause 10.3 have the effect of demonstrating that by virtue of clause 10.4’s placement in the Agreement, usage of the word “Union” in that clause refers to unions covered by the Agreement and not any union at large. Smiths submitted that this is consistent with the vast majority of the usage of the word “Union” in the Agreement.

[48] Smiths submitted that clause 10.4 creates a binding obligation, but that it is a binding obligation that only applies to the union fees of the unions covered by the Agreement. Accordingly, Smiths submitted that the answer to the question for arbitration should be that Smiths is only obligated to provide Ms Cross with the ability to have the union fees deducted from the payroll system in relation to a union that is covered by the Agreement.

The NUW’s submissions

Background

[49] The NUW submitted that it represents the majority of employees employed by Smiths at the Tingalpa site. The NUW submitted that nationally, it represents a large number of Smiths employees.

[50] The NUW submitted that it has been a bargaining representative for “the majority of employees” at Smiths’ Tingalpa site, for decades, including for the Agreement the subject of this dispute. However, the NUW conceded that it did not have direct knowledge of the circumstances described by Ms Cross regarding the background of this dispute.

[51] At the hearing of this matter, the NUW submitted that it adopted and supported the submissions of Smiths, both written and oral. The NUW made the following submissions in support of Smith’s position.

Proper construction of clause 10.4 of the Agreement

[52] The NUW submitted that construction of clause 10.4 of the Agreement must begin with consideration of the ordinary meaning of the disputed words, 19 as well as consideration of the context, and regard to the text viewed as a whole.20

[53] The NUW submitted that the disputed word in clause 10.4 is “Union”, and made reference to clause 1.4 which provides that the parties covered by the Agreement are Smiths, all employees of Smiths engaged under its terms and conditions in connection with manufacturing, maintenance, warehousing and distribution operations, the NUW, the TWU and the CEPU.

[54] The NUW stated that while the term “Union” is not specifically defined in the Agreement beyond clause 1.4, in its submission, the term is only used in the Agreement to refer to the Unions covered by the Agreement, except where the phrase “credit union” is used.

[55] It was the NUW’s submission that it is clear clause 1.4 acts to give the term “Union” “meaning and effect” throughout the rest of the Agreement. 21

[56] The NUW further submitted that the term “Union” is predominantly capitalised throughout the Agreement. The NUW submitted that this capitalisation of the term, in the context of the Agreement, indicates that the term takes on the character of a proper noun which refers “not to general concept of ‘union’ or even ‘a union’, but to specify that ‘Union’ refers to one of the Unions who are party to the Agreement outlined in clause 1.4.”. 22

[57] The NUW made reference to Ms Cross’s submission that the term Union in the Agreement is a “noun”, however the NUW raised that Ms Cross provided no further guidance on how the term should be interpreted apart from stating that “union” must mean “registered organisation”. 23 The NUW submitted that there is nothing in the text of the Agreement which supports Ms Cross’s interpretation.

[58] The NUW stated that as the term ‘union’ is capitalised in clause 10.4, the term should be taken as used in this clause to specifically refer to the Unions that are covered by the Agreement as outlined in clause 1.4.

Context of the term

[59] The NUW submitted that the place and arrangement of clause 10.4 provides relevant context, in relation to the interpretation of the clause.

[60] The NUW submitted that clause 10.4, as well as its predecessors, sits within Part 10 of the Agreement. The NUW submitted that in relation to Part 10, “union related matters” clauses include:

(a) Clause 10.1.1 – Union recognition;

(b) Clause 10.1.2 – Union recognition;

(d) Clause 10.3 – Union Delegate Training; and

(e) Clause 10.4 – Payroll Deductions.

[61] As to clause 10.1.3, the NUW highlighted that the term “Union” is followed by the words “party to this Agreement”. Similarly, clause 10.3 apportions training leave to the various “Unions” party to the Agreement (with reference in this clause specifically being made to clause 1.4(c)-(e)). Therefore, the NUW submitted that clause 10.1 and 10.3 expressly refer to union matters for the Unions covered by the Agreement. The NUW argued that, given the proximity and placement of clause 10.4 to these relevant clauses, as well as the use of “Union” throughout the Agreement, it is reasonable for the Commission to determine that the term “Union” in clause 10.4 is reference to the “unions covered by the Agreement”. 24

[62] At the hearing of this matter, the NUW further stated:

“… And true it is that the authorities say that an agreement should be read as a whole, but in my submission there is little assistance to be derived from going through each of the other occasions in the agreement on which the word, "union", or, "unions", appears. That is, there's a couple of reasons for that. One is, there are different terms. That's stating the obvious. Another is that according to the unchallenged evidence of Ms Cure different policies are drafted by different people at different times. So it would be dangerous in the extreme to seek to divine a common meaning for each of those clauses, included as they were at different times for different people.

So that the journey that Mr Dwyer took you on through each of those causes is frankly, in my respectful submission, not going to give you much assistance in determining what it means in this clause. In my submission the best, the greatest guide to what was meant by the word as it appears in this clause comes from the extrinsic material. In our written submissions in paragraph 25 we had said initially that there was no ambiguity and then proceeded to address the alternative if there was ambiguity. I'm instructed that the submission of no ambiguity is no longer pressed which leaves all of the parties at the Bar table of one mind, that there is ambiguity, and it would therefore be consistent with Berri, Commissioner, for you to have regard to the extensive material that's being put in by Ms Cure, which again, as I say, was unchallenged.” 25

Common intention of the parties

[63] The NUW made reference to the fact that it had been party to, or a party covered by, agreements covering employees at Smiths for a substantial period of time, as has the TWU.

[64] In line with Smiths’ submissions, the NUW reiterated that the words of clause 10.4 were first inserted into the Agreement during negotiations for the 2014 Agreement. The NUW confirmed that the clause was inserted as a result of successful negotiations between the NUW and Smiths in relation to the following claim made by the NUW:

“a. “that the employer provide a payroll deduction facility for employees’ Union membership fees and agree to a direct debit arrangement for the payment of employees’ Union fees”.13 (“payroll claim”)”. 26

[65] The NUW further confirmed that, in making this claim, it sought to formalise a longstanding site agreement regarding deduction of membership fees from members’ wages where the employee provided authorisation for Smiths to do so. 27

[66] The NUW submitted that as there were no representatives from the AWU, “or any other union that was not party to the Agreement”, present during negotiations, it cannot be said that the parties turned their minds to the clause having application to unions at large. 28

[67] As to the common intention of the parties, and the Commission’s task of interpreting the relevant clause, the NUW stated the following:

“So that distinction is there drawn. In my respectful submission nothing in Berri detracts from the proposition that where a union is a bargaining representative to an agreement and there is a consensus between the union and the employer on a particular claim, that if that claim is ultimately agreed upon by the employees when it's put to them, that they have agreed, or the Commission is able to conclude that they have agreed to that which was negotiated on their behalf. And here, so if I can take you to this example, the NUW puts on a claim for this clause, the employer agrees to it, and then the employer goes to the employees, and this is attachment (e) to the statement of Ms Cure which is R1, and says this is the thing we will give you if you vote for this agreement.

Now I can't take you, Commissioner, to any words which say this thing only applies to these three unions and doesn't apply to the other union, because those words don't exist. But an employee who is the recipient of that information or presentation will have well understood that the deductions for union membership fees were for those existing organisations. There is no evidence that Ms Cross was, for example, a member of the AWU at the time, or that the AWU were in any way involved. It is uncontroversial that they were nowhere to be seen. I'm not trying to be critical but they are a stranger to the agreement, as they were to the negotiations. So it's my submission, Commissioner, that the evidence does reveal to you, and you are able to conclude that there is a common thread running through the negotiations between the NUW claim, the employer's ascent to it and the vote by the employees, such as to reveal a common intention and a common understanding.” 29

[68] The NUW submitted that Ms Cross’s contention that the term “Union” refers to “any union that is a registered organisation” is at odds with the objective intentions of the parties who made the Agreement. It submitted:

“The Applicant’s assertions may have the effect of requiring, for example, the Company to provide paid leave for any Union delegate, or to provide information on Union membership or induction rights to any union. Such an interpretation would unsettle the known parameters of the Agreement”. 30

[69] The NUW submitted that clause 10.4 provides a right that was bargained for by the members of the unions covered by the Agreement. It submitted that the clause affords members of those unions a right to have their union membership fees deducted by Smiths from their pay. It submitted it would be “incongruous” if those members had sought to bargain for a right for “any union member of any union” to have access to this facility. The NUW further submitted that where Ms Cross argues there is a distinction between clause 10.3 and clause 10.4 in that clause 10.4 confers a right to an “employee” rather than a union, this argument is misguided. At the hearing in this matter, the NUW stated:

“…in our submissions in paragraph 39, collectively we respond to the submissions of the applicant in paragraph 33 where the applicant seeks to say that it's really the employee that has the benefit of the clause in question. True is that the employee can derive the benefit from the clause, but we say we also derive a benefit from the clause. The union doesn't have to go and collect the money from these employees. The employer does it for the union. That is a benefit to the union, as well.

The fact that the clause facilitates the payment of membership fees in that way was inherently a part of the bargain that was struck. And to construe the agreement as providing that benefit to a stranger to the agreement, such as the AWU, would not be an industrially sensible outcome, in my respectful submission.” 31

[70] Further, the NUW submitted: 32

“The fact that the clause facilitates the payment of membership fees in that way was inherently a part of the bargain that was struck. And to construe the agreement as providing that benefit to a stranger to the agreement, such as the AWU, would not be an industrially sensible outcome, in my respectful submission. The notion of industrially sensible outcomes, Commissioner, if I'm not mistaken, didn't find its way into the Berri principles. But to the extent that the Commission needs an authority for the proposition that in the interpretation exercise it should strive to achieve an industrially sensible outcome, can I just take you to the authority I've handed up which is a recent Full Federal Court decision of CFMEU v Hay Point Services Proprietary Limited [2018] FCAFC 182 (Hay Point).

In paragraph 8, Commissioner, if I can just ask you to turn it up, please, the Full Court recites what was said in another 2018 Full Federal Court, WorkPac v Skene, as to the principles for the interpretation of industrial instruments. And there's a reference at the very bottom of the second page of the judgment to the High Court in Amcor, and specifically the judgment Chief Justice Gleeson and Justice McHugh. And then at the very end of the extract there's a reference to Amcor at 96, the decision of Justice Kirby. That extract from Skene doesn't actually, or I should say, WorkPac v Skene, doesn't actually flesh out what it is that was said in paragraph 96 of Amcor. It just effectively footnotes it. And helpfully, in Hay Point Services the Full Court explained in paragraph 9 that the reference there made to the observations of Justice Kirby 96 of Amcor is a reference to his Honour's remarks that the construction to be given to a clause in an industrial instrument should not be a strict one but one that contributes to a sensible industrial outcome such as should be attributed to the parties who negotiated and executed the agreement.

It's sometimes said that, no, you shouldn't have regard to that decision because Justice Kirby was writing it on his own. And that's true enough, Commissioner, that he wrote on his own, but it wasn't a minority judgment and it is a judgment that has been endorsed now by two Full Courts in the last 12 months and so it is good law, in my respectful submission. To the extent you need an authority for the proposition that you should strive to achieve an industrially sensible outcome, that is it.”

[71] The relevant consideration in Hay Point is produced below:

“8 The applicable principles for interpreting an enterprise agreement were recently recounted by a Full Court in WorkPac Pty Ltd v Skene [2018] FCAFC 131 (Tracey, Bromberg and Rangiah JJ) 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: City of Wanneroo vHolmes (1989) 30 IR 362 at 378 (French J). The interpretation “… turns on the language of the particular agreement, understood in the light of its industrial context and purpose …”: AmcorLimited v Construction, Forestry, Mining and Energy Union (2005) 222 CLR 241 at [2] (Gleeson CJ and McHugh J). The words are not to be interpreted in a vacuum divorced from industrial realities (Holmes at 378); 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 (Holmes at 378–9, citing Geo A Bond & Co Ltd (in liq) v McKenzie [1929] AR(NSW) 498 at 503 (Street J)). 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: see Kucks v CSR Limited (1996) 66 IR 182 at 184 (Madgwick J); Shop Distributive and Allied Employees’ Association v Woolworths SA Pty Ltd [2011] FCAFC 67 at [16] (Marshall, Tracey and Flick JJ); Amcor at [96] (Kirby J).

9 The reference there made to the observations of Kirby J at [96] of Amcor is a reference to his Honour’s remarks that the construction to be given to a clause in an industrial instrument “should not be a strict one but one that contributes to a sensible industrial outcome such as should be attributed to the parties who negotiated and executed the Agreement”.

The use of a capital U to refer to a proper noun

[72] During the hearing the following was discussed relevant to whether the term ‘Union’ in clause 10.4, and otherwise throughout the Agreement where it is capitalised should be treated as a proper noun: 33

“THE COMMISSIONER: So do you say that at no point where the word, "union" is used in the agreement and it's capitalised, it can be said to include a stranger to the agreement?

MR TILEY: No, we don't we don't say that, Commissioner. At the conclusion of Mr Rogers's submissions you asked him a question about the capital U, and reference was made to our written submissions in that regard. It's only proper that my client has averted to the capital U, and told you that it may mean something. It's very difficult to determine exactly what it does mean. And can I say, without wishing to resile from the submission, the submission we've made in writing about the capital U, is not our strongest point, Commissioner. Because the majority of the "Union" references are, as Mr Rogers rightly pointed out, ones which include a capital U.

We think because of the way in which this clause came to exist, that as it appears in 10.4 it is used as a proper noun. But we don't say that anytime a capital U is used it's being used as a proper noun. Because as I said earlier, the different clauses and the different language have come from different drafters at different times. We really do urge upon you an approach which is not a one size fits all approach to the two the capital U, "Union", as appears in this agreement. It wouldn't be, in my respectful submission, a sound approach to take. And I don't understand any party to be urging that approach on you, in any event, Commissioner.

THE COMMISSIONER: So if there had been other words in front of the word, "union", in 10.4, it could have been differently?

MR TILEY: I'm about to come to that in my last point, Commissioner, that it's said against us that the reference in 10.1.3 to, "unions party to this agreement", and the reference in 10.3 to, "delegates only of the unions", in 1.4(c), (d) and (e), are examples of the parties turning their mind to occasions on which they wish to limit, if you like, the unions that would have the benefit in that 10.4 is not one of those.

I can't escape, Commissioner, the disparity between the drafting of those three clauses. And conventional wisdom would dictate that that would favour the interpretation of the applicant. Because if the parties had intended 10.4 to only be limited to those unions they would have said so. And perhaps that that might be the conclusion that the Commission reached, if not for the evidence of Ms Cure. But what Ms Cure has told you through her evidence, her unchallenged evidences, is that - in my submission, what she has told you is that the reference to, "union", in 10.4 was under the "unions party to the agreement." That is the effect of her evidence, in my respectful submission. Because, again, the AWU wasn't there and they were a stranger to the entire process.

THE COMMISSIONER: She can't speak though for the unimpressed employee who may not be an NUW member, who sits there and agrees to – or doesn't agree, we don't know how Ms Cross voted, but she sits there and says, well, at some point in time I'm going to bring somebody else in because I don't think my interests are being served.

MR TILEY: Ms Cross could have given that evidence. She hasn't. The only conclusion available on the evidence is that Ms Cross was either not a member of a union, or a member of another union at the time. Put another way, and perhaps being more precise, there is no evidence that would enable you to conclude that she had any such pro AWU attitude or intention at the time. She had every opportunity to bring that evidence and she hasn't. And I'm not trying to be critical. It's simply to point out the state of the evidence before you. So it would be unsound, in my respectful submission, to decide the matter based on that sort of speculation. We might be a different position if there was evidence that had something other than speculation. So, in my respectful submission, the now agreed question for arbitration should be answered in the affirmative. And unless I can assist you further, those are the submissions of the NWU.”

[73] In reply, the AWU stated: 34

“MR DWYER: ………Commissioner. I take it Mr Tiley doesn't push the capital U thing too far. You could say this - I think I heard him say it wasn't their best point. I agree with that. Whilst I appreciate the meaning of a proper noun and the use of a capital letter, my submission is that that invites a technical approach to the language used in this agreement, which is not encouraged by the authorities in respect of this. I think the respondent's submissions taken in paragraph 22 to that authority that talks about not taking a technical or restrictive approach in respect of the language because of the way in which these agreements come about and the people who draft them. And we have heard multiple times now that Ms Cure is not a lawyer. And that might be something to take into account with respect to the use of that language throughout the agreement, or the use of that structure of the word, "union", throughout the agreement.

THE COMMISSIONER: So if 10.4 had not used a capital U, do you think your position would be stronger or weaker?

MR DWYER: I think that would have been very much a secondary argument on our part but it might make it weaker – sorry, stronger, might. But I don't think anything turns on the use of a capital U. In my submission that's an overly technical approach. It says, "union fees deducted", and as we've already established, there's no definition, there's no uniform understanding between the parties. My submission is the undue attention to the use of a capital is applying an extremely strict and technical approach to the language, and that's an approach that shouldn't be taken. That wouldn't have been my first argument if it had been a small U. And it probably wouldn't have even been my third argument. It would've been down the list somewhere. I don't think it's that important, in my submission, either way.”

Consideration

[74] In accordance with the decision in Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union known as the Australian Manufacturing Workers’ Union (AMWU) v Berri Pty Ltd, 35 the relevant principles in relation to the construction of single enterprises are summarised as follows:

“1. The construction of an enterprise agreement, like that of a statute or contract, begins with a consideration of the ordinary meaning of the relevant words. The resolution of a disputed construction of an agreement will turn on the language of the agreement having regard to its context and purpose. Context might appear from:

(i) the text of the agreement viewed as a whole;

(ii) the disputed provision’s place and arrangement in the agreement;

(iii) the legislative context under which the agreement was made and in which it operates.

2. The task of interpreting an agreement does not involve rewriting the agreement to achieve what might be regarded as a fair or just outcome. The task is always one of interpreting the agreement produced by parties.

3. The common intention of the parties is sought to be identified objectively, that is by reference to that which a reasonable person would understand by the language the parties have used to express their agreement, without regard to the subjective intentions or expectations of the parties.

4. The fact that the instrument being construed is an enterprise agreement made pursuant to Part 2-4 of the FW Act is itself an important contextual consideration. It may be inferred that such agreements are intended to establish binding obligations.

5. The FW Act does not speak in terms of the ‘parties’ to enterprise agreements made pursuant to Part 2-4 agreements, rather it refers to the persons and organisations who are ‘covered by’ such agreements. Relevantly s.172(2)(a) provides that an employer may make an enterprise agreement ‘with the employees who are employed at the time the agreement is made and who will be covered by the agreement’. Section 182(1) provides that an agreement is ‘made’ if the employees to be covered by the agreement ‘have been asked to approve the agreement and a majority of those employees who cast a valid vote approve the agreement’. This is so because an enterprise agreement is ‘made’ when a majority of the employees asked to approve the agreement cast a valid vote to approve the agreement.

6. Enterprise agreements are not instruments to which the Acts Interpretation Act 1901 (Cth) applies, however the modes of textual analysis developed in the general law may assist in the interpretation of enterprise agreements. An overly technical approach to interpretation should be avoided and consequently some general principles of statutory construction may have less force in the context of construing an enterprise agreement.

7. In construing an enterprise agreement it is first necessary to determine whether an agreement has a plain meaning or it is ambiguous or susceptible of more than one meaning.

8. Regard may be had to evidence of surrounding circumstances to assist in determining whether an ambiguity exists.

9. If the agreement has a plain meaning, evidence of the surrounding circumstances will not be admitted to contradict the plain language of the agreement.

10. If the language of the agreement is ambiguous or susceptible of more than one meaning then evidence of the surrounding circumstance will be admissible to aide the interpretation of the agreement.

11. The admissibility of evidence of the surrounding circumstances is limited to evidence tending to establish objective background facts which were known to both parties which inform and the subject matter of the agreement. Evidence of such objective facts is to be distinguished from evidence of the subjective intentions of the parties, such as statements and actions of the parties which are reflective of their actual intentions and expectations.

12. Evidence of objective background facts will include:

(i) evidence of prior negotiations to the extent that the negotiations tend to establish objective background facts known to all parties and the subject matter of the agreement;

(ii) notorious facts of which knowledge is to be presumed; and

(iii) evidence of matters in common contemplation and constituting a common assumption.

13. The diversity of interests involved in the negotiation and making of enterprise agreements (see point 4 above) warrants the adoption of a cautious approach to the admission and reliance upon the evidence of prior negotiations and the positions advanced during the negotiation process. Evidence as to what the employees covered by the agreement were told (either during the course of the negotiations or pursuant to s.180(5) of the FW Act) may be of more assistance than evidence of the bargaining positions taken by the employer or a bargaining representative during the negotiation of the agreement.

14. Admissible extrinsic material may be used to aid the interpretation of a provision in an enterprise agreement with a disputed meaning, but it cannot be used to disregard or rewrite 7 the provision in order to give effect to an externally derived conception of what the parties’ intention or purpose was.

15. In the industrial context it has been accepted that, in some circumstances, subsequent conduct may be relevant to the interpretation of an industrial agreement. But such post-agreement conduct must be such as to show that there has been a meeting of minds, a consensus. Post-agreement conduct which amounts to little more than the absence of a complaint or common inadvertence is insufficient to establish a common understanding.”

[75] The parties are in agreement that the terms of clause 10.4 are ambiguous or susceptible of more than one meaning. I am in agreement, and accordingly, evidence of the surrounding circumstance will be admissible to aide the interpretation of the Agreement.

[76] Having regard to principle 1 within Berri, the disputed clause, 10.4 is a new clause within the 2014 Agreement, replicated in the Agreement the subject of this decision. The text of the Agreement viewed as a whole demonstrates that the use of the word ‘union’ or ‘Union’ may mean different things, depending on where the word is placed throughout the Agreement and the surrounding words.

[77] For example, in clause 3.1.6(c) of the Agreement, it is stated relevant to consultation obligations:

“…..The Company shall give prompt consideration to matters raised by Team Members and their Union in relation to any proposed changes…”

[78] It was submitted on behalf of Ms Cross that in that particular circumstance, even when the word is capitalised, it would impose on Smiths an obligation to consult with an affected Smiths employee and their union, regardless of whether the employee’s union is covered by the Agreement or not. In such circumstances, I agree, as the employee would be entitled to bring in their representative at the time to assist with consultation and discussions.

[79] Consideration was made to clause 6.1.2(b) of the Agreement where it includes:

“(b) a complete range of ordinary hours options shall be available for introduction, subject to agreement being reached by the majority of Team Members in the Department/Area concerned and the Union, and shall include but not be limited to: …….”

[80] It was accepted on behalf of Ms Cross, without a full concession being made that the interpretation of such might lend a finding that it includes only those unions covered by the Agreement. That is so because it goes to negotiating terms and conditions in respect of rosters, etc. I understand the submission to mean that a union not party to the Agreement might not always have a right with respect to some terms of the Agreement that a union party to the Agreement might.

[81] In my view, there is a danger to making a finding with respect to clause 10.4 and then concluding that because of the use of the word ‘Union’ or ‘union’, it must mean certain things throughout the remainder of the Agreement. It does, however, warrant a leaning towards a cautious approach. It would not be helpful if a party drew a conclusion that where the word union is capitalised, it must always mean only a union party to the Agreement; or because the phrase ‘Unions covered by this Agreement’ is not used, it is a term available to any union.

[82] A clearly objective background fact is the NUW bargained to secure clause 10.4 for the benefit of Smiths employees. While the practice of payroll deductions for NUW members had been in place for some time, formalising such an arrangement within the 2014 Agreement would make it an enforceable obligation, not only for NUW members, but for TWU and CEPU members.

[83] In the act of bargaining, the NUW sought to achieve a particular outcome for its members, with the effect that its success could equally apply to Smiths employees who are members of the TWU or the CEPU. Its industrial claim during the bargaining was met when the Agreement was made; that is, when it was voted on by employees.

[84] Principle 3 within Berri discusses how the objectively-viewed, common intention of the parties can be identified, to which a reasonable person would understand the language the parties have used to express their agreement.

[85] I have had regard to the recent Full Court of the Federal Court Hay Point decision referred to by the NUW, and am mindful that it refers to earlier authorities finding that interpretation of agreements should be understood with regard to ‘industrial context and purpose’. It is not that far removed from principle 1 within Berri which discusses ‘context and purpose’. Principle 2 in Berri cautions against seeking to rewrite an agreement to achieve what may be regarded as a fair or just outcome.

[86] In order for the Commission to find, as Smiths and the NUW seek, that the proper construction of clause 10.4 of the Agreement is a reference to only those unions covered by the Agreement, it could be argued that the Commission would necessarily need to read into the clause the following:

“The Company will provide employees with the ability to have Union fees [of the unions/Unions covered by the Agreement] deducted from the payroll system”.

[87] I have had regard to the new clauses introduced in the 2014 Agreement per the NUW log of claims. The successful bargaining campaign led to the introduction of clause 10.3, Union Delegate Training, and 10.4 Payroll Deductions. It is noted that all references within these two new subclauses provide for a capitalised ‘Union’.

[88] Clause 10.3 introduced paid leave for ‘Union Delegates’, providing for a pool of 36 days leave per annum to NUW members, a pool of four days per annum to TWU members, and a pool of eight days per annum to CEPU members. The first sentence of clause 10.3 does not specify that paid leave is for union delegates who are members of only the unions party to the Agreement. If read on its own, the first sentence could ready that simply, paid leave will be provided to union delegates of any union. Only the following sentences provide a limit on the amount of paid leave Smiths will allow.

[89] In clause 10.3, when the following subclauses have work to do, they help explain that ‘Union delegate’ training is provided and caps are set for the three unions party to the Agreement.

[90] In light of how clause 10.3 came into existence, in my view it follows that clause 10.4 has similar work to do in Smiths providing to employees the ability to have union fees of those unions party to the Agreement deducted from the payroll system.
[91] As stated earlier, I do not consider it necessary or appropriate to investigate every use of the term ‘union’ within the Agreement to understand some contextual reasoning as to when or if ‘union’ or ‘Union’ could be read narrowly to include only those unions party to the Agreement, or more broadly, any union.

[92] I consider the greatest contextual assistance to aide the interpretation of clause 10.4 is clause 10.3, which does not use the expression, ‘unions covered by the Agreement’, or ‘unions party to the Agreement’.

[93] I consider the purpose of clause 10.4 to align with the bargain agreed between Smiths and the bargaining representatives; Smiths agreed to allow deductions of union fees for members of the NUW, TWU and CEPU.

[94] I have had regard to the evidence of the communication to employees at the time of proposing the new clause being, “New clause providing Team members with the ability to have union deductions from the payroll system.” It is uncontested that the AWU was not a bargaining agent, and it appears that there were not any AWU members at the time the Agreement was made.

[95] Ms Cross did not give evidence to explain what she understood the relevant clause to mean; in any event, it would be a subjective consideration which is cautioned against in Berri.

[96] The Commission is urged by Ms Cross to find that the clause is for the benefit of employees, and not necessarily for the AWU. I accept that it is beneficial for a member of a union to have their fees deducted by their employer and remitted to their union. I also accept that there is benefit to a relevant union to have payroll deductions remitted to it.

[97] In agreement interpretation, I do not consider it appropriate to elevate the purported rights of one party to the Agreement, a group of employees seeking to have AWU deductions made, greater than the other party, the employer. To do so would be to impose a discretionary view. There is no objective evidence that employees contemplated, when making the Agreement that clause 10.4 might extend to any union other than the NUW, TWU or CEPU.

[98] I have already assisted with a practical observation during the hearing. It is open to Smiths to administratively agree to payroll deductions for the substantial number of AWU members, and to meet its employees’ wishes; however it has elected not to do so. If the Agreement is renegotiated in or around September 2020 when the Agreement expires, I suspect it would be impossible to ‘lock-out’ the AWU from enjoying the benefit of its members’ payroll deductions in a similarly worded clause, and if the AWU becomes a party to a future agreement.

Conclusion

[99] The question for arbitration is:

“Whether the proper construction of clause 10.4 of the Agreement is that the reference to ‘Union’ in clause 10.4 is a reference to only those Unions covered by the Agreement”.

[100] In accordance with my reasons above, I find that the question is answered in the affirmative; the reference to ‘Union’ in clause 10.4 is a reference to only those Unions covered by the Agreement.

[101] The dispute as notified is resolved in accordance with this decision.

COMMISSIONER

Appearances:

For the Applicant:

Ms J Cross, Applicant;

Mr J.C. Dwyer of Counsel, instructed by the AWU.

For the Respondent:

Mr M. Rodgers of Livingstones;

For the National Union of Workers:

Mr L. Tiley of Hall Payne Lawyers appeared on behalf of the NUW.

Hearing details:

Brisbane, 29 March 2019.

Printed by authority of the Commonwealth Government Printer

1 [2017] FWCA 6849.

2 PN70-PN71.

3 PN72-PN75.

4 PN78-PN82.

5 PN119.

6 PN129-PN132.

7 Respondent’s Outline of Submissions, dated 25 January 2019, at [9].

8 Ibid.

9 (1995) 140 IR 388.

10 Ibid at [18]-[19].

11 Ibid at [20].

12 Ibid at [21].

13 PN144-PN145.

14 Respondent’s Outline of Submissions, dated 25 January 2019, at [14].

15 Ibid at [15].

16 Ibid at [20]-[21].

17 PN147-PN167.

18 Ibid at [23].

19 Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union’ known as the Australian Manufacturing Workers Union (AMWU) v Berri Pty Limited[2017] FWCFB 3005 at [41].

20 Ibid at [114].

21 CPB Contractors Pty Limited [2018] FWCA 1187 at [31].

22 Outline of Submissions by the NUW, dated 28 January 2019, at [15].

23 Ibid at [17]; Applicant’s Outline of Submissions at [33].

24 Outline of Submissions by the NUW, dated 28 January 2019, at [24].

25 PN202 -PN203.

26 Outline of Submissions by the NUW, dated 28 January 2019, at Common Intentions of the Parties – [5].

27 Ibid at Common Intentions of the Parties – [6].

28 Ibid at Common Intentions of the Parties – [9].

29 PN210-PN211.

30 Ibid at Common Intentions of the Parties – [12].

31 PN213-PN214.

32 PN214-PN216.

33 PN225-PN232.

34 PN251-PN253.

35 [2017] FWCFB 3005; (2017) 268 IR 285.

Ms Jodie Cross v The Smith's Snackfood Company Ltd T/A the Smith's Snackfood Company

[2019] FWC 3830

3 JUNE 2019

DECISION