Northern Territory Government
[2023] FWCA 2685
•23 AUGUST 2023
| [2023] FWCA 2685 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.217 - application to vary an agreement to remove an ambiguity or uncertainty
Northern Territory Government
(AG2023/2343)
2021 – 2026 POWER AND WATER ENTERPRISE AGREEMENT
| State and Territory government administration | |
| DEPUTY PRESIDENT SLEVIN | SYDNEY, 23 AUGUST 2023 |
Application for variation of the 2021 – 2026 Power and Water Enterprise Agreement
The Northern Territory Government has made application under s.217 of the Fair Work ACT 2009 (the Act) to vary the 2021 – 2026 Power and Water Enterprise Agreement (the Agreement) to remove an ambiguity or uncertainty. The ambiguity or uncertainty is said to be the inconsistent dates appearing in clause 85.2 of the Agreement.
Clause 85.2 of the Agreement deals with additional recreational leave entitlements. It reads:
85.2 Additional Recreation Leave Entitlements
(a) Employees who had an entitlement to 5 weeks paid recreation leave per year under the 2018-2021 Power and Water Enterprise Agreement, shall be credited with additional recreation leave entitlements, as if they had accrued 6 weeks paid recreation leave per year (i.e. an additional week of paid recreation leave per year), for the period from 16 July 2022, up until the date of commencement of this Agreement.
(b) For the purpose of clause 85.2(a), the additional week of paid recreation leave credits will be applied on the date of commencement of this Agreement, and will be based on an employee’s:
(i) service with the PWC that counts for service for recreation leave purposes for the period from 16 July 2021 up until the date of commencement of this Agreement; and
(ii) the ordinary, or agreed part-time hours, worked during the relevant period of that service.
Note: The provisions of clause 85.2 only apply to employees employed with the PWC on the date of commencement of this Agreement.
The application seeks a variation of clause 82.5(b)(ii) to replace the date 16 July 2021 with 16 July 2022. The applicant contends that for the clause to operate harmoniously the date in 85.2(b)(i) should be the same as the date in clause 85.2(a). It contends that the reference to the year 2021 in clause 85.2(b)(i) arose from a typographical error.
Background
The Agreement was made on 30 May 2023. It was approved on 4 July 2023 and came into operation on 15 July 2023.1 During bargaining the employees were represented by the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia, the Association of Professional Engineers, Scientists and Managers of Australia, the “Automative, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union, and the Community and Public Sector Union. The union bargaining representatives negotiated for the Agreement as a single bargaining unit (SBU).
The typographical error is established by documents exchanged during the bargaining. The SBU made a claim for an additional week’s recreation leave. The applicant acceded to the claim by making an offer that was based on recognising service for the purpose of the additional leave for service from 16 July 2022. Employees were provided with explanatory notes during the access period prior to the ballot being conducted. The explanatory notes referred to the accrual of an additional week’s leave from 16 July 2022. The proposed agreement that was voted upon however contained the date 16 July 2021 in clause 85(2)(b)(i). The error was identified by the parties after the voting process had commenced. It was agreed that the parties would seek a variation of the Agreement at the time of approval.
When the Agreement was approved application was made under s.188(2) to correct the error by removing a minor procedural or technical error. In the approval decision I indicated that I was not satisfied that the amendment could be made as the requirement in s.188(2)(b) was not met and decided against making the variation at that time. The parties indicated that a variation application would be made once the Agreement was approved.
The applicant describes the ambiguity or uncertainty arising from the incorrect date as giving rise to competing interpretations of entitlement in clause 85.2. On one hand it might be said that the date of 16 July 2021 in subparagraph (b)(i) can be ignored as no additional leave entitlement is provided by paragraph (a) for service before 16 July 2022. In other words, the reference to the earlier period has no impact on calculating the additional leave entitlement. A competing interpretation is that the period from 16 July 2021 is relevant for the calculation of future leave entitlements such that an employees’ service in the 2 years prior to the Agreement commencing are included when accruing an entitlement to additional leave. A third scenario is that employees who had relevant service in the period from 16 July 2021 to 15 July 2022, but not in 16 July 2022 to 15 July 2023, are entitled to additional leave to be accessed after 16 July 2023.
The applicant contends that it was never intended to back date the accrual of leave to apply to service for a two year period before the Agreement came into operation. This contention is supported by the documents circulated during bargaining and the explanatory note provided during the access period. It is also accepted by the union bargaining representatives.
Each of the unions consent to the variation.
Consideration
The exercise of the power to vary an agreement under section 217 of the Act involves two steps. First, a determination of whether there is an ambiguity or uncertainty. Second, the exercise of a discretion to vary the agreement to remove the ambiguity or uncertainty. The section was considered by the Full Federal Court in Bianco Walling Pty Ltd v Construction, Forestry, Maritime, Mining and Energy Union [2020] FCAFC 50; 275 FCR 385 (Bianco Walling). At [67] the Full Court said this about the presence of ambiguity:
“However, the identification of the true meaning of a provision is distinct from the question of whether it is ambiguous or uncertain. Ambiguity exists when a provision in an enterprise agreement is capable of more than one meaning. See in this respect the discussion by Gray J of the concept of ambiguity in Printing & Kindred Industries Union v Davies Bros Ltd (1986) 18 IR 444 at 449. The ambiguity may be apparent on the face of the document or may become apparent only when extrinsic evidence is adduced. A provision may be ambiguous even though it is capable of interpretation: Cannon Hill Services Pty Ltd v Australasian Meat Industry Employees Union[2016] FWC 7256 at [8]. This means that it was not necessary for the FWC to interpret the 2016 Agreement in order to reach a conclusion concerning the presence of ambiguity or uncertainty. It also means that the Deputy President was wrong in thinking that he was dealing with “an interpretation case”.”
The Court then observed at [68]:
“There are practical consequences for the FWC’s ascertainment of ambiguity or uncertainty for the purpose of s 217 being different in character from the interpretation of an enterprise agreement. One is that there was no need for the FWC to feel constrained in the matters to which it may have regard by the principles developed for the interpretation of enterprise agreements. Moreover, the FWC is obliged, in performing its functions or in exercising its powers in relation to a matter under the FW Act, to take into account, amongst other things, “equity, good conscience and the merits of the matter” – see s 578 of the FW Act. Furthermore, the FWC is not bound by the rules of evidence and procedure in relation to a matter – see s 591 of the FW Act. Each of those provisions applies to the discharge by the FWC of its functions under s 217(1). The consequence is that, far from being precluded from having regard to evidence of the parties’ common intention and to the history of cl 1.2, the Deputy President was permitted to have regard to them as part of the “equity, good conscience and the merits” of the matter.”
In CFMMEU & ors v Specialist People Pty Ltd[2019] FWCFB 6307 (Specialist People) the Full Bench of this Commission said:
“[42] Once ambiguity or uncertainty has been identified, the Commission must then consider whether to exercise its discretion to vary the agreement. The Commission has discretion to “remove ambiguity or uncertainty”, not to give effect to a new and substantive change to the agreement. Applications that seek the latter must be made under s 210 of the FW Act. A decision of the Commission under s 217 to remove uncertainty or ambiguity should give effect to the substantive agreement that was ambiguously or uncertainly reduced to writing in the terms of the enterprise agreement.”
The observations in Bianco Walling and Specialist People are apposite to the current matter.
I find that there is an ambiguity arising from appearance of the date 16 July 2021 in cl 85.2(b)(i). The ambiguity is apparent by reference to the extrinsic material, being the documents exchanged during the bargaining and the explanatory note provided during the access period. The clause might be read to provide a greater benefit than the parties intended.
Having found that there is ambiguity, as described, I have decided to exercise my discretion to remove the ambiguity. The reason for exercising the discretion is to give effect to the substantive agreement between the bargaining representatives, which was communicated to employees in the explanatory material circulated prior to the ballot. It is clear from the extrinsic material that the date 16 July 2021 was a typographical error and that the benefit to an additional week’s leave was to arise from service from 16 July 2022.
Accordingly, the Agreement is varied so that the date “16 July 2021” in clause 85.2 (b)(i) is replaced by “16 July 2022”. The variation shall operate from 11 July 2023.
An order reflecting this decision is issued separately.
DEPUTY PRESIDENT
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