Oipo Pty Ltd
[2023] FWC 2278
•6 SEPTEMBER 2023
| [2023] FWC 2278 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.185—Enterprise agreement
Oipo Pty Ltd
(AG2022/5602)
| COMMISSIONER P RYAN | SYDNEY, 6 SEPTEMBER 2023 |
Application for approval of the OIPO Enterprise Agreement 2023
Introduction
Oipo Pty Ltd (Applicant) has made an application for approval of an enterprise agreement known as the OIPO Enterprise Agreement 2023 (Proposed Agreement) pursuant to s.185 of the Fair Work Act 2009 (Cth) (FW Act).
The Proposed Agreement is expressed to cover those employees of the Applicant who are operational employees performing work in the mining industry. The classification levels and groups in the Proposed Agreement have the same meaning as the Mining Industry Award 2020 (Mining Award). The Proposed Agreement does not cover employees in managerial positions or administrative or clerical roles.
The Form 16 Application and Form F17 Declaration stated that there were 12 employees covered by the Proposed Agreement, 11 of which appointed themselves as a bargaining representative, while one employee appointed another employee as their bargaining representative.[1]
The Construction, Forestry, Maritime, Mining and Energy Union (CFMMEU) and the Australian Workers’ Union (AWU) (Unions), who were not bargaining representatives for the Proposed Agreement, sought to be heard in the proceedings. The Applicant did not object to the Unions being heard and I was satisfied that the Commission would be assisted and could properly inform itself by permitting the Unions to lead any evidence, cross examine witnesses and make submissions in relation to the issues relevant to the approval process.
After conducting preliminary conferences with the parties on 7 and 21 February 2023, the matter was set down for hearing on 13 April 2023.
I exercised my discretion to grant permission to the Applicant to be represented by a lawyer, as I was satisfied as to the matters set out in s.596(2)(a) of the FW Act. The Applicant was represented by Mr A Pollock. Mr J Patrick represented the CFMMEU and the AWU.
CFMMEU and AWU Objections
In its outline of submissions, the CFMMEU submitted that the Applicant did not take all reasonable steps to ensure that the terms of the Proposed Agreement, and the effect of those terms, were explained to the relevant employees. The CFMMEU also submitted that there was a lack of bargaining between the parties and that the process adopted by the Applicant was not a fair process. The CFMMEU submitted that these matters give rise to other reasonable grounds for believing that the Proposed Agreement has not been genuinely agreed to by the employees.
In its outline of submissions, the AWU submitted that there were several matters that give rise to concerns as to whether the Proposed Agreement was genuinely agreed to by the employees. These included:
· that the Applicant was incorporated on 28 November 2022 and had employed and issued the Notice of Employee Representational Rights (NERR) the next day;
· the bargaining period was exceptionally quick, noting the Access Period opened two weeks after the NERR was issued;
· that a group of 12 employees were selected from various related entities for the sole purpose of making the Proposed Agreement and those selected did not include any members of the CFMMEU or the AWU;
· there was a lack of bargaining with the Applicant adopting a recently approved enterprise agreement as a template; and
· that the Applicant provided misleading and/or incomplete information during bargaining for the Proposed Agreement.
Applications for Orders to Produce Documents
On 1 March 2023, the CFMMEU filed five applications for orders to produce documents directed to the Applicant and four related entities of the Applicant, namely Crushing Services International Pty Ltd, Mineral Resources Limited (MRL), Onslow Iron Pty Ltd and Process Minerals International Pty Ltd.
The application for an order to produce documents directed to the Applicant sought, inter alia, an order that the Applicant produce:
Copies of any and all of the following documents that are in the possession, control or custody of OIPO Pty Ltd:
1.Any contract under which OIPO Pty Ltd provide OIPO Pty Ltd employees to perform work for another entity.
2.employment contracts of any OIPO Pty Ltd employee employed as of 29 November 2022.
3.employment contracts of any OIPO Pty Ltd employee employed as of 14 December 2022.
The applications for orders to produce documents were contested and proceeded to a hearing on 23 March 2023.
On 31 March 2023, I issued a decision[2] in which I stated that in relation to the application directed to the Applicant, I was satisfied that categories 2 and 3 are relevant to whether the members of the voting cohort were employed at the relevant time/s for the purposes of any pre-approval steps and whether the voting cohort fell within the coverage of the Agreement. I ordered[3] the Applicant to produce the following category of documents:
In relation to each employee employed by OIPO Pty Ltd as at 21 December 2022: any document which specifies the employee’s commencement date, classification and position/job title including, but not limited to, letters of offer, employment contracts, position/job descriptions.
In response to the category of documents set out above, the Applicant produced:
· change of conditions letters addressed to each of the employees which were not signed by the employees;
· change of conditions letters signed by two of the employees; and
· Email correspondence exchanged between Jennifer Rohr, Manager People Iron Ore for MRL (the Applicant’s ultimate holding company) and two of the employees attached to which the change of conditions letter.
On 12 April 2023, the CFMMEU made a further application for an order to produce documents. By this application, the CFMMEU sought an order that the Applicant produce:
Any pay slips issued to any of the Named Employees for work performed between 28 November 2022 and 11 April 2023 that specify OIPO Pty Ltd as the name of the employer.
At the commencement of the hearing on 13 April 2023, the parties made submissions in support of, or in opposition to, the further application for an order to produce. In support of the application, the CFMMEU submitted that there is a live question as to whether the employees were in fact employed by the Applicant.
The Applicant opposed the application and submitted that regardless of what is on the payslips, it will not be definitive as to which entity is the employer pursuant to the contract of employment.
After hearing from the parties, and having regard to their respective submissions, I expressed a provisional view that I intended to issue an order requiring the Applicant to produce payslips for employees for the period of 28 November 2022 to 23 December 2023. In response to my provisional view, the Applicant produced payslips for 12 employees over that period.[4]
A further issue emerges: whether the employees were employed by the Applicant?
As a result of the production of documents, a further issue emerged – whether the employees were employed by the Applicant.
If the employees were not employed by the Applicant, then it would follow that the Proposed Agreement was not made in accordance with s.182(1) of the FW Act, and therefore, the element of genuine agreement in s.188(1)(b) could not have been satisfied.
For the reasons that follow, I am not satisfied that the employees were employed by the Applicant at the relevant time.
Relevant Background
The Onslow Iron Project is a new iron ore mining, processing, transport, shiploading and associated infrastructure project that is a joint venture between MRL and other partners. The joint venture is managed through an entity known as Onslow Iron Pty Ltd.[5] Mr Michael Tonkin, the general manager of MRL and Onslow Iron Pty Ltd, stated in his evidence that Onslow Iron Pty Ltd is essentially the owning entity for the project and OIPO refers to Onslow Iron Project Operations.[6]
The Onslow Iron Project site is located approximately 150km east of Onslow and is completely underdeveloped and once operational is expected to export up to 35 million tonnes of iron ore each year.[7]
In order to prepare for the mine development works, a project known as the Onslow Iron Readiness Project was implemented. This involved identifying and forming a small team of existing employees in similar key mine development roles who would actively participate in the operational readiness program and provide high-quality technical contributions.[8]
A group of 12 employees comprising dump truck drivers, loader operator, heavy duty mechanical fitter, service person, plant fitter, storeperson, shotfirer and excavator operator were identified and ‘released’ to assist with the operational readiness program.[9]
The group of 12 employees came from a number of different existing entities that are controlled by MRL and which are covered by different industrial instruments including:
· The Mining Award;
· MRL Lithium Mining Operations Enterprise Agreement 2016;
· Crushing Services International Pty Ltd Iron Ore Operations Employee Collective Agreement 2014; and
· Mineral Services Pty Ltd Enterprise Agreement 2014.[10]
The group of 12 employees were selected on the basis of their skills and experience, commitment to safety (including their safety record), and whether the resourcing requirements of their current roles would allow them to be ‘released’ to the operational readiness project.[11]
On 28 November 2022, the Applicant was registered as a proprietary company limited by shares. The Applicant’s ultimate holding company is Mineral Resources Limited.[12] On the same day, the group of 12 employees were ‘released’ from their existing site-based roles and commenced the operational readiness project work.
Upon commencement of the operational readiness project, Mr Tonkin and Ms Rohr made a presentation to the employees. Annexed to Mr Tonkins statement is a copy of the presentation which is titled, “Onslow Iron Operational Readiness Project.”
Within the presentation is a slide titled, “Example Itinerary - Day 1” which states as follows:[13]
Time Activity 8.45 – 9AM Meet at Concierge and enter building 9 – 10.30am Introduction to Onslow Iron 10.30am – 11am Employment Transfer to Onslow Iron 11am – 12pm Office tour and workstation setup 12 to 1pm Lunch 1 – 4pm Individual Day in a Life of X Role
Ms Rohr states that she attended the operational readiness project work on 28 November 2022 and that there were 10 of the 12 employees in attendance. Ms Rohr stated the purpose of her attendance at the meeting was to explain the new entity, Oipo Pty Ltd, and that they were being offered a transfer to the new entity.[14]
Ms Rohr stated that she took change of conditions letters to the meeting, handed them out to the employees, and observed the following employees sign the change of conditions letter:
(i)Mark Herrera;
(ii)Mathew Stewart;
(iii)David Miller;
(iv)Sarah Marcon;
(v)Ross Alderson;
(vi)Paul Scoote;
(vii)Brett Gay;
(viii)Robert Hall;
(ix)Kelly Green; and
(x)Marco Gemignani.[15]
Ms Rohr states that after the employees signed the change of conditions letter, she collected them and handed them to her colleague, Mr Denis Jusupovic and at approximately 1:17pm, she advised Damien King, Manager Employee Relations at MRL, that all contracts had been signed.[16]
The change of conditions letters were issued on MRL Letterhead and were in identical form as follows:[17]
28 November 2022
[Name]
C/- Onslow Iron Pty Ltd
Dear [Name],
RE: CHANGE OF EMPLOYMENT CONDITIONS
On behalf of Onslow Iron Pty Ltd, I would like to advise you of changes to your conditions of employment. Your new terms and conditions of employment are outlined below.
Effective Date: Monday, 28 November 2022
Project Onslow Iron Operational Readiness
Position Title: [Position]
Reporting To: General Manager, Onslow Iron
Employing Entity: OIPO
Location: Head Office
Roster:Five (5) days on, two (2) days off followed by four (4) days on, three (3) days off
All other terms and conditions of your employment contract will remain the same.
Please sign where indicated below to confirm your acceptance of these changes. If you fail to respond within five (5) days of receipt of this letter, we will have deemed you to have accepted the conditions by continuing in the role.
If you have any questions regarding this letter, please contact the HR Department on (08) 9329 3600.
Yours sincerely,
Michael Tonkin
General Manager, Onslow Iron
Accepted by [Name]: Signature Date
Although Ms Rohr states that she observed each of the 10 employees sign the change of conditions letters, the Respondent was only able to produce signed letters in relation to Mr Gemignani and Mr Stewart.[18] Mr King stated that despite extensive physical and electronic searches for the original and/or scanned copies of the other 8 signed change of conditions letters, they have been misplaced and cannot be located.[19]
Ms Rohr stated that in relation to the two employees[20] that were not present at the operational readiness project meeting on 28 November 2022, she sent the change of conditions letter to them by email. The covering email stated:[21]
Hi [Name],
Please find attached the change of conditions letter for your employment terms for the length of the Onslow Iron Operational Readiness project.
Your employing entity will change and you will be working a 5/2 4/3 roster 8 hours per day. Your salary will not be affected.
Can you please either sign the attached document or respond with the following words.
I accept the change in my terms and conditions in the attached COC dated 28 November 2022.
Can you please return it today if possible.
We will give you a call tomorrow to discuss next steps and will also forward you some additional documentation.
We look forward to welcoming you to the team next week. Thanks
Jennifer Rohr
Manager People Iron Ore
Both of these employees replied stating that they accept the change in their terms and conditions.[22]
On 29 November 2022, Mr King issued the NERR to the 12 employees.[23] The first bargaining meeting took place on 30 November 2022. Subsequent bargaining meetings took place on 8 December, 12 December, and 13 December.[24]
On 14 December 2022, the Applicant sent correspondence to each of the 12 employees advising that the access period will commence on 15 December and provided details of the time, place and method of voting. The correspondence also included a copy of the Proposed Agreement, an explanatory materials and reference materials.[25]
Throughout the access period, information sessions were conducted with the employees.[26]
The voting period opened at 6:00am on 22 December 2022 and closed at 6:00pm on 22 December 2022. The Form F17 Declaration states that at the time of the vote, 12 employees were covered by the Proposed Agreement, 12 employees cast a valid vote, and 12 employees voted to approve the Proposed Agreement.[27]
As set out above, the Applicant produced payslips for the period of 28 November 2022 to 23 December 2023. The payslips do not specify the employer’s name. Rather, each payslip is set out on the letterhead of a particular entity and states at the top of the page the words “Pay Advice”. Immediately below that, the name of the entity and the Australian Business Number of the entity is identified. For example,
An analysis of the payslips produced by the Applicant identifying the name of the employee, the pay period, and the payslip entity is set out below:[28]
| Payslip Entity | |||
| Employee | 19/11/2022 - 2/12/2022 | 3/12/22 - 9/12/2022 | 10/12/2022 - 23/12/2022 |
| Brett Gay | MRL Asset Management Pty Ltd | Polaris Metals Pty Ltd | Polaris Metals Pty Ltd |
| David Miller | MRL Asset Management Pty Ltd | Polaris Metals Pty Ltd | Polaris Metals Pty Ltd |
| Jacob Van Den Brink | MRL Asset Management Pty Ltd | Polaris Metals Pty Ltd | Polaris Metals Pty Ltd |
| Joshua Bouquet | Process Minerals International Pty Ltd | Polaris Metals Pty Ltd | Polaris Metals Pty Ltd |
| Mathew Stewart | MRL Asset Management Pty Ltd | Polaris Metals Pty Ltd | Polaris Metals Pty Ltd |
| Robert Hall | MRL Asset Management Pty Ltd | Polaris Metals Pty Ltd | Polaris Metals Pty Ltd |
| Employee | 26/11/2022 - 9/12/2022 | 10/12/22 - 23/12/2022 | |
| Kelly Green | Polaris Metals Pty Ltd | Polaris Metals Pty Ltd | |
| Mark Herrera | Polaris Metals Pty Ltd | Polaris Metals Pty Ltd | |
| Paul Scoote | Polaris Metals Pty Ltd | Polaris Metals Pty Ltd | |
| Ross Alderson | Polaris Metals Pty Ltd | Polaris Metals Pty Ltd | |
| Sarah Marcon | Polaris Metals Pty Ltd | Polaris Metals Pty Ltd | |
| Employee | 19/11/2022 - 25/11/2022 | 26/11/2022 - 2/12/2022 | 3/12/2022 - 9/12/2022 |
| Marco Gemignani | Crushing Services International Pty Ltd | Crushing Services International Pty Ltd | Polaris Metals Pty Ltd |
The Applicant tendered a witness statement of Nicole Gunson, Superintendent People Systems at MRL.[29] Ms Gunson stated that MRL currently operates nine different software systems to support HR and Payroll needs across the MRL group of companies. Ms Gunson stated that it can take up to six months to set up the payroll configuration for a new entity.[30]
Mr King stated that when informed of the delay in configuring the payroll system for the Applicant, he decided to utilise Polaris Metals Pty Ltd, an entity within the MRL group of companies, as a ‘paymaster’ until the payroll configuration for the Applicant could be established.[31]
Relevant Legislative Provisions
The Fair Work Legislation Amendment (Secure Jobs, Better Pay) Act 2022 (Cth) (Amending Act) made a number of changes to enterprise agreement approval processes in Part 2-4 of the FW Act, which commenced operation on 6 June 2023.
Under transitional arrangements, amendments made by Part 14 of Schedule 1 to the Amending Act in relation to the genuine agreement requirements for agreement approval applications apply where the notification time for the agreement was on or after 6 June 2023.
The notification time for the Proposed Agreement was 29 November 2022.[32] Accordingly, the provisions in Part 2-4 of the FW Act, as it was before 6 June 2023, continue to apply in relation to my consideration of this matter. I set out the relevant legislative provisions of Part 2-4 of the FW Act below.
Section 181 of the FW Act provides as follows:
181 Employers may request employees to approve a proposed enterprise agreement
(1)An employer that will be covered by a proposed enterprise agreement may request the employees employed at the time who will be covered by the agreement to approve the agreement by voting for it.
(2)The request must not be made until at least 21 days after the day on which the last notice under subsection 173(1) (which deals with giving notice of employee representational rights) in relation to the agreement is given.
(3)Without limiting subsection (1), the employer may request that the employees vote by ballot or by an electronic method.
Section 182(1) of the FW Act provides as follows:
182 When an enterprise agreement is made
Single‑enterprise agreement that is not a greenfields agreement
(1)If the employees of the employer, or each employer, that will be covered by a proposed single‑enterprise agreement that is not a greenfields agreement have been asked to approve the agreement under subsection 181(1), the agreement is made when a majority of those employees who cast a valid vote approve the agreement.
Section 186 of the FW Act provides as follows:
186 When the FWC must approve an enterprise agreement—general requirements
Basic rule
(1)If an application for the approval of an enterprise agreement is made under subsection 182(4) or section 185, the FWC must approve the agreement under this section if the requirements set out in this section and section 187 are met.
Note: The FWC may approve an enterprise agreement under this section with undertakings (see section 190).
Requirements relating to the safety net etc.
(2)The FWC must be satisfied that:
(a) if the agreement is not a greenfields agreement—the agreement has been genuinely agreed to by the employees covered by the agreement; and
(b) if the agreement is a multi‑enterprise agreement:
(i)the agreement has been genuinely agreed to by each employer covered by the agreement; and
(ii)no person coerced, or threatened to coerce, any of the employers to make the agreement; and
(c) the terms of the agreement do not contravene section 55 (which deals with the interaction between the National Employment Standards and enterprise agreements etc.); and
(d) the agreement passes the better off overall test.
Note 1: For when an enterprise agreement has been genuinely agreed to by employees, see section 188.
Note 2: The FWC may approve an enterprise agreement that does not pass the better off overall test if approval would not be contrary to the public interest (see section 189).
Note 3: The terms of an enterprise agreement may supplement the National Employment Standards (see paragraph 55(4)(b)).
Requirement that the group of employees covered by the agreement is fairly chosen
(2)The FWC must be satisfied that the group of employees covered by the agreement was fairly chosen.
(3A) If the agreement does not cover all of the employees of the employer or employers covered by the agreement, the FWC must, in deciding whether the group of employees covered was fairly chosen, take into account whether the group is geographically, operationally or organisationally distinct.
Requirement that there be no unlawful terms
(3)The FWC must be satisfied that the agreement does not include any unlawful terms (see Subdivision D of this Division).
Requirement that there be no designated outworker terms
(4A) The FWC must be satisfied that the agreement does not include any designated outworker terms.
Requirement for a nominal expiry date etc.
(4)The FWC must be satisfied that:
(a) the agreement specifies a date as its nominal expiry date; and
(b) the date will not be more than 4 years after the day on which the FWC approves the agreement.
Requirement for a term about settling disputes
(5)The FWC must be satisfied that the agreement includes a term:
(a) that provides a procedure that requires or allows the FWC, or another person who is independent of the employers, employees or employee organisations covered by the agreement, to settle disputes:
(i)about any matters arising under the agreement; and
(ii)in relation to the National Employment Standards; and
(b) that allows for the representation of employees covered by the agreement for the purposes of that procedure.
Note 1: The FWC or a person must not settle a dispute about whether an employer had reasonable business grounds under subsection 65(5) or 76(4) (see subsections 739(2) and 740(2)).
Note 2: However, this does not prevent the FWC from dealing with a dispute relating to a term of an enterprise agreement that has the same (or substantially the same) effect as subsection 65(5) or 76(4).
Section 188 of the FW Act provides as follows:
188 When employees have genuinely agreed to an enterprise agreement
(1)An enterprise agreement has been genuinely agreed to by the employees covered by the agreement if the FWC is satisfied that:
(a) the employer, or each of the employers, covered by the agreement complied with the following provisions in relation to the agreement:
(i)subsections 180(2), (3) and (5) (which deal with pre‑approval steps);
(ii)subsection 181(2) (which requires that employees not be requested to approve an enterprise agreement until 21 days after the last notice of employee representational rights is given); and
(b) the agreement was made in accordance with whichever of subsection 182(1) or (2) applies (those subsections deal with the making of different kinds of enterprise agreements by employee vote); and
(c) there are no other reasonable grounds for believing that the agreement has not been genuinely agreed to by the employees.
(2)An enterprise agreement has also been genuinely agreed to by the employees covered by the agreement if the FWC is satisfied that:
(a) the agreement would have been genuinely agreed to within the meaning of subsection (1) but for minor procedural or technical errors made in relation to the requirements mentioned in paragraph (1)(a) or (b), or the requirements of sections 173 and 174 relating to a notice of employee representational rights; and
(b) the employees covered by the agreement were not likely to have been disadvantaged by the errors, in relation to the requirements mentioned in paragraph (1)(a) or (b) or the requirements of sections 173 and 174.
Summary of the Unions’ Submissions
The Unions submitted that at no stage did the Proposed Agreement relevantly apply to the employees because the employees were employed by Onslow Iron Pty Ltd.
The Unions accepted that the employment of the 12 employees transferred but submitted that as a result of that transfer they became employees of Onslow Iron Pty Ltd and not the Applicant.
The Unions submitted that the characterisation of the employment must have regard to the contractual terms. In this respect, the Unions submitted that on an objective construction of the change of conditions letters, the employees were not engaged by OIPO Pty Ltd. Rather, the Unions submitted that on an objective construction of the change of conditions letters, Onslow Iron Pty Ltd is the employing entity.
The Unions cited the decision in Workpac v Rossato[33] and submitted that the principles espoused by the High Court support a construction that Onslow Iron Pty Ltd is the relevant employer.
The Unions submitted that it simply cannot be the case that the change of conditions letters can be fairly construed as offering employment for the Applicant when they do not actually state the full and correct name of the purported employing entity.
Summary of the Applicant’s submissions
The Applicant submitted that the Commission must be satisfied that the Proposed Agreement has been genuinely agreed to and that relevantly includes being satisfied that it was made in accordance with s.182(1), which leads to s.188(1)(b).
The Applicant submitted that direct evidence from Ms Rohr that she distributed contracts to each of the employees by hand or by email and that each of the employees confirmed their acceptance of those contracts.
The Applicant submitted that Mr King and Ms Gunson provide evidence explaining why a different entity is administering the payroll and that there is nothing unusual about an entity, separate from the employing entity, administering the payroll function.
In terms of the contracts, the Applicant agreed with the Unions that an objective construction is to be adopted and that the appropriate test is what a reasonable person in the position of the parties, and with the understanding of the relevant background facts, would understand the document to mean.
The Applicant submitted that there is a clear distinction between Onslow Iron Pty Ltd and the Applicant in the contracts of employment and Mr Tonkin confirmed in his evidence the different roles those entities play.
The Applicant submitted that on the plain words of the contract and construing that based on what the parties would understand “OIPO” to mean, that is relevantly an entity that is capable of employing and that it is to be distinguished from the references to Onslow Iron Pty Ltd elsewhere in the document. The Applicant further submitted that the reference to OIPO must have some work to do.
The Applicant submitted that the Unions did not specifically put to any witness that the Applicant was not the employing entity but that Onslow Iron Pty Ltd was. However, the Applicant accepted that the Commission must nonetheless be satisfied that the employees were employed by the Applicant at the relevant time.
The Applicant submitted that a reasonable person, armed with the background knowledge of the parties, would draw the distinction between Onslow Iron Pty Ltd and OIPO in change of conditions letter.
Consideration
As set out above, the issue upon which I have determined this matter is whether the employees were employed by the Applicant at the relevant time.
Having regard to the evidence and materials before me, I am not satisfied that the employees were employed by the Applicant. It follows that the Proposed Agreement was not made in accordance with s.182(1) of the FW Act and therefore, the element of genuine agreement in s.188(1)(b) of the FW was not satisfied. My reasons are as follows.
Both the Applicant and the Unions submitted that the change in conditions letters must be construed objectively, having regard to what a reasonable person in the position of the parties would understand the document to mean.
In Codelfa Construction Proprietary Limited v State Rail Authority of New South Wales[34], Mason J, as he then was, and with whom Stephen, Aickin and Wilson JJ agreed, stated:
The true rule is that evidence of surrounding circumstances is admissible to assist in the interpretation of the contract if the language is ambiguous or susceptible of more than one meaning. But it is not admissible to contradict the language of the contract when it has a plain meaning. Generally speaking facts existing when the contract was made will not be receivable as part of the surrounding circumstances as an aid to construction, unless they were known to both parties, although, as we have seen, if the facts are notorious knowledge of them will be presumed.
It is here that a difficulty arises with respect to the evidence of prior negotiations. Obviously the prior negotiations will tend to establish objective background facts which were known to both parties and the subject matter of the contract. To the extent to which they have this tendency they are admissible. But in so far as they consist of statements and actions of the parties which are reflective of their actual intentions and expectations they are not receivable. The point is that such statements and actions reveal the terms of the contract which the parties intended or hoped to make. They are superseded by, and merged in, the contract itself. The object of the parol evidence rule is to exclude them, the prior oral agreement of the parties being inadmissible in aid of construction, though admissible in an action for rectification.
Consequently when the issue is which of two or more possible meanings is to be given to a contractual provision we look, not to the actual intentions, aspirations or expectations of the parties before or at the time of the contract , except in so far as they are expressed in the contract , but to the objective framework of facts within which the contract came into existence, and to the parties’ presumed intention in this setting. We do not take into account the actual intentions of the parties and for the very good reason that an investigation of those matters would not only be time consuming but it would also be unrewarding as it would tend to give too much weight to these factors at the expense of the actual language of the written contract.
In Toll (FGCT) Pty Limited v Alphapharm Pty Limited and Others,[35] in considering the construction of commercial documents, the High Court stated:
“It is not the subjective beliefs or understandings of the parties about their rights and liabilities that govern their contractual relations. What matters is what each party by words and conduct would have led a reasonable person in the position of the other party to believe … That, normally, requires consideration not only of the text, but also of the surrounding circumstances known to the parties, and the purpose and object of the transaction.”
In Franklins Pty Ltd v Metcash Trading Ltd,[36] the New South Wales Court of Appeal held, after analysing the authorities, that ambiguity is not a necessary precondition to construing contractual provisions in light of the surrounding circumstances.
The change of conditions letters refer to the employing entity simply as “OIPO”. That phrase not defined in the document, and insofar as it is said to mean “OIPO Pty Ltd” it is incomplete and vague. Accordingly, I consider it relevant to take into consideration the surrounding circumstances, including the words and conduct of the Applicant.
Relevantly, the change of conditions letter is addressed to each employee as “C/- Onslow Iron Pty Ltd” and the change of conditions is made on behalf of “Onslow Iron Pty Ltd.” The letter states the project is the “Onslow Iron Operational Readiness” project and the employees report to Mr Tonkin the general manager of Onslow Iron.
While Ms Rohr stated that she explained the new entity “OIPO Pty Ltd” and that the 12 employees were being offered a transfer to the “new entity”, beyond that broad description the precise wording and explanation given by Ms Rohr is not in evidence. In this context it is relevant to observe that Onslow Iron Pty Ltd is a relatively ‘new’ entity, taking on that name from 30 June 2022. Furthermore, and perhaps most significantly, Ms Rohr’s evidence is inconsistent with the slide presentation for day 1 of the Onslow Iron Operational Readiness Project which provided for a specific 30-minute session titled “Employment Transfer to Onslow Iron”.
In relation to the payslips, I accept the Applicant’s submission that a different entity (related or unrelated) can administer payroll for an employer. However, the fact that an employer may engage a third-party entity to administer its payroll does not absolve the employer from complying with Regulation 3.46 of the Fair Work Regulations 2009 which provides that a payslip must specify the employer’s name.
While the payslips include the name and an Australian Business Number for a corporate entity at the top of the page, they do not specify the name of the employer.
The change of conditions letter and payslips in this matter stand in stark contrast to the material before the Full Bench in United Workers’ Union v Hot Wok Food Makers Pty Ltd,[37] which was abundantly clear as to the employing entity.
The Applicant submits that I should accept that the Applicant is the employing entity based on an incomplete and undefined reference in the change of conditions letter, while ignoring the balance of the documentary evidence which points strongly, if not emphatically to the employer being Onslow Iron Pty Ltd. I do not accept that.
In my view, and having regard to all the circumstances, a reasonable person would not understand the employing entity to be OIPO Pty Ltd. Furthermore, and for the same reasons as set out by Deputy President Colman in Resource Services Group E&I Pty Ltd[38], I do not consider this is minor procedural or technical error that can be waived under s.188(2).
Conclusion
The application for approval of the OIPO Enterprise Agreement 2023 is dismissed. An order to the effect will be issued with this decision.
COMMISSIONER
Appearances:
A Pollock of counsel for Oipo Pty Ltd.
J Patrick for the Construction, Forestry, Maritime, Mining and Energy Union.
Hearing details:
2023.
Sydney:
13 and 27 April 2023.
[1] See Form F16 Application; Exhibit 3, Annexure DK1.
[2] OIPO Pty Ltd [2023] FWC 773.
[3] PR760752.
[4] Exhibits 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20 and 21.
[5] Exhibit 22 at [3].
[6] Transcript 27 April 2023 at PN235-PN250.
[7] Ibid at [3] and [21].
[8] Ibid at [25]-[26]
[9] Ibid at [27].
[10] Ibid at [28].
[11] Ibid at [33].
[12] Exhibit 23.
[13] Exhibit 22, Annexure MT2.
[14] Exhibit 6 at [6].
[15] Ibid at [7]-[9].
[16] Ibid at [8], [11].
[17] Exhibit 5 (Hearing Book at p.200-213).
[18] Exhibit 5 (Hearing Book at p.200-201).
[19] Exhibit 4 at [4]-[11].
[20] Joshua Bouquet and Jason Van Den Brink.
[21] Exhibit 5 (Hearing Book at p.214-216); Exhibit 6 at [12].
[22] Ibid.
[23] Exhibit 3 at [7]; Form F17 Declaration, Annexures A, B and C.
[24] Exhibit 3 at [9]-[18].
[25] Exhibit 3 at [19]-[20]; Form F17 Declaration, Annexure D.
[26] Exhibit 3 at [21]-[24]; Form F17 Declaration at q.22-24.
[27] Exhibit 3 at [29]; Form F17 Declaration, Annexure E.
[28] Exhibits 9, 10, 11, 12, 13, 14, 15, 16, 17, 18, 19, 20 and 21.
[29] Exhibit 7.
[30] Ibid.
[31] Exhibit 8.
[32] Form F17 at q.17.
[33] [2021] HCA 23.
[34] [1982] HCA 24 at [22]-[24].
[35] [2004] HCA 52 at [40].
[36] [2009] NSWCA 407.
[37] [2023] FWCFB 4 at [21]-[23].
[38] [2023] FWC 2066.
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