Re Energy Safe Victoria

[2020] FWCA 6718

[2020] FWCA 6718

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.217—Enterprise agreement

Energy Safe Victoria
(AG2020/3822)

ENERGY SAFE VICTORIA ENTERPRISE AGREEMENT 2020

State and Territory government administration
DEPUTY PRESIDENT COLMAN	MELBOURNE, 14 DECEMBER 2020

Application to remove ambiguity or uncertainty in an enterprise agreement

[1] Energy Safe Victoria (ESV) has made an application under s 217(1) of the Fair Work Act 2009 (Cth) (Act) to remove an ambiguity or uncertainty in clause 34.3.2 of the Energy Safe Victoria Enterprise Agreement 2020 (2020 Agreement), which was approved by the Commission on 11 December 2020. ESV and the union parties to the Agreement have requested the Commission to determine the application on the papers, and I consider that it is appropriate to do so.

[2] The ambiguity or uncertainty is said to be found in clause 34.3.2 of the Agreement, which concerns salary points for senior management employees. The clause states that the rates of pay ‘are detailed in the table below and are based on a 2% per annum increase with the first increase effective from the first full pay period to commence on or after 15 September 2020’. A table then appears that sets out a lower and upper figure that constitutes the salary range for a particular period. A range is specified in respect of the ‘old pay’, and for the periods commencing from 15 September 2020, 1 July 2021, 1 July 2022 and 1 July 2023. The lower and upper figures for 15 September 2020 are two percent higher than the ‘old’ rates. The figures for 1 July 2021 and 1 July 2022 are two percent higher than those of the preceding years. However the figures for 1 July 2023 are a little over four percent higher than those for 1 July 2022. ESV submits that these figures represent a calculation error, and that, as clause 34.3.2 itself makes clear, they were intended to be set at amounts two percent higher than the figures for the preceding year. However, because the text of the clause says one thing, and the figures in respect of 2023 say another, ESV contends that the clause is ambiguous or uncertain, and that it should be corrected to reflect what was plainly the intention of the parties.

[3] Section 217 of the Act provides that the Commission ‘may vary an enterprise agreement to remove an ambiguity or uncertainty’. The principles that apply to the Commission’s consideration of such applications are well-settled. 1 The Commission must first identify whether there is any ambiguity or uncertainty in the agreement. The presence of ambiguity or uncertainty is a jurisdictional prerequisite to the exercise of the discretion to vary the instrument. The Commission is required to make a positive finding as to whether the relevant provisions of the agreement are ambiguous or uncertain, based on an objective assessment of the meaning of the words in question, construed in context.

[4] If ambiguity or uncertainty is identified, the Commission must then consider whether to exercise its discretion to vary the agreement. An application under s 217 is not concerned with substantive change to an agreement. 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.

[5] In my opinion, clause 34.3.2 of the Agreement contains an uncertainty, because although the text of the provision stipulates that the wages will be increased by two percent per annum, the salary range for 2023 that appears in the table reflects a year-on-year increase of more than two percent. On one view, the salary range appearing in the table is obviously wrong and therefore not ambiguous or uncertain, because the explanation of the annual wage increases is clear and all of the other figures in the table correctly reflect the two percent increase provided for in the text of the clause. However, the clause states that the salaries are ‘based’ on a two percent increase, and it might be contended that this does not preclude some rates being increased by a higher amount.

[6] ESV asks that the Commission vary the salary range for 2023 in the table in clause 34.3.2 to reflect a two percent increase on the previous year’s range, so that it reads ‘$184,850-$223,350’, instead of ‘$188,547- $227,817’. I am persuaded that to vary the Agreement in this way would remove the identified uncertainty and align the terms of clause 34.3.2 with the intended meaning, and that I should exercise my discretion to vary the Agreement in the manner sought by the application, for the following reasons.

[7] First, the explanatory material provided by ESV to employees in accordance with s 180(5) of the Act clearly stated that wage increases would be at the rate of two percent per annum, and that this accorded with the State government’s wages policy. The explanatory material is consistent with a conclusion that clause 34.3.2 was intended to deliver wage increases of two percent per annum, and not more.

[8] Secondly, at a mention hearing on 11 December 2020, two of the unions that were bargaining representatives for the Agreement, the Australian Workers’ Union and the Australian Municipal, Administrative, Clerical and Services Union, indicated that they supported the application. The Association of Professional Engineers, Scientists and Managers, Australia did not wish to participate in the mention but has indicated to ESV that it supports the application. The position of the unions reinforces my conclusion that to vary the clause in the manner proposed by ESV will align the provision with the actual agreement that was struck in the course of bargaining for a new enterprise agreement.

[9] Thirdly, at the mention, Ms Karen Fitzpatrick, general manager of ESV, gave sworn evidence that there are 16 senior management employees whose employment will be covered by the Agreement and that ESV has spoken with each employee about the miscalculation of the wage bands for 2023 in clause 34.3.2 of the Agreement. Ms Fitzpatrick’s evidence was that each of the employees has confirmed his or her understanding that the wage bands for 2023 would be two percent higher than the previous year, and that none of the employees was opposed to ESV’s application to vary the Agreement to remove ambiguity or uncertainty in relation to clause 34.3.2. I accept Ms Fitzpatrick’s evidence. Her evidence allays any concern that the affected employees might have voted to approve the agreement based on an understanding that they would receive the higher salary ranges for 2023 appearing in the table, which would otherwise have been a consideration telling against the exercise of the discretion to vary the Agreement.

Conclusion

[10] I find that the Agreement is uncertain in the respect that I have identified above. I consider that I should exercise my discretion to remove that uncertainty by varying the Agreement as follows:

(a) Delete ‘$188,547-$227,817’ in the last column of the second row in the table in clause 34.3.2; and

(b) Insert ‘$184,850-$223,350’ in the last column of the second row of the table in clause 34.3.2.

[11] The variations will operate from 18 December 2020, which is the day on which the Agreement will commence to operate.

DEPUTY PRESIDENT

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 1   See generally United Voice v MSS Security Pty Ltd[2016] FWCFB 4979 at [19] and Bradnam’s Windows and Doors Pty Ltd [2019] FWCA 979 at [11].