Ridley AgriProducts Pty Ltd T/A Ridley AgriProducts Pty Ltd
[2022] FWCA 3421
•12 OCTOBER 2022
| [2022] FWCA 3421 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.185 and s.217—Enterprise agreement
Ridley AgriProducts Pty Ltd T/A Ridley AgriProducts Pty Ltd
(AG2022/3734 and AG2022/4100)
Ridley AgriProducts Pty Ltd & United Workers Union - Pakenham – Enterprise Agreement 2022
| Food, beverages and tobacco manufacturing industry | |
| COMMISSIONER LEE | MELBOURNE, 12 OCTOBER 2022 |
Application for the approval of the Ridley AgriProducts Pty Ltd & United Workers Union - Pakenham – Enterprise Agreement 2022 – application for the variation of the Ridley AgriProducts Pty Ltd & United Workers Union - Pakenham – Enterprise Agreement 2022.
Introduction
An application has been made for approval of an enterprise agreement known as the Ridley AgriProducts Pty Ltd & United Workers Union - Pakenham – Enterprise Agreement 2022 (the Agreement). The application was made pursuant to s.185 of the Fair Work Act 2009 (the Act). It has been made by Ridley AgriProducts Pty Ltd T/A Ridley AgriProducts Pty Ltd (Ridley or the Applicant). The Agreement is a single enterprise agreement.
Alongside the application made pursuant to s.185, on 29 September 2022, the Applicant also applied under s.217 of the Act to vary the Agreement to remove an ambiguity or uncertainty. On 29 September 2022, my Chambers sent the following email to the Applicant and bargaining representatives, including the United Workers’ Union:
“We write in relation to the above matters and confirm receipt of the s.217 application below. The Commissioner has considered both the s.185 (AG2022/3734) and s.217 (AG2022/4100) application.
It is the Commissioner’s provisional view, pending any views, that:
· it is appropriate to grant the application to approve the Agreement pursuant to s.185; and
· it is appropriate to grant the application to vary the Agreement pursuant to s.217 in the terms sought.
Should any party wish to be heard in relation to the s.185 and/or s.217 application they should advise Chambers by no later than 5:00pm on Friday, 30 September 2022.
In the absence of any response from any parties, the applications will be determined based on the material before the Commission.”
I did not receive any views in response to the above correspondence. I consider it appropriate to deal with both applications concurrently in this decision. It is to the s.217 application that I turn first.
s.217 – Variation of an enterprise agreement to remove an ambiguity or uncertainty
The s.217 application proposes a variation to clause 3 of the Agreement which presently reads as follows:
“COMMENCEMENT DATE OF AGREEMENT AND PERIOD OF OPERATION
This Agreement shall commence operation seven days after the date of approval by the Fair Work Commission and shall nominally expire on 22 August 2024.”
It is the Applicant’s position that clause 3 should instead read as follows:
“COMMENCEMENT DATE OF AGREEMENT AND PERIOD OF OPERATION
This Agreement shall commence operation seven days after the date of approval by the Fair Work Commission and shall nominally expire on 22 August 2025.”
Legislation
Section 217 of the Act states as follows:
“217 Variation of an enterprise agreement to remove an ambiguity or uncertainty
(1) The FWC may vary an enterprise agreement to remove an ambiguity or uncertainty on application by any of the following:
(a) one or more of the employers covered by the agreement;
(b) an employee covered by the agreement;
(c) an employee organisation covered by the agreement.
(2) If the FWC varies the enterprise agreement, the variation operates from the day specified in the decision to vary the agreement.”
There are a number of conditions precedent necessary for the exercise of discretion under s 217. An application must have been made by one of the parties set out in ss.217(1)(a)-(c). The application has been made by Ridley, the employer that is covered by the Agreement, thus satisfying that requirement. There must also be an enterprise agreement that is the subject of the application. In the present case the Agreement has not yet been approved, however that is not a barrier to the operation of s.217 for the following reasons.
An enterprise agreement is defined at s 12 of the Act to mean:
(a) A single-enterprise agreement; or
(b) a multi-enterprise agreement.
A single-enterprise agreement is defined in s.12 of the Act to mean “an enterprise agreement made as referred to in sub-section 172(2)”. Section 172(2) of the Act relevantly states that:
“An employer, or 2 or more employers that are single interest employers, may make an enterprise agreement (a single enterprise agreement):
(a) with the employees who are employed at the time the agreement is made and who will be covered by the agreement: or
…”
An enterprise agreement is made pursuant to s.182(1) of the Act in the following circumstances:
“(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.”
Is there an enterprise agreement as required under s.217(1)?
A question that the s.217 application raises is whether the Agreement can be varied in the manner sought by the Applicant as part of my consideration of approval of the Agreement. For the reasons outlined below, it is my view that the answer to that question is yes. The Applicant makes the following submission in relation to this factor, which I agree with:
“The fact that an enterprise agreement has not yet been approved pursuant to the application under section 185 of the FW Act is no impediment to the Commission exercising its discretion to vary the instrument under section 217(1).[1]”[2]
It is apparent on the material filed with the application for approval of the Agreement that employees were requested by Ridley to approve the Agreement by voting on it (s.181(1)) in a ballot conducted on 26 August 2022. A valid majority of employees who participated in the ballot approved the Agreement which was made on 26 August 2022 (s.182(1)). As the Agreement was made on 26 August 2022, it follows that it is an enterprise agreement made pursuant to s.172(2) and as defined under s.12 of the Act. As it is an enterprise agreement as defined under the Act, I am satisfied that the Agreement may be varied pursuant to an application made under s.217 of the Act.
Variation of the Agreement to remove an ambiguity or uncertainty
I turn next to the question of whether there is an ambiguity or uncertainty in the Agreement capable of being removed pursuant to s.217 of the Act. The Applicant makes the following submissions in relation to the legal framework:
“In determining an application under section 217, the task of the Commission is to identify whether there is an uncertainty or ambiguity in the Proposed Agreement, which is a "jurisdictional pre-requisite to the exercise of the discretion to vary the instrument".[3]
An uncertainty in the terms of an enterprise agreement may still be identified, and the Commission's jurisdiction enlivened, where it is created by the application of unambiguous terms to a given set of circumstances.[4]
Once an uncertainty or ambiguity is identified, the Commission must consider whether to exercise its discretion to vary the enterprise agreement to remove the ambiguity or uncertainty. In considering whether to exercise its discretion, the Commission should have regard to the mutual intention of the parties at the time the enterprise agreement was made.[5] The Commission will generally err on the side of finding an ambiguity or uncertainty exists where there are rival contentions and an arguable case is made out for more than one contention.[6]
In addition to the authorities concerning the operation of section 217 of the FW Act, the authoritative principles relevant to the interpretation of a single enterprise agreement were recorded by the Full Bench in the decision AMWU v Berri Pty Ltd[7] (Berri), which built on the preceding Full Bench authority of AMIEU v Golden Cockerel Pty Ltd.[8]
In particular, the Full Bench in Berri (at [114]) noted that the task of construing a single enterprise agreement "begins with a consideration of the ordinary meaning of the relevant words". This includes, but is not limited to, the legislative context under which the enterprise agreement was made.
In that decision, following its elucidation of contextual principles, the Full Bench observed that 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."”[9]
As to the merits of the application, the Applicant makes the following submissions:
“In the Applicant's submission, it is clear from the surrounding context (including clauses 14, 44 and at clause 47.7.1 of Schedule 1 to the Proposed Agreement) that where the phrase "the life of the Agreement" appears, it is intended as a reference to the nominal life of the Agreement.
For example, the proper construction of the mutual commitment of the parties not to pursue any extra claims "during the life of the Agreement" in clause 44 must be understood as a reference to the nominal life of the Proposed Agreement.
This is consistent with the conduct and expectations of the parties, noting there was no suggestion that the corresponding "No Extra Claims" provision at clause 43 in the predecessor to the Proposed Agreement[10] (which is in identical terms to clause 44 of the Proposed Agreement and precluded claims "during the life of the Agreement") excluded the parties from bargaining for the Proposed Agreement on the attainment by that instrument of the nominal expiry date. Any attempt to maintain otherwise would be inconsistent with the statutory rights of the employees in relation to enterprise bargaining under Part 3-3 of the FW Act.[11]
In this respect, the Applicant does not submit that there is any ambiguity or uncertainty with the expression "during the life of the Agreement" where it appears in the Proposed Agreement. Rather, it submits that, in accordance with the principles of interpretation set out in Berri, the expression "during the life of the Agreement" is plainly understood as a reference to the nominal life of the Agreement having regard to the ordinary meaning of the words (taking account of the legislative context) and the common intention of the parties.
On recognition that this is the correct interpretation of the phrase, the Applicant submits that there is currently an uncertainty in the terms of the Proposed Agreement arising at clauses 14 and 47.1.1(c) of Schedule 1 by reason of the incorrect nominal expiry date in clause 3.
As outlined above, clauses 14 and 47.1.1 at Schedule 1 stipulate that the published wage rates in Schedule 1 will apply during the [nominal] life of the Proposed Agreement.
However, the pre-existing nominal expiry date of 22 August 2024 at clause 3 of the Proposed Agreement (that the Applicant seeks to vary by way of this Application) is incompatible with the commencement of the Year 3 wage rates under clause 47.1.1(c) at Schedule 1. Those wage rates, which are scheduled to take effect from no earlier than 23 August 2024, cannot apply during the nominal life of the Proposed Agreement because the increase does not take effect until after that nominal expiry date.
In these respects, while the terms of the Proposed Agreement are unambiguous, the effect of the incorrect nominal expiry date at clause 3, when combined with clauses 14 and 47.1.1 of Schedule 1, is to create an uncertainty in the terms of the Proposed Agreement.
In the circumstances outlined above, the Applicant respectfully requests that the Commission exercise its discretion under section 217(1) of the FW Act to vary the nominal expiry date at clause 3 of the Proposed Agreement in order that it refers to 22 August 2025, thereby removing the uncertainty identified by this Application and ensuring it reflects the mutual intention of the parties.”[12]
Consideration of the s.217 application
I agree with the submissions of the Applicant that the effect of the nominal expiry date at clause 3, when combined with clauses 14 and 47.1.1 of Schedule 1, creates an uncertainty in the terms of the Agreement. That is because the pre-existing nominal expiry date of 22 August 2024 at clause 3 of the Agreement is incompatible with the commencement of the Year 3 wage rates under clause 47.1.1(c) at Schedule 1. Those wage rates, which are scheduled to take effect from no earlier than 23 August 2024, cannot apply during the nominal life of the Agreement because the increase does not take effect until after that nominal expiry date.
I also consider it appropriate to vary the Agreement to remove the uncertainty pursuant to s.217 of the Act by varying clause 3. It is appropriate to exercise the discretion to do so in order to remove the obvious uncertainty that currently exists and provide certainty for the parties to the Agreement.
As noted above, I sought the views of the Applicant and bargaining representatives for the Agreement. The parties did not express any views as to the approval of either the s.217 or s.185 application.
I consider it appropriate to vary the Agreement as follows in order to remove the uncertainty outlined above:
1. By deleting the year “2024” in clause 3, which reads as follows:
“COMMENCEMENT DATE OF AGREEMENT AND PERIOD OF OPERATION
This Agreement shall commence operation seven days after the date of approval by the Fair Work Commission and shall nominally expire on 22 August 2024.”
2. By inserting the year “2025” in clause 3 of the Agreement, so that it reads as follows:
“COMMENCEMENT DATE OF AGREEMENT AND PERIOD OF OPERATION
This Agreement shall commence operation seven days after the date of approval by the Fair Work Commission and shall nominally expire on 22 August 2025.”
An order giving effect to this variation will take effect from the date of operation of the Agreement, being 19 October 2022.[13]
Application for approval of the Agreement
The Employer has provided written undertakings. A copy of the undertakings is attached in Annexure A. I am satisfied that the undertakings will not cause financial detriment to any employee covered by the Agreement and that the undertakings will not result in substantial changes to the Agreement. The undertakings are taken to be a term of the agreement.
Subject to the undertakings referred to above, I am satisfied that each of the requirements of ss.186, 187, 188 and 190 as are relevant to this application for approval have been met.
The United Workers’ Union being a bargaining representative for the Agreement, has given notice under s.183 of the Act that it wants the Agreement to cover it. In accordance with s.201(2) I note that the Agreement covers the organisation.
I observe that the following provisions are likely to be inconsistent with the National Employment Standards (NES):
· Clause 26.5.1(b) – Annual Leave.
· Clause 29.4.1 – Public Holidays.
· Clause 37.1.5 and 37.5 – Termination of Employment.
However, noting clause 7.4 of the Agreement, I am satisfied the more beneficial entitlements of the NES will prevail where there is an inconsistency between the Agreement and the NES.
The Agreement is approved and, in accordance with s.54 of the Act, will operate from 19 October 2022. The nominal expiry date of the Agreement is 22 August 2025.
COMMISSIONER
Annexure A
[1] City of Greater Geelong Enterprise Agreement (No 11) 2021 [2022] FWCA 927 at [7] - [12].
[2] Applicant’s Outline of Submissions dated 29 September 2022 at [12].
[3] Brockman Engineering Pty Ltd [2022] FWC 462 at [13].
[4] Ibid.
[5] Re Tenix Defence Systems Pty Limited Certified Agreement 2001-2004 (PR917548) at [32].
[6] Ibid at [31].
[7] [2017] FWCFB 3005.
[8] [2014] FWCFB 7447.
[9] Applicant’s Outline of Submissions dated 29 September 2022 at [13]-[17].
[10] Ridley AgriProducts Pty Ltd & United Workers Union - Pakenham - Enterprise Agreement 2019.
[11] This interpretation is also consistent with the decision in Toyota Motor Corporation Australia Ltd v Marmara [2014] FCAFC 84 which provides that an enterprise agreement cannot override a statutory right.
[12] Applicant’s Outline of Submissions dated 29 September 2022 at [18]-[26].
[13] PR746713.
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