Sedgman Operations Employment Services Pty Ltd

[2016] FWCA 81

[2016] FWCA 81

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.217 - Application to vary an agreement to remove an ambiguity or uncertainty

Sedgman Operations Employment Services Pty Ltd
(AG2015/6661)

SEDGMAN METALLIFEROUS AGREEMENT 2015

Mining industry
DEPUTY PRESIDENT ASBURY	BRISBANE, 6 JANUARY 2016

Application for variation of the Sedgman Metalliferous Agreement 2015.

[1] Sedgman Operations Employment Services Pty Ltd (Sedgman) applies for the Fair Work Commission (the Commission) to vary an enterprise agreement to remove an ambiguity or uncertainty. The enterprise agreement is known as the Sedgman Metalliferous Agreement 2015 (the Agreement). The application is made pursuant to s.217 of the Fair Work Act 2009 (the Act).

[2] The Agreement was approved by the Commission as presently constituted on 29 September 2015 and commenced operation on 6 October 2015. The originating application in respect of the application for approval of the Agreement states that there were 10 individual employee bargaining representatives for the Agreement. There are no employee organisations covered by the Agreement.

[3] The Agreement as originally approved is expressed to apply to “Sedgman Employment Operations Services Pty Ltd” and employees employed by “Sedgman Employment Operations Services Pty Ltd” that are engaged in work that falls within the geographic scope of the Agreement and its classifications.

[4] Sedgman submits that the corporate entity named in the Agreement - Sedgman Employment Operations Services Pty Ltd - does not exist. It is submitted that a typographical error has occurred in drafting the Agreement such that the words “Employment” and “Operations” have been switched. Sedgman applies to correct this typographical error by deleting references in the Agreement to “Sedgman Employment Operations Service Pty Ltd” and inserting “Sedgman Operations Employment Services Pty Ltd”.

[5] On 10 December 2015 I caused correspondence to be sent to Sedgman’s representative requesting, among other things, evidentiary material attesting to the circumstances of the drafting error and evidence as to the appropriate corporate entity. I also sought that Sedgman provide evidence as to whether the relevant bargaining representatives and employees were notified of the proposed variation and what their views were in relation to the proposed variation, if any. On 15 December 2015, Sedgman filed a Statutory Declaration of Lucy Skelton, Senior People & Culture Specialist.

RELEVANT LEGISLATION

[6] The application has been made pursuant to s.217 of the Act, which provides 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.”

SUBMISSIONS AND EVIDENCE

[7] Sedgman submits that the drafting error gives rise to confusion, ambiguity and uncertainty as the “employer” named by the Agreement does not exist and is not, in fact, the employer who employs the employees.

[8] Ms Skelton states that as the Senior People and Culture Specialist for Sedgman, she was responsible for drafting the Notice of Employee Representational Rights (NERR) given by Sedgman to employees proposed to be covered by the Agreement at the commencement of bargaining. That NERR is in evidence and relevantly states:

“Sedgman Operations Employment Services Pty Ltd gives notice that it is bargaining in relation to [the Agreement] which is proposed to cover employees that are employment by Sedgman Operations Employment Services Pty Ltd and are within the scope and coverage defined in the proposed Agreement...”

[9] Ms Skelton also states that there is currently no such entity as “Sedgman Employment Operations Services Pty Ltd”, nor was there such an entity at the time of bargaining or making the application for approval of the Agreement.

[10] On 15 October 2015, Ms Skelton instructed the solicitors acting for Sedgman to conduct a search of the Australian Securities and Investments Commission’s (ASIC) online company register. The result of that search is attached to Ms Skelton’s declaration and indicates that the search returned no results that matched the name “Sedgman Employment Operations Services Pty Ltd”.

[11] Ms Skelton further states that the actual employment of the relevant employees is “Sedgman Operations Employment Services Pty Ltd” being the entity named in the NERR as the employer with whom employees were bargaining. Ms Skelton states that it was a drafting error in preparing the Agreement that the words “Operations” and “Employment” were incorrectly swapped.

[12] Ms Skelton states that on 10 December 2015 she emailed the employee bargaining representatives to advise them that the error had been identified subsequent to the approval of the Agreement and that Sedgman has applied to the Commission to vary the Agreement accordingly. Ms Skelton also sent a text message to the employees to refer them to her email.

[13] Ms Skelton’s email requested that any objections to the proposed variation be made by 14 December 2015. At the time of making her declaration in this matter, Ms Skelton states that two employees have advised that they do not object to the variation and she has otherwise not received any objections.

CONSIDERATION

[14] An ambiguity or uncertainty must be identified as a jurisdictional fact before the Commission’s power to vary an Agreement is enlivened under s.217 of the Act. 1 There is no clear test for determining when an ambiguity exists2 but the Commission will generally err on the side of finding an ambiguity or uncertainty where rival contentions are advanced and there is an arguable case made out for more than one contention3. However, the Commission must make an objective assessment about whether, on the proper construction of the Agreement, it is susceptible to more than one meaning.4 Even if an ambiguity or uncertainty is found it remains a discretionary matter whether the Commission will make a variation to the Agreement having regard to the mutual intention of the parties at the time of making the Agreement.5

[15] On the basis of the material before me I am satisfied that there has been a drafting error in preparing the Agreement. It is clear from the NERR and Ms Skelton’s statement that the employer that was objectively intended to be covered by the Agreement was Sedgman. The entity currently named in the Agreement does not exist. The effect of this drafting error, presumably, is that without this variation the Agreement does not apply to anyone. This gives rise to a number of practical and legal difficulties for the parties, which could be described as an uncertainty in the operation of the Agreement.

[16] I am satisfied that an application to vary the Agreement has been made, that the Agreement currently gives rise to uncertainty and that it is appropriate that I exercise my discretion to vary the Agreement to correct the drafting error that has been identified.

[17] I Order that the Agreement be varied in accordance with the schedule of variations filed by Sedgman and annexed to these reasons. The variation operates from 6 October 2015. A consolidated version of the Agreement will be published with these reasons.

DEPUTY PRESIDENT

Annexure A – Schedule of Variations

The Sedgman Metalliferous Agreement 2015 [AE415917] is varied as follows:

1. Clause 1.2 is varied by replacing the reference to “Sedgman Employment Operations Services Pty Ltd” in the first bullet point of clause 1.2 with “Sedgman Operations Employment Services Pty Ltd”; and

2. Clause 1.3 is varied by replacing the reference to “Sedgman Employment Operations Services Pty Ltd” in the first bullet point of clause 1.3 with “Sedgman Operations Employment Services Pty Ltd”; and

3. Clause 1.5 is varied by replacing the reference to “Sedgman Employment Operations Services Pty Ltd” in the definition of “Company” with “Sedgman Operations Employment Services Pty Ltd”.

 1   Coinvest Ltd v Visionstream Pty Ltd (2004) 134 IR 43 at [44].

 2   Printing & Kindred Industries Union v Davies Bros Ltd (1986) 18 IR 444 at 449 per Gray J.

 3   Re Victorian Public Transport Enterprise Agreement 1994 [1995] AIRC 192 per VP Ross, SDP Polites and Cmr Grimshaw.

 4   Tenix Defence Systems Pty Ltd Certified Agreement 2001-2004 [2002] AIRC 531 at [49] per VP Ross, SDP O’Callaghan and Cmr Foggo.

 5 Ibid at [32].

Printed by authority of the Commonwealth Government Printer

<Price code C, AE415917  PR575846>