Specialty Packaging Group Pty Ltd

[2020] FWCA 5374

[2020] FWCA 5374

The attached document replaces the document previously issued with the above code on 12 October 2020.

The publication ID for this Decision is AE502944 and not AE509199.

Esther Rafoo

Associate to Commissioner Lee

Dated 13 October 2020

[2020] FWCA 5374

FAIR WORK COMMISSION

DECISION

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

Specialty Packaging Group Pty Ltd
(AG2020/3010)

SPECIALTY PACKAGING GROUP PTY LTD (NSW) ENTERPRISE AGREEMENT 2018

(ODN AG2018/6385) [AE502944]

Graphic Arts
COMMISSIONER LEE	MELBOURNE, 12 OCTOBER 2020

Application for variation of the Specialty Packaging Group Pty Ltd (NSW) Enterprise Agreement 2018 because of ambiguity or uncertainty – appropriate that ambiguity be removed – agreement varied.

[1] An application has been made by Specialty Packaging Group Pty Ltd (Applicant) pursuant to s.217 of the Fair Work Act 2009 (FW Act) to vary the Specialty Packaging Group Pty Ltd (NSW) Enterprise Agreement 2018 (Agreement) to remove ambiguity or uncertainty.

[2] On 18 September 2020, the Applicant made an application under s.602 of the FW Act for an order to correct an error in the pay rates applying from September 2020 under the Agreement.

[3] At the mention hearing before me on 25 September 2020, the Applicant was granted permission under s.586(b) of the FW Act to amend its application such that it is now taken to be an application under s.217 of the FW Act to vary an enterprise agreement to remove an ambiguity or uncertainty (Application).

[4] The Applicant was directed to file submissions in support of the Application for the matter to then be determined on the papers without the need for a hearing.

[5] The Application proposes a variation to clause 21(a) of the Agreement to alter one of the hourly rates of pay as it does not correspond with the relevant weekly rate in the Agreement and therefore creates ambiguity or uncertainty.

Existence of ambiguity or uncertainty

[6] In the present proceedings, it is the Applicant’s position that there is an ambiguity or uncertainty in the table in clause 21(a) of the Agreement which deals with ‘Wage Rates and Increases’. The ambiguity or uncertainty arises from the inclusion of a ‘per hour’ wage rate which does not align with the ‘per week’ wage rate for the same classification level.

[7] The fourth column of the table sets out the ‘ordinary weekly rates of pay’ from the ‘First pay period on or after the 01/09/2020’ (September 2020 Rates).

[8] The fifth row of the table sets out the rates payable to Level 4 employees. The fifth row lists the September 2020 Rates as ‘$1,219.50 per week’ and ‘$32.95 per hour’ for a Level 4 employee.

[9] The Applicant submits that this creates an ambiguity or uncertainty as to the correct ‘per hour’ wage rates to be applied for Level 4 employees because the ’32.95 per hour’ does not equate to the ‘$1,219.50 per week’ amount when multiplied by the 38 ordinary hours per week as established in clause 18 of the Agreement. The other ‘per hour’ wage rates in the Agreement all reflect the relevant ‘per week’ rate divided by 38 ordinary hours.

[10] The existence of an ambiguity or uncertainty is supported by the replication, in the sixth row for Level 5 employees, of the ‘$32.95 per hour’ figure but with a different ‘$1,252.30 per week’ figure.

[11] It is the Applicant’s position that the reference to ‘$1,219.50 per week’ was intended, but the reference to ‘$32.95 per hour’ was not. The correct ‘per hour’ rate should be ‘$32.09 per hour’, which reflects the ‘$1,219.50 per week’ being divided by 38.

[12] The Applicant submits that the Commission can be satisfied that the inconsistency between the ‘$1,219.50 per week’ and ‘$32.95 per hour’ September 2020 Rates for a Level 4 employee is an ambiguity or uncertainty for the purposes of s.217 of the FW Act.

[13] The Applicant draws the Commission’s attention to the decisions in Mercer Administration Services (Australia) Pty Ltd T/A Mercer, 1in which DP Kovacic held that an inconsistency between annual and weekly pay rates created an ambiguity or uncertainty for the purposes of s.217 of the FW Act. The decision of the Commission in Edith Cowen University also supports the proposition that errors in pay scales can give rise to an ambiguity or uncertainty for the purposes of s.217 of the FW Act.2

[14] To remove the claimed ambiguity, the Applicant seeks that the Agreement be varied by replacing in clause 21(a) the Level 4 per hour amount in column four, row 5 of ‘$32.95 per hour’ with ‘$32.09 per hour’. This is to remove the ambiguity or uncertainty arising from the difference between the ‘per hour’ and ‘per week’ rates for a Level 4 employee from the first pay period on or after 1 September 2020.

[15] The Applicant seeks that the variation, if granted, operate from the date the Agreement was approved, being 15 April 2019.

[16] Section 217 of the Act provides the following:

“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.”

[17] The Applicant is the employer covered by the Agreement and therefore has standing to make the Application.

[18] A summary of the principles that are to be applied in considering an application under s.217 was set out by DP Gostencnik in Bradnam’s Windows and Doors Pty Ltd: 3

“[11] As seems clear from the text of s.217, the discretion to vary an agreement may only be exercised if first the Commission is satisfied that there is ambiguity or uncertainty in the agreement. The principles that are to be applied in considering an application under s.217 may be shortly stated:

•  The Commission should approach an application in two stages. First, as a jurisdictional pre-requisite, it should identify whether there is an uncertainty or ambiguity. Secondly, if an ambiguity or uncertainty is identified, it should consider whether to exercise its discretion to vary the agreement the subject of the application; 4 

•  The process of identifying ambiguity or uncertainty involves making an objective assessment of the words used in the provisions under examination. The words used are construed having regard to their context; 5 

•  The Commission will generally err on the side of finding an ambiguity or uncertainty where there are rival contentions advanced and an arguable case is made out for more than one contention; 6 

•  However, the Commission must make a positive finding that an agreement the subject of an application under s.217 is ambiguous or uncertain. Prima facie satisfaction of ambiguity or uncertainty is not sufficient; 7 

•  The mere existence of rival contentions as to the proper construction of the terms of an agreement will also be an insufficient basis to conclude the existence of ambiguity or uncertainty. Such contentions may be self-serving. The task is to make an objective judgment as to whether the wording of a provision is susceptible to more than one meaning; 8 and

•  Once an ambiguity or uncertainty has been identified, in exercising the discretion whether to vary the agreement, the Commission is to have regard to the mutual

•  of the parties at the time the agreement was made. 9”

[19] I agree with the Deputy President that these are the relevant principles and adopt and apply them to the circumstances in this matter.

[20] I agree with the submissions of the Applicant that:

•  The reference to ‘$1,219.50 per week’ was intended, but the reference to ‘$32.95 per hour’ was not. The correct ‘per hour’ rate should be ‘$32.09 per hour’, which reflects the ‘$1,219.50 per week’ being divided by 38.

•  The Commission can be satisfied that the inconsistency between the ‘$1,219.50 per week’ and ‘$32.95 per hour’ September 2020 Rates for a Level 4 employee is an ambiguity for the purposes of s.217 of the FW Act.

[21] In the circumstances, I am satisfied that the hourly rate of pay identified under clause 21(a) of the Agreement creates an ambiguity which engages with s.217 of the Act. I am also satisfied that I should amend the Agreement to remove the ambiguity and that it is appropriate to do so in the manner proposed.

[22] While the Applicant seeks that the variation operate from the date that the Agreement was approved, I consider it appropriate that it operate from the date the Agreement commenced operation, being 22 April 2019.

[23] In order to remove the ambiguity identified I propose to vary the Agreement as outlined earlier. The Application is granted, and a variation order is issued separately.

COMMISSIONER

 1   [2020] FWCA 2433

 2   [2020] FWCA 4492

 3   [2019] FWCA 979

 4   See Re Tenix Defence Systems Pty Limited Certified Agreement 2001 - 2004 (PR917548) at [28], [32] and [35]

 5   Ibid at [29]

 6   Ibid at [31]

 7   See Colnvest Ltd v Visionstream Pty Ltd (2004) 134 IR 43 at [57]

 8   See Re Civil Construction Corporation Enterprise Agreement (PR939346); SJ Higgins Pty Ltd and Others v CFMEU (PR903843); Re CFMEU Appeal (Print R2431)

 9    See Re Tenix Defence Systems Pty Ltd Certified Agreement 2001 - 2004 (PR917548) at [32]

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< AE502944  PR723397>