State of Victoria (Department of Human Services)

[2013] FWCA 5773

[2013] FWCA 5773

FAIR WORK COMMISSION

DECISION

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

State of Victoria (Department of Human Services)
(AG2013/7873)

HACSU DEPARTMENT OF HUMAN SERVICES DISABILITY SERVICES ENTERPRISE AGREEMENT 2012 - 2016

State and Territory government administration
COMMISSIONER ROE	MELBOURNE, 14 AUGUST 2013

Application for variation of the HACSU Department of Human Services Disability Services Enterprise Agreement 2012-2016 to remove uncertainty.

[1] On 1 August 2013 the Department of Human Services (DHS) made this Application to vary the HACSU Department of Human Services Disability Services Enterprise Agreement 2012-2016 (the Agreement). I approved the Agreement on 8 February 2013 1. The Application was made under Section 217 of the Fair Work Act 2009 (the Act) on the grounds that there was uncertainty and ambiguity in the Agreement.

[2] The bargaining representative for the Agreement and the organisation which is covered by the Agreement, Health Services Union Victoria Number 2 Branch T/A Health and Community Services Union (HACSU) supported the Application. I received unchallenged submissions and evidence from DHS and HACSU and Mr Jesse Maddison for DHS and Mr Lloyd Williams for HACSU.

[3] Section 217 of the Act provides:

“217 Variation of an enterprise agreement to remove an ambiguity or uncertainty

(1) FWA 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 FWA varies the enterprise agreement, the variation operates from the day specified in the decision to vary the agreement.”

[4] It is necessary for me to determine first whether or not there is an ambiguity or uncertainty. If I am satisfied that there is an uncertainty then I must determine whether or not I should use my discretion to remove that uncertainty and then determine how the Agreement should be varied to remove the uncertainty. I am satisfied that the Applicant employer is covered by the Agreement and has the capacity to make the Application.

[5] DHS submitted that the decision of Senior Deputy President Marsh in Beltana Highway Mining Pty Ltd 2sets out a useful summary of the relevant principles to be applied under Section 170MD(6) of earlier legislation. The provisions of Section 170MD(6) are similar to Section 217. Those principles are as follows:

“[23] The following guidance can be discerned from authorities which have dealt with s.170MD(6) applications:

• before exercising its discretion to vary an agreement pursuant to s.170MD(6)(a) the Commission must first identify the ambiguity or uncertainty (PR917548 at para.28, Print M2454 at p.3, Print 2431 at para.8);



• the Commission may then exercise the discretion to remove the ambiguity or uncertainty by varying the agreement (PR917548 at para.28, PR903843 at para.7, Print M2454 at p.4);



• the first step i.e. identification of an ambiguity or uncertainty requires the determination of a “jurisdictional fact” (PR917548 at para.33, 199 CLR 135 at 148);



• the correct approach to identifying an ambiguity or uncertainty requires the making of an objective judgment as to whether, on the proper construction of the relevant provision of an agreement, the wording of that provision is susceptible to more than one meaning (PR917548 at para.49, PR903843 at para.7, Print M2454 at p.3);



• the words used in the provision are construed in their context including where appropriate the relevant parts of the parent award with which a complementary provision is to be read (Print Q2603 at para.30 per Munro J);



• s.170MD(6)(a) is not confined to the identification of which words of a clause give rise to an ambiguity or uncertainty. A combination of clauses may have that effect (Print R2431 at para.12);



• 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 (Print M2454 at p.4, Print R2431 at para.14);



• the Commission’s task is to make an objective judgment as to whether the wording of a provision is susceptible to more than one meaning. It must avoid contentions that are “self serving” (PR924146 at para.20 and PR903843 at para. 7);



• the second step in the process is the exercise of discretion as to whether or not an agreement should be varied to remove the ambiguity or uncertainty (PR917548 at para.54);



• the Commission may not appropriately use its power to rewrite an agreement to install something that was not inherent to the agreement when it was made (Print Q2603 at para.29);



• the Commission is to have regard to the mutual intention of the parties at the time the agreement was made (PR917548 at para.54) and subsequent conduct of the parties;



• the Commission is empowered to remove an ambiguity or uncertainty by varying an agreement to remove it in a manner which gives effect to the mutual intentions of the parties at the time the agreement was made. The Commission is not limited by the form of the application before it (PR917548 at para.56);



• in looking at the context of a provision the Commission is entitled to consider (46 IR 128 at p.134):



• the effect of a prefatory statement made by the parties at the time when it was introduced into the award;



• the circumstances of the origin and use of the clause;



• the time when and the circumstances under which the instrument is made;



• the entire document of which the contentious provision is part or other documents with which there is an association;



• ideas that give rise to an expression in a document.

[24] In summary, the task is to make an objective judgment as to whether the wording of a provision(s) is susceptible to more than one meaning. If that judgment is in the affirmative then the Commission may exercise its discretion to decide whether or not the agreement should be varied to remove the ambiguity or uncertainty. In exercising such a discretion, the Commission is to have regard to the mutual intention of the parties at the time the agreement was made.”

[6] This approach was adopted by Commissioner Blair in Automotive, Food Metals, Engineering, Printing & Kindred Industries, known as the Australian Manufacturing Workers Union (AMWU) v Toyota Motor Corporation. 3 A full bench on appeal found no error in the approach adopted by Commissioner Blair.4

[7] I agree that this is an appropriate summary of the relevant principles.

[1] DHS and HACSU submit that there are two definitions of night shift in the Agreement. The relevant provisions are as follows:

“28.4.3 Payment for shift duty - Monday to Friday when required, on any day Monday to Friday inclusive (excluding a public holiday):

28.4.3(a) afternoon or short shift - an allowance at the rate of 15% additional of the appropriate hourly rate for each hour of duty; and

28.4.3(b) Night shift- an allowance at the rate of 17.5% additional of the appropriate hourly rate for each hour of duty; and

28.4.3(c) night shift continuously beyond four weeks on a shift commencing before 8:00 pm and continuing beyond 6:00am, failing wholly within the hours of 8:00pm and 6:00am, or commencing between 8:00pm and 12:00 midnight and lasting for at least eight hours - to be paid 15% allowance of the appropriate hourly rate, additional to the rate prescribed in subclause 28.4.3.(b) for each hour of duty; provided that this additional payment shall not apply where, but for mutual agreement, the Employee would be required to work rotating shift duty;

....

28.6 Definition - from 10 February 2013 afternoon, night and short shifts for the purpose of this clause:

28.6.1 "Afternoon shift", referred to in sub-clause 28.4.3(a) means a period of duty commencing at or after 10:00 am and before 8:00 pm.

28.6.2 "Night shift", referred to in sub-clause 28.4.3(b) means a period of duty commencing at or after 8:00 pm and before 6:00am.

28.6.3 "Short Shift" means a shift between Monday to Friday (inclusive) that is 5 hours or less in length.”

[2] The definition of night shift which applies in Clause 28.4.3(b) and Clause 28.6.2 is different from the definition of night shift which applies in Clause 28.4.3(c). The first definition applies to non-continuous night shift work whereas the definition in Clause 28.4.3(c) applies to continuous night shift work. However, Clause 28.4.3(c) clearly implies that the allowance in Clause 28.4.3(b) would be applicable to the shift if it was a non-continuous shift. In other words a plain reading of Clause 28.4.3(c) is that there could be no night shift under that clause which would not also otherwise be entitled to the 17.5% allowance under Clause 28.4.3(b). However, an employee working a shift which commences at 7.30pm and finishes at 6.30am does not meet the night shift allowance definition under Clause 28.4.3(b) read in conjunction with Clause 28.6.2 but they may meet the definition of night shift allowance under Clause 28.4.3(c).

[3] There is therefore some uncertainty as to the applicable penalty payment for a continuous shift worker under Clause 28.4.3(c) if they work a shift which begins at 7.30pm and finishes at 6.30am. The plain words “night shift continuously beyond four weeks on a shift commencing before 8:00 pm and continuing beyond 6:00 am” suggest that the additional penalty payment under Clause 28.4.3(c) applies. However, the requirement that the payment is “additional to the rate prescribed in subclause 28.4.3(b)for each hour of duty” read in context suggests that the additional penalty does not apply because the additional rate in Clause 28.4.3(b) does not apply to such a shift. Clause 28.4.3(b) only applies to a shift that commences at or after 8pm and before 6am.

[4] It is a very strange situation that on one reading of the definition of night shift an employee who works a shift from 7.45pm until 6.30am is entitled to a lesser penalty payment than an employee who works a shift from 8pm until 6.30am. It is obvious that the disability for working the former shift is at least as great as the disability for working the later shift.

[5] The evidence of Mr Maddison is that DHS have conducted an audit of night work shifts. This reveals that 1747 shifts commenced between 7pm and 8pm across the service whilst 1792 shifts commenced night work at or after 8pm. The earliest finishing time of these shifts was 6.30am and the latest finishing time was 10am. The most common starting time was 7.45pm.

[6] I accept the evidence and submissions of the parties that the uncertainty has arisen because in the previous agreement, the HACSU Department of Human Services Enterprise Agreement 2008-2012, the penalty payment for non-continuous afternoon shift and night shift were the same.

[7] The Agreement increased the penalty payment for night shift and the penalty payment for afternoon shift remained unchanged. Clause 28.4.3(b) of the former agreement was in the same terms as Clause 28.4.3(c) of the current Agreement except that the former agreement clause referred to Clause 28.4.3(a) not 28.4.3(b). Clause 28.4.3(a) defined the penalty payment for both afternoon and night shift to be 15%. It is therefore clear that the ambiguity about the definition of night shift existed in the earlier agreement but it did not lead to any real uncertainty about the actual payment to be made. However, under the Agreement there is now a real uncertainty about the actual payment to be made as the actual payment now depends upon whether or not the shift is an afternoon shift or a night shift.

[8] I am satisfied by the evidence of Mr Maddison and Mr Williams that the mutual intention of the parties at the time they made the Agreement was to increase the night shift allowance to 17.5% to compensate staff for the unsocial nature of working a night shift. It was not the mutual intention of the parties for there to be any shift where a continuous shift worker would be entitled to an additional penalty but where a non-continuous shift worker would not be entitled to a night shift penalty of 17.5%.

[9] It would offend industrial reality to conclude that the parties intended that the Agreement should mean that an employee who works a shift from 7.45pm until 6.30am is entitled to a lesser penalty payment than an employee who works a shift from 8pm until 6.30am.

[10] I am satisfied that the night shift starting time is susceptible to more than one meaning.

[11] I am also satisfied that I should exercise my discretion to remove the uncertainty. Failure to do so is likely to result in disputation and significant costs to both DHS and HACSU. Failure to do so would result in unfairness and would mean that the mutual intention of the parties in making the Agreement is not properly implemented.

[12] I consider that the appropriate way to remove the uncertainty is to remove any inconsistency between the definition of night shift in Clause 28.4.3(c) and Clause 28.6.2. The inconsistency will be removed if there are no shifts which meet the definition of night shift for continuous shift workers which do not also meet the definition of night shift for non-continuous shift workers. Based upon the evidence of Mr Maddison I consider that night shift should be defined in Clause 28.6.2 as a period of duty commencing at or after 7.00pm and before 6.00am. There should also be consequential adjustments to the definitions in Clause 28.4.3(c) so that they refer to shifts commencing at or after 7pm and to the definition of afternoon shift in Clause 28.6.1 so that it relates to shifts commencing before 7pm rather than 8pm.

[13] The consequential changes to the Agreement are shown underlined below:

1. Varying clause 28.4.3(c) to:

“night shift continuously beyond four weeks on a shift commencing at or after 7:00 pm and continuing beyond 6:00 am, falling wholly within the hours of 7:00 pm and 6:00 am, or commencing at or after 7:00 pm and 12:00 midnight and lasting for at least eight hours – to be paid 15% allowance of the appropriate hourly rate, additional to the rate prescribed in sub-clause 28.4.3. (b) for each hour of duty; provided that this additional payment shall not apply where, but for mutual agreement, the Employee would be required to work rotating shift duty.”

2. Varying clause 28.6.1 to:

“Afternoon shift”, referred to in sub-clause 28.4.3(a) means a period of duty commencing at or after 10:00 am and before 7:00 pm.”

3. Varying clause 28.6.2 to:

“Night shift”, referred to in sub-clause 28.4.3(b) means a period of duty commencing at or after 7:00 pm and before 6:00 am.

[14] I am satisfied that these variations better reflect the mutual intention of the parties at the time the Agreement was made.

[15] I am satisfied that the variations to remove the uncertainty should operate from today’s date, 14 August 2013.

[16] An Order varying the Agreement accompanies this decision.

COMMISSIONER

 1   [2013] FWCA 939.

 2   PR932468.

 3   [2010] FWA 9254.

 4   [2011] FWAFB 2132.

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<Price code C, AE899811  PR540293>