Svitzer Australia Pty Ltd

[2022] FWCA 4475

[2022] FWCA 4475

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009

s.217—Enterprise agreement

Svitzer Australia Pty Ltd

(AG2022/4884)

SVITZER Australia Pty Limited and MUA Newcastle Lines and Mooring Enterprise Agreement 2022

Maritime industry
COMMISSIONER MCKINNON	SYDNEY, 19 DECEMBER 2022

Whether enterprise agreement coverage term is ambiguous or uncertain – ambiguity or uncertainty – variation made

1. On 20 October 2022, I approved the Svitzer Australia Pty Limited & MUA Newcastle Lines and Mooring Enterprise Agreement 2022 (the Agreement) between Svitzer Australia Pty Limited (Svitzer) and its relevant employees.[1] The Agreement’s nominal expiry date is 30 June 2025 and the Construction, Forestry, Maritime, Mining and Energy Union (the Union) is covered by the Agreement.

1. Svitzer now seeks to vary the Agreement to remove a sentence dealing with wage increases that are less than “CPI” in clause 17.2.1(i) (an unintended carryover from an earlier enterprise agreement). Svitzer says clause 17.2.1 is ambiguous and uncertain because it provides for something that was not agreed between the parties, and because “CPI” is not defined and is capable of a variety of meanings. The Union agrees with the submissions of Svitzer and submits that the clear intention of the makers of the Agreement was to remove the reference to CPI from the wages schedule in clause 17.2.1(i) as part of the agreement reached.

1. The question is whether there is relevant ambiguity or uncertainty in the Agreement and if so, whether it should be cured by variation. Relevant principles were summarised in Bradnam’s Windows & Doors Pty Ltd (Dandenong South Manufacturing) and Australian Workers’ Union Enterprise Agreement 2018[2] and I do not repeat them. More recently, the approach to applications under s.217 of the Act was considered in Bianco Walling Pty Ltd v Construction, Forestry, Maritime, Mining andEnergy Union.[3]

1. I am satisfied that clause 17.2.1(i) of the Agreement is uncertain in its effect having regard to the agreement reached in settlement of bargaining. Clause 17.2.1(i) purports to provide for an increase in wages above that which was agreed, and by an amount that cannot be known with any precision. The uncertainty cannot be resolved by a process of interpretation directed at understanding the common intention of the parties about what level of “CPI” increase was intended to apply, because their common intention was that CPI level increases would not apply. Instead, fixed annual wage increases of 2.5% are to apply for the nominal life of the Agreement. I make this finding despite the error being present in documents provided to employees in connection with the vote to approve the Agreement. This is not an industrially naïve workforce, but rather one that relies heavily on the Union’s representation of employees. For this reason, the Union’s support for the application and its submission about the content of what was agreed with employees carries significant weight.

1. The drafting error means that the Agreement is not consistent with what was agreed. This creates latent uncertainty in the clause, both about whether the CPI rule applies, and if so, about the quantum of wage increase that will apply each year under the Agreement.

1. Failure to remedy the error would be inconsistent with the Commission’s duty to act with equity, good conscience and the merits of the case.[4] The parties have held to their agreement and have asked the Commission to approve only what was agreed. If the uncertainty remains, it risks imposing substantial unanticipated costs upon Svitzer, while at the same time leaving open the door to the possibility of taking advantage of the opportunity presented for a windfall gain.

1. For these reasons, I will vary the Agreement to remove the sentence that constitutes the drafting error from clause 17.2.1(i) of the Agreement. An order [PR749078] will issue separately to this decision.

1. The application is determined accordingly.

COMMISSIONER

[1] [2022] FWCA 3658; AE517859 (PR747033).

[2] [2019] FWCA 979.

[3] [2020] FCAFC 50.

[4] Bianco Walling Pty Ltd v Construction, Forestry, Maritime, Mining andEnergy Union [2020] FCAFC 50.

Printed by authority of the Commonwealth Government Printer

<AE517859  PR749040>