Sydney Trains v Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia
[2021] FWCFB 746
•12 FEBRUARY 2021
| [2021] FWCFB 746 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.604 - Appeal of decisions
Sydney Trains
v
Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia
(C2020/6464)
VICE PRESIDENT HATCHER | SYDNEY, 12 FEBRUARY 2021 |
Appeal against decision [2020] FWC 3727 of Commissioner McKenna at Sydney on 31 July 2020 in matter number C2019/6213
Introduction and background
[1] Sydney Trains has lodged an appeal against a decision of Commissioner McKenna issued on 31 July 2020 1 (decision) pursuant to s 604 of the Fair Work Act 2009 (FW Act). The decision was made pursuant to s 739 of the FW Act and clause 8 of the dispute resolution procedure in the Sydney Trains Enterprise Agreement 2018 (2018 Agreement), and concerned a dispute between the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU) and Sydney Trains about the proposed trialling of a new system of sequential switching.
[2] The background to the matter is as follows. In September 2019, Sydney Trains, which is the operator of the Sydney metropolitan train network, directed employees classified as Electrical System Operators (ESOs) to undertake a field trial of its proposed new sequential switching arrangements. The ESOs and their union, the CEPU, contend that the new arrangements involve a risk to safety, and their introduction by Sydney Trains would contravene subclause 35.2 of the 2018 Agreement. Subclause 35.2 forms part of a scheme of provisions in clause 35 concerned with work health and safety. Clause 35 provides:
35. WORKPLACE HEALTH, SAFETY AND ENVIRONMENT
35.1 The work health and safety of all Employees, contractors, visitors and customers is the primary concern of the Employer. The parties to this Agreement share an ongoing commitment to ensure and to promote the work health, safety and welfare of all Employees, contractors, customers and visitors, and nothing in this Agreement shall be designed or applied in ways that reduce or diminish this objective.
35.2. The Employer must ensure the health, safety and welfare at work of all its Employees.
35.3. The Employer will also monitor and seek to improve systems and processes to ensure that both its statutory obligations and objectives of this Agreement are met.
35.4. Employees must, while at work, take reasonable care for the health and safety of people who are at the Employer's place of work and who may be affected by the Employee's acts or omissions at work.
35.5. Employees must, while at work, co-operate with the Employer or other person{s) so far as is necessary to enable compliance with any requirement under relevant legislation and associated regulations and/or codes of practice that are imposed in the interests of health, safety and welfare on the Employer or any other person.
35.6. Employees must bring to the notice of their supervisor or manager, any situation where they genuinely believe a risk of injury or damage exists.
35.7. Subject to relevant legislation and associated regulations, the Employer will continue to consult Employees on matters concerning workplace health and safety in accordance with WorkCover NSW endorsed Codes of Practice on Consultation.
35.8. The requirements under the Consultation Code of Practice will continue to apply where they are not inconsistent with, but additional to, the relevant legislation and associated regulations.
[3] On 24 September 2019, the CEPU gave notice of a dispute about the safety of the proposed new switching arrangements pursuant to the dispute resolution procedure in clause 8 of the 2018 Agreement. After the dispute was unable to be resolved at the workplace level pursuant to that procedure, the CEPU applied to the Commission on 10 October 2019 to deal with the dispute pursuant to s 739 of the FW Act. Subclause 8.4 of the 2018 Agreement authorises the Commission to arbitrate any dispute raised pursuant to the procedure if it is not first resolved by conciliation.
[4] After conciliation by another member of the Commission failed to resolve the dispute, it was referred to the Commissioner for arbitration. At the request of the parties, the matter was heard on an expedited basis and the Commissioner issued her decision on 22 November 2019. 2 In that decision, the Commissioner identified the proper question necessary to be answered to resolve the dispute as being whether rule 6 of Sydney Trains’ “Rules – PR D 78101 General Requirements for Electrical Work” entitles any relevant employee who considers that work conducted pursuant to the sequential switching trial cannot be done safely, or completed in a safe manner, to not commence or to stop the work.3 The Commissioner gave the answer “Yes” to this question, and the dispute accordingly.4
[5] Sydney Trains appealed this decision. In a decision issued on 12 March 2020, 5 the Full Bench granted permission to appeal and upheld the appeal on the basis that although the Commissioner’s answer to the question she had posed for determination was correct, the Commissioner erred in concluding that this answer resolved the dispute as required by subclause 8.4 of the 2018 Agreement.6 The Full Bench determined that the proper question necessary to be answered was: Can Sydney Trains lawfully and reasonably direct relevant Electrical Systems Supervisors and Electrical System Operators to perform work in connection with the trial of the proposed sequential switching procedure having regard to its obligation under subclause 35.2 of the Sydney Trains Enterprise Agreement 2018?7 The Full Bench remitted the determination of this question to the Commissioner.8
[6] By agreement, the Commissioner dealt with the remitted question on the basis of written submissions filed by the parties, and also received a joint note from the parties concerning the use of personal protective equipment. The Commissioner’s decision on the remitter is the decision the subject of this appeal. In that decision, the Commissioner answered “No” to the remitted question. 9 Her reasons for that answer include the following conclusions:
(1) Subclause 35.2 of the Agreement, properly construed, is not to be read as including the proviso “so far as is reasonably practicable” 10, as contended by Sydney Trains (first conclusion).
(2) Sydney Trains’ contention that subclause 35.2 is inconsistent with applicable safety obligations in the Work Health and Safety Act 2011 (NSW) (WHS Act) and the Rail Safety National Law (RSNL), 11 and therefore of no legal effect to the extent of the inconsistency by virtue of the operation of s 29(2)(b) of the FW Act, was not accepted on the basis that there is no relevant inconsistency12 (second conclusion).
(3) If the conclusion as to the construction of subclause 35.2 was wrong, the sequential switching trial proposed by Sydney Trains does not ensure safety so far as is reasonably practicable, since it would introduce new risks that do not currently attend the switching work 13 (third conclusion).
[7] Grounds 1, 2 and 3 of Sydney Trains’ appeal challenge the first, second and third conclusions respectively.
[8] It is not in contest that Sydney Trains requires permission to appeal under s 604 of the FW Act. At the hearing of the appeal, Sydney Trains conceded that if it was not successful as to either of its first two grounds of appeal (that is, if it did not succeed in demonstrating that either the first conclusion or the second conclusion was in error), then the answer to the remitted question must be “No” and the third ground of appeal would not arise for consideration. On that basis we proposed, and the parties agreed, that we should hear and determine the first two appeal grounds first, and then hear the third appeal ground at a later stage should it be necessary to do so. It is not in contest that, in respect of these two appeal grounds, the “correctness standard” of appellate review applies, 14 meaning that we should substitute our own conclusion for that of the Commissioner’s if we consider her conclusion to be incorrect.
The decision
[9] The Commissioner’s reasons for the first conclusion were as follows:
“[55] My conclusion concerning Sydney Trains’ “no legal effect” arguments is that I do not accept the submissions for Sydney Trains that cl.35.2 of the Agreement is of no legal effect. It is, I would think, clear beyond argument that in an enterprise agreement made between an employer and its employees under the FW Act properly, lawfully and validly they may agree in their bargain to something that is above and beyond legislated minima in relation to matters which are, within the meaning of s.172(1)(a) of the FW Act, (permitted) matters pertaining to the employment relationship. I need to take the matter of Sydney Trains’ submissions concerning no legal effect/invalidity no further than, for example, to note that I accept the submissions for the Union that a term of an enterprise agreement cannot diminish but may supplement rights and obligations under occupational health and safety laws. The WHS Act and/or the RSNL continue to have full force and effect and there is nothing in the obligation “to ensure health and safety of employees” in cl.35.2 of the Agreement that operates to diminish the rights and obligations under those laws. Despite the submissions for Sydney Trains, there is no relevant “inconsistency” such as to render cl.35.2 of the Agreement as having no legal effect.”
[10] In relation to the second conclusion, the Commissioner said:
“[74] However it may have been that the wording of cl.35.2 came to pass (an informed decision on the Union’s submissions or an inadvertent omission on Sydney Trains’ submissions), the words provide as they do.
[75] I prefer and accept the submissions for the Union concerning the proper construction of cl.35.2 of the Agreement and, collaterally, do not accept the submissions for Sydney Trains which contended for a contrary conclusion.
[76] On the question of construction of the Agreement concerning the effective importing of the words “so far as is reasonably practicable”, I note that that particular phrase - and that particular phrase alone - has, as it were, been cherry-picked by Sydney Trains for inherent inclusion in cl.32.5. That is, Sydney Trains does not contend that all other components of the relevant sub-sections set out in the WHS Act and the RSNL are also imported into cl.35.2, albeit Sydney Trains submitted that the Agreement generally requires cooperation with respect to WHS matters – and I accept that the latter is the case.
[77] If I am wrong about the proper construction of cl.35.2 with the result that the sub-clause must, as a matter of proper construction, be conditioned by the words “so far as is reasonably practicable”, then I say the following. What is being proposed by Sydney Trains for the field trial does not ensure safety so far as is reasonably practicable. That much is clear; I re-emphasise it is common ground that the proposed arrangements introduce two new risks (in addition to the continuation of at least two identified prevailing risks) of significant work health and safety potential consequences. Paraphrasing an observation that was made in the Sweeting Report, significant safety incidents usually involve more than one thing going wrong; minimising risk so far as is reasonably practicable is best achieved using a mixture of control measures rather than attempting to achieve an outcome by relying on only one. Moreover, it was acknowledged that such an incident, although considered statistically unlikely in the probability scheme of things in the Axess Report (albeit I did not accept such analyses as being reliably based – and that finding was not disturbed in the Appeal Decision) could have occurred in the week that the field trial was then proposed to have proceeded.”
Submissions
Sydney Trains
[11] Sydney Trains submitted in relation to its first ground of appeal that to construe subclause 35.2 as erecting a guarantee or an absolute obligation such that the existence of any risk to health and safety would render Sydney Trains in contravention of the 2018 Agreement and thereby exposed to penalties under the FW Act would self-evidently lead to absurd results and could not have been objectively intended. Such an interpretation, it submitted, did not accord with business common sense or produce a sensible industrial outcome because the materialisation of any risk to safety in Sydney Trains’ network would expose it to proceedings for breach of the 2018 Agreement notwithstanding that nobody was injured, the risk was not reasonably foreseeable or that Sydney Trains had taken all reasonably practicable steps to eliminate or minimise the risk if it was foreseeable. Accordingly, Sydney Trains submitted, it was necessary to construe subclause 35.2 as if it included the qualifying words “so far as is reasonably practicable”.
[12] It was submitted that, as a principle of construction of contracts, a literal meaning should not be applied to the words of a contract where to do so would lead to an irrational or absurd result, and a construction should be adopted to avoid that result by supplying, omitting or correcting words. Further, contracts must be construed as a whole with a view to reconciling and harmonising apparent inconsistencies in expression if possible and, in certain cases where something must have gone wrong with the language, a court may depart from the natural and ordinary meaning of the language and give effect to what, objectively, the parties intended. Sydney Trains referred in this respect to the High Court decision in Fitzgerald v Masters 15 and submitted that these principles are applicable to enterprise agreements.
[13] Sydney Trains submitted that subclause 35.2 has to be interpreted in its context, including its statutory context. A reasonable person, it submitted, would not have understood at the time the 2018 Agreement was made that the words of subclause 35.2 created an enforceable legal obligation on Sydney Trains to guarantee the safety of employees wherever they work in the business in a context where:
• the WHS Act and the RSNL required that Sydney Trains ensure health and safety only so far as is reasonably practicable; and
• the conjunctive health and safety obligation imposed on employees by subclause 35.5 operated only so far as necessary to enable Sydney Trains to comply with its statutory obligations.
[14] The following textual indicators, it was submitted, supported Sydney Trains’ construction:
• subclause 35.1 records a shared objective of the parties in relation to clause 35 in respect of the health, safety and welfare of all employees, contractors, customers and visitors;
• subclause 35.2 creates a duty, but only in respect of employees, and says nothing about the content of Sydney Trains’ duties in respect of the health, safety and welfare of contractors, customers and visitors, which are governed by s 52 of the RSNL and s 19 of the WHS Act and are qualified by reasonable practicability;
• the result of the Commissioner’s interpretation of s 35.2 is that, despite the lack of any indication in subclause 35.1 of an objective to differentiate between employees on the one hand and contractors, customers and visitors on the other, subclause 35.2 imposes a far more rigorous duty in respect of employees only for no apparent cogent reason;
• it would make no sense for subclause 35.5 to impose an obligation on employees to cooperate with Sydney Trains only so far as is necessary to allow Sydney Trains to comply with its legislative obligations if subclause 35.2 was intended to create obligations that were stricter than the legislative obligations; and
• subclauses 35.3 and 35.7 also provide a strong indication that clause 35 of the 2018 Agreement was not intended to create safety obligations exceeding the scope of those imposed under legislation.
[15] In relation to its second ground of appeal, which is advanced in the alternative to the first ground, Sydney Trains submitted that the Commissioner appears in paragraphs [54]-[55] of the decision to have misapprehended Sydney Trains’ argument, in that it was not submitted that subclause 35.2 was altogether devoid of legal effect, but rather than the subclause had no legal effect to the extent of its inconsistency with relevant State law. By parity of reasoning with jurisprudence concerning inconsistency between federal and State laws and the operation of s 109 of the Constitution, subclause 35.2 is directly inconsistent with the RSNL and the WHS Act because it:
• imposes a greater obligation on Sydney Trains than the RSNL and the WHS Act; and
• proscribes conduct by Sydney Trains that is left untouched by the RSNL and the WHS Act.
[16] Accordingly, it was submitted, s 29(2) of the FW Act operates to render subclause 35.2 pro tanto inoperative.
CEPU
[17] The CEPU submitted that permission to appeal should not be granted because the issues raised in the appeal are confined to the operations of Sydney Trains, the appeal raises no issue of general application or importance, the decision does not prevent Sydney Trains from undertaking its current switching processes or implementing new switching processes that do not expose employees to risks to their health and safety, Sydney Trains has never properly explained its reasons for wanting to implement sequential switching, and there is no sound let alone compelling basis for concluding that the decision was in error.
[18] As to the first appeal ground, the CEPU submitted that:
• the objective ascertainment of the intention of the parties is determined by the application of the principles of interpretation and not by reference to theoretical and unproven possibilities concerning breaches of subclause 35.2;
• the putative Sydney Trains employee who was asked to vote on the 2018 Agreement would fairly, sensibly and rationally have thought that, by subclause 35.2, Sydney Trains was guaranteeing their safety when they came to work;
• the context of subclause 35.2 does not give rise to the inference that the obligation to “ensure” is to be qualified, minimised, negatived or reversed;
• subclauses 35.4 and 35.5 demonstrate that where it was intended to qualify or refine duties imposed by the 2018 Agreement, this was done in clear and unambiguous terms by using words of qualification;
• the parties should be presumed to have known that the words they were choosing had been found for a very long time in both s 15 of the Occupational Health & Safety Act 1983 (NSW)(1983 OHS Act)and s 8 of the Occupational Health & Safety Act 2000 (NSW) (2000 OHS Act), and the fact that the parties used the predecessor words contextually indicates that they were intending to do something different from that which existed in s 19 of the WHS Act; and
• employees who voted on the 2018 Agreement were entitled to expect that Sydney Trains would keep to its word and guarantee their safety at work.
[19] As to the second ground of appeal, the CEPU submitted that it may be accepted that a term of an enterprise agreement that is inconsistent with a State occupational health and safety law is of no legal effect, but in this case there was no inconsistency because:
• the terms of an enterprise agreement cannot diminish but may supplement rights and obligations under occupational health and safety laws;
• in this case, the State laws continue to have full force and effect and there is nothing which diminishes rights and obligations under the WHS Act or the RSNL; and
• the WHS and the RSNL are relevantly concerned with criminal liability whereas subclause 35.2 of the 2018 Agreement is not.
[20] The CEPU also submitted that this issue was “put to bed” by the Full Bench decision in Lend Lease Project Management and Construction Australia Pty Limited v CFMEU. 16
Consideration
Permission to appeal
[21] We consider that permission to appeal should be granted because, for the reasons that follow, the appeal raises issues of sufficient importance, complexity and merit as to justify appellate consideration.
First appeal ground
[22] In relation to the first ground of appeal, we agree with the conclusion reached by the Commissioner concerning the proper construction of subclause 35.2. We do not consider that any legitimate process of construction could result in subclause 35.2 of the 2018 Agreement being read as if the words “so far as is reasonably practicable” were included. As earlier stated, Sydney Trains relied on the principle of contractual construction stated and applied in Fitzgerald v Masters 17to support its case. Assuming the applicability of that principle to the construction of enterprise agreements, we do not consider that it can support the outcome sought by Sydney Trains. The process of construction by which the terms of a contract may be “rectified”18 operates only in narrow circumstances, as was explained in the judgment of Leeming JA (with whom Payne and White JJA agreed) in Seymour Whyte Constructions Pty Ltd v Ostwald Bros Pty Ltd (In liquidation)19 as follows:
“[6] At common law, if the error is clear, and it is also clear what a reasonable person would have understood the parties to have meant, then the mistake may be corrected as a matter of construction. This is old law…
[7] Examples may be found in linguistic errors, such as “inconsistent” being read as “consistent” in Fitzgerald v Masters (1956) 95 CLR 420; [1956] HCA 53, or conceptual errors, such as “lessor” being read as “lessee” in McHugh Holdings Pty Ltd v Newtown Colonial Hotel Pty Ltd (2008) 73 NSWLR 53; [2008] NSWSC 542. The language of a contract is not read like a computer program, such that any slip is fatal.
[8] Two conditions are necessary in order to correct the contractual language in this manner: (a) that the literal meaning of the contractual words is an absurdity and (b) that it is self-evident what the objective intention is to be taken to have been: see Mainteck Services Pty Ltd v Stein Heurtey SA (2014) 89 NSWLR 633; [2014] NSWCA 184 at [117]- [119], approving National Australia Bank Ltd v Clowes [2013] NSWCA 179; 8 BFRA 600, where it was stated at [34]:
“Where both those elements are present ... ordinary processes of contractual construction displace an absurd literal meaning by a meaningful legal meaning.”
[9] Likewise, in the United Kingdom, the court must be satisfied both as to the mistake and the nature of the correction: Pink Floyd Music Ltd v EMI Records Ltd [2010] EWCA Civ 1429 at [21] (Lord Neuberger); Arnold v Britton [2015] AC 1619; [2015] UKSC 36 at [78] (Lord Hodge).
[10] The court must be satisfied of those matters to a high level of conviction. To use the language of Dixon CJ and Fullagar J in Fitzgerald v Masters at 426-427, it must be “clearly necessary in order to avoid absurdity or inconsistency”. As this Court said in Miwa Pty Ltd v Siantan Properties Pte Ltd [2011] NSWCA 297 at [18], the test of absurdity is not easily satisfied. Any question of absurdity or inconsistency must be identified according to established principles, by reference to the text of the agreement as understood in its factual and legal context: Wyllie v TarrisonPty Ltd [2007] NSWCA 184 at [46]; Newey v Westpac Banking Corporation [2014] NSWCA 319 at [85]. Courts which are asked to delete, insert or rewrite part of a contract because of what is said to be an obvious error should bear steadily in mind that imperfections and infelicities and ambiguities in contractual language commonly reflect the give and take of negotiations, or the parties’ appreciation that some obscurities are incapable of resolution. As Lord Hoffmann explained, the court does “not readily accept that people have made mistakes in formal documents”: Chartbrook Ltd v Persimmon Homes Ltd [2009] AC 1101; [2009] UKHL 38 at [23].”
[23] The above articulation of the principle was followed by the Federal Court Full Court in Commissioner of Taxation v The Trustee for the Michael Hayes Family Trust. 20
[24] We do not consider that subclause 35.2, read literally, is palpably absurd such as to found the conclusion that its drafting is attended by obvious error. The nature of the obligation imposed by subclause 35.2 is readily comprehensible, and the fact that it may be onerous in nature from Sydney Trains’ perspective is not demonstrative of absurdity. Sydney Trains’ submission that the parties are to be presumed to have knowledge of the statutory context of work, health and safety legislation applicable in NSW does not assist its position once regard is had to the industrial and statutory history underlying subclause 35.2.
[25] A provision in the same or similar terms as clause 35.2 has appeared in a number of agreements covering Sydney Trains or its predecessor entities. The first such agreement was the Rail Corporation New South Wales, Rail Infrastructure Corporation and State Rail Authority of New South Wales Enterprise Agreement 2005 (2005 Agreement) made under the Workplace Relations Act 1996 (Cth). The equivalent provision was part of clause 37 of the 2005 Agreement, which provided:
37. Occupational Health, Safety and Environment
37.1 The health and safety of all employees, contractors, visitors and customers is the primary concern of the Employer. The parties to this Agreement share an ongoing commitment to ensure and to promote the health, safety and welfare of all employees, contractors, customers and visitors, and nothing in this Agreement shall be designed or applied in ways that reduce or diminish this objective.
37.2 The Employer must ensure the health, safety and welfare at work of all of its employees.
37.3 The Employer's duty extends (without limitation) to the following:
(i) ensuring that any premises controlled by Rail Corp where the employees work (and the means of access to or exit from the premises) are safe and without risks to health,
(ii) ensuring that any plant or substance provided for use by the employees at work is safe and without risks to health when properly used,
(iii) ensuring that systems of work and the working environment of the employees are safe and without risks to health,
(iv) providing such information, instruction, training and supervision as may be necessary to ensure the employees' health and safety at work, and
(v) providing adequate facilities for the welfare of the employees at work.
37.4 The Employer also has the responsibility to ensure the health, safety and welfare of all contractors, customers and visitors, as well as ensuring a safe and healthy work environment. The Employer will also monitor and seek to improve systems and processes to ensure that both its statutory obligations and objectives of this Agreement are met.
37.5 Employees must, while at work, take reasonable care for the health and safety of people who are at the Employer's place of work and who may be affected by the employee's acts or omissions at work.
37.6 Employees must, while at work, co-operate with the Employer or other person(s) so far as is necessary to enable compliance with any requirement under the Occupational Health and Safety Act 2000 (NSW) and the regulations that are imposed in the interests of health, safety and welfare on the Employer or any other person.
37.7 They must also bring to the notice of their supervisor or manager, any situation where they genuinely believe a risk of injury or damage exists.
37.8 The Employer and its employees will continually work to improve their performance in relation to occupational health and safety through adhering to the Occupational Health and Safety Act 2000 and the Occupational Health and Safety Regulations 2001 as amended from time to time, and any other applicable legislation.
[26] Subclauses 37.1, 37.2, 37.5 and 37.7 of the 2005 Agreement are, for all relevant purposes, drafted in the same terms as subclauses 35.1. 35.2, 35.4 and 35.6 of the 2018 Agreement respectively. The second sentence of subclause 37.4 of the 2005 Agreement is in the same terms as subclause 35.3 of the 2018 Agreement. Subclause 37.6 of the 2005 Agreement is in the same terms as subclause 35.5 of the 2018 Agreement save that it specifically refers to the 2000 OHS Act and the regulations made thereunder.
[27] At the time that the 2005 Agreement was made, the 2000 OHS Act was in operation and the WHS Act and the RSNL had not yet been legislated for. Section 8 of the 2000 OHS Act provided:
(1) Employees
An employer must ensure the health, safety and welfare at work of all the employees of the employer.
That duty extends (without limitation) to the following:
(a) ensuring that any premises controlled by the employer where the employees work (and the means of access to or exit from the premises) are safe and without risks to health,
(b) ensuring that any plant or substance provided for use by the employees at work is safe and without risks to health when properly used,
(c) ensuring that systems of work and the working environment of the employees are safe and without risks to health,
(d) providing such information, instruction, training and supervision as may be necessary to ensure the employees' health and safety at work,
(e) providing adequate facilities for the welfare of the employees at work.
[28] It may be observed that subclauses 37.2 and 37.3 of the 2005 Agreement, in all relevant respects, reproduce s 8(1) of the 2000 OHS Act. No inference is available other than that the parties to the 2005 Agreement deliberately decided to reflect the primary duty of employers under the 2000 OHS Act in the terms of their agreement.
[29] Additionally, s 20 of the 2000 OHS Act provided:
(1) An employee must, while at work, take reasonable care for the health and safety of people who are at the employee’s place of work and who may be affected by the employee’s acts or omissions at work.
(2) An employee must, while at work, co-operate with his or her employer or other person so far as is necessary to enable compliance with any requirement under this Act or the regulations that is imposed in the interests of health, safety and welfare on the employer or any other person.
Maximum penalty: (a) in the case of a previous offender—45 penalty units, or (b) in any other case—30 penalty units
[30] Apart from the penalty provision, the above provisions are reflected in subclauses 37.5 and 37.6 of the 2005 Agreement, and again it can only be inferred that it was deliberately decided that the health and safety obligations of employees under the agreement should be expressed in relevantly the same terms as under the 2000 OHS Act.
[31] Section 28 of the 2000 OHS Act provided that it was a defence to any proceedings against a person for an offence against a provision of the Act (which necessarily included ss 8 and 20) that it was not reasonably practicable for the person to comply with the provision, or that the commission of the offence was due to causes over which the person had no control and against the happening of which it was impracticable for the person to make provision. Although it was probably not possible for the 2005 Agreement to provide for a defence against any proceedings for contravention of clause 37, it may be observed that there was no modification of the obligations of the employer or employees in clause 37to reflect the concept underlying the s 28 defence. Again, it can be inferred that this was a deliberate decision of the parties.
[32] The next agreement was the RailCorp Enterprise Agreement 2010 (2010 Agreement), which was made under the FW Act. Clause 38 of the 2010 Agreement was in all relevant respects the same as clause 35 of the 2018 Agreement. It is apparent that the parties who negotiated the 2010 Agreement deliberately effected modifications to the terms of clause 37 of the 2005 Agreement, but retained the core obligations of employers and employees.
[33] Effective from 7 June 2011, the Occupational Health and Safety Amendment Act 2011(NSW)amended the 2000 OHS Act to qualify the employer duties in s 8 by adding the qualification “so far as is reasonably practicable”, qualified the employee duty in s 20(2) by inserting “reasonably” before necessary, and omitting the s 28 defence.
[34] The WHS Act commenced on 1 January 2012. Under the WHS Act, the primary duty applicable to employers is contained in s 19, which relevantly provides:
19 Primary duty of care
(1) A person conducting a business or undertaking must ensure, so far as is reasonably practicable, the health and safety of--
(a) workers engaged, or caused to be engaged by the person, and
(b) workers whose activities in carrying out work are influenced or directed by the person,
while the workers are at work in the business or undertaking.
(2) A person conducting a business or undertaking must ensure, so far as is reasonably practicable, that the health and safety of other persons is not put at risk from work carried out as part of the conduct of the business or undertaking.
(3) Without limiting subsections (1) and (2), a person conducting a business or undertaking must ensure, so far as is reasonably practicable--
(a) the provision and maintenance of a work environment without risks to health and safety, and
(b) the provision and maintenance of safe plant and structures, and
(c) the provision and maintenance of safe systems of work, and
(d) the safe use, handling, and storage of plant, structures and substances, and
(e) the provision of adequate facilities for the welfare at work of workers in carrying out work for the business or undertaking, including ensuring access to those facilities, and
(f) the provision of any information, training, instruction or supervision that is necessary to protect all persons from risks to their health and safety arising from work carried out as part of the conduct of the business or undertaking, and
(g) that the health of workers and the conditions at the workplace are monitored for the purpose of preventing illness or injury of workers arising from the conduct of the business or undertaking.
[35] Section 18 defines what is “reasonably practicable” as follows:
18 What is "reasonably practicable" in ensuring health and safety
In this Act, "reasonably practicable" , in relation to a duty to ensure health and safety, means that which is, or was at a particular time, reasonably able to be done in relation to ensuring health and safety, taking into account and weighing up all relevant matters including—
(a) the likelihood of the hazard or the risk concerned occurring, and
(b) the degree of harm that might result from the hazard or the risk, and
(c) what the person concerned knows, or ought reasonably to know, about--
(i) the hazard or the risk, and
(ii) ways of eliminating or minimising the risk, and
(d) the availability and suitability of ways to eliminate or minimise the risk, and
(e) after assessing the extent of the risk and the available ways of eliminating or minimising the risk, the cost associated with available ways of eliminating or minimising the risk, including whether the cost is grossly disproportionate to the risk.
[36] The duties of employees under the WHS Act are dealt with in s 28:
28 Duties of workers
While at work, a worker must--
(a) take reasonable care for his or her own health and safety, and
(b) take reasonable care that his or her acts or omissions do not adversely affect the health and safety of other persons, and
(c) comply, so far as the worker is reasonably able, with any reasonable instruction that is given by the person conducting the business or undertaking to allow the person to comply with this Act, and
(d) co-operate with any reasonable policy or procedure of the person conducting the business or undertaking relating to health or safety at the workplace that has been notified to workers.
[37] The next agreement following these legislative changes was the Sydney Trains Enterprise Agreement 2014 (2014 Agreement). Clause 35 of the 2014 Agreement was for all relevant purposes in the same terms as clause 38 of the 2010 Agreement and clause 35 of the 2018 Agreement. We infer that a deliberate decision was made by those who negotiated the 2014 Agreement to retain the occupational health and safety provision in the same terms notwithstanding the significant legislative changes which we have outlined affecting the duties of both the employer and employees. This inference is supported by the Form F17 declaration which accompanied Sydney Trains’ application for approval of the 2014 Agreement. That declaration annexed the document issued by Sydney Trains to employees explaining the terms of the proposed agreement before they voted on it. It identified the specific changes to the 2014 Agreement compared to the 2010 Agreement, and otherwise represented (under the name of Sydney Trains’ Chief Executive) as a benefit of the agreement that “…most conditions in the proposed EA are staying the same…” and “Whilst we have made some changes because of Government policy and legal rulings, all other conditions in the Sydney Trains Enterprise Agreement 2014 are the same as existing conditions”. There was no indication in the explanatory document that, notwithstanding that no change had been made to the text of the occupational health and safety clause, it had in some way changed in its meaning and effect.
[38] Clause 35 of the 2018 Agreement retains clause 35 of the 2014 Agreement. The declaration accompanying the application for approval of the 2018 Agreement again annexed the explanatory document issued by Sydney Trains to employees before they voted to approve the agreement, and this represented that, apart from specifically identified changes, “All benefits and entitlements from the Enterprise Agreement 2014 are the same or better”. There was likewise no representation that there was any change to the meaning or effect of clause 35.
[39] This historical context renders untenable the contention that the terms of clause 35.2 of the 2018 Agreement do not reflect the intention of those who made the agreement or contain a mistake in their drafting. In summary, it is apparent that over a series of agreements, including the 2018 Agreement, there has been a deliberate choice to adopt and retain formulations of the occupational health and safety obligations of both the employer and employees derived from the 2000 OHS Act in the form that it was in 2005 and not to adjust these in line with legislative changes. The allegedly absurd inconsistencies in the various subclauses of clause 35 of the 2018 Agreement identified in Sydney Trains’ submissions become wholly explicable once the extent to which they are derived from the 2005 legislative scheme is understood. For example, the proposition that it is obviously absurd and unintended that subclause 35.2 imposes a stricter obligation on the employer than the current legislative obligations, and that subclause 35.5 requires employees to cooperate only to the extent necessary to achieve compliance with the legislative welfare obligations and does not relate to the stricter obligation in subclause 35.2, dissipates once it is understood that subclause 35.2 in its original form in the 2005 Agreement reflected the then-applicable legislative obligation. To the extent a disharmonious gap between the obligation of employees under subclause 35.5 and the employer’s obligation under subclause 35.2 may be perceived, this is a result of the decision to retain the 2005 formulation of the employer’s duty in clause 35.2 notwithstanding the legislative changes which occurred in 2011. It is not unintended nor a mistake. Further, the employer’s duty in subclause 35.2 cannot be said to be onerous to a manifestly absurd degree when it simply repeats the legislative obligation which applied to employers in NSW generally until 2011 under s 8(1) of the 2000 OHS Act (and under s 15 of the 1983 OHS Act before that). The defence under s 28 of the 2000 OHS Act was not relevant unless proceedings for contravention were commenced against the employer.
[40] Sydney Trains’ proposed construction of subclause 35.2 also does not meet the requirement articulated in Seymour Whyte Constructions that the correction which is said to be necessary to the text to give it its intended meaning be self-evident. Sydney Trains’ proposed addition of the words “so far as is reasonably practicable” to reflect the current legislative obligation begs several questions, including:
• If those who made the 2018 Agreement intended that subclause 35.2 reflect the current legislative obligation on the employer, why would it not be read as including the entirety of the employer’s obligation under s 19 of the WHS Act, including s 19(3)?
• Does the qualifier “so far as is reasonably practicable” carry with it the definition of that expression in s 18 of the WHS Act?
• If subclause 35.2 was intended to reflect the current legislative obligation upon the employer, should subclauses 35.4 and 35.5 also be read as if corrected to reflect the current obligation on employees in s 28 of the WHS Act?
[41] These questions show that the proposed corrective construction is far from being self-evident.
[42] For the above reasons, we do not consider that the first ground of appeal can be sustained.
Second ground of appeal
[43] The rejection of the first ground of appeal makes it necessary to consider the second, which is founded on s 29 of the FW Act. Section 29 provides:
29 Interaction of modern awards and enterprise agreements with State and Territory laws
(1) A modern award or enterprise agreements prevails over a law of a State or Territory, to the extent of any inconsistency.
(2) Despite subsection (1), a term of a modern award or enterprise agreement applies subject to the following:
(a) any law covered by subsection 27(1A);
(b) any law of a State or Territory so far as it is covered by paragraph 27(1)(b), (c) or (d).
…
(3) Despite subsection (2), a term of a modern award or enterprise agreement does not apply subject to a law of a State or Territory that is prescribed by the regulations as a law to which modern awards and enterprise agreements are not subject.
(legislative note omitted)
[44] It is not in dispute, and we accept, that:
(1) The WHS Act and the RSNL are laws of a State (NSW) that are covered by paragraph 27(1)(c) of the FW Act because they deal with a “non-excluded matter”, namely occupational health and safety (see s 27(2)(c)).
(2) No applicable regulation has been made pursuant to s 29(3).
[45] Accordingly, subclause 35.2 of the 2018 Agreement (and indeed the entirety of clause 35) apply subject to the WHS Act and the RSNL.
[46] The parties’ submissions proceeded on the basis of an analysis as to whether there is any “inconsistency” between subclause 35.2 and the WHS Act or the RSNL for the purpose of s 29(2). However, the word “inconsistency” does not appear in s 29(2), and its adoption as the criterion appears to be borrowed from s 29(1). Section 29(1) is a provision which confirms that it is the intention of the federal legislature that awards and agreements made under the FW Act are to have paramountcy over State and Territory law. 21 Its use of the terminology of inconsistency reflects s 109 of the Constitution, which provides that when a State law is “inconsistent” with a Commonwealth law, the latter shall prevail and the former is invalid to the extent of the inconsistency. It also reflects that a similar doctrine of inconsistency is applied to resolve conflicts between Commonwealth and Territory laws.22
[47] In Lend Lease Project Management and Construction Australia Pty Limited v CFMEU 23and Armacell Australia Pty Ltd and others,24 the operation of s 29(2) was likewise said to operate by reference to inconsistency between the federal instrument and a law of the type referred to in the subsection. Although it may not ultimately make much difference, the operative expression in s 29(2) is actually that the federal instrument operates “subject to” the relevant law. The meaning of the expression “subject to” (as used in s 51 of the Constitution) was discussed in the judgment of Gaudron J in Newcrest Mining (WA) Ltd v The Commonwealth25as follows (footnotes included in text):
“The use of the expression ‘subject to this Constitution’ does not itself mean that there is always conflict between s 51 and s 122. But it does mean that, where conflict exists, s 122 must prevail. As Megarry J pointed out in C & J Clark Ltd v Inland Revenue Commissioners, [1973] 1 WLR 905 at 911; [1973] 2 All ER 513 at 520. ‘[w]here there is no clash, the phrase does nothing: if there is collision, the phrase shows what is to prevail’. (In Maclean Shire Council v Nungera Co-operative Society Ltd (1995) 86 LGERA 430 at 433, Handley JA, with whose judgment Priestley and Sheller JJA agreed, cited C & J Clark Ltd v Inland Revenue Commissioners for the proposition that the expression ‘subject to’ indicates which of two or more provisions is the dominant one in the event of any conflict’. The remarks of Cooke J in Harding v Coburn [1976] 2 NZLR 577 at 582 are to the same effect. His Honour pointed out that the use of the expression ‘subject to’ is ‘a standard way of making clear which provision is to govern in the event of conflict. It throws no light, however, on whether there would in truth be a conflict without it.’) In S v Marwane (1982 (3) SA 717 (A).), the Appellate Division of the Supreme Court of South Africa had to construe the words ‘[s]ubject to the provisions of this Constitution’. Miller JA, giving judgment for the majority, said (S v Marwane 1982 (3) SA 717 (A) at 747-748):
‘The purpose of the phrase “subject to” in such a context is to establish what is dominant and what subordinate or subservient; that to which a provision is `subject', is dominant -- in case of conflict it prevails over that which is subject to it. Certainly, in the field of legislation, the phrase has this clear and accepted connotation. When the legislator wishes to convey that that which is now being enacted is not to prevail in circumstances where it conflicts, or is inconsistent or incompatible, with a specified other enactment, it very frequently, if not almost invariably, qualifies such enactment by the method of declaring it to be `subject to' the other specified one.’”
[48] As the above passage makes clear, the expression “subject to” is not very useful in identifying the precise situations to which it is to apply, although the quoted judgment of Miller JA refers to conflict, inconsistency or incompatibility. In the analogous context of the application of s 109 of the Constitution, relevant inconsistency was described in the judgment of Kiefel CJ and Bell, Keane, Nettle and Gordon JJ in Work Health Authority v Outback Ballooning Pty Ltd 26in the following way (footnotes omitted):
“[105] …Inconsistency arises whenever there is a "real conflict" between two laws. Real conflict occurs whenever a State or Territory law "would alter, impair or detract from" the Commonwealth law. This verbal formula concerning altering, impairing, or detracting has sometimes been limited to instances described as "direct inconsistency", with a different category of conflict said to be one of "indirect inconsistency". This distinction can mislead, especially in this context. A better approach, without attempting to abolish concepts that have a long-established usage in both case law and legislation, is to accept that both direct and indirect inconsistency involve the State or Territory law altering, impairing, or detracting from the Commonwealth law but to acknowledge that the descriptions of direct and indirect inconsistency are simply attempts to describe different ways that this can occur.”
[49] Another analogous context is the situation in which conflicting statutory provisions give rise to the possibility that there is an implied repeal of the former provision by the latter. In that context, what is required to conclude that there has been an implied repeal is “repugnancy” in the provisions “in the sense that they contain conflicting commands which cannot both be obeyed, or produce irreconcilable legal rights or obligations.” 27
[50] That the qualification “so far as is reasonably practicable” in s 19(1) in the WHS Act upon the duty of a person conducting a business or undertaking to ensure the health and safety of relevant workers is of fundamental importance to the legislative scheme is demonstrable in two ways. First, the legislative history we have earlier outlined, whereby the 2000 OHS Act was amended in 2011 to add this qualification to the employer’s duty, and the further replacement of the 2000 OHS Act by the WHS Act soon after, suggests that the qualification of the employer’s duty in this way represented a policy decision by the NSW legislature of some significance. Second, the qualification is expressly referred to as part of the object of the WHS Act. Section 3(1) of the WHS Act relevantly provides:
(1) The main object of this Act is to provide for a balanced and nationally consistent framework to secure the health and safety of workers and workplaces by--
(a) protecting workers and other persons against harm to their health, safety and welfare through the elimination or minimisation of risks arising from work or from specified types of substances or plant, and
. . .
[51] Section 3(2) then provides (underlining added):
(2) In furthering subsection (1) (a), regard must be had to the principle that workers and other persons should be given the highest level of protection against harm to their health, safety and welfare from hazards and risks arising from work or from specified types of substances or plant as is reasonably practicable.
[52] It is apparent, we consider, that the qualification “as is reasonably practicable” in s 3(2) is intended to be a significant element of the “balanced” framework referred to in s 3(1).
[53] Compliance by an employer with its primary duty under s 19 of the WHS Act would necessarily require it, first, to identify any hazards or risks to the health and safety of employees and other relevant workers at the workplace and, second, to undertake an assessment of what may reasonably and practicably be done to eliminate or minimise those hazards and risks consistent with s 18. However, in our view, compliance with clause 35.2 of the 2018 Agreement would effectively negate the second step of compliance with s 19 of the WHS Act, since an absolute duty to ensure the health and safety of employees at work would eschew notions of what is reasonably practicable. The point may be illustrated this way. If a potential hazard or risk to safety is identified at the workplace which has an extremely low likelihood of occurrence, the degree of harm that might result from the hazard or risk is very minor, and there are available and suitable methods of eliminating or minimising the hazard or risk, compliance with the employer’s duty under s 19 of the WHS Act would involve, pursuant to s 18(e), an assessment of the cost associated with the available ways of eliminating or minimising the risk, including whether the cost is grossly disproportionate to the risk. That may mean, in some circumstances, that an available way to eliminate or minimise a risk to health or safety need not be taken by the employer under s 19 because its cost would be grossly disproportionate to the risk and other available mitigations. However, this result could not pertain under subclause 35.2 of the 2018 Agreement because of the unqualified nature of the duty it imposes.
[54] As earlier outlined, the CEPU defends the conclusion reached by the Commission in paragraph [55] of the decision by reference to the following passage in the Full Bench decision in Lend Lease:
“[36] …The Explanatory Memorandum for the Fair Work Bill 2008 explained that the intended effect of s.29(2) was (relevantly) that an enterprise agreement ‘cannot diminish, but may supplement, rights and obligations under these laws’. This is consistent with the ordinary meaning of s.29(2).”
[55] We do not accept that subclause 35.2 simply supplements the WHS Act in a way that leaves it to operate “with full force and effect”, as the Commissioner found. Clause 35.2 cannot reasonably be characterised as simply a discrete obligation which sits on top of the obligation in s 19 of the WHS Act. Rather, for the reasons we have given, it operates to render nugatory a fundamental feature and object of the WHS Act, namely that the employer’s obligation to eliminate or minimise risks to health and safety is to be assessed by reference to what is reasonably practicable for it to do, as defined in s 18. In that respect, subclause 35.2 alters and impairs an essential component of the WHS Act as it applies to Sydney Trains, and establishes a health and safety obligation which is irreconcilable with that in s 19 of the WHS Act.
[56] Clause 35.2 is therefore inconsistent and incompatible with s 19 of the WHS Act to the extent that it does not qualify the employer’s obligation by reference to what is “reasonably practicable”, as defined in s 18 of the WHS Act. It therefore operates subject to s 19, and is of no effect to the extent of the identified inconsistency or incompatibility.
[57] The same conclusion applies with respect to the RSNL. The primary safety duty of a rail transport operator in s 52 of the RSNL is likewise qualified by the expression “so far as is reasonably practicable”, which is defined in s 47 in the same way as in s 18 of the WHS Act.
[58] It must be noted that we have identified inconsistency/incompatibility with the WHS Act and the RSNL to the extent necessary to determine the second ground of this appeal. We observe that the inconsistency/incompatibility may arguably go beyond this in respect of both the employer’s and employees’ duties under clause 35 of the 2018 Agreement.
[59] For completeness, we reject the CEPU’s submission that no inconsistency or incompatibility can arise because the WHS Act and the RSNL are concerned with criminal liability and clause 35 of the 2018 Agreement is not. The fact that contravention of s 19 of the WHS Act or s 52 of the RSNL may give rise to criminal liability, whereas contravention of clause 35.2 will only give rise to civil liability under the FW Act, does not diminish the fundamental incompatibility in the nature of the obligations they impose.
[60] We therefore uphold Sydney Trains’ second ground of appeal.
[61] It is necessary to observe that the contention underlying Sydney Trains’ second ground of appeal was never raised or adverted to in Sydney Trains’ first appeal. Had it been raised, it is unlikely that the Full Bench would have remitted to the Commissioner for further consideration the question that it did.
[62] The matter will be listed for programming concerning the hearing and determination of the third ground of appeal. We note that there may be a question as to whether that ground of appeal properly arises for consideration and determination by the Commission having regard to our conclusion that subclause 35.2 of the 2018 Agreement does not have effect to the extent of the inconsistency and incompatibility with the WHS Act and the RSNL we have identified.
VICE PRESIDENT
Appearances:
Mr S Meehan of counsel for the appellant.
Mr R Reitano of counsel for the respondent.
Hearing details:
2020.
Sydney (via video-link).
16 December.
Printed by authority of the Commonwealth Government Printer
<PR726914>
1 [2020] FWC 3727
2 [2019] FWC 7871
3 Ibid at [47], [49]
4 Ibid at [57]
5 [2020] FWCFB 1315
6 Ibid at [19]
7 Ibid at [26]
8 Ibid
9 [2020] FWC 3727 at [82]
10 Ibid at [74]-[77]
11 Adopted as NSW law by the Rail Safety (Adoption of National Law) Act 2012 (NSW)
12 [2020] FWC 3727 at [54]-[55]
13 Ibid at [77]
14 See Minister for Immigration and Border Protection v SZVFW [2018] HCA 30, 264 CLR 541 at [35]-[50] per Gageler J
15 [1956] HCA 53, 95 CLR 420
16 [2015] FWCFB 1889
17 [1956] HCA 53, 95 CLR 420
18 Noting that this is not to be confused with the equitable doctrine of rectification of contracts: see James Adam Pty Ltd v Fobeza Pty Ltd [2020] NSWCA 311at [2] per Bell P and [3] per MacFarlan JA
19 [2019] NSWCA 11, 99 NSWLR 317
20 [2019] FCAFC 226 at [2], [4], [36]-[37]
21 See Robinson (T. A.) and Sons Pty. Ltd. v. Haylor [1957] HCA 76, 97 CLR 177 at 182
22 University of Wollongong v Metwally [1984] HCA 74, 158 CLR 447 at 464
23 [2015] FWCFB 1889 at [36]
24 [2010] FWAFB 9985, 202 IR 38 at [30]
25 [1997] HCA 38, 190 CLR 513 at 580-581
26 [2019] HCA 2, 266 CLR 428
27 Minister for Immigration and Multicultural and Indigenous Affairs v Nystrom [2006] HCA 50, 228 CLR 556 at [2] per Gleeson CJ
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