The Australian Workers' Union v APT Am Employment Pty Limited

[2014] FWC 279

[2014] FWC 279

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.739—Dispute resolution

The Australian Workers’ Union
v
APT AM Employment Pty Limited
(C2012/6266)

COMMISSIONER GREGORY MELBOURNE, 15 JANUARY 2014

Alleged dispute concerning clauses 4, 6, and 9 of the APA Network Agreement (Victoria) 2011.

Introduction

[1] Several long-standing employees at APT AM Employment Pty Ltd (APT) working in the Networks Division have until recently had the use of vehicles provided by their employer. These have been long-standing arrangements, but described in more recent times as the provision of Job Facility Vehicles (JFV’s). Each of the employees previously worked for Origin Energy, a business acquired by APT in 2007, however, their employment actually commenced with the Gas and Fuel Corporation prior to the provision of those services being privatised.

[2] APT subsequently sought to standardise its approach to the use of company owned/leased vehicles. The first step in this process was to change the amount of contribution made by employees for any private use of a JFV. A salary sacrifice contribution scale of payments was introduced in place of a small payment employees had previously been required to make. In late 2008 the policy was revised again and specific criteria established to decide whether to allocate a JFV to a particular position.

[3] Transitional arrangements were also put in place for employees who had been provided with a vehicle in the past. These provided for payment of an allowance to those employees in response to the additional salary sacrifice amounts they were now required to pay under the new “private use” component of the Policy.

[4] APT has since decided several of the positions occupied by the employees no longer warrant allocation of a JFV under the revised criteria. The vehicles have now been surrendered by those employees, although APT continued to pay the allowance for an additional period as part of the implementation of these changes. APT does not consider the existing enterprise Agreement applies in these circumstances, or constrains it from making these changes.

[5] The AWU represents the employees and has had a long-standing involvement in negotiations about their employment conditions. It claims the provision of a JFV to the employees is a long standing over award entitlement. It also claims the employees have an ongoing entitlement to payment of the allowance paid to them since 2009. It believes the current enterprise Agreement acts to preserve such arrangements. It also takes issue with the way in which APT defines “business travel” for the purpose of determining eligibility for a JFV.

The Issues to Be Decided

• The initial issue to be determined is whether the terms of the existing enterprise Agreement incorporate the Motor Vehicle Policy concerning the provision of JFV’s to employees?



• This requires, in particular, consideration of sub clause 4.3 of the Agreement, and the nature of the entitlement created by the Motor Vehicle Policy. It also requires consideration of the additional allowance provided to the employees as part of the transition to the new arrangements.



• If the Policy is incorporated into the Agreement is APT able to change the Policy? This concerns, in particular, the criteria used to determine if a JFV should be allocated to a position.



• If the Agreement does not incorporate the Policy is that the end of the matter, or are there other issues that arise for consideration?

The Evidence and Submissions

[6] The AWU submits, firstly, that the JFV arrangements are a contractual entitlement. The employees transferred from Origin Energy Ltd to APT in June, 2007. They were each provided with “Offers of Employment” at that time. They are expressed as setting out the terms and conditions of employment with APT and to be read in conjunction with the current enterprise Agreement, the APA Network Agreement (Victoria) 2011. In its submission the fact that reference to the Motor Vehicle Policy is included in the Offers of Employment indicates the employees were allocated the JFV’s as part of their overall remuneration package and are, accordingly, part of their conditions of employment. Clause 1 of the Offer states in part “Limited PrivUse Contrib -Your current Job Facility Vehicle arrangements with Origin Energy continue to apply where applicable to you.” 1 Clause 18 continues to indicate:

“Where your remuneration includes a motor vehicle component you will be bound by the terms of APT AM’s motor vehicle policy.

Where your position requires you to utilise a company owned motor vehicle to perform your role you will abide by the Job Facility and Tool of Trade Motor Vehicle policies.” 2

[7] The AWU also submits this situation is accepted and acknowledged by both Mr Edwin de Prince and Mr Jeff Robbins, who both gave evidence on behalf of ATP. In this context it refers, particularly, to the following extracts from the transcript:

“Those contracts provide for the continuation of the employee’s current job facility vehicle arrangements, don’t they? --- [Mr Robbins] That was the agreement when they transferred.” 3

and

“Does it appear to you that it would be a term of his contract of employment, that being his contract of employment, motor vehicle conditions been described in his terms and conditions of employment? --- [Mr de Prince] Yes.” 4

[8] The AWU submits in the absence of an express provision permitting APT to unilaterally vary the employees’ contractual entitlements it is not permitted to do so. Until changes to the policy were implemented in 2009 the employees had not been required to satisfy any eligibility criteria, nor provide any additional justification in order to have continued access to a JFV. It submits this provides further support for the view the JFV’s were allocated as part of the employees’ overall remuneration package, and formed an integral part of their conditions of employment.

[9] However, the AWU acknowledges that in 2009 the JFV arrangements were varied. These changes concerned, in particular, new criteria governing how they were to be allocated to a particular position, and new arrangements concerning the private use of the vehicles. They also involved payment of an allowance in compensation for the introduction of the greater private use contribution by employees. These arrangements were negotiated and agreed upon with the involvement of the AWU. They were subsequently confirmed in a letter from APT, which was signed in acknowledgement by each employee.

[10] The AWU submits these agreed arrangements are maintained under the terms of the enterprise Agreement that covers the employees and APT. It submits this situation existed since the 2007 Agreement was negotiated and continued to be part of the agreements put in place since that time. The current Agreement was concluded in 2011 and states in sub clause 4.3:

“Any existing over award payments and conditions of employment shall continue to apply as though they were an express term of the Agreement.” 5

[11] The AWU relies on what it submits are “the well-established rules of interpretation of statutory instruments” 6 to state, “the allowance and the policy are incorporated into the 2011 agreement by sub clause 4.3 as over award payments and conditions of employment.”7

[12] The AWU also points to various authorities in support of its submission “that the industrial usage of the term “over award” and other similar terms connotes a wide range of possible payments, benefits and conditions of employment that fall within the scope of the overall award term of the agreements, consistent with established principles industrial instruments should not be interpreted narrowly or pedantically.” 8 In its submission the allowance and the policy are “not only contractual entitlements, but also entitlements under the 2011 Agreement.”9 It also submits the allowance is a permanent payment offered by APT in exchange for the variations to the previous entitlements in 2009 and “it must be inferred that the agreed outcome Allowance is fixed in perpetuity.”

[13] In its submission the changes agreed to by the employees in the documentation signed by them in 2009, at the time payment of the allowance commenced, only concern the changes going to the arrangements about private use of the vehicles. In its submission “all other arrangements, including the ongoing allocation of JFV’s, continue to apply independently of the policy” 10 and further “As such, the nature of compensation as alleged by APT, considered in the context of the documentation as a whole, leads to the conclusion that the references to acceptance of the conditions of the policy are confined to acceptance of the conditions of private use.”11

[14] The AWU next submits APT’s decision to exclude home to work travel from the definition of “business travel” for the purpose of determining eligibility for a JFV, is a fundamental change to the employee’s conditions of employment and, as such, a contravention of the no extra claims clause in the Agreement. It continues to submit that in any case the employees continue to meet the JFV eligibility requirements as they exist under the current policy prescription. It refers to various evidence in regard to each employee in support of this submission and maintains each continues to satisfy the “significant business travel” and/or “business travel several times per week” eligibility requirements. It continues to submit:

“The relevant consideration should not be whether the relevant manager believes the role performed by the employee will not meet the requirements in the future, based on as yet and implemented changes to the employee’s role, but rather, whether the role that has been performed by the employee satisfies the eligibility criteria. Such is consistent with the application of the policy for the purposes of private use contributions.” 12

[15] It also submits the policy has not been applied in a just or reasonable manner because the final “decision maker” in terms of the decision to end the allocation of vehicles to the employees, Mr Andrew Foley, did not consult with the employees before confirming that decision

[16] APT submits that after acquiring Origin Energy in 2007 it implemented changes to its Motor Vehicle Policy in an endeavour to put in place a common approach across the organisation. The policy was again revised in late 2008 to establish new criteria to determine when a JFV should be allocated to a position. This included specific provisions to deal with those employees already provided with vehicles, including transitional arrangements to offset any disadvantage suffered by them in moving to the new arrangements. It submits section 4.8 of the Policy provided current vehicle usage arrangements would remain in place during a transitional period until the current vehicle lease expired, after which the new policy approach would apply.

[17] These changes were implemented in the first half of 2009. APT agreed to pay an over award allowance to each employee as compensation for the new requirement to pay the increased salary sacrifice amount. In its submission this allowance was only to be paid for the remaining life of each allocated JFV.

[18] The leases applying to each JFV allocated to the employees expired in July 2012. Each employee subsequently requested the vehicles be replaced given the amount of business travel involved in carrying out their roles. However, in September 2012 the employees were informed APT did not consider they were eligible for a vehicle under the existing policy. APT subsequently requested the vehicles be returned. It indicated in subsequent negotiations in considering the employees’ eligibility or otherwise it did not consider travel between work and home was “business travel”. In February 2013 it wrote to each employee indicating the vehicles in their possession should be returned. It also indicated it would continue paying the allowance until September 2013, despite the fact the employees were no longer be required to make the salary sacrifice contributions.

[19] APT submits the Motor Vehicle Policy is not part of the arrangements regulated by or falling under the Enterprise Agreement. It notes the policy is administered by the Procurement Department, rather than the HR department. In any case the application of the Policy is neutral in its effect in terms of the benefits received by employees because they are required to salary sacrifice an amount equivalent to their private use. It submits, “for this reason, clause 4.3 of the APA Network Agreement (Victoria) 2011 cannot operate to incorporate the policy as an over award condition of employment.” It also submits the starting point for determining the dispute is to determine the proper application of sub clause 4.3. In its submission the Policy and any obligation to pay the allowance cannot be considered as falling within that sub clause. However, it submits in the alternative it is no longer required to pay the allowance in any case because the employees are no longer deemed eligible for a JFV under the current application of the Policy, and so are no longer making the salary sacrifice private use contributions.

[20] It also submits this question needs to be determined objectively and evidence of past conduct is of limited relevance. It submits there is no evidence of common understanding the policy was to be encompassed within the scope of sub clause 4.3 and points to the evidence of Edwin de Prince in this context. In its submission there must be two things in place before sub clause 4.3 can have any application:

• there must be “an unregistered, collective agreement that applies to employees covered by the Agreement; and



• the terms of that agreement “are intended to apply as terms of the Agreement.” 13

[21] In its submission clause 4 of the Agreement in its construction is not intended to deal with individual contractual arrangements but with other kinds of collective instruments.

[22] It also submits that, in any case, when the 2007 and 2009 agreements were made the then Workplace Relations Act 1996 (Cth) contained provisions in section 355 which prevented enterprise agreements from “calling up collectively negotiated side agreements” 14. It continues to submit “Given that clause 4.3 of the Agreement is a “product of history” the founding moment of the drafting of that clause did not, and could not, incorporate side agreements relating to JFV arrangements.”15

[23] It also submits that “business commonsense” 16 must intend the only terms that can be encompassed by sub clause 4.3 are those collectively negotiated, rather than those contained in individual contracts of employment. Consequently, as the policy cannot be implied to be a term of the Agreement, a dispute about its application cannot be pressed or determined under the Agreement’s dispute settling procedure. In any case the Policy does not intend to treat travel between work and home as business travel. It is instead dealing with work-related travel, which requires a nexus between the travel undertaken and performing the work of the position. The Policy does not specifically define “business travel”, however, it does require a focus on the travel requirements of a particular position, and the work required to be performed in that position, when making decisions about whether to allocate a JFV. It also highlights other provisions in the Policy that support this conclusion.

[24] APT also submits its approach to revoke access to vehicles in the case of these employees “is a reasonable application of the criteria.” 17 In its submission the current Policy does not provide any entitlement to a JFV for any employee. The entitlement instead turns on the requirements of the particular position occupied by the employee. However, it did extend the period the employees could retain use of the vehicles by eight months and continued to pay the allowance for a further seven months. The employees are also free at any time to make fresh application under the Policy for access to a JFV if they believe their circumstances make them eligible under the criteria.

[25] Finally, section 4.8 of the Policy and the Conditions of Use Acknowledgement Form signed by the employees make it clear payment of the allowance was only ever intended to be a transitional arrangement to apply for the balance of the existing leases. It submits:

“For as long as APT was obliged to pay the allowance, clause 4.3 of the agreement operated to incorporate the allowance scheme into the Agreement as an over award payment. However, once the leasing agreements relating to the JFV’s expired in mid 2012 the requirement to pay the allowance ceased.

Therefore, it is entirely appropriate that APT cease paying the allowance to the employees. Clause 4.3 of the agreement does not create or preserve an entitlement to receive the allowance where transitional arrangements have ceased. Moreover, there is no further need or obligation to compensate the employees because they are no longer paying the salary sacrifice amounts for the private use benefit of the JFV.” 18

[26] In this context it also points to the so-called “Conditions of Use Acknowledgement Form” 19 signed by each employee at the time the changed private use arrangements were introduced. Clause 4.8 of the Policy agreed to by the employees at that time makes clear the transitional arrangements would cease when the lease of the current vehicle expired, or the employee’s job role changed. It submits “the terms of the arrangements are clear and unambiguous, and the Commission should not refer to extrinsic material to ascertain their meaning.”20 In its submission the application of the Policy, which came into effect in 2009 under the new arrangements, was an entirely legitimate exercise of managerial prerogative by APT, and implemented in a way that was appropriate and reasonable. In this context it relies on what occurred between July 2012, when the leases applying to each allocated JFV expired, and the decision in January 2013 that the employees no longer met the criteria for having a JFV allocated to their position given the current requirements of their roles. It also advised the employees it would continue paying the allowance until October 2013, despite the fact they were no longer required to make salary sacrifice contributions in respect of private use of the vehicles after January, 2013.

[27] APT also submits the AWU has sought to unreasonably extend the scope of the dispute by seeking to encompass the issue of eligibility of the employees for a JFV. In its submission this was not part of the original application and, in any case, there is not enough evidence before the Commission to enable it to decide that matter.

[28] It also submits it has not unilaterally changed the terms of the policy and its application of it has been a legitimate exercise of managerial discretion or prerogative. The decision to bring to an end the allocation of a JFV to the employees was only taken after a considered and consultative process.

Consideration

[29] Both parties made submissions about the approach to be adopted by the Commission in interpreting the terms of an enterprise agreement and there is little dispute as to the principles that apply. The authorities and the approach to be applied are well known and well established. Where the terms of an industrial instrument are clear and unambiguous then it should be interpreted in accordance with that clear and unambiguous meaning. In seeking to interpret an enterprise agreement regard must first be had to the natural and ordinary meaning of its words. The AWU referred to the decision of Madgwick J. in Kucks v CSR Limited 21in this context. It dealt particularly with the interpretation of an award provision. His Honour stated:

“It is trite that narrow or pedantic approaches to the interpretation of an award are misplaced. The search is for the meaning intended by the framer(s) of the document, bearing in mind that such framer(s) were likely of a practical bent of mind: they may well have been more concerned with expressing an intention in ways likely to have been understood in the context of the relevant industry and industrial relations environment than with legal niceties or jargon. Thus, for example, it is justifiable to read the award to give effect to its evident purposes, having regard to such context, despite mere inconsistencies or infelicities of expression which might tend to some other reading. And meanings which avoid inconvenience or injustice may reasonably be strained for. For reasons such as these, expressions which have been held in the case of other instruments to have been used to mean particular things may sensibly and properly be held to mean something else in the document at hand.

But the task remains one of interpreting a document produced by another or others. A court is not free to give effect to some anteriorly derived notion of what would be fair or just, regardless of what has been written into the award. Deciding what an existing award means is a process quite different from deciding, as an arbitral body does, what might fairly be put into an award. So, for example, ordinary or well understood words are in general to be accorded their ordinary or usual meaning.” 22

[30] Whilst made in the context of an award the approach in that decision has been adopted in relation to the construction of industrial agreements. For example, in City of Wanneroo v Holmes 23 French J. observed that in interpreting industrial instruments “fractured and illogical prose may be met by a generous and liberal approach to construction,”24 and the starting point should be a consideration of the natural and ordinary meaning of the words used. I have adopted the approach of these authorities, and those cited by the parties, in considering the terms of the Agreement that are relevant to the determination of this matter.

[31] Both parties made reference to the Agreements that were in place prior to the current Agreement, particularly those approved by the Tribunal in 2007 and 2009. Based on the authorities referred to above I am satisfied those references and those submissions are of limited relevance to the determination of this matter. It is instead the terms of the current Agreement, the APA Network Agreement (Victoria) 2011, and its application in the current circumstances, that should be the particular focus.

[32] Clause 4 “Application” of the Agreement describes the employees intended to be covered by the Agreement and the relationship between the Agreement and the awards that would otherwise cover those employees. It also acts to incorporate “existing over award terms and conditions of employment.” Clause 4 states in full:

“4. Application

4.1 This agreement shall apply to all employees of the company within the state of Victoria, and in Albury and Wagga Wagga, New South Wales, who are covered within the classification contained in Schedule 2 of this agreement.

4.2 This agreement is intended to be a complete recording of the employee conditions of employment, incorporating the terms of the Gas Industry Award 2010 and Professional Employees Award 2010. To the extent of any inconsistency between the terms of the body of the Agreement and the terms of the Award, the terms of the agreement shall take precedence to the extent of any inconsistency.

4.3 Any existing over award terms and conditions of employment shall continue to apply as though they were an express term of the agreement.” 25

[33] APT submits at the outset that sub clause 4.3 can only have application to collective over award arrangements because the construction of the clause does not indicate an intention to deal with “individual contractual arrangements, but with other kinds of collective instruments.” It is acknowledged in response that the Agreement is a collective one. However, it will have application to the individual employees covered by it in a range of different ways depending, for example, on their particular classification, the hours they work, when they take leave, when they become entitled to various allowances, or when they might be counselled and disciplined. Clause 8 also allows for an Individual Flexibility Agreement to be entered into between APT and an individual employee subject to the provisions contained in that clause.

[34] This situation does not lend support to the view sub clause 4.3 is only intended to encompass collective over award arrangements. Nor is there anything in the plain and ordinary meaning of the words in the sub clause to support that submission.

[35] Over award terms and conditions of employment are typically additional entitlements provided to an individual employee or a group of employees. They may be a remnant of different employment arrangements that existed at some point in the past, or have been provided to an employee(s) as a reward for or acknowledgement of particular abilities or superior work performance. In some cases they are provided as an inducement to an employee to join an organisation, or negotiated and agreed to upon commencement. It is more likely to be the exception rather than the rule that they exist as a collective arrangements applying to all employees. For all of these reasons I am not satisfied that sub clause 4.3 is to be constrained or limited in the way APT contends.

[36] I now turn to consider whether the existing Agreement and sub clause 4.3, in particular, can be said to incorporate the Policy concerning the provision of JFV’s to employees. Each of the employees has been with APT and its predecessors for an extended period. Their period of employment in each case, in fact, dates back to the period prior to privatisation of gas supply and servicing. The evidence of each was that they were provided with a vehicle at some point, typically as reward for or acknowledgement of their work performance. Their evidence indicates those arrangements were not reviewed on a regular basis. A vehicle was simply provided and a replacement supplied in its place after a particular period of time had elapsed. A small contribution was also required to be made in respect of their private use of vehicles.

[37] In 2007 APT purchased the business from Origin Energy and subsequently made fresh offers of employment to the employees. Those offers contained similar terms in each case as set out, for example, in the offer made to Gary Saunders and contained in exhibit GGS – 1 of his witness statement. Each offer indicated at the outset that it should be read in conjunction with the current enterprise Agreement being, at that time, the Origin Energy Agreement (Victoria) 2005. The preamble continued to indicate “APT AM will be bound by Origin Energy Victoria Agreement in the same way as Origin Energy, until the Origin Energy Victoria Agreement is terminated, revoked or replaced.” The Offer document continued to deal with an array of employment arrangements, including at paragraph 18:

18. Motor Vehicle

Where your remuneration includes a Motor Vehicle component you will be bound by the terms of APT AM’s Motor Vehicle policy.

Where your position requires you to utilise a company owned motor vehicle to perform your role you will abide by the Job Facility and Tool of Trade Motor Vehicle policies, and any applicable provisions outlined in the Origin Energy Victoria Agreement. 26

[38] Each offer also included an “Offer of Employment Acknowledgement and Acceptance” at the conclusion which was to be completed and returned to APT in each case.

[39] Following its acquisition of the business APT also sought to standardise the approach to the provision of company owned/leased vehicles across the organisation. This occurred over a period of time and involved, in particular, changes to the contributions made by employees in respect of their private use of the vehicle, and the establishment of specific criteria to be used to decide if a JFV should be allocated to a particular position. The implementation of these changes was accompanied by negotiations with the AWU on behalf of the employees. The evidence indicates these were particularly concerned with the implementation of what Mr Robbins evidence describes as “transitional arrangements” 27 concerning the changes to the contribution provided by employees in respect of their private use of the vehicles. These negotiations acknowledged the employees were going to be impacted financially by those changes and led to agreement by APT it would pay an allowance to the employees in compensation for the requirement to pay the new additional salary sacrifice amount.

[40] In June/July APT wrote to each employee detailing these new arrangements and confirming payment of the proposed new allowance. Those letters indicated in part, “As you are remunerated under an EBA this compensation will be paid as a fixed “Over Award Allowance” that will appear separately on your payslip. This allowance will also be included for superannuation and overtime calculation purposes.” 28

[41] The letter continued to indicate; “As already communicated to you in our correspondence 30 June, 2009 a range of your past vehicle usage arrangements have been grandfathered. No further compensation adjustments will be payable to you in respect of any JFV now or in the future.” 29

[42] Each of those letters also contained an acknowledgement at the end, which was subsequently signed by each employee, stating:

“I .... fully understand and accept that the amount shown above is a “one-off” compensation amount for changes to the conditions for private use of an APA Group JFV and that no further compensation adjustment is payable to me in regard to any JFV now or in the future. I understand that my salary will be increased by the allowance amount shown above.” 30

[43] At around the same time each employee was also provided with a so-called “Conditions of Use Acknowledgement Form.” It contained the following “Employee Declaration:”

“I have read and understand the APA Group Motor Vehicle Policy. I agree to comply with the provisions of the policy at all times. I authorise APA to deduct the salary sacrifice amount shown above, or any subsequent amounts determined by APA for Private Use of a JFV from my salary. I also understand that the salary sacrifice amounts shown above are subject to review and change at the discretion of APA.” 31

[44] An additional explanatory note was also attached to the Form and again ended with a signed acknowledgement by the employee that he/she had read and understood the attached notes. It included the following explanatory notation:

“APA will compensate the difference between your current private use payment and Option 2 ($4,500 salary sacrifice). This will be achieved by way of an “Over Award Allowance”. This approach has been chosen to preserve the salary rates as contained within the EBA or other salary records and not confuse the salary levels with other payments.” 32

[45] The document concludes with the following explanation headed “Over Award Allowance:”

“The salary sacrifice amount (e.g. $4, 33500 pa) will be fixed for the life of the vehicle (notionally 3 years until mid 2012). On replacement of this vehicle, the amount will be reviewed, which may result in an increase or decrease in the fixed amount. The over award allowance will be included for superannuation, leave and over time calculation purposes. No further compensation adjustments will be payable to you in respect of any JFV now or in the future, post assigning this document unless specially agreed between APA Group and the employee.”

[46] It is acknowledged that arrangements regarding the provision of vehicles to the employees are long-standing and were for a significant period unchanged. However, they were changed in 2009 and the employees agreed to be bound by those changed arrangements and the prevailing Motor Vehicle Policy in place at that time. I am accordingly satisfied it is those arrangements that now need to be considered in terms of whether they can be considered to be an over award arrangement in the context of sub clause 4.3, and that anything in place prior to that time is not relevant to the determination of this matter.

[47] APT submits the Policy is not part of the arrangements covered by the Agreement. It notes it is administered by the Procurement Department, rather than the HR Department and submits this supports the view the arrangement should not be considered to be an employment entitlement. It submits JFV’s are allocated to a position, rather than an individual employee. It also submits the Policy does not, in any case, provide any benefit to the employees. It is instead “neutral” in terms of its impact because any private use benefit is offset by the salary sacrifice contribution required to be made under the Policy, depending on the amount of private use, (although this submission does not take account of the allowance provided to the employees in compensation for the introduction of the salary sacrifice contribution.)

[48] The AWU takes a much broader view of what is encompassed by the reference in sub clause 4.3 “to any existing over award payments and conditions of employment.” It also relies on previous decisions of this Tribunal in support of this submission.

[49] It refers, firstly, to the decision in MasterFoods Australia New Zealand – Ballarat Certified Agreement 2004 34 in which SDP Watson was required to consider a provision in that Agreement which stated:

5.3. Further, existing over award payments and conditions of employment that could otherwise have formed part of this Agreement shall continue to apply as if they were a term of this Agreement except where the terms of this Agreement expressly provide otherwise.

[50] The question at issue in that matter was whether a Handbook and Performance Review Document commonly provided to employees covered by the Agreement was to be applied as if it was a term of the Agreement on the basis it represented an “over award ... condition of employment. “ If so, a question then arose about whether the failure to conduct an appraisal in accordance with the Policy Document represented a dispute over the application of the Agreement.

[51] SDP Watson concluded:

“[52] Clause 5.3 of the Agreement incorporates over award payments and conditions of employment that would otherwise have formed part of the Agreement, to apply as if they were a term of the Agreement, except where the terms of this Agreement expressly provide otherwise. In my view, this would, absent any express exclusion, incorporate into the Agreement any rights or obligations in the form of over award payments and conditions of employment reflected in the Handbook and Performance Review Document. No exclusion of such matters is evident within the Agreement. The review processes and support policies within the Handbook, to which MasterFoods is committed does, in my view, constitute an over award condition, incorporated into the Agreement.” 35

[52] In the present matter there are two aspects of the arrangements concerning motor vehicles that the AWU contends are over award arrangements for the purposes of sub clause 4.3, namely the provision of a vehicle in accordance with the Policy, and the allowance provided in compensation for the changes to the private use arrangements. I am satisfied, having particular regard to the decision of SDP Watson, that in a similar way both the provision of a vehicle under the Policy and the payment of the allowance can be considered to be over award terms and conditions of employment. The evidence of the employees is that each provides a benefit to them over and above the terms and conditions contained in the Agreement, despite APT’s submission they provided a neutral benefit. For example, home to work travel is not considered to be “private use.” This provides an obvious benefit to the employees and without the JFV they have to find other means of getting to and from work as the evidence of Mr Wong indicates and confirms.

[53] There is also nothing in the Agreement to suggest they are intended to be excluded from being considered to be over award arrangements. It is also significant that the allowance created to compensate the employees for the changes in private use contribution is actually described by APT as an over award (or as it perhaps should more properly be described, an over Agreement) condition of employment. The evidence of Mr Conte and Mr Wall also indicates that superannuation contributions were paid in respect of this additional allowance amount. Mr Saunders also indicated in his evidence he understood the allowance was to be treated as an increase in salary.

[54] I am satisfied this evidence lends further support to the view the provision of a vehicle to an employee in accordance with the Motor Vehicle Policy put in place for by APT is an over award condition of employment in the context of sub clause 4.3 of the Agreement. This conclusion is reinforced by the fact that when the value of that entitlement was undermined by the change in private use arrangements APT acted to introduce further compensation in the form of the additional allowance to maintain in whole or part the value of that entitlement.

[55] However, having come to this conclusion it does not necessarily follow that it is “set in stone,” or that APT cannot change or even discontinue the arrangement providing such changes occur in accordance with the Policy. This is similar to the conclusion VP Watson came to in the other decision referred to by the AWU in the matter of Kangan Batman Institute of TAFE PACCT Staff Certified Agreement, 2005 36 when he found the provision of a motor vehicle to an employee was a contractual entitlement between the employer and employee, but this did not of itself prevent the employer from discontinuing that arrangement, providing it did so in accordance with the terms of the contract.

[56] In the present matter the existing over award conditions of employment have been created by and derive from the terms of the Motor Vehicle Policy, and the associated arrangements negotiated and put in place in conjunction with that Policy. I see nothing that prevents APT from making changes to those arrangements in accordance with the Policy, even if those changes mean an employee loses an entitlement to a vehicle. In this context it is noted that the employees committed in writing to observe the terms of the Motor Vehicle Policy in place from time to time, although it is also acknowledged that what they actually committed to is an issue in this matter.

[57] The current version of the Policy is contained in annexure JR 4 to the witness statement of Jeff Robbins. It sets out at paragraph 4.6 the criteria that dictate the allocation of a Job Facility Vehicle. At paragraph 4.8 it states under the heading, “Employees Currently Provided with Company Vehicles”:

“Subject to relevant employment agreements, employees who currently have motor vehicles will retain their current vehicle usage arrangements, until either their vehicle’s lease expires or becomes due for replacement (in the case of company vehicles) or where an employee’s job role changes. At that time they will transition to this policy and, subject to any job or salary adjustments that may be required, previous arrangements they had regarding the usage of company or private vehicles will cease.

Where agreement on salary arrangements and the transition to the policy cannot be reached, previous arrangements may be “transitional grandfathered” for the employee for a transitional period for the life of their next a vehicle or until 30 June 2014. These “transitional grandfathered” arrangements must be documented and approved by the Group Manager Operations.” 37

[58] Notwithstanding its principal position the AWU also submits the policy has not been applied in a just or reasonable manner and the Commission should accordingly act to review the decisions taken by APT. In this context it notes, in particular, that Mr Andrew Foley, APT’s General Manager, Victorian Networks, did not speak directly with the employees involved before finally confirming the decision that their positions would no longer be entitled to a JFV allocation. However, the evidence of Mr Robbins sets out what transpired following expiration of the leases on the existing JFV’s in July 2012. This included –

• completion and submission of a Motor Vehicle Request Form by the employees;



• meetings between the employees and John Ferguson, then General Manager Networks;



• meetings and correspondence between APT representatives and the AWU;



• a further invitation to the employees to submit additional information in support of their JFV allocation request; and



• further consideration of that material by Mr Foley before a final decision was taken in January 2013.

[59] The evidence of Mr Foley also indicates his decision was motivated by two factors, in particular. Firstly, he did not consider the employees needed to make as many site and other visits as the proposals submitted by them indicated they intended to make. Secondly, he was concerned from a work, health and safety standpoint to limit, as far as possible, the amount of time and distance employees travelled by road. I have no reason to doubt the legitimacy of these views and, in any case, it is not my role to be providing advice to APT about how to conduct its business operations, or to “second-guess” the management decisions of senior managers at APT. I am accordingly satisfied the evidence indicates APT has gone through a considered process in reviewing the employee’s requests for provision of a JFV in their current roles. I am also satisfied it has decided for legitimate reasons to make changes to the way in which those roles are carried out.

[60] A further issue arises in terms of the application of the Policy and this concerns the definition of “significant business travel” in the Policy in terms of eligibility for a JFV. The AWU submits the definition includes travel between an employee’s home and the depot at which they are based. It acknowledges the Policy is silent on the issue but points, firstly, to the evidence of Mr Heath and Mr Conte, in particular, who stated senior APT managers, including Mr de Prinse and Mr Fitzgerald made representations at meetings with the employees indicating home to work travel would count for the purposes of “business travel.”

[61] Mr Fitzgerald was not called as a witness, however, the evidence of Mr de Prinse at PN 1040 was “I can’t recall saying it. And I can’t recall being in a meeting where I made a statement like that.” He also indicated at PN997, “Well, I don’t recall ever making a sweeping statement that travel to and from work to home would be the norm for everyone right across the business. This was just a transmission specific.” He also indicated he was not able to say whether Mr Fitzgerald had made any such representations but he “Could have, yes.”

[62] Mr Heath suggested in his evidence that the Policy indicates “private use” does not include travel between home and work and therefore such travel must, by implication, be “business travel”. The Policy does indicate at sub clause 4.7.3 “the kilometres private use ranges above do not include travel between home and work.” However, it does not contain a definition of “business travel” that might have assisted in definitively resolving this issue.

[63] I am not satisfied that the reference in sub clause 4.7.3 to travel between home and work not counting in the “Kilometres Private Use Ranges” means it follows that travel between home and work must be business travel. The definition is an important one because it determines, in part, the amount of salary sacrifice contribution an employee allocated a JFV is required to contribute. However, I am not satisfied that as a consequence travel between home and work must be constituted as “business travel.” For example, another explanation could be that travel can be viewed as falling into three categories – private use travel, business travel and home to work travel.

[64] I am then left with the witness evidence. I have no reason to doubt the evidence of Mr Heath and Mr Conte about how they understood home to work travel was to be constituted. However, equally I have no reason to doubt the evidence of Mr de Prinse in terms of his understandings about what information was relayed to the employees. Against this background I am satisfied the Policy document provides the best evidence about what was intended. It is not conclusive but does not confirm that home to work travel is intended to be considered as “business travel”. This is not surprising as the natural and ordinary meaning of what is considered to be “business travel” would not generally encompass travel from home to work. I am accordingly satisfied the Policy does not intend that travel between home and work is necessarily to be considered to be “business travel”.

[65] I have not considered the submissions by APT about whether it is appropriate for the Commission to review decisions taken by APT in regards the application of the Motor Vehicle Policy to an individual employee because of the conclusions I have come to above. In this context APT did not appear to be questioning the Commission’s jurisdiction to review such decisions, and certainly the Dispute Resolution clause in the Agreement (clause 9) is broad ranging referring to “Disputes pertaining to the relationship between the employer and employee, deductions from wages, the operation of the Agreement, or relating to the National Employment Standards....” However, regardless of this issue I am not persuaded by the submissions of the AWU that a review is warranted because the Policy has not been applied in a fair or reasonable manner, or because it has been applied in breach of its terms.

[66] The final matter for consideration concerns the allowance. The AWU submits “it must be inferred that the agreed outcome allowance is fixed in perpetuity.” I am not satisfied that this conclusion follows. The allowance was negotiated and agreed to in compensation for the increased contribution required from employees in respect of the private use of the JFV allocated to them. At the time that the employees were provided with the Conditions of Use Acknowledgement Form they were also provided with additional explanatory notes which indicated in part, “APT will compensate the difference between your current private vehicle use payment and Option 2 ($4500 salary sacrifice).” The Employee Declaration signed by each employee also stated in part, “I authorise APA to deduct the salary sacrifice amount shown above, or any subsequent amounts determined by APA for Private Use of a JFV from my salary. I also understand that the salary sacrifice amounts shown above are subject to review and change at the discretion of APA.” This provides confirmation the allowance was being provided as compensation for the increased private use contribution the employees were required to make and that there is a direct connection between both. Accordingly, once the obligation to make the additional salary sacrifice contribution came to an end it follows the obligation to pay the allowance is also at an end.

[67] This accords with the general understanding of how and why an allowance is provided to an employee. It is provided to offset some disability or disadvantage, or in some cases to acknowledge additional responsibility or skills required. However, if those circumstances no longer exist or come to an end, so too does the obligation to pay the allowance. It is acknowledged that the payment of the allowance was treated like a salary increase. It was taken into account for superannuation purposes and the payment of overtime. I also accept the evidence of the employees, including Gary Saunders, that their understanding was that it was to be treated as an increase in salary and to continue to be paid in the AWU’s words, “in perpetuity.” However, I find no documentary or other evidence to confirm this is what was intended. As indicated, such a conclusion is at odds with the normal rationale for payment of an allowance. I am accordingly satisfied payment of the allowance was only ever intended as a short-term transitional arrangement while the employees continued to pay the increased salary sacrifice contribution amount. It follows that if an employee is no longer being provided with a JFV, and therefore no longer paying the salary sacrifice private use contribution, then the rationale for payment of the allowance is also at an end.

[68]
I note in conclusion that I have determined this matter based on the submissions I consider relevant to the issues involved. The conclusions I have come to are not intended to reflect adversely on the AWU, in bringing the application, or on the employees involved. Indeed, the evidence and submissions indicates the employees are long-standing and loyal individuals who have given dedicated service to the business over an extended period categorised in more recent times by ongoing change and restructure. The period since 2007 is a further example of this continuing process.

COMMISSIONER

Appearances:

Mr P Reilly for the Applicant.

Mr C Power of Holding Redlich for the Respondent.

Hearing details:

Melbourne:

2013

September 25 and October 7

 1   Witness statement of G Saunders at annexure GGS-1

 2   Ibid at paragraph 18

 3   Transcript at paragraph PN774

 4   Transcript at paragraph PN1085

 5   APA Network Agreement (Victoria) 2011

 6   Submissions of the AWU at paragraph 41

 7   Ibid at paragraph 42

 8   Ibid at paragraph 62

 9   Ibid at paragraph 65

 10   Final submissions of the AWU at paragraph 27

 11   Ibid at paragraph 28

 12   Ibid at paragraph 37

 13   Final Submissions of the Respondent at paragraph 16

 14   Respondent’s submissions at paragraph 22

 15   Ibid at paragraph 22

 16   Ibid at paragraph 23

 17   Ibid at paragraph 34

 18   Ibid at paragraphs 38 and 39

 19   Exhibit AWU2 at annexure CPC-2

 20   Final Submissions of the Respondent at paragraph 29

 21 (1996) 66 IR 82

 22   Ibid at 184

 23 [2006] FCA 813

 24   Ibid at 57

 25   APA Network Agreement (Victoria) 2011

 26   Witness statement of G Saunders at annexure GGS-1

 27   Exhibit APT1 at paragraph 5

 28   Exhibit AWU2 at annexure CPC-3

 29   Ibid at annexure CPC-3

 30   Ibid at annexure CPC-3

 31   Ibid at annexure CPC-2

 32   Ibid at annexure CPC-2

 33   Ibid at annexure CPC-2

 34   [2007] AIRC 132

 35   Ibid at 52

 36   [2007] AIRC 579

 37   Exhibit APT 1 at Annexure JR4

Printed by authority of the Commonwealth Government Printer

<Price code C, PR546706>