Total AMS Pty Ltd T/A TAMS Group
[2020] FWC 55
•7 JANUARY 2020
| [2020] FWC 55 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.217 - Application to vary an agreement to remove an ambiguity or uncertainty
Total AMS Pty Ltd T/A TAMS Group
(AG2019/3211)
MIPEC GLADSTONE MARINE ENTERPRISE AGREEMENT 2015
Port authorities | |
DEPUTY PRESIDENT BEAUMONT | PERTH, 7 JANUARY 2020 |
Application for variation of the MIPEC Gladstone Marine Enterprise Agreement 2015 - Application dismissed.
[1] Total AMS Pty Ltd T/A TAMS Group (Applicant) has made an application under s 217 of the Fair Work Act 2009 (Cth) (Act) to vary the MIPEC Gladstone Marine Enterprise Agreement 2015 (Agreement) to remove ambiguity and uncertainty.
[2] Having held several conferences with the Applicant, the Applicant was minded to advance the matter. The Applicant was directed to file submissions and any other documentary material it wished to rely upon in support of the application. It was agreed the application would then be determined on the papers without the need for a hearing.
[3] The application proposes a variation to clause 7.4 of the Agreement. That clause states:
The Company shall provide all fixed term and full-time employees with an Income Protection Insurance Scheme. The Income Protection Insurance Scheme shall be provided through a Company nominated insurance provider under the terms offered by the insurance provider from time to time. The insurance premium for providing the Income Protection Scheme shall not exceed 1.4% (excluding GST and Stamp Duty) of their employees’ gross earnings for the premiums for such insurance during the life of the Agreement.
In the event the claims experience requires a review of the insurance plan, the adjustment will be to the plan and not to the Company’s insurance premium.
[4] The position of the Applicant is that there is an ambiguity in clause 7.4 because the clause does not detail what the Company should do ‘if the insurance premium exceeds 1.4% of the employee’s gross earnings.’ In order that the ambiguity identified is removed, the Applicant proposes the following variation:
If the insurance premium for providing Income Protection exceeds 1.4% (excluding GST and Stamp Duty) of their employee’s gross earnings, the employer is not required to provide the employee with income protection insurance coverage under this clause.
Legislative framework and principles
[5] Section 217 of the Act provides the following:
Variation of an enterprise agreement to remove an ambiguity or uncertainty
(1) The FWC may vary an enterprise agreement to remove an ambiguity or uncertainty on application by any of the following:
(a) one or more of the employers covered by the agreement;
(b) an employee covered by the agreement;
(c) an employee organisation covered by the agreement.
(2) If the FWC varies the enterprise agreement, the variation operates from the day specified in the decision to vary the agreement.
[6] In this application, the Applicant is the employer covered by the Agreement and therefore has standing to make the application.
[7] The text of s 217 indicates that the discretion to vary an agreement may only be exercised if first the Commission is satisfied that there is ambiguity or uncertainty in the agreement. The principles that are to be applied in considering an application under s 217 may be shortly stated:
a) the Commission should approach an application in two stages. First, as a jurisdictional pre-requisite, it should identify whether there is an uncertainty or ambiguity. Secondly, if an ambiguity or uncertainty is identified, it should consider whether to exercise its discretion to vary the agreement the subject of the application;1
b) the process of identifying ambiguity or uncertainty involves making an objective assessment of the words used in the provisions under examination. The words used are construed having regard to their context;2
c) the Commission will generally err on the side of finding an ambiguity or uncertainty where there are rival contentions advanced and an arguable case is made out for more than one contention;3
d) however, the Commission must make a positive finding that an agreement, that is the subject of an application under s 217, is ambiguous or uncertain. Prima facie satisfaction of ambiguity or uncertainty is not sufficient;4
e) the mere existence of rival contentions as to the proper construction of the terms of an agreement will also be an insufficient basis to conclude the existence of ambiguity or uncertainty. Such contentions may be self-serving. The task is to make an objective judgment as to whether the wording of a provision is susceptible to more than one meaning;5 and
f) once an ambiguity or uncertainty has been identified, in exercising the discretion whether to vary the agreement, the Commission is to have regard to the mutual intention of the parties at the time the agreement was made.6
Ambiguity or uncertainty
[8] Section 217 of the Act clearly empowers the Commission to vary an enterprise agreement for the purpose of removing ambiguity or uncertainty. To determine whether the Agreement is ambiguous or uncertain requires the making of an objective judgement about whether, on a proper construction of the relevant provision, the wording of the provision is susceptible to more than one meaning.7
[9] The Applicant has reiterated several times in its submissions that clause 7.4 is susceptible to more than one meaning but does not illuminate what the rival contentions are. It has solely premised its case on there being a ‘lack of clarity in relation to the events that would occur if the insurance premiums exceed 1.4%’. Therefore, the ‘offending’ part of clause 7.4 would appear to be that which reads:
The insurance premium for providing the Income Protection Scheme shall not exceed 1.4% (excluding GST and Stamp Duty) of their employees’ gross earnings for the premiums for such insurance during the life of the Agreement.
[10] By way of background, the Applicant submits that MIPEC Pty Ltd was sold to the Applicant in January 2019 and the Agreement transferred with the business. The Applicant is now faced with circumstances whereby the income protection insurance premiums for the year 2019-2020 will exceed ‘1.4% of the employee’s gross earnings’. I note that the Applicant refers to an ‘employee’s gross earnings’ rather than that of its ‘employees’ as a group. However, there is no material before me to suggest anything turns on this point.
[11] Having considered clause 7.4 in the context of the Agreement as a whole, and particularly the ‘offending’ part, there is not in my view a conclusion to be reached that the wording of the provision is susceptible to more than one meaning.
[12] Clause 7.4 of the Agreement is not ambiguous. It is not susceptible of more than one legitimate interpretation. While the Agreement does not detail what is to occur should the insurance premiums exceed 1.4% of the employees’ gross earnings, this does not in turn mean that the content of clause 7.4 is ambiguous or uncertain. Clearly those covered, or to be covered by the Agreement, did not contemplate what should occur in such circumstances and therefore the potential scenario was left unaddressed. But again, the omission does not render clause 7.4 as having an equivocal, doubtful or double meaning. The words are plain in their terms, as is what is provided in the clause. Further, it is not the case that the clause set out to make provision for a particular circumstance, such as when the premium exceeded 1.4% of the employees’ gross earnings, but then failed to do so, thereby giving rise to a resultant uncertainty.
[13] If it were the case that there was an ambiguity or uncertainty, and therefore the power was enlivened to exercise a discretion to vary the Agreement, I do not consider that the variation proposed by the Applicant would succeed. Its proposed variation seeks to interpolate words that would remove the obligation to provide an ‘Income Protection Insurance Scheme’ in a specified circumstance.
[14] Once an ambiguity or uncertainty is identified, the Commission is empowered to remove it by varying an enterprise agreement in a manner which gives effect to the mutual intentions of the parties at the time the Agreement was made.8 In that regard, I would not be limited by the form of the application before me.
[15] However, I observe that the Applicant has submitted that, when the Agreement was negotiated, the Applicant was not a party to the negotiations. It therefore cannot shed light on the intentions regarding the provision of the clause. Further, the Applicant submits that there are no current employees who were party to the Agreement negotiations. In circumstances where the intent of the ‘parties’ is unable to be objectively ascertained from the context of negotiations, and where the Applicant has provided no submissions regarding why its proposed variation should succeed or be preferred, there would be an understandable reticence to remove in its entirety an entitlement that clearly had been bargained for.
Conclusion
Clause 7.4 of the Agreement is not in my view ambiguous or uncertain. Nor does the proposed variation appear to be an appropriate way to clarify the matter. Accordingly, for these reasons the application is dismissed.
DEPUTY PRESIDENT
On the papers
Printed by authority of the Commonwealth Government Printer
<AE417108 PR715729 >
1 Re Tenix Defence Systems Pty Limited Certified Agreement 2001 - 2004 [2002] AIRC PR917548 [28], [32] and [35] (‘Tenix Decision’)
2 Ibid [29].
3 Ibid [31].
4 Ibid [35]; Colnvest Ltd v Visionstream Pty Ltd (2004) 134 IR 43 [57].
5 Re Civil Construction Corporation Enterprise Agreement [2002] AIRC PR939346; SJ Higgins Pty Ltd and Others v CFMEU [2001] AIRC PR903843; Re CFMEU Appeal [1999]AIRC Print R2431.
6 Tenix Decision [32].
7 Re Victorian Public Transport Corporation [1995] AIRC Print M2454; SJ Higgins Pty Ltd and Others v CFMEU [2001] AIRC PR903843; Tenix Decision [49].
8 Tenix Decision [32].
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