UGL Engineering Pty Ltd v Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia
[2024] FWC 2642
•25 SEPTEMBER 2024
[2024] FWC 2642
The attached document replaces the document previously issued with the above code on 25 September 2024, to amend minor typographical and referencing errors.
Associate to Deputy President Dobson
Dated 27 September 2024
| [2024] FWC 2642 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.739—Dispute resolution
UGL Engineering Pty Ltd
v
Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia
(C2024/3261)
| DEPUTY PRESIDENT DOBSON | BRISBANE, 25 SEPTEMBER 2024 |
Dispute interpretation of Agreement – Compliance Provisions – Wages and Conditions - Agreed Questions Answered
This Decision concerns an application made on 22 May 2024 by UGL Engineering Pty Ltd (UGL/ the Applicant) pursuant to s.739 of the Fair Work Act 2009 (the Act) for the Fair Work Commission (the Commission) to deal with a dispute under the dispute resolution procedure in the UGL Engineering Pty Ltd Queensland Power Transmission Enterprise Agreement 2022-2024 (the Agreement). The Respondent is the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (ETU/the Respondent).
The agreed questions for determination are as follows:
Question 1 (UGL):
In respect of the UGL Engineering Pty Ltd Queensland Power Transmission Enterprise Agreement 2022-2024 (the Agreement):
Does the obligation in clause 2.5.5 extend beyond UGL ensuring that employees of contractors that are engaged to do work that is covered by the agreement, are paid at least the rates of pay and allowances under the Agreement that would be applicable if they were Employees?
Question 2 (ETU):
Upon the proper construction of the Agreement:
1. Does the expression “wages and conditions” in clause 2.5.5 include:
(a) ordinary hours of work (clause 5.1)?
(b) Redundancy payments (clause 2.8.11.1)?
(c) Income insurance (clause 3.12)?
2. Is the expression “rates of pay and allowance” in clause 2.5.6 limited to the wage rates arising from Appendix C?
3. Does compliance with clause 2.5.6 satisfied both of clauses 2.5.5 and 2.5.6?
Legislation
The Act provides for the Commission to deal with disputes in relation to disputes under enterprise agreement dispute settlement terms. Section 739 of the Act states:
“739 Disputes dealt with by the FWC
(1) This section applies if a term referred to in section 738 requires or allows the FWC to deal with a dispute.
(2) The FWC must not deal with a dispute to the extent that the dispute is about whether an employer had reasonable business grounds under subsection 65(5) or 76(4), unless:
(a) the parties have agreed in a contract of employment, enterprise agreement or other written agreement to the FWC dealing with the matter; or
(b) a determination under the Public Service Act 1999 authorises the FWC to deal with the matter.
Note: This does not prevent the FWC from dealing with a dispute relating to a term of an enterprise agreement that has the same (or substantially the same) effect as subsection 65(5) or 76(4) (see also subsection 55(5)).
(3) In dealing with a dispute, the FWC must not exercise any powers limited by the term.
(4) If, in accordance with the term, the parties have agreed that the FWC may arbitrate (however described) the dispute, the FWC may do so.
Note: The FWC may also deal with a dispute by mediation or conciliation, or by making a recommendation or expressing an opinion (see subsection 595(2)).
(5) Despite subsection (4), the FWC must not make a decision that is inconsistent with this Act, or a fair work instrument that applies to the parties.
(6) The FWC may deal with a dispute only on application by a party to the dispute.”
The matter was allocated to my Chambers on 22 May 2024. I issued directions for the filing of material on 23 May 2024. The parties requested, by consent that the directions be amended, and I instructed my Chambers to issue the amended directions per their request on 20 June 2024. There was some dispute regarding the Question for Arbitration and the matter was listed for a mention on 2 July 2024. Following the mention, the directions were amended again, and the matter was listed for hearing on 9 August 2024. During the hearing on 9 August 2024, the Respondent sought to adduce further evidence to which the Applicant objected. After hearing from the parties, I determined to issue further final directions for the Respondent to file their additional material, and seeking reply submissions from the Applicant. The matter was re-listed for hearing on 12 September 2024.
Noting that there is no dispute that the pre-requisites to the Commission’s involvement have been followed, I am satisfied that the Commission is empowered to resolve the dispute by determination of the agreed questions in accordance with the dispute settling procedures at clause 2.1 of the Agreement and s 739 of the Act.
Background
UGL made an application under s.739 of the Act for the Commission to deal with a dispute, after the ETU had raised concerns that UGL was breaching clause 2.5 of the Agreement by not passing on all conditions of employment provided by the Agreement to subcontractors engaged by UGL. The dispute concerns whether, to comply with clause 2.5 of the Agreement, UGL is required to ensure that all wages and conditions of employment afforded to contractors it engages are no less favourable than those that would be received by UGL employees performing the same work.
In response to the ETU’s concerns, UGL has stated that by providing sub-contractors wages and allowances that are, in aggregate, equivalent to or greater than those paid to UGL employees, it is complying with clause 2.5, and specifically clause 2.5.5 of the Agreement.
The ETU contends that the term “wages and conditions” used in clause 2.5.5 incorporates ordinary hours of work, redundancy payments and income insurance. Therefore, it argues that these entitlements must be passed on to contractors in terms no less favourable than those that would be received by UGL Employees performing the same work.
Relevant Provisions of the Agreement and the Award
Clause 2.5 of the Agreement states:
“2.5 Job Security
2.5.1Where the Employer makes a definite decision that it intends to engage contractors or labour hire companies to perform work covered by this Agreement, (which would ordinarily be undertaken by the Employees), the Employer will consult with the Employees and their representatives, in accordance with this clause.
2.5.2For the purpose of the consultation, the Employer must inform their representatives of:
(a) the name of the proposed contractor(s) / labour hire company;
(b)the type of work proposed to be given to the contractor(s) / labour hire company;
(c)the number of persons and qualifications of the persons the proposed contractor(s) / labour hire company may engage to perform the work; and
(d) the likely duration.
2.5.3Without limiting the Employer’s consultation obligations, the Employer will also consult over the following issues:
(a) safety; and
(b) inductions and facilities for contractor and labour hire Employees.
2.5.4In the event of a dispute about whether consultation has occurred under this clause, the Employee or the Union may refer the matter to the Disputes Procedure. Nothing in this clause will be taken to in any way limit, prevent or delay the commencement of work by contractors or Employees, or provide justification for work to cease pending determination by the FWC. Any commencement of work will not prejudice the outcome of the dispute.
2.5.5The Employer must ensure that contractors (including labour hire companies) and Employees of contractors that are engaged to do work that would be covered by this Agreement if it was performed by the Employees, apply wages and conditions that are no less favourable than that provided for in this Agreement.
2.5.6From approval of the Agreement, where the Company engages contractors or labour hire companies, where practical, any new contract must include standard contract provisions with a requirement that when employees of contractors perform work that would be otherwise performed by employees covered by this Agreement, they shall be entitled to the rates of pay and allowance which, in aggregate, shall be no less favourable than those that apply to the same classifications of employees engaged under this Agreement.
2.5.7No Employee will be made redundant whilst labour hire Employees, contractors and/or Employees of contractors, engaged by the Employer, are performing work that is or has been performed by the Employees on the particular site or project. This clause does not apply in respect of specialist contractors. A specialist contractor is a contractor that does not work other than in the classifications covered by the Agreement, including but not limited to traffic control management.
2.5.8This clause does not apply in respect of specialist contractors engaged by the Employer where the provisions of sub clause 2.5.1 are met. However, this exclusion will not be effective if the specialist contractor further sub-contracts any portions of the works for which it has been contracted by the Employer, unless otherwise agreed by the Employer and the Union.”
Applicant’s Submissions
The Applicant’s contentions are detailed in its submissions and evidence which I don’t intend to repeat, however briefly, the Applicant submitted that clause 2.5.5 goes no further than to ensure that employees of contractors engaged by UGL are paid at least the rates of pay and allowances under the Agreement that would be applicable if they were employees of the Applicant. It also submitted that clause 2.5.6 operates as an enforcement mechanism in respect of contracts entered into after the Agreement’s commencement date for the obligations imposed by clause 2.5.5.
UGL’s primary contention with respect to the obligations imposed by clause 2.5.5 was that the clause does not require UGL to ensure that “each and every condition of employment afforded to employees” is no less favourable than the corresponding company condition.[1] In making this submission, the Applicant referred to AMWU v Paper Australia Pty Ltd,[2] in which Deputy President Colman found that in interpreting the term “wages and conditions”, wages and conditions are to be considered together, as it is unlikely that the intention of the term was to ensure that “each and every condition of employment” is no less favourable.[3]
UGL submitted that the Berri[4] principles of interpretation should be applied having regard to the more recent and binding decision of the High Court in Ridd.[5] UGL submitted a number of contentions from that decision ought be applied in the interpretation of an enterprise agreement and inter alia, submitted the High Court’s statement that to do so:
“In that that process of interpretation, an important matter of context is the industrial nature of the instrument. Industrial instruments are not always drafted carefully by lawyers or professional drafters, and hence the literal words of a provision might more readily be understood to have a meaning other than their ordinary meaning if the context so suggests.”[6]
UGL submitted that its interpretation is supported by the clause’s text, context and purpose. In UGL’s submission, the text of clause 2.5.5 does not express or imply that contractors are required to apply the Agreement, its terms and conditions, and all payments made to UGL employees to their employees. With respect to context, UGL argued that the clause can and must be read harmoniously with clause 2.5.6, which provides an enforcement mechanism. When read together, UGL submitted that the meaning of “conditions” is taken from the reference to “wages” in clause 2.5.5 and “rates of pay and allowance” in clause 2.5.6.
Finally, in relation to purpose, UGL argued that the intention of clause 2.5 as a whole, is to ensure job security of its employees, and not to ensure that every condition of employment for contractors is no less favourable. If a wider interpretation was adopted, and UGL was required to afford all conditions of employment to contractors, UGL submitted that this would lead to unworkable industrial outcomes, including to apply the Agreement’s dispute resolution process, NES entitlements and minimum probation periods to contractors. Therefore, UGL argued that the operation of the clause must be limited, and that use of the phrase ‘wages and conditions’ suggests that the clause refers to wages and conditions that are wage-based. For these reasons, UGL rejected the ETU’s contention that “wages and conditions” in clause 2.5.5 includes ordinary hours of work, redundancy payments and income insurance. In the alternative, UGL submitted that clause 2.5.5 and 2.5.6 can be satisfied in the aggregate, consistent with AMWU v Paper Australia.
Respondent’s Submissions
The Respondent’s contentions are detailed in its submissions and evidence which I don’t intend to repeat, however briefly, the Respondent submitted that clause 2.5.5 imports a primary obligation on UGL to ensure that “wages and conditions” applied by contractors to their employees are no less favourable than those set out in the Agreement. Where a contractor is engaged after the commencement of the Agreement, the ETU argued that UGL has a secondary obligation, arising from clause 2.5.6, to ensure that relevant contracts entered into, include a term which entitles the contractor’s employees to the “rates of pay and allowance” that are no less favourable than those set out in the Agreement.
The ETU noted that the terms, “wages and conditions” and “rates of pay and allowance”, are not defined in the Agreement, and so should be given their ordinary natural meaning having regard to the context in which they appear. Section 3(c) of the Act contains the phrase “wages and conditions”. The ETU submitted that in using this phrase, the Act denotes the full range of terms, rights and entitlements attaching to an employment relationship, whether monetary or non-monetary. In an industrial relations context, the ETU argued that “conditions” is a “catch all” and refers to any benefit other than wages to which an employee becomes entitled for work performed, whether monetary or non-monetary. In the context of clause 2.5 of the Agreement, which provides for job security, the ETU argued that if the phrase “wages and conditions” were to take on a narrower meaning, it would render the clause ineffective from a job security perspective. As under the Agreement, in clauses 5.1, 2.8.11.1 and 3.12, the Agreement respectively provides employees with an entitlement to ordinary hours of work, redundancy payments and income insurance, the ETU submitted these are “conditions” in the sense contemplated by clause 2.5.5.
As clause 2.5.6 contains the words “in aggregate”, the ETU concedes that clause 2.5.6 can be satisfied in aggregate, but that as no such phrase appears in clause 2.5.5, ordinary hours, redundancy payments and income insurance cannot be aggregated. Further, because these entitlements are “binary”, the ETU argued that they cannot be satisfied in aggregate. The ETU further rejected the findings with respect to aggregation in AMWU v Paper Australia, stating that the case was not on point, and in any event, wrongly decided.
In response to UGL’s argument that the “conditions” referred to in clause 2.5.5 are only those that are “wage-based”, the ETU argued that had that been the intention of the parties, the clause could simply have read “wages”. Instead, the word “conditions” must be given work to do and a different meaning.
Agreed Facts
The parties filed a Statement of Agreed Facts dated 28 June 2024 that says:
“1. The Applicant and the Respondent are named as parties to the UGL Engineering Pty
Limited Queensland Power Transmission Enterprise Agreement 2022-2024 (the EA).
Attached and marked SOAF-1 is a copy of the EA.
2. The EA was approved by the Fair Work Commission on 28 August 2023. In the decision
approving the Agreement, the Commission stated the Agreement has a nominal expiry
date of 31 March 2024. There is no contest that it remains in force.
3. The EA applies to the Applicant in respect of its trade, non-trade and apprenticeship
employees.
4. The Applicant is currently completing works on the Genex Kidston to Guybal Munjan
275KV Transmission line (the Project).
5.The Applicant has engaged two sub-contractors to perform certain works on the Project.
Catalpa Energy Pty Ltd
6. On 27 June 2023 the Applicant entered into a Works Contract with Catalpa Energy Pty
Ltd for assembly and erection in relation to the Genex - Kidston to Guybal Munjan (Mt
Fox) 275kv Transmission Line, being contract number 3200-0652-011 (the Catalpa
Contract). A redacted copy of that document is annexed and marked SOAF-2.
7. On 13 May 2024 the Applicant and Catalpa Energy Pty Ltd entered into a deed, pursuant
to which the Catalpa Contract was varied, being contract number 3200-0652-011- DoV - 01. A redacted copy of that document is annexed and marked SOAF-3.
8. The Catalpa Contract has not been further varied.
Astar Rigging Constructions Pty Ltd
9. On 11 March 2024 the Applicant entered into a Works Contract with Astar Rigging
Constructions Pty Ltd for assembly and erection - east section in relation to the Genex Kidston to Guybal Munjan (Mt Fox) 275kv Transmission Line, being contract number
3200-0652-036 (the Astar Contract). A redacted copy of that document is annexed and
marked SOAF-4.
10. The Astar contract has not been varied.
11. There are employees of both Catalpa Energy Pty Ltd and Astar Rigging Constructions
Pty Ltd who have been engaged by the relevant employer to do work at the Project that
would have been covered by the Agreement if they had been employed by the Applicant.”
Principles Relevant to the Interpretation of an Enterprise Agreement
The principles were conveniently summarised in the Full Bench decision of Berri[7] which I will set out here for completeness:
“1.The construction of an enterprise agreement, like that of a statute or contract, begins with a consideration of the ordinary meaning of the relevant words. The resolution of a disputed construction of an agreement will turn on the language of the agreement having regard to its context and purpose. Context might appear from:
(i)the text of the agreement viewed as a whole;
(ii)the disputed provision’s place and arrangement in the agreement;
(iii)the legislative context under which the agreement was made and in which it operates.
The task of interpreting an agreement does not involve rewriting the agreement to achieve what might be regarded as a fair or just outcome. The task is always one of interpreting the agreement produced by parties.
The common intention of the parties is sought to be identified objectively, that is by reference to that which a reasonable person would understand by the language the parties have used to express their agreement, without regard to the subjective intentions or expectations of the parties.
The fact that the instrument being construed is an enterprise agreement made pursuant to Part 2-4 of the FW Act is itself an important contextual consideration. It may be inferred that such agreements are intended to establish binding obligations.
The FW Act does not speak in terms of the ‘parties’ to enterprise agreements made pursuant to Part 2-4 agreements, rather it refers to the persons and organisations who are ‘covered by’ such agreements. Relevantly s.172(2)(a) provides that an employer may make an enterprise agreement ‘with the employees who are employed at the time the agreement is made and who will be covered by the agreement’. Section 182(1) provides that an agreement is ‘made’ if the employees to be covered by the agreement ‘have been asked to approve the agreement and a majority of those employees who cast a valid vote approve the agreement’. This is so because an enterprise agreement is ‘made’ when a majority of the employees asked to approve the agreement cast a valid vote to approve the agreement.
Enterprise agreements are not instruments to which the Acts Interpretation Act 1901 (Cth) applies, however the modes of textual analysis developed in the general law may assist in the interpretation of enterprise agreements. An overly technical approach to interpretation should be avoided and consequently some general principles of statutory construction may have less force in the context of construing an enterprise agreement.
In construing an enterprise agreement it is first necessary to determine whether an agreement has a plain meaning or it is ambiguous or susceptible of more than one meaning.
Regard may be had to evidence of surrounding circumstances to assist in determining whether an ambiguity exists.
If the agreement has a plain meaning, evidence of the surrounding circumstances will not be admitted to contradict the plain language of the agreement.
10.If the language of the agreement is ambiguous or susceptible of more than one meaning then evidence of the surrounding circumstance will be admissible to aid the interpretation of the agreement.
11.The admissibility of evidence of the surrounding circumstances is limited to evidence tending to establish objective background facts which were known to both parties which inform and the subject matter of the agreement. Evidence of such objective facts is to be distinguished from evidence of the subjective intentions of the parties, such as statements and actions of the parties which are reflective of their actual intentions and expectations.
12.Evidence of objective background facts will include:
(i)evidence of prior negotiations to the extent that the negotiations tend to establish objective background facts known to all parties and the subject matter of the agreement;
(ii)notorious facts of which knowledge is to be presumed; and
(iii)evidence of matters in common contemplation and constituting a common assumption.
13.The diversity of interests involved in the negotiation and making of enterprise agreements (see point 4 above) warrants the adoption of a cautious approach to the admission and reliance upon the evidence of prior negotiations and the positions advanced during the negotiation process. Evidence as to what the employees covered by the agreement were told (either during the course of the negotiations or pursuant to s.180(5) of the FW Act) may be of more assistance than evidence of the bargaining positions taken by the employer or a bargaining representative during the negotiation of the agreement.
14.Admissible extrinsic material may be used to aid the interpretation of a provision in an enterprise agreement with a disputed meaning, but it cannot be used to disregard or rewrite the provision in order to give effect to an externally derived conception of what the parties’ intention or purpose was.
15.In the industrial context it has been accepted that, in some circumstances, subsequent conduct may be relevant to the interpretation of an industrial instrument. But such post-agreement conduct must be such as to show that there has been a meeting of minds, a consensus. Post agreement conduct which amounts to little more than the absence of a complaint or common inadvertence is insufficient to establish a common understanding.”[8]
Consideration
Ordinary meaning of the words
In setting out my consideration of the issues raised by the parties, I do not intend to list each and every issue raised in detail however that is not indicative of any failure to consider each of those issues. I have indeed carefully considered each, and every issue raised by the parties and I seek only to highlight the more notable arguments that demonstrate the reasons for my findings. In saying that, I note the contentions of the Respondent that the Applicant is a “moving party”[9] and suggesting that this has deprived the Respondent of procedural fairness. I reject this contention. Parties have been given numerous adjournments to enable them every opportunity to consider and make submissions on issues raised including a late adjournment of the hearing itself for the sole purpose of providing the parties with procedural fairness. I note the Applicant contended at hearing that it made no such movement, that the same arguments can be found in their first submissions. In any event, I reject any suggestion that procedural fairness is denied for these reasons.
The parties have noted that, inter alia, there is a difference between clause 2.5.5 and clause 2.5.6 because one contains the words ‘in aggregate’ and one doesn’t. The Applicant submits that the Commission should not assume that one clause would provide an obligation inconsistent with an adjoining clause and the Respondent submits that the exclusion of those express words in clause 2.5.5 should demonstrate different intentions in the interpretation of 2.5.5 as opposed to 2.5.6.
Further, both parties made submissions about the assessment of terms such as “wages and conditions” with the Applicant referring to the decision of Deputy President Colman in AMWU v Paper Australia[10] and the premise that a line by line comparison of each condition is not required and the Respondent’s position is that the three entitlements it sets out cannot be aggregated, being: ordinary hours of work, redundancy payment and income insurance (3 Entitlements)[11] and therefore must be provided in full. The Respondent suggests the AMWU case is neither binding nor on point and argues further that it was wrongly decided.[12] I note the decision was not appealed and whilst the issue may not have been fully argued to the extent it has been here, I don’t accept it can be dismissed albeit limited to being persuasive in any event. Deputy President Colman in that case considered a situation where an employer was required to ensure its contractors afforded its employees, ‘wages and conditions’ that were no less favourable than those provided under the employer’s agreement as opposed to wages and separately conditions each being no less favourable. He found that the more natural and sensible reading was that ‘wages and conditions’ be considered together. The Deputy President described the absurdity that could arise from not taking that view, as precluding an employer who paid generous non-wage benefits from paying a weekly wage marginally lower than a company’s pay rates and concluded that an overall comparison would instead be required.[13]
The Commission regularly deals with conducting better off overall tests[14] between proposed agreements and their underpinning Awards. The legislation, which was considered in the making of the agreement upon which this dispute arises, specifically refers to a global assessment as opposed to a line by line assessment.[15] The Respondent’s position that the 3 Entitlements cannot be aggregated[16] is at odds with its own concession that clause 2.5.6 can be satisfied in aggregate.[17] The Respondent in submitting both of these propositions then goes on to say that whilst different forms or amounts of income can be aggregated, the 3 entitlements cannot.[18] I don’t accept that they cannot be aggregated. To accept that proposition you would have to accept that it is impossible to comply with s.193A of the Act when assessing Enterprise Agreements and clearly it is not so. I agree with Deputy President Colman’s conclusion and find there is relevance to this matter.
Further, I note the Respondent’s case in respect of clause 2.5.5 being a Primary Obligation[19] imposed on existing contractors of the Applicant and clause 2.5.6 providing an additional obligation on the Applicant being a Secondary Obligation imposed on future contractors. Having regard for the principles in Berri, I accept that the Primary Obligation must carry the intended purpose of the clauses. That purpose being about job security, that the overall package of wages and conditions are no less favourable. It is my view that the natural flow of the Secondary Obligation following that, seeks to add further to the obligation rather than to create something entirely different. It would not make sense unless that was so. The Secondary Obligation requires that to enforce the Primary Obligation, the Applicant must ensure that relevant contracts entered into after the approval of the agreement must include a term entitling future contractors’ employees to rates of pay and allowance that are in aggregate no less favourable to those set out in the Agreement. The Respondent contends that clause 2.5.6 is intended to complement clause 2.5.5’s obligations, that it does not cover the same ground and indicating that it therefore is meant to do something different which is to add a requirement to new contracts made with new contractors. I accept it adds something, however I do not accept it changes the fundamental intention of clause 2.5.5. Rather it adds an obligation that ensures future contracts will comply with the Primary Obligation. To read clause 2.5.6 in any other way could also result in employees of future sub-contractors being remunerated differently to employees of existing contractors. I don’t accept this contention, and I don’t find that any evidence before the Commission supports a position which would take me there. I will add more on this later.
The Respondent does not cavil with the authorities noted by the Applicant however it notes that they are not the only relevant authorities and cites its own authorities.[20] The Respondent’s authorities are helpful. In particular, I note in Amcor,[21] Kirby J suggests that a range of issues should be considered in the interpretation to find a construction that contributes to a “sensible industrial outcome…”.[22] In considering City of Wanneroo,[23] I note the point made that “There is a long tradition of concluding a generous construction over a strictly literal approach where industrial awards are concerned.”[24].
Whilst I accept a generous construction should be taken over a strict one, if I were to accept that two clauses aimed primarily in my view at achieving the same goal of job security, that is, one for existing contractors and the other for future contractors, should be interpreted differently because, inter alia, one clause includes the words “in aggregate” and the other does not, or one contains the words wages and conditions and the other pay and allowances, such a view would not be consistent with those authorities or the material before the Commission. Specifically, such a view would have to conclude a strict literal approach that, in my view, does not produce a sensible industrial outcome. Indeed, it would be consistent with Ridd,[25] to find that imperfect drafting is the more likely reason for the change in words from “wages and conditions” to “pay and allowances,” but the inclusion of the words “no less favourable” supports the sensible contention that both groups of employees were intended to be treated the same. I note the Respondent draws on a similar argument in respect of alleged drafting errors in clause 2.5.6.[26]
The existence and ordinary meaning of the words “no less favourable,” found in both clauses, would in my view support an interpretation that the combination of “wages and conditions”, connected by the word “and” in clause 2.5.5, should be read as being that wages and conditions are, together, no less favourable. Such an interpretation again results in a more sensible and practical outcome that is, that both existing and future contractors are required to ensure that their employees are engaged on the same basis of remuneration. To find otherwise would result in the absurd outcome that on the Respondent’s case, existing contractors would be able to aggregate wages and conditions for their employees and new contractors would have to pay their employees income insurance and redundancy payments and ordinary hours of work each separately.
When I turn my mind to the different words in clause 2.5.6 being ‘pay and allowances’ as opposed to ‘wages and conditions’ in clause 2.5.5, it is clear there is a conflict with the words chosen. I agree with the contentions of the Respondent in this respect that it can be simply explained as a drafting error. Given the drafting in clause 2.5.6 follows that in clause 2.5.5, it is my view that the Primary Obligation, is the correct drafting. It is also a broader interpretation appropriate to the words used in clause 2.5.5 as I have set out in the preceding paragraph. Clause 2.5.6 then follows and as I have found in the preceding paragraphs, adds to clause 2.5.5 in respect of enforcing clause 2.5.5 on future contractors. I do not accept that clause 2.5.6 was intended to further narrow or restrict how employees of future contractors be remunerated and there is no evidence before the Commission that it was the intention of the parties to do so.
Having regard for the overall context of the clauses on job security, the legislative context of agreement assessments, the ordinary meaning of the words ‘in aggregate’ and the more sensible assessment that there was no intention for existing and future contractors to pay their employees differently, for all of the reasons set out in my consideration, I conclude that taking a narrow view of ‘pay and allowances’ being confined to the items set out in Appendix C would be a view taken in error.
Conclusion
For these reasons, the answer to the questions for arbitration are as follows:
The Applicant’s Questions
Does the obligation in clause 2.5.5 extend beyond UGL ensuring that employees of contractors that are engaged to do work that is covered by the Agreement, are paid at least
the rates of pay and allowances under the Agreement that would be applicable if they were Employees? For all of the reasons set out in the preceding paragraphs, the answer is no. The relevant employees should be paid wages and conditions that are on aggregate, or overall, no less favourable than those contained in this Agreement.
Does compliance with clause 2.5.6 satisfy both of clauses 2.5.5 and 2.5.6? The answer is yes.
The Respondent’s Questions
Does the expression “wages and conditions” in clause 2.5.5 include:
(a) ordinary hours of work (clause 5.1)?
(b) redundancy payments (clause 2.8.11.1)?
(c) income insurance (clause 3.12)?For all of the reasons set out in the preceding paragraphs, the answer is yes.
Is the expression “rates of pay and allowance” in clause 2.5.6 limited to the wage rates arising from Appendix C?
For all of the reasons set out in the preceding paragraphs, the answer is no.
DEPUTY PRESIDENT
[1] Digital Court Book (DCB) p.114 [14].
[2] Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union’ known as the Australian Manufacturing Workers Union (AMWU) v Paper Australia Pty Ltd[2023] FWC 2129 (AMWU v Paper Australia).
[3] Ibid [30].
[4] Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union’ known as the Australian Manufacturing Workers Union (AMWU) v Berri Pty Limited[2017] FWCFB 3005 (Berri).
[5] Ridd v James Cook University (2021) 274 CLR 495; [2021] HCA 32.
[6] Ibid at [17].
[7] Berri.
[8] Ibid.
[9] DCB p.418 at [37].
[10] AMWU v Paper Australia.
[11] Statement of Brenton Muller, DCB p.420 at [7] (as opposed to the Respondents apparent incorrect reference DCB p.418 at [35].
[12] DCB p.418 at [41].
[13] AMWU v Paper Australia at [30].
[14] Fair Work Act 2009 (Cth) s193A.
[15] Ibid at [2].
[16] Ibid p.418 at [40].
[17] Ibid.
[18] Ibid.
[19] Ibid p.412 at [8].
[20] Ibid p.418 at [38] and p.417.
[21] Amcor Limited v Construction, Forestry, Mining and Energy Union and Others [2005] HCA 10; (2005) 222 CLR 241 at [96].
[22] Ibid.
[23] City of Warnneroo v Australian Municipal, Administrative, Clerical and Services Union (2006) 153 IR 426 at 440 [57].
[24] Ibid.
[25] Ridd v James Cook University (2021) 274 CLR 495; [2021] HCA 32 at [17].
[26] DCB p.412 footnote; See also DCB p.413.
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