UGL Operations and Maintenance Pty Ltd v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union
[2017] FWCFB 5246
•10 OCTOBER 2017
| [2017] FWCFB 5246 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.604 - Appeal of decisions
v
Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union
(C2017/3572)
Kentz Pty Ltd
v
Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union
(C2017/3575)
VICE PRESIDENT CATANZARITI | SYDNEY, 10 OCTOBER 2017 |
Appeal against decision [2017] FWC 2950 of Commissioner Simpson at Brisbane on 9 June 2017 in matter numbers C2017/1533 and C2017/1534 – dispute over inclement weather provision in enterprise agreements – interpretation of Commissioner was correct – no error – appeal dismissed. .
Background
[1] UGL Operations and Maintenance Pty Ltd (UGL) and Kentz Pty Ltd (Kentz) have lodged appeals, for which permission is required, against a decision issued by Commissioner Simpson on 9 June 2017 concerning the interpretation of an inclement weather provision in each company’s enterprise agreement. 1
[2] The Commissioner’s decision concerned two applications brought by the Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (AMWU) under the disputes procedures in the companies’ agreements, one under clause 18 of the UGL Operations and Maintenance Pty Ltd Ichthys Onshore Construction Greenfields Agreement (UGL Agreement), the other under clause 18 of the Kentz Pty Ltd Ichthys Onshore Construction Greenfields Agreement (Kentz Agreement).
[3] The disputes concerned the correct interpretation of Appendix 2 in each agreement, the terms of which are identical. The AMWU contended that in circumstances of inclement weather, Appendix 2 entitles employees to elect to remain on site and maintain their weekly work cycle earnings, including any overtime. The employers contended that, where the inclement weather continues for four hours and is unlikely to clear, employees can be released (directed to leave the site), in which case they are paid for the ordinary hours usually worked that day.
[4] The events which gave rise to the dispute can be briefly stated. On 6 February 2017, a day of inclement weather that had continued for 4 hours, UGL and Kentz directed employees to go home before the cessation of ordinary hours. Employees who elected to remain and “stand by” on site were issued with a written warning. The AMWU contended that Appendix 2 requires UGL and Kentz to pay overtime to employees who elected to remain on site in respect of their scheduled (but unworked) overtime. 2
The clauses in dispute
[5] Appendix 2 of the UGL Agreement and the Kentz Agreement each read as follows:
“Appendix 2 – Inclement Weather / Cyclone Preparation
(a) Approach to inclement weather:
(1) The Parties and the Employees covered by the Agreement will work collectively towards the minimisation of Lost time due to inclement weather.
(2) Where it is necessary to do so, work will continue during periods of inclement weather. The Employer will issue all necessary PPE where appropriate.
(b) The following principles shall apply:
(1) With the exception of extreme weather events such as cyclones, the Employer will provide the option for Employees to stay on-Site for the scheduled work hours and maintain their weekly work cycle earnings, including any scheduled overtime.
(2) Employees who are unable to work safely in a particular location because of the inclement weather may be redirected by the Employer to a location where they can work safely.
(3) Employees who are unable to work safely because of inclement weather and are not redirected to work will be required to ‘stand by’. The Employer may provide training, briefing or work planning sessions for these Employees, so some of these Employees (sic), although this may not occupy all of the time the Employees may be required to be on ‘stand by’.
(4) Resumption of work after periods of inclement weather shall be subject to the requirements of ‘Changed Conditions Inspections’.
(c) Employees leaving the Site
(1) If inclement weather:
(i) is encountered during the day;
(ii) continues for four (4) continuous hours; and
(iii) weather reports indicate the weather is unlikely to clear during the day.
The Managing Contractor may release Employee(s), not engaged in active work, for the rest of the day.
The released Employees shall be entitled to payment for the ordinary hours usually worked for that day.
If this occurs on a Saturday or Sunday, the Employees shall be entitled to a minimum of four (4) hours pay at the appropriate Saturday or Sunday overtime rates, or the actual hours worked. The subclause will not apply to Employees who are able to continue working on-Site.
(2) Notwithstanding this, some Employees may prefer to leave the Site prior to the Managing Contractor releasing Employees. Any Employee(s) who may choose to leave the Site due to inclement weather prior to the Managing Contractor releasing Employees will be paid only for the time they are on-Site.
If an Employee leaves the Site without first personally informing their Employer, the Employer is subsequently required to record the Employee’s time for that day only up to the last time that the Employer was personally aware that the Employee was actually on the Site.
(3) The Project shall provide bus transportation at hourly intervals after inclement weather has occurred to allow any Employee who decides to leave the Site to return to their home or non- local accommodation.
(d) Site Shutdown and Resumption of Work:
Cyclones or other extreme weather events may result in the Managing Contractor deciding to shut the Project Site (or any part of it) down due to perceived safety risk to Employees.
(1) Where the Project site (or any part of it) is shut down, with the exception of emergency crews, Employees will be instructed to leave the Site. Project bussing will be arranged as soon as possible.
(2) The Employer will notify the Employees when they are required to resume work following a cyclone or extreme weather event. Payment for Employees instructed to leave Site by the Managing Contractor will be the ordinary hours normally worked on that day(s) to a maximum of three (3) days. Employees who do not return to work when instructed by the Employer shall not be entitled to payment for the time they were off the Site.”
[6] The parties submitted to Commissioner Simpson a document entitled “Agreed Background Facts and Question for Arbitration”. 3 The background facts were described as follows:
“1. From time to time the Ichthys Onshore Construction Project experiences inclement weather. For clarity, this dispute does not relate to extreme weather events such as cyclones.
2. Where inclement weather is occurring the Employer can give employees on active work the option to either stay on site or return to their residence or accommodation. Note: The Applicant states this option applies irrespective of the duration of the inclement weather. The Respondents do not agree.
3. When the site is affected by inclement weather as above the employees who cannot be engaged on active work and who elect to leave the site are paid until they leave site. The employees who elect not to leave site, can be directed to either:-
a. to perform active work at locations where they can work safety; or
b. to go on stand-by.
4. There can be occasions that:-
a. the inclement weather continues for a period exceeding four hours; and
b. the forecast indicates the weather is unlikely to clear that day.
5. In such cases the Managing Contractor can release all employees not engaged on active work.
6. In the circumstances of 4 and 5 above:-
a. the Applicant states AMWU members not on active work can indicate to the Employer that they wish to stay on-site in order to maintain their weekly work cycle earnings, including any scheduled over time (the Affected Employees);
b. The Respondent states it can:
i. release all the Affected Employees;
ii. direct them to the buses to leave the Site;
iii. pay them only the ordinary hours usually worked for the day;
iv. not pay their scheduled overtime.”
[7] The parties posed the following questions for arbitration:
“A. Does Appendix 2 of the Enterprise Agreement enable:-
a. An Affected Employee to remain on site?; or
b. the Employer to direct employees not engaged on active work to the buses to leave the Site where the criteria in subclause (c)(1) are met?
B. Does Appendix 2 of the Agreement require the Employer to pay an Affected Employee:-
a. to maintain their weekly work cycle earnings, including any scheduled overtime?; or
b. only for the ordinary hours usually worked that day?”
[8] Commissioner Simpson determined that the answer to the first question was that Appendix 2 enables Affected Employees to remain on site, except as provided for in clause (d), and does not allow the employer to direct employees not engaged on active work to the buses to leave the site. 4
[9] In relation to the second question, the Commissioner determined that, except as provided for in clause (d), Appendix 2 requires the employer to pay Affected Employees for their scheduled work hours and to maintain their weekly work cycle earnings. Where the employee exercises the option to leave the site in accordance with clause (c), the employer is only required to pay them for the ordinary hours usually worked that day. 5
Permission to Appeal
[10] An appeal under s.604 of the Fair Work Act 2009 (Cth) (FW Act) is an appeal by way of rehearing and the Commission’s powers on appeal are exercisable only if there is error on the part of the primary decision maker. 6 There is no right to appeal under the FW Act. Absent any separate right of appeal under a dispute settlement provision in an enterprise agreement, an appeal may be made only with the permission of the Commission.7 Subsection 604(2) requires the Commission to grant permission to appeal if satisfied that it is “in the public interest to do so”. Permission to appeal may otherwise be granted on discretionary grounds.
[11] The task of assessing whether the public interest test is met is a discretionary one involving a broad value judgment. 8 The public interest is not satisfied simply by the identification of error, or a preference for a different result.9 In GlaxoSmithKline Australia Pty Ltd v Makin a Full Bench of the Commission identified some of the considerations that may enliven the public interest:
“… the public interest might be attracted where a matter raises issues of importance and general application, or where there is a diversity of decisions at first instance so that guidance from an appellate court is required, or where the decision at first instance manifests an injustice, or the result is counter intuitive, or that the legal principles applied appear disharmonious when compared with other recent decisions dealing with similar matters …” 10
[12] Other than the special case in s.604(2), the grounds for granting permission to appeal are not specified. Considerations which have traditionally been treated as justifying the granting of permission to appeal include that the decision is attended with sufficient doubt to warrant its reconsideration, and that substantial injustice may result if leave is refused. 11
[13] In its written submissions, the UGL and Kentz contended that there are as many as 260 enterprise agreements containing clauses identical to those that are the subject of the appeal. 12 Before the Full Bench, the UGL and Kentz sought leave to admit evidence concerning the arrangements of such other contractors and the application of 48 particular enterprise agreements. The AMWU disputed the relevance of the existence of similar clauses in other enterprise agreements, and objected to the admission of further evidence. We refused to admit UGL’s and Kentz’s further evidence.13 However, the Commission is aware that the terms of Appendix 2 are common not only to UGL and Kentz, but also to other contractors working at the Ichthys project. This is a matter of public record; enterprise agreements are published on the Commission’s website.
[14] In our view, the appeals filed by UGL and Kentz raise matters that are of importance and general application to work on the Ichthys project, such that it is in the public interest that permission to appeal be granted. As we are satisfied that the public interest is enlivened, we are required to grant permission to appeal, and we do so.
Grounds of Appeal
[15] The approach of a Full Bench to the determination of an appeal depends on the nature of the decision below. In the present case, the Commissioner was resolving a dispute that involved the interpretation of enterprise agreements. The task of determining the proper interpretation did not involve the exercise of discretion. Accordingly, the Full Bench must determine whether the interpretation of the agreements adopted by the Commissioner was correct.14
[16] The notices of appeal filed by Kentz and UGL are in substantively the same terms, and contain four grounds of appeal.
[17] Ground 1 submits that the Commissioner incorrectly interpreted the meaning of Appendix 2 in the agreements, and advances six supporting contentions.
[18] Ground 2 states that the Commissioner erred in law at paragraphs [56] and [57] of the decision by relying on extraneous matters in relation to which there was no evidence before the Commission, and which should not have been taken into account for the purposes of construing the agreements.
[19] Ground 3 contends that the Commissioner erred in failing to find that the outcome of the Commissioner’s interpretation as expressed in the answers to the questions posed was not industrially sensible or coherent, and was for that reason not to be imputed to the parties as their objective intention.
[20] Ground 4 submits that as a consequence of the errors said to have arisen in connection with the preceding grounds, the questions posed for arbitration were answered incorrectly.
Ground 1: Interpretation of Appendix 2
[21] We make some general observations about Appendix 2.
[22] Clause (a) addresses the “approach” to inclement weather. It states that the parties and employees will work collectively towards minimising time lost due to inclement weather. It further states that where necessary, work will continue during periods of inclement weather. The clause is relevant to the interpretation of the provisions that follow.
[23] Clause (b) then sets out “principles” that shall apply. The first of these is that, except in extreme weather events such as cyclones, the employer “will provide the option for Employees to stay on-Site for the scheduled work hours and maintain their weekly work cycle earnings, including any scheduled overtime” (clause (b)(1)). Although it does not expressly say so, it is clear from the context that the clause applies in circumstances where there is inclement weather. Secondly, the clause provides that if employees are unable to work safely in a particular location because of inclement weather, they will be redirected to another location where it is safe to work (clause (b)(2)). Thirdly, if employees are unable to work and are not redirected, they are “required to stand by” (clause (b)(3)). These three principles are consistent with the apparent purposes of Appendix 2 reflected in the “approaches” identified in clause (a).
[24] On its face, the meaning of clause (b)(1) is straightforward. Where there is inclement weather (other than extreme weather events), employees have the option to stay on site for the scheduled work hours and maintain their weekly work cycle earnings. The AMWU’s position relies on this clause.
[25] However, the employers contend that clause (b)(1) is subject to clause (c). Clause (c)(1) comprises several phrases, rather than a complete sentence or sentences, but its meaning is clear enough: if inclement weather continues for 4 hours and weather reports indicate that it is unlikely to clear, the provisions that follow are to apply. In particular, “[t]he Managing Contractor may release Employee(s), not engaged in active work, for the rest of the day. The released Employees shall be entitled to payment for the ordinary hours usually worked for that day.”
[26] The position of UGL and Kentz is that, in the special circumstances envisaged by clause (c), the Managing Contractor may release employees; they are then required to leave the site; once released, employees are to be paid only for the ordinary hours usually worked that day. UGL and Kentz contend that, in this situation, employees cannot elect to remain on site and maintain their weekly work cycle earnings (including scheduled overtime). Clause (b)(1), they contend, does not apply.
[27] The Commissioner rejected UGL’s and Kentz’s argument. He concluded that the effect of clause (c)(1) is that employees who are “released” are free to leave the site, but that the clause does not provide the Managing Contractor an ability to direct employees to leave the site. The Commissioner stated:
“[51]Having considered the respective arguments I have come to the view that clause (c) provides for an ability on the part of the Managing Contractor, (who is not a party to either of the Greenfield Agreements) to release Employees of subcontractors (such as Kentz or UGL who are party to the Greenfield Agreements the subject of this dispute) from being required to remain at work. The effect of clause (c) is that Employees are freed from the requirement to remain at work, at least by the Managing Contractor, and it falls to the Employer to then determine whether active work is still available such that the Employer still requires certain Employees to stay, and those Employees required for active work are not free to leave if they wish to do so, or alternatively are not released.
[52]Importantly, clause (c) does not provide either the Managing Contractor or sub contractor Employers an ability to direct Employees to leave site against their will, and only be paid for their ordinary hours rather than their scheduled hours.
[53]I agree with the AMWU’s interpretation that clause (c) is intended, once Employees are ‘released’, to provide for an Employee to be able to elect to go if they choose, but does not provide the Employer an ability to direct Employees to go. The language in clause (b)(1) expressly provides Employees with a choice of whether to stay or go, in the knowledge that if they decide to leave Site, they will receive less than they would receive if they stay for their scheduled work hours. Clause (b)(2) and (3) provide a range of options for an Employer to attempt to make the best use of the time. Employees are required to ‘stand by’ and may be required to participate in training, briefing or work planning sessions.”
[28] UGL and Kentz contend that the Commissioner’s interpretation of Appendix 2 is wrong. On their argument, the option afforded to employees under clause (b)(1) to stay on site is only relevant to the extent that it is made prior to the Managing Contractor releasing the employee under clause (c)(1). 15 They contend, in effect, that the words “release Employees, not engaged in active work, for the rest of the day” mean that the Managing Contractor can require – direct – the employees to leave.16 On the employers’ interpretation, clause (b)(1) operates subject to clause (c)(1). 17
[29] We do not agree. The word “release” carries the ordinary meaning of “to free from an obligation”; “to let go”. 18 It does not connote compulsion. The employers’ argument that the context of clause (c) requires a different and mandatory meaning might be somewhat more persuasive in the absence of clause (b). However, in the face of the clear words in clause (b)(1), whereby the employer provides employees the option to stay for the whole of the shift, their argument cannot be sustained. A plain and contextual reading of clauses (b) and (c) is that, if employees are released under (c)(1), they are allowed to go. But if they have chosen to stay under (b)(1), they do not have to go.
[30] Understood in this way, clause (c) can be read harmoniously with clause (b)(3). The latter contemplates employees not being able to work safely, in which case they are required to stand by. If the Managing Contractor “releases” employees under clause (c), they would no longer be required to stand by. But that does not mean that the “release” overrides an employee’s election under clause (b)(1) to remain on site for the scheduled work hours to maintain their weekly work cycle earnings. The release removes any requirement to stay. But this is not the same thing as a requirement to go.
[31] The employers also contend that the Commissioner wrongly relied upon clause (d) to support his interpretation of clause (c). 19 In this regard, the Commissioner states:
“[54] I am fortified in my view by the language in clause (d) which gives the Managing Director power to instruct Employees to leave the site. If clause (c) had been intended to give either the Managing Director or the Employer an ability to ‘direct’ or ‘instruct’ Employees to leave site, and by such ‘direction’ or ‘instruction’ receive less remuneration for that day then they would otherwise ordinarily receive, clause (c) would have said so.”
[32] We accept that clause (d) deals with a different situation and the exercise of different powers. But we reject the contention that the wording of clause (d) is not relevant to the analysis of clause (c). It is well accepted that the interpretation of an industrial instrument should take into account the context of the provisions in dispute, and the surrounding provisions of the instrument form part of the context. Clause (d) refers on three occasions to employees being “instructed” by the employer to do certain things, including “instructed to leave the Site” ((d)(1)). These are words connoting compulsion by the employer; they stand in contrast to the words that the parties chose to employ in (c), namely “release … for the rest of the day.” In our view, the Commissioner was rightly fortified in his conclusion by the use of words of compulsion in clause (d), but not in clause (c).
[33] A further contention advanced by UGL and Kentz was that the Commissioner wrongly concluded that, as clause (c) did not enable the Managing Contractor to direct employees to leave the site against their will, employees could nevertheless unilaterally elect whether to leave the site or not. 20 It was submitted that an employer in such circumstances has a common law right to direct employees to stay or leave as the employer considers appropriate, and that this right was not removed by the agreement.21 It was further contended that Appendix 2 does not confer an express right on the part of employees to defy a direction of the employer to stay or leave.22
[34] We do not agree. In our view, clause (b)(1) prevails over any common law right of the employer to direct employees to leave the site. That clause confers on employees a right to elect to remain and to maintain their weekly work cycle earnings including any scheduled overtime. The Commissioner finds at paragraph [53] of his decision that clause (b)(1) gives employees a choice of whether to stay or go. This finding was correct.
[35] UGL and Kentz further contended that clause (b)(1) has no application in the particular case outlined in (c)(1), as such employees are not able to work at all. 23 We do not accept this argument. In our view, clause (b)(1) has a general application, from which clause (c)(1) does not derogate. Clause (b) itself contemplates that employees may be unable to work because of inclement weather; those who are not redirected to a location where they can work safely will be required to “stand by”. Such employees are, at least for the time being, not able to continue working. Clause (c)(1) applies to a particular situation where bad weather has persisted for 4 hours and according to the weather reports is “unlikely” to clear. The Managing Contractor may then release employees and allow them to leave. But it might also decide not to release them; the weather might yet clear, or ease sufficiently to allow work to continue.
[36] Before the Commissioner, UGL and Kentz posed the question as to what would be the point of giving the Managing Contractor the power to release employees if it does not mean employees can be directed to leave. 24 In our view, (c)(1) does not confer on the employer any power; it records an employer discretion to allow employees to leave the site. The consequence of employees leaving the site after being released is that they receive payment for ordinary hours usually worked for that day (as per (c)(1)); they will not receive ‘weekly work cycle earnings, including overtime’ (as per (b)(1)).
[37] As UGL’s and Kentz’s submission notes, one of the stated purposes of the provisions in Appendix 2 is the minimisation of lost time due to inclement weather. 25 Having employees on stand by and ready to work, even after 4 hours of bad weather and in the face of adverse weather reports, is compatible with this objective.
The release as a payment trigger
[38] Much of the contest between the parties focused on whether the release of employees by the Managing Contractor under clause (c)(1) entailed the ability to direct employees to leave the site. The first of the two questions posed for the Commission’s determination related squarely to this issue. It appears from the transcript that the argument in proceedings before the Commissioner centred on this question.
[39] In our view, the focus on the question of whether employees could be directed to leave the site under clause (c)(1) appears to have overshadowed the question of what are the payment consequences of employees being released.
[40] Before the Full Bench, UGL and Kentz argued that, regardless of whether clause (c) allows the Managing Contractor to direct employees to leave the site, the payment consequences of employees being released are clear: clause (c) states that “the released Employees shall be entitled to payment for the ordinary hours usually worked for that day.” 26
[41] On UGL’s and Kentz’s argument, an employee who has been released by the Managing Contractor for the rest of the day, but who decides to remain on site, is entitled only to payment for “ordinary hours” pursuant to clause (c)(1), not “weekly work cycle earnings including any scheduled overtime”, as referred to in (b)(1). UGL and Kentz contend that, whatever else might be its significance, the “release” of employees by the Managing Contractor is a payment trigger, and entitles employees to payment for ordinary hours only.
[42] UGL and Kentz contend that the option afforded to employees under clause (b)(1) to stay on site and maintain weekly work cycle earnings is of a general nature, and is subject to any specific instances for which discrete and inconsistent provisions are later provided in clause (c)(1). 27 It is true that clause (b) sets out arrangements that apply to inclement weather generally, and that clause (c) deals with a specific category of bad weather, namely where it has lasted for 4 hours and is unlikely to clear. It is necessary then to consider whether, as between the two payment arrangements specified in those clauses, there is an inconsistency.
[43] Employees who have been released by the Managing Contractor under (c)(1) may leave the site, and are not required to remain on “stand by” (as might otherwise have been the case as a result of (b)(3)). As we have seen, released employees will be “entitled” under clause (c)(1) to payment for ordinary hours. However, clause (c)(1) does not state that a released employee can only receive payment for ordinary hours. An employee who has not made an election to stay on site under clause (b)(1) would, in the circumstance of being released under clause (c)(1), be entitled to ordinary hours’ earnings, and receive nothing more. However an employee who has made an election to stay under (b)(1) would “maintain their weekly work cycle earnings, including any scheduled overtime”. In respect of such an employee, it is still the case that they are entitled to ordinary hours’ pay; but they are entitled to additional payments under (b)(1). In our view, the payment clauses in (b)(1) and (c)(1) can be read compatibly.
[44] The contrary interpretation involves reading down the clear words of clause (b)(1) that provide employees with the option to stay on site, and maintain the weekly work cycle earnings, including overtime. On UGL’s and Kentz’s interpretation, clause (b)(1) would not confer on employees an option to maintain earnings, only the possibility to maintain them, subject to a countervailing decision of the Managing Contractor. We also note that clause (b)(1) contains an express exception to its application, namely, in relation to “extreme weather events such as cyclones”. Had it reflected their intention, the parties could have expressly disengaged clause (b)(1) in the case of extreme weather events and where clause (c)(1) applies. They did not do so. Whilst by no means definitive, the presence of an express exception in the present context tends to tell against an inference or construction that others exist.
[45] In our opinion, the payment trigger in clause (c)(1) entitling released employees to payment for ordinary hours work does not derogate from employees’ option to stay on site and maintain weekly work cycle earnings under clause (b)(1).
[46] In our opinion, the first ground of appeal should be rejected. The Commissioner arrived at the correct interpretation of Appendix 2 of the agreements.
Other grounds of appeal
[47] By ground 2, UGL and Kentz contend that the Commissioner erred in law at paragraphs [56] and [57] of the decision by relying on extraneous matters in relation to which there was no evidence before the Commission, and that impermissible assumptions were made for the purposes of construing the agreements.
[48] We do not accept these arguments. These passages of the decision read as follows:
“[56] The Employers have submitted that the AMWU interpretation does not provide for a sensible industrial outcome. I disagree. When the terms of Appendix 2 are considered in the context of where the two Greenfields Agreements apply it is unsurprising. Many Employees working at the Site are FIFO workers living in camp accommodation and are necessarily away from home and family for extended periods of time.
[57]It is a notorious fact that the overtime component of scheduled work hours is an incentive to perform FIFO work. It would not be unexpected that the parties intended for Appendix 2 to operate to preserve payment for scheduled work hours for Employees that wish to preserve that payment, except for the circumstances contemplated by clause (d) which was accepted not to apply here.”
[49] In our view, the Commissioner did no more than respond to UGL’s and Kentz’s contention that the interpretation he had adopted would not provide for a sensible industrial outcome. He provided a rationale as to why the parties might have arrived at an agreement that operated in a manner that accorded with his interpretation.
[50] These passages appear to us to be included in the decision by way of discourse, rather than analysis; they come after the Commissioner’s process of interpretation has concluded. His conclusions do not rest on them. The reference to FIFO workers and their preferences are not, in our view, surrounding circumstances to which the Commission had regard, as might occur when an agreement is ambiguous (see principles 8 to 14 in AMWU v Berri). 28
[51] We do not consider that the Commissioner erred by relying on extraneous matters, or that his observations in paragraphs [56] or [57] of the decision otherwise disclose error.
[52] Ground 3 contends that the interpretation arrived at by the Commissioner was not “industrially sensible or coherent”, and should not be imputed to the parties as their objective intention. 29
[53] No question of incoherence arises in the present case. The Commissioner’s interpretation of the agreements gives meaning to all of the relevant provisions and is compatible with the apparent purpose of Appendix 2, as reflected in clause (a).
[54] The submission that the Commissioner’s interpretation is not “industrially sensible” touches on the principles that apply in relation to the interpretation of an enterprise agreement.
Where the Commission is required to determine a dispute over the application of an enterprise agreement, the principles of interpretation articulated by the Full Bench in Berri will apply.
[55] We do not set out all fifteen principles found at paragraph 114 of that decision, but find it convenient to cite the first two:
“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.
2. 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.”
[56] In their submissions, UGL and Kentz rely on the decision of Australian and International Pilots Association v Qantas Airways Limited (AIPA), 30 where Rares J rejected a particular construction of a term in an enterprise agreement, noting that it did not make “industrial or commercial sense”.31 However, his Honour had earlier found that the proposed construction in question was “strained and unrealistic”.32 That is not the case in the present matter. As noted in Berri, the Commission’s task is to interpret the agreement produced by the parties, not to achieve particular outcomes. In any event, we do not consider the Commissioner’s interpretation to lack industrial sense.
[57] UGL and Kentz further submit that, in considering the correct interpretation of Appendix 2, it is necessary to consider whether a particular construction leads to an unreasonable result. They refer to the well-known passage of Lord Reid that, the more unreasonable the result, the more unlikely it is that the parties could have intended it. 33
[58] In relation to what they submit is the unreasonableness associated with the Commissioner’s interpretation of Appendix 2, UGL and Kentz submit:
“The construction contended for by the Respondent is manifestly unreasonable. It is that an employee released from doing any further work and who is unable to continue working is entitled, by making an election simply to stay on Site without the ability to continue working, to payment even beyond the ordinary hours usually worked for that day. Such a construction is clearly unreasonable.” 34
[59] We do not agree that the construction adopted by the Commissioner, and which we have found to be correct, is unreasonable. Clause (c) states that it will not apply to employees who are able to continue working on site. Such employees, it appears, will not be released by the Managing Contractor for the rest of the day. It is those employees who are not able to continue working on site whom the Managing Contractor may release. As noted above, the circumstances of clause (c) are that after four hours of inclement weather, the prognosis indicates that the weather is “unlikely” to clear. But it may yet do so. The possibility that employees will be able to work at some later point in the shift is not foreclosed. An employee who has been released by the Managing Contractor, but nevertheless decides to stay, will be available to work later in the shift if the weather improves. The provisions of Appendix 2 aim to reduce time lost to inclement weather. The interpretation arrived at by the Commissioner is compatible with this objective. It is not unreasonable.
[60] In any event, clause (b)(1) provides employees with the option to stay. UGL’s and Kentz’s interpretation would entail an unwarranted reading down of a clearly expressed right afforded to employees, namely, the option of staying on site and “maintaining their weekly work cycle earnings, including overtime”.
[61] Finally, ground 4 submits that as consequences of the errors said to have arisen in connection with the preceding grounds, the questions posed for arbitration were answered incorrectly. As we have rejected the preceding grounds, it follows that ground 4 must also fail.
Disposition of the Appeal
[62] We have concluded that the Commissioner’s interpretation of Appendix 2 of the agreements was correct. As we have not identified any error in the decision, the appeals must be dismissed.
[63] We order as follows:
(i) Permission to appeal in both matters is granted.
(ii) The appeals are dismissed.
VICE PRESIDENT
Appearances:
H. Dixon SC for Kentz Pty Ltd and UGL Operations and Maintenance Pty Ltd.
A. Heffernan for the AMWU.
Hearing details:
2017
Sydney:
21 August.
1 [2017] FWC 2950.
2 [2017] FWC 2950, [6] and [7].
3 Exhibit 1, Question for Arbitration and Statement of Background Facts.
4 [2017] FWC 2950, [59].
5 Ibid [61].
6 Coal and Allied Operations Pty Ltd v AIRC (2000) 203 CLR 194 at [17] per Gleeson CJ, Gaudron and Hayne JJ.
7 It was not contended that the enterprise agreements conferred any independent right to appeal, nor does there appear to be any basis for such an argument.
8 O’Sullivan v Farrer (1989) 168 CLR 210 per Mason CJ, Brennan, Dawson and Gaudron JJ; applied in Hogan v Hinch (2011) 85 ALJR 398 at [69] per Gummow, Hayne, Heydon, Crennan, Kiefel and Bell JJ; Coal & Allied Mining Services PtyLtd v Lawler and others (2011) 192 FCR 78 at [44]-[46].
9 GlaxoSmithKline Australia Pty Ltd v Makin[2010] FWAFB 5343 at [26]-[27], 197 IR 266; Lawrence v Coal & Allied Mining Services Pty Ltd t/as Mt Thorley Operations/Warkworth[2010] FWAFB 10089 at [28], 202 IR 388, affirmed onjudicial review in Coal & Allied Mining Services Pty Ltd v Lawler (2011) 192 FCR 78; NSW Bar Association v Brett McAuliffe; Commonwealth of Australia represented by the Australian Taxation Office[2014] FWCFB 1663 at [28].
10 [2010] FWAFB 5343; 197 IR 266 at [24]-[27].
11 Also see CFMEU v AIRC (1998) 89 FCR 200; and Wan v AIRC (2001) 116 FCR 481.
12 UGL and Kentz Outline of Submissions, paragraph 3(d).
13 Transcript of proceedings, PN32.
14 Pawel v AIRC [1999] FCA 1660; Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union known as the Australian Manufacturing Workers Union v Berri Ltd[2017] FWCFB 3005, at [35].
15 UGL and Kentz Outline of Submissions, paragraph 19.
16 Transcript of proceedings, PN55-56.
17 Transcript of proceedings, PN84-85
18 Macquarie Concise Dictionary, 5th edition.
19 Ground 1(d) in the Notice of Appeal.
20 Ground 1(b) in the Notice of Appeal.
21 Ground 1(c)(ii) in the Notice of Appeal.
22 Ground 1(c)(iv) in the Notice of Appeal.
23 Ground 1(f) in the Notice of Appeal.
24 [2017] FWC 2950, [55].
25 Clause (a)(1).
26 UGL and Kentz Outline of Submissions, paragraph 17-21.
27 Ground 1(e) in the Notice of Appeal.
28 [2017] FWCFB 3005; see also, AMIEU v Golden Cockerel Pty Limited[2014] FWCFB 7447.
29 Ground 3 in the Notice of Appeal.
30 [2017] FCA 346.
31 Ibid [52].
32 Ibid [51].
33 UGL and Kentz Outline of Submissions, paragraph 25; In L Schuler AG v Wickman Machine Tool Sales Ltd [1973] UKHL 2; [1974] AC 235 at 251, Lord Reid said (see also Zhu v Treasurer of New South Wales [2004] HCA 56; (2004) 218 CLR 530 at 559 [82] per Gleeson CJ, Gummow, Kirby, Callinan and Heydon JJ).
34 UGL and Kentz Outline of Submissions, paragraph 26.
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