United Workers' Union v Wilson Security Pty Ltd
[2021] FWC 1447
•18 MARCH 2021
| [2021] FWC 1447 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.739—Dispute resolution
United Workers’ Union
v
Wilson Security Pty Ltd
(C2020/6476)
DEPUTY PRESIDENT GOSTENCNIK | MELBOURNE, 18 MARCH 2021 |
Application to deal with a dispute.
[1] The United Workers Union (UWU), an organisation registered under the Fair Work (Registered Organisations) Act 2009 (Cth) has applied to the Commission under s.739 of the Fair Work Act 2009 (Cth) (Act) for it to deal with a dispute in accordance with the dispute settlement term of the Wilson Security Victoria Agreement 2018 (Agreement). The Agreement was approved by the Commission with undertakings on 10 May 2019 and commenced operating on 17 May 2019.1 The Agreement covers Wilson Security Pty Ltd (Wilson Security), certain of its employees in Victoria who are licenced and engaged as security officers, and the UWU. The applicable dispute settlement term is found at clause 12 of the Agreement and there is no dispute that the Commission now has jurisdiction to arbitrate this subject matter of the dispute.
[2] The matter in dispute concerns the proper construction of provisions of the Agreement which regulate the quantum and timing of pay increases under the Agreement. The context in which the disputes arose is as follows.
[3] The relevant provisions of the Agreement the subject of the dispute link wages increase under the Agreement to a percentage increase equivalent to that handed down by the Commission in the Annual Wage Review. On 19 June 2020 the Commission’s Annual Wage Review 2019-20 determined that to increase the national minimum wage effective to $753.80 per week with effect from the first full pay period on or after 1 July 2020.2 The Commission also determined that the award wage rates contained in certain identified awards, including, relevantly the Security Services Award 2020 (Award) would be increased by 1.75% effective from the first full pay period on or after 1 November 2020.3 That award covers the employees to whom the Agreement applies and was the relevant reference instrument against which the better off overall test was applied in approving the Agreement. The parties are not in dispute about the quantum of the wage and allowance increases required by the Agreement as a consequence of the Annual Wage Review 2019-20 outcome, however they are in dispute about the timing of those increases. The UWU and Wilson Security agree that the questions for determination by the Commission in the arbitration of the matter in dispute are as follows:
“On the proper construction of the Wilson Security Victoria Agreement 2018, whether:
1. In respect of Group 1 employees, whether clause 18.1.2 (as altered in the undertaking) should be interpreted such that employees were entitled to a wage increase of 1.75% effective from the first full pay period on or after 1 July 2020? Or whether Group 1 employees were instead entitled to 1.75% wage increase from the first full pay period on or after 1 November 2020?
2. In respect of Group 2 employees working at an “existing site” (as defined in the Agreement), whether clause 18.2.2 (as altered by the undertaking) should be interpreted such that employees were entitled to a wage increase of 1.75% effective from the first full pay period on or after 1 July 2020? Or whether Group 2 employees working at an “existing site” (as defined in the Agreement) were instead entitled to 1.75% wage increase from the first full pay period on or after 1 November 2020?
3. In respect of Group 3 employees working at an “existing site” (as defined in the Agreement), whether clause 18.3.2 (as altered by the undertaking) should be interpreted such that employees were entitled to a wage increase of 1.75% effective from the first full pay period on or after 1 July 2020? Or whether Group 3 employees working at an “existing site” (as defined in the Agreement), were instead entitled to 1.75% wage increase from the first full pay period on or after 1 November 2020?
4. Whether clause 20.1 of the Agreement should be interpreted such that the allowances payable under the Agreement and specified in Schedule B should be increased by 1.75% effective from the first full pay period on or after 1 July 2020 for all employees? Or whether the allowances should instead be increased by 1.75% from the first full pay period on or after 1 November 2020?”
[4] As the questions disclose the construction for which the UWU contends is that clauses 18.1.2, 18.2.2 and 18.3.2 of the Agreement require the wage increase of 1.75% for employees to whom these provisions apply, to be effective from the first full pay period on or after 1 July 2020. It contends the same operative date for increases to allowances by reason of clause 20.1. Wilson Security contends for the first full pay period on or after 1 November 2020.
[5] The construction of provisions of an enterprise agreement begins with a consideration of the ordinary meaning of the words, read in context, taking account of the evident purpose of the provisions or expressions being construed. Context may be found in the provisions of the agreement taken as a whole, or in their arrangement and place in the agreement. The statutory framework under which the agreement is made or in which it operates may also provide context, as might an antecedent instrument or instruments from which a particular provision or provisions might have been derived. The industrial context in which an agreement is made and operates is also relevant. Thus, the language of an agreement is to be understood in the light of its industrial context and purpose, not in a vacuum or divorced from industrial realities. But context is not itself an end and a consideration of the language contained in the text of the agreement being considered remains the starting point and the end point to the task of construction. A purposive approach to interpretation is appropriate, not a narrow or pedantic approach.4
[6] As earlier noted, the Agreement was approved with undertakings. Clause 18 of the Agreement, which deals with wages was modified by the undertakings (as indicated by the underlining) to provide as follows:
“18. WAGES
18.1 Wages- Group 1 Employees
18.1.1 For the purpose of this clause, ‘Group 1’ means any employee who commenced employment with Wilson Security prior to 23 July 2015
18.1.2 Wage rates will be in accordance with Schedule A and effective from the first full pay period on or after 31 August 2018 (payable from the second full pay period on or after the date of the approval of this agreement) (on ordinary hours worked only to the date of commencement of the Agreement, and for all purposes thereafter). Further increases to wage rates will be as follows:
• From the first full pay period on or after 1 July 2019, a percentage increase equivalent to that handed down by the FWC in the Annual Wage Review.
• From the first full pay period on or after 1 July 2020, a percentage increase equivalent to that handed down by the FWC in the Annual Wage Review.
18.1.3 Group 1 employees will continue to be paid at the rates of pay stipulated in Schedule A regardless of what contract/site they are located.
18.1.4 Schedule A and Schedule B outline the rates of pay and allowances applicable over the life of this Agreement. 18.1.5 The rates of pay and allowances outlined in Schedule A and Schedule B respectively will not fall below those stipulated in the Award. If the prescribed rates fall below the SSIA rates, the rates in this Agreement will be increased to match the SSIA rates at the same time that the Award rates are increased.
18.2 Wages- Group 2 Employees
18.2.1 For the purpose of this clause, ‘Group 2’ means any employee who commenced employment with Wilson Security on and between 23July 2015 and 31 May 2018
18.2.2 A Group 2 employee working on a security contract/site awarded prior to 23 July 2015 (“existing site”), will be entitled to rates of pay in line with Group 1 employees, as per 18.1.2. For the avoidance of doubt, wage rates will be in accordance with Schedule A and effective from the first full pay period on or after 31 August 2018 (on ordinary hours worked only to the date of commencement of the Agreement, and for all purposes thereafter, payable from the second full pay period on or after the date of the approval of this agreement).
18.2.3 A Group 2 employee working on a security contract/site awarded after 23 Jury 2015 (“new site'”), will be entitled to ordinary rates of pay and wage Increases in accordance with the equivalent level of the Award (SSIA).
18.2.4 For the avoidance of doubt, all other terms and conditions of employment will be in accordance with this Agreement.
18.3 Wages – Group 3 Employees
18.3.1 For the purpose of this clause, ‘Group 3’ means any employee who commenced employment with Wilson Security from 1 June 2018.
18.3.2 A Group 3 employee working on a security contract/site awarded prior to 23 July 2015 (“existing site”), will be entitled to rates of pay in line with Group 1 employees, as per 18.1.2. For the avoidance of doubt, wage rates will be in accordance with Schedule A and effective from the first full pay period on or after 31 August 2018 (on ordinary hours worked only to the date of commencement of the Agreement, and for all purposes thereafter, payable from the second full pay period on or after the date of the approval of this agreement).
18.3.3 A Group 3 employee working on a security contract/site awarded after 23 July 2015 (“new site”), will be entitled to ordinary rates of pay and wage increases in accordance with the equivalent level of the Award (SSIA).
18.3.4 A Group 3 employee working on a security contract/site awarded after 23 July 2015 (“new site”), will be entitled to a productivity allowance.
18.3.5 For the avoidance of doubt, all other terms and conditions of employment will be in accordance with this Agreement.
18.4. Productivity Allowance - Group 3 Employees working on “New Sites”
18.4.1. The Productivity Allowance is 10 cents per hour, payable on all hours worked. It is not subject to any penalty or overtime rates.
18.4.2. The Productivity Allowance is only payable for actual hours physically worked in the employee's usual role. It will not be paid on leave, training, whilst attending company functions or meetings, of any type.
18.4.3. The Productivity Allowance will not increase during the life of the Agreement or be included for back payment purposes.”
[7] Clause 20 of the Agreement provides that the “allowances referred to this Agreement will increase in line with the wage increases stipulated above in Clause 18.1” unless otherwise expressly mentioned in clause 20.
[8] Schedule A to the Agreement contains rates of pay for Group 1 employees and for certain Group 2 and 3 employees (by reason of Schedule D and the clarifying undertakings) which operate from the first pay period on or after the Agreement commences operation. The operative date for these wage rates appears to have been modified by the undertaking which affected the operation of clauses 18.1.2, 18.2.2 and 18.3.2.
[9] Schedule D to the Agreement contains an explanation to the wages group applicable to employees covered by the Agreement and provides:
Employment Commencement | Working On | Applicable Hourly Rate | Shift Allowance Arrangement |
Group 1 Employees employed prior to 23 July 2015 | Any Contract | As per Schedule A | Shift allowance payable on all hours worked (20% night Employees employed prior span) |
Group 2 Employees employed from 23 July 2015 but before 1 June 2018 | Existing Contract | As per Schedule A | Shift allowance payable on all hours worked (20% night Employees employed prior span) |
New Contract | SSIA pay rates | ||
Group 3 Employees employed from 1 June 2018 | Existing Contract | As per Schedule A | Shift allowance payable on hours worked within the span of hours classified as shift work, not on the entire shift (21.7% night span) |
New Contract | SSIA pay rate + Productivity allowance |
*Existing contract- awarded prior to 23 July 2015
*New contract- awarded from 23 July 2015
[10] As is apparent from Schedule D to the Agreement, all Group 1 employees together with Group 2 and 3 employees working on an existing contract, being a contract awarded prior to 23 July 2015, had their rates of pay fixed by Schedule A. Clauses 18.1.2, 18.2.2 and 18.3.2 have the effect of increasing the rates of pay in Schedule A in the manner and at the time specified therein.
[11] Clause 18.1.2 of the Agreement makes provision for wages of Group 1 employees to be increased, relevantly, “[F]rom the first full pay period on or after 1 July 2020, a percentage increase equivalent to that handed down by the FWC in the Annual Wage Review”. The meaning and effect of this phrase is in dispute and by extension, the resolution of that dispute will also resolve the disputed timing of wage and allowance increases under clauses 18.2.2, 18.3.2 and 20.1 respectively as each provides the relevant rates of pay and increase in allowances (as the case requires) “in line with Group 1 employees, as per 18.1.2”.
[12] Wilson Security contends the disputed phrase is ambiguous taking into account the statutory context and the surrounding circumstances leading to the Agreement. According to Wilson Security this is so because:
• Wages fixed by the Agreement establish a relationship to the Award;
• Wilson security sought to fix rates in Schedule A at approximately 2% above the applicable rates under the Award and that this relativity against the Award needed to be maintained to ensure Wilson Security remained competitive in the industry;
• Little thought was put into those words by both parties to the phrase “from the first full pay period on or after 1 July 2020”;
• Section 286 of the Act provides that annual wage review determinations varying modern awards ordinarily come into operation on 1 July in the next financial year and that a later operative date of such determinations can only occur in “exceptional circumstances”;
• “Exceptional circumstances” justified a 1.75% increase to the rates of pay contained in the Award to come into operation on 1 November 2020;
• Under the Agreement the rates of pay for “Group 2” and “Group 3” employees are equal to those set out in the Award; and
• A later operative date for the wage increases for “Group 1” employees therefore maintains the wage relativities not only with the Award, but also as between the “Group 1” and “Group 2” employees.
[13] I do not consider the disputed phrase to be ambiguous and I reject the contention that the statutory context and the surrounding circumstances leading to the Agreement establish ambiguity. Both the text of the provision and its reading in the context of the Agreement as a whole, leads only to one conclusion. Wilson Security’s desire to fix rates in Schedule A at approximately 2% above the applicable rates under the Award and that this relativity against the Award needed to be maintained to ensure Wilson Security remained competitive, is no more than evidence of its subjective intention. In any event, to the extent that this subjective intention is offered to support the construction of the relevant provisions of clause 18 of the Agreement for which Wilson Security now contends, it is inconsistent with the explanation it gave to employees in the lead up to employees voting to approve the Agreement.
[14] In a document titled “Wilson Security Victorian Enterprise Agreement Summary Guide 17 August 2018”5 Wilson Security advised its employees of the following matters:
“Wage increases will be applied annually on 1 July, based on the percentage increase equivalent to the FWC Annual Wage Review
. . .
SSIA Pay Rate
SSIA Pay Rate Employees will receive ordinary rates of pay and wage increases in accordance with the equivalent level of the SSIA.”6
[15] This explanation appears consistent with the separate regimes for increases in wage rates for which provision is made in clause 18 of the Agreement.
[16] Furthermore, that there are deviations in the timing of wage increases for which the Agreement makes provision does not disturb the relativities over the life of the Agreement which Wilson Security says it sought to establish.
[17] The phrase “from the first full pay period on or after 1 July 2020, a percentage increase equivalent to that handed down by the FWC in the Annual Wage Review” in clause 18.1.2 of the Agreement serves two purposes. First, to indicate when the subject matter of the clause (wage increases) is to commence to operate. Second, how the quantum of the wage increase is to be determined.
[18] Clause 18 of the Agreement establishes two different regimes for increases in wages rates. The first is all Group 1 employees and those of the Group 2 and 3 employees working on a security contract/site awarded prior to 23 July 2015. Wage increases for these employees are governed by clauses 18.1.2, 18.2.2 and 18.3.2 respectively. The second is those Group 2 and 3 employees working on a security contract/site awarded after 23 July 2015. Wage increases for these employees are governed by clauses 18.2.3 and 18.3.3 respectively. For these employees “wage increases in accordance with the equivalent level of the Award”.
[19] The contradistinction between the two different wage regimes is plain. The employees to whom by clauses 18.2.3 and 18.3.3 are entitled to wage increases “in accordance with” the relevant equivalent level of the Award. Thus, the relevant equivalence operates both upon the timing and the quantum of the wage increase so that both are determined by the timing and quantum of any increase in the Award rates of pay.
[20] For employees whose wage increases are determined by clauses 18.1.2, 18.2.2 and 18.3.2, the timing of the wage increases is fixed by the Agreement. Namely and relevantly, from the first pay period on or after 1 July 2020. The equivalence is confined to the quantum so that the quantum of any increase to be applied from the first pay period on or after 1 July 2020 is determined by identifying the percentage increase handed down by the Commission in the Annual Wage Review and applying that increase to the wages payable to these employees. Schedule D reinforces this and the existence of the two wage regimes under the Agreement.
[21] On Wilson Security’s construction the different approaches to increasing wages under the separate regimes for which the Agreement provides are to the same effect. In both cases wages would increase at the same time and by the same amounts. This ignores the words used in the provisions and the separate regimes thereby created. It would also have the absurd result that the phrase “from the first full pay period on or after” would have a different meaning when used in clause 18.1.2 than the meaning ascribed to the phrase when used in Schedule A. That the use of the disputed phrase in Schedule A means the operative date for the wage rates there is confirmed by the first sentence of clause 18.1.2 which provides that “[W]age rates will be in accordance with Schedule A and effective from the first full pay period on or after 31 August 2018.” A construction that would have the disputed phrase carry a different meaning in the first sentence of clause 18.1.2 where it plainly fixes an operative date, to its use subsequently in clause 18.1.2, where it is said, despite the clear words, that the operative date is not fixed but is contingent on a date fixed in the Annual Wage Review, is in my view untenable. Both operate upon the same Schedule A.
[22] The legislative context under which the Annual Wage Review is conducted and the possibility that in exceptional circumstances increases to wages for which modern awards make provision might be delayed does not assist in construing the relevant provisions of the Agreement in the manner for which Wilson Security contends. First, it does not overcome the clear words used in clause 18.1.2, and on which clauses 18.2.2 and 18.3.2 hang, that wage increases for employees whom these provisions apply will be applied from the first pay period on or after, relevantly, 1 July 2020. Secondly, had the parties intended any later date of operation of any wage increase they could have expressly provided for this event, as plainly they did in respect of Group 2 and 3 employees to whom clauses 18.2.3 and 18.3.3 apply. Thirdly, I have already observed the explanation given to employees by Wilson Security does not suggest that the relevant increases for the affected employees will occur at any time other than the first pay period on or after 1 July in the relevant year. The explanation given was that wage increases “will be applied annually on 1 July”. This is consistent with the plain words of the relevant provisions and inconsistent with the construction for which Wilson Security now contends.
[23] The words in clauses 18.2.2 and 18.3.2 which require rates of pay to be “in line with Group 1 employees, as per 18.1.2” and those in clause 20.1 of the Agreement requiring allowances to “increase in line with the wage increases stipulated above in clause 18.1” appear to me to have the effect that rates of pay and allowances increase from the first pay period on or after, relevantly 1 July 2020, by a percentage increase equivalent to that handed down by the Commission in the Annual Wage Review. The phrase “in line with” means “in alignment or accordance with”. Furthermore, the wages outcome for Group 2 and 3 employees to whom clauses 18.2.2 and 18.3.2 apply, is reinforced by schedule D to the Agreement which provides that the applicable hourly rate for these employees is “[A]s per Schedule A”. Schedule A rates are increased in the manner for which provision is made in clause 18.1.2. These rates were to increase by 1.75% from the first pay period on or after 1 July 2020.
[24] Wilson Security also contended for an alternative construction. Wilson Security said that if its primary contention was not accepted then it would be open to construe the disputed phrase in clause 18.1.2 of the Agreement consistently with the outcome of the Annual Wage Review 2019-20 so that in the result from the first pay period on or after 1 July 2020 there would be a 0% increase to the rates of pay in Schedule A to the Agreement and a 1.75% increase in those rates with effect from the first pay period on or after 1 November 2020. This alternative construction is rejected. As I have already indicated the disputed phrase in clause 18.1.2 relevantly serves a dual purpose – to identify the operative date on which rates of pay in Schedule A will increase and to identify how the quantum is to be determined. The outcome of the Annual Wage Review 2019-20 is concerned with the second purpose not the first. Self-evidently the Annual Wage Review 2019-20 did not determine a 0% increase. It determined a 1.75% increase. Clause 18.1.2 relevantly requires that increase to be applied to the rates of pay in Schedule A from the first pay period on or after 1 July 2020.
[25] For these reasons I consider that the construction for which the UWU contends is correct.
Conclusion
[26] I answer the agreed questions posed by the parties as follows. On the proper construction of the Agreement:
1. For Group 1 employees, clause 18.1.2 (as altered in the undertaking) is to be interpreted so that employees were entitled to a wage increase of 1.75% effective from the first full pay period on or after 1 July 2020.
2. For Group 2 employees working at an “existing site” (as defined in the Agreement), clause 18.2.2 (as altered by the undertaking) is to be interpreted so that employees were entitled to a wage increase of 1.75% effective from the first full pay period on or after 1 July 2020.
3. For Group 3 employees working at an “existing site” (as defined in the Agreement), clause 18.3.2 (as altered by the undertaking) is to be interpreted so that employees were entitled to a wage increase of 1.75% effective from the first full pay period on or after 1 July 2020.
4. Clause 20.1 of the Agreement is to be interpreted so that the allowances payable under the Agreement and specified in Schedule B should be increased by 1.75% effective from the first full pay period on or after 1 July 2020 for all employees unless otherwise specified in clause 20.
DEPUTY PRESIDENT
Appearances:
L Harrison for the United Workers Union
T Vernier of Counsel for Wilson Security Pty Ltd
Hearing details:
2021
Melbourne (via video link)
19 January
Final written submissions:
Applicant, 4 December 2020 and 8 January 2021
Respondent, 18 December 2020
Printed by authority of the Commonwealth Government Printer
<PR727852>
1 [2019] FWCA 3250
2 Annual Wage Review 2019–20 [2020] FWCFB 5908 at [465]
3 Ibid at [466]
4 See WorkPac Pty Ltd v Skene [2018] FCAFC 131 at [197] and the authorities referred to therein; see also King v Melbourne Vicentre Swimming Club Inc [2020] FCA 1173 at [122]-[130] and the authorities referred to therein
5 Exhibit 1, Annexure NR –7
6 Ibid at p 2
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