Utilities Management Pty Ltd T/A SA Power Networks v The Association of Professional Engineers, Scientists and Managers Australia T/A Professionals Australia
[2024] FWC 2089
•6 AUGUST 2024
| [2024] FWC 2089 |
| FAIR WORK COMMISSION |
| OPINION |
Fair Work Act 2009
s.739 - Application to deal with a dispute
Utilities Management Pty Ltd T/A SA Power Networks
v
The Association of Professional Engineers, Scientists and Managers Australia T/A Professionals Australia
(C2024/3834)
| DEPUTY PRESIDENT ANDERSON | ADELAIDE, 6 AUGUST 2024 |
Dispute about matters arising under the enterprise agreement and the NES [s186(6)] – whether enterprise agreement requires employer to reimburse membership fees of employee organisation that is also a professional body – parties jointly seek non-binding opinion – interpretation – bargaining conduct – reimbursement required – opinion issued
On 11 June 2024 Utilities Management Pty Ltd (Utilities Management, the employer or the applicant) applied to the Commission under s 739 of the Fair Work Act 2009 (Cth) (FW Act) to deal with a dispute.
The respondent is the Association of Professional Engineers, Scientists and Managers (APESMA) trading as Professionals Australia (Professionals Australia, the Union or the respondent).
The subject matter of the dispute is whether Utilities Management is required by the Utilities Management Pty Ltd Enterprise Agreement 2024 (the Agreement) to reimburse employees the fees paid for membership of Professionals Australia.
The dispute came before the Commission under the dispute settlement procedure of the Agreement. The dispute was not resolved at the workplace level. It was referred to the Commission under cl 11 of Attachment 2 of the Agreement.
At a conference conducted on 24 June 2024 the Commission was advised that the applicant and respondent jointly sought a non-binding (advisory) opinion and that this be provided ‘on the papers’ (without a formal hearing). Rights to future arbitration were reserved.
I agreed to do so. I issued directions for the filing of materials, which both parties provided. To the extent required, the applicant was legally represented, with permission.
Facts
The facts necessary to express an advisory opinion are not in dispute.
Amongst other activities, Utilities Management is the primary operator of the electricity distribution network to commercial and residential consumers in South Australia.
A variety of occupational groupings are employed by Utilities Management. This includes persons who are eligible to be members of Professionals Australia.
Professionals Australia represents the industrial interests of its members, including those who are employed by Utilities Management. It is an employee association registered under the Fair Work (Registered Organisations) Act 2009 (Cth).
Terms and conditions of employment of persons eligible to be members of Professionals Australia (amongst others) have come to be established by collective bargaining between Utilities Management and relevant trade unions (including Professionals Australia).
The currently operating enterprise agreement is the Utilities Management Pty Ltd Enterprise Agreement 2024.
On 29 February 2024 Professionals Australia wrote to Utilities Management expressing the view that cl 7.19 of the Agreement required the employer to reimburse employees for membership fees paid to Professional Australia.
On 25 March 2024 Utilities Management responded disputing this position and indicating that a proposal advanced by Professionals Australia during bargaining for the Agreement to reimburse annual union membership fees had been rejected.
Further correspondence was exchanged between Professionals Australia and Utilities Management.
On 14 May 2024 Professionals Australia wrote asserting that the obligation to reimburse existed under cl 7.19 of the Agreement, sought reimbursement with respect to seven named persons, and asserted that non-payment was a breach of the Agreement and the FW Act which could be pursued by the institution of proceedings.
On 7 June 2024 Utilities Management replied indicating that it maintained its view that reimbursement was neither intended nor obligated, that it would be applying to the Commission to deal with the dispute and that, in the interim and as an act of goodwill, it would make reimbursement with respect to the seven named persons.
Utilities Management filed the dispute notification in the Commission four days later, on 11 June 2024.
Agreement
As noted, the Agreement the subject of the dispute is the Utilities Management Pty Ltd Enterprise Agreement 2024.
The Agreement was negotiated between 3 October and 18 December 2023. It was made (signed) on 19 December 2023.
Three unions are covered by the Agreement and were bargaining representatives for the Agreement: Professionals Australia, the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU) and the Australian Services Union (ASU).
The Agreement was approved by the Commission on 6 February 2024 and commenced operation seven days later.[1]
The Agreement has a nominal expiry of 31 December 2025.
The Agreement contains thirteen clauses and eight attachments. Attachment 2 is a Terms and Conditions Agreement containing eleven clauses and three appendices.
The Agreement covers persons employed by Utilities Management whose classifications are covered by Appendices 1A and 1B of Attachment 2.
The clause of the Agreement falling for interpretation is cl 7.19 of Attachment 2. It provides:
“7.19 PROFESSIONAL ENGINEERS DEVELOPMENT SUBSIDY
Utilities Management will provide financial support to eligible employees to obtain or maintain professional membership or Chartered Engineering (or equivalent) status in accordance with the Professional Engineers Professional Development Subsidy Guideline. This Guideline is an internal document (which does not form part of this Agreement) and is subject to review by Utilities Management from time to time.
Eligible employees will be reimbursed up to $1500 per calendar year for the cost of relevant and approved Continual Professional Development (in relation to obtaining or maintaining RPEng, CPEng or equivalent) and/or reimbursement for annual membership of a professional body who is an engineer registration assessment entity. At its own discretion, Utilities Management may choose to allow a reimbursement of greater than $1500.”
Other provisions of the Agreement relevant to the matter are referenced in the body of this opinion, where required.
Submissions
Utilities Management
Utilities Management submit that, on a textual construction of cl 7.19, the Agreement is ambiguous and open to more than one interpretation.
Utilities Management submit that the “Guideline” referred to in cl 7.19 provides for a discretionary, not mandatory, payment, and for payment of a different quantum than provided for by the Agreement.
Utilities Management submit that an obligation on an employer to pay or reimburse trade union membership fees is an extraordinary matter which could only exist with clear and unambiguous language.
Utilities Management submit that the bargaining conduct for the Agreement was such that it never intended, and there was no common intention, that trade union fees would be reimbursed. Utilities Management in fact contend the opposite – that a specific demand by Professionals Australia for that outcome was rejected during bargaining.
Utilities Management submit that the historical development of the reimbursement provision in cl 7.19 establishes that it arose (since 2009) from a non-binding guideline that was internally developed by Utilities Management and subject to change at its discretion.
Professionals Australia
Professionals Australia submit that cl 7.19 is not ambiguous. It has a clear and singular interpretation when applying the plain meaning of its language.
That plain meaning is that reimbursement of membership fees to Professionals Australia is required because it is “an engineer registration assessment entity”.
Professionals Australia submit that surrounding circumstances (historical practice or bargaining conduct) need not, and should not, be used to construe the Agreement, because cl 7.19 has a plain meaning.
Professionals Australia submit that even if bargaining intention is considered, Utilities Management is relying on its subjective belief, which is impermissible because there is no evidence that its belief was a common intention.
Professionals Australia submit that Utilities Management is, through a dispute about construction, attempting to re-write the terms of the Agreement, which is also impermissible.
Professionals Australia submit that a recommendation should be made that Utilities Management reimburse eligible employees covered by the Agreement up to $1,500 per calendar year for membership of Professionals Australia.
Consideration
The role of the Commission in this matter is one of private arbitration, defined by the terms of the Agreement.
In this exercise of private arbitration powers, the Commission has agreed to express an advisory opinion only. Doing so provides the parties with the benefit of a non-binding opinion. Such an approach returns the dispute to the parties and may assist the parties to themselves resolve the substantive dispute either directly or by further bargaining. It is expressly noted however that rights to future arbitration are reserved.
In expressing this opinion, I do so within the framework of s 739 of the FW Act. This includes that the Commission “must not exercise any powers limited by the [dispute settlement] term [in the Agreement]” (s 793(3)) and “must not make a decision that is inconsistent with this Act, or a fair work instrument that applies to the parties” (s 739(5)).
Principles of interpretation
Given that dealing with the dispute concerns interpreting the Agreement, it is appropriate to apply well established principles of interpretation. Neither Utilities Management nor Professionals Australia contest those principles, though differences exist as to the manner in which they should be applied.
The correct approach was succinctly stated by the Full Court of the Federal Court in WorkPac Pty Ltd v Skene:[2]
“[197] The starting point for interpretation of an enterprise agreement is the ordinary meaning of the words, read as a whole and in context. The interpretation “... turns on the language of the particular agreement, understood in the light of its industrial context and purpose ...”. The words are not to be interpreted in a vacuum divorced from industrial realities; rather, industrial agreements are made for various industries in the light of the customs and working conditions of each, and they are frequently couched in terms intelligible to the parties but without the careful attention to form and draftsmanship that one expects to find in an Act of Parliament. To similar effect, it has been said that the framers of such documents were likely of a “practical bent of mind” and may well have been more concerned with expressing an intention in a way likely to be understood in the relevant industry rather than with legal niceties and jargon, so that a purposive approach to interpretation is appropriate and a narrow or pedantic approach is misplaced.” (citations omitted)
These principles were repeated by the court in James Cook University v Ridd:[3]
“The starting point is the ordinary meaning of the words, read as a whole and in context.
A purposive approach is preferred to a narrow or pedantic approach — the framers of such documents were likely to be of a “practical bent of mind”. The interpretation “turns upon the language of the particular agreement, understood in the light of its industrial context and purpose”.
Context is not confined to the words of the instrument surrounding the expression to be construed. It may extend to “... the entire document of which it is a part, or to other documents with which there is an association”.
Context may include “... ideas that gave rise to an expression in a document from which it has been taken”.
Recourse may be had to the history of a particular clause “Where the circumstances allow the court to conclude that a clause in an award is the product of a history, out of which it grew to be adopted in its present form...
A generous construction is preferred over a strictly literal approach, but “Awards, whether made by consent or otherwise, should make sense according to the basic conventions of the English language. They bind the parties on pain of pecuniary penalties”.
Words are not to be interpreted in a vacuum divorced from industrial realities but in the light of the customs and working conditions of the particular industry.” (paragraph numbering and citations omitted)
Subsequent decisions of full benches of the Commission have applied the principles as set out by these superior courts.[4] In large measure those principles reflect earlier approaches of the Commission, particularly those in Berri.[5]
Textual considerations
Although the dispute centrally concerns the text of cl 7.19 of Appendix 2, the instrument must be read as a whole and in context.
Does the Agreement, when read as a whole and in context, have a plain meaning?
My provisional view is that it does.
The clause contains two paragraphs. I do not consider, and no party contends, that each paragraph imposes two separate obligations. The clause imposes one payment obligation on Utilities Management.
Paragraph 1 imposes the obligation. Paragraph 2 regulates quantum (“up to $1500 per year” reimbursement or, at the employer’s discretion, a higher amount).
I do not consider that the clause, on a textual construction, is ambiguous within the established meaning of that term. I agree that it is not worded with precision. It appears to have been drafted “without the careful attention to form”, to adopt the language of the court in Skene. However, the mandatory nature of the payment obligation is apparent on its face (Utilities Management will provide…”). I do not consider that the reference in paragraph 1 to a “guideline” creates relevant ambiguity as to whether the obligation is mandatory or not. The reference to the guideline is consistent with the language of a mandate to the extent that a guideline may express how a mandate is to be given effect to.
Other conditions of the regulatory obligation appear plain on the face of the text:
· Eligibility – the reimbursement obligation only applies to “eligible employees”; and
· Purpose - the reimbursement obligation is only for the purpose of obtaining or maintaining professional membership or chartered engineering (or equivalent) status.
The dispute appears not to concern eligibility or purpose, but whether fees an eligible employee pays for membership of Professionals Australia are caught by the reimbursement obligation.
The answer to this question requires a two-step assessment; firstly, an assessment of the nature or character of Professionals Australia, and secondly, whether that body (properly characterised) falls within the descriptor in cl 7.19 that Professionals Australia be:
a body that provides “continual professional development (in relation to obtaining or maintaining RP Eng[6] or CP Eng[7] or equivalent)”; “and/or”
a “professional body who is an engineer registration assessment entity”.
Professionals Australia is, in colloquial terms, a trade union. Expressed more precisely, it is an “employee association” within the meaning of the FW Act. Its full legal name, the Association of Professional Engineers, Scientists and Managers (APESMA), has been federally registered under the Fair Work (Registered Organisations) Act 2009 (Cth).
As a trade union, Professionals Australia has purposes that include the protection and advancement of the collective industrial interests of its members and persons eligible to be members of the organisation. That an organisation is a trade union does not however mean that it cannot or does not serve other purposes that its rules permit; such as the professional development of members or the enhancement of the standing of occupations or trades within an industry.
It appears to not be in dispute that Professionals Australia is, in addition to being an employee association, “an engineer registration assessment entity”.
I observe that I have not examined the rules of Professionals Australia nor expressed an opinion on whether Professional Australia is, in fact, constitutionally able to be an engineer registration assessment entity. This opinion is premised on that being so.
In the context of cl 7.19, an “engineer registration assessment entity” appears to be a body that assesses or grants registered status to persons that have achieved the qualifications of RP Eng or CP Eng or equivalent.
Given that:
there appears to be no lawful impediment to the rules of Professionals Australia having purposes that include both that of an employee association under national industrial relations laws as well as the functions of an engineer registration assessment entity; and
that Professionals Australia is in fact an engineer registration assessment entity; and
that cl 7.19 obliges Utilities Management to reimburse fees which include those for the “annual membership of a professional body that is an engineer registration assessment entity”;
then it is reasonably arguable, on a textual construction of the Agreement, that Utilities Management has an obligation to reimburse eligible employees for such fees up to $1,500 per year (or, if it decides in its discretion, by a higher amount).
Nothing elsewhere in the text of the Agreement relevantly affects this construction. Clause 7.19 is a stand-alone provision in that part of Attachment 2 titled “Miscellaneous”. That part (clause 7) includes a random assortment of provisions including other clauses requiring reimbursements or the payment of allowances. The definitions clause (cl 1.3) provides no guidance to the meaning of contentious words or phrases in cl 7.19.
The question that next arises is whether this textual construction, if correct, is somehow displaced or modified by surrounding circumstances or other provisions of the FW Act.
Utilities Management refers to three considerations:
the guideline;
historical practice; and
bargaining conduct.
Each is explored in turn.
The guideline
I consider the guideline relevant to interpretation of the text. I do not consider it to be extrinsic material in the sense that it is relevant only if ambiguity exists. I consider it to be an “other document with which there is an association”, to adopt the words of the court in Ridd. This is because the text of cl 7.19 itself refers to the obligation applying “in accordance with the Professional Engineers Professional Development Subsidy Guideline”.
Accordingly, whilst the guideline cannot displace the language of the text, it informs how the obligation is to be satisfied. In that sense the guideline is connected to the application of rights and obligations under cl 7.19 of the Agreement but does not create those rights and obligations.
The guideline is expressly stated to be an internal document only (to Utilities Management) and does not form part of the Agreement. This textual caveat is to be understood in the context of the subsequent use of the guideline to create a term of the Agreement, and the text that follows – that the guideline is stated by cl 7.19 to be subject to review and variation by the employer. In other words, the obligation (to reimburse) must be applied by reference to the terms of the guideline as those terms exist from time to time.
The guideline in its current form is properly titled the “Professional Development Subsidy for Professional Engineers Toolkit”. That this full title varies somewhat from the title stated in the Agreement does not alter the existence of the guideline or the regulated obligation.
The ambiguity said by Utilities Management to arise is that the terms of the guideline are inconsistent with the mandatory nature of the clause. It is said that the guideline imposes a discretionary obligation only and therefore the clause should be read down so as to not impose a mandatory obligation.
Whilst the guideline provides that the employer “may” provide financial support to eligible employees to obtain or maintain professional membership or attain chartered engineering status, my provisional view is that I do not consider that this fact, properly applied in the context of cl 7.19, renders the mandatory obligation discretionary. This is because there is nothing inconsistent with an internal employer policy or guideline being expressed in discretionary terms but an industrial instrument (agreed to by the employer via collective bargaining) subsequently adopting that guideline as the reference point for an employee benefit in an industrial instrument and expressly providing (in the instrument) that the benefit is a mandatory obligation.
Utilities Management point to other alleged inconsistencies between the guideline and cl 7.19 such that the Agreement should be read down. In particular, it observes that the guideline refers to reimbursement by the employer of a percentage (between 50% and 100%) of fees whereas the Agreement refers to a dollar amount. My provisional view is that there is no necessary inconsistency between the two. If reimbursement of $1,500 falls within 50% and 100% of a given fee, there is no inconsistency. To the extent that reimbursement of $1,500 is less than 50% of a given fee, the Agreement’s express terms would apply ($1,500) and any sum above that would only be reimbursed at the employer’s discretion. This is because paragraph 2 of cl 7.19 contemplates a discretionary payment above $1,500.
Historical practice
It is permissible under the principles of interpretation of industrial instruments to have recourse to the history of a particular clause.[8] It is appropriate to do so in this matter because cl 7.19 has a clear historical genesis.
It is apparent from the materials before me that:
cl 7.19 did not exist in any form in any predecessor industrial instrument covering the employer or relevant employees;
to the extent that an entitlement existed for reimbursement prior to the Agreement, it existed between 2009 and 2024 outside the framework of an industrial instrument; and
when initially introduced (in 2009) it included reimbursement of fees of professional bodies “where membership is for professional registration”[9].
Whilst relevant, I do not consider that the historical practice materially assists interpretation of cl 7.19. There is nothing unusual about an industrial instrument creating, for the first time, an enforceable right via collective bargaining regarding a benefit that previously existed outside of such bargaining. Nor does it matter whether that benefit previously existed in discretionary terms or whether the fee was only paid as a subsidy for the purpose of registering qualifications. The terms of the Agreement, which is the product of the collective bargaining that occurred, determines what was agreed, not whether there was similar or dissimilar historical practice. Upon an examination of the historical materials before me, it is apparent that the language used in cl 7.19 differs in material ways from the language used in the initial and subsequent internal expressions of the subsidy.
Bargaining conduct
Principles well established by the courts and Commission concerning the interpretation of enterprise agreements express significant caution about reliance on bargaining conduct to interpret an Agreement.
The caveats include that reference to bargaining conduct should only be made where necessary to resolve ambiguity or uncertainty on the face of the text and, importantly, even then it is only bargaining conduct that objectively establishes (by evidence) a common intention that can be relied upon.
Clearly, and for good reason, the singular subjective intention of a party is not relevant if it cannot be established that the intention was reflected in a common understanding.
It is apparent from the bargaining materials before me and relied on by Utilities Management that the employer, in the course of bargaining, contemplated the collective instrument providing reimbursement of fees for engineer professional development, and not a reimbursement of union fees. However:
Professionals Australia is, as noted, both a trade union (employee association) and an engineer registration assessment entity. That the one organisation lawfully wears two hats, one of which fits the negotiated language governing reimbursement incorporated in an Agreement, does not warrant the Agreement being read down to exclude reimbursement of fees paid to that organisation simply because it wears the other hat. Whether this was known or made expressly clear to Utilities Management during negotiation or whether Utilities Management turned its mind to this possibility is not to the point; and
the reimbursement is not required by cl 7.19 because Professionals Australia is a trade union; rather it is because it is an engineer registration assessment entity.
Relevantly, there appears to be no evidence, either direct or by inference, of a common intention established in bargaining that the Agreement be read down in this manner.
Nor is there evidence, at least not before me, that Utilities Management was misled during bargaining such that the obligation in cl 7.19 or the Agreement as a whole ought to be struck down on the ground of unconscionability or illegality.
It is understandable that an employer, including Utilities Management, would consider an obligation to pay (or reimburse) the union fees of its employees to be controversial, extraordinary and warranting express clarity. Notwithstanding, the force of this consideration falls away once it is recognised that the payment is not obligated by the Agreement because Professionals Australia is a trade union. Rather, it is obligated because it is an engineer registration assessment entity. The negotiated outcome, which is express on the face of cl 7.19, was that fees payable to a professional body of such a character are reimbursable.
For the same reason, I do not consider that the reimbursement obligation conflicts with the freedom of association objects of the FW Act. Section 739(5), which requires the exercise of powers under s 739 to not be inconsistent with the FW Act, does not impugn this conclusion.
Opinion
Noting that I have not conducted a hearing on the matter nor received or tested any evidence, my provisional and non-binding opinion is that it is reasonably arguable that Utilities Management has an obligation under clause 7.19 of the Utilities Management Pty Ltd Enterprise Agreement 2024 to reimburse eligible employees the annual membership fees of Professionals Australia up to a sum of $1,500 (or more at its discretion) provided Professionals Australia is and remains an engineer registration assessment entity and the fee is paid for the purpose of professional membership.
In observing that this is reasonably arguable, I indicate that this is, in my opinion, more likely to be the correct construction of cl 7.19 than the alternate advanced by Utilities Management.
In expressing this opinion, I observe that only a court, and not the Commission, has jurisdiction to make final and binding decisions about rights and obligations under industrial instruments, including the Agreement. In doing so, a court would be called upon to interpret those instruments according to the principles outlined in this decision.
Further, the Commission may determine a dispute by arbitration if authorised by a dispute resolution provision in an industrial instrument, and issue a direction to give effect to any such determination. As noted, those rights of arbitration are reserved in this matter.
This being an opinion only, I do not consider it appropriate to issue the direction sought by Professionals Australia. A direction in those terms would obligate compliance and be more consistent with arbitration, which this is not.
Of course, it also remains open for the parties to re-commence collective bargaining with a view to re-negotiating cl 7.19 to either reflect a different outcome or more clearly express its terms.
DEPUTY PRESIDENT
Appearances:
Mr J Love, with permission, on behalf of Utilities Management Pty Ltd
Mr P Dean of counsel, with permission, on behalf of Professionals Australia
Hearing details:
On the papers
Written submissions:
Utilities Management Pty Ltd trading as SA Power Networks: 8 July 2024
The Association of Professional Engineers, Scientists and Managers Australia trading as Professionals Australia: 22 July 2024
[1] [2024] FWCA 479
[2] [2018] FCAFC 131, [197] (Skene)
[3] [2020] FCAFC 123, [65] (Ridd)
[4] Australian Workers Union v Orica Australia Pty Ltd (Orica) [2022] FWCFB 90; Fresh Food Management Services Pty Ltd [2023] FWCFB 97; Sydney International Container Terminal Pty Limited t/a Hutchinson Ports v CFMMEU[2023] FWCFB 87; The Appellant v Commonwealth of Australia as represented by the Australian Federal Police[2024] FWCFB 196, [23]
[5] Berri [2017] FWCFB 3005; Golden Cockrel [2014] FWCFB 7447
[6] Registered Professional Engineer
[7] Chartered Professional Engineer
[8] Ridd [65] (v); Short v Hercus Pty Ltd [1993] FCA 51
[9] ETSA Utilities memorandum 23 December 2008
Printed by authority of the Commonwealth Government Printer
<PR777914>
0
10
0