Amcor Ltd v Construction, Forestry, Mining and Energy Union

APPELLANT Mr R Goot SC INSTRUCTED BY: Mr G Jolly LEGAL REPRESENTATIVES: Minter Ellison Lawyers

INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES FULL BENCH

CORAM: WRIGHT J, President WALTON J, Vice-President McLEAY C Wednesday 7 April 2004

Matter No IRC 1876 of 2003 ZOOLOGICAL PARKS BOARD OF NEW SOUTH WALES AND THE AUSTRALIAN WORKERS' UNION, NEW SOUTH WALES AND OTHERS

Application by Zoological Parks Board of New South Wales for leave to appeal and appeal against a decision of Deputy President Sams given on 13 March 2003 in Matter No IRC 5530 of 2002 DECISION OF THE COMMISSION [2004] NSWIRComm 85

1 These proceedings involve an application for leave to appeal by the Zoological Parks Board of New South Wales and, subject to leave being granted, an appeal from the decision of Sams DP of 13 March 2003 in which the Deputy President made a determination pursuant to s 175 of the Industrial Relations Act 1996 as to the interpretation of a disputed clause in the enterprise agreement known as the Works and Trades Employees, Taronga Zoo - Zoological Parks Board of NSW 2000 Enterprise Agreement: see Australian Workers' Union, New South Wales Branch and Zoological Parks Board of New South Wales [2003] NSWIRComm 49. The respondents to the appeal are the Australian Workers' Union, New South Wales; the Transport Workers Union of New South Wales; the Electrical Trades Union of Australia, New South Wales Branch; the New South Wales Plumbers and Gasfitters Employees' Union and the Construction, Forestry Mining and Energy Union (New South Wales Branch).

2 The proceedings initially came before the Commission by a notification of dispute lodged by the Australian Workers' Union, New South Wales Branch (Matter No IRC5489 of 2002). The dispute was initially heard by Glynn J who conducted a compulsory conference on 27 September 2002. Following a recommendation issued by her Honour, a second s 130 dispute notification was lodged and the matter was then reallocated to Sams DP. The dispute, in substance, concerned the failure of the employer to pay the Fouled Equipment Allowance ("FE Allowance") specified in the enterprise agreement.

3 The decision of Sams DP concerned the interpretation, pursuant to s 175 of the Act, of clause 11.11 Fouled Equipment Allowance in the enterprise agreement. The provision is expressed as follows: 11.11 An employee required to work on any pipeline or equipment containing body fluids or body wastes and encounters same, shall be paid an additional daily or part thereof allowance as set out in Item 9 of Table 3. This allowance shall not apply in circumstances where sub-clause 12.10 (sic) would normally apply. (The reference to clause 12.10 is a typographical error and should be a reference to clause 11.10, the Chokage provision)

4 The Deputy President considered the disputed clause in the following way: [112] It is trite to observe that a zoo is a highly specialised and unique workplace. To state the obvious, employees are working with animals which have bodies that contain body fluids and which excrete body waste. [113] It was pointed out to the Commission that the precise terms of the disputed clause are reflected in other public sector awards. It must be accepted, I think, that in the context of other public sector employment and as a general rule, the only body fluids or waste that would be encountered by employees, would be human. The expression, for all practical purposes, would therefore only apply to human fluids or waste. However, that cannot possibly be the case in the unique work environment of a zoo. I cannot think of another area of public sector employment comparable to that which exists here. [114] Consequently, I do not accept that it is relevant to rely on how the clause is interpreted and applied under other public sector awards. [115] I turn then to the issue of what was intended by the industrial parties when the enterprise agreement was negotiated in 1999. Firstly, I would observe that there was no evidence that the disputed clause was ever an issue during the 1999 negotiations. [116] Moreover, employees had been receiving the FE Allowance for some time based on the interpretation of the clause now pressed by the Unions. There was no evidence that the respondent made any approach or suggestion during the last enterprise agreement negotiations to alter this arrangement. I simply cannot accept that management was unaware of what was being claimed and under what circumstances. [117] In other words, the industrial parties concluded an enterprise agreement with the full knowledge and understanding that the FE Allowance was being paid for contact with animal waste.

5 In reply to the appellant's argument below that the Fouled Equipment Allowance had been incorrectly and unwittingly paid for a number of years, the Deputy President held: [123] I have difficulty accepting the notion that the FE Allowance was paid "unknowingly". This was not some minor oversight by the payroll office that went unnoticed. It involved approval from supervisors and affected many employees. On its own admission, the respondent accepted that the FE Allowance had been approved, without question, by a number of managers and supervisors over many years. The respondent is a relatively large employer with, presumably, expert industrial relations advice. I find the explanation that there had been a number of changes of management which had not helped to clarify the situation to be unconvincing.

6 During the proceedings, the Deputy President had raised with the parties the applicability of the principle of "condonation". The Deputy President considered that the principle of employer condonation had "relevant and general application to the particular circumstances of this case" (at [124]).

7 The Deputy President distinguished the decision in Application by the TWU for an Ellison's Bulk Haulage Coal Allowance Award [1995] NSWIRComm 136, which the appellant had submitted as "authority for the proposition that generally the Commission will not intervene to require the payment of an over award allowance which has been discontinued by the employer" (at [128]) on the ground that: [129] Again with respect, that is not the principle which I am being asked to consider. The FE Allowance is not an over award payment but an allowance paid according to the provisions of an enterprise agreement. As such, Ellison is entirely distinguishable from the circumstances of this case

8 In concluding that the disputed clause was applicable to animal and human body fluids and waste, the Deputy President made the following findings as to the correct interpretation of the clause: [130] An alternative argument put by the respondent was that even if the term "body fluids and waste" was interpreted to include animal fluids or wastes, the words "required to work on any pipeline or equipment" were relevant to the test of whether the employees' duties involved work on any pipeline or equipment. It was argued that by the use of the word "on", the clause meant employees must repair or do something to the pipeline or equipment. In other words, merely operating the equipment did not fit within the terms of the clause. I cannot agree with this proposition.

[131] Firstly, as a matter of common sense, equipment would include all the tools of the trade operated or used by the employee in the course of his/her employment. This would include small trucks, bins, bobcats, loaders and other equipment cited in the evidence.

[132] Secondly, in my opinion "to work on equipment" includes operating and using the equipment, not merely repairing or doing something to the equipment. Moreover, it seems entirely logical that "doing something to the equipment" must include doing something which causes the equipment to operate.

[133] Accordingly, I would not read the words in such a limited fashion as suggested by Mr Christie.

9 The appellant seeks leave to appeal pursuant to s 187(a) of the Act.

10 The appellant submitted that it is in the public interest that leave to appeal should be granted for the following reasons:

1. The appeal concerns the application of the principle of "condonation" which has not previously been applied by the Commission in the interpretation of industrial instruments under section 175 of the Industrial Relations Act 1996;

2. The appeal raises the matter of whether knowledge can be imputed to the appellant on the basis of knowledge of supervisors and payroll officers;

3. The appeal concerns the interpretation of an allowance which forms part of the Crown Employees (Skilled Trades) Award, the Public Health Service Employees Skilled Trades (State) Award and other public sector instruments, and as such may be a precedent within the public sector; and

4. The appeal raises matters that concern the correct application of principles governing the interpretation of awards or enterprise agreements.

11 The respondents submitted that leave to appeal should be refused, as the matter does not raise any matters of public interest. The respondents submitted that, in essence, the matter was concerned with the construction of a provision in an enterprise agreement and the proceedings, therefore, only concerned the interests of the parties to the particular piece of litigation. The respondents submitted, that on the evidence tendered, the question of imputation of knowledge did not arise. In any event, the respondents submitted that the decision did not go beyond what was permissible under the Act and on the authorities.

12 In reply, the appellant submitted that the proper interpretation of the disputed clause was a matter of public interest as the wording was almost identical to fouled equipment allowance provisions in other public sector awards and agreements.

13 Appeals to the Full Bench of the Commission are governed by s 188 of the Industrial Relations Act. Section 188 provides that an appeal from a Member of the Commission may only be made with leave of the Full Bench and that leave will be granted if the Full Bench is of the opinion that the matter is of such importance that, in the public interest, leave should be granted.

14 The principles to be applied in determining whether to grant leave are well established: leave to appeal to a Full Bench of the Commission will not be lightly or automatically granted and will be restricted to appropriate cases that meet the public interest test stated in s 188(2) of the Act. It will also be relevant to consider whether the appellant has brought a substantially different case in the appeal and whether the appeal raises substantial issues of principle or fact or has wider implications for the jurisprudence of the Commission: see, for example, King v State Bank of New South Wales [2002] NSWIRComm 353 at [52] - [55] and Knowles v Anglican Church Property Trust (No. 2) (1999) 95 IR 380 at 381 - 382.

15 Leave to appeal will not usually be granted where the issues in the appeal have already been the subject of authoritative pronouncement: De Simone Consulting Pty Limited v Ison (2000) 97 IR 478 at 482 and Cash Converters Pty Ltd v Yildiz (1999) 94 IR 474 at 475 - 476.

16 The appellant challenged the Deputy President's interpretation of the clause essentially on two grounds. First, his Honour was in error in finding that the appellant had full knowledge that the FE Allowance was being paid for contact with animal waste. Secondly, his Honour's finding that the clause was applicable to such contact and that the term 'equipment' included tools of the trade.

17 It is well established that leave is rarely granted where an appeal seeks, by and large, to challenge findings of fact which are otherwise open on the evidence. In Box Valley Pty Ltd v Price (2000) 97 IR 484, the Full Bench stated: In any event, we think it should be emphasised, as clearly as we may, that appellate review is not available under this statute as of right, but requires the requisite degree of importance to attract leave to appeal. Mere contest as to findings of fact which might otherwise remain open on the evidence will generally, in the absence of other considerations, not attract leave. See also King v State Bank of New South Wales at [54] and Weisser v Spur Group Pty Limited (2003) 121 IR 89 at [33].

18 The appellant set out 11 grounds of appeal. However, the appellant, in substance, challenged the Deputy President's interpretation of the disputed clause and a number of factual determinations. In short, the grounds of the appeal, may be summarised as follows:

The Deputy President erred in his interpretation of the dispute clause in failing to consider or give sufficient weight to the words of the disputed clause as a whole and read in context and to the history of the disputed clause in the Crown Employees (Skilled Trades) Award;

The Deputy President erred in finding that the phrase "body fluids or body wastes" applied to animals as well as humans and that the word "equipment" applied to all tools of the trade operated or used by the employees in the course of their employment;

The Deputy President erred in irrelevantly considering previous practices of the parties in determining a matter of interpretation. Alternatively, if this consideration was not irrelevant, the Deputy President erred in failing to consider or give sufficient weight to the evidence that the FE Allowance was only rarely paid between 1994 and 1999;

That the Deputy President erred in applying the principle of "condonation" in the interpretation of the disputed clause and had no proper basis for finding there was condonation by the appellant;

That the Deputy President erred in finding that the relevant officers of the appellant had full knowledge that the FE Allowance was being paid for contact with animal waste at the time the enterprise agreement was concluded and that, in any event, such a finding was irrelevant for the purposes of interpreting the disputed clause;

That the Deputy President erred in finding that the principles raised by Application by the TWU for an Ellison's Bulk Haulage Coal Allowance Award [1995] NSWIRComm 136 were inapplicable in the interpretation of the disputed clause; and

That the Deputy President had no proper basis for finding that the appellant's motivation for discontinuing the FE Allowance in some circumstances was a tactic in enterprise bargaining negotiations.

19 The appellant provides a history of the disputed clause. It had been included in various enterprise agreements between the parties since 1994. Prior to 1994, the FE Allowance was available to various skilled tradesmen employed at the Zoo pursuant to the Crown Employees (Skilled Trades) Award (or its predecessor). The appellant submitted that the history of the disputed clause demonstrated that the FE Allowance was directed at limited plumbing work, in particular, where human waste or body fluids was encountered whilst an employee was working on a pipeline or like equipment containing such material. The appellant submitted that the FE Allowance would apply to employees who work on chokages but to whom the Chokage Allowance would not normally be paid, for example, to plumbing apprentices.

20 The appellant submitted that the Deputy President erred in his interpretation of the disputed clause which was manifestly contrary to the plain meaning of the words used. The appellant submitted that the correct interpretation of the clause is as follows:

a. "equipment" describes pumps and other equipment that are part of, or associated with, pipelines and which also contain body fluids or waste

b. the requirement to "work on" the pipeline or equipment means to repair or doing something to the equipment, not merely to use or operate it. If the latter meaning were intended, the words "work with" or "work using" would have instead been used.

c. The pipeline or equipment must "contain" the fluid or waste in question.

d. "Body fluids or body wastes" means human body fluids or waste. This is the correct interpretation considering that the clause is directed at work on sewerage pipes and the FE Allowance was originally included in the agreement at the same time as the Animal Houses allowance.

21 The appellant submitted that the disputed clause retained an "anti-overlap" provision which precluded payment of the FE Allowance in circumstances when the Chokage Allowance would normally be payable. The appellant further submitted that the duties and circumstances for which the respondents are claiming the FE Allowance have been compensated for under clause 11.9, a clause which provides a $10 increase in lieu of various allowances including the Animal Houses allowance and dirt money.

22 The appellant submitted that the Deputy President erred in applying the principle of condonation to the interpretation of industrial instruments as it is impermissible to have regard to the conduct of parties bound by an agreement, after it has been made, for the purpose of interpretation: Seamen's Union of Australia v Adelaide Steamship Co Ltd (1976) 46 FLR 444 at 445 and Amcor Ltd v Construction, Forestry, Mining and Energy Union [2003] FCAFC 57 at [48].

23 The appellant further submitted that in any case, there was no proper evidentiary basis for the finding of condonation for the following reasons:

a. Contrary to the Deputy President's findings, the evidence of the payroll records showed that the relevant employees prior to 2000 rarely claimed the FE Allowance.

b. The Deputy President found that three out of the four AWU witnesses agreed that the FE Allowance had only been claimed in a significant manner after 1999.

c. There was no, or no sufficient evidence, to allow the Deputy President to find that management was aware of what was being claimed and under what circumstances with respect to the history of FE Allowance claims made in the few years prior to 2002. The only evidence before the Commission was that management were not aware of the claims since the claims were signed off by the supervisors and then processed directly by payroll. The appellant's evidence was that management did not become aware of the claims for contact with animal waste until 2002, during a review of bundy cards.

24 The appellant submitted that, if consideration of previous practices was relevant for the purposes of interpreting the disputed clause, then it was equally relevant that the FE Allowance was rarely claimed or paid by the parties between 1994 and 1999.

25 The respondents submitted that the appellant had not provided a complete characterisation of the Deputy President's decision in their submissions. In particular, the respondents noted that his Honour's conclusion that other public sector awards would not be relied upon in interpreting the disputed clause was supported by the lack of actual evidence before the Commission on that point. Further, the respondents submitted that a Member of the Commission sitting alone was not required to make an express finding in respect of every fact leading to, or relevant to, their final conclusion of fact: Soulemezis v Dudley (Holdings) Pty Ltd (1987) 10 NSWLR 247.

26 The respondents submitted that, despite the appellant's contention, the Deputy President did state the circumstances in which he regarded the FE Allowance was payable, for example at [93] - [95], [98] of his decision. The respondents also provided an account of the current procedure for claiming the allowance. In essence, employees filled in a claim form specifying when and how they came into contact with the human or animal waste when working on equipment in the course of their duties.

27 The respondents disagreed with the appellant's historical and contextual assessment of the disputed clause. In particular, the respondents submitted that the terminology used in the two provisions suggested that the FE Allowance had a broader interpretation, in terms of location, functions, and/or activities performed than the chokage provision. For example, the FE Allowance would apply where work was performed on any pipe, whereas the chokage allowance was only paid where work was performed on a soil, waste, drainpipe or pump, scupper or septic tank.

28 The respondents submitted that there was no evidence, award history or any other material tendered by the appellant to support the appellant's construction of the disputed clause, for example, the appellant's submission that the FE Allowance was included into the special rates provision in clause 11.9 would not be supported.

29 In reply to the appellant's proposed interpretation of the disputed clause, the respondents submitted there was no evidence of any substance to support the trade meaning the appellant proposes. In any event, even if there was such evidence, the Deputy President was entitled to prefer the evidence of the respondents' witnesses.

30 The respondents submitted that the correct construction of the clause was as follows:

a. Direct physical contact with the fluids or waste is not required.

b. The requirement that the equipment must "contain" body fluids or body wastes is suggestive of the close proximity of the employee to the material, which would be necessitated when cleaning the equipment.

c. The employees covered by the enterprise agreement are multi-skilled and they perform a wide range of duties including working together to clean the enclosures of effluent. In doing so, the equipment necessarily becomes fouled by effluent. Therefore, the FE Allowance should be payable.

d. The FE Allowance and Chokage Allowance are separate provisions and the FE Allowance covers a different and broader range of duties.

e. Given the nature of work undertaken by employees in a zoo, there is no reason for importing a limiting word such as 'human' into the provision.

31 The respondents submitted that the principle that it is "impermissible to have regard to the conduct of parties bound by an agreement after it has been made for the purposes of interpretation" has been applied in the cases relied upon by the appellant as a rule of evidence to exclude certain evidence. The respondents submitted that, since the Deputy President was sitting in the capacity of a Member of the Commission, by virtue of s 163(1), he was not bound by the rules of evidence.

32 The respondents submitted that it was open to the Deputy President to prefer their evidence on whether the FE Allowance had been claimed prior to 2000.

33 The appellant submitted that the Deputy President's interpretation of the disputed clause was not a finding of fact and thus the respondents' reliance on the authority that a Member of the Commission sitting alone is not required to make an express finding in respect of every fact leading to their final conclusion of fact was misconceived. In any event, the appellant submitted that the Deputy President was not entitled to disregard the clear words of the disputed clause which required that the pipeline or equipment 'contain' animal waste.

34 The appellant submitted that the respondents were in effect endeavouring to rewrite the wording of the disputed clause. In particular, the suggested requirement that equipment may be "fouled by" body fluids or body waste was a different concept to equipment "containing" body fluids or waste, which was the wording of the clause. The appellant further submitted that the interpretation put forward by the respondents removed the requirement that the employee "encounter same".

35 The appellant submitted that evidence was adduced below regarding the interpretation of the FE and Chokage Allowance by the Department of Public Works and Services and relied on the affidavit of Heather Turner.

36 As to the proper interpretation of the clause, the appellant submitted that the fact that the enterprise agreement overrides the Crown Skilled Trades Award is irrelevant for the purposes of interpreting the disputed clause as it does not alter the history of the disputed clause. Further, the appellant submitted that there was no intention to sever any association with the Chokage clause as the disputed clause still contained an anti-overlap provision referring to the Chokage Allowance.

37 In reply to the respondents' submission on the application of condonation, the appellant submitted that whether or not the appellant intended that the FE Allowance was payable for contact with animal waste was irrelevant for the purposes of interpreting the disputed clause. As to the issue of the history of FE Allowance claims, the appellant relied on the payroll records and graphs in evidence. The appellant reiterated that the evidence showed that the appellant's management were not aware that the FE Allowance was being claimed for contact with animal waste.

38 The appellant further submitted that if by applying the principle of condonation, the Deputy President was not interpreting the clause as a matter of law but arbitrating on a dispute, then he was bound to apply the wage fixing principles.

39 We grant leave to appeal in this case in order to deal with important questions as to the principles of interpretation of industrial instruments, which are central to the Commission's jurisdiction, where prima facie a number of the approaches relied upon by the Commission at first instance were erroneous: see Knowles v Anglican Church Property Trust (No 2).

40 There are a number of provisions of the enterprise agreement that are pertinent to these proceedings. Clause 1 is the title clause which indicates that the agreement relates to Taronga Zoo. Clause 2 is entitled "Parties to the Agreement" and names the relevant unions and the "Works and Trades Section of Taronga Zoo". Clause 3.1 deals with the coverage of the agreement and limits the coverage to the employees in the "Works and Trades Section of Taronga Zoo" who are employed as tradespersons, apprentice tradespersons, labourers and drivers. Clause 5 describes the aims of the agreement as being the maintenance of a productive, co-operative and harmonious workplace in the "Works and Trades Section of Taronga Zoo".

41 Clause 11 sets out the allowances payable and incorporates by reference parts of Table 3 into these provisions. Clause 11.9 defines special rates as follows: 11.9 Special Rates Built into the wages (in 1994) is a component of $10.00 per week which is paid in lieu of any claims for special rates eg dirt money, height money, wet work etc.

42 Clauses 11.10 and 11.11 are in the following terms: 11.10 Chokage If an employee is employed upon any chokage and is required to open up any soil pipe, waste pipe, drain pipe or pump conveying offensive material or a scupper containing sewerage or is required to work in a septic tank in operation the employee shall be paid an additional allowance as set out in Item 8 of Table 3. 11.11 Fouled Equipment An employee required to work on any pipeline or equipment containing body fluids or body wastes and encounters same, shall be paid an additional daily or part thereof allowance ($4.66 pd or part thereof) as set out in Item 9 of Table 3. This allowance shall not apply in circumstances where sub-clause 12.10 (sic) would normally apply.

43 The relevant principles to be applied when interpreting industrial instruments are well settled: for example, Kingmill Australia Pty Ltd t/a Thrifty Car Rental v Federated Clerks' Union of Australia, New South Wales Branch (2001) 106 IR 217 and Construction, Forestry, Mining and Energy Union (New South Wales Branch) v Delta Electricity [2003] NSWIRComm 135 at [44] - [46]. Broadly speaking, the primary consideration in such matters is the actual words used (and these should be given their plain, ordinary meaning) and the context in which the words are used.

44 The construction of an award may include the history of the instrument in some circumstances. The words must be considered in the context of the instrument as a whole although in a practical sense, some parts of the documents will be very significant and others less significant or of no moment at all. We note, in this respect, the observations of Walton J, Vice-President in Fox v GIO Australia Ltd (2002) 56 NSWLR 512, (2002) 120 IR 401 at [46] as follows: [46] The modern approach to statutory interpretation insists that the context be considered in the first instance, not merely at some later stage when ambiguity might be thought to arise, and uses "context" in its widest sense to include such things as the existing state of the law and the mischief which, by reference to legitimate extrinsic material such as explanatory memoranda and law reform reports, one may discern the statute was intended to remedy: CIC Insurance Ltd v Bankstown Football Club (1997) 187 CLR 384 at 408.

45 The principle of considering the surrounding circumstances in interpreting the words of a written instrument was discussed by Mason J in Codelfa Construction Pty Ltd v State Rail Authority (NSW) (1982) 149 CLR 337 at 348 in the following way: On the other hand, it has frequently been acknowledged that there is more to the construction of the words of written instruments than merely assigning to them their plain and ordinary meaning - see, for example, the remarks of Knox C.J. in Life Insurance Co. of Australia Ltd. v. Phillips (1925) 36 CLR 60, at p 69. This has led to a recognition that evidence of surrounding circumstances is admissible in aid of the construction of a contract. So Lord Wilberforce in L. Schuler A.G. v. Wickman Machine Tool Sales Ltd. (1974) AC 235, at p 261 was able to state the broad thrust of the rule in this way: The general rule is that extrinsic evidence is not admissible for the construction of a written contract; the parties' intentions must be ascertained, on legal principles of construction, from the words they have used. It is one and the same principle which excludes evidence of statements, or actions, during negotiations, at the time of the contract, or subsequent to the contract, any of which to the lay mind might at first sight seem to be proper to receive. His Lordship noted that evidence of surrounding circumstances is an exception to the rule, but he had no occasion to discuss its scope for there it was not, as it is here, a critical question. (at p348)

46 This issue has also been referred to more recently by the High Court in Royal Botanic Gardens and Domain Trust v South Sydney City Council (2002) 186 ALR 289 where Gleeson CJ, Gaudron, McHugh, Gummow and Hayne JJ stated at [10]: In Codelfa , Mason J (with whose judgment Stephen J and Wilson J agreed) referred to authorities (In particular, speeches of Lord Wilberforce in Prenn v Simmonds [1971] 1 WLR 1381 at 1383-1385; [1971] 3 All ER 237 at 239-241; L Schuler AG v Wickman Machine Tool Sales Ltd [1974] AC 235 at 261; and Reardon Smith Line Ltd v Yngvar Hansen-Tangen [1976] 1 WLR 989 at 995-997; [1976] 3 All ER 570 at 574-576) which indicated that, even in respect of agreements under seal, it is appropriate to have regard to more than internal linguistic considerations and to consider the circumstances with reference to which the words in question were used and, from those circumstances, to discern the objective which the parties had in view. In particular, an appreciation of the commercial purpose of a contract ( Reardon Smith Line Ltd v Yngvar Hansen-Tangen [1976] 1 WLR 989 at 995-996; [1976] 3 All ER 570 at 574): "presupposes knowledge of the genesis of the transaction, the background, the context, the market in which the parties are operating". Such statements exemplify the point made by Brennan J in his judgment in Codelfa (1982) 149 CLR 337 at 401: "The meaning of a written contract may be illuminated by evidence of facts to which the writing refers, for the symbols of language convey meaning according to the circumstances in which they are used."

47 It is clear from the authorities that whilst it is permissible to have regard to the surrounding circumstances in construing a written document, it is impermissible to consider 'evidence of user'.

48 We now return to consider the words themselves used in the agreement. There are a number of conclusions that may be drawn.

49 First, the disputed clause must be considered in its context: Codelfa Construction at 348 and CFMEU v Delta Electricity at [44]. The title, parties to the agreement, objects and coverage clauses clearly indicate that the agreement applied to the functions of employees at Taronga Zoo. Thus, the terms of the agreement should be construed as concerning the operations of that special enterprise. Those clauses also refer to the agreements being confined in its operation to the Works and Trades section of that Zoo. Given those two features of the agreement, it follows that it is intended to operate with respect to the work of the relevant section in the operations of the enterprise which include a great number of visitors and the retention and care of animals. Thus, work in relation to wastes will include work as to both human and animal types of waste.

50 Secondly, clauses 11.9, ("Special Rates"), 11.10 ("Chokage") and 11.11 ("Fouled Equipment") must be read together. Several of the special rates allowances were rolled up into the $10 provided for by clause 11.9. However, this amount was to compensate for the more traditional disability rates (for example, dirt money, height money and wet work money) and cannot include chokage or fouled equipment allowance. Mr Goot described clause 11.11 as containing an "anti-overlap" provision. The significance of the inclusion of the phrase "this allowance shall not apply in circumstances where sub-clause 11.10 would normally apply", is the drafter considering that where there was an overlap between the chokage and fouled equipment clauses, the employee necessarily could not receive both allowances if the work fell in the conceptual area of overlap.

51 Thirdly, the language used by the drafter in the disputed clause could well be described as "coy", for example the reference to "bodily fluids" instead of "faeces". However, had it been intended that the clause be limited to human waste, there would have been a reference to "sewage" since the term "sewage" usually pertains to human waste. We note that clause 11.10 ("Chokage") uses the term "sewerage" (sic).

52 The second level of analysis is to consider the clause in a practical sense, again by reference to the language used. It was intended to provide compensation for employees working in unpleasant situations and specifically, in a particular kind of unpleasant circumstance. It would be illogical to provide an allowance for some kinds of unpleasant situations and not to do so in other comparable unpleasant circumstances. An exception would be if such compensation was incorporated into the salary and there is no evidence of that in this case. For example, such compensation is provided in the salary of animal keepers (who are covered by a separate industrial instrument) since part of their duties is to clean out the animal cages and enclosures. Whereas in this case, the clause was not applicable to all workers covered by the agreement nor can those workers to whom the clause applies, claim the allowance on a daily or constant basis.

53 We do not consider that the history of the disputed clause prior to the making of the agreement assists in its interpretation, in this regard, as the earlier provisions arise in an entirely different context.

54 It follows, in our view, that upon its proper construction, clause 11.11 of the agreement applies to both human and animal wastes. In this respect, we consider that the conclusions reached by Sams DP were correct.

55 There then arises the further contentions of the appellant as to the construction of the disputed clause. Each word in the disputed clause must be given some meaning. We shall deal seriatim with each contention advanced by the appellant as to the operation of clause 11.11.

As to the meaning of the word "equipment", the word "or" appearing in the clause plainly involves a disjunction. Equipment is relevantly not confined in the clause to equipment associated with a pipeline and by its ordinary meaning will include machinery and tools. Further, the words "any pipeline" should not be read narrowly in the context of the clause and would include any system which holds or conveys fluids. The relevant evidence at first instance revealed that Works and Trades employees of the appellant were involved in cleaning the moats, ponds and stormwater drains. In these situations, exposure to contamination from bodily fluids may well occur.

Thus, when the purpose of the clause is considered, it is clear that the appellant's contention that the term "equipment" describes pumps and other equipment that are part of, or associated with pipelines cannot be upheld. We consider that the Deputy President was correct in his description of equipment for the purposes of the clause.

The use of the words "to work on" does not, as the Deputy President found, involve merely using or operating the pipeline or equipment, but requires, in our view, an element of repair or maintenance, possibly using relevant equipment to perform the work. We agree with the submissions of the respondent that if a different meaning were intended it is likely that phrases such as "work with" or "work using" would have been used.

The final contention of the appellant related to the use of the word "contain", which, it was submitted, required that the pipeline or equipment contained the bodily fluid or waste. The term "contained" is relevantly defined in the Oxford English Dictionary, as "bounded, limited, restricted, restrained, shut up, enclosed, imprisoned" and in the Macquarie Dictionary, as "to have within itself; hold within fixed limits… comprise, include". We do not consider that, in the present context, the term "contain" can be limited to mean "embodied in". It is difficult to conceive how in the context of Work and Trades employees working in a zoo, the disputed clause could operate in such a confined manner. For the clause to have some operative effect, it must include the situation where the bodily fluid or waste in question is "on" the pipeline or equipment. However, this construction does not necessarily extend to the situation where, as suggested by the Deputy President, a truck is operated to collect and empty SULO bins that are filled with animal waste, although it may well extend to the use of equipment to clean spillages of animal waste from a roadway. As was discussed earlier, it is not the usage of the instrument that is in question, but the exposure to contamination.

There must be actual 'contact', although not necessarily direct or actual physical contact, with the bodily fluid or waste. For example, if an employee used a rake to rake sand, straw or grass which contained some animal waste and the employee did not in a particular case actually touch the waste, the fouled equipment allowance could be paid.

56 We consider that both parties were in error in arguing the case on an all or nothing basis. We consider that the interpretation to be given to the relevant provision is one that is not quite as wide as that provided by the Deputy President's interpretation. On this point, we note that what a court considers to be the correct interpretation is not limited to the particular contentions put by the parties. This conclusion is usefully set out in Pearce and Geddes, Statutory Interpretation in Australia, 5th ed, Butterworths, Sydney 2001 at pp. 4-5, where the learned authors state: McGarvie J in Accident Towing & Advisory Committee v Combined Motor Industries Pty Ltd [1987] VR 529 at 547 pointed out that responsibility rests with the court for the interpretation to be placed on an enactment. He cited Lord Wilberforce in Saif Ali v Sydney Mitchell & Co (A Firm) [1980] AC 198 at 212: 'Judges are more than mere selectors between rival views - they are entitled to and do think for themselves'. The fact that counsel have not supported a particular interpretation of legislation does not, indeed must not, prevent a court from adopting that interpretation if the court considers the interpretation to be correct. The approach of McGarvie J was adopted in Whelpton v Kur-Ring-Gai Council (1994) LGERA 120 at 126. See also Gibson v Western Sydney Area Health Service [2003] NSWIRComm 465 at [32].

57 Finally, we should observe that the Deputy President's reliance upon the principle of condonation in interpreting the agreement before him was contrary to principle. The principle of condonation in this jurisdiction has been applied in cases of employee misconduct and related cases in the unfair dismissal field: see for example Burge v NSW BHP Steel Pty Ltd (2001) 105 IR 325, Australasian Transport Officers Association v Department of Motor Transport (1988) 25 IR 235 and Re Clarke and Metropolitan Meat Industry Board [1967] AR (NSW) 16. We do not consider that there is any role for the principle in the area of interpretation of industrial instruments.

58 Further, the principle of condonation seems, conceptually, to intersect with the use of "evidence of user", that is, where the court has regard to how the parties have applied the instrument in practice. It is well established that it is generally impermissible to have regard to the subsequent conduct of parties as an aid in the interpretation of a written instrument, such as a contract or industrial instrument: see, for example, Seamen's Union of Australia v Adelaide Steamship Co Ltd at 445 where the Australian Industrial Court discussed the advice of the Privy Council in Watcham v Attorney-General of the East Africa Protectorate [1919] AC 533 and the judgment of the House of Lords in L Schuler A.G. v Wickman Machine Tool Sales Ltd [1974] AC 235 and, in considering the latter decision, stated: The issue there was whether the conduct of the parties to a commercial agreement was admissible in aid of interpretation of that agreement and the House of Lords unanimously decided that, in general, an agreement could not be construed in the light of the subsequent actions of the parties. Lord Reid expressed the view that there may be special reasons for construing the title to land in the light of subsequent possession, but found no support for any general principle permitting subsequent actions to be used in throwing light on the meaning of a contract. Lord Wilberforce was more severe in his criticism of reliance on Watcham's case, which he described as a "refuge of desperation". No other authority on the point has been referred to us and, in these circumstances, we decided to apply Schuler's case and refused to allow the evidence of subsequent conduct.

59 The decision in Seamen's Union has been followed in other cases by this Commission and its predecessors and also in other jurisdictions: see, for example, Re Security Officers (Waterfront) Award (1988) 26 IR 1 at 7-8 and Health and Research Employees' Association of New South Wales v Baptist Community Services NSW and ACT (2002) 122 IR 178 at [74] - [75]; in the Federal Court in Amcor Ltd v Construction, Forestry, Mining and Energy Union at [48]; and, in the New South Wales Court of Appeal in Magill v National Australia Bank Limited [2001] NSWCA 221, [2001] Aust Contract R 90-131 at [50] to [53].

60 We further note that, in any event, the principle of condonation by definition involves reciprocation or non-reciprocation in the light of another's conduct or a given course of action, not as was argued in this case, condonation by one's own conduct. That is, if a party elects to accept a course of conduct that amounts to misconduct or in some way involves fault, the party cannot rely on any right that may have arisen as a result of that action. Thus, in the context of employee misconduct justifying summary dismissal, the employer may be taken to have waived its right of summary dismissal if it condones the misconduct and elects to treat the contract as continuing.

61 Although the concept of waiver in the sense of election and/or estoppel does not apply in this case, we note that there may be a very rare case where the concept of Verwayen estoppel may be relevant. We refer in particular to Mason CJ's statements in Commonwealth of Australia v Verwayen (1990) 170 CLR 394 at 406 - 407: According to its strict legal connotation, waiver is an intentional act done with knowledge whereby a person abandons a right by acting in a manner inconsistent with that right: Craine v. Colonial Mutual Fire Insurance Co. Ltd. (1920) 28 CLR 305 at p 326; Grundt v. Great Boulder Pty. Gold Mines Ltd. (1937) 59 CLR 641 at p 658. However, the better view is that, apart from estoppel and new agreement, abandonment of a right occurs only where the person waiving the right is entitled to alternative rights inconsistent with one another, such as the right to insist on performance of a contract and the right to rescind for essential breach: see Kammins [ Co. v Zenith Investments (1971) AC 850] at p 883. This category of waiver is an example of the doctrine of election. Another category of waiver is one in which a person is prevented from asserting, in response to a claim against him, a particular defence or objection which would otherwise have been available. Here waiver is said to arise when the person agrees not to raise the particular defence or so conducts himself as to be estopped from raising it: see Kammins , at p 883.

62 We consider that the appeal should be upheld albeit in a minor respect: see sub-para 4 of para [55] of these reasons. We also consider that a formal order should be made pursuant to s 175 of the Industrial Relations Act preferably in an agreed form. The parties should confer as to the orders appropriate to give effect to this decision, including the appropriate order under s 175. The appellant shall within 21 days file and serve short minutes of the orders as agreed or in default of agreement as it proposes.

2. The appeal is upheld in part as set out in this decision.

3. The parties are directed to confer as to the orders appropriate to give effect to this decision, including the appropriate order under s 175 of the Industrial Relations Act. The appellant shall within 21 days file and serve short minutes of the orders as agreed or in default of agreement as it proposes. _____________________

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