Australasian Meat Industry Employees Union (WA Branch) v Woolworths Limited

Federal Court of Australia (Full Court)|1998-10-08|Before: Industrial Australia P, Catliff J, Gilmour J, Spender J, Gilmour JJ

BACKGROUND TO THE ALLEGED BREACH 40 On 13 June 2005 the Union lodged a Notice of Initiation of Bargaining Period ('the Notice') under s 170MI of the Act and r 58 of the Australian Industrial Relations Commission Rules 1998 (Cth). 41 Section 170MI provides for the initiation of the bargaining period in the following terms: '170MI (1) If: (a) an employer; or (b) an organisation of employees; or (c) an employee acting on his or her own behalf and on behalf of other employees; wants to negotiate an agreement under Division 2 or 3 in relation to employees who are employed in a single business or a part of a single business, the employer, organisation or employee (the initiating party) may initiate a period (the bargaining period) for negotiating the proposed agreement. (2) The bargaining period is initiated by the initiating party giving written notice to each other negotiating party (see subsection (3)) and to the Commission stating that the initiating party intends to try: (a) to make an agreement with the other negotiating parties under Division 2 or 3; and (b) to have any agreement so made certified under Division 4. …' 42 The Notice stated the intention of the Union to try to make an agreement with Woolworths as the other negotiating party under Div 2 or 3 of the Act and to have any such agreement certified under Div 4 of the Act. The proposed agreement, if made, would have replaced the 2002 Agreement. The Notice contained particulars which complied with the provisions of s 170MJ of the Act. In a broad and generic way it set out the matters that the Union as the initiating party proposed should be dealt with by the Agreement being conditions of employment including matters such as rates of pay, improvements to productivity and efficiency, provision of career path for employees, review of supervisory and managerial instructions and appropriate termination, change and redundancy provisions. 43 On 16 October 2005 Mr Graeme Haynes, the then branch secretary of the Union wrote to Ms Robyn Atkinson, the Regional Human Resources Manager of Woolworths, in which he referred to the Notice as well as the provisions of c 1.3 and in particular cl 1.3.2 of the 2002 Agreement. The letter, relevantly, contained the following: 'I refer specifically to clause 1.3.2 and numerous calls to yourself by myself to initiate preliminary discussions and your inability, due to deliberations in your National Office to advise me of any commitments to commence bargaining in good faith. … We are optimistic that you will not seek to register a "four walls agreement" with another union, or a Section 170LK Agreement which was successfully opposed in the last round of negotiations. … Could you please clarify that Woolworth's attitude is towards negotiating a Section 170LJ EBA with the AMIEU (WA Branch)?' 44 Ms Atkinson thereafter spoke to Mr Haynes approximately three times about negotiating a new agreement with the appellant. On each of those occasions she told Mr Haynes that Woolworths had not decided whether it would be negotiating a new agreement with the Union. 45 Sometime during the second half of 2005, although Ms Atkinson was not involved in the decision, Woolworths decided that, for a number of operational reasons, it would negotiate a collective agreement with the SDA that would replace both the 2002 Agreement and an agreement which it already had with the SDA made on 16 July 2004. 46 By email dated 24 November 2005 Ms Atkinson advised Mr Haynes that she was tied up with the acquisition by Woolworths of certain stores from Action Supermarkets Pty Ltd as well as being involved in the opening of thirteen new stores. She said that she would contact him the following week in relation to the matter of the agreement with the Union. 47 On 16 December 2005 Mr Da Silva, Vice-President of the Union, was advised by Mr Brad Bolin, the newly appointed Regional Manager for Woolworths in Western Australia, that a meeting in relation to the negotiation of a replacement agreement was inconvenient for him and that the earliest he could arrange to meet was 4 January 2006. 48 On that date Mr Da Silva did attend a meeting with Mr Bolin and Ms Atkinson but was told that Woolworths had reached agreement with the SDA which purported to include provision for the terms and conditions of employment for the meat room staff employed by Woolworths, and who had been covered by the 2002 Agreement. At that meeting Mr Da Silva was informed that Woolworths would not be negotiating with the Union in relation to a certified agreement in replacement of the 2002 Agreement which advice was confirmed by Ms Atkinson in a letter to Mr Da Silva dated 4 January 2006. 49 On 7 January 2006 an agreement entitled Woolworths Limited (WA) Agreement 2005 ('the 2005 Agreement') was provided to Mr Da Silva as the document which was to be submitted to the Commission for certification under the Act. 50 By letter dated 6 January 2006 Mr Haynes wrote to Ms Atkinson complaining about what had occurred and foreshadowing that the Union may take action to protect the interests of its members. Indeed on the very same day it lodged a Notification of an Industrial Dispute under s 99 of the Act in relation to its asserted concerns that despite its repeated efforts to negotiate a replacement agreement with Woolworths it had failed to engage in any negotiations. The section 99 notification came on before the Commission on 11 January 2006. This led to a private conciliation conference before a Commissioner held on a without prejudice basis at the conclusion of which the Commissioner advised the Union that if it wanted to negotiate a collective agreement with Woolworths it should make contact with it to that end. The Commissioner then listed a "report back" conference for 20 January 2006. However between the date of the private conciliation conference and 20 January the Union did not contact Ms Atkinson or anyone else at Woolworths in relation to having discussions concerning such a collective agreement. 51 On or about 16 January 2006 Ms Atkinson received by facsimile transmission a Notice of Intention to take Industrial Action from Mr Haynes. This gave notice of intended protected action to commence no earlier than 19 January 2006 being withdrawal of labour by employees who were or who were eligible to be members of the Union in order to enable them to meet and discuss the making of an agreement. 52 On 18 January, Ms Atkinson by facsimile notified the Union amongst others that in Woolworth's view the notice was defective and did not comply with the relevant statutory requirements in the Act. No response was received to this letter. On 19 January 2006, 9 out of approximately 406 meat workers employed by Woolworths absented themselves from work to attend the Union's meeting foreshadowed in the notice. No other industrial action was taken. 53 The 2005 Agreement was approved by the relevant employees of Woolworths on 4 February 2006. Each of its 8059 employees in Western Australia was given an opportunity to vote on the agreement. 54 The 2005 Agreement was certified by the Commission on 20 February 2006. 55 On 3 February 2006 the present proceedings were instituted in the Court.

REASONING OF PRIMARY JUDGE 56 Nicholson J reached the following conclusions: (a) upon its proper construction clause 1.3.2 is an agreement by the parties that negotiations to renew the agreement would commence two months prior to its expiration. As to what was meant by "expiration" his Honour had regard to the provisions of s 170LX of the Act which relevantly provides: '(1) A certified agreement comes into operation when it is certified and, subject to this section, remains in operation at all times afterwards. (2) The agreement ceases to be in operation if: (a) its normal expiry date has passed; and (b) it is replaced by another certified agreement.' (b) given the statutory effect of s 170LX(2) that it could not be said that the word "expiration" in clause 1.3.2 took its colour from clause 1.3.1. That is to say, the effect of s 170LX was that the 2002 Agreement would not have ceased to be in operation until both its nominal expiry date had passed and it was replaced by another certified agreement. The nominal expiry date, it was said, was 15 December 2005 (cl 1.3.1). The consequence, it was held, was that the contractual provision relating to expiry in clause 1.3.2 had been overtaken by the statutory provision applicable to certified agreements. It followed, as his Honour found, that it was apparent that as at 15 October 2005 being the date which was 2 months prior to the so-called nominal expiry date, there could not have been any breach of cl 1.3.2 by Woolworths because the clause then had no relevant application. The earliest date, it was held, upon which any obligation could have arisen under cl 1.3.2 was 20 December 2005 being two months prior to the date of certification of the 2005 Agreement. The appellant could not then, it was held, establish a breach of cl 1.3.2 as at 15 October 2005. (c) the effect of the giving of the Notice Initiating the Bargaining Period under s 170MI of the Act was to initiate the statutory bargaining process which "took legal priority over any provision of the 2002 Agreement and so over cl 1.3.2." The consequence, so his Honour found, was that the source of the obligation to negotiate rested not on cl 1.3.2 but on the relevant statutory provisions, and, so it followed, the appellant could not rely upon any alleged breach of cl 1.3.2 as the foundation of its claim.

THE GROUNDS OF APPEAL 57 The Union was granted leave to amend its grounds of appeal at the hearing. It contends that his Honour was wrong in law in failing to find that Woolworths had breached cl 1.3.2 of the 2002 Agreement. This was particularised in two ways. It was submitted that his Honour was in error when he: (a) found that the effect of invoking a statutory bargaining period pursuant to s 170MI of the Act was to rest the parties' obligations to negotiate on the statutory provisions and negate any such obligation under the agreement and failed to find that the statutory bargaining period was complementary to any subsisting rights or obligations under the 2002 Agreement to negotiate ("the first particular"); and (b) found that the respondent's obligations under the 2002 Agreement (to commence negotiations) only arose on 20 December 2005 being two months before the 2005 Agreement came into operation ("the second particular").

THE JURISDICTION OF THE COURT TO CONSTRUE CLAUSE 1.3.2 OF THE 2002 AGREEMENT 58 It is necessary firstly to deal with the threshold submission by the respondent to the effect that the Court does not have jurisdiction to review the interpretation placed by the learned trial judge upon cl 1.3.2 of the 2002 Agreement by virtue of the provisions of s 413A(2) of the Act. 59 Section 413A(1) of the Act provides as follows: 'The Court may give an interpretation of a certified agreement on application by: (a) the Minister; or (b) an organisation or person bound by the certified agreement; or (c) an employee whose employment is subject to the agreement.' 60 Section 413A(2) of the Act provides as follows: '(2) The decision of the Court is final and conclusive and is binding on: (a) the organisations and persons bound by the agreement; and (b) the employees whose employment is subject to the agreement; who have been given an opportunity of being heard by the Court.' (Emphasis added) 61 The term "Court" is defined in the Act as "the Federal Court of Australia" and the term "Full Court" is defined in the Act as "a Full Court of the Court". 62 It is accepted by Woolworths that no formal application pursuant to s 413A of the Act was made to the Court to interpret cl 1.3.2 of the 2002 Agreement. 63 However, it was contended that it was a "legal reality" that during the course of the proceedings the parties did ask the Court to interpret clause 1.3.2. Woolworths submitted that documents, namely the parties several outlines of written submissions as well as the particulars to para [1.2] of the Amended Appeal evidenced the parties various applications or requests to the Court to interpret clause 1.3.2. 64 Woolworths also submits that in response to the application by the parties to interpret clause 1.3.2 of the 2002 Agreement, Nicholson J did so [46]-[55]. 65 Section 24(1) of the Federal Court of Australia Act 1976 (Cth) provides: 'Subject to this section and to any other Act, whether passed before or after the commencement of this Act (including an Act by virtue of which any judgments referred to in this section are made final and conclusive or not subject to appeal), the Court has jurisdiction to hear and determine: (a) appeals from judgments of the Court constituted by a single judge...' (Emphasis added) 66 The Respondent submitted that the effect of s 24(1) read together with ss 413A(1) and 413A(2) of the Act is that: (a) this Court is invested with the power to interpret certified agreements; (b) those powers can be exercised by this Court sitting as either a single Judge as in the present case or sitting as a Full Court; and (c) the decisions of this Court in relation to the exercise of those powers are final and conclusive and no right of appeal lies to the Full Court of this Court pursuant to s 24 of the Federal Court of Australia Act. 67 In these circumstances, the Respondent submits that Nicholson J's interpretation of cl 1.3.2 of the 2002 Agreement is final and conclusive and with no right of appeal to this Court. 68 In my opinion there was no application, before Nicholson J, made under s 413A of the Act. The application was made pursuant to s 178 of the Act and sought orders under that provision by way of a declaration as to breach by Woolworths of the 2002 Agreement as well as for penalties. 69 The disposition of the application did involve his Honour in the task of construing, in certain respects, cl 1.3 of the 2002 Agreement. That does not mean that s 413A of the Act was invoked. 70 Accordingly the challenge to the jurisdiction of this Court fails at the threshold.

REASONING 71 The starting point is to determine the meaning of cl 1.3.2 of the 2002 Agreement and then to determine whether or not it was breached. 72 The stated object in respect of which negotiations are to be commenced under cl 1.3.2 is "… to renew this Agreement …". This expressed object contemplated, on one view nothing more, or less, than extending the expiration date of the 2002 Agreement beyond 15 December 2005. The better view, having regard to the language of cl 1.3.3, is that a new agreement containing different terms as to wages and other conditions of employees was in contemplation.

The First Particular 73 In my opinion the learned trial judge was in error in finding that the effect of the giving of the Notice pursuant to s 170MI of the Act was to render the provisions of cl 1.3.2 nugatory and of no effect with the obligation to negotiate on the parties resting not on that contractual provision but on the statutory provisions relevant to the statutory bargaining period. Section 170MI provides for the initiation of the bargaining period. In this case it was the Union, an organisation of employees which wished to negotiate a new certified agreement. The effect of the Notice was to state its intention as the initiating party to try to make an agreement with the respondent under Div 2 and to have any such agreement certified under Div 4. The bargaining period began at the end of seven days after the day on which the notice was given which was 13 June 2005. During the bargaining period, by virtue of s 170ML the appellant was entitled for the purpose of supporting or advancing claims made in respect of the proposed agreement to organise or engage in industrial action directly against the respondent. That industrial action is, under that provision, said to be protected action. However such industrial action cannot be taken until the nominal expiry date in the agreement has passed (s 170MN(1)). The bargaining period ends in the event that either an agreement under Div 2 or 3 is made; the initiating party tells the other negotiating party in writing that the initiating party no longer wants to reach an agreement; or the Commission terminates the bargaining period (s 170MV). 74 However, a certified agreement ceases to be in operation only in the circumstances provided for under s 170LX(2) to which I have referred above or s 170LX(3) which provides as follows: '170LX(3) The agreement: (a) ceases to be in operation if it is terminated under section 170LV, 170ME, 170MG, 170MH or 170MHH; and (b) does not operate if sub-section 170LY(2) applies. The agreement may also be set aside under sub-section 113(2A).' 75 Sections 170LV and 170ME deal with breaches of undertakings. Sections 170MG, 170MH and 170MHA deal with voluntary termination. Subsection 113(2A) deals with discriminatory agreements. 76 The giving of a Notice Initiating a Bargaining Period under s 170MI of the Act is not, of itself, a basis to invoke the statutory termination of a certified agreement. It follows that, despite the giving of the Notice, the 2002 Agreement, including the provisions of cl 1.3, remained on foot. 77 It follows, in my opinion, that this aspect of the appeal is made out.

The second particular 78 This was in effect a challenge to the construction placed by Nicholson J on the meaning of the word "expiration" found in cl 1.3.2. His Honour concluded that the expiration of the 2002 Agreement occurred, only upon satisfaction of the provisions of s 170LX(2) of the Act, namely, once its nominal expiry date, 15 December 2005 had passed and it had been replaced by another certified agreement which occurred on 20 February 2006. 79 There was no issue below, and no argument before us as to whether the 2005 Agreement, properly characterised, constituted a "new agreement" for the purposes of s 170LX(2). Indeed it appears to have been assumed by the parties and the Court that it was. Clearly the Union which was a party to the 2002 Agreement was not a party to the 2005 Agreement although its members, for whose benefit both agreements were entered into were parties to both. I have accordingly proceeded on the footing that the 2005 Agreement was a "new agreement" within the meaning of subsection 170LX(2). 80 It was common ground that the date 15 December 2005 found in cl 1.3.1 was in effect a nominal expiry date. It was not made clear by the parties just what was intended by this. On its face, 15 December 2005 is the actual expiry date although renewal of the agreement is contemplated by cl 1.3.2. The expression "nominal expiry date" employed in s 170LX(2) is defined under s 170LD to mean the date specified in the agreement as its nominal expiry date, or that date as extended or further extended under s 170MC of the Act. The 2002 Agreement contains no requirement that it be certified under the Act. However, by virtue of subsection 170LT(1) and (10) of the Act the Commission must not certify an agreement unless it specifies a date as the nominal expiry date, being a date not more than three years after the date upon which the agreement will come into operation. Properly understood therefore, although the 2002 Agreement in cl 1.3.1 does not expressly state 15 December 2005 to be the "nominal" expiry date, that, in my opinion, is nonetheless what it is. 81 In my opinion the phrases "expiration" and "date of expiration" found in sub-cls 1.3.2 and 1.3.3 respectively mean "nominal expiry date" which in this case was "15 December 2005" as found in sub-cl 1.3.1. I have come to this conclusion for a number of reasons. Firstly, before certification can occur the Act requires there to be a nominal expiry date which would normally be a different date to that upon which it actually expires. Secondly, if expiration was taken to mean the date upon which the agreement ceases to be in operation by virtue of s 170LX(2) of the Act as contended by Woolworths then it would be impossible for the parties to determine when the negotiations to renew the agreement were to commence under sub-cl 1.3.2. That is because the two month period referred to could not be calculated until the actual termination of the agreement occurred. Thirdly, if expiration meant that the provisions of s 170LX(2) had been met then sub-cl 1.3.3 would not make sense. It contemplates that in the absence of achieving a new agreement the wages and conditions of employment shall continue as at the date of expiration. However under the statutory definition the agreement ceases to be in operation (expires) once the nominal expiry date has passed and it is replaced by another certified agreement. Sub-clause 1.3.3 cannot, in terms, be contemplating the terms of a new agreement but rather the existing agreement. It follows in my opinion that the word, "expiration", for the purposes of cl 1.3.2, cannot be referring to a date after the nominal expiry date has passed and when a new certified agreement is made. 82 There is, in the result, no tension between this conclusion and the effect of s 170LX(2) of the Act. The former merely gives efficacy to the agreement in permitting the parties to identify when negotiations to renew the 2002 Agreement are to commence. The latter provides that, in effect, irrespective of the statutorily defined "nominal expiry date" the 2002 Agreement remained in operation at all times afterwards subject to the provisions of that section. 83 It follows that by cl 1.3.2, upon its proper construction, negotiations were to commence two months prior to 15 December 2005 and not 20 December 2005, at earliest, as found by his Honour, [54]. Accordingly, this aspect of the appeal is also made out. In those circumstances, but for the Notice of Contention, the appeal would have been successful.

NOTICE OF CONTENTION 84 By its Notice of Contention Woolworths submitted that the judgment below should be affirmed on the ground that the sending of the Notice by the Union to Woolworths satisfied the obligations imposed by cl 1.3.2 of the 2002 Agreement. This was a contention put below, although his Honour, whilst acknowledging it, did not expressly deal with it. (Reasons [63]-[64]). 85 In my opinion, this ground ought to succeed. The requirement in cl 1.3.2 that negotiations to renew the agreement would commence two months prior to its expiration was met by the serving of the Notice. By its terms, the Notice set out the Union's intention to try to make an agreement under Div 2 of Part VIB of the Act with Woolworths and that the matters which the Union, as the initiating party proposed should be dealt with by such an agreement were the matters referred to in para 11 above. In my opinion this was the commencement of negotiations for the purposes of cl 1.3.2. It was accepted by the Union, and correctly so in my view, that the clause does not impose any obligation upon the respondent to conclude an agreement. 86 It was contended by the Union however that there was a mutual obligation upon both parties to participate in negotiations in the period commencing 2 months before 15 December 2005. 87 In my opinion the requirement under cl 1.3.2 was mutual only in the sense that it was open to either party to take action to fulfil the requirement. 88 If I am wrong about this, then, nonetheless, in my opinion, Woolworths did participate in the negotiations by responding to the Union's communications in relation to the proposed new agreement. 89 Following upon receipt of the Notice there were communications from the respondent through Ms Atkinson on three occasions as his Honour found in which she in effect advised the appellant that the respondent had not yet determined whether or not to enter into a new agreement with the appellant. Had the Union wished to put arguments to Woolworths in an attempt to persuade it as to why it should make a new agreement, then that was open to it. It elected not to do so. In circumstances, where Woolworths, in light of the Union's Notice, and the matters it raised for negotiation, had not determined whether it would conclude a new agreement or later positively determined that it did not want to conclude a new agreement it would be an extraordinary result if the clause required Woolworths to adopt some different position to either of those alternatives in order to satisfy the provisions of cl 1.3.2. The Union had made its position clear by the Notice that it wished to make a new agreement and in the very broadest terms the matters it wished to negotiate upon were contained in the Notice. That, in my opinion, was the opening gambit of the negotiations. It satisfied the requirement under cl 1.3.2 that negotiations to renew the agreement (would) commence two months prior to 15 December 2005. 90 Clause 1.3.2 does not impose any particular obligation upon the respondent. Rather it is, in a neutral way, prescriptive of the requirement for negotiations to commence. The commencement of negotiations might have been initiated by Woolworths. In this case however it was initiated by the Union. They were to be commenced two months prior to 15 December 2005. I am of the opinion that properly understood negotiations were to be commenced not later than two months prior to 15 December 2005. 91 There is no requirement, expressly, or in my view, by implication, upon Woolworths to negotiate, if, by that, it is meant that it was required to engage in communications whether orally or in writing or a combination of these in respect to particular terms of a proposed agreement. Such matters would be raised during negotiations, no doubt, but the clause is not directed to negotiations, but rather to the commencement of negotiations. It is accordingly not apt to consider the meaning by reference to dictionaries or otherwise, of the word "negotiation" or any of its derivatives. What I am concerned with here is the meaning of the phrase "negotiations will commence …". The requirement under cl 1.3.2 was not expressly, or in effect, a mutual one "to negotiate" or "to participate in a process of negotiation". 92 The very many authorities relied upon by the Union are each concerned variously with the meaning of "negotiation", "an agreement to negotiate", "agreement to participate in a process of negotiation" or words or phrases of similar import eg: Asahi Diamond Industrial Australia P/L v Automotive, Food, Metals and Engineering Union (1995) 59 IR 385 at 421 and 422; State Bank of NSW v Kit Cheng Chia & Peng Tin Chia; Peng Tin Chia v Kenneth John Rennie & Anor [2000] NSWSC 552; Coal Cliff Collieries v Sijehama Pty Ltd (1991) 24 NSWLR 1 at 43; Walford v Miles [1992] 2 AC 128 at 138; Courtney & Fairburn Ltd v Tolaini Brothers (Hotels) Ltd [1975] 1 WLR 297 at 301; Macgowan, Macgowan v Murray [1891] 1 Ch 105 at 155. They are, accordingly, for the reasons set out above, distinguishable from the present case. 93 Further, the Union submitted that the obligation under cl 3.1 extended to participating, in good faith, in such negotiations, having regard to the objects of the Act and in particular s 3(e) which provides. '(e) providing a framework of rights and responsibilities for employers and employees, and their organisations, which supports fair and effective agreement-making and ensures that they abide by awards and agreements applying to them;…' 94 It was submitted by Woolworths that there is no express or implied duty upon the parties to bargain in good faith under the Act. The position it was said is different, for example, in Queensland under s 146 of the Industrial Relations Act 1999 (Qld). The Union contends there is such an obligation. This is a false issue. There was no issue below, and no finding, that Woolworths was in breach of an obligation to negotiate in good faith, even assuming, contrary to my finding, that cl 1.3.2 gave rise to an obligation, upon Woolworths, to negotiate. It is accordingly neither open, nor necessary to resolve that question in this appeal. 95 The conclusion that there was no breach of cl 1.3.2 by Woolworths avoids the necessity to consider what, if any, penalty would have been appropriate in the event that a breach was established. 96 The appeal ought be dismissed. I certify that the preceding sixty-five (65) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Gilmour.

Associate: Dated: 21 December 2007 Counsel for the Appellant: Mr M Cox

Solicitors for the Appellant: Chapmans Barristers & Solicitors

Workplace Relations Act 1996(Cth)

Industrial Relations Act 1999(Qld)

Work Place Relations Act 1996(Cth)

16 The trial judge also found that "sometime during the latter half of 2005", Woolworths determined that it would not enter a new agreement with the Union but would enter into an agreement with a different union. 17 At par[45], the trial judge found: As to the assertion by the respondent that it did agree that negotiations to renew the 2002 Agreement would commence prior to its expiration, I am unable to infer such a conclusion. It is clear from the correspondence from Mr Haynes to Ms Atkinson of 16 October 2005 read in the light of the email response from her of 24 November 2005 that the respondent gave no evidence of any intention so to comply. 18 It may be debatable whether it was commercially prudent for Woolworths to have entered into an agreement containing cl 1.3 but, having done so, and there being no contention that cl 1.3 was void for uncertainty, it is necessary to give effect to cl 1.3. 19 I have come to the view, that the sending of the "Notice of Initiation of Bargaining Period" did not discharge Woolworths from its obligations under cl 1.3.2 . This is because the construction of cl 1.3.2 contended for by Woolworths would, in my view, deprive cl 1.3.2 of the 2002 Agreement of any meaningful commercial utility and content. 20 It is well established that courts will not give effect to the literal meaning of words of a clause in a commercial agreement, if such a meaning would not accord with business common sense. In the case of Antaios Compania Naviera SA v Salen Rederierna AB [1985] AC 191 at 201, Lord Diplock observed: [I]f detailed semantic and syntactical analysis of words in a commercial contract is going to lead to a conclusion that flouts business commonsense, it must be made to yield to business commonsense. 21 These observations were cited with approval by the High Court in Maggbury Pty Limited v Hafele Australia Pty Limited (2001) 210 CLR 181 at 198. Further, in construing an industrial agreement, it is necessary to take account of the industrial context in which the agreement was drafted. In George A Bond & Co Ltd (in Liq) v McKenzie [1929] AR(NSW) 498, Street J at 503‑504 observed: [O]ne must always be careful to avoid a too literal adherence to the strict technical meaning of words, and must view the matter broadly, and after giving consideration and weight to every part of the award, endeavour to give it a meaning consistent with the general intention of the parties to be gathered from the whole award. 22 The Macquarie Dictionary (revised 3rd ed, Macquarie Library) defines "negotiation" as "mutual discussion and arrangement of terms of a transaction or agreement". (Emphasis added.) 23 The Shorter Oxford Dictionary (3rd ed, Oxford University Press) defines "negotiate" as "to confer (with another) for the purpose of arranging some matter by mutual agreement" and "negotiation" as "a course of treaty with another (or others) to bring about some result". (Emphasis added.) 24 Because a negotiation is a process or "course" directed towards achieving a mutually acceptable result, there would appear to be no commercial utility in the parties contracting to commence a negotiation as an end in itself - particularly, when, as Woolworths contends, the initiating act of one party discharges the need for the other party to respond to the first party. 25 Further, cl 1.3.3 contemplates a situation when "negotiations have failed to reach agreement". This clause, therefore, contemplates the parties engaging in a process extending beyond the initiating (and concluding) act of one party to the agreement. On Woolworths' contention, there would never be any occasion upon which to assess whether the "negotiations have failed to reach agreement" because each party's obligation will have been discharged before a response to the initiating act is called for. In other words, the clause contemplates the occurrence of a circumstance that could not arise if Woolworths was correct in its contention that the initiating (and concluding) act of one party, satisfied both parties' obligations under cl 1.3. 26 Accordingly, on the application of the principles referred to above, it is my view, that, on the proper construction of cl 1.3.2 and cl 1.3.3, the parties agreed to negotiate for the purpose of renewing the 2002 Agreement, and to commence those negotiations no later than two months before the expiry of that agreement. Because negotiation is a mutual process, it follows that each party was under a separate duty to participate in the process, whether in taking the first, or any subsequent step, in the process. The duty on one party to take its initial step to commence negotiations could not be discharged by the other party taking its initial step. 27 The mutual nature of the obligation to commence a negotiation, is illustrated by the case of Service Corporation International (Canada) Limited v Construction and Specialized Workers' Union Local 1611 (unreported, Supreme Court of British Columbia, Catliff J, 8 October 1998) (Service Corporation). 28 In that case, the Labour Relations Board ordered the union to "enter into collective bargaining" with an employer, SCI, by 12 July 1998. The employer alleged that the union had failed to comply with the order and brought proceedings for contempt. 29 Catliff J at [16] and [17] observed: In my view, advising SCI by letter that it was not available to meet until certain events had happened was not entering collective bargaining. It was not the commencement or entering of negotiations with a view to concluding a collective agreement. It may have been part of the "process", as the Union's representative has deposed, but it was not the start of bargaining as required by the Board. The wording of the Board's order is clear and unambiguous. DID THE UNION OBEY THE BOARD'S ORDER? In advising SCI that it was not ready to commence negotiations, the Union did not enter into collective bargaining. The first meeting did not take place until 24 July. The Board's decision, requiring negotiations to start by 12 July 1998 at the latest, was not complied with. (Original emphasis.) 30 In my view, cl 1.3.2 imposed an obligation on each party timeously to engage in conduct directed to negotiating for the renewal of the 2002 Agreement, in order to discharge its obligation to "commence" negotiations by the time specified in the contract. There was, of course, no obligation on either party to agree to renew the 2002 Agreement. In my view, the sending of the notice by the Union did not discharge Woolworths from its separate obligation to commence negotiations. I do not uphold the respondent's notice of contention. 31 Woolworths did not, in its notice of contention, rely upon its own conduct as constituting compliance with cl 1.3.2. If it had done so, I would, consistently with the trial judge's factual findings referred to in [9] above, and the reasoning in Service Corporation, have found that the responses of the respondent fell short of "commencing" negotiations within the meaning of cl 1.3.2. I certify that the preceding twenty‑three (23) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Siopis.

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