Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union, New South Wales Branch v BHP Steel Long Products, The Australian Workers Union v BHP Steel Long Products

Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union, New South Wales Branch v BHP Steel Long Products, The Australian Workers Union v BHP Steel Long Products - [2005] NSWIRComm 1071 - NSWIRComm 2005 case summary — Zoe

[12]

7 An adjustment was made to the Agreement Tool Allowance in September 2002 to flow on two Award variations to the Tool Allowance resulting from the State Wage Case decisions of 2001 and 2002. In both adjustments, the NRMA had rounded up the total wage to the nearest dollar. 8 A third variation was made to the Award during the life of the Agreement. The variation, made on 21 August 2003, included an increase of 3.2% in the tool allowance (or 40 cents per week) taking it from $11.20 to $11.60 per week. 9 It became apparent that the parties held conflicting views as to the rounding up issue when an adjustment was required to be made to the Tool Allowance in the Agreement as a consequence of the increase in the Tool Allowance in the underpinning Award. The Union submitted that the Agreement provided for the total wage to be rounded up to the nearest dollar as a consequence of the movement in its tool allowance component. 10 Although the NRMA had flowed on the third increase to the Tool Allowance, the parties were in dispute as to the rounding up of the total wage where, as a result of the increase, those wages were not expressed as whole dollar amounts. 11 The Union maintained that the Agreement required the NRMA to round up Patrol Officers' wages to the nearest dollar when either the Agreement or the Award afforded an increase. The Union particularly relied on point (6) of the Wages Disparity clause as reflecting the NRMA's concern in relation to varying wage levels. It was pointed out by the Union that the NRMA had applied the rounding up policy since the Agreement was approved and, relevantly, applied it in relation to the tool allowance increases resulting from previous State Wage Case decisions. 12 The NRMA submitted that, on a proper interpretation of the relevant provisions of the Agreement, it was not required to round up the total wage. 13 The Union sought a determination from the Commission, pursuant to Section 175 of the Industrial Relations Act 1996 (the Act), that the Enterprise Agreement required the rounding up of salaries to the nearest whole dollar where:

[25]

35 The calculations used to arrive at the total wage payable upon the approval of the Agreement were tendered. The remuneration increases were derived by calculating the total wage of all Patrol Officers divided by the number of Patrol Officers. The resultant figure was then rounded up to the nearest whole dollar. However, as a number of new Patrol Officers had been engaged during the negotiations, agreement was reached that the total average wage would be $950. The 5% first stage increase, according to his calculations equated to a rise of $47.50 which was rounded up to $48 and applied after the commencement of the Agreement. 36 He pointed out that the rounding up principle was only one aspect of the attempts to address the wage disparity issue during the life of the agreement. The 2001 Agreement provided a further 4% increase to wages in its second year. Ms. Hagerty wrote to Mr. Cohen on the 08 July, 2002 indicating that the increase of $39.20 would be rounded up to $40.00. 37 In anticipation of the State Wage Case decision being flowed on to the Award from the first pay period on or after 21 August, 2002, Mr. Cohen wrote to Ms Hagerty on 08 August, 2002 regarding movement in a number of allowances, including an increase from $10.50 to $10.80 in the tool allowance. 38 In that correspondence, Mr. Cohen had reminded the NRMA to "use round up principle as per Patrols Enterprise Agreement" in accordance with his understanding of the Agreement. 39 That was followed by further correspondence from Mr. Cohen to Ms Hagerty, dated 27 August, 2002, setting out the calculation of the Telephone Allowance, confirming that adjustment had been made to the Meal Allowance and seeking a response in relation to the Tool Allowance adjustment that had not yet been flowed on by the NRMA. 40 Mr. Cohen forwarded yet another letter on 31 August, 2002 in relation to the Tool allowance. 41 On 29 September, 2002 the Union sent a facsimile to Ms. Maree Callaghan, Chairperson of the NRMA Board, principally about averting strike action and resolving the impasse which existed at the time over a wider dispute relating to a whole host of issues, including the termination of the employment of three patrol officers and payment of allowances. Item 4 on the agenda proposed by the Union was the issue of "Allowances".

[49]

64 It was pointed out that the Agreement was between the Union and the NRMA, not with Mr. Ashton. Since the approval of the Agreement in November 2001, the Award tool allowance had increased three times as a result of State Wage Case increases. On two of those occasions, persons responsible for authorising payments, instructed by staff of the Human Resources Department of the NRMA, had flowed on those increases to the Agreement rate and then rounded up the total wages as a consequence during the full nominal term of the said agreement. The tool allowance had increased twice since the Agreement was approved in the Commission in November 2001. The NRMA had not taken any issue with the Union and/or the Commission about whether or not it was required to round up. 65 During the negotiations leading up to the Agreement, it was the Respondent that had raised the problem regarding wage parity. The rounding up of wages had been suggested as one way of addressing that problem. Hence the Wage Disparity Clause and, in particular, subclause 6 of that clause. It was pointed out that the wages disparity clause referred to the disparity being addressed by the provisions of the Agreement and the Agreement was expressed to apply over three years. 66 It was further submitted that the words used in that sub-clause were clear and express insofar as that it provided a general right for all salaries to be rounded up to the nearest dollar when increased during the term of the Agreement. 67 The law relating to the interpretation of instruments with legal force was reasonably settled. The plain, ordinary English meaning was to be given to the actual words used. In the majority judgment of Hungerford & Schmidt JJ in Bryce & Anor v. Apperley ((1998) 82 IR 448), their honours observed: In our view, in construing the true meaning of an industrial award, like any other instrument with legal force, the task requires an approach according to the actual words used in their plain, ordinary English meaning. [Emphasis added] It was noted by the Union that no-where in the disputed clause or, for that matter, the entire Agreement did the word "once-off" appear in relation to the round up of the wages. 68 The Commission was reminded that Mr. Ashton had admitted that he had not, at any stage, communicated to either the Patrol Officers or indeed any other member of his own management team his interpretation and/or belief as to how the Agreement was to operate with respect to the wages disparity issue. 69 The union further relied on the authority that where the language contained in the instrument had a plain meaning, evidence on the background of those words was not admissible. Such background was only admissible where the language was ambiguous or susceptible of more than one meaning. In Codelfa Construction Pty. Ltd. v. State Rail Authority (NSW) ((1982) 149 CLR 377), Stephen, Aickin and Wilson JJ concurred with the judgment of Mason J. wherein he held (at page 352): The true rule is that evidence of surrounding circumstances is admissible to assist in the interpretation of the contract if the language is ambiguous or susceptible of more than one meaning, but is not admissible to contradict the language of the contract when it has a plain meaning.

[60]

82 The mere fact that the NRMA had previously rounded up the wages should be considered by the Commission as a powerful factor in its determination of the matter, not only for the principle of condonation, but also for the principle that the interpretation advanced by the Union was also agreed to by the Respondent for two out of three years. 83 The Union further relied on other authorities on condonation, albeit they related to unfair dismissal claims (Burge v BHP Steel P/L (2001) 105 IR 81); Australian Transport Officers Association v Department of Motor Transport (1988) 25 IR 235 and 244 per Macken J.) to support its conclusion that "a powerful determination of the matter" was the fact that the respondent had paid the round up previously. That payment alone should suffice for the Commission to arrive at the conclusion that the NRMA had condoned the payment even if it rejected the Union's argument on the construction of the clause. 84 The Union speculated on the motive of the NRMA for discontinuing the practice of rounding up and invited the Commission to call it into question on this occasion. The union considered, given that rounding up was applied by the NRMA without demur in 2001 and 2002, that it was being used as an industrial tactic in the current negotiations for a new agreement the progress of which could not be described as smooth sailing. 85 That was another feature in the Zoological Board Case that was also relevant to these proceedings. The parties to that particular dispute were in the midst of an industrial dispute and industrial negotiation. His Honour, Sams DP had observed: Finally, having regard for the recent history of this matter, I have some doubts as to the motivation of the respondent in pursuing this matter in the context of its recent enterprise agreement negotiations with the Unions. There is nothing remarkable about an employer seeking to reduce its costs by closely examining all of its operations. However, in the context of regularly negotiated agreements, I do not think it was very wise, and perhaps naive, to discontinue an allowance that had been paid for years on a particular basis. The decision probably had more to do with leveraging the negotiations... 86 In conclusion, it was submitted that:

[62]

88 It was submitted that, on a proper interpretation of the clause, it was only required to round up Patrol Officers' wages once and that was at the commencement only of the Agreement. It was not disputed that the Respondent had complied with that obligation. The only obligation that remained, post the registration and the commencement of the Agreement, was to pass on to Patrol Officers any State Wage Case increases to the award. 89 The words in the relevant clause, given their plain ordinary English meaning (Bryce & ano. v. Apperley (1998) 82 IR 448 @ 442) were clear and unambiguous - rounding up was not required to be carried out throughout the life of the Agreement. 90 In deciding on the proper interpretation of the wages disparity provision, it was important to note that the parties had agreed on the payment of "A 5 per cent flat amount ($48), a whole amount which is calculated on the average salary will be paid from the mass meeting acceptance." That had occurred on 25 or 26 July, 2001. There was a further 4 per cent flat amount payable from 25 July 2002. Mr. Cohen had accepted, during cross-examination, that the increase was expressed in whole dollars because that had been agreed to by the parties prior to the certification of the Agreement. It was submitted that, on a proper interpretation, within the ordinary meaning, the NRMA had complied with its obligation by rounding up salaries at the commencement of the Agreement. 91 If the Commission held a contrary view, that there was some ambiguity in the operation of that part of the provision, then recourse can be had to extrinsic material to assist it with the interpretation (Codelfa Constructions P/L v State Rail Authority (NSW) (1982) 149 CLR 377 @ 352 per Mason J, Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union and ors. v Qantas Airways Limited (2001) 106 IR 307). It was emphasised that the disputed clause should be considered in the context in which the actual words appeared and emerged. The principle enunciated in Kingmill Aust. P/L t/as Thrifty Car Rental v Federated Clerks' Union of Australia, NSW branch ([2001] NSWIRComm. 141) was distilled from Bryce v. Apperley. The resource was limited to the material existing up to the date of the making of the Agreement.

[76]

105 There are well-held and clearly defined principles relating to the interpretation of awards. Both parties referred to those principles which were discussed in Bryce v. Apperley, and helpfully elaborated on by Schmidt J. in The Australian Workers' Union, New South Wales v. New South Wales Technical and Further Education ([2001] NSWIRComm. 25). In undertaking the task of award interpretation, the starting point is a consideration of the actual words of the award given their ordinary and grammatical meaning: 15. The approach to be adopted to the construction of awards was discussed by the majority of the Full Court in Bryce v. Apperley (1998) 82 IR 448, particularly at pp 452 to 454. That approach requires that if the words used are capable, in their ordinary sense, of an unambiguous meaning, then it is not permissible to look further, unless it can be demonstrated that the effect was unintended. The true meaning of the award has to be ascertained from the actual words used, according to their plain, ordinary English meaning. That must be so even if the view is reached that the words used did not give effect to the intention of the award maker. On the other hand, the circumstances in which the award was made and the purposes for which it was intended are not irrelevant, but cannot justify a meaning, which the words are not fairly capable of bearing.... 19. The interpretation of awards is, of course, not to be approached in exactly the same way as the interpretation of statutes. In Apperley reference was made to the approach discussed by Street J, as he then was, in GEO A. Bond & Co Ltd (in Liq) v. McKenzie [1929] AR (NSW) 498 at 5034: Now speaking generally, awards are to be interpreted as any other enactment is interpreted. They lay down the law affecting employers and employees in their relations as such, and they have to be obeyed to same (sic) extent as any other statutory enactment. But at the same time, it must be remembered that awards are made for the various industries in the light of the customs and working conditions of each industry, and they frequently result, as this award in fact did, from an agreement between parties, couched in terms intelligible to themselves but often framed without that careful attention to form and draughtsmanship which one expects to find in an Act of Parliament. I think, therefore, in construing an award, one 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. 20. That approach, however, envisaged that the parties' general intention be gleaned from the award as a whole. It cannot provide a basis for departure from the meaning of words, which have not been used in any technical sense or in the context of the customs and working conditions of a particular industry. Again, there was no evidence from which such considerations could be said to arise in this case. 21. Thus it is that the meaning of the clause must be ascertained from the words used themselves in the context of the Award as a whole.

At a glance

Court

Decision date

Before

Catchwords

Source

Catchwords

Judgment (101 paragraphs)

Cases Cited (14)