The Context ground
102 The "Context ground" is said to be that the Full Bench, "failed to consider context in the interpretation of the Agreement". This ground focusses upon a line of cases in the High Court commencing with Codelfa (supra). At 352 - 353 Mason J (as his Honour then was) said:
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 it is not admissible to contradict the language of the contract when it has a plain meaning. Generally speaking facts existing when the contract was made will not be receivable as part of the surrounding circumstances as an aid to construction, unless they were known to both parties, although, as we have seen, if the facts are notorious knowledge of them will be presumed.
It is here that a difficulty arises with respect to the evidence of prior negotiations. Obviously the prior negotiations will tend to establish objective background facts which were known to both parties and the subject matter of the contract. To the extent to which they have this tendency they are admissible. But in so far as they consist of statements and actions of the parties which are reflective of their actual intentions and expectations they are not receivable. The point is that such statements and actions reveal the terms of the contract which the parties intended or hoped to make. They are superseded by, and merged in, the contract itself. The object of the parol evidence rule is to exclude them, the prior oral agreement of the parties being inadmissible in aid of construction, though admissible in an action for rectification.
Consequently when the issue is which of two or more possible meanings is to be given to a contractual provision we look, not to the actual intentions, aspirations or expectations of the parties before or at the time of the contract, except in so far as they are expressed in the contract, but to the objective framework of facts within which the contract came into existence, and to the parties' presumed intention in this setting. We do not take into account the actual intentions of the parties and for the very good reason that an investigation of those matters would not only be time consuming but it would also be unrewarding as it would tend to give too much weight to these factors at the expense of the actual language of the written contract.
There may perhaps be one situation in which evidence of the actual intention of the parties should be allowed to prevail over their presumed intention. If it transpires that the parties have refused to include in the contract a provision which would give effect to the presumed intention of persons in their position it may be proper to receive evidence of that refusal. After all, the court is interpreting the contract which the parties have made and in that exercise the court takes into account what reasonable men in that situation would have intended to convey by the words chosen. But is it right to carry that exercise to the point of placing on the words of the contract a meaning which the parties have united in rejecting? It is possible that evidence of mutual intention, if amounting to concurrence, is receivable so as to negative an inference sought to be drawn from surrounding circumstances. See Heimann [(1938) 38 SR (NSW) at 695].
The importance of this evolution of the law as it affects the construction of contracts is that it centres upon the presumed, rather than the actual, intention of the parties.
(Footnote references have been omitted.)
103 In Ermogenous v Greek Orthodox Community of SA Inc (2002) 209 CLR 95, the High Court was concerned with the question of intention to enter into contractual relations. However the majority considered that the word "intention" in that context had the same meaning as in other contractual contexts. At [25] their Honours said:
Because the inquiry about this last aspect may take account of the subject matter of the agreement, the status of the parties to it, their relationship to one another, and other surrounding circumstances, not only is there obvious difficulty in formulating rules intended to prescribe the kinds of cases in which an intention to create contractual relations should, or should not, be found to exist, it would be wrong to do so. Because the search for the "intention to create contractual relations" requires an objective assessment of the state of affairs between the parties (as distinct from the identification of any uncommunicated subjective reservation or intention that either may harbour) the circumstances which might properly be taken into account in deciding whether there was the relevant intention are so varied as to preclude the formation of any prescriptive rules. Although the word "intention" is used in this context, it is used in the same sense as it is used in other contractual contexts. It describes what it is that would objectively be conveyed by what was said or done, having regard to the circumstances in which those statements and actions happened. It is not a search for the uncommunicated subjective motives or intentions of the parties.
(Footnote references have been omitted.)
104 The facts in Pacific Carriers Ltd v BNP Paribas (2004) 218 CLR 451, are summarized in the headnote as follows:
Letters of indemnity to facilitate the delivery of cargo without the production of a bill of lading were provided by the seller of that cargo to a sea carrier. The letters were executed by the seller and its bank. The bank officer who signed the letters and attached the bank's stamp was authorised to verify customers' signatures on letters of indemnity but not to bind the bank as an indemnifying party. The carrier suffered loss in connection with the delivery of the cargo and sought to recover its loss from the bank.
At [20] to [22] the Court said:
[20] The nature of the obligations undertaken by BNP in consequence of the signature and transmission to Pacific of the letters of indemnity depends upon the meaning of the documents, the particular problem being the capacity in which, on the true construction of the documents, the bank was involved in the transaction. That question has a factual relationship to the question of Ms Dhiri's authority, in that both she, and her superior, Mr Kavanagh, gave evidence that it was their understanding that all that BNP was doing was authenticating NEAT's execution of the letters of indemnity.
[21] Ms Dhiri gave evidence that she told NEAT that execution by BNP was only for verification of the signatures. That evidence was denied. Hunter J said he had great difficulty in deciding where the truth lay. He accepted that "something must have been said by [Ms Dhiri] at one time or another to a NEAT representative that, in her mind, conveyed the message that she was signing the NEAT LOIs merely for verification of signatures", but he did not accept that any such limitation was effectively communicated to NEAT. More significantly, it was never communicated to Pacific.
[22] What is important is not Ms Dhiri's subjective intention, or even what she might have conveyed, or attempted to convey, to NEAT about her understanding of what she was doing. The letters of indemnity were, and were intended by NEAT and BNP to be, furnished to Pacific. Pacific did not know what was going on in Ms Dhiri's mind, or what she might have communicated to NEAT as to her understanding or intention. The case provides a good example of the reason why the meaning of commercial documents is determined objectively: it was only the documents that spoke to Pacific. The construction of the letters of indemnity is to be determined by what a reasonable person in the position of Pacific would have understood them to mean. That requires consideration, not only of the text of the documents, but also the surrounding circumstances known to Pacific and BNP, and the purpose and object of the transaction. In Codelfa … , Mason J set out with evident approval the statement by Lord Wilberforce in Reardon Smith Line Ltd v Hansen-Tangen [[1976] 3 ALL ER 570 at 574]:
"In a commercial contract it is certainly right that the court should know the commercial purpose of the contract and this in turn presupposes knowledge of the genesis of the transaction, the background, the context, the market in which the parties are operating."
105 In Toll (supra), the High Court said at [29]:
Each of the four parties to the case is a substantial commercial organisation, capable of looking after its own interests. This hardly seems an auspicious setting for an argument that a party who signs a contractual document is not bound by its terms because its representative did not read the document.
At [35] their Honours continued:
A striking feature of the evidence at trial, and of the reasoning of the learned primary judge, is the attention that was given to largely irrelevant information about the subjective understanding of the individual participants in the dealings between the parties. Written statements of witnesses, no doubt prepared by lawyers, were received as evidence in chief. Those statements contained a deal of inadmissible material that was received without objection. The uncritical reception of inadmissible evidence, often in written form and prepared in advance of the hearing is to be strongly discouraged. It tends to distract attention from the real issues, give rise to pointless cross-examination and cause problems on appeal where it may be difficult to know the extent to which the inadmissible material influenced the judgment at first instance.
After referring to Codelfa and Ermogenous, the Court continued at [40]:
This Court, in Pacific Carriers Ltd v BNP Paribas [(2004) 218 CLR 451], has recently reaffirmed the principle of objectivity by which the rights and liabilities of the parties to a contract are determined. It is not the subjective beliefs or understandings of the parties about their rights and liabilities that govern their contractual relations. What matters is what each party by words and conduct would have led a reasonable person in the position of the other party to believe. References to the common intention of the parties to a contract are to be understood as referring to what a reasonable person would understand by the language in which the parties have expressed their agreement. The meaning of the terms of a contractual document is to be determined by what a reasonable person would have understood them to mean. That, normally, requires consideration not only of the text, but also of the surrounding circumstances known to the parties, and the purpose and object of the transaction.
(Footnote references have been omitted.)
106 Finally, in Electricity Generation Corporation v Woodside Energy Ltd (2014) 251 CLR 640 the majority (French CJ, Hayne, Crennan and Kiefel JJ) said at [35]:
Both Verve and the Sellers recognised that this Court has reaffirmed the objective approach to be adopted in determining the rights and liabilities of parties to a contract. The meaning of the terms of a commercial contract is to be determined by what a reasonable businessperson would have understood those terms to mean. That approach is not unfamiliar. As reaffirmed, it will require consideration of the language used by the parties, the surrounding circumstances known to them and the commercial purpose or objects to be secured by the contract. Appreciation of the commercial purpose or objects is facilitated by an understanding "of the genesis of the transaction, the background, the context [and] the market in which the parties are operating". As Arden LJ observed in Re Golden Key Ltd [[2009] EWCA Civ 636 at [28]], unless a contrary intention is indicated, a court is entitled to approach the task of giving a commercial contract a businesslike interpretation on the assumption "that the parties … intended to produce a commercial result". A commercial contract is to be construed so as to avoid it "making commercial nonsense or working commercial inconvenience".
(Footnote references have been omitted.)
107 The Union's original application to FWC identified the matter in dispute at para 4 as follows:
4.1 The dispute concerns the travel allowance provided for in Clause 15 of the Agreement.
4.2 In October 2013, the Company started discussions with the Union with regards to changing the travel allowance for ALS employees contracted to work at the various Alcoa sites at Kwinana, Pinjarra and Wagerup ("ALS strategic site employees").
4.3 The Union made it clear from the outset that it disputes the proposed changes to the travel allowance for ALS strategic site employees.
4.4 The discussions culminated in the Company issuing a letter on 28 October 2013 to ALS strategic site employees informing them that the proposed changes would take effect from Monday 2 December 2013 (letter attached as "C").
4.5 It is submitted by the Union that the Company's proposed changes go against the nature and letter of Clause 15 of the Agreement.
Proposed changes
4.6 As seen in the letter sent by the Company to ALS strategic site employees on 28 October 2013, the Company wishes to implement the following changes to the travel allowance:
A. Changing the Company base from the Company's office in Canning Vale to "the relevant Alcoa site at Kwinana, Pinjarra or Wagerup";
B. A travel allowance based on radial banding if the Company does not provide the employee with transport; and
C. Introduction of a site allowance of $3.20 for each hour worked at a strategic site.
A. Changing the Company base
4.7 The Union does not dispute that the Company can change an employee's Company base. However, the Union does dispute that the Company can change the Company base for the ALS strategic site employees from the ALS office in Canning Vale to the various Alcoa sites.
4.8 The Union contends that in the Agreement there is a clear distinction between 'Company base' and 'site', and that 'Company base' specifically refers to the Company's business offices, whilst 'site' refers to any location other than the employee's Company base.
4.9 ALS has five WA business offices, as follows:
• ALS Asset Care Canning Vale (1 09 Bannister Road)
• ALS Asset Care Kalgoorlie (2 Roberts Street)
• ALS Asset Care Davenport Bunbury (Unit 4 16 Campbell Way Davenport)
• ALS Minesite- MARC Technologies (11 Efficiency Way, Bibra Lake)
• ALS Coal - Collie (Lot 2073 Collins Street, Collie)
4.10 ALS does not have Company Bases at the Alcoa refineries, it is merely provided with a site office by their client to carry out contracted work specific to Alcoa.
4.11 Therefore, the Company cannot nominate the Alcoa sites as new Company bases.
108 The application then addressed other related aspects of the dispute. The point in issue seems to have been whether each of ALS's establishments at Alcoa sites was an "employee's Company base" or a "Company base" for the purposes of cl 15.5 of the 2012 Agreement. In assessing the Full Bench's approach, it is necessary that we keep in mind the fact that it was conducting a private arbitration. No legislation or other legal requirement directed it to take into account any of these matters, subject only to the requirements of good faith and procedural fairness. As we have observed, that point was made in Wagstaff at [32], [41], [62] and [63]. It may follow that for this reason alone, the allegation of jurisdictional error must fail. However we will say something about the alleged errors.
109 The Union submits that the Full Bench fell into jurisdictional error by rejecting the "assistance" to be derived from:
evidence concerning negotiations leading up to approval of the 2012 Agreement;
common understanding based on custom and practice in relation to the way in which both parties had previously applied the clause in the calculation of the travel payments to (ALS's) employees;
"a consideration of whether travel was in the course of employment"; and
evidence as to the provision of other instruments of a different nature to the Agreement.
110 The Union concedes that the Full Bench had regard to:
its "assertions" as to the evidence concerning the locations at which most of the relevant employees performed their work; and
its "assertions" that ALS had nominated Canning Vale as the employee's Company base for each of the relevant employees for many years, a practice which was generous to employees.
111 As we understand the Context ground, it is that the Full Bench fell into jurisdictional error in that although it, "acknowledged that it was necessary to interpret clause 15 in the context of surrounding circumstances including the history of making the Agreement", it did not do so. The Union submits that in the course of the negotiations leading up to the making of the 2012 Agreement, ALS had initially taken a position which suggested that it understood the existing arrangement under the 2009 Agreement to have been in accordance with the construction of cl 15 now advanced by the Union. The Union submits that at some stage in the negotiations, ALS changed its position. It is said to follow that the Court should construe cl 15 in the 2012 Agreement on the basis that the parties had both so understood the analogous provisions in the 2009 Agreement.
112 The evidence concerning the negotiations leading up to the approval of the 2012 Agreement is by no means unequivocal as to any such shared understanding. As we have demonstrated, as early as 18 January 2013, ALS had asserted in its application to FWC, that it had "elected" not to exercise its power to change the employees' Company bases pursuant to cl 15.5. Nonetheless, at that time, it proposed to allow existing employees to continue to receive the benefit of the existing arrangements, whilst making different arrangements for future employees. It is difficult to see how the Union could, thereafter, have believed that ALS considered that it could not appoint the Alcoa sites as employees' Company bases, either pursuant to the 2009 Agreement or the proposed cl 15.
113 The Union submits that two earlier documents suggest that ALS was taking a different view. One of those documents was dated 6 September 2012 and the other, 7 September 2012. The document dated 6 September 2012 is headed "Company Agenda". It states that:
One current provision that places ALS at a disadvantage against its competitors is Travel Payments. The Company seeks to negotiate a change in how this term is applied.
In other words, it was proposing to apply the existing clause in a different way, presumably by changing the employees' Company bases. This statement clearly assumes that the existing clause is capable of achieving ALS's objectives.
114 The other document is headed "Meeting Minutes" for a meeting held on 6 September 2012. The document states that:
Aim for the new agreement is to become more competitive in the WA marketplace as ALS has been unsuccessful in bidding for a number of projects and contracts for reasons based on cost. This includes negotiating a change in the travel payments clause.
115 The Union submits that the perceived need to change the clause indicated that ALS's understanding of it was that it did not permit it to appoint the Alcoa sites as employees' Company bases. That submission assumes that the desired change was only to confer such a right. However ALS's application of 18 January 2013 and its letter to "strategic employees" dated 27 September 2013 make it clear that the proposed amendments would, to the extent that they applied to future employees, be much more substantial.
116 We are unable to discern any clear indication by ALS that it understood that the analogous clauses in the 2009 Agreement did not allow the appointment of the Alcoa sites as employee Company bases. We should add that no significance can be attached to ALS's desire to negotiate, rather than impose any change in the way in which the clause was applied. Negotiation is good managerial practice.
117 A further aspect of the negotiations was that, according to the Deputy President, two witnesses called by the Union, Mr McCrea and Mr New, understood that Mr McGinty, the ALS manager who was involved in the negotiations leading up to the Agreement, "had given an undertaking not to change the way in which the clause was applied". Mr McGinty disputed this version of events. The Deputy President found the evidence of Mr McCrea and Mr New to be more convincing in this respect. (See [56].) Such a view seems to fall short of a finding that the undertaking was given, but there are, in any event, other problems with this evidence. First, Mr McCrea gave no evidence of any such statement by Mr McGinty. It is impossible to know how the Deputy President would have resolved the difference between Mr New's evidence and that of Mr McGinty, had he not understood that the former's evidence was supported by that of Mr McCrea. Second, Mr New did not refer to the matter in his affidavit. The allegation was made for the first time in supplementary oral evidence at the hearing. Third, the Deputy President's understanding of Mr New's evidence is incorrect. The relevant passage appears at pp 43/102 and 44/102 of the transcript of proceedings as follows:
What's your memory of those discussions?---Well, travel as an entitlement is very important to the technicians, and we made it clear in the beginning that travel is a sacred car [sic]. In fact, I used those words.
Yes?---They [sic] company said they were looking for opportunities to make some changes and to cut costs, et cetera, and that travel was one of those possibilities. And they said they believed they could change our bases - that's their interpretation as according to clause 15.5.
Yes. And what was your response to that?---We asked them to remove the clause because we saw it as something of a threat. Obviously, (indistinct) a higher level than us, general managers, et cetera. However, toward the end of negotiations one of us - in fact, I can say it was our AMWU representative, asked very pointedly of the general manager as to whether he would invoke this clause to change what he interpreted as company base.
We [sic] you there at the time?---I was there at the time.
Yes. Sorry, go on?---And he said very pointedly, that he had no intention of doing so.
And who said that?---This is Mr McGinty, the general manager.
Yes. And so what did you take away from that discussion?---I took him at his word and then went to the people that I represent and explained what had happened, and I took comfort from that assurance as did the guys who I was representing. And my understanding is that that is the reason the document got up.
Right?---Because we were confident that we would retain the travel entitlements that we've had for - in fact, it goes longer than the time that I've been there. It's more like 30 years, that's always been the entitlement.
Yes. And the agreement was put to a vote?---It was.
And how did you vote in relation to the agreement?---I voted it up.
If you thought the term "company base" could be interpreted to mean a strategic site such as Alcoa Pinjarra, would you have voted for it?---If I thought that the company was going to invoke it with that interpretation I wouldn't have voted for it, no. Absolutely not.
118 The following passage from Mr McGinty's cross-examination appears at pp 80/102 and 81/102:
Did Mr Van de Hoef tell you about Mr New's evidence in terms of the conversation that he had with you about the assurance you gave him about keeping the travel time payment?---There was a conversation. I wasn't - yes, I think I was briefed on that.
I put it to you, Mr McGinty, that you gave these workers an assurance that you would not fiddle with the travel payments clause in order to reduce their allowances. You told them that explicitly. Do you agree with that?---No.
I'd suggest to you that you did tell them that, because what we see in the agreement is a preservation of the status quo in relation to the treatment of allowances with reference to a company base?---Is that a question?
Yes?---Sorry, it didn't sound like a question.
I'd suggest to you - I'll ask you to agree with me or disagree with me, that that is precisely what you said, because the evidence is that clause is completely unaltered. Do you agree with that?---The clause is completely unaltered, yes.
The reality was, wasn't it, Mr McGinty, that the travel allowance issue was really just something that was in the too hard basket in terms of getting this EBA up. Would you agree with that?--Yes.
Do you accept that the employees of these sites would not have voted for this EBA if they knew the company would take steps to reclassify the term ''company base" to mean these strategic sites?
MR VAN DE HOEF: Deputy President, I object to calling for speculation on Mr McGinty's behalf:
THE DEPUTY PRESIDENT: Answer the question.
MR HAMMOND: Well, it's a proposition that I'm putting?---Could you repeat that one, please?
Sure. Do you accept that the workers would not have voted for this EBA if they had known ALS would take steps to reclassify the term "company base" to mean strategic sites?---Throughout the negotiation I continually discussed with the AMWU and the delegates the company's right to change company base from what it currently is to a strategic site. That was acknowledged. When we got to the end of the negotiation - and I'm just going to just jump back to one of your previous questions, if that's okay ---
By all means?---Where you asked did I give an unconditional guarantee that we wouldn't change their company base and I said no to that. What I did say to the question that was asked, "'Will you give us a guarantee that you won't change the company base?" my answer was, "It's not our intention to change the company base, but if there's an imperative put upon us then we will."
119 Hence Mr New says only that Mr McGinty said that he had no intention of invoking the clause, a statement which falls well short of being a guarantee, particularly in view of the fact that ALS was seeking to make different arrangements for future employees. Mr McGinty denies giving an unconditional guarantee. There is no evidence that he did so. Nor is there evidence that this denial was false.
120 In assessing the evidence concerning negotiations, sparse as it is, we must keep in mind the points made by Mason J in Codelfa at 352 - 353 concerning the use of negotiations in construing the resulting contract. First, evidence of negotiations may be used to determine the "background facts", known to both parties. However such evidence may not be adduced if it goes only to intentions or expectations. Second, where the parties were united in refusing to include a term which would give effect to the presumed intention of persons in their position, evidence of such refusal may be used to rebut any inference that they shared such presumed intention.
121 In the present case, at least after 18 January 2013, ALS was clearly asserting that the clause, as it stood in the 2009 agreement and as proposed, permitted it to change an employee's Company base by appointing an Alcoa site as such a base. The Union was disputing its right to do so. Both parties were seeking to achieve a benefit from negotiation, but they could not agree. They resolved the matter by leaving the clause as it was. The only inference that can be drawn is that the parties agreed to leave the question for resolution on another day. In our view such evidence as there was of the negotiations between the parties is far from complete and of no assistance in construing cl 15. The Full Bench correctly concluded that "in this case" the evidence concerning the negotiations was of no assistance. In this regard, no jurisdictional error is demonstrated.
122 We turn to the question of "common understanding". The Union submits that there were "common understandings", based on "custom and practice" concerning the way in which clauses which were analogous to cl 15 had been applied in the past. Use of the expression "custom and practice" may be a little misleading. We do not understand the Union to submit that in this case, the relevant employees had any prescriptive rights arising out of custom and practice. Rather it submits that cl 15 should be construed upon the basis of some pre-existing common understanding as to the meaning of earlier analogous clauses. In particular, as the argument has been presented before us, it seems to be that the term "employee's Company base" was commonly understood (ie by ALS and the Union or, perhaps, the relevant employees) as incorporating certain locations, but not the Alcoa sites.
123 The term "common understanding" also has the capacity to mislead. Codelfa and subsequent cases establish that a contract should be construed against objective background facts known to both parties. For present purposes, the question is whether the parties had a shared understanding of the meaning of the term "employee's Company base". Although the Union seeks support from the documents dated 6 and 7 September 2012, neither suggests any shared understanding of the meaning of the previous analogous clauses or any proposed clause.
124 We have, above, set out the Deputy President's reasons at [4] to [8]. Those paragraphs identify the factual matters lying at the heart of this dispute. The only possible dispute concerning those facts is as to the proposition that Canning Vale has always been described in the workplace as a "Company base". Other factual allegations emerge from the evidence of Mr McCrea, Mr New and Mr McGinty. Mr McCrea says in his affidavit:
23. …
a. The Canning Vale Company base has always been described in the workplace as a "company base".
b. Much of the infrastructure that was at the Welshpool Company base including the office administration (staff and facilities), an x-ray bay, was moved to the Canning Vale company base. A ten tonne overhead crane was also installed in the workshop that is at the Canning Vale company base.
...
25. All of the work that I have performed at Alcoa's Kwinana site is from a transportable office that is located north of Alcoa's jetty that is known as the Site Office ("the Site Office").
a. The Site Office was a "crib hut" that was used by Alcoa Shift Maintenance employees that has been converted into a small office.
b. I have attached to this affidavit, and marked "MM-5", aerial images of the Site Office that show its location inside the Alcoa site.
c. To the best of my knowledge, the Site Office is owned by Alcoa.
d. There is also a small sized shipping container on site near the Site Office that we use to store equipment.
26. I cannot enter Alcoa's Kwinana Site without a current Alcoa access card. The Site Office is not publically accessible in the same way the Canning Vale Company base is.
a. To obtain an Alcoa access card, I had to complete an induction by Alcoa.
b. Every time my Alcoa access card expires, I need to redo the Alcoa induction before I can be issued with a new Alcoa access card.
c. Alcoa requires vehicle passes for any vehicles that ALS employees may be required to drive into the Alcoa Kwinana site.
27. To get to the Site Office, I have to swipe my Alcoa access card at the front gates of Alcoa's Kwinana site.
28. While at Alcoa's Kwinana site I work under the direction, control and supervision of Alcoa managers and supervisors. Alcoa controls everything that I do at the Kwinana site.
a. I have to report to the Alcoa Site Manager about all of the work that I perform at Alcoa's Kwinana site.
29. I cannot access any of the Respondent's information systems while I am working at Alcoa's Kwinana site.
a. The Respondent has an intranet site called "ALS Sharepoint". I cannot access the Respondent's intranet site from Alcoa's Kwinana site.
b. I cannot access any of the Respondent's work procedures or policies while at Alcoa's Kwinana site.
c. I am required to follow Alcoa's policies and procedures while I am at and performing work at the Alcoa Kwinana site.
30. Throughout my employment, the Alcoa Kwinana site has never been described as "a company base". The only change in terminology that I have heard and seen used, is to describe the Alcoa Kwinana site as a "strategic site".
31. ALS is the only company in the entire time that I have been employed as an NDT Technician to use the "strategic site" terminology.
125 In cross-examination, Mr McCrea described the former establishment at Welshpool as "the main company base in Western Australia". It was the head office, with accounting, reporting and administration functions. Technical equipment was located there, as were some technicians. He said that, at p 13/102 to p 14/102, "We all took it for granted the 'company base' was at the company base". At p 14/102 the passage appears:
Why didn't you think Kwinana was your company base?---Because the premises we have there are owned by Alcoa; they owned all the furniture; they owned the computers; they owned the IT system. We do all our reporting, et cetera, on the Alcoa system, in various drives such as U-drive, which they own and maintain. They pay the power bills; they maintain the building. To access the office, we need to have an Alcoa pass. We had to do an induction.
Yes?---Also, to use the phone, we have to get an annual permit to use your phone, to use a camera which we could use for work, we also have to get annual authorisation to use the camera. Day-to-day work we have to get signed off by the relevant Alcoa business centre we're working for and adhere to all their safety standards. Basically they control everything. To bring the vehicles on site, we can't just drive in at the moment. We have to sign in and give a reason for bringing the vehicle on site.
Yes?---No-one else - no other client can access that office. We're there purely to service Alcoa and we're given from them what we need to carry out their work and nothing more.
At p 16/102, this passage appears:
Can you describe for the Deputy President the Bannister Road, Canning Vale premises: what was the size of it; what happened there?---The Canning Vale premises were significantly bigger than the Welshpool premises. The change really came about because they needed a bigger place. So it basically is a large office, double storey, with a large workshop at the back, and the workshop contains x-ray bays, a 10-tonne overhead crane, it's set up for metallurgic people in there, and quite a lot of infrastructure, and mechanical testing as well. There's a large crew of technicians work out of that workshop.
126 Mr McCrea was cross-examined about the size of the establishment at Kwinana, the equipment kept there and movement by ALS personnel around the Alcoa site. He said that he had been to Canning Vale on three or four occasions in the last 12 months. At Kwinana, he reported to a site manager employed by ALS but generally received jobs directly from Alcoa. In re-examination he said that, at the time of the relocation to Canning Vale, other bases were at Bunbury and Kalgoorlie. Mr McCrea seems to have understood that a company base would be a site which ALS owned or leased where, "general clients can come and go".
127 Much of the above evidence goes only to Mr McCrea's knowledge, understanding and assumptions. However, to the extent that it describes the various locations at which ALS conducts its business, it may be relevant. The evidence says nothing concerning ALS's understanding of the term "employee's Company base".
128 Mr New, at paras 35 to 46 of his affidavit, says:
35. For as long as I have been working in the business of the Respondent (and its predecessors), there has always been a distinction between what was a Company base and a site.
…
36. A Company base has always been regarded as premises that are under the direct control of the employer.
a. In all my time with the Respondent (and its predecessors), the Respondent has always had some sort of proprietary right to the premises of a Company base.
b. What constitutes a Company base has always been well known and accepted in the workplace by the employees, managers, and the Respondent (including its predecessors).
37. The Respondent's Company bases in Western Australia can be seen on their webpage.
a. Annexed to this affidavit, and labelled "TGN-4" is a print out of the Company bases shown Respondent's webpage at 20 December 2013 [sic].
b. The Company bases in Western Australia are:
i. ALS Asset Care - Canning Vale (which is the New CV Company Base);
ii. ALS Asset Care - Davenport (which I believe to now be shut down); and,
iii. ALS Asset Care - Kalgoorlie.
…
38. A site, on the other hand, is under the direct control of the client. The Respondent and its employees are generally considered as visitors on the premises of a client's site.
39. Alcoa's Pinjarra Site and Alcoa's Wagerup Site (the Sites) have always been known in the workplace as sites. They have never been called Company bases.
40. In order to access the Sites, all employees of the Respondent need to hold an access card which is issued by Alcoa. The access cards are issued and controlled by Alcoa. We need to swipe the access card at the front gates of the Sites in order to enter and leave the Sites.
a. In order to get and maintain an access card all employees of the Respondent are required to:
i. Engage in Alcoa's induction refresher training every two years;
ii. Take part in different mandatory training packages approximately every five weeks
1. The mandatory training packages include: working at heights, working in confined spaces, hydration, hearing, dangerous substances
41. While on the Sites, I need to follow all the rules and procedures of Alcoa. This includes carrying the PPE required by Alcoa.
42. While working on the Sites, I have to constantly report to Alcoa's different operational areas in regards to where I am performing work and what work I am performing.
43. Every time I perform a job I need to sign a work planning form and a JSA and supply a copy of those forms to Alcoa.
a. The forms I fill out are on the Alcoa letterhead;
44. Alcoa can stop me from performing any work on site if they do not approve of that work.
45. Alcoa can remove and/or ban me from accessing the Sites.
46. The facilities at the Sites are provided by and controlled by Alcoa.
a. The facilities include conference rooms, kitchens, and toilets.
b. The facilities are normally portable, and are moved around by Alcoa.
c. The Respondent cannot prevent Alcoa from moving or restricting access to the facilities at the Sites.
129 In para 36(b) Mr New asserts that employees, managers and ALS knew and accepted, "[w]hat constitutes a Company base". Paragraph 36 seems to suggest that such a base must be within the direct control of the "employer". Mr New says that during his time, ALS has always had "some sort of proprietary right" in the premises constituting a Company base. At para 37 he refers to an ALS website as identifying bases at Canning Vale, Davenport and Kalgoorlie. However it is not clear that the term "Company base" is used in the exhibit to which he refers. At para 38, he says that "sites" are under the direct control of the client, and that ALS and its employees are generally considered to be visitors. Mr New then addresses movement around Alcoa sites and security matters. In his oral evidence he asserted that the Company base is the, "proprietary office of the company, the headquarters, if you like". (See p 38/102.) He was asked the reason for this understanding. At p 38/102, he replied:
Well, because historically, we've always been - had trouble from that place. That's where the hierarchy, if you like, of the company resided, the administration staff, the general manager. They've always been in that location so that's my understanding.
130 An interesting passage appears at p 40/102 as follows:
Up until recently have any of the Alcoa sites been referred to as company bases?---I think the managers might have referred to them as company bases, yes.
Sorry, I'll put that in another way. Leaving aside what's been discussed late last year - - - ?---Yes, that's what my reference is - - -
Yes?---In relation to the negotiations, yes.
If we put that to one side?---Yes.
Have they ever been referred to as company bases in the past?---No, they've always been work sites.
Right?---Or strategic sites, is what they're currently named.
And in your opinion, what's the difference---Well, the difference is that a base is where the company is located, where they have jurisdiction, they have administration, they have the managers.
Yes?---Whereas the work site - the particular client, in this case, Alcoa, obviously, has jurisdiction over those work sites - complete jurisdiction over those work sites, so that's the distinction as I understand it.
It is difficult to avoid the conclusion that Counsel for the Union was seeking to escape an unexpected and unfavourable answer. In cross-examination, Mr New stressed the need for a Company base to be owned or leased by ALS and under its control.
131 Mr McGinty said at paras 30 and 31 of his affidavit:
30. ALS (or its previous entities) has maintained bases at each of the three Alcoa sites for over 15 years. At these locations ALS has:
1) designated offices, vehicles, crib rooms and dark rooms;
2) over $1M of test equipment permanently located;
3) site managers permanently based;
4) IT systems, office equipment and furniture; and
5) other facilities typically associated with operating a business.
31. Employees start work and finish work every day at their site.
132 In Mr McGinty's oral evidence at p 62/102 this passage appears:
If I could refer you to paragraph 30, Mr McGinty and invite you to elaborate on the facilities that ALS has on the Alcoa sites? If you could paint a picture for the commission, please?--Okay, we have three bases. One at Kwinana, one at Pinjarra and one at Wagerup. Of each of the three sites there are designated officers, crib rooms, storage areas. Typically we have a dark room which is used for processing of radiography films. We have vehicles dedicated to those sites. We have a very significant amount of test equipment dedicated to those sites. We have permanently-based site managers. We have IT systems. We also use the client's IT systems. We have our own office equipment and furniture and we have everything effectively we need there to execute our work on those sites.
If I could specifically direct you to the Alcoa Pinjarra site, can you describe the buildings that ALS occupies at that site?---Yes. There's a significant building that Alcoa have provided us with which houses a reasonable amount of our workforce with offices and other facilities. There are also three other temporary buildings on that site that ALS either owns or leases.
So the three other buildings you're referring to are either owned or leased by ALS?---Correct.
133 In cross-examination Mr McGinty agreed that Alcoa sites had not previously been treated as employees' Company bases for the purpose of calculating travel allowances.
134 All of this evidence can only be relevant to the question of shared knowledge of background circumstances. Save for Mr New's bare assertion that employees, managers and ALS knew and accepted his view as to the meaning of the term "Company base", there is no evidence as to any shared knowledge concerning that matter. Mr McGinty's evidence is to the contrary. In the circumstances it is hardly surprising that the Full Bench concluded that it would not assist to seek to formulate a "common understanding" based on "custom and practice". Again, no jurisdictional error is shown.
135 The Union then submits that the Full Bench erred in not considering, as part of the construction exercise, whether travel was in the course of employment. The Union submits that time taken in travelling to and from Alcoa sites has always been regarded as "time worked". However, as we have observed, the Union's case is not based on prescriptive rights. Rather, it seeks to establish a basis for construing the cl 15 agreement in the context of facts and understandings shared by it and ALS. The point seems to be that discussed by the Deputy President at [42] to [47] of his reasons. He there identified the "crux of this dispute" as being whether, "travel to and from the place where work is performed [is] 'in the course of employment'". (See [43].) This approach was apparently based upon a distinction which the Deputy President drew, but did not explain, between an "allowance" and a "payment", a matter to which he returned at [53] to [55]. No doubt such distinction has some relevance in the specialized sphere of industrial relations, but it is difficult to see how it can be relevant to the construction of the power conferred upon ALS to vary an employee's Company base. The matter would only be relevant to the construction of cl 15 if it were part of the surrounding circumstances in which the 2012 Agreement was made. No attempt has been made to explain its relevance in that respect. As we have previously observed, by agreeing to the inclusion of cl 15 in the 2012 Agreement, both sides implicitly accepted that they held conflicting views concerning its meaning, which dispute would have to be resolved using available dispute resolution procedures. Again, we consider that the Full Bench committed no jurisdictional error in dismissing that matter as being of no assistance in the task which it had to perform.
136 Finally, it is said that the Full Bench committed jurisdictional error in treating as irrelevant the terms of the award which would otherwise have regulated the employment of the relevant employees. The Deputy President concluded at [55] that:
There are a number of substantial differences between the Agreement and the relevant Award. The Award clause title refers to "transfers, travelling and working away from usual place of work". The Award clause then refers to "the employer's usual workplace". The operative noun is "workplace" and not "base". Secondly, it is the "employer's workplace" and not "the employee's workplace". Thirdly, it is the employer's usual workplace. Thus, the condition precedent for the entitlements to be payable under the Award are that work is performed at a place different to the usual place. The language of the 2012 Agreement displays such a contrast to the language of the Award is indicative that these differences are aimed at achieving a different purpose than the travel provisions in the Award. Whilst there is some capacity to have differences as to the meaning of the terms of the Agreement itself, there can be no doubt from the contrasting language, terminology and express conditions that something different to usual workplace was intended to create the entitlement.
(Emphasis in original.)
The Union has not demonstrated any useful purpose to be served by a consideration of the award. We are unable to identify any such purpose. The Full Bench did not fall into jurisdictional error in concluding that it would gain no assistance from such consideration.
137 Finally the Union makes the broader submission that the Full Bench merely concluded that the wording of cl 15 did not compel acceptance of the Union's construction of it in that the ordinary meaning of the words could accommodate the ALS's construction. The Union submits that the Full Bench then decided that none of these "extrinsic" matters should lead it to the adoption of a different construction.
138 Codelfa suggests that evidence of surrounding circumstances cannot be used to contradict the plain meaning of the words used in a contract. However it is true that Codelfa also asserts that context may only be used to assist in construction if the language is ambiguous or susceptible of more than one meaning. As we have demonstrated, later decisions suggest that context is, in all circumstances, relevant in determining the meaning of a contract. This will especially be the case where it is said that words are used with a special meaning. Assuming for present purposes that reference to context may lead to a construction which does not reflect the plain meaning of the words used, we do not accept that the Full Bench took an approach which was inconsistent with authority. At [13] of its reasons the Full Bench directed itself as to the law and then sought to construe the clause, having regard to context. Context is discussed at [14] and [15]. At [16] the Full Bench explained how the clause might work, having regard to the context. The Union appears to rely upon the statement at [17] as to construction without reference to [18].
139 It follows that, subject to the submissions concerning s 577 of the Fair Work Act, no jurisdictional error has been demonstrated.