[1] On 7 May 2003 Beltana Highwall Mining Pty Ltd (Beltana) lodged an application to vary the Beltana No.1 Salaried Staff Certified Agreement 2001 (AG804786) (the Beltana Staff Agreement or the ACSA Agreement) to remove an ambiguity or uncertainty pursuant to s.170MD(6) of the Workplace Relations Act 1996 (the WR Act). The application seeks:

"1. The definition of `Employee(s)' in Clause 2.6 be varied to read:

`Employee(s)' means employees of the Company performing or carrying out all or any of the work, functions or duties of the kind performed by persons in the coal mining industry in the classifications set out in Clause 16.2 and 16.3 of the Coal Mining Industry (Supervision and Administration) Consent Award, 1999, New South Wales and Tasmania, or such classifications as set out in any variation to that award or such other industrial instrument that supercedes that award.

This Agreement, made under Division 2 of Part VIB of the Act is binding upon:

. The Association of Professional Engineers, Scientists and Managers, Australia; and

[2] The grounds on which the application made are as follows:

"1. Beltana and the Australian Collieries Staff Association (the ACSA) (now a division of the Association of Professional Engineers, Scientists and Managers, Australia) are parties to the Beltana Staff Agreement.

2. By reason of section 170M(1) and (2) of the Act, the Beltana Staff Agreement, being an agreement made under Division 2 of the Act, is binding upon:

(b) all persons whose employment is, at any time when the agreement is in operation, subject to the agreement; and

3. The Beltana Staff Agreement replaces in their entirety all awards and agreements otherwise applying to the parties.

4. Clause 4.2 of the Beltana Staff Agreement reads as follows:

`This Agreement made under Division 2 of Part VIB of the Act is binding upon:

* The Australian Collieries Staff Association and

* The Employees of the Company working in supervision and administration roles covered by the Staff Award'

5. Beltana has employed a number of employees (Staff Employees) pursuant to contracts of employment which are to be read in conjunction with the terms and conditions of the Beltana Staff Agreement.

6. The Staff Employees work in supervisory and administrative roles covered by the Coal Mining Industry (Supervision and Administration) Interim Consent Award 1999, New South Wales and Tasmania.

7. Since the commencement of their employment the Staff Employees have been paid in accordance with the provisions of the Beltana Staff Agreement and continue to be so paid.

8. A dispute has arisen as to the proper interpretation of clause 4.2 of the Beltana Staff Agreement, the contention being that any of the Staff Employees who are not members of the ACSA are not bound by the Beltana Staff Agreement.

9. Beltana disputes this contention, but for purpose of removing any ambiguity or uncertainty, it seeks the orders referred to above.

10. The materials contained in the affidavit of Mr Jonathan Romcke filed with this application.

11. Such other grounds as the Commission thinks fit."

[3] The matter was initially listed for directions on 8 May 2003 and hearing on 12 May 2003. The substantive matter was heard in Sydney on 21 and 22 May 2003. Mr H Dixon SC appeared for Beltana, Mr J Sheather appeared for The Association of Professional Engineers, Scientists and Managers, Australia (APESMA or ACSA) and Mr T Slevin of counsel appeared for the Construction, Forestry, Mining and Energy Union (CFMEU) (intervening). ACSA amalgamated with APESMA on 1 December 2001.

[4] The background circumstances which have led to the application can be shortly stated:

· The Beltana Staff Agreement was certified on 18 January 2001 and remains in force until 15 January 2004.

"4.2 This Agreement, made under Division 2 of Part VIB of the Act is binding upon:

. The Australian Collieries Staff Association and

. The Employees of the Company working in supervision and administration roles covered by the Staff Award."

Clause 2.6 provides the following definition of employee:

"`Employee(s)' means employees of the Company working in supervisory and/or administration roles covered by the Staff Award."

· Clauses 5.2.1 and 2 of The Coal Mining Industry (Supervision and Administration) Consent Award 1999, New South Wales and Tasmania (AW772793) (the ACSA Award or the staff award) define the classifications of Production Supervisor and Open-cut Overseer and clause 5.2.11 defines the classification of Deputy (NSW).

· A second agreement known as the Beltana No. 1 Certified Agreement 2001 (AG806190) (the P&E Agreement) was certified on 2 April 2001. It expired on 2 April 2003. Clause 2.6 states:

"`Employee(s)' means employees of the Company working in areas covered by the P & E Award."

Under Part 3, Remuneration in clause 9 it provides an annual salary for Level 2 - Supervisor:

and at clause 9.3 it provides the classification Deputy:

A role allowance will be paid for the purpose of communications/planning and statutory reporting associated with the role. Persons who receive such an allowance must have a statutory appointment either as a deputy, mechanical fitter or electrical fitter. ..."

· The CFMEU has members employed at the mine whose employment is covered by the P&E Agreement and who, as a consequence, are entitled to take industrial action which is protected under s.170MT of the WR Act.

· For its part, Beltana submits that the Staff Employees, including CFMEU members, are paid under Salary Package Agreements which must be read in conjunction with the Beltana Staff Agreement. Exhibit JR2 attached to the affidavit of J Romcke states:

"1.1 This Offer of Employment and Salary Package Agreement is subject to the Terms and Conditions of the Beltana No. 1 Mine Salaried Staff Certified Agreement 2001.

1.2 In this contract, any reference made to the Beltana No. 1 Mine Salaried Staff Certified Agreement 2001 should be read and understood to include any variation or superseding Agreement to the Beltana No. 1 Mine Salaried Staff Certified Agreement 2001. This is subject to the varied or superseding Agreement being certified by the Australian Industrial Relations Commission.

1.3 Under this Agreement you are employed as a salaried employee. Accordingly, the terms and conditions of this Agreement fully compensate you for fulfilling all of the requirements of your position. You agree to release the Company from any liability or obligation arising under any industry or site award or agreement that would otherwise apply to your employment."

· As such a dispute has arisen between the CFMEU and Beltana in respect of the proper rate of pay and conditions of work which should apply to the Staff Employees who are CFMEU members.

· The CFMEU served Notification of Intention to Take Industrial Action in accordance with s.170MO of the WR Act:

. on 2 April 2003 in respect "of a 24 hour stoppage of work commencing at 11.20pm on Sunday 6 April 2003 and concluding at 11.20pm on Monday 7 April 2003" (Exhibit JR7)

. on 14 April 2003 in respect of "stoppage will commence Afternoon Shift on Thursday 17 April 2003" (Exhibit JR8)

. on 17 April 2003 in respect of "industrial action will take the form of a 7 day stoppage of work commencing at 11.20pm on Wednesday 23 April 2003 and concluding at 11.20pm on Wednesday 30 April 2003" (Exhibit JR9)

. on 28 April 2003 in respect of "industrial action will take the form of a 7 day stoppage of work commencing at 12 midnight on Friday 2 May 2003 and concluding at 12 midnight on Friday 9 May 2003" (Exhibit JR10)

. on 5 May 2003 in respect of "industrial action will take the form of a 7 day stoppage of work commencing at 12 midnight on Friday 9 May 2003 and concluding at 12 midnight on Friday 16 May 2003" (Exhibit JR13)

· The industrial action by "P&E employees commenced on 6 April 2003 and is ongoing" (Transcript PN90) and "the staff employees decided to join in the industrial action by the P&E employees starting from the 29 April and that industrial action is ongoing" (Transcript PN93). I was not informed of the subsequent status of the industrial action in the substantive proceedings.

· Beltana has applied for a variation of the Beltana Staff Agreement pursuant to s.170MD(6) as a consequence of a jurisdictional finding that an ambiguity or uncertainty exists over the definition of employee in that agreement.

"(6) The Commission may, on application by any person bound by a certified agreement, by order vary a certified agreement:

(a) for the purpose of removing ambiguity or uncertainty; or

(b) for the purpose of including, omitting or varying a term (however expressed) that authorises an employer to stand-down an employee."

· Mr Jonathan Romcke, Operations Manager and Mine Manager at Beltana No.1 Mine;

· Mr John Pala, a company director for a company called Polaris Mining and in that capacity a consultant to the Xstrata group of companies including Beltana (telephone evidence);

· Mr Phil Jones, the General Manager, Administration and Human Resources currently employed by Xstrata Coal Australia Pty Limited (telephone evidence).

[7] The CFMEU called the following witnesses:

· Mr Keenon Endacott, Industrial Research Officer, Mining and Energy Division, Northern District Branch of the CFMEU;

· Mr Ian Murray, Vice President, Northern District Branch of the CFMEU;

[9] A large body of evidence was admitted on the basis that the parties argued the respective evidence provided a background or context within which the application should be considered. I have given careful consideration to all the evidence and the weight which should be attributed to it. I have concluded that it is not necessary for me to summarise and make findings on aspects of the evidence which are said to be relevant for the purposes of providing a contextual framework. It is sufficient for my purposes in developing a context or framework to rely upon general aspects of the evidence which were, in general, not contested. Findings in respect of other specific aspects of the evidence are made in the course of evaluating the application.

[10] By way of background, the uncontested evidence reveals:

· Beltana is an underground coal mine situated about 100 metres from the Bulga South Coal Mine.

· Beltana and Bulga are owned by a consortium of companies.

· Beltana is commonly operated as a joint venture with a complex management and ownership structure.

· Following changes in ownership of the Beltana operations in early to mid October 2000, the company informed the CFMEU that, contrary to earlier expectations, the South Bulga infrastructure would not be used for Beltana's operations which was to be treated as a greenfields site.

· Negotiations ensued between Beltana represented by Mr Pala and Mr Jones and the CFMEU represented by Mr Murray and Mr Endacott in late 2000 and early 2001 in respect of the transfer of a number of South Bulga employees to Beltana.

· On 7 December 2000, Mr Cribb from Glencoe Coal Australia Pty Ltd (who had overall responsibility for what was occurring) wrote to every employee at South Bulga at this time informing them of their position with respect to the Beltana project.

· The letter stated, in part (Attachment GJR1 to Exhibit S.3 - Statement of Mr G Russell):

"Negotiations have commenced between the company and district officials to establish a greenfields agreement under section 170LL of the Workplace Relations Act. During this process, through your local representatives and the district officials Glencore representatives have openly stated that the Beltana No.1 project will have a greenfields enterprise agreement and will employ on merit.

Glencore has given a written undertaking to the District negotiating team that allows for the employment of people at Beltana to be selected on merit from the current South Bulga workforce."

· Notwithstanding the CFMEU's objection to a greenfields certified agreement, a Memorandum of Understanding concerning the Beltana Certified Agreement was entered into which dealt with the movement of South Bulga employees to Beltana. Under this Memorandum, it was agreed that its terms would have no effect until a Beltana Enterprise Greenfields Site Agreement was certified and the South Bulga Enterprise Agreement was certified under the WR Act. Unless these two agreements could be reached, it was Beltana's position that the entire workforce would be retrenched with no prospect of continuing employment at Beltana.

· Both the Beltana No.1 Certified Agreement 2001 (Beltana No.1 Agreement or the P&E Agreement) and South Bulga Colliery Certified Agreement 2001 were certified on the basis of this understanding. (See Attachments IMM7 and IMM8 to Exhibit S.2.)

· The Beltana No.1 Agreement applies to Beltana, the CFMEU and employees of Beltana working in roles covered by The Coal Mining Industry (Production and Engineering) Consolidated Award 1997 (AW774609) (the P&E Award). The agreement operates in conjunction with the P&E Award.

· The Beltana Staff Agreement applies to Beltana, ACSA and employees of Beltana working in supervision and administration roles covered by the ACSA Award. This agreement was certified on 18 January 2001 and expires on 18 January 2004. The ACSA Award is a members-only award.

· The agreements provide for overlapping classifications with respect to certain supervisory and deputy functions. It was Beltana's evidence that this situation was negotiated to give it choice to decide on the terms and conditions of its "staff employees" (Transcript PN352 (Romcke) and PN931 (Pala)).

· It was the CFMEU's evidence that it was told during negotiations that supervisory staff who would form part of the new crew team structure would be production and engineering positions (Transcript PN538 (Endacott)).

· An issue arose with respect to the coverage of the CFMEU members who perform administrative and supervisory roles covered by the staff agreement. That arises in respect of negotiations over a new certified agreement for the P&E employees and whether CFMEU staff members are entitled to take industrial action which is protected by virtue of being bound by the P&E Agreement and not the ACSA Agreement.

[11] Much of the evidence falls into either the category of being of little assistance, either because it is of little relevance to the task at hand or because it is based on assertion, or hearsay evidence (the latter category is referred to in more specific terms later in this decision). Issues which I consider fall in to this area include:

· detailed evidence of the complex ownership structure of the South Bulga and Beltana Collieries;

· the issues currently in dispute between Beltana and the CFMEU in respect of negotiating a certified agreement for the P&E employees;

· disputed matters which have arisen out of the disagreement between Beltana and the CFMEU over the interpretation of the coverage of the ACSA Agreement including claims of underpayment of wages;

· the commitment given by Beltana to the CFMEU as to the number of CFMEU members who would transfer from Bulga to Beltana;

· circumstances leading to the signing of the Memorandum of Understanding between Beltana and the CFMEU which included a commitment that there would be a Beltana No.1 Certified Greenfields site agreement (s.170LL) together with a South Bulga Enterprise Agreement to be certified as a separate agreement;

· the circumstances in which the issue of the coverage of CFMEU staff employees was first raised.

[12] I have considered the evidence which was given in respect of:

· the motive behind the CFMEU raising with its staff members the coverage issue in the context of a P&E Agreement being negotiated under the statutory provisions; and

· the motive behind Mr Endacott's unqualified legal advice to CFMEU staff members that they were entitled to engage in industrial action over a new certified agreement on the basis that to do so would be protected action.

[13] I would regard this evidence as irrelevant to my task except for the reliance placed on it by Beltana on the conduct of the CFMEU as being "opportunistic". I refer later to this aspect of the evidence.

[14] A number of issues which arise from the evidence have contributed to the on-going disputation at Beltana. Neither party has sought to resolve the outstanding issues in dispute by way of application to the Federal Court or this Commission. The granting or otherwise of the s.170MD(6) application cannot of itself be a means of resolving these matters.

[15] It should also be noted that issues arose during the evidence which pertains to the conduct of the parties subsequent to the making of the agreement between ACSA and Beltana. In this regard I rely on the decision of Gray J in Printing and Kindred Industries Union & Anor v Davies Bros Ltd (23.12.86) (18 IR 444) at p.452:

"The second major area of evidence concerned the conduct of the parties. Here again, the court must be wary of admitting the evidence. In Seamen's Union of Australia v Adelaide Steamship Co Ltd (1976) 46 FLR 444, at 445, the Australian Industrial Court held that evidence of the conduct of the parties subsequent to the making of an award was inadmissible, even for the purpose of resolving an ambiguity in the terms of the award."

[16] Finkelstein J in Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union v Skilled Engineering Ltd (27.3.03) (V1139 of 2001) where he quotes Lord Wilberforce in Prinn v Simmonds (1971) 1 WRL 1381 at 1385:

"[E]vidence should be restricted to evidence of the factual background known to the parties at or before the date of the contract, including evidence of the `genesis' and objectively the `aim' of the transaction."

[17] It must follow that evidence going to the conduct of the parties, especially a third party (the CFMEU), is of even less assistance to the Commission in resolving an ambiguity or uncertainty under s.170MD(6). In the circumstances of this matter I see no material difference between a respondent to an award and a respondent to an agreement. Evidence going to conduct of the parties subsequent to the making of the agreement is not a relevant consideration in determining whether an ambiguity or uncertainty exists. It may be a consideration in an exercise of discretion once the Commission has made a jurisdictional finding to vary the agreement to remove an identified ambiguity or uncertainty.

[18] In Re Victorian Public Transport Enterprise Agreement 1994 (Ross VP, Polites SDP and Grimshaw C) (7.6.95) (Print M2454) the Full Bench said (at pp.3-4):

"The first part of this process involves an objective assessment as to whether or not an ambiguity or uncertainty exists.

In relation to the nature of the test to be applied in identifying an ambiguity or uncertainty, we note the following observation of Gray J in Printing & Kindred Industries Union & another v. Davies Bros Ltd (PKIU Case) [(1986) 18 IR 444 at 449]:

`There appears to be no clear test laid down for determining when an ambiguity exists. At one extreme is the statement of Isaacs ACJ in Pickard v. John Heine & Son Ltd [1924] HCA 38; (1924) 35 CLR 1, at 9, where his Honour said, in interpreting an award: `Personally I see no ambiguity. But as the interpretation I favour was disputed at the Bar, it must be because there is such ambiguity.' At the other extreme is the statement of Viscount Simonds in Kirkness v. John Hudson and Co Ltd [1955] AC 696, at 711-712, with reference to an earlier decision of the House of Lords interpreting a statute:

`In this case Lord Buckmaster was of opinion, as had been at least one of the members of the Court of Appeal, that the first contention of the Crown was right, and that the words of the earlier Act had the meaning they sought to put upon them. The other noble and learned Lords thought otherwise. It would have been easy then to say that, since judicial opinion differed as to the meaning of these words, there was such an ambiguity as to justify recourse to a later Act to resolve it. But the decision of this House was unanimously to the contrary. That means that each one of us has the task of deciding what the relevant words mean. In coming to that decision he will necessarily give great weight to the opinion of others, but if at the end of the day he forms his own clear judgement and does not think that the words are `fairly and equally open to divers meanings' he is not entitled to say that there is an ambiguity. For him at least there is no ambiguity and on that basis he must decide the case.'

Care must be taken, of course, not to create an ambiguity by bringing into consideration external factors which may be used legitimately to resolve an ambiguity if one exists. If I were to apply the test laid down by Viscount Simonds, I should hold that no ambiguity arises in the present case, because the word `employees' bears its ordinary, natural and unrestricted meaning in the context of the SEM Agreement and the Newspaper Printing Agreement 1979. On the other hand, if I were to apply the test applied by Isaacs ACJ, I should hold that an ambiguity arises because of the rival contentions of counsel. Perhaps in a case such as this I should hold that an ambiguity does exist, and to see where the application of extrinsic aids to interpretation leads in the construction of the document.'

In our view the approach adopted by his Honour Gray J. in the PKIU case is a sensible one and should be applied by the Commission in dealing with applications to vary agreements for the purpose of removing ambiguity or uncertainty. Accordingly the Commission would generally err on the side of finding an ambiguity or uncertainty in circumstances where there are rival contentions advanced before it and an arguable case can be made out for more than one contention.

Once an ambiguity or uncertainty has been identified it is then a matter of discretion as to whether or not the agreement should be varied to remove the ambiguity or uncertainty. In exercising such a discretion the factors to which the Commission should have regard would include the intention of the parties at the time the Agreement was made. Such an intention may be discerned from the circumstances at the time and the subsequent conduct of the parties.

"However the question of whether or not any ambiguity was intended by the parties is clearly a factor which is relevant to the exercise of the Commission's discretion in deciding whether or not to vary an agreement to remove an ambiguity or uncertainty. In this regard it is apparent from his Honour's decision that he was of the view that even if his construction of the Act was wrong he would nevertheless not have exercised his discretion to vary the agreement in a manner which would impose on a party an outcome which it would not have countenanced when it entered into the agreement.

The reason advanced for not exercising his discretion to vary the Agreement was that the variation would not have been within the contemplation of the other parties to the Agreement at the time they entered into the Agreement. In our view the reason given by his Honour is a factor which he was entitled to take into account in the exercise of his discretion."

[19] In Re Tenix Defence Systems Pty Ltd Certified Agreement 2001-2004 (Ross VP, O'Callaghan SDP and Foggo C) (9.5.02) (PR917548), a Full Bench dealt with an appeal against a decision of Commissioner Hingley in which he dismissed an application to vary the Tenix Defence Systems Pty Ltd Certified Agreement 2001-2004 to remove an ambiguity or uncertainty.

[20] The Full Bench considered the appropriate test to apply in dealing with an application under s.170MD(6) (footnotes excluded) (PR917548):

"[28] Before the Commission exercises its discretion to vary an agreement pursuant to s.170MD(6)(a) it must first identify an ambiguity or uncertainty. It may then exercise the discretion to remove that ambiguity or uncertainty by varying the agreement.

[29] The first part of the process - identifying an ambiguity or uncertainty - involves an objective assessment of the words used in the provision under examination. The words used are construed having regard to their context, including where appropriate the relevant parts of a related award. As Munro J observed in Re Linfox - CFMEU (CSR Timber) Enterprise Agreement 1997:

`The identification of whether or not a provision in an instrument can be said to contain an `ambiguity' requires a judgment to be made of whether, on its proper construction, the wording of the relevant provision is susceptible to more than one meaning. Essentially the task requires that the words used in the provision be construed in their context, including where appropriate the relevant parts of the `parent' award with which a complimentary provision is to be read.'

[30] We agree that context is important. Section 170MD(6)(a) is not confined to the identification of a word or words of a clause which give rise to an ambiguity or uncertainty. A combination of clauses may have that effect.

[31] The Commission will generally err on the side of finding an ambiguity or uncertainty where there are rival contentions advanced and an arguable case is made out for more than one contention.

[32] Once an ambiguity or uncertainty has been identified it is a matter of discretion as to whether or not the agreement should be varied to remove the ambiguity or uncertainty. In exercising such a discretion the Commission is to have regard to the mutual intention of the parties at the time the agreement was made.

[33] We agree with Tenix that the first step in dealing with a s.170MD(6)(a) application - the identification of an ambiguity or uncertainty - requires the determination of a `jurisdictional fact'. In Corporation of the City of Enfield v Developmental Assessment Commission the joint judgment of Gleeson CJ, Gaudron, Gummow, Kirby and Hayne JJ described the term `jurisdictional fact' in these terms:

`The term `jurisdictional fact' (which may be a complex of elements) is often used to identify that criterion, satisfaction of which enlivens the power of the decision-maker to exercise a discretion.'

[34] Similarly in Re: CFMEU - Termination of Bargaining Periods, Lee and Madgwick JJ said:

`... the question presents as one of whether the Commission may have erred as to a `jurisdictional fact', that is, the existence or non-existence of a state of affairs which was a statutory precondition to the Commission acting ...'

[35] In the context of s.170MD(6)(a) the Commission must first identify the existence of an ambiguity or uncertainty before exercising its discretion to vary the agreement. We agree with the Full Bench in Re: CFMEU Appeal which described the existence of an ambiguity or uncertainty as `a necessary statutory prerequisite to any variation being made.'

[36] In dealing with an appeal from the determination of a jurisdictional fact a Full Bench of the Commission is concerned with whether the member at first instance reached the right conclusion. It is not concerned simply with whether the decision of the single member was reasonably open to him or her. As Gummow J pointed out in Minister for Immigration and Multicultural Affairs v Eshetu, a court or tribunal cannot give itself jurisdiction by erroneously deciding that a jurisdictional fact exists. In our view the converse also applies - an erroneous decision about the non-existence of a jurisdictional fact would be a constructive failure to exercise jurisdiction."

"[53] On balance we find that the extent to which Appendix 3 of the Agreement can be said to regulate work cycles for the period during which the Agreement is in operation is ambiguous and uncertain. In our view it is arguable that there is some question as to the status of the calendar - what obligations or entitlements does it create in the context of the Agreement and the Award? The absence of express provisions stating that the RDOs will be observed on, and cannot be altered from, the days in the calendar gives rise to an ambiguity or uncertainty.

[54] As we have identified an ambiguity or uncertainty in the Agreement it is now a matter of discretion as to whether or not the Agreement should be varied to remove the ambiguity or uncertainty. In exercising such a discretion the Commission is to have regard to the mutual intention of the parties at the time the Agreement was made."

"[57] ... In the proceedings before us Tenix conceded that if we formed the view that the objectively ascertained mutual intention of the parties was that the work cycle implicit in Appendix 3 was to remain unchanged for the life of the Agreement then we could properly give effect to that intention by varying the Agreement pursuant to s.170MD(6).

[58] To the extent that it is necessary to do so we have decided that the approach adopted by the Commissioner, in limiting his consideration of the issue to the variations proposed by Tenix, amounted to an error warranting correction on appeal."

[21] The Full Bench decided to vary the agreement pursuant to s.170MD(6) to give effect to "the objectively ascertained mutual intention of the parties" (paragraph [57]).

[22] In a decision of the Full Court of the Federal Court in Short v Hercus (Keely, Burchett and Drummond JJ) (23.2.93) (46 IR 128), Burchett J said (at p.133):

"The question was raised whether it is legitimate, for the purpose of construing a clause of an award, to look at what was called the history of the provision."

and after considering the authorities on conduct after the making of an industrial agreement concluded (at p.134):

"... but I do not think that the decision affects its authority in relation to the use which may be made, in appropriate circumstances, of the history of a clause found in an industrial agreement. Nor do I think Seymour v Stawell Timber Industries Pty Ltd (1985) 9 FCR 241; 13 IR 289 is of assistance. That was a special case concerned, as appears most clearly from the dissenting judgment of Keely J at 254-255; 299-300 not with the history of an award provision, but with the effect of a prefatory statement made by the parties at the time when it was introduced into the award. The question that divided the court was whether the statement was any clearer than the award itself, a question reminiscent of the difficulties which often arise in relation to the analogous explanatory memoranda presented by ministers to the Parliament.

No one doubts you must read any expression in its context. And if, for example, an expression was first created by a particularly respected draftsman for the purpose of stating the substance of a suggested term of an award, was then adopted in a number of subsequent clauses of awards dealing with the same general subject, and finally was adopted as a clause dealing with that same general subject in the award to be construed, the circumstances of the origin and use of the clause are plainly relevant to an understanding of what is likely to have been intended by its use. It is in those circumstances that the author of the award has inserted this particular clause into it, and they may fairly be regarded as having shaped his decision to do so. The rules of construction, Mason and Wilson JJ said in Cooper Brookes (Wollongong) Proprietary Limited v The Commissioner of Taxation of the Commonwealth of Australia [1981] HCA 26; (1981) 147 CLR 297 at 320, are really rules of common sense. Common sense would be much offended by a refusal to look at the facts I have summarised. As Isaacs J said in Australian Agricultural Company v Federated Engine-Drivers and Firemens Association of Australasia ((1913) [1913] HCA 41; 17 CLR 261 at 272, citing Lord Halsbury LC: `The time when, and circumstances under which, an instrument is made, supply the best and surest mode of expounding it.'

The context of an expression may thus be much more than the words that are its immediate neighbours. Context may extend to the entire document of which it is a part, or to other documents with which there is an association. Context may also include, in some cases, ideas that gave rise to an expression in a document from which it has been taken."

[23] The following guidance can be discerned from authorities which have dealt with s.170MD(6) applications:

· before exercising its discretion to vary an agreement pursuant to s.170MD(6)(a) the Commission must first identify the ambiguity or uncertainty (PR917548 at para.28, Print M2454 at p.3, Print 2431 at para.8);

· the Commission may then exercise the discretion to remove the ambiguity or uncertainty by varying the agreement (PR903843 at para.7, Print M2454 at p.4);

· the first step i.e. identification of an ambiguity or uncertainty requires the determination of a "jurisdictional fact" (PR917548 at para.33[2000] HCA 5; , 199 CLR 135 at 148);

· the correct approach to identifying an ambiguity or uncertainty requires the making of an objective judgment as to whether, on the proper construction of the relevant provision of an agreement, the wording of that provision is susceptible to more than one meaning (PR903843 at para.7, Print M2454 at p.3);

· the words used in the provision are construed in their context including where appropriate the relevant parts of the parent award with which a complementary provision is to be read (Print Q2603 at para.30 per Munro J);

· s.170MD(6)(a) is not confined to the identification of which words of a clause give rise to an ambiguity or uncertainty. A combination of clauses may have that effect (Print R2431 at para.12);

· the Commission will generally err on the side of finding an ambiguity or uncertainty where there are rival contentions advanced and an arguable case is made out for more than one contention (Print M2454 at p.4, Print R2431 at para.14);

· the Commission's task is to make an objective judgment as to whether the wording of a provision is susceptible to more than one meaning. It must avoid contentions that are "self serving" (PR903843 at para. 7);

· the second step in the process is the exercise of discretion as to whether or not an agreement should be varied to remove the ambiguity or uncertainty (PR917548 at para.54);

· the Commission may not appropriately use its power to rewrite an agreement to install something that was not inherent to the agreement when it was made (Print Q2603 at para.29);

· the Commission is to have regard to the mutual intention of the parties at the time the agreement was made (PR917548 at para.54) and subsequent conduct of the parties;

· the Commission is empowered to remove an ambiguity or uncertainty by varying an agreement to remove it in a manner which gives effect to the mutual intentions of the parties at the time the agreement was made. The Commission is not limited by the form of the application before it (PR917548 at para.56);

· in looking at the context of a provision the Commission is entitled to consider (46 IR 128 at p.134):

. the effect of a prefatory statement made by the parties at the time when it was introduced into the award;

. the circumstances of the origin and use of the clause;

. the time when and the circumstances under which the instrument is made;

. the entire document of which the contentious provision is part or other documents with which there is an association;

. ideas that give rise to an expression in a document.

[24] In summary, the task is to make an objective judgment as to whether the wording of a provision(s) is susceptible to more than one meaning. If that judgment is in the affirmative then the Commission may exercise its discretion to decide whether or not the agreement should be varied to remove the ambiguity or uncertainty. In exercising such a discretion, the Commission is to have regard to the mutual intention of the parties at the time the agreement was made.

[25] In Beltana's submission, by reason of ss.170M(1) and (2) of the WR Act, the Beltana Staff Agreement is binding upon:

(b) all persons whose employment is, at any time when the agreement is in operation, subject to the agreement; and

"(1) If the application for certification states that the application is made under Division 2, the certified agreement binds:

(b) all persons whose employment is, at any time when the agreement is in operation, subject to the agreement.

(2) If, in accordance with section 170LJ or 170LL, one or more organisations of employees made the agreement with the employer, the agreement also binds the one or more organisations."

[27] Beltana submits that the Staff Employees who have signed the Salary Package Agreements described in paragraph [4] above, all work in supervisory and administrative roles covered by the award. It disputes the contention advanced by the CFMEU that Staff Employees who are not members of ACSA are not bound by the Beltana Staff Agreement.

[28] Beltana further submits that the Beltana Staff Agreement would override the terms of the P&E Agreement to the extent of inconsistency.

[29] Beltana asked the Commission to read the words of the Beltana Staff Agreement in the context of other provisions of the agreement and the Salary Package Agreements:

2.5 `Staff Award' means the Coal Mining Industry (Supervision and Administration) Consent Award, 1999, New South Wales and Tasmania, as varied, or such other industrial instrument that supercedes that Award.

2.6 `Employee(s)' means employees of the Company working in supervisory and/or administration roles covered by the Staff Award.

4.2 This Agreement, made under Division 2 of Part VIB of the Act is binding upon:

* The Australian Collieries Staff Association and

* The Employees of the Company working in supervision and administration roles covered by the Staff Award.

5.1 Unless specified, this Agreement replaces in their entirety all awards and agreements applying to the parties, including: -

When an Employee accepts a Company offer of a Salary Package the following will apply:-

9.1 The value of the Salary Package will be greater than the sum of what the Employee would have received if they remained on hourly wages (with hours of work averaged over the year) and were paid under the Staff Award and the LSL Award;

9.2 The salary package will be in lieu of all payments under the Staff Award, LSL Award and overaward statutory or other employment obligations."

[30] Clause 10 provides for salaried arrangements. The Beltana Staff Agreement does not provide for specific classifications and relies on clause 4.2 for its coverage.

[31] Turning to the Salary Package Agreement:

1.1 This Offer of Employment and Salary Package Agreement is subject to the Terms and Conditions of the Beltana No.1 Mine Salaried Staff Certified Agreement 2001.

1.2 In this contract, any reference made to the Beltana No.1 Mine Salaried Staff Certified Agreement 2001 should be read and understood to include any variation or superseding Agreement to the Beltana No.1 Mine Salaried Staff Certified Agreement 2001. This is subject to the varied or superseding Agreement being certified by the Australian Industrial Relations Commission.

1.3 Under this Agreement you are employed as a salaried employee. Accordingly, the terms and conditions of this Agreement fully compensate you for fulfilling all of the requirements of your position. You agree to release the Company from any liability or obligation arising under any industry site award or agreement that would otherwise apply to your employment.

[32] Beltana relied upon the following statutory scheme to support its contention.

"(1) For the purposes of this Part, a single business is:

(a) a business, project or undertaking that is carried on by an employer; or

(ii) a body, association, office or other entity established for a public purpose by or under a law of the Commonwealth, a State or a Territory; or

(iii) any other body in which the Commonwealth, a State or a Territory has a controlling interest."

"(4) An agreement must not be made under this section if it is able to be made under section 170LL (which deals with greenfields agreements)."

(a) the single business is a new business that the employer proposes to establish, or is establishing, when the agreement is to be made; and

(b) the agreement is to be made before the employment of any of the persons who will be necessary for the normal operation of the business or part and whose employment will be subject to the agreement;

then the employer may make the agreement with one or more organisations of employees meeting the requirements of subsection (2).

(2) When the agreement is made, each organisation must be entitled to represent the industrial interests of one or more of the persons, whose employment is likely to be subject to the agreement, in relation to work that will be subject to the agreement."_

"(1) While a certified agreement is in operation:

(b) it has no effect to the extent of any inconsistency with another agreement certified before it, whose nominal expiry date has not passed."

"There is obviously significant consequences as a result of those provisions because in the context of the arguments that appear to perhaps be forthcoming on the part of the CFMEU, that is a significant provision and one which the legal position that it proffered to the company does not take any account of. ..." (PN1133)

"(1) If the application for certification states that the application is made under Division 2, the certified agreement binds:

(b) all persons whose employment is, at any time when the agreement is in operation, subject to the agreement."

[39] Beltana submitted that the wording of clause 4.2 of the certified agreement is obviously drafted with the provisions of s.170M in mind.

[40] The Commission was asked to contrast the coverage of a Division 2 agreement with the statutory requirements for a Division 3 agreement. Section 170MA states:

"If the application for certification states that the application is made under Division 3, the certified agreement binds:

(a) the employer and the one or more organisations of employees concerned; and

(b) all members of the one or more organisations of employees concerned."

[41] As such, the membership of an organisation will determine the binding nature of a Division 3 agreement.

[42] In support of its position, Beltana relied on the Federal Court decision in Quickenden v O'Connor, Commissioner of Australian Industrial Relations Commission and Others (Black CJ, French and Carr JJ) [2001] FCA 303; (2001) (184 ALR 260):

"[11] Division 6 deals with the persons bound by certified agreements. When the application for certification is made under Div 2 the agreement binds the employer and all persons whose employment is, at any time when the agreement is in operation, subject to the agreement: s170M(1). The agreement also binds any organisation of employees which has made the agreement with the employer: s170M(2)."

and in particular the decision of Carr J in which his Honour expanded on the meaning of s.170M(1) and s.170MA of the WR Act:

"[92] ... Under s170M(1) a certified agreement made under Div 2 `binds ... all persons whose employment is ... subject to the agreement'. Section 170MA provides that a certified agreemend made under Div 3 binds ... all members of the ... organisation[-] ... concerned'. As the primary judge noted, s170MA recognises that under the conciliation and arbitration power, a certified agreement cannot be said to bind a person not a member of the organisation with which the agreement is made. However, s170M provides that an agreement made between a constitutional corporation and an organisation will bind a person whose employment is subject to the agreement. Thus if an agreement provides that it applies to all relevant employees who are eligible to be members of the organisation (as the agreement so provides in this matter) then, subject to the constitutional issues, s170M operates so as to bind not only members of the organisation but also persons who are not members of the organisation. It is that provision which is at the core of the challenged provisions."

[43] Beltana submitted that s.170MA recognises that under the conciliation and arbitration power a certified agreement cannot be made to bind a person not a member of the organisation with which the agreement is made. It further submitted s.170M operates as to bind not only members, but also persons who are not members of an organisation. "The key issue that emerges from that is that it depends on how the matter is described, but it is to the employment that the relevant provision go. ..." (PN1150)

[44] Mr Dixon referred to a decision of Munro J in Rheem Australia Pty Limited v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (13.5.02) (PR917617):

"[59] It follows from those observations that the use of union membership as the criterion for identifying persons bound by a Division 2 agreement, or for that matter, the employees whose work is regulated by the agreement, is not in symmetry with the persons bound provisions of the Act in section 170M. For that reason alone, another qualification may be made about the application of the representative role of unions, and the principle in Burwood Cinema, when particularising who should be the persons bound by a section 127 order, and determining associated due process requirements. Even the Agreement in this instance cannot be read or applied to justify an automatic acceptance that membership of a union party to this proceeding should be the criterion of the persons to be directed to not engage in industrial action."

"As we understand his Honour's judgment, he is indicating that it is not a desirable approach to contemplate that a division 2 agreement is, A, to be defined by reference to union membership, and that it is preferable to concentrate on the wording of section 170M. ..." (PN1154)

[46] Beltana submitted that the interpretation of clauses 2.6 and 4.2 favoured by the CFMEU was flawed in a number of ways:

· it is "at odds with the actual provision and at odds with the Act and also at odds with the full scope and effect of the agreement as a whole" (PN1156);

· "the employee need not be employed pursuant to or bound by the staff award" (PN1157);

· "the third dot point of clause 4.2 is simply a formula for identifying the scope of the certified agreement. That is done by reference to whether the role the employee is performing is a role covered by the staff award" (PN1157). This is especially so in circumstances where the position has some expanded responsibilities. (See the Exhibit D.3, Statement of Mr Romcke).

[47] It was Beltana's position that the CFMEU argument failed to take into account a number of relevant factors, including:

· the illogicality of suggesting that the parties to the certified agreement would agree that employees to be bound are those who are bound by the award and at the same time to provide that the certified agreement replaces the award in its entirety;

· the true interpretation of clause 4.2 on its own;

· the certification process which the Commission relied upon. As part of that process clause 4.2 uses the word "role" covered by the certified agreement. Section 170M whilst referring to a certified agreement as "binding" also emphasises that it is the employment that must be subject to the agreement (PN1164). This contrasts with s.149 which is "binding on ... all members of organisations bound by the award". Section 170M makes no reference to a person bound.

[48] The CFMEU submitted that the coverage of the Beltana Staff Agreement can only apply to ACSA members since the coverage of the award is confined to ACSA members and that the definition of "Employee(s)" found at clause 2.6 of the Beltana Staff Agreement, namely:

"`Employee(s)' means employees of the Company working in supervisory and/or administration roles covered by the Staff Award."

is binding upon the employees of Beltana working in supervision and administration roles covered by the ACSA Award and is likewise confined to employees who work in supervision and administration roles, namely Supervisors and Deputies, and who are ACSA members.

[49] In other words, the CFMEU contends that the Beltana Staff Agreement is a members-only agreement in the same way as the ACSA Award is a members-only award. Other staff, or supervisory employees, including CFMEU members, are covered by the P&E Agreement.

[50] The CFMEU submitted that if the application is granted, having regard to the classifications provided for in the ACSA Award, it would have the effect "the staff agreement will apply to deputies". It would take away the requirement that those employees need to be members of ACSA to be covered by the award and thereby covered by the agreement (PN1248). It was the CFMEU's view that other supervisory classifications were not covered by the ACSA Award.

[51] The CFMEU contention on the coverage of the Beltana Staff Agreement is that the membership of ACSA/APESMA is an integral requirement for its application was grounded on a consideration of the coverage clause of the ACSA Award. Clause 3.1 of the ACSA Award states:

"The Australian Collieries' Staff Association (ACSA) and its members employed in New South Wales and Tasmania in the coal mining industry."

[52] The CFMEU relied on a number of authorities to support its contention that the ACSA Award is a members-only award. In a decision of Drummond J of the Federal Court in Australian Collieries Staff Association v Newlands Coal Pty Ltd (12.11.98) (85 IR 300 at p.301), his Honour said:

"It is clear from cl 4 that the Award binds only the respondent and the other employers named in Sch A to the Award in respect of members of the applicant Union employed by them in the coal mining industry and the applicant and its members. It is prima facie a `members only' Award, as opposed to an `all employees' Award. That this was the proper characterisation of the Award was common ground at the hearing. Most of the operative provisions of the Award are expressed to apply to employees, rather than just to employees who are also members of the applicant Union. One such provision is cl 11, dealing with the payment of wages to `the employee'. But by force of cl 4, this provision only operates to regulate the payment of wages by employers bound by the Award to employees who are members of the applicant. Employers are free from any constraint imposed by this clause on how they may pay wages to employees who are not members of the applicant. Most of the provisions of the Award, like cl 11, operate only by reference to member-employees."

[53] In the appeal from the decision of Drummond J, the Full Court (Spender, Burchett and Kiefell JJ) (21.5.99) (89 IR 184 at p.187), the Full Court said:

"It was also sought to draw from cl 27(d) of the Award that it necessarily had regard to all employees engaged on a temporary basis and that some consistent approach could be taken in cl 6. It does not seem to us however that cl 27 has regard to any employee other than a member. It provides that permanent members receive severance and retrenchment pay but members who are employed on a casual or temporary basis will not. Non-members will not in any event be entitled to the severance and retrenchment pay for the reason that the Award is a members only Award. All the references to an employee in cl 27 are, consistent with the other provisions of the Award, to be taken to refer to members. As we have said, even cl 25, which deals with preferment upon retrenchment is, unlike the provision considered in Curragh, expressly directed to the preferment of members and does not require regard to be had to the position of non-members, save for the consequence that they are not to be preferred."

[54] The CFMEU submitted that the wording in the agreement "quite clearly invokes the coverage of the award". The word "cover" is used. The wording in clause 4 of the Beltana Staff Agreement refers to "employees of the company working in supervision and administration roles `covered' by the staff award not supervision and administration roles described `in' the staff award but covered by the staff award" (PN1277).

[55] The CFMEU submitted that in construing the ordinary words of clause 4.2 of the Beltana Staff Agreement, if the word "covered" is used then the coverage clause of the ACSA Award is invoked.

[56] On this basis the CFMEU argued there is no ambiguity or uncertainty because the coverage of the Beltana Staff Agreement is coverage that defines those subject to the agreement by their membership of ACSA.

[57] The ACSA Award provides for the following classification of Deputies and Supervisors:

"Any other person whether employed in the industry of engineering or not who has been or is hereafter appointed an Officer of the Organisation and admitted as a member thereof."

"Persons who are employed in the coal or shale mining industry at or about a coal or shale mine in a supervisory, professional, administrative, clerical or technical capacity up to and including the level of responsibility of under manager in charge."

[59] Turning to the content of the P&E Agreement, the CFMEU referred to the relevant provisions of the P&E Award. The P&E Agreement includes:

"4.2 The parties to this Agreement, made under Division 2 of Part VIB of the Workplace Relations Act are:

* Beltana Highwall Mining Pty Ltd (the Company) and

* Construction Forestry Mining and Energy Union (Mining and Energy Division);

* The Employees of the Company working in roles covered by the P&E Award (the Employees)"

[60] The CFMEU relied on its rules to demonstrate that coverage. The P&E Award is not confined by the eligibility rules of the CFMEU (PN1299):

"An unlimited number of persons employed or usually employed as workers engaged in or in connection with the coal mining industry."

Employees may be engaged as full-time, casual or temporary employees. Employment for full time employees will be on a monthly basis."

The Company may require an Employee to perform any work within their skills, training, experience and knowledge, provided that it is safe and legal to perform such work. ..."

[62] The classification structure in the P&E Award provides a competency based structure and includes two classifications in clause 18.4 which refer to supervision. In clause 18.8 it also includes indicative competencies which include competencies for classifying Undermanager functions and Deputy functions for the underground mines sector.

[63] There is overlap in the coverage of Deputies for the underground sector in both the P&E Award and the ACSA Award classification structures (PN1310) which is dealt with by reference to the coverage clause, namely membership of ACSA results in coverage of the ACSA Award and other Deputies are covered by the P&E Award.

[64] It is this context which prevailed at the time the agreements were negotiated and it is the way in which employment is regulated in the industry at large.

[65] The CFMEU submitted that the interpretation of the clause contended by it would not impact on the flexibility in the operation of the mine and which the CFMEU acknowledges Beltana was trying to achieve at the time.

[66] Turning to the use of extrinsic material relied on by Beltana, the CFMEU referred to the Staff Package Agreements and argued that "they incorporate into the common law contract the staff agreement. That has no impact on the agreement as a regulatory instrument under the Workplace Relations Act" (PN1407). See the decision of the High Court (Brennan CJ, Dawson, Toohey, McHugh and Gummow JJ) in Byrne and Frew (11.10.95) (61 IR 32 at 36):

"The contract may provide additional benefits, but cannot derogate from the terms and conditions imposed by the award and, as we have said, the award operates with statutory force to secure those terms and conditions."

[67] The offer of the Staff Package Agreement sits beside the P&E Agreement (PN1417).

[68] In response to Beltana's submissions made in respect of s.170M, the CFMEU advanced the proper context in which Quickenden and Rheem should be seen. The CFMEU argued that s.170M does no more than bind those who are subject to the agreement. It does not provide a limitation on the parties to agreements to actually define who will be subject to those agreements (PN1438).

[69] The CFMEU relied on s.170MDA which states:

(a) one or more employees whose employment is not subject to the agreement request the employer to:

(i) vary the agreement so that the employment of the employees is subject to the agreement; and

(ii) seek the approval of the Commission for the variation under section 170MD; and

(b) the employment of the employees would be subject to the agreement if:

(i) they were members of an organisation of employees or of a particular organisation of employees; or

(ii) they were not members of an organisation of employees or of a particular organisation of employees; and

(c) the variation would not cause the agreement to become a multiple-business agreement;

(2) If, in accordance with the request, the employer seeks the approval of the Commission to the variation under subsection 170MD(3), the Commission must disregard paragraph 170MD(3)(a) in deciding whether to approve the variation."_

[70] Thus a non-union agreement or a union agreement is contemplated.

[71] The CFMEU distinguished ss.170M and 170MDA from s.170MA which does not use the words "subject to the agreement" (PN1445):

"So on that basis we say that the suggestion that Mr Dixon makes that, the contention that the CFMEU puts forward is somehow contrary or not - to use the words of Munro J, not in symmetry with section 170M. It should be considered in light of that provision, section 170MDA."

[72] In this matter the parties have decided which employees will be subject to the Beltana Staff Agreement as they are permitted to do under the WR Act (PN1446).

[73] Mr Sheather, on behalf of APESMA, submitted that there is no ambiguity or uncertainty in the operation of the Beltana Staff Agreement "between ourselves and the company" (PN1472). A number of agreements operate across the industry in the same way that the award applies. Mr Sheather questioned whether the classification of "Crew Supervisor" or "Step Up Technician" could be contemplated by the award classification structure. Further, there is no classification of crew supervisor.

[74] It is necessary to reiterate the task at hand for the Commission, the first step of which is to determine as a jurisdictional fact whether an arguable case exists for identifying an ambiguity or uncertainty. If that issue is identified in the affirmative the Commission is empowered to take the next step, namely to exercise its discretion to decide whether or not to remove the ambiguity or uncertainty. In doing so, it may look at the mutual intention of the parties. I agree with the CFMEU that it is not appropriate to consider the mutual intention of the parties prior to establishing the jurisdictional fact. To some extent the submissions of the parties become blurred in making this necessary distinction. I have endeavoured to confine my jurisdictional finding to the material relevant to that step. I have found it convenient to adopt the approach of Gray J which was generally relied upon as being appropriate.

[75] In his decision, Gray J of the Federal Court in Printing and Kindred Industries Union & Anor v Davies Bros Ltd (23.12.86) (18 IR 444 at p.449), said:

"Perhaps in a case such as this the safest course is to assume that an ambiguity does exist, and to see where the application of extrinsic aids to interpretation leads in the construction of the document."

[76] In my determination of the material before me, I have considered all the competing submissions, including the following:

· First, I do not agree with the CFMEU that on the ordinary words of the Beltana Staff Agreement it is clear that the agreement is a members-only agreement. The third dot point of clause 4.2 states:

"The Employees of the Company working in supervision and administration roles covered by the Staff Award."

3.1 The Australian Collieries' Staff Association (ACSA) and its members employed in New South Wales and Tasmania in the coal mining industry.

3.2 The employers listed in Schedule A to this award in respect of members of ACSA employed by them.

3.3 Any successor to the business of an employer listed in Schedule A of the award.

3.4 Any assignee or transmittee of an employer listed in Schedule A of the award.

3.5 Any corporation which has acquired or taken over the business of an employer listed in Schedule A."

Whilst it is not in contention that the ACSA Award is a members-only award, on a plain meaning of clause 4.2 of the Beltana Staff Agreement it cannot be construed that the "coverage" is drawn from clause 3 of the ACSA Award. It does not say that it applies to ACSA members.

The reliance by the CFMEU on the coverage of the ACSA Award and the P&E Award does not in itself assist the Commission in determining the scope of the Beltana Staff Agreement.

· Second, I have had regard to the submissions of both the CFMEU and APESMA that throughout the industry the coverage of similar awards and agreements co-exist without demarcation issues arising.

· Third, I have also considered the wording of clause 2.6 and clause 4.2 within the context of the Beltana Staff Agreement as a whole as urged upon me by Beltana. I am not assisted by the terms of clause 5 except to the extent that a reference to the ACSA Agreement replacing "any other award" may infer a wider coverage than the two specified awards which are also replaced, namely the ACSA Award and the LSL Award, both of which are members-only awards. However, no material was put to me to permit me to take this matter to a final conclusion.

· Fourth, in respect of the Staff Package Agreements, I adopt the reasoning of the CFMEU that the offering of these agreements has no impact on the agreement as a regulatory instrument under the WR Act. If the CFMEU is correct, and the P&E Agreement applies to its members working in supervisory roles, then the offering of Staff Package Agreements cannot displace the rights of employees under that Agreement. Reliance on the Staff Package Agreements as forming part of the regulation of staff employees to which I should have regard does not assist in determining the existence of an ambiguity or uncertainty.

· Fifth, I have given consideration to Beltana's submission that the reference to the classification in the ACSA Award is no more than a means of describing which employment is covered, unrelated to union membership, as is envisaged in s.170M. In this respect I have found guidance in Munro J's comments in Rheem where his Honour stated (PR917617) (footnotes omitted):

"[57] That point may be reinforced by a consideration of the differences which exist between the classes of persons to whom an order may be expressed to apply. I have referred to the three jurisdictional grounds for section 127 orders. Under each of them, employees may fall within significantly different categories by reference to union membership, the nature of the Division 2 agreement, or the parties and scope of a relevant industrial dispute. Employers too may be within the field of the rights/duties relationship associated with the direction of a section 127 order, or a condition imposed for the operation of the order, and therefore expressly bound.

[58] Some of those differences are sufficiently illustrated by Carr J's explanation in Quickenden v O'Connor:

`... Under s 170M(1) a certified agreement made under Div 2 `binds ... all persons whose employment is ... subject to the agreement'. Section 170MA provides that a certified agreement made under Div 3 `binds ... all members of the ... organisation[-] ... concerned'. As the primary judge noted, s 170MA recognizes that under the conciliation and arbitration power, a certified agreement cannot be said to bind a person not a member of the organisation with which the agreement is made. However, s 170M provides that an agreement made between a constitutional corporation and an organisation will bind a person whose employment is subject to the agreement. Thus if an agreement provides that it applies to all relevant employees who are eligible to be members of the organisation (as the Agreement so provides in this matter) then, subject to the constitutional issues, s 170M operates so as to bind not only members of the organisation but also persons who are not members of the organisation. It is that provision which is at the core of the challenged provisions.

Under ss 170MN(1) and (2), 170ND and 170NF an employee whose employment is `subject' to the agreement, who engages in `industrial action' against the employer, is liable to the imposition of a penalty to a limit of $2,000. The primary judge observed (and I respectfully agree with him) that ascertaining who is an employee, whose employment is subject to the agreement, would be a matter of construction of the agreement.'

[59] It follows from those observations that the use of union membership as the criterion for identifying persons bound by a Division 2 agreement, or for that matter, the employees whose work is regulated by the agreement, is not in symmetry with the persons bound provisions of the Act in section 170M. For that reason alone, another qualification may be made about the application of the representative role of unions, and the principle in Burwood Cinema, when particularising who should be the persons bound by a section 127 order, and determining associated due process requirements. Even the Agreement in this instance cannot be read or applied to justify an automatic acceptance that membership of a union party to this proceeding should be the criterion of the persons to be directed to not engage in industrial action.

[60] The Agreement binds, all persons whose employment is, at any time when the agreement is in operation, subject to the agreement. Obviously, among such persons there will be many who are not union members, not members of the unions party to this proceeding, or who do not remain union members, or members of those unions. Apart from the circumstances of this case, other species of Division 2 agreements also have peculiarities or differences that need to be taken into account. The bulk of employees under a section 170LL agreement may not be members of the sponsoring union, or of any union. Organisations of employees, usually, are not parties to or bound by section 170LK agreements. If there are named employees "party" to such agreements at all, the group is not co-extensive with that of the employees bound by such an agreement after its certification."

Section 170M(1)(b) refers to an agreement under Division 2 binding "all persons whose employment is, at any time when the agreement is in operation, subject to the agreement". In this regard I see no inconsistency with the terms of s.170MDA which requires an employer to comply with a request by "one or more employees whose employment is not subject to the agreement" to, inter alia, vary the agreement so that the employment of the employee/s is subject to the agreement.

I have had regard to the reliance placed on s.170MDA of the WR Act by the CFMEU to refute Beltana's argument that reference to "employment" in s.170M generates the criterion for identifying coverage in contrast to the use of union membership. The Explanatory Memorandum states in respect of s.170MDA:

"This amendment proposes to insert a new section 170MDA, to modify the operation of the variation provisions in section 170MD in one specific situation - to overcome discrimination in the applicability of the agreement as between union members and non-members, or as between members of particular unions.

Proposed section 170MDA provides that one or more employees may request an employer to seek variation of a certified agreement so that it applies to that employee or those employees, where, but for their membership or non membership of a union or a particular union, the agreement would apply to them." (Workplace Relations and Other Legislation Amendment Bill 1996 - Explanatory Memorandum for amendments to be moved on behalf of the Government and the Australian Democrats, October 1996 at p.36)

This explanation of the section would tend against a conclusion that an agreement would be at all times a members-only agreement where an employee(s) can seek its variation in circumstances where, but for their non-membership of that union, the agreement would apply to them.

The guidance provided by Munro J tends towards the construction of the application clause of the agreement contended for by the employer. The agreement conforms with s.170M so that the statute supports an objective intention of the coverage of the agreement.

However, the construction of s.170M in which "employment" is the criterion on which to adjudicate persons covered or subject to an agreement is not determinative in itself of the proper construction of clause 4.2 of the agreement. It lends weight to that construction and supports a finding that an arguable case exists that an ambiguity or uncertainty exists arising out of the wording of clause 2.6 and clause 4.2 of the Beltana Staff Agreement.

[77] On an objective assessment of the material before me, I find that clause 2.6 and clause 4.2 of the Beltana Staff Agreement are susceptible to one or more meanings. As such, I find that an arguable case has been made out than an ambiguity or uncertainty exists.

[78] I turn to the second step of the exercise, namely whether as an exercise of discretion I should vary the Beltana Staff Agreement to remove the ambiguity or uncertainty. In doing so I will consider the arguments put by the parties which support the "mutual intention" of the parties. If required, I will then consider whether there are any additional discretionary issues which should be weighed in the balance in my consideration of whether to vary the Beltana Staff Agreement to remove an ambiguity or uncertainty.

[79] First, Beltana asked the Commission to take into account a number of "surrounding circumstances" in forming its view. It relied on a relevant passage from Prenn v Simmonds (1971) 1 WLR 1381 at p.1385 where Lord Wilberforce said:

"[E]vidence should be restricted to evidence of the factual background known to the parties at or before the date of the contract, including evidence of the `genesis' and objectively the `aim' of the transaction."

[80] The surrounding circumstances as identified by Beltana are:

· the evidence given by Mr Romcke and Mr Pala was to the effect that increased flexibility was a specific aim with no demarcation;

· a greenfields agreement would be entered into prior to any employees being employed;

· the evidence shows no issue between the parties to the agreement as to whether the agreement would not be in conformity with s.170M, namely be binding upon persons employed only be reason of union membership.

[81] I accept these surrounding circumstances as not being in contention. Certainly the CFMEU's evidence reveals very different views held by it with respect to whether Beltana should be a greenfields site or a transfer from Bulga South, but I have ruled on the relevance of this evidence to the task at hand. The situation as outlined by Beltana is correct. There is no evidence given by ACSA to refute what is asserted by Beltana in the submission on the last dot point as to the coverage of the agreement. This of course does not answer the question of what was mutual intent. It simply states that there is no evidence of a contrary intent to that proffered by Beltana.

[82] Second, I turn to a consideration of Mr Jones' evidence in which he attested to the rationale behind the changes made to an earlier draft of the staff agreement. The earlier draft (with hand-written changes) provided the following provisions:

"2.6 `Employees' means employees of the Company working in supervisory and/or administrative areas"

This was changed to "administrative roles covered by the Staff Award".

* the Employees of the company working in supervision and administrative roles (the Employees)"

This was changed to "roles covered by the Staff Award".

"4. On or about 9 December 2000, following some further negotiations with the ACSA, I prepared a further draft of the Beltana Staff Agreement which reflected those discussions. Apart from some minor suggested changes to the draft, Mr Wilson of the ACSA informed me that the document was acceptable to the ACSA. ...

5. I also provided Mr Peter Wilson, Beltana's solicitor at that time, with a copy of the draft Beltana Staff Agreement for his review. Mr Wilson provided me with some recommendations in relation to certain changes to the draft Beltana Staff Agreement. ...

6. One of the changes that was recommended was in relation to clause 4.2 of the Beltana Staff Agreement. Mr Wilson recommended, amongst other things, that I insert the wording `covered by the Staff Award'. Mr Wilson said to me words to the effect that:

`This will give some meaning to the nature of the supervision and administration roles and will identify the type of supervisory and administrative roles that the Beltana Staff Agreement could apply to.'

7. I prepared a further draft of the Beltana Staff Agreement incorporating the recommendations and provided a copy to Mr Peter Wilson of the ACSA. Mr Wilson informed me that changes were acceptable to the ACSA."

[84] I am not able to give substantive weight to the hearsay evidence of either Mr PB Wilson, solicitor for Beltana, or Mr PC Wilson, formerly for ACSA.

[85] However, it is clear that the amendments made to the draft were agreed to by ACSA given the terms of clauses 2.6 and 4.2 which are part of the agreement which was certified. The wording of clauses 2.6 and 4.2 prior to the amendments being made lends weight to the intention of the parties being prepared to agree upon coverage which was wider than an ACSA members-only agreement. However, this is not conclusive in the absence of direct evidence of ACSA's intention of the coverage clause.

[86] Third, the parties also relied on the expressed view of parties on transcript at the time the Beltana Staff Agreement was certified before Commissioner Wilks. Beltana relied on the transcript of Mr PB Wilson, solicitor for Beltana, who submitted (Exhibit D.7):

"PN7 The certified agreement in terms of its wording it replaces the relevant awards in their entirety and it facilitates the engagement of staff in the future on salary packages that are flexible. They'll deliver remuneration and benefits to staff that are above the relevant award which is the Coal Mining Industry Supervision and Administration Award New South Wales and Tasmania and it also delivers flexibility to the company in return.

PN8 The Beltana No 1 Mine is a new business that the company is establishing and the certified agreement will apply to employees who work in positions that could be covered by the classifications that are in the Staff Award.

and, the submission of Mr PC Wilson for ACSA who submitted:

"P19 Commissioner, I certainly agree with what Mr Wilson has put to you and simply add in relation to clause 9.1 where it talks about provisions of the award on the no disadvantage test, the company has agreed that the appendix to the award incorporates the concepts of the traditional coal mining industry bonus and on the no disadvantage test over a period of time the expectations would be that the salary package would also include that component as part of the calculation in the no disadvantage test over a - albeit that there may be fluctuations and variations. On that particular basis, Commissioner, I would certainly endorse the application to you and on behalf of the Association we support it."

[87] Beltana asked the Commission to ascribe weight to the submissions in accordance with the principle enunciated by Keely J as quoted in Seymour V Stawell Timber Industries Pty Ltd (5.7.85) 13 IR 289 at p.299:

"In those circumstances, although extrinsic evidence cannot be admitted to add to or to subtract from its terms nor to vary those terms, evidence is admissible of a statement made jointly by both parties at the time of the agreement, explaining the meaning of the language used by both parties; such evidence is admissible in order to ensure that the language used is construed in such a way as to reveal `the real mind' of the parties."

[88] It was Beltana's submission that the joint statement of the parties to Commissioner Wilks is the stated intention. The "emphasis is on classifications covered, not employees covered by the award by reason of membership or whatever" (PN1513) and reinforces the proper interpretation of the Beltana Staff Agreement consistent with s.170M of the WR Act. It should be given "great weight" by the Commission in determining the intention of the parties (PN1511).

[89] ACSA in its submissions relied on a different passage of the transcript, namely a comment made by Commissioner Wilks:

"PN22 Yes, I appreciate that, Mr Wilson. There are a range of industry standards some of which are related to performance in the form of productivity, some are related to performance based on other measures. Those payments are essentially performance based payments and the Commission as presently constituted understands that and for the record I would say that once this agreement is certified what will be enforceable will be the words in the agreement and the words in the agreement I think speak for themselves."

[90] The CFMEU referred the Commission to the question 7.1 in the statutory declaration of Ms Wendy Clews for ACSA (Exhibit SH.1):

"Are the terms and conditions of employment of employees covered by the agreement regulated by relevant award(s) which:

(a) regulate any term or condition of employment of persons engaged in the same kind of work as that of employees under the agreement; and

(b) expected to be binding on the employer immediately before the initial day ..."

Coal Mining Industry (Supervision and Administration) Consent Award, 1999

Coal Mining Industry (Staff) Long Service Leave Award 1991".

"PN1352 ... There is no mention of the P&E Award which would fall within that list if the contention proffered by my learned friend were correct. There is no intention there expressed that the agreement or the terms and conditions of employment of employees covered by the agreement are regulated by anything other than the members only awards."

[92] I turn to a consideration of the transcript references relied on by Beltana. The CFMEU contended that the submission that the Beltana Staff Agreement will apply to employees who work in positions which could be covered by classifications in the ACSA Award are the same as those in the Beltana Staff Agreement where it states "Employees of the Company working in supervision and administration roles covered by the Staff Award" and thus produces an outcome whereby the agreement is a members-only agreement.

[93] I tend towards the construction given by the CFMEU that the transcript reference is not determinative of the mutual intent of the parties. The wording of Mr PB Wilson is almost identical to the wording in clause 4.2 of the Beltana Staff Agreement and it is that wording which has created the ambiguity or uncertainty. The wording is consistent with the wording of s.170M but as I have already found that is not determinative of the coverage of the Beltana Staff Agreement in the circumstances of the matter. However, it must be noted that the opposite construction was never put, namely that the coverage was to apply to ACSA members only.

[94] Before leaving this issue I should indicate that I have given consideration to whether the word "could" be covered assists the construction sought by Beltana of Mr PB Wilson's statement. However, I am of the view his verbage refers to no more than the greenfields status of the Beltana Staff Agreement.

[95] I am not assisted by the observations of Wilks C relied on by ACSA. In my view, these observations were made in the context of the no disadvantage test and are of no relevance to my task.

[96] I have also had regard to the statutory declaration filed by ACSA where in 7.1 (set out in paragraph [90] above) it sets out the awards which "regulate" the terms and conditions of employment of employees covered by the Beltana Staff Agreement. Those awards are members-only awards. No reference is made to the P&E Award.

[97] Balancing all the documentation relevant to the certification process, I am of the view there is not a clear statement of intention by the parties which enables me to give it the "great weight" sought by Beltana.

[98] Fourth, the CFMEU relied on the evidence of Mr Endacott which recounted two conversations which he had with Mr PC Wilson (formerly of ACSA) in relation to the intent of the parties in making the Beltana Staff Agreement (see Exhibit S.1 paragraphs 17 and 18).

[99] The first conversation was at an unspecified time prior to the certification of the P&E Agreement and the second conversation was on 12 May 2003.

[100] Beltana asked me to rely on the evidence of Mr Jones (paragraph [83] above) which denies the evidence given by Mr Endacott in respect to the conversations he had with Mr Wilson over the intended coverage of the Beltana Staff Agreement.

[101] Neither party sought to call or have Mr PC Wilson summoned to appear in the proceedings.

[102] I am not assisted by the hearsay nature of Mr Endacott's evidence in determining the objective intention of the parties. It provides only a subjective assessment of what Mr Wilson told Mr Endacott was his intention or understanding.

[103] As to Mr Jones' evidence, on this point I find that his intention was that the Beltana Staff Agreement would cover any employee who performed administrative or supervisory work. This intention does not, however, provide evidence of the mutual intention of the parties.

[104] Fifth, I turn to a number of issues going to discretion which are outside the scope of mutual intention of the parties but which have been relied upon by the parties. The CFMEU brought considerable evidence as to the intent of the P&E Agreement at the time it was negotiated. On the evidence I am of the view that:

· The CFMEU negotiated supervisory classifications into the P&E Agreement and believed that its member would be employed in these classifications (PN538).

· Beltana did not make it clear to the CFMEU that it intended to pick and choose which agreement it would employ supervisory staff under (PN934 and PN1052).

· Mr Endacott was aware of the existence of Staff Package Agreements in mid 2002 but he was not aware of their terms (PN521).

· Both agreements were negotiated at the same time. The ACSA Agreement was certified prior to the P&E Agreement being certified.

· The evidence of both Mr Pala and Mr Jones makes it clear that the intention of Beltana was to provide for maximum flexibility for management to operate the greenfields site. That flexibility included a deliberate decision to negotiate overlapping coverage for staff or supervisory employees in the two agreements which were negotiated at the same time (PN931-933, PN1041-1045):

"When you say "flexibility", what do you mean?---[JONES] Well, it would be up to management at the time how they - what they agreement they used. It's not different to the award, as far as I'm concerned. They're in both the staff agreement and the P&E." (PN1045)

[105] Given the context in which the P&E Agreement was negotiated it is apparent that Beltana itself, as a matter of policy, created a basis for uncertainty as to coverage and potential industrial instability. This arises because even if Beltana did not give commitments to the CFMEU that the transferred supervisory employees from Bulga would be employed under the P&E Agreement (attested to by Mr Endacott but denied by Mr Romcke) it did not explain to the CFMEU its intention with respect to the actual award regulation of those employees.

[106] Beltana asked the Commission to have regard to the ultimate motive of the CFMEU in raising the issue of the Beltana Staff Agreement in the context of negotiations for a new P&E Agreement with subsequent rights afforded the CFMEU under the WR Act. Those rights would be impacted upon for staff employees who are CFMEU members if they were not covered by the terms of the P&E expired agreement. I do not agree with Beltana that the CFMEU was opportunistic. Rather it was conducting itself in a robust industrial relations environment which has in part been generated by the effect of the overlapping coverage of the two agreements. If Beltana is submitting that the CFMEU's motive is "self serving" in the sense outlined by Williams SDP in Higgins v Construction, Forestry, Mining and Energy Union (2.5.01) (PR903843):

"[7] ... In my view, it is not enough that there are or may be rival contentions as to the proper construction of the terms of an award or agreement. Nor is it enough that claims may have been made in the field for the application of a particular provision in circumstances and its applicability of the provision is disputed. Such contentions and claims may well be self serving. ..."

[107] Both Beltana and the CFMEU asked the Commission to take into account the practical effect of either doing nothing or of removing the ambiguity or uncertainty in the manner sought by Beltana:

"At the same time, given the context of the regulation at the mine, it would render the deputy provisions in the P&E award nugatory. They will have no work to do if all deputies are covered by the staff agreement by operation of section 170LY(1), and we agree with Mr Dixon on this, because the P&E agreement was certified after the staff agreement and it has a shorter term than the staff agreement. In granting the application your Honour may as well take a red pen to the P&E agreement as well."(PN1314)

[108] The CFMEU also stressed the consequences for CFMEU members who would be covered by the Beltana Staff Agreement taking protected industrial action who would lose the immunity conferred by s.170MI of the WR Act.

"As we understood a submission, your Honour, it was said at one point that your Honour, if your Honour comes to exercise the discretion, should weigh in favour of doing nothing, even though an ambiguity or uncertainty is established. In our respectful submission that would be most undesirable and would leave a large number of employees who are not members of the ACSA/APESMA in a most precarious situation, whereas the persons who sign these contracts of employment in respect of which the CFMEU now expresses an interest, they have at all times understood because the contracts have expressly provided for the basis upon which they were entering into these arrangements." (PN1506)

[110] I have given careful consideration to all the material in this matter and examined in the decision the issues which focus my attention on the stepped approach which the Commission undertakes to objectively ascertain the intention of the parties. I have considered other issues going to discretion.

[111] I have formed the view that the evidence does not disclose the mutual intention of the parties which would allow me to exercise my discretion. It clearly discloses the intention of Beltana but this not the test which I am required to apply.

[112] In this regard I have not been assisted by the failure of APESMA to give any direct evidence, particularly when the hearsay evidence given by the CFMEU before me is contradicted by the evidence of Beltana.

[113] I have weighed in the balance other discretionary matters, particularly the effect on employees covered by the Beltana Staff Agreement and the P&E Agreement respectively. The right to take or not take protected industrial action by P&E employees covered by supervisory classifications is not a factor to which I give considerable weight in an application under s.170MD(6). The circumstances with respect to the standing of CFMEU members in supervisory positions has produced uncertainty which has been generated by the decision of Beltana to negotiate overlapping coverage for two separate agreements in order to maximise its flexibility. The unclear status of those employees with respect to s.170MT of the WR Act is not a factor which persuades me to exercise my discretion in favour of the granting of the application in circumstances where the mutual intention of the parties cannot be established beyond question.

[114] In all the circumstances of this matter I have decided to dismiss the application.

Mr H Dixon SC for Beltana Highwall Mining Pty Ltd

Mr J Sheather for The Association of Professional Engineers, Scientists and Managers, Australia

Mr T Slevin of counsel appeared for the Construction, Forestry, Mining and Energy Union (intervening)

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