Fair Work Act 2009

s.217 - Enterprise agreement

BROCKMAN ENGINEERING PTY LTD WORKSHOP & SITE COLLECTIVE BARGAINING AGREEMENT 2021

Application for variation of the BROCKMAN ENGINEERING PTY LTD Workshop & Site Collective Bargaining Agreement 2021.

• [1] An application has been made by Brockman Engineering Pty Ltd (applicant) under s 217 of the Fair Work Act 2009 (Cth) (Act) to vary the BROCKMAN ENGINEERING PTY LTD Workshop & Site Collective Bargaining Agreement 2021[1] (Agreement) to remove an ambiguity or uncertainty.

• [2] For the reasons that follow, I consider that the relevant provision of the Agreement is ambiguous and uncertain. I have determined that I should exercise my discretion to remove the ambiguity and uncertainty by varying the Agreement in the terms of the Order[2] issued with this decision.

• [3] The Agreement was approved by the Commission on 22 November 2021.[3] It covers and applies to the "Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union" known as the Australian Manufacturing Workers' Union (AMWU), the Australian Workers' Union (AWU) and the Construction, Forestry, Mining and Energy Union (CFMMEU).

• [4] The application proposes a variation to clause 15.1 of the Agreement which deals with the extension of the period of a casual employee's employment. The application is supported by the AMWU, AWU and the CFMMEU.

• [5] The parties filed joint submissions in support of the application.[4] In the circumstances and with the consent of the parties, I have decided to deal with the application on the papers without conducting a hearing.

• [6] As a preliminary matter, the proposed variation to clause 15.1 of the Agreement as set out in the originating application contained an error whereby certain words were not struck out as intended. The error was raised in correspondence to my Chambers from the AMWU[5] and the joint submissions seek that the application be amended. It is apparent that the error is administrative in nature. In the circumstances, the application is amended pursuant to s 586 of the Act in the manner proposed by the AMWU.

• [7] Clause 15.1 of the Agreement is in the following terms:

15.1 The parties confirm their commitment to maintaining a high level of full-time employment and to limit engagement of employees on a casual basis. Whilst it is not expected that a casual would be employed for longer than five months, if this does occur the company will reach agreement with its employee representatives to extend the period by one month.

• [8] The applicant seeks that clause 15.1 be varied by deleting "its employee representatives" and inserting "the employee" in its place, such that clause 15.1 would read as follows:

15.1 The parties confirm their commitment to maintaining a high level of full-time employment and to limit engagement of employees on a casual basis. Whilst it is not expected that a casual would be employed for longer than five months, if this does occur the company will reach agreement with the employee to extend the period by one month.

• [9] It is contended that in the absence of the variation, clause 15.1 of the Agreement is ambiguous, or uncertain, or both. The ambiguity or uncertainty is said to arise on the basis that it is unclear who comprises "its employee representatives." It is submitted that it may refer to any one of the following persons:

(a) the relevant casual employee (if a representative has not been appointed);

(b) a representative appointed by the casual employee;

(c) an elected/appointed representative of an unspecified group of employees;

(d) an elected/appointed representative of a specified group of employees (although it is unclear how that group is specified);

(e) two or more elected/appointed representatives of an unspecified group of employees;

(f) two or more elected/appointed representatives of a specified group of employees (although it is unclear how that group is specified);

(g) the elected/appointed representatives who represent all of the employees to whom the Agreement applies (and this body of representatives must unanimously decide to reach agreement under clause 15.1); and/or

(h) the elected/appointed representatives who collectively represent all of the employees to whom the Agreement applies (and a majority of this body of representatives must decide to reach agreement under clause 15.1).

• [10] It is further submitted that the Agreement is ambiguous when read as a whole. Clause 9 deals with employees' right to representation and the concomitant duty on the applicant to recognise employee representatives. In clause 9.1, employee representatives must be "duly elected/appointed." That condition is not present in clause 15.1. From this, it is said clause 9.1 enables the election by an employee of representation through a democratic process or by appointment, but clause 15.1 imposes on the employee a requirement for representation.

• [11] The Australian Building and Construction Commission (ABCC) has advised the applicant that it views clause 15.1 of the Agreement as a mandate for representation (independent of choice) in contravention of ss 11(1)(c) or 13(1)(a)(ii) of the Code for the Tendering and Performance of Building Work 2016 (Code). While it is acknowledged that compliance with the Code is not an issue that enlivens the Commission's discretion under s 217, it is submitted that the parties mutually intended that the Agreement at all times complied with the Code and s 34 of the Building and Construction Industry (Improving Productivity) Act 2016 (Cth). This intention is said to be evidenced by the content of the dispute settlement procedure at clause 17.3 of the Agreement, which provides that any Commission decision "must be consistent with the Code..."[6]

• [12] By s 217 of the Act, the Commission may vary an enterprise agreement. Section 217(1) provides that the Commission "may vary an enterprise agreement to remove an ambiguity or uncertainty..." The existence of an ambiguity or uncertainty has been described as "a necessary statutory prerequisite to any variation being made."[7] The Commission may exercise its power only on application by certain persons, including the employer covered by the Agreement.

• [13] The Commission's consideration of an application under s 217 involves two steps. The Commission must first identify whether there is an uncertainty or ambiguity in the Agreement, which is a jurisdictional pre-requisite to the exercise of discretion to vary the instrument. Secondly, if an ambiguity or uncertainty is identified, the Commission should consider whether to exercise its discretion to vary the Agreement.[8] As to the first step, while there is some relationship between the terms ambiguity and uncertainty they are not synonyms.[9] Both uncertainty and ambiguity may exist where a provision is capable of more than one construction. However, the mere existence of rival contentions is not a sufficient basis to conclude that there is ambiguity or uncertainty.[10] There may be uncertainty in an enterprise agreement even when its terms are not ambiguous. The uncertainty may arise from the application of the unambiguous terms to a given set of circumstances.[11] Further, "an" uncertainty in s 217 may be uncertainty of the enterprise agreement as a whole.[12]

• [14] The process of identifying ambiguity or uncertainty involves making an objective assessment of the relevant provision. As to that objective consideration, the Full Federal Court rejected the proposition that an examination of context and extrinsic material was not permissible until an ambiguity or uncertainty was first found to exist:

"In that objective consideration, an assessment of the matters relied upon for the competing contentions will be important, including evidence that the parties to the agreement had a common understanding as to the meaning of the terms they used in their agreement. A reading of the enterprise agreement as a whole may indicate ambiguity or uncertainty in one or more of its clauses. And, as was noted by the Full Bench in Tenix, "the [FWC] 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", at [31]."[13]

• [15] If an ambiguity or an uncertainty is identified, the Commission must consider whether to exercise its discretion to vary the Agreement to remove such ambiguity or uncertainty. This is distinct from giving effect to a new and substantive change not present when the enterprise agreement was made.[14] In exercising its discretion, the Commission is to have regard to the mutual intention of the parties at the time the Agreement was made.[15]

• [16] The applicant is the employer covered by the Agreement and therefore has standing to make the application.[16]

• [17] Clause 15.1 of the Agreement concerns the use of casual labour. It provides that if a casual employee is employed for longer than five months "the company will reach agreement with its employee representatives to extend the period by one month." Clause 9 of the Agreement deals with employee representatives. By clause 9.1, the applicant is to recognise an undefined number of "duly elected/appointed employee representatives."

• [18] As a matter of language, the possessive determiner "its" in clause 15.1 indicates that the "employee representatives" are those of the "company," being any employee representative duly appointed under clause 9. In light of this, the use of the plural "representatives" leaves open the question of how many employee representatives are required to "reach agreement" under clause 15.1. On one reading, it is arguable that clause 15.1 requires two or more employee representatives to "reach agreement." It is perhaps more plausible observing the objective language used, and certainly no less arguable, that clause 15.1 requires all employee representatives to "reach agreement." On the material before me, it is not clear how many employee representatives are appointed under the Agreement, but three unions are covered by it.

• [19] Alternatively, as the clause deals with a casual employee's extension of employment, it is arguable that "employee representatives" means that specific employee's "representative."

• [20] It is therefore arguable that the term "its employee representatives" in this context may refer to any one of the following:

(a) an employee representative appointed by the casual employee; or

(b) any two or more, or all of the employee representatives duly elected or appointed under the Agreement.

• [21] On the basis of the multiple arguable interpretations of the words "the company will reach agreement with its employee representatives" in clause 15.1, I am satisfied that both an ambiguity and an uncertainty exist, and this engages s 217 of the Act.

• [22] I am also satisfied that clause 15.1 gives rise to an uncertainty of a different kind.

• [23] It is apparent that the intention of the Agreement and the parties bound by it is to comply with the Code. So much is clear from the joint submissions which assert that it "it was clearly the intention of the parties when the Agreement was made that it should at all times comply with the [Code]" and "[c]ompliance with the Code is a serious issue for the Applicant's business."[17] Further, clause 17.3 of the Agreement states:

"Any decision made by the Fair Work Commission must be consistent with the Code for the Tendering and Performance of Building Work 2016"

• [24] The ABCC advises that the Agreement is not compliant with the Code because it mandates employee representation independent of choice. I accept that it is arguable that clause 15.1 is not compliant with the Code for the reason identified by the ABCC. As it is not clear whether the Agreement is compliant with the Code, this gives rise to an uncertainty as to the application of the Agreement.

• [25] The ambiguity and uncertainty identified can be resolved by substituting the term "the employee" in place of "its employee representatives" in clause 15.1 of the Agreement. I am satisfied that such a variation will not constrain an employee's right to be represented pursuant to clause 9. Further, the proposed variation is agreed between the parties to the Agreement and would not give effect to a new and substantive change that was not inherent to the Agreement when it was made, noting the expressed intention for Code compliance.

• [26] Having regard to these matters, I am satisfied that it is appropriate to exercise my discretion to vary clause 15.1 in the manner sought. For the reasons given, the Agreement as approved on 22 November 2021 is to be varied in the terms of the Order[18] issued with this decision. The variation will operate from 2 March 2022.

[2] PR738940

[3] [2021] FWCA 6791

[4] Outline of submissions dated 22 February 2022 (Submissions)

[5] Correspondence from the AMWU to Chambers dated 16 February 2022

[7] CoInvest Ltd v Visionstream Pty Ltd (2004) 134 IR 43 at [46]

[8] See Re Tenix Defence Systems Pty Limited Certified Agreement 2001-2004 (PR917548) (Tenix) at [28], [32] and [35]

[9] Bianco Walling Pty Ltd v Construction, Forestry, Maritime, Mining and Energy Union [2020] FCAFC 50; 275 FCR 385; 294 IR 458 (Bianco Walling) at [73]-[83]

[10] Re Civil Construction Corporation Enterprise Agreement (PR939346); SJ Higgins Pty Ltd and Ors v CFMEU (PR903843); Re CFMEU Appeal (Print R2431); Application by Bradnam's Windows and Doors Pty Ltd [2019] FWCA 979 at [11]

[14] Construction, Forestry, Mining and Energy Union v Linfox Transport (Aust) Pty Ltd (unreported, Print Q2603, 30 June 1998) at [12]

[15] Tenix at [32] citing Re: Victorian Public Transport Enterprise Agreement 1994, (Print M2454) at [4] and Re: CFMEU Appeal (Print R2431) at [13]

[18] PR738940

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