CFMEU Northern Mining and NSW Energy District v Sunset Power International Pty Ltd trading as Delta Electricity

Issues for determination

1. The parties were directed to confer with the view to agreeing on the precise questions for determination by the Commission. The parties were unable to reach agreement. Accordingly, the Commission subsequently considered both proposals and ultimately ruled in favour of the questions posed by the CFMEU as notifier: 1. Is the loading of 37.7% paid each pay week to Production Operators in Annexure A in accordance with clause 6.1 of the Vales Point production operators Total Salary Package (TSP) Agreement 2015 to be reduced to a lesser percentage payment in a pay week where a public holiday falls when the production operator is normally rostered to work the public holiday and when not required to attend their normal rostered shift. 2. Is the loading of 37.7% paid each pay week to Production Operators in Annexure A in accordance with clause 6.1 of the Vales Point production operators Total Salary Package (TSP) Agreement 2015 to be reduced to a lesser percentage payment in a pay week where a public holiday falls when the production operator is normally rostered to work the public holiday and when unable to attend due to reason of personal leave. (emphasis added)
2. The Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia, Electrical and Energy Division, NSW Divisional Branch (the CEPU) sought and was granted leave to intervene in proceedings.

Agreement provisions

1. At the outset, it is contextually useful to set out the relevant terms of the Agreement which are in particular focus in these disputes:
2. Clause 11.23 of the Delta Electricity Employees Enterprise Agreement 2011 and the Delta Electricity Employees Enterprise Agreement 2015 are identical: 11.23 Not Required to Work on a Public Holiday Shift workers when, according to their controlling officer, are not required for work on a public holiday for a shift for which they are normally rostered, must observe the holiday. However, they must be told at least 96 hours before the shift begins that they are not required. They must be paid for all ordinary time not worked in respect of the public holiday at the rate of single time. (emphasis added)
3. Similarly, Clause 19.7 of the 2011 and 2015 agreements are also identical: 19.7 Personal Leave during Public Holiday If the period during which an employee takes paid personal/carer's leave includes a day or part-day that is a public holiday in the place where the employee is based for work purposes, the employee is taken not to be on paid personal/carer's leave on that public holiday. (emphasis added)
4. The TSP agreement deals with the observation of public holidays as follows: 11.0 Accrual of Public Holidays 11.1 … 11.2 Production Operators rostered to the Support team, will observe public holidays when rostered on to Afternoon and Night Shifts on the day of the public holiday in accordance with Clause 11.23 of the Delta Electricity Employees Enterprise Agreement 2015. 11.3 Production Operators rostered to the Day team, will observe the public holiday when rostered on the day of the public holiday in accordance with Clause 11.23 of the Delta Electricity Employees Enterprise Agreement 2015. 11.4 The following teams will observe the Public Holiday when it falls (refer to Delta Electricity Employees Enterprise Agreement 2015 Clause 11.23): • Support Team when on afternoon and night shifts • Day Team

The Legislative Framework

1. Section 146B of the Industrial Relations Act 1996 confers jurisdiction on the Commission to determine the industrial disputes subject to arbitration: 146B Commission may exercise certain dispute resolution functions under federal enterprise agreements (1) A person may apply to the Commission to have a dispute resolution process conducted by the Commission in relation to a matter or matters in dispute if: (a) The parties to the dispute are bound by a federal enterprise agreement, and (b) the Commission is authorised or permitted to conduct the dispute resolution process under procedures set out in the agreement. (2) On any such application, the Commission has and may exercise such functions with respect to the resolution of the dispute as are conferred or imposed on it by or under: (a) The federal enterprise agreement concerned, and (b) The federal Act. (3) The Commission is to be constituted by a single member of the Commission unless the federal enterprise agreement or federal Act (as the case may be) requires otherwise. (4) Subject to subsection (5), the exercise of a function conferred or imposed on the Commission as referred to in subsection (2) is, for the purposes of any other provision of this Act, taken not to have been exercised under this Act. (5) The regulations may make provision for or with respect to the application of the provisions of this Act (with such modifications, if any, as may be prescribed by the regulations) to the exercise of functions conferred or imposed on the Commission as referred to in subsection (2). (6) The functions that the Commission is authorised or permitted to exercise as referred to in this section are in addition to, and do not derogate from, any other function of the Commission. (7) Nothing in this section makes any order, determination or other decision of the Commission in respect of the dispute binding on other parties to the dispute unless the federal enterprise agreement concerned or federal Act operate to make it binding on the parties. (8) In this section: federal Act means the Fair Work Act 2009 of the Commonwealth. federal enterprise agreement means: (a) an enterprise agreement, or (b) a preserved State agreement (but only if the nominal term of the agreement has not yet expired), within the meaning of the federal Act (and includes any workplace agreement within the meaning of the former Workplace Relations Act 1996 of the Commonwealth that continues in force under the law of the Commonwealth). Modification includes addition, exception, omission or substitution.

Evidence

1. As a general proposition, much of the evidence put by both the Unions and Delta set out an historical account of the annualised salary arrangements and the TSP in support of, or in opposition to, the Union interpretation.
2. I have considered that evidence in determining this matter. The Union evidence sought to rely upon long standing custom and practice and emphasised that the purpose of the TSP was to provide a constant and predictable income. Delta sought to distinguish the 2015 enterprise and TSP agreements from previous agreements, drawing upon the rescission provisions and the new provisions related to observing public holidays. That said, I do not propose to summarise the evidence-in-chief or the cross-examination in detail.
3. No issues concerning credit arose.

Mr John Brand

1. Mr Brand commenced employment with the then Electricity Commission of New South Wales in 1980. The following documents were attached to his statement: JB-1 2015 Enterprise Agreement JB-2 Annualised Salary for Power Production Operators (Exhibit M) JB-3 Production Central Coast Total Salary Package Main Plaint Operators (2002) JB-4 Production Central Coast Total Salary Package V2 Operators (2010) JB-5 "Points of Clarification" Exhibit 18, 12 August 1991 JB-6 Payslip for week ending 12 June 2015 JB-7 Payslip for week ending 19 June 2015 JB-8 Payslip for week ending 26 June 2015
2. Mr Brand referred to Annexures JB-2, JB-3 and JB-4 and stated the purpose of the annualised salary adopted in 1991 was to provide operators with "a constant and predictable income". The current annualised salary arrangements were set out in the Vales Point Production Operators Total Salary Package (TSP) Agreement 2015 and attached to the 2015 enterprise agreement.
3. The TSP payment is an amount equal to 37.7% of the operator's salary point. Mr Brand stated his TSP at salary point 34 was $972.71 paid weekly and recorded under code 940 on his payslip.
4. In or around 1991, the then operating agreement did not provide for TSP to be applied to sick leave, together with long service leave, workers compensation and superannuation. More recently the TSP agreements have only excluded long service leave payments as provided and explained by Annexure JB-5.
5. Mr Brand maintained that he had been in receipt of 37.7% TSP payment since his appointment as an operator. However, following approved sick leave on Monday, 8 June 2015, Mr Brand subsequently received a TSP payment of 24.77% for that particular week. Delta treated Mr Brand's sick leave absence on 8 June 2015, the Queen's Birthday public holiday as a public holiday and not sick leave. He considered Delta had made a unilateral decision to treat his sick day as a public holiday and reduce his normal TSP payment without his consent.
6. Mr Brand contended that the initial TSP related penalties had been calculated in the 42.2 to 43.3% range with agreement at 37.7% ultimately being reached as a compromise.
7. In a further statement, Mr Brand acknowledged that revised or replacement TSP agreements that had been applied over the years had contained an "applications clause" which essentially "replaces and rescinds the previous agreement". However, he did not believe the new agreements had changed the nature of the TSP.
8. In relation to the 2015 TSP agreement, Mr Brand contended there was no ambiguity concerning how the TSP payment would be made.
9. The 2015 TSP agreement provided for a new roster system where a category of employees would not be required to work a public holiday. However, there was no mention during the negotiations at the time that the TSP would be reduced in a week where the public holiday was observed by an operator, rather than worked.
10. In cross-examination, Mr Brand agreed the working of overtime or the taking of non-TSP long service leave, could alter his overall income per pay period. He further agreed his annual income had fluctuated by approximately $29,000 between 2013/14 and 2014/15.
11. Mr Brand agreed that sick leave was specifically excluded from the 1991 TSP agreement.
12. Mr Brand agreed that the 37.7% TSP rate as set out in JB-4 was paid for:

• time worked
• all leave (see clause 7 re Long Service Leave)
• 'H' days
• training
• secondments
• workers compensation accident make-up

1. Mr Brand agreed with the proposition that if an employee took a bank of non-TSP long service leave and in the week the employee returned to work, long service leave covered two days' shifts of that week, those shifts would not attract the TSP rate.
2. With reference to Annexure JB-7, Mr Brand agreed that in the week ending 13 June 2015 the pay docket showed that he had received a TSP payment of $948.99. In relation to Annexure JB-8, he also agreed the pay docket for the week ending 20 June 2015 showed a TSP payment of $623.32 and recorded 12 hours sick leave taken on 8 June 2015.
3. Mr Brand contended that while he was aware that the Act had changed the way "sick leave was treated on a public holiday", he had not "experienced any reduction in pay for having taken sick leave on a public holiday" until he received his pay docket on 20 June 2015.
4. Mr Brand explained that he was aware that another operator, Mr Neil Bennett, had lodged a dispute avoidance procedure notification (DAP) in 2014. He was not aware of, nor had he seen Delta's response set out under Annexure DM-3 of Mr Morris' statement: Neil, I refer to your Grievance and Dispute Notification dated 25 February 2014. Section 98 of the Fair Work Act 2009 prescribes that where an employee who takes paid carer's/personal leave (i.e. sick leave) on a day that is a public holiday in the place where the employee is based, the employer is taken not to have been on paid carer's/personal leave on that day (i.e. the public holiday is observed). Delta therefore has a legal obligation to ensure that an employee who is sick on a public holiday is not placed on sick leave (personal carer's leave) on that day. The public holiday is considered to be observed. Clause 22 of the Delta Electricity Enterprise Agreement 2011 prescribes for days that are to be observed as Public Holidays. Specifically, clause 22.2 provides that 'Picnic Day' is observed as a public holiday in addition to those provided in the NES (National Employment Standards). As Monday, 25 November 2013 was a public holiday as defined by the Delta Electricity Enterprise Agreement 2011 and given the effect of section 98 of the Fair Work Act 2009, Delta cannot pay you personal/carer's leave for that day. Section 6 of the Production Central Coast Total Salary package agreement specifies when the TSP loading is paid; Time worked, all leave, 'H' days, training, secondments and workers compensation make-up. It does not provide for the TSP loading to be paid on Public Holidays (when observed and paid as a public holiday). Delta therefore has acted within the provisions of the Fair Work Act 2009, Delta Electricity Enterprise Agreement 2011 and the Production Central Coast Total Salary Package Agreement.
5. Mr Brand stated he was not Mr Bennett's shift delegate. However, he was aware Mr Bennett and another employee, Mr Steve Collins were required to return "money to payroll". He said Mr Collins had subsequently refused that request.
6. Mr Brand could not recall the DAP lodged by Mr Michael Locklee on 15 October 2014 concerning non-payment of TSP for sick leave that fell on a public holiday set out under Annexure DM-5 of Mr Morris' statement.

Mr Lee Taylor

1. The thrust of Mr Taylor's evidence was directed to pay periods for the weeks ending 25 March 2015 and 4 December 2015 where he received a TSP payment of less than 37.7% on account of "a Picnic Day and a Public Holiday fell due within the operation of clause 22, "Public Holidays and Picnic Days" of the 2015 enterprise agreement".
2. Mr Taylor contended that he was entitled to the full 37.7% TSP for a picnic or public holiday when observed and Delta had paid him a reduced payment contrary to the enterprise and TSP agreements.
3. Mr Taylor agreed with the proposition that clause 6.1 of the TSP agreement did not state the 37.7% payment was required to be paid weekly. He further agreed the TSP rate is paid for time worked, all leave (except long service leave), "H" days, training, secondments and workers compensation accident make up.

Mr Mark Sloane

1. Mr Sloane referred to the history of the TSP arrangement and contended its purpose was "to provide a constant and predictable income".
2. Mr Sloane referred to paragraphs 28-30 of Mr David Treherne's statement: 28. The TSP was clearly negotiated and expressed to be a "consolidation of various Enterprise Agreement shift work provisions to a percentage and paid for defined purposes" and is applied to the "production operator's salary point". It expressly includes within the set percentages "public holiday penalties" and other Delta Agreement entitlements in order to provide Delta the capacity to full flexible utilisation of the operating employees while providing those employees with a constant and predictable income. 29. The key concepts to supporting the argument of the CEPU and as agreed in forming the TSP agreement are the "consolidation" of EBA entitlements and the provision to employees of "a constant and predictable income". The TSP Agreement clearly reinforces this intention provides for the TSP to continue to be paid as loading of the 37.7% in lieu of the specified conditions for the duration of the agreement except in very limited, specific and clearly defined circumstances Delta can cease to pay the fixed the 37.7%. which he contended concerned comments expressed by him during a mass meeting of operators and the Bargaining Committee on 2 February 2015.
3. Mr Sloane contended that during the course of the Bargaining Committee meeting, Mr Morris, the site manager, agreed with the proposition that "If I am on the Support Roster and working less weekends, less night shifts and less public holidays", an employee would still be paid a 37.7% TSP. A similar response was given with respect to Core and Day Shift operators.
4. In cross examination, Mr Sloane confirmed he was a Union delegate, a member of the CFMEU Committee of Management. He was also aware of the composition of the 37.7% TSP payment.
5. Mr Sloane acknowledged that he was aware of Mr Bennett's 2015 DAP dispute but was not involved with it. Similarly, whilst aware of Mr Lockley's DAP, he did not personally become involved.
6. During the course of the 2015 enterprise agreement negotiations, Mr Sloane contended he had raised the issues concerning Mr Bennett's DAP and whilst he held some reservations, "I feel we're covered by our documentation": I actually said to the Union: "I don't see a need". I said "I just wanted to take Delta on about it", and it took a while to get it, because the Union is so busy, and now actually finally got to it.
7. In re-examination, Mr Sloane agreed with the proposition that there was no agreement at all in place that would allow Delta to reduce the TSP rate for a public holiday.

Mr David Treherne

1. Mr Treherne commenced employment with Elcom in 1982 as an apprentice. Mr Treherne was a Workplace Consultative Committee (WCC) representative for F Shift 2010 - 2015. Currently, he is a WCC representative for Support Team 2.
2. Mr Treherne was a nominated bargaining agent for the 2015 enterprise agreement. He also participated in the 2015 TSP and Productions Operator Skills Development Model (POSDM) negotiations prior to their incorporation into the enterprise agreement.
3. Mr Treherne contended that operators and Delta had reached an "in principle" agreement concerning the TSP on or around 11 December 2014. A copy of that agreement was annexed to his statement (DT-3). On or about that time, Delta provided Mr Treherne with a copy of a power point slide presentation concerning a restructure - Annexure DT-4 to his statement. He said Delta had explained that he would "be required to observe public holidays falling on my ordinary working hours". However, Delta had failed to explain that the TSP payment would be altered or not paid where employees observe a public holiday when not rostered to work on that day.
4. In January 2015, meetings were convened to discuss the in-principle agreement. Also at that time and following a period of uncertainty expressed by operators concerning the TSP, Mr Treherne wrote to Delta stating, "I believed I had pre-existing agreements which preserved my rights to the TSP payment of 37.7%.
5. On 8 January 2015, Mr David Morris, Production Manager sent an email reply to Mr Treherne and a number of other operators concerning the "in-principle" agreement put to operators in December 2014 in an endeavour to break a stalemate concerning Delta's proposals to renegotiate the TSP - Annexure DT-5 to his statement: That correspondence noted that "finalisation of the in- principle agreement wss now unachievable". It also stated: The in-principle agreement was in settlement of the dispute and gave, amongst other things, existing Production Operators guarantees around TSP payments for a 4 year protection period.
6. Mr Treherne maintained that during negotiations for the 2015 enterprise and TSP agreements, Delta did not "discuss the issue of a reduction of TSP for observing public holidays". The TSP was designed to provide a constant and predictable income. Moreover, Mr Treherne considered the position of Delta was that "the 37.7% TSP was guaranteed for named employees until 2019".
7. On or around 12 January 2015, a WCC meeting was held prior to a bargaining committee meeting. During that meeting, Mr Treherne contended he put to Mr Morris and Mr Stephen Gurney, Company Secretary, words to the effect: … So Dave, I am on the Support Group and will not be working as many Week Ends and Public Holidays or Night Shifts, will I still earn the same amount? Mr Morris' reply was, "Yes, for the term of the EA and TSP Agreements". Mr Gurney then replied, "After this you will have to negotiate with hopefully the new employer".
8. Mr Treherne contended Mr Morris had confirmed the 37.7% TSP would remain despite him working less weekends and public holidays under the revised roster arrangements. Accordingly, it was his evidence that he would have remembered any discussion or advice that his TSP was at risk. He also sought to rely on the "in-principle agreement".
9. Mr Treherne stated that in the pay week ending 9 October 2015, he did not receive the TSP payment for the 5 October Labour Day public holiday. He was not rostered to work on that day. A copy of the relevant payslip was set out under Annexure DT-7. Mr Treherne noted that during the pay week ending 9 October, he had continued to receive payment for specific power station and high voltage allowances.
10. Mr Treherne subsequently filed a DAP and on 6 November 2015, Mr Morris replied by email. Mr Morris "suggested that clause 11.23 of the Delta Agreement and clauses 11.2 and 11.4 of the TSP Agreement meant I was no longer eligible for the TSP allowance". Subsequent representations to Delta and supported by the Union were unsuccessful.
11. Mr Treherne contended the provisions of s 116 of the Act were not raised nor were they explained either during negotiations or prior to voting up the agreement. He further maintained that the TSP was not a daily payment and Delta's deduction for the 5 October 2015 public holiday was not authorised.
12. In a further statement, Mr Treherne sought to challenge the evidence of Mr Morris filed in these proceedings. Relevantly, Mr Treherne contended:

• The provisions of 11.23 of the EBA or 11.2, 11.3, 11.4 of the TSP agreement in no way refer to or expressly provide for the non-payment of the amounts required to be paid as a total salary package under the Delta Agreement and the TSP Agreement. They relate only to the ability to accrue public holidays or otherwise be required to observe a public holiday they would otherwise be rostered to work. There were no discussions concerning the reduction of TSP whatsoever.
• He agreed that his total salary package loading of 37.7% incorporates a "factor" for public holidays in accordance with clause 4.3 of the TSP agreement in exchange for the flexibility required under clause 5.1 and this was not able to be deducted or "broken out" of the total salary package under the agreement.
• He refuted the suggestion that payment of the TSP on public holidays "amounts to a double payment". Rather, it would be payment of the total salary package in accordance with the TSP agreement.

Mr David Morris

1. Mr Morris is Delta's Executive Manager Production. He commenced work with Delta in 1987 as an apprentice electrician. Prior to his current position, Mr Morris worked in a number of roles including electrical fitter, production officer, power plant operator, shift manager and production manager.
2. Mr Morris was a management representative on the 2015 enterprise agreement bargaining committee for the 2015 enterprise and TSP agreement negotiations. He contended that he had personal knowledge concerning the nature and substance of those negotiations.
3. It was Mr Morris' evidence that the 2015 TSP agreement "specifically rescinds and replaces all the previous agreements" referred to by Mr Brand in his evidence, including previous annualised salary and TSP agreements. The rescission clause was inserted into the 2015 TSP agreement so as to avoid any ambiguity concerning the operation of the new agreement and previous agreements, primarily because: The new TSP agreement contained different provisions for TSP from those in the former agreements such as clauses 11.2, 11.3 and 11.4 relating to observing Public Holidays for Support and Day Teams.
4. Clauses 11.2, 11.3 and 11.4 of the TSP agreement were specifically referred back to clause 11.23 of the enterprise agreement which relates to observing a public holiday and the payment for that day at single time.
5. Mr Morris agreed Mr Brand was initially paid a TSP loading on sick leave taken on 8 June 2015. However, it was paid in error and was subsequently corrected.
6. Clause 11.23 of the TSP agreement was identical "to the same provision" in the Delta Electricity Employees Enterprise Agreement 2011.
7. With reference to Mr Treherne's statement concerning the "in-principle agreement" set out in Annexure DT-3, Mr Morris stated the CEPU's then organiser, Mr Russell Wilson had specifically "rejected the document in its entirety".
8. It was Mr Morris' evidence that Delta's approach during negotiations was consistent throughout all discussions and presentations. Both day and support shift employees would observe public holidays as further evidenced by clauses 11.2, 11.3 and 11.4 of the 2015 TSP Agreement.
9. In relation to the DAP's filed by Mr Bennett and Mr Locklee on 25 February and 15 October 2014 respectively, Mr Morris contended that neither Mr Bennett, Mr Locklee or the Union had "sought to progress the dispute further or challenge Delta's interpretation of clause 11.23 of the then 2011 enterprise agreement".
10. In both matters, Delta's clear position was that the employees "observed the public holiday" and in accordance with the enterprise agreement, were paid at the rate of single time. He further contended that the interpretation adopted by Delta was made known prior to the commencement of negotiations for the 2015 enterprise and TSP agreements. The wording of clause 11.23 had simply remained unchanged.
11. Despite a number of representations made by the Unions and Mr Treherne concerning the 2015 enterprise and TSP agreements, there were no representations made concerning the issue of payment for observing a public holiday whatsoever.
12. Mr Morris contended the provisions related to observing a public holiday at the rate of single time was discussed with the WCC in the context of Mr Bennett's DAP. He further contended that the Unions now seek an interpretation of the 2015 enterprise and TSP agreements which is inconsistent with clause 11.23 of the enterprise agreement, a provision which was not challenged in negotiations for the 2015 agreements nor was it challenged in the course of the DAP's raised by Mr Bennett and Mr Locklee.
13. Mr Morris stated it was also his understanding based on correspondence between the then Industrial Relations Manager, Mr McLaughlin and Mr Baker, the then Senior Payroll Office/Manager, that Delta's policy from at least 2002 was when "public holiday observed, continue current arrangement, no TSP".
14. In cross-examination, Mr Morris maintained the TSP was not applicable when a public holiday was observed and not worked by an operator. He refuted the suggestion that an operator was simply entitled to the 37.7% TSP payment paid at the relevant salary point. For example, there were specific provisions related to the taking of non-TSP long service leave and observing public holidays.
15. It was Mr Morris' evidence that in circumstances where a public holiday was observed, the TSP was not paid on that particular day.
16. Mr Morris explained that operators work an average of 35 hours per week. In some weeks, an operator might work 48 hours, whilst in others, as few as 24 hours. He agreed that the TSP was paid for all time worked and referred to the specific provisions under clause 11.23 of the 2015 enterprise agreement concerning payment for a public holiday in circumstances where the operator was not required to work on that particular day. He further contended that the 2015 TSP and enterprise agreements must be read "as a whole": Production operators of the day team will observe the public holiday when rostered on the day of the public holiday in accordance with 11.23 of the Delta Enterprise Agreement, which says single time.
17. Mr Morris agreed that a number of previous agreements had stated that they "replace and rescind" the previous relevant agreement.
18. In cross-examination by the CEPU, Mr Morris refuted Mr Treherne's contention that when Delta informed the negotiation committee that operators may be required to observe a public holiday, rather than work it, there was no explanation that the public holiday would be paid at single time.
19. Mr Morris contends that he had no evidence to support the proposition that the observation of a public holiday at the rate of single time was "well known" at the time of the negotiations. He further contends that the nature of the two DAP's filed by employees may not have been known widely. Notwithstanding those concerns, Mr Morris was adamant that the issue had been discussed at the time the 2015 enterprise and TSP agreements were negotiated.
20. It was Mr Morris' evidence that clause 11.23 of the enterprise agreement expressly provided that "shift workers … must be paid for all ordinary time worked in respect of the public holiday at the rate of single time". He further agreed that the enterprise agreement expressly sets out that TSP is not paid in certain circumstances such as long service leave.
21. Mr Morris agreed that the TSP rate comprises roster loadings, shift allowances, weekend penalties and public holiday penalties.
22. Mr Morris was examined on matters related to the ELIPS payroll management system. In particular, Mr Morris contended the "O" is that system related to observing a public holiday and not "other leave types". Mr Morris also contended clause 11.23 overrode the general application of the 37.7% TSP payment.
23. Mr Morris was also cross-examined on a number of historical annualised salary agreement documents which in his opinion were irrelevant to the questions to be determined in this matter.

Submissions

1. I have given consideration to the submissions of both the Unions and Delta. The gravamen of those submissions was essentially canvassed in evidence and subjected to vigorous cross-examination.

Consideration

1. Both Unions brought evidence before the Commission to support the proposition that Delta had paid operators a "reduced" TSP in circumstances where an operator was required to observe, rather than work, a public holiday that falls within their shift pattern or, where an operator is normally rostered to work on a public holiday, but is unable to for reason of personal (sick) leave.
2. The position of Delta was that the 37.7% TSP payment was not applicable in such circumstances and clause 11.23 of the enterprise agreement, clauses 11.2, 11.3 and 11.4 of the TSP agreement and s 116 of the Act support that proposition.
3. In determining this matter, I have given consideration to all the evidence and submissions put to the Commission in the proceedings.
4. What matters most here are the terms of most recent 2015 enterprise and TSP agreements. It is from those documents that the Commission must first seek to determine the objective intention of the parties by reference to what a reasonable person would understand to be the intention of the language used in those agreements, without regard to the subjective intentions of the parties. In the absence of ambiguity, the language expressed in the agreements shall stand.

The Statutory Nature of Enterprise Agreements

1. The Act relevantly provides a two tier approval process for the making of an enterprise agreement. First, a majority of employees need to cast a valid vote to approve it and second, the agreement is approved by the Fair Work Commission consistent with the requirements of s 186.
2. The dynamics of federal enterprise agreements has shifted markedly under the Act where agreements no longer have "parties" as was the case under the previous legislative regime. The Commission is required to interpret the enterprise agreement as made between the employer and its employees.
3. Agreements establish binding obligations that can also be subject to pecuniary penalties for breach of a term. There is an obligation on bargaining representatives to carefully explain to employees who are to vote on any future agreement what each term of the new agreement means. It is not enough to simply focus on the monetary outcome alone and not the finer detail.
4. Similarly, the requirements upon the employer set out under s 180 (5) must be taken seriously. There is no evidence before the Commission that the Unions took issue with Delta's s 180 (5) notice to employees. A prime opportunity to question the operation of clause 11.23, mirrored in the 2011 agreement, was back in 2011.
5. There is no evidence before the Commission from either Delta or the Unions which would permit me to make any firm observations as to what the employees were told or explanations given to them prior to voting up the enterprise agreement as required by s 180 (5) in either 2011 or 2015. In that particular regard, Rares J recently observed in Australian International Air Pilots Association v Qantas Airways Limited [2017] FCA 346 at [29] that the rigour of enterprise agreement negotiations warrants the adoption of a cautious approach to the admission and reliance upon evidence of positions advanced during the negotiation process: Substantially, the Act provided that the agreement was a tripartite document between a body of employees, a corporation with numerous officers and an industrial association. The involvement of so many individuals in the formation of the agreement re-emphasises the importance of approaching the construction of that document in accordance with the principle of objectivity. It is important, in doing so, to be cautious and bear firmly in mind the fact that the agreement was formed by a diversity of persons who had sought to protect their differing interests by various formulations of words in it. Those disparate intentions cannot be determinative of the proper construction to be given to the words chosen. In Health Services Union v Ballarat Health Services [2011] FCA 1256 at [79], Gray J said: In the days when an award might be negotiated between a union and an employer, and made by consent, the existence of a common understanding between the union and the employer as to the meaning of terms might have had some role to play in their construction. Whatever were the terms of such an agreement, and whatever was their meaning, those terms were imposed upon the employees who became bound by the award. In the current era, most industrial instruments are required to be put to a vote of the employees whose work will be covered by them, before they can be certified or approved so as to become enforceable by statute. The union and the employer who negotiated the terms might have had a common understanding of the meaning of them, but that understanding might not have been shared by all or some of the employees who voted for the operation of the agreement. They may have been entirely ignorant of the common understanding. In those circumstances, the occasions on which it can be said that a party to an agreement who entered into it on a common understanding should not be allowed to resile from that understanding will be rarer than they have been in the past.
6. Where a dispute about a matter arising under agreement is raised, the Commission is required to identify the objective meaning of the enterprise agreement having regard to the ordinary meaning of the words used. The Commission is required to construe the words of the agreement having regard to its context.
7. What matters here is the most recent 2015 Enterprise Agreement and the terms of the TSP Agreement. It is from those documents that the Commission must first interpret what the ordinary meaning of the text used means in the context of the agreement as a whole

Interpretation

1. The Commission's power to interpret the provisions of an industrial instrument such as an enterprise agreement is found at s 175 of the Act, which relevantly provides: 175 Powers of interpretation The Commission may, for the purpose of exercising its functions in connection with a matter before it, determine any question concerning the interpretation, application or operation of any relevant law or instrument (including the industrial relations legislation and any industrial instrument).

Principles governing the interpretation of federal industrial instruments

1. In Polan v Goulburn Valley Health [2016] FCA 440 at [32], Mortimer J summarised the relevant principles of interpretation applicable to industrial instruments: Like other instruments creating normative rules, such as statutes and regulations, industrial instruments are to be construed in accordance with their language (or text), taking into account their context in the wider scheme or structure of the instrument, and the purpose of the provisions, again as seen in the wider scheme or structure of the instrument: see generally Lacey v Attorney-General (Qld) [2011] HCA 10; 242 CLR 573; Certain Lloyd's Underwriters v Cross [2012] HCA 56; 293 ALR 412 at [24]-[25]. In the latter case, French CJ and Hayne J said at [25]: Determination of the purpose of a statute or of particular provisions in a statute may be based upon an express statement of purpose in the statute itself, inference from its text and structure and, where appropriate, reference to extrinsic materials.
2. In The Australasian Meat Industry Employees Union v Golden Cockerel Pty Limited [2014] FWCFB 7447, a Full Bench of the Fair Work Commission dealt with the principles to be applied to the interpretation of enterprise agreements including the approach to be followed in resolving ambiguity. At [41] , the Full Bench summarised those principles as follows: 1. The Acts Interpretation Act 1901 (Cth) does not apply to the construction of an enterprise agreement made under the FW Act. 2. In construing an enterprise agreement it is first necessary to determine whether an agreement has a plain meaning or contains an ambiguity. 3. Regard may be had to evidence of surrounding circumstances to assist in determining whether an ambiguity exists. 4. If the agreement has a plain meaning, evidence of the surrounding circumstances will not be admitted to contradict the plain language of the agreement. 5. If the language of the agreement is ambiguous or susceptible to more than one meaning then evidence of the surrounding circumstance will be admissible to aid the interpretation of the agreement. 6. Admissible evidence of the surrounding circumstances is evidence of the objective framework of fact and will include: (a) evidence of prior negotiations to the extent that the negotiations tend to establish objective background facts known to all parties and the subject matter of the agreement; (b) notorious facts of which knowledge is to be presumed; (c) evidence of matters in common contemplation and constituting a common assumption. 7. The resolution of a disputed construction of an agreement will turn on the language of the Agreement understood having regard to its context and purpose. 8. Context might appear from: (a) the text of the agreement viewed as a whole; (b) the disputed provision's place and arrangement in the agreement; (c) the legislative context under which the agreement was made and in which it operates. 9. Where the common intention of the parties is sought to be identified, regard is not to be had to the subjective intentions or expectations of the parties. A common intention is identified objectively, that is by reference to that which a reasonable person would understand by the language the parties have used to express their agreement. 10. The task of interpreting an agreement does not involve rewriting the agreement to achieve what might be regarded as a fair or just outcome. The task is always one of interpreting the agreement produced by parties.
3. I have applied this approach in determining this dispute.
4. The decision of the Full Bench in Golden Cockerel points to the circumstances where extrinsic material can be used when interpreting the construction of an enterprise agreement. Ambiguity within a provision of an enterprise agreement must be identified before one is to have regard to evidence of the surrounding circumstances Ambiguity must be identified before regard is had to evidence of the surrounding circumstances.
5. Shortly stated, where there is no ambiguity in the term or provision of the agreement and the term or provision has a plain meaning, extrinsic material cannot be relied upon to contradict that meaning. Construction therefore begins with a consideration of the ordinary meaning of the words having regard to their context and purpose.
6. The Commission is also required to identify the objective meaning of the enterprise agreement having regard to the ordinary meaning of the words used. The decision in Golden Cockerel is not authority for the proposition that interpretation may require a rewrite to correct a perceived ambiguity so as to provide a just and fair result.
7. The approach of the Full Bench in Golden Cockerel follows that adopted by the Federal Court in relation to the interpretation of commercial contracts: Stratton Finance Pty Limited v Webb [2014] FCAFC 110 at [36]-[40].
8. A more recent statement expanding the principles in Golden Cockerel was set out in Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union' known as the Australian Manufacturing Workers Union (AMWU) v Berri Pty Limited [2017] FWCFB 2005. I am also mindful of the earlier determination of the Full Bench in SDA v Woolworths Limited [2013] FWCFB 2814 at[12]: It is undoubtedly the case that, in resolving a dispute as to the interpretation of a provision of an enterprise agreement approved under the Fair Work Act 2009, it is permissible to take into account the industrial context and purpose of the agreement. However, there are two important limitations upon this approach relevant to the determination of this appeal. The first is that the process of interpretative analysis must focus, first and foremost, upon the language of the agreement itself. For example, in Amcor Limited v CFMEU, the process was described by Gleeson CJ and McHugh J in the following terms: "The resolution of the issue turns upon the language of the particular agreement, understood in the light of its industrial context and purpose ...". Or, as Kirby J put it in the same case, "Interpretation is always a text-based activity". Admissible extrinsic material may be used to aid the interpretation of a provision in an enterprise agreement with a disputed meaning, but it cannot be used to disregard or rewrite the provision in order to give effect to an externally derived conception of what the parties' intention or purpose was. The oft-quoted statement of Madgwick J in Kucks v CSR Limited makes this clear: But the task remains one of interpreting a document produced by another or others. A court is not free to give effect to some anteriorly derived notion of what would be fair or just, regardless of what has been written into the award. Deciding what an existing award means is a process quite different from deciding, as an arbitral body does, what might fairly be put into an award. So, for example, ordinary or well-understood words are in general to be accorded their ordinary or usual meaning.
9. The more recent approach of the Full Bench requires the Commission to ascertain the objective intention of the contested provisions, based upon the language and terms of the enterprise agreement, when read as a whole, having regard to its context, purpose and plain meaning.

Personal leave

1. Payment for personal leave, including sick leave is set out under s 99 of the Act:

99 Payment for paid personal/carer's leave If, in accordance with this Subdivision, an employee takes a period of paid personal/carer's leave, the employer must pay the employee at the employee's base rate of pay for the employee's ordinary hours of work in the period.

Payment for absence on public holiday

1. Where an employee is absent from work on a day that is a public holiday, it is mandatory under the NES that the employer pays the employee at his or her base rate of pay for the employee's ordinary hours of work on that day:

116 Payment for absence on public holiday If, in accordance with this Division, an employee is absent from his or her employment on a day or part-day that is a public holiday, the employer must pay the employee at the employee's base rate of pay for the employee's ordinary hours of work on the day or part-day. Note: If the employee does not have ordinary hours of work on the public holiday, the employee is not entitled to payment under this section. For example, the employee is not entitled to payment if the employee is a casual employee who is not rostered on for the public holiday, or is a part-time employee whose part-time hours do not include the day of the week on which the public holiday occurs.

1. Section 16 (1) of the Act defines "base rate of pay" as not including a range of benefits: (1) The base rate of pay of a national system employee is the rate of pay payable to the employee for his or her ordinary hours of work, but not including any of the following: (a) incentive‑based payments and bonuses; (b) loadings; (c) monetary allowances; (d) overtime or penalty rates; (e) any other separately identifiable amounts.
2. It must follow that the enterprise agreement reflects the provisions of ss 16, 99 and 116 of the Act. Public holidays not worked and personal/carer's leave is paid at the employee's base rate of pay.
3. Relevantly, s 16 (1) specifically excludes five separately identifiable amounts, some of which are "rolled up" in the 37.7% TSP payment that may be paid to an employee in addition to his or her base rate of pay applicable to ordinary hours of work.
4. The intention of s 16 (1) must be that the five separately identifiable amounts or, any other amount for that matter that is not included in the definition of "base rate of pay", are not required to be paid in circumstances where a public holiday falls when an employee is normally rostered to work the public holiday but is unable to attend for work due to reason of personal leave. Put alternatively and to make it abundantly clear, it really matters not whether the five identifiable amounts are paid separately or can be identified in a rolled up rate such as the TSP. Those amounts have been excluded from the definition of base rate of pay by the legislative strike of a pen.
5. Clause 11.23 of the 2015 enterprise agreement and clauses 11.2, 11.3 and 11.4 of the 2015 TSP agreement constitute express and plainly worded provisions.
6. The Unions vigorously argued that Delta's interpretation of the enterprise agreement meant that operators were paid less in a week in circumstances where a public holiday falls when the operator is normally rostered to work the public holiday and is : 1. directed by Delta to observe the public holiday, rather than work their normal rostered shift; or 2. unable to attend for work due to reason of personal leave was an undesirable and unintended consequence of the enterprise agreement negotiations (in both 2011 and 2015) and the understanding of the employee or Union bargaining representatives.
7. For their part, the Unions urged the Commission to give broad consideration to the industrial context, purpose and objectives of the TSP and enterprise agreements with regard to be had to the wider industrial circumstances and environment in which those instruments were negotiated. Context is important. However, the authorities firmly indicate that it is only in connection with ambiguity in the text of the industrial instrument that the "surrounding circumstances" can be considered.
8. It may be that during the course of the enterprise agreement negotiations that the employees were sometimes represented by different bargaining representatives. However, there is no objective evidence setting out "who said what" concerning the various drafts considered by the parties from time to time up until the current version of the agreement was put out to vote by Delta. Rather, what was sought to be relied upon by Mr Treherne and Mr Morris was largely subjective reflecting their individual view of the negotiations at a particular moment in time, rather than any mutually agreed position representing the subjective view of the negotiating parties.
9. For their part, the Unions sought to rely on some limited email exchanges. What is lacking is objective evidence from the Unions that the intention of the parties at the time of voting in 2011 and 2015 was other than that relied upon by Delta. In the absence of such objective evidence, the Commission must rely on the precise wording of the enterprise agreement.
10. It is, of course, permissible for the Commission to consider the industrial context and purpose of the 2015 enterprise and TSP agreements and earlier agreements if the language is unclear, ambiguous or susceptible to more than one meaning, as Madgwick J in Kucks v CSR Limited [1996] IRCA 166 has made clear.
11. However, the Commission is unable to rewrite the enterprise agreement so as to remove any such undesirable or unintended consequence of the final agreement as put to the employees at the time of voting.
12. There is also no evidence to validly support a proposition that Delta's F17 statutory declaration filed in support of the application for approval of the enterprise agreement was false or, that employees did not have access to the final version of the agreement, either through Delta or the bargaining representatives (or the Unions) at least 7 days prior to voting.

Is there ambiguity in the 2015 enterprise and TSP agreements?

1. I have considered the construction of clause 11.23 of the enterprise agreement and clauses 11.2, 11.3 and 11.4 of the TSP agreement as set out above. Shortly stated, it must be said that on their face, the language set out in those provisions is neither ambiguous nor susceptible to more than one meaning. Indeed, the Act itself supports the practical effect of the disputed provisions.
2. The language used in drafting clause 11.23 of the enterprise agreement and clauses 11.2, 11.3 and 11.4 of the TSP agreement is clear, unambiguous and has plain meaning.
3. In such circumstances, the Commission is unable to draw upon extrinsic materials to determine what the Unions would contend to be the proper interpretation of the enterprise agreement, that is, payment for a rostered public holiday when observed by an operator or, in circumstances where an operator is unable to work the rostered public holiday because of illness, as if you were being paid for being at work.
4. The Unions took the Commission to some of the history underpinning the nature of the TSP payment and also the enterprise agreement. However, that history concerning the logic for rolling up various payments becomes redundant in circumstances where the wording of the enterprise agreement is clear and unambiguous. Put alternatively, the rationale for rolling up allowances into the TSP payment cannot be used to rewrite or force change upon the plain and ordinary meaning of the words contained within clause 11.23 of the enterprise agreement.
5. On one view of the Union argument, the CFMEU and CEPU appear to suggest that "to right Delta's wrong", the Commission should intervene and rewrite the offending provisions so as to afford members the full 37.7% TSP payment as claimed. However, the decisions in Golden Cockerel and SDA v Woolworths are authority for the proposition that it is impermissible to rely upon such extrinsic material to rewrite the provisions.

Conclusion

1. For the reasons I have set out above, I answer the questions for arbitration as follows: 1. Is the loading of 37.7% paid each pay week to Production Operators in Annexure A in accordance with clause 6.1 of the Vales Point production operators Total Salary Package (TSP) Agreement 2015 to be reduced to a lesser percentage payment in a pay week where a public holiday falls when the production operator is normally rostered to work the public holiday and when not required to attend their normal rostered shift. No. 2. Is the loading of 37.7% paid each pay week to Production Operators in Annexure A in accordance with clause 6.1 of the Vales Point production operators Total Salary Package (TSP) Agreement 2015 to be reduced to a lesser percentage payment in a pay week where a public holiday falls when the production operator is normally rostered to work the public holiday and when unable to attend due to reason of personal leave. No.
2. The applications are refused.
3. Matter Nos 2016/168233 and 16/168252 are so concluded.

Commissioner DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated. Decision last updated: 06 December 2017