Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia & Anor v Sunset Power International Pty Ltd trading as Delta Electricity

Industrial Relations Commission (NSW)|2018-10-09

J Mattson (Respondent) File Number(s): 2017/386311 Decision under appeal Court or tribunal: Industrial Relations Commission of New South Wales Citation: [2017] NSWIRComm 1074 Date of Decision: 30 November 2017 Before: Stanton C File Number(s): 2016/168233 and 2016/168252

Judgment

This is an appeal pursuant to s 187 of the Industrial Relations Act 1996 (NSW) ("the IR Act") against the decision of Stanton C in CFMEU Northern Mining and NSW Energy District v Sunset Power International Pty Ltd trading as Delta Electricity [2017] NSWIRComm 1074 ("the Decision").
The first appellant is the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia, which was granted leave to intervene in the proceedings below. The second appellant is the Construction, Forestry, Maritime, Mining and Energy Union.

The Decision

In the Decision the Commissioner describes at [8] the questions to be determined by him in the proceedings ("Questions for Determination"), as follows: 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 in original)
The Commissioner traversed, at [97] - [108] of the Decision, the principles regarding the interpretation of industrial instruments such as the Enterprise Agreement. We will not reproduce all of those paragraphs, but highlight in particular the following extracts from the Decision: 101. 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. … 104. 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. … 107. 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. 108. 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.
The Commissioner then considered, at [109] - [111], the "legislative context" of the Enterprise Agreement, which he identified as ss 16, 99 and 116 of the Fair Work Act. It suffices for present purposes to reproduce only s 16(1), which is in these terms: 16 Meaning of base rate of pay General meaning (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.
The Commissioner concluded at [112] - [114] as follows: 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. 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. 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.
In drawing these conclusions the Commissioner took a position consistent with the submissions that had been made by the respondent in the proceedings below: see AB193, para 29.
The Commissioner went on to make the following findings at [123] - [127]: 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. 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. 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. 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. 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.
The Commissioner concluded at [128] by answering "No" to each of the Questions for Determination. He refused the applications, at [129].

Grounds of appeal

In their Appeal filed on 21 December 2017 the appellants contended that the questions raised by the appeal are as follows: 3. Whether the Decision can both answer the questions posed for determination in favour of the Applicants and also refuse the Applications. 4. Whether error exists in the Decision in the interpretation of the Delta Electricity Employees' [sic] Enterprise Agreement 2015, the incorporated Vales Point Production Operator Total Salary Package (TSP) Agreement 2015. 5. Whether error exists in the Decision in the interpretation of the Fair Work Act 2009, and its application in relation to the Delta Electricity Employees' [sic] Enterprise Agreement 2015 and the incorporated Vales Point Production Operator Total Salary Package (TSP) Agreement 2015. (We observe parenthetically that the numbering of the paragraphs relating to the questions raised follows on from the "matters appealed against".)
The grounds of appeal were described in the Appeal in these terms: 1. That the Commission [erred] in failing to properly interpret and give effect to the Agreements. 2. The Appeal raises important questions concerning the application and effect of the terms of the Fair Work Act 2009 on the agreements as Fair Work Industrial Instruments. 3. The Appeal raises important questions concerning the application of principles of interpretation derived from cases relied on in the Decision in order to properly interpret and determine the application of on the agreements as Fair Work Industrial Instruments. [sic] 4. It is in the public interest that the decisions of the Commission should be seen to: a. be clear and unambiguous; b. properly give effect to the terms of the Agreements; c. properly apply principles of construction of Enterprise Agreements; d. maintain integrity and public confidence in the framework of dispute resolution provided for by the Fair Work Act 2009.

Legal principles to be applied

The Commission is empowered to deal with this dispute by clause 27 of the Enterprise Agreement, which is relevantly in these terms: 27. Grievance and Disputes Procedures … 27.4 If following the above processes, an agreement is not reached about the grievance or dispute, and the grievance or dispute remains, then in the first instance, the grievance or dispute can be settled or resolved by a person who is a Member of the Industrial Relations Commission of New South Wales ('the Commission') in the exercise of the powers and functions conferred by this agreement in accordance with the following: (a) A party or the parties to this agreement shall notify the Industrial Registry established under the Industrial Relations Act 1996 ('the IR Act') of the existence of a grievance or dispute, and that the final stage of this grievance and dispute settlement procedure is being invoked in accordance with the terms of this agreement; b) The President of the Commission or, in his absence or upon his nomination, the Vice-President of the Commission shall select a Member of the Commission to deal with the grievance or dispute in accordance with this clause; (c) The Member of the Commission, so allocated, shall first attempt to resolve the grievance or dispute by conciliation. … ; (d) If the grievance or dispute is not resolved by conciliation, and the Member certifies that the grievance or dispute cannot be resolved by conciliation, then the grievance or dispute, or any remaining part of it, may be resolved and determined by arbitration; (e) Subject to any appeal which may lie from the decision of the single Member of the Commission in arbitration, to a Full Bench of the Commission, the determination by arbitration, or in any appeal, shall be final and binding on the parties to this agreement and any person bound by the agreement; … (h) Any appeal will adopt the procedure and the exercise of any power referred to or specified in Pt 7 of Ch 4 of the IR Act; … (j) The exercise of any power or function under this sub-clause is subject to the requirements of s 740(4) of the Fair Work Act 2009 ('the Fair Work Act').
In their submissions filed on 6 March 2018 the appellants contended that in the context of clause 27 of the Enterprise Agreement leave to appeal was not required. In submissions filed on behalf of the first appellant on 2 October 2018 it was, at paragraph 52, "accepted that permission to appeal is required". To avoid uncertainty, we consider that leave to appeal is necessary.
Clause 27.4(e) of the Enterprise Agreement refers to "any appeal which may lie from the decision of the single Member of the Commission in arbitration, to a Full Bench of the Commission" (our emphasis). Any such appeal will adopt the procedure and the exercise of any power referred to or specified in Part 7 of Chapter 4 of the IR Act: clause 27.4(h). In our view, this language does not confer a right of appeal which removes the requirement to seek leave to appeal: see Appeal by DP World Brisbane Pty Ltd [2013] FWFCB 8557 at [46] - [53].
The principles in relation to the grant of leave to appeal a decision of the Commission were summarised in Public Service Association and Professional Officers Association Amalgamated Union of New South Wales v Roads and Maritime Services [2015] NSWIRComm 16. In that matter the Full Bench stated at [10] and [11]: It is well settled that an appeal under the IR Act is an appeal in the strict sense: see s 191 of the IR Act and King v State Bank of New South Wales (No 2) [2002] NSWIRComm 353; (2002) 126 IR 407. In such an appeal the appellate tribunal will only intervene to correct error: Aboud v State of New South Wales (Department of School Education) [1999] NSWIRComm 449; (1999) 92 IR 32. In the case of discretionary decisions it is not enough that the appellate tribunal would have come to a different view. It must be shown that the primary judge had failed to properly exercise the discretion committed to him: Mace v Murray [1955] HCA 2; (1955) 92 CLR 370 and House v The King [1936] HCA 40; (1936) 55 CLR 499. It is important to bear these principles in mind in approaching the question of leave to appeal. The principles guiding the determination of leave were clearly set out in this often cited passage from Hosemans v Commissioner of Police (No 4) (2005) 150 IR 263: [5] The law and practice governing leave to appeal is well settled and does not require restatement: see Knowles v Anglican Church Property Trust (No. 2) (1999) 95 IR 380. However, two principles warrant particular mention: first, leave will not be lightly or automatically granted (see King v State Bank of New South Wales (No 2) (2002) 126 IR 407 at [52]-[55] and Knowles at 381 - 382) and, subject to the requirements of s188(2) of the Act, will not, generally, be granted unless the appellant demonstrates that the appeal "raises substantial issues of principle or law or has wider implications for the jurisprudence of this Commission, including whether the decision has widespread practical application" (see Knowles at 382) or raises issues going to the proper administration of justice. Secondly, leave will rarely be granted where an appeal primarily seeks to challenge findings of fact which are otherwise reasonably open on the evidence: Box Valley Pty Ltd v Price (2000) 97 IR 484; Austin v NF Importers Pty Limited [2005] NSWIRComm 353 at [5].
In Industrial Relations Secretary v Wattie [2017] NSWIRComm 1007 the Full Bench stated at [12] and [13]: Further, we reiterate the observations of the Full Bench in Antonakopoulos v State Bank of NSW (1999) 91 IR 385 at 392, referring to the then-recently enacted provisions of the Act: "The provisions of the Act as to appeals give primacy to first instance decision making in a manner not earlier found in industrial legislation in this State. We note that the Full Bench in Antonakopoulos v State Bank of NSW (1999) 91 IR 385 also held, immediately before the statement set out above, that an appeal bench should not substitute its own views as to a decision that was reasonably open at first instance. We endorse and apply that approach. Lastly, we add, as the Full Bench said in Fire Brigade Employees' Union of NSW (o/b Challinor) v Fire and Rescue NSW [2016] NSWIRComm 1050, that it will rarely be appropriate to grant leave to appeal unless an appellant can mount at least an arguable case pointing to appellable error. This is by no means a new element of the Commission's jurisprudence; it has long been held that an appellate body in an appeal of this nature will only substitute its own judgment where the first-instance decisionmaker has fallen into error of law, or made a finding of relevant determinative fact that is demonstrably wrong: Drake Personnel Ltd v Workcover Authority of NSW (1999) 90 IR 432 at 440. There will rarely be utility in granting leave to appeal where that degree of error cannot at least arguably be agitated on appeal.
The principles outlined in those cases have since been approved in numerous decisions of the Full Bench. It is not necessary to list them all. We will apply these principles.
The Decision did not involve the exercise of a discretion. It is common ground that if leave to appeal is granted the question for the Full Bench is whether the Commissioner reached the correct decision, not whether the decision was reasonably open to him: Branir Pty Limited v Owston Nominees (No 2) Pty Ltd [2001] FCA 1833; 117 FCR 424 and Australian, Municipal, Administrative, Clerical and Services Union v Commonwealth of Australia (acting through and represented by the Australian Taxation Office) [2018] FWCFB 1170.
The question in this appeal is one of construction. We have reproduced at [12] above the Commissioner's summary of the relevant principles to be applied in the construction of an enterprise agreement. The parties are in agreement that the Commissioner identified the correct principles of interpretation.
In addition to the authorities referred to by the Commissioner we have had regard to Tomvald v Toll Transport Pty Limited [2017] FCA 1208 in which Flick J summarised the relevant authorities as follows: 36. The general approach to the manner in which industrial instruments such as the present Enterprise Agreement are to be construed is well-settled. 37. An oft-repeated formulation of that general approach is that provided as follows by Madgwick J in Kucks v CSR Ltd [1996] IRCA 166; (1996) 66 IR 182 at 184: Legal principles It is trite that narrow or pedantic approaches to the interpretation of an award are misplaced. The search is for the meaning intended by the framer(s) of the document, bearing in mind that such framer(s) were likely of a practical bent of mind: they may well have been more concerned with expressing an intention in ways likely to have been understood in the context of the relevant industry and industrial relations environment than with legal niceties or jargon. Thus, for example, it is justifiable to read the award to give effect to its evident purposes, having regard to such context, despite mere inconsistencies or infelicities of expression which might tend to some other reading. And meanings which avoid inconvenience or injustice may reasonably be strained for. For reasons such as these, expressions which have been held in the case of other instruments to have been used to mean particular things may sensibly and properly be held to mean something else in the document at hand. 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. See also: Transport Workers' Union of Australia v Linfox Australia Pty Ltd [2014] FCA 829 at [30], [2014] FCA 829; (2014) 318 ALR 54 at 58 per Tracey J; Construction, Forestry, Mining and Energy Union v Hail Creek Coal Pty Ltd [2015] FCA 532 at [6] per Logan J; Construction, Forestry, Mining and Energy Union v Port Kembla Coal Terminal Ltd (No 2) [2015] FCA 1088 at [240], [2015] FCA 1088; (2015) 253 IR 391 at 436 per Murphy J; Australian Workers' Union v Cleanevent Australia Pty Ltd [2015] FCA 1477 at [13] per Flick J. 38. It is also well-settled that the words of an award are not to be construed "in a vacuum divorced from industrial realities": City of Wanneroo v Australian Municipal, Administrative, Clerical and Services Union[2006] FCA 813 at [57], [2006] FCA 813; (2006) 153 IR 426 at 440. French J (as his Honour then was) observed as follows in that case (at 438 to 439): [53] The construction of an award, like that of a statute, begins with a consideration of the ordinary meaning of its words. As with the task of statutory construction regard must be paid to the context and purpose of the provision or expression being construed. Context may appear from the text of the instrument taken as a whole, its arrangement and the place in it of the provision under construction. It is not confined to the words of the relevant Act or instrument surrounding the expression to be construed. It may extend to '... the entire document of which it is a part or to other documents with which there is an association'. It may also include '... ideas that gave rise to an expression in a document from which it has been taken'. His Honour continued on to observe (at 440): [57] It is of course necessary, in the construction of an award, to remember, as a contextual consideration, that it is an award under consideration. Its words must not be interpreted in a vacuum divorced from industrial realities - City of Wanneroo v Holmes [1989] FCA 369;(1989) 30 IR 362 at 378-379 and cases there cited. There is a long tradition of generous construction over a strictly literal approach where industrial awards are concerned - see eg Geo A Bond and Co Ltd (in liq) v McKenzie [1929] AR 499 at 503-4 (Street J). It may be that this means no more than that courts and tribunals will not make too much of infelicitous expression in the drafting of an award nor be astute to discern absurdity or illogicality or apparent inconsistencies. But while fractured and illogical prose may be met by a generous and liberal approach to construction, I repeat what I said in City of Wanneroo v Holmes (at 380): 'Awards, whether made by consent or otherwise, should make sense according to the basic conventions of the English language. They bind the parties on pain of pecuniary penalties.'
See also Bennett v Commissioner of Police [2010] NSWIRComm 25 per Haylen J at [75] - [80], confirmed on appeal in Commissioner of Police v Bennett [2011] NSWIRComm 17 at [26].

Summary of submissions

On 6 March 2018 the appellants filed an Outline of Submissions. Further submissions were filed by the first appellant on 2 October 2018. At the hearing of the appeal on 9 October 2018 counsel for the first appellant stated that the later document should be regarded as containing the submissions on which the first appellant relied.
During the hearing of the appeal the representative for the second appellant adopted the submissions made on behalf of the first appellant.
On that basis we will not reproduce or attempt to summarise the submissions contained in the document filed by the appellants on 6 March 2018. Suffice to say, we have read and considered those submissions.
The first appellant's submissions of 2 October 2018 purported to make a number of "observations" about the Decision. They may be summarised as follows: 1. The Commissioner failed to interpret the words of the Enterprise Agreement and TSP Agreement; in particular "leave" as it appears in clause 7 of the TSP Agreement, and "observe the public holiday" and "the rate of single time" in clause 11.23 of the Enterprise Agreement. 2. The Commissioner gave no weight at all to the parties' express statement of purpose at clause 5 of the TSP Agreement, namely, that the purpose of the total salary package was to provide employees with a "constant and predictable income". 3. The Commissioner's conclusion that the language of the Enterprise Agreement was unambiguously consistent with the respondent's proposed construction is "indefensible". 4. The Commissioner placed some emphasis on the fact that employees would, under the NES, be paid for personal leave at their base rate of pay. To the extent that the Commissioner considered this to be a matter weighing in favour of the respondent's preferred construction, he failed to recognise that the NES is a safety net, not a code, and "[the] raison d'être of an enterprise agreement is to improve upon the minimum safety net". 5. The Decision reveals a degree of confusion as between "context", which is always admissible in construction, and "extrinsic materials", which are sometimes admissible. That confusion meant that the Commissioner ignored relevant contextual matters, including for example the fact that the industrial origins of the Agreement are in the New South Wales industrial relations system.
In the context of a textual analysis of the Enterprise Agreement and the TSP Agreement, the first appellant submitted, in summary, as follows: 1. The ordinary, dictionary meaning of "leave" is "permission to be absent from one's normal duties, employment etc.; (authorised) absence from work etc.; a period of such absence" or "permission to be absent, as from duty; the time this permission lasts". As public holidays fall within these definitions, the term "all leave" in clause 7 of the TSP Agreement must be taken to include public holidays. 2. The purpose of clauses 11.2 and 11.3 of the TSP Agreement and 11.23 of the Enterprise Agreement is to make abundantly clear that the respondent is entitled to give notice that an employee is not required to work on a public holiday, notwithstanding what the employee's roster might provide. The provisions say nothing about the respondent's obligations in terms of rates of pay or otherwise. They are directed to a different issue. 3. The "TSP loaded rate" is the "single time" rate of pay for the purposes of clause 11.23 of the Enterprise Agreement. 4. The expressions "base rate" and "base salary" are used elsewhere in the Enterprise Agreement. The fact that the parties have chosen to use the term "single time" rather than "base rate" is a powerful textual indication that they intended that the different terms convey different meanings.
The first appellant also raised the following "contextual considerations": 1. The TSP Loading is paid in respect of an employee's salary point, which is a weekly rate. The loading is not referable to any particular loading payable on any particular day, but instead compensates (presumably with swings and roundabouts) for loadings which might otherwise be payable from time to time. An attempt to disaggregate entitlements by reference to particular working days is inconsistent with the basic design of the TSP arrangement. 2. The primary objective of construction is to give effect to the parties' purpose. The statement of purpose at clause 5.1 of the TSP Agreement should have been a pre-eminent consideration in the construction of that Agreement. The stated purpose of the arrangement was to provide the relevant employees "a constant and predictable income". The correct construction is one which vindicates that purpose. The respondent's construction of the documents produces "arbitrary fluctuations in employee income". 3. Even absent the statement of purpose in clause 5.1 of the TSP Agreement, the arbitrariness of the result would have weighed against the respondent's construction. The respondent did not articulate any reason why the parties would have agreed that employees who happen to be sick on public holidays should be paid less than employees who are sick on other days, nor is there any reason apparent. 4. The respondent did not explain why the parties would have agreed that employees would be paid the TSP Loading for sick leave and annual leave but not on public holidays not worked. That is on any view an industrially strange, if not unprecedented, arrangement. In the absence of clear words to that effect, the Commission would not readily find that the parties had adopted such an unusual arrangement. 5. The evidence demonstrated that the respondent's approach involved a departure from long standing practice in circumstances where there was little evidence of any mutual and objective intention to depart from that intention in the TSP Agreement and no evidence of any concession by the respondent in exchange for the employees' concession. In circumstances where the language of the TSP Agreement admitted of more than one view, that is a matter which supported the first appellant's view.
The respondent's submissions may be summarised as follows: 1. There is no objective basis on which to conclude that the Enterprise Agreement and the TSP Agreement intended to provide entitlements greater than the NES. 2. The Fair Work Act makes it clear that under the NES absences on personal/carer's leave or on public holidays are to be paid at the employee's "base rate of pay" as defined in s 16 of the Fair Work Act. 3. The wage rates in clause 4.2 of the Enterprise Agreement are relevantly the base rates of pay. 4. On a proper construction of the Enterprise Agreement and the TSP Agreement, "single time" for the purposes of clause 11.23 of the Enterprise Agreement means the base rate of pay in clause 4.2. 5. The Commissioner rejected the appellants' arguments and accepted the respondent's position that the TSP Loading was not payable on the relevant occasions. It was correct to say the loading is not to be reduced, as it is not reduced; rather it is not paid at all. Having come to that conclusion, it was appropriate for the Commissioner to refuse the appellants' applications. 6. In that context, the Commissioner did not make an inconsistent decision, including within the meaning of s 740(4) of the Fair Work Act. 7. No error in the Commissioner's approach is identified. 8. Even if criticism can be made of the Commissioner's approach or of the emphasis and weight he gave to particular provisions (which the respondent does not concede), the conclusion he reached was undoubtedly correct.

Consideration

The dispute between the parties is whether the TSP Loading is payable to employees when they are absent from work due to illness on a public holiday, or when they are not required to attend for work on a public holiday.
At their core, the appellants' submissions may be distilled into the following contentions: 1. Public holidays are a form of leave and therefore are caught by the reference to "all leave" in clause 7 of the TSP Agreement. 2. Notwithstanding that clause 11.23 of the Enterprise Agreement states that employees who are not required to work on a public holiday will be paid at "single time", this is a clause of general application dealing with all employees. It would have to give way to the specific terms of the TSP Agreement in the event of any inconsistency. That is, clause 7 of the TSP Agreement would require payment of the TSP Loading regardless of whether clause 11.23 of the Enterprise Agreement was construed as providing for a lesser rate of payment. 3. However, that issue need not be resolved because, for employees covered by the TSP Agreement, the "TSP loaded rate" is the "single time" rate of pay.
On the first contention, that public holidays are contemplated in the term "all leave", counsel for the first appellant urged us to consider the terms of predecessor agreements to the TSP Agreement. Clauses 2.2 and 2.3 of the TSP Agreement constrain us in this regard. Those clauses require a construction of the TSP Agreement on its current terms without regard to any predecessor agreements or arrangements. We will proceed on that basis.
Having considered the appellants' submissions, we have determined that it is not necessary for us to decide whether, as a matter of general interpretation going beyond the issues before us or specifically in the context of the TSP Agreement, public holidays are to be regarded as "leave".
Even if we assume that for the purposes of the TSP Agreement the term "leave" is to have the ordinary, dictionary definition sought by the appellants, and that public holidays are captured in the reference to "all leave" in clause 7, it is not determinative of the matter as the appellants submit. Such a finding would ultimately not assist the appellants in the resolution of the second and third contentions outlined at [38] above.
We will explain why this is the case.
The appellants submitted that clause 11.23 of the Enterprise Agreement, being a clause of general application, would need to give way to clause 7 of the TSP Agreement, on the basis that it was a clause of more specific application (being confined to those employees listed in Annexure A to the TSP Agreement).
We agree that as a matter of construction the general does not derogate from the specific: see for example Glen Cameron Nominees Pty Ltd (t/a Glen Cameron Trucking) v Transport Workers' Union of Australia [2018] FWCFB 3744 at [46]. However, the approach to construction urged on us by the appellants does not properly take into account the interaction between clauses 7 and 11 of the TSP Agreement. On the same principle on which the appellants rely, in the context of the TSP Agreement the more general provisions of clause 7 would need to be read in light of, and give way to, the specific provisions of clause 11, which deals solely with the question of public holidays.
It is therefore necessary to consider the terms of clause 11 of the TSP Agreement and, by extension, clause 11.23 of the Enterprise Agreement.
We do not accept the first appellant's submissions that clauses 11.2 and 11.3 of the TSP Agreement do no more than "call up the machinery of clause 11.23 [of the Enterprise Agreement]" and "make abundantly clear that [the respondent] is entitled to give notice that an employee is not required to work on a public holiday, notwithstanding what their roster might provide". These submissions would require us to regard the last sentence of clause 11.23 of the Enterprise Agreement as effectively excised from the document for those employees under the TSP Agreement. In the absence of a clear and unambiguous indication in either the Enterprise Agreement or the TSP Agreement that this was intended, we cannot ignore the sentence. It must have work to do.
The fundamental question is what "single time", as it appears in clause 11.23, means for employees who have the benefit of the TSP Agreement.
We note the following: 1. Clause 11.23 of the Enterprise Agreement requires shift workers to be paid at the rate of "single time" for all ordinary time not worked on a public holiday. 2. The term "single time" is not defined in the Enterprise Agreement. 3. The term "single time" appears in clauses 11.7, 11.8, 11.12 and 11.13 of the Enterprise Agreement. We are cognisant that as a result of clause 5.7 of the Enterprise Agreement these clauses do not apply to employees under the TSP Agreement. However, they provide useful context for determining the meaning of "single time". In particular, clauses 11.12 and 11.13 have the effect of imposing what might be regarded as reasonably "standard" penalties for weekend and public holiday work; that is, time and a half on Saturday, double time on Sunday and double time and a half on a public holiday. This suggests that "single time" should be considered to be an employee's ordinary or base rate. 4. Clause 19 of the Enterprise Agreement is titled "Personal/Carer's Leave and Accident Pay". Clause 19.1 provides that "Personal/Carer's Leave is provided for in the NES". Under s 99 of the Fair Work Act, which comprises part of the NES, personal/carer's leave is paid at an employee's base rate of pay, as defined in s 16(1) of that Act. There is nothing in clause 19 which suggests that an alternative rate is payable. 5. The effect of clause 19.7 of the Enterprise Agreement is that in the event that an employee is absent from work due to illness on a public holiday, the absence is not to be regarded as personal/carer's leave, but as a public holiday. Clause 19.7 is in these terms: If the period during which the 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. 1. Clause 22 of the Enterprise Agreement is titled "Public Holidays and Picnic Day". Clause 22.1 provides that "Public Holidays are as provided for in the NES". Under s 116 of the Fair Work Act, which comprises part of the NES, if an employee is absent from his or her employment on a 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. 2. Clause 22.5 of the Enterprise Agreement is in these terms: An employee who is entitled to payment for a public holiday is paid at single time when the public holiday occurs during a period of: (a) approved leave without pay not exceeding 20 consecutive days or shifts (b) approved personal leave without pay. 1. There is nothing in clause 22 to suggest that clause 22.5 is intended to confer a different monetary entitlement to that effectively conferred by clause 22.1. This is a factor tending towards a construction that "single time" is to be construed as being analogous to base rate of pay.
In the context of the Enterprise Agreement as a whole the rate generally to be paid to employees for public holidays is an employee's ordinary rate of pay before payment of any allowances, loadings, penalties or other amounts. This is the case under clause 22 and for a public holiday falling during a period of paid personal leave pursuant to clause 19.7.
For the sake of internal consistency and harmony, "single time" in clause 11.23 is to be construed in the same manner.
At the hearing of the appeal counsel for the first appellant seemed to move away from the submission that in choosing to use the term "single time" rather than "base rate" the parties demonstrated an intention that the two terms convey different meanings. In any event, we do not accept the submission. In the context in which "single time" appears in the Enterprise Agreement it is clear that the terms convey the same meaning.
We also observe that a number of terms are used throughout the Enterprise Agreement to describe an employee's earnings. These include "full rate of pay" (clauses 17.5 and 20.4), "appointed rate of pay" (clause 18.4), "ordinary rate of pay" (clause 19.28(b)(i)) and "ordinary weekly rate of pay" (clause 21.8(a) and (c)). In the absence of uniformity in drafting throughout the Enterprise Agreement it is difficult to draw any conclusions regarding the parties' intentions simply from them having used "single time" instead of "base rate".
The next question is whether this construction of "single time" is altered by the terms of the TSP Agreement, for those employees covered by that Agreement. The appellants contend that for those employees "single time" means the employees' salary point increased by 37.7% - described by the first appellant as the "TSP loaded rate". We do not agree.
The appellants are once again confronted with the express terms of the TSP Agreement. In clauses 11.2 and 11.3 of the TSP Agreement the parties have expressly called up clause 11.23 of the Enterprise Agreement. As already stated, as a matter of construction the more general provisions of clause 7 of the TSP Agreement have to give way to the specific provisions. There is nothing that properly allows clause 11.23 to be construed differently for employees entitled to the TSP Loading to the construction which applies for all other employees. Had the parties intended "single time" to have an alternative meaning for employees under the TSP Agreement it was open to them to make this clear in the document. We observe that the TSP Agreement makes specific and separate provision for long service leave (clause 9) and the accrual of annual leave and long service leave (clause 10), which operate to modify in part the counterpart provisions in the Enterprise Agreement.
Further, by not expressly modifying the language in clause 11.23 to the extent it applies to employees under the TSP Agreement, for example by referring to "full rate of pay" (as appears in clauses 17.5 and 20.4 of the Enterprise Agreement) or "TSP rate" (as appears in clauses 4.3, 9.1, 9.2 and 10.1 of the TSP Agreement), the parties might be regarded as having intended that "single time" was to be construed as having the same meaning for all employees. This is to adopt the reasoning behind the first appellant's submissions as to the significance of the parties having used "single time" as opposed to "base rate" (see [34(4)], [49] and [52] above).
We have considered the purpose of the TSP Agreement contained in clause 5.1, namely to provide the relevant employees with a "constant and predictable income". Although the authorities referred to above require us to give effect to the intention of the parties, this is not to be discerned solely from the terms of clause 5.1 but from an examination of the terms of the documents as a whole.
Further in this regard, compliance with the objective in clause 5.1 need not be construed as requiring that there be no fluctuations in an employee's income. The combined operation of clauses 4.1 and 7 allows for circumstances, albeit perhaps limited (non-TSP long service leave and leave without pay were recognised as possibilities), in which the TSP Loading will not be paid.
We conclude that for the purposes of clause 11.23 of the Enterprise Agreement "single time" does not include the TSP Loading.
Having reached that conclusion we consider that the Commissioner was correct to dismiss the applications in each of the matters before him.
That said, two matters arise from the Decision that need to be addressed.
The first matter involves the conclusion reached by the Commissioner in paragraph [112] of the Decision and the consequential findings at [113] and [114] of the Decision, as reproduced at [14] above.
The Commissioner did not explain the process by which he reasoned that it "must follow" that the Enterprise Agreement reflects the provisions of ss 16, 99 and 116 of the Fair Work Act. However, for the reasons set out at [48(4)] to [48(8)] above we consider that the Enterprise Agreement does reflect those provisions of the Fair Work Act.
The definition of "base rate of pay" within the meaning of s 16(1) of the Fair Work Act, and its application to ss 99 and 116 of the Fair Work Act, is of some relevance to provide legislative context. However, the effect of paragraphs [112] - [114] of the Decision is to redraft the Enterprise Agreement so as to replace "single time" with "base rate of pay", with a particular legislative meaning. Although it might result in a similar outcome to the conclusions we have reached at [49], [50], [58] and [59] above, we do not, with respect, agree with the approach adopted by the Commissioner.
The second matter arising from the Decision relates to the Commissioner's answers to the Questions for Determination. Those questions were the subject of some discussion on the first day of the hearing before the Commissioner. The representative for the second appellant put its position as follows: Tcpt 19 December 2016, AB155 (31-50): We say the Commission should direct its attention to the words of the agreement itself, what can reasonably fall from the interpretation of those words, and applying the normal principles of interpretation. The two questions are quite simple. Question 1 was, is the loading of 37.7% paid each week to production operators in annexure A, in accordance with cl 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 the public holiday falls when the production operator is normally rostered to work the public holiday and not required to attend their normal rostered shift. That's the first question. The second question, which is a slight deviation of that, relates to when a sick day falls ‑ referred to as personal leave in the modern context ‑ and that is, is the 37.7% paid each week to production operators in annexure A in accordance with cl 6.1 of the Vales Point Production Operators Total Salary Package (TSP) Agreement 2015 to be reduced to a lesser percentage payment in pay weeks where a public holiday falls when the production operator is normally rostered to work the public holiday and is unable to do so due to personal leave. We say the Commission should say no to each of those, that the 37.7% is the payment required to be made under the TSP.
The seeming inconsistency of answering the Questions for Determination in the negative but refusing the second appellant's application was the subject of the first question raised by the appeal as set out at [18].
The second appellant's contention before the Commissioner was that the TSP Loading was a weekly payment, and that an employee was entitled to a payment of 37.7% of their salary point in each week, irrespective of any absences from work due to illness on a public holiday, or on a public holiday, when they would otherwise have been rostered for work. The Questions for Determination were directed to determining whether or not this was the case. Seen in this way each of the questions raise two issues. First, whether the TSP Loading is a weekly calculation? Second, whether the TSP Loading is due to be paid for absences for the specified reasons?
While it may seem inconsistent with the Commissioner's conclusions at [112] - [114] of the Decision for him to have answered the Questions for Determination in the negative that is because he gives a single answer to each of the double-barrelled questions.
On the Commissioner's analysis, equating "single time" with "base rate of pay" as defined in s 16(1) of the Fair Work Act necessarily entails that the TSP Loading is not to be paid when an employee is directed not to work on a public holiday in accordance with clause 11.23 of the Enterprise Agreement, or is absent from work on a public holiday due to illness. That answers the second issue.
It is inherent in the Commissioner's reasoning and conclusions, and rationally follows from the answer to the second issue, that he rejects the proposition that the TSP Loading is a weekly amount. That answers the first issue.
The effect is that, in any week in which an employee is absent for either of the specified reasons, the total dollar amount paid to that employee in respect of the TSP Loading would be less than 37.7% of their weekly salary point. As the Commissioner saw it, the TSP Loading is not "reduced", it is simply not payable on such days - hence the Commissioner's negative response to each of the Questions for Determination.
In its submissions filed on 2 October 2018 the first appellant suggested that the Questions for Determination would be better formulated as follows: Is [the respondent] entitled to withhold the TSP loading ordinarily payable to relevant Production Operators in respect of public holidays when the Production Operator is normally rostered to work, but where: (a) the Production Operator is given notice as required by clause 11.23 that they not required for work; and/or (b) the Production Operator is absent from work on personal leave?
To some extent this is a variation on a theme, but to refer to the respondent "withholding" the TSP Loading is perhaps an unnecessary gloss. The question raised for consideration is whether the TSP Loading is to be paid for absences for the specified reasons? The answer is, as the Commissioner concluded, no.

Conclusions

We agree with the findings made by the Commissioner at [123] - [127] of the Decision, reproduced at [15] above. There is no relevant ambiguity in the Enterprise Agreement to permit the Commission to have regard to the extrinsic material on which the appellants sought to rely.
We find that the Commissioner erred in deciding that "single time" in clause 11.23 of the Enterprise Agreement should be regarded as meaning "base rate of pay" as defined in s 16(1) of the Fair Work Act.
As set out at [49], [50] and [58] above we consider that "single time" refers to an employee's ordinary rate of pay before payment of any allowances, loadings, penalties or other amounts. For the purposes of clause 11.23 of the Enterprise Agreement "single time" does not include the TSP Loading.
The Enterprise Agreement, incorporating the TSP Agreement, does not require the payment of the TSP Loading when an employee is directed not to work on a public holiday in accordance with clause 11.23 of the Enterprise Agreement, or is absent from work on a public holiday due to illness.
We consider that the Commissioner was correct to refuse the applications, albeit we have reached that conclusion on a different basis.
In the circumstances we are satisfied that there are proper grounds on which, in the public interest, leave to appeal should be granted.
We determine matters 2016/168233 and 2016/168252 on the terms set out at [88] below.

Other matter arising - quantum of TSP Loading reductions

A matter was raised during the hearing of the appeal which requires attention.
Counsel for the first appellant identified payslips which were in evidence in the proceedings below, which evidenced reductions in the TSP Loading paid to employees as a consequence of them observing, or being absent on sick leave, on public holidays. Counsel submitted that the invoices suggested that the amount of the reduction in the TSP Loading was proportionate to the number of shifts for which the employee was rostered in the relevant week (or perhaps in the week in which the deduction is made). That is, if the employee was rostered to work 3 shifts and was absent on one of them, the TSP Loading was reduced by a third. If an employee was rostered for 5 shifts and was absent on one of them, the TSP loading was reduced by a fifth.
The TSP Loading is paid on an employee's "salary point". Pursuant to clause 4.2 of the Enterprise Agreement the salary point establishes an employee's ordinary weekly wage for a 35 hour week. It is our understanding that the TSP Agreement allows for employees to receive payment for a notional 35 hour week regardless of the number of shifts worked.
In those circumstances, there would be no rationale for a proportionate reduction in the TSP Loading based on an employee's rostered shifts in a week. Any reduction could only be made by reference to the ordinary hours for which the employee was absent, in the context of a notional 35 hour week.
It follows that if the matters alleged by the appellants are correct, the respondent would have committed an error and made, at least in some cases, an underpayment of the TSP Loading to the relevant employees.
That said, we are not convinced by the submissions made by counsel for the first appellant. The payslips support an alternative construction, namely that the TSP Loading is calculated on an hourly basis and that the amount paid to the employee is 37.7% of the notional 35 weekly hours, less the hours for which the employee observes the public holiday in accordance with his roster.
We are not in a position to reach a definite conclusion on the matter. The parties should confer with a view to identifying any errors and, if necessary, agreeing on any remedial action to be taken by the respondent.
In the event that the parties are unable to resolve this issue we will grant liberty to apply, and we will delegate the issue to a member of the Full Bench for separate hearing.

Orders

The Full Bench makes the following orders: 1. Leave to appeal is granted. 2. The appeal is upheld. 3. The decision of Stanton C in CFMEU Northern Mining and NSW Energy District v Sunset Power International Pty Ltd trading as Delta Electricity [2017] NSWIRComm 1074 is quashed. 4. On the question of whether the TSP Loading is to be paid when an employee is absent from work on a public holiday, as a result either of: 1. having been directed not to attend for work in accordance with clause 11.23 of the Enterprise Agreement; or 2. taking personal/carer's leave pursuant to clause 19.7 of the Enterprise Agreement, the answer is no. 1. The parties are to confer regarding the quantum of deductions made to the TSP Loading paid to employees as a consequence of the employees' absences on public holidays. 2. Matters 2016/168233 and 2016/168252 are adjourned to 7 December 2018. 3. Liberty is reserved to any of the parties to have the matter re-listed on reasonable notice. 4. If that liberty is not exercised by 7 December 2018 matters 2016/168233 and 2016/168252 will be closed administratively.

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: 22 November 2018

Fair Work Act 1996(Cth)

[1999] NSWIRComm 449

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