Fair Work Act 2009

s.739 - Dispute resolution

Construction, Forestry, Maritime, Mining and Energy Union

Compass Group (Australia) Pty Ltd T/A Compass Group

Alleged dispute about any matters arising under the enterprise agreement and the NES; [s 186(6)]

• [1] This decision concerns an application made by the Construction, Forestry, Maritime, Mining and Energy Union (the Applicant) under s 739 of the Fair Work Act 2009 (Cth) (the Act) for the Fair Work Commission (the Commission) to deal with a dispute about the calculation of superannuation contributions in accordance with the dispute resolution procedure contained in clause 22 of the Compass Group - ESS Offshore Oil and Gas (Woodside FPSOs) Enterprise Agreement 2020 (the Agreement).[1]

[2] The Respondent, Compass Group (Australia) Pty Ltd T/A Compass Group, operates a catering business at sites, including, relevantly, on floating production storage and offloading (FPSO) facilities known as the Ngujima Yin FPSO and Okha FPSO.

• [3] The Respondent and its employees engaged to work on the Ngujima Yin FPSO and the Okha FPSO in the classifications of Chief Cook, Chief Caterer, Relief Chief Cook, Relief Cook, Relief Chief Caterer, Relief Caterer, Cook or Caterer (Employees), are covered by the Agreement. Those same Employees are helicoptered to and from the FPSOs during their swing.[2] The Employees are employed either on a permanent full time or casual basis.

• [4] During 2021 and 2022, six casual Employees had earnings which exceeded the 'maximum contribution base' (MCB) (as that term is in defined in the Superannuation Guarantee (Administration) Act 1992 (Cth) (SGAA) in various quarters during 2021 and 2022.[3]

• [5] The Respondent pays the Employees the Annual Salaries pursuant to clause 13 of the Agreement and the Casual Daily/Hourly Rate pursuant to clause 7 of the Agreement based on the hours of work and rosters, pursuant to clauses 10 and 11 of the Agreement.[4]

[6] The Respondent makes superannuation contributions on behalf of the Employees and has applied the MCB where the six Employees have earnt above the MCB in certain quarters during 2021 and 2022.

The Company shall make superannuation contributions, on behalf of its employees, in accordance with the provisions of the Superannuation (Guarantee) Administrations Act 1992, except that such contributions will be 14% of an employee's Annual Salary or Casual Daily/Hourly Rate.

[8] The Respondent's position is that on a proper construction of clause 12.1 of the Agreement, the Respondent has correctly paid the Employees their superannuation contributions under the Agreement. This, in part, is because clause 12.1 of the Agreement operates to limit the superannuation contribution entitlements per quarter in accordance with the Superannuation Guarantee (Administration) Act 1992 (Cth) (SGAA), by reference to the MCB in the SGAA.

[9] The Applicant however argues that the 'Annual Salary' is defined in clause 13 and the Respondent is required to make superannuation contributions on earnings that are specific to the Agreement. In this respect, the Applicant asserts that the ordinary meaning and natural reading of clause 12.1 is that contributions will be paid on the employee's Annual Salary without the limitations of the MCB.

[10] It was uncontroversial that: (a) there is a dispute between the parties; (b) the dispute has been properly notified to the Commission; and (c) the requirements of the dispute settlement procedure have been complied with. Furthermore, based on the characterisation of the dispute, it is evident that the Commission has jurisdiction to deal with the dispute.

[11] The parties propose that the dispute can be characterised in the following question:

Does clause 12.1 of the Agreement exclude the operation of the MCB such that [the Respondent] is not permitted to limit the superannuation contributions payable on behalf of the Employees to the MCB per quarter in accordance with the SGAA?

[12] The Applicant submitted that the 'Annual Salary' is defined in clause 13 and it is clear that the Respondent is required to make superannuation contributions on earnings that are specific to the Agreement. This is particularly the case, argued the Applicant, when one considers the ordinary meaning and natural reading of clause 12.1. The Applicant again pressed that the clause provided for contributions to be made on the Annual Salary without the limitations of the MCB.

• [13] Regarding the first sentence of clause 12.1, the Applicant observed that it expressly requires the Respondent to make superannuation contributions in accordance with the SGAA. The Applicant submitted that reading this plainly, it is clear that all provisions of the SGAA apply, including any reference to the MCB prescribed by s 19(3) of the SGAA. In support of that contention, the Applicant replied upon the judgment of the Federal Circuit Court in Whitt v Clough Projects (Whitt).[5]

[14] Turning to the phase '...except that', the Applicant contended that the use of the phrase excludes any provisions pertaining to what follows in the clause, that is provisions of the SGAA apply except for contributions.

[15] In respect of the phrase, 'such contributions will be 14% of an employee's Annual Salary', the Applicant stated that this latter part of clause 12.1 replaces the contribution provision with 14% of an employee's Annual Salary.

[16] The Applicant sought to rely upon the Respondent's application in support of the approval of the Agreement (Form F16), the relevant Form F17 - Employer's declaration in support of an application for approval of an enterprise agreement (other than a greenfields agreement) (Form F17) and the Form F18 - Declaration of an employee organisation in relation to an application for approval of an enterprise agreement (other than a greenfields agreement). It did so, it said, for the purpose of providing the history and context concerning clause 12.1 of the Agreement.

• [17] The Applicant acknowledged that where an agreement has a plain meaning, evidence of the circumstances surrounding the making of the agreement is inadmissible.[6] However, where an ambiguity exists in an agreement, the surrounding contexts and evidence will be admissible, including:

(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; and

(c) evidence of matters in common contemplation and constituting assumption.[7]

• [18] The Applicant sought further support from the judgment in King v Melbourne Vicentre Swimming Club Inc,[8] where Wheelahan J emphasised the significance of history and context informing the proper meaning given to words in industrial instruments. The Applicant submitted that his Honour stated:

Part of the context in construing an industrial instrument may, in an appropriate case, be a recognition that the instrument may have been drafted by lay persons with a practical bent of mind, with the consequence that the construction of ambiguous terms should favour a sensible and practical industrial result, shorn of narrow legalism and pedantry.[9]

[19] The Applicant extracted excepts from the Form F17, and the communication that had been issued to employees prior to the vote about 'key features' of the Agreement (10 July Communication):

Clause 12 - superannuation provides for a 14% contribution rate on an employee's Annual Salary or casual daily rate/hourly rate. Contributions will also increase at the same time and percentage as any increase to the minimum contribution rate under the Superannuation (Guarantee) Administration Act 1992.

The Superannuation contribution rate outlined in the agreement will continue to remain 4.5% above the statutory minimum contribution, including in the instance of any raises to the statutory minimum contribution. For example, if the statutory minimum superannuation contribution raises from 9.5% to 10%, the superannuation contribution rate in the agreement will be 14.5%.

[20] The Applicant observed that the 10 July Communication made no reference to the maximum superannuation contribution cap. The Applicant expressed that the employees expected that the Respondent's superannuation contributions would be at 14% of the Annual Salary without the application of the MCB.

[21] The Applicant summarised its position expressing that:

a) the superannuation contribution should have been increased at the same time and percentage as any increase to the minimum contribution rate in the SGAA to ensure that the difference between the minimum rate and the contribution rate under the agreement is maintained i.e. contribution rate of 14% (increased to 14.5% for the 2021/22 year and to 15% for the 2022/23 year); and

b) the abovementioned rate applies on the Annual Salary or Casual Daily/Hourly Rate without applying the (quarterly) MCB cap.

[22] The Respondent identifies that clause 12.1 of the Agreement has two parts:

a) first, it requires the Respondent to make superannuation contributions on behalf of the casual Employees 'in accordance with' the provisions of the SGAA; and

b) second, it provides for a limited change to the SGAA provisions only to the extent set out in the second part of the clause. (Italics the Respondent's emphasis).

[23] The Respondent submits that the ordinary meaning of the language 'in accordance with' is to incorporate into the Agreement the scheme of the SGAA.

• [24] Referring to the Full Court decision in BlueScope Steel (AIS) Pty Ltd v Australian Workers' Union (BlueScope),[10] the Respondent submitted that the Superannuation Guarantee Charge Act 1992 (Cth) (SGCA) imposes a charge on employers who fail to remit the effectively prescribed minimum level of superannuation contribution under the SGAA regime per quarter.[11] The Respondent added that the Full Court in BlueScope explained the SGAA does not require employers to make contributions, but rather imposes a charge on employees who fail to pay the contributions.[12]

[25] The Respondent submitted that an employer calculates the effective minimum level of superannuation contribution according to each employee's 'ordinary time earnings', multiplied by the applicable charge rate percentage (being that specified in column 2 of the table in s 19(2) of the SGAA) for the quarter. In the Agreement, this was referred to as the 'minimum contribution rate' in clause 12.2.

[26] Under s 19(2) of the SGAA, the charge rate percentage for a quarter in the year starting on 1 July 2022 is 10.5%. The charge rate percentage for a quarter in the year starting on 1 July 2021 was 10%.

[27] Section 6 of the SGAA defines 'ordinary time earnings' as follows:

ordinary time earnings, in relation to an employee, means:

(i) earnings in respect of ordinary hours of work other than earnings consisting of a lump sum payment of any of the following kinds made to the employee on the termination of his or her employment:

(B) an unused annual leave payment, or unused long service leave payment, within the meaning of the Income Tax Assessment Act 1997; and

(ii) earnings consisting of over-award payments, shift-loading or commission; or

b) if the total ascertained in accordance with paragraph (a) would be greater than the

maximum contribution base for the quarter - the maximum contribution base.

[28] The Respondent observed that the definition of 'ordinary time earnings' included three important components. First, 'earnings', secondly, 'ordinary hours of work' and thirdly, the MCB.

[29] Citing s 19(4) (formerly s 19(3) of the SGAA), the Respondent noted that this provision provided:

If the quarterly salary or wages base, for an employer in respect of an employee, for a quarter exceeds the maximum contribution base for the quarter, the employer's quarterly salary or wages base to be taken into account for the purposes of the application of subsection (1) in relation to the quarter is the amount equal to the maximum contribution base.

[30] The Respondent submitted that s 19(1) of the SGAA, as referred to in the above extract, applied to determine an employer's individual superannuation guarantee shortfall (if any) for an employee for a quarter, and thus is relevant for calculating the employer's liability (if any) for the charge for the quarter.

[31] The Respondent argued that under the SGAA, the concepts of 'ordinary time earnings' and 'quarterly salary or wages base' are both subject to the (quarterly) MCB. The Respondent pressed that it is clear that the earnings bases under the SGAA are capped at a dollar amount equal to the (quarterly) MCB, for the purpose of calculating superannuation guarantee charge and contribution amounts.

[32] The Respondent submitted that by reason of the language 'in accordance with', the entire scheme under the SGAA as described by the Full Federal Court in BlueScope applies to the Respondent's obligation under the Agreement to make superannuation contributions on behalf of the Employees. In particular, said the Respondent, this included the concept of 'ordinary time earnings', and its components of earning, ordinary hours of work and the MCB. Subject of course, to the second part of clause 12.1, said the Respondent.

• [33] It was the Respondent's view that this interpretation of clause 12.1 gave the words 'in accordance with' the provisions of the SGAA their ordinary or usual meaning and was consistent with the finding in Bannon v Nauru Phosphate Royalties Trust (Bannon).[13]

[34] In Bannon, McDonald J held that the phrase 'pursuant to' the SGAA provisions has the same meaning as 'in accordance with' the SGAA provisions, and that where superannuation entitlements must be 'in accordance with' the SGAA provisions, then the MCB prescribed by s 19(3) of the SGAA (now s 19(4) of the SGAA) applied.

• [35] The Respondent observed that Bannon was followed in Whitt, in which it was found that on a plain and ordinary reading of the superannuation clause in the enterprise agreement in that case, the words 'in accordance with' should be interpreted to mean that all provisions of the SGAA apply, including any reference to the MCB.[14]

[36] The Respondent submitted that the key question in this case is the meaning of the second part of clause 12.1, and the extent to which that part of the clause qualifies or modifies the provisions of the SGAA. Refining the issue further, the Respondent said it was about whether the words 'except that such contributions will be 14% of an employee's Annual Salary or Casual Daily/Hourly Rate' operate to exclude the MCB.

[37] The Respondent's position is that this second part of the clause qualifies and modifies the operation of the SGAA scheme that applies to the making of the superannuation contributions, only as follows:

a) first, it modifies the charge rate to a greater percentage than the statutory minimum charge rate; and

• b) secondly, it clarifies that the 'earnings' component of the ordinary time earnings definition is referrable to the rates in the Agreement, being the 'Annual Salaries' and the 'Casual Daily / Hourly Rate'. These rates are to be used for the 'earnings' component and are consistent with the earnings component in the SGAA because clause 13.2 of the Agreement provides, '[e]xcept as otherwise provided for in the Agreement, the Annual Salaries have been fixed on an "all in" basis.' Similarly, 'earnings' under the SGAA consist of the base rate,[15] and 'over-award payments, shift-loading or commission'.[16]

[38] According to the Respondent, the second part of clause 12.1 does not otherwise modify or exclude the remaining components of the 'ordinary time earnings' definition, namely the 'ordinary hours of work' or the 'MCB', which remain applicable to making superannuation contributions 'in accordance with' the provisions of the SGAA.

• [39] The Respondent stated that the Applicant's position is that the second part of the clause replaces the 'contribution provision'[17] but the Applicant has failed to articulate what provisions of the SGAA are replaced and fails to engage with the scheme of the SGAA and the components of the 'ordinary time earnings' definition.

[40] The Respondent submitted that the second part of clause 12.1 makes no reference to the hours of work on which the superannuation contributions are payable or to the MCB. The Respondent said that this is significant because if the parties had wanted to exclude those components of the 'ordinary time earnings' definition, they could have done so, but they did not.

• [41] The Respondent observed that the Applicant had submitted that if the parties intended for the MCB to apply, wording would have been inserted to expressly include the MCB.[18] The Respondent says that this submission ignores the first part of the clause and notes that there was no need for the parties to expressly include the MCB as it is already included by virtue of the first part of clause 12.1, and the ordinary meaning of 'in accordance with'. The Respondent added that if the parties wanted to exclude the MCB, the Agreement needed to expressly alter the effect of the words 'in accordance with' the provisions of the SGAA in this important respect. It does not.

• [42] The Respondent submitted that in Whitt, the parties chose to modify the 'ordinary hours' component of the 'ordinary time earnings' definition by providing a more beneficial entitlement than under the SGAA. However, the Court found that the remaining components of the ordinary time earnings definition remained applicable, including the MCB. The Respondent says a similar approach should be adopted in the present case.[19]

[43] In its submissions, the Applicant referred to Whitt, as did the Respondent, which observed that Whitt had followed Bannon.

[44] The proceedings in Bannon arose after the Nauru Phosphate Royalties Trust (NPRT) terminated Mr Bannon's employment. Mr Bannon brought a claim for damages for breach of contract in respect of fees he argued he was entitled to by reason of acting as the Secretary and/or Director of 19 subsidiary companies of NPRT in a certain period. In addition, he sought further damages for several unpaid entitlements, one of which was superannuation. NPRT argued that Mr Bannon's entitlement to damages in respect of superannuation was subject to the MCB prescribed by ss 15 and 19 of the SGAA. Justice McDonald observing that NPRT's argument had not been foreshadowed in its defence, nevertheless permitted the contention, because it turned on the question of construction of certain contractual provisions and the SGAA and therefore Mr Bannon was not prejudiced by not having had the opportunity to advance evidence.

[45] Clauses 7 and 8 of sch 2 of Mr Bannon's 2007 contract read:

The Employee's remuneration whilst employed by the Employer will consist of the

7. Superannuation contributions equivalent to 9% of the Employee's base salary and the Employee's entitlements under paragraph 4 of this Schedule 2, pursuant to the Superannuation Guarantee (Administration) Act 1992 (Cth) to a superannuation fund selected by the Employee or, if no fund is chosen by the Employee, to an eligible fund nominated by the Employer;

8. At any time the Employee may request the Employer to pay part of the salary component into the Employee's nominated super fund. This is in addition (sic) the statutory requirement of the Employer's contribution under the Superannuation Guarantee (Administration) Act 1992 and the Superannuation Guarantee Charge Act 1992. Provided that there is no detriment to the Employer in so doing and such payment is permitted by law and deductible to the company then the company will comply with that request. The Employee's salary shall be reduced by the amount of such payment;

• [46] Mr North, on behalf of Mr Bannon, submitted that the phrase in clause 7 'pursuant to the Superannuation Guarantee (Administration) Act 1992 (Cth)' sets the contribution required, not the detriment that may have occurred under the SGAA.[21] The detriment that Mr North was referring to was the cap on contributions prescribed by the MCB. [22]

• [47] His Honour explained that the phrase 'pursuant to' in clause 7 means 'in accordance with'.[23] His Honour observed that superannuation contribution rates prescribed by the SGAA increase over time.[24] Thus, the reference in clause 7 to superannuation contributions equivalent to 9% pursuant to the SGAA, incorporated the prescribed rates in s 19(2) of the SGAA.[25] His Honour stated that properly construed, clause 7 had the effect that:

a) NPRT was required to make superannuation contributions in accordance with the prescribed rates in s 19(2) of the SGAA; and

b) such contributions were subject to the MCB prescribed by s 19(3) of the SGAA.

[48] However, it is important to acknowledge that McDonald J said that his conclusion that NPRT's liability to make superannuation contributions under clause 7 of sch 2 was limited by s 19(3) of the SGAA, had been reinforced by clause 8 of sch 2. That clause conferred upon Mr Bannon the right to request NPRT to pay part of his salary into his nominated superannuation fund:

...This is in addition (sic) the statutory requirement of the Employer's contribution under the Superannuation Guarantee (Administration) Act 1992 and the Superannuation Guarantee Charge Act 1992.[26]

• [49] His Honour explained that the 'statutory requirement of the Employer's contribution' is a reference to the MCB under ss 15 and 19 of the SGAA.[27] His Honour found that the fact that clause 8 operates by reference to the maximum superannuation base (presumedly through reference to the SGAA) pointed strongly to the conclusion that the reference to the SGAA in clause 7 referred to both the prescribed contribution rate in s 19(2) and the prescribed contribution base in s 19(3).

[50] In Whitt, the issue for determination concerned the interpretation of clause 3.11 of the Clough Projects Pty Ltd Onshore and Offshore Greenfields Agreement 2014 (Clough Agreement) and whether the superannuation entitlements of Mr Whitt, a former rigger for Clough Projects Pty Ltd (Clough Projects), were limited by the MCB as determined in the SGAA.

[51] In his application, Mr Whitt claimed that Clough Projects had failed to pay him his superannuation entitlements according to clause 3.11 of the Clough Agreement. Clause 3.11 read as follows:

Employer funded superannuation contributions will be made in accordance with the Superannuation Guarantee (Administration) Act 1992 (the SGAA) into a fund nominated by the Employee that complies with the SGAA. Where the Employee does not nominate a fund, the superannuation contributions will be made to CBUS which is a MySuper Product compliant fund. Contributions will be paid on the Employee's ordinary time earnings based on their Ordinary Hours (Onshore Employees) or Customary Work Hours during the On Duty Period, including travel time paid for Mobilisation and Demobilisation Travel Day (Offshore Employees). For the purposes of this clause, the Ordinary Hours for Onshore Employees is an average of up to 38 hours per week.

An Employee may elect to salary sacrifice part of their ordinary gross wage into their superannuation fund subject to any arrangements being in accordance with legislative requirements and the Employee being liable for any Fringe Benefits Tax or other tax liabilities. The Employee must notify the Company in writing utilising the appropriate Company forms for this purpose and a maximum of two changes to the salary sacrifice arrangements will be permitted in each calendar year unless otherwise agreed by the Company.[28]

[52] Judge McNab noted that the MCB is determined by s 15 of the SGAA and an employer, according to s 19(3) of the SGAA, is not obligated to pay more than the MCB. His Honour set out s 19(3) of the SGAA, which provides:

If the total salary or wages paid by an employer to an employee in a quarter exceeds the maximum contribution base for the quarter, the total salary or wages to be taken into account for the purposes of the application of subsection (1) in relation to the quarter is the amount equal to the maximum contribution base.[29]

[53] Mr Whitt argued that clause 3.11 of the Clough Agreement did not make reference to the MCB and therefore the superannuation contributions were not subject to the MCB.

• [54] His Honour first observed that separate to clause 3.11, the SGAA does not require employers to make contributions; the SGAA and SGCA impose a charge on employers who fail to remit the prescribed minimum level of superannuation contribution - as explained by the Full Court in BlueScope (see [13] and [25]).[30]

[55] Reference was made in Whitt to the judgment in Bannon. Mr Whitt argued that the approach adopted by McDonald J should not be followed as the employment contract and the Agreement were quite different instruments and that the interpretation contended by Clough Projects required the parties to have knowledge of the SGAA.

[56] His Honour in Whitt expressed his view in the following terms:

[36] the line in clause 3.11 that states '[...] superannuation contributions will be made in accordance with the [...]', includes a reference to the maximum contribution base prescribed by s 19(3) of the SGAA. This interpretation gives the phrase 'in accordance with' work to do. Clause 3.11 was negotiated by parties familiar with negotiating industrial instruments, familiar with the provisions of the SGAA and the legislative and administrative schemes surrounding superannuation. Had the parties intended that the contributions not be subjected to the consequences or effect of particular provisions of the SGAA, the parties could have excluded those provisions by particular reference.

[35] The first sentence of clause 3.11 must be read with the third sentence of the clause which fixes the earnings the contributions are to be paid on. The first and third sentence of clause 3.11 state:

Employer funded superannuation contributions will be made in accordance with

the Superannuation Guarantee (Administration) Act 1992 (the SGAA) into a fund nominated by the Employee that complies with the SGAA . [...].

Contributions will be paid on the Employee's ordinary time earnings based on their Ordinary Hours (Onshore Employees) or Customary Work Hours during the On Duty Period, including travel time paid for Mobilisation and Demobilisation Travel Day (Offshore Employees).

[37] I accept that the expression 'ordinary time earnings' has a different meaning to "earnings". Where clause 3.11 necessitates the making of contributions in accordance with the SGAA, the definition of 'ordinary time earnings' in section 6 of the SGAA is therefore taken to be referred to in clause 3.11 given that 'ordinary time earnings' is not otherwise defined in the Agreement.

[37] This interpretation is consistent with the parties making contributions 'in accordance with' the SGAA. To ignore the definition of 'ordinary time earnings' in section 6 of the SGAA would

mandate an interpretation contrary to the provision of that Act.

[38] Where the expression 'ordinary time earnings' is used in a clause which prescribes the contributions to be made 'in accordance with' the SGAA, the adoption of the definition of 'ordinary time earnings' as set out in the SGAA is appropriate.

[39] It follows that when the statutory definition of 'ordinary time earnings' (as defined in section 6 of the SGAA) is read alongside clause 3.11 of the Agreement, the effect is that the superannuation contribution to be paid to the applicant (as an Offshore Employee) is paid on:

a) the applicant's earnings 'based on their Customary work hours' including

b) if the total payment as determined in accordance with (a) (above) would be

greater than the maximum contribution base for the quarter, then the employee

[40] This reading is consistent with a requirement make payments 'in accordance with' the SGAA.

[57] It is against the backdrop of these judgments that the Applicant calls upon the Commission to interpret clause 12.1 of the Agreement. The dispute is of limited compass, confined to the question of whether:

clause 12.1 of the Agreement excludes the operation of the MCB, such that [the Respondent] is not permitted to limit the superannuation contributions payable on behalf of the Employees to the MCB per quarter in accordance with the SGAA?

[58] The relevant principles for interpreting an enterprise agreement are uncontroversial. In James Cook University v Ridd, the Full Court of the Federal Court expressed them in the following terms:

(i) The starting point is the ordinary meaning of the words, read as a whole and in context (City of Wanneroo v Holmes [1989] FCA 369; (1989) 30 IR 362 at 378; City of Wanneroo v Australian Municipal, Administrative, Clerical and Services Union [2006] FCA 813; (2006) 153 IR 426 at [53]; WorkPac Pty Ltd v Skene [2018] FCAFC 131; (2018) 264 FCR 536 at [197]);

(ii) A purposive approach is preferred to a narrow or pedantic approach - the framers of such documents were likely to be of a "practical bent of mind" (Kucks v CSR Ltd (1996) 66 IR 182 at 184; Shop, Distributive and Allied Employees' Association v Woolworths SA Pty Ltd [2011] FCAFC 67 at [16]; WorkPac Pty Ltd v Skene [2018] FCAFC 131; (2018) 264 FCR 536 at [197]). The interpretation "turns upon the language of the particular agreement, understood in the light of its industrial context and purpose" (Amcor Ltd v Construction, Forestry, Mining and Energy Union [2005] HCA 10; (2005) 222 CLR 241 at [2]);

(iii) Context is not confined to the words of the instrument surrounding the expression to be construed (City of Wanneroo v Australian Municipal, Administrative, Clerical and Services Union [2006] FCA 813; (2006) 153 IR 426 at [53]). It may extend to "... the entire document of which it is a part, or to other documents with which there is an association" (Short v FW Hercus Pty Ltd (1993) 40 FCR 511 at 518; Australian Municipal, Administrative, Clerical and Services Union v Treasurer of the Commonwealth [1998] FCA 249; (1998) 82 FCR 175 at 178);

(iv) Context may include "... ideas that gave rise to an expression in a document from which it has been taken" (Short v FW Hercus Pty Ltd (1993) 40 FCR 511 at 518);

(v) Recourse may be had to the history of a particular clause "Where the circumstances allow the court to conclude that a clause in an award is the product of a history, out of which it grew to be adopted in its present form ..." (Short v FW Hercus Pty Ltd (1993) 40 FCR 511 at 518);

(vi) A generous construction is preferred over a strictly literal approach (George A Bond & Company Ltd (in liq) v McKenzie [1929] AR (NSW) 498 at 503-504; City of Wanneroo v Australian Municipal, Administrative, Clerical and Services Union [2006] FCA 813; (2006) 153 IR 426 at [57]), but "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" (City of Wanneroo v Holmes [1989] FCA 369; (1989) 30 IR 362 at 380);

(vii)Words are not to be interpreted in a vacuum divorced from industrial realities but in the light of the customs and working conditions of the particular industry (City of Wanneroo v Holmes [1989] FCA 369; (1989) 30 IR 362 at 378-379; WorkPac Pty Ltd v Skene [2018] FCAFC 131; (2018) 264 FCR 536 at [197]).[31]

• [59] The Agreement in question covers the Respondent, Compass Group Remote Hospitality Services Pty Ltd, and the employees engaged in classifications referred to in clause 13 of the Agreement.[32]

[60] Clause 13 of the Agreement sets out the 'Annual Salaries'. It states:

13.1 The following Annual Salaries will be payable to full time employees from first pay period after the dates below:

Relief Chief Cook/Cook Relief Chief Caterer/Caterer

13.2 Except as otherwise provided for in the Agreement, the Annual Salaries have been fixed on an "all in" basis.

13.3 A full time employee shall be paid the Annual Salary divided by 26 each fortnight. Annual Salaries will be paid on the day nominated by the Company by electronic funds transfer into an account of the employee's choice.

13.4 Where it is necessary to calculate a Day Rate or Hourly Rate for a full-time employee, the calculation will be as follows:

13.5 Each employee pay slip will show the employee's Facility, Annual Salary, gross pay, deductions, net pay, leave taken, annual leave balance, allowances, employer superannuation contributions, and employer superannuation contributions.

13.6 Unless the Company is otherwise required to do by law, no deductions shall be made to an employee's Annual Salary unless prescribed in the Agreement, or by written agreement with the employee.

[61] Clause 7 of the Agreement set outs some terms and conditions for casual employees. Included is the 'Casual Day Rate' which equals the 'Annual Salary/365 x 2.8' and a 'Casual Hourly Rate' which is the 'Casual Day Rate/12'. Both casual rates include casual loading and are paid in satisfaction of annual leave, personal/carer's leave, notice of termination, redundancy pay and private health insurance.

[62] Returning to clause 12.1 of the Agreement, it states:

The Company shall make superannuation contributions, on behalf of its employees, in accordance with the provisions of the Superannuation (Guarantee) Administrations Act 1992, except that such contributions will be 14% of an employee's Annual Salary or Casual Daily/Hourly Rate.

[63] However, given the nature of the dispute, clause 12 of the Agreement warrants setting out in its entirety:

12.1 The Company shall make superannuation contributions, on behalf of its employees, in accordance with the provisions of the Superannuation (Guarantee) Administration Act 1992, except that such contributions will be 14% of an employee's Annual Salary or Casual Daily/Hourly Rate. Contributions will be made to any complying fund nominated by the employee, or, by default, to Maritime Super. This meets in full the Company's obligations for superannuation contributions, death and total and permanent disablement contributions and salary continuance.

12.2 Any increase to the minimum contribution rate under the Superannuation (Guarantee) Administration Act 1992 will result in an equivalent increase to the contribution rate stipulated in clause 12.1 to ensure that the difference between the minimum rate and the contribution rate under this Agreement is maintained.

12.3 The Company shall forward all Company and employee contributions including additional salary sacrifice amounts to the fund on a monthly basis.

12.4 A full time employee may elect to salary sacrifice part of their Annual Salary and have that nominated amount paid into their superannuation fund. The amount that may be sacrificed is limited to the maximum allowed by superannuation legislation. Contributions will be fully vested and will have to be preserved in accordance with the Superannuation Industry (Supervision) Act 1993 regulations. The nominated amount of the salary sacrifice may be varied only twice per year.

12.5 A salary sacrifice arrangement will apply to an employee while an employee is on leave and during on and off duty periods, however, for the purposes of redundancy and payment in lieu of notice, the full Annual Salary will be used.

12.5 Salary sacrifice to the superannuation fund is on the basis that it remains cost neutral to the Company. Accordingly, if at any time, there are material changes in taxation or superannuation laws, practices or rulings that materially alter the benefit to the employee of an election to salary sacrifice or the cost to the Company of acting in accordance with the election, either the employee or the Company may, upon one month's notice in writing, terminate the election.

[64] Before examining clause 12.1 in detail, it is important to set out some common understandings regarding the provision of superannuation under legislation.

• [65] The SGAA imposes a charge on employers who fail to remit the effectively prescribed minimum level of superannuation contribution under the SGAA regime per quarter.[33]

[66] An employer calculates the effective minimum level of superannuation contribution according to each employee's 'ordinary time earnings', multiplied by the applicable charge rate percentage (being that specified in column 2 of the table in section 19(2) of the SGAA) for the quarter. In the Agreement, reference is made to the 'difference between the minimum rate and the contribution rate'. The 'minimum rate' at clause 12.2 refers to the minimum contribution rate.

[67] Under section 19(2) of the SGAA, the charge rate percentage for a quarter in the year starting on 1 July 2022 is 10.5%. The charge rate percentage for a quarter in the year starting on 1 July 2021 was 10%.

[68] Under the SGAA, s 6 defines ordinary time earnings in the following terms:

ordinary time earnings, in relation to an employee, means:

(i) earnings in respect of ordinary hours of work other than earnings consisting of a lump sum payment of any of the following kinds made to the employee on the termination of his or her employment:

(B) an unused annual leave payment, or unused long service leave payment, within the meaning of the Income Tax Assessment Act 1997; and

(ii) earnings consisting of over-award payments, shift-loading or commission; or

b) if the total ascertained in accordance with paragraph (a) would be greater than the

maximum contribution base for the quarter - the maximum contribution base.

[69] Clause 12.1 is unambiguous in its terms and therefore the extrinsic materials filed have not been relied upon. However, were it necessary to reflect on extrinsic documentation for the purpose of determining whether the Agreement was ambiguous or for resolving an ambiguity, I do not consider that such material would have assisted.

• [70] Clause 12.1 sets out that the Respondent has a positive obligation to make superannuation contributions on behalf of its employees. It is required to do so 'in accordance' with the provisions of the SGAA. The word 'accord' simply means 'to be in correspondence or harmony'.[34] 'Accordance' speaks of agreement and conformity.[35] The meaning attributed to the phrase is not discordant with judgments of the Federal Court and other jurisdictions, where the phrase 'in accordance with' has been considered akin to 'in harmony with'.[36]

[71] The Respondent is therefore obliged to make superannuation contributions in accordance with the provisions of the SGAA, with there being one exception.

[72] The exception is expressly referred at clause 12.1 of the Agreement. That exception is that the rate of the superannuation contribution is 14% of an employee's Annual Salary or Casual Daily/Hourly Rate. It is observed that in this respect there are two modifications to the SGAA. The first is the percentage rate of superannuation contribution and the second is that the superannuation contribution is calculated on the Annual Salary or Casual Daily/Hourly Rate instead of on 'ordinary time earnings' as provided in the SGAA.

[73] In the absence of the exception, the rate of the superannuation contribution in the Agreement would not differ to that provided in the SGAA. However, the inclusion of the exception now affords employees covered by the Agreement a more favourable percentage rate when compared to the percentage set out in s 19 of the SGAA.

[74] That this part of clause 12.1 is to be interpreted in the manner so described, is further reinforced by clause 12.2. Whilst clause 12.1 expressly provides for a more favourable rate of superannuation in comparison to the percentage charge rate in the SGAA, clause 12.2 obliges the Respondent to increase that rate (14%), equivalent to the percentage increases to the charge rate under the SGAA. Had the Agreement not referred to this obligation in clause 12.2, the advantage afforded by clause 12.1 of a more favourable contribution rate may have diminished as the statutory charge rate under s 19 of the SGAA increased each year.

[75] Clause 12.1 further modifies the operation of the SGAA by clarifying that the 14% is of an employee's 'Annual Salary or Casual Daily/Hourly Rate' rather than adopting the term the 'ordinary time earnings', a term that is used in the SGAA.

[76] The definition of 'ordinary time earnings' in clause 6(a) of the SGAA includes the concepts of 'earnings', 'ordinary hours of work' and thirdly, the MCB. However, essentially, s 6 of the SGAA splits the definition of 'ordinary time earnings' into two subsections, such that ordinary time earnings in subsection (a) means the employee's earnings in respect of ordinary hours of work, over-award payments, shift loading or commission, and in subsection (b) it is the MCB if the total earnings in (a) exceeds the MCB.

• [77] That the 'Annual Salary or Casual Daily/Hourly Rate' replaces only s 6(a) and not both ss 6(a) and (b) is manifestly evident by the turn of phrase '14% of an employee's 'Annual Salary or Casual Daily/Hourly Rate'. The 'Annual Salary or Casual Daily/Hourly Rate' is consistent with the earnings component in s 6(a) of the SGAA because clause 13.2 of the Agreement provides, '[e]xcept as otherwise provided for in the Agreement, the Annual Salaries have been fixed on an 'all in' basis.' Similarly, and as noted, 'earnings' under the SGAA consist of the base rate,[37] and 'over-award payments, shift-loading or commission'.[38]

[78] The Respondent contends that the second part of clause 12.1 does not otherwise modify or exclude the remaining components of the 'ordinary time earnings' definition, namely the 'ordinary hours of work' or the MCB, which remain applicable to making superannuation contributions 'in accordance with' the provisions of the SGAA. However, I do not entirely agree with this proposition, and by way of observation only, provide the following reasons regarding the 'ordinary hours of work'.

• [79] The reference to 'Annual Salary or Casual Daily/Hourly Rate' in the second part of clause 12.1, is a reference to clause 13 of the Agreement which sets out the Annual Salaries payable to full time employees and to clause 7 of the Agreement which sets out the terms and conditions of 'Casual Employment'. Turning first to clause 13 of the Agreement, clause 13.3 provides that a 'full time employee shall be paid the Annual Salary divided by 26 each fortnight'. Clause 10 of the Agreement provides the hours of work, which are stated to be normally 12 hours per day and are inclusive of meal breaks for a full-time employee. Further, a full-time employee is not entitled to additional payment for time worked in excess of 12 hours if the time worked is for one of the reasons specified in clause 10.3(a)-(b). Similarly, clause 7 of the Agreement refers to a casual employee typically being engaged for no less than 12 hours per normal rostered shift and paid in accordance with the formula: Annual Salary/365 x 2.8.[39] In circumstances where the casual employee works additional hours, they receive a 'Casual Hourly Rate' which is the 'Casual Day Rate' divided by 12.

• [80] The 'ordinary time earnings' definition in s 6 of the SGGA refers to earnings in respect of 'ordinary hours of work'. However, the Annual Salary or Casual Daily/Hourly Rate is not expressly referrable to the concept of 'ordinary hours of work'. The Annual Salary is clearly premised on a 12 hour shift or is in respect to a 12 hour shift. Whilst the Agreement is to be read and interpreted in conjunction with the National Employment Standards,[40] this does not import into clauses 13, 12 or 7 that the Annual Salary is referrable to 'ordinary hours of work' for the purpose of determining the superannuation contribution. The 14% contribution rate is premised only on 'Annual Salary or Casual Daily/Hourly Rate', which incorporates a 12 hour shift, not ordinary hours of work. It is therefore not the case, as contended by the Respondent, that the second part of clause 12.1 does not otherwise modify or exclude the remaining component of the 'ordinary time earnings' definition, in this respect.

[81] However, the Agreement does not otherwise modify or exclude the remaining component of the 'ordinary time earnings' definition in s 6(b) of the SGAA, namely the reference to the MCB. The Agreement is silent on this point with no express modification to the operation of the SGAA. It follows that whilst s 6(a) is not applicable, s 6(b) of the SGAA remains applicable to making superannuation contributions 'in accordance with' the provisions of the SGAA.

• [82] The Respondent observed that the Applicant had submitted that if the parties intended for the MCB to apply, wording would have been inserted to expressly include the MCB.[41] The Respondent is correct when it says that this submission ignores the first part of the clause and notes that there was no need for the parties to expressly include the MCB as it is already included by virtue of the first part of clause 12.1, and the ordinary meaning of 'in accordance with'.

[83] The parties framed the question before the Commission in the following terms:

Does clause 12.1 of the Agreement exclude the operation of the MCB such that [the Respondent] is not permitted to limit the superannuation contributions payable on behalf of the Employees to the MCB per quarter in accordance with the SGAA?

[84] Briefly stated the answer to the question is, 'No'. The words 'except that such contributions will be 14% of an employee's Annual Salary or Casual Daily/Hourly Rate' do not operate to exclude the MCB.

[5] [2019] FCCA 3457, [13] (Whitt).

[6] Kentz Pty Ltd v Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia [2017] FWCFB 2600, citing Australasian Meat Industry Employees Union v Golden Cockerel Pty Ltd [2014] FWCFB 7447; (2014) 245 IR 394, 414 [41] (Golden Cockerel).

[8] [2020] FCA 1173.

[10] [2019] FCAFC 84; (2019) 270 FCR 359, 366 [13], 368 [25] (BlueScope).

[13] [2018] VSC 532 (Bannon).

[15] Superannuation Guarantee (Administration) Act 1992 (Cth) s 6 (definition of 'ordinary time earnings' para (a)(i)) (SGAA).

[16] Ibid s 6 (definition of 'ordinary time earnings' para (a)(ii)).

[17] Applicant's Outline of Submissions, [10].

[18] Respondent's Outline of Submissions, [32].

[23] See J A Simpson and E S C Weiner (eds), The Oxford English Dictionary (Clarendon Press, 2nd ed, 1989), 887;

Mercantile Mutual Life Insurances Co Ltd v Australian Securities Commission (1993) 112 ALR 463, 477.

[31] [2020] FCAFC 123; (2020) 278 FCR 566, 580-1 [65].

[33] In BlueScope (n 10) at 366 [13] and 368 [25], the Full Court explains the legislative regime of the SGAA and that it does not require employers to make contributions, but rather imposes a charge on employees who fail to pay the contributions.

[34] Macquarie Concise Dictionary (5th ed, 2009).

[36] Whitt (n 5) [36]; Mount Barker Properties Ltd v District Council of Mount Barker [2001] SASC 249; (2001) 80 SASR 449, 461 [24].

[37] SGAA (n 15), s 6 (definition of 'ordinary time earnings' para (a)(i)).

[38] Ibid s 6 (definition of 'ordinary time earnings' para (a)(ii)).

[41] Respondent's Outline of Submissions, [33].

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