Construction, Forestry, Mining and Energy Union v Hail Creek Coal Pty Ltd

The Court 1 This is an appeal, by leave, from a judgment of a single Judge of the court given on 20 May 2015, in which his Honour made a ruling on a question which arose in a proceeding brought by the appellant, the Construction, Forestry, Mining and Energy Union against the respondent, Hail Creek Coal Pty Ltd. The question concerned the proper interpretation of cl 13.7 of the Hail Creek Agreement 2011 ("the 2011 agreement"), an enterprise agreement approved under Div 4 of Pt 2-4 of the Fair Work Act 2009 (Cth) ("the FW Act"). On 20 February 2015, the primary Judge had ordered, pursuant to r 30.01 of the Federal Court Rules 2011 (Cth) ("the Rules"), that the question be the subject of separate determination. 2 Clause 13.7 of the 2011 agreement provides as follows: Personal Leave Personal leave includes both sick leave and special leave. Notwithstanding this clause, no Employee will have access to less than the personal leave prescribed by the National Employment Standards of the Fair Work Act (Cth) 2009. Sick Leave Employees, other than casuals, have access to paid sick leave on Total Salary when they are unable to work due to illness or injury. Employees are required to let their Manager know as soon as possible when they realise they are unable to attend work. An Employee's Manager may exercise their discretion requiring an Employee to provide a medical certificate or other evidence for any period of sick leave. Where, due to illness or injury, an Employee takes extended sick leave (usually longer than 3 months duration) the Employee's Manager will have the discretion as to whether any further component of salary will continue or be amended in any further payments made. There will be no payment for sick leave upon termination of employment. Special Leave Special leave may be approved for an Employee to provide care to members of their immediate family for whom they have responsibility or for other personal emergencies. Employees may be required to provide evidence of their need for special leave. Employees will be paid their Total Salary for special leave. 3 The controversy before the primary Judge related to the nature of an employee's entitlement under the "sick leave" provisions of cl 13.7, and specifically to the first sentence appearing under that heading. 4 The appellant contended that the sick leave provisions were to be interpreted as follows: The Agreement entitles eligible employees to paid sick leave for the full period of time in which they are unable to work due to illness or injury, save for such circumstances where any such one period exceeds three continuous months duration, in which case any further entitlement to paid sick leave for the period extending beyond that three months shall be at the discretion of the eligible employee's manager. 5 The respondent's contention was as follows: The Agreement entitles eligible employees to paid sick leave for only the period of time up to, but not more than, the employee's entitlement to paid personal leave pursuant to the National Employment Standards ("NES"), namely section 96 of the Fair Work Act 2009, in respect of a period or periods of time in which they are unable to work due to illness or injury. Where an eligible employee takes extended sick leave the employee's manager may at his or her discretion determine: (a) whether such extended sick leave will be paid; (b) if paid, the rate of pay, and the duration of the payment. "Extended sick leave" means sick leave in excess of an employees' entitlement to paid personal leave under the Agreement. 6 For the purposes of the two contentions referred to above, an "eligible employee" was a full-time or a part-time employee of the respondent who was covered by the 2011 agreement, who was unable to work due to illness or injury, who advised his or her manager, as soon as possible, that he or she was unable to work due to illness or injury, and who complied with any request for the provision of a medical certificate. 7 In his judgment of 20 May 2015, the primary Judge ruled that the following was the correct interpretation of the contentious provision: The Agreement entitles eligible employees to paid sick leave for only the period of time up to, but not more than, the employee's entitlement to paid personal leave pursuant to the National Employment Standards ("NES"), namely section 96 of the Fair Work Act 2009 (Cth), in respect of a period or periods of time in which they are unable to work due to illness or injury. Where an eligible employee takes extended sick leave the employee's manager may at his or her discretion determine: (a) whether such extended sick leave will be paid; (b) if paid, the rate of pay, and the duration of the payment. The eligible employee's sick leave entitlement must be paid on total salary as that term is defined in the Agreement. Where, as a matter of discretion, the employee's manager grants to an eligible employee a period of extended sick leave, that extended sick leave will be paid on total salary for a period of at least three months with the amount of pay, if any, for any further extended sick leave being at such rate as the employee's manager may determine. "Extended sick leave" means sick leave in excess of an employee's entitlement to paid personal leave under the Agreement. 8 In the present appeal, the appellant challenges the correctness of that interpretation, and submits that the interpretation for which it contended at first instance is the correct one. 9 Before considering the merits of the appeal as such, we propose to say something about the procedure which was adopted at first instance in the present case. In its Originating Application filed on 29 August 2014, the appellant alleged that the respondent had contravened ss 340, 346 and 352 of the FW Act by taking adverse action against many of its employees (depending upon the nature of the action alleged, up to 16 employees in the case of certain allegations). Some of the allegations under s 340 related to what was said to have been the taking of personal leave pursuant to cl 13.7 of the 2011 agreement. Pleadings were subsequently filed in relation to these allegations. 10 On 31 October 2014, by leave, the appellant filed an Amended Originating Application, the amendment being the inclusion of an allegation of a contravention of s 50 of the FW Act constituted by refusing to allow six named employees to have access to personal leave in accordance with cl 13.7 of the 2011 agreement. At the same time, an Amended Statement of Claim was filed. It contained allegations as to the amount of personal leave under cl 13.7 which each of the six employees had taken since the commencement of his employment. In the case of five of the employees, it was alleged that they had received correspondence from the respondent stating that their entitlements under cl 13.7 had been exhausted. In the case of all six of them, it was alleged that they had been, in respect of various periods of time, denied access to sick leave under cl 13.7 in circumstances where they were unable to attend work due to illness or injury. 11 Although it was not included within the appeal papers, we were told by counsel for the appellant that an Amended Defence was filed in respect of the Amended Statement of Claim, but that its terms shed no light on how the respondent proposed to answer the appellant's allegations of contraventions of cl 13.7 of the 2011 agreement. We were informed, however, that, from what the appellant originally understood, the respondent took the position that all the periods of an employee's absence from work on account of illness or injury were to be cumulated, and, when a period of three months was reached, the employee's access to non-discretionary sick leave under cl 13.7 was exhausted. By contrast, the appellant's position was that the three-month limitation for which cl 13.7 provided applied to each unbroken period of absence (such that, for example, an employee's return to work after an absence of, say, six weeks would reset the clock, entitling him or her to access another three-month period of leave if the qualifying conditions were satisfied). We were further informed, however, that, at some point in the course of the litigation, it became clear that the respondent's underlying position was that an employee had no entitlement to personal leave, including sick leave, at all under cl 13.7: rather than being an entitlement, an employee's access to such leave was, in all instances, dependent on the favourable exercise of a discretion on the part of his or her manager. It was the adoption of that position on the part of the respondent, and its rejection by the appellant, that led to the making of the order under r 30.01 of the Rules on 20 February 2015. 12 In the meantime, so we were informed, the appellant's claims under s 340 (including, we presume, the claims under ss 346 and 352) were settled. At the time of the hearing of the appeal, the only controversy remaining in the case related to the appellant's claims under s 50 in respect of the six named employees to whom we have referred. 13 It was, and remains, common ground that cl 13.7 should be construed against the background of the National Employment Standards ("the Standards") in the FW Act. By s 43(1) of that Act, the main terms and conditions of employment of an employee provided under the Act are those set out in the Standards, and in a modern award, an enterprise agreement or a workplace determination that applies to the employee. By s 44(1), an employer must not contravene a provision of the Standards. This provision (by contrast, for example, with s 50 which provides that a "person" must not contravene a term of an enterprise agreement) shows that the Standards are for the protection of employees. 14 The subject of the interaction between the Standards and an enterprise agreement is covered in Subdiv A of Div 3 of Pt 2-1 of the FW Act. By s 55(1), an enterprise agreement must not exclude the Standards or any provision thereof. But, by s 55(2), an enterprise agreement may include any terms expressly permitted by a provision of Pt 2-2 or by regulations made under s 127 (a provision to which it is unnecessary to refer further). And, by s 55(3), the Standards have effect subject to terms in an enterprise agreement permitted under subs (2). 15 By s 55(5), an enterprise agreement "may include terms that have the same (or substantially the same) effect as provisions of the … Standards". By s 55(6), if an enterprise agreement includes terms permitted by subs (5), to the extent that those terms give an employee an entitlement that is the same as an entitlement under the Standards, those terms "operate in parallel with" the entitlement under the Standards, "but not so as to give the employee a double benefit", and the provisions of the Standards "apply, as a minimum standard, to the award or agreement entitlement." How this provision is intended to operate in practice is the subject of a "Note" to s 55(6), as follows: For example, if the award or agreement entitlement is to 6 weeks of paid annual leave per year, the provisions of the National Employment Standards relating to the accrual and taking of paid annual leave will apply, as a minimum standard, to 4 weeks of that leave. 16 The Standards themselves are set out in Pt 2-2 of the FW Act. Of present interest are the provisions of Subdiv A of Div 7, headed, "Paid personal/carer's leave". The expression "personal/carer's leave" is not defined in the FW Act, but is given content by s 97: An employee may take paid personal/carer's leave if the leave is taken: (a) because the employee is not fit for work because of a personal illness, or personal injury, affecting the employee; or (b) to provide care or support to a member of the employee's immediate family, or a member of the employee's household, who requires care or support because of: (i) a personal illness, or personal injury, affecting the member; or (ii) an unexpected emergency affecting the member. The amount of personal/carer's leave to which an employee is entitled under the Standards is the subject of s 96: Amount of leave (1) For each year of service with his or her employer, an employee is entitled to 10 days of paid personal/carer's leave. Accrual of leave (2) An employee's entitlement to paid personal/carer's leave accrues progressively during a year of service according to the employee's ordinary hours of work, and accumulates from year to year. Additionally, under Subdiv B of Div 7, an employee is entitled to two days' unpaid leave of a kind referred to in s 97(b). 17 In his reasons published on 20 May 2015, the primary Judge commenced by canvassing, at some length, the jurisprudence which has developed over the years on the correct approach to be taken to the construction of an industrial award, agreement or like instrument. His Honour then dealt with a submission made by the appellant that there was a prior "common understanding" as to the meaning of corresponding previous provisions to be found in the Hail Creek Agreement 2003 ("the 2003 agreement") and the Hail Creek Agreement 2007 ("the 2007 agreement"). His Honour found that there was no such common understanding. 18 Turning to the considerations which attracted themselves to the primary Judge with respect to the construction of cl 13.7, his Honour first said that it was a feature of the clause that it did not use the language of "entitlement" which was to be found in other provisions. His Honour said: Clause 13.1, in respect of annual leave uses the expression, "are entitled". Clause 13.3 likewise uses that expression in respect of long service leave. In respect of compassionate leave, clause 13.4 uses the expression "will be entitled". This expression is also to be found in clause 13.5, dealing with parental leave. Clause 13.6, dealing with community service leave, reverts to the expression "are entitled". 19 The primary Judge next referred to the Australian Fair Pay and Conditions Standard, ("the FPC Standard") operating from 27 March 2006 under the Workplace Relations Act 1996 (Cth). He described that standard as having "a wide pervasive operation", prior to which (including when the 2003 agreement was made), there was no pervasive standard as to sick leave or personal leave under federal legislation. The only such minimum standard, in relevant respects, arose under s 10 of the Industrial Relations Act 1999 (Qld) ("the State Act"). 20 His Honour then said: At common law, an employer always had an ability, as a matter of discretion, to grant to an employee sick leave over and above that which was expressly conferred, either by contract, industrial instrument, or legislation. It was put on behalf of the Union that it would be an incongruous construction of clause 13.7 just to afford it a meaning which effectively did nothing more than recite that which was available in any event at common law as a matter of discretion. I do not consider that clause 13.7 is doing just that. It is doing rather more. What it does, firstly, is to put beyond doubt that the rate of pay that an eligible employee will receive when on sick leave taken as a matter of entitlement is "Total Salary" as defined for the purposes of the agreement by clause 7.1 and annexure 1. Secondly, the clause intrudes as to how, in the usual course of events, the employer's discretion possessed at common law will be exercised in respect of sick leave which is granted, as a matter of discretion and beyond entitlement. Such extended sick leave beyond entitlement will, for a period of up to three months, be paid at total salary. Thereafter, the rate of pay, if any further sick leave is granted as a matter of discretion, will also be determined as a matter of discretion. In my view, read in context, clause 13.7 is premised not on unlimited entitlement but, rather, on the entitlement to be found in the National Employment Standards in the Fair Work Act. That means that the entitlements to personal or carer's leave, which includes sick leave as a species, are to be found in Div 7 of Pt 2.2 in Ch 2; in particular, s 96. By the particular express reference in clause 13.7 to "Total Salary", the agreement avoids any dispute as to whether, in terms of sick leave taken as a matter of entitlement, the rate of pay for the employee's ordinary hours of work in the period, the touchstone for which s 99 of the Fair Work Act provides, is to be equated with "Total Salary". 21 The primary Judge said that he was fortified in rejecting the construction promoted by the appellant "by reflecting upon whether that construction would make industrial or commercial sense". After putting to one side, in effect, comparisons with other agreements in the mining industry proffered by the appellant, his Honour said that a construction of cl 13.7 that would give rise to an entitlement to take unlimited sick leave even a very limited time after the employee concerned had commenced his or her employment was not "a sensible industrial or commercial construction". It escaped his Honour how, if such a construction were correct, a company director, faced with the responsibilities that fall on directors under the Corporations Act 2001 (Cth) ("the Corporations Act"), could ever make proper provision for sick leave contingencies in the relevant accounts. By contrast, if the entitlement were limited as proposed by the respondent, it was "readily possible to see how … prudent provision in corporate accounts could be made." 22 Finally, the primary Judge said that he was not completely in agreement with the respondent's proposal. It was necessary to add a further paragraph to the interpretation for which the respondent contended, namely, that commencing "The eligible employee's …" in the interpretation which found its way into the order made on 20 May 2015, reproduced in para 7 above. 23 Central to the proper construction of cl 13.7 of the 2011 agreement is an understanding of its provenance. The legislation which framed the making of the 2003 agreement was very different from that which existed when the 2011 agreement was approved under the FW Act. The 2003 agreement was certified under s 170LT of the WR Act. To have been so certified, that agreement would have been required to pass the "no-disadvantage test": s 170LT(2). It would have passed that test only if it did not "disadvantage employees in relation to their terms and conditions of employment": s 170XA(1). By s 170XA(2) - … an agreement disadvantages employees in relation to their terms and conditions of employment only if its approval or certification would result, on balance, in a reduction in the overall terms and conditions of employment of those employees under: (a) relevant awards or designated awards; and (b) any law of the Commonwealth, or of a State or Territory, that the … [Industrial Relations] Commission … considers relevant. By s 170X of the WR Act, a "relevant award" - … in relation to a person to whom an agreement will apply, means an award: (a) regulating any term or condition of employment of persons engaged in the same kind of work as that of the person under the agreement; and (b) that, immediately before the initial day of the agreement, is binding on the person's employer. There is no need to consider the term "designated award" in s 170XA(2). 24 By s 170LY of the WR Act, a certified agreement prevailed over an award or order of the Industrial Relations Commission to the extent of any inconsistency with the award or order. At the time, as the primary Judge pointed out in his reasons, there was no pervasive federal legislative provision entitling employees generally to sick leave, personal leave or the like. To the extent that entitlements of this kind arose under federal law, and ignoring for the moment the terms of certified agreements themselves, they would have been found in awards made under Div 6 of Pt VI of the WR Act, subject to the limitations arising under s 89A. Leave of the kind presently under discussion was an "allowable award matter" under s 89A(2)(g). 25 As noted above, sick leave entitlements arose under s 10 of the State Act. In relation to employees covered by federal awards and agreements, however, that was subject to s 109 of The Constitution, the operation of which, in relation to certified agreements, was relevantly picked up by s 170LZ(1) of the WR Act, which provided that a certified agreement prevailed over a "State law" and a "State award", to the extent of any inconsistency. 26 It was within this legislative framework that cl 3 of the 2003 agreement made provision as follows: The Agreement is a complete statement of the rights and obligations of Hail Creek and its employees covered by the Agreement. Except for the terms of the staff contracts of employment, this Agreement replaces all other laws, awards and agreements. And cl 4.1 of the 2003 agreement made provision as follows: This Agreement replaces in its entirety all awards, industrial agreements or orders that may apply to Hail Creek and its Employees, now and in the future, including: • The Coal Mining Industry (Production and Engineering) Consolidated Award 1997; • The Coal Mining Industry (Supervision and Administration) Consent Award 1999, Queensland. 27 A series of clauses in section 13 of the 2003 agreement dealt with "staff benefits", namely, annual leave, public holidays, long service leave, compassionate leave, "special leave", parental leave, jury service leave, accident pay, insurance and superannuation. Additionally, cl 13.8, headed "Salary Maintenance", provided as follows: Employees, other than casuals, have access to paid sick leave on Total Salary when they are unable to work due to illness or injury. Employees are required to let their Manager know as soon as possible when they realise they are unable to attend work. An Employee's Manager may exercise their discretion requiring an Employee to provide a medical certificate or other evidence for any period of sick leave. Where, due to illness or injury, an Employee takes extended sick leave (usually longer than 3 months duration) the Employee's Manager will have the discretion as to whether further any component of salary will continue or be amended in any further payments made. There will be no payment for sick leave upon termination of employment. The provenance of cl 13.7 of the 2011 agreement is here clearly to be seen. 28 Two things may be said about the 2003 agreement, in the light of the provisions of the WR Act to which we have referred. First, if an entitlement to sick leave did not arise under cl 13.8, it did not arise at all. Nowhere else in the 2003 agreement was there any suggestion of such an entitlement. Secondly, the effect of cl 3 of that agreement, together with s 170LZ of the WR Act, was that s 10 of the State Act had no application: see Compass Group (Australia) Pty Ltd v Bartram [2007] FCAFC 26; (2007) 239 ALR 262. Neither did any award that might otherwise have applied. 29 Indeed, on appeal counsel for the respondent made it clear that it had been his client's case at first instance that personal leave under cl 13.8 of the 2003 agreement had been wholly a matter of the discretion of the relevant manager, and that no legal entitlement to leave arose under that clause. If leave were granted, of course, there would then have been a legal entitlement to be paid for the time of that leave at "total salary" as defined in that agreement. But it was a fundamental premise of the respondent's position that cl 13.8 had replaced whatever entitlement there may otherwise have been to personal leave with a discretionary system of the kind referred to. Counsel informed us that it had not been the respondent's position that, before the introduction of the FPC Standard, sick leave entitlements arose under s 10 of the State Act. He confirmed that we might deal with the appeal on the basis that the State Act had no relevant application to the circumstances of the case. 30 The operation of s 109 of The Constitution, of s 170LZ of the WR Act and of cl 3 of the 2003 agreement, together with the respondent's acknowledgement as referred to in the previous paragraph, significantly undermines an important element of the implicit reasoning of the primary Judge: that it was not necessary to find the basic entitlement to sick leave in cl 13.8 of the 2003 agreement because that entitlement arose under s 10 of the State Act. The true position was to the contrary: because there was no entitlement arising under s 10 - or, by the operation of cl 3, anywhere else - the only alternative to perceiving cl 13.8 as giving rise to an entitlement would be that there was no entitlement at all. Indeed, as mentioned, that was the position which the respondent urged us to accept. 31 As a matter of the construction of the 2003 agreement, we would regard that as an intuitively improbable position. By s 3 thereof, the principal object of the WR Act was - … to provide a framework for cooperative workplace relations which promotes the economic prosperity and welfare of the people of Australia by: … (b) ensuring that the primary responsibility for determining matters affecting the relationship between employers and employees rests with the employer and employees at the workplace or enterprise level; and (c) enabling employers and employees to choose the most appropriate form of agreement for their particular circumstances, whether or not that form is provided for by this Act; and (d) providing the means: (i) for wages and conditions of employment to be determined as far as possible by the agreement of employers and employees at the workplace or enterprise level, upon a foundation of minimum standards; and (ii) to ensure the maintenance of an effective award safety net of fair and enforceable minimum wages and conditions of employment; and (e) providing a framework of rights and responsibilities for employers and employees, and their organisations, which supports fair and effective agreement-making and ensures that they abide by awards and agreements applying to them …. 32 At least to the extent presently relevant, awards, the subject of the safety net referred to in s 3(d)(ii) of the WR Act, could be made only in the prevention or settlement of industrial disputes. As noted above, sick leave and other forms of personal leave were "allowable award matters" under s 89A(2)(g). The effect of the construction of the 2003 agreement which we are being invited by the respondent to endorse would have been to strip away such safety net award provision as there may have been - and it was made clear on appeal that it may be assumed that there was such a provision applicable in the black coal mining industry in Queensland - in favour of a system in which the granting of leave of that kind was wholly discretionary. Which brings us back to the no-disadvantage test referred to above. Although the administration of that test required the Industrial Relations Commission to work by reference to "the overall terms and conditions of employment", the prospect that that Commission would have countenanced the certification of an agreement which left employees with no entitlement to sick leave at all could not, be taken seriously. In this respect it is noteworthy, that, although the parties relied on much contextual evidence before the primary Judge in their attempts to impress their respective preferred constructions on cl 13.7 of the 2011 agreement, there was no evidence of the application for the certification of the 2003 agreement, nor of what the parties told the Commission about cl 13.8 on that occasion. 33 For those reasons, as a matter of construction, the words in the 2003 agreement "have access to paid sick leave" meant "are entitled to paid sick leave". Any other construction would have left the employees with no relevant entitlement at all, and could not be seriously entertained. 34 In relation to what the 2003 agreement referred to as "special leave", the position was somewhat different. Clause 13.5 provided as follows: Special Leave may be approved for an Employee to provide care to members of their immediate family for whom they have responsibility or for other personal emergencies. Employees may be required to provide evidence of their need for special leave. Employees will be paid their Total Salary for special leave. This language made it tolerably clear, that the taking of special leave was not an entitlement, but was subject to approval. It may be that the view was taken that this would provide scope for greater flexibility in individual cases than a provision which set up an entitlement tied to defined circumstances. There is no present need, however, to speculate on such matters. 35 With the passing of the Workplace Relations Amendment (Work Choices) Act 2005 (Cth), the legislative landscape changed considerably. Under Pt 7 of the WR Act as amended, the FPC Standard was established. By s 172(2), the FPC Standard prevailed over a workplace agreement (such as the agreements with which these reasons are concerned) "to the extent to which, in a particular respect, the [FPC] Standard provides a more favourable outcome for the employee". By s 173, a term of a workplace agreement had no effect "to the extent to which it purports to exclude the [FPC] Standard or any part of it". By s 171(2)(d), one of the "key minimum entitlements of employment" under the FPC Standard was "personal leave". 36 Section 244 of the WR Act as amended contained the following definition of "personal/carer's leave": For the purposes of this Division, personal/carer's leave is: (a) paid leave (sick leave) taken by an employee because of a personal illness, or injury, of the employee; or (b) paid or unpaid leave (carer's leave) taken by an employee to provide care or support to a member of the employee's immediate family, or a member of the employee's household, who requires care or support because of: (i) a personal illness, or injury, of the member; or (ii) an unexpected emergency affecting the member. 37 The entitlement of an employee to personal/carer's leave depended on the leave which was "credited" to him or her. The quantification of that entitlement was the subject of interlocking, and somewhat complex, provisions of Div 5 of Pt 7. By s 246, an employee was entitled to accrue a stated amount of leave every four weeks, and the employer was obliged to credit that amount of leave to the employee. Personal/carer's leave was "cumulative". Under Subdiv D of Div 5, there were notice and documentary conditions attached to an employee's entitlement to take sick leave on a particular occasion. 38 It was in this legislative environment that the 2007 agreement was made and approved as an employee collective agreement under s 340(2) of the WR Act. It was modelled on the 2003 agreement. In place of cl 3 of the 2003 agreement, cl 3 of the 2007 agreement was headed "Purpose", and provided as follows: The Agreement provides a safety net that underpins the terms of the staff contracts of employment of all Employees covered by this Agreement. In place of cl 4.1 of the 2003 agreement, cl 4.1 of the 2007 agreement provided as follows: Upon lodgement of this Agreement with the Office of the Employment Advocate, this agreement replaces all previous Awards and Certified Agreements. The total package of benefits provided in this agreement includes compensation for and excludes the provisions in any award or agreement relating to [a number of matters, not including any form of leave which is presently relevant]. 39 Most of what we have said in para 27 above about section 13 of the 2003 agreement may be applied, at least broadly, to section 13 of the 2007 agreement. There were, however, important changes. No longer were there separate clauses headed "Special Leave" and "Salary Maintenance". Instead, a new cl 13.7, headed "Personal Leave", provided as follows: Personal Leave Personal leave includes both sick leave and special leave. Notwithstanding this clause, no Employee will have access to less than the personal leave prescribed by Division 5 of Part 7 of the Workplace Relations Act 1996. Sick Leave Employees, other than casuals, have access to paid sick leave on Total Salary when they are unable to work due to illness or injury. Employees are required to let their Manager know as soon as possible when they realise they are unable to attend work. An Employee's Manager may exercise their discretion requiring an Employee to provide a medical certificate or other evidence for any period of sick leave. Where, due to illness or injury, an Employee takes extended sick leave (usually longer than 3 months duration) the Employee's Manager will have the discretion as to whether any further component of salary will continue or be amended in any further payments made. There will be no payment for sick leave upon termination of employment. Special Leave Special leave may be approved for an Employee to provide care to members of their immediate family for whom they have responsibility or for other personal emergencies. Employees may be required to provide evidence of their need for special leave. Employees will be paid their Total Salary for special leave. Save for the correction of one obvious typographical error, the "sick leave" provisions of cl 13.7 in the 2007 agreement were identical to the provisions of cl 13.8 in the 2003 agreement. Likewise, save for the removal of the initial capital in the word "leave", where first appearing, the "special leave" provisions of cl 13.7 in the 2007 agreement were identical to the provisions of cl 13.5 in the 2003 agreement. 40 The other change introduced by the 2007 agreement was the introductory passage. Recognising the mandatory effect of the WR Act as amended, the "notwithstanding" sentence was part of this passage. The effect of it, was to make it clear that nothing in cl 13.7 was intended to diminish, or did in fact diminish, the minimum entitlements that arose under the FPC Standard, but that, otherwise, the clause would operate in accordance with its terms. A significant aspect of that sentence is that, in using the formula "have access to", its terminology was consistent with that of the existing provision. Part 7 of the WR Act set out, of course, the "minimum entitlements" (see s 171(1)) of employees, and this formula was, to be understood accordingly. 41 Save to refer to the Standards in place of Div 5 of Pt 7 of the WR Act, cl 13.7 of the 2011 agreement is identical to the corresponding provision in the 2007 agreement. 42 This examination of the provenance of cl 13.7 of the 2011 agreement shows that the explanation for the unusual terminology of "access" is that it was the terminology originally employed in the 2003 agreement. As mentioned above, it was then used to convey the idea of entitlement. As a matter of construction, that idea remained with the provision in 2007 and in 2011. Although the two more recent agreements had to accommodate themselves to the new legislative reality that certain minimum standards could not be excluded by agreement, that was done by the omnibus "notwithstanding" sentence which covered everything without having to pay particular attention to anything. Subject to that, the consistency of terminology points strongly to the conclusion, that no change in meaning, and certainly no diminution of employee entitlements, was intended as the parties moved from one agreement to the next. 43 We agree, with respect, that the use of the "have access to" terminology in cl 13.7 of the 2011 agreement is curious when placed alongside the consistent use of "entitled to", and the like, elsewhere in section 13. But a brief survey of the terms used in this section of previous agreements demonstrates the unwisdom of expecting an instrument such as this to comply with what might, in a commercial or testamentary context for example, be expected in the way of grammatical or terminological consistency. To take section 13 of the 2003 agreement, rights to annual, long service and jury service leave were expressed as entitlements, rights to public holidays were expressed by way of the "recognition" of the days concerned, rights to compassionate leave were expressed by the formula "employees may take …", and parental leave was expressed as something that was "available". Some of these inconsistencies have since been ironed out, but it would, be to prefer form over substance if too much weight were placed upon the particular terminology employed in cl 13.7. Of more importance is what we know about the intent of the provision as revealed in its antecedents. 44 Turning to the other considerations that moved the primary Judge to favour the interpretation of cl 13.7 for which the respondent contended, as noted above his Honour held that it was a purpose of the clause to put beyond doubt that the rate of pay that an employee would receive when on sick leave was "Total Salary" as defined in the agreement. To understand this point, it is necessary to consider what the 2011 agreement means by the term "total salary". It is also relevant to recognise that the payment of blue collar workers by this means, and the description of their remuneration as "salary", marked something of a departure from traditional award-based practices in most industries. We do not know when this was introduced by the respondent, but it is a matter of public record that the structure of remuneration for which the award of 1997 referred to in cl 4.1 of the 2003 agreement, for instance, provided was very different from that for which the agreement itself provided. 45 Clause 7.1 of the 2003 agreement provided as follows: Full-time and fixed term Employees will be paid an annualised salary that includes provision for all penalties, loadings and all other payments or allowances (Total Salary). The Total Salary is comprised of a Role Base Salary, a Market Allowance and a Roster Allowance where applicable. Annexure 1 sets out the salary structure. As noted, Annexure 1 to the 2003 set out the named components of the total salary. The "role base salary" depended on the level at which the particular employee was classified. The "market allowance" was a fixed sum of $15,500 pa was compensation for "all factors and disabilities associated with work at the mine together with a premium for remuneration levels in the coal mining industry." The "roster allowance" depended on the particular shift roster being worked by the employee. 46 As far as we can see, there were no circumstances in which an employee would be entitled to receive only part, as distinct from the whole, of his or her total salary. 47 Clause 7.1 of the 2007 agreement provided as follows: Full-time and fixed term Employees will be paid an annualised salary that includes provision for all ordinary hours averaged over a roster cycle, overtime penalties, loadings and all other payments or allowances (Total Salary). The Total Salary is comprised of a Role Base Salary, a Market Allowance, a Commute Allowance and a Roster Allowance where applicable. Annexure 1 sets out the salary structure. The quantums of salary payable under this Agreement may be varied having regard to the provisions of Clause 7.5. Here there were changes from the 2003 agreement, first, by the introduction of what may have been clarifying words in the first paragraph, and secondly, by the introduction of a "commute allowance". Under Annexure 1, this was compensation for site-based employees for "the time spent away from their normal place of residence." 48 The other change to cl 7.1 introduced in the 2007 agreement was the reference to cl 7.5. That was a new provision which permitted the practice of salary sacrifice. Clause 7.5 included the following: Hail Creek and a full-time or part-time Employee may agree to allow the Employee to sacrifice a portion of his or her pre-tax salary, as set out in Annexure I. For this purpose, an Employee's Total Salary shall be reduced by the amount which the Employee elects to salary sacrifice. The reduced salary and salary sacrifice contributions apply to all periods of paid leave provided by this Agreement. Salary reviews, company superannuation contributions, and termination and redundancy payments, are calculated by reference to the salary as if no salary sacrifice agreement was in place. Under this provision, notwithstanding the terms of cl 13.7, an employee on sick leave or special leave who had entered into a salary sacrifice arrangement would be entitled, during that leave, not to his or her total salary but to that salary reduced by the amount thereof which had been sacrificed. 49 Relevantly to the matter presently under discussion, the terms of the 2011 agreement were indistinguishable from those of the 2007 agreement. 50 From there it is necessary to turn to the relevant provisions of the FW Act. By s 16(1), the expression "base rate of pay" is defined as - … 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. Section 99, which is part of Div 7 of Pt 2-2, provides as follows: If, in accordance with this Subdivision, an employee takes a period of paid personal/carer's leave, the employer must pay the employee at the employee's base rate of pay for the employee's ordinary hours of work in the period. 51 There is a question whether any or all of the market allowance, the commute allowance and the roster allowance for which Annexure 1 of the 2011 agreement provides would be covered by s 16(1)(e) of the FW Act and thus excluded from the base rate of pay for the purposes of s 99. That question is relevant because of his Honour's view that it was a purpose of cl 13.7 to put beyond doubt that an employee on sick leave would receive his or her "total salary". In the context of the 2011 agreement considered in isolation, we agree that that must be considered to be amongst the purposes of cl 13.7. From the terms of s 16 of the FW Act, there is some doubt as to whether the allowances mentioned would be included. 52 But we return to the provenance of cl 13.7. Under the 2003 agreement, it could not have been a purpose of the reference to total salary in cl 13.8 to remove doubt as to the rate of salary at which an employee on sick leave would be paid, the entitlement to the leave as such arising otherwise. There was no entitlement to leave arising save under the 2003 agreement itself. So, although it was undoubtedly then a purpose of cl 13.8 to identify the salary to which the employee on sick leave would be entitled, the perception of that purpose does not compromise the conclusion that it was under cl 13.8 itself that the entitlement to leave as such arose. Neither, does the changed legislative environment with the advent of the 2005 amendments to the WR Act, and subsequently of the FW Act, compromise that conclusion. 53 As to the primary Judge's perception that it was a secondary purpose of cl 13.7 to regulate the rate of salary that was to be paid to an employee on discretionary sick leave beyond the period of statutory entitlement, we are bound to say, with respect, that that consideration goes no further than to beg the question. To the extent that there is no primary entitlement to sick leave under the clause, it does, of course, appear to be uncontroversial that such leave as is granted as a matter of discretion is to be paid at the rate of what the 2011 agreement refers to as total salary. But we do not, with respect, see how that circumstance cuts one way or the other on the constructional issue which was before his Honour, namely, whether an entitlement to sick leave, save as provided under Div 7 of Pt 2-2 of the FW Act, arose under the clause at all. 54 The only other thing we would want to say about the primary Judge's reasons is that the nature and quality of a director's duties under the Corporations Act are considerations too remote from the area of human endeavour presently under consideration to stand as a constructional indicator of any real value. 55 Both at first instance and on appeal, the appellant and, to a lesser extent, the respondent sought to rely on what were described as indications of "context" against which cl 13.7 of the 2011 agreement might legitimately, it was submitted, be construed. Indeed, it was a central plank of the appellant's case on appeal that the primary Judge had erred by paying insufficient attention to these indications. As revealed in his Honour's reasons, the appellant submitted at first instance that, at the time when the 2011 agreement came to be made, there was a "common understanding" between the parties - the respondent and its employees - that cl 13.7 gave rise to an entitlement to sick leave which was not limited in point of time: an entitlement to "unlimited sick leave" as it was said. On appeal, the appellant de-emphasised this notion of a "common understanding", preferring to rely instead on what it described as a "common intention" of the parties who made the 2011 agreement, to be distilled from their words and deeds under the currency of the two previous agreements. 56 However it was expressed, this line of submission on the part of the appellant was based upon evidence such as an employee handbook promulgated by the respondent during the currency of the 2003 agreement, a statement made to a new employee at interview some time in 2005, and exchanges between representatives of the parties during bargaining for the 2011 agreement. It was submitted that the present case was an instance where the court would admit, and would be influenced by, evidence of "the mutual subjective intention of the parties" as disclosed in these events: BP Australia Pty Ltd v Nyran Pty Ltd [2003] FCA 520 at [34]; (2003) 198 ALR 442 at 453. As noted above, the primary Judge received evidence of this nature, but was not assisted by it. It became apparent to his Honour that the parties did not share a "common understanding" about the matter that was controversial in the proceeding. Indeed, from what appears, this may have been a case in which the practice of relying on "largely irrelevant information about the subjective understanding of the individual participants in the dealings between the parties", deprecated by the High Court in Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52 at [35]; (2004) 219 CLR 165 at 177, was deployed. Subject only to what follows, the parties' submissions on appeal have provided no basis for doubting the correctness of the course adopted by his Honour of interpreting cl 13.7 by traditional, wholly objective, methods - methods which would, and which did, qualify according to the well-understood principles articulated by Mason J in Codelfa Construction Pty Ltd v State Rail Authority of NSW [1982] HCA 24 at [22]-[25]; (1982) 149 CLR 337 at 352-353. 57 A specific point made by the appellant on appeal was that the primary Judge did not even refer, in his reasons, to what was said to have been a significant exchange between the bargaining representatives in the context of the negotiations for the 2011 agreement. According to the affidavit of Steven Pierce, an official of the appellant: 18. At one of the early meetings, I advised the Hail Creek representatives that the CFMEU wish to amend the existing sick leave entitlements to an entitlement which: (a) was fixed at 15 days per year; (b) accrued from year to year; (c) was paid out upon the termination of employment; and (d) was capable of being cashed out into an employee superannuation account. After that claim was advanced, Mr Hail responded on behalf of Hail Creek. Mr Hail advised that Hail Creek opposed the claim. Mr Hail said words to the following effect: There is currently an unlimited entitlement. We don't understand why you would want to introduce a limit to 15 days. The company has regularly extended things well beyond the three month period in the agreement. We think the proposal would reduce conditions. 19. The other Hail Creek representative, Mr McDonald, then agreed with what had been said by Mr Hail with respect to the existing entitlement. A member of the appellant employed by the respondent who was present at that meeting, Stephen Gallow, gave evidence to substantially the same effect. Neither Mr Pierce nor Mr Gallow was challenged on the accuracy of their evidence about this exchange. Mr Hall was not called by the respondent. Mr McDonald gave evidence by affidavit, but it did not relate to this subject. 58 With respect to the utility of the evidence of Mr Pierce and Mr Gallow, one possibility should be mentioned at the outset, if only for the sake of putting it aside. Although, in a sense, the exchange referred to demonstrated why the provisions claimed by these representatives were not agreed to by the respondent, neither party suggested that the terms of cl 13.7 should be construed conformably with what had thereby been rejected. The reception of this evidence could not be justified on the basis that it was necessary to expunge the legitimacy of such a construction. The possibility that this evidence was relevant under the exception to which Mason J referred in Codelfa (HCA 24 at [22]-[25]; 149 CLR at 352-353) may, therefore, be discarded. 59 Otherwise, as mentioned above, the appellant relied on BP v Nyran. In that part of the reasons of RD Nicholson J on which the appellant relies, his Honour said (FCA 520 at [33]-[34]; 198 ALR at 542-453): If the language of the contract is "ambiguous or susceptible of more than one meaning" evidence of "surrounding circumstances" is admissible to assist in the interpretation of the contract. The concept of "surrounding circumstances" is to be understood to be a reference to "the objective framework of facts". It will include evidence of prior negotiations so far as they tend to establish objective background facts known to both parties and the subject matter of the contract. It will also include facts so notorious that knowledge of them is to be presumed. Additionally it will include evidence of a matter in common contemplation and constituting a common assumption. From the evidence of that setting the parties' presumed intention may be taken into account in determining which of two or more possible meanings is to be given to a contractual provision. What cannot be taken into account is evidence of statements and actions of the parties which are reflective of their actual intentions and expectations. Objective background facts can include statements and actions of the parties which reflect their mutual actual intentions. That is, evidence of the mutual subjective intention of the parties to a contract may be part of the objective framework of facts within which the contract came into existence. It is the mutuality which makes the evidence admissible. In this passage, RD Nicholson J made an important distinction. Applied to the facts of the present case, the correct position, is that evidence of the exchange between Messrs Pierce, Gallow, Hall and McDonald referred to above was "evidence of statements and actions of the parties which are reflective of their actual intentions and expectations", not evidence as to "the objective framework of facts within which the contract came into existence". The primary Judge was correct to have paid no attention to it in his task of construing cl 13.7 of the 2011 agreement. 60 For reasons given earlier, however, we take the view that his Honour was in error not to have held that, on a proper construction, cl 13.8 of the 2003 agreement provided for an entitlement to sick leave which was not merely discretionary. Had he done so, he would undoubtedly have carried that construction through into cl 13.7 of the 2011 agreement, which was relevantly indistinguishable from its 2003 predecessor. The appeal should, therefore, be allowed. 61 There remains the question of the interpretation which the Full Court itself should give to cl 13.7. We would not adopt that proffered by the appellant, as set out in para 4 above. Although it became apparent only in the course of the oral submissions in reply of counsel for the appellant, to do so would bind the parties to an interpretation which went beyond the scope of the live dispute which was ventilated before the primary Judge and on appeal. The use of the formula "for the full period of time … save for such circumstances where any such one period exceeds three continuous months duration" would foreclose further argument on the matter of the entitlement of an employee who takes sick leave for two periods, each of which is less than three months in duration but which, when added together, represent a total period of more than three months. Even then, to adopt the appellant's interpretation would leave unresolved the matter of the period within which three months' sick leave would be an employee's entitlement: a year, the employee's total period of service, or something else. None of this was the subject of debate before the primary Judge, or on appeal. 62 It may be, with respect to those involved, that this case has become another demonstration of the wisdom of the advice that, save in respect of discrete issues such as the computation of damages, parties to proceedings in the court should exercise caution before urging the adoption of the procedure for which r 30.01 of the Rules provides. Relevantly to the matter arising under s 50 of the FW Act, the case involved claims made on behalf of six employees, each with its own particular facts. One or more of them might conveniently have been taken as a vehicle for the application of cl 13.7 to concrete facts. This would have provided a solid basis for a binding judicial determination of questions of the kind referred to in the previous paragraph; more so, in our respectful view, than the r 30.01 procedure which was adopted. 63 We would limit the order made on appeal to the resolution of the issue whether cl 13.7 of the 2011 agreement entitles an unwell or injured employee to sick leave or, as contended by the respondent, leaves the taking of sick leave to the discretion of management. It was that issue that was actively litigated at first instance and on appeal. We would answer the separate question as follows: Subject to the other provisions of cl 13.7 of the Hail Creek Agreement 2011, the first sentence under the subheading "Sick Leave" in that clause entitles an employee, other than a casual, to be absent from work when he or she is unable to work due to illness or injury, and to be paid for the period of that absence his or her Total Salary as defined in the agreement. I certify that the preceding sixty-three (63) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justices Jessup, Rangiah and White.