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[2020] FWC 1389
respondent. Applications dismissed. The Commission held employees covered by the Agreement are entitled to the clause 11.1(iii) increases only to the extent that those increases bring their salary to the...
The Fair Work Commission decided that clause 11.1 of the ANAO Enterprise Agreement must be read with Attachment A. The Agreement shows the increases in Attachment A, and the 2% items in clause 11.1 only explain timing and calculation. Attachment A sets maximum pay points for each classification. The Agreement does not give employees a right to be paid above those maxima; earlier full payments to some employees were inadvertent. Therefore employees paid above the Attachment A maximum are entitled only to increases up to the maximum, not 2% on top of their current above‑maximum salary. The applications by the union and Ms Cully were dismissed (see [34]–[39]).
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3 cited instruments linked from this judgment.
1,810 words · generated 10/08/2026
This case concerned the interpretation of clause 11.1 of the Australian National Audit Office (ANAO) Enterprise Agreement 2016–2019. The Community and Public Sector Union (CPSU), and an individual employee, Ms Ruth Cully, sought Commission clarification under s.739 of the Fair Work Act 2009 about whether employees whose existing salaries exceeded the maximum pay points in Attachment A of the Agreement were nevertheless entitled to the 2% salary increases specified in clause 11.1 to be paid on top of their existing salaries.
Key factual background (extracted from the Agreed Statement of Facts) was that on 21 April 2018 the ANAO paid a further 2% salary increase to ANAO employees covered by the 2016 Agreement, but excluded 21 employees. Earlier in April 2018 the ANAO had written to a group of employees advising that their salaries had historically been paid above the pay ranges in Attachment A and that they would not receive a full 2% increase on 21 April 2018; some affected employees entered Individual Flexibility Agreements (IFAs) to deal with their pay arrangements. The union and Ms Cully argued that clause 11.1 was plain and entitled all covered employees to the 2% rises as specified by the clause, irrespective of whether their existing pay exceeded Attachment A maxima. The ANAO argued that the increases applied only as shown in Attachment A, meaning they operate up to the maximum pay point for each classification; earlier payments of increases in 2016 and 2017 to employees paid above the maxima were inadvertent.
The Commission convened conferences, received an Agreed Statement of Facts, and heard the matter on 13 June 2019. Deputy President Kovacic delivered the decision on 16 March 2020, dismissing the applications and holding that clause 11.1 has a plain meaning that points to Attachment A, and Attachment A's top pay points are the maximum salaries payable under the Agreement (see [8], [32]–[35], [39]).
The decision rests principally on textual construction and the application of the Fair Work Commission's established approach to interpreting enterprise agreements, as distilled from the Full Bench decision known as Berri (quoted and adopted at [29] and applied at [30]).
Analytic steps leading to the result:
Starting point, ordinary meaning: The Commission began with the ordinary meaning of the words in clause 11.1, as required by Berri. Clause 11.1 states "the salary increases under this Agreement are as shown in Attachment A and are as follows ... (i) 2% ... (ii) 2% ... (iii) 2% ..." (see [8], [32]).
Reading clause and attachment together: The Commission observed that Attachment A expressly sets out pay points and shows the increases at the various specified dates. Clause 11.1's roman numerals simply explain the quantum and timing; they do not, on their own, create an alternative mode of payment that operates independently of Attachment A (see [32], [34]).
Plain meaning vs ambiguity: Having found a plain meaning in the words (clause 11.1 pointed to Attachment A), the Commission held that surrounding circumstances or extrinsic evidence could not be used to contradict that plain language (Berri principle 9, applied at [34]).
Attachment A maxima as contractual ceiling: The Commission gave meaning to the presence of the words 'minimum' and 'maximum' in clauses 12.1 and 12.4 and the absence of reference to existing salaries above the Attachment A maxima. These textual signals supported the interpretation that Attachment A sets the maximum pay point for each classification under the Agreement and that there is no general contractual entitlement to payment beyond those maxima (see [33], [35]).
Treatment of prior payments and post‑agreement conduct: The Commission examined documentary evidence (A‑11 and A‑13) and concluded prior full payments of increases to some higher-paid employees resulted from inadvertence rather than a shared contractual understanding. Under Berri, post‑agreement conduct can be relevant only when it shows a consensus or meeting of minds; inadvertence does not suffice (see [29], [36]).
Limited weight to extrinsic documents not known at bargaining: The union relied on a costing document (A‑25). The Commission treated it as of little weight because the CPSU was not aware of it at the time of bargaining, thus failing the Berri test for admissible objective background facts known to both parties (see [37]).
On that basis the Commission concluded that the Agreement does not entitle employees to be paid beyond the maximum specified in Attachment A; the clause 11.1 increases apply only to the extent they bring an employee's pay up to the Attachment A maximum (see [34]–[39]).
Before: The relevant legal framework for construing enterprise agreements was set by Berri ([2017] FWCFB 3005), which established a structured approach emphasising ordinary meaning, context, legislative setting, the limited role of extrinsic evidence, and cautious use of post‑agreement conduct (principles quoted at [29]). Prior practices or predecessor agreements could be relevant only as objective background facts known to both parties.
After: This decision applies Berri's principles to a straightforward dispute about how increases in an enterprise agreement interact with pay point tables. It reaffirms that where agreement language is plain, the instrument controls and extrinsic materials cannot be used to create rights inconsistent with its text. It also emphasises that post‑agreement payments resulting from employer inadvertence do not create a contractual entitlement.
Practically, the decision clarifies that:
Clause 11.1 text (paragraph [8]):
Holding that clause 11.1 has a plain meaning (paragraph [34]):
Maximum pay point as ceiling (paragraph [35]):
Prior payments were inadvertent (paragraph [36]):
Conclusion (paragraph [39]):
This decision is directly applicable where:
The decision is less likely to assist where:
As this deep dive is limited to the judgment text, the decision records reliance on and application of Berri and cites other Fair Work decisions (e.g., Khayam, Stephenson, Bastian Pulle) as authorities or analogous authorities ([17], [27], [29]). The decision itself applies Berri rather than distinguishing or overruling it (see [29]–[30]). Any later treatment by other courts or tribunals is outside this document and would require separate research.
Evidentiary thresholds for 'objective background facts': The decision treats A‑25 as of little weight because the CPSU did not know of it during bargaining (see [37]). Unresolved is how strong the evidence must be that both parties actually knew and relied upon a background document before it will alter construction under Berri principle 12(iii).
Scope and effect of post‑agreement conduct: While the decision holds inadvertent payments do not create entitlements, there may be borderline cases where sustained, consistent employer practice coupled with employee acquiescence could amount to a 'meeting of minds'. The precise evidential mix required to prove consensus remains fact‑sensitive.
Interaction with statutory determinations: The Auditor‑General signalled an intent to make a s.24(1) Public Service Act determination to "ensure that the excess pay does not continue" (email quoted at [20]). How such executive or statutory determinations interact with contractual entitlements under an enterprise agreement (and the Commission's interpretive scope under s.739) may raise issues in other fact patterns.
IFAs and bespoke arrangements: The decision notes IFAs and clause 12.1(iii) can preserve higher pay, but it leaves open the extent to which a series of IFAs or an organisational practice of routinely negotiating IFAs could be treated, in aggregate, as altering the agreement's structure or the reasonable expectations of the bargaining unit.
Consequences for payroll errors and restitution: The Commission observed inadvertence for prior payments but did not address remedies in detail (e.g., recovery, estoppel). Different factual matrices involving reliance, detriment, or representations might lead to different contractual or equitable issues.
This case is a focused application of Berri principles to pay‑scale construction and will be relevant in disputes where a schedule or attachment sets out pay points and raises the question of whether increases apply beyond those tabled maxima.
Note: This is a structured summary and analysis of the Fair Work Commission decision CPSU v ANAO [2020] FWC 1389 and does not constitute legal advice. I can make mistakes. Before you act on, rely on, or use any of this material, get a qualified Australian lawyer to check it.
s.739 - Application to deal with a dispute
Commonwealth of Australia as represented by the Australian National Audit Office (ANAO) T/A Australian National Audit Office (ANAO)
Applications to deal with disputes concerning the interpretation of clause 11.1 of the Australian National Audit Office Enterprise Agreement 2016-2019 - applications dismissed.
[1] On 21 December 2018 the Community and Public Sector Union (CPSU) lodged an application made under s.739 of the Fair Work Act 2009 (the Act) and in accordance with the dispute resolution process of the Australian National Audit Office Enterprise Agreement 2016-2019[1] (the Agreement). The dispute concerned the interpretation of clause 11.1 of the Agreement which deals with salary increases and in particular whether employees whose salary exceeded the maximum salary specified in Attachment A of the Agreement were entitled to be paid the salary increase specified at clause 11.1(iii) of the Agreement.
[2] The CPSU contends that these employees are entitled to be paid the increase whereas the Australian National Audit Office (ANAO - the Respondent) contends that the employees are not entitled to be paid the increase until the salary range specified in the Agreement for their classification catches up to their salary.
[3] The dispute was the subject of conferences convened by the Fair Work Commission (the Commission) on 13 February and 14 March 2019 which failed to resolve the dispute. Directions were issued on 26 April 2019. Among other things, those Directions required the parties to file an Agreed Statement of Facts by close of business on 13 May 2019. The Agreed Statement of Facts between the CPSU and ANAO was filed in accordance with those Directions.
[4] In other developments, on 6 March 2019 Ms Ruth Cully, an ANAO employee, lodged a separate application under s.739 of the Act in respect of the interpretation of clause 11.1 of the Agreement. (Ms Cully and the CPSU are together described as the Applicants.) Ms Cully submitted that she should be paid the full final 2% pay increase consistent with clause 11.1 of the Agreement. Ms Cully did not agree to the abovementioned Agreed Statement of Facts.
[7] The Agreed Statement of Facts deals with a number of issues, including the Agreement and its formation, previous ANAO agreements, events in April 2018 and steps taken to resolve the dispute. The Agreed Statement of Facts included the extract set out below in respect of the events in April 2018. The extract provides an overview of the issues in dispute.
On 21 April 2018 the ANAO commenced to pay a further 2% salary increase to all ANAO employees covered by the 2016 Agreement other than 21 employees.
On 9 April 2018, the Respondent wrote to 18 employees in this group of 21 employees (a de-identified copy of which is A-11).
The Respondent sent this correspondence after an internal review of salaries completed by the Respondent in March 2018 which showed employees receiving salaries greater than the salary range for their classification set out in Attachment A to the 2016 Agreement (a redacted copy of the results of this review is A-12). The redacted copy of the review results replaces information that could identify employees and salary figures with the word and inserts comments in yellow highlight, to explain the redacted information. The amounts in column F have been removed and replaced by a percentage figure for each employee in order to show how much employees were paid over the top of the salary range for their classification set out in Attachment A to the 2016 Agreement without revealing salaries. Except for one example in the spreadsheet, the redacted copy removes individual spreadsheets for each employee, which provided a detailed breakdown of the history of all salaries that the individual employee had received at the ANAO and highlighted in yellow where the employee came to be paid this salary.
Several employees, including Ms Ruth Cully responded to the 9 April 2018 letter.
On 26 April 2018, the Respondent wrote to two of the 18 employees (a de-identified version of which is A-13) who had received the 9 April letter. This correspondence provided an explanation for why they would not receive a 2% salary increase on 21 April 2018. Following the 9 April 2018 correspondence, the Respondent entered into Individual Flexibility Agreements (IFAs) with nine of the affected employees.
Seven of those IFAs varied the 2016 Agreement (as it applied between the Respondent and the executing employee) so as to maintain the salary of the employee party to the IFA above the salary range for their classification set out in Attachment A as provided by cl 11.1 of the 2016 Agreement, until such time as their salary was 'absorbed' by salary increases derived from the 2016 Agreement.
Two of the IFAs varied the 2016 Agreement (as it applied between the Respondent and the executing employees) so as to provide those two employees with salary or conditions that are better than if their salaries were maintained until 'absorbed' by salary increases derived from the 2016 Agreement.
Of the group of 18 employees who received the 9 April 2018 letter, 9 employees were, immediately prior to 21 April 2018, being paid a salary which was less than 2% higher than the salary range for their classification provided by Attachment A of the 2016 Agreement for their classification. These employees received a percentage pay increase which took them to the top of the new salary range for their classification as set out in Attachment A to the Agreement which commenced to apply on that date.
Immediately prior to 21 April 2018 the group of 18 employees who received the 9 April 2018 letter all received a salary which was higher than the salary which was set out in Attachment A of the 2016 Agreement for their classification. In each case this was because they were in one or more of the following four groups of employees.
[8] Clause 11.1 of the Agreement provides as follows:
11.1 Salary increases - the salary increases under this Agreement are as shown in Attachment A and are as follows:
(i) 2% - on commencement of this Agreement;
(ii) 2% - 12 months after commencement; and
(iii) 2% - 24 months after commencement." (Emphasis as per original.)
[9] Below is an extract from Attachment A of the Agreement in respect of the Executive Level (EL) 1/Band 4 classification level.
ATTACHMENT A - ANAO BROADBANDED CLASSIFICATION STRUCTURE /SALARY SCALES
[10] The pay point above the dotted line in the above table is referred to as the "remuneration zone" (see clause 12.5 below).
[11] Also set out below are clauses 10 and 12 of the Agreement which were referred to in the parties' submissions.
10.1 The ANAO broadbanded classification structure is at Attachment A. The ANAO broadband arrangements, including progression criteria, are in accordance with the ANAO Remuneration Model.
10.2 The ANAO broadbanded classification structure has three broadbands, Broadband 1 for APS 1 to APS 3 classifications and Broadband 2 for APS 4 to APS 5 classifications and a training Broadband 3 for APS 3 to APS 4 classification (for Graduates).
12.2 Salary on promotion, advancement through a broadband, or engagement - employees commencing on engagement or promoted or advanced to or within the ANAO:
(i) will be paid at the minimum pay point of the relevant classification level of the salary band; however
(ii) the Auditor-General may approve payment of a higher salary within the ANAO Remuneration Model, after taking into consideration the experience, skills, and qualifications of the employee. Payment above the minimum pay point must be determined and approved prior to completion of all recruitment action.
(iii) where at the time of promotion, advancement, or engagement, an employee salary is set at an incorrect salary within the applicable salary scale, the AuditorGeneral, may determine, in writing, the payment of the correct salary to the employee.
12.3 Temporary movement/assignment between classifications and payment of a responsibility allowance - where the Auditor-General has requested an employee to perform work at a higher classification:
(i) it may be considered as a development opportunity by providing the employee with access to a broader range of experience; but
(ii) where the continuous period of time spent in the higher position is four weeks or longer the Auditor-General will approve payment of a responsibility allowance; and
(iii) time spent in a higher position may be considered as part of the assessment process under the ANAO Performance and Career Development Program.
12.4 Salary advancement - on 1 November each year commencing 1 November 2016, an ongoing employee and non-ongoing employees with twelve months or more continuous service (excluding Graduates and casual employees) who are not already on the maximum pay point applying to his or her current substantive APS classification may advance to the next pay point if the employee:
(i) has in place a performance agreement;
(ii) has been at his or her current ANAO pay point for at least six months; and
(iii) received a rating of Meeting Expectations or above in the prior performance cycle (an equivalent rating of satisfactory if transferred, promoted or engaged by the ANAO).
12.5 For Executive Level employees above the 5th pay point (EL 2) or 3rd pay point (EL 1), movement to a higher pay point (in to the "remuneration zone") is subject to the approval of the Auditor-General and in accordance with the ANAO Remuneration Model."
[12] The CPSU submitted that relevant staff of the Respondent in receipt of salaries greater than the salary ranges outlined in Attachment A of the Agreement should all receive the 2% per annum salary increases specified in clause 11.1 of the Agreement, adding that the ANAO should back-pay relevant employees the full final 2% increase with effect from 21 April 2018. Drawing on the Agreed Statement of Facts, the CPSU further submitted that:
the wording of clause 11.1 of the Agreement had been materially unchanged through four previous enterprise agreements;
• under the 2003 and 2006 ANAO agreements[2] a majority of staff received salary advancement which allowed them to receive salaries greater than the salary range for their classification as specified in the relevant agreement, adding that three remaining employees fell into this group (Group A) and that these employees had received salary increases under subsequent agreements including the first two 2% increases under the Agreement;
• in 2009 a group of employees who were previously covered by an Australian Workplace Agreement (AWA) transitioned off those AWAs and on to the 2009 ANAO agreement[3], adding that two remaining employees fell into this group (Group B) and that these employees had received salary increases under subsequent agreements including the first two 2% increases under the Agreement;
• under the 2009 and 2011 ANAO agreements[4] seven employees received increases in salary which were not reflected in the salary range for their classification as specified in the relevant agreement, adding that this group of employees (Group C) had received salary increases under subsequent agreements including the first two 2% increases under the Agreement;
[13] With particular regard to clause 11.1 of the Agreement, the CPSU contended that the clause was unambiguous and had a plain and ordinary meaning, adding that the clause said that all employees would receive the benefit of the 2% pay rises "as follows" and that the clause went on to outline the dates of the 2% pay rises. The CPSU further contended that the clause distinguished between those pay rises and Attachment A of the Agreement by use of the words "as shown in". This the CPSU posited meant that the clause gave two explanations for the 2% pay rise, i.e. via the roman numerals in clause 11.1 and via Attachment A, submitting that the words "and are shown" in clause 11.1 say Attachment A shows those 2% pay rises for those particular employees paid within those salary ranges. The CPSU further submitted that Attachment A of the Agreement did not exhaust or exclude employees paid above the salary ranges specified in the Attachment from receiving the 2% pay rises specified in clause 11.1 of the Agreement, adding that had the parties wished for those pay rises to exclude groups of employees they could have done so expressly as in clause 12.1(iii) of the Agreement. The CPSU also relied on clauses 12.1 and 12.4 of the Agreement to support its interpretation of clause 11.1 of the Agreement, highlighting that the Agreement and predecessor agreements contained no provision, other than for employees transferring from other agencies, that the higher salaries of employees in Groups A-C would be frozen until their rates of pay increased.
[14] In the alternative, the CPSU submitted that if clause 11.1 was found to be ambiguous regard should be had to the explanatory materials distributed to ANAO employees during the consideration period for the Agreement and the Auditor-General's email of 23 March 2016 to employees[5], contending that the documents were evidence that the prior salary increase arrangements were to continue. To that end the CPSU stated that clause 11.1 of the Agreement had largely been in similar terms in all previous ANAO agreements dating back to 2003 and that past practice was not only relevant to the construction of clause 11.1 but showed that the Agreement continued this practice unchanged.
[15] The CPSU drew on the principles regarding the construction of enterprise agreements as outlined in .
"All staff will carry their individual salary into the new structure and will receive a 4% salary increase"[8];
[18] At the hearing, the CPSU took the Commission to many of the documents attached to the Agreed Statement of Facts and other documents provided to it by the ANAO.[9] Key aspects of the CPSU's oral submissions included that:
the evidence showed that during the consideration period for the Agreement employees were not informed of any changes to how salary increases had previously applied, clause 11.1 of the Agreement was identical to predecessor ANAO agreements from 2003 onwards, the terms of the Agreement did not exclude employees from receiving pay increases and the increases provided for in the Agreement were costed and approved by the APSC on the basis of actual salary and not on the salaries set out in Attachment A of the Agreement;
in circumstances where the Agreement was ambiguous as to how the salary increases applied it was appropriate to have regard to the surrounding circumstances;
the words minimum and maximum which appeared in clauses 12.1 and 12.2 of the Agreement did not appear in either clause 11.1 or Attachment A of the Agreement and were not words of restriction or limitation, noting that clause 12.1 of the Agreement concerned transferring employees as opposed to current employees;
A-25 to the Agreed Statement of Facts should be given weight in resolving the ambiguity in and meaning of clause 11 of the Agreement, acknowledging that while the document was not an objective known fact it was evidence of matters in common contemplation as per principle 12(iii) in Berri; and
the affected employees should be paid the final 2% salary increase under the Agreement.
[19] Key aspects of Ms Cully's submissions included that:
since 2003 successive ANAO agreements had authorised the payment of salary increases that were potentially above the highest pay point for the relevant classification specified in the particular agreements, adding that for this reason the highest pay point listed for each classification did not operate as a ceiling or maximum pay point for relevant employees;
where an ANAO employee or group of employees was not eligible for a salary increase under the relevant agreement, the agreement contained a specific exclusion to that effect;
there was no such exclusion in the Agreement;
the explanatory material provided to her by the ANAO regarding the Agreement did not mention any change to the salary arrangements which had been in place since 2003 for those staff paid above the highest pay point in the relevant agreement;
until April 2018 she had received all salary increases provided for in previous ANAO agreements, including the first two increases under the Agreement;
on 21 April 2018 instead of the 2% pay increase provided for in the Agreement she was paid the equivalent of a 0.49% increase, with this equating to the difference between her existing salary and the highest pay point for an EL 1 employee following the final increase under the Agreement; and
she should be paid the full 2% pay increase consistent with clause 11.1 of the Agreement, the ANAO's advice to employees regarding the Agreement and the customary interpretation and operation of ANAO agreements.
[20] In her reply submissions, Ms Cully reiterated aspects of her earlier submissions and refuted several aspects of the ANAO's submissions. Among other things, Ms Cully contended that:
contrary to the ANAO's contention, clause 10 of the Agreement did not contain any words to the effect that the maximum salary of each ANAO employee covered by the Agreement was the salary set out for that employee's classification in Attachment A of the Agreement;
"A dispute has since been lodged with the Fair Work Commission in regard to pay arrangements for a small number of staff who are being paid outside the agreed pay scales in the Current Agreement. All of the staff who are receiving excess pay had an entitlement to be paid above the salary bands at various points in time ...
The Current Agreement does not specifically allow for these staff to continue receiving pay rises, and it was my intention that those above the salary band would be held at their current pay until such time as the excess pay is absorbed by incremental pay increases. This interpretation of the Current Agreement has been challenged in the Fair Work Commission.
... Regardless of the decision that the Fair Work Commission makes about the Current Agreement, I am seeking to make it clear beyond all doubt that the Determination ensures that the excess pay does not continue into the future ..."[11]
[21] In her oral submissions Ms Cully largely reiterated aspects of her written submissions. In addition, Ms Cully contended among other things that:
clause 12 of the Agreement shed light on the operation of clauses 10 And 11 of the Agreement, adding that the provision provided advice as to what happens or told the ANAO what to do in the normal course of events;
the salary ranges at Attachment A of the Agreement were not an exhaustive list of salaries;
• the draft ANAO Employment Manual[12] provided to ANAO employees during the consideration period for the Agreement stated that the salary increases under the Agreement are as follows - 2% on commencement of the Agreement, 2% 12 months after commencement and 2% 24 months after commencement, adding that the document did not indicate any exclusions to the general pay increases;
[22] The Respondent contended that clause 11 of the Agreement provided that the maximum salary for each ANAO employee covered by the Agreement was the salary set out for that employee's classification and pay point in Attachment A of the Agreement. The Respondent submitted inter alia that its contention was supported by a plain reading of the text of clauses 10 and 11 of the Agreement.
[23] More specifically, the Respondent submitted that the plain meaning of clause 11.1 was that employees covered by the Agreement would receive the salary increases "as shown in Attachment A", with the words "and are as follows" intended to describe those increases set out in each column of Attachment A as opposed to prescribing an independent and alternate right to a salary increase. The Respondent further submitted that the plain ordinary meaning of clauses 10 and 11 of the Agreement was consistent with other provisions of the Agreement, including clauses 4.1 and 7.1 of the Agreement.
[24] The Respondent characterised the CPSU's construction of the clause 11.1 as reading words into the plain language of the provision in a way that required the clause to be rewritten such that it said almost the exact opposite of what it did in fact say. Beyond that, the Respondent disputed several matters relied upon by the CPSU, submitting among other things that:
predecessor agreements did not and could not affect the entitlement of any ANAO employee to salary under the Agreement, adding that an employee's entitlement could only be determined by reference to the terms of the Agreement;
a close inspection of the predecessor agreements relied upon by the CPSU tended to confirm rather than deny the interpretation it (i.e. the ANAO) relied upon in respect of clauses 10 and 11 of the Agreement;
insofar as the evidence established that any of its employees were paid more than the rate specified in Attachment A of the Agreement as a result of salary increases paid to them under the Agreement on 21 April in each of 2016, 2017 and 2018, the only evidence as to why this occurred was documents A-11 and A-13 to the Agreed Statement of Facts which demonstrated that this was because of an oversight by it;
[29] The principles relating to the interpretation of enterprise agreements were set out in Berri as follows:
"[114] The principles relevant to the task of construing a single enterprise agreement may be summarised as follows:
1. The construction of an enterprise agreement, like that of a statute or contract, begins with a consideration of the ordinary meaning of the relevant words. The resolution of a disputed construction of an agreement will turn on the language of the agreement having regard to its context and purpose. Context might appear from:
(i) the text of the agreement viewed as a whole;
(ii) the disputed provision's place and arrangement in the agreement;
(iii) the legislative context under which the agreement was made and in which it operates.
2. The task of interpreting an agreement does not involve rewriting the agreement to achieve what might be regarded as a fair or just outcome. The task is always one of interpreting the agreement produced by parties.
3. The common intention of the parties is sought to be identified objectively, that is by reference to that which a reasonable person would understand by the language the parties have used to express their agreement, without regard to the subjective intentions or expectations of the parties.
4. The fact that the instrument being construed is an enterprise agreement made pursuant to Part 2-4 of the FW Act is itself an important contextual consideration. It may be inferred that such agreements are intended to establish binding obligations.
5. The FW Act does not speak in terms of the 'parties' to enterprise agreements made pursuant to Part 2-4 agreements, rather it refers to the persons and organisations who are 'covered by' such agreements. Relevantly s.172(2)(a) provides that an employer may make an enterprise agreement 'with the employees who are employed at the time the agreement is made and who will be covered by the agreement'. Section 182(1) provides that an agreement is 'made' if the employees to be covered by the agreement 'have been asked to approve the agreement and a majority of those employees who cast a valid vote approve the agreement'. This is so because an enterprise agreement is 'made' when a majority of the employees asked to approve the agreement cast a valid vote to approve the agreement.
6. Enterprise agreements are not instruments to which the Acts Interpretation Act 1901 (Cth) applies, however the modes of textual analysis developed in the general law may assist in the interpretation of enterprise agreements. An overly technical approach to interpretation should be avoided and consequently some general principles of statutory construction may have less force in the context of construing an enterprise agreement.
7. In construing an enterprise agreement it is first necessary to determine whether an agreement has a plain meaning or it is ambiguous or susceptible of more than one meaning.
8. Regard may be had to evidence of surrounding circumstances to assist in determining whether an ambiguity exists.
9. If the agreement has a plain meaning, evidence of the surrounding circumstances will not be admitted to contradict the plain language of the agreement.
10. If the language of the agreement is ambiguous or susceptible of more than one meaning then evidence of the surrounding circumstance will be admissible to aide the interpretation of the agreement.
11. The admissibility of evidence of the surrounding circumstances is limited to evidence tending to establish objective background facts which were known to both parties which inform and the subject matter of the agreement. Evidence of such objective facts is to be distinguished from evidence of the subjective intentions of the parties, such as statements and actions of the parties which are reflective of their actual intentions and expectations.
12. Evidence of objective background facts will include:
(i) 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;
(ii) notorious facts of which knowledge is to be presumed; and
(iii) evidence of matters in common contemplation and constituting a common assumption.
13. The diversity of interests involved in the negotiation and making of enterprise agreements (see point 4 above) warrants the adoption of a cautious approach to the admission and reliance upon the evidence of prior negotiations and the positions advanced during the negotiation process. Evidence as to what the employees covered by the agreement were told (either during the course of the negotiations or pursuant to s.180(5) of the FW Act) may be of more assistance than evidence of the bargaining positions taken by the employer or a bargaining representative during the negotiation of the agreement.
14. Admissible extrinsic material may be used to aid the interpretation of a provision in an enterprise agreement with a disputed meaning, but it cannot be used to disregard or rewrite the provision in order to give effect to an externally derived conception of what the parties' intention or purpose was.
15. In the industrial context it has been accepted that, in some circumstances, subsequent conduct may be relevant to the interpretation of an industrial instrument. But such post-agreement conduct must be such as to show that there has been a meeting of minds, a consensus. Post-agreement conduct which amounts to little more than the absence of a complaint or common inadvertence is insufficient to establish a common understanding."[15]
[30] I adopt those principles in this case.
[31] Drawing on principles 1 and 7 in Berri, the Commission first needs to consider "the ordinary meaning of the relevant words" and determine whether the Agreement "has a plain meaning or it is ambiguous or susceptible of more than one meaning."
[32] To that end I make the following observations regarding clause 11 of the Agreement:
the clause appears in that part of the Agreement titled "Classification Structure and Salary Increases";
the clause states that "the salary increases under this Agreement are as shown in Attachment A" (emphasis added);
the clause goes on to state "and are as follows", identifying three 2% increases - the first on commencement of the Agreement and the remaining two increases 12 and 24 months after commencement; and
the clause does not state that the increases are to be applied to an employee's existing salary.
[33] More broadly, I also note that:
the Agreement does not, except as provided for in clause 12.1(iii) of the Agreement (see below), state that ANAO employees whose current salary exceeds the maximum salary for their classification level specified in Attachment A of the Agreement will not receive salary increases until the relevant salary range in Attachment A catches up;
clause 12.1(iii) of the Agreement which concerns employees transferring from other agencies does however refer to persons whose current salary exceeds the maximum salary for their classification level specified in Attachment A of the Agreement when it states that "the current maximum in the ANAO broadbanded classification structure they may be maintained on their current salary until such time as their salary is absorbed by any ANAO salary increases" (underlining added);
clause 12.4 of the Agreement which concerns salary advancement refers to employees "who are not already on the maximum pay point applying to his or her current substantive APS classification" (underlining added);
"As part of our early preparations for our next enterprise agreement, an audit was undertaken of our current salary arrangements against the ANAO's Remuneration Scales in our current enterprise agreement. The audit has revealed that your salary, ..., has over the intervening period been incorrectly increased in accordance with increases due under various ANAO Enterprise Agreements.
These increases have resulted in an overpayment to you... The ANAO could, but does not intend to recover the overpayment. You will be placed on the top of the [classification] salary range [salary] on 21 April 2018, but you will not receive a 2% pay increase in accordance with our enterprise agreement.
I regret any inconvenience or concern that this error on our part causes you."
[37] As to A-25 to the Agreed Statement of Facts, as previously mentioned the CPSU submitted that while the document was not an objective known fact it was evidence of matters in common contemplation as per principle 12(iii) in Berri. However, in circumstances where the CPSU was not aware of the document at the time of bargaining for the Agreement I consider that little weight can be attached to A-25 as it cannot be "evidence tending to establish objective background facts which were known to both parties" (underlining added) as per principle 11 of Berri.
[38] Finally, I do not consider Ms Cully's contention that the Auditor-General's email to staff of 20 March 2019 in effect acknowledged that there was doubt about the ANAO's interpretation of the Agreement has been made out. When read in its entirety, the email does nothing more than make explicit the Auditor-General's intention to make a determination under s.24(1) of the PS Act which reflects the ANAO's interpretation of clause 11 of the Agreement.
[39] For all the above reasons, I have determined that, as the Agreement does not entitle an employee to payment of a salary beyond the maximum specified in Attachment A of the Agreement for their classification, employees covered by the Agreement are only entitled to the increases at clause 11.1(iii) of the Agreement to the extent that it brings their salary to the maximum specified in the Agreement for their classification. Accordingly, the applications are dismissed.
K. Barlow for the Community and Public Sector Union.
[2] Australian National Audit Office Certified Agreement 2003-2006 (AG824322) and Australian National Audit Office Workplace Agreement 2006-2009 (AC300350)
[3] Australian National Audit Office Enterprise Agreement 2009-2011 (AE873041)
[4] Ibid and Australian National Audit Office Enterprise Agreement 2011-2014 (AE889310)
[8] AE889310 at Attachment A (Footnote 1)
Printed by authority of the Commonwealth Government Printer
CPSU, the Community and Public Sector Union
Australian National Audit Office [2020] FWC 1389
Applications dismissed. The Commission held employees covered by the Agreement are entitled to the clause 11.1(iii) increases only to the extent that those increases bring their salary to the maximum specified in Attachment A for their classification; there is no contractual entitlement to payment beyond Attachment A maxima (see [6], [39]).
[5] The applications were heard together on 13 June 2019. At the hearing, Mr Kristin Barlow, a Legal Officer with the CPSU, appeared for the CPSU, Ms Cully appeared on her own behalf and Mr Craig Rawson, a lawyer with the Australian Government Solicitor, appeared for the ANAO.
[6] For the reasons outlined below, I have determined that, as the Agreement does not entitle an employee to payment of a salary beyond the maximum specified in Attachment A of the Agreement for their classification, employees covered by the Agreement are only entitled to the increase at clause 11.1(iii) of the Agreement to the extent that it brings their salary to the maximum specified in the Agreement for their classification. Accordingly, the applications are dismissed.
[16] In its separate submissions regarding A-25 of the Agreed Statement of Facts the CPSU contended that it was open to the Commission to conclude, based on the document and A-6 to the Agreed Statement of Facts, that the cost of the pay rises provided for in the Agreement was approved by the Australian Public Service Commission (APSC) based upon the costings in A-25. The CPSU further posited that it would be unconscionable and inequitable for the Commission to permit the ANAO to resile from the meaning and cost of clause 11.1 of the Agreement.
[17] The CPSU in its reply submissions disputed several aspects of the ANAO's submissions, submitting among other things that:
the pay scales at Attachment A of the Agreement were not maximum pay points, adding that there were no express words in either clauses 10 and 11 or Attachment A of the Agreement saying they are the maximum upper limit on salaries;
the ANAO's post-Agreement conduct supported its submission that the practice under previous agreements was relevant context to the interpretation of the Agreement;
• drawing on the decision in Saeid Khayam v Navitas English Pty Ltd t/a Navitas English[7], the omission of the footnote at Attachment A of the 2011 ANAO agreement did not remove an entitlement as the footnote noted only an obligation elsewhere in that agreement
− the footnote at Attachment A of the predecessor agreement stated as follows:
however expressed, a salary increase was not a salary;
a plain reading of clauses 10 and 11 of the Agreement should take into account the established meaning of such clauses in the ANAO context, adding that the ANAO did not acknowledge the role of previous agreements in informing a plain reading of the Agreement;
clause 12.1(ii) of the Agreement which provides scope for persons transferring to the ANAO at their classification level to retain a salary higher than the ANAO minimum for that classification supported the view that the pay points listed at Attachment A of the Agreement were not a definitive or exhaustive list of salaries payable to ANAO employees;
• the Auditor-General's email to staff of 20 March 2019[10] regarding his proposed determination under s.24(1) of the Public Service Act 1999 (the PS Act) in effect acknowledged that there was doubt about the ANAO's interpretation of the Agreement.
− By way of background, in his email the Auditor-General advised that the s.24(1) determination would continue the terms of the Agreement for a further three years, referred to the disputes presently before the Commission and stated as follows:
the CPSU correspondence at A-18 and A-20 of the Agreed Statement of Facts demonstrated that the CPSU shared its view about the correct interpretation of clauses 10 and 11 of the Agreement;
contrary to the CPSU's contention, the explanatory materials provided to employees during the consideration period for the Agreement correctly explained how the salary in clause 11.1 of the Agreement applied to staff, adding that there was no evidence of any misleading statement by it to employees about the operation of clause 11.1;
the CPSU's contention that clause 11.1 provided two alternative modes of salary advancement could not be reconciled with the plain ordinary meaning of the words of the clause;
the CPSU's contentions in this case were impossible to reconcile with the plain language of clause 11, entirely unsupported by textual or contextual considerations, completely ignored the available evidence and assumed the existence of evidence it had not identified; and
A-25 to the Agreed Statement of Facts was unknown to the CPSU and therefore could not inform any contextual implications about the intentions of the parties.
[25] The Respondent also rebutted aspects of Ms Cully's submissions, contending inter alia that the fact that it paid 2% salary increases in April 2016 and 2017 to Ms Cully was not evidence that it was obliged to do so under the Agreement.
[26] In summary, the Respondent submitted that both applications should be dismissed.
[27] At the hearing the Respondent commenced by highlighting the principles in Berri relevant to this case. Beyond that, the Respondent submitted inter alia that:
its primary submission was that clause 11 provided that employees' salaries would increase as shown in Attachment A of the Agreement, adding that there was no ambiguity at all in the clause;
the Applicants' submissions essentially made the salary ranges at Attachment A meaningless;
the use of the words 'minimum' and 'maximum' in clause 12 of the Agreement tended to confirm the plain ordinary meaning of clause 11 of the Agreement, i.e. that the Agreement set discreet salary points for each employee covered by the Agreement;
the Applicants' submissions proceeded on a misconception of the statutory context, characterising their submissions as contending that the construction of the Agreement should be informed by the fact that under predecessor agreements employees had access to salary increases which took their salary beyond the salary range specified in the relevant agreement for their classification level;
there was no basis in this case for the Commission to go back and interpret predecessor ANAO agreements;
the Applicants' arguments were not text-based arguments, adding that in substance their cases proceeded on the basis that under predecessor agreements they were entitled to salary increases which took their salary beyond the salary range;
the explanatory material provided to employees during the consideration period for the Agreement did not say that the footnote which appeared in Attachment A of the predecessor agreement had not been included in Attachment A of the Agreement, adding that while the explanation set out in the material was not as fulsome as it might have been it was not misleading and in essence directed employees to read Attachment A;
as to A-25 to the Agreed Statement of Facts, the costings related to a proposed agreement which did not proceed;
there was no evidence before the Commission that the document had been put to or agreed by the APSC;
as to Ms Cully's submissions regarding the Auditor-General's March 2019 email to ANAO employees (see paragraph [20] above), her contention that the email acknowledged the existence of ambiguity regarding clause 11.1 of the Agreement read far more into the words than they could bear;
there was scant documentation showing a meeting of minds in respect of post-Agreement conduct, positing that A-11 and A-13 to the Agreed Statement of Facts if anything pointed to inadvertence with A-18 and A-20 showing that the inadvertence was not entirely one way; and
there was no requirement to have regard to post-agreement conduct in this case as it was only indicative of an error.
[28] In its oral submissions, the Respondent also referred to the decisions in Mathew Stephenson v Senator the Honourable Eric Abetz (Special Minister of State)[13] and Bernard Terence Bastian Pulle v Commonwealth of Australia acting through the Secretary of the Department of Parliamentary Services[14].
clause 12.5 of the Agreement provides that for EL employees movement into the "remuneration zone" is inter alia subject to the Auditor-General's approval;
there is no provision in the Agreement which entitles an employee to payment of a salary beyond the maximum specified in Attachment A for their classification, though an employee could in accordance with clause 7 of the Agreement negotiate an individual flexibility arrangement providing for a salary which differs to those specified in Attachment A (e.g. above the relevant maximum) while transferring employees could seek the Auditor-General's approval under clause 12.1(iii) of the Agreement to maintain their current salary where it exceeds the relevant maximum in Attachment A;
Attachment A sets out the pay points for each classification in the ANAO broadbanded classification structure at four points in time - on agreement, on commencement and 12 and 24 months after commencement; and
Attachment A does not include any footnotes, nor does it specify and/or refer to any salary above the maximum for each classification level.
[34] The Applicants' contend that the increases in clause 11 of the Agreement are to be applied to an employee's existing salary. However, there is nothing in either clause 11 or Attachment A of the Agreement which supports that interpretation, particularly when regard is had to the text of the Agreement viewed as a whole. As noted above, clause 11 states that "the salary increases under this Agreement are as shown in Attachment A and are as follows ...". In my view clause 11 of the Agreement has a plain meaning, i.e. that the salary increases payable under the Agreement are shown in Attachment A. The reference to the three increases of 2% does no more than explain how the increases set out at Attachment A have been calculated and when those increases become payable. In circumstances where the clause has a plain meaning, consistent with principle 9 in Berri, evidence of the surrounding circumstances will not be admitted to contradict the plain language of the agreement. As such, it is not in my view necessary to have regard to predecessor ANAO agreements to interpret clause 11 of the Agreement.
[35] Further, the use of the terms "minimum" and "maximum" in clauses 12.1 and 12.4 of the Agreement, together with the absence of any mention in the Agreement of salaries for existing ANAO employees above those specified in Attachment A supports a finding that the highest pay point for each classification level represents the maximum salary payable under the Agreement for that particular classification. While the absence of any reference to salaries above the maxima specified in the Agreement does not preclude the Auditor-General from paying an employee above the maximum salaries specified in Attachment A of the Agreement, in the absence of any provision in the Agreement entitling an employee to payment of a salary beyond the maximum for their classification there is no obligation for the Auditor-General to do so.
[36] It is not disputed that the ANAO paid the first two increases under the Agreement in full to all employees, including employees whose salary exceeded their maximum specified in the Agreement for their classification. However, having regard to A-11 and A-13 of the Agreed Statement of Facts I am satisfied that this was due to inadvertence on the part of the ANAO. For instance, the template letter as set out at A-11 of the Agreed Statement of Facts reads as follows: