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

BROMBERG J: 5 The reasons of O'Callaghan J helpfully set out the factual and procedural background to this appeal, including the relevant provisions of the enterprise agreement. I gratefully adopt those descriptions as well as the abbreviations utilised in those reasons. 6 The appeal raises the interpretation of an enterprise agreement. The applicable principles for interpreting an enterprise agreement were recently recounted by a Full Court in WorkPac Pty Ltd v Skene [2018] FCAFC 131 (Tracey, Bromberg and Rangiah JJ) at [197]: The starting point for interpretation of an enterprise agreement is the ordinary meaning of the words, read as a whole and in context: City of Wanneroo v Holmes (1989) 30 IR 362 at 378 (French J). The interpretation "… turns on the language of the particular agreement, understood in the light of its industrial context and purpose …": Amcor Limited v Construction, Forestry, Mining and Energy Union (2005) 222 CLR 241 at [2] (Gleeson CJ and McHugh J). The words are not to be interpreted in a vacuum divorced from industrial realities (Holmes at 378); rather, industrial agreements are made for various industries in the light of the customs and working conditions of each, and they are frequently couched in terms intelligible to the parties but without the careful attention to form and draftsmanship that one expects to find in an Act of Parliament (Holmes at 378-9, citing Geo A Bond & Co Ltd (in liq) v McKenzie [1929] AR(NSW) 498 at 503 (Street J)). To similar effect, it has been said that the framers of such documents were likely of a "practical bent of mind" and may well have been more concerned with expressing an intention in a way likely to be understood in the relevant industry rather than with legal niceties and jargon, so that a purposive approach to interpretation is appropriate and a narrow or pedantic approach is misplaced: see Kucks v CSR Limited (1996) 66 IR 182 at 184 (Madgwick J); Shop Distributive and Allied Employees' Association v Woolworths SA Pty Ltd [2011] FCAFC 67 at [16] (Marshall, Tracey and Flick JJ); Amcor at [96] (Kirby J). 7 The reference there made to the observations of Kirby J at [96] of Amcor is a reference to his Honour's remarks that the construction to be given to a clause in an industrial instrument "should not be a strict one but one that contributes to a sensible industrial outcome such as should be attributed to the parties who negotiated and executed the Agreement". 8 Before the primary judge Hail Creek's case was that the words "Indicative 45.75 hour week" in the table in item 4 formed an essential element of the roster descriptions given by the table for each of the "7 Day Continuous Shift" and the "7 Day Day Shift" rosters. Hail Creek contended that when it introduced the new rosters and reduced the shift length from 12.5 hours to 12 hours, the rosters for the Affected Employees no longer answered the roster descriptions in the table in item 4; accordingly, each of the new rosters was "a roster not set out in this Annexure" as envisaged by the second paragraph of item 4. In those circumstances, Hail Creek contended that the roster allowances given in the table in item 4 were no longer applicable and the roster allowances for the Affected Employees fell to be calculated under the second paragraph of item 4. As the primary judge stated at [37]: [Hail Creek's] submission involves two propositions, namely: (1) The words "Indicative 45.75 hour week" in the Table form part of the description of each of the rosters contained in the third and fourth items. (2) If employees are rostered for something less than a 45.75 hour week, the roster is "a roster not set out in" the Table. 9 The union's contention before the primary judge was that the only operative and defining feature of the rosters described by the table in item 4 is the description given of the pattern of the roster. The union resisted Hail Creek's contention that the words "Indicative 45.75 hour week" formed part of the description of either the "7 Day Continuous Shift" or the "7 Day Day Shift" rosters. The union contended that as the affected employees continued to work the same roster patterns they continued to work under a roster answering the description of a "7 Day Continuous Shift" or a "7 Day Day Shift" roster. Accordingly, the employees continued to be entitled to the applicable roster allowance set out in the table in item 4 irrespective of the fact that the length of their roster shifts had been reduced by 30 minutes. 10 The primary judge accepted Hail Creek's first proposition (set out above) but not the second. 11 His Honour concluded that the words "Indicative 45.75 hour week" formed part of the descriptions in the table for each of the "7 Day Continuous Shift" and the "7 Day Day Shift" rosters. However, the primary judge rejected Hail Creek's contention that the new rosters did not fall within the roster descriptions given by the table in item 4. That was so because his Honour reasoned that the 30 minute reduction in the rostered shifts under the new rosters was slight and not sufficiently substantial to enable the conclusion that the new rosters did not meet the description "Indicative 45.7 hour week". The primary judge regarded that element of the roster descriptions as establishing a range or span the boundaries of which are defined by the hours specified, rather than an element of the description which fixed a precise prescription of the hours of work required by a roster, in order for that roster to answer the roster description given by the table. That conclusion was a consequence of the condition or qualification imposed by the word "indicative". 12 As a result, the primary judge concluded that Hail Creek had contravened item 4 of Annexure 1 of the enterprise agreement by underpaying the affected employees the roster allowances to which they were entitled. 13 On the appeal, Hail Creek contested the primary judge's rejection of its second proposition. The error of the primary judge was said to be found in the meaning that his Honour attributed to the word "indicative" in the phrase "Indicative 45.75 hour week". By reference to what the primary judge said in the last sentence of [49] of his Honour's reasons, Hail Creek contended that the primary judge incorrectly treated "the word 'indicative' as though it meant that the hours stipulated in the roster description were approximate". That was said to be incorrect because the hours stipulated by a roster are fixed and exact. 14 In my view, Hail Creek's contention involved a mischaracterisation of the primary judge's reasoning. It may be accepted that the hours stipulated by any particular roster will be fixed and exact, however, the primary judge's reasoning concerned a description of a type of roster. The description of a type or category of roster need not be precise and may be given more generally eg. all rosters requiring approximately 45 hours of work a week. 15 As the submission of Hail Creek was developed, it became clear that the fundamental error complained of was that the primary judge construed the word "indicative" in the phrase "Indicative 45.75 hour week" as forming part of the operative description of the "7 Day Continuous Shift" and "7 Day Day Shift" rosters identified in the table in item 4. Contrary to the submission Hail Creek made to the primary judge that the whole phrase "Indicative 45.75 hour week" formed part of the description of each of the relevant rosters, on the appeal, the purport of Hail Creek's submission was that only the words "45.75 hour week" (together with the description of the pattern of the roster) constituted the roster descriptions given by the table. On that construction, the word "indicative" is not to be regarded as an operative part of the roster descriptions, its function being different. In particular, as Senior Counsel for Hail Creek put it: What the word "indicative" does in the table in the roster descriptions, is to reiterate the idea that is set out and described in cl 10.2 when it uses the word "indicative". It's an indication that the actual hours of work may be different to the hours stipulated by the roster descriptions. 16 In this respect, it is necessary to recall the terms of cl 10.2 of the enterprise agreement and, in particular, those terms which I now emphasise: 10.2 Indicative Hours An Employee's Total Salary represents payment for the performance of their role, not for the hours attending work. An indicative number of hours to be worked by a full-time Employee are contained in the roster descriptions in Annexure 1. The Total Salary has been determined on the basis that an Employee may need to work reasonable hours in addition to those hours indicated in Annexure 1 to perform their role. 17 Hail Creek's preferred construction was one of three interpretations of the first column of the table in item 4 put by the parties on the appeal. 18 On Hail Creek's approach, the roster descriptions given in the table have two operative elements - the pattern of the roster (eg. "7 Day Continuous Shift") and the stipulation of the hours of work (eg. "45.75 hour week") unaffected or unconditioned by the word "indicative". 19 On the union's primary approach, the only operative element in each of the roster descriptions given in the table in item 4 is the pattern of the roster. As the union's Notice of Contention stated, "the references to indicative hours … are not an operative part" of the roster descriptions contained in the table in item 4. On the union's primary submission, the indicative hours specified in the first column of the table in item 4 table (eg. "Indicative 45.75 hour week") have not been included as part of the description or definition of the type of roster referred to, but are there to serve the purpose referred to in cl 10.2 of providing a guideline as to whether additional hours required of an employee are reasonable. 20 In the alternative, the union relied upon the construction applied by the primary judge. On that construction, both the pattern of the roster and the indicative hours specified are to be regarded as an operative part of the type of rosters described, with the word "indicative" serving the function of clarifying that the hours specified are intended as an indicative, rather than a precise and fixed prescription, of the hours that may be required to be worked by an employee under a particular roster in order for the roster to fall within the descriptions given in the table. 21 Of the three constructions in contest, Hail Creek's construction is the least attractive. 22 That construction involves taking what, on its face, appears to be a composite expression ("Indicative 45.75 hour week") and breaking it up into two disjointed parts on the basis that each part is directed at a different function. The construction calls for an ungrammatical reading of the text in which the word "indicative" does not condition or qualify the words "45.75 hour week". A non-grammatical construction of that kind ought not to be adopted in the absence of a compelling foundation. No such foundation is here established. 23 There is some force in Hail Creek's contention that, in construing the table in item 4 , regard must be given to cl 10.2 and that the word "indicative" used in the table has a connection with that clause. Clause 10.2 uses the word "indicative" and also "indicated" in the context of identifying that "an indicative number of hours … are contained in the roster descriptions in Annexure 1" and, later, that "those hours" are "indicated in Annexure 1". In that regard it should be noted that nowhere other than the roster descriptions in the table in item 4 are any hours indicated in Annexure 1. 24 However, the force of that submission and the connection upon which it relies, has application to the entirety of the phrase "Indicative 45.75 hour week". The submission serves to bolster the union's primary contention that the entire phrase is referrable to the function that cl 10.2 contemplates and is not part of the roster descriptions. 25 If, in the construction exercise, primacy is to be given to the connection of some or all of the words in the phrase "Indicative 45.75 hour work" with the function contemplated by cl 10.2, the union's primary construction is clearly to be preferred to that of Hail Creek. That is because the connection with cl 10.2 cannot be limited only to the word "indicative". That would make no sense. The nexus must extend to the entirety of the composite phrase in order to provide the indication of hours which cl 10.2 says is provided for in Annexure 1. Additionally, the union's construction is to be preferred because it does not involve violating the composite nature of the phrase in question. 26 The union's primary contention, that the composite phrase serves the cl 10.2 function and does not form an operative part of the roster descriptions, is assisted by the recognition that cl 10.2 is not dealing with rostered hours (as the roster descriptions in the table must be) but dealing with the total hours required of an employee "for the performance of their role". So much is apparent from the terms of cl 10.2 and additionally the terms of cls 7.1, 10.1 and item 2 of Annexure 1. 27 Some further support for the union's primary construction is found in what the union contended was the underlying rationale for the roster allowance apparent from the terms of the enterprise agreement. In that respect, the union contended that the roster allowance was not concerned to compensate employees for the hours rostered or actually worked, but only concerned to compensate employees for the disabilities associated with the working of particular roster patters, principally those associated with night and weekend shift work. To that end, the union noted that the "Total Salary" payable under the enterprise agreement and referred to in item 1 of Annexure 1 has three components - a "Role Base Salary", a "Market Allowance" and the "Roster Allowance". Relying on the terms of item 2 of Annexure 1, the union contended that the Role Base Salary compensated employees for the hours of work they performed. In that context, the union contended that the hours required to be worked by employees would not have been regarded as a relevant criteria for specifying an applicable roster allowance and a specification of weekly hours would not have been included in the table in item 4 with the intent that it be definitional of the types of rosters there dealt with. 28 There are, however, contrary indicators which serve to suggest that the whole of the phrase in question forms an operative part of the relevant roster descriptions. The principal contrary indicator is that the phrase is found in a column headed "Roster", the obvious function of which is to describe four different kinds of rosters. It seems unlikely that a reference, not intended to be descriptive of a kind of roster, would be placed in such a location. 29 That, of course, may be explained by infelicitous drafting. Although what has been done must, given the terms of cl 10.2, be regarded as deliberate. 30 Furthermore, it is not clear that the phrase "Indicative 45.75 hour week" was not intended to have a dual purpose. That is, to serve the function identified by cl 10.2 of providing a guideline as to whether additional hours required of an employee are reasonable, but also and at the same time, provide part of the roster description. On that approach, the primary judge's construction is not erroneous. 31 Ultimately, it is not necessary that I express a final view as to whether the union's primary construction is to be preferred to that of the primary judge which, in any event, the union relied upon in the alternative. On either basis, Hail Creek's construction is to be rejected. On either basis, the enterprise agreement was contravened and the Affected Employees were underpaid. 32 The appeal must be dismissed. I certify that the preceding twenty-eight (28) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Bromberg.

O'CALLAGHAN J: 33 This an appeal against the decision of the primary judge (Construction, Forestry, Mining and Energy Union v Hail Creek Coal Pty Ltd [2018] FCA 125) who found that the appellant (the employer), which operates an open-cut coal mine in central Queensland known as the "Hail Creek Mine", contravened s 50 of the Fair Work Act 2009 (Cth) by failing to pay a number of employees their full salary payable under an enterprise agreement known as the Hail Creek Agreement 2011 (the enterprise agreement). 34 The issue that divides the parties involves the proper construction of particular provisions of the enterprise agreement. As is sometimes the case in matters of this sort, it is apparent that the agreement was not drafted by lawyers. Both parties, being the employer and the respondent (the union), accept that the enterprise agreement contains certain infelicities of expression. Both parties are able to point to particular competing considerations in support of their respective contentions about how the enterprise agreement is properly to be construed. This is a case where, to adopt what Gleeson CJ and McHugh J said in Amcor Limited v Construction, Forestry, Mining and Energy Union (2005) 222 CLR 241, 249 at [12], "[t]here is no logically stringent process of reasoning which requires a construction … that favours either side". 35 For the reasons set out below, on balance, I take a different view to that favoured by the majority and prefer the construction contended for by the employer.

The facts 36 This appeal was conducted on the basis that the relevant facts are those contained in the agreed statement of facts that was before the primary judge. The facts necessary to record here are as follows. 37 Under the terms of the enterprise agreement, the employer may carry on operations at the mine 24 hours per day, seven days per week. This requires that a day shift and a night shift be worked each day. 38 The union and the employer are parties to the enterprise agreement, which was approved by the Fair Work Commission in 2011. 39 The enterprise agreement applies to and covers the employer and those of its employees based at the mine site who work in operator and maintainer roles. Some operators and maintainers are rostered to work day shifts. Others are rostered to work a combination of day and night shifts. 40 On 21 September 2015, the employer implemented changes to the roster patterns for some maintainers and operators by reducing the lengths of their shifts from 12.5 hours to 12 hours. The rostered finishing time for their day shifts was changed from 7pm to 6.30pm, and for night shifts from 7am to 6.30am. Twenty employees' (the affected employees) roster patterns were affected by the changes. 41 The employer then reduced the amount of roster allowance paid to the affected employees. For one group, the amount of roster allowance was reduced by $4,500 per annum and for another group the amount was reduced by $4,200 per annum. 42 Taking the rosters before and after the roster change in turn, the agreed statement of facts provides as follows: Rosters before Roster Change 19. Prior to the Roster Change Affected Employees worked three different types of rosters, specifically: a. a day/night shift lifestyle roster (Day/Night Shift Roster); b. day shift lifestyle roster (Day Shift Roster); or c. 3/1/3/5 roster (3/1/3/5 Roster). Day/Night Shift Roster 20. The Day/Night Shift Roster rotated on the basis of: a. four days of day shift; b. five days off; c. five days of night shift; d. four days off; e. five days of day shift; f. five days off; g. four days of night shift; h. five days off; i. five days of day shift; j. four days off; k. five nights of night shift; l. five days off; m. with any day shift commencing at 6.30am and finishing at 7pm; and n. with any night shift commencing at 6.30pm, and finishing at 7am. 21. The following employees worked the Day/Night Shift Roster: [names omitted]. 22. Prior to the Roster Change the employees working the Day/Night Shift Roster received a Roster Allowance of $33,000 per annum, which was paid in monthly instalments. Day Shift Roster 23. The Day Shift Roster differed from the Day/Night Shift roster in that it did not include any night shifts. The pattern of the shifts however was the same, namely: a. four days of day shift; b. five days off; c. five days of day shift; d. four days off; e. five days of day shift; f. five days off; g. four days of days shift; h. five days off; i. five days of day shift; j. four days off; k. five days of day shift; and l. five days off; and m. with each day shift commencing at 6.30am and finishing at 7pm. 24. The following employees worked the Day Shift Roster: [names omitted] 25. Prior to the Roster Change the employees working the Day Shift Roster received a Roster Allowance of $27,500 per annum, which was paid in monthly instalments. 3/1/3/5 Roster 26. The 3/1/3/5 Roster rotated on the basis of: a. Three day shifts; b. One day off; c. Three night shifts; d. Five days off; e. with any day shift commencing at 6.30am and finishing at 7pm; and f. with any night shift commencing at 6.30pm, and finishing at 7am. 27. The 3/1/3/5 Roster was worked by [name omitted]. 28. Prior to the Roster Change [Name omitted] received a Roster Allowance of $33,000 per annum, which was paid in monthly instalments. 29. All three rosters rotated in such a manner that workers could be rostered on any day of the week including a Saturday or Sunday. 30. The Day/Night Shift Roster and the 3/1/3/5 Roster were 7 Day Continuous Shift rosters within the meaning of clause 4 of Annexure l to the Agreement. 31. The Day Shift Roster was a 7 Day Day Shift roster within the meaning of clause 4 of Annexure 1 to the Agreement. Roster Change 32. On 28 August 2015 the Affected Employees were advised, in an internal memorandum issued on behalf of the Respondent by Rowan Munro, that there would be a transition from 12.5 hour to 12 hour shifts for selected workgroups. 33. On 15 September 2015 the Respondent further advised, also in an internal memorandum issued on behalf of the Respondent by Rowan Munro, that from 1 October 2015 the annual Roster Allowance of: a. the Day/Night Shift Roster employees and the 3/1/3/5 Roster employees would be reduced by $4,500; and b. the Day Shift Roster employees would be reduced by $4,200 (Change in Roster Allowance). 34. On 15 September 2015, one of the Affected Employees … advised his supervisor … that the Respondent's proposal to reduce the roster allowance would be a breach of the Agreement. 35. The Respondent does not accept this assertion. 36. The Change in Roster Allowance took effect on 1 October 2015. 37. The Affected Employees are paid around the 20th of each month. This monthly pay includes payment for time already worked and payment in advance for the remainder of the month. Implementation of the New Roster 38. On 21 September 2015 the Respondent implemented the proposal referred to in paragraph 32 for all Affected Employees. 39. The Roster Change resulted in a change to the Affected Employees shift lengths being reduced from 12.5 hours to 12 hours. To effect this change, the finishing times of each shift in the roster pattern was changed so that each of the Affected Employees would finish their shift 30 minutes earlier. 40. Accordingly, as a result of the Roster Change the finish time for any Affected Employee working a day shift changed from 7pm to 6.30pm, and the finish time for any employee working a night shift changed from 7am to 6.30am. 41. Following the Roster Change the Affected Employees referred to at paragraphs 21 and 27 above worked a new roster which rotated on the same basis set out at paragraph 20.a to 20.1 above. 42. Following the Roster Change the Affected Employees referred to at paragraph 24 above worked a new roster which rotated on the same basis set out at paragraph 23.a to 23.1 above. 43. As was the case before the Roster Change, a day or night shift can be rostered on any day of the week, including a Saturday or Sunday, provided it is consistent with the relevant roster pattern. 44. Not all employees have worked the new rosters at all times since 21 September 2015. If an employee works a shift of 12.5 hours duration, that employee will be paid a Roster Allowance, in accordance with the "7 Day Continuous Shift" roster as provided for in clause 4 of Annexure 1 of the Agreement. 45. [Name omitted] has worked the Day/Night Shift Roster for the following periods: a. 4 December 2015 to 8 December 2015; b. 1 January 2016 to 14 January 2016; c. 4 April 2016 to 7 April 2016; d. 20 May 2016 to 24 May 2016; e. 3 August 2016 to 4 September 2016; f. 19 September 2016 to 22 September 2016; g. 7 October 2016; h. 12 December 2016 to 15 December 2016; i. 18 January 2017; j. 6 February 2017 to 28 February 2017; and k. 24 March 2017 to present. 46. [Name omitted] has worked the Day/Night Shift Roster for the following periods: a. five days in June 2016; and b. 16 December 2016 to 23 March 2017. 47. [Name omitted] has worked the Day/Night Shift Roster on and from May 2016.

The relevant provisions of the enterprise agreement 43 It is convenient now to set out the relevant provisions of the enterprise agreement. 44 Clause 7.1 of the enterprise agreement relevantly provides: 7.1 Full-time and Fixed Term Employees 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. … 45 Clause 7.6 of the enterprise agreement relevantly provides: 7.6 Method of Payment An Employee's Total Salary following adjustment if required for a salary sacrificing arrangement, will be paid monthly into bank accounts of the Employee's choice. … 46 Clause 10.1 of the enterprise agreement relevantly provides: 10.1 Rosters Employees will be required to work the hours that are reasonably necessary to perform their role. Employees may be required to work shifts of up to 12 ½ hours duration. Hail Creek may carry out its operations 24 hours per day, 7 days per week. Hail Creek will implement and change roster systems to meet the needs of the operation and in consideration of the health and safety needs of Employees. Prior to the introduction of any new roster system, Hail Creek will consult with the Employees directly affected, as far as is practicable, and will give prompt consideration to the matters raised by the Employees. Employees may be required to perform a handover for communication and work continuity. Recognition for this requirement is included in the Employee's Total Salary. Employees may be required to change between day shift, shift work, shift work and day work or from one form of shift or shift roster to another. … 47 Clause 10.2 of the enterprise agreement provides: 10.2 Indicative Hours An Employee's Total Salary represents payment for the performance of their role, not for the hours attending work. An indicative number of hours to be worked by a full-time Employee are contained in the roster descriptions in Annexure l. The Total Salary has been determined on the basis that an Employee may need to work reasonable hours in addition to those hours indicated in Annexure 1 to perform their role. 48 Items 1 to 5 of Annexure 1 to the enterprise agreement provide: 1 Total Salary The Total Salary of an Employee will comprise the Role Base Salary applicable to the Employee, the relevant Market Allowance, Commute Allowance and Roster Allowance where applicable. … 2 Role Base Salary An Employee's Role Base Salary includes compensation for additional hours that are worked during employment. An Employee's Role Base Salary will be reviewed annually. Role Category Minimum Role Base Salary Operators $60,000 per annum Maintainers $69,250 per annum

3 Market Allowance This allowance compensates for all factors and disabilities associated with work at the mine together with a premium for remuneration levels in the coal mining industry. Market Allowance on Approval Market Allowance 12 Month After Approval Market Allowance 24 Months After Approval $20,000 per annum $21,000 per annum $22,000 per annum

4 Roster Allowance An Employee's Roster Allowance compensates an Employee for all disabilities and working hours associated with the role, including the requirements of the roster, and work on any shift, weekend or public holiday required as part of the role, but excluding the additional hours incorporated in the Role Base Salary. Where a Roster Allowance needs to be calculated for a roster not set out in this Annexure, the Roster Allowance is to be not less than the extra loadings, penalties and payments provided by the relevant award that are payable for the work envisaged by the roster, calculated on the basis of the weekly rates of pay set by that award, less those amounts already incorporated in the Role Base Salary for compensation for additional hours. During the term of this agreement, roster allowances will be reviewed annually. Roster Roster Allowance eg Monday-Friday $9,625 Indicative 45 hour week Day Shift (incl Public Holidays) eg Monday-Friday Indicative $20,350 45 hour week Rotating Shifts eg 7 Day $33,000 Continuous Shift Indicative 45.75 hour week 7 Day $27,500 Day Shift Indicative 45.75 hour week

(Emphasis added). 5 Commute Allowance This allowance compensates site based employees for the time spent away from their normal place of residence. … Commute Allowance on Approval Commute Allowance 12 Months After Approval Commute Allowance 24 Months After Approval $5,500 per annum $5,750 per annum $6,000 per annum

49 The rosters for the affected employees fell into one or the other of the rosters described in the third and fourth (highlighted in bold) items of the table set out in clause 4 above (the table) before the shift lengths were changed.

The decision of the primary judge 50 The primary judge held that the words "Indicative 45.75 hour week" in item 4 of the table form part of the descriptions of the third and fourth rosters in the table and that if a roster does not answer any of the descriptions in the table, it will be "a roster not set out in this Annexure". 51 He held that although "a substantial reduction in the number of rostered hours would mean that a roster description would no longer meet the descriptions contained in the Table, I do not accept that the same can be said where the reduction in the rostered hours is only slight". The primary judge reasoned as follows: [49] First, the word "Indicative" in the Table is significant … [U]nder the Enterprise Agreement, the number of hours that employees will actually work is uncertain. Thus, the roster cannot specify the number of hours per week of actual work. Instead, only an "indicative" number of hours can be given. In this context, the relevant definition of "indicative" in the Shorter Oxford English Dictionary is "suggestive of". To put it another way, the expression "Indicative 45.75 hour week" in the Table signals that employees are rostered to work approximately 45.75 hours per week, but that they may have to work a reasonable number of additional hours in order to perform their roles. [50] Second, it is quite unlikely that there could have been a mutual intention to allow the Employer to pay substantially less Roster Allowance by making a slight reduction in the rostered hours while still requiring the employees to work the same number of actual hours as before. Even though the shift lengths have been reduced from 12.5 hours to 12 hours, cl 10.1 of the Enterprise Agreement allows the Employer to require employees to work additional hours if these are reasonably necessary to perform their roles. Accordingly, while the Roster Allowance has been reduced by $4,500 per annum for one group of Affected Employees and by $4,200 per annum for another, they may still be required to work the same hours as before. There is no suggestion that the reduction in shift lengths is part of a deliberate strategy by the employer to have the same amount of work done for less money, but the potential for that to happen makes it unlikely that there was a mutual intention that only a slight reduction in the number of rostered hours would mean that a roster description no longer answers the description in the Table. [51] The issue in this case ultimately devolves to an evaluative, factual one. It is whether the reduction in the shift lengths of 30 minutes per shift is so substantial that the rosters no longer answer the descriptions of the third and fourth rosters in the Table. One difficulty is that there has been no explanation offered by the parties as to the correlation between the "Indicative 45.75 hour week" and the shift lengths and number of shifts described in the Statement of Agreed Facts. However, the reduction of the shift lengths by 30 minutes must have resulted in a reduction in the indicative number of hours per week to something below 45.75. That is the premise of the Employer's case. The extent of the reduction in indicative hours is not clear, but it can be inferred that it must have been proportional to the reduction in shift lengths. The reduction of the shift lengths from 12.5 to 12 hours was a reduction of 7%. There must have been a corresponding reduction in the rostered hours per week by 7% to 42.5 hours. [52] In my opinion, a reduction of the rostered hours to 42.5 hours per week is not substantial enough to conclude that the rosters do not meet the description of an "Indicative 45.75 hour week". The reduction did not result in the rosters becoming rosters "not set out in this Annexure". It follows that the calculation of Roster Allowance for the Affected Employees must be done by reference to the Table, and not by reference to the second paragraph of Item 4.

The parties' submissions on appeal 52 The employer relies on a notice of appeal and a notice of contention. The union also relies on a notice of contention. It is not necessary to set out the detail of these documents. Oral argument proceeded on the basis that the question for resolution is: "what is the proper construction and application of clause 4 in Annexure 1 of the enterprise agreement?"

The employer's submissions on appeal 53 Both parties accept that if an employee is working a roster that is set out in Annexure 1, then the employee is entitled to be paid, as a component of their total salary, the prescribed roster allowance in the table in clause 4. 54 Mr Neil SC, who, with Ms J Anderson, appeared for the employer, posed the issue to be decided in these terms: If an employee is not working such a roster, that is, if an employee is not working a roster that is set out in Annexure 1 … but instead is working a roster that is not set out in that table, then the employee is entitled to be paid a roster allowance that is calculated in accordance with the second paragraph in clause 4. When the rosters were changed that posed the question, the critical, determinative question, of whether the new rosters that were being worked by the employees that were the subject of the application were rosters that were set out in Annexure 1, that is, were they rosters that were described in the table that appears at the foot of clause 4. 55 He submitted that the primary judge correctly identified that question at [18], [19] and [36] of the primary judgment. 56 However, Mr Neil submitted that, reading the enterprise agreement as a whole, consistently with principle, one starts with cl 10, not with Annexure 1. Clause 10 is headed "Rosters". Clause 10.1 provides that employees "will be required to work the hours that are reasonably necessary to perform their role" and that they "may be required to work shifts of up to 12½ hours duration". The employer may change roster systems, all of which are based on shifts. But it may only do so subject to what Mr Neil called "constraints", namely the changes must "meet the needs of the operation"; they must be "in consideration of the health and safety needs" of employees; and before any new roster system is introduced, the employer must, "consult with the [e]mployees directly affected, as far as is practicable, and will give prompt consideration to the matters raised by the [e]mployees". Those constraints, so it was submitted, prevent the employer from imposing an arbitrary adjustment of the proportions between rostered and actual hours. 57 It will be recalled that cl 10.2 provides: 10.2 Indicative Hours An Employee's Total Salary represents payment for the performance of their role, not for the hours attending work. An indicative number of hours to be worked by a full-time Employee are contained in the roster descriptions in Annexure l. The Total Salary has been determined on the basis that an Employee may need to work reasonable hours in addition to those hours indicated in Annexure 1 to perform their role. 58 Mr Neil submitted that cl 10.2 introduces "the concept of indicative hours" and that "[r]ead objectively and as a whole, the manifest industrial purpose of clause 10.2 is principally to provide that employees have an obligation to work not only the hours stipulated in the rosters dealt with in Annexure 1, but also what are called reasonable hours in addition to those hours, and also that the employees remuneration comprehends both the stipulated rostered hours and the additional hours". The submission continued: In other words, it tells an employee you will be required to work your rostered hours and sometimes also reasonable hours in addition to your rostered hours, but you will not be paid anymore for working the additional hours because your total salary already compensates you for that, and at the same time, it accommodates the opposite possibility. It accommodates the possibility that, as sometimes happened on the evidence, employees might not always be required to work all of their rostered hours of work. And as to that possibility, it tells employees if you work less than your rostered hours of work, you will nevertheless still be entitled to the same total salary. The overall purpose - so understood, the overall purpose of clause 10.2 is to provide that employees' total salary is not dependent on whether they work more or less than their rostered hours of work. 59 He submitted that the primary judge correctly identified that purpose and its consequences at [31] of the primary judgment. 60 Mr Neil submitted that "[t]he first sentence in clause 10.2 decouples employees' total salary from hours of work. Any hours of work additional to their rostered hours will not attract any additional remuneration because their total salary already comprehends their obligation to work those additional hours". In his submission, the second sentence "is critical because it identifies the roster descriptions in Annexure 1 as the place where the rostered hours of work are stipulated". Read with the second paragraph of cl 10.2 he submits that cl 10 "explicitly and inescapably distinguishes additional hours of work from those hours indicated in Annexure 1. In other words, it explicitly distinguishes rostered hours of work from additional hours of work". 61 He submitted that the primary judge correctly recognised what he called "that critical distinction" at [42] and [45] of the primary judgment. 62 Mr Neil submits that, reading the enterprise agreement as a whole, the next step is to go to cl 2 of Annexure 1. It is headed "Role Base Salary", which cl 2 expressly defines to include "compensation for additional hours that are worked during employment". Mr Neil submits that the concept of "additional hours" that is described in cl 2 is the same concept that is described in cl 10.2. 63 Turning next to cl 4 of Annexure 1, Mr Neil submits that the purpose of the Roster Allowance, as the primary judge correctly recognised at [41] of the primary judgment is to "compensate [e]mployees for all disabilities and [rostered] working hours associated with the role … but excluding the additional hours incorporated in the role-based salary". He submitted that the first paragraph of cl 4 of Annexure 1 includes three material propositions, viz that: (1) the requirements of the roster are expressed to be a subset of the disabilities and working hours associated with the role excluding the additional hours incorporated in the role-based salary; (2) the subject of employees' rosters is, and is only, the hours that employees are rostered to work, exclusive of any hours that they might be required to work in addition to their rostered hours of work ("…excluding the additional hours incorporated in the role-based salary"); and (3) remuneration in respect of employees' obligation to work the additional hours is not comprehended within the roster allowance but instead is expressly a component of the role-based salary. 64 Turning then to the second paragraph of clause 4, Mr Neil submitted that "it deals with two distinct concepts. Explicitly, it deals with the way in which a roster allowance should be calculated for a roster not set out in the Annexure - that is, a roster that is not described in the table, or to use the language of clause 10.2, a roster that is not a 'roster description'. Implicitly, [it] recognises the converse, which relates to a roster that is set out in … the Annexure. In that circumstance, where one has a roster that is described in the table, then the roster allowance is the amount that is stipulated in that table". 65 It is only at that point that Mr Neil submits that one then turns to the table in cl 4 (set out at [16] above) that is the centre of the controversy on this appeal. 66 His first point is that the descriptions under the heading "Roster" are the "roster descriptions" contemplated by cl 10.2. He submitted that "[e]ach roster is described by reference to two features: the first, the pattern, for example, seven day continuous shift and second, the number of rostered hours per week. By describing each roster by reference not just to the pattern but also to the number of hours, the table adopts an industrially conventional approach to the concept of a roster, as the primary judge correctly recognised [at [40]] of the primary judgment". He further submitted that the descriptions of the hours (45 hour week or 45.75 hour week as the case may be) are "indicative number of hours to be worked by [employees] … contained in the roster descriptions in Annexure 1" within the meaning of cl 10.2 and "the rostered hours of duty" referred to in cl 10.3. 67 Mr Neil submitted, accordingly, that "[t]he correct position is that every description of a roster in Annexure 1 has two elements: the pattern of the roster and a stipulation of the rostered hours of work". 68 It is at this point in his analysis of the enterprise agreement that Mr Neil turned to the question of the meaning to be given to the word "indicative" that appears immediately before the hours set out in each roster description. Mr Neil submitted that the primary judge fell into error at [49] of his reasons, where the primary judge said as follows: … the word "Indicative" in the Table is significant. As I have explained, under the Enterprise Agreement, the number of hours that employees will actually work is uncertain. Thus, the roster cannot specify the number of hours per week of actual work. Instead, only an "indicative" number of hours can be given. In this context, the relevant definition of "indicative" in the Shorter Oxford English Dictionary is "suggestive of". To put it another way, the expression "Indicative 45.75 hour week" in the Table signals that employees are rostered to work approximately 45.75 hours per week, but that they may have to work a reasonable number of additional hours in order to perform their roles. 69 Mr Neil submitted that "[t]he error in that paragraph is in the last sentence … the primary judge treats the word 'indicative' as though it meant that the hours stipulated in the roster description were approximate. That is incorrect. The hours stipulated in the roster are, as we have submitted, fixed and exact and they can only be changed by the process set out and laid down in clause 10.1. But, of course … as the primary judge had earlier correctly recognised, those hours, the fixed exact stipulated rostered hours, do not necessarily equate to the actual hours of work. The actual hours of work may be different than the hours stipulated in the roster by the addition of what the enterprise agreement calls 'additional hours' … What the word 'indicative' does in the table in the roster descriptions, is to reiterate the idea that is set out and described in clause 10.2 when it uses the word 'indicative'. It's an indication that the actual hours of work may be different to the hours stipulated in the roster descriptions". 70 For all those reasons, the employer contends that, properly construed, and precisely because the hours stipulated in the roster are "fixed and exact and can only be changed by the process set out and laid down in cl 10.1", then if any change at all is made to any relevant roster system, that roster can no longer meet the relevant description in the table, and the amount of the roster allowance falls to be determined by the formula provided for in the second paragraph of cl 4. That, it is submitted, will not produce any injustice or work arbitrary unfairness because a change can only be introduced after consultation with the employees and if the changes "meet the needs of the operation and in consideration of the health and safety needs" of the employees and, in any event, the formula to be applied in that eventuality produces a dollar figure that is commensurate with the reduced rostered hours (here a reduction in a roster of half an hour per shift, reduced the roster allowance by $4,200 and $4,500 per year).

The union's submissions on appeal 71 Mr Dowling SC, who appeared with Mr CA Massy for the union, submitted that item 4 of Annexure 1 is the appropriate starting point in determining the parties' intentions. First, he submitted that the item itself deals with rostered hours. He submitted that that must be so because the additional hours are excluded by the last words of the first paragraph ("Roster Allowance compensates an Employee for all disabilities and working hours … excluding the additional hours incorporated in the Role Base Salary"). He submitted that the "the starting proposition for item 4 … is this is a table and an item dealing with rostered hours. Now, if that assumption is correct, when you then go to the table and you are looking at 45 - the numerals 45 and 45.75 - what it is talking about is about rostered hours. And … those hours are immediately preceded by the words 'indicative'. Now, read another way, the table is saying, in the left column, indicative rostered hours. And, in that way, the word "indicative", in our submission, is fatal to our friend's case". Mr Dowling submitted that "indicative" may, in this context, be read as meaning "generally" or perhaps "approximate" or "thereabouts". 72 Secondly, Mr Dowling pointed to the rosters, as it was prior to the roster change, at [20] and [23] of the agreed statement of facts, set out at [10] above. The total number of days that appear in each of those subparagraphs is 56 days, meaning that the roster was over a 56-day cycle. The weekly figures of 45.75 (or 45) was not, therefore, what was fixed to be worked every week, because the shifts were over a 56-day cycle. Accordingly, so it was submitted, the weekly figure in the Table must be an approximation or an average, not a fixed or exact number, as the employer would have it. 73 Thirdly, Mr Dowling submitted that the "constraints" contained in cl 10.2 (upon which the employer relied) were largely illusory and that "meeting the needs of the operation" gives the employer considerable scope to effect changes. 74 Fourthly, Mr Dowling submitted that the compensation for each of the rosters is not for the length of the shift, whether the shift is 12 hours or 12 ½ hours, or some other figure. Rather, it is the "disabilities" referred to in the first sentence of item 4 of Annexure 1. Taking the "7 day Continuous Shift" by way of example, where a roster allowance of $33,000 is paid: disability 1 is that the employee works the public holiday; disability 2 is that the employee works nights, Monday to Friday; disability 3 is that the employee works weekends; disability 4 is that the employee also works nights on weekends. As Mr Dowling said, "[t]hat roster, not surprisingly, has the greatest roster allowance, the $33,000, because it carries with it all of those disabilities". 75 Lastly, Mr Dowling conceded that the roster descriptions "could have been put in clause 10.2, but certainly both 10.2 and 10.4 have at least some focus on the roster and the roster descriptions. So somewhere there needs to be a guide as to what are the normal or average hours by which reasonableness can be assessed. Now, for whatever reason the parties have chosen to put that in item 4, but that, in our submission, doesn't change the essence of the roster allowance itself. The roster allowance itself is to compensate for the disability".

Principles of construction 76 The parties did not disagree about the applicable principles of construction. The relevant task is to discern the objective meaning of the words used "[h]aving regard to the industrial purpose of the agreement, and the commercial and legislative context in which it applies": Amcor Limited v Construction, Forestry, Mining and Energy Union (2005) 222 CLR 241, 249 at [13] (per Gleeson CJ and McHugh J). 77 And, of course, in cases such as this, where it may safely be presumed that the agreement was not negotiated and drawn up by lawyers, "[t]he search is for the meaning intended by the framer(s) of the document, bearing in mind that such framer(s) were likely of a practical bent of mind: they may well have been more concerned with expressing an intention in ways likely to have been understood in the context of the relevant industry and industrial relations environment than with legal niceties or jargon": Kucks v CSR Limited (1996) 66 IR 182, 184. The passage in which that observation was made was cited with approval in Amcor Limited v Construction, Forestry, Mining and Energy Union (2005) 222 CLR 241, 271 (per Kirby J) and 282-3 (per Callinan J). 78 Tracey J summarised the related principles relevant to the proper construction of industrial instruments in Transport Workers' Union of Australia v Linfox Australia Pty Ltd (2014) 318 ALR 54; [2014] FCA 829, 58-61 at [31]-[35] as follows: [31] … Shortly afterwards these principles were restated by French J in City of Wanneroo v Australian Municipal, Administrative, Clerical and Services Union (2006) 153 IR 426; [2006] FCA 813 at [57]: … It is of course necessary, in the construction of an award, to remember, as a contextual consideration, that it is an award under consideration. Its words must not be interpreted in a vacuum divorced from industrial realities - City of Wanneroo v Holmes (1989) 30 IR 362 at 378-379 and cases there cited. There is a long tradition of generous construction over a strictly literal approach where industrial awards are concerned - see eg George A Bond & Co Ltd (in liq) v McKenzie [1929] AR (NSW) 498 at 503-504 (Street J). It may be that this means no more than that courts and tribunals will not make too much of infelicitous expression in the drafting of an award nor be astute to discern absurdity or illogicality or apparent inconsistencies. But while fractured and illogical prose may be met by a generous and liberal approach to construction, I repeat what I said in City of Wanneroo v Holmes (at 380): "Awards, whether made by consent or otherwise, should make sense according to the basic conventions of the English language. They bind the parties on pain of pecuniary penalties." [32] In Australasian Meat Industry Employees Union v Coles Supermarkets Australia Pty Ltd (1998) 80 IR 208 at 212 Northrop J expressly agreed with what had been said by Madgwick J in Kucks and held that Madgwick J's observations had even stronger application to certified agreements than they did to awards. [33] In my view, these principles have application to the construction of the instruments which are presently in dispute. [34] Guidance as to the construction of industrial instruments may also be obtained by reference to principles which courts apply to the construction of commercial contracts. Commercial contracts should, as Kirby J held in Pan Foods Company Importers & Distributors Pty Ltd v Australia and New Zealand Banking Group Ltd [2000] HCA 20; (2000) 170 ALR 579 at 584 "be construed practically, so as to give effect to their presumed commercial purposes and so as not to defeat the achievement of such purposes by an excessively narrow and artificially restricted construction." An interpretation which accords with business common sense will be preferred to one which does not: see Upper Hunter County District Council v Australian Chilling and Freezing Co Ltd (1968) 118 CLR 429 at 437. [35] In determining whether a commercial document imposes contractual obligations regard is had to the intention of the parties: would a reasonable person conclude that the person making the alleged binding promise intend to be contractually bound by that promise. In Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165 … the High Court summarised the position as follows: … It is not the subjective beliefs or understanding of the parties about their rights and liabilities that govern their contractual relations. What matters is what each party by words and conduct would have led a reasonable person in the position of the other party to believe … That, normally requires consideration not only of the text, but also of the surrounding circumstances known to the parties, and the purpose and object of the transaction. See too Hancock Prospecting Pty Ltd v Rinehart (2017) 350 ALR 658; [2017] FCAFC 170, 701 at [163] and the High Court authorities cited therein.

Consideration 79 In my view, recognising that there is no entirely satisfactory or clear answer to the question of the proper construction of the relevant provisions of the enterprise agreement, on balance it seems to me that the construction contended for by the employer is that which is to be preferred. 80 The submissions made on behalf of the union, and the approach taken by the primary judge, proceed on the basis that the starting point for the task of construction is not the operative clauses of the enterprise agreement (here, cl 10.1 and cl 10.2, which referred to "the roster descriptions in Annexure 1"), but, rather, Annexure 1 itself. That, in my view, is an unlikely starting point. 81 The starting point must be cl 10.2. It is, after all, headed "Indicative Hours", so one turns to the cl 10.2 to ascertain what light it throws on those words. It commences: "An Employee's Total Salary represents payment for the performance of their role, not for the hours attending work". And we know from clause 1 of Annexure 1 that "total salary" comprises Role Base Salary, the relevant Market Allowance, Commute Allowance and Roster Allowance where applicable". (The only one of those items that is capable of variation or change under the enterprise agreement is the roster allowance.) 82 Returning then to cl 10.2, it continues: "An indicative number of hours to be worked by a full-time Employee are contained in the roster descriptions in annexure 1". 83 The only use of the word "indicative" in Annexure 1 is in the boxes in cl 4 - so the "indicative hours to be worked by a full-time Employee" must, it seems to me, refer to the concept inherent in cl 10.2 that the actual hours of work may be different to the hours stipulated in the roster. The Total Salary is not dependent upon "hours attending work" - hence the need to stipulate an "indicative" number of hours. That is the admittedly limited function that the word "indicative" performs in cl 4 of Annexure 1. 84 It follows, in my view, that if a roster is "changed" pursuant to cl 10.1, it is no longer the same roster in respect of which a precise amount of "Roster Allowance" is payable under cl 4 of Annexure 1. Because it is not the same - because it has "changed" - then the newly applicable roster allowance must be re-calculated in accordance with the second paragraph of cl 4 of Annexure 1. Although there was no material before this court on appeal as to the calculations in fact performed in this case, no issue was raised about the fairness of the methodology that produced the reductions of $4200 and $4500 respectively in the amounts of the roster allowance payable under the new shifts. 85 It is true, as Mr Neil conceded, that the same result would follow even if the change to the roster was minor. But such a change to a roster seems an unlikely scenario. And, in any event, even assuming that the constraints imposed by cl 10.1 (they must meet the needs of the operation, consideration must be given to the health and safety needs of the employees, and the employer must consult etc.) are not stringent (they obviously are not), they would operate to prevent the employer from introducing change capriciously. But, on the assumption that the calculation provided for in the second paragraph of cl 4 of Annexure 1 provides for a calculation of a change to the amount of the roster allowance payable that is commensurate with the change to the shift that it is difficult to see how unfairness could be worked. The relativities between the shift hours worked and the amount of the Roster Allowance payable are maintained. 86 Each of the submissions advanced on behalf of the union is predicated upon the primacy of cl 4 of Annexure 1 and on reading the relevant language contained in that item without having regard sufficiently, in my view, to the relevant language in clauses 10.1 and 10.2. In my view, the second sentence of cl 10.2 is the starting point - and in one sense, the end point - of the matter because it informs the reader that when one comes to see the word "indicative" in Annexure 1 next to a number of hours (here, 45 hours or 45.75 hours, as the case may be) that is the "indicative number of hours to be worked by a full-time Employee". They are "contained in the roster descriptions in Annexure 1", but they do not serve to define the roster descriptions in some "approximate" way, as the union contends and, in a similar way, as the primary judge found. A change to the roster descriptions is governed by cl 10.1; and if a change is implemented to the roster allowance it falls to be recalculated in accordance with second paragraph of cl 4 of Annexure 1. 87 Finally, I should say something about Mr Dowling's submission that the compensation for each of the rosters is not for the length of the shift but for the "disabilities" referred to in the first sentence of cl 4 of Annexure 1. See [42] above. In my view, that interpretation may be open on the face of the words in the paragraph read in isolation, but, read in context, as they must be, and in particular read together with cl 10.1 and cl 10.2, it is not to be preferred.

Conclusion 88 For those reasons, I would have allowed the appeal, and would have set aside the orders made by the primary judge on 26 March 2018 and 12 April 2018, and in lieu of those orders ordered that the application be dismissed. I certify that the preceding fifty-six (56) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice O'Callaghan.