[2021] FWC 4123
General information, not legal advice.
Fair Work Commission
2021-07-21
Original judgment source is linked above.
[2021] FWC 4123 [Note: An appeal pursuant to s.604 (C2021/4705) was lodged against this decision - refer to Full Bench decision dated 10 November 2021 [ [2021] FWCFB 6045] for result of appeal.]
s.739 - Dispute resolution
successive proposals to the CPSU during bargaining for the Agreement:
(a) In November 2019, Serco put a proposal to the CPSU that employees would receive ten days of personal/carer's leave in accordance with the legislation, without specifying how many hours this was. Serco would then apply this according to the interpretation that the courts finally settled on. The CPSU told Serco that it rejected this proposal at a meeting on 15 November 2019, because under the 2017 Agreement some employees already had an entitlement greater than what Serco had previously understood "10 days" to mean. The CPSU told Serco that it was not willing to have a position where the High Court appeal succeeded, and employees became entitled to less leave than they accrued under the 2017 Agreement.
(b) In January 2020, Serco put a proposal that there would be two columns of hours: Column A, reflecting the numbers in the 2017 Agreement, and Column B, reflecting what was understood was required under Mondelez FCA. Serco explained to the CPSU that Column B would continue to apply if the High Court confirmed Mondelez FCA, but employees would revert to the Column A entitlement if the High Court reversed it.
Federal Court approach nor the approach Serco had previously taken was correct.
(a) a summary of key changes as between the 2017 Agreement and Agreement; and
(b) a separate letter dealing with a number of matters raised in or in connection with bargaining by the Acacia Joint Consultative Committee.
(a) the "ten days" of personal/carer's leave that employees accrue each year under the NES meant ten separate working days (regardless of how many hours were worked on a particular day), not a number of hours equivalent to what on average employees worked over two weeks; and
(b) this meant that employees who work a standard 12-hour shift, including Acacia prison officers, would need to accrue 120 hours of personal/carer's leave each year to comply with the NES.
(a) comply with the NES as understood in light of the Mondelez FCA; but
(b) not prejudice Serco if the High Court overturned it.
meeting a discussion occurred regarding the proposal he had circulated, as described above.
(a) the personal/carer's leave clause would include a table with two columns: Column A, and Column B. For each class of employees:
(i) Column A would contain the number of hours' leave that they accrued each year under the 2017 Agreement; and
(ii) Column B would contain a number that was 10 times the length of their normal shifts, to comply with the NES as we understood it in light of Mondelez FCA.
(b) Column B would apply unless and until the High Court overruled the Federal Court.
(c) If the High Court did overrule the Federal Court, employees would, following consultation, receive leave in accordance with the NES provision, which might involve reversion to the Column A entitlement.
(a) the High Court held that "10 days" meant something less than the entitlements in Column B of clause 33.4, but employees would nonetheless retain the 'Column B' amounts; or
(b) the Commission would be asked to decide between the accrual rates in Column A and Column B.
rejected by Serco from the commencement of bargaining, but rather, how to adopt Mondelez FCA, if only as a short-term measure pending the High Court appeal.
"2.6 This Agreement is to be read in conjunction with the terms of the National Employment Standards (NES), which will apply at all times as a minimum. Benefits or terms contained in this Agreement that are more beneficial than the NES will prevail."
33.1 An employee, other than a casual is entitled to paid personal/carer's leave if the leave is taken:
a) the employee is not fit for work because of a personal illness, or personal injury affecting the employee; or
b) to provide care or support to a member of the employee's immediate family, or a member of the employee's household who required care or support because of;
(i) a personal illness, or personal injury, affecting that member; or
(ii) an unexpected emergency affecting that member.
33.2 In accordance with the provisions of the NES, full time and part time employees are entitled to 10 days of paid personal/carer's leave per year of service.
33.3 Consistent with the current application of the NES provisions, when taking paid personal leave, the Employee will be paid for the ordinary hours of work they were allocated to work and otherwise would have for the day in question.
33.4 The table below details the Serco CPSU Acacia Prison General Enterprise Agreement 2017 entitlement in Column A, and the entitlement under this Agreement in Column B:
33.5 The parties acknowledge that should the interpretation of the application of clause 33.2 above change during the period of this Agreement, the parties will negotiate any consequences in accordance with clause 4.1 of this Agreement. Should the parties not be able to reach Agreement on those changes within a six month period, either party may refer the matter to the Fair Work Commission in accordance with clause 48 Dispute Resolution Procedure. The parties collectively commit to the outcome of any such referral not being less than the entitlement in Column A above. The Employer acknowledges that should this occur, no attempt will be made to recover personal leave payments made to any Employee up till that time." (sic)
4.1 With the exception of sub clause 3.2, and if relevant sub clause 33.5, it is agreed by the parties that up to the nominal expiry date of this Agreement the parties will not pursue any further claims, and that this Agreement will cover all matters regarding employment conditions."
The following procedure for settling disputes will be followed by the parties.
48.1 In the event of any dispute involving matters under this Agreement or the provisions of the National Employment Standards outlined in the Fair Work Act 2009, or any Industrial Matter as defined in clause 6.13 of this Agreement, every effort shall be made by the parties to resolve the issue at the workplace level in accordance with the following procedure.
48.2 An Employee who is party to a dispute may choose to appoint another person, organisation or association of their choice to represent them during this process.
48.3 All parties commit to the principles of procedural fairness (ie, a fair go all round) when settling any dispute.
48.4 At first instance, an aggrieved Employee(s) shall discuss the issue with the supervisor with the purpose of resolving the issue.
48.5 If the matter remains unresolved after discussions with the supervisor, the Employee may refer the issue, in writing to the next manager in the hierarchy. A response will be provided within 7 days, unless otherwise agreed by the parties.
48.6 If the matter remains unresolved, the Employee may refer the issue to the People and Capability Manager or a member of the Senior Management Team who will consult with the Employer prior to responding. A response will be provided within 7 days, unless otherwise agreed by the parties.
48.7 If discussions at workplace level do not resolve the dispute, a party to the dispute or their representative may refer the matter to the FWC. The FWC may deal with the dispute in two (2) stages:
a) The FWC will first attempt to resolve the dispute as it considers appropriate, including by mediation, conciliation, expressing an opinion or making a recommendation; and
b) If the FWC is unable to resolve the dispute at the first stage, the FWC may then arbitrate the dispute.
48.8 In resolving the dispute the FWC can exercise any of its powers under the Fair Work Act in relation to conciliation conferences, hearings, witnesses, evidence and submissions which are necessary to make the resolution of the dispute effective.
48.9 The parties to the dispute will be bound by and implement any decision of the FWC subject to an appeal to the Full Bench of the FWC.
48.10 While the parties are trying to resolve the dispute using the procedures in this clause:
a) If the dispute involves the withdrawal of labour, the parties undertake that the prison will be staffed so that it does not adversely affect the Employer's duty of care to prisoners and staff; and
b) The status quo (i.e. the conditions applying prior to the issue arising) will remain until the processes specified in accordance with the procedure outlined above are completed.
48.11 If a dispute arises which involves more than one Employee, the dispute may be raised through the JCC, however if in the opinion of the Employer, the issue can be resolved through the line management structure, the Employer shall refer the dispute back to line management in accordance with the process specified above."
(1) For each year of service with his or her employer, an employee is entitled to 10 days of paid personal/carer's leave.
(2) An employee's entitlement to paid personal/carer's leave accrues progressively during a year of service according to the employee's ordinary hours of work, and accumulates from year to year."
"[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:
(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."
"... the Agreement was made when the WR Act was in force and cls 19.2.4 and 19.4.5 of the Agreement specify that a "casual FTM" is entitled to unpaid carer's leave and unpaid compassionate leave "in accordance with the [WR Act]. Particularly given the specific reference to the entitlements of casuals under the WR Act, it is appropriate to presume that the Agreement was intended to operate harmoniously with the WR Act and apply the same meaning to "casual employee" as that applicable under the WR Act."
(b) Clause 2.6 of the Agreement provides that the Agreement is to be read "in conjunction with the terms of the National Employment Standards (NES)". Even in circumstances where these are not apt as words of incorporation, the term "in conjunction" indicates that the Agreement and the NES are to be read together.
(a) Personal/carer's leave had been the subject of a claim by the Union, which Serco had rejected and never accepted on its merits.
(b) Some four months after bargaining began, Mondelez FCA. was handed down. Under the Mondelez FCA interpretation of what constitutes "10 days" of leave, the entitlements in clause 34 of the 2017 Agreement were not sufficient to discharge employees' entitlements. For example, a security officer working 12 hour shifts could exhaust their entitlement to 84 hours of personal/carer's leave in seven "working days". A full 10 "working days" of leave, as Mondelez FCA described them, would require 120 hours of leave.
(c) By mid-September 2019 it was public knowledge that both Mondelez Australia Pty Ltd and the Commonwealth Government would seek to appeal Mondelez FCA, and by December 2019 it was known that the High Court had granted special leave.
(d) Serco and the CPSU discussed personal leave from around October 2019 to late January 2020. A number of proposals were made, including that:
(i) The new agreement do away with references to number of hours and simply refer to "10 days", whatever that might ultimately be interpreted to mean.
(ii) The new agreement contain two columns: one reflecting the requirements of s.96 as interpreted in Mondelez FCA, the other reflecting the 2017 Agreement, with the former to apply for so long as Mondelez HC prevailed but the latter to be reinstated if the High Court overturned the Full Federal Court's declaration.
(iii) The eventual form of the clause, whereby the two column approach was maintained, the parties would seek to negotiate the "consequences" of any change to the interpretation of clause 33.2, and if they could not do so the Commission would arbitrate, with the 2017 Agreement entitlement to form a minimum.
(a) Given the CPSU's intimation that it may lead evidence, and it having advanced the contention that its own subjective basis for seeking 120 hours of personal leave was relevant (and had nothing to do with Mondelez litigation), Serco anticipated that it may need to meet an evidentiary case the CPSU put forward.
(b) Evidence is admissible to determine whether an ambiguity exists and Serco's submission is that the evidence demonstrates that the provision is not ambiguous, and that Serco's construction is the correct one according to the plain meaning of the Agreement.
(c) In the alternative, if one reads clause 33.4 in the way that the CPSU urges, it is clearly inconsistent with clause 33.5, as one provision would appear to unconditionally confer an entitlement, and another would allow it to be lowered by agreement or arbitration. In those circumstances clause 33 would be internally inconsistent, therefore open to two contradictory meanings, and hence ambiguous. In that case, evidence of the surrounding objective background circumstances is admissible and Serco's submission in this regard is that if the Commission were against it on the submissions made above, and concluded there were ambiguity, the evidence of the surrounding circumstances entirely supports the interpretation for which it contends.
"It is beside the point that the parties agreed to include a provision under clause 33.5 to revisit the terms of the personal/carer's leave entitlement. The existence of clause 33.5 does not give rise to any ambiguity as to the meaning of the surrounding provisions of the Agreement. "
(a) their fortnightly ordinary hours, or if they do not work a fortnightly roster cycle, 1/26 of annual ordinary hours, in accordance with Mondelez HC; and
(b) the number of hours for their classification stated in Column A of clause 33.4.
1. Employees will be eligible to take up to 10 days of leave each year of service;
2. Where an employee takes a day of leave, he or she will be paid for the number of hours that they would have worked according to their ordinary work roster; and
3. For the purpose of personal/carer's leave, the number of hours leave that is granted for each year of service is determined based on job classification and the roster pattern that has been prescribed.
1. The yearly entitlement to personal/carer's leave is calculated with reference to the individual shift or roster pattern worked by an employee;
2. There are six different shift pattern types that are prescribed to calculate the amounts to be paid to employees who take leave under clause 33;
3. The value of an employee's entitlement to paid personal/carer's leave will depend upon their job classification referred to in the Agreement; and
4. Under the terms of the current Agreement, the maximum yearly amount of leave (in hours) that can accrue or that can be paid to an employee in respect of each year of service cannot exceed the relevant figure mentioned in Column B of the table.
1. The yearly entitlement to personal/carer's leave for employees under the Agreement is represented by the figure listed under Column A of the table in clause 33.4; because
2. The meaning and effect of clause 33.2 of the Agreement is that the daily entitlement to personal/carer's leave is similar or essentially the same under the Agreement as that provided under s.96 of the Act; and
3. Arising from the High Court decision in Mondelez HC, the true meaning of the benefit provided under s.96 of the Act is more consistent with the figures listed in Column A of the table at clause 33.4, and less so with the figures listed in the table under Column B.
"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."
1. In 2019 Serco and the CPSU were negotiating for a new agreement to replace the 2017 Agreement. Those negotiations had begun before July 2019.
2. During the negotiations the CPSU had pressed a claim for personal/carer's leave to be increased to parity with the entitlement of public sector staff employed in government run Western Australian prisons. Serco at all times rejected this claim.
3. The Full Federal Court majority judgment in Mondelez FCA was handed down on 21 August 2019.
4. This Full Federal Court majority judgment held that s.96 of the Act which refers to '10 days of personal/carer's leave' entitles an employee, regardless of their pattern of work or distribution of hours, to be absent without loss of pay on 10 working days per year.
5. By mid-September 2019 it was publicly known that an application seeking special leave to appeal the Mondelez FCA judgment to the High Court would be made and later it was public knowledge that the High Court had granted special leave to appeal Mondelez FCA on 13 December 2019.
6. Both Serco and the CPSU, during the continuing negotiations about the wording of clause 33 of the Agreement, were aware that a future decision of the High Court on the appeal of the Mondelez FCA judgment could affect the employees entitlement to personal/carer's leave.[12]
7. The Agreement was made by a majority vote of employees on 25 June 2020.[13]
An employee's fortnightly ordinary hours, or if they do not work a fortnightly roster 1/26 of that employee's annual ordinary hours, provided that for employees in the classifications who work the corresponding shift patterns detailed in the table at 33.4 of the Agreement their rate of accrual shall be no less than the number of hours set out in Column A of the table.

S. Crilly of Seyfarth Shaw Australia for the Applicant.
D. Stojanoski of Slater & Gordon Lawyers for the Respondent.
[1] Form F10 filed 20 January 2021 at 2.1, paragraph 1.
[2] Respondent's outline of submission dated 29 March 2021 at paragraph 3.
[6] Exhibit A2, Attachments BJW4 and BJW5.
[9] [2005] HCA 10, 222 CLR 241 at [30].
[10] Exhibit A2, Attachments BJW4 and BJW5.
[11] Respondent's outline of submission dated 29 March 2021 at paragraph 3.
[12] Exhibit A1 at paragraphs 11 and 12 and Exhibit A2 at paragraphs 4, 12 to 25.
Printed by authority of the Commonwealth Government Printer
Serco Australia Pty Ltd
CPSU, the Community and Public Sector Union [2021] FWC 4123