Choosing between definitions
22 On the assumption that the application of the definition of 'ordinary pay' in cl 28 of the Certified Agreement led to a result different from the application of the definition of 'ordinary pay' in s 64 of the LSL Act, the applicant contended that the former definition was the correct one. Counsel for the applicant pointed to the exhaustive nature of the definition in cl 28 and the fact that it was expressed to be a definition applicable 'for the purposes of this agreement'; to the presumption of consistency in the use of the same term throughout a document; and to English authority on the resolution of conflict between the terms of a document and the terms of another document incorporated by reference into the first document.
23 Counsel for the respondent contended to the contrary. He contended that the definition in cl 28 of the Certified Agreement was applicable only to provisions of the Certified Agreement actually using the words 'ordinary pay', namely cll 16.a, 17 and 17.g), and 27. He argued that, as cl 38 does not use that phrase, it is not subject to the definition. Alternatively, any inconsistency should be resolved by reference to the principle that conflict between a general and a specific provision should be resolved in favour of the specific provision. He pointed to the failure of cl 38 to contain a provision similar to that in cl 17.g), specifically invoking the cl 28 definition.
24 Both parties were in agreement that cl 38 incorporated by reference the provisions of the LSL Act, and did not merely preserve their operation as part of the law of Victoria. The fact that the provisions to which cl 38 refers are only those applying at the time of certification of the Certified Agreement suggests strongly that the intention of cl 38 was to give those provisions operation as part of the Certified Agreement, rather than to recognise their continued operation as part of the law of Victoria, in the absence of a federal instrument covering the relevant field. Compare Seymour v Stawell Timber Industries Pty Ltd (1985) 9 FCR 241 at 261-265 per Gray J.
25 The arguments resting on the exhaustive nature of the definition in cl 28 of the Certified Agreement, and the presumption of consistency in the use of terms are weakened substantially in the present case. It is true that the definition in cl 28 is unqualified by words such as 'unless a contrary intention appears' or 'unless the context otherwise requires'. It is a 'means', and not an 'includes' definition, and is therefore taken to be exhaustive. See the Queen in Right of the State of Victoria v Australian Teachers Union (1993) 47 IR 328 at 332. The difficulty is that cl 38 does not itself use the defined term; rather, it imports provisions that use the same expression, but which also include a definition of that term as used. It is easy to construe cl 38 as involving the importation of provisions relating to long service leave as a code on that subject, the content of which does not have to fit within the framework of the rest of the Certified Agreement. It is as if the imported provisions contained a term other than 'ordinary pay', with a different meaning.
26 There is no doubt that consistency in the use of terminology, particularly defined terms, is to be valued highly in any document. Inconsistency in the use of the same or similar words produces confusion in the interpretation of documents. This is why there is a presumption that a word used in one provision of a statute has the same meaning when it is used in another provision of the same statute. In statutory construction, consistency of use is no more than a presumption, and a fragile one at that. In Clyne v Deputy Commissioner of Taxation (1981) 150 CLR 1 at 10, Gibbs CJ described it as 'not a presumption of very much weight'. His Honour said, 'there is no rigid rule; it all depends on the context'. In the same case at 15, Mason J (with whom Aickin and Wilson JJ concurred) said that the presumption 'readily yields to the context'. If the presumption of consistent use of terminology is so weak in legislative drafting, it must be even weaker in the context of a Certified Agreement. Typically, such agreements are the product of hard negotiation, in which wording of particular clauses is often agreed without reference to other provisions of the same document. Provisions are commonly transmitted from one agreement to the next in a series, without regard to whether their terminology sits well with the words used in newly adopted terms. The use of other agreements, and awards, as precedents can often result in the borrowing of provisions, again without regard to whether the words used in them are consistent with the rest of the agreement under consideration. For these and other reasons, consistency will often be absent. It is easy to see that the same word can be used in different provisions with different meanings.
27 As well as providing examples of inconsistent use of style in numbering and lettering clauses, the Certified Agreement itself provides examples of inconsistency of terminology when it is likely that the same meaning is intended. For instance, it is not easy to see that the references to 'weekly ordinary time wage rate' and 'base ordinary time rate of pay' in cl 8.C.2 and 8.C.3 respectively are intended to mean anything different from 'ordinary time rate of pay' in cl 8.B.4 and in the definition of 'Ordinary Pay' in cl 28. A similar observation might be made about 'regular ordinary time rate of pay' in cl 33.c) and 'total ordinary weekly rate' in cl 24. Nor is there consistency in the approach to the rate of pay for the various types of leave for which the Certified Agreement provides. Clause 19 does not use the term 'ordinary pay', and does not have any other provision as to how the rate of pay for compassionate leave is to be calculated.
28 The choice of incorporation by reference, as the means of providing for long service leave entitlements, itself provides a sufficient reason for ousting the presumption that terminology is used consistently. As I have said, the term 'ordinary pay' comes complete with its own definition in the provisions incorporated by reference. It is as if the provisions incorporated by reference contained different terminology.
29 Counsel for the applicant relied on Modern Buildings Wales Ltd v Limmer and Trinidad Co Ltd [1975] 2 All ER 549. In that case, there was a question whether a standard form contract, known as the 'green form', which contained an arbitration clause, had been incorporated by reference into a building contract, although misdescribed in the terms of the building contract itself. The Court of Appeal, consisting of Buckley and Ormrod LJJ, held that the green form had been incorporated by reference, and that a proceeding brought to enforce the building contract ought to be stayed pending arbitration, in accordance with the
arbitration clause. Buckley LJ dealt with one of the arguments supporting the proposition that the green form had not been incorporated by reference at 555-556 as follows:
'Counsel for the plaintiffs has suggested that the written contract contains insufficient indication how various matters that are left in blank in the green form contract, and in particular in the appendix to the contract, which relates to such matters as the completion period, the retention money and so forth, should be filled in. Where parties by an agreement import the terms of some other document as part of their agreement those terms must be imported in their entirety, in my judgment, but subject to this: that if any of the imported terms in any way conflicts with the expressly agreed terms, the latter must prevail over what would otherwise be imported. Here it is not disputed that the written contract between the parties, consisting of the quotation and the order, contains all the essential terms of the contract, and, in my judgment, the green form of contract must be treated as forming part of the written contract, subject to any modifications that may be necessary to make the clauses in the green form accord in all respects with the express terms agreed between the parties.' [Emphasis added]
Ormrod LJ agreed with Buckley LJ and did not comment specifically on the issue of the gaps in the green form.
30 Counsel for the applicant contended that the principle to be derived from Modern Buildings, as stated by Buckley LJ, was that, when the terms of a document are incorporated by reference into an agreement, the terms are only imported into the agreement to the extent to which they are not inconsistent with the express terms of the agreement. Plainly, the principle cannot be this broad. Buckley LJ was speaking of a term that 'conflicts with the expressly agreed terms', not a term that would be inconsistent only in the sense that its application would produce a different result from that produced by the application of the express terms of the agreement. In the absence of conflict between terms, there is no reason why full effect should not be given to the choice of the parties to incorporate provisions by reference. In the present case, there is no conflict between the definition in cl 28 of the Certified Agreement and the definition of 'ordinary pay' in the LSL Act. It is only that the application of the two definitions to the expression 'ordinary pay', which happens to be common to both the provisions incorporated by reference and the express terms of the Certified Agreement, might produce different results. Such different results would not involve derogation from the express terms of the Certified Agreement. There is, therefore, no possibility of conflict. There is no reason why the choice of the parties to have entitlements to long service leave determined by the application of the provisions of the LSL Act should not be given full effect.
31 Counsel for the applicant contended that the past conduct of the parties could be relied upon as an aid in the construction of the Certified Agreement. There is authority that, if a provision has appeared in a series of agreements between the same parties, and if they can be shown to have conducted themselves according to a common understanding of the meaning of that provision, then it can be taken that they have agreed that the term should continue to have the commonly understood meaning in the current agreement. See Merchant Service Guild of Australia v Sydney Steam Collier Owners & Coal Stevedores Association (1958) 1 FLR 248 at 251 per Spicer CJ, 254 per Dunphy J and 257 per Morgan J, and Printing & Kindred Industries Union v Davies Bros Ltd (1986) 18 IR 444 at 452-453. It is necessary to take great care in the application of this limited principle, to avoid infringing the general principle that the conduct of parties to an agreement cannot be taken into account in construing the agreement. For the limited principle to operate, there must be clear evidence that the parties have acted upon a common understanding as to the meaning of the relevant provision and not for other reasons, such as common inadvertence as to its true meaning. See Australian Liquor, Hospitality and Miscellaneous Workers Union v Prestige Property Services Pty Ltd [2006] FCA 11 at [44].
32 In the present case, there is no evidence to indicate that there was any common understanding between the applicant and the respondent about the meaning of the relevant clauses in preceding agreements. All that has been established is that, until 2004, the respondent had a practice of paying employees entitled to long service leave at a rate of pay inclusive of penalties and shift premiums, if applicable. There is no evidence as to why it did this. The reason might have been inadvertence on the part of those responsible for making the payments as to the presence of the definition in the LSL Act. It may have been an act of generosity on the part of the respondent, from which it has now resiled. There is no evidence that any relevant person on the applicant's side was aware of the respondent's practice of making payments at the higher rate, much less of any belief on the part of any relevant officer of the applicant that payment at the higher rate represented the appropriate construction of the relevant provisions. There is therefore no evidence of a settled interpretation, of which the parties had a common understanding.
33 Counsel for the applicant also urged the adoption of a purposive construction. He contended that the purpose of the provision of the Certified Agreement relating to long service leave was to benefit employees by rewarding them for their loyalty to the respondent over a long period. The identification of such a purpose is easy, of course. It is more difficult to identify the more specific purpose necessary to resolve this dispute, namely the extent to which it is intended to benefit long-serving employees. Have the parties, by their incorporation by reference of the provisions of the LSL Act, adopted the purpose of rewarding those employees at the rate required by the definition of 'ordinary pay' in those provisions, or have they retained the purpose of rewarding those employees at a rate calculated according to the definition in cl 28 of the Certified Agreement? This is the very question that must be answered in order to determine the entitlement of employees who take long service leave, so there seems little point in endeavouring to answer it in order to ascertain a purpose, in order to apply a purposive interpretation.
34 There can be no doubt that the respondent's change of practice as to the rate at which it pays long service leave appears mean-spirited. Insistence on strict legal rights by a large employer with a profitable business might not be the best policy. At issue in the present proceeding are the rights of the parties, however, and not the wisdom of the respondent's actions. I am unable to say that the respondent has acted in accordance with a wrong interpretation of the Certified Agreement in applying the definition of 'ordinary pay' in the LSL Act, rather than that appearing in cl 28 of the Certified Agreement. It is therefore necessary to examine the definition in the LSL Act, for the purpose of determining whether it provides an entitlement for Mr Jamieson that remains unmet by the respondent.