South Australian Water Corporation v Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia

Federal Court of Australia (Full Court)|2024-03-21|Before: Jackson JJ

The appeal be allowed.
The preliminary issue of whether on the proper construction of the SA Water Corporation Enterprise Agreement 2018 as varied by the SA Water Corporation Variation Agreement 2020 [2020] FWCA 3581 clause 1.7 imposes an enforceable obligation on the SA Water Corporation, punishable by the imposition of pecuniary penalties under the Fair Work Act 2009 (Cth) in the event of non-compliance with that obligation be answered as follows: No.
The proceeding be remitted to the South Australian Employment Court for the making of further orders consequent upon these orders. Note: Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

Introduction 1 This is an appeal from the South Australian Employment Tribunal exercising its jurisdiction under the Fair Work Act 2009 (Cth) (FW Act) as the South Australian Employment Court (the SAEC). The appellant is the South Australian Water Corporation and the respondent is the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia. 2 In the Court below, the respondent made an application for pecuniary penalties against the appellant for alleged contraventions of s 50 of the FW Act. That section provides that a person must not contravene a term of an enterprise agreement. The alleged contraventions involved breaches of the appellant's safety commitments as employer in cl 1.7 of the SA Water Corporation Enterprise Agreement 2018 as varied by the SA Water Corporation Variation Agreement 2020 (EA). 3 The respondent's application contains allegations that three dangerous incidents occurred as a result of the appellant's breaches of the Work Health and Safety Act 2012 (SA) (WHS Act) (ss 14, 19, 37, 38 and 47) and Work Health and Safety Regulations 2012 (SA) (Regulations) (regs 35, 36 and 38). The Court below described the alleged factual context as involving three separate explosions in the workplace of several electricians who undertake high voltage electrical work in Murray Bridge on infrastructure associated with the supply of water to Adelaide. 4 The clause of the EA in issue, cl 1.7, provides as follows: 1.7 WORK HEALTH AND SAFETY SA Water and its Employees are committed to complying with their obligations under the Work Health and Safety Act 2012 and any applicable regulations. SA Water values safety and is committed to ensuring safety and healthy working conditions and work practices in SA Water remains a priority. 5 The appellant denied that it had committed any contravention of cl 1.7 by contravening or failing to comply with the WHS Act or the Regulations. It brought an application to have the respondent's application dismissed without the need for a consideration of the facts of the three dangerous incidents on the basis that cl 1.7 of the EA did not give rise to a binding obligation on it, but was merely a statement of a goal the appellant (and its employees) aspired to achieve. 6 The SAEC considered the appellant's application and dismissed it (Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v South Australian Water Corporation [2023] SAET 20). The SAEC determined that cl 1.7 did impose an enforceable obligation on the appellant punishable by the imposition of pecuniary penalties and directed that the respondent's pecuniary penalty application be listed for hearing and determination. 7 There is one ground of appeal and it is as follows: 1. The SAEC erred in finding that clause 1.7 of the SA Water Corporation Enterprise Agreement 2018-2021 as varied by the SA Water Corporation Variation Agreement 2020 [2020] FWCA 3581 was not merely aspirational and creates an identifiable enforceable obligation. 8 The order sought by the appellant in its Amended Notice of appeal is that the proceeding in the SAEC be dismissed. We note that there was an earlier version of the SAEC's decision which was published by mistake on 10 March 2023. That fact played no part in the arguments on appeal.

The Reasons of the SAEC 9 The SAEC said that the issue for determination was whether cl 1.7, on its proper construction, created an obligation or promise to do something, rather than just an aim or aspirational goal. The SAEC said that to constitute a promise, the clause must do more than just recognise the existence of the external obligation and the subject matter of the clause must be sufficiently precise so that an alleged breach can be objectively determined. 10 The SAEC considered two decisions: Gramotnev v Queensland University of Technology [2015] QCA 127; (2015) 251 IR 488 (Gramotnev v Queensland University of Technology) and NTEIU v University of Sydney [2020] FCA 1709 and said that the words "commitment" and "will" may indicate an obligation rather than an aspiration, but that is not necessarily the case and a clause containing such "terms" needs to be construed in context. 11 The SAEC then proceeded to express its conclusions. The SAEC began by saying that the ordinary meaning of the first sentence of cl 1.7 is an expression of mutual commitments to comply with the obligations or duties created by the WHS Act and applicable regulations and that the sentence cannot reasonably be read in any other way. The appellant has promised, as a minimum term and condition of employment for those employees covered by the EA, to make its safety compliance a term of the governing industrial instrument. The SAEC said that the appellant had done "far more" than just agree to aim towards or strive for safety compliance. It is at this point that the SAEC referred to a matter beyond the ordinary meaning of the first sentence of cl 1.7. Whether it is an additional matter supporting the construction the SAEC favoured or simply an observation is unclear, but it is that the promise in the first sentence of cl 1.7 is consistent with one of the objectives of the EA of giving the appellant the best chance of "attracting, developing and retaining talented and productive Employees". 12 The SAEC then moved to consider the second sentence in cl 1.7. The respondent does not rely on the second sentence as giving rise to an obligation which is relevant for present purposes, but clearly it is part of the context. The SAEC began by describing the second sentence as a whole as not being expressed as a commitment to comply with identified legal obligations about workplace safety or referring to an obligation. The SAEC then divided the second sentence into two parts. The first part which refers to "values" and "safety" is not a promissory obligation, those matters being "imprecise subjective concepts". The second part refers to SA Water being "committed" to matters remaining a "priority" and those matters are "safe and healthy working conditions and work practices", but the SAEC noted the degree or type of health and safety is not specified. There then follows two observations by the SAEC which do not make it entirely clear whether the SAEC considered that the second part of the second sentence created a binding obligation. First, the SAEC said that although the second part of the second sentence was not a promissory obligation to comply with the WHS Act and applicable regulations, it was a promise to prioritise safety and a healthy working environment. Secondly, the SAEC said that the second sentence expands on the safety topic that is the general subject of the clear, but technically expressed promise in the first sentence. It seems to us that the proper construction of this part of the SAEC's reasons is that it took the view that the second sentence and, in particular the second part thereof, was not a binding legal obligation because the subject matter of the statement was not sufficiently precise to constitute a binding legal obligation. In any event, the resolution of the issue of what the SAEC held is not critical because this Court is in as good a position as the SAEC to resolve the issues of construction. 13 The SAEC then noted that the fact that cl 1.7 referred to "external statutory sources of obligations on employers" (i.e., the WHS Act and applicable regulations) did not mean that it was aspirational and that it was open to the parties to an enterprise agreement to incorporate into that agreement external statutory sources of obligations on employers. 14 The SAEC then said that it agreed with the respondent's submissions about the contextual language of cl 1.7 within the EA and that the appellant's preferred construction appeared to be inconsistent with the language and arrangement of the EA. Earlier in its reasons, SAEC described two categories of contextual matters identified by the respondent. First, the respondent relied on the fact that in other clauses which do give rise to binding obligations, the words "commit" and "commitment" are used and the fact that in the case of what are clearly aspirational clauses those words are not used and words such as "objective", "promoting" or "valuing" are used. Examples of the former are as follows: 6.3.2 First Aid Allowance … During the life of this Agreement SA Water commits to undertaking a risk assessment of the adequacy of its designated First Aid Officer coverage across the Corporation. 8.1 TERMINATION OF EMPLOYMENT 8.1.1 Except in the cases of: … 8.1.1.3 Any redundancy commitments binding on SA Water at the time; employment may be terminated by SA Water giving the Employee notice in accordance with the following minimum requirements: … 15 SA Water will: … (c) Actively case-manage excess Tenured or Transferred Employees to effectively assist in any transition to new roles including: … ii. Provide access to retraining support, with a commitment to providing retraining opportunities within SA Water that are tailored to meet the individual needs of an excess Tenured or Transferred Employee with an induvial case management approach; and 15 Examples of the latter are the first part of the second sentence in cl 1.7 itself and the following: 2.1.5 The Agreement aims to provide simple, clear and unambiguous conditions of employment that: … • Value diversity, promote safety and wellbeing, and enhance opportunities for Employees; 16 The second category of contextual matters relied on by the respondent in the SAEC was the place of cl 1.7 in the EA. It appears in Part 1 which is entitled "Agreement Regulation and Administration". It does not appear in Part 2 entitled "Vision and Strategy" which contains broad statements as to "vision", "strategy", "focus" and "aims". 17 Having regard to all the matters it identified, the SAEC concluded that the first sentence in cl 1.7 gave rise to a binding obligation. 18 There were some arguments put to the SAEC by the appellant which have not been repeated in this Court. We will do no more than identify them for the sake of completeness. First, the SAEC rejected an argument that because the alleged contravention in this case involved a criminal offence, the determination of the contravention was beyond the Court's jurisdiction. Secondly, the SAEC rejected an argument that there was an indirect inconsistency between the WHS Act and the EA and it held that a construction of cl 1.7 of the EA to the effect that it created a binding obligation did not alter, impair or detract from the WHS Act or Regulations.

Analysis 19 An appeal against the decision of the SAEC lies as of right (FW Act s 565). Section 50, to which we have already referred, is a civil penalty provision. 20 In Bluescope Steel (AIS) Pty Ltd v Australian Workers' Union [2019] FCAFC 84; (2019) 270 FCR 359 (Bluescope Steel v AWU) at [16], Allsop CJ made the point that while the word "contravention" is capable of a wide meaning, in the context of a civil penalty provision the word means the notion of violating or infringing a rule or an obligation or standard which is required. It is only an obligatory term of an arrangement which is capable of being contravened. The source of the obligation must be the award or enterprise agreement and s 50 does not impose liability for breach of an obligation under another statute (Bluescope Steel v AWU at [220] per Collier J). 21 The appellant stated the issue in a way that was not disputed by the respondent: was cl 1.7 of the EA a term of the EA capable of being contravened for the purpose of s 50 of the FW Act or, put another way, on its proper construction, does cl 1.7 create a distinct obligation, owed by the parties to each other, to comply with the content of the existing obligations in the WHS Act, otherwise binding upon them as a matter of State law? 22 Subject to one matter, there was no dispute between the parties as to the relevant principles for the construction of an enterprise agreement. It is sufficient to refer to the following passage in WorkPac Pty Ltd v Skene [2018] FCAFC 131; (2018) 264 FCR 536 (WorkPac v Skene) 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). (see also Target Australia Pty Ltd v Shop, Distributive and Allied Employees' Association [2023] FCAFC 66; (2023) 324 IR 304 at [8]; Qube Logistics (Rail) Pty Ltd v Australian Rail, Tram and Bus Industry Union [2021] FCAFC 83; (2021) 308 IR 39 at [32]; King v Melbourne Vicentre Swimming Club Inc [2021] FCAFC 123; (2021) 308 IR 171 at [42]; and Construction, Forestry, Maritime, Mining and Energy Union v Hay Point Services Pty Ltd [2018] FCAFC 182; (2018) 363 ALR 101 at [8].) 23 There was one aspect of the principles which was in dispute, although we do not think that in the end it was a dispute of great moment. The dispute concerned the extent to which, in approaching the construction of a provision in an enterprise agreement, weight is placed on the fact that an important function and purpose of an enterprise agreement is to create binding obligations between the parties to the agreement. 24 In National Tertiary Education Union v La Trobe University [2015] FCAFC 142; (2015) 254 IR 238 (National Tertiary Education Union v La Trobe University), White J said that the nature and purpose of an enterprise agreement was an important matter of context when approaching the construction of the particular clause in issue. His Honour put the matter in the following way (at [108]): Although it may be a statement of the obvious, it is appropriate to keep in mind that the document which the Court is asked to construe is an enterprise agreement made pursuant to the regime in Pt 2-4 of the Fair Work Act 2009 (Cth) (the FW Act). It is in the very nature of these agreements that they are intended to establish binding obligations. The manner of making such agreements is subject to detailed prescription and their operation is contingent upon approval by the Fair Work Commission, the obtaining of which is itself a matter of detailed prescription. In my opinion, it is natural to suppose that parties engaging in this detailed process intend that the result should be a binding and enforceable agreement. To my mind, that is an important matter of context when approaching the construction of cl 74. 25 In the same case, Jessup J said that there was no a priori assumption that the parties are unlikely to have included a provision which involved the establishment of no concrete entitlement or binding obligation. His Honour put the matter in the following way (at [30]): … Although the content of enterprise agreements is heavily regulated by the provisions of Divs 4 and 5 of Pt 2-4 of the FW Act, there is nothing, so far as I can see, to prevent the parties from including in their agreement provisions or expressions which involve no obligations at all. Indeed, the admixture in industrial agreements of provisions which give rise to obligations and those which are merely "aspirational" is a practice of long standing: see, by way of a well-known example, the argument advanced on behalf of the defendant union in Ford Motor Co Ltd v Amalgamated Union of Engineering and Foundry Workers [1969] 2 QB 303, 330. That the parties to an enterprise agreement have included aspirational or hortatory provisions in their document should be no source of surprise. Neither should there be any a priori assumption that the parties are unlikely to have included a provision which involved the establishment of no concrete entitlement or binding obligation. 26 We find the distinction between an important matter of context and an a priori assumption somewhat elusive. It seems to us that when one is looking at an enterprise agreement which contains both binding obligations and non-binding statements of aims and aspirations, then once one moves to the text of the particular clause and the contextual matters in the particular enterprise agreement, it is those matters which will determine the issue of construction. Nevertheless, we note, as the respondent pointed out, that in Bluescope Steel v AWU, Allsop CJ (with whom Rangiah J agreed) adopted the passage from the reasons of White J as of assistance in the process of construction.

Text 27 Part 1 "Agreement Regulation and Administration", in which cl 1.7 appears, deals with a number of introductory and general matters, such as definitions, a statement of the parties bound by the agreement and the date and period of the operation of the agreement. It also deals with the topics of performance based employees, equal employment opportunity and classification. There are some binding obligations in Part 1, such as those in cl 1.9.4 (see [52] below). 28 Part 2 has only one clause, cl 2.1, and that is entitled "Objectives of Agreement". Parts 3 to 9 inclusive contain the bulk of the substantive obligations in the EA. 29 Clause 1.7 is, at least, descriptive of a state of affairs. The first sentence records that the appellant and its employees are committed to complying with obligations imposed by another legal source, being the WHS Act and applicable regulations. 30 The appellant submits that the language of the first sentence of cl 1.7 is not imperative in the sense of specifying something that must be done or performed and, therefore, does not suggest an intention to impose an obligation. Rather, the text of the first sentence suggests that the parties are recognising a pre-existing set of externally imposed obligations and affirming their commitment to comply with those obligations. 31 The appellant accepts that because of the use of the word "committed", the matter is not quite as clear as it would be if the clause had said something along the lines of "the parties are bound by …" or "the parties acknowledge that they are bound by …". The use of the word "committed" takes the matter beyond mere recognition of legal obligations which the parties undoubtedly owe, but, on the appellant's argument, not to the point of giving rise to mutual promises by the appellant and its employees to each other. The use of the word "committed" is used to record that the parties are aware of and earnest about their existing legal obligations under the WHS Act and applicable regulations. 32 There are three further matters to be noted about the text of cl 1.7. First, had it been the intention of the parties to create legally enforceable obligations, that could have been made clear by relatively simple language, such as "SA Water and its employees will comply" or "agree to comply". Secondly, if the first sentence is promissory, then not only does that mean that employees may sue SA Water for breaches of its obligations, but SA Water would be able to sue their own employees for breaches of the latter's obligations. The advantages of creating additional enforcement avenues in the former case may be readily appreciated, but they are not obvious in the latter case. Thirdly, the second sentence in cl 1.7 is part of the immediate context and is relevant. In our view, it does not create legally enforceable obligations and, in those circumstances, it provides an example of the word "committed" being used in a way that does not create a binding legal obligation. The reference in the second sentence to SA Water valuing safety is clearly not promissory and there is a degree of imprecision in the second part of the second sentence brought about by the reference to certain matters remaining a priority. Furthermore, whilst it is possible that an aspirational statement and binding promise would be included in a single statement, it is in our view unlikely. 33 The point should be made that the reference to an aspirational statement might include two different circumstances. The first is where very general goals are stated and the parties state an intention to work towards and achieve those goals. The second is where there may be pre-existing obligations on one or both parties and the parties desire to recognise and provide an earnest assurance of an intention to comply with them without incorporating what might be (and in this case, is) a large number of obligations into their agreement. 34 The respondent submitted that the language of cl 1.7 is the language of obligation and is certainly capable of being understood as meaning an undertaking and obligation. That includes both the first and second sentences. As to the first sentence, there are the words "are committed to complying with their obligations under the Work Health and Safety Act 2012 and any applicable regulations", and in the second sentence there are the words "committed to ensuring safe and healthy working conditions and work practices in SA Water remain a priority". 35 The respondent submitted that the distinction the appellant seeks to draw between an expression of commitment to compliance with the WHS Act obligations which did not give rise to distinct obligations on the one hand, and a commitment as between the parties to agree to undertake such obligations on the other, was a distinction without a difference and amounted to splitting hairs contrary to the accepted approach to the interpretation of enterprise agreements. The respondent referred to the observations in WorkPac v Skene set out above in support of its argument. As we understood it, the way in which the respondent sought to deploy the passage was to point out that on the assumption the words "will comply" would be sufficient to create a binding obligation, then there is no reason why the words "SA Water and its Employees commit to complying with their obligations" would not also be sufficient and (the next step) the words in the clause "SA Water and its Employees are committed to complying with their obligations" is no more than a different grammatical way of saying "SA Water and its Employees commit to complying with their obligations". The respondent's submission was that these different shades of expression all involved the same basic concept of a binding legal obligation and to hold otherwise is to focus on legal niceties and jargon and to adopt a narrow or pedantic approach. 36 We would not approach the matter as suggested by the respondent. The relevant passage in WorkPac v Skene begins by stating that the starting point for interpretation is the ordinary meaning of the words read as a whole and in context and reference is to be made to the language of the particular agreement understood in light of its industrial context and purpose. 37 We consider that looking at the text alone of the first sentence of cl 1.7, it is descriptive of (relevantly) SA Water's commitment to complying with its obligations under the WHS Act and applicable regulations, rather than an exchange of mutual promises. As we have said, the second sentence in cl 1.7 does not create a binding obligation. While variations of the word "commit" are capable of being used to express promises, the subject matter of the clause, being a broad range of obligations that are already imposed by a body of legislation, means it is unlikely that the parties intended that both SA Water and its employees would additionally be subject to civil penalties for breach of the clause. To discern such an intention would require clearer words. 38 There are many ways in which the parties could have made it clear that they were incorporating the existing obligations in the WHS Act and Regulations into their agreement. They could have used words such as "agree", "shall", "must", "undertake", "promise" and, depending on the precise context, "commit". Another technique would have been to say directly that the obligations are or were incorporated into the agreement. We do not consider that to note and place weight on this consideration is to engage in splitting hairs or to read an enterprise agreement as if it is an Act of Parliament or to ignore the characteristics of the parties to an enterprise agreement or the circumstances under which enterprise agreements are ordinarily negotiated. It is simply having regard to the text of the relevant clause and testing the competing constructions. 39 We turn now to matters of context.

Context 40 Both parties referred to a number of other clauses in the EA where the word "committed" or "commitment" is used, other clauses which directly impose an obligation and clauses which are aspirational or hortatory. As will become clear, a number of the clauses use different language, at least one uses the word "commitment" in association with the word "agree" and a number of clauses are not binding because the subject matter of the clause is not sufficiently precise to give rise to a binding obligation. 41 We start with the clauses identified by the appellant. 42 The appellant submitted that one may detect a technique in the EA of distinguishing between clauses which record that the parties are committed to obligations otherwise imposed by law which do not give rise to binding obligations and clauses which use the direct language of obligation. An example of the former is the first sentence in cl 1.8 which is in similar terms to the first sentence of cl 1.7: 1.8 SA Water and its Employees are committed to complying with the various legislative anti-discrimination and equal opportunity obligations. … That clause is similar to the first sentence of cl 1.7. We consider that it does not give rise to a binding legal obligation. 43 The appellant pointed to two clauses in cl 3 which contain expressions of "the parties are committed" or "Employees will commit" where it is most unlikely that a legal obligation the breach of which gives rise to a civil penalty was intended. 44 Clauses 3.6.1 and 3.6.3 are as follows: 3.6.1 The parties recognise that a skilled and capable workforce underpins SA Water's continuing business success and as such the parties are committed to ongoing capability development. … 3.6.3 Employees will commit to undertaking the capability and professional development deemed necessary by SA Water as being required to do their current job and fulfil business and safety requirements. We will return to these clauses which were also relied on by the respondent. 45 The appellant referred to cl 4.12.5.10 in which the first sentence is clearly aspirational, but followed by sentences and examples which do impose specific rights and responsibilities. Clause 4.12.5.10 is as follows: SA Water is committed to ensuring the safety, health and wellbeing of all Employees. Employees have the right and responsibility to advise their supervisors/managers if they are suffering from fatigue. Supervisors/managers have the right and responsibility to use their discretion to provide breaks in excess of eight (8) hours where these may be required. NOTE: This clause would operate as follows in the examples: … Again, we will return to this clause which was also relied on by the respondent. 46 The appellant referred to cl 15(c)(ii) of Schedule 3 of the EA which is as follows: 15. SA Water will: … (c) Actively case-manage excess Tenured or Transferred Employees to effectively assist in any transition to new roles including: … ii. Provide access to retraining support, with a commitment to providing retraining opportunities within SA Water that are tailored to meet the individual needs of an excess Tenured or Transferred Employee with an individual case management approach; 47 The appellant submitted that this clause does not create an obligation on the appellant giving rise to a civil penalty for a breach of the obligation to provide retraining opportunities within the appellant that are tailored to meet the individual needs of an excess Tenured or Transferred Employee with an individual case management approach. It is hardly to be supposed, so the argument goes, that the parties intended that civil penalties attend such a broad and open-ended "obligation" and the reference therein to "a commitment" is a reference to an earnest assurance, not a binding obligation. Again, we will return to this clause which was also relied upon by the respondent. 48 The appellant submitted, correctly in our view, that there are a number of other clauses in the EA which are clearly aspirational. Whilst it is true that they do not use the word "commitment", the presence of such clauses at the very least reinforces the fact that the EA does not simply contain binding rights and obligations. In addition to Part 2 which sets out objectives of the agreement, the following are examples: 3.1 SA WATER STRATEGIC PLANNING INITIATIVES The parties recognise the profound influence that Employees have on efficiency and organisational performance. … 9.1 FLEXIBLE WORK ARRANGEMENTS … 9.1.1 SA Water will promote and improve the awareness of Flexible Work Arrangements during the life of this Enterprise Agreement. 49 The EA contains provisions which deal with the hours of work and conditions of employment (Part 4), position and salary structure (Part 5), allowances and other benefits (Part 6) where the creating of binding rights and obligations is to be expected. In those areas, one finds the use of the words "will", "shall" and "must" and not the use of "commitment". As the appellant correctly pointed out, one does not find clauses in these Parts of the EA expressed in terms that SA Water are committed to providing certain remuneration or hours of work. 50 We turn to consider clauses in the EA which the respondent relied on as matters of context leading to the conclusion that cl 1.7 imposes an obligation. 51 First, the respondent referred to cl 1.8 which also appears in Part 1 of the EA. As we have seen, the appellant relied on the first sentence in this clause. The first two paragraphs of the clause are as follows: SA Water and its Employees are committed to complying with the various legislative anti-discrimination and equal opportunity obligations. SA Water values diversity and commits to providing appropriate support, training and development to promote diversity in the workplace. The parties commit to the ongoing development and implementation of the equity, diversity and inclusion strategies to minimise the risks of unjustified or unlawful discrimination. These strategies will include … As we have said, we do not consider the first sentence of this clause creates a binding obligation. The second sentence may include a binding obligation, but if it does, it is because of the use of the word "commits" which is different from the words "are committed". The same may be said of the first sentence of the second paragraph and the issue in the case of that sentence may be whether the subject matter of the sentence is sufficiently clear to give rise to a binding obligation. 52 The respondent referred to the first sentence in cl 1.9.4. That clause also appears in Part 1 of the EA and is as follows: SA Water and AMWU will commit to a review of SA Water Metals Classification Criteria and Process 2015 to commence within six (6) months of the Enterprise Agreement being approved. … This clause appears to give rise to an obligation. It uses the words "will commit". 53 The respondent referred to part of cl 3.1 which appears in Part 3 of the EA. Part 3 of the EA is said to deal with matters of employee relations management and cl 3.1, in particular, is directed to the appellant's strategic planning initiatives. The respondent relies on the last sentence in this clause which is as follows: … The parties agree subject to the proper consultation to cooperate and commit to strategic planning initiatives arising out of the SA Water strategic plan. The significant word in this sentence is "agree" and if the sentence gives rise to a binding obligation, it is because of the use of that word. 54 The respondent referred to cl 3.2.14 which contains the heading "Principles for Consultation". It is relevantly as follows: SA Water acknowledges the important role which Employees and their representatives play in restructuring and change processes as stakeholders to the final outcomes. The purpose of consultation is to: … 4. Ensure the commitment of the parties to this Agreement. We are unable to see how this clause advances the respondent's argument. 55 The respondent also referred to cl 3.6 which has the heading "Capability and Skills Formation and Professional Development" and, in particular, cll 3.6.1 and 3.6.3. Those clauses are set out above (at [44]). 56 We agree with the appellant that cl 3.6.1 is unlikely to give rise to a legal obligation. Apart from anything else, the subject matter of the sentence - ongoing capability - would not be sufficiently precise to give rise to a binding legal obligation. 57 Whilst the words "will commit" in cl 3.6.3 are different from "are committed", we agree that cl 3.6.3 is unlikely to give rise to a legal obligation such that employees who declined to undertake capability and professional development deemed necessary by the appellant would be subject to civil penalties. 58 The respondent also referred to cl 4.12.5.10 which is set out above (at [45]). 59 The respondent submitted that the first sentence in this clause is capable of being read as an obligation. We do not agree. The first sentence read in the context of the clause as a whole seems to us to be an introductory statement providing an explanation for the obligations set out thereafter. 60 The respondent referred to cl 6.3.2 which appears under the heading "First Aid Allowance". It refers, in particular, to the second paragraph which is as follows: During the life of this Agreement SA Water commits to undertaking a risk assessment of the adequacy of its designated First Aid Officer coverage across the Corporation. We agree that this clause likely gives rise to an obligation. The use of the word "commits" is significant as is the fact that the subject matter is not a pre-existing obligation. 61 Finally, the respondent referred to cl 15(c)(ii) in Schedule 3 of the EA and that clause is set out above (at [46]). 62 This clause involves the use of the word "commitment" in a context which clearly involves an obligation by reason of the use of the word "will". 63 As an overall submission, the respondent contends that there is no requirement that the words "will", "shall" and "must" be used before a binding obligation arises. The use of one of those words is sufficient, but not necessary as the clauses set out above illustrate. 64 Our analysis of the contextual matters to which the parties referred leads us to the conclusion that they are inconclusive in terms of the proper construction of cl 1.7. There are aspirational clauses in the EA and that is relevant. At the same time, the words "commit" and "commitment" can be used in a way which, in the particular context and in association with other words, indicates a binding obligation.

Purpose 65 The respondent made a submission that its construction of cl 1.7 advances the purpose of the clause. The argument is that the clause on any view expresses a commitment by the appellant (and its employees) to comply with their obligations under the WHS Act and applicable regulations. It would further or advance that commitment if the clause was construed as promissory because it would give those on site the right to enforce the obligation (be it the employer, employees or their unions) in addition to a regulator under the WHS Act or a prosecutor of an offence under the Act, "both of whom will be further removed from what is occurring". That is true to a point. However, it may equally be said that it is not incongruous in terms of purpose that in an agreement containing a number of aspirational or hortatory statements there is a statement, not amounting to a binding obligation, of an earnest commitment to comply with a pre-existing obligation. It seems to us that reference to purpose does not advance the issue of construction.

Cases 66 The parties referred to various cases. We will address the three principal cases referred to by the parties. 67 In National Tertiary Education Union v La Trobe University, the Full Court of this Court considered an appeal from a single judge who had held in an application involving the determination of a separate question that a clause in an enterprise agreement was merely aspirational and did not create a binding obligation. 68 The relevant clause in the enterprise agreement, cl 74, was in the following terms: The University is committed to job security. Wherever possible redundancies are to be avoided and compulsory retrenchment used as a last resort. The University reserves the right to use the agreed redundancy procedures and provisions set out in this Agreement when all reasonable attempts to mitigate against such action and to avoid job loss have been unsuccessful. By a majority (Bromberg and White JJ; Jessup J dissenting), the Full Court held that the second sentence in cl 74 created a binding obligation and therefore allowed the appeal. 69 The appellant in that case accepted that the first sentence in cl 74 did not create a binding obligation. The majority of the Court held that the second sentence did create a binding obligation. The words "will" or "shall" which were used elsewhere in the enterprise agreement, were clearly capable of evidencing the creation of a legal obligation, but that did not mean that other words, depending on context, were not also capable of creating a legal obligation (Bromberg J at [70]; White J at [114]). Justice White referred to the second sentence of cl 74 as involving the "emphatic language of obligation" and not a "salve" or an expression of comfort and reassurance (at [112]). 70 We do not consider this case to be of assistance in resolving the construction issue before us. The first sentence was not the subject of the Court's decision and, in any event, relates to quite a different matter than obligations under the WHS Act and applicable regulations. The second sentence in cl 74 which was in issue in the case was in very different terms to cl 1.7. 71 In Gramotnev v Queensland University of Technology, the Queensland Court of Appeal considered an appeal from a decision of a single judge who had determined that the provisions of the respondent's enterprise bargaining agreements, among other documents, did not constitute a term or terms of an employment contract between the appellant and the respondent. 72 The Court (Jackson J at [64], with whom Margaret McMurdo P and Holmes JA agreed) agreed with the primary judge on this point, albeit for different reasons. Of present relevance is his Honour's observation that a clause in the enterprise agreement that the parties are committed to equal opportunity and freedom from all forms of discrimination as determined by legislation or the Council of the University and that the respondent is committed to having policies or programs on equal opportunity, prevention of discrimination or harassment and conflict resolution for discriminated related conflicts are commitments by the respondent which are not obligations that might operate as contractual terms between the respondent as employer and the applicant as an employee (at [24]). 73 This decision provides some assistance to the appellant in that the clause referred to "are committed" and "is committed" and one of the subject matters of the clause is legislation. However, the assistance is relatively slight because, in our respectful opinion, the exercise itself of relying on other cases with different clauses in different contexts is of limited utility. 74 Bluescope Steel v AWU was a decision of the Full Court of this Court on appeal from a single judge. The issue was whether the appellant had made the correct superannuation contributions in respect of certain of its employees and that, in turn, involved in part, consideration of whether an award and two enterprise agreements created binding obligations in respect of the payment of superannuation. The Court held that the award did not create binding obligations, but that the enterprise agreements did (Allsop CJ, with whom Rangiah J agreed, at [16]-[17]; Collier J at [211], [235]). The clause in the enterprise agreements read, relevantly, as follows: 7.2 The Company will make contributions to an employee's superannuation account at a minimum in compliance with the Superannuation Guarantee (Administration) Act 1992 (Cth), as varied from time to time. Additionally for permanent employees who are members of the BlueScope Steel Superannuation Fund or Australian Super, subject to these statutory minimum contributions and the Basic Member Contributions an employee makes to their superannuation account, the Company will make contributions into an employee's superannuation account in accordance with the below scale: … 75 The Chief Justice said (at [18], [19] and [21]): 18 Clause 7, and in particular cl 7.2 of the 2012 and 2015 Agreements is, however, worded quite differently to cl 7 of the 2006 Award. The clause commences with words which are capable of being understood as words of undertaking and obligation: "The Company will make contributions…" It then proceeds to refer to another additional payment: "Additionally for [certain] employees…the Company will make contributions…" There was little argument but that this was an obligation undertaken. Why would not the similarly worded first sentence also be obligatory? 19 I read cl 7.2 as an undertaking of future conduct by the Company. … … 21 There is nothing aspirational about an employer saying, in language that connotes obligation, that it will make superannuation contributions. Language capable of conveying obligation on the subject of how much employees will receive for their labour is unlikely to be intended as aspirational or non-binding. The superannuation legislation gives no enforceable rights to employees. When they bargain for a form of words that connotes an obligation to pay it at a certain level, I see no reason whatsoever not to accept the words as binding and enforceable. (See also Collier J at [238]-[239].) 76 Again, the language of the relevant clause is different from the language of cl 1.7 and we do not consider this case to be of direct assistance. 77 The appellant submitted that the Court below erred in saying that cl 1.7 is analogous to the clause (cl 7.2) considered in Bluescope Steel v AWU. That was because they both incorporated external obligations which the party (i.e., the employees) had no standing to enforce. That is not quite correct in that in Bluescope Steel v AWU, the employer had no duty imposed by law to pay superannuation contributions, although if it did not pay the contributions, it suffered by way of the imposition of a tax. 78 We do not consider that either party gains much from the Chief Justice's observation, with respect. We consider that what his Honour was saying was that insofar as it is suggested that it is unlikely the parties would replicate in their agreement an obligation already owed at law, then there were two answers to that argument, being that it did not replicate an obligation otherwise owed and, in any event, the fact of duality of consequences was not a reason, or a strong reason, to interpret the clause as not creating binding legal obligations. 79 Having regard to our conclusions with respect to context, purpose and the cases, we consider that the answer to the issue of construction lies in the text of the first sentence of cl 1.7 aided by our view of the meaning of the second sentence. The first sentence of cl 1.7 does not create a binding obligation.

Conclusion 80 The appeal must be allowed. 81 The preliminary issue of whether on the proper construction of the SA Water Corporation Enterprise Agreement 2018 as varied by the SA Water Corporation Variation Agreement 2020 [2020] FWCA 3581 clause 1.7 imposes an enforceable obligation on the SA Water Corporation, punishable by the imposition of pecuniary penalties under the Fair Work Act 2009 (Cth) in the event of non-compliance with that obligation be answered as follows: No. 82 The parties agreed that should the answer to the preliminary issue be no, then the proceeding brought by the respondent should be dismissed. We consider that that is an order more appropriately made by the South Australian Employment Court and we will remit the proceeding to that body for that purpose. I certify that the preceding eighty-two (82) numbered paragraphs are a true copy of the Reasons for Judgment of the Honourable Justices Besanko, Charlesworth and Jackson.

Fair Work Act 2009(Cth)ss 50, 565

Work Health and Safety Act 2012(SA)ss 14, 19, 37, 38, 47

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