[2013] FWCFB 8557 |
FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.604 - Appeal of decisions
JUSTICE ROSS, PRESIDENT |
MELBOURNE, 23 DECEMBER 2013 |
Appeal against decision [2013] FWC 5453 of Commissioner Booth at Brisbane on 27 August 2013 in matter number C2012/5044 - nature of the appeal - permission to appeal granted - appeal upheld - decision quashed
[1] This matter concerns a dispute between the Maritime Union of Australia (the MUA) and DP World Brisbane Pty Ltd (DP World) about the calculation of back pay for a group of employees (‘supplementary employees’) covered by the DP World Brisbane Enterprise Agreement 2011 (the 2011 Agreement). A ‘supplementary employee’ is an employee who is a non-permanent casually engaged person to supplement the use of other employees in accordance with clause 10 of the Stevedoring Award. On 27 August 2013 Commissioner Booth issued a decision determining the dispute. DP World has appealed that decision. We set out some of the background facts before turning to the appeal.
[2] The 2011 Agreement replaced the DP World Brisbane Workplace Agreement 2008 (the 2008 Agreement). The 2008 Agreement had a nominal expiry date of 30 June 2011. The 2011 Agreement was approved on 23 May 2012 1 and commenced operation on 30 May 2012. The nominal expiry date of the 2011 Agreement is 30 June 2014.
[3] On 24 August 2012 the MUA filed an application pursuant to s.739 of the Fair Work Act 2009 (Cth) (the Act) for the Commission to deal with a dispute in accordance with the dispute settlement term in the 2011 Agreement. The dispute concerns certain payments to be made to ‘supplementary employees’ during the period from the nominal expiry of the 2008 Agreement (1 July 2011) to the approval of the 2011 Agreement (23 May 2012). For convenience we refer to this period as the ‘dispute period’.
[4] The parties jointly submitted an agreed Statement of Facts and Issues in the proceedings at first instance. It was common ground that under the 2008 Agreement supplementary employees were entitled to the hourly rates set out in clause 11.2, a loading of 20 per cent on their hourly rate (see Clause 26.2.2) and a ‘consolidated allowance’ of $31.75 for each shift worked (under clause 2.10 Part B). The consolidated allowance is a payment relating to the working of a shift, irrespective of the number of hours worked, and is made up of the allowances that would be payable under the Stevedoring Industry Award. Under the 2008 Agreement three classes of employees were entitled to the consolidated allowance - variable salary employees; guaranteed wage employees; and supplementary employees.
[5] It was also common ground that during the dispute period supplementary employees were paid the hourly rates in clause 11.2 of the 2008 Agreement, a 20 per cent loading on those rates, and the consolidated allowance in clause 2.10 Part B of the 2008 Agreement.
[6] Under the 2011 Agreement supplementary employees are paid the hourly rates derived from clause 11.2 and a loading of 25 per cent on their hourly rate (see clause 26.2.2). The 2011 Agreement also provides that supplementary employees are not entitled to receive the consolidated allowance.
[7] Clause 26.2 of the 2011 Agreement provides as follows:
“26.2 Payment
26.2.1 A Supplementary Employee will be engaged as a grade 2 in accordance with the Stevedoring Award. Subject to clause 12.2, where a Supplementary is engaged in work of a higher grade, the Employee shall be paid the rate for the higher grade.
26.2.2 Supplementaries shall be entitled to an hourly rate equivalent to 1/35th of the weekly rate as specified in clause 11.0 plus a loading of 25%, shift and holiday premiums, overtime, casual engagement and meal allowances where applicable in accordance with the Stevedoring Award. Supplementary Employees are not entitled to receive the consolidated allowance.
26.2.3 Where a Supplementary Employee is allocated to work an eight hour shift in a terminal, and the shift is extended, overtime payments will apply in accordance with this Agreement. Where a Supplementary Employee is allocated to a 4 hour shift, and the shift is extended to a minimum eight hours, the Employee will be paid eight hours at the applicable shift rate.”
[8] Clause 6.1 provides that the 2011 Agreement operates from the date of approval. The hourly rates paid to supplementary employees are derived from clause 11.2 which states:
Rates of pay shall be based upon the following rates for each classification
Operations/Maintenance Employees (Excluding Maintenance Rostered Permanent Employees)
SIA Grade |
Weekly rate from first full pay period on or after 1 July 2011 |
Weekly rate from first full pay period on or after 1 July 2012 |
Weekly rate from first full pay period on or after 1 July 2013 |
1 |
$791.99 |
$823.67 |
$856.62 |
2 |
$870.08 |
$904.89 |
$941.08 |
3 |
$937.30 |
$974.79 |
$1013.78 |
4 |
$1013.62 |
$1054.16 |
$1096.33 |
5 |
$1044.37 |
$1086.14 |
$1129.59 |
6 |
$1154.38 |
$1200.55 |
$1248.58 |
[9] Clause 11.2 expressly backdates the operation of the first wage increase provided in the 2011 Agreement, to 1 July 2011.
[10] It is common ground that the hourly rates of pay derived from clause 11.2 of the 2011 Agreement apply to supplementary employees for the dispute period. The issue in contention concerns the quantum of the loading (20 or 25 per cent) applicable and whether the consolidated allowance was payable to supplementary employees during the dispute period.
[11] In the proceedings at first instance DP World contended that back pay was to be determined as if the 2011 Agreement had commenced operation on 1 July 2011, by applying the following methodology:
(i) identifying the amounts paid to the supplementary employees in the dispute period (i.e. 1 July 2011 to 23 May 2012);
(ii) applying from 1 July 2011 the higher hourly rate of pay under the 2011 Agreement and the increased loading (25%), but not paying the consolidated allowance; and
(iii) if the calculation in (ii) was greater than what the employees had received in (i), paying the employees the difference. If the calculation in (ii) was less than what the employees had already received, no back payment arose.
[12] The MUA disagreed with the methodology proposed - specifically it disputed the approach in step (ii) and contended that back pay was to be determined by applying, from
1 July 2011, the higher hourly rate of pay under the 2011 Agreement but assuming the continued operation of the 20% loading and the consolidated allowance.
[13] The Statement of Agreed Facts and Issues expresses the respective positions of the parties in the following way:
“The Union says that the intentions of the parties, and the correct construction of the 2011 Agreement, were that changes to salary commenced on 1 July 2011 but casual loading and consolidated allowance changes commenced on 23 May 2012 in accordance with the words of the agreement.
DP World says that the intention of the parties, and the correct constructions of the 2011 Agreement, was for all three elements to commence from the ‘back pay’ date (1 July 201): salaries, the increased casual loading and cessation of the consolidated allowance.”
[14] In the proceedings at first instance the MUA adduced evidence from John Coutts, a member of the MUA employed by DP World; 2 Trevor Munday, Deputy Branch Secretary of the Queensland Branch of the MUA3 and Warren Smith, Assistant National Secretary of the MUA.4 DP World adduced evidence from Mr Mark Shallcross Hulme, Director and General Manager of DP World Brisbane.5
[15] Messrs Munday, Smith and Hulme were all involved in the negotiation of the 2011 Agreement. The evidence of Mr Smith 6 and Mr Hulme7 was that the question of whether the changes to the consolidated allowance and the loading for supplementary employees would be retrospective or prospective was not the subject of any discussion during the negotiations for the 2011 Agreement. Mr Coutt’s unchallenged evidence was that there was no mention in any of the written or verbal reports he got from the MUA or DP World suggesting that the removal of the consolidated allowance would be back dated.8
[16] The MUA also submitted that the statutory context surrounding the making of the 2011 Agreement was consistent with the interpretation for which it contended. In particular the MUA relied on the employer’s Form F17 filed in support of the application to approve the 2011 Agreement.
[17] DP World contended that the Commission did not have jurisdiction to determine the dispute. There were two limbs to this argument. First, s.739(3) of the Act limits the exercise of the Commission’s powers to the terms of the dispute resolution term in the 2011 Agreement. To enliven arbitral power clause 24 provides that there must be a ‘dispute arising in the workplace in regard to the application of this Agreement’. DP World submitted that there was no such dispute. In relation to these matters DP World advanced the following submission:
“2.13 From the date of the commencement of the 2011 Agreement, on the Applicant’s case, there is no dispute about the application of those provisions at all. The Applicant does not advance the proposition that the Respondent has breached the provisions of the 2011 Agreement since its commencement. Wage rates have been paid as required; the casual loading has been increased from 20 to 25%; and the consolidated allowance has been discontinued.
2.14 Viewed this way, the corollary is that the Applicant’s dispute is based on the proposition that the 2008 Agreement required the payment of the consolidated allowance for so long or it operated (i.e. until the 2011 Agreement commenced operating and replaced it on 23 May 2012). It relates to a ‘dispute period’ that existed before the commencement of the 2011 Agreement. This is supported by the draft orders proposed by the Applicant which seek orders for payment of amounts “consistent with the terms of the 2008 Agreement”. 9
2.15 Consequently, there is not a dispute about the application of the 2011 Agreement at all. Rather, what is raised is a question of legal rights and obligations under the 2008 Agreement. That question:
(a) is not (and cannot) be raised by this application; and
(b) is one that must be dealt with elsewhere by a court exercising the judicial power of the Commonwealth.”
[18] Second, DP World submitted that the application was beyond power because it asks the Commission to exercise judicial power as it seeks to ascertain, declare and enforce legal rights. The High Court’s judgment in CFMEU v AIRC 10 and a decision of a Full Bench of the Commission in CFMEU v Geelong Grammar School11 were relied on in support of this proposition.
[19] In the event that the Commission determined that it did have jurisdiction to deal with the dispute DP World submitted that the facts did not support the MUA’s asserted interpretation of the back payment of wages.
[20] On 27 August 2013 Commissioner Booth issued a decision determining the dispute. 12 The Commissioner dealt with the evidence (at [26] to [35]) and then concluded in the following terms (at [36] to [39]):
“[36] If one was restricted to the words of the 2011 Agreement itself, the position proposed by the MUA appears to be the only reading open. That is, in the absence of an express date or reference to an event, or explicit integration of the wages with the loading and allowance, a provision in the 2011 Agreement takes effect from the commencement of the Agreement.
[37] There is no basis on the evidence before me to conclude a mutual intention as argued by DP World whether in the Agreement itself, the documents tendered, or other evidence before the Commission.
[38] In the absence of other evidence, it is reasonable to conclude that changes to the increase in the casual loading and the abolition of the consolidated allowance take effect from commencement of the Agreement. These elements are not integrated with wages on the evidence before the Commission, and accordingly there is no other date from which one might otherwise rationally commence the changes. This view is fortified by the evidence that the changes operate to the detriment of the employees and several other non-salary related benefits that might off-set the detriment also fall into the same category of clauses. Further, other allowances expressly commence from the date of commencement.
[39] I find that Supplementary Employees are entitled to payment of the consolidated allowance and a 20% casual loading during the dispute period. It is a matter for the parties to ascertain the implications for individual employees. Orders will issue accordingly.”
[21] In essence, the Commissioner agreed with the MUA’s approach and concluded that the change to the loading and the abolition of the consolidated allowance commence from the commencement of the 2011 Agreement and not beforehand. The Commissioner decided that the supplementary employees were entitled to the payment of the consolidated allowance and a 20% loading during the dispute period.
[22] DP World has appealed the Commissioner’s decision. The grounds of appeal are as follows:
“1. The learned Commissioner erred in finding that the Commission had jurisdiction to hear and determine the proceedings.
2. The learned Commissioner erred by finding that pursuant to the DP World Brisbane Enterprise Agreement 2011 (the 2011 Agreement), Supplementary Employees are entitled to payment of a consolidated allowance and a 20% casual loading during the period from 1 July 2011 to 23 May 2012 (the Dispute Period).
3. The learned Commissioner erred in finding that, on the evidence before the Commission, the casual loading and the consolidated allowance were not elements that are integrated with wages.
4. The learned Commissioner should have found that, on the proper construction of the 2011 Agreement, or upon the proper application of the principles of interpretation, for the purposes of back payment under the 2011 Agreement, Supplementary Employees were entitled to a payment of the increased hourly rates under clause 11, an increased casual loading of 25% and no payment of the consolidated allowance during the Dispute Period.”
[23] A preliminary issue arises about the nature of such an appeal and whether permission to appeal is required.
[24] Clause 24 of the 2011 Agreement deals, relevantly, with disputes ‘in regard to the application of this Agreement’. Clause 24.1.1(e) deals with the Commission’s role in resolving such disputes:
“24.1.1(e) Where the dispute has not been resolved despite the foregoing procedures being followed and subject to there being no stoppage of work in relation to the issue at hand, either party may refer the matter to FWA for arbitration if necessary in which case the decision will be accepted by the parties subject to any appeal rights.” [emphasis added]
[25] In AMWU v Silcar Pty Ltd (Silcar) 13 a Full Bench considered whether the dispute resolution procedure in the agreement in that case gave rise to an independent right of appeal (and therefore was not subject to permission to appeal) or whether it merely provided for an appeal in accordance with the appeal processes in the Act, such that permission to appeal was required. The dispute resolution procedure in clause [10] of the Silcar agreement provided as follows:
“The decision of FWA will bind the parties, subject to either party exercising a right of appeal against the decision to a Full Bench.” [emphasis added]
[26] The Full Bench concluded that the above clause created an independent right of appeal for which permission to appeal was not required. 14 Clause 24.1.1(e) of the 2001 Agreement is expressed in different terms and the meaning of the expression ‘subject to any appeal rights’ was a matter of contention in the proceedings.
[27] The appellant submits that the expression is substantively similar to the provision in the Silcar agreement (see [25] above) and hence it creates an independent right of appeal for which permission to appeal is not required. The MUA contends that the reference to ‘any appeal rights’ in clause 24.1.1(e) is a reference to the appeal procedure in s.604 of the Act and as a consequence the appellant must persuade the Commission to grant permission to appeal. We turn to s.604 shortly but first deal with the approach to be taken to the interpretation of an enterprise agreement approved under Division 4 of Part 2-4 of the Act.
[28] The task of construing an expression in an enterprise agreement (such as the expression ‘subject to any appeal rights’ in clause 24.1.1(e)) begins with a consideration of the ordinary meaning of the words having regard to their context and purpose. As Gleeson CJ and McHugh J observed in Amcor Limited v CFMEU:
“The resolution of the issue turns upon the language of the particular agreement, understood in the light of its industrial context and purpose ...” 15
[29] Context may appear from the text of the agreement taken as a whole, its arrangement and the place in it of the provision under construction. 16 The legislative context against which the agreement was made and in which it was to operate is also a relevant contextual consideration.17
[30] The task is to identify the common intention of the parties as expressed in the terms of their agreement, the subjective intentions or expectations of the parties are irrelevant. In Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd 18 the High Court described the task, in the context of commercial contracts, as follows:
“It is not the subjective beliefs or understandings 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. References to the common intention of the parties to a contract are to be understood as referring to what a reasonable person would understand by the language in which the parties have expressed their agreement. The meaning of the terms of a contractual document is to be determined by what a reasonable person would have understood them to mean. 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.”
[31] Importantly, the task of interpreting an enterprise agreement does not involve re-writing a provision in order to give effect to the Commission’s view of what would be fair and just, without regard to the terms of the agreement. As Madgwick J observed in Kucks v CSR Limited 19:
“But the task remains one of interpreting a document produced by another or others. A court is not free to give effect to some anteriorly derived notion of what would be fair or just, regardless of what has been written into the award. Deciding what an existing award means is a process quite different from deciding, as an arbitral body does, what might fairly be put into an award. So, for example, ordinary or well-understood words are in general to be accorded their ordinary or usual meaning.”
[32] The Acts Interpretation Act 1901 (Cth) may also be applicable to the construction of agreements approved under Division 4 of Part 2-4 of the Act, as if the agreement were an act. This may be so because of the operation of s.46 of the Acts Interpretation Act 1901 (Cth), which states:
“s.46 Construction of instruments
(1) If a provision confers on an authority the power to make an instrument that is neither a legislative instrument for the purpose of the Legislative Instruments Act 2003 nor a rule of court, then
(a) this Act applies to any instrument so made as if it were an Act and as if each provision of the instrument were a section of an Act; and
(b) expressions used in any instrument so made have the same meaning as in the enabling legislation as in force from time to time; and
(c) any instrument so made is to be read and construed subject to the enabling legislation as in force from time to time, and so as not to exceed the power of the authority.
(2) If any instrument so made is to be read and construed subject to the enabling legislation as in force from time to time, and so as not to exceed the power of the authority.”
[33] The application of the Acts Interpretation Act 1901 (Cth) to awards made by the Commission was the subject of some consideration by French J (as he then was) in City of Wanneroo v Australian Municipal Administrative, Clerical and Services Union (Wanneroo), 20 in which his Honour said:
“The interpretation of legislative instruments is dealt with in the Legislative Instruments Act 2003 (Cth). Awards and agreements made under the Act are declared, by s 7(1) of the Legislative Instruments Act, not to be legislative instruments — see Item 18 in the table set out in s 7(1). This leaves such awards and agreements within s 46 of the Acts Interpretation Act 1901 (Cth) ...
An award is an instrument made by an authority, in this case the Australian Industrial Relations Commission, and so attracts the application of the Acts Interpretation Act for the purposes of its interpretation.”
[34] Section 7(1) of the Legislative Instruments Act 2003 (Cth) declares that ‘fair work instruments (within the meaning of the Fair Work Act 2009)’ are not ‘legislative instruments.’ The definition of a ‘fair work instrument’ in s.12 of the Act includes an enterprise agreement. An ‘enterprise agreement’ is defined to include, relevantly, a ‘single enterprise agreement’ which is in turn defined to mean an enterprise agreement made as referred to in s.172(2). The 2011 Agreement is such an agreement. It follows that for the purpose of s.46(1) of the Acts Interpretation Act 1901 (Cth) enterprise agreements may be instruments which are neither legislative instruments nor a rule of court.
[35] Section 46(1) of the Acts Interpretation Act 1901 (Cth) may apply because an enterprise agreement is an instrument which is neither a legislative instrument nor a rule of court and which is made by an authority (the Commission) pursuant to a power conferred on it by the Act. While s.182 speaks of an enterprise agreement being ‘made’ when a majority of the employees that will be covered by it cast a valid vote to approve the agreement, the operation and enforcement of enterprise agreements is contingent on their approval by the Commission. Enterprise agreements come into operation seven days after their date of approval by the Commission, or from any later date specified in the agreement itself (s.54(1)). Section 50 provides that a person must not contravene a term of an enterprise agreement that applies to the person. This is a civil remedy provision and means that enterprise agreements are enforceable in the same way as awards and other instruments made under the Act. An agreement only applies to a person while it is in operation (s.52) and as we have noted an agreement only operates once it has been approved by the Commission. 21
[36] A consequence of the application of the Acts Interpretation Act 1901 (Cth) to enterprise agreements would be that extrinsic materials may be used as an aid to construction, as provided for in s.15AB of that act.
[37] While the parties before us accepted that the Acts Interpretation Act 1901 (Cth) applied to enterprise agreements, it is unnecessary for us to decide this issue because in the circumstances of this case there is no relevant extrinsic material as to the parties’ mutual intentions in respect of clause 24.1.1(e).
[38] The appellant sought to persuade us that words used in clause 24.1.1(e) are the same as those in clause [10] of the Silcar agreement and hence the same intention may be inferred, that is to create an independent right of appeal. We disagree. The proposition that the words used are the same (or substantially the same) therefore the same result should follow ignores the arrangement of those words in clause 24.1.1(e). Both the 2011 Agreement and the Silcar agreement use the preparatory words ‘subject to’, which are intended to condition the earlier proposition that the arbitration of the dispute will ‘bind the parties’ (in the 2011 Agreement) or ‘be accepted by the parties’ (in Silcar). But the meaning of the words that follow are quite different.
[39] The Silcar agreement speaks of either party exercising ‘a right of appeal’ to a Full Bench and this expression was interpreted as creating an independent right of appeal. In other instances where the Commission has concluded that a dispute settlement term has created an independent right of appeal the relevant term provided that the Commission’s arbitration of a dispute was ‘subject to’ ‘a right of appeal’. 22 By contrast clause 24.1.1(e) of the 2011 Agreement uses the expression ‘subject to any rights of appeal’. The reference to ‘any rights of appeal’ is plainly a reference to any rights of appeal the parties may have outside of the express terms of the agreement itself. This raises an issue as to the application of s.604 of the Act in these circumstances.
[40] DP World relied on the judgment of Rares J in Linfox Australia Pty Ltd v Transport Workers Union of Australia 23 (Linfox) in support of its contention that s.604 of the Act has no work to do in the context of an appeal from a decision made under a dispute settlement term in an enterprise agreement. In this regard counsel for DP World made reference to24 the following passage from his Honour’s judgment;
“[27] The function that the Full Bench of the Commission exercised was the agreed appellate mechanism under cl 22.1(f) of the enterprise agreement. That function of the Commission was not an exercise of its public law functions under the Act. Rather the Full Bench performed a function in which it acted as a private arbitrator, appointed by consent of Linfox and the Union, as parties to the enterprise agreement, in the manner provided under the Act for the conduct of appeals within their agreed private arbitral process and the making of a final decision in consequence.” 25 [emphasis added]
[41] We return to the emphasised words shortly. Counsel also relied on the fact that the issue of permission to appeal was not dealt with expressly in the dispute settlement terms under consideration in Silcar and Linfox.
[42] Dealing with the second point first, while the relevant clauses in Silcar and Linfox do not deal expressly with the issue of permission to appeal, they do so implicitly. This is so because the relevant clause in each case stated that the parties to the enterprise agreement had a ‘right of appeal’. This may be contrasted with s.604(1) of the Act which provides an appeal mechanism, but does not confer a right of appeal. Section 604(1) relevantly provides:
“s.604(1) A person who is aggrieved by a decision ... may appeal the decision, with the permission of the FWC.” [emphasis added]
[43] By conferring a right of appeal the parties to the enterprise agreements in Silcar and Linfox may be taken to be modifying the requirements of s.604(1) such that permission to appeal is not required.
[44] As to the judgment of Rares J in Linfox, we are not persuaded that his Honour’s observations at [27] of the judgment assist DP World. Linfox is authority for the proposition that in dealing with an appeal from a decision of the Commission under a dispute settlement term in an enterprise agreement the Full Bench is acting as a private arbitrator. The Commission’s private arbitral function is to resolve the dispute that has arisen between the parties and this has implications for the Commission’s powers and the scope of subsequent judicial review. On appeal the Full Bench had authority, by force of the parties’ agreement, to resolve all matters of fact and law (Linfox at [33]).
[45] The Full Bench’s task as a private arbitrator is clearly different from, and broader than, the exercise of its public appeal functions under s.604 of the Act. But it is apparent from his Honour’s judgment that he was not dealing with the matter which is before us, namely whether s.604 has any work to do in circumstances where the parties to an enterprise agreement do not expressly provide for an appeal from a decision of the Commission, as private arbitrator, under the dispute settlement term. The emphasised words in the passage from his Honour’s judgment (set out at [40] above) suggest that the power of private
arbitration conferred in an enterprise agreement can operate in conjunction with the manner in s.604 for the conduct of appeals.
[46] Subject to two observations, we have concluded that absent a provision to the contrary in the enterprise agreement the appeal procedure in s.604 of the Act applies to decisions made by Commission members exercising a power of private arbitration authorised by the dispute settlement term. We deal first with our reasons for that conclusion before turning to the two observations.
[47] As a matter of general principle when jurisdiction is conferred on an established court or tribunal it may be assumed that the legislature intended to take the court as it finds it, with all its incidents including any liability to appeal. This presumption is clearly stated by the High Court in Electric Light and Power Supply Corp Ltd v Electricity Commission of New South Wales:
“When the legislative finds that a specific question of judicial nature arises but that there is at hand an established court to the determination of which the question may be appropriately submitted, it may be supposed that if the legislative does not mean to take the court as it finds it with all its incidents including the liability to appeal, it will say so. In the absence of express words to the contrary or of reasonably plain intendment the inference may be made that it takes it as it finds it with all its incidents...” 26
[48] The above proposition also applies to tribunals. 27 When the parties to an enterprise agreement choose to confer a power of private arbitration on the Commission then, absent any contrary intention, they take the Commission as they find it, including the liability to appeal. On appeal the Commission exercises a power of private arbitration conferred by the implied agreement of the parties (s.739(4)). Such a conclusion is also consistent with Full Bench authority.
[49] Silcar was based, in part, on an earlier Full Bench decision in Victoria Police Force v Police Federation of Australia (Victoria Police). 28 In that matter the Full Bench concluded that the scope to appeal a decision or determination of the Commission pursuant to a dispute resolution term is an agreement, was limited and such a decision could be the subject of an appeal under s.120 of the Workplace Relations Act 1996 (Cth) (the WR Act) in relation to jurisdictional error. The Full Bench said, at [13]:
“[13] We deal now with Victoria Police’s contention that an appeal can be brought pursuant to cl.19.5.5 of the Agreement and s.711(1)(a) of the Act. In our view the terms of cl.19.5.5 clearly indicate that the parties intended to confer a right of appeal, subject to leave being granted, to a Full Bench in the circumstances of this case. The submission that cl.19.5.5 is intended to reflect the rights conferred by s.120 of the Act is untenable. Section 120(1)(a) permits an appeal against an order. Section 711(2) provides that in conducting a dispute resolution process under the terms of a workplace agreement the Commission cannot make orders. Section 120(1) does not provide for an appeal against a decision or determination (which is not an order) unless there is jurisdictional error in which case s.120(1)(f) is available. Any decision or determination which does not involve jurisdictional error cannot be appealed under s.120. By including in cl.19.5 an appeal against a “decision/determination” the parties have indicated an intention to provide for an appeal in circumstances where s.120 would not be available, assuming the decision or determination was not affected by jurisdictional error of the kind potentially within s.120(1)(f). Clause 19.5.5 therefore provides a foundation for the appeal. Because that foundation is not confined to jurisdictional error, as s.120(1)(f) is, we shall deal with the appeal under cl.19.5.5.”
[50] It is implicit in Victoria Police that the Full Bench was of the view that s.120 of the WR Act provided an avenue of appeal from a decision by the Commission under a dispute settlement term in an enterprise agreement and that the parties to the enterprise agreement could agree to modify the operation of s.120.
[51] Turning again to clause 24.1.1(e) of the 2011 Agreement, the reference to ‘any appeal rights’ is a reference to the appeal procedure in s.604 of the Act. As noted earlier the Acts Interpretation Act 1901 applies to enterprise agreements and s.46(1)(b) of that act provides that expressions used in any instrument (such as an enterprise agreement) have the same meaning as in the enabling legislation (the Act). In the Act reference to an appeal can only be a reference to the appeal procedure in s.604.
[52] As we mentioned earlier, our conclusion on this issue is subject to two observations. The first is that while the appeal procedure in s.604 applies, the role of the Full Bench in such circumstances is quite different from the exercise of its public law functions under the Act. As held in Linfox, in dealing with an appeal from a decision of the Commission under a dispute settlement term in an enterprise agreement the Full Bench is acting as a private arbitrator and this has implications for the Commission’s powers and the scope of subsequent judicial review.
[53] The second observation is that while the appeal procedure in s.604 may be regarded as the default position that position is clearly subject to any contrary intention in the enterprise agreement. The parties may agree to modify s.604 (for example by providing for a right of appeal and thereby removing the requirement to seek permission to appeal) or may agree to expressly exclude any appeal from a decision of a single Member. Section 739(3) is relevant in this regard. It provides that in dealing with a dispute the Commission must not exercise any powers limited by the dispute settlement term.We now turn to s.604.
[54] Section 604 states:
(1) A person who is aggrieved by a decision:
(a) made by the FWC (other than a decision of a Full Bench or an Expert Panel); or
(b) made by the General Manager (including a delegate of the General Manager) under the Registered Organisations Act;
may appeal the decision, with the permission of the FWC.
(2) Without limiting when the FWC may grant permission, the FWC must grant permission if the FWC is satisfied that it is in the public interest to do so.
Note: Subsection (2) does not apply in relation to an application for an unfair dismissal (see section 400).
(3) A person may appeal the decision by applying to the FWC.
[55] The Explanatory Memorandum to what is now s.604 is also relevant, it states:
“2327. The concept of permission in the Bill is intended to replace the concept of leave currently in the WR Act, using more modern terminology. Other than in the special case of subclause 604(2), the grounds for granting permission to appeal are not specified. It is intended that this would call up all the existing jurisprudence about granting leave to appeal – see e.g., Construction, Forestry, Mining and Energy Union v Australian Industrial Relations Commission (1998) 89 FCR 200; and Wan v Australian Industrial Relations Commission (2001) 116 FCR 481.
2328. Subject to the appellant demonstrating an arguable case of appealable error, it is intended that FWA should have a broad discretion as to the circumstances in which it can grant permission to appeal. Some examples of considerations which have traditionally been adopted in granting leave and which would therefore usually be treated as justifying the grant of permission to appeal include:
2329. However, subclause 604(2) requires FWA to grant permission to appeal the decision if FWA is satisfied that it is in the public interest to do so.”
[56] In Wan the Full Federal Court made the following observation regarding the operation of s.45 of the then Workplace Relations Act 1996 (the WR Act), a statutory predecessor to s.604:
“Section 45 does not specify grounds for granting leave to appeal other than in the special case referred to in s 45(2). As we have previously observed, grounds traditionally adopted in granting leave have included considerations such as whether the decision is attended with sufficient doubt to warrant its reconsideration and whether substantial injustice may result if leave is refused. These “grounds” should not be seen as fetters upon the broad discretion conferred by s 45(1), but as examples of circumstances which will usually be treated as justifying the grant of leave. It will rarely, if ever, be appropriate to grant leave unless an arguable case of appealable error is demonstrated. This is so simply because an appeal cannot succeed in the absence of appealable error.” 29
[57] Given the similarities between s.45 of the WR Act and s.604 of the Act the observations in Wan are apposite to the granting of permission to appeal. We now turn to the submissions advanced in relation to the appeal.
[58] In the proceedings before us both parties agreed that in substance the dispute before the Commissioner was the method of determining the back pay to be paid to supplementary employees under the 2011 Agreement. 30 For the reasons which follow we have concluded that the Commissioner erred in her characterisation of the dispute and in the result.
[59] At paragraph [39] of the decision subject to appeal the Commissioner found that supplementary employees ‘are entitled to payment of the consolidated allowance and a 20% casual loading during the dispute period’. It will be recalled that the ‘dispute period’ is the period from the nominal expiry of the 2008 Agreement (1 July 2011) until the approval of the 2011 Agreement (23 May 2012). The 2008 Agreement was in operation throughout the dispute period. Indeed by virtue of s.58(2)(e) of the Act the 2008 Agreement continued to apply to supplementary employees until the 2011 Agreement came into operation. The 2011 Agreement came into operation on 30 May 2012, 7 days after its approval by the Commission (see s.54(1)(a)).
[60] It was common ground between the parties that during the dispute period the supplementary employees had been paid their entitlements under the 2008 Agreement (including the 20% loading and the consolidated allowance). There was no dispute about that issue and the question of the payment of these entitlements during the dispute period was not the relevant question before the Commission.
[61] As we have noted the dispute before the Commissioner was the method of determining the back pay to be paid to supplementary employees under the 2011 Agreement. The resolution of this issue turns on the construction of the 2011 Agreement. Clause 26.2.2 of the 2011 Agreement is the source of the relevant right to payment for supplementary employees. It is clear on the face of clause 26.2.2 that supplementary employees are entitled to the payment of the hourly rate specified in clause 11.2 plus a 25% loading and other allowances (but excluding the consolidated allowance). The hourly rates derived from clause 11.2 are payable from the first pay period on or after 1 July 2011. It follows that the amount of back pay is to be calculated by reference to the entitlements of supplementary employees under clauses 26.2.2 and 11.2 of the 2011 Agreement.
[62] In the proceedings below and on appeal the MUA contended that the quantum of back pay was to be determined by applying, from 1 July 2011, the higher hourly rate of pay under the 2011 Agreement in combination with the continued operation of the 20% loading and consolidated allowance from the 2008 Agreement. We reject this contention. It is based on an erroneous premise - namely that the 2008 and 2011 Agreements are to be read together, to provide an integrated set of entitlements for supplementary employees. The essence of the proposition put requires the back dating of the increased hourly rate payable under the 2011 Agreement to be seen as a variation of the 2008 Agreement. Absent a variation in accordance with the procedure in the Act the 2008 Agreement continued to operate according to its terms until the 2011 Agreement came into operation.
[63] The issue of back pay is to be determined by reference to the 2011 Agreement. That agreement provides that from the first pay period on or after 1 July 2011 the supplementary employees were entitled to the hourly rate derived from the weekly rates in clause 11.2 plus a 25% loading and certain other allowances provided to supplementary employees under the 2011 Agreement.
[64] The 2011 Agreement does not provide for any back payment of the consolidated allowance because under the 2011 Agreement the consolidated allowance is not payable to supplementary employees.
[65] It is fallacious to characterise the application of DP World’s method of determining back pay as the retrospective removal of the consolidated allowance. The consolidated allowance is only payable to supplementary employees under the terms of the 2008 Agreement. It is common ground that during the dispute period the supplementary employees were paid the consolidated allowance. DP World’s methodology does not contemplate taking that payment off the supplementary employees - it is only concerned with the calculation of any additional payments to be made to these employees and that question is resolved by the application of the 2011 Agreement.
[66] Subject to two modifications we find that the methodology proposed by DP World (see paragraph [11] above) for determining the back pay to be paid to supplementary employees under the 2011 Agreement is correct and the dispute between the parties is to be resolved on that basis.
[67] The first modification to DP World’s methodology is that period over which back pay is to be calculated is from 1 July 2011 to 30 May 2012 (not 23 May 2012) as this is the date on which the 2011 Agreement commenced operation. We note that during the appeal proceedings counsel for DP World conceded, properly, that this was so.
[68] The second modification relates to step (ii) of the proposed methodology. In addition to the higher hourly rate and increased loading the calculation should include the allowances payable to supplementary employees (other than those allowances with for which a specific operative date is specified in the 2011 Agreement). As is clear from clause 26.2.2 this calculation does not include the consolidated allowance.
[69] For the reasons given we grant permission to appeal, uphold the appeal and quash the decision subject to appeal. The dispute between the parties is to be resolved in accordance with our decision.
PRESIDENT
Appearances:
Appellant: Mr Y. Shariff of Counsel
Respondent: Mr D. Quinn, solicitor
Hearing details:
2013:
Brisbane:
December, 10.
2 Exhibit A1. Not required for cross-examination
3 Exhibit A2, Transcript at paragraphs [33] to [63]: objections to his statement; cross-examination at paragraphs [64] to [154]; and re-examination at paragraphs [155] to [176]
4 Exhibits A3, A4 and A5; Transcript at paragraphs [183] to [223]: examination in chief; paragraphs [224] to [264]: objections to his statement; paragraphs [267] to [421]: cross-examination; and paragraphs [424] to [434]
5 Exhibit R1; Transcript at paragraphs [445] to [458]: examination in chief; cross-examination at paragraphs [460] to [571] and re-examination at paragraphs [573] to [584]
6 Tn paragraph [390]
7 Tn paragraph [476] and [486]
8 Exhibit A1 at paragraph [8]
9 See Final submissions of the Applicant at 40(b)(ii)
10 [2001] HCA 16 at [31] and [32]
11 (2002) 123 IR 216 at [24] and [25]
14 Also see Shop, Distributive and Allied Employees Association (Queensland Branch) Union of Employees v Woolworths Limited T/A Woolworths [2013] FWCFB 2814
15 (2005) 222 CLR 241 at 246[2]
16 City of Wanneroo v Australian Municipal, Administrative, Clerical and Services Union (2006) 153 IR 426 at [53] per French J
17 Amcor v CFMEU (2005) 222 CLR 241 at [30] per Gummow, Hayne and Heydon JJ
18 (2004) 219 CLR 165 at 179 [40]
19 (1996) 66 IR 182 at 184
20 (2006) 153 IR 426 at [428]
21 See Marmara v Toyota Motor Corporation Australia Limited [2013] FCA 1351 at [94]
22 Shop, Distributive and Allied Employees Association (Queensland Branch) Union of Employees v Woolworths Limited T/A Woolworths [2013] FWCFB 2814 at [22]; Linfox Australia Pty Ltd v Transport Workers’ Union of Australia [2013] FCA 659 at [10]. We note that in Victoria Police Force v Police Federation of Australia ([2009] AIRCFB 146 at [13]) the Commission determined that clause 19.5.5 of the relevant agreement provided an independent right of appeal. Clause 19.5.5 said: “An appeal lies to a Full Bench of the AIRC, with leave of the Full Bench, against a determination/decision of a single member of the AIRC made pursuant to this clause.”
23 [2013] FCA 659
24 See paragraphs [83] to [84] of the Transcript of the appeal proceedings
25 Ibid at [27]
26 (1956) 94 CLR 554 at 560
27 Houssin v Department of Industrial Relations (1981-1982) 38 ALR 577 at 583; Australian National Railways Commission v Rutjens, Print N1939, 27 May 1996 per Ross VP, Harrison DP and Larkin C.
29 (2001) 116 FCR 481 at [30]
30 Appellant’s written outline at 3.8; transcript of the appeal proceedings at paragraphs [551] and [553].
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