[2014] FWC 8620 [Note: An appeal pursuant to s.604 (C2014/8319) was lodged against this decision - refer to Full Bench decision dated 4 March 2015 [[2015] FWCFB 1004] for result of appeal.]
FAIR WORK COMMISSION

DECISION


Fair Work Act 2009

s.739 - Application to deal with a dispute

Australasian Meat Industry Employees Union, The
v
Brismeat Queensland (Woolworths Limited) T/A Brismeat
(C2014/3153)

DEPUTY PRESIDENT ASBURY

BRISBANE, 1 DECEMBER 2014

Application to deal with a dispute.

BACKGROUND

[1] The Australasian Meat Industry Employees Union (AMIEU) applies under s.739 of the Fair Work Act 2009 (the Act) for the Fair Work Commission to deal with a dispute under a procedure for dealing with disputes in clause 2.2 of the Woolworths Limited – Brismeat, Queensland and the Australasian Meat Industry Employees’ Union Agreement 2011 (the 2011 Agreement). The Respondent is Woolworths Limited Trading as Brismeat (Brismeat).

[2] The issue in dispute is whether, on a proper construction of the 2011 Agreement, an allowance in clause 3.1.1 of the 2011 Agreement payable to Table Butchers boning beef on the rail (the rail allowance) should be included in calculating entitlements to leave. Table Butchers boning beef on the rail are also referred to by the AMIEU as Rail Butchers. This matter (and a number of other issues in relation to RDOs, shift allowance and long service leave) was also agitated by way of an application by the AMIEU for a variation of the 2011 Agreement on the basis that it was asserted that the variation was necessary to correct an ambiguity. 1

[3] Both applications were dealt with by the Commission as presently constituted. Following conciliation conferences, the issue of whether Table Butchers should be paid the rail allowance on all forms of leave remained outstanding. I expressed a view to the AMIEU that it should consider electing to pursue one of the applications on the basis that there was some tension in the assertion on the one hand that the Agreement is ambiguous and should be varied and on the other hand that the Agreement as it stands should be interpreted in the way contended for by the Union. The AMIEU elected to pursue the application under s.739 of the Act.

[4] It is contended by the AMIEU that the Agreement was negotiated between the AMIEU and Brismeat with a common understanding (impliedly or reasonably contemplated) that stand up Rail Butchers would be paid the rail allowance on all forms of paid leave. Accordingly, the rail allowance is paid to Rail Butchers for performing their normal duties, so that the ordinary rate of pay for a Rail Butcher includes the rail allowance for the purposes of all forms of paid leave.

[5] The AMIEU contends that this common understanding is reflected in minutes of an enterprise bargaining meeting held on 27 October 2010. Those minutes are said to indicate that an item in a log of claims advanced by the AMIEU seeking the payment of the rail allowance on all paid leave was accepted by Brismeat.

[6] That the Agreement does not explicitly record this common understanding, is said to be an oversight by both Brismeat and the AMIEU. It is contended that Brismeat:

[7] It is further contended that the Agreement should be interpreted so that the relevant clauses are read as intended between the parties and Brismeat is held to the bargain to which the Company truly agreed.

[8] Brismeat contends that there is no proper basis for the Commission to find that any common intention or understanding was reached and that it is not possible to imply or infer an understanding which did not exist. Brismeat also submits that the expression “ordinary pay rates” as used in the disputed provision of the Agreement does not, on its proper construction, encompass payments made by way of rail butchers allowance and that the AMIEU has not explained how annual leave entitlements ought to be calculated for employees who have spent only part of the period over which the leave accrued performing rail butcher functions or who might only perform those functions for part of the period over which the leave is taken.

RELEVANT PROVISIONS OF THE 2011 AGREEMENT

[9] Clause 1.6.6 of the 2011 Agreement defines “Table Butcher” in the following terms:

[10] Clause 3.1.1 provides as follows:

[11] In relation to leave, clause 5.1.8 is in the following terms.

[12] In addition to those clauses, other forms of leave provided for in the Agreement are found in clause 5.2 Compassionate leave, clause 5.5 Personal leave and clause 5.7 Defence Force Leave. Those clauses provide that full and part time employees are entitled to those forms of leave in accordance with the National Employment Standards. The provisions in relation to Defence Force leave also stipulate that full time and part time employees who are required to attend defence force approved training will be paid an amount equal to the difference between the payment received for their attendance at camp in respect of that training and the amount of ordinary time earnings they would have received for working ordinary time during that period.

[13] Clause 5.3 provides that long service leave shall be granted in accordance with the Queensland Industrial Relations Act 1999 and that all employees shall be entitled to long service leave on full pay in accordance with the provisions of that Act.

[14] Clause 5.7.2 provides for two days paid leave for employees with children, in the event of a State of Emergency resulting in children being sent home from school.

EVIDENCE AND SUBMISSIONS

AMIEU

[15] Mr Brian Crawford, Branch Secretary of the AMIEU, attended two meetings for the negotiation of the Agreement – meeting number 10 on 7 December 2010 and meeting number 18 on 28 March 2011. Mr Crawford stated that the process he observed at those meetings is that staff of Brismeat were taking detailed notes of the discussions. After the meetings, Brismeat representatives would compile minutes of the meetings and forward them to participants. The minutes were prepared in a tabular form with a list of items subject of negotiations on the left side and a record of discussions and/or the final position at each meeting with respect to those items. Mr Crawford tendered minutes of meeting number 7 held on 27 October 2010. Item 16 of those minutes is as follows:

    Weekly Wage Rates

3.5

Stand up rail butchers to be paid allowance on all paid leave inclusive of leave loading

    10/08/10 Similar to the shift allowance for annual leave and personal leave.

24/08/10 Employees to clarify claim.

07/09/10 In the last agreement negotiations, this increase was granted but the rail butchers rejected the offer and asked for the difference to be applied across the board to all Brismeat employees. If the butchers who receive the rail allowance with it to be applied all the time, it must be taken back out from the “general pot” (as it was applied last EBA) and this allowance will decrease amount applied across the board to all employees.

14/9/10 PG communicated our position is still no, indicated that we have already paid last EBA. Employees to respond.

29/09/10 Accepted

[16] Mr Crawford said that the minutes were formatted so that unshaded sections outlined claims still in contention and shaded sections outlined claims that had been resolved. Item 16 of the minutes for meeting number 7 conducted on 27 October 2010 deals with the payment of the rail allowance on all forms of leave. Mr Crawford pointed to the fact that the minutes record this item as “Accepted”. Mr Crawford further maintained that at the meetings he attended, no representative of Brismeat ever indicated that there was going to be a distinction in the negotiations between a discussion summary being “accepted” and an item in a log of claims being “accepted”. Mr Crawford also stated that in his twenty years in bargaining for hundreds of negotiated agreements, he had never heard of any party to any negotiations indicate that a discussion summary can be “accepted” but that this does not result in a log of claims being “accepted”.

[17] Mr Crawford tendered an email from Brismeat to the AMIEU attaching minutes of a meeting (number 3 held on Tuesday 7 September) and requesting that the Union review and confirm the minutes. Mr Crawford said that this was another process that occurred during negotiations and AMIEU officials involved in negotiating the Agreement would confirm their concurrence or suggest changes to the minutes. Representatives of the Union also conducted meetings with members after negotiating meetings, to report on the progress of negotiations. According to Mr Crawford, employees would have relied upon those minutes in deciding whether or not to approve the Agreement.

[18] The matter of non-payment of rail allowance on all forms of paid leave was brought to Mr Crawford’s attention by an Organiser on or about January 2014, when a dispute arose in relation to long service leave entitlements of a member.

[19] Under cross-examination Mr Crawford agreed that he had first looked at the minutes of meeting number 7 in connection with the present dispute and that the minutes of Brismeat negotiations were not generally circulated to him. Mr Crawford also agreed that he was aware, before the Agreement was negotiated, that the Company was not paying the rail allowance on leave and that this had been the case for many years. In relation to the minutes of meeting 7 held on 27 October 2010, Mr Crawford said that he had not examined the entire document to determine what had been recorded in relation to other shaded items.

[20] Mr Crawford was taken to the minutes of that meeting and the subsequent agreement, and accepted that with respect to items 8, 15 and 40 the term “Accepted” referred to the compromise position recorded immediately above and not to the original claim. Mr Crawford also agreed that a number of employees classified as rail butchers who were at the meetings where the 2011 Agreement was negotiated, are still employed by the Company.

[21] The AMIEU submitted that the evidence establishes a mutual understanding that the rail allowance would be paid to Table Butchers for performing their normal duties and would be included in their ordinary rate of pay for the purposes of all forms of leave. This is said to be reflected in the minutes of Meeting 7 held on 27 October 2010 with respect to item 16. The fact that the 2011 Agreement does not reflect this mutual agreement is said to be an oversight by both the Company and the Union. Nothing was raised formally by the representatives of the Union or Brismeat following this meeting to disturb the common understanding.

[22] The AMIEU also submitted that the text and context of the 2011 Agreement, including the fact that the minutes of meeting 7, establish that the claim for Table Butchers to be paid the rail allowance on all paid leave was accepted by the Company. There is an ambiguity with respect to the meaning of the term “ordinary rate” for a rail butcher and the allowance for this work has the character of an all purpose allowance. In this regard the language of the extrinsic material is clear and can be used to resolve the ambiguity.

[23] In oral submissions, the AMIEU addressed a submission of Brismeat about the difficulty in calculating annual leave and other leave payments, if the interpretation contended for by the AMIEU was found to be correct. In relation to this submission Mr Dalgleish for the AMIEU said that this issue was dealt with in clause 5.1.9 of the Agreement, which provides as follows:

[24] After reserving Decision in relation to this matter, I requested clarification of this submission and gave the AMIEU two opportunities to provide that clarification. In its second response to my request, the AMIEU submitted that its case does not rest on that question. The response went on to state that the Commission needed to follow the “cardinal rule of interpretation” of a beneficial approach to construing agreements, and apply the maxim “ut res magis valeat quam pereat” (that the thing may rather have effect than be destroyed or be construed in a way that makes sense rather than voids the relevant instrument).

Brismeat

[25] Ms Romero said that the negotiations for the 2011 Agreement started with a preliminary meeting on 14 July 2010. The first substantive negotiating meeting was held on 10 August 2010 and a further meeting was held on 24 August 2010. Ms Romero attended the third and fourth meetings on 7 and 14 September 2010 and took up the Role of Human Resource Specialist at Brismeat on 20 September, thereafter attending all meetings in that capacity, apart from some in December 2010 and January and February 2011.

[26] Ms Romero’s understanding was that at each meeting a Brismeat representative was responsible for taking notes and preparing minutes which were circulated to representatives including those from the AMIEU, prior to the commencement of the next meeting. To manage the large number of claims put forward by both sides, each claim was set out in a table for discussion, in the following format:

[27] Where the parties were able to resolve a particular claim the row for that claim in the table was shaded in grey and moved to the back, with the identifying number being retained. Ms Romero said that to the best of her recollection, claims which were resolved often had the word “Accepted” included in the table. Ms Romero did not understand that this always meant that the original position put in the log of claims had been accepted. Instead, her understanding was that the inclusion of the term “Accepted” could also mean that one party had accepted the last recorded position put forward by the other party.

[28] In taking up her role as Human Resource Specialist at Brismeat, Ms Romero reviewed various claims put forward in respect of a new enterprise agreement. Ms Romero was aware that the AMIEU was seeking that the rail butchers allowance be included in calculating entitlements to annual leave (claim 16) and that morning and afternoon shift allowances be included in calculating all accruals including Rostered Days Off as well as in calculating annual leave entitlements (claim 23). Ms Romero’s understanding was that neither of these payments had been included in calculating leave entitlements and that the Company’s view was that acceptance of these claims would result in a significant cost to the business which could not be justified.

[29] Ms Romero gave evidence about the discussions at a number of meetings on 7 September, 14 September, 29 September, 7 October and 9 November 2010. The minutes of those meetings, appended to Ms Romero’s statement, indicate that the discussion canvassed an increase to the rail butchers allowance under the 2007 Agreement, and that at the meeting of 14 September 2010, the Company’s position in relation to this claim was “still no”. The minutes of that meeting further state immediately below the Company’s position: “Employees to respond”. In the minutes of the meeting of 29 September 2010 and meetings thereafter, the term “Accepted” has been inserted after the words “Employees to respond” and the claim numbered 16 has been shaded and moved to the back of the minutes where it appears to have remained, in the same form, until the conclusion of negotiations.

[30] Ms Romero said that this item was not discussed at the next meeting of 7 October 2010 and this was because it had been resolved by employee representatives acceding to the Company’s position. Further meetings were held on 27 October, 9, 18 and 18 November and 7 December, at which the parties exchanged package offers. A proposed agreement was put to ballot by the Company on 22 December 2010 but was not accepted by employees. There were further negotiations between 5 January and 19 April 2011 with agreement in principle being reached on that date. Ms Romero maintained that at no time did she ever understand the Company had agreed to the rail butcher’s allowance being included in calculating entitlements to annual leave. Ms Romero also maintained that at no stage prior to January 2014, did any employee or their representative suggest to her or to any other Company representative, that the Company was doing the wrong thing in not including the rail butcher allowance in calculating annual leave entitlements.

[31] Present calculation arrangements are that rail butcher’s allowance is paid as a flat amount, regardless of whether an employee works the day or afternoon shift and rail butcher’s allowance is not increased by the afternoon shift allowance of 15%. Other allowances for hard beef, manual printerm and training allowance are also paid as flat dollar amounts. These allowances are not paid to employees on rostered days off, public holidays where employees are rostered off or annual leave.

[32] Under cross-examination, Ms Romero agreed that there is no definition of “ordinary rate of pay” or “ordinary rates” in the 2011 Agreement. In relation to the reference to night shift in clause 5.1.8 Ms Romero stated that a night shift previously operated, but could not explain why the reference had not been removed from the 2011 Agreement notwithstanding that it is no longer worked. Ms Romero also said that this clause had been in various iterations of the 2011 Agreement dating from 1999. Further, Ms Romero agreed that Table Butchers work on day shift and afternoon shift.

[33] Ms Romero was taken to the minutes of a number of enterprise bargaining agreement negotiation meetings. In relation to the minutes of meeting number 7 held on 27 October 2010, Ms Romero agreed that the notes with respect to item 11, salary sacrifice, did not set out a last recorded statement above the term “Accepted”. Ms Romero said that some items were simply agreed at the start of negotiations and that her evidence that the term “Accepted” related to the last recorded position put by a party was in the context of claims where there had been a discussion about the various positions. In some cases there was no discussion and the claim as originally put was accepted.

[34] In relation to item 34 in the minutes of meeting 7 dealing with leave credits on pay slips, Ms Romero agreed that the minutes state that the Company was not prepared to do this and go on to state that the company rejected that item. In response to the proposition that if her evidence was accepted, the Company would be rejecting its own position, Ms Romero said that different people prepared the minutes and may not have adopted the same recording system in all cases. Ms Romero maintained that it was obvious that item 34 in those minutes recorded that the Company had rejected a claim that sick leave credits be included on payslips, and that the rejection was of the original claim.

[35] Ms Romero also agreed that item 35, if interpreted in the manner contended would result in the Company rejecting the position immediately above the term “Company rejects” when the last recorded position was “TBA”. Ms Romero maintained that this item was recorded in a way that made it clear that employees had put forward a proposal with respect to an attendance bonus and the Company had indicated its position would be advised and had then rejected the claim as originally advanced. Similarly, item 42 involved a word change that was simply accepted. This was also the case with respect to item 10 where the claim had been to replace the term “Rail” with “Table” and employees had indicated that they would respond and then accepted the proposal.

[36] Ms Romero maintained that where there was no other comment after a notation that employees were to respond, and the term “Accepted” was then inserted, the minutes indicated that employees had dropped the particular matter and accepted the last position. Ms Romero also said that with respect to item 3, the term “Accepted” had to be considered in light of the overall discussion that was recorded above it. In relation to other alleged inconsistencies between specific items in the minutes and the interpretation advanced with respect to item 16, Ms Romero said that there was no inconsistency and that where items were discussed the minutes referred back to the discussions relating to each item in the log of claims and not directly to the particular claim.

[37] In response to the proposition that an average worker would interpret the word “Accepted” in agreed minutes as acceptance of the claim under which that word appeared, Ms Romero said that workers were represented on the Committee and no issue about lack of understanding of the minutes or the process that was followed in the negotiations for the 2011 Agreement was indicated.

[38] Brismeat also tendered earlier iterations of the 2011 Agreement as follows:

[39] In relation to each of those Agreements, Brismeat pointed to provisions in Agreements since 1996 which entitled Table Butchers performing functions in boning beef on the rail to a daily allowance for such work known variously as the “rail skill allowance” or the “rail butchers allowance”. It was contended that those allowances have never been included in calculating annual leave payments, as stated by Ms Romero, and that this must have been known to the AMIEU by at least 2010, as evidenced by the fact that the Union made a claim in relation to this issue as part of the negotiations which resulted in the 2011 Agreement.

[40] Brismeat also pointed to the fact that the provisions of the relevant industrial instruments in relation to payment for annual leave, from the 1996 Agreement onwards, were in identical terms to clause 5.1.8 in the 2011 Agreement. Brismeat submitted that:

[41] Further, Brismeat submitted that the AMIEU fails to explain how annual leave loading entitlements ought to be calculated for employees who might have received payment of rail butcher allowance. In this regard it is said to be unclear whether the AMIEU asserts that:

[42] Brismeat asserts that reduced to its most basic, the AMIEU submission is that during the negotiations for the 2011 Agreement a mutual or common understanding was reached that stand up rail butchers are to be paid an allowance on all paid leave inclusive of leave loading, and that the terms of the 2011 Agreement should be read as requiring Brismeat to include that allowance in calculating annual leave and other paid leave entitlements, despite the fact that no changes were made to the relevant provisions of the 2011 Agreement.

[43] Brismeat further asserts that there is no basis to find that such an understanding was ever reached and that the evidence of Ms Romero, who was present at the relevant negotiation meetings on 7, 14 and 29 September is to the contrary. Mr Crawford was not present when the alleged understanding was reached and his evidence is nothing more than subsequent speculation based on his interpretation of a document summarising a meeting in which he was not involved. Either an understanding existed or it did not and it is not possible to reasonably contemplate or infer an understanding that did not exist. That Mr Crawford may hold a subjective belief that an understanding was reached, is entirely irrelevant to the objective construction of the 2011 Agreement.

CONSTRUCTION OF ENTERPRISE AGREEMENTS

[44] The parties set out authorities said to be relevant to the construction of enterprise agreements in their submissions. The AMIEU referred to a line of authority in the Federal Court suggesting that the interpretation of certified agreements is one in which the objectively determined intention of the parties is based on their character as consensual documents rather than statutory instruments 2 or alternatively submitted that there is authority for the proposition that the interpretation of statutes and contracts is essentially similar.3 The AMIEU also referred to a decision of a Full Bench of the Commission in Cape Australia Holdings Pty Ltd T/A Total Corrosion Control Pty Ltd v Construction, Forestry, Mining and Energy Union4 where it was stated that by virtue of s.46 of the Acts Interpretation Act 1901, that Act is applicable to the construction of enterprise agreements as if that agreement was an Act.

[45] To that authority might be added the observation of the Full Court of the Federal Court in Toyota Motor Corporation Australia Limited v Marmara 5 that the construction of agreements should not be diverted by any assumption that they should be treated as a form of bargain between agreeing parties. The Court went on to observe that an enterprise agreement is an agreement in name only; the employer and employees are not parties to it; and that once approved an enterprise agreement applies to all employees in the relevant group even those that did not agree. Further, in Transport Workers’ Union of Australia v Coles Supermarkets Australia Pty Ltd6 the Full Court of the Federal Court observed that it is not difficult to share the perception that an enterprise agreement approved under the Fair Work Act has a legislative character. These cases were decided after the submissions in the present matter were filed.

[46] The relevance of this point, according to the AMIEU submission, is the application of ss.15 AA and 15 AB of the Acts Interpretation Act 1901 and in particular, the consideration of extrinsic materials in construing an Act. Section 15 AA provides that in construing a provision of an Act, the interpretation that would best achieve the purpose or object of the Act is to be preferred. Subsection 15 AB(1) provides:

[47] Subsection 15AB(2) sets out a (non-exhaustive) list of extrinsic materials that may be considered. Subsection 15AB(3) then provides as follows:

[48] The submission for Brismeat on this point, with which I agree, is that there are no separate paths of interpretation and the proper approach to construction requires a set of mutually consistent principles. I also agree with Brismeat’s submission that whether the Acts Interpretation Act applies to an enterprise agreement by virtue of s.46 of that Act is a moot point, because the principles set out in ss. 15 AA and 15 AB of the Acts Interpretation Act are not inconsistent with those relating to commercial contracts.

[49] The principles of construction that have been applied to the interpretation of industrial instruments such as awards and agreements, and which relevant in the present case, are well established. In Kucks v CSR Madgwick J made the following observation:

[50] Other relevant principles of construction of enterprise agreements are:

If the terms of an enterprise agreement are clear and unambiguous, then the industrial instrument must be interpreted in accordance with that clear and unambiguous meaning; 9

The words used in an enterprise agreement should not be interpreted in a strict technical fashion, because those who framed the industrial instrument are often non-lawyers drafting words in the context of custom and practice in an industry or particular enterprise; 10

The words used in an enterprise agreement should be interpreted within its context, that is, the meaning of particular words should be read in the context of the agreement as a whole 11 and in the context of the clause/section in which they fall;12

Recourse by the court or Tribunal to extrinsic material in the interpretation of an industrial instrument is not dependent on the existence of ambiguity and may be allowed in to expose or to resolve an ambiguity. 14

[51] Evidence about the negotiations for an agreement is relevant to the extent that it establishes objective background facts that go to the context or subject matter of the negotiations. Evidence about the actual intentions and expectations of negotiating parties is not admissible as an aid to the construction of agreements on the basis that it reveals the terms of the agreement they hoped to make, and those intentions and expectations are merged into the final agreement. 15

[52] In relation to the context of expressions used in industrial instruments, Justice Burchett, sitting with the Full Court of the Federal Court, said in Short v Hercus16

CONSIDERATION

The text of the Agreement

[53] The AMIEU submits that the words of clause 5.1.8 of the 2011 Agreement should not be interpreted in a strict technical fashion, and that regard should be had to their ordinary meaning, context, custom and practice of the industry and the extrinsic material relating to the making of the 2011 Agreement. The AMIEU further contends that the Commission should give effect to the mutual intention of the parties who made the agreement provided that the words can reasonably be interpreted to mean what was intended.

[54] According to the AMIEU, the parties to the 2011 Agreement, as a matter of common understanding, contemplated that stand up Rail Butchers are to be paid an allowance on all paid leave inclusive of leave loading. There is ambiguity in relation to what is the ordinary rate of pay for Rail Butchers and an uncertainty arises as to whether it is an all-purpose rate of pay. The AMIEU contends that the allowance has the characteristic of an all-purpose allowance and is included in the ordinary rate of pay for Rail Butchers for the purpose of all paid leave.

[55] The rationale for this conclusion is said to be compelling. It is also contended that:

[56] It should be noted that there is no classification of Rail Butcher in the 2011 Agreement. Rather there is an allowance for Table Butchers for each day they are “employed” boning beef on the rail.

[57] There is no definition in the Agreement of the term “ordinary pay rates” for the purposes of clause 5.1.8 of the Agreement. It is also the case that notwithstanding the reference to night shift in clause 5.1.8, the Agreement does not provide for night shift. There is a provision for night shift in the 2002 agreement and a penalty rate of 25% for night shift and 30% for fixed night shift. The 2002 Agreement has a clause 5.1.9 that is in identical terms to clause 5.1.8 of the 2011 Agreement the subject of these proceedings.

[58] The loading for night shift in the 2002 Agreement is higher than the annual leave loading. In the subsequent 2004 Agreement there is no reference to night shift in the shift work clause but the reference to employees other than night shift workers being paid for annual leave at their ordinary pay rates, is found in clause 5.1.9. In my view the reference to night shift in clause 5.1.8 of the 2011 Agreement is of no significance and it is probable that the parties simply overlooked the fact that there was a reference in that clause to night shift after they removed night shift provisions from the other parts of the earlier versions of the Agreement because night shifts are no longer worked.

[59] The reference to night shift in clause 5.1.8 of the 2011 Agreement is simply a “hangover” to a time when the earlier iterations of the Agreement prior to 2004 provided for night shift with a penalty that exceeded annual leave loading, so that the annual leave clause needed to specify that the higher amount would be paid and that annual leave loading would not be paid in addition to night shift loading. When the various iterations of the Agreement are considered, it is more probable than not that the parties have simply neglected to delete that reference when other references to night shift were deleted from the 2004 and 2006 versions of the Agreement.

[60] It is clear from the language of the Agreement that the allowance for table butchers boning beef on the rail in clause 3.1.1 that is the subject of these proceedings is a daily allowance. The manner in which it is expressed is not distinguishable from the allowances in clauses 3.1.2 and 3.1.3 which respectively apply to follow on labourers operating boning room beef input scales and the boning room carton printerm. None of these allowances are specifically designated as all-purpose allowances and there is no basis, on the plain words of the clauses which provide for those allowances for the rail allowance to be paid on a different basis to the allowances applicable to employees operating beef input scales or the carton printerm.

[61] That the rail allowance is a daily allowance is also indicated by the terms of clause 3.5 wages, where the table setting out wages and allowances shows that the dollar value of the allowance for Table Butchers boning beef on the rail on a daily basis, varies depending on the hours worked. The allowance is higher when an eight hour day is worked than it is when a 7.6 hour day is worked. This is indicative of the allowance being a flat amount that is capped on a daily basis depending on the hours worked.

[62] If the allowance was intended to be an all-purpose allowance, there would be no reason to express it as a daily amount which varies on the basis of ordinary hours worked. If more is needed there is a further indication that the allowance is payable while the work to which it relates is being performed in clause 1.6.6, which defines “Table Butcher” and provides that a rail allowance is paid for duties performed on the rail. There is no indication that any of the allowances in clauses 3.1.1, 3.1.2 and 3.1.3 of the 2011 Agreement, all of which are expressed in virtually identical terms, are all-purpose allowances.

[63] The terms in which the rail allowance in clause 3.1.1 of the Agreement and the allowances in clauses 3.1.2 and 3.1.3 are expressed can be contrasted with the terms of clause 4.7.4 of the Agreement which makes it clear that employees on morning or afternoon shift receive a shift allowance which becomes the ordinary rate for the purposes of public holidays, personal leave, compassionate leave and long service leave. Notably shift allowances are not included in the ordinary rate for annual leave, by virtue of clause 5.1.8. Given that shift allowances are 15% and annual leave loading is 17.5% this is consistent with the general principle that employees who are shift workers are paid for annual leave their ordinary rate plus shift allowance or annual leave loading, whichever amount is greater. As previously noted, the reference to night shift in clause 5.1.8 in circumstances where the 2011 Agreement does not provide for night shift, is probably a “hangover” from previous iterations of the Agreement which prescribed a night shift allowance that exceeded the 17.5% annual leave loading, so that night shift workers got the higher night shift allowance while on annual leave rather than the 17.5% leave loading.

[64] This principle is reflected in clause 37.4(b) of the Award which provides that employees absent on annual leave, who would have worked shift work, will be paid the greater amount of shift allowance or leave loading but not both. Under the Award there are allowances specified for night shift and fixed night shift that exceed the 17.5% loading, necessitating the inclusion of clause 37.4(b).

[65] Similarly under the terms of the 2011 Agreement, the rate of pay for employees on rostered days off includes shift allowances. There is no reference to allowances being payable to employees while on personal leave or compassionate leave.

[66] Thus in the context of the 2011 Agreement read as a whole, where an allowance is considered to be part of the ordinary rate for the purposes of leave, and therefore payable to an employee while on leave, there is a specific provision to that effect. There is no such provision with respect to the rail allowance in clause 3.1.1, or the allowances in 3.1.2 or 3.1.3 with respect to operation of the beef input scales or the boning room carton printerm.

Context of the Agreement

[67] The context in which the 2011 Agreement was made includes its earlier iterations. The provision of the 2011 Agreement dealing with payment for annual leave is in identical terms to the provisions in six earlier versions of the Agreement. The AMIEU did not challenge the submission of Brismeat that the allowance for Table Butchers boning beef on the rail had not previously been paid on annual leave. It almost goes without saying that there would have been no need for the AMIEU to have made a claim that the allowance should be paid to employees on annual leave, if that had been Brismeat’s practice.

[68] I am of the view that when the provisions of the earlier iterations of the 2011 Agreement are considered, the context in which the 2011 Agreement was made does not support the interpretation contended for by the AMIEU. The 1994 Agreement does not contain any allowances. That Agreement contains classifications and wage rates for both Rail Butchers and Table Butchers with the weekly wage rate for Rail Butchers being $20 per week higher than the weekly wage rate for Table Butchers.

[69] The 1996 version of the Agreement, approved with effect from 4 December 1997, provided as follows at clause 3.1.1:

[70] The usual meaning of the term “all purpose” when used in respect of an allowance, is that the allowance is part of the base or ordinary rate for the purposes of calculating payments for overtime and all forms of paid leave. The 1996 Agreement contains wage rates and classifications for both Rail Butchers and Table Butchers and those wage rates are identical. Further, the Rail Butchers allowance does not appear in the wages table in clause 3.4.1 of the 1996 agreement.

[71] In the 2002 Agreement clause 3.1.1 which continues to deal with the allowance for Rail Butchers boning beef on the rail is in the following terms:

[72] There is also a new clause 3.1.2 which provides that:

[73] Instead of being specified in clause 3.1.1, the quantum of the rail allowance now appears in the wages table in clause 3.4 as follows:

[74] The 2002 Agreement also contains a classification for Rail Butcher and a classification for Table Butcher and both classifications receive the same weekly wage rate.

[75] The terms of the 2004 Agreement are the same as those of the 2002 Agreement with respect to the inclusion of clauses 3.1.1 and 3.1.2. With respect to classifications, 11 levels have been introduced. The classification of Table Butcher is in the level for which the highest weekly wage rate is specified - level 11. There is no classification for Rail Butcher. In the wages table in clause 3.5, the following appears:

[76] In the 2006 Agreement, clause 3.1.1 remains unchanged, but clause 3.1.2 has been deleted. The skill allowance for Rail Butchers is still found in clause 3.5 weekly wage rates except that the amount of the allowance differs depending on whether or not employees work under an arrangement with a rostered day off. The 2007 Agreement has the same provision with respect to the allowance for Rail Butchers and clause 3.5 weekly wage rates is also in similar terms other than the quantum of the allowance has been increased.

[77] Clause 3.1.1 of the 2011 Agreement is in similar terms except the allowance is now payable to “Table Butchers for each day they are employed boning beef on the rail”. The quantum of the allowance is also included in the wages table set out clause 3.5 on the basis that the quantum changes depending on whether employees work a 7.6 or 8 hour day. This is consistent with item 10 of the minutes of the meeting of 27 October 2010 which is as follows:

[78] The reference in the 1996 Agreement to the rail allowance being an all purpose allowance is not found in any of the subsequent iterations of the clause prescribing the allowance. As previously noted, the AMIEU does not dispute the assertion made by Brismeat that custom and practice has been that the allowance has not been paid to employees by Brismeat while they are on leave.

[79] All indications are that in versions of the Agreement following the 1996 Agreement the rail allowance cleared to be all purpose and was paid on a daily basis and the classification for Rail Butchers was phased out. There is insufficient material before me to form any conclusion about this matter. However regardless of any previous provisions, it is clear that the rail allowance in the 2011 Agreement is not an all purpose allowance.

[80] It is improbable that a change of some significance was negotiated with respect to the 2011 Agreement and that the clauses dealing with both the allowance and the payment to empoyees while on annual leave, were not amended to reflect that change. It is even more improbable that in circumstances where the parties agreed on an amendment to clause 3.1.1 to reflect the fact that there was no classification for Rail Butcher, that they did not amend the clause to reflect what would have been a much more significant change to the practice that Table Butchers were not paid the rail allowance while on leave.

[81] The Meat Industry Award 2010 (the Award) was cited in the application for approval of the Agreement as the reference instrument that would cover or apply to the employer and the whole or any portion of the employees to whom the Agreement would apply. That Award is part of the context in which the 2011 Agreement was made. The provisions of the Award in relation to payment for annual leave found in clause 37.3, specifically exclude monetary allowances from being payable to employees on annual leave. Thus an interpretation that the rail butchers allowance in clause 3.1.1 of the Agreement is not payable on annual leave is also consistent with the provisions of the Award.

[82] For these reasons, the interpretation of the Agreement advanced by the AMIEU is inconsistent with both the specific terms of the 2011 Agreement and the context in which it was made, including the earlier iterations of the 2011 Agreement and the Award which underpinned it for the purposes of the process by which the 2011 Agreement was approved by the Commission.

[83] The interpretation advocated by the AMIEU would require that the text of the 2011 Agreement be strained and would result in rather than avoid inconvenience and injustice. I agree with the submission of Brismeat that the AMIEU has failed to explain how payment to employees for annual leave and other forms of leave would be calculated if the construction of the 2011 Agreement advanced by the Union was accepted. Clause 5.1.9 of the Agreement is not an answer to this problem. That clause deals with employees working at higher classification levels and not with employees performing work for which an allowance is prescribed. There is no classification for Rail Butcher as there was in previous versions of the Agreement, and clause 5.1.9 cannot apply where a daily allowance is paid.

[84] Further, there is no rational basis for the allowance in clause 3.1.1 of the Agreement to be paid to employees on annual and other forms of leave, and not the allowances in clause 3.1.2 and 3.1.3, which are expressed in identical terms to the allowance subject of these proceedings.

Extrinsic Material

[85] I am also of the view that there is nothing ambiguous about the provisions of the 2011 Agreement under which the AMIEU asserts an entitlement on the part of Table Butchers to be paid the allowance in clause 3.1.1 of the Agreement on all forms of leave. Quite simply, on the plain meaning of the words in relevant provisions of the Agreement, the allowance in clause 3.1.1 is not paid on all forms of leave. For the reasons set out above, this view is consistent with the context in which the relevant provisions appear in the 2011 Agreement and in earlier iterations of that Agreement. It is also consistent with the Award.

[86] The AMIEU asserts that notwithstanding the text of the Agreement, the extrinsic material, in the form of minutes of negotiation meetings, and the belief of officials of the AMIEU and its members that agreement was reached that the allowance in clause 3.1.1 would be paid on all forms of leave, requires a construction of the Agreement to that effect.

[87] As previously noted, extrinsic material may be considered to resolve an ambiguity or expose it. In the present case, the extrinsic material is the minutes of a meeting held on 27 October 2010, for the purpose of negotiating the 2011 Agreement. I do not accept that the minutes of that meeting or of any other meeting establish that the parties agreed that the Rail Butchers allowance would be paid on annual leave or any other form of leave. It is clear from the evidence of Ms Romero and the minutes themselves that the claim was raised by employees on 10 and 24 August 2010 and that on 7 and 14 September the Company provided reasons why this claim was rejected. On 14 September employees indicated that they would respond to the Company’s position, which was “still no” and on 29 September “Accepted” the Company’s rejection of this claim.

[88] This is a more probable scenario than the one advanced by the AMIEU, which would require the Commission to accept that after rejecting a claim at two previous meetings, the Company changed its position and accepted it. This scenario advanced by Brismeat with respect to the minutes is supported by the evidence of Ms Romero who was present at the meetings where the claim was discussed. It is also supported by the fact that there was no change to the clause prescribing the allowance, the wages clause or the annual leave clause, to reflect this alleged agreement. This is despite the clause providing for the allowance being amended to reflect the fact that the allowance was payable to Table Butchers and not Rail Butchers – a classification which no longer appeared in the Agreement.

[89] I am also of the view that the term “Accepted” in the context of the minutes as a whole, is used to indicate acceptance of the last substantive position. In relation to items where there was negotiation, the term “Accepted” is generally used to indicate acceptance of the final negotiating stance of the other party. In cases where the term “Accepted” relates to the original claim, there is no negotiation and the substantive position to which the term “Accepted” relates, is the original claim. This can be seen from the minutes of 7 October in relation to items 10 and 16, both of which dealt with clause 3.1.1 the clause which provides for the rail allowance. It is also apparent from other sections of the minutes highlighted in cross-examination by both Mr Dalgleish and Mr Jauncey.

[90] This is illustrated by the following extracts from the minutes of meeting 7. With respect to item 10, it is apparent that on 10 August 2010, the Company proposed the deletion of the term “Rail Butcher” and the insertion in lieu of that term of the term “Table Butcher”. On 24 August 2010 employees indicated that they would respond to this proposal. On 7 September 2010, the item is recorded as having been “Accepted”. Clearly, in this case there was no substantive discussion about the proposal and the acceptance of the item relates to the original claim.

[91] This can be contrasted with the minutes in relation to item 16. The minutes show that on 10 August 2010, employees claimed that stand up rail butchers be paid allowance on all paid leave inclusive of leave loading. On 24 August 2010 it was recorded that employees were to clarify the claim. On 7 and 14 September the Company’s opposition to the claim is outlined and the minutes record that employees are to respond to the Company’s position. The response “Accepted” is clearly a response to the Company’s position of opposition. In other words employees accepted that the claim was rejected and opted not to pursue it further. This is consistent with the fact that the clause was not altered other than in the manner agreed to in relation to item 10.

[92] The fact that Mr Crawford later formed a view that the minutes should be interpreted in the manner contended for by the AMIEU is not sufficient to establish that there was an understanding or agreement between the parties about this matter. Mr Crawford attended only two meetings and was not at the meetings where this matter was discussed. His view is based on minutes of meetings he did not attend, and however genuinely that view is held, it is not a sufficient basis to establish that there was agreement on this matter. It is also the case that there is no evidence that any employee who was employed as a Table Butcher at the relevant time, believed that the Company had agreed to pay the rail allowance on annual leave or other forms of leave. That there was no substantive change to the provision is also evidenced by the fact that exactly the same wording was included in the 2011 Agreement with respect to the clause providing for the allowance and the clause relating to payment for annual leave.

[93] The extrinsic material relied on by the AMIEU does not support the construction advanced by the Union. There is no basis for inferring that an understanding was reached, and the evidence is to the contrary.

CONCLUSION

[94] The proper construction of the 2011 Agreement is that the rail allowance in clause 3.1.1 of the Agreement is not payable to employees on annual leave or other forms of paid leave.

DEPUTY PRESIDENT

Appearances:

Mr E. Dalgleish on behalf of the AMIEU.

Mr S. Jauncey, Ms J. Do, Mr R. Usiam and Mr J. Smith on behalf of Woolworths Limited t/a Brismeat.

Hearing details:

2014.

Brisbane:

March 10;

May 6.

 1   AG2014/3423

 2   Finance Sector Union of Australia v Commonwealth Bank of Australia (2001) 105 IR 172 at [175] (Gyles J); National Tertiary Education Industry Union v University of Wollongong [2002] FCA 31 at [27 - 28] (Branson J); Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union v Skilled Engineering Ltd [2003] FCA 260 (Finkelstein J); University of Western Australia v National Tertiary Education Industry Union [2003] FCA 1264 (Carr J); Construction, Forestry, Mining and Energy Union v Amcor Ltd [2002] FCA 610; (2002) 113 IR at [18] (Finkelstein J); approved in Commonwealth Bank of Australia v Finance Sector Union of Australia (2002) 125 FCR 9 at [29] (Full Court).

 3   Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at 381 – 382 per Gummow, Kirby and Hayne JJ.

 4   [2012] FWAFB 3994 at [5] – [9].

 5   [2014] FCAFC 84.

 6   [2014] FCAFC 148 (3 November 2014).

 7   (1996) 66 IR 182.

 8   Amcor Limited v CFMEU (2005) 222 CLR 241.

 9   Re Clothing Trades Award (1950) 68 CAR 597.

 10   Bond & Co Ltd (in liquidation) v McKenzie (1929) 28 AR 499.

 11   Australian Workers’ Union v Abbey (1939) 40 CAR 494.

 12   Avondale Motors (Parts) Pty Ltd v Federal Commissioner of Taxation (1971) 44 ALJR 280 at 283.

 13   Toll FGCT Pty Limited v Alphapham Pty Ltd (2004) 219 CLR 165 (at 179).

 14   Short v Hercus (1993) 40 FCR 511 at 517 – 519 per Burchett J and 523 per Drummond J; Municipal, Administrative, Clerical & Services Union v Commonwealth of Australia (1998) 82 FCR 175 at 177 – 178 per Marshall J.

 15   Codelpha Construction v State Rail Authority (NSW) (1982) 149 CLR 337 at 347 – 353 per Mason J.

 16   (1993) 40 FCR 511

 17   Ibid at 518.

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