Fair Work Act 2009
s.604 - Appeal of decisions

Appeal against decision [[2016] FWCA 7945] and order PR587265 of Commissioner Bissett at Melbourne on 8 November 2016 in matter number AG2016/1210; whether a denial of natural justice.

Introduction

[1] By its application lodged on 16 May 2016 the National Tertiary Education Industry Union (NTEU) applied to vary the Monash University Enterprise Agreement (Academic and Professional Staff) 2014 (Agreement) under s.217 of the Fair Work Act 2009 (Cth) (the Act) to remove an ambiguity or uncertainty said to exist concerning the remuneration of sessional teaching staff undertaking marking. The NTEU is an employee organisation covered by the Agreement. The Agreement also covers Monash University (Monash).

[2] The principal provision of the Agreement with which the application was concerned is clause 5 of Schedule 3, which contains provisions concerning the remuneration of sessional Teaching Associates. Simply put, the NTEU contended that on a proper construction of clause 5 of Schedule 3 of the Agreement when read with clauses 16 and 22, and Schedule 2 of the Agreement, marking work performed by a sessional Teaching Associate during the term of employment is to be paid at the applicable hourly rates for the hours of work performed in carrying out marking work. 1

[3] In asserting that an ambiguity or uncertainty existed, the NTEU contended that clause 5 of Schedule 3 was capable of an alternative and arguable construction. On the alternative construction the number of hours for which a sessional Teaching Associate will be paid for performing marking work is able to be limited by a determination made by the Dean. Consequently, payment for marking work will be determined by the number of hours allowed for marking and the appropriate marking rate per hour as determined by the Dean. 2

[4] In order to cure the ambiguity or uncertainty alleged, the NTEU proposed an amendment to clause 5 of Schedule 3 of the Agreement by inserting a statement in the following form:

“Irrespective of any determination of a Dean made in accordance with this Section, Teaching Associates will be paid by the University at the appropriate rate in Schedule 2 for all hours of marking required to be performed.” 3

[5] Monash opposed the NTEU’s application to vary and contended that properly construed, the Agreement is not ambiguous as suggested by the NTEU and accordingly maintained that the application ought be dismissed. 4

[6] The application was determined by Commissioner Bissett in a decision published on 8 November 2016 5 (Decision). The Commissioner concluded that there was ambiguity or uncertainty in the Agreement. The ambiguity or uncertainty identified by the Commissioner concerned the payments to be made to sessional employees who are engaged in marking where that marking is not part of a composite rate already paid, namely where the marking is a distinct function to be performed.6 The Commissioner also decided to vary the Agreement by deleting the first two paragraphs of clause 5 of Schedule 3 of the Agreement and instead inserting the following:

“Except as otherwise determined by the University in accordance with the provisions of this clause, the marking rates in schedule 2 (or more beneficial arrangements where these exist) will apply for all hours of marking undertaken by sessional staff not otherwise included in sessional rate descriptors.

Teaching Associates will be paid a marking rate for each hour of marking as set out in this Agreement, subject to any determination of the Dean made in accordance with this clause, where they undertake marking as a requirement of the supervising lecturer in charge of the subject or course, other than marking which is performed (or could reasonably be performed) in the relevant classroom, tutorial/lecture or equivalent teaching environment”. 7

[7] The Commissioner issued an Order 8 on 8 November 2016 to give effect to the Decision.

[8] On 23 November 2016, Monash lodged an appeal under s.604 of the Act against the Decision and Order.

[9] We have decided to grant permission to appeal, and to uphold the appeal, quash the Decision and Order, and remit the application to Deputy President Kovacic. Our reasons for these conclusions follow below.

Consideration

The Decision

[10] The Commissioner begins her consideration of the application by identifying the nature of the application and the variation sought by the NTEU at [1] – [2] of the Decision, although we note that the nature of the variation sought as is reproduced at [2] of the Decision does not take into account the minor modification to the proposal contained in the NTEU’s outline of submissions. 9 At [3] – [74] of the Decision, the Commissioner deals with the parties’ submissions and the evidentiary material.

[11] The Commissioner next summarises the competing contentions as follows:

“[3] The NTEU submits that the terms of the 2014 Agreement are uncertain or ambiguous in the way they deal with payment for marking by sessional staff employed by Monash University (Monash).

[4] The NTEU says that this conclusion must be reached on consideration of the provisions of clauses 16, 22, Schedule 2 and Schedule 3 of the 2014 Agreement.

[5] Clause 16 deals with modes of employment and allows for sessional employment, which means ‘casual employment of academic Teaching Associates’ (clause 16.2 and 16.12); clause 22 provides for salary increases and that sessional staff be paid at the rates in Schedule 2 (clause 22.1); and details descriptors of the activities for which sessional staff are paid (Schedule 3). The relevant clauses of the 2014 Agreement are at Attachment A to this decision.

[6] Based on these clauses the NTEU posits two varying constructions in relation to the payment to be made to sessional staff for marking.

[7] In the first instance it says that a proper construction of the provisions of the 2014 Agreement leads to a conclusion that casual academic staff must be paid at the specified hourly rate for all work performed, including all marking work.

[8] The NTEU submits that:

Taken together, clauses 16, 22, Schedule 2 and Schedule 3 identify that Teaching Associate (casual) staff “required to undertake marking”  “are paid at hourly rate specified in Schedule 2”, “will be paid marking rates as set out in the Agreement” and the hourly rate in Schedule 2 is specified as “$/hour”
[footnotes in original]

[9] That is, it says that sessional staff must be paid the hourly rate for marking as specified in Schedule 2 of the 2014 Agreement for every hour spent marking (not otherwise part of the hourly rate).

[10] The NTEU submits that such a construction is in accordance with the provisions of the Higher Education Industry – Academic Staff – Award 2010, (the 2010 Award) in particular clauses 13, 14 and 18 of that Award.

[11] In the alternative the NTEU submits that clause 5 of Schedule 3 could operate to create a ‘piece rate arrangement’ by which the determination of the Dean sets the hours to paid for marking regardless of the hours actually worked.

[12] The NTEU relies on paragraph 3 in clause 5 of Schedule 3 to support this conclusion:

The number of hours allowed for marking and the appropriate marking rate per hour will be determined by the Dean taking into consideration the expected time taken to undertake the marking based on the complexity of the marking in the context of the academic discipline involved. The Dean’s determination of the number of hours for marking will be consistent with guidelines issued for each faculty. These guidelines will be developed in consultation with academic staff within the relevant discipline or organisational unit and will set out reasonable expectations about the number of hours to be allowed for marking based on the complexity of the marking and allowing for variations in level of experience of the marker in the context of the academic discipline involved. [emphasis in original]

[13] The NTEU relies on the definition of ‘allow’ in the Macquarie Online Dictionary to support its construction.

[14] The NTEU acknowledges that the ‘hours allowed for marking’ could be an administrative matter for internal budgets or could be a reference to hours paid without further action.

[15] Monash says that the first step in determining if the Agreement is susceptible to more than one meaning requires an objective assessment based on the ordinary principles of construction of an agreement.

[16] In applying these principles it says that the meaning of clause 5 of Schedule 3 in the 2014 Agreement is clear and unambiguous. It says that casual academic staff are paid the hourly rate for marking work, except where it can be reasonably performed in the classroom. It says that the payment is not calculated on a time-recording system but marking is based on an allowance of hours determined by the Dean consistent with guidelines within each faculty.

[17] For this reason it says that there is no reason to consider the surrounding circumstances or vary the 2014 Agreement. 10 [Endnotes omitted]

[12] At [18] – [43] of the Decision the Commissioner discusses the evidence and at [44] – [74] of the Decision, the Commissioner deals with the questions whether she should have regard to evidence about the subsequent conduct of the parties as an aid to construction, and whether she should admit into evidence, without prejudice communication to Monash from the NTEU dated 20 August 2008. As to the first question, the Commissioner concludes that she would not, for the purposes of determining whether ambiguity or uncertainty exists, or in ascertaining the mutual intention of the parties to the Agreement, have regard to evidence as to the conduct of the parties after the Agreement was made. 11 As to the second question, the Commissioner determines to exclude the without prejudice communication.12

[13] After considering the approach to identifying whether there is ambiguity or uncertainty in an enterprise agreement and in this context considering the decision of a Full Bench of the Australian Industrial Relations Commission in Re Tenix Defence Systems Pty Ltd Certified Agreement 2001-2004 13(Tenix), the Commissioner turns to the question whether there was an ambiguity or uncertainty in the Agreement as follows: 

“[77] As was observed in Tenix, the correct approach to identifying an ambiguity or uncertainty requires the making of an objective judgment as to whether, on the proper construction of the relevant provision of an agreement, the wording of that provision is susceptible to more than one meaning.

[78] The 2014 Agreement states that:

● at the time of engagement a sessional staff member be advised of the rate of pay for each class of duty (clause 16.2);

● ‘class of duty’ includes (separately) demonstrating, tutoring, lecturing, marking, etc (clause 16.12 and Schedule 2);

● sessional staff are paid a sessional or hourly rate for each class of duty they are required to perform (clause 22.2 and Schedule 2);

● the number of hours allowed for marking (a specific class of duty) is determined by the Dean (clause 5 Schedule 3).

[79] I would observe firstly that, whilst no submissions were made to this effect, a plain reading of clause 5 of Schedule 3 suggests that it, alone and without reference to other parts of the 2014 Agreement, creates a level of uncertainty. Paragraph 1 provides an absolute discretion to the University to change the way marking is paid. That does not have to be in line with the process outlined in paragraph 3. This is because paragraph 1 says ‘except as otherwise determined at the discretion of the University’ the provisions set out will displace more beneficial arrangements. This suggests that the University retains the right to make changes in a way it determines appropriate.

[80] This discretion puts into doubt the meaning of the absolute statement in paragraph 2 that ‘Teaching Associates will be paid marking rates as set out in this Agreement…’ which specify a rate per hour. This particular statement cannot co-exist with the absolute discretion.

[81] Paragraph 3 then allows (but does not require) the Dean to determine the number of hours that will be paid (presumably at one of the rates specified in the Agreement).

[82] It seems to me that it is not possible for a sessional employee to be paid at the rate per hour in Schedule 2 of the 2014 Agreement if the Dean can, at the same time, limit the number of hours that will be paid or the University can put in place some other arrangement at its discretion.

[83] Secondly, the difficulty of the approach taken by Monash to the question of ambiguity or uncertainty is that it has examined paragraph 3 of clause 5 of Schedule 3 in isolation of any other clause in the 2014 Agreement. As the Full Bench observed in Tenix, the task of identifying ambiguity or uncertainty ‘is not confined to the identification of a word or words of a clause that give rise to an ambiguity or uncertainty. A combination of clauses may have that effect.’ 

[84] Whilst paragraph 3 of clause 5 of Schedule 3, when read in isolation, may appear clear, when read in combination with other paragraphs in the clause and in conjunction with clause 16.12, clause 22.1 and Schedule 2, in particular, suggest there is ambiguity as to what a sessional employee is to be paid and the number of hours for which they will be paid for marking.

[85] If Schedule 3 is not considered, clause 16.12, clause 22.1 and Schedule 2 might suggest (as was put by the NTEU) sessional staff are entitled to be paid an hourly rate for (amongst other things) marking. When Schedule 3 is considered it suggests that the hourly rate will not be paid for each and every hour worked but rather only for the hours determined by the Dean as are appropriate if he or she issues such a determination. There is some conflict between the provisions to create ambiguity or uncertainty. In reaching this conclusion I would observe that the approach of the NTEU is selectively choosing words from various clauses to prove its point with respect to ambiguity is not a robust approach to the task and should not generally be relied upon.

[86] Should a determination not be made by the Dean clause 5 of Schedule 3 provides some broader discretion to make some other arrangement for the payment of marking.

[87] I do not accept the NTEU’s characterisation of clause 5 of Schedule 3 as being equivalent to piece rates. Piece rates connote payment based on the number of ‘pieces’ completed – payment per shirt sown or bucket of fruit picked. Without indicating my enthusiasm of otherwise for clause 5 of Schedule 3 it does not do this. Paragraph 3 of the clause rather allows the Dean to confine the number of hours within which the work is to be completed by setting the maximum number of hours for which payment will be made. This can be distinguished from payment for each paper marked, which is the basis of a true piece rate.

[88] In reaching my conclusion I have not had regard to the 2010 Award. The 2014 Agreement says, at clause 7 that it ‘wholly displaces any award (existing or future) and any agreement which, but for the operation of this Agreement would apply.’ Considering the words of the Agreement in the context of the 2010 Award is not appropriate given that the 2010 Award does not apply.

[89] Taking all of these matters into account I am satisfied that there is ambiguity or uncertainty in the 2014 Agreement. That ambiguity or uncertainty is concerned with the payments to be made to sessional employees who are engaged in marking where that marking is not part of a composite rate already paid; that is where the marking is a distinct function to be performed.

[90] My conclusion is consistent with the view expressed in Tenix that the ‘Commission will generally err on the side of finding an ambiguity or uncertainty where there are rival contentions advanced and an arguable case is made out for more than one contention.’ 14 [Endnotes omitted]

[14] It is evident from the above that the Commissioner did not accept either construction advanced by the NTEU. The Commissioner also did not accept the position for which Monash contended, namely that there was no ambiguity or uncertainty. Instead, the Commissioner posited that the ambiguity or uncertainty which she has identified concerned the payments to be made to sessional employees who are engaged in marking where that marking is not part of a composite rate already paid; that is where the marking is a distinct function to be performed. This ambiguity or uncertainty was said to exist because whilst paragraph 3 of clause 5 of Schedule 3, when read in isolation, may appear clear, when read in combination with other paragraphs in the clause and in conjunction with clause 16.12, clause 22.1 and Schedule 2, in particular, there is ambiguity as to what a sessional employee is to be paid and the number of hours for which they will be paid for marking. 15 This is because there is some conflict between the provisions to create ambiguity or uncertainty.16

[15] The Commissioner next turned her attention to how the ambiguity or uncertainty that she had identified might best be resolved. The Commissioner reasoned as follows:

[109] Regardless of what may have been the mutual intention of the parties in negotiating the 2009 Agreement and the 2014 Agreement, it is evident that there is a patchwork of arrangements across Monash with respect to the payment of sessional staff for marking. It is also clear on the evidence of Mr Picouleau that no directive was ever given by Monash HR after the finalisation of the 2009 or 2014 Agreements to faculties requiring them to ‘develop guidelines in consultation with academic staff’ or have determinations of the Dean promulgated consistent with these guidelines.

[110] The evidence of Mr Picouleau that payments for marking were in accordance with faculty guidelines is unreliable to the extent it suggests that guidelines and determinations exist in all faculties, particularly given his concession that there were no documents on which he made this assertion but rather he based it on discussions with unnamed (and not called) people within the university.

[111] Any claim that Mr Cullinan’s makes that NTEU had always sought payment for sessional staff for all hours spent marking (if this is what he does say in his evidence) is not reliable. He was not present in negotiations where marking was considered. Mr McGowan, who clearly was a key player in the negotiations for the 2009 Agreement for the NTEU was not called as a witness. He, along with Mr Picouleau, was integral to the negotiations. No reason was given for not calling him.

[112] For the reasons given above I do not intend to rely on the conduct of the parties post the making of the 2014 Agreement nor do I intend to rely on any ‘without prejudice’ communications between the parties.

[113] In these circumstances I consider that the best evidence I have are the notes from the bargaining meetings and other known facts.

[114] What was known to the parties at the time the negotiations for the 2009 Agreement took place were the provisions of the 1996 Staff Handbook, the content of the 2002 Award and the 2005 Agreement, (sic)

[115] The relevant provisions of each of these are:

[116] It is against this background that the negotiations for the 2009 Agreement occurred. These negotiations were attended by Mr McGowan and others for the NTEU, and Mr Picouleau and others for Monash.

[117] At the time the parties negotiated the 2005 Agreement they were well aware of the content of the 2002 Award. I have no evidence as to how or why the provisions came to be in the 2005 Agreement. What is evident however is that the critical elements with respect to payment for separate marking based on a determination of the Dean did not change between the 2005 Agreement and the 2009 Agreement although the reference to ‘contemporaneous marking’ as part of the associated work for tutoring or lecturing was removed in the 2009 Agreement.

[118] The (excerpts of) notes from the meetings between Monash and the NTEU in relation to the bargaining of the 2009 Agreement were admitted into evidence and were the subject of cross examination of Mr Picouleau who was a participant in those meetings. The evidence indicates that:

● Monash rejected the views of the NTEU with respect to marking at the meeting on 29 October 2008.

● On 19 June 2009 Mr McGowan from the NTEU indicated that the NTEU wanted a separate payment for all marking outside teaching, not just outside teaching period.

● On 26 June 2009 Mr McGowan indicated that the NTEU was opposed to any piecework approach to payment for marking but otherwise was not opposed to guidelines being developed.

● On 13 July 2009 Mr McGowan indicated that the marking matter was ‘sort of done but not quite’ and that the parties were ‘close to [agreement]’. 

[119] With respect to the meeting of 13 July 2009 I am satisfied that the document to which Mr McGowan’s statements refer is the ‘marked up’ version of Schedule 3 Mr Picouleau says he provided to the NTEU on that day.

[120] I accept the evidence of Mr Picouleau with respect to the drafting  that was done (the ‘offer’ documents) of clause 5 of Schedule 3 of the 2009 Agreement. It is common in negotiations for discussion to occur and one party go away and draft a clause based on their understanding of the discussion. Such a clause may then be subject to re-writes as the nature of the discussions is sought to be properly captured and changes agreed upon. Whilst I accept that the NTEU may not have put any of the words in writing to Monash there is no evidence that the drafting did not arise from negotiations between the parties.

[121] It is evident that the parties entered into a bargain in 2009 that removed contemporaneous marking from the lecturing and tutoring rates and built on the provisions of the 2005 Agreement with respect to payment for separate marking. There is no evidence that the parties sought to substantially alter this precept of the 2005 Agreement with respect to the Dean’s determination. Even if the NTEU had started out with such an intention it entered into an agreement that retained many of the features with respect to the ability of the Dean to determine the number of hours to be paid for marking.

[122] I cannot accept Mr Cullinan’s evidence otherwise. He was not part of the bargaining where marking was discussed and produced no direct evidence of, what he argues, was the intention.

[123] I have also taken note of:

● the memorandum of agreement signed by the parties on 24 August 2009 prior to making the 2009 Agreement which does not indicate any intention to alter the marking provisions insofar as they applied to determinations of the Dean from the 2005 Agreement. 

● the guide to the proposed 2009 Agreement issued by Monash in the lead up to the voting on the 2009 Agreement which makes clear that, with respect to marking:

● guides are to be developed; and

● more beneficial arrangements may stay in place at the discretion of Monash.

[124] Taking all of this into account I am satisfied that the mutual intention of the parties was to set an hourly rate for marking and establish a systematic approach to the making of a determination by a Dean with respect to the hours to be allowed for marking.

[125] I am also satisfied that it was intended that, until a Dean’s determination was made in accordance with paragraph 3 of clause 5 of Schedule 3, sessional staff would receive the hourly rate set out in Schedule 2, or any other more beneficial arrangement, for all hours spent marking. Absent any determination from the Dean, it is difficult to see how it could be otherwise. 17 [Endnotes omitted]

[16] Accordingly, the Commissioner determined to vary the Agreement in the manner set out earlier in this decision.

Grounds of appeal and contentions

[17] Among the many grounds raised by Monash in this appeal, the central theme that it advances is that the Commissioner erred in finding ambiguity where none existed and in doing so found an ambiguity for which neither party contended, and ordered a variation of the Agreement that had neither been sought by any party nor put to the parties in order to enable them to address the proposed variation.

[18] By its notice of appeal and its submissions filed in the appeal, Monash contends in summary, that the Commissioner erred:

a. in acting on a wrong principle by failing to make an objective judgment as to whether the wording of clause 5 of Schedule 3 of the Agreement was ambiguous or uncertain; 18

b. in concluding that the clause 5 of Schedule 3 of the Agreement (including if read in the context of the Agreement as a whole) was ambiguous or uncertain; 19

c. in failing to give adequate reasons by not adequately identifying the nature of the ambiguity or uncertainty found to exist, including by not identifying the alternative meaning available on a construction of clause 5 of Schedule 3 of the Agreement; 20

d. in determining whether any variation should be made to clause 5 of Schedule 3 of the Agreement, because the Commissioner needed to have regard to, at the very least as a central matter, the “mutual intention of the parties” to the Agreement. That task is an objective one which should begin and end with an analysis of the language of clause 5 of Schedule 3, read in the context of the Agreement. This is because it is the language in the Agreement itself that has been chosen by the parties to reflect their mutual intention. The Commissioner did not focus on clause 5 of Schedule 3 and instead focused on various parts of the evidence regarding the history in respect of the payment of sessional staff for marking and matters that went to the negotiations in respect of the marking clause. Thus the Commissioner relied on these more extrinsic matters and not clause 5 of Schedule 3 itself to try and ascertain the mutual intention of the parties; 21

e. by misdirecting herself in the task of determining the mutual intention of the parties by premising such search for the mutual intention of the parties from the erroneous viewpoint that “[i]t seems to me that it is not possible for a sessional employee to be paid at the rate per hour in Schedule 2 of the 2014 Agreement if the Dean can, at the same time, limit the number of hours that will be paid or the University can put in place some other arrangement at its discretion”; 22

f. in concluding the mutual intention of the parties was that until a Dean’s determination was made in accordance with clause 5 of Schedule 3, all hours actually spent marking would be paid unless there existed a more beneficial arrangement. This is because the conclusion was contrary to any proper construction of clause 5 of Schedule 3; was unsupported by the evidence; involved a conclusion that was not advanced by any party; and was not supported by any adequate reasons; 23

g. by denying Monash natural justice in:

i. making a finding as to the mutual intention of the parties; and
ii. making a variation based on (i) –

in circumstances where such contention as to the mutual intention of the parties (and the consequential variation) was not contended by any party or foreshadowed by the Commission to the parties; 24

h. by varying clause 5 of Schedule 3 so that it has an operation that was not contemplated on a plain reading of the provision itself; 25

i. in exercising any discretion the Commissioner had to vary clause 5 of Schedule 3 by:

i. failing to take into account, or failing to take adequate account of, the language of clause 5 of Schedule 3 (including if read in the context of the Agreement as a whole);

ii. failing to take into account, or failing to take adequate account of, the history of how sessional academics have been paid for marking prior to the negotiation of the Agreement, including in respect of its predecessor agreement; and

iii. finding that prior to the Agreement there was a “patchwork” of arrangements with respect to the payment of sessional staff for marking, when in fact the evidence was that overwhelmingly sessional staff were paid for marking based on the hours allowed for such tasks to be completed; 26

j. in exercising any discretion she had to vary clause5 of Schedule 3 by failing to take into account, or failing to take adequate account of, the negotiation positions of the parties in respect of the predecessor agreement; 27

k. in refusing to admit evidence of the NTEU claims in writing in relation to the negotiations for the predecessor agreement, on the basis that they were marked “without prejudice” in circumstances where:

i. the Commissioner admitted evidence by an NTEU officer about the nature of the NTEU’s claims in those negotiations and admitted evidence of notes of bargaining meetings in those negotiations;

ii. the NTEU put in issue the construction of the predecessor agreement and Agreement and/or the surrounding circumstances relevant to the construction of such agreements and, as such, waived any purported right it may have to object to the tender of the without prejudice document;

iii. the predecessor agreement is, in relevant respects, identical to the Agreement; and/or

iv. the Commissioner found that the without prejudice document formed part of the objective background facts known to all parties and the subject matter of the predecessor agreement; 28

l. failed to have regard to or deal with the waiver point (referred to in k ii above) when determining that the without prejudice document would not be admitted into evidence; 29

m. in the findings of fact made at [124] and [125] of the Decision, which findings were contrary to the language of clause 5 of Schedule 3 and not consistent with the positions advanced by either party. 30

[19] In short compass, the NTEU contends the Decision is not affected by appellable error and permission to appeal should be refused. It maintains that the Commissioner correctly established a jurisdictional prerequisite to the exercise of power under s.217 of the Act by finding that several provisions of the Agreement created an ambiguity or uncertainty with respect to payment for marking by sessional staff. That conclusion was underpinned by a proper analysis of the relevant provisions of the Agreement, and a clear articulation of the ambiguity or uncertainty at issue.

[20] The NTEU contends that having established the jurisdictional prerequisite, the Commissioner was then entitled to exercise a broad discretion under s.217 to vary the Agreement to reflect the mutual intention of the parties. The exercise of that discretion was not affected by an error in the decision-making process of the kind identified by the High Court in House v King. 31 It says that the Commissioner’s finding as to the mutual intention of the parties, and the variation ordered to reflect that finding, were open. As to the specific appeal grounds, the NTEU contends that:

a. the Commissioner applied the correct legal test for the purposes of making an objective judgment that the Agreement contained an ambiguity or uncertainty with respect to how sessional staff were to be paid for marking; 32

b. correctly concluded that there was an ambiguity of uncertainty and rejected Monash’s approach of seeking to focus the search for an ambiguity or uncertainty narrowly on the words of clause 5 of Schedule 3 “in isolation of any other clause in the 2014 Agreement”; 33

c. the Commissioner’s reasons at [81]-[89] of the Decision articulate the essential grounds for reaching the decision on the question of ambiguity or uncertainty in a manner which disclosed the Commissioner’s reasoning process. These paragraphs plainly disclose that the Commissioner found a conflict between clause 16.12, clause 22.1 and Schedule 2, which indicated that sessional staff are entitled to hourly rates for marking, and clause 5 of Schedule 3, which allowed the Dean and the University to make other arrangements for remuneration of sessional staff in respect of marking work; 34

d. having identified an ambiguity in the language of the Agreement (arising from the combination of clauses 16 and 22, Schedule 2 and clause 5 of Schedule 3), the Commissioner was empowered to exercise a discretion under s.217 of the Act to identify the mutual intention of the parties and to vary the Agreement to reflect that intention and was entitled to have recourse to extrinsic materials to ascertain the mutual intention of the parties; 35

e. the Commissioner’s search for the mutual intention of the parties with respect to payment was correctly premised on a finding at [81]-[86] of the Decision that the Agreement contained an ambiguity or uncertainty with respect to how sessional staff are to be paid for marking; 36

f. in ascertaining the mutual intention of the parties for the purposes of exercising a discretion to vary the 2014 Agreement, the Commissioner was not limited by the form of the application; 37

g. there was no denial of natural justice. The parties had a proper opportunity to comment in the course of an oral hearing and by way of comprehensive written submissions on the legal and factual questions at issue in the proceeding. The parties were aware of, and had the opportunity to test and address, the evidence in the proceeding. The Commissioner was entitled to reach a conclusion as to the mutual intention of the parties on the basis of the evidence before her, and to vary the Agreement accordingly. In doing so, the Commissioner was not limited to the proposals of the parties. Further, the Commissioner was not required to disclose to the parties any proposed conclusion on a matter at issue in the proceeding, or the thinking process underpinning that conclusion; 38

h. there is no error of fact or law disclosed by the Commissioner’s exercise of discretion under s.217 of the Act; 39

i. the Commissioner’s findings as to mutual intention which Monash contends were erroneously made were based on an assessment of the evidence at [113]-[123] of the Decision and were open. The Commissioner was entitled in the exercise of discretion to determine the weight to be attributed to certain evidence, and was not required to give particular consideration, or refer in the Decision, to specific items of evidence. No error arises from the Commissioner’s treatment of the evidence with respect to the mutual intention of the parties; 40

j. a determination as to the admission of particular evidence were matters for the judgment of the Commissioner and the exercise of that judgment to exclude evidence of the “without prejudice” NTEU communication did not involve error; 41

k. the submissions made by Monash as to waiver were in substance the same as its submissions with respect to exceptions to “without prejudice” privilege in s.131(2)(e) and (g) of the Evidence Act 1995 (Cth). The Commissioner addressed those submissions at [70]-[71] of the Decision; 42 and

l. the Commissioner’s factual findings which Monash contends were erroneously made were based on an assessment of the evidence and were open. 43

Whether appellable error disclosed

[21] We have found it unnecessary to deal with each of the various grounds of appeal advanced by Monash because we are persuaded that Monash has made good its denial of natural justice ground, and given the nature of the error identified, that provides a sufficient and appropriate basis in this case to grant permission to appeal, to uphold the appeal and to set aside the Decision.

[22] It is true, as the NTEU have submitted, that subject to the terms of s.217 of the Act, the Commissioner was not limited to making a decision in relation to the application in the terms applied for by the NTEU. 44 Moreover, as the Full Bench in Tenix pointed out, once an ambiguity or uncertainty is identified the Commission is “empowered to remove it by varying the Agreement in a manner which gave effect to the mutual intentions of the parties at the time the agreement was made” and it “was not limited by the form of the application” made by the applicant.45 But that is not an answer to the criticism raised by Monash.

[23] As we have earlier observed it is evident from the Decision that the Commissioner did not accept the two competing constructions advanced by the NTEU, nor did she accept the position for which Monash contended, namely that there was no ambiguity or uncertainty. Instead, the Commissioner identified the ambiguity or uncertainty to which we have already referred. That view of ambiguity or uncertainty was not raised with the parties. Although we consider it would have been desirable for the Commissioner to have put her view as to the character of the ambiguity or uncertainty to the parties to enable them to address that view, by itself, this might not have been fatal. However, once the Commissioner identified the “mutual intentions” of the parties, and determined a variation to resolve the ambiguity identified by her, without putting that proposed variation to the parties, she denied Monash natural justice because it was plainly not given an opportunity to make submissions as to whether the variation was appropriate.

[24] It is not in contest in this appeal that these matters were not put to the parties during the proceedings, nor is it in contest that neither the Commissioner’s “mutual intentions” finding, nor the variation orders were advocated by the parties.

[25] It is plainly the case that if a decision-maker intends to dispose of an application in a manner that is adverse to the interests of a party to the proceeding by reference to some consideration which was not agitated before the decision-maker, then the decision-maker is required to give that party an opportunity to respond to that consideration before the decision-maker decides a matter. This is just another way of illustrating the importance which the law attaches to the need to bring to a person's attention the critical issue or factor on which the administrative decision is likely to turn so that the person may have an opportunity of dealing with it. 46

[26] In the instant case, Monash did not have any notice of the character of the ambiguity identified by the Commissioner much less the proposed variation that the Commissioner was contemplating to cure the ambiguity identified. It is, with respect, not to the point to suggest, as the NTEU did on appeal, that there was no denial of natural justice because the parties had a proper opportunity to comment in the course of an oral hearing and by way of comprehensive written submissions on the legal and factual questions at issue in the proceeding. The parties were aware of, and had the opportunity to test and address, the evidence in the proceeding. They did so by reference to the two contentions advanced by the NTEU, neither of which were adopted and did not found the basis of the Commissioner’s conclusion as to ambiguity or the resultant amendment. Had the Commissioner concluded that the basis for ambiguity advanced by the NTEU was made good, then it would be correct that the Commissioner was not bound to vary the Agreement in the manner proposed by the NTEU in order to remedy the ambiguity. In such a case it could properly be said that Monash had the opportunity to both address the ambiguity question and the remedy question. However, the Commissioner did not so conclude.

[27] As neither the character of the ambiguity identified nor the remedial action taken were raised by the parties or by the Commissioner during the proceeding, it cannot fairly be said that Monash had the opportunity to respond. Moreover, we do not consider that the amendment ultimately made ought reasonably to have been in the contemplation of Monash so as to put in a position to respond during the preceding.

[28] Given the nature of the appellable error identified we consider that it is in the public interest for permission to appeal to be granted and for the reasons given we propose to uphold the appeal and quash the Decision and Order.

[29] We have considered whether we should rehear the application on the basis of the material before us but we have decided against this course because there are aspects of the construction advanced by Monash with which we would wish to engage. Moreover, there has not been a proper opportunity to engage with the ambiguity advanced by the Commissioner, nor it is clear to us whether, in adopting the ambiguity identified and the remedy proposed by the Commissioner, the NTEU has abandoned its earlier construction and proposed remedy.

Disposition

[30] For the reasons given above we would grant permission to appeal, we would uphold the appeal, we would set aside the Decision and Order, and we would remit the application to Deputy President Kovacic.

Order

We order as follows:

1. permission to appeal is granted;

2. the appeal is upheld;

3. the decision in [2016] FWCA 7945 and the order in PR587265 are quashed;

4. the application under s.217 of the Act lodged by the NTEU is remitted to Deputy President Kovacic.

DEPUTY PRESIDENT

Appearances:

Mr J Bourke, QC with Mr B Avallone for Monash University.

Ms E Levine, Counsel for the National Tertiary Education Industry Union

Hearing details:

2017.

Melbourne.

3 March.

 1   AB Volume 1A at Tab F, pages 202 – 205 at [17] – [31].

 2   AB Volume 1A at Tab F, page 201 at [15].

 3   AB Volume 1A at Tab F, page 208 at [44].

 4   AB Volume 1A at Tab G, page 214 at [1] and AB Volume 1A at Tab G, page 224 at [35] – [36].

 5   [2016] FWCA 7945.

 6   Ibid at [89].

 7   Ibid at [127].

 8   PR587265.

 9   AB Volume 1A at Tab F, page 208 at [44] – [45].

 10   [2016] FWCA 7945 at [3] – [17].

 11   Ibid at [55].

 12   Ibid at [72].

 13   [2002] AIRC 531, PR917548.

 14   [2016] FWCA 7945 at [77]-[90].

 15   Ibid at [84].

 16   Ibid at [85].

 17   Ibid at [109] - [125].

 18   Form F7 Notice of Appeal, dated 22 November 2016 at [2.1.1]; see also Appellant’s Outline of Submissions, dated 10 February 2017 at [14] – [17].

 19   Ibid at [2.1.2]; Ibid at [18] – [23].

 20   Ibid at [2.1.3]; Ibid at [24] – [25].

 21   Ibid at [2.1.5]; Ibid at [28] – [34].

 22   Ibid at [2.1.6]; Ibid at [35] – [36].

 23   Ibid at [2.1.7]; Ibid at [37].

 24   Ibid at [2.1.8]; Ibid at [38] – [39].

 25   Ibid at [2.1.9]; Ibid at [40] – [41].

 26   Ibid at [2.1.10]; Ibid at [42].

 27   Ibid at [2.1.10(d)]; Ibid at [43].

 28   Ibid at [2.1.11]; Ibid at [45].

 29   Ibid at [2.1.12]; Ibid at [47].

 30   Ibid at [2.1.12] – [2.1.13]; Ibid at [48].

 31   (1936) 55 CLR 499 at 505.

 32   Respondent’s Outline of Submissions, dated 20 February 2017 at [9] – [19].

 33   Ibid at [20] – [24].

 34   Ibid at [25] – [27].

 35   Ibid at [28] – [32].

 36   Ibid at [33].

 37   Ibid at [34] – [35].

 38   Ibid at [36] – [38].

 39   Ibid at [39].

 40   Ibid at [40] – [42].

 41   Ibid at [43] – [45].

 42   Ibid at [46] – [47].

 43   Ibid at [48].

 44   Fair Work Act 2009 (Cth), s. 599.

 45   [2002] AIRC 531, PR917548 at [56].

 46   See for example Kioa v West (1985) 159 CLR 550 at 573, 587-588, 629, 634; Somaghi v Minister for Immigration, Local Government and Ethnic Affairs (1991) 31 FCR 100 at 108-109; Sinnathamby v Minister for Immigration and Ethnic Affairs (1986) 66 ALR 502 at 517; Broussard v Minister for Immigration and Ethnic Affairs (1989) 21 FCR 472 at 481-482; Minister for Immigration, Local Government and Ethnic Affairs v Kumar (unreported, Federal Court, Davies, Foster and Hill JJ, 31 May 1990).

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