[2019] FWC 6767 [Note: An appeal pursuant to s.604 (C2019/6694) was lodged against this decision.]
FAIR WORK COMMISSION

DECISION


Fair Work Act 2009

s.739 - Application to deal with a dispute in accordance with a Dispute Settlement Procedure

Australian Rail, Tram and Bus Industry Union
v
Transit Systems West Services Pty Ltd T/A Transit Systems West Services
(C2019/3235)

COMMISSIONER CAMBRIDGE

SYDNEY, 11 OCTOBER 2019

Dispute settlement procedure - dispute about interpretation of clause providing for additional payment when rostered off on a public holiday - no agreement as to any determination of alleged contractual obligation arising from extraneous materials - interpretation made in support of application.

[1] This Decision is made in respect of an application that was taken under section 739 of the Fair Work Act 2009 (the Act) for the Fair Work Commission (the Commission) to deal with a dispute in accordance with a Dispute Settlement Procedure (DSP). The application was lodged at Sydney on 23 May 2019, and it was made by the Australian Rail, Tram and Bus Industry Union (the RTBU or the Union) and taken against Transit Systems West Services Pty Ltd T/A Transit Systems West Services (the employer or Transit Systems).

[2] The application was advanced pursuant to a DSP which can be found at clause 85 of the State Transit Authority Bus Operations Enterprise (State) Award 2018 (the Copied State Award). The Parties agreed that the relevant procedural requirements of the DSP contained in the Copied State Award had been followed to the extent necessary to permit the application to proceed to a Determination before the Commission. Further, there was no contest that the Commission was duly empowered by the DSP to resolve the identified dispute by providing a Determination of the interpretation to be given to particular terms contained in the Copied State Award. However, Transit Systems asserted, inter alia, that the Commission did not have jurisdiction to Determine an issue of contest identified in the application and which involved asserted obligations arising from documents that were extraneous to the Copied State Award.

[3] The application was the subject of unsuccessful conciliation proceedings held on 31 May and 27 June 2019. The matter has subsequently advanced to arbitration proceedings which involved a Hearing conducted in Sydney on 10 September 2019.

[4] At the Hearing, the Commission granted permission pursuant to s. 596 of the Act, over the objections of the RTBU, for Transit Systems to be represented by lawyers or paid agents. Mr M Diamond, National Lawyer, appeared for the RTBU, and the employer was represented by Mr M Moir, barrister, instructed by Mr M Ushakoff, solicitor from Meridian Lawyers. The Parties introduced evidence by way of witness statements with each Party calling one respective witness.

[5] Mr Diamond and Mr Moir both made oral submissions in elaboration of documentary material that each had filed on behalf of the respective Parties.

Background

[6] There was little factual contest between the Parties about the circumstances which gave rise to the dispute in this matter. The dispute arose from a decision taken by Transit Systems to not make payment in the form of an Additional Payment, to particular employees (the Drivers), being Drivers who were not rostered to work on Easter Saturday, 20 April 2019.

[7] The relevant provisions of the Copied State Award relating to an entitlement to the Additional Payment when rostered off on a public holiday are found at clause 67.3 which is in the following terms:

“67.3 A full-time employee who ordinarily works on a day on which a Public Holiday is proclaimed, but is rostered off, will be entitled to the Additional Payment based on the ordinary hours, which the Employee would have worked, but for the rostered day off, up to a maximum of 7.6 hours.”

[8] It is also relevant to note that the Hours of Work provisions in clause 27 of the Copied State Award stipulate that all employees other than Bus Cleaners, Sign-on Clerks and Conductors are engaged on a “Six Day Roster”. Consequently, all drivers are subject to the “Six Day Roster” arrangements which provide that ordinary hours of duty can be rostered on any day of the week except Sunday.

[9] The Drivers to whom the Additional Payment was not made in respect of Easter Saturday, 20 April 2019, had received the Additional Payment when rostered off on Easter Saturdays in previous years. However, in previous years the Drivers had been employed by the State Transit Authority of New South Wales (STA) and their employment had transferred to Transit Systems on 1 July 2018.

[10] The changed employment arrangements that occurred for the Drivers (and others), and which involved the transfer of employment from the STA to Transit Systems, requires explanation including relevant, recent historical background.

[11] On 1 July 2018, Transit Systems commenced to conduct public bus operations in an area known as Sydney metropolitan bus services region 6 (region 6). The region 6 bus operations had previously been conducted by the STA, and the New South Wales Government decided to privatise the region 6 operations. As part of this privatisation process, employees of the STA who had been engaged in region 6 operations, were offered employment with Transit Systems. Those employees who accepted offers of employment with Transit Systems had their employment transferred, and the industrial instruments that covered the transferring employees including the Copied State Award, also transferred so that Transit Systems became covered and bound by the terms of inter alia, the Copied State Award.

[12] The letters of offer of employment that Transit Systems made to employees that were transferring from employment with the STA, set out various aspects of the terms and conditions of employment that would be transferred including the Copied State Award. As part of the transfer process, Transit Systems was obliged to apply particular policies and procedures of the STA for defined periods of either three or six months following the transfer on 1 July 2018. Relevantly, Transit Systems was required to apply an STA policy described as the Bank, Concessional Picnic and Public Holiday Procedure (the BCPH procedure) for a period of at least six months after 1 July 2018.

[13] The BCPH procedure included the following provisions:

“2.4.1 Saturday Public Holiday Payment for Bus Operators.

When a public holiday falls on Saturday, Bus Operators who are rostered off will qualify for payment if they have worked at least 10 Saturdays in the preceding 12 months. Bus Operators employed within the last 12 months of the Saturday Public Holiday to be cleared as a “day off” worked are to have the decision for payment to be determined on a pro rata basis.”

[14] The provisions of clause 2.4.1 of the BCPH procedure set out above, have their genesis in the documented resolution of an industrial dispute that was the subject of proceedings before Halen J of the Industrial Relations Commission of New South Wales (IRC NSW) conducted in April, May and June 2013 (IRC 13/271 and IRC 13/272). In matter IRC 13/271, the RTBU had notified the IRC NSW of a dispute with the STA regarding the interpretation of clause 67.3 of the predecessor industrial instrument to the Copied State Award, and which was in identical terms to current clause 67.3. The dispute regarding the interpretation of clause 67.3 was resolved by agreement reached between the RTBU and the STA and that agreement was subsequently reflected in the provisions of clause 2.4.1 of the BCPH procedure.

[15] Consequently, on and from the time at which Transit Systems commenced to conduct the region 6 operations, 1 July 2018, its employees who had transferred from employment with the STA (the transferred employees) were covered by the Copied State Award. At all relevant times the transferred employees have been and remain, covered by the Copied State Award.

[16] Further, the transferred employees have an entitlement to any benefits provided by, inter alia, the BCPH procedure for at least the defined period of six months after 1 July 2018. The transition arrangements documentation also stated that; “Following the relevant defined period, changes may be made to that policy or procedure, subject to consultation with staff and unions.” 1 There was no evidence of any consultation occurring with the RTBU about any change to the BCPH procedure prior to Easter Saturday, 20 April 2019. However, evidence was provided about consultation which did result in changes to the Bus Operations Handbook.2

[17] Against this background, the Drivers, as part of the cohort of transferred employees, expected to receive the Additional Payment when rostered off on Easter Saturday, 20 April 2019. Subsequently, in the absence of any payment of the Additional Payment to the Drivers rostered off on Easter Saturday, 20 April 2019, the RTBU activated the DSP in the Copied State Award. In the absence of any agreement being reached regarding the Additional Payment for Easter Saturday, 20 April 2019, the RTBU made the application which has proceeded to this Determination.

The RTBU Case

[18] Mr Diamond, who appeared for the RTBU, made oral submissions in amplification of written material that had been filed and served on 19 July 2019. The submissions made by the RTBU firstly confirmed that the DSP contained in the Copied State Award provided the jurisdictional basis for the Commission to determine the dispute which had arisen about the refusal of Transit Systems to pay drivers who were rostered off on Easter Saturday the Additional Payment mentioned in clause 67.3 of the Copied State Award.

[19] Mr Diamond also acknowledged that there were two “avenues” by which the Commission might resolve the dispute. According to the submissions made by Mr Diamond, one of these avenues involved the interpretation that was sought to be provided to the terms of clause 67.3 of the Copied State Award. The other avenue of potential determination of the dispute involved the Commission making a Determination as to whether Transit Systems had an obligation arising from contractual terms associated with the transmission of business that occurred when it took over operation of region 6 from the STA. The contractual obligation was said to arise from the operation of clause 2.4.1 of the BCPH procedure which had not been changed by way of any consultation prior to Easter Saturday, 20 April 2019.

[20] Mr Diamond submitted that the terms of clause 67.3 of the Copied State Award provided an entitlement for all employees who are not required to work on a public holiday to be paid the Additional Payment regardless of when the public holiday occurred and irrespective of whatever the reason was for being rostered off.

[21] Mr Diamond submitted that the words “ordinarily works” appearing in clause 67.3 had, up until the dispute taken before the IRC NSW in 2013, been interpreted without restriction so that it applied to any and all persons who could be rostered to work ordinary hours on the particular day of the week on which the public holiday fell. However, in 2013 the STA realised that a group of employees had managed to manipulate the rostering system in a manner that allowed them to in large part, avoid working on Saturdays. This manipulation of the rostering system was known as the “lifestyle” roster.

[22] Mr Diamond submitted that the evidence clearly disclosed that the STA decided that it would remove payment of the Additional Payment prescribed by clause 67.3 in respect to the Easter Saturday public holiday for those individuals who had in effect, become Monday to Friday workers by virtue of the “lifestyle” roster. Mr Diamond recognised that the dispute that arose about the removal of the Additional Payment in respect of Easter Saturday was settled by the Parties on the basis of a requirement that to be entitled to the Additional Payment on Easter Saturday an individual had to have worked at least 10 Saturdays in the previous year.

[23] Consequently, according to the submissions made by Mr Diamond, the Parties to the predecessor industrial instrument which became the Copied State Award, had agreed upon an interpretation for the words “ordinarily works” appearing in clause 67.3 as would apply to the Easter Saturday public holiday, to be qualified by the requirement to have worked at least 10 Saturdays in the previous year. Following the 2013 agreement between the Parties to resolve the disputed terms of clause 67.3, the terms of the clause had not been altered in subsequent industrial instruments and ultimately appeared in identical terms in clause 67.3 of the Copied State Award.

[24] Further, Mr Diamond noted that the STA had incorporated the terms of the agreement reached between the Parties in 2013 into its documented policy in the form of clause 2.4.1 of the BCPH procedure. Mr Diamond submitted that the Parties had established a meaning for the words “ordinarily works” appearing in clause 67.3 of the Copied State Award, but that rather than altering the wording of the clause to reflect their understanding, the Parties were content with the meaning being embodied in the terms of clause 2.4.1 the BCPH procedure.

[25] Thus, Mr Diamond submitted that to the extent that the words “ordinarily works” appearing in clause 67.3 of the Copied State Award may be ambiguous, the objective intention of the Parties when they negotiated those terms, was established to involve, in respect to the Easter Saturday public holiday, the qualification of an individual having worked a minimum of 10 Saturdays in the previous year. Therefore, Mr Diamond submitted that the correct construction to be given to the terms of clause 67.3 of the Copied State Award was that the words “ordinarily works” for employees on a 6 day roster (Monday to Saturday) means that the employee has worked at least 10 times in the preceding 12 month period on the same day of the week as the public holiday.

[26] Mr Diamond made further submissions which asserted that if the interpretation of the words “ordinarily works” in clause 67.3 of the Copied State Award was not found to have been established by the Parties agreement for the minimum of 10 days in the previous year, the alternative interpretation would allow for no specific number of days worked, but instead, the broader proposition that involved simply the capacity for ordinary hours to be worked on that day irrespective of the frequency that any rostering resulted in a number of days actually worked. Mr Diamond stated that either interpretation would result in the same practical outcome because the rostering applied by Transit Systems generated at least 10 Saturdays worked by all relevant individuals in each year.

[27] The further submissions made by Mr Diamond focussed upon what was asserted to be the contractual obligation upon Transit Systems to comply with the terms of clause 2.4.1 of the BCPH procedure. In this regard, Mr Diamond said that the transitional arrangements that were provided to employees in the form of an employee information kit represented promissory documentation. Mr Diamond submitted that this promissory documentation established a contractual obligation on Transit Systems. The contractual obligation required Transit Systems to observe and apply clause 2.4.1 of the BCPH procedure beyond the defined relevant period of six months because there had been no consultation with staff and unions about any change to clause 2.4.1 of the BCPH procedure.

[28] Mr Diamond said that the contractual obligation upon Transit Systems to apply the BCPH procedure was a matter that was capable of being dealt with via the DSP and he rejected that the Commission lacked jurisdiction to deal with a contested contractual obligation as had been asserted on behalf of Transit Systems. In rejecting the jurisdictional challenge raised by Transit Systems, Mr Diamond referred to the terms of the DSP which indicated that it operated to deal with a dispute “over any issue that directly affects the interests of any of the Parties” to the Copied State Award.

[29] Mr Diamond also made submissions that reiterated that the operation of clause 67.3 of the Copied State Award, both before and after the transfer from the STA to Transit Systems, had been soundly demonstrated in the evidence provided by the RTBU, and this evidence was not seriously challenged by the evidence from Transit Systems. Mr Diamond noted that certain management representatives of Transit Systems who had previously been employed as managers for the STA, were not called to give evidence to challenge any of the material provided by the RTBU. Mr Diamond urged that the absence of evidence from these individuals should lead the Commission to infer, by way of application of the principles established in the case of Jones v Dunkel  3, that the evidence from these individuals would not have assisted the case that was advanced by Transit Systems.

[30] In conclusion, Mr Diamond summarised the RTBU position by submitting that to the extent that the words “ordinarily works” appearing in clause 67.3 of the Copied State Award have some ambiguity, that ambiguity had been properly resolved by the objective intention of the Parties when they established a simple understanding that the terminology would require a minimum of 10 days to have been worked in the previous year. Mr Diamond further submitted that Transit Systems was contractually obliged to apply the terms of clause 2.4.1 of the BCPH procedure.

The Transit Systems Case

[31] Mr Moir appeared for Transit Systems, and he made submissions in amplification of the written submissions which had been filed on behalf of the employer.

[32] The submissions made on behalf of Transit Systems acknowledged that the Parties had agreed to have the dispute regarding the meaning and effect of clause 67.3 of the Copied State Award referred to the Commission for Determination. However, Transit Systems submitted that any alleged contractual obligations arising from the arrangements that were documented for employees who transferred from the STA to Transit Systems, were not matters that involved the interpretation of the Copied State Award and was therefore beyond the jurisdiction of the Commission.

[33] Mr Moir made submissions in support of the jurisdictional objection regarding any alleged contractual obligations arising from any of the employment related documentation surrounding the transfer from the STA to Transit Systems. Mr Moir submitted that the Commission had jurisdiction to construe the terms of clause 67.3 of the Copied State Award and resolve the dispute accordingly. However, Mr Moir stated that the Commission did not have jurisdiction to address whether there was a common law contractual obligation arising from other material. Mr Moir submitted that the jurisdiction provided to the Commission under section 739 of the Act did not extend to a determination as to whether the respondent had a contractual obligation to make the Additional Payments in respect to an employee not rostered to work on a public holiday. Mr Moir said that the Commission was not empowered to go into the territory of a common law contractual issue.

[34] Mr Moir made further submissions regarding the correct construction that should be provided for the words contained in clause 67.3 of the Copied State Award. Mr Moir stressed that the letter provided by the STA to resolve the 2013 dispute in the IRC NSW, which he referred to as the “side letter”, should not be used as an aid to assist the Commission in the proper construction of the terms of clause 67.3. Mr Moir submitted that Transit Systems was simply not a Party to the IRC NSW proceedings or the side letter, and therefore it was not the case that Transit Systems had agreed that “ordinarily works” in clause 67.3 means working at least 10 Saturdays in a given year. Mr Moir stressed that there was no positive evidence before the Commission of any shared or common understanding between the applicant on the one hand and the respondent on the other as to the meaning and effect of clause 67.3.

[35] Consequently, the submissions made by Transit Systems asserted that the Commission was confined to resolving the dispute by providing a Determination of the correct construction that should be given to the terms of clause 67.3 of the Copied State Award. Transit Systems submitted that the words “ordinarily works” in clause 67.3 did not have an ambiguous meaning and that the meaning of these words was clear on the face of the clause. Transit Systems stated that there was no need to consider what day of the week was involved, or how frequently the employee works on this day of the week.

[36] The submissions made on behalf of Transit Systems asserted that; “Ordinarily worked” [sic] simply means absent any illness, emergency or any other election by the employee, the employee would have worked on the actual day that has been proclaimed a public holiday. Consequently, according to the submissions made by Transit Systems, the employee did not obtain an entitlement to the Additional Payment unless the employee would have worked on that actual day but is not at work because the employer rostered them off.

[37] Mr Moir submitted that the Additional Payment under clause 67.3 provided an entitlement where the employee would have been rostered to work but they were in fact rostered off because of the fact that it was a public holiday. Mr Moir said that the terms of clause 67.3 called for an assessment of what the employee’s ordinary hours would have been but that because of the public holiday they were rostered off.

[38] In this regard, Mr Moir acknowledged that employees who did not work on a public holiday fell into two categories. According to the submissions made by Mr Moir, one category involved employees who were rostered off irrespective of the circumstances, and the second category involved employees who would have worked on that day but were rostered off because it was a public holiday and there was a reduced requirement for them to work. Mr Moir said that it was this second category of employees who were not working on the Easter Saturday which gave rise to the contest about the interpretation of clause 67.3 of the Copied State Award.

[39] Mr Moir submitted that the Commission should adopt a purposive construction for the language that was used in clause 67.3. In this regard, Mr Moir stated that the purpose of the subclause was to ensure the preservation of a full pay packet for those who would ordinarily work on the day in question, but really through no fault of their own are not required to work on the public holiday due to the fact that it is a public holiday. Mr Moir further submitted that the objective intention as distinct from what might be described as the subjective intention of the Parties, was that no extra payment was required where a public holiday falls on a non-working day as he explained that day was a day that would not ordinarily be worked by the employee.

[40] Mr Moir made further submissions which involved reference to what he described as a historical analogy of provisions that related to public holidays benefits for shift workers. In this regard, Mr Moir referred to a Decision of the IRC NSW in 1972 4 which provided for shift workers whose rostered day off fell on a day that was a public holiday to either be paid an additional day’s pay or for the employee to have one additional day added to their annual leave. The historical analogy that was traversed by the submissions made by Mr Moir also referred to the 1962 Steel Award Case5 and the 1937 Engine Drivers Case6. Mr Moir submitted that the history assisted the Commission in resolving this matter to provide for a construction that the subclause in question had the purpose that the respondent was not required to make any payment to an employee who in accordance with their ordinary rotating roster cycle was not rostered to work and does not work on Easter Saturday.

[41] In further submissions, Mr Moir rejected the interpretation as advanced by the RTBU on the basis that it used the 10 Saturdays in the previous year as an arbitrary “line in the sand”. Mr Moir indicated that the arbitrary figure of 10 Saturdays in the previous year meant that involved working on a Saturday less than 20% of the Saturdays in any given year, and this would not satisfy the dictionary meaning of “ordinarily” in terms of it connoting something that was regular or usual.

[42] Mr Moir made further submissions in the form of an alternative advanced if the Commission did not accept the primary construction that Transit Systems proposed for clause 67.3 of the Copied State Award. In support of this alternative submission, Mr Moir referred to the IRC NSW Decision in the 1976 Annual Leave Case 7 wherein the terminology of “ordinarily works” was considered and applied in respect of a determination to provide for shift workers to receive an additional week’s annual leave. Mr Moir noted that the 1976 Annual Leave Case established that a shift worker who, in a qualifying year, worked 35 shifts on Sundays or public holidays was granted one additional week’s leave each year, and that shift workers who worked less than 35 such shifts should be entitled to a proportionate amount of additional leave.

[43] Consequently, Mr Moir submitted that if the interpretation of clause 67.3 of the Copied State Award required some specification in respect to the words “ordinarily works” the Commission should follow the approach adopted by the IRC NSW in the 1976 Annual Leave Case and establish that an employee would be required to have worked at least 35 Saturdays in the 12 month period. Mr Moir supported the submission further by asserting that a reasonable person would consider that to ordinarily work on a Saturday would require 35 Saturdays a year as opposed to just 10.

[44] In summary, Mr Moir submitted that the Commission did not have jurisdiction to deal with that aspect of the dispute that had been raised by the RTBU regarding any contractual obligation arising from terms of clause 2.4.1 of the BCPH procedure. Notwithstanding this jurisdictional impediment, Mr Moir stated that his client wanted a consistent merit-based Determination rather than the expedient outcome that had been developed without involvement from Transit Systems. Further, Mr Moir submitted that the correct construction to be provided to the terms of clause 67.3 of the Copied State Award meant that any entitlement to the Additional Payment would only arise in circumstances where the employee had been rostered off because of the day being a public holiday. Alternatively, Mr Moir submitted that if the terms of “ordinarily works” required some specification, the qualification for obtaining the Additional Payment should involve a minimum of 35 days rather than 10 to have been worked in the previous year.

Consideration

The Dispute

[45] The dispute in this instance has arisen from the decision of Transit Systems to refuse to make payment of an Additional Payment to the Drivers who were rostered off on Easter Saturday, 20 April 2019. The Additional Payment was asserted to be an entitlement provided by clause 67.3 of the Copied State Award, the terms of which are repeated:

“67.3 A full-time employee who ordinarily works on a day on which a Public Holiday is proclaimed, but is rostered off, will be entitled to the Additional Payment based on the ordinary hours, which the Employee would have worked, but for the rostered day off, up to a maximum of 7.6 hours.”

[46] The critical operative words upon which the contested construction question has arisen are those words “ordinarily works” which establish a pre-requisite for any entitlement to the Additional Payment. A dispute about this contested construction question arose in 2013, and the Parties to the predecessor industrial instrument to the Copied State Award settled upon an agreed construction which established that “ordinarily works” required a minimum of 10 days actually worked in the year prior to the public holiday.

[47] The Parties to the predecessor industrial instrument did not vary the terms of clause 67.3 to reflect their agreed construction for the terms “ordinarily works”. Instead, the Parties documented the agreed construction for the terms “ordinarily works” appearing in clause 67.3 of various iterations of predecessor industrial instruments by way of terms included in a policy and procedure manual, referred to as the BCPH procedure.

[48] The relevant BCPH procedure included the following terms which are repeated:

“2.4.1 Saturday Public Holiday Payment for Bus Operators.

When a public holiday falls on Saturday, Bus Operators who are rostered off will qualify for payment if they have worked at least 10 Saturdays in the preceding 12 months. Bus Operators employed within the last 12 months of the Saturday Public Holiday to be cleared as a “day off” worked are to have the decision for payment to be determined on a pro rata basis.”

[49] On and from 1 July 2018, as a result of a transmission of business, Transit Systems became a Party covered by the Copied State Award and bound to apply its terms and conditions to employees who had transferred their employment to Transit Systems from the STA. In addition, the transferring employees were provided with documented transition arrangements which inter alia, advised that policies and procedures such as the BCPH procedure would transfer to employment with Transit Systems for a minimum period of six months, after which, any changes to policies or procedure would be made subject to consultation with staff and unions.

[50] Consequently, the dispute that has arisen from the refusal of Transit Systems to pay the Additional Payment to the Drivers who were rostered off on Easter Saturday, 20 April 2019, has been identified to involve the Determination of two separate but interrelated questions. Regrettably the Parties were unable to settle the precise terminology of the questions for Determination. However, it became apparent that the first question for Determination regarding the interpretation of the terms of clause 67.3 of the Copied State Award was uncontroversial, and the second question regarding any obligation on Transit Systems in respect of the BCPH procedure was challenged as being a matter beyond jurisdiction of the Commission. Notwithstanding this challenge, it is helpful to clarify the questions under consideration.

[51] The first question for Determination is; What construction should be given to the terms of clause 67.3 of the Copied State Award? Specifically, what meaning should be given to the words “ordinarily works” in order to activate the entitlement to the Additional Payment?

[52] The second question for Determination is; Was Transit Systems obliged to apply the BCPH procedure and make payment of the Additional Payment to the Drivers who were rostered off on Easter Saturday, 20 April 2019, despite the 6 months defined period having passed but because of the absence of consultation with staff and unions?

[53] There is something of an overlap between the first and second questions, and in large part, if the construction for the words “ordinarily works” in clause 67.3 establish basis for entitlement to the Additional Payment which is either consistent with the BCPH procedure or more generous than provided for in the BCPH procedure, then any determination of the second question would be unnecessary.

Clause 67.3 of the Copied State Award

[54] Any consideration of the terms of clause 67.3 of the Copied State Award should first recognise the nature and status of the industrial instrument under examination. The Copied State Award is not an Enterprise Agreement made and approved under Part 2-4 of the Act, nor is it a Modern Award made under Part 2-3 of the Act. The Copied State Award is a copied State instrument made in accordance with Part 6-3A of the Act in circumstances where there was a transfer of business from a State public sector employer to a national system employer.

[55] Further, although the Copied State Award is an award of the IRC NSW it is an award made by consent of the Parties as is reflected on page 44 which contains the signature page for the respective representatives of the STA and the RTBU. Consequently, the Copied State Award does not represent an arbitrated set of minimum terms and conditions as found in Modern Awards. Rather, although it is clearly not an Enterprise Agreement it is an instrument that represents agreed terms and conditions that have been negotiated between the Parties in much the same way as an Enterprise Agreement.

[56] Consequently, the Copied State Award is an instrument that for the purposes of any Determination of a contested construction question, should appropriately attract, with necessary modification, the application of the principles relevant to the task of construing an Enterprise Agreement. Those principles, as most recently modified, are set out at paragraph [114] of the Full Bench Decision in AMWU v Berri 8 (the Berri principles) and are in the following terms:

“1. The construction of an enterprise agreement, like that of a statute or contract, begins with a consideration of the ordinary meaning of the relevant words. The resolution of a disputed construction of an agreement will turn on the language of the agreement having regard to its context and purpose. Context might appear from:

(i) the text of the agreement viewed as a whole;

(ii) the disputed provision’s place and arrangement in the agreement;

(iii) the legislative context under which the agreement was made and in which it operates.

2. The task of interpreting an agreement does not involve rewriting the agreement to achieve what might be regarded as a fair or just outcome. The task is always one of interpreting the agreement produced by parties.

3. The common intention of the parties is sought to be identified objectively, that is by reference to that which a reasonable person would understand by the language the parties have used to express their agreement, without regard to the subjective intentions or expectations of the parties.

4. The fact that the instrument being construed is an enterprise agreement made pursuant to Part 2-4 of the FW Act is itself an important contextual consideration. It may be inferred that such agreements are intended to establish binding obligations.

5. The FW Act does not speak in terms of the ‘parties’ to enterprise agreements made pursuant to Part 2-4 agreements, rather it refers to the persons and organisations who are ‘covered by’ such agreements. Relevantly s.172(2)(a) provides that an employer may make an enterprise agreement ‘with the employees who are employed at the time the agreement is made and who will be covered by the agreement’. Section 182(1) provides that an agreement is ‘made’ if the employees to be covered by the agreement ‘have been asked to approve the agreement and a majority of those employees who cast a valid vote approve the agreement’. This is so because an enterprise agreement is ‘made’ when a majority of the employees asked to approve the agreement cast a valid vote to approve the agreement.

6. Enterprise agreements are not instruments to which the Acts Interpretation Act 1901 (Cth) applies, however the modes of textual analysis developed in the general law may assist in the interpretation of enterprise agreements. An overly technical approach to interpretation should be avoided and consequently some general principles of statutory construction may have less force in the context of construing an enterprise agreement.

7. In construing an enterprise agreement it is first necessary to determine whether an agreement has a plain meaning or it is ambiguous or susceptible of more than one meaning.

8. Regard may be had to evidence of surrounding circumstances to assist in determining whether an ambiguity exists.

9. If the agreement has a plain meaning, evidence of the surrounding circumstances will not be admitted to contradict the plain language of the agreement.

10. If the language of the agreement is ambiguous or susceptible of more than one meaning then evidence of the surrounding circumstance will be admissible to aide the interpretation of the agreement.

11. The admissibility of evidence of the surrounding circumstances is limited to evidence tending to establish objective background facts which were known to both parties which inform and the subject matter of the agreement. Evidence of such objective facts is to be distinguished from evidence of the subjective intentions of the parties, such as statements and actions of the parties which are reflective of their actual intentions and expectations.

12. Evidence of objective background facts will include:

(i) evidence of prior negotiations to the extent that the negotiations tend to establish objective background facts known to all parties and the subject matter of the agreement;

(ii) notorious facts of which knowledge is to be presumed; and

(iii) evidence of matters in common contemplation and constituting a common assumption.

13. The diversity of interests involved in the negotiation and making of enterprise agreements (see point 4 above) warrants the adoption of a cautious approach to the admission and reliance upon the evidence of prior negotiations and the positions advanced during the negotiation process. Evidence as to what the employees covered by the agreement were told (either during the course of the negotiations or pursuant to s.180(5) of the FW Act) may be of more assistance than evidence of the bargaining positions taken by the employer or a bargaining representative during the negotiation of the agreement.

14. Admissible extrinsic material may be used to aid the interpretation of a provision in an enterprise agreement with a disputed meaning, but it cannot be used to disregard or rewrite the provision in order to give effect to an externally derived conception of what the parties’ intention or purpose was.

15. In the industrial context it has been accepted that, in some circumstances, subsequent conduct may be relevant to the interpretation of an industrial instrument. But such post-agreement conduct must be such as to show that there has been a meeting of minds, a consensus. Post-agreement conduct which amounts to little more than the absence of a complaint or common inadvertence is insufficient to establish a common understanding.”

[57] Consideration of the contested construction for clause 67.3 of the Copied State Award has involved the application of the Berri principles modified to account for and accommodate the recognised nature and status of the Copied State Award particularly having cognisance that it is not an Enterprise Agreement, but nevertheless an instrument created by way of negotiated agreement between identified Parties. Therefore, the approach commences with a consideration of the ordinary meaning of the relevant words involving what is primarily a text-based analysis.

[58] Having guarded against any potential rewriting of the terms to achieve what might be regarded as a fair and just outcome, the question that is next traversed is whether any objectively determined common intention of the Parties could be established. In this instance, this question of objective common intention of the Parties is a matter of considerable significance.

[59] The circumstances in this instance are unusual in that the contested terms under examination were created without any involvement of Transit Systems. The Parties that created the contested terms were the STA and the RTBU. However, by virtue of operation of Part 6-3A of the Act, in circumstances where a transfer of business from a State public sector employer to a national system employer has occurred, the national system employer, Transit Systems, has in a practical sense, inherited what might be described as the industrial legacy of the position of the STA.

[60] Consequently, in assessing the objective common intention of the Parties that developed the terms found in clause 67.3 of the Copied State Award, that position, as may be reflected by objective analysis of evidence of the words and actions of the STA and the RTBU, is in a practical sense, visited upon Transit Systems. In other words, whatever may be properly established to be the objective common intention of the Parties that created the contested terminology (the STA and the RTBU), would, subject to application of all other relevant Berri principles, provide for the correct construction to be given to the contested terminology, notwithstanding that the terminology has subsequently applied to and now binds another “third” Party, Transit Systems, who had no involvement in either the development of the contested terminology, or any subsequent activity that established the objective common intention of the “first” Parties.

[61] In this case, there was an abundance of evidence to support findings to be made about the objective intention of the Parties who created the contested terminology, clause 67.3 of the Copied State Award. In 2013, the Parties resolved a dispute about the contested terminology, specifically, the Parties established a specification for what would constitute “ordinarily works” in the context of a pre-requisite for the entitlement to the Additional Payment. That specification, essentially a minimum of 10 Saturdays being worked in the previous 12 months, was initially documented in a letter of 20 May 2013 9, and the position was further clarified in the transcript of proceedings in the IRC NSW before Haylen J on 12 June 2013.10

[62] Despite the clear intention of the Parties to adopt what can be abbreviated to be the 10 Saturdays worked in the previous 12 months specification (the 10-day specification), the terms of clause 67.3 were not altered to reflect that unambiguous intention. Further, when the industrial instrument was renegotiated after the 2013 agreement, the Parties did not reflect their agreement on the 10-day specification in any alteration to the terminology of clause 67.3 in the replacement instrument which became the Copied State Award. Instead, the Parties appeared to be content with the 10-day specification being documented in the terms of clause 2.4.1 of the BCPH procedure.

[63] In respect to application of other aspects of the Berri Principles, the construction that has emerged from the evidence of the objective intention of the Parties does not lead to an interpretation made by way of an overly technical approach. Indeed, the outcome could be described as a specification that was based on simple, industrial common sense.

[64] It is also clear that the terms “ordinarily works” appearing in clause 67.3 of the Copied State Award do not have a plain meaning. The ambiguity attached to these words was identified during the 2013 dispute when it was discovered that some employees had managed to manipulate the rostering arrangements and enjoyed what was described as the “lifestyle roster.” It would seem difficult to satisfy the notion of “ordinarily works” on a Saturday if a person had managed to adopt the “lifestyle roster” and had actually not worked on any Saturday over an extended period so that they in effect, became Monday to Friday workers.

[65] Prior to the 2013 dispute, all drivers including employees enjoying the “lifestyle roster” were obtaining the Additional Payment as the notion of “ordinarily works” appeared to be connected to the hours of work prescriptions in the instrument which do not specify that ordinary hours must be worked Monday to Friday, but instead allow for rostering of ordinary hours of work on Saturdays. Consequently, the notion of “ordinarily works” could encompass at one extreme, a person who rarely, if ever actually worked on that day (Saturday) but could be required to work ordinary hours on that day. Whilst at the other extreme “ordinarily works” might be interpreted to mean, as was urged by Transit Systems, that the person had been rostered for that day but because of the reduced demand for drivers on a public holiday they were then rostered off on that day. The construction advanced at this end of the spectrum of possibilities would establish that employees were not rostered off on Easter Saturday because it was a public holiday, but they were rostered off because the Saturday timetable operated as opposed to the public holiday timetable. If this construction was adopted the clause would have never provided for any payment in respect to a Saturday public holiday.

[66] There is clearly an array of permutations that might satisfy the notion of “ordinarily works” in the context that those words are used in clause 67.3 of the Copied State Award, and this ambiguity that was identified during the 2013 dispute, was resolved when the Parties adopted the 10-day specification.

[67] The other aspects identified in the Berri principles have, to the extent that they are applicable, provided further support for the contested construction question to be resolved in accordance with the objective common intention of the Parties. As previously mentioned, the evidence of the conduct of the Parties clearly demonstrated that there had been a meeting of minds, a consensus, which provided for the adoption of the 10-day specification. In hindsight, if the Parties had reflected their unambiguous common intention by including the 10-day specification in the wording of clause 67.3 of the Copied State Award, it would seem that there would have been little or no prospect of argument from Transit Systems, and the dispute in this matter would not have eventuated.

Clause 2.4.1 of the BCPH procedure

[68] In view of the foregoing consideration, the question regarding the contested construction of clause 67.3 of the Copied State Award has been resolved on the basis that the words “ordinarily works” are to be given the meaning that has represented the objective common intention of the Parties and which is expressed in terms of clause 2.4.1 of the BCPH procedure. Therefore, it is unnecessary to determine the contested issues surrounding any contractual or other obligation upon Transit Systems to apply the BCPH procedure.

[69] However, there are two aspects of the contest surrounding the BCPH procedure which are worth noting.

[70] Firstly, clause 4.2 of the transition arrangements documentation specified policies and procedures of the STA that were said to have been transferred to Transit Systems to be applicable for defined periods of either three or six months, after which changes may be made to the policy or procedure, subject to consultation with staff and unions. There was evidence that Transit Systems successfully negotiated some change to the Bus Operations Handbook in accordance with the protocols evident in clause 4.2 of the transition arrangements documentation.

[71] However, Transit Systems did not engage in any consultation process that allowed it to change the BCPH procedure. Instead, it simply refused to apply the BCPH procedure when it was confronted with the dispute raised by the Drivers who had not been paid the Additional Payment for Easter Saturday, 20 April 2019. Consequently, had Transit Systems acknowledged that it had failed to observe the protocols of clause 4.2 of the transition arrangements, and make the Additional Payment to the Drivers in respect of Easter Saturday, 20 April 2019, it could have then commenced a consultation process that may have led to an alteration to the BCPH procedure which was more beneficial to it than ultimately having a dispute Determination of clause 67.3 of the Copied State Award that has enshrined the BCPH procedure.

[72] Secondly, the operative terms of the DSP are manifestly broad and relevantly state:

“85.1 When the Parties to this Award are in dispute with either the Union or Employer over any issue that directly affects the interests of any of the Parties, the dispute will be dealt with in accordance with this clause.”

[73] Given these terms of the DSP, it is difficult to recognise any justification for Transit Systems to seriously advance argument that the DSP did not provide jurisdictional basis for the Commission to make a binding interpretation of the terms of the transition arrangements documentation as they related to policies and procedures that governed the terms and conditions of employment of members of the RTBU. It is therefore perhaps ironic, that the adoption of what might be described as a more robust approach to what would otherwise present as a basic industrial dispute, has circumvented the very real prospect that an outcome more beneficial to the employer was likely to have emerged if it had acknowledged the clear obligation (moral or legal) to make the Additional Payment in respect of Easter Saturday, 20 April 2019, and consult about changes to the BCPH procedure for the future.

Conclusion

[74] In this case, the Commission has been required to Determine a contested construction question regarding the terms “ordinarily works” contained in clause 67.3 of the Copied State Award. A secondary or subsidiary question has also arisen regarding any legal or other obligation arising from transition arrangements documentation provided as part of a transfer of business from a State public sector employer to a national system employer.

[75] In respect to the primary question, having regard for all of the evidence that was presented, and by application of the principles relevant to the task of construing contested terms such as those under examination in this instance, the Commission Determines as follows:

The words “ordinarily works” appearing in clause 67.3 of the Copied State Award are to be given a meaning that accords with the terms of clause 2.4.1 of the BCPH procedure. Accordingly, clause 67.3 of the Copied State Award is to be applied as if it contained the following additional terminology:

Saturday Public Holiday Payment for Bus Operators

When a public holiday falls on a Saturday, Bus Operators who are rostered off will qualify for payment if they have worked at least 10 Saturdays in the preceding 12 months. Bus Operators employed within the last 12 months of the Saturday Public Holiday to be cleared as a “day off” worked are to have the decision for payment to be determined on a pro-rata basis.

[76] Given that the primary question has been resolved so that the construction to be given to the contested terms of clause 67.3 of the Copied State Award accords with the terms of clause 2.4.1 of the BCPH procedure, it is unnecessary to determine the secondary, subsidiary question regarding any legal or other obligation on Transit Systems that may have arisen from the transition arrangements documentation associated with the transfer of business.

[77] Consequently, the dispute has been Determined broadly in accordance with the application made by the RTBU. The application is concluded accordingly.

COMMISSIONER

Appearances:

Mr M Diamond appeared for the Australian Rail, Tram and Bus Industry Union.

Mr M Moir of Counsel with Mr M Ushakoff from Meridian Lawyers appeared for the employer.

Hearing details:

2019.

Sydney:

September 10.

Printed by authority of the Commonwealth Government Printer

<PR712903>

 1   Exhibit 1- Annexure DMB6 @ page 89.

 2   Transcript @ PN473.

 3   Jones v Dunkel (1959) 101 CLR 298.

 4   In re Shift Workers Case 1972, [1972 A. R.] @ page 633.

 5   Steel Award Case [1962 A.R.] @ pp. 397-398.

 6   In re Engine Drivers, &c. (Broken Hill Water Supply) Award [1937 A. R.] @ page 187.

 7   In re Hospital Employees Conditions of Employment (State) Award [1976 A. R.] @ page 275.

 8   Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union’ known as the Australian Manufacturing Workers Union (AMWU) v Berri Pty Limited [2017] FWCFB 3005, Ross P, Gooley DP and Hunt C.

 9   Exhibit 1- Annexure DMB1 @ page 44.

 10   Exhibit 1- Annexure DMB1 @ pages 40-41.