Epiq logo Fair Work Commission logo






Fair Work Act 2009                                                    








s.604 - Appeal of decisions


Appeal by Ricegrowers Limited T/A SunRice, CopRice Feeds and Australian Grain Storage Pty Ltd





10.00 AM, WEDNESDAY, 24 AUGUST 2022


DEPUTY PRESIDENT CLANCY:  Thank you.  I'll just confirm appearances, please?


MR C O'GRADY:  Yes, if the Full Bench pleases, my name is O'Grady, initial C, and I appear with my learned friend Mr Ralph, initial B.  The parties are agreed that permission is not required but I'm happy to address the Commission.


DEPUTY PRESIDENT CLANCY:  Thank you.  And via the Microsoft Teams link, please?


MR N PEFANIS:  Mr Pefanis of the United Workers Union.  Can I just add that I could hardly hear Mr O'Grady speaking then.


DEPUTY PRESIDENT CLANCY:  All right.  Can you hear me?


MR PEFANIS:  I can, yes.


DEPUTY PRESIDENT CLANCY:  Mr O'Grady, if you could just project and we'll see how we go.


MR O'GRADY:  Yes, thank you, Deputy President.


DEPUTY PRESIDENT CLANCY:  To the extent that permission was going to be - Mr Pefanis, you've spoken with Mr O'Grady about permission but to the extent that it was going to be necessary to be dealt with, the Full Bench had considered the matter and was inclined to grant permission, unless there was anything else you wished to say, Mr Pefanis?


MR PEFANIS:  No, we do agree that permission is not required to be granted, pursuant the clause in question.


DEPUTY PRESIDENT CLANCY:  Thank you.  We've received the material from the parties and invite Mr O'Grady to address us first, thank you.


MR O'GRADY:  Yes, thank you, Deputy President.


Deputy President, it would appear that there are a number of things that the parties are agreed upon.  We've dealt with permission to appeal.  The parties also appear to be at one as to whether or not we need permission to appear.


The parties also seem to be agreed as to the nature of this appeal, namely, it is an appeal that attracts the correctness standard.  This is not an appeal that concerns the exercise of discretion by the Deputy President, bringing into play principles such as those found in House v R, rather that the issue is whether the construction adopted by the Deputy President was right or was wrong and to the extent that the Full Bench forms a view that a better construction is the one that we proffer, then error will be demonstrated and there is a basis for allowing the appeal.


It would also appear to be common ground as to the practice that was adopted by my client, under the agreement, namely, the 2017 agreement, as varied by Colman DP, in 2020, and the practice that was adopted under the previous iterations of that agreement.  There are there of those iterations; there is the 2017 agreement, as originally made - - -


DEPUTY PRESIDENT CLANCY:  Sorry, Mr O'Grady, the people appearing from Sydney are having trouble with the audio so we'll just see whether - - -


MR PEFANIS:  I still am as well, Deputy President.


MR O'GRADY:  Perhaps if we swap out the microphones.


DEPUTY PRESIDENT CLANCY:  If, at any stage, parties cannot hear or follow please indicate at an early opportunity so we don't have to retrace steps.  If you need to contact the associates while people are in mid-sentence, please do that.


For those who are appearing in Sydney, would you like Mr O'Grady to go back to a particular point?


MS KING:  No, that's not necessary, thank you.


DEPUTY PRESIDENT CLANCY:  All right, thank you.


So we'll try again.


MR O'GRADY:  Yes, thank you, Deputy President.


DEPUTY PRESIDENT CLANCY:  So I think where you were getting to was that it's common ground between the parties that a practice had been adopted over a period of time.


MR O'GRADY:  A number of iterations of the agreement.  So there are, relevantly, four versions of the agreement to which that practice pertains.


The most recent version of the agreement, and the agreement that was being construed by the Deputy President, is the 2017 agreement, that was varied in 2020 by Colman DP.  Prior to that there was the 2017 agreement, as originally made.  Prior to that there was the 2014 agreement and prior to that there was the 2011 agreement.


Now, each of those agreements had, within them, clauses to the effect of clause 6, in the 2017 agreement, as varied, and I'll take the Full Bench to that in a moment, and a clause in the same terms as clause 11.1(a) of the 2017 agreement, as varied.


Over the course of the life of those four agreements, the practice that was adopted by my client was to only pay the allowances, as set out in Schedule A of the agreement.  That's, in effect, an agreed fact that appears in the statement of agreed facts at, I think, appeal book page 100.


So the issue, as we would see it, is whether, in the light of that material and applying those authorities and those principles, the Full Bench is of the view that clause 11.1(a) is an express term of the 2017 agreement, as varied, that is inconsistent with the incorporation of the terms of the Food and Beverage and Tobacco Manufacturing Award 2010, and the Manufacturing and Associated Industries Occupations Award 2010, that provide for allowances other than those contained in Schedule 1A to the agreement.


That might become a bit clearer if I take the Full Bench to the agreement itself, and that appears in a number of places in the materials but in the appeal book it commences at page 397.  You'll see there you have a decision of Colman DP, on 17 September 2020, so this is the variation decision, and you'll see that the variations made by the Deputy President are set out at pages 398 through to page 407.


Of note is that there is no variation made to either clause 6 or clause 11.  There is a variation made to the terms of Schedule A, and I'll take the Full Bench to that, in due course, but before doing that, can I take the Full Bench then to the terms of clause 6, which appear at appeal book 412?




MR O'GRADY:  You'll see there, the agreement provides, "Application of the agreement":


The terms of the Food and Beverage and Tobacco Manufacturing Award 2010 and the Manufacturing Associated Industries and Occupations Award 2010 (the Award singular) as varied from time to time, are incorporated into this agreement if an express term in the agreement -




if an incorporated award term is inconsistent with an express term of this agreement, the express term in the agreement prevails over the incorporated award term, to the extent of the inconsistency.


Then if one goes to clause 11, under the heading, "Wage rates and classification structure", 11.1 provides Schedules A and B to this agreement and then subparagraph (a):


The wage rates and allowances during the term of this agreement are set out in Schedule A.


The position of my client is the effect of that clause can be gleaned by, in effect, transposing the words "during the term of this agreement" to the front of the clause.  In effect, the effect of the clause is that, "During the term of this agreement the wage rates and allowances are set out in Schedule A".  What the clause does is identify the wage rates and the allowances that are to be payable during the term of this agreement.


The nub of the appeal really is that that is an express term that is inconsistent with the incorporation of other allowances that re contained within either the Food and Beverage Award or the Manufacturing Award.


The Full Bench will have seen, from the submissions that we filed, that is, in effect, the primary basis upon which we say the Deputy President was in error, because the Deputy President found that clause 11.1(a) did not have that effect.  In effect - and it's unclear exactly what effect he attributed to clause 11.1(a), but he did not find that it had the effect of proscribing what were the wage rates and the allowances that were to operate during the term of the agreement.


The proposition can be tested in this way, in our submission; of the clause was to read, "The only wage rates and allowances during the term of this agreement are set out in Schedule A", we would say that it was beyond argument that that would be an express term that would be inconsistent with the incorporation of the other allowances in the awards.


When one has regard to the use of the word "the" in the clause, as opposed to some other phrase, like "some of", or "additional", we would say that the word "the", in effect, means the only.


DEPUTY PRESIDENT CLANCY:  So "the" wage rates and allowances, that "the"?


MR O'GRADY:  Yes, that "the".


You will have seen, in the written submissions that we've filed, if one takes out the word "wage rates", so "The allowances during the term of this agreement are set out in Schedule A".  We say it's palpably clear that what the clause does is direct the reader's attention to what, inter alia, allowances are to be payable during the term of the agreement.


And we referred, of course, to Project Blue Sky, in the outline that we filed, where there is a need, of course, to give words effect and we would submit that, with respect to the Deputy President, his construction fails to give effect to the word "the".


DEPUTY PRESIDENT CLANCY:  So is your case, the essence of it, that you start and stop there?




DEPUTY PRESIDENT CLANCY:  Because, as I apprehend it, the respondent will say, "No, then you go to Schedule A".


MR O'GRADY:  As we understand it, what the respondent says and, indeed, what the Deputy President said, is, "No, what you do is you go to Schedule A and you do a comparison of allowance by allowance and, in effect, find whether or not there is such an overlap as to give rise to an inconsistency so as to trigger the carve out in clause 6".


DEPUTY PRESIDENT CLANCY:  You say you don't need to get there.  You start and stop with 11.1(a).


MR O'GRADY:  Yes.  And, indeed, we say that, in respect of our subsequent grounds of appeal, that a reason for preferring our construction is that there is a high degree of uncertainty associated with the process that the Deputy President's construction requires the parties to undertake in that one has to, in effect, to go all of the myriad of allowances that are contained in the two awards and then to a comparison of an allowance by allowance, in order to work out whether or not there is such an overlap as to give rise to an inconsistency.  But we also say that there is a degree of unworkability of that construction because the allowances set out in both the Food and Manufacturing Award and the - sorry, Food and Beverage Award and the Manufacturing Award, at the time that these clauses were initially drafted and inserted into the agreements are fixed not by some set sum, but by a percentage of a classification rate contained I those various awards.


What the Deputy President's construction would require the parties to have intended at the time that these clauses were inserted was that you, in effect, have three wage rates that need to be assessed, in order to work out the remuneration of a particular employee who was covered by this agreement.


We say that that's an unworkable and unattractive approach and when coupled with what we say is the force and effect of the ordinary and natural meaning of the words used in the clause is one that should be, rightly, rejected.


With respect to him, we say that these are issues that were not grappled with, in any great detail, in the Deputy President's decision.


Now, we don't see this appeal as one concerning an assessment or a critique of the Deputy President's decision because it's a correct and standard appeal.  Our task here, as we see it, is to try and persuade the Full Bench that our construction is to be preferred to the one the Deputy President adopted.


While I have this agreement open, can I take the Full Bench to Schedule A, and that commences at page 447.


DEPUTY PRESIDENT CLANCY:  Yes.  Thank you.  Yes?


MR O'GRADY:  You'll see that Schedule A commences with wage rates and you'll see that there are identified dates for the triggering of the wage rates and there is no, if you like, ongoing indexation of the wage rates.  So, basically, the agreement, as varied, and, indeed, the previous agreements, and I'll take you to the immediate predecessor, 2017 agreement as made in 2017, basically just had stop points for the various increases identified to apply.


That is slightly different to the position, in respect of allowances.  You'll see clause 2 commences at page 448, and it provides:


Allowances will be increased by 1.5 per cent for each year of the agreement, with the exception of the variation period from 1 May 2020 until 31 July 2021.  All allowances are paid as standalone allowances and are not part of the ordinary rate of pay, ordinary wage rates or used for any other purposes.


That wording flows from an insertion made by the Deputy President when he varied the agreement.  And if I can take the Full Bench back to page 405, which details the various variations that the Deputy President made, in November 2020, and you'll see, at the foot of that page, he's got clause 2 and the Deputy President helpfully highlighted in yellow the changes that were being made in any variation.  You'll see that the words, "With the exception of the variation period from 1 May 2020 until 31 July 2021" were inserted by the Deputy President at that time.


You'll also see that, if one goes above, to the table above, there were various wage increases that were also passed on, as part of the variation at that time.


But the point we would seek to make about the structure of Schedule A is there could be no argument, in our respectful submission, that the wage rates that are to apply during the term of the agreement are those set out in the table that appears at page 447.  There's no scope or room for any other wage rates to apply, because of the language.  "The wage rates" are the wage rates set out in the schedule, and we would say that given that allowances are dealt with in precisely the same way, in the same clause, there is no reason for adopting a different approach, in respect of allowances, to say, "Well, some of the allowances that you receive are set out in Schedule A, but there are others that might be incorporated".


Now, that's not to say the parties couldn't have done that, if they had have chosen to do so, in clear terms but, for the reasons I've already sought to put to the Full Bench, we say that that hasn't happened.


In addition to the first point, namely the ordinary and natural meaning point, I've touched on the fact that there was a practice in respect of the payment of only the allowances in Schedule A.  The other material that we would seek the Full Bench to take into account is what employees were told when each of the 2014, the 2017 and the 2017 as varied agreements were voted on and made by the employees.


Given that the common ground is that under the 2011 agreement the only allowances that were paid were those set out in Schedule A.  The fact that employees were told, when they voted on those subsequent agreements, that there was no change in respect of the clauses governing allowances, we would say, in combination with the practice that I've already sought to describe, was part of the context in which they should be taken to have voted to approve and make the agreement.


To that extent we would say it's a matter that can be taken account in the proper construction of the clauses, if there be any doubt about it because, ultimately, one is attempting to divine what was the objective intention of those who made the agreement when the agreements were made.  And the fact that there had been a practice and parties were told that, in effect, there's no change to the clauses governing that practice, when they voted on the agreement we say that that's a matter that can weigh into the assessment.


Now, we accept that the authorities in this space are mixed.  We do note that in the Berri decision, the Full Bench noted that what employees are told when an agreement is being approved, pursuant to section 180(5) is a matter that the Commission can have regard to.  But we also note there is a line of authority, primarily dictated by a number of decisions of his Honour Gray J, as he then was, in Prestige Property, Woolworths and Ballarat Health, that cuts against that, to an extent, and I'll need to address that in due course.


I think the parties are both agreed that the most recent discussion of these issues is that contained in the decision of Wheelahan J, in the Yarra Trams decision that we've included in our authorities and referred to and, as I understand it, the respondent also says is the correct approach and, indeed, in their outline of submissions they have set out the relevant passage from the Yarra Trams decision.


The last aspect of the appeal, or our argument on the appeal, which I've already touched upon, is the unworkability and, we would say, impracticability of: (a) adopting a construction with the inherent uncertainty that we say pertains to the Deputy President's construction, given the fact that there is a need to do an allowance by allowance assessment in order to work out whether they're incorporated or not; and (b) the difficulties associated with the different wage rates, pursuant to which the allowances, at the time the agreements were drafted, and I should note that has changed subsequently, when the 2020 Modern Awards were made, there was a move away from these percentages, but given that this language has been in place since 2011, we say the focus should be on what the 2010 award provided, when the agreement was made, but we say it's unlikely that the parties would have intended that, in order to work out what a particular employee may or may not have received in their pay packet at the end of the week, one has to have regard to: (a) the amounts proscribed in the agreement; (b) the amounts proscribed in the Food and Beverage Award, to the extent that's applicable; and/or (c) the amounts proscribed in the Manufacturing Award, to the extent that that's applicable, and then calculate the allowances in that way.


Can I then - in order to develop those points, what I'd be intending to do, if it's convenient to the Full Bench, is, firstly, rely upon the written submissions we filed.  It is a short point, as the Full Bench will appreciate.  We have sought to articulate the law and the way in which we approach it, in the written submissions.


I was intending to take the Full Bench to the appeal book to, in effect, step you through the material, in order to try and make good the points that I've raised.  Then I was intending to move to some of the authorities and say why they support the position that we're putting.


MR PEFANIS:  Sorry, it's just breaking up a little bit.  I'm not sure if my friend has moved, or something.


MR O'GRADY:  I haven't, but I'll try and continue to project.


MR PEFANIS:  Thanks.


MR O'GRADY:  Then, lastly, we'll go to some of the points made by the respondent in its submissions, if that's a convenient course.


Can I start then with the agreed statement of facts, which appears at appeal book page 100, behind tab 4 of the tabs.  You'll see there's reference, in paragraph 4, or paragraph 3, to clause 6, and I've taken the Full Bench to that.  Then, in paragraph 4 there's reference to clause 11.1(a).


In paragraph 11 and following, there are agree facts that deals with three enterprise agreements that have been approved, in accordance with the Fair Work Act, and then the variation, and that's in paragraph 12.  So they're the four, in effect, forms of the agreement that I was referring to earlier.  And it says:


Each of the Fair Work Agreements contains materially the same provisions to those outlined in paragraphs 3 to 5.  None of those agreements refer to any allowances other than those set out in Schedule A of the 2017 agreement, as varied.  The awards contain various allowances that are not otherwise included in the agreement, and those are identified.


Then, in paragraph 15:


The award allowance has never been paid by the employer during the term of the agreement or under any of the other FW agreements which contain material in the same terms regarding the payment of allowances.


Now, as you identified, Clancy DP, to an extent these subsidiary submissions don't need to be explored by the Full Bench if the Full Bench is comfortable with the position we put on our primary position, namely, the ordinary and natural meanings of the words in clause 11.1(a).


But to the extent that there is any doubt about that, we draw comfort from the practice, when coupled with what employees were told, for the reasons I've already tried to identify.


I've taken the Full Bench to the 2017 agreement, as varied, and the Full Bench will also appreciate that that same document indicates what were the terms of the 2017 agreement, when it was made in 2017, because the variations are clearly identified by Colman DP.


Could I then as the Full Bench to have a look at the 2011 agreement, and that appears at appeal book page 465.  So what I was intending to do was, in effect, go through them in chronological order now because this is an agreement where the practice was first adopted and we say that practice then informs what the employees understood when they made the subsequent iterations.


You'll see, at page 472, there is a clause 6 in, relevantly, the same terms as the clause 6 of the 2017 agreement, as varied.  Then you'll see, in clause 10.1 there is reference to - which is the equivalent of clause 11.1 in the current form of the agreement, or the form of the agreement as at 2017, as varied by Colman DP, you'll see there is a clause, in the same terms as 11.1(a):


The wage rates and allowances during the term of this agreement are set out in Schedule A.


Then if one then goes to Schedule A, that appears at page 502, and you'll see that then provides for two series of wage increases, one to occur on the first anniversary of the making of the agreement and one to occur on the - sorry, three wage increase.  There's a backpay increase and then one to occur on the first anniversary and one to occur on the second anniversary.


Then, in respect of allowances, clause 2, at page 503, provides:


Allowances will be increased at the same time and by the same percentage increase as a wage increase, as per clause 1 of Schedule A.


Then you have the second sentence, which is in the same terms as the second sentence of clause 2 of Schedule A in the current agreement, namely, they're standalone and don't form part of ordinary pay.


Then you'll see that there are allowances: there's a dust allowance, there's a meal allowance, there's a combined allowance, there's an availability allowance, a qualified electrical supervisor allowance and an attendance incentive, and those are the allowances.


In our submission, the position, as at 2011, was that there were to be allowances that were to be increased at the same time and by the same percentage as the wage rates, but both wage rates and, in our submission, allowances were, in effect, comprehensively described in the schedule, consistent with the terms of clause 10.1(a).


That position was maintained when the 2014 agreement was made, and if I can take the Full Bench to page 515?  You'll see, at page 520, you've got a clause in the same terms as clause 6 of the 2017 agreement, as varied, and you'll see, at page 522, you have a clause 10.1, which is in the same terms as the 2011 agreement was and, relevantly, as the 2017 agreement, as varied was.  The wage rates and allowances, during the term of this agreement, are set out in Schedule A.


If one goes to Schedule A, which appears at page 552, sorry, Schedule A commences at 551, you have wage rates, which are comprehensively described.  Once again, there's a back pay and then two increments.  Then you have a provision, with allowances, which changes in form, from what had existed in the 2011 agreement, because here it says:


These allowances will be increased by 3 per cent for each year of the agreement.  All allowances are paid as standalone allowances and are not part of the ordinary rate of pay, ordinary wage rates or used for any other purposes.


Then you have a number of allowances that are described, but there is no suggestion that there are any other allowances or any other award allowances that might be payable.


When the 2014 agreement was made, its terms were explained to employees as part of the approval process, through what was described as a cause and effect document, and that appears at appeal book page 672.


COMMISSIONER WILSON:  I'm sorry, what was that page?


MR O'GRADY:  Six-seven-two, Commissioner.


You'll see there is a proposed new summarised AGS Incorporised Employee Enterprise Agreement 2014-2017, outlining each clause and effect.  You'll see that the document is described, in clause 1:


This document provides a summary of the terms and effect of the proposed new summarized AGS Incorporised Employee Enterprise Agreement 2014-2017 (proposed agreement) and summarises the main changes between the current SunRice AGS Incorporised Employee Agreement 2011-2014 (current agreement) and this proposed agreement.


At page 673 there's a description of clause 6:


This clause relates to two modern awards underpinning the proposed agreement.  If a modern award clause or term is inconsistent with the clause or a term in the proposed agreement it will not apply.  There has been no change to this clause from the previous agreement.


And, at the top of page 674, clause 10.1 is dealt with:


This subclause refers to the wage rates and classifications that relate to the proposed agreement.  There has been no change to this subclause.


The nub of the submission, in respect of practice, is that employees, one would submit, being aware of what allowances they were receiving during the life of the 2011 agreement and then being told what the effect of the 2014 agreement was, were on notice that the allowances that they would be paid during the currency of the 2014 agreement, were the allowances in Schedule A.


At page 694 there was also a presentation or a slide show provided to employees, as part of the making of the 2014 agreement.  You'll see that from the heading that appears at page 694.  Then there's a heading of "What's changing", and one of the things that's changing is there was going to be an introduced allowance, namely, a disturbance allowance.  That was, of course, expressly done in the terms of Schedule A, but there is no suggestion that there is going to be any change to the practice, in respect of award allowances, during the life of this agreement.  The disturbance allowance is dealt with in more detail, at appeal book page 704 where that is described in more detail.


Then, at page 669, I'm sorry to be jumping around, but this is just the order in which materials were put before the Deputy President and that's why the appeal book has been compiled in this way.


You'll see that there was a communication to employees, as part of the making of the 2014 agreement, dated 18 September 2014.  Among other things, that directs employees to the access portal where they can get material on the agreement and what's being proposed, and one of the things that is dealt with there, of course, is the clause and effect document, which outlines the intend of clause in the proposed agreement.  So this isn't material that's been hidden under a bushel at all, this is material that's been presented to employees and, indeed, employees have been directed to an access portal where that can be obtained.




MR O'GRADY:  Yes, Commissioner?


COMMISSIONER WILSON:  I'm sorry to interrupt, but can I go back to the matter of the disturbance allowance - - -




COMMISSIONER WILSON:  - - - which you say was inserted at this time, was that - so far as you know, was that clause, or something akin to it, within the award?


MR O'GRADY:  I don't know, off the top of my head, Commissioner, but I'll seek to find out.


There was a similar process undertaken when the 2017 agreement was made, so if I could ask the Full Bench to go to appeal book page 606 you'll see there that there is a clause and effect document for the 2017 agreement, as it was originally made and, perhaps not surprisingly, it's in a similar format to the one that I've already taken the Full Bench to.  You'll see the description of what the document does is, I think, identical or relevantly identical to what was in the clause and effect document back in 2014.  Then you have clause 6 of the agreement and you'll see there's no change to this clause from the previous agreement.  Now we've got the change in numbering because we've moved from 10.1 to 11.1, but you'll see that there is no change to the subclause identified.


Then, again, employees were informed of some of this detail, through a presentation, and that appears at page 635 of the appeal book.  At page 639 there's a heading of "Allowances in detail", so the document purports to detail the allowances, but they're the allowance that, of course, are contained in the agreement, as opposed to allowances that are contained in the award.


Then there's a heading of, "What's changing - other", at 646, and there's no suggestion of any change in respect of the practice, in respect of the payment of allowances.


At appeal book page 603 the Full Bench will find a communication that went out to employees, on 29 June 2017, that, again, informs them about these documents and the access portal and the like.  You'll see, at 603, the second bullet point, under the heading "Access period", there's a reference back to the clause and effect document.


For completeness, the same type of process was undertaken, in respect to the variations that were made in 2020.  The clause and effect document appears at page 566.  It's in a similar form.  Clause 6 is dealt with at page 567, and you'll see, in bold, there's been no change to this clause from the current agreement and, at 568, dealing with clause 11.1, again, there's been no change to this clause from the current agreement.


So it's in those circumstances that we submit that part of the context in which the 2017 agreement, as varied, was made, is the practice that had been applied since 2011 and the fact that over these previous - subsequent iterations of the agreement, when employees were told about what the agreement was changing, they were told, at least in respect of clause 6 and clause 11, there was not be no change to those clauses.


Could I then to go the authorities and we've sought, in our submissions, to identify the particular passages we rely upon, so I don't want to take up too much time.  For completeness, can I simply note that in respect of permission to appeal, the authorities we rely upon are the DP World decision, that appears at tab 9 of Part A of our authorities, and the UGM decision, which appears behind tab 13 of Part A of our authorities.  Relevantly, at page 223 and pages 336 is where those cases are located.  The passages from DP World we rely upon are at 42 to 43, which is at page 235, and of UGM it's paragraph 8, which is at page 350.


The effect of those authorities, as we see it, and it's not contested, is that where a dispute resolution procedure contemplates there being a right of appeal then that necessarily displaces the requirement for the mission, because, under the Act, there is no right of appeal, absent permission, but I won't take up the Full Bench's time, in the light of the position that's been adopted by the respondent.


In respect of the nature of the appeal, can I take the Full Bench to the Railway Commissioner v Rogers decision, which is behind tab 11 of our authorities, commencing at page 269?  Again, I don't want to take up too much time, it's really just for completeness, but you'll see that this is a decision of yourself, Wilson C, along with Hatcher VP and Masson DP, and at paragraph 61 the Full Bench made reference to the correct standard, rather than the discretionary standard and, in effect, identified what that test is, which we submit is really whether the construction adopted is right or it's wrong, and hence the Full Bench doesn't need to, in effect, analyse the approach adopted by the Deputy President and find error in that approach.  Rather, it's a question of what is a better construction.


You'll see that, in support of that position, there's reference to footnote 45 and if one goes to the end of the decision, you'll see that that's a reference to the High Court decision, in the Minister for Immigration and Border Protection v SZVFW, per his Honour Gageler J.  In that decision his Honour analyses the various types of appeals and draws a distinction between discretionary appeals and correctness appeals.


More recently that approach was again adopted by another Full Bench of this Commission, in the AMIEU v Diamond Valley Pork decision.  That appears behind tab 12 of our authorities, at page 315, and the relevant paragraph is at paragraph 31 and you'll see there, the Full Bench says:


The correctness standard applies to this appeal.  That is, the relevant issue is whether the Deputy President's answer to the question of interpretation raised by the dispute before him is right or wrong.  If we consider that his answer was not correct, our duty is to is to substitute what we consider to be the correct answer for the answer given in the decision.


Which is the approach that we would urge upon the Full Bench in this case.


Can I then turn to the issue of the approach to construction.  Again, I don't need to take up much time with this because, as I understand it, the parties are agreed as to the approach.  These issues were recently summarised by the Full Court of the Federal Court, in the Ridd(?) case.  The Ridd case is behind tab 2 of Part A of our authorities, and commences at page 43.  You'll see, at paragraph 65, which appears at page 57 of the numbering, there is a succinct summary of the relevant principles and it won't surprise the Full Bench that we rely upon the first principle, which is the starting point is:


The ordinary meaning of the words read as a whole and in context.


In our submission that is the short answer to the issues raised by this appeal.


We also rely upon the third principle, namely:


Context is not confined to the words of the instrument surrounding the expression to be construed, it may extend to the entire document, of which it is a part or to other documents with which there is an association.


In that context we would submit that when one couples the language used in clause 11.1(a) with the language used in Schedule A, that is supportive of the construction that we would urge upon the Full Bench.


Then principle 5:


Records may be had to the history of the particular clause where the circumstances allow the court to include that a clause in an award is the product of a history out of which it grew to be adopted in its present form.


That, of course, is a reference to Short v Hercus.


We would submit that that approach, notwithstanding the observations of his Honour Gray J, in the Prestige Property line of authority that I'll have to come to in a moment, that approach is still open to the Full Bench and, indeed, has, of course, recently been endorsed by a Full Court in the Ridd case itself.


Then, lastly, principle 7:


Words are not to be interpreted in a vacuum divorced from industrial realities but in the light of the custom and working conditions of the particular industry.


Again, we would submit that that is consistent with the construction that we would urge upon the Full Bench.


There is, of course, the summary of principles which we would say is consistent with Ridd, that the Full Bench put forward in the Berri decision.  The Full Bench will have seen that we have made a number of references to Berri, in our written submissions.  The Berri decision is behind tab 10, commencing a page 241 and the relevant summary, of course, appears at paragraph 114, which is at page 266.


Again, we rely upon the first principle:


The construction of an enterprise agreement like to that of a statute or contract, begins with the consideration of the ordinary meaning of the relevant words.


The second principle:


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 provided by the parties.


Rhetorically, one can ask, if one just turns to the terms of clause 11.1:


The allowances, during the term of this agreement are set out in Schedule A.


The ordinary and natural meaning of that phrase, we would submit, is that that's where one goes to, to find out what are the allowances that apply whilst this agreement is in operation.


Then we also rely upon principle 13, which I touched on earlier, namely:


The capacity to have regard to what employees were told, pursuant to the requirements of section 180(5), when they decided to make the agreement.


You will have seen that in our outline we referred to an authority which does not seem to have been considered by his Honour Gray J, in the Prestige Property line of authorities but, as we would put it, reflected what might be described as a traditional approach to dealing with practice.  This is the decision of Glover v Tip Top Bakeries, and it is behind tab 8, at page 214.  The relevant - again we have a summary taken from a decision of Deckers v Lindra Home Inc Referral, that commences at page 310 of the report, where a number of propositions are set out.


The one we rely upon is that set out in paragraph 6, that is at page 311 of the report:


Where a provision has appeared in an award, or succession of awards, for a lengthy period of time and has been acted upon, without challenge by parties, in a certain manner, then if the award is reasonably capable of bearing such a meaning the court ought, in the normal course, to adopt it as its proper meaning.


Now, I'm obviously going to have to deal with Prestige Property, and the like, in a moment, but as a statement of principle we say that there is nothing inherently improper or wrong about it and certainly there was no criticism of Glover by his Honour Gray J, in Prestige Property.  If one is to apply that approach to the facts before the Full Bench here, we would submit that the construction that we put forward should be adopted.


We have here a case where the provision has appeared in the various iterations of agreement, for a lengthy period of time, and has been acted upon, without challenge, by the parties, in a certain manner.  For the reasons that I've already sought to explain, we would say that the terms of clause 11.1(a) are reasonably capable of being read in a way consistent with the construction for which we contend.


Can I then go to Prestige Properties?  That appears behind tab 5 of our Part A.  The point we would seek to make, in respect of Prestige Properties and also Woolworths, is the need to have regard to the issue that was being determined by his Honour Gray J, in that case, and the fact that the entitlement that he was considering is not one that would generally arise or be front of mind when the agreements were being made or in due course.


That flows from what appears at paragraph 1 of the decision, where the issues, as described by his Honour, was whether the Victorian Art Centre falls within the category of:


Premises of state government departments and instrumentalities for the purposes of provisions in industrial awards relating to rates of payments for persons employed in cleaning those premises.  This, in term, depends on whether the Victorian Art Centre Trust, a statutory corporation established by the Victorian Art Centre, is properly described as a state government department or instrumentality, for the purposes of the award provisions.


It is a long way, in our submission, from the type of scenario that the Full Bench is confronted with here, where we are talking about allowances that employees either get or don't get.  It's quite an abstract and complicated question that one would have thought could easily fall under the radar of those who were not taking issue with the way in which the employer had been applying the award under consideration.


DEPUTY PRESIDENT CLANCY:  So is your proposition that that stands for the authority of whether - that case is more about whether the award applied to that employer?




DEPUTY PRESIDENT CLANCY:  Not whether the allowance in the award applied?


MR O'GRADY:  Sorry, I don't want to overstate it.  My proposition is perhaps more accurately put in these terms, Deputy President, that this case concerned a provision, in respect of which non-compliance would not necessarily have been something that parties were aware of, so as to give rise to the foundation for his Honour to subsequently go on and find that, "We can't assume that there was a common assumption in respect of the way in which these provisions were applied, because it might have been common inadvertence".


If you're dealing with an obscure proposition like the one that I've just sought to describe, there may well be scope for common inadvertence, so as to underline or to undermine any capacity to put forward an assertion that the parties should be taken to have understood that this is the way this iteration of the agreement is going to be applied, because it wouldn't have been front in mind.


But that can be contrasted, in our submission, from the position that applies, where you're dealing with an allowance that an employee may or may not get as part of their weekly pay packet.


If I can briefly go to - again, this is very much a line of submission that we put really to buttress our primary submission.  But given the practice that I've taken the Full Bench to, we say that there is a proper basis for putting this line of submission to the Full Bench.


At paragraph 44 his Honour dealt with the history issue and said:


The history might be of some assistance to the respondent's case if there were any evidence of the non-payment of rates specified in the Building Services (State Government Departments) Infrastructure Award to those employees as cleaners at the centre had ever been the result of a conscious decision not to apply those rates or an awareness that, for some reason, they were inapplicable.  For present purposes, I'm prepared to accept the construction of an award can be affected by a common understanding of the parties to it about a particular state of affairs.  If such a common understanding existed when the award was made, it should not be departed from when the court came to construe the award at a subsequent time.  Care must be taken, however, to distinguish a common understanding from common inadvertence.  If the only reason why the government instrumentality rates were not paid a the centre was that neither the union nor the employer adverted to the possibility that there was an obligation to pay them, no common understanding results.  In order to have an understanding it is necessary for there to be a meeting of minds, a consensus.  There can be no meetings of minds, no consensus if no one thought about the issue.


So the point I'm simply seeking to make is there the issue is one that one can readily understand nobody thinking about.


DEPUTY PRESIDENT CLANCY:  The question that's nagging away at me, and my curiosity is about to burst, is what changed here?  We've got 2011, 2014, 2017, and then a variation to 2017 and then up, it would seem, bob three allowances that all of a sudden become claimable.  So what changed?


MR O'GRADY:  Well, as we understand it, what changed was that the union put in a claim for those allowances and notified a dispute in respect of them.


DEPUTY PRESIDENT CLANCY:  Was there a back payment claim - aspect to the claim, or is it just someone decided that they - I mean this might be something for Mr Pefanis to address us on, but I'm just curious.  Because, if that's the distinguishing factor, in a factual sense, to the case involving the art centre, and Prestige Property.


MR O'GRADY:  Well, as we understand the situation, the matter proceeded below, by way of an agreed question for determination.  But one would have thought that, given the authorities in respect of the effect of a private arbitration, were that once that matter has been determined in a particular way, then my client is potentially estopped from contending that the construction adopted by the Deputy President is not the correct one and, therefore, there could be proceedings issued in court for back payment, in respect of the non-payment of those allowances up until the period of statute of limitations.


Now, these are difficult areas, but you might recall, Wilson C, the matter that I argued before you some time ago, in respect of the Civil Air v Air Services, and the Grade A allowances.  In the course of your decision, in that case, you found that my client had failed to consult adequately with the Civil Air, prior to departing from the practice it had adopted, in respect of Grade As.


Subsequently, Civil Air issues proceedings, in the Federal Court, seeking penalties against my client for his failure to consult and said that we were, in effect, precluded from taking issue with the construction that you adopted in the resolution of that dispute because we were bound by the arbitration that had occurred.


So in circumstances where that would appear to be the effect of the authorities, as to what results from a private arbitration, and, in effect, the court is precluded from revisiting the correctness of the construction adopted by the Commission, if it is acting in the role of a private arbiter.


One would assume that what was being sought was a finding from the Commission that these allowances were payable that could then provide a potential foundation for an underpayment claim.  But I wasn't involved below, but that's how we understood - - -


DEPUTY PRESIDENT CLANCY:  I'm just wondering why it arose?


MR O'GRADY:  I can't assist, I'm sorry, Deputy President.


If I can briefly then go to Woolworths, which is behind tab 7.  We would make a similar point.  This is a decision where his Honour Gray J adopted the approach that he had adopted in Prestige Property Services and is, again, a decision that we would submit concerned an entitlement that would not necessarily be front of mind and, thus, capable of falling within the bucket of common inadvertence, as opposed to common understanding.


You'll see that the dispute is described by his Honour, at paragraph 1, where he says:


The dispute at the heart of this proceeding is about the correct calculation of the rate of pay for a part‑time employee entitled to long service leave, a collective agreement between the parties to the proceeding incorporated by reference to legislative provisions governing entitlements to long service leave in Victoria.  These provisions entitle employees to long service leave on ordinary pay.  They include a provision of ordinary pay, for the purpose of the legislative provisions.


Again, we would submit, not an issue that would necessarily be front of mind, in the way that we would submit allowances would be but, again, his Honour was of the view that reliance couldn't be placed on the conduct of the parties.  That appears at paragraph 31 and at 32 of the decision, where he expressed himself in terms not dissimilar to those in which he expressed himself in Prestige Property and, indeed, referred to and relied upon his reasoning in Prestige Property for the conclusion that he reached.


The last decision in this line of authority, and these are, of course, all authorities that have been filed or sought to be relied upon by the UWU, is Health Services Union v Ballarat Health Services decision.  It's in Part B of our authorities but, as I understand it, the UWU have sought to bring it to the Commission's attention.  I don't know whether the Full Bench has a copy of it?  Thank you.


Again, we're dealing with an untidy situation where we had former government employees who had now moved into the private sector and there's a question of the application of a commuted allowance, in respect of them.  The relevant reasoning appears at paragraphs 77 through to 79 of the decision where his Honour notes, or rejects the common understanding argument and he says, in the second sentence of 77:


An industrial instrument that has a consensual basis, such as an agreement negotiated between a trade union and an employer, is in that sense subject to the normal rule that the subjective understandings or intentions of the parties at the time they entered into the agreement cannot be used thereafter to aid in the construction of the terms of the agreement.


Now, of course, we're not relying upon the subjective understandings of the people who negotiated these agreements, rather we point to the context in which the employee voted on the agreements, to support our arguments.


He continues:


There have been cases in which it has been held that a common understanding of a term used in an industrial agreement can be used as an aid to interpreting them.  In those cases, the parties to such agreements have acted on a common understanding as to the meaning of terms in those agreements, and the terms have been repeated in successive instruments, so that it can be said that the parties have entered into the successive agreements on the basis of their common understanding of those terms.  Care is needed in approaching any suggestion of a common understanding as to terms used.  In the first place, there must be positive evidence of a common understanding.


Well, no authority is cited for that proposition and, in our respectful submission, that's directly inconsistent to the Glover decision that I took the Full Bench to a moment ago.


Ordinarily, a failure to advance an argument as to the effect of a particular provision will not constitute such evidence.  A failure to advance an argument is consistent with inadvertence, and common inadvertence is not common understanding.


Again he relies on Prestige Property and Woolworths.


The only other point I'd seek to raise is what appears at paragraph 79, and you'll note there that, consistent with the observations of the Full Bench in Berri, what his Honour notes is that now agreements are made when employees vote on them and that, in those circumstances, there is, potentially, less weight to be given to what those who negotiated the agreement understood the agreement would mean, the focus being on what the employees who voted on the agreement thought the agreement would mean.  That, again, is consistent with what we say, in respect of the material that the employees who voted on the agreement were provided with at the time they voted.


DEPUTY PRESIDENT CLANCY:  So you're saying that's the position to be adopted, not his Honour's position, which is that the employees can't be taken to have understood?


MR O'GRADY:  Yes.  In our submission, there is a distinction to be drawn between the cases that were considered by his Honour, which focused on the understanding of those who negotiated the agreement and the position here, where what you have is, in addition to a practice, you have employees being informed that there's going to be no change, in respect to the relevant clauses at the time they voted on them.


In our submission, consistent with what the Full Bench said in Berri, regard can be had to the material distributed, pursuant to section 180(5) and if, instead of saying, "The effect of this clause is blah, blah, blah", the explanation simply says, "There's no change to the operation of this clause".  And if the operation of that clause has, for a number of iterations of the agreement, been that it operates in this way, then we would submit that in having regard to the material distributed pursuant to section 180(5), the Commission can be cognisant of the practice.


DEPUTY PRESIDENT CLANCY:  One of the things that strikes me about his Honour's line of authority is that, at least with Prestige Properties and then Woolworths and, maybe to a large extent, Ballarat Health, all those cases arose in a different context, when the system moved to awards that were no longer created by a industrial dispute between the parties.  The views of the union and an employer organisation can't be the same now as they were previously.


MR O'GRADY:  We accept that and, with respect, I would adopt that.  The focus we would submit, and the way in which we seek to adduce this material is, in effect, through the section 180(5) gateway that was directly acknowledged by the Full Bench, in Berri.




MR O'GRADY:  In effect, as I tried to put earlier, we would say it's not controversial that if the explanatory material had said, "The only allowances you get are the ones in Schedule A", that that could be a matter that the Full Bench could have regard to in construing what was the effect of clause 11.1.


They didn't use that language, rather, they said there's no change, in respect of the operation of these clauses and in circumstance where it's common ground that the way the clauses have been operated since 2011 is that you don't get these allowances, that, in effect, gets you to the same end point, is the way in which we'd put it.


COMMISSIONER WILSON:  Is it strictly the case that there was common ground, on that subject?  If I recollect the agreed statement of facts, there was something to the effect that the employer has not paid these things.




COMMISSIONER WILSON:  That's quite different, isn't it, from saying that, "And the union agrees".


MR O'GRADY:  And I don't want to overstate the position, Commissioner.  I think the agreed statement of facts, in terms of these amounts, allowances, have not been paid.  So we're not suggesting that the union, in the agreed statement of facts, said that there was no requirement to pay them.  There was evidence, before the Deputy President, that they had sought, over the course of negotiating, some of these subsequent iterations of the agreement, to make express claims for some of these allowances to be included in Schedule A, and then had not pursued those allowances, as part of the negotiations.


But we would accept that that goes, really, to the subject of understanding of those who were negotiating, that those subsequent iterations of the agreement.  Where we put our reliance is on what the employees were told.  At paragraph 15, at page 102 of the agreed statement of facts, is the award allowances have never been paid by the employer, during the term of the agreement, or under any other Fair Work agreements, which contain material in the same terms, regarding the payment of allowances.


So in circumstances where that's the situation on the ground, and employees are being told, "There's no change", in respect of the operation of these clauses.  We would say that that is something that supports the construction we put forward.


Again, this is the secondary line of argument that we seek to agitate.  The primary line of argument, of course, is based upon the ordinary and natural meaning of the words in clause 11.1(a).


Can I lastly, in respect of this issue, go to what appears in the decision of his Honour Wheelahan J, in the RTBU v KDR Victoria decision, which is behind tab 6 of Part A.


DEPUTY PRESIDENT CLANCY:  What page is that?


MR O'GRADY:  This is 178.




MR O'GRADY:  You'll see, at paragraph 43, an argument was being run by Mr Borenstein, for the RTBU that there had been a change from the position in 2016 and the position in - sorry, 2006 to the position in 2009.  It was sought to be derived from that, that the change in the position of the earlier agreements was something that could be taken into account in correctly construing the current agreement.


His Honour, Wheelahan J, dealt with this argument at paragraph 59 and following, where he says he has regard to the objective history of clause 8.6 as part of permissible context, and he refers there to the change that occurred between the 2006 agreement and the 2009 agreement.  Then he notes that, "Caution needs to be exercised in having regard to this history", in paragraph 60.  Then he sets out a number of the authorities, in paragraph 61 and 62, and refers to the Gray J line of Prestige Property, Woolworths and Ballarat, in 63.  Then he sets out, at the foot of 63, what we understand to be the caveats that his Honour would place upon it, and this appears after his reference to Ballarat Health Services, where he says:


The reasons for caution before regard may be had to (indistinct) common understanding commence from the premise that it is the instrument itself that is to be construed and any recourse to industrial practice into an amount of common understanding are no more than part of the contexts in which the texture of the instrument is to be construed.  Industrial practices do not take the place of the terms of the instrument.


We would, of course, agree with that.


There is also a need to maintain coherence with other principles, including that (1) usually resource to extrinsic materials cannot displace the clear meaning of the text.


And as I put at the outset this morning, we rely upon the clear meaning of the text.  We say that the practice is consistent with that and we're not seeking to displace it.


(2) the subjective understanding of individuals is rarely relevant to objective meaning.


Again, we're not relying upon the subjective understanding of those who negotiated the agreement, rather we point to the objective context in which the agreements were made, in order to put forward the submission that, objectively, employees should be taken to have been on notice that the effect of this clause that the status quo will be maintained.


Then, thirdly:


This is also the case, in relation to collective agreements when surrounding circumstances might have to rise to the level of being notorious or known, by those intended to be bound by the agreement.


Well, again, we would submit that the practice, coupled with the terms of the explanatory material, satisfies that pre-requisite.


We do note that, with respect to him, a degree of caution needs to be relied upon in applying the Sheehan v Thiess decision, of his Honour Colvin J, and only for this reason, that that concerned a Greenfields agreement, it didn't concern agreements of the type that the Full Bench is here concerned with.


(4) the parties cannot, by words of conduct, contract out of or waive the terms of an enterprise agreement which has statutory force.


Again, we don't quibble with any of that, the issue is, what is the appropriate construction, and we're not, for a moment, suggesting that the parties are at liberty to just simply ignore the terms of the agreement but, to the extent to which the Full Bench has concerns about the primary argument that we put, we do derive support from what was done subsequently.


DEPUTY PRESIDENT CLANCY:  So where does the RTBU case leave the Gray line of authorities?


MR O'GRADY:  Well, I think it leaves it in what is said, in effect, in paragraph 63, that the Gray line of authority I don't understand his Honour Wheelahan J as rejecting but, rather, saying that it evinces the requirement for a need for caution.  But we would submit that it also needs to be read, in the light of the observations that you made, Deputy President, regarding the different statutory scheme that was in place when a number of those decisions were determined, and, as I was putting a moment ago, that the particular or peculiar nature of the entitlements that were the subject of dispute, indicated in the matters before his Honour Gray J, which we would submit, can sensibly be said to raise real questions as to whether there is common inadvertence.  But they are distinguishable, in my submission, from the position here.


Could I then go to the awards?  Can I hand up to the Full Bench and we'll email to my learned friend, a table that we prepared overnight, to simply make good the proposition that I was putting earlier, that the awards, both the Food and Beverage and Tobacco Manufacturing Award, as at the time that the 2017 agreement was made, and the Manufacturing and Associated Industries Occupations Award, as at the time that the 2017 agreement was made, had a number of allowances that were fixed by reference to a standard rate contained in the award, as opposed to the wage rates that employees might be receiving under the agreement, or as opposed to a fixed dollar sum.


Perhaps if I can illustrate that, the awards, also in tab 8 of Part A of the authorities, and perhaps if I can illustrate by reference to the Food Beverage and Tobacco Manufacturing Award, which is behind tab 14 of our authorities, which is at page 350.  It's also in the court book because we filed a copy of it.


If one has regard to what appears in clause 3, there's a number of definitions, and at page 355 there's a definition of "standard rate", which is, "The minimum hourly rate proscribed for level 5 classification, in clause 20.1(a)".  So there's a standard rate that is fixed, by reference to a level 5 classification rate under the award, and then, if one goes to the allowances in the award, which are dealt with in clause 26, which appears at page 372, you'll see that the leading hand allowance, under clause 26.1(a), is set by reference to the number of employees that the leading hand is in charge of and a percentage of the standard rate.


Similarly, the heavy vehicle driving allowance is set by reference to the vehicle size and a percentage of the standard rate.  So to is a boiler attendance allowance, which is set at 85.5 per cent of the standard rate per week extra.


The vehicle allowance is set by way of kilometres but the first aid allowance is set by reference to the standard rate.  The cold places allowance, in 26.3, is set by reference to the standard rate, 2.8 per cent of the standard rate.  Similarly, the hot places allowance is set by reference to a percentage of the standard rate, as is the wet places allowances, as is the confined spaces allowance, as is the dirty or dusty work allowance, as is the fumigation and gas allowance.


The submission, as we sought to express it in the written submissions is that it is unlikely, we would submit, that the parties sought to put in place a regime whereby an employee's weekly rate of pay would require not just an assessment of what were their entitlements under the agreement, but a requirement to then go back to the award, have a look at what the standard rate may be, from time to time, and then work out the allowances that are payable, under the award, in respect of the employee.


There's a similar point that can be made in respect to the Manufacturing Award, which I won't take the Full Bench to, but we've set out the relevant clauses.


I'm reminded that one point that should be made, in respect of the Manufacturing Award, is that, and you'll see that in that table that's headed, "Allowances under the Manufacturing and Associated Industries Occupation Award 2020" that we handed up a moment ago, you'll note that there's a footnote there that makes it clear that that's at the time that the agreement was approved, namely, October 2017.  But you'll see that under, for example, the supervisor/trainer/coordinator/technical allowance, which his the second one up from the "other allowances" table, the allowance is fixed by reference to the employee's technical classification rate.


So, again, we would submit it is unlikely that the parties intended to introduce that degree of uncertainty and complexity in respect of the payment of allowances when, of course, the other alternative construction is that the phrase, "The wage rates and allowances during the term of this agreement" are the ones in Schedule A.


We're referred, in our submissions, to the authorities that support the proposition that if a construction is going to give rise to unreasonable or capricious outcomes, then that is a reason for it not being adopted in, if you like, the Cooperbrooks(?) sense.


Could I, lastly, then turn to the submissions that have been filed by the UWU?  You'll have seen that one of the points made by the UWU is to make the point that the construction of clause 11.1 is not confined to the three allowances that were identified by the Deputy President in his decision.  We accept - sorry, there's two things we say about that.


Firstly, the only allowances, as we understand it, that went through the dispute resolution process for determination were the allowances that the Deputy President identified.  That said, we can't see any sensible reason for distinguishing between the allowances that might be payable, under the Food and Beverage Award, as compared to those that might be payable under the Manufacturing Award, given that they're both dealt with as "the Award", in clause 6 and they're application would both turn on the construction of clause 11.1(a).


We say that that is an additional reason for preferring the construction that we put forward, in that we're not just talking here about introducing one additional instrument that proscribes wage rates and allowances into the operation of the entitlements of employees, but a second instrument, namely, the Manufacturing Award.  So, for that reason, we say that that supports the position that we put.


We accept - - -


MR PEFANIS:  I'm sorry, can my friend just repeat that last sentence?


MR O'GRADY:  Yes.  That to the extent that the respondent has made the submission that the construction adopted by the Deputy President would have application to the Manufacturing Award, in addition to the Food and Beverage Award, we would accept that that's a likely outcome, but we say that that is a matter that supports our construction because it adds an additional degree of complexity to the operation of the calculation of employee entitlements.


We accept the point that's made by the UWU as to the effect of the Amcor decision, in paragraph 10 of their outline and that regard has to be had to the legislative context.  To the extent it is put by the UWU that clause 11.1 has somehow a temporal - is somehow a temporal limitation on the operation of the allowances in Schedule A, we would say that that should be rejected because there is a need to have regard to the statutory context.  In particular, the context provided by the provisions that govern the ongoing operation of an enterprise agreement and, in particular, section 54.


We would say that having regard to that context, the phrase, in clause 11.1, "During the term of this agreement", should be read as, "Whilst this agreement is in operation", as opposed to being a reference to the nominal expiry date of this agreement.  The agreement, of course, remains in operation until its replaced by another agreement or it's terminated, pursuant to the provisions of the Act.


To the extent that is put, and it's not entirely clear to us if this is what is being put, but that somehow, post the nominal expiry date of the agreement, the allowances set out in Schedule A no longer have application.  We would say that, again, that is inconsistent with the statutory scheme because whilst the agreement is in operation, clearly my client remains obliged to pay those allowances and the nominal expiry date doesn't impact upon that, one way or the other.


To the extent that it's being put that the effect of clause 11.1(a) is to preclude there being claims for further allowances, or increases in allowances, during the - until the nominal expiry date of the agreement is reached, again, we would submit that that comes hard up against the operation of the Act and the broader statutory context, in that the UWU is, of course, precluded from bringing any claims that it seeks to support, by way of protected industrial action, or any industrial action, prior to the nominal expiry date of the agreement being reached, pursuant to section 417.


Obviously, once the nominal expiry date is reached, it's open for the union to seek to negotiate an increase in allowances.  But that is work that's done by the Act.  There's no need, in our respectful submission, to read clause 11.1 in a way that imposes that sort of temporal limitation.  So we're left, in our submission, with the position that clause 11.1 has a substantive role, namely, it is a clause that directs the parties to the allowances that are payable whilst the agreement is in operation.


The UWU have also sought to make reference to the history of a number of workplace improvement agreements and the statutory changes that have occurred over the life of those agreements, including changes brought by the Work Choices legislation and the like.


Could I briefly take the Full Bench to those instruments to explain why we would submit that that doesn't impact upon the construction that we put forward?


The first instrument that the UWU refer to is the 2003 Workplace Improvement Agreement, and that appears at AB page 161.  The Full Bench will see that, at AB page 164, there is a provision in relation to relationship with parent awards, and it provides that:


The agreement is to be read and interpreted wholly in conjunction with awards and agreements listed below.


Then there is also provisions, in respect of allowances, and they're provided for in clause 22, which appears at court book - appeal book page 180, where a number of allowances are set out in the agreement.


What is missing, however, is any equivalent of clause 11.1, or 10.1 as it was in the 2011 and 2014 agreements.  Rather, what you have is you've got an equivalent, if you like, of clause 6, albeit it differently worded and then you have a number of allowances that are set out.  But you have no express provision that says, "the allowances during the term of this agreement are X, Y and X", or, more accurately, those in Schedule A.


The next instrument that the UWU rely upon is the 2006 WIA, and that appears at appeal book page 110.  Then you'll see there that, consistent with the time that this agreement was made, there is no clause 6, and that appears at page 112.  But, again - and, again, there are allowances and they're at clause 23, which is at page 133, but, again, there is no equivalent of clause 11.  So, in our submission, nothing in either of those instruments, with respect, informs the effect of clause 11 and what it should be said to result in.


DEPUTY PRESIDENT CLANCY:  Just a moment, have we got Mr Pefanis on the line still?


MR O'GRADY:  Do you want me to continue, Deputy President, or do you want - - -


DEPUTY PRESIDENT CLANCY:  Just wait a moment and see what's happened to Mr Pefanis.


Mr Pefanis, are you on the line?  Mr Pefanis, are you on the line, please?


We'll just adjourn, briefly, while we get Mr Pefanis back on the line.

SHORT ADJOURNMENT                                                                   [11.48 AM]

RESUMED                                                                                             [11.55 AM]


DEPUTY PRESIDENT CLANCY:  Thank you.  Mr Pefanis, was there a point at which you might have recalled dropping out?


MR PEFANIS:  My friend was addressing the Bench on what I think he perceived to be the United Workers' Union argument about the temporal limit placed on the allowances and the interaction with section 54 of the Act.  Other than that, I can't - - -


DEPUTY PRESIDENT CLANCY:  So you didn't hear his submissions, in relation to the 2003 agreement and the 2006 agreement upon which the union seeks to rely, is that - - -


MR PEFANIS:  No.  That's correct, I didn't hear his submissions on the terms of those agreements.




MR O'GRADY:  Yes, thank you, Deputy President.


The position, in respect of the agreements that the UWU seeks to rely upon really boils down to this proposition.  Neither of them had in place an equivalent of clause 11.1.  In those circumstances, we submit they shed no light on what was the proper construction of clause 11.1.


The 2003 agreement is at appeal book page 161 and it does have a provision, in respect of the corporation, although it's differently worded from clause 6, and it does have provision for allowances which appears at clause 22, but those allowances are, in effect, included in the body of the agreement and, we would submit, raise a different constructual issue to the issue that is before the Full Bench in this case, namely, what is a proper force and effect of clause 11.1(a).


There's nothing in this agreement, as we understand it, that, in effect, says, "This is where you go to, to find out what are the allowances during the term of this agreement".  That, of course, is what we say clause 11.1(a) does.


In respect of the 2006 agreement, that's at page 110.  That, of course, doesn't have a clause 6, for the reasons that the UWU have explained in their submissions.  But, again - and, again, it does have a provision, in respect of allowances, in clause 23, but there is no equivalent to clause 11.1.  There's nothing in the agreement that says, "This is where you go to in order to determine what the allowances are".


So, for those reasons, we say that the history referred to, in respect of those agreements, doesn't assist.  They're in a different form to the agreements that we have sought to rely upon, in respect of our submissions.


The last point I was going to make is to simply try and answer the question that you raised, Wilson C, regarding the disturbance allowance.  There doesn't appear to be an allowance titled a disturbance allowance, in either the Food and Beverage Award or the Manufacturing Award, but there are call back allowances.


As we understand the position, that's, in effect, the function of the disturbance allowance, that you are being disturbed and you are being called back.  So the call back allowance, in the Food and Beverage Award, and there's a copy of the Food and Beverage Award in the court book, is dealt with in clause 33.4.  That's at page 65 of the court book.  There's also a call back allowance, in respect of the Manufacturing Award, which is clause 40.5, which is at page 511 of Part A of our authorities.


We would submit, perhaps consistently with where you were thinking, Commissioner, that to the extent to which the parties have taken an allowance that otherwise could be found within the awards, and put an equivalent allowance into Schedule A, we would submit that that's consistent with our primary position, which is that Schedule A is where the allowances you get while the agreement is in operation reside.  Otherwise, one would have thought there would not be a need to do that.


Unless there are any questions from the Full Bench, those are the submissions put in support of the appeal.


DEPUTY PRESIDENT CLANCY:  Thank you.  We'll take a 15 minute adjournment now before we hear the submissions from Mr Pefanis.


Mr Pefanis, in the meantime, it would be our preference if we can get you back on camera for the delivering of those submissions.  So if you could have a look at your technology at your end, during the 15 minute adjournment please.


MR PEFANIS:  Yes, I will, thank you.



SHORT ADJOURNMENT                                                                   [12.01 PM]

RESUMED                                                                                              [12.19 PM]


DEPUTY PRESIDENT CLANCY:  Thank you.  Mr Pefanis?


MR PEFANIS:  Thank you, Deputy President.


There's a couple of preliminary matters to get out of the way.  First was the issue of permission to appeal.  I sent an email to your associate, Deputy President, yesterday evening which I think made clear, hopefully, our position in respect of permission to appeal and that is that we don't challenge the position referred to in my email, that is, the correctness of those decisions.  We don't say that they're clearly wrong and therefore, assuming the Bench adopts those positions, the paragraphs of those decisions, then permission to appeal is likely not required, by (indistinct) the resolution clause.




MR PEFANIS:  I agree with the appellant that the correctness standard applies here.  We're not talking about, obviously, a discretionary decision so, in that sense, we agree that it's really up to the Bench to decide whether the Deputy President adopted the correct construction of the clause or clauses in question.  If the Bench doesn't consider that the correct approach is adopted then it has to substitute its own construction, so we agree in that sense.


So jumping into then the first issue as to (indistinct) construction and then I'll address, as my friend did, the issues surrounding a common understanding or common assumption that might be said to have arisen.


So the starting point, obviously, is - well, there are two sub points, the first sub point is clause 11.1(a).  We accept that, in its own terms and (indistinct) so there is no ambiguity in the actual wording of clause 11.1(a).  Sorry, I place a caveat on that (indistinct).  Potentially it is like other matters, a dispute as to its purpose, but I'll get to that in a second.


Then we have clause 6, which is the awarding corporation clause.  We say that, on its terms, is also clear.  There's no ambiguity in the wording of clause 6 and we don't understand that the appellant suggests that there is any ambiguity (indistinct).


The ambiguity arises, obviously, only when you try to understand the interaction between the two clauses.  So clause 6 is basically an (indistinct) clause.  I referred to it in the outline of submissions as effectively a savings provision.  So what it is attempting to do is preserve the entitlements to (indistinct) award and incorporate them wholly into the agreement then it deals with inconsistency.  I say that where an incorporated clause is inconsistent with a term of the agreement, the term of the agreement applies.  So I think that is all agreed.


I say, at this point, as well, that the principles regarding construction, as my learned friend suggested, are - they are correct, it's just (indistinct) of emphasis and applying those principle constructions.


(Indistinct) clause 6.  If I can just as the Bench to indulge me and imagine what the agreement looks like, by virtue of clause 6.  So you have the entire agreement (indistinct) and then, effectively, at the end of that agreement, you then have, appended to that agreement, the entirety of the award, as it is amended from time to time.  The award clauses - every award clause is incorporated into the agreement, by virtue clause 6.


The award clauses effectively sit there and they operate as terms of the agreement.  It's only when there's a question of inconsistency do you then need to compare what might be - the terms that might be contained in the appendix to the agreement, which is the award, to a term in the agreement above, to determine whether it's inconsistent or not.


So if I can give the Bench the example of (indistinct) which applies - a clause of the award, a term of the award, which applies, in whole, as a term of the agreement, by virtue of clause 6.  So if you turn to page 46 of the court book, it is clause 19.4, job search entitlement.  The job search entitlement which applies in circumstances of redundancy.  It provides that:


In circumstances of redundancy an employee giving notice of termination must be allowed to one days' time off, without loss of pay, during each week of notice, for the purpose of seeking other employment.


Now, I couldn't find any such entitlement in the Rice Growers' Agreement.  I'm happy to be corrected.  (Indistinct) notice given and (indistinct) I may be corrected.  But I couldn't find a term in the agreement proper which applies to that circumstance.


So there we have a (indistinct).  As I say, since there (indistinct).


(Audio breaking up) but it's easy to see the difficulty for an employee in knowing that this particular clause applies to them because when they look at the agreement it's not there.  They then go to the award and find this entitlement (indistinct) to any similar entitlement which might be in the agreement and (indistinct) inconsistency.  I'm perhaps jumping ahead to (indistinct) construction.  This is how the agreement (indistinct).  It's how it looks.  It's how it operates.


So then clause - so you have all the award allowances simply sit there at the back of the agreement, operating as terms of the agreement.  Then you have clause 11.1(a) and we (indistinct) clause 11.1(a) says that:


Wage rates and allowances, during the term of this agreement are set out in (indistinct).


However, as what's discussed before, there is actually another allowance at clause 15.2 and that's the disturbance allowance.


Now, my learned friend did point out that this is related to the call back in the award.  But if you turn to page 65 of the court book this is the (indistinct).  So this is not a section of the award dealing with the allowances.  It is not an allowance, as such.  It sets out the circumstances in which an employee recalled to work overtime after leaving the enterprise must be paid.  So in terms of (indistinct) in and of themselves.


There's no such disturbance allowance in this call back provision.  The disturbance allowance is something (indistinct) for the purposes of this (indistinct).  So to read what the disturbance actually is, it's where an employee is able to solve the problem over the phone and no actual call back occurs.  That's the disturbance allowance (indistinct).


So it's not - it's where a call back is not required, and it's not dealt with in the award.  It's a new allowance that's created for the purposes of this agreement.


So from the beginning, there is another allowance in the agreement that's not contained in clause 11.1(a).  So 11.1(a), if it's to be read as the only allowances which is effectively what the appellant seeks (indistinct).  That doesn't make sense in light of clause 15.2 (indistinct) disturbance allowance (indistinct).


The point about the word "only" I think is important.  It would have been very easy and we all understand the precedents relating to construction of (indistinct) in the sense of setting out that the agreement drafters are not expert draftsmen, they're not necessarily lawyers, all that is clear, (indistinct) into clause 11.1(a).  That wasn't done and, in fact, clause 15.2 contains another allowance as well, that's not contained in the schedule.


So in light of those facts then you have all the (indistinct) allowances, which sit as terms of the agreement, sit at the end of the agreement in this appended award.  We would submit that it is not - there is no inconsistency in the way it is used in clause 6, (indistinct) used in clause 6.


So clause 6, you'll recall, says that:


If an incorporated award term is inconsistent with an express term in this agreement, the express term in the agreement prevails.


But if you have all these award allowances sitting at the end of the agreement, as terms of the agreement, and we would submit it's not - so if, for example, you go to page 51 of the (indistinct), just to use an example, first aid allowance.


So we would submit that there's nothing inconsistent about clause 11.1(a) (indistinct) Schedule A.  There's no inconsistency between those clauses and then the first aid ones.  The first aid allowance is just simply not within the schedule.


So at 11.1(a) it's already clear that it doesn't contain all the - Schedule A doesn't contain all the allowances, because there's a new disturbance allowance, as contained in 15.2.


We submit that the Deputy President was correct in assessing that (indistinct) with any of the work practices.  So where there is an award allowance, which is dealt with in Schedule A there is an inconsistency.  As such, the allowance in Schedule A is (indistinct), so the (indistinct) allowance, for example.


There is nothing in there (indistinct) inconsistent between 11.1(a) and Schedule A and then, on the one hand, and the award allowances contained - now appended at the back of the agreement (indistinct) clause 6.


So the appellant suggests that there's a couple of words in clause 11.1(a) that mean - that effectively (indistinct).  They say that the word "but" is such a word and "for the life of the agreement".


So, in our submission, firstly, we would say that the principles in Project Blue Sky are not particularly applicable in this circumstance.  Firstly, obviously, Project Blue Sky is a decision dealing with legislation rather than enterprise agreements and there are different principles and those principles have been articulated by the High Court, in respect of (indistinct) construction of enterprise agreement and (indistinct) and those are different to the Project Blue Sky principles.


So while there might be some (indistinct) Project Blue Sky principles, (indistinct) that the drafters are not expert draftsmen (indistinct).


Secondly, that in respect of Project Blue Sky suggesting that one should strive for harmony between various provisions of legislation, that's (indistinct) applicant here.  Clause 6 simply incorporates, holus bolus, the award into the agreement and then expressly contemplates inconsistencies which might arise because of that incorporation.


So you don't start from the premise of searching for harmony between - necessarily between the award, which has been wholly incorporated, and the terms of the agreement.  Rather, clause 6 tells you, you incorporate it and if there is (indistinct) it contemplates that there could be inconsistencies and if there is (indistinct).  It's a very different circumstance from the Project Blue Sky approach.


That sort of also - there was a point, and my friend did obviously address 15.2 later on in his submissions, but there was a point, early on, where he said, "There is no scope or room for other wage rates or allowances in the agreement".


We would submit that that's not correct because, firstly, 15.2, there is another allowance that's not contemplated in Schedule A and, secondly, because of the way in which clause 6 operates, that you are incorporating the whole of the award and then down the track you might find inconsistencies, because it is a savings provision.


Obviously there are a very number of reasons why, and I don't know the reasons, but there are a number of reasons, obviously, why parties might incorporate the entirety of the award.  It obviously does, we submit, create potential difficulties down the track, but the reasons why you might include it, from the union's perspective, it creates a nice safety net (indistinct) the parties haven't contemplated (indistinct) considered a term of the award in constructing the agreement, well by virtue clause 6 its comforting to know that (indistinct) anyway it's incorporated.  So there's no (indistinct) there.


It also is, obviously, useful from both a union and employer's perspective for passing the BOOT test.  So obviously if the parties and the employer can point to, "Well, we've incorporated every term of the award anyway", it helps with any BOOT concerns with might arise.


So the example that I gave earlier, the redundancy job search entitlement, the terms of the agreement don't provide for it, but that's - the Commission is not to worry in applying the BOOT because, by virtue of clause 6, it applies anyway.


So just on the point of a single construction and I guess, as we say, it's more of a consideration of the interaction between clause 6 and clause 11.1(a), rather than construction, but just using the term "construction", on a simple construction, we say that the agreement does not preclude those award allowances and the Deputy President  was correct in (indistinct).


So then there was the issue of the words, "and for the life of the agreement".  (Indistinct) the words, "for the life of the agreement", have the effect, I guess, in a sense, creating inconsistency between clause 11.1(a), Schedule A and the award allowances.  So I think the - I appreciate that the union's position was not necessarily clear on this, in our submissions and I just wanted to correct a couple of what were the perceived arguments, in relation to the words, "for the life of the agreement".


We don't suggest that the word "for the life of the agreement" place a temporal event on (indistinct) Schedule A.  So we understand that, by virtue of (indistinct), continues to apply beyond its expiry.  The allowances in Schedule A continue to apply (indistinct) of its expiry.  So there's no issue there.  We don't suggest otherwise.


What we do say about the words, "For the life of the agreement" is that what those words (indistinct) (Audio braking up).


The (indistinct) allowances referred to in Schedule A are sort of like the (indistinct), these are the amounts and rates which will apply, in the sense that on 1 May 2017 these will be the rates that apply.  Then on 1 May 2018 these are the rates that apply.  When you have words, it's obviously common in enterprise agreements to use, "For the life of the agreement", because what you're telling the employee reader is that, "I can expect these pay rises and these (indistinct) for the life of the agreement.  Thereafter I can't (indistinct) increase in allowances obviously because other employees will understand that, at that point, the agreement is to be renegotiated and they have to come up with a new agreement as to where and how much they will be paid.


That is distinguishable from certain agreements which contain terms such as the - well, there might be some agreements which set out a particular pay rate and that's judged against the applicable award, as at the time the agreement is approved, for the purpose of the BOOT test, and thereafter, even if it's not applied, if the agreement (indistinct) (audio breaking up).


Then you might have other agreements which provide that every year the (indistinct) incentive rate increase, as determined in the minimum wage rate case by the Fair Work Commission.  So that could continue to apply after expiry (indistinct).


This case the words, "For the life of the agreement" are simply referring to - they refer the reader to - this is what I expect - "These are the pay rates I expect".  We say that it's not (indistinct) allowance, which are payable because, as we've seen already, there's another allowance in 15.2, which is not contained in Schedule A which, if you read 11.1(a) as limiting the allowances which apply, then 15.2 should be out.  (Indistinct).


So with the example I gave you, the first aid allowance, well, it applies but there's a different methodology in determining the rate of pay.  The rate of pay is equal to that allowance and so it's not limited to a temporal element (indistinct) allowances in Schedule A, increased by 1.5 per cent for each year of the agreement, then they stop (indistinct).  (Indistinct) allowance, obviously.


We'd say that the words, "For the life of the agreement", in clause 11.1(a) is consistent with those words in Schedule A itself.  So if I can take you to page 407 of the appeal book, which is Schedule A in the relevant agreement?  After the heading "SunRice (indistinct)", it says:


For the life of the agreement the table below summarise the rates of pay and allowance increases.


That is the way in which it is used.


Then if you turn over to "Portal rate":


The allowances are found to be increased by 1.5 per cent for each year of the agreement, with the exception of the variation period from 1 May until 31 July 2021.


So that's giving the reader a clear indication, the employee that's reading this, "These allowances in Schedule A, I know I can bank on 1.5 per cent increase on those allowances for each year of the agreement", and that means after the nominal expiry and thereafter, in effect, it becomes a zombie agreement, I don't get any further increases the agreement has to be (indistinct).


So that's what we say about those words.


So if I can turn then to the issue of common understanding versus common inadvertence.  We say this is really the issue.


So if we start at Berri (indistinct) page 267 of the appellant's authorities, dealing with the principles of Berri here.  So if we start at principle 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 <em>objective </em>facts is to be distinguished from evidence of the <em>subjective </em>intentions of the parties.


If we turn to principle 12, that is broken up to three subparagraphs.  So the evidence of the objective background facts would 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.


That Roman numeral three is also in the authorities referred to as the common understanding of the parties (indistinct)


There is a difference between, obviously, the objective background facts which are evidenced in prior negotiations and evidence of matters in common contemplation and common understanding.  So where a party - so there's a difference between - there is a step between establishing that there are common enough known facts and facts relating to negotiations, there's a difference and a stretch between that and then establishing a common understanding between the parties.


Deputy President, you raised before the issue of Gray J's decisions being essentially - I'm not trying to paraphrase you here, but being of a different type relating to different legislative background or the parties to the awards are (indistinct) the unions and the employers.


This was addressed in the decision of the Ballarat Health Services Union, sorry, I'm just finding it.  It's starting at page 731 of the appellant's authorities, and paragraph 79.  This passage was referred to in Berri, and this dealt with - so obviously this is a decision of 2011, dealing with the Fair Work Act.  So Gray J addresses this issue - he says:


The second need for care arises in the context of the manner in which industrial instruments are now created.  In the days when an award might be negotiated between a union and an employer, and made by consent, the existence of a common understanding between the union and the employer as to the meaning of terms might have had some role to play in their construction.  Whatever were the terms of such an agreement, and whatever was their meaning, those terms were imposed upon the employees.


Then he goes on:


In the current era, most industrial instruments are required to be put to a vote of the employees whose work will be covered by them, before they can be certified or approved so as to become enforceable by statute.  The union and the employer who negotiated the terms might have had a common understanding of the meaning of them, but that understanding might not have been shared by all or some of the employees who voted for the operation of the agreement.  They may have been entirely ignorant of the common understanding.  In those circumstances, the occasions on which it can be said that a party to an agreement who entered into it on a common understanding should not be allowed to resile from that understanding will be rarer than they have been in the past.


That was a caution to not easily find a common understanding between the parties.


DEPUTY PRESIDENT CLANCY:  But the nature of the party has changed.


MR PEFANIS:  That's correct.  Now the parties are the employees and the employer.


DEPUTY PRESIDENT CLANCY:  The proposition would be if it was explained to the parties, or if something was presented to the parties, as part of the approval process, or you look at that on its terms.  You don't have to be, prima facie, cautious.  It's just that the identity of the parties have changed.  Was his Honour referring to that, or was he referring to parties, as in parties were traditionally - - -


MR PEFANIS:  In this case he was referring to parties, as in the employees and the employer.  But I agree with what you say, Deputy President, except that we would say that, as I said before, there's a difference between - so we accept that the documents which the appellant and is part of his statement, were given to the employees, in the course of the (indistinct) and the manner that (indistinct) with those in the decision (indistinct) recognised that the documents were relied on by Rice Growers (indistinct) there was those factors, those documents, (indistinct) clearly state that those are the only allowances which apply and which are available to the employees.


We (indistinct) come to the conclusion that there was (indistinct).  So we accept that the things that were said were said (indistinct) in those documents, but those documents do not make clear that they are - those documents are background facts, which can be considered.  But then to go from those background facts to then say that there was a common understanding is still a step that the Bench should be cautious of, if you like, of Gray J's decision in 2011.  Those events will give the (indistinct) which you can find a common understanding between the employees and the employer.


This goes to what we say is the background of the legislative changes and also the nature of what we're dealing with here.  So in terms of what we're dealing with here, we're dealing with a - we're dealing with a complicated interaction between an awarding corporation clause, a savings provision and a clause in the agreement.


So to the extent that my learned friend suggested before that the matters that Gray J was dealing with were not matters that would come to the front of mind of the parties, the employees and the employer.  Well, that's applicable here, in the sense that, as I described it in our outline of submissions, and as described in my submissions to you just now, to really understand and appreciate the effect of clause 6, you have to, essentially, append the entire award to the end of this agreement and then you have to look at the terms of that award and then when you find the relevant term you then have to seek if there's a term dealing with it in the agreement.  You establish if there's any consistency.


So to suggest that, and this is what the Deputy President found, in the first instance, that while those documents were put to the employees, they did not clearly say that those (indistinct) allowances payable and, in fact, those clause and effect documents don't refer to disturbance allowance.  So there is another allowance, again, which is applicable, which is not referred to in the slides or the clause and effect.


So there's was a common understanding that there - there is a common (indistinct) and that those documents were put to the employees, but that does not then reach the threshold - we would submit that that doesn't allow the Bench to reach the threshold of determining that there was a common understanding (indistinct) that all allowance weren't in fact payable.


So we say, in and of themselves, those documents don't - they don't refer to the disturbance allowance, and then they don't make clear, and the Deputy President found, that the award allowances aren't payable.  So it's then, while there is a background fact that has been established that everyone acknowledges that those award allowances weren't paid, that is different to there being a common understanding.  We say this is a case of common inadvertence.  It's not a case of common understanding.


DEPUTY PRESIDENT CLANCY:  Do you say the wording of clause 11.1(a) is ambiguous or clear on its terms?


MR PEFANIS:  Well, we would say it's clear on its terms.


DEPUTY PRESIDENT CLANCY:  All right, what does it mean?


MR PEFANIS:  Are you saying without (indistinct), just on its own terms?




MR PEFANIS:  If you didn't look at clause 6, we would say that clause 11.1(a) means that the allowances and the wage rates for the employees, for the life of the agreement, as I described that before, is that (indistinct) an increase (indistinct) over the next years, are contained in Schedule A.  So we don't see there being, in and of itself, in clause 11.1(a), we don't think that - - -


DEPUTY PRESIDENT CLANCY:  But you say, on its terms, it is ambiguous because you've got to read it with clause 6 and clause 15.


MR PEFANIS:  Well, yes.  When you (indistinct) read it, not on its terms but in light of other clauses of the agreement - - -


DEPUTY PRESIDENT CLANCY:  No, but the proposition you put is, 11.1(a) is not unambiguous because it makes no sense you have to read it with clause 6 and clause 15.2.  That's your case, isn't it?






MR PEFANIS:  Yes, you've got to read it with the other clauses (indistinct).


DEPUTY PRESIDENT CLANCY:  Okay.  It's ambiguous.


MR PEFANIS:  It's ambiguous in that sense.  Sorry.  When I say, "on its terms" I mean just if you took that out of the agreement and you just had, say, clause 11 and you had just Schedule A, in the ordinary words are unclear in that sense.  That's what I was trying to get at.  But (indistinct) apply it to - apply it in the (indistinct) clause 6.


So really then we say that it's either a case of there being a common understanding or a common inadvertence.  In our submission this has common inadvertence.  I mean, for the union's part, the awarding corporation clause was not - the objective of it was not considered.  I can't speak for the (indistinct), it is highly likely that common inadvertence, on the part of the employees when you (indistinct) complication of 6 and what that actually means and how you are (indistinct) of the award is written as a term of the agreement, but it's not actually there in writing.  It's actually (indistinct) of the award to go through it and we wouldn't expect - - -


DEPUTY PRESIDENT CLANCY:  It's not particularly satisfactory, is it, as a working document.


MR PEFANIS:  No, it's not.


DEPUTY PRESIDENT CLANCY:  Yet, here we are, you and the company sign up to this agreement after agreement and then say the poor old employees have to read this and read that.  Why don't you fix it when you're negotiating?  It's equally applicable to the company.  I'm not sheeting that home purely to the union, I say it to the company as well, here we go again.


MR PEFANIS:  I'd agree with that, Deputy President.  It wouldn't be my preferred formulation.  Certainly it invites, it almost expressly invite ambiguity because it's contemplating inconsistencies and it requires the employees to go and find the award.


I'm not suggesting that the employer has to provide the award, but there is a level of difficulty working out what clauses actually a result of (indistinct).


Certainly, from the union's perspective, clause 6 wasn't properly thought through, what effect it would be, until some bright spark realised that allowances should be paid.  The award allowances should be paid.  That's where this dispute arose.  There wasn't some - I think you asked the question before, was there some sort of event, to my understanding there wasn't.


DEPUTY PRESIDENT CLANCY:  Kudos to the bright spark, whoever you are.


MR PEFANIS:  It wasn't me.


The reason why I set out the legislative background as well, in accordance with the principle enunciated by the High Court, in Amcor, is because I think that legislative background further clarifies, in our submission, that this is a case of common inadvertence.  So it is true what my learned friend says, in terms of the 2003 and 2006 agreements, that they didn't have a clause which was similar to clause 11.1(a).  But that is obvious with the way in which the legislation operated at the time.  So, as I've set out in the submissions, when dealing with the 2003 agreement that was where the Workplace Relations Act applied so once (indistinct) while a certified agreement is in operation it prevails over the award, to the extent of inconsistency with the award.  That is consistent with (indistinct) and that (indistinct) certified agreements and the award to operate side by side.


So while clause 22 of that agreement dealt with certain allowances, because the award at the time, or any number of the awards, they're all referred to in the agreement, they all operated side by side with the agreement as well, so that the - legally the allowances would have been picked up.


Then when the 2006 agreement was made, the Workplace Relations Act, as I said the new section 349 provided in that award, has no effect in relation to the employee, while a workplace agreement operates.  So that award was completely excluded while the agreement was in place, by virtue of the WorkChoices legislation.  So that is consistent then with the approach of that agreement, but you have the employees can't be taken to have understood what is necessarily going on with these legislative changes.  Then, as I explained, when the Fair Work Act comes in, 257 of the Act enables the parties to incorporate other documents into their agreements.  For whatever reason, the parties, I don't know the reason, the parties agreed to operate and uphold every single term of the award, as amended from time to time, into the agreement.


That is a fairly radical departure so, as I say in the submissions, terms which the day before didn't apply because the parties were operating under a transitional agreement, which was made during WorkChoices, suddenly when the 2011 agreement comes into operation, by virtue of clause 6, you have clauses that are picked up from the award which suddenly apply to the employees, which didn't apply the day before.  So, for example, that transitional - the job search entitlement in circumstances of redundancy, which is different the job search entitlement which is contained in the agreement, which doesn't need redundancy.


In the award there are two job search entitlements, just to clarify that.  In the award there are two job search entitlements.  One deals with just a termination and the other deals with a termination due to circumstances of redundancy.  So the agreement contains job search entitlement clause related to just (indistinct) contained one when dealing with redundancy.  This is just an example of a clause I think we found that is contained within the award which applies as a term of the agreement now.


So in all of that changing legislative background goes, in our submission, to the difficulty that employees would have, well the union definitely has, is understanding what is a provision of the award (indistinct).  So, in our submission, that certainly is a case of common inadvertence.


In that respect, just following from my comments about (indistinct) HSU v Ballarat Health, that was obviously a decision due to the Fair Work Act and that's where Gray J dealt with the caution that is required to (indistinct) error there.  You're dealing with the parties to the agreement (indistinct) the employer.


Three's another decision that came out around the same time, it's a decision referred to by the appellant, which is the RTBU v KDR Victoria, trading as Yarra Trams decision.  Sorry, I haven't provided it yet, I'm just going to send it now to the parties and to the associate and expect (indistinct).  My learned friend (indistinct) say something about it.  It's another SDA, Shop Distributors and Allied Employees Association decision against Target Australia.  The medium neutral citation [2021] FCA 1038.  I just sent that now so it should come through soon.  So that's a Federal Court decision dealing with a similar issue and this - the issue in this case was whether, essentially, was about the methodology for determining ordinary applied earnings for periods of leave.


So if I can just refer the Bench to paragraphs - and I note that they're not there yet with you, but paragraphs 156 to 194 of that decision also contains a useful summary, and the heading is "Prior conduct and common intention", and there's a useful summary of the decisions, including - in some detail, including the Gray J decisions.  There's also reference to Short v Hercus.  There's also reference to the decision by Tracey J, but this is just another example of this principle being applied very recently, suggesting that there has to be a high degree of caution in establishing a common understanding between the parties to enterprise agreements, in relation to entitlements of employees.


So unless there are any other questions, or any questions, I don't have anything more to say at this stage.


DEPUTY PRESIDENT CLANCY:  So clause 15.2 has to be grappled with.  If one looks at the history of it, it started as, essentially, being a clause dealing with call back and it would seen that in the 2014 agreement the notion of this disturbance allowance was introduced to the agreement.  Up until that point an obvious inconsistency between the call back provision in the agreement, in the 2011 agreement, and the award would seem to have been the rate at which the call back payment was made.  The award saying the first three hours at time and a half and the agreement the first two hours.


But then, in 2014, one introduced, or one sees introduced the payment component, which is described as the disturbance allowance, which is payable not as a monetary amount, per se, as the other allowances in the agreement are applied but, again, payment of an overtime rate of pay, if the work involved - fits the description, within 15.2, what is now 15.2(c).


So one might apprehend the argument being put, "Well, clause 15.2 is not so much an allowance clause, but a clause dealing with call back".  So I just raise that as a question.  I think you might have alluded to it, but I just thought - - -


MR PEFANIS:  Yes, thank you, Deputy President.  I agree that it could - it certainly seems to have its genesis in the call back provisions of the award but, as I mentioned earlier, the disturbance allowance was not actually - it was created - it is a creation of the agreement.  There is nothing similar in the award.  As you say, there are inconsistencies between the call our provisions, above 15.2, that deal with number of hours (indistinct).  15.2 is a (indistinct) creation and the parties obviously determined they would create a whole new allowance, (indistinct) allowance, and:


Where an employee is able to solve a problem over the phone and no actual call out occurs a disturbance allowance will apply.


While it's genesis might be in the call back provisions, it's not actually (indistinct) where a call back is not required, then this new allowance applies.  There's no similar provision in the award.


DEPUTY PRESIDENT CLANCY:  If you could just indulge me, please?  You asked us to visualise the interaction between the award and the agreement this way, we have to imagine that appended to the back of the agreement are the awards, is that correct?




DEPUTY PRESIDENT CLANCY:  Right.  Do you have anything to say about clause 11.1(c), where it says, "For the avoidance of doubt, Schedules A and B form part of this agreement".  They sit at the back of the agreement.  Do you say that it's not necessary to mention the award there because of clause 6, is that how you grapple with it?


MR PEFANIS:  Sorry, I'm looking at 11.1(c), "For the avoidance of doubt, Schedules A and B form part of this agreement"?


DEPUTY PRESIDENT CLANCY:  Yes.  You're inviting us to say, "Also appended to the agreement, in terms of its effect, are the two awards, in their totality, to the extent they're not inconsistent".


MR PEFANIS:  That's right.  If you imagine the agreement you have Schedule A and B and (indistinct) those schedules form part of the agreement, but 11.1(c) just tries to clarify that if there was any doubt the schedules form part of the agreement as well, that being the wage rates and the classifications,  (indistinct) of the agreement.  Then clause 6 then tells you to incorporate into this agreement, (indistinct), as varied from time to time.


So appended at the back of Schedules A and B is the entire Food Award, essentially, which, by virtue of clause 6, even though where it talks about an inconsistency between the award et cetera, what clause 6 is effectively doing is, as I say, appending the award so that every term of the award applies as a term of the agreement.


A dispute, under the dispute resolution clause, about that, in the Federal Circuit Court we can sue for a breach of an enterprise agreement for a breach of the award (indistinct) in clause 6.


Sorry, I do have just one point to add and it's just in relation to the submission regarding different terminologies of calculation of the allowances.  That is, I think, again, just to be expected where the parties probably don't really properly consider what clause 6 actually does.  Then you have - it is workable, if we can work out what the first (indistinct) should be paid out.  So it doesn't detract from those allowances being paid or the fact that there's a monetary amount in Schedule A and the award allowances you have a rate that's referrable to level 5 of the award.




Mr O'Grady, I'm just trying to work out what we do from here, and estimates can be notoriously out of whack, but if you're replying, how long do you anticipate?


MR O'GRADY:  I would have thought 15, 20 minutes, at the outside, and I may be briefer.  I just want to make some points where I think some things that were said were just not accurate and we just need to clarify it.


DEPUTY PRESIDENT CLANCY:  All right.  What we might do is adjourn until 5 minutes to 2 and we'll come back and hear your reply.


MR O'GRADY:  Yes, thank you.

LUNCHEON ADJOURNMENT                                                            [1.34 PM]

RESUMED                                                                                                [2.00 PM]




MR O'GRADY:  Yes, thank you, Deputy President.


Could I start with the point that my learned friend made about the job seeker entitlement, and you might recall he referred the Full Bench to - - -


MR PEFANIS:  Sorry, I can't hear.


MR O'GRADY:  I'll try again.  Can you hear me now?


MR PEFANIS:  Yes, thank you.


MR O'GRADY:  My learned friend started - well, I'd like to start, in responding to his submissions, by taking you to the job seeker entitlement and my learned friend referred to clause 19.4 of the award, which is at court book page 46.  As I understood it, he said that there was no equivalent entitlement in the enterprise agreement.  I think he initially said there was no job seeker entitlement at all in the enterprise agreement, then I think he modified his position to say that there was no job seeker entitlement, in respect of redundancy, in the enterprise agreement.


Unfortunately, I think he's wrong on both counts.  As we read the agreement there's a job seeker entitlement in clause 27.3, which is appeal book page 438.  That is an entitlement that arises when there is a termination of employment, it's headed, "Job search entitlement", and then if one goes to the next clause, which deals with redundancy, there is a provision for time off, which is for the purposes of seeking employment, in clause 28.7, which is at page 440.


Now, nothing really turns on this, other than the proposition that my learned friend put that there was no equivalent.  It perhaps highlights, in our respectful submission, the need to give clauses, like clause 11.1, full force and effect, so that they can provide clarity as to how the agreement is to operate.


We would say that, in the light of those provisions, it would appear that whatever be the award entitlements, in respect of job search, that they would not be incorporated because there are inconsistent provisions of the enterprise agreement that deal with them.


My learned friend then went to the disturbance allowance and made the point, which we accept, that a disturbance allowance is not included in the Schedule A but, rather, resides in clause 15.2.


However, it's apparent that when one goes to clause 15.2 what is being dealt with is a regime for call back.  When one recalls the history of these provisions, there was, in 2014, when the 2014 agreement was made, an inclusion of a disturbance allowance as part of that regime.


Now, it may well be that it could have been an allowance that was inserted into Schedule A, along with the other allowance.  But, in my respectful submission, the Commission should not place any great weight upon the fact that the drafters of the agreement saw it as appropriately being placed in clause 15, dealing with call back because it is, in effect, part of that regime.


It was, of course, an allowance that was inserted into the agreement well after the words that we find in clause 6 and in, currently, clause 11.1(a) had been adopted by the parties.  In our respectful submission, if one is to assess the effect of clause 15.2 fairly, one would say that this is the infelicity of expression that is traditionally ascribed to the Kucks(?) principles associated with the drafting of these instruments.  It is not, in our respectful submission, a reason for reading down clause 11.1 so as to preclude it from having the effect of indicating that the wide variety of allowances that reside in the awards are to be, prime facie, incorporated into the agreement.


My learned friend also suggested that this was a clause that was introduced without being dealt with in the Change the Clause documents.  With respect, that's not correct and if I could as the Full Bench to go to appeal book page 607, which is the Change the Clause documents, associated with the making of the 2014 agreement, when this clause was introduced?  You'll see that there, dealing with what is clause 14.2, which now, of course, is 15.2, there is, at page 677, in the middle of the page, item 33, reference to the inclusion of the disturbance allowance.  So this was an issue that we say was, consistent with the PowerPoint presentation that I took the Full Bench to this morning, a matter that was dealt with appropriately in the Change the Clause documentation that was associated with the making of the 2014 agreement.


That can be contrasted with, for example, the Change the Clause documentation associated with the 2017 agreement, at appeal book page 612, where the clause now numbered 15.2, dealing with call back, has, at the foot of the "Effect of the changes", the note that, "There has been no change to this subclause".


So when it was changed the employees were notified of that change, back in 2014.  Because there was no change from the 2014 agreement to the 2017 agreement, it wasn't noted as a change at that point in time, because no change was occurring.


DEPUTY PRESIDENT CLANCY:  How does that leave your submission that 11.1 is clear on its terms?


MR O'GRADY:  Well, in my submission, it doesn't impact, in any meaningful way, on that submission, in that what we would say 11.1 is dealing with are, if you like, allowances simplicitas, as opposed to allowances that might be part of some other substantive regime that the agreement puts in place.


In our respectful submission, what the disturbance allowance is, properly characterised, is a part of the call back regime.  It's an augmentation, if you like, of that regime, to, as my learned friend said in his submissions, to actually prevent people from having to be physically called back, even though they are being called back to work, in that they are being asked to perform duties, albeit from their own home.


DEPUTY PRESIDENT CLANCY:  You placed importance on clause 11.1(a) as, "The allowances are set out in Schedule A", and then we have 15.2 sitting there.


MR O'GRADY:  Yes.  I accept that there's a tension between what I put before and the existence of 15.2.  It's a tension that, in my submission, is explicable by two factors, primarily.  Firstly, the fact of the disturbance allowance being part of a broader regime, in respect of call back, which is a matter that is dealt with, in substance, in the body of the agreement and one could easily understand that why, rather than having it plonked into Schedule A, there was a desire to incorporate it within the call back regime in clause 15.


Secondly, the temporal explanation, namely, that these words were adopted prior to the existence of the disturbance allowance and what's happened is when they've come to introduce a disturbance allowance, one assumes nobody has properly said, "Well, we're calling it an allowance, shouldn't it we really be putting it in Schedule A?".  But, in my submission, those issues are easily capable of being accommodated, applying the principles set out by his Honour Madgwick J in Kucks and may other authorities that we've referred to.


But it does lack a precision of a formal contract, but the authorities say that that's the nature of these instruments, from time to time.


DEPUTY PRESIDENT CLANCY:  At first instance it seemed to be the position of the union that it wasn't an allowance and the Deputy President appeared to express the view that he didn't think it was an allowance but it didn't then, ultimately, change his view and interpretation.  So what do you say to that?


MR O'GRADY:  Well, that is readily explicable.  That is, perhaps, what I was trying to get at a moment go, when I was talking about Schedule A being, in effect, allowances that are not part of other substantive provisions.  What I'm trying to describe, but the use of that language, is that here we have a regime, in respect of call back.  There is an amount of money that people who are being called back to work but don't actually have to physically attend, receive for them performing that duty and they have chosen to call it a disturbance allowance.


The substantive point I seek to make, Deputy President, is that, in my submission, it's qualitatively different from the other types of matters that are dealt with in the allowances that are in Schedule A, and I would also say, in respect of or in comparison with the allowances that the union is seeking to import into the agreement via clause 6.


I accept that the agreement could have been expressed better but, in my submission, it would very much be to knock over clause 11.1(a) by a side wind to allow its substantive effect, in respect of the incorporation of award allowances to be disturbed by the presence of clause 15.2.


My learned friend then referred to the first aid allowance and Project Blue Sky and harmony.  The reason why we have referred to Project Blue Sky, in our written submissions, is not that part of the decision that deals with subordinate and dominant terms, and the need to construe various provisions harmoniously, but, rather, that part of the decision that talks about the need to give effect to each and every term of a clause.


In our submission, the construction adopted by the union does not give effect to the word "the", as it appears in clause 11.1(a).  Rather than our construction requiring the reading of words into the agreement, and for the reasons I said this morning, we don't say that's necessary because we say that work is done by the word "the".  The construction contended for by the UWU does, we would submit, require words to be read into the clause because what they're really saying is that the effect of clause 11.1 is that, "The wage rates and some of the allowances", or, "The wage rates and the additional allowances during the term of this agreement are set out in Schedule A".  We would submit there's no warrant for importing those words into the agreement.  Absent doing so, the word "the", in our submission, connotes that the wages you get and the allowances you get, during the term of this agreement, are those that are set out in Schedule A.


DEPUTY PRESIDENT CLANCY:  But isn't the union position that you've got to read 11.1 with clause 6?


MR O'GRADY:  We accept that.  But in our submission, clause 6 has a clear carve out.  Clause 6, whilst as my learned friend said this morning, or this afternoon, does speak in terms of incorporating award terms.  It has a carve out.  It identifies those award terms that will not be incorporated.  Those award terms that will not be incorporated are those award terms that are inconsistent with an express term of the agreement.


In our submission, that's the work that clause 11.1(a) does.  It is an express term that, in effect, says, "The allowances you get during the term of this agreement are those that are set out in Schedule A".


My learned friend also referred to the BOOT test as being a reason why clause 6 was crafted in the terms that it is.  I wasn't - I didn't appear below, but I'm instructed that there was no evidence about the BOOT test and there was no suggestion that the issue for determination in this proceeding would somehow impact upon the ability of the agreement to pass the BOOT test.


My learned friend also made a number of submissions in which he, perhaps understandably, said that the language of clause 11.1(a) was, "For the life of the agreement".  Now, that, of course, isn't the right language, the agreement doesn't speak in terms of - 11.1(a) doesn't speak in terms of "For the life of the agreement", it speaks in terms of, "During the term of this agreement", and I say it's understandable because it would appear that my learned friend was focusing on the commencement words of Schedule A, that deal with rates of pay, which does use the language, "For the life of this agreement", as you can see, at page 447.


The two points we'd seek to make, in respect of that, are, firstly, that's not the language that is used to describe the situation, in respect of allowances.  Clause 2, which deals with allowances, doesn't speak in terms of, "For the life of the agreement".  We would note that clause 11.1(a) deals with both wages and allowances.


If all that the agreement was saying, in 11.1(a), when it uses the phrase, "During the term of this agreement", is that, "This is what you're going to get while this agreement is in operation", well there'd be no need for it to use that phrase, in respect of wages because, as my learned friend pointed out, in effect, that's what's said in the opening words of Schedule A, in respect of wages and the clause is directed to both wages and allowances.


In our submission, the appropriate way of reading the phrase, "During the term of this agreement" are, again to give it their ordinary and natural meaning.  As I said, at the very outset this morning, a sensible reading of the clause, perhaps a more elegant reading of the clause, occurs if you transpose the words, "During the term of this agreement", from where they reside, after the fifth word, to the beginning of the clause, so the clause reads, "During the term of this agreement the wage rates and allowances are set out in Schedule A".


Now, they might have not picked up clause 15.2 but, in my respectful submission, that language connotes that.  You don't get allowances, or wage rates for that matter, that aren't set out in Schedule A.


My learned friend then turned to common understanding and he made reference to the Ballarat Health Services case  In respect of a question I think that you asked him, Clancy DP, he said that, "His Honour Gray J, when he was speaking of the parties, at the foot of paragraph 79, was referring to the employees", as opposed to what might traditionally be seen to be the parties to an industrial agreement, namely, representative organisations and the employer.


In our respectful submission, he's wrong about that.  In our respectful submission, when one has regard to the terms of paragraph 79, it appears clear that what his Honour is referring to is parties in, if you like, the traditional sense, the union and/or the employer.


The last sentence is in these terms:


In those circumstances the occasion on which it can be said that a party to an agreement, who entered it on a common understanding, should not be allowed to resolve from that understanding or be rarer than they have been in the past.


In our submission, that sentence, when read in the context of the paragraph as a whole, suggests that what his Honour was, in effect, saying is, "The old approach, where you had a union organiser and an employer representative and they negotiated an agreement and they had a common understanding and they wanted to bring it into play, that no longer has the same role to play where agreements are actually made by employees and their employer, through the process set out in the Act".  In my submission, he wasn't saying anything about the capacity of the Commission or, indeed, a court to have regard to the material provided to employees, pursuant to section 180(5), in construing an agreement.


I note that when one goes through the Ballarat Health Services case, there doesn't appear to be any discussion about section 180(5).  Rather, it appears to be more concerned with, if you like, traditional negotiations and how it evolved, including a heads of agreement that had been entered into, as the precursor for the movement of the services from government to private.


My learned friend also referred to the decision of SDA v Target, that's a decision of her Honour Banks-Smith J, in the Perth registry.  It is a decision that is subject to appeal and the Full Court of the Federal Court have reserved, in respect of that appeal.  But it's a decision, in my respectful submission, that is quite different from the issues confronting the Commission in this case.


In that case there was no issue of the incorporation of award allowances into the terms of an agreement.  Rather, the issue was what was meant by, dare I say it, the hoary old chestnut, of ordinary time rate of pay.  The issue was whether or not ordinary time rate of pay included penalties for working outside of ordinary hours, or ordinary time rate of pay was based upon what you usually or generally received, including the amount you might have received for working outside of ordinary hours.  In that case there was a term of the enterprise agreement that defined ordinary time rate of pay, albeit for the purposes of superannuation, but in a way that included what one might receive for working outside of ordinary hours, and that was a definition that was ultimately adopted by her Honour.


In our submission, the analysis of her Honour doesn't advance things beyond the position that we've taken the Full Bench to this morning, including the analysis of his Honour Wheelahan J, in the Yarra Trams case.


DEPUTY PRESIDENT CLANCY:  That's the SDA v Target decision you say is on appeal?


MR O'GRADY:  Yes.  The appeal - I argued the appeal, the appeal was argued a couple of months ago but we have no indication as to when it might be handed down.


My learned friend also referred to the 2003 and 2006 agreements.  Without repeating myself, the point we would make is there, there was no clause 11 and those agreements, in our respectful submission, can be contrasted with the agreements that we've sought to rely upon, where you have sought to rely upon, where you have identical terms, in respect of clause 6 and clause 11.1 or 10.1, as it might be, that have been applied over a number of iterations of the agreement.  In our submission, for the reasons that I put this morning, those are a surer guide to what the parties should be taken to have intended when they made the 2017 agreement, as varied.


Unless there are any issues that arise, those are the submissions in reply.


DEPUTY PRESIDENT CLANCY:  I've got a question, and both parties can engage with it.  This agreement is being replaced by a new agreement, which commenced on 22 July.  Clause 13.2 of that agreement, dealing with allowances, says:


The only allowances which an employee will be entitled to receive, during the term of this agreement, are set out in Schedule A.


So I don't suppose that impacts on the task before us.  Is there any comment you wish to make about that?


MR O'GRADY:  The only two comments I would seek to make are, firstly, as I understand it, those words were put in to avoid a repetition of the problem that this case presents, in that, as I understand it, my client has proceeded on the basis that there was no entitlement to other allowances, other than those set out in Schedule A, when it was being contended that there might be.  They said  "Well, (a), we don't think you're right but (b) we want to put it beyond doubt".


We would say that what was put into that clause, which is, of course, subsequent to the making of the 2017 agreement that you're considering here, can't sensibly inform what is the proper construction of that agreement because it obviously goes to what parties were intending - well, it wasn't a circumstance that was in existence when the 2017 agreement, as varied, was made.


The other point I seek to make is that, for the reasons that I raised with Wilson C, before lunch, that, of course, doesn't mean that there isn't utility and/or importance in respect of this appeal, because it may be said, against my client, that, at least in respect of allowances that might - that, if the award was incorporated and the allowances from the award were incorporated, that might have been payable but weren't paid, that there is some capacity to argue that we are somehow precluded from arguing that the better view of the agreement is that clause 11.1(a) has the effect that I've been contending before the Full Bench, because we might be said to be bound by the decision of the Deputy President, as a private arbiter, in respect of that issue.


MR PEFANIS:  Just on that point, Deputy President, sorry, is there anything further, I can't see?


DEPUTY PRESIDENT CLANCY:  No, that was likely my supplementary question on that, to Mr O'Grady.  I'll come to you in a moment, Mr Pefanis.




DEPUTY PRESIDENT CLANCY:  There's no issue around the further conduct of this proceeding, by virtue of the operation of the new agreement?


MR O'GRADY:  Not as we understand it, no.  As we understand it, there was, in effect, an instant proceeding and the Commission was empowered to resolve that and that empowerment included a right of appeal.  So we would say that the Commission has jurisdiction to determine the appeal.




Yes, Mr Pefanis, any comments you wish to make on the question of clause 13.2 and the utility aspect?


MR PEFANIS:  Yes.  So I think obviously my argument has been that we are going to - the critical word that was missing in the previous (indistinct), but I add to that the inclusion of that word, by the parties, in this new agreement, should not - is not evidence on which the Bench should lie, in terms of interpretative premise (indistinct).


DEPUTY PRESIDENT CLANCY:  While I've got you, is there any significance we should place on the way in which your colleague treated clause 15.2, at first instance?


MR PEFANIS:  I would submit that - I appreciate that that was the submission made at first instance, but it didn't bare on the decision, ultimately, and as the (indistinct) applies now, the Bench has to consider the proper construction and, in my submission, if that disturbance allowance is, in fact, an allowance, notwithstanding the fact that it derived from - its genesis was in the call back provisions of the award, it is a new creation that has been called an allowance.




All right, thank you.  I thank the parties for their assistance with the material filed before the hearing and their submissions today.  The Full Bench will reserve its decision and issue it, in writing, in due course.  We'll now adjourn the Commission.  Thank you.

ADJOURNED INDEFINITELY                                                            [2.29 PM]