2023 WAIRC 00958
INDUSTRIAL MAGISTRATES COURT OF WESTERN AUSTRALIA


CITATION : 2023 WAIRC 00958

CORAM : INDUSTRIAL MAGISTRATE E. O'DONNELL

HEARD : WEDNESDAY, 5 APRIL 2023

DELIVERED : THURSDAY, 14 DECEMBER 2023

FILE NO. : M 74 OF 2022
BETWEEN : AUSTRALIAN MUNICIPAL, ADMINISTRATIVE, CLERICAL AND SERVICES UNION
CLAIMANT
AND
CITY OF ALBANY
FIRST RESPONDENT
ANDREW SHARPE
SECOND RESPONDENT

CatchWords : INDUSTRIAL LAW – Failure of employer to include details in payslips contrary to Fair Work Act s 536 – contravention admitted by employer – Fair Work Act – Failure of employer to initiate discussions for new enterprise agreement within timeframe set by industrial agreement – Payments applicable to employees until agreement replaced or terminated – Interpretation of industrial agreement – Ambiguity or uncertainty of clause – Meaning of ‘preceding year’ – Meaning of ‘Consumer Price Index (CPI) Perth’ – Determining common intention of parties – Objective facts – Evidence of surrounding circumstances to aid interpretation
Legislation : Fair Work Act 2009 (Cth)
Fair Work Regulations 2009 (Cth)
Instrument : City of Albany Enterprise Agreement 2019 [2019] FWCA 7100; [2020] FWCA 3663
City of Albany Employees Collective Enterprise Agreement 2013 [2014] FWCA 2503
City of Albany (General Workers) Enterprise Agreement 2011 [2012] FWAA 5652
City of Albany Collective Enterprise Agreement 2016 [2017] FWCA 42
Case(s) referred
to in reasons: : Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union’ known as the Australian Manufacturing Workers Union (AMWU) v Berri Pty Limited [2017] FWCFB 3005
Bradnam’s Windows & Doors Pty Ltd [2019] FWCA 979
National Union of Workers v CHEP Australia Limited [2018] FWC 3797
Kucks v CSR Limited (1996) 66 IR 182
Result : The claim of contravention of Fair Work Act s 536 is proven.
The claim of contravention of Fair Work Act s 50 is dismissed.
Representation:
Claimant : Mr C Fogliani (of counsel) and Mr M Bronleigh (of counsel) as instructed by the Australian Municipal, Administrative, Clerical and Services Union
Respondents : Mr C M Beetham (of counsel) as instructed by Kennedys
_______________________________________________________________________________
REASONS FOR DECISION
Introduction
1 The Australian Municipal, Administrative, Clerical and Services Union (the Union) brings this claim on behalf of six employees (the employees) of the City of Albany (the City).
2 The Union claims that the City has contravened the following provisions of the Fair Work Act 2009 (Cth) (FWA):
a. Section 536, by failing to include certain details in payslips issued to the employees on or about 28 June 2022, 12 July 2022, and 26 July 2022 (the pay slip claim); and
b. Section 50, by contravening a term of the City of Albany Enterprise Agreement 2019 (the 2019 Agreement), which applied to the employees at the relevant time (the CPI claim).
3 The Union additionally claims that the second respondent, the City’s Chief Executive Officer Mr Andrew Sharpe, was involved in the alleged contravention of FWA s 50 and may therefore be taken to have contravened that provision himself (see FWA s 550).
4 It is not in dispute that at the relevant time, the City was a national system employer, and that the 2019 Agreement was an enterprise agreement approved pursuant to s 185 of the FWA.
5 It follows that any contravention of the 2019 Agreement would constitute a contravention of s 50 of the FWA, and that the terms of s 536 were also applicable to the City.
6 For the reasons that follow:
a. The pay slip claim is allowed.
b. The CPI claim is dismissed.
I The payslip claim
7 Pursuant to s 536(1) of the FWA, the City was required to give a pay slip to each of its employees within one working day of paying an amount to the employee in relation to the performance of work.
8 Pursuant to s 536(2) of the FWA, the pay slips were required to include any information prescribed by the Fair Work Regulations 2009 (Cth) (FWR).
9 FWR reg 3.46 prescribes the information to be included in pay slips. That information includes:
a. The date on which the payment to which the pay slip relates was made (reg 3.46(1)(d)); and
b. On and after 1 January 2010 – the Australian Business Number (if any) of the employer (reg 3.46(1)(h)).
10 The City admits that the pay slips given to the employees on or about 28 June 2022, 12 July 2022, and 26 July 2022 did not include the information required by regs 3.46(1)(d) and 3.46(1)(h). Respondents’ Amended Response, [21] - [25].

11 In light of those admissions, the pay slip claim is proven.
12 I will hear submissions as to penalty in due course.
II The CPI claim
13 The CPI claim is a claim that the City failed to give the employees the payment which was due to them pursuant to sub-cl 4.2.1 of the 2019 Agreement.
14 Clause 4 of the 2019 Agreement is entitled ‘Date and Period of Operation’ and provides:
4.1 This Agreement shall operate for a nominal three (3) year term ending on 30 June 2022.
4.2 In the event that;
a) The City of Albany fails to initiate discussions for a new Enterprise Agreement at least six (6) months prior to the nominal expiry date of this Agreement, with a first meeting to occur no later than 31st March 2022; or
b) A replacement Enterprise Agreement has not been agreed within six (6) months of the nominal expiry of this Agreement; then
4.2.1 Payment equal to the movement in Consumer Price Index (CPI) Perth from 1 April to 31 March of the preceding year will apply from 1 July 2022 and continue annually on 1 July each year until the Agreement is replaced or terminated.
4.3 The provision of increases pursuant to 4.2 above is dependent on the Employees covered by this Agreement engaging in genuine negotiations for a replacement agreement.
4.4 In the event that the Parties do not finalise a new Agreement by the nominal expiry date, then the terms and conditions of this Agreement will remain in force.
(i) Was sub-cl 4.2.1 triggered?
15 The payment specified in sub-cl 4.2.1 was applicable from 1 July 2022, and annually thereafter until the 2019 Agreement was replaced or terminated, if either of the events set out in cl 4.2(a) and cl 4.2(b) came to pass.
16 The parties agree that sub-cl 4.2.1 was triggered, because the City failed to initiate discussions for a new enterprise agreement at least six months prior to the nominal expiry date of the 2019 Agreement.
17 The City only initiated discussions on or about 12 May 2022, Exhibit 4, Statement of Agreed Fact, [5].
whereas it should have initiated discussions by 30 December 2021 at the latest, given the nominal expiry date of the 2019 Agreement was 30 June 2022.
18 The City does not contend that notwithstanding its failure to comply with cl 4.2(a), it was relieved of the obligation created by sub-cl 4.2.1 on the basis that the employees were not engaging in genuine negotiations for a replacement agreement (cl 4.3).
19 For those reasons, there is no question that sub-cl 4.2.1 was triggered, and the City was required to pass on the payment mentioned therein.
(ii) What payment did sub-cl 4.2.1 require?
20 The parties agree that upon being triggered, sub-cl 4.2.1 required the City to make ‘Payment equal to the movement in Consumer Price Index (CPI) Perth from 1 April to 31 March of the preceding year’, such payment to apply from 1 July 2022.
21 The parties also agree that this ‘payment’ was payment to the employees in the form of an adjustment to wages equal to the mentioned ‘movement in … (CPI) Perth’.
22 In purported compliance with sub-cl 4.2.1, the City paid the employees an additional 1% from 1 July 2022. That payment reflected the upward movement in CPI for Perth from 1 April 2020 to 31 March 2021.
23 The Union submits that the payment applicable from 1 July 2022 was not 1%, but rather 7.6%, to reflect the movement in CPI for Perth from 1 April 2021 to 31 March 2022.
24 The Union submits that the City did not apply the correct payment because, in its submission, ‘the preceding year’ in sub-cl 4.2.1 means the year ending 31 March 2022; whereas the City submits that it means the year ending 31 March 2021.
25 Notwithstanding the disagreement between the parties, two things are readily ascertainable as to what ‘movement’ in CPI is being referred to in sub-cl 4.2.1, namely that it is:
a. The movement in CPI for Perth, not the CPI for the whole of Australia; and
b. The movement in CPI for Perth for an entire year from 1 April to 31 March.
26 Further, although it is not stated, I infer that the CPI referred to is the ‘all groups’ CPI, and not the CPI for only one particular sector of goods or services.
27 The City did make payment to the employees, applicable from 1 July 2022, equal to the movement in all groups CPI for Perth for a period from 1 April to 31 March.
28 The question is whether or not it chose the correct 1 April – 31 March period.
(iii) What was the common intention of the parties in using the words in sub-cl 4.2.1?
29 When construing the provisions of an industrial instrument, AMWU v Berri Pty Limited [2017] FWCFB 3005 (Berri) Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union’ known as the Australian Manufacturing Workers Union (AMWU) v Berri Pty Limited [2017] FWCFB 3005,[114].
establishes that:
The common intention of the parties is sought to be identified objectively, that is by reference to that which a reasonable person would understand by the language the parties have used to express their agreement, without regard to the subjective intentions or expectations of the parties [114].
30 Focussing purely on the language of sub-cl 4.2.1 and bearing in mind the reference date of 1 July 2022 as the date of the first of any payments applicable under that provision, a reasonable person looking at the clause in isolation would understand the phrase, ‘1 April to 31 March of the preceding year’, to refer to 1 April 2020 to 31 March 2021. That is the natural and ordinary meaning of those words.
31 The specific years were obviously not attached to ‘1 April to 31 March’ because sub-cl 4.2.1 had potential operation beyond 1 July 2022 – i.e., in the event that the Agreement remained in force through 1 July 2023 and beyond, the ‘preceding year’ would have changed accordingly.
32 But as far as that first payment on 1 July 2022 was concerned, the plain meaning of the words – identified objectively, by reference to that which a reasonable person would understand by the language the parties have used to express their agreement, without regard to their subjective intentions or expectations – meant the year ending on 31 March 2021. It unduly strains the meaning of the words to try to contend that ‘the preceding year’ attaches to 1 April, such as to mean 1 April 2021 to 31 March 2022.
(iv) Is sub-cl 4.2.1 ambiguous or uncertain when looked at in its broader context?
33 Notwithstanding the construction of sub-cl 4.2.1 appears to be a very straight forward exercise, the parties come before the Court with rival contentions as to its proper construction. It must therefore be considered whether there is some ambiguity or uncertainty in the clause which arises from other factors.
34 When the Fair Work Commission is asked to resolve an alleged ambiguity or uncertainty in an industrial agreement, the Commission is required first to decide whether the provision under discussion is in fact ambiguous or uncertain. The principles applicable to that exercise are well established. As stated in Bradnam’s Windows and Doors Pty Ltd [2019] FWCA 979, Bradnam’s Windows and Doors Pty Ltd [2019] FWCA 979, [11].
they are as follows:
· The process of identifying ambiguity or uncertainty involves making an objective assessment of the words used in the provisions under examination. The words used are construed having regard to their context; 
· The Commission will generally err on the side of finding an ambiguity or uncertainty where there are rival contentions advanced and an arguable case is made out for more than one contention;
· However, the Commission must make a positive finding that an agreement … is ambiguous or uncertain. Prima facie satisfaction of ambiguity or uncertainty is not sufficient;
· The mere existence of rival contentions as to the proper construction of the terms of an agreement will also be an insufficient basis to conclude the existence of ambiguity or uncertainty. Such contentions may be self-serving. The task is to make an objective judgment as to whether the wording of a provision is susceptible to more than one meaning; and
· Once an ambiguity or uncertainty has been identified, in exercising the discretion whether to vary the agreement, the Commission is to have regard to the mutual intention of the parties at the time the agreement was made [11]. (footnotes omitted)
35 I consider that these principles are equally applicable to the preliminary task that confronts me in this case.
36 In National Union of Workers v CHEP Australia Limited [2018] FWC 3797, Deputy President Colman notes: National Union of Workers v CHEP Australia Limited [2018] FWC 3797, [44].

The mere fact that two parties present respectable but conflicting interpretations does not mean that the provisions concerned must be ambiguous. The etymology of the word reflects Latin roots meaning to drive both ways [44]. (original emphasis)
37 For the reasons stated at [29]-[32] above, I consider that the words of sub-cl 4.2.1 are not ambiguous.
38 However, the context of the 2019 Agreement must be considered as a whole to determine whether, notwithstanding the words of sub-cl 4.2.1 are not ambiguous, they are nevertheless uncertain.
Defined term
39 Turning first to the Definitions clause of the 2019 Agreement (cl 2):
a. The term ‘Consumer Price Index (CPI) Perth’ is not defined; but
b. ‘Perth CPI’ is defined, as follows:
‘Perth CPI’ means the percentage change in All Groups’ Consumer Price Index for Perth in the preceding year for the most recent March quarter.
40 As noted at [25] above, notwithstanding that ‘Consumer Price Index (CPI) Perth’ is not defined, that term evidently pertains to an annual figure.
41 ‘Perth CPI’ by definition also refers to an annual figure, by its reference to ‘the preceding year’. But unlike the wording of sub-cl 4.2.1, the Perth CPI definition goes on to add the qualifier, ‘for the most recent March quarter’. Therefore, wherever ‘Perth CPI’ appears in the Agreement, the figure to be relied upon is the annual all groups figure for the most recent March quarter. There is no ambiguity or uncertainty as to what ‘the preceding year’ means for ‘Perth CPI’ because it is immediately qualified in the definition by the phrase ‘for the most recent March quarter’.
42 At trial, I queried counsel for the Union as to whether the difference in terminology as between ‘Consumer Price Index (CPI) Perth’ and ‘Perth CPI’ was the result of sloppy drafting (my words), such that the two terms were intended to mean the same thing. Counsel was inclined to answer that question in the affirmative (ts 33).
43 Certainly, as Madgwick J stated in Kucks v CSR Limited (1996) 66 IR 182: Kucks v CSR Limited (1996) 66 IR 182, 184.

It is trite that narrow or pedantic approaches to the interpretation of an award are misplaced. The search is for the meaning intended by the framer(s) of the document, bearing in mind that such framer(s) were likely of a practical bent of mind: they may well have been more concerned with expressing an intention in ways likely to have been understood in the context of the relevant industry and industrial relations environment than with legal niceties or jargon. Thus, for example, it is justifiable to read the award to give effect to its evident purposes, having regard to such context, despite mere inconsistencies or infelicities of expression which might tend to some other reading. And meanings which avoid inconvenience or injustice may reasonably be strained for. For reasons such as these, expressions which have been held in the case of other instruments to have been used to mean particular things may sensibly and properly be held to mean something else in the document at hand. (emphasis added)
44 However:
a. ‘Consumer Price Index (CPI) Perth’ and ‘Perth CPI’ are at face value distinctly different from each other;
b. ‘Perth CPI’ is specifically defined, whereas the other term is not;
c. The two terms are used in different contexts within the 2019 Agreement.
45 If the two terms were intended to mean the same thing, I cannot see why the drafters would not have simply used the defined term throughout – (a) precisely because it is defined; and (b) because it is a much more concise term. I do not accept that this is an instance of mere inconsistency or infelicity of expression.
46 The locations of ‘Consumer Price Index (CPI) Perth’ and ‘Perth CPI’ in the 2019 Agreement strengthen my view that they are not intended to mean the same thing.
47 ‘Perth CPI’ appears in two places in the 2019 Agreement – cl 19 (Allowances) and cl 46 (Travel Reimbursement).
48 ‘Consumer Price Index (CPI) Perth’ also appears in two places – cl 4 (Date and Period of Operation), and cl 16 (Wage Increases).
49 The Union submits that it would be absurd and nonsensical for allowances and travel reimbursements to increase in line with the most recent March CPI figure, while any payment due under sub-cl 4.2.1 moves in line with a different CPI figure (ts 33). Claimant’s Outline of Submissions, [27].

50 That submission, though, ignores the fundamental difference between event-specific and often one-off payments such as allowances, as against a payment made to the entire workforce under specific circumstances in the midst of negotiations for a replacement agreement, which is what sub-cl 4.2.1 provides for. One might perceive a legitimate reason to link the first, but not necessarily the second, to the most recent movement in CPI, because they arise in such different circumstances. One payment pertains to a concrete and finite event, whereas the other is a payment made in a state of flux and is not intended to represent the negotiated final position on wage increase – because it is not a wage increase.
51 Finally, I note that CPI figures are published by the Australian Bureau of Statistics on a quarterly basis – in March, June, September and December of each year. There is no commonly understood expression for yearly as opposed to quarterly CPI figures, and there is also no commonly understood ‘CPI year’ (unlike, for example, the financial year, which everyone understands is 1 July of one year to 30 June of the following year), which might shed light on what ‘the preceding year’ means.
52 The fact that there is on the one hand a defined term in the 2019 Agreement pertaining to an annual CPI figure ‘for the most recent March quarter’, and on the other hand an undefined term which also pertains to an annual CPI figure, but which is used in contexts quite different from those in which the defined term is used, is sufficient to give rise to uncertainty as to the meaning of that undefined term.
(vi) How is the uncertainty to be resolved?
53 Berri continues: Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union’ known as the Australian Manufacturing Workers Union (AMWU) v Berri Pty Limited [2017] FWCFB 3005, [114].

If the language of the agreement is ambiguous or susceptible of more than one meaning then evidence of the surrounding circumstance will be admissible to aid the interpretation of the agreement.
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 the subject matter of the agreement. Evidence of such objective facts is to be distinguished from evidence of the subjective intentions of the parties, such as statements and actions of the parties which are reflective of their actual intentions and expectations.
Evidence of objective background facts will include:
(i) evidence of prior negotiations to the extent that the negotiations tend to establish objective background facts known to all parties and the subject matter of the agreement;
(ii) notorious facts of which knowledge is to be presumed; and
(iii) evidence of matters in common contemplation and constituting a common assumption.
The diversity of interests involved in the negotiation and making of enterprise agreements … warrants the adoption of a cautious approach to the admission and reliance upon the evidence of prior negotiations and the positions advanced during the negotiation process…
Admissible extrinsic material may be used to aid the interpretation of a provision in an enterprise agreement with a disputed meaning, but it cannot be used to disregard or rewrite the provision in order to give effect to an externally derived conception of what the parties’ intention or purpose was.
…Post-agreement conduct which amounts to little more than the absence of a complaint or common inadvertence is insufficient to establish a common understanding [114]. (original emphasis)
54 I now turn, then, to evidence of surrounding circumstance to aid in my interpretation.
(vii) What evidence of surrounding circumstances was before the Court?
55 The evidence of surrounding circumstances fell into three categories:
a. Evidence concerning the addition of the wording, which was carried through to sub-cl 4.2.1, to the City of Albany Employees Collective Enterprise Agreement 2013 (2013 Agreement);
b. Evidence of the progression of agreements from 2011 to 2019;
c. Evidence of negotiations during 2022 for an agreement to replace the 2019 Agreement.
Evidence of bargaining for the wording that appears in sub-cl 4.2.1
56 Tom Wenbourne and Andrew Greenwood were both involved in negotiations for the 2013 Agreement.
57 Mr Wenbourne and Mr Greenwood both explain that the 2013 Agreement was the first agreement to contain the form of wording seen at sub-cl 4.2.1 of the 2019 Agreement – i.e., it was the first agreement to link a CPI payment to either (a) the failure of the City to initiate discussions for a new agreement at least 6 months prior to expiry or (b) failure to finalise a replacement agreement within 6 months of the nominal expiry date.
58 The statements of Mr Wenbourne and Mr Greenwood do not provide any great detail as to how the reference to CPI was to be interpreted.
59 Annexures TW-3, TW-4 and TW-5 to Mr Wenbourne’s statement provide some insight into the understanding of the Union and the City as to the purpose of the clause. However, they also show completely different attitudes, on the part of the employee representatives on one hand, and the City on the other, as to its effect.
60 Annexure TW-3 is an email dated 3 December 2013 from Scott Reitsema (Chair of 2022 Enterprise Agreement Negotiation Committee) to Mr Wenbourne. In the body of that email, Mr Reitsema writes:
I believe that the wage clause needs to include a sub-clause of the same format as the current agreement which reads ‘From 1st July 2013, payment shall continue annually on 1st July each year until the Agreement is terminated or replaced using an increase equal to the movement in Consumer Price Index (CPI) Perth from 1st April to 31st March of the preceding year’. Otherwise the [City of Albany] will always have the upper hand in regards to stalling future negotiations and would have significant reason to delay the replacement of the future agreement.
We are currently seeing unreasonable delays from the City’s part, if they had the financial incentives to delay proceedings then I believe that it would make things a lot worse for all staff under the Agreement. (emphasis added)
61 Annexure TW-4 is an email dated 17 December 2013 from Shauna Dale (Manager Human Resources for the City) to the bargaining representatives. In that email she said:
The inclusion of a CPI payment that extends beyond the life of the Agreement was not contained in the wage offer that was put forward to the ASU and our employees as part of genuine negotiations to reach agreement. Whilst it is understood that there is now a feeling that this issue was not discussed and therefore not part of the negotiations; there was genuine and good faith bargaining by the City and the wage offer very clearly did not contain any reference to a CPI payment as this is seen as a disincentive for genuine bargaining by the City. Therefore it was not included as part of the wage offer that was accepted in principal by the ASU/employees in July 2013. (emphasis added)
62 Annexure TW-5 is essentially the same email as that contained in TW-4, except that it was sent on 20 December 2013 by Ms Dale to ‘All Users’, which I take to mean all employees at the City.
63 Ms Dale’s email indicates that the inclusion of a CPI payment was not part of negotiations to that point. There is no evidence that contradicts that inference.
64 Upon the issue being raised, the City (via Ms Dale) indicated that in the City’s view, the inclusion of a CPI payment would act as a disincentive for genuine bargaining by the City. In other words, the City appeared to take the exact opposite view of the CPI payment from that taken by the employee representatives – to the extent that I can ascertain what those representatives thought, which is only from the comments of Scott Reitsema, who was not a witness in the case. In Mr Reitsema’s view, the lack of a CPI payment would give the City a disincentive to bargain.
65 I also note that in the emails dated 17 and 20 December 2013 from Ms Dale, the City proposed a clause similar, but not identical, to the clause that ultimately appeared in the 2013 Agreement. Evidently there was further discussion between the parties about which no evidence has been provided, because the closing wording changed markedly between those emails and the clause ultimately included.
66 I cannot ascertain the objective intentions of the parties from:
a. The body of Mr Wenbourne’s statement, as it contains no detail of any discussions as to what ‘Consumer Price Index (CPI) Perth’ was to mean;
b. The body of Mr Greenwood’s statement, as it contains no detail of any discussions as to what ‘Consumer Price Index (CPI) Perth’ was to mean;
c. The annexures to Mr Wenbourne’s statement, because:
i. They expose the parties’ antithetical views as to the purpose and effect of the proposed clause; and
ii. They do not discuss the clause which actually appeared in the 2013 Agreement.
The predecessor agreements
67 The Union referred to the history of agreements between the City and its employees. It submitted that on occasions when historical agreements had not been replaced by the nominal expiry date, the employees were given wage increases on the relevant 1 July which reflected the movement in CPI ending on the most recent 31 March. On that basis, it submitted, the employees on whose behalf this claim is brought ought to have been afforded the 7.6% increase as of 1 July 2022, reflective of the CPI increase ending on 31 March 2022. Essentially, it submits that this is evidence of a common understanding between the parties as to what ‘CPI period’ is referred to in sub-cl 4.2.1.
The 2011 Agreement
68 The historical excursion commenced with the City of Albany (General Workers) Enterprise Agreement 2011 (2011 Agreement). At that point in time, there were separate agreements (apart from the 2011 Agreement) covering outside workers and day care workers.
69 The 2011 Agreement had a nominal expiry date of 30 June 2013.
70 Clause 4.2 of the 2011 Agreement required the parties to commence discussions for a replacement agreement 6 months prior to the nominal expiry date. Clause 16.1.2 specified the exact nature of discussions, which was to the effect that agreements covering general, outside and day care workers were to be consolidated under a single agreement.
71 Clause 16.1.3 provided:
From 1st July 2013, payment shall continue annually on 1st July each year until the Agreement is terminated or replaced using an increase equal to the movement in Consumer Price Index (CPI) Perth from 1st April to 31st March of the preceding year.
72 The first thing to note is that in the 2011 Agreement, there was no condition precedent to the payment required by cl 16.1.3, of the kind required by sub-cl 4.2.1 of the 2019 Agreement – that is, it was not linked to bargaining, or lack thereof, for a new agreement. Provided the 2011 Agreement had not been terminated or replaced prior to 1 July 2013, the cl 16.1.3 payment had to be made, and it had to apply from 1st July 2013. Further, it was explicitly an increase in wages, in keeping with the location of the sub-clause within cl 16, entitled ‘Wage Increases’.
73 The 2011 Agreement was eventually replaced by the 2013 Agreement, which took effect from 22 April 2014.
74 Ultimately, the City’s employees received wage increases of 4% (for outside employees and day care employees) and 3.25% (for all other employees) from 1 July 2013, pursuant to
sub-cl 18.1.1 of the finalised 2013 Agreement – the consolidated agreement which had been intended by the terms of cl 16.1.2 of the 2011 Agreement.
75 However, because the 2011 Agreement had not been terminated or replaced prior to 1 July 2013, the payment provided for by cl 16.1.3 of the 2011 Agreement had to be applied from 1 July 2013, until such time as the 2013 Agreement was in place.
76 The evidence of Andrew Greenwood is that in his first pay after 1 July 2013, he received a pay increase of 2.4%, and his payslips attached to his statement as annexures AG-2 and AG-3 bear this out. It so happens that 2.4% was an increase equal to the movement in Consumer Price Index for Perth from 1 April 2012 to 31 March 2013.
77 The Union relies upon that evidence to support a submission that when the following wording is used in sub-cl 4.2.1 of the 2019 Agreement:
the movement in Consumer Price Index (CPI) Perth from 1st April to 31st March of the preceding year
it must mean the annual period ending on the most recent 31 March.
78 The difficulty with that submission, when made in reliance upon the interpretation of the payment required to be made on 1 July 2013 by the 2011 Agreement, is that cl 16.1.3 of the 2011 Agreement appears in the Wage Increases clause.
79 In that context, the application of a 2.4% increase, which did reflect the movement in CPI for the year ending 31 March 2013, was in keeping with the wage increases for 2011 and 2012, each of which explicitly referred to movement in CPI for the year ending on the most recent 31 March.
80 I do not consider that the way the clause was applied in the case of the 2011 Agreement can inform the use of similar wording in a very different context in the 2019 Agreement.
The 2013 Agreement
81 The 2013 Agreement was the first agreement that contained the wording seen in the 2019 Agreement. This wording – found at cl 4 of the 2013 Agreement – linked the provision of a payment equal to the movement in Consumer Price Index (CPI) Perth to the absence of either one of two events – i.e., either a failure by the City to initiate discussion for a new agreement at least 6 months prior to the nominal expiry date, or the failure of the parties to agree a replacement agreement within 6 months of the nominal expiry date (30 December 2016).
82 Andrew Greenwood has been involved in bargaining for the City’s enterprise agreements since 2013, and he states that prior to 2022, in his experience the City had always initiated discussions at least 6 months prior to the expiry date of an agreement.
83 On the basis of that uncontradicted evidence, I find that the City initiated discussions for an agreement to replace the 2013 Agreement at least 6 months prior to its nominal expiry date (30 June 2016).
84 Further, I note that the City of Albany Collective Enterprise Agreement 2016 (2016 Agreement) was finalised on 23 December 2016, which was within 6 months of the nominal expiry date.
85 Therefore, in the case of the 2013 Agreement, neither of the requirements for a payment in line with Consumer Price Index (CPI) Perth on 1 July 2016 was triggered.
86 In an email dated 8 August 2016 to all City employees, Exhibit 3, Witness Statement of Andrew Greenwood, annexure AG-8.
Mr Sharpe explained that the majority of employees who had voted on the proposed 2016 Agreement had voted not to accept it. Mr Sharpe went on:
Where to from here?
Negotiations will recommence and the current Agreement will continue to operate until it is replaced with a new one. The current Agreement makes provision for a wage increase of CPI to be applied (0.7%). In summary – EBA negotiations effectively commence from where they concluded prior to voting, however all conditions are open to be renegotiated. (emphasis added)
87 It is the case that 0.7% was the movement in CPI for Perth from 1 April 2015 to 31 March 2016.
88 However, contrary to paragraph [17] of the Union’s outline of submissions, there is no evidence that that increase was ever applied from 1 July 2016. Paragraph [17] of the Union’s submission misstates the evidence of Mr Greenwood on this issue. Mr Greenwood does not state:
On around 8 August 2016, the City of Albany passed on a 0.7% pay increase to its workforce. This was following an unsuccessful attempt by the City of Albany to replace the 2013 enterprise agreement. The email that Mr Sharpe sent to his workforce at the time specifically stated that the reason for the 0.7% pay increase was because the ‘current agreement makes provision for a wage increase of CPI to be applied (0.7%)’. (emphasis added)
89 Nor does Mr Greenwood, or any other witness, attach payslips from 2016 to support that position. I tend to think that if the witnesses were able to find payslips from 2013 to support their claim, they likely could have found payslips from 2016 as well – and yet none were provided in evidence.
90 What Mr Greenwood actually states is:
On 8 August 2016, Mr Andrew Sharpe … sent an email to all employees regarding wage increases following a failed vote for the proposed replacement agreement. In that email, Mr Sharpe explained that the 2013 Agreement would apply until a new agreement was agreed to. He also advised that the 2013 Agreement required the City to pass on a wage increase of 0.7% to all employees covered under the 2013 Agreement. I have attached a copy of Mr Sharpe’s email at AG-8. Ibid, [12].

91 That evidence is a correct statement of what Mr Sharpe said.
92 But whatever payment might have been due to be paid on 1 July 2016 pursuant to cl 4 of the 2013 Agreement never had to be paid, since the 2016 Agreement was finalised within the timeframe set by the 2013 Agreement and ultimately provided for a 2% increase in wages from 1 July 2016. City of Albany Collective Enterprise Agreement 2016, sub-cl. 14.1.1.

The 2019 Agreement
93 On the basis of the same evidence referred to at [82] above, I find that the City initiated discussions for an agreement to replace the 2016 Agreement at least 6 months prior to the nominal expiry date, as required by cl 4.2 of the 2016 Agreement.
94 The 2019 Agreement took effect from 22 October 2019, which was within 6 months of the nominal expiry date of the 2016 Agreement, the nominal expiry date being 30 June 2019.
95 Therefore, in the case of the 2016 Agreement, neither of the requirements for a CPI increase on 1 July 2019 was triggered, so that no payment was made pursuant of cl 4.2 of the 2016 Agreement.
What does this history tell us?
96 What is evident from the foregoing is that in terms of historical practices and payments made while negotiations were ongoing for replacement agreements, there is no example of the way the sub-cl 4.2.1 wording has been historically applied.
97 The Union’s entire argument hinges upon one email from Mr Sharpe, in which he referred to a 0.7% increase potentially applying from 1 July 2016, while negotiations were ongoing for the replacement of the 2013 Agreement. That figure (0.7%) did equate to the annual CPI figure for Perth ending on the most recent 31 March, but that payment ultimately never had to be made because the conditions precedent to its application never came to pass, and it was superseded by the (higher) increase provided for by the 2016 Agreement, which was finalised within 6 months of the nominal expiry date of the 2013 Agreement.
98 Mr Sharpe’s reference in the email of 8 August 2016 is a statement of his own opinion as to what was necessary in the event that a payment was triggered by cl 4 of the 2013 Agreement. It falls well short of constituting evidence of a common understanding between the parties as to what cl 4 meant.
Evidence of 2022 negotiations
99 The Union presented evidence of negotiations to replace the 2019 Agreement:
a. At paragraphs [14]-[17] of Mr Greenwood’s statement;
b. At paragraphs [11]-[19] of Mr Wenbourne’s statement; and
c. In the statement of Jill Hugo.
Mr Greenwood
100 Mr Greenwood states:
a. Bargaining for an agreement to replace the 2019 Agreement began on 12 May 2022. This was the first time he could recall that the City had not commenced bargaining at least six months prior to the nominal expiry date of an agreement.
b. When he received a 1% pay increase dating from 1 July 2022, this was less than the 7.6% increase he had been expecting.
c. On or around 14 December 2022, the City passed on a 5% pay increase, backdated to 1 July 2022, meaning that the total increase dating from 1 July 2022 was 6%.
101 Annexure AG-9 consists of payslips evidencing the pay increases that Mr Greenwood states he received from 1 July 2022 to 31 December 2022.
102 Insofar as Mr Greenwood had been expecting an increase of 7.6% from 1 July 2022, I infer that he had this expectation because in 2013 he had received an increase of 2.4%, which reflected the movement in CPI to the most recent 31 March.
103 But as discussed above, that increase took place in the context of the Wage Increases clause of 2011 Agreement, which was in different terms and in a different context from the one under discussion.
104 Mr Greenwood’s evidence on that point amounts to nothing more than an assumption and does not assist me to determine the common intention of the parties as to the meaning of sub-cl 4.2.1.
Mr Wenbourne
105 Mr Wenbourne states:
a. Around 12 May 2022, he received an email from Ms Libby Harding, Manager of People and Culture at the City, stating that bargaining for a new agreement had commenced.
b. He attended the first bargaining meeting on 2 June 2022.
c. He received a wage increase of 1% from 1 July 2022.
d. That wage increase was consistent with an email dated on or around 2 July 2022 from Ms Harding, in which she stated the City’s view that sub-cl 4.2.1 provided for an increase of 1%.
e. He was upset by that email, because ‘the interpretation of that clause has always remained the same’.
f. He attended a meeting on or around 5 December 2022, at which employee pay rates were discussed.
g. At the meeting on or around 5 December 2022, Mr Sharpe read from a prepared statement and announced that the City would provide a 5% increase in addition to the 1% increase issued on 1 July 2022.
h. Annexure TW-13 is the statement that Mr Sharpe read at the meeting on or around 5 December 2022.
106 Annexure TW-13 to Mr Wenbourne’s statement is a letter dated 5 December 2022 from Mr Sharpe to City employees covered by the 2019 Agreement. In that letter, Mr Sharpe:
a. Referred to the imminent move of all WA local governments from the national employment system to the State industrial relations system as of 1 January 2023.
b. Said that, in view of that move and given the parties were still ‘apart on key bargaining items (including pay increases)’, the City did not see any value in continuing to bargain for a replacement agreement under the Fair Work Act 2009 (Cth).
c. Explained that given the uncertainty arising from the move to the State system, the impact this would have on bargaining and cost-of-living pressures, the City had decided to provide Agreement-covered employees with a further pay increase of 5% from 1 July 2022.
107 The difficulty with Mr Wenbourne’s assertion that ‘the interpretation of that clause has always remained the same’ is that, as I have noted earlier in these reasons, sub-cl 4.2.1 in its current form of wording has never actually been applied historically. Therefore, his observations take me no further in determining the parties’ common intention as to the meaning of that clause.
108 To the extent that the Union seeks to characterise Mr Sharpe’s letter of 5 December 2022, inclusive of the 5% increase in addition to the 1% initially applicable from 1 July 2022, as a thinly veiled attempt to assuage the City’s guilt at not interpreting sub-cl 4.2.1 correctly, or as an admission by the City that it should have passed on an increase of 7.6%, I firmly reject that submission, because it conveniently ignores the unique and unusual circumstances in which the letter was written.
109 The letter of 5 December 2022 was written in the context of the City having been given extremely short notice about the transfer from the national system to the State industrial system. Rather than make employees wait for certainty as to the future of their employment terms and conditions, the City determined to give them a pay rise which was mindful of cost-of-living pressures.
Ms Hugo
110 Ms Hugo is the Assistant Branch Secretary of the WA Branch of the Union. She represented the Union and its members in enterprise bargaining with the City in relation to the 2016 Agreement and the 2019 Agreement.
111 At the time of preparing her statement, she was involved in negotiations with the City to replace the 2019 Agreement. At that time, the bargaining parties had met ‘around seven times’.
112 Insofar as Ms Hugo’s evidence pertains to the interpretation of the CPI obligation under sub-cl 4.2.1, I note the following:
a. At the meeting on or around 14 June 2022, Ms Harding, on behalf of the City –
spoke about how CPI had increased significantly in the past 12 months and that the City did not contemplate just how much the CPI obligation was going to increase their wage costs. She said that a wage increase of 7.6% was not affordable. Ms Harding proposed a 6% initial increase in the new agreement’s first year, with a 2.5% increase in the second year. Exhibit 1, Witness Statement of Jill Hugo, [18].

b. After a recess during the meeting on or around 14 June 2022, Ms Harding explained that the wage clause would remove mentions of ‘CPI or whichever is greater’.
c. On or around 16 June 2022, Ms Hugo sent a letter via email to Mr Sharpe and Ms Harding, in which she explained that:
unless a new agreement was struck before 1 July 2022, clause 4.2 of the 2019 Agreement would require the City to provide its employees with a 7.6% pay increase on 1 July 2022. Ibid, [25].

d. On 21 June 2022, Ms Hugo received a response from Mr Sharpe to her letter of 16 June 2022, in which Mr Sharpe ‘claimed that the CPI increase would be calculated based on the April-to-March period two years prior.’ Ms Hugo states she ‘had not encountered the City ever using this interpretation before’ Ibid, [27].
.
113 Annexure JH-6 of Ms Hugo’s Witness Statement is the minutes of the meeting held on 14 June 2022. Those minutes contain the following:
[Ms Harding] continued on to state that the City has spent a lot of time modelling wage increases and the impact that these would have on the community. She mentioned that the CPI increase was unexpected and unprecedented, increasing from 1% to 7.6% in the space of 12 months and that this kind of increase was never contemplated when CPI was discussed in any of the last 3 agreements.
[Ms Harding] acknowledged the increase in living costs and stated the City was also experiencing many cost increases, such as fuel, similar to staff. The City’s modelling aimed to achieve a balance, but specified that the 7.6% increase is not affordable and could not be passed onto the community.
114 The minutes note that after a break in the meeting:
[Ms Hugo] sought further clarification from the City on their proposal and exactly how this would look in Clause 16. [Ms Harding] stated that Clause 16 would be updated to reflect an increase of 6% in 2022 and an increase of 2.5% in 2023 and all references to ‘CPI or whichever is greater’ within the wage increases clause (Clause 16) would be removed.
115 I will not repeat extensively the content of the minutes of the other meetings, but I note that in the minutes of the meeting of 1 August 2022 (JH-21), Ms Hugo relayed to the City that employees felt the City was treating them with contempt, and:
Members expected the City to recognise their efforts and were deeply unhappy with the City’s interpretation and not applying CPI. They believe it was not in good faith because ‘everyone knows it was the March CPI of the current year’. [Ms Hugo] reiterated that members are not prepared to give up CPI.
116 I refer specifically to that portion of the minutes because in my view, it makes the error of conflating wage increases – which have historically pertained to CPI from the most recent 31 March in the given year (because that is what the agreements have provided in their Wage Increases clauses) – with the payment due under sub-cl 4.2.1, which is a different thing entirely. I have no difficulty finding that when the employees expressed the view about what ‘everyone knows’, they were talking about wage increases. Without detailed evidence that goes beyond hearsay, I am not prepared to place any weight on what the employees expressed – with considerable bitterness I might add – with respect to what ‘everyone knows’.
117 To the extent that this evidence is evidence of matters constituting a common assumption, it is a common assumption about wage increases, but not about the specific and different payment required by sub-cl 4.2.1.
118 On that note, Ms Hugo herself makes a significant error in her own interpretation of sub-cl 4.2.1 when she repeatedly states in various documents that ‘if a deal is not struck by 1 July 2022’, the payment under sub-cl 4.2.1 is payable. That is incorrect. The payment was due because the City had not commenced bargaining at least 6 months prior to the nominal expiry date. For its part, the City (via Mr Sharpe), did not correct Ms Hugos’s misunderstanding. This error in itself raises concerns about the true understanding of the parties as to the meaning of the clause.
119 Further, when Ms Hugo states at [27] of her statement that the City claimed that the CPI increase would be calculated based on the April-to-March period ‘two years prior’, she is misstating the position. The City was not attempting to apply anything from ‘two years prior’, but rather applying plain English interpretation principles to the clause, which took it to 2021.
120 Also at [27], Ms Hugo states she ‘had not encountered the City ever using this interpretation before’. However, there is no evidence of discussions she was party to during bargaining for the 2016 Agreement or the 2019 Agreement which would assist me to determine what she means by this. Without more, I infer that she, like Mr Greenwood and Mr Wenbourne, is referring to the same matters they referred to. For the reasons I have already expressed, that historical excursion does not bear out their stance on historical interpretation once it is subjected to careful scrutiny.
Conclusion
121 To the extent that there is uncertainty as to the meaning of sub-cl 4.2.1, I am not assisted by any useful extrinsic materials.
122 I therefore go back to the plain meaning of the words and the context in which they appear, not only within the clause itself, but in the 2019 Agreement as a whole.
123 The ‘preceding year’ must be considered from the point of view of dates in 2022. Whether it is looked at from 1 July 2022, or 30 December 2022 (in the case where the City had initiated discussions, but a replacement agreement had not been finalised within 6 months), the preceding year is 2021. The phrase ‘1 April to 31 March of the preceding year’ links ‘the preceding year’ to ‘31 March’, as a matter of plain English language construction.
124 It is also relevant to my interpretation of the sub-clause that it appears in a clause which is about enterprise bargaining.
125 The distinct tenor of the Union’s approach to the case – both in the materials provided as to its submissions to the City during the 2022 bargaining, and at trial – is that any payment made pursuant to sub-cl 4.2.1 was in and of itself a wage increase. It was not. Rather, it was a payment made in the context of bargaining for the agreement as a whole; such bargaining extending to the issue of appropriate wage increases, which naturally will take into account increases in the cost of living as exemplified by the movement in CPI.
126 If a replacement agreement had still not been agreed by 1 July 2023, the employees would then have received the 7.6% increase, reflecting the movement in CPI to 31 March 2022. But in the meantime, bargaining would continue, one of its purposes being to finalise wage increases that reflect the cost of living.
127 The City’s interpretation was correct.
128 There is no contravention.
129 Consequent upon these findings, the issue as to whether or not Mr Sharpe was involved in any contravention of FWA s 50 falls away.
Orders
130 The payslip claim is allowed.
131 The CPI claim is dismissed.



E. O’DONNELL
INDUSTRIAL MAGISTRATE