Construction, Forestry and Maritime Employees Union -v- Qube Ports Pty Ltd

Document Type: Decision

Matter Number: M 2/2024

Matter Description: Fair Work Act 2009 - Alleged breach of Instrument

Industry:

Jurisdiction: Industrial Magistrate

Member/Magistrate name: Industrial Magistrate D. Scaddan

Delivery Date: 12 Dec 2024

Result: Claim proven

Citation: 2024 WAIRC 01031

WAIG Reference:

DOCX | 57kB
2024 WAIRC 01031
INDUSTRIAL MAGISTRATES COURT OF WESTERN AUSTRALIA


CITATION
:
2024 WAIRC 01031



CORAM
:
INDUSTRIAL MAGISTRATE D. SCADDAN



HEARD
:
THURSDAY, 10 OCTOBER 2024



DELIVERED
:
THURSDAY, 12 DECEMBER 2024



FILE NO.
:
M 2 OF 2024



BETWEEN
:
CONSTRUCTION, FORESTRY AND MARITIME EMPLOYEES UNION


CLAIMANT





AND





QUBE PORTS PTY LTD


RESPONDENT

CatchWords : INDUSTRIAL LAW – Construction of a clause of an enterprise agreement – How the relevant overtime clause applies to a full-time salaried employee – Determination of when overtime rates apply
Legislation : Fair Work Act 2009 (Cth)
Industrial Relations Act 1979 (WA)
Instrument : Qube Ports Pty Ltd Port of Dampier Enterprise Agreement 2020
Case(s) referred
to in reasons: : City of Wanneroo v Australian Municipal, Administrative, Clerical and Services Union [2006] FCA 813; 153 IR 426
Transport Workers’ Union of Australia v Linfox Australia Pty Ltd [2014] FCA 829; (2014) 318 ALR 54
Kucks v CSR Ltd [1996] IRCA 166; (1996) 66 IR 182
Amcor Limited v Construction, Forestry, Mining and Energy Union & Ors [2005] HCA 10; (2005) 214 ALR 56
Mildren v Gabbusch [2014] SAIRC 15
Miller v Minister of Pensions [1947] 2 All ER 372
Briginshaw v Briginshaw [1938] HCA 34; 60 CLR 336
Fedec v The Minister for Corrective Services [2017] WAIRC 00828; 97 WAIG 1595
Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Excelior Pty Ltd [2013] FCA 638

Result : Claim proven
Representation:
Claimant : Mr K. Sneddon (of counsel)
Respondent : Mr J. McLean (of counsel), as instructed by Allens




REASONS FOR DECISION
Introduction
1 On 18 January 2024, the Construction, Forestry and Maritime Employees Union (the claimant) lodged a claim alleging Qube Ports Pty Ltd (the respondent) failed to pay an affected worker, Wayne Gordon (Mr Gordon), overtime when they had completed the required annualised hours of 1820 hours worked in a year (the Claim).
2 In failing to pay overtime, the claimant alleges the respondent has contravened s 50 of the Fair Work Act 2009 (Cth) (FWA) in that the respondent has contravened Part B, cl 6.1 of the Qube Ports Pty Ltd Port of Dampier Enterprise Agreement 2020 (EA 2020).
3 The claimant claims:
· $19,076.41 in overtime payments to Mr Gordon;
· interest on the amount claimed; and
· payment of a civil penalty to be paid to the claimant.
4 The respondent denies the alleged contravention and says:
· The controversy between the parties involves interpreting clauses in EA 2020 relevant to overtime for a full-time salaried employee (FSE) to determine when (or if) overtime applies after a FSE has achieved the required annualised hours of 1820 hours.
5 Schedule I of these reasons outlines the jurisdiction, standard of proof and practice and procedure of the Industrial Magistrates Court (IMC).
6 Schedule II of these reasons outlines the principles applicable to construction of an industrial agreement.
Agreed Facts
7 The parties provided a statement of agreed facts.
8 In summary, the claimant has standing to commence the Claim, and the respondent is a national system employer under the FWA. EA 2020 covers and applies to the parties and to Mr Gordon from 25 August 2021 after the Fair Work Commission approved it on 18 August 2021.
9 Mr Gordon is a national system employee who commenced employment with the respondent at the Port of Dampier on or around 14 February 2011, and worked in the following categories of employment under EA 2020 and its previous iterations:
· Supplementary Employee (SE) from 14 February 2011 to 21 May 2017;
· Guaranteed Wage Employee (GWE) from 22 May 2017 to 31 October 2021;
· Variable Salary Employee (VSE) from 1 November 2021 to 23 January 2022;
· Provisional Full Time Salaried Employee (PFSE) from 24 January 2022 to 7 August 2022; and
· FSE from 8 August 2022 onwards.
10 For the remainder of these reasons, where reference is made to both FSE and PFSE, they will be referred to as Salaried Employees and where reference is made to all VSE, PVSE and GWE, they will be referred to as Non-Salaried Employees.
11 Initially, there was an agreed period in dispute for which the claimant said Mr Gordon was owed overtime payments. However, during the hearing the period in dispute changed based on known payments made to Mr Gordon as outlined in his witness statement dated 1 August 2024 Exhibit 1 – Witness Statement by Mr Gordon dated 1 August 2024.
(Gordon Statement) where he states from:
· 1 July 2021 to 15 April 2022, he completed 1820 hours of work; Exhibit 1 at [9].

· 16 April 2022 to 14 May 2022, he worked additional hours and was not paid at the SE hourly rate; Exhibit 1 at [10].
and
· 15 May 2022 to 30 June 2022, he worked additional hours and was paid at the SE hourly rate. Exhibit 1 at [11].

12 The new agreed disputed period for which the claimant says Mr Gordon was not paid the correct overtime rate is 16 April 2022 to 14 May 2022 (the Disputed Period).
13 For the avoidance of doubt, it is not that Mr Gordon was not paid during the Disputed Period, but the claimant says that he should have been paid at the relevant SE hourly rate for the time worked during this period.
14 Accordingly, following this decision there remains a residual amount in dispute, which, by agreement, will be resolved if the claimant is successful on the issue of liability of the respondent for overtime payments for the Disputed Period.
Other Evidence
15 The claimant relied upon the Gordon Statement, of which the relevant parts have been referred to.
16 The respondent relied upon a witness statement by Daniel Ortiz (Mr Ortiz) lodged on 2 September 2024 (Ortiz Statement). Exhibit 2 – Witness Statement by Daniel Ortiz lodged on 2 September 2024.

17 Mr Ortiz is employed by Qube Holdings Pty Ltd as General Manager – Industrial Relations and he outlines his role in this position at [3] of the Ortiz Statement. Relevant to the Disputed Period, Mr Ortiz states Mr Gordon worked 987.5 hours as a PFSE from 24 January 2022 to 30 June 2022.
18 Mr Ortiz refers to Part A, cl 9.1.1(a) and cl 9.2.1(a) of EA 2020, which specifies the required annualised hours requirement for Salaried Employees being 1820 hours (referred to as Annualised Accumulated Hours or AAH Clause 2.1 of EA 2020.
).
19 Mr Ortiz states that it is the respondent’s practice that only hours worked in the position of Salaried Employees are counted towards the AAH. Exhibit 2 at [10].

EA 2020
20 Overtime at the Port of Dampier is set out in Part B, cl 6:
6.1 FSEs and PFSEs are entitled to overtime paid at the Supplementary Employees hourly rate when they have achieved 1820 Worked Hours in a Year.
6.2 VSEs, PVSEs and GWEs who work more than 1820 hours in a Year will be entitled to be paid overtime at the Supplementary Employees hourly rate.
21 ‘Year’ means 1 July to 30 June. Clause 2.1 of EA 2020.

22 ‘Worked Hours’ includes any period of paid leave, training, public holidays and any other paid arrangement contained in EA 2020. Clause 2.1 of EA 2020.

The Parties’ Contentions
23 The parties agree EA 2020 is in two parts, Part A and Part B. Part A contains terms generic to the respondent’s national operations, including at the Port of Dampier, whereas Part B contains terms specific to employees working at the Port of Dampier. Clause 5.1 of EA 2020.

24 Part A and Part B are to be read together, although if there is an inconsistency between the two parts, Part B prevails to the extent of any inconsistency. Clause 5.6 of EA 2020.
Similarly, EA 2020 is to be read with various industry awards where EA 2020 prevails to the extent of any inconsistency. Clauses 5.2 and 5.3 of EA 2020.

25 The principles applicable to the interpretation of industrial agreements are well known. In summary, the interpretation of an industrial instrument begins with consideration of the natural and ordinary meaning of the words used. City of Wanneroo v Australian Municipal, Administrative, Clerical and Services Union [2006] FCA 813; 153 IR 426, 438 (City of Wanneroo).
An industrial instrument is to be interpreted in light of its industrial context and purpose and must not be interpreted in a vacuum divorced from industrial realities. City of Wanneroo 438, 440.
An industrial agreement must make sense according to the basic conventions of English language. City of Wanneroo 440.
The circumstances of the origin and use of a clause is relevant to an understanding of what is likely to have been intended by its use. Transport Workers’ Union of Australia v Linfox Australia Pty Ltd [2014] FCA 829; (2014) 318 ALR 54.
Narrow and pedantic approaches to the interpretation of an industrial agreement are misplaced. Kucks v CSR Ltd [1996] IRCA 166; (1996) 66 IR 182; Amcor Limited v Construction, Forestry, Mining and Energy Union & Ors [2005] HCA 10; (2005) 214 ALR 56.

The claimant’s submissions
26 At its simplest, the claimant’s position is that once an employee works 1820 hours in a year, they are paid overtime at the SE hourly rate for time worked after 1820 hours irrespective of their employment classification or any change in their employment classification during the year.
27 That is, it is a straightforward overtime worked, overtime paid and paid at the SE hourly rate after 1820 hours have been worked in a year.
28 While there is a difference between Salaried Employees and Non-Salaried Employees in that Non-Salaried Employees’ hours are based on actual hours worked and Salaried Employees’ hours include leave and other payment arrangements, this is not relevant to the Claim. What is relevant is that overtime is payable after all employees work 1820 hours, howsoever calculated.
29 The claimant refers to the respondent’s adopted position and says this is not supported by the plain and unambiguous words in EA 2020 and Part B, cl 6. That is, the entitlement to overtime is not qualified in EA 2020 or Part B, cl 6 in the way suggested by the respondent.
30 The claimant submits that it makes no contextual or industrial sense that an employee who works more than 1820 hours in a year is not paid overtime because of a change in their employment classification during the year, which the respondent (erroneously) suggests resets the number of hours before overtime is payable relevant to the particular classification.
The respondent’s submissions
31 The respondent refers to the claimant’s submissions and says the claimant relies upon some (unidentified and) unstated mechanism in EA 2020 by which hours an employee works as a Non-Salaried Employee count towards the assessment of hours worked as a Salaried Employee for the purposes of an entitlement to overtime.
32 The respondent says the plain and ordinary meaning of Part B, cl 6 of EA 2020 is that there are separate and distinct entitlements for each category of employee, and there is no mechanism for hours worked as a Non-Salaried Employee to be taken into account for the purposes of overtime referrable to a Salaried Employee.
33 That separate and distinct entitlement arises from the AAH requirement for a Salaried Employee, whereas there is no such requirement for a Non-Salaried Employee. The effect of this is that for the purposes of calculating hours relevant to overtime, a Salaried Employee is required to achieve 1820 Worked Hours, whereas a Non-Salaried Employee is required to work more than 1820 hours. That is, a Salaried Employees’ hours are made up of time that includes time away from the workplace.
34 The respondent says this means the hours worked are not equivalent for the purposes of calculating overtime entitlement.
35 However, the respondent advised it pro ratas the hours required to be worked where an employee moves to a different category of employment (and/or presumably is employed after 1 July). That is, and by way of example, if an employee works nine months from 1 July to 28 February as a VSE (with no AAH) and thereafter is promoted to a PFSE (with AAH) and works the remaining three months of the Year in the new category, the respondent pro ratas the time for eligibility for overtime. In this example the PFSE would be required to work 25% of 1820 hours to be eligible for overtime in the remaining three months of the Year (or 455 hours). But the hours worked as a VSE in the preceding nine months would not count, irrespective of how many hours the employee worked as a VSE.
36 That is, an employee may have worked 1700 hours as a VSE or Non-Salaried Employee from 1 July to 28 February and, on the respondent’s submissions, if the employee was promoted to PFSE or Salaried Employee they would not be eligible for overtime until they had achieved 455 hours in the remainder of the Year. The total hours worked for the Year in this example is 2155.
37 The respondent accepts EA 2020 does not refer to this arrangement but says this is a matter of industry practice and adopts a common sense and fair approach consistent with the context of EA 2020.
38 The respondent refers to the aggregation of hours in Part B, cl 16 of EA 2020 as it relates to the application of a Northwest Allowance and says a similar clause could have been applied to Part B, cl 6 of EA 2020. The ‘conscious separation’ of categories of employees for the purpose of overtime entitlement is relevant and should be given effect to.
What is the preferred construction relevant to the payment of overtime?
EA 2020
39 EA 2020 (and other similar agreements) provide for a ‘hierarchy’ of employees with varying conditions applicable to the category of employee.
40 In summary, all categories of employees are engaged in accordance with EA 2020 and their employment terms are contained in Part A, cl 9 of EA 2020.
41 While FSE, PFSE, VSE and PVSE are defined as ‘Permanent Employees’, FSEs and PFSEs are paid a fixed salary and VSEs and PVSEs are irregularly engaged to work and paid a minimum salary. Clause 2.1 of EA 2020.

42 GWEs are not defined as ‘Permanent Employees’ and are irregularly engaged to work and paid a minimum salary. Clause 2.1 of EA 2020.

43 SEs are ostensibly casual employees paid a composite rate provided in Part B of EA 2020. Clauses 2.1 and 9.8 of EA 2020.

44 While the respondent is to ensure that there is fair and equal opportunity for work for all categories of employees, cl 10.2 of EA 2020 imposes a parallel allocation obligation for the categories of employees to achieve their respective minimum work requirements. That is, subject to skills, competencies etc, work is allocated so Salaried Employees achieve their AAH, and the Non-Salaried Employees achieve their minimum engagement within a fortnight. SE and labour hire are considered last in this hierarchy.
45 The respondent cannot use external labour hire to restrict achieving AAH or minimum earnings.
46 Salaried Employees have an AAH of 1820 hours. There is no AAH for Non-Salaried Employees.
47 The remuneration for Salaried Employees at the Port of Dampier is set out in a table in Part B, cl 2.1 of EA 2020. Relevant to Mr Gordon and the Disputed Period, the annual salary was $123,135.09. Pursuant to Part B, cl 2.2.1 of EA 2020, the minimum fortnightly payment for FSEs and PFSEs is 1/26 of $123,135.09 or $4,735.96 per fortnight (or approximately $67.65 per hour).
48 The composite hourly rate for Non-Salaried Employees at the Port of Dampier is set out in a table in Part B, cl 2.2.1. However, the minimum fortnightly guarantee payments for Non-Salaried Employees is set out in Part A, cl 9.6.4(a) and cl 9.7.4(b) of EA 2020.
49 The composite hourly rate for SEs is set out in a table in Part B, cl 2.3.1 of EA 2020.
50 All categories are entitled to be paid overtime where they achieve or work more than 1820 hours in a Year and are paid at the relevant SE rate provided in the table in Part B, cl 2.3.1 of EA 2020. Relevant to Mr Gordon and the Disputed Period, the overtime rate payable was $77.88 per hour.
51 Mr Gordon was paid for work done in the Disputed Period, but the rate paid was not $77.88 per hour.
52 There is a difference between the payment of overtime as it relates to Salaried and Non-Salaried Employees, albeit both categories must work more than 1820 hours from 1 July to 30 June:
· the 1820 hours for Salaried Employees comprise work undertaken, paid leave, training, public holidays and any other paid arrangement (that is; Worked Hours);
· the 1820 hours for Non-Salaried Employees comprises work only.
53 The respondent places emphasis on this difference having meaning in the context of the hierarchical structure of the categories of employees, particularly where the AAH required for Salaried Employees includes time away from the workplace.
54 However, the respondent does not clearly articulate what this meaning is beyond saying as a matter of practice it gives rise to an adjustment of hours where an employee could not meet the threshold overtime entitlement because they were promoted part way during a Year (and presumably this would apply if they were employed part way during a Year).
Determination on construction
55 For the following reasons, I do not accept the respondent’s position on the proper construction and application of Part B, cl 6:
· EA 2020 is silent on how employee overtime hours are treated when they transition through the employee categories;
· this silence extends to the respondent’s convention in applying a pro rata formula to calculate overtime hours for hours achieved for part of a Year;
· it is intended for Part A and Part B of EA 2020 to be read together, and it is only where an inconsistency arises that Part B prevails;
· the requirement, either through actual work hours or Worked Hours, is for employees to work 1820 hours (based on the historical application of a 35-hour working week averaged over a 12-month period), which then forms the basis for the salary and composite hourly rates in EA 2020: Part A, cl 11.4 of EA 2020;
· notwithstanding the inconsistent parts of Part A, cl 30 of EA 2020 does not apply to the Port of Dampier, the underlying premise is that upon Salaried and Non-Salaried Employees achieving or working 1820 hours, they are entitled to applicable overtime rates;
· this premise extends to Part B, cl 6 of EA 2020 with Salaried and Non-Salaried Employees achieving or working 1820 hours being entitled to applicable overtime rates;
· therefore, the threshold number of hours for the purpose of salary, composite hourly rate and overtime rate, irrespective of the employment category, is 1820 hours;
· the only difference between Salaried and Non-Salaried Employees for the purpose of overtime hours is the make-up of those hours;
· to the extent that Part B, cl 16 of EA 2020 offers an alternative approach, notably this clause specifically says the North-West Allowance is not an adjunct to salary and merely apportions the relevant allowance based on the number of hours worked in a Year to a maximum of 1820 hours;
· while the respondent’s convention of applying pro rata hours to an employee who commences employment part way through the Year may be considered a ‘fair’ approach, the application of the same convention to an employee who works all Year and changes category of employment during the Year, arguably, leads to an unfair or inconsistent result;
· that is, a Non-Salaried Employee who becomes a Salaried Employee part way through a Year may work more than 1820 hours in a Year than a Non-Salaried Employee or Salaried Employee who remains in the same category before being eligible for overtime;
· there is no basis or provision in EA 2020 to ‘reset’ hours for the purpose of determining overtime entitlements merely because there has been a change of category of employment. Further, there is no apparent prejudice to the respondent (or at least not one identified on the evidence) where the employee still needs to work or achieve 1820 hours before being entitled to overtime;
· nothing in EA 2020 or in the evidence demonstrates that the accumulation of overtime hours should occur in an arbitrary way; and
· a consistent approach is preferable. This consistent approach to overtime hours does not, in my view, erode the application of AAH to Salaried Employees where Salaried and Non-Salaried and SEs have separate and distinct terms of engagement and requirements as set out in EA 2020.
Conclusion
56 Accordingly, the preferred construction of Part B, cl 6 of EA 2020 is that submitted by the claimant, namely that Salaried and Non-Salaried Employees become entitled to overtime paid at the SE hourly rate at the time when they achieve or work the total of 1820 hours in a Year regardless of the category of employment during the Year.
57 In Mr Gordon’s case, in failing to pay him the applicable rate under Part B, cl 2 of EA 2020 for any overtime worked during the Disputed Period, I find the respondent has breached Part B, cl 2.3.1 when read with cl 6 of EA 2020.
58 Therefore, I find the respondent has contravened s 50 of the FWA.
59 The Disputed Period changed during the hearing. In addition, it was apparent the respondent paid Mr Gordon for work undertaken by him during the Disputed Period, just not at the SE rate set out in the table in Part B, cl 2.3.1 of EA 2020.
60 Having determined the claimant is successful on the issue of liability, I will hear further from the parties on the issue of quantum and make consequential programming orders in relation to penalty if this is still sought by the claimant.



D. SCADDAN
INDUSTRIAL MAGISTRATE




SCHEDULE I: Jurisdiction, Practice and Procedure of the Industrial Magistrates Court (WA)
Jurisdiction
[1] An employee, an employee organization or an inspector may apply to an eligible state or territory court for orders regarding a contravention of the civil penalty provisions identified in s 539(2) of the FWA.
[2] The IMC, being a Court constituted by an industrial magistrate, is ‘an eligible State or Territory court’: FWA, s 12 (see definitions of ‘eligible State or Territory court’ and ‘magistrates court’); Industrial Relations Act 1979 (WA), s 81 and s 81B.
[3] The application to the IMC must be made within six years after the day on which the contravention of the civil penalty provision occurred: FWA, s 544.
[4] The civil penalty provisions identified in s 539 of the FWA include the terms of an enterprise agreement where the agreement applies to give an entitlement to a person and to impose an obligation upon a respondent employer: FWA, s 51(2). The agreement applies if it covers the employee or the employee organisation and the employer, the agreement is in operation and no other provision of the FWA provides that the agreement does not apply: FWA, s 52(1) (when read with s 53 of the FWA).
[5] An obligation upon an ‘employer’ covered by an agreement is an obligation upon a ‘national system employer’ and that term, relevantly, is defined to include ‘a corporation to which paragraph 51(xx) of the Constitution applies’: FWA, s 42, s 53, s 14 and s 12. An entitlement of an employee covered by an agreement is an entitlement of an ‘employee’ who is a ‘national system employee’ and that term, relevantly, is defined to include ‘an individual so far as he or she is employed … by a national system employer’: FWA, s 42, s 53 and s 13.
Contravention
[6] Where the IMC is satisfied that there has been a contravention of a civil penalty provision, the Court may make orders for an employer to pay to an employee an amount that the employer was required to pay under the modern award: FWA, s 545(3)(a).
[7] The civil penalty provisions identified in s 539 of the FWA include:
· Contravening a term of an enterprise agreement: FWA, s 50.
[8] An ‘employer’ has the statutory obligations noted above if the employer is a ‘national system employer’ and that term, relevantly, is defined to include ‘a corporation to which paragraph 51(xx) of the Constitution applies’: FWA, s 14 and s 12. The obligation is to an ‘employee’ who is a ‘national system employee’ and that term, relevantly, is defined to include ‘an individual so far as he or she is employed … by a national system employer’: FWA, s 13
[9] Where the IMC is satisfied that there has been a contravention of a civil penalty provision, the Court may make orders for:
· An employer to pay to an employee an amount that the employer was required to pay under the FWA: FWA, s 545(3).
· A person to pay a pecuniary penalty: FWA, s 546.
[10] In contrast to the powers of the Federal Court and the Federal Circuit Court, an eligible State or Territory court has no power to order payment by an entity other than the employer of amounts that the employer was required to pay under the FWA. For example, the IMC has no power to order that the director of an employer company make payments of amounts payable under the FWA: Mildren v Gabbusch [2014] SAIRC 15.
Burden and standard of proof
[11] In an application under the FWA, the party making an allegation to enforce a legal right or to relieve the party of a legal obligation carries the burden of proving the allegation. The standard of proof required to discharge the burden is proof ‘on the balance of probabilities’. In Miller v Minister of Pensions [1947] 2 All ER 372, 374, Lord Denning explained the standard in the following terms:
It must carry a reasonable degree of probability but not so high as is required in a criminal case. If the evidence is such that the tribunal can say: ‘We think it more probable than not,’ the burden is discharged, but, if the probabilities are equal, it is not.
[12] In the context of an allegation of the breach of a civil penalty provision of the Act it is also relevant to recall the observation of Dixon J said in Briginshaw v Briginshaw [1938] HCA 34; 60 CLR 336:
The seriousness of an allegation made, the inherent unlikelihood of an occurrence of a given description, or the gravity of the consequences flowing from a particular finding are considerations which must affect the answer to the question whether the issue has been proved to the reasonable satisfaction of the tribunal. In such matters “reasonable satisfaction” should not be produced by inexact proofs, indefinite testimony, or indirect inferences. (362)

SCHEDULE II: Construction of Industrial Instruments
[1] This case involves, in part, construing industrial agreements. The relevant principles to be applied when interpreting an industrial instrument are set out by the Full Bench of the Western Australian Industrial Relations Commission in Fedec v The Minister for Corrective Services [2017] WAIRC 00828; 97 WAIG 1595 [21] - [23].
[2] In summary (omitting citations), the Full Bench stated:
The general principles that apply to the construction of contracts and other instruments also apply to the construction of an industrial agreement;
(1) The primary duty of the court in construing an instrument is to endeavour to discover the intention of the parties as embodied in the words they have used in the instrument;
(2) It is the objectively ascertained intention of the parties, as it is expressed in the instrument, that matters; not the parties' subjective intentions. The meaning of the terms of an instrument is to be determined by what a reasonable person would have understood the terms to mean;
(3) The objectively ascertained purpose and objective of the transaction that is the subject of a commercial instrument may be taken into account in construing that instrument. This may invite attention to the genesis of the transaction, its background and context;
(4) The apparent purpose or object of the relevant transaction can be inferred from the express and implied terms of the instrument, and from any admissible evidence of surrounding circumstances;
(5) An instrument should be construed so as to avoid it making commercial nonsense or giving rise to commercial inconvenience. However, it must be borne in mind that business common sense may be a topic on which minds may differ’;
(6) An instrument should be construed as a whole. A construction that makes the various parts of an instrument harmonious is preferable. If possible, each part of an instrument should be construed so as to have some operation; and
(7) Industrial agreements are usually not drafted with careful attention to form by persons who are experienced in drafting documents that have legal effect.
[3] The following is also relevant:
· Ascertaining the intention of the parties begins with a consideration of the ordinary meaning of the words of the instrument. Ascertaining the ordinary meaning of the words requires attention to the context and purpose of the clause being construed. City of Wanneroo at [53] - [57] (French J).
· Context may appear from the text of the instrument taken as a whole, its arrangement and the place of the provision under construction. The context includes the history of the instrument and the legal background against which the instrument was made and in which it was to operate. City of Wanneroo [53]  [57] (French J); Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Excelior Pty Ltd [2013] FCA 638 [28]  [30] (Katzmann J).




Construction, Forestry and Maritime Employees Union -v- Qube Ports Pty Ltd

INDUSTRIAL MAGISTRATES COURT OF WESTERN AUSTRALIA

 

 

CITATION

:

2024 WAIRC 01031

 

 

 

CORAM

:

Industrial Magistrate D. Scaddan

 

 

 

HEARD

:

Thursday, 10 October 2024

 

 

 

DELIVERED

:

THURSDAY, 12 december 2024

 

 

 

FILE NO.

:

M 2 OF 2024

 

 

 

BETWEEN

:

Construction, Forestry and Maritime Employees Union

 

 

CLAIMANT

 

 

 

 

 

AND

 

 

 

 

 

Qube Ports Pty Ltd

 

 

RESPONDENT


CatchWords : INDUSTRIAL LAW – Construction of a clause of an enterprise agreement – How the relevant overtime clause applies to a full-time salaried employee – Determination of when overtime rates apply

Legislation : Fair Work Act 2009 (Cth)

Industrial Relations Act 1979 (WA)

Instrument : Qube Ports Pty Ltd Port of Dampier Enterprise Agreement 2020

Case(s) referred

to in reasons: : City of Wanneroo v Australian Municipal, Administrative, Clerical and Services Union [2006] FCA 813; 153 IR 426

Transport Workers’ Union of Australia v Linfox Australia Pty Ltd [2014] FCA 829; (2014) 318 ALR 54

Kucks v CSR Ltd [1996] IRCA 166; (1996) 66 IR 182

Amcor Limited v Construction, Forestry, Mining and Energy Union & Ors [2005] HCA 10; (2005) 214 ALR 56

Mildren v Gabbusch [2014] SAIRC 15

Miller v Minister of Pensions [1947] 2 All ER 372

Briginshaw v Briginshaw [1938] HCA 34; 60 CLR 336

Fedec v The Minister for Corrective Services [2017] WAIRC 00828; 97 WAIG 1595

Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Excelior Pty Ltd [2013] FCA 638

 

Result : Claim proven

Representation:

Claimant : Mr K. Sneddon (of counsel)

Respondent : Mr J. McLean (of counsel), as instructed by Allens

 


 

 

REASONS FOR DECISION

Introduction

1         On 18 January 2024, the Construction, Forestry and Maritime Employees Union (the claimant) lodged a claim alleging Qube Ports Pty Ltd (the respondent) failed to pay an affected worker, Wayne Gordon (Mr Gordon), overtime when they had completed the required annualised hours of 1820 hours worked in a year (the Claim).

2         In failing to pay overtime, the claimant alleges the respondent has contravened s 50 of the Fair Work Act 2009 (Cth) (FWA) in that the respondent has contravened Part B, cl 6.1 of the Qube Ports Pty Ltd Port of Dampier Enterprise Agreement 2020 (EA 2020).

3         The claimant claims:

  • $19,076.41 in overtime payments to Mr Gordon;
  • interest on the amount claimed; and
  • payment of a civil penalty to be paid to the claimant.

4         The respondent denies the alleged contravention and says:

  • The controversy between the parties involves interpreting clauses in EA 2020 relevant to overtime for a full-time salaried employee (FSE) to determine when (or if) overtime applies after a FSE has achieved the required annualised hours of 1820 hours.

5         Schedule I of these reasons outlines the jurisdiction, standard of proof and practice and procedure of the Industrial Magistrates Court (IMC).

6         Schedule II of these reasons outlines the principles applicable to construction of an industrial agreement.

Agreed Facts

7         The parties provided a statement of agreed facts.

8         In summary, the claimant has standing to commence the Claim, and the respondent is a national system employer under the FWA. EA 2020 covers and applies to the parties and to Mr Gordon from 25 August 2021 after the Fair Work Commission approved it on 18 August 2021.

9         Mr Gordon is a national system employee who commenced employment with the respondent at the Port of Dampier on or around 14 February 2011, and worked in the following categories of employment under EA 2020 and its previous iterations:

  • Supplementary Employee (SE) from 14 February 2011 to 21 May 2017;
  • Guaranteed Wage Employee (GWE) from 22 May 2017 to 31 October 2021;
  • Variable Salary Employee (VSE) from 1 November 2021 to 23 January 2022;
  • Provisional Full Time Salaried Employee (PFSE) from 24 January 2022 to 7 August 2022; and
  • FSE from 8 August 2022 onwards.

10      For the remainder of these reasons, where reference is made to both FSE and PFSE, they will be referred to as Salaried Employees and where reference is made to all VSE, PVSE and GWE, they will be referred to as Non-Salaried Employees.

11      Initially, there was an agreed period in dispute for which the claimant said Mr Gordon was owed overtime payments. However, during the hearing the period in dispute changed based on known payments made to Mr Gordon as outlined in his witness statement dated 1 August 2024[i] (Gordon Statement) where he states from:

12      The new agreed disputed period for which the claimant says Mr Gordon was not paid the correct overtime rate is 16 April 2022 to 14 May 2022 (the Disputed Period).

13      For the avoidance of doubt, it is not that Mr Gordon was not paid during the Disputed Period, but the claimant says that he should have been paid at the relevant SE hourly rate for the time worked during this period.

14      Accordingly, following this decision there remains a residual amount in dispute, which, by agreement, will be resolved if the claimant is successful on the issue of liability of the respondent for overtime payments for the Disputed Period.

Other Evidence

15      The claimant relied upon the Gordon Statement, of which the relevant parts have been referred to.

16      The respondent relied upon a witness statement by Daniel Ortiz (Mr Ortiz) lodged on 2 September 2024 (Ortiz Statement).[v]

17      Mr Ortiz is employed by Qube Holdings Pty Ltd as General Manager – Industrial Relations and he outlines his role in this position at [3] of the Ortiz Statement. Relevant to the Disputed Period, Mr Ortiz states Mr Gordon worked 987.5 hours as a PFSE from 24 January 2022 to 30 June 2022.

18      Mr Ortiz refers to Part A, cl 9.1.1(a) and cl 9.2.1(a) of EA 2020, which specifies the required annualised hours requirement for Salaried Employees being 1820 hours (referred to as Annualised Accumulated Hours or AAH[vi]).

19      Mr Ortiz states that it is the respondent’s practice that only hours worked in the position of Salaried Employees are counted towards the AAH.[vii]

EA 2020

20      Overtime at the Port of Dampier is set out in Part B, cl 6:

6.1     FSEs and PFSEs are entitled to overtime paid at the Supplementary Employees hourly rate when they have achieved 1820 Worked Hours in a Year.

6.2     VSEs, PVSEs and GWEs who work more than 1820 hours in a Year will be entitled to be paid overtime at the Supplementary Employees hourly rate.

21      ‘Year’ means 1 July to 30 June.[viii]

22      ‘Worked Hours’ includes any period of paid leave, training, public holidays and any other paid arrangement contained in EA 2020.[ix]

The Parties’ Contentions

23      The parties agree EA 2020 is in two parts, Part A and Part B. Part A contains terms generic to the respondent’s national operations, including at the Port of Dampier, whereas Part B contains terms specific to employees working at the Port of Dampier.[x]

24      Part A and Part B are to be read together, although if there is an inconsistency between the two parts, Part B prevails to the extent of any inconsistency.[xi] Similarly, EA 2020 is to be read with various industry awards where EA 2020 prevails to the extent of any inconsistency.[xii]

25      The principles applicable to the interpretation of industrial agreements are well known. In summary, the interpretation of an industrial instrument begins with consideration of the natural and ordinary meaning of the words used.[xiii] An industrial instrument is to be interpreted in light of its industrial context and purpose and must not be interpreted in a vacuum divorced from industrial realities.[xiv] An industrial agreement must make sense according to the basic conventions of English language.[xv] The circumstances of the origin and use of a clause is relevant to an understanding of what is likely to have been intended by its use.[xvi] Narrow and pedantic approaches to the interpretation of an industrial agreement are misplaced.[xvii]

The claimant’s submissions

26      At its simplest, the claimant’s position is that once an employee works 1820 hours in a year, they are paid overtime at the SE hourly rate for time worked after 1820 hours irrespective of their employment classification or any change in their employment classification during the year.

27      That is, it is a straightforward overtime worked, overtime paid and paid at the SE hourly rate after 1820 hours have been worked in a year.

28      While there is a difference between Salaried Employees and Non-Salaried Employees in that Non-Salaried Employees’ hours are based on actual hours worked and Salaried Employees’ hours include leave and other payment arrangements, this is not relevant to the Claim. What is relevant is that overtime is payable after all employees work 1820 hours, howsoever calculated.

29      The claimant refers to the respondent’s adopted position and says this is not supported by the plain and unambiguous words in EA 2020 and Part B, cl 6. That is, the entitlement to overtime is not qualified in EA 2020 or Part B, cl 6 in the way suggested by the respondent.

30      The claimant submits that it makes no contextual or industrial sense that an employee who works more than 1820 hours in a year is not paid overtime because of a change in their employment classification during the year, which the respondent (erroneously) suggests resets the number of hours before overtime is payable relevant to the particular classification.

The respondent’s submissions

31      The respondent refers to the claimant’s submissions and says the claimant relies upon some (unidentified and) unstated mechanism in EA 2020 by which hours an employee works as a Non-Salaried Employee count towards the assessment of hours worked as a Salaried Employee for the purposes of an entitlement to overtime.

32      The respondent says the plain and ordinary meaning of Part B, cl 6 of EA 2020 is that there are separate and distinct entitlements for each category of employee, and there is no mechanism for hours worked as a Non-Salaried Employee to be taken into account for the purposes of overtime referrable to a Salaried Employee.

33      That separate and distinct entitlement arises from the AAH requirement for a Salaried Employee, whereas there is no such requirement for a Non-Salaried Employee. The effect of this is that for the purposes of calculating hours relevant to overtime, a Salaried Employee is required to achieve 1820 Worked Hours, whereas a Non-Salaried Employee is required to work more than 1820 hours. That is, a Salaried Employees’ hours are made up of time that includes time away from the workplace.

34      The respondent says this means the hours worked are not equivalent for the purposes of calculating overtime entitlement.

35      However, the respondent advised it pro ratas the hours required to be worked where an employee moves to a different category of employment (and/or presumably is employed after 1 July). That is, and by way of example, if an employee works nine months from 1 July to 28 February as a VSE (with no AAH) and thereafter is promoted to a PFSE (with AAH) and works the remaining three months of the Year in the new category, the respondent pro ratas the time for eligibility for overtime. In this example the PFSE would be required to work 25% of 1820 hours to be eligible for overtime in the remaining three months of the Year (or 455 hours). But the hours worked as a VSE in the preceding nine months would not count, irrespective of how many hours the employee worked as a VSE.

36      That is, an employee may have worked 1700 hours as a VSE or Non-Salaried Employee from 1 July to 28 February and, on the respondent’s submissions, if the employee was promoted to PFSE or Salaried Employee they would not be eligible for overtime until they had achieved 455 hours in the remainder of the Year. The total hours worked for the Year in this example is 2155.

37      The respondent accepts EA 2020 does not refer to this arrangement but says this is a matter of industry practice and adopts a common sense and fair approach consistent with the context of EA 2020.

38      The respondent refers to the aggregation of hours in Part B, cl 16 of EA 2020 as it relates to the application of a Northwest Allowance and says a similar clause could have been applied to Part B, cl 6 of EA 2020. The ‘conscious separation’ of categories of employees for the purpose of overtime entitlement is relevant and should be given effect to.

What is the preferred construction relevant to the payment of overtime?

EA 2020

39      EA 2020 (and other similar agreements) provide for a ‘hierarchy’ of employees with varying conditions applicable to the category of employee.

40      In summary, all categories of employees are engaged in accordance with EA 2020 and their employment terms are contained in Part A, cl 9 of EA 2020.

41      While FSE, PFSE, VSE and PVSE are defined as ‘Permanent Employees’, FSEs and PFSEs are paid a fixed salary and VSEs and PVSEs are irregularly engaged to work and paid a minimum salary.[xviii]

42      GWEs are not defined as ‘Permanent Employees’ and are irregularly engaged to work and paid a minimum salary.[xix]

43      SEs are ostensibly casual employees paid a composite rate provided in Part B of EA 2020.[xx]

44      While the respondent is to ensure that there is fair and equal opportunity for work for all categories of employees, cl 10.2 of EA 2020 imposes a parallel allocation obligation for the categories of employees to achieve their respective minimum work requirements. That is, subject to skills, competencies etc, work is allocated so Salaried Employees achieve their AAH, and the Non-Salaried Employees achieve their minimum engagement within a fortnight. SE and labour hire are considered last in this hierarchy.

45      The respondent cannot use external labour hire to restrict achieving AAH or minimum earnings.

46      Salaried Employees have an AAH of 1820 hours. There is no AAH for Non-Salaried Employees.

47      The remuneration for Salaried Employees at the Port of Dampier is set out in a table in Part B, cl 2.1 of EA 2020. Relevant to Mr Gordon and the Disputed Period, the annual salary was $123,135.09. Pursuant to Part B, cl 2.2.1 of EA 2020, the minimum fortnightly payment for FSEs and PFSEs is 1/26 of $123,135.09 or $4,735.96 per fortnight (or approximately $67.65 per hour).

48      The composite hourly rate for Non-Salaried Employees at the Port of Dampier is set out in a table in Part B, cl 2.2.1. However, the minimum fortnightly guarantee payments for Non-Salaried Employees is set out in Part A, cl 9.6.4(a) and cl 9.7.4(b) of EA 2020.

49      The composite hourly rate for SEs is set out in a table in Part B, cl 2.3.1 of EA 2020.

50      All categories are entitled to be paid overtime where they achieve or work more than 1820 hours in a Year and are paid at the relevant SE rate provided in the table in Part B, cl 2.3.1 of EA 2020. Relevant to Mr Gordon and the Disputed Period, the overtime rate payable was $77.88 per hour.

51      Mr Gordon was paid for work done in the Disputed Period, but the rate paid was not $77.88 per hour.

52      There is a difference between the payment of overtime as it relates to Salaried and Non-Salaried Employees, albeit both categories must work more than 1820 hours from 1 July to 30 June:

  • the 1820 hours for Salaried Employees comprise work undertaken, paid leave, training, public holidays and any other paid arrangement (that is; Worked Hours);
  • the 1820 hours for Non-Salaried Employees comprises work only.

53      The respondent places emphasis on this difference having meaning in the context of the hierarchical structure of the categories of employees, particularly where the AAH required for Salaried Employees includes time away from the workplace.

54      However, the respondent does not clearly articulate what this meaning is beyond saying as a matter of practice it gives rise to an adjustment of hours where an employee could not meet the threshold overtime entitlement because they were promoted part way during a Year (and presumably this would apply if they were employed part way during a Year).

Determination on construction

55      For the following reasons, I do not accept the respondent’s position on the proper construction and application of Part B, cl 6:

  • EA 2020 is silent on how employee overtime hours are treated when they transition through the employee categories;
  • this silence extends to the respondent’s convention in applying a pro rata formula to calculate overtime hours for hours achieved for part of a Year;
  • it is intended for Part A and Part B of EA 2020 to be read together, and it is only where an inconsistency arises that Part B prevails;
  • the requirement, either through actual work hours or Worked Hours, is for employees to work 1820 hours (based on the historical application of a 35-hour working week averaged over a 12-month period), which then forms the basis for the salary and composite hourly rates in EA 2020: Part A, cl 11.4 of EA 2020;
  • notwithstanding the inconsistent parts of Part A, cl 30 of EA 2020 does not apply to the Port of Dampier, the underlying premise is that upon Salaried and Non-Salaried Employees achieving or working 1820 hours, they are entitled to applicable overtime rates;
  • this premise extends to Part B, cl 6 of EA 2020 with Salaried and Non-Salaried Employees achieving or working 1820 hours being entitled to applicable overtime rates;
  • therefore, the threshold number of hours for the purpose of salary, composite hourly rate and overtime rate, irrespective of the employment category, is 1820 hours;
  • the only difference between Salaried and Non-Salaried Employees for the purpose of overtime hours is the make-up of those hours;
  • to the extent that Part B, cl 16 of EA 2020 offers an alternative approach, notably this clause specifically says the North-West Allowance is not an adjunct to salary and merely apportions the relevant allowance based on the number of hours worked in a Year to a maximum of 1820 hours;
  • while the respondent’s convention of applying pro rata hours to an employee who commences employment part way through the Year may be considered a ‘fair’ approach, the application of the same convention to an employee who works all Year and changes category of employment during the Year, arguably, leads to an unfair or inconsistent result;
  • that is, a Non-Salaried Employee who becomes a Salaried Employee part way through a Year may work more than 1820 hours in a Year than a Non-Salaried Employee or Salaried Employee who remains in the same category before being eligible for overtime;
  • there is no basis or provision in EA 2020 to ‘reset’ hours for the purpose of determining overtime entitlements merely because there has been a change of category of employment. Further, there is no apparent prejudice to the respondent (or at least not one identified on the evidence) where the employee still needs to work or achieve 1820 hours before being entitled to overtime;
  • nothing in EA 2020 or in the evidence demonstrates that the accumulation of overtime hours should occur in an arbitrary way; and
  • a consistent approach is preferable. This consistent approach to overtime hours does not, in my view, erode the application of AAH to Salaried Employees where Salaried and Non-Salaried and SEs have separate and distinct terms of engagement and requirements as set out in EA 2020.

Conclusion

56      Accordingly, the preferred construction of Part B, cl 6 of EA 2020 is that submitted by the claimant, namely that Salaried and Non-Salaried Employees become entitled to overtime paid at the SE hourly rate at the time when they achieve or work the total of 1820 hours in a Year regardless of the category of employment during the Year.

57      In Mr Gordon’s case, in failing to pay him the applicable rate under Part B, cl 2 of EA 2020 for any overtime worked during the Disputed Period, I find the respondent has breached Part B, cl 2.3.1 when read with cl 6 of EA 2020.

58      Therefore, I find the respondent has contravened s 50 of the FWA.

59      The Disputed Period changed during the hearing. In addition, it was apparent the respondent paid Mr Gordon for work undertaken by him during the Disputed Period, just not at the SE rate set out in the table in Part B, cl 2.3.1 of EA 2020.

60      Having determined the claimant is successful on the issue of liability, I will hear further from the parties on the issue of quantum and make consequential programming orders in relation to penalty if this is still sought by the claimant.

 

 

 

D. SCADDAN

INDUSTRIAL MAGISTRATE

 


 

 


SCHEDULE I: Jurisdiction, Practice and Procedure of the Industrial Magistrates Court (WA)

Jurisdiction

[1]     An employee, an employee organization or an inspector may apply to an eligible state or territory court for orders regarding a contravention of the civil penalty provisions identified in s 539(2) of the FWA.

[2]     The IMC, being a Court constituted by an industrial magistrate, is ‘an eligible State or Territory court’: FWA, s 12 (see definitions of ‘eligible State or Territory court’ and ‘magistrates court’); Industrial Relations Act 1979 (WA), s 81 and s 81B.

[3]     The application to the IMC must be made within six years after the day on which the contravention of the civil penalty provision occurred: FWA, s 544.

[4]     The civil penalty provisions identified in s 539 of the FWA include the terms of an enterprise agreement where the agreement applies to give an entitlement to a person and to impose an obligation upon a respondent employer: FWA, s 51(2). The agreement applies if it covers the employee or the employee organisation and the employer, the agreement is in operation and no other provision of the FWA provides that the agreement does not apply: FWA, s 52(1) (when read with s 53 of the FWA).

[5]     An obligation upon an ‘employer’ covered by an agreement is an obligation upon a ‘national system employer’ and that term, relevantly, is defined to include ‘a corporation to which paragraph 51(xx) of the Constitution applies’: FWA, s 42, s 53, s 14 and s 12. An entitlement of an employee covered by an agreement is an entitlement of an ‘employee’ who is a ‘national system employee’ and that term, relevantly, is defined to include ‘an individual so far as he or she is employed … by a national system employer’: FWA, s 42, s 53 and s 13.

Contravention

[6]     Where the IMC is satisfied that there has been a contravention of a civil penalty provision, the Court may make orders for an employer to pay to an employee an amount that the employer was required to pay under the modern award: FWA, s 545(3)(a).

[7]     The civil penalty provisions identified in s 539 of the FWA include:

  • Contravening a term of an enterprise agreement: FWA, s 50.

[8]     An ‘employer’ has the statutory obligations noted above if the employer is a ‘national system employer’ and that term, relevantly, is defined to include ‘a corporation to which paragraph 51(xx) of the Constitution applies’: FWA, s 14 and s 12. The obligation is to an ‘employee’ who is a ‘national system employee’ and that term, relevantly, is defined to include ‘an individual so far as he or she is employed … by a national system employer’: FWA, s 13

[9]     Where the IMC is satisfied that there has been a contravention of a civil penalty provision, the Court may make orders for:

  • An employer to pay to an employee an amount that the employer was required to pay under the FWA: FWA, s 545(3).
  • A person to pay a pecuniary penalty: FWA, s 546.

[10]   In contrast to the powers of the Federal Court and the Federal Circuit Court, an eligible State or Territory court has no power to order payment by an entity other than the employer of amounts that the employer was required to pay under the FWA. For example, the IMC has no power to order that the director of an employer company make payments of amounts payable under the FWA: Mildren v Gabbusch [2014] SAIRC 15.

Burden and standard of proof

[11]   In an application under the FWA, the party making an allegation to enforce a legal right or to relieve the party of a legal obligation carries the burden of proving the allegation. The standard of proof required to discharge the burden is proof ‘on the balance of probabilities’. In Miller v Minister of Pensions [1947] 2 All ER 372, 374, Lord Denning explained the standard in the following terms:

It must carry a reasonable degree of probability but not so high as is required in a criminal case. If the evidence is such that the tribunal can say: ‘We think it more probable than not,’ the burden is discharged, but, if the probabilities are equal, it is not.

[12]   In the context of an allegation of the breach of a civil penalty provision of the Act it is also relevant to recall the observation of Dixon J said in Briginshaw v Briginshaw [1938] HCA 34; 60 CLR 336:

The seriousness of an allegation made, the inherent unlikelihood of an occurrence of a given description, or the gravity of the consequences flowing from a particular finding are considerations which must affect the answer to the question whether the issue has been proved to the reasonable satisfaction of the tribunal. In such matters “reasonable satisfaction” should not be produced by inexact proofs, indefinite testimony, or indirect inferences. (362)


SCHEDULE II: Construction of Industrial Instruments

[1]     This case involves, in part, construing industrial agreements. The relevant principles to be applied when interpreting an industrial instrument are set out by the Full Bench of the Western Australian Industrial Relations Commission in Fedec v The Minister for Corrective Services [2017] WAIRC 00828; 97 WAIG 1595 [21] - [23].

[2]     In summary (omitting citations), the Full Bench stated:

The general principles that apply to the construction of contracts and other instruments also apply to the construction of an industrial agreement;

(1)     The primary duty of the court in construing an instrument is to endeavour to discover the intention of the parties as embodied in the words they have used in the instrument;

(2)     It is the objectively ascertained intention of the parties, as it is expressed in the instrument, that matters; not the parties' subjective intentions. The meaning of the terms of an instrument is to be determined by what a reasonable person would have understood the terms to mean;

(3)     The objectively ascertained purpose and objective of the transaction that is the subject of a commercial instrument may be taken into account in construing that instrument. This may invite attention to the genesis of the transaction, its background and context;

(4)     The apparent purpose or object of the relevant transaction can be inferred from the express and implied terms of the instrument, and from any admissible evidence of surrounding circumstances;

(5)     An instrument should be construed so as to avoid it making commercial nonsense or giving rise to commercial inconvenience. However, it must be borne in mind that business common sense may be a topic on which minds may differ’;

(6)     An instrument should be construed as a whole. A construction that makes the various parts of an instrument harmonious is preferable. If possible, each part of an instrument should be construed so as to have some operation; and

(7)     Industrial agreements are usually not drafted with careful attention to form by persons who are experienced in drafting documents that have legal effect.

[3]     The following is also relevant:

  • Ascertaining the intention of the parties begins with a consideration of the ordinary meaning of the words of the instrument. Ascertaining the ordinary meaning of the words requires attention to the context and purpose of the clause being construed. City of Wanneroo at [53] - [57] (French J).
  • Context may appear from the text of the instrument taken as a whole, its arrangement and the place of the provision under construction. The context includes the history of the instrument and the legal background against which the instrument was made and in which it was to operate. City of Wanneroo [53]  [57] (French J); Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Excelior Pty Ltd [2013] FCA 638 [28]  [30] (Katzmann J).