MA000038 - Decision - 12 Mar 2014

[2014] FWCFB 1573

FAIR WORK COMMISSION

DECISION


Fair Work Act 2009

s 604 - Appeal of decisions

Transport Workers' Union of Australia
(C2014/2553)

Road Transport Industry

DEPUTY PRESIDENT SAMS
DEPUTY PRESIDENT LAWRENCE
COMMISSIONER CARGILL

SYDNEY,12 MARCH 2014

Appeal against decision [2013] FWC 9805 and Determination [PR546558] of Senior Deputy President Harrison - permission to appeal - Two Yearly Review of Modern Awards - Item 6,Schedule 5,Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 - Road Transport and Distribution Award 2010 - jurisdictional error - principles of award construction - subjective view or recollection - procedural unfairness - permission to appeal refused - appeal dismissed.

Introduction

[1] This decision concerns an amended application,under s 604 of the Fair Work Act 2009 (the ‘Act’) filed by the Transport Workers’Union of Australia (the ‘appellant’or the ‘Union’) for permission to appeal and,if permission is granted,an appeal against a decision (Modern Awards Review 2012 - Road Transport and Distribution Award 2010 [2013] FWC 9805) and Determination [PR546558] of Her Honour,Senior Deputy President Harrison which varied the Road Transport and Distribution Award 2010 [MA000038] (the ‘Modern Award’). Her Honour’s decision arose from the Fair Work Commission’s (the ‘Commission’) Two Yearly Review of Modern Awards as provided for under Item 6,Schedule 5 of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 (the ‘Transitional Act’).

[2] By way of background,Her Honour’s review commenced in March 2012 after eight applications to vary the Modern Award were filed by various employer organisations,transport employers,the appellant and the National Union of Workers. Following some thirteen conferences between the parties - about half of which were chaired by Her Honour - a number of applications were agreed,not pressed and withdrawn or remained to be determined by Her Honour. Of the sixteen variations to the Award made by Her Honour in the Determination,only one discrete issue is the subject of this appeal;namely,the rate of pay to be payable for meal breaks after ordinary hours and before overtime is worked.

[3] The Union filed a Notice of Appeal on 6 January 2014,an amended notice of appeal on 13 January 2014 and a further amended notice of appeal on 5 February 2014. An application for a stay of Her Honour’s Determination to vary the Award was granted by Sams DP on 30 January 2014.

[4] At the hearing of the appeal on 21 February 2014,Mr M Gibian of Counsel sought and was granted permission to appear under s 596 of the Act. The following employer organisations and one individual transport company provided written submissions supplemented by oral submissions:

    •Australian Industry Group (AIG)
    •Australian Federation of Employers and Industries (AFEI)
    •Australian Road Transport Industrial Organisation (ARTIO)
    •Australian Business Industrial (ABI)
    •Followmont Transport Pty Ltd

[5] Unsurprisingly,all the employer parties opposed permission to appeal being granted by the Full Bench and the substantive appeal. The National Union of Workers supported the appellant’s submissions but did not attend the hearing.

Two Yearly Review of Modern Awards

[6] Item 6,Schedule 5 of the Transitional Act is expressed as follows:

    6 Review of all modern awards (other than modern enterprise awards and State reference public sector modern awards) after first 2 years

    (1) As soon as practicable after the second anniversary of the FW (safety net provisions) commencement day,FWA must conduct a review of all modern awards,other than modern enterprise awards and State reference public sector modern awards.

    (2) In the review,FWA must consider whether the modern awards:

      (a) achieve the modern awards objective;and

      (b) are operating effectively,without anomalies or technical problems arising from the Part 10A award modernisation process.

    (2A) The review must be such that each modern award is reviewed in its own right. However,this does not prevent FWA from reviewing 2 or more modern awards at the same time.

    (3) FWA may make a determination varying any of the modern awards in any way that FWA considers appropriate to remedy any issues identified in the review.

    (4) The modern awards objective applies to FWA making a variation under this item,and the minimum wages objective also applies if the variation relates to modern award minimum wages.

    (5) FWA may advise persons or bodies about the review in any way FWA considers appropriate.

    (6) Section 625 of the FW Act (which deals with delegation by the President of functions and powers of FWA) has effect as if subsection (2) of that section included a reference to FWA’s powers under subitem (5).’

[7] The Modern Award Objective is found at s 134 of the Act and is expressed as follows:

    134 The modern awards objective

    What is the modern awards objective?

    (1) The FWC must ensure that modern awards,together with the National Employment Standards,provide a fair and relevant minimum safety net of terms and conditions,taking into account:

      (a) relative living standards and the needs of the low paid;and

      (b) the need to encourage collective bargaining;and

      (c) the need to promote social inclusion through increased workforce participation;and

      (d) the need to promote flexible modern work practices and the efficient and productive performance of work;and

      (da) the need to provide additional remuneration for:

        (i) employees working overtime;or

        (ii) employees working unsocial,irregular or unpredictable hours;or

        (iii) employees working on weekends or public holidays;or

        (iv) employees working shifts;and

      (e) the principle of equal remuneration for work of equal or comparable value;and

      (f) the likely impact of any exercise of modern award powers on business,including on productivity,employment costs and the regulatory burden;and

      (g) the need to ensure a simple,easy to understand,stable and sustainable modern award system for Australia that avoids unnecessary overlap of modern awards;and

      (h) the likely impact of any exercise of modern award powers on employment growth,inflation and the sustainability,performance and competitiveness of the national economy.

    This is the modern awards objective.

    When does the modern awards objective apply?

    (2) The modern awards objective applies to the performance or exercise of the FWC’s modern award powers,which are:

      (a) the FWC’s functions or powers under this Part;and

      (b) the FWC’s functions or powers under Part 2-6,so far as they relate to modern award minimum wages.’

[8] While the Act envisages that the process of award reviews will be ongoing and take place,at least every four years,there is a clear distinction between what Parliament intended by the Two Yearly Award Review in Item 6,Schedule 5 of the Transitional Act and by the Four Yearly Reviews under s 156 of the Act. They are different processes,with the former having a narrower scope. So much so is evident from the Full Bench decision in Modern Awards Review 2012 [2012] FWAFB 5600. At paras [91]-[94],the Full Bench said:

    [91] It is important to recognise that we are dealing with a system in transition. Item 6 of Schedule 5 forms part of transitional legislation which is intended to facilitate the movement from the WR Act to the FW Act. The Review is a “one off”process required by the transitional provisions and is being conducted a relatively short time after the completion of the award modernisation process. The transitional arrangements in modern awards continue to operate until 1 July 2014. The fact that the transition to modern awards is still occurring militates against the adoption of broad changes to modern awards as part of the Review. Such changes are more appropriately dealt with in the 4 year review,after the transition process has completed. In this context it is particularly relevant to note that s.134(1)(g) of the modern awards objective requires the Tribunal to take into account:

      “the need to ensure a simple,easy to understand,stable and sustainable modern award system for Australia . . .”

    [92] Two other textual considerations are also relevant. The first is that subitem 6(2)(b) of Schedule 5 directs specific attention to whether modern awards “are operating effectively,without anomalies or technical problems arising from the Part 10A award modernisation process”. No such legislative direction is reflected in the provisions which deal with the 4 yearly review of modern awards (s.156 of the FW Act).

    [93] The second textual consideration is that,as we have noted previously,Item 6 does not prescribe how the Tribunal is to be constituted for the purpose of conducting the Review. This may be contrasted with the 4 yearly reviews provided in s.156 and the award modernisation process under Part 10A of the WR Act,both of which are to be conducted by a Full Bench. The fact that the Review of a modern award may be conducted by a single member also suggests that the legislature contemplated that the Review would be more confined in scope that the 4 yearly reviews in s.156.

    [94] The above considerations have led us to conclude that the Review is intended to have a narrower scope than the 4 yearly reviews provided in the FW Act. This conclusion is also supported by the relevant extrinsic material.’

Issues in the appeal

[9] Before Her Honour varied it,the relevant clause (cl 26.2) in the Modern Award was expressed as follows:

    26.2 Overtime rest break

    An employee required to work overtime for two hours or more after working ordinary hours must be allowed a paid break of 20 minutes before commencing overtime work and thereafter upon completing each four hour period until the overtime work is finished.’

[10] Her Honour’s Determination varied cl 26.2 by substituting the following:

    26.2

Meal breaks after ordinary hours and before overtime hours

 

(a)

An employee required to work overtime for two hours or more after working ordinary hours must be allowed a paid break of 20 minutes before commencing overtime work or as soon as practicable thereafter. A further rest break must be allowed upon completing each four hour period until the overtime work is finished. Any rest breaks shall be paid for at the ordinary time rate.

 

(b)

Wherever reasonable and practical,the rest break must be taken at a time to coincide with any requirement to take a break under fatigue management rules/regulations.

 

(c)

An employer and employee may agree to apply any variation of this provision in order to meet the circumstances of the work in hand.’

[11] The appellant alleges error by Her Honour with respect to:

    ‘a. The jurisdictional finding ([2013] FWC 9805 at [81]) that empowered her Honour to relevantly vary cl 26.2 in the context of the Review:namely,that “there is an anomaly or technical problem arising out of the Part 10A process”,the alternative finding ([2013] FWC 9805 at [81]7) that “there is an ambiguity or uncertainty about cl 26.2 and how it operates”,and the finding ([2013] FWC 9805 at [81]) that “the clause does not serve to ensure that the award is simple and easy to understand”(Issue 1);and

    b. The decision to vary cl 26.2(a),pursuant to item 6(3) of Schedule 5 of the Transitional Act,to remedy the deficiencies found in the existing clause ([2013] FWC 9805 at [82]):to wit,that “the new clause 26.2(a) will provide that meal breaks will be paid for at the employee’s ordinary time rate of pay”(Issue 2).

[12] The Union’s further amended notice to appeal set out the grounds of appeal as follows:

    ‘1. Her Honour denied the Appellant procedural fairness in conducting the review of the Road Transport and Distribution Award required by Schedule 5,item 6 of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009 in that:

      a. Her Honour took into account her own subjective view/recollection of what transpired during the Part 10A award modernization process that gave rise to the Road Transport and Distribution Award 2010,her Honour having been a member of the Full Bench that conducted the Part 10A process,in determining whether there was an anomaly or technical problem arising from the Part 10A award modernisation process (or otherwise an ambiguity,uncertainty or error),that required correction during the review;

    1A. Her Honour took into account an irrelevant consideration and adopted an erroneous approach to the construction and to the application of Schedule 5,Item 6 of the Fair Work (Transitional Provisions and Consequential) Act 2009 by taking into account and having regard to her Honour’s personal view/recollection of what transpired in the Part 10A process and the intention of the Commission in making the Award in 2010.

    2. Her Honour’s construction of the rate payable during the paid break contemplated by clause 26.2 of the Road Transport and Distribution Award 2010 was in error and was inconsistent with the decision of the Full Bench in Transport Workers’Union of Australia v Linfox Australia Pty Ltd [2012] FWAFB 8958’ (‘Linfox’).

[13] The Union seeks permission to appeal on the following amended grounds:

    ‘1. The decision the subject of this application for permission to appeal and appeal was the substantive decision in relation to the review of the Road Transport and Distribution Award 2010,required by Schedule 5,item 6 of the Fair Work (Transitional Provisions and Consequential Amendments) Act 2009. This modern award is the substantive modern award operating in the road transport sector and establishes the minimum terms and conditions for many thousands or workers and their employers. It is in the public interest that a statutory review of a modern award such as this is conducted in a procedurally fair manner,is free from error,and that the product of such a review is consistent with decisions of the Full Bench of the Commission.

    2. The appeal,if permission to appeal were granted,will permit the Full Bench to consider whether it is available for a member of the Commission to have regard to their subjective view or recollection of the making of a Modern Award (made by a Full Bench),when conducting a review of a modern award required by the Fair Work Act 2009.

    3. Her Honour failed to follow the decision of the Full Bench in Transport Workers’Union of Australia v Linfox Australia Pty Ltd [2012] FWAFB 8958. It is in the public interest that individual members of the Commission follow decisions on the construction of a Modern Award.’

Decision at first instance

[14] Her Honour commenced her consideration of cl 26.2 by noting that the parties’competing wording of the proposed new clause was discussed at length during the conferences before her. Her Honour set out the parties’respective submissions and their arguments in support of their positions. Her Honour then paid some attention to the Union’s reliance on Linfox and the comments of Rares J,in an appeal against the Linfox decision (Linfox Australia Pty Ltd v Transport Workers’Union of Australia [2013] FCA 659) (‘Rares J’s decision’). Her Honour summarised the parties’views as to the weight to be given to the two competing views expressed in the two decisions (paras [77]-[80] and concluded at paras [81]-[82] as follows:

    [81] I prefer the submissions of the employers to those of the TWU about this issue. I find that there is an anomaly or technical problem arising out of the Part 10A process. In the alternative I find that there is an ambiguity or uncertainty about clause 26.2 and how it operates and I also find that the clause does not serve to ensure that the Award is simple and easy to understand.

    [82] I should indicate that,with great respect to the Full Bench decision in Linfox,I prefer the reasoning of Justice Rares. It is appropriate that I also identify the fact that I was a member of the Full Bench which made the Award and,as a single member,I chaired the pre-exposure draft conferences. The omission of the words previously in clause 36.2.1 was an oversight. In any event,I am conscious of what I am here required to do,having found as I have in the previous paragraph. I am required to consider under item 6(3) of Schedule 5,how to remedy the issue I have identified. I have decided that the new clause 26.2(a) will provide that meal breaks will be paid for at the employee’s ordinary time rate of pay. I am conscious of the employers’preference to use the term “base rate of pay”but unless agreed to by the TWU the variation will use the term “ordinary time rate of pay”.

SUBMISSIONS

For the appellant

[15] In written submissions,Mr M Gibian of Counsel,referred to Her Honour’s finding of an anomaly or technical problem,ambiguity or uncertainty and submitted that such a finding was premised on a conclusion that there was an ‘issue’of the relevant kind that requires a remedy. To undertake this exercise,Her Honour was firstly required to properly construe the award clause under review using the orthodox approach to issues of this kind arising under s 160 of the Act. Mr Gibian put that on one view,when she simply stated her preference for the employer submissions,Her Honour did not engage in a process of construction. However,Her Honour then recorded her preference for the reasoning in Rares J’s decision. In doing so,Her Honour erred.

[16] Mr Gibian outlined the principles of award construction,which commence with a consideration of the ordinary and grammatical meaning of the words:See:Australian Education Union v Department of Education and Children’s Services (2012) 86 ALJR 217 and Newcrest Mining Limited v Thornton [2012] HCA 60. He relied on Kucks v CSR Ltd (1996) 66 IR 182 (‘Kucks v CSR’) to demonstrate that narrow or pedantic approaches were misplaced when construing an award;See also:United Firefighters’Union of Australia v Metropolitan Fire and Emergency Services Board (2006) 152 FCR 18 at paras [51]-[53];Ansett Australia Ltd v Australian Licensed Aircraft Engineers Association [2003] FCAFC 209;and Amcor Ltd v Construction,Forestry,Mining and Energy Union (2005) 222 CLR 241 at para [96] (‘Amcor’).

[17] Mr Gibian argued that when read in the context of the Modern Award as a whole,the proper construction of cl 26.2 is clear - overtime rest breaks are to be paid at overtime rates. He relied on the words ‘after working ordinary hours’to demonstrate that after the completion of ordinary hours,employees are entitled to be paid overtime,whether working or on a paid rest break. This interpretation is supported by cl 15.2 and 27.1 of the Modern Award,which describes minimum weekly rates of pay payable during an employee’s ordinary hours of work and not otherwise.

[18] Mr Gibian submitted that the concept of ‘work’is a broad one,encompassing time spent having lunch or being on a break and remaining on duty;See:Commonwealth v Oliver (1962) 107 CLR 353 at 363;Duncans Holdings Ltd v Cross (1997) 76 IR 261 (‘Duncans Holdings’) at 263-264;and Australian Workers’Union v Department of Primary Industries and Resources SA (2007) 168 IR 249. This was the position correctly accepted by the Full Bench in Linfox. While Her Honour was not bound by the principle of stare decisis,as a matter of policy and sound administration,Full Bench authority should be followed by single members of the Commission;See:Re Dalrymple Bay Coal Terminal (unreported,Australian Industrial Relations Commission,Print N0224,20 March 1996). Mr Gibian rejected the obiter comments of Rares J as to the meaning of a similar clause in the Linfox Agreement and said that Her Honour erred in preferring the reasoning in Rares J’s decision to that in the Linfox decision.

[19] Mr Gibian suggested that Her Honour’s view that the omission of certain words in the clause was an ‘oversight’,appeared to be based on Her Honour’s subjective view or recollection as to how the words came to be removed from the Modern Award by the Full Bench in the Part 10A Award Review process. Mr Gibian said firstly,that subjective views or recollections are an irrelevant consideration to the proper construction of the Modern Award and Her Honour fell into error by relying on her views and recollections. Secondly,the appellant was denied procedural fairness in that Her Honour failed to inform the parties that she was intending to rely on her views and recollection of what occurred in the Part 10A Award Review process;See:Commissioner for ACT Revenue v Alphaone Pty Ltd (1994) 49 FCR 576.

[20] In developing these submissions,Mr Gibian put that in construing the Modern Award,one looks firstly to the intentions of the parties as reflected in the ordinary and grammatical meaning of the words used,not their subjective intentions;See:Corporate Affairs Commission (NSW) v Yuill (1991) 172 CLR 319;Construction,Forestry,Mining and Energy Union v Pilbara Iron Company (Services) Pty Ltd (2010) 198 IR 173;Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165;and Van Efferen v CMA Corporation Ltd (2009) 183 IR 319.

[21] Further,Mr Gibian contended that the removal of words from one pre-reform Federal award does not support a finding that their omission was an anomaly or technical problem;See:Linfox at paras [25]-[26]. He noted that the Modern Award arose from 103 awards and NAPSAs in the industry,many of which had varied arrangements in respect to the payment or non-payment of rest or crib breaks at overtime rates. Some were silent on the issue.

[22] Mr Gibian contended that in the exercise of discretion in remedying any issue identified in the review,Her Honour erred by:

    a) adopting an erroneous construction of the Modern Award;and

    b) producing an entirely illogical and unreasonable clause,that cannot be said to achieve the Modern Awards Objective.

[23] As to this latter contention,Mr Gibian said that while Her Honour correctly accepted the impracticality of an employee stopping work immediately upon the cessation of ordinary hours to take a break,the effect of the variation to the clause means that a worker will now:

    a) commence the performance of overtime work and be entitled to be paid overtime rates of pay,where overtime rates are payable ‘for all work done outside ordinary hours’;

    b) be required to cease overtime work to take a paid meal break,and be paid at ‘the ordinary time rate of pay’;noting that the break must be taken ‘at a time to coincide with any requirement to take a break under fatigue management rules/regulations’where reasonable and practicable and so as not to require an employee to work ‘longer than five and a half hours without a break for a meal’;and

    c) then resume overtime work,entitling the employees to revert to the overtime rate of pay.

This would be replicated when a further rest break is required after each four hours of overtime. The effect is that a worker would be paid ordinary time for being required to remain at work to perform overtime. This would also result in a financial incentive for a worker not to take overtime rest breaks.

[24] Mr Gibian submitted such an outcome would be contrary to the mandate outlined in s 138 of the Act and would not achieve the Modern Awards Objective in that it would not operate to provide a fair and relevant minimum safety net of terms and conditions,having taken into account matters such as ‘the need to provide additional remuneration for ... employees working overtime,or ... unsocial,irregular or unpredictable hours’or ‘the need to ensure a simple,easy to understand,stable and sustainable modern award system’,or ‘the likely impact of any exercise of modern award powers on business,including ... the regulatory burden’.

[25] As to permission to appeal,Mr Gibian submitted that the appeal raises matters of public interest,relating to:

    1) the proper approach in conducting a statutory review of a Modern Award;

    2) the construction of the Modern Award;

    3) issues of procedural fairness where parties are not informed the Commission will bring to bear a subjective view or recollection of the making of a Modern Award.

    4) the diversity of Commission decisions on the same subject matter;and

    5) the decision manifests an injustice.

See:GlaxoSmithKline Australia Pty Ltd v Makin (2010) 197 IR 266 (‘GlaxoSmithKline’)

[26] Finally,Mr Gibian put that the Full Bench should grant permission to appeal,uphold the appeal,quash the determination of Her Honour in respect to cl 26.2 and vary the clause to expressly confirm that overtime rest breaks are paid at overtime rates.

[27] In oral submissions,Mr Gibian summarised the appellant’s case as follows:

    ‘Both in determining relevantly that there were jurisdictional prerequisites to vary the award and in deciding to vary the award in the manner that Her Honour did,we say that the Commission fell into error,and really there are four matters that we have raised in the submissions;firstly,that Her Honour adopted what we say is an erroneous construction of the existing provision;secondly,that she relied upon a matter that was not relevant to the issue,namely a personal recollection of the basis of the Full Bench decision as part of the award modernisation process and that that reliance thereby denied procedural fairness to the Union;thirdly,that there was a failure to have regard to history of awards other than the single federal award that was referred to in the proceedings single - pre-existing federal award,I should say;and finally,that Her Honour ought not have varied the Award so as to provide for ordinary time rates of pay for overtime rest breaks;that is,time after the completion of ordinary hours of work during which the employees are required to remain at the workplace,in the absence of any case as to why as a matter of merit that ought be an appropriate provision.’

[28] Mr Gibian rejected AIG’s submission that the question of award construction was not decided or necessary to be decided by Her Honour. He said that this was inconsistent with what Her Honour did in the decision and what she was required to do. She could only decide whether there was an anomaly,ambiguity or technical difficulty by determining what the existing award provision meant on its proper construction. The appellant pressed and continues to press that the only proper construction of the clause is that found in the Linfox Full Bench decision.

[29] Mr Gibian said that the Modern Award only provides for ordinary rates of pay for ordinary hours and overtime rates for any other work. There is nothing in the Modern Award which makes ordinary hours rates of pay applicable for any time beyond the completion of ordinary hours. This was the view reached by the Full Bench in Linfox. Mr Gibian said that Her Honour ought to have followed the Full Bench decision,which in any event was a correct construction of the clause.

[30] Mr Gibian submitted that the fundamental difficulty with Her Honour relying on her subjective view and recollection of the making of the Part 10A Modern Award was that no one was on notice of what was proposed. There was a real difficulty with such a process,given that the views of other members of the Full Bench were not the subject of debate or analysis. Mr Gibian accepted that Her Honour had evidence from one witness,but such evidence from a single person,from one company,was a very slender basis to rely on and vary a major modern award.

[31] Mr Gibian then traced the history of the making of the Modern Award. He said that a draft award proposed by the appellant on 31 October 2008 did not include reference to meal breaks being paid at ordinary time rates. Various employer groups responded by urging the appropriate starting point be the Transport Workers Award 1998 [AP799474] (the ‘1998 Award’). However,while a draft award proposed by AIG on 31 October 2008 included the phrase ‘paid for at the ordinary rate’,these words were omitted from the Commission’s first exposure draft published on 23 January 2009. Later employer responses either did not comment on the clause or sought to have the words ‘paid for at the ordinary rate’inserted. Mr Gibian said that the Modern Award was made on 3 April 2009 and,despite the employer submissions,the clause remained unamended. Mr Gibian said that contrary to the employer submissions,it was not correct to say that at no time was there any issue raised by any party,including the appellant in the conference proceedings before Her Honour about the specific reference to the overtime crib break being paid at ordinary time or that none of the parties noticed the change.

[32] Further,Mr Gibian submitted that no evidence was put before Harrison SDP in relation to the Part 10A Award Review process. It was incumbent on those advocating a change to the Modern Award to lead evidence that there was an ‘oversight’. The appellant was entitled to rely on the presumption of regularity.

[33] Mr Gibian submitted that Rares J had adopted an impermissibly narrow and artificial view to the concept of ‘work’which is at odds with long-standing authority;See:Duncans Holdings. In addition,Mr Gibian said that His Honour demonstrated a complete misunderstanding as to the operation of the enterprise agreement when he referred to individual flexibility arrangements. Further,His Honour had paid no regard to subsequent breaks to be taken every four hours of overtime.

For the Australian Industry Group

[34] In written submissions,AIG put that the issues identified by the appellant did not ground a sufficient basis to grant leave to appeal as it had identified irrelevant considerations and made inaccurate assessments about Her Honour’s decision. Harrison SDP had not fallen into error and it was not in the public interest to grant permission to appeal;See:GlaxoSmithKline.

[35] AIG referred to the decision of Sams DP in relation to the stay application sought by the appellant,in particular His Honour’s qualified doubts as to appellant’s prospects of success;See:Transport Workers’Union of Australia [2014] FWC 747 at para [35]. While not binding on the Full Bench,His Honour’s approach was correct.

[36] AIG rejected the submission that the public interest would be enlivened by the Full Bench making rulings on the proper approach of the Commission in discharging its statutory duty to review the Modern Award in the first two years of its operation. This process was largely concluded and should be distinguished from the statutory Four Yearly Award Review set out in s 156 of the Act;See:the Preliminary Decision at [91]-[94]. All decisions and determinations made under the Four Yearly Award Review are required to be made by a Full Bench of the Commission. That review is to consider whether the modern awards provide a fair and relevant safety net in light of the Modern Awards Objective. In light of the President of the Commission having published an issues paper requesting submissions on the interaction of statutory obligations in the Act in relation to the Commission’s award modernisation powers,it was not appropriate to allow permission to appeal.

[37] AIG further submitted that the ‘diverse’interpretations of cl 26.2 would not ground the public interest as the ‘diversity’did not arise where members of the Commission had been exercising the same functions. Her Honour had not departed from the proper approach to hearing and determining matters as part of the Two Yearly Review of all modern awards. The decisions upon which the appellant relied related to applications made pursuant to s 739 of the Act.

[38] AIG rejected the breadth of coverage of the Modern Award as providing a basis for granting leave to appeal. By their very nature,Modern Awards apply to large numbers of employees. Such a finding would mean that an application made in relation to any single member decision in relation to a modern award would invariably be granted leave to appeal;See:Re:Clerks - Private Sector Award 2010 [2013] FWCFB 1228 (‘Re:Clerks - Private Sector Award’) at para [27] .

[39] AIG added that none of the alleged errors in award construction raised by the appellant were sustainable. Accordingly,they could not ground the granting of leave to appeal.

[40] AIG submitted that the terms of the Determination issued by Her Honour were clear and unequivocal. Further,Her Honour had not relied on the identification of ambiguity or uncertainty in relation to cl 26.2 as grounding her decision. The appellant was mistaken in conflating the two limbs of Item 6(2) of Schedule 5 of the Transitional Act. An anomaly or technical problem could be evidenced by ambiguity,but the two were not analogous. It was implicit in SDP Harrison’s decision that the Modern Award was not meeting the Modern Award Objective in that it was not ‘simple and easy to understand’;See:para [81]. She had alternatively identified that there was an ambiguity or uncertainty as to how cl 26.2 operated. This conclusion was open to Her Honour and she had clearly identified Item 6(3),Schedule 5 of the Transitional Act as grounding her ability to make a Determination to remedy the issues she had identified. No questions as to the construction of cl 26.2 remained.

[41] AIG referred to the appellant’s submission that Her Honour had failed to appropriately apply Full Bench authority;specifically the Linfox decision. This was not a decision which was ‘relevant to the matter being determined’in the sense set out by the Full Bench in the Preliminary Decision. The Linfox decision related to the interpretation of an enterprise agreement after the lodging of a dispute notification pursuant to s 739 of the Act. It did not set out any conclusion as to the interpretation of the clause,whether it reflected an anomaly or technical problem arising from the award modernisation process or whether certain words or phrases had been mistakenly omitted.

[42] In the alternative,AIG submitted that should the Full Bench be of the opinion that the Linfox decision was relevant,there were significant reasons for departure from the decision,including the participation of the industrial parties involved in the award modernisation process and the differing interpretation in Rares J’s decision (albeit in obiter).

[43] AIG refuted the appellant’s submission that Her Honour had denied it procedural fairness in relying on a subjective recollection as to how the Modern Award was phrased. Read in context,neither Her Honour’s recollection of her participation in the Full Bench which made the Modern Award,nor her preference for the reasons of Rares J over those of the Full Bench in Linfox were the basis for her decision. She had identified her preference for the submissions of the employers over those of the appellant. She had expressly referred to her finding that there was an ‘anomaly or technical problem’which had arisen out of the award modernisation process or,alternatively,that it was ambiguous or uncertain. She also found that it did not ‘serve to ensure that the Award is simple and easy to understand.’It would have been impossible for Her Honour to come to the proceedings with a ‘blank’mind. However, it could not be said that she was not open to persuasion;See:The Minister for Immigration and Multicultural Affairs v Jia (2001) 178 ALR 421.

[44] AIG observed that the question of whether or not there had been an omission in drafting cl 26.2 had been repeatedly raised during the proceedings before Her Honour and in written submissions. The appellant had not taken the opportunity to rebut the submissions during the hearing. Her Honour’s participation in the Full Bench which made the Modern Award was well known to the parties and referred to throughout the proceedings,though AIG could not confidently assert whether Her Honour had referred to the removal of the relevant words during the conferences.

[45] In the alternative,AIG submitted that even if Her Honour had relied on that subjective recollection,it would have been appropriate for her to do so as the Commission is entitled to inform itself in relation to any matter before it in any manner it sees fit (s 590(1)). However,it stressed that Her Honour had not relied upon this recollection.

[46] AIG disagreed that the terms of the Determination itself arose from an error of construction. Having correctly made the findings that Her Honour did,it was within her wide discretion to reinsert the wording from the 1998 Award under Item 6(3) of Schedule 5 of the Transitional Act. The appellant’s view that the determination ‘resulted in an entirely illogical and unreasonable clause,that cannot reasonably be said to achieve the modern awards objective and is unjust’,was unsustainable in light of the similarity of the clause to one in the 1998 Award. That award was the principle instrument covering the industry prior to the creation of the Modern Award. AIG added that there was no basis to find that the variation was contrary to the Modern Awards Objective. The Modern Award already provided for additional remuneration for overtime,shift work and weekend work. The appellant’s submission in this respect was a mere assertion. Her Honour’s determination was entirely consistent with the Modern Awards Objective.

[47] In oral submissions,Mr B Ferguson emphasised that Her Honour had been required to carry out a broad task under the Review,rather than merely construing or interpreting the terms of the Modern Award. Her Honour’s decision should not be read in a manner which applied a ‘fine-toothed comb’to the words,but should be read in a fair and common-sense fashion. When reading the decision in this way,it was clear that Her Honour had not fallen into any appellable error.

[48] Mr Ferguson noted that after expressing her preference for the submission of the employers,Her Honour went on to make three findings. The first of these was that there was an anomaly or technical problem in the operation of cl 26.2. This finding was open to Her Honour on the evidence and arguments put by the parties. The appellant had chosen not to contest this finding in any serious manner. Rather,it had addressed the interpretation of cl 26.2. The issues which the appellant now seeks to agitate were not developed in any real sense in the hearing at first instance.

[49] Mr Ferguson submitted that Her Honour’s second finding - that there was ambiguity or uncertainty in relation to cl 26 - was unremarkable. The clause was clearly capable of a number of meanings,as evidenced by the differing opinions of the Commission at first instance,of a Full Bench and of Rares J. Her Honour’s third finding,that the clause is not simple and easy to understand,goes to the wider issue that the clause was not meeting the Modern Awards Objective. Her Honour had clearly grounded her decision in these findings and her observations in relation to her preference for the views of Rares J and her participation in the Part 10A Modern Award Review Process were not dissimilar to obiter comments.

[50] Mr Ferguson observed that the Full Bench in Linfox had relied on the conclusion that the crib breaks in question were ‘work’. This did not reflect the evidence of what generally occurred in the industry. The breaks in question here were true rest breaks. Even if this was not accepted it did not follow that the breaks must then must be paid at overtime rates. The 1998 Award had provided that the breaks were paid at ordinary rates. Similarly,the current Timber Industry Award 2010 [MA000071] also provided for crib breaks which were paid at ordinary rates.

For Australian Business Industrial

[51] In written submissions,ABI submitted that:

    (a) the process adopted by Her Honour for undertaking the 2012 Transitional Review of the Modern Award was available to her Honour and was sound;

    (b) the findings made by Her Honour and the basis upon which those findings were made was available to her Honour and were sound;

    (c) Her Honour properly discharged the statutory duty relevant to undertaking the 2012 Transitional Review for the Modern Award;

    (d) permission to appeal should not be granted;and

    (e) despite (d),the appeal should be dismissed.

[52] On the question of permission to appeal,ABI said that there is little public interest in the appeal,given that:

    •there was no issue of procedural unfairness;
    Linfox was a private arbitration in the context of one company’s enterprise agreement;
    •the Modern Award should be considered holistically and not be disturbed by one small aspect of the decision.

[53] ABI outlined the Part 10A Award Review process and noted it was largely driven through a conference-based process where the Commission informed itself in a relatively informal manner,with limited resort to formal hearings involving the taking of evidence.

[54] In describing the Transitional Review,it was said that it required each award to be reviewed in its own right to establish whether the award was meeting the Modern Awards Objective. It was a ‘curative’process,allowing the Commission to ‘tidy up’anything arising from the Part 10A Award Review process so as to ensure the award is operating effectively without anomalies or technical problems. This process was to be contrasted with the strict concept of ‘ambiguity’or ‘error’found at s 160 of the Act. Properly characterised as a ‘one off’process,the Transitional Review allowed the Commission to firstly reflect on what arose from the Part 10A process and to undertake any necessary housekeeping to clean up matters and,secondly,examine and test each award holistically against the Modern Awards Objective.

[55] ABI submitted that it was obvious that Her Honour was cognisant of her particular statutory duty as the transcript and decision reveal. In addition,Her Honour was entitled to adopt the agreed process she did in concluding the Review largely by way of conferences,but ultimately determining disputed matters on the competing submissions of the parties,oral argument and the evidence of Ms Belynda Howard (Followmont). In doing so,the Commission had a broad discretion both in performing its functions (s 577) and in how it informed itself (s 590). During the proceedings,it was clear Her Honour accepted that the agreed matters and the arbitrated matters were necessary to discharge her statutory duty to make the Modern Award easier to understand and to ensure it met the Modern Awards objective and was ‘operating effectively’. The Commission determined to make 16 variations to the Modern Award to discharge the statutory requirement. Removing one of the variations could lead to the Award failing to meet the statutory requirements and putting it ‘out of balance’with the complex limbs of the Modern Awards Objective.

[56] ABI argued that the contest over the wording of cl 26.2 was never simply advanced as a matter of limited,technical interpretation and ambiguity,but was advanced on much broader grounds. These grounds included the following:

    (a) The primary antecedent Federal Award (the 1998 Award) expressly stated that such breaks were to be paid at ordinary time;

    (b) This award formed the basis of the exposure drafts discussed in the Part 10A process;

    (c) These exposure drafts did not include this express reference to ordinary time;

    (d) None of the parties noticed this change;

    (e) The Commission did not intentionally make this change;

    (f) The Modern Award did not say that such breaks were to be paid at overtime rates;

    (g) Problems over the application of this clause had arisen since the Modern Award was made;

    (h) If the Commission had not intended to pay such breaks at overtime rates and/or to resolve the application issues,the Commission should reinstate the position that had historically applied in the 1998 Award.

[57] ABI submitted that reliance on a non-binding private arbitration should be treated by the Full Bench with caution. Her Honour made findings that an anomaly or technical problem had been identified and was persuaded to adopt the employers’submission. Her Honour expressed her views as to the Linfox decision and Rares J’s decision. She was entitled to rely on her recollection as the primary member in the Part 10A Award Review to conclude that the omission of the words previously used was an oversight.

[58] ABI rejected the appellant’s claims of a denial of procedural fairness. The appellant had simply elected not to debate the wording of the clause,despite it being squarely a subject raised in the arbitration. All Her Honour had done was to draw on her recollection to strengthen the view that she had formed. This was entirely uncontroversial and happens regularly when the Commission is informing itself.

[59] In oral submissions,Mr N Ward,Solicitor, submitted that the appellant would have the Full Bench believe that the proceedings below had essentially been an inter-party dispute relating to the construction of an industrial instrument;more akin to a s 160 dispute. This was not a proper characterisation of the proceedings below. For procedural efficiency,it was convenient to commence the Transitional Review proceedings by way of applications made by parties.

[60] Mr Ward said it was important to acknowledge that the Part 10A Award Review process was unique in Australian industrial relations. Some 7,000 awards were rendered down over two years to 122 Modern Awards. It was hardly surprising that Parliament had charged the Commission with a broad discretion to reflect on what it had done and allow the Commission to ‘tidy up’or ‘mop up’issues which needed addressing.

[61] Mr Ward submitted that Her Honour came to the task ‘perfectly armed to do the job’. She has been on the transport panel for many years and was the primary member in the Part 10A Award Review process dealing with the transport awards in the Two Yearly Review. Her Honour engaged in a process akin to the Part 10A Award Review in that she chaired conferences with the parties. She was entitled in the context of a statutory review to take into consideration everything put to her in those conferences. This was a holistic exercise resulting in 16 award variations and it would be wrong to have this Full Bench look at one very discrete element and disaggregate the package.

[62] Mr Ward also said it was wrong for the appellant to be so focused on the very narrow notion of construction arising from the Linfox decision. Mr Ward identified the exchange between Her Honour and the National Union of Workers during the proceedings below,where the question of omission was clearly raised. However,the appellant never sought to argue the point. It was intriguing,Mr Ward noted,that the NUW had told Her Honour it was a matter for her to determine.

[63] As to the procedural fairness point,Mr Ward submitted that at no stage was the appellant denied any opportunity to respond to any submissions made by anyone. The appellant was given a high degree of latitude as demonstrated by the acceptance of an aide memoire it had prepared going to many,many pages. At no stage after the proceedings did Her Honour entertain something new which had not been raised by the parties at the hearing or that no one had an opportunity to respond to. That would demonstrate procedural unfairness,but it is not what occurred in this case.

[64] Mr Ward observed that many of the drafts tabled by the Commission during the various conferences identified the 20 minute rest break as being paid at the ‘base rate of pay’,which is arguably less beneficial than the ordinary time rate of pay. Mr Ward said that to suggest the parties were not ‘live’to the issue and did not have an opportunity to respond,is simply incorrect. Her Honour properly addressed all of her statutory duties and the fact Her Honour drew on her deep knowledge and understanding of the industry was ‘entirely uncontroversial’.

[65] In reference to the appellant’s reliance on the Linfox decision,Mr Ward said the appellant had elevated the decision beyond its significance. The notion of private arbitration is relatively new and should be treated with some care as a matter of general policy. Mr Ward put that this Full Bench needs to be careful about confusing cases dealing with shift crib breaks,which have historically been paid breaks,with rest breaks,which have usually been treated differently. Duncans Holdings does not assist the appellant in that regard. Indeed,Mr Ward observed that the new Timber Industry Award 2010 which covers the industry in Duncans Holdings,has such breaks being paid at ordinary time.

[66] Finally,Mr Ward noted that the largest Award in this jurisdiction,the Manufacturing and Associated Industries and Occupations Award 2010 [MA000010] makes it clear that rest breaks are paid at ordinary rates at cl 40.10. The fact that such breaks are paid at ordinary rates is not new,fanciful,novel or strange.

For the Australian Road Transport Industrial Organisation (ARTIO)

[67] In its written submissions,ARTIO submitted that the appellant should not be granted leave to appeal and the application should be dismissed. The appellant was required to demonstrate that there must be an arguable case of appellable error in order for the Full Bench to grant permission to appeal. In determining whether this was the case,the Full Bench would have regard to whether the original decision was attended with sufficient doubt to warrant a reconsideration or whether a failure of the Full Bench to reconsider the decision would result in a significant injustice. Moreover,the appeal did not raise issues of importance or general application and the public interest was not enlivened by the appeal. See:Allied Express Transport Pty Ltd v Owens [2011] FWAFB 2929.

[68] ARTIO further observed that the appellant had failed to comply with the directions issued by His Honour Hatcher VP on 7 January 2014. This was in itself a basis for the application to appeal to be summarily dismissed.

[69] In the event that the Full Bench granted permission to appeal,ARTIO submitted that at paras [81]-[82] of her decision,Harrison SDP had clearly identified an anomaly,ambiguity or uncertainty in cl 26.2 arising as a result of an ‘oversight’. The wording inserted by Her Honour was close to identical to the wording found in the Transport Workers’Award 1983 (the ‘1983 Award’) and the 1998 Award. The wording in the 1983 Award was inserted by consent following an application by the appellant. This coincided with the commencement of the 38 hour week and the rostered day off system. The appellant’s consent to this term had been related to the reduction from a 40 hour to a 38 hour week.

[70] This wording had applied for nearly three decades and had been substantially replicated in the 1998 Award. The wording of the 1998 Award had been referred to throughout the thirteen conferences held between the parties and ARTIO’s submissions,which were available to all the parties,had specifically alluded to the issue. It had not been raised during the Part 10A Award Review process and ARTIO had drawn attention to this omission in a conference before Her Honour.

[71] Mr P Ryan claimed for ARTIO that he had attended every consultation session in relation to the development of the Modern Award in 2008-2009 and could not recall the wording of cl 26.2 having been raised by any of the parties. The Modern Award was heavily based on the 1998 Award. He noted that the 1998 Award had applied in all states and territories apart from NSW,where the Transport Industry (State) Award (NSW) [AN120594] had applied. This instrument was silent on the question of whether crib breaks should be paid at overtime rates.

[72] ARTIO said that the Linfox case involved the interpretation of an enterprise agreement in relation to consent arbitration. It was not binding on Her Honour. While noting that Rares J had found that the Full Bench of the Commission was the final step of a private arbitration,His Honour had made some obiter comments that were consistent with the provisions in the 1983 Award and the 1998 Award.

[73] ARTIO described the appellant’s submission that Her Honour had relied on her own view or recollection as to what had occurred during the Part 10A Award review process as ‘simplistic and incomplete’.

[74] In oral submissions,Mr Ryan submitted that the appellant was incorrect in putting that the issue in dispute had arisen at the last minute and each issue had been discussed in fine detail. Counsel for the appellant had only appeared for the first time on 2 August 2013. There had been a number of drafts,although Mr Ryan could not say whether those drafts contained the words ‘at their base rates of pay’. Mr Ryan described the drafting history of the Modern Award throughout 2008-2009. The relevant words had first dropped off in the appellant’s initial draft,which referred to a crib break at cl 28.2 and an overtime meal break in clause 28.3. This was picked up in the later exposure draft. ARTIO had drawn attention to the removal of these words in its response. However,the Full Bench responsible for developing the Modern Award had focused on ‘big picture issues’and the issue had ‘slipped between the cracks’.

[75] Mr Ryan said that it would not be in the public interest for the appellant to resile from a consent position reached between the parties in 1983 when the 38 hour week was introduced.

[76] Mr Ryan noted that the entitlement did not arise unless two or more hours of overtime were worked. It was a paid rest break and not a crib break. It was generally relevant to people working in depots or yards,rather than drivers on the road. Mr Ryan’s understanding was that paid rest breaks had always been paid at the base rate of pay.

For Followmont Transport Pty Ltd (Followmont)

[77] In written submissions,Followmont submitted that it would not be in the public interest for permission to appeal to be granted in this case.

[78] Attention was drawn to oral submissions made by Followmont in the course of the arbitration on 2 August 2013. Followmont had put that there was no record of any party,including the appellant,seeking to have the break paid at overtime pay rates. Followmont had also noted the wording of the 1983 Award and the 1998 Award during those proceedings. Followmont had filed a statutory declaration of an officer of Followmont,which expressed a belief that the entitlement,pursuant to cl 26.2,was to be paid at ordinary rates. None of this had been disputed by the appellant and,accordingly,its submission that it had been denied procedural fairness by Her Honour taking into account a subjective view or recollection of the Part 10A Award Review process was without merit. Her Honour’s decision had been based on the evidence and submissions put to her. Followmont’s submissions had been referred to at para [70].

[79] Followmont addressed the two grounds of appeal identified by the appellant;namely,the procedural unfairness arising from Her Honour’s reliance on her subjective recollection and,secondly,Her Honour’s failure to follow the Linfox decision. She noted that the appellant,in oral submissions,had explicitly disavowed a submission that Her Honour had been bound by the Linfox decision.

[80] In oral submissions,Ms K Murphy explained that Followmont’s participation in the Award Modernisation process was due to correspondence between itself and the Fair Work Ombudsman (FWO). FWO was of the opinion that the expression of cl 26.2 was ambiguous. Followmont was not covered by an enterprise agreement and relied upon a careful interpretation of the Modern Award to run its business.

[81] Ms Murphy observed that the appellant had had the opportunity in the proceedings below to adduce witness evidence and had not done so. Nor had it sought to cross-examine Followmont’s witness,whose evidence went to industry practice and the clarity of cl 26.2.

[82] Ms Murphy referred to the Linfox decision and noted that there had been evidence in that case that drivers were to remain with their vehicles,answer phones and radio calls (amongst other things) while the overtime break was taken. In contrast,the break referred to at cl 26.2 in this case is a true rest break.

[83] Ms Murphy put that numerous forms of words had been suggested throughout the conferencing process and there had been a large number of draft proposals. It was not logical to assume that where one particular form of words is rejected,provisions that describe a contrary position must necessarily apply ‘by default’.

For AFEI

[84] AFEI submitted that the Full Bench should refuse permission to appeal and dismiss the appeal. The tests espoused in GlaxoSmithKline as to the granting of permission to appeal are not enlivened simply because an award covers a large number of employees;See:Re:Clerks - Private Sector Award. It was also said that the Commission’s review powers pursuant to Item 6,Schedule 5 of the Transitional Act,was a one-off process which has now been completed. No public interest lies in these limited circumstances.

[85] AFEI put that the two Linfox decisions do not disclose a diversity of judgements warranting permission to appeal. In any event,a private arbitration,for a single company,is of limited assistance in the construction of the Modern Award.

[86] AFEI submitted that the appellant was unable to demonstrate any appellable error in Her Honour’s decision of the kind contemplated in House v The King (1936) 55 CLR 499. The Transitional Review imposed no statutory injunction on the exercise of discretion of the Commission in this case. On a proper reading of Her Honour’s decision it is clear she carefully considered her statutory functions,the parties’submissions,particularly going to the Linfox decision and Rares J’s decision and found that she preferred the submissions of the employers. Her Honour had demonstrated a proper understanding of the objectives of the Review and the consideration of relevant issues. She was not bound by the principle of stare decisis and her preference for Rares J’s views and Her Honour’s recollections of the Part 10A Award Review process were merely obiter. The correct focus should be on Her Honour’s findings in para [81],which were clearly open to her to make. In addition,the Commission is able to inform itself in accordance with s 590(1) of the Act.

[87] AFEI submitted that said there was no denial of procedural fairness to the appellant,as it was afforded ample opportunity to argue its case and had participated in thirteen conferences and a hearing.

[88] In oral submissions,Ms J Light emphasised the words used by Her Honour in para [82] to distinguish her comments from the findings made in para [81]. Her Honour correctly found that there was an anomaly or technical problem arising out of the Part 10A Award Review process and correctly remedied it.

[89] Ms Light also noted that in the Linfox decision,the evidence was that it was common practice at Linfox sites to work during rest breaks. That is not the case here and,in any event,the Linfox decision arose from a private arbitration.

[90] In reply,Mr Gibian submitted that the question of the omission of the words in the clause being not cavilled with by the appellant is not sustainable. The arguments as to the reliance on the Linfox decision makes that clear,as do the arguments raised by the appellant in that case.

[91] Mr Gibian said that the evidence as to confusion in the industry was meagre - one witness who had worked for a single company in Queensland for nine months.

[92] Mr Gibian dismissed the distinction between crib breaks and rest breaks as the term ‘crib breaks’is used in both the 1983 Award and the 1998 Award,yet those Awards are put against the appellant in this case. There was no evidence that the type of break was intended to be changed,particularly as it applied in the NSW State Award and other preceding Federal Awards.

[93] Mr Gibian said the substance of the decision of the Full Bench in Linfox was entirely relevant to the provisions of the Modern Award as it was replicated in the enterprise agreement. All of the submissions of the appellant in that case were directed to the interpretation of cl 26.2 of the Modern Award.

[94] Mr Gibian rejected Mr Ryan’s assertion that he had failed to pick up the omission from the Modern Award of the words ‘paid at ordinary time’. Mr Ryan had indeed picked it up twice and AIG had picked it upon three occasions after the publication of the first exposure draft of the Award. In the result,the proposed wording of the employers was not adopted by the Full Bench. The appellant had never agreed to the employers’changes and had consistently opposed them. What the appellant was not able to respond to was Her Honour’s reliance on her recollection of the Part 10A Award Review process. If it had been raised,the appellant would have put submissions as to what weight should be given to such recollections.

CONSIDERATION

Appeal principles

This is an appeal brought under s 604 of the Act. That section is expressed as follows:

    604 Appeal of decisions

    (1) A person who is aggrieved by a decision:

      (a) made by the FWC (other than a decision of a Full Bench or an Expert Panel);or

      (b) made by the General Manager (including a delegate of the General Manager) under the Registered Organisations Act;

    may appeal the decision,with the permission of the FWC.

    (2) Without limiting when the FWC may grant permission,the FWC must grant permission if the FWC is satisfied that it is in the public interest to do so.

    (3) A person may appeal the decision by applying to the FWC.’

[95] The powers of the Commission in an appeal under s 604 of the Act are exercisable only if there is error on the part of the primary decision maker. There is no automatic right to appeal;rather,an appeal may only be made with the permission of the Commission. However,the Commission must grant permission,if it is satisfied that it is in the public interest to do so.

[96] In GlaxoSmithKline,a Full Bench of Fair Work Australia (FWA),as the Commission then was,described the notion of public interest in the following terms:

    [26] Appeals have lain on the ground that it is in the public interest that leave should be granted in the predecessors to the Act for decades. It has not been considered useful or appropriate to define the concept in other than the most general terms and we do not intend to do so. The expression ‘in the public interest’,when used in a statute,classically imports a discretionary value judgment to be made to be made by reference to undefined factual matters,confined only by the objects of the legislation in question.

    [27] Although the public interest might be attracted where a matter raises issues of importance and general application,or where there is a diversity of decisions at first instance so that guidance from an appellate court is required,or where the decision at first instance manifests an injustice,or the result is counter intuitive,or that the legal principles applied appear disharmonious when compared with other recent decisions dealing with similar matters,it seems to us that none of those elements is present in this case.’

[97] Given that Her Honour’s decision was in the context of a discrete ‘one-off’Two Yearly Review of the Modern Award,which is obviously now concluded,we are not satisfied that the public interest is enlivened by this appeal. Moreover,we do not consider that the appeal raises matters of importance or general application to the Commission’s Award Modernisation jurisdiction or that it manifests an injustice or that is counter-intuitive. We cannot discern any misapplication by Her Honour of the relevant legal principles.

[98] The fact the Modern Award covers many thousands of employees and employers is not,of itself,determinative as to the grant of permission to appeal;See:Re:Clerks - Private Sector Award at para [27]. This is so,because all modern awards cover a multitude of employers and thousands of employees. If the extent of coverage of a modern award was determinative as to the grant of permission to appeal,permission would invariably be granted in every appeal from a Modern Award Review Decision. Such an outcome would be contrary to the principles applicable to the public interest tests as cited above at para [96].

[99] That said,even if we had been inclined to grant permission to appeal,we are not persuaded that any of the appellant’s grounds of appeal have been made out such as to demonstrate any error in Her Honour’s decision;See:House v The King. Indeed,we would expressly state our concurrence with Her Honour’s conclusions and decision. We would,nevertheless make the following observations and findings.

Principles of award construction

[100] True it is that Her Honour in the Two Yearly Award Review process,was not undertaking a strict interpretation exercise of the words in cl 26.2 as might take place under s 160 of the Act,such as to remove an ambiguity or uncertainty,or to correct an error. On the other hand,the function of identifying whether the Award is operating effectively,without anomalies or technical problems and in accordance with the Modern Awards Objective under Item 6,Schedule 5 of the Transitional Act,must naturally involve considerations as to the meaning of the words in question. This leads to a consideration of the principles of award construction.

[101] A useful starting point with regard to the principles of award construction may be found in Amcor. The issue in that judgment was whether,consequent upon a corporate reorganisation,affected employees became entitled to redundancy payments under the provisions of an industrial agreement. This required the High Court to construe the relevant provisions of the industrial instrument. Gleeson CJ and McHugh J (at [2]) referred to the approach to construction as turning upon,‘the language of the particular agreement,understood in the light of its industrial context and purpose...’. Gummow,Hayne and Heydon JJ approached the construction issue having regard to a wide range of material,including the circumstances under which the agreement came to be made. Their Honours’intended approach to the issue was set out in summary form at para [30]:

    ‘Clause 55.1.1 must be read in context. It is necessary,therefore,to have regard not only to the text of cl 55.1.1,but also to a number of other matters;first,the other provisions made by cl 55;secondly,the text and operation of the Agreement both as a whole and by reference to other particular provisions made by it;and,thirdly,the legislative background against which the Agreement was made and in which it was to operate.’

[102] The frequently quoted observations of Madgwick J in Kucks v CSR are also relevant:

    ‘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.

    But the task remains one of interpreting a document produced by another or others. A court is not free to give effect to some anteriorly derived notion of what would be fair or just,regardless of what has been written into the award. Deciding what an existing award means is a process quite different from deciding,as an arbitral body does,what might fairly be put into an award. So,for example,ordinary or well-understood words are in general to be accorded their ordinary or usual meaning.’

[103] In AFMEPKIU v Skilled Engineering Ltd [2003] FCA 260,Finkelstein J commenting on the approach to award construction said at para [21] as follows:

    ‘The object is as always to objectively determine the intention of the parties from the words of the document. That intention can manifest itself not only from words used by from words considered in light of the circumstances surrounding the transaction.’

[104] Based on these and other applicable authorities,the modern approach to award construction envisages taking into account the wider context underpinning the making of the clause in contention. Inevitably,this will require having recourse to a wide range of material which may be relevant to the history of the development of the clause and the surrounding circumstances,generally,which led to its making. To the extent that Her Honour’s task involved a consideration of the meaning of the words in the clause and the principles of award construction,we do not consider Her Honour was in error.

[105] At the very least,there is an ambiguity or uncertainty within the meaning of the clause,given the tension between the concepts of the paid break being taken ‘after working ordinary hours’and ‘before commencing overtime work’. It is not,as the appellant submitted,a mere infelicity of language. That such an ambiguity existed in the clause seems to have inadvertently been conceded by the appellant,as its submissions on remedy in this case propose that this Full Bench would,‘pursuant to Item 6(3) of Sch 5 of the Transitional Act,vary cl 26(2)(a) so as to expressly confirm that overtime rest breaks are paid at ordinary rates.’

[106] The point is that despite Her Honour having submissions from the parties concerning the effect of the Linfox decision and Rares J’s obiter comments,Her Honour was not obliged to have regard to,let alone adopt the reasoning from either decision. This is plainly apparent from Her Honour’s findings as to an anomaly,technical problem,ambiguity or uncertainty in para [81] of the decision. Her Honour makes it abundantly clear in the next paragraph,by the use of the expressions ‘in any event’and ‘having found as I have in the previous paragraph’that her findings were as a result of what she was required to do in the Review Process under Item 6 of Schedule 5 of the Transitional Act. In our view,her subsequent comments were incidental to these findings.

[107] We note that all parties accepted that the principle of stare decisis does not apply to the decision making by a member of the Commission. This proposition is undoubtedly correct. Even so,we do not consider that the Linfox decision has the authoritative force for which the appellant contends. We think the Linfox decision is clearly distinguishable from the circumstances of this case in that it was decided as a private arbitration under the terms of an agreed dispute settlement procedure in an enterprise agreement. We reaffirm that care should be taken when reliance is sought to be had on a decision of the Commission arising from a private arbitration.

[108] Considerable reliance was placed by the appellant on Duncans Holdings as authority for the propositions it advances in this appeal. For two reasons,we do not consider that Duncans Holdings supports the claim that rest breaks during overtime should be paid at overtime rates in this Modern Award. Firstly,we accept Mr Ward’s submission that care should be taken not to confuse paid rest breaks with the two issues Wilcox J was considering in Duncans Holdings:namely,unpaid lunch breaks and paid crib breaks;See:Duncans Holdings at 263. Secondly,it is apparent that the industry under consideration in Duncans Holdings - the timber industry - now is covered by a modern award which makes clear that rest breaks are to be paid at ordinary time (cl 29(4)(a)(ii)).

Did Her Honour act outside the Commission’s jurisdiction?

[109] The appellant was critical of Her Honour for bringing a subjective view or her recollections of the making of the Modern Award to the construction of the clause. On one view,Her Honour’s recollections are irrelevant to her central findings made in the preceding paragraph of the decision and were an ‘off the cuff’statement of the obvious. Nevertheless,in our view,far from it being wrong for Her Honour to have taken account of the background to the making of the Modern Award,including reliance on Her Honour’s intimate involvement in that process,such an exercise is an inherent and obvious ingredient in the Two Yearly Award Review process.

[110] We agree with the submission of ABI that Item 6(2)(b) of Schedule 5 of the Transitional Act is ‘curative’in character,allowing the Commission to ‘tidy up’anything arising from the Part 10A Award Review to ensure the Modern Award is operating effectively,without anomalies or technical problems. In ‘tidying up’the Modern Award,Her Honour was perfectly placed (probably best placed) to know what had happened by omission,given her vast experience and knowledge,not only of the making of the Modern Award,but of its principal antecedent,the 1998 Award. That such reliance was based not only on Her Honour’s knowledge and experience,but also on the express submissions of the parties,is entirely consistent with the Commission’s powers to ‘inform itself in relation to any matter before it in such manner as it considers appropriate’(s 590(1) of the Act).

[111] In short,we consider that Her Honour made findings in an entirely conventional way,based on the submissions of the parties and based on Her Honour’s knowledge of the history of the making of the Modern Award and the Part 10A Award Review process. Her Honour then properly corrected the anomaly she had found and by doing so,ensured the Award was simple and easy to understand. More broadly,we consider that Her Honour’s decision and Determination met the key plank of the Modern Awards Objective to ‘provide a fair and relevant minimum safety net of terms and conditions’(s 134(1) of the Act).

[112] We would wish to add that Her Honour’s finding that the omission of the offending words was an ‘oversight’was not a subjective view. On the contrary,it would appear to be the only sensible objective conclusion one could come to. It was a finding that was plainly open for Her Honour to make. We also reject the submission that Her Honour should not have placed such significance on the 1998 Award,which provided for the payment of crib breaks during overtime at the ‘ordinary rate’. We acknowledge that the evidence as to the industry arrangements in respect to the payment of the meal break was varied and there were 103 awards and NAPSAs which were potentially relevant to the Part 10A Award Review. However,there can be no doubt that the most predominant and significant antecedent Award was the 1998 Award. In fact,it was the starting point draft document for the many drafts which followed prior to the making of the Modern Award.

[113] It seems inconceivable that if such an important and controversial change to the well accepted existing industry custom and practice was to flow from the Part 10A Award Review process,that there would have been so little debate around the issue than is evident from those proceedings. As those who participated in those proceedings submitted,the Part 10A Award Review concentrated on the main issues. There is simply no reference at all to any controversy over the wording of the cl 26.2 in the Full Bench Part 10A Decision;See paras [167]-[169] of that decision. That nothing had been argued by the Union to press for a departure from the relevant wording of the major antecedent Award (the 1998 Award) is an obvious indication that the intention of the parties never comprehended the outcome for which the appellant now seeks. We agree with Her Honour that the omission of the words was an ‘oversight’.

[114] Viewed in this context,not only was it open to Her Honour to correct a technical problem or anomaly,but given the statutory functions Her Honour was required to undertake,she was obliged to do so. It follows that we would reject the appellant’s ground of appeal that Her Honour acted beyond her jurisdiction under Item 6,Schedule 5 of the Transitional Act.

Appellant’s claims of procedural unfairness

[115] We turn now to the appellant’s submissions as to a denial of procedural fairness. For the reasons we expressed earlier,we do not consider Her Honour’s reference to her recollection of the drafting exercise undertaken during the Part 10A Award Review process was determinative of the process she was required to undertake under the Two Yearly Review of the Modern Award. Her Honour expressly acknowledged the statutory function she was required to perform and plainly,we repeat,made relevant findings in para [81] of the decision.

[116] Moreover,it is apparent that at no stage of the proceedings below was the Union denied an opportunity to respond to the submissions of the other parties or to comment upon the various drafts (including three of the drafts going back to 21 December 2012),which expressly referenced the twenty minute breaks as being paid at the ‘base rate of pay’. We note from references to the transcript of the proceedings before Her Honour that all parties were very much ‘alive’to the omission of the relevant words from the Award. Relevantly,at PN523,during submissions by the ARTIO,it was said:

    ‘... In the ARTIO's submission,this provision was not raised in any of the consultations concerning the making of the Road Transport and Distribution Award. We go a step further and submit that the "such crib breaks be paid for at ordinary rates"were inadvertently left out at the time of making of the RTD Award and should therefore be properly re-inserted,your Honour.’

And at PN544,in the AIG submissions,it was said:

    ‘We also say it's necessary to rectify an anomaly or technical problem arising from the award modernisation process. That is obviously the omission of those words. We further say,and set out in our submissions,that it's necessary to address an ambiguity or uncertainty as contemplated in section 160 of the Fair Work Act. I won't take you into the details again,but to obviously the point made by Mr Ryan that the previous primarily relevant federal award didn't provide for these breaks or comparable breaks to be paid at overtime rates.’

[117] For the grounds of a denial of procedural fairness to be made out,the appellant must demonstrate that once having reserved her decision,Her Honour introduced an entirely new issue which the parties were not aware of,and to which they had no opportunity to respond. From any objective analysis of what occurred during the Two Yearly Award Review,the very opposite is the case.

[118] For the aforementioned reasons,we make the following orders:

    1. Permission to appeal is refused.

    2. The appeal is dismissed.

    3. The stay order of 30 January 2014 made by Deputy President Sams is discharged.

Orders to that effect will be issued contemporaneously with this decision.

DEPUTY PRESIDENT

Appearances:

Mr M Gibian of Counsel,Mr A Howell of Counsel and Ms Kaltoum for the appellant.

Ms K Murphy,Solicitor for Followmont Transport Pty Ltd

Mr B Ferguson for the Australian Industry Group

Mr N Ward,Solicitor for Australian Business Industrial

Mr P Ryan for the Australian Road and Transport Industrial Organisation

Ms J Light for the Australian Federation of Employers and Industries

Hearing details:

2014,

Sydney:

21 February.

Printed by authority of the Commonwealth Government Printer

<Price code C, MA000038  PR548402 >

About this document
(1)
Code:
PR548402D
Title:
MA000038 - Decision - 12 Mar 2014
Effective:
12 Mar 2014
Updated:
12 Mar 2014
(0)
MA000038 - Decision - 12 Mar 2014
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