INTERPRETATION OF SUB-CLAUSE 48.2 OF THE DEPARTMENT OF JUSTICE PRISON OFFICERS' INDUSTRIAL AGREEMENT 2020

WESTERN AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION

CITATION : 2023 WAIRC 00016

CORAM : Commissioner T Emmanuel

HEARD : FRIDAY, 28 OCTOBER 2022, WEDNESDAY, 2 NOVEMBER 2022, TUESDAY, 8 NOVEMBER 2022

DELIVERED : TUESDAY, 10 JANUARY 2023

FILE NO. : APPL 15 OF 2022

BETWEEN : Western Australian Prison Officers' Union of     Workers

Applicant

AND

Minister for Corrective Services

Respondent

CatchWords : Interpretation of sub-cl 48.2 of the Department of Justice Prison Officers’ Industrial Agreement 2020 – Approach to be taken when interpreting an industrial agreement – Clause unambiguous and no need to strain for meaning  

Legislation : Industrial Relations Act 1979 (WA): s 46    

Result : Declaration made

Representation:

Applicant : Mr J Theodorsen (as agent)

Respondent : Mr J Carroll (of counsel)

Cases referred to in reasons:

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

New South Wales Aboriginal Land Council v Minister Administering the Crown Lands Act [2016] HCA 50

The Registrar of Titles of the State of Western Australia v Franzon & others (1975) 132 CLR 611

Reasons for Decision

1         The Western Australian Prison Officers’ Union (Union) and the Minister for Corrective Services (Minister) are in dispute about the correct interpretation of sub-cl 48.2 of the Department of Justice Prison Officers’ Industrial Agreement 2020 (Industrial Agreement).

2         The Union filed an application for an interpretation of sub-cl 48.2 under the Industrial Relations Act 1979 (IR Act).

3         In essence, the dispute is about whether prior service in a substantive appointment counts as prior service for the purpose of cl 48.

4         Neither party led evidence.

Question to be answered

5         The Union asks:

When paying a higher duties allowance under sub-clause 48.2 of the Industrial Agreement, must the employer pay an amount equivalent to the increment the Officer had attained in the previous 18 months, regardless of whether:

(i) the Officer attained the increment through higher duties or substantive appointment; or

(ii) the Officer had a break in acting of less than 18 months following a disciplinary outcome? (Question)

6         The Union says that the reference in sub-cl 48.2 to ‘acting in another position in the preceding 18 months’ means serving in a position at that classification level or higher, whether or not a prison officer serves in a substantive position or by a higher duties arrangement.

7         The Minister says that only prior service in an acting appointment, rather than a substantive appointment, qualifies as service for the purpose of sub-cl 48.2.

The clause

8         Clause 48 provides:

48. Higher Duties Allowance

48.1 An Officer required to act for two hours or longer in a Classification with a higher Hourly Annualised Rate of Pay than their ordinary Hourly Annualised Rate of Pay shall be paid such higher Hourly Annualised Rate of Pay.

48.2 Where an Officer is directed to act in a Classification that has an incremental range of Annualised Salaries, the Officer shall be entitled to receive an increase in the higher duties allowance equivalent to the increment the Officer would have received had the Officer been appointed to such position. If the Officer has been acting in another position in the preceding 18 months which also attracted a higher duties allowance, service in the previous position shall count as qualifying service towards an increase in the higher duties allowance payable.

The Union’s submissions

9         The Union says this application arises in the context of a dispute between its member, Ms Jade Smith, and the Minister.

10      Ms Smith was a Senior Officer. She had served in that role for enough time to advance to the ‘Thereafter’ increment under Schedule A to the Industrial Agreement. In May 2021, the Minister reduced Ms Smith’s classification following a disciplinary process. From November 2021, the Minister directed Ms Smith to act as Senior Officer on a higher duties basis, paying her a higher duties allowance at the ‘1st Year’ increment of the Senior Officer salary range. In effect, after Ms Smith’s demotion, the Minister did not recognise Ms Smith’s prior service in her substantive appointment as Senior Officer.

11      The Union says the Minister’s interpretation of sub-cl 48.2 is wrong. In summary, the Union says that sub-cl 48.2 should be read such that any prior service in a higher position counts toward incremental increases in the higher duties allowance, as long as any break between prior service and the current higher duties is less than 18 months.

12      The Union argues that the text of sub-cl 48.2 in context shows that the parties to the Industrial Agreement objectively intended to recognise all service at a higher classification in the previous 18 months when calculating increments. Further, the Union says that there is nothing in sub-cl 48.2 or its context that shows the parties intended the entitlement to apply differently to employees whose break in service was due to a disciplinary outcome, and there is no basis for implying a term to that effect.

13      The Union points to various authorities and argues:

(a) the rules of interpretation that apply to contracts also apply to industrial agreements;

(b) industrial agreements should be interpreted generously, not narrowly;

(c) industrial agreements should be construed beneficially for employees, where such interpretation is reasonably open;

(d) meanings that avoid injustice are preferred, and even a strained interpretation may be reasonable to achieve this; and

(e) a term may only be implied if, among other things, the agreement would be ineffective without it and it is so obvious that it goes without saying.

14      The Union says that the reference in sub-cl 48.2 to ‘acting in another position in the preceding 18 months’ means serving in a position at that classification level or higher, whether or not a prison officer serves in a substantive position or by a higher duties arrangement.

15      The Union says this is because:

(a) the Industrial Agreement does not define ‘acting’;

(b) the ordinary meaning of ‘acting’ can be broad or narrow;

(c) accordingly, a question arises about the parties’ objective intention in drafting the Industrial Agreement;

(d) a broader meaning of ‘acting’ is consistent with accepted rules of interpretation, including interpreting the clause liberally, which the Union says is appropriate because sub-cl 48.2 is beneficial; and

(e) adopting a narrow meaning of ‘acting’ could lead to strange and unjust results, which the parties could not have intended.

16      The Union says the definition of ‘acting’ includes ‘serving temporarily’ or ‘functioning’. The Union says ‘serving temporarily’ is narrower, and likely to only recognise service of a person on higher duties, rather than service in a substantive role. However the Union argues that ‘functioning’ means anyone undertaking ‘normal work, activities or processes’ and would include service in a substantive role as well.

17      The Union says because the Industrial Agreement is an entire agreement that displaces the relevant award, it is reasonable to assume the parties intended the Industrial Agreement would deal exhaustively with its subject matter. The context leads to the conclusion that the parties intended sub-cls 48.1 – 48.2 to deal comprehensively with the entitlements for employees who work in higher positions; and to benefit employees. The Union says: ‘It is hard to imagine the parties thought that recent prior service following a promotion should not be recognised, whereas service performed merely on a higher duties basis should.’

18      The Union acknowledges that the Minister’s interpretation is available from the text of the Industrial Agreement, but says that objectively the parties could not have intended the meaning the Minister contends, because it would produce strange and unjust results.

19      The Union argues that a narrow reading of sub-cl 48.2 is inconsistent with a generous and beneficial construction of sub-cl 48.2 because it restricts or limits the entitlement without the Industrial Agreement expressing a clear intention to do so.

20      The Union says the Minister’s interpretation results in injustice, for example between employees who have prior service in a substantive role or in an acting role where they suffer a stress-related injury and voluntarily regress to a less demanding role in a lower classification to assist their rehabilitation. If after 6 months they recover and gain higher duties as a Senior Officer, the employee who had prior service in a substantive Senior Officer role will be paid the lowest increment level of higher duties, while the employee who had prior service in an acting Senior Officer role will be paid at the highest increment. The Union also points to injustice in a scenario of regression due to redeployment.

21      Fundamentally, the Union’s argument in relation to injustice is that an employee is penalised if their service follows a promotion to a position (as opposed to performing a higher position on an acting basis). The Union says a construction that produces such a result is neither generous nor beneficial. It would be so unjust that it would be permissible to strain for an alternative meaning (although the Union says its construction of sub-cl 48.2 does not strain the text).

22      The Union argues that its construction of sub-cl 48.2 provides an equitable and logical outcome that sits comfortably with the text of the provision in context and is consistent with accepted rules of interpretation.

23      The Union argues that there is nothing in sub-cl 48.2 that says that a person demoted for disciplinary reasons who works in a higher position within 18 months should have their prior service disregarded. An alternative view would involve implying a term in the Industrial Agreement, to specify that sub-cl 48.2 operates differently in the case of an employee who had a break in service at a particular classification level due to disciplinary action. Such a term is not necessary for the Industrial Agreement’s operation and there is no reason to imply such a term, let alone that it would be so obvious that it goes without saying.

24      The Union says the answer to the Question is ‘yes’ and asks the Commission to declare:

That the true interpretation of cl 48.2 of the Department of Justice Prison Officers’ Industrial Agreement 2020 is as follows:

When calculating the higher duties allowance payable under clause 48.2, the employer must pay the Officer an amount equivalent to the increment the Officer had attained in the previous 18 months, regardless of whether:

(i)                  the Officer attained the increment through higher duties or substantive appointment; or

(ii)               the Officer had a break in acting of less than 18 months following a disciplinary outcome.

The Minister’s submissions

25      The Minister says the Commission should reject the Union’s contention that ‘acting in a position’ in the second sentence of sub-cl 48.2 means ‘working in a position’, so that service in a higher classification in the previous 18 months is qualifying service for the purpose of calculating the increments for the higher duties allowance, regardless of whether the prison officer was ‘acting’ in the role or was substantively appointed to the role when they provided service. The Minister says this is for three reasons.

26      First, in the context in which ‘acting’ appears in the second sentence of sub-cl 48.2, the relevant definition is plainly ‘serving temporarily; substitute’. To read ‘acting in’ as ‘working in’ would give the term a meaning other than its ordinary and natural meaning.

27      Second, to read ‘acting in’ as ‘working in’ fails to have regard to the rest of the words in the second sentence of sub-cl 48.2:

acting in another position in the preceding 18 months which also attracted a higher duties allowance…(Minister’s emphasis)

If the prison officer was previously substantively appointed to the higher position, they would not have received a higher duties allowance, but would have been paid the annualised salary of the higher classification. The rest of the words in the second sentence of sub-cl 48.2 mean that the clause cannot mean what the Union says it means.

28      Third, ‘act’ is used in sub-cl 48.1 and the first sentence of sub-cl 48.2. Sub-clause 48.1 is plainly directed to the ordinary sense of the term ‘act’, being temporary service in a position other than one’s ordinary position. The purpose of the clause (providing for a higher duties allowance for acting in a role other than one’s ordinary role) confirms that. The Minister says the term ‘act’ in sub-cl 48.2 can bear no meaning other than its ordinary meaning (being temporary service in a position other than one’s ordinary position) because the sentence itself draws comparisons to substantive appointment to a higher classification. Accordingly, the Minister says ‘act’ in sub-cl 48.1 and the first sentence of sub-cl 48.2 are unambiguously used in the ordinary sense of the word, being temporary service in a position other than one’s ordinary position.

29      The Minister says there is no ambiguity sub-cl 48.2. It is absolutely clear that ‘acting’ means acting temporarily in that role. The Union’s construction seeks the Commission to find that ‘act’ should be given different meanings in sub-cl 48.1 and sub-cl 48.2. The Minister argues that it is a sound rule of construction to give the same meaning to the same words appearing in different parts of a statute unless there is reason to do otherwise: The Registrar of Titles of the State of Western Australia v Franzon & others (1975) 132 CLR 611, 618 per Mason J.

30      The Minister submits that the word ‘acting’ should not be construed in different ways in sub-cl 48.1 and sub-cl 48.2. He says:

[A]n ordinary principle, a textual construction, not just statutory construction, is that a word would ordinarily have been given the same meaning throughout the instrument. The closer those words are to each other in the instrument, the more likely they’re to be given the same meaning – so in the same clause, in the same sentence, it’s less likely that an ordinary, reasonable reader of that instrument would be construing the same word to mean different things when they’re, essentially, next to each other in a clause.

31      Accordingly, the Minister submits that to understand the word ‘acting in’ in the relevant sentence, one must read the rest of the sentence. The rest of the sentence is ‘acting in another position in the preceding 18 months which also attracted a higher duties allowance.’ Understood in its full context, ‘acting’ means temporarily working in a role in that sense of acting, and not just simply working in a role, whether substantively appointed or not.

32      The Minister argues that the Union’s construction requires ‘re-writing it completely. It’s not adding one word, it’s not a mere infelicity, it’s completely re-writing the parties’ agreement. No amount of allowing for drafters not being parliamentary draftspersons could justify such an approach.’ The Minister says that the Union’s construction goes well beyond straining for meaning.

33      The Minister submits that while it may be possible to strain some language to avoid unjust outcomes, one cannot re-write the agreement to avoid unjust outcomes. Further, the Minister argues that in this matter no particular injustice would arise. He says the scenarios about voluntary regression due to temporary illness or redeployment are exceedingly unlikely and there is a comprehensive compensatory scheme.

34      In relation to the factual foundation for the dispute that led to this application, the Minister says that it is not unjust that a person who is demoted from Senior Officer does not ‘get the value’ of their prior service as a Senior Officer for higher duties allowances. This is because the main (if not only) rationale for a demotion for disciplinary reasons would be that the conduct the subject of the disciplinary action makes the employee unsuitable for the higher role. In those circumstances, it is not unfair that the employee would not get the benefit of that prior service when acting up.

35      The Minister says the proper test is to construe the parties’ objective intentions, as embodied by the text of the instrument, understood in its proper context. Entire agreement or not, it is not for the Commission to consider what the parties should have put in their agreement. Rather, the Commission must objectively consider what the text of the Industrial Agreement means.

36      The Minister relies on the reasoning of the majority of the High Court in New South Wales Aboriginal Land Council v Minister Administering the Crown Lands Act [2016] HCA 50 at [33]:

[T]hat to commence the process of construction by posing the type of construction to be afforded – liberal, broad or narrow – may obscure the essential question regarding the meaning of the words used.  It is one thing to say that no restricted construction should be given to legislation which confers benefits; but if the focus is on the meaning of specific words, the circumstance for a liberal application may not arise.

Consideration

37      The Commission has the power under s 46 of the IR Act to declare the true interpretation of the Industrial Agreement.

38      Smith AP (as she was then, with whom Scott CC agreed) set out the role of the Commission and the approach to be taken when interpreting an industrial agreement under s 46 of the IR Act in Public Transport Authority of WA v The Australian Rail, Tram and Bus Industry Union of Employees, WA Branch [2017] WAIRC 00869; [2017] WAIRC 00830. I respectfully agree with her reasoning and apply it in this matter.

39      The principles that apply to the interpretation of industrial agreements are the principles that apply to interpretation of contracts. The Full Bench said at [21]-[23] of Fedec v The Minister for Corrective Services [2017] WAIRC 00828; (2017) 97 WAIG 1595:

[21] The approach that is to be applied when interpreting an industrial agreement is well established.  This is:

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

(b) The task of construction of an industrial agreement is to be approached in a way that allows for a generous construction:  City of Wanneroo v Holmes [1989] FCA 369; (1989) 30 IR 362.

(c) Industrial agreements are made for industries in light of the customs and working conditions of each industry and must not be interpreted in a vacuum divorced from industrial realities:  George A Bond & Co Ltd (in liq) v McKenzie [1929] AR (NSW) 498; City of Wanneroo v Holmes (378 - 379) (French J).

[22] The general principles that apply to the construction of contracts and other instruments also apply to the construction of an industrial agreement.  In Re Harrison; Ex parte Hames [2015] WASC 247, Beech J said [50] - [51]:

The general principles relevant to the proper construction of instruments are well‑known. In summary:

(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; and

(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 (Electricity Generation Corporation v Woodside Energy Ltd [2014] HCA 7; (2014) 251 CLR 640 [35] (French CJ, Hayne, Crennan & Kiefel JJ); Kidd v The State of Western Australia [2014] WASC 99 [122]; Red Hill Iron Ltd v API Management Pty Ltd [2012] WASC 323 [106] - [112]; Primewest (Mandurah) Pty Ltd v Ryom Pty Ltd [2014] WASCA 28 [55] (Martin CJ, Pullin & Murphy JJA agreeing)).

These general principles apply in the construction of an industrial agreement (Director General, Department of Education v United Voice WA [2013] WASCA 287 [18] - [20] (Pullin J, Le Miere J agreeing), [83] (Buss J)). The industrial character and purpose of an industrial agreement is part of the context in which it is to be construed (Amcor Ltd v Construction, Forestry, Mining & Energy Union [2005] HCA 10; (2005) 222 CLR 241 [2] (Gleeson CJ and McHugh J); Director General v United Voice [81]; see also Amcor v CFMEU 66 (Kirby J), 129 - 130 (Callinan J)).

[23] To these principles, the following observations made by Pullin J in Director General, Department of Education v United Voice WA [2013] WASCA 287; (2013) 94 WAIG 1 [18] - [19] should be added:

The Agreement has to be construed to determine what the intention of the parties was at the time the Agreement was entered into. This has to be determined by ascertaining what a reasonable person would have understood the words of the Agreement to mean taking into account the text, the surrounding circumstances known to the parties and the purpose and object of the transaction: Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52; (2004) 219 CLR 165 [40]; Pacific Carriers Ltd v BNP Paribas [2004] HCA 35; (2004) 218 CLR 451 [22].

Surrounding circumstances may only be taken into account if the ordinary meaning of the words used by the parties is ambiguous or susceptible of more than one meaning: Codelfa Construction Pty Ltd v State Rail Authority of New South Wales [1982] HCA 24; (1982) 149 CLR 337, 352; McCourt v Cranston [2012] WASCA 60 [23].

40      When interpreting industrial agreements, the Commission applies the general principles that apply to the construction of contracts, to determine the parties’ objective intention as expressed in the text of the industrial agreement having regard to its context.

41      The Industrial Agreement was made between the Union and Minister. It was registered on 18 December 2020 and its nominal expiry date is 10 June 2022. It applies throughout the Western Australia to prison officers employed in the classifications set out in Schedule A to the Industrial Agreement. The Industrial Agreement replaces in full the terms of the Prison Officers’ Award.

42      Schedule A to the Industrial Agreement sets out the annualised salary for each classification. Most classifications have an incremental range of annualised salaries.

43      Clause 48 is set out in [8] above. ‘Act’ and ‘acting’ are not defined. Clauses 34.4(b), 154 and 172 of the Industrial Agreement also use those terms.

44      The Macquarie Dictionary (online at 9 January 2023) provides:

Acting

adjective

1. Serving temporarily; substitute: acting governor.

2. That acts, functioning.

3. Provided with stage directions; designed to be used for performance: an acting version of a play.

Noun

4. Performance as an actor.

5. The occupation of an actor.

6. Pretence; make believe.

45      The Union’s construction of sub-cl 48.2 does not sit comfortably with the text of the provision in context. I am not persuaded that ‘act’ should be given different meanings in sub-cl 48.1 and sub-cl 48.2, (or indeed, different meanings within sub-cl 48.2).

46      In the context in which ‘acting’ appears in the second sentence of sub-cl 48.2, it clearly means ‘serving temporarily; substitute’ and not ‘working in’. This is because:

(a) acting’ in the second sentence of sub-cl 48.2 refers to acting in another position ‘which also attracted a higher duties allowance’. Working in a substantive position would not also attract a higher duties allowance, and therefore ‘acting’ could not mean ‘working in’; and

(b) the purpose of cl 48 is to provide for a higher duties allowance for acting in a position other than a prison officer’s ordinary position. Plainly, ‘act’ in sub-cl 48.1 can only have the ordinary meaning of temporary service in a position other than one’s ordinary position. ‘Act’ in the first sentence of sub-cl 48.2 can also only mean temporary service in a position other than one’s ordinary position, because the sentence itself distinguishes between temporary service in a position other than one’s ordinary position and a substantive appointment.

47      For the reasons given by the Minister, I consider that the two scenarios outlined by the Union are unlikely. But in any event, while it may be possible in certain circumstances to strain language to avoid unjust outcomes, the Commission cannot re-write the parties’ agreement.

48      Allowing for a generous construction and that industrial agreements are usually not drafted with careful attention to form by those experienced in drafting statutory instruments or documents with legal effect, I consider that the objective intention of the parties, embodied in the words they have used in the Industrial Agreement, is only to give the higher increment on acting to employees who have acted in a higher position on a temporary (and not substantive) basis in the previous 18 months. The clause is not ambiguous and there is no need to strain for meaning. In my view, this is what a reasonable person would understand sub-cl 48.2 to mean. To understand otherwise would be to re-write the parties’ agreement.

49      Further, to the extent that an employee is demoted for disciplinary reasons because their conduct the subject of the disciplinary action made them unsuitable for the higher position, it would not be unfair that the employee would not get the benefit of prior service when acting up.

50      The text of sub-cl 48.2 in context shows that the parties to the Industrial Agreement did not intend to recognise all service at a higher classification in the previous 18 months when calculating increments. Only prior service in an acting appointment qualifies as service for the purpose of sub-cl 48.2. Prior service in a substantive appointment does not qualify as service for the purpose of sub-cl 48.2. Accordingly, the answer to the Question is ‘No’.

51      When paying a higher duties allowance under sub-clause 48.2 of the Department of Justice Prison Officers’ Industrial Agreement 2020, a prison officer is not entitled to an allowance equivalent to the increment the prison officer had attained in the previous 18 months if the prison officer only achieved that increment within the previous 18 months when substantively appointed to the higher position and did not achieve that increment when acting in the higher position.

52      A declaration will issue.