WESTERN AUSTRALIAN INDUSTRIAL MAGISTRATES COURT

CITATION : 2019 WAIRC 00346

DELIVERED : Thursday, 4 July 2019

FILE NO. : M 98 OF 2017

CLAIMANT

AND

Electricity Networks Corporation

Respondent

CatchWords : INDUSTRIAL LAW – Preliminary issue - Interpretation of enterprise agreement term – Application of clause 5.1(c) of the Western Power and CEPU Enterprise Agreement 2013

Legislation : Fair Work Act 2009 (Cth)

Instruments : Western Power and CEPU Enterprise Agreement 2013
Transport Workers (Airlines) Award 1988

Case(s) referred to

in reasons : Construction, Forestry, Maritime, Mining and Energy Union v Hay

Point Services Pty Ltd [2018] FCA 182

WorkPac Pty Ltd v Skene [2018] FCFA 131

Byrne v Australian Airlines Ltd (1995) 185 CLR 410

City of Wanneroo v Holmes (1989) 30 IR 362

Amcor Limited v Construction, Forestry, Mining and Energy Union (2005) 222 CLR 241

Kucks v CSR Ltd (1996) 66 IR 182

Amcor Ltd v CFMEU [2005] HCA 10

Re Harrison; Ex Parte Hames [2015] WASC 247

National Tertiary Education Union v La Trobe University [2015] FCAFC 142

Ford Motor Co Ltd v Amalgamated Union of Engineering and Foundry Workers [1969] QB 303

Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing & Allied Services Union of Australia v Australian Postal Corporation [2010] FMCA 688

Reeves v MaxiTRANS Australia Pty Ltd (2009) 188 IR 297

Result : Preliminary issue determined for respondent

Representation:

Claimant : Mr P. Mullally (agent) from Workclaims Australia

Respondent : Mr R. Wade (of counsel) from Ashurst Australia

REASONS FOR DECISION

Introduction

1          Electricity Networks Corporation (the Respondent) employed Frederick Posthumus (the Claimant) as a linesman commencing on or about 8 April 2014. On or about 24 February 2017, the Claimant was provided with a letter of termination and paid five weeks wages in lieu of notice. The Claimant says he was summarily dismissed on the same date following a work place injury in 2015.

2          It is unnecessary at this stage to reconcile the parties’ position with respect to the cessation of the Claimant’s employment.

3          The Claimant’s employment was covered by the Western Power and CEPU Enterprise Agreement 2013 (the Agreement).1

4          The parties agree that there is a preliminary issue for determination which may resolve the Claimant’s claim alleging the Respondent breached cl 5.1(c) of the Agreement by failing to act fairly and responsibly in ceasing the Claimant’s employment (and thereby contravening s 50 of the Fair Work Act 2009 (Cth) (FWA)).

5          The preliminary issue is the construction of cl 5.1(c) of the Agreement and its character, including how cl 5.1(c) is intended to operate in relation to the Agreement and, in particular, in relation to cl 23.

6          The Claimant contends that cl 5.1(c) of the Agreement:

• required the Respondent to act fairly and responsibly in exercising its rights and responsibilities under the Agreement;
• requires powers under the Agreement, including the ‘power’ to terminate an employee under cl 23, to be exercised fairly and responsibly consistent with the industrial notion of fairness and ‘fair go all round’ contained in the FWA; and
• may contain some aspirational words, but the use of the word ‘will’ at the end of the first sentence, coupled with the clause being entitled ‘Mutual Obligation’, places an obligation on the Respondent to act in the manner contained in cl 5.1(a) to (c) in ceasing the Claimant’s employment.

7          The Respondent contends:

• clause 5.1 of the Agreement is aspirational and does not independently give rise to any enforceable rights and obligations under the Agreement intended to give rise to a civil penalty under the FWA;
• in the alternative, the obligation of fairness and responsibility only attaches to existing rights and obligations under the Agreement; and
• the termination clause of the Agreement is procedural only and does not give rise to any right, obligation or circumstances leading to termination. Clause 23 is invoked only after a decision is made to terminate and cl 5.1(c) does not, or cannot, practically apply because it contains no rights or obligations of itself.

Construction of Clause 5.1 of the Agreement

8          The applicable principles for interpreting an enterprise agreement were referred to in Construction, Forestry, Maritime, Mining and Energy Union v Hay Point Services Pty Ltd [2018] FCA 182 [8] by reference to WorkPac Pty Ltd v Skene [2018] FCFA 131, and in summary include:

• The interpretation of an enterprise agreement begins with consideration and ordinary meaning of the words used, read as a whole and in context.2
• The interpretation turns on the language of the particular agreement, understood in light of its industrial context and purpose, and must not be interpreted in a vacuum divorced from industrial realities.3
• Industrial agreements are made for various industries in the light of the customs and working conditions of each and they are frequently couched in terms intelligible to the parties but without the careful attention to form and draftsmanship that one expects to find in an Act.4
• Narrow and pedantic approaches to the interpretation of an award are misplaced and a purposive approach to interpretation is appropriate.5
• An instrument should be construed as a whole construction that makes the various parts of an instrument harmonious.6

9          Clause 5 of the Agreement is entitled ‘Mutual Obligations’ and provides at cl 5.1:

Western Power remains committed to a strong working relationship with all employees based on mutual trust, good faith and respect, and in doing so will:

(a)                Provide a supportive and rewarding work environment;

(b)                Maintain high standards of work;

(c)                Act fairly and responsibly in exercising its rights and obligations under this Agreement; and

(d)                Engage employees in accordance with Schedule 1 when a definite decision has been made to introduce major change(s) that are likely to significantly affect employees. Western Power will discuss change(s) with affected employee(s) and use its best endeavours to avert or mitigate the adverse effects of the proposed changes. Western Power will also give prompt consideration of matters raised by employees. Employees may elect to have an employee representative / workplace delegate available to them at this time.

10       While one might wonder the utility in including non-obligatory clauses into enterprise agreements, the inclusion of provisions or expressions which involve no obligation appears to be a long-standing practice. Some such provisions or expressions being described as ‘aspirational’ or ‘hortatory’.7

11       Not every provision in an enterprise agreement is intended to impose an enforceable obligation on a party to expose that party to the possibility of a penalty for non-compliance.8

12       The introductory words9 making up the first sentence in cl 5.1 of the Agreement are clearly aspirational10. They purport to impose no particular obligation on the Respondent and merely demonstrate the Respondent’s desirable position with respect to its workforce.

13       The Claimant agrees that cl 5.1 contains some aspirational words but says that the use of the word ‘will’ at the end of the first sentence invokes an obligation on the Respondent to ‘act fairly and responsibly in exercising its rights and obligations under this Agreement’.

14       The use of the word ‘will’ often imports obligation. However, whether it was intended the word ‘will’ in cl 5.1 of the Agreement invoke an obligation, the failure of which attracts a possible penalty, needs to be seen in the context of the whole of the clause.

15       In cl 5.3(a) of the Agreement an employee/employer steering committee will meet at least biannually. It is unlikely the drafters of the Agreement intended that if a steering committee comprising both employer and employee representatives did not meet at least twice a year, the Respondent or its employees would be liable to a possible penalty under the FWA for breaching the Agreement.

16       Similarly, in cl 5.3(b) of the Agreement members (of the steering committee) will maintain high levels of integrity, confidentiality and engage in constructive behaviours. Leaving aside how high levels of integrity and constructive behaviour is to be assessed for the purposes of a breach, it is unlikely it was intended that where the steering committee exhibit ‘destructive’ behaviours, the Respondent or its employees would again be liable to a possible penalty under the FWA for breaching the Agreement.

17       Further, in cl 5.3(c) of the Agreement recommendations by the steering committee will be reached by consensus. Again, it is unlikely to be intended that where the steering committee do not, or have not, reached a consensus for recommendations, the Respondent or its employees be subject to possible penalties for breaching the Agreement.

18       Returning to cl 5.1, subclause (d) of the Agreement provides that the Respondent will discuss changes with affected employees and use best endeavours to avert or mitigate any adverse effects and the Respondent will give prompt consideration to matters raised by employees. Both statements contain concepts which represent desirable procedures on the Respondent’s part, being to use best endeavours and to give prompt consideration. Similarly, subclauses (a) and (b) can only be considered aspirational where concepts such as supportive, rewarding and high standards are undefined, difficult to quantify and largely subjective in nature and not otherwise referrable to other clauses in the Agreement, which are predominantly ‘belt and braces’ clauses directed towards the employees’ various conditions of employment as agreed between the Respondent and the relevant union.

19       Further support for this is found in cl 5.2 which contains the employees’ ‘obligations’ and includes displaying high standards of personal integrity, working in the best interests of the Respondent and customers, upholding policies and guidelines and not bringing the Respondent into disrepute. It could not reasonably be said that any of these statements were intended to operate as an obligation, the failure of which results in a breach of the Agreement attracting the possibility of a penalty.

20       Thus, when regard is had to the whole of cl 5 and the consistent use of the word will otherwise than in an obligatory sense, the word will in cl 5.1 was unlikely to have been intended to convey an obligation upon the Respondent, the failure of which would be a breach of the Agreement capable of attracting a possible penalty under the FWA.

21       The use of the words ‘Mutual Obligations’ in the heading of cl 5 does not alter the character of the clauses within but merely frames what the clause is intended to convey which is, in essence, a series of endorsements of no binding effect capable of giving rise to a breach of the Agreement with the possibility of a penalty under the FWA.

22       The Claimant refers to Byrne v Australian Airlines Ltd (1995) 185 CLR 410 and says that similar concepts to ‘fairness’ and ‘responsibility’, such as ‘unreasonableness’, ‘harshness’, ‘unjustness’, have been defined and quantified in industrial matters and are not considered aspirational. Therefore, there is no barrier in assessing the Respondent’s conduct by reference to it being fair and responsible.

23       Terms such as ‘unreasonable, unjust or harsh’ have been subject to significant judicial commentary. In the context of Byrne the term formed a clause within the Transport Workers (Airlines) Award 1988, that being ‘[t]ermination of employment by an employer shall not be harsh, unjust or unreasonable’ (where the termination may be with or without notice).11

24       The significant difference between the Claimant’s case and Byrne is that the Agreement contains no separate reference to protecting the employee from purported arbitrary dismissals. If it did so, on the Claimant’s contention, the Respondent would be required to act ‘fairly and responsibly’ in terminating an employee and for the termination not to be ‘harsh, unjust or unreasonable’. There is obvious duplicity.

25       In omitting an analogous clause in the Agreement, did the drafters intend for cl 5.1 to operate in the same way? That is, notwithstanding there is no express reference to the Respondent not terminating employment harshly, unjustly or unreasonably, was it impliedly intended for any unstated right or obligation on the Respondent, including termination, to be adjudged by reference to it being ‘fair’ and ‘responsible’?

26       In part, this question is answered having regard to the Respondent’s alternate argument.

27       The right or obligation on the Respondent that is said to enliven the requirement to act fairly and responsibly is termination of employment under cl 23 of the Agreement.

28       Clause 23 of the Agreement contains a series of notice provisions relevant to the Respondent and to the employee. The only exception to this is cl 23.1(g) where the Respondent may suspend an employee on pay to investigate a serious disciplinary matter.

29       The difficulty with the Claimant’s argument is that cl 23 of the Agreement says nothing of the circumstances that may result in termination, the process the Respondent is expected to follow before deciding to terminate or a clause prohibiting termination from being ‘harsh, unjust or unreasonable’. In that sense clause 23 is mechanical and operates in response to termination whether by the Respondent or an employee.

30       The only four obligations capable of giving rise to a breach of the Agreement and relevant to the Respondent arise out of cl 23:

(1)      to give the employee four weeks written notice of termination or provide payment in lieu of notice;

(2)      to give a casual employee one day’s notice of termination;

(3)      to give one additional week’s notice of termination to someone over the age of 45 years who has completed two years of continuous service; and

(4)      withholding monies based on the base rate plus allowance if the employee fails to give proper notice or leave before the notice period expires.

31       If the Respondent fails to do these things then it has, arguably, breached the Agreement and its contravention may attract a penalty under the FWA. However, it is difficult to understand how the Respondent is otherwise required to act fairly and responsibly in giving four weeks’ notice of termination once the decision to terminate has been made. The Respondent will either give four weeks’ notice of termination or it will not, and if it does not then this may amount to a breach of the Agreement. Attributes of fairness and responsibility do not attach to the giving of four weeks’ notice of termination.

32       Had cl 23 of the Agreement referred to the process of termination or the circumstances leading to termination, the Claimant’s argument may have merit (depending on the construction of cl 5), but this is not what cl 23 is directed towards. Furthermore, it is not, in my view, permissible to read into or infer from cl 23 of the Agreement that it was intended for the clause to operate as the basis upon which the decision to terminate is made or the process undertaken prior to terminate.

33       Therefore, and also in answer to the question posed above, it is unlikely that cl 5.1 or cl 5.1(c) was intended to operate to fill gaps in the Agreement by imposing inferred or implied rights or obligations on the Respondent. To find otherwise opens up the prospect of the parties importing rights or obligations that may never have been in the drafters’ contemplation or deliberately disregarded as part of the negotiations.

34       It is apparent from the language used and the requirements on the Respondent and employees that cl 23 is not enlivened until a party has made the decision to terminate and, thereafter, various obligations or requirements apply. As stated the only exception to this is cl 23.1(g) which seeks to preserve the employees’ pay where they are under investigation for a serious disciplinary matter.

35       Further, in my view, this construction of the interaction between cl 5.1 and cl 23 of the Agreement also supports the characterisation of cl 5 and cl 5.1 as aspirational and undermines the proposition that overlaying all of the Respondent’s rights and obligations, including those that remain unstated, is a blanket of fairness and responsibility capable of itself giving rise to a breach of the Agreement and penalties under the FWA.

36       I also note that this interpretation of cl 5 of the Agreement does not extinguish certain analogous rights that may be available to the Claimant under the FWA, including under s 365 and/or s 385 of the FWA as it relates to dismissal.

Outcome

37       Accordingly, I am satisfied that the appropriate character or construction of cl 5, including cl 5.1(c), of the Agreement is that it is aspirational, and it was not intended to impose a binding obligation on the Respondent (or its employees, or any steering committee) capable of giving rise to a breach of the Agreement.

38       However, if I am wrong about this, I am also satisfied that in the alternative cl 5.1(c) of the Agreement only operates in respect of a right or obligation on the Respondent that expressly arises under the Agreement. In the Claimant’s case the right or obligation said to be enlivened is contained in cl 23, which under the Agreement operates only to prescribe the notice to be given by both parties in the event of termination. Clause 5.1(c) of the Agreement does not operate to imply into cl 23 a separate and unstated obligation that the decision to terminate must be ‘fairly and responsibly’ made.

D. SCADDAN

INDUSTRIAL MAGISTRATE

1 Schedule 1 to these reasons contains the relevant clauses – 5 and 23.

2 City of Wanneroo v Holmes (1989) 30 IR 362 at 378.

3 Amcor Limited v Construction, Forestry, Mining and Energy Union (2005) 222 CLR 241 [2] and Holmes at 378.

4 Holmes at 378.

5 Kucks v CSR Ltd (1996) 66 IR 182; Amcor Ltd v CFMEU [2005] HCA 10.

6 Re Harrison; Ex Parte Hames [2015] WASC 247 [50].

7 National Tertiary Education Union v La Trobe University [2015] FCAFC 142 [30] (referring to Ford Motor Co Ltd v Amalgamated Union of Engineering and Foundry Workers [1969] QB 303 at 330).

8 Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing & Allied Services Union of Australia v Australian Postal Corporation [2010] FMCA 688 [161].

9 ‘Western Power remains committed to a strong working relationship with all employees based on mutual trust, good faith and respect…’

10 The words being similar in nature to that considered in Reeves v MaxiTRANS Australia Pty Ltd (2009) 188 IR 297.

11 Clause 11(a).

Schedule 1: Western Power and CEPU Enterprise Agreement 2013

5.  Mutual Obligations
   1.                    Western Power

Western Power remains committed to a strong working relationship with all employees based on mutual trust, good faith and respect, and in doing so will:

(e)                Provide a supportive and rewarding work environment;

(f)                Maintain high standards of work;

(g)               Act fairly and responsibly in exercising its rights and obligations under this Agreement; and

(h)               Engage employees in accordance with Schedule 1 when a definite decision has been made to introduce major change(s) that are likely to significantly affect employees. Western Power will discuss change(s) with affected employee(s) and use its best endeavours to avert or mitigate the adverse effects of the proposed changes. Western Power will also give prompt consideration of matters raised by employees. Employees may elect to have an employee representative / workplace delegate available to them at this time.

5.2                       Employees

Employees agree to:

(a)                Display high standards of personal integrity;

(b)               Work in the best interests of the Company and customers;

(c)                Uphold the operating policies and quality control guidelines set from time to time by the Company; and

(d)               Refrain from acting in a manner which brings, or could bring, the Company into disrepute.

5.3                       Steering Committee

An employer / employee based steering committee will continue to oversee matters arising from this Agreement and other matters as agreed.

(a)                The committee will meet at least biannually and as often as required and agreed, and be made up of:

(i)                 No more than 10 cross functional employee representatives as nominated by the CEPU; and

(ii)               No less than 3 management representatives

(b)               Members will maintain high levels of integrity, confidentiality where it is deemed appropriate and engage in constructive behaviours to ensure that the best interests of Western Power and its employees are maintained.

(c)                Any recommendations made by the Steering Committee will be reached by consensus.

…

23.      Termination of Employment
    1.                Western Power will give employees, in writing, 4 weeks' notice of termination or provide payment in lieu of notice or part thereof.

(a)                Employees are entitled to an additional week's notice if they have completed at least 2 years of continuous service and are over the age of 45.

(b)               An employee, other than a casual employee, may terminate their employment by providing 4 weeks notice, in writing.

(c)                A casual employee's employment with Western Power may be terminated at any time by either Western Power or the casual employee providing the other with 1 day's notice.

(d)               Western Power and the employee may agree to a lesser period of notice.

(e)                If an employee fails to give Western Power the proper period of notice, or leaves Western Power before that notice expires, Western Power may withhold monies equal to the value of the number of days for which notice was not given. Monies withheld under this clause will be based on the employee's Base Rate plus any allowances they would have earned if they had worked in accordance with their rostered ordinary hours.

(f)                Where an employee's employment has been terminated for serious misconduct, Western Power reserves the right to not provide notice or payment in lieu to the employee.

(g)               Western Power has the right to suspend an employee with pay for the purposes of investigating a serious disciplinary matter.