1
Fair Work Act 2009
s.604 - Appeal of decisions
United Voice
v
MSS Security Pty Ltd T/A MSS Security
(C2016/1353)
VICE PRESIDENT WATSON
DEPUTY PRESIDENT BOOTH
DEPUTY PRESIDENT DEAN MELBOURNE, 3 AUGUST 2016
Appeal against decision [2016] FWCA 2774 of Deputy President Sams at Sydney on 23 May
2016 in matter number AG2015/6555 – Permission to appeal – Whether Commission has
jurisdiction to vary enterprise agreement that had ceased to operate – Whether agreement
had ceased to operate – Finding of ambiguity or uncertainty – Exercise of discretion – Fair
Work Act 2009, ss. 53, 54, 217 and 604.
Introduction
[1] This decision concerns an application for permission to appeal by United Voice
against a decision of Deputy President Sams handed down on 23 May 2016.1 The decision of
the Deputy President under s.217 of the Fair Work Act 2009 (the Act) was to make a variation
to two agreements to remove an ambiguity and/or uncertainty in identically worded clauses
for an “aviation allowance” in the MSS Security Enterprise Agreement (QLD) 2011-2014
(2011 Agreement) and the MSS Security Aviation QLD Enterprise Agreement 2014-2017
(2014 Agreement). The application to vary the Agreements was made by MSS Security Pty
Ltd (MSS Security) on 4 November 2015.
[2] At the hearing of the matter on 21 July 2016, Mr R. Reed of counsel, with Mr L.
Forsyth, appeared on behalf of United Voice. Mr R. Dalton of counsel, with Mr J. Nguyen,
appeared on behalf of MSS Security.
Background
[3] The MSS Security Agreements each contained a clause providing for an aviation
allowance or similarly titled allowance that provides as follows:
“The following all purpose allowance will apply per hour to employees working at an
airport or seaport performing the following functions: passenger screening, checked
bag screening including x-ray and or trace element detection (i.e. Barringer machine
or similar), kerbside management, freight screening, operation of control room and
other functions within the airport or seaport precinct.”
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DECISION
E AUSTRALIA FairWork Commission
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[4] The aviation allowance is expressed as a dollar amount payable per hour to MSS
Security’s employees at Queensland airports and seaports when the employees performed any
functions within an airport or seaport precinct. A dispute over the interpretation of the clause
arises from the reference to the allowance being expressed as an “all purpose” allowance.
MSS Security regarded the allowance as a flat hourly allowance, calculated and payable on a
standalone basis in equal amounts for every hour worked, but not to be increased by
percentage based penalties for overtime, shift work, weekends and public holidays. United
Voice contends that the normal meaning of “all purpose” is that the amount is added to the
normal hourly rate and applicable penalties are applied on the aggregate amount.
[5] After the 2014 Agreement was reached, United Voice brought court proceedings
against MSS Security alleging breach of the aviation allowance clause under both
Agreements. United Voice claimed that the aviation allowance clause required the hourly
allowance to be added to the ordinary rate of pay, and penalties to be calculated on the basis
of the loaded hourly rate. Prompted by United Voice’s claim, MSS Security applied to the
Commission to vary the aviation allowance clause in both Agreements to state clearly that the
allowance was a standalone hourly payment and not required to be increased by other penalty
calculations.
[6] The Deputy President found that there was an ambiguity or uncertainty in the aviation
allowance clauses of the Agreements and varied both in the terms sought by MSS Security.
Nature of the Appeal
[7] An appeal lies with the permission of the Commission. The Commission must grant
permission if it considers that it is in the public interest to do so. Other grounds for granting
permission may also be available. The decision to approve the variation involves the
application of a number of statutory tests, many of which involve the exercise of discretion as
described by the High Court in Coal and Allied v AIRC.2 In that case Gleeson CJ, Gaudron
and Hayne JJ said:3
“"Discretion" is a notion that "signifies a number of different legal concepts". In general
terms, it refers to a decision-making process in which "no one [consideration] and no
combination of [considerations] is necessarily determinative of the result." Rather, the
decision-maker is allowed some latitude as to the choice of the decision to be made.
The latitude may be considerable as, for example, where the relevant considerations
are confined only by the subject-matter and object of the legislation which confers the
discretion. On the other hand, it may be quite narrow where, for example, the decision-
maker is required to make a particular decision if he or she forms a particular opinion
or value judgment.” (references omitted)
[8] Discretionary decisions are subject to review on the grounds expressed by the High
Court in House v The King:4
“The manner in which an appeal against an exercise of discretion should be determined
is governed by established principles. It is not enough that the judges composing the
appellate court consider that, if they had been in the position of the primary judge, they
would have taken a different course. It must appear that some error has been made in
exercising the discretion. If the judge acts upon a wrong principle, if he allows
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extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he
does not take into account some material consideration, then his determination should
be reviewed and the appellate court may exercise its own discretion in substitution for
his if it has the materials for doing so. It may not appear how the primary judge has
reached the result embodied in his order, but, if upon the facts it is unreasonable or
plainly unjust, the appellate court may infer that in some way there has been a failure
properly to exercise the discretion which the law reposes in the court of first instance.
In such a case, although the nature of the error may not be discoverable, the exercise of
the discretion is reviewed on the ground that a substantial wrong has in fact occurred.”
[9] Insofar as any aspect of the decision is not properly considered a discretionary
decision we are required to determine whether the decision is correct.5
[10] The decision under appeal involves a number of conclusions and findings. The
grounds of appeal seek to challenge several of them. It is necessary to determine the relevant
appeal principles by reference to the particular conclusion challenged through the appeal
grounds.
The Grounds of Appeal
[11] The grounds of appeal advanced by United Voice may be divided into three broad
categories:
The Deputy President erred in law in finding that the Commission has power to vary
the 2011 Agreement under s.217 of the Act in circumstances where the 2011
Agreement had ceased to cover aviation employees from 28 November 2014 and had
ceased to operate from 8 December 2015;
The Deputy President erred in fact and law in finding that there was ambiguity or
uncertainty in the aviation allowance provision contained in clause 3.4.6 of the 2011
Agreement and also in the table to clause 5(c) of Schedule A to the 2014 Agreement;
In the event that the Deputy President was correct in finding that there was an
ambiguity or uncertainty in the relevant provisions in the Agreement, he erred in the
exercise of his discretion to vary the relevant provisions in the manner contended for
by MSS Security.
[12] United Voice submits that it is in the public interest for the Commission to grant
permission to appeal for reasons including:
The appeal concerning the 2011 Agreement raises a matter of general importance,
namely whether the Commission has power under s.217 of the Act to vary an
enterprise agreement which has ceased to operate;
The decision to vary the Agreements otherwise manifested an injustice;
The decision was otherwise counter-intuitive; and
The decision was attended with sufficient doubt to warrant its reconsideration.
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[13] We will consider each of these grounds in turn.
Jurisdiction
[14] United Voice submits that the application with respect to the 2011 Agreement was
made and determined without a proper jurisdictional basis. It submits that the 2011
Agreement ceased to apply to aviation employees on 28 November 2014 when the 2014
Agreement commenced and a state agreement that commenced on 8 December 2015 replaced
the 2011 Agreement for other employees. It submits that in these circumstances MSS Security
did not have standing to make the application lodged on 4 November 2015 and the
Commission did not have jurisdiction to determine it.
[15] This ground involves a construction of the provisions of the Act. It is not a
discretionary decision. As it involves the jurisdiction of the Commission to entertain the
application and a novel question concerning applications to vary agreements that may have
been replaced or superseded we consider that it is in the public interest to grant permission to
appeal.
[16] Section 217 of the Act confers jurisdiction on the Commission to entertain an
application to vary an agreement “on application” by one or more employers covered by the
agreement (amongst others not presently relevant). Section 53 provides that an enterprise
agreement covers an employer if the agreement is expressed to cover the employer but does
not cover an employer if it has ceased to operate. Section 54 provides that an agreement
ceases to operate when there is no employee to whom the agreement applies.
[17] An enterprise agreement operates by creating obligations on an employer with respect
to one or more of its employees. When the application was made in November 2015, the 2011
Agreement continued to operate in relation to some employees. MSS Security was therefore
covered by the Agreement and its application was validly made. In our view, the valid
application invoked the jurisdiction of the Commission to entertain the application
notwithstanding that the Agreement had apparently ceased to cover the employer by the time
the application was determined. The position may be different for an agreement that has
ceased to cover an employer when the application is made. It is not necessary to determine
this question in this case.
[18] This ground of appeal must therefore be dismissed.
Ambiguity
[19] United Voice submits that there was no ambiguity in the clauses in question. The
principles applicable to determining the existence of an ambiguity are well established.6 The
threshold for finding ambiguity or uncertainty is not a high one. We are satisfied that the
Deputy President applied the established approach.
[20] Having regard to the provisions of the Agreements, including the lack of any
explanation of the meaning of the term “all purpose” in the Agreements, the alternative
contentions as to its meaning, and the consideration of its relevance to aggregate wage
employees, we see no error in the Deputy President’s analysis. One possible meaning of “all
purpose” is that it is paid at all times – when working overtime, weekends and public
holidays, in addition to the penalties that are payable of such hours. An alternative is that the
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allowance is loaded by such penalties. The application of the allowance to aggregate wage
employees is another complication. The finding of ambiguity was one clearly open to the
Deputy President.
[21] We are not satisfied that there is a proper basis to grant permission to appeal on this
ground.
Variation
[22] The Deputy President based his decision to vary the Agreements on a consideration of
the mutual intention of the parties in relation to the meaning of the clause. He accepted the
undisputed evidence of two MSS Security managers that in negotiations and communications
concerning the making of the Agreements they never said anything which would have left an
impression that MSS Security accepted that the aviation allowance was to be loaded by
penalty calculations. The topic arose during the negotiations and the alternative notion now
advanced by the union was comprehensively rejected. This finding is consistent with the
evidence.
[23] It is possible in this case that the parties had different intentions as to the use of the
words “all purpose”. The resolution of the matter requires the application of the following
logic. If an ambiguity exists in relation to the payment of an additional amount, as in this case,
and the evidence establishes that there is no mutual intention to pay the additional amount,
then it would normally follow that the Commission should not vary the agreement to create an
entitlement that is consistent with the intention of only one of the parties. Even if there is no
clear mutual intention to not pay the additional amount, it would normally be desirable to
resolve an ambiguity to make it clear that the amount is not payable when there is an
insufficient basis to find that the parties agreed to pay the additional amount. Therefore, if
there was no mutual intention to apply penalty calculations to the allowance, then absent any
other compelling circumstance, the company’s application was likely to succeed.
[24] The Deputy President exercised the discretion vested in him and made a decision that
appears to us to be unremarkable. We do not consider that there is any substance to this
ground of appeal. Nor do we consider that there is a proper basis to grant permission to appeal
on this ground.
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Conclusions
[25] For the above reasons we grant permission to appeal on the jurisdictional issue raised
but dismiss the appeal on the jurisdictional grounds. We refuse permission to appeal in
relation to the other grounds.
VICE PRESIDENT
Appearances:
Mr R. Reed of counsel, with Mr L. Forsyth, on behalf of United Voice.
Mr R. Dalton of counsel, with Mr J. Nguyen, on behalf of MSS Security.
Hearing details:
2016.
Sydney.
21 July.
Final written submissions:
United Voice on 4 July 2016.
MSS Security on 15 July 2016.
Printed by authority of the Commonwealth Government Printer
Price code C, PR583250
1 [2016] FWCA 2774.
2 Coal and Allied v AIRC [2000] HCA 47; 203 CLR 194; 74 ALJR 1348; 99 IR 309; 174 ALR 585 (31 August 2000).
3 Coal and Allied v AIRC [2000] HCA 47; 203 CLR 194; 74 ALJR 1348; 99 IR 309; 174 ALR 585 (31 August 2000) at [19].
4 House v The King (1936) 55 CLR 499 at [504]-[505] per Dixon, Evatt and McTiernan JJ.
5 Pawel v Australian Industrial Relations Commission (1999) 94 FCR 231.
6 Re Linfox – CFMEU (CSR Timber) Enterprise Agreement 1997 Print Q2603; Re Tenix Defence Systems Pty Limited
Certified Agreement 2001-2004 PR917548; Re Victorian Public Transport Enterprise Agreement 1994 Print M2454.
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