1
Fair Work Act 2009
s.739—Dispute resolution
Australian Workers’ Union, The
v
Orica Australia Pty Ltd
(C2021/6643)
DEPUTY PRESIDENT BEAUMONT PERTH, 17 FEBRUARY 2022
Alleged dispute about any matters arising under the enterprise agreement and the
NES;[s186(6)]
[1] This decision concerns an application made by the Australian Workers’ Union (AWU)
under s 739 of the Fair Work Act 2009 (Cth) (Act) regarding a dispute with Orica Australia Pty
Ltd (Orica) about the interpretation of subclause 4.2.3 of the Orica Kalgoorlie Reserve Site
Agreement 2013 (the Agreement).1
[2] The dispute centres on Orica’s refusal to pass on remuneration increases under the
Agreement. The AWU contends that with effect on and from the commencement of each
calendar year until the nominal expiry date of the Agreement, Orica had provided the employees
covered by the Agreement an annual remuneration increase at the rate of at least 3% per annum
by applying subclause 4.2.3 of the Agreement. That subclause reads:
4.2.3 Salary increases will be made throughout the lifetime of this Agreement on
January 1 in accordance with the Orica Continuous Improvement policy (CI) or 3.0%,
whichever is higher. CI provides for automatic yearly adjustments on [sic] in a climate
of continuous improvement. The principles of continuous improvement embody a
commitment of continuous supply to customers and continuous implementation of
improvements in customer service. The CI rate is set by the business.
[3] However, on 31 March 2017 the nominal expiry date passed and no further
remuneration increases were provided.
[4] The parties have agreed upon questions to be arbitrated. Those questions are:
1. Does the construction and interpretation of subclause 4.2.3 of the Agreement confer
the Employees an entitlement to salary increases of at least 3% at the commencement
of each year:
a) until such time that the Agreement is terminated or replaced?; or
1 [2021] FWCA 3251; PR 537171 (‘The Agreement’).
[2022] FWC 345 [Note: An appeal pursuant to s.604 (C2022/1667) was
lodged against this decision – refer to Full Bench decision dated 22 June 2022
[[2022] FWCFB 90] for result of appeal.]
DECISION
AUSTRALIA FairWork Commission
http://www.fwc.gov.au/documents/decisionssigned/html/2022FWCFB90.htm
[2022] FWC 345
2
b) until the nominal expiry date of Agreement?
[5] It is uncontroversial that: (a) there is a dispute between the AWU and Orica; (b) that the
dispute has been properly notified to the Commission; and (c) that the requirements of the
dispute settlement procedure have been complied with.
[6] Furthermore, it is not in dispute that the Agreement continues to operate as a
consequence of ss 54 and 58 of the Act.
AWU’s submissions
[7] Briefly stated, the AWU’s position is that subclause 4.2.3 entitles employees covered
by the Agreement to a salary increase of at least 3% on 1 January of each year, until the
Agreement is terminated by the Commission or replaced by a new enterprise agreement. It
arrives at this view, based on what it says are the ordinary meaning of the words in the subclause
and in the Agreement as a whole.
[8] The AWU submits that the remuneration increase contemplated in subclause 4.2.3 is
mandatory due to the use of the word ‘will’. Further, the ordinary meaning of the word
‘lifetime’ means the period where the Agreement is live, applicable and covers Orica
employees. Expanding upon the meaning of the word ‘lifetime’, the AWU explained that
‘lifetime’ means until the Agreement is replaced by a new agreement or terminated in
accordance with the Act.
[9] In arriving at its interpretation of subclause 4.2.3, the AWU relied upon the decision of
the Full Court of the Federal Court in Workpac Pty Ltd v Skene (‘Skene’),2 and the principles
espoused by the Full Bench of this Commission in Automotive, Food, Metals, Engineering,
Printing and Kindred Industries Union' known as the Australian Manufacturing Workers Union
(AMWU) v Berri Pty Limited (‘Berri’).3 It emphasised that an overly technical approach to the
interpretation of industrial instruments was to be avoided, and that to ascertain the meaning of
an enterprise agreement, one must examine the ordinary meaning of the words and in doing so,
have regard to the context.4
[10] Tackling the ordinary meaning of the word ‘will’, the AWU referred to the definition
attributed to it by the Macquarie Dictionary, namely:
1. Indicating future likelihood.
2. Expressing resolve.
[11] The AWU again emphasised that it was commonly understood that when applying the
principles of statutory interpretation, the word ‘will’ means that the subject matter is mandatory
instead of discretionary in nature. The AWU considered that this was not in dispute between
the parties.
2 [2018] FCAFC 131 (‘Skene’).
3 [2017] FWCFB 3005 (‘Berri’).
4 Construction, Forestry, Maritime, Mining and Energy Union v Griffin Coal Mining Company Pty Ltd [2020] FWC
5128 at [70] (‘Griffin Coal’).
[2022] FWC 345
3
[12] Insofar as the meaning of the word ‘lifetime’ was concerned, the AWU relied on both
the definition provided by the Macquarie Dictionary and the Oxford Online Dictionary quoting
respectively:
1. the term of existence, activity, or effectiveness of something inanimate, as a machine or a
lease.
2. the length of time that someone lives or that something lasts; the duration of a thing’s
existence or usefulness.
[13] Having examined the Commission’s approval decision of the Agreement, the AWU
observes that paragraph [3] of that decision stated:
The Agreement is approved and, in accordance with s.54 of the Act, will operate from
seven days from the date of this decision. The nominal expiry date of the Agreement is
31 March 2017.
[14] The AWU submits that this wording is consistent with the industrial definition of
‘nominal expiry date’ which can be found at s 12 of the Act. The AWU continued that any
reference to ‘nominal term’ is evidently a reference to the period from when an enterprise
agreement commences operation, as noted in the Commission’s approval decision, until its
nominal expiry date. This reading is consistent, said the AWU, with subclause 1.3 of the
Agreement.
[15] The AWU presses that the words used in subclause 4.2.3 are unambiguously capable of
only one meaning, namely, that under subclause 4.2.3 Orica is required to provide a salary
increase of at least 3% each year and this salary increase is to continue throughout the lifetime
of the Agreement - even after the nominal expiry date has elapsed. The AWU states that this
conclusion can be derived from the following:
a) subclause 4.2.3 uses the word ‘lifetime’ rather than ‘term’ or ‘nominal expiry date’
or ‘nominal term’ or ‘nominal lifetime’;
b) the ordinary meaning of the word ‘lifetime’ means the period where the Agreement
is live, operational, applicable and covers Orica’s employees, consistent with the
cited dictionary definition. ‘Lifetime’ therefore means until the Agreement is
replaced by a new agreement or terminated by the Commission in accordance with
the Act;
c) this meaning of ‘lifetime’ is consistent with subclause 1.3 of the Agreement
regarding the ‘Period of Operation’ of the Agreement; and
d) this is because until the Agreement is terminated or replaced, it continues to exist, be
active and be effective, consistent with the Macquarie Dictionary definition of
‘lifetime’.
[16] The AWU explains that the meaning attributed to the subclause would be understood
by a reasonable person (as referred to in principle 3 in Berri), and on that basis, if the Agreement
has a plain meaning, evidence of the surrounding circumstances will not be admitted to
contradict the plain language of the agreement (as referred to in principle 9 in Berri).
[17] Referring to Skene, the AWU relied on the follow passage extracted from that decision:
[2022] FWC 345
4
[W]here a term is undefined, unless there is contrary indication, it ought to be presume
that the draftsperson intended that the term have its ordinary meaning. Despite the broad
purposive approach to be taken to the interpretation of industrial agreements, that canon
of construction remains applicable as a starting point.5
[18] The AWU noted that the word ‘lifetime’ is only used once in the Agreement and every
other reference to a duration or timeframe explicitly referenced the words ‘nominal term’ or
‘nominal expiry date’. The AWU submitted that this demonstrated that aside from ‘lifetime’
and ‘nominal term’ or ‘nominal expiry date’ already having defined and distinguished plain
English definitions, the drafters had contemplated a difference in the meaning of the words
through their choice of usage throughout the Agreement.
[19] The AWU continued that the only conclusion that could be drawn was that the drafter’s
chose to use a discrete and unique word for a reason. The Applicant submitted that if a contrary
indication was the desired outcome, one would postulate that the drafters would have used
wording consistent with the rest of the Agreement, in particular the deliberate inclusion of the
word ‘nominal’, or the phrases ‘nominal term’ or ‘nominal expiry date’, in the alternative.
[20] The AWU acknowledged that Berri made it clear that context and purpose are relevant
to the construction of an agreement, and both are to be considered, even where the words of the
provision being construed appear on their face, to have a clear and unambiguous meaning.6
[21] The AWU observed that subclause 4.2.3 is contained within Part 4 of the Agreement
entitled ‘Wages and wage related matters’. It sits under subclause 4.2 titled ‘Remuneration’.
In contrast, the period of operation of the Agreement is contained in Part 1 of the Agreement
under the heading ‘Application and Operation’, where at subclause 1.3 of the Agreement the
following is stated:
1.3 PERIOD OF OPERATION
This Agreement shall take effect seven days after it is approved by Fair Work Australia and will
nominally expire on 31 March 2017 and shall supercede [sic] the Orica Kalgoorlie Reserve Site
Agreement 2009.
At the end of the nominal term of this Agreement it will continue until replaced by a new
agreement or terminated in accordance with the Fair Work Act 2009 (Cth) (Act).
[22] The AWU further observed that subclause 1.3 specifically elects to use the words
‘nominally’ and ‘nominal’, in the contexts of the phrases ‘nominally expire’ and ‘nominal
term’. Furthermore, in the context of the two sentences contained within subclause 1.3, it is
apparent, said the AWU, that the nominal term of the Agreement is defined as the period seven
days from the date the Agreement is approved by the Commission (30 May 2013) to the nominal
expiry date of the Agreement on 31 March 2017.
5 Skene (n 2) [202].
6 Griffin Coal (n 4) [79]; Construction, Forestry, Maritime, Mining and Energy Union v Endeavour Coal Pty Ltd T/A Appin
Mine [2017] FWCFB 4487.
[2022] FWC 345
5
[23] The AWU continued that in subclause 1.3, the usage of the word ‘term’ or ‘nominal
term’ is intrinsically linked to the stipulated nominal expiry date of the Agreement. The AWU
continued that it was important to note that throughout this subclause itself, as well as the
entirety of the Agreement, the words ‘nominal’ and ‘nominally’ are expressly and deliberately
used and included when applicable.
[24] The framework of the Act was also relevant according to the AWU. It submitted that
the drafting and inclusion of subclause 1.3, specifically, a subclause regarding a nominal expiry
date of an enterprise agreement, is a requirement under the Act in order for the Commission to
approve an enterprise agreement (s 186(5)).
[25] It noted that the Agreement defined and set out what ‘nominal term’ and ‘nominally
expire’ meant and that use continued throughout the Agreement in a way that was consistent
with the purpose of a nominal expiry date under the Act. It demonstrated, according to the
AWU, that the drafters knew the difference in duration between when an enterprise agreement
is operational as against the nominal expiry date of an enterprise agreement, supporting the
position that ‘nominal term’ has a different meaning from the word ‘lifetime’.
[26] The AWU pointed out that the Act operates to keep the Agreement alive and operational
post its nominal expiry date. This, said the AWU, was consistent with the ordinary meaning
and definition of the word ‘lifetime’.
[27] The AWU pressed that the purpose of subclause 4.2 and subclause 4.2.3 was the
provision of annual remuneration increases without requiring the parties to renegotiate pay
increases each calendar year or even periodically. This purpose was made clear, said the AWU,
within subclause 4.2.3 which provided a base increase of ‘the Orica Continuous Improvement
policy (CI) or 3.0%, whichever is the higher’. That same subclause then clarified that the
purpose of CI is to ‘provide for automatic yearly adjustments on [sic] in a climate of continuous
improvement.’ The subclause further elaborated, said the AWU, that ‘[T]he principles of
continuous improvement embody a commitment of continuous supply to customers and
continuous implementation of improvements in customer service.’ The AWU stated that one
would presume that as Orica had continued to successfully operate its business, it had been
continuously supplying product to customers. The AWU contended that this purpose was
consistent with the location of subclause 4.2.3 within subclause 4.2 which specifically
contemplated remuneration.
[28] Conversely, said the AWU, the nominal expiry date is a statutory mechanism designed
to enliven statutory rights under the Act, such as the right to apply to terminate an enterprise
agreement (s 225), or undertake protected industrial action (s 417). The nominal expiry date
has a particular and narrow industrial application and purpose. The nominal expiry date is not
designed to enliven or exhaust entitlements contained in the clauses of an enterprise agreement
unless it is explicitly cited to do so.
[29] The AWU proposed that there is a lack of ambiguity in subclause 4.2.3 when one has
regard to the text, context and purpose of the subclause as well as the Agreement as a whole.
[2022] FWC 345
6
Accordingly, said the AWU, evidence of the surrounding circumstances could not be admitted
to contradict the plain language of the Agreement.7
[30] The AWU expressed that if extrinsic material is admissible, it may be used to aid the
interpretation of a provision in an enterprise agreement with a disputed meaning, but it
cannot be used to disregard or rewrite the provision in order to give effect to an externally
derived conception of what the parties’ intention or purpose was.8
[31] In summary, the AWU contends that in interpreting subclause 4.2.3, the Commission
need only have regard to the wording of the Agreement and the context and purpose within the
Agreement.
Orica’s submissions
[32] Orica contends that it was uncontroversial that the word ‘will’ in subclause 4.2.3 obliged
it to pay annual salary increases to employees. But the dispute which had arisen was about how
long that obligation endured. This in turn depended upon the meaning of the word ‘lifetime’.
[33] Orica submits that on a correct construction and interpretation of the Agreement, the
obligation under subclause 4.2.3 for it to pay employees an annual salary increase, ceased on
the nominal expiry date of the Agreement, being 31 March 2017. It follows, says the company,
that the appropriate answer to the agreed question for arbitration is ‘until the Nominal Expiry
Date of the Agreement’.
[34] Orica argues that the term 'lifetime' is not a term of art and is not defined in the
Agreement. It continued that the term could reasonably refer either to the nominal term as set
by subclause 1.3 of Agreement (expiring on the nominal expiry date), or the extended operation
of the Agreement which occurs as a consequence of ss 54 and 58 of the Act, until the Agreement
is terminated or replaced.
[35] Orica presses that either interpretation is arguable, and that it does not contend
otherwise. However, in selecting the interpretation to be preferred, it says there are common-
sense reasons for preferring its interpretation. Orica listed those reasons as follows:
a) the terms appears in an enterprise agreement, negotiated within a framework where
industrial parties are generally negotiating for terms and conditions which are to
apply for a defined period, generally set by reference to the nominal term of an
agreement. As a consequence of ss 54 and 58, those terms are preserved in operation
after the nominal term. However, that is a consequence of the operation of those
provisions and is not the consequence of the agreement of the parties; and
b) it would be unusual for an employer in any circumstance to preclude its ability to
seek additional efficiencies and concessions from its employees while committing in
perpetuity to pay rises which presumably reflect the ‘bargain’ represented by other
terms of the Agreement in the context of the business and operational circumstances
then prevailing.
7 Berri (n 3) [114].
8 Ibid.
[2022] FWC 345
7
[36] Referring to cases that had considered the phrases ‘lifetime of the agreement’ or ‘life of
the agreement’ albeit not in the specific context of the continuing entitlement under a relevant
enterprise agreement, Orica referred to the following passage in Australian Municipal,
Administrative, Clerical and Services Union and others v Sydney Water Corporation:
… [There is] frequently loose usage of the phrase ‘the life of this (or the) agreement’ by
parties appearing before FWA. The phrase ‘nominal life of this or the Agreement’ has
been used by parties appearing before [her Honour] to include that period over which
the life of the Agreement is extended.9
[37] Thereafter, further cases referenced included Paul Scudds (Communications, Electrical,
Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia),10
McDonald's Australia Pty Ltd on behalf of Operators of McDonald's outlets,11 and
Construction, Forestry, Mining and Energy Union and another v Anglo Coal (Dawson
Services) Pty Ltd.12 In general terms, the cases were said to highlight that the phrases ‘lifetime
of the agreement’ or ‘life of the agreement’ and ‘nominal life of the agreement’ had been treated
interchangeably and had at times referred to the nominal term of the enterprise agreement in
question.
[38] Orica pressed that while an enterprise agreement must be interpreted as a whole and in
context, the cases demonstrated that the meaning of the phrase 'lifetime of this Agreement' was
not as unequivocal as AWU had submitted, and in the circumstances the phrase did not have a
plain meaning.
[39] Turning to principle 8 in Berri, a principle that sets out that regard may be had to
evidence of surrounding circumstances to establish that in fact an ambiguity exists in relation
to subclause 4.2.3 of the Agreement,13 Orica highlighted the following:
a) meeting minutes from bargaining meetings which took place during negotiations for
the Agreement (2013 meeting minutes) show that as part of the log of claims:
i. it was agreed between the bargaining representatives that the Agreement would
be a ‘4 Year Term Agreement’;14
ii. the employee group requested an additional 1% on top of CPI as an annual
increase for ‘every year during the term of the Agreement’,15 and that Orica
later proposed the entitlement provided by the current Agreement, ‘for every
year of the Agreement’, which the employee group agreed to;16
b) the Summary of Changes Document prepared by Orica relating to the Agreement
and issued to employees – shows that it was envisaged and communicated that the
9 [2010] FWA 7782 [123].
10 [2019] FWC 6465.
11 [2010] FWA 1347.
12 [2012] FWA 9099.
13 Berri (n 3) [114].
14 Witness Statement of Hannah Jane Couper, 8 (‘Couper Statement’).
15 Ibid 13.
16 Ibid 16.
[2022] FWC 345
8
salary increases were to be provided only for ‘each year of the term of the
Agreement’, and the Agreement was a ‘4 year term Agreement’ which was ‘to expire
on 31 March 2017’;17 and
c) the meeting minutes from negotiations for a new enterprise agreement in 2017
(which was then voted down twice) – shows that the negotiating parties discussed
the fact that the 3% pay increases provided by subclause 4.2.3 of the Agreement
were only applicable for the nominal term of the Agreement, and would no longer
apply if a new agreement was not in place after the nominal expiry date of the
Agreement.18
[40] Orica submits that although subclause 4.2.3 used the phrase 'lifetime of the Agreement',
this phrase was not used during bargaining and reference was only made to salary increases
being for the period of the four-year nominal term of the Agreement. Orica said that on this
basis the Commission could be satisfied that the surrounding circumstances assisted in
determining that an ambiguity exists in subclause 4.2.3 of the Agreement, or that the phrase in
question, ‘lifetime of this Agreement’, was susceptible of more than one meaning.
[41] Orica continued that having established an ambiguity or susceptibility of the phrase to
be accorded more than one meaning, evidence of the surrounding circumstances was admissible
to aid the interpretation of the Agreement.
[42] Orica explained that during negotiations for the Agreement, it was evident in its view,
that the parties had turned their minds to, and discussed, the operation of the salary increase
entitlement. Evidence which tended to establish the subject matter of the Agreement and the
objective background facts which were known to both parties included:
a) evidence of prior negotiations in the form of the 2013 meeting minutes – which
provided evidence the clause was discussed and both parties agreed that the salary
increases provided by subclause 4.2.3 were to be provided each year during the term
of the Agreement,19 and that term of the Agreement was four years;20 and
b) the 2013 Summary of Changes Document, which provided evidence that employees
were told that the salary increases would be '3% or Orica CI, whichever is higher, on
1 January for each year of the term of the Agreement' and the Agreement was a '4
year term Agreement' which was 'to expire on 31 March 2017'.21
[43] Orica further relied on the post-agreement conduct of the parties to show that there had
been consensus on the meaning of the phrase. On this point, it noted there had been a long-
standing practice between it and the employees that the entitlement to a salary increase was
only applicable during the nominal term of the Agreement. This, said Orica, was evident from
the discussions set out in the 2013 meeting minutes, particularly in the context of those
discussions being in relation to subclause 4.2.3 which used the same relevant wording (i.e. the
phrase ‘lifetime of this Agreement’) as the relevant clause (also subclause 4.2.3) in the
17 Ibid 19.
18 Ibid 52.
19 Ibid 13, 14.
20 Ibid 8.
21 Ibid 19.
[2022] FWC 345
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predecessor enterprise agreement (the Orica Kalgoorlie Reserve Site Agreement 2009 (2009
Agreement).22 Having used the same phrase, and discussing the applicable term of the salary
increases effectively being every year for the four-year term of the Agreement in the 2013
meeting minutes, Orica contended that the evidence demonstrated there was a common
understanding of the parties that the phrase 'lifetime of this Agreement', used in subclause 4.2.3,
meant the same as it did for the 2009 Agreement i.e., for the nominal term of the Agreement.23
[44] To further support this proposition, Orica referred to negotiations for a new agreement
in 2017 and 2018 which were unsuccessful. Orica submitted that a bargaining meeting between
its representative and those of the AWU took place on 21 June 2017 and were
contemporaneously recorded by way of minutes. Orica’s representative was said to have
explained that given the Agreement had passed its nominal term, the salary increases provided
by subclause 4.2.3 of the Agreement would cease to operate, unless a new enterprise agreement
was made.24
[45] Orica submitted that the 2017 meeting minutes did not record any commentary or
opposition from the other parties present in the bargaining meeting to the statement made by
Orica’s representative. Orica pressed that this was evidence of a meeting of minds and a
consensus between the parties that the entitlement to salary increases provided by
subclause 4.2.3 ceased to apply after the nominal expiry date.
Consideration
[46] The source of the Commission's power to arbitrate the dispute is s 739 of the Act. The
Commission has broad jurisdiction to decide questions of fact and law, however it does not
have jurisdiction to make a decision which is inconsistent with the Agreement. Nor is the
Commission able to make an order which would amount to an exercise of judicial power.
Therefore, the Commission is unable to make an order requiring payment of any amount which
might be due to an employee consequent to a decision where the Applicant’s interpretation of
subclause 4.2.3 is accepted.
[47] It appears to have been accepted in this Commission that the principles to be applied in
interpreting an enterprise agreement, are found in the Full Bench decision of Berri. In Berri, it
was said that the construction of an enterprise agreement, like that of a statute or a contract,
begins with a consideration of the ordinary meaning of the relevant words.25 The disputed
words must be construed in the context of the agreement as a whole.26 The process of
interpretative analysis focusses upon the language of the agreement itself, an approach adopted
by the AWU in this case.
[48] The framers of the of the Agreement chose specifically to refer to the phrase ‘the lifetime
of this Agreement’. Or, more specifically, the word ‘lifetime’. There is no suggestion that the
word was used in error. The word ‘lifetime’ is not used elsewhere in the Agreement, and it is
22 AC322142.
23Couper Statement (n 14) 9, 13, 16.
24 Ibid 52.
25 Berri (n 3) [41].
26 Berri (n 3) [41].
[2022] FWC 345
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uncontroversial that the denotation of the word is that as described or defined in the Macquarie
or Oxford dictionary at paragraph [12] of this decision. In short, ‘lifetime’ means the term or
duration of existence.
[49] Reference to the temporal in the Agreement is also achieved by reference to the ‘nominal
term’,27 ‘nominally expire’,28 and ‘nominal expiry date’.29 The AWU observed that the drafters
of the Agreement had defined and set out what ‘nominal term’ and nominally expire’ meant
and had used the terms consistently throughout the Agreement (four occasions). It correctly
identified that the word ‘lifetime’ had been referenced on only one occasion.
[50] At Part 8 of the Agreement, ‘Miscellaneous Matters’ are traversed. Included in those
matters is subclause 8.2 of the Agreement which sets out an obligation to establish a
‘Consultative Committee’. The subclause starts with the words ‘[D]uring the term of this
Agreement…’.30
[51] From the abovementioned observations, the AWU inferred that the drafters knew the
difference in duration between when an enterprise agreement is operational as against the
nominal expiry date of an enterprise agreement. The AWU contended that the meaning of
‘nominal term’ was different to the meaning of the word ‘lifetime’, proposing that the only
conclusion that could be drawn from its observations was that the word ‘lifetime’ was chosen
for a reason. Of course, the AWU pointed to the Act keeping the Agreement alive post the
nominal expiry date – which it argued, was consistent with the ordinary meaning of the word
‘lifetime’.
[52] Orica correctly identified that the term 'lifetime' is not a term of art and is not defined in
the Agreement. However, Orica’s reference to decisions that have considered the phrase in
various contexts was unhelpful in the present context. Those decisions do not inform as to what
the framers of this Agreement meant when they chose to use the word.
[53] The word ‘lifetime’ could reasonably refer either to the nominal term as set by subclause
1.3 of Agreement (expiring on the nominal expiry date), or the extended operation of the
Agreement which occurs as a consequence of ss 54 and 58 of the Act, until the Agreement is
terminated or replaced.
[54] Whilst the words ‘term’, nominal term’,31 ‘nominally expire’,32 and ‘nominal expiry
date’– are referred to as noted, drawing a conclusion from the consistent or inconsistent use of
language in an enterprise agreement is to be cautiously approached. It is accepted that some of
the principles that are usually seen in statutory construction have less force in the context of
construing an enterprise agreement. In Shop, Distributive and Allied Employees’ Association
v Woolworths Limited, Gray ACJ held that the presumption that a word used in one provision
of a statute has the same meaning when it is used in another provision of the same statute,
27 The Agreement (n 1) sub-cl 1.3.
28 Ibid.
29 Ibid sub-cl 1.6.1
30 Ibid sub-cl 8.2.
31 Ibid sub-cl 1.3.
32 Ibid.
[2022] FWC 345
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applied with less force in the context of an enterprise agreement.33 Is for example, the word
‘term’ as used in the Agreement at subclause 8.2, indicative of the ‘nominal term’ of the
Agreement which may be thought to be that period from commencement to the nominal expiry
date, or the continued operation of the Agreement pursuant to ss 54 and 58?
[55] In construing an enterprise agreement regard may be had to evidence of surrounding
circumstances to assist in determining whether an ambiguity exists.34
[56] The critical issue is one which essentially requires attributing one of two meanings, or
perhaps more, to the phrase ‘lifetime of this Agreement’. The interpretation of that phrase, as
pressed by each party, appears arguable. However, that is not the relevant point. The task now
is to discern whether the phrase, or particularly the word ‘lifetime’, appears susceptible to more
than one meaning.
[57] Orica led evidence regarding the negotiations for the Agreement in 2013. That evidence
was limited to the direct evidence of the 2013 meeting minutes and an explanatory document
(Summary of Changes Document) regarding the terms of the proposed agreement.
[58] Orica’s evidence regarding bargaining meetings had been extracted from its computer
system. It was attached to the witness statement of Ms Hannah Couper, its Manager HR
Business Partner. Ms Couper commenced employment with Orica in June 2019. She
acknowledges that she was not involved in the bargaining for the Agreement. The AWU
highlighted the shortcomings of the direct evidence. Those shortcomings have been considered.
But, as business records of the company, and in the absence of compelling evidence to err
otherwise, I am content to rely upon the direct evidence led by Orica.
[59] The meeting minutes dated 17 January 2013 referred to Orica’s log of claims as
including a ‘4 Year Term Agreement’. The claim was recorded as not having been resolved.35
Those same minutes included the following:
Claim Discussion/Response Resolved?
Rollover the current
remuneration clause
Wage increases may be made throughout the
lifetime of the Agreement in accordance
with the Orica Continuous Improvement
Wages Policy.
Action: Employees to review and respond
No
[60] The meeting minutes of 7 February 2013 reveal again that ‘the parties put forward the
Orica log of claims’.36 The following was recorded in the minutes:
Claim Discussion/Response Resolved?
4 Year Term Agreement Agree Yes
33 (2006) 151 FCR 513, 518-519.
34 Berri (n 3) [38].
35Couper Statement (n 14) 4.
36 Ibid 8.
[2022] FWC 345
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Rollover the current
remuneration clause
No comment – employees to respond at next
meeting
No
[61] Meeting minutes dated 28 February 201337 detail the following:
Claim Discussion/Response Resolved?
Rollover the current
remuneration clause
Employees would like an additional 1% on
top of ‘CPI’ as an annual increase for every
year during the term of the Agreement, so
that in the case where CPI was zero, an
increase would still be passed through. AT
explained the difference between the Orica
CI and CPI, saying that CPI was included in
the CI but this was more of an internal Orica
metric that was usually well above CPI.
Action: Business to consider and respond
No
[62] Meeting minutes dated 14 March 201338 include:
Claim Discussion/Response Resolved?
Rollover the current
remuneration clause
Employee happy with proposal of 3% or CI
whichever is higher, for each year of the
Agreement.
Yes
[63] It is evident from the meeting minutes of 7 February 2013 that at that time those
bargaining for the ‘agreement’ and present in the meeting had agreed to a four-year ‘term’.
[64] The meeting minutes dated 28 February 2013 thereafter show that the remuneration
clause was discussed as were pay increases. Minutes of 14 March 2013 report that the proposal
of 3% or ‘CI’ – whichever is higher for ‘each year of the Agreement’, was resolved. When the
negotiations had concluded an email was sent by a Senior HR Advisor of the business to
multiple recipients. That email attached a draft of the Agreement, a voting guide and a
Summary of Changes Document.39 The Summary of Changes Document set out the following:
Salaries to increase by 3% or Orica CI, whichever is higher, on 1 January for each year
of the term of the Agreement.40
[65] The Full Court of the Federal Court in Skene explained that the language of the
agreement is to be understood in light of its industrial context and purpose, and not in a vacuum
or divorced from industrial realities.41 A purposive approach to interpretation is appropriate,
not a narrow or pedantic approach, because as observed in Skene, industrial agreements are
made for various industries in the light of the customs and working conditions of each, and are
37 Ibid 13.
38 Ibid 16.
39 Ibid 17.
40 Ibid 19.
41 Skene (n 2) [197].
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frequently couched in terms intelligible to the parties but without careful attention to form and
draftsmanship that one expects to find in an Act of Parliament. In Skene, it was noted that the
framers of agreements were likely of a ‘practical bent of mind’ and may well have been more
concerned with expressing an intention in a way likely to be understood in the relevant industry
rather than with legal niceties and jargon.
[66] Having considered the AWU’s submissions and having had regard to evidence of
surrounding circumstances, and in this respect, I refer to the evidence led by Orica and the
AWU’s criticisms of the same, I nevertheless find that the phrase ‘the lifetime of this
Agreement’, particularly the word ‘lifetime’, is susceptible to more than one meaning.
[67] As was said in Berri, having identified such susceptibility, it is permissible to consider
evidence of the surrounding circumstances as an aid to the task of interpreting the Agreement.
However, the Full Bench in Berri cautioned that the admissibility of evidence of the
surrounding circumstances is limited to evidence tending to establish objective background
facts which were known to both parties and the subject matter of the contract.
[68] In The Australasian Meat Industry Employees Union v Golden Cockerel Pty Ltd,42
evidence relevant to the objective framework of facts was said to include the following
categories:
a) evidence of prior negotiations to the extent that the negotiations tend to establish
objective background facts known to all parties and the subject matter of the
agreement;
b) notorious facts of which knowledge is to be presumed; and
c) evidence of matters in common contemplation and constituting a common
assumption.43
[69] As to category (a), the Full Bench in Berri concluded that evidence of prior negotiations
will be admissible – but only for a defined purpose.44 Drawing upon the judgment of Mason J
in Codelfa Construction Pty Ltd v State Rail Authority of New South Wales, the Full Bench in
Berri repeated the following passages:
Generally speaking facts existing when the contract was made will not be receivable as
part of the surrounding circumstances as an aid to construction, unless they were known
to both parties, although, as we have seen, if the facts are notorious knowledge of them
will be presumed.
It is here that a difficulty arises with respect to the evidence of prior negotiations.
Obviously the prior negotiations will tend to establish objective background facts which
were known to both parties and the subject matter of the contract. To the extent to which
they have this tendency they are admissible. But in so far as they consist of statements
and actions of the parties which are reflective of their actual intentions and expectations
they are not receivable. The point is that such statements and actions reveal the terms of
42 [2014] FWCFB 7447.
43 Ibid.
44 Berri (n 3) [64].
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the contract which the parties intended or hoped to make. They are superseded by, and
merged in, the contract itself. The object of the parole evidence rule is to exclude them,
the prior oral agreement of the parties being inadmissible in aid of construction, though
admissible in an action for rectification.45
[70] During negotiations for the Agreement, it was evident that the parties had turned their
minds to, and discussed, the operation of the salary increase entitlement. In my view this
evidence establishes part of the matrix of objective background facts which were known to both
parties and the subject matter of the Agreement. The evidence referred to has been traversed at
paragraphs [59] to [64] of this decision.
[71] However, while Orica proposed that such evidence constituted the background fact that
the salary increases provided by subclause 4.2.3 were only to be provided for the nominal term
of the Agreement, I am not similarly convinced that this ‘fact’ can be drawn from the direct
evidence of the 2013 meeting minutes. At best, there was reference to: ‘wage increases may be
made throughout the lifetime of the Agreement’,46 an annual increase for ‘every year during the
term of the Agreement’,47 and in the minutes dated 14 March 2013, employees being happy
with the proposal of 3% or CI whichever is higher, ‘for each year of the Agreement’.48 It is
observed that the minutes dated 14 March 2013, the latter minutes referred to, reported that the
claim concerning the rollover of the current remuneration clause was resolved. In my view the
evidence at its apogee demonstrates a lack of clarity as to the period in which salary increases
would be forthcoming.
[72] When negotiations for the Agreement had concluded an email was sent by a Senior HR
Advisor of the business to multiple recipients attaching a draft of the Agreement, a voting guide
and the Summary of Changes Document.49 The Summary of Changes Document set out the
following:
Salaries to increase by 3% or Orica CI, whichever is higher, on 1 January for each year
of the term of the Agreement – clause 4.2.3.50
[73] In the passage extracted from the Summary of Changes Document reference is made to
the words ‘term’ and ‘year’, such that the ‘term’ of the Agreement is comprised of years. On
balance, I am not convinced by reference only to this single excerpt that the word ‘term’ in this
context refers to the Agreement’s ‘nominal’ term, such that the period is a reference to the
requirements in s 186(5) of the Act. In this respect I note that the word ‘nominal’ is not used,
and it appears a rather large leap to assume that the word ‘term’ reflects the requirement that
s 186(5) prescribes. Namely, that the agreement must specify a date as its nominal expiry date
and the date will not be more than four years after the day on which the Commission approves
the agreement.
45 (1982) 149 CLR 337, 352 quoted in Berri (n 3) [64].
46 Couper Statement (n 14) 4.
47 Ibid 13, 16.
48 Ibid 16.
49 Ibid 17.
50 Ibid 19.
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[74] However, when one moves further down the page of the Summary of Changes
Document the following appears:
4 year term Agreement. Updated Agreement to expire on 31 March 2017.
[75] The Summary of Changes Document serves the purpose of explaining to employees
who will be covered by the Agreement, the terms of the Agreement and the effect of those
terms. In Berri it was said that evidence as to what employees covered by the agreement were
told (either during the course of the negotiations or pursuant to s 180(5)) may be of more
assistance than evidence of the bargaining positions taken by the employer or a bargaining
representative during the negotiations of an agreement.
[76] Orica has emphasised that on a correct construction and interpretation of the Agreement,
the obligation under subclause 4.2.3 for it to pay employees an annual salary increase, ceased
on the nominal expiry date of the Agreement, being 31 March 2017. It follows that the ‘lifetime
of this Agreement’, as referred to in subclause 4.2.3, draws to an end on the nominal expiry
date of the Agreement. The Summary of Changes Document appears to support the
interpretation of the phrase as favoured by Orica. This direct evidence constitutes an objective
background fact which was known to those who were to be covered by the proposed agreement.
[77] However, at this point it is timely to turn to the fourteenth principle as espoused Berri.
It has been said that admissible extrinsic material may be used to aid the interpretation of a
provision in an enterprise agreement with a disputed meaning, but it cannot be used to disregard
or rewrite the provision in order to give effect to an externally derived conception of what the
parties’ intention or purpose was.51
[78] Attributing to the phrase ‘lifetime of this agreement’ the interpretation pressed by Orica,
does not disregard or rewrite subclause 4.2.3. All that is to be discerned is the meaning intended
by the progenitors of the document, bearing in mind that they were likely of a practical bent
and expressed intention in ways likely to have been understood in the context of the relevant
industry and industrial relations environment. It is therefore justifiable to read an enterprise
agreement 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.52
[79] Of course, as was acknowledged in Berri, the admissibility of the post-contractual
conduct as an aid to the construction of a contract is a somewhat vexed issue, in respect of
which no clear line of authority has emerged.53 The Full Bench in Berri appears to have
accepted what was said in the judgment of Lambery JA in the Canadian case of Re Canadian
National Railways and Canadian Pacific Ltd, that evidence of subsequent conduct is most
cogent were parties are individuals, the acts considered are the acts of both parties, the acts can
relate only to the agreement, the acts are intentional and the acts are consistent only with one
of the alternative interpretations.54
51 Berri (n 3) [114].
52 Kucks v CSR Ltd (1996) 66 IR 182, 184.
53 Berri (n 3) [101].
54 (1978) 95 DLR (3d) 242, 262.
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[80] The Full Bench in Berri appears to have been guided by the point that where the parties
to the agreement are corporations and the acts are the acts of employees of the corporations,
then evidence of subsequent conduct is much less likely to carry weight.55
[81] However, unlike Berri where the dispute centred on an unpaid laundry allowance, in
this case employees covered by the Agreement have not received a salary increase since
31 March 2017. In Berri it was ventured that care must be taken to distinguish a common
understanding from a common inadvertence and that in order to have an understanding, it is
necessary that there be a meeting of the minds.56 The Full Bench continued that there can be
no meeting of minds, no consensus, if no one has thought about the issue.57
[82] It appears remarkable that for some four years whilst Orica has omitted to pass on salary
increases pursuant to subclause 4.2.3, there appears to have been no agitation by the AWU or
employees.
[83] Little to no evidence was led that the issue between the parties had been percolating for
an extended period. In fact, Orica led evidence that during the course of 2017 and 2018 it had
attempted to negotiate a new agreement with employees and the AWU. A bargaining meeting
between the representatives of the AWU, Orica and employees as part of the negotiations for a
new enterprise agreement was said to have taken place on 21 June 2017 and was
contemporaneously minuted (2017 minutes). While there was no evidence to suggest that the
meeting minutes had been checked and accepted by all in attendance, I am again content to rely
upon such minutes on the basis that they form a business record of Orica extracted from its
computer system. I note the evidence has not been impugned save speculation about its
deficiencies. Present at that meeting were employee representatives and a representative
purported to be from the AWU. The minutes read:
*Tiffany explained that now the 3% which was part of the current agreement would no
longer be paid if no new agreement was met due to the increase being for the term of
the previous agreement which is now expired, however all other conditions would
remain in place.
[84] Those same meeting minutes do not record any commentary or opposition from the
other parties present in the bargaining meeting to the statement made by ‘Tiffany’, Orica’s
representative. Further, there is no evidence prior to August 2021 (meetings were held in
August 2021 under the subclause 2.1.1 of the Agreement – Avoidance of Disputes Procedure)
that there was dispute over the interpretation of subclause 4.2.3 of the Agreement.
[85] Orica submitted that the evidence of the 2017 minutes constituted evidence that there
was a meeting of minds and a consensus between the AWU and Orica that the entitlement to
salary increases provided by subclause 4.2.3 ceased to apply after the nominal expiry date of
the Agreement. I agree.
55 Ibid quoted in Berri (n 3) [107].
56 ALHMWU v Prestige Property Services Pty Ltd [2006] FCA 11, [44] cited in Berri (n 3) [108].
57 Ibid.
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[86] Whilst the lack of action on behalf of the AWU or employees to agitate dispute about
omission of salary increases might be characterised as post-agreement conduct amounting to
little more than the absence of a complaint about the non-payment of such increases – I am not
so persuaded given that we are referring to salary increases of at least 3% a year that were not
passed on over a period of four years. Further, when Orica alerted those present at the meeting
on 21 June 2017 as to the approach it adopted in respect of subclause 4.2.3, no action was taken
contemporaneously or for four years thereafter.
Conclusion
[87] As observed, the parties have agreed upon questions to be arbitrated. Those questions
are:
1. Does the construction and interpretation of subclause 4.2.3 of the Agreement confer
the Employees an entitlement to salary increases of at least 3% at the commencement
of each year:
a) until such time that the Agreement is terminated or replaced?; or
b) until the nominal expiry date of Agreement?
[88] My answer is (b).
DEPUTY PRESIDENT
Appearances:
Ms E. Ong for the Applicant;
Mr D. Williams of Minter Ellison for the Respondent.
Hearing details:
Perth (video hearing)
16 December 2021.
Printed by authority of the Commonwealth Government Printer
AMISSION WORK 1. 4 -
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PR738483
