DECISION

Fair Work Act 2009
s.739—Dispute resolution

Construction, Forestry, Maritime, Mining and Energy Union
v
DP World Brisbane Pty Ltd, DP World (Fremantle) Ltd, DP World Melbourne Ltd and DP World Sydney Ltd T/A DP World
(C2019/971)

Interpretation of an enterprise agreement - income protection clause.

[1] The Construction Forestry, Maritime, Mining and Energy Union (The Maritime Union of Australia Division) (CFMMEU) and DP World Brisbane Pty Ltd, DP World Sydney Limited, DP World Melbourne Limited and DP World (Fremantle) Limited (DP World) are in dispute about the provision of income protection insurance to DP World’s stevedoring employees in Australia.

[2] DP World’s stevedoring employees in Australia are covered by four enterprise agreements depending upon where they work. They are: DP World Brisbane Enterprise Agreement; DP World Sydney Enterprise Agreement 2015; DP World Melbourne Enterprise Agreement 2016; DP World Fremantle Enterprise Agreement 2015 (Agreements).

[3] The Agreements share a common Part A and contain a Part B that is tailored to the relevant terminal. Part A is in the same terms in all four enterprise agreements. Income protection insurance is dealt with in clause 18.11 of Part A of the Agreements. The parties agree that there is nothing in any of the Part B sections of the Agreements that pertains to the application of clause 18.11 in Part A. 1 The Agreements have a nominal expiry date of 28 February 2019 and the parties are currently engaged in bargaining for new agreements to replace the Agreements.

[4] DP World has, in effect, informed its stevedoring employees that it will not continue to provide income protection insurance for its stevedoring employees after 28 February 2018. Instead it intends to provide a 2% pay increase on employees’ base wage and existing Part A clause 11 rates from 1 March 2019. The present dispute arises because the CFMMEU disagrees with this course of action.

[5] The CFMMEU applied to the Fair Work Commission (Commission) to deal with the dispute in accordance with the dispute resolution procedure of the Agreements, found in clause 29 of Part A of the Agreements, and s.739 of the Fair Work Act (the Act). A conference was conducted by the Commission on 15 February 2019 but the dispute was not resolved by conciliation and the CFMMEU has referred the dispute to the Commission for arbitration.

[6] In the hearing of this matter on 20 February 2019 I exercised my discretion pursuant to s.596 of the Act for both the CFMMEU and DP World to be represented. I was satisfied that the circumstances enlivened my discretion and it was appropriate to exercise that discretion by granting the applications made by both parties to be represented. The CFMMEU was represented by Ms Lisa Doust of Counsel and DP World was represented by Mr Darren Perry, Solicitor.

[7] Evidence was given for the CFMMEU by Mr Adrian Evans Divisional Branch Deputy Secretary of the WA Branch of the CFMMEU. Evidence was given for DP World by Mr Maxwell Kruse, Chief Commercial Officer DP World Australian Limited, and Mr Mark Hulme General Manager Operations DP World Sydney Limited.

[8] DP World objects to the dispute being arbitrated by the Commission on the grounds that it would require the exercise of judicial power and that the dispute resolution procedure in the Agreements has not been followed.

[9] The CFMMEU has posed two questions for me to answer: 2

a. Whether on a proper construction of the Agreements, the respondents are obliged to continue to provide an income protection policy in favour of its employees who are covered by the Agreements after 28 February 2019?

b. Whether the respondents must engage in a review involving the parties, being the employer company and the CFMMEU in respect of each agreement, and reach agreement between the parties prior to seeking to cease providing an income protection policy in favour of its employees who are covered by the Agreements after 28 February 2019?

[10] The CFMMEU submits that the answer to each question is ‘Yes’. DP World submits that the answer to the first question is ‘No’ and that as a result the second question does not arise or, if it does, the answer is ‘No’.

[11] For the reasons given below I have decided that the answer to the first question is ‘No’ and the answer to the second question is ‘Yes’.

Background to the dispute

[12] Enterprise bargaining for the Agreements was undertaken at least from 2014 and extended into 2015. 3 The Maritime Union of Australia (MUA), as it then was, sought the introduction of income protection insurance.4 After lengthy negotiations agreement was reached to provide for income protection insurance in the Agreements with up to 2% of employees’ wages being diverted from a potential wage increase to fund the insurance policy.5

[13] By agreement between DP World and the MUA the insurance policy was taken out with a company called Protect and the policy was held in the name of DP World and the MUA. 6 The current policy expires on 1 March 2019.7

[14] DP World and the MUA have conducted joint annual reviews of the policy. The last review was held in June 2018. 8

[15] Enterprise bargaining for new enterprise agreements to replace the Agreements, that have a nominal expiry date of 28 February 2019, commenced in September 2018. 9 Mr Evans gave evidence that it was agreed between DP World and MUA that the income protection insurance policy would continue in force until the Agreements were replaced with new enterprise agreements.10 This is denied by DP World. The disagreement is evident from an exchange of emails between Mr Evans and Mr Craig Thompson Chief People Officer DP World Australia Limited in September 2018 where Mr Evans wrote:

“When it was raised last week I simply relayed our discussion at the last protect review where we agreed to continue Protect until it was AGREED we either change the fund, retain Protect or cease IP altogether as part of the 2019 EA.

You know that is what was agreed.” 11

[16] In his reply Mr Thompson said:

“It looks like we have slightly different take away from the last Protect review. We did discuss that things were working very well with ATC/Protect and that DPWA would be supportive of a continued relationship with them. When we spoke about whether there would be a claim to continue with ATC/Protect, my recollection was that you had commented that it would be discussed in August as part of the MUA and the employee reps claims preparation.

In terms of arrangements post 28 February I am certain that a commitment was not made on behalf of DPWA that IP would automatically continue. I assume you would not make a commitment for the MUA and employees without taking it first to the negotiation team for debate and discussion. We did discuss that it may not be an issue being that both parties were focussed on losing out negotiations by end February.” 12

[17] The inclusion of a provision for income protection insurance in the new enterprise agreements has been the subject of a number of exchanges between DP World and the MUA in the current round of bargaining that have been described in evidence before me as background to this dispute.

[18] Mr Evans gave evidence about an email received on 9 January 2019, sent by Mr Kruse:

“On 9 January 2019, Mr Kruse sent an email headed ‘IP response 14.11.18’ which stated:

“As we discussed yesterday a final position is sort (sic) from the MUA in regards to our package offer to extend IP until EA in principle agreement is reached.

I have removed 2 claims and with that require agreement on what still remains in the package attached.”” 13

[19] Mr Evans gave evidence about an email titled ‘Enterprise Agreement update’ to employees on 31 January 2019 that said:

“If your representatives do not agree a rollover by 4 February, the opportunity to lock-in certainty, the real increase in wages and Income Protection is lost.” 14

[20] Mr Kruse gave evidence that:

“Following the conclusion, and as foreshadowed to the MUA, DP World took steps to notify its employees of the impending salary change via an email to all employees.” 15

[21] The email dated 7 February 2019 to employees that Mr Kruse referred to was attached to his Statement. Under the heading Income Protection he wrote:

“From 1 March 2019 DP World Australia (DPWA) will provide you a two percent pay increase on your base wage and the existing clause 11 rates. This is money which was provided to your Union nominated IP provider for the life of the EA. Once the EA expires, that money needs to be provided direct to you.

It is now your choice to decide whether to keep that money or to continue paying for IP. If you choose to continue IP, you will need to purchase it directly from your chosen provider. If you choose to remain with current IP provider Protect, you need to contact them directly.” 16

(original emphasis)

[22] Both DP World and the MUA accuse each other of seeking to use income protection insurance as leverage in the current round of enterprise bargaining. 17

[23] However the dispute arises under the current Agreements which, by the look of the progress in enterprise bargaining between the parties, may continue in force for some time to come. At the heart of the dispute is the meaning of clause 18.11 of the Agreements.

Power of the Commission to deal with the dispute

[24] DP World submits that the dispute cannot be arbitrated by the Commission on the grounds that it would require the exercise of judicial power and because the preconditions to access the dispute resolution procedure have not been met.

[25] I consider that DP World’s submission concerning the exercise of judicial power is answered by reference to Re Cram; Ex parte Newcastle Wallsend Coal Co. 18 where the High Court said:

“The making of a binding declaration of right is an instance of the exercise of judicial power. It stands outside the arbitral function. But there is no substance in the suggestion that an industrial tribunal cannot interpret laws, awards and other legal instruments. A tribunal could not discharge its arbitral functions if it were unable to form an opinion on a matter of interpretation. The formation of views and opinions on matters of interpretation in arbitral proceedings does not in itself amount to a usurpation of judicial power: Cessnock Collieries, at p.22; The Queen v. The Commonwealth Industrial Court; Ex parte The Australian Coal and Shale Employees' Federation (1960) 103 CLR 171, at p 174; Key Meats, at pp 596-597. Indeed, a tribunal may find it necessary to form an opinion as to the existing legal rights of the parties as a step in arriving at the ultimate conclusions on which the tribunal bases the making of an award intended to regulate the future rights of the parties: Aberdare Collieries, at p.44. Of course, the formation of such an opinion does not bind the parties and cannot operate as a binding declaration of rights.” 19

[26] My task is to resolve the dispute that is the subject of the application. I do not regard myself as bound by the questions posed and any interpretation that I undertake will be for this purpose only. I consider that I have exercised arbitral not judicial power.

[27] The Commission may only deal with a dispute pursuant to s.739 of the Act on application by a party to the dispute. 20 In order for the Commission to do so, the dispute, properly characterised, must fall within the scope of disputes that the applicable enterprise agreement requires or allows the Commission to deal with and the parties must comply with any mandatory pre-filing steps set out in the enterprise agreement.21

[28] I am satisfied that the CFMMEU is a party to the dispute. 22 I am satisfied that the dispute falls within the scope of disputes that the dispute resolution procedure allows the Commission to deal with being “the application of this Agreement”.23

[29] DP World submits that the terms of the dispute resolution procedure have not been complied with and as a result the Commission does not have the power to deal with the dispute.

[30] It says:

“In a matter such as the present, the Commission exercises a function of private dispute resolution and/or arbitration conferred on it by the terms of the relevant enterprise agreements. The Commission’s function in dealing with a dispute depends entirely on, and may be limited by, the terms of the enterprise agreements. For that reason, where the pre-conditions for the Commission to deal with a dispute are not met, it may not deal with the dispute and has no residual discretion to do so.” 24

[31] I agree with DP World that an application for the Commission to deal with a dispute in accordance with a dispute settlement procedure must be dealt with in accordance with s.739 of the Act. A dispute must be dealt with as provided for in a dispute settlement procedure. Where, as in the present case, the Agreement contains a dispute settlement procedure that allows the parties to refer the matter for arbitration, the arbitration takes place by way of private arbitration. That is, the Commission has the power given to it by the parties as part of their agreement that the Commission may arbitrate.

[32] DP World referred me to an appeal decision The Australian Workers’ Unions v MC Labour Services Pty Ltd (MC Labour), 25 where the Full Bench found that:

“It may be that situations will arise where it is genuinely impossible for a party to comply with a mandatory step in a dispute resolution procedure, and that the effect of this is that the Commission or other independent person cannot attempt to settle the dispute … it would not be permissible for the Commission to recast or ignore certain components of the dispute settlement procedure.”    26

[33] DP World submitted that guided by this decision I should conclude that the Commission does not have the power to deal with the dispute since, as in the case of the AWU in MC Labour, the CFMMEU has not engaged in each of the escalation stages prior to referring the dispute to the Commission for arbitration.

[34] I agree that I must be guided by these principles but of course principles must be applied to a particular set of facts. In MC Labour the union concerned, the Australian Workers’ Union, conceded before the Commission at first instance that it had “little or no relationship with the employer” and the Commission found that MC Labour was not aware of the dispute until it received a copy of the application. 27

[35] It is necessary to examine the relevant dispute procedure. 28

[36] Clause 29 of the Agreements read as follows:

29.0 DISPUTE RESOLUTION

29.1 In the event of a dispute arising in the workplace in regard to the application of this Agreement or the National Employment Standards (other than under s65(5) and 76(4) of the Act), the procedure to be followed to resolve the matter shall be as follows:

29.2 The parties shall attempt to resolve the matter at the workplace level including but not limited to:

29.2.1 The Employee, the Employee’s delegate (if requested), and his or her supervisor, meeting and conferring on the matter; and

29.2.2 If the matter is not resolved at such meeting, the parties arranging further discussions involving more senior levels of management. Employee Representatives and Union officials (as appropriate).

29.2.3 If the matter is not resolved at such a meeting the parties arranging further discussions involving more senior levels of management (as appropriate). In advance of this meeting the nature of the dispute must be particularised and must contain desired resolution provided in writing.

29.2.4 If the matter cannot be resolved at workplace level, the matter may be referred by either party to National level for discussion between the parties, after which time either party may refer the matter to FWC for conciliation.

29.2.5 If the matter is referred for conciliation, both parties will participate in the process in good faith.

29.2.6 Where the dispute has not been resolved despite the foregoing procedures being followed and subject to there being no stoppage of work in relation to the issue at hand, either party may refer the matter to FWC for arbitration if necessary in which case the decision will be accepted by the parties subject to any appeal rights.

[37] It is clear from a plain reading of the clause that it applies only to disputes that arise in the workplace and that the dispute must concern the application of the Agreements or the National Employment Standards (other than under s65(5) and 76(4) of the Act).

[38] The parties are required to attempt to resolve the matter at the workplace level by engaging with each other at a sequence of stages.

[39] The CFMMEU submitted that the words “including but not limited to” in clause 29.2 of the Agreements meant that the stages set out at clause 29.2.1 – 29.2.5 were, in effect, examples of ways in which the parties were to attempt to resolve the matter. 29 DP World submitted, to the contrary, that the words “including but not limited to” meant that the stages were mandatory but other stages or actions could also be undertaken.30

[40] The CFMMEU drew my attention to the distinction between the wording of clause 29 in the Agreements and the wording of the clause in MC Labour.

[41] Ms Doust said that the word “shall” used in the sentence “The parties shall attempt to resolve the matter at the workplace level including but not limited to:” (my emphasis) commanded the parties to attempt to resolve the matter at the workplace level. The words “Disputes … shall be dealt with according to the following procedure” contained in the clause being considered in MC Labour prescribed “what you shall do”. 31

[42] I understand this distinction but I think the stages set out at clause 29.2.1 – 29.2.5 of the Agreements are more than just examples of ways in which the parties were required to attempt to resolve the matter. I do regard those stages as mandatory. I consider that the parties were obliged to attempt to resolve the dispute at the workplace level and to attempt to participate in the stages in the order they are set out.

[43] It is necessary to consider the evidence concerning the passage of the dispute from inception to its arrival at the Commission in a Form F10 against the requirements of the dispute procedure.

[44] I consider that the dispute arose upon the receipt by stevedore employees of the email from Mr Kruse of 7 February 2019 titled ‘Enterprise Agreement update’ that is set out at paragraph 21 of this decision. I accept that the parties had been discussing income protection insurance in the course of enterprise bargaining prior to this email but this was the spark that lit the fuse in the workplace.

[45] Mr Kruse gave evidence that the decision conveyed in this email was an organisational decision made by a leadership group including himself, the CEO and Ms Jessica Blomfield, General Counsel. 32

[46] I am satisfied that this dispute arose in the workplace. It plainly concerns the application of the Agreements, satisfying clause 29.1 of the Agreements.

[47] Mr Evans gave evidence that he had learned directly from a conversation with a CFMMEU delegate in Fremantle that upon members receiving this email the CFMMEU delegate, Edsio Gatti, spoke to a supervisor, Dean Lorimer, and complained about the decision. This evidence was not contradicted.

[48] DP World made submissions that the dispute resolution procedure required a meeting, although it was conceded that a meeting did not have to be a face to face exercise. 33

[49] Mr Evans’ evidence was as follows:

“I'm putting to you that there were no meetings?---Well, I'm putting to you that that's incorrect.  I can say for Fremantle in particular that's my home base.  Delegate Edsio Gatti based at least, supervisor, Dean Lorimer onsite, and it was escalated to myself.  I had a discussion with Stefan Reynolds over the phone.  Stefan had left site for the afternoon, and we had a discussion over the phone in relation to step 2.  He told me he couldn't deal with it and that he agreed it could be escalated, so I confirmed that in writing to him in email and duly escalated it.  That's in relation to Fremantle.

There were no meetings though, were there, Mr Evans?---There was a meeting between Edsio Gatti and the supervisor, Dean Lorimer onsite and again because Stefan Reynolds was offsite there couldn't be a physical meetings, but there was a telephone meetings.” 34

[50] I accept that this satisfies clause 29.2.1 of the DP World Fremantle Enterprise Agreement 2015 (Fremantle Agreement). 35

[51] Although Mr Evans gave evidence that he understood that delegates in other States had raised their concerns with supervisors he was unable to give direct evidence of this. 36 Mr Kruse said in an email to the CFMMEU on 14 February 2019 that “delegates elected to raise this matter at most sites late on Friday 8 February 2019”.37 He did not regard this as satisfying the dispute resolution procedure.38

[52] Based on the extent of this evidence I am unable to be satisfied that clause 29.2.1 was engaged in the other States.

[53] Following the exchange between CFMMEU delegate, Edsio Gatti and supervisor, Dean Lorimer Mr Evans spoke to the next level of management at Fremantle, Mr Stefan Reynolds. He gave evidence as follows:

“Yes.  Well, there was a brief conversation over the phone in Fremantle between the two people you've referred to and that was all, wasn't it?---No, there was a face-to-face meeting with Edsio Gatti, the delegate, and the shift manager, Dean Lorimer onsite on the Friday.  The delegate rang me back and said the shift manager can't resolve it, and he agrees to escalate it.  There was a phone conversation with myself and Stefan Reynolds who said words similar to effect, because it was a decision made above his head he's not in a position to resolve it, and it should be escalated.  That was followed up by an email from me to Stefan confirming that conversation.” 39

[54] I am satisfied that this action meets the requirements of clause 29.2 of the Fremantle Agreement.

[55] Clauses 29.3 and 29.4 were said to be satisfied by exchange of emails.

[56] On Monday 11 February 2019 Mr Luke Edmonds Legal Officer from the national office of the CFMMEU sent an email to Mr Kruse detailing the dispute and seeking an undertaking from Mr Kruse “that the income protection policy insurance will not be cancelled unless and until the review has been conducted and agreement reached on the future of the policy.” 40

[57] Mr Kruse replied to this email on 14 February 2019, but directed his reply to Mr Warren Smith, Assistant National Secretary of the CFMMEU. Mr Kruse’s reply focussed on his assertion that the dispute resolution procedure had not been adhered to and he said “As we are still at the preliminary phase of the disputes process DP World is unclear on what basis the MUA contend that the IP policy cannot be ceased by the Company.” 41

[58] The following exchange between Mr Perry for DP World and Mr Evans is pertinent: 42

“Attached to your statement are some emails which is marked AE1.  Do you have those?---Yes.

Just go to page 4.  There's an email there from Mr Edmonds of 11 February?---Yes.

Mr Edmonds is a legal officer; is he not?---Yes, he is.  An officer of the union, yes.

Legal officer based in Western Australia?---Yes, but he works on behalf of the national office.

He's located in Western Australia?---Yes.

Then Ms Blomfield is the general counsel of DP World Australia?---Yes, she's always involved in disputes, yes.

Ms Kakoschke is an employment and IR advisor for DP World Australia?---Relatively new, as I understand, to the position but taking the role previously occupied for that.

This is the email that you say meets the requirements of step 3 in the disputes procedure; is that right?---Yes, Stefan Reynolds is the highest manager in Fremantle and so the next highest person is the IR manager, national, which would be - I believe would be Tori, but it was also sent to Ms Blomfield.

It's customary, is it not, for disputes at this stage to be escalated by operational managers; is it not?---There's no operational managers higher than the general manager of operations in each terminal.  The next level, as I understand it, is the IR manager for DP World.

So, but what you're doing here is escalating a State based dispute to people in national roles; you accept that?---Yes, because they speak on behalf of all of those States, yes.

Mr Edmonds asked - he sent this email at 2.57 pm on the 11th, do you see that?---Western Australian time, yes.

Yes.  And he asked for a response by midday the next day?---Yes.

Then the next day he sends Mr Kruse an email.  Do you see that?---Is that page 2?

Page 2?---That's the beginning of page 2.

Bottom of page 2.  Yes?---Yes.  Yes, I see that.

Yes.  That's the email that you say meets the requirements of step 4?---Yes.

There were no discussions in relation to step 3 or step 4 where there, Mr Evans?---The company had made it clear what their position was, and confirmed.

There were no discussions at step 3 or step 4 were there, Mr Evans?---No.

No?---Because the parties - - -

There were no meetings at step 3 or step 4 were there, Mr Evans?---No, there was an email communication.

Yes, there was an email?---DP World was required to participate.

In fact, before the company had even had the opportunity to respond to Mr Evans' email of 12 February you filed an application in the Commission, didn't you?---Given the urgency of the matter, yes.”

[59] The CFMMEU lodged its application for the Commission to deal with the dispute on Thursday 14 February and requested an urgent conciliation conference be conducted to resolve the dispute.

[60] DP World submits that emails do not meet the requirements of clauses 29.2.3 and 29.2.4 of the Agreements. I note the language of the clause turns from the word “meeting” to the word “discussion” or “discussions”. In the circumstances I do not think that the failure of the parties to physically converse at these two stages means the interaction falls short of the kind of interaction that discharges the obligations of the parties arising from clauses 29.2 and 29.2.4. It was open to DP World to seek a meeting or telephone conversation in response to Mr Edmond’s email and they did not.

[61] It is apparent that Mr Kruse was aware of the basis upon which the MUA contended that the IP policy could not be ceased by the Company because it was set out in the email from Luke Edmonds and in an email to him from Slater and Gordon acting on behalf of the CFMMEU dated 5 February 2019. It had also been the subject of much discussion between the parties, albeit during enterprise bargaining for new enterprise agreements. 43 It was apparent that DP World was not open to changing its decision (although Mr Kruse said that enterprise bargaining positions were open to change “down the track”44) and the date of effect of that decision was approaching.45

[62] There is no doubt that exchanging emails is suboptimal in dispute resolution. However the nature of the dispute and the time criticality was such that progressing through the dispute resolution procedure to the point of making an application to the Commission in the way the CFMMEU did was a practical reaction to the stance DP World was taking.

[63] However the absence of the first stage and second stages in Brisbane, Sydney and Melbourne means that I cannot be satisfied that the preconditions to access the dispute resolution procedure have been met for those States. As a result the Commission does not have the power to deal with the dispute in relation to the DP World Brisbane Enterprise Agreement, the DP World Sydney Enterprise Agreement 2015 and the DP World Melbourne Enterprise Agreement 2016.

[64] I consider that in relation to the DP World Fremantle Enterprise Agreement 2015 (Fremantle Agreement) clause 29 has been followed and I am satisfied that the Commission has the power to arbitrate the dispute arising in Fremantle.

Interpretation of the Fremantle Agreement

[65] I will apply the principles recently summarised in “Automative, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU) v Berri Pty Ltd (Berri). 46 The summary conveniently provided in Berri distils decades of jurisprudence derived from decisions of the High Court of Australia, the Federal Court, State courts and decisions of the Fair Work Commission itself.47

[66] Vice President Catanzariti also summarised the application of the Berri principles in Community and Public Sector Union & Australian Municipal, Administrative, Clerical and Services Union v Commonwealth of Australia (represented by the Australian Taxation Office) 48 as follows:

“As stipulated in Berri, the starting point for interpreting an enterprise agreement is to have regard to the ordinary meaning of the words used. Further, the text must be interpreted in the context of the agreement as a whole. Principles 7 and 10 elicited in Berri emphasise that ambiguity in a provision within an enterprise agreement must be identified before one is to have regard to evidence of the surrounding circumstances. However, principle 8 makes it clear that, in determining whether ambiguity exists, one may have regard to evidence of the surrounding circumstances. That is, such evidence can be used to identify and resolve any ambiguity.” 49

[67] The Income Protection clause in the Fremantle Agreement reads as follows:

18.11 Income Protection (IP)

18.11.1 The Company will provide an income protection policy in favour of its Employees who are covered by this agreement from the date of implementation and the value will not exceed 2% of Employee earnings. This insurance is available until 28 February 2019 at which time income protection provision will be reviewed. In the event that IP is discontinued during the nominal term of the Agreement, the percentage value for an individual employee will be added to the salary/clause 11 rates.

18.11.2 Income protection insurance is to provide all Employees with a capped replacement wage where an Employee is unable to attend for work because of personal injury or illness.

18.11.3 The Company will pay the insurance premium to the agreed Fund (the Fund). The parties to this Agreement may vary the Fund by agreement, if it is not meeting our joint objectives.

18.11.4 Where a worker is accessing income protection insurance, Personal Leave shall not be debited except by agreement. It is the Employee’s responsibility to notify the Company should they wish to stop receiving paid Personal/Carer’s Leave if they have sought Personal/Carer’s Leave to be granted.

18.11.5 Benefits provided by this insurance will cease when the Employee is determined fit to resume duties by a qualified medical practitioner or upon reaching the maximum limit of the insurance benefits provided by the fund, whichever is sooner.

18.11.6 It is all Parties’ intention that Employees will proactively manage their illness or injury and try to return to work as soon as possible.

18.11.7 Employees on income protection insurance are required to stay in touch with the Company on a regular basis (at least monthly unless otherwise agreed). The Company will continue to monitor the Employee’s long term absence.

18.11.8 The Company shall not terminate an Employee whilst in receipt of Income Protection, whilst there is a reasonable prognosis of their return to work in their pre injury capacity.

[68] DP World contends that the clause has a plain meaning and evidence of surrounding circumstances cannot be used to contradict its language.

[69] It says:

“Clause 18.11.1 creates an obligation that each DP World company will provide an income protection insurance policy. This policy will be provided from the date the Enterprise Agreement in question is implemented, and the insurance “is available until 28 February 2019”. There is then to be a review. It is not surprising that the parties would conduct a review upon the nominal expiry of an enterprise agreement and cessation of requirement to provide insurance, at which point they would need to consider what (if any) income protection arrangements might be included in the successor agreement.” 50

[70] I do not find the clause this straightforward, although I do not find that it is ambiguous. In any event the evidence of the negotiations for the Agreements sheds very little light on what was intended, so I will rely on the words in the clause in their context to interpret the Fremantle Agreement.

[71] An enterprise agreement continues in force until it is terminated or replaced. Accordingly the review contemplated by the clause – which I consider must be a joint review by the CFMMEU and DP World (a point conceded by DP World when it says “It is not surprising that the parties would conduct a review…” 51) could result in the continuation of the availability of income protection insurance whilst ever there is an enterprise agreement in force.

[72] It is plainly open to the parties to include a new and different provision in a new enterprise agreement, or no provision at all.

[73] However until such time as a new enterprise agreement is entered into the Freemantle Agreement remains in force.

[74] In those circumstances I conclude, firstly, that the clause places an obligation upon DP World to provide an income protection policy in favour of its stevedore employees covered by the Fremantle Agreement from 14 September 2015. This obligation arises from the words of clause 18.11.1 as follows:

“The Company will provide an income protection policy in favour of its Employees who are covered by this agreement from the date of implementation and the value will not exceed 2% of Employee earnings.”

[75] Secondly, I conclude that the clause requires a review of income protection at 28 February 2019. This obligation arises from the words of clause 18.11.1 as follows:

“This insurance is available until 28 February at which time income protection provision will be reviewed.”

[76] These words do not authorise the unilateral cessation of income protection at 28 February 2019. The words identify a point in time at which a review is required. The words do not specify who is to undertake the review. The context and purpose of the words must be considered to ascertain who is obliged to undertake the review. I conclude that the review is required to be done jointly by DP World and the CFMMEU. I come to that conclusion because the words are situated in a clause in an enterprise agreement that has been made by agreement between DP World and its stevedore employees and covers the MUA, as it was then called. These are the parties bound by the Fremantle Agreement, 52 the insurance policy that provides income protection is in the name of the MUA and DP World,53 and clause 18.11.3 provides for agreement concerning the choice of provider.

[77] The whole scheme is consistent with a co-designed, co-owned and co-managed arrangement. It is not available to either party to act unilaterally in relation to the review or its outcome.

[78] Finally, I conclude that if the income protection policy is discontinued on or before 28 February 2019 the clause places an obligation upon DP World to increase the wages of stevedoring employees covered by the Fremantle Agreement by 2%. This obligation arises from the words of clause 18.11.1 as follows:

“In the event that IP is discontinued during the nominal term of the Agreement, the percentage value for an individual employee will be added to the salary/clause 11 rates.”

[79] Because the nominal expiry date of the Fremantle Agreement is 28 February 2019 it is difficult to see how this sentence has any work to do. Its effect and purpose will be taken up after 28 February 2019 by the review.

[80] I consider that the answer to the first question posed by the CFMMEU is No.

[81] This is because the obligation on DP World is to engage in a review. To answer in the affirmative would be to pre-empt the outcome of the review, one possible outcome of which could be the cessation of the policy.

[82] I consider that the answer to the second question posed by the CFMMEU is Yes.

[83] This is because the clause requires the review to be conducted commencing 28 February 2019. Whilst the review is being undertaken the obligation to retain the policy continues. To cease providing an income protection policy prior to the review would be to pre-empt the outcome of the review. One possible outcome of the review could be that the income protection policy is continued.

DEPUTY PRESIDENT

Appearances:

Ms L Doust of Counsel for the Applicant.

Mr D Perry, Solicitor for the Respondent.

Hearing details:

2019:

Sydney.

20 February.

Final written submissions:

For the Applicant, 18 February 2019.

For the Respondent, 19 February 2019.

Printed by authority of the Commonwealth Government Printer

<PR705258>

 1   Transcript PN799 – PN802.

 2   Applicant’s Outline of Submissions dated 18 February 2019 at [3].

 3   Exhibit D7 Draft Income Protection Clause September 2015; Exhibit D4 Witness Statement of Adrian Evans at [10].

 4   Exhibit D4 Witness Statement of Adrian Evans at [11].

 5   Exhibit D4 Witness Statement of Adrian Evans at [17].

 6   Exhibit D1 MUA/DP World Protect Injury & Sickness Schedule 2017-2018.

 7   Exhibit D2 MUA/DP World Protect Injury & Sickness Schedule 2018-2019.

 8   Exhibit D4 Witness Statement of Adrian Evans at [24-26].

 9   Exhibit D4 Witness Statement of Adrian Evans at [27].

 10   Exhibit D4 Witness Statement of Adrian Evans at [26].

 11   Exhibit P1 Email Adrian Evans to Craig Thompson 10 September 2018.

 12   Exhibit P1 Email Exchange Craig Thompson to Adrian Evans 12 September 2018.

 13   Exhibit D4 Witness Statement of Adrian Evans at [32].

 14   Exhibit D4 Witness Statement of Adrian Evans paragraph at [33].

 15   Witness Statement of Maxwell Phillip Kruse at [27].

 16   Exhibit P2 Witness Statement of Maxwell Phillip Kruse Attachment MPK-10.

 17   Transcript PN248 and PN277-PN285.

 18   [1987] HCA 29.

 19   Ibid at [9].

 20   Fair Work Act 2009 (Cth), s 739(6).

 21   Australian Rail, Tram and Bus Industry Union v Asciano Services Pty Ltd t/a Pacific National [2017] FWCFB 1702 at [15].

 22   Clause 4 of the Agreements.

 23   Clause 29.1 of the Agreements.

 24   Respondent’s Outline of Submissions dated 19 February 2019 at [6].

 25   [2017] FWCFB 5032

 26   Ibid at [37].

 27   [2017] FWC 4075 at [4].

 28   Construction, Forestry, Mining and Energy Union v Northa Goonyella Coal Mines Pty Ltd [2015] FWCFB 5619.

 29   Transcript PN814.

 30   Transcript PN958-PN962.

 31   Transcript PN993.

 32   Transcript PN595-PN597.

 33   Transcript PN942-PN943.

 34   Transcript PN419-PN420.

 35   Transcript PN419 and PN428.

 36   Transcript PN427.

 37   Exhibit P2 Witness Statement of Maxwell Phillip Kruse, Attachment MPK-14.

 38   Transcript PN572.

 39   Transcript PN428.

 40   Exhibit D4 Witness Statement of Adrian Evans, Annexure AE1.

 41   Ibid.

 42   TranscriptPN429-PN450.

 43   Transcript PN632.

 44   Transcript PN636.

 45   Transcript PN605.

 46   (2017) 268 IR 285.

 47   Ibid at [114].

 48   [2017] FWC 6890.

 49   Ibid at [13].

 50   Respondent’s Outline of Submissions dated 19 February 2019 at [13].

 51   Ibid.

 52   Clause 4 of the Fremantle Agreement.

 53   Exhibit D1 MUA/DP World Protect Injury & Sickness Schedule 2017-2018; Exhibit D2 MUA/DP World Protect Injury & Sickness Schedule 2018-2019.