DECISION

Fair Work Act 2009
s.739 - Application to deal with a dispute

Grant and Ors
v
Berkeley Vale Pre-school Kindergarten Inc.
(C2021/3415, C2021/3416 and C2021/3418)

Dispute about any matters arising under an enterprise agreement – Berkeley Vale Pre-School Kindergarten Employee Collective Agreement 2017 – teachers whose hours have varied.

Introduction

[1] This decision is about the proper application of the clause 35.7 in the Berkeley Vale Pre-School Kindergarten Employee Collective Agreement 2017 (2017 Agreement). Clause 35.7 deals with “teachers whose hours have varied”. A dispute regarding the interpretation of the word “varied” in clauses 35.2(d) and 35.7 has arisen in the context of additional hours worked by Karen Grant, Sonja Denniss and Colleen Templeton (collectively, the Applicants) in 2020.

[2] The Applicants contend that the additional hours worked through the year constitute a variation in their hours that gives rise to an adjustment to salary to be paid at the end of the year as a part of their Christmas pay.

[3] The Applicants are employed by Berkeley Vale Pre-School Kindergarten Inc (Respondent/Employer). The Employer denies that additional hours give rise to an adjustment to salary.

[4] The Applicants are self-represented. On 16 June 2021 the Applicants each applied to the Fair Work Commission (Commission) to deal with a dispute under s.739 of the Fair Work Act 2009 (Cth) (FW Act) with the Respondent.

[5] On 16 July 2021 the Independent Education Union of Australia (IEU), while not representing the Applicants, also made submissions regarding the interpretation of clauses 35.2(d) and 35.7 of the 2017 Agreement. I was satisfied that the Commission should inform itself by also hearing from the IEU because clauses of the nature contained in the 2017 Agreement appear in other enterprise agreements to which cover the IEU. I was greatly assisted by the intervention of the IEU.

[6] The Applicants and the IEU both contend that, on a proper interpretation of the 2017 Agreement, the additional hours worked by the Applicants in 2020 constitutes a variation to hours worked for the purposes of clauses 35.2(d) and 35.7 of the 2017 Agreement.

[7] The Employer contends that the definition of variation in the 2017 Agreement does not extend to ad hoc extra days worked by employees but rather, per clause 12(d), is limited to variations to employees’ ordinary hours by mutual agreement in writing.

[8] Colloquially, the dispute is characterised as “the Christmas pay issue.”

[9] However, the Articulated Question, to be determined by the Commission, has been formalised as follows:

“Do the additional hours worked by each of the Applicants in 2020 constitute a variation to hours worked for the purposes of clauses 35.2(d) and 35.7 of the 2017 Agreement?”

Jurisdiction

[10] Section 739 of the FW Act empowers the Commission to deal with certain disputes under enterprise agreement dispute settlement terms.

[11] In the present matter the clause in the 2017 Agreement dealing with dispute settling procedures is clause 43.3. It applies to disputes relating to “the interpretation, application or operation of a provision of this Agreement or the National Employment Standards”.¹ After compliance with the steps set out in clause 43.3(a)-(e) of the 2017 Agreement, the 2017 Agreement confers jurisdiction on the Commission to resolve disputes, first by “meditation or conciliation and if the dispute remains unresolved by arbitration.”²

[12] In dealing with the dispute “the Fair Work Commission may exercise the procedural powers in relation to hearings, witnesses, evidence and submissions which are necessary to make the arbitration effective.” 3

[13] It is common ground between the parties that the Commission has jurisdiction to arbitrate the dispute.

The 2017 Agreement

[14] The 2017 Agreement was approved on 13 March 2018.⁴ It commenced operation on 20 March 2018 May. 5 It has a nominal expiry date of 31 July 2020.⁶

[15] The 2017 Agreement covers the Respondent and is said to bind:

•  “Berkeley Vale Pre School Kindergarten Inc. (77 641 023 678), and

•  the employees.”⁷

[16] In accordance with section 201(2) of the FW Act the 2017 Agreement also covers the IEU.⁸

[17] The dispute concerns the adjustment of salary for teachers whose hours have varied per clause 35 and whether the Respondent has correctly applied clauses 35.2(d) and 35.7 to the Applicants.

[18] The relevant clauses provide that,

“35. Payment on Termination and Adjustment of Salary for Teachers Who Commence Employment After the Pre-school Service Date and For Teachers Who Take Approved Leave Without Pay or whose hours have varied

35.1. This clause applies only to teachers and incorporates the NES entitlement with respect to annual leave.

35.2. The provisions of this clause shall apply where:

(a) a teacher’s employment ceases;

(b) a teacher commences employment after the Pre-School service date; or

(c) where a Teacher takes approved leave without pay

(d) the hours which an employee has worked at the pre-school have varied since the pre-school service date.

35.3. Calculation of Payments

(a) Payments made pursuant to this clause shall be calculated in accordance with the following formula:

P = S x C – D
            B

Where:

P is the payment due.

S is the total salary paid in respect of term weeks, or part thereof, since the pre-school service date (or date of employment in circumstances where a Teacher has been employed by the Pre-School for less than one year).

B is the number of term weeks, or part thereof, in the year.

C is the number of non-term weeks, or part thereof, in the year.

D is the salary paid in respect of non-term weeks, or part thereof, that have occurred since the anniversary of employment (or date of employment in circumstances where a Teacher has been employed by the Pre-school for less than one year).

(b) For the purpose of this clause:

(i) "Pre-school Service Date" means the usual commencement date of employment at a Pre-school for Teachers who are to commence teaching on the first day of the first term.

(ii) "Teacher" means any teacher other than a Casual Teacher.

…

35.7. Teachers Whose Hours Have Varied

Where the hours which an employee normally works at the centre have varied since the Pre-school Service Date in any year, and the employee's employment is to continue in the next year, the employee shall be paid at the conclusion of Term IV in accordance with the formula provided in clause 35.3 and shall receive no salary or other payment other than payment under this clause until the Pre-school Service Date in the following year.”

[19] Clause 35, as it appears in the 2017 Agreement, also appeared in the two predecessor enterprise agreements that covered the Respondent made in 2011 and 2014.

[20] Similar provisions are contained in the underlying Modern Award/reference interest, namely the Educational Services (Teachers) Award 2020.

Substantive hearing

[21] In advance of the substantive hearing listed for 20 August 2021 the parties filed material. For completeness I set out below the documents relied upon by the parties. I have had regard to all of this material in coming to this decision,

[22] On 18 August 2021 the parties agreed that the dispute could be decided on the papers. Consequently, the listing for 20 August 2021 was vacated.

Uncontested facts

[23] The following matters were either agreed between the parties or not substantially contested. Consequently, I make the following findings of fact:

a) In April 1991 Mrs Denniss commenced full-time employment with the Respondent as an Early Childhood Teacher. 9

b) In 2000 Mrs Denniss went on maternity leave. 10

c) In 2001 Mrs Denniss returned to work with the Respondent at a three day per week capacity for 12 months. 11

d) In 2002 Mrs Denniss commenced working at a four day per week capacity. 12

e) In 2003 Mrs Denniss went on maternity leave. 13

f) In 2004 Mrs Denniss returned to work with the Respondent at a three day per week capacity and is currently working at this capacity. 14

g) Since the commencement of her employment Mrs Dennis has opted not to work additional days due to family circumstances. 15

h) In January 2005 Mrs Templeton commenced full-time employment with the Respondent as the Director and an Early Childhood Teacher. 16

i) From 2005 to 2010 Mrs Templeton went on maternity leave for a total of 18 months. 17

j) In 2008 Mrs Grant commenced casual employment with the Respondent as an Early Childhood Teacher. 18

k) In 2011 Mrs Templeton commenced working at a four day per week capacity and is currently working at this capacity. 19

l) In 2011 employees of the Respondent engaged the support and representation of the IEU to establish a collective Enterprise Agreement. 20

m) On 25 October 2011 The Berkeley Vale Pre School Kindergarten Inc Employees Agreement 2011 (2011 Agreement) was approved. 21

n) The 2011 Agreement contained the formula in clause 35.3 that is at the centre of the current dispute.

o) Historically, when an Early Childhood Teacher worked additional hours throughout the year the formula in clause 35.3 of the 2017 Agreement was applied and paid to the Applicants in addition to normal Christmas wages as guided by the Community Connections Services Australia (CCSA). 22 However, the fact that there was an historical practice is not determinative of the dispute.

p) In January 2012 Mrs Grant commenced working at a one day per week capacity with the Respondent. During this time Mrs Grant worked extra days filling in for teachers in their absence. 23

q) In January 2013 Mrs Grant commenced working at a two day per week capacity with the Respondent and continued to work extra days throughout the year as required. 24

r) In January 2018 Mrs Grant commenced working at a four day per week capacity with the Respondent and is currently working at this capacity. 25

s) During this time Mrs Grant has reduced her additional working days to approximately a few days per year. 26

t) On 13 March 2018 the Berkeley Vale Pre-School Kindergarten Employee Collective Agreement 2017 was approved.²⁷

u) Noting that, over the course of their employment, there have been changes in the Applicants’ patterns of work, relevantly, by 2020:

a. Mrs Grant worked 4 days per week (0.8 full-time equivalent (FTE)),

b. Mrs Templeton worked 4 days per week (0.8 FTE),

c. Mrs Denniss worked 3 days per week (0.6 FTE).

v) That is to say, relevantly, the Applicants are part-time employees.

w) In 2020 Mrs Templeton worked the following additional days due to the resignation of the Administration Officer and subsequent resignations of two Early Childhood Teachers:

a. on 27 March 7.6 hours,

b. on 31 July 2.5 hours,

c. on 28 August 7.6 hours,

d. on 4 September 7.6 hours,

e. on 18 September 7.6 hours,

f. on 25 September 7.6 hours,

g. on 16 October 7.6 hours, and

h. on 4 December 7.6 hours. 28

x) On 24 August 2020 Mrs Grant worked one additional day of 7.6 hours following the resignation of two Early Childhood Teachers. 29

y) On 20 November 2020 and 11 December 2020 Mrs Denniss worked two additional days of 7.6 hours following the resignation of two Early Childhood Teachers. 30

z) At the conclusion of 2020 the Applicants were paid at an ordinary rate for the additional hours they worked in 2020. However they did not receive any payment as determined by the formula in clause 35.3 of the 2017 Agreement. 31

Principles of interpretation

[24] The principles relevant to the task of construing an enterprise agreement were distilled in The Australasian Meat Industry Employees Union v Golden Cockerel³² as follows:

“1. The [Acts Interpretation] Act does not apply to the construction of an enterprise agreement made under the [FW] Act.

2. In construing an enterprise agreement it is first necessary to determine whether an agreement has a plain meaning or contains an ambiguity.

3. Regard may be had to evidence of surrounding circumstances to assist in determining whether an ambiguity exists.

4. If the agreement has a plain meaning, evidence of the surrounding circumstances will not be admitted to contradict the plain language of the agreement.

5. If the language of the agreement is ambiguous or susceptible to more than one meaning then evidence of the surrounding circumstance will be admissible to aide the interpretation of the agreement.

6. Admissible evidence of the surrounding circumstances is evidence of the objective framework of fact and will include:

(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;

(c) evidence of matters in comm

on contemplation and constituting a common assumption.

7. The resolution of a disputed construction of an agreement will turn on the language of the Agreement understood having regard to its context and purpose.

8. Context might appear from:

(a) the text of the agreement viewed as a whole;

(b) the disputed provision’s place and arrangement in the agreement;

(c) the legislative context under which the agreement was made and in which it operates.

9. Where the common intention of the parties is sought to be identified, regard is not to be had to the subjective intentions or expectations of the parties. A common intention is identified objectively, that is by reference to that which a reasonable person would understand by the language the parties have used to express their agreement.

10. The task of interpreting an agreement does not involve rewriting the agreement to achieve what might be regarded as a fair or just outcome. The task is always one of interpreting the agreement produced by parties.”³³

[25] In 2017 a Full Bench of the Commission modified the above summary in Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (known as the Australian Manufacturers Workers Union (AMWU) v Berri Pty Limited (‘Berri’).³⁴ The Full Bench made the following observations:

“[41] 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. The disputed words must be construed in the context of the agreement as a whole. The process of interpretative analysis focusses upon the language of the agreement itself. In Amcor Limited v CFMEU,35 Gleeson CJ and McHugh J described the process in the following terms: ‘[t]he resolution of the issue turns upon the language of the particular agreement, understood in the light of its industrial context and purpose ...’.36 Or, as Kirby J put it in the same case, ‘[i]nterpretation is always a text-based activity’.37

…

[44] There is considerable force in the Appellant’s contention that, as a general principle, all words in an enterprise agreement must prima facie be given some meaning and effect. It would seem to follow that the inclusion of a laundry allowance in Appendix 3 of the 2014 Agreement should not be regarded as superfluous or insignificant. Such an approach accords with the principles of statutory construction,³⁸ and, as a general proposition, the principles developed in the general law in the context of the interpretation of statutes are applicable to the interpretation of enterprise agreements. As the Full Bench observed in Paper Australia Pty Ltd t/a Australian Paper v Australian Manufacturing Workers’ Union:³⁹

‘Australian Paper made the submission that no principle of statutory construction has any application to the interpretation of enterprise agreements, and relied upon the proposition stated in Golden Cockerel  that the Acts Interpretation Act 1901 (Cth) does not apply to the construction of enterprise agreements in support of that submission. The submission is rejected. It does not follow from the fact that enterprise agreements are not instruments to which the Acts Interpretation Act applies that modes of textual analysis developed in the general law in the context of the interpretation of statutes are incapable of application to enterprise agreements. While it undoubtedly remains necessary in interpreting a particular instrument to pay attention to the peculiar characteristics of that instrument, it is equally the case that there has been a convergence in the approach taken to the interpretation of statutes, agreements and other types of instruments - in particular, in the emphasis on the objective ascertainment of the instrument’s purpose and the move from textual to contextual interpretation. Additionally, many of the grammatical aides to the interpretation of statutes are equally applicable to other types of instruments. In the High Court decision in Royal Botanic Gardens and Domain Trust v South Sydney City Council, Kirby J said “... it would be indefensible for this Court, without good reason, to adopt a different approach in the ascertainment of the meaning of contested language in a contract from the approach observed in respect of legislation”. We therefore do not consider that Golden Cockerel should be taken as an exhaustive statement of the means by which the text of an enterprise agreement might be construed.’ (references omitted)

….

[46] There is a long line of authority in support of the proposition that a ‘narrow or pedantic’ approach to the interpretation of industrial instruments (such as enterprise agreements) is to be avoided,⁴⁰ and that ‘fractured and illogical prose may be met by a generous and liberal approach to construction’.⁴¹ A consequence of such an approach may be that some principles of statutory construction have less force in the context of construing an enterprise agreement. For example, in Shop, Distributive and Allied Employees’ Association v Woolworths Limited,⁴² 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, applied with less force in the context of an enterprise agreement:

‘Typically, such agreements are the product of hard negotiation, in which wording of particular clauses is often agreed without reference to other provisions of the same document. Provisions are commonly transmitted from one agreement to the next in a series, without regard to whether their terminology sits well with the words used in newly adopted terms. The use of other agreements, and awards, as precedents can often result in the borrowing of provisions, again without regard to whether the words used in them are consistent with the rest of the agreement under consideration. For these and other reasons, consistency will often be absent. It is easy to see that the same word can be used in different provisions with different meanings.’⁴³

[47] We acknowledge that the fact that the instrument being construed is an enterprise agreement is itself an important contextual consideration. But it is also relevant that the instrument being interpreted in these proceedings is an enterprise agreement made pursuant to Part 2-4 of the FW Act and, as observed by White J in National Tertiary Education Union v La Trobe Respondent,⁴⁴ it may be inferred that such agreements are intended to establish binding obligations:

‘The manner of making such agreements is subject to detailed prescription and their operation is contingent upon approval by the Fair Work Commission, the obtaining of which is itself a matter of detailed prescription. In my opinion, it is natural to suppose that parties engaging in this detailed process intend that the result should be a binding and enforceable agreement. To my mind, that is an important matter of context when approaching the construction of [the disputed clause in the agreement]’.⁴⁵

[48] Of course his Honour’s observation does not mean that an enterprise agreement may not include ‘matters which are in the nature of statements of aspiration or commitment and not themselves intended to be enforceable obligations or entitlements’⁴⁶ – so much is clear from Reeves v MaxiTRANS Australia Pty Ltd.⁴⁷ The fact that the 2014 Agreement is an enterprise agreement made pursuant to Part 2-4 of the FW Act is also relevant to the weight to be given to evidence of prior negotiations, a point to which we shall return shortly.

….

[60] It seems to us that there is an ambiguity in the 2014 Agreement regarding the laundry allowance referred to in Attachment 3. In particular, it is unclear in what circumstances the amount specified is to be paid and to whom. The frequency with which any such payment is to be made is also unclear.

[61] Having identified ambiguity it is permissible to consider evidence of the surrounding circumstances as an aid to the task of interpreting the agreement. As Mason J observed in Codelfa Construction Pty Ltd v State Rail Authority (NSW) (Codelfa):⁴⁸

‘… evidence of surrounding circumstances is admissible to assist in the interpretation of the contract if the language is ambiguous or susceptible of more than one meaning. But it is not admissible to contradict the language of the contract where it has a plain meaning.’⁴⁹

[62] 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. Evidence of such objective facts is to be distinguished from evidence of the subjective intentions of the parties, such as statements and actions of the parties which are reflective of their actual intentions and expectations. As Mason J observed in Codelfa:

‘… when the issue is which of two or more possible meanings is to be given to a contractual provision we look, not to the actual intentions, aspirations or expectations of the parties before or at the time of contract, except insofar as they are expressed in the contract, but to the objective framework of facts within which the contract came into existence, and to the parties’ presumed intention in this setting.’⁵⁰

[63] As noted in Golden Cockerel, evidence of relevance to the objective framework of facts will include:

(i) 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;

(ii) notorious facts of which knowledge is to be presumed; and

(iii) evidence of matters in common contemplation and constituting a common assumption.

[64] As to category (i), evidence of prior negotiations will be admissible – but only for a defined purpose. As Mason J observed in Codelfa:

‘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 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.’⁵¹

[65] 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. So much is clear from the oft-quoted statement of Madgwick J in Kucks v CSR Limited:⁵²

‘But the task remains one of interpreting a document produced by another or others. A court is not free to give effect to some anteriorly derived notion of what would be fair or just, regardless of what has been written into the award. Deciding what an existing award means is a process quite different from deciding, as an arbitral body does, what might fairly be put into an award. So, for example, ordinary or well-understood words are in general to be accorded their ordinary or usual meaning.’

….

[88] The diversity of interests involved in the negotiation and making of enterprise agreements warrants the adoption of a cautious approach to the admission and reliance upon evidence of positions advanced during the negotiation process. As Rares J recently observed, in Australian International Air Pilots Association v Qantas Airways Limited:⁵³

‘Substantially, the Act provided that the agreement was a tripartite document between a body of employees, a corporation with numerous officers and an industrial association. The involvement of so many individuals in the formation of the agreement re-emphasises the importance of approaching the construction of that document in accordance with the principle of objectivity. It is important, in doing so, to be cautious and bear firmly in mind the fact that the agreement was formed by a diversity of persons who had sought to protect their differing interests by various formulations of words in it. Those disparate intentions cannot be determinative of the proper construction to be given to the words chosen. In Health Services Union v Ballarat Health Services [2011] FCA 1256 at [79], Gray J said:“In the days when an award might be negotiated between a union and an employer, and made by consent, the existence of a common understanding between the union and the employer as to the meaning of terms might have had some role to play in their construction. Whatever were the terms of such an agreement, and whatever their meaning was, those terms were imposed upon the employees who became bound by the award. In the current era, most industrial instruments are required to be put to a vote of the employees whose work will be covered by them, before they can be certified or approved so as to become enforceable by statute. The union and the employer who negotiated the terms might have had a common understanding of the meaning of them, but that understanding might not have been shared by all or some of the employees who voted for the operation of the agreement. They may have been entirely ignorant of the common understanding. In those circumstances, the occasions on which it can be said that a party to an agreement who entered into it on a common understanding should not be allowed to resile from that understanding will be rarer than they have been in the past.”’

….

[101] 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.

[102] Some early High Court authority permitted the admissibility of post-contractual conduct as an aid to construction.⁵⁴ But obiter in more recent High Court judgements tends to support the view that such evidence is inadmissible.⁵⁵

[103] Further, in Agricultural and Rural Finance Pty Ltd v Gardiner,⁵⁶ a majority of the High Court adopted the ‘general principle’ that ‘it is not legitimate to use as an aid to the construction of [a] contract anything which the parties said or did after it was made’. Of course, the expression ‘general principle’ is itself somewhat ambiguous, as Campbell JA observed in Franklins Pty Ltd v Metcash Trading Ltd (Metcash):⁵⁷

‘It might mean that it is a principle that applies in all cases, or that it is a principle that usually applies, though perhaps being subject to exceptions.’

[104] As Allsop P observed in Metcash (at [6]), ‘much ink has been spilt over the last 30 years on this topic’. There is a daunting array of intermediate appellate court judgements on the admissibility of post contractual conduct,⁵⁸ but no clear consensus appears to have emerged.

[105] The judgement of Santow J in Spunwill Pty Ltd v BAB Pty Ltd⁵⁹ gave detailed consideration to whether subsequent conduct may be used as an aid to construction. Spunwill is a significant first instance judgement that has been considered, and cited with approval, in some of the intermediate appellate court judgements which have dealt with this issue. After considering the relevant authorities, Santow J concluded that the use of subsequent conduct as an aid to the construction of a contract:

‘… will be legitimate under the objective theory of contract in the limited circumstances where conduct evidences a clear and mutual subjective intention as to what the contract originally meant.’⁶⁰

[106] In the industrial context it has been accepted that, in some circumstances, subsequent conduct may be relevant to the interpretation of an industrial instrument. But, consistent with the view expressed by Santow J in Spunwill, the post-contractual conduct must be such as to found a common understanding – a settled interpretation accepted by the parties.

[107] We also note that in Spunwill⁶¹ Santow J observed that in deciding on the weight to be given to extrinsic evidence of post contractual conduct as part of the surrounding circumstances, it was useful to refer to the following passage from the judgment of Lambert JA in the Canadian case of Re Canadian National Railways and Canadian Pacific Ltd ⁶²:

‘In the case of evidence of subsequent conduct the evidence is likely to be most cogent where the parties to the agreement 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. 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. In no case is it necessary that weight be given to evidence of subsequent conduct.’

[26] The Full Bench in Berri then modified the summary set out in Golden Cockerel in light of the observations made in the course of their decision.

“[114] The principles relevant to the task of construing a single enterprise agreement may be summarised as follows:

1. The construction of an enterprise agreement, like that of a statute or contract, begins with a consideration of the ordinary meaning of the relevant words. The resolution of a disputed construction of an agreement will turn on the language of the agreement having regard to its context and purpose. Context might appear from:

(i) the text of the agreement viewed as a whole;

(ii) the disputed provision’s place and arrangement in the agreement;

(iii) the legislative context under which the agreement was made and in which it operates.

2. The task of interpreting an agreement does not involve rewriting the agreement to achieve what might be regarded as a fair or just outcome. The task is always one of interpreting the agreement produced by parties.

3. The common intention of the parties is sought to be identified objectively, that is by reference to that which a reasonable person would understand by the language the parties have used to express their agreement, without regard to the subjective intentions or expectations of the parties.

4. The fact that the instrument being construed is an enterprise agreement made pursuant to Part 2-4 of the FW Act is itself an important contextual consideration. It may be inferred that such agreements are intended to establish binding obligations.

5. The FW Act does not speak in terms of the ‘parties’ to enterprise agreements made pursuant to Part 2-4 agreements, rather it refers to the persons and organisations who are ‘covered by’ such agreements. Relevantly s.172(2)(a) provides that an employer may make an enterprise agreement ‘with the employees who are employed at the time the agreement is made and who will be covered by the agreement’. Section 182(1) provides that an agreement is ‘made’ if the employees to be covered by the agreement ‘have been asked to approve the agreement and a majority of those employees who cast a valid vote approve the agreement’. This is so because an enterprise agreement is ‘made’ when a majority of the employees asked to approve the agreement cast a valid vote to approve the agreement.

6. Enterprise agreements are not instruments to which the Acts Interpretation Act 1901 (Cth) applies, however the modes of textual analysis developed in the general law may assist in the interpretation of enterprise agreements. An overly technical approach to interpretation should be avoided and consequently some general principles of statutory construction may have less force in the context of construing an enterprise agreement.

7. In construing an enterprise agreement it is first necessary to determine whether an agreement has a plain meaning or it is ambiguous or susceptible of more than one meaning.

8. Regard may be had to evidence of surrounding circumstances to assist in determining whether an ambiguity exists.

9. If the agreement has a plain meaning, evidence of the surrounding circumstances will not be admitted to contradict the plain language of the agreement.

10. If the language of the agreement is ambiguous or susceptible of more than one meaning then evidence of the surrounding circumstance will be admissible to aide the interpretation of the agreement.

11. The admissibility of evidence of the surrounding circumstances is limited to evidence tending to establish objective background facts which were known to both parties which inform and the subject matter of the agreement. Evidence of such objective facts is to be distinguished from evidence of the subjective intentions of the parties, such as statements and actions of the parties which are reflective of their actual intentions and expectations.

12. Evidence of objective background facts will include:

(i) 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;

(ii) notorious facts of which knowledge is to be presumed; and

(iii) evidence of matters in common contemplation and constituting a common assumption.

13. The diversity of interests involved in the negotiation and making of enterprise agreements (see point 4 above) warrants the adoption of a cautious approach to the admission and reliance upon the evidence of prior negotiations and the positions advanced during the negotiation process. Evidence as to what the employees covered by the agreement were told (either during the course of the negotiations or pursuant to s.180(5) of the FW Act) may be of more assistance than evidence of the bargaining positions taken by the employer or a bargaining representative during the negotiation of the agreement.

14. 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.

15. In the industrial context it has been accepted that, in some circumstances, subsequent conduct may be relevant to the interpretation of an industrial instrument. But such post-agreement conduct must be such as to show that there has been a meeting of minds, a consensus. Post-agreement conduct which amounts to little more than the absence of a complaint or common inadvertence is insufficient to establish a common understanding.”⁶³

[27] I adopt the Berri principles. Consequently, it is necessary to,

a) begin the analysis with a consideration of the ordinary meaning of the words of the relevant clauses in the Agreement,

b) determine whether the 2017 Agreement has a plain meaning,

c) review the text of the 2017 Agreement as a whole,

d) not rewrite the 2017 Agreement to achieve what might be regarded as a fair or just outcome,

e) (in determining the objective intention of the parties) do so by reference to what a reasonable person would understand by the language used in the 2017 Agreement,

f) not adopt an overly technical approach to the interpretation of the 2017 Agreement, and

g) not contradict the plain language of the 2017 Agreement.

Submissions – IEU

[28] On 16 July 2021 the IEU submitted that:

“Introduction

1. There are three proceedings before the Commission on application by members of the Independent Education Union of Australia (‘IEUA’). All proceedings concern the Applicants working varied hours in 2020 pursuant to the provisions of subclause 35.7 of the Berkeley Vale Pre-School Kindergarten Employee Collective Agreement 2017 (‘the Enterprise Agreement’).

2. The Union makes these submissions having been advised by the Applicants that the Commission stated in proceedings on 24 June 2021 that it strongly encouraged the Union to lodge submissions in these matters. It should be noted that the Union is not the representative of the Applicants in these proceedings due to them only joining the Union after the matters in dispute had arisen. It is not a reflection of the Union’s view on the merits of the Applicants claims in these proceedings.

3. The three proceedings are as follows:

(a) A dispute notified to the Commission under clause 43 of the Enterprise Agreement by Karen Grant, a teacher employed at Berkeley Vale Pre-school Kindergarten Inc. by the Respondent (C2021/3415); and

(b) A dispute notified to the Commission under clause 43 of the Enterprise Agreement by Colleen Templeton, a director employed at Berkeley Vale Pre-school Kindergarten Inc. by the Respondent (C2021/3418); and

(c) A dispute notified to the Commission under clause 43 of the Enterprise Agreement by Sonja Denniss a teacher employed at Berkeley Vale Pre-school Kindergarten Inc. by the Respondent (C2021/3416); and

4. All dispute proceedings concern the proper interpretation and application of the provisions of subclause 35.7 of the Enterprise Agreement.

Background

5. The Applicants are employed on a part-time basis by the Respondent as follows:

Karen Grant – 4 days per week, 0.8 Full-time equivalent

Colleen Templeton – 4 days per week, 0.8 Full-time equivalent

Sonja Denniss – 3 days per week, 0.6 Full-time equivalent

6. In 2020, the Applicants worked the following hours in addition to their usual hours:

Karen Grant – 7.6 hours on 24 August 2020

Colleen Templeton – 7.6 hours on 27 March 2020
2.5 hours on 31 July 2020

7.6 hours on 4 August 2020

7.6 hours on 18 August 2020

7.6 hours on 25 August 2020

7.6 hours on 28 August 2020

7.6 hours on 16 October 2020

7.6 hours on 4 December 2020

Sonja Denniss – 7.6 hours on 20 November 2020

7.6 hours on 11 December 2020

7. The Applicants were paid at single time rates for working the additional hours. However, unlike previous years (where one or more of the Applicants had worked additional hours), subclause 35.7 of the Enterprise Agreement was not applied, despite the Applicants making representations to the Respondent as to its proper interpretation and application.

Jurisdiction of the Commission

8. The jurisdiction of the Commission to deal with this dispute is grounded in clause 43 of the Enterprise Agreement:

Clause 43 Dispute Settlement Procedure

43.1 Both the Employer and the Employees have an interest in the proper application of this Agreement and in minimising and settling disputes about matters in this Agreement in a timely manner. As far as possible disputes should be resolved at the level at which they arise and by employees directly involved in the dispute. Those who are party to dispute must cooperate to ensure that the resolution procedures are carried out as quickly as is reasonably possible. If the dispute relates to the application of this Agreement, the parties to the dispute or, where requested, their representative which may be union will first attempt to resolve the matter at the workplace.

43.2 A dispute including about the interpretation, application or operation of a provision of this Agreement or the National Employment Standards, will be resolved using the procedures set out in this Clause 43.3. Throughout the process the Employee may choose to be assisted by or act through their representative.

43.3 Procedures.

Where a dispute arises under this clause, the affected Employee will first discuss the matter under dispute with their director or Employer.

(a)  The Employee is required to notify (in writing or otherwise) the Employer as to the substance of the grievance, request a meeting with the Employer for bilateral discussions and state the remedy sought.

b)  The grievance must initially be dealt with as close to its source as possible, with graduated steps for further discussion and resolution at higher levels of authority.

(c)  Reasonable time limits must be allowed for discussion at each level of authority.

(d)  At the conclusion of the discussion, the Employer must provide a response to the Employee's grievance, if the matter has not been resolved, including reasons for not implementing any proposed remedy.

(e)  While a procedure is being followed, normal work must continue.

(f)  Where the dispute is not resolved by the processes referred to above either party to the dispute may refer the matter to the Fair Work Commission for resolution by mediation and or conciliation and if the dispute remains unresolved by arbitration. In dealing the dispute the Fair Work Commission may exercise the procedural powers in relation to hearings, witnesses, evidence and submission which are necessary to make the arbitration effective. During this process the Employee and the Employer may be represented where requested by a person or organisation of their choice.

(g) Any dispute referred to the Fair Work Commission to under this clause should be dealt with a member agreed by the parties to the dispute at the time or in default a member nominated by the Fair Work Commission.

(h) Subject to any legal right of appeal or review which might exist, the resolution of the dispute shall be binding on the parties to the dispute.

(i) Except where an occupational hazard exists until the procedures in subclauses have been exhausted:

Work shall continue in a normal manner,

No industrial action shall be taken by the employer or teacher

The employer, the employee or their representatives shall not take any other action likely to exacerbate the dispute.

9. The Applicants have taken the following relevant steps to resolve the dispute in accordance with clauses 43.3(a) to (e) of the Enterprise Agreement:

a. The Applicants notified the Respondent’s Management Committee of the substance of the dispute towards the end of 2020.

b. The Applicants and the Respondent continued discussions on numerous occasions.

c. The Applicant took graduated steps for further discussion and resolution with the Management Committee.

d. During these discussions, the Applicants allowed for reasonable time limits and maintained normal work.

e. On 22 April 2021, the Respondent’s Management Committee provided a response to the dispute and deemed that no further discussion could continue over the dispute and that the Applicants would need to refer the dispute to the FWC.

10. The dispute settlement procedure set out in clause 43 of the Enterprise Agreement satisfies the requirement of section 186(6)(i) of the Fair Work Act 2009 (Cth) (‘FW Act’), requiring that an enterprise agreement includes a dispute resolution provision that requires or allows the Commission to settle disputes about any matters arising under an enterprise agreement.

11. The FW Act sets out dealing with disputes within sections 738 and 739. Section 738(b) relates to clause 43.3 of the Enterprise Agreement, as it describes that the Division applies if an enterprise agreement includes a dispute procedure, including a term referred to in subsection 186(6). As the Enterprise Agreement includes a dispute procedure in clause 43.3, section 739 applies as section 738(b) requires or allows the Commission to deal with the Applicant’s dispute.

12. As the disputes remain unresolved after conciliation, the Commission is able to arbitrate the dispute per subclause 43.3 (f). In accordance with s739(4) of the FW Act, the Commission may arbitrate the dispute.

Relevant Terms of the Enterprise Agreement

13. The term of the Enterprise Agreement which the Applicants seek to have properly interpreted and applied is subclause 35.7 which provides as follows:

35.7 Teachers Whose Hours Have Varied

Where the hours which an employee normally works at the centre have varied since the Pre-school Service Date in any year, and the employee’s employment is to continue in the next year, the employee shall be paid at the conclusion of Term IV in accordance with the formula provided in clause 35.3 and shall receive no salary or other payment under this clause until the Pre-school Service Date in the following year.

14. Subclause 35.2 sets out the circumstances when Clause 35 applies:

35.2 The provisions of this clause shall apply where:

(a) a Teacher’s employment ceases;

(b) A teacher commences employment after the Pre-School service date; or

(c) Where a Teacher takes approved leave without pay

(d) The hours which an employee has worked at the pre-school have varied since the pre-school service date.

15. Subclause 35.3 contains the formula referred to in subclause 35.7 where a teacher’s hours have varied:

35.3 Calculation of Payments

(a) Payments made pursuant to this clause shall be calculated in accordance with the following formula:

P=s x c - d
       b

Where:

P is the payment due

s is the total salary paid in respect of term weeks, or part thereof, since the pre-school service date (or date of employment in circumstances where a teacher has been employed by the Pre-School for less than one year).

b is the number of term weeks, or part thereof, in the year,

c is the number of non-term weeks, or part thereof, in the year.

d is the salary paid in respect of non-term weeks, or part thereof, that have occurred since the anniversary of employment(or date of employment in circumstances where. Teacher has been employed by the pre-school for less than one year).

(b) For the purpose of this clause :

(i) “Pre-school Service Date” means the usual commencement date of employment at a Pre-school for Teachers who are to commence teaching on the first day of the first term.

(ii) “Teacher” means any teacher other than a Casual Teacher.

16. Subclause 12 (c) outlines the method of payment for part-time employees who agree to work additional hours:

Clause 12 (c) A part time employee who agrees to work in excess of their normal shifts on any day will be paid at ordinary time for up to eight hours provided that additional hours are worked during the ordinary hours of operation of the centre.

17. Subclause 20.2 similarly deals with part-time employees working additional hours:

20.2 Part-time employees who agree to work in excess of their normal hours shall be paid at ordinary time for up to eight hours provided that the additional time worked id during the ordinary hours of operation of the centre.

18. Subclause 19.6 makes it clear that annual leave entitlements form part of the payments received during non-term time:

19.6 The annual salary and any applicable allowances payable under this agreement are paid in full satisfaction of the employee’s entitlements foe the year or a proportion of the year. The contact employee absence during non term time weeks is deemed to include their entitlements to annual leave.

19. The Educational Services (Teachers) Award 2020 [MA000077] contains a similar requirement to clause 35 of the Enterprise Agreement at clause 22:

Pro rata payment of salary inclusive of annual leave

22.1 Clause 22 of the award provides industry specific detail and incorporates the NES entitlement with respect to annual leave.

22.2 Clause 22 does not apply to teachers employed in early childhood services operating for at least 48 weeks per year covered by Schedule A – Hours of Work and Related Matters – Teachers employed in early childhood services operating for at least 48 weeks per year.

22.3 For the purpose of clause 22:

(a) school or preschool service date means the date from which employees are paid at the commencement of the school/preschool year in their first year of service with the employer; and

(b) employee means an employee other than a casual employee.

22.4 The provisions of clause 22 will apply:

(a) in the calculation of payment of pro rata salary where an employee’s employment ceases; or

(b) in the calculation of payment of pro rata salary if:

(i) an employee commenced employment after the school or preschool service date; or

(ii) an employee has taken leave without pay of more than 2 term weeks since the school or preschool service date; or

(iii) the hours which an employee has worked at school or preschool have varied since the school or preschool service date.

Calculation of payments

The calculation is as follows:

22.5 The formula in clause 22.5 is intended to be used to calculate the pro rata salary inclusive of annual leave owing to an employee in respect of the school/preschool year in which the formula is applied.

22.6 Employees who commence employment after the commencement of the school or preschool year

An employee who commences employment after the usual date of commencement at a school or preschool in any school/preschool year, will be paid from the date the employee commences provided that at the end of the last school/preschool term or final semester in that year, the employee must be paid an amount calculated pursuant to clause 22.5 and will receive no salary or other payment other than payment under clause 22.7 until:

(a) the school or preschool service date or the resumption of Term 1; or

(b) first semester in the following school/preschool year.

22.7 Employees who take approved leave without pay

Where an employee takes leave without pay with the approval of the employer for a period which (in total) exceeds more than 2 term weeks in any year, the employee will be paid a salary calculated in accordance with clause 22.8 as follows:

(a) if the leave without pay commences and concludes in the same school/preschool year, the payment will be calculated and made at the conclusion of the last school/preschool term or final semester in that year;

(b) if the leave without pay is to conclude in a school/preschool year following the school/preschool year in which the leave commenced:

(i) at the commencement of the leave, a payment will be calculated and made in respect of the school/preschool year in which the leave commences; and

(ii) at the end of the last school/preschool term or final semester in that year in which the leave concludes, a payment will be calculated and made in respect of that school/preschool year.

(c) If the employee returns early from leave any payment under clause 22.8(b)(i) will be taken into account in calculating the amount owed to the employee at the end of the last school/preschool term or final semester in that year.

History of Clause 35

22. The provisions of clause 35 of the Enterprise Agreement are not new and appeared in the Berkeley Vale Pre School Kindergarten Employee Agreement 2011 (Attachment A) and the Berkeley Vale Pre School Kindergarten Employee Collective Agreement 2014 (Attachment B) covering the Respondent.

The Present Dispute

23. Further to the directions issued in all matters on 24 June 2021, the Union puts forward the following in response to Direction 1(a):

Articulated Question

1. “Do the additional hours worked by each of the Applicants in 2020 constitute a variation to hours worked for the purposes of clauses 32.5(d) and 35.7 of the Enterprise Agreement?”

24. The Union contends that, on the proper construction of the Enterprise Agreement, they each worked varied hours since the Pre-school Service Date in 2020, and their employment continued into the following year.

25. The approach to the interpretation of enterprise agreements was summarised by the Full Bench in Australasian Meat Industry Employees Union v Golden Cockerel Pty Ltd [2014] FWCFB 7447 at [41], and subsequently modified by the Full Bench in AMWU v Berri Pty Limited [2017] FWCFB 3005 at [114]. In short, the proper interpretation of an enterprise agreement will turn upon the language of the agreement having regard to its context and purpose.

26. In adopting the Berri principles in the decision in Independent Education Union of Australia v Trustees of the Roman Catholic Church for the Diocese of Maitland-Newcastle T/A Diocese of Maitland-Newcastle Catholic Schools Office [2019] FWC 123, Commissioner Johns at [18] outlined the approach to be taken in the following terms:

“[18] I adopt the Berri principles. Consequently, it is necessary to:

a) begin the analysis with a consideration of the ordinary meaning of the words of the relevant clauses in the Agreement;

b) determine whether the Agreement has a plain meaning;

c) review the text of the Agreement as a whole;

d) not rewrite the Agreement to achieve what might be regarded as a fair or just outcome;

e) (in determining the objective intention of the parties) do so by reference to what a reasonable person would understand by the language used in the Agreement;

f) not adopt an overly technical approach to the interpretation of the Agreement; and

g) not contradict the plain language of the Agreement.”

27. The Union submits that varied includes changed or additional (or fewer) hours, in accordance with subclause 32.5(d). Therefore, the provisions of subclause 35.7 would apply upon a plain reading of the Enterprise Agreement.

28. In accordance with subclauses 12(c) and 20.2, no overtime is payable, nor casual rates for the additional hours the Applicants worked, so there is a question about how annual leave is to be accounted for – which is an NES requirement.

29. Clause 35 deals with adjustments to the proportion of non-term time payment that may be owing to an Employee (which is inclusive of the annual leave adjustments). There is a requirement to apply the formula where additional work is performed to ensure that obligations both in relation to payment during non-term time and annual leave entitlements are properly met.

30. Ordinarily at the end of Term 4, a Teacher is paid the weekly salary for each week of the summer vacation period. However, if there has been a variation of hours, the Centre is required to calculate the total amount that would be payable to the Teacher for that summer period and pay that amount – they don’t pay that sum in addition to weekly salary (which is made clear in 35.7). 

31. A payment calculated using the formula in clause 35.3 could be greater or lesser than the total amount that would normally have been paid where an Employee continued to receive payment throughout the summer vacation period at the rate applicable at the end of Term 4.

32. The Union submits that the Commission would find that the additional hours worked by each of the Applicants in 2020 constitute a variation to hours worked for the purposes of clauses 35.2(d) and 35.7 of the Enterprise Agreement. Such a construction is entirely consistent with the application of the Berri principles as it:

a. accords with the plain, ordinary meaning of the words having regard to the text of the Enterprise Agreement as a whole;

b. avoids rewriting the text of the agreement;

c. is unambiguous and does not require a consideration of the objective intentions of the parties;

d. does not contradict the plain language of the Enterprise Agreement; and

e. does not adopt an overly technical approach to the interpretation of the agreement.

33. In the present matters the Union submits that the additional hours they worked in 2020 qualify as varied from the hours they normally worked at the centre upon a proper construction of subclause 35.7 of the Enterprise Agreement.

Conclusion

34. For these reasons, the Union submits that the Commission should answer the questions as follows:

Articulated Question

1.    “Do the additional hours worked by each of the Applicants in 2020 constitute a variation to hours worked for the purposes of clauses 32.5(d) and 35.7 of the Enterprise Agreement?”

Yes.”

Submissions – Respondent

[29] On 30 July 2021 the Respondent submitted that:

“Background

1. The Respondent’s Administration Officer, Ms Emma Hayman, resigned effective from 14 August 2020. The Administration Officer had been responsible for calculation of Christmas pays at the end of the school year (as stated by Colleen Templeton in her statement dated 16 July 2021). Ms Hayman only provided two weeks’ notice - therefore the Respondent’s Secretary, Mrs Casey Romanos, agreed to assist with administrative duties on a volunteer basis until a new Administration Officer has been recruited.

2. Ms Hayman did a handover with Mrs Romanos on 12 August 2020. She provided Mrs Romanos with the spreadsheet she had used to calculate the Christmas pays in previous years.

3. During a committee meeting on 20 August 2020, Mrs Romanos became the Treasurer.

4. In December 2020, Mrs Romanos calculated the Christmas pays in accordance with the information provided by Ms Hayman. The initial calculations indicated that the teachers were to be paid the following lump sum payments (in addition to the salary to be paid during the Christmas leave break):

•  Colleen Templeton - $5612.60

•  Karen Grant - $2768.94

•  Sonja Denniss - $2103.16

5. It did not seem correct that working a few extra days throughout the year would entitle these teachers to lump sum payments of thousands of dollars. Mrs Romanos therefore consulted the Respondent’s Lawyer regarding the matter. After reviewing the Berkeley Vale Pre-School Kindergarten Employee Collective Agreement 2017 (hereafter referred to as “the Enterprise Agreement”) the Lawyer advised the following:

•  Clause 12(d) says an employee’s hours may be varied by mutual agreement and such agreement must be in writing.

•  Therefore the definition of varied in the EA is in relation to the ordinary hours and does not include ad hoc extra days worked.

•  Therefore on that interpretation, the CCSA has misconstrued the term ‘varied’ and the additional lump sum is not payable unless there has been a written agreement to vary the ordinary hours from those contracted for the year.

6. This information was communicated to Mrs Templeton. However, she continued to maintain that she, Mrs Grant and Mrs Denniss were entitled to the thousands of dollars as outlined above in paragraph 4.

7. On 9 March 2021, Mrs Romanos emailed Mrs Grant and Mrs Denniss regarding the matter to ensure they were receiving the correct information as prior to that all communication had gone through Mrs Templeton.

8. The Respondent’s Annual General Meeting (AGM) was held on 12 March 2021. During the AGM, Mrs Romanos was elected as the Respondent’s President. The former Secretary was elected as Vice President and four new association members joined the management committee as Treasurer and Ordinary Members (the Secretary position remained vacant at that point).

9. During the Respondent’s first committee meeting in April 2021, Mrs Romanos provided the new committee members with background information regarding the Christmas pay issue.

10. Prior to the next committee meeting in May 2021, Mrs Romanos discovered a major error in the Christmas lump sum spreadsheet. The spreadsheet included total wages under S and not just wages paid during term time. The amended calculations indicated that the teachers were paid more during the Christmas shutdown period than they would have been if paid according to clause 35.7. This information was communicated to Mrs Templeton and the management committee during the committee meeting on 20 May 2021. Mrs Templeton was provided with the updated calculations.

11. On 8 June 2021, Mrs Romanos emailed Mrs Grant and Mrs Denniss informing them of the error in the original spreadsheet and providing them with the updated spreadsheet and calculations.

12. On 11 June 2021, Mrs Templeton sent an email to the management committee (cc’d to Mrs Grant and Mrs Denniss) agreeing that the [clause 35.3] formula had been applied correctly but asserting that the process had not been completed. Mrs Templeton referred to a final step in the CCSA Christmas Pay Guide. The following day, being 12 June 2021, Mrs Romanos sent a response to Mrs Templeton (cc’d to the management committee, Mrs Grant and Mrs Denniss) stating:

The final step simply separates the total payment due (“P”) into what should be paid during the Christmas leave break (for you $9761.14) and what should be paid as a lump sum (for you $729.15). The total payment due is still $10,490.29 which is less than the actual $11,003.46 you were paid during the Christmas leave break.

13. The Applicants subsequently made their underpayment claims with the Fair Work Commission.

Negative answer to Articulated Question/s

14. The management committee has made the decision not to spend the thousands of dollars required to have our Lawyer prepare submissions for the Respondent in this matter, particularly given the fact that the definition of “varied” the Applicants are relying on does not result in an additional payment being owed to them. Mrs Romanos has prepared these submissions on behalf of the Respondent.

15. As advised above in paragraph 5, the legal advice the Respondent has received regarding the interpretation and application of clause 35.7 of the Enterprise Agreement is as follows:

•  Clause 12(d) says an employee’s hours may be varied by mutual agreement and such agreement must be in writing.

•  Therefore, the definition of varied in the EA is in relation to the ordinary hours and does not include ad hoc extra days worked.

•  Therefore on that interpretation, the CCSA has misconstrued the term ‘varied’ and the additional lump sum is not payable unless there has been a written agreement to vary the ordinary hours from those contracted for the year.

16. In paragraph 27 of his submissions dated 16 July 2021, Mr George Maniatis of the IEUA argues that the word “varied” in clause 35.7 includes changed or additional (or fewer) hours and therefore the provisions of clause 35.7 would apply upon a plain reading of the Enterprise Agreement. However, the Respondent submits that this interpretation of the word “varied” is inconsistent with other clauses within the Enterprise Agreement and makes them redundant.

17. For example, clause 35.6 states, “Where a Teacher takes leave without pay with the approval of his or her Employer for a period which (in total) exceeds 20 pupil days in any year, he or she shall be paid salary calculated in accordance with this clause…”. The Applicants’ definition and interpretation of the word varied means a teacher taking one hour of leave without pay would enlivened clause 35.3 when clause 35.6 stipulates that a teacher must take 20 pupil days i.e. 152 hours of leave without pay prior to clause 35.3 being enlivened. Clearly, on reading the provisions in the Enterprise Agreement, that is not the intention of the definition of the word varied.

18. The Respondent submits that the word “varied” in clause 35.7 only includes a variation to a teacher’s regular pattern of work, which must be in writing, as per subclauses 12(b) and 12(d) of the Enterprise Agreement.

19. Clause 35.7 states:

Where the hours which an employee normally works at the centre have varied since the Pre-school Service Date in any year, and the employee’s employment is to continue in the next year, the employee shall be paid at the conclusion of Term IV in accordance with the formula provided in clause 35.3 and shall receive no salary or other payment under this clause until the Pre-school Service Date in the following year.

20. Clause 35.3 states:

(a) Payments made pursuant to this clause shall be calculated in accordance with the following formula:

Where:

P is the payment due

S is the total salary paid in respect of term weeks, or part thereof, since the pre-school service date (or date of employment in circumstances where a teacher has been employed by the Pre-School for less than one year).

B is the number of term weeks, or part thereof, in the year,

C is the number of non-term weeks, or part thereof, in the year.

D is the salary paid in respect of non-term weeks, or part thereof, that have occurred since the anniversary of employment (or date of employment in circumstances where teacher has been employed by the pre-school for less than one year).

(b) For the purpose of this clause:

(i) “Pre-school Service Date” means the usual commencement date of employment at a Pre-school for Teachers who are to commence teaching on the first day of the first term.

(ii) “Teacher” means any teacher other than a Casual Teacher.

21. If clause 35.7 was applicable the Applicants would be entitled to total payments as follows (based on the S and D figures provided by the Applicants. The Respondent’s figures differ slightly):

Colleen Templeton

Karen Grant

Sonja Denniss

22. The formula in clause 35.3 is very clear and has been followed correctly. If clause 35.3 were to apply, at the conclusion of term 4 in 2020 the Applicants would be entitled to lump sum payments of $10,490.29, $8,350.33 and $6,419.94. However, they would receive no salary or other payment other than payment under clause 35.3 until the preschool service date in 2021. The total weekly salary the teachers actually received between the conclusion of term 4 and the preschool service date in 2021 was as follows:

•  Colleen Templeton - $11,003.46

•  Karen Grant - $9,414.18

•  Sonja Denniss - $7,281.23

These amounts are not in dispute.

23. The Applicants are claiming underpayments of $729.15 (Mrs Templeton), $68.09 (Mrs Grant) and $129.08 (Mrs Denniss), which is inaccurate. The claim is made on the basis that the formula contained within clause 35.3 is missing a step. Page 9 of the CCSA Christmas Pay Guide provided by the Applicants outlines a further step which divides "P" into two figures, one to be paid as salary during the Christmas leave break and one to be paid as a lump sum. The Applicants have added this step and are maintaining that the lump sum figure is still owing to them. They are failing to understand that the lump sum is one portion of P and that the payment they received between the conclusion of term 4 and the preschool service date in 2021 is still larger than P.

24. As submitted by Mr Maniatis in his submissions, “A payment calculated using the formula in clause 35.3 could be greater or lesser than the total amount that would normally have been paid where an Employee continued to receive payment throughout the summer vacation period at the rate applicable at the end of Term 4”.

25. In paragraph 28 of his submissions, Mr Maniatis states, “In accordance with subclauses 12(c) and 20.2, no overtime is payable, nor casual rates for the additional hours the Applicants worked, so there is a question about how annual leave is to be accounted for – which is an NES requirement”. This is echoed by the Applicants who in their statements all state, “I have been paid ordinary hours for the above days. However, have not received the annual leave owed for these additional days, which is determined by following the application and processing of the formula within our EA”.

26. The Respondent submits that employees do not receive additional annual leave for overtime hours worked in accordance with clause 20.2. Clause 22.1 of the Enterprise Agreement stipulates that all employees other than casual employees shall receive four weeks annual leave in accordance with the National Employment Standards.

27. Furthermore, the Respondent refutes Mr Maniatis’ submission (paragraph 7) that in previous years subclause 35.7 of the Enterprise Agreement has been applied where one or more of the Applicants has worked additional hours. The Respondent’s records indicate that Mrs Grant worked 8.15 additional hours in 2018 and 19.9 additional hours in 2019 yet subclause 35.7 was not applied.

Conclusion

28. For these reasons, the Respondent submits that the Commissioner should answer the questions as follows:

Articulated Question

1. Please clarify the interpretation of the wording “varied hours” and does this include additional hours worked during the year? This wording is used throughout Clause 35 for example:

35.2(d) the hours which an employee has worked at the pre-school have varied since the pre-school service date.

The word “varied” in clause 35.7 only includes a variation to a Teacher’s regular pattern of work, which must be in writing, as per subclauses 12(b) and 12(d) of the Enterprise Agreement.

2. The purpose of 35.3 “Calculation of Payments” and how this should be processed and paid accordingly?

Clause 35.3 should be calculated as per paragraph 21 above.

3. If the IEU and Community Connections Services Australia (CCSA) advocate this payment should have been made to pre-school teachers who have worked additional hours during the year can the Commission recommend subsequent payment?

When the formula in clause 35.3 is calculated correctly, subsequent payment is not owed.”

Reply submissions – Applicants

[30] In reply, on 13 August 2021, the Applicants collectively submitted that:

1. “On 8 June 2021, Mrs Romanos sent revised calculations to the Applicant, Mrs Templeton and these too were incorrect. At that time, she was not aware of this. The Applicant, Mrs Templeton would also like to highlight that the Respondent, Mrs Romanos, expressed within this email communication that “the management committee still remains that the formula is not relevant to part time teachers who work additional hours”.

2. The abovementioned calculations have since been recalculated utilising the CCSA’s guidelines in how this formula is to be applied for part time teachers who work additional hours, by the service’s new Administration Officer, Amy Leckie and Mrs Templeton. These calculations are what has been provided to Commissioner Johns on 16^th July.

3. On 11 June 2021, Mrs Templeton did in fact forward an email to the management committee (cc’d to Mrs Grant and Mrs Denniss). However, what she did state is that:

“the formula will always provide a higher amount of money owed because you have worked varied hours but have not accrued annual leave on these hours. This is the purpose of the formula”.

Mrs Templeton did in fact agree that the formula had been applied correctly, however this is only dependent upon accurate figures being used within the formula. What she did, emphasise to the Respondent, Mrs Romanos and other Committee members at this time was that the calculation process hadn’t been completed which is a crucial last step in the process.

4. The Applicants refer to Mrs Romanos’ point 12 whereby she states in a response dated 12 June 2021, that “The final step simply separates the total payment due (“P”) into what should be paid during the Christmas leave break (for you $9761.14) and what should be paid as a lump sum (for you $729.15). The total payment due is still $10,490.29 which is less than the actual $11,003.46 you were paid during the Christmas leave break.

It is exactly the highlighted calculated lump sum of $729.15 that is owed to Mrs Templeton, as the formula process helps determine what the lump sum is. Subsequently, Mrs Grant’s calculated lump sum of $68.09 is owed and Mrs Denniss’ lump sum of $129.87 is owed. All these calculations have already been provided with the Applicant’s initial submission to Commissioner Johns.

5. It would appear clear that the Respondent recognises “what should be paid as a lump sum”, the Applicants ask that these highlighted payments be made so that this matter can be finalised.

6. Agreed, the Applicants are claiming underpayments of $729.15 (Mrs Templeton), $68.09 (Mrs Grant) and $129.08 (Mrs Denniss). Page 9 of the CCSA Christmas Pay Guide provided by the Applicants outlines a further step which divides "P" into two figures, one to be paid as salary during the Christmas leave break and one to be paid as a lump sum. The Applicants have not added this final step themselves, only taken the guidance from the CCSA who have provided this guidance and information to preschool services within NSW for the past 50 years. The Applicants are simply following a process that is to be done at the end of each year when teachers have worked additional hours.

7. The Respondent’s records indicate that Mrs Grant worked 8.15 additional hours in 2018 and 19.9 additional hours in 2019 yet subclause 35.7 was not applied. The Applicant, Mrs Templeton was not aware that Mrs Grant had worked additional hours during 2018 and 2019, otherwise she would have ensured that this formula was applied, and lump sum payment made.”

Reply submissions – IEU

[31] In reply, on 13 August 2021, the IEU submitted that:

1. “The Union continues to rely on its submissions filed on 16 July 2021.

2. The Respondent’s reliance on sub-clause 35.6 supporting its view of the meaning of “varied” is misplaced (paragraph 17). Sub-clause 35.6 applies to a specific and distinct situation and is separately referred to at sub-clause 35.2 (c):

35.2 The provisions of this clause shall apply where:

(e) a Teacher’s employment ceases;

(f) A teacher commences employment after the Pre-School service date; or

(g) Where a Teacher takes approved leave without pay

(h) The hours which an employee has worked at the pre-school have varied since the pre-school service date.

3. The Respondent’s submission at paragraph 18 that “the word “varied” in clause 35.7 only includes a variation to a teacher’s regular pattern of work, which must be in writing, as per subclauses 12(b) and 12(d) of the Enterprise Agreement.” Is not supported by the text of sub-clause 35.7. There is no such limitation on the operation of the sub-clause to the circumstances attributed to it by the Respondent.”

Consideration

[32] I accept that in applying the 2017 Agreement I should not approach the task in a narrow or pedantic way.⁶⁴

Berri Principle 1 – ordinary meaning of the relevant words

[33] Because it is necessary to start with a consideration of the ordinary meaning of the relevant words it is appropriate to again set out the relevant clause.

“35. … Adjustment of Salary for Teachers … whose hours have varied

(emphasis added)

35.1. This clause applies only to teachers and incorporates the NES entitlement with respect to annual leave.

35.2. The provisions of this clause shall apply where:

(a) …

(b) …

(c) …

(d) the hours which an employee has worked at the pre-school have varied since the pre-school service date.

(emphasis added)

35.3. ….

…

35.7. Teachers Whose Hours Have Varied

Where the hours which an employee normally works at the centre have varied since the Pre-school Service Date in any year, and the employee's employment is to continue in the next year, the employee shall be paid at the conclusion of Term IV in accordance with the formula provided in clause 35.3 and shall receive no salary or other payment other than payment under this clause until the Pre-school Service Date in the following year.”

(emphasis added)

[34] What is clear from the terms of clause 35 is that the answer to the Articulated Question lies in the proper interpretation of what it means to have hours that “have varied.”

[35] The IEUA contend that the word “varied” in clause 35.7 includes changed or additional (or fewer) hours.

[36] The Respondent contents that the IEU’s interpretation of the word “varied” is inconsistent with other clauses within the Enterprise Agreement and makes them redundant.

[37] The Macquarie Dictionary defines “varied” as,

“changed or altered”. 65

[38] It has a very simple, plain language meaning.

[39] The simple meaning of the word “varied” means that the Articulated Question is answered in the affirmative if “the hours … worked at the preschool have [changed or altered]”. The evidence in this matter is that they have.

Berri Principle 2 – do not rewrite the 2017 Agreement

[40] The task I have performed does not involve a rewriting of the 2017 Agreement to achieve what might be regarded as a fair or just outcome. That is not the role of the Commission in interpreting agreements. The 2017 Agreement before me is that which was produced by the parties.

[41] I reject the Respondent’s contention that, because the variation in the hours in the present matter was not made in writing, clause 35 does not apply. Clause 35 does not say “varied in writing.” There is no warrant to include additional words into clause 35. To do so for the purpose of achieving the contention proposed by the Respondent would be inconsistent with the Berri principles.

[42] There is no inconsistency in the use of the phrases “be varied” (clause 12) and “have varied” (clause 35). They are not inconsistent. The phrases can be given their ordinary meaning and, happily, coexist in the 2017 Agreement.

[43] It matters not to the interpretation of the 2017 Agreement that the change, alternation or variation to hours worked is, 8 days (Mrs Templeton), 2 days (Mrs Denniss) or, as little as 1 day (Mrs Grant).

[44] Ad hoc changes are variations. If the parties did not want ad hoc changes to be considered variations under the 2017 Agreement they could have drafted the 2017 Agreement with that clear affect. They could have carved out ad hoc changes. They did not.

[45] An ordinary reading of the words in clause 35 does not result in the re-writing that otherwise arises out of the Respondent’s interpretation.

Berri Principle 3 – determine the common intention of the parties

[46] A variation in hours is a disutility of employment. Ordinarily, a disutility attracts a penalty payment (overtime or some other payment). In the way that clauses 12 and 20 operate “ordinary time” is paid. That makes sense, because adjustment to salary is then dealt with in clause 35. I am satisfied that this must have been the objective intention of the parties.

[47] The only common intention of the parties that can be discerned arises from the scheme of 2017 Agreement read as a whole.

[48] It cannot be that the common intention was for clause 35 to operate in the limited way as contended by the Respondent.

Berri Principle 4 – Part 2-4 of the FW Act

[49] To paraphrase the Full Bench held in Berri it may be inferred that [the 2017 Agreement] was intended to establish binding obligations. This is an important contextual consideration.

Berri Principle 5 – parties vs persons covered

[50] This principle is not relevant to the interpretation of the 2017 Agreement in the present matter.

Berri Principle 6 – modes of textual analysis

[51] In the present matter I have not applied an overly technical approach to the interpretation of the 2017 Agreement.

Berri Principle 7 – Plain meaning

[52] I have dealt with the plain meaning above.

Berri Principle 8 – surrounding circumstances

[53] Because I have not found any ambiguity or uncertainty it has not been necessary for me to have regard to surrounding circumstances.

Berri Principle 9 – Do not contradict plain language.

[54] In the present matter the interpretation I have adopted does not contradict the plain language of clause 35.7 or the 2017 Agreement as a whole.

Berri Principle 10 – consider surrounding circumstances to resolve ambiguity

[55] Because I have not found any ambiguity or uncertainty it has not been necessary for me to have regard to surrounding circumstances.

Berri Principle 11 – establish objective facts

[56] In the present matter I have not relied upon evidence that only supported the subjective facts or intention of the parties.

Berri Principle 12 – evidence of objective background

[57] In the present matter it has not been necessary to rely upon evidence of objective background.

Berri Principle 13 – cautious approach to certain evidence

[58] In the present matter it has not been necessary to rely upon evidence about the negotiations for the 2017 Agreement.

Berri Principle 14 – extrinsic material

[59] In the present matter I have not relied upon extrinsic material.

Berri Principle 15 – subsequent conduct

[60] In the present matter I have not relied upon subsequent conduct in interpreting the 2017 Agreement.

Conclusion

[61] For the reasons set out above, the Commission, as presently constituted, is satisfied that the answer to the Articulated Question

“Do the additional hours worked by each of the Applicants in 2020 constitute a variation to hours worked for the purposes of clauses 35.2(d) and 35.7 of the 2017 Agreement?”

is “Yes”.

COMMISSIONER

Final written submissions:

IEU 16 July 2021
Respondent 30 July 2021
Applicants reply 13 August 2021
IEU reply 13 August 2021

Printed by authority of the Commonwealth Government Printer

<PR734764>

1 Clause 43.2 of the Agreement.

2 Clause 43.3(f) of the Agreement.

 3   Ibid.

4 [2018] FWCA 1464.

 5   Ibid, 5.

6 Ibid.

7 Clause 3.1 of the Agreement.

8 [2018] FWCA 1464, 4.

 9   Statement of Sonja Denniss dated 16 July 2021, at Court Book p. 149.

 10   Ibid.

 11   Ibid.

 12   Ibid.

 13   Ibid.

 14   Ibid.

 15   Ibid.

 16   Statement of Colleen Templeton dated 16 July 2021, at Court Book p. 152.

 17   Ibid.

 18   Statement of Karen Grant dated 16 July 2021, at Court Book p. 146.

 19   Statement of Colleen Templeton dated 16 July 2021, at Court Book p. 152.

 20   Ibid.

 21   [2011] FWAA 7468.

 22   Statement of Karen Grant dated 16 July 2021, at Court Book p. 146, Statement of Sonja Denniss dated 16 July 2021, at Court Book p. 149 and Statement of Colleen Templeton dated 16 July 2021, at Court Book p. 152.

 23   Statement of Karen Grant dated 16 July 2021, at Court Book p. 146.

 24   Ibid.

 25   Ibid.

 26   Ibid.

27 [2018] FWCA 1464.

 28   Statement of Colleen Templeton dated 16 July 2021, at Court Book p. 153.

 29   Ibid 146-147.

 30   Statement of Sonja Denniss dated 16 July 2021, at Court Book p. 149.

 31   Statement of Karen Grant dated 16 July 2021, at Court Book p. 147, Statement of Sonja Denniss dated 16 July 2021, at Court Book p. 150 and Statement of Colleen Templeton dated 16 July 2021, at Court Book p. 153.

32 [2014] FWCFB 7447 (‘Golden Cockerel’).

33 Ibid 41.

34 [2017] FWCFB 3005 (‘Berri’).

35 (2005) 222 CLR 241.

36 Ibid 246.

37 Berri (n 23) 10, [41] quoting Amcor Limited v CFMEU (2005) CLR 241, 246 (Gleeson CJ, McHugh J); 262 (Kirby J) 262.

38 Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355,382 per (McHugh, Gummow, Kirby and Jayne JJ).

39 [2017] FWCFB 1621 at [21].

40 Kucks v CSR Limited (1996) 66 IR 182 at 184.

41 City of Wanneroo v Australian, Municipal, Administrative, Clerical and Services Union (2006) 153 IR 426 at 440; See in general Golden Cockerel at [19]–[22].

42 [2006] FCA 616.

43 Ibid at 26.

44 [2015] FCAFC 142.

45 Ibid at 108.

46 UWU v La Trobe Respondent [2015] FCAFC 142 at [109] per White J.

47 (2009) 188 IR 297 at [19]-[22].

48 (1982) 149 CLR 337.

49 Ibid at 352.

50 Ibid.

51 Ibid.

52 (1996) 66 IR 182 at 184.

53 [2017] FCA 346 at 29.

54 See Howard Smith and Co Ltd v Verawa (1907) 5 CLR 68 at 78; Farmer v Hanon (1919) 26 CLR 183 at 197 and White v Australian and New Zealand Theatres Ltd (1943) 67 CLR 266 at 275 and 281.

55 Administration of Papua New Guinea v Daera (1973) 130 CLR 353 at 446; Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337 at 348.

56 (2008) 251 ALR 322 at [35] per Gummow, Hayne and Kiefel JJ, and at [163] per Heydon J.

57 [2009] NSWCA 407 at [319] per Allsop P.

58 Metcash at [330].

59 (1994) 36 NSWLR 290 at 304.

60 Ibid at 312.

61 Ibid.

62 (1978) 95 DLR (3d) 242 at 262.

63 Berri (n 23) 22–23 [114].

64 Kucks v CSR Limited [1996] IR 166, 182.

 65   https://www.macquariedictionary.com.au/features/word/search/?search_word_type=Dictionary&word=varied