C2006/1554, Transcript of Proceedings [2006] AIRCTrans 406 (22 March 2006)

TRANSCRIPT OF PROCEEDINGS

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Workplace Relations Act 1996 14440-1

SENIOR DEPUTY PRESIDENT LACY

C2006/1554

COMPASS GROUP PTY LTD
AND
THE AUSTRALIAN WORKERS’ UNION
s.127(2) - Appln to stop or prevent industrial action
(C2006/1554)

MELBOURNE

10.03AM, TUESDAY, 07 MARCH 2006

PN1

MR G WATSON: I seek leave to appear for the Compass Group.

PN2

MS Z ANGUS: I appear on behalf of the Australian Workers Union, with me this morning, MR D HEALY and MR J CLARENCE.

PN3

THE SENIOR DEPUTY PRESIDENT: Thank you. Yes, Mr Watson?

PN4

MR WATSON: Thank you, your Honour. The parties have reached an agreement whereby two questions of law will be submitted to the Commission for determination. There is a document which reflects that agreement which we assume has been passed to your Honour?

PN5

THE SENIOR DEPUTY PRESIDENT: Yes, I have a copy of the basis of settlement claims and statements, two statements made by Commissioner Mansfield.

PN6

MR WATSON: Thank you. Your Honour, the parties have also filed outlines of submissions in the matter.

PN7

THE SENIOR DEPUTY PRESIDENT: Yes, I have those.

PN8

MR WATSON: The union has helpfully attached a history of historical documentation as well with their submissions. My learned friend indicates that she wishes to call some brief evidence on one point as well. What we submit is that the appropriate procedure would be for that evidence to be called at the outset, then the parties would make their submissions. At this stage we do not propose to call any evidence.

PN9

THE SENIOR DEPUTY PRESIDENT: Is there some dispute in issue of fact?

PN10

MR WATSON: There is an assertion made in the submissions of the AWU, I believe it's paragraphs 61 and 62, which are relevant issues, of the AWU outline. We don't take issue with what is in 61. It's a reference to the 2000 agreement. I'm not too sure, because it was not in our copy of the materials provided by the union, whether the 2000 agreement is in the Commission's folder as attachment I?

PN11

THE SENIOR DEPUTY PRESIDENT: No, it's missing, as a matter of fact.

PN12

MS ANGUS: I'm sorry, your Honour, I'm happy to forward that to you. We actually couldn't - in the end, we had problems downloading the agreement. It does exist, it is available electronically, it's a public document, and clause 15 in the 2000 agreement is identical word for word with clause 16(c)(iii) which is the clause we are having a debate about, in the 2003 agreement. We only want to draw the Commission's attention to 16(c)(iii).

PN13

THE SENIOR DEPUTY PRESIDENT: All right.

PN14

MR WATSON: Your Honour, in terms of paragraph 61, we don't take issue with. Paragraph 62 is a submission about the intent of word changes of the 2000 agreement. We certainly submit that that is irrelevant to the task before the Commission, that whole question, and we don't concede what is in that paragraph. Our primary submission is that it's irrelevant, given the appropriate task.

PN15

THE SENIOR DEPUTY PRESIDENT: Yes. Thank you, Mr Watson. Ms Angus, how will I be assisted by any evidence?

PN16

MS ANGUS: Well, your Honour, we do believe it is relevant, the parties' intentions when they were negotiating word changes in that clause. We hear Mr Watson's argument that it's not relevant. If he were prepared to concede the truth of that submission, then we wouldn’t need to bring evidence - - -

PN17

THE SENIOR DEPUTY PRESIDENT: I gather the nature of the evidence that you propose bringing is the evidence of a person who says that they were involved in the negotiations, is that right?

PN18

MS ANGUS: Correct.

PN19

THE SENIOR DEPUTY PRESIDENT: How can that assist me in ascertaining, objectively ascertaining, the mutual intentions of the parties?

PN20

MS ANGUS: Well, it's evidence that goes to the extent of and the nature of the discussions around the word changes. It will be our submission that if there had been a conscious decision to change words and change the substantive meaning of the clause, then that would be of relevance. The fact that in fact there weren't indicates to the Commission that it is the original intention of the clause, that is the - that determines the meaning. We're in your hands, your Honour. Our essential argument is that the Commission is - it's an insufficient exercise to simply read the words on their plain meaning, that an ambiguity arises in the clause. Therefore, the Commission needs to actually look at what the original intention of the clause was.

PN21

THE SENIOR DEPUTY PRESIDENT: Yes, but that's the mutually-ascertained objective intention of the parties.

PN22

MS ANGUS: Yes, that's right, your Honour.

PN23

THE SENIOR DEPUTY PRESIDENT: Or the objectively-ascertained mutual intention of the parties, I should say. Yes. I don't think I would be assisted by the evidence, if that's all it goes to.

PN24

MS ANGUS: That's all it goes to.

PN25

THE SENIOR DEPUTY PRESIDENT: Yes. Yes.

PN26

MS ANGUS: As your Honour pleases.

PN27

THE SENIOR DEPUTY PRESIDENT: Thank you, Ms Angus. Yes, Mr Watson?

PN28

MR WATSON: Your Honour, the parties have filed outlines of their submissions and we submit that that has been useful in clarifying the approaches of the parties to the interpretation of the two provisions. We do submit, however, that the submissions do disclose quite divergent approaches to the interpretation of the provisions. We submit that the company's approach is based primarily on a construction of the current terms of the clause. The union approach is more based on the history and supposed intentions behind predecessor documents. That comes out from the focus of their submissions. In our respectful submission, it is important to carefully consider the correct approach at the outset as to the task of the Commission in interpreting the meaning of the relevant clauses.

PN29

We propose to take the Commission to authorities which deal with the interpretation of agreements in particular, as to the appropriate approach to adopt. Those authorities are not referred to in our outline, but they have been provided to the union yesterday. One other point of clarification; the materials filed by the union have most of the documentation, but it appears, at least in our copy, schedule A is not included in the current enterprise agreement, which his behind tab J. Does the Commission have that document independently of the materials? It's a schedule of wage rates and allowances, your Honour.

PN30

THE SENIOR DEPUTY PRESIDENT: Yes. No, I don't believe I have it.

PN31

MR WATSON: Perhaps I can pass a copy up? We assumed that was the case. I believe it may have been asked not to be formally on the public record when the agreement was certified; hence it hasn't made the website.

PN32

THE SENIOR DEPUTY PRESIDENT: Yes, there's a reference to that in the submissions.

PN33

MR WATSON: Yes.

EXHIBIT #C1 SUBMISSIONS OF COMPASS GROUP PTY LTD
EXHIBIT #C2 COPY SCHEDULE RATES OF PAY

PN34

MR WATSON: Thank you, your Honour. The questions which arise for determination are questions as to construing the meaning of the current provisions of the agreement. While we say that certainly some - that allowance should be obviously made for the fact that this is an agreement of the parties, it is an industrial agreement. It's not legislation, it's not the constitution, it's not an award. Some of the principles, especially in terms of the internal rules of construction of a document are common between agreements of parties and other instruments, but clearly, we are talking about an agreement and the relevant principles are those relating to the interpretation of an agreement.

PN35

The useful statement of the relevant approach is contained in the decision of North J of the Federal Court in AFMEPKIU v Qantas, which I hand a copy of that decision to the Commission. This is a decision which related to the interpretation of an agreement in the Federal Court. We refer to paragraph 21 of his Honour's judgment. In that case, his Honour says at paragraph 21, page 5:

PN36

The parties agree that if the protocol was susceptible to a number of meanings, the court could have recourse to ...(reads)... in Codelfa Construction Pty Ltd v The State Rail Authorities of New South Wales as follows -

PN37

And there follows the oft-quoted passage in relation to the interpretation of agreements on a commercial context. Mason J says in that passage:

PN38

The true rule is that evidence of surrounding circumstances is admissible to assist in the interpretation of the ...(reads)... tend to give too much weight to these factors at the expense of the actual language of the written contract.

PN39

I end the quote there. In essence, your Honour, it's our submission that the task of interpretation certainly is to focus on the words of the relevant instrument and in the event of conflicting possible interpretations, and we don't submit that there is an ambiguity of such a nature, then the task of interpretation is an objective task based on the language in the contract and the relevant objective circumstances, where the task of interpretation is to determine the presumed intent, and that is something different to the actual intent of the different parties as they approached the making of the agreement.

PN40

Further, in terms of interpretation, the union relies on a number of principles relating to the interpretation of awards and legislation and sets out from a decision of Ives DP some of those principles. We believe that those principles are not an accurate statement of the appropriate principles in the circumstances of this matter, although we do accept that there is an overlap in terms of rules of construction, in terms of the interpretation of agreements compared to formal instruments. But we're not talking about an award which has been in existence for a considerable period of time and has been amended over time. We are talking about an agreement that was made in 2003. The agreement did have predecessor documents, but we are interpreting the 2003 agreement.

PN41

The next case we wish to refer to for assistance in terms of the interpretation approach is Whybrow's case, Australian Boot Trade Employees Federation v Whybrow reported at volume 11 of the CLRs at page 311. At page 341, in the judgment of Higgins J. Here we are talking about more formal instruments and obviously these sorts of provisions have to be applied with some care, but nevertheless we say there is some relevance. At point 6 on the page, there is a sentence beginning, "The grammatical construction".

PN42

THE SENIOR DEPUTY PRESIDENT: Yes.

PN43

MR WATSON: His Honour says:

PN44

The grammatical construction of the relevant section of the constitution is clear. It makes conciliation refer to both prevention and settlement and it makes arbitration refer to both prevention ...(reads)... avoid the absurdity and inconsistency but no farther.

PN45

I end the quote there. There are two aspects of that passage that are important here. One is the approach in the relevant context of reading words in a distributive sense, to be prevention and settlement by conciliation and arbitration. That has some relevance in terms of clause 16. Secondly, the need to give full effect to the ordinary and natural meaning of words that are used, where that is found, and only in the case of absurdity - a significant hurdle we submit - does one adopt an interpretation which differs to the ordinary and grammatical sense of the words that are used. There are various other rules of construction which we say are of assistance in relation to this matter.

PN46

One such rule is where mention is made of certain specific matters that is taken to exclude other matters which are not mentioned. It's often referred to by the Latin expression, expressio unius, the expressio unius principle. An example of the application of that principle in the relevant context is the Full Court of the Federal Court decision in Eastman v The Commissioner for Superannuation, reported at volume 74 ALR at 221. At page 230, in the decision of the Full Court, point 5:

PN47

In our opinion, it is proper to construe these regulations as treating allowances paid on a regular basis ...(reads)... it is implied that the remaining members of the class are excluded.

PN48

A similar principle and statement is found in various other texts on interpretation of instruments.

PN49

THE SENIOR DEPUTY PRESIDENT: Your point is that the expressio unius rule and principle applies in this case because of the express reference to those provisions in 16(e) that relate to allowances?

PN50

MR WATSON: That's correct, your Honour. It was a different provision that was being interpreted in this case, in the Eastman case, and it's not a direct comparison of the relevant phrases. However, the principle was applied in a question of determining which allowances are to be included. Here, we are talking about a question of which allowances or payments are to be included and we say that principle also provides assistance as indicated by your Honour. We'll perhaps come back to explaining precisely the effect of these principles and the various provisions in due course.

PN51

THE SENIOR DEPUTY PRESIDENT: Yes.

PN52

MR WATSON: The next principle we say is of assistance is that all words used are taken to have some effect. This principle is applied in the case of Project Blue Sky v The Australian Broadcasting Authority, a decision of the High Court reported at 153 ALR at 490. At page 510, in the joint judgment of McHugh, Gummow, Kirby and Hayne JJ is the following paragraph, paragraph 71, which states:

PN53

Furthermore, a court construing a statutory provision must strive to give meaning to every word of a provision. In Commonwealth ...(reads)... any other construction they may all be made useful and pertinent.

PN54

Again, it has relevance as I will explain later, to the expression of allowances which are to be included. Essentially, we say that if the interpretation of the union is to be adopted there would be no point and no sense in mentioning those provisions, yet they are mentioned and they must be presumed in an objective interpretation to have some meaning and effect must be given to their inclusion. A further proposition is where words may be deleted or withdrawn from a document which is varied or even replaced from a previous document. There is an inference in interpretation that deletion was intended to have an effect. An illustration of that principle is the case of the Industrial Commission of New South Wales in Bridge v Mattis.

PN55

THE SENIOR DEPUTY PRESIDENT: Sorry, what principle do you say it stands for?

PN56

MR WATSON: It stands for the principle that where there has been a variation of an instrument, the variation, addition or deletion is intended to have an effect. That case is reported in 1953 of the Industrial Reports, New South Wales, at page 49. The relevant passage from the joint judgment of Cantor, Webb and DeBaun JJ is at page 56, point 9 of the page. There is a sentence commencing:

PN57

As was stated by the Canadian Supreme Court in the case of City of Ottawa v Hunter, cited with approval on page 133 of ...(reads)... deliberately inserted to make the new Act differ from the old.

PN58

The court says:

PN59

This clear and authoritative statement, in our view, is applicable to an amendment of a statute, whether by way of addition or alteration for withdrawal of words.

PN60

Now, we rely on this proposition if it is thought that there should be some regard to the historical instruments and changes which occurred over time. It will be our submission, which I will develop later, that the history actually does not assist the union, it actually leads to inferences against the contention for which they contend. A similar principle is when an alteration is made, the alteration must be taken to have been made deliberately and the alteration indicates the purpose and meaning of the provision. An illustration of that position is the Victorian Supreme Court case of the Transport Accident Commission v Treloar (1992) 1 VR at 447. The passage we rely on is at page 462. At point 3 in the judgment of Brooking J there are words in quotes commencing, "When construing amendments", perhaps point 4:

PN61

When construing amendments to an Act of parliament, it is often of assistance to look at the unamended statutory provision, and by comparing the amended provision with the original, to discern the purpose and often the meaning of the provision as amended.

PN62

Reference to Wellbridge v Jackson:

PN63

When an amending Act alters the language of a principle statute, the alteration must be taken to have been made deliberately.

PN64

Again, we put that proposition in response to the attempt to rely on history in this matter because we submit that by application of these principles, the history does not assist the union. A further principle we say is applicable and is of assistance is that it is not legitimate in the interpretation of an instrument to fill in gaps in an agreement or other instruments. The filling in of gaps, if they are perceived to exist, is a task akin to amendment not interpretation. That principle was applied in the High Court decision of Marshall v Watson, volume 124 CLR at 640. In the judgment of Stephen J at page 649 there is a paragraph commencing:

PN65

Although the legislation here in question is by no means identical to that considered in McLaughlin v Fosbury, both these observations were caught and its conclusions appear to me ...(reads)... usurpation of a legislative function under the thin disguise of interpretation.

PN66

A further principle we say is of assistance is that a specific provision will be interpreted as having precedence over a general provision. That principle is illustrated by the decision of the Supreme Court of Victoria, White v Mason [1958] VicRp 16; (1958) VR 79 at 82. At point 7 there is a sentence beginning:

PN67

The case is very similar to those covered by the maximum generalia specialibus non derogant; that is to say, special provisions will control general provisions and special provisions will stand unaffected by subsequent legislation of a general character unless the legislation makes it abundantly clear that it intends to interfere with such special provisions.

PN68

It is merely one illustration of the principle, an oft-quoted one, and as
a - - -

PN69

THE SENIOR DEPUTY PRESIDENT: Sorry, I just don't follow where it fits in the context of the agreement that I'm dealing with.

PN70

MR WATSON: It fits in relation to the second of the two questions, your Honour.

PN71

THE SENIOR DEPUTY PRESIDENT: The casual employees?

PN72

MR WATSON: And in terms of what payment is to be made in respect of casual service for an employee who had a period of casual service followed by a period as a permanent employee.

PN73

THE SENIOR DEPUTY PRESIDENT: Yes, I follow.

PN74

MR WATSON: The union contention is that there is another provision which governs the situation and we say that clause 16(e), the specific provision, is what should be applied.

PN75

THE SENIOR DEPUTY PRESIDENT: Yes.

PN76

MR WATSON: Now, we say that those principles, in conjunction with general principles that are well-known and not in contention between the parties such as the need to read the document as a whole and the relevant High Court case, which I don't take the Commission to but is often quoted for that proposition is Metropolitan Gas v The Federated Gas Employees Industrial Union (1924) 35 CLR at 449. Obviously that principle also is relevant to the task before the Commission. But it is necessary to apply the appropriate principles to the two issues of interpretation.

PN77

If I might refer to the two questions in turn; the first question relates to an interpretation of clause 16(c)(iii) of the agreement. It is necessary to adopt an interpretation to give effect to the terms of that clause. We submit that the clause provides that the relevant payment is the salary and allowances as set out in the clause and that those salaries and allowances that are set out amount to three items. Firstly, there is schedule A, New Base Wage, and if your Honour refers to exhibit C2, which is schedule A, and there might be some difficulty reading some of this, your Honour.

PN78

THE SENIOR DEPUTY PRESIDENT: I've got my glasses on.

PN79

MR WATSON: Even with glasses, your Honour, there might be difficulty with some parts of it. Your Honour will see that the table is divided into two initially, permanent and casual, and then within the permanent and casual columns, there are three further divisions which are the three classifications involved, being chef supervisor, night cook, camp attendant, and the one with significant shading is, I think, camp attendant, the lower of the three classifications. In relation to each of those columns, permanent and casual, there are in turn three columns which correspond to different periods. They represent periods of operation of the agreement whereby there is an initial base wage, but subject to increases over the period of the agreement. So the reference to period 1, 2 and 3 in each of the columns is because of that. Then on the left-hand side - - -

PN80

THE SENIOR DEPUTY PRESIDENT: Which period are we in, by the way?

PN81

MR WATSON: We're in period 3, your Honour. The agreement has passed its nominal expiry date and it is still in operation by virtue of the provisions of the Act. So down the left-hand side are various components of the potential earnings total, halfway down the table. The first line is new base wage, that being expressed as an annual salary. There is then a daily rate which is as obvious as the name implies, and a consolidated hourly rate. So each of those components are different ways of stating the same figure by reference to different periods, as it were. Then there are five further entries, being supervisors' allowance, ERA and fire alarm allowance, nightshift allowance, public holidays in hours, living away from home allowance.

PN82

There is then a column, regulatory training hours, which is only relevant to casual employment, and for permanent employees there is a total of potential earnings. I think, for present purposes, we needn't worry ourselves with the bottom part of the schedule in terms of payroll rates which appear to relate to figures used for administrative purposes.

PN83

THE SENIOR DEPUTY PRESIDENT: Are they the components of the new basic wage in effect, are they?

PN84

MR WATSON: I believe so, your Honour. But I do stand corrected by others on those issues of precise calculations. I've not looked at it. So, your Honour, we have reference in the agreement to a schedule and the reference in clause 16(c)(iii) is the salary allowances as set out in schedule A, new base wage, and clauses 26 and 27 of this agreement. Now, we say very clearly that there are three separate references and the first one is the new base wage line of schedule A. The second one is clause 26 and the third one is clause 27, 26 being the supervisors' allowance, clause 27 being ERA and fire alarm allowances.

PN85

THE SENIOR DEPUTY PRESIDENT: I'll just go to them.

PN86

MR WATSON: There is no mention of the other allowances or payments that are included in schedule A. There's no reference to nightshift allowance, public holidays in hours, or living away from home allowance. Living away from home allowance in the agreement is the following clause, clause 28, where that is mentioned. We say that clause 16(c)(iii) does not use the word "all", preceding "salary and allowances". It doesn't say "all the salary and allowances as set out in schedule A." However, the - - -

PN87

THE SENIOR DEPUTY PRESIDENT: Just before you go on, sorry, Mr Watson, whereabouts in the agreement is provision made for a nightshift allowance?

PN88

MR WATSON: Your Honour, the shift allowances are contained in clause 31 of the underpinning section, 170MX award. The public holiday rates is set out in clause 49 of the agreement. Superannuation payments are dealt with in clause 50 of the agreement and there is also an award relating to superannuation which applies in conjunction with the agreement and is attached to the agreement that deals with superannuation as well. So the contested issues include some that are mentioned specifically in the agreement, some that are mentioned or dealt with in the underpinning award which applies in conjunction, or a separate award in the case of superannuation.

PN89

THE SENIOR DEPUTY PRESIDENT: Yes.

PN90

MR WATSON: We say that the union is effectively reading this clause as if the word "all" is read into the clause and we say that to do so is an approach of amendment not interpretation. It's not possible to read words of that nature into an agreement like this, and the approach should be rejected. We also say, as we've mentioned earlier, that the expressio unius rule is applicable; where specific matters are mentioned, other matters are intended not to be covered, and we've referred to the Eastern case of a relevant application of that principle. We also say that there would be no purpose in mentioning the three items if the union's interpretation that all items in schedule A are to be included was the correct one. The words are there, a task of interpretation is to strive to give the words effect, and I've mentioned the Project Blue Sky case as authority for that proposition.

PN91

We say that that supports the notion that the words are intended to have effect, they clearly demonstrate that those three items must be included, but no others.

PN92

THE SENIOR DEPUTY PRESIDENT: So you say in this case, then, the words, summary and allowances, are read distributively so that salary relates to new basic wage and allowances relates to clauses 26 and 27?

PN93

MR WATSON: That's correct, your Honour. It could have been drafted differently, it could have been drafted any number of different ways, but the reference to a catch-all salary and allowances, there followed by "as set out" and then a reference to one salary and two allowances, is a clear ordinary meaning of the words that have been used. We say that that is a legitimate drafting technique and not because we say the history of predecessor documents should guide this matter, but to illustrate the point that that is a legitimate drafting technique. I refer to tab C of the union's submissions.

PN94

THE SENIOR DEPUTY PRESIDENT: Excuse me. Sorry, tab C, was it?

PN95

MR WATSON: Yes, your Honour. There are other tabs where a similar wording has been used in the past in predecessor documents. Tab C will be explained by the union as important for their case, that they say determines the matter, because this was a decision in a private arbitration before Polites SDP. The history is that the parties were in disagreement over this issue in their enterprise bargaining negotiations. They submitted the matter to arbitration. There are different versions of precisely the circumstances and the relevant employer at the time, which was not my client, says that final adoption of the outcome was dependent on the subsequent decision. His Honour did determine the matter and the employer at the time did not accept the outcome, but the identical outcome was applied in a subsequent section, 170MX decision, as is revealed in the history.

PN96

But the relevance of the point that we wish to make, attachment A to his Honour's decision, page 10, sets out the draft clause that his Honour determined. His Honour, at paragraph (c)(iii) said:

PN97

For purposes of this clause, payment will be based on salary and allowances set out in -

PN98

and then there's reference to various clauses, more numbers than are currently in the clause, but those matters include wage rates, salaries, which is clause 34A of the agreement at the time, and then various allowances which are expressed either elsewhere in the agreement or the underpinning award at the time. So, in terms of a style of expression and reading distributively the words, salary and allowances, it's the same drafting technique, and we submit that the drafting technique in the current agreement is a legitimate one and supports the notion that to refer broadly to salary and allowances, and then set out things which are either salary and allowances is a legitimate drafting technique. Certainly, there can be no significance from such an approach that leads to reading words into the agreement that are not there.

PN99

But we are construing the current agreement. We know in terms of context that the parties came together to negotiate the 2003 agreement. The 2003 agreement is the first agreement made by a company, The Compass Group. Previously the 2000 agreement was made with a separate company, a related company, named Urest, U-r-e-s-t. The 1999 agreement was made with P&O Catering, a separate company, but the 2003 agreement was made with Compass. The parties came together and obviously there was a process of renegotiating an agreement which then applied, which was the 2000 agreement.

PN100

THE SENIOR DEPUTY PRESIDENT: None of those other agreements - sorry, let me go back a step. The Urest company wasn't a successor to P&O, to the 1999 agreement?

PN101

MR WATSON: The Urest company operated the contract in Bass Strait that previously P&O did. As to the legal significance and the binding of instruments, that's - - -

PN102

THE SENIOR DEPUTY PRESIDENT: That's of no consequence here anyway.

PN103

MR WATSON: It's a different question and not a simple answer in this situation. It might depend on which period you are talking about, prevailing authorities on the meaning of transmissions and the like. But it's of no consequence, we submit. There is one - there has always been one company operating the catering and cleaning contract for Esso on its Bass Strait platforms, and there were previous companies before P&O Catering. Urest assumed the contract in 2000. It's a related company to Compass, but the formal employer has been Compass under the 2003 agreement. The context of this matter is that Compass has lost the contract and Sedexo, a competitor, will operate the contract from next week. From the end of this week.

PN104

THE SENIOR DEPUTY PRESIDENT: Sorry, when? The end of this week?

PN105

MR WATSON: Yes, your Honour, 10 March is the end date of this contract.

PN106

THE SENIOR DEPUTY PRESIDENT: Is it expected that this decision will be given before then?

PN107

MR WATSON: The company accepts, although not a position that it necessarily accepts with abundant joy, that under the terms of the agreement, it is required to pay redundancy pay to all employees, whether they are employed by Sedexo in the future or not, given the wording of the agreement and the terms of employment offered by Sedexo. So the context of this interpretation is that the parties have agreed to accept a decision of the Commission in relation to the outstanding issues of interpretation. If it is possible to get a decision and apply it in the payments that will be made at the end of this week, that will be done. If not, there will be an adjustment made in due course and the parties accept that there may be a need to give due deliberation to the issues that are involved here.

PN108

THE SENIOR DEPUTY PRESIDENT: I'll do the best I can in any event.

PN109

MR WATSON: Yes, we appreciate that, your Honour. So the parties came together in 2003. Compass, for the first time, was being a party to the agreement. There was effectively a renegotiation of the 2003 agreement and in terms of clause 16(c)(iii) the terms of the agreement were identical. It mentioned the schedule, it mentioned three items; new base wage, chef supervisor's allowance and the emergency response allowance. I think that is with the missing tab I of the union's submissions, that agreement. We do have a copy of that agreement, but I think for relevant purposes, as I conceded at the outset, there was a clause 15(c)(iii) which was in identical terms as - - -

PN110

THE SENIOR DEPUTY PRESIDENT: Which agreement is that one? Which year?

PN111

MR WATSON: It's the 2000 agreement, your Honour.

PN112

THE SENIOR DEPUTY PRESIDENT: The 2000 agreement?

PN113

MR WATSON: Yes. It's the Urest agreement. Sorry, I only have one copy of that.

PN114

THE SENIOR DEPUTY PRESIDENT: That's all right. So clause 15 - what was it?

PN115

MR WATSON: Clause 15(c)(iii) and it is - - -

PN116

THE SENIOR DEPUTY PRESIDENT: Is in identical terms to the 2003 agreement?

PN117

MR WATSON: Identical terms to the 2003 agreement, clause 16(c)(iii).

PN118

THE SENIOR DEPUTY PRESIDENT: Yes.

PN119

MR WATSON: So the context was that the parties sat down and renegotiated the agreement in 2003 and in this respect there was a clause which referred to three items and there was no change. There was no change to that provision. Now, we say that looking at the context - - -

PN120

THE SENIOR DEPUTY PRESIDENT: Can I just clarify something with you? Did the 2000 agreement introduce the concept of new base wage, did it?

PN121

MR WATSON: No, your Honour, that was - well, that might be correct, your Honour. I'd need to check the 1999 agreement in that respect. Yes. Your Honour, the 1999 agreement referred to, in terms of wages, a clause number of the agreement, similar to the example I gave with the decision of Polites SDP.

PN122

THE SENIOR DEPUTY PRESIDENT: Where do I find that?

PN123

MR WATSON: It's in tab H.

PN124

THE SENIOR DEPUTY PRESIDENT: Yes, which clause?

PN125

MR WATSON: It's clause 16. So there is a reference to clause 34A, if your Honour can refer to that clause? It's a little bit difficult given the pages aren't numbered. Further, a little bit difficult in that clause 34, it refers to the provision of tools. But there is an attachment headed Remuneration Package, which is not attached to this version. The notion of an attachment and a schedule is one that has been of longstanding and I take you, for example, to tab F, which is the 1984 award. The last page of that document is a remuneration schedule. It is set out differently, the classifications are down the left-hand side and there's a reference to an annual salary is the term used, and various allowances along the right-hand side, ending with a total of potential annual total.

PN126

THE SENIOR DEPUTY PRESIDENT: Yes.

PN127

MR WATSON: The same approach was used in the 1998 award and the same approach was used in the section 170MX award, of having a schedule of that nature. The 1999 agreement has an attachment, the 2000 agreement has an attachment, the 2003 agreement has an attachment. At some point along the way, it's a little bit difficult because we don't have each of the attachments, it looks like there's some change in the expression from annual salary, to new base wage. New base wage, obviously, is a salary. Now, we say that the union's case, as I mentioned earlier, seeks to rely on history and they go back to the period between 1999 and 2000 where initially a section 170MX award applied, and then the 1999 agreement applied, prior to the making of the 2000 agreement.

PN128

They go back to that wording and they say there were five matters mentioned, and even though there were now three matters mentioned, we should interpret the current agreement as if the five matters were mentioned. We say that is an impermissible approach. It involves a process of amendment not interpretation. It involves reading things into the agreement that are not there, and recourse back to what might have been intentions in relation to previous instruments is not a fruitful task. It's a bit like saying that in 1999 in terms of annual leave there was a clause that said there will be four weeks' leave and five weeks for seven-day shift workers, and that reference to seven-day shift workers was left out in 2000 and left out in 2003, saying, well we need to interpret it consistent with the 1999 instrument and even though it's been left out, it's the same argument, we submit, the union is relying on.

PN129

We say you can't go back and rely on intentions in relation to different negotiations, different parties, different instruments. Indeed, and it's not a major part of our case because we say it must relate to an interpretation of a current instrument, but if one does go back to history, there is an inference that is contrary to the union position because there were five matters mentioned. They're not mentioned now and a proper approach to interpretation, one would adopt the view that objectively the parties have agreed that a calculation does involve only the three matters that are mentioned. We do also, for completeness, take issue with assertions in the union's submissions about the history of negotiations. We do not concede the accuracy of those assertions.

PN130

At paragraph 11 of the union's submissions, there is an assertion that during the 1980s, the Oil-Drilling Rig Workers Offshore Redundancy Agreement governed the redundancy provisions for off shore camp staff. Now, we say on its terms, and it is attachment A to the union's submissions, that is not the case. They're a different group of employees, the oil-drilling rig workers. On its terms there's no reference to covering camp staff on platforms, and whatever might have been practices in terms of implementing any redundancies and what might have been applied is a different thing within terms of legal application, so there's no basis to say that that agreement governed the situation. That issue is therefore irrelevant.

PN131

The union, in their submissions, go on to talk about issues in the 1980s and the liability of contractors and the like. We say that is irrelevant to the task before the Commission. We're dealing with the current agreement. Compass has an obligation to its employees in accordance with the terms of the current agreement. That's what we're interpreting and these historical matters are really irrelevant. Paragraphs 18 and 19, there's reference to a 1991 agreement and that's attached. That may well have applied, legally, and it might have actually been implemented on its terms, but the quantum and the language is quite different to the current instrument. We say it's not appropriate to have any regard to it and it's irrelevant to the task before the Commission in this matter. Paragraph 20, the union says that really - really says that this is the genesis of the language in the current clause, being the decision of Polites SDP. But we have said what we submit about that. It's irrelevant to the current task.

PN132

If any regard is had at all, the fact that it's expressed differently by including other matters which are now no longer in the clause and haven't been in the clause since 2000 really infers that the union submission is incorrect. There's an assertion also, which I can't find immediately, but it's in this part, that prior to that point, the parties were not on annualised salaries. I've taken you to the 1984 award which expressed annualised salaries. There's annualised salaries throughout the structure of the schedule of the 1984 award, and one can trace similar documents in the other documents, has a common theme being an annual salary expressed as well as other payments, which are either applicable or not, but produce a figure of potential annual earnings, depending on what is worked and the classifications of employees and the like.

PN133

Including reference as similar to the current attachment A, reference to public holidays in hours. There's a column there in the current exhibit C2 immediately after the reference to public holidays in hours, of 172. Now that is the number of hours of payment that is made actually to employees in their payment, on the assumption that there is a notional basis that employees working an even time roster work half of the public holidays and not the other half. So there is, based on the length of the shifts and those numbers of public holidays notionally worked, the figure of 172 hours which is the genesis of that figure. That figure, of a similar calculation is in the 1984 award and it goes back before then, there's a long history for it, and it's incorrect to say that there's been some movement to annual salary at some stage.

PN134

That has been a constant. The only change being apparently the change in term, to the new base wage, but in substance, we say it's the same thing. So the 1998 award refers to salaries, clause 34; the 1984 award refers to salaries, clause 6. They're both in a remuneration and a schedule in the back. The schedule is not new and annualised salaries are not new. Now, we did have some difficulty in the paragraphs 25 to 42 of the union submission. I think that's just a numbering issue. We submit, as I have already, that the positions and the outcomes became irrelevant once they were replaced by other instruments. It's not as if there was one document which has been amended over time. It's a series of separate instruments and we are interpreting the current certified agreement made with Compass in 2003.

PN135

Now, at paragraph 51 of the union's submissions, there is reference to the 1999 agreement. In 1999, there were some changes to the redundancy provision compared to the previous document. Previously, for casual - the changes for relevant purposes related to the casual issue rather than the inclusion of allowances in the redundancy pay issue. Previously, there was payment for casuals of 12 weeks, for employees of more than five years' service.

PN136

THE SENIOR DEPUTY PRESIDENT: Prior to 1999?

PN137

MR WATSON: Prior to the 1999 agreement, and the 1999 agreement - - -

PN138

THE SENIOR DEPUTY PRESIDENT: I'm sorry, was that as a practice or was that some award?

PN139

MR WATSON: No, in terms of the - prior to that, the MX award applied. That came in in 1999. Perhaps a little bit academic, because it assumes there were redundancies in that period and I'm instructed that really since then there haven't been redundancies, until now. But in terms of the 1999 award, it only provided for casuals for a 12-week payment for casual employees who had at least five years' regular service.

PN140

THE SENIOR DEPUTY PRESIDENT: Yes, but was there any specific provision made for casuals prior to the 1999 award coming into effect?

PN141

MR WATSON: Your Honour, I believe the answer is no, and I'd need to check again the 1998 award.

PN142

THE SENIOR DEPUTY PRESIDENT: Is that material before me, the 1998 award?

PN143

MR WATSON: Yes, it is. It's tab E. I believe there's no - yes, there's a redundancy clause which is clause 11, I believe. No, it's not. It must be 39. Yes, clause 39. I'm cross-eyed even with my glasses, your Honour. There is a redundancy provision which had a different scale of payments than the current provision, but no separate provision for casuals. It's pages 39 and 40.

PN144

THE SENIOR DEPUTY PRESIDENT: Yes. I take it, I'm sorry, casual employment was the minimum of that period, was it?

PN145

MR WATSON: Sorry, your Honour?

PN146

THE SENIOR DEPUTY PRESIDENT: I take it that casual employment - - -

PN147

MR WATSON: The casual employment was used at the time.

PN148

THE SENIOR DEPUTY PRESIDENT: Yes.

PN149

MR WATSON: Definitely, and it has been used throughout the relevant period. There are some employees with up to 20 years' service as a permanent who, prior to that, were employed as a casual. Casual employment has been a feature. Probably the case it has been an increasing incidence of casual employees over the years.

PN150

THE SENIOR DEPUTY PRESIDENT: Yes. If you look at the definition of Employee in the 1998 award, it's on page 3:

PN151

Employee means any person employed by P&O Catering Services Pty Ltd under this award.

PN152

MR WATSON: Yes.

PN153

THE SENIOR DEPUTY PRESIDENT: Well, would that include casuals?

PN154

MR WATSON: That would include casuals. There's reference, however, in the Entitlement clause of the redundancy provision to a weekly employee, which we say excludes casuals.

PN155

THE SENIOR DEPUTY PRESIDENT: Whereabouts is that, sorry?

PN156

MR WATSON: Clause 39G. So that it goes appear to us, whatever significance, there was not an entitlement to redundancy pay for casual employees.

PN157

THE SENIOR DEPUTY PRESIDENT: At all?

PN158

MR WATSON: At all under that clause because the entitlement is confined to weekly employees and it was only with the MX award was there an entitlement created for casual employees, payment of redundancy. It was in terms of a flat 12 weeks for employees, casual employees, of five years' service or more.

PN159

THE SENIOR DEPUTY PRESIDENT: But that was after 1999?

PN160

MR WATSON: Correct, your Honour. Now, the 1998 award, seeing we're still on it, had a clause 8A which perhaps a bit more than a preference provision, but perhaps an obligation of employing longer serving casuals as permanent people when those positions are filled. That is, there's a history of that provision and if I can mention the history in relation to the relevant provision, that provision had a history in the 1998 award, clause 8A. It's a similar effect, clause 13 of the MX award in 1999. It's clause 9 of the 1999 award. It's clause 9A of the 2000 agreement. Sorry, the 1999 agreement it was clause 9. The 2000 agreement, it was clause 9A and in the 2003 agreement it was clause 9.

PN161

The entitlement of it, casual employees to redundancy provisions, did not exist in the 1998 award for the reasons I've mentioned. It came in in the MX award of 1999, where there was a flat payment of 12 weeks. It was clause 18. The 1999 agreement continued that provision, the 12-week payment, clause 16. The 2000 agreement, clause 15, continued that position with the 12-week flat payment. The 2000 agreement brought about a change to the provision with a sliding scale of between 12 and 20 weeks' pay, and that's the current clause 12 of the agreement. So in terms of the quantum, the relevant changes historically for casuals to redundancy pay, were the introduction of the 12 weeks in the MX award in 1999 and the extension or the adoption of a sliding scale, an increase to 20 weeks in 2003.

PN162

The third part of the equation is a clause which deals with the treatment of casual service in terms of the current clause 16, 16(e)(ii). That's a clause in the current agreement which says:

PN163

Casual employees made up to a permanent position pursuant of clause 9A of this agreement shall carry over accrued casual redundancy entitlements.

PN164

Now, that provision was not part of the 1998 award. There was no casual redundancy entitlement. It was not part of the MX award in 1999, but it was part of the 1999 agreement made with P&O Catering. It's been a provision which has applied in the meantime with the - - -

PN165

THE SENIOR DEPUTY PRESIDENT: So is it your position, then, that casual employees accrued no redundancy benefit prior to 1999?

PN166

MR WATSON: If there were redundancies that occurred prior to 1999, casual employees would not have had an entitlement under the relevant instrument and I believe I'm right in saying that the entitlement for casuals was one of the arbitrated matters in the MX arbitration.

PN167

THE SENIOR DEPUTY PRESIDENT: Yes. Yes, it was. But what is your client's position now? Is it that casual employees or any period of casual employment prior to 1999 has no effect in relation to redundancy?

PN168

MR WATSON: No, your Honour. Our position is that to give appropriate effect to the current provision of the agreement, any employee who is now a permanent employee, but who has previously been a casual employee at any point in the past has their entitlement to redundancy pay calculated by applying the scale in the agreement for casual employees for their period of casual employment, and adding that to the application of the scale for permanent employment in respect of their permanent employment. So, someone who has had 10 years' employment as a casual, followed by 10 years' employment as a permanent, the relevant calculation is pursuant to the current provision, the sliding scale for casual employment, of 10 years' service, the maximum rate of 20 weeks' pay followed by 10 years of permanent rate of three weeks per year of service.

PN169

THE SENIOR DEPUTY PRESIDENT: Yes.

PN170

MR WATSON: You add those two together. We say that the clause operates on the basis of a trigger being the redundancy of an employee. Once that trigger occurs, one then applies the terms of the agreement, on its terms, by having regard to the periods of service and nature of the service to determine the sum of the amounts. The union contention is that for employees prior - this is where there's perhaps a little bit of ambiguity in their position which they may clarify, the terms of the question that was posed and developed indicates for a current permanent employee who has been converted from a casual employee prior to 1997 is the redundancy pay for the period of regular service as a casual, calculated by reference to the accrued redundancy entitlement as a casual calculated under 16(e). That's the company's position.

PN171

Or in a same way as years of service as a permanent employee, ie. three weeks per year of service, that's the union's position. They say that there is a difference between the casual employees depending on when they transferred from casual to permanent employment and we thought it the difference was 1997. It appears from the submissions that it might be 1999 because the union says explicitly that they accept, for someone who transferred after 1999, that they only take their casual component with them. But if they transferred before that time, they operate as a permanent employee for the entire period of their service for this redundancy calculation.

PN172

THE SENIOR DEPUTY PRESIDENT: Yes.

PN173

MR WATSON: That, indeed, is one of the issues that we say indicates flaws in their argument. What is so special about 1999 or 1997? In 1999, by virtue of the MX award, there was a casual redundancy entitlement created and the 1999 agreement also introduced the current clause which indicates the treatment of employees who transfer from casual to permanent employee. They carry over their accrued casual redundancy entitlements, that clause which is currently 16(e)(ii). That came in by virtue of the 1999 agreement with P&O Catering. But we say, to look historically and draw divisions between different groups of casuals depending on - they're permanent people but they have had periods of casual employment at different periods of history.

PN174

We say that's not an appropriate application or interpretation of the agreement. The agreement operates on its terms, it has a trigger, which is redundancy, it then requires the parties to apply the terms in relation to periods of previous employment without any distinction to periods of time. We say that the union interpretation which seeks to construct these differences based on the time of transfer is not a proper interpretation of the agreement. Paragraph 59 of the union's submissions correctly states that an entirely different management team was involved after 1999. Indeed, as I've indicated, there were different companies involved between the 1999 and 2000 agreements. We take issue and we say it's inadmissible, the assertions in paragraph 62.

PN175

It's not appropriate to go behind the words of the current agreement, and even behind the identical words of the previous agreement back to prior instruments and try to assert the intention inconsistent with the wording. At paragraph 63 there's reliance on - an assertion of the intention as the same as the clause drafted by Polites SDP as endorsed by the Full Bench. They say that that payment was made on seven items. So this is a further curious aspect of the union's submissions. We submit the MX award did mention five items, but the assertion is that it covers seven items, public holidays and superannuation being included. As to how that can be gleaned from that early history if a redundancy had occurred while that instrument was in place, clearly there would not be payment, but then there's no basis for adding those things.

PN176

Indeed, the mention of public holidays - and the argument of the union seems to be a combination of things, the history, but they also say that there's an ambiguity in the current provision because it refers to schedule A, and schedule A refers to more things than the new base wage. But it refers to public holidays, and how one can say that on a view of the history and intention, public holidays are to be included is really without foundation and discloses, in fact, the flaw in the suggestion that the clause means that the allowances mentioned in schedule A were intended to be included.

PN177

Superannuation to the same effect; there is a superannuation award - and a clause in the current agreement that refers to it, but at the back of the current agreement which is attachment J, the superannuation award, it provides for contributions to be made at a certain level for weeks of service, each completed week of service. We know what a week of service is, that has a clear meaning. It says:

PN178

The obligation of the employer to contribute to the fund in respect of an employee shall cease on the last day of such employee's employment with the employer.

PN179

There's no words of extension that extend it to other circumstances. We can look at, in the current agreement, the long service leave clause and the living away from home allowance clause. The living away from home allowance clause is clause 29.3. So there's reference in clause 16 to clause 29.1, chef supervisor allowance; 29.2, emergency response; 29.3, a separate subsection of the same clause, deals with living away from home allowance. I'm sorry, I've got into the MX award by mistake. I apologise for that. It's clause 26 is the chef supervisor allowance, 27 emergency response allowance, 28 is living away from home allowance. Clause 28, if one looks at its terms, it talks about:

PN180

An allowance for each day or part thereof spent offshore shall be paid to each employee as compensation for having to live away from his or her normal place of residence. This allowance shall be paid on a daily basis, including all periods of what should be paid leave.

PN181

But I think in terms of scanning of the document, it ended up as "pad nada", but we can read that as "paid leave". Certainly other instruments indicate that's what the parties have.

PN182

THE SENIOR DEPUTY PRESIDENT: It might have been Norwegian.

PN183

MR WATSON: Yes. I don't think going to Fiji is going to resolve the conflict, your Honour. What the clause does do is state when the allowance is payable, in addition to periods of service. It says it's in relation to paid leave. It doesn't go on to say for periods for redundancy purposes, as it could have. So you've got the relevant clause dealing with redundancy payments doesn't make any reference to it. The living away from home allowance clause does not make any reference to it. I guess, for completeness, I should also refer to the long service leave clause of the agreement. I think I do need to refer to the - - -

PN184

THE SENIOR DEPUTY PRESIDENT: Clause 45, isn't it?

PN185

MR WATSON: Yes, thank you, your Honour. Clause (b)(i) for long service leave says:

PN186

For full entitlement or for redundancy with more than five years' service, include the allowances set out in this agreement, ie. chef supervisor's allowance, ERA allowance and nightshift allowance.

PN187

There's no reference to living away from home allowance, but there is the reference to paid leave in the living away from home allowance clause which appears to be applicable. So, when one looks throughout the agreement and other clauses and the way things have been referred to, there's a pattern of referring to the clauses, referring to the allowances that are payable for different purposes and obviously creates obligation to make payment in those circumstances. Now, we say that construing the document as a whole, there is no ambiguity in the relevant provisions. The clause 16(c)(ii) refers to which payments are included and which part of schedule A, being new base wage, and which allowances, the three matters.

PN188

You can't say, well, others aren't referred to, therefore it's ambiguous and we can go back in history and put these provisions in. That's not an appropriate approach to interpretation. The interpretation must be based on the language used in the clause. You can't say, well, we used to refer to the others so just because they're not there doesn't mean that that's not how it should be now interpreted. It's not a case concerning an application for an amendment to the agreement where different principles may or may not apply - - -

PN189

THE SENIOR DEPUTY PRESIDENT: Or rectification.

PN190

MR WATSON: Or rectification. It's not that sort of case. The Tenex authority referred to in the union outline is an amending case which involves different considerations. Now, so the focus is on what the parties did, Compass and the AWU when Compass made the agreement in 2003 and there were some changes to clause 16 compared to the previous document. There were three categories of changes. Firstly, there is a change in the name of the company commencing at clause 16(a), but really throughout the clause, there's various references to Compass Group Australia Pty Ltd. Throughout, there would be five to 10 separate references to Compass throughout the clause.

PN191

A second chance compared to the previous agreement was the increase in the casual redundancy entitlement, previously a flat rate of 12 weeks. It was increased to the sliding scale, to 20 weeks for 10 years' service. Thirdly, there was a new clause (f) added which related to redundancy selection, but there are no other wording changes. There was obviously a revision of the salaries, et cetera, in schedule A, but no other changes made to the agreement. One can assume, when the parties negotiated that agreement and made those sorts of changes, that they reviewed the clause and made the changes they believed were appropriate, for one reason or another.

PN192

So we say that in relation to question 1, clearly there is an obligation to include the new base wage - it's obvious, because it's referred to - the chef supervisor's allowance for the same reason, the emergency response allowance, but no others are referred to and therefore we say there's no basis to say that other allowances should be required to be included in the calculation. There is only mentioned three matters in the previous agreement. There was obviously no amendment made to clarify this situation. If the union has thought seriously that the clause is deficient and needed to refer to the other matters, one would have thought they would have sought a variation at that time, but no such variation is made.

PN193

We have seen how the rest of the agreement refers to when allowances are included for various purposes. We say that a review of these circumstances, which are the relevant ones, can't give rise to interpretation that you read the clause as it used to be expressed in 1999 in a different instrument with different parties. In terms of the second question, for casual employment, as I've said, there are no limitations relating to time of transfer from casual employment to permanent employment. The clause operates on the basis of a trigger, being the redundancy, operates on its terms and regardless of when the casual employment occurred, the calculation of redundancy pay is based on the casual scale now in the agreement.

PN194

If there was some notion of looking at periods of service and accruing a particular entitlement for periods of service and having that added to over time and with various accrual rates as per long service leave, and as per the long service leave provisions in these relevant instruments, that could have been done, but it wasn't. We can't rely on the notion that this clause wasn't there when people transferred over, and nor can we say the union do so. They must accept that the clause applies on its terms regardless of when people transferred over. Further, the union seeks to rely on a different part of the redundancy provision. It seeks to rely on clause (c)(iv) which says:

PN195

For purposes of this clause, continuous service means continuous service of the employee on the Bass Strait platforms of Esso with catering contractors providing service to Esso similar to the services provided by Compass Group Australia Pty Ltd, where service on the platform was continuous, notwithstanding the change in contractor, and includes any period of service as a casual rostered on a regular basis.

PN196

Now, the union, for the purposes of relying on their argument, says that that provision creates an entitlement to have regard to the whole period of service for employees transferring to permanent employee prior to 1997 or 1999, whenever it is.

PN197

THE SENIOR DEPUTY PRESIDENT: Well, it actually only defines continuous service, doesn't it?

PN198

MR WATSON: Yes, your Honour. We say it's directed to a different thing than the payment. We say that that clause is dealing with continuity of service and it says what service is to be taken into account. It says that service with different employers is to be taken into account and it says that service as a casual is to be taken into account, but the separate question as to how do you take that into account and what payment is made in relation to those periods of service is dealt with specifically.

PN199

THE SENIOR DEPUTY PRESIDENT: Yes. It doesn't deal with the calculation.

PN200

MR WATSON: The calculation is in (e)(ii). The continuity issue is in paragraph (d). It is directed at a different thing. If it was the same thing, the same interpretation would be adopted because there's a specific provision that overrides the general. We have to rely on that rule, but on a proper construction, we say it's directed at a different thing. Clearly, the provisions can be reconciled by reference to their different subject matters and interpreted in that way. The union's submissions on this point again talk of the history of previous instruments; paragraph 91, there's sought to be some reliance on the reference to clause 9, but of course, that fails to have regard to previous agreements. There's a reference to different clauses, and prior to that, the clause of casuals transferring to permanent employees existed in different clauses.

PN201

It goes back at least to the 1998 award and obviously it happened as a matter of fact, irrespective of a provision which might have required it prior to that time. But we say there's no significance in that reference. So, for those reasons, we say that question two should be answered by saying the redundancy pay for the period of regular service as a casual should be calculated by reference to the accrued redundancy entitlement as a casual, calculated under clause 16(e). Your Honour, unless there's anything further, those are our submissions.

PN202

THE SENIOR DEPUTY PRESIDENT: No. Thank you, Mr Watson. Shall we take a five-minute break? Yes.

<SHORT ADJOURNMENT [11.54AM]
<RESUMED [12.00PM]

PN203

THE SENIOR DEPUTY PRESIDENT: Yes, Ms Angus.

PN204

MS ANGUS: Thank you, your Honour. Your Honour, in essence I want to make five points which I'll just outline at the outset, and then go to each of them. Our first argument is that in relation to the redundancy provisions, that's 16(c)(iii), our first argument is that the words themselves can be interpreted to mean that redundancy should be calculated on the salary and all allowances set out in schedule A, effectively. That's actually quite a simple act of interpretation by the Commission, and that that becomes clearer in the context, which is the basic principle of interpretation, that you can look to the context, that proposition that the words themselves should be interpreted plainly in that manner, can be interpreted in the context and we say that context is effectively the historical context.

PN205

The second point that we want to make is that although we're of the view, and we submit to you that the words can plainly be interpreted in that manner, we do accept that it's arguable, as Compass has put, that the clause is open to another interpretation, and that is interpretation that Mr Watson has put to you today. That, we say, gives rise to - well, that points self-evidently to an ambiguity in the clause. That is, the clause can be read in more than one way. So the third point we make is that in the context of any uncertainty, the Commission should have regard to the original genesis, to the genesis of the clause. That is the Polites' decision, and that that is the best indication of the objective intentions, the ascertainable objective intentions of the parties. That clause is unambiguous.

PN206

Then the fourth point we make is that the words have in fact changed. They change in the 2000 agreement, but not in the manner that was intended to alter the substantive meaning of that clause. We intend to summarise the steps over the agreement changes, but essentially rely on our written submissions in that regard. The fifth and final point we want to make goes to the issue of the casual provisions, and there the question really for the Commission is not one of interpretation of the casual clause, but the operation or the application of that clause. The question is not what existing casuals are entitled to, the question is, as we say, what is our argument there, that the existing clause and its precursors which commenced in 1999 operate prospectively.

PN207

That is evident from both the nature of the clauses themselves, the actual clause itself, because they contain a future obligation when read plainly, in both the 1999 and the 2000, and then the 2003 agreement, and also that's evident because the provisions of the statute itself at 170LX provide that clauses operate prospectively. So that's the outline of what - - -

PN208

THE SENIOR DEPUTY PRESIDENT: So periods of service accrued as a casual before 1999 you say accrued redundancy entitlements according to the same standard as a permanent employee, fulltime employee?

PN209

MS ANGUS: That's right. There's a pool of employees who were permanent and have been permanent for years when the 1999 operations commenced. Those 1999 provisions provide for a number of procedural and substantive steps for the conversion of existing casual, future permanent employees, but they don't apply to the bulk of the workforce who possess some element of casual service at some period in their past.

PN210

THE SENIOR DEPUTY PRESIDENT: This is a sort of battle that went on, wasn't it, when the state Commission, Industrial Relations Commission of Victoria was abolished and the awards were translated into federal awards and there was some issue then, wasn't there, about when the periods of service were calculated for the purpose of redundancy?

PN211

MS ANGUS: Well, I haven't relied on any arguments - I'm not aware of those arguments in that context.

PN212

THE SENIOR DEPUTY PRESIDENT: No, no. Why I thought of that was because your argument was actually applied, it was said that they operated prospectively, the awards, from that date and that service accrued prior to the making of the award did not count as service for redundancy.

PN213

MS ANGUS: Well, except that there is a provision that expressly deals with service in this case.

PN214

THE SENIOR DEPUTY PRESIDENT: That's right. That's right. I'm just wondering whether, if the awards of the agreements prior to 1999 are construed so as to exclude any reference to casual employees having an entitlement to redundancy, I mean, on your argument they may have no accrued entitlement for service as a casual at all.

PN215

MS ANGUS: Your Honour, we're not actually talking about casuals. We're talking - - -

PN216

THE SENIOR DEPUTY PRESIDENT: No, I know we're not.

PN217

MS ANGUS: - - - prior to 1999, we're talking about permanent employees.

PN218

THE SENIOR DEPUTY PRESIDENT: Yes, who had casual service.

PN219

MS ANGUS: That's right, and there is a clause that deals with precisely that situation, of permanent employees who possess some casual service, and it incorporates them.

PN220

THE SENIOR DEPUTY PRESIDENT: Anyway, I'll hear your argument. I might be misunderstanding what you're saying about that.

PN221

MS ANGUS: So, the clause itself, the contentious clause, clause 16(c)(iii), I'll read out, your Honour:

PN222

For the purposes of this clause, payment will be based on the salary and allowances as set out in schedule A, new base wage, and clause 26 and 27 of this agreement, which the employee would have received in respect of the ordinary time he or she would have worked had the redundancy not happened.

PN223

Now, the company's argument put, perhaps crudely, is that the reference to base wage, new base wage, and clause 26 and 27 are intended as an exhaustive list of the entitlements of what severance pay will be calculated on. That is not the case, we say. That in fact the clause overall should be read in terms of its dominant provisions which are effectively the lead sentence and the conclusion of that, and that is, the lead of the clause is that payment will be based on the salary and allowances set out in schedule A, and the conclusion of that clause is that:

PN224

which an employee would have received in respect of the ordinary time he or she would have worked had the redundancy not happened -

PN225

are both crucial and that the provisions in the middle are intended to replicate, not narrow the entitlement.

PN226

THE SENIOR DEPUTY PRESIDENT: Would it make any difference to your interpretation if you removed the comma after "schedule A" and the words, "new base wage" and the comma after that, so it would then read, "Will be based on the salary and allowances as set out in schedule A and clause 26 and 27 of this agreement"?

PN227

MS ANGUS: Sorry, remove the comma after schedule A, or remove the comma after - - -

PN228

THE SENIOR DEPUTY PRESIDENT: Yes, and the words in quotes, and the quotes, and the comma after that as well. So it would simply read, "Allowances as set out in schedule A and clause 26 and 27 of this agreement."

PN229

MS ANGUS: That would seem to suggest that - I haven't put my mind to that one, your Honour, but that would seem to suggest that - that would seem to them reduce - that would perhaps arguably reduce the entitlement. In a sense, it's precisely because the comma is after the schedule A, that it serves to point out that both the salary and allowances refer to schedule A.

PN230

THE SENIOR DEPUTY PRESIDENT: So you don't say, then, that the pause or the comma after schedule A is simply to define what schedule A means, by adding "new base wage"?

PN231

MS ANGUS: It's not to then indicate that the subsequent phrases are - define schedule A.

PN232

THE SENIOR DEPUTY PRESIDENT: All right.

PN233

MS ANGUS: The historical context which we will go to, your Honour, strengthens that, we say, because this clause first appears in the 2000 agreement and it's in the 2000 agreement that two points are relevant. Firstly, that in fact real annualised salaries as we know it were introduced. That is, we see the shift. Despite the fact that the words annualised salary have occurred previously, annualised salary in its true sense of employees from 2000 onwards receive a standard amount each fortnightly pay cycle, whereas prior to that, the words "annualised salary" had in fact been used, but not in its true sense because people were receiving different amounts on each pay cycle.

PN234

THE SENIOR DEPUTY PRESIDENT: The description, new base salary - new base wage, was used prior to the 2000 agreement, wasn't it?

PN235

MS ANGUS: No. The description, new base wage, appears for the first time in the 2000 agreement.

PN236

THE SENIOR DEPUTY PRESIDENT: I thought I noticed it in the schedule to the 1998 award. Am I wrong in that?

PN237

MS ANGUS: No. Well, we can go to that. The 1998 award, attachment E. That refers to annualised salary, but it's not the annualised salary that we all understand as - - -

PN238

THE SENIOR DEPUTY PRESIDENT: No, see in the remuneration package right at the back, there's a reference to new base wage.

PN239

MS ANGUS: Well, I mean, that stands as a - indicates that the term had been around previous to that, but what happens in the year 2000 in the context of negotiating these provisions is that even time payments are introduced. The other point that we'd make, and it becomes relevant, it's referred to in the documents of the Commission, is that clauses 26 and 27, which are the chef supervisor clause and the emergency allowances clause, have historically been separated out from other clauses because of their controversial nature. There had been industrial action about both of those clauses for in fact a number of years, protracted arguments about the appropriateness of the payments and the duties attached to those allowances.

PN240

For that reason, we say that provides, if you like, some explanatory background as to why those clauses, because of their controversial nature, had been historically, had always been, referred to discretely. So in essence, our argument is it's really as simple as that. On the first point, is that the clause is capable of being interpreted without stretch in the manner that the AWU submits. That's also consistent with principles of construction that Mr Watson has taken the Commission through. In large part we agree with them, they're not all that controversial, the broad principles of construction, but we would say that in fact those principles as has been outlined by Mr Watson serve as a guide, but they can only take the Commission so far because one crucial difference in the document that the Commission is currently interpreting.

PN241

All the material, every single bit of case law that Mr Watson has handed up before your Honour deals with either constitutional interpretation or statutory interpretation. All those documents are written by - well, aside from the founding - what's the gender neutral term? Aside from the constitution, in terms of statutory documents, these are written by teams of lawyers and experts in statutory drafting and construction. It's quite a different exercise from the exercise, in our submission, that the Commission is about to engage in.

PN242

THE SENIOR DEPUTY PRESIDENT: The decision of North J is not, though, is it? In that regard? That's in relation to interpretation of a clause in the agreement, isn't it?

PN243

MS ANGUS: Yes, and you're right, your Honour, and in fact there's nothing that is particularly controversial from our perspective in terms of North J's decision. The way I intended to actually go through it, rather than looking at North J's decision, is if I could, your Honour, I just want to make some points that arise out of the Project Blue Sky principles as they have been outlined. First of all, can I say again, and it's the same point that I've just really made in another way, that Project Blue Sky is a case that is dealing with conflicting provisions in, on the one hand between a statute and an international trade agreement. So we're talking about high calibre drafted documents there. That's the context that the principles need to be understood.

PN244

Paragraph 71, and I'm running from, your Honour, the AUSLII versions, I'm referring to paragraph numbers rather than the page numbers, but paragraph 71 is the point that Mr Watson seeks to rely on pretty heavily, I would have thought, and that is:

PN245

A court, when construing statutory provision, must strive to give meaning to every word of the provision.

PN246

So he's using that as a basis for an argument that because there's a reference to new base wage and clause 26 and 27, ie. because there's a reference to some allowances, that should be read as a reference to all allowances, it is an exhaustive list. Now, that point I think needs to be read carefully against paragraph 78 of this Project Blue Sky decision. I might actually read out, if I may, the sections of this paragraph 78:

PN247

However, the duty of a court is to give the words of a statutory provision the meaning that the legislature is ...(reads)... of a legislative provision to be read in a way that does not correspond with the literal or grammatical meaning.

PN248

Now, there are two points that we say come out of that. The first one is the distinction that the High Court there makes between a grammatical and a legal meaning, and then they go on to sort of elaborate on that, and the quote from Bennion's Statutory Interpretation book, and I'll just start from halfway down that quote, is relevant here:

PN249

In some cases the grammatical meaning, when applied to the facts of the instant case, is ambiguous. Furthermore, there needs to be brought to the grammatical meaning of an enactment due consideration of the relevant matters drawn from the context, using that term in the widest sense.

PN250

The point that we want to get from that, your Honour, is that in the context of where grammatical meaning is ambiguous, and we say in this case, self-evidently, an ambiguity has arisen, in that context the Commission should give due consideration to the context, using the term in its widest sense. The context that we want to rely on is in fact the historical context. In fact, that same point is made - I don't need that I necessarily need to go to it - by North J in the Qantas decision, if one looks at the context.

PN251

THE SENIOR DEPUTY PRESIDENT: But his Honour then says some difficulty may arise in looking at the context if there is an inconsistency or - sorry, I'll just find the part that I'm trying to - - -

PN252

MS ANGUS: In paragraph 21. I mean, not to the extent of stretching the clause to a meaning, to an absurdity, is I think the point that - is that the point that you're referring to? We wouldn't wish to do that.

PN253

THE SENIOR DEPUTY PRESIDENT: Yes. You can't contradict the actual language itself.

PN254

MS ANGUS: No, that's right. That's not our argument, we wouldn't argue that that's actually occurred. But we do say that certainly in the context of an ambiguity arising, that it is appropriate to look at the context. Also, the second point that I made a moment ago that arises from the quote I have just read is that these principles of statutory interpretation arise in the context of statutory interpretation - sorry, that was poorly-phrased, but they are principles of interpretation that apply in a particular situation of well-constructed, deliberate documents.

PN255

Although Mr Watson was quick to dismiss the principles as outlined by Ives DP, he does rely on there, and we also rely on there, that broad principle that we - it is a slightly different context when we're dealing with drafters who are not legally-trained and in the context of - and I'm just quoting from the submissions of the AWU at page 7, in the context of non-lawyers drafting clauses, in the context of custom and practice in an industry, the words should not be interpreted in a strict and technical fashion.

PN256

THE SENIOR DEPUTY PRESIDENT: I think Mr Watson's point about that, though, was that agreements are distinguishable from awards of long history and much variation when you're construing the agreements as compared to awards.

PN257

MS ANGUS: Well, we'd contest that, but that's not what the principle says. The principle refers to industrial instruments.

PN258

THE SENIOR DEPUTY PRESIDENT: Yes.

PN259

MS ANGUS: And instrument instruments we know are defined to include both agreements and awards, and the principle equally applies because it is not lawyers who are drafting. In fact, if anything, they're more likely to be legal experts and industrial officers and Commission members involved in the drafting of awards than there are involved in the drafting of enterprise agreements.

PN260

THE SENIOR DEPUTY PRESIDENT: Yes.

PN261

MS ANGUS: So the second point that we make is in fact that, firstly, that the Commission should have regard anyway to the broad context, and that we say is the historical context, and that is particularly so if you are of the view, Commissioner, which we say is self-evident because of the argument between the parties now, that there is an ambiguity or an uncertainty in the way the clause should be - can be read.

PN262

THE SENIOR DEPUTY PRESIDENT: Do you say that's how I determine whether there is an ambiguity, if there's a dispute between the parties about the meaning of the words?

PN263

MS ANGUS: Well, we say that's a pretty good indication.

PN264

THE SENIOR DEPUTY PRESIDENT: I think Gray J said that on one occasion.

PN265

MS ANGUS: Well then I have good authority, your Honour. In that context, in the context of an ambiguity, it is the objective contentions - and I don't think this is in dispute - of the party which the Commission should have regard to, to determine how the clause should be read. We say the best way to determine that is to actually, from the genesis, trace the various historical development of that clause, and in doing so, consider extrinsic material which we have supplied. In fact, is it appropriate at this point to - - -

PN266

THE SENIOR DEPUTY PRESIDENT: Must be the mutual objective, though.

PN267

MS ANGUS: Yes, yes. The next point then becomes an argument about the points about the history of that clause, your Honour, and in essence, in summary, out point is that the intention is the same now as it was at its inception. That is, that severance pay be calculated on all the allowances an employee would have received had they been at work, and that that is evident in the spirit of the original words which we say are unambiguous, and it's also evident in the spirit of the current provisions. The Commission should give effect to the original intention of that clause. Your Honour, I'm not going to go into extensive detail about the history, I just want to - - -

PN268

THE SENIOR DEPUTY PRESIDENT: I have read your submission - - -

PN269

MS ANGUS: In fact, is it appropriate that I tender those now?

EXHIBIT #A1 WRITTEN SUBMISSIONS OF AWU WITH ATTACHMENTS

PN270

THE SENIOR DEPUTY PRESIDENT: I think there have already been some exhibits, haven't there, from the AWU? Yes, there have been seven exhibits. I think they were tendered before - I'm sorry, I have that wrong. They were tendered by Compass, so we'll continue with your submissions as exhibit A1.

PN271

MS ANGUS: The original clause, your Honour, is contained at page 3 of A1. I will read it out, at paragraph 24 although I think the numbering then subsequently runs out, but the meaning is still clear. That clause is as follows:

PN272

For the purposes of this clause, payment will be based on the salary and allowances set out in clauses 34A, 36A and B of this agreement, and clauses 7 and 8G, where applicable, of the Australian Workers Union Off-Shore Platform Camp Staff Consolidated Award 1984, which the employee would have received in respect of the ordinary time he or she would have worked had the redundancy not happened.

PN273

That very plainly, we say - and over the page, your Honour, you'll see we've identified what clauses 34A, 36A and B relate to, and they actually cover all of the salary and allowances that an employee would have worked. They refer to the chef supervisor allowance, emergency response, living away from home, nightshift loading, which constituted at the time all of the relevant allowances that an employee would have earned. In our submission, that is a clear and unambiguous provision that spells out that all employees in the context of redundancy are entitled to severance pay calculated on effectively all the money they would have earned while as at work.

PN274

What then happens is the next chapter, your Honour, is the 170MX award, picks up identical provisions. The 1999 agreement picks up identical provisions, and we note that in 1999 in fact all those references, the numerical references, no longer refer to accurate documents or accurate clause numbers in those documents. They become inaccurate, which in our submission actually reflects that there was, reflects a common understanding between the parties of how those redundancy provisions should operate, but no one picked them up. Also the inclusive nature of them.

PN275

That, we say, is evident at attachment G of the AWU submissions which is a Freehills document prepared for the 170MX award process. There are a number of documents, and I imagine it's actually one of the exhibits. On the second page of that document, in the second row, there's a reference to the basis of severance pay and the AWU position is that severance pay will be based on the annualised salary under the new award and the chef supervisor's allowance and emergency response allowance, and where applicable, salary and allowances as provided for by clause 7 and 8G of AWU OPCS Award 1984. That's the AWU position, which we maintain is the position today.

PN276

That's the essential position that severance pay is calculated on all the allowances an employee would be eligible for were they at work. You'll see that the company's position is, and I quote, the same as the AWU offer. In our submission, that is irrefutable evidence that at least in 1999 the company and the AWU shared the same understanding, unambiguously, about how those provisions should operate.

PN277

THE SENIOR DEPUTY PRESIDENT: In the 1999 agreement, clause 16(c)(iii), it refers to clauses 34A, 36A and B, and 7G, but when I look at 7, for example, it's date and period of operation of the agreement, and 8 is a clause referring to no extra claims.

PN278

MS ANGUS: Yes, that's because, your Honour - and that is again further evidence, we'd say, of what happens when non-lawyers draft documents. That clause is an exact replica of the Polites' decision and the 170MX award. What they've done is they've lifted up, without changing those numerical references, and dropped it in 1999 agreement because, we say, the parties shared an understanding of the intention of the clause. The references are the same references they were in the Polites and the 170MX award, and they are to what are referred to as - which ones are they? They are to the following two documents, reference is to effectively attachment E and attachment F.

PN279

In fact, perhaps the easiest way for me to address it is I've made a reference to on page 4 of the AWU submissions, clause 34A of this agreement refers to - no, hold on. Paragraph 43, your Honour, of the AWU submissions. The clause makes reference to two documents. This agreement, the parties had been negotiating a document since 1994 which would form the basis of either an agreement or an award once settled. This document was titled, P&O Catering - it's referred to as an award, it's entitled an award, but in fact it was drafted as an agreement. Again, evidence, your Honour, that it is not technical experts who are drafting these documents. Then the reference to clauses 7 and 8G in the award refer to the AWU Off-Shore Platform Camp Staff Consolidated Award.

PN280

THE SENIOR DEPUTY PRESIDENT: Yes. When we come to the 2000 agreement, the parties did pick up and tidy up clause 16(c)(iii) and put it in the terms as it exists in the current 2003 agreement, is that right?

PN281

MS ANGUS: Yes, and what they thought they were doing was precisely that; tidying it up. There is no evidence, and in our submission, the onus would be on Compass to establish that there was a deliberate intention to depart from the principles that have been established, the provisions outlined in Polites SDP's decision. What in fact happened was that the parties believed they were correcting the numerical references, that they were adopting a more inclusive approach by a reference to a schedule A. By incorporating the salary allowances in schedule A, everyone - well, certainly from the AWU perspective and we'd submit also from the other side, this was a mutual understanding - thought that the exercise was one of updating the numerical references.

PN282

THE SENIOR DEPUTY PRESIDENT: Why would you then make specific reference to the allowances, supervisor's allowance and the ERA and fire alarm allowance? Because it's a duplication, then, isn't it?

PN283

MS ANGUS: It is a duplication and the reason for that, your Honour, that is purely an historical legacy, that those two allowances have been the subject of extended disputation and there is reference made to that in the 170MX decision at attachment D. There had been, since 1994, between the period of 1994 and 1998, I think, in any event, leading up to the handing of the Polites' decision, those two allowances had been the subject of much argument and dispute and the subject of protected industrial action for an extensive period of time, and they were controversial in nature. So as a matter purely of historical legacy, they continued to be referred to separately and no one bothered to tidy them up. That is why they were duplicated, in essence, and we say it is a duplication. It's not a narrowing.

PN284

So the clause is unambiguous in the Polites' decision, it's the identical clause which is unambiguous in the 170MX award. It is an identical clause which is unambiguous in the 1999 agreement. In late 1999, all the liabilities of P&O were bought out by Urest and we make that point in our submissions at paragraph 58. That is relevant, we say. Mr Watson says it's not a matter of consequence. It is a matter of consequence because in assuming the liabilities, they are assuming no substantive entitlements, all those employees' rights to a certain standard of redundancy pay. Then it's in the 2000 agreement, your Honour, that the words change. We've made points about the nature of that change. That was essentially, in our submission, an exercise to do two things; to update the numerical references and to refer to, for the first time we see, a reference to schedule A.

PN285

We say that that was actually the intention of the parties to clarify - was their view - was to clarify it by referring to those allowances outlined in schedule A. Certainly there's no evidence in any of those negotiations, and it was a matter that we would have thought to call witness evidence on, that there was virtually no discussion, and certainly no substantive discussion, but no discussion about any change of entitlements. There were no benefits gained on the AWU's behalf in return for effectively a trading-off of nightshift allowance and LAHA, and then what later became public holidays allowance. There were no concessions given nor benefits achieved which would indicate that there had been a deliberate decision, as part of those negotiations, to trade off certain allowances to form the redundancy basis.

PN286

Again, I make the point that in our submission the onus should be on Compass to establish that minor word changes in a document from one enterprise agreement to another, in the context of non-lawyers drafting these documents, actually serves to demonstrate a deliberate intention to depart from an entitlement.

PN287

THE SENIOR DEPUTY PRESIDENT: By the way, was Urest Australia a related company to P&O Catering Services Pty Ltd?

PN288

MS ANGUS: No, they were discrete companies. Urest Australia is a joint venture, I've made this point at paragraph 58, of Compass and Amcor. I don't know what happened to that joint venture to be honest, your Honour, but it bought out the entire shareholdings of a subsidiary of P&O and that subsidiary was the existing employer. So there was no change in the employer. There was a change in the shareholdings.

PN289

THE SENIOR DEPUTY PRESIDENT: Yes.

PN290

MS ANGUS: In essence, your Honour, I don't intend to go into any more detail about - that is the historical context which we say is essential in reading both to understand what we say is the plain meaning of the words in any event, but if there is, to the extent that there is, any uncertainty then that uncertainty needs to be read in the light of the historical background. In relation to the casual provisions, our point is quite simple. Just bear with me, your Honour. Here, the contentious clause, the clause which is the subject of argument between the parties, is 16(e)(ii) and its precursors. 16(e)(ii), in fact, I'll deal with it in this way, our argument as I've summarised, it operates prospectively and so it only deals with those employees who are made permanent after its inception, after its operation.

PN291

The two relevant provisions that we say the Commission should look at are the 1999 provisions and the 2000 provisions. The 2000 and the 2003 provisions are identical and the 1999 provisions are slightly different. In order to understand and interpret the application of the 2003 agreement, your Honour, which is the exercise before the Commission, you would need to have regard, we say, to its precursor, which is the 1999 clause. So the 1999 relevant clause I have replicated that in paragraph 90 of exhibit A1; 16(e) - in fact, I will read the whole clause, but it's the second part that's relevant. Casual employees:

PN292

A casual employee who has been rostered on a regular or continuous basis for a period in excess of five years prior to the proposed date of removal from the roster shall, upon ceasing to be rostered for work on account of redundancy, receive a payment of 12 weeks' pay.

PN293

Prior to that, as I understand it, there was no pay available for casual employees. Paragraph 2:

PN294

The parties agreed that the company would offer permanent employment positions as outlined in the MX ...(reads)... shall be requested to verify by signature their agreed entitlement witnessed by their relevant delegate.

PN295

Now, in our submission, your Honour, that spells out a procedure and some substantive requirements and a future obligation on the employer regarding the offering of permanent positions to existing casuals, to then casuals. So as of, in our submission, the operation of that agreement, the 1999 agreement, which has an operative date of 1 February 1999, although it's certified on 30 August 1999, and we're in your hands about what that means in terms of the operation of that clause, but certainly no earlier than 1 February 1999, that obligations come into play in relation to then casuals about to be offered permanent positions. What it does is it sets out - clauses 13 and 14 refer to a process of appointment on the basis of long service so it sets up, if you like, a merit - well, a seniority-based system of appointments which is a substantive entitlement, if you like.

PN296

It also sets up some procedural requirements. These employees who convert from casual to permanent have to sign a document outlining their agreed entitlement and that's signed and witnessed. So there's a substantive and a procedural component in those provisions. In fact, every employee who was converted from casual to permanent after the operation of this agreement did sign a document and it was done in a manner consistent with clause 13 and 14 of the award. It was in accordance with principles outlined in the 170MX award. So we say that that happened. Then in fact in the 2000 agreement which is identical to the 2003 agreement, the process was refined.

PN297

It required a certain number of procedural steps. Employees had to sign for agreed entitlements, but it changed the selection criteria from seniority to merit-based and conversions from casual to permanents were made in accordance with that process. So the parties are not in dispute about what happens to employees who convert from casual to permanents - - -

PN298

THE SENIOR DEPUTY PRESIDENT: 1999.

PN299

MS ANGUS: - - - after 1 February 1999. The dilemma is that at the point of 1 February 1999, the overwhelming majority of the workforce are existing permanents and a significant proportion of those existing permanents had at some stage in their history a period of casual service. Now, what the company is seeking to do is to apply retrospectively these provisions which contain a future obligation and a future series of procedural steps to seek to apply it retrospectively to the existing pool at the time of permanent employees, and we say that you
just - - -

PN300

THE SENIOR DEPUTY PRESIDENT: In relation to their permanency or in relation only to that part of their service that was casual?

PN301

MS ANGUS: The latter. In relation to contracting the amount of redundancy pay that they would be eligible for.

PN302

THE SENIOR DEPUTY PRESIDENT: So let's say a person started in 1991 as a casual and they worked until 1994 as a casual and then in 1994 they're made a permanent, the period that they accrued from 1991 to 1994 would be what they would accrue as a casual, is that right?

PN303

MS ANGUS: Yes. That is how the parties agree that the EBA operates from 1999 onwards. Our view is that that only occurs as a prospective arrangement from the point of the certification of the 1999 agreement.

PN304

THE SENIOR DEPUTY PRESIDENT: Well, how do you say a person who was casual, say, from 1991 to 1994 and then became permanent, how do you say they accrued their entitlement to severance pay? What was their accrual?

PN305

MS ANGUS: Then they are, on a plain interpretation of the agreement, permanent employees whose continuity of service includes any period of casual service.

PN306

THE SENIOR DEPUTY PRESIDENT: Yes, their continuity does, but continuity of service is not the calculation for redundancy entitlements or severance entitlements.

PN307

MS ANGUS: Well, there's no other provision that expressly outlines the calculation of their service, other than they are simply permanent employees.

PN308

THE SENIOR DEPUTY PRESIDENT: Right. So you say all - - -

PN309

MS ANGUS: They're permanent employees who fall within the - - -

PN310

THE SENIOR DEPUTY PRESIDENT: - - - service counts as if they were
casual - - -

PN311

MS ANGUS: That's right.

PN312

THE SENIOR DEPUTY PRESIDENT: If they were permanent employees?

PN313

MS ANGUS: Because they are, on the face of it, permanent employees. They're not carrying a particular sort of flag around saying that there was - that they are a particular sub-group of permanent employees. They are permanent employees that fall within the provisions of the agreement - - -

PN314

THE SENIOR DEPUTY PRESIDENT: But logically, based even on your argument about the application of the - the prospective application, if you like, of the agreement in 1999, when they became permanent employees, under the terms of the award that was when they first became entitled to accrue service for the purpose of severance pay? Is that right? Under the terms of the award as it existed then?

PN315

MS ANGUS: Yes, that is correct.

PN316

THE SENIOR DEPUTY PRESIDENT: So any service as a casual prior to that attracted no entitlement?

PN317

MS ANGUS: Well, except that to read it that way, your Honour, would to completely empty of any significance the other provisions - - -

PN318

THE SENIOR DEPUTY PRESIDENT: The definition of continuous service?

PN319

MS ANGUS: Yes.

PN320

THE SENIOR DEPUTY PRESIDENT: Yes, I see. All right. I understand.

PN321

MS ANGUS: They are our submissions, your Honour, only to draw the Commission's intention, as you would know, your Honour, to 170LW(1), the statutory provision, which makes plain that certified agreements only come into operation, only have any effect prospectively once certified.

PN322

THE SENIOR DEPUTY PRESIDENT: Yes. I understood that.

PN323

MS ANGUS: Yes. They are our submissions.

PN324

THE SENIOR DEPUTY PRESIDENT: Thank you very much.

PN325

MS ANGUS: Thank you, your Honour.

PN326

THE SENIOR DEPUTY PRESIDENT: Any reply, Mr Watson?

PN327

MR WATSON: Just very briefly, your Honour. In terms of the authorities and the approach, we do say that this matter must be looked at as an agreement. The North decision is an example of a certified agreement of this Commission, certified in this Commission, which applies the approach to interpretation from agreements generally, in the Codelfa case. I haven't taken your Honour to the Codelfa case in its entirety, but it really does make this point of the distinction between having regard to actual intentions and presumed intentions. That, we say, is a very important principle to be applied.

PN328

THE SENIOR DEPUTY PRESIDENT: I think the Full Bench in the Telstra decision, on an appeal from Lawler VP, looked at the Codelfa test, didn't it?

PN329

MR WATSON: I think it's been quoted and relied on a lot in decisions of interpretation.

PN330

THE SENIOR DEPUTY PRESIDENT: I think they analysed it, or they actually analysed it, in the application to agreements in the Commission.

PN331

MR WATSON: Yes. I think that has been relied on and so too has the North decision in a similar context, as it was a Federal Court decision, looking at the same interpretative role. We do say also that regard must be had to the notion that the agreement was not drafted by lawyers, not with the same sort of niceties as one might find with legislation, we don't take issue with that point. But we also say that while the decisions stand for the principle that one can have regard to context, the context in interpreting an agreement is the negotiations in 2003. You can't legitimately treat this situation, as I said before, as if this was a single award type instrument with variations over the years.

PN332

That comes very clearly from a proper application of the decision of North J applying the Codelfa principles. There is some issue taken as to the other authorities we referred to, came from interpretations of awards and statutes. Well, I think the union has the same advice, relying on the decision of Ives SDP, who in turn refers to various cases. Each one of those either refers to an award interpretation or some other instrument, legislative instrument.

PN333

THE SENIOR DEPUTY PRESIDENT: But they're decisions of the Commission, aren't they? Well, going back in time - - -

PN334

MR WATSON: Previous findings - - -

PN335

THE SENIOR DEPUTY PRESIDENT: - - - when the Commission was a court, of course, yes. A Commonwealth Court of Conciliation and Arbitration.

PN336

MR WATSON: Well, it was, and it had a statutory power of interpretation. So for example, the Timber Workers Union case, it was 1923, it's an application for interpretation under - - -

PN337

THE SENIOR DEPUTY PRESIDENT: Yes, the Clothing Trades Award - - -

PN338

MR WATSON: - - - the Act. The Clothing Trades is the same, interpretation of the award, O'Mara J in the Abbey case. The Avondale Motors is a tax case.

PN339

THE SENIOR DEPUTY PRESIDENT: Yes, I take your point.

PN340

MR WATSON: Each of those provisions refer to interpretations of awards, each of those cases.

PN341

THE SENIOR DEPUTY PRESIDENT: Yes. By courts.

PN342

MR WATSON: I wasn't able to - I didn't check the PTC case because there was no reference there. In fact, I notice in Ives SDP's decision it also had the same reference of above rather than any citation. So it seems like it's come from elsewhere, and I might be wrong in terms of that particular case. But each of the others refers to a statute or award. The only other point we wish to raise is to point to the inconsistency of the union argument in relation to casuals. What they effectively seek to do is refer to a current provision of the agreement to create an entitlement in relation to prior periods of casual employment for employees who were converted from casual to permanent before 1997 and 1999.

PN343

They rely on that current provision, yet they say that it's not possible to refer to a different current provision to govern circumstances of prior casual employment. Their approach can't be reconciled, we say. It is necessary to give effect to the current agreement as it stands. That's the document that creates obligations now, given the trigger that has occurred, to give effect to the document as it stands and that leads to the interpretation for which we have contended. If your Honour pleases.

PN344

THE SENIOR DEPUTY PRESIDENT: Yes, thank you. I thank both parties for their very substantial and helpful submissions. What I might be able to do is give a decision by Friday, but without reasons, and then publish the reasons subsequently. If that's of any help to the parties? All right. I reserve my decision. The matter is adjourned.

<ADJOURNED INDEFINITELY [12.55PM]

LIST OF WITNESSES, EXHIBITS AND MFIs

EXHIBIT #C1 SUBMISSIONS OF COMPASS GROUP PTY LTD PN33
EXHIBIT #C2 COPY SCHEDULE RATES OF PAY PN33
EXHIBIT #A1 WRITTEN SUBMISSIONS OF AWU WITH ATTACHMENTS PN269