Industrial Relations Commission of New South Wales CITATION: Transport Workers' Union of New South Wales v. Linfox Australia Pty Limited [2010] NSWIRComm 1021 APPLICANT Transport Workers' Union of New South Wales PARTIES: RESPONDENT Linfox Australia Pty Limited FILE NUMBER(S): IRC 24 of 2010 CORAM: Connor C CATCHWORDS: industrial dispute - transport industry - rates of pay calculated on the basis of kilometres travelled - claim of underpayment - questions of jurisdiction - matter proceeded in conciliation - formal decision issued - application dismissed Industrial Relations Act 1996 Industrial Relations (Commonwealth Powers) Act 2010 LEGISLATION CITED: Federal Fair Work Act 2009 Federal Fair Work Amendment (State Referrals and Other Matters) Act 2010 Federal Workplace Relations (Work Choices) Act 2005 Bryce v. Apperley (1998) 82 IR 448 Codelfa Construction Pty Limited v. State Rail Authority of New South Wales (1982) 149 CLR 337 CASES CITED: George A Bond and Company Limited v. McKenzie (1929) AR 498 State of New South Wales v. Commonwealth of Australia (2006) 156 IR 1 Transport Workers' Union of New South Wales v. Bevchain Pty Limited [2009] NSWIRComm 1038 HEARING DATES: 15/04/2010 DATE OF JUDGMENT: 13 May 2010 APPLICANT Oshie Fagir Transport Workers' Union of New South Wales LEGAL REPRESENTATIVES: RESPONDENT Gaylynne Neill Linfox Australia Pty Limited DECISION: INDUSTRIAL RELATIONS COMMISSION OF NEW SOUTH WALES CORAM: CONNOR C Thursday, 13 May, 2010 Matter No IRC 24 of 2010 Transport Workers' Union of New South Wales and Linfox Australia Pty Limited Notification under S.130 of the Industrial Relations Act, 1996 re alleged underpayment to drivers paid by the kilometres travelled DECISION [2010] NSWIRComm 1021 Introduction 1 On Monday, 11 January, 2010 a notification of an industrial dispute was lodged by the Transport Workers Union of New South Wales under S.130 of the 1996 Industrial Relations Act. The industrial dispute with Linfox Australia Pty Limited concerns the entitlement of some of the employee drivers paid under the Linfox New South Wales (Transport Distribution and Waste) Agreement made in 2007 (and registered in the Federal industrial jurisdiction), the Linfox TWU (FFG New South Wales - Vehicle Operators) Enterprise Agreement made in 2003 (and registered in the State industrial jurisdiction) which the 2007 agreement essentially replaced. There is also a common law agreement (unregistered) between Linfox and the TWU which has some relevance in these proceedings. 2 The matter came before me for conferences on Thursday, 14 January, 2010 and Friday, 19 February, 2010. The matter remained unresolved in those conferences and I programmed the matter for more formal proceedings in the nature of a hearing on Thursday, 15 April, 2010, directing the parties to prepare written submissions in support of their respective positions. I did not issue the certificate of attempted conciliation required by S.135 with respect to this matter, however. The parties were content for me to resolve this matter with further conciliation, albeit in a more formal manner than has hitherto been the case and for me to publish reasons for my decision in the matter. 3 Of course, at present there are restrictions imposed on the State Commission to arbitrate claims affecting employees of corporations within the meaning of S.51(xx) of the Commonwealth Constitution, ie Linfox in these proceedings [State of New South Wales v. Commonwealth of Australia (2006) 156 IR 1]. Such industrial disputes now fall under the provisions of the 2005 Federal Workplace Relations (Work Choices) Act and the 2009 Federal Fair Work Act which replaced it. 4 I am nevertheless satisfied that it would be open to me to proceed to arbitration with this matter, if that was the wish of the parties. Formerly, the TWU and Linfox have addressed industrial disputes which had arisen by a referral agreement arrangement authorised by S.146A, inserted into the State IR Act by a 2006 amendment. However, effective from Friday, 1 January, 2010 complementary Federal and State legislation - the State Industrial Relations (Commonwealth Powers) Act and the Federal Fair Work Amendment (State Referrals and Other Measures) Act - came into operation. Among other things, S.146A was repealed. 5 But S.146A has, in fact, been replaced with an amendment to S.146B which continues to authorise the State Commission to exercise functions of conciliation and/or arbitration in the resolution of industrial disputes with respect to employees covered by Federal enterprise agreements which provide for the referral of such matters to the State Commission. I regard S.146B to be consistent with, and complementary to, Ss.738 and 740 of the Federal FW Act which provide for alternative dispute resolution procedures. Clause 2, Settlement of Disputes Procedure, of the 2007 agreement in this case provides that disputed matters must be referred to the State Commission for conciliation [Clause 2.1.2(d)] or arbitration [Clause 2.1.2(e)]. The Issue in Dispute 6 The linehaul driver employees at the Linfox Chullora depot are paid under the 2007 agreement and the common law agreement either a weekly wage or a rate calculated on the kilometres travelled. The 2007 Agreement provides [Clause 4.2.3] as follows: "Effective from the beginning of the first full pay period on or after Thursday, 26 June, 2008, the weekly wage rates in force immediately beforehand shall be increased by the CPI movement (as defined) over the twelve month period ending the previous 31 March or 4%, whichever is the greater, as outlined in Appendix 3" My emphasis. Clause 4.2.3 applies only to weekly hire employees. The kilometre rates are contained in the common law agreement. Similar adjustments to the weekly wage are made yearly in subsequent years to reflect CPI movements. 7 The 2003 agreement provided [Clause 15.2] as follows: "Effective from the beginning of the pay period to commence on Thursday, 24 June, 2004, the weekly wage rates in force immediately beforehand shall be increased by 5% with the increase payable for all award purposes." Again my emphasis. Clause 15.2 is confined to weekly hire employees. And Clause 18 of the 2003 agreement provided a mechanism that permitted certain matters to be resolved at local level, viz: "Subject to their being no inconsistency with the other terms of this agreement, the matters set out in Appendix C are agreed at a local level between the parties." Appendix C provides that the kilometre rates of pay will be "...no less than..." amounts set out. In particular, it provided for a yearly increase of 4% to the kilometre rates - not the 5% set out in Clause 15.2 for weekly wage rates. Consequently, Linfox has paid the 5% adjustment in Clause 15.2 of the 2003 agreement only to weekly wages of employees and confined the adjustment to the kilometre rate to 4%. Submissions 8 Mr Fagir, who represented the TWU in the hearing, argues that there is an inconsistency between Appendix C in the 2003 agreement and Clause 4.2.3 of the 2007 agreement and that the employees engaged on kilometre hire have been underpaid. He argues in written submissions that: "....the intention of the parties in drafting the (2007) agreement will not trump the plain words of an agreement. In cases of ambiguity, such as the present, however, it is relevant to consider that there is no rational reason why kilometre rates under an agreement should be negotiated such that they increase at a lower percentage than the hourly rate for equivalent work. An interpretation promoting that strange result should not be preferred by the Commission..." Mr Fagir submitted that I should give the relevant provisions of the 2003 agreement and the 2007 agreement a beneficial construction to overcome a discrepancy and obvious inconsistency he sees in them. He claimed that there was ambiguity in the provisions which permit me to interpret those provisions in favour of a further adjustment to the kilometre rate to ensure equality between the Linfox weekly hire employees and those engaged on the kilometre rate. 9 Ms Neill, representing Linfox in the hearing, indicated in her written submission that the 2003 agreement, the 2007 agreement and the common law agreement was properly negotiated by duly elected employee representatives and authorised TWU officials. She indicated in written submissions that: "....in the 2007 agreement and the 2003 agreement there is no interdependency between the agreed base rate and the agreed kilometre rates. The base rates and kilometre rates stand alone and the amounts reflect the agreed position of both parties arising from the negotiations. The applicant's claim of an underpayment relates directly to the agreed rate schedules contained within the 2003 agreement... The applicant asserts in its submissions that the kilometre rates are calculated by reference to the weekly base rates. There is no such reference in the 2003 agreement..." She further asserts in her written submissions: "...the base rates and kilometre rates and increases to both during the life of the 2007 agreement were agreed to arising from the direct negotiations of the parties. The increases to the base rates during the life of the agreement are outlined within the registered Federal 2007 agreement and the increases to the kilometre rates are outlined within the common law agreement..." Conclusion 10 Provisions in any enterprise agreement, arising as it does from often protracted negotiations between an employer and trade unions representing its employees, are often made in the light of custom and practice and particular working conditions. They are frequently framed in words intelligible only to the parties and without much care in drafting [George A Bond and Company Limited v. McKenzie (1929) AR 498 at pp.503 and 504]. Nevertheless, those enterprise agreements must primarily be interpreted by looking at what is actually said, not necessarily what may well have been the intention of the parties - or one of the parties - when they were made. In Bryce v. Apperley (1998) 82 IR 448 the Full Bench of the Commission (Hungerford, Marks and Schmidt JJ) commented in that respect (at p.452): "...In our view, in construing the true meaning of an industrial award, like any other instrument with legal force, the task requires an approach according to the actual words used and their plain, ordinary English meaning..." It is not permissible to contradict the actual language of the enterprise agreement when it has a plain meaning [ Codelfa Construction Pty Limited v. State Rail Authority of New South Wales (1982) 149 CLR 337 at p.352]. As I indicated in my unreported decision of Wednesday, 5 August, 2009 in Transport Workers' Union of New South Wales v. Bevchain Pty Limited [Matter No.IRC 2263 of 2008 at p.5]: "...Primarily, provisions in any instruments must still always be interpreted by looking at what is actually said... Ultimately, it is the literal meaning of the words on which I should rely..." 11 I do accept, as Mr Fagir submitted, that if there is any ambiguity in the provisions under consideration in this hearing, it is appropriate for me to give it the more beneficial construction available. I do not see such ambiguity in the provisions under consideration in this hearing. As Ms Neill asserted, the relevant provisions in the 2007 agreement are clearly confined to weekly hire employees and not to the employees on the kilometre rate who look elsewhere for adjustment to the rate they receive. 12 I therefore reject the TWU application in these proceedings. The matter is concluded on that basis. It is a matter for the parties to address any alleged discrepancies which they believe may arise from the current position flowing from the application of the 2003 agreement, the 2007 agreement and the common law agreement and amend the position accordingly, if considered appropriate. But otherwise the existing terms of those agreements must prevail. P J CONNOR Commissioner DISCLAIMER - Every effort has been made to comply with suppression orders or statutory provisions prohibiting publication that may apply to this judgment or decision. The onus remains on any person using material in the judgment or decision to ensure that the intended use of that material does not breach any such order or provision. Further enquiries may be directed to the Registry of the Court or Tribunal in which it was generated.