[2008] AIRCFB 397 [2008] AIRCFB 397 AG843932  PR981655 Download Word Document AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION Workplace Relations Act 1996 s.120 - appeal against the decisions issued by Commissioner Lewin on 4 October 2007 [ [2007] AIRC 840 ] and on 15 November 2007 [ [2007] AIRC 928 ] Swire Cold Storage Pty Ltd (C2007/3711) s.170LW - pre-reform Act - application for settlement of dispute (certified agreement) Transport Workers’ Union of Australia and Swire Cold Storage Pty Ltd (C2007/2791) SWIRE COLD STORAGE PTY LTD (VICTORIAN TRANSPORT WORKERS) AGREEMENT 2005 (ODN AG2005/6692) [AG843932] Private transport industry SENIOR DEPUTY PRESIDENT HARRISON SENIOR DEPUTY PRESIDENT CARTWRIGHT COMMISSIONER FOGGO SYDNEY, 21 MAY 2008 Dispute over application of agreement, redundancy entitlements, approach to interpretation and construction. DECISION [1] This decision concerns an appeal by Swire Cold Storage Pty Ltd (the Company) against two decisions of Commissioner Lewin each made in accordance with a dispute settlement procedure in an enterprise bargaining agreement. The agreement in question is the Swire Cold Storage Pty Ltd (Victorian Transport Workers) Agreement 2005 (the Agreement) the parties to which are the Company and the Transport Workers’ Union of Australia (TWU). The Agreement was certified under Division 4 Part V1B of the Workplace Relations Act 1996 as it was prior to amendments made to it by the Workplace Relations Amendment (Work Choices) Act 2005 (Work Choices). [2] A dispute had arisen between the parties to the Agreement over the redundancy entitlements of a number of drivers. There was a difference of opinion between them over the meaning of certain provisions of the Agreement and the monetary amounts the employees were entitled to. The dispute had proceeded through various steps of the dispute settlement procedure and, not being resolved, was referred to the Commission with a request for it to conciliate and, if necessary, arbitrate. It was necessary for Commissioner Lewin to proceed to arbitration. [3] The competence of the appeal was raised by the TWU as the grounds in the notice of appeal refer to s.120 of the Act. It would appear now to be accepted that an appeal against a decision made under a dispute resolution process in an agreement certified prior to the Work Choices amendments, should be brought under s.45 of the pre-reform Act. 1 We proceeded to hear the appeal and have made this decision as if the notice of appeal had referred to s.45 of the pre-reform Act. [4] In his first decision the Commissioner found that he had jurisdiction to deal with the matters in dispute between the parties. About the entitlements of the redundant employees the Commissioner said: “I have decided that: • The provisions of clause 13.3.2 are an additional entitlement to the period of notice or payment in lieu thereof prescribed by clause 12 in situations where an employee's employment is terminated due to redundancy, either voluntarily or compulsorily; • A “ weeks pay ” for the purposes of clauses 13.3.1 and 13.3.2 means the amount of money which would be paid to an employee for the hours of work in respect of which the hourly rate of pay would be single time (38 hours per week), plus the amounts prescribed by the Agreement as shift allowances and penalties payable in respect of such ordinary hours of work depending upon the incidence of the working of such hours under the provisions of the Agreement applicable to that incidence or pattern of ordinary hours, plus the amount of $28.00, being an amount calculated by deducting $12.50 sacrificed for accident insurance from the amount of $40.50 as prescribed in paragraph 1.2 in the Memorandum of Understanding referred to above”. 2 [5] In his second decision the Commissioner gave detailed reasons for each of his rulings. Much of that decision dealt with the jurisdictional challenge made by Swire that as the matters in dispute concerned persons who were no longer employed by the Company, the Commission had no power to deal with it. The Commissioner rejected that submission and Swire did not contest that ruling on appeal. [6] Two additional matters were in issue before the Commissioner which were not pursued on appeal. The first concerned whether the number of contracted hours was relevant to the calculation of a week’s pay for the purposes of clause 13 of the Agreement. The evidence was that employees worked a variety of rostered hours, 40, 50 or 60 per week. The TWU had contended that it was those hours that should be factored into the calculation of severance payments. However the Commissioner found that it was only the 38 hours of work paid as ordinary time which were to be taken into account. The TWU had also submitted that in calculating the sum of a week’s pay the whole of an amount of $40.50 referred to in a memorandum of understanding annexed to the Agreement should be taken into account. The Commissioner did not accept that construction and ruled that only the difference between that amount and a deduction which was made for accident insurance was to be factored into the calculations. There was no cross appeal filed by the TWU in relation to either of these rulings. [7] We should now refer to the Commissioner’s detailed reasons as contained in his second decision. We will only do so however to the extent required to place in context Swire’s grounds of appeal. [8] The Commissioner first referred to the background to the dispute. The Company carries out a contract cold storage and transport business and employs drivers to undertake the transport of frozen and refrigerated goods from its cold stores to customer and retail outlets. In 2002 Swire acquired a business known as Clelands Cold Stores (Aust) Pty Ltd (Clelands) and a number of drivers then employed by that company transferred to Swire. At the time the terms and conditions of those drivers were regulated by an enterprise bargaining agreement which applied to Clelands and the TWU. It had been preceded by several enterprise bargaining agreements between those parties. Each of these enterprise agreements was in evidence before the Commissioner. [9] Prior to the Agreement coming into operation, there were agreements between Clelands and the TWU dated 1998, 1999, 2000 and 2002. All of these agreements made it clear that the relevant award was the Transport Workers’ Award (initially the 1983 version and then subsequently the 1998 version (the Award)). This is consistent with the evidence of Swire that historically it was the Award which bound drivers at Clelands and, from 1998 onwards, certified agreements had been in operation which were to be read in conjunction with the Award. We interpose to note that clause 4 of the Agreement provides that it is to apply in lieu of the Award but where any subject matter is not covered by the Agreement it was to be dealt with in accordance with the Award. [10] As a consequence of the loss of a contract Swire informed the TWU and employees of the need for redundancies. Expressions of interest were called for employees to accept a voluntary redundancy package. Drivers and the TWU were concerned that the redundancy entitlements contained in a “redundancy quote” were incorrectly calculated. [11] The parties were unable to agree upon the appropriate entitlements and the TWU made application to the Commission for it to conduct a dispute resolution process in accordance with clause 7 of the Agreement. [12] The Commissioner dealt with a jurisdictional challenge that was made to his entertaining the matters in dispute. He gave detailed reasons for his decision that the dispute was one which he had jurisdiction to settle describing it as a dispute concerning the application of the terms of the Agreement to all persons employed under it, whenever an eligible redundancy situation occurs. 3 Eligible redundancy is a term used in clause 13.1 of the Agreement. [13] The Commissioner reproduced the relevant provisions of clauses 12, 13, 18 and 22 of the Agreement as well as an extract from a memorandum of understanding (MOU) which was an annexure to the Agreement. We have reproduced the relevant extracts from each of those provisions in Annexure A to this decision. [14] The Commissioner next gave his reasons for his ruling in relation to what he described as the issue of “ Severance Payment and Notice of Termination ”. The Commissioner considered the competing positions of the parties. For the purposes of this decision, it is adequate for us to summarise the TWU submission as being that in addition to the severance payments provided for in clause 13.3.1 employees were entitled, in accordance with clause 13.3.2, to an additional five weeks payment. The Company submitted that properly understood clause 13.3.2 provided for either five weeks notice or payment in lieu thereof. [15] The Commissioner noted that there was some “apparent conflict” between the provisions of clauses 12 and 13 of the Agreement. He indicated that the issue was whether the provisions of clause 13.3.2 conferred upon employees an additional entitlement, in certain circumstances, to the entitlements provided by clause 12.1.1. He said it would seem superfluous to repeat any entitlement to payment in lieu of notice in clause 13 having regard to the provisions of clause 12. Accordingly, it was appropriate to assume clause 13.3.2 had some additional work to do. 4 [16] The Commissioner said that where there was an eligible redundancy then the provisions of clause 13.3.2 were an additional entitlement to any notice prescribed by clause 12. He said that his reason for his conclusion included “ one highly specific factual circumstance in the history of the industrial relationships between the parties …”. 5 It was not contested that the origin of certain terms of clause 13 of the Agreement could be traced to a redundancy agreement between Clelands and the TWU entered into in 1998. A copy of that agreement was in evidence before him (the Redundancy Agreement) and we have annexed it to this decision (Annexure B). [17] The first paragraph of the Redundancy Agreement is in the same terms as those in clause 13.3.1 of the Agreement and the words of the second paragraph of the Redundancy Agreement are now reproduced in clause 13.3.2 of the Agreement. [18] The Commissioner noted that under the heading “Notice of Termination ” in its original form it read “( Five) 5 weeks notice or pay (weeks pay as per point 1) in lieu for each employee ”. 6 Handwritten amendments had been made to it placing a line through the words “notice or” and these amendments had been initialled by the signatories to the Agreement (Clelands and the TWU). With the amendments the clause was now to read “ 5 (Five) weeks pay (weeks pay as per Point 1) in lieu for each employee”. Swire’s argument was that the words that had been struck out should be implied and read back into clause 13.3.2. The Commissioner did not accept the need to imply those words into the clause. [19] In the Commissioner’s opinion the correct construction of the clause was such as to require all employees to be paid an amount of 5 weeks pay where the termination was on account of redundancy. That amount was to be paid regardless of the period of service of the employee prior to the redundancy and regardless of any notice that had already been given. It was not an alternative to the minimum requirements of clause 12 which provided a scale of periods of notice that should be given to an employee to terminate the employment. In the Commissioner’s opinion this construction reflected what the parties had intended. [20] The Commissioner said that quite apart from the relevance of the Redundancy Agreement that there was much to be said for the proposition that the provisions of clause 13 were a special code of additional and different entitlements for employees where the termination of their employment is as a consequence of an “eligible redundancy”. [21] The Commissioner next turned to consider the issue of what amounts of money or components comprised “A weeks pay”. [22] The Commissioner noted that the term “weeks pay” was used on five occasions in clause 13.3 and that there was some lack of consistency in the use of the words in the context of the whole of clause 13. [23] Swire’s submissions about clause 13.3.6 were then discussed. The Commissioner’s construction of clause 13.3.6 was that its principal purpose was to exclude the possibility that overtime hours might form any part of a weeks pay for the purpose of payments made pursuant to clauses 13.3.1 and 13.3.2. [24] The Commissioner then turned to the issue of whether, in the severance calculations, it was appropriate to take into account shift allowances as prescribed by clause 23.8. It was clear from clause 13.3.1 that shift penalties could be taken into account but the question was whether shift allowances were also to be taken into account. [25] The Commissioner said that, in his opinion, shift allowances paid to an employee should also be brought into account. In doing so he gave particular attention to what was meant by the words in clause 13.3.6 “ for the employee concerned ”. [26] Next the Commissioner dealt with the issue of “Contracted Hours”. The TWU had argued that the calculations of payments to employees should be based on the number of hours actually and regularly worked by the employee. The evidence before the Commissioner reflected the fact employees were working 40, 50 or 60 hours a week depending on the agreement between the individual and Company. Swire had contended that the ordinary hours were 38 per week and should not be confused with rostered hours of work. The Commissioner was persuaded by Swire’s argument. We have earlier mentioned that there was no appeal by the TWU in relation to this ruling of the Commissioner. [27] Finally the Commissioner dealt with the issue of whether the amount of $28 should be taken into account. In this respect he referred to the MOU annexed to the Agreement. Clause 1.2 of that document refers to a weekly sum of money which is to be paid to a full-time employee. The amount is $40.50. However $12.50 of this is to be sacrificed to cover “ accident make-up premium payment ” referred to in clause 18.3. This is how the sum of $28 is arrived at. The Commissioner noted the fact that the amount in question was referred to under the heading “Rates of Pay”. It was, in his opinion, inescapable that the amount was payable in respect of the ordinary hours prescribed by the Agreement for full-time employees. The amount was ordinarily and universally payable to all such employees. He was not persuaded to take into account the whole of the sum of $40.50 as was contended for by the TWU. He concluded that the $28 was appropriate to be taken into account for the purposes of calculating a “weeks pay” under clause 13. He was not persuaded by Swire's argument that the amount was an allowance and accordingly could not be brought to account in these calculations. [28] Before considering the matters raised by the grounds of appeal we should summarise the relevant principles that should be applied by the Commission when interpreting enterprise bargaining agreements. Interpretation of the certified agreement - approach [29] Firstly we refer to the often quoted decision of Justice Madgwick in Kucks v CSR Limited . 7 His Honour was there considering the approach that should be taken when interpreting an award. However this same approach has been subsequently adopted when consideration is to be given to the terms of a certified agreement. His Honour summarised the principles involved in these terms: “Legal principles It is trite that narrow or pedantic approaches to the interpretation of an award are misplaced. The search is for the meaning intended by the framer(s) of the document, bearing in mind that such framer(s) were likely of a practical bent of mind: they may well have been more concerned with expressing an intention in ways likely to have been understood in the context of the relevant industry and industrial relations environment than with legal niceties or jargon. Thus, for example, it is justifiable to read the award to give effect to its evident purposes, having regard to such context, despite mere inconsistencies or infelicities of expression which might tend to some other reading. And meanings which avoid inconvenience or injustice may reasonably be strained for. For reasons such as these, expressions which have been held in the case of other instruments to have been used to mean particular things may sensibly and properly be held to mean something else in the document at hand. But the task remains one of interpreting a document produced by another or others. A court is not free to give effect to some anteriorly derived notion of what would be fair or just, regardless of what has been written into the award. Deciding what an existing award means is a process quite different from deciding, as an arbitral body does, what might fairly be put into an award. So, for example, ordinary or well-understood words are in general to be accorded their ordinary or usual meaning.” 8 [30] Subsequently this approach was adopted by a Full Court of the Federal Court of Australia in United Firefighters’ Union of Australia and Another v Metropolitan Fire and Emergency Services Board . 9 Their Honours said: “51 The parties agree that the proper approach to the construction of industrial instruments was stated by Madgwick J in Kucks at 184. His Honour’s statement of the principles was followed by a Full Court in Ansett Australia Limited v Australian Licensed Aircraft Engineers’ Association [2003] FCAFC 209 at [8] and by two Justices of the High Court in Amcor Limited v Construction Forestry Mining & Energy Union [2005] HCA 10 at [96] per Kirby J and at [130] per Callinan J. That was the approach which was adopted by the learned primary judge. 52 A narrow or pedantic approach is not to be taken. The intention of the framers of the document is to be ascertained objectively, bearing in mind that they are likely to have been people of a practical bent of mind. Their intention may well have been expressed in ways likely to have been understood in the relevant industry, rather than in “legal niceties or jargon.”; see Kucks at 184. 53 Clearly enough, the language of the instrument must be construed in its context, having regard to the subject matter and the wording of the entire agreement; Short v FW Hercus Pty Limited (1993) 40 FCR 511 at 518. The context will include the statutory context in which the agreement is made.” 10 [31] The reference above to Short v FW Hercus Pty Ltd is to an extract of the decision of Justice Burchett in that case. His Honour said: “The context of an expression may thus be much more than the words that are its immediate neighbours. Context may extend to the entire document of which it is a part, or to other documents with which there is an association. Context may also include, in some cases, ideas that gave rise to an expression in a document from which it has been taken. When the expression was transplanted, it may have brought with it some of the soil in which it once grew, retaining a special strength and colour in its new environment. There is no inherent necessity to read it as uprooted and stripped of every trace of its former significance, standing bare in alien ground. True, sometimes it does stand as if alone. But that should not be just assumed, in the case of an expression with a known source, without looking at its creation, understanding its original meaning, and then seeing how it is now used. Very frequently, perhaps most often, the immediate context is the clearest guide, but the court should not deny itself all other guidance in those cases where it can be seen that more is needed. In literature, Milton and Joyce could not be read in ignorance of the source of their language, nor should a legal document, including an award, be so read.” 11 [32] Additionally the comments made by Justice Mason in the decision of the High Court of Australia in Codelfa Construction Pty Ltd v State Rail Authority of NSW 12 are often referred to. Although that judgment concerned the approach to be taken to the interpretation of the terms of a commercial contract and the circumstances in which a term may be implied, extracts from it are often relied on as relevant to the interpretation of industrial agreements. [33] The principles from His Honour’s judgment at paragraphs 22 to 24 as adapted and applied to an agreement are that it is the terms the parties have used in their agreement to which principal regard must be had. It is not appropriate when undertaking that task to look to evidence of prior negotiations or surrounding circumstances to contradict the language used by the parties. In the event though the terms used by the parties are ambiguous and susceptible of more than one meaning then objective evidence of background facts may assist in understanding the mutual intention of the parties. In this respect consideration may be given to the objective facts known to both parties. This does not extend to evidence about the actual intentions or expectations of the parties which tend to give too much weight to these factors at the expense of the language of the agreement. General observations [34] This appeal and the notifications to the Commissioner are a consequence of the Agreement incorporating a combination of clauses from various sources. Some were originally in the Award, some in predecessor enterprise bargaining agreements applying to Clelands, and others in the Redundancy Agreement. [35] It was clear from the Commissioner’s reasons for decision that there was an inconsistency of use of certain terms which had arisen from a “cut and paste” of various clauses into the Agreement. This presented a real challenge when he was called upon to identify what the parties mutually intended. They put competing constructions and interpretations upon the relevant provisions. It could not be said that any one construction was so clear and unarguable that it had to be accepted by the Commissioner. [36] In this context it is unrealistic to ignore the difficulties presented to the Commissioner when it is clear neither party to the Agreement had given consideration to the need to revisit the whole of the Agreement to ensure internal consistency and to delete or amend the inaccurate and misleading references to awards, agreements and dates. [37] In any event the Commissioner was called on to settle the dispute by arbitration. He was asked to rule upon the competing constructions and it was not suggested by either party that the dispute should remain unresolved. [38] The Commissioner acknowledged throughout his reasons some difficulty in ascertaining the meaning of the relevant clauses of the Agreement. In our opinion each possible construction urged upon him was, to some extent, problematic. However he adopted a construction of the terms which they were capable of bearing. In his construction and interpretation of clause 13.3.2 he was fortified by the amendments the parties to the Redundancy Agreement had agreed. The terms of that agreement were known to Swire and they had been incorporated into its Agreement. Shift allowances - an error of jurisdiction and construction [39] The arguments of Swire concerning the rulings of the Commissioner about shift allowances being appropriate to take into account when calculating a weeks pay for the purposes of clause 13.3.1 were challenged on two bases. Firstly, Swire argued that the Commissioner was in error in finding that the matter was one in dispute between the parties and amenable to arbitration under the dispute settlement clause of the Agreement. The second challenge was to the construction adopted by the Commissioner which Swire argued was in error. It submitted that shift allowances should have been excluded from any calculations. [40] In relation to the jurisdictional challenge Swire argued that in any arbitration the Commissioner needed to identify the nature of the dispute between the parties and, in relation to that dispute, he was empowered to arbitrate in accordance with the terms of the dispute settlement provision. The TWU had initially contended that shift allowances should form part of any redundancy payments made to eligible employees. By the time it had filed its final written submissions however the TWU had conceded the arguments of Swire about this matter and accepted that clause 13.3.1 of the Agreement excluded any payments which were allowances; shift allowances came within this category. In those circumstances there was no longer a dispute about this matter which could be the subject of arbitration. Swire accepted that disputes may be ambulatory and circumstances may change over time. However, in this case, it was clear that the parties no longer held divergent views about the shift allowance question. [41] Additionally Swire argued that the Commissioner was in error in his construction of the Agreement in determining that a weeks pay for the purposes of clauses 13.3.1 and 13.3.2 included shift allowances. It seems to us clear from the second sentence of 13.3.1 that when calculating a weeks pay for the purposes of ascertaining an amount of severance pay no allowance is to be taken into account. Despite the complexity with which Swire, in written and oral submissions developed this argument, we think we need go no further than consider what is meant in clause 13.3.1 by the words “ but devoid of any allowances ”. The TWU did not make any submissions to us about these grounds of appeal. It did not concede the grounds but, quite properly, indicated that given the position it had taken below it would not be appropriate for it to now argue to the contrary before us. [42] In our opinion the decision of the Commissioner in relation to his conclusion that shift allowances should be taken into account in the calculation of weeks pay for the purposes of clauses 13.3.1 and 13.3.2 is erroneous. We are persuaded that this error warrants the grant of leave to appeal. In light of this ruling we think it unnecessary to deal with the jurisdictional challenge. We accept as correct that the Commission is to confine itself in an arbitration under clause 7.3.2.1 to such matter or matters which, in terms of the dispute settlement procedure, “ still cannot be resolved ”. However, after the concession made by the TWU about shift allowances there undoubtedly still remained a dispute about the application of the Agreement. The dispute about the proper construction of clause 13 remained even though one component or aspect of that dispute had been conceded. Whether, in those circumstances any error made by the Commissioner is a jurisdictional error and amenable to an appeal under s.45(1)(g), or an error made within jurisdiction is not readily apparent. We think it unnecessary to deal with this matter any further. Five weeks notice [43] Swire submitted that the Commissioner’s decision that clause 13.3.2 provided an entitlement to five weeks pay, regardless of any notice having been given under clause 12, was in error. The difficulty here faced by the Commissioner was that although the words used in the subclauses of clause 13 may be said to be capable of being ascribed an ordinary or well understood meaning, the challenge was to read them in context of the whole of clause 13 and, in turn, the whole of the Agreement. Ascertaining the correct meaning was not without difficulty but, on balance, we prefer the Commissioner’s interpretation. We have referred to this earlier in paragraphs 15 to 20. [44] Additionally it is to be observed that neither clause 12 nor 13 is said to be subject to the other nor is there any express exclusion in one clause as to any provisions of the other. [45] We accept that the title to clause 13.3.2 being “Notice of Termination” fits somewhat awkwardly with the words contained in it. The clause in effect precludes any notice of termination being given which may, like clause 12, reduce the need for a payment in lieu. The clause requires an amount of money to be paid to an employee regardless of any prior notification. [46] Swire’s argument was that clause 13 is a special code providing more beneficial entitlements to an employee in the circumstances of an eligible redundancy. It says it supplants the notice provisions in clause 12. It argued that the Commissioner should have inferred words into clause 13.3.2. It submitted that the mutual intention of the parties was that the words “notice or” should be implied into the sentence so that it should read “5 (Five) weeks notice or pay (weeks pay as per Point 1) in lieu for each employee”. [47] Read in this way Swire submits that it then makes sense of the provisions of clauses 13.4 and 13.5 each of which refer to entitlements of an eligible employee during the notice period. If it was intended that clause 13.3.2 provided only for the payment of an amount of money and did not allow for the giving of a period of notice then those two subclauses would make no sense. [48] Like the Commissioner we are not persuaded that this construction should be placed on the terms of clause 13.2.2. It would, in our opinion, have been erroneous for the Commissioner to read back into that clause the words that the Redundancy Agreement had deleted and which had not been reinserted subsequently in any of the 2000 or 2002 agreements or the Agreement. No proper basis was established by Swire for its assertion that it was the mutual intention of the parties that the clause should be read as including the words “notice or”. [49] Furthermore, contrary to Swire’s argument one does not need to infer those words into clause 13.3.2 for clauses 13.4 and 13.5 to make sense. To the extent they confer rights on an employee during a notice period they are capable of being read as referring to that notice period required to be given to an employee to terminate the contract of employment as provided for by clause 12. [50] This case was one in which the Commissioner was faced with competing constructions of clause 13.3.2. His interpretation gave meaning to each of the terms of that clause to the extent the clause reflected some ambiguity or uncertainty it was appropriate for him to have recourse to the terms of the Redundancy Agreement. It was in our opinion evidence that comes with the category of surrounding circumstances which could be taken into account. At the very least, it is evidence of the type identified by Justice Burchett in Short v Hercus when he approves of considerations being given to the source of an expression in a document. $28 - is it to be included in the “weeks pay” [51] Swire argued that the Commissioner was in error in including the sum of $28 in the calculation of an eligible employee’s severance payments. The terms of the MOU presented additional difficulties and challenges to the Commissioner in ascertaining its meaning and the intention of the parties. In our opinion however the construction given to the relevant provisions by the Commissioner is to be preferred to that contended for by Swire. The MOU was in several respects unclear. [52] It was envisaged by clause 9.1.1 of the Agreement that employee’s actual rate of pay would be contained in a “ Memorandum of Understanding dated July 2002 ”. The MOU annexed to the Agreement bears no date, and to add to the confusion, is said to have been negotiated between Swire and the TWU “ as part of the certification process of the Clelands Pty Ltd (1999) Enterprise Agreement ”. That agreement operated between July 1999 and February 2000, a time prior to Swire’s acquisition of Clelands business. One thing that is clear from the MOU is that it prescribes rates of pay operative between July 2005 and July 2007. It is to be noted that the Clelands 1999 Agreement rates of pay were also contained in a memorandum of understanding and it expressed those rates as weekly rates of pay. Subsequently in the Clelands 2000 agreement rates of pay were expressed as hourly rates. The terms of all of clause 1 of that memorandum of understanding are similar to those in the MOU. In neither the 2000 or 2002 agreement is the $40.50 expressed as an allowance. [53] Clause 1.1 of the MOU contains hourly rates applicable to grades four to eight drivers and the increases that will be paid during the life of the Agreement. Clause 1.2 refers to the sum of $40.50 which is to be paid “ weekly to full-time employees ” with $12.50 being sacrificed to cover accident make-up premium payments. Clauses 1.3 and 1.4 deal with the manner in which payments are to be calculated for employees working a 10 hour day and a 60 hour week. [54] Clause 2 of the MOU does not deal with rates of pay but records the parties agreement that certain “specified yard agreements” are to continue to apply during the life of the Agreement. It is not apparent that this clause deals with the topic of “Rates of Pay”. However it does not, in our opinion, compromise the categorisation of clauses 1.1 to 1.4 which clearly deal with that topic. [55] Swire argued that the $28 was not properly categorised as a rate of pay but rather it was an incentive allowance and should not be included in the calculation of a week’s pay for the purposes of clauses 13.3.1 and 13.3.2. Aligned with this argument Swire submitted that the whole of the second sentence contained in clause 13.3.1 was to be ignored, describing it as otiose and having no work to do. It is to be noted that this sentence provides for a definition of what is intended in that paragraph by the words “ weeks rate of pay ” a different term to “weeks pay”. [56] It is essential to Swire’s argument that we are persuaded that the $28 is an allowance or more particularly, as Swire would have it, an incentive allowance. The sum is not referred to in the Agreement as an allowance much less an incentive allowance. It is not contained in clause 16 of the Agreement, the allowances clause. Whatever may have been the original reason why the amount of money might have been struck the Agreement does not in any way reflect that the parties intended it would be an allowance. The Commissioner was right to place weight on the fact the amount is paid weekly to all full-time employees and is an amount referred to in the MOU “Rates of Pay” clause. [57] Clause 18.3(iii) of the Agreement is also consistent with this construction. It provides that employees could give written notice to the Company that they wished to no longer be covered by the income protection insurance. In that event the clause provides that the dollar contribution would remain in the employee’s weekly pay, which we take to mean the amount would be paid to the employee. 13 [58] In our opinion the construction of this clause and the ruling of the Commissioner reflects no appellable error. Disposition of the Appeal [59] We have earlier indicated in respect of those grounds of appeal which relate to the Commissioner’s ruling about shift allowances, that leave to appeal should be granted. [60] We are persuaded that the Commissioner’s construction of the clauses of the Agreement such as to incorporate shift allowances in a “weeks pay” for the purposes of clauses 13.3.1 and 13.3.2 was erroneous. To this extent the appeal should be allowed and that part of the Commissioner’s decision will be quashed. [61] In relation to the remaining grounds of appeal we have considered whether leave should be granted. In Wan v Australian Industrial Relations Commission , the Federal Court stated that the appropriate test with respect to leave to appeal is as follows: “Section 45 does not specify grounds for granting leave to appeal other than in the special case referred to in s.45(2). As we have previously observed, grounds traditionally adopted in granting leave have included considerations such as whether the decision is attended with sufficient doubt to warrant its reconsideration and whether substantial injustice may result if leave is refused. These `grounds' should not be seen as fetters upon the broad discretion conferred by s.45(1), but as examples of circumstances which will usually be treated as justifying the grant of leave. It will rarely, if ever, be appropriate to grant leave unless an arguable case of appealable error is demonstrated. This is so simply because an appeal cannot succeed in the absence of appealable error.” 14 [62] For the reasons we have given we are not persuaded any of these grounds raise matters warranting, in the public interest or otherwise, the grant of leave to appeal. BY THE COMMISSION: SENIOR DEPUTY PRESIDENT Appearances: J Forbes, of counsel, for Swire Cold Storage Pty Ltd. B Johnson for the Transport Workers’ Union of Australia. Printed by authority of the Commonwealth Government Printer <Price code G> ANNEXURE A Relevant Clauses of Swire Cold Storage Pty Ltd (Victorian Transport Workers) Agreement 2005 12. TERMINATION OF EMPLOYMENT 12.1 Notice Of Termination By Employer 12.1.1 In order to terminate the employment of an employee the employer shall give to the employee the following notice: Period of continuous service Period of notice 1 year or less 1 week 1 year and up to the completion of 3 years 2 weeks 3 years and up to the completion of 5 years 3 weeks 5 years and over 4 weeks 12.1.2 In addition to the notice provided in clause 12.1.1, employees over 45 years of age at the time of the giving of the notice with not less than two years continuous service, shall be entitled to an additional week's notice. 12.1.3 Payment in lieu of the notice prescribed in clauses 12.1.1 and if applicable 12.1.2 shall be made if the appropriate notice period is not given. Provided that employment may be terminated by part of the period of notice specified and providing part payment in lieu thereof. 12.1.4 In calculating any payment in lieu of notice the wages an employee would have received in respect of the ordinary time he or she would have worked during the period of notice had his or her employment not been terminated shall be used. … 13. REDUNDANCY 13.1 Eligible Redundancy 13.1.1 Occurs where an employer has made a definite decision that the employer no longer wishes the job the employee has been doing done by anyone and this is not due to the ordinary and customary turnover of labour, and that decision leads to the termination of employment of the employee. 13.1.2 If Swire Cold Storage moves their Laverton and or Lyndhurst depot a distance greater than 15 kilometres (the way the crow flies) the employees are entitled to voluntary redundancy. 13.1.3 Clause 13.1.2 shall not apply to any employees who commence employment with Swire Cold Storage on or after the date of commencement of this agreement, until 1 July 2007. After that date the clause needs to be renegotiated. 13.2 Transfer To Lower Paid Duties Where an employee is transferred to lower paid duties for reasons set out in clause 13.1 the employee shall be entitled to the same period of notice of transfer as he or she would have been entitled to if his or her employment had been terminated, and the employer may at the employer’s option make payment in lieu thereof of an amount equal to the difference between the former ordinary time rate of pay and the new lower ordinary time rate for the number of weeks of notice still owing. 13.3 Severance Pay 13.3.1 Severance Payment: 5 (Five) weeks pay for each full year of permanent service up to a maximum of 80 weeks. In this paragraph weeks rate of pay means the current Company rate for level 4 and level 6 drivers, plus shift penalties where applicable but devoid of any allowances. 13.3.2 Notice of Termination: 5 (Five) weeks pay (weeks pay as per Point 1) in lieu for each employee. 13.3.3 Long Service Leave: Pro-rata payments for employees with more than two (2) years service as permanent employment. 13.3.4 Sick Leave: Accruals to be paid out to a maximum of 40 days. 13.3.5 Annual Leave All Annual Leave payment will include 17.5% loading. 13.3.6 Week’s pay means the ordinary time rate of pay for the employee concerned. 13.3.7 Provided that the severance payment shall not exceed the amount the employee would have earned if employment with the employer had proceeded to the employee’s normal retirement date. 13.4 Employee Leaving During Notice An employee whose employment is terminated for reasons set out in clause 13.1 may terminate his or her employment during the period of notice and, if so, shall be entitled to the same benefits and payments under this clause had he or she remained with the employer until the expiry of such notice. Provided that in such circumstances the employee shall not be entitled to payment in lieu of notice. 13.5 Time Off During Notice Period 13.5.1 During the period of notice of termination given by the employer an employee shall be allowed up to one day’s time off without loss of pay during each week of notice for the purpose of seeking other employment. 13.5.2 If the employee has been allowed paid leave for more than one day during the notice period for the purpose of seeking other employment, the employee shall, at the request of the employer, be required to produce proof of attendance at an interview or he or she shall not receive payment for the time absent. For this purpose a statutory declaration will be sufficient. … 13.9 Selection Of Redundant Employees: Where possible retrenchments will be on a voluntary basis, however the FUTURE REQUIREMENTS of the Company will remain the major criteria for selection of employees to be selected for retrenchment such selection will remain entirely the responsibility of the Company. Individual requests for redundancy will be given additional attention together with consideration for workforce re-training. Appropriate award provisions of the Transport Workers Award 1998 shall be applied wherever appropriate and not inconsistent with other sections of this agreement. … 18. ACCIDENT MAKE-UP PAYMENT/INCOME PROTECTION 18.1 This clause shall apply to all employees covered by this award, and it shall apply only in respect of incapacity which results from an injury received on or after the date of operation. 18.2 The circumstances under which an employee shall qualify for accident make-up payment shall be as follows: 18.3 (i) Swire Cold Storage will provide WorkCover top-up/Safety net insurance. Transport employees will contribute $12.50 per week pre tax or pro-rata for part-time employees. This provision will be capped at 1.2% of total remuneration. Should premiums exceed 1.2% the difference will be absorbed from the next scheduled wage increase. (ii) Swire Cold Storage will keep an employee’s pre-injury/illness position open for a period of 12 months only. (iii) Any employee wishing to withdraw from the coverage can do so after formally writing to the Company indicating that you no longer wish to be covered by the income protection insurance. Upon doing so the dollar contribution will remain in your weekly pay- … MEMORANDUM OF UNDERSTANDING This Memorandum of Understanding has been negotiated between Swire Cold Storage Pty Ltd and the Transport Workers Union of Australia, as part of the certification process of the Clelands Pty Ltd (1999) Enterprise Agreement. The Memorandum of Understanding is intended by the parties to have the same effect and force as if it was part of the Certified Enterprise Agreement. 1. RATES OF PAY 1.1 An adult employee in the classifications listed shall be paid for service the minimum classification rate. Effective July 1, 2005 Effective July 1, 2006 Effective July 1, 2007 Grade 4 18.1297 19.0362 19.9880 Grade 6 18.8362 19.7780 20.7669 Grade 7 19.0544 20.0071 21.0075 Grade 8 19.8114 20.8019 21.8420 Year 1 Date of signing Year 2 12 months from date of signing Year 3 24 months from date of signing 1 2.6% base wage increase 2.6% base wage increase 2.6% base wage increase 2 1% for introduction of technology including GPS plus 1% for introduction of technology including GPS plus 1% for introduction of technology including GPS plus 3 1.4% for productivity improvements to be introduced over the next 12 months 1.4% for productivity improvements to be introduced over the next 12 months 1.4% for productivity improvements to be introduced over the next 12 months Total 5% 5% 5% NB: In regard to the 1.4% increase for productivity improvements; The TWU and its SCS members fully support and endorse the immediate creation of a working party of SCS Transport management and a representative group from the Drivers to review all facets of the Victorian transport operations with a view to identify, develop, implement and measure opportunities and initiatives to improve efficiencies and reduce costs. 1.2 An amount of $40.50 will be paid weekly to full time employees with $12.50 being sacrificed to cover accident make up premium payment referred to in Clause 18.3. 1.3 A 10 hour day is constituted by 8 hours regular, 2 hours at time and a half and one tea money. 60 hour group comprises one day with 2 hours at time and a half and 8 hours at double time. 1.4 If a 60 hr per week employee has worked an amount of hours for the week that will have his total paid time greater than 72 hours if the employee was to work the full 6th shift, the employee must cease work at 72 hours and be paid for the remainder of the 10 hour 6th shift at ordinary time rates listed in Clause 1.1. 2. That Swire Cold Storage Pty Ltd and the Transport Workers Union of Australia and its members employed as Drivers by Swire Cold Storage, agree that only the following specified yard agreements will continue to apply to the operations of the Company during the life of the Agreement: * The Company undertakes regular servicing of its vehicles, cabin air conditioning units, to ensure driver comfort and safety. Drivers for their part, will comply with the operating instructions for cabin air conditioning units and will report any defect units in accordance with Company policy. * The Company shall continue to select Drivers for scheduled Country deliveries from the Country Driver roster. * The Company will try to ensure that Drivers are allocated a regular vehicle to perform their assigned work. Exceptions to this policy may occur from time to time due to unforeseen vehicle breakdowns, regular vehicle servicing requirements or other operational requirements. * The Company will continue to ensure that only suitable endorsed and qualified Drivers, who have been employed as Drivers, shall be permitted to operate its vehicle fleet. * The Company will not permit Sub Contractors to make deliveries which forms part of the regular work schedule of employee Drivers, unless exceptional circumstances apply and that the Supervisor has informed the TWU delegate of those circumstances. * Exceptional circumstances being when all company avenues have been exhausted to ensure customers delivery windows are met. ANNEXURE B 1 Australian Workers Union and Tristar Steering and Suspension Australia Ltd [2007] AIRCFB 273 and National Union of Workers and Tontine Fibres (A Division of United Bonded Fabrics Pty Ltd [2007] AIRCFB 1016, and Qantas Airways Ltd and Transport Workers’ Union of Australia [2007] AIRCFB 971 . 2 [2007] AIRC 840 at paragraph 31. 3 [2007] AIRC 928 at paragraphs 52 and 58. 4 Ibid at paragraph 65. 5 Ibid at paragraph 63. 6 In fact in its original form it read “ 5 (Five) weeks notice ...”. 7 (1996) 66 IR 182. 8 Ibid at 184. 9 (2006) FCAFC 18. 10 Ibid at 26. 11 (1993) 40 FCR 511 at 518. 12 (1982) HCA 24. 13 These observations relate only to Full-time employees. Additional considerations may arise in relation to part-time employees. 14 Wan v Australian Industrial Relations Commission [2001] FCA 1803 at paragraph 30 following Coal and Allied Operations Pty Ltd v Australian Industrial Relations Commission [2000] HCA 47.