INTERPRETATION OF VARIOUS INDUSTRIAL AGREEMENTS WESTERN AUSTRALIAN INDUSTRIAL RELATIONS COMMISSION CITATION : 2017 WAIRC 00793 CORAM :Commissioner D J Matthews HEARD : Tuesday, 6 June 2017, Tuesday, 22 August 2017 DELIVERED : FRIDAY, 8 September 2017 FILE NO. : APPL 17 OF 2017 BETWEEN : The Public Transport Authority of Western Australia Applicant AND Australian Rail, Tram and Bus Industry Union of Employees, Western Australian Branch Respondent CatchWords : Application for true interpretation of clause of industrial agreements - Respondent applied for dismissal pursuant to section 27 (1)(a) Industrial Relations Act 1979 - Respondent's application dismissed - Dispute relates to meaning of word "required" - Principles of interpretation of industrial instruments discussed and applied - "Required" interpreted Legislation : Financial Management Act 2006 Industrial Relations Act 1979 Minimum Conditions of Employment Act 1993 Result : Agreements interpreted Representation: Counsel: Applicant : Mr D Anderson Respondent : Mr A Stewart Solicitors: Applicant : State Solicitor’s Office Respondent : Chapmans Barristers & Solicitors Cases referred to in reasons: Attorney General v Gray [1977] 1 NSWLR 406 Board of Trustees of the State Public Sector Superannuation Scheme v Welsh [2000] QSC 335 Commonwealth of Australia v Hamilton [1992] 2 Qd R. 257 Director General, Department of Education v United Voice WA [2013] WASCA 287 NSW Nurses and Midwives Association v Western Sydney Local Health District (2016) 257 IR 82 Re Harrison; Ex parte Hames [2015] WASC 247 Robe River Iron Associates v Amalgamated Metal Workers and Shipwrights Union of Western Australia (1987) 67 WAIG 1097 Technomin Australia Pty Ltd v Xstrata Nickel Australasia Operations Pty Ltd [2014] WASCA 164 Case(s) also cited: Australian Liquor, Hospitality and Miscellaneous Union, Miscellaneous Workers Divisions, Western Australian Branch v Board of Management, Fremantle Hospital and Hospital Service (Unreported, Complaint No 87 of 1997, delivered 17 November 1997) Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337 David Securities Pty Limited v Commonwealth Bank of Australia (1992) 175 CLR 353 Director General of Department of Justice v Civil Service Association (2004) 85 WAIG 629 Henry v Henry (1996) 185 CLR 571 Ian MacFarlane v Halperin Fleming & Meertens (2001) 82 WAIG 150 Kucks v CSR Ltd (1996) 66 IR 182 O’Sullivan v Farrer (1989) 168 CLR 210 Rogers v The Queen (1994) 181 CLR 256 The Australian Rail, Tram and Bus Industry Union of Employees, West Australian Branch v Public Transport Authority of Western Australia (2014) 94 WAIG 787 The Australian Rail, Tram and Bus Industry Union of Employees, West Australian Branch v Public Transport Authority of Western Australia (2015) 95 WAIG 1503 === REASONS FOR DECISION === ¶1 The applicant applies to have me declare the true interpretation of the word “required” in the following clauses (all of which are in relevantly similar terms): Clause 4.2.6 of the Public Transport Authority/ARTBIU (Transit Officers) Industrial Agreement 2015; Clause 4.3.6 of the Public Transport Authority/ARTBIU (Transwa) Industrial Agreement 2016; Clause 4.4.3 of the Public Transport Authority Railway Employees (Transperth Train Operations) Industrial Agreement 2014; and Clause 4.3.6 of the Public Transport Authority Railway Employees (Network and Infrastructure) Industrial Agreement 2014. ¶2 The respondent argues that I should not act under section 46 Industrial Relations Act 1979, and should dismiss the application pursuant to section 27(1)(a) Industrial Relations Act 1979, because there are proceedings before the industrial magistrate’s court which will require that court to interpret one of the clauses set out above, namely clause 4.4.3 Public Transport Authority Railway Employees (Transperth Train Operations) Industrial Agreement 2014, and therefore the current proceedings are: not necessary or desirable in the public interest (with reference being made to section 27(1)(a)(ii) Industrial Relations Act 1979); an abuse of process or vexatious (with reference being made to section 27(1)(a)(iv) Industrial Relations Act 1979). ¶3 I have been provided with a copy of the initiating document in the industrial magistrate’s court proceedings, being the Originating Claim in M 202/2016 filed 4 December 2016. ¶4 The claim pleads that the Public Transport Authority “formed the view” that the claimant’s member had been overpaid and refers to “the alleged overpayment.” ¶5 The claim pleads that the Public Transport Authority recovered the “overpaid [amount] by deducting [the claimant’s member’s] pay on various occasions.” ¶6 The claim pleads that the deductions were “not authorised.” ¶7 The claim pleads that the Public Transport Authority is in breach of section 17C(1) Minimum Conditions of Employment Act 1993 because the claimant’s member was not, when the deductions were made, paid his wages in full. ¶8 There is a “defence” to a claim of such a breach being that the deductions were authorised in one of the ways set out in section 17D(1) Minimum Conditions of Employment Act 1993. ¶9 The claim pleads that “the deductions were not authorised under section 17D(1) Minimum Conditions of Employment Act 1993.” ¶10 It is not entirely clear from the claim whether the claimant disputes the overpayment or whether it confines itself to a complaint about the method of recovery it alleges the Public Transport Authority used. Submissions made before me did not clarify this. ¶11 On balance, the pleading that the Public Transport Authority “formed the view” that the claimant’s member had been overpaid, and the claim’s reference to “the alleged overpayment”, inclines me to the view that the claimant has raised by its pleadings the matter of whether or not there was an overpayment. Certainly there is no positive pleading admitting there was an overpayment. ¶12 I consider it possible that the industrial magistrate’s court in M 202/2016 may turn its mind to whether the claimant’s member was “required to repay” an amount to the Public Transport Authority. ¶13 I will decide the section 27(1)(a) Industrial Relations Act 1979 application against that background. ¶14 The respondent says, firstly, that it is not necessary or desirable for the Western Australian Industrial Relations Commission to hear and determine the application because the industrial magistrate’s court will interpret the word “required” in its determination of the claim before it and, if the current application proceeds to determination: this may undermine public confidence in the administration of justice because there is the potential for the Western Australian Industrial Relations Commission and industrial magistrate’s court to “deliver conflicting constructions” of the word; and resources, both public and private, will be wasted if there are two proceedings to determine the same thing. ¶15 The respondent also says in relation to 27(1)(a)(ii) Industrial Relations Act 1979 that: if the current proceedings are not determined there will be no prejudice to the applicant because it will still have the word “required” interpreted by the industrial magistrate’s court. ¶16 In relation to these arguments I find: There is no possibility of “conflicting constructions.” The industrial magistrate’s court will, pursuant to section 46(3) Industrial Relations Act 1979, be bound by any declaration I make under section 46 Industrial Relations Act 1979 as to the true interpretation of the word “required”; There will be no waste of resources if a binding declaration of the true interpretation of the word “required” is made by me. That matter will not have to be litigated before the industrial magistrate’s court, my declaration being binding upon it; and It would only be if I was upholding the application on one of the first two arguments above that I might need to comfort myself that there is no prejudice to the applicant resulting from such an outcome. ¶17 Secondly, the respondent says that the current application is an “abuse of process or vexatious” because: it is oppressive to the respondent, the claimant before the industrial magistrate’s court, to have it expend its resources on the present application when the matter is before, and will be determined by, the industrial magistrate’s court proceedings; and the application creates the potential for conflicting constructions which would bring the administration of justice into disrepute. ¶18 I find that the current proceedings were not in prospect, nor have they ended up being in the result, oppressive in the sense the respondent argues. ¶19 I note the respondent did not apply to have the application under section 27 Industrial Relations Act 1979 heard and determined as a preliminary matter because the substantial proceedings were going to be lengthy and expensive. ¶20 As it turned out the proceedings were neither lengthy nor complex. No evidence was brought and short argument only, both written and oral, was required. ¶21 I have dealt above with the argument that the administration of justice might be brought into disrepute if the current proceedings continue to determination on the basis of there being the potential for conflicting constructions. There is no such potential. ¶22 I should add for the sake of completeness that whether I am right or wrong about the effect of section 46 Industrial Relations Act 1979, and its impact on the section 27 Industrial Relations Act 1979 application, the presence of section 46(3) Industrial Relations Act 1979 would, at face value at least, generally rule out any suggestion that a party has an “illegitimate purpose” in seeking an interpretation, even if there are proceedings on foot which might deal with a provision intended to be interpreted. ¶23 I turn then to interpret the word “required” in the relevant clauses. ¶24 I set out in full, by way of example, clause 4.4.3 of the Public Transport Authority Railway Employees (Transperth Train Operations) Industrial Agreement 2014 which provides as follows: “Overpayments: If an employee is required to repay an amount to the Employer, the amount to be repaid from any fortnightly pay will not exceed 10% of the employee’s gross rostered pay unless another arrangement has been agreed to between the Employer and the employee. The repayment may be for, but not limited to, overpayment of Base Wage Rate, additional shifts, or allowances.” ¶25 The principles to be applied in interpreting industrial agreements are well known and uncontroversial. They may be found in cases such as Robe River Iron Associates v Amalgamated Metal Workers and Shipwrights Union of Western Australia (1987) 67 WAIG 1097, Director General, Department of Education v United Voice WA [2013] WASCA 287, Technomin Australia Pty Ltd v Xstrata Nickel Australasia Operations Pty Ltd [2014] WASCA 164 and Re Harrison; Ex parte Hames [2015] WASC 247. ¶26 Neither party asked me to have regard to evidence of the circumstances surrounding the making of the relevant industrial agreements or to the background knowledge of the parties at the time the industrial agreements were made. ¶27 I was asked to interpret the word “required” on the basis that its intended meaning emerges from consideration of the word in the context of a reading of the entire industrial agreement and having regard to “the law”. ¶28 My reference to “the law” here is a reference to what the parties say are matters of legal precedent and legislation which operate to inform or limit the meaning of the word “require”. ¶29 Essentially it is said, by both parties, that the parties could not have intended for the word “require” to have a meaning which would offend established legal precedent or legislation or, put another way, I should interpret the word “require” so that, whatever the parties intended by it, it is given a meaning, if possible, that does not offend established legal precedent or legislation. ¶30 I consider that an approach to interpretation that has me ensuring that the industrial agreement does not offend “the law” in this sense is consistent with the general principle for construction that words in an industrial agreement should be given the most appropriate meaning they can legitimately bear. ¶31 A meaning that offends legislation or established binding precedent would, prima facie, not be legitimate. I suppose that an industrial agreement could legitimately ameliorate or change the effect of the application of a legal precedent to a given situation but I add that such an intention and effect would need to be clearly stated and understood. ¶32 So then, what is the most appropriate meaning the word “require” can bear in the current context? ¶33 The first thing that may be said is that the relevant clauses do not provide any insight into the meaning of the word “required” contained within them. The relevant clauses relate to a method of repayment, or condition a method of repayment, “if an employee is required to repay an amount.” ¶34 It is clear that the “requirement” arises elsewhere. ¶35 The second thing that may be said is that a reading of the entire industrial agreements reveals they do not contain definitions of “required to repay” or express explanations of how the “requirement” might or does arise. ¶36 The applicant suggested that the meaning may be implied by a reading of the entire industrial agreements and, in particular, the “dispute settlement” and “wage shortfall” clauses which are in relevantly identical terms in each industrial agreement. ¶37 I do not find those clauses helpful in interpreting the term “required”. ¶38 The dispute settlement clauses provide for a process for dealing with “questions, disputes or difficulties arising under the agreement or in the course of the employment of employees covered by the agreement.” ¶39 Such provisions are required to be included in industrial agreements by section 48A Industrial Relations Act 1979. ¶40 Section 48A (1a) Industrial Relations Act 1979 provides as follows: “The procedures referred to in subsection (1) shall provide for the persons involved in the question, dispute or difficulty to confer among themselves and make reasonable attempts to resolve questions, disputes or difficulties before taking those matters to the Commission.” ¶41 The relevant clauses provide for the parties to “confer among themselves and make reasonable attempts to resolve” the matter and further provide that “if no agreement is reached either party may refer the dispute to the Western Australian Industrial Relations Commission for conciliation and/or determination.” ¶42 Even if an employee may attempt to deal with an allegation that they have been overpaid through the relevant dispute settlement clauses I find that this is neutral in relation to the interpretation of the meaning of the word “required” in the relevant clauses. I see no inevitable intersection between the two clauses. ¶43 Resort to the dispute settlement clauses may change nothing. The dispute may not be resolved by the parties and remain on foot. The Western Australian Industrial Relations Commission may or may not have jurisdiction to resolve the dispute (and it is questionable whether it could make orders in relation to a matter of overpayment) and even if it does any “requirement” would arise out of the application of the Industrial Relations Act 1979 and not out of the industrial agreements. ¶44 The “wage shortfall” clauses also do not assist. ¶45 I set out in full, by way of example, clause 4.4.4 of the Public Transport Authority Railway Employees (Transperth Train Operations) Industrial Agreement 2014 which provides as follows: “4.4.4 Underpayments: Where the Employer is informed by an employee that the employee has not been paid the full amount of remuneration due to the employee in a fortnightly pay the Employer shall quickly investigate the matter. Where an underpayment is confirmed and determined to be the fault of the Employer, the Employer shall pay the shortfall to the employee in the next fortnightly pay.” ¶46 That the industrial agreements oblige the Public Transport Authority to investigate allegations of underpayments and the Public Transport Authority must, if it determines there is an underpayment and that it is at fault, pay the employee the shortfall in their next pay tells me nothing about the relevant clauses. ¶47 If the argument is that because the employer can unilaterally determine whether an employee has been underpaid or not this implies the employer can unilaterally determine whether an employee has been overpaid or not this must be rejected as a matter of logic. ¶48 If the argument, which I think was that put, is that the employer can unilaterally decide whether or not there has been an underpayment or an overpayment, subject to exhaustion of the dispute settlement clauses in both instances, and thus it can be said the “requirement” in the relevant clauses may arise out of the dispute settlement clauses, I am returned to the consideration of the dispute settlement clauses that I have already undertaken and which did not assist me. ¶49 Unassisted in my task by a reading of the entire industrial agreements I return to try and work out from where the “requirement” referred to in the relevant clauses might, in the reasonable contemplation of the parties when the industrial agreements were made, arise. ¶50 The applicant suggested that the requirement to repay an overpayment may come from established and binding legal authorities, properly understood. ¶51 It is obvious that such an argument does not go to what the parties actually intended. It is an argument which is underpinned by the assertion that I should assume the parties intended to make the industrial agreements consonantly with established binding authorities or, put another way, did not intend, without making this clear, to make industrial agreements which conflict with such authorities. ¶52 So, the applicant says, if there is authority which is clear and incontestable to the effect that overpayments to employees by an employer such as the applicant must be repaid it is safe and appropriate to find that this is the “requirement” referred to in the relevant clauses, even if there is no evidence that the drafters of the industrial agreements, who would of course not necessarily be lawyers, knew of the authority or had it in mind when they drafted the clause. ¶53 I think it is tolerably clear from the wording of the relevant clause that, if there is such authority, the drafters were not aware of it and did not have it in mind when they drafted the clauses. ¶54 I say this because if there was such an authority, accepted by the parties to be binding in the way it would need to be for this construction to work, there would be no need to include the words “if there is a requirement.” ¶55 If the effect of the authority was that wage overpayments must be repaid there would be no need to include words to the effect “in the case that an overpayment must be repaid.” A case where an overpayment would not have to be repaid would never arise. ¶56 In any event, I am far from convinced that the parties agreed on the relevant clauses intending to act consonantly with a binding authority or should be assumed to have made the relevant clauses intending to act consonantly with a binding authority. ¶57 The legal authority the applicant refers to is Attorney General v Gray [1977] 1 NSWLR 406. ¶58 In that case it was held that any payment out of the consolidated fund without parliamentary authority is illegal and ultra vires and, if traceable, must be recovered by the government and a court is obliged to make an order for that recovery. ¶59 It was not put to me that, as a matter of course, it should be accepted that in every case where the Public Transport Authority overpays an employee, or says that it has overpaid an employee, without more, the overpayment is illegal in the sense the overpayment in Attorney General v Gray [1977] 1 NSWLR 406 was illegal. ¶60 The applicant concedes, I think, and if so appropriately, that firstly it cannot be assumed that every allegation of an overpayment establishes an overpayment as a fact and that the facts that might trigger the relevant clauses will not be so clear in every case of overpayment that the overpayment is illegal and is “required” to be repaid because of the applicability of Attorney General v Gray [1977] 1 NSWLR 406. ¶61 Determination of whether an overpayment occurred as a fact may be difficult if, as the relevant clauses say, the payment of shift and other allowances may be involved. ¶62 I note, without dealing with the cases in detail, that it is plain the application and effect of Attorney General v Gray [1977] 1 NSWLR 406 are on occasions contentious matters and sometimes decisions in these contested matters seem to detract from or limit the principle that comes from Attorney General v Gray [1977] 1 NSWLR 406. ¶63 For instance, in Commonwealth of Australia v Hamilton [1992] 2 Qd R 257 the Full Court of the Queensland Supreme Court found that the principle did not apply if someone had fraudulently induced a government authority to make a payment. The Court said that by the person’s fraud they had brought themself within the necessary Parliamentary authorisation. ¶64 In relation to an overpayment to an employee based on fraud the Public Transport Authority may not be able to rely on the principle in Attorney General v Gray [1977] 1 NSWLR 406. The relevant clauses are not confined to mistaken overpayments and the potential for overpayments to occur in circumstances other than mistake is not great but is certainly enhanced when shift and other allowances are included. ¶65 Another example is NSW Nurses and Midwives Association v Western Sydney Local Health District (2016) 257 IR 82 where the New South Wales Industrial Relations Commission distinguished Attorney General v Gray [1977] 1 NSWLR 406 because, on that Commission’s interpretation, the principle required identification of a specific statutory provision breached and that payments above those provided for in minimum rate awards were not caught by the principle because it was not “illegal” to pay a greater sum than such an award prescribed. ¶66 I say nothing about the correctness or otherwise of those cases but they support me in my view that the parties cannot have intended, or be assumed on public policy grounds to have intended, to make a clause that accepts that Attorney General v Gray [1977] 1 NSWLR 406 has a certain application and effect in every case of alleged overpayment. ¶67 I was not addressed on the implications, if any, of the Financial Management Act 2006. ¶68 So against the background of my above findings I need to now answer the question of what “required” in the phrase “required to repay” in the relevant clauses means. ¶69 Unassisted in the ways offered I have dealt with above I must return to the start point being the ordinary meaning of the word. ¶70 The Macquarie Dictionary (3rd ed) has several possible definitions as follows: “to call on authoritatively, order or enjoin (a person etc) to do something” “to ask for authoritatively or imperatively; demand” “to call for or exact as obligatory” “to place under an obligation or necessity” “to make demand; impose obligation or need” ¶71 The respondent says that whatever “required to repay” means it cannot mean that the employer can unilaterally, and without more than its own determination, order or demand an employee to pay it money. ¶72 That can be accepted at face value as correct and I do not think the applicant would say otherwise. ¶73 The applicant suggests the empowerment to do so may come from other sources, either from the outcome of the dispute resolution procedure, or an assumed outcome from an employee’s failure to invoke the procedure, or from case law, but not that the employer may unilaterally and without more order payment. I have rejected those other sources as being sound foundations for a requirement. ¶74 The respondent also refers to section 17C Minimum Conditions of Employment Act 1993, which provides that an employee is entitled to be paid his or her pay in full, as informing the relevant meaning to be applied. The respondent says a construction that means the employer can, without more, call on or order or ask for or demand an employee to pay it money offends section 17C Minimum Conditions of Employment Act 1993. ¶75 I think section 17C Minimum Conditions of Employment Act 1993 is a neutral consideration in determining the true interpretation of the phrase “required to repay.” ¶76 An employer could, if empowered to do so, require an employee to repay an amount to the employer and still pay the employee his or her pay in full. ¶77 The common themes of the dictionary definitions of “require” are that of “obligation” and “authority.” For a requirement to arise there must be an “obligation” on the person to do the thing such that there is an “authoritative” call for the thing to be done. ¶78 If that obligation does not arise under the industrial agreement, and I have found it does not, and does not arise as a matter of course from the common law, and I have found it does not, then from where can the obligation arise. ¶79 Who or what can place an employee under an obligation to pay money to an employer? ¶80 The obvious and most appropriate answers are that a court can impose such an obligation or an employee himself or herself can place themselves under such an obligation. Legislation may also place an employee under such an obligation, although I am not aware of any examples of this and none were brought to my attention. ¶81 In my view the meaning of the term “if an employee is required to repay” is “if an employee is under an obligation to repay” and that such an obligation may arise as a result of, at least, a court order, legislation or an agreement. ¶82 The relevant clauses are nothing like, say, clause 13 of the Public Sector and Government Officers General Agreement 2014. Many of the Public Transport Authority’s arguments, with respect, seem to relate to a clause such as that. ¶83 I will make an order under section 46(2) Industrial Relations Act 1979 if requested to do so.