FEDERAL COURT OF AUSTRALIA

Australian Rail, Tram and Bus Industry Union v Metro Trains Melbourne Pty Ltd [2017] FCA 1494

ORDERS

THE COURT ORDERS THAT:

1.    The application be dismissed.

Note:    Entry of orders is dealt with in Rule 39.32 of the Federal Court Rules 2011.

REASONS FOR JUDGMENT

O’CALLAGHAN J:

introduction

1    The Victorian Government is currently undertaking a project to remove 50 rail level crossings. Metro Trains Melbourne Pty Ltd (the respondent or Metro) is also adding to its rail services, to meet growing demand. The removal of the level crossings means that existing drivers need additional driver training, which in turn means that other drivers are needed to do their work in the meantime. For both those reasons, the respondent needs to employ more train drivers. To that end, in early 2017, it commenced a campaign to recruit over 150 additional full-time drivers. Many of the candidates who have been employed are recruits who have prior experience driving trains for other rail organisations. They are referred to as “conversion drivers”. Other candidates have no prior experience driving trains. This proceeding concerns only the conversion drivers.

the proceeding

2    The Australian Rail, Tram and Bus Industry Union (the applicant or the RTBU) contends that the training provided to the conversion drivers is not in accordance with the relevant provisions of the Metro Trains Melbourne Pty Ltd Rail Operations Enterprise Agreement 2015-2019 (the enterprise agreement). It seeks the following relief:

1.    An order declaring that, on the proper construction, clauses 3(a) and (b) of Schedule 1 to the Metro Trains Melbourne Pty Ltd Rail Operations Enterprise Agreement 2015-2019 (the Enterprise Agreement) require the Respondent to:

(a)    provide all individuals with prior train driving qualifications and/or experience at railway enterprises other than the Respondent (conversion drivers) with 41 to 50 weeks of theoretical and practicing training, including a minimum of 250 hours of train driving with an on-the-job-trainer (minimum training), before progressing them to a Qualified Driver Level 1 or any higher classification within the meaning in clause 4.1 of the Enterprise Agreement; and

(b)    limit the minimum training provided to a particular conversion driver either to the Metro North Operating Group or to the Metro South Operating Group within the meaning in clause 5 of the Schedule 1 to the Enterprise Agreement.

2.    Further and/or alternatively, an order declaring that the Respondent proposes to contravene s 50 of the Fair Work Act 2009 (Cth) by reason of its proposed breaches of cl 3 of Schedule 1 to the Enterprise Agreement.

3    The applicant had originally sought an order imposing pecuniary penalties on the respondent, payable to the applicant, and an order in the nature of a permanent injunction relevantly restraining the respondent from authorising conversion drivers to engage in any unsupervised train driving, or to conduct any unsupervised train movements, on any Metro network unless the conversion drivers had completed the relevant minimum 41 weeks of theoretical and practical train driver training. At the commencement of this hearing, however, the applicant abandoned those claims and limited the relief sought to that set out at [2] above.

4    The respondent plans to graduate a number of conversion drivers later this month, so that they can qualify and commence to drive trains on its rail network.

The enterprise agreement

5    The enterprise agreement, which covers the respondent in respect of all of its employees, including train drivers and trainee drivers, under the heading “Commitments By The Parties and Project Facilitation Payment” records the following:

1.8.1    The Parties to the Agreement are committed to supporting the implementation of Company and Government initiatives including:

(a)     “Operating Groups” being the separation of the network into a central section and two (2) stand-alone sections (Metro North and Metro South) with each containing end-to-end lines, separate train fleets, maintenance and stabling facilities. Driver operations will be in accordance with clause 5(a) of Schedule 1.

(b)     “HomeSafe/Night Network” being the twenty four (24) hour Friday and Saturday night services as announced by the Victorian Government.

(c)     “Rail Construction and Renewals Projects” being any rail construction and renewals projects, including the Level Crossing Removals project announced by the Victorian Government.

1.8.2    In consideration for the commitments made at 1.8.1 (a), (b) and (c) by the Employees and the Unions, the Company will make a three percent (3%) one off Project Facilitation Payment (PF Payment) to Employees who are engaged by the Company at the commencement of the Agreement, following the successful commencement of the HomeSafe/Night Network Trial and full implementation of efficiencies and associated rosters including those to reflect the separation of the three (3) groups (North, South and Central), the decentralisation of FSS for all locomotive grade classifications and the full implementation of ‘New Rules’ associated with the creation of ‘Weekly Master Rotations’ and ‘Day of Operations’ shift management, as described in Schedule 1 of the Agreement …

6    Clauses 1.9.1 and 1.9.2 provide as follows:

1.9.1    The Company will only require, allow or permit the driving of trains or conducting of other train movements (in all environments, including on the mainline and in depot and maintenance environments) to be undertaken by employees who have completed, or are training to complete, the Metro Driver Training Scheme or recognised equivalent (SPOT qualification and current conversancy) and who are or who were previously, employed in the Locomotive Driving Grades set out in the Agreement. For the avoidance of doubt, this does not apply to approved third party operators, which operate freight operations or country passenger services on the Melbourne Metropolitan Network.

1.9.2    Other than in relation to Train Drivers (being those who have completed, or are training to complete, the Metro Driver Training Scheme or its recognised equivalent (SPOT qualification and current conversancy) and who are employed in the Locomotive Driving Grades set out in the Agreement), the Company will train any employees in relation to the driving of trains, or conducting other train movements on the Melbourne Metropolitan Network. Without limitation, the ‘Rolling Stock Train Movement Training Scheme’ will immediately cease.

7    Section 4 of the enterprise agreement is headed “Employment Conditions: Drivers”. It “applies to the Driver Grades as specified in clause 4.1”. Clause 4.1 contains the following definitions:

8    Schedule 1 to the enterprise agreement is headed “Drivers rostering, training and work practice changes”. It “applies to the driver grades specified in clause 4.1 …”. The critical provisions for the purposes of this proceeding are found under the heading “Metro Driver Training Scheme”. Clauses 3(a), (b), (c), (d) and (e) provide as follows:

3.    Metro Driver Training Scheme

(a)     Train Drivers will undertake the Metro Driver Training Scheme to progress to Qualified Driver.

(b)     The Metro Driver Training scheme will consist of both theory and practical in-field training for Metro South or Metro North. It will consist of between forty one (41) to fifty (50) weeks of training, which will comprise of a minimum of two hundred and fifty (250) hours of practical driving with an On Job Trainer (OJT). A training needs analysis (TNA) will be completed for Employees to identify the appropriate competencies to transfer between the three (3) Operating Groups (North, South and Central).

(c)     The process of a TNA will also apply to any locomotive grade applicants from other rail enterprises.

(d)    A Trainee Driver will progress to the grade of Qualified Driver Level 1 once the two hundred and fifty (250) hours of practical training and the course is completed within the forty one (41) to fifty (50) week period, which includes the successful completion of the following:

i.    Certificate IV in Train Driving;

ii.    successful assessment of the relevant area of the Metropolitan Rail Network; and

iii.    a certificate of competency has been issued.

If due to no fault of the Trainee Driver, the criteria at 3 (d) (above) cannot be achieved within the forty one (41) to fifty (50) week period, the Trainee Driver will progress to a Qualified Driver Level 1 payment; only after fifty (50) weeks has elapsed, subject to subclause (g) below.

Summary of the applicant’s case

9    The applicant contends that, properly construed, the relevant provisions of the enterprise agreement mean that the respondent must provide to each conversion driver, regardless of the level of their previous experience driving trains for other rail organisations, the same minimum training required to be given to candidates who have never before driven a train, before progressing them to a Qualified Driver Level 1 (or any higher classification) within the meaning of cl 4.1 of the enterprise agreement, that is, between 41 to 50 weeks of training, which will comprise a minimum of 250 hours of train driving with an on-the-job trainer. The applicant also contends that each conversion driver’s training must be limited to driving either within the Metro North operating group (Metro North) or the Metro South operating group (Metro South), but not both.

Summary of the respondent’s case

10    The respondent contends, to the contrary, that the enterprise agreement provides, on its proper construction, that it may tailor the degree of training provided to conversion drivers, depending on the nature and extent of their prior experience. Indeed, the respondent contends that, because it is a Registered Training Organisation (RTO) within the meaning of the National Vocational Education and Training Regulator Act 2011 (Cth) (the VET Act), it is required to recognise such “prior learning”. The respondent also says that conversion drivers, during the period of their training, are permitted by the enterprise agreement to train on either or both of Metro North or Metro South.

The enterprise agreement applies to conversion drivers

11    The respondent faintly contended that the enterprise agreement does not apply to conversion drivers, but it self-evidently does. Counsel for the respondent, Mr Dalton, quite properly, said that he recognised the force in the submissions made by Mr Moore QC and Ms Levine, who appeared for the applicant, in that regard. As the applicant contended, conversion drivers are “trainee drivers” within the meaning of cl 4.1 of the enterprise agreement because they satisfy the definition of trainee driver, viz a driver “who has successfully completed, or is undertaking, all necessary theoretical training and evaluation and is authorised as proficient to perform the required driving duties with an On The Job Trainer (OJT)”. If the respondent’s submission were correct, and conversion drivers were not trainee drivers, then the whole of cl 4 of the enterprise agreement, which provides for detailed employment conditions, would not apply to conversion drivers, leaving them without the protections afforded by those terms. That would be absurd, as counsel submitted. The applicant’s submissions on this point are, with respect, clearly correct, as Mr Dalton recognised.

12    I proceed, accordingly, on the basis that the enterprise agreement applies to conversion drivers.

consideration

Training requirements for conversion drivers

13    The substantive question that separates the parties is a question of the proper construction of the enterprise agreement. The agreement does not expressly address the question whether conversion drivers must satisfy the identical training requirements as novice drivers. In those circumstances the question of the proper construction of the enterprise agreement in this case “turns upon the language of the particular agreement, understood in the light of its industrial context and purpose …”: Amcor Ltd v Construction, Forestry, Mining and Energy Union (2005) 222 CLR 241, 246 [2] per Gleeson CJ and McHugh J.

14    In Transport Workers’ Union of Australia v Linfox Australia Pty Ltd (2014) 318 ALR 54, 58-61 [30]-[35] Tracey J summarised the principles relevant to the proper construction of industrial instruments as follows:

[30]    In dealing with the construction of awards in Kucks v CSR Ltd (1996) 66 IR 182 at 184 (Kucks) Madgwick J observed that:

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.

[31]    This passage was quoted with approval by two members of the High Court in Amcor Ltd v Construction, Forestry, Mining and Energy Union (2005) 222 CLR 241 at 271 … per Kirby J, at 282–3 per Callinan J. Shortly afterwards these principles were restated by French J in City of Wanneroo v Australian Municipal, Administrative, Clerical and Services Union (2006) 153 IR 426 … at [57] :

[57]    It is of course necessary, in the construction of an award, to remember, as a contextual consideration, that it is an award under consideration. Its words must not be interpreted in a vacuum divorced from industrial realities — City of Wanneroo v Holmes (1989) 30 IR 362 at 378–9 and cases there cited. There is a long tradition of generous construction over a strictly literal approach where industrial awards are concerned — see eg George A Bond & Co Ltd (in liq) v McKenzie [1929] AR (NSW) 498 at 503–4 (Street J). It may be that this means no more than that courts and tribunals will not make too much of infelicitous expression in the drafting of an award nor be astute to discern absurdity or illogicality or apparent inconsistencies. But while fractured and illogical prose may be met by a generous and liberal approach to construction, I repeat what I said in City of Wanneroo v Holmes (at 380):

Awards, whether made by consent or otherwise, should make sense according to the basic conventions of the English language. They bind the parties on pain of pecuniary penalties.

[32]    In Australasian Meat Industry Employees Union v Coles Supermarkets Australia Pty Ltd (1998) 80 IR 208 at 212 Northrop J expressly agreed with what had been said by Madgwick J in Kucks and held that Madgwick J’s observations had even stronger application to certified agreements than they did to awards.

[33]    In my view, these principles have application to the construction of the instruments which are presently in dispute.

[34]    Guidance as to the construction of industrial instruments may also be obtained by reference to principles which courts apply to the construction of commercial contracts. Commercial contracts should, as Kirby J held in Pan Foods Company Importers & Distributors Pty Ltd v Australia and New Zealand Banking Group Ltd (2000) 170 ALR 579 … ‘be construed practically, so as to give effect to their presumed commercial purposes and so as not to defeat the achievement of such purposes by an excessively narrow and artificially restricted construction’. An interpretation which accords with business common sense will be preferred to one which does not: see Upper Hunter County District Council v Australian Chilling and Freezing Co Ltd (1968) 118 CLR 429 at 437.

[35]    In determining whether a commercial document imposes contractual obligations regard is had to the intention of the parties: would a reasonable person conclude that the person making the alleged binding promise intend to be contractually bound by that promise. In Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (2004) 219 CLR 165 … at [40] the High Court summarised the position as follows:

[40]    … It is not the subjective beliefs or understanding of the parties about their rights and liabilities that govern their contractual relations. What matters is what each party by words and conduct would have led a reasonable person in the position of the other party to believe … That, normally requires consideration not only of the text, but also of the surrounding circumstances known to the parties, and the purpose and object of the transaction.

15    Before turning to the question of construction, I need first to touch on the applicant’s submission that I should, in construing the enterprise agreement, have regard to evidence of “pre-agreement negotiations” between the parties with respect to the enterprise agreement. Ordinarily, I would have ruled on the question at the outset of the proceeding, but, because of the limited time available, the parties asked me, and I agreed, to defer consideration of the admissibility of the evidence until the giving of these reasons.

16    The evidence sought to be adduced by the applicant is contained in [10]-[55] of the affidavit of Mr Marotta sworn 10 October 2017 and the annexures referred to in those paragraphs. It comprises two arch lever folders. Ultimately, the applicant contended that some paragraphs of the affidavit were more important for its case than others, in particular those concerning the circumstances in which the words “or recognised equivalent (SPOT qualification and current conversancy)” came to be inserted in cll 1.9.1 and 1.9.2. I deal with those paragraphs later in these reasons. In my view, for the reasons I give below, none of the material about the negotiations is admissible, and I have had no regard to it in construing the enterprise agreement.

17    The applicant relied on the following written submissions about the proper construction of cl 3(a) of the enterprise agreement:

Express Terms of cl 3(a)

25.    The construction of cl 3 of Schedule 1 contended for by the [applicant] is supported by a textual reading of cl 3(a) of Schedule 1, which states that “Train Drivers will undertake the Metro Driver Training Scheme to progress to Qualified Driver” (emphasis added). The unqualified reference to “Train Drivers”, together with the mandatory phrase “will undertake” in relation to the Metro Driver Training Scheme (the MDTS) on its face extends the scope of application of cl 3 to all drivers seeking to become a Qualified Driver, without any carve-out for conversion drivers.

Relevant context: cll 1.9.1 and 1.9.2

26.    Further, cl 3 of Schedule 1 must also be construed in the context of cll 1.9.1 and 1.9.2 of the 2015 Agreement, the terms of which are set out at paragraphs 12(a)-(b) above.

27.    Read together, cll 1.9.1 and 1.9.2 and cl 3(a) of Schedule 1 establish a code which tightly regulates the movement of trains on the Melbourne metropolitan network, requiring that:

(a)    all Train Drivers who are currently seeking to become Qualified Drivers will complete the MDTS (cl 3(a) of Schedule 1);

(b)    Metro will “only require, allow or permit the driving of trains or conducting of other train movements (in all environments, including on the mainline and in depot and maintenance environments) to be undertaken by employees who have completed, or are training to complete, the Metro Driver Training Scheme ore recognised equivalent (SPOT qualification and current conversancy) and who are, or who were previously, employed in the Locomotive Driving Grades set out in the Agreement.” (cl 1.9.1); and

(c)    Metro will not carry out training in relation to train movements “[o]ther than in relation to Train Drivers (being those who have completed, or are training or complete, the Metro Driver Training Scheme or its recognised equivalent (SPOT qualification and current conversancy) and who are employed in the Locomotive Driving Grades set out in the Agreement)” (cl 1.9.2).

18    The respondent, on the other hand, submits that regard must be had first, or primarily, to what is said in cl 3(c) of Sch 1, namely: “The process of a TNA (training needs analysis) will also apply to any locomotive grade applicants from other rail enterprises”. The word “also” is used because it follows on from the last sentence of cl 3 (b), which is italicised below:

The Metro Driver Training scheme will consist of both theory and practical in-field training for Metro South or Metro North. It will consist of between forty one (41) to fifty (50) weeks of training, which will comprise of a minimum of two hundred and fifty (250) hours of practical driving with an On Job Trainer (OJT). A training needs analysis (TNA) will be completed for Employees to identify the appropriate competencies to transfer between the three (3) Operating Groups (North, South and Central).

19    The respondent contends that cl 3(c) of the enterprise agreement is that provision which relevantly governs conversion drivers, and that the “Metro Driver Training Scheme” (a term which is not defined in the enterprise agreement) referred to in cl 3(b) stipulates the agreed minimum standard (41 weeks of training, comprising a minimum of 250 hours of practical driving with an On Job Trainer) applies to trainees with no previous train driving experience.

20    In my view the construction of the enterprise agreement contended for by the respondent is the preferable one, for these reasons.

21    First, the term “training needs analysis” suggests that the parties intended that the type or the extent of training to be offered by a TNA depends upon the individual “needs” of a candidate. In cl 3(b), the TNA is contemplated to be finished after the training referred to occurs. That must be so, because the purpose of completing the TNA is to enable drivers “to identify the appropriate competencies to transfer between the three (3) operating groups (North, South and Central)”.

22    The second reason concerns the respondent’s status as an RTO and its obligations as an RTO under the Australian Qualifications Framework (AQF) and the VET Act to recognise prior learning for the Certificate IV in Train Driving.

23    The parties filed, with leave, written submissions on this point after the hearing. The submissions revealed a disagreement between the parties about the proper construction of certain provisions of the VET Act and “the VET Quality Framework”, which comprises the Standards for Registered Training Organisations (RTOs) 2015 (the Standards) and the AQF. The respondent submits that it was, and is, an NVR registered training organisation within the meaning of the VET Act and, as a consequence, it was and is bound to comply with the Standards and the AQF, which include an obligation to recognise prior learning. It says, accordingly, that if it did not recognise such prior learning with respect to the training of conversion drivers, it would place itself at risk of breaching those statutory conditions. That, it submits, is an important part of the context in which the enterprise agreement is to be construed in accordance with Amcor Ltd v Construction, Forestry, Mining and Energy Union (2005) 222 CLR 241, 246 [2] per Gleeson CJ and McHugh J.

24    The applicant, on the other hand, submits that the respondent was not required to comply with the RTO regulatory scheme described above “for the purposes of the [Certificate IV in Train Driving]”.

25    The respondent offers, but does not issue, the Certificate IV in Train Driving referred to in cl 3(d) of Sch 1 to the enterprise agreement. The respondent provides the theoretical and practical driver training. The Bendigo Kangan Institute (trading as Kangan Institute and Bendigo TAFE) (Kangan), upon being satisfied that an applicant driver has successfully completed all those tasks that she or he is required to complete, issues the certificate. The respondent submits, and the applicant disputes, that by operation of ss 21 and 22 of the VET Act, it is required fully to comply with the various requirements imposed upon it, as a condition of its registration as an RTO. Sections 21 and 22 provide as follows:

Subdivision B — Conditions of registration

21     Complying with conditions

An NVR registered training organisation must:

(a)    comply with the conditions set out in sections 22 to 28; and

(b)    comply with any conditions imposed on the organisation’s registration under subsection 29(1).

Note:    Failure to comply with a condition of registration is a contravention of a civil penalty provision, see section 111.

22    Condition — compliance with the VET Quality Framework

(1)    An NVR registered training organisation must comply with the Standards for NVR Registered Training Organisations.

(1A)    An NVR registered training organisation must comply with the Quality Standards.

(2)    An NVR registered training organisation must comply with the Australian Qualifications Framework.

(3)    An NVR registered training organisation must comply with the Data Provision Requirements.

26    “NVR registered training organisation” is defined to mean “a training organisation that is registered by the National VET Regulator as a registered training organisation under this Act”.

27    Section 111 (referred to in the note to s 21 above) provides as follows:

111    Civil penalty—breach of condition of registration

(1)    An NVR registered training organisation contravenes this subsection if:

(a)    a condition of the organisation’s registration, as mentioned in section 21, is of a kind prescribed by the regulations for the purposes of this paragraph; and

(b)    the organisation does an act or omits to do an act; and

(c)    the act or omission breaches the condition.

Civil penalty:    240 penalty units.

(2)    An NVR registered training organisation contravenes this subsection if:

(a)    a condition of the organisation’s registration, as mentioned in section 21, is of a kind prescribed by the regulations for the purposes of this paragraph; and

(b) the organisation does an act or omits to do an act; and

(c) the act or omission breaches the condition.

Civil penalty:    120 penalty units.

28    Senior counsel for the applicant contended that the respondent’s obligations under the VET Act were irrelevant, and did not form part of the context in which it is to be construed, because the statutory regime under that Act is “entirely alien” to the statutory regime imposed by the Fair Work Act 2009 (Cth), under which the enterprise agreement was negotiated and approved, and, because, although the respondent provided the training, it was Kangan that actually issued the Certificate IV in Train Driving. Senior counsel for the applicant also submitted that there was no evidence that the “RTO statutory context is so notorious that the parties should be taken to have known about it” and there was no evidence that “it came up at all in the negotiations or was known by … [the] parties”.

29    His oral submissions on those points were as follows:

The short point is this: it’s unnecessary for the Court to resolve the question of whether or not Metro was subject to relevant obligations under the VET Act in relation to Certificate IV Train Driving, because even if it was bound by RTO conditions in relation to Certificate IV Train Driving at the time the agreement was made, that does not constitute relevant statutory context that should be taken into account for the purposes of construing the 2015 agreement. That statutory regime is entirely alien to and removed from the immediate statutory context in which the agreement was formed, which is plainly the Fair Work Act. That’s what the parties were doing. They were making an enterprise agreement under the Fair Work Act.

They weren’t negotiating or dealing with in any way the regulatory framework – complex regulatory framework – established by the VET Act, and there’s no evidence to suggest that it even came up in negotiations. It can’t be said that the RTOs statutory context is so notorious that the parties should be taken to have known about it, and there’s no evidence that it came up at all in the negotiations or was known by either – by both parties … The statutory regime constituted by the VET Act would have only bound Metro, if at all, and not both Metro and the union. There’s no suggestion in Metro’s case that the union was subject to obligations under the VET Act. It plainly wasn’t.

So how can it be that an alien statutory framework – of which there’s no evidence that the [applicant] had any knowledge and which wouldn’t bind it anyway. How could that, I ask rhetorically, inform the proper construction of an agreement made under another statutory regime, and we say it can’t. So we say the lack of shared knowledge or awareness of the VET obligations must mean that it can’t assist in divining the objective intention of the parties in relation to the agreement. Now, if, however, your Honour considers it necessary to examine the statutory framework relating to RTOs and Metro, the [applicant’s] contention is that Metro was not bound by the statutory obligations it relies upon, because it was not the relevant RTO for Certificate IV in Train Driving.

30    The written submissions on the point contended that the respondent is not subject to the conditions imposed on RTOs under s 21 of the VET Act “in relation to the certificate”. That qualification on the limit of the submission – “in relation to the [Certificate IV in Train Driving]” – is repeated throughout the submission. Its submissions proceed along these lines: s 21 of the VET Act applies to an “NVR registered training organisation”; s 3 provides that “the scope of registration” means “the things that an organisation is registered to do”; the respondent was and is not registered to provide a Certificate IV in Train Driving; therefore the respondent was not in 2015, and is not now, an NVR registered training organisation for the purposes of such a certificate. It contends that “in relation to the Certificate IV in Train Driving” the respondent is a third party delivering services pursuant to a training services agreement.

31    I do not accept the oral and written submissions advanced on behalf of the applicant about the proper construction of the statutory provisions set out above, for these reasons.

32    Dealing first with the oral submissions. There is nothing in the cases that suggests that the relevant statutory context should be confined to the “direct” statutory context in which a particular industrial agreement is negotiated and brought into existence. The VET Act, in my view, clearly forms part of the context in which the enterprise agreement was brought into existence and there is no reason why the Court should not have regard to that context to determine whether a particular construction or operation of the enterprise agreement was unlikely objectively to have been intended. As to the second point, it is irrelevant that the respondent does not actually issue the Certificate IV in Train Driving. The respondent provides all the theoretical and practical training and must satisfy Kangan that a certificate may properly be issued with respect to each driver trainee. The respondent relies upon its statutory obligations as an RTO, and it seems to me beside the point that the actual certificate is issued by another organisation.

33    The final two points made in the course of oral submissions are, in my view, wrong, because there is no requirement to prove that a statutory regime said to form part of the context of an agreement must be “notorious” (whatever that means). Further, the question whether the issue ever came up in negotiations is irrelevant.

34    As to the applicant’s written submission that the respondent is not subject to the conditions imposed on RTOs under s 21 of the VET Act “in relation to the certificate”, it cannot be right because it ignores the rest of the definition of “scope of registration”, which provides that “the things that an organisation is registered to do … will allow [it] to … both provide training and assessment resulting in the issue of VET qualifications …”. It follows that phrase “the scope of registration” cannot be construed in the narrow way contended for by the applicant.

35    But in any event, as I have explained, the respondent does not contend that it issues Certificates IV in Train Driving. The respondent’s case, in respect of which it filed detailed evidence (from Mr Michael Collins and Mr Ali Elbouch), none of which was relevantly disputed, is that it is registered as an RTO accredited to deliver training to trainee train drivers in respect of units or modules that comprise the Certificate IV in Train Driving and that it is an expressly stipulated condition of its registration as an RTO in its certificate of registration that it was required to comply with the VET Quality Framework (comprising, relevantly, the Standards and the AQF). (The respondent is registered as an RTO by the Australian Skills and Qualifications Authority (ASQA) and is listed on the National Register as an RTO).

36    Mr Collins is an external consultant in the areas of employee assessment and training retained by the respondent to review its processes for selecting and training recruits. He explained in his sworn evidence that specifications in the AQF, operative when the enterprise agreement was made, required RTOs offering a certificate for the Certificate IV qualification to meet the requirements of the “AQF Qualifications Pathways Policy”, which, relevantly: provided that its purpose was to maximise the credit that students can gain for learning already undertaken; and required issuing organisations to recognise prior learning, regardless of how, where or when it was acquired, provided that the learning is relevant and current and has a relationship to the learning outcomes of the qualification.

37    The respondent’s case is that, by providing the training towards the certificate as an RTO, then in doing so “in relation to” that training, it is subject to the regulatory regime, including the obligation to take into account prior learning.

38    In my view, the statutory context of the VET Act and the obligations it imposes on the respondent as an RTO are a relevant part of the context that shows, in this case, that the particular construction or operation of the enterprise agreement for which the applicant contends is unlikely. The fact of the matter is that the respondent was and is required to comply with the VET Quality Framework (comprising, relevantly, the Standards and the AQF), which includes the obligations to recognise prior learning.

39    The notion that RTOs must “maximise the credit that students can gain for learning already undertaken” and that they must “recognise prior learning, regardless … etc.” have an obvious enough foundation in public policy. It would be passing strange that students could or should be trained, at the expense of their employer or of the State, to do something that they were already trained to do.

40    In my view, those considerations form an important part of the context in which the enterprise agreement came into existence and they show that the construction of the enterprise agreement contended for by the applicant is objectively unlikely, and not in accord with business common sense, because that construction would compel the respondent to do the very thing (ignore prior learning) that is antithetical to the requirements imposed on the respondent as a condition of its status as an RTO, and it could, in addition, render itself liable to the imposition of civil penalties under s 111 of the VET Act.

41    That result, it seems to me, is most unlikely and if it had been intended, one would have expected such an intention to have been made abundantly clear: cf L Schuler AG v Wickman Machine Tool Sales Ltd [1974] AC 235, 251 per Lord Reid (“The more unreasonable the result the more unlikely it is that the parties can have intended it, and if they do intend it the more necessary it is that they shall make that intention abundantly clear”).

42    Thirdly, and in any event, even without the need to resort to the legislative and regulatory context discussed above, in my view, it would be equally unlikely, as a matter of objective common sense, that the parties intended to provide training to experienced drivers that, on any view, would in large part be unnecessary and which would mean that considerable sums of money would be spent for nothing.

43    Fourthly, the applicant’s contention that cll 1.9.1 and 1.9.2 and cl 3(a) of Sch 1 of the enterprise agreement establish “a code which tightly regulates the movement of trains” may for present purposes be accepted. The more relevant question is: what are the terms of that code?

44    In my view, even if it is necessary to have resort to cll 1.9.1 and 1.9.2, in addition to cl 3 of Sch 1, those clauses also make it tolerably clear that a conversion driver – that is, a “locomotive grade applicant from another rail enterprise” within the meaning of cl 3(c) of Sch 1 – is not required as a matter of course to complete between 41 to 50 weeks of training, with a minimum of 250 hours of practical training.

45    The applicant does not rely on a literal reading of what it calls “the code”. Rather, it submits that the words of cll 1.9.1 and 1.9.2 must be read in light of the evidence that it sought to adduce about pre-agreement negotiations. The applicant contends that evidence of the parties’ negotiations “plainly shows that, objectively, the mutual purpose of the exception in cll 1.9.1 and 1.9.2 was to encompass Metro employees who had previously been entitled to drive Metro trains, but who had not completed the [Metro Driver Training Scheme] and/or were no longer employed in specific locomotive driving grades (e.g. managers)”.

46    The applicant contends that the “recognised equivalent (SPOT qualification and current conversancy)” wording was inserted for the purpose of ensuring that Metro employees who had previously obtained a SPOT (Single Person Operation of Suburban Trains) Qualification before the introduction of the Metro Driver Training Scheme, or who had been, but were no longer, employed in locomotive driving grades, could still drive trains.

47    The applicant says, therefore, that cll 1.9.1 and 1.9.2 are properly to be construed as operating only with respect to a “recognised equivalent” to the Metro Driver Training Scheme that existed before it was introduced in the enterprise agreement, but not as a current alternative to the scheme.

48    The applicant says further that the phrase “or are training to complete” (emphasis added) in cll 1.9.1 and 1.9.2 “ought to be construed as being referable only to the [Metro Driver Training Scheme] and not to any ‘recognised equivalent’ within the meaning of those clauses”.

49    There is no doubt that such a construction is not apparent from the face of the relevant words in cll 1.9.1 and 1.9.2, and the applicant did not contend otherwise.

50    In my view, the evidence of the negotiations on which the applicant relies in support of the construction of cll 1.9.1 and 1.9.2 and cl 3 of Sch 1, is inadmissible.

51    First, it is inadmissible because the enterprise agreement contains an entire agreement clause. Clause 1.4.1 states that the enterprise agreement “is a comprehensive agreement which operates to the exclusion of any Awards or agreements. For the avoidance of doubt, the Agreement operates to the exclusion of all prior agreements, formal and informal, save to the extent that the operation of a relevant past agreements provision is specifically preserved in the Agreement”.

52    The purpose of such a clause is to exclude any evidence of all prior arrangements, formal or informal “either to prove terms additional to or different from the written instrument or collateral contracts or to construe the instrument in a way different from the meaning to be inferred solely from its terms”: Macdonald v Shinko Australia Pty Ltd [1999] 2 Qd R 152, 156 per Davies JA. In my view, the applicant in this case seeks to do those very things. The entire agreement clause means that is impermissible: see also Branir v Owston Nominees (No 2) (2001) 117 FCR 424, 542 [440] per Allsop J, as the Chief Justice then was (explaining that entire agreement clauses “reflect the epitome of the operation of the parol evidence rule”).

53    In any event, even absent such a clause, the evidence on this question falls into at least three of the categories of evidence of negotiations that are inadmissible, namely “negotiations in the course of which the parties gradually evolved terms of a bargain ultimately embodied in written form”; “preliminary consensus that merged into the written contract”; and “statements made during the course of negotiations indicative of the unilateral intentions of each party”: Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1982) 149 CLR 337, 354 per Mason J. It has long been well-accepted that “evidence of antecedent and oral negotiations and expectations of the parties … cannot be used for the purpose of construing words of a written contract intended by the parties to comprehensively record the terms of the agreement which they have made”: Secured Income Real Estate v St Martins Investments Pty Ltd (1979) 144 CLR 596, 606 per Mason J.

54    The particular evidence upon which the applicant sought to rely in relation to this question is contained in [32]-[53] and [55] of the affidavit of Mr Marotta sworn 10 October 2017, which read as follows:

32.    Later on 21 October 2015, the RTBU and Metro signed the proposed HOA. The HOA included an attachment setting out the parties’ in-principle agreement with respect to certain clauses of the new enterprise agreement, including a proposed clause with respect to the Metro Driver Training Scheme. The HOA did not address the RTBU's proposed train movements clause. A copy of the HOA and the attachment are at Annexure MM-20.

33.    On 22 October 2015, Mr Young [of Metro] sent me an email indicating that Metro was to respond to the RTBU's proposed clause with respect to the train movements clause. A copy of that email is at Annexure MM-21.

34.    At some point around the time of the HOA being signed and Mr Young sending the email above, Mr Young and I had discussions around some specific issues with respect to the train movements clause proposed by the RTBU. During the course of those discussions, Mr Young said to me words to the effect that Metro wanted to ensure that any train movements clause permitted train driving by Metro managers who had qualified as drivers before there was a specific train driver driving scheme at Metro and were no longer employed in specific locomotive grades. I said to Mr Young words to the effect that the proposed clause could include a carve-out for train drivers with a SPOT qualification who remained conversant in driving on Metro’s Melbourne metropolitan railway network. A SPOT qualification refers to a Single Person Operation of Suburban Trains, where the driver has sole responsibility for all safeworking on the train. Mr Young also said to me words to the effect that Metro wanted to ensure that any train movements clause did not affect existing arrangements for the movement of certain machinery by Metro's infrastructure employees. I said words to the effect that I was happy with that suggestion. In these discussions, Mr Young also said to me words to the effect that Metro wanted to ensure that the proposed train movements clause did not impact on the ability of any third-party rail operators using parts of Metro's Metropolitan railway network to move trains. I said to Mr Young words to the effect that I did not have a problem with ensuring that outcome.

35.    On 30 October 2015, I received an email from Ms Grigorovitch, forwarding an email from Ms Hogan dated 29 October 2015 which attached a clean and a track changes version of a further draft enterprise agreement. A copy of that email chain together with the attached documents is at Annexure MM-22. This draft included the Metro Driver Training Scheme at clause 3 of Schedule1, but did not include the RTBU's proposed train movements clause.

36.    Shortly after receiving that draft enterprise agreement, I had a conversation with Mr Young during which I asked him why the train movements clause had not been included. He said to me words to the effect that it must have been left out by mistake and that he would follow up on it.

37.    On 2 November 2015, I sent an email to Mr Young, attaching a revised train movements clause. A copy of that email is at Annexure MM-23.

38.    On 5 November 2015, I was forwarded an email from Mr Young to the RTBU which attached a draft train movements clause and stated, among other things:

The Company makes the following commitments in relation to the movements of trains by Rolling Stock Employees:

a)    Only fully qualified drivers (i.e. Certificate IV) will drive trains on the Main Line;

b)    Current Rolling Stock employees at Bayswater depot, of which there are twelve (12), who are trained to move trains, will only move trains within the confines of the maintenance facility; and

c)    With the exception of a replacement for any of the twelve (12) at Bayswater, Metro will not train any other employees, in any other location in relation to the driving of trains, or conducting of train movements, unless this forms part of the Metro Driver Training Scheme.

A copy of that email with the attachment is at Annexure MM-24.

39.    On 10 November 2015, I was forwarded an email from Ms Hogan to Ms Grigorovitch and others attaching an updated draft enterprise agreement. A copy of that email chain together with the attachment is at Annexure MM-25.

40.    A version of the proposed train movements clause was included at clause 1.8.7 of draft enterprise agreement referred to at paragraph 39 above. Paragraphs (a) and (b) of that clause stated:

(a)     The Company will only require, allow or permit the driving of trains or conducting of other train movements (in all environments, including on the mainline and in depot and maintenance environments) to be undertaken by employees who have attained, or are training to complete, a Metro Driver Training Scheme or its equivalent. For the avoidance of doubt, this does not apply to approved third party operators, operating on the Melbourne Metropolitan Network.

(b)     Other than in relation to Train Drivers (being those who have attained, or are training to complete, a Metro Driver Training Scheme or its equivalent and who are employed in the Locomotive Driving Grades set out in this Agreement), Metro will not train any employees in relation to the driving of trains, or conducting other train movements on the Metro network. Without limitation, the ‘Rolling Stock Train Movement Training Scheme’ will immediately cease.

41.    Shortly after receiving that draft enterprise agreement, I spoke on the telephone with Mr Young and asked him why the proposed train movements clause included a reference to an ‘equivalent’ to the Metro Driver Training Scheme. Mr Young said to me words to the effect that this was included because Metro wanted to ensure that ex-drivers who were now Metro managers but who had not completed the current Metro Driver Training Scheme could still move trains. I said words to the effect that I did not like the word ‘equivalent’ because it did not mean anything and that the current training scheme was based on a SPOT qualification. I said to him words to the effect that I would need to have a think about what words would capture that properly.

42.    Shortly afterwards, I met with Mr Young at the RTBU office in Melbourne. During that meeting, Mr Young said words to the effect that Metro had a group of managers who had qualified as drivers and that Metro wanted them still to be able to drive Metro trains when necessary. I said to Mr Young that I was not against that notion but that the wording had to be specific, and that it should be limited to people who had the SPOT qualification and were also currently still conversant with Metro's metropolitan railway network. Mr Young said to me words to the effect that he would come back to me on this issue after speaking with others at Metro.

43.    On 13 November 2015, the RTBU received an email from Ms Hogan which attached a further draft enterprise agreement, in clean copy and in track changes, and proposed Schedules B and C. Clause 1.8.7 of the draft enterprise agreement, being a version of the proposed train movements clause, still had the word ‘equivalent’ in paragraphs (a) and (b). A copy of that email chain together with attachments is at Annexure MM-26.

44.    On 16 November 2015, I instructed Ms Shiel to send an email to Mr Young, attaching a further draft of the proposed train movements clause, and a revised clause dealing with the Metro Driver Training Scheme. A copy of Ms Shiel's email to Mr Young with the attachments is at Annexure MM-27.

45.    Later on 16 November 2015, I received an email from Mr Young posing some questions with respect to the RTBU's proposed train movements clause. A copy of that email is at Annexure MM-28.

46.    Shortly afterwards, I had another conversation with Mr Young about the proposed train movements clause. During the conversation, Mr Young said to me words to the effect that Metro was concerned to ensure that qualified drivers who were currently employed in a locomotive grade, but who had not completed the Metro Driver Training Scheme, could still drive trains, and also raised the issue of Metro managers who were ex-drivers, and not currently employed in locomotive grades, being able to drive trains.

47.    On 18 November 2015, I received an email from Mr Young attaching a revised draft of the proposed train movements clause and of the Metro Driver Training Scheme provisions. A copy of that email with attachments is at Annexure MM-29.

48.    After I received that email, I had another conversation with Mr Young during which I said words to the effect that the RTBU was prepared to include in the proposed train movements clause an allowance for train driving by persons who had a SPOT qualification and were currently conversant in driving on Metro’s Melbourne metropolitan network.

49.    On 19 November 2015, at 2.57pm, the RTBU received an email from Ms Hogan, attaching a further draft enterprise agreement. A copy of that email with attachments is at Annexure MM-30. The proposed train movements clause was at clause 1.9. The words ‘recognised equivalent’ in clause 1.9.1 and clause 1.9.2 were qualified with the words ‘(SPOT qualification and current conversancy)’.

50.    Also on 19 November 2015, at 3.08pm, Ms Hogan sent an email to Ms Shiel, which was subsequently forwarded to me, attaching a draft enterprise agreement with track changes. A copy of that email with the attachment is at Annexure MM-31. The proposed train movements clause was at clause 1.9. The words ‘recognised equivalent’ in clauses 1.9.1 and 1.9.2 were qualified with the words ‘(SPOT qualification)’.

51. On 20 November 2015, the RTBU received an email from Ms Hogan, attaching a further draft enterprise agreement and proposed Schedules B and C. A copy of that email with attachments is at Annexure MM-32. The proposed train movements clause was included in clause 1.9. The words ‘recognised equivalent’ in clause 1.9.1 and clause 1.9.2 were qualified with the words ‘(SPOT qualification and current conversancy)’.

52. On 24 November 2015, I received an email from Ms Hogan, attaching a further draft enterprise agreement and proposed Schedules B and C. A copy of that email with attachments is at Annexure MM-33.

53. On 26 November 2015, I was forwarded an email from Ms Hogan to Ms Grigorovitch and others attaching a final version of the 2015 Enterprise Agreement, including Schedules B and C. The email stated that the agreement ‘has been sent to the printers, for distribution on Friday’. A copy of that email with the attachment is at Annexure MM-34.

…

55.    Later on 26 November 2015, I received an email from Mr Jolly, forwarding an update issued by Metro's CEO, Andrew Lezala, with respect to the proposed new enterprise agreement. A copy of the email from Mr Jolly with that update is at Annexure MM-35.

55    In my view, even if the entire agreement clause did not preclude having regard to this evidence, not only does it fall into one or more of the impermissible categories identified by Mason J in Codelfa (see above at [53]), it is also in large part inadmissible for the related reason identified by Heydon and Crennan JJ in Byrnes v Kendle (2011) 243 CLR 253, 285 [99], namely that it is “appealed to purely to show what the words were intended to mean”.

56    The applicant also sought to rely on an earlier agreement between the applicant and Connex (Metro’s predecessor), namely the Connex Melbourne Collective Agreement 2009-2012 (the Connex agreement), in support of the proposition that there had been a “significant reduction in the minimum training requirements” of the Metro Driver Training Scheme, from 73 weeks to 41 weeks, and that in some fashion that supports the notion that all drivers – novice or experienced – should undergo a minimum of 41 weeks training. In my view, however, there is no evidence that would permit me to use the terms of the earlier agreement to construe the terms of the enterprise agreement in this case. On the contrary, as discussed above, the enterprise agreement in cl 1.4.1 specifically excludes resort to the previous agreements, unless “specifically preserved” (which the Connex agreement is not).

The North or South Point

57    The final ground relied on by the applicant is “the North or South” point.

58    In its written submission, the applicant contends (at [30]-[33]):

30.    The express terms of clause 3(b) of Schedule 1 state that the MDTS [that is, the Metro Driver Training Scheme] ‘will consist of both theory and practical in-field training for Metro South or Metro North’.

31.    The disjunctive ‘or’ indicates that a particular conversion driver is to be trained pursuant to the MDTS only in respect of Metro North or Metro South, but not both.

32.    The history of the parties’ negotiations contextually supports this construction.

33.    Indeed, Metro has not to date put forward a contention to the contrary.

59    The respondent submits that “or” is to be read in a permissive, not a restricted, way:

[The applicant’s] construction of the first sentence of sub-clause 3 (B) of schedule 1 is misconceived. The requirement in that first sentence is that the MDTS compromise theory and practical in-field training in the North or South operating areas. There is no reason to construe theory training as having to be in any particular area. The better construction is that it is the in-field practical training that needs to be done in the North or South. Further, the use of ‘or’ in this context is permissive, not restrictive, such that the in-field training may be done in the North or in the South, whichever suits. Finally, the 250 hours minimum practical driver training with an on-the-job trainer is not expressed to be tied to only one operational area.

60    In my view, despite the applicant’s contention to the contrary, there is no admissible evidence in the history of the negotiations that assists in the resolution of the question, and the parties cited none. No sensible or logical reason has been advanced why cl 3(b) should be read to mean that conversion drivers must conduct their training on one, but not both, of the respondent’s operating areas. In my view the preferable construction is the permissive, flexible and practical construction contended for by the respondent, consistent with the applicable principles of construction, in particular those referred to in Kucks v CSR Ltd (1996) 66 IR 182, 184 and City of Wanneroo v Australian Municipal, Administrative, Clerical and Services Union (2006) 153 IR 426, 440 [57] quoted at [14] above.

Safety

61    Needless to say, both parties are concerned to ensure the safe operation of the Metro train system. The applicant’s counsel stated at the hearing of this application that the applicant “holds a great conviction that the quality and nature of the training needs to be extensive”. So much may readily be accepted. There is, however, no evidence before the Court to suggest that anything that the respondent has done, or plans to do as part of training conversion drivers gives rise to any safety issue or concern. Nor is there any evidence to suggest that the respondent, or the TAFE that issues the Certificate IV in Train Driving, have not complied with their statutory and regulatory responsibilities with respect to driver training and the issuance of certificates.

conclusion

62    Accordingly, the application will be dismissed.

Associate:

Dated:    11 December 2017