FEDERAL COURT OF AUSTRALIA

Oceanic Coal Australia Pty Ltd v Parker [2010] FCA 1018

THE COURT ORDERS THAT:

1.    The Appeal is allowed.

2.    The decision of Chief Industrial Magistrate Hart dated 3 February 2010 be quashed.

3.    The Orders of Chief Industrial Magistrate Hart dated 24 February 2010 be set aside.

Note:    Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules. The text of entered orders can be located using Federal Law Search on the Court’s website.

REASONS FOR JUDGMENT

FACTS

1    The respondent (‘Mr Parker’) is employed as a full-time production employee at the appellant’s West Wallsend Colliery. In June 2008 he sustained an injury at work and as a result was unable to work for a period of five shifts. Mr Parker’s work conditions were regulated by the Oceanic Coal Australia Limited West Wallsend Underground Mine Collective Agreement 2007 (‘the Agreement’). Clause 12 of the Agreement entitled ‘Accident Pay’ provided for payment in lieu of wages during the period of incapacity of a worker to supplement the statutory payments made to an injured worker pursuant to the Workers Compensation Act 1987 (NSW) during the period of a worker’s incapacity. The subclause relevant to Mr Parker’s claim is cl 12(b)(i) of the Agreement.

2    Mr Parker claimed accident pay under cl 12(b)(i) for the five shifts he was unable to work. The appellant (‘Oceanic’) did not dispute that Mr Parker was entitled to accident pay under cl 12(b)(i), but considered that Mr Parker’s interpretation of cl 12(b)(i) was erroneous and calculated Mr Parker’s entitlement on a different basis.

3    Mr Parker brought proceedings before the Chief Industrial Magistrate’s Court, Newcastle Local Court, claiming that he was entitled to receive accident pay in the amount of $3,010.70 for the shifts which he was unable to work between 21 and 29 June 2008. Oceanic had paid Mr Parker an amount of $1,504.17, being the amount it calculated that it was required to pay pursuant to the Agreement. Accordingly the claim was made for the difference, namely an amount of $1,506.53.

4    Before the Chief Industrial Magistrate a component of the sum said to constitute a ‘shift penalty’ in the amount of $379.50 was not pressed. Accordingly the discrepancy between the parties before his Honour was in the amount of $1,127.03.

5    The claim was heard by Chief Industrial Magistrate Hart on 4 December 2009. In handing down his decision on 3 February 2010 his Honour accepted the interpretation of cl 12(b)(i) of the Agreement contended for by Mr Parker. The Orders made on 24 February 2010 by the Chief Industrial Magistrate relevantly provide:

1.    Pursuant to section 720 of the Workplace Relations Act 1996 (Cth), the Respondent pay the Applicant the gross amount of $1127.03 in respect of an underpayment for Accident pay in accordance with the West Wallsend Underground Mine Collective Agreement 2007 during the period 21 June 2008 to 29 June 2008.

2.    Pursuant to section 722 of the Workplace Relations Act 1996 (Cth), the Respondent pay the Applicant an amount of $170.08 in respect of interest on the underpayment set out in Order 1 above.

6    By Notice of Appeal filed in this court on 24 February 2010 Oceanic claims that his Honour erred in his interpretation of cl 12(b)(i). The Notice of Appeal seeks an order quashing the decision of the Chief Industrial Magistrate, an order setting aside the Orders made by his Honour and any such other orders as the Court sees fit. To understand his Honour’s finding it is necessary to state the relevant provisions of the Agreement. This appeal is in the nature of a test case.

THE AGREEMENT

7    The terms ‘Classification Rates’, ‘Rostered Hours’ and ‘Rostered Overtime’ are defined in cl 28 of the Agreement as follows:

“Classification Rate” means the rate of pay in respect of 35 ordinary hours as prescribed in Clause 11 of the Agreement.

“Rostered Hours” means the ordinary hours of work and Roster Overtime worked by Employees.

“Rostered Overtime” means overtime which forms an integral part of the Employees roster of regular work pattern and which the Employee is required to work.

8    Clause 12 of the Agreement relevantly provides:

Accident Pay

a)    The Company will pay Accident Pay during the incapacity of the Employee, within the said meaning of the NSW Workers Compensation Act 1987 (as amended) (Workers Compensation Act), until such incapacity ceases; or until the expiration of a period of 78 weeks from the date of injury, whichever event shall first occur, even if the Company terminates the Employee’s employment within the period.

b)    Employees will be entitled to Accident Pay in accordance with this Agreement provided that for the purpose of determining Accident Pay the following shall apply.

(i)    For the initial period of 39 weeks from the date of incapacity a weekly payment representing the difference between the weekly amount of compensation paid to the Employee by virtue of the Workers Compensation Act and the weekly amount that would have been paid by virtue of this Agreement had the Employee (Operator / Tradesman or Leading Hand classification) been paid their Roster Hours at the greater of $25.30 per hour or their Classification Rate, plus applicable bonus (Appendix 1).

…

(ii)    For a further period of 39 weeks a weekly payment representing the difference between the weekly amount of compensation paid to the Employee by virtue of the Workers Compensation Act and the weekly amount that would have been paid by virtue of this Agreement had the Employee (Operator / Tradesman or Leading Hand classification) been paid their Rostered Hours at the greater of $25.30 per hour or their appropriate Classification Rate. Bonus is not payable on this part of Accident pay.

9    The parties agree that the words ‘Roster Hours’ in cl 12(b)(i) should be read as ‘Rostered Hours’.

10    Mr Parker was engaged by Oceanic as an Operator. The classification and rates of pay set out in cl 11.2(a) relevantly provides as follows:

11    Clause 9 of the Agreement is entitled ‘Hours of Work, Rosters and Breaks’. The relevant provisions are:

Hours of Work, Rosters and Breaks

9.1    Ordinary Hours of Work

    The ordinary hours of work shall be an average of 35 hours per week over the roster cycle.

9.2    Rostered Hours of Work

    The Rostered Hours of work shall be the ordinary hours and any overtime included in the roster (i.e. Rostered Overtime).

9.3    Days of Mine’s Operations

    The Mine’s operations are based on a continuous process, and as such, the Company may carry out operations on all available hours each day on any day of the year, with the exception of Christmas Day and Boxing Day. Work on Christmas Day and Boxing Day may be carried out on a voluntary basis.

12    Clause 9.4 is entitled ‘Roster Arrangements’. Relevantly cl 9.4(c) provides:

    It is intended the Company will progress to the following rosters in 2007:

(i)    Monday to Friday, 8 hours, 5 day night, day and afternoon shifts. Shifts will be fixed unless agreed by the affected Employees.

(ii)    Monday to Friday, 10 hours, 4 day night, day and afternoon shifts. Shifts will be fixed unless agreed by the affected Employees.

(iii)    A Friday to Sunday and/or Saturday to Monday roster of 3 by 12 hour day and night shifts may be worked. Shifts will be fixed unless agreed by the affected Employees.

13    Clause 9.5 of the Agreement is entitled ‘Payment for Rosters’. Relevantly cl 9.5(a) provides:

9.5 Payment for Rosters

a)    Will be on the basis of:

    (i)    The ordinary hours of work shall be paid at each Employee’s Classification Rate. (up to 11 hours per shift).

    (ii)    All hours in excess of ordinary hours in the Monday to Friday period of any roster cycle will be paid at the overtime rate. (i.e. hours in excess of 35 hours).

    (iii)    All Rostered Hours on a Saturday or Sunday will be paid at the greater of double the classification rate or the overtime rate.

14    Mr Parker was rostered on the ‘Weekend B’ roster, a fixed nighshift weekend roster. This roster required Mr Parker to undertake three overnight shifts of 12 hours on Friday, Saturday and Sunday nights.

15    Pursuant to cl 9.1 of the Agreement, the ordinary hours of work for an Oceanic Operator amounted to 35 hours per week, and by cl 9.2 the rostered hours included ordinary hours and any overtime included in the roster. As such, Mr Parker’s three 12-hour shifts constituted 35 hours of ordinary time and one hour of overtime. However pursuant to cl 9.5(a)(iii) of the Agreement, where work takes place on Saturdays or Sundays, as was the case for Mr Parker, penalty payments apply.

PROCEEDINGS BEFORE THE CHIEF INDUSTRIAL MAGISTRATE

16    The contention then between the parties before the Chief Industrial Magistrate was essentially confined to one issue, namely how the applicable rate was to be applied when calculating accident pay under cl 12(b)(i).

17    To apply the formula contained in cl 12(b)(i) it was necessary to have regard to the hourly rates of pay contained in cl 11.2(a) of the Agreement (see [10] above). Such clause provided an hourly Classification Rate of $25.10 per hour for an operator 12 months after lodgement. Mr Parker fell within this category. As this rate was less than $25.30 per hour it was agreed by both parties that, pursuant to cl 12(b)(i) (see [8] above), the rate relevant to Mr Parker under cl 12(b)(i) was $25.30 per hour.

18    Mr Parker claimed that the text of cl 12(b)(i) necessarily required the application of cl 9.4(c) and of cl 9.5(a) (see [12] and [13] above) in order to determine what he would have been paid for his rostered hours under the Agreement. This construction of cl 12(b)(i) required that penalty rates contained in cl 9.5(a) of the Agreement be applied to the relevant rate of $25.30 per hour. Accordingly under this interpretation such rate would be doubled in respect of those of Mr Parker’s rostered hours which fell during the weekend.

19    Oceanic submitted however that the words of cl 12(b)(i) provided a ‘simple formula’ pursuant to which accident pay was to be calculated. Oceanic submitted that under cl 12(b)(i), the rate of $25.30 per hour need only be multiplied by the number of hours which Mr Parker had been rostered to work and would have worked but for the injury. This construction employed no overtime or double-time rates and made no distinction between the type of hours that Mr Parker had been rostered to work, whether they be ordinary, overtime, weekday or weekend hours.

20    In summary, the amount contended for by Mr Parker (when combined with his statutory entitlements under workers compensation provisions) correlated with the amount that he would have actually been paid had he worked his rostered hours at a base rate of $25.30 per hour (disregarding any entitlement to ‘Shift Penalties’). The amount contended for by Oceanic was substantially less, calculated purely on the text of cl 12(b)(i) and the Classification Rate and disregarded any penalty rates that Mr Parker would ordinarily receive by working a weekend roster as provided by cl 9.5(iii) of the Agreement. There was no dispute regarding the bonus pay component of his entitlement.

21    His Honour accepted the interpretation of cl 12(b)(i) as submitted by Mr Parker. His Honour said at [23] of his decision:

When Clause 11.2(a) is examined, it is clear that the “Classifications and Hourly Rates of Pay” are so structured that provision is made for a classification rate when an employee works ordinary hours and a higher rate when the overtime arrangements are invoked including rostered overtime. In my view, the whole of Clause 11 has relevant application when the injured worker’s “roster hours” are being considered. In my view, to confine the meaning of “Classification Rate” only to ordinary hours, whilst ignoring the overtime rates specified in Clause 11.2(a) would constitute a “narrow or pedantic approach” and would require the interpretation to be “in a vacuum divorced from industry realities” ignoring the warnings of his Honour Mr Justice Madgwick and his Honour Mr Justice French.

GROUNDS OF APPEAL

22    Oceanic appeals the decision of the Chief Industrial Magistrate on the following ground:

1    The learned Magistrate erred in interpreting or construing clause 12(b)(i) of the West Wallsend Underground Mine Collective Agreement 2007 (Agreement) in finding that the Applicant was entitled to Accident Pay on the basis of the rate the Respondent would have been paid had he work his “Rostered Hours” (including where applicable, the Respondent’s “Overtime Rate”), rather than on the basis of the “Classification Rate” in the Agreement, in that:

    (a)    The interpretation was contrary to the plain and ordinary meaning of the words appearing in clause 12(b)((i) and specifically failed to take account of the definitions of “Classification Rate” in clauses 11 and 28 of the Agreement and “Rostered Hours” in clause 28 of the Agreement.

    (b)    The learned Magistrate substituted “Overtime Rate” for the “Classification Rate” with no permissible basis for the substitution.

    (c)    The interpretation was contrary to the proper interpretation of the clause read in the context of the Agreement as a whole and specifically failed to take into account the distinction used throughout the Agreement between the defined terms “Classification Rate”, “Overtime Rate” and the phrase “projected roster earnings”.

    (d)    The interpretation took into account extraneous considerations when construing the Agreement, including the perceived “evident” purpose of the clause and perceived injustice, where:

    (i)    No evidence of such purpose or injustice existed; and

    (ii)    Such considerations and rationale were not open on the terms of the Agreement.

    (e)    The interpretation failed to apply the proper principles of interpretation of workplace agreements to the facts and circumstances of the case before the learned Magistrate.

OCEANIC’S SUBMISSIONS

23    Oceanic submits that the Chief Industrial Magistrate misinterpreted the term ‘Classification Rate’ to include the rate that Mr Parker would have actually been paid had he worked his roster. Oceanic submits that the term should be interpreted to mean the rate listed under the column labelled ‘Classification Rate’ in cl 11.2(a). In circumstances where the plain and ordinary words used in the Agreement specified the applicable rate, Oceanic submits that his Honour was bound to give it effect. Accordingly Oceanic submits that the proper construction of cl 12(b)(i) does not require the inclusion of rates prescribed by cl 9.5(iii).

24    Oceanic submits that there is no ambiguity in the phrase ‘the weekly amount that would have been paid by virtue of this Agreement had the employee (Operator/Tradesman or leading handing classification) been paid their Roster Hours at the greater rate of $25.30 per hour or their classification rate’. His Honour found at [17]:

The interpretation sought by [Oceanic] could easily have been expressed in clear terms by providing that the employee’s ordinary, non-overtime hourly rate be multiplied by the number of hours that were rostered to work in any particular week.

25    Oceanic submits that ‘the Agreement has done just that’ in expressly providing that the roster[ed] hours are to be paid at the greater rate of $25.30 per hour or the Classification Rate. Put another way, Oceanic submit that the Agreement has provided specifically the basis for the calculations which his Honour suggested might have been included in the Agreement.

26    Thirdly, it is submitted that his Honour erred at [21] of his decision when he concluded:

… it is necessary to calculate the appropriate classification rate as an ordinary rate or overtime rate as required by the roster itself.

27    Oceanic submits that the interchanging of ordinary rate and overtime rate and the substitution of the overtime rate for the classification rate reflects a fundamental error in the construction of the Agreement that was not open to the Court.

28    Fourthly, Oceanic submits that his Honour failed to distinguish between the Classification Rate and the Overtime Rate, which are separate terms and have different meanings as demonstrated by their use throughout the Agreement.

29    Fifthly, Oceanic submits that had the parties wished to ensure that the recipient of accident pay would be paid the amount that they would have received had they actually worked their usual rostered hours, the parties would have used the phrase ‘projected roster earnings’ in the ‘Accident Pay’ clause. Oceanic points to various uses of that phrase in the Agreement and submits that had the result contended for by Mr Parker been intended, the phrase would have been used in cl 12(b)(i).

30     Lastly, it is submitted that the learned Magistrate erroneously based his interpretation of the Agreement upon what he perceived to be the purpose of accident pay, rather than the text of the Agreement itself as required by the binding authorities. Accordingly Oceanic also contends that the Chief Industrial Magistrate fell into error by applying extraneous notions of perceived injustice when interpreting the clause. In any event, Oceanic denies that any injustice would result from the implementation of their interpretation of the clause.

MR PARKER’S SUBMISSIONS

31    Mr Parker submits that there is no error as alleged in his Honour’s findings. Mr Parker submits that cl 12(b)(i) required that he be paid, by way of accident pay (after taking into account his workers’ compensation entitlements), the weekly amount that he would have been paid under the Agreement had he been paid his rostered hours at the greater rate of $25.30 per hour or the Classification Rate. That is, the rate of $25.30 per hour was not the rate for which Oceanic was liable to pay for each rostered hour but rather such rate was to be taken as the hourly rate by which the entitlement to payment in accordance with the Agreement was to be calculated. Accordingly the provisions of cl 9.5 had to be applied to such rate to determine the payments for which Oceanic were liable under cl 12(b)(i).

32    For those hours that Mr Parker was rostered to work on the weekend, Mr Parker submitted that the terms of cl 9.5(a)(iii) should apply to double the rate of $25.30 per hour owed to him for those hours. The actual calculation claimed by Mr Parker (excluding the shift penalty which was not pressed) is set out as follows:

33    Mr Parker contends that Oceanic’s interpretation of the clause represents a ‘formula for calculating the quantum of accident pay divorced from other provisions in the Agreement about payment’. Mr Parker contends that cl 12(b)(i) is not such a formula and submits that the text of the clause, specifically that which stated ‘the weekly amount that would have been paid by virtue of the Agreement had the Employee (Operator/Tradesman of Leading Hand classification) been paid their Roster[ed] Hours’, required the Chief Industrial Magistrate to have regard to the other relevant clauses of the Agreement.

34    Mr Parker further contends that the presence of the words ‘at the greater of $25.30 per hour or their Classification Rate’ represents an additional component to a clause designed to ‘give effect to what are effectively transitional arrangements from the rates in the previous agreement to the new Agreement’. Such a submission places additional emphasis on the other relevant section of the clause, that being an entitlement to ‘the weekly amount that would have been paid by virtue of the Agreement had the Employee (Operator/Tradesman of Leading Hand classification) been paid their Roster[ed] Hours’.

35    Mr Parker further submits that it was permissible for the Chief Industrial Magistrate to consider any injustice arising from the various interpretations of the clause. Mr Parker took the Court to the observations of Madgwick J in Kucks v CSR Limited (1996) 66 IR 182 at 184 where his Honour said:

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.

36    Mr Parker contends that the implementation of Oceanic’s interpretation of the accident pay provision would leave weekend shift workers at a significant disadvantage to weekday workers and that it was permissible for the Chief Industrial Magistrate to take such matter into account. Mr Parker also referred the Court to numerous instances of clauses in the Agreement which he submitted were less than precise.

37    Mr Parker submits that the objective intent of the parties is clear from the words used in the relevant clause.

CONSIDERATION

38    The approach to interpretation of awards and industrial agreements is considered in Amcor Limited v Construction, Forestry, Mining and Energy Union and Others (2005) 222 CLR 241. In Amcor at [30] their Honours Gummow, Hayne and Heydon JJ observed in relation to the relevant clause in question, cl 55.1.1:

Clause 55.1.1 must be read in context. It is necessary, therefore, to have regard not only to the text of clause 55.1.1, but also to a number of other matters: first, the other provisions made by clause 55; secondly, the text and operation of the Agreement both as a whole and by reference to other particular provisions made by it; and, thirdly, the legislative background against which the Agreement was made and in which it was to operate.

39    Accordingly the content of the relevant clause must be considered together with the relationship of that clause or other clauses, the text and operation of the award and the legislative background. Effect must be given to the meaning of the award (or industrial agreement) as expressed in the terms that it uses (see Amcor per Kirby J at [70]). Further, if ‘reasonably available’ the award should be construed to make it operate ‘fairly towards both parties’ (see Amcor per Callinan J at [131]).

40    As stated by Finkelstein J in Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union v Skilled Engineering Ltd [2003] FCA 260 at [21]:

The object as always is to objectively determine the intention of the parties from the words of the document. That intention can manifest itself not only from words used but from words considered in light of the circumstances surrounding the transaction.

41    In assessing the circumstances surrounding the transaction, Mason J’s observations in Codelfa Construction Proprietary Limited v State Rail Authority of New South Wales (1982) 149 CLR 337 are applicable. At 352 his Honour said:

Consequently when the issue is which of two or more possible meanings is to be given to a contractual provision we look, not to the actual intentions, aspirations or expectations of the parties before or at the time of the contract, except in so far as they are expressed in the contract, but to the objective framework of facts within which the contract came into existence, and to the parties’ presumed intention in this setting. We do not take into account the actual intentions of the parties and for the very good reason that an investigation of those matters would not only be time consuming but it would also be unrewarding as it would tend to give too much weight to these factors at the expense of the actual language of the written contract.

42    The above statement must be considered together with the observations of the High Court of Australia in Toll (FGCT) Pty Limited v Alphapharm Pty Limited and Others (2004) 219 CLR 165. At [40] the Court observed:

It is not the subjective beliefs or understandings 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. References to the common intention of the parties to a contract are to be understood as referring to what a reasonable person would understand by the language in which the parties have expressed their agreement. The meaning of the terms of a contractual document is to be determined by what a reasonable person would have understood them to mean. 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.[Footnotes omitted]

43    See also Whittaker v Unisys Australia Pty Ltd (2010) 192 IR 311 at [156].

44    Despite such approaches which recognise the importance of the consideration of the ‘context’ of contractual relations, the text of the clause in question must nevertheless be given primacy in its interpretation. In Kucks, Madgwick J observed at 184 that:

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 be fairly put into an award. So, for example ordinary or well-understood words are in general to be accorded their ordinary or usual meaning.

45    Madgwick J’s approach in Kucks (see also [35] above) has been described by the Full Federal Court as the ‘proper approach to construction of certified agreements’: see Ansett Australia Limited (subject to Deed of Company Arrangement) v Australian Licensed Aircraft Engineers’ Association [2003] FCAFC 209 at [8].

46    In a similar vein, French J (as his Honour then was) observed in City of Wanneroo v Holmes (1989) 30 IR 362 at 379:

It is of course no part of the court’s task to assign a meaning in order that the award may provide what the court thinks is appropriate – Australian Workers Union v Graziers Association (NSW) (1939) 40 CAR 494. Indeed it has been said that the a tribunal interpreting an award must attribute to the words used their true meaning even if satisfied that so construed they would not carry the intention of the award making authority – Re Health Administration Corporation; Re Public Hospital Nurses (State) Award (1985) 12 IR 122; Rogers Meat Co Pty Ltd v Howarth [1960 AR(NSW) 291; Re Government Railways and Tramways (Engineers etc) Award [1928] AR 53 at 58 (Cantor J).

47    Applying such principles to the interpretation of cl 12(b)(i) of the Agreement, the two competing versions of interpretation are potentially, on the text, available. On the one hand Oceanic’s contention that the Agreement is unambiguous can readily be understood. In interpreting the clause simplistically and applying the natural and ordinary meaning of the words used in the Agreement (see The Clothing Trades Award [1950] 68 CAR 597), cl 12(b)(i) suggests that an employee eligible for accident pay is to receive an amount calculated by multiplying the number of hours in which the employee was rostered to work by the greater of $25.30 per hour or the Classification Rate.

48    Applying such interpretation, an interpretation that identifies no ambiguity in the relevant clause, there is no occasion to have regard to the history and subject matter of the award (see Pickard v John Heine & Son Limited (1924) 35 CLR 1 at 9 per Isaacs ACJ).

49    Mr Parker’s interpretation, with which the Chief Industrial Magistrate agreed, likewise has merit. It is open on the words used in cl 12(b)(i) that Mr Parker is entitled to the weekly amount that he would have been paid under the Agreement had he been paid his rostered hours based upon the rate of $25.30 per hour or his Classification Rate (plus applicable bonus, an entitlement which is not in contention in these proceedings). Such a construction also may find support within the wider text of the Agreement and, according to Mr Parker, is the interpretation consistent with the wider purposes of accident pay.

FINDING

50    After careful consideration, the Court is of the opinion that the text of cl 12(b)(i) demands an interpretation inconsistent with the Chief Industrial Magistrate’s finding. Accordingly the Court prefers the interpretation of Oceanic, and does so for the following reasons.

51    As the above authorities indicate, the text of relevant clause has primacy in ascertaining its meaning. On the text of cl 12(b)(i) alone, the Court prefers Oceanic’s interpretation of the accident pay provisions to the interpretation taken by the Chief Industrial Magistrate. Indeed the text of cl 12(b)(i) leaves little room for ambiguity and lends itself well to the ‘simple formula’ which Oceanic submits is to be applied. Given that cl 12(b)(i) can be read without significant ambiguity, recourse to extraneous principles are unnecessary in ascertaining its meaning.

52    The two competing interpretations stress different elements of the clause in question. Mr Parker’s interpretation seeks to emphasise the ‘weekly amount that would have been paid by virtue of this Agreement’ component of the clause, in effect to create an equivalence between the total pay received by a worker injured in an accident and the pay received by a worker who had actually worked their roster. This interpretation seeks to substitute and apply the applicable rate (in this case $25.30 per hour) to other clauses throughout the Agreement in effect to calculate the amount that would have been paid to the employee had such rate been the injured employee’s ordinary rate of pay.

53     Oceanic on the other hand, perhaps only as a consequence of its opposition to the interpretation of Mr Parker, stress the latter component of the clause, that being: ‘had the Employee (Operator / Tradesman or Leading Hand classification) been paid their Roster[ed] Hours at the greater of $25.30 per hour or their Classification Rate, plus applicable bonus’. Under this interpretation, the inclusion of the words ‘weekly amount that would have been paid by virtue of this Agreement’ serve to incorporate the accident pay provisions into the wider Agreement however they do not make provision for the substitution of the $25.30 per hour rate in place of clearly defined terms.

54    In the opinion of the Court, only Oceanic’s interpretation gives sufficient weight to both these components of cl 12(b)(i). It is an interpretation that gives the clause, when read as a whole, a cogent and ordinary meaning.

55     The alternative interpretation which found approval with the Chief Industrial Magistrate disregards the plain meaning of the text of the clause including its defined terms. Such interpretation also gives rise to problems in calculation, particularly in assessing rates for overtime and weekend pay. For example, in calculating Mr Parker’s entitlement on the interpretation that he advances, the Court is asked to substitute the rate of $25.30 per hour in lieu of his Classification Rate into the formula contained in cl 9.5(a)(iii). Clause 9.5(a)(iii) states:

(iii)    All Rostered Hours on a Saturday or Sunday will be paid at the greater of double the classification rate or the overtime rate.

Mr Parker’s approach is demonstrated in the table reproduced above at [32] where the rate of $25.30 per hour is submitted to the application of ‘DT’ (double-time) rates.

56    Clause 9.5(a)(iii) however contains no reference to any rate other than the Classification Rate or the Overtime Rate, both of which are expressly defined. To substitute a rate of $25.30 per hour into the operation of cl 9.5(a)(iii) would be to ignore the defined meaning of its terms.

57     As submitted by Oceanic, the term ‘Classification Rate’ is clearly defined as the rate specified in cl 11.2(a) of the Agreement. Its status as a ‘rate’ is also significant, given that such status entails a specific and deliberate numerical value which should not be disregarded by the substitution of a different rate (namely $25.30) in other parts of the Agreement.

58    The observations of the Chief Industrial Magistrate at [17] of his Honour’s judgment (see [24] above) place an incorrect construction upon the interpretation of cl 12(b)(i). On a proper reading of cl 12(b)(i), particularly in reference to the definition of ‘Rostered Hours’ in cl 28, a term specifically defined to include both ‘ordinary hours of work and Roster Overtime’ (i.e. all hours worked), it is difficult to characterise the clause as one that requires a greater specificity of language to reflect Oceanic’s interpretation. On the Court’s ordinary reading of cl 12(b)(i), the clause in effect states that Oceanic is liable to pay the difference between Mr Parker’s workers compensation entitlement and the weekly amount that he would have been paid had he been paid both his ordinary and overtime hours (all his rostered hours) at a rate of $25.30 an hour. Such a reading is apparent on the face of the text and should be given effect. There is simply no basis for the incorporation of the requirements of cl 9.5(iii) into the accident pay provisions.

OTHER CONSIDERATIONS

59    Given that the Court has found the clause to be unambiguous, occasion may not necessarily arise for the detailed analysis of the wider Agreement as a whole, the wider purposes of accident pay and the likelihood of any injustice arising between the parties. That said, with particular reference to their Honours’ observation in Amcor (see [38] above), the Court has considered these matters and remains of the view that Oceanic’s interpretation is to be preferred.

60    In reference to their Honours’ view in Amcor that the clause is to be assessed in the context of the wider agreement as a whole, the Court is of the view that Oceanic’s interpretation of the clause allows for a consistency with the wider Agreement that is not shared by the interpretation of the Chief Industrial Magistrate. The inconsistency inherent in substituting an alternate rate into a formula containing defined clauses and rates (see discussion at [55]-[57] above) is a persuasive factor in this finding. Mr Parker’s submissions regarding the inconsistency of language throughout the Agreement have some merit, however given the fact that the Court is required to interpret clauses with specifically defined terms, the Court must give effect to those definitions. Further, as submitted by Oceanic, the use of the phrase ‘projected roster earnings’ throughout the Agreement and its absence from cl 12(b)(i) is also a persuasive factor in preferring Oceanic’s interpretation.

61    Oceanic has submitted that the Chief Industrial Magistrate erred in taking into account extraneous principles including ‘the evident purposes’ of accident pay and the perceived injustice created by Oceanic’s interpretation. Although the Court has found cl 12(b)(i) to be unambiguous, such factors may still be relevant in assessing the parties’ intention and giving effect to it.

62    It is not clear to the Court that the evident purposes of accident pay is to entitle injured workers to a payment which will ‘top up’ their workers compensation entitlements to a quantum of payment equivalent (or almost equivalent) to that which they would have been paid if they had worked their weekly roster.

63    Certainly such provisions are designed to ‘top up’ the pay of an injured worker and the ‘wider legislative background against which the Agreement was made and in which it was to operate’ (see Amcor at [30]) indicates such an intention however the Court can see no evidence on the face of the Agreement that suggests such payment (when combined with workers compensation entitlements) should in fact be equal (or near equal) to the employee’s normal rostered pay. The Court must give effect to the text of the clause. Accordingly the Court finds that such a purpose was not open on the terms of the Agreement and that the Chief Industrial Magistrate fell into error by applying such consideration. The Court is satisfied in any event that Oceanic’s interpretation fulfils the ‘general purpose’ of accident pay, as stated by the Chief Industrial Magistrate at [18] to be a payment ‘to supplement the workers’ compensation benefits of the injured worker in such a way as to bring their overall financial position much closer to the position they would be in if they had not been injured and were therefore able to remain at work earning their normal total remuneration package’.

64    Clearly the Chief Industrial Magistrate took into account conceptions of fairness between the parties when construing the clause. Given the Court’s finding on the plain meaning of the clause, such concepts do not prevail when assessing the meaning of the clause. It may however be reasonable to take such factors into account to ensure fairness between the parties (see Amcor per Callinan J at [131]).

65    The Court considers that Oceanic’s interpretation of cl 12(b)(i) does not result in a degree of unfairness that would warrant the alternate interpretation urged by Mr Parker. The learned Chief Industrial Magistrate at [19] took into account the fact that under Oceanic’s interpretation of cl 12(b)(i), an injured weekday worker under the Agreement would stand to be paid a quantum of accident pay which (when combined with workers compensation entitlements) would amount to a sum almost equivalent to that employee’s earnings had they worked, but that on the same interpretation a weekend worker such as Mr Parker would stand to be paid an amount that would bear ‘no resemblance’ to that employee’s normal earnings, given that the penalty rates applied to weekend work would not apply. The Chief Industrial Magistrate at [20] found that there was no evidence that the parties had any intention to discriminate against weekend shift operators in such a way and this factor contributed to his Honour’s finding that Mr Parker’s interpretation should be preferred.

66    This finding disregards Oceanic’s submission and his Honour’s own related observation at [18] that allowances such as shift allowances are ‘sometimes deleted for the purposes of accident pay on the basis that such shift allowances are not paid as part of a wage for the performance of work but are rather a form of compensation for the disruption of family and domestic arrangements, and in such circumstances should not be paid when the injured worker is in fact at home with his family’. Clause 9.5(a)(iii), which provides for weekend rates, may represent a clause providing similar compensation in that it assigns a higher rate of pay to hours of work conducted on the weekends, presumably to compensate weekend workers for the disruptions to family and personal lives that arise from regular weekend work. Under this reading, in the case of an injured weekend shift operator, the Chief Industrial Magistrate’s interpretation would dictate that the injured worker be compensated for the fact that some of his rostered hours fall on a weekend despite the fact that the worker does not attend work on those days and is presumably free from the disruptions normally associated with such work.

67    The text of cl 12(b)(i) remains determinative in its interpretation. The above considerations, while fortifying the Court’s conclusion that Oceanic’s interpretation of cl 12(b)(i) is to be preferred, are ultimately unnecessary in light of the Court’s finding on the plain meaning of the clause.

CONCLUSION

68     The Court is satisfied that the Chief Industrial Magistrate has erred in his interpretation of cl 12(b)(i). His Honour’s interpretation was contrary to the plain and ordinary meaning of the words contained with cl 12(b)(i) and his Honour’s failure to give effect to the definitions of ‘Classification Rate’ and ‘Overtime Rate’ within such interpretation constitutes an error of law. Accordingly the Court will order that the appeal be allowed, that the decision made by the Chief Industrial Magistrate dated 3 February 2010 be set aside and that the Orders made by the Chief Industrial Magistrate on 24 February 2010 be quashed.

Associate:

Dated:    17 September 2010