CFMEU v Henry Walker Eltin Contracting Pty Ltd [2001] FCA 1009 (2 August 2001)

Last Updated: 7 August 2001

FEDERAL COURT OF AUSTRALIA

CFMEU v Henry Walker Eltin Contracting Pty Ltd [2001] FCA 1009

INDUSTRIAL LAW - whether respondent bound by certified agreement - whether respondent a successor, transmittee or assignee of the business or any part of the business within the meaning of par 170MB(2)(c) of the Workplace Relations Act 1996 (Cth) - whether agreement allowed for a change in salary when there was a change in the roster worked

Workplace Relations Act 1996 (Cth) ss 170LB, 170LI, 170LT, 170M, 170MB, 178, 179

Coal and Oil Shale Mine Workers' Superannuation Act 1989 (Qld)

PP Consultants Pty Ltd v Finance Sector Union of Australia [2000] HCA 59; 176 ALR 205, applied

Stellar Call Centres Pty Ltd v CEPU [2001] FCA 106; 103 IR 220, considered

Codelfa Construction Pty Ltd v State Rail Authority of NSW [1982] HCA 24; (1982) 149 CLR 337, followed

CONSTRUCTION FORESTRY MINING & ENERGY UNION v HENRY WALKER ELTIN CONTRACTING PTY LTD

Q 102 of 2001

BRANSON J

SYDNEY (via video link) (Heard in BRISBANE)

2 AUGUST 2001

IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY	Q 102 of 2001

BETWEEN:	CONSTRUCTION FORESTRY MINING & ENERGY UNION APPLICANT
AND:	HENRY WALKER ELTIN CONTRACTING PTY LIMITED RESPONDENT
JUDGE:	BRANSON J
DATE OF ORDER:	2 AUGUST 2001
WHERE MADE:	SYDNEY (via video link) (Heard in BRISBANE)

THE COURT ORDERS THAT:

1. It be declared that the respondent is bound by The Ebenezer Mining Company Pty Ltd Certified Agreement 1997 ("the Agreement").

2. It be declared that the salary payable to employees whose employment is subject to the Agreement is the salary prescribed by subclause 4.1 of the Agreement.

3. The applicant have liberty, exercisable within thirty days of the date hereof, to apply to the Court for the making of further orders on five days' written notice to the respondent.

Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.

IN THE FEDERAL COURT OF AUSTRALIA
QUEENSLAND DISTRICT REGISTRY	Q 102 of 2001

BETWEEN:	CONSTRUCTION FORESTRY MINING & ENERGY UNION APPLICANT
AND:	HENRY WALKER ELTIN CONTRACTING PTY LIMITED RESPONDENT

JUDGE:	BRANSON J
DATE:	2 AUGUST 2001
PLACE:	SYDNEY (via video link) (Heard in BRISBANE)

REASONS FOR DECISION

INTRODUCTION

1 By a further amended application the Construction Forestry Mining & Energy Union ("the Union") has claimed a declaration that Henry Walker Eltin Contracting Pty Ltd ("HWE") is bound by The Ebenezer Mining Company Pty Ltd Certified Agreement 1997 ("the Agreement") in relation to the operations of the coal handling preparation plant ("the CHPP") at the Ebenezer Coal Mine ("the Mine") previously operated by Ebenezer Mining Company Pty Ltd ("Ebenezer"). The CHPP is also on occasions referred to as the Ebenezer Mine Washplant. The Union further claims a declaration that, in effect, the salary prescribed by the Agreement may not be varied solely because any roster proposed to be worked under the Agreement is altered in accordance with the Agreement. In addition it seeks an order requiring the payment to its employees who work in the CHPP of the shortfall between the amount which they have respectively been paid by HWE and the amount which they should have been paid under the Agreement.

2 HWE denies that it is bound by the Agreement. It contends that it is not the successor, transmittee or assignee of the business or any part of the business of Ebenezer within the meaning of par 170MB(2)(c) of the Workplace Relations Act 1996 (Cth) ("the Act"). In the alternative HWE denies that it has failed to pay its employees the salary for which the Agreement provides. It contends that the Agreement allows for a change in salary when there has been a change in the roster worked.

3 For the reasons set out below I have concluded that HWE is bound by the Agreement, that the Agreement does not allow for a change in salary when there has been a change in the roster worked, and that HWE has failed to pay its employees the salary for which the Agreement provides.

BACKGROUND FACTS

4 In January 1989 Ebenezer purchased from Allied Queensland Coal Ltd the mining lease and the freehold title to the land on which the Mine is operated. Since that time Ebenezer has, by itself or by the use of contractors, mined, processed, washed, transported and sold coal produced at the Mine.

5 Ebenezer has always engaged a contractor to mine coal at the Mine. From about 1994 until January 2000 Ebenezer engaged Eltin Pty Ltd to mine the coal, deliver it to the Run of Mine ("ROM") Pad and to return the coarse rejects to the pit. Eltin Pty Ltd was also responsible for keeping the ROM Pad level. Following a company takeover HWE assumed the responsibilities of Eltin Pty Ltd at the Mine.

6 Until late 1989 the Mine did not have a facility for processing and washing coal. Coal from the Mine was trucked to another colliery where it was processed and washed before being delivered to a rail loading facility to be taken to the port of Brisbane. In about October 1989 Ebenezer completed the building of the CHPP and supporting infrastructure at the Mine. The CHPP commenced to operate in late 1989. At that time employees of Ebenezer worked on a rotating basis to operate the CHPP and the ROM Loader which deposits coal from the ROM Pad to the CHPP. From September 1999 HWE assumed the additional responsibility of operating the ROM Loader.

7 In the meantime, an application had been made to the Australian Industrial Relations Commission ("the AIRC") under Division 2 of Part VIB of the Act for the certification of the Agreement. The Agreement was certified by Commissioner Hodder of the AIRC on 25 November 1997 to come into force on 29 August 1997 and to remain in force until 28 August 2000. The parties to the Agreement were Ebenezer, the Union and the Communications Electrical, Electronic, Energy Information, Postal, Plumbing and Allied Services Unions of Australia.

8 In late 1999 Ebenezer and HWE discussed a proposal for HWE to take over the operation of the CHPP as well as the operation of the Mine and the ROM Pad. Agreement in general terms to implement this proposal was reached in January 2000, although the contract has still not been finalised.

9 It appears that Ebenezer terminated the employment of all of its employees who had been working in the CHPP with effect from 25 February 2000 paying them all of their entitlements under the Agreement. HWE advertised positions in the CHPP. The employees who had previously worked in the CHPP for Ebenezer were invited to apply for the advertised positions but were not guaranteed employment with HWE.

10 By letter dated 1 February 2000 HWE advised the Union, amongst other things, that:

"Given the different roster arrangements to be worked by HWE on the Washplant, as distinct from that previously worked by EMC, we believe that a staff contract is the most appropriate way to employ the staff at the Ebenezer Mine Washplant in these circumstances."

11 The Union responded by drawing the attention of HWE to s 170MB of the Act and to Part 5 of the Agreement. This response provoked an acknowledgment by HWE, contained in a letter dated 14 February 2000, that HWE was "bound by the purpose" of the Agreement. The letter indicated that HWE intended "to propose alternative roster arrangements" and concluded:

"Henry Walker Eltin intends to advise the CFMEU of what the alternative roster will be and the intended salary by 21 February 2000."

12 On about 22 February 2000 HWE employed six permanent employees at the CHPP utilising staff contracts. The terms of the staff contracts differed from the terms of the Agreement. At least one person, Brian Vincent Kennedy, who had worked for Ebenezer as a plant technician at the CHPP, was employed by HWE to perform substantially the same duties at CHPP.

THE AGREEMENT

13 The Agreement applies only to the Ebenezer Mine CHPP. As is mentioned above, it is expressed to bind Ebenezer, the Union and one other union.

14 Part 2 of the Agreement contains a co-operation provision and a procedure for avoiding disputes. This procedure may result in a matter requiring resolution being referred to the AIRC for determination. Part 2 also imposes an obligation on Ebenezer to discuss with the unions any decision to introduce major change in the workplace where that change is likely to have a significant effect on employees. The provision provides that "significant effect" includes:

"* termination of employment;

* major changes in the composition, operation or size of the workforce;

* major changes in the skills required of the workforce;

* the elimination or diminution of job or promotion opportunities or job tenure;

* the alteration of hours of work;

* the need for retraining;

* the transfer of employees to other work or locations;

* the restructuring of jobs."

15 Part 3 of the Agreement, which is concerned with employee duties and the employment relationship, provides, amongst other things, that employment is on a monthly basis for full-time employees and that ordinary hours of work shall be 35 hours per week.

16 Part 4 of the Agreement is concerned with salaries and related matters. Subclause 4.1.1 provides for only one classification and one salary; the classification is Plant Technician and the annual salary is $84,000. Clause 4.1.2 provides that the salary will be escalated by 1.5% on 28 April 1998 and a further 2.0% on 28 April 1999. Clause 4.2 provides as follows:

"What is included in the salaries paid to employees?

The Annual Salary in 4.1 includes payment for:

(a) Wages which would otherwise be paid under the award;

(b) All award penalties and allowances associated with working the roster including shift allowances, rostered overtime, and weekend penalties;

(c) All disabilities and allowances and other like payments which would otherwise be paid under the award;

(d) The West Moreton Allowance of $25.00 per week;

(e) Removal of any artificial barriers to employee's using their current skills or obtaining new skills;

(f) Employees accepting additional training during work hours to improve skills and performance;

(g) Leave loading as provided under the award;

(h) Payment for starting and finishing each shift `on the job';

(i) Quarterly unions meetings held at non-rostered times;

(j) Payment for holding and being expected to use a current First Aid Certificate. [Ebenezer] to provide training during employees rostered hours;

(k) Bonus;

(l) Working as part of a self managed team and accepting responsibility both individually and collectively for the performance of the shift."

17 Clause 4.4 provides for superannuation contributions by Ebenezer to the Queensland Coal and Oil Shale Mine Workers' Superannuation Fund ("QCOS") in the amounts respectively required from time to time by the Coal and Oil Shale Mine Workers' Superannuation Act 1989 (Qld) and the 1988 Coal Mining Industry Industrial Agreement - Occupational Superannuation. The clause further provides for employee contributions to QCOS.

18 The topics of rosters and overtime are dealt with in Part 5 of the Agreement. Clause 5.1 provides as follows:

"Roster

5.1.1 Roster requirements

[Ebenezer's] requirements are for a 2 panel 5¹/₂ day roster working 2 x 12 -hour shifts.

The Rosters are attached at Appendix `A'.

5.1.2 Roster changes

If, during the period of the agreement, the operational needs of the mine change and that change has an impact upon the roster [Ebenezer] will discuss that impact with employees and attempt to reach agreement on the design and implementation of a new roster.

If agreement cannot be reached [Ebenezer] may introduce a new roster to meet the changed needs provided that the new roster is fair and equitable and is consistent with occupational health and safety requirements. Any concerns by employees or the unions about the introduced roster may be addressed through the Procedure for avoiding disputes.

5.1.3 Roster panel allocation

An employee's allocation to a roster panel will not be changed unless the employee is given one week's notice of the change."

19 Appendix "A" to the Agreement includes a roster. The roster identifies employees by initials and indicates for each employee his or her daily attendance for a period apparently running from 27 April 1997 until 28 February 1998. It appears that the roster requires each employee to work four twelve-hour shifts per week.

STATUTORY PROVISIONS

20 Division 2 of Part VIB of the Act, which is comprised of ss 170LH-170LM, is concerned with the making of agreements with constitutional corporations or the Commonwealth. It is accepted by the parties that each of Ebenezer and HWE is a "constitutional corporation" within the meaning of the Act. Section 170LI provides:

"170LI Nature of agreement

(1) For an application to be made to the Commission under this Division, there must be an agreement, in writing, about matters pertaining to the relationship between:

(a) an employer who is a constitutional corporation or the Commonwealth; and

(b) all persons who, at any time when the agreement is in operation, are employed in a single business, or a part of a single business, of the employer and whose employment is subject to the agreement.

(2) The agreement must be made in accordance with section 170LJ, 170LK or 170LL."

21 Subsection 170LB(1) relevantly defines a "single business" for the purposes of Part VIB of the Act as "a business, project or undertaking that is carried on by an employer". Subsection 170LB(3) provides:

"For the purposes of this Part, a part of a single business includes, for example:

(a) a geographically distinct part of the single business; or

(b) a distinct operational or organisational unit within the single business."

22 Division 6 of Part VIB of the Act, which is comprised of ss 170M-170MB, is concerned with identifying the persons bound by certified agreements. Subsections 170M(1) and 170M(2) and subsection 170MB(2) provide:

"170M Persons bound in Division 2 cases

(1) If the application for certification states that the application is made under Division 2, the certified agreement binds:

(a) the employer; and

(b) all persons whose employment is, at any time when the agreement is in operation, subject to the agreement.

(2) If, in accordance with section 170LJ or 170LL, one or more organisations of employees made the agreement with the employer, the agreement also binds the one or more organisations."

"170MB Successor employers bound

....

(2) If:

(a) an employer is bound by a certified agreement; and

(b) the application for certification of the agreement stated that it was made under Division 2; and

(c) at a later time, a new employer that is a constitutional corporation or the Commonwealth becomes the successor, transmittee or assignee (whether immediate or not) of the whole or a part of the business concerned;

then, from the later time;

(d) the new employer is bound by the certified agreement, to the extent that it relates to the whole or the part of the business; and

(e) the previous employer ceases to be bound by the certified agreement, to the extent that it relates to the whole or the part of the business; and

(f) a reference to this Part to the employer includes a reference to the new employer, and ceases to refer to the previous employer, to the extent that the context relates to the whole or the part of the business."

CONSIDERATION

Is HWE bound by the Agreement?

23 In supplementary written submissions, the Union submitted that:

"The words `part of the business concerned' in section 170MB(2)(c) are ... plainly a reference back to the expression `single business' as defined in 170LB. The `business concerned' is the business regulated by the certified agreement since the entire part (except for multi employer agreements in 170LC - additional Operation of Part) is concerned with single business agreements as defined."

By contrast HWE in its supplementary written submissions, argued that:

"there is no significance to be attached to the words used in section 170LI(1)(b) to the proper construction of the phrase `the successor, transmittee or assignee ... of the whole or a part of the business concerned" in section 170MB(2)(c)."

In my view, the phrase "the whole or a part of the business concerned" in par 170MB(2)(c) is intended to refer to the whole or a part of the "single business, or a part of a single business" referred to in par 170LI(1)(b). That is, in the circumstances of this case, the "business concerned" within the meaning of par 170MB(2)(c) of the Act is the operation of the CHPP.

24 The Union contended that it was sufficient for its purposes to demonstrate that, in a practical sense, the operations of the first employer (ie relevantly, the operation of the CHPP) had been delivered into the hands of the successor employer and had retained their same character.

25 HWE argued first, that the submissions of the Union wrongly conflated "industry" with "business" and that while the work of HWE at the Mine placed it in the coal mining industry, it was not in the same business as Ebenezer. It submitted that an analogy could be drawn between its operation of the CHPP and the provision by others of maintenance services for machinery used in coal mines or of clerical and accounting services to the owners of coal mines.

26 Secondly, HWE contended that, in any event, it was not the successor, transmittee or assignee of any part of the business of Ebenezer within the meaning of par 170MB(2)(c) of the Act. It acknowledged that it had taken over part of the activities of Ebenezer but argued that, in doing so, it had not taken over all or any of the business of Ebenezer and Ebenezer had not disposed of any part of its business. It drew attention to the fact that potential coal purchasers continue to deal with Ebenezer and not HWE and that HWE has no rights with respect to the coal or the contracts for the sale of the coal. It emphasised that it is Ebenezer, which continues to own the CHPP, that determines the extent to which the CHPP is actually used because Ebenezer is entitled to direct HWE as to the amount of coal that is to be prepared for sale and when it is to be ready for sale.

27 Both parties contended that the appropriate test to be applied is that found in PP Consultants Pty Ltd v Finance Sector Union of Australia [2000] HCA 59; 176 ALR 205 ("PP Consultants"). In PP Consultants the High Court gave consideration to whether, for the purposes of par 149(1)(d) of the Act, which is concerned to identify persons bound by an award, the operator of a pharmacy business in Byron Bay was the successor, assignee or transmittee of the business or part of the business of St. George Bank Limited. The relevant award, the Banking Industry - St. George Bank Employees - Award 1995, was one which apparently reached to all employees of the St. George Bank. Following the closure of the St. George Bank branch at Byron Bay, a branch agency of the bank had been conducted by the operator of the pharmacy from the pharmacy.

28 It seems to me that the use of the phrase "the business concerned" in par 170MB(2)(c) may have an impact on the significance to be attached in the case of a certified agreement to the consideration by the High Court of the nature of a "business" for the purposes of par 149(1)(d) (see [23] above). However, in view of the approach adopted by the parties, I have considered it appropriate to proceed on the basis that the relevant test is that found in PP Consultants.

29 In PP Consultants, Gleeson CJ, Gaudron, McHugh and Gummow JJ in a joint judgment at [14]-[19] said:

"The question whether one person has taken over or succeeded to the business or part of the business of another is a mixed question of fact and law. For this reason and, also, because "business" is a chameleon-like word, it is not possible to formulate any general test to ascertain whether, for the purposes of s 149(1)(d) of the Act, one employer has succeeded to the business or part of the business of another. Even so it is possible to indicate the manner in which that question should generally be approached, at least when a non-government employer succeeds to the commercial activities of another non-government employer. As already indicated, special considerations apply when one government agency succeeds to the activities of another. And there may well be other considerations where a government contracts with a non-government body for the performance of functions previously carried out by a government authority.

As a general rule, the question whether a non-government employer who has taken over the commercial activities of another non-government employer has succeeded to the business or part of the business of that other employer will require the identification or characterisation of the business or the relevant part of the business of the first employer, as a first step. The second step is the identification of the character of the transferred business activities in the hands of the new employer. The final step is to compare the two. If, in substance, they bear the same character, then it will usually be the case that the new employer has succeeded to the business or part of the business of the previous employer.

The business of banking

It is not in issue that, through its branch in Byron Bay, the Bank carried on the business of banking and that the activities in which it there engaged were part of its banking business.

The essential characteristics of the business of banking are "the collection of money by receiving deposits upon loan, repayable when and as expressly or impliedly agreed upon, and the utilization of the money so collected by lending it again in such sums as are required". It involves the creation of distinct debtor and creditor relationships between the bank and those who deposit money with it and, also, between the bank and those who borrow from it.

Although the appellant has taken over the activities, or at least, a large part of the activities in which the Bank previously engaged in Byron Bay, it has not thereby engaged, for itself, in the business of banking. It does not, in accepting deposits, receive money on loan but instead, it receives, on behalf of the Bank, moneys lent to the Bank. Nor does it, in processing withdrawals, repay money lent to it. Rather, it repays, on behalf of the Bank, money lent to the Bank. And so far as it is involved in processing loans, it is not, itself, lending money, but is handing over money lent by the Bank.

It is correct to say that, in conducting the branch agency, the appellant is involved in banking activities. It is not, however, correct to say that it is carrying on banking business. It is carrying on the business of a bank agent. Moreover, the Bank has not disposed of any part of its business. All that has happened is that the Bank has changed the method by which it carried on its banking business in Byron Bay. Thus, no part of the Bank's business has been acquired by the appellant, whether as successor, assignee or transmittee."

30 In Stellar Call Centres Pty Ltd v CEPU [2001] FCA 106; 103 IR 220 the Full Court of this Court gave consideration to the decision of the High Court in PP Consultants. At [29] and [30] the Full Court observed:

"In the light of the observations in the joint judgment in the High Court ... it is no longer sufficient to ask whether the putative transmittor, the first employer, has `disposed of an important aspect of operating' its business. Rather, one must characterise the business or the relevant part of the business of the first employer, and see whether, so characterised, it substantially corresponds with the character attributable to `the transferred business activities in the hands of the new employer'.

The High Court must be taken impliedly to have rejected the suggestion of the Full Court in Finance Sector Union v PP Consultants ... that `it is logical to focus on the nature of the activities undertaken by the two employers and the question whether there is any material change in the nature of the employees' duties or working conditions'. As we understand it, even if there be complete identity between the duties and working conditions of the relevant employees of both employers, that will not attract the operation of s 149(1) unless the business in which those duties are performed for the new employer is in substance identical in character with the business, or a distinct part of the business, of the presumptive transmittor."

31 Limited evidence was placed before the Court as to the business of either Ebenezer or HWE. However, Robert James Mathieson, the Managing Director of Ebenezer, gave unchallenged evidence that, since Ebenezer purchased the Mine, Ebenezer has, by itself or by contractors, mined, processed, washed, transported and sold coal produced at the Mine. No evidence was given of Ebenezer being involved in any other business or businesses. I conclude that the overall business of Ebenezer is, broadly speaking, that of causing coal to be extracted from the Mine and rendered fit for sale, and selling that coal either for export or domestic consumption.

32 As to HWE, the evidence reveals that it operates the Mine, the ROM Loader and the CHPP as a contractor to Ebenezer. Additionally evidence was given that it "has work in the metalliferous industries throughout Australia, New Zealand, Indonesia, South America and Africa ..." and that it has a "civil branch as well and it, basically, does construction work across Australia". I conclude on the basis of this limited evidence that the overall business of HWE is that of contractor to the mining and construction industries.

33 The joint judgment of the High Court in PP Consultants suggests that it is necessary to identify or characterise the operation of the CHPP by Ebenezer as a first step. As mentioned above, I conclude that the overall business of Ebenezer is comprised, broadly speaking, of three aspects: the causing of coal to be extracted from the Mine, the rendering of that coal fit for sale, and the selling of that coal either for export or domestic consumption. In my view, in operating the CHPP Ebenezer was itself carrying on the second aspect of its overall business. The operation of the CHPP was in this sense, from the time that the CHPP became operational until approximately February 2000, a distinct part of the business of Ebenezer in the sense of a project or undertaking forming part of its overall business or a distinct operational unit within its overall business. In my view, the operation of the CHPP was not an activity ancillary to that business. I note, incidentally that, having regard to the terms of s 170LI of the Act, this may be presumed to have been the view taken by Commissioner Hodder when he certified the Agreement.

34 The second and third steps which the joint judgment of the High Court in PP Consultants indicates must be taken are the characterisation of the transferred business activity in the hands of HWE and the comparison of the character of the business in the hands of Ebenezer with its character in the hands of HWE. The transferred business activity (ie the operation of the CHPP) is now an aspect of HWE's total contracting business. Ebenezer now relies on HWE to operate the CHPP in the same way and to achieve the same results as were achieved when Ebenezer itself operated it. In the hands of HWE, the business activity which is the operation of the CHPP retains, in my view, the same character as it had when it was in the hands of Ebenezer. It continues to be the means whereby coal extracted from the Mine is rendered fit for sale by Ebenezer. By operating the CHPP, HWE is engaging in the second aspect of the overall business of Ebenezer as a contractor to Ebenezer.

35 This case is in this regard different from PP Consultants. In that case PP Consultants took over certain banking related activities previously undertaken by St. George Bank but it did not itself commence to engage in the business of banking in Byron Bay. St. George Bank did not, as a result of its agreement with PP Consultants, cease to engage in the business of banking in Byron Bay; it continued to engage in that aspect of its business using PP Consultants to undertake certain ancillary activities for it. By contrast in this case, when Ebenezer engaged HWE to operate the CHPP, it ceased itself to undertake the second aspect of its overall business, relying instead on HWE to process the coal so as to render it fit for sale.

36 Counsel for HWE, in identifying the business of Ebenezer, placed reliance on the asserted fact that "[t]he income received by Ebenezer is a function of the demand for coal, the price for particular types of coal and its ability to meet the market". Counsel sought to contrast this position with that of HWE. HWE's income from the operation of the CHPP is calculated by reference to an agreed rate per tonne of processed coal delivered to designated delivery points. The differences in the way in which Ebenezer and HWE respectively derive income are, in my view, of limited assistance in determining whether the business of operating the CHPP has the same character in the hands of HWE as it had in the hands of Ebenezer. Were it otherwise, the intended operation of par 170MB(2)(c) could be avoided by the simple device of an employer subcontracting the conduct of parts of its business to a wholly owned subsidiary company and agreeing a method of remuneration which did not involve the subsidiary in profit sharing with the parent company. For the same reasons, in my view, little if any weight is to be attributed to the fact that HWE may not, without the approval of Ebenezer, pass on to another entity the business of conducting the CHPP. It would be surprising if the intended operation of par 170MB(2)(c) could be avoided by the making by the employer of a subcontract, say with a subsidiary company, pursuant to which the subcontractor was obliged to perform its obligations itself unless it obtained the consent of the employer to do otherwise. Nothing in the majority judgment in PP Consultants leads me to conclude that their Honours took the view that the operation of par 149(1)(d) of the Act (and by analogy of par 170MB(2)(c)) can be so readily avoided. To the extent that support for this approach may be gleaned from the separate judgment of Callinan J, his Honour's views, while persuasive, are obiter only. They cannot prevail over what I understand to be the approach adopted in the majority judgment.

37 I conclude that upon commencing to operate the CHPP in approximately February 2000, HWE became bound by the Agreement as "the successor, transmittee or assignee ... of the whole or a part of the business concerned" within the meaning of par 170MB(2)(c) of the Act.

Has HWE failed to pay its employees the salaries for which the Agreement provides?

38 HWE submitted that:

"The terms of the certified agreement should be read so as to allow a change in the salary paid when there has been a change in the roster worked. See cl 4.2(b) and 5.1.2. The ability to pay a different amount is inherent in the capacity of the employer to change the roster in a fair and equitable way. Appropriate protection is granted by the grievance procedure in cl 2.2"

In the alternative, HWE submitted that:

"If the construction advanced is not accepted, then there should be implied into the agreement a term which provides for the alteration of salary in accordance with any change in the work done due to an alteration in roster."

39 It is inherent in the first of the above submissions that subclause 5.1.2 of the Agreement, properly construed, authorises the employer unilaterally to fix a new salary for the employees whose employment is subject to the Agreement consequent upon the introduction of a new roster subject only to the constraint that the new salary must objectively be "fair and equitable".

40 The notion of what is fair and equitable necessarily involves a strong element of judgment. Reasonable minds that have taken into account all relevant considerations and eschewed all irrelevant considerations may nonetheless be expected to reach different conclusions as to what is a fair and equitable salary for an employee undertaking particular work on a particular roster. In my view, neither the Agreement, nor the Act, provides any support for the proposition that the remuneration required to be paid to an employee working under the Agreement may not be able to be identified until a tribunal clothed with appropriate authority rules on whether a particular salary nominated by the employer is in fact fair and equitable.

41 Part 4 of the Agreement fixes the salary of employees at an annual figure and provides for that salary to be escalated by fixed percentages on identified dates. The annual figure is said to include payment for a wide range of matters with the result that there is no direct relationship between total hours worked, or a particular roster structure, and the remuneration payable to an employee. Perhaps more significantly, Part 4 of the Agreement makes no provision for the salary of employees provided for in the Part to be changed.

42 Part 5 of the Agreement similarly contains no express reference to salary changes. In view of the fundamental importance to all parties to a certified agreement of the remuneration to be paid to employees under the agreement, this must of itself be seen to be a strong indication that Part 5 is not intended to derogate from the operation of Part 4 of the Agreement. Moreover, there is a reading of subclause 5.1.2 reasonably open which undermines the principal submission of HWE. That reading is that any new roster to be introduced by HWE must be fair and equitable having regard to, amongst other things, the salary prescribed by Part 4 of the Agreement.

43 It is also of significance, in my view, that Part 2 of the Agreement, which imposes an obligation on the employer to discuss with the unions any decision to introduce major change in the workplace, does not list among the topics included within the concept of "significant effect" the topic of salary. This omission tends to support the conclusion that the Agreement was not intended to allow the employer to vary the salary to be paid under it.

44 A further relevant consideration, in my view, is that subs 178(1) of the Act provides for the imposition and recovery of penalties where an organisation or person bound by a certified agreement breaches a term of the agreement. Further subs 178(6) provides that:

"Where, in a proceeding against an employer under this section, it appears to the court concerned that an employee of the employer has not been paid an amount that the employer was required to pay under an ...agreement, the court may order the employer to pay to the employee the amount of the underpayment."

In addition s 179 of the Act authorises an employee to sue his or her employer for amounts required to be paid to the employee by a certified agreement. It would, in my view, be contrary to the intention of the legislature as disclosed by these provisions of the Act, for the amounts payable to an employee under a certified agreement to be other than certain and capable of determination by reference to the agreement itself. I further note, incidentally, that if the terms of the Agreement are to be understood in the way contended for by HWE, it might be thought to be surprising that the Agreement was found by Commissioner Hodder to pass the no-disadvantage test contained in Part VIE of the Act (see subs 170LT(2)).

45 I reject the submission that the terms of the Agreement are to be read so as to allow a change in the salary payable when there has been a change in the roster.

46 I further reject the alternative submission of HWE that there should be implied into the Agreement a term which provides for the alteration of salary in accordance with any change in the work done due to an alteration in roster. For essentially the same reasons as are set out above, I conclude that the implication of such a term would not be reasonable and equitable, is not necessary to give business efficacy to the Agreement, would not be an obvious reflection of the apparent intention of the parties to the Agreement, is not capable of clear expression and would contradict the express terms of the Agreement (see Codelfa Construction Pty Ltd v State Rail Authority of NSW [1982] HCA 24; (1982) 149 CLR 337 per Mason J at 347).

47 HWE did not dispute that if its submission as to the proper construction of the Agreement, and its alternative submission as to the term to be implied into the Agreement, were both rejected it must necessarily be found to have failed to pay its employees the salary for which the Agreement provides. I so find.

48 It will be declared that HWE is bound by the Agreement. It will further be declared that the salary payable to employees whose employment is subject to the Agreement is the salary prescribed by subclause 4.1 of the Agreement.

49 As was recognised by the parties, there is insufficient evidence before the Court to allow orders to be formulated for the payment by HWE to the employees whose employment is subject to the Agreement of the amounts by which they have respectively been underpaid or for the payments, if any, necessary for restoring the employees, as far as practicable, to the positions that they would respectively have been in had HWE paid the superannuation contributions provided for by subclause 4.4 of the Agreement. It seems likely that the parties will now be able to reach agreement as to the payments to be made by HWE. However, the Union will be given liberty, exercisable within thirty days of the publication of these reasons for judgment, to apply on five days' written notice to HWE, should the parties not be able to reach such agreement.

I certify that the preceding forty-nine (49) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Branson.

Associate:

Dated: 31 July 2001

Counsel for the Applicant:	Mr J Nolan
Solicitor for the Applicant:	Hall Payne
Counsel for the Respondent:	Mr G Martin SC
Solicitor for the Respondent:	Blake Dawson Waldron
Date of Hearing:	16 July 2001
Date of Judgment:	2 August 2001