Beware of Drafting Issues in Agreements

Yet again, an employer has been taken by surprise as a result of how its enterprise agreement has been drafted. A major employer, Linfox Australia, believed its National Dangerous Goods Manager on a base salary of $140,000 (plus other benefits) was not covered by its enterprise agreement. That view was wrong.

The Fair Work Commission was tasked with deciding whether the coverage clause of the agreement extended to the employment of the National Manager (see Howell v Linfox Australia [2017] FWC 5995). The Manager’s position did not fit the classifications in the agreement. But that did not mean he was outside the scope of its coverage. Clause 2 was in these terms:

2.1 This Agreement covers:

1. (a) Linfox;
2. (b) each Employee; and
3. (c) the TWU,

in respect of the Sites specified in Appendix 1.
…”.

The Agreement defines employees as follows:

1. “Employee means an employee of Linfox who is a member, or is eligible to be a member, of the TWU who is employed at a Site.”

The Commission determined that the Applicant was eligible to be a member of the TWU and his Applicant’s employment was within this scope. The Agreement was expressed in other areas to apply to ‘employees’ rather than drivers which Linfox contended was the intention.

As a result, despite his level of earnings, he was able to proceed with his unfair dismissal claim.

LESSONS FOR EMPLOYERS

This should remind employers how critical the drafting process is with any agreement, but in particular, enterprise agreements. Specialist advise and expertise should always be sought to minimise risks of contrary or confusing interpretations.