Alex Matschoss v Anglo Coal (Capcoal Management) Pty Ltd - [2023] FWC 3466

[2023] FWC 3466

FAIR WORK COMMISSION

RECOMMENDATION

Fair Work Act 2009

s.739—Dispute resolution

Alex Matschoss
v

Anglo Coal (Capcoal Management) Pty Ltd

(C2021/6638)

VICE PRESIDENT ASBURY

BRISBANE, 22 DECEMBER 2023

Alleged dispute about any matters arising under the enterprise agreement and the NES; [s186(6)].

Background

Mr Alex Matschoss (Applicant) has made an application under s. 739 of the Fair Work Act 2009 (the FW Act) for the Fair Work Commission (Commission) to deal with a dispute in accordance with a dispute resolution procedure in the Capcoal Surface Operations Trades Enterprise Agreement 2020 (Agreement). The Respondent is Anglo Coal (Capcoal Management) Pty Ltd, the employer covered by the Agreement. The Applicant is employed by the Respondent at the Lake Lindsay Coal Mine.

The Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union known as the Australian Manufacturing Workers’ Union (AMWU) is covered by the Agreement. The Applicant is a member of the AMWU and is represented by the AMWU in the present application. The dispute concerns the construction of clause 3.7 of the Agreement in relation to the Respondent’s treatment of public holidays that fall within periods of long service leave by counting such public holidays as long service leave days taken by an employee.

In the Form F2 Application, the Applicant sought that the Commission deal with the dispute by conciliation in accordance with the dispute resolution procedures in clause 5.1 of the Agreement. The Applicant further sought that a recommendation be issued by the Commission pursuant to s. 595(2)(b) of the FW Act, to the effect that “in accordance with clause 3.7.6 of the Agreement, the Respondent should not count public holidays falling within a period of long service leave as being part of the long service leave taken by employees”.

The dispute was not resolved by conciliation before the Commission. It is accepted by both parties that the dispute resolution procedure in clause 5.1 of the Agreement allows the Commission to resolve the dispute by arbitration only where the parties specifically confer authority on the Commission to do so. The Respondent did not consent to arbitration and raised objections to the Commission exercising its discretion under s. 595(2)(b) to make a recommendation.

On 13 March 2023, I issued a Decision[1] finding that the discretion to make a recommendation in the present dispute has been triggered and that I intend to do so in dealing with the dispute. This Decision concerns the Recommendation that should be made by the Commission in accordance with s. 595(2)(b) of the FW Act. Further to the Decision issued on 13 March 2023, Directions were issued on 29 March 2023 requiring that the parties file outlines of submissions and statements of evidence that the parties intended to rely on in relation to the Recommendation that should be made by the Commission. On 24 April 2023, the Applicant filed a witness statement in support of his case. On 19 May 2023, the Respondent informed the Commission that it did not require the Applicant for cross-examination but requested that an oral hearing be conducted.

A hearing was conducted on 27 June 2023 by video link using Microsoft Teams. The Applicant’s witness statement[2] was admitted into evidence without objection. At the hearing, the Applicant was represented by Mr T Bunnag, Industrial Officer of the AMWU. The Respondent was represented by Mr J Hall of Ashurst. Permission was granted for the Respondent to be legally represented on the basis that I was satisfied that the matter involved some complexity in relation to the construction of clause 3.7 and its interaction with the Coal Mining Industry (Long Service Leave) Administration Act 1992 (Cth) (LSL Act). I was also satisfied that granting permission would enable the matter to be dealt with more efficiently and no issue of unfairness arose.

Issues in dispute

In relation to the dispute, the Applicant contends that the counting of public holidays falling within a period of long service leave as long service leave days and the resulting deduction of hours from employees’ long service leave balance by the Respondent, is contrary to clause 3.7.6 of the Agreement and s. 39AE of the LSL Act. In summary, clause 3.7.6 of the Agreement provides that “public holidays falling within a period of long service leave will not be counted as part of the long service leave”, and s. 39AE of the LSL Act provides that if the period during which an eligible employee takes long service leave includes a day or part-day that is a public holiday, the employee is taken not to be on long service leave on that whole day.

The Respondent contends that under the Agreement employees are paid an annualised “Normal Salary” which includes a component of Work Pattern Payment that has already factored in, and compensated for an estimated number of public holidays employees are anticipated to work in the relevant period. Due to the way remuneration is structured, the Respondent argues that employees are not entitled under the Agreement to an additional day of long service leave for a public holiday falling within a period of long service leave, because it would otherwise amount to “double dipping”. Accordingly, the Respondent says it is entitled to treat public holidays falling within a period of long service leave as long service leave days and deduct hours from the employees’ long service leave balance. In relation to ss. 39AC and 39AE of the LSL Act, the Respondent says those provisions are not engaged as they are not concerned with the circumstance where the Agreement separately remunerates employees above their base rate of pay as if they had worked the public holidays.

Legislative provisions

Coal Mining Industry (Long Service Leave) Administration Act 1992

The Object of the Coal Mining Industry (Long Service Leave) Administration Act 1992 (LSL Act) is set out in s. 3 as follows:

“3 Object
The main object of this Act is to make provision in relation to long service leave in the black coal mining industry by:

(a) establishing a Coal Mining Industry (Long Service Leave Funding) Corporation; and
(ab) providing minimum entitlements and rights in respect of long service leave for eligible employees; and
(b) requiring the Corporation to establish and maintain a Coal Mining Industry (Long Service Leave) Fund and to make payments out of the Fund to employers in the industry to reimburse them for payments made in respect of long service leave; and
(c) appropriating money for the purposes of the Fund in respect of the amounts of payroll levy paid by employers under the Coal Mining Industry (Long Service Leave) Payroll Levy Collection Act 1992.”

Section 39A(1) of Part 5A sets out the general rule in respect of employees’ entitlement to long service leave as follows:

“General Rule
(1) If an eligible employee completes a period of qualifying service that is, or periods of qualifying service that add up to, at least 8 years, the employee is entitled to long service leave under this Part in respect of that period, or those periods, of qualifying service.
…”

Section 39AA of sets out a formula for calculating minimum entitlements to long service leave based on a 35-hour week. Section 39AB is headed “Grant of long service leave” and provides as follows:

“39AB Grant of long service leave
(1) An eligible employee may apply, in writing, to his or her employer to take a period of long service leave.
(2) The employee may only apply to take a period of long service leave that:
(a) is a single continuous period of at least 14 days (being equivalent to a number of hours of long service leave as agreed with the employer); and
(b) does not exceed the employee’s LSL credit at the time the leave is to be taken.

Note: An employee is taken not to be on long service leave on public holidays and during certain other periods of absence (see section 39AE).

(3) As soon as practicable, but no later than 14 days after the application is made, the employer must give the employee a written response:
(a) stating whether or not the employer grants the long service leave; and
(b) if the employer refuses to grant the long service leave—giving details of the reasons for the refusal.
Civil penalty: 60 penalty units.

(4) The employer may refuse to grant long service leave only on reasonable business grounds.
Civil penalty: 60 penalty units

…”

Section 39AC deals with payment for long service leave as follows:

“(1) If an eligible employee takes a period of long service leave, the employer must pay the employee for the long service leave no less than an amount that is equal to the base rate of pay (including incentive‑based payments and bonuses) that would have been payable to the employee during the period had the employee not taken the leave.
Civil penalty: 60 penalty units.
(3) In this section:
(a) a reference to the base rate of pay payable to an employee is a reference to the employee’s base rate of pay before any amounts are deducted under a salary sacrifice arrangement; and
(b) a reference to an incentive‑based payment in relation to an employee is a reference to a payment of that kind that is paid to the employee at least once a month; and
(c) a reference to a bonus in relation to an employee is a reference to a bonus that is paid to the employee at least once a month.

Note: Division 4 of this Part provides other remedies for contraventions of civil penalty provisions.”

In relation to the manner of payment for long service leave, s. 39AD provides as follows:

“If an eligible employee takes a period of long service leave, the employer must pay the employee for the long service leave:
(a) at the same time as the employer would have paid the employee during the period if the employee had not taken the leave; or
(b) if the employee requests to be paid in advance for the whole period and an industrial instrument that covers the employee expressly allows the employee to be paid in advance for long service leave—in accordance with the employee’s request.

Civil penalty: 60 penalty units.
Note: Division 4 of this Part provides other remedies for contraventions of civil penalty provisions.”

Where public holidays fall within a period of long service leave taken by an employee, s. 39AE provides:

“39AE Public holidays etc. not to count as long service leave
(1) If the period during which an eligible employee takes long service leave includes a day or part‑day that is a public holiday in the place where the employee is based for work purposes:
(a) the employee is taken not to be on long service leave on that whole day; and
(b) the public holiday is taken not to break the continuity of the period of long service leave.

(2) If the period during which an eligible employee takes long service leave includes a period of absence from employment under Division 8 of Part 2‑2 of the Fair Work Act 2009 (which deals with community service leave):
(a) the employee is taken not to be on long service leave for the period of absence; and
(b) the period of absence is taken not to break the continuity of the period of long service leave.”

Fair Work Act 2009

Section 113 of the FW Act deals with long service leave in the following terms:
“113 Entitlement to long service leave
Entitlement in accordance with applicable award‑derived long service leave terms
(1) If there are applicable award‑derived long service leave terms (see subsection (3)) in relation to an employee, the employee is entitled to long service leave in accordance with those terms.

Note: This Act does not exclude State and Territory laws that deal with long service leave, except in relation to employees who are entitled to long service leave under this Division (see paragraph 27(2)(g)), and except as provided in subsection 113A(3).
(2) However, subsection (1) does not apply if:

(a) a workplace agreement, or an AWA, that came into operation before the commencement of this Part applies to the employee; or

(b) one of the following kinds of instrument that came into operation before the commencement of this Part applies to the employee and expressly deals with long service leave:
(i) an enterprise agreement;
(ii) a preserved State agreement;
(iii) a workplace determination;
(iv) a pre‑reform certified agreement;
(v) a pre‑reform AWA;
(vi) a section 170MX award;
(vii) an old IR agreement.

Note: If there ceases to be any agreement or instrument of a kind referred to in paragraph (a) or (b) that applies to the employee, the employee will, at that time, become entitled under subsection (1) to long service leave in accordance with applicable award‑derived long service leave terms.
(3) Applicable award‑derived long service leave terms, in relation to an employee, are:
(a) terms of an award, or a State reference transitional award, that (disregarding the effect of any instrument of a kind referred to in subsection (2)):
(i) would have applied to the employee at the test time (see subsection (3A)) if the employee had, at that time, been in his or her current circumstances of employment; and
(ii) would have entitled the employee to long service leave; and

(b) any terms of the award, or the State reference transitional award, that are ancillary or incidental to the terms referred to in paragraph (a).

(3A) For the purpose of subparagraph (3)(a)(i), the test time is:
(a) immediately before the commencement of this Part; or
(b) if the employee is a Division 2B State reference employee (as defined in Schedule 2 to the Transitional Act)—immediately before the Division 2B referral commencement (as defined in that Schedule).

Entitlement in accordance with applicable agreement‑derived long service leave terms

(4) If there are applicable agreement‑derived long service leave terms (see subsection (5)) in relation to an employee, the employee is entitled to long service leave in accordance with those terms.

(5) There are applicable agreement‑derived long service leave terms, in relation to an employee if:

(a) an order under subsection (6) is in operation in relation to terms of an instrument; and

(b) those terms of the instrument would have applied to the employee immediately before the commencement of this Part if the employee had, at that time, been in his or her current circumstances of employment; and

(c) there are no applicable award‑derived long service leave terms in relation to the employee.

(6) If the FWC is satisfied that:

(a) any of the following instruments that was in operation immediately before the commencement of this Part contained terms entitling employees to long service leave:

(i) an enterprise agreement;
(ii) a collective agreement;
(iii) a pre‑reform certified agreement;
(iv) an old IR agreement; and

(b) those terms constituted a long service leave scheme that was applying in more than one State or Territory; and

(c) the scheme, considered on an overall basis, is no less beneficial to the employees than the long service leave entitlements that would otherwise apply in relation to the employees under State and Territory laws;

the FWC may, on application by, or on behalf of, a person to whom the instrument applies, make an order that those terms of the instrument (and any terms that are ancillary or incidental to those terms) are applicable agreement‑derived long service leave terms.

References to instruments

(7) References in this section to a kind of instrument (other than an enterprise agreement) are references to a transitional instrument of that kind, as continued in existence by Schedule 3 to the Transitional Act.”

The meaning of public holidays is defined in s. 4 of the LSL Act to have “the same meaning as in the Fair Work Act 2009”. Section 115 of the FW Act provides that each of the following days is a public holiday: 1 January (New Year’s Day); 26 January (Australia Day); Good Friday; Easter Monday; 25 April (Anzac Day); the Queen’s birthday holiday; 25 December (Christmas Day); and 26 December (Boxing Day). Public holidays also include any other day, or part‑day, declared or prescribed by or under a law of a State or Territory to be observed generally within the State or Territory, or a region of the State or Territory, as a public holiday, unless otherwise excluded by regulations.

The reference to “base rate of pay” in the LSL Act, similarly, refers to the definition under Fair Work Act 2009.[3] Section 16 of the FW Act provides for the meaning of base rate of pay as follows:
“16 Meaning of base rate of pay
General meaning
(1) The base rate of pay of a national system employee is the rate of pay payable to the employee for his or her ordinary hours of work, but not including any of the following:
(a) incentive‑based payments and bonuses;
(b) loadings;
(c) monetary allowances;
(d) overtime or penalty rates;
(e) any other separately identifiable amounts.
…”

Section 114 of the FW Act provides for the entitlement of employees to be absent from employment on public holiday as follows:

“114 Entitlement to be absent from employment on public holiday
Employee entitled to be absent on public holiday
(1) An employee is entitled to be absent from his or her employment on a day or part‑day that is a public holiday in the place where the employee is based for work purposes.
Reasonable requests to work on public holidays
(2) However, an employer may request an employee to work on a public holiday if the request is reasonable.
(3) If an employer requests an employee to work on a public holiday, the employee may refuse the request if:
(a) the request is not reasonable; or
(b) the refusal is reasonable.

(4) In determining whether a request, or a refusal of a request, to work on a public holiday is reasonable, the following must be taken into account:
(a) the nature of the employer’s workplace or enterprise (including its operational requirements), and the nature of the work performed by the employee;
(b) the employee’s personal circumstances, including family responsibilities;
(c)    whether the employee could reasonably expect that the employer might request work on the public holiday;
(d)    whether the employee is entitled to receive overtime payments, penalty rates or other compensation for, or a level of remuneration that reflects an expectation of, work on the public holiday;
(e)    the type of employment of the employee (for example, whether full‑time, part‑time, casual or shiftwork);
(f)     the amount of notice in advance of the public holiday given by the employer when making the request;
(g)    in relation to the refusal of a request—the amount of notice in advance of the public holiday given by the employee when refusing the request;
(h)    any other relevant matter.”

Section 116 of the FW Act regulates payments for absence on public holidays in the following terms:

“If, in accordance with this Division, an employee is absent from his or her employment on a day or part‑day that is a public holiday, the employer must pay the employee at the employee’s base rate of pay for the employee’s ordinary hours of work on the day or part‑day.
Note: If the employee does not have ordinary hours of work on the public holiday, the employee is not entitled to payment under this section. For example, the employee is not entitled to payment if the employee is a casual employee who is not rostered on for the public holiday, or is a part‑time employee whose part‑time hours do not include the day of the week on which the public holiday occurs.”

Relevant provisions of the Agreement

The Agreement was approved by the Commission on 7 September 2020 with undertakings, which pursuant to s. 201(3) of the FW Act, are taken to be a term of the Agreement. Relevantly, the undertakings numbered 1, 4 and 8 provide as follows:

“1. The Agreement will be read and interpreted in conjunction with the National Employment Standards (NES). Where there is an inconsistency between the Agreement and the NES, and the NES provides a greater benefit, the NES provision will apply to the extent of the inconsistency.

…
4. For the avoidance of doubt, a public holiday for the purposes of clause 3.3.1 of the Agreement includes any other day or part day declared or prescribed by or under a law of the State of Queensland to be observed generally within Queensland, or a region of Queensland, as a public holiday.
…
8. For the avoidance of doubt, employees are entitled to be represented at all steps of the disputes resolution procedure set out in clause 5.1 of the Agreement.”

Clause 3.0 of the Agreement deals with employees’ leave and absence arrangements. Long service leave is dealt with in clause 3.7 as follows:

“3.7 Long Service Leave
3.7.1 Long Service Leave will be calculated and administered in accordance with the requirements of the Coal Mining Industry (Long Service Leave) Administration Act 1992 (as amended from time to time).

3.7.2 You will be entitled to thirteen (13) weeks long service leave after the completion of eight (8) years continuous service in the coal mining industry.

3.7.3 Capcoal will recognise past service in the coal mining industry notwithstanding any interruption to or termination of employment in the coal mining industry which:

(a) Has been made by an employer merely with the intention of avoiding any obligation in respect of long service leave; or
(b) Occurs because of a change of employment in the coal mining industry which is not greater than three (3) months or such longer period as may be agreed by Capcoal.

3.7.4 The period of any break in service does not count as service.
3.7.5 After you first become entitled to thirteen (13) weeks long service leave, you may take subsequent accrued pro-rata long service leave after each sixty-four (64) weeks of continuous service in the coal mining industry.

3.7.6 Public holidays falling within a period of long service leave will not be counted as part of the long service leave.

3.7.7     Where your employment terminates:
(a)     Due to statute, ill health or death Capcoal will pay to you, on a pro-rata basis, any accrued entitlement to long service leave.
(b)     For reasons other than those set out in clause 3.7.7(a) where you have accrued a minimum of thirteen (13) weeks of long service leave, Capcoal will, upon a request from you, pay you on a pro-rata basis for any long service leave accrued.

3.7.8 Where you are retrenched by Capcoal and you have completed a minimum of six (6) years continuous service in the coal mining industry, Capcoal will pay you for any accrued long service leave on a pro-rata basis where, despite all reasonable steps, you have been unable to obtain further employment in the coal mining industry by the earliest of:

(a) The expiration of three (3) months since the date of your retrenchment; or
(b) Your death.

3.7.9 Any payments made under this Clause will be equivalent to the amount Capcoal is to be reimbursed from statutory long service leave arrangements applying in the coal mining industry.

3.7.10 Contributions to meet any obligations arising from any statutory long service leave arrangements will be made on the basis of the sum of the Base Salary (clause 2.6.2), Location Allowance (clause 2.6.3) and any Work Pattern Payment (clause 2.6.4) applicable to you from time to time.

3.7.11 Payments during long service leave will be made in accordance with the pay cycle.”

In relation to public holidays, clause 3.3 provides:

“3.3.1 Subject to the provisions of this Agreement, and unless you are requested to work public holidays, you will be entitled to the following public holidays or any day gazetted by the Queensland State Government to be observed in lieu of such public holidays, without loss of pay:

NEW YEAR’S DAY
EASTER MONDAY
QUEEN’S BIRTHDAY
BOXING DAY AUSTRALIA DAY
ANZAC DAY
CLERMONT SHOW DAY
EASTER SATURDAY GOOD FRIDAY
LABOUR//MAY DAY
CHRISTMAS DAY
EASTER SUNDAY

3.3.2 Any of these days may be moved to another day by agreement between Capcoal and the majority of directly affected employees. In those circumstances the agreed day becomes the Public Holiday and the former day becomes an ordinary working day.

3.3.3 If you are working a continuous roster and you are required to work on a public holiday (with the exception of 25 and 26 December), no additional payments apply as the remuneration provided under Clause 2.6 and/or the additional annual leave entitlement in clause 3.1 comprehends such work.

3.3.4 Capcoal will, if practicable, give one (1) weeks’ notice of the requirement to work on a public holiday.

3.3.5 Notwithstanding clause 3.3.2, you will not be requested to work on Christmas Day 25^th December and Boxing Day 26^th December as per your normal roster start and finish times.

3.3.6 Where you are requested to work under clause 3.3.1 you may refuse the request if you have reasonable grounds for doing so.”

For annual leave, clause 3.1 states that annual leave is accrued progressively during a year of service and is credited to the employee that way, and the amount of annual leave entitlements depends on the roster worked. Clause 3.1 lists the following rosters:

· Monday to Friday / Five Day Roster Employees
· Seven Day Roster Employees

In Attachment 1 to the Agreement, the Five Day Roster and Seven Day Roster are further broken down into the following specific rosters:

·   5-Day 8.5 hr 5D5A4N
·   5-Day 8.5 hr 5D 5A
·   5-Day day shift only 4 on 3 off, 12 hour shifts
·   7-Day, Day Only, 10 hr Roster
·   7-Day, Day/Night, 12 hr Roster
·   7-Day, Day/Night, 12.25 hr Roster

Clause 3.1 outlines and provides examples of how annual leave is calculated based on the Five Day and Seven Day rosters, as follows: a Monday to Friday employee who works 5 shifts per week is entitled to 25 shifts of annual leave (5 weeks x 5 shifts per week); a 7-Day Roster employee who works an average of 3.5 shifts per week over the roster cycle is entitled to 21 shifts of annual leave (6 weeks x 3.5 shifts per week). Further, clause 3.1.2 states that when an employee takes annual leave, they will be paid at their normal salary.

Remuneration under the Agreement is dealt with in clause 2.6.1. It provides that an employees will be paid a “Normal Salary” which is the sum of various salary components:

“2.6.1 You will be paid the relevant salary components, according to your role as contained in this Clause. Your remuneration is the sum of these components. Your “Normal Salary” is your base salary, plus location allowance, plus work pattern payment (if applicable) plus team leader payment (if applicable) plus superannuation.”

“base Salary” is set out in clause 2.6.2 in a tabular form stipulating the respective hourly and yearly base salary rates for the classifications of Coal Operator – Maintenance, Coal Technician – Entry Level and Coal Technician from Year 1 to Year 4.

“Location Allowance” is provided for in clause 2.6.3. Employees are paid a Location Allowance in the following amounts: $12,398.10 (Year 1); $12,646.06 (Year 2); $12,898.98 (Year 3); and $13,156.96 (Year 4).

“Work Pattern Payment” is calculated using a set of rules set out in clause 2.6.4 as extracted below. The specific amounts of Work Pattern payment to which an employee is entitled are listed in Attachment 1 of the Agreement. Those amounts vary considerably depending on the classification of the employee, the year of service, and the specific roster (referred to above) worked.

“2.6.4 Work Pattern Payment
The Work Pattern Payment for any particular roster will be calculated as follows:
·Ordinary hours worked between Monday and Friday will be paid at single time;
·The first 4 ordinary hours worked on a Saturday will be paid at time and a half;
·Any ordinary hours worked on a Saturday after the first 4 hours will be paid at double time;
·Any ordinary hours worked on a Sunday will be paid at double time;
·For Seven Day Roster Employees, all rostered hours in excess of the ordinary hours in a shift will be paid at double time;
·For Five Day Roster Employees, the first 2.5 rostered hours worked in excess of the ordinary hours in a shift will be paid at time and a half, with any additional rostered hours which exceed the ordinary hours in a shift paid at double time.
·Rotating night shifts and afternoon shifts will attract a 15% penalty;
·Permanent night shifts will attract a 25% penalty;
·Ordinary hours worked on a public holiday will be paid at double time.
·Hours in excess of ordinary hours worked on a public holiday will be paid at triple time.

The Work Pattern Payments for current rosters are outlined in Attachment 1.”

In relation to Superannuation, clause 2.6.8 provides that the Respondent will, “in satisfaction of its obligations under the Superannuation Guarantee (Administration) Act 1992 (Cth) and any relevant State legislation, make superannuation contributions on your behalf of (currently) 9.5% of your Base Salary, Location Allowance, Work Pattern Payment and Team Leader Payment (if applicable) and any other payments required by law make superannuation contributions”.

Clause 2.7 is headed “Working arrangements and hours of works”. Clause 2.7.1 provides that ordinary hours are an average of 35 per week over the applicable roster cycle, however employees will be required to work any reasonable number of hours to perform their role. Clause 2.7.2 provides that employees may be required to work on weekends as part of their roster arrangements. Clause 2.7.4 states:

“The remuneration provided under Clause 2.6 above covers all aspects of the work, including any requirement to work shift work and/or outside ordinary hours and/or on weekends and/or on public holidays, in order to carry out your duties.”

Approach to statutory construction

The approach to construing a statute is well established. The starting point is to construe the words of a statute according to their ordinary meaning having regard to their context and legislative purpose. Context includes the existing state of the law and the mischief the legislative provisions was intended to remedy.[4] Regard may also be had to the legislative history in order to work out what a current legislative provision was intended to achieve.[5]

Each provision of the statute must be read in context by reference to the language of the statute as a whole.[6] The relevant legislative context may operate to limit a word or expression of wide possible connotation.[7] The literal meaning (or the ordinary grammatical meaning) of the words of a statutory provision may be displaced by the context and legislative purpose, as the majority observed in Project Blue Sky:

“… the duty of a court is to give the words of a statutory provision the meaning that the legislature is taken to have intended them to have. Ordinarily, that meaning (the legal meaning) will correspond with the grammatical meaning of the provision. But not always. The context of the words, the consequences of a literal or grammatical construction, the purpose of the statute or the canons of construction may require the words of a legislative provision to be read in a way that does not correspond with the literal or grammatical meaning.”[8]

The provisions of a statute must be read together such that they fit with one another. This may require a provision to be read more narrowly than it would if it stood on its own.[9]

More recently, in Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue[10] (Alcan) the High Court described the task of legislative interpretation in the following terms:

“This Court has stated on many occasions that the task of statutory construction must begin with a consideration of the text itself. Historical considerations and extrinsic materials cannot be relied on to displace the clear meaning of the text. The language which has actually been employed in the text of legislation is the surest guide to legislative intention. The meaning of the text may require consideration of the context, which includes the general purpose and policy of a provision, in particular the mischief it is seeking to remedy.”

The approach to construing an enterprise agreement

The approach and the principles relevant to the task of construing the terms of an enterprise agreement were set out in a Decision of a Full Bench of the Commission in Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU) v Berri Pty Ltd[11]. The relevant passage setting out the principles is well known, and it is not necessary to repeat it. More recently, in AMA (Victoria) Ltd and Australian Salaried Medical Officers Federation v The Royal Women’s Hospital[12], a Full Bench of the Commission distilled those principles from the Full Court of the Federal Court majority in James Cook University v Ridd[13] as follows:

“The starting point is the ordinary meaning of the words, read as a whole and in context.
A purposive approach is preferred to a narrow or pedantic approach – the framers of such documents were likely to be of a practical bent of mind. The interpretation turns upon the language of the particular agreement, understood in the light of its industrial context and purpose.
Context is not confined to the words of the instrument surrounding the expression to be construed. It may extend to the entire document of which it is a part, or to other documents with which there is an association.
Context may include ideas that gave rise to an expression in a document from which it has been taken.
Recourse may be had to the history of a particular clause where the circumstances allow the court to conclude that a clause in an award is the product of a history, out of which it grew to be adopted in its present form.
A generous construction is preferred over a strictly literal approach but agreements should make sense according to the basic conventions of the English language.
Words are not to be interpreted in a vacuum divorced from industrial realities but in the light of the customs and working conditions of the particular industry.”[14]

Also relevant in the present case is the principle discussed by the Full Bench of the Commission in Berri to the effect that as a general principle, all words in an enterprise agreement must prima facie be given some work to do. In this regard, the Full Bench in Berri noted that while enterprise agreements are not statutory instruments, the mode of textual analysis developed in the context of general law in relation to the interpretation of statutes, may also be applicable to the construction of agreements.[15]

I have applied these principles in dealing with the matters in dispute.

Evidence and Submissions

AMWU/Applicant

The Applicant is employed by the Respondent at the Lake Lindsay Coal Mine. The AMWU’s submissions on behalf of the Applicant can be summarised as follows. From around mid-2021, the Respondent’s practice has been to deduct long service leave when an employee takes long service leave on a public holiday. As such, the dispute relates to the Respondent’s treatment of long service leave provisions under the Agreement, specifically clause 3.7 which outlines long service leave arrangements for the Respondent’s employees, and states that “Long Service Leave will be calculated and administered in accordance with the requirements of the [LSL Act]”.

The Respondent’s practice was said by the AMWU to be inconsistent with s. 39AE of the LSL Act which provides that where an employee takes long service leave that includes a day or part-day that is a public holiday in the place where the employees is based for work purposes, the employee is taken not be on long service leave on that whole day. Moreover, clause 3.7.6 of the Agreement reflects s. 39AE of the LSL Act and stipulates that “Public holidays falling within a period of long service leave will not be counted as part of the long service leave”.

The Applicant provided a statement in which he said that the Respondent’s position in relation to the application of clause 3.7 of the Agreement has shifted over time. As late as May 2021 (during the life of the current Agreement), the Respondent’s practice was not to deduct long service leave on a day that was a public holiday. Between 13 April 2021 and 7 May 2021, the Applicant took long service leave which equated to a period of 14 days or the equivalent of 140 ordinary hours. However, because of a public holiday falling within that period of long service leave, only 130 hours of long service leave was deducted from his accruals as shown on a Coal Long Service Leave form, appended to his witness statement. In mid-2021, the Respondent unilaterally changed its approach and commenced deducting long service leave from employees if a public holiday fell in a period of long service leave.

The AMWU submitted that applying the principles set out in AMWU v Berri Pty Ltd (Berri)[16], clause 3.7 is clear, unambiguous and not susceptible to more than one meaning so that evidence of the surrounding circumstances will not be admitted to change the plain language of the Agreement. Clause 3.7.1 of the Agreement requires the Respondent to calculate and administer long service leave “in accordance with the requirements of the Coal Mining Industry (Long Service Leave) Administration Act 1992”. The calculation and administration of long service leave includes the treatment of public holidays that fall during periods of long service. Section 39AE of the LSL Act expressly and clearly states that if the period during which an eligible employee takes long service leave includes a day or part-day that is a public holiday, the employee is not taken to be on long service leave for that day. Similarly, subclause 3.7.6 contains unambiguous language which states that public holidays that fall within a period of long service leave will not be counted as part of long service leave.

Accordingly, a reasonable person having regard to the plain meaning of the words in clause 3.7 of the Agreement could only understand that there is a single meaning – public holidays that fall during a period of long service leave do not count as long service leave, as required by the LSL Act. Based on this single meaning, the AMWU’s view is that in administering a period of long service leave, the Respondent should take all necessary steps to comply with the above terms. That includes working with the Coal Mining Industry (Long Service Leave Funding) Corporation when submitting employee long service leave claim forms to ensure that deductions from employees’ accruals for long service leave are not made for days that should be treated as public holidays. Similarly, in calculating long service leave, the Respondent should not treat public holidays as being a day of long service leave. For example, if the Applicant takes a period of two weeks long service leave, which includes one public holiday, that one public holiday should not be calculated as being long service leave.

As there is such a clear and unambiguous set of terms, there should be little disagreement between the parties over how those terms should be applied in the workplace by the Respondent. Indeed, prior to 2021, that was the case. However, the Respondent’s new practice in relation to clause 3.7 of the Agreement is to deduct long service leave when an employee takes long service leave on a public holiday which they would otherwise have been rostered to work, because such shift work employees are already compensated for rostered work on public holidays. The Respondent has asserted that this is to avoid employees receiving a ‘double benefit’. In the Applicant’s view, the Respondent has invited the Commission, when construing s. 39AE of the LSL Act and clause 3.7 of the Agreement, to draw a distinction between public holidays on which an employee is rostered to work (and therefore paid as part of the salary arrangements) and public holidays on which an employee is not rostered to work.

The Respondent’s interpretation of both s. 39AE of the LSL Act and clause 3.7 of the Agreement is wrong because neither the legislation nor the Agreement makes a distinction between rostered and un-rostered public holidays. The legislation and the Agreement simply refer to public holidays and state that an employee will not be deducted long service leave on those public holidays, whether the employee is rostered to perform work or not. The Respondent’s interpretation involves a re-writing of both the LSL Act and the Agreement to insert words that do not exist.

Moreover, the Commission has previously considered in Application by Central Queensland Services Pty Ltd[17] the terms of the BMA Daunia Mine Enterprise Agreement 2014 (Daunia Agreement) that explicitly sought to deduct long service leave from workers in circumstances when they were rostered to work public holidays and were remunerated as part of their salary. That argument is said by the Applicant to be the same argument adopted by the Respondent in the present case.

Clause 18.4(i) of the Daunia Agreement provides that:

“If a public holiday falls during a period of an employee’s long service leave and that employee would have been rostered to work, the company will deduct that day from the employee’s long service leave accrual (in accordance with clause 18.4(e)). This treatment recognises that the employee’s Total Salary includes payment at the rate of triple time for working on the public holiday.”

In deciding to approve the Daunia Agreement, the Commission stated the following in response to the CFMEU’s objection to the approval on the basis that clause 18.4(i) was inconsistent with s 39AE of the Act:

“Clause 18.4(1) [sic] of the Agreement is a different matter. By virtue of s. 192 where the Commission considers that compliance with an agreement may result in a person committing an offence against a law of the Commonwealth or being liable to pay a pecuniary penalty in respect of such a contravention, the Commission may refuse to approve an agreement. The clause in question appears to provide for the absorption of public holidays into periods of long service leave, contrary to the provisions of the Coal Mining Industry (Long Service Leave) Administration Act 1992. Accordingly, out of an abundance of caution, I will consider any undertaking that BMA seeks to offer, subject to the views of the bargaining representatives.”

The Daunia Agreement was approved by the Commission after an undertaking had been given with respect to clause 18.4(i) in the following terms:

“In relation to the BMA Daunia Mine Enterprise Agreement 2014 (Agreement) filed with the Fair Work Commission for approval on 6 November 2014, Central Queensland Services Ply Ltd, the Employer bound by the Agreement, undertakes that in relation to clause 18.4(i) of the Agreement, it will not deduct public holidays occurring during long service leave from an employee’s long service leave accrual where contrary to the provisions of the Coal Mining Industry (Long Service Leave) Administration Act 1992 (Cth).”

The AMWU submitted that the above analysis has two implications for the current dispute:

There is no explicit wording within clause 3.7 of the Agreement or anywhere in the Agreement when read as a whole, that allows for the Respondent to deduct long service leave when an employee takes long service leave on a public holiday which they would otherwise have been rostered to work and been paid for. Had the parties intended for this to be the intent of clause 3.7, particularly subclause 3.7.6, then the words in the Agreement would have reflected this as was the case in the Daunia Agreement; and

Even if clause 3.7 of the Agreement contained such explicit wording as appeared at clause 18.4(i) of the Daunia Agreement, then that would be inconsistent with s. 39AE of the Act. Clause 3.7 clearly states that the long service leave will be both calculated and administered in accordance with the Act.

In summary, the Applicant submitted that given that the Commission has indicated the discretion to issue a recommendation has been triggered in this matter, the Applicant’s view is that the words in the LSL Act and the Agreement are clear and unambiguous. The Respondent’s current application of the disputed provisions, whereby they absorb public holidays into a period of long service taken by employees, is inconsistent with both the Act and the terms of the Agreement. Consequently, the Applicant seeks that the Commission:

“i.Considers the plain meaning of the words within clause 3.7;
ii.Concludes that clause 3.7 (particularly subclauses 3.7.1 and 3.7.6) has a plain meaning and is unambiguous; and
iii.Recommends that the Respondent applies clause 3.7 in accordance with that plain meaning – if an employee such as the Applicant takes long service leave, public holidays falling within that period of long service leave will not be counted as part of long service leave, consistent with the Act.”

In oral submissions at the hearing, the AMWU said that the present dispute involves a simple proposition that public holidays within a period of long service leave should not be treated as long service leave. The AMWU also said in reply to the Respondent’s submissions in relation to the loaded rate, that the Respondent was simply required to treat a public holiday within long service leave as a public holiday rather than a day of long service leave and pay the employee the loaded salary that the employee would have otherwise received if the employee had not been on long service leave.

Respondent

Remuneration

The Respondent began its written submissions by making observations about the provisions of the Agreement, relevant provisions of LSL Act and the FW Act, as well as the Black Coal Mining Industry Award. In relation to the Agreement, remuneration to be paid to employees within the classifications is provided in clause 2.6. Clause 2.6.1 provides that the relevant salary to be paid, according to the role performed by the relevant employees, is the sum of various components constituting “Normal Salary” which is described as the employee’s base salary, plus a location allowance, a work pattern payment, if applicable, plus team leader payment if applicable, plus superannuation. Clauses 2.6.2, 2.6.3 and 2.6.4 of the Agreement respectively provide for base salary, location allowance, and Work Pattern Payment.

The basis of calculating the work pattern allowance for any particular roster is set out in clause 2.6.4 of the Agreement. The calculation includes a payment at double time for ordinary hours worked on a public holiday and payment at triple time for hours in excess of ordinary hours worked on a public holiday. The Work Pattern Payment for current rosters is outlined in Attachment 1 to the Agreement. The Work Pattern Payment in Attachment 1 differs significantly depending on the roster to be worked. For example, a 5-Day 8.5 hr 5D 5A 4N amount is $26,609.64 as opposed to a 7-Day / Night, 12.25 hour roster where the payment is $65,704.95 for year one. In each case, superannuation is payable on the total of the base, location allowance, and the Work Pattern Payment, in accordance with clause 2.6.8. Clause 2.7.4 provides that the remuneration provided under clause 2.6 covers all aspects of work, including any requirement to work shift work and/or outside ordinary hours and/or on weekends and/or on public holidays, in order to carry out the employee’s duties.

Public holidays

Clause 3 deals with leave and absence arrangements. Clause 3.1 provides for annual leave of 6 weeks for 7-day roster employees. (Traditionally under industrial instruments made by various Tribunals, employees were awarded the additional 6 weeks leave by reason of the employees having to work as a continuous shift worker over weekends and public holidays – see for example the Explanatory Memorandum to the Workplace Relations Amended (Work Choices) Bill 2005, items 501 and 510. This was a separate benefit unrelated to the payment of entitlements of employees for working on those days.)

Clause 3.3 deals with the question of employees’ entitlements in respect of public holidays. Clause 3.3.1 provides for an entitlement to a specified number of days (or any day gazetted by the Queensland government to be observed in lieu of such public holidays) without loss of pay.

Clause 3.3.3 specifically addresses the entitlements to the benefits in clause 3 if an employee is working a continuous roster. It provides that if the employee is working a continuous roster and is required to work on a public holiday (with the exception of 25 and 26 December), no additional payments apply as the remuneration provided under clause 2.6 and/or the additional annual leave entitlement in clause 3.1 comprehends such work. Accordingly, the Normal Salary in clause 2.6 and the benefits of additional annual leave entitlements in clause 3.1 are encapsulated and thereby reward these employees for working on a public holiday if required.

Long Service Leave

Clause 3.7 deals with long service leave. Clauses 3.7.1 and 3.7.2 prescribe that long service leave of 13 weeks after 8 years continuous service in the coal mining industry will be calculated and administered in accordance with the requirements of LSL Act (as amended from time to time). Section 39AB of the LSL Act relevantly provides for the seeking and granting of long service leave which has accrued under that legislation. Payment for long service leave under the Coal LSL Act is provided for in s. 39AC.

Section 39AE of the LSL Act deals with public holidays falling within the period of long service leave. The Respondent observed that the section provides that if the period during which an eligible employee takes long service leave includes a day or part-day that is a public holiday in the place where the employee is based for work purposes:

(a)the employee is taken not to be on long service leave on that whole day; and
(b)the public holiday is taken not to break the continuity of the period of long service leave.

It was submitted that s. 39AE appears to be reflected in clause 3.7.6 of the Agreement which provides that public holidays falling within a period of long service leave will not be counted as part of the long service leave.[18] Under clause 3.7.11 of the Agreement, payments during long service leave are to be made in accordance with the employee’s pay cycle.

National Employment Standards (NES)

Part 2-2 of Division 10 of the FW Act provides the national employment standards for employees, including the standards relevant to the entitlements to long service leave. Section 114(1) provides that an employee is entitled to be absent from his or her employment on a day or part-day that is a public holiday in the place where the employee is based for work purposes. The entitlement is qualified by s. 114(2) that provides the right of an employer to request an employee to work on a public holiday if the request is reasonable.

Section 116 of the FW Act provides that if, in accordance with Division 10, an employee is absent from his or her employment on a day or part-day that is a public holiday (as defined in s. 115) the employer must pay the employee at the employee’s base rate of pay for the employee’s ordinary hours of work on the day or part-day (single time). The note to s. 116 in the FW Act states that if the employee does not have ordinary hours of work on the public holiday, the employee is not entitled to payment under this section. In this respect, the Respondent submitted that it is permissible to have regard for the note in the interpretation of the FW Act.[19] Under the FW Act, an enterprise agreement must not operate in such a manner so as to reduce entitlements under the FW Act (s. 55 and s. 56).

Black Coal Mining Industry Award (Award)

Clauses 27.3 and 27.4 of the Black Coal Mining Industry Award, as in force at the time the Agreement was approved, provided the following in relation to public holidays:
“27.3 Employee not required to work on a public holiday
An employee who is not required to work on a holiday which would otherwise have been a working day for that employee will be paid for that day at the employee’s classification rate unless the employee, without good and sufficient reason, fails to work on the employee’s:
(a) last working day immediately before the holiday; or
(b) first working day after the holiday;
in which case the employee is not entitled to payment for such holiday.”
“27.4 Employee required to work on a recognised public holiday
(a) An employee who is required to work on a holiday is to be paid at the rate of double time for work performed during ordinary hours, in addition to the payment prescribed.
(b) Work performed in excess of ordinary hours on a holiday is to be paid at the rate of treble time.”

The Respondent submitted that pursuant to clause 27.3 of the Award, which was the relevant award for the “better off overall test” under the FW Act for the approval of the Agreement, an employee who is not required to work on a public holiday which would otherwise have been a working day for that employee, will be paid for that day at the employee’s classification rate, single time (unless certain exemptions not currently relevant apply).

Clause 27.4 of the Award further provides that an employee who is required to work on a recognised public holiday is to be paid at the rate of double time for work performed during ordinary hours, in addition to the payment prescribed and at the rate of triple time for work performed in excess of ordinary hours. Accordingly, the Respondent submitted that under the Award, an employee required to work on a recognised public holiday is to be paid at ordinary rates for the day but, in addition, is to be paid the loadings of double and triple time as required.

In relation to the construction of clause 3.7.6 of the Agreement, the Respondent submitted that in construing the Agreement it is necessary to have regard to and construe the relevant clauses in the context in which they appear including the legislative background against which the Agreement was made and in which it operates, which must include the Award underpinning the agreement.[20] It is also important to construe particular provisions of an agreement harmoniously with other relevant provisions.

It was also submitted by the Respondent that both under the Award and the Agreement the payments to be made to employees who are reasonably required to work on public holidays on which the employee would otherwise be entitled to be absent from work with pay extends to payment for the day and also payment of the loadings (penalty) of double time or triple time for some hours. The total payments, therefore, would extend to at least the equivalent of two days’ pay at the prescribed rate.

Under the Agreement, the Normal Salary incorporates as part of the Work Pattern Payment, an amount not specifically directed at any particular public holiday on which the employees are reasonably required to work. The total Work Pattern Payment reflected in Attachment 1 includes payment for the estimated number of public holidays an employee is rostered to work in a year on the basis that double time and triple time payments are included for such days.

Employees who are on a period of long service leave that falls on a rostered public holiday are paid their “Normal Salary” for the period of leave as if they had been at work for the relevant period and long service leave is deducted for the day. Accordingly, the relevant employees are paid as part of their Normal Salary for the public holiday and also paid as if they worked the particular public holidays falling within their long service leave. That is, they are paid for the equivalent of at least another day.

Moreover, the employees are paid as required by s. 39AC of the LSL Act as if the employees had not taken the leave (by reason of the “Normal Salary”, employees are paid more than the base referred to in that section). In this regard the Respondent submits that neither s. 39AC nor s. 39AE of the LSL Act are concerned with the situation where an employee is separately remunerated above the rate for a day’s absence as if required to work on the public holiday. The sections are said to operate on the premise that the employee is absent on the public holiday and entitled to a day’s payment (at base rate) during the absence. In those circumstances, the Respondent said that it is necessary to turn then to clause 3.7.6 of the Agreement (and s. 39AE of the LSL Act).

Under the Award and the Agreement, an entitlement to be paid the loadings where the employee is reasonably required to work on a public holiday, does not give rise to an entitlement to an additional day of absence from work, whether paid or unpaid, since the payment of the loading discharges the employer’s obligations and the entitlements of the employee. In addition, it was said that it is clear where a public holiday falls on a day that the employee is not required or rostered to be at work, no entitlement to pay for the absence on the public holiday arises, consistent with the provisions of the FW Act. The provisions of the LSL Act do not alter this. Clause 3.7.6 must then be reconciled with the annualised salary provisions in clause 2.6. The interpretation contended by the AMWU does not in the Respondent’s view, take account of the other relevant provisions of the Agreement, namely, clauses 2.6 and Schedule 1, clauses 3.3.3, and 3.7, and the LSL Act.

The Respondent submitted that clause 3.7.6 of the Agreement does not create an entitlement to an additional day’s absence for each day that an employee was required reasonably to work on a public holiday and is paid the loadings. In that case, payment of the loading effectively disentitles the employee to be absent on that or any other day and the employer discharges its obligations in respect of the public holiday by reason of the payment.

Employees who are on a period of long service leave that falls on a rostered public holiday have not been called upon by the Respondent to work for the days paid. The payment was therefore made as if they were working on a public holiday. In those circumstances it is difficult to see that it was intended that that situation created a greater entitlement than if the employees actually were required to work on the day. Therefore, where payment is made at the rates set out in the Work Pattern Payments under the Agreement for public holidays there is no entitlement on the part of the employee to an additional day of long service leave.

In oral submissions, the Respondent contended that the core of its argument is that in circumstances where employees have been separately compensated by way of a Work Pattern Payment as if the employees worked the public holidays, the Agreement disentitles employees from some other benefits by way of “double dipping”, such as having an additional day of absence at some point in the future. While the Work Pattern Payment is calculated based on an estimated number of public holidays in a particular roster, the loaded payments are sufficient to cover the projected number of public holiday that employees would be required to work in the course of a year. In this respect, the Respondent said that in circumstances where employees are paid as if they worked the public holidays and are remunerated above their base of rate of pay, ss. 39AC and 39AE of the LSL Act have no work to do.

In response to a question from me as to how it was said that employees being given an additional day of long service leave for a public holiday falling within a period of leave were double dipping, in circumstances where the work pattern payment is not loaded for every public holiday, the Respondent said that the payment provides sufficient loading to cover projected public holidays that any employee would work over the period of a year.

If the Respondent’s argument in relation to ss. 39AC and 39AE is not accepted, there would be potential ramifications on employees’ remuneration. In this regard, s. 39AE expressly provides that if “the period during which an eligible employee takes long service leave includes a day or part-day that is a public holiday… the employee is taken not to be on long service leave on that whole day” (emphasis added). If employees are not on long service leave on the day of public holiday, the Respondent argued that the basis for the employee’s absence would be that either it is authorised unpaid absence or a public holiday on which the employee is not required to work. The approval of a period of long service which includes a public holiday may mean that the employee has been authorised to be absent and has not been requested to work on the public holiday and s. 39AC of the LSL Act and s. 116 of the FW Act provide that employees on public holidays are only entitled to their base rate of pay. As such, it was argued by the Respondent that employees would not be entitled to the Work Pattern Payment for the public holiday falling within the period of approved long service leave.

In response to a question from me in relation to the effect of clause 3.3.1 of the Agreement which provides that unless employees are requested to work public holidays, they are entitled to the public holidays without loss of pay (emphasis added), the Respondent indicated that it did not wish to make submissions on that point or take the matter further. However, the Respondent reiterated if the Commission was minded to make a recommendation in terms sought by the AMWU, the Commission should also note that it may have an impact on employees’ remuneration.

In relation to the AMWU’s submissions with respect of the observations expressed by the Commission concerning the Daunia Agreement, the Respondent submitted that those observations were directed at a potential concern that provisions of the Daunia Agreement may contravene the LSL Act in the context of seeking an undertaking for the approval of Daunia Agreement. The Respondent said that those observations of the Commission were by no means a “concluded view” and the arguments sought to be advanced by the Respondent in this case were not raised or considered by the Commission in that decision.

As to the disposition of this dispute, the Respondent submitted that the Applicant’s singular focus on the words of clause 3.7.6 fails to have regard for and construe all of the relevant clauses in the Agreement. Further, the recommendation sought by the Applicant also fails to engage with the consequence of such a recommendation, namely, that if an employee is not absent on long service leave for a rostered public holiday, then what is the status of the employee’s “leave” on that day. It must follow that the employee’s absence is an absence authorised by s. 114 of the FW Act. As a consequence, the employee in those circumstances is only entitled to receive the base rate of pay for that day pursuant to s. 116 of the FW Act.

As to the Recommendation, the Respondent submitted that it should be that section 3.7.6 of the Agreement does not preclude the Respondent from deducting long service leave from an employee’s long service leave balance for rostered public holidays occurring during a period of an employee’s absence on long service leave.

Consideration

The dispute lodged by the AMWU in this matter concerns the Respondent’s practice of deducting long service leave from an employee’s accrued entitlements where a public holiday falls within the period of long service leave that the employee is taking. The Respondent has adopted this practice based on its view that the work pattern component of the annualised Normal Salary paid to employees includes compensation for an estimated number of public holidays on which it is anticipated that employees will work and that if a deduction from accrued long service leave is not made, employees will be compensated twice for the public holiday. The Respondent further contends that if employees are not on long service leave on a public holiday because of s. 39AE(1) of the LSL Act, then they may be on authorised unpaid leave on that day or be absent on a public holiday on which they are not required or requested to work, and therefore not entitled to the Work Pattern Payment for that day.

In my view, the arguments advanced by the parties conflate the separate issues of payment for a public holiday falling within a period of long service leave and whether the Respondent is permitted by the LSL Act and the Agreement to deduct a day from an employee’s long service leave credits for a public holiday falling within a period of long service leave. The dispute as notified to the Commission and outlined in the submissions filed by the AMWU does not encompass payment for public holidays falling within a period of long service leave and the AMWU does not seek that any Recommendation the Commission issues deal with this point.

Rather, the AMWU is seeking a Recommendation to the effect that the Respondent’s practice of deducting from accrued long service leave entitlements for public holidays falling within long service leave is contrary to the terms of the Agreement and the LSL Act. Further, the Respondent’s contentions in relation to payment are hypothetical and if implemented may be the subject of a further dispute. Accordingly, I intend to deal with the issue which is the subject of the dispute and refrain from making observations about payment other than where relevant to the issue in dispute.

Consistent with the principles relevant to the construction of a statute, the LSL Act is to be construed consistent with its legislative purpose. In summary, s. 3 of the LSL Act sets out its object to make provision in relation to long service leave in the black coal mining industry by providing minimum entitlements and rights in respect of long service leave for eligible employees and by a range of mechanisms to establish a fund, by way of a levy on employers to reimburse them for payments to employees for long service leave.

Section 39AA of the LSL Act sets out a formula for calculating the amount of long service leave to which an employee is entitled based on a 35-hour week. Section 39AB deals with the grant of long service leave and provides that employees may apply in writing to take long service leave and can only apply to take a period of long service leave that is a single continuous period of at least 14 days, being equivalent to a number of hours of long service leave as agreed with the employer and does not exceed the employee’s long service leave credit at the time. The note to s. 39AB reminds the reader that: “An employee is taken not to be on long service leave on public holidays and during certain other periods of absence (see section 39AE)”.

Section 39AC provides that employees are entitled to be paid for a period of long service leave, an amount equal to the base rate of pay (including incentive-based payments and bonuses) that would have been payable to the employee during the period of the leave. By virtue of clause 4 of the LSL Act, the “base rate” for an employee is defined by reference to s. 16 of the FW Act which relevantly is the rate of pay payable to the employee for his or her ordinary hours of work, but not including incentive-based payments and bonuses, loadings, monetary allowances, overtime or penalty rates or any other separately identifiable amounts. Accordingly, the LSL Act includes amounts in the defined base rate that are not included in the definition in s. 16 of the FW Act.

Section 39AD provides that an employer must pay an employee during a period of long service leave at the same time the employee would be paid during the period if the leave had not been taken, or in advance for the whole period, if the employee requests this and an industrial instrument that covers the employee expressly allows the employee to be paid in advance.

The LSL Act provides at s. 39AE(1) that if the period during which long service leave is taken includes a day or part-day that is a public holiday in the place where the employee is based for work purposes, the employee is taken not to be on long service leave on that day. Section 4 of the LSL Act provides that the term “public holiday” has the same meaning as in the FW Act. Accordingly, the requirement that employees are not taken to be on long service leave on a public holiday is a minimum entitlement prescribed by the LSL Act. Section 39AE(2) is in similar terms and provides that if the period an employee takes long service leave includes a period of community service leave the employee is taken not to be on long service leave for the period of absence and the period of absence in both cases is taken not to break the continuity of the period of long service leave. The effect of s. 39AE of the LSL Act is confirmed by its heading: “Public holidays etc. not to count as long service leave.”

By virtue of clause 3.7.1 of the Agreement, the Applicant’s long service leave is to be calculated and administered in accordance with the requirements of the LSL Act. As stated above, the LSL Act provides minimum entitlements. While the Agreement is comprehensive and operates to the exclusion of all other awards and agreements, it does not override the LSL Act. Consistent with the principles relevant to the construction of enterprise agreements, the Agreement should be construed so that all provisions have work to do. Further, the Agreement should be construed so that its terms are consistent with the requirements of the LSL Act and that it provides the minimum standards for long service leave. Accordingly, where the Agreement provides a benefit to employees in excess of the relevant provision of the LSL Act, the Agreement applies and conversely, where the Agreement is silent the LSL Act applies.

Clause 3.7.9 provides that any payments made under clause 3.7 of the Agreement will be equivalent to the amount the Respondent is to be reimbursed from statutory long service leave arrangements applying in the coal mining industry. Clause 3.7.10 requires that the Respondent contribute to meeting obligations arising from any statutory long service leave arrangements in the coal mining industry on the basis of the sum of Base Salary, location allowance and any work pattern payment applicable to the employee from time to time.

Clause 3.7.6 repeats the heading to, and the effect of, s. 39AE of the LSL Act, emphasising that the clause is aimed at preventing public holidays falling in periods of long service leave from being counted as (deducted from) employees’ long service leave credits. Clause 3.7.6 repeats, and therefore emphasises, the entitlement of employees under s. 39AE of the LSL Act, to have public holidays falling in periods of long service leave, not counted as long service leave and without deduction from long service leave accruals. Clause 3.7 of the Agreement is clear and unambiguous as is s. 39AE of the LSL Act. Accordingly, when the Applicant is taking a period of long service leave, clause 3.7 of the Agreement requires that if a public holiday falls within that period, the Applicant is taken to not be on long service leave.

I accept the Respondent’s submission that the Work Pattern Payment compensates employees for an estimated number of public holidays they will be required to work in a year and that it is included in the Applicant’s Normal Salary based on his roster. I also accept that neither s. 39AC nor s. 39AE of the LSL Act are concerned with the situation where employees are remunerated above the rate for a day’s absence as if required to work on the public holiday. Section 39AC of the LSL Act provides that employees are entitled to be paid during periods of leave at not less than an amount equal to the base rate of pay (including incentive-based payments and bonuses) that would have been payable to the employee during the period, had the employee not taken the leave. Incentive based payments and bonuses are respectively defined in ss. 39AC(3)(b) and (c) as being payments or bonuses of the kind paid to employees once per month.

For the purposes of resolving the present dispute, I accept (without deciding) that the amounts in the Applicant’s Normal Salary including Work Pattern Payment are not payments or bonuses of the kind defined in ss. 39AC(3)(b) and (c). Accordingly, for the period the Applicant was on long service leave, the LSL Act entitled him, as a minimum, to be paid no less than the base rate of pay as defined in the LSL Act and did not entitle him to be paid the other components of Normal Salary.

However, the Agreement provides a rate that employees are entitled to be paid while on long service leave, which exceeds their entitlement to the base rate under the LSL Act. Relevantly, clauses 3.7.9 and 3.7.10 of the Agreement provide that the Respondent will contribute to the statutory fund to meet its long service leave obligations, an amount to cover Base Salary (clause 2.6.2), Location Allowance (clause 2.6.3) and any Work Pattern Payment (clause 2.6.4) applicable to employees from time to time, and will make payments to employees for long service leave equivalent to the amounts it is reimbursed from the “arrangements applying in the coal mining industry” – ie. the amount the Respondent is reimbursed from the fund. Accordingly, employees on long service leave are entitled under the Agreement to be paid an amount while on long service leave, which includes their Work Pattern Payment.

Clause 2.7.4 of the Agreement makes clear that Work Pattern Payment includes compensation for work on public holidays. The Work Pattern Payment also includes amounts to compensate employees for shift work, and/or work outside ordinary hours and/or on weekends. The Work Pattern Payment does not compensate employees for all public holidays in a year, only those an employee is anticipated to work. I do not accept that the fact the Applicant is receiving a Work Pattern Payment disentitles him to the benefit of clause 3.7 of the Agreement. That clause prevents the Respondent from deducting any amount from the Applicant’s accrued leave entitlements in respect of the public holiday. This is consistent with both provisions of the Agreement being given work to do.

This construction does not involve double dipping. The Work Pattern Payment is an amount an employee is entitled to be paid to reflect penalty payments and other amounts that the employee would be paid under the Award, for work at particular times or on particular days. Clause 3.7.6 is an entitlement to have public holidays which fall within a period of long service leave, as days off without loss of long service leave credits, where the public holiday falls in a period of long service leave. Both the LSL Act and the Agreement make clear that, in this circumstance, an employee cannot be absent on long service leave on a day that falls during the period of long service leave and cannot be subject to a deduction from long service leave credits so that the absence is a day of long service leave. The work pattern payment compensates for public holidays worked and not for public holidays not worked.

The Agreement is silent in relation to the manner of taking long service leave and provides that long service leave will be calculated and administered in accordance with the LSL Act. The LSL Act provides at s. 39AB(1) that an eligible employee may apply in writing to his or her employer, to take a period of long service leave. Section 39AB(2) provides that employees may only apply to take a period of long service leave that is a single continuous period of at least 14 days and does not exceed the employee’s LSL credit at the time. There is a note to s. 39AB reminding the reader that an employee is taken not to be on long service leave on public holidays.

The interaction of these provisions is that where a period of long service leave is approved by the Respondent, the LSL Act requires that it is taken to be continuous, notwithstanding that a public holiday falls within the period. The LSL Act further requires that an employee with an approved period of long service leave which includes a public holiday must not be on long service leave on the day of the public holiday and that the period of long service leave is not broken by a public holiday that falls within the leave.

I do not accept the Respondent’s submission that if an employee is not on long service leave on the day of public holiday, the basis for the employee’s absence would be that either it is authorised unpaid absence or a public holiday on which the employee is not required to work. An employee on long service leave is absent for a continuous unbroken period on such leave, despite a public holiday falling within the leave period which is not leave. For the day of the public holiday, falling in the approved period of leave, the employee is not requested to work and is arguably entitled to the public holiday without loss of pay. If the Respondent decides to pay employees at less than the Normal Salary for a public holiday that falls within long service leave, and the AMWU does not agree with that approach, the Union can file a new dispute notification.

Conclusion

For these reasons, I Recommend that the Respondent applies clause 3.7 in the manner set out above, and does not make deductions from the long service leave credits of employees for a public holiday that falls within an approved period of long service leave.

VICE PRESIDENT

Appearances:

Mr T Bunnag of the AMWU for the Applicant.
Mr J Hall of Ashurst for the Respondent.

Hearing details:

2023.
Brisbane (via Microsoft Teams):
June 27.

[1] [2023] FWC 596.

[2] Exhibit A1.

[3] Coal Mining Industry (Long Service Leave) Administration Act 1992 (Cth), s. 4 (‘LSL Act’).

[4] See Alcan (NT) Alumina Pty Ltd v Commissioner of Territory Revenue (2009) 239 CLR 27 at [4]; CIC Insurance Ltd v Bankstown Football Club Ltd (1997) 187 CLR 384 at p. 408.

[5] See Construction, Forestry, Mining & Energy Union v Mammoet Australia Pty Ltd (2013) 248 CLR 619 at [59]; Peabody Moorvale Pty Ltd v Construction, Forestry, Mining and Energy Union (CFMEU)[2014] FWCFB 2042 at [26]–[37]; Cimeco Pty Ltd v Construction, Forestry, Mining and Energy Union (2012) 219 IR 139 at [16]–[19].

[6] Project Blue Sky Inc v Australian Broadcasting Authority (1998) 194 CLR 355 at [69].

[7] See Prior v Sherwood (1906) 3 CLR 1054; R v Refshauge (1976) 11 ALR 471 at p. 475.

[8] (1998) 194 CLR 355 at [78] per McHugh, Gummow, Kirby and Hayne JJ; also see Taylor v The Owners – Strata Plan No 11564 253 CLR 531 at [65]–[66].

[9] Ross v R (1979) 141 CLR 432 at [440]; Commissioner of Stamps v Telegraph Investment Co Pty Ltd (1995) 184 CLR 453 at p. 479 per McHugh and Gummow JJ.

[10] (2009) 239 CLR 27 at [47].

[11] [2017] FWCFB 3005 at [114].

[12] [2022] FWCFB [7].

[13] [2020] FCAFC 123, 298 IR 50 at [65] per Griffiths and SC Derrington JJ at [65]; see also WorkPac Pty Ltd v Skene [2018] FCAFC 131, 264 FCR 536 at [197].

[14] Op. cit. at [29].

[15] Op. cit. at [44] citing Project Blue Sky v Australian Broadcasting Authority (1998) 194 CLR 355 at [70] – [71]; Royal Botanic Gardens and Domain Trust v South Sydney City Council (2002) 240 CLR 45 at 80.

[16] [2017] FWCFB 3005 at [114].

[17] [2015] FWC 1554.

[18] Section 39AE of the LSL Act was introduced by the Coal Mining Industry (Long Service Leave) Legislation Amendment Act 2011 (Cth) and took effect from 1 January 2012.

[19] See, Acts Interpretation Act 1901 (Cth), s 15AB(2)(a); CFMEU v Glendell Mining Pty Ltd (2017) 249 FCR 495 at [118].

[20] See, Amcor v CFMEU (2005) 222 CLR 241 at 253 [30].

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