AMIEU v Diamond Valley Pork Pty Ltd
[2021] FWCFB 532
•17 FEBRUARY 2021
| [2021] FWCFB 532 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.604 - Appeal of decisions
The Australasian Meat Industry Employees Union
v
Diamond Valley Pork Pty Ltd
(C2020/7789)
VICE PRESIDENT HATCHER | SYDNEY, 17 FEBRUARY 2021 |
Appeal against decision [2020] FWC 5286 of Deputy President Colman at Melbourne on 1 October 2020 in matter number C2020/4387
Introduction
[1] The Australasian Meat Industry Employees’ Union (AMIEU) has lodged an appeal against a decision issued by Deputy President Colman on 1 October 2020 1 (decision) concerning the proper interpretation of provisions of the Diamond Valley Pork Pty Ltd and Australasian Meat Industry Employees’ Union (Victorian Branch) Meat Processing Enterprise Agreement 2019 (Agreement) pertaining to part-time employment. The decision arose from an application by the AMIEU made pursuant to s 739 of the Fair Work Act 2009 (FW Act) for the Commission to resolve a dispute pursuant to the dispute resolution procedure in clause 39 of the Agreement. Clause 39 relevantly empowers the Commission, where the parties agree, to arbitrate any dispute about “a matter under this Agreement”. The dispute notified by the AMIEU relevantly concerned the circumstances in which casual employees converted to part-time employment under the casual conversion provision of the Agreement are entitled to overtime. The AMIEU and the employer party, Diamond Valley Pork Pty Ltd (Diamond Valley), consented to the Commission arbitrating the dispute. The Deputy President relevantly determined that part-time employees under the terms of the Agreement are engaged on a week-by-week basis for a minimum number of working hours determined for each week by the employer, and that any hours worked in addition to these minimum specified hours is to be paid as overtime. The three grounds of appeal stated in the AMIEU’s notice of appeal all contend, in varying ways, that the Deputy President’s conclusion was in error because it was founded upon the incorrect proposition that part-time employees under the Agreement are engaged on a week-by-week basis. The AMIEU added two additional grounds of appeal in their written submissions dated 18 November 2020 which likewise challenge this proposition.
[2] There is no dispute between the parties that the AMIEU may, pursuant to s 604 of the FW Act, appeal the decision with the permission of the Commission. We considered, and the parties agreed, that the appeal could be adequately determined without the need for oral submissions at a formal hearing and, accordingly, pursuant to s 607(1) of the FW Act, the appeal was conducted on the basis of written submissions only.
Relevant provisions of the Agreement
[3] Clause 1 of the Agreement specifies that the “Parties” to the Agreement are Diamond Valley, employees whose remuneration and conditions of employment are determined by the Agreement, and the Victorian Branch of the AMIEU. The classifications of employees covered by the Agreement are defined in Schedule 2 and, broadly speaking, consist of four grades of “Food Process Worker” performing meat processing functions at various levels.
[4] Clause 4.16 of the Agreement provides that “Part Time Employee has the meaning given to it in clause 5.2 of this Agreement”. Clause 5.2 provides:
5.2. Part Time Employment
a) An employee with part time employment is known as a Part Time Employee.
b) A Part Time Employee is engaged by the week as a part time weekly hire employee to work on a regular basis less than 38 Ordinary Hours of Work and with a specified minimum number of hours each week.
c) A Part Time Employee will accrue leave on a pro-rata basis based on the specified number of hours worked each week.
c) A Part Time Employee will be provided with a minimum of four hours work or be paid for a minimum of four hours on any day they are required to work.
d) The Company will advise a Part Time Employee by the Friday before the next working week of the pattern of work to be worked by the Part Time Employee.
e) All time worked in excess of the hours as mutually agreed will be overtime.
[5] This provision may, as later explained, be compared to clause 5.1, which pertains to full time employment and provides:
5.1. Full time Employment
a) An employee with full time employment is known as a Full Time Employee.
b) The Employee is engaged as a full time weekly hire employee and paid as such.
c) A Full-Time Employees hours of work shall be 38 hours per week.
d) A Full-Time Employee will accrue leave based on their Ordinary Hours of Work in accordance with this agreement.
[6] Clause 5.3 deals with casual employment, and clause 5.3(a) provides: “a) A Casual Employee is one who is engaged by the hour on an irregular basis and paid as such. With no guarantee of ongoing work.”.
[7] Clause 5.4 deals with casual conversion, and provides in its entirety as follows:
5.4. Right to request casual conversion
a) After twelve months continuous employment, a Casual Employee shall become eligible to request that their employment be converted to permanent Part Time or Full time employment.
b) A Casual Employee will only be eligible if, for a period of 12 months preceding the request, the Employee has been working a pattern of hours which could, without significant adjustment, be performed by a Full Time or Part Time employee in accordance with this Agreement.
c) Any request under this clause must be in writing and provided by the Casual Employee to the Company (Conversion Request).
d) Where a Casual Employee seeks to convert to permanent employment, and has made a Conversion Request in accordance with this clause, the Company may agree to or refuse the Conversion Request.
e) The Conversion Request may only be refused by the Company on reasonable grounds and after consultation with the Casual Employee.
f) Without limiting the reasons which may constitute reasonable refusal of a Conversion Request, the Company may refuse such a request in the case of an employee who seeks to convert to a fixed pattern of part-time work which cannot reasonably be accommodated by the Company for operational reasons. In the case of such a refusal the relevant Employee and the Company will give due consideration to conversion to Full Time Employment instead.
g) Any ground of refusal for the Company must be based on facts that are known or reasonably foreseeable.
h) Where the Company refuses a Casual Employee's Conversion Request, the Employer must provide the Casual Employee with the Company's reasons for refusal in writing within 21 days of the Conversion Request being made.
i) If the Casual Employee does not accept the Employer's refusal, this will constitute a dispute that will be dealt with under the dispute resolution procedure in clause 39 in this Agreement.
j) Where it is agreed that a Casual Employee will have their employment converted to Full Time or Part Time employment as provided for in this clause, the Company and Employee must discuss and record in writing the form of employment to which the Employee will convert.
k) The conversion will take effect from the start of the next pay cycle following such agreement being reached and recorded in writing, unless otherwise agreed.
l) Nothing in this clause obliges a Casual Employee to convert to permanent employee, nor permits the Company to require a Casual Employee to so convert.
m) Nothing in this clause requires a Company to significantly adjust the established pattern of hours of a Casual Employee seeking conversion to permanent employment.
n) The Company must provide a Casual Employee with a copy of the provisions of this clause within the first 12 months of the Employee's first engagement to perform work. Once a Casual Employee has converted to Full Time or Part Time Employment, the Employee may only revert to Casual Employment with the written agreement of the Company.
o) A Casual Employee must not be engaged and re-engaged (which includes a refusal to re-engage), or have their hours reduced or varied, in order to avoid any right or obligation under this clause.
[8] Clause 5.6(b) of the Agreement provides that ordinary hours may be rostered on any day of the week Monday to Friday inclusive, and clause 5.6(c) provides that the ordinary hours of day work are to be worked between the span of 5.00am and 7.00pm, “which shall be arranged by the Company to meet business requirements”.
[9] Clause 4.13 defines “Overtime Hours” as “…all time worked by the Employee outside the Ordinary Hours of work on any day or shift”. “Ordinary Hours of Work” is defined in clause 4.14 to mean “…the hours worked by an employee either as Day shift, or an Afternoon Shift or Night Shift”.
[10] Clause 7 of the Agreement deals with overtime. Clause 7.1(a) provides that the employer may require employees to work reasonable overtime, which the employer defines as 12 Saturdays per year and up to a half hour Monday to Fridays “where it is considered absolutely necessary to continue processing as determined by the Company”. Clause 7.1(c) provides:
c) Notification about overtime requirements will be given by the Company on the Friday prior except in the case of breakdowns where overtime will be performed in order to ensure production will be run off.
[11] Clause 9 deals with a qualifying period and provides that “New Employees (other than casuals) are appointed initially for a qualifying period of six months. If during this period the Employee's performance is not satisfactory or no further work is available, employment may be terminated on the basis of one week's notice or pay in lieu of notice.”
[12] Clause 7.2 provides that all time worked by employees outside the ordinary hours of work on any day or shift are to be deemed as overtime. Clauses 7.3, 7.4 and 7.5 define the overtime rate for weekdays, Saturdays and Sundays respectively. Clause 7.6 provides:
7.6 Employees duty to notify if unavailable for overtime
It is the responsibility of an Employee who, for genuine family/domestic/ medical reasons is unable to work in excess of the rostered ordinary hours on any particular day, and/ or is unable to work a particular weekend shift, to notify the Company (by direct communication to their Manager or Supervisor) at the earliest possible opportunity once the roster is released that they are unavailable for work.
[13] Clause 12.3 provides that the period of notice of termination required to be given by the employer or any employee, other than a casual, is as follows:
Employee's period of continuous service | Required Notice |
Not more than 1 year | 1 week |
More than 1 year but no more than 3 years | 2 weeks |
More than 3 years but no more than 5 years | 3 weeks |
More than 5 years | 4 weeks |
[14] Clause 12.4 provides that an employee is entitled to an additional week of notice if the employee is over 45 years of age and has more than two years’ service.
[15] Clause 14.1 provides for a scale of severance pay for employees, other than casuals, who are terminated due to redundancy. The amounts payable are expressed in terms of “weeks’ pay”. Clause 14.2 provides that “Weeks’ pay means the Ordinary Rate of Pay for the week”.
[16] Part D of the Agreement provides for various leave entitlements. In relation to annual leave and sick leave for part-time employees, clauses 23.2 and 24.2 respectively both provide that leave will accrue on a pro-rata basis “based on their Ordinary hours of work”.
[17] Clause 31(e), which prescribes penalty rates to apply when work is performed on a public holiday, refers to “Permanent Employees” in a way which appears intended to distinguish full-time and part-time employees from casual employees. Similarly, item 1 of Schedule 1, which sets out the rates of pay for employees, contains separate rate tables applicable to “Casual Employees” (exclusive and inclusive of the casual loading) and “Permanent Employees”.
Part-time employment under the relevant award
[18] The modern award which covered employees to whom the Agreement applies at the time the Agreement was made and approved was the Meat Industry Award 2010 (Award), and this award was the comparator for the purpose of the application of the better off overall test (BOOT) in s 193 of the FW Act when the Agreement was assessed for approval. Clause 13 of the Award provided for part-time employment as follows:
13. Part-time employment
13.1 An employer may employ part-time employees in any classification in this award.
13.2 A part-time employee is an employee who:
(a) works less than full-time hours of 38 per week;
(b) has reasonably predictable hours of work of not less than four consecutive hours on any day; and
(c) receives, on a pro rata basis, equivalent pay and conditions to those of a full-time employee who perform the same kind of work.
13.3 At the time of employment the employer and the part-time employee will agree, in writing, on a regular pattern of work specifying at least:
(a) the hours worked each day;
(b) which days of the week the employee will work;
(c) the actual starting and finishing times of each day; and
(d) that the minimum daily engagement is four hours.
13.4 Clause 13.3 does not apply to a meat processing establishment, except for employees of the establishment engaged in retail and/or wholesale sales of fresh meat and ordinary products.
13.5 The terms of any agreement concerning part-time employment or any agreed variation to the terms will be in writing with a copy retained by the employer and a copy provided to the employee.
13.6 All time worked in excess of the hours as mutually agreed will be overtime.
13.7 A part-time employee employed under the provisions of this clause will be paid for ordinary hours worked at the rate of 1/38th of the appropriate weekly rate prescribed in clause 19—Minimum wages.
The decision
[19] In relation to the issue the subject of this appeal, the Deputy President’s conclusion was that Diamond Valley was correct in contending that the “specified minimum number of hours each week” referred to in clause 5.2(b) is a minimum number of hours set from week to week, and not a fixed minimum number for all weeks agreed with employees upon the commencement of their part-time employment. 2 The Deputy President interpreted clause 5.2 as follows:
“[23] Clause 5.2 concerns part-time weekly hire employees, not part-time employees generally. Clause 5.2(b) clearly states that a part-time employee is ‘engaged by the week as a part-time weekly hire employee’. These words must be given meaning. The union acknowledged that its interpretation did not give these words any particular work to do. The proper meaning of ‘engaged by the week as a weekly hire employee’ is that each week there is a new engagement, and that an employee is hired for that week. The working arrangements for a new week are agreed afresh. An employee might reject the proposed arrangements for a particular week, in which case there may or may not be an alternative offer from the company. Whatever is proposed and agreed for a given week however, clause 5.2(d) requires that an employee be provided with a minimum of four hours work or be paid for a minimum of four hours on any day they are required to work. The words ‘specified minimum number of hours each week’ referred to in clause 5.2(b) means ‘from week to week’, not a fixed weekly number of hours that applies to all weeks.”
[20] The Deputy President noted that the Agreement could have but did not contain any provision providing for a fixed minimum number of hours for all weeks for part-time employees. 3 The Deputy President went on to say:
“[24] …The purpose of weekly-hire employment is to be responsive to variability in volumes of work. It would be inconsistent with this purpose for weekly minimum hours to be fixed. The company explained at the hearing that it is a ‘toll’ facility, processing its customers’ product, and that its labour requirements depend upon its customers’ orders. The union contended that the company has a large amount of work and that its business has been expanding in recent times. But it did not dispute the nature of the company’s business. In my view, it is not surprising that a toll meat processing facility would have, as part of its employment framework, a weekly hire employment arrangement.”
[21] The Deputy President rejected the AMIEU’s contention that clause 5.4 posits that it will be possible to fix standard hours and that these will be set on a standing basis pursuant to clause 5.2(b), concluding that the pattern of work referred to in clause 5.4 might be one of variability and that “[t]here is nothing in clause 5.4 to suggest that conversion to part-time employment will warrant a fixed and unchanging number of minimum weekly hours under clause 5.2.” 4 He also rejected the AMIEU’s contention that the 12 month period leading up to conversion to part-time employment would provide the starting point for the determination of fixed weekly hours, concluding that “this would almost inevitably involve a departure from any pattern that had established itself over the 12 month period and remove from the company the variability in weekly rostering it had previously possessed, thereby resulting in the need for a ‘significant adjustment’” and would “tend to result in the casual employee not being eligible for conversion”.5 The Deputy President then said:
“[27] In my opinion, the words ‘specified minimum number of hours each week’ in clause 5.2(b) mean a specified number for each week, from week to week. These hours are agreed between the employer and the employee each week. The employer offers them and the employees either accept or reject them. If in any week a part-time employee works hours in excess of the minimum number specified for that week, which are the ‘hours as mutually agreed’ for the purpose of clause 5.2(f), overtime is payable for those additional hours.”
[22] The Deputy President rejected the AMIEU’s argument that Diamond Valley’s interpretation resulted in part-time employees’ conditions under the Agreement being less favourable than under the previous agreement, the Enterprise Agreement Diamond Valley Pork Pty Ltd Meat Processing 2017 (2017 Agreement). 6 He also rejected the AMIEU’s argument that Diamond Valley’s interpretation would lead to the Agreement not passing the BOOT on the basis that a proceeding under s 739 cannot properly entail a reconsideration of the BOOT and that, in any event, clause 13.3 of the Award, which provides for a regular pattern of work for part-time employees, did not under clause 13.4 apply to meat processing facilities such as Diamond Valley.7 The Deputy President found that the Award made no provision for minimum weekly hours of work for part-time employees at such facilities. 8
Appeal submissions
[23] In relation to the three appeal grounds stated in its notice of appeal, the AMIEU firstly submitted that the term “weekly hire” used in clauses 5.1 and 5.2 is a standard term that has been used in the meat industry for many years, drawn from older awards, which refers to full-time and part-time employment and distinguishes it from daily hire employment. It said that all awards in the industry up until 1996 commonly referred to full-time and part-time employees as weekly employees, and it was only in the 1996 Meat Industry Awardthat the modern terminology of full-time and part-time employment was introduced. The AMIEU submitted that use of the term in the Agreement is “nothing more than those colloquial hangovers from older award-based language being transcribed into an agreement as commonly understood language in the meat industry” and that “[i]t is not now and has not for an exceptionally long time, if ever, been the case that persons employed by the week were or are subject to renegotiation of their terms of employment on a weekly basis”. Thus, it was submitted, the Deputy President erred in treating weekly hire employment as something distinct from permanent employment.
[24] Secondly, the AMIEU noted that the term “weekly hire employment” was used in relation to full-time as well as part-time employment, and it was manifestly erroneous that full-time employees are subject to fresh terms of hiring every week along with a new engagement. The AMIEU also said that if it were the case, as found by the Deputy President, that weekly employment involved the employer offering hours of work each week, these could be rejected by the part-time employee (and, indeed, the full-time employee), in which case the employee would have no work to perform. This was, it was submitted, inconsistent with the provisions of the Agreement such as clauses 12 and 16 which suggest continuous employment. The AMIEU also submitted that it was inconsistent with the ability of the employer to adequately run its business, since it would be unknown on a weekly basis who in the workforce would be working the next week and who would be rejecting the rosters provided. There was no evidence, the AMIEU pointed out, that Diamond Valley ran its business in this way. It was further submitted that if employees do not know from week to week how many hours they will be working, then their employment retains the irregular character of casual employment and does not merit the description of part-time employment at all.
[25] Thirdly, the AMIEU submitted that the Deputy President erred in determining that the “specified hours” referred to in clause 5.2(b) were the same as the “pattern of hours” referred to in clause 5.2(d), thereby failing to distinguish the requirement of the Agreement to set a minimum number of hours each week as opposed to when and how those hours would be worked – that is, in what pattern. The AMIEU contended that the provisions for the rostering of hours in clause 5.6(b) and (c) are the same as the pattern of hours referred to in clause 5.2(d), and that this accommodates the pig processing industry in which it is commonplace for a company to operate at different hours on different days of the week and to have changing days of peak production and days of lower production dependent upon customers’ orders. The Agreement, it was submitted, provides the flexibility to alter this pattern weekly to reflect customer demand, but this did not affect the specified number of hours of either a full-time or a part-time employee.
[26] In its submissions, the AMIEU sought to amend its grounds of appeal by adding two additional appeal grounds (a third additional appeal ground was at first identified but later abandoned as unnecessary). In the first of these, it contended that the Deputy President erred in finding that, under clause 5.4 the Agreement, a person converting from casual employment to part-time employment would not continue to work the same pattern of hours as they had before without significant adjustment. It submitted that it would be entirely inconsistent with the language used in the Agreement if a casual employee who worked a regular number of (say) 30 hours per week converted to part-time employment with no weekly minimum number of hours specified and only a promise of 4 hours’ pay for any day that the employer requested them to work. The other additional ground contended that the Deputy President erred in finding that the Agreement contained no requirement for a fixed number of minimum weekly hours, when in fact that was the requirement provided for in clause 5.2.
[27] The AMIEU submitted that permission to appeal should be granted because the decision contains relevant errors and should not be allowed to stand and affects a large number of employees (including employees not the subject of the dispute), and because the appeal raises issues of importance and/or general application as well as important questions about the effects on employment of persons seeking to convert from casual to permanent status.
[28] Diamond Valley submitted that permission to appeal should be refused because it is not sufficient that error or the preference for a different result is identified, the appeal does not raise issues of importance and general application, there is no diversity of decisions requiring appellate guidance, and the decision does not manifest an injustice, is not counter-intuitive, and does not apply disharmonious legal principles. In relation to the grounds of appeal, it submitted that:
• the Agreement provides for three categories of employment, namely full-time, part-time and casual, and the term “weekly hire” takes on the same meaning as a daily hire employee under the Award and was agreed to allow Diamond Valley flexibility in its operations;
• the Deputy President’s construction of “engaged by the week” in clause 5.2(b) was correct and consistent with the understanding of hire arrangements as set out in the Award and more generally;
• the specific number of hours is reflected in clause 5.2(d) in that a minimum of 4 hours is guaranteed daily, and the requirement in clause 5.2(f) for mutual agreement as to hours means that, at the end of each week, employees agree to a new set of hours that they will then work the following week;
• the proposition that a casual employee who has worked an average of 30 hours per week over a 12-month period shall be converted to permanent employment for 30 hours per week in every week is inconsistent with clauses 5.4(f) and 5.4(m) of the Agreement;
• overtime is only payable if an individual works in excess of the mutually agreed hours advised on Friday of each week for the following week, subject to the ceiling of 38 hours at ordinary pay, and the Agreement does not contemplate fixed hours (beyond 4 hours per day);
• the AMIEU’s argument would circumvent the flexibility afforded in the Agreement to Diamond Valley to be able to meet increasing and decreasing demand over time, which it agreed to in the bargaining process; and
• these provisions give the freedom to the part-time employee to have control over their ongoing working relationship while still being able to accrue paid leave entitlements.
[29] In relation to overtime rates, Diamond Valley’s position was stated to be that “where there is work available beyond the agreed hours and the employee is agreeable to work additional hours then it would be in both parties’ best interest for that work to be the same rate as other employees performing the same work. Where an employee does not want to do additional hours, then they should be allowed to withdraw at the completion of their agreed weekly hours”. It submitted that to restrict the employee’s ability to work beyond a set number of hours for each week could limit the employee’s ability to earn additional income. It further submitted that “[t]he intent behind the inclusion of a Casual conversion clause was in recognition of the need for employees to be able to transition away from Casual employment into something more stable and secure”. However, it submitted that “to accept the union’s position” would create an anomalous situation whereby a full-time employee would not receive overtime rates until they had worked 38 hours in a week, whereas “at the same time each Part-time employee would receive overtime rates after they pass their average hours as opposed to the hours mutually agreed to on the Friday of the previous week”.
Consideration
[30] We consider that permission to appeal should be granted, for two reasons. First, although the decision the subject of the appeal is nominally concerned with the resolution of a dispute about the terms of a particular enterprise agreement, its reasoning and conclusion raise broader questions about the meaning of the expression “weekly hire” in the context of the meat industry and the practical operation of the casualconversion mechanism. In the last respect, it may be noted that clause 5.4 of the Agreement is, on its face, modelled to a substantial degree on the casual conversion provision applying to meat processing establishments in clause 15.14 of the Award which is, in turn, largely but not wholly identical to the model casual conversion provision established in 4 yearly review of modern awards – Casual employment and Part-time employment. 9 Second, it appears from their submissions that both parties disagree with the Deputy President’s decision. We note in this connection Diamond Valley’s submission that where an employee agrees to work additional hours that become available beyond the hours of work agreed for that week, the employee will be paid “the same rate as other employees performing the same work” – that is, like a full-time employee, they would be paid at ordinary time up until 38 hours have been worked. Although Diamond Valley does not say so, this is clearly at odds with the Deputy President’s conclusion that overtime is payable to part-time employees for all hours worked in excess of the minimum number of hours specified for each week.10 These matters render it desirable for there to be appellate review of the decision.
[31] The “correctness standard” applies to this appeal – that is, the relevant issue is whether the Deputy President’s answer to the question of interpretation raised by the dispute before him is right or wrong. If we consider that his answer was not correct, our duty is to substitute what we consider to be the correct answer for the answer given in the decision. 11 The principles of interpretation of enterprise agreements applicable to the resolution of that question were not in dispute between the parties. The most succinct expression of the correct approach is that articulated by the Federal Court Full Court in WorkPac Pty Ltd v Skene12as follows (citations omitted):
“[197] The starting point for interpretation of an enterprise agreement is the ordinary meaning of the words, read as a whole and in context. The interpretation “… turns on the language of the particular agreement, understood in the light of its industrial context and purpose …”. The words are not to be interpreted in a vacuum divorced from industrial realities; rather, industrial agreements are made for various industries in the light of the customs and working conditions of each, and they are frequently couched in terms intelligible to the parties but without the careful attention to form and draftsmanship that one expects to find in an Act of Parliament. To similar effect, it has been said that the framers of such documents were likely of a “practical bent of mind” and may well have been more concerned with expressing an intention in a way likely to be understood in the relevant industry rather than with legal niceties and jargon, so that a purposive approach to interpretation is appropriate and a narrow or pedantic approach is misplaced.”
[32] At the outset of our consideration of the question of interpretation raised by the appeal, we observe that the Deputy President’s answer to this question establishes, on the foundation of the words “…engaged by the week as a part-time weekly hire employee…” in clause 5.2(b), a putative novel form of employment that bears little relationship to the established industrial conception of part-time employment. As discussed in the Casual employment and Part-time employment decision, the usual features of part-time employment are that it involves a fixed number of ordinary working hours per week, reasonable certainty as to the days upon which work is performed and the times upon which work starts and finishes, and provision of the benefits of full-time employment on a pro-rata basis. 13 Another feature of part-time employment is that it is a form of what is described as “permanent” or, somewhat anachronistically, “weekly” employment – that is, employment that continues indefinitely subject to termination on a prescribed period of notice. This terminology was explained in the Casual employment and Part-time employment decision as follows:
“[14] Most modern awards provide for three types of employment: full-time, part-time and casual. Different terminology has been used to distinguish full-time and part-time employment from casual employment. Full-time and part-time employment were for a long time described as “weekly” employment, on the basis of the notice period usually required under awards to terminate the employment. As discussed later, this was fundamentally different to casual employment, which may be terminated on short or no notice. However the label of “weekly” employment has generally fallen into disuse, particularly having regard to the longer notice periods prescribed by s.117 of the FW Act where the employment has lasted longer than a year. Another common description of full-time and weekly employment, as distinct from casual employment, is “permanent” employment. This is somewhat of a misnomer, since no employment is truly permanent, but this expression is in common currency and will be used throughout this decision. It is particularly useful to distinguish part-time employment in the sense it is used in modern awards from casual employment involving the working of part-time (that is, less than full-time) hours.”
[33] The putative form of “part-time” employment identified in the decision as established by clause 5.2(b) has none of these features: it is not “permanent” in the sense discussed above, does not involve any fixed number of hours per week, does not involve any degree of certainty as to days upon which work is performed or as to starting and finishing times, and does not involve the pro-rata provision of the benefits of full-time employment (because there is no fixed number of hours of work allowing for the stable provision of such benefits on a proportional basis). The propounded form of employment would best be characterised as a weekly analogue of daily casual employment whereby, beyond each weekly engagement, there is no advance commitment to continuing and indefinite work. It would be open for the employer to offer as many, or as few hours, per week as suits its needs, provided that the number is less than 38. This would presumably include the capacity to offer zero hours. And, because the putative form of employment requires agreement to be reached between the employer and employee at the end of each week as to the hours to be worked in the following week, in the absence of agreement being reached (because, for example, the employee rejects the employer’s offered number and pattern of hours), no work would be performed.
[34] It is possible for an enterprise agreement to create a new category or model of employment. For example, in the Loaded Rates Agreements, 14 the Full Bench gave consideration to an enterprise agreement which contained a form of employment which, although labelled as part-time employment, did not bear most of the usual incidents of part-time employment. The Full Bench determined that, for the purpose of the BOOT, this form of employment was to be compared with casual rather than part-time employment under the relevant award.15 However, one might expect that any such novel form of employment in an enterprise agreement would be articulated in express terms and in a fully developed scheme of operation.
[35] In the case of the Agreement here, we do not consider that the words “…engaged by the week as a part-time weekly hire employee…” in clause 5.2(b), read in the context of the Agreement as a whole, are capable of being construed as establishing the novel form of employment propounded in the decision, for the following reasons. First, we consider that the context makes it clear that the expression “weekly hire employee” when used in the Agreement cannot mean an employee engaged afresh each on a new arrangement. This is because, notwithstanding that a full-time employee is also described as a “weekly hire employee” in clause 5.1(b), full-time employees are guaranteed 38 hours of work per week by clause 5.1(c). This guarantee of work, consistent with the usual concept of full-time employment, is not reconcilable with any notion of a full-time employee being re-engaged each week on a fresh arrangement.
[36] Second, clause 5.2(b) states that a definitional characteristic of part-time employment is that it involves engagement “…to work on a regular basis…”. This is to be contrasted to the characterisation of casual employment in clause 5.3(a) as engagement “on an irregular basis” and “[w]ith no ongoing guarantee of work”. The model of part-time employment posited in the decision gives no content to the requirement for engagement to work on a regular basis, since it inherently involves irregular and intermittent engagement. In that sense, it matches the Agreement’s characterisation of casual rather than part-time employment.
[37] Third, the casual conversion mechanism in clause 5.4 expressly describes part-time employment, together with full-time employment, as “permanent” (in paragraphs (a), (d), (l) and (m)). This terminology points to the purpose of clause 5.4 as facilitating an employee who is a casual employee, and thus has “no ongoing guarantee of work”, moving in prescribed circumstances to the greater security of ongoing or “permanent” employment (whether full-time or part-time). The model of part-time employment posited in the decision simply cannot stand together with the description of part-time employment in clause 5.4 as being permanent in nature. It may also be noted that clause 31(e) and item 1 of Schedule 1 both refer to full-time and part-time employees collectively as “Permanent Employees”, and for the same reason this cannot be reconciled with the approach taken in the decision.
[38] Fourth, clause 9 has the effect that new part-time weekly hire employees under the Agreement would be appointed initially for a qualifying period of six months. That such employees would be “appointed initially” for a qualifying period during which employment may be terminated on one week’s notice for unsatisfactory performance, strongly suggests as a corollary that employment beyond the qualifying period would be permanent or ongoing. This is inconsistent with the construction adopted by the Deputy President. On the construction favoured by the Deputy President, clause 9 has no sensible work to do as engagement or employment of both part-time and full-time employees is by and for the week with no ongoing commitment to further periods of employment. Clause 9 therefore also cannot be reconciled with the approach taken in the decision
[39] Fifth, clauses 12.1, 12.3 and 12.4 provide that any non-casual employee (that is, including any part-time employee) must be terminated with the specified periods of notice unless dismissed without notice for serious misconduct pursuant to clause 12.2. However, if a part-time employee is, effectively, engaged pursuant to a series of weekly fixed term contracts, a requirement for the provision of notice serves no purpose and is rendered nugatory. If an employer is not required to make an offer of any hours of work for any future week, then the need to terminate a part-time employee would never arise. Clause 12 is therefore also directly inconsistent with the model of part-time employment posited in the decision.
[40] Sixth, the provision for severance pay in clause 14, which is clearly intended to apply to part-time as well as full-time employees since it is stated in clause 14.1 to be applicable to all employees other than casuals, is not reconcilable with the model of part-time employment posited in the decision. As with the notice provision, the notion of termination for redundancy is rendered nugatory for part-time employees if they are in all cases engaged and re-engaged by the week. Further, the notion of “weeks’ pay” upon which the severance pay scale is based would be unquantifiable and unworkable for part-time employees if they have no standard number of ordinary working hours per week.
[41] Seventh, the Agreement provides in clauses 23.1 and 24.1 respectively for entitlements to 4 weeks’ annual leave and 10 days’ personal leave for full-time employees. Clauses 23.2 and 24.2 respectively provide for such entitlements to apply to part-time employees on a pro-rata basis based on their ordinary hours of work. However, on the approach taken in the decision, part-time employees would not have any standard ordinary hours, and accordingly it is not practically possible for a week’s annual leave or a day’s personal leave to be calculated and paid on a pro-rata basis when the leave is taken. For example, on the Deputy President’s construction, a part time employee about to commence a period of two weeks of annual leave would not have any specified hours of work for those weeks because the specified number for each week are determined from week to week. The specified hours, according to the decision, are agreed between the employer and the employee each week - the employer offers them and the employees either accept or reject them. No hours are worked when the employee is on annual leave, so none are the specified for the period of annual leave. How then is the number of leave hours to be taken determined?
[42] It is necessary for an alternative interpretation of clause 5.2 to be identified which is available on the text of the provision but operates consistently and harmoniously with the other provisions of the Agreement. We start with the expression “weekly hire”. We accept the AMIEU’s submission that, considered in its historical industrial context, this expression is a term of art (albeit an anachronistic one) which refers to “weekly” or “permanent” employment in the sense to which we have earlier referred. The use of the expression may be traced at least as far back as the first metal industry award made by the Commonwealth Court of Conciliation and Arbitration (Higgins J, President) in 1921. 16 Clause 12 of that award was entitled “Weekly Hiring”, and paragraph (a) of the clause provided:
12.(a) Except as to the casual employees referred to in clause 1 the employment is terminable on either side by one week’s notice given on any day of (if the employer terminate it) by payment of one week’s pay. But for the first fourteen days of employment the hiring shall be from day to day and during this period a day’s notice or a day’s pay shall be sufficient. 17
[43] Clause 12(d) of the same award confirmed that the clause was not to affect the right to dismiss for misconduct. 18
[44] In his decision making this award, Higgins J said:
“The claim is for weekly rates with one week’s notice on either side before termination of employment…I have often expressed myself in favour of weekly employment in all cases where the nature of the business makes it practicable…The employment of engineers is regular and fairly permanent. Men keep at the same undertaking day after day, week after week, even year after year; and even if work is not ready for them … or if they lose an hour, even five minutes in some cases, they lose their pay. There is nothing that steady family men desire more than constant work, and some certainty as to their income for a week or more ahead. My wages – basic and secondary – are awarded on the assumption that the employment is regular; and if the work is casual, not regular…I award more per hour than in the case of regular work… Under weekly wages the employee tends to identify himself with the particular undertaking, to feel interested in the concern, and it takes much more to induce him to throw up a job if it is constant. It is in the interest of the employers as well as in the interests of the employees that the employment should not be casual, that a man should not feel himself to be a piece of flotsam or jetsam in the industry – that he should have a sense of homeship in the concern”. 19
[45] It is apparent therefore that the expression “weekly hire” was used as a reference to ongoing employment (at that time understood only to be full-time in nature) on a fixed weekly wage which was terminable on a week’s notice, subject to the completion of a probationary period in which a shorter period of notice might apply and reserving the right of the employer to dismiss summarily for misconduct. It also operated, as the above clause made clear, in contradistinction to casual employment. The expression was used in that sense in federal awards and arbitral decisions across a range of industries for many decades thereafter. As earlier discussed, the use of the expressions “weekly employment” and “weekly hire” to describe “permanent” employment fell into disuse after the statutory prescription for notice periods in excess of a week for employees with more than one year’s service was introduced by the Industrial Relations Reform Act 1993. Nonetheless the historical connection remained, as was recognised by a Full Bench of the Australian Industrial Relations Commission (AIRC) in Re Metal, Engineering and Associated Industries Award 1998 – Part I when, in relation to that award, it described full-time employment under that award as “the lineal descendant of weekly hire employment under the predecessor awards”. 20
[46] The expression “weekly hire” was used in the context of the meat industry in the same way. For example, in 1992 a Full Bench of the AIRC conducted an inquiry into the Meat Industry pursuant to s 107 of the Industrial Relations Act 1988. The report of that inquiry 21 discussed in some detail, under the heading “Contract of Employment”, the modes of engagement in the meat industry having regard to the issues of irregularity and seasonality of work. It is apparent from the report that the AIRC, and all parties in their submissions, used the expression “weekly hire” interchangeably with “permanent employment” and “weekly employment” to refer to full-time employment throughout. It is sufficient in this respect to refer to the following conclusion of the Full Bench (underlining added):
“Weekly employment on a permanent basis should be encouraged. In principle, and where practicable, employers should be able to engage employees on weekly hire, with casual or part-time employees providing the necessary flexibility to meet fluctuations in demand in the processing sector.” 22
[47] The historical context also indicates that the expression “engaged by the week” used in clause 5.2(b) is also to be understood as a term of art referring to weekly or permanent employment. As early as the 1920s, this expression or the similar expression “employed by the week” was used in awards and agreements as a standard formulation to describe ongoing employment terminable on a week’s notice. For example, an award made in respect of wool workers in 1920 provided (underlining added):
Engagement
7. All employees other than piece-workers shall be employed by the week and, shall not be dismissed or have their employment terminated for other than their own misconduct without receiving at least one week’s notice of the employer’s intent to terminate such employment and in default shall be entitled to one week’s wages as herein provided. Employees shall likewise not terminate their employment with the employer without giving one week’s notice to the employer of their intent so to do or in default of such notice shall forfeit to the employer one week’s pay as herein provided. 23
[48] Similarly, a storemen and packers award made in 1927 relevantly provided (underlining added):
4. Terms of Engagement.
(a) Employees are to be engaged as weekly or casual hands. A weekly employee is one engaged by the week, and paid by the week, and whose engagement shall be terminable by one week’s notice on either side, notice not to be continued from week to week.
(b) Such notice shall be given on and take effect from pay day, or, in lieu of such notice, a week’s pay shall be given. 24
[49] Similar terminology was used in respect of early instances of award provisions for part-time employment. For example, clause 6(b)(i) of the Metal Trades Award 1952, as consolidated in 1979, provided for female part-time employment in the following terms (underlining added):
Part Time Employment of Females
(b) (i) A female employee may be engaged by the week to work on a part-time basis for a constant number of hours less than forty each week. A female so engaged shall be paid per hour one-fortieth of the weekly rate prescribed by this Division for the work she performs. 25
[50] Awards applicable to the meat industry used the same terminology. Clause 6 of the Federal Meat Industry Award 1981 provided:
6 – Contract of Employment
(a) Except as hereinafter provided, employment shall be by the week. Any employee not specifically engaged as a casual employee shall be deemed to be employed by the week. Except as may hereinafter be provided an employee, to become entitled to payment on a weekly basis, shall perform such work as the employer shall from time to time require on the days and during the hours usually worked by the class of employee affected.
(b) Employment other than casual shall be terminated only by a week's notice on either side, and such notice may be given at any time during the week, but if given at any time within the employee's rostered working hours shall apply from the rostered finishing time for the day except where payment is made in lieu of notice, in which case time is calculated from the time of the notice. In lieu of such 40 working hours' notice the employer may pay 40 hours' wages, and vice versa the employee leaving his or her employment without notice shall forfeit 40 hours' wages, which may be deducted from wages (other than wages for annual leave accrued but not taken and/or proportionate annual leave due) due.
This shall not affect the right of an employer to dismiss an employee without notice for malingering, inefficiency, neglect of duty or misconduct, in which case wages shall be paid up to the time of dismissal only, or to deduct payment for any day on which an employee cannot be usefully employed, because of any strike other than in the meat industry or through any breakdown of machinery or any stoppage of work in the meat industry by any cause for which the employer cannot reasonably be held responsible, or for any day or part of a day on which an employee cannot be usefully employed because of any strike in the meat industry.
(c) An employee not attending for duty shall, except as provided by clause 22 of this award, lose his pay for the actual time of such nonattendance. 26
[51] The Federal Meat Industry (Processing) Award 1996 27provided separately for full-time employment, part-time employment and casual employment categories. However, clause 19.1.1 of that award still described full-time employment as being “employment…by the week”. The same terminology was not used for part-time employees in clause 19.3, which was drafted in more contemporary terms, but clause 19.4.2 made it clear that part-time employees were to receive all the entitlements of full-time employees on a pro-rata basis. It was not until the Federal Meat Industry (Processing) Award 2000 that the terminology of employment or engagement by the week was removed.28
[52] However, this terminology continued to be used in enterprise agreements applicable to Diamond Valley. The first such agreement that can be identified is an agreement entitled Enterprise Agreement Diamond Valley Pork Pty Ltd Meat Processing, approved by the Commission pursuant to the FW Act on 8 July 2010 29 (2010 Agreement). Clauses 5.1(a) and 5.3 referred to full-time and part-time employees respectively as being “engaged by the week”. That this expression did not bear the meaning in the 2010 Agreement which the Deputy President ascribed to it in the current Agreement is shown by the fact that, under the 2010 Agreement, full-time employees are employed for 38 hours per week and are described as “full time permanent” positions in clause 5.2, and both categories of employment were entitled to notice of termination (clause 11.3) and severance pay (clause 12). The same provisions were reproduced in the following two agreements, the Enterprise Agreement Diamond Valley Pork Pty Ltd Meat Processing approved on 17 July 201330 (2013 Agreement) and the 2017 Agreement.
[53] Full-time employees ceased being described as “engaged by the week” in the current Agreement but, as earlier discussed, this was replaced with the equally out-of-date expression “weekly hire”. Part-time employees continued to be referred to as “engaged by the week”, but the expression “weekly hire” was added. Although there is an element of tautology involved, for the reasons given we consider that the words “engaged by the week as a part-time weekly hire employee” are to be read as referring to part-time employees engaged on an ongoing or “permanent” basis on a fixed weekly wage whose employment is terminable only in accordance with clause 12.
[54] Once any notion of part-time employees being re-engaged each week (or not) is removed, the proper construction of clause 5.2 becomes a relatively straightforward matter. Clause 5.2(b) provides that part-time employees are to work “on a regular basis”, and content is given to this by the requirement that they have a “specified minimum number of hours each week”. Consistent with the usual conception of part-time employment and the historic concept of weekly hire, and on the ordinary meaning of the words used (noting that “each” means “every, of two or more considered individually or one by one” 31), this is to be understood as meaning that there must be a minimum number of hours that is specified uniformly for every week of the employment. Clause 5.2(f) indicates that this minimum number of hours is to be arrived at by mutual agreement between the employer and the employee. This is consistent with clause 5.4(j), which requires agreement in respect of a conversion from casual to part-time employment.
[55] Clause 5.2(e) has different work to do. Rather than referring to the “minimum number of hours” as does clause 5.2(b), it refers to the “pattern of work”. This quite different expression refers, we consider, to the day and times upon which the minimum number of hours are to be worked. Thus, although the number of ordinary part-time hours is fixed, the employer has the flexibility to alter when those hours are to be worked from week to week. This operates subject to paragraphs (b) and (c) of clause 5.6, which require ordinary hours to be rostered from 5.00am to 7.00pm, Monday to Friday. It also operates subject to the four hour daily minimum provided for in clause 5.2(d).
[56] The construction we prefer overcomes the difficulties we have earlier identified in respect of the approach taken in the decision at first instance. It aligns the concepts of full-time and part-time employment as involving ongoing employment on a fixed weekly wage, it gives effect to the evident purpose of the casual conversion clause to allow casual employees to move to more secure “permanent” employment, and it is conceptually consistent with the provisions concerning notice, severance pay and leave entitlements.
[57] The approach we prefer also renders clause 5.2 of the Agreement broadly consistent with clause 10 of the Award, which we have earlier set out. We consider that clause 13 of the Award required, in all cases, that a part-time employee have a fixed number of ordinary hours applicable to each week of employment. This requirement is discernible from the following provisions of the Award, operating in combination:
• clause 13.2(a) requires a part-time employee to be engaged to work less than 38 hours per week, which we consider to mean engaged to work a number of hours per week that is less than 38;
• clause 13.2(b) requires that a part-time employee have reasonable predictable hours of work;
• clause 13.5 assumes the existence of an agreement concerning part-time employment, which we consider would necessarily deal at least with the specification of the number of ordinary hours of employment; and
• clause 13.6, in providing that overtime is payable for all time worked “in excess of the hours as mutually agreed”, also necessarily assumes the existence of a mutual agreement concerning the number of ordinary hours each week.
[58] As the Deputy President observed, clause 13.4 provides, subject to exceptions which are not presently relevant, that clause 13.3 does not apply to meat processing establishments. However, clause 13.3 does not deal with the minimum weekly ordinary hours of a part-time employee but rather a requirement for agreement concerning a “regular pattern of work”, which paragraphs (a)-(d) disclose consists of the number of hours to be worked in each day, the days of the week the employee will work, the starting and finishing times each day, and the minimum daily engagement of hours. Clause 5.2 of the Agreement and clause 13 of the Award, as applicable to meat processing establishments, are therefore broadly aligned in the sense that they both require that a part-time employee have a fixed number of ordinary hours each week, but allow the employer the flexibility to establish the pattern of days and times during the week when such hours are to be worked, subject to the requirement of reasonable predictability and a minimum daily engagement of 4 hours.
[59] The significance of this is that clause 5.2 of the Agreement, as we construe it, is not less beneficial than clause 13 of the Award and therefore could not properly have given rise to a detriment necessary to be considered at the time of the approval of the Agreement for the purpose of the BOOT. This position is consistent with the statutory declaration filed by Diamond Valley in support of its application for approval of the Agreement, 32 which stated that there were no provisions of the Agreement that were less beneficial than the equivalent terms of the Award. While we agree with the Deputy President that a proceeding under s 739 cannot properly entail a reconsideration of the BOOT, an interpretation of a provision of an agreement with a contested meaning may be favoured if it is consistent with the basis upon which the agreement was approved by the Commission. In this respect, the difficulty with the construction of clause 5.2 adopted in the decision under appeal is that it would clearly render the clause significantly less beneficial than clause 13 of the Award, and would thereby call into question the veracity of the declaration filed in support of the approval of the Agreement.
[60] Once the nature of part-time employment under clause 5.2 is properly understood, clause 5.2(f) affords a straightforward answer to the issue in dispute concerning the entitlement of part-time employees to overtime. It provides in unambiguous terms that any hours worked in excess of the part-time employee’s agreed minimum weekly hours will be overtime, thus attracting the overtime penalty rates in clauses 7.3-7.5. The logic behind this prescription is revealed by clause 7.1, which (subject to s 62(3) of the FW Act) allows the employer to require an employee to work an additional half-hour each weekday and 12 Saturdays per year.
[61] Diamond Valley’s contention that a part-time employee may, if they agree to work additional hours, be paid at ordinary time until 38 hours have been worked in the week, finds no support in the text of the Agreement (and indeed Diamond Valley cites no provision of the Agreement in support of its submission to that effect). Clause 8, which deals with the situation where an employee requests to work additional hours, directly contradicts Diamond Valley’s submission in that it requires that overtime be paid in respect of such additional hours.
[62] That disposes of the matters that strictly arise for consideration in this appeal. However, we consider it to be convenient and useful to comment upon one aspect of the operation of the casual conversion clause of the Agreement which is referred to in the Deputy President’s reasons and the AMIEU’s submissions. Clause 5.4(b) provides that, in order for a casual employee to be eligible for (relevantly) conversion to part-time employment, the employee must have in the preceding 12 months have worked a pattern of hours which could, without significant adjustment, be performed by a part-time employee under the Agreement. The existence of clause 5.4(b) presupposes that some casual employees will not be eligible for conversion, otherwise the provision would serve no purpose. Because clause 5.2, properly construed, requires a part-time employee to have a fixed weekly number of ordinary hours, it seems to us that an eligible casual employee must have worked a minimum number of hours per week that is reasonably stable in order that conversion to part-time employment at that number of hours can occur without a “significant adjustment” being required. What constitutes a significant adjustment in any individual case will depend upon the particular circumstances, but it is clear enough that the average number of weekly hours worked across the 12 month period will not necessarily translate to part-time employment at that number of hours if the number of hours worked in each week during the 12 month period radically diverge from week to week. However, conversion may in that situation be available on the basis of a number of weekly hours that is lower than the average.
Conclusion
[63] The appeal is determined as follows:
(1) Permission to appeal is granted.
(2) The appeal is upheld.
(3) The decision ([2020] FWC 5286) is quashed.
(4) In substitution for the determination in the decision, we determine that:
(a) Part-time employees must, under the Agreement, have a fixed number of minimum weekly ordinary hours for all weeks of employment that is mutually agreed at the commencement of part-time employment or subsequently agreed in writing.
(b) All work performed in excess of the agreed minimum weekly ordinary hours must be paid as overtime.
VICE PRESIDENT
Determined on the basis of written submissions.
Printed by authority of the Commonwealth Government Printer
<PR726630>
1 [2020] FWC 5286
2 Ibid at [22]
3 Ibid at [24]
4 Ibid at [25]
5 Ibid at [26]
6 Ibid at [29]
7 Ibid at [30]-[31]
8 Ibid at [31]
9 [2017] FWCFB 3541, 269 IR 125
10 [2020] FWC 5286 at [27], [33]
11 Rail Commissioner v Rogers [2021] FWCFB 371 at [61]; RTBUv Laing O’Rourke Australia Construction Pty Ltd[2019] FWCFB 33 at [23]; Appeals by ASU and CPSU [2013] FWCFB 4752, 234 IR 366 at [13]
12 [2018] FCAFC 131, 264 FCR 536
13 [2017] FWCFB 3541, 269 IR 125 at [86]-[97]
14 [2018] FWCFB 3610
15 Ibid at [135]-[138]
16 (1921) 15 CAR 297
17 Ibid at 338
18 Ibid at 339
19 Ibid at 319
20 [2000] AIRC 722, 110 IR 247 at [10]
21 [1992] 6 CAR 278
22 Ibid at 290
23 (1920) 14 CAR 288 at 294
24 (1927) 25 CAR 1212 at 1213
25 (1979) 226 CAR 3 at 122
26 (1982) 278 CAR 174 at 177
27 Print N7479
28 Print T2950
29 [2010] FWAA 5001
30 [2013] FWCA 4768
31 Macquarie Dictionary
32 Statutory declaration of Klint Thompson, Production Manager, dated 14 November 2019
2