Australasian Meat Industry Employees Union, The v Woolworths Limited

[2016] FWC 6662

[2016] FWC 6662

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.739 - Application to deal with a dispute

Australasian Meat Industry Employees Union, The
v
Woolworths Limited
(C2016/2715)

COMMISSIONER PLATT ADELAIDE, 15 SEPTEMBER 2016

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

[1] In 2016, Woolworths Limited restructured the process used to prepare meat products for sale in its stores. This change resulted in the dismissal of a number of employees by way of redundancy.

[2] The terms and conditions of employment for impacted employees were provided in part by the Woolworths National Supermarket Agreement 2012 (Agreement). 1

[3] The dispute concerns the definition of ‘weeks’ pay’ under clause 2.14.5(c) of the Agreement which is used to calculate severance entitlements, and whether it includes travel allowance payments provided by clause 3.6.6 of the Agreement.

[4] A dispute under s.739 of the Fair Work Act 2009 was lodged on 24 February 2016, and the matter was the subject of a conference on 8 March 2016. A recommendation was issued in May 2016. The parties subsequently agreed that the dispute be arbitrated and directions were issued.

[5] Each party provided written submissions and as there is no factual dispute, the matter has been determined on the papers.

[6] The AMIEU contends that:

● butchers employed by Woolworths are required to provide themselves as ‘relief staff’ to other supermarkets in the Woolworths chain;
● the butchers regularly move from store to store filling in for butchers who take leave;
● the butchers are regularly required to use their personal vehicles for the purposes of travelling to other stores and receive an allowance pursuant to clause 3.6.6 of the Agreement;
● Woolworths in calculating severance payments for the displaced employees described above have excluded the travel allowance;
● the travel allowance should be included in the definition of a ‘weeks’ pay’ under clause 2.14.5(c) as a result of the application of the principles in The Australasian Meat Industry Employees Union v Golden Cockerel Pty Limited; 2
● clause 2.14.5(c) is not ambiguous or unclear, and no substantive or significant ambiguity exists;
● the words ‘all purpose rate of pay’ which appear in the first line of clause 2.14.5(c) does not restrict the allowances referred to on the third line of the clause;
● in the alternative, the predictability and frequency of the historical payment of the travel allowance has resulted in it forming part of the normal and/or predictable weeks’ pay; and
● as a result of clause 2.14.5 the employees are entitled to have the travel allowances provided by clause 3.6.6 included in the calculation of the ‘weeks’ pay.’

[7] Woolworths contends that the travel allowance should not be included in the calculation of a ‘weeks’ pay’ under clause 2.14.5(c) as:

● the decision of Deputy President Asbury in AMIEU v Woolworths T/A Brismeat 3 determined that an all-purpose allowance was an allowance which formed part of the base or ordinary rate for calculating payments for overtime and all forms of paid leave, and that the travel allowance was not of this nature;
● the effect of clause 2.14.5 does not require every allowance to be included in the definition of a ‘weeks’ pay;’
● the Agreement designates certain allowances (clause 3.1.2(c), 3.1.4(c), 3.7.2(d), 13.5.6(b)) as all-purpose allowances and clause 3.6.6. is not so designated;
● the use of the terms ‘relevant’ in clause 2.1.4.5(c) and the application of the principle of ejusdem generis has the effect of requiring the allowances to be included as those paid for purposes; and
● the travel allowance is only paid when travel is undertaken and does not form part of the normal wages.

Principles of Interpretation

[8] There are a number of cases that have established the general principles for the interpretation of industrial instruments, the leading case being Golden Cockerel. 4

[9] I have applied these principles to the interpretation of the Agreement provision in dispute.

[10] Clause 2.14.5 of the Agreement relevantly provides as follows

“2.14.5 Severance Pay

In addition to the period of notice prescribed for ordinary termination in sub clause 2.10.2 the Company shall pay to the employee the following severance pay in respect of a continuous period of service:

(a)….

(b)….

(c) "Weeks' pay" means the all-purpose rate of pay for the employee concerned a
the date of termination, and shall include, in addition to the ordinary rate of pay merit payments, loadings and allowances paid in accordance with the relevant
clauses of the agreement.”

[11] Clause 3.6.6 of the Agreement provides:

“where the Company requests an employee to use their own motor vehicle in their performance of their duties such employee will be paid an allowance of $0.79.”

Consideration

[12] I agree with the AMIEU that clause 2.14.5 does not present any ambiguity. I disagree however, that the use of the words ‘all purpose rate of pay’ in the first sentence of the clause does not impact on the types of payments and allowances to be included in the calculation of the ‘weeks’ pay.’

[13] The use of the word ‘shall include’ in my view, indicates an intention to qualify the payments, loadings and allowances included. The qualification is that those payments, loadings and allowances must be all purpose in nature.

[14] I find that clause 2.14.5 should be interpreted as meaning that a ‘weeks’ pay’ is the all-purpose rate of pay and includes, in addition to the ordinary rate of pay merit payments, loadings and allowances that are properly characterised as all-purpose in nature.

[15] In my view, clause 3.6.6 of the Agreement provides an expense related allowance designed to recompense an employee required to use their vehicle to perform their duties and I find that clause 3.6.6 does not describe an all-purpose allowance.

[16] That fact that the employee may have historically regularly used their own motor vehicle for work purposes and received travel allowances, does not render the allowance an all-purpose payment, nor does the frequency of payment of the travel allowance make it part of the normal weeks’ wages. The employer was at liberty at any time prior not to direct the employee to use their own vehicle and thus would not have been required to make any payment.

[17] In this case, following their retrenchment, the employees will not be required to use their own motor vehicle for work related purposes. If the travel allowance was an all-purpose allowance and had been incorporated into the severance payment, the employees would be reimbursed for a travel expense not incurred.

[18] Based on the reasoning above, I do not believe it is appropriate to include the travel allowance provided by clause 3.6.6 of the Agreement into the definition of a ‘weeks’ pay’ under clause 2.14.5(c).

COMMISSIONER

 1   [2012] FWAA 9179.

 2   [2014] FWCFB 7447.

 3   [2014] FWC 8620.

 4   [2014] FWCFB 7447.

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