Australian Federated Union of Locomotive Employees v Queensland Rail Transit Authority T/A Queensland Rail
[2024] FWC 1574
•17 JUNE 2024
| [2024] FWC 1574 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.739 - Application to deal with a dispute
Australian Federated Union of Locomotive Employees
v
Queensland Rail Transit Authority T/A Queensland Rail
(C2023/4093)
| COMMISSIONER DURHAM | BRISBANE, 17 JUNE 2024 |
Dispute – Agreement interpretation – application of flexible work arrangement provisions – whether agreement terms are ambiguous or have a plain meaning.
An application has been made by the Australian Federated Union of Locomotive Employees (AFULE) on behalf of Ms Mary Milley. Ms Milley is employed as a full-time Guard with Queensland Rail Transit Authority T/A Queensland Rail (QR) and is subject to a Category B (CAT B) Concessional Working Arrangement that reduces her applicable rate of pay to 87.5% of the full flat rate. The application seeks for the Commission to resolve a dispute under the Queensland Rail Traincrew Enterprise Agreement 2020 (Agreement/2020 Agreement) regarding payment for work performed during an allocated single leisure period (SLP) or bulk leisure period (BLP) whilst she is subject to a Concessional Working Arrangement.
QR is the Respondent to the dispute as the employer party to the Agreement.
Ms Milley followed the disputes procedure in accordance with clause 24 of the Agreement.[1] As the matter remained unresolved, an application was filed with the Commission on 13 July 2023 in accordance with the dispute procedure set out in the Agreement. The matter was initially allocated to Commissioner Spencer.
The matter was reallocated to my Chambers on 21 August 2023. Following a conference on 25 September 2023, the parties confirmed their desire for the matter to be arbitrated as a dispute pertaining to the application or interpretation of the Agreement, as provided by clause 24.6 of the Agreement. As such, there is no contest between the parties as to the jurisdiction of the Commission to resolve this dispute.
On 6 October 2023 the Parties agreed as follows with respect to the question to be arbitrated:
“Ms Mary Milley is a full-time (160 hours per four-week cycle) Guard employed by Queensland Rail in the South-East Queensland business under the Queensland Rail Traincrew Enterprise Agreement 2020 (the EA). Due to her request not to be rostered hours of work beyond 1pm (evidenced in a signed document), Ms Milley works under a Category B Concessional Working Arrangement in accordance with clause 27 of the EA.”
The question to be determined is:
“What is Ms Milley entitled to be paid for work performed on a designated leisure period?”
Directions were issued on 11 October 2023 for the filing and serving of submissions and evidence. Both parties agreed for the matter to be determined on the papers.
The Commission’s Powers to deal with this dispute
The Commission’s power to deal with disputes is set out in s.595 of the Fair Work Act 2009 (the Act), which provides:
“595 FWC’s power to deal with disputes
(1) The FWC may deal with a dispute only if the FWC is expressly authorised to do so or in accordance with another provision of this Act.
(2) The FWC may deal with a dispute (other than by arbitration) as it considers appropriate, including in the following ways:
(a) by mediation or conciliation;
(b) by making a recommendation or expressing an opinion.
(3) The FWC may deal with a dispute by arbitration (including by making any orders it considers appropriate) only if the FWC is expressly authorised to do so under or in accordance with another provision of this Act.
Example: Parties may consent to the FWC arbitrating a bargaining dispute (see subsection 240(4)).
(4) In dealing with a dispute, the FWC may exercise any powers it has under this
Subdivision.
Example: The FWC could direct a person to attend a conference under section 592.
(5) To avoid doubt, the FWC must not exercise the power referred to in subsection (3) in relation to a matter before the FWC except as authorised by this section.”
Subdivision B of Div 2 of Pt 6-2 of the Act concerns “Dealing with disputes”. Section 738 of the Act provides:
“738 Application of this Division
This Division applies if:
(a) a modern award includes a term that provides a procedure for dealing with disputes, including a term in accordance with section 146; or
(b) an enterprise agreement includes a term that provides a procedure for dealing with disputes, including a term referred to in subsection 186(6); or
(c) a contract of employment or other written agreement that includes a term that provides a procedure for dealing with disputes between the employer and the employee, to the extent that the dispute is about any matters in relation to the National Employment Standards or a safety net contractual entitlement; or
(d) a determination under the Public Service Act 1999 includes a term that provides a procedure for dealing with disputes arising under the determination or in relation to the National Employment Standards.”
Section 739 provides the Commission’s power to deal with disputes as follows:
“739 Disputes dealt with by the FWC
(1) This section applies if a term referred to in section 738 requires or allows the FWC to deal with a dispute.
(2) [Repealed]
(3) In dealing with a dispute, the FWC must not exercise any powers limited by the term.
(4) If, in accordance with the term, the parties have agreed that the FWC may arbitrate (however described) the dispute, the FWC may do so.
Note: The FWC may also deal with a dispute by mediation or conciliation, or by making a recommendation or expressing an opinion (see subsection 595(2)).
(5) Despite subsection (4), the FWC must not make a decision that is inconsistent with this Act, or a fair work instrument that applies to the parties.
(6) The FWC may deal with a dispute only on application by a party to the dispute.”
Relevant Provisions of the Agreement
Clause 27 of the Agreement provides:
“27 Flexible Work Arrangements
Requests for Flexible Work Arrangements
27 .1Flexible working arrangements allow an employee to balance personal or family needs and preferences with work commitments. The Business acknowledges the importance of employees maintaining a balance and provides discretionary benefits in this Agreement to allow employees to organise their working arrangements in a more flexible way, subject to operational needs. This includes:
27.1.1 Reduced Hours employment;
27.1.2 Job Sharing;
27.1.3 Concessional arrangements;
27.1.4 Transition to retirement.
27.2 In respect of reduced hours employment and concessional arrangements, the
following will apply:
Category CAT A Reduced Hours CAT B Concessional CAT C Concessional Availability Less than Full Time Up to and including 160 hours Up to and including 160 hours Weekly Limitations Nil Monday-Sunday Monday-Friday Daily Limitations Nil Restricted start/finish times Restricted start/finish times Payment Full Flat Rate 87.5% Full Flat Rate 80% Full Flat Rate 27.3Requests made in accordance with the Fair Work Act 2009 will not be unreasonably refused. Protections include:
27.3.1 Is a parent or has responsibility for the care of a child who is school
aged or younger;
27.3.2 Is a carer (under the Carer Recognition Act 2010);
27.3.3 Has a disability;
27.3.4 Is 55 or older;
27.3.5 Is experiencing family or domestic violence; or
27.3.6 Provides care or support to a household member or immediate family who requires care and support because of family or domestic violence.
27.4The Business must give the employee a written response to the request within 21 days, stating whether the employer grants or refuses the request.
27.5The Business may only refuse the request on reasonable business grounds and this must be addressed in the employer’s written response.
27.6At any stage in the process an employee can request advice or representation from their union.
27.7The Business will provide employees with information and education highlighting the choice and flexibility provided by this Agreement in areas such as balancing work and personal lives.
27.8Where an employee transfers from full time workings to a flexible working arrangement (either concessional or reduced hours), their accrued entitlements will be “preserved” at the full time rate at the time of transfer. However, all entitlements will accrue at the flexible arrangement rate (where applicable) from the date of transfer.
27.9Where an employee transfers from a flexible working arrangement (either concessional or reduced hours) to full time, their entitlements (hours accrued) will be maintained, but the rate at which their leave is paid, will be at the full-time rate. Their entitlements will accrue at the full-time rate from the date of transfer.
27.10For the purposes of the above two clauses two leave balances will be maintained and the higher rate will be drawn from first, unless agreed otherwise.”
Clause 30 of the Agreement provides:
“30 Concessional Arrangements
30.1An employee may seek to work under restricted/concessional arrangements for a period of time due to personal factors, in accordance with provisions of the Fair Work Act 2009.
30.2Applications for concessional arrangements will be genuinely considered by the General Manager Train Service Delivery, however, acceptance will be determined against operational requirements at the time.
30.3Any newly approved concessional employee after the commencement of this Agreement may be appointed to Mayne Depot for the period of their concessional arrangements, if unable to be accommodated at their home depot for operational reasons.
30.4For those existing concessional employees at the commencement of the agreement, a review will be conducted by the General Manager Train Service Delivery to determine if an appropriate transition to Mayne Depot or alternative transition out of concessional arrangements is necessary, per the consultation provisions of the Agreement. If an existing concessional arrangement identifies a review date or end date, any transition will not occur before that date.
30.5Hours of work and number of attendances will be agreed to at the outset and rosters developed.
30.6The minimum Single Leisure Period (“SLP”)/Block Leisure Period (“BLP”) allocation will be the same as full-time employees.
30.7 Meal breaks will be as per the meal break clause.
30.8Concessional employees rostered to work on more than 26 Saturdays and 18 Sundays in a 12-month period will not receive weekend penalties beyond the 26 Saturdays and 18 Sundays.”
Clause 66 of the Agreement provides:
“66 Penalty payments
66.1All excess time will be paid at 170% of the full flat rate. Payment for excess time will be made at the end of each four (4) week work cycle.
66.2Work including excess time is to be allocated in the most flexible, equitable and efficient manner between employees within the depots.
66.3 Excess time is all time credited to an employee in excess of their ordinary hours,
or the maximum number of ordinary shifts per cycle as set out in clause 79.
Weekend penalty payments (SEQ)
66.4All time worked on a Saturday (excluding leisure periods) will attract a penalty of 150%. All time worked on a Sunday (excluding leisure periods) will attract a penalty of 200%. These penalties will be paid at the end of the pay fortnight in which the hours are worked.
66.5Penalty payments will apply on public holidays in addition to any public holiday payment.
66.6This penalty will also be paid to employees who are on annual leave for all projected Saturday and Sunday hours in the Master Roster covering the period of leave.
66.7Where the master and/or posted roster includes days that are designated ‘available’ or ‘AFD’ and not required to work, the employee will receive the penalty rate for that day on the average depot shift length.
Leisure periods
66.8Employees who work during a designated leisure period will have all time worked paid at the rate of 175% of the full flat rate. This standalone payment will be made at the end of the fortnight in which the hours are worked.
66.9Where an employee works during a nominated leisure period that is also a penalty payment day the employee will be paid at the higher rate only”.
Clause 93 of the agreement provides:
“93 Leisure Periods
93.1 Within the four (4) week work cycles, employees will be rostered designated leisure days. These will be referred to in the Master Roster as SLP’s or BLP’s.
93.2Employees will have minimum of nine (9) days of leisure periods (BLPs/SLPs) in the four (4) week cycle with a maximum of nineteen (19) attendances.
93.3Regional employees must have a long weekend (which is a maximum of three (3) consecutive days that must include a Saturday and Sunday) every four (4) week work cycle.
93.4After consecutive Saturday and Sunday BLP’s an employee will not commence prior to 0400 Monday unless by mutual agreement.
Process for nominating work preferences for leisure periods
93.5Employees may nominate to work or not to work on designated SLPs or BLPs as reflected in the Master Roster and will not be penalised either way.
93.6Nominations may be either:
93.6.1 will work SLPs/BLPs (Yes);
93.6.2 will not work SLPs/BLPs (No); or
93.6.3will work SLPs/BLPs if mutually agreed with Roster Officer (Approach).
93.7 Nominations will be recorded in writing and may be varied in writing.
93.8If the rostered working requires the employee to work into a designated leisure period, it is at the discretion of the employee whether or not the working is accepted.
93.9Leisure hours will be rostered equitably between employees in each depot.”
Construction of the agreement
The principles relevant to 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 (Berri).[2]
More recently, in AMA (Victoria) Ltd and Australian Salaried Medical Officers Federation v The Royal Women’s Hospital,[3] a Full Bench of the Commission distilled those principles from the Full Court of the Federal Court majority in James Cook University v Ridd[4] as follows:
“(1)The starting point is the ordinary meaning of the words, read as a whole and in context.
(2)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.
(3)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.
(4)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.
(5)A generous construction is preferred over a strictly literal approach but agreements should make sense according to the basic conventions of the English language.
(6)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.”
In an earlier decision in relation to the same dispute, the Full Bench said that:[5] “…the common intention of the parties to an agreement is to be discerned from the terms in which they have expressed their agreement, not from their subjective statements about their intentions” citing the decision of the High Court in Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd (Toll) which said:[6]
“It is not the subjective beliefs or understandings of the parties about their rights and liabilities that govern their contractual relations. What matters is what each party by words and conduct would have led a reasonable person in the position of the other party to believe. References to the common intention of the parties to a contract are to be understood as referring to what a reasonable person would understand by the language in which the parties have expressed their agreement. The meaning of the terms of a contractual document is to be determined by what a reasonable person would have understood them to mean.”
The Full Bench went on to observe that this principle was applied to the construction of enterprise agreements made under the Act in Berri,[7] where a Full Bench said:
“The common intention of the parties is sought to be identified objectively, that is by reference to that which a reasonable person would understand by the language the parties have used to express their agreement, without regard to the subjective intentions or expectations of the parties.”
It is also well-established that the context of a disputed provision is significant. In CFMEU v Endeavour Coal Pty Ltd T/A Appin Mine[8] a Full Bench of the Commission set out the explanation of the significance of context, given by the NSW Court of Appeal in Mainteck Services Pty Ltd v Stein Heurtey SA[9] which emphasised the following matters:
· Until a word or phrase is understood in the light of the surrounding circumstances, it is rarely possible to know what it means[10] and there is always some context to any statement;[11]
· Language considered in its context will often have a clear meaning and context will often not displace that meaning – “but not always”;[12]
· To state that a legal text is clear reflects the outcome of an interpretation process and means that there is nothing in the context that detracts from the ordinary literal meaning and cannot mean that context can be put to one side;[13]
· The phrase used by Mason J in Codelfa[14] “if the language is ambiguous or susceptible of more than one meaning” does not mean that the susceptibility of the language to more than one meaning must be assessed without reference to the surrounding circumstances and in order to determine whether more than one meaning is available it may be necessary to turn to context;[15] and
· The meaning of terms normally requires consideration not only of the text, but of the surrounding circumstances known to the parties and the purpose and object of the transaction.[16]
The case law in relation to the required approach to the construction of enterprise agreements makes it clear that context and purpose must be considered even where the words of the provision being construed appear, on their face, to have a clear and unambiguous meaning. I have applied these principles to determining the matters in dispute in the present case.
Background
Ms Milley is employed as a guard with QR and is on a flexible working arrangement (FWA) to enable her to care for her seven children.[17] Ms Milley’s arrangement requires her to be booked off work before 1:00pm on any day of the week. Therefore, Ms Milley is able to be rostered any day from Monday to Sunday but can only work a shift that ends before 1:00pm.
Ms Milley works to a 400-week roster (the Roster) which sets out her workdays, and the days which will be leisure days or days off. Leisure days are arranged so that Ms Milley has five days off in a row every three months and every second weekend off, as well as an additional consecutive two days off each fortnight so that she never works more than 11 consecutive days. Though every now and again a single day off is also rostered.[18]
As Ms Milley works under a FWA, although the Roster determines the days on which she will work, it does not determine her hours of work on those days. Rather, she is notified of the start and finish times of her rostered shifts 53 hours beforehand via the QR roster app called “My Roster”.[19]
If there is a change to Ms Milley’s roster and she is asked to work changed or additional hours, she will receive a phone call from a QR roster clerk and a notification on the My Roster app.[20]
Ms Milley’s FWA
Ms Milley first sought to change her working conditions in January 2016 to assist her to manage her caring responsibilities for her then, four school aged children.[21] At this time, Ms Milley approached her supervisor to request a Part-Time/Reduced hours arrangement. It was agreed that she could start work after 8:00am and finish work no later than 5:00pm on weekdays and not work on weekends. This arrangement was captured in a signed agreement with QR, in accordance with Clause 6 of the Queensland Rail Traincrew Certified Agreement 2013 (2013 Agreement). This arrangement was for 6 months.
In December 2016, she sought to amend her arrangement so that she was not rostered on any shifts that finished after 1:00pm. Ms Milley’s request was agreed to by QR and the arrangement was recorded as a new Part-time/Reduced hours agreement. The agreement recorded that Ms Milley was to work 160 hours per 4-week cycle (full time), Monday to Sunday, with a restricted finish time.[22]
Once the Queensland Rail Traincrew Enterprise Agreement 2017 (2017 Agreement) was implemented, Ms Milley’s arrangement switched to a reduced hours “concessional” arrangement, in accordance with clause 24.11 of the 2017 Agreement.
Since the commencement of the 2020 Agreement, Ms Milley’s arrangements have been entered into in accordance with clause 30 of the Agreement and her arrangement has been categorised as a CAT B concessional arrangement attracting a concessional rate of 87.5%.
Pursuant to QR’s Flexible Work Procedure MD-14-807 Ms Milley has signed a new Part-Time Reduced Hours Agreement every six months. At the time of making her statement, Ms Milley’s current agreement was due to expire on 2 January 2024.
Ms Milley’s Entitlement to Leisure Periods
In accordance with clause 30.6 of the Agreement, employees working under concessional arrangements, such as the one that applies to Ms Milley are entitled to receive the same minimum SLP and BLP allocations as employees who are not subject to concessional arrangements.
Further, clause 93 of the Agreement sets out the process by which employees are to nominate their preferences with respect to working during a designated leisure period (DLP). In Ms Milley’s case, she has nominated “Approach” in accordance with clause 93.6.3 of the Agreement. This means that if she is rostered to be on an SLP or BLP, and there is a gap to be filled in the roster, she is agreeable to receive a call from the roster centre to see if she is willing and able to work.
Requests to work additional shifts
Since starting as a Guard with QR, Ms Milley has been asked to work additional shifts during DLPs in her Roster.[23] It is her understanding that when she receives phone calls from QR roster clerks asking her to work during a DLP, the QR roster clerks are calling her to fill gaps in the roster and that their practice is to call employees on DLPs first to fill these gaps.[24]
Since December 2016, Ms Milley has worked during a DLP on 29 occasions.[25] On each occasion that Ms Milley worked during a DLP, she was offered and agreed to work the shift. On each occasion she was paid at the rate of 175% of the concessional rate of pay (87.5%).[26]
However, in or around May 2023, Ms Milley enquired about the rate that she was paid for working on a DLP. She was told by Ms Dianne Lee, QR payroll clerk, that her concessional rate of pay was applicable to all shifts she works, including shifts during leisure periods which are outside of the hours in her concessional arrangement.[27]
Submissions
Submissions of the AFULE
The AFULE assert that Ms Milley’s FWA varies the ordinary hours on which she can be rostered to finish work each day.[28] They further argue that the concessional rate that applies to this work in accordance with clause 27 of the Agreement (87.5% of the full flat rate) is only intended to apply to her ordinary rostered work and does not apply to any work undertaken outside of her ordinary rostered shifts, including work on DLPs.
Clause 66 of the Agreement provides penalty payments that are applicable to all excess time worked, which the AFULE submits can be read together with clause 27 of the Agreement consistently.
It is the AFULE’s submission that excess time, including time worked on leisure periods, is time worked in addition to, or outside of the ordinary rostered work.[29] Penalties for work performed during a DLP are expressed as being based on the “full flat rate”. As such, the correct interpretation of the Agreement is that the loading should be paid on the full flat rate of pay (100%) pursuant to clause 66.8 of the Agreement. Consequently, the penalty rate for work performed by a CAT B concessional employee on a DLP should be 175% of the full flat rate (100%), not 175% of the concessional rate (87.5%).
It is further submitted that QR’s approach to the application of the provisions means that it is cheaper to use its FWA workforce to “fill gaps” in the roster, thus creating inequity between those on FWAs and those who are not.[30]
The AFULE submits that it could not have been the intention of the parties to agree to a scenario where it would be less expensive for QR to fill gaps in the roster by assigning additional shifts to employees on concessional work arrangements. This is because the AFULE says this may lead to the inequitable allocation of additional shifts as between different classes of employees, which would be inconsistent with the objects of the Act.[31]
The AFULE do not consider the terms of the Agreement are ambiguous nor open to interpretation, and as such, in accordance with establish principles of agreement interpretation, should be prescribed their plain meaning. In the absence of such ambiguity, they say QR’s evidence of the surrounding circumstances should not be admitted to contradict the plain language in clause 66.8 of the 2020 Agreement.
In interpreting the Agreement, the AFULE states that the presumed intention of the parties, in the context of the background and facts known or presumed to be known to the parties, must be considered. In this regard, the AFULE says that the effect of the FWAs scheme is to reflect the FWAs provisions in s.65 of the Act, where an employee can request a change in their working arrangements, and the employer may agree to that request, without affecting any other conditions of the employment.[32] On this basis, the AFULE contends that only those conditions varied by Ms Milley’s FWAs should be implied, and all other conditions provided by the Agreement remain unaltered.
Ms Milley requested to vary her work arrangements so that she would not be required to work after 1:00pm. This was agreed to, and consequently, she agreed to be paid a concessional rate of 87.5% of the full flat rate in accordance with clause 27.2 of the Agreement. The AFULE submits that this FWA did not constitute any agreement to vary the working arrangements in relation to DLPs.[33] The AFULE states that clauses 27 and 30 of the Agreement outline the limitations and conditions relevant to concessional FWAs, and they do not restrict the operation of clause 66.
The result of this, in the AFULE’s submission, is that clauses 66 and 27.2 of the Agreement can be read consistently. Clause 66 deals with penalties for excess time worked, time worked on weekends, and DLPs. Excess time, and time worked on DLPs, is time worked in addition to or outside of ordinary rostered work, and the penalties for such are based on the “full flat rate”, pursuant to clauses 66.1 and 66.8. Time worked on Saturdays and Sundays is not expressed to be based on the full flat rate, but instead is expressed in clause 66.4 to attract “a penalty of 150%” and “a penalty of 200%” respectively.[34]
The AFULE submits the difference in these expressions is significant and should be presumed to be intentional. Whereas clause 66.4 provides for a penalty percentage to be applied on an employee’s usual rate of pay, which would be the applicable concessional rate for concessional employees, clauses 66.1 and 66.8 provide for penalties to be applied to the “full flat rate”, irrespective of an employee’s status as a concessional employee or otherwise. The AFULE notes that the definition of “full flat rate” in Schedule 1 of the Agreement does not include any exception or qualification for employees being paid a concessional rate.[35]
Clause 66.8 compensates employees for working in lieu of their DLP. Had QR wished for the level of such compensation to differ depending on whether an employee works under a concessional arrangement or not, the AFULE argues that clear words expressing this intention could have been inserted into the Agreement.[36]
Ultimately, the AFULE submits that Ms Milley’s FWA does not affect or determine her rate of pay for work during DLPs. Instead, clause 66.8 of the Agreement applies and is unencumbered by the FWA, meaning that employees working under concessional arrangements continue to be paid at 175% of their full flat rate for work on DLPs.[37]
Submissions of QR
QR submits that it was the intention, at least on their part, when drafting the relevant provisions, that the reduced rate would be used for determining the pay rate for all work that would normally be calculated using the Full Flat Rate, including for work performed during leisure periods.[38] As such, the application of the FWA provisions of the Agreement effectively create a “category wide modifier”.[39] The result of this is that where a FWA is in place, all work performed, whether rostered or not, is subject to that agreement and the reduced concessional rate of pay effectively becomes the new “full flat rate” for such employees.[40] Consequently, the penalty rate for work performed by a CAT B concessional employee on a DLP should be 175% of the concessional rate (87.5%).
QR submits that the predecessor of these arrangements was the compassionate grounds arrangements contained in clause 48.3 of the 2013 Agreement, which similarly allowed for a reduced rate but included the words “for all time”.[41] QR subsequently submit that the plain meaning of 48.3 was that all time worked by an employee subject to compassionate restrictions was paid at the agreed reduced full flat rate.[42]
QR submits that at no stage during the development of the FWA provisions as they appear in the 2017 Agreement did the parties pursue a variation to this understanding.[43] Therefore, as no issues were raised with the application of these provisions during negotiations for the 2017 or 2020 Agreements, it was the intention of the parties when negotiating the arrangements that the concessional rate would apply to all time worked.
The definition of “full flat rate” in Schedule 1 of the Agreement states that it incorporates the base rate of pay, as well as a number of penalty, loading and allowance payments. QR argues that the parties intended to introduce a modification of the full flat rate for concessional employees, as they had done for the predecessor agreements.[44] Unless overwritten by a contrary intention, which QR says does not exist in the 2020 Agreement, QR submits the preexisting intention of a category wide modifier must prevail.
QR submits that where an employee has personal circumstances such that they enter into a concessional agreement, they will continue to have those circumstances in relation to time worked on leisure hours. QR says this logic would have reasonably informed the intention of the parties during bargaining.[45] As leisure hours do not automatically attract the penalties that comprise the full flat rate, QR argues it follows that it is consistent with the intention of the parties to utilise the modified full flat rate for any excess time worked.
QR therefore contends that the modified pay rate set out at clause 27.2 of the Agreement is intended to act as a substitute for the “full flat rate” throughout the Agreement. This, QR says, is the intended meaning of clause 27.2 and its interaction with the remainder of the Agreement.[46]
Additionally, QR states that its payroll system has only ever approached rates of pay on the basis of an employee only having one ‘base’ rate of pay, from which all calculations, such as the full flat rate are made.[47] QR therefore submits that it would not have intended to introduce a circumstance where a concessional employee would have one full flat rate for ordinary hours, and another for excess hours.
In relation to the AFULE’s claims about unfairness arising from an inequitable allocation of excess shifts, QR stated that this is misconceived, as shifts during leisure periods are offered for acceptance, not allocated.[48] Any employee can choose whether or not to work during a leisure period. In any event, QR submitted that employees working on concessional shifts would be reasonably limited in the excess time they could accept by virtue of their personal circumstances, thereby maintaining fairness for other employees.[49]
QR submitted that the effect of a concessional agreement is that for a concessional employee, the payment amount prescribed by clause 27.2 replaces what would otherwise be that employee’s full flat rate. It therefore follows, in accordance with clause 66.8, the reduced full flat rate should be used to calculate a concessional employee’s rate of pay for leisure periods. For Ms Milley, her concessional rate of pay is 87.5% of the ordinary full flat rate. Therefore, QR submits that for leisure periods, it is appropriate for Ms Milley to be paid 175% of 87.5% of the full flat rate.[50]
AFULE reply submissions
In reply to QR’s submissions, the AFULE submitted that “full flat rate” in clause 27.2 of the Agreement must be given its ordinary meaning, which gives rise to no ambiguity given the definition in Schedule 1. Given the plain meaning and absence of ambiguity, the AFULE says that QR’s submissions and evidence in relation to the surrounding circumstances and the subjective intention of QR need not be considered. The AFULE submits the principles relevant to the construction of an enterprise agreement make clear that the construction of an enterprise agreement begins with a consideration of the ordinary meaning of the relevant words, and that evidence of surrounding circumstances cannot contradict the plain language of the agreement.[51]
Had QR, in either the 2020 Agreement or the 2017 Agreement, intended the reduced rate to be applicable for all time worked by concessional employees, the AFULE argues explicit language could have been used to reflect this, but no such language was included. The AFULE submits the Commission should therefore not rewrite the 2020 Agreement to suit QR’s preferred outcome.[52]
The AFULE submits that clause 66.8 is not capable of more than one interpretation.[53] It provides that employees who work during DLPs receive a penalty payment of 175% of the full flat rate. The full flat rate is defined exhaustively in Schedule 1. Therefore, the AFULE says QR’s extrinsic material cannot displace the clear and ordinary meaning of the words in the Agreement.[54]
To the extent that the Commission should consider the 2013 Agreement, the AFULE contends that clause 48.3 of that Agreement has an ordinary meaning. The AFULE says that the reference, ‘for all time’ refers to payment for time worked in excess of four weeks in circumstances where an employee cannot perform work their full core rostered hours, not work during DLPs or other work outside an employee’s core rostered hours.[55]
The AFULE repeated its primary submission that the FWA does not determine the rate of pay for Ms Milley when she works during DLPs; this is determined by clause 66.8, which is not and cannot be affected by the FWA, and, along with the definition of “full flat rate” in Schedule 1 should be given its plain meaning.[56] Therefore, the correct payment is 175% of the full flat rate for Ms Milley’s classification specified in Schedule 2 of the Agreement.
Consideration
It is not in contention, and I accept that Ms Milley’s FWA varies the ordinary hours she can be rostered to finish work on any day, and further, that in consideration of this change, the FWA provides that she be paid a concessional rate for such work.[57] Where the position of the parties diverge is with respect to the application of the concessional rate outside of the ordinary hours agreed within the FWA. A key consideration therefore, when determining what Ms Milley is entitled to be paid for work performed on a DLP is whether entering into an FWA with a concessional rate creates a “category wide modifier” that effectively reduces the rate of all hours worked, as proposed by QR, or does the concessional rate only apply to work performed within its agreed scope?
Given the opposing positions of the parties, determining this point, requires an examination of the construction and interaction of two key provisions of the Agreement, clause 27, Flexible Work Arrangements, and Clause 66, Penalty Payments.
As noted by the AFULE, the interpretation of an enterprise agreement must start with the ordinary meaning of the words, read as a whole and in light of their industrial context and purpose. Whilst the AFULE accept that regard may be had to evidence of surrounding circumstances to assist in determining whether an ambiguity exists, they argue that the principles establish by Berri generally dictate that, should it be determined that the agreement has a plain meaning, evidence of the surrounding circumstances, should not contradict the plain language of the agreement.
The focus of QR’s submissions and evidence go primarily to the intention of the parties and their assertion that the form of words that appear in the Agreement were intended to reflect the consensus of the parties with respect to the operation of FWAs.[58] Put another way, I take their position to be that regardless of the plain meaning of the words as written, the intention of the parties, if one can be determined, should prevail.
Having considered the relevant case law as explored at [14] to [19], and the views expressed by the parties above, my approach to the interpretation of the relevant clauses has been to consider the ordinary meaning of the words, read as whole, having regard to their context and purpose. In this case, context and purpose will be informed by the intention of the parties, noting the Full Bench’s comment in Toll that “the common intention of the parties to an agreement is to be discerned from the terms in which they have expressed their agreement, not from their subjective statements about their intentions”.[59] Put another way, context and purpose must be considered even where the words of the provision being construed appear, on their face, to have a clear and unambiguous meaning, however, in considering this, the subjective statements of the parties, with regard to their intentions, must be viewed through the lens of what a reasonable person would understand the words, as agreed to have meant.
For completeness, I intend to deal with the question of the surrounding circumstances, including the intention of the parties, in advance of determining the question of the plain meaning of the terms, so as to provide the required context to properly construe the meaning of the terms. The appropriate weight will be afforded to each of these considerations, once all matters have been considered.
The intention of the parties
Both Parties have provided witness statements that go to the question of the intention of the parties during the negotiation of both the 2017 and 2020 Agreement and their understanding of the words that were settled for inclusion in both agreements. I have considered each of these statements when considering my findings regarding the intention of the parties.
The evidence of Mr Michael McKitrick
Mr McKitrick is the State Secretary of the AFULE. Mr McKitrick participated in the negotiation of both the 2017 and 2020 Agreements and recalls engaging in discussions with QR regarding applying a percentage reduction to an employee’s salary for the ordinary hours worked under a concessional arrangement.
Further, it is Mr McKitrick’s understanding that:[60]
“work done during designated leisure periods falls outside an employee’s ordinary hours and should not be paid at a concessional rate. I engaged in negotiations with Queensland Rail on this basis.”
Similarly, Mr McKitrick states that he does not:[61]
“recall any discussions taking place at any train crew consultative meetings in 2017 on the reduction of penalty payments payable to employees on concessional arrangements for work on designated leisure periods for employees on concessional arrangements. Had such discussions taken place, I would have objected to the proposal on behalf of the AFULE”.
As a Bargaining Representative and elected official, Mr McKitrick was responsible for representing the views of his members during the negotiation of both agreements. Mr McKitrick is also a signatory to the 2020 Agreement on behalf of the AFULE. I therefore consider it significant that Mr McKittrick indicates that had he been aware that QR’s understanding was that the reduced rates would apply to all time worked, he would have rejected the proposal on behalf of the AFULE.
I accept Mr McKittrick’s evidence as an accurate reflection of his, and the AFULE’s recollection of the negotiation of both the 2017 and 2020 Agreements. Further, I accept Mr McKitrick’s evidence that it was his understanding, when negotiating on behalf of his members that the concessional rates were to apply to ordinary hours only and that any work undertaken outside of this arrangement, on DLPs would be paid outside of this, at the full flat rate. It is of course relevant to note that this is simply one parties understanding of their intention, but does, when viewed against QR’s evidence which follows, add weight to a finding that the application of concessional rates outside of an employee’s FWA was not expressly considered or agreed by the parties at the time the words were drafted.
The evidence of Mr Andrew Curtis
Mr Curtis is the current Payroll Manager for QR and has extensive experience in payroll matters for Traincrew. Mr Curtis was a member of the payroll team throughout the negotiation of the 2017 Agreement and provided QR’s employee relations team with information regarding the feasibility of implementing proposed changes to the payroll system to reflect the changes proposed by the 2017 Agreement. As a part of this work, Mr Curtis attended meetings throughout 2016 and 2017 to discuss the practicalities of implementing the proposed changes to Concessional Working Arrangements. In particular, Mr Curtis recalls:[62]
“10. Among these changes included the uncommon addition of a reduction to a ‘base’ rate, being the reduced Concessional arrangements that saw reductions of 12.5% and 20% to an employee’s Full Flat Rate.
11. To facilitate this change into the system, it was the case that an employee’s reduced Full Flat Rate was their ‘base’ rate within the system from which payment was determined for all work performed. This is what was implemented into the system.
12. I do not recall any discussions or correspondence of Concessional employees having two ‘Full Flat Rates’, one for core rostered hours and another for excess time worked. If it had been raised, I would have challenged it as being abnormal to our practices and impractical to implement in accordance with Queensland Rail payroll practices and systems”.
Whilst I note Mr Curtis’s involvement in discussions with QR representatives, Mr Curtis was not a Bargaining Representative and on the material before me, it does not appear that he was present during the formal negotiation of the 2017 Agreement. The evidence of Mr Dion Matley suggests that Mr Curtis had participated in discussions with the unions around the feasibility of changes to the payroll system as part of negotiations around the 2017 Agreement, however it seems likely that these discussions occurred outside of the formal negotiations.
Consequently, whilst his evidence confirms his understanding of QR’s intention, particularly as it relates to the implimentation of the 2017 Agreement, it is of limited relevance when considering the intention or understanding of the negotiating parties. Mr Curtis’s evidence has been weighted accordinly.
Evidence of Mr Dion Matley
Mr Matley, is the Senior Manager Employment Relations for QR and was a member of the employee relations team throughout the negotiation, approval and implementation of the 2017 Agreement. I note that it is not clear from Mr Matley’s statement whether he was a bargaining representative attending bargaining meetings, or if his role during this time was as a part of the Employee Relations team that was providing support to the bargaining team.
Mr Matley continued as part of the employee relations team throughout the same process for the 2020 Agreement.
With respect to the development of applicable percentages that were applied as reduced rates in 2017, Mr Matley recalls as follows:[63]
“11. The reason for the reduced wage rate was an aggregate assessment of employees on concessional arrangements generally working fewer shifts that accrued penalties, loadings, or allowances as a result of the concessional arrangement.
12. The percentage reduction was a negotiated figure between the parties, rather than a mathematically quantified reflection of the fewer shifts. This was not dissimilar to the
arrangements in place before 2017, however with only two different reduced percentages, it made payroll application easier.
13. My recollection is that it was implemented with a consensus that the percentages represented an appropriate reduction to be applied universally for practicality, acknowledging that it might not accurately reflect any individual’s reduction in accrued penalties and similar through the concessional arrangement.
14. I do not recall the possibility being discussed of someone being able to work during
nominated, restricted time periods and the implications of this.
15. My recollection is that there was an assumption, as least on behalf of Queensland Rail, that if an employee was able to work hours in addition to a concessional agreement, then the concessional agreement would be modified to include this increase in availability”.
I note Mr Matley’s comments at point 14 and 15 above. I take these comments to mean that QR approached the development of the percentages on the basis that any restrictions that apply to workers during their ordinary hours as prescribed in their FWA, would also apply to any work undertaken outside of their ordinary hours, such as work undertaken during a DLP, and further, that if an employee chose to work non restricted hours on their DLP, the concessional arrangement would have to be amended. Put another way, I take Mr Matley’s evidence to be that it was his understanding that any work undertaken by a concessional worker on their DLP would only ever be undertaken during the restricted hours, unless the FWA was amended.
Interestingly though, I have seen no evidence or submissions regarding what happens in practice. I do however have difficulty accepting that the parties would knowingly create a situation where a worker subject to a concessional rate, who is asked and agrees to work a shift on their DLP that is outside of their agreed ordinary hours would be required to seek an alteration to the agreed ordinary hours of work in their FWA before doing so. As an example, if Ms Milley was asked to perform a shift during her DLP that was to finish at 2pm, rather than her usual 1pm, it seems absurd to suggest that she would be required to seek a modification to her FWA to include this “increase in availability” before considering whether to accept the extra shift. Noting the extra shift is being performed at a time she is not required to work.
I note that Mr Matley confirms above that this was an “assumption, at least on behalf of QR”. What is clear however is that Mr Matley does not recall there being a discussion about what would occur if Ms Milley, who under her FWA cannot be rostered to perform ordinary work after 1pm, accepts a shift on an SLP or DLP that is outside of these restrictions.
In the absence of any evidence or submissions to the contrary, nor any specific provisions within the Agreement that go to this point, it must be presumed that it is possible for Ms Milley to work such shifts in accordance with clause 93.9 of the Agreement which states “leisure hours will be rostered equitably between employees in each depot”.
In the alternative, had there been an understanding that concessional rate employees could not be offered or accept shifts outside of their agreed restrictions, this would surely have been specifically prescribed. That this was not done, adds weight to the AFULE’s contention that the FWA applies only to the ordinary hours of work prescribed within it and that any work performed outside of the FWA is not captured by it, nor the reduced rate. Notwithstanding the above, it is also curious that when establishing the relevant reduction in penalty rates that would apply for concessional arrangements, the possibility of them applying to work outside of the ordinary hours prescribed by the FWA, was not a factor that was expressly taken into consideration.
Evidence of Mr Dion Matley – Payroll and Implementation of the Agreement
In support of QR’s position, Mr Matley notes that ensuring any changes to pay systems were consistent with payroll practices and correctly implemented is a critical consideration for QR when participating in enterprise agreement negotiations.[64] Whilst I accept this to be true, I note that it is simply the subjective intention of one negotiating party when entering the negotiation. It is certainly not uncommon for such intention to not be realised through the bargaining process. Notwithstanding the above, in a payroll as large as QR’s I fail to see that the significant efficiencies that were gained by moving to just two standard categories of concessional arrangements, for ordinary hours worked, rather than the multitude of individual arrangements that would have applied otherwise, would not have met this objective, even if it were the case that work outside of these agreed ordinary hours was to be paid using a different rate.
A similar notion was expressed by Mr Curtis who asserts that an outcome that effectively created two rates of pay for concessional workers would be “abnormal to our practices and impractical to implement”. I note however that there is no suggestion of a third rate of pay, simply the concessional rate, and the full flat rate, that is applicable to all employees for work undertaken on a DLP. Viewed objectively, that the same rate of pay would be paid to all employees undertaking work on a DLP, whether subject to a FWA or not, would not seem to be either abnormal nor impractical.
Annexed, and marked DM-03, to Mr Matley’s statement is a drafted file note that he says was prepared for use of leaders when meeting with employees regarding a request for a reduced hours 7 days concessional arrangement, such as the one Ms Milley is subject to. The file note details the various categories of concessional employees, and moves through the key elements of a concessional arrangement.
Among these elements, is the following:
“3.1 Full flat rate reduction
As your arrangement is considered a 7 day concessional arrangement, your full flat rate would be reduced by 12.5% under the Agreement; meaning you would be paid 87.5% of the full flat rate”
Mr Matley contends that the above demonstrates that the reduction in rate was presented as an across-the-board reduction, with no caveats as to scope of its application. Viewed objectively, it could equally be argued that the lack of specificity in this note could be interpreted so as to mean that it is simply a reference to the rate that will be paid for work undertaken in accordance with the FWA.
As the AFULE argue, had there been an intention for the reduced rate to extend beyond the FWA, surely there would have been some reference within either the Agreement or the supporting materials to this effect. Similarly, the terms favoured by QR when explaining their understanding of concessional arrangements in their submissions and statements, “category wide modifier” and “across the board reduction” are not used. That this is not the case, adds weight to the AFULE’s contention that the reduced rate is intended to apply to ordinary hours undertaken within the confines of the FWA.
Further, Mr Matley refers to a copy of a prescribed form he says was used to formalise reduced hours for 7 days concessional arrangements with relevant employees (annexed and marked DM-04) Mr Matley states that this form was later developed into the current “Part-time / Reduced hours agreement” form, such as that which was used to formalise Ms Milley’s concessional arrangement.
Again, Mr Matley contends that this form makes direct reference to the reduction in pay rate to 87.5% of the full flat rate and that it is made clear that unless the reduced hours arrangement is varied, the employee will be paid at the reduced rate. As explored in paragraphs [78] and [79], I am not convinced that these comments related to work undertaken on a DLP. It seems more likely that these comments related to the alteration of restricted hours within a FWA. Again, I am not convinced by Mr Matley’s argument as it could equally be argued that the purpose of this form was to lock in the employees’ ordinary hours. That there is no reference on this form to any additional hours or work undertaken on DLP’s, gives rise to a suggestion that an employee may view this to mean that this agreement covers their standard/ordinary hours and that any hours undertaken outside of this agreement would be separate to it and consequently, not captured by the reduced rate.
Evidence of Mr Dion Matley – 2020 Negotiations
With respect to the 2020 negotiations, it is Mr Matley’s evidence that whilst there were some minor refinements to the provisions, the core intent of the provisions was retained, and that:[65]
“32. At no stage during this process was it suggested that the discussed, agreed, and implemented process around the payrates for the categories of concessional agreements were incorrect.
33. At no stage was it suggested that there should be limitations on the application of the reduced concessional rate of pay”.
I take these comments to mean that QR are of the view that because the Agreement was implemented in a certain way, and that no issues were raised during the life of the 2017 Agreement, nor during the negotiation of the 2020 Agreement, the Agreement has been correctly interpreted. This is simply not the case. Consideration of the post agreement conduct of the parties is insufficient to establish a common understanding where it amounts to little more than the absence of a complaint or common inadvertence.[66]
Whilst not specifically raised by the AFULE, I consider it is likely that the issues resulting in this dispute were only brought to the attention of the AFULE when raised by Ms Milley. Viewed objectively, it is most likely that the AFULE had not had cause to consider the way in which the Agreement was being interpreted until this time. As such, I consider the post agreement conduct of the parties to be of limited relevance.
Evidence of Mr Dion Matley – relevance of the 2013 Agreement
With respect to the history of the relevant provisions, Mr Matley’s states that the genesis of the concessional arrangements was clause 47.3 of the 2013 Agreement.[67] Upon clarification with QR, the extract of clause 47.3 in Mr Matley’s witness statement (annexed and marked DM-01) was inadvertently taken from an earlier draft copy of the 2013 Agreement, but has identical clause wording as the correct clause being 48.3 of the 2013 Agreement. It is noted the provisions in the 2013 Agreement appear to be consistent with similar provisions that appeared in clause 76 of the QR Passenger Pty Ltd Traincrew Union Collective Workplace Agreement 2009 (2009 Agreement).[68]
Relevantly, the wording of clause 48.3 is quite different to the wording that was adopted under the 2017 and 2020 Agreements. Clause 48.3 of the 2013 Agreement provided as follows:
“where the inability to perform full depot duties as set out above extends beyond 4 weeks, employee will be paid a percentage of the full flat rate applicable to the range of duties they are performing, for all time in excess of 4 weeks…..(emphasis added)
QR contend that the plain meaning of this is that all time worked by an employee subject to compassionate restrictions, outside of the initial 4-week period, would be subject to the reduced percentage rate.
With respect to the 2013 Agreement, the AFULE contend that “for all time” refers to payment for time worked in excess of four weeks, in circumstances where an employee cannot work their full core rostered hours, not work during DLPs or other work outside an employee’s core rostered hours.[69]
Whilst I accept the concept of a reduced rate may have come from the compassionate grounds provisions of the 2013 Agreement, I am not persuaded by QR’s contention that they were the “genesis of them”.
On the basis of the material before me, it seems that the parties held a shared interest in developing a FWA system that simplified the process and provided certainty for employees, but also simplified the payroll arrangements, down to two options, rather than the myriad of individual arrangements that would have been in place prior to 2017. It is not in contention that the final two categories and corresponding percentage reductions were a negotiated outcome, developed to incorporate the reduced availability of relevant employees to work their ordinary hours across the full span of hours and associated penalty rates. I have however, seen no evidence to suggest that the capacity to work outside of these ordinary hours, including on DLPs was taken into consideration when negotiating these rates. This is not surprising as it would simply be impossible to determine the extent of any such work, as work undertaken on DLPs can vary vastly between employees due to such work being subject to availability and employee agreement.
QR contend that when moving away from the old provisions, which required an individual calculation of the applicable percentage reduction, to the new standardised percentages, there was no intention on their part to vary the pre-existing application of the reduced rate to “all time worked”. QR further contend that “unless directly overwritten by a new intention, the pre-existing intention prevails”.
I find this a very difficult argument to accept, in light of the fact that, the removal of the words “for all time worked” does in-fact directly over-ride the existing words with a new intention, one that is more aligned with the AFULE’s submissions than QR’s.
Evidence of Mr Dion Matley – Impact of FWA restrictions on work performed during DLPs.
Notwithstanding the above, in further explaining why they believe the parties intended to apply the concessional rate to all time worked, QR contend that it is a “logical progression that an employee who has personal circumstances, that necessitate them entering into a FWA restricting their availability, will always have those same restrictions”.
Further to my consideration at paragraphs [78] – [82], I find this a very difficult argument to accept, particularly with respect to leisure periods. As an example, it is surely possible that a worker who has an FWA in place may find themselves able to work a different pattern on their leisure periods, depending on the day of the week and the shift that is being proposed. Whilst in Ms Milley’s case, her FWA requires that she not be rostered after 1pm however, it simply does not follow that she could not, by agreement, pick up an additional shift, or a shift on a DLP that may finish after 1pm, if her personal circumstances allowed it. Having not been provided any evidence to suggest otherwise, I do not accept that it would logically have been in the minds of the parties that an employee under a FWA, would always require these same restrictions.
Summary of findings relating to the intention of the parties
Having considered the material before me, I am not persuaded that there was a clear intention between the parties. Mr McKitrick has provided his recollection of the negotiations of both the 2017 and 2020 Agreements. Not only does Mr McKitrick not recall any suggestion that the reduced rate would apply to additional work performed during a DLP, he states that had such discussions taken place, the concept would have been strongly rejected.
QR’s evidence focuses on Mr Matley and Mr Curtis’s recollections of the time, and of their understanding of QR’s intention. I have not been persuaded that the supporting material developed and provided to employees provides a clear articulation of the intention of the parties, nor provides a clear explanation of how the relevant provisions were to be applied.
At best, the submissions of the parties support a finding that the application of the concessional rate outside of the agreed ordinary hours contained within the FWA was not considered or discussed. I have not been persuaded that any of the extrinsic material provided, or submissions regarding the intention of the parties creates context that should displace the clear and ordinary meaning of the words in the Agreement. With this in mind, I will now turn to the construction of the relevant provisions to determine if a clear and ordinary meaning can be determined.
The Construction of the Agreement
The Agreement is structured with provisions grouped into subgroups. The FWA provisions appear in a grouping of provisions under the subtitle, “Employment Relationship”. The provisions contained within this subgroup include, employment types, job share, individual flexibility arrangements, termination of employment, and others.
The penalty rate provisions are contained in a grouping titled “Occupational Specific Arrangements”. The other type of provisions in this part of the Agreement include matters such as crew-configurations and training. These provisions appear in the main to provide more specific information about the operation of the provisions, but by their nature, appear to apply to all employees, unless specified otherwise.
An example of this distinction are clauses 68, “In – Cab surveillance”, clause 69, “Training”, and relevantly, clause 79, “Ordinary hours of work”. Each of these provisions outline a range of matters that apply to all employees of the kind specified, regardless of whether or not their employment has been altered by an arrangement in the Employment Relationship part of the Agreement, such as a transition to retirement, probation or an FWA.
That the penalty payments provisions are contained within the “Occupational Specific” grouping of provisions and are quite separate to the FWA, concessional arrangements and reduced hours employment provisions which are included in the “Employment Relationship” grouping of provisions adds weight to a finding that the provisions as prescribed are intended to be applied uniformly and that the provisions in clauses 66 and 27 can be read consistently.
Full Flat Rate and Base Rate of Pay
The term “base rate of pay” is used throughout the Agreement and relevantly, with reference to the calculation of the full flat rate. Schedule 1 defines base rate of pay as follows:
“the rate of pay payable to an employee for their ordinary
hours of work, but does not include any of the following:(a) Incentive-based payments and bonuses;
(b) Loadings,
(c) Monetary allowances,
(d) Overtime or penalty rates; or
(e) Any other similar separately identifiable entitlements.For a full-time employee, base rates of pay are the rates set out in
Schedule 2”. (Emphasis added)
Schedule 1 defines Full Flat Rate as:
“an amount payable above the base rate of pay, identified in the schedule 1, representing:
For SEQ employees:
a. Penalty loadings and allowances for working shift work;
b. Annual leave loading (annualised);
c. Monetary allowances (excluding meal allowances);
d. Traction based loading;
e. Single Driver loading.
For Regional employees:
a. Penalty loadings and allowances for working shift work;
b. Work performed on weekends;
c. Annual leave loading (annualised);
d. Monetary allowances (excluding meal allowances);
e. Traction based loading;
f. DOO loading.
The Parties agree that the penalty allowance does not form part of employees’ ‘base rate of pay’ as that term is used in the Industrial Relations Act 1999 (Qld).”
The definition of the Base Rate of Pay expressly provides that it is the rate of pay payable for “ordinary hours worked”. Similarly, as the definition of Full Flat Rate incorporates the base rate, it is also taken to apply only to an employee’s ordinary hours of work. Consequently, it then follows that any penalties associated with work undertaken outside of ordinary hours, such as work undertaken on a DLP are applied separately, in accordance with the penalty rate provisions of the Agreement. This also adds weight to the AFULE’s contention that clauses 66 and 27 can be read consistently.
What is ordinary time?
Clause 66.1 of the Agreement provides that all excess time will be paid at 170% of the full flat rate. Importantly, 66.3 provides:
“Excess time is all time credited to an employee in excess of their ordinary hours, or the maximum number of ordinary shifts per cycle as set out in clause 79.”
Clause 79 “Ordinary Hours of Work”, provides the ordinary hours of work for all employees. Clause 79 provides that full time employees will work 160 hours across four weeks over a maximum of 19 attendances across the four weeks. It is noted that Ms Milley’s hours of work are wholly consistent with these hours, save that she is not available to be rostered after 1pm. I consider this to be an important consideration.
Whilst Clause 27.2 of the Agreement does not reference the term “ordinary hours”, it clearly references that reduced hours employment and concessional arrangements are “available” for “up to and including 160 hours”. Ms Milley’s roster is therefore consistent with clause 79.1 of the Agreement in that she works 160 hours across a 4 week period, 7 days a week.
It is also noted that Ms Milley’s pay slips refer to her regular rostered shifts as “ordinary hours”. Viewed objectively, and having considered the submissions of the parties, I find that the 160 hours Ms Milley works each 4-week cycle are her ordinary hours of work. Consequently, any hours undertaken outside of these ordinary hours are to be treated as excess time worked in accordance with clauses 66.1 – 66.3 or, for such work performed during leisure periods, in accordance with 66.8 and 66.9 of the Agreement.
Can the words be prescribed a plain meaning?
The AFULE say that the wording of clause 66.8 of the Agreement, in specifying that employees who work during DLPs are to receive a penalty payment of 175% of the full flat rate is plain and unambiguous language. Further, that the term “Full Flat Rate” is defined by Schedule 1 of the Agreement for the express purpose of removing any ambiguity.
QR’s position seems to be predicated on their understanding that clause 27.2 of the Agreement essentially acts as a “category wide modifier” that adjusts the Full Flat Rate, however, as submitted by the AFULE, clause 27 of the Agreement does not provide any basis for QR to pay Ms Milley a reduced rate of 87.5% of the full flat rate for work done during DLPs.[70]
Further, on plain reading, clause 27.2 prescribes the percentage reductions that apply to concessional arrangements (87.55% for CAT B and 80% for CAT C). The table provided at 27.2 expressly provide that the relevant employees “Availability” is “up to and including 160 hours per week”. Again, on plain reading, this indicates that the arrangement is intended to apply only up to 160 hours, which are the ordinary hours for all employees as prescribed at Clause 79. I agree with the AFULE on this point. Consequently, I am not persuaded by QR’s arguments, nor do I consider the plain reading of the words supports their position that clause 27.2 of the Agreement creates a “category wide modifier”.
Notwithstanding any of the above, in its simplest form, Clause 66.8 of the Agreement expressly provides that employees who work during a DLP will have all time worked paid at the rate of 175% of the full flat rate. As highlighted by the AFULE, the full flat rate as defined in Schedule 1 and specified in Schedule 2 of the Agreement does not contemplate a reduced rate being payable to employees on FWAs.[71] The AFULE further submit that clauses 27 and 30 set out all of the limitations, restrictions and conditions that are relevant to the operation of FWAs. As an example, clause 27 of the Agreement places specific restrictions to the way annual leave is calculated but does not place any such restrictions on the interaction of clause 66 with the FWAs.
Similarly, clause 30.6 of the Agreement, clearly specifies that employees working under concessional arrangements are entitled to receive the same minimum SLP and BLP allocations as full-time employees but again, no restrictions are placed on the applicability of associated penalties prescribed by clause 66.
Having considered the above, I agree with the AFULE that on plain reading, the relevant provisions of the Agreement are unambiguous and can be prescribed a plain meaning.
Having considered the terms of the Agreement as written I find that the concessional rate prescribed at clause 27.2 of the Agreement applies to ordinary time only (up to and including 160 hours). Consequently, all excess time worked outside of ordinary hours is to be paid in accordance with clause 66, which applies in according to its terms.
Consequently, as clause 66.8 of the Agreement expressly provides that employees working on DLPs shall have all time worked paid at the rate of 175% of the full flat rate, this would also apply to an employee subject to a FWA that contains a concessional rate.
Other relevant factors
S. 65 of the Act
Clause 30 of the Agreement provides useful context to concessional arrangements, describing them essentially as arrangements that facilitate FWAs per s.65 of the Act. The AFULE argue this means an employee can seek a change in their working arrangements to accommodate flexibility, but that this does not alter all other terms and conditions of employment and that as such, they continue to apply.
To that end, the AFULE contend that Ms Milley has not agreed to vary any other aspect of her working arrangements or conditions of employment other than the reduction of rate for her rostered hours of work. Consequently, they consider that Ms Milley’s terms and conditions of employment remain as those set out in the Agreement, except to the extent that they are varied by the FWA. I accept the AFULE’s submissions in this regard and consider they add weight to a finding that Ms Milley’s FWA applies only to the ordinary hours of work contained within it.
Do the provisions result in an inequality between workers on FWAs and those who are not?
The AFULE contend that QR’s approach to the application of the FWA provisions means that it is cheaper to use its FWA workforce to “fill gaps” in the roster, thus creating inequity between those on FWAs and those who are not. The AFULE further argue that this may lead to the inequitable allocation of additional shifts as between different classes of employees, which would be inconsistent with the objects of the Act.
QR submit that this argument is misconceived, as shifts during leisure periods are offered for acceptance, not allocated, and that as such, any employee can choose whether or not to work during a leisure period. In any event, QR argue that employees working on concessional shifts would be reasonably limited in the excess time they could accept by virtue of their personal circumstances, thereby maintaining fairness for other employees. Whilst I accept that this may well be the case, it does not detract from the reality that, as currently applied, the provisions do result in a situation where for the same shift, an employee working under a concessional arrangement would be paid less than an employee who was not, even though both employees are working during their DLP, and noting that Ms Milley, as a CAT B concessional worker, is entitled to exactly the same number of DLPs as other non-concessional workers.
Having considered the submissions of the parties, I accept the AFULE’s contention that it could not have been the intention of the parties to agree to a scenario where it would be less expensive for QR to fill gaps in the roster by assigning additional shifts to employees on concessional work arrangements.
Conclusion
Having considered the submissions of the parties I have not been persuaded that their existed any common intention with respect to the application of concessional rates outside of the ordinary hours prescribed in an employee’s FWA. In the absence of any clear intention by the parties to expressly exclude workers on concessional rates from the provisions of clause 66 of the Agreement, I find that the words as written should be prescribed their plain meaning.
Having considered the words as written, the structure of the relevant provisions, their place within the Agreement and other relevant factors, I find that Clauses 27.2 and 66 of the Agreement can be read together consistently.
I find that Clause 66.8 of the Agreement applies to and is unencumbered by the existence of a FWA, meaning that employees working under concessional arrangements continue to be paid at 175% of the full flat rate for work on DLPs.
I answer the question posed by the parties as follows:
Question:
“What is Ms Milley entitled to be paid for work performed on a designated leisure period?’
Answer:
In accordance with clause 66 of the Agreement, Ms Milley is entitled to be paid 175% of the full flat rate (100%) for all work performed during a designated leisure period.
COMMISSIONER
[1] P.4 of Mary Milley Witness Statement.
[2] [2017] FWCFB 3005.
[3] [2022] FWCFB 7 at [29].
[4] [2020] FCAFC 123.
[5] AMA (Victoria) Ltd T/A AMA Victoria & Australian Salaried Medical Officers Federation-Victoria Branch (132N-VIC) v The Royal Women's Hospital[2021] FWCFB 6044 at [41].
[6] Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52; 219 CLR 165 at [40].
[7] [2017] FWCFB 3005 at [38].
[8] [2017] FWCFB 4487.
[9] [2014] NSWCA 184 at [71] – [85].
[10] Manufacturers’ Mutual Insurance Ltd v Withers (1988) 5 ANZ Ins Cas 60-853 at 75-343
[11] Kirin-Amgen Inc v Hoechst Marion Roussel Ltd [2004] UKPC 6; [2005] 1 All ER 667 at [64].
[12] Project Blue Sky v Australian Broadcasting Authority [1998] HCA 28; 194 CLR 355 at [78].
[13] Charter Reinsurance Co Ltd v Fagan [1997] AC 313 at 391 per Lord Hoffman, approved in Campbell v R [2008]
NSWCCA 214; 73 NSWLR 272 at [48] (Spiegelman CJ, Weinberg AJA and Simpson J agreeing).
[14] Codelfa Construction Pty. Ltd. v State Rail Authority of N.S.W. (1982) 149 CLR 337 at [22].
[15] Franklins Pty Ltd v Metcash Trading Ltd [2009] NSWCA 407; 76 NSWLR 603 at [17] cited in Mainteck Services Pty Ltd
v Stein Heurtey SA (2014) 310 ALR at [71] – [85].
[16] Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52; 219 CLR 165 at [40].
[17] P.2 of Mary Milley Witness Statement.
[18] Ibid P.3.
[19] Ibid.
[20] Ibid.
[21] Ibid P.2.
[22] P.3 of AFULE Outline of Submissions.
[23] P.4 of Mary Milley Witness Statement.
[24] Ibid.
[25] Ibid.
[26] Ibid.
[27] Ibid.
[28] P.2 of AFULE Outline of Submissions.
[29] Ibid P.7.
[30] Ibid.
[31] Ibid P.2.
[32] Ibid P.6.
[33] Ibid.
[34] Ibid P.7.
[35] Ibid.
[36] Ibid.
[37] Ibid P.8.
[38] P.3 of QR Submissions.
[39] Ibid.
[40] Ibid.
[41] P.3 to P.4 of QR Submissions.
[42] Ibid.
[43] Ibid.
[44] Ibid P.4.
[45] Ibid.
[46] Ibid P.5.
[47] Ibid P.6.
[48] Ibid P.7.
[49] Ibid.
[50] Ibid P.8.
[51] P.5 to P.6 of AFULE Reply Submissions, citing AMWU v Berri Pty Limited [2017] FWCFB 3005.
[52] Ibid P.2.
[53] P.8 of AFULE Reply Submissions.
[54] Ibid.
[55] Ibid P.9.
[56] Ibid P.11 to P.12.
[57] P.2 of AFULE Outline of Submissions.
[58] P.5 of QR Submissions.
[59] Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52; 219 CLR 165 at [40].
[60] P.1 of Mick McKitrick Statement in Reply.
[61] Ibid P.2.
[62] P.2 of Andrew Curtis Statement.
[63] P.2 of Dion Matley Statement.
[64] Ibid..
[65] Ibid P.3.
[66] AMWU v Berri Pty Limited[2017] FWCFB 3005 at [114] (15).
[67] P.1 of Dion Matley Statement.
[68] P.3 of QR Submissions.
[69] Ibid P.9.
[70] P.1 of AFULE Reply Submissions.
[71] Ibid.
Printed by authority of the Commonwealth Government Printer
<PR776105>
0
12
0