Australian Liquor, Hospitality and Miscellaneous Workers Union v Metropolitan Ambulance Service
[2002] FCA 1321
•25 OCTOBER 2002
FEDERAL COURT OF AUSTRALIA
Australian Liquor, Hospitality & Miscellaneous Workers Union v Metropolitan Ambulance Service [2002] FCA 1321
INDUSTRIAL LAW – Construction of Award – whether annual leave loading applies to annual leave in excess of the four weeks annual holiday entitlement
Workplace Relations Act 1996 (Cth) ss 178 and 179
Curragh Queensland Mining Limited v Construction, Forestry, Mining and Energy Union (1997) 77 IR 232 - considered
Australian Municipal, Administrative, Clerical and Services Union v Treasurer of the Commonwealth (1998) 82 FCR 175 - citedAUSTRALIAN LIQUOR, HOSPITALITY AND MISCELLANEOUS WORKERS UNION AND MARK SOMERS, GORDON BOWMAN, TREVOR MCCOSKER, JOHN MAHER, DAVID GAWNE, ANDREW GUNN v METROPOLITAN AMBULANCE SERVICE AND RURAL AMBULANCE VICTORIA (formerly Ambulance Service Victoria – South Eastern Region, Ambulance Service Victoria – South Western Region, Ambulance Service Victoria – North Eastern Region and Ambulance Service Victoria – Western Region)
V 198 of 2002MERKEL J
25 OCTOBER 2002
MELBOURNE
IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
V 198 OF 2002
BETWEEN:
AUSTRALIAN LIQUOR, HOSPITALITY AND MISCELLANEOUS WORKERS UNION
FIRST APPLICANTMARK SOMERS
SECOND APPLICANTGORDON BOWMAN
THIRD APPLICANTTREVOR MCCOSKER
FOURTH APPLICANTJOHN MAHER
FIFTH APPLICANTDAVID GAWNE
SIXTH APPLICANTANDREW GUNN
SEVENTH APPLICANTAND:
METROPOLITAN AMBULANCE SERVICE
FIRST RESPONDENTRURAL AMBULANCE VICTORIA (formerly Ambulance Service Victoria - South Eastern Region, Ambulance Service Victoria - South Western Region, Ambulance Service Victoria - North Eastern Region and Ambulance Service Victoria - Western Region)
SECOND RESPONDENTJUDGE:
MERKEL J
DATE OF ORDER:
25 OCTOBER 2002
WHERE MADE:
MELBOURNE
THE COURT DIRECTS THAT within 14 days the parties bring in Minutes of Orders that give effect to the reasons for judgment in this matter.
Note: Settlement and entry of orders is dealt with in Order 36 of the Federal Court Rules.
IN THE FEDERAL COURT OF AUSTRALIA
VICTORIA DISTRICT REGISTRY
V 198 OF 2002
BETWEEN:
AUSTRALIAN LIQUOR, HOSPITALITY AND MISCELLANEOUS WORKERS UNION
FIRST APPLICANTMARK SOMERS
SECOND APPLICANTGORDON BOWMAN
THIRD APPLICANTTREVOR MCCOSKER
FOURTH APPLICANTJOHN MAHER
FIFTH APPLICANTDAVID GAWNE
SIXTH APPLICANTANDREW GUNN
SEVENTH APPLICANTAND:
METROPOLITAN AMBULANCE SERVICE
FIRST RESPONDENTRURAL AMBULANCE VICTORIA (formerly Ambulance Service Victoria - South Eastern Region, Ambulance Service Victoria - South Western Region, Ambulance Service Victoria - North Eastern Region and Ambulance Service Victoria - Western Region)
SECOND RESPONDENTJUDGE:
MERKEL J
DATE:
25 OCTOBER 2002
PLACE:
MELBOURNE
REASONS FOR JUDGMENT
The applicants commenced a proceeding in the Court pursuant to ss 178 and 179 of the Workplace Relations Act 1996 (Cth) claiming that the respondents, or their predecessors as employers, failed to pay certain employees the annual leave loading of 17.5% (“the annual leave loading”) they were entitled to receive on all annual leave taken by those employees between 5 April 1996 and 5 April 2002. In addition to claiming relief in their own right the second to seventh applicants claimed relief as representative parties pursuant to Pt IVA of the Federal Court of Australia Act 1976 (Cth). The group members represented by those applicants were persons employed by the respondents, or their predecessors, between 5 April 1996 and 5 April 2002 as seven-day shift workers (“the shift workers”).
The relevant facts may be summarised as follows. The respondents or their predecessors (“the Regional Ambulance Services”) provided ambulance services in the State of Victoria. Until 22 March 1994 employees of the Regional Ambulance Services were employed under the Ambulance Services Award (No 2 of 1989) (“the Victorian Award”), an award of the former Industrial Relations Commission of Victoria. Under the Victorian Award employees were entitled to four weeks annual leave but there was no obligation on employers to pay the annual leave loading. However, in practice the employers continued to pay the annual leave loading on four weeks annual leave. Although the shift workers were entitled to additional leave under the Victorian Award, their employers did not pay the annual leave loading in respect of that leave. After the commencement of the Annual Leave Payments Act 1992 (Vic), which removed award or contractual obligations to pay the annual leave loading, the previous practice of paying the annual leave loading was discontinued by some of the Regional Ambulance Services but continued by other Regional Ambulance Services.
On 26 May 1994 the Australian Industrial Relations Commission (“the Commission”) made the Ambulance Employees – Victoria Interim Order [1994] (“the Commonwealth Award”), which covered employees who had previously been covered by the Victorian Award. Relevantly for present purposes, cl 2 of the Commonwealth Award provided that, subject to certain exceptions that are not presently relevant, employees “will be entitled to all terms and conditions of employment prescribed” in the Victorian Award. When the matter was before the Commission the parties were in dispute in relation to whether the annual leave loading was to apply to annual leave. The first applicant (“the Union”) representing the employees, claimed that the loading should apply but that claim was opposed by the Regional Ambulance Services. In his decision, handed down on 23 March 1994, Senior Deputy President Riordan stated:
“It is my very firm view that the payment of a loading of 17 ½ per cent at the time annual leave is taken is a principle of this commission and represents one of its standards. In those circumstances, and consistent with the earlier decisions I have made, and those made by other members of the Commission, this award or order will contain a provision providing for 17 ½ per cent loading to be paid to employees at the time they take their annual leave.”
The Senior Deputy President acknowledged that the parties were in agreement that the Commonwealth Award would otherwise, in effect, guarantee to the employees the terms and conditions of employment specified in the Victorian Award. As a consequence of the decision of the Senior Deputy President, cl 7 of the Commonwealth Award provided:
“All employees shall be entitled to a 17.5 per cent annual leave loading.”
An issue arose as to whether the annual leave loading applied only to annual leave that accrued after the Commonwealth Award or only to annual leave taken after the Commonwealth Award. The Union argued that the annual loading applied to leave actually taken, notwithstanding that some of that leave may have accrued prior to the Commonwealth Award. It claimed that that had been the longstanding custom and practice and that the interim order “was intended to restore the status quo” and “maintain conditions of employment for employees in the ambulance industry”. The Senior Deputy President, in a decision handed down on 23 August 1994, stated that the annual leave loading was a standard of the Commission and was intended to be “a loading on annual leave payable at the time the leave was taken”. Accordingly, the loading was to be on annual leave taken after the Commonwealth Award, rather than annual leave that accrued after that award. As a consequence, cl 7 of the Commonwealth Ambulance Services Award was amended so that it read:
“7.All employees shall be entitled to a 17.5% annual leave loading on all annual leave taken on or after 22 March 1994.”
The Regional Ambulance Services paid their employees the annual leave loading on the four weeks annual leave taken by those employees as from 22 March 1994. However, a dispute has arisen as to whether the Regional Ambulance Services breached the Commonwealth Award by failing to pay the annual leave loading on annual leave in excess of four weeks to which the employees were entitled and which they took. The dispute is of some significance as, if the Union claim for underpayment of the annual leave entitlement is correct, that will result in payments of varying amounts to many of the employees, which may result in many employees receiving in the order of $2,000 to $3,000 each at a total cost to the respondents said to be in the region of $5 million.
Although the terms of employment of the relevant employees are covered by numerous certified agreements in addition to the Commonwealth Award, it was common ground that the dispute between the parties related essentially to the proper construction of the relevant provisions of the Commonwealth Award and that the resolution by the Court of that issue would, for practical purposes, resolve the same question of construction that arises under the various certified agreements. Accordingly, I indicated that I would hand down my decision on the question of construction and direct the parties to bring in minutes of orders to give effect to my decision.
The question of construction relates to cll 32 and 37 of the Victorian Award which, by cl 2 of the Commonwealth Award, were incorporated into the Commonwealth Award without any changes that are relevant for present purposes. Clause 32 relevantly provides:
“ANNUAL HOLIDAY
(a)(i) Except as otherwise provided in this Award every employee will at the end of each year of his employment by an employer become entitled to an annual holiday of four weeks on ordinary pay.
(ii)The annual holiday will be given and taken in four consecutive weeks, or if the employee and the employer so agree, in two separate periods and not otherwise.
…
(d)In addition to the leave hereinbefore prescribed seven-day shift employees, that is shift employees who are rostered to work regularly on Sundays and holidays will be allowed one week’s leave including non-working days.
(e)Where an employee with one year’s continuous employment is engaged for part of the yearly period as a seven-day shift employee, he will be entitled to have the period of four weeks annual leave hereinbefore prescribed increased by half a day for each month he is continuously engaged as aforesaid.”
Clause 37 confers entitlements on employees who work on public holidays. The relevant entitlement in cl 37 is:
“…if an employee works on any of such holidays, or such holiday occurs on his rostered day off, or if an employee would normally have been rostered for duty on a public holiday, but was absent on leave through sickness and such employee has worked an extra shift in lieu thereof, he will be given:
(a) Within four weeks of the date on which such holiday occurs-(1)One and a half extra day’s pay; or
(2)Equal time off in one period in lieu of which seven days’ notice will be given: or
(b) One and a half days will be added to his annual leave; or
(c)In the case of an employee not qualifying for annual leave and sub-clause (a) (1) and (2) hereof has not been applied, one and a half day’s pay will be added to the payment in lieu of annual leave.”
Clause 7 of the Commonwealth Award provides that employees shall be entitled to the annual leave loading:
“on all annual leave taken on or after 22 March 1994”.
The issue is whether the annual leave loading applies only to the four weeks annual leave provided for in cl 32(a)(i), or whether it also applies to the leave provided for in cll 32(d) and (e) and cl 37. The applicants contend that the leave provided for in cll 32(a)(i), 32(d) and (e) and cl 37 is leave taken annually and is described as annual leave with the consequence that when that leave is taken the employee is entitled to the annual leave loading in respect of it.
The respondents contend that the annual leave referred to in cl 7 is, as a matter of construction, restricted to the annual holiday of four weeks referred to in cl 32(a) and does not include the additional leave referred to in cll 32(d) or (e) or cl 37. The respondents rely upon the history of the annual leave loading in respect of the annual leave taken by the relevant employees in support of their construction, arguing that at no time had the loading been paid on annual leave entitlements (if any) in excess of four weeks. The respondents claim that when the Commonwealth Award was made there was no intention on the part of the parties or of the Commission to add to or depart from the previous practice. They point to the Union’s argument to the Commission that the Commonwealth Award was intended to restore the status quo and maintain previous conditions of employment for employees in the Ambulance Industry.
In Curragh Queensland Mining Limited v Construction, Forestry, Mining and Energy Union (1997) 77 IR 232 at 240 I considered the use of intrinsic material in construing an award:
“There may be some limited use of extrinsic material in the process of interpreting an award including deciding whether the terms are clear and unambiguous. In general it is legitimate, for the purpose of construing a clause in an award, to look at the history of the provision: see Short v FW Hercus Pty Ltd (1993) 40 FCR 511 at 517-518. It is also legitimate to have regard to the context in which the award was made: see Short at 517-520, 523. As was said by Isaacs J, citing Lord Halsbury LC, in Australian Agricultural Company Ltd v Federated Engine-Drivers and Firemen’s Association of Australasia (1913) 17 CLR 261 at 272:
‘The time when, and the circumstances under which, an instrument is made, supply the best and surest mode of expounding it.’”
See also Australian Municipal, Administrative, Clerical and Services Union v Treasurer of the Commonwealth (1998) 82 FCR 175 at 178.
The extrinsic material relied upon in the present case is inconclusive about whether the Commission intended that the annual leave loading only applies to four weeks annual leave and not to the additional leave in respect of public holidays and shift employees. As explained above, the Victorian Award did not provide for the annual leave loading and, in any event, since 1992 there was no enforceable award or contractual obligation in Victoria in respect of the annual leave loading. Further, there was no settled practice under which all of the Regional Ambulance Services paid the annual leave loading. When the issue of the loading came before the Commission, although it was common ground that the Commonwealth Award would incorporate most of the provisions of the Victorian Award, the parties were in dispute over whether the annual leave loading was to apply. Neither party specifically raised the particular issue upon which they are now in dispute. Further, it is common ground that there was no settled practice or principle within the Commission as to whether the loading is restricted to four weeks annual leave or was to be payable on annual leave entitlements in excess of four weeks. Thus, there is no basis upon which it could be concluded that when the Commission considered the matter it intended that the annual leave loading was only to apply to the four weeks annual leave entitlement under cl 32(a).
Although the respondents placed reliance upon the Union’s submissions to Commission at the later hearing in relation to whether the annual leave loading was to be applied to annual leave taken or to annual leave accrued, those submissions were not made in the context of the issue now arising for determination. Rather, they only related to whether the loading was to apply to the leave taken or to the leave that had accrued since 22 March 1994. It was in that context that the Union submitted that the Commonwealth Award should protect the status quo.
In the present case, even on the broadest view that might be taken as to the use of extrinsic material on a question of construction, I do not regard the past history as being of assistance in the resolution of the issue which I am to decide.
The present case is one in which the ordinary and natural meaning of the words used provides the best guide to the intention of the Commission and to the manner in which cl 7 of the Commonwealth Award is to operate.
Clause 7 of the Commonwealth Award provides that the annual leave loading is to be payable on “all annual leave taken” after 22 March 1994. Clause 32(a)(i) of the incorporated Victorian Award provides for an “annual holiday of four weeks on ordinary pay”. Clause 32(d) provides that, in addition to that leave, the shift employees will be allowed “one weeks leave including non-working days”. Clause 32(e) makes it quite clear that the one weeks leave referred to in cl 32(d) is intended to be an increase in the period of four weeks annual leave referred to in cl 32(a)(i). Clause 37 operates on the same premise namely, that the additional leave to which an employee is entitled as a result of working on a public holiday is to be “added to his annual leave”.
It is clear that the annual leave referred to in cl 7 of the Commonwealth Award is the annual leave referred to in cll 32(a)(i), 32(d) and (e) and 37 of the Victorian Award. The respondents argued that such a construction would be anomalous as, for example, it would result in employees who work on public holidays obtaining benefits under cl 37 which have a different value for the same work. The respondents claim that the anomaly arises because the annual leave loading benefit only applies to an employee who applies his or her public holiday work entitlement to annual leave. While the premise upon which the argument is based might be accepted it does not follow that there is anything anomalous about the outcome, as it may be up to each employee to decide which of the benefits the employee will take. In any event, even if there was a possible anomaly in that outcome that would not be sufficient to change the clear and unambiguous meaning of the relevant clauses which is that the annual leave to which an employee is entitled, and upon which the employer is obliged to pay the annual leave loading, is the total amount of annual leave taken by that employee in accordance with the entitlements accruing under cll 32(a)(i), 32(d) and (e) and 37.
Accordingly, the applicants are correct in their contention that the Regional Ambulance Services have not been paying the annual leave loading to shift employees in accordance with their entitlements under the Commonwealth Award and the relevant certified agreements, and orders should be made accordingly. I propose to direct that, within fourteen days, the parties bring in minutes to give effect to those reasons for decision. In the event that there is any disagreement on the orders that are appropriate the parties may file written submissions within that time in respect of any matter upon which they are not agreed.
I certify that the preceding twenty (20) numbered paragraphs are a true copy of the Reasons for Judgment herein of the Honourable Justice Merkel. Associate:
Dated: 24 October 2002
Counsel for the First to the Seventh Applicants: Mr WL Friend Representative for the First to Seventh Applicants: Australian Liquor, Hospitality and Miscellaneous Workers Union Counsel for the Respondent: Dr CN Jessup QC with
Ms J MacleanSolicitor for the Respondent: Clayton Utz Date of Hearing: 17 October 2002 Date of Judgment: 25 October 2002
5
4
0