Australian Municipal, Administrative, Clerical and Services Union v Virgin Australia Airlines Ltd
[2024] FWC 1378
•27 MAY 2024
| [2024] FWC 1378 |
| FAIR WORK COMMISSION |
| RECOMMENDATION |
Fair Work Act 2009
s.739—Dispute resolution
Australian Municipal, Administrative, Clerical and Services Union
v
Virgin Australia Airlines Ltd
(C2023/7192)
| DEPUTY PRESIDENT LAKE | BRISBANE, 27 MAY 2024 |
Alleged dispute about any matters arising under the enterprise agreement – backpay – whether backpay for all purposes or base salary – meaning of “salary” – recommendation issued.
On 23 November 2023, the Australian Municipal, Administrative, Clerical and Services Union (the Applicant) made an application to the Fair Work Commission (the Commission) seeking to resolve a dispute with Virgin Australia Airlines Ltd (the Respondent) under s.739 of the Fair Work Act 2009 (the Act).
The dispute concerns the payment of backpay under the Virgin Australia – Integrated Operations Centre Enterprise Agreement 2023 (the Agreement). The parties initially attempted to resolve the dispute at the workplace level but were unsuccessful. Clause 41 of the Agreement allows the Commission to deal with the dispute initially by making a recommendation:
“41.4If discussions at the workplace level do not resolve the dispute, a party to the dispute may resolve the dispute to Fair Work Commission.
41.5 The Fair Work Commission may deal with the dispute in two (2) stages:
(a) the Fair Commission will first attempt to resolve the dispute as it considers appropriate, including by mediation, conciliation, expressing an opinion or making a recommendation…”
Both parties expressed their consent for me to issue a recommendation on the matter based on written material filed by the parties. The parties have agreed on the following question for determination:
Is an employee who is entitled to receive backpay under the provisions of Clause 5 of Schedule 2 of the Virgin Australia Integrated Operations Centre Agreement 2023 entitled to receive the back payment for all purposes, including for any overtime worked during the period referred to?
Consideration
The ASU contend that their members have not received their full backpay. The ASU states that Virgin Australia has not put a limitation on this clause, and Virgin Australia should have clearly expressed the limitation of backpay to the base salary only. Virgin Australia have stated that the Agreement’s terms and bargaining materials demonstrate the Respondent’s intention was to backpay exclusively on base salary.
Schedule 2 of the Agreement provides as follows:
“5. Back Payment
Both existing team members and established team members will receive back payment of salary for the time spent at each classification level from the first full pay period on or after 1 July 2022 to the commencement date. For the avoidance of doubt, if the commencement date is after the first full pay period in July 2023, then the July 2023 rate will apply when calculating back payment for the period from the first full pay period in July 2023 to the commencement date.”
The parties have agreed on the principles that are to be applied in construction of interpreting this Agreement.[1] In summary, the Agreement must be understood by reference to the ordinary meaning of the word,[2] read in light of its industrial context and purpose.[3] Context is not confined to the words of the instrument surrounding the expression to be construed,[4] and may include “ideas that gave rise to an expression in a document from which it has been taken”[5]
In my view, the meaning of ‘salary’ is clear when reviewing the Agreement. Clause 6.3 of the Agreement states what the annual salary comprises of:
“The annual salaries set out in Schedule 2 of this agreement compensate a full-time team member working 161 hours over a 28-day period. The extra 9 hours above ordinary hours in clause 6.2 are incorporated into the team’s member’s annualised salary and are not paid in addition to”.
Clause 10.2 of the Agreement states:
“Salaries and salary increases are included in Schedule 2 of this Agreement.”
Clause 11.1 of the Agreement regarding overtime states:
“All hours worked, which are in addition to the hours encompassed by the Full-Time team member's annualised salary provided in Schedule 2, including for all hours worked on an Annual Leave day or a non-rostered day, will be paid at 150% of their ordinary hourly rate.
The term salary/annual salaries/additional salaries are interchangeable as they all reference Schedule 2 of the Agreement. The rates that are prescribed in Schedule 2 are set, which do not account for overtime. It would also make sense that the salary would be limited to Schedule 2 considering the industrial light and purpose of the clause. Through providing backpay of the base salary, it would be an easier process for payroll to process the additional payments to their employees.
If further evidence is required to aid interpretation of the Agreement, the notion of salary appears to indicate backpay of base salary only.[6]
On 2, 3 and 5 May 2023, the Virgin Australia conducted ‘roadshows’ with its employees to explain the terms of the Agreement. Copies of the Agreement, explanations and a PowerPoint presentation were provided to employees. In the overview of the key benefits of the Agreement, the PowerPoint presentation states that the Agreement provides an “11.5% increase to base salary (inclusive of 2.5% backpay to base salary)” and “base salary back paid to July 2022”. These references to “base salary” again appear to limit back pay.
Conclusion
Therefore, my answer to the question for arbitration would be as follows:
Is an employee who is entitled to receive backpay under the provisions of Clause 5 of Schedule 2 of the Virgin Australia Integrated Operations Centre Agreement 2023 entitled to receive the back payment for all purposes, including for any overtime worked during the period referred to?
No, the Clause states that employees are entitled to back pay of salary. “Salary” is clearly outlined as the renumeration of the hours of work which are 161 hours over a 28-day period outlined in Schedule 2.
The dispute should be resolved.
DEPUTY PRESIDENT
[1] James Cook University v Ridd [2020] FCAFC 123 at 65.
[2] City of Wanneroo v Holmes [1989] FCA 553; 30 IR 362, 378; City of Wanneroo v Australian Municipal, Administrative, Clerical and Services Union [2006] FCA 813; 153 IR 426 [53]; WorkPac Pty Ltd v Skene [2018] FCAFC 131; 264 FCR 536 [197].
[3] Amcor Ltd v Construction, Forestry, Mining and Energy Union [2005] HCA 10; 222 CLR 241 [2].
[4] City of Wanneroo v Australian Municipal, Administrative, Clerical and Services Union [2006] FCA 813; 153 IR 426 [53].
[5] Short v FW Hercus Pty Ltd (1993) 40 FCR 511, 518.
[6] AMIEU v Golden Cockerel Pty Ltd [2014] FWCFB 7447 at 41.
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