Australian Rail, Tram and Bus Industry Union v Sydney Trains
[2024] FWC 2650
•23 OCTOBER 2024
| [2024] FWC 2650 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.739 - Application to deal with a dispute
Australian Rail, Tram and Bus Industry Union
v
Sydney Trains
(C2024/3026)
| DEPUTY PRESIDENT CROSS | SYDNEY, 23 OCTOBER 2024 |
Alleged dispute about any matters arising under the enterprise agreement and the NES;[s186(6)]
An application was made by the Australian Rail Tram and Bus Industry Union (the RTBU), pursuant to Clause 8, Dispute Settlement Procedure (DSP), of the Sydney Trains and NSW TrainLink Enterprise Agreement 2022 (the Agreement). The disputes relate to Clauses 66 and 138 of the Agreement, and the entitlement of Mr Michael Malone to be paid higher grade rates of pay while on leave from Sydney Trains (the Respondent/Sydney Trains).
On 4 June 2024, the parties participated in a conference before the Fair Work Commission (the Commission) prior to this matter proceeding to hearing. At that conference, the parties agreed that clause 138 of the Agreement was sufficiently ambiguous to warrant the matter to be determined by the Commission. The parties distilled the question for determination (the Question) which was subsequently filed with the Commission on 20 June 2024 as follows:
Did clause 138.3 entitle Mr Malone to be paid leave entitlements at his higher-grade rate for the period 9 July 2023 to 8 January 2024.
On 20 June 2024, the parties submitted a list of agreed facts in this matter as follows:
(a) Mr Malone acted in a higher grade role of Trainer / Assessor at classification RC5 between 9 July 2023 and 8 January 2024;
(b) During the Period, Mr Malone took several instances of approved annual and personal leave;
(c) The total number of hours claimed is 79.5 of annual leave;
(d) Mr Malone’s approved leave was paid at his substantive rate of pay and not the higher grade; and
(e) Mr Malone also took personal leave during the period 10 November 2023 for a total of 8 hours. This was paid at his substantive rate of pay and not the higher grade rate.
In accordance with directions issued, the Applicant filed an Outline of Submissions and a statement of Mr Michael Malone on 19 July 2024, and the Respondent filed an Outline of Submissions and a statement of Ms Rachel Kelly on 20 August 2024. The Applicant specifically declined to file any submissions or evidence in reply, and the parties asked that the matter be determined “on the papers”.
The Agreement Provisions
Mr Malone’s higher grade duties were in a role covered by Section 2 of the Agreement where clause 66 is the clause providing for higher grade conditions.
66 HIGHER GRADE
66.1 Employees shall perform any work reasonably directed by their Employer, for which they have the necessary competencies, skills and experience to perform.
66.2 Employees, when acting temporarily out of their grade shall be paid not less than the minimum rate of such grade, provided that such minimum is not less than their classified rate of pay.
66.3 Where higher grade payments are made, the time so paid, exclusive of penalties, will be credited up to the maximum ordinary hours for the fortnight. Such credits will be utilised for the determination of incremental payments, rates of pay on promotion and upon entering on various forms of paid leave. In all other instances, the conditions applicable to the position being acted in shall apply.
66.4 Employees who are booked off to clear a public holiday and who are acting in a higher grade on the working days before and after the holiday, shall be paid for the public holiday at the applicable higher graded rate of pay.
66.5 During the period that Employees perform the duties of a higher grade position, they will receive not less than the minimum rate of pay for the higher duties position, subject to the following:
(a) Where the higher duties are performed in an operational position, Employees will be paid at the higher rate when they perform the duties of the higher grade position.
(b) Employees to whom Division 5 of this Section 2 applies will be paid at the higher rate on each occasion where the higher duties are performed for five days or more, except for Shiftwork positions where the Employee will be paid at the higher rate on each full day that the duties are performed.
66.6 The parties agree to higher duties being utilised to fill temporary vacancies to allow Employees to develop additional skills. Suitably qualified applicants will share the position on a rotational basis, for a period of up to six months.
66.7 It is also agreed that secondment opportunities are to be advertised across the organisation for temporary vacancies that are available for a period of up to twelve months. Where special circumstances exist, and with consent of the unions, the secondment may go beyond a period of twelve months, but shall not exceed two years.
66.8 Existing arrangements with respect to payment and selection of Employees for acting up shall continue to apply in those areas where such formal agreements exist.
[Emphasis added]
Mr Malone’s substantive position is covered by Section 5 of the Agreement. Clause 138 ‘Acting in a Higher Grade’ provides for a Section 5 employee, as follows:
138 ACTING IN A HIGHER GRADE
138.1 In recognition of competency based progression up to the specified progression limits in each competency stream, no payment for acting in higher grade will be applicable for acting higher grade for the performance of any competency (irrespective of the qualification level of any competency) that is acquired in connection with competency based progression up to the progression limit. Where competency based progression is available no acting in higher grade is applicable for the performance of any competency up to this level.
138.2 Where an Employee performs any higher duty beyond the competency progression limit in a position of Team Leader or Work Group Leader payment at the higher grade will be made on a daily basis.
138.3Where an Employee acts in a higher grade the conditions appertaining to the calling in which an Employee acts shall be the Employee’s conditions whilst so acting.
[Emphasis added]
Higher Duties Procedure
In addition to the Agreement, the Respondent has a Higher Duties Procedure (the Procedure) in place. Clauses 6 and 13 of the Procedure are relevant to the dispute in this matter. They provide:
6 Eligibility and payment of Higher Duties
During the period that an employee performs Higher Duties they will receive at least the minimum rate of pay for the higher graded role, providing it is more than the employee’s normal rate of pay.
For RC grades, an employee performing Higher Duties will be paid at the base level (e.g. RC4A) of the higher grade.
Eligibility and payment conditions for Higher Duties by classification are detailed in the
Enterprise Agreement. A summary of these conditions is provided in Schedule A.
[Emphasis added]
And:
13 Leave
If an employee is acting in a higher grade immediately before going on paid leave, the employee continues to receive the higher rate of pay if they acted at that grade (or higher) for 26 weeks in the preceding 12 months.
An employee covered by Section 2 of the Enterprise Agreement, who is booked off to clear a public holiday, and who is acting in a higher grade on the working days before and after the holiday, is entitled to be paid the Higher Duties Allowance for the public holiday.
Part-time employees covered by Section 2 of the Enterprise Agreement are eligible for payment of Higher Duties where they perform Higher Duties for the equivalent of their normal part-time working week.
External agency staff (also known as contingent labour) are not eligible for Higher Duties under this Procedure. If a contingent labour is the preferred person to fill a temporary vacancy, contact Procurement for terms and conditions.
[Emphasis added]
The Procedure (and prior iterations) have been in place since at least 2003, providing the detail regarding the payment and mechanics of higher duties placements.
Applicant’s Submissions
The Applicant submitted the principles that apply to the interpretation of an enterprise agreement were summarised by a Full Bench of the Commission in AMWU v Berri Pty Ltd (Berri),[1] wherein it was affirmed that the interpretation of an enterprise agreement, like that of a statute or contract, begins with a consideration of the ordinary meaning of the relevant words,
having regard to its context and purpose.
The plain meaning and context of the Agreement at clause 66.2 expressly obliges that Respondent pay employees “when acting temporarily out of their grade shall be paid not less than the minimum rate of such grade…”.
The Applicant submitted that similarly, clause 138.3 of the Agreement also sets out the condition that:
Where an employee acts in a higher grade the conditions appertaining to the calling in which the Employee acts shall be the employee’s conditions whilst so acting.
The Applicant submitted that adopting a textual approach to each of the provisions of clause 66.2 and clause 138.3, the Agreement has contemplated higher grade conditions which apply to the higher role, and must attract payments at the higher rate of pay in the respective ‘calling’.
Contrary to Sydney Trains’ contention that clause 66.5 restricts eligibility to payments, it in fact makes clear at clause 66.5(b) that in circumstances where an employee is engaged in the higher duties role exceeding five days or more, the entitlement to payment arises at the applicable higher rate.
The Applicant submitted that applying a purposive approach in determining whether the entitlement to the higher-grade payment flows from the provisions cited above, on an objective assessment the provisions were designed to fairly compensate those employees who were selected to undertake appointments to positions with higher responsibilities, skills, experience requirements.
The Applicant noted that the Respondent relies on:
(a) A basis that eligibility to payment rests on the proposition that an employee must be at and be performing work to qualify for the higher payments; and
(b) The Procedure conclusively disqualifying payments because of the existence of Clause 13.
The Applicant submits that approach is inconsistent because:
(a) Clause 66.4 plainly contemplates circumstances wherein an employee who acts in a higher grade position on days before and after the public holiday, will be paid for the holiday at the applicable higher grade rate of pay; and
(b) Clause 66.5 sets out additional qualifying criteria for eligibility, being payment at the high rate on each occasion where the high duties are performed for five days or more, except for shiftwork positions where the employee will be paid at the high rate on each full day that the duties are performed. On the agreed facts, Mr Malone, having commenced acting in the role of trainer/assessor on 9 July 2023 and concluded on 8 January 2024, satisfied the provision of clause 66.5(b).
Respondent’s Submission
The Respondent submitted the context of clause 138 of the Agreement is that employees will often, as a result of staffing requirements and/or career progression, spend periods of time acting in higher graded roles. Clause 138 works in conjunction with the Procedure and has done since 2003.
The Respondent submitted that a textual analysis of the clause supports the interpretation that the conditions associated with higher grade work are payable only while the higher grade work is performed. The use of the present tense of the verb “act” indicates the employee needs to be performing the higher grade work in order to be entitled to the conditions of the higher grade. This is reinforced by the use of the phrase “whilst so acting”.
Regarding the interaction between clauses 138 and 66 of the Agreement, the Respondent submitted that as Mr Malone is substantively an Infrastructure Worker employed under Section 5 of the Agreement. While there is a higher duties payment clause in each section of the Agreement, the relevant clause in Section 5 is clause 138. Contextually, the other higher duties clauses in the Agreement operate in the same manner as clause 138, that is, they provide for benefits to be paid for certain durations while the higher duties are actually being performed.
Noting that Mr Malone’s higher grade duties were in a role covered by section 2 of the Agreement where clause 66 is the clause providing for higher grade conditions, the Respondent submitted that as both provisions are relevantly consistent, clause 138.3 prescribes the higher duties payment for the Applicant. While clause 66.5 has little or no work to do, the words of that provision outline that payment is triggered by the performance of work, not the holding of a position.
So far as clause 66.5 is relevant, the Respondent noted it provides:
(a) Where the higher duties are performed in an operational position, Employees will be paid at the higher rate when they perform the duties of the higher grade position; and
(b) Employees to whom Division 5 of Section 2 applies will be paid at the higher rate on each occasion where the higher duties are performed for five days or more, except for Shiftwork positions where the Employee will be paid at the higher rate on each full day that the duties are performed.
The Respondent submitted that it was important to observe that clause 66.5 commences with the words “During the period that Employees perform the duties of a higher grade position…”. On a textual analysis, it is plain that the conditions associated with a higher grade position are payable only while the higher grade work is performed. When an employee is on leave, they do not ‘perform the duties of a higher grade position’ and so cannot qualify for payment at the higher rate.
Regarding the Procedure, the Respondent noted that if an employee is acting in a higher grade immediately before going on paid leave, the employee continues to receive the higher rate of pay if they acted at that grade (or higher) for 26 weeks in the preceding 12 months. The Procedure (and prior iterations) have been in place since at least 2003. The Procedure has applied for more than 20 years, and it was submitted to provide the context for the drafting and meaning of clauses 138 and 66 of the Agreement. The Respondent further submitted that the history makes clear that the Respondent’s interpretation is the accepted interpretation by all parties to the Agreement.
The Respondent submitted that Clause 66.4 acts as an exception to the general proposition of the Agreement that an employee must be at work and performing the higher duties to receive the higher duties pay. There is no equivalent clause of the Agreement requiring payment at the higher rate for Annual Leave or Sick Leave during Higher Duties.
Finally, the Respondent submitted that Sections 90 and 99 of the Act provide that employees are entitled to be paid their base rate of pay for periods of such leave. Base rate of pay is defined as the rate of pay payable to the employee for their ordinary hours of work, but does not include incentive- based payments and bonuses, loadings, monetary allowances, overtime or penalty rates, or any other separately identifiable amounts.
Consideration
In AMA (Victoria) Ltd and Australian Salaried Medical Officers Federation v The Royal Women’s Hospital,[2] the Full Bench of the Commission distilled principles for agreement interpretation from the majority judgment of the Full Court of the Federal Court in James Cook University v Ridd,[3] 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.
(5) 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.
(6) A generous construction is preferred over a strictly literal approach but agreements should make sense according to the basic conventions of the English language.
(7) 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.” (Emphasis added)
(8) In short, regard may be had to predecessor instruments before a conclusion is made that an agreement is ambiguous.”
[Emphasis added]
While, as noted at paragraph [2] above, the parties agreed at the conference on 4 June 2024, that clause 138 of the Agreement was sufficiently ambiguous to warrant the matter to be determined by the Commission, I do not consider that ambiguity in the more traditional sense as considered in agreement interpretation cases exists. Rather, the ordinary meaning of the words, read as a whole, is clear.
In particular:
(a) In relation to Clause 138.3, in order to be entitled to the higher grade pay an employee is required to “act” in the higher grade, and will receive that pay “whilst so acting”.
(b) In relation to Clause 66.5, where the higher duties are performed in an operational position, employees will be paid at the higher rate when they “perform the duties of a higher grade position”. That is reinforced at paragraph (a) of Clause 66.5 wherein it is reinforced that “the higher duties are performed” in an operational position, Employees will be paid at the higher rate “when they perform the duties of the higher grade position”.
In the absence of so acting, or actually performing duties, no entitlement to higher grade pay arises.
While the Applicant relied upon Clauses 66.2 and paragraph (b) of 66.5, regarding public holidays and employees under Section 2 of the Agreement respectively, as demonstrating the interpretation advanced by the Respondent was incorrect, I consider those clearly specified provisions to be exceptions to the general and consistent rule across the Agreement that leave entitlements are not paid at higher-grade rates in the circumstance of Mr Malone.
While I do not consider that my above conclusion requires any reliance upon the terms of the Procedure, in light of the unchallenged evidence of the Respondent regarding the history of the Procedure, and its interrelationship with the agreements that have applied, I consider the Procedure, being a document with which there is an association, supports those conclusions.
In answer to the question “Did clause 138.3 entitle Mr Malone to be paid leave entitlements at his higher-grade rate for the period 9 July 2023 to 8 January 2024”, I find the answer to the question for determination to be “No”.
DEPUTY PRESIDENT
Determined on the papers.
[1] [2017] FWCFB 3005
[2] [2022] FWCFB 7.
[3] [2020] FCAFC 123, 298 IR 50, at [65].
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