Australian Workers' Union, the Queensland Branch v Cleanaway Operations Pty Ltd T/A Cleanaway
[2020] FWC 6907
•18 DECEMBER 2020
| [2020] FWC 6907 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.739 - Application to deal with a dispute
Australian Workers' Union, The - Queensland Branch
v
Cleanaway Operations Pty Ltd T/A Cleanaway
(C2019/4152)
COMMISSIONER SPENCER | BRISBANE, 18 DECEMBER 2020 |
Alleged dispute about any matters arising under the enterprise agreement and the NES;[s186(6)].
[1] The Australian Workers’ Union (the AWU/Union/Applicant) made an application pursuant to s.739 of the Fair Work Act 2009 (the Act) in relation to a dispute arising under the Cleanaway Brisbane Resource Recovery Innovation Alliance Greenfields Agreement 2018 (the Agreement) with Cleanaway Operations Pty Ltd (Cleanaway/the Respondent).
[2] The dispute concerns Annual Leave entitlements and, more particularly, on the Applicant’s case, what constitutes a “week”. The Applicant has sought that the Commission make a recommendation concerning the dispute and has proposed the following recommendations:
“a) The Respondent’s interpretation of what constitutes a “week” for the purposes of annual leave (which provides for an entitlement of only 14 days after taking into account an employee’s shift length) be rejected;
b) The entitlement for annual leave for employees should be equivalent to 20 days (taking into account an employee’s shift length);
c) The Respondent adjust employees’ past annual leave accruals to account for the above interpretation and rectify any past payment made for annual leave; and
d) Any other issue the Commission considers appropriate.”
[3] The Respondent denies that the dispute is genuinely about what is a “week” for the purposes of the Agreement, but rather an attempt to reagitate a claim to entitlements that may have been more beneficial to employees that were covered by a predecessor Enterprise Agreement.
[4] The application was subject to a conciliation conference but was not able to be resolved and the Parties sought arbitration of the dispute. Directions were set for the filing of evidence and submissions. Agreed questions for arbitration and an agreed Statement of Facts were provided by the Parties.
[5] The questions for arbitration proposed by the parties were:
Question 1
Does the annual leave entitlement of 162 hours per year currently provided by Cleanaway to its employees purportedly in accordance with clause 25(2)(a) of the Agreement fail to meet the NES entitlement to annual leave at s 87(1)(a) of the FW Act in circumstances where an employee who is working a roster pattern that comprises 4 days on/4 days off (where a week is either 34.5 rostered hours or 46 rostered hours), and an employee takes annual leave during weeks where they are rostered to work 46 hours per week?
Question 2
i) For employees working a four day on/four day off roster pattern where each shift is 11.5 hours in length, what is the effect on the accrual and deduction of annual leave entitlements provided for under clause 25(1) and 25(2)(a) of the Agreement?
ii) For an employee who works a four day on/four day off roster pattern where each shift is 11.5 hrs in length and who seeks to take annual leave for a period of time less than a week (i.e. 1 day), what amount of annual leave should be deducted from their annual leave accrual balance?
[6] The agreed Statement of Facts provided:
1. The Respondent is an employer that [provides] waste management and environmental services.
2. The Respondent is covered by and applies a number of Enterprise Agreements in respect of its employees and its operations.
3. There are five locations which are identified as Resource Recovery Centres and Landfill that are operated by Brisbane City Council (“the Brisbane Council Waste Centres”). The Respondent has a contract to provide particular waste management services at the Brisbane Council Waste Centres.
4. There is an enterprise agreement which covers the Respondent and its employees who undertake work in the Brisbane Council Waste Centres. The enterprise agreement is the Cleanaway Brisbane Resource Recovery Innovation Alliance Greenfields Agreement 2018 (“the Agreement”).
5. The Agreement is a Greenfields Agreement made between the Respondent and the Applicant.
6. The employees employed under the Agreement perform services in relation to the contract which was made with Brisbane City Council in 2017, following a tender process. In commencing operations as the contractor, Cleanaway made offers of employment to a number of employees of the previous contractor, Remondis. Several of those employees accepted offers and continue to be employed.
7. The Agreement is specified to apply to employees of the Respondent “engaged in the classification contained in the Agreement who perform work at the Brisbane City Council Resource Recovery Centres and Landfill.” The classifications in the Agreement broadly cover the following work and duties:
Level | Description |
1 | An employee who is engaged generally in unskilled labouring positions or an employee in training. The classification is to cover non-plant machinery operators, gardeners, litter pickers, labourers, trainees and generally unskilled people. |
2 | An employee performing one or more of the following functions: • Labourer or depot hand at any waste management facility including but not limited to resource recovery centres, landfills, recycling centres, alternative waste treatment facilities and incinerators. • Waste treatment and/or handling and/or disposal facility attendant and/or process worker. |
3 | An employee proficient in all plant and vehicles, in either landfill and/or resource recovery centre duties who performs one or more of the following functions: • Operator of earth moving plant at a waste management facility over 150 BHP (estimated 112 kW) • Driver of an articulated vehicle (Prime Mover) |
4 | Driver of a double articulated vehicle |
Leading Hand | An employee appointed to the Leading Hand position, who possesses the competence to supervise all employee as well as perform Level 3 duties or above. |
(“the Employees”)
8. The Agreement was approved by the Fair Work Commission on 30 April 2018, ([2018] FWCA 2402) and has a nominal expiry date of 1 July 2021.
Hours of Work and Roster Pattern
9. There are 69 Employees who work under the terms of the Agreement.
10. 48 Employees work under a “4 on 4 off” roster pattern which operates over an eight-week cycle. The number of rostered hours each shift is 11.5 hours which comprises 9.5 ordinary hours (including a 30 minute paid break) and 2 rostered overtime hours. In total Employees work 304 ordinary hours and 18 rostered overtime hours per cycle. This totals 322 hours per cycle and is an average of 40.25 hours per week over the roster cycle.
11. The roster pattern specified in paragraph 10 is demonstrated by the below graphic:
12. The Employees perform their rostered hours between 6:30am to 6:00pm each day.
Annual Leave Arrangements
13. The Employees are not regarded as continuous shiftworkers under the terms of the Agreement (Clause 24.11).
14. The Respondent accrues 161 hours of annual leave for the Employees per annum. The Respondent has arrived at this quantum by calculating the average weekly hours rostered for Employees and multiplying this by four (which represents the four weeks of annual leave prescribed by the Agreement (Clause 25.2(a)).
15. The Applicant disputes the quantum of annual leave provided by the Respondent to the Employees and has raised questions about the accrual and deduction methods used by the Respondent, particularly the compliance of these methods with the National Employment Standards (NES).
16. When an Employee takes a day of annual leave, the Respondent deducts from the Employee’s accrued annual leave balance 11.5 hours.
Dispute Resolution Process
17. The Applicant and the Respondent have engaged in discussions at a site level with officials from the AWU and Senior Management of the Respondent in relation to the accrual and deduction of annual leave for Employees.
18. The Applicant and the Respondent have participated in conciliation before the Fair Work Commission in relation to the accrual and deduction of annual leave for Employees in accordance with Clause 11 of the Agreement.
19. The steps identified in paragraph 15 and 16 have failed to resolve the dispute.
RELEVANT PROVISIONS OF THE ACT
[7] Legislative provisions in relation to the jurisdiction of the Commission to deal with a dispute pursuant to dispute settlement procedures in Enterprise Agreements are found in s.595 and s.739 of the Act.
[8] Section 595 of the Act states:
“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 under or in accordance with another provision of this Act.
The FWC may deal with a dispute (other than by arbitration) as it considers appropriate, including in the following (a) by mediation or conciliation (b) by making a recommendation or expressing an opinion.
(2) 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)).
(3) 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”
[9] Section 739 of the Act provides:
“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) The FWC must not deal with a dispute to the extent that the dispute is about whether an employer had reasonable business grounds under subsection 65(5) or 76(4), unless:
(a) the parties have agreed in a contract of employment, enterprise agreement or other written agreement to the FWC dealing with the matter; or
(b) a determination under the Public Service Act 1999 authorises the FWC to deal with the matter.
Note: This does not prevent the FWC from dealing with a dispute relating to a term of an enterprise agreement that has the same (or substantially the same) effect as subsection 65(5) or 76(4) (see also subsection 55(5)).
(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.”
[10] The Commission’s powers to deal with disputes derive, in the case of an Enterprise Agreement, from the terms of the disputes settlement procedure, contained in the Enterprise Agreement. As a Full Bench of the Commission concisely observed in CFMEU v North Goonyella Coal Mines Pty Ltd 1 the Commission may deal with a dispute only on application of a party to the dispute (s.739(6)); is prohibited from exercising any powers limited by the dispute settlement procedure (s.739(3)); may arbitrate only if the agreed dispute settlement procedure permits it to do so (s.739(4)); and must not make a decision that is inconsistent with the Act, the Enterprise Agreement and any other applicable Fair Work instrument (s.739(5)).
RELEVANT PROVISIONS OF THE AGREEMENT
[11] The Agreement was approved by a decision of the Commission on 30 April 2018. 2 It commenced operation on 7 May 2018 and will nominally expire on 1 July 2021. The AWU was noted as being covered by the Agreement. There was no dispute that the disputes resolution procedure in Clause 11 of the Agreement has been complied with and permits the Commission to arbitrate the dispute.
[12] Annual leave is provided for by Clause 25 of the Agreement. Clause 25, as is relevant to this dispute, states:
“25.1 Employees will be entitled to leave in accordance with the Act.
25.2 Annual leave:
(a) 4 weeks paid annual leave per year or 5 weeks paid annual leave per year in the case of a continuous shift worker as defined in clause 24.11. An employee’s entitlement to paid annual leave accrues progressively during a year of service according to the employee’s ordinary hours of work, and accumulates from year to year…”
SUMMARY OF THE APPLICANT’S SUBMISSIONS AND EVIDENCE
[13] The Applicant submitted that the phrase “4 weeks paid annual leave per year” is not defined in the Agreement and appears intended to reflect the entitlement contained in the Act; specifically s.87(1)(a). The Agreement, whatever interpretation, cannot operate in a way that reduces any employee’s entitlements under the NES. 3 This dispute can be determined by the Commission considering whether the interpretation and application of the provision that the Respondent applies is consistent with the NES.
[14] The Applicant submitted that the current practice of the Respondent is to accrue an annual total of 161 hours of annual leave per year for the relevant employees, which they describe as essentially four times the average working hours of 40.25, making a total of 161 hours. The Applicant said that for accrual purposes, the Respondent uses the average weekly hours of 40.25, meaning a week is defined as 40.25 hours. The Applicant submitted that those average weekly hours are also used for payment of wages, and that employees receive their regular 40.25 hour payments when they take a week's annual leave.
[15] The Applicant further submitted that when it comes to the deduction of annual leave, Cleanaway reverts to the actual hours of work. The Applicant says that if a hypothetical employee was to take a week of annual leave in week one of the roster pattern (as set out above), the employee will have 46 hours of leave deducted from their balance. The Applicant argued that this approach is inconsistent with the NES. The Applicant gave an example of an employee who takes four weeks of annual leave in weeks one through to four, and say that the annual accrual of 161 hours is not sufficient to cover that period of annual leave and would run out of accrued annual leave before they had four weeks off work.
[16] With respect to the Respondent’s submissions that the definition of leave entitlements under the NES for this roster pattern, being 14 shifts or 14 days of annual leave, the Applicant said that an employee would still run out of the 14 accrued shifts before they had taken four full weeks of annual leave, if that leave was taken in weeks one to four of the roster pattern.
[17] The Applicant said that the agreed working pattern for recovery centre employees is for ordinary hours of 40.25 per week with anything in addition to those hours as overtime as per the definition in cl. 23.1(d), and those overtime hours must, under the agreement, be paid at overtime rates in accordance with clause 23.2. The Applicant further said the payslips submitted to the Commission confirm that hours in excess of 40.25 per week are paid at the overtime rates specified in cl. 23.2 which is consistent with their argument that the ordinary hours of work are 40.25, and not 38 per week as is the case for other employees pursuant to clause 21.2 of the agreement.
[18] The Applicant referred to the consideration of the NES entitlement by a Full Bench of the Commission in RACV v Australian Municipal, Administrative, Clerical and Services Union 4(RACV).5
[19] The decision in RACV was considered by the Full Court of the Federal Court in Mondalez v “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU) 6(Mondalez). The Applicant submitted that the Full Bench’s reason in RACV was not disputed by the Full Court’s decision in Mondalez, noting that at the time of submissions in this matter, the High Court has granted special leave to appeal from the Full Court’s decision. These reasons will return to Mondalez below.
[20] The Applicant submitted that the Full Bench in RACV clearly interpreted what the NES means and what a week of annual leave means under the NES, and this interpretation was cited in Glendell. The Applicant argued that the Full Court adopted the RACV Full Bench's interpretation of a week of leave under the NES which was further confirmed in Mondelez.
[21] The Applicant further argued that the Respondent’s position does not allow four weeks of annual leave to be taken by employees if they take four weeks of annual leave in the weeks where they work longer shifts, as the number of days of annual leave will vary, depending on which weeks of the roster pattern the leave is taken in. The Applicant submitted that the Glendell Full Court was clearly aware of that, because they identified that a week of leave may mean either three or four shifts, depending on how many shifts are worked in that week.
[22] The Applicant argued that the critical entitlement is to a week of leave, as per the RACV Full Bench decision, and under the Respondent’s current system, an employee accruing 161 hours of leave who attempted to access their four weeks of annual leave in the weeks where they work four shifts per week, they cannot access their full four weeks of annual leave.
[23] Consequently, the Applicant submitted that RACV is analogous to the present dispute as it concerns a similar factual scenario and legal issues under the Act. The Applicant submitted that the questions for arbitration should be answered as follows:
Question 1: Yes
Question 2: Cleanaway’s employees working the Roster Cycle under the Agreement must receive, for each year of service, 161 hours or four “weeks” of annual leave (in the sense discussed in paragraph [82] of the RACV initial decision), whichever is the higher.
SUMMARY OF THE RESPONDENT’S SUBMISSIONS AND EVIDENCE
[24] The Respondent submitted that the questions for arbitration should be answered as follows:
“Question 1:
The annual leave accrual of 161 hours currently provided by Cleanaway meets the entitlement to annual leave provided for under the NES in all circumstances for employees working the 4 day on/4 day off roster pattern.
Question 2:
i. For employees working a 4 day on/4 day off roster pattern where each shift is 11.5 hours in length, the effect of accrual and deduction of annual leave in accordance with clause 25.1 and 25.2 is that employees should have leave accrued and deducted in a way that permits them to have 14 shifts of leave available for taking each full year of employment;
ii. For an employee who works a 4 day on/4 day off roster pattern where each shifts is 11.5 hours in length and the employee seeks to take annual leave for a period of time less than a week (i.e. 1 day), the amount of leave that should be deducted from their leave balance (to meet the Agreement and NES obligations) is no more than 11.5hrs for each day.”
[25] In support of these answers, the Respondent submitted that RACV cannot be reconciled with the subsequent Federal Court authorities on the point. In this regard, the Respondent relied upon the Full Court of the Federal Court in Construction, Forestry, Mining and Energy Union v Glendell Mining Pty Limited 7 (Glendell).
[26] The propositions said to come from Glendell were:
“Firstly, notwithstanding that the Majority [in Glendell] was considering whether there have been a breach of s.89 of the Act and in order to do so they were required to consider the entitlements that arose from the terms of two enterprise agreements that applied to [the employee], the ratio of their decision clearly addresses the operation of s.87(1)(a) of the FW Act and the underlying entitlement to annual leave provided by the NES:
Secondly, Mr Noyes worked a roster pattern that is materially similar to the roster pattern of the Employee in that there were weeks in the roster pattern where four shifts were worked, and there were weeks in the roster pattern where there were three shifts worked;
Thirdly, that notwithstanding the fact that the roster pattern which was worked by Mr Noyes was variable, the Majority determined that under the NES, the “entitlement to four weeks paid annual leave means that employees may have 14 shifts away from work” (i.e. the number of shifts that an employee would have worked over four consecutive weeks or 28 days);
Fourthly, that notwithstanding that the Majority identified their support for certain conclusions reached in RACV, the aspects of the decision identified by the Majority did not include the Full Bench’s conclusions concerning the application of the NES entitlement to variable hours of work at [88] of RACV. Moreover, the conclusion of the Majority that under Mr Noyes roster pattern, the NES entitlement is to have “14 shifts away from work” does not reconcile with the Full Bench’s conclusions which would seem to require 16 shifts away from work (being four weeks multiplied by the maximum number of shifts that could be worked in a week in the roster period);
Fifthly, the Majority held that ordinary hours can be deducted from an accrued annual leave balance which is in accordance with the NES;
Sixthly, the factual circumstances in Glendell, which considered a rotating roster pattern of fixed hours each shift, and which rotated between four working shifts per week and three working shifts per week are ‘on all fours’ with the dispute that is presently before the Commission. The decision in Glendell is also one that will bind the Commission as presently constituted and must be applied should the Commission determine that there is no means of distinguishing the ratio of that decision from the issues in this dispute. The Respondent for its part submits that no such deviation from Glendell is available.”
[27] The result of these propositions, it is submitted, is that employees of Cleanaway working the relevant rosters are entitled to an absence of 14 shifts per year, being the average number of shifts under the roster. On an hourly basis that is 152 hours of leave per year based on an average of 10.87 hours per shift. Average ordinary hours are used to account for the regular rostered overtime that is built into the roster patter – being 2.25 hours per week. The NES entitlement to accrued leave is based on the ordinary hours of work and provides that leave must be paid at the base rate of pay for ordinary hours of work in the period.
[28] In any event, the Respondent submitted that RACV is not supportive of the Applicant’s submissions that annual leave accrues at 161 hours of leave per year. The Respondent submitted that this is so because the Agreement does not prescribe a number of hours annual leave, as was the case in RACV. Additionally, if RACV applies in the way that the Applicant submitted, the annual leave entitlement of employees could be as low as 130.44 hours of leave, in weeks with only 3 rostered shifts, to as high as 173.92, if only weeks with 4 shifts were taken as leave.
[29] At the hearing, the Respondent made submissions regarding clause 21.6 of the Agreement which reads:
“21.6 Resource Recovery Centre employees only
(a) The ordinary hours of work shall be a rosters of 4 days on 4 days off over the normal working week, being Monday to Sunday.
(b) The ordinary shift shall be 11.5 hours, resulting in an average of 40.25 hours per week over eight weeks.
(c) The ordinary hours per week will be 38 hours plus additional reasonable hours of 2.25 per week, paid at the ordinary rate of pay. The ordinary shift of 11.5 hours shall be inclusive of the meal break of 30 minutes which is paid.
(e) Additional Engagement on 4 on 4 off roster
Where supplementary labour is required on the 4 on 4 off roster, additional hours will be offered to existing employees engaged on the 4 on 4 off roster in the first instance. If further supplementary labour is required, casuals may be engaged, however will not be paid the annualised rate", instead they will be paid the applicable base rate outlined in Table 1.”
[30] The Respondent submitted that clause 21.6(a) does not exclusively identify that all the hours worked on the four day on, four day off roster pattern, Monday to Sunday must be regarded as ordinary hours. Instead, the Respondent submits that it merely identifies this span and days under which ordinary hours can be worked, and does not mandate that all hours worked pursuant to a four day on, four day off roster pattern, Monday to Sunday, must be regarded as ordinary hours.
[31] The Respondent argued that in clause 21.6(b), the term ‘ordinary hours’ is replaced with the term ‘ordinary shift’. The Respondent further argued that the Applicant has tried to make the two concepts synonymous. The Respondent argues they are not synonymous, and that ordinary shift in that context is used in the context of normal or usual.
[32] The Respondent submitted that the sum total of those arguments was that the better construction of the concept of ordinary hours for the resource recovery centre employees is that it is 38 ordinary hours and 2.25 hours of additional roster time comprising a rostered working week, notwithstanding the equalised rate of pay for each of those hours. The Respondent said that this is not surprising that an annualised weekly payment structure, one operating over a rotating roster of the kind that operates for these employees, and argues that the rate of pay that might be afforded does not inform whether those hours should be regarded as ordinary hours.
[33] Additionally, the current practice of the Respondent provides for a greater entitlement than the minimum prescribed by the NES, and the Agreement does not provide for payment of the rostered overtime component.
[34] The Respondent argued that they are seeking not that the NES be rewritten but be applied and interpreted in a way that is appropriate, having regards to the operation of the roster pattern that the employees are working and also the way that is consistent with the judgment in Glendell. The Respondent said that the key concept of Glendell is that it considers first what are the number of absences that an employee could have over a four-week period to give effect to their annual leave entitlement under the NES. The Respondent submitted that principle is consistent with RACV.
[35] The Respondent argued that the approach in Glendell was to first determine the leave entitlement in terms of what is the number of absences that apply over a four-week period, accepting that four weeks of annual leave is the entitlement, for an employee to then determine their entitlement to annual leave by another metric. The Respondent said that this can then be considered in terms of the number of ordinary hours worked over that roster pattern to reduce the number of shifts absent over a four-week leave period to the number of hours absent over a four-week leave period.
[36] Applied to the particular circumstances of this case, the Respondent argued that if this calculus was applied on the basis that ordinary hours are 152 hours, 38 per week, the number ordinary hours that an employee would otherwise work under the four on, four off roster pattern in a four-week period is 14 shifts.
[37] The Respondent said that if the Applicant’s argument that ordinary hours are 40.25 per week is accepted, the same broad position that 14 shifts is the number of shifts that an employee can be absent over a four-week period is reached despite that this equates to 161 hours based on an 11.5-hour shift length.
[38] The Respondent identifies that the present case differs from Glendell in that the roster pattern in Glendell was of one week of four shifts and one week of three shifts, whereas in this matter the roster pattern is an eight-week cycle and does not resort back to week one until eight weeks have elapsed, and features a four-week roster pattern comprising the first four weeks and the three-day roster pattern comprising the last four weeks.
[39] The Respondent argued that this fact does not relevantly distinguish the way in which the Full Court dealt with the same issue in Glendell, as Glendell permits leave to taken on a weekly basis. The Respondent said that if leave taken on a weekly basis could occur in each of the weeks where four shifts are worked, not three shifts, with the net effect being that the Full Court would have had to find that employees in those circumstances would be entitled to 16 shifts of leave, and not the 14 that it found. The Respondent argued that this makes material the fact that the Full Court did not regard the timing of taking the leave as determinative or impactful on a decision about the over-arching entitlement.
EFFECT OF MONDELEZ DECISION
[40] On 13 August 2020, after the Hearing to determine this matter, the High Court of Australia handed down its decision in Mondelez Australia Pty Ltd v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (Mondelez). 8
[41] On 26 August 2020, the Respondent wrote to my Chambers seeking an opportunity to consider the decision, in relation to construction of personal leave under the NES and whether principles applicable to that determination of that NES entitlement to annual leave also apply. This request was granted and allowed the parties to consider the decision.
[42] On 7 September 2020, the Respondent wrote to Chambers requesting an opportunity to file submissions in relation to the impact of the Mondelez decision. Directions were issued for filing of further submissions, with the Respondent filing their further submissions first and the Applicant filing their submissions after.
Respondent’s submissions
[43] The Respondent submitted that the High Court in Mondelez found that there is a similarity of language and concepts in the paid personal/carer’s leave scheme in Subdivision A of Division 7 of Part 2-2 of the Act, and the paid annual leave scheme in Division 6. The Respondent argued that this reflects that both forms of leave progressively accrue according to an employee’s “ordinary hours of work”. 9
[44] The Respondent submitted that the following conclusions from Mondelez are relevant to the Dispute:
(a) It is necessary to construe the expression “10 days” in s.96(1) in the context of the FW Act as a whole, and in particular, in light of the relevant extrinsic materials and the legislative history 10;
(b) The extrinsic material and legislative history show not only continuity between the Workplace Relations Act 1996 (Cth) (the WR Act) and the Fair Work Act but also that the provision in issue is to be understood as a restatement, in simpler terms, of long-standing provisions of industrial relations law containing minimum employment conditions;
(c) The objects of the Act show that the legislation is intended to provide fairness, flexibility, certainty and stability for employers and their employees. Fairness necessarily has a number of aspects: fairness to employees, fairness between employees, fairness to employers, fairness between employers, and fairness between employees and employers 11;
(d) The NES recognizes that employees have different patterns of work and use the concept of “ordinary hours of work”, which can be readily applied to different patterns of work, so employees are treated fairly. 12 The notion of fairness encompasses fair treatment as between employees according to their ordinary hours of work, regardless of the pattern in which those hours are worked. Fairness and enforceability may both be served by employers and employees both being able to know, at any point in time, precisely how much paid personal/carer’s leave an employee has accrued.13
(e) An entitlement to paid personal/carer’s leave accrues progressively in the course of a year of service, for all employees, by reference to ordinary hours worked and not by reference to days or working patterns. All employees working the same number of ordinary hours accrue paid personal/carer’s leave at the same rate and, after working the same number of ordinary hours, are entitled under s.99 to be paid for the same number of ordinary hours, regardless of whether their ordinary hours over a two-week period are worked across ten, six or five days in that period 14;
(f) The Explanatory Memorandum to the Fair Work Bill shows the continuity between the WR Act and the Act, consistently with a comparison of the two sets of provisions. Under the WR Act, each year an employee was entitled to paid personal/carer’s leave of 1/26 of the number of nominal hours worked over a year, which amounted to “10 days” or “two weeks” of paid personal/carer’s leave. Under the Fair Work Act, each year an employee is similarly entitled to paid personal/carer’s leave equivalent to an employee’s ordinary hours of work in “10 days” or “two weeks”, being 1/26 of the employee’s nominal hours worked;
(g) The expression ’10 days’ in s.96(1) of the FW Act means an amount of paid personal/carer’s leave accruing for every year of service equivalent to an employee’s ordinary hours of work in a week over a two-week (fortnightly) period, or 1/26 of the employee’s ordinary hours of work in a year. 15
[45] The Respondent submitted that the answer to Question 1 must be that annual leave accrual of 161 hours currently provided by the Respondent meets the entitlement to annual leave provided for under the NES in all circumstances for employees working the four day on/four day off roster pattern.
[46] In relation to question 2(i), the Respondent submitted that for employees working a four day on/four day off roster pattern where each shift is 11.5 hours in length, the effect of accrual and deduction of annual leave in accordance with clause 25.1 and 25.2 is that:
(a) Where the employer is accruing 161 hours of annual leave per year, leave should be deducted on the basis of the rostered hours of the four day on/four day off roster pattern (that is 11.5 hours for each full shift on leave);
(b) should the employer accrue only 152 hours of annual leave per year, leave should be deducted on the basis of the rostered ordinary hours which fall within the period of leave on the four day on/four day off off roster pattern.
[47] The Respondent acknowledged that the answer to Question 2(i) is different to the answer previously put in resolution of the dispute and that previously this question was answered in terms of shifts absent from the workplace. The Respondent submitted that this alternate expression of the resolution of the dispute does not alter the underlying finding that the Respondent sought, being that the method of accrual and deduction of annual leave which is being applied by the Respondent in all circumstances meets the obligations that arise for that entitlement under the terms of the NES and the Agreement.
[48] The Respondent further submitted that for an employee who works a four day on/four day off roster pattern where each shift is 11.5 hours in length and the employee seeks to take annual leave for a period of time less than a week (i.e. one day), the amount of leave that should be deducted from their leave balance (to meet the Agreement and NES obligation) is no more than 11.5 hours for each day.
Leave accruals
[49] The Respondent submitted that in construing the annual leave terms of the NES, there is no basis for not applying the same conclusions as to the effect of the objects of the Act, the application of the Explanatory Memorandum to the Fair Work Bill 2008, and the legislative history between the Fair Work Act and the Workplace Relations Act, as the High Court did to decide the question of personal leave under the NES. The Respondent submitted the question for determination in this matter is substantively the same question the High Court was being asked to consider in Mondelez, albeit that this matter deals with a different, but statutorily related entitlement.
[50] The Respondent submitted that arising from Mondelez, the Commission can form the following conclusions as to the operation of ss.87 to 90 of the Act (being the annual leave provisions of the NES):
(a) The operative terms within the NES that relate to accrual of personal leave (s.96(2)) and the accrual of annual leave (s.87(2)) are in identical terms and both refer to the “entitlement” to leave accruing progressively during a year of service based on the “employee’s ordinary hours of work”;
(b) The relevant extract from the Explanatory Memorandum to the Fair Work Bill 2008 which the High Court found instructive in arriving at its’ conclusion that the “amount of leave accrued over a period [was] not affected by differences in the actual spread of an employee’s ordinary hours of work in a week” 16 is in identical terms in describing the entitlement to annual leave;
(c) the continuity between the Workplace Relations Act and the Fair Work Act that was held by the High Court as evident in respect of personal leave, was informed by the terms of the Explanatory Memorandum to the Fair Work Bill 2008, are similarly evidenced in the Explanatory Memorandum in respect to annual leave.
[51] The Respondent further argued that the annual leave terms in the WR Act, originally enacted as s.92D(2), provided that:
“(2) An employee is entitled to accrue an amount of paid annual leave, for each completed 4 week period of continuous service with an employer, of 1/13 of the number of nominal hours worked by the employee for the employer during that 4 week period.
Example: An employee whose nominal hours worked for a 12 month period were 38 hours per week would be entitled under this subsection to 152 hours of annual leave (which would be the equivalent of 4 weeks of annual leave if his or her nominal hours worked remained unchanged).”
[52] The Respondent submitted that the Explanatory Memorandum to the Bill that introduced s.92D(2) stated:
“Subsection 92D(2) would guarantee all employees an entitlement to accrue an amount of paid annual leave for each completed four weeks of continuous service with an employer. The employee is entitled to accrue 1/13 of the number of nominal hours worked by the employee for the employer during that four week period.
This is equivalent to four weeks annual leave for employees whose hours do not change over the course of a 12 month period – for example, an employee whose nominal hours worked for a 12 month period were 38 hours per week would be entitled to 152 hours of annual leave (which is four weeks of 38 hours each). However, the formula also ensures that employees whose hours vary accrue appropriate amounts of annual leave.”
[53] The Respondent argued the effect of the above is that an employee who works an average of 38 ordinary hours over the course of a 12 month is entitled to accrue 152 hours of annual leave if their underlying entitlement is to four weeks leave, and 190 hours of annual leave if their underlying entitlement is to five weeks leave. The Respondent submitted that it does not matter if, in a particular week, an employee’s rostered ordinary hours are greater than 38 hours, and this does not affect the accrual rate or the overall entitlement where the average is 38 ordinary hours over the 12 month period.
[54] The Respondent submitted that even if the Commission were to accept the submissions of the Applicant that the relevant employees subject to the dispute work ordinary hours of 41.25 hours on average per week, the NES entitlement to four weeks of annual leave is 161 hours being four weeks multiplied by 42.5 hours which is the same amount as that which is being accrued for relevant employees by the Respondent. The Respondent said that in all circumstances, it has met the NES obligations with respect to its method of accrual and deduction of annual leave for the relevant employees subject to the dispute.
Applicant’s submissions
[55] The Applicant submitted that in Coleman v Power, 17 McHugh J stated the following regarding the ratio decidendi in a particular case:
“Cases are only authorities for what they decide. If a point is not in dispute in a case, the decision lays down no legal rule concerning that issue. If the conceded issue is a necessary element of the decision, it creates an issue estoppel that forever binds the parties. But that is all. The case can have no wider ratio decidendi than what was in issue in the case. Its precedent effect is limited to the issues.”
[56] The Applicant submitted that the High Court in Mondelez was not being asked to resolve a dispute about the operation of the annual leave provisions in the NES. The Applicant argued that the High Court’s binding declaration is confined to personal/carer’s leave. There is only one paragraph in the entire judgment that refers to annual leave, which the Applicant described as a remark in passing or obiter dictum. The Applicant argued that the judgment does not constitute a binding interpretation of the annual leave entitlements in the NES.
[57] The Applicant argued that the binding authority in relation to the interpretation of the annual leave provisions in the NES remains the Full Federal Court’s judgment in Glendell and specifically its adoption of the interpretation identified by the Full Bench of the Commission in RACV. The Applicant submitted that the interpretation adopted by the Full Bench in RACV was informed by an extensive review of the history and purpose of annual leave provisions in Australia dating back to 1936, and specifically identified that in comparison with annual leave,
the history “with respect to personal/carer’s leave (originating from sick leave) is somewhat more complex”. 18
[58] The Applicant submitted that the Respondent had previously accepted that the precedent created by the Full Court in Glendell is applicable to the resolution of this dispute, and argued that this dispute had been focused on the application of the Glendell precedent, and that one paragraph of obiter dictum from the High Court in Mondelez had not disturbed that authority.
[59] The Applicant submitted that in the event that I formed the view that the High Court’s reasoning in Mondelez concerning personal/carer’s leave should be applied to the interpretation of the annual leave provisions in the NES, the outcome would be:
(a) Cleanaway’s current approach of accruing 161 hours of annual leave per year of service for the relevant employees is consistent with the NES because this represents their average ordinary hours of work over a four-week period; and
(b) Cleanaway’s current approach of deducting 11.5 hours for a day of annual leave and hence 34.5 hours of annual leave in three-shift weeks and 46 hours of annual leave in four-shift weeks in consistent with the NES.
[60] The Applicant argued that the Respondent’s submission that, contrary to its current approach, employees are only entitled to accrue 152 hours of annual leave per year of service should be rejected by the Commission. The Applicant said that the ordinary hours of work for the relevant employees are 40.25 per week in accordance with clause 21.6 of the Agreement.
[61] The Applicant submitted that the impracticality of Cleanaway’s alternative construction is highlighted in its answer to Question 2(i)(b) in its submissions addressing Mondelez, as laid out at paragraphs [47] and [48] above. The Applicant argued that the Respondent cannot identify with precision what deduction would arise if the Commission determines the ordinary hours of work for the relevant employees are an average of 38 per week, and hence only 152 hours of annual leave per year must be accrued. The Applicant submitted this is because the Agreement does not specify which of the working hours in the roster pattern are overtime hours. For example, it is unclear whether the first 304 hours in the roster cycle would be the ordinary hours and the last 18 hours the overtime hours, or alternatively whether some hours each week or day would be the designated overtime hours. The Applicant said that these complications do not arise at present because Cleanaway’s payroll system correctly operates on the basis that the ordinary hours are 40.25 per week.
[62] The Applicant submitted that the Commission should not resolve this dispute by disturbing the established arrangements in relation to ordinary hours of work in favour of what it described as a vague and uncertain approach that is likely to generate additional disputation.
[63] The Applicant further submitted that the weekly hours of work identified in the Respondent’s further submissions are inaccurate, submitting that the relevant working hours are an average of 40.25 per week and four weeks multiplied by 40.25 hours for a total of 161 hours.
Cleanaway’s reply submissions
[64] In reply, the Respondent said that it did not submit that the High Court “was being asked to resolve a dispute about the operation of the annual leave provisions in the National Employment Standards”, but instead, that what the High Court found as relevant and conclusive as to their binding determination on personal leave under the NES, has equal application to the question of annual leave entitlements under the NES.
[65] The Respondent further submitted that:
(a) The Applicant’s submissions in relation to Mondelez provides no answer to the submission that in interpreting the NES in relation to annual leave, the expression “four weeks” should be interpreted in the context of the Act as a whole, and in particular, in light of the relevant extrinsic materials and the legislative history;
(b) The Applicant failed to address that in construing the terms of the Explanatory Memorandum to the Fair Work Bill 2008 as they relate to annual leave 19, terms which are largely identical to those which are reflected for personal leave, and which the High Court found to be determinative in arriving at its conclusion that personal leave accrues based on ordinary hours of work regardless of the pattern of ordinary hours20, should not equally apply in relation to annual leave, being that it accrues based on an employee’s ordinary hours regardless of the pattern over which those hours are worked;
(c) The Applicant does not engage with the conclusions of the High Court that the objects of the Act show that the legislation is intended to provide fairness, flexibility, certainty and stability for employers and their employees, and that that fairness and enforceability is served by employers and employees both being able to know at any point in time precisely how much leave they have accrued, a proposition that is left unachieved if the entitlement to leave is variable based on how the leave might be taken; and
(d) The Applicant does not address the existence of the same “continuity” between the WR Act and the Act which was evident in respect of personal leave, also being evident for annual leave, and that accordingly, the quantum of annual leave which an employee is entitled to under the NES accrues based on an employee’s ordinary hours of work, and for a full-time employee working an average of 38 ordinary hours per week, four weeks of annual leave is equivalent to 152 hours of annual leave.
[66] The Respondent argued that adopting the interpretation of the Full Federal Court’s decision in Glendell would require the Commission to determine the matter in favour of the Applicant’s position is wrong. The Respondent submitted that the decision in Glendell supports the Respondent’s construction, and in particular, the majority’s statement that “it is inappropriate to infer the extent of the entitlement to annual leave from a particular way in which the annual leave may be taken7” aligns neatly with the High Court’s rejection of the “working day” construction for personal leave, and the Court’s conclusion that all employees working the same number of ordinary hours accrue paid personal leave at the same rate regardless of whether their ordinary hours over a two-week period are worked across ten, six or five days in that period. 21
[67] The Respondent argued that the decision in RACV is overwritten by the Mondelez decision as it relates to personal leave. The Respondent submitted that RACV’s force as it relates to its consideration of the entitlement to annual leave must also be questioned given the basis of its conclusions do not reconcile with Mondelez.
[68] The Respondent submitted that the Full Bench in RACV held that the terms of the FW Act and the WR Act as they relate to annual leave and personal/carer’s leave were “distinctly different” and this led to a conclusion that this reflected a deliberate policy decision to abandon a method of accruing annual leave which was based on hours worked. 22 The Respondent argued that this conclusion was directly rejected by the High Court in Mondelez at [13] and [39] of that decision.
[69] The Respondent further submitted that the Full Bench in RACV held that the terms of the Explanatory Memorandum to the Fair Work Bill 2009, as they related to the continuation between the FW Act and the WR Act of the entitlement to annual leave , were not available to substitute for or supplement the text of the FW Act. The Respondent argued that the High Court found the identical equivalent passage in the Explanatory Memorandum as it related to personal leave as persuasive in illustrating the intent and effect of the legislation. 23
[70] The Respondent submitted that should the Commission determine that the NES entitlement to annual leave for the employees subject to the present dispute is no more than 152 hours, a deduction which is consistent with the NES on any day or week of leave is an amount equivalent to the ordinary hours that the employee would have worked but for the leave. The Responden said that the fact it is presently accruing greater than this amount (that is an accrual based on average rostered hours, inclusive of rostered overtime) and also deducting leave on the same basis, does not alter the underlying entitlement as provided for by the NES.
[71] The Respondent argued that the Applicant’s submission that the Commission should not resolve the dispute by “disturbing the established arrangements in relation to ordinary hours of work in favour of a vague and uncertain approach that is likely to generate additional disputation” is wrong. The Respondent rejected the contention that the resolution of the dispute as it proposes would lead to any vague or uncertain outcomes, and submitted that the Applicant’s submission emanated from a perspective that the Commission is vested with discretion as to whether to resolve the dispute or not. The Respondent submitted that the Commission is required to exercise some judgement in relation to how the NES is to be interpreted, and once a conclusion as to that matter is made, the Commission must determine the dispute in accordance with that assessment. The Respondent said that a concern about future disputation or purported uncertainty is no basis for the Commission to not correctly exercise its jurisdiction in resolving the dispute.
[72] The Respondent submitted in closing, that it had met its NES obligations with respect to its method of accrual and deduction of annual leave for the relevant employees subject to this dispute, and accordingly, the Commission should determine the matters in dispute in the terms sought by the Respondent.
CONCLUSION
[73] It is appropriate to first undertake a consideration of the relevant authorities.
[74] There are three main authorities that have been relied upon by the parties in submissions. The first being RACV.
[75] RACV was an appeal from a single Member of the Commission exercising the Commission’s powers of arbitration. 24 Amongst other issues, the original arbitration dealt with the question of deductions from annual leave entitlements for shiftworkers. The roster under consideration in that matter was a 21 day roster cycle. Employees would work 14 days in the cycle, with 6 days off (including weekends) and 1 unpaid RDO. The length of shifts varied, but were always in excess of 7.6 hours. The total number of ordinary working hours across the cycle was 114, which resulted in average working week of 38 hours.
[76] The Agreement specifically provided for the entitlement of shiftworkers and the method of accrual. For a full time shift worker, the Agreement provided for 190 hours annual leave. The Full Bench noted that the entitlement provided for an accrual in hours, rather than weeks as per the NES. The dispute arose in a context where RACV considered that its past practice of deducting 7.6 hours from accruals for each day’s shift, regardless of shift length, was not consistent with the agreement or the Act. RACV sought to implement a change whereby it would deduct the actual number of hours from accruals that the employee would have worked for that day.
[77] As a result of the interaction rules in the Act, the Full Bench considered that if, on a proper interpretation, any of the leave provisions of the agreement would result in an employee receiving less than their full entitlements under the NES, those provisions would have no effect and, if that were the case, the entitlements would derived directly from the NES. 25
[78] The Full Bench commenced its analysis by noting that the word “week” is not given any special definition by the Act. This absence “immediately” suggested that the word would have its ordinary meaning unless context dictated otherwise. 26 The immediate context in which the word is used meant that it was to be understood as meaning an authorised absence from the working days falling in a seven day period.27
[79] Extending from that, the Full Bench considered the use in the context of the Act as a whole. As a result of doing so, the Full Bench rejected a submission that the accrual provisions meant it was a necessary implication that the use was limited or limited to “ordinary hours of work” during a particular period. 28 The absence of specific rates of accrual or deduction from the NES does not indicate a lack of clarity in the statutory scheme. If the word, relevantly here, ‘week’ is given its ordinary meaning the position is “entirely clear”.29 The accrued entitlement is:
“…simply reduced by the amount of leave taken, so that if a week of leave is taken, the accrual of leave is reduced by a week, and if a day is taken, the accrual is reduced by a day.” 30
[80] Significantly, if the reduction in an NES entitlement was to vary depending upon the number of ordinary hours that would have been worked on that day, the Full Bench expected that the Act would specify as such. The absence of such provisions weighed against accepting the construction preferred by RACV. 31
[81] The Full Bench also gave extensive consideration to the history of leave provisions and the development of the entitlement through the pre-statutory schemes. 32 In particular, the Full Bench did not accept that the secondary material, being the explanatory memorandum to the Act, did not support a construction that ‘week’ did not mean the actual working days falling within a given seven day period. The Full Bench did not accept that it was to be interpreted as meaning some notional number of working hours, derived from the employee’s average hours.33 Decisions of various courts and tribunals also supported an interpretation where the entitlement to annual leave had traditionally been expressed in terms of weeks or days, where this was understood to mean ‘calendar weeks’, and ‘individual working days within a calendar week’.34 The historical interpretations have not been of some aggregation of a fixed number of working hours.
[82] After this extensive review, the Full Bench stated their conclusions as:
“Accordingly we conclude that in the NES provisions of the FW Act, a “week” of annual leave is an authorised absence from work during the working days falling in a seven day period, and a “day” of leave (whether of annual or personal/carer’s leave) is an authorised absence from the working time in a 24 hour period. We reject RACV’s submission that “week” and “day” are to be read as terms of art referring to a specific number of working hours that may not constitute an actual week or day in a given case. We further conclude that the amount of leave deducted from an employee’s leave balance necessarily correlates with the amount of leave taken, so that if a week’s annual leave is taken, a week is deducted from the employee’s accrued annual leave balance, and if a day of annual leave or personal/carer’s leave is taken, a day is deducted from the employee’s accrued annual leave or personal/carer’s leave balance.” 35
[83] The practical result of this construction lead the Full Bench to seek further submissions concerning the actual operation of the Agreement’s terms and their interaction with the NES. As is relevant to annual leave, the Full Bench ultimately held that the practical effect of their conclusions was:
“(1) RACV shiftworkers who work shifts of the type described in clause 29.2 of the Award (as incorporated into the Agreement) must receive, for each year of service, 190 hours or five “weeks” of annual leave (in the sense discussed in paragraph [82] of the initial decision), whichever is the higher.” 36
[84] The Full Bench refrained from making further attempts to prescribe how RACV was to comply with this finding, instead taking the position that it was RACV’s responsibility to take steps to ensure compliance. 37
[85] The next decision to consider is Glendell, which was an appeal from a decision of the Federal Circuit Court to the Federal Court. As with Mondelez (discussed below), Glendell was decided by a majority of the Full Court of the Federal Court; Justices White and Bromwich constituting the majority, with Justice Siopis in dissent.
[86] Glendell concerned the operation of s.89 of the Act, which regulates when a public holiday occurs during a period in which an employee is on “paid annual leave”. The principal issue, in the majority’s view, concerned the application of s.89 of the Act to periods of leave under an Enterprise Agreement, where the Enterprise Agreement provided greater entitlements than the minimum provided in the NES. The majority rejected various components of the construction advocated for by the parties but in the end rejected the CFMEU’s primary contention.
[87] Primarily, the majority relied upon the definition of “paid annual leave” contained within the Act. That definition refers to leave arising from an entitlement under s.87. The entitlement under s.89 of the Act, therefore, only applied to the legislative minimum contained in the NES, and not to additional entitlement that might be conferred by Enterprise Agreements. 38 The majority, however, made the following statement concerning the entitlement to four weeks paid annual leave in the circumstances then before them:
“Under the NES, the entitlement to four weeks paid annual leave means that employees may have 14 shifts away from work whereas the entitlement to six weeks paid annual leave of employees working a seven day shift roster means that they will be entitled to 21 shifts away from work.” 39
[88] The majority considered that this statement was consistent with the approach taken by the Full Bench in RACV. 40 Taking the example further, the majority said:
“The ordinary hours can still be deducted from an employee’s leave balance as provided for in the EAs. At 10 ordinary hours per shift, 21 shifts equate to 210 hours (or six weeks of 35 hours each). Ten ordinary hours can be deducted for each shift for which the employee is absent on leave. At 8.75 ordinary hours per shift, 20 shifts equate to 175 hours (or five weeks of 35 hours per week). Eight and threequarter hours can be deducted for each shift for which the employee is absent on leave.” 41
[89] The final decision referred to by the parties was Mondelez v “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU) 42(Mondelez). Mondelez was also a majority judgment of the Full Court of the Federal Court; Justices Bromberg and Rangiah constituting the majority, Justice O’Callaghan in dissent.
[90] Mondelez concerned the entitlement to paid personal/carer’s leave and its quantification under the Act and whether the method of accounting being applied by Mondelez, as employer, was inconsistent with the NES (s.96(1)) in particular. The majority considered the natural and ordinary meaning of the words of the provision, the proposed “industrial” construction advanced by Mondelez and the authorities (which is referred to below). The ultimate conclusion of the majority was to reject the submission that “day” referred to “notional day” and that “day” refers to the portion of a 24 hour period that an employee would otherwise be allotted to work (which the majority referred to as “working day”).
[91] In referring to RACV, their H onours considered that the conclusion of the Full Bench concerning the ordinary meaning of “day” was not materially different to the “working day” construction arrived at by the majority. 43 The subsequent discussion by the majority in Glendell, while concerning different provisions and a different practical issue, the majority approved the approach of the Full Bench in RACV, in particular, the conclusion with respect to the meaning of “day”. The majority in Mondalez considered that this conclusion, of the majority in Glendell, was part of the ratio decidendi of the case and that, as a consequence, the majority in Mondalez would follow the earlier authority in Glendell unless it was plainly wrong.44 In any event, the majority in Mondalez concurred with the conclusion of the majority in Glendell.45
[92] On 13 August 2020, the High Court handed down its decision in two matters; Mondelez Australia Pty Ltd v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union; Minister for Jobs and Industrial Relations v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union 46 (Mondelez). In allowing each appeal, a majority of the Court47 declared:
"The expression '10 days' in s 96(1) of the Fair Work Act 2009 (Cth) means an amount of paid personal/carer's leave accruing for every year of service equivalent to an employee's ordinary hours of work in a week over a two-week (fortnightly) period, or 1/26 of the employee's ordinary hours of work in a year. A 'day' for the purposes of s 96(1) refers to a 'notional day', consisting of one-tenth of the equivalent of an employee's ordinary hours of work in a two-week (fortnightly) period."
[93] For present purposes, it is enough to state that a majority of the High Court, for different reasons, considered that the ordinary meaning of ’10 days’ was not the meaning to be attributed to the phrase when regard was had to the legislative purposes, extrinsic materials, legislative history and context in which the phrase appears. Rather, for the scheme of accruing, paying, and cashing out of leave to work cohesively, and consistent with a continuation of the legislative history of the entitlement, the entitlement operates by reference to ordinary hours of work (reflected in the Court’s declaration).
[94] The question then becomes, how does Mondelez, effect this decision in dealing with this dispute, if at all. The Applicant is correct to submit that a decision of any Court only authoritatively deals with the issues that were before it. The precedential value of decisions are limited to the issues decided. Mondalez is therefore authority for the proposition that ’10 days’ in s.96(1) of the Act has the meaning declared by the High Court. The High Court has not made any relevant pronouncement on the effect of the NES as relates to annual leave; at least not in a manner that is binding. However, the reasoning of the High Court is something that any court or tribunal may find persuasive.
[95] In this matter, it is my view that the reasoning of the High Court in Mondelez is so closely analogous to the provisions with which I am concerned that it is persuasive as to my determination. I have taken this view primarily because the scheme establishing the entitlement to paid leave is almost identical. It is identical in that:
• The “amount of leave” is expressed in nearly identical terms; 48
• The “accrual of leave” is expressed in identical terms by reference to “ordinary hours of work”; 49 and
• The “payment for” each type of leave is expressed in identical terms by reference to the “base rate of pay for the employee’s ordinary hours of work in the period”. 50
[96] This means that the legislative context and purpose for the provisions is also so comparable as to be almost identical. It must be accepted that, the origin and purpose of the two types of paid leave is different, but that history has merged into the overall scheme established by the history of legislative codification of an industrial safety net over the past 30 or 40 years, including the safety net of paid leave entitlements.
[97] The legislative history and continuation of entitlements between the Act and the WR Act is also relevantly identical. The statutory formula present in the WR Act has been abandoned and restated, in simpler terms. 51
[98] As a consequence of this, it is considered that the entitlement to “4 weeks” or “5 weeks” in s.87(1) of the Act means an amount of paid annual leave accruing for each year of service equivalent to an employee’s ordinary hours of work in a week over a 4 week or 5 week period.
[99] Clause 21.6, which applies to Resource Recovery Centre employees only, provides that the ordinary hours per week will be 38 hours. It is an agreed fact that over the 8 week cycle, employees work 304 ordinary hours being an average of 38 hours per week.
[100] As the Full Bench in RACV noted in its second decision, deciding the orders it would make as a result of its conclusions, it seems to me that the parties have agreed that the wording of the Agreement is such that the entitlement to annual leave for employees of the Respondent derives from the NES. I concur with the Full Bench that it is not for this Commission to “attempt to prescribe the means” by which the Respondent is to ensure compliance with these important minimum obligations.
[101] On the evidence before me, the first question for arbitration is answered in the negative, in that the annual leave entitlement of 162 hours per year currently provided by Cleanaway to its employees does not fail to meet the NES entitlement to annual leave at s.81(1)(a).
[102] In relation to the second question, the reasons identified by the Full Bench in RACV, 52as set out below:
“[19] We are not inclined to attempt to prescribe the means by which RACV is to ensure that employees receive these entitlements, particularly as there is nothing before us to suggest that the potential for underpayment of the NES entitlements to annual leave and personal/carer’s leave which we identified in the initial decision has yet manifested itself in reality. It is up to RACV to take the necessary steps and put in place the systems to ensure that it complies with its obligations under the Agreement as it has been interpreted in the initial decision and this decision…”
[103] For these reasons, in accordance with this case authority, a specific answer is not required for the second question. That is, it is not necessary, in compliance with the approach set out above to be prescriptive regarding the accrual method to ensure that the NES entitlement as affirmed by question one is met. The practical effect is that employees must receive, for each year of service, 162 hours of annual leave, or four “weeks” of annual leave, whichever is the higher.
[104] I Order accordingly.
COMMISSIONER
Printed by authority of the Commonwealth Government Printer
<PR725647>
1 [2015] FWCFB 5619
2 [2018] FWCA 2402
3 See ss.55 and 56 of the Act
4 [2015] FWCFB 2881
5 Ibid at [82]
6 [2019] FCAFC 138
7 [2017] FCAFC35
8 [2020] HCA 29.
9 Mondelez Australia Pty Ltd v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union [2020] HCA 29, [26]
10 Ibid, [13]
11 Ibid, [14]
12 Ibid, [15]
13 Ibid, [25]
14 Ibid, [22]
15 Ibid, [45]
16 Ibid, [30]-[31]
17 [2004] HCA 39; (2004) 78 ALJR 1182 at [79]; [2004] HCA 39; 209 ALR 182 at 203
18 RACV Road Service Pty Ltd v Australian Municipal, Administrative, Clerical and Services Union [2015] FWCFB 2881, [80]
19 Explanatory Memorandum to the Fair Work Bill 2008; at 386, and Respondent’s Mondelez Submission at [12(b) – (c)]
20 Mondelez Australia Pty Ltd v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union [2020] HCA 29, at [15]
21 Mondelez Australia Pty Ltd v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union [2020] HCA 29, at [22]
22 RACV Road Services Pty Ltd v Australian Municipal, Administrative, Clerical and Services Union [2015] FWCFB 2881, at [38] – [40]
23 Mondelez Australia Pty Ltd v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union [2020] HCA 29, at [34], [39]
24 [2015] FWCFB 2881 at [1]
25 Ibid at [21]
26 Ibid at [30]
27 Ibid at [32]; [49]
28 Ibid at [36]
29 Ibid at [37]; [84]
30 Ibid
31 Ibid
32 Ibid at [50] to [79]
33 Ibid at [44].
34 Ibid at [79]
35 Ibid at [82]
36 RACV Road Service Pty Ltd v Australian Municipal, Administrative, Clerical and Services Union[2015] FWCFB 8554 at [18]
37 Ibid at [19]
38 Ibid at [107]; [120]
39 Ibid at [132]
40 Ibid at [133]
41 Ibid at [134]
42 [2019] FCAFC 138
43 Ibid at [102]
44 Ibid at [108]
45 Ibid at [108]
46 [2020]HCA 29.
47 Kiefel CJ, Nettle and Gordon JJ; Edelman J concurring in the orders of the Court; Gageler J dissented and would have dismissed the appeals.
48 Fair Work Act 2009 (Cth) s.96(1); s.87(1).
49 Ibid s.96(2); s.87(2).
50 Ibid s.99; s.90(1).
51 [2020] HCA 29 at [13].
52 RACV Road Service Pty Ltd v Australian Municipal, Administrative, Clerical and Services Union[2015] FWCFB 8554 at [19].
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