Australian Workers' Union, The v Casinos Austria International (Cairns) Pty Ltd T/A the Reef Hotel Casino Cairns
[2020] FWC 3580
•8 JULY 2020
| [2020] FWC 3580 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.739 - Application to deal with a dispute
Australian Workers’ Union, The
v
Casinos Austria International (Cairns) Pty Ltd T/A The Reef Hotel Casino Cairns
(C2019/3623)
COMMISSIONER SPENCER | BRISBANE, 8 JULY 2020 |
Alleged dispute about any matters arising under the enterprise agreement and the NES;[s186(6)].
INTRODUCTION
[1] The Australian Workers’ Union (the Applicant) made an application pursuant to s.739 of the Fair Work Act 2009 (the Act) in relation to a dispute arising under The Reef Hotel Casino Cairns Complex and Staff – Enterprise Agreement 2014-2017 with Reef Hotel Casino T/A The Reef Hotel Casino Cairns (the Respondent).
[2] The parties submitted the following questions for Arbitration:
a. Does the definition of a “Continuous Shift Worker” at clause 1.2 of the Agreement include an employee who regularly works a rotating roster over seven (7) days a week, but who is not rostered and does not ordinarily work during each of the twenty-four (24) hours of a day within a rotating roster? And if so, which rotating rosters currently rostered by the Employer would fall into the definition of a “Continuous Shift Worker” at clause 1.2 of the Agreement that would result in the payment as defined within clause 5.1.1.2 of leave loading and the fifth (5th) week of annual leave under the Agreement?
b. Does the “Ordinary Rate Of Pay” as defined by clause 1.2 of the Agreement require the Employer to pay over-Agreement weekend rates of pay to employees when they take leave (annual, personal or long service leave) on those weekend days?
[3] The matter was listed for conference however was unable to be resolved. Directions were issued for the filing of material and the matter was listed for Hearing in Cairns.
[4] The matter was initially listed for a final Hearing in which parties would have had the opportunity to make final oral submissions in the matter. By consent of parties, (given the intervention of Covid-19) the matter was dealt with on the papers and the Hearing did not proceed. The parties provided additional final submissions in written form.
RELEVANT PROVISIONS OF THE ACT
[5] Pursuant to s.739 of the Act:
“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.”
RELEVANT PROVISIONS OF THE AGREEMENT
[6] The Agreement was approved by the Commission on 2 May 2014. The Agreement operated from 7 May 2014, and nominally expired on 7 May 2017.
[7] Clause 6.2 of the Agreement provides the procedure by which the Applicant asserts that the Commission is authorised to arbitrate the dispute. Clause 6.2 provides:
“6.2 DISPUTE RESOLUTION
6.2.1 Resolving disputes
All disputes about a provision of this Agreement, the National Employment Standards, or the workplace are to be resolved in accordance with the following:
Step 1
Resolving disputes at a workplace level –Supervisor/Manager
If the Employer and the affected Employee(s) are in dispute because of a provision of this Workplace agreement or of the Act then they must genuinely attempt to resolve the dispute at the workplace level.
This may involve the affected Employee first discussing the matter with their Supervisor/Manager.
Step 2
Resolving disputes at a workplace level – Employee’s Manager/Supervisor
If no agreement is reached the matter should be referred to the Employees Manager/Supervisor. The discussion should occur within 24 hours of the incident.
Step 3
Resolving disputes at a workplace level – Executive Manager Human Resources
If no agreement is reached the matter should be referred to the Executive Manager Human Resources. The discussion should occur within 48 hours of the incident.
Step 4
Where the dispute cannot be resolved at the workplace level
If a matter cannot be resolved at the workplace level a party to the Agreement may elect to refer the matter to FWC.
Step 5
FWA Arbitration
The parties agree that the FWC may arbitrate upon application of either party. If arbitration is necessary the FWC shall have the power to exercise procedural powers in relation to directions, hearings, witnesses, evidence and submissions which are necessary to make the arbitration effective. Further, the parties agree that the decision of the FWC will be binding upon the parties. The parties agree that either party may appeal the decision of the FWC.
6.2.2 Obligations of Employee during a Dispute
An Employee must, whilst a dispute is being resolved, continue to work in accordance with their contract of employment unless the Employee has reasonable concerns about an imminent risk to their health and safety and comply with any reasonable direction(s) given by their Employer to perform other available work either at the same workplace or at another workplace. Provided that in directing the Employee to perform work, the Employer will have regard to any law of the Commonwealth or of a State or Territory dealing with occupational health and safety that apply and whether that work is appropriate for the Employer to perform.
6.2.3 Representation
The Employee may be represented at any of the above steps.”
[8] Pursuant to 1.2 of the Agreement:
“Continuous Shift Worker” means an Employee whose shifts are continuously rostered 24 hours a day for 7 days a week; and is regularly rostered to work those shifts; and regularly works on Sundays and public holidays.”
[9] Pursuant to 5.1.1.1 of the Agreement:
“5.1.1.1 Entitlement to Annual Leave Hospitality and Engineering Employees (other than continuous shift workers)
For each year of service with the Employer a full-time or part-time Employee is entitled to four (4) weeks of paid annual leave, excluding public holidays.
All annual leave is payable at the Employees ordinary rate of pay. Hospitality and Engineering Employees, other than continuous shift workers, will in addition to their annual leave be entitled to leave loading calculated on the basis of 17.5% of their annual leave entitlement at the time of taking such leave or on termination.”
[10] Pursuant to 5.1.1.2 of the Agreement:
“5.1.1.2 Entitlement to Annual Leave Continuous Shift Worker
For each year of service with the Employer a full-time or part-time Employee who is a Continuous Shift Worker is entitled to five (5) weeks of paid annual leave, excluding public holidays.
All annual leave is payable at the Employees ordinary rate of pay. Continuous shift workers will in addition to their annual leave be entitled to leave loading calculated on the basis of 17.5% of their annual leave entitlement at the time of taking such leave or on termination.”
SUMMARY OF THE APPLICANT’S SUBMISSIONS AND EVIDENCE
First question for Arbitration
Ordinary meaning of the words
[11] In relation to the first question for arbitration, the Applicant has submitted that in accordance with the rules set out in Manufacturing Workers Union (AMWU) v Berri Pty Limited (Berri), 1the ordinary meaning of the words must first be reviewed, followed by a consideration of the context and purposes for the words in dispute.
[12] In consideration of clause 5.1.1.2 of the Agreement, the Applicant noted that the key words in dispute are ‘continuous shift work’. The Applicant submitted that these words are in dispute and that to appropriately consider the definition of the word, further context is needed within the Agreement, and if needed, common law to assist in the interpretation.
[13] The Applicant relied upon clause 1.2 of the Agreement that provides the definition in relation to a ‘continuous shift worker’, stating:
“…an Employee whose shifts are continuously rostered 24 hours a day for 7 days a week; and is regularly rostered to work those shifts; and regularly works on Sundays and public holidays.”
[14] In consideration of the definition within the Agreement, a continuous shift worker must be
• Continuously rostered for 24 hours a day, 7 days a week;
• Regularly works Sundays and public holidays.
Plain meaning
[15] The Applicant submits that the further issue in dispute is the consideration of what is ‘continuously rostered 24 hours a day’ and it was submitted that further context and information must be utilised, to understand the role of the clause.
[16] In consideration of the facts, the Applicant’s members fit the definition defined by clause 5.1.1.2 of the Agreement, and the Applicant submits that ‘continuous’ shifts should be considered within the context of the Respondent’s business, and that ‘continuous’ should not be interpreted as shifted at least every hour of 24 hours a day, rather:
• The condition must be viewed in its entirety, in particular, that employees are rostered over a 24 hour period;
• The employee does not have to have worked at least every hour of a 24 hour period; and
• That the words must be viewed within the industrial relations environment of the relevant industry.
[17] The Applicant drew attention to the case of NTEIU v University of Wollongong, 2 and Soliman v University of Technology, Sydney3:
“It is trite that narrow or pedantic approaches to the interpretation of an award are misplaced. The search is for the meaning intended by the framer (s) of the document bearing in mind that such framer (s) were likely of a practical bent of mind: they may well have been more concerned with expressing an intention in ways likely to have been understood in the context of the relevant industry and industrial relations environment than with legal niceties or jargon.” 4
[18] In consideration of the reasoning provided within the case above, the Applicant submitted that the industrial relations environment must be considered, and in this case, the impracticality that the Respondent’s employees have, being that they are not rostered on every hour of a 24 hour period, as the Respondent’s business is closed.
Witness statement of Ms Joanne Marie Aldous
[19] Ms Joanne Marie Aldous provided a witness statement in support of the Applicant. Ms Aldous is an employee of the Respondent and confirmed that employees of the Respondent:
• Were continuously rostered for 24 hours a day, 7 days a week; and
• Regularly work Sundays and public holidays.
[20] Ms Aldous further confirmed that the following groups of employees cannot work the hours, as the Respondent is not open for these services and thus it would be impractical for these groups of employees to work:
• Hospitality Services;
• Casino Services;
• Engineering Services; and
• Hotel Services.
[21] She also stated that the rates of pay for the employees had changed, with the employee rates being marked as Exhibit JA-01.
[22] At the Hearing, Ms Aldous gave the following evidence, which the Applicant referred to in their submissions:
“When you’re referring to the employees within paragraph 2, are you referring to all employees, despite them not practically being able to work the 24 hours---Yes”5
Witness statement of Sharon Winn
[23] Ms Sharon Winn provided a witness statement in support of the Applicant. Ms Winn is an Organiser with the Applicant and represents employees of the Respondent. In relation to ‘continuous shift workers’ Ms Winn also confirmed that the following groups of employees cannot work certain hours as the Respondent is not open and thus it would be impractical for these groups of employees to work:
• Hospitality Services;
• Casino Services;
• Engineering Services; and
• Hotel Services
[24] Ms Winn confirmed that it was agreed between parties that not all groups could work every hour of 24 hours, but that there was an understanding with the Respondent that the mentioned groups above would be classed as ‘continuous shift workers’.
[25] In relation to ‘ordinary rates of pay’ Ms Winn confirmed that during negotiations, the Respondent’s employees agreed that:
• To sacrifice their entitlements to penalty rates in exchange for set rates for weekends, weekdays and public holidays that would be defined as per clause 1.2 and 3.2 of the Agreement as ‘ordinary rates of pay’ or rate of pay that is paid for the day worked; and
• There would be no particular rate of pay or ‘ordinary rate of pay’ when an individual took annual, long service, or personal leave, and the Respondent’s employees would be paid the rate of pay as if they were working on the day taken as annual, long service or personal leave.
[26] The Applicant raised an additional concern regarding ‘ordinary rates of pay’ on 1 April 2019, stating that there is an inconsistency with the Agreement in the rate of pay when employees are taking annual, long service or personal leave. This correspondence is marked Exhibit SW-01.
[27] Ms Winn further confirmed that the rates of pay for the employees have changed and been updated under clause 3.2 of the Agreement, the employee rates being marked Exhibit SW-02.
Second question for Arbitration
[28] The Applicant further relied upon the Berri case in considering the second question, in terms of the same rules by considering the plain and ordinary meaning, and thereafter, further context within the Agreement. 6
[29] The Applicant drew reference to clauses 5.1.1.1 and 5.1.1.2 of the Agreement, where it is stated that the employees will be paid a ‘Ordinary Rate of Pay’. Further, clause 5.2.1.3 of the Agreement refers to ‘Base Rate of Pay’; and clause 5.3 of the Agreement does not refer to the rate of pay. The Applicant submitted that the ‘Ordinary Rate of Pay’, should be taken into consideration for payment of Long Service Leave. The Applicant provided submissions as to the interpretation of ‘ordinary rate of pay’ and ‘base rate of pay’ below.
Ordinary rate of pay
[30] The Applicant submited that the words are provided context within the Agreement as per clause 1.2 in providing the definition of an ‘Ordinary Rate of Pay’. Clause 1.2 of the Agreement defines ‘Ordinary Rate of Pay’ as:
“Ordinary rate of pay” means the hourly rate of pay set out in clause 3.2 of this Agreement.”
[31] The Applicant referred to clause 3.2 of the Agreement which outlines the rates of pay for Hospitality Services, Casino, and Engineering (‘classifications’), and that the particulars within clause 3.2 of the Agreement, have been updated as from 2018.
[32] The Applicant submitted the updated rates of pay, for the relevant classifications within the witness statement of Ms Aldous, marked as Exhibit JA-01.
[33] Additionally, the Agreement does not accommodate for penalty rates, but for overtime (clause 4.2 of the Agreement), as it was submitted that it was mutually agreed between the parties, that it would be ‘set-off’ within the Agreement, and the Applicant in this regard, relied upon Ms Winn’s witness statement. Thus, the ‘Ordinary Rate of Pay’ is the amounts that are particularised within Exhibit SW-02 of Ms Winn’s statement, and Exhibit JA-01 of Ms Aldou’s statement.
[34] The Exhibit referred to particularises each ‘Ordinary Rate of Pay’ for all classifications working the following:
• Monday to Friday, 7am to 7pm;
• Monday to Friday, 7pm to 12pm;
• Saturday (24 hours);
• Sunday (24 hours); and
• Public Holidays.
[35] In consideration of the above, the ‘ordinary rate of pay’ as clearly defined, for each day has a particular rate of pay, and that is the ‘Ordinary Rate of Pay’, that should be paid to the Respondent’s employees, if they are on Annual or Long Service Leave.
[36] Additionally, the Applicant relied upon the witness statement of Ms Winn to provide further context to the understanding of ‘Ordinary Rate of Pay’. Ms Winn’s statement confirmed that during the negotiations, the Respondent agreed that the ‘Ordinary Rate of Pay’ would apply when the Respondent’s employees were working or taking some form of leave.
[37] In consideration of the above, the Applicant set out that each day has been particularised and defined as what rate of pay is provided to the Respondent’s employees. Further, ‘Ordinary Rate of Pay’ is stated within clause 5.1.1.1 and 5.1.1.2 of the Agreement, thus the Applicant submits that the Applicant’s members should be paid an appropriate pay when on Annual or Long Service Leave.
‘Base Rate of Pay’
[38] The Applicant referred to clause 5.2.1.3 of the Agreement, which particularised the rate of pay the Respondent’s employees receive, if taking personal leave, clause 5.1.2.3 of the Agreement states:
“If an Employee takes a period of personal/carer’s leave, the Employer must pay the Employee at the Employee’s base rate of pay for the Employee’s Ordinary hours of work”
[39] The Applicant submitted that the term ‘Base Rate of Pay’ is defined by clause 1.2 of definitions which states:
‘“Base rate of pay” means the rate of pay payable to the employee for their ordinary hours of work, but not including any other monetary allowances, incentives-based payments and bonuses, loadings, overtime or penalty rates or any other separately identifiable amounts.”
[40] The Applicant relied upon the earlier submission that the base rate of pay for each day had been clearly defined, and will be paid as per Ms Winn’s and Ms Aldous’ statements in Exhibit SW-02, and Exhibit JA-01.
[41] The Applicant further relied upon the submission that, in terms that the ‘base’ or ‘ordinary’ rate of pay has clearly defined, and are not defined in a separate definition of the Agreement. Accordingly the Applicant submitted that when the Respondent’s employees take personal leave, that they should be paid the amount that they would be remunerated, if they were working on the day, the Respondent’s employee is taking personal leave.
SUMMARY OF THE RESPONDENT’S SUBMISSIONS AND EVIDENCE
First question for Arbitration
[42] In relation to the first question for arbitration, requiring the Commission to determine whether the definition of ‘continuous shift worker’ as defined in clause 1.2 of the Agreement includes an employee working a rotating roster over seven (7) days but who does not work during each of the twenty fours (24) of a day. The question will determine which employees are entitled to be paid five (5) weeks of annual leave together with the seventeen and a half percent (17.5%) annual leave loading pursuant to clause 5.1.1.2 of the Agreement.
[43] The definition of “continuous shift worker” has remained the same since the 2007 Agreement. The interpretation applied to that clause by the Respondent since it was first included in the 2007 Agreement, has been that for an employee to be a “continuous shift worker” they would need to be rostered to work shifts over twenty four (24) a day, seven (7) days a week. The Respondent stated that the only group of employees covered by the Agreement, who are rostered by twenty four (24) a day, seven (7) days a week, are security employees.
[44] The Respondent submitted that the wording of the definition of “continuous shift worker”, is by design, similar to the wording at section 87 (3) of the Act, which defines a shift worker for an award-free employee’s entitlement, to the fifth week of annual leave.
[45] The Respondent further submitted that the first step to interpreting an Enterprise Agreement is to examine the words of the agreement. Submitting that whilst the Full Bench in AMWU v Berri Pty Ltd , 7 Berri summarised the rules of enterprise bargaining interpretation, the decisions from which they summarised such cannot be ignored.
[46] The Respondent submitted that the words in the Agreement in dispute are plain and unambiguous.
[47] The Full Bench in Berri also stated that “Regard may be had to evidence of surrounding circumstances to assist in determining whether an ambiguity exists.” The Respondent argues that no ambiguity existed. They referred to the Full Bench in SDA v Woolworths Limited: 8
“[12] It is undoubtedly the case that, in resolving a dispute as to the interpretation of a provision of an enterprise agreement approved under the Fair Work Act 2009, it is permissible to take into account the industrial context and purpose of the agreement. However, there are two important limitations upon this approach relevant to the determination of this appeal. The first is that the process of interpretative analysis must focus, first and foremost, upon the language of the agreement itself. For example, in Amcor Limited v CFMEU, the process was described by Gleeson CJ and McHugh J in the following terms: “The resolution of the issue turns upon the language of the particular agreement, understood in the light of its industrial context and purpose ...”.9 Or, as Kirby J put it in the same case, “Interpretation is always a text-based activity”. 10 Admissible extrinsic material may be used to aid the interpretation of a provision in an enterprise agreement with a disputed meaning, but it cannot be used to disregard or re-write the provision in order to give effect to an externally derived conception of what the parties’ intention or purpose was. The oft-quoted statement of Madgwick J in Kucks v CSR Limited makes this clear11:
“But the task remains one of interpreting a document produced by another or others. A court is not free to give effect to some anteriorly derived notion of what would be fair or just, regardless of what has been written into the award. Deciding what an existing award means is a process quite different from deciding, as an arbitral body does, what might fairly be put into an award. So, for example, ordinary or well-understood words are in general to be accorded their ordinary or usual meaning.”
[13] The second limitation is that regard cannot be had to the respective subjective intentions and expectations of the parties as demonstrated by their “statements and actions” in negotiating the agreement.12 Rather, the task is to identify the common intention of the parties as they have expressed it in the terms of their agreement. In the context of commercial contracts, this task was described by the High Court in Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd13 in the following way:
“It is not the subjective beliefs or understandings of the parties about their rights and liabilities that govern their contractual relations. What matters is what each party by words and conduct would have led a reasonable person in the position of the other party to believe. References to the common intention of the parties to a contract are to be understood as referring to what a reasonable person would understand by the language in which the parties have expressed their agreement. The meaning of the terms of a contractual document is to be determined by what a reasonable person would have understood them to mean. That, normally, requires consideration not only of the text, but also of the surrounding circumstances known to the parties, and the purpose and object of the transaction.”
[14] The above passage was treated as part of a “practical approach” according with the established approach to the construction of industrial agreements in Construction, Forestry, Mining and Energy Union v HWE Mining Pty Limited.14”
[48] The judgment of the High Court in Codelfa Construction Pty Ltd v State Rail Authority of NSW 15established the widely accepted principles for resolving ambiguity in contracts. In that case Mason J stated the rule thus:
“The true rule is that evidence of surrounding circumstance is admissible to assist in the interpretation of the contract if the language is ambiguous or susceptible of more than one meaning. But it is not admissible to contradict the language of the contract when it has a plain meaning. Generally speaking facts existing when the contract was made will not be receivable as part of the surrounding circumstances as an aid to construction, unless they were known to both parties, although, as we have seen, if the facts are notorious knowledge of them will be presumed.”
[49] In BP Australia Pty Ltd v Nyran Pty Ltd 16, Nicholson J distilled, by reference to Codelfa, the following points of principle for resolving ambiguity in contracts:
• it is necessary firstly to determine whether the contract has a plain meaning or contains an ambiguity;
• if the contract has a plain meaning, evidence of surrounding circumstances will not be admissible to contradict the language of the contract;
• if the language of the contract is ambiguous or susceptible of more than one meaning evidence of surrounding circumstances is admissible to assist in the interpretation of the contract;
• the concept of surrounding circumstances is to be understood to be a reference to the objective framework of facts. It will include:
• evidence of prior negotiations so far as they tend to establish objective background facts known to both parties and the subject matter of the contract;
• facts so notorious that knowledge of them is to be presumed;
• evidence of a matter in common contemplation and constituting a common assumption.
[50] After referring to the foregoing points of principle Nicholson J continued as follows:
“From the evidence of that setting the parties’ presumed intention may be taken into account in determining which of two or more possible meanings is to be given to a contractual provision. What cannot be taken into account is evidence of statements and actions of the parties which are reflective of their actual intentions and expectations. Objective background facts can include statements and actions of the parties which reflect their mutual actual intentions. That is, evidence of the mutual subjective intention of the parties to a contract may be part of the objective framework of facts within which the contract came into existence. It is the mutuality which makes the evidence admissible.’”
[51] It was argued that, when a text based examination is made of the definition of “continuous shift worker” at clause 1.2 of the Agreement, there can be no other conclusion that an employee must be rostered over each of the twenty four (24) hours of a day to be a “continuous shift worker” for the purposes of the 2014 Agreement. The clause says exactly that; ““continuous shift worker” means an Employee whose shifts are continuously rostered 24 hours a day……”.
[52] The Respondent submitted that the distinction in the Agreement between the annual leave entitlements clearly reflected the intention of the parties. Further, to interpret them as proposed by the Applicant, and thereby give an extra week of leave to persons not employed as “continuous shift worker”, would be to bring about a situation, clearly not intended by the parties to the Agreement.
[53] The Applicant’s submissions and Ms Winn’s witness statement, whilst scant in detail, rely on the proposition that there was some putative “understanding”. The Respondent objects to this proposition.
[54] The Respondent clearly and unambiguously rejected this claim. The interpretation that the Applicant sought would entitle a number (undefined by the Applicant) of hospitality employees currently paid pursuant to clause 5.1.1.1 to an extra week of annual leave and to casino employees currently paid under clause 5.1.1.3 to paid seventeen and a half (17.5%) annual leave loading on their five (5) weeks of annual leave.
[55] In the negotiation for the 2014 Agreement the AWU’s log of claims, at point 17, seeks that all employees are paid seventeen and a half (17.5%) annual leave loading. The Respondent rejects that they ever came to an “understanding” with the Applicant to broaden the scope of the definition of “continuous shift worker” to include an employee not working during each of the twenty fours (24) of a day. The evidence of Mr Messrs Costello, McHenry and Reynolds is that the claim for seventeen and a half (17.5%) annual leave loading (and extra annual leave) was rejected by the Respondent during the negotiation for the 2014 Agreement.
[56] In the negotiation for the 2017 Agreement the Applicant’s log of claims, at point 7 sought that all employees are paid seventeen and a half (17.5%) annual leave loading and that extra annual leave is paid. The object of the Applicant’s application for this section of the interpretation, was claimed after the 2014 Agreement was made. This clearly shows that there was no “understanding”.
[57] The Applicant’s submissions are that all classes of employees would be entitled to payment under clause 5.1.1.2 of the 2014 Agreement. Their submission means that clauses 5.1.1.1 and 5.1.1.3 are rendered meaningless. The Respondent rejected that position entirely. In United Voice V Serco Sodexo Defence Services Pty Ltd (“Serco“) 17Justice Neville was required to examine s.87(1)(b)(ii) of the Act that provides the annual leave entitlement and particularly whether certain employees were entitled to the fifth week of annual leave. In that decision he stated:
“Put rhetorically, why would the agreement have been drafted so as to recognise shiftworkers who are employed on a continuous basis and others who are not so employed? According to authorities of longstanding noted later in these reasons, the “industrial reality” of such common-place distinctions is something to which the Court should have regard.”
[58] Further in Serco Justice Neville was required to assess whether the Agreement contravened s.87 of the Act and that employees should be paid 5 weeks annual leave. The Serco Agreement contained a definition of “continuous shiftworker” remarkably similar to the 2014 Agreement as a part of that decision Justice Neville found that the Serco Agreement was unambiguous and that it clearly delinated between a shift worker and a “continuous shift worker”, as follows:
“118. Having regard to the principles articulated by French J in Wanneroo No.2 and by the Full Court in TWU v Coles in relation to giving the ordinary meaning to words in an agreement, and having proper regard to the contextual considerations and industrial realities, in my view, the definitions of “shiftworker” in cl.7 of the agreement are not only clear but also make common sense in distinguishing between employees who are required to undertake different shifts over different periods of time. With my emphasis, the non-continuous shiftworker “does not continuously work shifts over 7 days a week, 24 hours per day including working public holidays and weekends.” On the other hand (also with my emphasis), a “continuous shiftworker” “continuously [does] work shifts over 7 days per week, 24 hours per day and works public holidays and weekends.”
[59] In addition, it was submitted that:
“120.Also clear in the agreement is clause 30 which outlines the annual leave entitlements.
121. On its face, there is no ambiguity or uncertainty in relation to the distinctions made, and the definitions provided, in the agreement.
122. Further, in the light of the objects of Part 2-4 of the Act regarding enterprise agreements set out in s.171, and further the terms of s.172(1)(a) (set out earlier in these reasons), in my view there was no impediment (for the purposes of those sections at least) in providing the distinctions between shiftworkers that are set out in the agreement, and thereby conferring or providing for different annual leave entitlements for the different categories of shiftworkers. This must be the case, in my view, where the agreement does not, either in its terms or in its effect, reduce any entitlement of any worker employed under it.”
[60] For completeness, the definition of “continuous shift worker” in the 2014 Agreement is identical to the wording in the 2007 and the 2011 Agreements. And the wording in clauses 5.1.1.1, 5.1.1.2 and 5.1.1.3 of the Agreement is identical to the wording in the 2011 EA.
[61] The Respondent submitted that the second part of the first question for the Commission to determine which employees (or classes of) would be entitled to be paid annual leave under clause 5.1.1.2 does not require an answer.
[62] In addition to the question for consideration the definition of “continuous shift worker” requires that an employee “regularly works on Sundays and public holidays”. In Elizabeth O'Neill v Roy Hill Holdings Pty Ltd 18 Commissioner Williams examined the history of what constituted “regularly works on Sundays and public holidays”. Commissioner Williams applied the defined thirty-four (34) Sundays and six (6) public holidays, as the benchmark standard to meet the definition.
[63] At the first hearing, Mr Andrew Costello gave the following evidence in response to questions, on this matter, asked by the Applicant’s representative:
“Are you aware that the casino originally ran for 24 hours? Is that correct? --- Was I aware?
Yes? --- I believe I was aware.
And that no longer occurs except for high rollers essentially, is my understanding? --- Well, it still doesn’t run 24 hours.
Okay? --- We have extended play for some high rollers.
Sure? --- That might go over 24 on some occasions.
To your best recollection of the past, say, 12 months, when has that occurred?---Last 12 months?
….
…In particular one or tow [two] that I know of.’19
‘So my understanding then is that because the operations don’t run 24 hours - like we have discussed at length with the Commissioner, as well?---Sure.
That some of the group of employees, it’s practically impossible for them to be defined as working 24 hours. Is that correct?---Correct.”20
Cross examination of Sharon Winn
[64] During cross examination, the Respondent put to Ms Winn a series of questions on the claim. Ms Winn’s evidence was that the union sought 17.5% annual leave loading as a claim in “every EA to get it” and the Respondent refused the claim apart from minor advancements. 21
[65] Ms Winn also gave evidence that she understood, during the negotiations of the 2011 and 2014 agreements, that the term “continuous shift worker” and the corresponding entitlement to 5 weeks annual and 17.5% annual leave loading, only applied to a very small group of employees.22
[66] Ms Winn conceded that her understanding of the outcome of the 2014 Agreement negotiation, was that the Applicant’s claim for additional annual leave and leave loading was rejected. There was to be no change from the 2011 agreement; and that was that the definition of a “continuous shift worker” and its application to clause 5.1.1. of the Agreement was that only security and surveillance, and possibly casino employees working due to a high roller customer, were entitled to five weeks of annual leave and 17.5% annual leave loading. 23
[67] Ms Winn also conceded that she knew that Mr Costello never agreed to expand the definition of “continuous shift worker” in the 2011 and 2014 Agreements or the rejected 2017 Agreement. In addition, she agreed that Mr Costello had openly told her no, in a number of negotiations (and in “a number of languages”). 24
[68] Ms Winn also conceded that she didn’t know what Ms Archer and Ms Dizane were referring to during the conversation in which an understanding was purported to have been reached that casino employees would be classified as continuous shift workers. The relevant section of the transcript reads:
Mr D’Arcy: | “Then my question to you is this, is that you say, in your statement was that there was understanding with Ms Archer that the employees would be classified as continuous shift workers. Now, I'm saying to you that whatever was said between you and Ms Archer and Karen Dizane, couldn't have been referring to the definition that doesn't appear in the document till 2007. Whatever it was, whatever conversation you had, was about - was generally about shift workers and entitlements and those type of things, but it can't be the definition of continuous shift worker that doesn't happen until 2007 because it's not made? |
Ms Winn: | I don't know what they were referring to. It was not my conversation. It was Karen Dizane's conversation and I was there. Like I said, I don't remember the extent of the conversation, what I remember was the actions. It was Karen banging the table and raising her voice at Ms Archer. That's what I remember. So the context of the conversation and what they were referring to? No.”25 |
Second question for Arbitration
[69] The Applicant’s sought an interpretation of the 2014 Agreement that would mean that when an employee takes leave on a weekend then the “ordinary rate of pay” should be the granted transitional penalty rates. To this, the Applicant’s letter dated 1 April 2019 states that “the union deems the rates currently paid to members on a Saturday and Sunday as their ordinary rates of pay.”
[70] Berri provides that the interpretation of an Enterprise Agreement will turn on the language having regard to its context and purpose. The term “ordinary rate of pay” is defined at clause 1.2 of the 2014 Agreement as:
“Ordinary rate of pay” means the hourly rate of pay set out in clause 3.2 of this Agreement.”
[71] The express purpose of this clause is to define the term. It is unambiguous. It plainly states that the “Ordinary rate of pay” is (for the purposes of the 2014 Agreement) the hourly rate of pay, was set out in clause 3.2.
[72] The following clauses in the 2014 Agreement use the term:
Clause number | Clause title |
2.3.3 | Transfer to Lower Paid Duties |
2.3.5 | Redundancy Entitlement |
2.4.6 | Where Higher Duties Payments do not apply |
2.10.4 | Joint Consultative Committee Quorum |
2.11.1 | Payment for training |
2.12 | Union Training Leave |
3.1 | Job Grades |
5.1.1.1 | Entitlement to Annual Leave Hospitality and Engineering Employees (other than continuous shift workers) |
5.1.1.2 | Entitlement to Annual Leave Continuous Shift Worker |
5.1.1.3 | Entitlement to Annual Leave Casino Employees (other than continuous shift workers) |
5.2.3.3 | Payment for compassionate leave (other than for casual Employees) |
5.8.1 | Public Holiday Entitlement |
5.8.2 | Public Holiday Entitlement – where no work is performed |
5.8.4 | Individual Substitution of Public Holiday |
5.8.5 | Majority of Employees Substitution of Public Holidays |
A.1.2 | Personal Leave |
[73] The Respondent submitted that the term “ordinary rate of pay” is used purposively. It has a distinct meaning. For example, this can be compared against the term “base rate of pay” that is similarly defined in clause 1.2 (Definitions). The base rate of pay in the wages table in clause 3.2.3 is used for the payment of personal leave (see clause 5.2.1.3). Accordingly, the ordinary rate of pay (the loaded rate of pay) is used for annual leave and annual leave loading calculations and the base rate of pay (the rate stripped of the penalty rate loading), is used for personal leave. This is specifically illustrated by variations made in the 2011 Agreement from the previous 2007 Agreement. In the negotiations for the 2011 Agreement, the Respondent proposed and had accepted, a change to the manner in which personal leave was paid. The 2011 Agreement included a definition of base rate of pay, which the 2007 Agreement did not. Clause 5.2.6 of the 2007 Agreement provided that personal leave was payable at the ordinary rate of pay. Clause 5.2.1.3 of the 2011 Agreement provided that personal leave was payable at the base rate of pay. Appendix A.1.2 of the 2011 Agreement grandfathered the entitlement to be paid personal leave at the ordinary rate of pay for employees employed prior to 18 April 2011. The 2011 Agreement clearly marked the different columns of the wage tables at clause 3.2 (Wages) of the 2011 Agreement to include separate rates for both ordinary and base rate of pay.
[74] Clause 3.2.3 of the 2014 Agreement provides for the rates of pay payable from the second anniversary of the 2014 Agreement (7 May 2016). It also contains a rates table that prescribes, in its heading, for the full time ordinary rate per week, the full time and part time ordinary rate per hour, the full time and part time base rate per hour and the casual ordinary rate per hour.
[75] The ordinary rate of pay is clear. The Respondent submitted that the Applicant’s submissions cannot be accepted as both the definition and use of the “ordinary rate of pay” under the 2014 Agreement, is unambiguous and that the minimum rates of pay in clause 3.2.3 of the 2014 Agreement, are the rates of pay, that the Respondent is obligated to pay.’
[76] The Respondent is paying in excess of those rates, contained at clause 3.2.3 as the first increase from the 2017 Agreement that was made but not approved (approximately between three and three and half percent (3%-3.5%) was paid (please note for engineering this is six percent (6%).
[77] The Applicant argued that clause 3.2 of the 2014 Agreement “have been updated”. The Respondent rejects this assertion. The Act provides no facility “to update” a term of an Enterprise Agreement. An employer party to an enterprise Agreement can seek a variation to an enterprise Agreement. 26 Or an enterprise Agreement can be varied on application from a party where an ambiguity or uncertainty exists.27 However, no such application has been made or approved.
[78] In Scott v Sun Alliance Australia Ltd (1994) 28 (“Scott”) the High Court observed that by reason of usage, the phrase has come to mean the standard rate of pay as fixed by the relevant legislative instrument, Award or Agreement. The Court was concerned with the meaning of that phrase as used in Workers Compensation Act 1988 (Tas.). The Court held:
“However, the critical question for present purposes is whether the legislature, in using the expression “ordinary time rate of pay (as expressed by reference to a week)”, intended that it should apply to rates of pay fixed by individual contracts as well as industrial awards or agreements. In our opinion, the better conclusion is that the term was intended to apply only to rates of pay fixed by industrial awards or agreements”
[79] The Respondent submitted that the same as in ‘Scott’ that the term “ordinary rate of pay” for the purposes of the 2014 Agreement, is that as found in the 2014 Agreement not additional over-Agreement payments, which the Respondent is at liberty to cease at any time.
[80] Further the Respondent rejected that there was a second “understanding” about the term “ordinary rate of pay”. The Respondent submitted that it was a fiction that the Applicant and the Respondent reached an ‘understanding’ that would allow the “ordinary rate of pay” for an Agreement negotiated in 2014, to cover the differential transitional rates of pay when those transitional rates were not even completed until the Commission’s rejection of the 2017 Agreement some three (3) years later.
[81] The Applicant suggested that as employees agreed to a loaded rate of pay as there would be “no particular rate of pay” or “Ordinary rate of pay” when an individual took leave and that this means the definition of “ordinary rate of pay” should be interpreted to obligate that the over-agreement payments for weekend work that are currently being made by the Respondent.
[82] Further penalty payments are not payable on annual leave. Annual leaving loading was expressly included as an entitlement to compensate for penalties (and missed opportunity for overtime) not paid during leave. Disability penalties, such as weekend penalties, are incurred only when worked unless the industrial instrument specifically allows for such. The 2014 Agreement makes no such allowance and in fact could not because it did not obligate the payment of weekend penalties.
Witness statement of Mr Paul McHenry
[83] Mr Paul McHenry, Chief Operating Officer of the Respondent provided a witness statement in support of the Respondent. Mr McHenry stated that he participated in the negotiation of the 2007, 2011, 2014 and 2020 Enterprise Agreements on behalf of the Respondent. Mr McHenry stated he was present for six of the twelve enterprise bargaining meetings held to resolve the 2014 Agreement.
[84] On or around 9 October 2013, Mr Andrew Costello, Executive Manager Human Resources for the Respondent provided Mr McHenry with a logs of claims made by the Applicantfor the negotiation of the 2014 Agreement.
[85] Mr McHenry further stated that on or around 16 October 2013, Mr Wayne Reynolds, Hotel General Manager for the Respondent, Ms Blair Jacobs the then Human Resources Advisor for the Respondent and Mr Costello and Mr McHenry met to discuss the Applicant’s log of claims to formulate a response to a meeting to be held on 23 October 2013. At that meeting the group discussed:
• Claim 17 point 1 of the Applicant’s log of claims that sought that “that after 10 years of continued service full time and part time shift workers will receive 6 weeks annual leave and Hospitality and engineer full time and part time employees will receive 5 weeks annual leave for continued loyalty to the company”. Mr Costello recommended that the Reef Hotel Casino reject this claim due to the cost impact and that the current entitlement was equal to or greater than the entitlement under the relevant parent awards. Mr Reynolds and Mr McHenry agreed with Mr Costello.
• Claim 17 point 2 of the Applicant’s log of claims sought, inter alia, that “all employee receive 17.5% leave loading”. Mr Costello recommended that the Respondent reject this claim due to the cost impact and that the current entitlement was equal to or greater than the entitlement under the relevant parent Awards. Mr Reynolds and Mr McHenry agreed with Mr Costello.
[86] On 23 October 2013, a third enterprise bargaining meeting was held, where Mr Reynolds, Ms Blair Jacobs, Mr Costello and Mr McHenry met with Ms Winn and the employee representatives to negotiate the 2014 Agreement. At that meeting Mr Costello informed Ms Winn and the employee representatives that the Respondent:
• Rejected claim 17 point 1 of the Applicant’s log of claims that sought that “that after 10 years of continued service full time and part time shift workers will receive 6 weeks annual leave and Hospitality and engineer full time and part time employees will receive 5 weeks annual leave for continued loyalty to the company”. And that this was as their then entitlement was either equal to or more beneficial than the respective award entitlement and that the business was unable to justify the extra cost burden and because of operational impact that agreeing to the claim would have had on the Respondent.
• Rejected claim 17 point 2 of the Applicant’s log of claims that sought, inter alia, that “all employee receive 17.5% leave loading”. And that this was as casino employees (other than continuous shift workers) receive an extra week of annual leave in lieu of loading. Additionally, that the Respondent would consider a reversal of the annual leave arrangement by returning Casino employees to an entitlement of four (4) weeks annual leave per annum with the seventeen and a half percent (17.5%) leave loading.
[87] After the meeting of 23 October 2013, Mr Costello produced minutes. Mr McHenry recognised those minutes as Annexure “AC-2”.to his affidavit.
[88] On 6 November 2013 at the following enterprise bargaining meeting for the Agreement, those minutes were affirmed as true and correct by Ms Winn and the employee representatives. Mr McHenry had read Mr Costello’s affidavit and recognised those minutes as Annexure “AC-3” to his affidavit.
[89] During the negotiation for the 2014 Agreement, and apart from the bargaining meeting on 23 October 2013, Mr McHenry confirmed that the Applicant’s claim 17 points 1 and 2 were not discussed at any length.
[90] During the negotiation for the 2014 Agreement, Mr Costello compiled a running sheet that listed all claims and the Reef Hotel Casino’s response to those claims that was regularly updated. That running sheet affirmed that the Respondent’s response to Applicant’s log of claims, claim 17 point 1 and 2 were rejected in their entirety. Mr McHenry had read Mr Costello’s affidavit and recognised that 2014 Agreement bargaining running sheet as the one prepared on March 2014 after the last enterprise bargaining as Annexure “AC-4”.to his affidavit.
[91] Mr McHenry also read the Statement prepared by Ms Winn and rejected entirely that he or the Respondent ever came to an “understanding” that “Hospitality Services, Casino Services, Engineering Services and Hotel Services” would be classified as “continuous shift workers” for the purpose of the 2014 Agreement.
Cross examination of Sharon Winn
[92] During cross examination, the Respondent put to Ms Winn a variety of scenarios:
[93] Ms Winn’s evidence was that the union sought 17.5% annual leave loading as a claim in “every EA to get it” and the Respondent refused the claim apart from minor advancements. 29
[94] Ms Winn also gave evidence that she understood, during the negotiations of the 2011 and 2014 agreements, that the term “continuous shift worker” and the corresponding entitlement to 5 weeks annual and 17.5% annual leave loading only applied, to a very small group of employees.30
[95] Ms Winn agreed that her understanding of the outcome of the 2014 Agreement negotiation was that the Applicant’s claim for additional annual leave and leave loading was rejected. There was to be no change from the 2011 Agreement; and that was that the definition of a “continuous shift worker” and its application to clause 5.1.1. of the Agreement was that only security and surveillance, and possibly casino employees working due to a high roller, were entitled to five weeks of annual leave and 17.5% annual leave loading. 31
[96] As stated, Ms Winn also conceded that she knew that Mr Costello never agreed to expand the definition of “continuous shift worker” in the 2011 and 2014 agreements or the rejected 2017 agreement, and that Mr Costello had openly told her no, in a number of negotiations (and in “a number of languages”). 32
2017 Enterprise Agreement negotiations regarding annual leave loading
[97] Mr McHenry confirmed that on or about 2 November 2016, Mr Costello provided him with a copy of the Applicant’s log of claims for the 2017 EA. Mr McHenry recognised the Applicant’s log of claims for the 2017 Agreement as Annexure “AC-6”.
[98] Claim 7 of the Applicant’s log of claims for the 2017 Agreement claimed, amongst other matters; “17.5 % Leaving loading for all employees”.
[99] On or about 7 December 2016 Mr McHenry confirmed that Mr Reynolds, Mr Costello and Ms Jacobs met to discuss the Applicant’s log of claims to formulate their responses for the next bargaining meeting. At that meeting they discussed that Claim 7 of the Applicant’s log of claims for the 2017 Agreement and Mr Costello decided that the Respondent should reject the claim as the entitlement was equal to or more beneficial then the respective Award entitlements. The group agreed that the Respondent was unable to justify the extra cost burden and the operational impact that it would have on the business. Further it was discussed that moving new employees who were not defined as continuous shift workers, namely all others apart from those employed by security, to four (4) weeks of annual leave with seventeen and a half percent (17.5%) annual leave loading.
[100] On 14 December 2016 the group held an enterprise bargaining meeting for the 2017 Agreement where Mr McHenry met with Mr Costello, Ms Jacobs, Ms Winn and the employee representatives to negotiate the 2017 Agreement. At that meeting Mr Costello informed Ms Winn and the employee representatives that the Respondent was rejecting Claim 7 of the Applicant’s log of claims for the 2017 Agreement in its entirety.
[101] After the meeting of 14 December 2016 Mr Costello produced minutes. Mr McHenry had read Mr Costello’s affidavit and recognised those minutes as Annexure “AC-7”, to his affidavit.
[102] On 11 January 2017, at the next enterprise bargaining meeting for the 2017 EA, those minutes from 14 December 2016 were affirmed as true and correct by Ms Winn and the employee representatives. Mr McHenry had read Mr Costello’s affidavit and recognised those minutes as Annexure “AC-8”.to his affidavit.
[103] On 10 July 2017, a valid majority of employees whom the Respondent proposed to be covered by the 2017 Agreement voted to approve the Agreement. The approved 2017 Agreement varied the 2014 Agreement in that new employees who were not defined as continuous shift workers, namely all others apart from those employed by security, would be entitled to four (4) weeks of annual leave with seventeen and a half percent (17.5%) annual leave loading. The change was the deletion of clause 5.1.1.2 of the 2014 Agreement for new employees and that provision was grandfathered by existing employees.
[104] The 2011 Agreement applied the seventeen and a half percent (17.5%) annual leave loading to continuous shift workers, which was not a feature of the 2007 Agreement. Since the implementation of that Agreement, the Respondent has paid the five (5) weeks annual leave with the seventeen and a half percent (17.5%) annual leave loading to security employees working shifts over twenty four (24) hours a day and seven (7) days a week. The Respondent has not paid five (5) weeks annual leave with the seventeen and a half percent (17.5%) annual leave loading to employees not rostered to work over all of the twenty four (24) hours of a day.
[105] In this regard, a copy of the Reef Hotel Casino’s leave liability reports for September 2007, July 2011 and September 2019 are collectively annexed to this Affidavit and marked Annexure “PM-1”.
[106] Mr McHenry further confirmed that the Respondent has been paying the ordinary rate of pay as defined by clause 1.2 of the 2014 Agreement with a three percent (3%) increase for paid leave taken on a weekend day. The Respondent is not paying the weekend rates for leave taken on a weekend.
[107] Witness statements were also provided by Mr Wayne Reynolds, Hotel General Manager for the Respondent and Mr Andrew Costello, Executive Manager Human Resources for the Respondent. Both statements confirmed the submissions made by Mr McHenry in his witness statement.
FINAL SUBMISSIONS:
[108] In their final submissions, the Respondent submitted that the first question for arbitration should be considered in two parts. Firstly: does the definition of a “Continuous Shift Worker” at clause 1.2 of the Agreement include an employee who regularly works a rotating roster over 7 days a week, but who is not rostered and does not ordinarily work during each of the 24 hours of a day within a rotating roster?
[109] The Respondent submitted the second part of the question to be considered is: which rotating rosters currently rostered by the Employer would fall into the definition of a “Continuous Shift Worker” at clause 1.2 of the Agreement that would result in the payment as defined within clause 5.1.1.2 of leave loading and 5 weeks of annual leave under the Agreement? The Respondent submitted the answer to both questions must be, No.
[110] The Respondent submitted that the definition of a “continuous shift worker” in the Agreement is clear and unambiguous, and the Applicant’s suggestion that “the employee does not have to have worked at least every hour of a 24 hour period”33 is misguided.
[111] The Respondent submitted that the definition is separated into three distinct, conjunctive indicia, all of which must be satisfied for an employee to be a “continuous shift worker”:
• They are continuously rostered 24 hours a day for 7 days a week;
• And that employee is regularly rostered to work those shifts;
• And that employee regularly works on Sundays and public holidays.
[112] The Respondent further submitted, that the industrial context and purpose of subclause 5.1.1.2 of the 2014 Agreement is clear and that it is to cover an employee defined as a “continuous shift worker”, who works continuous rosters over 7 days a week, 24 hours a day, and on the current rosters these are the security employees. 34
[113] In regard to the question of which rotating rosters would fall into the category of a “continuous shift worker”, the Respondent submitted that this question does not require an answer, but if it did, a review of rosters would be required. The Respondent submitted that full timetable, gaming employees either work the night shift with a spread of hours of between 7.00 pm and 5.30 am or if they are a day worker of between 10.30 am and 8.30 pm. The Applicant submitted that these are static shift rosters for both groups and as such no employee in either distinct group are continuously rostered over twenty-four (24) hours a day.
[114] The Respondent submitted that all other casino employees do not work rosters that require them to work each of the hours in a day due to the casino’s operating hours (due to financial considerations) and can be employed between the Respondent’s operating hours of 9.00 am to 5.00 am each day of the year.
[115] The Respondent submitted that while hospitality staff are rostered over the full 24 hour period of work, no individual employee would work over that period over the course of a roster. Further, engineering services staff work a rotating roster between 7:00am and 7:00pm and are rostered to work over 12 hours.
[116] The Respondent submitted that the only rosters that require an employee to work “continuously rostered 24 hours a day for 7 days a week” are security officers and security control room employees, should fall within the definition of “Continuous Shift Worker”.
[117] The Respondent further submitted that Ms Winn admitted that she knew the industrial context and purpose of subclause 5.1.1.2 of the 2014 Agreement, both when it was expanded in the 2011 Agreement and during the 2014 Agreement negotiation, and that she and the employee group knew it was to only cover a very small number of employees at the time, which she understood to be security, surveillance and some casino employees serving high rollers from time to time. 35
[118] The Respondent submitted that as per the principles in Berri,regard may be had to evidence of surrounding circumstances to assist in determining whether an ambiguity exists, but that no ambiguity existed, nor has the Applicant identified an ambiguity. The Respondent further submitted, that even if the surrounding evidence is admitted, then it supports the Respondent’s interpretation.
[119] In the Applicant’s final submissions in reply, the Applicant rejected the Respondent’s submissions on the basis that it is practically impossible, for some of the groups of employees to work over a 24 hour period at the Respondent’s workplace. The Applicant drew attention to Mr Costello’s statement during the hearing in response to a question from Mr Santelises:
“That some group of employees, it’s practically impossible for them to be defined as working 24 hours. Is that correct?---Correct”
[120] The Applicant submitted that the material and submissions provided by the Respondent regarding previous Agreement negotiations, is not relevant or useful for the question in dispute, and rather that the question, relates to the current industrial context which has prevented a series of groups of employees from accessing the entitlements under clause 5.1.1.2 of the Agreement due to the practical impossibility of employees engaged by the Respondent in working 24 hours.
[121] The Respondent submitted that the main issue of the dispute was that a series of groups of employees of the Respondent, will never be able to meet the criteria of working every hour of the 24 hours.
CONCLUSION
[122] In Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union’ known as the Australian Manufacturing Workers Union (AMWU) v Berri Pty Limited (Berri), 36 the Full Bench summarised the approach to be adopted with respect to the interpretation of enterprise agreements, as set out:
“[114] The principles relevant to the task of construing a single enterprise agreement may be summarised as follows:
1. The construction of an enterprise agreement, like that of a statute or contract, begins with a consideration of the ordinary meaning of the relevant words. The resolution of a disputed construction of an agreement will turn on the language of the agreement having regard to its context and purpose. Context might appear from:
(i) the text of the agreement viewed as a whole;
(ii) the disputed provision’s place and arrangement in the agreement;
(iii) the legislative context under which the agreement was made and in which it operates.
2. The task of interpreting an agreement does not involve rewriting the agreement to achieve what might be regarded as a fair or just outcome. The task is always one of interpreting the agreement produced by parties.
3. The common intention of the parties is sought to be identified objectively, that is by reference to that which a reasonable person would understand by the language the parties have used to express their agreement, without regard to the subjective intentions or expectations of the parties.
4. The fact that the instrument being construed is an enterprise agreement made pursuant to Part 2-4 of the FW Act is itself an important contextual consideration. It may be inferred that such agreements are intended to establish binding obligations.
5. The FW Act does not speak in terms of the ‘parties’ to enterprise agreements made pursuant to Part 2-4 agreements, rather it refers to the persons and organisations who are ‘covered by’ such agreements. Relevantly s.172(2)(a) provides that an employer may make an enterprise agreement ‘with the employees who are employed at the time the agreement is made and who will be covered by the agreement’. Section 182(1) provides that an agreement is ‘made’ if the employees to be covered by the agreement ‘have been asked to approve the agreement and a majority of those employees who cast a valid vote approve the agreement’. This is so because an enterprise agreement is ‘made’ when a majority of the employees asked to approve the agreement cast a valid vote to approve the agreement.
6. Enterprise agreements are not instruments to which the Acts Interpretation Act 1901 (Cth) applies, however the modes of textual analysis developed in the general law may assist in the interpretation of enterprise agreements. An overly technical approach to interpretation should be avoided and consequently some general principles of statutory construction may have less force in the context of construing an enterprise agreement.
7. In construing an enterprise agreement it is first necessary to determine whether an agreement has a plain meaning or it is ambiguous or susceptible of more than one meaning.
8. Regard may be had to evidence of surrounding circumstances to assist in determining whether an ambiguity exists.
9. If the agreement has a plain meaning, evidence of the surrounding circumstances will not be admitted to contradict the plain language of the agreement.
10. If the language of the agreement is ambiguous or susceptible of more than one meaning then evidence of the surrounding circumstance will be admissible to aide the interpretation of the agreement.
11. The admissibility of evidence of the surrounding circumstances is limited to evidence tending to establish objective background facts which were known to both parties which inform and the subject matter of the agreement. Evidence of such objective facts is to be distinguished from evidence of the subjective intentions of the parties, such as statements and actions of the parties which are reflective of their actual intentions and expectations.
12. Evidence of objective background facts will include:
(i) evidence of prior negotiations to the extent that the negotiations tend to establish objective background facts known to all parties and the subject matter of the agreement;
(ii) notorious facts of which knowledge is to be presumed; and
(iii) evidence of matters in common contemplation and constituting a common assumption.
13. The diversity of interests involved in the negotiation and making of enterprise agreements (see point 4 above) warrants the adoption of a cautious approach to the admission and reliance upon the evidence of prior negotiations and the positions advanced during the negotiation process. Evidence as to what the employees covered by the agreement were told (either during the course of the negotiations or pursuant to s.180(5) of the FW Act) may be of more assistance than evidence of the bargaining positions taken by the employer or a bargaining representative during the negotiation of the agreement.
14. Admissible extrinsic material may be used to aid the interpretation of a provision in an enterprise agreement with a disputed meaning, but it cannot be used to disregard or rewrite the provision in order to give effect to an externally derived conception of what the parties’ intention or purpose was.
15. In the industrial context it has been accepted that, in some circumstances, subsequent conduct may be relevant to the interpretation of an industrial instrument. But such post-agreement conduct must be such as to show that there has been a meeting of minds, a consensus. Post-agreement conduct which amounts to little more than the absence of a complaint or common inadvertence is insufficient to establish a common understanding.”
Does the Agreement have a plain meaning or it is ambiguous or susceptible of more than one meaning?
[123] As noted above, the relevant clause of the Agreement for interpretation and arbitration is clause 1.2 which reads:
“‘Continuous Shift Worker’ means an Employee whose shifts are continuously rostered 24 hours a day for 7 days a week; and is regularly rostered to work those shifts; and regularly works on Sundays and public holidays.”
[124] I do not consider the Agreement is ambiguous or susceptible to more than one meaning. The definition of a continuous shift worker is plain.
[125] I accept the Respondent’s argument that the distinction in the Agreement between the annual leave entitlements clearly reflects the intention of the parties. The further fact that the definition has remained the same since 2007 despite frequently being raised in negotiations by the Applicant points to the clause being clear and unambiguous. The fact the clause is an ongoing point of contention between parties where the Applicant considers that casino staff should be entitled to further leave and the Respondent refuses to accept this claim in negotiations does not make it ambiguous.
Question A
Does the definition of a “Continuous Shift Worker” at clause 1.2 of the Agreement include an employee who regularly works a rotating roster over seven (7) days a week, but who is not rostered and does not ordinarily work during each of the twenty-four (24) hours of a day within a rotating roster? And if so, which rotating rosters currently rostered by the Employer would fall into the definition of a “Continuous Shift Worker” at clause 1.2 of the Agreement that would result in the payment as defined within clause 5.1.1.2 of leave loading and the fifth (5th) week of annual leave under the Agreement?
[126] If I am wrong in the above finding, it is necessary to consider this question in light of the principles in Berri, having regard to the evidence of the surrounding circumstances.
[127] The existence of clause 4.5.6 indicates an intention that there was intended to be a distinction between a continuous shift worker and other shift workers or workers working on a rotating roster. Clause 4.5.6 reads:
“Roster Acknowledgement
Where practical, rosters are designed to meet the operational requirements and to ensure fair and equitable distribution of weekend work and/or penalty shifts amongst full time and part time employees within specific departments.
The Employer may require an Employee to work rotating shift patterns that include weekends, late nights and the calculated public holidays, provided that the request to work such public holidays is reasonable.
Unless the Employee has requested a roster for their own personal requirements that includes significant work on weekends, and late nights then the Employer will roster Employees in a manner that is both fair and equitable to ensure that the allocation of weekend and public holiday hours are where possible equally divided between Employees on a rotating basis.”
[128] Some workers (primarily casino staff) will not be eligible or capable of meeting the requirements of a continuous shift worker. I do not consider this indicates that there is any ambiguity or inconsistency with the clause.
[129] On the evidence and in accordance with the definition of continuous shiftwork in the Agreement; only those employees that are being continuously rostered over 24 hours a day (that is, only the security staff) are considered to be continuous shift workers. Only those security staff employees therefore would be entitled to a payment of the leave loading and the fifth week of annual leave under the Agreement.
[130] The answer to the first part of this question is therefore, No.
[131] If I am wrong on this point, it is necessary to consider the second part of the question regarding which rotating rosters qualify for the definition of a continuous shift worker.
[132] For the reasons as set out, only security and surveillance staff qualify, and that the remaining rosters do not qualify. The fact that the casino does not open 24 hours a day is a business decision the Respondent is entitled to make. The fact that this prevents staff from working 24-hour shifts is not relevant.
Question B
Does the “Ordinary Rate Of Pay” as defined by clause 1.2 of the Agreement require the Employer to pay over-Agreement weekend rates of pay to employees when they take leave (annual, personal or long service leave) on those weekend days?
[133] The answer to question B is No. Whilst there was more limited evidence in relation to this matter, all Annual Leave in accordance with clause 5.1.1.2 for continuous shift workers is payable at the ‘ordinary rate of pay’ as it was set out in the submissions of the Respondent in this Decision. These submissions detailed the use and development of the term ‘ordinary rate of pay’ in the Agreements. The term ‘ordinary rate of pay’, as applicable, is confirmed in the submissions, as summarised in paragraph [72] to [75] of this Decision. It is noted that where current wage rates in accordance with that definition, as set out have been increased and used in payment in accordance with this ‘ordinary rate of pay’ definition, then it is noted that there is no requirement for the employer to pay the over Agreement increased wage rates. However, it would be improper for the employer, without notification and explanation, (to continuous shiftworker employees) to roll the rates (as relevant to the application of the ordinary rate of pay definition) back.
[134] The answers to the questions are set out above. I Order accordingly.
COMMISSIONER
Printed by authority of the Commonwealth Government Printer
<PR720834>
1 [2017] FWCFB 3005.
2 [2002] FCA 31 at [28]
3 [2008] FCA 1512 at [82]
4 Ibid.
5 Transcript of proceedings at paragraph PN163.
6 Australian Manufacturing Workers Union (AMWU) v Berri Pty Limited[2017] FWCFB 3005 at 114.
7 [2017] FWCFB 3005.
8 [2013] FWCFB 2814.
9 (2005) 222 CLR 241 at 246 [2].
10 Ibid at 262 [67].
11 (1996) 66 IR 182 at 184.
12 See Codelfa Construction Pty Ltd v State Rail Authority of NSW (1982) 149 CLR 337 at 352 per Mason J and BP Australia Pty Ltd v Nyran Pty Ltd (2003) 198 ALR 442 at 453 [34], which was applied to the interpretation of collective industrial agreements in Community and Public Sector Union v Telstra Corporation Ltd (2005) 139 IR 141 at 152 [38].
13 (2004) 219 CLR 165 at 179 [40].
14 [2011] FWA 8288 at [21]; see also Van Efferen v CMA Corporation Limited (2009) 183 IR 319 at [37].
15 [1982] HCA 24
16 [2003] FCA 834
17 [2014] FCCA 2717.
18 [2015] FWC 2461
19 Transcript of proceedings at paragraphs PN1099 to PN1106.
20 Transcript of proceedings at paragraphs PN1117 tp PN1118.
21 Transcript of hearing of 14 November 2019 at PN621-623
22 Transcript paragraphs at PN659-663
23 Ibid at PN650-665
24 Ibid at PN694-698
25 Ibid at PN586
26 Subdivision A of Division 7 of Part 2-2 of the Fair Work Act 2009.
27 Subdivision A of Division 7 of Part 2-2 of the Fair Work Act 2009.
28 178 CLR 1 at 5.
29 Transcript of hearing of 14 November 2019 at PN621-623
30 Transcript paragraphs at PN659-663
31 Ibid at PN650-665
32 Ibid at PN694-698
33 Applicant’s Outline of Submissions dated 17 February 2020 at [9]
34 Respondent’s Outline of Final Submissions dated 24 March 2020 at [49]
35 Respondent’s Outline of Final Submissions dated 24 March 2020 at [50]
36 [2017] FWCFB 3005.
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