Australian Workers' Union v Manildra Harwood Sugars T/A Sunshine Sugar

[2020] FWC 5064

[2020] FWC 5064

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.739—Dispute resolution

Australian Workers’ Union
v
Manildra Harwood Sugars T/A Sunshine Sugar
(C2019/4912)

DEPUTY PRESIDENT BULL SYDNEY, 16 OCTOBER 2020

Alleged dispute about any matters arising under the enterprise agreement and the NES;[s186(6)]. Interpretation of Shift Work clauses as to their meaning and effect.

[1] In this matter, the Australian Workers’ Union (AWU) has made an application pursuant to s.739 of the Fair Work Act 2009 (the Act) for the Commission to deal with a dispute in accordance with the Grievance Settling and Dispute Avoidance Procedure (dispute procedure) set out at clause 33 of the Sunshine Sugar Enterprise Agreement 2017 (the Agreement). The respondent to the dispute is Manildra Hardwood Sugars T/A Sunshine Sugar which is named as a party to the Agreement together with the AWU as per clause 3 - Parties Bound.

[2] Sections 738 and 739 of the Act authorise the Fair Work Commission (Commission) to arbitrate a dispute in accordance with a term of a dispute settlement procedure in an enterprise agreement. Subclause 33.1 of the Agreement provides that the dispute procedure applies to any matter between the parties about the Agreement. Step 5 of subclause 33.3 – Procedure - provides that following conciliation, where the dispute remains unresolved any party may refer the matter to the Commission for arbitration.

[3] There is no issue that the dispute between the parties is a matter between the parties about the Agreement. As such it can be the subject of arbitration before the Commission where the Commission has first attempted by conciliation, to resolve the dispute.

[4] The matter in dispute was subject of conciliation before the Commission on:

•  16 August 2019,

•  27 November 2019,

•  11 March 2020 and

•  27 May 2020.

[5] The outstanding dispute between the parties concerns the meaning and application of certain sub clauses of clause 17 Shift Work of the Agreement. The meaning and application of sub clauses:

•  17.1 - Notices of Changes and

•  17.5 - Relief Cover for Absence at 17.5(a) - Harwood, Murwillumbah Retail and Condong Process

have not been agreed upon by the parties.

[6] Mr Tom Craven, Legal Officer appeared for the AWU and Mr Tim Capelin a Solicitor appeared with leave 1 on behalf of Manildra.

Background

[7] Sunshine Sugar owns and operates sugar cane mills at Broadwater, Harwood and Condong, situated respectively in the Richmond, Clarence and Tweed Valleys of New South Wales. The Manildra Group have a 50% ownership of Sunshine Sugar milling operations. Sunshine Sugar’s raw sugar mills have two separate operating seasons. The crushing season, June to December, and the maintenance season, which commences at the end of the crushing season when maintenance of the mills is undertaken in preparation for the forthcoming crushing season. 2

[8] On the week commencing Sunday 4 August 2019, two employees advised the employer that they would be absent from work. One employee advised he would be absent on the night shift on Sunday, Monday and Tuesday for bereavement purposes. The second employee gave notice that he would be absent on the Wednesday 7 August 2019.

[9] Following the notification of these absences, the employer varied the relevant roster of the affected shift group which, in the AWU’s submission was done in a manner contrary to the terms of the Agreement.

[10] It is thus necessary to set out the relevant Agreement terms found at clause 17 Shift Work, said by the AWU not to have been complied with by the employer in August 2019:

“17.1 NOTICES OF CHANGES

It may be necessary to change an employee from one roster to another roster for various reasons. A Shift Worker required to change rosters will be given 7 days’ notice of such a change. If 7 days’ notice is not given, then the first shift worked in the new roster will be at normal overtime rates.

It may be necessary to change an employee from one Shift to another Shift during the roster cycle for various reasons. A Shift Worker required to change Shifts will be given 7 days’ notice of such a change. If 7 days’ notice is not given, then the first Shift worked in the new Roster position will be at normal overtime rates.

Subject to at least 48 hours of notice, shift work employees may be transferred from ordinary shift work to ordinary day work when operations cease for any reason, such as wet weather or mechanical breakdown, and from ordinary day work to ordinary shift work when operations recommence. Where 48 hours’ notice is not provided employees will be paid at overtime rates for the first shift worked after such change.

Where an employee is transferred from shift work to day work in accordance with this provision they shall, for the remainder of the week in which such transfer occurs, continue to be paid at the classification rate of wages payable to them whilst on shift work, excluding shift allowances.

Where the commencement or cessation of the continuous roster, such as for the crushing season, results in an employee working less than the required hours for the week, work will be made available to make up the required ordinary time.

17.5 RELIEF COVER FOR ABSENCE

a) Harwood, Murwillumbah Retail and Condong Process.

When unable to attend work an employee will inform their supervisor as soon as reasonable.

Reliable relief cover must be provided from within the shift group in the first instance.

In circumstances where cover cannot be provided by people who are on “days off” then a shift swap may be required. The shift worker required to make the shift swap will be paid at 200% per hour and will also be paid an additional payment of 8 hours for rest break at ordinary time, inclusive of the shift penalty for normal rostered shift missed.

In the event that no employee from the shift work-group is available to provide relief cover then an employee from outside the shift group may be engaged, provided that the employee is appropriately trained and has the skills to perform the role.

For long term absences relief cover will be arranged by the employer in consultation with the relevant shift group.”

[11] In the circumstances described above, the employer relied upon clause 17.1 in making arrangements to cover the proposed absences of both employees. The AWU submit that in the circumstances set out above, relief cover for employee absences must first be sought from the relevant shift group. If this cannot be achieved, a shift swap should be implemented and, if this is not possible, an employee from another shift group can be engaged to cover the absence.

The dispute to be determined

[12] The AWU formulated the question to be arbitrated (to which the employer agreed) as being:

Where an employee is absent from work within a location noted in subclause 17.5(a) of the Agreement and is replaced:

In what circumstances does clause 17.5(a) of the Agreement apply and in what circumstances does clause 17.1 of the Agreement or any other clause, apply?

If clause 17.5(a) of the Agreement applies, how is it to operate so that any relief cover is correctly selected?

Submissions and evidence of the AWU

[13] The AWU provided written submissions and relied on the evidence of Mr Steven Carter an AWU organiser, and Manildra employees Andrew Nott, Robert Woods, and Scott Tabor.

[14] The AWU submitted that the absence of both employees in the week beginning 4 August 2019 was an unplanned absence that required relief cover for their shifts. The appropriate manner in which to provide relief cover was under sub clause 17.5(a) being the appropriate and only Agreement provision to cater for unplanned absences.

[15] It is put that sub clause 17.5(a) has a plain and ordinary meaning that grants an entitlement and benefit to shift workers engaged at the nominated sites of the employer.

[16] To not give the words of sub clause 17.5(a) their practical meaning would be to remove the benefit the clause provides employees consistent with the intention of the parties when the Agreement was made.

[17] It is submitted by the AWU that on the plain words of sub clause 17.5(a) when a shift worker is absent from work on an unplanned absence that requires relief cover, other shift workers within the shift group receive first priority at covering the absence by either agreeing to cover the shift or agreeing to do a shift swap if necessary. Where a shift swap is involved the employees are entitled to a higher rate of pay for the hours worked.

[18] It is put that that it is only after the above steps have been taken that the employer can utilise appropriate trained employees from outside the shift group. If the above process is not followed the result is that the words of sub clause 17.5(a) are wholly ignored.

[19] The AWU contend that it is not possible for the employer, in an attempt to minimise operational costs by reducing overtime, to rely on another provision of the Agreement to provide relief coverage. 3 The employer must comply with the terms of the Agreement irrespective of whether it is satisfied with the outcome.

[20] In support of the AWU’s contention, reference is made to the original ‘Relief for Absence Process’ contained in earlier enterprise agreements. It was put that the source for the ‘Relief for Absence Process’ was a series of written agreements between the AWU and the employer made in the early 1990s when 12 hour continuous shift work was first introduced. 4

[21] The AWU submit that sub clause 17.5(a) is entirely derived from the historic ‘Relief for Absence Process’ found annexed to earlier enterprise agreements. The application of sub clause 17.5(a), as proposed by the AWU, is consistent with the history of how it has been interpreted and applied and the intention of the parties. In the AWU’s submission, to accept the employer’s interpretation is to make sub clause 17.5(a) a redundant and meaningless provision. 5 It is submitted that sub clause 17.5(a) preserves a long-standing practice and entitlement for employees at the Harwood Refinery to cover unplanned absences from among the shift group where the absence has originated.

[22] It is finally put that the employer’s concern with the cost of applying sub clause 17.5(a) is not a matter that can be considered in interpreting the clause. In any event the additional cost is only incurred where the first steps for absence relief have been exhausted and a shift swap is required, which has been a feature of the sub clause since its implementation in 1993. 6

[23] At the hearing the AWU further submitted that sub clause 17.5(a) is a specific provision that should prevail over the more general provisions of sub clause 17.1.

Evidence of Mr Steven Carter

[24] Mr Steven Carter, an AWU organiser, provided a witness statement 7 and traversed the history of the dispute and his attempts to have the matter resolved with the employer. Mr Carter provided his understanding of the operation of sub clauses 17.1 and 17.5(a) of the Agreement which was consistent with the submissions of the AWU. Mr Carter stated that, in January 2018, a similar dispute arose on site which was referred to the Commission and an in-principle agreement was reached in early April 2018.8

[25] Mr Carter stated that he understood sub clause 17.1 was predominantly applied for the adjustment period of employees transferring from day work to shift work and vice versa at the commencement and completion of the crushing season, it was also implemented when new rosters are introduced. 9

Evidence of Mr Andrew Nott

[26] Mr Andrew Nott is employed as a Clarification Attendant at the Harwood refinery. He has occupied this position since 2000 and is covered by the Agreement. Mr Nott has also been an AWU delegate since 2014 and is a member of the bargaining team when negotiating enterprise agreements on site.

[27] Mr Nott stated that there was a specific process for the relief of absences within a shift group. A shift group being employees who are rostered on the same workstation. The refinery incorporates six workstations the:

•  Pan Floor,

•  Clarification,

•  Fugals,

•  Retail,

•  Bulk Packing Floor, and

•  Raw Sugar Shed.

Each different workstation is considered a shift group.

[28] Mr Nott’s evidence was that the ‘Relief for Absence Process’ evolved from agreement reached with the introduction of a trial 12 hour shift roster in the early 1990s and has subsequently become part of negotiated enterprise agreements.

[29] In January 2018, a dispute arose with the employer over relief for absences, with the employer wishing to rely upon sub clause 17.1 to cover unplanned absences which include personal/carer’s, bereavement, compassionate, domestic violence, leave etc. 10 Mr Nott stated that during his employment, he had only ever been aware of sub clause 17.1 being applied to periods of transition of the crush and non-crush, roster changes and for other scenarios where employees change their shift pattern on an ongoing basis.11

[30] In respect of the absences that led to the current dispute, Mr Nott stated that the first employee’s absence was covered in accordance with sub clause 17.5(a), however the remaining absented shifts were covered by the employer applying sub clause 17.1. The second employee’s shift was covered by a shift swap.

[31] Mr Nott’s evidence was that he sent an email to the Refinery and Packing Floor Supervisor on 1 August 2019, raising his concerns regarding the change to the practice of covering such absences. Mr Neale Whitby, the Refinery and Packing Floor Supervisor, replied stating it was his decision to make the roster changes and that he had been instructed to minimise operational costs wherever possible and that overtime was a major cost to the business and that it benefits everyone if overtime can be minimised.

[32] Mr Whitby further stated in his reply that the Agreement covers the scenario where the employer cannot provide seven days’ notice of a change of shift or roster and the appropriate penalties will then be paid. Mr Whitby stated that he did not believe a vertical movement within a shift to cover positions was a breach of the Agreement. 12

Evidence of Mr Robert Woods

[33] Mr Robert Woods stated he had worked at the employer’s Harwood site since 1992. He was currently employed as an Assistant Steam Operator in the Boiler Room on a 12 hour continuous shift work roster. Mr Wood is an AWU delegate.

[34] Mr Woods stated that on the 8 hour shift work roster an absence would be covered by the employee on shift remaining back for four hours and the oncoming employee coming in four hours early, all being paid at overtime rates. 13

[35] Mr Woods stated that when replacing an absent employee, if they are sick or on a similar unplanned absence, the employer has always defined the Shift Group as the group of employees who are rostered on the workstation where the absence exists. The relief shift is always offered to employees rostered on the workstation who are on days off. Mr Woods stated this had been the practice for all 12 hour shift work patterns that he had worked over the last 28 years. If employees on days off cannot cover the shift absence, the shift is then offered to other employees rostered on other workstations who have the appropriate qualifications and they are paid at overtime rates.

[36] Mr Woods stated that it was rare in the Mill’s 12 hour/4 day shift roster that shift swaps were required as there are more rostered employees in each workstation who are on days off to cover the absence. 14

Evidence of Mr Scott Tabor

[37] Mr Scott Tabor who has been employed on the ‘Day Gang’ since 2008 also gave evidence on behalf of the AWU but was not required for cross examination. Mr Tabor was an AWU site delegate and had been part of the negotiating team who negotiated and participated in the 12 hour shift roster trial. 15

[38] Mr Tabor stated that on an 8 hour shift roster where an afternoon shift employee was absent, the day shift employee would work back four hours and the nightshift employee would come in four hours early with both employees receiving payment of four hours overtime to cover the absence.

[39] Once the 12 hour shift roster was agreed, employees on days off who were performing the same job at the same workstation as the absent employee would have to cover for absences. 16

[40] Mr Tabor stated that it was his understanding that where this could not be facilitated, the coverage would be offered to any other appropriately trained 12 hour shift worker on days off. Only where these two steps could not be implemented was a shift swap explored as a last resort. 17

[41] Mr Tabor stated that if vertical cover was ever used, its use was rare and temporary, such as to cover long-term absences in accordance with the Relief for Absence process or if used to cover short-term absences it was only after the Relief for Absence process had been exhausted. 18

Submissions and evidence of Manildra

[42] Manildra submitted that where an employee absence occurs and the absence needs to be replaced, (which is not always the case), it may use:

•  vertical cover 19 or

•  request an employee to work an overtime shift or

•  a shift or roster change may be utilised or

•  a shift swap may be utilised 20

[43] It is submitted that, where any of the above alternatives are utilised, they are permitted under the Agreement. It is put that the Agreement allows the employer to move employees between rosters or between shifts, as required, but where insufficient notice is provided overtime rates must be paid for first shift of the new roster as per sub clause 17.1. It is said that sub clause 17.5(a) indicates how a shift swap is to be paid when it is required. 21

[44] It is put that there is no compulsion under the Agreement for the employer to cover an absence, nor does the Agreement mandate that any particular form of coverage must be utilised.

[45] It is submitted that sub clause 17.1 applies when the employer chooses to cover an absence in a way specified under that sub clause utilising a roster change or shift change. It does not preclude the employer from utilising any other method of shift coverage as specified in sub clause 17.1. 22

[46] It is submitted that sub clause 17.5(a) applies where the employer makes a decision to cover an absence in a way specified under that sub clause. It is put that sub clause 17.5(a) does not exclude any other available method of shift coverage.

[47] The employer contends that the Agreement sub clauses in dispute are not ambiguous as to their meaning and application and there is no requirement to have regard to any extraneous material. Having regard to the plain words of sub clause 17.5(a) it is not possible to read into this sub clause, a staged process by which the employer must seek coverage when an employee is absent. 23

[48] It is further put that the AWU’s characterisation of the ‘shift group’ is not supported on either the wording of the current sub clause 17.5(a), any other part of the Agreement or the historical industrial context including wording of the 1993 Trial 12 Hour Shift Arrangement. 24

[49] Where sub clause 17.5(a) states that relief cover ‘must be provided’ from within the shift group in the first instance this mandates that employees within the relevant shift group are responsible to provide relief cover. The sub clause does not state that the employer must obtain and seek out relief cover by offering relief work to employees within a specific group. The industrial history supports the view that the onus is on employees in a shift group to be responsible for covering absences of their co-workers. 25

[50] Coverage of an absence is said not to be dependent upon the length of the proposed absence. While sub clause 17.5(a) makes reference to long-term absence relief cover being arranged by the employer in consultation with the relevant shift group, this is said to support the overarching premise that the discretion to obtain relief cover lies with the employer. 26

[51] Where reference is made in sub clause 17.5(a) to “circumstances where cover cannot be provided by people who are on ‘days off’ then a shift swap may be required” this is said to merely prescribe the penalty payable to the employee should this occur. In the event that the employer covers an absence by way of a shift swap the relevant paragraph goes on to prescribe the payment to be made in the circumstances.

[52] Manildra submitted that their interpretation of the relevant sub clauses is consistent with its practice of having used alternative means of cover previously and having upskilled its employees so they can provide relief in higher classifications through working overtime shifts and/or providing vertical cover in the event of absences.

[53] It is put that the employer is not bound to utilise sub clause 17.5(a) to the exclusion of any alternative means of providing relief for absences. Whether the employer has previously utilised sub clause 17.5(a) does not establish that such a practice reflects the intent of the provisions of the Agreement.

[54] Manildra accept that subclause 17.5(a) preserves the relief for absence principles established by the 1993 Trial 12 Hour Shift Agreement. However, the employer does not agree with the AWU’s summary of those principles. The employer submits that the 12 hour shift system was introduced in 1993 as a trial, which formed the basis of what would eventually form sub clauses 17.1, 17.4 and 17.5(a) of the Agreement. It is said that the industrial history of the Agreement supports the view that clause 17 - Shift Work has a protective function in ensuring that the employer has the necessary relief for cover, rather than being intended to confer any entitlement or benefit on employees. 27

[55] Reference is made to sub clause 17.4 of the Agreement. 12 Hour Shift Arrangements which states, amongst other things that implementation of a 12 hour continuous or non- continuous shift roster must be at no extra cost to the employer relative to an 8 hour shift roster.

[56] Manildra submit that the AWU interpretation is inconsistent with the industrial history of clause 17 as it compromises the employer’s capacity to source relief by confining the group from which relief can be sought and by mandating that cover be secured using a shift swap or some other linear process which imposes a cost on the employer exceeding other alternative methods of securing relief coverage.

[57] Evidence was given by a number of employees on behalf of Manildra.

Evidence of Mr Matthew Clarke

[58] Matthew Clarke is the Production Manager in the Sunshine Sugar Mill at Harwood. Mr Clarke’s evidence was that employees initially approached the employer requesting to implement a 12 hour shift as employees would work less days per week. In 1993, a trial 12 hour roster system in relation to the Harwood Refinery commenced. The trial was undertaken on the basis of there being no extra cost to the employer and that there would be proper coverage of shifts in the event of absences. Mr Clarke stated that there was never any intention to provide employees with an overtime incentive in the case of an employee suffering personal illness, nor was it intended to limit ways in which the employer could lessen the financial costs of covering absences.

[59] Mr Clarke was of the view that a shift group is not limited to individual areas or stations of work and that the employer has never held this view. When shift workers are employed, they are told they are required to be available to cover other shift workers due to the nature of the 12 hour arrangement, including working across various areas of the business where they are competent and have the skills to do so.

[60] Mr Clarke stated that he was unaware of there ever being a distinction between different types of absences that may necessitate using the shift swap mechanism over any other way of covering a shift absence. The employer has always looked to cover all absences in the most efficient and effective way possible. For example, if an employee in the Pans Area was sick on their Thursday day shift, then consistent with sub clause 17.5(a) the employer may ask another employee who was also doing a Thursday day shift in another area e.g. the Clarifications Area to move to the Pans Area. In turn, to cover the employee working in the Clarifications Area, a person working in the Fugal Area on a Thursday day shift may be asked to work in the Clarifications Area, this is known as ‘vertical cover’. 28

[61] Vertical cover can be utilised as the employer ensures its employees across departments are suitably skilled to carry out work in different areas consistent with what employees are told on their appointment.

[62] A Shift Supervisor may call an employee on their day off to cover an absence if they are suitably trained and competent and they would then receive overtime penalties but not the shift swap penalty under sub clause 17.5(a). An employee may be asked to come in on their rostered day off to do overtime. This is usually done prior to implementing vertical cover, but it is not a compulsory step under the Agreement.

[63] Any employee suitably trained and competent to cover an absence can be called in on their day off to cover an employee’s absence because they are all part of the same shift group and are expected to be able to cover another shift worker’s absence. Mr Clarke stated that the intention of sub clause 17.5(a) was to set expectations for employees about how they could be expected to cover shifts when another employee was absent from work.

[64] Mr Clarke stated that vertical cover means that there may not be any overtime penalties associated with such coverage, and that vertical cover was administratively less onerous. A shift swap pursuant to sub clause 17.5(a) results in a financial burden to the employer as employees must be paid at double time for the swap plus an additional eight hour rest break at ordinary time. 29 For this reason, wherever the employer has the ability to utilise sub clause 17.1 it has done so.

[65] Mr Clarke stated that, given the intention of the 12 hour roster was not to incur further costs, a compulsion to use sub clause 17.5(a) would be inconsistent with the cost saving intention.

Evidence of Mr Ian McBean

[66] Ian McBean also gave evidence on behalf of the employer. Mr McBean was the General Manager from 2015 until April 2018 when he ceased work for the employer.

[67] Mr McBean’s evidence was that he was involved in the negotiation of both the Sunshine Sugar Enterprise Agreement 2015 – 2017 and the Sunshine Sugar Enterprise Agreement 2017. Mr McBean stated that the Sunshine Sugar Enterprise Agreement 2011 which preceded the 2015 Agreement was 99 pages in length, including appendices. Due to its volume, the employer determined that a process of standardisation was required which would result in one standalone document, this was the intent of the 2015 and 2017 enterprise agreement negotiations. 30

[68] Mr McBean stated that the, 12 Hour Trial Agreement in 1993 remained on foot during the 2015 Agreement negotiations. The 12 hour shift roster was introduced because employees wanted to work 12 hour shifts rather than 8 hour shifts. It was never intended that the 12 hour roster would impose additional costs on the employer. The trial was contingent upon employees ensuring that in the first instance, they were to arrange cover amongst themselves. This required employees to be available to cover absences which arose in any roster group of the 12 hour shift employees.

[69] Mr McBean’s evidence also supported the understanding of how vertical cover operates to provide cover within a roster group on a given shift consistent with the understanding provided by Mr Clarke.

[70] Mr McBean stated that different workstations do not constitute separate shift groups. A shift group referred to in the Agreement describes a group of shift workers at the Harwood site working 12 hour continuous shifts. 31 Vertical Cover is used because the stations in the refinery are physically stacked one on top of the other, such that cover is provided by an employee walking up or down the stairs to a station below or above the operator’s ordinary station.32 Vertical cover is a more cost effective and simpler method of covering absences. It does not involve the time-consuming process of contacting competent employees from the shift groups who are not rostered to work at the given time in an attempt to ascertain who will be available at the time of the shift for which relief is sought.33

[71] Vertical cover also provides employees with an opportunity to develop their skills and assist the employer in succession and contingency planning. Further, vertical cover does not have the effect of causing absences in successive shifts, as are created by a shift swap.

[72] While sub clause 17.1 is utilised in the event of a change in rosters at the end of the crush and non-crush seasons and also where there are adverse weather conditions or a breakdown of machinery, the employer has never taken the view that the sub clause is confined to these circumstances only. 34

[73] Mr McBean stated that sub clause 17.1 deals with two discrete circumstances where relief cover can be provided.

[74] In the first circumstance the employer can change an employee from one roster to another and is then required to pay overtime rates for the first shift worked in the new roster if the employee is not given seven days’ notice of the roster change.

[75] Secondly, an employee can be moved from one shift to another during the roster cycle and the employee is required to pay overtime rates for the first shift worked in the new roster position if seven days’ notice of the change has not been provided.

[76] Under sub clause 17.5(a), a shift swap may also occur where an employee is moved from one rostered shift to another shift within their ordinary roster. This usually occurs where it is not possible to have vertical cover or to call someone in on the rostered day off.

[77] Mr McBean stated that shift swaps pursuant to sub clause 17.5(a) of the Agreement are a less attractive means of covering absences because of the cost involved. They are also more time-consuming for supervisors and result in further absences because employees who provide relief must then be relieved from the shift which they were originally rostered to perform.

[78] Mr McBean stated that all shift workers who work a 12 hour roster at the site are required to be available to provide relief in the event of an absence of any one of their colleagues. Mr McBean’s evidence was that this practice existed when he was the General Manager. 35

[79] Mr McBean stated that this interpretation was consistent with the employer’s decision to enter into the 12 Hour Roster Trial Agreement in 1993. Further (unlike under an 8 hour shift roster) employees cannot work double shifts when on a 12 hour roster and there are fewer employees under 12 hour roster resulting in fewer employees available in the pool to provide cover. 36

Evidence of Mr Stephen King

[80] Stephen King, an ex-employee who held the position of Operations Manager at the Harwood site until his resignation in 2017, also provided evidence on behalf of the employer.

[81] Mr King commenced in 1989 as a Shift Superintendent at the Harwood Mill until becoming the Operations Manager in 2015. Mr King outlined his understanding of the history of the 12 hour shift roster, in that it was introduced at the request of employees and entered into on the basis that there would be no additional cost to the employer. Mr King stated that the employer’s primary concern, in addition to the change being cost neutral, was to ensure that reliable relief cover was available to cover absences from among employees also performing 12 hour shifts. 37

[82] Mr King stated that with the 8 hour shift model coverage can be arranged on the previous and subsequent shift by working an extra four hours, whereas with the 12 hour shift, employees are more inclined to be unavailable on their days off and it is far more difficult to cover absences because employees are not able to work if they have just finished or are about to commence a 12 hour shift. 38

[83] Vertical cover is used to cover shift absences and at the same time minimise costs associated with overtime caused by the absence. Employees already working on a particular shift can be asked to move from one area to another area of the business. Mr King stated that the definition of shift group extended to any other suitably trained shift worker in the refinery. In Mr King’s experience shift swaps were avoided where possible by the employer, as they involve additional overtime costs.

[84] With a shift swap, a 12 hour shift employee does an overtime shift and by doing so is unable to take an 8 hour break before resuming their normal shift and is then paid at 200% per hour and also paid an additional payment of 8 hours for a rest break at ordinary time. Due to a potential cascading effect, more employees may be required to perform shift swaps, resulting in a potential for excessive amounts of overtime which can be avoided by utilising other coverage methods. 39 Mr King expressed the view that the employer position was that shift swaps were at the prerogative of management and are not mandated.40

Evidence of Mr David Wood

[85] David Wood is the current General Manager Operations of all Sunshine Sugar sites. Mr Wood first commenced employment with Sunshine Sugar in 1995 and was appointed to the General Manager role in March 2019. Mr Wood’s evidence was that Sunshine Sugar is a partnership formed from a merger between New South Wales Sugar Milling Co-Operative and the Manildra Group in June 2015.

[86] In examining the wording of clause 17 - Shift Work of the Agreement, Mr Wood stated that a ‘roster change’ under sub clause 17.1 occurs when a shift worker is moved from one roster to another which could be consistent with the roster of another roster group or a new roster. The reference to a ‘shift change’ under sub clause 17.1 is where a shift worker moves from one shift to another in a different roster group.

[87] The roster most commonly worked at the Harwood Refinery is referred to as a 3 shift roster, comprising of 3 roster groups. An example of a ‘roster change’ is where an employee moves from their roster group to perform their original shift or shifts in another roster group. If a roster change occurs with 7 or more days’ notice no overtime is payable.

[88] A shift swap occurs where an employee is asked to perform a different shift and is therefore unable to perform their originally rostered shift. In this situation an employee is paid at double time for the shift they are replacing and also receives an 8 hour paid rest break at ordinary rates on the basis that they cannot perform the shift swap and then move straight into covering their normal shift.

[89] Mr Wood stated that a shift group, at a minimum, comprises of all 12 hour shift workers at the Harwood Refinery. Mr Wood was of the view that the definition of a shift group as put by the AWU had never been the understanding or practice of the employer. 41

[90] Vertical cover involves an employee who is already rostered to work a particular shift moving to a different station to cover an absence in that shift. There would be no change to their shift roster because they would still work on the same designated shift just at a different workstation. On these occasions the employee is paid the ordinary rate of pay for the shift and a higher duties allowance if the position to be covered carries a higher rate of pay.

[91] Mr Wood did not recall the employer ever having a set definition of a long-term absence for the purposes of sub clause 17.5(a). 42

[92] Mr Wood stated that he was familiar with the 1993 Refinery 12 Hour Shift Agreement as he was involved in the drafting of other agreements which required an understanding of the 1993 Agreement. Mr Wood stated that a key principle of the 1993 Agreement was that the 12 hour shift was to be introduced at no extra cost to the employer. It was not intended to create a mandatory code on how the employer could ensure coverage in the event of employee absences. However, the onus would be on employees to ensure reliable relief cover was obtained. The employer was not moving to a model that restricted its ability to ensure coverage for employee absences. 43

[93] Mr Wood stated that managers who wished to implement shift swaps are required to justify why alternative less costly and less disruptive measures could not be adopted. A shift swap only occurs where necessary. 44 Due to reduced employee numbers, the employer has been forced to utilise shift swaps more often, however, more recently the employer has been rebuilding its pool of Relief Operators who can be called in on their days off and fewer shift swaps are required.

[94] The evidence of Mr Wood was that the employer has for many years been utilising alternative methods of absence coverage which are more cost-effective than a shift swap. Mr Wood’s witness statement contained calculations which demonstrated that the cost of a shift swap was significantly higher than the cost of an overtime shift and where vertical cover was utilised the only cost was a higher duties allowance where payable.

Consideration
Approach to interpretation

[95] The Federal Court in WorkPac Pty Ltd v Skene 45 (WorkPac) provided the following summary of the approach to the interpretation of an enterprise agreement:

“[197] The starting point for interpretation of an enterprise agreement is the ordinary meaning of the words, read as a whole and in context. The interpretation “… turns on the language of the particular agreement, understood in the light of its industrial context and purpose …”. The words are not to be interpreted in a vacuum divorced from industrial realities; rather, industrial agreements are made for various industries in the light of the customs and working conditions of each, and they are frequently couched in terms intelligible to the parties but without the careful attention to form and draftsmanship that one expects to find in an Act of Parliament. To similar effect, it has been said that the framers of such documents were likely of a “practical bent of mind” and may well have been more concerned with expressing an intention in a way likely to be understood in the relevant industry rather than with legal niceties and jargon, so that a purposive approach to interpretation is appropriate and a narrow or pedantic approach is misplaced.”

(citations omitted)

[96] The Full Court observations are consistent with the approach taken by the Full Bench of this Commission in Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union’ known as the Australian Manufacturing Workers Union (AMWU) v Berri Pty Limited AMWU 46 (Berri). The Commission is required to ascertain the objective intention of the disputed term of the enterprise agreement having regard to the language and terms of the agreement, when read as a whole, and having regard to its context and purpose narrow or pedantic approaches to construction should be avoided accepting that provisions of an industrial agreement are likely to have beendrafted without the skill and attention of a trained legal mind.47

[97] As can be seen from the above, an agreement should not be interpreted in a vacuum divorced from industrial realities. 48

[98] Neither party disputed the process of how an enterprise agreement should be interpreted, both relying on the decision in Berri. I accept the contention of the parties that the disputed words of the Agreement are not ambiguous, that is, susceptible to more than one meaning, 49 and are able to be interpreted according to their ordinary and plain meaning having regard to context and purpose. On this basis, evidence of the surrounding circumstances should be limited to evidence tending to support the plain language of the Agreement, which may include objective background facts known to both parties.50 The subjective intentions and expectations will not assist in this process. The witness evidence of both parties differed on the historical understanding as to how the disputed words are to be interpreted and applied and was thus not useful in ascertaining the objective intentions of the parties.

[99] While context and purpose of an agreement will be relevant, ultimately, the task is to give effect to the meaning of the words in dispute objectively construed. 51 The relevant “context” to be considered in interpreting an agreement extends to the origins of a particular clause. Although, most often, the immediate context, being the clause in which the words to be interpreted appear, will be the clearest guide.52

[100] Justice French (as His Honour then was) in City of Wanneroo v Australian Municipal, Administrative, Clerical and Services Union 53 observed, in construing words of an award, that consideration of their ordinary meaning may appear from the text of the instrument taken as a whole, which may extend to the entire document or to other documents with which there is an association. It may also include ‘....ideas that gave rise to an expression in a document from which it has been taken’.54

[101] In respect of this dispute, it is accepted by the parties that the 1993 Agreement between the employer and the AWU to introduce a trial 12 hour Shift Roster at the Harwood Refinery reflects the common understanding of the parties at the time. 55 The 1993 Refinery Agreement refers to the 12 hour shift pattern trail having arisen from an AWU request and having been agreed by employer subject to a number of listed conditions.56 Under the heading 2. CONDITIONS at (c) and (d) of the 1993 Agreement it is stated:

“(c) Shift coverage to suit the demands of plant operation must not be adversely affected. Management’s greatest concern is in the area of reliable relief cover for absences. No extra dependence must be placed on personnel outside the 12 hour continuous shift group to provide relief cover.

(d) The trial is being undertaken on the basis of no extra cost to the company.”

[102] Under the heading 3 TRIAL DETAILS at (k) - Relief Cover for Absences it states:

“(k) Reliable relief cover must be provided within the 12 hour continuous shift group as has been the case for the 8 hour shift roster system.”

[103] The extracted conditions and details above appear to be maintained and reflected in the current Agreement. For example, at 17.4 - 12 Hour Shift Arrangements of the Agreement it states:

“Implementation of a 12 hour continuous or non-continuous shift roster must be at no extra cost to the Employer relative to an 8 hour shift roster.”

[104] And further at sub clause 17.5 Relief Cover for Absence at (a) Harwood, Murwillumbah and Condong Process it states:

“Reliable relief cover must be provided from within the shift group in the first instance.”

[105] I am satisfied that the Agreement’s 12 hour shift roster provisions are to be read and understood on the basis of there being cost considerations in its application and that relief cover is to be provided from the ‘shift group’ in the first instance.

Meaning of ‘shift group’

[106] The parties are at odds as to the meaning of the term ‘shift group’ where it appears in sub clause 17.5 Relief Cover for Absence. The AWU submit that a shift group are the employees who are rostered on the same workstation as the absent employee. 57 The employer contends that shift group encompasses all 12 hour shift workers in the Harwood Refinery.

[107] The term ‘shift group’ is only found in sub clause 17.5 58 but is not defined, leaving its meaning to be ascertained from the context in which it appears. There is little to be gleaned from the objective background facts known to both parties to support the construction favoured by the AWU that the shift group is the particular workstation where the absence has originated.

[108] The 1993 - 12 Hour Trial Agreement document provides the best objective guide to the meaning of ‘shift group’. As extracted above sub clauses 2(c) and (d) state:

(c) “Shift coverage to suit the demands of plant operation must not be adversely affected. Management’s greatest concern is in the area of reliable relief cover for absences. No extra dependence must be placed on personnel outside the 12 hour continuous shift group to provide relief cover.

(d) The trial is being undertaken on the basis of no extra cost to the company.”

[109] And at (k) Relief Cover for Absence under the heading 3 Trial Details it states:

“Reliable relief cover must be provided within the 12 hour continuous shift group as has been the case for the 8 hour shift roster system.”

(My underline)

[110] I am satisfied that the Agreement’s 12 hour shift roster provisions are to be read and understood on the basis of there being a requirement to limit costs to no more than the cost of an 8 hour roster and that reliable relief cover is to be provided from the 12 hour continuous shift group in the first instance.

[111] Holding that a shift group referred to in sub clause 17.5(a) consists of all employees who work a 12 hour continuous shift as opposed to the limited group of employees at a particular workstation is consistent with the background context that costs are to be minimised with the introduction of the 12 hour shift, and that the 12 hour continuous shift group are to cover absences. This construction allows for all 12 hour continuous shift workers (suitably trained and competent) to cover an absence, helping to ensure that there is ‘reliable cover’ and that availability of relief cover is not compromised as sub clauses 17.4 and 17.5(a) require.

Sub clauses 17.1 vis-à-vis 17.5(a)

[112] In this dispute the AWU submit that the terms of sub clause 17.5 Relief Cover for Absence must be followed when an employee is on an unplanned absence that requires relief cover.

[113] The AWU submit that sub clause 17.1 applies to the adjustment period where employees transfer from day work to shift work and vice versa at the commencement and completion of the crushing season. It is also applied when new rosters are introduced. 59 It is contended that sub clause 17.1 is a general provision that must give way to the specific terms of sub clause 17.5(a) that apply when relief is required for an employee absence for the Harwood, Murwillumbah and Condong Process.

[114] On the other hand, Manildra contends that the Agreement allows the employer to move employees between rosters or between shifts as required. Both sub clauses 17.1 and 17.5(a) can be utilised to provide relief cover for absences. This includes the ability to rely on vertical cover by transferring an already rostered employee to a different station to cover the absence, requesting an employee to work an overtime shift, utilising a shift or roster change or a shift swap. 60 Sub clauses 17. 1 and 17.5 set out the payment obligations applying to the chosen course of action.

[115] Sub clauses 17.1 and 17.5 both fall within clause 17 Shift Work of the Agreement. Clause 17 commences with the following introductory sentence:

“The employer has the right to ensure that there is adequate shift coverage such that the plant operation is not impacted.”

[116] Sub clause 17.1 then commences by stating that it may be necessary to change an employee from one roster to another for various reasons. The sub clause goes on to state that it may be necessary to change an employee from one shift to another shift during the roster cycle for various reasons. In both cases the required notice period to be given to an employee is also set out and the penalty rates to apply where the required notice is not provided. The sub clause also provides the terms on which an employee may be transferred from shift work to day work.

[117] Sub clause 17.4 -12 Hour Shift Arrangements includes the following sentence:

“The operation of a shift roster must not compromise production reliability, product quality or availability of reliable relief cover for absence”.

[118] Sub clause 17.5(a) which has application to the Harwood, Murwillumbah and Condong Process specifies that reliable relief cover must be provided from within the shift group in the first instance. The sub clause then provides that, where this cannot be provided by employees on a day off, a shift swap may be required and sets out the payment for a shift swap. Where an employee from the shift work group is not available to provide relief cover, an employee from outside the shift work group may be utilised subject to being competent to do so.

[119] Where there is a long term absence, relief cover is to be arranged by the employer in consultation with the relevant shift group.

[120] Sub clauses 17.1 and 17.5(a) need to be read together with the entirety of clause 17 Shift Work. Clause 17 includes the employer’s right to ensure that there is adequate shift coverage so that plant operation is not impacted 61 and sub clause 17.4 - 12 Hour Shift Arrangements stipulates that the implementation of a 12 hour continuous or non-continuous shift roster must be at no extra cost to the employer relative to the 8 hour shift roster. Sub clause 17.4 also states that a 12 hour shift roster must not compromise the availability of reliable relief cover for employee absences.

[121] Subclause 17.5(a) first confirms what was agreed by the parties on the introduction of the 12 hour shift, that being employees in the shift group are responsible for covering the absences of their co-workers. Where employees on ‘days off’ cannot provide the absence relief a shift swap may be required. Sub clause 17.5(a) states a shift swap may be implemented by the employer it is not mandated it ‘may’ be required. The penalty payment for a shift swap is then stated as 200% per hour plus an additional payment of 8 hours at ordinary time inclusive of the shift penalty for the rostered shift missed. This is clearly substantially higher than the cost of absence coverage under the previous 8 hour roster where an employee on shift remains back for four hours and an oncoming employee starts four hours early at overtime rates.  62 The employer states that a shift swap it is not an appealing business alternative and only considered when less costly and less disruptive measures cannot be adopted.63

[122] While it is possible to view sub clause 17.5(a) as a mandated process to be followed in providing relief absence the better view when read in the context of the Agreement as a whole and the industrial context surrounding the introduction of 12 hour shifts is that sub clause 17.5(a) does not set out a singular process to be followed should absence relief be required.

[123] Subclause 17.5(a) is an option that can be utilised for leave relief as can the process under sub clause 17.1 which states that it may be necessary to change an employee from one roster to another or from one shift to another for various reasons.

[124] There is no warrant to take a narrow view of the sub clause 17.5(a) as preventing the employer utilising its rights under sub clause 17.1 should it be deemed more appropriate or cost effective consistent with the stated requirements of 12 hour shift arrangements set out in sub clause 17.4 by the employer not to utilise sub clause 17.5(a). The employer may utilise a shift swap as per sub clause 17.5(a) should they be willing to incur the penalty rates which are then set out. If not the employer may or rely upon 17.1 to provide relief coverage.

[125] Sub clauses 17.1 and 17.5(a) are each able to operate without one usurping the other. The legal maxim of the general giving way to the specific does not operate when there is no conflict between the disputed clauses. Further sub clause 17.1 is not stated to be ‘subject to’ any other subclause, nor is sub clause 17.5((a) stated to have application ‘notwithstanding’ and other sub clause.

[126] This result does not render otiose shift swaps as provided for under sub clause 17.5(a) as they continue to remain a feature of the Agreement’s shift work provisions to be used when considered appropriate by the employer as has occurred in the past.

Determination

[127] In respect of the questions posed for determination they are answered as follows:

Where an employee is absent from work within a location specified in sub clause 17.5(a) of the Agreement and is replaced:

i. Sub clause 17.5(a) of the Agreement applies where the employer determines to cover the absence in the manner prescribed in sub clause 17.5(a).

ii. For the purposes of sub clause 17.5(a) reference to the shift group is not confined to an employee’s workstation and extends to those employees engaged on a 12 hour continuous shift roster.

iii. Sub clause 17.1 of the Agreement applies where the employer determines to cover an absence by implementing a roster or shift change.

DEPUTY PRESIDENT

Appearances:

Mr Tom Craven, Legal Officer on behalf of the AWU
Mr Tim Capelin Solicitor on behalf of Manildra

Hearing details:

2020

Sydney
By telephone
25 June

Printed by authority of the Commonwealth Government Printer

<PR722957>

 1   Granted pursuant to s.596(2)(a) of the Act

 2   Witness statement of David Wood dated 5 May 2020, at [5-7] (Exhibit R4)

 3   AWU Outline of Submissions dated 9 April 2020 at [23]

 4   Ibid at [37]

 5   Ibid at [67]

 6   AWU Outline of Submissions of 20 May 2020 at [19]

 7   Witness statement of Steven Carter dated 8 April 2020 (Exhibit A1)

 8   Ibid at [12]

 9   Ibid at [21]

 10   Witness statement of Andrew Nott dated 8 April 2020 at [23] and [33] (Exhibit A2)

 11   Ibid at [36]

 12   Ibid at [42]

 13   Witness statement of Robert Woods dated 20 May 2020 at [7] (Exhibit A3)

 14   Ibid, at [10]

 15   Witness statement of Scott Tabor dated 18 May 2020 at [8] (Exhibit A4)

 16   Ibid at [11]

 17   Ibid at [15]

 18   Ibid at [16]

 19   The employer submits that ‘vertical cover’ means requiring an employee who is already rostered to work a designated shift to perform different duties, which may be higher or lower than the shift worker’s ordinary classification, for that shift. Where such duties carry a higher wage rate than the employee's normal classification, the higher wage rate is paid for the shift. (Respondent’s Outline of submissions of 6 May 2020 at [10])

 20   Respondent’s Outline of Submissions dated 6 May 2020 at [2]

 21   Ibid at [4]

 22   Ibid at [5(a)]

 23   Ibid at [12(B)(b)(i)]

 24   Ibid at [12(B)(b)(ii)]

 25   Ibid at [12(B)(b)(iii)]

 26   Ibid at [12(B)(b)(iv)]

 27   Ibid at [12(D)(b)]

 28   Witness Statement of Matthew Clarke dated 5 May 2020, at [30] (Exhibit R1)

 29   Ibid at [38]

 30   Witness statement of Ian McBean dated 26 May 2020, at [4-7] (Exhibit R2)

 31   Ibid at [33.2]

 32   Ibid at [21]

 33   Ibid at [22]

 34   Ibid at [27]

 35   Ibid at [33.2(b)

 36   Ibid at[33.2(c)]

 37   Witness statement of Stephen King dated 4 May 2020, at [13] (Exhibit R3)

 38   Ibid at [14]

 39   Ibid at [23.3]

 40   Ibid at [23.4

 41   Witness statement of David Wood dated 5 May 2020, at [8.9] (Exhibit R4)

 42   Ibid at [8.12]

 43   Ibid at [14]

 44   Ibid at [21]

 45 [2018] FCAFC 131

 46   [2017] FWCFB 3005.

 47   See also Kucks v CSR Ltd (1996) 66 IR 182 at 184 per Madgwick J

 48   City of Wanneroo v Australian Municipal, Administrative, Clerical and Services Union (2006) 153 IR 426 at [57]; Australian Workers’ Union v Cleanevent Australia Pty Ltd [2015] FCA 1477 at [14]. (The principles applicable to interpretation of enterprise agreements have traditionally applied to Awards)

 49   Bianco Walling Pty Ltd v Construction, Forestry, Maritime, Mining and Energy Union [2020] FCAFC 50 at [67]

 50   Beri at [114]

 51   Amcor Limited v Construction, Forestry, Mining and Energy Union (2005) 222 CLR 241 [70], [77–114].

 52   Short v FW Hercus Pty Limited (1993) 40 FCR 511 at 517-19

 53 (2006) 153 IR 426

 54 [2006] FCA 813 at [53]

 55   AWU Outline of submissions dated 9 April 2020 at [37-48]. Respondent’s submissions dated 6 May 2020 at [12(c)]

 56   See Sunshine Sugar Enterprise Agreement 2011 Appendix 1 at p.64

 57   AWU Outline of Submissions dated 9 April 2020 at [18]

 58   Apart from a refence in the definition of Shift Swap in clause 6 Definitions

 59   Witness Statement of Steven Carter dated 8 April 2020, at [21] (Exhibit A1)

 60   Respondent’s Outline of Submissions dated 6 May 2020 at [2]

 61   First paragraph of clause 17

 62   Witness statement Robert Woods of 20 May 2020 at [7] (Exhibit A3)

 63   Witness statement of David Wood of 5 May 2020 at [21] (Exhibit R4)