“Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers' Union (AMWU) v Abbe Corrugated Pty Ltd
[2022] FWC 3009
•17 NOVEMBER 2022
| [2022] FWC 3009 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.739—Dispute resolution
“Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU)
v
ABBE Corrugated Pty Ltd
(C2022/2898)
| DEPUTY PRESIDENT BELL | MELBOURNE, 17 NOVEMBER 2022 |
Alleged dispute about any matters arising under the enterprise agreement – smoko break times – over award payments – entitlements of maintenance employees.
This application concerns two disputes raised under s.739 of the Fair Work Act 2009 (the Act) by the “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU or the Applicant) regarding the ABBE Corrugated Pty Ltd Agreement 2021 (the Agreement or current Agreement).
ABBE Corrugated Pty Ltd (Respondent) is a manufacturer of corrugated packaging, and operates a factory located in Coolaroo, a suburb in Melbourne’s north. The dispute concerns two discrete matters relating to “maintenance” employees. The first concerns the taking of breaks on weekends. The second concerns any entitlement to shift loadings when absent on sick leave or on public holidays.
The application was the subject of a conference before me but was unable to be resolved.
Following consultation with the parties, the questions for arbitration (Questions) were as follows:
Under the ABBE Corrugated Pty Ltd Agreement 2021:
1. When performing overtime on weekends, are maintenance employees entitled to:
a. Take a paid smoko/tea break in the first half of the day or shift to wash-up and take refreshments in the tea room, remaining there for a period of 15 minutes,
or
b. Pause to acquire a refreshment from the tea room during the first half of the day or shift, including a brief wash up, at a time specified by the employer and then returning to attend to their duties with their refreshment?
2. Are maintenance employees entitled to shift loadings when absent on sick leave or public holidays?
At the hearing before me, the AMWU was represented by Mr B Terzic, Industrial Officer. The Respondent was represented by Ms K Aistrope, HWL Ebsworth, with permission to represent the Respondent having previously been granted.
The AMWU called Mr Thomson as a witness. Mr Thomson was a maintenance employee for the Respondent and a shop steward. The Respondent called Mr O’Sullivan, who was a Joint Managing Director of the Respondent. Each witness was cross-examined.
The Agreement and incorporated Awards
The clauses in dispute are contained in the Agreement itself, as well as in terms incorporated into the Agreement from relevant awards.
Key terms from the Agreement
The Agreement was approved on 21 May 2021 and has a nominal expiry date of 30 June 2024.
Clause 3 of the Agreement is as follows:
“3. SCOPE AND APPLICATION
This Agreement will apply to all employees of Abbe Corrugated Pty Ltd who are engaged in any occupations, industries or callings specified in either the Graphic Arts General Award 2000 as at 1 March 2006 or the Manufacturing Industries and Associated Occupations Award 2020. Unless otherwise specified in this Agreement, all production employees are covered by the Graphic Arts Award and all maintenance employees, including electricians, are covered by the Manufacturing Industries and Associated Occupations Award 2020.”
An undertaking given under s.190 of the Act in respect of the Agreement provided that “All references to the Graphics Arts Award should be AP782505CR - Graphics Arts - General - Award 2000 as at 26 March 2006.” The exact terms incorporated by reference to the Graphic Arts General Award 2000 (GA Award) were not initially entirely free from doubt, which I raised with the parties briefly before the hearing.[1] However, the parties agreed – and I am satisfied – that the relevant GA Award terms in the dispute before me were unaffected by those matters. Nonetheless, and having regard to the balance of the dispute, I would generally consider it prudent for parties to avoid a drafting technique incorporating external instruments where so much time has passed when that instrument was made.
Clauses 6.1 and 6.2 of the Agreement were as follows:
“6. RELATIONSHIP TO AWARDS
6.1 This Agreement incorporates the provisions of the Graphic Arts Award General Award 2000 as it existed on 1 March 2006, and the Manufacturing Industries and Associated Occupations Award 2020 (as varied from time to time).
6.2 Where there is any inconsistency between a term in this Agreement and a term of the incorporated Award, the term in this Agreement will take precedence to the extent of this inconsistency.
…”
For the purpose of the coverage clause of the Agreement, it was agreed between the parties that that the GA Award covered “production” employees and that the Manufacturing Industries and Associated Occupations Award 2020 (MA Award) covered “maintenance” employees. As noted above, the dispute before me concerned maintenance employees.
Clause 14 of the Agreement is titled “Hours of work, overtime and meal breaks”. The ordinary hours of work are 38 hours per week, to be worked Monday to Friday (with various shift options provided for): cll 14.1 and 14.2. Clause 14.3 addresses certain safety matters and clause 14.4 matters primarily concerning the allocation of overtime. The clauses directed at overtime rates and breaks are as follows (with the clauses of particular contention being underlined):
“14.5 Any employee who is required to work 11.6 hours or more will be eligible for one unpaid meal break of 30 minutes and one paid break of either (i) 30 minutes or (ii) two breaks of 15 minutes each, depending on production requirements, to be taken by agreement of the shift manager. There will be only one paid meal break in any 12 hours shift. Employees required to work 14 hours or more will be eligible for an additional paid 15 minute rest period. Employees required to work 16 hours or more will be eligible to an additional paid 15 minute rest period. For clarity - this means that if an employee is required to work 16 hours or more they will have two additional paid breaks. If multiple employees are eligible for additional breaks such breaks will be staggered during each 2 hour period to ensure continuous running.
14.6 Shift loading is payable on sick and public holidays to all employees covered by the Graphic Arts Award General Award 2000 as it existed on 1 March 2006.
14.7 Shift loading will be paid on overtime for Maintenance Employees.
14.8 Maintenance employees working overtime on Saturday and Sunday will be paid and work in the manner as production employees covered by the Graphic Arts Award 2000.
14.9 Employees are entitled to an unpaid meal break of not less than 30 minutes per shift, unless entitled to a paid meal break when working rotating continuous shifts as part of a continuous shift cycle as set out in the Graphic Arts General Award 2000 as it stood on 1 March, 2006.Clause 6.2.4.
14.10 Meal breaks are generally to be taken by arrangement with supervisors or managers at or prior to an employee completing 5 hours of continuous work. Nevertheless employees in an affected work area may work up to 6 hours without a meal break by majority agreement between the employer and employee as set out in the Graphic Arts General Award 2000 as it stood on 1 March, 2006.
14.11 Meal breaks will be taken in accordance with Clause 6.4.6 and meal allowances will be payable in accordance with Clause 5.2.3 of the Graphic Arts General Award 2000 as at 1 March 2006. The amount of the allowance is as per Clause 37 of this agreement.
14.12 Providing it is safe to do so, and the skills are available, equipment will operate on a continuous basis when required. Lunchtimes will only be varied with a minimum of one hour's notice.
14.13 … [omitted]”
Clause 15 is as follows:
“15. OVER AWARD PAYMENTS
No employee will lose an over award payment as a result of this Agreement. There will be no absorption of over award payments or allowances.”
Clause 38 is as follows:
“38. MAINTENANCE REST BREAK
A Maintenance employee will be granted one (1) 15 minute paid rest period during ordinary hours.
However,:
a) The time of taking a scheduled rest break by one or more employees may be altered by an employer if it is necessary to do so in order to meet a requirement for continuity of operations.
b) An employer may stagger the time of taking meal and rest breaks to meet operational requirements.
c) an employee must work during that rest breaks at the ordinary time rate whenever instructed to do so for the purpose of making good any breakdown of plant or for routine maintenance of plant which can only be done while the plant is idle.
d) The maintenance department agree that they will be dressed in work attire prior to the commencement of their shift and remain in work attire and on the job until the end of the shift. For the avoidance of doubt there will be no wash up period during the shift.”
Clause 14.8 of the Agreement, above, referred to terms of the GA Award. It was not in dispute the relevant provision of that award was clause 6.7, which is as follows:
“6.7 TIME PROVISIONS
6.7.1 A reasonable opportunity is to be provided by the employer for each employee to pause to acquire a refreshment during the first half of the day or shift, at a time specified by the employer, subject to:
6.7.1(a) continuous running of plant, equipment and processes;
6.7.1(b) productivity not being reduced;
6.7.1(c) wages and other costs not increasing;
6.7.1(d) maintenance of high standards of Occupational Health and Safety;
6.7.1(e) maintenance of high standards of quality;
whilst such refreshment is being acquired.
[6.7.2 corrected by S2976 from 01Feb00]
6.7.2 The abovementioned provision of a reasonable opportunity to pause to acquire a refreshment will not be applicable to employees who are provided with a rest break. Furthermore, 6.7.1 will not be used to reduce rest break entitlements in workplaces.”
For meal periods during overtime, cl. 14.11 of the Agreement refers to cl.6.4.6 of the GA Award. Clause 6.4.6 of the GA Award was as follows:
“6.4.6 Meal period during overtime
6.4.6(a) An employee will not work overtime for longer than five hours without a meal period of half an hour.
6.4.6(b) Despite 6.4.6(a) where an employee working overtime can complete their work within three hours after their ordinary finishing time they may continue to work for that period without a break for a meal provided that they do not work for more than six and a half hours from their previous meal break.
6.4.6(c) Where overtime is worked before the ordinary hour of commencing work and such overtime is of one and a half hours or more the employee will, within five hours of the commencement of such overtime, be required to take a meal period of half an hour without deduction of pay. Nothing in this subclause will in any way affect the taking by the employee of their ordinary meal period prescribed by this award.
In relation to the MA Award, clause 32.11 provided for rest break entitlements during overtime work (emphasis added):
“32.11 Rest break
(a) ….
(b) An employee working overtime must be allowed a rest break of 20 minutes without deduction of pay after each 4 hours of overtime worked if the employee is to continue work after the rest break.
(c) ….”
Applicable principles
I consider that the parties were largely in agreement as to the principles concerning the interpretation of an enterprise agreement or award. Each party included in the matters they relied upon the Full Court’s decision in James Cook University v Ridd [2020] FCAFC 123 at [65].
Those principles are well-known and I will not repeat them. It suffices to say that the differences between the parties concerned the application of those principles, as opposed to the principles themselves.
Factual background
The Respondent has been a privately owned manufacturer of corrugated cardboard for over 30 years. Its primary business is its factory at Coolaroo. At a very high level of summary, the factory takes paper as an input product and converts that into cardboard through a process called corrugating. That cardboard is then printed, cut and glued to produce finished cardboard boxes that are used by customers in a variety of industries.
The Respondent will generally run full production during Monday to Friday, but will usually not run full production on weekends. Full production runs on weekends will occur around 50 percent of the time, with about 25 percent of weekends having reduced production and the remaining 25 percent no production. Planned maintenance work is generally performed on weekends and that work is usually scheduled in advance. Weekend shifts will range between 6 and 12 hours but will typically run for 6 hours.
There are about 250 people directly employed by the Respondent. Production, dispatch and maintenance employees are covered by the Agreement. There are approximately 160 production and dispatch employees, and about 14 maintenance employees. The current dispute concerns the maintenance employees. [2]
Evidence was led regarding the practice – to adopt a neutral term – of payment of shift loadings on sick leave and public holidays for maintenance employees (cf, see Question 2 for arbitration). It was largely uncontentious, and I find, that there was continued payment of shift loadings on sick leave and public holidays for maintenance employees until around January 2022.
Evidence was also led regarding the practice of maintenance employees taking a 15 minute rest breaks during weekend work. Mr O’Sullivan says, and I accept, that at around 2007, the version of the MA Award in force at that time provided for paid rest breaks, which was reflected in conditions at the Respondent.
Aspects of the evidence concerning weekend rest break practices was a little more contentious.
By way of example, Mr Thomson says that:
“Until about 2017, the maintenance smoko was not an issue. Also, up till then, there was no formal entitlement to a morning smoko, either on weekdays or weekends; it was just taken on a routine basis unless there was something urgent or important to attend to.”
Mr Thomson says that in 2017, he was involved in a dispute regarding a machine breakdown, where “management took the view we prioritized our smoko over the breakdown”. As a result, he says cl.38 of the 2018 Agreement was negotiated (i.e. paid breaks for maintenance employees during ordinary hours) but “We did not think to pursue this for weekends because we thought we were covered by the graphic arts award for weekend work.”
By way of further example, Mr O’Sullivan gave evidence that maintenance employees were “consistently reminded” by managers that there are no paid “sit down” work breaks on weekends. However, Mr O’Sullivan did not give those directions himself and his evidence was evidently what others reported to him. Further, Mr O’Sullivan also gave evidence that, due to the nature of weekend work, the Maintenance Manager “often” is not on site during weekends. I infer that the Maintenance Manager is at least in part responsible for giving directions to maintenance employees, so far as directions were given.
Putting to the side that Mr O’Sullivan’s evidence was largely hearsay evidence and that it was disputed by Mr Thomson (who at least had some direct knowledge), I accept Mr Thomson’s evidence that, in respect of himself, he has continued to take fixed 15-minute breaks (with occasional variance where urgent work was occurring) until about July 2022.
Mr Thomson also gave evidence, which I accept, that management informed the maintenance workers (and at least Mr Thomson) that this practice was required to change following a “payroll” review in September-October 2021. The fact that the practice continued between October 2021 and July 2022 is, I infer, due to the fact that the parties were in dispute over the issue and discussions were occurring.
Each of the parties led evidence regarding aspects of negotiations concerning the Agreement and its predecessors and the reasons for the past practices described above. The primary purpose of doing so was in support their respective contentions regarding the interpretation of the Agreement.
For example, Mr O’Sullivan said that during bargaining for an enterprise agreement in 2015, the maintenance employees sought to have all overtime on weekends paid at double time rates, which would align those rates to production workers. Mr O’Sullivan said that the employees were asked to give up their “paid rest break” in return.
Similarly, in respect of the overtime issue, Mr Thomson gave evidence of his understanding of shift loadings applying to overtime for maintenance workers based on what he understood were secured in around 2012 by another employee, Mr Coulter.
Each of the parties made references to antecedent enterprise agreements. I accept that such agreements may provide context to the interpretation of a later enterprise agreement and I set out some relevant clauses below.
2012 Agreement
The Abbe Corrugated Pty Ltd Agreement 2012 (2012 Agreement) was approved on 4 December 2012 and had a nominal expiry date of 30 June 2015. Clauses 14.1 to 14.5 of the 2012 Agreement were broadly equivalent to those numbered clauses in the Agreement set out above (with the differences being immaterial to the current dispute). Clauses 14.6 to 14.11 of the 2012 Agreement were as follows (underlining added):
“14.6 Shift loading is payable on sick and public holidays to all employees covered by the Graphic Arts Award General Award 2000 as it existed on 1 March 2006, and the Metal, Engineering & Associated Industries Award 1998, Part 1 as at 1 January 2006.
14.7 Employees are entitled to an unpaid meal break of not less than 30 minutes per shift, unless entitled to a paid meal break when working rotating continuous shifts as part of a continuous shift cycle as set out in the Graphic Arts General Award 2000 as it stood on 1 March, 2006.Clause 6.2.4.
14.8 Meal breaks are generally to be taken by arrangement with supervisors or managers at or prior to an employee completing 5 hours of continuous work. Nevertheless employees in an affected work area may work up to 6 hours without a meal break by majority agreement between the employer and employee as set out in the Graphic Arts General Award 2000 as it stood on 1 March, 2006, Clause 6.3 and the Metal, Engineering & Associated Industries Award 1998, Part as at 1 January 2006, Clause 6.3.
14.9 Meal breaks will be taken in accordance with Clause 6.4.6 and meal allowances will be payable in accordance with Clause 5.2.3 of the Graphic Arts General Award 2000 as at 1 March 2006, and Clauses 6.4.10 and 6.4.11 of the Metal, Engineering & Associated Industries Award 1998, Part 1 as at 1 January 2006.
14.10 During the relocation period, travel in an employee's own vehicle between company sites at the request of management can be claimed as an expense at the rate of $0.79 per kilometre.
14.11 Providing it is safe to do so, and the skills are available, equipment will operate on a continuous basis when required. Lunchtimes will only be varied with a minimum of one hour’s notice.”
The underlined part of cl 14.6 of the 2012 Agreement, set out above, does not form part of the current Agreement. There was no equivalent to cl. 38 (“Maintenance Rest Break”) of the current Agreement in the 2012 Agreement. I will return to cl.14.9 of the 2012 Agreement below but it is presently sufficient to note that it represents the earliest version, in the enterprise agreements referred to by the parties, of a term providing for a ‘smoko’ break for maintenance employees.
2015 Agreement
The Abbe Corrugated Pty Ltd Agreement 2015 (2015 Agreement) was approved on 11 February 2016 and had a nominal expiry date of 30 June 2018. Clauses 14.1 to 14.5 of the 2015 Agreement were broadly equivalent to those numbered clauses in the 2012 Agreement (with the differences being immaterial to the current dispute). Clauses 14.6 to 14.9 of the 2015 Agreement were as follows (underlining added):
“14.6 Shift loading is payable on sick and public holidays to all employees covered by the Graphic Arts Award General Award 2000 as it existed on 1 March 2006.
14.7 Shift loading will be paid on overtime for Maintenance Employees.
14.8 Maintenance employees working overtime on Saturday and Sunday will be paid and work in the manner as production employees covered by the Graphic Arts Award 2000.
14.9 Employees are entitled to an unpaid meal break of not less than 30 minutes per shift, unless entitled to a paid meal break when working rotating continuous shifts as part of a continuous shift cycle as set out in the Graphic Arts General Award 2000 as it stood on 1 March, 2006.Clause 6.2.4.
14.10 Meal breaks are generally to be taken by arrangement with supervisors or managers at or prior to an employee completing 5 hours of continuous work. Nevertheless employees in an affected work area may work up to 6 hours without a meal break by majority agreement between the employer and employee as set out in the Graphic Arts General Award 2000 as it stood on 1 March, 2006.
14.11 Meal breaks will be taken in accordance with Clause 6.4.6 and meal allowances will be payable in accordance with Clause 5.2.3 of the Graphic Arts General Award 2000 as at 1 March 2006.”
It can be seen that, in respect of shift loadings, clauses 14.6 and 14.7 of the 2015 Agreement modified the position of the 2012 Agreement. Under the 2012 Agreement, shift loading was payable for “production” employees (i.e. those covered by the relevant version of the GA Award) and for maintenance employees (i.e. those covered by the relevant version of the MA Award). Clause 14.6 of the 2015 Agreement confined the shift loading benefit for “sick and public holidays” to production employees only, however a shift loading was payable on “overtime” for maintenance employees by cl 14.7. Clause 14.8 was new and it provided that maintenance employees working weekend work would be paid and work in the manner as production employees covered by the GA Award.
Notwithstanding the text of cl.14.6 of the 2015 Agreement, the employer gave an undertaking that it would “Continue to pay shift loading on public holidays and sick leave” for maintenance employees. Hence, while a shift loading for maintenance employees for sick leave and public holidays remained payable, the basis for it was now anchored to the GA Award, not the predecessor MA Award.
2018 Agreement
The Abbe Corrugated Pty Ltd Agreement 2018 (2018 Agreement) was approved on 15 February 2019 and had a nominal expiry date of 30 June 2021.
Clauses 14.6 to 14.11 of the 2018 Agreement were materially unchanged to those same clauses from the 2015 Agreement.
Unlike the 2015 Agreement, however, there was no undertaking provided to expand the operation of cl.14.6 to production and maintenance employees, as distinct from only production employees as cl.14.6 contemplates. In other words, the express terms of the 2018 Agreement now only granted a shift leave entitlement on sick leave and public holidays to production employees. Notwithstanding, as the factual findings above record, that loading continued to be paid to maintenance employees.
Clause 38 of the 2018 Agreement titled “Maintenance Rest Break” was introduced. The form of that clause is the same as it appears under the current Agreement.
Consideration
As the AMWU’s written and oral submissions helpfully articulated how it presented its position, it is useful to begin there. The AMWU’s position was advanced on two bases:
· For Question 1, the meal break practices on weekends are “entitlements in workplaces” within the meaning of cl.6.7.2 of the GA Award (as applied by cl.14.8 of the Agreement) and, by operation of that clause, cannot be abolished.
· For Question 2, the shift loadings are protected by the “Over Award Payments” savings clause in cl. 15 of the Agreement.
Question 1 – the meal break issue
It was not in contention the meal break issue starts with cl.14.8 of the Agreement (set out above). That clause applies the GA Award to maintenance employees for overtime worked on Saturday and Sunday.
It was also not in contention that cl.14.8 of the Agreement in turn applies cll.6.4.6 and 6.7 of the GA Award (both set out above) to those maintenance employees.
I would note at the outset that the chapeau to cl.6.7.1 provides for a “reasonable opportunity” to “pause to acquire refreshment” at the times specified, and does not provide for a fixed 15 minute break. So much is accepted by the AMWU but its argument was developed further.
However, where the parties diverged concerned the application of cl.6.7.2, which concludes with the requirement that “Furthermore, 6.7.1 will not be used to reduce rest break entitlements in workplaces.”
The AMWU contends that the ordinary (dictionary) meaning of “entitlement” suggests a broad notion of entitlement. The AMWU contends that an entitlement can exist without legally enforceable pillars in support. Their submissions illustrate the point:
“e.g. a person may say, “I am entitled to better treatment (or pay etc.)”. In other words, there is a case for what someone considers to be his or her entitlement, but that case is legally inchoate or inconclusive.” (original emphasis.)
The AMWU contends that “Within that meaning of entitlement”, the meal break has the hallmarks of an entitlement because:
“a. The Break was taken consistently over an extended period; the evidence has it going back about 15 years and it may well have existed well before then.
b. The Break had strong de facto legitimacy. It was taken openly, and it could be considered a norm in the respondent’s business.
c. As a practice, the Break was an integral part of the maintenance team’s approach to the efficient and effective discharge of their duties. It allowed them to regain their energy through rest and refreshment, and, confer on how to tackle the job—the benefits in having the Break are mutual between the maintenance workers and the respondent.”
In a development of the above contentions, the AMWU contended that the meal breaks “had the attributes of industrial customer and practice” in terms of “uniformity, time and substance”. This latter proposition drew on the Full Bench decision in Paull v Linfox Australia Pty Ltd[3] (Paull) and was augmented further in stating that the practice was “notorious”.[4]
The AMWU candidly accepted that the meal break “was a practice with no express mandate” and that an expansive reading of cl.6.7.2 of the GA Award was required to support its proffered construction.
I consider that an impermissibly expansive construction of the Agreement and GA Award would be required to support the AMWU’s contentions. While I am prepared to accept, with some qualifications, there was a factual practice in which (at least some) maintenance employees took a fixed 15 minute break during weekend overtime work, I do not accept it constituted an “entitlement” for the purpose of cl 6.7.2 of the GA Award. It was not an entitlement reflected in any industrial instrument, nor was my attention drawn to any contract or employment or policy which might be said to establish it.
So far as there might have been an entitlement, cl.32.11(b) of the MA Award could have once been its source. However, the provisions of that award and its predecessors were displaced by operation of each of the enterprise agreements placed before me, from cl.14.9 of the 2012 Agreement and then by cl.14.8 for the 2015 Agreement onwards.
I do not accept there was otherwise an extant “custom and practice” as that concept was explained in Paull. The concept of a “custom and practice” in Paull was considered by the Full Bench in that matter initially by reference to the principles stated by the High Court in Con-Stan Industries of Australia Pty Ltd v Norwich Winterthur Insurance (Australia) Ltd[5]. It is unnecessary to set them out. It is sufficient to note that an important element of the inquiry pertained to the “presumed intention” of the parties to a contract.
In the present case, even taking Mr Thomson’s evidence at face value for the whole of the maintenance workforce for the entirety of that time (which I do not consider it represents), this does not amount to a common or presumed intention. This is particularly the case where the formal industrial instruments governing these matters were being varied on this specific subject matter throughout the period. Specifically:
· The 2012 Agreement expressly provided for meal breaks for both maintenance and production workers, as respectively based on the relevant GA Award and the agreed version of the relevant MA Award at the time: cl.14.8 and 14.9.
· The 2015 Agreement altered that position. For maintenance employees, cl.14.8 of the 2015 Agreement introduced a meal break entitlement for weekend overtime work “in the manner as production employees” covered by the GA Award.
· The 2018 Agreement made no alterations to cl.14.8 of the 2015 Agreement, although a new clause was introduced at cl.38 for meal breaks during ordinary hours.
· The current Agreement kept the arrangements in place from the 2018 Agreement.
With no disrespect to each of the two witnesses, each of whom I considered witnesses of truth, much of their evidence fell short of what would satisfy me as being sufficiently relevant and probative to indicate any common intention (if that’s what the evidence was aimed at establishing) or providing probative contextual material that would inform the interpretation of the Agreement. Mr Thomson’s evidence was that maintenance workers did not think to pursue paid rest breaks for weekend work in 2017, when they had just secured a paid break for weekday work, “because we thought we were covered by the graphic arts award for weekend work.” While it is not clear to me why the same position wasn’t true for weekday work, this evidence does not support a “custom and practice”, let alone an “entitlement”, in the face of the objective changes that were being made to the enterprise agreements at the time.
In summary, there was no “entitlement” for the taking of a fixed break. While I accept that such breaks were being taken, the better explanation is that this was occurring due to a combination of inattention or indifference by management in the face of employees determined to continue that break, as well as a poor attention by management of the changes being made to the Respondent’s enterprise agreements. But it fell well short of any common intention, custom or practice, or entitlement.
The AMWU advanced an alternative basis for its 15-minute rest break, which was to the effect that a fixed break would otherwise satisfy cl.6.7.1 of the GA Award, including where necessary to postpone a break if a repair was needed. I do not accept this alternative contention. I will address this briefly.
The question for arbitration before me was on the basis that maintenance employees would take a smoko break in the “tea room”, “remaining there for a period of 15 minutes”. The concession that maintenance workers would return for breakdowns is inconsistent with the postulated question of the employees remaining on their break for 15 minutes. Moreover, the implied premise that a 15-minute break will always represent a “reasonable opportunity” to “pause to require a refreshment” involves making a broad conclusion on what is ultimately a specific factual inquiry. I do not consider that the dispute before me was run on this basis and, if that was intended, I am not satisfied that the evidence makes good that conclusion. While it might be the case that a 15-minute break can represent such a “reasonable opportunity”, it might also be the case that a considerably shorter break will suffice, as might a break not located in the tea room.
Question 2 – shift loadings
Under the 2012 Agreement and 2015 Agreement (the latter through an undertaking[6]), there was an express entitlement to shift loadings for sick leave and public holidays.
The express entitlement was removed upon the approval of the 2018 Agreement and that position was unchanged following the making and approval of the current Agreement.
Notwithstanding the removal of those payment obligations from the relevant enterprise agreements, the Respondent continued to pay those shift loadings until around January 2022.
The AMWU characterised the continued payments following the approval of 2018 Agreement as an “over award payment or allowance” for the purpose of cl.15 of the current Agreement.
The AMWU provided a definition of “overaward payment”, which the Respondent agreed was appropriate to take into account in interpreting the Agreement. The definition was:[7]
“overaward payment the difference between the actual rate paid and the award rate when the actual rate exceeds the award rate. It includes a so-called “third tier” of wages sometimes granted outside the formal award system in order to attract labour in times of under supply in the labour market. Awards in which overaward payments have been incorporated are called paid rates awards. Contrast minimum rates award. See also collective agreement; enterprise bargaining; overaward; supplementary payment.” (original emphasis)
The AMWU’s position was that, upon the continual payment of the shift loadings after the 2015 Agreement ceased to apply (and that was the final instrument which required the payment), the payments took on the character of an “over award” or, more accurately, an “over agreement” payment.
In oral submissions, the AMWU placed weight upon the fact (which was correct) that the payments continued after the 2018 Agreement ceased to apply. The significance of that circumstance was said to enliven cl.15 of the current Agreement to preserve the practice occurring during the life of the 2018 Agreement.
The AMWU stated in oral submissions that if it sought to press the same point during the life of the 2018 Agreement, it would have failed. I agree that the shift loading practice during the life of the 2018 Agreement was not an over award payment or allowance that would be protected by cl.15 of the 2018 Agreement during the operation of that agreement. However, I do not consider that the making of the current Agreement changed that character.
It is trite to observe that the specific terms of an agreement must be applied. While cl.15 of the Agreement is directed at “over award payments and allowances”, I consider that the clause is directed at changes to over award payments “as a result of” the Agreement. Clause 15 does not operate to incorporate over award (or over agreement) terms and conditions. What it does do is make clear that the Agreement will not, by its terms, affect any such arrangements. Similarly, the Agreement will not cause any over award payments or allowances to be absorbed.
Contrast can be made with over award terms in other contexts. In AMWU v Masterfoods Australia New Zealand – Snackfood[2007] AIRC 132 (Masterfoods), SDP Watson considered a clause that he said incorporates by reference “existing over-award payment and conditions of employment that otherwise could have formed part of this Agreement.”
In AWU v APT AM Employment Pty Limited[2014] FWC 279, Gregory C considered a clause in the following terms: “Any existing over award payments and conditions of employment shall continue to apply as though they were an express term of the Agreement.” In that matter, while Gregory C concluded that an employer policy did apply as if it were an express term of the agreement before him, he also concluded that the policy could be amended in accordance with the policy,[8] with those amendments not prevented by the enterprise agreement.
In the matter before me, I consider the position with cl.15 of the Agreement is clearer than the enterprise agreement terms considered by SDP Watson or Commissioner Gregory. Whatever arrangements or practices might be in place between the Respondent and maintenance employees that are extraneous to the Agreement, they can be varied (or terminated) in accordance with the processes applicable to those arrangements or practices. If the arrangements were contained in contractual documents, the terms of any contract would need to be complied with. They cannot be affected “as a result of” the Agreement but nor are they prevented from operating according to their usual terms and nor were they frozen in time as a result of the current Agreement commencing its application.
In the present case, the payments to maintenance employees for shift loadings on sick leave and public holidays ceased shortly following a realisation by the Respondent that it was not required by the Agreement to make those payments. The Respondent was not prevented by the Agreement from taking this course.
Disposition
Having regard to my reasons set out above, my answers to the Questions and the determination of the dispute by arbitration are as follows:
Question 1(a)
· For the question: when performing overtime on weekends, are maintenance employees entitled to take a paid smoko/tea break in the first half of the day or shift to wash-up and take refreshments in the tea room, remaining there for a period of 15 minutes?
· My answer is: “no”.
Question 1(b)
· For the question: when performing overtime on weekends, are maintenance employees entitled to pause to acquire a refreshment from the tea room during the first half of the day or shift, including a brief wash up, at a time specified by the employer and then returning to attend to their duties with their refreshment?
· My answer is: “yes, subject to compliance by the parties to the terms of cl.6.7.1 of the GA Award”.
Question 2
· For the question: are maintenance employees entitled to shift loadings when absent on sick leave or public holidays?
· My answer is: “no”.
The dispute is therefore determined accordingly.
DEPUTY PRESIDENT
Appearances:
B Terzic from the Applicant
K Aistrope of HWL Ebsworth for the Respondent
Hearing details:
2022.
Melbourne:
September 5.
[1] In essence, prior to 27 March 2006, awards were coded with the prefix “AW”. On and from 27 March 2006, awards were coded either with “AP” (designating application to constitutional corporations) or “AT” (designation other entities). The undertaking reference to an award with the code “AP782505CR” suggests reference to an award after 26 March 2006, not “at” 26 March 2006.
[2] CB 37, [4]
[3] [2018] FWCFB 1563 at [34].
[4] Ibid, [35].
[5] (1986) 160 CLR 226.
[6] By s.191 of the Act, an undertaking is taken to be a term of the Agreement.
[7] The definition was sourced from D Yerbury and M Karlsson, The CCH Macquarie Dictionary of Employment and Industrial Relations, CCH, 1992, at p 253.
[8] At [56].
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