[2015] FWC 911 [Note: An appeal pursuant to s.604 (C2015/490) was lodged against this decision - refer to Full Bench decision dated 27 May 2015 [[2015] FWCFB 3423] for result of appeal.]

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
Fonterra Brands (Australia) Pty Ltd
(C2014/1876)

COMMISSIONER RYAN

MELBOURNE, 13 FEBRUARY 2015

Alleged dispute regarding the meaning of “ordinary pay” in terms of redundancy severance payments.

[1] On 9 October 2014 the “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU) made an application under s.739 of the Fair Work Act 2009 (the Act) to deal with a dispute in accordance with the dispute resolution process found in clause 6 of the Fonterra (Echuca) Agreement 2013 Part II (the Agreement). The Agreement was approved under the Fair Work Act 2009 (the Act) on 22 July 2013. The employer covered by the Agreement is Fonterra Brands (Australia) Pty Ltd (Fonterra).

[2] Clause 22.8.1 of the Agreement reads:

“Each redundant employee shall receive a redundancy payment of four (4) weeks ordinary pay, and service payment of four (4) weeks for each completed twelve (12) months service or pro rata part thereof.”

[3] The dispute relates the meaning of the phrase “redundancy payment of four (4) weeks ordinary pay” andthe meaning of the phrase “service payment of four (4) weeks” in subclause 22.8.1 of the Agreement. Both parties accepted that the phrase “service payment of four (4) weeks” in subclause 22.8.1 of the Agreement should be accepted as meaning “service payment of four (4) weeks ordinary pay”. Thus the essence of the dispute is what is meant by the phrase “ordinary pay” in clause 22.8.1 of the Agreement.

[4] This matter was programmed for arbitration before me together with another dispute between the parties pursuant to the same enterprise agreement notified by the AMWU on 25 August 2014. That dispute, C2014/1548, related to redundancies at Fonterra’s yogurt making plant at Echuca.

[5] The matter was not subject to any conciliation as there was consent of the parties to the dispute that it proceed straight to arbitration.

[6] The AMWU was represented by Mr David Vroland and Mr Chris O’Grady was granted permission to represent Fonterra.

[7] Evidence for the AMWU was given by Mr Gwynne Healey, team coordinator (production) and AMWU shop steward; Mr Tom Hale, AMWU Organiser for the Fonterra site and Mr Damian King, former AMWU Organiser for the Fonterra site from January 1990 to May 2012.

[8] Evidence for Fonterra was given by Richard Raymond, Regional Manager - Milk Supply North; Rick Carpenter, National Human Resources Manager - Operations, Ingredients & Employee Relations; Derek Woodworth, Echuca Site Manager and Gillian McKnight, Regional HR Manager - North.

The Contentions of the AMWU

[9] The primary contention of the AMWU was that “the phrase “ordinary pay” as it appears in 22.8.1 refers to the amount of pay an employee would usually have expected to receive for working for a week. In other words, relevant regular loadings, penalties and allowances etc. Would apply and need to be factored into the calculation to determine an employee’s ordinary pay.”

[10] The AMWU relied upon several authorities to support its interpretation of the Agreement namely the decision of French J, as he then was, in City of Wanneroo v Australian Municipal, Administrative, Clerical and[11]
Services Union 1, the decision of Madgwick J in Kucks v CSR Limited2 , the observations of Gummow, Hayne and Heydon JJ in Amcor Limited v Construction, Forestry, Mining and Energy Union3 and the decision ofKirby J in the same case.

[12] The AMWU also relied on the decision of a Full Bench of the Commission in Shop, Distributive and Allied Employees Association (Queensland Branch) Union of Employees v Woolworths Limited TIA Woolworths 4.

[13] The AMWU contended that the phrase “ordinary pay” must be read in the context in which it appears and reference may be had to the Agreement as a whole. The AMWU further contended:

19. The word “ordinary” appears some 71 times within the text of the Agreement and in various combinations of other words such as “weekly wages” “hours of work” “time rates” “hours” ‘“‘time” “(base) rate of pay” “rate of pay” “daily rate of pay” “pay” “working day” “weekly rate” “time day” “time wages” “rostered shift” “roster” “work hours” “work day” “duties” “time earnings”.

[14] The AMWU went to specific clauses of the Agreement including sub-clauses 4.2 and 5.1.1of Appendix 4 of the Agreement.

[15] The AMWU drew attention to a significant industrial dispute as follows:

Extended Shift Arrangements

25. The applicant’s witness evidence identifies a significant industrial dispute in 2001 arising from a proposal by Nestle, Fonterra’s predecessor on the Echuca site, to implement a six day working week. This dispute was eventually resolved with Nestle’s proposal (or a version of it) being accepted by the unions according to the terms set out in Appendix 1 - Extended Shift Arrangements of the Nestle Echuca Pty Ltd Echuca Enterprise Agreement 2001 (the “2001 Agreement”). Apart from some minor structural changes, Appendix 1 appears to have been replicated essentially unchanged in successor enterprise agreements up to and including the current Agreement.
...
27. It is clear from the above that the arrangements put in place by Nestle were for employees to work 36 hours per week across 3 x 12 hour shifts between 6.00pm Sunday and 6.00pm Saturday each week and that these arrangements were to be considered “ordinary hours” or alternatively an employee’s “ordinary time working week.” The applicant thus submits that the 2001 industrial dispute resulted in a codification of these terms.

...

29. It is submitted that the only possible reading of the above provisions is that the work carried out by employees for their “ordinary hours” as identified in clauses 1-7 of Appendix 1 of the Agreement was intended to be (and indeed has since been) remunerated in accordance with clause 12 of Appendix 1 and it logically follows that this constitutes their “ordinary pay”.

The Contentions of Fonterra

[16] I set out below the relevant extracts from Fonterra’s written submissions related to this dispute:

“10.2 The phrase ‘ordinary pay’ has a well known common industrial usage namely: remuneration for an employee’s weekly number of hours fixed under the terms of his or her employment but excluding any amount payable to him or her for shift work, overtime or other penalty: see SDA v Woolworths [2006] FCA 616 at [36] and the cases there cited by Acting Chief Justice Gray. Absent a clear contrary intention the parties should be taken to have adopted this usage.

...

10.5 In paragraphs 5-6 of its outline of submissions dated 24 October 2014, the AMWU submits that no distinction should be drawn between the method of calculation for both payments. Fonterra accepts this position. Accordingly it would appear to be common ground that the words “ordinary pay” should be implied after the word “weeks” in the part of the clause dealing with the separation payment. On this basis, these submissions proceed to deal with Issue 6 and Issue 7 together.
...
Summary of arguments

10.7 Fonterra says that “ordinary pay” means employees’ base wage rate under Appendix 3 of the 2013 Agreement. It says this for the following reasons:

(a) first, the expression “ordinary pay” is a composite phrase with a well established industrial meaning. Splitting the phrase, and having recourse to the dictionary definition of the word ‘ordinary’, is misplaced;

(b) second, provisions of the 2013 Agreement dealing with other entitlements specifically address the treatment of loadings, penalties and allowances - whether or not the provision also uses the expression ‘ordinary pay’;

(c) third, clause 22 took on its current substantive form in the 1998 Agreement i.e. prior to the negotiation of the extended roster provided for in Appendix 1. Given this sequence of events, the parties could not have intended that the payments flowing from the introduction of extended shifts in 2001 were to be included within the notion of ‘ordinary pay’ as that phrase is used in describing entitlements upon redundancy (and there is no basis for automatically assuming that the parties intended the extended shift arrangements to alter the notion of ‘ordinary pay’ in that way);

(d) fourth, as a general proposition unlike other entitlements such as notice of termination and annual leave loading, the nature and purpose of severance benefits is not tied to how much employees usually earn;

(e) fifth, consistent with this general approach, the modern awards incorporated into the 2013 Agreement do not provide for severance payments calculated by reference to shift loadings, overtime and the like: see e.g. clause 19.1 of the Food Award;

(f) sixth, employees’ payslips identify the rate applicable to employees’ 36 ordinary hours as ‘ORD’: see Attachment B to the witness statement of Gwynne Healey;

(g) seventh, historically, and still to this day, employees at Echuca have been entitled to different allowances and loadings from time to time depending on (amongst other things) whether they work extended shifts. The AMWU construction of clause 22.8 would lead to employees being paid drastically different amounts by way of severance payments depending on which shift arrangement (if any) they happen to be working under at the time they are made redundant. Even amongst the group of employees who work extended shifts (who comprise the vast majority), the evidence indicates that employees’ take home pay fluctuates considerably from week to week, it being a product of:

(i) the total number of hours they work;
(ii) the days of the week on which they work;
(iii) the hours of the day they are rostered on to work; and
(iv) how much overtime is required to meet demand, and the day of the week on which the overtime (if any) is worked.

This fluctuation mitigates against “ordinary pay” including loadings, penalties and allowances because, taking a sensible practical interpretation, it cannot be that clause 22.8 was intended to have a completely ambulatory operation;

(h) eighth, Nestle’s decision to agree to incorporate shift allowances and loadings in employees’ severance benefits in the 2007-08 restructure does not change things. As the evidence of Richard Raymond shows, the approach that was adopted by the former owner of the Echuca factory (Nestle) back in 2008 was a commercial decision driven by a desire to avoid industrial disputation and prepare the Echuca site for imminent sale - it cannot be used as evidence of the parties’ mutual intentions or as a precedent for the proper interpretation of clause 22.8 generally;

(i) ninthly and lastly, the unions accept that Fonterra has the right to unilaterally move away from the extended shift. The 2013 Agreement contains no averaging provisions in respect of ordinary pay. The parties should not be taken to have agreed that an employee’s severance entitlements should turn on whether he/she was made redundant before or after a move from the extended shift pattern.”

The Principles for Interpreting an Enterprise Agreement

[17] The proper approach to the interpretation of enterprise agreements was recently considered by a Full Bench of the Commission in AMIEU v Golden Cockerel P/L 5, Justice Ross, President, Gostencnik DP, Johns C. The decision of the Full Bench was given after the conclusion of the hearings in this matter.

[18] The Full Bench in AMIEU v Golden Cockerel P/L said:

“Principles of construction of agreements

General approach

[19] The general approach to the construction of instruments of the kind at issue here is set out in the judgment of French J, as he then was, in City of Wanneroo v Australian Municipal, Administrative, Clerical and Services Union (Wanneroo):

‘The construction of an award, like that of a statute, begins with a consideration of the ordinary meaning of its words. As with the task of statutory construction regard must be paid to the context and purpose of the provision or expression being construed. Context may appear from the text of the instrument taken as a whole, its arrangement and the place in it of the provision under construction. It is not confined to the words of the relevant Act or instrument surrounding the expression to be construed. It may extend to ‘...the entire document of which it is a part or to other documents with which there is an association’. It may also include ‘... ideas that gave rise to an expression in a document from which it has been taken’ - Short v FW Hercus Pty Ltd (1993) 40 FCR 511 at 518 (Burchett J); Australian Municipal, Clerical and Services union v Treasurer of the Commonwealth of Australia (1998)80 IR 345 (Marshall J).’

[20] To this we add the oft-quoted observations of Madgwick J in Kucks v CSR Limited that a narrow pedantic approach to interpretation should be avoided, a search of the evident purpose is permissible and meanings which avoid inconvenience or injustice may reasonably be strained for, but:

‘. . . the task remains one of interpreting a document produced by another or others. A court is not free to give effect to some anteriorly derived notion of what would be fair or just, regardless of what has been written into the award. Deciding what an existing award means is a process quite different from deciding, as an arbitral body does, what might fairly be put into an award. So, for example, ordinary or well-understood words are in general to be accorded their ordinary or usual meaning.’

[21] Although their Honours were each dealing with the proper interpretation of an award, the same principles are apt to apply to the interpretation of enterprise agreements. For example, similar observations were made in Amcor Limited v CFMEU (Amcor):

‘Clause 55.1.1 must be read in context. It is necessary, therefore, to have regard not only to the text of cl 55.1.1, but also to a number of other matters: first, the other provisions made by cl 55; secondly, the text and operation of the Agreement both as a whole and by reference to other particular provisions made by it; and, thirdly, the legislative background against which the Agreement was made and in which it was to operate.’

[22] The fact that the instrument being construed is an enterprise agreement is itself an important contextual consideration. As French J observed in Wanneroo:

‘It is of course necessary, in the construction of an award, to remember, as a contextual consideration, that it is an award under consideration. Its words must not be interpreted in a vacuum divorced from industrial realities - City of Wanneroo v Holmes (1989) 30 IR 362 at 378-379 and cases there cited. There is a long tradition of generous construction over a strictly literal approach where industrial awards are concerned - see eg GeorgeA Bond and Co Ltd (in liq) v McKenzie [1929] AR (NSW) 498 at 503-504 (Street J). It may be that this means no more than that courts and tribunals will not make too much of infelicitous expression in the drafting of an award nor be astute to discern absurdity or illogicality or apparent inconsistencies. But while fractured and illogical prose may be met by a generous and liberal approach to construction, I repeat what I said in City of Wanneroo v Holmes (at 380):

‘Awards, whether made by consent or otherwise, should make sense according to the basic conventions of the English language. They bind the parties on pain of pecuniary penalties.’”

(references removed)

[19] Additionally the Full Bench in AMIEU v Golden Cockerel P/L undertook a thorough examination of the relevant court decisions relating to the use of extrinsic material as an aide to interpretation of contracts and agreements and summarised the state of the law as follows:

“[41] From the foregoing, the following principles may be distilled:

1. The AI Act does not apply to the construction of an enterprise agreement made under the Act.

2. In construing an enterprise agreement it is first necessary to determine whether an agreement has a plain meaning or contains an ambiguity.

3. Regard may be had to evidence of surrounding circumstances to assist in determining whether an ambiguity exists.

4. If the agreement has a plain meaning, evidence of the surrounding circumstances will not be admitted to contradict the plain language of the agreement.

5. If the language of the agreement is ambiguous or susceptible to more than one meaning then evidence of the surrounding circumstance will be admissible to aide the interpretation of the agreement.

6. Admissible evidence of the surrounding circumstances is evidence of the objective framework of fact and will include:

(a) evidence of prior negotiations to the extent that the negotiations tend to establish objective background facts known to all parties and the subject matter of the agreement;
(b) notorious facts of which knowledge is to be presumed;
(c) evidence of matters in common contemplation and constituting a common assumption.

7. The resolution of a disputed construction of an agreement will turn on the language of the Agreement understood having regard to its context and purpose.

8. Context might appear from:

(a) the text of the agreement viewed as a whole;
(b) the disputed provision’s place and arrangement in the agreement;
(c) the legislative context under which the agreement was made and in which it operates.

9. Where the common intention of the parties is sought to be identified, regard is not to be had to the subjective intentions or expectations of the parties. A common intention is identified objectively, that is by reference to that which a reasonable person would understand by the language the parties have used to express their agreement.

10. The task of interpreting an agreement does not involve rewriting the agreement to achieve what might be regarded as a fair or just outcome. The task is always one of interpreting the agreement produced by parties.”

Is there ambiguity?

[20] The starting point in the present matter is to determine whether the Agreement has a plain meaning or contains an ambiguity.

[21] In the present matter Fonterra contended that the use of the phrase “ordinary pay” in clause 22.8.1 was unambiguous and had a simple and clear meaning.

[22] Fonterra relied upon the decision of Madgwick J in Kucks v CSR Ltd 6 in which His Honour determined the meaning of the phrase “ordinary pay” by reference to the definition of that phrase in the Macquarie Dictionary:

“In Australia, the term “ordinary pay” has, according to the Macquarie Dictionary, 2nd edn, entered the language, as meaning:

“ordinary pay .... remuneration for an employee’s normal weekly number of hours fixed under the terms of his employment but excluding any amount payable to him for shift work, overtime, or other penalty.”

That meaning of ordinary is even more apt in the context of the present award.”

[23] Reliance on dictionaries can sometimes lead to error particularly when interpreting an enterprise agreement.

[24] In House of Peace Pty Ltd et or v Bankstown City Council 7, Mason P said:

“The role of dictionaries

25 The primary judge’s use of the dictionaries is criticised by the appellants as reflecting a search for a majority position and a preference for the narrower, less inclusive definitions over the broader if less generally used meanings.

26 It has been said that “words are only pictures of ideas on paper” (Isaacs J in Fell v Fell [1922] HCA 55; (1922) 31 CLR 268 at 276, citing Wilmot CJ in Dodson v Grew [1767] EngR 23; (1767) Wilm 272 at 278[1767] EngR 23; , 97 ER 106 at 108). Jackson J once remarked that “dictionaries are the last resort of the baffled judge” (Jordan v De George [1951] USSC 76; 341 US 223, 234 (1951)).

27 Nevertheless, dictionaries are frequently used, and this approach to statutory interpretation has support from the highest authority (see, eg State Chamber of Commerce and Industry v Commonwealth [1987] HCA 38; (1987) 163 CLR 329 at 348). Few judges emulate Lord Wilberforce, who never used dictionaries for the purpose of determining the common understanding of words and shut his ears if they were referred to in court (see Bennion, Statutory Interpretation 3rd ed, 1997 p946).

28 A dictionary may offer a reasonably authoritative source for describing the range of meanings of a word, including obsolete meanings. Dictionaries recognise that usage varies from time to time and place to place. However, they do not speak with one voice, even if published relatively concurrently. They can illustrate usage in context, but can never enter the particular interpretative task confronting a person required to construe a particular document for a particular purpose. I agree with the following remarks of Judge Randolph of the United States Court of Appeals for the District of Columbia Circuit (“Dictionaries, Plain Meaning, and Context in Statutory Interpretation” (1994) 17 Harv Jo L PP 71 at 72):

...citing ... dictionaries creates a sort of optical illusion, conveying the existence of certainty - or “plainness” - when appearance may be all there is. Lexicographers define words. Words in the definition are defined by more words, as are those words. The trail may be endless; sometimes, it is circular. Using a dictionary definition simply pushes the problem back.

29 The limitations of dictionaries are discussed with magisterial clarity by Mahoney JA in Provincial Insurance Australia Pty Ltd v Consolidated Wood Products Pty Ltd (1971) 25 NSWLR 541 at 560-1. Because the passage is lengthy I do not set it out. However, I respectfully agree with what his Honour has written there.

30 The task in hand is not a philosophical, linguistic or etymological exercise probing the inner or outer limits of “church” in 1954 Australian usage. In the end it is a search for the meaning of a particular document issued in a particular context.”

[25] The approach of Mason P in House of Peace Pty Ltd et or v Bankstown City Council was specifically endorsed by the Full Court of the Federal Court in Polo/Lauren Company L.P. v Ziliani Holdings Pty Ltd 8 per Black CJ, Jacobson and Perram JJ

“24 It is convenient to pause to consider the assistance that dictionary definitions, if any, provide to such questions of statutory interpretation. The common law has long approved of dictionary definitions to assist in statutory interpretation (see eg R v Peters (1886) 16 QBD 636 at 641 per Lord Coleridge CJ), but while this is a useful reference point, and indeed the approach taken by the learned first instance judge and by counsel, a dictionary definition is not conclusive and must be used with caution. As Mason P in House of Peace Pty Ltd & Anor v Bankstown City Council [2000] NSWCA 44; (2000) 48 NSWLR 498 noted at 505 [28]:

A dictionary may offer a reasonably authoritative source for describing the range of meanings of a word, including obsolete meanings. Dictionaries recognise that usage varies from time-to-time and place-to-place. However, they do not speak with one voice, even if published relatively concurrently. They can illustrate usage in context, but can never enter the particular interpretive task confronting a person required to construe a particular document for a particular purpose.

See also Mahoney JA in Provincial Insurance Australia Pty Ltd v Consolidated Wood Products Pty Ltd & Ors (1991) 25 NSWLR 541 at 560.

25 The present case provides a good example of this difficulty. The Court has been referred to several definitions of “label” and, unsurprisingly, from this selection counsel for each of the parties has been able to find a definition supporting their opposing arguments.”

[26] The current Macquarie Dictionary Online defines “ordinary pay” as:

noun remuneration for an employee’s normal weekly number of hours fixed under the terms of employment but excluding any amount payable for shiftwork, overtime, or other penalty.

[27] The difficulty with the Macquarie Dictionary definition is that the etymology of the phrase is simply not known.

[28] In many respects the definition appears to be counter intuitive.

[29] For the majority of the working population who work Monday to Friday and work during normal business hours (often between 7.00am to 6.00pm) the concept of ordinary pay would be the employee’s ordinary hourly rate of pay without shiftwork or overtime payments.

[30] However for a shiftworker who only works shiftwork such as in the steel, aluminium and chemical industries where work is carried on 24 hours a day 7 days a week, then the notion of ordinary pay would normally or usually include shiftwork payments.

[31] The AMWU contended that whilst there were a number of phrases relating to pay and hours which used the word “ordinary” the particular definition of “Ordinary Rate of Pay” in clause 4.2 of Appendix 4 of the Agreement “lends strong support to the AMWU’s case” that the phrase “four (4) weeks ordinary pay” in clause 22.8.1 of the Agreement includes shift allowances.

[32] The practical difficulty arising from the position contended for by each of Fonterra and the AMWU is that the phrase “ordinary pay” is not the only phrase used in the Agreement to describe the amount of money to be paid to an employee for performing their normal duties and at the times those normal duties are performed. The very fact that the Agreement has so many terms to describe a similar concept leads to the conclusion that the concept of “ordinary pay” may not be as simple as either Fonterra or the AMWU contend.

[33] Both Fonterra and the AMWU have led evidence as to the history of the Agreement and have through their respective contentions sought to read and interpret that evidence in a way which supports their respective positions as to the meaning to be given to “ordinary pay” in clause 22.8.1. What is abundantly clear from the evidence presented in this matter is that there is real uncertainty and ambiguity in relation to the meaning to be given to the phrase “ordinary pay” in clause 22.8.1 of the Agreement.

[34] The Commission finds that the Agreement does contain ambiguity and uncertainty in that the term “ordinary pay” is not defined in the Agreement and that the contentions of both Fonterra and the AMWU provide possible meanings for the phrase “ordinary pay” in clause 22.8.1 of the Agreement. The obverse of this is that the Commission finds that the phrase “ordinary pay” in clause 22.8.1 of the Agreement does not have a plain meaning as it is capable of having the meaning given to it by either Fonterra or the AMWU.

Evidence of the surrounding circumstance to aide the interpretation of the agreement.

Evidence of prior negotiations to the extent that the negotiations tend to establish objective background facts known to all parties and the subject matter of the agreement

[35] This is a relevant contextual factor. Both the AMWU and Fonterra are experienced in the art of bargaining over terms and conditions of employment to apply at Fonterra workplaces. Either party, as a bargaining representative for the 2009 Agreement or the 2013 Agreement which applies at Echuca, could have raised the issue of the language used in both of those Agreements and could have sought to have their respective positions dealt with as part of the bargaining process. Neither did so.

[36] Both Fonterra and the AMWU traversed the history of agreements at the Echuca site and the most that that history reveals is that the each side has a very subjective view about how the wording of the current enterprise agreement came about. The evidence does not support a conclusion that there is an objective background fact that is supportive of the position adopted by the AMWU or Fonterra.

Notorious facts of which knowledge is to be presumed

[37] This criteria is not relevant in the present matter. The AMWU contend that the conduct of the AMWU and Nestle in dealing with the redundancy of shift workers in 2001 establishes an understanding by both the AMWU and Nestle that redundancy of a shift worker requires payment of the redundancy pay at a rate which includes shift work loadings. The Commission can accept that it is a “notorious fact” that there was a very significant dispute between the AMWU and Nestle which led to shift workers being paid redundancy pay at their shift rate. However knowledge of this “notorious fact” does not assist in interpreting the terms of the current agreement or in understanding the actions of Fonterra.

Evidence of matters in common contemplation and constituting a common assumption

9.Where the common intention of the parties is sought to be identified, regard is not to be had to the subjective intentions or expectations of the parties. A common intention is identified objectively, that is by reference to that which a reasonable person would understand by the language the parties have used to express their agreement. 9

[38] Both the AMWU and Fonterra traversed the history of collective agreement making at the Echuca site from 1992 to the present under the Fair Work Act, the Workplace Relations Act and the Industrial Relations Act. From the AMWU’s perspective there is a high degree of continuity with the collective agreement making process as the AMWU has been representing the industrial interests of the food process workers throughout that time, firstly as the Food Preservers Union and then as the food division of the AMWU. However as both parties have made clear there were different employers owning and operating the Echuca site at different times. Fonterra is the current owner and operator of the Echuca site and bought the site from Nestle in 2008. Both the current Agreement covering food process workers and the predecessor 2009 Agreement were made by Fonterra and made under the Fair Work Act.

[39] I accept the evidence of the AMWU and CEPU that the unions have strongly held subjective views as to the evolutionary development of collective agreements over the 22 year period examined. I also accept the contention of the AMWU that the outcome of a dispute about redundancy pay under a Workplace Relations Act agreement made with Nestle informs the proper interpretation of the Fair Work Act enterprise agreement with Fonterra in relation to redundancy pay.

[40] I do not accept the contention of the AMWU that the history at the Echuca site prior to Fonterra acquiring the site provides objective evidence as to the position of Fonterra when bargaining either for the 2009 Agreement or for the current enterprise agreement. Even if I were to agree with the contention of the AMWU that Nestle accepted that the 2006 agreement made under the Workplace Relations Act operated so that “ordinary pay” for redundancy purposes included shift loadings it is a leap too far to impute the same acceptance or understanding to Fonterra when agreeing to either or both of the 2009 Agreement or the current Agreement.

Language of the Agreement understood having regard to its context and purpose.

The text of the agreement viewed as a whole and the disputed provision’s place and arrangement in the agreement

The legislative context under which the agreement was made and in which it operates.

[41] In Collector of Customs v Agfa-Gevaert Limited [1996] HCA 36, Brennan CJ, Dawson, Toohey, Gaudron and McHugh JJ, the High Court was dealing with an issue of interpretation of a Commercial Tariff Protection Order made under the Customs Act. The Court said:

“The meaning attributed to individual words in a phrase ultimately dictates the effect or construction that one gives to the phrase when taken as a whole and the approach that one adopts in determining the meaning of the individual words of that phrase is bound up in the syntactical construction of the phrase in question. In R v Brown, a recent House of Lords decision, Lord Hoffmann said:

“The fallacy in the Crown’s argument is, I think, one common among lawyers, namely to treat the words of an English sentence as building blocks whose meaning cannot be affected by the rest of the sentence. ... This is not the way language works. The unit of communication by means of language is the sentence and not the parts of which it is composed. The significance of individual words is affected by other words and the syntax of the whole.”

If the notions of meaning and construction are interdependent, as we think they are, then it is difficult to see how meaning is a question of fact while construction is a question of law without insisting on some qualification concerning construction that is currently absent from the law.”

[42] Further the Court said:

“Because the CTCOs are governed by the rules of statutory construction, the speech of Lord Simon of Glaisdale in Maunsell v Olins is a useful starting point in determining the construction of the instruments. His Lordship said:

‘Statutory language, like all language, is capable of an almost infinite gradation of ‘register’ - ie, it will be used at the semantic level appropriate to the subject matter and to the audience addressed (the man in the street, lawyers, merchants, etc). It is the duty of a court of construction to tune in to such register and so to interpret the statutory language as to give to it the primary meaning which is appropriate in that register (unless it is clear that some other meaning must be given in order to carry out the statutory purpose or to avoid injustice, anomaly, absurdity or contradiction). In other words, statutory language must always be given presumptively the most natural and ordinary meaning which is appropriate in the circumstances.’”

[43] Rather than trying to etymologise the phrase “ordinary pay” as defined by the Macquarie Dictionary it is more appropriate to discern the most natural and ordinary meaning of “ordinary pay” which is appropriate in the circumstances of an enterprise agreement which applies at the Echuca site of Fonterra and which applies to production and distribution employees who may be either shiftworkers or non shiftworkers.

[44] The current Agreement refers to “ordinary” in the context of pay and hours on numerous occasions. These provisions are set out in an Appendix to this decision.

[45] The several different references to pay are as follows:

● average ordinary weekly wages exclusive of any shift allowance (cl 5.1.4);
● average ordinary weekly wages inclusive of any shift allowance (cl 5.3.5);
● paid ordinary time for the day worked (cl 16.5.1);
● paid out ... at the employee’s current ordinary (base) rate of pay (cl.16.7.1);
● a payment of four (4) weeks ordinary pay (cl.22.5.1);
● receive payment of accumulated unused personal leave at their ordinary daily rate of pay (cl. 22.5.3);
● shall be allowed forty (40) hours of absence at ordinary rates of pay (cl.22.7);
● the ordinary weekly rate of pay which would normally have been paid excluding overtime, special rates and shift allowances (cl.27.2.3);
● will be paid at the applicable public holiday rates for a minimum of four hours plus the ordinary time wages that would have been paid (cl.33.2.5);
● shall receive a payment equivalent to 12 weeks ordinary pay (cl. 49.1);
● will be paid their ordinary wage rate plus any shift penalty and excluding any weekend penalty, incorporated in the roster (cl.21.1 of Appendix 1);
● An employee’s full rostered wage, including shift/weekend penalties incorporated in the roster, will be deemed to be his/her ordinary time wage for the purpose of determining wage entitlements to be paid by the company during any period of employee jury service leave (cl. 23 of Appendix 1);
● Shall mean the employee’s hourly rate used to calculate their weekly wage based on their 36 hours ordinary time and includes shift allowance, if applicable, but excludes overtime payments and overtime related allowances (cl.4.2 of Appendix 4);
● This shall mean the employee’s hourly rate used to calculate his weekly wage based on his/her 36 hours ordinary time and excludes shift allowances and all overtime and related payments (cl.4.3 of Appendix 4);
● travel time in excess of ordinary pay will not be applicable (cl.4.5.2 of Appendix 4);
● without loss of ordinary rate of pay (cl.5.1.1 of Appendix 4);
● The period of ordinary hours required until the completion of the ten consecutive hours off duty shall be without loss of ordinary time earnings. Cl.5.1.2 of Appendix 4;
● The employee shall be entitled to the period of 2.0 hours off at ordinary rate of pay or be paid 2.0 hours at double rate of pay (cl.5.1.2 of Appendix 4).

[46] The use of the phrase “ordinary pay” in clause 22.8.1 is not acontextual. 10 Therefore what is the context in which the phrase “ordinary pay” is used in clause 22.8.1 of the Agreement?

[47] The following are part of, but not exhaustive of, the context in which the phrase “ordinary pay” exists within clause 22.8.1.

1. “Ordinary pay” is used 3 times in the Agreement and several other terms are used to describe entitlements to pay.

The three specific references to ordinary pay are in clause 22.8.1, clause 49.1 both of which are in Part 2 of the Agreement and clause 4.5.2 in Appendix 4 to the Agreement.

2. The Agreement incorporates two modern awards into the Agreement, namely the Manufacturing and Associated Industries Award and the Food, Beverage and Tobacco Manufacturing Award.

3. The Fair Work Act does not use the term “ordinary pay”. The Fair Work Act uses the concept of “base rate of pay” which is defined in s.16 of the Act. Entitlements arising under the National Employment Standards, including redundancy pay, are calculated on an employee’s “base rate of pay”. Under the NES an employee is entitled to annual leave paid at the employee’s base rate of pay. However the Commission has pursuant to s.93(4) of the Act created entitlements in modern awards, (clause 41.4 of the Manufacturing and Associated Industries and Occupations Award and clause 34.4 of the Food, Beverage and Tobacco Manufacturing Award), to payment of annual leave on the following basis:

“41.4 Payment for period of annual leave

(a) Instead of the base rate of pay as referred to in s.90(1) of the Act, an employee under this award, before going on annual leave, must be paid the wages they would have received in respect of the ordinary hours the employee would have worked had the employee not been on leave during the relevant period.

(b) Subject to clause 41.4(c), the wages to be paid must be worked out on the basis of what the employee would have been paid under this award for working ordinary hours during the period of annual leave, including allowances, loadings and penalties paid for all purposes of the award, first aid allowance and any other wages payable under the employee’s contract of employment including any overaward payment.

(c) The employee is not entitled to payments in respect of overtime, special rates or any other payment which might have been payable to the employee as a reimbursement for expenses incurred.”

4. Both the AMWU and Fonterra have bargained with each other in relation to collective agreements at workplaces other than Echuca and Fonterra has bargained with other unions over time in relation to collective agreements at various sites other than Echuca.

5. Both day work and shift work arrangements have been a constant feature of the work arrangements at Echuca for a considerable period of time.

6. Disputes at different times have led to specific provisions being inserted into the agreements at Echuca whilst other clauses of the agreements seem relatively untouched over time.

[48] Clause 22 of the Agreement is intended to deal comprehensively with the issue of redundancy. The Clause is as follows:

“22. REDUNDANCY

22.1. This clause will apply to all those permanent full time and part time employees, other than those specifically hired as short term employees, who are made redundant due to the introduction of a planned program of rationalisation that results in permanent position loss, closure of a department or departments, the relocation of manufacturing or distribution operations to other sites, or due to a lower requirement for labour as a result of sales reductions. In addition, employees who are not offered ongoing employment at the site in another position which is on the same shift, provides the same or greater ordinary rate of pay and provides continuous service will be permitted the option of accepting a position in another shift, if available, a lower wage rate or voluntary termination. An employee so terminated will receive the benefits as provided.

22.2. This clause shall not apply to employees who:

22.2.1 are employed as casual, temporary, short term or seasonal employees.
22.2.2 terminate their employment of their own accord for any reason prior to receiving formal notice of redundancy.
22.2.3 leave employment due to retirement.
22.2.4 are terminated including dismissal for any reason other than retrenchment.
22.2.5 refuse an offer of ongoing employment in another position that is on the same shift, provides the same or greater ordinary rate of pay and provides continuous service.
22.2.6 are employed after the date of announcement that redundancy is to occur provided the employee is aware of the redundancy at the time of engagement (i.e.: those employed who know their employment will cease).

22.3. Any disputes arising from this clause shall be dealt with via the Disputes Resolution Process.

22.4. In the event of redundancies becoming necessary voluntary redundancies will be offered before any employee is made redundant on a compulsory basis. When selecting those to be made redundant, principle determinants will be the skills, competencies and training of individuals and the need to retain certain skills to perform a particular task or function and their service with the company.

22.5. A period of four (4) weeks’ notice shall be given to each employee who is to be made redundant. The notice period will be increased by one week if the employee being made redundant is over 45 years old and has completed more than 5 years of continuous service with the Company at the end of the day the notice is given.

22.6 If during this period of notice the company decides for whatever reason, that there is no further work required of the employee/s, a payment equal to the balance of the notice period not worked will be paid out together with all other benefits and entitlements. This provision shall be in substitution for and not cumulative upon any other notice entitlements arising under this Agreement and/or an award and or the NES.

22.7 Employee leaving during notice period
An employee given notice of termination in circumstances of redundancy may terminate his/her employment during the period of notice set out in 22.5. In this circumstance the employee will be entitled to receive the benefits and payments they would have received under this clause had they remained with the employer until the expiry of the notice, but will not be entitled to payment in lieu of notice or the Retention Payment, (sub clause 22.10).

22.8 Redundancy Payment

22.8.1 Each redundant employee shall receive a redundancy payment of four (4) weeks ordinary pay, and service payment of four (4) weeks for each completed twelve (12) months service or pro rata part thereof.

22.8.2 Accumulated Personal Leave

Each redundant employee shall on the date of their termination receive payment of accumulated unused personal leave at their ordinary daily rate of pay.

22.8.3 Pro Rata Long Service Leave

In the case of redundancy, employees with continuous service in excess of one (1) year will receive pro rata payment of long service leave benefits.

22.9 If an employee who has been given notice of redundancy as provided in this clause, dies before the date of termination, all benefits payable under this clause shall be paid directly to the employee’s estate.

22.10 Each redundant employee shall be allowed up to forty (40) hours of absence at ordinary rates of pay, during the period of notice, for the purpose of attending job interviews. This time off will be subject to prior notice being given and to production of proof of attendance.

22.11 Each redundant employee shall at the time of termination receive a certificate of service which shall include the reason for termination.

22.12 The company undertakes to conduct a personal interview with each redundant employee to discuss entitlements, determine other employment alternatives and assist wherever possible with personal problems. This will include where necessary, the provision of financial counselling and outplacement services.

22.13 Retention Payment

22.13.1 A ‘Retention Payment’ of four thousand dollars ($4,000) shall apply in the situation where the company advises of the closure of the site or a nominated section of the site, and an employee who has been made redundant due to the closure, continues in employment with the company until the day of the complete closure of the site or nominated section.
22.13.2 Where an employee leaves the business at the request of the employee before date of closure of the site or the nominated section of the site, the retention payment will not apply.

[49] As can be seen from the both the language and the content of clause 22 it is intended to effectively supplant the employees entitlements and the employers obligations under either Subdivision B of Division 11 of Part 2-2 of the Fair Work Act and/or provisions relating to redundancy in either of the incorporated modern awards, by providing employees with more beneficial entitlements and by creating more onerous obligations for the employer.

[50] Clause 22 of the Agreement is permitted by s.55(4) of the Act.

[51] Clause 22 applies equally to day workers and shift workers.

[52] Clause 22 of the Agreement does not define the term “redundancy” and that term would be expected to have the meaning given to it be s.119(1) of the Act. However the definition of “redundancy” in s.119(1) is very dependent upon the employment of the employee being terminated. Under s.119 redundancy requires both the decision of the employer that it no longer requires the job done by the employee to be done by anyone and the termination of the employment of the employee for that reason. A redundancy under s.119 will not occur where there is a decision of the employer that it no longer requires the job done by the employee to be done by anyone but where the employee is transferred to other work. In such circumstances the employee may have other rights under the Act but the rights under s.119 have not been enlivened.

[53] Clause 22 of the Agreement clearly covers situations of redundancy as contemplated by s.119. However clause 22 of the Agreement goes further in providing benefits to an employee whose job is redundant but where there is other work for the employee to do.

[54] In particular clause 22 provides the following:

“22.1 In addition, employees who are not offered ongoing employment at the site in another position which is on the same shift, provides the same or greater ordinary rate of pay and provides continuous service will be permitted the option of accepting a position in another shift, if available, a lower wage rate or voluntary termination.

22.2. This clause shall not apply to employees who:

22.2.5 refuse an offer of ongoing employment in another position that is on the same shift, provides the same or greater ordinary rate of pay and provides continuous service.”

[55] Clearly clause 22 of the Agreement is intended to provide for the possibility that an employee whose job is redundant might be retained in employment without loss of pay. If that cannot be provided then the employee has the option of accepting the redundancy payments under the clause or accepting employment with a lower pay outcome. However where an employee’s job is redundant and the employee is offered ongoing employment in another position that is on the same shift, provides the same or greater ordinary rate of pay and provides continuous service and the employee refuses such an offer then the employee is not entitled to the redundancy payments provided by clause 22.

[56] The very reference in each of 22.1 and 22.2.5 to offer of employment on the same shift suggests that the clause is intended to have some regard to the total rate earnt by shift workers and not just the ordinary hourly rate without shift penalties.

[57] Further clause 22 contains its own notice requirements in subclauses 22.5, 22.6 and 22.7. The rate of payment in lieu of notice in accordance with clause 22.6 is not specified, nor has it been in any version of this clause since it was first introduced into the 1998 agreement made between the AMWU, the CEPU and Nestle. (Print Q2037) In the context in which the 1998 agreement was made and in the context of the current agreement having to be considered in relation to the NES (s.117(2)) it would seem obvious that at all times since 1998 the rate of pay for the purpose of clause 22.6 is the rate of pay that the employee would have received if the employee had continued working for the remainder of the notice period. In the case of a shift worker this would include shift penalties.

[58] Further, clause 22.10 deals with an employee’s entitlement to take time off during the notice period for the purpose of attending job interviews. The entitlement is significantly greater than that provided by clause 23.8 of the Manufacturing and Associated Industries and Occupations Award and clause 19.6 of the Food, Beverage and Tobacco Manufacturing Award. The term in each of the Awards is the same (except as to numbering) and is as follows:

“23.8 Job search entitlement

(a) An employee given notice of termination in circumstances of redundancy must be allowed up to one day’s time off without loss of pay during each week of notice for the purpose of seeking other employment.
(b) If the employee has been allowed paid leave for more than one day during the notice period for the purpose of seeking other employment, the employee must, at the request of the employer, produce proof of attendance at an interview or they will not be entitled to payment for the time absent. For this purpose a statutory declaration is sufficient.
(c) This entitlement applies instead of clause.”

[59] The Awards provide for a job search entitlement without loss of pay. The corresponding Agreement clause provides for an employee to be “allowed up to forty (40) hours of absence at ordinary rates of pay”.

[60] When the current Agreement was made and Fonterra made application to the Commission for approval of that Agreement Fonterra filed a F17 statutory declaration in accordance with the requirements of the legislation and in that statutory declaration Fonterra was required to identify where the Agreement was more beneficial to employees than the relevant Award and where the Agreement was less beneficial to employees than the relevant Award. Clause 22.10 was not identified as a clause that either provided more beneficial or less beneficial provisions than the Award. However both clauses 22.8 and 22.12 were specifically identified as providing more beneficial terms than the relevant Awards.

[61] At the very least it would appear reasonable to conclude, given the F17, that clause 22.10 was not intended to provide a less beneficial term than the relevant Award. Thus the reference in clause 22.10 to an absence from work at “ordinary rates of pay” would appear to be intended to mean the same as “without loss of pay” in the relevant Award provision. Thus a shift worker exercising their entitlement under clause 22.10 would do so on the basis of not being paid less than they would be paid if they had stayed at work.

[62] None of the above discussion about clauses 22.1, 22.2.5, 22.6 or 22.10 provides any definitive answer to what is meant by the term “ordinary pay” as used in 22.8.1 but the discussion assists in the interpretation of clause 22.8.1.

Conclusion

[63] Returning to the key authorities it is relevant to note that the task of the Commission in giving a meaning to the term “ordinary pay” in clause 22.8.1 of the Agreement, where that term is ambiguous as to its meaning, is not “to give effect to some anteriorly derived notion of what would be fair or just” but to have real regard to the fact that what is being interpreted is an enterprise agreement and that “its words must not be interpreted in a vacuum divorced from industrial realities”.

[64] The Commission has taken into account:

● the context in which clause 22.8.1 sits within clause 22 and

● the context in which clause 22 sits within the Agreement and

● the context in which the current Agreement sits in the evolution of agreements at Echuca including the number of different employers over time and

● nature and purpose of an enterprise agreement and

● the competing evidence and contentions of the parties and

● the relevant authorities.

[65] Having taken all relevant matters into account the Commission concludes that clause 22.8.1 is intended to provide to an employee a redundancy payment which reflects the amount that the employee would be paid for working their ordinary hours of work at the times and in the patterns that those ordinary hours would normally be worked. For a shift worker that means that “ordinary pay” includes the penalties or loadings that the employee would expect to be paid for working his or her ordinary hours of work.

[66] The conclusion reached by the Commission does not give a strained meaning to the term “ordinary pay” in clause 22.8.1. Nor does it cause problems with the plain meaning to be given to other phrases used within the Agreement. Nor does it lead to an outcome which would be so unreasonable that that the concluded meaning of “ordinary pay” could never have been intended. Given that clause 22.8.1 has been in agreements at the Echuca since 1998 the conclusion reached by the Commission as to the meaning of “ordinary pay” in clause 22.8.1 would appear to be as appropriate in 1998 as it is today.

[67] The issue in dispute is resolved as follows:

The phrase “ordinary pay” as used in clause 22.8.1 both explicitly and implicitly (see [3] above) means the pay that an employee would receive for working the employees ordinary hours of work in accordance with clause 11 (including Appendix 1 and Appendix 6) of the Agreement including where relevant shift loadings and penalties.

COMMISSIONER

Appearances:

D. Vroland for the Applicant

C. O’Grady of counsel for the Respondent

Hearing details:

2014.

Melbourne:

10, 12 and 26 November

Appendix to Decision

5 CONSULTATION AND PRODUCTIVITY

5.1.4 The changes will not reduce an employee's average ordinary weekly wages exclusive of any shift allowance.

5.3.5 During the trial period, the changes will not reduce an employee's average ordinary weekly wages inclusive of any shift allowance.

16.5.1 Where an employee is rostered in advance to work on a scheduled RDO the employee will bank that RDO and be paid ordinary time for the day worked.

16.7 Pay out of RDOs for employees when transferring to extended shifts

16. 7.1 Any employee who transfers from 9 day fortnight to the extended shift roster will have up 6 months after the commencement of the extended shift roster to take RDOs which they have accrued. After 6 months any RDOs that the employee has accrued will be paid out to the employee. Should an employee wish to have his or her RDOs paid out prior to expiration of the 6 months the employee may request in writing for the RDOs to be paid out. Any RDOs paid out will be at the employee's current ordinary (base) rate of pay.

17 PERSONAL LEAVE

17.1 Amount and Calculation of Personal leave

17 .1.1 Employees other than casual employees under this agreement will be eligible for personal leave from the time they join the Company.

17.1.2 An employee is entitled to accrue an amount of paid personal leave for each completed 4 week period of continuous service with an employer, of 1/26th of the number of nominal/ordinary hours worked by the employee for the employer during that 4 week period.

22 REDUNDANCY

22.1 This clause will apply to all those permanent full time and part time employees, other than those specifically hired as short term employees, who are made redundant due to the introduction of a planned program of rationalisation that results in permanent position loss, closure of a department or departments, the relocation of manufacturing or distribution operations to other sites, or due to a lower requirement for labour as a result of sales reductions. In addition, employees who are not offered ongoing employment at the site in another position which is on the same shift, provides the same or greater ordinary rate of pay and provides continuous service will be permitted the option of accepting a position in another shift, if available, a lower wage rate or voluntary termination. An employee so terminated will receive the benefits as provided.

22.2 This clause shall not apply to employees who:

22.2.1 are employed as casual, temporary, short term or seasonal employees.

22.2.2 terminate their employment of their own accord for any reason prior to receiving formal notice of redundancy.

22.2.3 leave employment due to retirement.

22.2.4 are terminated including dismissal for any reason other than retrenchment.

22.2.5 refuse an offer of ongoing employment in another position that is on the same shift, provides the same or greater ordinary rate of pay and provides continuous service.

22.2.6 are employed after the date of announcement that redundancy is to occur provided the employee is aware of the redundancy at the time of engagement (ie: those employed who know their employment will cease).

22.5.1 Severance Payment

Each redundant employee shall receive a payment of four (4) weeks ordinary pay.

22.5.3 Accumulated Personal Leave

Each redundant employee shall on the date of their termination receive payment of accumulated unused personal leave at their ordinary daily rate of pay.

22.7 Each redundant employee shall be allowed forty (40) hours of absence at ordinary rates of pay, during the period of notice, for the purpose of attending job interviews. This time off will be subject to prior notice being given and to production of proof of attendance.

27 INJURED EMPLOYEES

27.2 Accident Make Up Pay

27.2.3 During the period of the second 26 weeks (aggregate period) in receipt of such payments for a claim or injury, the company will make up the difference between the total amount of compensation paid to the employee under the Act and the ordinary weekly rate of pay which would normally have been paid excluding overtime, special rates and shift allowances"

33 DISTURBANCE AND CALL BACK

33.1 Availability Allowance:

33.1.3 Rostered employees on an availability roster will be expected to undertake call-backs whenever they are available to carry them out. It is understood that being listed on the roster and the payment of the availability allowance in clause 33.1.4 does not require employees to hold themselves in readiness after ordinary hours of work. It is also understood that rostered employees on an availability roster will be given the first opportunity to undertake call-backs in their skill group/trade. Clause 11.1 does not apply to employees who are on standby.

33.2 Call Backs

33.2.2 Call Back Prior to Normal Start of Work

Call-backs will be considered to be separate from the normal ordinary time day of work. This refers particularly to a call-back just prior to the normal starting time, where the call-back may continue into the normal shift. In this case, the employee will receive the normal call back pay of 4 hours plus payment for the time worked on that shift from normal starting time.

Reasonable time is to be allowed for a meal break.

Call-backs prior to pre-arranged weekend overtime work will be paid a minimum of 4 hours for the call back plus over time payments from the pre-arranged start time.

33.2.3 Payments for Call-Backs

The first call-back between the conclusion of work on one day and the commencement of normal work on the next working day will receive a minimum of 4 hours pay at time and one half for the first two hours and double time thereafter except for after noon on Saturday and Sunday which shall be paid at double time. Any subsequent call-backs and/or overtime will be paid at double time for that day.

Call-backs will also attract shift penalties where applicable including weekends and public holidays.

Shift allowance to be paid on call backs shall be either the shift allowance that is paid for the rostered ordinary hours in that pay week or the shift allowance in accordance with the actual hours of the call back whichever is the greater.

33.2.5 Payment for Public Holiday Call-Backs

All call-backs on public holidays will be paid at the applicable public holiday rates for a minimum of four hours plus the ordinary time wages that would have been paid had the call-back not occurred.

34.1.6 Where an employee is required to work overtime at the completion of their rostered ordinary shift for the purpose of shift change over, the employee will be paid for the overtime in accordance with 34.1.2. Should the shift changeover be longer than 15 minutes then the overtime time worked shall be deemed unplanned overtime and the employee will be paid in accordance with 34.1.1.

49 PARENTAL LEAVE

49.1 Subject to the terms of this clause and the provisions of relevant legislation, employees are entitled to maternity, paternity and adoption leave and to work part-time in connection with the birth or adoption of a child. However it is noted that Fonterra policy currently provides that eligible employees shall receive a payment equivalent to 12 weeks ordinary pay at the commencement of maternity leave; and that this policy- or such more generous provisions which the company may introduce during that time shall apply to employees for the duration of this Agreement. Also, it is noted that the company policy provides for 5 days paid paternity leave per eligible confinement

APPENDIX 1 - EXTENDED SHIFT ARRANGEMENTS

EXTENDED SHIFTS

1 Shall be shifts of 12 hour duration worked between 6.00 p.m. Sunday and 6.00 p.m.

Saturday each week- "ordinary hours". The commencing and finishing times may be changed in accordance with the provisions of this Agreement and relevant award provisions.

2 Subject to point 1 above, overtime shifts shall be worked between 6.00 p.m. Saturday and 6.00 p.m. Sunday.

3 Rosters shall apply to ordinary hours extended shifts. Rosters shall also be established to cover the ih day overtime shifts.

4 The 6 days ordinary roster will involve employees working an average of 36 rostered hours per week. These 36 rostered hours will represent the employees ordinary time working week. Employees working a 12 hour shift roster where the amount of rostered ordinary hours varies between pay weeks, shall have their 36 ordinary hours per week averaged across the roster cycle.

SHIFT REMUNERATION

12 The following conditions will apply to 6 day shiftwork:

12.1 Shift Allowance

Early shift 15% penalty

Late shift 30% penalty

12.2 The Company will be prepared to provide an average pay arrangement for defined groups of employees who want such an arrangement.

12.3 Ordinary hours of worked on Fridays, Saturdays and Sundays will be paid as follows:-

12.3.1 Yogurt Makers

i Friday 6pm - Saturday 6am

12 hours@ double time

ii Saturday 6am -Saturday 6pm

1st 2 hours @time and a half, remaining 10 hours @double time

12.3.2 All other Employees

i Saturday 6am -Saturday 6pm

1st 2 hours @time and a half, remaining 10 hours @ double time

ii Sunday night penalty 12 hours@ double time

Plus the applicable shift penalty in subclause 12.1

17 PUBLIC HOLIDAYS

17.1 Employees will not be rostered to work on public holidays.

17.2 Employees whose rostered ordinary hours fall on a public holiday will be paid their normal rostered wage, including shift penalties.

21 PERSONAL LEAVE

21.1 Subject to possessing personal leave credits and the normal process for access to personal leave, employees on personal leave will be paid their ordinary wage rate plus any shift penalty and excluding any weekend penalty, incorporated in the roster.

21.2 Employees on personal leave in accordance with Clause 21.1, will have one hour of personal leave credit deducted from their personal leave accrual for each hour they are off work on such leave.

21.3 Taking uncertificated personal leave on 12 hour shift days will not diminish the number of days annually employees are entitled to claim personal leave without the requirement to provide a medical certificate.

23 JURY LEAVE PAYMENTS

An employees full rostered wage, including shift/weekend penalties incorporated in the roster, will be deemed to be his/her ordinary time wage for the purpose of determining wage entitlements to be paid by the company during any period of employee jury service leave.

27.6 When an employee is to change his/her rostered ordinary hours of work or work the Extended Shift Roster of an absent employee, the employee concerned should be given at least two weeks notice of this change. The following approaches to rostering changed shifts shall apply:

27.6.1 If the total number of shifts to be changed is less that the total number of rostered shifts relating to that block of shifts, the changed shifts must be worked on consecutive days either preceding and/or following the unchanged rostered shifts.

27.6.2 If the total number of shifts is the entire block of rostered shifts, all shifts must be worked on consecutive days taking into consideration the requirements as outlined in clause 27.8 of this agreement.

27.6.3 In providing relief coverage an overriding no disadvantage commitment will apply. No employee in working any patterns of work or shifts that involves relief shift coverage will be financially disadvantaged compared to what the employee would have been paid if the employee worked their normal rostered shift, unless the changed shifts attract a higher rate of payment.

27.6.4 Any changes to shifts must not reverse the current shift sequence of day shift followed by night shift. Changes to shifts, which give rise to all shifts being worked on day shift or night shift is accepted.

APPENDIX 4- TRAINING AGREEMENT (GENERAL)

4.2 Ordinary Rate of Pay

Shall mean the employee's hourly rate used to calculate their weekly wage based on their 36 hours ordinary time and includes shift allowance, if applicable, but excludes overtime payments and overtime related allowances.

4.3 Additional Training Rate of Pay

This shall mean the employee's hourly rate used to calculate his weekly wage based on his/her 36 hours ordinary time and excludes shift allowances and all overtime and related payments.

4.4 Ordinary Work Hours

Shall mean the employee's current designated daily hours to average 36 per week, subject to the Award requirements.

4.5 Travel Time

4.5.1 Local Travel - Time agreed to prior to commencement of course for road travel to and from course location when such time is not during ordinary work hours. This will be to a maximum of 6 hours per calendar day.

4.5.2 Interstate or International Travel - Time agreed to prior to commencement of course to travel to or from course or accommodation location when such time occurs on a non work day (i.e. Saturday or Sunday). This will include any local travel time and combined will not exceed 12 hours on any calendar day. If occurring on an ordinary work day when normal duties have been performed, travel time will not exceed 6 hours per calendar day. If occurring on an ordinary work day when normal duties have not been performed, then travel time in excess of ordinary pay will not be applicable.

5 PAYMENTS FOR APPROVED TRAINING COURSES

5.1 Mutual Benefit Category

5.1.1 Wherever practical, approved training courses of this category shall be attended by employees during their ordinary work hours without loss of ordinary rate of pay. This will include travel time as defined.

Every effort will be made to conduct training during the employee's rostered shift.

5.1.2 In circumstances where it is not practical for an employee to attend an approved training course during ordinary work hours for such reasons as, but not limited to:

• the unavailability of the approved training; and

• the ability to cover the employee's absence where necessary;

The following is agreed that only scheduled hours of the approved training course, as advised prior to attendance by the training provider, shall be paid at the employee's "additional training rate of pay". Travel time as defined for local travel shall not be included in payments.

The maximum training time that will be paid on any one calendar day is the normal shift duration.

• It is the intent that employees will have a ten (1 0) consecutive hour break between the completion of training, when such training is in addition to their ordinary hours of work (and normal duties) and the commencement of the employee's ordinary work (and duties) on the following day.

Whenever it is not reasonably practicable for this to occur, then the employee will not be required to commence his ordinary duties until the expiry of the ten consecutive hours.

The scheduled ceasing of training will be the time scheduled by the training provider for its completion and the same as the period used for payment. The period of ordinary hours required until the completion of the ten consecutive hours off duty shall be without loss of ordinary time earnings.

If the employee is required to commence work without having had such ten consecutive hours off duty he shall be paid at double rates until the completion of hours worked become equivalent to the duration of the ten consecutive hours off duty (e.g. employee concludes training at 11.00 p.m. and starts ordinary hours at 7.00 a.m. the following day.

The employee shall be entitled to the period of 2.0 hours off at ordinary rate of pay or be paid 2.0 hours at double rate of pay. If the employee commences overtime prior to 7.00 a.m., then the overtime would also be paid at double rate.

If agreed between the Company and the employee, the employee may take time off in lieu of payment for any or all of the training time that is in excess of his/her ordinary work hours. Such time off shall be taken at a mutually convenient time to the Company and the employee.

Further to 4.1.1 and 4.1.2 above, the following is agreed:

i. Where possible a Company vehicle will be made available, but when not available, the rate for motor allowance per kilometre paid based on the most direct route to and from the course location.

ii. All approved training course fees shall be paid by the Company upon receipt of a relevant invoice from the training provider.

iii. Travel costs (fares) shall be paid by the Company when other means of travel are required to attend an approved training course. These may include airfares, taxis, etc., but their use must be directly related to the course attendance and approved prior to their use.

iv. When the approved training course requires overnight accommodation, this will be arranged for and paid by the Company. If the employee decides to make his own arrangements, these will be at his own expense.

v. Meals will only be paid for by the Company in the following circumstances:-

a. Less than 48 hours prior notice of the course commencement time is given when the course held after the completion of ordinary hours of work. In this case, a single payment equivalent to the meal allowance in this Collective Agreement will be paid.

b. If the meals are provided by the course provider.

c. If the course requires overnight accommodation, the meals are to be included on the accommodation invoice.

vi. The Company shall provide the employee with all necessary course text books, manuals, etc., required for the completion of the course. These items will remain the property of the Company and be maintained in the Company's technical library for general use by employees.

APPENDIX 5- SECTION SIX- PERSONAL LEAVE & COMPASSIONATE

LEAVE

1.5 Employee must give notice

1.5.1 The employee must, as soon as reasonably practicable and during the ordinary hours of the first day or shift of such absence, inform the company or his or her inability to attend for duty and as far as practicable state the nature of the injury, illness or emergency and the estimated duration of the absence. If it is not reasonably practicable to inform the company during the ordinary hours of the first day or shift of such absence, the employee must inform the company within 24 hours of such absence.

1 (2006) 153 IR 426.

2 (1996) 66 IR 182.

3 (2005) 222 CLR 241.

4 [2013] FWCFB 2814.

5 [2014] FWCFB 7447.

6 [1996] IRCA 166.

7 [2000] NSWCA 44.

8 [2008] FCAFC 195.

9 [2014] FWCFB 7447 at para 41.

10 Note the use of the word “acontextual” by Lord Hoffman in Kirin-Amgen Inc v Hoechst Marion Roussel Ltd [2004] UKPC 6 as cited by the Full Bench in AMIEU v Golden Cockerel P/L [2014] FWFCB 7447 at pn 29.

Printed by authority of the Commonwealth Government Printer

“Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers' Union (AMWU) v Fonterra Brands (Australia) Pty Ltd

[2015] FWC 911

13 FEBRUARY 2015