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

[2018] FWC 764

[2018] FWC 764

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.739 - Application to deal with a dispute

"Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union" known as the Australian Manufacturing Workers' Union (AMWU)
v
Hospira Australia Pty Ltd
(C2017/1495)

DEPUTY PRESIDENT GOSTENCNIK MELBOURNE, 12 FEBRUARY 2018

Alleged dispute about any matters arising under the enterprise agreement and the NES; [s186(6)]; whether part-time employee is entitled to overtime payments for work performed in excess of agreed hours; whether said entitlement limited to hours worked in excess of full-time hours; construction and effect of undertaking.

[1] The “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU) has applied under s.739 of the Fair Work Act 2009 (Act) for the Fair Work Commission (Commission) to deal with a dispute in accordance with the dispute settlement procedure in the Hospira Australia Pty Ltd (Mulgrave Maintenance & Laboratory) AMWU/CEPU Agreement 2014 (current Agreement). The current Agreement commenced operation on 20 April 2015 and has a nominal expiry date of 1 October 2018.

[2] The dispute concerns whether on a proper construction of clause 15.1.2 and undertaking 3 of the current Agreement, Ms Katalin Szabo, a part-time employee of Hospira Australia Pty Ltd (Hospira) and a member of the AMWU, is entitled to overtime rates of pay for time worked in addition to her contracted ordinary hours where those additional hours are worked by agreement.

[3] The parties participated in conciliation however they were unable to resolve the dispute by agreement. The matter was originally scheduled for hearing and directions were issued on 10 August 2017, however at the parties’ request and by their consent, the hearing date was vacated, the disputed construction was to be determined on the papers and the directions issued on 10 August 2017 were varied to reflect the revised position of the parties.

[4] On 14 September 2017 the parties filed an Agreed Statement of Facts (Agreed Facts), the substance of which is reproduced further below, and did not adduce any other evidence.

Background and context

[5] Hospira is engaged in the pharmaceutical industry and supplies infusion technologies. 1 The current Agreement which is the subject of this dispute covers both maintenance and laboratory employees engaged by Hospira at the manufacturing site located in Mulgrave, Victoria.

[6] The parties agreed that the following question required determination by the Commission:

“Are part-time employees of Hospira Australia Pty Ltd, whose employment is covered by the Hospira Australia Pty Ltd (Mulgrave Maintenance & Laboratory) AMWU/CEPU Enterprise Agreement 2014, entitled to be remunerated at overtime rates for time worked in addition to a part-time employee’s contracted ordinary hours, up to full time hours, in circumstances where that employee has agreed to work those additional hours?”

[7] Additionally, the parties proffered the following Agreed Facts:

“8. In or about 2012, the Applicant, the Respondent and other bargaining representatives commenced negotiations for an enterprise agreement.

9. Neither the content of the clause dealing with part-time employees (clause 8.1 (ii)), nor the question of the rate at which part-time employees were entitled to be remunerated for time worked in addition to their ordinary hours, whether by agreement or otherwise, were live issues during the negotiations.

10. In or about early 2013, the contents of the Hospira Australia (Mulgrave Maintenance & Laboratory) AMWU/CEPU Enterprise Agreement 2012 ("the Former EA") were putto a vote in the workplace, and a majority of employees who were employed by theRespondent at the time and who would be covered by the Former EA voted in favourof it. The Former EA was then submitted to the FWC for approval.

11. Prior to approving the Former EA, the FWC sought undertakings from the Respondent, inter alia, in relation to part-time employees. The decision of the FWC approving the Former EA sets out a summary of events that took place between the Former EA being submitted to the FWC for approval in or about January 2013 and the Former EA being approved by the FWC on 6 June 2013. A copy of the Former EA, including all undertakings and the decision of the FWC approving the Former EA is attached to this statement of agreed facts and marked "A".

12. In or about early to mid 2014, the Applicant, the Respondent and other bargaining representatives commenced negotiations for an enterprise agreement to replace the Former EA.

13. Neither the content of the clause dealing with part-time employees (clause 8.1 (ii) under the Former EA/clause 15.1 .2 under the Current EA), nor the question of the rate at which part-time employees were entitled to be remunerated for time worked in addition to their ordinary hours, whether by agreement or otherwise, were live issues during the negotiations.

14. The contents of the Current EA were put to a vote in the workplace, and a majority of employees who were employed by the Respondent at the time and who would be covered by the Current EA voted in favour of it.

15. In or about early 2015, the Current EA was submitted to the FWC for approval. Prior to the Current EA being approved, inter alia, undertakings in relation to part-time employees were sought, were provided, and the Current EA was approved. A copy of the Current EA, including all undertakings and the decision of the FWC approving the Current EA is attached to this statement of agreed facts and marked "B".” 2

Consideration

Relevant legislative context

[8] The Commission’s power to deal with disputes is not at large and is circumscribed, relevantly by ss.738 and 739 of the Act and by the provisions of the procedure for dealing with disputes contained of an enterprise agreement under which the dispute is being progressed.

[9] There is no dispute between the AMWU and Hospira that the jurisdiction of the Commission has been properly invoked and that I am able to resolve the dispute by exercising arbitration power for which provision is made in clause 13 of the current Agreement.

Relevant current Agreement provisions

[10] The current Agreement contains a procedure for dealing with disputes at clause 13 as follows:

“13 DISPUTE RESOLUTION PROCEDURE

…

4th step: If all the previous steps for resolving the dispute internally have been taken and notwithstanding that the attempts to resolve the dispute have failed, the matter in dispute may be referred to the Fair Work Commission ("FWC) for resolution by conciliation.

5th step: If the matter is not resolved by conciliation:

If the dispute relates to a matter that has previously been the subject of a dispute notification under the previous Hospira Australia (Mulgrave Maintenance & Laboratory) AMWU/CEPU Enterprise Agreement 2010 (including but not limited to a dispute regarding clause 41- Paid Breaks), then the FWC may, subject to the agreement of the parties at the time, resolve the matter in dispute by arbitration. The parties may identify a particular member of the FWC and failing agreement the arbitration will be before a member allocated by the FWC;

13.4 For disputes that are notified after the date of approval of this Agreement, at the option of either party the FWC may resolve the matter in dispute by arbitration. The parties may identify a particular member of the FWC and failing agreement the arbitration will be before a member allocated by the FWC.

13.5 In exercising its arbitral functions in this dispute resolution clause, the FWC may exercise such procedural powers in relation to conferences, hearings, witnesses, evidence and submissions as are necessary to make the arbitration effective including doing any of the following:

…

13.6 Subject to clause 13.7 the parties agree that the decision of the FWC in arbitration shall be binding upon all of the parties and will be complied with.

13.7 The decision of FWC in arbitration under this procedure may be appealed to a Full Bench of the FWC by either party to the dispute. That appeal may be an appeal on a question of law and/or an appeal on the merits. The Full Bench may hear the appeal and exercise such powers in respect of the appeal as provided to the Full Bench in the Fair Work Act 2009, as if the arbitrated decision were an order of the FWC. The parties agree that the decision of Full Bench of the FWC in any appeal shall be binding upon all of the parties and will be complied with.

…”

[11] The relevant provisions of the current Agreement that are in dispute are as follows:

“15 EMPLOYMENT CATEGORIES

15.1.2 Part-time employment means employment for less than the normal weekly ordinary hours specified for a full-time employee, for which all Agreement entitlements are paid on a pro-rata basis calculated by reference to the ordinary time worked.

Undertakings in accordance with section 190 of the Fair Work Act 2009 (Cth)

…

Hospira Australia Pty Ltd ("the Employer") provides the following undertaking in relation to the Hospira Australia Pty Ltd (Mulgrave Maintenance & Laboratory) AMWU/CEPU Enterprise Agreement 2014 ("the Agreement"):

…

3. Overtime rates will apply for work performed by part-time employees engaged pursuant to clause 15.1.2 of this Agreement where such hours worked are in excess of full time hours and are worked by agreement with the employee. Such agreed hours will count for the purposes of leave accrual.”

[12] Other provisions of the current Agreement, the undertaking and the Manufacturing and Associated Industries and Occupations Award 2010 (Award) incorporated by reference into the current Agreement are also relevant. Reference to these will be made later in this decision.

Enterprise agreement interpretation principles

[13] The principles applicable to the proper construction of an enterprise agreement were canvassed at length in Australasian Meat Industry Employees Union v Golden Cockerel Pty Limited (Golden Cockerel). 3 The summary of the applicable principles set out in Golden Cockerel was modified in Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union’ known as the Australian Manufacturing Workers Union (AMWU) v Berri Pty Limited (Berri)4to take account of the discussion by the Full Bench of the extent to which evidence of prior negotiations and positions adopted in negotiations might be called into aid a construction in light of the statutory scheme under which an enterprise agreement is made and the fact that it is made when a majority of relevant employees vote to approve the agreement. The applicable principles need not be rehearsed at length here and were not put in issue. However, in short compass, much like the approach to construing a statute, the construction of an enterprise agreement begins with a consideration of the ordinary meaning of the words used, having regard to the context and evident purpose of the provision or expression being construed. Context may be found in the provisions of the agreement taken as a whole, or in their arrangement and place in the agreement being considered. The statutory framework under which the agreement is made may also provide context, as might an antecedent instrument or instruments from which particular provisions might have been derived.

The parties’ submissions

[14] The AMWU contends that on a proper construction of the current Agreement I should determine that Hospira is obliged to remunerate part-time employees who are covered by the current Agreement at overtime rates prescribed by the current Agreement for all time worked in addition to their ordinary contracted hours. 5 In support of its contention, the AMWU rely on the interpretation of enterprise agreement principles outlined in Berri and submit that the language of the relevant clause and the undertaking “cannot be divorced from their history and that the unusual history of the clause and undertaking evidences an ambiguity in clause 15.1.2 and paragraph 3 of the undertaking” in the current Agreement.6 Essentially, they say that regard must be had to the historical context of the clause because it guides the interpretation of the current Agreement.

[15] The AMWU contends that the predecessor to the current Agreement, Hospira Australia (Mulgrave Maintenance & Laboratory) AMWU/CEPU Enterprise Agreement 2012 (2012 Agreement)contained an identical clause to that which is in dispute in this matter. 7 The 2012 Agreement incorporated and applied wholly in conjunction with Award, except to the extent of any inconsistency, in which case the 2012 Agreement was to prevail over the Award. This is also the case with the current Agreement. The AMWU contend that at the time the 2012 Agreement was submitted to the Commission for approval neither the clause dealing with part-time employees, nor the question at the centre of this dispute, was a live issue in the negotiations in pursuit of the 2012 Agreement.8

[16] It contends that in the decision approving the 2012 Agreement 9 (2013 Decision), Commissioner Ryan determined that “there is a direct inconsistency between clause 8.1(ii) of the Agreement and clause 13 of the Award. Therefore clause 3.9 of the Agreement operates to ensure that the express provision of clause 8.1(ii) of the Agreement prevails over the inconsistent provision of clause 13 of the Award.”10

[17] The AMWU contends that the Commissioner determined that an undertaking was necessary in order for the 2012 Agreement to meet the requirements of the Better Off Overall Test (BOOT) because the 2012 Agreement did not “carry with it the several protections provided by clause 13 of the Award”. 11 In response to those concerns, Hospira provided an undertaking which is identical to the undertaking that was provided in the current Agreement. In the 2013 Decision, the Commissioner provided the reasons for requesting the undertaking as follows:

[26] As can be seen from my analysis of the relationship between the Award and the Agreement, I do not agree with the proposition advanced by the AMWU that “the Agreement as read operates to incorporate all relevant Award terms for part time workers”. Therefore in my view undertakings were necessary to address the concerns I raised.

[27] I note the understanding that the AMWU has in relation to part time employee receiving “overtime penalties for all work in excess of agreed hours”.

[28] I read the undertaking offered by Hospira as confirming this understanding and

confirming that all hours worked by a part time employee in excess of agreed hours will be paid at the overtime rate. 12

[18] It says that when negotiations commenced for the current Agreement, the clause and undertaking that are now in dispute were carried over and were not live issues in those negotiations. 13 Hospira does not dispute this position.14

[19] The AMWU contend that this history is relevant to the current dispute because where there is a decision of the Commission approving a predecessor enterprise agreement and which has made a determination in relation to the meaning of a clause and undertaking which are identical to those now in dispute, it cannot be said that the undertaking has a “plain meaning”. 15 They say that there is no evidence before the Commission that any person or party covered by the current Agreement sought to alter the position with respect to part-time employees when negotiating in pursuit of the current Agreement.16 They contend that the evidence before the Commission is a decision of the Commission which has determined the matter.17

[20] In summary, it appears that the gravamen of the AMWU’s contention is that the term ‘agreed hours’ referred to in the undertaking means the hours that a part-time employee is contracted to work.

[21] Hospira contends that Ms Szabo is not entitled to overtime rates for the hours worked in addition to her contracted part-time hours as the additional hours were worked with her agreement, and the total hours worked were not in excess of the full-time hours under the current Agreement. 18 Hospira submits that the words in the current Agreement should be given their plain meaning and with consideration of the ordinary meaning of the words in question.19 They say that when read in conjunction, clause 15.1.2 and the undertaking operate to extend a part-time employee’s ordinary hours up to a maximum of the full time hours contained in the current Agreement and that no regard should be had to the historical context concerning the origins of the wording contained in the undertaking.20

[22] Hospira contends that the reasoning produced above at [26] – [28] of the 2013 Decision confirmed that overtime penalties would be payable for work performed by a part-time employee in excess of ‘agreed hours’. 21 They say that starting with a consideration of the ordinary meaning of the relevant words as stated by the Full Bench in Berri¸ it logically follows if work performed in excess of agreed hours is paid at overtime rates (that is, excess hours worked without agreement), then work performed that is not in excess of agreed hours is to be paid at ordinary rates (that is, excess hours worked with agreement).22

[23] Hospira contends that the AMWU has not considered the 2013 Decision in its entirety and has misinterpreted the meaning of ‘agreed hours’. 23 Hospira submits that ‘agreed hours’ does not equate to contracted hours but that it includes any hours worked by a part-time employee, up to a maximum of the equivalent full time hours, provided that the employee has agreed to work those hours and that this conclusion is supported by the following:24

“50. The Respondent’s final undertakings submitted to the Commission are outlined at paragraph [23] of the 2013 Decision, and relevantly states:

“1. Clause 13.2 to 13.5 (inclusive) of the Award will apply to part-time employees engaged pursuant to clause 8.1(ii) of this Agreement.

2. Overtime rates will apply for work performed by part-time employees engaged pursuant to clause 8.1(ii) of this Agreement where such hours worked are in excess of full time hours worked by agreement with the employee. Such agreed hours will count for the purposes of leave accrual.” (“emphasis added”)

51. The Respondent notes the Applicant relies on paragraph [28] of the 2013 Decision to support its interpretation, which stated:

“I read the undertaking offered by Hospira as confirming this understanding and confirming that all hours worked by a part time employee in excess of agreed hours will be paid at the overtime rate.” (“emphasis added”)

52. The Respondent submits the Commission’s reference to ‘agreed hours’, is in response to the Respondent’s terminology used in the undertaking.24 The Respondent submits the term ‘agreed hours’ means any hours worked by a part-time employee with their agreement, including those agreed to be worked in excess of their contracted part-time hours up to the ordinary hours for a full-time employee (being either 36 for Maintenance employees or 38 for Laboratory employees).

53. The Respondent submits the above clearly sets out the manner in which overtime is to be paid to part-time employees. That is, allowing the ordinary hours of work for a part-time employee to be extended, by agreement, up to the maximum of full-time hours under the 2012 Agreement. This position was ultimately reflected in the final undertaking offered by the Respondent and accepted as terms of the 2012 Agreement in accordance with s.192(2) of the Act.

54. As such, the Respondent submits paragraph 2 of the undertaking contained in the 2012 Agreement has a clear and unambiguous meaning regarding the application of overtime for part-time employees. The Respondent notes the undertaking provided as part of the approval process for the 2014 Agreement is in the same terms, albeit with a minor and inconsequential change in wording.

…” 25

[24] For the reasons which follow, I have determined that the answer to the question requiring determination is no.

[25] By clause 6 of the current Agreement, the Award, excluding clause 7 of the Award, as in operation immediately prior to the commencement of the current Agreement, is said to be incorporated. Clause 6 of the current Agreement also sets out the rules by which the terms of the current Agreement will operate vis-à-vis the incorporated Award terms. Thus, although the current Agreement is said to apply wholly in conjunction with the Award, where there is an inconsistency between an express provision of the current Agreement and an incorporated Award provision, the former will prevail to the extent of inconsistency.

[26] Clause 15 of the current Agreement is titled “employment categories” and provides for definitions of “full-time employment”, “part-time employment” and “casual employees” as well as making provision for the engagement of persons in fixed term employment. Relevantly, clause 15.1.2 defines “part-time employment” as “employment for less than the normal weekly ordinary hours specified for a full-time employee, for which all agreement entitlements are paid on a pro rata basis calculated by reference to the ordinary time worked”. Clause 15.1.2 of the current Agreement is primarily the definitional. It also provides that the current Agreement entitlements are to be calculated on a pro rata basis by reference to the ordinary time worked by a person in part-time employment.

[27] By clause 39 of the current Agreement the hours of work for a full-time maintenance employee are 36 ordinary hours per week which are worked on the basis of 40 ordinary hours per week with four hours accruing toward a rostered day off to be taken each fortnight. By clause 49 of the current Agreement, the hours of work for a full-time laboratory employee are 38 ordinary hours per week which are worked on the basis of 7 hours and 36 minutes per working day with no more than one RDO every four weeks.

[28] Clause 25 of the current Agreement deals with overtime and provides as follows:

“25 OVERTIME

25.1 Overtime penalties, based on the employee’s ordinary hourly rate, shall be applied in accordance with the following:

25.1.1 Outside the times of beginning and ending work in any one‐day ‐ time and a half for the first two hours and double time thereafter;

25.1.2 Within the times of beginning and ending work in excess of eight hours in any day

- time and a half for the first two hours and double time thereafter; and.

25.1.3 On Saturday ‐ time and a half for the first two hours and double time thereafter with a minimum payment as for four hours work.

25.1.4 On Sunday – double time for all hours worked.

25.2 Shift penalties will be paid on overtime worked Monday to Friday.” 26

[29] At the time immediately before the commencement of the current Agreement of clause 13 of the Award made provision for part-time employment as follows:

13. Part-time employment

[Varied by PR504593]

13.1 An employee may be engaged to work on a part-time basis involving a regular pattern of hours which average less than 38 ordinary hours per week.

13.2 A part-time employee must be engaged for a minimum of three consecutive hours a shift. In order to meet their personal circumstances, a part-time employee may request and the employer may agree to an engagement for less than the minimum of three hours.

13.3 Before commencing part-time employment, the employee and employer must agree in writing:

(a) on the hours to be worked by the employee, the days on which they will be worked and the commencing and finishing times for the work; and

(b) on the classification applying to the work to be performed in accordance with Schedule B.

13.4 The terms of the agreement in clause 13.3 may be varied by consent in writing.

13.5 The agreement under clause 13.3 or any variation to it under clause 13.4 must be retained by the employer and a copy of the agreement and any variation to it must be provided to the employee by the employer.

13.6 Except as otherwise provided in this award, a part-time employee must be paid for the hours agreed on in accordance with clauses 13.3 and 13.4.

13.7 The terms of this award will apply pro rata to part-time employees on the basis that ordinary weekly hours for full-time employees are 38.

13.8 A part-time employee who is required by the employer to work in excess of the hours agreed under clauses 13.3 and 13.4 must be paid overtime in accordance with clause 40—Overtime.

[30] Clause 13 of the Award is not definitional, although it describes the permissible bounds of part-time employment. It is a provision that permits persons to be engaged on a part-time basis in the manner specified and confers particular rights and entitlements on persons so engaged, for example the engagement for a minimum consecutive number of hours on a shift and the entitlement to overtime for hours that are worked by the part-time employee in excess of those that were agreed in writing before the commencement of part-time employment, or as subsequently varied by agreement in writing.

[31] It is evident from the decision to approve the current Agreement (2015 Decision) 27 that the Commissioner had concerns that the current Agreement did not meet one or more of the requirements set out in sections 186 and 187 of the Act, that undertakings were proffered and accepted, and that by operation of section 191 of the Act each undertaking is taken to be a term of the current Agreement. Relevantly the undertakings provided the following:

“2. Provisions for Part Time employees referred to in clause 15.1.2 of the Agreement will be read and applied as though the following clauses were added;

(a) A part-time employee must be engaged for a minimum of three consecutive hours a shift. In order to meet their personal circumstances, a part-time employee may request and the employer may agree to an engagement for less than the minimum of three hours.

(b) Before commencing part-time employment, the employee and employer must agree in writing:

(i) on the hours to be worked by the employee, the days on which they will be worked and the commencing and finishing times for the work; and

(ii) on the classification applying to the work to be performed in accordance with Schedule B of the Manufacturing and Associated Industries and Occupations Award 2010.

(c) The terms of the agreement in clause 2(b) of this undertaking may be varied by consent in writing.

(d) Any agreements made or varied under clauses 2 (b) and 2 (c) of this undertaking must be retained by the employer and a copy of the agreement and any variation to it must be provided to the employee by the employer.

3. Overtime rates will apply for work performed by part-time employees engaged pursuant to clause 15.1.2 of this Agreement where such hours worked are in excess of full time hours and are worked by agreement with the employee. Such agreed hours will count for the purposes of leave accrual”. 28

[32] Although it is not clear from the 2015 Decision, it seems to me, particularly having regard to the terms of clause 13 of the Award, that the undertakings reproduced above were responsive to a concern that the current Agreement did not pass the BOOT in respect of a class of employees covered by the current Agreement, namely part-time employees. As is evident from the Agreed Facts, the current Agreement replaced the 2012 Agreement. The 2012 Agreement made provision for award incorporation 29 in terms substantially the same as that for which provision is made in the current Agreement. It also carried a definition of part-time employment30 and made provision for hours of work for a full-time employee31 in terms that are the same as those contained in the current Agreement. Clause 13 of the Award remained constant throughout the period immediately before the commencement of the 2012 Agreement and the commencement of the current Agreement. The 2012 Agreement and the current Agreement were both approved by the same member of the Commission.

[33] Undertakings in connection with the 2012 Agreement were also sought and accepted.

[34] Relevantly, the undertakings accepted in relation to the 2012 Agreement provided as follows:

“1. Clause 13.2 to 13.5 (inclusive) of the Award will apply to part-time employees engaged pursuant to clause 8.l(ii) of this Agreement.

2. Overtime rates will apply for work performed by part-time employees engaged pursuant to clause 8.l(ii) of this Agreement where such hours worked are in excess of full time hours worked by agreement with the employee. Such agreed hours will count for the purposes of leave accrual.” 32

[35] The 2013 Decision makes clear that the Commissioner had concerns that the 2012 Agreement did not pass the BOOT because a class of employees covered by that agreement, namely part-time employees, would not be better off overall if the agreement applied to those employees than if the Award applied to those employees. The Commissioner seems to have held this concern because, although clause 13 of the Award was incorporated as a term of the 2012 Agreement, the part-time provisions of the 2012 Agreement were inconsistent with the part-time provisions of the Award and thus the agreement prevailed. The Commissioner set out his reasoning in the following passages from the decision approving the 2012 Agreement:

“[13] The second issue of concern related to the part-time employment under the Agreement. The concern of the Commission was that part-time employment as a type of employment in the Agreement was significantly inferior to part-time employment under the modern award. My concern arose through the combined operation of clause 8.1 which sets out the types of employment in the Agreement and clause 3.9 which incorporates the modern award.

[14] The respective clauses of the Agreement are as follows:

“8. EMPLOYMENT CATEGORIES

8.1 In this Agreement:

(i) Full-time employment means all employment other than fixed term, part time, or casual.

(ii) Part-time employment means employment for less than the normal weekly ordinary hours specified for a full-time employee, for which all Agreement entitlements are paid on a pro-rata basis calculated by reference to the ordinary time worked.

(iii) Casual employees employed by the Company will be engaged in accordance with clause 14 of the Award.

(iv) Fixed term employees engaged for a specified time or task may have their tenure extended beyond 12 months by agreement with the relevant site delegate. Such agreement will not unreasonably be withheld nor will the Company seek to use fixed term contracts to replace permanent positions. Exceptions to this clause are where contract positions are replacing extended or authorised leave by an existing employee and secondments. Where a project position or sponsored work arrangement (overseas work visa) exceeds 12-months the relevant site delegate will be consulted prior to the position being filled. If employment is to be continued beyond the end date of the contract, the Company will endeavour to notify the employee no later than one (1) month prior to the end date of the contract.

Relationship with the Award

3.9 This Agreement incorporates and applies wholly in conjunction with the

Manufacturing and Associated Industries and Occupations Award 2010 (“Award”) (but excluding clause 7 of the Award) as it stood immediately prior to the commencement of this Agreement. Where there is an inconsistency between an express provision of this Agreement and a provision in the Award, the provisions of this Agreement, shall prevail to the extent of the inconsistency.”

[15] The operation of clause 3.9 of the Agreement would appear to incorporate into the Agreement clause 13 of the Award which is as follows:

“13. Part-time employment

13.1 An employee may be engaged to work on a part-time basis involving a regular pattern of hours which average less than 38 ordinary hours per week.

13.2 A part-time employee must be engaged for a minimum of three consecutive hours a shift. In order to meet their personal circumstances, a part-time employee may request and the employer may agree to an engagement for less than the minimum of three hours.

13.3 Before commencing part-time employment, the employee an employer must agree in writing:

(a) on the hours to be worked by the employee, the days on which they will be worked and the commencing and finishing times for the work; and

(b) on the classification applying to the work to be performed in accordance with Schedule B.

13.4 The terms of the agreement in clause 13.3 may be varied by consent in writing.

13.5 The agreement under clause 13.3 or any variation to it under clause 13.4 must be retained by the employer and a copy of the agreement and any variation to it must be provided to the employee by the employer.

13.6 Except as otherwise provided in this award, a part-time employee must be paid for the hours agreed on in accordance with clauses 13.3 and 13.4.

13.7 The terms of this award will apply pro rata to part-time employees on the basis that ordinary weekly hours for full-time employees are 38.

13.8 A part-time employee who is required by the employer to work in excess of the hours agreed under clauses 13.3 and 13.4 must be paid overtime in accordance with clause 40—Overtime.

13.9 Public holidays

(a) Where the part-time employee’s normal paid hours fall on a public holiday prescribed in the NES and work is not performed by the employee, such employee must not lose pay for the day.

(b) Where the part-time employee works on the public holiday, the part-time employee must be paid in accordance with clauses 32.4(e), 36.2(f), 37.5 and 40.9.”

[16] There is a direct inconsistency between clause 8.1(ii) of the Agreement and clause 13 of the Award. Therefore clause 3.9 of the Agreement operates to ensure that the express provision of clause 8.1(ii) of the Agreement prevails over the inconsistent provision of clause 13 of the Award.

[17] The result of this is that part time employment under the Agreement does carry with it the several protections provided by clause 13 of the Award. This concern was raised with Hospira on 28 February 2013 and Hospira provided a draft of an undertaking to address this concern in its written material filed with the Commission on 3 April 2013. The specific undertaking that Hospira was prepared to offer was in the following terms:

“(a) “Clause 13.2 to 13.6 (inclusive) of the Award will apply to part-time employees engaged pursuant to clause B. 1 (ii) of the Proposed Agreement

(b) Overtime rates would apply for work in excess of full time hours”

[18] The proposed undertaking did not go far enough to satisfy my concerns and at the hearing on 1 May 2013 I drew to the attention of Hospira the difference between paragraph (b) of their proposed undertaking and clause 13.8 of the Award.

[19] The position of Hospira was that as the rates of pay in the Agreement were significantly higher than the Award then the BOOT would be passed even with the payment of ordinary rates for hours worked by a part time employee outside their agreed hours but u to 36 hours per week (the full time hours).

[20] As paragraph (b) of the proposed undertaking applied to both additional hours worked by agreement and to additional worked because of a requirement to work from Hospira, I then sought an additional undertaking that overtime would be paid where the additional hours were required to be worked by Hospira. During the hearing Hospira advised the Commission that it would give such an undertaking.

[21] At the conclusion of the hearing on 1 May 2013 I raised with Hospira a further concern flowing from their undertaking in relation to part time employment.

[22] Paragraph (b) of the proposed undertaking would have the effect of extending the ordinary hours of work of a part time employee but without such additional hours necessarily being counted towards leave accrual. I suggested that Hospira should consider this additional matter as part of the exercise of finalising the undertakings they wished to offer the Commission.

[23] The undertaking offered by Hospira on 5 June 2013 contained the following:

“1. Clause 13.2 to 13.5 (inclusive) of the Award will apply to part-time employees engaged pursuant to clause 8.l(ii) of this Agreement.

2. Overtime rates will apply for work performed by part-time employees engaged pursuant to clause 8.l(ii) of this Agreement where such hours worked are in excess of full time hours worked by agreement with the employee. Such agreed hours will count for the purposes of leave accrual.”

[24] The final undertaking does not differentiate between volunteer or required additional hours. This is understandable given that at the hearing on 1 May 2013 the AMWU and an employee of Hospira made very clear that custom and practice at Hospira was that part time employees were never required to work additional hours and that all additional hours were worked by agreement.

[25] In an email to the Commission on 5 June 2013 the AMWU made the following submission in relation to the undertaking concerning part time employment:

“We maintain the view that no undertakings should in fact be required regarding part time employees. Our view is that the Agreement as read operates to incorporate all relevant Award terms for part time workers and that this, in combination with the wage rates and other benefits in the agreement ensure that the agreement will pass the BOOT test with respect to these employees. Our understanding is that current practice is that part time worker do receive overtime penalties for all work in excess of agreed hours. We are therefore concerned that the proposed undertaking may be taken to mean that part time workers must work full time hours before overtime rates will apply. We note further that it is not specified whether each day stands alone in this respect. Whatever the case may be, as the parties did not make this an issue in bargaining, simply put, there should be no change to current practice.”

[26] As can be seen from my analysis of the relationship between the Award and the Agreement, I do not agree with the proposition advanced by the AMWU that “the Agreement as read operates to incorporate all relevant Award terms for part time workers”. Therefore in my view undertakings were necessary to address the concerns I raised.

[27] I note the understanding that the AMWU has in relation to part time employees receiving “overtime penalties for all work in excess of agreed hours”.

[28] I read the undertaking offered by Hospira as confirming this understanding and confirming that all hours worked by a part time employee in excess of agreed hours will be paid at the overtime rate.

[29] I am satisfied that each of the requirements of ss186, 187 and 188 as are relevant to this application for approval have been met.” 33

[36] As the Agreed Facts set out, neither the subject of part-time employment nor the overtime entitlements of persons in part-time employment, were agitated during the bargaining for the current Agreement. The current Agreement as voted on by relevant employees covered by the current Agreement did not include provisions concerning part-time employment reflecting the undertakings that had been given in connection with the 2012 Agreement. Unsurprisingly given the undertakings accepted in respect of the 2012 Agreement, undertakings concerning part-time employment were sought by the Commissioner and were given by Hospira prior to the approval of the current Agreement.

[37] Paragraph 3 of the undertaking to the current Agreement is expressed in the same terms save for clause referencing as the undertaking in paragraph 2 to the 2012 Agreement.

[38] Although paragraph 2 of the undertaking to the current Agreement is not in express terms the same as paragraph 1 of the undertaking to the 2012 Agreement, it is to the same effect. Paragraph 1 of the undertaking to the 2012 Agreement has the effect of applying clauses 13.2 to 13.5 of the Award to part-time employees covered by the 2012 Agreement. Paragraph 2(a) of the undertaking to the current Agreement reproduces the text of clause 13.2 of the Award; paragraph 2(b) reproduces the text of clause 13.3 of the Award save for necessary modifications for the purpose of identifying classifications; paragraph 2(c) reproduces the text of clause 13.4; while paragraph 2(d) reproduces the text of clause 13.5 save for changes necessitated for the purposes of clause referencing.

[39] From all of this I infer that the concerns held by the Commissioner in respect of part-time employment under the current Agreement were the same concerns he held in respect of the 2012 Agreement and that the reason he held those concerns in respect of the current Agreement were essentially the same as those expressed by the Commissioner in the 2013 Decision, the relevant extracts of which were earlier produced. An email dated 10 April 2015 contained on the Commission’s file concerning the application to approve the current Agreement from a representative of Hospira to, amongst others, the AMWU also support this inference. That email is as follows:

“Hi all,

Last week I had a discussion with Commissioner Ryan who is reviewing our application to approve the Hospira Labs & Maintenance agreement. He expressed some concern with regard to part time employees and coverage as he did when the 2012 agreement was before him, and also clarification of Hospira’s default superannuation fund.

Given we provided these same undertakings for our 2012 agreement, and these were not points of negotiations recently, I have provided them directly again to the Commissioner. At the Commissioner’s request I have worded these to include the text from the Award…” 34

[40] The relevant undertakings given in relation to the current Agreement in response to the Commissioner’s concerns are, for the reasons set out earlier to the same effect as the relevant undertakings in relation to the 2012 Agreement.

[41] Before turning to resolving the proper construction of the provisions of the current Agreement the subject of the dispute, I should say something about the undertakings in respect of the 2012 Agreement and the current Agreement, the necessity for them and their effect.

[42] For my own part, I do not consider that clause 15.1.2 of the current Agreement to be inconsistent with clause 13 of the Award operating as an incorporated term. This is because, as I have earlier indicated, clause 15.1.2 is principally definitional. It describes that which is part-time employment. Clause 13 of the Award operates to allow part-time employment and confers specific rights to minimum hours of work per shift and entitlements to overtime for hours worked in excess of those that had been agreed at the outset of the part-time employment or which have been subsequently varied by agreement recorded in writing. On no view, in my respectful opinion, could clause 15.1.2 be said to give rise to cover the field inconsistency. To the extent that the subject matter of clauses 13.1 and 13.7 of the Award as incorporated are dealt with by clause 15.1.2 of the current Agreement and might be said to be inconsistent (a view I do not share), the latter provision would prevail, but only to the extent of inconsistency. Clause 15.1.2 of the current Agreement can otherwise be read comfortably with, or to use the terms of the current Agreement, applied wholly in conjunction with, the remainder of clause 13 of the Award operating as an incorporated term. There being no inconsistency, the remainder of clause 13 of the Award operating as an incorporated term, operates as a term of the current Agreement and thereby confers entitlements to part-time employees covered by the current Agreement on the same basis and set out in the Award.

[43] The same analysis, in my respectful opinion pertains to the 2012 Agreement.

[44] I also consider that the concerns expressed by the AMWU in its correspondence to the Commissioner on 5 June 2013 which is set out at [25] of the 2013 Decision, were correct both as to the operation of the 2012 Agreement vis-à-vis the incorporated Award term on part-time employment and the effect of the undertaking on the entitlement to overtime payments of part-time employees under the 2012 Agreement.

[45] In my view the undertakings concerning part-time employees both in respect of the 2012 Agreement and the current Agreement were neither necessary nor, on the construction I favour, capable of being accepted because the undertaking would likely cause financial detriment to any employee covered by the agreements. 35 Moreover, even if there be an inconsistency, as seems to have been the concern of the Commissioner, I do not consider that the relevant agreements did not pass the BOOT vis-à-vis part-time employees. By undertaking a simple analysis of the rates of pay in the 2012 Agreement compared to the rates of pay as at test time it is apparent that at “test time” the rate of pay for a C12 laboratory classification in the 2012 Agreement was 38.80% above the corresponding Award classification. A comparison of the remaining classifications in the 2012 Agreement produces higher corresponding percentage differentials. A similar conclusion can also be made concerning the current Agreement. The rate of pay for a C12 laboratory classification in the current Agreement as at “test time” was 42.16% above the rate of pay for the corresponding Award classification with the percentage differences increasing along the classification spectrum.

[46] Save for examples of highly speculative, theoretically possible, but unlikely practical part-time work patterns, it seems to me that the higher rates of pay in each agreement more than compensate for the work by part-time employees of additional hours beyond their unusual or contracted agreed hours. Any hours worked beyond 8 hours in any day would be paid at overtime rates as required by the overtime provisions of each agreement. This, in my view means that neither agreement, at the relevant test time, failed to pass the BOOT.

[47] All of this is of course obiter and not germane to the resolution of the dispute which is limited to a construction exercise in which I must accept that the undertaking to the current Agreement is taken to be a term of that agreement.

[48] On an ordinary grammatical reading of paragraph 3 of the undertaking in context, overtime rates will apply for work performed by part-time employees where such hours worked “are in excess of full-time hours worked by agreement with the employee”. The “excess” hours to which the undertaking is directed are those worked by agreement. As earlier indicated, the only indication of the meeting of full-time hours is to be found in clauses 39 and 49 of the current Agreement which provide that the “hours of work for a full-time Employee are 36 ordinary hours per week” for maintenance employees or “38 hours per week” for laboratory employees.

[49] It seems to me plain that the entitlement to overtime rates of pay for part-time employees pursuant to the undertaking commences only after an employee works in excess of the number of ordinary hours worked by a full-time employee under the current Agreement, that is in excess of 36 or 38 ordinary hours per week as the case requires.

[50] That this is the proper construction of the undertaking is made all the more clear when account is taken of the undertaking contained in paragraph 2, which as I have discussed above, reproduces the text (save for referencing alterations) of clauses 13.2 to 13.5 of the Award but not clause 13.8. The latter clause provides for overtime to be payable to a part-time employee for all hours that the employee works in excess of the hours that had been agreed at the commencement of the employment or that had been altered by agreement in writing subsequently. In place of that clause, the undertaking in paragraph 3 was proffered and accepted. That undertaking operates in a materially different way to clause 13.8 of the Award operating as an incorporated term.

[51] The AMWU’s case, in essence, is that the current Agreement entitles a part-time employee to overtime in circumstances where hours are worked beyond those that are the part-time contracted agreed hours of work. It is that, which clause 13.8 of the Award in essence provides. In my view, but for the undertaking, it is also that which the current Agreement read, wholly in conjunction with the incorporated Award terms dealing with part-time employment would provide. But, the undertaking does not so provide. In my view, the undertaking operates as an express provision of the current Agreement (within the meaning of clause 6) and as such, it is inconsistent with the overtime provisions of clause 13.8 of the Award operating as an incorporated term. The latter must give way and the former must prevail.

[52] For the reasons given the answer to the agreed question is no and the dispute is determined accordingly.

DEPUTY PRESIDENT

Written submissions:

Statement of Agreed Facts and Applicant’s Outline of Submissions dated 14 September 2017

Respondent’s Outline of Submissions dated 5 October 2017

Applicant’s Submissions in reply dated 12 October 2017

<PR600142>

 1   Hospira, About Hospira (24 September 2014) <   Statement of Agreed Facts dated 14 September 2017

 3   [2014] FWCFB 7447

 4   [2017] FWCFB 3005

 5   Applicant’s Outline of Submissions dated 14 September 2017 at [2]

 6   Ibid at [14]

 7   2012 Agreement at clause 8.1(ii)

 8   Applicant’s Outline of Submissions dated 14 September 2017 at [15]

 9   [2013] FWCA 3663

 10   Ibid at [16]

 11   Ibid at [17]

 12   Ibid at [26] – [28]

 13   Applicant’s Outline of Submissions dated 14 September 2017 at [21]

 14   Respondent’s Outline of Submissions dated 5 October 2017 at [67]

 15   Applicant’s Outline of Submissions dated 14 September 2017 at [22]

 16   Ibid at [24]

 17   Ibid

 18   Respondent’s Outline of Submissions dated 5 October 2017 at [3]

 19   Ibid at [17]

 20   Ibid at [19] and [24]

 21   Ibid at [43]

 22   Ibid

 23   Ibid at [45]

 24   Ibid

 25   Ibid at [50] – [54]

 26   Current Agreement at clause 25

 27   [2015] FWCA 2536

 28   Current Agreement at pages 51 – 52

 29   2012 Agreement at clause 3.9

 30   Ibid at clause 8

 31   Ibid at clause 36 and clause 47

 32   Ibid at page 38

 33   [2013] FWCA 3663

 34   Email correspondence from representative of Hospira to, amongst others, “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU) and Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia, dated 10 April 2015 at 2:27PM

 35   Fair Work Act 2009 (Cth) s 190(3)

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