“Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU) v Komatsu Australia Pty Ltd
[2024] FWC 601
•6 FEBRUARY 2024
| [2024] FWC 601 |
| 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
Komatsu Australia Pty Ltd
(C2023/7998)
| DEPUTY PRESIDENT BEAUMONT | PERTH, 6 FEBRUARY 2024 |
Alleged dispute about any matters arising under the enterprise agreement – [s186(6)]; meaning of ‘nominated’; ordinary hours of work.
Issue and outcome
The Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (AMWU) has made an application under s 739 of the Fair Work Act 2009 (Cth) (the Act) and the dispute resolution procedure in clause 9 of the Komatsu Australia Perth & Bunbury Enterprise Agreement 2022[1] (the Agreement).
Komatsu Australia Pty Ltd (Komatsu) is in the business of assembling, repairing, modifying, and manufacturing, equipment, including trucks used in mining and construction, as well as their parts and components. In 2022, it introduced a new roster for those employees working on the Pre-Delivery Inspection (PDI) truck line at Komatsu’s operations in Welshpool, Western Australia (the site). The new roster comprised of seven day shifts (6.00AM to 6.00PM), seven days off, seven night shifts (6.00PM to 6.00AM) and seven days off (7:7:7:7 roster). Each shift comprised of 12 hours, with four crews rotating through the roster cycle. The parties accept that employees on the 7:7:7:7 roster are continuous shift workers.
The AMWU takes issue with the Respondent’s rate of pay for the night shift only, which it argues Komatsu currently pays on the basis of eight ordinary hours having been worked and, in addition, two hours at time and a half and two hours at double time. The AMWU is of the opinion, based on its interpretation of the subclause 18.2 of the Agreement, that Komatsu should be paying the employees at double time rates after eight ordinary hours have been completed on the night shifts in question.
Therefore, the question before the Commission has been articulated by the parties in the following terms:
Are employees on the 7:7:7:7 roster at the site entitled to be paid double time rates for all hours worked beyond eight hours on a night shift?
The Agreement was approved on 16 March 2023 and will reach its nominal expiry date on 23 March 2026. The AMWU is covered by the Agreement, because, as noted in the approval decision, it was a bargaining representative for the Agreement and gave notice to the Commission under s 183 of the Act that it wanted to be covered by it.
It is common ground between the parties, and I agree, that the Commission has jurisdiction to determine the present dispute. The dispute resolution procedure is found in clause 9 of the Agreement. It applies to a ‘matter arising under the agreement’ or the ‘National Employment Standards’. Subclause 9(5) provides that, if the matter is not resolved in the first stage, including by conciliation, the Commission may resolve the matter by arbitration. While the dispute resolution procedure at subclause 9(2) allows an employee who is a party to the dispute to appoint a representative for the purposes of the dispute resolution procedure and subclause 9(3) speaks of parties attempting to resolve the dispute at the workplace level by discussion between employee(s) and supervisor/management, I am of the view that this does not negate the AMWU making the application under s 739. In this respect, I rely upon and adopt the reasoning of the Full Court of the Federal Court in Energy Australia Yallourn Pty Ltd v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union.[2]
It is understandable that the parties fell into dispute. First, Komatsu’s communication to its employees about the treatment of the night shift does not necessarily align with the operation of the Agreement. Second, the Agreement has not been easy to interpret. In part, and as is the case with many industrial instruments of this type, there is imprecision with the drafting – such that terms are adopted inconsistently or otherwise it is difficult to discern what provisions apply in circumstances where a particular roster cycle is not expressly prescribed. Notwithstanding, guidance has been gleaned from the principles that apply to the interpretation of such instruments, as outlined at paragraph [33] of this decision.
Briefly stated, the answer to the question asked is No. Detailed reasons for this answer follow.
Background
The broader context and background to the matter is set out below.
It is noted that the Commission was assisted by the evidence of Mr Gordon Entwisle, AMWU site delegate, and Mr Neil Francis, Workshop Technician, on behalf of the AMWU. Mr Maki Danalis gave evidence on behalf of Komatsu. The witnesses for the AMWU were not required to give evidence at the hearing, their statements taken as read.
It is uncontroversial that the 7:7:7:7 roster commenced on 1 October 2022 and that prior to its introduction there had been dispute between the parties regarding consultation about the roster’s introduction and whether the roster could be introduced under the terms of the predecessor Agreement, the Komatsu Australia Perth and Bunbury Enterprise Agreement 2020 (2020 Agreement). In fact, the AMWU had lodged a dispute in the Commission regarding the introduction of the 7:7:7:7 roster, pursuant to the 2020 Agreement.
The rationale for the introduction of the 7:7:7:7 roster was premised on the need to hasten the production of large trucks and mining equipment within the PDI area (the truck line). Mr Danalis gave evidence that in about mid-June 2022, the demand for Komatsu equipment, particularly large trucks such as HD785s, HD1500s, 830Es and 930Es, had reached unprecedented levels due to several significant fleet orders from large mining customers.[3] Mr Danalis said the truck line delivered the finished product quicker as it avoided the loss of time due to the movement of equipment and components around the existing facility,[4] and as a 24 hour operation, productivity levels kept up with demand.
With the introduction of the 7:7:7:7 roster, reassurance was provided to employees that it was not compulsory to work the roster, there would be no job losses and, in fact, Komatsu would be looking to increase the size of its workforce.[5]
Attached to the witness statement of Mr Danalis was a document titled ‘Expressions of Interest – 7:7 7:7 Roster’ (EOI). The EOI set out, amongst other considerations, the roster arrangement, the provision of an 8-hour shift change paid when coming off night shift, 25% loading on shifts, and an average of 42 hours per week.[6] The EOI further provided that all hours worked in excess of 8 hours each day would be paid at the overtime rates as per the Agreement, with the current overtime rates amounting to time and a half for the first two hours and double time for all hours worked thereafter.[7] In respect of superannuation, the EOI clarified that in accordance with the Agreement, superannuation would be paid based on a 38-hour week.[8]
The 7:7:7:7 roster commenced operation on about 1 October 2022 on the truck line only. Employees in other parts of the business were unaffected by the introduction of the roster.
With respect to the organisation of the business, work at the site is understood to be grouped into three areas or units:
a) Perth Service – an area responsible for rebuilds on machines which have already been sold to customers (approximately 50 employees are allocated to this area);
b) Remanufacturing (colloquially referred to as ‘Reman’) – where the Respondent’s products are stripped down and replaced with new parts and components to extend their lives or to resell machines (approximately 115 employees are allocated to this area); and
c) PDI – where the focus is on the assembly, modification and fitting of accessories to machines originating from Japan, America or Germany (approximately 180 employees are allocated to this area).[9]
Separate to the number of employees above, there were, in addition, approximately 70 apprentices who rotated across each organisational unit.[10]
At the time of filing materials for the purpose of the hearing, approximately 80-100 Komatsu employees were said to be engaged at the site in the assembly and modification of HD1500S, HD785, 830E and 930E mining and construction trucks in the PDI.[11]
The day-to-day duties of the relevant employees on the truck line included, inter alia:
a) assembling and fitting factory and aftermarket supplied parts to chassis and engines;
b) modifying handrails on trucks;
c) assembling wheel motors;
d) making GPS and aerial modifications for trucks;
e) fabricating brackets;
f) performing wiring work on trucks;
g) painting trucks;
h) performing various electrical work on trucks; and
i) performing boiler making work on trucks.
Mr Francis added that as a workshop technician his work required him to fit cabs, hydraulic hoses, and plumb brake lines, among other assembly tasks related to trucks.[12]
Of the 100 employees working in the truck line who started on the 7:7:7:7 roster, 80 were said to have commenced employment after Komatsu had called for expressions of interest to work in the area, in July 2022. Those employees were said to have been engaged on the basis that the 7:7:7:7 roster would be introduced. As noted, no existing PDI workers were compelled to work on the 7:7:7:7 roster, with only volunteers having been put onto the roster.
The employees on the truck line included high voltage electricians, boilermakers, painters, automotive electricians, technicians, workshop technicians, workshop assemblers, trades assistants, material handlers, and leading hands of all types.
In September 2022, negotiations commenced between Komatsu, the AMWU, the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia and employee representatives, for an enterprise agreement to replace the 2020 Agreement. A ballot for the new agreement was held over 15 and 16 February 2023 resulting in the making of the Agreement and it was approved on 16 March 2023, taking effect on 23 March 2023.
Under the Agreement, Komatsu have paid, and continue to pay, the truck line employees for each 12 hour shift as follows:
(a) eight hours at the single time rate; plus
(b) two hours at time and a half (1.5T) rate; plus
(c) two hours at double time (2T) rate; plus
(d) shift loading of 25% on night shift.[13]
Komatsu considers that those amounts exceed what is strictly required to be paid in accordance with the Agreement. In its view, it is paying overtime after eight hours rather than after 10.86 hours. The 10.86 hours is, according to Komatsu, an approximation of the number of ordinary hours per 12 hour shift – based on the following approach:
a) an average of 38 ordinary hours per week are worked over a four week roster cycle;
b) ordinary hours under the 2020 Agreement and under the Agreement are 38 hours per week;
c) a full time employee works 152 ordinary hours over the course of a four week roster cycle; and
d) fourteen shifts are worked over the roster cycle, therefore there are 10.857 ordinary hours per shift if the hours are averaged consistently across the shift pattern.[14]
Whilst Komatsu noted that no employee was required to work the 7:7:7:7 roster, Mr Francis gave evidence that he had never been approached by Komatsu about varying his ordinary hours to anything above eight hours per day,[15] and Mr Entwisle said that based on his discussions with employees on the truck line and his knowledge of the site as an AMWU delegate and a representative of the Joint Consultative Committee, he understood there was no agreement in place between Komatsu and any of the employees on the truck line to allow for more than eight ordinary hours in a shift for employees in that area.[16]
In respect of the ordinary hours of work, several of Mr Francis’ payslips had been provided. It was pointed out that for a public holiday, Mr Francis had been paid for 7.6 hours at normal time and that in respect to personal leave, 7.6 hours had been paid.
Consideration
3.1 Submissions of the parties
The AMWU stated it understood that Komatsu’s current practice regarding the employees working the 7:7:7:7 roster on the truck line was as follows:
a) when an employee on the PDI truck line works a 12-hour shift, that shift is comprised of eight ordinary hours (some of which go towards an RDO) and four additional hours.[17]
b) workers engaged on the 7:7:7:7 roster work both day shifts and night shifts; and[18]
c) Komatsu pays the four additional hours in each shift at time and a half for the first two hours, and double-time for the second two hours per shift – regardless of whether the shift is a day shift or a night shift.[19]
The AMWU submitted that if its understanding of the practice is correct, then it is accepted that Komatsu is properly applying clause 18.1 of the Agreement when the employees are on day shift. This is because the day shift hours do not fall within the definition of ‘shift work’ in clause 7 of the Agreement. However, where the parties are at odds is in relation to the proper payment to be made by Komatsu to the relevant employees for additional hours that fall on a night shift.
On this point, the AMWU pressed that Komatsu was applying clause 18.1 of the Agreement to additional hours on night shifts, which was contrary to the Agreement, and that instead Komatsu should be applying clause 18.2 of the Agreement to the additional hours worked on the night shifts. This would mean that the employees in question are entitled to be paid at double time rates for all hours worked beyond eight hours on a night shift.
Komatsu contends that what essentially the AMWU presses, is that when an employee works on the truck line, they work eight ordinary hours and four additional hours on every shift. The ‘additional hours’ worked in each twelve hour shift must, according to the AMWU, be paid at double time rates on night shift pursuant to clause 18.2 of the Agreement.
Komatsu submitted that this approach should be rejected, as the ordinary hours of the employees on the truck line are an average of 38 hours per week, or 10.86 ordinary hours per 12 hour shift.
3.2 Principles of interpretation
As has been identified by the Full Bench on several occasions, the principles applicable to construing an enterprise agreement may be briefly stated.[20] The task of construing such an instrument begins with a consideration of the ordinary meaning of the words, read in context, and taking into account the evident purpose of the provisions or expressions being construed. Relevant context will include other provisions of the instrument, read as a whole, and the disputed provision’s place and arrangement in the instrument. The statutory framework under which the instrument is made, or in which it operates may also provide relevant context, as might an antecedent instrument or instruments from which a particular provision has been derived. Regard may be had to relevant context and surrounding circumstances to determine whether there is any ambiguity in a provision of the instrument. The language of the instrument is to be understood in the light of its industrial context and purpose, not in a vacuum or divorced from industrial realities. But context is not itself an end, and a consideration of the language contained in the text of the relevant parts of the instrument remains the starting point and the end point in the task of construction. A purposive approach to interpretation is appropriate, not a narrow or pedantic approach.
3.3 Interpretation of the Agreement
It is uncontroversial that clause 2 sets out that the Agreement covers Komatsu,[21] the AMWU[22] and the:
[e]mployees of the Service, PDI and Remain Division of the Company, and engaged in work in the Perth and Bunbury areas in the South West of Western Australia, employed in the classifications contained in Appendix 1 of this Agreement.[23]
The terms of the Manufacturing and Associated Industries and Occupations Award 2020[24] (Manufacturing Award) are incorporated into the Agreement as provided by subclause 3.1 of the Agreement:
[t]he terms of the Manufacturing and Associated Industries and Occupations Award 2020 (“the Award”), as varied from time to time, are incorporated into this Agreement. Upon incorporating Award terms into the Agreement, the incorporated Award terms are to be read as altered with the appropriate changes to make them provisions of the Agreement rather than provisions of an award. In this Agreement references to the Award shall mean the Award as incorporated into the Agreement unless the context requires otherwise. If an incorporated Award term is inconsistent with an express term of this Agreement, the express term in the Agreement prevails over the incorporated Award term to the extent of the inconsistency.
Clause 7 sets out that ‘Shift Work’ means:
work carried on outside normal scope of hours e.g. a roster outside the hours of Monday to Friday 6.00am to 6.00pm.
The meaning attributed to ‘Continuous Shift Work’ can also be found in clause 7 as follows:
work carried on with consecutive shifts throughout the 24 hours of each of at least six consecutive days without interruption except for breakdowns or meal breaks or due to unavoidable causes beyond the control of the employer.
Under clause 12 – ‘Working Hours and Rostered Days Off’, subclause 12.1 – refers only to a ‘normal shift’ with the first hour being between 6.00AM and 7.00AM, and that the first eight hours of any shift (between 6.00AM and 6.00PM) will be worked and paid as normal/ordinary hours:
The first hour of any normal shift between 6.00am and 7.00am will be paid as normal time and due to some of our customer requirements, some work may be required to be performed after the presently adopted normal hours 7.00am to 3.30pm. Therefore, it may be necessary to schedule some employees to start later in the morning to be able to meet some of these customer’s requirements. Once the starting time is agreed (between Komatsu and employees) then, the first eight hours of any shift (between 6.00am and 6.00pm) will be worked and paid as normal/ordinary work hours.
At subclause 12.2, it is stated:
Employees will work eight hours on each working day (Monday to Friday) with (0.4) hours accruing each day to provide for a rostered day off (RDO), paid at 7.6 hours ordinary time in each four-week cycle. Employees will continue to work an average of 38 hours per week, that is, three weeks of 40 hours and one week at 32 hours, a total of 19 days during a four-week work cycle.
The remaining subclauses (12.3-12.5) address the accrual of, application for, and arrangement of, RDOs, with subclause 12.5 setting out:
Five (5) RDOs (7.6hrs x 5 days = 38.00 hrs) can be accrued. Once five (5) RDOs (38.00 hrs) are accrued subsequent RDO daily accrual (0.4 Hrs) will be paid as over time until RDO bank is reduced below the five (5) RDO’s (38.00hrs). This information is on each individual pay slip and will be monitored as per pay cycle.
Komatsu submitted that in the case of a full-time employee, such as the employees involved in the present dispute, the Agreement provided, at clause 12, that the hours of work are an average of 38 hours per week.[25] Expanding upon this contention, Komatsu stated that the word ‘nominated’ in clause 18 enabled it to operate both with respect to the ordinary hours of a full-time employee specified in clause 12.2, and the ordinary hours of a part-time, or fixed term part-time employee, which are less than the full-time hours of a full-time employee and will be specified at engagement: see subclauses 10.1.2 and 10.1.4.
Komatsu added that if there was any doubt that the 38 hours, as referred to in subclause 12.2 were the weekly ordinary hours of all workers, subclause 13.11, made it clear that this was the case, the subclause providing:
13.11 Where a ten-hour break is taken after a particularly long working day (or shift) and this ten-hour break extends into the next working day (or shift) then the proportion of that working day (or shift) will be deemed to have been worked and will be paid for at ordinary time to ensure there is no loss of a 38 hour week.
Turning to subclause 13, that clause of the Agreement is titled ‘Shift Work Arrangements’ and provides as follows:
13.1 The parties agree that at certain times during the year, because of workload or
emergencies, there may be a need to introduce afternoon or night shifts.13.2 Where an employee is required to work a rostered shift which has the majority of working hours falling outside of the ordinary day work hours, the employee shall be paid an additional shift loading calculated on the employee's base rate of pay for all hours worked on that shift.
13.3 An employee whilst engaged on any rostered afternoon or night shift shall be paid for such shift 25% more than his/her ordinary rate.
For the purposes of this clause:
· “afternoon shift” means a shift of ordinary hours finishing after 6.00pm and at or before 12am/midnight.
· “night shift” means a shift of ordinary hours finishing after 12am midnight and at or before 8.00am.
13.4 Where an employee engaged as a day worker is transferred to shift work for a period of less than 5 consecutive nights, those hours worked shall count towards the employee's ordinary hours for that week, however the employee shall be paid at overtime rates (i.e. the first two hours at time & a half followed by double time).
13.5 Clause 13.4 does not apply where, at the Company’s discretion, a roster is implemented that consists of 5 day shifts (Monday to Friday), weekend off, 4 night shifts (Monday to Thursday), followed by a shift change paid at 8 hours of ordinary time for the Friday and the employee then not being required to attend work due to the weekend. Each shift on this roster will be a minimum of 10 hours. To avoid doubt, the shift loading as per Clauses 13.2 and 13.3 will continue to apply to this roster.
13.6 Employees will be required to work shift work as requested by the Company subject to the Company providing the employee at least 24 hours’ notice of the requirement to work shift work if on field service work or one week’s notice for an assembly worker.
13.7 During Shift Work, when a public holiday arises, the allowances for that day will be taken from the commencement of the shift not the ending of the shift. For example: when a shift commences on 24 December (6.00pm) and completes on 25 December (6.00am), then the pay rate will be that paid @ 24 December.
13.8 All employees, when changing from one shift to another shall observe a minimum ten hour break commencing at the conclusion of the previous shift (including any overtime worked beyond the normal completion of that shift) and shall be released from duty without loss of pay for rostered or ordinary hours falling within the ten hour break.
13.9 In the event that the Company considers it necessary to amend work hours, shifts and or roster arrangements, such amendments are to be done after consultation with affected employees in accordance with Clause 21.1(1)(b). For clarification, amendments to work hours, shifts and roster arrangements planned for a duration of three (3) months or more are considered a major change as defined in Clause 21 and will also involve additional consultation with employee representatives and the Joint Consultative Committee (JCC) in accordance with clause 8.3.
13.10 A ten-hour break is to be taken at the end of a day's work or end of a shift. Should work be requested before the completion of a ten-hour break then the employee will be paid at double time for all hours worked until they are released for ten-hour break.
13.11 Where a ten-hour break is taken after a particularly long working day (or shift) and this ten-hour break extends into the next working day (or shift) then the proportion of that working day (or shift) will be deemed to have been worked and will be paid for at ordinary time to ensure there is no loss of a 38 hour week.
13.12 The requirement to work without a ten-hour break should in all practical
circumstances be approved by the appropriate Departmental Manager and by
mutual agreement with the relevant employee.13.13 In the event that 5 or more employees worked during the nightshift in the Assembly/Workshop or the Component Rebuild area, a temporary Komatsu employee Leading Hand (Safety Rep, First Aid person) will be appointed. It is accepted by both parties that Komatsu employees will have preference for all appointments.
13.14 Employees working a 12-hour day shift, or an afternoon or night shift of any length, shall be entitled to a 30-minute paid meal break during each shift worked.
13.15 Any Employee who works afternoon, night or continuous shift will be entitled to be paid a shift change of 8 hours ordinary time on any day including weekends before returning or changing to day shift, or moving onto R&R.
Komatsu pressed that the content of clause 13 of the Agreement did not provide any basis for thinking that the ordinary hours of a full-time employee decrease if the employee is working shift work, and that the clause did not indicate that the ordinary hours of such employees may not be averaged. Komatsu pointed to subclause 13.14, which contemplated a night shift of any length, noting that an averaging of hours was in order to avoid rosters of excessive total hours over the course of a cycle.
Turning first to subclause 12.1, there are several textual matters which make clear that the subclause does not contend with a roster such as the 7:7:7:7 roster, but instead addresses work performed Monday to Friday where the work:
a) is performed within set temporal parameters;
b) where those temporal parameters may vary; and
c) attracts a particular rate of pay for work performed within those temporal parameters.
Addressing first the temporal parameters for the performance of work, the span of hours contemplated by the subclause is between 6:00AM and 6:00PM. However, ‘normal hours’ are considered to be 7:00AM to 3:30PM. That is not to say that those ‘normal hours’ cannot be varied. The subclause expressly provides for a start time other than 7:00AM – such as 6:00AM or after 7:00AM – where the start time has been agreed between Komatsu and employees. As to the provision of the rate of pay, the clause makes it clear that the first hour of any normal shift between 6:00AM and 7:00AM will be paid as normal time, and that the first eight hours of any shift (between 6:00AM and 6:00PM) will be worked and paid as normal/ordinary work hours. The clause utilises ‘normal’ interchangeable with ‘ordinary’ such that normal hours of work are the ordinary hours of work and for an employee working between the hours of 6.00AM and 6.00PM, the first eight hours of any shift is worked and paid at ordinary work hour pay rate.
Subclause 12.2 speaks of employees working eight hours on each working day (Monday to Friday) with (0.4) hours accruing each day to provide a rostered day off, paid at 7.6 hours ordinary time in each four week cycle. It further provides that employees will continue to work an average of 38 hours per week, that is, three weeks of 40 hours and one week at 32 hours, a total of 19 days during a four week work cycle. Of course when an employee works a 7:7:7:7 roster they are not confined to working Monday to Friday and their work extends to 14 shifts over a 28 day roster cycle.
In my view, subclauses 12.1 and 12.2 do not provide express guidance on the ordinary hours of work in respect of the 7:7:7:7 roster. The remaining subclauses of clause 12 similarly do not assist. These subclauses (subclauses 12.2-12.4) contend with the accrual of RDOs (pursuant to working the arrangements described in subclauses 12.1 and 12.2) and the notification of absences (subclauses 12.6.1 and 12.6.2).
It follows that Komatsu’s argument that clause 12, particularly subclauses 12.1 and 12.2 are applicable to all full-time employees, including those working the 7:7:7:7 roster, cannot be sustained.
Supporting the contention that clause 12 does not address circumstances of shift work, are the definitions attributed to the terms ‘Shift Work’ and ‘Continuous Shift Work’ in clause 7 of the Agreement. It is unremarkable that these definitions do not mirror the working arrangements described in subclauses 12.1 and 12.2, and it is evident that the employees on the 7:7:7:7 roster are working, a ‘Shift Work’ arrangement, and are performing work in accordance with a ‘Continuous Shift Work’ arrangement.
It is uncontroversial that the Agreement does not expressly refer to the particular roster configuration over which the parties are in dispute. However, that is not to say that clause 13 of the Agreement does not expressly address shift work arrangements and it is evident, in my view, that the Agreement allows for the introduction of new shift arrangements or the amendment of hours of work.
On its face, subclause 13.1 of the Agreement may be read as limiting the introduction of afternoon or night shifts to certain circumstances. However, the subclause essentially provides consensual acknowledgement by those covered by the Agreement that due to workload or emergencies, there will be need, on occasion, to introduce afternoon and night shifts. Subclauses 13.5, 13.6 and 13.9 directly deal with the introduction of such shifts.
Subclause 13.5 addresses circumstances where, Komatsu, at its discretion, implements a roster of five day shifts, two days off, and four night shifts followed by a shift change paid at eight hours of ordinary time for the Friday – with non-attendance for the last weekend in that cycle. The subclause further provides that each shift on this roster will be a minimum of 10 hours and that to avoid doubt, the shift loading as per subclauses 13.2 and 13.3 will ‘continue’ to apply to this roster.
Subclause 13.6 addresses circumstances where an employee is required to work shift work at Komatsu’s request and the employee has been informed of that requirement with a provision of notice, whether in the area of field service work or assembly work.
Subclause 13.9 deals with an amendment to work hours, shift and/or roster arrangements, requiring that such amendments are to be done after consultation with affected employees, and clarifies that amendments to work hours, shift and roster arrangements planned for a duration of three months or more are considered a major change, as defined in clause 21 of the Agreement, and will involve additional consultation.
As observed, the three preceding subclauses all contemplate changes to work arrangements made by the employer. However, only one of those subclauses, subclause 13.5, is prescriptive to the extent that it expressly refers to a particular roster arrangement and the payment for that arrangement or roster pattern. The roster arrangement contemplates a shift length of a minimum of ten hours worked Monday to Friday with a weekend off and then four night shifts worked Monday to Thursday with three days off – albeit that there is a shift change. For the following reasons, it therefore proves necessary for the subclause to clarify that subclauses 13.2 and 13.3 will ‘continue’ to apply to this roster.
The word ‘continue’ may, on first blush and in isolation, appear odd. However, its evident purpose becomes clear when one considers subclauses 13.2, 13.3 and 13.4. Subclause 13.2 addresses circumstances where Komatsu has required an employee to work a rostered shift where the majority of working hours on some shifts, at least, fall outside of the ‘ordinary day work hours’. To understand what constitutes the ‘ordinary day work hours’ in the context of this subclause, it is first necessary to revert to subclauses 12.1 and 12.2, which inform that the first eight hours of any shift between 6:00AM and 6:00PM will be worked and paid as normal/ordinary work hours and that employees will work an average of 38 hours per week (Monday to Friday). ‘Ordinary day work hours’ are therefore those eight hours worked within the parameters of 6:00AM to 6:00PM on Monday to Friday each week (accumulating to an average of 38 ordinary hours).
That the Agreement refers to 38 hours is to be understood within the statutory context of Part 2-4 of the Act and Part 2-2 of the Act. An enterprise agreement must not exclude the operation of the National Employment standards,[26] one of which is that the maximum hours of work for a full-time employee is 38 hours plus reasonable additional hours.
Returning to clause 13.2, if the majority of working hours fall outside of the ‘ordinary day work hours’, then those hours attract an additional shift loading calculated on the base rate of pay, as provided in clause 13.3. Regarding the night shift in question, it is evident that the hours worked on such night shifts fall outside of the ‘ordinary day work hours’, hence triggering the operation of subclause 13.3.
Subclause 13.3 states that where an employee works a night shift, meaning a shift of ‘ordinary hours’ finishing after 12:00AM and at or before 8.00AM, then that shift attracts 25% more than the ordinary rate. Whilst the ‘ordinary day work hours’ take their meaning from subclauses 12.1 and 12.2 of the Agreement, as to what constitutes the ‘ordinary hours’ in the context of the subclause requires further consideration. However, before embarking on what constitutes the ‘ordinary hours’ for the purpose of ‘night shift’ under subclause 13.3 , it is timely to consider subclause 13.4 and then return to subclause 13.5.
Subclause 13.4 refers to circumstances where an employee temporarily transfers onto shift work for a period of less than five consecutive nights. The subclause provides that hours worked on those nights are counted toward ordinary hours for that week and that the employee will be paid at overtime rates for the hours worked. The clause is clearly not relevant to circumstances where employees work a 7:7:7:7 roster, as the period of consecutive night shifts on such roster cycles is not less than five.
Clause 13.4 refers to a particular roster pattern where only four night shifts are worked within a cycle. It is in that context that subclause 13.5 clarifies, to the extent that there was any doubt, that the shift loading as per subclauses 13.2 and 13.3 will ‘continue’ to apply to the roster set out in subclause 13.5. What is evident from that subclause, is that this roster pattern, notwithstanding it consists of less than five consecutive night shifts, attracts the operation of subclauses 13.2 and 13.3. Had the roster pattern extended to five or more consecutive night shifts then the clarification in subclause 13.5 would not be required. That is because it is implicit within the subclause that five or more consecutive night shifts attract the operation of subclauses 13.2 and 13.3.
If one further considers the operation of subclause 13.5, it is evident that the roster pattern is such that a minimum of 10 hours is to be worked on each shift. Over the course of two weeks the employee will work a minimum of 90 hours on that roster, inclusive of four night shifts. Employees working this roster are paid an additional ‘shift loading’ calculated on the employee’s base rate of pay ‘for all hours worked on that shift’. When read in isolation, subclause 13.2 would seem to require that if a shift was of 10 hours or even 12 hours then ‘all hours’ worked in the shift attract ‘shift loading’.
However, the Agreement describes ‘shift loading’ in subclause 13.3, setting out that whilst engaged on any rostered night shift an employee shall be paid for that shift, 25% more than the ordinary rate – the subclause thereafter specifying that ‘night shift’ means a shift of ‘ordinary hours’ finishing after 12:00AM midnight and at or before 8:00AM. It is explicit in the definition that the shift consists of ordinary hours and those ordinary hours conclude at a certain time to constitute a night shift. The subclause does not negate hours additional to the ordinary hours being worked as part of the shift. Therefore, it is open to reason that the night shift may comprise of both ordinary hours and additional hours and it can be safely concluded that the ordinary hours worked on a night shift attract an additional 25% shift loading on the ordinary rate of pay. I find that this is the case for the roster, so described in subclause 13.5 and for other rosters inclusive of night shift that Komatsu might seek to introduce (subject of course to clause 13.4).
Favouring this interpretation is subclause 10.4.1 of the Agreement, which sets out that on termination of employment payment in lieu of notice can be made. It notes that such payment is based on the amount the employee would have received if their employment had continued until the end of the required notice period worked out on the basis of the employee’s ordinary hours of work. However, the subclause explains that this is the case even if the ordinary hours of work are not ‘standard hours’. As to what is to be made of the term ‘standard hours’, the subclause clarifies that the employee will receive the amounts ordinarily payable to the employee in respect of those hours, including allowances, loadings, and penalties. The term ‘standard hours’ can be taken to mean ‘ordinary hours’ – or hours at work that would usually be paid at ordinary time rates or base rates. So much is evident from clause 15 of the Agreement that addresses ‘Komatsu Approved Training and Travel’. That clause sets out that all training or formal training will be paid at ‘standard time only (base rate)’. It can therefore be seen that ‘ordinary hours’ may be worked outside of the parameters set by subclauses 12.1 and 12.2 and still be considered ‘ordinary hours’ notwithstanding attracting a loading, such as that referred to in clause 13.3.
At this point it remains unclear what the ordinary hours are when working a shift work pattern. However, subclause 13.11 indirectly addresses the issue when referring to the taking of ten hour breaks, the subclause stating:
13.11 Where a ten-hour break is taken after a particularly long working day (or shift) and this ten hour break extends into the next working day (or shift) then the proportion of that working day (or shift) will be deemed to have been worked and will be paid for at ordinary time to ensure there is no loss of a 38 hour week.[27]
The subclause distinguishes between a working day (clause 12) and a shift (clause 13), observing that when a 10 hour break encroaches upon the next shift (or working day) then the proportion of that shift will be deemed to have been worked and will be paid at ordinary time rates to ensure there is not loss of a ‘38 hour week’. The purpose of the clause appears to be the safeguarding of the 38 hour week irrespective of whether day work or shift work is performed. Further, it is significant that those 38 hours are deemed to have been worked and are to be paid at ordinary time, an unequivocal indication that those 38 hours constitute the ordinary hours a week for a shift worker or continuous shift worker as the case may be.
At this stage, I am satisfied that employees working the 7:7:7:7 roster are continuous shift workers and the roster cycle, comprises in part, seven night shifts where the majority of working hours of those night shifts fall outside of the ‘ordinary day work hours’. Further, each night shift consists of ordinary hours of work and may also consist of additional hours. The ordinary hours attract a 25% loading on the ordinary rate of pay. Further, whether a continuous shift worker or shift worker, the ordinary hours each week are 38 – a point that will require further consideration.
The parties hold disparate views on the number of ‘ordinary hours’ that comprise a night shift. The AMWU appears to proceed from the basis that employees on the truck line whilst working a 12-hour shift, work eight of those hours as ‘ordinary hours’ and the remaining four hours constitute ‘additional hours’, as contemplated by subclause 18.2 of the Agreement. In contrast, Komatsu argues that when a worker works the 7:7:7:7 roster, the ordinary hours on a 12 hour night shift are 10.857 hours.
The Agreement expressly contemplates employees working hours additional to their ordinary hours. In fact, employees covered by the Agreement acknowledge that they will be requested to work reasonable additional hours with regard to the factors identified in the incorporated Award (subclause 32.9 (a and b)). Clause 18 of the Agreement sets out:
An employee may be requested to work hours in addition to the nominated ordinary hours and if so, they shall be paid at the rates prescribed in this Agreement.
18.1 All additional hours worked on Monday to Saturday inclusive other than shift work shall be paid at time and one half for the first two hours and double time thereafter, excluding callouts.
18.2 Additional hours worked on a Sunday or on shift hours shall be paid at double time rates.
18.3 Additional hours worked on any day stand alone.
18.4 If an employee (other than a casual employee) performs approved work on a public holiday they shall be paid for the hours worked in accordance with Clause 29 of this Agreement.
Employees acknowledge that they will be requested to work reasonable additional hours with regard to the factors identified in the incorporated Award (clause 32.9 (a and b)).[28]
The term ‘nominated ordinary hours’ warrants further consideration because it is the number of hours that fall both within that term and outside of those hours that are contentious. In its written submissions the AMWU appears to proceed on the basis that the ‘nominated ordinary hours’ for each night shift amount to eight. Its premise for doing so, is its understanding that Komatsu applies this in practice. Komatsu argues that the Applicant has premised its reasoning in this respect on the fact that it pays employees loaded rates for four hours of their 12 hour night shift (as expressed in the EOI). Komatsu submitted that this fact does not render those four hours as the ‘hours in addition to the nominated ordinary hours’.
In my view, the term ‘nominated ordinary hours’ as adopted in clause 18 refers, in part, to the ordinary hours worked on a particular day or on a particular shift rather than over the course of a week, for the following reasons.
Subclause 18.1 speaks to the rate of pay for additional hours worked on particular days (other than shift work). Subclause 18.2 refers to the rate of pay of additional hours worked on a Sunday or on ‘shift hours’, and subclause 18.3 stipulates that additional hours worked on any day stand alone. The term ‘shift hours’ as referred to in subclause 18.2 strikes me as meaning the hours worked on one shift, for two reasons. First, subclause 18.3 clarifies that the additional hours worked on any day stand alone. Second, the term ‘shift hours’ is also used at subclause 10.8 of the Agreement in the context of a stand down. That subclause provides that where the employee works at a location other than her or his regular location and cannot be usefully employed for prescribed reasons, Komatsu is obliged to pay a minimum of eight hours at normal rate or the agreed ‘shift hours’ rostered. The ‘normal’ rate, as is apparent from clause 12 of the Agreement, is the ‘ordinary’ rate, and payment is made in respect of eight hours. However, if rostered, presumedly on a shift, then it is the ‘agreed shift hours’ presumedly for that shift.
Insofar as the ordinary hours are ‘nominated’, the word clearly must carry some meaning and cannot simply be ignored.
Komatsu holds a view that the word ‘nominated’ in clause 18 enables it to operate both with respect to the ordinary hours of a full-time employee specified in clause 12.2, and the ordinary hours of a part-time, or fixed term part-time employee, which are less than the full-time hours of a full-time employee and will be specified at engagement: see subclauses 10.1.2 and 10.1.4.
Clause 18 provides no express explanation as to what constitutes ‘nominated ordinary hours’ and the Agreement similarly does not provide a definition. The ordinary meaning of the word ‘nominated’ might be best thought as to propose, choose or to appoint:
Verb 1. to propose as a proper person for appointment or election to an office.
2. to appoint for a duty or office.
3. to enter (a horse, etc.) in a race.
4. Obsolete to entitle; name.
5. Obsolete to specify.
–verb (i) 6. to stand as a candidate: I’ll nominate for preselection if there’s a chance of winning…
The word ‘nominated’ can be found in several clauses within the Agreement:[29]
7) DEFINITIONS
Overtime means: additional hours worked outside the spread of normal rostered hours in a nominated shift
8.2 Employee Representatives
…Employee representatives shall be released for specific delegate training courses to a maximum of 25 days in total per year for all nominated employee representatives.8.3 Joint Consultative Committee
…The Employer will establish a Joint Consultative Committee (JCC) comprising of Employer leadership team representatives (as determined by the Employer) and employee nominated representatives of equal numbers, unless otherwise agreed by the parties…19.7 Leading Hand Allowance
Allowance payable when assigned to the role of Leading Hand by Section Supervisor in its full accountability and capacity as nominated in the current Job Description.
In each of the above contexts the word ‘nominated’ essentially appears to indicate that a choice has been made, that is a person, shift or job description has been chosen. Starting with the latter clause first, in clause 19.7, the word is used to indicate that the employee must be performing the role to its full accountability as understood by reference to the specific or chosen ‘Job Description’ for Leading Hand. In clause 8.3, the word is used in the self-explanatory context of ‘employee nominated representative’ that is a representative selected or chosen and appointed by employees for that particular representative position. The term is similarly used in clause 8.2 ‘nominated employee representative’ – that is the employee representative who has been chosen by employees. At clause 7 of the Agreement, the word ‘overtime’ is defined, it referring to additional hours worked outside of the normal rostered hours in a nominated shift – that is a specific or chosen shift.
Returning to the first sentence of clause 18:
An employee may be requested to work hours in addition to the nominated ordinary hours and if so, they shall be paid at the rates prescribed in this Agreement.[30]
In my view, the nominated ordinary hours are, in this context, those that have been notified, put forward and are agreed, or are otherwise specified in the Agreement or Award.
For example, subclause 10.1.2 sets out that a part time employee may be engaged by the week to regularly work less hours than a full-time employee (38 ordinary hours) with entitlements accruing on a pro-rata basis, and subclause 10.1 sets out that the type of employment will be confirmed in the employee’s written offer of employment. Whilst the Agreement requires the type of employment to be confirmed in writing, it stipulates nothing further. It is the Award at subclause 10.3 (which is incorporated - subject to subclause 3.1 of the Agreement), which clarifies that before the commencement of employment, the employee and employer must agree in writing on the hours to be worked by the employee, start and finish times and classification. It follows that the word ‘nominated’ in this context denotes that the ‘ordinary hours’ are those ordinary hours that have been selected as between Komatsu and the part-time employee.
In respect of full-time employees, the Agreement safeguards the provision of a 38 hour week. In my view, this entitlement is applicable to employees on shift work or continuous shift work, the Agreement not indicating otherwise and subclause 13.11 expressly ensuring that its operation does not result in the loss of a 38 hour week for an employee working shifts.
Therefore, the provision of the 38 ordinary hours a week is over a roster cycle of the 7:7:7:7 roster where 12 hour shifts are worked. Of course, that the Agreement allows for night shifts of any duration is uncontroversial and the Agreement provides, also at subclause 13.4, that employees may work a 12-hour day shift. The only feasible way of providing the entitlement to the 38 ordinary hours, is to allow for the ordinary hours to be averaged over that cycle given that 14 days are worked over a 28 day period. Total rostered hours for the 7:7:7:7 amount to 168 hours over a 28 day period with the ordinary hours amounting to 152. To provide an employee with 38 ordinary hours a week, it is necessary to divide the 152 ordinary hours over the 14 days worked, which amounts to 10.857 ordinary hours.
I am appreciative that this interpretation of the Agreement has implications for the day shift component of this roster. However, consideration has been given to the ordinary meaning of the words, read in context, and taking into account the evident purpose of the provisions or expressions being construed. It is not the case that the Agreement fails to contemplate a rostering arrangement where day shifts are worked as part of ‘continuous shift work’ or within a cycle of night shifts – subclause 13.5 evinces as much. Further, the Agreement contemplates continuous shift work, as already identified a definition of the term is provided of such at clause 7 of the Agreement. However, the term ‘continuous shift work’ is utilised only once in the Agreement, namely in clause 7 where the definition of the term is provided. Notwithstanding, as I have already identified, when construed in the context of clause 12 and clause 13, subclauses 12.1 and 12.2 do not appear to apply, in my view, to ‘Continuous Shift Work’. It is further evident that if the day shifts within the 7:7:7:7 roster cycle are to be treated in accordance with clause 12.1 and/or clause 12.2, then the safeguarding of 38 ordinary hours a week will not be achieved. This therefore means that when working the 7:7:7:7 roster, the day shifts worked each comprise of 10.857 hours – hence safeguarding the 38 hour week.
Insofar as it is necessary to address, were it not the case that the Agreement permitted the averaging of the 38 ordinary hours per week over the 28 consecutive days, then I am satisfied that the incorporated Award at subclause 50.1(c) provides for such averaging. Noting that based on the evidence provided by the parties and appreciating that neither party grappled with the issue at length at hearing, I am satisfied that clause 50 of the Award applies to the relevant employees insofar as they are considered to be ‘vehicle manufacturing employees’.
At least part of the hearing was utilised by the parties to address the AMWU’s contention that the 7:7:7:7 roster was impermissible under the Award. However, the question asked of this Commission was not whether the roster was permissible under Award or Agreement, but rather whether employees on the 7:7:7:7 roster at the site were entitled to be paid double time rates for all hours worked beyond eight hours on a night shift. An answer to which, has been provided. However, were it necessary to do so, I would observe that subclause 13.6 of the Agreement construed within the context of clause 13 and the broader Agreement, clearly permits Komatsu to require employees to work shift work subject to any notification and consultation requirements under the Agreement.
Conclusion
The question asked is whether employees on the 7:7:7:7 roster at the site are entitled to be paid double time rates for all hours worked beyond eight hours on a night shift? The answer to that question is no. Such employees are entitled to receive 25% more on their ordinary or base rate of pay for 10.857 hours and thereafter are entitled to be paid at double time rates. This is because subclause 18.1 does not apply in circumstances of ‘shift work’ and subclause 18.2 applies to additional hours worked on ‘shift hours’ – ‘shift’ in this context meaning any of the 14 shifts worked on the 7:7:7:7 roster.
DEPUTY PRESIDENT
Appearances:
M Bronleigh for the AMWU
L Doust for Komatsu
Hearing details:
2024.
Perth (by video):
27 February.
<PR772134>
[1] AE519488.
[2] (2018) 264 FCR 342.
[3] Witness Statement of Maki Danalis, [11] (Danalis Statement).
[4] Ibid [12].
[5] Ibid [14].
[6] Digital Hearing Book, 135 (DHB).
[7] Ibid 135.
[8] Ibid 136.
[9] Danalis Statement (n 3) [6].
[10] Ibid [7].
[11] Statement of Agreed Facts, [3] (SOAF).
[12] Witness Statement of Neil Francis, [5] (Francis Statement).
[13] Danalis Statement (n 3) [36].
[14] Ibid [26].
[15] Francis Statement (n 12) [12].
[16] Witness Statement of Gordon Entwisle, [16] (Entwisle Statement).
[17] Francis Statement (n 12) [13]; Entwisle Statement (n 16) Attachment GE-1.
[18] Ibid [9]; SOAF (n 11) [7].
[19] Ibid [14].
[20] Fire Rescue Victoria v Rainer Kiessling[2024] FWCFB 19 [17]; The Australian Workers’ Union v Orica Australia Pty Ltd[2022] FWCFB 90 [18].
[21] AE519488 (n1) cl 2.1(a).
[22] Ibid cl 2.3.
[23] Ibid cl 2.1(b).
[24] WorkPac Pty Ltd v Skene (2018) 264 FCR 536, [197] and the authorities referred to therein; see also King v Melbourne
Vicentre Swimming Club Inc [2020] FCA 1173, [122]-[130] and the authorities referred to therein (The analysis of the
principles of construction set out therein were not disturbed on appeal: see King v Melbourne Vicentre Swimming Club
Inc (2021) 308 IR 171, [40]-[43]).
[25] AE519488 (n1) cl 12.2.
[26] Fair Work Act 2009 (Cth) s 55.
[27] AE519488 (n 1) sub-cl 13.11 (emphasis added).
[28] Ibid cl 18 (emphasis added).
[29] Ibid cl 7, sub-cls 8.2, 8.3 and 19.7.
[30] Ibid cl 18 (emphasis added).
Printed by authority of the Commonwealth Government Printer
0
6
0