"Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union" Known as the Australian Manufacturing Workers' Union (AMWU) v McCain Foods (Aust) Pty Ltd
[2016] FWC 743
•4 February 2016
[2016] FWC 743
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
McCain Foods (Aust) Pty Ltd
(C2015/677, C2015/2710)
| DEPUTY PRESIDENT KOVACIC | MELBOURNE, 4 FEBRUARY 2016 |
Applications to deal with disputes under the applicable enterprise agreement concerning the
payment of overtime to casual employees and whether employees who work 12 hour shifts are
entitled to shift penalties when they work overtime – casual employees engaged to work 12
hour shifts to be paid overtime once they have worked in excess of the fixed ordinary hours on
shift in any week and 12 hour shift employees not entitled to be paid shift allowances when
working overtime.
[1] On 1 April 2015 the “Automotive, Food, Metals, Engineering, Printing and Kindred
Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU) lodged
an application (C2015/677) regarding a dispute concerning the payment of overtime to casual
employees engaged by McCain Foods (Aust) Pty Ltd (McCain - the Respondent) to work a
12 hour shift. On 30 April 2015 the AMWU lodged a further application (C2015/2710)
concerning a dispute as to whether employees who work 12 hour shifts are entitled to shift
penalties when they work overtime.
[2] The applications were made under s.739 of the Fair Work Act 2009 (the Act) and in
accordance with the dispute resolution process of the McCain Foods (Aust) Pty. Ltd. Ballarat
1
| Production Enterprise Agreement 2014 | (the Agreement). |
[3] The Fair Work Commission (the Commission) convened a conference on 14 April
2015 in respect of C2015/677 and conferences on 1 and 24 June 2015 in respect C2015/2710.
Those conferences failed to resolve the disputes, with the AMWU indicating that it wished to
have the disputes determined by the Commission in accordance with the Agreement’s dispute
resolution process. Directions for the filing of submissions and evidentiary material were
issued on 9 July 2015 and 25 June 2015 respectively, with both matters listed for hearing on
14 August 2015. The hearing date was vacated on 12 August 2015 in the light of a request
from the parties for the disputes to be dealt with on the papers. It was not disputed that the
Commission had the jurisdiction to determine the dispute under clause 9 – Dispute Resolution
Process of the Agreement.
[2016] FWC 743
[4] For the reasons set out below, I find that casual employees engaged to work 12 hour
shifts are only entitled to be paid overtime once they have worked in excess of the fixed
ordinary hours on shift in any week, i.e. in excess of 38 hours in any week, and that
employees working 12 hour shifts under the 7 day/12 hour continuous shift roster are not
entitled to be paid shift allowances when working additional hours beyond their ordinary
rostered hours of work.
Statement of Agreed Facts
[5] The parties provided a Statement of Agreed Facts (the Statement) which set out the
history regarding the implementation of the 7 day/12 hour continuous shift roster worked in a
number of parts of McCain’s Ballarat facility. In short, the Statement indicated that McCain
initiated discussions with the AMWU regarding its intention to introduce a 7 day/12 hour shift
roster in some areas of the Ballarat facility in November 2013. Employees in affected areas
subsequently endorsed the proposal put forward by McCain in March 2014.
[6] The Statement also indicated that negotiations for the Agreement commenced in May
2014, with the Agreement endorsed by employees incorporating an appendix dealing with the
“7-Day Continuous Shift Arrangement”. The appendix involved a number of modifications to
the arrangement agreed to by employees in March 2014. The Agreement was approved by the
Commission on 8 January 2015 and commenced operation on 15 January 2015.
Overtime for casuals
[7] The 7 day/12 hour continuous shift roster arrangement operates over an eight week
cycle, with permanent employees who work this cycle paid a regular average weekly amount
(equal to 59.5 hours per week) in order to smooth the variations in pay which may otherwise
occur.
[8] The Statement indicated that:
from the time the 7 day/12 hour continuous shift roster was implemented up until
March 2015 affected casuals were paid eight hours at ordinary time rates (including
25% casual loading) and four hours at overtime rates together with other applicable
shift penalties;
on 18 March 2015, McCain advised the AMWU that it considered that this payment
was being made in error and that instead affected casuals should be paid for 12 hours
at ordinary time rates, consistent with the rate of pay for all non-casual employees
working 12 hour shifts but with a 25% casual loading, plus a 30% night shift loading
where applicable, except on shifts attracting a higher penalty; and
on 26 June 2015, McCain wrote to the AMWU outlining its intention to commence
paying affected casuals in accordance with the above position.
[9] The Statement set out the dispute to be determined by the Commission as concerning
the narrow question as to the correct payment to be made to affected casuals in accordance
with the terms of the Agreement.
[2016] FWC 743
12 Hour Shiftworkers – payment of shift penalties when working overtime
[10] The Statement indicated that from the time that the 7 day/12 hour continuous shift
roster was implemented under the predecessor agreement, i.e. McCain Foods (Aust) Pty. Ltd.,
2
| Ballarat Production Enterprise Agreement 2011 | (the 2011 Agreement), up until when the |
2011 Agreement ceased to operate, permanent employees who worked beyond their set
rostered hours were paid overtime which included applicable shift penalties, calculated on the
basis of the employees’ ordinary time rate of pay. Further, McCain continued to pay some
affected employees on this basis for a period of time after the Agreement came into operation,
with McCain contending that this was done in error.
[11] The Statement summarised the dispute to be determined by the Commission as
concerning the narrow question as to the correct payment to be made to affected employees in
accordance with the terms of the Agreement.
The AMWU’s case
Overtime for casuals
[12] The AMWU submitted that the fact that casual employees were asked to work in areas
which work a 12 hour shift did not make those casual employees 12 hour shift workers,
contending that they are entitled to overtime for any hours worked beyond eight hours on any
given day.
[13] In support of its contention, the AMWU drew the Commission’s attention to the
following provisions of the Agreement:
clause 29 which deals with casual employment;
clause 19.8 which deals with overtime;
clause 7 which operates to incorporate the Food Beverage and Tobacco
3
Manufacturing Award 2010 (the Award); clause 7.6 which the AMWU submitted served to preserve the pre-existing custom
and practice as to the mode of remuneration for casual employees when asked to
work in relevant areas; and
Appendix 1 which deals with the 7-Day Continuous Shift Arrangement.
[14] More particularly, the AMWU submitted that clause 19.8 of the Agreement applied to
casual employees if for no other reason than by virtue of the fact that the provision does not
exclude casual employees.
[15] As to the Award, the AMWU highlighted clause 30 of the Award which deals with
ordinary hours of work and rostering, submitting that it is inherent in the Award that actual
ordinary hours may be different for different employees.
[16] In respect of Appendix 1, the AMWU submitted that the Appendix does not deal with
casual employment. Further, the AMWU contended that a review of clause 4 of Appendix 1 is
elucidating as the remuneration arrangement set out in the table at clause 4 was designed to
[2016] FWC 743
appropriately compensate employees who work in accordance with the hours of work set out
in the clause, adding that casual employees by their nature were not engaged to perform work
according to these arrangements.
[17] In its submissions in reply, the AMWU submitted that there was a clearly understood
and applied mode of payment for casual employees up until and beyond the commencement
of the Agreement, adding that Ms McCarthy’s and Mr Lavery’s evidence (discussed below) in
this regard was not challenged by McCain. Accordingly, the AMWU submitted that this mode
of payment constituted a “notorious fact of which knowledge is to be presumed” as per
principle 6(b) in the Full Bench decision in The Australian Meat Industry Employees Union v
4
| Golden Cockerel Pty Ltd | (Golden Cockerel). |
12 Hour Shiftworkers – payment of shift penalties when working overtime
[18] The AMWU pointed to clause 19.8 of the Agreement, submitting that subclause 19.8.2
was unambiguous in its language and applied to the affected employees if for no other reason
than that there is nothing in the Agreement which excludes them from the provision.
[19] Beyond that, the AMWU acknowledged that:
the issue of shift penalties for employees who work in accordance with the 7 day/12
hour continuous shift roster is dealt with by clauses 4 to 6 of Appendix 1; and
while clause 7 of Appendix 1 deals with overtime for affected employees it does not
make any reference to shift penalties.
[20] Against that background, the AMWU contended that it would be wrong to conflate the
concept of remuneration for overtime with the question of whether shift penalties are
additionally payable when the overtime is worked. The AMWU added that, while it was
beyond question that the parties to the Agreement intended for subclause 19.8.1 of the
Agreement to be overridden by clause 7 of Appendix 1, there was no evidence of any such
intent in respect of subclause 19.8.2.
[21] Finally, the AMWU contended that clause 7.6 of the Agreement operates to preserve
existing custom and practice as to the remuneration for affected employees.
[22] In its submissions in reply, the AMWU disputed McCain’s submission that clause 7 of
Appendix 1 described the complete entitlement for overtime worked under the 7 day/12 hour
continuous shift roster. The AMWU submitted that the Agreement does not contain any
provisions setting out the relationship between the main body of the Agreement and
Appendix 1, contending that as such there is nothing to indicate that Appendix 1 should be
read to the exclusion of the main body of the Agreement. The AMWU, relying on the
principles set out in Golden Cockerel, submitted that the practice of paying shift penalties in
addition to overtime prior to McCain identifying the alleged error constitutes a “notorious fact
of which knowledge is presumed”. This, the AMWU submitted, supported its interpretation of
the Agreement’s provisions on this issue.
[2016] FWC 743
Other aspects of the AMWU’s case
[23] In support of its submissions the AMWU relied on the decision in Golden Cockerel
and the decision in SCA Hygiene Australasia v Communications, Electrical, Electronic,
5
Energy, Information, Postal, Plumbing and Allied Services Union of Australia and another
(SCA) which, among other things, canvassed the specific role of custom and practice in
interpreting agreements.
[24] The AMWU provided witness statements by Ms Angela McCarthy, an Organiser with
the AMWU, and Mr Paul Lavery, and a senior AMWU delegate at McCain’s Ballarat facility.
In short, both deposed that:
at no stage in the negotiations for the Agreement did McCain indicate that the
proposed agreement (as the Agreement was at that stage) would result in changes to
the basis on which casual employees working a 12 hour shift were paid or that shift
penalties would not be paid in respect of overtime worked by 7 day/12 hour
continuous shift workers; and
McCain, in putting the proposed agreement to employees for consideration, never
explained the effect of the agreement in respect of these issues.
[25] Ms McCarthy also deposed that she was aware that between the time McCain
implemented the 7 day/12 hour continuous shift roster in March 2014 and January 2015,
McCain continued to pay applicable shift penalties to 12 hour shiftworkers where such
workers worked hours beyond their regular rostered hours.
[26] Finally, on 24 December 2015, the AMWU forwarded the Commission a copy of
correspondence from McCain to its casual employees regarding changes to casual employees’
shift times/duration. In short, the correspondence advised casual employees that effective
from 4 January 2016 casual employees’ shifts will be for eight hours duration only with
overtime payable on time worked over eight hours. McCain also indicated in that
correspondence that its decision will be reviewed following the Commission’s decision on
this issue.
McCain’s case
Overtime for casuals
[27] McCain submitted that casual employees were covered by the Agreement and that the
standard employment contract for casual employees at McCain’s Ballarat facility contains the
following term regarding hours of work:
“Your hours of work will be as determined by the work area or function you are
6
engaged to work in.”
[28] McCain further submitted that subclause 19.8.1 of the Agreement provides that
overtime is only payable in the following situations:
[2016] FWC 743
for all time worked before the fix starting time of an employee’s shift; or
after the fix finishing time of an employee’s shift; or
in excess of eight hours on any day for 8 hour shifts; or
in excess of the fixed ordinary hours on shift in any week.
[29] McCain stated in its submissions that employees at the Ballarat site work either a 12 or
8 hour shift arrangement, with over 70% of employees employed on 12 hour shift
arrangements. In addition, McCain contended that casual employees should be paid at the
same ordinary time as the weekly employees working 12 hour shifts, adding that there are no
distinct or special provisions in the Agreement regarding overtime for casual employees.
McCain also highlighted that the Agreement does not explicitly set out a maximum number of
daily hours, but submitted that there were a number of clauses in the Agreement which
indicated that an employee can work up to 12 ordinary hours on any given day. Those
provisions included clauses 19.1, 19.3 and 19.10.
[30] McCain further submitted that all employees, including casual employees, are paid at
overtime rates once they have worked more than 38 hours in a week.
[31] McCain also stated that it wrote to the AMWU on 18 March 2015 indicating its
intention to correct an error it had made in calculating casual employees’ wage entitlements to
reflect the terms of the Agreement, with casual employees engaged to work 12 hour shifts in
future to be paid at ordinary time for the 12 hours plus casual loading and the appropriate
applicable shift allowance. McCain described its error as casuals previously having been paid
eight hours at ordinary time, three hours at time and a half and one hour at double time,
indicating that the error was detected in early 2015 and was found to have applied from the
time 12 hour shifts first commenced operation at the plant in early 2014.
[32] McCain contended that clause 7.6 of the Agreement did not apply in this case because
no agreement ever existed to pay casual employees overtime rates when engaged to work a
12 hour shift, adding that clauses 19.1 and 19.8 provide proper clarity in this regard.
12 Hour Shiftworkers – payment of shift penalties when working overtime
[33] McCain submitted that the arrangement under which 12 hour shifts were introduced in
2014 did not provide any additional benefit in terms of overtime entitlements when working
12 hour shifts, but simply reflected the Award entitlement of double time pay.
[34] McCain further submitted that upon the commencement of 12 hour shifts in early 2014
its payroll system defaulted to add the payment of shift penalties because the provision
existed in the system at the time for eight hour shifts, adding that this was only detected when
the terms of the Agreement regarding 12 hour shifts were uploaded into its payroll system.
McCain also contended that Appendix 1 provides generous terms of employment for those
employees who work under the 7 day/12 hour continuous shift roster and that it was careful
throughout the negotiations to ensure that no additional benefits beyond those that were
specifically agreed to would be presumed to be an entitlement.
[35] More specifically, McCain submitted that clause 7 of Appendix 1 describes the
complete entitlement when working overtime for employees employed under the 7 day/12
hour continuous shift roster, contending that the provision takes precedence over subclause
19.8 of the Agreement in its entirety. McCain also contended that because clause 7 of
[2016] FWC 743
Appendix 1 provides specific, definitive terms to address overtime for 7 day/12 hour
continuous shift roster workers, clause 7.6 of the Agreement does not apply.
[36] Finally, McCain submitted that from the time the 7 day/12 hour continuous shift roster
was implemented under the Agreement, with the exception of one or two instances where
errors in pays were made, it had not paid shift penalties in addition to overtime for employees
working 12 hour shifts under the 7 day/12 hour continuous shift roster.
The Relevant clauses of the Agreement
[37] The parties’ submissions referred to a number of provisions in the Agreement. For
ease of reference the relevant provisions are set out below.
“4. PARTIES AND SCOPE OF AGREEMENT
4.1 The Agreement covers all permanent, part-time or casual hourly or weekly employees employed at McCain Foods (Australia) Pty Ltd’s
Ballarat site within the production areas, covered by the Food,
Beverage and Tobacco Manufacturing Award 2010 whether they be
members of the union or not.
7. RELATIONSHIP BETWEEN AGREEMENT AND AWARD, AND
OTHER INSTRUMENTS
7.1 The terms of the Food, Beverage and Tobacco Manufacturing Award 2010 (as varied from time to time) or its successor Award/s, are
incorporated into this Agreement, however the Company is committed
to maintaining applicable Award and above-Award conditions enjoyed
by the employees covered by this Agreement.
7.2 If an incorporated Award term (to the extent that the incorporated Award applies to a particular employee covered by this Agreement) is inconsistent with an express term of this Agreement, the express term of the Agreement shall prevail over the incorporated Award term, to the extent of the inconsistency. 7.3 Unless expressly provided for in this Agreement, any Facilitative Provisions (refer Clause 8 of the Award) or Award Flexibility terms (refer Clause 7 of the Award) shall not be used. 7.4 In this Agreement references to the Award shall mean ‘Award as incorporated into the Agreement’ unless context requires otherwise. 7.5 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 the Award, eg. the loading, penalties and allowances in the Award applies to the rates of pay due under the Agreement, not the Award rate. 7.6 Existing custom and practice payments and conditions of employment will continue to apply unless varied by this Agreement. Further, there will be no reduction in wages or conditions for the life of this Agreement.
[2016] FWC 743
19. HOURS OF WORK
19.1 Shifts In broad terms, shifts will be defined according to the start and/or finishing times: Day Shift – commencing at or after 6:00am;
Afternoon Shift – finishing after 6:00pm and before midnight;
Night Shift – finishing after midnight and before 8:00am;
12-Hour Day Shift – 7:00am to 7:00pm;
12-Hour Night Shift – 7:00pm to 7:00am.
19.2 7-Day (Continuous) Roster Prior to the implementation of any 7-day continuous roster (which may either replace, or run in conjunction with current roster arrangements), the Company shall obtain the agreement of a majority of the employees in the part of the enterprise concerned, for the roster to be implemented. 19.3 Shift Loadings 19.3.1 The following loadings shall be payable for work performed on shifts:
Day Shift – no loading;
Afternoon Shift – 15% loading;
Night Shift – 30% loading;
12-Hour Rotating Shift – 15%
19.3.2 Early morning shift allowances (refer Award clause 31.3) shall
not be applied or used to diminish or replace the 30% night shift
loading.
…
19.8 Overtime 19.8.1 For: a) all time worked before the fixed starting time of an
employee’s shift; or
b) after the fixed finishing time of an employee’s shift; or
c) in excess of eight (8) hours on any day for 8-hour shifts; or
d) in excess of the fixed ordinary hours on shift in any week;
an employee shall be entitled to be paid time and a half (x 1.5) for
the first three (3) hours, and double time (x 2) for all hours
thereafter.
19.8.2 In addition to 19.8.1, the relevant shift loading (of the
employee’s shift) shall be payable, calculated on the ordinary
time rate.
[2016] FWC 743
…
19.10 Standard Work Breaks (12-hour shifts)
19.10.1Two paid meal breaks of 35 minutes will be provided on each
shift, to be taken, as far as reasonably practicable, at evenly
spaced times throughout the shift, however it is recognized that
under certain circumstances related to production or other
workload priorities, flexibility in observing meal times may be
required.
19.10.2 In addition to 19.10.1 three (3) paid 15-minute sustenance
breaks shall also be provided in each 12-hour shift.
29. CASUAL EMPLOYMENT
Casual employment will not be used to displace full time weekly (permanent)
employment.
29.1 Ordinary Hours 29.1.1 For work performed during ordinary hours, a casual employee
shall be paid the hourly rate prescribed by Schedule 1 hereto,
for work of the class performed by them, plus a 25% casual
loading.
29.1.2 The casual loading is paid in lieu of the employee’s entitlement
to paid Annual leave, aid Personal/Carer’s Leave, notice of
termination and redundancy, and recognises the lesser security
of employment for casual employees.
29.1.3 The loading forms part of the casual employee’s all purpose
rate.
29.2 Shift Allowances Where a casual employee is engaged to work on a shift that attracts a shift allowance, he/she shall be entitled to payment of the ordinary rate of pay prescribed by Schedule 1 hereto, plus the relevant shift allowance. … 29.4 Minimum Engagement 29.4.1 A casual employee is employed and paid on an hourly basis, with a minimum of eight (8) hours’ pay for each engagement
unless otherwise agreed before commencing work.
…
[2016] FWC 743
APPENDIX 1 – 7-DAY CONTINUOUS SHIFT ARRANGEMENT
4. 7-Day Continuous Shift Roster – Summary of Terms
a) 28 days of work in each shift cycle, as follows: - 20 days to be worked on weekdays, ie. Mondays to Fridays
- 4 Saturdays to be worked
- 4 Sundays to be worked
b) 12-hour shifts, with a spread of ordinary hours as follows: - Dayshift - 7:00am to 7:00pm
- Nightshift – 7:00pm to 7:00am
c) 336 working hours in each shift cycle, comprising: - 304 ordinary hours (38 ordinary hours per week) plus
- 32 overtime hours (4 hours (average) per week) rostered overtime.
The penalty loadings contained in the table below will apply to this seven day roster
arrangement.
Details Penalty/Rate Hours Worked Hours Paid 20 x 12-hour shifts X 1.0 240 304 (all shifts) Rostered Overtime 64
component (32 hours)
Saturday shifts (4 x X 1.5 48 24 12 hour shifts) Sunday Shifts (4 x X 2.0 48 48 12 hour shifts) 336 440 Plus Averaged Shift 15% 36 Penalty (240 hrs) 336 476 5. Shift Commencement Times
5.1 Dayshift commences at 7:00am. Nightshift commences at 7:00pm. 5.2 The start times of each shift may be altered by mutual agreement between the parties. 6. Shift Penalties
6.1 Calculation of Shift Penalties
Penalty entitlement shall be calculated as follows:
[2016] FWC 743
a) Between 7:00am and 7:00pm (Dayshift) – no shift penalty entitlement;
b) Between 7:00pm and 7:00am the following day (Nightshift) – 30% shift penalty for all nightshifts worked, that do not attract a
higher penalty, ie. Saturday (50%) or Sunday (100%);
c) There are four (4) 12-hour Saturday shifts over the 8-week cycle. These shifts attract a 50% penalty when part of an
employee’s ordinary hours. The 50% penalty is in substitution
for, and not cumulative on, the shift loading.
d) There are four (4) 12-hour Sunday shifts over the 8-week cycle. These shifts attract a 100% penalty when part of an employee’s
ordinary hours. The 100% penalty is in substitution for, and not
cumulative on, the shift loading.
6.2 Payment of Shift Penalties Shift penalty payments will be paid at an averaged rate of 15% for all shifts that do not attract a higher Saturday (50%) or Sunday (100%) weekend penalty. 7. Overtime All overtime, whether included in the roster, or in addition to the hours worked in the roster, shall be paid at double time.” (Underlining added)
Consideration of the issues
[38] The principles relating to the interpretation of enterprise agreements are, as alluded to
in the AMWU’s submissions, set out in Golden Cockerel. Below is the passage which sets out
the key principles in this regard.
“[41] From the foregoing, the following principles may be distilled: 1. The AI [Acts Interpretation] Act does not apply to the construction of an
enterprise agreement made under the Act.
2. In construing an enterprise agreement it is first necessary to determine whether
an agreement has a plain meaning or contains an ambiguity.
3. Regard may be had to evidence of surrounding circumstances to assist in
determining whether an ambiguity exists.
4. If the agreement has a plain meaning, evidence of the surrounding
circumstances will not be admitted to contradict the plain language of the
agreement.
5. If the language of the agreement is ambiguous or susceptible to more than one
meaning then evidence of the surrounding circumstance will be admissible to
aide the interpretation of the agreement.
[2016] FWC 743
6. Admissible evidence of the surrounding circumstances is evidence of the objective framework of fact and will include:
(a) evidence of prior negotiations to the extent that the negotiations tend to establish objective background facts known to all parties and the
subject matter of the agreement;
(b) notorious facts of which knowledge is to be presumed; (c) evidence of matters in common contemplation and constituting a common assumption.
7. The resolution of a disputed construction of an agreement will turn on the
language of the Agreement understood having regard to its context and
purpose.
8. Context might appear from:
(a) the text of the agreement viewed as a whole; (b) the disputed provision's place and arrangement in the agreement; (c) the legislative context under which the agreement was made and in which it operates.
9. Where the common intention of the parties is sought to be identified, regard is
not to be had to the subjective intentions or expectations of the parties. A
common intention is identified objectively, that is by reference to that which a
reasonable person would understand by the language the parties have used to
express their agreement.
10. The task of interpreting an agreement does not involve rewriting the agreement
to achieve what might be regarded as a fair or just outcome. The task is always
one of interpreting the agreement produced by parties.”
Overtime for casuals
[39] Drawing on the second principle in Golden Cockerel, the Commission must first
determine “whether an agreement has a plain meaning or contains an ambiguity.”
[40] It is clear from clause 4.1 of the Agreement that the Agreement applies to casual
employees. Further, in respect of overtime, subclause 19.8.1 of the Agreement sets out the
circumstances in which overtime is payable under the Agreement. More specifically, and with
particular regard to the circumstances in this case, subclause 19.8.1 provides that overtime is
payable for work “in excess of eight (8) hours on any day for 8-hour shifts or in excess of the
fixed ordinary hours on shift in any week”. The clause on any reading has a plain meaning
and is unambiguous.
[41] Under subclause 19.8.1d), employees who work a 12 hour shift are entitled to
overtime for work “in excess of the fixed ordinary hours on shift in any week.” In other
words, casual employees who work 12 hour shifts only become entitled to overtime once they
have worked 38 hours in any week. Subclause 19.8.1c) does not apply to employees who
work a 12 hour shift, whether a casual employee or not, as they do not work an 8 hour shift.
[42] Appendix 1 of the Agreement does not deal with casual employment or when overtime
becomes payable, nor did the proposal put to employees by McCain in March 2014 deal with
[2016] FWC 743
these issues. As set out in the Statement, Appendix 1 involved a number of modifications to
the arrangement agreed to by employees in March 2014.
[43] As noted above, the AMWU submitted that clause 7.6 of the Agreement served to
preserve the pre-existing custom and practice as to the mode of remuneration for casual
employees when asked to work in relevant areas. Clause 7.6 of the Agreement provides that
“Existing custom and practice payments and conditions of employment will continue to apply
unless varied by this Agreement …” (underlining added). In determining whether clause 7.6
of the Agreement operates as submitted by the AMWU, I therefore need to consider whether
the Agreement varied existing conditions of employment as to when overtime is payable. To
that end, a comparison of the overtime provisions of the 2011 Agreement with those of the
Agreement is set out below.
| 2011 Agreement | The Agreement |
| Clause 19 – Shift Work | 19.8 Overtime |
| Shift workers overtime (new 2011) | 19.8.1 For: |
| For all time worked before the fixed starting | a) all time worked before the fixed starting |
| time of any shift or after the fixed finishing | time of an employee’s shift; or |
| time of any shift or in excess of eight hours | b) after the fixed finishing time of an |
| on any shift, or in excess of 38 ordinary hours | employee’s shift; or |
| on shift in any week – time and a half for the | c) in excess of eight (8) hours on any day for |
| first three hours and double time thereafter | 8-hour shifts; or |
| plus for all such overtime 15% of ordinary | d) in excess of the fixed ordinary hours on |
| time if on afternoon shift or 30% of ordinary | shift in any week; |
| time if a night shift. Such entitlements shall | |
| continue until the completion of overtime | an employee shall be entitled to be paid time |
| work. | and a half (x 1.5) for the first three (3) hours, |
| and double time (x 2) for all hours thereafter. | |
| Where work commences on a Saturday until | |
| noon – time and a half for the first three hours | 19.8.2 In addition to 19.8.1, the relevant shift |
| and double time thereafter up to noon, plus | loading (of the employee’s shift) shall be |
| for all such work 15% of ordinary time if on | payable, calculated on the ordinary time rate. |
| afternoon shift and after noon, double time, | |
| plus15% of ordinary time if on afternoon | |
| shift or 30% of ordinary time if on night shift. |
[44] Putting aside the obvious formatting changes, there are a number of changes reflected
in clause 19.8 of the Agreement regarding when overtime is payable. Two key changes are
highlighted by the underlining in the above table. Specifically, the words “any shift” in the
2011 Agreement are replaced in the Agreement by the words “any day for 8-hour shifts” and
the words “38 ordinary hours” in the 2011 Agreement are replaced by the words “the fixed
ordinary hours” in the Agreement. This supports a finding that the Agreement varied existing
conditions of employment to reflect the 7 day/12 hour continuous shift roster, which in turn
supports a finding that clause 7.6 of the Agreement does not operate to preserve McCain’s
pre-existing approach to the payment of overtime for casual employees working 12 hour
shifts.
[45] For all the above reasons, I find that consistent with subclause 19.8.1d) of the
Agreement casual employees engaged to work 12 hour shifts are only entitled to be paid
[2016] FWC 743
overtime once they have worked in excess of the fixed ordinary hours on shift in any week,
i.e. in excess of 38 hours in any week.
[46] While I acknowledge that there is a degree of unfairness involved in that interpretation
given that casual employees engaged to work 12 hour shifts do not benefit from the averaging
arrangement which applies to permanent employees who work the eight week roster cycle
under which the 7 day/12 hour continuous shift roster is worked, I would highlight principle
10 in Golden Cockerel which provides that “The task of interpreting an agreement does not
involve rewriting the agreement to achieve what might be regarded as a fair or just outcome.
The task is always one of interpreting the agreement produced by parties” (underlining
added).
12 Hour Shiftworkers – payment of shift penalties when working overtime
[47] The key issue to be determined is whether clause 7 of Appendix 1 overrides clause
19.8 of the body of the Agreement in its entirety. While it was not disputed that subclause
19.8.1 of the Agreement was overridden by clause 7 of Appendix 1, the AMWU contended
that there was no evidence to support such a finding in respect of subclause 19.8.2 of the
Agreement. McCain, on the other hand, submitted that clause 7 of Appendix 1 takes
precedence over subclause 19.8 of the Agreement in its entirety.
[48] Clause 7 of Appendix 1 provides that “All overtime, whether included in the roster, or
in addition to the hours worked in the roster, shall be paid at double time” (underling added).
What is obvious from the provision is that it makes no explicit reference to shift penalties.
The use of the word “all” in the clause supports a finding that the provision determines the
level of overtime payment to the exclusion of clause 19.8 of the body of the Agreement.
[49] Further, a close examination of clause 4 of Appendix 1 is instructive given that the
7 day/12 hour continuous shift roster incorporates 32 hours of rostered overtime over the
8 week roster cycle, i.e. an average of 4 hours per week. Based on the table in Clause 4 of
Appendix 1, those overtime hours are paid at double time (as per clause 7 of the Appendix)
and do not attract a penalty loading. This does not support a finding that subclause 19.8.2 of
the Agreement continues to apply despite the terms of clause 7 of Appendix 1.
[50] With regard to clause 7.6 of the Agreement, the AMWU contended that the provision
operates to preserve existing custom and practice as to the remuneration for affected
employees while McCain contended that the provision did not apply because clause 7 of
Appendix 1 provided specific, definitive terms to address overtime for 7 day/12 hour
continuous shift roster workers.
[51] In SCA Deputy President Watson canvassed the role of custom and practice in
interpreting agreements as follows:
“[39] In relation to the specific role of custom and practice in interpreting agreements, in Health Services Union v Ballarat Health Services Gray J held that:
". . . There have been cases in which it has been held that a common
understanding of a term used in an industrial agreement can be used to aid in
the interpretation of that term. In those cases, the parties to such agreements
have acted on a common understanding as to the meaning of terms in those
[2016] FWC 743agreements, and the terms have been repeated in successive instruments, so
that it can be said that the parties have entered into the successive agreements
on the basis of their common understanding of those terms. Care is needed in
approaching any suggestion of a common understanding as to terms used. In
the first place, there must be positive evidence of a common understanding.
Ordinarily, a failure to advance an argument as to the effect of a particular
provision will not constitute such evidence. A failure to advance an argument
is consistent with inadvertence, and common inadvertence is not common
understanding." (Citations not included, underling added).
[52] Based on the material before the Commission and drawing on the language in SCA, it
is clear that there is no common understanding regarding the application of subclause 19.8.2
to 7 day/12 hour continuous shift roster workers and hence an absence of custom and practice
in this regard. The absence of custom and practice in this area is reinforced by McCain’s
submission that from the time the 7 day/12 hour continuous shift roster was implemented
under the Agreement in early 2015, with the exception of one or two instances where errors in
pays were made, it had not paid shift penalties in addition to overtime for employees working
12 hour shifts under the 7 day/12 hour continuous shift roster.
[53] The above analysis does not support a finding that employees working 12 hour shifts
under the 7 day/12 hour continuous shift roster are entitled to be paid shift allowances when
working additional hours beyond their ordinary rostered hours of work.
Conclusion
[54] For the reasons outlined above, I find that:
(i) consistent with subclause 19.8.1d) of the Agreement casual employees engaged to work 12 hour shifts are only entitled to be paid overtime once they
have worked in excess of the fixed ordinary hours on shift in any week, i.e. in
excess of 38 hours in any week; and
(ii) employees working 12 hour shifts under the 7 day/12 hour continuous shift
roster are not entitled to be paid shift allowances when working additional
hours beyond their ordinary rostered hours of work.
Printed by authority of the Commonwealth Government Printer
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[2014] FWCFB 7447
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[2014] FWC 249
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Outline of Submissions of McCain Foods (Aust) Pty Ltd at paragraph 5
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