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

[2013] FWC 7365

[2013] FWC 7365

FAIR WORK COMMISSION

DECISION

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

"Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union" known as the Australian Manufacturing Workers' Union (AMWU)
v
Production Services Network Pty Ltd
(C2012/1495), (C2013/663)

Manufacturing and associated industries
DEPUTY PRESIDENT LAWRENCE	SYDNEY, 26 SEPTEMBER 2013

Applications to deal with disputes re the Production Services Network (Kurnell Refinery - NSW) Mechanical Agreement 2012 - 2015 - alleged disputes about any matters arising under the enterprise agreement and the NES;[s186(6)].

Introduction

[1] These two matters arise from applications for the Fair Work Commission (the Commission) to deal with disputes in accordance with a dispute settlement procedure pursuant to s.739 of the Fair Work Act 2009 (the Act).

[2] They relate to the interpretation and application of the Production Services Network (Kurnell Refinery - NSW) Mechanical Agreement 2012-2015 [AE897387] (the Agreement).

[3] The Agreement was approved by Commissioner Cargill on 9 October 2012. Its nominal expiry date is 1 June 2015.

[4] The Australian Manufacturing Workers’ Union (AMWU), the Australian Workers’ Union and the Construction Forestry Mining and Energy Union are covered by the Agreement, but the applications are pursued by the AMWU only.

[5] The Agreement applies to employees of Production Services Network Pty Ltd, (the Respondent) engaged on contracted maintenance and miscellaneous work at the Kurnell Refinery in the southern suburbs of Sydney. There are currently approximately 80 employees.

The Two Applications

[6] Matter C2012/1495 was lodged on 28 November 2012. The form F10 raised two issues:

1. The application of clause 15.2.3(i) - payment where an employee transfers from day work to shift work.

2. The deduction from an employee’s annual leave balance of an amount in lieu of late arrival/early departure without authorisation.

[7] This matter was deal with by Commissioner Bull in a conciliation conference on 17 December 2012 but did not settle.

[8] Matter C2013/663 was lodged on 8 May 2013. It raised the application of clause 18.6 - crib time on overtime.

[9] This matter was dealt with by Commissioner Bull in a conciliation conference on 13 June 2013 but not settled.

[10] The two files were then heard together by me. A programming telephone conference was held on 24 July, with the hearing on 28 August. The annual leave aspect of the first application was not proceeded with. The Applicant was represented by Ms L. Saunders of the AMWU and the Respondent by Mr M. Steogen.

EBA Clauses

[11] The relevant clauses of the Agreement are:

“15.2 Afternoon and Night Shift Allowances

15.2.1 An Employee who works on Afternoon Shift shall be paid for such shift 15% more than the ordinary hourly rate and on night shift 30% more than the ordinary hourly rate.

15.2.2 Special shift

a) A ‘Special Shift’ is defined as a period of work, other than work or overtime, connected with day work performed to handle emergency repairs to refinery equipment, Special shifts can run for a minimum of four (4) days and a maximum period of four (4) weeks unless otherwise agreed between the union involved and the Company

b) Subject to sub-clause (c) and (d) of this clause and to their attendance for these shifts, Employees:

i) transferred to Special Shift work; or

ii) at the request of the Company transfer from one Special Shift to another Special Shift, will receive a minimum of 15.2 hours pay for each of the first four afternoon or night shifts or 7.8 hours for which they are so rostered. Subsequent afternoon and nights shifts will be paid for at the rate specified in sub-clause 15.2.1 of this clause.

c) At time worked on Sundays and No. 1 shift Monday will be paid for at the rate of double time.

d) When an Employee is transferred from day work to a night shift which commences less than twenty four hours after the commencement of a period of day work the Employee will receive 78 hours pay at ordinary time rate in addition to any other payments due under sub-clause (b) of this clause for the first night shift.

c) All overtime associated with Special Shifts worked on a Saturday will be paid at the rate of double time.

15.2 General

i) When due to the curtailment of a shift roster an Employee is transferred from shift work to day work with less than forty eight (48) hours notice he/she will be paid for any periods of work commenced within forty eight (48) hours of the time of notification of the roster change at the rate he/she would have received for his/her shifts previously rostered on the same calendar day.

ii) An Employee will receive payment for a normal week for each full week employed, that is, no loss of pay for time scheduled off for the purpose of making shift changes.

15.2.4 Continuous Shift Work means ordinary hours of work carried on with consecutive shifts of people throughout the 24 hours of each of at least six consecutive days without interruption, except during breakdowns or meal breaks or due to unavoidable causes beyond the control of the Company.

18.6 Crib Time

18.6.1 An Employee working overtime shall be allowed a crib time of 20 minutes without deduction of pay after each four hours of overtime worked if the Employee continues work after such crib time.

18.6.2 Provided that where a day worker is required to work overtime on a Saturday, any crib time entitlement shall be paid at the prevailing rates of pay for that period in the shift during which the crib is taken.

18.6.3 Where the period of overtime is more than two hours, an Employee, before starting overtime after working ordinary hours, shall be allowed a meal break of 20 minutes. The Company and Employee may agree to any variation of this provision to meet the circumstances of the work in hand provided that the Company shall not be required to make any payment in respect of any time allowed in excess of 20 minutes. For a nominal 10-hour day during normal weekdays the break can be taken concurrently with the last 20 minutes of the paid work period.”

[12] The Dispute Settlement Procedure in Clause 10 makes it clear that the Commission may determine a matter by arbitration. Both parties proceeded on the basis that the Commission would interpret the current clauses and arbitrate provisions which were workable for the future.

Agreed Statement of Facts

[13] The parties tendered an agreed statement of facts, prior to the hearing, which relevantly stated:

“This dispute application concerns:

a. What payments employees are entitled to when directed to work ‘special shifts’ instead of their regular shift with less than 48 hours notice; and

b Whether employees working an additional two (2) hours overtime at the conclusion of a 7 hour 48 minute day are entitled to a 20 minute paid crib break.”

[14] The agreed summary of work arrangements is:

● The employees affected by this dispute are engaged as day workers.

● The day work roster is organized on a two-week averaging cycle, with employees working an average of 70 ordinary hours over that cycle.

● Day workers have a normal rostered start time of 7.00 am, and a finish time of 3.18 pm, Monday to Friday. They receive a half-hour unpaid lunch break. As such, of this time, seven (7) hours and 48 minutes is considered working time.

● Of that working time, 48 minutes are accrued toward a rostered day off. Employees receive payment for those 48 minutes during their rostered day off.

● On occasion, day work employees are asked to work two (2) hours overtime at the conclusion of their ordinary rostered hours. This gives employees a start time of 7.00 am and a finish time of 5.18 pm.

[15] The agreed summary of the operation of ‘special shifts’ is:

● On occasion, day workers are required to perform un-rostered afternoon or night shifts, in order to attend to emergency repairs to refinery equipment or other urgent work. These shifts are considered ‘special shifts’ in accordance with clause 15.2.2 of the Agreement if less than 48 hours notice is given.

● On occasion, employees will be given less than 48 hours notice of the requirement to attend the special shift.

● On Thursday 13 September 2012, eleven (11) day workers worked their normal 7.00 am - 3.18 pm day shift, and then performed overtime until 9 pm.

● During the normal day shift, three (3) of the employees were notified of a change to their ordinary hours for the next day.

● Specifically, they were directed to work a special shift commencing at 3 pm on Friday 14 September 2012, rather than their rostered 7.00 am - 3.18 pm shift.

● On Friday 14 September 2012, the affected employees commenced work at 3 pm. They finished work at 5 am on Saturday 15 September 2012.

● The employees have been paid the correct penalty for the shift.

● The employees were not paid for the hours they were originally rostered to work between 7.00 am - 3.18 pm on Friday 14 September.

The Approach of the Commission

[16] It is well settled that the Commission is often required to interpret an award or an agreement in order to resolve a dispute by arbitration.

As the High Court said in Cram; Ex parte Newcastle Wallsend Coal Co Pty Ltd (1987) CLR 140 at paragraph 9:

“The making of a binding declaration of right is an instance of the exercise of judicial power. It stands outside the arbitral function. But there is no substance in the suggestion that an industrial tribunal cannot interpret laws, awards and other legal instruments. A tribunal could not discharge its arbitral functions if it were unable to form an opinion on a matter of interpretation. The formation of views and opinions on matters of interpretation in arbitral proceedings does not in itself amount to a usurpation of judicial power.”

[17] Words in an agreement, or other instrument, should be given their plain and ordinary meaning. The language used, however, needs to be considered in the light of the industrial context and purpose, especially the legislative background: Amcor Limited v Construction Forestry, Mining and Energy Union and Others (2005) HCA 10.

[18] Madgwick J summarised the approach in Kucks v CSR Ltd (1996) 66 IR 182:

“It is trite that narrow or pedantic approaches to the interpretation of an award are misplaced. The search is for the meaning intended by the framer(s) of the document, bearing in mind that such framer(s) were likely of a practical bent of mind: they may well have been more concerned with expressing an intention in ways likely to have been understood in the context of the relevant industry and industrial relations environment than with legal niceties or jargon. Thus, for example it is justifiable to read the award to give effect to its evident purposes, having regard to such context, despite mere inconsistencies or infelicities of expression which might tend to some other reading. And meanings which avoid inconvenience or injustice may reasonably be strained for. For reasons such as these, expressions which have been held in the case of other instruments to have been used to mean particular things may sensibly and properly be held to mean something else in the document at hand.”

[19] In any event, the task for the Commission in this case, as I put to the parties at paragraph 225 and 226 of the transcript, was not just to interpret the agreement but to arbitrate something which removes ambiguity and works for the future. Obviously, the parties can review the matters in future EBA negotiations.

[20] I turn now to the arguments in respect of each claim in turn.

Payment for ‘Special Shifts’ where an employee transfers from day work to shift work

[21] The AMWU says:

● Day work employees are entitled to payment for their normal rostered 7.00 am - 3.18 pm shift which they did not work and to payment of the 3.00 pm to 5.00 am (Saturday) shift that they actually worked. Payment was only received for the shift worked.

● Employees directed to work a shift other than their ordinary rostered hours with less than 48 hours notice are entitled to ‘sleepy-time’ that is payment for the shift they did not work and to the penalty payment under clause 15.2.2(d).

● Clause 15.2.3(ii) means that employees should receive payment for their “normal week” plus payment for the special shift for which they did not receive 48 hours notice.

● Employees were entitled to:

- 15.2 hours for the 7.8 hours worked between 10.12 pm and 5.00 am (the ordinary hours) (a night shift);

- 6.2 hours overtime for the hours worked between 3 pm and 10.12 pm;

- 7.8 hours pay under clause 15.2.2(b) which is the additional payment for a change of shift.

and

- 7.8 hours pay for the 7 am - 3.18 pm shift they did not work (‘sleepy-time’).

● The maximum period that the Respondent would be required to make payments under clause 15.2.3(ii) would be until the commencement of a shift more than 48 hours after the employee was first given notice.

● The AMWU delegate, Mr Mark McNamara gave evidence that past practice had been for sleepy-day payments to apply as compensation for the inconvenience and disruption of changing from day work to night work at short notice.

[22] The Respondent says:

● Employees were paid 15.2 hours pay for the 7.8 hours worked between 3.00 pm and 10.48 pm and 6.2 hours overtime for the hours worked between 10.48 pm and 5.00 am.

● The payments under clause 15.2.2(d) (7.8 hours) and clause 15.2.3(ii) are not justified.

● The night shift which commenced at 3.00 pm on Friday was 32 hours after the start of the last day shift that was worked, therefore clause 15.2.2(d) does not apply. This clause refers to a period of day work that has actually occurred.

● Clause 15.2.3 does not apply to day workers and, in any event, it does not entitle an employee to be paid for hours they do not actually work.

● Clause 15.2.2 deals comprehensively with conditions that apply to day workers performing special shifts.

● The AMWU’s interpretation, where special shifts continue for four weeks, would require the Respondent to pay day workers four weeks normal pay, plus all other payments under clause 15.2.2 for time not worked.

● Even if clause 15.2.3 applies it has been complied with because employees were paid no less than their normal weekly rate of pay.

● Mr Brad Hansford, the site manager, gave evidence that the Respondent has not paid day workers for time scheduled off duty under clause 15.2.3(ii) where day workers perform ‘special shifts’. Payment under clause 15.2.2(d) has only been made where a day worker is transferred from day work to a night shift which commences less than 24 hours after the commencement of their last shift actually worked.

Crib Break

[23] The AMWU says:

● Day workers work 7.00 am to 3.18 pm including a 30 minute unpaid break. Sometimes they work two hours overtime and finish at 5.18 pm. This is a ‘nominal 10 hour day and is effectively known as this on site. Mr McNamara confirmed this. (Transcript PN46)

● Clause 18.6.3 means crib time of 20 minutes should be paid:

- where overtime is more than two hours and work is to continue it will be taken at the end of ordinary hours;

- after each four hours of overtime;

- where a ‘nominal’ 10 hour day is worked.

● In any event, the 7.00 am to 5.18 pm shift is more than two hours overtime. Because of the 35 hour week system, the seven hours of ordinary time is supplemented by 48 minutes which go to the fortnightly rostered day off.

● Mr McNamara gave evidence of occasions where a crib break was taken when working the 10 hour shift and discussions between the delegates and management about options to solve the problem including the payment of overtime.

● The AMWU objected to the characterisation of the normal hours of work by the Respondent in supplementary material provided at my request after the hearing. I have accepted the agreed statement of facts in this regard.

[24] The Respondent says:

● No entitlement to a 20 minute paid crib break arises under clause 18.6.3 because the period of overtime is not more than two hours.

● There is no separate entitlement to a 20 minute crib break where a ‘nominal 10 hour day’ is worked.

● A ‘nominal 10 hour day’ is a day in which there are 10 hours of paid work performed. This would require a finish at 5.30 pm say, rather than 5.18 pm as occurs.

● Employees are not working more than two hours overtime because of the 7 hours and 48 minutes worked between 7.00 am and 3.18 pm, the 48 minutes are not overtime. Clause 14.3 says that 7.8 hours worked are ‘ordinary hours.

● Mr Hansford gave evidence that a crib break had not been provided in the instances now in dispute and that the issue had not been pursued in 2012 EBA negotiations.

Decision

[25] I have considered all the material put by the parties, including the material on the cost impact of the claims provided by the Respondent after the hearing.

[26] Ms Saunders made it clear that the AMWU is not seeking retrospective orders. (Transcript PN315) Accordingly, the matters that I decide will have application from the date of this decision only.

Payment for ‘Special Shifts’ where an employee transfers from Day Work to Shift Work

[27] The dispute was about the level of compensation a day worker should receive when transferring to shift work at relatively short notice. Clearly, some additional compensation is required on health and safety and inconvenience grounds.

[28] The difference between the parties was the AMWU’s claim for 7.8 hours pay under clause 15.2.2(b) and for 7.8 hours pay for the 7.00 am - 3.18 pm shift they did not work, pursuant to clause 15.2.3. The Respondent rejects both claims. There was a difference between the parties on when overtime applies on the 3.00 pm (Friday) to 5.00 am (Saturday) shift but this is not material to the dispute.

[29] The Respondent argued that clause 15.2.3 does not apply to the transferral of day workers to a special shift. I agree with that submission. That clause is expressed to apply to transferring from shift work to day work. It is clear that this is its only application. It follows that the claim for ‘sleepy-time’ for the 7.8 hours for the 7.00 am to 3.18 pm shift that was not worked must fail.

[30] I agree that it is clause 15.2.2 that sets out the conditions that apply to day workers transferred to special shifts.

[31] Clause 15.2.2(d) provides for a payment of 7.8 hours as a penalty when an employee transfers from day work to a night shift which “commences less than 24 hours after the commencement of a period of day work”.

[32] The dispute was whether this last phrase referred to the last day shift worked (which was 32 hours before) or the one which was planned, but not worked, on the Friday.

[33] Although the drafting of the clause could have been clearer, I favour the AMWU’s interpretation. I find that “period of day work” refers to the day work which was scheduled but not worked. The clause was intended to provide a stand-alone penalty for the inconvenience of roster change. The period between the normal rostered day work shift and the special night shift is, in my view, the appropriate measure to be taken to provide reasonable compensation to the employee.

[34] I therefore determine that clause 15.2.2(d) be applied so the “period of day work” relates to a shift which is planned as part of the normal day work roster rather than the last day shift worked. Clause 15.2.2(d) means that an employee transferring from day work to a special night shift should receive an additional 7.8 hours pay at ordinary rates when (such as occurred in this case) the scheduled, but not worked, day shift is within 24 hours of the special shift.

Crib break

[35] I accept the Respondent’s argument that there is no separate entitlement to a 20 minute crib break where a nominal 10 hour day is worked. In my view, clause 18.6.3 makes it clear that the period of overtime must be more than two hours for an employee to receive a crib break of 20 minutes.

[36] The question is, whether the 10 hour shift worked on site, involves more than two hours overtime. If so, the crib break would be taken at the end of the ordinary hours of work unless there is a variation agreed between the company and employee, pursuant to clause 18.6.3.

[37] The evidence of Mr McNamara was that the 7.00 am to 5.18 pm day shift is known as the 10 hour day and this was not disputed. (Transcript PN46).

The AMWU’ submission was that this shift is made up of:

● 7 ordinary hours;

● 48 minutes which is banked, goes toward the fortnightly rostered day off and would otherwise be paid as overtime;

● Two hours additional overtime.

[38] I accept this interpretation.

[39] No doubt, because of the effluxion of time since the 35 hour week was introduced in this industry, the agreement deals with the operation of the Rostered Day Off (RDO) system in quite a generalised way. However, it is clear that the 48 minutes worked after the 7 hour day is banked towards the RDO. If a RDO is not taken, it can be paid as overtime under clause 14.3.3. It should therefore be treated as overtime for the purpose of clause 18.6.3.

[40] I therefore determine that where a 7.00 am to 5.18 pm day shift is worked, a paid crib break of 20 minutes shall apply. This break will be taken at the end of the ordinary hours unless otherwise agreed between the company and the employee, pursuant to clause 18.6.3

DEPUTY PRESIDENT

Appearances:

L. Saunders for the Australian Manufacturing Workers’ Union, the applicant.

M. Steogen for Production Services Network Pty Ltd, the respondent.

Hearing details:

2013

Sydney:

July 24;

August 28.

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