"Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union" known as the Australian Manufacturing Workers' Union (AMWU) v Rail Corporation New South Wales T/A Railcorp
[2012] FWA 9806
•20 NOVEMBER 2012
[2012] FWA 9806 |
|
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
Rail Corporation New South Wales T/A Railcorp
(C2012/4277)
COMMISSIONER CAMBRIDGE | SYDNEY, 20 NOVEMBER 2012 |
Dispute settlement procedure - interpretation of provisions of employer’s historical policy documentation - dispute as to payment entitlements arising in respect to superannuation benefits - claim for payment of additional benefit in respect to an individual who had worked for considerable period as a shift worker - evidence supports finding that intention of documentation was to limit circumstances when additional benefit would be provided - recommendation made so as to provide simpler and fairer method for determination of additional benefit.
[1] This Decision is made in respect of an application taken pursuant to section 739 of the Fair Work Act 2009 (the Act) for Fair Work Australia (FWA) to deal with a dispute in accordance with a Dispute Settlement Procedure (DSP). The application was lodged at Sydney on 21 June 2012. The application was made by the "Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union" known as the Australian Manufacturing Workers' Union (AMWU), and it has been taken against Rail Corporation New South Wales trading as RailCorp.
[2] The matter is referable to a DSP found at Clause 9 of the RailCorp Enterprise Agreement 2010 (the Agreement). The issue in dispute involved the interpretation and application of policy documents used by RailCorp to determine the level of remuneration upon which superannuation entitlements are determined. Specifically, the AMWU contended on behalf of its member, Mr Kenneth John Procter, that RailCorp had failed to properly apply the terms of its own policy documents such that Mr Procter was in effect, underpaid his superannuation entitlement which arose upon his retirement on 7 January 2012 after 42 years service.
[3] The matter was the subject of unsuccessful conciliation and proceeded to arbitration which involved a Hearing conducted on 23 and 25 October 2012. Mr J Kennedy appeared for the AMWU at the Hearing. Mr Kennedy adduced evidence from Mr Procter who was called as a witness. RailCorp was represented by Ms A Phan who appeared together with Mr M Jones. Ms Phan called two witnesses who provided evidence on behalf of RailCorp.
Background
[4] Mr Procter commenced employment with the State Rail Authority of New South Wales (SRA) a predecessor of RailCorp, on 5 January 1970 as an apprentice fitter and turner. After completing his apprenticeship Mr Procter worked as a shift worker at various railway workshops until 2000.
[5] During the late 1990’s Mr Procter’s health deteriorated and as a result of the physical requirements of the work that he performed in the workshop he explored alternative work opportunities that might allow him to “get off the tools.” Consequently, in 2000 he transferred to work as a Duty Manager at train stations. The Duty Manager position involved shift work at various train stations in the Newcastle area. The train station work was less physically arduous than the workshop work and Mr Procter’s health improved.
[6] In 2005 Mr Procter was seconded and then promoted to a position of Maintenance Manager (aka Diesel Fleet Manager). This promotion involved Mr Procter returning to the workshop (rolling stock) work which he maintained an interest in, but in a supervisory/managerial capacity which did not involve the physical demands of being “on the tools.” The position of Maintenance Manager was not a shift work position. However for an initial period Mr Procter was the only supervisory person during day work hours and he was on call at all other times.
[7] At the time of his retirement Mr Procter worked in the Maintenance Manager position and he was classified under the pay scale terms of the Agreement at level “RC7.” The superannuation benefit that Mr Procter was entitled to at retirement is derived from his membership of the State Authorities Superannuation Scheme (SASS). The SASS benefit for Mr Procter is made by way of a defined benefit calculated by reference to the final salary figures for the last three years before retirement. Railcorp provides SASS with these final salary figures upon which the superannuation benefit for inter alia, Mr Procter is then calculated.
[8] In most cases the three final year’s salary figures would be uncontroversial. However RailCorp and its predecessor (SRA) have historically recognised that in certain circumstances where an individual transferred from shift work to non-shift work prior to retirement or death, the final salary figure should be increased by a loading to reflect the prior period of shift work.
[9] The recognition of prior shift work for superannuation purposes was the subject of a policy prescription made by SRA on 14 December 1987 (the 1987 prescription) which stated:
“EMPLOYEES REQUIRED TO CHANGE FROM SHIFT WORKER TO NON-SHIFT WORKER STATUS - TREATMENT OF SALARY FOR SUPERANNUATION PURPOSES
Following discussion with personnel from the Superannuation Section of the Finance Branch, having regard to availability of records, and consideration for the fact loadings on salary for superannuation due to shift work implications were introduced in 1968, the Chief Executive has approved of the following criteria being implemented when assessing salary loading entitlement, in retirement/decease cases, relating to Fund/Employer benefits due:-
(a) Where a shift worker for 41% - 60% of service dating from 1.7.1968, or date of joining service if it be subsequent - 10% loading.
(b) Where a shift worker for 61% - 80% of service dating from 1.7.1968, or date of joining service if it be subsequent - 15% loading.
(c) Where a shift worker for in excess of 80% of service dating from 1.7.1968, or date of joining service if it be subsequent - 20% loading.
Determination of shift work status for employees in the period July 1968 to December 1979 be on the basis of “classification”. That is, an employee classified as a driver (engineman), guard etc., within this period of time be regarded as a shift worker for the purpose of this application. The nominated classification will be consistent with those identified, and applied with the introduction of loadings on superannuation in 1968, as contained in Annexure “A”.
Proportion of shift work status for the remaining period of service, from January 1980 to date of retirement or decease, will be determined on an individual employee basis from records held in favour of the employee. Namely, holiday cards which are coded to identify shift work status.
The new method of ascertaining loadings for superannuation purposes are to apply to employees who retire or decease on or after 1.12.1987 and who during the course of their service were required to change from shift worker to non-shift worker due to:-
SRA initiatives
Promotion to supervisory callings
Injury on duty
Health or vision failure
It is obvious arrangements will need to be made between staff sections and timekeeping sections in order to provide accurate data relating to the “determination of shift work status based on classification”.
Please arrange accordingly and ensure all staff, under your control, are aware of the altered/additional methodology to be applied, including those officers required to perform relief.
J COX
MANAGER
TIMEKEEPING SERVICES SECTION”
[10] In 1994 an additional policy prescription was articulated by way of the following memorandum dated 6 April 1994 (the 1994 memo):
“EMPLOYEES REQUIRED TO CHANGE FROM SHIFT WORKER TO NON-SHIFT WORKER STATUS - TREATMENT OF SALARY FOR SUPERANNUATION PURPOSES
I refer to instructions issued on 14 December, 1987, under the ‘above heading’; recent discussions have revealed that many senior officers have been identified as qualifying for an additional loading due to their change of status from shiftworker to non-shiftworker, on the assumption that they have been promoted to a supervisory calling.
Whilst not dismissing the possibility of a senior officer being in a supervisory calling (eg Per Way Inspectors) it must be clearly understood that many positions are managerial and are not therefore due the loading.
All Principal Timekeepers are required to satisfy themselves as to the entitlement or otherwise and must certify to the effect that they have personally checked same.
For your information and dealing.
W DONNELLY
Acting Manager
Timekeeping Services”
[11] Mr Procter retired after 42 years service, 27 of which he worked as a shift worker. Mr Procter requested RailCorp to recognise his 27 years of shift work for superannuation final salary calculations. If Mr Procter’s period of shift work was recognised it represented 64.29% of his total period of service and in accordance with the scale set out in the 1987 prescription this would equate with an additional loading of 15% on his final salary figure. RailCorp refused to recognise Mr Procter’s period of shift work and he did not receive any loading on his final annual salary figure which RailCorp provided to SASS.
[12] Mr Procter has challenged RailCorp’s decision not to include any loading on his final salary figures for superannuation purposes. Consequently this dispute involves the interpretation and application of RailCorp’s policy, as documented by the 1987 prescription and the 1994 memo, to the circumstances of Mr Procter’s employment.
The Applicant’s Case
[13] Mr Kennedy from the AMWU submitted that the decision by RailCorp not to recognise the period that Mr Procter worked as a shift worker for the purposes of including a loading on his superannuation final salary figure, represented a failure by RailCorp to comply with its own policy. Consequently, according to Mr Kennedy, the subject matter of the dispute was something that provided jurisdiction for FWA to determine via the DSP contained in the Agreement.
[14] Mr Kennedy submitted that an analysis of the employment history of Mr Procter should have resulted in RailCorp establishing that (a) Mr Procter was entitled to a shift work loading and, (b) the applicable loading was 15% or some other amount.
[15] Mr Kennedy said that the determination of the dispute should be made by interpretation of the words contained in the 1987 prescription. Mr Kennedy submitted that a proper application of the words contained in the 1987 prescription to the employment circumstances of Mr Procter, should lead to the conclusion that Mr Procter was entitled to a 15% loading on top of his salary to be notified to SASS.
[16] Mr Kennedy retraced the employment history of Mr Procter. In particular Mr Kennedy submitted that Mr Procter moved from shift work to non-shift for reasons that satisfied several of the criteria contained in the 1987 prescription. Mr Kennedy made submissions in respect to each of the criteria set out in the 1987 prescription.
[17] In respect to the criteria “SRA initiatives” Mr Kennedy said that RailCorp had incorrectly considered “SRA initiatives” to be restricted to organisational restructures or reforms. Mr Kennedy submitted that the uncontested evidence was that Mr Procter’s return to the workshop as Maintenance Manager was via a secondment at the request of more senior managers of RailCorp. Mr Kennedy submitted that these circumstances satisfied the words “SRA initiatives,” in that Mr Procter’s move in 2005 from the shift work position of Duty Manager to the non-shift work position of Maintenance Manager was something that occurred as a consequence of an initiative of RailCorp.
[18] Mr Kennedy also submitted that the reference to “Promotion to supervisory callings” in the 1987 prescription was satisfied when Mr Procter moved to the Maintenance Manager position in 2005. Mr Kennedy said that RailCorp staff who assessed Mr Procter’s circumstances erroneously introduced a concept that the promotion had to be within “a natural line of progression” for it to satisfy the criteria of “Promotion to supervisory callings.”
[19] Mr Kennedy said that relevant RailCorp staff had not examined whether the work performed by Mr Procter when he commenced on non-shift work as Maintenance Manager was supervisory but instead had drawn a conclusion that because it attracted a pay scale of RC6 or RC7 no further inquiry was warranted. Mr Kennedy submitted that the evidence produced to FWA established that at least when initially engaged in the Maintenance Manager position, Mr Procter was involved in supervision on a daily basis. Further, according to Mr Kennedy it was the position at the time of change to non-shift work that was relevant and not whatever was involved with the position occupied at the time of retirement.
[20] Mr Kennedy also made submissions regarding the criteria of injury on duty and health or vision failure mentioned in the 1987 prescription. Mr Kennedy said that the only reason that Mr Procter moved from the workshop was his health issues. Further, according to the submissions made by Mr Kennedy, RailCorp has not made any proper consideration of the contribution that health issues had in Mr Procter’s employment movements. Mr Kennedy said that the absence of such consideration must lead to a conclusion that the resultant decision was unjust and unreasonable.
[21] Mr Kennedy highlighted potential for inequitable outcomes to emerge from the application and interpretation of the 1987 prescription. Mr Kennedy accepted that the 1987 prescription should be replaced because it resulted in outcomes that were illogical, unjust and unreasonable and he pointed to Mr Procter’s circumstances as a case in point. Mr Kennedy said that RailCorp had failed to properly consider Mr Procter’s claim and that for the vast majority of his working life he was a shift worker and the circumstances of his move to non-shift work satisfied the terms of the 1987 prescription. Consequently, according to Mr Kennedy, on any test of reasonableness Mr Procter was entitled to a shift worker loading on his superannuation salary.
[22] In summary, Mr Kennedy submitted that RailCorp had failed to properly apply its policy in respect to calculation of final salary for superannuation when it refused Mr Procter’s request. Mr Kennedy said that Mr Procter’s circumstances, when properly considered, obliged RailCorp to include a 15% shift work loading on his final salary figure and he urged FWA to find accordingly and make order for payment of the loading.
The Case for RailCorp
[23] Ms A Phan who appeared for RailCorp commenced her submissions by acknowledging that Mr Procter had spent a large part of his career in shift work and it was understandable that he believed that he deserved some recognition for his extensive period as a shift worker. However, Ms Phan said that unless Mr Procter’s particular circumstances met the requirements imposed by the 1987 prescription there was no entitlement arising for Mr Procter just based on the length of time he spent as a shift worker.
[24] Ms Phan submitted that the 1987 prescription did not establish an across the board benefit to all employees who had performed shift work at some point in their career. Ms Phan said that the entitlement only arose in circumstances where an employee moved from shift work to non-shift work in circumstances which were broadly out of their own control. Those circumstances were particularised in the four points mentioned in the 1987 prescription.
[25] Ms Phan further submitted that any interpretation of the two relevant policy documents needed to have regard for the overall intention of the documents. Ms Phan submitted that the intention of the documents was to ensure that there was no net disadvantage to an employee who moved from shift work to non-shift work in circumstances outside of their control. Ms Phan described the no net disadvantage purpose as the underlying rationale upon which any interpretation and application of the documents should be decided.
[26] Ms Phan made further submissions which examined the four provisions of the 1987 prescription against the particular circumstances of Mr Procter. Ms Phan submitted that the notion of “SRA initiatives” was restricted to organisational restructures or reforms. Ms Phan said that Mr Procter’s move from shift work to non-shift work in 2005 was not associated with any reform or restructure. In any event, according to Ms Phan any subsequent promotion into managerial roles operated to remove any ongoing operation of the terms of the 1987 prescription. Ms Phan noted that Mr Procter received a substantial increase in salary, something in the order of 30%, and these circumstances should not be held to represent a change from shift work to non-shift work due to “SRA initiatives.”
[27] Mr Phan made further submissions which rejected the AMWU's assertions regarding the interpretation that should be applied to “Promotion to supervisory callings” as contained in the 1987 prescription. Ms Phan acknowledged that this terminology was relevant to a bygone era where promotions and transfers occurred on a seniority basis as opposed to a merit selection.
[28] Ms Phan made further submissions which rejected the suggestion that the Maintenance Manager position to which Mr Procter moved when he left shift work, could be held to be a supervisory calling. Ms Phan said that the Maintenance Manager position was not a frontline supervisory role and that a managerial role did not preclude a person from having day-to-day contact with staff, including in a supervisory capacity.
[29] Ms Phan made further submissions regarding the issue of any injury on duty or health or vision failure as representing a basis to grant Mr Procter’s claim. Ms Phan said that there was no evidence that there were any injury or health issues connected with Mr Procter’s move from shift work to non-shift work which occurred in 2005 when he transferred into the Maintenance Manager position.
[30] In summary, Ms Phan submitted that the claim made by Mr Procter sought to have the 1987 prescription interpreted and applied in a manner which would be contrary to established practice. According to Ms Phan, FWA should find that RailCorp had not misapplied the terms of the 1987 prescription to Mr Procter. Ms Phan said that RailCorp’s decision to reject Mr Procter’s claim was consistent with both the terms of the policy documentation and the rationale of these documents which involved a no disadvantage outcome and not a financial windfall. Ms Phan urged FWA to find in favour of RailCorp.
Consideration
[31] The dispute in this case has involved a contest about the interpretation and application of terms contained in two of the employer’s policy documents. The parties approach to interpretation of these documents accorded them similar status to industrial instruments. The interpretation of industrial instruments is not a matter of strict statutory interpretation. Although the words in an industrial instrument may be given their plain literal meaning, it is well established that often it is appropriate to adopt a contextual and purposive approach broadly based upon authority established by a body of decision-making which is well summarised in the Decision in AMWU v Silcar Pty Ltd (Silcar) 1.
[32] Consequently I have approached consideration of this matter as an exercise involving the interpretation and application of the 1987 prescription and the 1994 memo by utilisation of the contextual and purposive approach as referred to in the Silcar Decision.
[33] The first aspect of consideration has involved recognition of the somewhat antiquated nature of the documents under examination. The 1987 prescription includes numerous terms which, after 25 years, are plainly obsolete. Consequently a literal interpretation of many of the words in the 1987 prescription and the 1994 memo would be difficult to translate into contemporary circumstances.
[34] It is highly regrettable that RailCorp has not updated its policy in the past 18 years. This abject absence of timely managerial action has placed relevant staff in the invidious position of being required to interpret and apply policy prescriptions which are largely irrelevant to current day circumstances. Consequently recommendations are made later in this Decision to redress these unacceptable circumstances.
The 1987 Prescription
[35] In turning to an analysis of the terms of the 1987 prescription there was no evidence to explain the reference that it contains to, “... the fact loadings on salary for superannuation due to shift work implications were introduced in 1968,” It seems that in 1968 loadings for superannuation for shift workers commenced at the SRA. That would seem to have been the starting point for a recognition that some period of work as a shift worker should result in an additional loading on superannuation. The heading of the 1987 prescription and other of its terms, establishes that it addresses circumstances where an individual is a non-shift worker at the time of retirement or death. A person who is working as a shift worker at the time of retirement or death apparently has a 20% loading without question, although there was a suggestion made from the bar table that a minimum qualifying period of 104 shifts needed to have been worked in the calendar year before retirement. 2
[36] Consequently it is clear that the 1987 prescription is firstly confined in its operation to persons who are non-shift workers at the time of their retirement or death. Further, the 1987 prescription, in its heading and its specific terms, makes reference to persons “required to change from shift worker to non-shift worker” [emphasis added]. It particularises four circumstances to be connected with the requirement to change from shift to non-shift work, namely:
SRA initiatives
Promotion to supervisory callings
Injury on duty
Health or vision failure
[37] Logically these circumstances have been taken as separate rather than cumulative requirements. Therefore the 1987 prescription is further confined in its application to non-shift workers who were required to “leave” shift work and that change is due to any one of the four specified circumstances.
[38] Despite the potential for ambiguity and uncertainty arising about the words used to describe the four circumstances which cause the change to non-shift work, it was clearly intended, for whatever reason, that not all non-shift workers at the time of retirement who had prior periods of work on shift would qualify for the additional loadings. As a hypothetical example, the 1987 prescription would treat a shift worker who for personal family related reasons decided to relocate to a location which did not have any shift work, as without any entitlement to recognition of the prior period as a shift worker.
[39] Before undertaking any detailed analysis of the four circumstances specified in the 1987 prescription it is instructive to consider the contents of the 1994 memo.
The 1994 Memo
[40] The 1994 memo referred to the 1987 prescription and sought to address an identified problem involving the application of the circumstance described in the 1987 prescription as “Promotion to supervisory callings.” A plain reading of the 1994 memo reveals that between 1987 and 1994, “senior officers” had apparently been identified as qualifying for the additional loading when by virtue of the position they occupied, they were not so entitled.
[41] The identification of this problem in 1994 highlighted one of many potential ambiguities inherent in the wording of the 1987 prescription. Specifically, what was to apply if a person satisfied the circumstance of a promotion to a supervisory calling at the time that they changed from shift work to non-shift work but then they were further promoted and at the time of retirement or death they occupied a position not of a supervisory calling?
[42] The 1994 memo clearly answered this question by establishing that even if there was an initial promotion to a supervisory calling which provided an entitlement to the loading, that entitlement would be extinguished by any subsequent promotion to a managerial position. Unfortunately this still left potential ambiguity and argument about what was and was not a managerial position. Nevertheless, importantly, the 1994 memo established that the entitlement to the loading was to be assessed by reference to the position held at the time of retirement or death irrespective of any earlier requirement to change to non-shift work which may have provided a clear qualification for the loading.
[43] Whether the 1994 memo had application to the other three circumstances described in the 1987 prescription was not entirely clear. Consequently, the following hypothetical examples of the application of the 1994 memo in conjunction with the 1987 prescription would emerge. Example 1; Employee Bob left shift work because he took a promotion to a supervisory calling, initially he was entitled to the relevant percentage loading. However he was subsequently promoted to a payroll manager and therefore lost any entitlement to the loading. Example 2; Employee Jill left shift work because she was injured at work and she was redeployed as a payroll manager. Many other hypothetical examples can be contemplated.
[44] A strict interpretation of the 1994 memo would undoubtedly deny both Bob and Jill any entitlement to the loading. Essentially, upon strict application, the 1994 memo extinguishes any prior right to a shift loading if the position occupied at the time of retirement or death is a managerial position. Whether the 1994 memo intended to include in its operation a person such as the hypothetical example of Jill as postulated above, is debatable.
[45] The ambiguities that emerge from the terminology used in both the 1987 prescription and the 1994 memo create great potential for inequity with the provision of the loading as recognition for periods of shift work. Further, there is significant potential for attempted manipulation of the policy prescription where persons may seek to take up a shift work position in a period shortly before retirement and thereby obtain a 20% loading while another person who may have worked for the vast majority of their service on shift, is ineligible and receives no recognition for an extensive period as a shift worker.
[46] Notwithstanding the difficulties with any application of the 1987 prescription and the 1994 memo and the urgent need for RailCorp to replace these obsolete policy documents, FWA has been required to assess the particular circumstances of Mr Procter and determine his position by reference to and application of these policy prescriptions.
[47] Mr Procter’s first significant career move occurred in 2000 when he left the workshop and went to train station work as a Duty Manager. There was evidence to suggest that this move was caused by the health related factors associated with the arduous nature of the workshop work performed by Mr Procter. There is capacity for this job change to satisfy the broad notion of “Health or vision failure” as mentioned in the 1987 prescription. However this job change did not result in any change from shift work to non-shift work and therefore it was not relevant to any application of the 1987 prescription.
[48] The next significant career move for Mr Procter came in 2005. At this time Mr Procter left the shift work position of Duty Manager and went to the non-shift work Maintenance Manager position. It is this particular job change which is relevant to any application of the 1987 prescription.
[49] The AMWU argued that as Mr Procter was approached by more senior RailCorp management to accept an initial secondment to the Maintenance Manager position this job change could satisfy the circumstance as an SRA initiative. This proposition must be rejected.
[50] The notion of SRA initiatives is very different to “at the initiative of SRA”. SRA initiatives would logically not encompass any job change which may have occurred at the suggestion of SRA or now RailCorp. This is because almost every change to the contact of employment which involves alteration to duties and functions involves an offer and acceptance, usually by the employer to the employee (although not necessarily in such direction). Consequently if the words “SRA initiatives” was given the meaning as urged by the AMWU, it would be satisfied in almost every job change and would represent little, if any, constraint upon the circumstances in which a change from shift to non-shift would give rise to the entitlement to the additional loading percentages.
[51] SRA initiatives must logically be a reference to an organisational restructure or reform which would usually involve more than an alteration to the duties and functions performed by one individual.
[52] Additionally it was contended that when Mr Procter left shift work in 2005 and took up the position of Maintenance Manager he was promoted to a supervisory calling. This prospect had some strength. Although Mr Procter had “detoured” through the Duty Manager position he was promoted to a position which involved supervision of work that he had performed between 1970 and 2000.
[53] The concept of a supervisory calling can arguably encompass a very broad array of specific position descriptions. A supervisory calling may include a variety of positions which have varying degrees of direct supervision of others as one of the functions of the position. The initial position to which Mr Procter was promoted as Maintenance Manager would on balance, satisfy the terminology of a supervisory calling as was contemplated in the 1987 prescription if, the promotion had been made by virtue of the seniority system that was applicable in 1987 as opposed to the merit based selection process that operated in 2005.
[54] Further, the 1994 memo intervenes and becomes relevant to the circumstances of Mr Procter because he obtains a re-grading from RC6 to RC7 and his role and function as Maintenance Manager alters with the appointment of a subordinate Service Manager. These changes mean that the position occupied by Mr Procter at the time of his retirement was a managerial position and according to the 1994 memo “not therefore due the loading.” Consequently even if he did qualify when appointed to the initial Maintenance Manager position (if it had been via seniority rather than merit), the position he occupied at time of retirement is what must be examined and not the position he occupied when the change from shift to non-shift work occurred.
[55] There were no injury or health or vision issues associated with Mr Procter’s change from shift to non-shift work in 2005 when he was promoted into the Maintenance Manager position.
Conclusion
[56] The determination of this matter has involved the interpretation of particular words in two of the employer’s policy documents. These two documents require urgent revocation and replacement. The policy documents deal with entitlements in respect of superannuation for persons who have worked as shift workers and at the time of retirement or death have moved to a non-shift work position. The interpretation of the documents has been made difficult because their terms are in most respects obsolete.
[57] Despite the difficulties with the interpretation and application of the 1987 prescription and the 1994 memo, I have concluded that the circumstances of Mr Procter’s employment do not satisfy the intended policy that the documents attempt to convey. In summary the intention of the policy prescription is to limit the circumstances that an additional loading on salary can apply in recognition for periods of shift work. The policy prescription would not provide for the additional loading to apply to the position held by Mr Procter at the time of his retirement.
[58] Consequently the claim advanced by Mr Procter must be rejected on the basis that the terms of the 1987 prescription and the 1994 are not satisfied by the circumstances of Mr Procter’s employment history.
[59] The inadequacy of the 1987 prescription and the 1994 memo as a policy prescription is an unfortunate refection of inattentive management. Just how important policy documents could remain unrevised for over 18 years is surprising.
[60] I recommend that RailCorp take steps to develop a policy prescription to replace the 1987 and 1994 documents as a matter of urgency.
[61] In the years since Railcorp last dealt with its relevant policy there have been significant developments in the area of scientific study into the health impacts of shift work. In particular there have been numerous scientific studies into shift work and life expectancy.
[62] In my view, I believe that in 2012, a policy prescription which limits the application of an additional loading on superannuation in recognition for periods of shift work is inappropriate and unjust. In broad terms the loading paid for shift work reflects the detrimental aspects associated with shift work including, importantly, the well established health impacts. These health impacts do not disappear if a person becomes a manager and receives a higher salary.
[63] It seems to me that the proper connection for any calculation of the loading on superannuation salary is the time spent as a shift worker, irrespective of the reasons that may have surrounded the individual’s length of time as a shift worker. There is a fundamental injustice if the payment of the 20 % loading is made to a person who works one year as a shift worker prior to retirement after 19 earlier years on day work, while another person who worked 19 years on shift before changing to day work in their last year gets no loading whatsoever.
[64] I urge RailCorp to give consideration to the adoption of the following simple mechanism for calculation of an additional loading to apply to salary for superannuation on retirement or death.
Any person who is not working as a shift worker at the time of retirement or death but who has previously worked a period(s) of shift work shall be entitled to an additional loading on their final salary calculation for superannuation in accordance with the following formula:
Period of shift work is expressed as a percentage of total period of service = PS
Period of Shift Work | Additional Loading % |
PS less than 20 | 0 |
[65] This mechanism for calculation of the additional loading would mean that no loading would apply to any person unless they had worked as a shift worker for at least 20 % of their total period of service. (The existing “rules” applicable to a person working as a shift worker at the time of retirement or death would continue to apply but this apparently excludes a person with less than 104 shifts in the previous calendar year.) This mechanism then provides a simple sliding scale based on direct recognition of the percentage of time worked as a shift worker up to a maximum of 20 % loading.
[66] This mechanism would potentially lead to outcomes whereby some individuals may benefit and some others may obtain a lower percentage loading. Consequently, if the mechanism is adopted there may need to be a process established for dealing with any individual claim for preservation of a pre-existing entitlement.
[67] In addition, there may be a desire to retain the notion contained in the 1994 memo which imposed an arbitrary disentitlement of any loading if an individual obtained a more highly paid position (managerial as described). Although the loadings impact as a percentage of a higher salary figure, I personally do not believe that it is appropriate to remove recognition for extensive periods of shift work just because an individual was successful in achieving a more highly paid position. This is particularly the case in relation to superannuation payments which have connection to health impacts which may reduce life expectancy. However, if the simple sliding percentage scale mechanism is adopted, an arbitrary salary figure could be used as a means to identify either a disentitlement to any loading or the application of a lower percentage scale.
[68] If, after the relevant deliberations and consultations, RailCorp adopts the sliding percentage scale mechanism as I have suggested or in some similar format, I believe that as an act of good faith that mechanism should be applied to Mr Procter. As a means to provide example of the mechanism and its application to Mr Procter the following calculation is provided. Mr Procter worked 27 years on shift out of 42 years in total this represents 64.28 % which is multiplied by 1/5 which equals 12.85. Therefore Mr Procter would be entitled to a final salary loading of 12.85% as recognition of his period as a shift worker.
[69] In view of the conclusions that I have reached and the recommendations that I have made, the parties are advised that if further proceedings are required to assist with the development of a policy prescription to replace the 1987 and 1994 documents, a written request should be made within 21 days from the date of this Decision.
COMMISSIONER
Appearances:
Mr J Kennedy appeared on behalf of the AMWU.
Ms A Phan appeared on behalf of RailCorp.
Hearing details:
2012.
Sydney:
October, 23 & 25.
1 Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU) v Silcar Pty Ltd [2011] FWAFB2555.
2 Transcript of proceedings (23 Oct 2012) PN300.
Printed by authority of the Commonwealth Government Printer
<Price code C, PR531495>
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