“Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers' Union (AMWU) v UGL Pty Ltd T/A UGL Limited

[2020] FWC 889

[2020] FWC 889

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.739—Dispute resolution

“Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU)
v
UGL Pty Ltd T/A UGL Limited
(C2019/6445)

DEPUTY PRESIDENT SAUNDERS NEWCASTLE, 19 FEBRUARY 2020

Application to deal with a dispute in accordance with a dispute procedure in an enterprise agreement – interpretation of enterprise agreement – rates of pay for casual employees rostered to perform night shift work.

Introduction and background

[1] The Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union known as the Australian Manufacturing Workers’ Union (AMWU) and UGL Operations and Maintenance (Services) Pty Ltd (UGL) are in dispute about the rate of pay to be paid to casual employees rostered to perform night shift work (Dispute) under the RCR Energy Pty Ltd Enterprise Agreement 2018 (Agreement).

[2] On 21 October 2019, the AMWU filed an application pursuant to s 739 of the Fair Work Act 2009 (Cth) (Act) in the Fair Work Commission (Commission) for the Commission to deal with the Dispute.

[3] Following an unsuccessful conciliation conference, I listed the Dispute for arbitration on 11 February 2020. The parties filed an Agreed Statement of Facts and written submissions. On receipt of this material by the Commission, the parties agreed that the matter could be determined on the ‘papers’.

[4] There is no dispute between the parties, and I am satisfied on the evidence, that I have jurisdiction to arbitrate the Dispute.

Agreed facts

[5] The parties filed an Agreed Statement of Facts in the following terms:

1. On 28 February 2019, the Respondent acquired from RCR Energy Pty Ltd (RCR Energy) its upgrades and maintenance business. This business included work in relation to outages at power stations such as at the Bayswater Power Station.

2. The RCR Energy Pty Ltd Enterprise Agreement 2018 (Agreement) transferred in accordance with Part 2-8 of the Fair Work Act 2009 (Cth) with some ex-RCR Energy employees when their employment was transferred to the Respondent on 28th February 2019 (Transferred Employees).

3. Some of the Transferred Employees were casual employees with RCR Energy, and upon their acceptance of employment and transfer to the Respondent, those Transferred Employees have remained casual employees.

4. Since August 2019, some of the casual Transferred Employees have been working a night shift meaning a shift finishing after midnight and at or before 8.00 a.m. on particular shutdown activities extending beyond 4 weeks (Night Shift).

5. The Respondent has paid the casual Transferred Employees on Night Shift (Night Shift Casuals) on the basis of cumulative calculation totalling $57.36 per ordinary hour as follows at the Tradesperson classification:

a. $37.01 as the base rate of each ordinary hour worked; plus

b. $9.25, being the casual loading of 25% of the base rate; plus

c. $11.10, being the night shift loading of 30% of the base rate.

6. The Applicant is an employee organisation that has coverage of the industrial interests of the Night Shift Casuals.

7. On 6 September the Applicant made representations to the Respondent on behalf of their members who are Night Shift Casuals disputing the amount of pay they received for the performance of the Night Shift work. The Applicant argued that the night shift loading should be paid on an hourly rate of pay that included both the casual loading and the base rate of pay. The Applicant’s calculations were as follows:

a. $37.01 as the base rate of each ordinary hour worked, multiplied by

b. 125% of the base rate, resulting in an hourly rate of pay of $46.26 and

c. $46.26 multiplied by 130% being the night shift loading to give a total rate of $60.14.

8. The parties met shortly after 6 September 2019 to discuss their competing contentions about the correct calculation of Night Shift payments to the Night Shift Casuals for working on Night Shift. An agreed settlement has not been achieved.

9. The Applicant and the Respondent agree that the Fair Work Commission has the jurisdiction to determine and resolve the dispute.

Questions for arbitration

[6] The AMWU wishes the Commission to answer the following question:

“Does the Agreement require that payment for the ordinary time of the Night Shift work by the affected employees be determined on an hourly rate of pay that incorporates the casual loading (as per paragraph 7 of the Agreed Statement of Facts)?”

[7] The question for determination, as UGL sees it, is:

“Whether, by reference to the Agreed Statement of Facts, does the Agreement require that the Night Shift work during ordinary time by the Night Shift Casuals be treated and paid on a compounding basis in accordance with the AMWU’s contention in paragraph 7 of the Agreed Statement of Facts?”

[8] Although the parties have put the question for determination in slightly different terms, there is no doubt that the Dispute concerns whether the night shift loading should be applied to:

(a) the base rate of pay, as contended for by UGL, such that the applicable hourly rate of pay for Night Shift work performed during ordinary hours by Night Shift Casuals (at the Tradesperson classification) is $57.36 (($37.01 (base rate) + $9.25 (25% casual loading) + $11.10 (30% night shift loading applied to the base rate)); or

(b) the base rate of pay plus the casual loading, as contended for by the AMWU, such that the applicable hourly rate of pay for Night Shift work performed during ordinary hours by Night Shift Casuals (at the Tradesperson classification) is $60.14 (($37.01 (base rate) + $9.25 (25% casual loading)) x 130% night shift loading).

Relevant provisions of the Agreement

[9] The following provisions of the Agreement are relied on by the parties as being relevant to the Dispute:

“6 AWARD TERMS INCORPORATED INTO THIS AGREEMENT

6.1 The terms of the Award 1 (except those terms specifically excluded in this Clause) are incorporated into this Agreement. If an incorporated Award term is inconsistent with an express term of this Agreement, the express term of this Agreement prevails over the incorporated Award term to the extent of any inconsistency.

6.2 The terms of the Award that are excluded from this Agreement are:

(a) Clause 7 – Award flexibility

(b) Clause 10 – Dispute resolution

(c) Clause 24 – Classification and adult minimum wages

…

Casual Employment

11.4 A casual employee is one engaged and paid as such.

11.5 A casual employee is paid at the ordinary hourly rate of pay for the relevant classification plus a casual loading of 25%.

11.6 The casual loading will apply only on ordinary hours worked, with overtime paid in accordance with clause 24.2.

…

19 MISCELLANEOUS ALLOWANCE

Workshop to Site Deployment

19.1 An Employee who works permanently at the Employer's Service Facility and who is directed by the Employer to work on a site will paid a miscellaneous allowance of $1.00 per hour.

19.2 Eligible Employees will be paid the miscellaneous allowance in addition to other allowances prescribed in this Agreement and the ordinary hourly rate of pay specified for their classification.

19.3 The miscellaneous allowance will be an all purpose allowance and will apply for all hours of work performed on site.

20 SITE ALLOWANCE

20.1 The Employer will pay an Employee a site allowance of $2.50 per hour (all-purpose) for working on site as defined in clause 3.1(b) and clause 3.1(c) to compensate the Employee for:

(a) all site conditions, including dirt, heat, cold, confined spaces etc.; and

(b) variations in daily travel to and from local sites

20.2 The casual loading does not apply to the site allowance.

20.3 The site allowance will attract overtime rates of time and a half for the first two hours and double time thereafter in accordance with clause 24.

20.4 Payment of the site allowance is in lieu of all allowances and special rates prescribed in clause 32 - Allowances and special rates - of the Award.

…

PART 6 – HOURS OF WORK

22 ORDINARY HOURS OF WORK

22.1 The Employees and Employer agree that maximum flexibility will be available to facilitate working arrangements that best serve the needs of the enterprise, including the performance of afternoon and night shift work and reasonable overtime.

22.2 The ordinary hours of work for day work will be an average of 38 hours per week.

22.3 The ordinary hours of work may be worked on any or all days of the week Monday to Friday (inclusive), between the hours of 6:00am and 6:00pm.

….

24 OVERTIME RATE

24.1 Where an Employee is required to work outside the Ordinary Hours of Work, the following overtime rates will apply:

(a) Monday to Friday - Time and a half for the first two hours, then double time.

(b) Saturday - Time and a half for the first two hours, then double time.

(c) Sunday - Double time for all hours worked.

24.2 Casual Employee will be paid the relevant overtime rates prescribed by clause 24.1 provided that:

(a) Where the relevant overtime rate is time and a half, the Employee must be paid 175% of the equivalent full-time hourly rate prescribed for the Employee classification; and

(b) Where the relevant overtime rate is double time, the Employee must be paid 225% of the equivalent full-time hourly rate prescribed for the Employee classification.

24.3 In computing overtime, each day's work stands alone.”

Relevant provisions of the Award

[10] The following provisions of the Award are relied on by the parties as being relevant to the Dispute:

“14. Casual employment

14.1 A casual employee is one engaged and paid as such. A casual employee for working ordinary time must be paid an hourly rate calculated on the basis of one thirty-eighth of the minimum weekly wage prescribed in clause 24.1(a) for the work being performed plus a casual loading of 25%. The loading constitutes part of the casual employee’s all purpose rate.

…

Part 5 – Hours of Work and rostering

36. Ordinary hours of work and rostering

36.2 Ordinary hours of work – day workers

…

36.3 Ordinary hours of work – continuous shiftworkers

(a) Continuous shiftwork means work carried on with consecutive shifts of employees throughout the 24 hours of each of at least six consecutive days without interruption except for breakdowns or meal breaks or due to unavoidable causes beyond the control of the employer.

(b) Subject to clause 36.3(c), the ordinary hours of continuous shiftworkers are, at the discretion of the employer, to average 38 hours per week inclusive of meal breaks and must not exceed 152 hours in 28 consecutive days. Continuous shiftworkers are entitled to a 20 minute meal break on each shift which must be counted as time worked.

(c) By agreement between the employer and the majority of employees concerned, a roster system may operate on the basis that the weekly average of 38 ordinary hours is achieved over a period which exceeds 28 consecutive days but does not exceed 12 months.

(d) Except at the regular changeover of shifts, an employee must not be required to work more than one shift in each 24 hours.

36.4 Ordinary hours of work – non-continuous shiftworkers

(a) Subject to clause 36.4(b), the ordinary hours of work for non-continuous shiftworkers are an average of 38 per week and must not exceed 152 hours in 28 consecutive days.

(b) By agreement between the employer and the majority of employees concerned, a roster system may operate on the basis that the weekly average of 38 ordinary hours is allowed over a period which exceeds 28 consecutive days but does not exceed 12 months.

(c) The ordinary hours of work must be worked continuously, except for meal breaks, at the discretion of the employer.

(d) Except at changeover of shifts an employee must not be required to work more than one shift in each 24 hours.

…

37. Special provisions for shiftworkers

37.1 For the purposes of the Award:

(a) rostered shift means any shift of which the employee concerned has had at least 48 hours notice;

(b) afternoon shift means any shift that finishes after 6:00 pm and before midnight; and

(c) night shift means any shift that finishing after midnight and at or before 8:00 am.

37.2 By agreement between the employer and the majority of employees concerned or in appropriate cases an individual employee, the span of hours over which shifts may be worked may be altered by up to one hour at either end of the span.

37.3 Afternoon and Night Shift Allowances

(a) An employee who works an afternoon or night shift must be paid 15% extra for such shift.

(b) An employee who works on an afternoon or night shift which does not continue:

(i) for at least five successive afternoon or night shifts or six successive afternoon or night shifts in a six day workshop (where no more than eight ordinary hours are worked on each shift); or

(ii) for at least 38 ordinary hours (where more than eight ordinary hours are worked on each shift and the shift arrangement is in accordance with clauses 36.3 or 36.4),

must be paid for each shift 50% extra for the first three hours and 100% extra for the remaining hours.

(c) An employee who:

(i) during a period of engagement on shift, works night shift only; or

(ii) remains on night shift for a longer period than four consecutive weeks; or

(iii) works on a night shift which does not rotate or alternate with another shift or with day work so as to give the employee at least one third of their working time off night shift in each shift cycle,

must, during such engagement, period or cycle, be paid 30% extra for all time worked during ordinary working hours on such night shift.”

Principles of construction

[11] There is no dispute between the parties as to the principles that I must apply in properly construing the Agreement. Those principles were summarised by the Full Bench in AMWU v Berri Pty Ltd 2 (Berri) as follows:

“1. The construction of an enterprise agreement, like that of a statute or contract, begins with a consideration of the ordinary meaning of the relevant words. The resolution of a disputed construction of an agreement will turn on the language of the agreement having regard to its context and purpose. Context might appear from:

(i) the text of the agreement viewed as a whole;

(ii) the disputed provision’s place and arrangement in the agreement;

(iii) the legislative context under which the agreement was made and in which

it operates.

2. 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.

3. The common intention of the parties is sought to be 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, without regard to the subjective intentions or expectations of the parties.

4. The fact that the instrument being construed is an enterprise agreement made pursuant to Part 2-4 of the FW Act is itself an important contextual consideration. It may be inferred that such agreements are intended to establish binding obligations.

5. The FW Act does not speak in terms of the ‘parties’ to enterprise agreements made pursuant to Part 2-4 agreements, rather it refers to the persons and organisations who are ‘covered by’ such agreements. Relevantly s.172(2)(a) provides that an employer may make an enterprise agreement ‘with the employees who are employed at the time the agreement is made and who will be covered by the agreement’. Section 182(1) provides that an agreement is ‘made’ if the employees to be covered by the agreement ‘have been asked to approve the agreement and a majority of those employees who cast a valid vote approve the agreement’. This is so because an enterprise agreement is ‘made’ when a majority of the employees asked to approve the agreement cast a valid vote to approve the agreement.

6. Enterprise agreements are not instruments to which the Acts Interpretation Act 1901 (Cth) applies, however the modes of textual analysis developed in the general law may assist in the interpretation of enterprise agreements. An overly technical approach to interpretation should be avoided and consequently some general principles of statutory construction may have less force in the context of construing an enterprise agreement.

7. In construing an enterprise agreement it is first necessary to determine whether an agreement has a plain meaning or it is ambiguous or susceptible of more than one meaning.

8. Regard may be had to evidence of surrounding circumstances to assist in determining whether an ambiguity exists.

9. If the agreement has a plain meaning, evidence of the surrounding circumstances will not be admitted to contradict the plain language of the agreement.

10. If the language of the agreement is ambiguous or susceptible of more than one meaning then evidence of the surrounding circumstance will be admissible to aid the interpretation of the agreement.

11. The admissibility of evidence of the surrounding circumstances is limited to evidence tending to establish objective background facts which were known to both parties which inform and the subject matter of the agreement. Evidence of such objective facts is to be distinguished from evidence of the subjective intentions of the parties, such as statements and actions of the parties which are reflective of their actual intentions and expectations.

12. Evidence of objective background facts will include:

(i) 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;

(ii) notorious facts of which knowledge is to be presumed; and

(iii) evidence of matters in common contemplation and constituting a common assumption.

13. The diversity of interests involved in the negotiation and making of enterprise agreements (see point 4 above) warrants the adoption of a cautious approach to the admission and reliance upon the evidence of prior negotiations and the positions advanced during the negotiation process. Evidence as to what the employees covered by the agreement were told (either during the course of the negotiations or pursuant to s.180(5) of the FW Act) may be of more assistance than evidence of the bargaining positions taken by the employer or a bargaining representative during the negotiation of the agreement.

14. Admissible extrinsic material may be used to aid the interpretation of a provision in an enterprise agreement with a disputed meaning, but it cannot be used to disregard or rewrite the provision in order to give effect to an externally derived conception of what the parties’ intention or purpose was.

15. In the industrial context it has been accepted that, in some circumstances, subsequent conduct may be relevant to the interpretation of an industrial instrument. But such post-agreement conduct must be such as to show that there has been a meeting of minds, a consensus. Post-agreement conduct which amounts to little more than the absence of a complaint or common inadvertence is insufficient to establish a common understanding.”

Submissions

AMWU submissions in chief

[12] The AMWU submits that the relevant terms of the Agreement, including the terms of the incorporated Award, have a plain meaning and that there is no ambiguity that ordinary hours worked have the casual loading applied to them.

[13] The AMWU also submits that there is no ambiguity in the wording of the Award clauses in relation to payment of shift allowance. The employee must be paid 15% (under Award clause 37.3(a)) or 30% (under Award clause 37.3(c)) extra for the work performed.

[14] The AMWU therefore submits that, in order for the obligations under the Agreement to be met, the 30% shift allowance must be calculated on the actual hourly rate received by the affected employees; that is, the base hourly rate and the casual loading added together.

[15] The AMWU does not dispute that clause 11.6 of the Agreement excludes the casual loading from the calculation of overtime payments. As such they submit that there is an inconsistency in relation to the incorporated Award clause 14.1, which treats the casual loading as part of the all purpose rate; which means that the Award clause extends the casual loading as being included in overtime pay.

[16] The AMWU submits, however, that in relation to the issue of casual loading, the “extent of any inconsistency” as outlined in clause 6.1 of the Agreement should only be interpreted as the difference between work performed in ordinary hours and work performed as overtime. To this end, the AMWU submits that there is no material difference under either clause 11.6 of the Agreement or clause 14.1 of the Award in relation to payment of casual loading for work performed in ordinary hours.

[17] The AMWU further submits that, as the Full Bench recently stated in Auld and Ors v Teekay Shipping (Australia) Pty Ltd, 3the incorporation of the Award “is an indication that all terms (express and incorporated) are to be given full effect except where there is direct inconsistency. Otherwise the terms are to be read as a whole to determine rights and obligations.”4 (emphasis added).

[18] The AMWU argues that the “direct” inconsistency between clause 11.6 of the Agreement and clause 14.1 of the Award is whether the casual loading applies to overtime. The AMWU submits that this is the extent of the inconsistency that exists between the clauses. As such, they argue that it is not inconsistent for the casual loading to be treated as part of the all purpose rate when work is being performed in ordinary hours. As it is not disputed that the night shift work is being performed in ordinary hours, the AMWU further argues it is appropriate for the shift allowance to be calculated on an all purpose rate, not the base rate of pay.

[19] As the only clauses in the Agreement that deal with the payment of shift allowance are those clauses that have been incorporated through the Award, the AMWU argues that there are no express terms in the Agreement that are inconsistent with the payment of shift allowance. As such, the AMWU believes that the wording of clause 37.3 of the Award should be sufficient to ensure that the shift allowance is not calculated on the ordinary hourly rate of pay for the classification, but on an hourly rate of pay that has incorporated the casual loading.

[20] They go on to argue, for completeness, that clause 24.2 of the Agreement uses the ordinary hourly rate of pay to calculate the rate of pay and that formula is different to that contained in the Award and as such it is not disputed that the clause is being applied correctly. What is disputed by the AMWU is that the inconsistency between the payment of overtime for casual employees in the Agreement compared to the Award extends beyond that inconsistency.

[21] The AMWU puts forward that clause 37.3 of the Award states that: the shift allowance is “extra”, the only restrictions on that term is how much is paid (eg 15% or 30%) and that the work is performed in ordinary hours, and the clause is silent on how the “extra” is calculated and it does not expressly exclude any allowance or additional penalty from the calculation.

[22] The AMWU contends that by using a plain meaning for “30% extra for all time worked”, it follows that the shift allowance has to be based on the total earned for the work performed. They say that if any payment is made over and above the base ordinary rate of pay per hour (or per shift), then it would need to be included in the calculation.

[23] The AMWU submits that by contrast if the night shift allowance was only calculated on the ordinary base rate of pay, an affected employee would only be earning about 24% extra for the ordinary time worked. 5 They argue that this is not how the Award clause can or should be interpreted.

[24] According to the AMWU, the terms of the Agreement and the incorporated terms of the Award pertaining to the payment of casual loading and shift allowance are expressed plainly. As such, they argue, the inconsistency between the terms of the Agreement and the incorporated terms of the Award is limited to the inclusion of casual loading for the calculation of overtime.

[25] The AMWU submits that the interaction of clause 11.6 of the Agreement and clause 14.1 of the Award requires the casual loading to form part of an all purpose rate of pay to be used to calculate the shift allowance for an affected employee. In the alternative, they submit that in order to comply with clause 37.3 of the Award the casual loading has to be incorporated into the calculation of the shift allowance, otherwise an affected employee would not be earning “30% extra for all time worked during ordinary hours.”

UGL submissions in chief

[26] UGL submits that no contention is taken by either party as to the negotiations that led to the making of the Agreement or any of its predecessors, so the Commission is only called on in this case to determine the question as a matter of textual construction.

[27] UGL contends that the Agreement makes no express provision for the arrangement or payment of shift work. However, in circumstances where clause 22 contemplates shift work but then does not deal with it, UGL agrees that the terms of the Award then regulate the arrangement and working of shift work consistently with clause 6 of the Agreement.

[28] UGL also agrees that clause 37.3(c) of the Award provides that an employee will be provided with 30% "extra" for the relevant night shift. They submit that the issue of course is 30% of what? UGL submits that unless one assumes that the casual loading is all-purpose, the term "extra" does not of itself have any significance whatsoever and that this is where the AMWU’s construction runs into difficulty in relying on what it characterises as essentially the Award terms being carried through all-purpose for everything except overtime such that no inconsistency arises.

[29] UGL argues that the relevant inconsistency is revealed by the objective departure of the parties from the Award in the text of the Agreement itself:

(a) The starting point is that the plain words of clause 11 of the Agreement make no mention of the casual loading being paid as part of an employee's all-purpose rate and clause 6 does not remedy that defect given the different words adopted in clause 11.5.

(b) On the contrary, clause 11.6 and clause 24 illustrate that the casual loading is not, and cannot be, all-purpose in the expression of casual loading in clause 11.

(c) That significance is illustrated by the way in which in contradistinction the parties objectively must be taken to have given direct thought to what would or would not be all-purpose: see for example clauses 19 and 20.

[30] UGL further submits that while in this case one arrives at the relevant conclusion for different reasoning to that of the Commission in Transport Workers' Union of Australia v SCT Logistics 6, the conclusion in this case is nonetheless the same as that "the two loadings [being casual loadings and shift loadings] are separate and distinct and do not interact".7

[31] Finally, UGL submits that considered in that light, the term "extra" means no more than 30% in addition to the ordinary rate of pay exclusive of casual loading. It follows, so UGL contends, that the answer to the question is "no" and the application should be dismissed accordingly.

AMWU submissions in reply

[32] In reply, the AMWU notes UGL’s argument that two other allowances, namely the miscellaneous allowance (clause 19) and the site allowance (clause 20), have been designated as “all purpose” while the casual loading has not, but the AMWU submits that there is no consistency in the drafting of the two clauses as to what “all purpose” means.

[33] Further, the AMWU submits that while both clauses contain the words “all purpose”, only the miscellaneous allowance actually defines how the allowance will be applied as an all-purpose allowance; 8 the site allowance, on the other hand, only states the allowance as $2.50 per hour (all purpose); and “all purpose” is not defined for the site allowance, nor is there an overarching definition of “all purpose” contained in the Agreement. The AMWU therefore submits that the Commission should act cautiously in relying on these clauses to infer an intention as to how the casual loading in ordinary hours should be applied.

[34] If UGL’s argument is preferred by the Commission, the AMWU submits that, in the alternative, the ordinary hourly rate of a casual employee is the rate that includes a casual loading and that is the “what” on which penalty payments other than overtime should be based.

[35] It is noted by the AMWU that decisions such as SCT Logistics highlight that there are reasons for different loadings and that the reasons for casual loadings and shift penalties are “separate and distinct and do not interact”. Nonetheless, they say that the history of the Award suggests that there may be exceptions to any general rule based on the prevailing conditions of the industry. The AMWU submits that the Commission should not follow the interpretation in SCT Logistics, given the way that the clause in the Award has been drafted.

[36] According to the AMWU, whether it was by deliberate act or by default, it was agreed by the parties to the Agreement that shift penalties would be determined as described in the Award. It is the AMWU’s submission that the Award, and at least one of its predecessor pre-reform Awards, has a history of incorporating casual loading into the calculation of shift loadings.

[37] The AMWU further argues that when the Award was initially made in 2008, the terms largely reflected those agreed by the Ai Group (representing the employers in the industry) and the Metal Trades Federation of Unions. 9 They say that the agreed words proposed by the Ai Group and Unions was the relevant clause in the Metal, Engineering and Associated Industries Award 1998 (1998 Award) and stated “shall, during such engagement, period or cycle, be paid 30 per cent more than his or her ordinary rate for all time worked during ordinary working hours on such night shift”.10

[38] The AMWU notes that the words “more than his or her ordinary rate” was not adopted, just the words “extra”. 11 The AMWU submits that the Award Modernisation decision, however, does not contain anything that suggests that the Full Bench deliberately adopted a different calculation method for such penalties, even though it did not use the same exact terms.12

[39] The AMWU refers to the current Review of Modern Awards and argues that it suggests that the “30% of what” is the ordinary hourly rate. They note that the initial statement made by the Commission when the review commenced was that the initial drafting process “will not propose changes to any entitlement” 13 and that in the initial exposure draft provided by the Commission, the calculation of the shift penalty is based on the “ordinary hourly rate”.14

[40] Finally, the AMWU submits that the ordinary hourly rate for a casual employee in ordinary time under the Agreement is the hourly rate for the classification plus the 25 % loading. As such the AMWU submits that the appropriate rate for which the shift loading is calculated is the compounded rate.

UGL submissions in response

[41] In response, UGL contends that the AMWU’s reply submissions proceed on the basis that casual loading is all purpose because it is implicit in the expression of a casual’s entitlements in this industry. UGL argues that, contrary to the position of the AMWU, a casual loading is only all purpose when it is expressed to be so; those words in the Award would be otiose otherwise. As such, UGL submits that to essentially say that “employees are only getting 24% extra unless the casual loading is included in the calculation” misconceives that for the reasons set out in their submissions in chief. Finally, UGL contends there is no basis within the Agreement to include the casual loading in that calculation in the first place.

Consideration

[42] Clause 22.1 of the Agreement contemplates the performance of night shift work for employees to whom the Agreement applies. That is not surprising in circumstances where the upgrades and maintenance business acquired by UGL from RCR Energy in February 2019 includes work in relation to outages at power stations such as the Bayswater Power Station.

[43] The Agreement, however, does not contain any terms governing the performance of, or payment for, shiftwork, save for clause 6.1 of the Agreement, which incorporates the Award and provides that the Agreement prevails over an incorporated Award term to the extent of any inconsistency between an incorporated Award term and an express term of the Agreement. In those circumstances, the resolution of the Dispute requires careful analysis of the incorporated Award terms governing performance of, and payment for, shiftwork for casual employees, together with the extent to which those terms may be inconsistent with any express terms of the Agreement.

[44] The starting point involves a comparison between clauses 11.4, 11.5 and 11.6 of the Agreement and clause 14.1 of the Award. Those clauses are repeated below for ease of reference:

Agreement – Casual Employment

11.4 A casual employee is one engaged and paid as such.

11.5 A casual employee is paid at the ordinary hourly rate of pay for the relevant classification plus a casual loading of 25%.

11.6 The casual loading will apply only on ordinary hours worked, with overtime paid in accordance with clause 24.2.

Award – Casual Employment

14.1 A casual employee is one engaged and paid as such. A casual employee for working ordinary time must be paid an hourly rate calculated on the basis of one thirty-eighth of the minimum weekly wage prescribed in clause 24.1(a) for the work being performed plus a casual loading of 25%. The loading constitutes part of the casual employee’s all purpose rate.

[45] A comparison between these provisions reveals the following:

•  clause 11.4 of the Agreement is consistent with the first sentence of clause 14.1 of the Award;

•  clause 11.5 of the Agreement is consistent with the second sentence of clause 14.1 of the Award to the extent that both provisions requirement the payment of a casual loading of 25% on ordinary hours worked;

•  clause 11.5 of the Agreement is inconsistent with the second sentence of clause 14.1 of the Award to the extent that the “ordinary hourly rate of pay for the relevant classification in the Agreement” is different from “an hourly rate calculated on the basis of one thirty-eighth of the minimum weekly wage prescribed in clause 24.1(a)” of the Award. Accordingly, the Agreement prevails to the extent of that inconsistency, with the result that the ordinary hourly rate of pay for employees covered by the Agreement is governed by the Agreement, not the Award; and

•  clause 11.6 of the Agreement is inconsistent with the final sentence of clause 14.1 of the Award because the Agreement states that the casual loading will apply only on ordinary hours worked, with overtime paid in accordance with clause 24.2, whereas the Award states that the casual loading constitutes part of the casual employee’s all purpose rate. Both clauses require the casual loading to be applied on ordinary hours worked. To that extent, they are not inconsistent. However, the clauses are inconsistent in relation to overtime. Clauses 14.1 and 24.2 of the Agreement require a casual employee who works overtime (where the relevant overtime rate is double time) to be paid 225% of the equivalent full-time hourly rate prescribed for the relevant classification, whereas the Award requires a casual employee who works overtime (where the relevant overtime rate is double time) to be paid 250% of the equivalent full-time hourly rate prescribed for the relevant classification. The difference arises as a consequence of the casual loading under the Award constituting part of the casual employee’s all purpose rate.

[46] The fact that the incorporated Award term which requires the casual loading to constitute part of the casual employee’s all purpose rate is inconsistent with particular provisions in the Agreement, such as clauses 11.6 and 24.2 pertaining to overtime, does not mean that the incorporated Award term is of no effect. Clause 6.1 of the Agreement makes plain that the express terms of the Agreement which are inconsistent with the incorporated Award term only prevail to the extent of the inconsistency.

[47] Clauses 36.3, 36.4 and 37 of the Award govern the ordinary hours of work and payment for employees working afternoon shift or night shift as defined in clause 37.1. Insofar as they do so, those provisions are not inconsistent with any express terms of the Agreement. It follows, as both parties submitted, that casual employees undertaking such shiftwork are working ordinary hours under the Agreement and are entitled, when they remain on night shift for a longer period than four consecutive weeks (as is the case in this Dispute), to be “paid 30% extra for all time worked during ordinary working hours on such night shift”. 15

[48] Clause 37.3 of the Award does not expressly state what the “30% extra” must be paid on. In my view, the provision is therefore ambiguous. It follows that it would be appropriate to admit any evidence adduced of the surrounding circumstances as an aid to the interpretation of the term. 16 However, no such evidence has been adduced in this matter. As a result, the resolution of the disputed construction in this Dispute turns on the language of the Agreement (including the incorporated Award terms) having regard to its context and purpose.17

[49] Clause 37.3(c) of the Award requires the payment of “30% extra for all time worked during ordinary working hours on such night shift”. The ordinary meaning of “extra” is “beyond or more than what is usual, expected, or necessary; additional”. 18 Accordingly, the question is how does one calculate what is 30% more than what is usual, expected, or necessary. That begs the question of what is “usual, expected or necessary”. In the context of a provision such as clause 37.3(c) of the Award which governs the payment of a “30% extra” night shift loading, the purpose of which is to compensate an employee for the inconvenience of working unsociable hours, what is “usual, expected or necessary” is the payment the employee would receive for working ordinary hours on day work when no such loading is payable. When a casual employee to whom the Agreement applies performs work during ordinary hours on day work, they are entitled to receive their “ordinary hourly rate of pay for the relevant classification plus a casual loading of 25%”.19 It follows, in my opinion, that for a casual employee to be “paid 30% extra for all time worked during ordinary working hours on such night shift” pursuant to clause 37.3(c) of the Award, they must receive 30% more than they would usually receive for working the same ordinary hours on day work. That is, the 30% shift loading must be applied to the base rate plus a casual loading of 25%, not just to the base rate. Otherwise, the employee would not be paid “30% extra for all time worked … on night shift”.

[50] The final sentence of paragraph 14.1 of the Award provides that the 25% casual loading constitutes part of the casual employee’s all purpose rate. This provision gives further support for the construction set out in the previous paragraph, for the following reasons:

(a) the final sentence of paragraph 14.1 of the Award is not inconsistent with clauses 11.5 and 11.6 of the Agreement or those clauses read together with clause 37.3(c) of the Award;

(b) because there is no relevant inconsistency, the final sentence of clause 14.1 of the Award may be considered when determining the payment to be made to a casual employee who works ordinary hours on night shift in accordance with clause 37.3(c) of the Award; and

(c) a casual employee’s “all purpose rate” of pay must, as the expression suggests, be applied for “all purposes” unless such a requirement is inconsistent with a specific provision of the Agreement. In circumstances where there is some ambiguity about whether clause 37.3(c) of the Award requires the 30% night shift loading to be paid on the employee’s base rate of pay or their base rate of pay plus the casual loading, the requirement for a casual employee’s “all purpose rate” to include a casual loading of 25% suggests that the 30% night shift loading is required to be paid on the employee’s base rate of pay plus the casual loading.

[51] For the reasons set out elsewhere in this decision, I would have reached the same conclusion as to the proper construction of the relevant clauses of the Agreement even if the final sentence of clause 14.1 of the Award had not been incorporated into the Agreement.

[52] Clause 20.2 of the Agreement provides further contextual support for the construction advanced above. It demonstrates that where the makers of the Agreement objectively intended for the 25% casual loading not to apply to a particular benefit, such as the site allowance payable pursuant to clause 20.1, they stated so in express terms. The absence of any provision in the Agreement to the effect that the casual loading does not apply to the night shift loading of 30% therefore assists the construction for which the AMWU contends.

[53] In my view, clause 19 of the Agreement does not provide much assistance in the task of construing the relevant provisions of the Agreement. It confers an entitlement on particular employees to an all purpose miscellaneous allowance, but does not say anything about casual loadings. Clause 19 does demonstrate that the makers of the Agreement objectively considered whether particular allowances such as the miscellaneous allowance would be an all purpose allowance. But it was not necessary for the makers of the Agreement to include a clause in the Agreement dealing with the question of whether the casual loading was an all purpose allowance, because clause 14.1 of the Award read together with clause 6.1 of the Agreement already provides that the casual loading constitutes part of a casual employee’s all purpose rate except to the extent that this requirement is inconsistent with one or more express terms of the Agreement (such as clauses 11.6 and 24.2 of the Agreement).

[54] I accept that casual loadings and shift loadings are separate and distinct, but whether and how they interact depends on the terms of the relevant industrial instrument. In SCT Logistics, the enterprise agreement in question required the payment of an afternoon or night shift loading “on the Ordinary Hourly Rate”, which was clearly indicated in the enterprise agreement to be a rate of pay that did not include the casual loading. It was therefore held by Commissioner Williams that the shift loading was not to be applied to the casual loading.

[55] I also accept that it is not usual for an industrial instrument to provide for the payment of a penalty on a penalty. 20 This general approach may be of assistance in some cases of ambiguity and I have had regard to it in determining the present Dispute.21 The question of whether the usual position is adopted in a particular case will always depend on the language used in the instrument.22 The task is always one of interpreting the agreement produced by parties.23 For example, in Domain Aged Care, the majority of the Full Bench decided that the Nurses Award 2010 requires casual employees who work on a weekend and public holiday to receive the applicable weekend and public holiday penalty calculated on the loaded casual rate of pay.24

Conclusion

[56] For the reasons given, I am of the opinion that, on the proper construction of the Agreement, the 30% night shift loading must be applied to the base rate of pay plus the casual loading, as contended for by the AMWU, such that the applicable hourly rate of pay for Night Shift work performed during ordinary hours by Night Shift Casuals (at the Tradesperson classification) is $60.14 (($37.01 (base rate) + $9.25 (25% casual loading)) x 130% night shift loading).

[57] I therefore determine the Dispute by answering the question posed by each party for arbitration as ‘yes’.

DEPUTY PRESIDENT

Printed by authority of the Commonwealth Government Printer

<PR716859>

 1   Defined in clause 2.1(e) of the Agreement as the Manufacturing and Associated Industries and Occupations Award 2010 (Award), as varied from time to time.

 2   [2017] FWCFB 3005

 3   [2019] FWCFB 6047

 4   Ibid at [86]

 5   The 30% shift allowance on the affected employee’s base rate of pay is $11.10. Adding the base rate of pay and the casual loading together ($46.26), the $11.10 represents 24% of the total amount.

 6   [2013] FWC 1186 (SCT Logistics)

 7   Ibid at [44]

 8   Clause 19.3 of the Agreement

 9   Award Modernisation decision [2008] AIRCFB 1000 at [177]

 10   Clause 6.2.2(c) of the 1998 Award, reproduced in the joint exposure draft at clause 5.3.2

 11   Clause 37.3(c) of the Award, both as made and currently

 12   [2008] AIRCFB 1000 at [177]-[192]

 13   Fair Work Commission 4 Yearly Review of Modern Awards – Guide to Award Stage 16 June 2014

 14   Exposure Draft amended – Manufacturing and Associated Industries and Occupations Award 2014 December 2014

 15   Clause 37.3(c) of the Award

 16   Berri, guideline 10

 17   Berri, guideline 1

 18   Macquarie Dictionary, Revised Third Edition

 19   Clause 11.5 of the Agreement

 20   SCT Logistics at [16]

 21   ANMF v Domain Aged Care (QLD) Pty Ltd[2019] FWCFB 1716 at [21] (Domain Aged Care)

 22   SCT Logistics at [17]

 23   Berri, guideline 2

 24   Domain Aged Care at [16]-[23]