“Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers' Union, Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing &...

[2021] FWC 6160

[2021] FWC 6160

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, Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing & Allied Services Union of Australia and Australian Rail, Tram and Bus Industry Union
v
KDR Victoria Pty Ltd T/A Yarra Trams
(C2020/6693)(C2020/7286)

DEPUTY PRESIDENT GOSTENCNIK MELBOURNE, 21 OCTOBER 2021

Alleged dispute about any matters arising under the enterprise agreement.

[1] KDR Victoria Pty Ltd operates Melbourne’s tram network (Network) and trades as Yarra Trams (Yarra Trams). It is covered, relevantly by two enterprise agreements - the Yarra Trams Enterprise Agreement 2019 – Infrastructure (Infrastructure Agreement) and the Yarra Trams Enterprise Agreement 2019 – Rolling Stock, Administration, Technical & Professional (Rolling Stock Agreement) (together, the Agreements). Each of the “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU), the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (CEPU) and the Australian Rail, Tram and Bus Industry Union (RTBU) (collectively, the Unions) is covered by both Agreements.

[2] The Rolling Stock Agreement commenced operation on 16 August 2019 while the Infrastructure Agreement commenced operation on 8 May 2020. Both Agreements make provision for the implementation of a 36-hour working week with effect from 1 July 2020. Before that time ordinary hours per week under the Agreements were 38 hours worked comprising eight hours per day with either eight hours accrued each four weeks for the rostered day off or 24 minutes of each eight-hour day of work accruing towards a rostered day off, described in the Agreements as an RDO or PLD (hereafter referred to as a PLD). By their joint application lodged on 1 September 2020 the AMWU and the CEPU applied to the Commission under s.739 of the Fair Work Act 2009 (Cth) (Act) for it to deal with a dispute in accordance with the dispute settlement term of the Agreements. A similar application was lodged by the RTBU on 25 September 2020. All but one of the matters in dispute the subject of the applications has been resolved. The remaining issue in dispute concerns the treatment of PLDs accrued by employees prior to 1 July 2020 when taken and paid after 1 July 2020 in a 36-hour working week in which PLDs no longer accrue and are not part of the working hours framework for which the Agreements now provide.

[3] To resolve the remaining issue in dispute the Unions and Yarra Trams have formulated an agreed question for determination by arbitration as follows:

In the absence of a term in the Comprehensive Agreement between the parties, entered into pursuant to Part 1, cl 35.1(c) of the Yarra Trams Enterprise Agreement 2019 – Infrastructure and Part 1, cl 33.1(c) of the Yarra Trams Enterprise Agreement 2019 – Rolling Stock, as to the treatment of and adjustments to PLDs which accrued prior to 1 July 2020, should hours accrued by an employee towards a PLD prior to 1 July 2020 be adjusted by the formula of (Number of hours) x 36/38, or is no such adjustment necessary?

[4] The Unions contend that no such adjustment is necessary while Yarra Trams contends that the full value of the PLDs accrued by employees prior to the implementation of the 36-hour week must be adjusted, with accrued PLDs recalculated as a 7.2-hour day and paid at the 36-hour divisor rate.

[5] The resolution of the issue in dispute by reference to the question posed turns on the proper construction of the Agreements in the context of largely uncontested facts. The construction of provisions of an enterprise agreement begins with a consideration of the ordinary meaning of the words, read in context, taking account of the evident purpose of the provisions or expressions being construed. Context may be found in the provisions of the agreement taken as a whole, or in their arrangement and place in the agreement. The statutory framework under which the agreement is made or in which it operates may also provide context, as might an antecedent instrument or instruments from which a particular provision or provisions might have been derived. The industrial context in which an agreement is made and operates is also relevant. Thus, the language of an agreement is to be understood in the light of its industrial context and purpose, not in a vacuum or divorced from industrial realities. But context is not itself an end and a consideration of the language contained in the text of the agreement being considered remains the starting point and the end point to the task of construction. A purposive approach to interpretation is appropriate, not a narrow or pedantic approach. 1

[6] Clause 30 of the Infrastructure Agreement and clause 28 of the Rolling Stock Agreement deal with hours of work. They each provide for a 38-hour working week arrangement as follows:

Hours of Work

Hours of Work (Day Worker)

(a) The ordinary hours of work for a day worker shall be one hundred and fifty- two per four week period to be worked as 19 days each of eight hours.

(b) Subject to the provisions of this agreement for alternative rostered day off arrangements, there shall be a 19 day, four week roster (’the roster’) drawn up in each area of employment. Only in exceptional circumstances, or where other arrangements have been agreed between Yarra Trams and the employees concerned, shall an employee not take a rostered day off during the period it accrues. If a rostered day off is deferred, it shall be taken as soon as practicable in the next period, or as otherwise agreed between Yarra Trams and the employee concerned.

In no case should RDO’s be accumulated beyond a maximum of five (5) days

(c) An employee's rostered day off may be changed during the currency of a roster period by agreement between Yarra Trams and the employee. In the absence of such an agreement and other than in an emergency situation 48 hours notice of such alteration shall be given to the employee.

Hours of Work (Shift Worker)

Subject to clause 35 [clause 33], the ordinary hours of work for a shift worker shall be thirty eight per week averaged over the one complete cycle of the roster and divided into not more than five shifts per week. Unless specified otherwise in this Agreement, a shift shall be of eight hours duration.

[7] Each provision also sets out how payment for time worked is calculated as follows:

Payment for time worked

Payment for time worked is calculated in one of two ways, as detailed below:

(a) 40 hour divisor

(i) For the majority of Yarra Trams employees for each eight (8) hour day or shift worked, payment is made for the eight (8) hours worked, at the ordinary time hourly rate (single time rate), which is calculated from the weekly rate divided by 40. Eight (8) hours is accrued each four weeks for the rostered day off (PLD).

(ii) A second hourly rate is used for overtime purposes. This rate is calculated from the weekly rate divided by 38.

(b) 38 hour divisor

For each 8 hour day or shift worked, payment is made for 7 hours, 36 minutes with 24 minutes being accrued as an entitlement to payment for the rostered day off (PLD). In this case the hourly rate is the weekly rate divided by 38. 2

[8] For employees working alternative shift arrangements set out in attachment one to the Agreements, PLDs (described therein as ADOs) “accrue on the basis of 38 hours per completed year of service” and provides an example that “an employee rostered to work a nine (9) hour shift will be paid the roster cycle average weekly pay and have nine (9) hours deducted from the employees ADO accrual”. 3

[9] The phrase “rostered day off” is defined in clause 6 of each Agreement as “a day’s leave derived from the implementation of a 38 hour week and includes days termed as “Rostered Days Off’ and “Programmed Leisure Days”.

[10] Yarra Trams contends that a PLD is an accrued day off, not some form of accrued payment or hours which are banked 4 however this submission runs counter to the provisions of the Agreements set out above. Those provisions disclose accrual on the basis of eight hours in each four-week period or 24 minutes accrued for each eight-hour day or shift worked. Whilst it may be correct that a PDL is taken as an accrued day off, its accrual is plainly comprised of hours and minutes accrued during the relevant four-week period. Consequently, Yarra Trams’ contention cannot be accepted.

[11] Clause 35 of the Infrastructure Agreement and clause 33 of the Rolling Stock Agreement deal with the implementation of the 36-hour week. The provisions are similar but not completely identical. Each relevantly provides that:

The parties agree to the implementation of a 36 ordinary hour week subject to the following conditions:

(a) Subject to completion of the steps in clauses 35.1(b) [33.1(b)] and 35.1(c) [33.1(c)], Classifications in the Agreement, other than those listed below, will move to a 36 ordinary hour week from the first full pay period on or after 1 July 2020.

[12] Each provision excludes certain identified classifications from the 36-hour week arrangements. Clauses 35.1(b) and 33.1(b) of the Agreement require Yarra Trams to “consult with affected employees and their representatives about the implementation of a 36-hour week”.

Clauses 35.1(c) and 33.1(c) of the Agreements provide:

(c) The parties agree that a comprehensive agreement reflecting the terms and conditions associated with the 36-hour week will be developed prior to implementation. The parties agree that the following terms and conditions will be contained in that agreement:

(i) All work performed on Saturday (between midnight Friday and midnight Saturday) will be at paid double time (100% loading on the ordinary hourly rate).

(ii) A night shift loading of 30% is to be paid on any shift finishing after midnight and at or before 8am.

(iii) All overtime will be paid at double time.

(iv) Wages will be averaged over a complete roster cycle and paid fortnightly.

(v) RDOs may be included in a particular working group 36-hour roster at Yarra Trams’ absolute discretion.

(vi) The treatment of and adjustments to annual leave, personal leave and PLDs which accrued prior to 1 July 2020.

(vii) Employees working a 36-hour week will no longer be entitled to ADOs or PLDs although PLDs which have accrued prior to 1 July 2020 will continue to be recognised and employees may apply for PLDs in accordance with the process which applied prior to implementation. Accrued PLDs which have not been used will be paid out on cessation of employment.

(viii) All leave, excluding annual leave, will be paid at the Employees base wage.

(ix) Annual Leave loading will be 17.5% or the average shift loading, whichever is higher.

[13] Although each Agreement requires the development of a comprehensive agreement dealing inter alia with the “treatment of and adjustments to annual leave, personal leave and PLDs which accrued prior to 1 July 2020”, prior to the implementation of the 36-hour week arrangement, it is common ground the 36-hour week arrangement was implemented on 1 July 2020, but the comprehensive agreement was not finalised until many months after that date.

The comprehensive agreement purports to be made by the “parties” in accordance with the respective clauses 33.1(c) and 35.1(c) of the Rolling Stock Agreement and the Infrastructure Agreement. It purports to have been signed Yarra Trams and the Unions. There is no indication that employees whom the comprehensive agreement purports to apply, made the agreement or otherwise approved its terms.

[14] The word “parties” is not defined in the Agreements however clause 7 of each Agreement sets out the parties bound by the respective Agreements are Yarra Trams, the Unions, Professionals Australia, and Yarra Trams employees for whom provision is made in the classification structure of the respective Agreement. Clauses 33.1(c) and 35.1(c) of the Rolling Stock Agreement and the Infrastructure Agreement record that the “parties agree” that certain identified terms and conditions will be contained in comprehensive agreement.

[15] Given the exclusion of certain classifications from the 36-hour week arrangements in clauses 33.1(a) and 35.1(a) of the Rolling Stock Agreement and the Infrastructure Agreement, it may be accepted that “parties” in clauses 33.1(c) and 35.1(c) of the Rolling Stock Agreement and the Infrastructure Agreement does not include Professionals Australia or employees who are in the excluded classifications. But otherwise, there is no reason to give the word “parties” in clauses 33.1(c) and 35.1(c) a narrow meaning as being confined only to Yarra Trams and the Unions. It seems to me that affected employees are also “parties” within the meaning of those provisions. As there is no indication that employees whom the comprehensive agreement purports to apply, made the agreement or approved its terms, the validity of the comprehensive agreement is to be doubted but since no party raised this issue, I will proceed on the assumption that the comprehensive agreement was validly made.

[16] Clause 12 of the comprehensive agreement deals with the treatment of “accrued leave entitlements” as follows:

12. Treatment of accrued leave entitlements

12.1 Employees on the 36-hour week rosters do not accrue PLDs and ADOs on and from the commencement of the implementation of the 36-hour week rosters.

12.2 PLDs and ADOs accrued prior to the commencement of the implementation of the 36-hour roster week will be recognised, and employees may apply to take the accrued PLDs and ADOs. Any accrued but unused PLDs and ADOs will be paid out to employees on cessation of employment.

12.3 Yarra Trams will notify employees in writing of the adjustments to the accrued annual leave, long service leave, personal leave and ADOs/PLDs that accrued prior to the implementation of the 36-hour week rosters.

[17] Clause 15 of the comprehensive agreement deals with the process by which an employee with an accrued entitlement to PLDs may apply to take some of that time.

[18] Despite clause 35.1(c)(vi) and 33.1(c)(vi) of the Agreements requiring the comprehensive agreement to deal with the “treatment of and adjustments to . . . PLDs which accrued prior to 1 July 2020” no such provision exists in the comprehensive agreement. This is common ground and the absence of such a term is reflected in the agreed question posed for arbitration. The closest one comes to such subject matter is clause 12.3 reproduced above, which deals with a notification requirement about an adjustment to accrued PLDs but no detail about how any adjustment is made.

[19] Absent an express term of the comprehensive agreement dealing with any adjustment to accrued PLDs, one is left with the text of the Agreement. This is because the parties by their Agreements have determined that a comprehensive agreement reflecting the terms and conditions associated with the 36-hour week will be developed and will include terms dealing with the treatment of and adjustments to annual leave, personal leave and PLDs which accrued prior to 1 July 2020. It is only through this mechanism that adjustments to accrued PLDs may be made.

[20] In this regard, Yarra Trams contends clause 33.1(c)(vi) of the Rolling Stock Agreement and clause 35.1(c)(vi) of the Infrastructure Agreement contemplate an adjustment to PLDs to take account of the introduction of the 36-hour week. It says that employees should not get the benefit of both higher accruals and higher rates of pays and contends that clause 33.1(c)(vi) of the Rolling Stock Agreement and clause 35.1(c)(vi) of the Infrastructure Agreement reflected the parties’ agreement that PLDs, as a form of leave in the same category as annual and personal leave, required adjustment to take into account that a “day” in a 36-hour week is now 7.2 hours not 7.6 hours. 5

[21] Although I accept that the provisions contemplate an adjustment to accrued PLDs, they do not authorise an adjustment. That authority must be found in the terms of the comprehensive agreement. Properly construed clause 33.1(c)(vi) of the Rolling Stock Agreement and clause 35.1(c)(vi) of the Infrastructure Agreement require the parties to deal with certain matters in a comprehensive agreement. Unless and until a comprehensive agreement deals with the matters therein indicated, there is no mechanism to make any adjustments to accrued PLDs.

[22] As earlier noted, under the Agreements, PLDs accrued on the basis of eight hours in each four-week period or 24 minutes for each eight-hour day or shift worked. Under the Agreements each accrued PLD consists of hours reflecting the 38-hour working week arrangement that pertained under the Agreement until 1 July 2020. Absent a term in a comprehensive agreement permitting an adjustment to PLDs accrued prior to 1 July 2020, there is no mechanism in the Agreements to authorise an adjustment. Whatever else might be said about the merits of an adjustment to prevent a double benefit, the parties elected a particular mechanism to facilitate any adjustments. To date they have not delivered. But in any event, the notion that the absence of an adjustment results in a double benefit is not altogether clear. PLDs that employees have accrued, have been so accrued because employees worked 8 hours per day or 40 hours per week, but were paid for 7.6 hours per day or 38 hours per week and accrued 24 minutes per day or 2 hours per week towards a PLD. If a 40-hour divisor was used as permitted by clause 30 of the Infrastructure Agreement and clause 28 of the Rolling Stock Agreement, an employee would have been paid a lower hourly rate for ordinary hours and 8 hours in each four week cycle would accrue to a PLD. That which has accrued had already been earned by unpaid work for a short period each day or through the payment of a lower hourly rate where 40 is the divisor. The real complaint is that the hourly rate of pay has increased through the introduction of shorter hours because under a 36-hour working arrangement, an employee now works 36 hours per week, is paid for 36 hours per week, PLDs no longer accrue, and the higher hourly rate of pay is a reflection of the new 36-hour divisor. The higher rate will provide a higher benefit for each hour of PLD taken by an employee, but that is not to suggest that it is a double benefit. Accrued entitlements will increase in dollar value with increases to rates of pay or movements to a higher classification. The higher hourly rates of pay that have resulted from the introduction of shorter hours is another example.

[23] In the circumstances I answer the question posed as follows:

In the absence of a term in the Comprehensive Agreement between the parties, entered into pursuant to Part 1, cl 35.1(c) of the Yarra Trams Enterprise Agreement 2019 – Infrastructure and Part 1, cl 33.1(c) of the Yarra Trams Enterprise Agreement 2019 – Rolling Stock, as to the treatment of and adjustments to PLDs which accrued prior to 1 July 2020, there is no authority under the Agreements to adjust hours accrued by an employee towards a PLD prior to 1 July 2020 by the formula of (Number of hours) x 36/38, or otherwise.

[24] That said, the parties should nonetheless fulfil the bargain struck and ensure that the comprehensive agreement deals with all matters in clauses 35.1(c) and 33.1(c) of the Agreements.

[25] The dispute is resolved accordingly and no order is necessary.

DEPUTY PRESIDENT

Printed by authority of the Commonwealth Government Printer

<PR735059>

 1   WorkPac Pty Ltd v Skene [2018] FCAFC 131 at [197] and the authorities referred to therein; see also King v Melbourne Vicentre Swimming Club Inc [2020] FCA 1173 at [122]-[130] and the authorities referred to therein (The analysis of the principles of construction set out therein were not disturbed on appeal: see King v Melbourne Vicentre Swimming Club Inc [2021 FCAFC 123, 308 IR 171 at [40]-[43])

 2   Yarra Trams Enterprise Agreement 2019 – Infrastructure, cl 30.3; Yarra Trams Enterprise Agreement 2019 – Rolling Stock, cl 28.3

 3   Yarra Trams Enterprise Agreement 2019 – Infrastructure, Attachment One cl 3.9; Yarra Trams Enterprise Agreement 2019 – Rolling Stock, Attachment One cl 3.9

 4   Respondent’s submissions date 20 September 2021 at [11]

 5   Respondent’s submissions date 20 September 2021 at [7]-[8]