Bacon Factories' Union of Employees, Queensland, The v Swickers Kingaroy Bacon Factory Pty Ltd
[2017] FWC 7049
•22 DECEMBER 2017
| [2017] FWC 7049 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.739 - Application to deal with a dispute
Bacon Factories' Union of Employees, Queensland, The
v
Swickers Kingaroy Bacon Factory Pty Ltd
(C2017/235)
Meat Industry | |
DEPUTY PRESIDENT ASBURY | BRISBANE, 22 DECEMBER 2017 |
Alleged dispute about any matters arising under the enterprise agreement and the NES.
1. BACKGROUND
[1] On 13 January 2017, the Queensland Bacon Factories’ Union of Employees (BFUE) applied to the Fair Work Commission (the Commission) to deal with a dispute pursuant to s. 739 of the Fair Work Act 2009 (the Act) under the Dispute Resolution Procedure in clause 8 of the Swickers Kingaroy Bacon and B.F.U.E Collective Workplace Agreement 2012 (the Agreement). The Respondent in this matter is Swickers Kingaroy Bacon Factory Pty Ltd (Swickers/the Company).
[2] The dispute concerns the proper construction of clauses of the Agreement dealing with casual loading, work outside the spread of ordinary hours, night shift loading and work on Saturdays and the interaction of these provisions. The spread of ordinary hours under the Agreement is Monday to Saturday from 5.00 am to 9.00 pm. The dispute arose following changes to rosters made as the result of a fire in the boning room. The new rosters require employees to work shifts which finish after 9.00 pm and in some cases, after midnight on Friday. The dispute centres on payment for the hours worked by employees after 9.00 pm and/or after midnight on Friday.
[3] The agreed questions for arbitration are as follows:
1. On the proper application of clauses 10.4.6, 13.2.1 and 13.2.4, are casual employees who are not shift workers and who are working outside the spread of ordinary hours entitled to the loading in clause 13.2.4 in addition to their casual loading?;
2. What are the entitlements to casual loading and night shift loading under clause 13.4.3 for casual employees working ordinary hours on shifts that finish after midnight on Fridays?; and
3. What are the entitlements to shift loading and Saturday loading under clauses 13.4.3 and 13.2.3 for permanent employees working ordinary hours on shifts that finish after midnight on Fridays?
[4] There are a variety of rosters in operation at the workplace. For the purposes of answering the question for arbitration, the parties agreed that Commission should consider two rosters - a B shift in the boning room where shifts commence at 3.00 pm and finish at 11.45 pm and a shift which commences at or around 11.00 pm and concludes at 4.00 am. Although the dispute centres on cleaners, it is also necessary to consider the questions for arbitration for both cleaners and other classifications of employees covered by the Agreement.
[5] On 20 June 2017, Directions were issued requiring parties to file and serve material upon which they intended to rely and a hearing was conducted on 4 September 2017. At the Hearing, the following persons gave evidence in support of the BFU’s application:
● Darryl Burgess, General Secretary of the BFU; 1 and
● Thomas Schultz, General Secretary of the BFU between October 1981 and September 2013. 2
[6] Evidence for Swickers was given by Rebecca Humphrey, Human Resources Manager. 3
2. THE DISPUTE SETTLEMENT PROCEDURE IN THE AGREEMENT
[7] The Dispute Resolution Procedure in the Agreement is in the following terms:
“8. DISPUTE RESOLUTION PROCEDURE
8.1 Commitment to dispute resolution
The Employer and Employees agree to act in good faith with the intent of the Agreement, by cooperating to ensure that the dispute resolution procedures are carried out as quickly as is reasonably practicable.
8.2 Step one – Employee, Supervisor and Management
In the event of a dispute about a matter under this Agreement, or a dispute in relation to the NES, in the first instance the parties must attempt to resolve the matter at the workplace by discussions between the employee or employees concerned and the relevant supervisor. If such discussions do not resolve the dispute, the parties will endeavour to resolve the dispute in a timely manner by discussions between the employee or employees concerned and more senior levels of management as appropriate.
8.3 Step Two – Fair Work Australia
If a dispute about a matter arising under this Agreement or a dispute in relation to the NES is unable to be resolved at the workplace, and all appropriate steps under clause 8.2 have been taken, a party to the dispute may refer the dispute to Fair Work Australia.
8.4 Agreement on process
Subject to clause 8.3, the parties may agree on the process to be utilised by Fair Work Australia including mediation, conciliation and arbitration.
8.5 Dispute Resolution
Where the matter in dispute remains unresolved following completion of any agreed process under clause 8.4, Fair Work Australia may exercise any method of dispute resolution permitted by the Act that it considers appropriate to ensure the settlement of the dispute.
8.6 Right to representation
An employer or employee may appoint another person, organisation or association to accompany and/or represent them for the purposes of this clause.
8.7 Work to continue
While the dispute resolution procedure is being conducted, work must continue in accordance with this Agreement and the Act. Subject to applicable occupational health and safety legislation, an Employee must not unreasonably fail to comply with a direction by the Employer to perform work, whether at the same or another workplace, which is safe and appropriate for the Employee to perform.
[8] The Commission’s powers to deal with disputes derive, in the case of an enterprise agreement, from the terms of the disputes settlement procedure contained in the enterprise agreement. As a Full Bench of the Commission concisely observed in CFMEU v North Goonyella Coal Mines Pty Ltd 4: the Commission may deal with a dispute only on application of a party to the dispute (s.739(6)); is prohibited from exercising any powers limited by the dispute settlement procedure (s.739(3)); may arbitrate only if the agreed dispute settlement procedure permits it to do so (s.739(4)); and must not make a decision that is inconsistent with the Act, the enterprise agreement and any other applicable fair work instrument (s.739(5)).
[9] It is arguable that the terms of clause 8 are identical to those considered by a Full Bench of the Commission in CC Pty Ltd T/A Cook Colliery v Construction, Forestry, Mining and Energy Union 5 where it was held that the dispute settlement procedure did not empower the Commission to arbitrate unless the parties agreed with respect to each individual dispute raised under the procedure. However, in the present case, no issue was taken with the Commission arbitrating the dispute, the questions for arbitration were agreed by the parties and I have dealt with it on the basis that both parties consented to that course.
3. PROVISIONS OF THE AGREEMENT RELEVANT TO THE DISPUTE
[10] The provisions of the Agreement set out in the question for arbitration are set out below. Clause 10.4 – Casual Employees – provides as follows:
10.4.1 A casual Employee shall mean an Employee who is employed on an hourly basis.
10.4.2 Subject to clause 10.4.3, a casual Employee shall be paid a base rate per hour of 1/38th of the weekly rate prescribed in clauses 16.1 or 16.2, whichever is relevant, for the class of work performed, plus a casual loading of 24%.
10.4.3 On the 1st July 2014, the casual loading in clause 10.4.2 will be increased to 25%.
10.4.4 Notwithstanding clause 10.4.2, where a casual employee works ordinary hours on a Saturday they shall receive the appropriate loadings set out in clause 13.2.3, and not the loading in clause 10.4.2.
10.4.5 A casual employee who works authorised overtime shall receive the applicable overtime penalty set out in clauses 10.4.13 and 10.4.14, and not the loading in clause 10.4.2.
10.4.6 A casual Employee who works on shift work in accordance with clause 13.4 shall, in addition to the casual loading set out in clause 10.4.2, be paid the appropriate shift penalty based on the ordinary hourly rate excluding casual loading.
10.4.7 A casual Employee, other than a casual employee engaged in classification 1, shall be entitled to the payment of performance bonus in accordance with clause 19 and Appendix B of this Agreement.
10.4.8 Subject to clause 10.4.12 a casual Employee, other than a cleaner, shall be engaged for a minimum period of 4 hours on any engagement. The minimum engagement for a cleaner shall be 2 hours.
10.4.9 The ordinary hours of a casual employee must not exceed 38 in any one week.
10.4.10 A casual Employee may be required to work up to 10 ordinary hours per engagement.
10.4.11 Subject to clause 10.4.8, a casual Employee may be engaged for more than one engagement on any day. Payment for each engagement shall be at the rate applying to the work undertaken on that engagement.
10.4.12 The employment of a casual Employee may be terminated at the conclusion of an engagement or by one hours’ notice by either party, provided that the minimum payment in clause 10.4.8 applies if the Employer terminates the employment.
10.4.13 A casual employee who is directed to work more than 10 ordinary hours on any one day shall be paid for authorised overtime at the rate of 150% for the first 3 hours and 200% thereafter.
10.4.14 All time worked by a casual in excess of 38 hours in any one week, excluding any time worked in excess of 10 hours in any one engagement, shall be paid for authorised overtime at the rate of 150% for the first 3 hours and 200% thereafter.
10.4.15 Subject to clause 16.3 authorised overtime shall be paid at the rate applicable to the work being undertaken at the time the overtime was actually worked.
…
10.6 Casual employee Rostering
10.6.1 Casual employment by definition is unpredictable. However, the parties recognise the benefit to casual workers of providing as much information as possible about prospective hours of work. This is particularly the case if it is likely that casual employees will be requested to work additional hours than they may have anticipated on any day.
10.6.2 The permanent employees work to a roster. The roster provides for the ordinary hours that will be worked each day by the permanent employees. Although there’s no guarantee that casuals will be engaged for the full duration of the permanent rostered hours, these hours can serve as a guide to the hours likely to be available to casual employees on any day. Casual employees would be expected to work the equivalent of such hours rostered for permanent employees, if such hours are available. However, if such hours are not available casual employees will be released and payment shall only be made for hours actually worked, with the exception of a situation where the minimum engagement applies.
10.6.3 Where a casual employee is requested to work hours in addition to the permanent rostered hours, they may accept or reject such an offer. If the casual employee accepts the offer of more hours such time will be paid in accordance with the Agreement. Where possible, casual employees will be provided with as much notice as possible of the availability of hours in excess of the hours identified for permanent employees on any day.
[11] Clause 13.2 – Spread of ordinary hours – is in the following terms:
13.2 Spread of ordinary hours
13.2.1 The ordinary hours of work prescribed herein shall be worked continuously, except for meal breaks and rest pauses, between 5.00 am and 9.00 pm.
13.2.2 Ordinary hours shall be worked, Monday to Saturday inclusive.
13.2.3 Ordinary hours worked on a Saturday shall be paid an additional loading of 50% of the ordinary hourly rate of pay.
13.2.4 Subject to clause 13.2.1, hours worked outside the ordinary spread of ordinary hours, shall be paid an additional loading of 30% of the ordinary hourly rate of pay.
13.2.5 The maximum ordinary hours to be worked on any one day shall be ten (10).”
[12] Clause 13.4 deals with shift work and provides:
13.4 Shift Work
13.4.1 Shift work is permitted under this Agreement for cleaners only.
13.4.2 The following definitions apply to shifts which may be worked under this Agreement.
Afternoon Shift means any shift commencing at or after 12.00pm and finishing at or before midnight;
Night Shift means any shift finishing subsequent to midnight and at or before 9.00am
13.4.3 The following shift penalties will be paid based on the ordinary hourly rate for the classification in which the employee is employed:
Shift Type | Shift Allowance (ordinary hourly rate plus loading) |
Cleaners – Afternoon Shift | 7.5% |
Cleaners – Night Shift | 25%” |
4. EVIDENCE AND SUBMISSIONS
4.1 BFUE
[13] Mr Burgess’ evidence was that a fire destroyed the boning room at Swickers’ Kingaroy factory in November 2016. As a result, the work previously performed in the Kingaroy boning room was performed at as small boning room in Wulkuraka. Prior to the fire, only one shift per day was worked in the boning room. That shift was a day shift that started around 5.30 am or 6.00 am and finished at 2.30 pm or 3.00 pm. Because the boning room at Wulkuraka was smaller and less mechanised, a second shift was created being an afternoon shift starting at 2.30 pm and finishing around midnight.
[14] The shift changes also affected the cleaning crew for the boning room. When one shift a day was worked, the cleaning crew started at around 3.00 pm and finished at around midnight. When the afternoon shift was created the cleaning crew started work at around midnight. Mr Burgess was cross-examined about the Form F17 Employer’s Declaration in Support of Application for Approval of Enterprise Agreement (the Form 17) and the Form F18 Declaration of Employee Organisation in Relation to an Application for Approval of an Enterprise Agreement (the Form F18) signed by Mr Schulz in relation to the approval of the Agreement. Mr Burgess said that he briefly looked at those documents before Mr Schulz signed the Form F18 and did not see any problems with them. Mr Burgess agreed that generally when an organisation of employees signs a Form F18 indicating agreement with a Form F17, the employer should be able to rely on that document.
[15] Mr Burgess accepted that at the time the Agreement was negotiated, there could have been some groups of employees who were working outside the spread of ordinary hours on a regular basis. Mr Burgess also accepted that if employees covered by the Meat Industry Award 2010 (the Award) were working outside the spread of ordinary hours provided for in the Award, they would be considered to be shift workers. Mr Burgess said that such employees were not considered to be shift workers under the Agreement, because it was clear that cleaners were the only employees under the Agreement who were shift workers. Mr Burgess did not accept the proposition that while those employees were not shift workers they were compensated with a rolled up rate for hours that would have been considered shift work under the Award. In response to a question from the Commission, Mr Burgess said that Swickers is a meat processing plant for the purposes of the hours of work provisions under the Award.
[16] Mr Schulz gave evidence about his involvement in the negotiation of the Agreement. Mr Schulz does not recall whether there was any discussion during the negotiations about the way in which casual employees would be paid on weekends. Mr Schulz said that during his 32 years as General Secretary of the BFUE, it was his understanding that penalties and allowances were typically paid in addition to one another and not cumulatively, unless it was expressly stated that this was not the case. In relation to the calculations attached to the Form F17 filed by Swickers, Mr Schulz said that he would not have given great consideration to the mathematics in the attachments or looked at them closely, before he signed the Form F18.
[17] According to Mr Shulz the attachments to the Form F17 were employer documents only and did not form part of the Agreement, and he would not have imagined that they could have any bearing on the interpretation of the Agreement. Mr Schulz believes that the mathematics are correct, but are potentially based on the wrong interpretation of the Agreement. Mr Schulz said that had he known about the examples in the Form F17 and the bearing they might have had in the interpretation of the Agreement, the BFUE would have taken steps to clarify Swickers’ misunderstanding about the interpretation of the Agreement.
[18] Under cross-examination, Mr Schulz agreed that he signed a Form F18 Declaration indicating that he agreed with the Form F17 Employer Declaration. Mr
Schulz agreed that the calculations set out in the Form F17 showed that casual employees working outside the spread of ordinary hours do not receive the casual loading in addition to other penalty payments. Mr Schulz also agreed that generally an employer should be able to rely on a Statutory Declaration from a Union indicating support of a Declaration made by the employer.
[19] Mr Schulz accepted that at the time the Agreement was negotiated, there would have been employees under the previous 2008 Agreement who were working hours outside of the 5.00 am to 9.00 pm spread and that there were no shift work arrangements in the 2008
Agreement. Mr Schulz also accepted that some of these employees would have met the definition for shift work in the Award if the Award had applied to them. In relation to the current Agreement subject of these proceedings, Mr Schulz agreed that it has a shift work clause but that this clause is limited to cleaners. Further, Mr Schulz agreed that some employees working particular patterns under the current Agreement would meet the shift work definition under the Award, but did not agree with the proposition that it only provided that shift penalties separate to the base rate would be paid to cleaners.
[20] Mr Schulz also agreed that employees working a roster termed “kill floor B” starting work at 2.00 pm and finishing before midnight would have been afternoon shift workers if they were working under the Award and that these employees were not shift workers under the Agreement. Further Ms Schulz agreed that only cleaners could be engaged as shift workers under the Agreement.
[21] The BFUE submits that prior to the fire in November 2016, Swickers rostered employees working in the boning room on a single day shift which commenced at approximately 5:30 am or 6:00 am and finished at approximately 2:30 pm or 3:00 pm. After the fire, those employees were required to work in a boning room at a different site and Swickers created a second shift which generally started at approximately 2:30 pm and finished at approximately midnight.
[22] The shifts referred to above are being completed by employees who are not cleaners. The Agreement, at clause 13.4.1 provides that “shift work is permitted under this Agreement for cleaners only”. Consequently, a question arises as to what the entitlements of non-cleaning employees working particular hours are.
[23] The BFU points to the definition of “ordinary rate of pay” in clause 6 of the Agreement and submits that various clauses contained in the Agreement – including clauses 13.2.4 and 13.4.3 – which state that loadings or penalties are payable in addition to the “ordinary rate of pay” are directed at making clear that the loadings are not cumulative, but are additional. The BFU submits that the “general rule” in industrial instruments is, that unless provided otherwise, where penalties apply (being overtime, shift penalties, weekend penalties, public holiday penalties etc.) the penalties and the casual loading are both to be calculated on the employee’s ordinary time rate (i.e. paid in addition to each other, and not cumulatively). 6
[24] The BFU point to a Newsletter published by the Fair Work Ombudsman, “Understanding casual penalty rates” which explains the three most common methods of calculating penalty rates, 7 and the “Default Method” which supports the construction advanced by the BFU. According to the BFU, the correct interpretation of the Agreement will have regard to the context in which it was made, including what has been described as the “industrial context and purpose” of the provision.8 While a provision of an enterprise agreement should be given its ordinary meaning, a “literal approach” should be avoided where that would produce a result which is in opposition to the apparent intention of those who framed the provision.9 The Commission should also take a purposive approach which “contributes to a sensible industrial outcome such as should be attributed to the parties who negotiated and executed the Agreement.”10
[25] The BFU also referred to the comments of Justice Kirby in Amcor Pty Ltd v CFMEU 11that there may be a lack of precision in the terms of agreements and that this is part of the consideration of the correct interpretation of an agreement. It was further submitted that consideration should be given to the beneficial nature of enterprise agreements and that a construction which best achieves a beneficial objective should be preferred. This was also said to be consistent with the existence of a statutory better off overall test, which requires that an enterprise agreement be even more beneficial in nature to an employee than any applicable award or the residual protective benefits provided by the National Employment Standards.
[26] In relation to the terms of the Agreement relevant to the issues in dispute, the BFUE submitted that clause 10.4.6 is an example of a provision which contains “infelicities of expression” and is clearly an attempt by the parties to describe how to calculate a rate of pay which is additional and not cumulative in nature. The meaning is plain and employees are entitled to both the casual loading and the shift penalty, with the shift penalty being additional and not cumulative.
[27] Clause 13.4 deals with shift work. Employees working those shifts are entitled to the loading in addition to the casual loading. Clause 13.4.3 and the table in that clause sets out how the penalty is to be calculated, based on the ordinary hourly rate – ie. it is additional and not cumulative. Clause 10.4.2 sets out that a casual employee shall be paid a casual loaiding for all hours worked and the exhaustive exceptions are contained in the clauses below, specifically clauses 10.4.4 and 10.4.5. The loading in clause 13.2.4 is also expressed as an “additional loading”. Casual employees working outside the spread of ordinary hours are entitled to an additional loading – not cumulative – in addition to their casual loading.
[28] This construction is supported by the context in which it appears. An example is that casual employees are not entitled to the additional loading of 50% for hours worked on a Saturday because it is one of the two exceptions as set out in clause 10.4.4. However, no such exception applies for non-casual employees, who are entitled to be paid the additional loading of 50% for hours worked on a Saturday, which starts at midnight on Friday.
[29] In addition to the above, consistent with clause 10.4.6, a casual employee would be entitled to be paid the night shift loading of 25% for those hours in addition to the casual loading of 25%. Swickers is not paying permanent employees working night shift the night shift penalty in clause 13.4.3 for hours worked after midnight on Friday, but is paying the
Saturday loading. The Saturday loading in 13.2.3 of the Agreement is an additional (not cumulative) loading calculated on the ordinary hours rate of pay and accordingly is payable in addition to night shift penalty.
[30] The BFU contends that there is no express provision or good reason why employees working on a night shift should not be paid the night shift penalty for the entire shift. This is not a loading in substitution for another. The night shift loading is a disability-type allowance. BFU’s primary submission is that the terms of the agreement are clear. In the alternative, if the Commission decides that the Agreement is ambiguous, the
BFU relies on the statement of Darryl Burgess and the Employer’s declaration in support of the approval of the Agreement including the statement at [3.7] that all employees are entitled to the 30% shift loading for hours worked outside the spread of ordinary hours.
[31] In response to the submissions of Swickers, the BFU points to the fact that in relation to the questions for arbitration, the Company is:
● Paying casual employees who work outside of the spread of ordinary hours a loading of 30% in substitution for, and not in addition to, the casual loading;
● Paying casual employees for hours worked after midnight on Fridays a loading of 50% in substitution for and not in addition to, the casual loading; and
● Paying permanent employees for hours worked after midnight on Fridays a loading of 50% in substitution for, and not in addition to, the night shift loading.
[32] In relation to Question 1, the BFU submits that Swickers has ignored the word “additional” as it appears in both clauses 10.4.6 and 13.2.4 of the Agreement. The Macquarie Dictionary defines “additional” as “added; supplementary” and the use of the word makes clear that the loading is to be added to the casual loading in clause 10.4.2 calculated on the ordinary hourly rate and is an additional or supplementary loading and not in substitution for the casual loading.
[33] In relation to Question 2, the BFU contends that Swickers’ submission that because 13.4.1 provides that shift work is permitted for cleaners only, and that only cleaners are entitled to the penalties in that clause for shift work, is not open on the terms of the Agreement. According to the BFU the clause is directed at restricting the right of Swickers to direct employees who are not cleaners, to work shift work. Absent the Company and an employee who is not a cleaner entering into an individual flexibility agreement (under the model term which is taken to be a term of the Agreement) an employee could not be directed to work shift work.
[34] Swickers submission that as clause 13.2.3 provides for a more generous entitlement for ordinary hours worked after midnight on Friday it applies instead of shift penalty otherwise payable, on those hours, is not a construction that is open on the terms of the Agreement. If it was the case that a more generous loading was to be paid instead of another loading, the Agreement would say so. Further, Swickers’ submission in relation to this question suffers from the same issue in that it does not have regard to the use of the term “additional” and that the loading is to be added and is not in substitution for another loading.
[35] In relation to Question 3, Swickers submission is that only cleaners are entitled to shift penalties should not be accepted. The BFU also points to the terms of the Award in support of its submission in relation to the proper construction of the agreement. In this regard, clause 15.12 of the Award provides that:
“A casual employee employed on shift work, will, in addition to the casual loading set out in clause 15.9 be paid the appropriate shift penalty based on the ordinary hourly rate excluding the casual loading.”
[36] According to the BFUE its construction is supported by the Fair Work Ombudsman’s Pay Guide for the Award. In the event that (contrary to the positions advanced by both parties) the Commission finds that the Agreement is ambiguous, the BFU relies on the Statement of Mr Schulz that:
● he does not recall seeing Annexure B to the Form F17;
● he does not agree with the examples in Annexure B; and
● his understanding of the negotiation and the Agreement terms was that the penalties and loading were to be additional.
4.2 Swickers
[37] Evidence for Swickers was given by Ms Rebecca Humphrey, Human Resources Manager. Ms Humphrey said that the Company’s export facility suffered extensive damage in November 2016 as the result of a fire. Following the fire, the Company was able to use an empty boning room at Wulkuraka and 130 team members volunteered to work there. While relocating to Wulkuraka the team was split into two groups – A group commencing in the morning and B group commencing in the afternoon. Hygiene team members who were predominantly accustomed to working afternoon shifts commenced later at night.
[38] Although the working hours changed for the boning room and related departments, Swickers’ operation prior to the fire had always involved an afternoon shift on the slaughter floor and related departments (including hygiene). Prior to 1998 and the commissioning of the slaughter floor, two shifts operated with a subsequent hygiene shift, similar to the changed arrangements in the boning room. According to Ms Humphey the Company’s agreements since 1998 have been drafted and operated with the provisions of shift workers in these areas and the shifts that are currently being worked for boning, packing and hygiene have been set up exactly like the ones on the slaughter floor. The Agreement provides for shift allowances only to be paid to cleaners and not to other groups of employees in the business.
[39] Swickers submits that there is no ambiguity in the Agreement and in accordance with the principles set out in the Full Bench Decision in Berri, 12 there is no need to look further than the plain meaning of the words as set out in the Agreement. In relation to Question 1, Swickers submits that the relevant provisions are clauses 10.4.6, 13.2.1 and 13.2.4. Also relevant are clause 10.4.2 (casual rate of pay), clause 6 (definition of ordinary rate of pay) and clause 4 (application of the Agreement).
[40] Swickers submits that the amount to be paid to employees in circumstances set out in Question 1 is calculated as follows. The base rate of pay for non-shift workers working ordinary hours outside of the spread of hours is determined under clause 13.l2.4 – 30% of the ordinary hourly rate of pay. Ordinary hourly rate of pay is defined in clause 6 to exclude casual loading. Therefore, employees working ordinary hours outside the spread of ordinary hours are paid 30% of the ordinary hourly rate of pay as an allowance. Casual employees are not paid the casual loading in addition to the 30% allowance.
[41] Question 2 concerns the entitlements to casual loading and night shift loading under clause 13.4.3 for casual employees working ordinary hours on shifts that finish after midnight on Fridays. Swickers submits that in addition to the clauses set out in relation to Question 1, the agreement provides for shift penalties at clause 13.4.3. The Agreement also makes it abundantly clear that shift work under the Agreement applies only to cleaners and that only cleaners are permitted to work shift work. Because clause 4 of the Agreement makes it clear that reference cannot be made to other Awards or Agreements, all other employees are paid ordinary rates of pay, regardless of start and finish times.
[42] Swickers submits that casual employees other than cleaners are not entitled to shift loading. Casual employees who are cleaners are entitled to the relevant loading provided for in clause 13.4.3 of either 7.5% or 25%. However, clause 13.2.3 provides for a more generous entitlement for ordinary hours worked after midnight on Friday. The additional loading in that clause is calculated on the ordinary hourly rate of pay, which excludes casual loading. Therefore casual cleaners who work after midnight on Friday receive the night shift loading up to midnight and then the 50% loading in clause 13.2.3 after midnight. It is clear that the reference to additional loading is over and above the ordinary rate of pay. There is no basis to assert that there should be more than one loading paid after midnight to casual cleaners.
[43] Question 3 concerns the entitlements to shift loading and Saturday loading under clauses 13.4.3 and 13.2.3 for permanent employees working ordinary hours on shifts that finish after midnight on Fridays. Swickers submits that there is no entitlement under the Agreement to shift loading for permanent employees who are not cleaners. Permanent employees who are cleaners and who work after midnight on Friday, receive the shift loading until midnight and then the 50% Saturday loading after midnight.
[44] In the alternative, Swickers submits in the alternative, that if the Commission finds that the Agreement is ambiguous, then the Commission can use extraneous material to interpret the Agreement. In this regard Swickers relies on the Form F17 and Form F18 submitted to the Commission. The Form F17 signed by Swickers’ Human Resources Manager, contains examples at Appendix B which are calculated in accordance with the interpretation advanced by the Company in this matter. The Form F18 sworn by the then BFU Secretary Mr Schulz, states that he agrees with the form F17.
[45] In accordance with principle 2 in Berri it is not a relevant consideration in determining how an agreement should be interpreted, that the outcome is perceived by one or more parties as being unfair or unjust. The negotiated Agreement does not need to provide for all of the allowances in the Award if the parties negotiate compensation in some other way. This is the case in the Agreement subject of the current dispute.
[46] Swickers also submits that it would be contrary to the principles of interpretation set out in Berri for the Commission to allow the BFU to resile from its previous agreement with interpretation of the Agreement set out in the Form F18. Those documents establish the objective intention of the parties at the time the Agreement was negotiated and approved by the Commission. In accordance with clause 4 the Agreement is a stand-alone agreement, and contains all of the terms and conditions of employment which apply to employees. The Agreement clearly provides for shift allowances only to be applied to cleaners.
[47] The Agreement was the result of a bargaining period in which there were 15 meetings with the BFU and Delegates, and the rates of pay were negotiated as part of the Agreement. In many instances, the provisions in the Agreement were replicated from earlier versions. An example of the replication of provisions is the 30% in clause 13.2.4 which replicates the provisions of the 2008 Agreement except that the 30% was increased from 15%. The definition of “ordinary rate of pay” was not amended between the 2008 Agreement and the current Agreement.
[48] In response to the BFU submissions Swickers denies that there were new shifts introduced following the fire at the Kingaroy Bacon Factory. Although there were some hours changes, prior to the fire, there were permanent and casual employees who were not cleaners and who were working hours which, but for the deliberate limitation in the Agreement on who would be paid a shift allowance, would be a pattern that would entitle those employees to be paid a shift penalty.
[49] In relation to the submission that the Agreement was required to pass the BOOT, Swickers submits that at the time the Agreement was approved, the Commission was convinced, based on the material filed with the Agreement – including the Form F17 and Form F18 – that this requirement was met. The BOOT cannot be used post-approval of the Agreement to support a particular interpretation of the Agreement, including that it should be construed beneficially. The Agreement is more beneficial than the Award based on the Award at the time the Agreement was approved. The Form F17 filed by Swickers also states that time worked outside the spread attracts an additional loading of 30%. It does not make any reference to a shift loading.
[50] Swickers submits that all employees who work outside the spread of hours are paid the 30% loading for such hours of work. There is no evidence that any employees who have worked outside the spread of ordinary hours have not been paid the 30% loading and Swickers has undertaken that any employee who has worked outside the spread and not been paid the 30% loading will be paid that loading on advice to the Company.
5. CONSIDERATION
5.1 The approach to construing enterprise agreements
[51] The approach to construing enterprise agreements was most recently set out in a Decision of a Full Bench of the Commission in “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU) v Berri Pty Ltd13as 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 aide 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.
[52] In CFMEU v Endeavour Coal Pty Ltd T/A Appin Mine 14a Full Bench of the Commission held that the context of an agreement provision is significant. In this regard, the Full Bench set out the explanation of this point by the NSW Court of Appeal in Mainteck Services Pty Ltd v Stein Heurtey SA,15emphasising the following matters:
• Until a word or phrase is understood in the light of the surrounding circumstances, it is rarely possible to know what it means 16 and there is always some context to any statement;17
• Language considered in its context will often have a clear meaning and context will often not displace that meaning – “but not always”; 18
• To state that a legal text is clear reflects the outcome of an interpretation process and means that there is nothing in the context that detracts from the ordinary literal meaning and cannot mean that context can be put to one side; 19
• The phrase used by Mason J in Codelfa 20“if the language is ambiguous or susceptible of more than one meaning” does not mean that the susceptibility of the language to more than one meaning must be assessed without reference to the surrounding circumstances and in order to determine whether more than one meaning is available it may be necessary to turn to context;21 and
• Context has also been described as surrounding circumstances and the meaning of terms normally requires consideration not only of the text, but of the surrounding circumstances known to the parties and the purpose and object of the transaction. 22
[53] The case law in relation to the approach to the construction of enterprise agreements makes it clear that context and purpose are relevant to the construction of provisions in an enterprise agreement and must be considered even where the words of the provision being construed appear, on their face, to have a clear and unambiguous meaning. There is always context to any term of an enterprise agreement and the presence or absence of ambiguity is in the eye of the beholder.
[54] Both parties in the present case have submitted that the disputed terms of the Agreement are not ambiguous and have then proceeded respectively to advance diametrically opposed constructions of those terms. The meaning of the terms is disputed and the fact that both parties have advanced arguable cases for different constructions of the same terms is sufficient for the disputed terms to be described as ambiguous, which is defined in the Macquarie Dictionary as “having an obscure or double meaning, difficult to classify, doubtful.” Even if a provision is not ambiguous on its face, it is necessary to consider its context for the purpose of determining a dispute about meaning.
5.2 The questions for arbitration
[55] The issue in Question 1 is whether casual employees who are not shift workers, and who are working outside the spread of ordinary hours in clause 13.2.1, are entitled to the loading in clause 13.2.4 in addition to their casual loading. Clause 13.2.1 deals with “Spread of ordinary hours” and provides that “ordinary hours prescribed herein” are to be worked continuously except for meal breaks, between the hours of 5.00 am and 9.00 pm and by virtue of clause 13.2.2 are required to be worked Monday to Saturday inclusive. Clause 13.2.4 provides an additional loading of 30% for hours worked outside the spread of ordinary hours “subject to clause 13.2.1” – a reference to which I will return.
[56] Clause 13.2.4 provides an additional loading of 30% of the ordinary hourly rate for hours outside the spread of ordinary hours. The additional loading for work outside the spread of ordinary hours is less than the overtime rates applicable to full time employees in clause 13.3 of the Agreement and the overtime rates in clauses 10.4.13 and 10.4.14 for casual employees. It is also the case that none of the clauses dealing with overtime payments for both full time and casual employees define overtime to include time worked outside the spread of ordinary hours in clause 13.2.1.
[57] Clause 13.3.1 deals with payment for overtime for full time employees and the circumstances in which such payment will be made. Clause 13.3 provides for overtime payments where full time employees work in excess of the scheduled maximum ordinary hours or ceasing time set in accordance with clause 13.5.1; in excess of ten ordinary hours per day; on a Saturday (other than as ordinary hours); or in excess of 41 hours in any week. Casual employees are specifically excluded from the application of clause 13.3 and the overtime payments set out in it. Overtime payments for casual employees and the circumstances in which they are paid are found in clause 10.4.13 and clause 10.4.14. Those clauses provide that overtime is payable where casual employees work more than ten hours in any day or 38 hours in any week.
[58] As previously noted, Clause 13.2.4 of the Agreement deals with hours of work which are outside the spread of ordinary hours in clause 13.2.1, but which are not automatically deemed to be overtime hours as defined in clause 13.3.1 for full time employees or clauses 10.4.13 and clause 10.4.14 for casual employees. The 30% loading is a penalty for working ordinary hours after 9.00 pm or before 5.00 am in circumstances where those hours do not meet the definition of overtime hours in clause 13.3.1. It may be that the reference in clause 13.2.4 to the loading being subject to clause 13.2.1 is a typographical error and the reference should be to clause 13.3.1. In any event, it is clear that the loading in clause 13.2.4 applies to hours that are not overtime hours as defined in clause 13.3.1.
[59] The provisions of clause 13.2 including the loading in clause 13.2.4 apply to casual employees and it is not in dispute that casual employees are entitled to receive the additional loading of 30% in clause 13.2.4 in circumstances where they work hours which are outside the 5.00 am to 9.00 pm spread. The issue in dispute is whether casual employees are entitled to receive the casual loading in addition to the 30% loading.
[60] Clause 13.2.4 expresses the loading as an “additional loading of 30% of the ordinary rate of pay”. The “ordinary rate of pay” is defined in clause 6 of the Agreement to exclude casual loading. In my view, the plain meaning of the term “30% of the ordinary rate of pay” is that the method of calculating the loading is by applying 30% to the ordinary rate of pay as defined in clause 6 of the Agreement – excluding casual loading. The terms of clause 13.2.4 do not require that the casual loading is subsumed into the 30% loading for working outside the ordinary spread of hours. The method of calculation for the 30% loading and the way that it is expressed simply means that the casual loading is not compounded by the 30% loading and does not mean that the 30% loading replaces the 25% casual loading or that the casual loading is absorbed into the 30% loading for work outside the spread of ordinary hours.
[61] When clause 13.2.4 is read in the context of the Agreement as a whole, this interpretation is consistent with other terms of the Agreement as they apply to casual employees. A casual loading of 25% is prescribed by clause 10.4.2 read in conjunction with clause 10.4.3. Where casual loading is subsumed into other loadings, there is a specific clause stating that this is so. Clause 10.4.4 provides that when working ordinary hours on a Saturday, casual employees are entitled to the Saturday penalty in clause 13.2.3 and not the casual loading. Similarly, clause 10.4.5 provides that casual employees who work authorised overtime are entitled to the overtime payments in clauses 10.4.13 and 10.4.14 and not the casual loading.
[62] There is no provision in clause 10.4 to indicate that casual employees are not entitled to the casual loading in addition to the loading for work outside the ordinary spread of hours in clause 13.2.4. The fact that there are specific clauses which state that casual loading is not payable in addition to overtime payments or the additional loading for ordinary hours worked on Saturdays, is a strong indication that where the framers of the Agreement intended that the casual loading would be subsumed into another payment, they expressly stated that this is the case.
[63] It is permissible to look at contextual matters such as the terms of an award that would otherwise apply to the employees concerned or surrounding circumstances including the general industrial relations environment in which the Agreement was made in determining the proper construction of an enterprise agreement. Regard may be had to these matters to determine the proper meaning of an ambiguous or uncertain provision or to determine whether a provision is ambiguous or uncertain.
[64] In my view the terms of an Award that would otherwise apply to employees is a significant contextual matter that is relevant to the construction of an enterprise agreement. A relevant Award is part of the contextual background of an enterprise for reasons not the least of which is the fact that an enterprise agreement must pass the better off overall test (BOOT) prescribed by the Act, for each employee and each prospective employee who will be covered, when compared to a relevant award. Notwithstanding that the BOOT is conducted at the time the application for approval of an enterprise agreement is made, a construction which would have resulted in the agreement passing the BOOT would be preferred over one which would not. Contrary to the submissions advanced by Swickers, this does not involve using the BOOT post approval to support a particular construction of the Agreement. Rather, the BOOT is part of the contextual framework in which the agreement was made.
[65] The Award that would otherwise apply to employees the subject of the present dispute is the Meat Industry Award 2010 (the Award). For the purposes of the Award, Swickers is a meat processing establishment. Under the Award, the ordinary hours for casual employees are set out in clause 15.5 as not exceeding 38 hours in any week. The ordinary hours of work generally are dealt with in clause 13.2(a) which provides that they are not to exceed 38 hours per week or an average of 38 hours per week not exceeding 152 hours in 28 days. The maximum number of ordinary hours in a day or shift is ten (clause 31.2(c)). By virtue of clause 31.2(f) of the Award, the spread of ordinary hours for meat processing establishments is Monday to Friday from 6.00 am to 8.00 pm spread of hours for meat processing establishments. By agreement the ordinary spread of hours may include a Saturday or Sunday and if such agreement is reached the minimum rates of pay are time and a-half between midnight Friday and midnight Saturday and double time from midnight Saturday to midnight Sunday. Any time worked outside the ordinary spread of hours must be paid at overtime rates (refer clause 31.2(d)).
[66] Under the terms of the Award, casual employees are entitled to a 25% casual loading. Where casual employees working ordinary hours on a Saturday or Sunday or overtime, receive the appropriate Saturday or Sunday loading, or overtime rate, instead of the casual loading, the casual loading is absorbed into those payments (refer clause 15.10 and clause 15.11). In contrast, where casual employees work shift work under the Award they are entitled to be paid the casual loading in addition to the shift penalty based on the ordinary hourly rate excluding the casual loading – ie. the casual loading and the shift penalty are both payable on a cumulative but not compounding basis. Ordinary hourly rate is defined in clause 3.2 as the Award rate of pay divided by 38.
[67] Other than that the Agreement contains a penalty for work outside the ordinary spread of hours and does not automatically deem such work to be overtime, the provisions in the Award are generally consistent with those in the Agreement. The Award clearly stipulates the circumstances in which casual loading is or is not paid in addition to other penalty type payments. The circumstances specified in the Award in relation to when casual loading is paid in addition to other penalty amounts, are consistent with those in the Agreement. The fact that the Award provides that casual employees working outside the spread of ordinary hours would be entitled to overtime payments at the rate of time and a-half for the first three hours and double time thereafter and that the casual loading is absorbed into overtime payments, supports the proposition that the 30% additional loading in the Agreement for work outside the spread which is not overtime, is payable in addition to the casual loading. In this regard, the 30% allowance is akin to a shift allowance, which under the terms of the Award is payable in addition to overtime.
[68] It is also the case that under the Award, an employee working after 8.00 pm would be entitled to overtime payments. For a casual employee those payments would be time and a-half for the first three hours and double time thereafter, calculated on the ordinary rate (without inclusion of the casual loading) and the casual loading would not be payable in addition. Under the Agreement, the construction I have adopted would result in a casual employee who is not a cleaner employed on shift work, being paid a 30% loading for work after 9.00 pm and the 25% casual loading also calculated on the ordinary rate, in addition.
[69] Further, it is relevant to consider the rationale for the casual loading and the reasons it is paid, as part of the context and surrounding circumstances in which the Agreement was made. It is well established that casual loadings in awards are based on the incidents of casual employment including exclusion from the operation of: notice of termination; severance payments; annual leave entitlements and personal leave entitlements. Under the Agreement, casual employees are excluded from these entitlements. Further, by virtue of clause 10.6 of the Agreement casual employees are not guaranteed rostered hours in the same way that permanent employees are.
[70] In Re Metal, Engineering and Associated Industries Award, 1998 – Part 1 (the Casual Loading Test Case), a Full Bench of the Commission observed that all parties (and since 1937 all Tribunals) accept that a primary component in the calculation of a casual rate loading is a value for the paid leave foregone where they are not incidents of that type of employment. 23 The breadth of matters encompassed by the casual loading, the lack of guaranteed hours in relation to rostering under the Agreement and the fact that the Agreement specifically states that the casual loading is absorbed into a number of penalties such as overtime and ordinary hours worked on weekends and the lack of a specified spread on ordinary hours for the purposes of differentiating ordinary time from overtime,, weighs against a construction where the value of the casual loading would be further reduced by absorbing it into a penalty payment for work outside the ordinary spread of hours.
[71] Question 2 concerns the entitlements of casual employees working shifts that finish after midnight on Fridays, to casual loading and night shift loading. The question does not specify whether it relates to casual employees who are cleaners employed on shift work or to casual employees who are not cleaners. For completeness, it is necessary to answer this question with respect to both casual cleaners who are employed to work shifts and casual employees who are not cleaners.
[72] Clause 13.4.1 provides that shift work under the Agreement is permitted for Cleaners only. The loadings of 7.5% for Afternoon Shift and 25% for night shift are set out in a table which also stipulates that they are for Cleaners working such shifts. On the plain words of the Agreement there is no basis for paying casual employees who are not employed as cleaners, and who are not permitted to work shifts, a shift loading that is specified for cleaners. This is particularly so given that cleaners are the only employees permitted to work shifts by the specific terms of the Agreement.
[73] However, the question for arbitration does not consider the entitlement of casual employees to the additional loading for ordinary hours worked on Saturdays. It seems that this omission is because of the submission of the BFUE in paragraph 23 of its written outline, to the effect that casual employees are not entitled to the additional Saturday loading in clause 13.2.3. That submission is arguably incorrect.
[74] Clause 10.4.4 of the Agreement provides that: “Notwithstanding clause 10.4.2 where a casual employee works ordinary hours on a Saturday, they shall receive the appropriate loadings set out in clause 13.2.3 and not the loading in clause 10.4.2.” Clause 13.2.3 prescribes an additional loading of 50% of the ordinary hourly rate of pay for ordinary hours worked on a Saturday. Clause 10.4.2 (read in conjunction with clause 10.4.3) provides for a casual loading of 25%. The effect is that casual employees working ordinary hours on Saturdays are entitled to the 50% additional loading on the ordinary hourly rate in accordance with clause 13.2.3 and not the casual loading in clause 10.4.2.
[75] As it is framed, Question 2 requires consideration of the interplay between the casual loading in clause 10.4.2 (in conjunction with clause 10.4.3); the afternoon and night shift loadings for cleaners employed on shift work in clause 13.4; and the additional loading for work outside the ordinary spread of hours in clause 13.2.4. As will become apparent, the question is based on an arguably incorrect assumption about the entitlement of casual employees to the additional loading for ordinary hours on Saturdays in clause 13.2.4 as expressed in the BFUE submissions.
[76] As a result, Swickers has not had an opportunity to address this issue. Accordingly I intend to deal with Question 2 as posed, and express some provisional views about the interplay of the Saturday loading in clause 13.2.3 of the Agreement.
[77] I will first consider the entitlements for casual employees who are not cleaners and who are working rosters which require them to work ordinary hours after midnight on Friday. As previously noted, such employees are not working shifts as they are not shift workers. They are simply rostered to work ordinary hours in accordance with clause 10.6 of the Agreement.
[78] Provided that casual employees who are not cleaners employed on shift work do not work more than 38 hours in a week or ten hours in a day, they may be rostered to work their ordinary hours at any time, subject to being paid the appropriate penalty rates for work at particular times. Casual employees who are not cleaners employed on shift work, who are rostered to work ordinary hours during the period from 9.00 pm on Friday and 5.00 am on Saturday are entitled to be paid at least the 30% additional loading for work outside the spread of ordinary hours, for such hours. For the reasons set out above, casual loading is not absorbed into the 30% additional loading and casual employees are also entitled to the casual loading for at least hours worked between 9.00 pm and midnight.
[79] It is arguable that such employees are also entitled to be paid the 50% additional loading in clause 13.2.3 for the rostered hours of the shift after midnight on Friday, on the basis that it extends into Saturday. As specifically provided in clause 10.4.4 of the Agreement, they would not be entitled to be paid the casual loading in addition to the Saturday rate. It is also arguable that such employees are entitled to continue to be paid the 30% additional loading for work outside the spread of ordinary hours for work performed after midnight on Friday up until 5:00am on Saturday, in addition to the Saturday loading in clause 13.2.3.
[80] The period of work is still outside the ordinary spread of hours from 5.00 am to 9.00 pm and does not cease to be so after midnight. The Saturday penalty is payable because the employees are working ordinary hours on a Saturday and regardless of whether or not those ordinary hours are within the spread of ordinary hours in clause 13.2.1 of the Agreement. In short, the two additional penalties are for different disabilities – ie. work outside the spread of ordinary hours and ordinary work on a Saturday. As previously noted, there is no express provision to the effect that the Saturday penalty absorbs the penalty for work outside the spread of ordinary hours. Given that the penalties are for different disabilities, it is arguable that there is no basis for implying such a term into the Agreement.
[81] I turn now to consider the entitlements of casual cleaners who are employed to work shifts. The shift penalties in clause 13.4.3 are expressed as percentages “based on the ordinary hourly rate for the classification in which the employee is employed.” The heading in the table setting out the percentages is “(Shift allowance (ordinary hourly rate plus loading). In my view the reference to the ordinary rate as the basis for the shift allowance is simply for the purposes of calculating the actual quantum of the shift loading. It does not mean that the casual loading is subsumed into the shift loading.
[82] As previously noted, where the framers of the Agreement intended that casual loadings are not payable in addition to other loadings, they have specifically included a provision in the Agreement to that effect. I am also of the view that it would be illogical to absorb the casual loading into the night shift loading only and not the afternoon shift loading. Essentially, if the construction advanced by Swickers was accepted and taken to its logical conclusion, a casual employee would be paid the 7.5% loading for an afternoon shift in lieu of the casual loading or would be paid the casual loading and not the 7.5%. There would also have been a period where the casual loading was 24% – 1% lower than the night shift loading, resulting in a casual employee being paid either the 25% casual loading on the basis it is the higher amount or the lower amount of 24% casual loading in lieu of the shift loading.
[83] To apply the terms of the Agreement in this manner requires that additional words are inserted into the Agreement to the effect that casual employees are entitled to the higher of the casual loading and the afternoon or night shift loading or that they receive a lower amount if the afternoon or night shift loading is less than the casual loading. There is no basis for reading additional words into the Agreement where there is a logical and sensible construction available on the plain meaning of the existing words.
[84] For the reasons set out above, casual loading is to compensate casual employees for the incidents of casual employment. As the Agreement states in clause 10.4.6: Casual employment by definition is unpredictable”. Whatever casual loading compensates employees for under the Agreement it does not compensate them for working afternoon or night shifts and accordingly absent an express provision in the Agreement requiring casual loading to be absorbed into shift loading, there is no basis for such a construction of the Agreement. This construction is also consistent with the terms of the Award, which provide that casual employees receive their casual loading in addition to shift loadings, but that casual loadings are not compounded by shift loadings – see clause 33.9(d).
[85] Casual employees who are cleaners employed on shift work are entitled to night shift loading for shifts that finish subsequent to midnight and at or before 9.00 am. Such employees are not entitled to the penalty in clause 13.2.4 for work outside the spread of ordinary hours, in addition to the night shift loading. This is because the night shift loading compensates shift workers for work at such times. For employees who are not shift workers, the loading in clause 13.2.4 for work outside the ordinary spread of hours compensates for work that, but for the prohibition on shift work for employees other than cleaners, would constitute afternoon or night shift work.
[86] This construction is consistent with clause 33.9 of the Award which makes it clear that casual employees who are entitled to be paid shift loadings in addition to the casual loading, are not entitled to be paid loadings in clause 32(h) prescribed for cleaners commencing work after 8.30 am and before 12.00 noon (5%) or commencing at 12.00 noon or later and finishing at or before midnight (12.5%). It is also consistent with a general presumption in industrial instruments that where two penalties relate to the same disability, only one is paid (often subject to rules about the higher penalty prevailing), in the absence of an express provision to the contrary.
[87] Accordingly, casual employees who are cleaners employed to work shifts that finish after midnight on Fridays, are entitled to be paid at least the night shift allowance in clause 13.4.3 and the casual loading in addition to that allowance, for the duration of the shift. It is also arguable that such employees are entitled to the additional loading for Saturday work for any period of the shift that is rostered after midnight on Friday. Where the ordinary rostered hours on the shift extend past midnight on Friday, the shift is still a night shift as defined and does not cease to be so because it extends into Saturday. There is no express provision in the Agreement to the effect that a night shift worked on a Saturday does not attract the Saturday penalty in clause 13.2.4 in addition to the night shift loading. The Saturday penalty is an additional loading on ordinary hours worked on Saturday. The night shift loading is a loading on ordinary hours worked on night shift. However, the casual loading is absorbed into the loading for working ordinary hours on Saturdays and is not paid in addition to the Saturday loading.
[88] In relation to full time employees in circumstances set out in Question 3, similar considerations arise. Full time employees cannot be employed as shift workers unless they are Cleaners. Shift workers are entitled to shift loadings for working shifts within the definition of afternoon or night shift. The issue raised by Question 3 is whether such employees are entitled to receive both shift loadings and Saturday loadings for night shifts that continue after midnight on Friday. As was the case with Question 2 above, it is necessary for completeness to answer this question with respect to full time employees who are cleaners employed on shift work and full time employees who are not cleaners and are not employed on shift work.
[89] In relation to Question 3, for the reasons set out above, I have concluded that full time employees who cleaners employed on shift work are entitled to the night shift loading in clause 13.4 in lieu of the additional loading in 13.2 for work outside the spread of ordinary hours. Such employees are also entitled to the Saturday loading for ordinary hours worked after midnight Friday in clause 13.2.3, in addition to the night shift loading.
[90] It is also arguable that full time employees who are not cleaners and who are not employed on shift work are entitled to both the additional loading of 30% loading for work outside the spread of ordinary hours in clause 13.2.5 and the loading for Saturday work where their rostered period of work continues after midnight on Friday. Essentially, when those employees are rostered to work after 8.00 pm, they are working that would be overtime under the Award on the basis that it defines overtime to include work outside the ordinary spread of hours.
[91] The Agreement allows for such work at a lower multiplier than that which would apply under the Award and does not automatically define such work as overtime. This contextual background to the Agreement supports a construction whereby the value of loadings which are for different disabilities is maintained, and is not absorbed into other loadings absent a clear expression to the contrary.
[92] I do not accept that the Form F17 Employer Declaration are a basis to prefer the construction advanced by Swickers. It is regrettable that Mr Schulz did not consider that attachment before he signed the Form F18 supporting it. However, that is not sufficient to override the other considerations relevant to the proper construction of the Agreement. The Form F17 is a document prepared by Swickers. The attached calculations were prepared for the purpose of establishing that the Agreement passed the BOOT. There is no evidence that they were put to employees before they voted for the Agreement. Accordingly the documents are not sufficient to establish mutual intention so that the terms of the Agreement and other admissible contextual evidence or evidence of surrounding circumstances is disregarded.
CONCLUSION
[93] The questions for arbitration are answered as follows:
Question 1
On the proper application of clauses 10.4.6, 13.2.1 and 13.2.4, are casual employees who are not shift workers and who are working outside the spread of ordinary hours entitled to the loading in clause 13.2.4 in addition to their casual loading?
Answer:
Yes. Casual employees who are not cleaners employed to work shifts are entitled to the loading in clause 13.2.4 for work outside the ordinary spread of hours in addition to their casual loading.
Question 2
What are the entitlements to casual loading and night shift loading under clause 13.4.3 for casual employees working ordinary hours on shifts that finish after midnight on Fridays?
Answer:
Casual employees who are shift workers are entitled to both the casual loading in clauses 10.4.2 and 10.4.3 and night shift loading in clause 13.4.3 for working ordinary hours on shifts that finish after midnight on Fridays. My provisional view is that for any portion of a night shift that finishes after midnight on Friday, such employees are also entitled to the loading for ordinary hours worked on Saturdays in clause 13.4.3 of the Agreement and the night shift loading, but not the casual loading.
Casual employees who are not shift workers are entitled to both casual loading and loading in clause 13.2.4 for hours worked after 9.00 pm. It is also my provisional view that for ordinary hours worked after midnight, such employees are entitled to the Saturday loading in clause 13.2.3. While employees are in receipt of the Saturday loading they are not entitled to be paid the casual loading. However, it is my provisional view that the loading in clause 13.2.4 for hours worked outside the spread of ordinary hours is payable in addition to the Saturday loading between midnight on Friday and 5.00 am on Saturday, on the basis that they are paid for different disabilities.
Question 3
What are the entitlements to shift loading and Saturday loading under clauses 13.4.3 and 13.2.3 for permanent employees working ordinary hours on shifts that finish after midnight on Fridays?
Answer:
Full time (ie. permanent) employees who are cleaners employed on shift work, working ordinary hours on shifts that finish after midnight on Fridays are entitled to both shift loading and Saturday loading for the portion of the shift that is rostered after midnight on Friday.
It is also my provisional view that full time employees who are not shift workers and who are rostered to work ordinary hours after midnight on Fridays are entitled to be paid the additional 30% loading between 9.00 pm and midnight, and thereafter the additional 50% Saturday loading until the completion of the shift.
[94] The application will be relisted in early 2018 to deal with the outstanding issues I have identified and for the purposes of giving the parties an opportunity to be heard in relation to the provisional views I have set out in this Decision.
DEPUTY PRESIDENT
Appearances:
Mr W Ash of Hall Payne Lawyers for the Applicant.
Ms C Laird of Livingstones for the Respondent.
Hearing details:
Brisbane.
4 September.
2017.
1 Witness Statement of Darryl Burgess dated 4 July 2017- Exhibit 1.
2 Witness Statement of Thomas Schulz dated 9 August 2017 - Exhibit 2.
3 Statutory Declaration of Rebecca Humphrey dated 19 July 2017 - Exhibit 3.
4 [2015] FWCFB 5619.
5 [2017] FWCFB 2749.
6 Awards modernisation decision [2008] AIRCFB 1000 at [50].
7 Fair Work Ombudsman, Understanding casual penalty rates (August 2014) News & media releases Amcor Pty Ltd v CFMEU (2005) 222 CLR 241 [21], [96].
9 Ibid at [96]; SDA v Woolworths SA Pty Ltd [2011] FCAFC 67 at [16].
10 Amcor op. cit. at [96] Per Kirby J.
11 Ibid
12 Australian Manufacturing Workers Union (AMWU) v Berri Pty Ltd [2017] FWCFB 3005.
13 [2017] FWCFB 3005 at [14].
14 [2017] FWCFB 4487.
15 [2014] NSWCA 184 at [71] – [85].
16 Manufacturers’ Mutual Insurance Ltd v Withers (1988) 5 ANZ Ins Cas 60-853 at 75-343.
17 Kirin-Amgen Inc v Hoechst Marion Roussel Ltd [2004] UKPC 6; [2005] 1 All ER 667 at [64].
18 Project Blue Sky v Australian Broadcasting Authority [1998] HCA 28; 194 CLR 355 at [78].
19 Charter Reinsurance Co Ltd v Fagan [1997] AC 313 at 391 per Lord Hoffman, approved in Campbell v R [2008] NSWCCA 214; 73 NSWLR 272 at [48] (Spiegelman CJ, Weinberg AJA and Simpson J agreeing) and Dale v The Queen [2012] VSCA 324 at [73].
20 Codelfa Construction Proprietary Limited v State Rail Authority of NSW (1982) 149 CLR 337.
21 Franklins Pty Ltd v Metcash Trading Ltd [2009] NSWCA 407; 76 NSWLR 603 at [17] cited in Mainteck Services Pty Ltd v Stein Heurtey SA (2014) 310 ALR at [71] – [85].
22 Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52; 219 CLR 165 at [40].
23 M1913 Dec 1572/00 S Print T4991 at [158].
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