Benjamin Gregory, Andrew Dean v Ulan West Operations Pty Limited

[2015] FWC 2860

[2015] FWC 2860

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.739—Dispute resolution

Benjamin Gregory, Andrew Dean
v
Ulan West Operations Pty Limited
(C2015/1486), (C2015/1488)

SENIOR DEPUTY PRESIDENT HAMBERGER SYDNEY, 30 APRIL 2015

Alleged dispute about any matters arising under the enterprise agreement and the NES;[s186(6)].

[1] On 30 January 2015, Mr Andrew Dean and Mr Benjamin Gregory (the applicants) filed applications for the Fair Work Commission to deal with a dispute in accordance with the dispute settlement procedure (DSP) in the Ulan West Enterprise Agreement 2011 (the enterprise agreement).

[2] The DSP is to be found at clause 6 of the enterprise agreement. It provides as follows:

‘6. Dispute Resolution Procedure

6.1 in the event of a dispute about any matters arising under this Agreement or in relation to the NES, the following procedure will be used.

6.1.1 the matter shall in the first instance be discussed between the employee or the employees concerned and their immediate supervisor and/or another supervisor.

6.1.2 if the matter remains unresolved, it may be referred in writing for discussion between the employee or the employees concerned and the Department Superintendent or equivalent management representative and if requested, another employee may be present to act as a witness

6.1.3 if the matter remains unresolved, it may be referred in writing for discussion with the Department Manager.

6.1.4 if the matter remains unresolved, itmay be referred for discussion with the Company’s Operations Manager.

6.2 In the event that the matter remains unresolved, and if appropriate, the employee or the employees concerned or the Company may refer the matter to an agreed independent third party for mediation or conciliation.

6.3 In ·the event that the matter remains unresolved, the employee or the employees concerned or the Company may refer the matter to Fair Work Australia for conciliation and, if agreed, arbitration.

6.4 Whilst these procedures are being followed the employee or the employees concerned must continue to perform work in accordance with the reasonable directions of the Company and the Company’s operations must not be delayed or impeded by any stoppage of work.

6.5 Where a matter remains unresolved after discussion with a Department Superintendent or equivalent management representative, the employee or the employees concerned may appoint a representative to accompany or represent them for the purposes of the procedures set out from clause 6.1.3.

6.6 The Company may appoint another person, organisation or association to represent the Company for the purposes of the procedures set out from clause 6.1.3.

6.7 One or more of the steps set out above may be bypassed if the parties agree.’

[3] The dispute concerns Clause 19 of the enterprise agreement. The clause provides as follows:

‘19. Annual leave

19.1 Annual leave entitlements will accrue progressively during a year of service. The amount of the entitlement depends upon the roster that employees are working on. The leave accrues as follows:


Roster cycle   Weekly accrual   Annual entitlement

5 day Mon-Fri   3.3654 hours   5 weeks


7 Day Roster   4.0385 hours   6 weeks

19.2 Where an employee changes roster during the course of the year, the accrual will be adjusted on a pro-rata basis according to the rosters the employee works.

19.3 An employee may take annual leave at a time and for a period agreed with the Company provided that in the opinion of the Company, the operations at the Mine and the performance of work will not be unduly affected.

19.4 The Company encourages employees to take accrued annual leave each year. Due to operational needs or when it decides to shut down all or part of its operation, the Company may direct affected employees to take annual leave. Where a shutdown is necessary employees will be given 28 days notice.

19.5 Payment whilst on annual leave will be as if at work based on the employee’s TAS immediately prior to taking the leave and the leave will be paid ‘as it falls’, plus applicable performance pay.

19.6 With the agreement of the Company an employee can elect to cash out paid annual ‘leave in accordance with the requirements of section 93 of the Act. An employee may elect in advance to take this payment on a salary sacrifice basis.

19.7 On termination of employment, accrued untaken annual leave will be paid at the employee’s ordinary weekly rate of pay as at the date of termination. For the purpose of this clause, ordinary weekly rate of pay means the rate of pay calculated by dividing the employee’s TAS by 52.

[4] Clause 16.1 of the enterprise agreement is also relevant. It states:

‘The ordinary hours of work will be an average of 35 hours per week and those ordinary hours will be averaged over the roster cycle.’

[5] In their applications the applicants said that the dispute was about:

‘the subtraction of annual leave applied by the company over the course of the EA. The intent of the 7 day roster leave accrual was that workers employed to work the rotating 7 day cycle would be granted 6 weeks leave per year. The dispute resides around that leave was being deducted at one rate for 34 months of the EA, and in September 2014 the company altered the leave arrangements without consultation with the work force. The dispute in the companies (sic) definition of the word week. They re calculated leave at this time and deducted a further 2.5 hrs per day of leave taken for the entire previous duration of the EA.’

[6] The applicants seek the following relief:

‘The company to apply the same leave arrangements and deduction for the final 14 months of the EA as previously applied to the first 34 months of the EA. Return the leave that has been deducted without due notice and consultation.’

[7] Discussions between the applicants and their employer, Ulan Coal Mines Ltd (the company) failed to resolve the dispute, which led to the application being made to the Commission. A conciliation conference, by telephone, was held involving the applicants and representatives of the company on 19 February 2015. The dispute was not resolved, and it was agreed by the parties that it would be dealt with by arbitration by the Commission (in accordance with clause 6.3 of the enterprise agreement.). The parties agreed that the dispute should be dealt with ‘on the papers’ and directions were issued providing for both parties to file material in support of their position.

[8] The dispute was triggered by letters sent by the company to a number of employees in September 2014. These advised the employees that:

‘We are correcting an error in our system that has been deducting annual and personal leave incorrectly.

The correct deductions are as follows:

For dayshift, the correct deduction is 7 hours per shift.

For rotating roster the correct deduction is 9.5 hours per shift or 7 hours on training days.’

[9] The employees were then advised of revised figures for the amount of leave to be deducted based on the leave they had taken. The number of hours deducted was generally larger than they had previously been advised, meaning that their balance of outstanding leave entitlements was correspondingly lower.

[10] The dispute turns on whether the company’s original method for deducting was correct (as contended by the applicants) or whether it was merely correcting a mistake (as contended by the company).

[11] The applicants are seven day roster employees employed by the company. The company also has employees who work a five day Monday to Friday roster. It is not in dispute that five day roster employees are entitled to five weeks annual leave a year, and seven day roster employees are entitled to six weeks leave annual leave a year. The issue is how one calculates a week of annual leave for seven day shift workers.

[12] There is an eight week roster cycle. Five day roster employees work 40 shifts over the eight week cycle. The ordinary hours component of each shift is seven hours (with a total shift length of either eight or 12 hours.) Seven day roster employees work 30 shifts and the ordinary hours component of each shift is 9.5 hours (with a total shift length of either 10 or 12 hours.) They also work a regular training day of seven ordinary hours (with a total shift length of seven hours).

[13] The company provided the following illustrative table:

Roster Group	Actual Hours in Roster Cycle over 8 weeks	Shifts per Roster Cycle (8 weeks)	Ordinary Hours in Roster Cycle over 8 weeks	Ordinary Hours per shift in Roster Cycle over 8 weeks
5 day roster	440	40	280	7 x 40
7 day roster	310	30	280	9.5 hours x 28 7 hours x 2 (training days)

[14] This table shows that both groups of employees work the same number of ordinary hours over the roster cycle, though the seven day roster employees work 10 fewer shifts.

[15] When the mine commenced operations in December 2011, the company only employed five day roster employees.

[16] In accordance with the enterprise agreement, each week the employees (who were all then working a five day roster) accrued 3.3654 hours of leave. Multiplied by 52 weeks this gives a figure of 175 hours. When one divides 175 by five one gets 35. This makes it clear that annual leave is calculated based on the number of ordinary hours per week - 35 ordinary hours is equal to one week of leave.

[17] All employees remained on the five day roster until about April 2012, when crews were ‘phased on’ to seven day rosters.

[18] Under the enterprise agreement seven day roster employees are entitled to six weeks of annual leave per year. Leave is accrued using a factor of 4.0385. Again, this clearly relates to the number of ordinary hours worked. 4.0385 multiplied by 52 gives a figure of 210 hours. 210 hours divided by 35 is six. 35 ordinary hours is equal to one week of leave.

[19] Until September 2014 annual leave was deducted for all employees based on seven ordinary hours per shift. This was quite straightforward for five day shift employees. Five shifts (35 ordinary hours) for those employees is clearly equal to one week of leave.

[20] The difficulty arose with the introduction of seven day shifts. The payroll team deducted the same amount of annual leave hours for both five day and seven day roster employees for a day of annual leave. This ignored two salient differences between five day and seven day shift employees.

[21] For five day roster employees each working week is identical. However that is not the case for seven day roster employees. Sample shifts provided by the company showed how the number of shifts for seven day shift employees could vary from two to five shifts. As the company noted:

‘The averaging of ordinary hours over the roster cycle under the Agreement and under the award (clause 21.1) is therefore much more important. Annual leave taken in weeks with only 2 rostered shifts will of course enable a “week off” where 5 shifts are rostered. This characteristic of the industry, and underpins why the ordinary hours of each shift are the correct measure for the accrual and deduction of annual leave.’

[22] Moreover, as noted earlier, seven day roster employees work fewer shifts in a roster cycle (30 as opposed to 40 for five day roster employees.)

[23] The applicants contend that the company should deduct seven hours for day of annual leave for seven day shift workers. The effect of that would however be to give those employees an entitlement to eight weeks leave - not six weeks as provided for in the agreement. This is clear when one considers that seven day roster employees work 30 shifts in an eight week period. 30 multiplied by seven is equal to 210. The applicants’ position would mean that a seven day roster employee could use one year’s worth of annual leave to take the whole of an eight week roster cycle off work. That is obviously wrong.

[24] I understand why the employees who received the letters in September 2014 feel aggrieved. However I am satisfied that the company is now using the correct method for deducting annual leave. They were entitled to adjust employees’ leave balances to correct what appears to have been a mistake made by the payroll team.

[25] I decline to grant the relief sought by the applicants.

SENIOR DEPUTY PRESIDENT

Final written submissions:

23 March 2015

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