Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Essential Energy
[2024] FWCFB 379
•18 SEPTEMBER 2024
| [2024] FWCFB 379 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.604—Appeal of decision
Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia
v
Essential Energy
(C2024/1945)
| VICE PRESIDENT ASBURY | BRISBANE, 18 SEPTEMBER 2024 |
Appeal by CEPU against decision [2024] FWC 604 of Deputy President Easton at Sydney on 6 March 2024 in matter C2023/5666
This is an appeal by the Communications, Electrical, Electronic, Energy, Information,
Postal, Plumbing and Allied Services Union of Australia (CEPU) pursuant to section 604 of the Fair Work Act 2009 (Cth) (FW Act) against a decision[1] by Deputy President Easton issued on 6 March 2024 (the Decision).
The Decision was in relation to a dispute between the CEPU and Essential Energy about the rate of pay that shift workers who are absent on personal leave are entitled to under the Essential Energy Enterprise Agreement 2021 (the Agreement) and Essential Energy’s Personal and Carer’s Leave Policy (Leave Policy). Deputy President Easton decided that employees performing permanent night or afternoon shifts are entitled to receive shift allowances while on personal leave but rotating shift workers are not.
On 3 April 2024, directions were made for the filing of material by the CEPU and Essential Energy.
The CEPU filed written submissions in relation to permission to appeal and the merits of the appeal on 17 April 2024. Essential Energy filed written submissions in relation to permission to appeal and the merits of the appeal on 1 May 2024.
On 14 May 2024, we conducted a hearing, in Sydney, in relation to both permission to appeal and the merits of the appeal. At that hearing each party was afforded an opportunity to present oral submissions to supplement their written submissions in relation to the appeal.
For the reasons that follow, we have decided to grant permission to appeal and uphold the appeal.
The Deputy President’s Decision
The CEPU made an application to the Commission to deal with a dispute under the dispute resolution provisions of the Agreement on 20 September 2023. The dispute was in relation to the following question:
‘Are shift workers who are absent on personal leave entitled to be paid the shift allowance that would have been paid had the employee not been absent from work that day?’
The CEPU claims that this question should be answered in the affirmative on the basis of the terms of the Agreement, and the Leave Policy, which is referred to in the Agreement. Essential Energy disagrees and has never paid shift allowances to employees when they take personal leave.
The Deputy President noted that the parties accept, for the purpose of the resolution of this dispute, that the obligations and entitlements contained in the Leave Policy are binding on Essential Energy and its employees.[2]
In determining the matter, the Deputy President applied the standard interpretation principles from AMWU v Berri Pty Ltd[3] and did not take into account evidence or assertions of post-agreement conduct or usage.[4]
The Deputy President noted that s 99 of the FW Act requires that personal leave be paid at the base rate of pay and that the underpinning modern award, which is the Electrical Power Industry Award 2020 (the Award) requires shift penalties to be paid on Annual Leave and Long Service Leave, but not Personal Leave.[5] Clause 4.4 of the Agreement deals with Personal Leave and has four subclauses:
‘4.4.1 Managing personal leave absences
4.4.2 Avoidance of duplicate benefits
4.4.3 Pre 30 June 1997 accumulation and
4.4.4 Illness during Annual and Long Service Leave.[6]‘
Clause 4.4.1 of the Agreement provides:
‘4.4.1 Managing Personal Leave Absences
An employee who is absent from work due to personal illness or injury, not due to injury
by accident arising out of and in the course of employment, shall have access to personal
leave with pay subject to the following:(a) An employee shall notify their immediate supervisor, within one (1) hour of the employee’s usual starting time, of the employee’s inability to attend on account of personal illness or injury and the estimated duration of absence.
(b) An employee will be required by Essential Energy to produce a medical certificate or other satisfactory evidence of their illness or injury where the period of absence for more than two (2) consecutive working days, or where Essential Energy identifies a pattern of absences.
(c) The management of personal leave shall be in accordance with Essential Energy’s Personal and Carer’s Leave Policy (CEOP2000.44) as varied from time to time with consultation, which may include a requirement that the employee undergo personal leave case management.
Where an employee is undergoing Personal Leave Case Management, Essential Energy reserves the right to refer the employee to an independent medical practitioner where there is a disputed diagnosis of the employee’s medical condition.
(d) Where an employee has a long term illness or injury, which has caused the employee to be absent for more than six (6) months in any twelve (12) month period, Essential Energy will consult with the employees medical adviser or refer the employee to a nominated medical practitioner to determine the likelihood of the employee returning to work. If the medical advice confirms that the employee will be unable to return to work, Essential Energy may terminate the employee’s service.
(e) At any stage of the management of personal leave the employee may involve their union.’
The Leave Policy is referred to in clause 4.4.1 of the Agreement. Clause 2.1.3 of the Leave Policy provides:
‘2.1.3 Rate of Pay During Personal Leave
Paid personal leave will be at the employee’s ordinary rate of pay plus any allowance that the employee normally would have received, in accordance with the relevant Enterprise Agreement.’
The Deputy President noted that the crucial question for resolving the dispute is whether clause 2.1.3 of the Leave Policy fills an apparent gap left in the Agreement by conferring an additional entitlement. The CEPU contends that clause 2.1.3 creates a separate entitlement to the payment of allowances, while Essential Energy contends that it does no more than refer back to the relevant agreement and indicate that in some enterprise agreements allowances might be payable during personal leave.[7]
The Deputy President observed that the words ‘in accordance with the relevant Enterprise Agreement’ in clause 2.1.3 of the Leave Policy create some ambiguity because it is not clear whether those words qualify the entitlement to normally receive certain allowances or whether they qualify the entitlement to receive allowances during personal leave.[8]
The Deputy President found that clause 2.1.3 of the Leave Policy is most logically understood to refer only to entitlements under an enterprise agreement rather than setting additional entitlements when considered in the context of being a clause in a published policy that focuses on management of personal leave.[9] If the intention of clause 2.1.3 was to confer a separate entitlement, the words ‘in accordance with the relevant Enterprise Agreement’ would not have been included at all.[10]
In the absence of clear words to the contrary in the Agreement and the Leave Policy, the setting of rates of pay for personal leave does not fit within the portfolio of managing personal leave. The rate of payment is not squarely a matter to be managed under the Leave Policy. Almost all of the other matters dealt with in the Leave Policy set out the parameters within which Essential Energy can manage personal leave.[11]
In support of this view, the Deputy President pointed to clause 4.4.1 only referring to the Leave Policy directly in relation to managing personal leave. Clause 4.4.1 relates to managing personal leave, and the other sub-clauses of 4.4 do not refer to the rate of payment for personal leave.[12]
The Deputy President then considered whether the Agreement provided an entitlement for shift allowances to be paid to employees on personal leave. The Deputy President observed that the Agreement specifies that shift allowances are to be paid on Annual and Long Service Leave but is silent on payment of shift allowances on Personal and Carers Leave. The only reference to the rate at which personal leave is paid, is the reference to ‘personal leave with pay’ in clause 4.4.1.[13]
The Deputy President noted that Essential Energy pays some allowances during periods of personal leave, that it describes as permanent or recurring, or payable when set unchanging criteria is met. Essential Energy distinguished these kinds of allowances from the shift allowances under the Agreement. The Deputy President said that this distinction is not particularly satisfactory as the shifts worked or to be worked under the rostering arrangements of the Agreement are for all intents and purposes, permanent or recurring.[14]
The Deputy President concluded that the words of clause 4.4.1, particularly the words ‘personal leave with pay’ does not require that all shiftworkers receive shift allowances when they take personal leave. The Deputy President noted that the NES provisions provide for personal leave at the base rate of pay and that the Agreement supplements or improves the NES provisions. The Deputy President found that if the intention of clause 4.4 was to incorporate shift allowances for all shiftworkers then the drafters could have, and would have, included provisions similar to those included in the Annual Leave and Long Service Leave provisions. The different treatment under the Agreement for these different forms of leave compels the conclusion that the drafters intended for there to be different rates to apply. [15]
Having found that neither clause 4.4.1 of the Agreement or clause 2.1.3 of the Leave Policy gives rise to an entitlement for employees to be paid shift allowances when taking Personal Leave, the Deputy President considered whether such an entitlement arises under clause 2.2 of the Agreement.[16]
The Deputy President noted that under 2.2.3 of the Agreement, rotating shift workers are paid fixed dollar shift allowances depending upon shifts actually worked which vary depending upon whether an employee works an afternoon, night or early morning shift.[17] In contrast, employees who work permanent night shift or permanent afternoon shifts receive a 30 per cent shift allowance ‘in addition to the ordinary time rate of pay’ pursuant to clause 2.2.4 of the Agreement.[18]
The Deputy President concluded that as the pay of employees performing permanent night shift or permanent afternoon shifts does not change from day to day or week to week, they are receiving a shift allowance because they work a particular type of roster, rather than working particular hours on a particular afternoon.
As such the reference to ‘personal leave with pay’ in clause 4.4 of the Agreement entitles them to receive the 30 per cent shift allowance when absent from work on Personal Leave.[19]
The Deputy President answered the question posed as follows:
‘Question: Are shift workers who are absent on personal leave entitled to be paid the shift allowance that would have been paid had the employee not been absent from work that day?
Determination: Yes for employees engaged on permanent afternoon shift or night shift, and no for employees engaged on rotating shift work.’
The case before the Deputy President
The CEPU’s application initially proceeded on the basis that shiftworkers taking personal leave are entitled to payment of shift penalties because of clause 2.1.3 of the Leave Policy. In other words, the CEPU did not initially rely on the Agreement as providing this entitlement.
The parties filed a Statement of Agreed Facts which provided at paragraphs 6 and 7:
‘6. Amongst the employees covered by the Enterprise Agreement are employees who perform shift work. Those employees have entitlements to personal leave in accordance with:
(a) their contract of employment;
(b) the National Employment Standards;
(c) the Enterprise Agreement; and/or
(d) the Essential Energy policy “Company Procedure” Personal and Carer’s Leave CEOP2000.44.
7. The parties accept, for the purpose of the resolution of this dispute, that the obligations and entitlements contained in the above are binding on Essential Energy and its employees.’[20]
The CEPU submitted that the text of clause 2.1.3 clearly provides that an employee who takes paid personal leave is entitled to not only their ‘ordinary rate of pay’ but also ‘any allowance’, if the employee would ‘normally would have received’ that allowance under the Enterprise Agreement. Unambiguously, the policy does not distinguish one allowance from another, requiring only that an employee would ‘normally have received’ the allowance. Nor does the Enterprise Agreement distinguish one allowance from another in relation to the payment of personal leave, the Enterprise Agreement having no provision explicitly dealing with the rate of pay on personal leave.
Ms Eloise Ayling, Employee Relations Senior Specialist at Essential Energy gave evidence that in accordance with the terms of the Enterprise Agreement, the following allowances are paid when an employee who is otherwise eligible to receive those allowances is on personal leave:
‘(a)Clause 5.1 – Leading Hand Allowance but only where the employee is a permanent Leading Hand in accordance with clause 5.1(d) which specifies that the allowance is to be paid as an all purpose allowance in these circumstances;
(b) Clause 5.2 – Electrical Safety Rules Allowance, which is payable as a weekly allowance;
(c) Clause 5.3 – First Aid Allowance, which is payable as a weekly allowance;
(d) Clause 5.4 – Chief Fire Warden Allowance, which is payable as a weekly allowance;
(e) Clause 5.5.1 – Isolation Allowance, which is payable as a weekly allowance;
(f) Clause 5.5.2 – Climatic Allowance, when the allowance is payable as a weeklyallowance, but not when it is paid as a daily allowance;
(g) Clause 5.10 – Crew Coordinator Allowance, which is payable to an employee appointed to the role;
(h) Clause 5.11 – Depot Controller Allowance, which is payable to an employee appointed to the role;
(i) Clause 2.4.6 – On Call Allowance, which is payable on leave in accordance with the terms to clause 2.4.6(b).
(j)Clause 5.7 – Telephone Allowance, which is payable as a weekly allowance.’[21]
Essential Energy submitted that these allowances, paid per week, or by appointment are permanent, recurring allowances payable to employees. They would normally be paid to an employee and therefore are included in the payment for personal leave in accordance with clause 2.1.3 of the Leave Policy. [22]
Essential Energy contended that these are the allowances that an employee under the Enterprise Agreement would ‘normally’ have received regardless of whether they worked.[23] They are different to the shift allowances as it is evident from the way in which shift allowances are paid under the Agreement that an employee needs to work the shift in order to receive that particular allowance.[24] Shift allowances are payable ‘per shift’ where an employee works the particular shift as defined. [25]
Ms Ayling’s evidence was that the following allowances are not paid to employees during periods of personal leave, regardless of whether the employees would otherwise receive them under the terms of the Enterprise Agreement:
‘(a) Clause 5.6 – Aircraft Allowance, which is payable per day or part thereof when the employee performs the duties as set out in the clause;
(b) Clause 5.8 – Training Allowance, which is payable on the occasion when the circumstances set out in the clause arise;
(c) Clause 5.9 – Private Motor Vehicle Allowance, which is payable on the occasion when the circumstances set out in the clause arise;
(d) Clause 5.12 – Engineering Registration Allowance, which is payable on the occasion when the circumstances set out in the clause arise;
(e) Clause 2.5.6 – Meal Allowance, which is payable on the occasion when the circumstances set out in the clause arise.’[26]
Ms Ayling provided sick leave and personal leave clauses from predecessor industrial instruments and earlier versions of the Leave Policy which we have summarised in the following table:
| INDUSTRIAL INSTRUMENT | POLICY |
| COUNTRY ENERGY ENTERPRISE AWARD 2001 25 SICK LEAVE (i) An employee who is absent from work due to personal illness or injury, not due to injury by accident arising out of and in the course of employment, shall have access to sick leave with pay subject to the following: … | Sick and Personal Carer’s Leave Policy (CEC1027) as at 15 August 2002 3.1.3 RATE OF PAY DURING SICK LEAVE Paid Sick Leave shall be at the employee’s ordinary rate of pay plus any allowance that the employee ordinarily would have received, where this is in accordance with the Award. |
| Country Energy Enterprise Award 2004 25 Sick Leave (i) An employee who is absent from work due to personal illness or injury, not due to injury by accident arising out of and in the course of employment, shall have access to Sick Leave with pay subject to the following: … | |
| Country Energy Enterprise Award 2005 25 Sick Leave (i) An employee who is absent from work due to personal illness or injury, not due to injury by accident arising out of and in the course of employment, shall have access to Sick Leave with pay subject to the following: … | |
| Country Energy Enterprise Award 2007 25 Sick Leave (i) An employee who is absent from work due to personal illness or injury, not due to injury by accident arising out of and in the course of employment, shall have access to Sick Leave with pay subject to the following: | Procedural Guideline – Leave: Sick & Personal Carer (CEPG1027) as at 19 4.1.3 Rate of Pay During Sick Leave Paid Sick Leave shall be at the employee’s ordinary rate of pay plus any allowance that the employee normally would have received, in accordance with the Award. |
| Procedural Guideline – Leave: Sick & Personal Carer (CEPG1027) as at 10 4.1.3 Rate of Pay During Sick Leave Paid Sick Leave shall be at the employee’s ordinary rate of pay plus any allowance that the employee normally would have received, in accordance with the Award. | |
| Essential Energy Enterprise Agreement 2011 1.4.1 Managing Personal Leave Absences (a) An employee who is absent from work due to personal illness or injury, not due to injury by accident arising out of and in the course of employment, shall have access to personal leave with pay subject to the following: … | Guideline: Sick & Personal Carers Leave (CECG2000.44) as at 21 July 2011 4.1.3 Rate of Pay during Sick Leave Paid Sick Leave will be at the employee’s ordinary rate of pay plus any allowance that the employee normally would have received, in accordance with the Enterprise Agreement. |
| Essential Energy Enterprise Agreement 2013 4.4.1 Managing Personal Leave Absences (a) An employee who is absent from work due to personal illness or injury, not due to injury by accident arising out of and in the course of employment, shall have access to personal leave with pay subject to the following: … | Guideline: Personal and Carer’s Leave (CECG2000.44) as at 26 April 2013 4.01.3 Rate of pay during personal leave Paid personal leave will be at the employee’s ordinary rate of pay plus any allowance that the employee normally would have received, in accordance with the relevant Enterprise Agreement. |
| Essential Energy Workplace Determination 2016 4.4.1 Managing Personal Leave Absences An employee who is absent from work due to personal illness or injury, not due to injury by accident arising out of and in the course of employment, shall have access to personal leave with pay subject to the following: … | |
| Essential Energy Enterprise Agreement 2018 4.4.1 Managing Personal Leave Absences An employee who is absent from work due to personal illness or injury, not due to injury by accident arising out of and in the course of employment, shall have access to personal leave with pay subject to the following: … |
In reply, the CEPU submitted that the distinction drawn by Essential Energy between allowances that are said to be ‘permanent recuring allowances payable to employees’ and the shift allowances should not be accepted. The CEPU submitted that shift allowances are permanent recurring allowances payable where shift work is performed under the Agreement. Under clause 2.2.1 of the Agreement, ‘shift work’ is work performed in accordance with a shift work roster arranged in a way that is a rotating shift, part of a rotating shift or a permanent afternoon or night shift. That is, it involves a pattern of work that is, by definition, permanently recurring.
The CEPU contended that the shift work allowances are themselves specifically applicable to either a rotating roster or a permanent night or afternoon shift. Neither clause 2.2.3 nor clause 2.2.4 purport to exclude payment on personal leave. Nor are the entitlements expressly, or otherwise, excluded under the Personal Leave provision of the Enterprise Agreement.
While the Enterprise Agreement does not prescribe any particular rate of pay for personal leave, it would be inconsistent with the ordinary meaning of the words ‘access to leave with pay’ if an employee who is ill or injured for a particular shift, may be absent but only on less pay than they would have received had they not been absent. In the alternative, it is inconsistent with the ordinary meaning of the words to import an intended implied exclusion of shift allowances.
The CEPU submitted that the entitlement under the Agreement to absences ‘with pay’, is itself a separate entitlement bearing on the question before the Commission. Given the question before the Commission is not confined to the Policy, whether or not the words ‘with pay’ excludes the payment of shift allowances would appear to become jurisdictional in nature given that under s.739(5) of the Act, the Commission when dealing with a dispute may not make a decision that is inconsistent with an industrial instrument.
The CEPU submitted in the alternative, that if the Commission finds that the enterprise agreement entitlement for paid leave ‘with pay’ does not include shift allowances, the Policy should not be interpreted as meaning nothing more than a reliance upon entitlements granted with respect to personal leave under the Agreement. The words ‘any allowance that would normally have been received’ should be afforded their ordinary and natural meaning.
Grounds of Appeal
The CEPU relied on the following grounds of appeal:
1 The Deputy President erred at paragraph [59] of the Decision in finding that shiftworkers who work rotating shifts and are absent on personal leave are not entitled to be paid the shift allowance that would have been paid had the employee not been absent from work on that day.
In particular the Deputy President erred:
(a)in interpreting the subclause 2.2 and clause 4.1.1 of the Agreement as not having the effect of providing an entitlement to pay shift allowance to shift workers on a rotating shift.
(b)In interpreting clause 2.1.3 of the Leave Policy as not providing employees with an entitlement to shift allowance on personal leave where the employee would have ‘normally received’ the allowance had they not been absent from work on personal leave.
CEPU Submissions
In relation to permission to appeal the CEPU submitted that permission to appeal should be granted as it is in the public interest to do so because:
1.The application to appeal the Decision concerns an arguable case of appealable error, attended with sufficient doubt to warrant reconsideration of the Decision.
2.The appeal concerns errors of law in that the Deputy President has misconstrued the relevant terms of the Enterprise Agreement and/or the Personal and Carer’s Leave Policy. It is in the public interest for errors of law to be corrected on appeal.
3.It is similarly in the public interest to ensure that enterprise agreements are properly construed and applied. The Decision does not properly construe and apply the Enterprise Agreement
4.The Decision manifests a substantial injustice to employees of the Respondent engaged on a rotating shift roster by denying them shift allowance when they should properly receive it.
The nature of the Decision involved the interpretation of the terms of the Enterprise Agreement and the Leave Policy. The CEPU submitted that there was no discretion involved in such a task. If follows therefore that if permission to appeal is granted, the Full Bench is required to determine whether the interpretation adopted by the Deputy President and the answer he provided to the question are correct.
Ground 1(a)
In relation to Ground (1)(a), the CEPU submitted that the Deputy President’s construction of the relevant provisions with respect to permanent night or afternoon shift was correct, that is, employees who work permanent afternoon or night shift are entitled to receive their shift loading when they are on ‘personal leave with pay’. In so construing the provisions, the Deputy President, in effect gave the ordinary meaning to the words ‘with pay’ in clause 4.4.1 consistent with the relevant authorities.
The CEPU contended that the Deputy President fell into error in drawing a distinction between those engaged on a permanent afternoon or night shift and those engaged on a rotating roster.
The justification for the distinction is not evident, so the CEPU contended, in the wording of clause 2.2.3 and clause 2.2.4 of the Enterprise Agreement. If a shift worker takes personal leave on a particular rostered shift, there is no logical reason why the words ‘with pay’ in clause 4.4.1 should include the shift allowance for those employees permanently rostered on a particular type of shift, that is afternoon or night, and not those employees permanently rostered to shifts that include rotating afternoon or night shifts.
The CEPU referred to the various provisions in the Agreement that deal with payments for shift workers which it submitted are critical textual indicators that the phrase ‘with pay’, used broadly in Agreement, has that ordinary meaning which is pay otherwise received by an employee.
The CEPU submitted that where allowances are excluded, the Agreement expressly provides this. For example, clause 2.2.8 which deals with overtime provides at subclause 2.2.8(e) that a shift worker entitled to payment for overtime under the provisions of subclauses 2.2.8(a), (c) or (d) is not entitled to payment of the shift allowances prescribed by clauses 2.2.3 and 2.2.4.
The CEPU submitted that throughout the Agreement the phrase ‘ordinary time rate of pay’ is used quite deliberately and pointed to clause 2.3.5, which deals with standing by, clause 2.3.8, which deals with employees being required to work without having a rest period, clause 2.4.7, which deals with payment for call outs, and clause 4.8, which deals with jury service.
The CEPU identified that the redundancy clause defined ‘relevant weekly rate of pay’ for the purpose of redundancy entitlements at clause 3.6 (2)(d) as the ‘…Employee’s rate of pay (see Section 6 Clause 6.14 Table 1: Essential Energy Rates of Pay) … and in addition any applicable all-purpose work-related allowances including, but not limited to, the Electrical Safety Rules Allowance’. The expression ‘base rate of pay’ is used in clause 36(7) in relation to temporary secondment or work placement during a ‘retention period’ following redundancy.
The CEPU submitted that the Personal Leave arrangements in the Agreement are not based on an accrual system but are unlimited subject to the provisions of clause 4.4 of the Agreement. They are therefore comprehensively different to the Personal Leave entitlements in the NES and the underpinning Award. In the context of a scheme that does not involve accrual and deduction, it is less likely to be focused on base rate. The CEPU’s interpretation of clause 4.4 is that the worker receives what they were guaranteed to get if they had worked, consistent with a scheme that is, in every particular, more generous than the underlying National Employment Standards.
Ground 1(b)
The CEPU submitted that the Deputy President misconstrued clause 2.1.3 of the Leave Policy. In particular, the Deputy President erred in finding that clause 2.1.3 of the Leave Policy did not provide entitlements additional to those found in the enterprise agreements that may apply to employees.
The CEPU submitted that the Deputy President misconstrued clause 2.1.3 of the Leave Policy when he relied upon the focus of other parts of policy as being on the management of personal leave. The fact that the Leave Policy contains mechanisms going to the management of leave does not exclude it from providing substantive entitlements beyond any applicable enterprise agreement.
The CEPU submitted that the Deputy President also erred in being ‘fortified’ (in paragraph [44] of the Decision) that clause 4.4.1 of the Enterprise Agreement ‘only refers to the Leave Policy directly in relation to managing personal leave’. The Leave Policy has an application independent to and beyond the application of the Enterprise Agreement. The Appellant submits that its terms cannot properly be diminished on the basis that part of the policy is referred to in the Enterprise Agreement for the purposes of that particular instrument.
The CEPU contended that the Deputy President erred by finding that the words ‘in accordance with the relevant Enterprise Agreement’ qualify the entitlement to receive allowances during personal leave. The Deputy President failed to give the ordinary meaning to the words ‘that the employee normally would have received’.
The CEPU submitted that the words ‘normally would have’ unequivocally deal with circumstances that in some way depart from the ‘normal’ course. In context of clause 2.1.3 of the Leave Policy, ‘normally’ the employee would have been at work.
In such a situation, the Leave Policy requires that despite the absence, the employee is to be paid the ordinary rate of pay plus any allowances ‘the employee normally would have received’ in accordance with the relevant enterprise agreement. The construction of clause 2.1.3 adopted by the Deputy President deprives the words “normally would have” of any ordinary or even recognisable meaning.
The CEPU contended that further, the Deputy President erred in suggesting, as he appears to at paragraph [44], that if a separate entitlement had been intended to be created, that the words ‘in accordance with the relevant Enterprise Agreement’ would then be left with no meaning. To the contrary, the meaning is, as the Deputy President appears to recognise as a possibility at paragraph [41] of the Decision, that the words qualify (or rather provide) that the allowance is only payable in addition to the ordinary rate of pay, if the allowance ‘normally would have been received’ (had the employee not been absent) under the relevant Enterprise Agreement.
Submissions of Essential Energy
Essential Energy submitted that permission to appeal should be refused (to the extent permission is required) and the appeal should otherwise be dismissed. The Deputy President’s construction of the Agreement and the Leave Policy was correct.
Ground 1(a)
Essential Energy submitted that there is nothing in the text of the Agreement itself which provides an entitlement to be paid a shift allowance while on personal leave. Where the Agreement has intended to incorporate the payment of shift allowances into entitlements received while an employee is absent from work, it has done so expressly, for example in the case of Annual and Long Service Leave.
Essential Energy submitted that the starting point is that shift workers are not paid their shift allowances when absent on personal leave under s 99 of the FW Act. That is the identical position taken by clause 22 of the underpinning award, the Electrical Power Industry Award 2020, which refers expressly back to the entitlements under the National Employment Standards.
Essential Energy submitted that the absence of any entitlement to be paid a shift allowance while on personal leave is consistent with the NES, which specifies that personal leave must be paid at the base rate of pay, and the underpinning modern award, which requires that shift allowances are paid on annual leave and long service leave but does not require them to be paid on personal leave.
Essential Energy submitted that in circumstances where entitlements are provided over and above what they would ordinarily expect to receive, the Agreement provides for them expressly and in a manner that is consistent with the underpinning regimes. The express references are a powerful textual indicator as to the proper construction of clause 4.4.1.
Essential Energy submitted that the use of the word ‘include’ in clauses 2.2.11(b) and 2.2.12, is not simply a matter of clarification, but an express conferral upon employees of a particular extended entitlement that goes beyond the concept of their ordinary pay.
Essential Energy submitted that clause 4.1.1 is in a general part of the Agreement and not specific to the entitlements received by shift workers. As the Deputy President observed, there is an ‘intentional difference’ between how shift allowances are dealt with in relation to personal leave as against annual leave and long service leave.’ This makes sense when looking at the context of the clause and the fact that the clause is designed to apply to the entirety of Essential Energy’s workforce, not simply the particular entitlements payable to shift workers.
Essential Energy submitted that the entitlement in clause 4.4.1 to personal leave ‘with pay’ is simply a reference to the fact that an employee is to be paid while absent on personal leave. There is no reference to whether the employee’s ‘pay’ should include the relevant shift allowances.
The distinction between clauses 2.2.3 and 2.2.4 drawn by the Deputy President is readily apparent from the nature of the work performed and the text of the clauses themselves.
Ground 1(b)
Essential Energy submitted that in the absence of any express entitlement to be paid the shift allowance whilst on personal leave, the relevant inquiry is, as the Deputy President observed, whether or not the terms of the Leave Policy are sufficient to ‘[fill] an apparent gap left in the Agreement by conferring an additional entitlement.’
Essential Energy submitted that clause 2.1.3 of the Leave Policy identifies that the Policy is only concerned with entitlements that exist under the ‘relevant Enterprise Agreement’. It does not, in and of itself, establish an additional entitlement to be paid a shift allowance whilst on personal leave.
Essential Energy submitted that the Deputy President’s analysis at [36] – [45] of the Decision was correct. There is nothing in the Agreement or the Leave Policy that provides shift workers working on rotating shifts with an entitlement to be paid their allowances whilst on personal leave. On contrary, the fact that the Leave Policy can be amended by Essential Energy at its sole discretion, subject to complying with any consultation requirements (see clause 4.4.1(c) of the Agreement), tends against the suggestion that the Leave Policy is capable of providing for an entitlement as contemplated by the CEPU.
Essential Energy submitted that the fact that: (a) the Leave Policy applies to employees of Essential Energy, other than those covered by the Agreement; or (b) for the purposes of this dispute, Essential Energy accepted that the Leave Policy was binding on it, is uncontroversial. Rather, the fact that a policy, which applies more broadly in Essential Energy’s business to employees other than those covered by the Agreement, refers back to the relevant enterprise agreement that covers those particular employees, is to be expected, and is perfectly consistent with the operations of a large employer like Essential Energy.
Consideration
This is a matter which has been brought under the Dispute Resolution Procedure at clause 1.14 of the Agreement which applies to ‘all disputes arising out of the employer-employee relationship’. The Dispute Resolution Procedure therefore extends beyond disputes arising from the terms of the Agreement and includes disputes about the application of the Leave Policy. The parties agree that the Leave Policy is binding on Essential Energy and its employees, and has an application independent to and beyond the application of the Agreement.
The Dispute Resolution Procedure distinguishes between ‘Local Matters’ and ‘Corporate-wide Issues’. In relation to ‘Corporate-wide Issues’, the Agreement provides at clause 1.14(2):
‘Corporate-wide Issues
(a) Tier 2: Claims or issues may be raised by either:
·Employee(s);
·Relevant Union(s); or
·Essential Energy.
Resolution of the issues raised should involve:
·Relevant member(s) of Executive Management and any other necessary resources, and
·Union Organisers and relevant Delegates to ensure input reflects the organisation or the issues raised.
(b) Tier 3: If the issues remain unresolved the matter may be referred to the Fair Work Commission for conciliation and/or arbitration with the rights of the parties to appeal being reserved. If both parties agree, a person other than the Fair Work Commission can be asked to deal with the issue or dispute, as provided for under s.740 of the Fair Work Act 2009.’
There is no dispute between the parties that the Dispute Resolution Procedure has been followed, that the Commission has jurisdiction to determine the matter pursuant to s 739 and that permission to appeal is required in relation to the appeal before us.
We commence our consideration with reference to whether shiftworkers taking personal leave are entitled to payment of shift penalties because of clause 2.1.3 of the Leave Policy.
The Leave Policy provides at clauses 1.0 and 1.1:
‘1.0 PURPOSE
The purpose of this document is to provide supervisors/managers and employees with information regarding personal and carer’s leave, to ensure a consistent approach is applied in the taking and management of this leave.
1.1Challenges
Ensuring that employees are aware of what is expected of them and that they know their rights as far as personal and carer’s leave is concerned.’
It has seven sections comprising of:
1. Purpose
2. Actions
3. Authorities and Responsibilities
4. Definitions
5. References
6. Recordkeeping
7. Revisions
The second section ‘Actions’ has separate sections for ‘Personal Leave’ and ‘Carers Leave’. In relation to ‘Personal Leave, it has the following subsections:
2.1.1 Medical Certificates
2.1.2 Personal Leave During Other Leave
2.1.3 Rate of Pay During Personal Leave
2.1.4 Other Compensation
2.1.5 Existing Accumulation
2.1.6 Personal Leave Case Management2.1.6.1 Where an Employee Has Frequent Personal Leave Absences
2.1.6.2 Where An Employee Has A Long Term or Ongoing Illness or Injury
2.1.6.3 General
2.2 Guidelines For Personal Leave Case Management
2.3 Termination2.3.1 Absences
2.3.2 Six (6) Month Absences or More
2.4 Major Illness or Injury
2.5 Minor Illness or Injury
2.6 Excessive Levels of Personal Leave
2.7 Personal Leave Case Management Process Flowchart
2.9 Personal Carer’s Leave Process Flowchart
Clause 2.1 of the Leave Policy is in similar terms to the Agreement. It states:
‘Personal leave with pay will be provided to all employees, (except casual employees) who are absent from work due to personal illness or injury. All genuine cases of personal illness or injury will be supported.
Essential Energy operates a debit free personal leave arrangement. In light of the need to manage personal leave absences, access to personal leave is not an unfettered right.
An employee shall notify their immediate supervisor, within one (1) hour of the employee’s usual starting time on their first day of absence, of the employee’s inability to attend on account of personal illness or injury and the estimated duration of absence.
As soon as possible after personal leave commences, the employee must complete an application for leave form confirming the absence and the time taken as personal leave.
Note: Casual employees receive a loading in lieu of any personal leave entitlements.’
Clause 2.1.3 of the Leave Policy deals with the rate of pay during personal leave and is set out earlier in our decision. It provides that ‘paid personal leave will be at the employee’s ordinary rate of pay plus any allowance that the employee normally would have received, in accordance with the relevant Enterprise Agreement’.
The issue in dispute is the meaning of words ‘normally would have received, in accordance with the relevant Enterprise Agreement’.
The CEPU contends that in the context of clause 2.1.3 of the Leave Policy, ‘normally’ the employee would have been at work, so the clause refers to allowances that the employee would have received if they had been at work rather than absent on personal leave. The effect of Essential Energy’s submissions appears to be that ‘normally’ the employee receives some allowances but not others under the Agreement while absent on personal leave and the Leave Policy does no more than confirm entitlements under the Agreement. Essential Energy also submits that the fact that the Leave Policy can be amended by Essential Energy at its sole discretion, subject to complying with any consultation requirements, tends against the suggestion that the Leave Policy is capable of providing for an entitlement.
In our view the words ‘normally would have’ in clause 2.1.3 of the Leave Policy favour the CEPU’s interpretation rather than that proposed by Essential Energy. These words direct attention to what would have happened in the ‘normal’ course of events. In the context of a provision in a Leave Policy dealing with the ‘Rate of Pay During Personal Leave’, clause 2.1.3 is clearly addressing a circumstance where an employee is on personal leave but ‘normally [they] would have’ been at work. It follows that clause 2.1.3 of the Leave Policy requires an employee to be paid personal leave at their ordinary rate of pay plus any allowance that the employee would have received had they worked (rather than being on personal leave), in accordance with the relevant Enterprise Agreement. The qualifying words ‘in accordance with the relevant Enterprise Agreement’ mean that the allowance must be payable pursuant to the terms of an applicable Enterprise Agreement, not pursuant to a contract or other source of entitlement.
With respect, we do not agree with the view expressed by the Deputy President that if the intention of clause 2.1.3 was to confer a separate entitlement, the words ‘in accordance with the relevant Enterprise Agreement’ would not have been included at all. It is appropriate for the Leave Policy to reference ‘the relevant Enterprise Agreement’ given that it applies to all employees of Essential Energy including those not covered by industrial instruments. Further, we believe that the placement of the words ‘in accordance with the relevant Enterprise Agreement’ at the end of the clause is an additional indication that the clause is creating an entitlement for an employee on personal leave to be paid allowances they would normally receive while working. We are also of the view that the plain meaning of clause 2.1.3 of the Leave Policy, read in context, is that the phrase ‘in accordance with the relevant Enterprise Agreement’ refers to allowances that the employee normally receives while at work, and that the Leave Policy is conferring an entitlement that is not in the Enterprise Agreement. If clause 2.1.3 was simply confirming entitlements which already exist under the Agreement, it would logically either simply state that ‘paid personal leave will be in accordance with the relevant Enterprise Agreement’ or provide as follows:
Paid personal leave will be, in accordance with the relevant Enterprise Agreement, at the employee’s ordinary rate of pay plus any allowance that the employee normally would have received
We note the Deputy President’s observations that almost all of the matters dealt with in the Leave Policy set out the parameters within which Essential Energy can manage personal leave and that the setting of rates of pay for personal leave does not fit within the portfolio of managing personal leave. However, as stated above, the purpose of the Leave Policy is to provide supervisors/managers and employees with information regarding personal and carer’s leave, to ensure a consistent approach is applied in the taking and management of this leave. Payment of leave is a matter which falls within the taking of leave and as such, the setting of rates of pay for personal leave is consistent with the Leave Policy’s objects with respect to taking of leave. Further, the Leave Policy refers to the rights and obligations of employees concerning personal leave and uses promissory language such as ‘will be provided’, ‘shall notify’, ‘must complete’, ‘will reimburse Essential Energy’, ‘shall have their … leave … preserved’, and ‘shall be paid’. That the Leave Policy can be amended by Essential Energy at its sole discretion, subject to complying with any consultation requirements, does not in our view alter the plain and ordinary meaning of clause 2.1.3.
Taking into account all of the material before us, we conclude that shift allowances are allowances that employees who are shift workers under the Agreement ‘normally would have received’ and as such they are entitled to receive shift allowances while absent from work on personal leave under clause 2.1.3 of the Leave Policy. Having reached this conclusion, it is not necessary for us to consider Ground 1(a) of the Appeal.
We consider that it is in the public interest to grant permission to appeal. We have identified error in the Decision and consider that it has unjust consequences for employees of Essential Energy engaged on a rotating shift roster by denying them shift allowances while on personal leave which they should properly receive under the Leave Policy.
We order as follows:
(a) Permission to appeal is granted.
(b) The second appeal ground is upheld.
(c) The Decision is quashed.
(d) In accordance with s 607(3)(b) of the FW Act, we make a further decision in relation to the matter and determine, for the reasons set out above, that the answer is ‘yes’ to the question posed by the parties as follows:
Are shift workers who are absent on personal leave entitled to be paid the shift allowance that would have been paid had the employee not been absent from work that day?
VICE PRESIDENT
Appearances:
L. Saunders of Counsel for the Appellant
A. Kentish for the Appellant
M. Minucci of Counsel for the Respondent
E. Baxter for the Respondent
Hearing details:
2024
Sydney, In person
14 May
[1] [2024] FWC 604
[2] Ibid, [6].
[3] [2017] FWCFB 3005, [114].
[4] [2024] FWC 604, [28].
[5] Ibid, [29].
[6] Ibid, [30]-[31].
[7] Ibid, [38]-[39].
[8] Ibid, [41].
[9] Ibid, [42].
[10] Ibid, [43].
[11] Ibid [44].
[12] Ibid, [45].
[13] Ibid, [46-[47].
[14] Ibid, [48]-[49]
[15] Ibid, [50].
[16] Ibid, [51].
[17] Ibid, [53].
[18] Ibid, [54].
[19] Ibid, [55]-[58].
[20] Appeal Book (AB) 99
[21] AB102
[22] AB 24
[23] AB 19
[24] AB 23
[25] AB 33
[26] AB 102
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