Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Manildra Energy Australia Pty Ltd
[2025] FWCFB 149
•18 JULY 2025
| [2025] FWCFB 149 |
| 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
Manildra Energy Australia Pty Ltd
(C2024/3727)
and
“Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU)
v
Manildra Energy Australia Pty Ltd
(C2024/3814)
| VICE PRESIDENT GIBIAN | SYDNEY, 18 JULY 2025 |
Appeal against decision [2024] FWC 1294 of Commissioner McKinnon at Sydney on 17 May 2024 in matters C2023/6688 and C2023/6786 – Dispute as to the calculation of annual leave payments for shift workers under the Manildra Bomaderry Site Agreement 2022 – Terms of the enterprise agreement nonsensical – Whether departure from literal reading of provisions justified – Attempt to read provisions purposively and in context to give sensible and rational operation to confusing provisions – Whether shift workers required to be paid 54 hours at a loaded rate when taking a one week block of leave – Whether inconvenient or unfair consequences of interpretation of the Commissioner – Both parties sought different answers to questions posed for determination to those given by the Commissioner – Permission to appeal granted – Appeal allowed to the extent set out in the decision – Revised answers given.
Introduction
This is an application for permission to appeal, and to appeal, in relation to a decision of the Commission. The decision arose from a dispute between the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia (the CEPU), the “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union” (the AMWU) and Manildra Energy Australia Pty Ltd about amounts payable to shift workers during periods of annual leave.
Manildra operates a diverse agricultural production facility in Bomaderry, New South Wales. Employment conditions for workers at the site have been regulated by enterprise agreements since 1997. The current agreement is the Manildra Bomaderry Site Agreement 2022 (the Agreement). The Agreement contains complicated provisions that average hours, shiftwork, overtime and wages over a roster cycle. The wages received in any particular week do not strictly align with the ordinary, shift or overtime hours worked in that week because of the averaging arrangements. Similarly, payments received during periods of annual leave do not strictly align with the hours that would otherwise have been worked during the particular period of leave.
A dispute was referred to the Commission under clause 28 of the Agreement by the CEPU and the AMWU and was dealt with by Commissioner McKinnon. The dispute was not able to be resolved as between the parties and the Commissioner resolved the dispute by arbitration pursuant to the dispute resolution provisions of the Agreement and s 739 of the Fair Work Act 2009 (Cth) (the Act). The Commissioner published her findings and reasons in Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia v Manildra Energy Australia Pty Ltd [2024] FWC 1294 (the Decision). The CEPU and AMWU (the Unions) have appealed the Decision. On 8 August 2024 the Commissioner varied the Decision to correct an obvious defect (see [2024] FWC 2105) (the Variation Decision).
For the reasons that follow, although the construction of the Agreement adopted by the Commissioner was largely correct, the answers given by the Commissioner to the questions posed for determination should be varied to some extent. As a result, permission to appeal should be granted and the appeal allowed to the extent set out in these reasons. The Full Bench should redetermine the dispute. In addressing the grounds of appeal, it is appropriate to first set out some relevant provisions of the Agreement, examine the decision of the Commissioner and then address the grounds of appeal.
The Agreement
The Agreement applies to Manildra and the employees of the Company employed within the classifications contained herein in the Company’s operations in Bomaderry, New South Wales as well as four unions. The classifications are set out in Appendix A to Appendix F to the Agreement and include various classes of operators, flour and pellet mill employees, fitters, electricians and ethanol operators. Some of the classifications distinguish between “38hr Week Employees” and “12hr Shift Employees”. The evidence indicated approximately 280 employees are covered by the Agreement.
The dispute referred to the Commission by the CEPU and AMWU specifically concerned annual leave payments to their members who are employed as electricians and fitters. Some of the electricians and fitters are engaged as shift workers referred to as “12hr Shift Employees”. The hours of work of employees are dealt with in clause 12 of the Agreement. Clause 12.1 deals with day workers and clause 12.2 concerns shift workers. Relevantly clause 12.2 provides:
12.2 12 hour shift work - ordinary hours
(a) The twelve (12) hour shift roster comprises an eight week cycle of twenty eight twelve hour shifts, as detailed below:
• Four weeks of 4 x 12 hour shifts per week;
• Four weeks of 3 x 12 hour shifts per week;(b) The remuneration to an employee shall be averaged over the eight week cycle so that an employee receives payment of 56 hours per week. The average weekly pay is calculated as follows from an eight (8) week cycle:
• Hours at single time 240 ordinary hours / 8 = 30 hours/week.
• Weekend Hours at double time 80 x 2 / 8 = 20 hours/week
• Rostered overtime 16 x 2/8 = 4 hours/week
• Single time hours for the two 21st shifts 16/8 = 2 hours/week.(c) Twelve (12) Hour Shift Workers shall be entitled to a rostered day off in accordance with clause 37.2 of this Agreement.
The consequence of the provision is that shift workers are engaged on a 12-hour shift pattern, working 28 shifts over an eight-week roster cycle. These employees work an average of 42 hours per week including work that would otherwise attract shift loadings and overtime payments through a combination of three and four 12 hour shifts per week. The Commissioner helpfully summarised the arrangement as follows:[1]
Over an 8-week roster cycle, shift workers work 336 rostered hours, accrue 16 hours toward rostered days off and are paid for 432 ordinary hours. The calculation goes thus:
1. Of the 336 hours worked by employees on the roster cycle, 240 are treated as ordinary hours and 96 are treated as double time (rostered weekend work and overtime).
2. 96 hours at double time is the equivalent of 192 hours at ordinary time.
3. Adding 240 ordinary hours to the nominal 192 hours results in a total of 432 hours to be paid at the ordinary rate for each 8-week roster cycle.
4. Dividing 432 by 8 arrives at a weekly average of 54 hours’ pay over the roster cycle.
5. Dividing 336 by 8 arrives at a weekly average of 42 hours’ work over the roster cycle.
As a matter of fact, the shift workers work a roster pattern of three rotations over a 28 day cycle which is as follows:
(a)Rotation 1 – 5 days on and 4 days off (60 hours over 9 days);
(b)Rotation 2 – 4 days on and 5 days off (48 hours over 9 days); and
(c)Rotation 3 – 5 days on and 5 days off (60 hours over 10 days).
As the Commissioner explained, in each week employees are paid the equivalent of 54 hours at the ordinary hourly rate of pay for their classification taking into account loadings and overtime payments. Employees also accrue 2 hours per week towards a rostered day off. Payslips issued each week by Manildra show 54 hours pay at the base rate.
Annual leave is then dealt with in clause 32 which is at the heart of the dispute between the parties. Clause 32 of the Agreement is set out in full in Annexure A to this decision. In overview, clause 32.1 provides that day work employees shall be entitled to 152 hours of annual leave, and clause 32.2 provides that 12 hour shift employees shall be entitled to 190 hours of annual leave each year. The rates at which annual leave is paid for both day workers and shift workers is then dealt with in clause 32.3 in the following terms:
32.3 An employee,
32.3.1 who is an existing employee as at 1 January 2012, upon taking of annual leave, shall be paid an averaged rate equal to the last financial year’s (1 July - 30 June) gross earnings;
(a)For the avoidance of doubt, the annual leave rate is worked out using the following formula:
1. Gross earnings excluding annual leave payments and extra ordinary payments;
2. The number of weeks of annual leave taken by an employee subtracted from 52;
3. Gross dollar figure from step l divided by the nett weeks remaining from step 2;
4. The figure from step 3 divided by 38;
Extraordinary payments include, but are not limited, to cashed in RDO’s, cashed in annual leave, bonus payments for sick leave; or,
(b)paid in addition to their classified rate a 28% loading.
Provided that the employee shall be paid at the highest rate above, but not both.
32.3.2 who is employed after 1 January 2012, upon taking of annual leave, shall be paid, excluding overtime;
(a)the wages worked out on the basis of what the employee would have been paid under this agreement for working the hours during the period of annual leave, including allowances, loadings and penalties paid for all purposes of the agreement, first aid allowance and any other wages payable under the employees contract of employment; or
(b)paid in addition to their classified rate a 28% loading.
Provide that the employee shall be paid at the highest rate above, but not both.
The rate at which annual leave is paid varies between persons employed as at 1 January 2012 and those who were employed after 1 January 2012. The Commissioner described the effect of clause 32.3 as follows:
[15] Clause 32.3 sets out how payment for annual leave is to be calculated. It operates in place of what might be described as the standard approach to annual leave loading, such as that found in two of the three underlying modern awards. The interrelationship between annual leave loading and clause 32.3 is both apparent on its terms and from the last sentence of clause 32.2 immediately above.
[16] To ameliorate the potential for lost earnings during annual leave, clause 32.3 sets the agreed methods for calculating an employee’s rate of pay for the purpose of annual leave depending on their circumstances. At a minimum, employees are to be paid at their “classified rate” plus a 28% loading. However, an employee might be entitled to a higher amount if the agreed calculation method works in their favour.
[17] For employees employed on or before 1 January 2012, the calculation is made by reference to average gross earnings over the last financial year.
[18] For employees employed after 1 January 2012, the calculation is made by reference to what the employee would have earned during the period of leave excluding unrostered overtime…
Clause 32.4 provides that annual leave shall be given and taken in accordance with the Annual Holidays Act 1944 (NSW) provided that this results in a better outcome than under the Act. Clause 32.5 provides additional annual leave for day workers who work ordinary hours on Sundays and public holidays as part of a continuous roster.
Clause 32.6 then deals with the taking of annual leave for shift workers in the following terms:
32.6 Taking of annual leave for shift workers – shift workers will take annual leave in periods of one shift rotation within one pay week (‘Block’). Annual leave taken in a Block will be deducted at 38 hours and paid at 54 hours at the rate of pay set out in clause 32.3 above. If annual leave is taken for a period of less than a Block, it must be taken on a shift by shift basis and can not be less than 12 hours per shift.
For any approved leave taken by an employee the calculation is as follows:
PAYMENT DEDUCTION Full week shift block
Weekday shifts
Weekend shifts54 hours
12 hours
18 or 24 hours38 hours
12 hours
Minimum 12 hours
The Commissioner described the effect of clause 32.6:
[22] … clause 32.6 is about how shift workers take annual leave. Generally, shift workers are to take annual leave in one-week blocks. When they do, they are to be paid the rate of pay prescribed by clause 32.3 above. Each week of leave reduces their annual leave entitlement by 38 hours. If a shift worker takes annual leave of less than one week, a minimum of 12 hours is both to be taken and deducted from the employee’s accrued annual leave balance.
The essential dispute that remains is whether, when a shift worker takes a one-week block of annual leave, clause 32.6 requires that the employee be paid 54 hours at the rate calculated in accordance with clause 32.3 or 38 hours at that rate.
The decision of the Commissioner
In advance of the hearing of the dispute, the parties submitted a list of five questions that they requested the Commission to determine in arbitration of the dispute. Questions 1 to 3 were resolved as between the parties shortly before the hearing, including as to the meaning of the phrase “classified rate” in clause 32.3.1(b) and 32.3.2(b). Although the expression is not defined, the parties agreed that the expression “classified rate” is the hourly rate listed in an employee’s classification in the relevant Appendix to the Agreement.
The remaining questions were questions 4 and 5 which were in the following terms:
Payment of block leave for shift workers
4. How is the rate of pay for annual leave calculated pursuant to each of the following clauses:
a. Clause 32.3.1(a);
b. Clause 32.3.2(a);
c. Clause 32.3.1(b);
d. Clause 32.3.2(b).5. In determining the amount to be paid to a shiftworker under each of the clauses referred to above for annual leave taken, does clause 32.6 require the rate payable to be multiplied by 54 or 38?
The answers given by the Commissioner to those questions were set out at the outset of the decision in the following terms:[2]
Question 4(a): How is the rate of pay for annual leave calculated pursuant to clause 32.3.1(a) of the Agreement?
Answer: The rate of pay for annual leave in clause 32.3.1(a) of the Agreement is calculated by following these steps:
Step 1: Calculate gross annual earnings for the previous financial year and deduct any amounts paid as annual leave, cashed in RDOs, cashed in annual leave, sick leave bonus payments and any other “extraordinary payments”.
Step 2: Deduct the number of weeks of annual leave taken by an employee in the previous financial year from 52.
Step 3: Divide the amount calculated in Step 1 by the number of weeks calculated in Step 2.
Step 4: Divide the amount calculated in Step 3 by 38. This gives an averaged gross hourly rate.
Step 5: Calculate the loaded classified rate in accordance with clause 32.3.1(b) (see answer to Question 4(c) below).
Step 6: Compare the hourly rates ascertained by Steps 4 and 5. The higher of the two is the hourly rate of pay for annual leave. Use this rate for single days of annual leave.
Step 7: Multiply the higher rate of pay (see Step 6) by 38 to obtain the weekly rate of pay for annual leave. Use this rate for one-week blocks of annual leave.Question 4(b): How is the rate of pay for annual leave calculated pursuant to clause 32.3.2(a) of the Agreement?
Answer: The rate of pay for annual leave in clause 32.3.2(a) is calculated by following these steps:
Step 1: Add the amounts the employee would have been paid if they had worked during the period of their annual leave, including:
a. all-purpose allowances,
b. loadings paid for all purposes of the Agreement,
c. penalties paid for all purposes of the Agreement,
d. first aid allowance, and
e. any other wages payable under the employee’s contract of employment for work in the period of annual leave.
Step 2: From the amount calculated in Step 1, deduct any overtime that would have been worked in the same period (but do not deduct rostered overtime that forms part of the shift worker’s ordinary 12-hour shift roster).
Step 3: Compare the amount calculated in Step 2 with the rate calculated in accordance with clause 32.3.2(b) (classified rate multiplied by 128% multiplied by the number of rostered working hours in the annual leave period) (see answer to Question 4(d) below). The higher of the two amounts is payable for the annual leave period.Question 4(c): How is the rate of pay for annual leave calculated pursuant to clause 32.3.1(b) of the Agreement?
Answer: Multiply the employee’s “classified rate” by 128%. To enable an appropriate comparator with the rate of pay in clause 32.3.1(a), use the hourly “classified rate” for the employee.
Question 4(d): How is the rate of pay for annual leave calculated pursuant to clause 32.3.2(b) of the Agreement?
Answer: Multiply the employee’s “classified rate” by 128%. To enable an appropriate comparator with the rate of pay in clause 32.3.2(a), use the classified rate that corresponds to the amount of leave taken. That is, for a single day of leave, use the hourly classified rate. For a one-week block of leave, use the weekly classified rate.
Question 5: In determining the amount to be paid to a shift worker under each of the clauses referred to above for annual leave taken, does clause 32.6 require the rate payable to be multiplied by 54 or 38?
Answer: Neither. Clause 32.6 does not contain a relevant multiplier. The rate of pay for annual leave is prescribed by clause 32.3.
The central issue is whether employees working a 12-hour shift roster are entitled to receive 38 or 54 hours pay at the hourly rates calculated under clause 32.3 when taking a one-week block of annual leave. That dispute centred on the phrase “paid at 54 hours” in clause 32.6 of the Agreement.
The Commissioner found, against the submissions of the Unions, that when shiftworkers take a one-week block of leave Manildra must pay 38 hours pay at the rates set by clause 32.3, rather than 54 hours pay at that hourly rate. As to the phrase “paid at”, the Commissioner observed:
[25] The CEPU and the AMWU submit that the words “paid at” in clause 32.6 should be read as “multiplied by”. However, the phrase “paid at” is used multiple times throughout the Agreement, in clauses 12.1(d), 14.3.2, 19.1, 19.3(b), 20, 21.1(a), 21.2(h), 30.2, 32.3, 32.6, 41.2, 41.3 and 42. In each case, the phrase is used to set a rate of pay for an entitlement, either a specified rate (“the classified rate”) or a penalty rate (“double time”).
[26] The meaning of “paid at 54 hours” becomes apparent when regard is had to the roster cycle for shift workers set out in clause 12.2 of the Agreement. In short, for each week in the roster cycle, shift workers are paid an amount equivalent to 54 hours at single time. They separately accrue 2 hours per week toward a rostered day off (clause 37.2), giving a total reward for each week of the roster cycle equivalent to 56 hours’ pay.
The Commissioner’s reasoning continued:
[29] When the terms of the Agreement are read as a whole, the phrase “paid at 54 hours” in clause 32.6 of the Agreement is simply a reference to the ‘rolled up’ average weekly rate of pay for shift workers which factors for 54 hours at single time. Or put another way, it is the ‘54 hour rate’. Clause 32.6 does not require any independent multiplication of rates of pay for annual leave. Although the 54-hour rate underpins the calculation of annual leave for shift workers, their rate of pay for annual leave is calculated using the relevant formula in clause 32.3 of the Agreement.
[30] Apart from not being consonant with the text of the Agreement, reading “paid at 54 hours” as “multiplied by 54” is inconsistent with the settled approach to interpretation of enterprise agreements. It leads to the unlikely result that despite having gone to some lengths to prescribe the formula for calculating annual leave rates of pay in clause 32.3 of the Agreement, rates derived from applying those formulas are only the starting point and are then to be multiplied again.
[31] There is also no apparent rationale for reading into the Agreement a second 54-hour multiplier on rates of pay already loaded to compensate for work of up to 54 hours per week. Such an approach could have the absurd result (at least in relation to clause 32.3.2(a)) that an employee would be entitled to be paid 54 times their average weekly rate of pay for each week of annual leave.
In short, the Commissioner reasoned that the reference to annual leave for a shift worker who takes a block of leave being “paid at 54 hours” in clause 32.6 is explanatory of the basis upon which shift workers are remunerated in accordance with clause 12.2. The Commissioner concluded that clause 32.6 does not require that employees be paid 54 times the hourly rate determined in accordance with clause 32.3.
After the Commissioner handed down her decision, Manildra applied for the Commission to vary the decision under ss 602 or 603 of the Act to correct an obvious error, defect or irregularity. The subject of the application was the answer given to question 4(d). Manildra sought that the Commissioner vary the decision to replace the words “weekly classified rate” in the final sentence of the answer to question 4(d) with the words “hourly classified rate multiplied by 38”.[3] The Commissioner accepted the decision was affected by an obvious error and that it should be corrected, but did not accept the solution proposed by Manildra.[4]
The Commissioner separately issued an order having the effect of replacing the answer given to question 4(d) in her original decision with the following:
Question 4(d): How is the rate of pay for annual leave calculated pursuant to clause 32.3.2(b) of the Agreement?
Answer: Multiply the employee’s “classified rate” by 128%. To enable an appropriate comparator with the rate of pay in clause 32.3.2(a), then multiply this amount by the number of rostered working hours in the annual leave period.
As will be apparent, the Commissioner did not agree with the position of either of the parties to the dispute. In particular, the Commissioner did not agree that the amount to be paid to a shift worker with respect to annual leave was determined by multiplying the rate determined in accordance with clause 32.3 with either 54 hours or 38 hours. The Commissioner concluded that the amount to be paid with respect to a period of annual leave was determined by deriving an hourly rate using one of the formulas in clause 32.3 and the number of rostered working hours in the annual leave period.
Permission to appeal and approach on appeal
The ordinary position under s 604 of the Act is that a person aggrieved by a decision of the Commission may only appeal with permission. However, when dealing with a dispute pursuant to a dispute settlement procedure in an enterprise agreement, the Commission is dealing with the matter by way of private arbitration. The nature and extent of the function to be undertaken by the Commission is determined by the agreement of the parties, including the availability and nature of any appeal. The parties may agree that there will be a right of appeal or remove or modify the requirements ordinarily applicable to an appeal under s 604 of the Act, including the need for permission to appeal to be obtained.[5]
Whether permission to appeal is required depends on the proper construction of the provision conferring jurisdiction on the Commission. If the agreement is silent as to the nature or availability of an appeal, it is generally assumed that the parties intended to take the Commission as they find it such that the usual appeal procedures applicable to a decision of the Commission are to be applied.[6] For example, in Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union v ALS Industrial Australia Pty Ltd [2015] FCAFC 123; (2015) 235 FCR 305, the Full Court concluded that a simple reference to a dispute being subject of “arbitration” by the Commission should be construed as including the appellate process identified in s 604 of the Act.[7]
The same conclusion follows in this matter. Stage 4 of the process set out in clause 28.3(e) of the Agreement provides that “[i]f the matter remains unresolved it shall be referred to Fair Work Australia for conciliation in accordance with the Fair Work Act 2009” and that “[i]f the matter still remains unresolved either party can request arbitration”. The reference to a request for arbitration should be understood to incorporate the usual processes and powers of the Commission to resolve the dispute, including the availability of an appeal to the Full Bench under s 604 subject to the usual requirement to seek permission to appeal.
Appeals under s 604 of the Act can only proceed with the Commission’s permission. The Commission has a broad discretion in determining whether or not permission to appeal should be granted. However, the Commission is required by s 604(2) to grant permission where it is in the public interest to do so. A Full Bench of the Commission in Cole v The Commissioner for Public Employment, Office Commission Public Employment[2023] FWCFB 35 recently restated the principles relating to the public interest test for permission to appeal at [19]:
The task of assessing whether the public interest test is met is a discretionary one involving a broad value judgment. Some of the considerations that may attract the public interest are where a matter raises issues of importance and general application, or there is a diversity of decisions at first instance so that appellate guidance is required, or where the decision at first instance manifests an injustice, or the result is counter intuitive, or the legal principles applied appear disharmonious when compared with other recent decisions dealing with similar matters. It will rarely be appropriate to grant permission to appeal unless an arguable case of appealable error is demonstrated. However, the fact that the member at first instance made an error is not necessarily a sufficient basis for the grant of permission to appeal.
Irrespective of the nature of the decision under appeal, the appeal is by way of rehearing and the Full Bench is only able to exercise its powers where it identifies some error on the part of the primary decision-maker.[8] The decision in this matter concerns the proper construction of the Agreement. The decision did not involve the exercise of discretion. The answer given by the Commissioner to the proper construction of the Agreement is either correct or incorrect. In this regard the appeal is to be determined by the “correctness standard” such that, if permission to appeal is granted, the question on appeal is simply whether the construction adopted by the Commissioner is correct.[9]
We have determined it is appropriate to grant permission to appeal with respect to ground 4 in the notice of appeal. Ground 4 raises the question as to the proper construction of the Agreement as to the payments required to be made to shift workers when taking annual leave. That dispute raises a question as to an important entitlement for a sizable number of employees of Manildra and has substantial financial implications for the company. The clauses of the Agreement that are at issue are, to say the least, ambiguous in their terms and unclear in their intent. The Unions have an arguable case on appeal. We also note that, on appeal, Manildra proposes answers to the questions posed by the parties which depart, in some respects, from the answers given by the Commissioner. In our opinion, it is appropriate for permission to appeal to be granted with respect to ground 4.
We have formed a different view as to grounds 1 to 3. Grounds 1 to 3 allege that the parties were denied procedural fairness by reason of the Commissioner adopting a construction of the Agreement that departed from the submissions put by either party. The Commission is, in relation to a question of construction, not required to adopt the position put by either party so long as the parties are afforded procedural fairness. We are not convinced there was a denial of procedural fairness in this matter. The alternative construction considered by the Commissioner was available on the basis of the submissions advanced by the parties. Furthermore, there is no utility in permission to appeal being granted to examine the question. The Unions have had a full opportunity to present whatever argument they wish to advance on appeal. In circumstances in which the Full Bench will determine the question of construction raised, any denial of procedural fairness at first instance (if it occurred) is of no moment. Counsel for the Unions properly conceded at the hearing of the appeal that the Full Bench did not need to deal with the procedural fairness appeal grounds any further. Permission to appeal is refused with respect to grounds 1 to 3.
Construction of the Agreement
The true complaint in the appeal proceedings is the Unions’ contention that the Commissioner failed to apply established principles of interpretation and, as a result, misconstrued the Agreement. The Unions submit that clause 32.3 determines the rate of pay for annual leave and clause 32.6 requires that, for shift workers, this rate be multiplied by 54 in respect of a one week block of leave.
The Unions said that the words of clause 32.6 are “clear enough on their face”. The Unions submit that the clause ensures that shift workers, who accrue on a notional 38-hour week, get five actual weeks of leave without loss of pay. The Unions submit that an interpretation of clause 32.3 that leads to an outcome whereby employees might earn more than what they would have earned if they had not taken leave is completely unsurprising. The provisions of 32.3 are not, the Unions say, directed at paying employees at their base rate when they go on leave, nor are they directed at paying employees “as if you are here”. For employees who commenced before 2012, clause 32.3.1 includes unrostered overtime payments.
At the appeal hearing, the Unions relied on spreadsheet calculations that were said to show, in monetary terms, the difference between the Unions’ construction, the Commissioner’s findings and the methodology historically applied by Manildra. The Unions argued by reference to the spreadsheets that it was dangerous to regard the differential as a “big number” or a “windfall” because it is a more complicated proposition than that. As we understand it, the Unions relied upon the spreadsheet calculations to demonstrate the potential consequences of the different constructions. More specifically, the spreadsheet was intended to demonstrate that, in some circumstances at least, the construction adopted by the Commissioner could result in a shift worker receiving less when on annual leave than when attending work.
The Unions also submitted that clause 32.6 did not require Manildra to pay a loading on a loading because clause 32.3 creates a notional hourly rate applicable for 38 ordinary hours that factors in extraordinary payments such as overtime and loadings, and that clause 32.6 merely provides an additional multiplier when taking leave, as is its purpose. The Unions argued that a contrary interpretation would result in day workers receiving a 28 percent uplift when on annual leave that was not available to shift workers. The difference in treatment of day workers and shift workers was said to be a critical contextual factor given that clause 32.3 has application to both day workers and shift workers.
The Unions submitted that the Full Bench should uphold the appeal, quash the Commissioner’s decision, redetermine the dispute and adopt the following interpretation for each group as follows:
Dayworkers
Pre-2012
Where a pre-2012 dayworker takes annual leave, Manildra must:a. perform the calculation at 32.3.1(a) as explained by the Commissioner … above to calculate a notional hourly rate;
b. add 28% to the employee’s hourly classified rate as set out at Schedule D and E;
c. separately multiply both figures by the number of hours of leave to be taken; and
d. pay the employee the higher amount.Post-2012
Where a post-2012 dayworker takes annual leave, Manildra must:a. perform the calculation at 32.3.2(a) as explained by the Commissioner … above to calculate the entire amount the employee would have received if they had worked;
b. add 28% to the employee’s hourly classified rate as set out at Schedule D and E, and multiply that figure by the number of hours of leave taken; and
c. pay the employee the higher amount.Shiftworkers
Pre-2012
Where a pre-2012 shiftworker takes a period of annual leave, Manildra must:a. perform the calculation at 32.3.1(a) as explained by the Commissioner … above to calculate a notional hourly rate;
b. add 28% to the employee’s hourly classified rate as set out at Schedule D and E;
c. separately multiply both figures by:i.where a Block is taken, 54; and
ii.where a shift is taken, 12, 18 or 24 hours as appropriate; and
d. d. pay the employee the higher amount.
Post-2012
Where a post-2012 shiftworker takes a period of annual leave, Manildra must:a. perform the calculation at 32.3.2(a) as explained by the Commissioner … to calculate the entire amount the employee would have received if they had worked;
b. add 28% to the employee’s hourly classified rate as set out at Schedule D and E, and multiply that figure by:i.where a Block is taken, 54; and
ii.where a shift is taken, 12, 18 or 24 hours as appropriate; and
c. pay the employee the higher amount.
[Emphasis added]
Manildra submits its employees are familiar with being paid by reference to 54 hours of work at the hourly base rate of pay even though they do not perform 54 hours of work. Manildra said that the Commissioner correctly read the Agreement as a whole and avoided a narrow or pedantic interpretation of clause 32.6 that would have led to an absurd outcome. In this regard Manildra submitted:
The Commission’s reference to “rolled up average weekly rate of pay” (with which the Unions take issue) is plainly a reference to the fact that shift workers receive an average weekly pay that is calculated by reference to single time, double time and rostered overtime as set out in clause 12.2 of the 2022 Agreement. The reference to “single time” is a reference to the ordinary or “classified rate”.
Thus, there was no error in the Commission’s application of the principles of construction and, as explained below, the Commission’s construction of the relevant clause of the 2022 Agreement was correct.
Manildra further submitted:
… When read together, clause 32.3 calculates an inflated rate of pay that includes penalties and allowances and is based on 38 hours in the context of the payroll which the number of hours paid are the same as the number of hours deducted, and clause 32.6 explains that while only 38 hours of annual leave is deducted, employees are still being paid 54 hours at their base rate of pay …
The context and industrial realities … make it clear that the intention of the parties in referring to “paid at 54 hours” was to confirm that while only 38 hours are deducted for annual leave the payment is equivalent to 54 hours at the base rate of pay.
At the hearing of the appeal, Manildra emphasised that the purpose of clause 32.3 is to create an inflated rate that takes into account the various allowances and penalties that an employee ordinarily receives in a working week. For shift workers, the purpose of clause 32.3 was said by Manildra to apply a “pay as if you are here” approach. Manildra said the words “deducted at 38 hours and paid at 54 hours at the rate of pay set out in clause 32.3 above” is a reference back to the calculation at 32.3 and the rate of pay for one-week of annual leave that is the equivalent to 54 hours pay.
Manildra argues that the purpose of clause 32.6 is to explain how annual leave is to be taken (as evidenced by the opening words of the clause), including that the leave can be taken as a block or as a shift, how much leave is to be deducted and to explain what is the equivalent in pay as if the employee were at work. It says that clause 32.6 clarifies that if an employee takes annual leave they are paid as if they had worked, which is consistent with the 54 hours pay seen on payslips. On appeal, Manildra ultimately submits that, when a shift worker takes a one week block of leave, the employee will be paid 54 hours at the employee’s classified or base rate so as to reflect 128 percent of the base rate for 42 average hours worked by a shift worker.
Consideration
There is no substantial dispute between the parties in relation to the principles to be applied in the interpretation of the Agreement. The principles of interpretation of enterprise agreements are, at least stated in sufficiently general terms, well established.[10]
In summary, the starting point is the ordinary meaning of the words, read as a whole and in context. Context may be found in the provisions of the entire enterprise agreement, or in the arrangement and place of the words in the enterprise agreement and may extend to other documents with which there is an association. The statutory framework under which the enterprise agreement is made or in which it operates may also provide context, as might an antecedent instrument or instruments from which a particular provision or provisions might have been derived. The industrial context in which an agreement is made and operates is relevant, as is the evident purpose of the provisions or expressions being construed. A purposive approach is preferred to a narrow or pedantic approach, as such documents “are not always drafted carefully by lawyers or professional drafters” and the framers of the agreement may not have paid attention to “legal niceties and jargon”.[11] However, the task remains one of interpreting the document, and not to give effect to some anteriorly derived notion of what would be fair or just, regardless of what has been written into the instrument or what the Commission might consider to be the preferrable outcome.[12]
In this matter, the task of construction is hampered by the language of the Agreement. The critical terms of the Agreement at issue are poorly drafted. The Agreement does not define key terms that are used, and the language used throughout the Agreement is far from consistent. Although it is commonly appropriate to commence the task of construction by an examination of the ordinary meaning of the language used in the relevant parts of an instrument, these features of the Agreement make it difficult to rely upon a literal reading of individual clauses. This is a case in which an overly literal reading of the individual clauses is liable to mislead as to their proper interpretation. The task is also complicated by the fact that we have concluded that the position advanced by neither of the parties at first instance is correct and tended to distract from the correct construction. Furthermore, no interpretation produces an outcome that is entirely satisfactory or free from incongruities or inconsistencies.
There is some attraction in the submission of the Unions that the language of clause 32.6, in setting out the circumstances in which annual leave can be taken by shift workers, and the number of hours deducted and paid when annual leave is taken, is intractable. Clause 32.6 says, in so many words, that when a one week block of leave is taken it “will be deducted at 38 hours and paid at 54 hours at the rate of pay set out in clause 32.3 above”. Read in isolation, the clause strongly suggests that, when a shift worker takes a one week block of leave, 38 hours is deducted from their leave balance and the worker is to be paid 54 times the rate determined in accordance with either clause 32.3.1 (for employees who commenced employment before 1 January 2012) or clause 32.3.2 (for employees who commenced employment after 1 January 2012). However, we have ultimately concluded that an appreciation of the context of the Agreement as a whole, and the evidence as to the circumstances at the workplace, do not support that interpretation.
Firstly, clauses 32.1 and 32.2 make clear that annual leave is accrued and taken on an hourly basis, that is, a day worker accrues 152 hours of leave, and a shift worker accrues 190 hours of leave. Clause 32.3 then provides the mechanism for determining the hourly rate of pay to be paid to an employee when the employee takes an hour of leave. In short, the hourly rate of pay to be paid to an employee is either 128 percent of the base hourly rate or, if higher, the amount of averaged actual earnings or wages as if the employee would have been paid for working during the period of annual leave. In broad summary, the intent of the clause is that an employee will receive the same hourly rate for each hour of leave as if the employee worked during the period of leave or at least 128 percent of their base rate of pay. The outcome contended for by the Unions is inconsistent with that structure and would, at least with respect to an employee who commenced after 2012, result in the employee receiving an hourly rate when taking a block of leave well in excess of both actual earnings and 128 percent of the base rate. We think that is unlikely to have been intended.
Secondly, the principal function of clause 32.6 is indicated by the introductory words “Taking of annual leave for shift workers”. The clause is primarily concerned with dictating the manner in which shift workers can take annual leave. In that respect, it provides that the ordinary expectation is that shift workers will take annual leave in a block constituted by a period of one shift rotation within one week. The clause provides an incentive for employees to take annual leave in that manner by providing that only 38 hours of leave will be deducted even though the average actual working hours of the employee in the period will be 42 hours. In contrast, if the employee takes annual leave on a weekday shift by shift basis, the employee will have 12 hours of leave deducted which reflects the 12 hours of work that would have been performed on the shift. As such, the primary function of clause 32.6 is not to determine the rate of pay when leave is taken but the pattern of leave and the amount of the deduction from an employee’s leave balance which will occur when leave is taken.
Thirdly, the language of clause 32.6 is not so intractable as to not be amenable to any interpretation other than that contended for by the Unions. Although clause 32.6 indicates that a block of annual leave will be “paid at 54 hours at the rate of pay set out in clause 32.3 above”, that does not necessarily mean that the amount to be paid with respect to the block of leave is 54 multiplied by the rate determined in accordance with clause 32.3. The clause can be understood to be indicating that the rate of pay in clause 32.3 will, for shift workers, be calculated on the basis of 54 hours at an employee’s base rate for one week of leave. As the Commissioner observed, the reference to “paid at 54 hours at the rate of pay set out in clause 32.3” is capable of being understood as explanatory of the basis upon which the rate is calculated for most shift workers rather than as dictating a further multiplier.
In that respect, the context provided by the hours of work provision is important. The foundation of the working arrangements for shift workers is that a 12-hour shift worker works an average of 42 hours per week and receives the equivalent of 54 hours pay at the base rate each week. Clause 12.2(a) sets out the pattern of working hours. Clause 12.2(b) requires that remuneration for 12-hour shift workers must be averaged over the eight week roster cycle so that each employee receives payment of 56 hours per week. In practice, shift workers receive payment of 54 hours per week at their base rate plus two hours per week which accrue towards a rostered day off (in accordance with clauses 12.2(c) and 37.2). The consequence is that, when a shift worker takes one week of leave, the amount the employee would have received that week, had the period been worked, would be 54 hours at the base rate of pay. That amount is equal to 128 percent of the base rate for the 42 hours which represents the averaged hours of work for the week. The fact that payment of 54 hours at base rate for working an average of 42 hours is equal to the loaded 128% rate in clause 32.3.1(b) and 32.3.2(b) strongly suggests that the reference to 54 hours in clause 32.6 is explanatory rather than a further multiplier.
Fourthly, the history of the provisions does not suggest that it is likely to have been intended that, when a shift worker takes a block of leave, the employee would be paid an amount calculated by multiplying the already inflated rate in clause 32.3 by 54. The immediately preceding enterprise agreement was the Manildra Bomaderry Site Agreement 2018 (the 2018 Agreement). In the 2018 Agreement, annual leave was dealt with in clause 32. Clauses 32.1 to 32.5 were in substantially the same terms as in the current Agreement except that the calculation required in clause 32.3.1(a) has been altered. The hours of work for shift workers were again dealt with in clause 12.2. Clause 12.2(a), (b) and (c) of the 2018 Agreement were to the same effect as clause 12.2(a) and (b) of the current Agreement. However, clause 12.2(d) made provision for the payment of shift workers on annual leave. Clause 12.2 of the 2018 Agreement provided:
12.2 12 hour shift work - ordinary hours
(a) The twelve (1 2) hour shift roster comprises an eight week cycle of twenty eight twelve hour shifts, as detailed below:
• Four weeks of 4 x 12 hour shifts per week;
• Four weeks of 3 x 12 hour shifts per week;(b) The remuneration to an employee shall be averaged over the eight week cycle so that an employee receives payment of 56 hours per week.
(c) The average weekly pay is calculated as follows from an eight (8) week cycle:
• Hours at single time 240 ordinary hours / 8 = 30 hours/week.
• Weekend Hours at double time 80 x 2 / 8 = 20 hours/week
• Rostered overtime 16 x 2/8 = 4 hours/week
• Single time hours for the two 21st shifts 16/8 = 2 hours/week.(d) For any approved leave taken by an employee the calculation is as follows:
DEDUCTION PAYMENT•Full week shift cycle 56 hours 38 hours
•Weekday shifts Single time Single time
•Weekend shifts Double time Single time
•Public Holidays Double time Single time
To confuse matters further, the headings “DEDUCTION” and “PAYMENT” in clause 12.2(d) have been, in error, inverted so they appear above the wrong column. Nonetheless, it is reasonably apparent that the intention is that, when a shift worker takes a block of leave it is taken at 56 hours at the worker’s base rate. That is clear in circumstances in which clause 12.2(d) immediately followed clause 12.2(b) and (c) which determine the remuneration to be received each week by a shift worker by determining a number of hours of pay at ordinary rates being 56 hours. In that context, it is unlikely that, by moving the provision dealing with the payment of shift workers on annual leave from clause 12.2(d) to clause 32.6, a dramatic change to the entitlement was intended.
Fifthly, it must be acknowledged that the construction which we favour may result in some surprising and perhaps inequitable outcomes. For example, the consequence of the calculation required by either clause 32.3.1 or 32.3.2 will produce an hourly rate for some employees in excess of what they would have received had they performed work in the leave period. In particular, a day worker who works hours which do not attract allowances, loadings or other penalties will receive 128 percent of their usual rate when on leave whereas a shift worker will receive the usual pay that would have been received had they performed work. On one view that appears surprising. However, the potential for that outcome is inherent in the comparison required by clause 32.3.1 and 32.3.2. The rate determined by clause 32.3.1 and 32.3.2 is the higher of 128 percent of an employee’s base rate and either the average of all earnings or the amount that would have been paid for working the hours. That provision will inevitably result in some employees getting more than they would have received had they worked and some receiving the same.
The spreadsheets provided by the Unions indicated that it is possible that the approach proposed by Manildra and adopted by the Commissioner could result in a shift worker receiving less when on annual leave than when working which is contrary to the intention of the provision. We agree that is not generally intended by the clause but is a potential outcome of the approach Manildra and the Commissioner adopted. For pre-2012 employees at least it is possible that, as a result of variations to the employee’s earnings over the 12 month averaging period, the rate derived from the calculation in clause 32.3.1(a) might be less than the employee would actually receive if the period of leave was worked. In our opinion, however, that potential outcome is not sufficient to determine the construction of the provisions. It is, again, a consequence of clause 32.3.1(a) operating on the basis of averaging gross earnings over a 12 month period. That provision is generally more beneficial to employees than the calculation in clause 32.3.1(b) but produces that possible incongruity.
For those reasons, we do not accept the submission of the Unions that the Commissioner erred in finding that clause 32.6 of the Agreement does not require employees to be paid 54 times the hourly rate determined in accordance with clause 32.3 when taking a block of leave. The arrangements regulated by the Agreement are complicated and the terms of clause 32 are far from perfect. The better view is that the provisions operate as follows:
(a)annual leave accruals are expressed in hours rather than weeks;
(b)annual leave is taken in hours;
(c)the hourly rate for each hour of taken annual leave is determined by clause 32.3;
(d)the way in which annual leave can and must be taken by shift workers is regulated by clause 32.6;
(e)shift workers must take annual leave in one-week blocks or on a shift-by-shift basis;
(f)when a 12-hour shift worker takes a block of annual leave 38 hours is deducted from their annual leave accrual;
(g)the 38 hours of annual leave is paid at the hourly rate determined by clause 32.3.1 or 32.3.2;
(h)workers engaged on 12-hour shifts work an average of 42 hours per week and must ordinarily be paid 54 hours at the base rate of pay per week;
(i)the hourly rates for annual leave determined by clause 32.3 are inflated to take into account the fact that 12-hour shift workers receive 54 hours pay each week as well as various allowances.
There is a further issue presented by the terms of clauses 32.3 and 32.6. It concerns questions 4(b) and 4(d) which deal with the method of calculating the hourly annual leave rate for post-2012 employees in clause 32.3.2. Clause 32.3.2(a) is problematic. Unlike clause 32.3.1(a), it does not set a divisor to be used to determine the hourly rate to be compared with the loaded rate in clause 32.3.2(b). The answers given by the Commissioner to questions 4(b) and 4(d), after the variation decision, indicated that comparison is to be made by multiplying the loaded hourly rate in clause 32.3.2(b) by the number of rostered working hours in the annual leave period. Neither party supported that approach on appeal. Manildra now says that the correct approach is to multiply the classified rate by 128 percent and then multiply by the “average number of rostered working hours in the annual leave period” to enable a comparison with the amount determined in accordance with clause 32.3.2(a). On appeal, counsel for the Unions submitted that this approach had no foundation in the clause and is a new invention.
Again, regrettably we think that neither approach is correct. To rationally apply clause 32.3.1 and 32.3.2, it is necessary to determine an hourly rate to be compared with 128% of the classified rate. Both clause 32.3.1(a) and (b) produce an hourly rate of which the highest rate is to be used. To produce an hourly rate in clause 32.3.2(a) it is necessary to determine the total amount the employee would have been paid for working the hours during the period of annual leave and then divide by a number to produce an hourly rate. Because the purpose of the exercise is to work out the rate to be paid for annual leave, we think the divisor is intended to be the number of hours of annual leave being taken. In case of a shift worker taking a block of leave, the number of hours is 38 hours.
The hourly rate then produced is compared with the classified or base rate plus 28 percent and the higher figure used. The higher hourly rate is then multiplied by the number of hours of leave being taken in the leave period. By using the number of hours of leave being deducted as the basis for calculating the hourly rate on leave, the provision ensures that an employee receives at least what they would have received had they performed work in the period excluding unrostered overtime. Alternatively, the employee is entitled to 128 percent of their classified or base rate multiplied by the number of hours of leave being taken. That approach appears to us to be the only rational and sensible operation that can be given to the terms of clause 32.
As will be apparent, we consider that the Commissioner generally construed the provisions of the Agreement correctly. However, both parties submitted that, in certain respects, the answers given by the Commissioner to the questions posed were not correct. As such, and to the extent indicated in this decision, it is necessary that the appeal be allowed, and that the decision of the Commissioner be varied in the answers given to questions 4 and 5 to reflect what we consider to be the correct construction of the Agreement. The answers we consider should be given to questions 4 and 5 are set out in Annexure B to this decision.
The Full Bench makes the following orders:
(a)Permission to appeal is granted;
(b)The appeal is allowed to the extent described in this decision; and
(c)The decisions of Commissioner McKinnon in [2024] FWC 1294 and [2024] FWC 2105 are varied so as to answer questions 4 and 5 posed by the parties as set out in Annexure B to this decision.
VICE PRESIDENT
Appearances:
L Saunders, of counsel, for the Unions.
A Moses SC and R Gall, of counsel, for the respondent.
Hearing details:
2024.
Sydney—Melbourne
August 14.
Annexure A
ANNUAL LEAVE
32.1 Day work employees shall be entitled to 152 hours annual leave.
32.2 Twelve (12) hour shift employees shall be entitled to 190 hours annual
leave. Where a shift worker is rostered off during a public holiday, that employee shall receive one extra day’s annual leave or payment in lieu thereof. This shall not attract annual leave loading in sub clause 32.3.
32.3 An employee,
32.3.1 who is an existing employee as at 1 January 2012, upon taking of annual leave, shall be paid an averaged rate equal to the last financial year’s (1 July - 30 June) gross earnings;
(d)For the avoidance of doubt, the annual leave rate is worked out using the following formula:
1.Gross earnings excluding annual leave payments and extra ordinary payments;
2.The number of weeks of annual leave taken by an employee subtracted from 52;
3.Gross dollar figure from step 1 divided by the nett weeks remaining from step 2;
4.The figure from step 3 divided by 38;
Extraordinary payments include, but are not limited, to cashed in RDO’s, cashed in annual leave, bonus payments for sick leave; or,
(e)paid in addition to their classified rate a 28% loading;
Provided that the employee shall be paid at the highest rate above, but not both.
32.3.2 who is employed after 1 January 2012, upon taking of annual leave, shall be paid, excluding overtime;
(a) the wages worked out on the basis of what the employee would have been paid under this agreement for working the hours during the period of annual leave, including allowances, loadings and penalties paid for all purposes of the agreement, first aid allowance and any other wages payable under the employees contract of employment; or
(b) paid in addition to their classified rate a 28% loading. Provide that the employee shall be paid at the highest rate above, but not both.
32.4 Annual leave shall be given and taken in accordance with the Annual Holidays Act 1944 (NSW), provided that this results in a better outcome than under the Fair Work Act 2009 (Cth) as amended, otherwise the Fair Work Act provisions apply.
32.5 A day work employee who works ordinary hours on Sundays and Public Holidays as part of a continuous roster shall be allowed an additional 38 hours of annual leave, provided the employee works the continuous roster for the entire year. An employee who works on a continuous roster for part of the year and on a non continuous roster for the remainder of the year shall be allowed additional leave calculated as a pro rata of 38 hours on the basis of the proportion of the year spent working the continuous roster to one year.
32.6 Taking of annual leave for shift workers – shift workers will take annual leave in periods of one shift rotation within one pay week (‘Block’). Annual leave taken in a Block will be deducted at 38 hours and paid at 54 hours at the rate of pay set out in clause 32.3 above. If annual leave is taken for period of less than a Block, it must be taken on a shift by shift basis and can not be less than 12 hours per shift.
For any approved leave taken by an employee the calculation is as follows:
PAYMENT DEDUCTION · Full week shift block 54 hours 38 hours · Weekday shifts 12 hours 12 hours · Weekend shifts 18 or 24 hours Minimum 12 hours
32.7 Employees will not accrue flexi-time whilst on annual leave.
Annexure B
QUESTION 4: HOW IS THE RATE OF PAY FOR ANNUAL LEAVE CALCULATED PURSUANT TO CLAUSES:
Question 4(a): How is the rate of pay for annual leave calculated pursuant to clause 32.3.1(a) of the Agreement?
1. The rate of pay for annual leave is calculated by determining an averaged rate equal to the last financial year’s gross earnings by performing the calculations in the formula as follows:
(a)Calculate gross annual earnings for the previous financial year and deduct any amounts paid as annual leave, cashed RDOs, cashed in annual leave, sick leave bonus payments and any other “extraordinary payments”.
(b)Deduct the number of weeks of annual leave taken by an employee in the previous financial year from 52.
(c)Divide the amount calculated in Step 1 by the number of weeks calculated in Step 2.
(d)Divide the amount calculated in Step 3 by 38.
2. This hourly rate is compared with the rate determined by clause 32.3.1(b) (set out below). The employee is paid at the highest rate but not both.
Question 4(b): How is the rate of pay for annual leave calculated pursuant to clause 32.3.2(a) of the Agreement?
3. The rate of pay for annual leave is calculated by determining the wages the employee would have been paid as if they had worked the period taken as annual leave but excluding non-rostered overtime. Divide the total amount by the number of hours of annual leave being taken during the leave period to produce an hourly rate.
4. This rate is compared with the rate determined by clause 32.3.2(b) (set out below). The employee is paid at the highest rate but not both.
Question 4(c): How is the rate of pay for annual leave calculated pursuant to clause 32.3.1(b) of the Agreement?
5. Multiply the employee’s “classified rate” by 128%. The employee’s “classified rate” is the rate under the column titled ‘hourly rate’ as contained in the relevant table within Appendix D or E as applicable.
6. This hourly rate is compared with the rate determined by clause 32.3.1(a) (set out above). The employee is paid at the highest rate but not both.
Question 4(d): How is the rate of pay for annual leave calculated pursuant to clause 32.3.2(b) of the Agreement?
7. Multiply the employee’s “classified rate” by 128%. The employee’s “classified rate” is the rate under the column titled “hourly rate” as contained in the relevant table within Appendix D or E as applicable.
8. This hourly rate is compared with the rate determined by clause 32.3.2(a) (set out above). The employee is paid at the highest rate but not both.
Question 5: In determining the amount to be paid to a shift worker under each of the clauses referred to above for annual leave taken, does clause 32.6 require the rate payable to be multiplied by 54 or 38?
9. Clause 32.6 provides that an employee has annual leave deducted at 38 hours for a full week shift and 12 hours for a single shift and the remainder of the clause is intended to explain the nature of the payments which will commonly be received.
10. The amount required to be paid to a shift worker who takes annual leave is calculated by multiplying the hourly rate determined in accordance with clause 32.3.1 (for employees employed prior to 1 January 2012) or clause 32.3.2 (for employees employed after 1 January 2012) by the number of hours of annual leave being taken.
[1] [2024] FWC 1294 at [28].
[2] [2024] FWC 1294 at [4].
[3] [2024] FWC 2105 at [7].
[4] [2024] FWC 2105 at [13]-[14].
[5] Health Services Union v Northern Health[2025] FWCFB 5 at [18], referring to, by way of example, Victoria Police Force v Police Federation of Australia [2009] AIRCFB 146; (2009) 178 IR 275 at [13]; PHI (International) Australia Pty Ltd T/A HNZ Australia Pty Ltd v Nash[2024] FWCFB 396 at [16].
[6] DP World Brisbane Pty Ltd v Maritime Union of Australia [2013] FWCFB 8557; (2013) 237 IR 180 at [47]-[48]; Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union v ALS Industrial Australia Pty Ltd [2015] FCAFC 123; (2015) 235 FCR 305 at [58]; Clinical Laboratories Pty Ltd T/A Australian Clinical Labs v Health Services Union[2024] FWCFB 296 at [15]-[16].
[7] Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union v ALS Industrial Australia Pty Ltd [2015] FCAFC 123; (2015) 235 FCR 305 at [58].
[8] Coal and Allied Operations Pty Ltd v Australian Industrial Relations Commission [2000] HCA 47; (2000) 203 CLR 194 at [14]-[17] (Gleeson CJ, Gaudron and Hayne JJ).
[9] Minister for Immigration and Border Protection v SZVFW [2018] HCA 30; (2018) 264 CLR 541 at [46] and [48]-[49] (Gageler J); Rail Commissioner v Rogers[2021] FWCFB 371 at [61]; FreshFood Management Services Pty Ltd v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union[2023] FWCFB 97 at [29]; Clinical Laboratories Pty Ltd T/A Australian Clinical Labs v Health Services Union[2024] FWCFB 296 at [18]; Health Services Union v Northern Health[2025] FWCFB 5 at [22].
[10] James Cook University v Ridd [2020] FCAFC 123, (2020) 278 FCR 566 at [65] and the authorities cited therein; WorkPac Pty Ltd v Skene (2018) 264 FCR 536, [2018] FCAFC 131 at [197] and the authorities cited therein.
[11] Kucks v CSR Ltd (1996) 66 IR 182 at 184 (Madgwick J); Ridd v James Cook University [2021] HCA 32;(2021) 274 CLR 495 at [17] (Kiefel CJ, Gageler, Keane, Gordon and Edelman JJ); Hempel (Wattyl) Australia Pty Ltd v United Workers’ Union [2024] FCAFC 298 at [64]-[66] (Rangiah, Snaden and Abraham JJ).
[12] City of Wanneroo v Holmes (1989) 30 IR 362 at 379 (French J).
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