Construction, Forestry and Maritime Employees Union v Goulburn Valley Laundry Service Pty Ltd
[2024] FWC 1500
•7 JUNE 2024
| [2024] FWC 1500 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.739—Dispute resolution
Construction, Forestry and Maritime Employees Union
v
Goulburn Valley Laundry Service Pty Ltd
(C2024/894)
| DEPUTY PRESIDENT COLMAN | MELBOURNE, 7 JUNE 2024 |
Dispute arising under a modern award – consent arbitration – distinction between overtime and shiftwork – whether a shift exists is a question of fact – dispute determined
The Construction, Forestry and Maritime Employees Union (CFMEU) has made an application under s 739 of the Fair Work Act 2009 (Act) and the dispute resolution procedure in clause 34 of the Dry Cleaning and Laundry Industry Award 2020 (Award). The application refers to the Commission a dispute about whether, as the CFMEU contends, two of its members employed by Goulburn Valley Laundry Service Pty Ltd (Goulburn Valley) are entitled to be paid shift rates pursuant to clauses 25.3 and 25.5 of the Award in respect of all time worked on Mondays, when they start work at 5.00am rather than 6.00am as on other days. Goulburn Valley contends that the shift rates are not payable because the employees are day workers, and says that they are entitled to payment of one hour of overtime for their early start on Mondays. The parties have agreed that the Commission should determine the dispute by arbitration and to be bound by its decision. I consider that consent arbitration is an appropriate means by which to resolve the dispute (see clause 34.6).
The relevant facts are not in dispute. Goulburn Valley is a laundry business. The two employees work in the ‘clean area’. The business operates on weekdays and overtime is occasionally worked on Saturdays. From January 2017 to December 2021, the working arrangements in the clean area were that a group of 19 employees worked from 6.00am to 2.06pm Monday to Friday (day shift), and a group of 17 employees worked from 2.00pm to 10.06pm Monday to Friday (afternoon shift). From April 2022, a night shift was added, whereby a group of 18 employees worked from 10.00pm to 6.06am Monday to Friday.
Over this time, the two employees, Sharon Hillier and Di Luh Ni, have worked 38 hours a week from Monday to Friday. On Mondays they have commenced work at 5.00am and ceased work at 1.06pm. From Tuesday to Friday they have started work at 6.00am and finished at 2.06pm. They take a thirty minute break. Each day they work 7.6 hours. The work that the two employees perform from 5.00am to 6.00am on Mondays involves setting up the work areas so that other employees can start work at 6.00am. This includes turning on, preparing and checking various machines and pieces of equipment, such as irons and folders. The payment that the two employees have received in respect of their work on Mondays has varied over the years. The information presented to the Commission related to Ms Hillier, but I understand that the circumstances of Ms Ni are the same. The payments have been as follows: from January 2017 to December 2021, they were paid overtime from 5.00am to 6.00am on Mondays, and ordinary time for the rest of the day; from April 2023 to April 2024 they were paid a shift loading of 115% for all time worked on Mondays.
The dispute that the CFMEU raised with Goulburn Valley concerned its failure to pay the two employees the penalty rates in clause 25.5 of the Award. This clause states that an employee in a laundry workplace who works a morning, afternoon or nightshift that does not continue for at least 5 successive mornings, afternoons or nights must be paid for the first 3 hours of each such shift at 150% of the hourly rate and at 200% for all other hours.
At the time the dispute arose, the employer was paying the two employees the 115% morning shift loading in accordance with clause 25.3 of the Award. After the dispute was raised however, Goulburn Valley reconsidered its view of how the Award applied to the two employees and concluded that in fact they were not shiftworkers but dayworkers, for whom clause 14.1 of the Award prescribes ordinary hours on weekdays from 6.00am to 6.00pm. This meant that in the company’s opinion, they were not entitled to the non-consecutive shift penalty under clause 25.5 that was claimed by the CFMEU, or the 115% shift loading they had been receiving in respect of their work on Mondays. Goulburn Valley said that the two employees were entitled to overtime payments for the one hour of work they performed outside of ordinary hours, from 5.00am to 6.00am on Mondays, which had been its view until April 2023.
Thus, what commenced as a dispute about the application of the non-successive shift penalty in clause 25.5 became a dispute about whether the two employees are shiftworkers. If they are, it is clear that the non-consecutive shift penalty in clause 25.5 applies. If they are not, they are not entitled to the loading in that clause or the shift loading in clause 25.3, and instead are to be paid one hour of overtime for the first hour of work on Mondays.
Clause 25 of the Award relevantly provides as follows:
“25. Shiftwork
25.1 Definitions
(a)Morning shift—dry cleaning means a shift commencing before 7.00 am and finishing after midday.
(b) Morning shift—laundry means a shift commencing before 6.00 am.
(c) Afternoon shift means a shift finishing after 6.00 pm and at or before midnight.
(d)Night shift means a shift finishing after midnight and at or before 8.00 am.
25.2Notwithstanding clause 26.3, a shiftworker means an employee who works an afternoon shift and/or night shift whether alternating with day work or not. Such an employee is a shiftworker for the purposes of the NES.
25.3An employee who works shiftwork must be paid 115% of the minimum hourly rate prescribed for the appropriate classification for each hour worked during a morning, afternoon or night shift.
25.4 An employee who works on a night shift which does not alternate with another shift or day work must be paid for each hour worked 130% of the minimum hourly rate prescribed for the appropriate classification.
25.5 An employee in a laundry workplace who works on any morning, afternoon or night shift which does not continue for at least 5 successive mornings, afternoons or nights in a 5 day workshop, or for at least 6 successive mornings, afternoons or nights in a 6 day workshop must be paid for the first 3 hours of each such shift at 150% of the minimum hourly rate. The remaining hours on each such shift must be paid at 200% of the minimum hourly rate.
25.6 An employee in a dry cleaning workplace who works on any morning, afternoon or night shift which does not continue for a period of 3 successive mornings, afternoons or nights will be paid 150% of the minimum hourly rate for the first 3 hours and then 200% of the minimum hourly rate for the remaining period worked on each occasion.”
Summary of the submissions
The CFMEU submitted that the two employees must be regarded as shiftworkers on Mondays because they commence work on a shift before 6.00am. The union said that they were therefore entitled to the 115% shift loading under clause 25.3, and because the Monday morning shift did not continue for 5 successive days, they were also entitled to the penalties in clause 25.5. The union contended that although the two employees are day workers from Tuesday to Friday, this had no bearing on whether they were shiftworkers on Mondays, as there was nothing in the Award to suggest that an employee could not be a shiftworker on one day and a day worker on another.
Goulburn Valley contended that the two employees were not shiftworkers but day workers, for whom ordinary hours of work under the Award can be from 6.00am to 6.00pm Monday to Friday, and that from 5.00am to 6.00am on Mondays they are entitled to overtime. It said that in order to be shiftworkers, it would need to be shown that the two employees were working on a shift. This was clear from clause 25, which speaks of employees ‘on any … shift’ and employees ‘working on a shift’. But in the present case there was no evidence of there being any such shift. Rather, the two employees were day workers who on one morning a week started work one hour early.
Goulburn Valley said that the ordinary meaning of the term ‘shift’ was a group of workers who do a job for a period of time. A shift was something more than the mere starting time or period of work of a particular employee. This was said to be consistent with the term’s industrial meaning which referred to an identifiable structure of operations whereby one group of employees continues the work of another group of employees in relays. In this case, the working arrangements of the two employees on Mondays did not meet this description.
Goulburn Valley further contended that in the hour of work from 5.00am to 6.00pm on Mondays, the work undertaken by the two employees is preparatory to day work, and that there was no work that preceded their work, which were factors that supported a conclusion that they were day workers. It said that the two employees attend the plant an hour early on the first day of the week to get the plant ready for day work and then proceed to work ordinary hours for the rest of that day. It said that the structure of the workplace bore out the ordinary and industrial meanings of the word ‘shift’. That structure was that there is an afternoon and a night shift, together with day work (or day shift), but there was no identifiable morning shift. The company said that it is generally known and understood in the workplace that there is a day, afternoon and night shift, but that there was no morning shift.
The company submitted that the Award maintained a clear distinction between day work in clause 14 and shiftwork in clause 15, which told against the union’s position. It further contended that, if the two employees were regarded as shiftworkers in this case, then any employees working overtime under clause 23.1 could also be regarded as shiftworkers when they worked hours that intersected with the relevant shift definitions. It said that it would not make sense to run an early morning shift simply to have employees turn the machines on each Monday, that the Award permitted a system of work whereby day workers worked an hour of overtime each Monday, and that this is the system that it had put in place.
Consideration
The question for determination by the Commission is whether the two employees are entitled to be paid as shiftworkers under clauses 25.3 and 25.5 of the Award in respect of all time worked on Mondays, when they commence work at 5.00am. This requires the Commission to ascertain the objective meaning of those clauses and apply them to the facts at issue. The principles that apply to the interpretation of awards are well-known and need not be restated.
Clause 25.3 states that ‘an employee who works shiftwork’ must be paid 115% of the minimum hourly rate for each hour worked during a morning, afternoon or night shift. Clause 25.1(b) defines ‘morning shift – laundry’ as a shift commencing before 6.00am. If the two employees work such a shift, they undertake ‘shiftwork’ and are entitled to the shift loading. They are also entitled to the non-consecutive shift loading in clause 25.5, because if they work a morning shift, it is clear that it does not continue for five consecutive days.
I agree with Goulburn Valley that in order for an employee to work shiftwork, there must be a ‘shift’. A shift is a set period of time that is worked by employees in a particular workplace, usually at times that include unsociable hours and therefore attract some kind of loading (although the expression ‘day shift’ tends to be used interchangeably with ‘day work’). A shift exists independently of an individual employee. However, that does not mean that a shift cannot be worked by a single worker. In small workplaces, it often is. I reject the company’s contention that a shift must by its nature relate to a group of workers. Further, what the company described in its written submissions as the industrial meaning of a shift, with employees working in ‘relays’, is only a subcategory of shiftwork, namely continuous shifts.
Whether a shift is in existence at a particular workplace is fundamentally a question of fact. In my view, the principal evidence for the existence of a shift is the fact that there are employees who work it. There may be other evidence, such as published rosters. But absent some provision to the contrary in an industrial instrument, whether a particular shift exists does not depend on the employer having designated certain work as constituting a shift. The reality of work being undertaken in a particular configuration will be centrally relevant.
In this case, Goulburn Valley operates an afternoon and a night shift, together with day work, which it refers to as a day shift. There are employees who are regularly required to work the afternoon and night shifts. They are shiftworkers. I do not see anything of significance that distinguishes the working arrangements of the two employees on Mondays from that of the employees who work afternoon and nightshift. True it is that on their other four days of work they are day workers. But the Award does not prevent an employee from working a combination of shiftwork and daywork. I do not consider that the Award’s distinction between daywork and shiftwork assists Goulburn Valley. For years, the two employees have started work at 5.00am on Mondays. This is their regular work. It is the start of their shift. The fact that it commences only one hour before the beginning of day work, and that no other work occurs before this, is beside the point. On the other hand, it is significant that they finish work an hour earlier than on the days when they work day shift. This tells against a conclusion that they are working day shift on Mondays with an hour of overtime. In my view it is irrelevant that in the first hour on Mondays they perform work that is preparatory to day work. The need for preparatory work is a good reason to run a morning shift. Further, I reject Goulburn Valley’s submission that the shift structure it describes (one with no morning shift) is generally known and understood in the workplace. There is no evidence of this. On the contrary, Goulburn Valley has adopted different approaches to the work in question, and in her statement, the human resource manager said that there has been ongoing confusion about how the two employees should be paid.
Shiftwork requires there to be a shift. Overtime involves work outside of ordinary hours. In this case, I find that as a matter of fact, there is a morning shift - laundry. It is a regular and predictable system of work. The two employees are deployed to work on it. This has been the case for years. On Mondays, they work this shift. They are not working additional hours or coming to work an hour early. On other days, they undertake day work. In my opinion, the longstanding regularity of the two employees’ working arrangements on Mondays is in keeping with a shift, rather than with hours worked outside of ordinary hours as overtime. The company does not call this a shift. But the proper designation of work under the Award does not depend on the label that the employer gives it. It depends on an objective examination of the facts.
From April 2023 to April 2024, Goulburn Valley evidently considered that the two employees were shiftworkers on Mondays. At that time, it was paying the employees the 115% loading for the entire Monday shift. In my view, it was correct to do so.
I conclude that on Mondays the two employees work a ‘morning shift – laundry’ within the meaning of clause 25.1 of the Award, and that they are shiftworkers for the purpose of clause 25.3. Because that shift does not continue for 5 days, they are also entitled to the non-successive shift penalty in clause 25.5.
DEPUTY PRESIDENT
Appearances:
P. Nicholls for the CFMEU
T. Earls for Goulburn Valley Laundry Services Pty Ltd
Hearing details:
2024
Melbourne
3 June
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