Construction, Forestry, Maritime, Mining and Energy Union-Mining and Energy Division Northern Mining and NSW Energy District Branch v UGM Mining Services Pty Limited
[2020] FWC 4913
•11 SEPTEMBER 2020
| [2020] FWC 4913 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.739—Dispute resolution
Construction, Forestry, Maritime, Mining and Energy Union-Mining and Energy Division Northern Mining and NSW Energy District Branch
v
UGM Mining Services Pty Limited
(C2020/3591)
DEPUTY PRESIDENT SAUNDERS | NEWCASTLE, 11 SEPTEMBER 2020 |
Application to deal with a dispute in accordance with a dispute procedure in an enterprise agreement – interpretation of enterprise agreement – calculation of entitlement to superannuation.
Introduction and background
[1] The Construction, Forestry, Maritime, Mining and Energy Union (CFMMEU), on behalf of its relevant members, and UGM Mining Services Pty (UGM) are in dispute about the proper construction of clause 26 (superannuation) of the UGM Engineers – CFMMEU Northern District Enterprise Agreement 2018 (Agreement) (Dispute).
[2] On 15 May 2020 the CFMMEU filed an application pursuant to s 739 of the Fair Work Act 2009 (Cth) (Act) in the Fair Work Commission (Commission) for the Commission to deal with the Dispute.
[3] Following an unsuccessful conciliation conference, I made directions and listed the Dispute for arbitration. Both parties filed and served witness statements and submissions in accordance with my directions. UGM then informed the Commission that it did not wish to rely on the witness statement it had filed and served and desired the Dispute to be determined on the ‘papers’. Accordingly, the hearing date was vacated and the Dispute has been determined on the basis of the witness statements, documents and submissions filed by the CFMMEU and the submissions filed by UGM dated 7 July 2020 and 27 August 2020.
[4] UGM sought permission to be represented by lawyers. I would have granted permission to UGM pursuant to s 596(2)(a) of the Act had there been a hearing. However, in the absence of a hearing, UGM did not need permission to rely on written submissions prepared by its lawyers. I have read and considered those submissions in determining the Dispute.
[5] There is no dispute between the parties, and I am satisfied on the evidence, that I have jurisdiction to arbitrate the Dispute.
A brief outline of the Dispute
[6] UGM engages labour to undertake work in the coal mining industry. The Agreement applies to UGM with respect to all of its employees who are covered by classifications in the Black Coal Mining Industry Award 2010 and who are engaged within its operations in the lower Hunter Valley, upper Hunter Valley, and the Gunnedah basin (Employees).
[7] The Agreement commenced operation on 15 March 2019 and has a nominal expiry date of 10 October 2021.
[8] At all material times, Employees work, and have worked, on a day shift roster, afternoon shift roster, or weekend roster. All rosters pursuant to which the Employees work are comprised of ordinary hours and rostered overtime hours. For example, afternoon shift roster Employees at the Mandalong Underground Colliery are rostered to work 40 hours per week, comprised of 35 ordinary hours and five hours of rostered overtime. In addition, Employees are sometimes offered the opportunity to work non-rostered overtime.
[9] Clause 26 of the Agreement concerns superannuation. The CFMMEU contends that clause 26 confers on an Employee a right to have their entitlement to superannuation calculated on the basis of the rostered hours worked by the Employee, including ordinary hours and rostered overtime, whereas UGM contends that the entitlement is to superannuation calculated on the basis of rostered ordinary hours of work.
Relevant provisions of the Agreement
[10] The following provisions of the Agreement are relevant to the Dispute:
“6. DEFINITIONS
…
As if at work means payment for rostered hours, shift loadings, allowances, and bonus Payment.
…
Full Time means a Permanent or Fixed Term Employee engaged on a roster which shall average thirty five (35) ordinary rostered hours.
…
Non-Working Day or NWD means any day on which an employee, by virtue of the employee’s roster, is never rostered to attend for rostered hours of work.
…
Part Time means a Permanent or Fixed Term Employee engaged on a roster which shall average less than thirty five (35) ordinary rostered hours and in accordance with clause 10.3 of the Award.
…
Rostered Day Off or RDO means any day on which an employee, by virtue of the employee’s roster, is not rostered to attend for rostered hours of work and does not include non working days.
…
7. CONTRACT OF EMPLOYMENT
Employment shall be on a weekly basis, except for casual Employees.
Full Time Employment
A Full Time Employee:
(a) is engaged on a constant number of hours, which having regard to the various ways of arranging hours, will average thirty five (35) ordinary hours per week over the roster cycle;
(b) is entitled to all provisions of this Agreement, unless stated otherwise; and
(c) is required to sign the UGM timesheet, at the various sites, at the request of the Employer.
7.2 Part Time Employment
A Part Time Employee:
(a) is engaged on a constant number of hours, which having regard to the various ways of arranging hours, will average less than thirty five (35) ordinary hours per week over the specific roster cycle,
(b) is entitled to all provisions of this Agreement, unless stated otherwise, on a pro rata basis; and
(c) is required to sign the UGM timesheet, at the various sites, at the request of the Employer.
…
8. HOURS OF WORK
8.1 The ordinary hours shall be an average of thirty five (35) hours per week over the roster cycle.
8.2 Starting times for shifts will generally be consistent with the mine at which Employees shall be working unless otherwise determined by the Employer.
8.3 Employees are required to work shift lengths required by the Employer to meet individual client needs, provided such arrangements are consistent with the Employer and mine-site Fatigue Management and/or Fitness for Work standards, policies and procedures.
8.4 Change of Shift or Mine
(a) Employees may be required to work different shifts or at different mines from time to time.
(b) The Employer will attempt to give a minimum of forty eight (48) hours' notice before a change of shift or mine site. Where such notice is not given, unless an alternative Agreement with the Employee has been reached, payment at the overtime rate for the first shift shall be made.
8.5 Tolerance time shall be consistent with the Contract or the mine at which Employees shall be working.
9. OVERTIME
9.1 An Employee shall be available to work reasonable overtime which will take into account:
(a) Normal non-rostered overtime pattern of Employee(s) over the preceding six (6) months;
(b) Occupational Health and Safety considerations;
(c) UGM and mine-site Fatigue Management and/or Fitness for Work standards, policies and procedures;
(d) Maximising productivity and contract efficiency; and
(e) Personal circumstances including family responsibilities.
9.2 No minimum blocks of overtime will be worked. All Employees will be expected to work daily- required overtime to finish a cycle of work when requested, provided it is reasonable in accordance with clause 9.1.
9.3 Payments for rostered overtime shall be at double time.
9.4 Payment for non-rostered overtime shall be at double time on the basis of “hours worked, hours paid” plus payment for overtime meal breaks not taken.
9.5 An Employee recalled to work overtime after leaving the workplace shall be paid a minimum of four (4) hours at overtime rates even if the work to be performed is completed within a shorter period.
9.6 will have at least ten (10) consecutive hours off duty. If at the request of the Employer, the Employee resumes or continues rostered work without the specified break, the Employee will be paid at double time until such specified break is observed. As a rule, unless Agreement is made between the Employer and Employee, the Employee will commence work after the ten (10) hour break and will be paid from the commencement of their normal shift.
“Work” relates to overtime, work after a rostered shift, or travel after completing a shift out of the Northern District.
…
11. WAGES & ALLOWANCES
Base Hourly Rates
11.1 The Base Hourly Rates described below are the minimum which shall apply from the date identified in the tables and are inclusive of all allowances except first aid allowance, tool allowance and crib allowance. They represent the minimum payments for the defined employment category.
11.2 The Base Hourly Rate for a new Employee at commencement will be subject to the skills and experience of the Employee as assessed by an Employer representative.
11.3 Base Hourly Rate Table for all employees/all sites/all hours worked:
Hunter Valley sites
[table omitted]
Mandalong Site
[table omitted]
Classification
Base Hourly Rate Table for Apprentices (11.4 excluding Adult Apprentices):
[table omitted]
11.5 UGM reserves the right to vary these rates upwards on a case by case basis.
11.6 In June 2019 and June 2020, UGM will review these rates.
11.7 Allowances
Allowance
[table omitted]
11.8 First Aid Allowance
(a) Employees with a current first aid certificate may be appointed by the Employer as a “First Aid Attendant”. Proof of the currency of the certificate will be required for the appointment.
(b) New employees or existing employees who, past the commencement date, obtain and maintain a current first aid certificate and are appointed by the Employer as a “First Aid Attendant” shall receive a first aid allowance of $6.75 per shift worked. Proof of the currency of the certificate will be required to retain payment.
11.9 Crib Allowance
An Employee required to work in excess of one and a half (1½) hours unscheduled overtime will be provided with a meal allowance of $12.00 and an additional allowance every four (4) hours thereafter.
11.10 Travel Allowance
An Employee required to travel using own vehicle will be paid an allowance on $0.66 per kilometre and the distance will be agreed.
11.11 Tool Allowance
An allowance for tools has been incorporated into the Tradesman’s rate; therefore all tradesmen are expected to provide their own tools.
11.12 All wages are to be paid by electronic funds transfer. Employees may nominate up to three (3) accounts into which funds are to be transferred. Where an Employee nominates more than one (1) account, such nominations must be in writing and state fixed amounts to be transferred to the account. Any deduction change requested by an Employee must be in writing.
11.13 Upon termination of employment, wages due to an Employee are to be paid on the day of such termination or forwarded by electronic transfer or post to the Employee's last known address within seventy two (72) hours.
11.14 Payslips will be provided to all Employees weekly. The payslips will be in plain English and outline the total hours worked each week, a breakdown of hours attracting penalties, the amount of hours that attract casual loading, the amount paid in Superannuation and salary sacrifice, the amount of wages earned, any payroll deductions, tax paid and the yearly gross income and gross tax amounts. Annual leave and personal leave balance will be shown for Employees.
11.15 Payslips to employees will be by email, unless requested to be posted to home address.
11.16 When an Employee is transferred to a new site/project, the hourly rate, allowances and bonus at that new site/project will be as paid to Employer’s Employees at that new site/project. Wages rates and allowances from previous sites do not “carry over” to new sites. Upon transfer an Employee will be provided with a summary of the hourly rate, allowances and bonus applicable at the new site.
12. SHIFT LOADINGS & WEEKEND PENALTIES
12.1 Shift Loadings
(a) All ordinary hours worked on afternoon shift will be paid at 115% of the Base Hourly Rate.
(b) All ordinary hours worked on night shift will be paid at 125% of the Base Hourly Rate.
(c) 6 and 7 day roster Employees will be entitled to shift loadings in accordance with the Award.
(d) The applicable times for afternoon and night shifts will be as they apply at the mine. In the absence of certainty, the Award definitions will prevail.
12.2 Saturday & Sunday Work (Weekend Penalties)
The rate for hours worked on a Saturday or Sunday shall be at double time.
12.3 Minimum Payment
Unless continuous with work commenced the previous day, or not reasonably notified, anEmployee called to work on a Saturday, Sunday or holiday, shall be paid for at least four (4)hours at double time.
13. BONUS PAYMENT
13.1 An Employee will be paid a gross weekly bonus in additional to all other remuneration in the amount $480.00 per week. This is calculated on a pro-rated basis based on the number of hours worked by an Employee each week, against 35 hours.
By way of example: if an Employee works 19 hours in a week his entitlement to the bonus will be $260.57 (i.e. 19/35 x$480).
13.2 Bonus shall be paid on a weekly basis on the following:
(a) Attendance for normal shift or more than 50% part thereof;
(b) Paid personal leave;
(c) Paid compassionate leave;
(d) Other authorised paid absences.
13.3 Bonus shall not be paid on the following absences:
(a) Industrial action (for those days industrial action takes place);
(b) Unpaid carers leave;
(c) Other unpaid leave or absences.
13.4 Bonus will be paid on the following, to a maximum of 100%:
(a) When an Employee is on Long Service Leave and the Employee will not be entitled to any further bonus payments;
(b) On any long service leave paid out on termination;
(c) On public holidays when an Employee is entitled to be paid for that public holiday;
(d) When an Employee is on Annual Leave.
13.5 Apprentices
(a) Apprentices will be paid the following proportional amount of bonus;
1st year apprentice Nil
2nd year apprentice 25%
3rd year apprentice 50%
4th year apprentice 75%
(b) Progression on the above scale is based on:
(i) Progression on the plan of study, competence and experience for the nominal apprenticeship year, not the anniversary date of commencing as an apprentice, and
(ii) Successfully passing final examinations or course assessments for subjects undertaken at their place of study.
(c) In the event of termination by the Employer, other than for wilful misconduct, an apprentice who is employed by the Employer at or after the Commencement Date of this Agreement shall be paid accrued untaken Personal Leave at the Base Hourly Rate of pay.
…
15.4 Redundancy Payment
(a) When terminations occur due to redundancy, permanent employees are entitled to severance and retrenchment pay based on the table in clause 15.4(b) below One weeks' pay is based on 35 ordinary hours per week. For Part Time Employees the severance and retrenchment pay will be on a prorate basis. Service will be regarded as the period from when the Employee commences in Full Time or Part Time employment until termination, but excludes any period whilst in Casual employment.
(b) The minimum payment is two (2) weeks for Full Time and Part Time Employees.
[table omitted]
Any payments made under this clause will also satisfy any redundancy entitlements that might arise under the Fair Work Act 2009.
…
16.4 Amount of Payment instead of Notice
The amount of payment instead of notice must be at least the amount that the Employee would have been paid if the employment had continued to the end of the required period of notice, calculated on the basis of:
(a) The Employee’s Ordinary Time Earnings
(b) Any other amount payable under the Employee’s contract of employment.
…
18.4 Payment
(a) If the Employee has sufficient personal leave credits, the Employee will be paid at the Base Hourly Rate of pay and the Employee may elect to be paid on the following basis: -
(i) 5 day roster – 8 hours at single time or shift length at single time
(ii) 4 day roster – 10 hours at single time or shift length at single time
(iii) 3 day roster – 12 hours at single time or shift length at single time
(iv) If the personal leave event has continued for in excess of ten (10) continuous rostered days then the Employee can elect to be paid as if at work.
(b) An Employee shall not be entitled to paid personal leave for any period in respect of which the Employee is entitled to Workers' Compensation.
(c) Termination
An Employee whose employment is terminated: -
(i) By retrenchment;
(ii) By proof of retirement;
(iii) By the Employer because of ill health;
(iv) By death;
must, if the Employee has eighty (80) or more unused hours of personal leave, be paid for such leave at their Base Hourly Rate for all unused hours.
…
22.3 Payment
(a) Employees shall be paid for the period of annual leave immediately prior to the commencement of such leave unless other arrangements have been made with the Employer.
(b) An Employee taking annual leave will be paid as if at work
(c) For each day taken as annual leave Employees will have the equivalent ordinary hours deducted from their entitlement
…
25.3 Meaning of Accident Pay
For the purposes of the clause accident pay means:
(a) For the initial period of thirty nine (39) weeks from the date of injury a weekly payment representing 40 hours pay at the Base Hourly Rate plus Bonus Payment will be paid to the employee.
(b) For a further period of thirty nine (39) weeks a weekly payment representing 40 hours pay at the Base Hourly Rate (excluding the Bonus Payment) will be paid to the employee.
…
26. SUPERANNUATION
26.1 Employees whose employment is subject to this Agreement shall have the statutory superannuation contributions paid into the AUSCOAL Superannuation Fund (Nominated Fund) in satisfying obligations under Choice of Fund and Superannuation Guarantee legislation.
26.2 The Employer shall make superannuation contributions on behalf of each Employee under this Agreement in accordance with requirements of relevant superannuation legislation and other related provisions applying to the coal industry from time to time. As a minimum, these contributions will amount to no less than 9.5% of Ordinary Time Earnings.
26.3 For the purpose of superannuation, the term “Ordinary Time Earnings” includes:
(a) Earnings in respect of rostered hours of work other than earnings consisting of a lump sum payment of any of the following kinds made to the Employee on termination of employment:
(i) payment in lieu of unused sick leave
(ii) payment in lieu of unused annual leave
(iii) payment in lieu of unused long service leave
(b) Allowances;
(c) Shift loadings;
(d) Bonus Payment
(e) Over Award payments.
26.4 Any salary sacrifice contribution made under this clause will be additional to and are not to be offset against any contribution required to be made under relevant Acts or Agreements.
26.5 Salary Sacrificing
With the Agreement of the Employer an Employee may elect to sacrifice part of their pre-tax salary (the Salary sacrifice amount) subject to the following conditions:
(a) The election must be in writing on the form prescribed by the Employer from time to time.
(b) The Employee must indemnify the Employer for any liability for the payment of wages which might arise as a consequence of the Employer’s compliance with the election.
(c) The salary sacrifice amount will be withheld from the Employee’s wages and contributed by the Employer to the AUSCOAL superannuation fund.
(d) Calculation of salary for the purpose of leave accruals and other payments due on termination of employment shall be calculated on a rate of pay which includes the salary sacrifice contributions.
(e) The Employee may, in writing, revoke the salary sacrifice Agreement or alter the amount to be deducted on one weeks notice to the Employer.
(f) Any salary sacrifice election, or alteration to an election, shall only apply to wages earned after the date of the election or alteration as the case may be.
(g) The total superannuation contribution cannot exceed the age based limits as specified by the Australian Taxation Office from time to time.
26.6 Commutation of Personal Leave
(a) An Employee who has two (2) years of continued Full Time service with the Employer may elect to salary sacrifice 40, 80 or 120 hours of future personal leave into AUSCOAL Superannuation Fund, provided that the remaining balance of accrued personal leave is 140 hours after the transfer occurs.
(b) The amount paid into AUSCOAL Superannuation Fund by the Employer will be the Base Hourly Rate multiplied by the hours sacrificed plus the equivalent weekly Bonus Payment.
(c) The Employee shall request the salary sacrifice in writing at least one (1) month prior to the anniversary date of their entitlement
(d) Where an Employee elects to salary sacrifice a portion of personal leave such leave shall not accumulate.”
Principles of construction
[11] There is no dispute between the parties as to the principles that I must apply in properly construing the Agreement. Those principles were summarised by the Full Bench in AMWU v Berri Pty Ltd 1 (Berri) as follows:
“1. The construction of an enterprise agreement, like that of a statute or contract, begins with a consideration of the ordinary meaning of the relevant words. The resolution of a disputed construction of an agreement will turn on the language of the agreement having regard to its context and purpose. Context might appear from:
(i) the text of the agreement viewed as a whole;
(ii) the disputed provision’s place and arrangement in the agreement;
(iii) the legislative context under which the agreement was made and in which it operates.
2. The task of interpreting an agreement does not involve rewriting the agreement to achieve what might be regarded as a fair or just outcome. The task is always one of interpreting the agreement produced by parties.
3. The common intention of the parties is sought to be identified objectively, that is by reference to that which a reasonable person would understand by the language the parties have used to express their agreement, without regard to the subjective intentions or expectations of the parties.
4. The fact that the instrument being construed is an enterprise agreement made pursuant to Part 2-4 of the FW Act is itself an important contextual consideration. It may be inferred that such agreements are intended to establish binding obligations.
5. The FW Act does not speak in terms of the ‘parties’ to enterprise agreements made pursuant to Part 2-4 agreements, rather it refers to the persons and organisations who are ‘covered by’ such agreements. Relevantly s.172(2)(a) provides that an employer may make an enterprise agreement ‘with the employees who are employed at the time the agreement is made and who will be covered by the agreement’. Section 182(1) provides that an agreement is ‘made’ if the employees to be covered by the agreement ‘have been asked to approve the agreement and a majority of those employees who cast a valid vote approve the agreement’. This is so because an enterprise agreement is ‘made’ when a majority of the employees asked to approve the agreement cast a valid vote to approve the agreement.
6. Enterprise agreements are not instruments to which the Acts Interpretation Act 1901 (Cth) applies, however the modes of textual analysis developed in the general law may assist in the interpretation of enterprise agreements. An overly technical approach to interpretation should be avoided and consequently some general principles of statutory construction may have less force in the context of construing an enterprise agreement.
7. In construing an enterprise agreement it is first necessary to determine whether an agreement has a plain meaning or it is ambiguous or susceptible of more than one meaning.
8. Regard may be had to evidence of surrounding circumstances to assist in determining whether an ambiguity exists.
9. If the agreement has a plain meaning, evidence of the surrounding circumstances will not be admitted to contradict the plain language of the agreement.
10. If the language of the agreement is ambiguous or susceptible of more than one meaning then evidence of the surrounding circumstance will be admissible to aid the interpretation of the agreement.
11. The admissibility of evidence of the surrounding circumstances is limited to evidence tending to establish objective background facts which were known to both parties which inform and the subject matter of the agreement. Evidence of such objective facts is to be distinguished from evidence of the subjective intentions of the parties, such as statements and actions of the parties which are reflective of their actual intentions and expectations.
12. Evidence of objective background facts will include:
(i) evidence of prior negotiations to the extent that the negotiations tend to establish objective background facts known to all parties and the subject matter of the agreement;
(ii) notorious facts of which knowledge is to be presumed; and
(iii) evidence of matters in common contemplation and constituting a common assumption.
13. The diversity of interests involved in the negotiation and making of enterprise agreements (see point 4 above) warrants the adoption of a cautious approach to the admission and reliance upon the evidence of prior negotiations and the positions advanced during the negotiation process. Evidence as to what the employees covered by the agreement were told (either during the course of the negotiations or pursuant to s.180(5) of the FW Act) may be of more assistance than evidence of the bargaining positions taken by the employer or a bargaining representative during the negotiation of the agreement.
14. Admissible extrinsic material may be used to aid the interpretation of a provision in an enterprise agreement with a disputed meaning, but it cannot be used to disregard or rewrite the provision in order to give effect to an externally derived conception of what the parties’ intention or purpose was.
15. In the industrial context it has been accepted that, in some circumstances, subsequent conduct may be relevant to the interpretation of an industrial instrument. But such post-agreement conduct must be such as to show that there has been a meeting of minds, a consensus. Post-agreement conduct which amounts to little more than the absence of a complaint or common inadvertence is insufficient to establish a common understanding.”
[12] Also of relevance to the Dispute are the following observations made by Gray ACJ in Shop Distributive and Allied Employees’ Association v Woolworths Limited: 2
“[26] There is no doubt that consistency in the use of terminology, particularly defined terms, is to be valued highly in any document. Inconsistency in the use of the same or similar words produces confusion in the interpretation of documents. This is why there is a presumption that a word used in one provision of a statute has the same meaning when it is used in another provision of the same statute. In statutory construction, consistency of use is no more than a presumption, and a fragile one at that. In Clyne v Deputy Commissioner of Taxation (1981) 150 CLR 1 at 10, Gibbs CJ described it as ‘not a presumption of very much weight’. His Honour said, ‘there is no rigid rule; it all depends on the context’. In the same case at 15, Mason J (with whom Aickin and Wilson JJ concurred) said that the presumption ‘readily yields to the context’. If the presumption of consistent use of terminology is so weak in legislative drafting, it must be even weaker in the context of a Certified Agreement. Typically, such agreements are the product of hard negotiation, in which wording of particular clauses is often agreed without reference to other provisions of the same document. Provisions are commonly transmitted from one agreement to the next in a series, without regard to whether their terminology sits well with the words used in newly adopted terms. The use of other agreements, and awards, as precedents can often result in the borrowing of provisions, again without regard to whether the words used in them are consistent with the rest of the agreement under consideration. For these and other reasons, consistency will often be absent. It is easy to see that the same word can be used in different provisions with different meanings.”
Superannuation legislation
[13] In Bluescope Steel (AIS) Pty Ltd v Australian Workers Union, 3 Allsop CJ explained the proper construction of the relevant superannuation legislation, having regard to the legislative text, context and purpose. Relevant features of the legislative scheme for superannuation include the following:
• An employer is under no statutory obligation to make superannuation contributions for the benefit of any employee: the extent to which an employer does so will affect whether the employer pays a charge of tax, and if so, in what amount. 4
• The superannuation legislation does not confer on an employee any right to require the Commissioner of Taxation to do anything for him or her in respect of superannuation. As a result, there is every reason for employees to include in an enterprise agreement an obligation on their employer to pay superannuation. Such an obligation is directly enforceable by employees to whom such an enterprise agreement applies. 5
• Under sections 5 and 6 of the Superannuation Guarantee Charge Act 1992 (Cth) (SGCA), a charge is imposed on any superannuation guarantee shortfall of an employer for each quarter. 6
• Sections 16 and 17 of the Superannuation Guarantee (Administration) Act 1992 (Cth) (SGAA) provide for the charge imposed on the shortfall for a quarter to be payable by the employer. 7
• Section 19 of the SGAA provides for the calculation of an employee’s individual superannuation guarantee shortfall. 8
• Under section 23 of the SGAA, the charge percentage can be reduced in respect of an employee by the employer making a contribution to a superannuation fund (other than a defined benefit superannuation scheme). 9
• The reduction in the charge percentage is calculated by reference to “ordinary time earnings”. 10
• The phrase “ordinary time earnings” is defined in section 6 of the SGAA as follows:
“ordinary time earnings, in relation to an employee, means:
(a) the total of:
(i) earnings in respect of ordinary hours of work other than earnings consisting of a lump sum payment of any of the following kinds made to the employee on the termination of his or her employment:
(A) a payment in lieu of unused sick leave;
(B) an unused annual leave payment, or unused long service leave payment, within the meaning of the Income Tax Assessment Act 1997; and
(ii) earnings consisting of over-award payments, shift-loading or commission;
or
(b) if the total ascertained in accordance with paragraph (a) would be greater than the maximum contribution base for the quarter—the maximum contribution base.”
• If the contribution divided by “ordinary time earnings” multiplied by 100 is the equivalent of, or more than, the charge percentage in section 19(2) of the SGAA, the charge percentage for section 19 and sections 16 and 17 of the SGAA will be zero. 11
• It is therefore necessary to understand the meaning of the phrase “ordinary time earnings” and the otherwise undefined phrase “ordinary hours of work” used in the definition of “ordinary time earnings”. 12
• The task involves a consideration of the text, context, purpose and history of the legislation. 13 As to the text, the definition turns on the expression “earnings in respect of ordinary hours of work”. 14 As to the context, section 6 of the SGAA is not a provision directed to compensating an employee for the time of his or her labour, or for loss sustained in not being able to work his or her normal hours; rather it is part of a regime implemented by legislation using the taxation power to encourage and facilitate national savings. Relevantly, his Honour said [at 38]:
“In that context, the word “ordinary” and the phrase “ordinary hours” have assumed different meanings depending on context and circumstance. There are circumstances and contexts where the word and phrase can be seen to refer to regular, normal, customary or usual hours; and there are circumstances or contexts where the word and phrase can be seen to refer to the hours of work referred to in applicable industrial instruments as standard hours to be paid at ordinary rates, as opposed to additional hours (even if required, usual, regular, normal or customary) and paid at a special or higher rate. As such, the word and phrase can be seen to reflect the long-recognised distinction between ordinary hours of work and overtime: cf Thompson v Roche Bros Pty Ltd [2004] WASCA 110 at [31].”
• As to the purpose, his Honour said [at 43]:
“The statutory purpose of the superannuation legislation is to secure for workers a minimum level of superannuation by the incentive of the charge, through an efficient mechanism based on self-assessment by employers and administration by employers and the Australian Tax Office. That simplicity and efficiency of administration is threatened if the necessary calculation for each employee, for each quarter is based on an individual factual enquiry and is not calculated by reference to the standard hours at ordinary rates in relevant industrial instruments. Usual or ordinary hours may well vary from employee to employee, and, over time, for the same employee. What is customary or usual would be a factual assessment over the relevant period (each quarter), referable to individuals, and open to factual and individual debate. The statutory purpose of simplicity and efficiency for a minimum level of superannuation would be undermined by the need to find, factually, usual or normal hours for each employee in each quarter; the purpose would, on the other hand, be supported by an interpretation that looked to the relevant industrial instrument for standard hours at ordinary rates of pay. It is, with respect, overly simplistic to say that the legislation was intended to benefit employees therefore should be construed beneficially in their favour: cf Quest Personnel Temping Pty Ltd v Commissioner of Taxation [2002] FCA 85; 116 FCR 338 at 343 [21]. The legislation has a broader social and economic purpose, and whilst for the benefit of Australian employees generally, should be construed with a view to practical efficiency and overall fairness.”
• The enactment history of the legislation demonstrates that the phrase “ordinary time earnings” must be understood as being earnings referable not just to the number of hours worked, but also to their character as being paid at an ordinary rate. 15
• His Honour summarised his deliberations as follows [at 56]:
“The text, context, purpose and enactment history do not direct one to a meaning constituted solely by hours (factually) usually worked. They tend to a meaning that provides for an objective standard that aids in simplicity and lack of complexity. The use, from 1992, of the relevant phraseology in a context of industrial awards and instruments; the well-known conception contained within industrial awards and instruments of standards hours at ordinary rates of pay, and of overtime; the need for the phraseology to be practical, general and flexible to pick up all circumstances of employment; and the need for the task set for the employer to administer and the ATO to audit, quarter by quarter, individual by individual, to be as simple or non-complex as possible all direct one to a meaning that reflects those considerations. The meaning that best reflects these considerations and the text, context, purpose and history of the provision is earnings in respects of ordinary or standard hours of work at ordinary rates of pay as provided for in a relevant industrial instrument, or contract of employment, but if such does not exist (and there is no distinction between ordinary or standard hours and other hours by reference to rates of pay) earnings in respect of the hours that the employee has agreed to work or, if different, the hours usually or ordinarily worked.”
Consideration
[14] The expression “rostered hours of work” in clause 26.3(a) of the Agreement is not defined. In my view, the expression is ambiguous, in the sense that it is susceptible of more than one meaning. 16 First, it is arguable that the expression means all hours of work which an Employee is rostered to work, including ordinary hours and rostered overtime. Secondly, as UGM contends, it is arguable that the expression means rostered ordinary hours. Although the expression is ambiguous, there is no evidence of any particular surrounding circumstances which provides any material aid to my task of interpreting the relevant provisions of the Agreement.
[15] The Agreement clearly distinguishes between the concepts of “ordinary hours”, “rostered overtime”, “non-rostered overtime”, “rostered hours of work”, and “ordinary rostered hours”.
[16] The word “roster” may be used to refer to an individual’s place within a pattern of shifts or the pattern and structure of shifts or both. 17 In the expressions “rostered hours of work” and “ordinary rostered hours” within the Agreement, it is plain that the word “roster” is used to mean the pattern and structure of shifts worked by an Employee.
[17] Under the Agreement, a full-time Employee works according to a roster “which shall average thirty five (35) ordinary rostered hours” per week. 18 Employees are also required to be available to work reasonable overtime in addition to their ordinary hours of work.19 Overtime may either be “rostered overtime” or “non-rostered overtime”.20 A requirement to work “non-rostered overtime” attracts higher remuneration than “rostered overtime” if the Employee is required to work in excess of 1.5 hours “non-rostered overtime”, in which case the Employee must be provided with “a meal allowance of $12.00 and an additional allowance every four (4) hours thereafter”.21 This context must be taken into account in construing composite expressions such as “rostered hours of work” and “ordinary rostered hours”.
[18] Clause 6 of the Agreement defines a “Full Time” Employee to mean “a Permanent or Fixed Term Employee engaged on a roster which shall average thirty five (35) ordinary rostered hours”. It is plain from this definition that “ordinary rostered hours” are the ordinary hours worked by an Employee in a weekly roster. Earlier in the same clause, the expression “As if at work” is defined to mean “payment for rostered hours, shift loadings, allowances, and bonus Payment”. This definition is used in various places throughout the Agreement to determine the rate at which various entitlements such as annual leave (clause 22.3(b)) and personal leave which continues for in excess of 10 continuous rostered days (clause 18.4(a)(iv)) are to be paid. It is to be contrasted to other entitlements which are based on “35 ordinary hours per week” (redundancy, clause 15.4(a)), “40 hours pay at the Base Hourly Rate plus Bonus Payment” (accident pay during the initial period of 39 weeks, clause 25.3(a)), or “40 hours pay at the Base Hourly Rate (excluding the Bonus Payment)” (accident pay during a further period of 39 weeks, clause 25.3(b)). Calculating an entitlement on an “As if at work” basis is clearly intended to compensate an Employee for a much broader loss of earnings than other entitlements. This context suggests that the expression “rostered hours” is also intended to have a broad meaning and one which is capable of extending beyond the ordinary hours worked by an employee.
[19] The expressions “rostered hours” and “ordinary rostered hours” are used in numerous places throughout the definitions in clause 6 of the Agreement. Even making allowance for the weakness of the presumption of consistent use of terminology, 22 the fact that the different expressions “rostered hours” and “ordinary rostered hours” are used throughout both the definitions in clause 6 and the balance of the Agreement suggests that a difference in meaning was objectively intended.
[20] Reading the Agreement as a whole, I agree with the CFMMEU’s submission that it is clear from the text and structure of the Agreement, including provisions dealing with the rostering of and payment for work, that the references to “rostered hours” in the Agreement are objectively intended to mean more than merely ordinary hours worked pursuant to a roster and would include rostered overtime.
[21] UGM submits that the purpose of clause 26.2 of the Agreement is not to simply recognise or reference the statutory regime in respect of superannuation. UGM says that it does not have any statutory obligation to make superannuation contributions for the benefit of any Employee; it could choose not to make any superannuation contributions for an Employee, with the consequence that it would then be liable to pay a charge of tax. UGM contends that clause 26.2 limits its choice: the clause directs or obliges UGM to make superannuation contributions on behalf of each Employee. By the inclusion of clause 26.2 in the Agreement, UGM submits that it has undertaken to make superannuation contributions rather than to pay the superannuation guarantee charge, and Employees benefit from this undertaking because they are assured that superannuation contributions of no less than 9.5% of “ordinary time earnings” will be paid into their superannuation accounts. UGM also contends that the undertaking in clause 26.2 is subject to UGM making superannuation contributions in accordance with the “requirements of [the] superannuation legislation”. The requirement, so UGM contends, is that UGM must calculate those contributions on the basis of an employee’s “ordinary time earnings” as defined in s 6 of the SGAA.
[22] UGM also submits that, in the context of:
• the obligation on UGM to make employee superannuation contributions arising under clause 26.2, which incorporates the superannuation legislation;
• the proper construction of the superannuation legislation, particularly having regard to its legislative purpose outlined above; and
• the requirement under the superannuation legislation being to calculate superannuation contributions on the basis of “ordinary time earnings” as defined in s 6 of the SGAA,
the purpose of clause 26.2 is to simply restate the elements of the definition of “ordinary time earnings” contained in s 6 of the SGAA. UGM contends that clause 26.3 of the Agreement is seeking to paraphrase the definition of “ordinary time earnings” in s 6 of the SGAA in more simple terms.
[23] I agree with UGM that clause 26.2 of the Agreement imposes an obligation on UGM to make superannuation contributions on behalf of each Employee. Use of the expression “shall make” in clause 26.2 is a strong indicator of an obligation being imposed. It is arguable that clause 26.2 does not impose any obligation on UGM to make superannuation contributions because the clause only mandates such contributions being made “in accordance with the requirements of relevant superannuation legislation and other related provisions applying to the coal industry from time to time”. On a technical level, the superannuation legislation does not impose any requirements on an employer to make superannuation contributions to a fund on behalf of an employee. The statutory regime is such that a tax is imposed if a contribution is not made. However, the authorities recognise that the framers of enterprise agreements are likely to be of “a ‘practical bent of mind’ and may well have been more concerned with expressing an intention in a way likely to be understood in the relevant industry rather than with legal niceties and jargon, so that a purposive approach to interpretation is appropriate and a narrow or pedantic approach is misplaced”. 23 A broad and purposive reading of the expression “requirements of relevant superannuation legislation …” includes the requirement to make a contribution to an employee’s superannuation fund at the applicable rate.
[24] The superannuation legislation has a statutory purpose of simplicity and efficiency. That is because the legislation applies across the nation and is structured in such a way that employers and the Australian Taxation Office need to be able to administer the superannuation system in an efficient manner. As Allsop CJ described it in Bluescope v AWU at [56], “… the need for the phraseology to be practical, general and flexible to pick up all the circumstances of employment; and the need for the task set for the employer to administer and the ATO to audit, quarter by quarter, individual by individual, to be as simple or non-complex as possible all direct one to a meaning that reflects those considerations”. Those considerations are not persuasive when interpreting this Agreement. The Agreement does not apply across Australia; its application is limited to employees of UGM in three particular geographical regions. Further, in terms of simplicity, it is a simple task to look at an Employee’s roster and determine how many hours they have been rostered to work, whether as ordinary hours or rostered overtime, in the roster period.
[25] The issue at the heart of this Dispute is how the superannuation contributions which UGM is obliged by the Agreement to make on behalf of Employees are to be calculated. I do not accept UGM’s contention that the purpose of clause 26.3 is simply to restate or paraphrase the elements of the definition of “ordinary time earnings” contained in s 6 of the SGAA. The difficulty with this contention is that the framers of the Agreement have selected and used parts of the language of the definition of “ordinary time earnings” in s 6 of the SGAA in drafting clause 26.3 of the Agreement, but there are the following material differences between the two definitions. First, the SGAA defines “ordinary time earnings” to “mean” the total of various payments and earnings. Clause 26.3 of the Agreement provides that, for the purpose of superannuation, the term “ordinary time earnings” “includes” various earnings and other amounts. A “means” definition is taken to be exhaustive, whereas an “includes” definition is not. 24 Secondly, the SGAA refers to “earnings in respect of ordinary hours of work”, whereas clause 26.3 refers to “earnings in respect of rostered hours of work”. Thirdly, clause 26.3(b) requires “allowances” to be “included” in the calculation of “ordinary time earnings”. There is no such reference to “allowances” in s 6 of the SGAA. “Allowances” would not fall within the meaning of “earnings consisting of over-award payments, shift loading or commission” in (a)(ii) of the definition of “ordinary time earnings” in s 6 of the SGAA because “allowances” are materially different from shift loadings and commission, and they would ordinarily fit within the characterisation of an award payment rather than an “over-award payment”. Some “allowances” may fall within the meaning of “earnings in respect of ordinary hours of work” in (a)(i) of the definition of “ordinary time earnings” in s 6 of the SGAA, however other allowances would not be caught because they are only payable in respect of hours of work undertaken outside ordinary hours (i.e. overtime). By way of example, a crib allowance under clause 11.9 of the Agreement is only payable with respect to “unscheduled overtime”. Fourthly, clause 26.3(d) requires “bonus payments” to be “included” in the calculation of “ordinary time earnings”. There is no such reference to “bonus payments” in s 6 of the SGAA. It is arguable that a bonus payment is an “over award payment”, but many industrial instruments in the black coal mining industry expressly provide for the payment of bonus payments. The Agreement is but one example. Further, the inclusion of both “bonus payments” and “over award payments” in clause 26.3 suggests that they are intended to capture payments of a different character. A “bonus payment” is, in my view, unlikely to fall within the meaning of “earnings in respect of ordinary hours of work” because “bonus payments” are ordinarily not merely a reward for work undertaken during an employee’s ordinary hours of work. Fifthly, the definition of “ordinary time earnings” in s 6 of the SGAA places a cap on superannuation contributions by reference to the “maximum contribution base for the quarter”. Clause 26.3 of the Agreement does not make any mention of such a cap. Finally, the definition of “ordinary time earnings” in s 6 of the SGAA includes earnings consisting of “commission”. There is no reference to “commission” in clause 26.3 of the Agreement, but that is no doubt explicable on the basis that the Employees, like almost all employees in the black coal mining industry, do not earn “commission”. Accordingly, I do not place any weight on the fact that the word “commission” does not appear in clause 26.3 of the Agreement.
[26] The material differences between the definition of “ordinary time earnings” in clause 26.3 of the Agreement and s 6 of the SGAA suggests that the framers of the Agreement objectively intended the expression “rostered hours of work” to have a different meaning to “ordinary hours of work”.
[27] The construction for which the CFMMEU contends is also supported by the following observations made by Buckley LJ in Modern Buildings Wales Ltd v Limmer and Trinidad Co Ltd: 25
“Where parties by an agreement import the terms of some other document as part of their agreement those terms must be imported in their entirety, in my judgment, but subject to this: that if any of the imported terms in any way conflicts with the expressly agreed terms, the latter must prevail over what would otherwise be imported.”
[28] In SDA v Woolworths, Gray ACJ observed at [30] that “Buckley LJ was speaking of a term that ‘conflicts with the expressly agreed terms’, not a term that would be inconsistent only in the sense that its application would produce a different result from that produced by the application of the express terms of the agreement”. In the present case, the definition of “ordinary time earnings” in s 6 of the SGAA conflicts with the definition of the same expression in clause 26.3 of the Agreement because, for example, some benefits such as “bonus payments” fall within one definition but not the other.
[29] UGM submits, in the alternative, that if the Commission were to accept the CFMMEU’s contention that the phrase “rostered hours” in clause 26.3 of the Agreement should be interpreted to mean “rostered ordinary hours and rostered overtime hours”, then UGM contends it does not matter that clause 26.3 of the Agreement purports to define what “ordinary time earnings” means, or purports to include additional matters to be taken into account when calculating “ordinary time earnings” for the purpose of superannuation. UGM contends that the “ordinary time earnings” for the purposes of the superannuation regime established under statute can only be as it is defined in the legislation. I reject these contentions. Parties bound by an enterprise agreement are at liberty to negotiate and include in an enterprise agreement provisions imposing obligations on an employer to make payments that exceed that which an employee is entitled to receive under the relevant statutory regime. Here, the parties to the Agreement included the provisions contained within clause 26 in order to (i) establish an obligation on UGM to make superannuation contributions on behalf of each Employee and (ii) impose a more expansive definition of “ordinary time earnings” for the purpose of calculating superannuation contributions than that which is provided for in s 6 of the SGAA.
[30] In the further alternative, UGM submits that where there is a statutory definition of “ordinary time earnings” that is incorporated into the Agreement by reference to the superannuation legislation, and a different definition of “ordinary time earnings” is contained in the Agreement in reference to superannuation, UGM is not failing to comply with its obligations under the Agreement by applying the statutory definition when calculating superannuation contributions on behalf of employees. In support of this contention, UGM relies on the decision of Gray ACJ in SDA v Woolworths. In that case, the collective agreement incorporated by reference the provisions of the Long Service Leave Act in Victoria, which entitled an employee to long service leave on “ordinary pay”, as defined in the legislation. The collective agreement included a different definition of “ordinary pay” for the purposes of the collective agreement. Gray ACJ held that there was no conflict between the definition in clause 28 of the collective agreement and the definition of “ordinary pay” in the long service leave legislation:
“It is only that the application of the two definitions to the expression “ordinary pay”, which happens to be common to both the provisions incorporated by reference and the express terms of the Certified Agreement, might produce different results. Such different results would not involve derogation from the express terms of the Certified Agreement. There is, therefore, no possibility of conflict. There is no reason why the choice of the parties to have entitlements to long service leave determined by the application of the provisions of the LSL Act should not be given full effect.”
[31] I reject these submissions made on behalf of UGM in the alternative. There is a material distinction between the facts and circumstances of SDA v Woolworths and the present case. In SDA v Woolworths, the Certified Agreement contained a general definition of “ordinary pay for the purposes of this agreement”. The Certified Agreement did not state that the definition of “ordinary pay” applied to long service leave. On the topic of long service leave, the Certified Agreement merely provided that “long service leave entitlements will apply in accordance with the provisions of the appropriate Victorian State Legislation as applying at the time of certification”. Having regard to those circumstances, it is not surprising that his Honour found that there was no possibility of conflict and no reason why the “choice of the parties to have entitlements to long service leave determined by the application of the provisions of the LSL Act should not be given full effect”. In the present case, clause 26.3 of the Agreement contains a definition of “ordinary time earnings” expressly “for the purpose of superannuation”. For the reasons given above, the material differences between the two definitions of “ordinary time earnings” results in a clear conflict between the terms. The bargain struck between the makers of the Agreement included an obligation on the part of UGM to make superannuation contributions on behalf of Employees on the basis of an Employee’s “ordinary time earnings”, as defined in clause 26.3 of the Agreement. If UGM made such contributions on the basis of an Employee’s “ordinary time earnings”, as defined in s 6 of the SGAA, it would contravene its obligations under clause 26 of the Agreement.
[32] UGM also refers to amendments to the definition of “ordinary time earnings” in the SGAA, 26 the benefits of which were expressed in the Explanatory Memorandum to the amending legislation27 to include the following:
• “Remove the complexity and inequity present in the current SG notional earnings base arrangements under the SGAA 1992. The basic principle underpinning this objective is that persons on similar overall levels of remuneration should receive similar levels of compulsory employer superannuation contributions.” 28
• “Employers will experience reduced complexity in determining the correct earnings base. This will be because all employees will have an earnings base of ordinary time earnings under this option rather than each employee having potentially different earnings bases depending on their industrial award, superannuation fund trust deed or law which may currently prescribe earnings bases” 29
[33] Having regard to these legislative amendments, UGM contends that it would remain both inequitable and inefficient if the Commission were to adopt the approach to clause 26.2 contended for by the CFMMEU; that is, such an interpretation would, in UGM’s submission:
• result in other employees of UGM receiving less by way of superannuation contributions, because the nature of their employment does not require them to work rostered overtime, even though they work the same number of ordinary time hours as the Employees covered by the Agreement; and
• UGM would have to accommodate in its systems the calculation of superannuation guarantee contributions for employees covered by this Agreement on a different basis than ordinary time earnings.
[34] I do not accept these contentions. It is a matter for UGM whether it enters into any agreement, whether by contract, making an enterprise agreement, or otherwise, which obliges it to make superannuation contributions in excess of the minimum contributions for which the superannuation legislation provides. If UGM enters into such an agreement, as I have found it did in the case of the Agreement, UGM must comply with the bargain it has struck and ensure that its systems are capable of calculating the superannuation contributions which it is obliged thereby to make on behalf of particular employees. That other employees of UGM who are not covered by the Agreement may have a lesser entitlement to superannuation than the Employees, even though they work the same number of ordinary time hours as the Employees, is an irrelevant consideration when one comes to construe the text of the Agreement, having regard to its purpose and context.
Conclusion
[35] For the reasons given, my determination of the Dispute is that the reference to “earnings in respect of rostered hours of work” contained in clause 26.3(a) of the Agreement means earnings in respect of rostered ordinary hours and rostered overtime hours of work.
DEPUTY PRESIDENT
Printed by authority of the Commonwealth Government Printer
<PR722744>
1 [2017] FWCFB 3005
2 [2006] FCA 616 (SDA v Woolworths)
3 [2019] FCAFC 84 (Bluescope v AWU)
4 Ibid at [25]
5 Ibid at [19]
6 Ibid at [26]
7 Ibid at [27]
8 Ibid at [27]
9 Ibid at [29]
10 Ibid at [29]
11 Ibid at [32]
12 Ibid at [32]
13 Ibid at [33]
14 Ibid at [34]
15 Ibid at [44]
16 Codelfa Construction Pty Ltd v State Rail Authority of New South Wales (1981-1982) 149 CLR 337 at 350 per Mason J; Grocon Constructors Pty Ltd v Construction, Forestry, Mining and Energy Union AG812496 PR924146 at [20] per Ross VP citing Re: Victorian Public Transport Enterprise Agreement 1994, Print M2454, 7 June 1995 per Ross VP, Polites SDP and Grimshaw C at p. 4; Re CFMEU Appeal, Print R2431, 25 February 1999 per Harrison SDP, Drake DP and Larkin C at para 13; Re Tenix Defence Systems Pty Limited Certified Agreement 2001-2004, Print PR917548, 9 May 2002 per Ross VP, O'Callaghan SDP and Foggo C
17 AMWU v Silcar Pty Ltd[2011] FWAFB 2555 at [8]
18 Clauses 6 (definition of “Full Time”), 7.1 and 8.1 of the Agreement
19 Clauses 8.3, 9.1 and 9.2 of the Agreement
20 Clauses 9.3 and 9.4 of the Agreement
21 Clauses 9.4 and 11.9 of the Agreement
22 SDA v Woolworths at [26]
23 WorkPac Pty Ltd v Skene [2018] FCAFC 131 at [197], applying Kucks v CSR Limited (1996) 66 IR 182 at 184
24 SDA v Woolworths at [25]
25 [1975] 2 All ER 549 at 555-556
26 UGM’s further submissions dated 27 August 2020 at [19]-[22]
27 Superannuation Laws Amendment (2004 Measures No.2) Bill 2004
28 Explanatory Memorandum at [4.18]
29 Ibid at [4.21]
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