Construction, Forestry, Maritime, Mining and Energy Union v Brisbane Container Terminals Pty Ltd and Sydney International Container Terminals Pty Ltd T/A Hutchison Ports Australia
[2019] FWC 3908
•5 JUNE 2019
| [2019] FWC 3908 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.739 - Application to deal with a dispute
Construction, Forestry, Maritime, Mining and Energy Union
v
Brisbane Container Terminals Pty Ltd and Sydney International Container Terminals Pty Ltd T/A Hutchison Ports Australia
(C2018/3901)
DEPUTY PRESIDENT ASBURY | BRISBANE, 5 JUNE 2019 |
Application to deal with a dispute – Construction of Agreement provisions in relation to hours of work and leave.
BACKGROUND
[1] On 17 July 2018, the Construction, Forestry, Maritime, Mining and Energy Union (CFMMEU) applied to the Fair Work Commission (the Commission) to deal with a dispute pursuant to s.739 of the Fair Work Act 2009 (the Act) under the Dispute Resolution Procedure in clause 13 of the Sydney International Container Terminals Pty Limited (SICTL) and Brisbane Container Terminals Pty Limited (BCT) and Maritime Union of Australia (MUA) Enterprise Agreement 2015 (the Agreement).The Respondent in this matter is Brisbane Container Terminals Pty Ltd and Sydney International Container Terminals Pty Ltd T/A Hutchison Ports Australia (Hutchison Ports/the Company).
[2] The dispute concerns the interpretation of Schedule 4, Phase 1 Roster and the Roster Rules of the Agreement. It relates to the way in which leave entitlements are treated under provisions of the Agreement in Schedule 4 setting out Roster Rules dealing with the constitution of working hours in any year. 1
[3] The Issue Resolution procedure in clause 13 of the Agreement empowers the Commission to arbitrate a dispute after first attempting to conciliate. It is common ground that the dispute has not been resolved after local and national discussions and conciliation by the Commission. The questions for arbitration agreed between the parties are as follows:
“1. Having regard to Schedule 4 of the Agreement, the National Employment Standards, and to the evidence adduced by the employees listed in Schedule A and such other matters the Commission using its powers pursuant to section 739 of the Fair Work Act, 2009 (Cth) deems relevant:
a. do annual leave hours, personal leave hours and accrued days, when taken, constitute hours that have been worked in any year for the purposes of the Application of Schedule 4, Phase 1 Roster and the Roster Rules?
b. are post-1560 hours, regardless of type, to be remunerated in accordance with Roster Rule 4 of Schedule 4 of the Enterprise Agreement (i.e. overtime)?
c. does trade union leave, when taken, as provided for in clause 2.7 of Schedule 6 of the Enterprise Agreement, constitute hours that have been worked in any year for the purposes of the Application of Schedule 4, Phase 1 Roster and the Roster Rules?”
[4] On 20 September 2018, Directions were issued requiring the parties to file and serve material upon which they intended to rely and a hearing was conducted on 17 December 2018. At the Hearing, the following persons provided witness statements for the CFMMEU:
• Trevor Wallin, Stevedore and permanent employee of Hutchison Ports; 2
• Jean Tetohu, Stevedore and permanent employee of Hutchison Ports; 3
• Ronald Branford, Stevedore and permanent employee of Hutchison Ports; 4
• Paul Petersen, Assistant Divisional Branch Secretory of the CFMMEU; 5
• Diego Flaksbard, Stevedore and permanent employee of Hutchison Ports; 6 and
• Lance Adams, Stevedore and permanent employee of Hutchison Ports. 7
[5] A witness statement made by Terence Rosengarten, Manager – HR Operations was filed on behalf of Hutchison Ports. 8 None of the witnesses were required for cross-examination at the Hearing. The witness statements were tendered without objection save that parts of the statements expressing the opinions of witnesses about the proper construction of the Agreement were not pressed and have not been taken into account.
PROVISIONS OF THE AGREEMENT RELEVANT TO THE DISPUTE
[6] The provisions of the Agreement referred to by the parties in their submissions are found in Schedule 4 – Phase 1 Roster – of the Agreement, as follows:
“SCHEDULE 4 – PHASE 1 ROSTER
…
Roster Rules
In addition to the provisions of Clause 16 (Allocation and Working Arrangements), the following allocation rules will apply to this roster, subject to skills:
1. Employees shall work 1560 hours annually, and are available to be allocated to shifts in accordance with the roster, subject to any agreed leave arrangements.
2. The annual hours are based on a 30-hour week and include leave counted at 30 hours per week (annual leave) and 8 hours per day (personal leave and accrued days taken).
3. Employees will be paid 30 hours at the Level 1 ordinary rate each week, plus any higher duties payments for any shifts worked in the week, plus any shift premiums applicable to any shifts worked in the week, plus any extensions or preparatory/closing work performed in the week, plus any leave as noted above.
4. Once the 1560 annual hours have been worked in any year, the employee will be paid 30 hours at the Level 1 ordinary rate each week, plus the applicable overtime rate for each shift worked in the week, plus any extensions or preparatory/closing work performed during the week.
5. Employees with the lowest pro rata target annualised hours may be allocated first on each occasion in accordance with the panel tumble and pick up. Thereafter, higher panels on the roster will be allocated before lower panels (e.g., Panel1 before Panel5 for day work, etc).
6. Employees in D/I panels will be allocated to day shift prior to E/I, N/I and I, in that order.
7. Employees in E/I panels will be allocated to evening shift prior to D/I, N/I and I, in that order.
8. Employees in N/I panels will be allocated to night shift before I, D/I and E/I, in that order.
9. Employees in I panel will fill in where required after D/I, E/I and N/I have been allocated, in that order.
10. Casual employees will only be allocated once all permanent employees are exhausted in the allocation process.
11. Once employees have been allocated to shifts, the following arrangements will apply where work is subsequently not required on those shifts:
(a) Day and Evening shift Monday - Saturday - 4-hour walk up start shall apply as additional hours towards the annual total.
(b) Night shift Tuesday to Saturday - shift may be cancelled without penalty and, where the employee agrees, the employee may be reallocated to a shift later that day. Advice of such cancellation shall be given no later than 0900 or if cancelled after 0900 a 4 hour walk up start shall apply as additional hours towards the annual total.
(c) All Sunday shifts, public holiday shifts - shift may be cancelled without penalty and employees reallocated to subsequent shifts. An employee may only be reallocated to a subsequent shift on the same day by agreement. Advice of such cancellation shall be given by 0900 Saturday for Sunday night shift and day shift and 0900 Sunday for Sunday evening shift and Monday night shift and any subsequent public holiday shifts or if cancelled after 0900 4 hour walk up start shall apply as additional hours towards the annual total.
(d) Notification time for all Sydney cancellations will be 0800, based on the earlier shift start times.
12. Employees shall not work more than 6 days in a row, with the option of volunteering up to 10 days in a row at Brisbane Container Terminal only, including days off for personal leave.
13. 8th week is OFF unless the employee is more than 30 worked hours behind on the pro rata to annual hours. Employees will be advised of any such deficit through weekly posting of annual hours.
14. Employees may scratch for up to 8 days across each roster cycle, provided that the Company is notified of such scratchings before 1500 on the day prior to notification of allocation. Earlier notification is encouraged. Scratchings are zeroed each roster cycle.
15. The Company may limit the number of employees able to scratch on any given day, or for any particular shift, where skills are an issue.
16. The Parties will review any issues with scratchings during the regular review
processes.
17. Level 5 employees and maintenance employees covered by this Agreement will work in accordance with rostering arrangements to be agreed locally.
18. Annual hours shall recommence and shall be zeroed on July 1 of each year”.
[7] Schedule 4 of the Agreement operates in the context of other clauses in the main body of the Agreement including:
• Clause 15 Remuneration;
• Clause 16 Allocation and Working Arrangements;
• Clause 17 Overtime; and
• Clause 18 Leave Entitlements and Public Holidays.
EVIDENCE AND SUBMISSIONS
CFMMEU
[8] The CFMMEU submits that, in accordance with clause 5, the Agreement sets up an “agreed framework which caters for the employer’s system of work and unique position as a new and growing stevedoring operator in Australia”. 9 As part of this framework, the Agreement provides two alternative rosters, referred to in the Agreement as “Phase 1” and “Phase 2” rosters. All Brisbane employees are on the Phase 1 roster.
[9] As to the context and purpose of the Agreement, the CFMMEU submits that the Agreement establishes an agreed framework in which:
a. The intent of the parties is established by clause 5 of the Agreement and includes arrangements designed to enable the employer to “successfully establish, grow and maintain … container terminal[s]”. It is also recognised that job security, earning capacity and equity of work agreements are important to the employees and the Union;
b. employees agree to provide a minimum number of hours per annum (1560 hours annually as per clauses 15, 16 and Schedule 4 of the Agreement) in exchange for the payment of a retainer of 30 hours per week. There is no maximum cap on annual hours;
c. employees who provide more than their minimum annual hours requirement of 1560 hours are to be remunerated with the payment of overtime (clauses 15.6, 16.2, and 17.9 and Roster Rule 4);
d. the employer is provided maximum flexibility by ensuring that employees are available to be rostered and allocated individually in a flexible manner (clause 16.1) in accordance with the stated intent (clause 5);
e. employees sacrifice roster certainty (clause 16.5) in exchange for the payment of a retainer and the potential to share in productivity achievements if they provide more than their required 1560 annual hours (clauses 15.6, 16.2, and 17.9 and Roster Rule 4) meeting the stated intent of employees and the union to maximise ‘job security, earning capacity and equity of work’ (clause 5). 10
[10] In relation to Question 1(a) the Agreement provides at clause 16.2 that “Employees shall work in accordance with the arrangements detailed in the following sub-sections and the roster and related rules in Schedule 4”. The CFMMEU submits that the word “shall” provides a clear requirement that employees work 1560 hours annually, in accordance with Roster Rule 1 in Schedule 4. The Commission must therefore consider how the 1560 hours are constituted “in any year”. 11
[11] Roster Rule 1 provides that employees must be available to be allocated to shifts in accordance with the roster, “subject to any agreed leave arrangements”. The CFMMEU submits that the word “any” is relevant here, and to the determination of the answer to question 1(c). Roster Rule 2 provides that “annual hours” are based on a 30-hour week; and clause 16.3 of the Agreement provides that “Normal working shifts shall be 8 hours in duration”. Roster Rule 2 also provides that annual hours “include” leave, and provides the basis for how that leave is calculated.
[12] The CFMMEU submits that “include” means “take in, count” or “to take in or comprise as part of a whole or group”. 12 In its submission, the CFMMEU states that Roster Rule 2 has the effect of leave hours comprising part of the whole annual hours to be worked by employees in any year. It further submits that this submission is supported by the Respondent’s own practice and that the evidence shows the Respondent counts annual leave, personal leave and accrued days as counting for the purposes of annual hours, “but only in relation to such hours accrued prior to employees reaching 1560 hours in any year”.13
[13] The CFMMEU submits that the dispute has arisen due to Hutchison’s differential treatment of trade union leave hours, annual leave hours, personal leave hours and accrued days after an employee has exceeded their 1560 annual hours requirement. 14 It is the CFMMEU’s submission that it is immaterial when an employee accesses annual leave, personal leave or accrued days, and that each of these periods count towards an employee’s annual hours for the purposes of the Agreement. The CFMMEU submits that it cannot be said those hours count towards the annual total pre-1560 hours, and not post-1560 hours.
[14] The CFMMEU submits that there is no ambiguity in the Agreement regarding what constitutes the 1560 annual hours for the purposes of Schedule 4; the total “includes” annual hours work and leave hours as agreed and when taken. Therefore, it submitted the answer to Agreed Question 1(a) is “yes”.
[15] In relation to Question 1(b) the CFMMEU submits that Roster Rule 4 provides that “once the 1560 annual hours have been worked in any year, the employee will be paid 30 hours at the Level 1 ordinary rate each week, plus the applicable overtime rate for each shift worked in the week, plus any extensions or preparatory/closing work performed during the week”. The CFMMEU also submits that there is no ambiguity to these words, and how the agreed framework is to operate. It submitted that, where an employee has reached 1560 annual hours in any year, “which includes any leave hours taken in accordance with Roster Rules 1 and 2”, an employee is to be paid 30 hours at their Level 1 ordinary rate of pay for each week, plus relevant overtime as provided in clause 17.9. 15
[16] In regard to its assertion that Hutchison Ports is engaging in the differential treatment of hours, and in relation to question 1(b), the CFMMEU submits that:
“…where an employee exceeds the 1560 annual hours requirement, whether by a combination of hours actually worked or agreed leave arrangements, every post-1560 hour, whether actually worked or agreed leave, ought to be treated in the same way as every pre-1560 hour of the same type. It follows that every post-1560-hour ought to be treated equally, and therefore remunerated in accordance with clauses 15.6, 16.2, and 17.9 and Roster Rule 4”. 16
[17] In support of the above, the CFMMEU called evidence from a number of witnesses. Mr Wallin’s evidence was that Hutchison Ports treats employees differently, based on when they access annual leave, personal leave or accrued days. The annual roster begins on 1 July each year and ends on 30 June the following year, and within that period employees are required to provide 1560 hours.
[18] Mr Wallin said that at the end of December 2017, he had accrued 846 hours towards his 1560 hour annual requirement. From January 2018 to June 2018, he accrued additional hours towards his annual requirement, including actual hours worked, annual leave (which contributed 120 hours to his annual requirement), accrued days and personal leave. He stated that for the days he accessed personal leave and took accrued days, he was credited 8 hours per day towards his annual requirement of 1560 hours. Mr Wallin also said that as a result, he reached his required annual hours on 9 June 2018. His evidence was that on 9 June 2018, 2 hours of work was paid at the Level 1 Ordinary Rate of pay, and the remaining 6 hours paid as overtime (due to those hours being post-1560 hours).
[19] Mr Tetohu’s evidence was that he had taken approved annual leave for the period 19 June 2017 to 25 June 2017, after having reached his 1560 annual hours requirement and was paid his retainer for that period of annual leave, but did not receive his additional overtime payment. Mr Branford gave evidence that on 23 June 2018, he had taken an accrued day off, with the agreement of Hutchison Ports, and after having reached his 1560 annual hours requirement. Mr Branford was paid his retainer for the accrued days, but did not receive any overtime payment.
[20] Mr Flaksbard gave evidence that on 19 and 20 June 2018, he took trade union leave with the approval of Hutchison Ports; and that prior to taking this leave, he had reached his 1560 annual hours requirement. Mr Flaksbard said that for these days he was paid his retainer but no additional overtime payment. Mr Flaksbard corresponded with Mr Terry Rosengarten about this matter and received the following email on 6 July 2018:
“Hi Diego, regarding the issue of payment of the Union leave the Company does not believe that leave (whether it be annual, personal, Union etc) attracts the overtime rate under the EA even though the employee may have exceeded the 1560 hrs. As such any Union leave hours over the 1560 would have been paid at the ordinary rate of pay.
For information the matter is in dispute between the Company and the Union. Discussions are scheduled next week which include, amongst other things, this matter.
I will leave the other questions to payroll”.
[21] Mr Adams’ evidence was that on 6 June 2016, he reached his 1560 annual hours requirement. Mr Adams stated that he was paid his 30 hour retainer, plus overtime for work performed on 7 June 2016 to 25 June 2016. Mr Adams then took annual leave from 26 June 2016 to 1 July 2016, with the agreement of Hutchison Ports. For this period, he was paid his retainer but did not receive overtime payments for these hours.
[22] Mr Petersen stated his belief that the “first case of the Respondent not properly applying the 1560 hours annual requirement and the Roster Rules occurred in 2016 tax year”. He gave evidence that he attended a meeting on 27 July 2016, at which the then-regional manager for Hutchison Ports stated: “No additional payment for annual leave post 1560”. He stated this matter was again raised at a meeting on 4 May 2017 where a Human Resources representative said:
“Annual leave post 1560 will be paid at level 1 day shift. Overtime payments are for shifts worked only and annual leave is not a shift worked. This is how it was paid last year and will be paid the same as last year. The business will not disadvantage employees for taking their annual leave throughout the year”.
[23] Mr Petersen said that there was further debate on this matter at the 7 June 2018 meeting, the minutes of which record him stating: “The union believes that an employee, upon reaching the 1560 hrs threshold, and who then takes annual leave should be paid the retainer and receive their annual leave payment”. Mr Petersen tendered the minutes of those meetings.
[24] The issue was escalated to national level discussions; and on 10 July 2018, the National and Branch officials of the CFMMEU met with the National and Local management of Hutchison Ports. Mr Petersen’s evidence was that, despite lengthy discussions, the matter remained unresolved.
[25] The CFMMEU submits on the basis of the above matters that the answer to Agreed Question 1(b) is “yes”. The CFMMEU also submits that Roster Rule 1 must be considered in answering Agreed Question 1(c). Roster Rule 1, in the CFMMEU’s submission, relies on “any” agreed leave arrangements. It submits that clause 2.7 of Schedule 6 of the Agreement provides for Trade Union Leave, which is a “form of leave that can be taken by an employee with the agreement of the employer”. 17 The CFMMEU submits that it is “clear” that Trade Union Leave is a form of “any agreed leave arrangements” for the purposes of Roster Rule 1, and therefore the answer to Agreed Question 1(c) is “yes”.
Hutchison Ports
[26] In relation to Question 1(a) Hutchison Ports accepts that prior to an employee achieving the 1560 minimum hours in any year:
“(a) any period of approved annual leave hours, taken as leave, is counted by the Respondent for the purposes of the total number of hours referable to the 1560 minimum annual hours requirement;
(b) any period of approved personal leave hours, taken as leave, is counted by the Respondent for the purposes of the total number of hours referable to the 1560 minimum annual hours requirement;
(c) any period of approved Trade Union Training leave hours, taken as leave, is counted by the Respondent for the purposes of the total number of hours referable to the 1560 minimum annual hours requirement; and
(d) any period of approved accrued days (hours), taken as time off in lieu, is counted by the Respondent for the purposes of the total number of hours referable to the 1560 minimum annual hours requirement.” 18
[27] Hutchison Ports submits that accrued annual leave and personal leave hours “that have been taken as such” constitute hours counted towards the individual employee’s 1560 hours requirement, pursuant to Schedule 4 Roster Rule 2 of the Agreement. However, Hutchison Ports does not accept that any period of “leave” taken as leave is time worked “for any other purposes”. 19 Hutchison Ports submits that the answer to question 1(a) is “no”.20
[28] In relation to Question 1(b) Hutchison Ports submits that the Level 1 Ordinary Rate of Pay, as referred to in Roster Rule 4, is set out in clause 15.4 of the Agreement. As of 1 March 2018, the full time ordinary rate of pay for a Level 1 employee is $42.45 per hour. 21 Hutchison Ports submits that where “additional shifts” are worked by an employee, post-1560 hours, such hours are paid at the “secondary time rate” in accordance with clause 17.9 of the Agreement, which provides:
“17.9 Extensions and hours worked beyond 1560 hours (including extensions beyond 1560) will be paid at the following multiples of the secondary time Level rate (clause 15.6 rate) appropriate to the work being performed on the overtime shift:
• Monday to Saturday – double time
• All shifts on a Sunday and public holiday day and evening shifts – double time and a half
• Public holiday night shifts – triple time”. (Hutchison Ports’ emphasis)
[29] Hutchison Ports submits that the payments under clause 17.9 are made in addition to the payment of the weekly retainer, that is, 30 hours at the Level 1 Ordinary Rate pursuant to Schedule 4, Roster Rule 4.
[30] In compliance with Roster Rule 4, Hutchison Ports submits that where an employee, who has completed their 1560 annual hours, is required to work at the Brisbane Terminal in a manner that “invokes the applicable overtime rate of pay for the shift actually worked”, that employee is entitled to be remunerated at the overtime rate in addition to the payment of 30 hours at the Level 1 Ordinary Rate, “described at the Brisbane Terminal as the ‘retainer’”.
[31] Hutchison Ports submits that the hours that attract the overtime rate mustbe:
(a) hours worked beyond 1560 hours; and
(b) referable to work performed at the Brisbane Terminal on an actual overtime shift.
[32] Hutchison Ports submits that it does not consider taking a period of annual leave, personal leave, or trade union training leave as “working hours beyond 1560 hours” or “performing work at the Brisbane Terminal on an overtime shift”. In these circumstances the employee is “on a period of approved leave”. 22
[33] As to the word “worked” in Roster Rule 4, Hutchison Ports refers to the decision of Transport Workers Union of Australia v Jetstar Services Pty Ltd 23(Jetstar decision), in which Deputy President Sams determined that interpretation of the ordinary meaning of the word “worked” was the “crux of the dispute”, and for this purpose adopted the approach to interpretation set out in The Australasian Meat Industry Employees Union v Golden Cockerel Pty Limited.24 In the Jetstar decision, Deputy President Sams found that:
“The word ‘works’ or ‘worked’ must mean being physically at work and performing work or other functions associated with work, at the employer’s discretion”. 25
[34] The Deputy President further concluded that:
“…I cannot see how it is possible or logical that ‘work’ includes periods where no tasks are undertaken and nothing is made or done for the benefit of the employer. Axiomatically, this must include periods of annual leave, personal leave and other leave”. 26
[35] Hutchison Ports submits that while an employee is entitled to be paid in accordance with the Agreement or the NES for a period of annual leave, personal leave, or trade union training leave, that employee is not entitled to any amount described as “the applicable overtime rate for each shift worked in the week”, as the employee taking annual leave, personal leave, or trade union training leave has not “worked” for the purposes of Roster Rule 4.
[36] Hutchison Ports also submits that the Agreement must be read in conjunction with the National Employment Standards, and accordingly, any payment for “leave” must be paid at the higher of:
• The Level 1 Ordinary Rate of Pay; or
• The NES.
[37] In regard to each of the forms of leave subject to the dispute, Hutchison Ports submits as follows. In relation to annual leave, in accordance with the NES, where an employee takes a period of annual leave, the employer must pay the employee at the employee’s “base rate of pay for the employee’s ordinary hours of work in the period”. 27
[38] Section 16 of the Act provides that “base rate of pay” is the rate payable for an employee’s ordinary hours of work, and does not include, among other things, “overtime or penalty rates”. Hutchison Ports submits that the Level 1 rate of pay, in the circumstances, is the base rate of pay for annual leave, and that this amount “does not include any overtime or penalty payment”. 28
[39] Clause 18.3 of the Agreement provides that person leave is taken “In accordance with the relevant National Employment Standard and this agreement”. Further, clause 18.7 states personal leave shall be paid in accordance with the “relevant ordinary time Level ordinary rate of pay”. Hutchison Ports submits that this is consistent with s. 99 of the Act, which provides:
“If, in accordance with this Subdivision an employee takes a period of paid personal/carer’s leave, the employer must pay the employee at the employee’s base rate of pay for the employee’s ordinary hours of work in the period”. (Hutchison Ports’ emphasis)
[40] Hutchison Ports reiterates that the base rate of pay is defined at s.16 of the Act, and does not include overtime or penalty rates of pay. 29
[41] In relation to Trade Union training leave Hutchison Ports submits that the Agreement provides that trade union training leave is “time off work”. The Agreement also provides that such “time off work” is paid at the “Level 1 Ordinary Rate”. 30 Therefore where an employee has completed their 1560 annual hours, and obtains permission to attend trade union training leave, such hours are not hours worked and are paid at the ordinary rate of pay in clause 15.4 of the Agreement, and do not attract the “Overtime Multiples”.31 On this basis, Hutchison Ports submits that the answer to question 1(b) is “no”.32
[42] In response to the CFMMEU’s assertions about “differential treatment of hours”, Hutchison Ports disputes that it treats any form of leave differently pre- or post- the 1560 annual hours requirement. It submits that in each case, regarding trade union leave, annual leave, personal leave and accrued leave, the employee:
(a) makes application for the relevant leave;
(b) has the leave approved by the Respondent;
(c) takes the approved period of leave; and
(d) is paid in accordance with [the Agreement]”. 33
[43] With respect to Question 1(c) Hutchison Ports submits that subparagraph 2.7 of Schedule 6 of the Agreement states that trade union training leave, if requested, is in the circumstances “time off work”. Trade union training leave is not time worked by an employee, and therefore the answer to question 1(c) is “no”. 34
[44] Mr Rosengarten’s evidence can be summarised as follows. As part of his role, Mr Rosengarten has familiarity with administration of the payroll for those individuals employed by Hutchison Ports at the Brisbane Terminal and is familiar with the terms of the Agreement. Mr Rosengarten said that individuals employed at Brisbane are engaged as Operators – Level 1, and that the Agreement provides for two rates of pay in relation to such employees:
(a) Full Time Employee – Ordinary Rate is currently $42.45 per hour (as provided at clause 15.4) (Ordinary Rate); and
(b) Secondary Rate, applicable where an additional shift is worked by an employee at the Brisbane Terminal, after he or she has completed the required 1560 hours. The Secondary Rate is currently $33.28 per hour for a Level 1 employee (as provided at clause 15.7) (Secondary Rate). 35
[45] Mr Rosengarten stated that the Secondary Rate is used to calculate the “overtime multiple”, where an employee works an overtime shift, and this “overtime multiple” changes subject to whether the shift was worked Monday to Saturday, on a public holiday, on an evening shift, or on a public holiday night shift. 36
[46] In relation to the Roster Rules, Mr Rosengarten’s evidence was that in complying with the requirement to complete their 1560 hours, employees “bank” hours which are updated and displayed each fortnight. His evidence was that a table is published each fortnight on the employee noticeboard at the Brisbane Terminal and that employees check this table and generally know “where they are tracking” in relation to their required total hours. 37
[47] Mr Rosengarten stated that employees are paid the “Ordinary Rate” for all banked or accrued hours up to 1560 each year. The “banking” of hours is applied by Hutchison Ports “whether the employee is physically performing work or on approved leave or accessing time off in lieu”. 38 He added that the Ordinary Rate is applied to each hour in accordance with clause 15.4 of the Agreement.
[48] Mr Rosengarten stated that where an employee applies for and is granted a period of annual leave, where they have not yet “banked” or accrued 1560 hours in that year, the annual leave is paid at the Ordinary Rate. Annual leave is “only ever approved” at the Brisbane Terminal in “weekly blocks” and that the duration of this leave (30 hours) counts towards the 1560 minimum hours. 39
[49] Similarly, where an employee, who has not yet banked 1560 hours, is granted a period of personal/carer’s leave, this period is paid at the Ordinary Rate. Each approved day (8 hours) also counts towards the 1560 minimum hours. 40
[50] In relation to Trade Union training leave, Mr Rosengarten states that where an employee, who has not yet banked 1560 hours is granted a period of such leave, this period is paid at the Ordinary Rate. Each approved day (8 hours) counts towards the 1560 minimum hours. 41
[51] After an employee has banked or accrued 1560 hours in a particular year, Mr Rosengarten’s evidence is that for any additional shifts worked for the balance of the year, an employee is paid:
(a) 30 hours at the Ordinary Rate each week (the retainer); plus
(b) For all additional shifts worked at the Brisbane Terminal, the relevant overtime penalty calculated as a multiple of the Secondary Rate for each hour worked as part of such additional shift.
[52] Mr Rosengarten also stated that where an employee accesses paid leave entitlements after reaching their minimum 1560 hours in any year, for any such approved annual leave, personal/carer’s leave, trade union training leave, or accrued days, the employee “does not receive, and is not paid, the multiple of the Secondary Time Level Rate”. 42
[53] Mr Rosengarten said that he had reviewed the witness statements provided on behalf of the CFMMEU, and that in each case the witnesses made reference to periods of approved leave in circumstances where the witness had completed their 1560 hour minimum. Mr Rosengarten confirmed in response to these statements, that in each case “where the employee took the period of leave as approved, the Employee was paid the Ordinary Rate for Level 1”. 43
CFMMEU Reply
[54] The CFMMEU filed submissions in reply on 26 November 2018. In relation to Question 1(a)the CFMMEU submits that Hutchison Ports conceded in its submissions “the very matter at issue in the first and third questions…yet then seeks to avoid the consequences of that concession by sleight of hand”. 44
[55] The questions refer to leave periods, and whether they constitute hours worked for the purposes of Schedule 4. It submitted that, in this regard, Hutchison Ports has conceded that the forms of leave taken by employees illustrated in the CFMMEU’s evidence form part of the 1560 hours worked in a year. 45 The CFMMEU states that, despite such concession, Hutchison Ports then disputes that such leave periods are time “worked” for the purposes of Schedule 4. The Union argued that these are “contradictory positions”.46
[56] The Roster Rules provide that “Employees shall work 1560 hours annually” and “Once the 1560 annual hours have been worked in any year…” The CFMMEU submits that the “only purpose served” by the words “work” and “worked” in the Roster Rules, is to identify what hours contribute to an employee reaching the 1560 hours obligation. 47 Therefore the CFMMEU submits that as Hutchison Ports concedes that periods of leave taken are counted towards the total hours “worked”, its assertion that such hours are counted but are not “work” for the purposes of the Schedule is “mere sophistry”.48 The CFMMEU submits that, in accordance with Hutchison Ports’ submissions, employees work 1560 annual hours. Because the 1560 annual hours include leave hours, those hours are work.49
[57] Further, the CFMMEU submits that the current matter in dispute before the Commission is distinct from that assessed by Deputy President Sams in Jetstar. In that matter, the meaning of the word “work” was not defined in the Agreement itself, therefore the Deputy President relied on its ordinary meaning. The CFMMEU submits that the current matter is factually distinct, as a definition for the word “work” is supplied within the Schedule itself. The CFMMEU states that for the purposes of the Schedule, it is evident that the word “work” is “not being used in an ordinary sense” and “explicitly encompasses periods of leave when an employee is not ‘physically at work and performing work’”. 50
[58] The CFMMEU states that the terms of Roster Rules 1, 2 and 4 are “unambiguous” and provide that the relevant hours of leave are “counted” as “work” and “hours worked”. Further, the CFMMEU reiterates that Roster Rule 1 refers to “any agreed leave” which encompasses trade union leave. Therefore it submits that as Hutchison Ports conceded trade union leave is counted towards the 1560 annual hours obligation in the same way as other types of leave, trade union leave must also be “work” for the purposes of the Schedule.
[59] In relation to Question 1(b) the CFMMEU submits that Roster Rule 3 is “simple and unambiguous”, and requires payment of 30 hours at the Level 1 rate, for “each and every week of the year”. Further, it stated the Rule requires that premiums for particular types of shifts, and any leave, must be paid in addition to this “retainer”. 51
[60] The CFMMEU states that Hutchison Ports identified that the retainer is paid for each week of the year, “paid as a separate and independent amount, paid when the employee is not at work at all, paid irrespective of the total hours actually worked and paid irrespective of the penalties that apply to the hours actually worked”. 52 However, the CFMMEU submits that Hutchison Ports fails to properly apply Roster Rule 3, which results in a differential treatment of leave. Hutchison Ports pays the retainer plus relevant premiums, but “does not pay the retainer for the days that an employee is on leave”.53 The CFMMEU submits:
“That differential treatment becomes stark in the post-1560 period when employees who take their leave early in the year reach their 1560 obligation at the same time as those who have not yet taken any leave but are then paid premium rates on all hours, while those who take leave post-1560 are effectively penalised for not having taken their leave earlier and are paid only at the Level 1 ordinary rate”. 54
[61] Further, it is the CFMMEU’s submission that Roster Rule 3 makes clear an obligation that the retainer be paid “plus” any leave. The Agreement at clauses 18.3 and 18.11 provide that annual leave and personal leave are to be paid in accordance with the NES and the Agreement. The CFMMEU submits that the words “and this Agreement” must be a reference to the regulation of leave in Schedule 4, including the requirement to pay for leave in addition to (“plus”) the retainer amount. 55
[62] The CFMMEU concedes that the Agreement provides for loading in relation to long service leave, and that the Agreement also provides for annual leave loading at clause 18.12. It concedes that, those loadings confirm it would be double-dipping for employees to be paid the retainer and their ordinary rate during a period of long service leave, or to be paid leave loading on top of payment for leave at the level 1 ordinary rate. 56 However, the CFMMEU states that the Agreement does not provide for absorption of payments for annual or personal leave into the retainer amount. Accordingly the parties have explicitly agreed that leave is paid “plus” the retainer.57
[63] Roster Rule 4 provides that after 1560 hours “have been worked”, an employee will be paid 30 hours at the Level 1 Ordinary Rate plus applicable overtime premiums. The CFMMEU submits that by virtue of Roster Rules 1 and 2, the hours worked includes leave taken and paid for. Therefore, it submitted that after an employee reaches its 1560 minimum hours, Hutchison Ports is required to pay that employee the retainer amount “as well as any relevant premiums”. 58 Additionally the CFMMEU submits:
“That Rule 4.4 is silent as to leave confirms that the obligations in 4.4 do not supplant or substitute for the entitlement in 4.3 to be paid leave in addition to payment of the retainer, but instead confer an entitlement to premium payments in respect of shifts, extensions and preparatory undertaken after reaching the 1560 hours obligation.
In the alternative, the meaning of “work” peculiar to the Schedule also applies to all the elements of Rule 4.4. In that case, employees on leave have had shifts allocated to them through the set roster for that leave period. Under Rule 4.4, they have “worked” the shift that had been allocated to them for the relevant period so are to be paid the “30 hours at the Level 1 for ordinary rate each week”, the retainer, plus the applicable overtime rate for each shift “worked” during that period, being the shift allocated to them under the roster for that period (day, evening or night)”. 59
[64] In accordance with these additional submissions, the CFMMEU reiterated that the answer to all three questions must be “yes”.
THE APPROACH TO CONSTRUCTION OF ENTERPRISE AGREEMENTS
[65] The approach to construing enterprise agreements was set out in a Decision of a Full Bench of the Commission in “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU) v Berri Pty Ltd 60 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 aide 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.”
[66] In CFMEU v Endeavour Coal Pty Ltd T/A Appin Mine 61a Full Bench of the Commission held that the context of an agreement provision is significant. In this regard, the Full Bench set out the explanation of this point by the NSW Court of Appeal in Mainteck Services Pty Ltd v Stein Heurtey SA,62emphasising the following matters:
• Until a word or phrase is understood in the light of the surrounding circumstances, it is rarely possible to know what it means 63 and there is always some context to any statement;64
• Language considered in its context will often have a clear meaning and context will often not displace that meaning – “but not always”; 65
• To state that a legal text is clear reflects the outcome of an interpretation process and means that there is nothing in the context that detracts from the ordinary literal meaning and cannot mean that context can be put to one side; 66
• The phrase used by Mason J in Codelfa 67“if the language is ambiguous or susceptible of more than one meaning” does not mean that the susceptibility of the language to more than one meaning must be assessed without reference to the surrounding circumstances and in order to determine whether more than one meaning is available it may be necessary to turn to context;68 and
• Context has also been described as surrounding circumstances and the meaning of terms normally requires consideration not only of the text, but of the surrounding circumstances known to the parties and the purpose and object of the transaction. 69
[67] The case law in relation to the approach to the construction of enterprise agreements makes it clear that context and purpose are relevant to the construction of provisions in an enterprise agreement and must be considered even where the words of the provision being construed appear, on their face, to have a clear and unambiguous meaning. There is always context to any term of an enterprise agreement and the presence or absence of ambiguity is in the eye of the beholder.
[68] The case law in relation to the approach to the construction of enterprise agreements makes it clear that context and purpose are relevant to the construction of provisions in an enterprise agreement and must be considered even where the words of the provision being construed appear, on their face, to have a clear and unambiguous meaning. The following observations of Madgwick J in Kucks v CSR are also apposite in the present case:
“It is trite that narrow or pedantic approaches to the interpretation of an award are misplaced. The search is for the meaning intended by the framer(s) of the document, bearing in mind that such framer(s) were likely of a practical bent of mind: they may well have been more concerned with expressing an intention in ways likely to have been understood in the context of the relevant industry and industrial relations environment than with legal niceties or jargon. Thus, for example, it is justifiable to read the award to give effect to its evident purposes, having regard to such context, despite mere inconsistencies or infelicities of expression which might tend to some other reading. And meanings which avoid inconvenience or injustice may reasonably be strained for. For reasons such as these, expressions which have been held in the case of other instruments to have been used to mean particular things may sensibly and properly be held to mean something else in the document at hand.
But the task remains one of interpreting a document produced by another or others. A court is not free to give effect to some anteriorly derived notion of what would be fair or just, regardless of what has been written into the award. Deciding what an existing award means is a process quite different from deciding, as an arbitral body does, what might fairly be put into an award. So, for example, ordinary or well-understood words are in general to be accorded their ordinary or usual meaning.”70
CONSIDERATION
[69] As a Full Bench of the Commission noted in Berri, the starting point for the construction of an enterprise agreement is the text of the disputed term. In the present case the dispute centres on Roster Rules 1, 2, 3 and 4. The essence of the CFMMEU’s argument is that the effect of those Rules is to designate leave as work, so that leave taken after the 1560 hours requirement has been met attracts the overtime payments in accordance with Roster Rule 4. The CFMMEU also asserts that this construction is supported by the fact that Roster Rule 3 requires that the retainer is paid in addition to leave. I do not accept that on a plain reading of these Roster Rules, that the construction posited by the CFMMEU is correct.
[70] Roster Rule 1 of Schedule 4 sets out a mandatory requirement – evidenced by use of the term “shall” – that employees “work” 1560 hours annually and are available to be allocated to shifts in accordance with the roster, subject to any agreed leave arrangements. Roster Rule 2 states that the annual hours – the 1560 hours that employees are required to work and to be available for rostering purposes – include any leave.
[71] It is not in dispute that leave taken by employees before the 1560 hours are expended, is counted in those hours and reduces the total required to be worked each year. This is clear from Roster Rule 2 which provides that the annual hours include leave counted at 30 hours per week with respect to annual leave and 8 hours per day with respect to personal leave and accrued days taken. On the plain words of Roster Rule 2, leave is not deemed to be work. Rather, leave taken before employees have worked 1560 hours is included in the sense that it is counted in the total of those hours so that employees who take leave before they have worked 1560 hours are not required to make up that time in order to meet their obligation to work and be available to be rostered for 1560 hours per annum.
[72] I do not accept that on its plain words Roster Rule 1 operates in conjunction with Roster Rule 2 so that leave counted within the 1560 annual hours is deemed to be time worked. Roster Rule 1 simply states the obligation placed on employees to work 1560 hours annually and to be available to be rostered to shifts in accordance with the roster, and that if agreed leave is taken before the 1560 hours are worked, that leave is included in the 1560 hours. This is clear from the fact that Roster Rule 1 stipulates that the 1560 hours required to be worked is subject to agreed leave arrangements and that Roster Rule 2 indicates that the annual hours includes leave. Roster Rule 4 then operates so that once the 1560 hours in any year (including agreed leave) have been worked the employee is paid overtime in accordance with that provision. The fact that agreed leave taken before the 1560 annual hours obligation is met is counted in those hours does not deem the leave to be work.
[73] Roster Rules 1 and 2 do not deal with any time (whether it is time worked or time taken as agreed leave) outside or in excess of the 1560 hours annually that employees are required to work or to be available to be rostered. Those rules operate only with respect to work or agreed leave within the 1560 hours.
[74] Roster Rule 3 provides that employees are paid 30 hours at the Level 1 ordinary rate each week plus payments for listed matters. Those matters are: higher duties payments for any shifts worked during the week; shift premiums applicable to any shifts worked in the week; plus extensions or preparatory/closing work performed in the week. All of those circumstances relate to work for which there is an additional payment in the Agreement which applies before the 1560 annual hours obligation is met. Roster Rule 3 also provides that employees are paid 30 hours at the Level 1 ordinary rate each week…“plus any leave as noted above”.
[75] The reference to leave “as noted above” in Roster Rule 3 refers to Roster Rules 1 and 2, which deal with leave taken before the 1560 annual hours obligation has been met for the purposes of counting that leave in the 1560 hours. Leave is the only item referred to in Roster Rule 3 which does not include a reference to work. This is consistent with the fact that generally employees who are on leave are not at work and are not working. The fact that the reference to leave is tacked onto the end of Roster Rule 3 does not result in leave being deemed to be work. As previously noted all of the other references in Roster Rule 3 are to work for which a higher payment is provided in the Agreement prior to the 1560 hours obligation being met. The inclusion of leave in Roster Rule 3 along with work that is remunerated at a higher rate notwithstanding that it is included in the 1560 annual hours obligation is indicative that leave is not considered to be overtime.
[76] The inclusion of a reference to leave in Roster Rule 3 simply reflects the fact that leave may be taken in days and that any day of agreed leave taken during a week is included in the thirty hours that is paid for the week in which it falls. Roster Rule 3 does not entitle an employee to be paid for leave in addition to the thirty hour retainer but simply provides that as noted above (in Roster Rules 1 and 2) leave taken before the 1560 hours annual obligation is met is counted as part of the 1560 hours. That Rule does not require that leave taken after the 1560 hours obligation has been met is considered to be overtime.
[77] Roster rule 4 applies “once the 1560 annual hours have been worked in any year”. Roster Rule 4 makes no mention of leave and deals only with work performed after the 1560 annual hours obligation has been met by employees. Derivatives of the term “work” appear in Roster Rule 4 in two places. Firstly, the Rule states that once the 1560 hours have been “worked” the rest of the provisions of the clause are triggered. The 1560 hours that have been “worked” for this purpose includes agreed leave in accordance with Roster Rule 2. As previously noted, nothing in the Roster Rules provides that leave counted in the 1560 hours by virtue is deemed to be work. Rather the rules provide that hours counted for the purpose of employees meeting their commitment to work 1560 hours per annum, include leave. Accordingly, the use of the term “worked” in the first part of Roster Rule 4 simply refers to employees having met the 1560 annual hours requirement through any combination of work and agreed leave. It is also possible that employees will not take any leave within the 1560 hours and that all of that period will be worked.
[78] Regardless, at the point the employee has worked 1560 hours or has worked an amount of hours and taken agreed leave totalling 1560 hours, Roster Rule 4 operates. At that point an employee is entitled to be paid 30 hours at the ordinary rate each week plus the applicable overtime rate, for each shift “worked” plus any extensions or preparatory/closing “work” performed during the week. The use of the terms “worked” and “work” in Roster Rule 4 relate to actual work after the 1560 annual hours requirement has been met. Roster Rules 1 and 2 do not apply to the work that is the subject of Roster Rule 4. It is also significant that Roster Rule 4 makes no mention of leave. Roster Rules 1 and 2 simply provide that agreed leave taken before the 1560 annual hours obligation has been satisfied is counted in the 1560 hours and do not give employees taking agreed leave after the 1560 hours obligation has been met, the right to be paid overtime for such leave.
[79] Given that the Agreement does not deem leave to be work, there is no reason why the term “work” should not be given its ordinary meaning of an employee being physically at work undertaking duties or tasks for the benefit of the employer. For these reasons, I have concluded that on the plain meaning of the text of the relevant Roster Rules, employees who take leave after they have expended the 1560 annual hours by working or while on agreed leave, are not entitled to overtime payments provided for in Roster Rule 4 for such leave. Rather, employees who take leave either before or after they have met the 1560 annual hours commitment, are paid for such leave at the Level 1 ordinary rate.
[80] This construction is also consistent with the Roster Rules read in the context of the Agreement as a whole. Clause 15 of the Agreement provides that employees are paid at the Level 1 ordinary rate or classification rate as applicable in accordance with the rostering details in Schedule 4. Upgrade payments apply on a shift basis where employees are deployed to a role that is above the Level 1 ordinary rate or classification rate as applicable. Clause 15.5 specifies shift premiums for shifts worked at various times. Clause 15.6 specifies that “Overtime for extensions at any time, or for additional shifts worked by employees after the required annual roster hours have been worked shall be paid at the secondary time rate applicable to the level for the role performed on the extension or additional shift concerned, and paid in accordance with clause 17 of this Agreement.” The secondary time rates are set out in clause 15.7 of the Agreement and are expressed as hourly rates. Clause 15.9 provides for employees to be deployed to various roles within Terminals and sets out Level rates applicable for various roles, with Level 1 being general duties.
[81] By virtue of clause 16 of the Agreement, employees are required to work in accordance with the arrangements in that clause and the roster and related rules in Schedule 4. Clause 16.1 provides that the Company can roster and allocate any employee individually in a flexible manner in accordance with the arrangements in the Agreement. There is a table in clause 16.10 setting out start and finish times for various shifts and classifications and providing for extensions to the end of shifts of 1 or 2 hours as required and that a 3rd and 4th hour may be worked by volunteers only. Clause 17 deals with overtime and provides that it will be worked and paid in accordance with the clause. The clause requires that employees work a reasonable amount of overtime to meet operational requirements and goes on to set out rates for extensions of rostered shifts and extensions and hours worked beyond 1560 hours. Various multiples of the secondary rate are payable, depending on particular days upon which extension of a rostered shift or time beyond 1560 hours is worked. Clause 17.15 also provides that employees may be required to work up to 30 minutes on preparatory or closing work and are paid for such work at the secondary rate.
[82] Leave entitlements are dealt with in clause 18 of the Agreement. Clause 18.1 provides that leave entitlements shall accrue and be paid at the level 1 ordinary rate of pay or the employee’s appointed classification rate. The forms of leave dealt provided for in clause 18 are Long Service Leave; Personal Leave; Annual Leave and Parental Leave. Clause 18 also sets out provisions relating to public holidays. Clause 18.13 contains a requirement that all periods of leave, other than personal/carer’s leave due to unanticipated illness or injury, must be applied for by the employee and agreed by the Company in advance of such leave being taken. That clause further provides that each week of leave is taken from the Monday of each week and the five days of leave include being off roster on the following Saturday and Sunday. Clauses 18.2 and 18.12 state that long service leave loading and annual leave loading are factored into the Level ordinary rates of pay.
[83] There is nothing in any of the clauses dealing with hours of work and overtime to suggest that payments for overtime attach to anything other than work. The overtime provisions in clause 15.6 of the Agreement refer to additional shifts worked by employees after the 1560 annual hours obligation has been met. Employees who are taking leave are not working. I do not accept the CFMMEU submission that employees on leave have shifts allocated to them in accordance with the set roster. The Roster Rules provide flexibility for the Company to roster employees as required, subject to the order set out in the Rules. There is nothing to suggest that employees who take agreed leave are considered to be allocated to the roster for any period of leave before or after they have met their annual hours obligation.
[84] Similarly there is nothing in any of the leave provisions to indicate that employees who take leave after they have met their 1560 annual hours obligation are entitled to overtime payments. The terms of the Agreement in relation to when and how leave is to be taken do not indicate that employees on leave are deemed to be at work.
[85] A further contextual matter is the reference in the annual leave and personal leave clauses to such leave being in accordance with the National Employment Standards (NES) and the Agreement. NES provisions in relation to such leave require that it is paid at the base rate of pay as defined in s. 16 of the Act, which does not include overtime or penalty rates of pay.
[86] There is no evidence that when the Agreement was made employees were told that they would be paid overtime for periods of leave taken after they had met their 1560 hours obligation or that there has ever been a practice whereby employees have received such payments. There are no other contextual matters to contradict the plain meaning of the terms of the Agreement.
[87] I do not accept the submission of the CFMMEU that the construction of the Agreement that I favour results in differential treatment of leave based on whether it is taken before or after an employee has met the 1560 hours obligation. In all cases leave is treated in the same way. The employee is paid for the period of leave at the Level 1 ordinary rate regardless of when the leave is taken. It is also the case that Annual leave and long service leave loadings of 27.5% are factored into Level rates. Generally annual leave loadings are to compensate employees during periods of leave for shift loadings and other penalties that they would receive while at work. For employees to be paid at overtime rates for a period of leave which already contains a leave loading, would constitute double dipping and I can see no basis for a construction of the Agreement which allows this to occur absent a clear indication in the terms of the Agreement.
[88] It is also the case that if Roster Rule 3 operates in the manner contended for by the CFMMEU and requires that employees be paid their retainer plus leave, then it must operate in that manner with respect to all leave regardless of whether it is taken before or after employees have met their 1560 annual hours obligation. The effect would be that employees who took leave before meeting their 1560 annual hours obligation would be paid twice for the leave by being paid the 30 hour retainer for the week and for the leave in addition. Employees who took leave after meeting their 1560 annual hours obligation would be paid the level 1 hourly rate for the week and overtime rates for the leave. Such payments would compound the leave loading which is in the Level 1 hourly rate. This construction is contrary to the context and evident purpose of the Roster Rules, the hours of work and overtime provisions and the leave provisions in the Agreement.
[89] In summary, the Roster Rules establish a weekly base retainer of 30 hours at the Level 1 rate and an obligation for employees to be available to be rostered to work 1560 annual hours. The Roster Rules also establish that leave taken before the 1560 hours obligation has been met, count towards meeting that obligation. Further, the Roster Rules read in conjunction with the substantive terms of the Agreement in relation to leave, provide that while taking leave employees are paid the Level 1 rate – for 30 hours if leave is taken for a week or 8 hours if it is taken as a day or days – which includes leave loading. Leave is treated and paid in this manner regardless of whether the leave is taken before or after the 1560 annual hours obligation has been met. This treatment is consistent with the plain meaning of the terms of the Agreement and the entitlements of employees under the NES.
CONCLUSION
[90] For these reasons, I answer the Questions for Arbitration as follows:
Question 1
Having regard to Schedule 4 of the Agreement, the National Employment Standards, and to the evidence adduced by the employees listed in Schedule A and such other matters the Commission using its powers pursuant to section 739 of the Fair Work Act, 2009 (Cth) deems relevant:
a. do annual leave hours, personal leave hours and accrued days, when taken, constitute hours that have been worked in any year for the purposes of the Application of Schedule 4, Phase 1 Roster and the Roster Rules?
Answer: No.
Question 2
b. are post-1560 hours, regardless of type, to be remunerated in accordance with Roster Rule 4 of Schedule 4 of the Enterprise Agreement (i.e. overtime)?
Answer: No.
Question 3
c. does trade union leave, when taken, as provided for in clause 2.7 of Schedule 6 of the Enterprise Agreement, constitute hours that have been worked in any year for the purposes of the Application of Schedule 4, Phase 1 Roster and the Roster Rules?”
Answer: No.
DEPUTY PRESIDENT
Appearances:
Mr D Quinn of Holding Redlich for the Applicant.
Mr P Brown of Baker & McKenzie for the Respondent.
Hearing details:
Brisbane.
17 December.
2018.
Printed by authority of the Commonwealth Government Printer
<PR709061>
1 Applicant’s Submissions dated 12 October 2018 at [5]; Witness Statement of Paul Petersen dated 12 October 2018.
2 Witness Statement of Trevor Wallin dated 12 October 2018 – Exhibit A1.
3 Witness Statement of Jean Tetohu dated 11 October 2018 – Exhibit A2.
4 Witness Statement of Ronald Ranford dated 11 October 2018 – Exhibit A3.
5 Witness Statement of Paul Petersen dated 12 October 2018 – Exhibit A4.
6 Witness Statement of Diego Flaksbard dated 10 October 2018 – Exhibit A5.
7 Witness Statement of Lance Adams dated 11 October 2018 – Exhibit A6.
8 Witness Statement of Terence Rosengarten dated 17 December 2018 – Exhibit R1.
9 Applicant’s Submissions dated 12 October 2018 at [6].
10 Ibid at [36].
11 Ibid at [24].
12 Ibid at [27]; Chambers Compact Dictionary 1969; Merriam Webster Dictionary online.
13 Applicant’s Submissions dated 12 October 2018 at [28].
14 Ibid at [30].
15 Ibid at [34].
16 Ibid at [40].
17 Ibid at [31]; Witness Statement of Diego Flaksbard dated 10 October 2018.
18 Respondent’s Outline of Submissions dated 9 November 2018 at [10].
19 Ibid at [11], [55].
20 Ibid at [55].
21 Ibid at [15].
22 Ibid at [21].
23 [2017] FWC 2535.
24 [2014] FWCFB 7447.
25 [2017] FWC 2535 at [46].
26 [2017] FWC 2535 at [49].
27 Fair Work Act 2009 (Cth) s.90(1).
28 Respondent’s Outline of Submissions dated 9 November 2018 at [36].
29 Ibid at [43].
30 Ibid at [46]-[47]; Schedule 6 Subparagraph 2.7 of the Agreement.
31 Respondent’s Outline of Submissions dated 9 November 2018 at [49]-[50].
32 Ibid at [55].
33 Ibid at [7].
34 Ibid at [46], [49], [55].
35 Witness Statement of Terence Rosengarten dated 17 December 2018 at [5].
36 Ibid.
37 Ibid at [7].
38 Ibid at [8].
39 Ibid at [9].
40 Ibid at [10].
41 Ibid at [10].
42 Ibid at [13].
43 Ibid at [14]-[16].
44 Applicant’s Submissions in Reply filed 26 November 2018 at [1].
45 Ibid at [3]; Respondent’s Outline of Submissions dated 9 November 2018 at [8].
46 Applicant’s Submissions in Reply filed 26 November 2018 at [4].
47 Ibid at [5].
48 Ibid at [6].
49 Ibid at [7].
50 Ibid at [13].
51 Ibid at [18].
52 Ibid at [20].
53 Ibid at [21].
54 Ibid at [21].
55 Ibid at [24].
56 Ibid at [26].
57 Ibid at [27].
58 Ibid at [28].
59 Ibid at [29].
60 [2017] FWCFB 3005.
61 [2017] FWCFB 4487.
62 [2014] NSWCA 184 at [71]-[85].
63 Manufacturers’ Mutual Insurance Ltd v Withers (1988) 5 ANZ Ins Cas 60-853 at 75-343.
64 Kirin-Amgen Inc v Hoechst Marion Roussel Ltd [2004] UKPC 6; [2005] 1 All ER 667 at [64].
65 Project Blue Sky v Australian Broadcasting Authority [1998] HCA 28; 194 CLR 355 at [78].
66 Charter Reinsurance Co Ltd v Fagan [1997] AC 313 at 391 per Lord Hoffman, approved in Campbell v R [2008] NSWCCA 214; 73 NSWLR 272 at [48] (Spiegelman CJ, Weinberg AJA and Simpson J agreeing) and Dale v The Queen [2012] VSCA 324 at [73].
67 Codelfa Construction Proprietary Limited v State Rail Authority of NSW (1982) 149 CLR 337.
68 Franklins Pty Ltd v Metcash Trading Ltd [2009] NSWCA 407; 76 NSWLR 603 at [17] cited in Mainteck Services Pty Ltd v Stein Heurtey SA (2014) 310 ALR at [71] – [85].
69 Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52; 219 CLR 165 at [40].
70 Kucks v CSR Limited (1996) 66 IR 182 at 184.
1
14
0