Construction, Forestry, Mining and Energy Union v Eastcoast Development Engineering Pty Ltd
[2015] FWC 5991
•2 SEPTEMBER 2015
| [2015] FWC 5991 |
| FAIR WORK COMMISSION |
RECOMMENDATION |
Fair Work Act 2009
s.739 - Application to deal with a dispute
Construction, Forestry, Mining and Energy Union
v
Eastcoast Development Engineering Pty Ltd
(C2015/2027)
Building, metal and civil construction industries | |
SENIOR DEPUTY PRESIDENT RICHARDS | BRISBANE, 2 SEPTEMBER 2015 |
Alleged dispute about any matters arising under the enterprise agreement and the NES;[s186(6)].
Summary: various issues in dispute - access to accruals for weekend overtime - whether ordinary hours worked on weekends - travel time to satellite site - the nomination of character of project for purposes of allowances – limits to conduct regulated by agreement.
[1] On 23 March 2015, the CFMEU notified a dispute under section 739 of the Fair Work Act 2009 ("the Act") in relation to various issues arising under the EDE Regional Works Enterprise Agreement 2012 (“the Agreement”), to which the employer party is Eastcoast Development Engineering Pty Ltd (“the Employer”).
[2] As the dispute has been on foot for some time, I sought the advice of the parties as to whether a recommendation might be made about the various matters in contention. After some initial disagreement, the parties consented to the following set of questions posed by the Commission as the focus for the recommendation:
1. Are the employees employed under the EDE Regional Works Enterprise Agreement 2012 performing ordinary hours or overtime on Saturdays and Sundays?
2. Is the Employer obligated to allow an employee to draw down on his or her accrued personal/carer’s leave entitlement for any appropriate absence during hours of work performed on either Saturdays or Sundays?
3. When does work commence for purposes of remuneration; upon arrival at the pre-start meetings at the designated pre-start locations, or at the point in time employees must present at the accommodation camp for Employer provided travel to the designated pre-start location?
4. Once the Employer nominates the project as a “major works project” for purposes of the “Major Work Uplift Allowance”, can the Employer cease the nomination (upon the project moving to an operational or maintenance project)?
[3] My recommendation in relation to each of these questions follows.
1. Are the employees employed under the EDE Regional Works Enterprise Agreement 2012 performing ordinary hours or overtime on Saturdays and Sundays?
[4] Sub clause 7.1 of the Agreement sets out the ordinary hours of work, and provides:
"The ordinary hours of work shall be an average of 36 hours per week to be worked over a nominated work cycle. The ordinary hours may be worked from 6.00 AM to 6.00 PM Monday to Friday.
The spread of hours may be altered by agreement to suit project requirements. It will be available to work alternate hours of work that provide an average of 36 hours a week over a nominated work cycle. The cycles may include weekends to suit project requirements and/or implement compacted work cycles […].
The weekend penalties for ordinary hours will be time and a half of the first two (2) hours and double time thereafter on Saturday; and double time for Sunday." (My emphasis)
[5] The CFMEU contends that the ordinary hours worked by the employees on the project comprehend hours worked on Saturdays and Sundays.
[6] The hours’ clause in the Agreement does make provision for ordinary hours to be worked across a weekend to accommodate a particular business case.
[7] There is, however, no evidence at this juncture that the Employer has set about to roster ordinary hours on a weekend for that purpose.
[8] In what has been put to me across the two conciliation conferences the employees are performing work across ordinary hours that fall Monday to Friday. That is, the employees perform duties across five days (Monday-Friday) at 7.2 hours per day to provide an average of 36 hours ordinary per week, and are paid at overtime rates on weekends. This is the structure of hours that allows for the operation of the 14-7 roster that is applied to the project. To my knowledge, there have been no steps taken in accordance with sub clause 7.1 of the Agreement to obtain the agreement of the employees to work other than the roster and the spread of hours as have been been worked.
2. Is the Employer obligated to allow an employee to draw down on his or her accrued personal/carer’s leave entitlement for any appropriate absence during hours of work performed on either Saturdays or Sundays?
[9] Given my view above, the hours worked on Saturdays and Sundays under the current arrangements are not ordinary hours, rather hours that must be worked as overtime. This is because sub clause 7.2, which is headed "Additional Hours/Overtime" provides as follows:
“It is a requirement that employees will work reasonable additional hours in excess of their ordinary hours. All time worked in excess of the work cycle’s ordinary weekly or daily hours or outside of the span of ordinary hours of work shall be paid as overtime at the following rates;
● Monday to Saturday at the rate of time and a half for the first two (2) hours and double time thereafter.
● All time worked on Sunday should be paid at double time.”
[10] The work performed outside of the ordinary Monday to Friday hours constitutes overtime hours and is paid as such.
[11] Employees who were absent during hours of work performed on weekends are therefore absent during overtime hours and not during ordinary hours.
[12] The Agreement stipulates that the accrual and associated arrangements for personal/carers’ leave is as follows:
8.2.1 Entitlement
A full-time employee shall accrue paid personal/carers leave at the rate of 10 days for each year of continuous service consistent with the Fair Work Act 2009. Personal/carers leave will be paid at the employee’s ordinary rate of pay for ordinary hours for the period of leave.
Personal/carers leave shall not apply for illnesses or injury covered by worker’s compensation. An employee shall not be entitled to be paid personal/carers leave for more ordinary hours than the employee would have worked on that day.
8.2.2 Payment
Personal/carers leave shall be paid at the employee’s ordinary weekly wage rate for ordinary hours and the employee must meet the following requirements:
• Have a credit entitlement to a period of leave,
• Notify the Employer of the absence as soon as possible,
• Advise the Employer how long the absence on personal/carers leave is likely to be,
• Provide evidence satisfactory to the Employer of the illness or injury. An employee
absent on personal/carers leave for more than two (2) consecutive days or on more
than two (2) single days in any year may be required by the Employer to produce a medical certificate from a qualified medical practitioner stating the nature of the illness and the period the employee will be unable to work.
8.2.3 Deduction from Personal/carers Leave Credits
Personal/carers leave debits will be equivalent to the ordinary hours an employee would have worked had they not been on sick leave.
[13] Section 99 of the Fair Work Act 2009 (“the Act”) provides as follows:
99 Payment for paid personal/carer’s leave
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. (My emphasis)
[14] The Agreement – consistent with s.99 of the Act - operates to provide an entitlement to an accrual in relation to absences because of personal/carers leave which arises in respect of ordinary hours of work. Work performed on rostered weekend overtime shifts does not give rise to an accrual as the hours that are worked on the weekend are not ordinary hours of work. Further, the Employer is not obliged to pay the employee at the base rate of pay for the applicable hours as the work that was to be performed (but for the absence) did not comprise ordinary hours of work.
[15] I add that some of the controversy in this matter appeared to arise because the Employer had ceased a practice of paying employees personal/carers’ leave for absences on rostered weekend overtime shifts. But the Employer, for its part, contends that it has never done so and the CFMEU has been incorrectly advised or instructed.
[16] It does appear to me that major project work in remote regions (where systematic, rostered weekend overtime as part of a regularised work cycle) does not readily accommodate the conventional ordinary hours based approach to accessing accruals in absences. At the very least, there are commonly held expectations that ordinary hours based accruals may be utilised for the purposes of offsetting an absence from a regularised weekend overtime roster on a remote site. But that observation is of little assistance to the CFMEU's argument.
3. When does work commence for purposes of remuneration: upon arrival at the pre-start meetings at the designated pre-start locations, or at the point in time employees must present at the accommodation camp for Employer provided travel to the designated pre-start location?
[17] It appears that the employees on the project are required to assemble at 6.00 AM each morning at the camp, upon being transported to a pre-start location (at what appears to be around 6.30 AM) where they participate in their pre-start briefing each day, undergo drug and alcohol testing etc.
[18] The issue recently arises as to whether the employees must be remunerated at their ordinary rate of pay from 6.00 AM or 6:30 AM at the pre-start location.
[19] Arguably, the employees are at the direction of the Employer at 6.00 AM (as the CFMEU contends). However, that direction is for the purpose of facilitating travel to the place of work at which the employee is then directed to perform work.
[20] In my view, the period of time between 6.00 AM and 6:30 AM is a period of travel and does not constitute a direction from an employer to perform work.
[21] An agreement might create an obligation upon an employer to compensate or else to provide a payment to an employee for the purposes of addressing a period of travel to site.
[22] Though the Agreement provides for travel payments in respect of R&R movements, the Agreement provides no such offsetting travel payment term in relation to movements from the accommodation camps to pre-start locations.
[23] This may be because the period of travel on projects such as this is often subject to considerable variation as the outlying project or projects progress and the distance from the camp accommodation alters.
[24] Be that as it may, there appear to be discretionary set – offs applied by the Employer on site, with employees who have spent more than 30 minutes travelling to the work site being released from work at a time which allows them to return to the accommodation camp at the same time as other work groups.
[25] The Employer also claims that it calculates payment to the employees not from the commencement of work as such, but from the point of arrival, as it were, at the work site, where the employees sign in, undergo drug and alcohol testing and engage in pre-start meetings. There was at least one other recent decision of the Commission brought to my attention that held that such activities were all pre-start activities and did not constitute paid time. I have not had need to investigate that issue for the current purposes.
4. Once the Employer nominates the project as a “major works project” for purposes of the “Major Work Uplift Allowance”, can the Employer cease the nomination (upon the project moving to an operational or maintenance project)?
[26] Sub clause 6.1 of the Agreement includes the following term:
“The ‘Major Work Uplift Allowance’ will be paid on project works nominated by the Employer as major works. In all other works such as maintenance and operations, the basic wage rate shall apply.”
[27] The issue that here arises is that the project was initially designated or nominated as a construction project and therefore as a “major work” for the purposes of the uplift allowance. The Employer contends that the construction phase has now ceased, and that the project is now an operational site. Consequently, the Major Work Uplift allowance is no longer applicable and the earlier nomination by the Employer has been rescinded.
[28] The CFMEU contends that the Agreement does not vest in the Employer a power to re-nominate the identity or character of the project and that the project having been nominated as a major works project must continue to be so nominated for the duration of all work on the project. It is apparent, the CFMEU contends, that the employees are still performing work of the same nature as they had in the period they had been paid the allowance, and they should continue to be paid the allowance (presumably for an indefinite period whilst their duties remained as they had been).
[29] In my view, it appears to be an unreasonable construction of the Agreement that a project which has the characteristics of being either maintenance and/or operations could continue to be characterised as a major work in accordance with an earlier nomination. This would mean that an employer could not oversee a project from construction to operation/maintenance and give effect to the purpose of sub clause 6.1 of the Agreement (which is to differentiate major works from maintenance and operations). It would also lead to a situation (depending on the stage of development in which the employer was contractually engaged) in which projects which were in operational stages were nominated differently, yielding different allowances on each site.
[30] The allowance does not appear to be related to the particular duties of the employees: it is the nature of the project and its developmental status that is relevant to the Employer’s decision making or nomination.
[31] It is not immediately obvious to me that the parties had a mutual understanding such that they foresaw that the major work uplift allowance would operate in such a manner.
[32] Notwithstanding this, it is also the case that the Agreement does not set out to regulate the means by which the Employer may re-characterise or re-nominate a project on the basis of its development. The Agreement regulates only the means of nomination of the character of the project for the purposes of paying an allowance.
[33] It would appear to me to be somewhat unusual if it were held that an agreement could regulate that which it does not set out to regulate (and in respect of which the parties appear to have had no mutual discernible interest or intention in regulating at the time the Agreement was made).
[34] It seems – at least from the Employer’s materials – that it did not set out to re-nominate the site without communication with its workforce. The Employer had explained to its workforce, so it says, that whilst the allowance was paid during a period (over 2014 in which the site was in an operational stage) the allowance was only extended at the direction of the client – QGC – and for the period of time that the client continued to provide compensation for the extended availability of the allowance.
[35] As a discretionary issue, it does not appear that the Employer – in this context - acted unreasonably in respect of its decision to re-nominate the site in the context of the changing operational circumstances.
Recommendation
[36] My views in respect of the above four issues constitute my recommendation in respect of this dispute notification. The recommendation, of course, is non-binding. The parties may reasonably disagree with some or all of my preliminary observations about the matters in contest. In that case, the arbitral pathway remains open to them.
SENIOR DEPUTY PRESIDENT
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