Construction, Forestry, Mining and Energy Union v Endeavour Coal Pty Ltd

[2017] FWC 1763

[2017] FWC 1763

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.739—Dispute resolution

Construction, Forestry, Mining and Energy Union
v
Endeavour Coal Pty Ltd
(C2016/6520)

DEPUTY PRESIDENT DEAN SYDNEY, 24 MAY 2017

Application to deal with a dispute about matters arising under the enterprise agreement.

[1] On 3 November 2016 the Construction, Forestry, Mining and Energy Union (CFMEU) filed an application pursuant to s.739 of the Fair Work Act 2009 (the Act) for the Fair Work Commission to deal with a dispute in accordance with clause 28 (Dispute Resolution Process) of the Appin Colliery & West Cliff CPP Enterprise Agreement 2015 (the Agreement).

[2] The Agreement applies to Endeavour Coal Pty Ltd (Endeavour) in respect to Appin Colliery (Appin) and the West Cliff Coal Preparation Plant (West Cliff), and its employees employed at Appin and West Cliff within the classifications set out in the Agreement. The nominal expiry date of the Agreement is 20 July 2018.

[3] The question I need to determine is whether the Agreement requires Endeavour to pay a shift loading in addition to public holiday penalties to employees covered by the Agreement who perform shift work on a public holiday. The resolution of the dispute therefore turns upon the interpretation of particular provisions in the Agreement.

[4] In doing so, I have had regard to the principles applicable to the construction of an enterprise agreement which were canvassed in detail in Australasian Meat Industry Employees Union v Golden Cockerel Pty Ltd (Golden Cockerel) 1.

[5] For the reasons set out below, I find that the answer to the question above is no, the Agreement does not require Endeavour to pay a shift loading in addition to public holiday penalties to employees who work on a public holiday.

Background

[6] Historically, separate enterprise agreements applied to Appin and West Cliff. Following the amalgamation of the operations at West Cliff and Appin, the current Agreement, covering both sites, was made.

[7] It was not disputed that historically, employees at West Cliff were not paid shift allowances in addition to the public holiday penalties for work on a public holiday, and Appin employees were paid the shift allowances in addition to the public holiday penalty rates. There was disagreement between the parties as to why this payment was made.

[8] It was also not contested that Endeavour had been paying both public holiday penalty rates and shift allowances for work on a public holiday at the commencement of the Agreement, however it had since ceased that practice, which gave rise to the current dispute.

[9] The hearing took place on 1 March 2017, with Mr A Thomas appearing on behalf of the CFMEU, and Mr Rauf of Counsel appearing on behalf of Endeavour.

Relevant provisions of the Agreement

[10] The following clauses of the Agreement are relevant to the current dispute.

[11] Clause 7.2 of the Agreement provides:

7.2 Payment of Shift Allowances and for Ordinary hours worked on a weekend

The payments for shift allowances and ordinary hours worked on a weekend are set out in Appendix 3 – Payment Rules. The weekend penalties apply from midnight to midnight on each of the weekend days.

[12] Clause 16.4 of the Agreement provides:

16.4 Payment for Recognised Public Holidays

Payment for Public Holidays is set out in Appendix 3 – Payment Rules.

Weekend roster Employees, will be paid for all recognised Public Holidays whether or not they form part of their roster.

[13] Appendix 3 of the Agreement provides:

APPENDIX 3 – PAYMENT RULES

Component

Payment Rule

Ordinary hours

Ordinary hours worked Monday to Friday inclusive are paid at the Employee’s Classification rate.

Ordinary hours worked on Saturday are paid at 1.5 times the Employee’s Classification rate for the first 4 hours and 2 times thereafter.

Ordinary hours worked on Sunday are paid at 2 times the Employee’s Classification rate.

Rostered Overtime

All rostered overtime is paid at 2 times the Employee’s Classification rate.

Non Rostered Overtime

weekday roster Employees

Non rostered overtime worked Monday to Saturday inclusive is paid at 1.5 times the Employee’s Classification rate for the first 3 hours and 2 times thereafter.

Non rostered overtime worked on Sunday is paid at 2 times the Employee’s Classification rate.

Non-rostered overtime for Employees who work a weekend roster or a roster incorporating Saturday and Sunday

All non-rostered overtime is paid at 2 times the Employee’s Classification rate.

Afternoon Shift Allowance

15% for ordinary hours at the Employee’s Classification rate.

Night Shift Allowance

25% for ordinary hours at the Employee’s Classification rate.

Casual Loading

25% for hours worked at the Employee’s Classification rate.

No 10 Hour Break between

work on successive days

Where an Employee works overtime, other than rostered overtime, and is required to have a 10 hour break between the end of that overtime and the start of the Employee’s ordinary hours of work on the next day there will be no loss of pay for ordinary hours of work which occur during this absence.

Where the Company instructs an Employee to resume work, not having had 10 consecutive hours off work, the Employee will be paid at 2 times the Classification rate during ordinary hours and thereafter until the Employee finishes work.

Public Holidays

An Employee who is not required to work during a Public Holiday will be paid for that Public Holiday at their Classification rate per hour for their normal rostered hours which fall during that Public Holiday.

An Employee required to work during a Public Holiday will be paid 2 times the Classification rate for the hours worked up to the hours calculated above in addition to the payment provided in above. For hours worked in excess of the above, an Employee will be paid 3 times the Classification rate.

An Employee who is not rostered to work during a Public Holiday shall be paid 7 hours at their Classification rate.

Annual Leave

Paid the greater of as if at work excluding any shift allowance; or the Employee’s Classification rate plus 20% leave loading for hours deducted.

Long Service Leave

For each week of leave paid 1 Ordinary weeks pay and the weekly Bonus.

Personal / Carer’s Leave

Paid the hours the Employee would have worked at the Employee’s Classification rate.

Parental Leave

Paid what the Employee would have been paid if they had been on Personal / Carers Leave.

Compassionate Leave

Paid what the Employee would have received if they had attended work.

Community Services Leave

Paid what the Employee would have received if they had attended work less any amount received from the Court or the Service.

Mines Rescue Training, Medical Examination, Annual One Day Refresher at SMRS

Where an Employee is to attend during a rostered shift they will be paid what the Employee would have received if they had attended work. If an Employee attends outside of a rostered shift then they will be paid the hours attended at the Overtime rate.

Accident Pay - 1st 39 weeks from date of injury, Clause 27.3 conditions met

A weekly payment representing the difference between the weekly amounts of compensation paid to the Employee by the WC Act and what the Employee would have received if they had attended work in accordance with Clause 27.

Accident Pay - 1st 39 weeks from date of injury, Clause 27.3 conditions not met

A weekly payment representing the difference between the weekly amounts of compensation paid to the Employee by the WC Act and the Employee’s Ordinary weeks pay and the Weekly Bonus.

Accident Pay - 2nd 39 weeks

A weekly payment representing the difference between the weekly amounts of compensation paid to the Employee by the WC Act and the Employee’s Ordinary weeks pay.

Employee Rehabilitation

An Employee at work on rehabilitation following a work related injury will be paid what they would have received as if they had attended work on the shift they were working when the injury occurred.

Workforce Representative approved absence from work up to 35 person days

Bonus only, provided that the Absence Request Form indicates the number of days that have already been paid in the year under this Clause.

Workforce Representative approved absence from work after 35 person days, or if the days taken number is not indicated on the Absence Request Form

Unpaid

Workforce Representative attendance at Company agreed meeting during rostered shift

Paid what the Employee would have received if they had attended work.

Workforce Representative attendance at Company agreed meeting outside of rostered shift

Paid for the duration of the meeting at the non- rostered Overtime rate.

Employee meetings

Paid 1 hour at the Employee’s classification rate, to a maximum of 4 meetings per year. A signed attendance sheet to be provided.

The evidence led by the parties

[14] Mr Craig Fisher and Mr David MacLachlan, both employees of Endeavour at Appin, gave evidence on behalf of the CFMEU. Mr Heath Hannigan and Mr Martin Aicken gave evidence on behalf of Endeavour.

[15] The evidence led by both parties focused on how public holidays on weekends were paid at each site under previously applicable agreements, and the content of the negotiations leading up to the making of the Agreement.

[16] Both parties submitted that it was only necessary for me to consider the evidence if I found there was ambiguity in the relevant clauses of the Agreement. Despite leading such evidence, they both submitted that no ambiguity arose 2. I agree with their submission.

[17] For the reasons set out below, I do not consider that there is ambiguity in the language of the Agreement. Accordingly, I do not need to have regard to the evidence led by both parties.

Matters agreed by the parties

[18] The parties accepted that:

a) the resolution of this current dispute involves a determination of the meaning of clauses 7.2, 16.4, and Appendix 3 - Payment Rules;

b) the role of the Commission in determining this dispute is to interpret those clauses of the Agreement;

c) it is not the role of the Commission in this matter to embark on a broader exercise considering the underlying merits of each party’s position; and

d) the dispute resolution procedure at clause 28 of the Agreement empowers the Commission to arbitrate this dispute.

Competing contentions

The CFMEU

[19] The CFMEU relies on the terms of the Agreement set out above to make good its case that Endeavour is required to pay a shift loading in addition to the public holiday rate for work performed on a public holiday 3.

[20] In its submission, it said that the plain and ordinary text of the Agreement, when considered in light of the context and purpose of the Agreement, demonstrated that the wording was plain on its face and there was no ambiguity 4.

[21] The CFMEU argued that Appendix 3 in its view was fundamental to the resolution of the current dispute 5. It submitted that the clauses within the Agreement are separate and discrete and provided different entitlements for different reasons. In particular, it argued that Appendix 3 provided separate and discrete payment rules for shift allowances, weekend penalties and public holiday penalties.

[22] In its written submissions, the CFMEU contended that Appendix 3 clearly set out each component and the corresponding payment rule, and that it was clear from the text of Appendix 3 that payment of a component was required once the respective payment rule had been satisfied.

[23] It argued that the words found in Appendix 3 relating to shift allowance had a plain and ordinary meaning. In this regard, it argued that it was the working of ordinary hours on an afternoon shift, as defined by clause 2 of the Agreement, that satisfied the payment rules in relation to shift allowance. It submitted that the Agreement made clear that the ordinary hours are an average of 35 hours per week over the roster cycle, and accordingly, Appendix 3 clearly provided that shift allowance must be paid on an employee’s ordinary hours.

[24] In relation to the payment rule applicable to circumstances where an employee is required to work on a public holiday, the CFMEU argued that it was the requirement to work on a public holiday that satisfied the particular payment rule. In this regard, it said that Appendix 3 clearly provided that the public holiday penalty rate must be paid when an employee is required to work on a public holiday. It argued that there was nothing in the text of Appendix 3, or indeed the rest of the Agreement, that supported an argument that the payment of one component (because the relevant payment rule had been satisfied) nullifies the payment of another component where the relevant payment rule had been satisfied.

[25] The CFMEU argued that Endeavour was wrong to submit that the components in Appendix 3 were mutually exclusive. It also argued that the words found in Appendix 3 (the payment rule) relating to work on a public holiday did not say that the public holiday penalty rate was the only amount to be paid for work performed on a public holiday. It submitted that if the mutual intention of the parties was that only the public holiday penalty rate was to be paid, the Agreement would have expressly said so. In this regard, the CFMEU relied on a decision of Deputy President Gostencnik in AMWU v RACV Services Pty Ltd 6, to argue that the absence of words in the Agreement which specifically stated that shift allowance was not paid where penalty rates or overtime applied, was fatal to Endeavour’s argument that the components in Appendix 3 were mutually exclusive or that the public holiday penalty rate ‘covers the field’.

[26] The CFMEU described its interpretation in closing oral submissions as follows:

“…if an employee works on afternoon shift or nightshift, under the Appendix, a particular allowance applies. Generally speaking, it’s 15%, or its 25% if you work a permanent night shift. If you work on a public holiday, the public holiday penalty applies. It follows, in our submission, that if an employee works on afternoon or nightshift on a public holiday, both payments apply.

That, in our submission, is both plain on a reading of the enterprise agreement and is inherently and internally logical. At no point, does the enterprise agreement say or even on the kindest reading permit of (sic) a payment of the public holiday penalty only, other than if you are working on a day shift on a public holiday.” 7

[27] The CFMEU argued that to understand why both rates apply, it was necessary to understand the purpose behind the various payments. It contended that each of the payments address different aspects of when work is performed. In this regard the CFMEU submitted that “if an employee works on a public holiday, there is a public holiday penalty and if that so happens to be on an afternoon shift, then it doesn’t make any difference, those hours are still in the afternoon, same as on a weekend. For that reason, the afternoon shift penalty would apply and the agreement does not say otherwise. 8”

[28] The CFMEU argued that the construction proposed by Endeavour led to a number of ‘inconsistencies’ 9, the first of those being that Endeavour had acknowledged that work performed on a Saturday afternoon shift attracted both the Saturday penalty and the afternoon shift penalty. It argued that a public holiday was no different, and that there were no words in the Agreement that specifically provided that if an employee worked afternoon shift on a Saturday they would receive both penalties.

[29] The second inconsistency, it argued, was that if one employee worked dayshift on a public holiday and another employee worked afternoon shift on the same public holiday they would, on Endeavour’s construction of the Agreement, receive exactly the same payment. The CFMEU submitted that this was ‘an obvious inequity that we think that the agreement would not logically throw up’ 10.

[30] In its written submissions, the CFMEU argued that Endeavour’s construction could only succeed if the plain and ordinary meaning of the words found in Appendix 3 in relation to afternoon and night shift were totally ignored, which would be an impermissible approach.

[31] The CFMEU contended that more than one component may be required to be paid where the relevant payment rules were satisfied. It argued that to suggest otherwise, as Endeavour has, would produce a result where, for example, employees working their ordinary hours on afternoon or night shift on the weekend would only receive the weekend penalty rate and not the relevant shift allowance on those days. It argued that such a result would be contrary to the text of Appendix 3 and the evident purpose of a shift allowance, and this result would significantly disadvantage employees that predominantly worked their ordinary hours over the weekend.

[32] Under the heading of ‘Purpose’ in its written submissions, the CFMEU argued that a penalty rate is commonly paid for work performed on a public holiday, and is recognition that the employee has foregone the social amenity of a paid day off. It argued that there was a material difference between working on a weekend and working on a public holiday. It argued that the evident purpose of the Agreement in setting the public holiday penalty rate at a rate higher than the weekend penalty rate, was to reinforce the distinction between working on these days. In the CFMEU’s submission, it followed that the purpose of the public holiday penalty rate was not to encompass other loadings, allowances and penalty rates that were set out in Appendix 3.

[33] In summary, it argued that an employee working their ordinary hours on an afternoon or nightshift on a public holiday had satisfied 2 payment rules, the first relating to shift allowances and the second relating to work on a public holiday.

Endeavour

[34] On its part, Endeavour submitted that the Agreement is plain in its terms, that the payment for public holidays is a standalone clause, and that it did not provide for additional shift loadings for work performed on public holidays. It argued that a proper construction of the public holiday clause could be contrasted with other parts of the Agreement, ‘including the weekend penalty rates clause and other payment rules, under which employees are entitled to receive what they would have been paid had they attended work’ 11.

[35] Endeavour argued that the payment rules set out in Appendix 3 are not automatically cumulative. The effect of the interpretation advanced by the CFMEU, it argued, was that ‘the entitlements set out in the payment rules were necessarily cumulative and were received on the basis of a ‘tick the box’ exercise, by looking at each payment rule in Appendix 3 and determining whether that component might theoretically apply’ 12. Endeavour contended that if the CFMEU’s interpretation was correct, the effect of this would be that employees would also receive overtime payments on top of public holiday penalties.

[36] Endeavour argued that the Agreement does not require Endeavour to pay the appropriate shift allowance on ordinary rates worked on a public holiday plus the public holiday rate. The Agreement must do more than merely permit a payment to be made. In Endeavour’s submission, it is not enough for the CFMEU to assert that payment of both public holiday penalties and shift allowances is not proscribed and therefore it is required.

[37] Further, Endeavour argued that the payment rules do not operate independently of the body of the Agreement. It contended that the interpretation proposed by the CFMEU ignored the fact that the payment rule applying to any particular type of work must be determined from the body of the Agreement, and ‘it is not permissible to start at Appendix 3 and tally up each payment rule that could theoretically apply’ 13. Endeavour argued that to properly construe the Agreement, it was necessary to start at clause 16 - Public Holidays. Clause 16.4 provides that ‘payment for public holidays is set out in Appendix 3 – Payment Rules’. Appendix 3 then sets out the payments due to employees who are:

a) not required to work;
b) required to work up until their normal rostered hours; or
c) required to work in excess of their normal rostered hours on a public holiday.

[38] Importantly, Endeavour submitted, the public holiday payment rule in relation to employees who are required to work, provides payment at a rate of two times ‘the classification rate’ for the hours worked, in addition to their classification rate per hour, producing the effect of treble time.

[39] Endeavour drew a distinction between ‘the classification rate’ and payments that were applicable, for example for compassionate leave, which provided payment at a rate that the employee would have received if they had attended work. Endeavour pointed to this variance in the drafting of other payment rules in Appendix 3, which could be contrasted with the drafting of the public holiday payment rule.

[40] Endeavour contended that there was no need to turn to other line items in Appendix 3, nor elsewhere in the body of the Agreement, to determine the entitlement of employees who perform work on a public holiday. It argued that clause 16 combined with the public holiday ‘component’ of Appendix 3 provided a complete answer to the question of what payments are due to employees in respect of public holidays.

[41] The written submissions filed by Endeavour disputed the suggestion by the CFMEU that Endeavour considered that only one component of the payment rules in Appendix 3 could apply to a single hour of work. Rather, it submitted that ‘more than one component of the payment rules will apply where a proper basis for this interpretation is found in the express language of the Current Agreement’ 14. By way of example, Endeavour pointed to payment for weekend shifts which is referred to in the submissions by the CFMEU. Endeavour submitted that the CFMEU misconceived Endeavour’s position. Endeavour said that unlike clause 16.4, the language of clause 7.2 provided an express basis for the payment of shift allowances in addition to weekend penalties. By comparison, it argued, the public holiday clause contained no similar reference to shift allowance.

[42] In response to the submissions of the CFMEU that it would be an inequitable outcome for employees working different shifts on a public holiday to be paid the same rate of pay, Endeavour argued that this was not a question of equity or merits but rather about applying the principles of construction of an enterprise agreement.

[43] In summary, Endeavour argued that the public holiday provisions of the Agreement were clear and comprehensive, and applied in place of all other allowances or components which might otherwise have been triggered. As a result, there was no basis for an interpretation of the Agreement which required shift penalties to be paid in addition to public holiday penalty rates.

[44] I note there were some submissions by the parties as to the relevance or otherwise of the Black Coal Mining Award 2010. I do not consider it necessary to have regard to this award in circumstances where the language of the Agreement is clear and unambiguous.

Consideration

[45] The principles applicable to the construction of an enterprise agreement have been canvassed at length in Golden Cockerel. It is not necessary that they be repeated here. They are not in dispute and as indicated earlier, I apply them to the construction of the relevant provisions of the Agreement as required to resolve this dispute.

[46] The express terms of the Agreement, in my view, lead only to the interpretation contended by Endeavour.

[47] I find that on a plain reading of the relevant provisions of the Agreement, the payment rule applying to a particular type of work is determined by reference to the body of the Agreement, rather than reviewing Appendix 3 to ascertain which payment rules may apply. I do not accept, as contended by the CFMEU, that it is clear from the text of Appendix 3 that payment of a component is required once the respective payment rule has been satisfied. The starting point is not a review of Appendix 3 to ascertain what payment rules might be satisfied. Rather, it is the relevant clause within the body of the Agreement.

[48] Likewise, I reject the argument of the CFMEU that there is nothing in Appendix 3, or the rest of the Agreement, that supports the view that the payment of one component (because a relevant payment rule had been satisfied) nullified the payment of another component where the relevant payment rule had been satisfied. Again, the starting point in my view is not Appendix 3. The starting point in this case is the public holiday clause, which I find is a standalone clause that does not provide for additional shift loadings for work performed on a public holiday.

[49] I agree with the submissions of Endeavour that to find in favour of the construction contended by the CFMEU, I need to find the Agreement requires, rather than merely permits, the payment of shift allowances in addition to public holiday penalties.
[50] It is evident from the words in the public holiday clause that payment for a public holiday includes only that which is specifically stated in Appendix 3. Were it otherwise, this would have been explicitly stated within the Agreement, as it has been in other clauses. It is clear from the language of other clauses within the Agreement that an express basis for the payment of more than one component set out in Appendix 3 may be payable at the same time. For example, clause 7.2 provides the payment of shift allowances in addition to weekend penalties. This is contrasted with the public holiday clause which does not contain a similar reference to shift allowance.

[51] I accept Endeavour’s contention that there is no need to turn to other line items in Appendix 3, nor elsewhere in the Agreement, to determine the entitlement of employees who perform work on a public holiday. I find that clause 16 combined with the public holiday component of Appendix 3 provides a complete answer to the question of what payments are due to employees who work on a public holiday. This is the most logical approach and consistent with the principles applicable to the construction of an enterprise agreement as set out in the Golden Cockerel decision.

[52] In relation to this particular dispute, in my view it is unnecessary to understand the purpose behind various payments in circumstances where the wording of the Agreement is clear and unambiguous. The purpose behind the various payments will not have the effect of modifying what are in this case the plain and ordinary meaning of the words contained within the Agreement.

[53] I am not persuaded by the CFMEU’s submission that there is an ‘obvious inequity’ in circumstances where employees are paid the same public holiday rates while working different shifts (i.e. afternoon or night shift) on the same day. To the extent that this might be considered an inequity, in my view it is certainly not sufficient to base a finding that the CFMEU’s construction of the Agreement is correct.

Conclusion

[54] For the reasons set out above, the relief sought by the CFMEU is refused and the application is dismissed.

DEPUTY PRESIDENT

Appearances:

A Thomas for the Construction, Forestry, Mining and Energy Union.

B Rauf of Counsel with A Webber for Endeavour Coal Pty Ltd.

Hearing details:

2017.

Sydney:

March 1.

 1   [2014] FWCFB 7447.

 2   PN 664, and PN 693 – 694

 3   CFMEU submissions, Exhibit A4, paragraph 10

 4   PN 619

 5   PN 620

 6   [2016] FWC 2845

 7   PN 621 – 623

 8   PN 634

 9   PN 661

 10   PN 663

 11   exhibit R3, paragraph 15 – 16

 12   exhibit R3, paragraph 17

 13   exhibit R3, paragraph 27

 14   exhibit R3, paragraph 32

Printed by authority of the Commonwealth Government Printer

<Price code C, PR591385>