Construction, Forestry, Mining and Energy Union v Endeavour Coal Pty Ltd T/A Appin Mine
[2017] FWCFB 4487
•31 AUGUST 2017
| [2017] FWCFB 4487 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.604 - Appeal of decisions
v
Endeavour Coal Pty Ltd T/A Appin Mine
(C2017/3169)
VICE PRESIDENT CATANZARITI | SYDNEY, 31 AUGUST 2017 |
Appeal against decision [2017] FWC 1763]] of Deputy President Dean at Sydney on 24 May 2017 in matter number C2016/6520.
[1] The Construction, Forestry, Mining and Energy Union (“the Appellant”) applies under section 604 of the Fair Work Act 2009 (Cth) (“the Act”) for permission to appeal and appeals a decision of Deputy President Dean issued on 24 May 2017 1 (“the Decision”) which dealt with a dispute arising under the Appin Colliery & West Cliff CPP Enterprise Agreement 2015 (“the Agreement”). The Agreement applies to Endeavour Coal Pty Ltd (“the Respondent”) in respect of the Appin Colliery and the West Cliff Coal Preparation Plant.
[2] The decision subject of the appeal involved an interpretation of the Agreement in relation to:
“… 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.” 2
[3] The Deputy President decided the answer to the above question in the negative, namely, that the Agreement does not require the Respondent to pay a shift loading in addition to public holiday penalties to employees who work on public holidays. The Appellant contended that, in so deciding, the Deputy President made a number of errors in law: by misconstruing the terms of the Agreement; acting contrary to the principles relevant to the construction of enterprise agreements; and failing to consider each provision of the Agreement and the purpose of various payments provided for in the Agreement.
[4] We heard the appeal on 25 July 2017 and reserved our Decision. At the hearing, Mr A. Walkaden appeared for the Appellant and Mr B. Rauf, of Counsel, sought permission to appear for the Respondent. Given the complexity of the matter and having regard to section 596 of the Act, permission was granted to the Respondent to be represented.
The Proceedings and Decision at First Instance
[5] The proceedings at first instance were initiated by an application (C2016/6520) filed by the Appellant pursuant to section 739 of the Act for the Commission to deal with a dispute arising under the Agreement. As previously noted, the dispute concerned the entitlement of employees working shifts on public holidays, to be paid shift loadings in addition to public holiday penalties. It was common ground that the Commission had jurisdiction to hear and determine the dispute.
[6] There were no agreed facts or other evidence in relation to the hours worked on any particular public holiday or the manner in which those hours were rostered. Facts that were agreed as set out by the Deputy President were that, historically, separate agreements had covered the Appin Mine and the West Cliff Mine and Coal Preparation Plant, and following an amalgamation of those operations, the Agreement covering both sites was made. Historically, employees at West Cliff Mine and Coal Preparation Plant were not paid shift allowances in addition to public holiday penalties and employees at the Appin Mine were paid shift allowances in addition to public holiday rates, although there was disagreement as to why this was the case. It was also not in dispute that the Respondent had been paying both public holiday penalty rates and shift allowances for work on public holidays at the commencement of the Agreement and that cessation of that practice during the term of the Agreement gave rise to the present dispute.
[7] The Deputy President first identified clauses of the Agreement said to be relevant to the dispute. Those clauses were:
• 7.2 Payment of Shift Allowances and for Ordinary hours worked on a weekend; and
• 16.4 Payment for recognised public holidays.
[8] The Deputy President also set out in full the terms of Appendix 3 to the Agreement which deals with “Payment Rules”. Appendix 3 comprises 2 columns headed “Component” and “Payment Rule” respectively. Both parties led evidence described by the Deputy President as focusing 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. The Deputy President observed that both parties submitted that it was only necessary that she consider this evidence if ambiguity was found in the relevant clauses of the Agreement and that both parties submitted that no ambiguity arose. The Deputy President agreed with the parties and on the basis of finding that there was no ambiguity in the language of the Agreement, determined that she did not need to have regard to the evidence.
[9] The Deputy President also recorded that both 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. 3
[10] The Deputy President set out the competing contentions of the parties at paragraphs [19] to [44] of the Decision. In summary, the Appellant contended that the plain and ordinary text of the Agreement, when considered in light of context and purpose, demonstrated that the wording was plain on its face and there was no ambiguity. In this regard, the Appellant submitted that Appendix 3 was fundamental to the resolution of the dispute and that clauses within the Agreement were separate and discrete and provide different payments for different purposes. The Appellant contended that the shift allowance payment rule in Appendix 3 requires that shift allowance is paid on ordinary hours worked on an afternoon shift. The Appellant further contended that the payment rule in Appendix 3 is applicable when an employee is required to work on a public holiday and that the components in Appendix 3 are not mutually exclusive. The Deputy President also referred to a submission by the Appellant in relation to the ordinary hours of work prescribed by the Agreement being an average of 35 per week over the roster cycle.
[11] Accordingly, the Appellant submitted that, if an employee worked an afternoon or night shift on a public holiday, the payment rules in Appendix 3 required that all relevant components apply. This was said to be apparent from the purpose of the payments. The purpose of a public holiday penalty rate is to compensate employees who have foregone the social amenity of a paid day off. In support of its preferred construction, the Appellant pointed to the fact that the Respondent was paying afternoon shift allowances in addition to Saturday penalty rates and that it is illogical that employees working afternoon or night shifts on public holidays would be paid the same rates as employees working day shift on the public holiday.
[12] The Deputy President recorded that the Respondent also submitted that the terms of the Agreement have a plain meaning and that the clause dealing with payment for public holidays was a stand-alone clause that did not provide for additional shift loadings for work on public holidays. This could be contrasted with other parts of the Agreement including the weekend penalty rates clause and other payment rules under which employees were entitled to receive what they would have been paid had they attended work. The Respondent argued that the payment rules in Appendix 3 are not automatically cumulative, contrary to the submission advanced by the Appellant and that the Agreement require rather than permit a payment to be made.
[13] The Respondent also argued that the payment rules in Appendix 3 do not operate independently of the body of the Agreement and that it was not permissible, as contended by the Appellant, to start at Appendix 3 and tally up each payment rule that could theoretically apply. It is necessary to start at clause 16 of the Agreement which deals with public holidays and sets out payments for 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.
[14] The public holiday rule in Appendix 3 provides payment at a rate of two times “the classification rate” for the hours worked in addition to the classification rate per hour, producing the effect of treble time. The Respondent also accepted that more than one component of the payment rules can apply but that this is only the case where a proper basis for this interpretation is found in the express language of the Agreement. Clause 7.2 of the Agreement was said to be an example of an express provision requiring the payment of shift allowances in addition to weekend penalties. The Respondent submitted that, in contrast, 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 and there was no basis for an interpretation of the Agreement which required shift penalties to be paid in addition to public holiday penalty rates.
[15] After setting out the competing contentions of the parties, the Deputy President turned to the interpretation of the Agreement, stating that she would apply the principles applicable to the construction of an enterprise agreement as set out in the Full Bench Decision in Australian Meat Industry Employees Union v Golden Cockerel Pty Ltd 4 (“Golden Cockerel”). The Deputy President went on to conclude that the express terms of the Agreement lead only to the interpretation favoured by the Respondent and that, on a plain reading 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 by reviewing Appendix 3 to ascertain which payment rules might apply. The Deputy President rejected the contention of the Appellant that the text of Appendix 3 makes it clear that payment of a component is required once the respective payment rule has been satisfied and held that the starting point is not a review of Appendix 3 to ascertain what payment rules might be satisfied, but rather, is the relevant clause within the Agreement. That clause – the public holiday clause – was found to be a stand-alone clause that does not provide for additional shift loadings for work performed on a public holiday.
[16] The Deputy President accepted the submission of the Respondent that to find in favour of the construction favoured for which the Appellant contended necessitated a finding that the Agreement requires rather than merely permits the payment of shift allowances in addition to public holiday penalties. The Deputy President also found that the construction of the Agreement advocated by the Respondent was supported by the words in the public holiday clause that payment for a public holiday includes only that which is specifically stated in Appendix 3, and that this was in contrast with other clauses which contained language providing an express basis for the payment of more than one of the components as set out in Appendix 3. An example of this was said to be clause 7.2 which provides for the payment of shift loadings in addition to weekend penalty payments.
[17] The Deputy President accepted the Respondent’s contention that there is no need to turn to other line items in Appendix 3 or elsewhere in the Agreement, to determine the entitlement of employees who perform work on a public holiday and that clause 16 of the Agreement combined with the public holiday component in Appendix 3, is a complete answer to the question of what payments are due to employees who work on a public holiday. The Deputy President also stated that this was the most logical approach and consistent with the principles in Golden Cockerel. The Deputy President further stated that it was unnecessary to understand the purpose behind various payments in circumstances where the Agreement is clear and unambiguous as the purpose of payments will not have the effect of modifying the plain and ordinary meaning of the words contained within the Agreement. The Deputy President also determined that it was not necessary to have regard to the Black Coal Mining Industry Award 2010, in circumstances where the meaning of the Agreement was plain and unambiguous.
The Appeal
Appeal Grounds
[18] The central issues in the Appeal are whether the approach to the construction of the Agreement and the conclusion reached by the Deputy President in relation to the question for arbitration, were correct. The grounds of the Appeal are set out in the Form F7 as follows:
1. The Deputy President erred at [5] in answering “no” to the question recorded at [3] of her Decision, and erred at [54] in not granting the relief that was sought by the Appellant and dismissing the application;
2. The Deputy President erred in law at [46] by misconstruing the terms of the Agreement in finding that the express terms of the Agreement lead only to the Respondent’s interpretation of that Agreement;
3. The Deputy President erred in law at [47], [48], [50] and [51] by acting contrary to the principles purportedly applied at [45] in failing to consider each provision of the Agreement, including each relevant payment rule in Appendix 3 of the Agreement; and
4. The Deputy President erred in law at [52] by acting contrary to the principles purportedly applied at [45] in failing to consider the purpose of the various payments.
Appellant’s submissions
[19] The submissions of the Appellant in the appeal commenced with ground three. In relation to ground three, the Appellant contended that the Deputy President failed to properly apply the principles in Golden Cockerel and, in particular, those concerning the consideration of the context and purpose of the provision being construed; 5 the text and operation of the Agreement as a whole and with reference to particular provisions; and the legislative background against which it was made.6 The Appellant does not dispute that the starting point is the body of the Agreement and does not take issue with the Deputy President’s conclusion in this regard. However, the Appellant asserted that the error of construction made by the Deputy President was failing to consider the text of the Agreement as a whole and, in particular, the afternoon and night shift allowance components in Appendix 3. Other than consideration of clause 7.2, the Appellant submitted that the Deputy President did not consider each provision of the Agreement, and approached the construction task in a manner contrary to the established principles as set out in Golden Cockerel and cases cited in that Decision.
[20] With respect to appeal ground four, the Appellant contended that, in stating that it was unnecessary to consider the purpose of the relevant provisions, the Deputy President misapplied the principles of construction as set out in Golden Cockerel and cases cited in that Decision. The Appellant posited that those principles make clear that consideration of the purpose of a disputed provision is not dependent on the identification of ambiguity. Further, the Appellant and the Respondent made submissions in the proceedings below about the purpose of the relevant provisions/payment and the principles required that be considered.
[21] Appeal ground two centres on what is said to be an erroneous finding made by the Deputy President that the public holiday clause – clause 16.4 of the Agreement – “is a stand-alone clause that does not provide for additional shift loadings for work performed on a public holiday.” The Appellant asserted that this finding is contrary to the plain and ordinary meaning of the words found in clause 7.2 and 16.4 of the Agreement. The Appellant contended clause 16.4 says nothing about the actual amount of payment for a public holiday, let alone whether such payment comprises a shift allowance or not, and does not specify the circumstances which entitle employees to payment for a public holiday. Rather, like clause 7.2, clause 16.4 directs attention to Appendix 3 and these clauses cannot be described as stand-alone clauses.
[22] The Appellant also pointed to the wording of clauses 16.4 and 7.2 and submitted that neither clause directs attention to any specific payment rule in Appendix 3. This is said to be contrary to findings made by the Deputy President at paragraphs [47] and [50] of the Decision. The Appellant asserted that clause 16.4 does not refer only to the public holiday component of Appendix 3. Further, the extrapolation in relation to clause 7.2 and the observation that this clause expressly provides for both weekend penalties and shift loadings, is said to read too much into the use of the word “and” in that clause, particularly when courts have been prepared to read the term as disjunctive. The Deputy President’s reasoning is also said to place too much emphasis on the format and structure of the Agreement and is premised on the unsafe assumption that there will be consistency in the format and structure throughout the Agreement. The Appellant submitted that the courts and the Commission have repeatedly cautioned that such consistency cannot and should not be assumed given the nature of industrial instruments, the industrial relations context in which they are made and the parties who draft and agree on their terms. 7
[23] The Appellant submitted that the reference to shift allowance and payment for ordinary hours worked on a weekend in clause 7.2 of the Agreement does not support the finding made at [50] of the Decision that this clause expressly provides for the shift loading to be paid in addition to weekend penalty rates, and there are some circumstances where one but not both of these entitlements must be paid. It cannot be the case that clause 7.2 is to be read both conjunctively and disjunctively and the words in that clause provide no guidance as to when either of those entitlements must be paid. Such guidance is found in Appendix 3.
[24] The Appellant further submitted that the consistency described by the Deputy President at [50] does not exist and pointed to the written and oral submissions made at the hearing at first instance to the example of a casual employee, to illustrate this point. In this regard, clause 5.4 of the Agreement provides for a 25% loading payable to casual employees: “in lieu of entitlements under Personal Carer’s Leave, Annual Leave and recognised Public Holidays.” The Appellant contended it is clear that casual employees who work ordinary hours on weekends are entitled to both the relevant penalty rate in Appendix 3 and the casual loading given that the casual loading is paid only in lieu of the specified entitlements, and that its evident purpose is to compensate for those entitlements. The Appellant submitted there is no reference to ordinary hours worked on a weekend and the casual loading in clause 5.4 and this is indicative of the error made by the Deputy President at paragraph [50] of the Decision.
[25] The Appellant pointed to the reference by the Deputy President in paragraph [50] to other clauses of the Agreement and asserted that the Deputy President did not engage with the argument in relation to casual employees. In addition, the Appellant pointed to the inconsistency between clause 5.4 of the Agreement and the casual loading component in Appendix 3 – clause 5.4 provides that the casual loading is paid for working “ordinary time”, while Appendix 3 provides that it is payable for “hours worked”. This inconsistency is said to reinforce the submissions that one cannot assume there will be consistency with the language, format and structure throughout the Agreement. The Appellant also asserted that its construction of the relevant provisions is focused on the text of those provisions with regard to their context and purpose and is consistent with the principles erroneously relied on by the Deputy President.
Respondent’s submissions
[26] The Respondent contended that the grounds relied on by the Appellant in the notice of appeal do not enliven the public interest, and permission to appeal should be refused. In this regard, the Respondent submitted that there is no identifiable error in the principles applied by the Deputy President or in her analysis and approach to determining the question that was before her. The Respondent asserted that, while the principles in Golden Cockerel have been modified by the subsequent Full Bench decision in Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union known as the Australian Manufacturing Workers Union v Berri Limited 8(“Berri”), the modified principles do not impact on the analysis and approach of the Deputy President in the Decision and the Appellant does not rely on any error in consequence of the modification.
[27] The Respondent contended that, consistent with the submissions of both parties, the Deputy President determined that there was no ambiguity in relation to the provisions in dispute and, as a consequence, was able to determine the question before her without regard to surrounding circumstances or extrinsic materials. The Respondent asserted this finding was consistent with the principles relating to the construction of enterprise agreements, including commencing with consideration of the ordinary meaning of the words and ascertaining whether they have a plain meaning. Therefore, questions as to the nature of any reliance on extrinsic materials; findings made in respect of surrounding circumstances; and statements about the subjective understanding of the parties, do not arise in the manner that such matters arose in Berri.
[28] The Respondent submitted that, as a first step, the Deputy President had regard to the provisions of sub-clauses 7.2 and 16.4 and Appendix 3 of the Agreement and that there was fulsome debate in the proceedings at first instance as to the operation of the provisions and the contrast in the words used in those sub-clauses and in other clauses relating to payment entitlements of employees and how those interacted with the appendices of the Agreement.
[29] The Respondent also submitted that the criticism of the finding of the Deputy President that clause 16.4 of the Agreement operates as a stand-alone provision, mischaracterises the finding and reasons. Similarly, the Respondent posited that the Appellant’s reliance on examples of other clauses in the Agreement as a basis for claiming error of law, ignores the fact that these matters were the subject of debate and consideration at first instance and the Deputy President properly did not allow such considerations to directly affect her construction of sub-clause 16.4 of the Agreement. Further the Respondent submitted that the dispute concerned a select group of employees – only those working at the Appin operation – and the Decision has limited application. The Respondent asserted there is no injustice or other factor which enlivens the public interest, nor is the Decision attended with sufficient doubt to warrant its reconsideration.
[30] The Respondent contended that appeal grounds one and two in relation to the finding that clause 16.4 is a stand-alone clause, mischaracterise the determination made by the Deputy President. The Respondent asserted that determination is an acceptance of the Respondent’s submissions at first instance summarised at paragraphs [34] – [43] of the Decision, and in particular that the construction of clause 16.4 was not divorced from Appendix 3. In the context of those matters which included that it was not permissible to start at Appendix 3 and undertake a “tick a box exercise” to determine which payment could apply, the Respondent contended the Deputy President agreed there was no need to have regard to other provisions of the Agreement other components of Appendix 3 of the Agreement in answering the question as to whether or not employees were entitled to shift allowances for performing work on public holidays. Further, that the Deputy President determined that clause 16.4 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.
[31] In relation to clause 7.2, the Respondent contended that the Appellant’s submission misunderstands or ignores the Deputy President’s reasoning. In particular, that the Deputy President’s reasoning was not focused on the word “and”, but rather, on the express inclusion in that clause of the payment of a shift allowance, in contradistinction to clause 16.4. Further, that the argument with respect to casual employees was advanced at first instance and does not assist the Appellant, on the basis that it reinforces the construction advanced by the Respondent that one starts with the relevant clause in the body of the Agreement to understand which payment components in Appendix 3 apply. The Respondent further submitted that the illogicality of the Appellant’s argument is illustrated by the example of an employee who undertakes shift work on Easter Saturday, which was also the subject of debate in the proceedings at first instance.
[32] In this regard, the Respondent submitted that, on the Appellant’s construction of the Agreement it became apparent that an employee could conceivably receive a shift allowance, public holiday penalties and overtime rates concurrently. During the exchange in relation to this matter, the Respondent submitted that the Appellant conceded that the payment rules could not possibly operate in this manner, but was unable to provide any adequate explanation about why there ought to be a different construction and approach on the example raised. In addressing the same example, the Respondent submitted its construction did not give rise to any such difficulties because only the public holiday component of the payment rules would apply in respect of shift work on Easter Saturday. The Respondent posited that other difficulties and inconsistencies which also arose on the construction of the Agreement relating to sub-clause 16.4 were:
• There is no reference in sub-clause 16.4 to any entitlement to shift allowance;
• Although there are different rates in Appendix 3 that apply for Saturday work and Sunday work and also ordinary and overtime hours such different rates do not apply in respect of work on a public holiday;
• The payment to be made to an employee is expressed with reference to the classification rate and not in terms of what an employee would receive if the employee was at work as is the case with other entitlements such as compassionate and community service leave; and
• For the Appellant’s construction to sensibly work, it would need to ignore and exclude the components relating to ordinary hours, rostered overtime, non-rostered overtime and the different rates applying with respect to work on a Saturday and Sunday and a requirement to pay shift allowances for public holiday work despite there being no express provisions to this effect.
[33] Accordingly, the Respondent contended there was no failure on the part of the Deputy President to correctly apply the applicable principles to construing sub-clauses 7.2 and 16.4 and Appendix 3 of the Agreement and appeal grounds one and two cannot be sustained. For the same reasons, the Respondent submitted that ground three cannot be sustained. In addition, the Respondent asserted that Appellant’s submission is, in effect, that the payment rules are applied in a cumulative manner and on the basis of a “tick a box” exercise. However, the Respondent submitted that, once it is determined that the relevant clause in the body of the Agreement does not provide a basis for other components of Appendix 3 to apply, it is not necessary and is erroneous to consider the other components in Appendix 3 in isolation from the body of the Agreement. The Respondent further contended that the Appellant’s criticism that the Deputy President did not consider the Agreement as a whole, is incorrect. According to the Respondent, the Deputy President had regard to other provisions of the Agreement and an example of this is found in paragraph [50] of the Decision where the expressions in sub-clauses 16.4 and 7.2 are contrasted.
[34] In relation to appeal ground four, the Respondent submitted that the Appellant’s assertion that the Deputy President erred in law by failing to consider the purpose of the various payments incorrectly understands the relevant principles as enunciated in Golden Cockerel and modified by Berri. The Respondent asserted that the approach commences with the consideration of the ordinary meaning of the relevant words construed in the context of the agreement as a whole, focusing on the language of the agreement itself. In the event of ambiguity, permissible evidence of surrounding circumstances may be relied upon to establish objective background facts which were known to both parties.
[35] The Respondent submitted that, in the present matter, arguments about possible or likely purpose with reference to other instruments are in the nature of extrinsic matters and are concerned with reasons for which such payments have or may have traditionally or typically been made in other circumstances. The Respondent contended that this is not the same as the industrial context and purpose of the express provisions of the Agreement in question. The Respondent submitted there is no ambiguity in the present matter with respect to the provisions of sub-clauses 7.2 and 16.4 of the Agreement and, accordingly, it was appropriate for the Deputy President to disregard other submissions and evidence going to extraneous matters.
Consideration – Permission to Appeal
[36] The dispute resolution procedure in the Agreement does not confer an independent right of appeal on a party to a dispute. Accordingly an appeal of the Decision is governed by s. 604 of the Act, which requires that permission to appeal must be obtained. The Commission must grant permission to appeal if it is in the public interest to do so. 9 The test of assessing whether a matter is in the public interest is discretionary and involves a broad value judgement.10 In GlaxoSmithKline Australia Pty Ltd v Colin Makin,11 the Full Bench summarised the test for determining the public interest as follows:
“[26] Appeals have lain on the ground that it is in the public interest that leave should be granted in the predecessors to the Act for decades. It has not been considered useful or appropriate to define the concept in other than the most general terms and we do not intend to do so. The expression ‘in the public interest’, when used in a statute, classically imports a discretionary value judgment to be made by reference to undefined factual matters, confined only by the objects of the legislation in question. [Comalco v O’Connor (1995) 131 AR 657 at p.681 per Wilcox CJ & Keely J, citing O’Sullivan v Farrer (1989) 168 CLR 210]
[27] Although the public interest might be attracted where a matter raises issues of importance and general application, or where there is a diversity of decisions at first instance so that guidance from an appellate court is required, or where the decision at first instance manifests an injustice, or the result is counter intuitive, or that the legal principles applied appear disharmonious when compared with other recent decisions dealing with similar matters, it seems to us that none of those elements is present in this case.”
[37] Alternately, other grounds on which permission to appeal may be granted include the decision being attended with sufficient doubt to warrant its reconsideration and that substantial injustice may result if permission is refused. 12 It will rarely, if ever, be appropriate to grant permission to appeal unless an arguable case of appealable error is demonstrated, as an appeal cannot succeed in the absence of such error.13 However, the mere identification of some error in the decision under appeal may not by itself constitute a sufficient basis for the grant of permission to appeal.14
[38] In determining whether permission to appeal should be granted, we have reviewed and considered all material filed by the parties including all submissions, correspondence and relevant authorities.
[39] We find that permission to appeal should be granted in this matter. We are of the view that the appeal raises important questions concerning the correct approach to the application of principles relevant to the task of construing an enterprise agreement. Accordingly, we are satisfied that the appeal raises important issues of general application and thereby attracts the public interest. It is on this basis that permission to appeal is granted.
Consideration – The Appeal
[40] As previously noted, the central issue in the Appeal requires consideration of whether the Deputy President correctly applied the principles relevant to the construction of enterprise agreements and whether the Deputy President’s construction of the Agreement is correct. The approach to the construction of enterprise agreements and the principles to be applied to that task is well established. Those principles were gathered together, distilled and summarised in a decision of a Full Bench of the Commission in Golden Cockerel. More recently, the summary of the relevant principles was reformulated by a Full Bench of the Commission in Berri, with that Decision being released after the hearing and Decision at first instance in the present case.
[41] We agree with the submission of the Respondent in the present Appeal that the reformulation of the principles in Berri does not change the approach to the task of construing an enterprise agreement. Notwithstanding this reformulation, both Golden Cockerel and Berri deal with the importance of context and purpose in the task of construction of an enterprise agreement.
[42] In Golden Cockerel, the Full Bench set out authorities which make it clear that while the task of construction begins with consideration of the ordinary meaning of the words of the agreement, regard must be paid to the context and purpose of the provision or expression being construed. Those authorities make clear that context and purpose are relevant to construction and must be considered even where the words of the provision being construed appear, on their face, to have a clear and unambiguous meaning.
[43] In this regard, the Full Bench in Golden Cockerel set out at [29] the explanation of this point by the NSW Court of Appeal in Mainteck Services Pty Ltd v Stein Heurtey SA. 15Relevantly, that explanation emphasises 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 16 and there is always some context to any statement;17
• Language considered in its context will often have a clear meaning and context will often not displace that meaning – “but not always”; 18
• 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; 19
• The phrase used by Mason J in Codelfa “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; 20 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. 21
[44] Further, the significance of context and purpose in the construction of an enterprise agreement was emphasised by a Full Bench of the Commission in Berri, where the relevant principle was summarised at [114] as follows:
“The principles relevant to the task of construing a single enterprise agreement may be summarised 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 …”
[45] In our opinion, it is apparent from paragraph [52] of the Decision that the Deputy President did not have regard to the purpose of the relevant provisions of the Agreement in construing it, on the basis of her view that the “wording of the Agreement is clear and unambiguous”. Similarly, in deciding (at [51]) that there was “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” it is apparent, in our view, that the Deputy President did not have regard to the text of the Agreement viewed as whole. That approach to the construction of the Agreement was, with respect, erroneous, because the authorities to which we have referred make clear that context and purpose are relevant to construction and must be considered even where the words of the provision being construed appear, on their face, to have a clear and unambiguous meaning. Further, for the reasons set out below, we are of the view that once regard is had to the context and purpose of the relevant provisions of the Agreement, the interpretation of the relevant provisions advanced by the Appellant is correct, and we consider that the conclusion reached about these provisions by the Deputy President was not the correct conclusion. It follows that permission to appeal should be granted, and the Decision should be quashed. We have also determined to make a further decision in relation to the matter that is the subject of the appeal.
[46] Before turning to consider matters of context and purpose and making a further decision, we make the following observations. As we have previously noted, the decision in Berri had not been released at the time the matter at first instance was heard and determined. That decision would undoubtedly have assisted with the consideration of the question for arbitration in the proceedings at first instance. Further, it became apparent during the hearing of the appeal that the submissions of the parties at first instance did not engage in detail with all of the provisions of the Agreement which were relevant to consideration of the context of the disputed provisions. We are also of the view that an agreed statement of facts, or alternatively evidence of a different kind, about the rosters worked by employees and the configuration of ordinary and overtime hours in those rosters would have been of assistance at first instance.
Further Decision
[47] The context of the relevant provisions in the Agreement includes the text of the Agreement viewed as a whole. We will now consider, in the context of the present dispute, what, in our opinion, are the most important provisions in the Agreement, together with the purpose of the relevant provisions.
[48] Clause 16.4 of the Agreement is in the following terms:
“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.”
[49] Recognised public holidays are listed in clause 16.1, as New Year’s Day; Australia Day; Good Friday; Easter Monday; Easter Tuesday; ANZAC Day; Queen’s Birthday; Labour Day; Christmas Day; and Boxing Day; and any other day observed as a public holiday in the particular region in lieu of the above days and all other public holidays gazetted for the particular region. Clause 16.2 provides for agreement between the Respondent and the majority of employees affected, to transfer a public holiday to another day and that where such transfer occurs, the agreed day becomes the recognised public holiday and the actual holiday becomes an ordinary working day.
[50] Clause 16.3 deals with provision of labour on public holidays. By virtue of that clause, minimum coverage is required to be provided during all public holidays, to allow the Colliery to stay open for statutory inspections. Underground mechanical and electrical tradespersons are required to be on standby and available for breakdowns and are also required for inspections and to repower to allow the Colliery to resume normal operations.
[51] Clause 16.3 goes on to provide that weekday roster employees will not be required to work more than three Public Holidays each year. There is a provision for volunteers to be called for four weeks before each public holiday and where insufficient employees volunteer to work the Respondent can provide notification two weeks prior to the public holiday for additional employees required to work, taking into account the number of public holidays the employee has worked during the previous 12 months. Clause 16.3 further provides that weekend roster employees are required to nominate two public holidays each year they will not be required to work. If not nominated by employees, the Company will determine the two public holidays not required to be worked. The final paragraph of clause 16.3 is in the following terms:
“Weekend roster Employees will nominate 2 Public Holidays each year that they will not be required to work. If not nominated by Employees the Company will determine the 2 Public Holidays not required to be worked. If the 25th and 26th December (sic) fall during the ordinary hours of the weekend roster, these will be the days not worked by these employees. Weekend roster Employees will be required to work on all other Public Holidays that fall within their roster.”
[52] Hours of work are dealt with in clause 7 of the Agreement. Clauses 7.1 and 7.2 provide as follows:
“7.1 Ordinary Hours
The average ordinary hours of work will be 35 hours per week.
Ordinary hours may be averaged over a period or a roster cycle, subject to the agreement of the majority of affected Employees covered by the Agreement.
In the event the hours are averaged, payment of rostered hours may be averaged over the period, subject to the agreement of the majority of affected Employees.
7.2 Payment of Shift Allowances and for Ordinary hours worked on a weekend
The payments for shift allowances and ordinary time 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 rostered days.”
[53] Clause 7.3 provides:
“7.3 Shift Work and Rosters
The Company may implement the following non-rotating, consecutive day roster arrangements, including shift lengths of shorter duration:
• Weekday shifts of up to 8 hours where working 5 days
• Weekday shifts of up to 10 hours where working 4 days
• Weekday shifts of 12 hours when working 3 days
• Weekend shifts of up to 12 hours where working 3 days (Saturday to Monday or Friday to Sunday)
Other rosters may be implemented by agreement with the affected Employees.”
[54] Overtime provisions are found in clause 15 of the Agreement which provides that employees must work reasonable overtime as required by the business. Clause 2 of the Agreement contains the following definitions:
Term | Definition |
5-day weekend roster employee | An Employee whose roster cycle is 5 days and includes Saturdays and/or Sunday. |
6-day weekend roster employee | An Employee who over the roster cycle is rostered to work on any 6 days of the week. |
7-day roster employee | An Employee who over the roster cycle is rostered to work on any of the 7 days of the week. |
Afternoon shift | A shift where the ordinary hours end after 6:00pm and at or before midnight. |
As if at work | The sum of the Employee’s Classification rate, Bonus, Rostered overtime, and if applicable, Weekend penalties and Shift Allowance. |
Fixed weekend roster | A roster which involves the working of ordinary hours on any consecutive days of the week and includes at least the majority of one rostered shift being worked on a Saturday and/or a Sunday. |
Immediate family | • A spouse, de facto partner, child, parent, grandparent, grandchild or sibling of the Employee; • A child, parent, grandparent, grandchild or sibling of a spouse or de facto partner of the Employee. |
Night shift | A shift where the ordinary hours finish after midnight and at or before 10:00am. |
Non-rostered overtime | Overtime which does not form part of an Employee’s roster. |
Ordinary Weeks Pay | 35 hours pay that is paid at the Employee’s Classification rate. |
Public Holiday | A 24 hour period commencing at 00:00 on the day of the gazetted Public Holiday. |
Rostered overtime | Overtime which the Employee is required to work that forms a part of the Employee’s roster. |
[55] The last paragraph of Clause 3 – Application – of the Agreement provides as follows:
“It is the intention of the parties to this Agreement that it is a comprehensive document, containing all matters relating to the terms and conditions of employment for Employees. In the event that a matter arises that is not dealt with by the Agreement, and cannot be resolved by the parties within the terms of the Agreement, for the purposes of giving guidance to the parties about the matter, regard will be had to the Black Coal Mining Industry Modern Award.”
[56] Relevantly, clause 17 of the Agreement provides for annual leave accruals and includes an entitlement amounting to five weeks per year of service for employees working Monday to Friday only or a six day roster and six weeks for employees working a seven day roster or “rosters which require work on public holidays and at least 34 Sundays per year”.
[57] It is apparent from the provisions in the body of the Agreement that:
• Employees may be required to work rosters which provide for ordinary hours of work on any day of the week including weekends and public holidays.
• There is a positive obligation for employees to work on public holidays for the purposes of providing coverage as set out in clause 17 of the Agreement.
[58] The rates of pay in Appendix 1 of the Agreement are expressed as hourly rates. Those rates are paid for ordinary hours. Turning to the Payment Rules in Appendix 3, afternoon and night shift allowances are expressed as 15% or 25% respectively “for ordinary hours at the Employee’s classification rate.” This can be distinguished from the payment rule for casual loading which is expressed as 25% “for hours worked at the Employee’s classification rate.” The public holiday “component” in the “payment rules” in Appendix 3 is expressed as follows:
“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 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. 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.”
[59] The “public holiday” “component” in the “payment rules” deals with a number of situations:
[60] As is apparent from the public holiday provisions in the Agreement, it is envisaged that employees working on a public holiday may be working normal rostered hours (comprised of ordinary hours and/or rostered overtime) and there is the prospect of employees working non-rostered overtime in addition to their normal rostered hours on the public holiday. The distinction between rostered overtime and non-rostered overtime is found in the definitions in clause 2 of the Agreement.
[61] Where employees are working normal rostered hours on a public holiday, the “public holiday” “component” in the “payment rules” provides that they are entitled to be paid at the rate of double time (2 times the Classification rate) in addition to the single time they are paid for those normal rostered hours. When they are working non-rostered overtime hours on a public holiday (i.e. hours in excess of the normal rostered hours), the “public holiday” “component” in the “payment rules” provides that those hours are to be paid at the rate of triple time (3 times the Classification rate). However, that is not the end of the inquiry.
[62] Afternoon and night shift allowances are paid for ordinary hours. For the reasons set out above, at least some of the normal rostered hours to be worked by an employee on a public holiday are likely to be ordinary hours. There is nothing in the payment rules nor in the body of the Agreement that expressly disentitles employees from being paid shift allowances on ordinary hours worked on a public holiday when such hours are worked within the definition of afternoon or night shift in clause 2 of the Agreement.
[63] Further, the text and context to which we have referred supports the conclusion that the “payment” to which an employee is entitled in respect of a public holiday pursuant to a combination of clause 16.4 and the “payment rules” in Appendix 3, may, depending on the circumstances, include a rate of pay determined by the “payment rule” “component” for “public holidays” in Appendix 3 and an applicable allowance, such as the “afternoon shift allowance” or “night shift allowance” in Appendix 3 for ordinary hours worked during such a shift.
[64] The purpose of an “afternoon shift allowance” or “night shift allowance” also supports such a construction, because the reason such an allowance is paid to an employee is to compensate them for the inconvenience of working unsociable and non-family friendly hours. That rationale applies with at least equal force to a shift worked on an ordinary day as it does to a shift worked on a public holiday. The makers of the Agreement could, of course, have included a provision in the Agreement to make clear that the public holiday penalty rates of pay in Appendix 3 were high enough to compensate an employee for all inconveniences associated with working on a public holiday, regardless of the shift being worked, but they did not do so.
[65] The need to potentially consider more than one “component” of the “payment rules” to determine an employee’s entitlement for working particular hours is not unique to ordinary hours worked on a public holiday. Consider, for example, an employee working ordinary hours of night shift from Monday to Friday. The body of the Agreement does not deal with the question of the payment to be made to an employee for working such hours. Two “components” of the “payment rules” in Appendix 3 are relevant: first, the “ordinary hours” “component” of the “payment rules” provides that “ordinary hours worked Monday to Friday inclusive are paid at the Employee’s Classification rate”; and secondly, the “night shift allowance” “component” of the “payment rules” provides for an allowance of “25% for ordinary hours at the Employee’s Classification rate”. Reading the Agreement as a whole, it is clear that an employee working ordinary hours of night shift from Monday to Friday is entitled to be paid at their “Classification rate” plus a 25% allowance.
[66] Also telling is that the body of the Agreement does not deal with the question of when shift allowances are payable. The only provision in the body of the Agreement that deals with the payment of shift allowances is clause 7.2. That provision states that “payments for shift allowances … are set out in Appendix 3 – Payment Rules”, but does not address when such allowances are payable. The only way of determining when shift allowances are payable is by going to the “payment rules” in Appendix 3. It is clear from Appendix 3 that the trigger for the payment of a shift allowance is the working of “ordinary hours” in a shift that meets the definition of an “afternoon shift” or “night shift” in clause 2.
[67] We do not accept the proposition that clause 7.2 of the Agreement supports a conclusion that shift allowances are not payable for ordinary hours worked on public holidays. Clause 7.2 simply states that the payments for shift allowances and ordinary hours worked on a weekend are set out in Appendix 3. The essential point conveyed by clause 7.2 and reinforced in the heading of that clause is that the payments referred to apply to ordinary hours and not to overtime – whether it is rostered or non-rostered overtime. If the clause did not refer to shift allowances, they would still be payable to employees working ordinary hours on weekends at times that are within the definition of afternoon or night shift in clause 2 of the Agreement. Clause 7.2 reinforces the conclusion that shift allowances are payable on ordinary hours rostered at times that meet the definitions of afternoon or night shift in clause 2 of the Agreement and there is no basis for not applying the same principle to ordinary hours worked on afternoon and night shifts on public holidays.
[68] We do not accept that there is any inconsistency with respect to casual employees arising from our construction of the Agreement. The casual loading in Appendix 3 applies to hours worked, regardless of the times at which those hours are worked. The casual loading is 25% of the employee’s classification rate. By virtue of clause 5.4 of the Agreement, casual loading is paid in lieu of entitlements to “Personal Carer’s Leave, Annual Leave and recognised Public Holidays”. The reference to casual loading being in lieu of “recognised Public Holidays” does not disentitle a casual employee to penalty rates for work on public holidays. Other issues may arise in relation to the entitlement of casual employees under the Agreement to be paid for public holidays on which they are not required to work. Such issues are not relevant in the present case and it is not necessary to determine them.
[69] Further, we do not accept that there is any tension between the provisions and payment rules in the Agreement with respect to shift loadings, weekend work, overtime work and work on public holidays, arising from our construction of the Agreement. As we have previously stated, shift loadings are payable on ordinary time only, and it would not be possible for an employee to be paid overtime, afternoon or night shift allowance and public holiday rates cumulatively. An employee working an afternoon or night shift on a public holiday would receive a shift allowance only for any ordinary time component of the shift.
[70] An employee working on a public holiday that fell on a Saturday or Sunday would clearly not be entitled to receive both the Saturday or Sunday rate and the public holiday rate, on the basis that the “payment rule” in Appendix 3 in relation to ordinary hours worked on a Saturday or Sunday is a general provision applicable to Saturdays and Sundays while the public holiday “payment rule” is a specific provision applicable to public holidays including those which fall on a Saturday or Sunday. Any potential conflict can be resolved by the application of the rule of construction to the effect that a general provision cannot derogate from a specific provision so that the general “payment rule” for ordinary hours worked on a Saturday or Sunday does not over-ride, and would give way to, the specific rule in relation to the rates for public holidays which includes rates for rostered and non-rostered overtime.
[71] We are of the view that, when the disputed provisions of the Agreement are read in the context of the Agreement as a whole, and having regard to the purpose of the relevant provisions, their meaning is clear. Employees are entitled to be paid afternoon or night shift allowances for ordinary hours worked on any day (including public holidays), at times that are within the definition of afternoon or night shift in clause 2 of the Agreement. We have also considered the statements filed by the parties in the proceedings at first instance and can see nothing that contradicts the construction of the Agreement that we have determined.
Conclusion
[72] Permission to appeal is granted.
[73] The appeal is upheld.
[74] The Decision of Deputy President Dean is quashed.
[75] We make a further decision that the dispute between the parties (C2016/6520) is determined on the basis that the answer to the question for arbitration is in the affirmative, subject to the qualification that it is only in respect of ordinary hours worked by an employee who performs shift work on a public holiday that the obligation to pay a shift loading in addition to public holiday penalties arises.
VICE PRESIDENT
Appearances:
A. Walkaden for the Appellant.
B. Rauf, of Counsel, for the Respondent.
Hearing details:
2017.
Melbourne:
25 July 2017.
1 [2017] FWC 1763.
2 Ibid at [3].
3 Ibid at [18].
4 [2014] FWCFB 7447.
5 City of Wanneroo v Australian, Municipal, Clerical and Services Union [2006] FCA 813; [2006] 153 IR 426.
6 Amcor Limited v Construction, Forestry, Mining and Energy Union (2005) 222 CLR 241.
7 Kucks v CSR Limited (1996) 66 IR 182; City of Wanneroo v Australian, Municipal, Clerical and Services Union (2006) 156 IR 426 at [53]; Shop Distributive and Allied Employees Association v Woolworths Limited [2006] FCA 6 at [14]; Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union known as the Australian Manufacturing Workers Union (AMWU) v Berri Pty Limited [2017] FWCFB 3005 at [46].
8 [2017] FWCFB 3005.
9 Fair Work Act 2009 (Cth) s 604(2).
10 Esso Australia Pty Ltd v AMWU; CEPU; AWU[2015] FWCFB 210, [6].
11 [2010] FWAFB 5343, [27].
12 Esso Australia Pty Ltd v AMWU; CEPU; AWU[2015] FWCFB 210, [7].
13 Wan v Australian Industrial Relations Commission (2001) 116 FCR 481; [2001] FCA 1803; BC200108538.
14 GlaxoSmithKline Australia Pty Ltd v Makin [2010] FWAFB 5343 at [26] – [27], 197 IR 266; Lawrence v Coal & Allied Mining Services Pty Ltd t/as Mt Thorley Operations/Warkworth [2010] FWAFB 10089 at [28], 202 IR 288, affirmed on judicial review in Coal & Allied Mining Services Pty Ltd v Lawler (2011) 192 FCR 78; NSW Bar Association v Brett McAuliffe; Commonwealth of Australia represented by the Australian Taxation Office [2014] FWCFB 1663 at [28].
15 [2014] NSWCA 184 at [71] – [85].
16 Manufacturers’ Mutual Insurance Ltd v Withers (1988) 5 ANZ Ins Cas 60-853 at 75-343.
17 Kirin-Amgen Inc v Hoechst Marion Roussel Ltd [2004] UKPC 6; [2005] 1 All ER 667 at [64].
18 Project Blue Sky v Australian Broadcasting Authority [1998] HCA 28; 194 CLR 355 at [78].
19 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].
20 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].
21 Toll (FGCT) Pty Ltd v Alphapharm Pty Ltd [2004] HCA 52; 219 CLR 165 at [40].
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