[2021] FWC 386

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.739 - Application to deal with a dispute

CPSU, the Community and Public Sector Union
v
Commissioner for Public Employment, Northern Territory Government
(C2020/6221)

DEPUTY PRESIDENT MASSON

MELBOURNE, 27 JANUARY 2021

Alleged dispute about any matters arising under the enterprise agreement and the NES s186(6).

Introduction

[1] On 12 August 2020 the Community and Public Sector Union (CPSU) applied to the Fair Work Commission (the Commission) to deal with a dispute pursuant to s. 739 of the Fair Work Act 2009 (the Act) under the dispute resolution procedure at clause 12 of the Northern Territory Public Sector 2017 – 2021 Enterprise Agreement 1 (the 2017 Agreement). The Respondent in the matter is the Commissioner for Public Employment, Northern Territory Government (the OCPE).

[2] The dispute is in relation to the application of clause 42.6 of the 2017 Agreement and its interaction with clause 71 of the 2017 Agreement. Specifically, whether shift workers who are rostered to work on a public holiday, but who are on recreation leave during the period of the public holiday, are to be paid the relevant public holiday penalties for the public holiday without deduction of recreation leave in accordance with clause 42.6 of the 2017 Agreement .

Jurisdiction

[3] Section 739 of the Act empowers the Commission to deal with certain disputes under enterprise agreement dispute settlement terms. The 2017 Agreement contains such a term, which is clause 12 ‘Dispute settlement procedure’ (the DSP).

[4] It was not contested that the questions to be determined by the Commission were capable of constituting a dispute over the interpretation or application of the 2017 Agreement. Nor was it in dispute that the steps taken by the parties to resolve the dispute constituted compliance with the dispute resolution provision of the 2017 Agreement. Having regard to the information in the Form F10 application and the views of the parties, I am satisfied that the Commission has jurisdiction to deal with the dispute, including by arbitration as provided by clause 12.5 of the 2017 Agreement.

[5] Conciliation before the Commission did not resolve the dispute and the matter is now to be determined by arbitration.

The hearing

[6] The matter was listed for hearing before me on Tuesday, 15 December 2020, in advance of which the parties were required to file statements and material on which they intended to rely.

[7] The CPSU were represented by Mr Kristin Barlow (CPSU Legal Officer) who called the following three witnesses;

• Ms Kay Densley (NT Regional Secretary, CPSU);

• Ms Karen Brown (Youth Justice Worker, CPSU Member); and

• Mr Lachlan Macdonald (CCTV Operator, CPSU Member).

[8] The OCPE were represented by Mr Mark Hathaway, Employee Relations Manager. The OCPE did not call any witnesses.

Issues for determination

[9] The questions agreed between the parties for determination by the Commission are as follows:

Question 1: Noting that a shiftworker who is rostered to perform work on a public holiday but who is on a period of recreation leave receives their full rate of pay (being their ordinary rate of pay and their shift penalties for the hours they were rostered on that day), does clause 42.6 prohibit the deduction of accrued recreation leave for that public holiday?

Question 2: For a 38 hour shiftworker who is rostered off on a public holiday which falls during a period of their recreation leave, should that worker be paid 7.6 hours with no deduction of accrued recreation leave for that public holiday in accordance with clause 42.6 and clause 69?

[10] At the commencement of the hearing it was established that both parties had agreed that the answer to question 2 was “yes” and that as a consequence it was unnecessary for me to determine Question 2. The dispute as it relates to Question 2 is therefore resolved.

Agreement Provisions

[11] A number of provisions in the 2017 Agreement are relevant to determination of Question 1. They are as follows.

[12] Clause 42 of the 2017 Agreement sets out Recreation Leave (i.e. annual leave) entitlements. Clause 42.6 specifically deals with the circumstances of where a public holiday falls within a period of Recreation Leave and states as follows;

“42.6 Public Holidays

(a) Where a public holiday occurs during recreation leave (including recreation leave at half pay taken under Schedule 1.2), the employee is entitled to the employee’s full rate of pay that the employee would have been paid had the public holiday fallen on a day that the employee was not on recreation leave; and

(b) the period of the public holiday is not deducted from the employee’s recreation leave entitlement.”

[13] Clause 68 details the relevant penalties for work performed on shiftwork as follows;

68 Shiftwork Penalty Rates

68.1 In addition to the employee’s ordinary salary for the shift, a shiftworker will be paid shiftwork payments as follows:

(a) Ordinary duty performed on a Saturday – 50%.

(b) Ordinary duty performed on a Sunday – 100%.

(d) Refer to the Schedules for shiftwork penalty payments applicable to shift duty performed at other times as follows:

………………….

68.4 Refer to clause 71, for the payment of shiftwork payments during a period of recreation leave.

…………….”

[14] Clause 71 relevantly states as follows;

“71. Recreation Leave and Shiftwork Penalties

71.1 A shiftworker on approved paid recreation leave will receive shiftwork penalties as if they were rostered on to perform duty during the period of recreation leave. Such payments will be referred to as ‘penalties in lieu of shiftwork’ payments (PILS).

71.2 The payment of PILS is subject to the following:

(a) the employee is approved to take at least one day’s recreation leave;

(b) recreation leave has been deducted for the shift that the employee would have worked on that day;

(b) where a forecasted roster has not been provided with a recreation leave application then PILS will be calculated based on the employee’s previous six months of shiftwork payments under clause 68.

……………..”

Background and Evidence

[15] According to Ms Densley, a dispute arose in 2016 with the OCPE in relation to the non-payment of penalty rates for public holidays that fell within a period of recreation leave 2 (the public holiday/recreation leave issue). The dispute arose in relation to clause 52.6 of the previous agreement, the Northern Territory Public Sector Enterprise Agreement 2013-20173 (the 2013 Agreement). Clause 52.6 of the 2013 Agreement was in similar terms to clause 42.6 in the 2017 Agreement.

[16] On 18 August 2016 the CPSU wrote to the Norther Territory Police, Fire and Emergency Services (the NTPFES) notifying it of a dispute as it affected some of its employees. 4 The concern raised by the CPSU was that of the non-payment of public holiday penalties when a public holiday fell within a period of recreation leave. The NTPFES responded to the CPSU in correspondence dated 29 August 2016 and stated as follows in respect of the public holiday issue;

“……………

Last of all, the question has been raised regarding the quantum of the payment of a shift work penalty on a public holiday whilst on recreation leave pursuant to clause 10.3 of Schedule 1 and clause 52.6 of the Enterprise Agreement (EA). A legislative interpretation consensus has been raised by the legal employer (OCPE) in accordance with clause 10.3 of Schedule 1 and clause 52.6 of the EA is provided as follows;

Regardless of the length of approved recreation leave taken by an employee:

a) no recreation leave will be deducted from the employees recreation leave credits for rostered hours that fall on a public holiday;

b) the employee will receive their full rate of pay (salary payment) that he or she would have received had the public holiday fallen on a day they had not been on approved recreation leave; and

c) shift work penalties (not PILs) will apply and be paid to the employee in respect of any shift duty the employee would have performed had they not been on approved recreation leave.

…………………” 5

[17] Ms Densley states that the CPSU became aware in early 2017 that the OCPE had apparently changed its view regarding the payment of the shift penalties when the public holiday fell with a period of recreation leave and was refusing to pay the shift penalties in these circumstances. This was confirmed in an email sent by a representative of the NTPFES to the CPSU on 6 March 2017. 6 The NTPFES also advised that the OCPE had updated its information sheet in respect of the issue.7

[18] On 11 April 2017 the CPSU and OCPE commenced negotiations for a new enterprise agreement, with the 2013 Agreement due to reach its nominal expiry date on 10 August 2017. According to Ms Densley, negotiations for a replacement agreement proceeded between April and November 2017. 8

[19] On 29 August 2017, the CPSU sent correspondence to the Chief Minister of the Northern Territory government raising concerns about bargaining and the Northern Territory government’s public sector wages policy. 9 The CPSU also identified during September 2017 the various outstanding bargaining issues, including the public holiday/recreation leave issue.10 Ms Densley states that she attended a meeting by telephone on 11 September 2017 with the Minister of Public Employment (the Minister) and the Minister’s Chief of Staff during which meeting she explained the outstanding bargaining issues, including the public holiday/recreation leave issue. Ms Densley states that while the Minister did not agree in the meeting to the specific outstanding claims, he had said the requests were reasonable.11

[20] On 3 October 2017, officials of the CPSU and United Voice met with the Commissioner of Public Employment (the Commissioner) during which meeting Ms Densley states she again went through the main ‘sticking points’ in bargaining with the OCPE. The items raised included the public holiday/recreation leave issue. 12 Further bargaining meetings involving the CPSU and OCPE were conducted on 5 & 10 October 2017.13 On 10 October 2017 the CPSU sent further correspondence to the OCPE representatives in which outstanding shiftwork issues were raised, including the public holiday/recreation leave issue. The correspondence relevantly stated as follows;

“……………..

Impact of recreation leave on shift penalty payments

While this matter has been subject to discussion in bargaining, it is not properly characterised as a claim.

During the life of the current agreement, disputes have arisen with respect to changes in the way penalties are/were paid for some groups of shift workers in the NTPS for:

• Periods of recreation leave of less than five days; or

• Penalties paid when rostered on duty for a public holiday during a recreation leave period.

My understanding is that these disputes have only affected some groups of shift workers, rather than applying generally.

Properly read, the current agreement provides for shift penalties to be paid for any duty that would have been performed except for the employee being on recreation leave, notwithstanding the length of the period of recreation leave or the applicable penalty rate. This is consistent with long standing practice, the terms of the EA and the terms of the Award.

The reinterpretation, which I understand is the work of a particular OCPE staff member, threatens to disadvantage members. I understand that some disputes have been resolved on the basis of retaining the long standing practice but that not all disputes have been resolved.

The CPSU suggests the following alternatives as a way forward:

1. The CPSU moves to lodge a dispute in relation to these matters at the FWC and we seek the Commission’s assistance in resolving the difference of view between OCPE and CPSU.

2. CPSU and OCPE agree a common interpretation to be applied consistently to all shift work areas with CPSU members. The common interpretation to be consistent with the long standing practice and the parties identify any minor wording changes necessary to avoid future ambiguity. An audit of the penalties paid on recreation leave be conducted for employees in those areas where a dispute has arisen and any discrepancies are corrected.

In my view option 2 provides the best path forward but I would appreciate your views.

……………..” 14

[21] On 30 October 2017 the OCPE wrote to the various unions involved in bargaining, including the CPSU, and outlined its revised “without prejudice” offer for a new enterprise agreement. In relation to the public holiday/recreation leave issue, the revised offer stated as follows;

“……………….

Conditions for Shift Workers

During the negotiations my representatives have worked with the unions to align the terms and conditions of shift workers across the Schedules. Although we weren’t able to resolve all issues I have agreed to the union claim that all shift workers be paid their penalties for any days they are on recreation leave. This will include any public holidays that fall during a recreation leave period. This will remove the highly administrative function of acquitting the shift payments and leave bonus at the end of the period and be a benefit to workers.

……………….” 15 (emphasis added)

[22] The correspondence also went on to confirm as follows in respect of the “Improved Offer” put forward by the OCPE;

“Penalties for shiftworkers during recreation leave

It is proposed that the conditions for shiftworkers would be improved so that they received shift penalty payments when taking any period of recreation leave. This will include public holidays that fall during a period of recreation leave and would remove the highly administrative function of acquitting the shift payments and leave bonus at the end of the period.” 16 (emphasis added)

[23] On 31 October 2017 the OCPE communicated its revised offer directly to staff and relevantly included the same proposal regarding the public holiday shift penalty issue as was outlined in its correspondence of 30 October 2017 to the unions. 17 The CPSU subsequently wrote to its members the same day regarding the OCPE’s revised enterprise agreement offer. The CPSU stated in its bulletin that amongst other deficiencies the “Problems with shift work conditions have not been fully addressed”. While conceding some improvements had been made, the CPSU remained critical of the OCPE position and stated that the “improvements don’t go far enough or offset the problems with this offer.”18

[24] Following the CPSU bulletin, the OCPE responded with its own bulletin in which it challenged a number of statements made by the CPSU regarding the OCPE’s new enterprise agreement offer. With respect to the public holiday shift penalty issue the OCPE Bulletin relevantly stated as follows;

“………………..

MYTH: Shiftworkers are being shafted

FACT: Shiftworker entitlements will be improved in the new agreement with higher overtime rates for employees covered by Schedule 2. Shiftworkers will also receive penalty payments on each day of recreation leave (without the current five day minimum).

……………….” 19

[25] On 8 November 2017 the OCPE issued a revised draft enterprise agreement to bargaining representatives and a further meeting of the bargaining parties was held on 14 November 2017 to discuss the latest draft enterprise agreement. 20 Ms Densley states that she recalls that during that meeting a discussion took place in relation to the public holiday/recreation leave issue during which an OCPE representative stated that the penalties should be paid if a deduction of recreation leave was made. Ms Densley further states that she responded by advising that she disagreed and that the approach stated by the OCPE representative had not been agreed.21

[26] Following the above-referred meeting on 14 November 2017, a further revised draft agreement was provided by the OCPE in a “clean copy” form. 22 An explanatory note was also provided by Ms Glew of the OCPE which detailed some of the changes contained in the draft agreement. According to Ms Densley, the CPSU were given only one day to respond to the revised draft agreement.23 The explanatory note made no reference to the public holiday/recreation leave issue but did refer to clause 71 Recreation Leave and Shiftwork Payments. In the comments in relation to clause 71 the OCPE stated that the “Offer has referred to being paid PILS ‘on one day’ the employee takes recreation leave. This provision makes it clear it is minimum one day of recreation leave to receive PILS.”24

[27] On 16 November 2017, the OCPE notified employees of the commencement of the ‘access period’ prior to the ballot for approval of the 2017 Agreement. Explanatory materials were provided to employees in relation to the proposed agreement. In relation to clause 42 Recreation Leave in the proposed agreement, the explanatory notes document stated “There is no change to this clause and is the same wording from clause 52 in the current Agreement.” 25 In relation to clause 71 Recreation Leave and Shiftwork Payments the explanatory notes document stated as follows;

“The clause in the new Agreement sets out when penalties are paid when an employee proceeds on recreation leave.

There is an improvement in that an employee can take one day recreation leave and receive shift penalties.” 26

[28] Ms Densley states she understood that the issue of public holiday shift penalty payments during a period of recreation leave without deduction of leave had been resolved arising from her discussions with the Minister and the Commissioner and also based on information subsequently provided to staff. 27 Following the successful vote for the 2017 Agreement on 20 December 2017 Ms Densley wrote to the OCPE seeking confirmation that what the CPSU understood to be the agreed interpretation of the new clause 42.6 had been promulgated to agencies. Mr J Finlay responded on 8 January 2018 on behalf of the OCPE to Ms Densley’s 20 December 2017 correspondence. Mr Finlay stated as follows;

“Subject: RE: Resolution to the Dispute re PILS

Hi Kay,

There was no formal settlement on all matters relating to the PILS/Public Holiday issue raised by CPSU but it was my understanding that we had both agreed that employees should have a clear understanding of how the Agreement applied in relation to the payment of shift penalties while on recreation leave. However, there was no agreement to the CPSU's interpretation of the clauses in the NTPS 2013-2017 Enterprise Agreement.

It is my recollection that there were a range of discussion both with Mark Hathaway outside of bargaining about the dispute and also specifically in bargaining with myself.

During the back and forth of bargaining various positions were put both by the union and by the employer but the issues were not settled. Our proposals for the new 2017-2021 Enterprise Agreement did not mean our interpretation of the 2013-2017 Agreement had changed.

I am happy to have a meeting to discuss the issue. As I have mentioned in the past the option for employees and Agencies to discuss Group Flexible Work Arrangements for a consolidated allowance are always available.

Kind Regards
Jason Finlay” 28

[29] Mr McDonald, who is a shiftworker in the NTPFES, states in his evidence that there have been different approaches applied over the years by the OCPE in relation to the public holidays shift/recreation leave issue and that for a “short period” of time employees were paid the correct penalties for a public holiday that fell within a period of recreation leave without recreation leave deduction. He further states that he attended an information session in mid to late 2016 during which a representative of the NTPFES, Mr D Blewitt, explained entitlements of employees to shift penalties while on recreation leave. Mr McDonald states that he and other staff present were left with the impression that when a public holiday fell within a period of recreation leave, no recreation leave deduction would be made for the public holiday and employees would receive the appropriate shift penalties they would have received had they worked on the public holiday. 29

[30] Mr McDonald also states that he was present at a bargaining meeting in July or early August 2017 during which the OCPE representative Mr J Finlay conceded that the CPSU’s interpretation of the relevant clauses in 2013 Agreement dealing with the public holiday/recreation leave issue would be applied from the beginning of the new agreement. Notwithstanding that claimed concession, Mr McDonald provided detailed evidence confirming that he had not received shift penalties for public holidays falling within periods of recreation leave without recreation leave deduction during the period of operation of the 2017 Agreement. He also says that the payroll practice has been inconsistent in that on occasions despite no shift penalties being paid, recreation leave deductions have been made for public holidays falling within a period of recreation leave. 30

[31] Ms K Brown, who is also a shiftworker, gave evidence that until recently she understood the OCPE’s practice to be that of not paying shift penalties for a public holiday falling within a period of recreation leave but that no deduction of recreation leave was made for the public holiday. This had largely been her experience during the period of operation of the 2017 Agreement 31 although payroll errors had occurred occasionally that were subsequently corrected.32 By contrast to the approach adopted until recently by the OCPE, Ms Brown states that she now understands the OCPE position to be that shift penalties are payable on a public holiday that falls within a period of recreation leave in circumstances where recreation leave is deducted for the public holiday/s.33

[32] Both Ms Brown and Mr McDonald stated in their evidence that they understood from the negotiations for the 2017 Agreement, and the various supporting materials, that the OCPE had agreed to pay shift penalties for public holidays falling within a period of recreation leave where the employee would have otherwise been rostered to work on the public holiday. 34

[33] On application by the OCPE for approval of the 2017 Agreement the CPSU raised a number of BOOT concerns in respect of the agreement. These concerns included the issue of public holidays falling within a period of recreation leave. Those concerns were considered by the Commission as part of the agreement approval process. The relevant extracts of the decision to approve the 2017 Agreement 35 (the Approval Decision) are set out below for completeness;

“CPSU Case

………

Public holidays falling in a period of recreation leave

[23] The CPSU’s second objection was based on a concern with respect to the operation of Clause 42.6 Public Holidays and Clause 71 Recreation Leave, which the CPSU contended operated so as to deprive employees of more beneficial entitlements available under the Award.

[24] The CPSU submitted that Clauses 14.4 and 18.7 of the Award entitled an employee engaged as a shiftworker on annual leave to the payment of shift and public holiday penalty rates for shifts that fell during the period of annual leave. In circumstances where a rostered shift during a period of annual leave fell on a public holiday, the CPSU submitted that under the Award an employee would be entitled to payment of what the employee would have received had they been at work, including shift and public holiday penalties for such day.

[25] The CPSU submitted that the interaction of clauses 42.6 and 71.2 of the Agreement was ambiguous and operated such that a shiftworker on recreation leave would not be entitled to payment of shift and public holiday penalties for a public holiday in circumstances where the public holiday fell on what would otherwise have been a rostered shift. The CPSU submitted that this was consequently less beneficial than the Award.

[26] The CPSU noted that the Award was silent on the requirement for the deduction of a day of recreation leave in circumstances where a public holiday fell on what would otherwise have been a rostered shift but for the recreation leave.

………………….

Applicant Case

…………….

Public holidays falling in a period of recreation leave

[35] The Applicant submitted that the CPSU’s concern was simply a further ventilation by the CPSU of a claim raised by them (the CPSU) and rejected by the Applicant during bargaining.

[36] The Applicant further submitted that public holidays falling within a period of recreation leave of a shiftworker on a day that would otherwise have been a rostered shift did not attract the payment in lieu of penalties (PILS) pursuant to clause 71.2 of the Agreement. This was because such day would not be deducted from an employee’s accrued recreation leave balance and would be paid in accordance with clause 42.6 of the Agreement. That clause provided for no deduction of the public holiday from an employee’s recreation leave entitlement and payment for such day at the “employee’s full rate of pay” which the Applicant submitted had a unique and accepted meaning within its operations, that being the base salary exclusive of shift and other penalty payments.

[37] The Applicant submitted that, as the public holiday was not subject to deduction from an employee’s recreation leave balance, then the public holiday was not treated as recreation leave and consequently would not give rise to an entitlement to shift and public holiday penalty payments under the Award as contended by the CPSU. The Applicant submitted that in these circumstances the provisions could not be regarded as less beneficial than the Award.

……………………

Does the Agreement satisfy the BOOT?

Public holidays falling in a period of recreation leave

[67] The CPSU position on this issue can be summarised as follows. Under the relevant Award provisions, clauses 18.7 and 18.10, a public holiday falling during a period of recreation leave of a shiftworker would attract shift and public holiday penalty payments in circumstances where the day would have been a rostered shift but for the period of recreation leave. The CPSU contend that under the Agreement, the shiftworker in those same circumstances would not be entitled to shift or public holiday penalties, consequently the Agreement is less beneficial than the Award.

[68] The Applicant’s position is that such public holiday while falling within a period of recreation leave is not treated as recreation leave and is not deducted from an employee’s recreation leave balance, per clause 42.6 of the Agreement. Consequently the payment of PILS pursuant to clause 71.2 of the Agreement does not arise.

[69] The Award in the above scenario does not provide for or require a deduction of the public holiday from a shiftworker’s recreation leave balance. This is a key point of difference between the Award and Agreement entitlements. Were a deduction for the public holiday from the recreation leave balance required under the Agreement, then the CPSU contention would have greater force. But that is not the position. A shiftworker under the Agreement is entitled to receive the employee’s “full rate of pay” for the public holiday without deduction from the employee’s recreation leave balance in accordance with clause 42.6 of the Agreement.

[70] I am consequently not persuaded that the interaction of clauses 42.6 and 71.2 of the Agreement operate so as to deprive shiftworkers of a more beneficial entitlement available under clauses 18.7 and 18.10 of the Award. The interaction and operation of clauses 42.6 and 71.2 of the Agreement are consequently a neutral consideration in the conduct of the BOOT assessment.”

CPSU submissions

[34] The CPSU contend that the dispute, as reflected in Question 1, relates to the construction of clause 42.6 of the 2017 Agreement and that the plain and ordinary meaning of the words must result in the answer to Question 1 being “Yes”.

[35] According to the CPSU, the practice of the OCPE has not been consistent. For an extended period the practice of the OCPE has been to pay shiftworkers their normal average salary for a public holiday that falls within a period of recreation leave in circumstances where, but for the recreation leave, an employee would have been rostered to work on the public holiday. Further, no recreation leave deduction was made in respect of the public holiday in these circumstances.

[36] According to the CPSU, the OCPE have however more recently agreed that shift penalties should be paid for a public holiday falling within a period of recreation leave where the employee would have, but for the recreation leave, been rostered to work on the public holiday. The OCPE now maintain that a deduction of recreation leave should be made in these circumstances for the public holiday.

[37] The CPSU contend that clause 42.6(b) is explicit in that is says that “the period of the public holiday is not deducted from the employee’s recreation leave entitlement.” This they say accords with the section 89(1) of the Act which states as follows;

“89 Employee not taken to be on paid annual leave at certain times

Public holidays

(1) If the period during which an employee takes paid annual leave includes a day or part-day that is a public holiday in the place where the employee is based for work purposes, the employee is taken not to be on paid annual leave on that public holiday.

……………..”

[38] If the Commission finds however that there is ambiguity in the meaning of clause 42.6, the CPSU submit that it is appropriate for the Commission to have regard to extrinsic materials in accordance with the principles set out in Berri. Of relevance are items 11 and 12 in that decision, that being that evidence of the objective background facts known to both parties may be admitted to assist resolve any ambiguity. The CPSU rely on the following evidence as to the objective background facts;

• Ms Densley’s evidence as to the background contentions of the parties in relation to the underlying dispute in the lead up to negotiations of the 2017 Agreement;

• Ms Densley’s meeting with the Minister on 11 September 2017 during which the outstanding issues were raised by her;

• CPSU correspondence with the Commissioner, including the letter dated 10 October 2017;

• The OCPE’s revised enterprise agreement offer dated 30 October 2017;

• The explanatory material provided to employees during the access period prior to the ballot conducted for approval of the 2017 Agreement; and

• The evidence of Ms Brown and Mr McDonald as to their belief that the issue of the interpretation and application of clause 42.6 of the 2017 Agreement in line with the CPSU position had been agreed to by the OCPE during negotiations for the 2017 Agreement.

[39] The CPSU do not agree that there is a conflict between clauses 42.6 and 71.2 of the 2017 Agreement as they deal with different situations, those being;

(i) Clause 71 deals with recreation leave and the payment of PILS in circumstances where leave is deducted;

(ii) Clause 42.6 deals with where a public holiday falls within a period of recreation leave, entitling an affected employee to their full rate of pay without deduction of recreation leave for such public holiday.

[40] The CPSU submit that clause 71.2 does not apply to the circumstances in dispute and cannot conflict with clause 42.6 for the following reasons;

(i) The Approval Decision said the interaction of the two clauses was a neutral consideration in the BOOT assessment;

(ii) Section 89 of the Act states that a person is not on annual leave on a public holiday; and

(iii) Clause 71 does not apply as an employee is not on recreation leave when a public holiday falls within a period of recreation leave.

OCPE submissions

[41] The OCPE submits that the dispute arises from a direct conflict between clauses 42.6(b) and 71.2(b) of the 2017 Agreement. The OCPE disagree that resolution of the dispute requires an examination of the extrinsic materials to determine the matter. The OCPE further submit that the two provisions are not ambiguous and both clauses have a plain meaning. The OCPE argue that an intrinsic contextual consideration of the written terms of the 2017 Agreement is the best way to resolve the dispute and should be given substantial weight before embarking on an extensive examination of extrinsic material.

[42] The OCPE submit that there are intrinsic aids to interpretation, the first relevant one being the maxim Generala Specialibus Non Derogant which is founded in general law and is the surest guide to resolving the conflict between the general and specific provisions in the 2017 Agreement. The second intrinsic aid is that a later introduced provision prevails over an earlier one. The OCPE submit that the rule of construction, that a later enactment is applied if the terms of a statute cannot be reconciled, should be applied to resolve the present conflict in the terms of the 2017 Agreement.

[43] In applying the maxim Generala Specialibus Non Derogant the OCPE submit that clause 71.2 is a specific entitlement for shift workers and that its primary purpose is that of providing employees with a “PILS” payment for shiftwork penalties that they may otherwise miss out on because they are on recreation leave. The OCPE further submit that the structure of the specific entitlement is clear that recreation leave is to be deducted when the PILS payment is made. The OCPE argue that in contrast, clause 42.6 Public Holidays is expressed as a provision of general application and is a sub-section of Recreation Leave at clause 42. It states generally how public holidays that fall within a period of recreation leave are to be treated.

[44] The OCPE submit in the alternative to their primary submission above that should the application of Generala Specialibus Non Derogant be found to not apply, they seek an alternative finding that a later introduced provision will override an earlier provision. They submit that clause 42.6(b) was in the same terms in the 2013 Agreement whereas clause 71.2(b) was a new provision introduced into the 2017 Agreement.

[45] The OCPE confirmed that it agrees with the CPSU that shift penalties should be paid in respect of a public holiday that falls within a period of recreation leave where the public holiday would have been worked but for the recreation leave. The OCPE submits however that clause 71(2)(b), which was introduced in the 2017 Agreement, requires a recreation leave deduction for the public holiday/s in these circumstances. The OCPE also acknowledged that the position of the OCPE had “chopped and changed” on this issue and that the explanatory materials provided to employees prior to the ballot for the 2017 Agreement failed to make clear the effect of clause 71.2(b) as now argued by the OCPE.

Approach to construing enterprise agreement terms

[46] The approach to construing enterprise agreements was most recently set out in a Decision of a Full Bench of the Commission in “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU) v Berri Pty Ltd 36(Berri) as follows:

“[114] 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.

2. The task of interpreting an agreement does not involve rewriting the agreement to achieve what might be regarded as a fair or just outcome. The task is always one of interpreting the agreement produced by parties.

3. The common intention of the parties is sought to be identified objectively, that is by reference to that which a reasonable person would understand by the language the parties have used to express their agreement, without regard to the subjective intentions or expectations of the parties.

4. The fact that the instrument being construed is an enterprise agreement made pursuant to Part 2-4 of the FW Act is itself an important contextual consideration. It may be inferred that such agreements are intended to establish binding obligations.

5. The FW Act does not speak in terms of the ‘parties’ to enterprise agreements made pursuant to Part 2-4 agreements, rather it refers to the persons and organisations who are ‘covered by’ such agreements. Relevantly s.172(2)(a) provides that an employer may make an enterprise agreement ‘with the employees who are employed at the time the agreement is made and who will be covered by the agreement’. Section 182(1) provides that an agreement is ‘made’ if the employees to be covered by the agreement ‘have been asked to approve the agreement and a majority of those employees who cast a valid vote approve the agreement’. This is so because an enterprise agreement is ‘made’ when a majority of the employees asked to approve the agreement cast a valid vote to approve the agreement.

6. Enterprise agreements are not instruments to which the Acts Interpretation Act 1901 (Cth) applies, however the modes of textual analysis developed in the general law may assist in the interpretation of enterprise agreements. An overly technical approach to interpretation should be avoided and consequently some general principles of statutory construction may have less force in the context of construing an enterprise agreement.

7. In construing an enterprise agreement it is first necessary to determine whether an agreement has a plain meaning or it is ambiguous or susceptible of more than one meaning.

8. Regard may be had to evidence of surrounding circumstances to assist in determining whether an ambiguity exists.

9. If the agreement has a plain meaning, evidence of the surrounding circumstances will not be admitted to contradict the plain language of the agreement.

10. If the language of the agreement is ambiguous or susceptible of more than one meaning then evidence of the surrounding circumstance will be admissible to aide the interpretation of the agreement.

11. The admissibility of evidence of the surrounding circumstances is limited to evidence tending to establish objective background facts which were known to both parties which inform and the subject matter of the agreement. Evidence of such objective facts is to be distinguished from evidence of the subjective intentions of the parties, such as statements and actions of the parties which are reflective of their actual intentions and expectations.

12. Evidence of objective background facts will include:

(i) evidence of prior negotiations to the extent that the negotiations tend to establish objective background facts known to all parties and the subject matter of the agreement;

(ii) notorious facts of which knowledge is to be presumed; and

(iii) evidence of matters in common contemplation and constituting a common assumption.

13. The diversity of interests involved in the negotiation and making of enterprise agreements (see point 4 above) warrants the adoption of a cautious approach to the admission and reliance upon the evidence of prior negotiations and the positions advanced during the negotiation process. Evidence as to what the employees covered by the agreement were told (either during the course of the negotiations or pursuant to s.180(5) of the FW Act) may be of more assistance than evidence of the bargaining positions taken by the employer or a bargaining representative during the negotiation of the agreement.

14. Admissible extrinsic material may be used to aid the interpretation of a provision in an enterprise agreement with a disputed meaning, but it cannot be used to disregard or rewrite the provision in order to give effect to an externally derived conception of what the parties’ intention or purpose was.

15. In the industrial context it has been accepted that, in some circumstances, subsequent conduct may be relevant to the interpretation of an industrial instrument. But such post-agreement conduct must be such as to show that there has been a meeting of minds, a consensus. Post-agreement conduct which amounts to little more than the absence of a complaint or common inadvertence is insufficient to establish a common understanding.” 37

Consideration

[47] As set out in Berri, the task of construing the disputed provisions within an agreement starts with consideration of the ordinary meaning of the relevant terms and that will turn on the language of the agreement having regard to its context and purpose. Context might be apparent from the text of the agreement viewed as a whole, the disputed provision’s place and arrangement in the agreement and the legislative context under which the agreement was made and in which it operates. As a starting point it is useful to set out some contextual factors that may be relevant to the construction task.

[48] Turning firstly to the structure and arrangement of the 2017 Agreement. The 2017 Agreement comprises 5 Parts and 12 Schedules. The Parts of the Agreement are as follows;

• Part 1 – Application and Operation of the Agreement

• Part 2 – Procedural Matters

• Part 3 – General Employment Conditions

• Part 4 – Hours of Work

• Part 5 – Other Allowances and Conditions

[49] Part 3 – General Employment Conditions of the 2017 Agreement comprises 4 Divisions, those being;

• Division 1 – Pay, Increments and Allowances

• Division 2 – Employment Arrangements

• Division 3 – Leave

• Division 4 – Other

[50] Part 4 – Hours of Work of the 2017 Agreement comprises 3 Divisions, those being;

• Division 1 – General

• Division 2 – Dayworkers

• Division 3 – Shiftworkers

[51] As stated above, there are also 12 Schedules to the 2017 Agreement which are as follows;

• Schedule 1 - Work Life Balance Initiatives

• Schedule 2 - The Community and Public Sector Union Provisions

• Schedule 3 - Construction and Maintenance Employees’ Provisions

• PART A – Construction and Maintenance

• PART B – Communications, Electronics and Radio

• Schedule 4 - Department of Health Employees – United Voice Provisions

• Schedule 5 - General Employees – United Voice Provisions

• Schedule 6 - Professional (P1) Engineer Provisions

• Schedule 7 - Transport Workers’ Union Provisions

• Schedule 8 - Drafting Supervisory Technical and Other Employee Provisions

• Schedule 9 - Northern Territory Senior Correctional Officer Provisions

• Schedule 10 - Northern Territory Public Sector Redeployment and Redundancy Entitlements

• Schedule 11 - Rates of Pay and Allowances

• PART A – Salaries

• PART B – Work Related Allowances

• PART C – Expense Related Allowances

• Schedule 12 - Supported Wage System

[52] As can be seen above, the structure of the 2017 Agreement is such that provisions of general application sit within Parts 1 - 5. Schedules 2–9 contain provisions that supplement the general provisions in Parts 1 - 5 and are stated to apply to particular classifications/occupations and within specified union coverage. Schedule 10 details Redundancy and Redeployment conditions that apply generally throughout the Northern Territory Public Sector and Schedule 11 contains all salary rates and allowances. Clause 6 Purpose and Operation of Schedules of the Agreement details the relationship between terms and conditions in the Schedules and Parts 1 - 5 of the 2017 Agreement. It states at clause 6.2 in Part 1 that where there is an inconsistency, terms and conditions in Parts 1 - 5 will prevail over terms and conditions in Schedules 2 - 8 & 10.

[53] Turning to the disputed provision. Clause 42.6 sits within Clause 42 Recreation Leave in Division 3 of Part 3 of the 2017 Agreement. Clause 42 Recreation Leave also includes sub-clauses that deal with the quantum of leave (clause 42.3), accrual of leave (clause 42.4), granting of leave (clause 42.5), excess leave arrangements (clause 42.7), cashing out of leave (clause 42.8), illness during leave (clause 42.9) and payment in lieu on cessation of employment or death (clause 42.10). It is plainly apparent given the structure of clause 42 that while clause 42.6 applies generally to employees covered by the 2017 Agreement, both in respect of dayworkers and shiftworkers, its operative effect is specifically in relation to public holidays falling within a period of recreation leave.

[54] There is no dispute in relation to the operation of clause 42.6 as it applies to dayworkers. Nor is there a contest as to the meaning of the words “full rate of pay” where those terms appear in sub-clause 42.6(a) as the terms are applied to shiftworkers. While the OCPE’s position on the meaning of the “full rate of pay” has altered over time, both parties now agree for the purposes of this dispute that, where a public holiday falls within a period of recreation leave taken by a shiftworker and where that shiftworker would have been rostered to work on the public holiday but for the period of recreation leave, the shiftworker is entitled to receive the “full rate of pay”, which includes the relevant shift penalties the shiftworker would have received had they worked on the public holiday.

[55] The contest is over the meaning of clause 42.6(b) which explicitly states that, in the circumstances described above, that is where a public holiday falls within a period of recreation leave and where the affected employee receives the “full rate of pay” for such public holiday, “the period of the public holiday is not deducted from the employee’s recreation leave entitlement.”

[56] Read in isolation, the words of clause 42.6 have a plain and clear meaning in respect of shiftworkers. That is, a shiftworker is entitled to receive payment for the public holiday as if they had been rostered to work where the public holiday falls within a period of recreation leave. The “full rate of pay” includes the relevant shift penalties. No recreation leave deduction is permitted for that public holiday in these circumstances. Read more broadly within the context of clause 42 Recreation Leave, the plain meaning of clause 42.6(b) which I have just described is not disturbed. This is so as there are no other provisions within clause 42 Recreation Leave that contradict or alter the operation of clause 42.6(b).

[57] Significantly, the above construction of clause 42.6 can also be read harmoniously with s 89(1) of the Act which states as follows;

“89 Employee not taken to be on paid annual leave at certain times

Public holidays

………………..” (emphasis added)

[58] The CPSU did not contend that section 89 of the Act operates to prohibit the deduction of annual leave for a public holiday that falls within the period of annual leave under the 2017 Agreement. The CPSU position is based on their acceptance of the Federal Court authority of Construction, Forestry, Mining and Energy Union v Glendell Mining Pty Ltd 38 (Glendell Mining) which relevantly found that deduction of annual leave where leave fell on a public holiday was not prohibited in circumstances where the annual leave entitlement was in excess of the NES annual leave minimum entitlement.

[59] Clause 42.3 of the 2017 Agreement sets out the recreational leave entitlement which is that of 4 weeks for all employees other than shiftworkers. Shiftworkers receive an additional 7 days recreation leave. An additional 2 weeks paid recreation leave is also provided for employees normally stationed in the Northern Territory. It follows therefore that the base recreation leave entitlement is that of 6 weeks for employees normally stationed in the Northern Territory with seven weeks recreation leave for shiftworkers. It follows, on the authority of Glendell Mining, that s. 89 of the Act would not operate to prevent the deduction of recreation leave for a public holiday falling in a period of leave given the 2017 Agreement provides for a greater entitlement than the NES.

[60] However, unlike the terms of the Glendell Mining agreement, the 2017 Agreement contains a term (clause 42.6(b)) that expressly deals with the circumstances of public holiday/s falling in a period of recreation leave. Consequently, while s. 89 of the Act might not operate to prohibit the deduction of recreation leave given the leave entitlements provided by the 2017 Agreement are above the NES, the terms of the 2017 Agreement will condition whether such deduction can or cannot be made. On a plain reading of clause 42.6(b) it is tolerably clear that the wording, which is aligned with s. 89 of the Act, operates so that a public holiday falling within a period of recreation leave is not deducted from the leave balance and is therefore not treated as recreation leave. Were the Agreement silent in respect of non-deduction of the recreation leave for a public holiday falling within a period of leave, a deduction of recreation leave may be permitted on the authority of Glendell Mining subject to the recreation leave entitlement being in excess of the NES minimum.

[61] I now turn to consider the broader context of the 2017 Agreement and the OCPE contention that clause 71.2 acts to require the deduction of recreational leave in the above described circumstances, that is, in circumstances where a public holiday falls within a period of recreation leave and where the public holiday was rostered to be worked but for the recreation leave. The OCPE argue that their contended construction is clear on a plain reading of clause 71.2 which states that the PILS may only be paid where a deduction of recreation leave is made. It follows from the OCPE construction that if a shiftworker receives their “full rate of pay” for a public holiday falling within a period of leave in accordance with clause 42.6(a), a deduction of recreation leave must then be made pursuant to 71.2(b). The apparent conflict between that construction and the plain meaning of clause 42.6(b) is resolved the OCPE submit through intrinsic interpretation aids rather than by reference to extrinsic materials.

[62] Clause 71.2 sits within Division 3 – Shiftworkers of Part 4 – Hours of Work of the 2017 Agreement. Division 3 contains various shiftwork provisions including; Definition (clause 65), Hours and Cycle of Shifts (clause 66), Rosters (clause 67), Shiftwork Penalty Rates (clause 68), Public Holiday Duty and RDOs (shiftwork) (clause 69), Overtime (Shiftwork) (clause 70), Recreation Leave and Shiftwork Penalties (clause 71) and Personal Leave (Shiftwork).

[63] Clause 68 details the various shiftwork penalty rates, which relevantly includes penalty rates for work on a public holiday at clause 68.1(c). Clause 68.4 specifically points to clause 71 for payment of shiftwork penalties during a period of recreation leave. Clause 71.1 specifies that a shiftworker on recreation leave will receive shiftwork penalties as if they were “rostered on to perform duty during the period of recreation leave”. Such payments are referred to in clause 71.1 as “penalties in lieu of shiftwork’ payments (PILS)”. Clause 71.2 then conditions the payment of PILS, relevantly including that recreation leave must be deducted for the shift the employee would have worked and for which PILS was paid (clause 71.2(b)).

[64] On the OCPE’s construction clause 71.2 conflicts with clause 42.6. This is so based on the definition of shiftwork penalties in clause 68 which refers to public holiday penalties. It follows on the OCPE construction that public holidays are included in PILS. Consequently, where PILS are paid for a public holiday falling within a period of recreation leave a deduction of recreation leave must be made. This is contrary to clause 42.6(b). The difficulty with the OCPE construction is that it treats the public holiday as recreation leave when in fact it is not recreation leave on the basis of clause 42.6(b). It has a different character altogether and does not fall within the scope of clause 71.2.

[65] My view on the construction and interaction of clause 42.6(b) and clause 71.2 is fortified by the submission the OCPE made during proceedings for the approval of the Agreement where they contended that a public holiday falling within a period of recreation leave was not recreation leave. 39 That position, which the OCPE appear to have now withdrawn from, was accepted by the Commission in the Approval Decision.40 The tension between the OCPE’s position argued during proceedings for approval of the Agreement and the position now contended was not adequately reconciled by the OCPE in the present proceedings.

[66] The apparent conflict between clause 71.2 and 41.2(b) is resolved by my preferred construction, that being the two clauses deal with different circumstances. Clause 41.2(b) deals with the circumstances of a public holiday falling within a period of recreation leave that would have been worked but for the period of leave. The public holiday in these circumstances is not recreation leave by reason of the operation of clause 42.6(b). Clause 71.2 consequently has no work to do as clause 71.2 only applies to recreation leave.

[67] If I am wrong in my construction of the relevant clauses based on their plain meaning such that a public holiday falling within a period of recreation leave is taken to be recreation leave and subject to the operation of both clause 42.6 and clause 71.2, ambiguity does arise and the terms are susceptible to more than one meaning. It is permissible in these circumstances on the authority of Berri to admit evidence that establishes the surrounding circumstances. I now turn to consider the surrounding circumstances and in doing so I have relied in part on the unchallenged evidence of Ms Densley, Ms Brown, and Mr McDonald.

[68] The practice of the OCPE during the period of operation of the 2013 Agreement in relation to the treatment of public holidays falling within a period of recreation leave of a shiftworker was to pay shiftworkers their base salary for the public holiday and to not deduct the public holiday from the recreation leave entitlement. The CPSU disagreed with this payroll practice and notified a dispute to the NTPFES on 18 August 2016 in relation to clause 52.6 in the 2013 Agreement. Clause 52.6 of the 2013 Agreement relevantly provided as follows;

“52.6 Public Holidays

(a) Where a public holiday occurs during recreation leave (including recreation leave at half pay taken under Schedule 13), the Employee is entitled to his or her full rate of pay that he or she would have been paid had the public holiday fallen on a day that he or she was not on recreation leave, and

(b) the period of the public holiday is not deducted from the Employee’s recreation leave entitlement.”

[69] It can be seen that clause 52.6 in the 2013 Agreement is in almost identical terms to clause 42.6 of the 2017 Agreement which is set out above at [12]. There was no comparable provision in the 2013 Agreement to that of clause 71.2 in the 2017 Agreement although the payment of shift penalties in lieu of annual leave loading was dealt with in the 2013 Agreement at clause 54 and clause 10.3 of Schedule 1. Clause 54 states as follows;

54. Recreation Leave Loading

“54.1 Recreation leave loading entitlement

(a) In addition to normal salary payment for recreation leave, an Employee is entitled to a recreation leave loading on 1 January each year. Subject to sub-clause (b), the amount of the loading will be the lesser of:

(i) 17 and one half percent of the value of the annual recreation leave accrued over the previous year based on the Employee’s salary, including allowances in the nature of salary; or

(ii) a maximum payment the equivalent of the Australian Statistician’s Northern Territory male average weekly total earnings for the June quarter of the previous year.

(b) In the case of a shift worker who would have been entitled to shift penalties in excess of the maximum payment referred to in paragraph (a)(ii) had the Employee not been on recreation leave, the amount of the recreation leave loading shall be equivalent to the shift penalties.

54.2 Payment of recreation leave loading

(a) An Employee who is approved to use at least one week of recreation leave may apply for an accrued recreation leave loading.

………………….”

[70] Clause 10.3 of Schedule 1 of the 2013 Agreement relevantly states as follows;

10. Shift Work

………………………..

10.3 Shift work payments will be made in respect of any shift duty the Employee

would have performed had the Employee not been on approved recreation

leave.

…………………….”

[71] As can be seen above, clause 54 of the 2013 Agreement provided for the payment of shift penalties in lieu of leave loading when recreation leave was taken in the case of shiftworkers. However, the payment of leave loading or shift penalties in lieu of leave loading was conditional on an employee taking a minimum of one week’s recreation leave. Unlike the 2017 Agreement there was nothing apparent on the reading of clause 54 and clause 10.3 in Schedule 1 that conflicted with clause 52.6 of the 2013 Agreement.

[72] Returning to the dispute notified by the CPSU, the NTPFES responded to the dispute raised by the CPSU on 29 August 2016 and advised that a ‘legislative interpretation consensus’ had been raised by the legal employer, the OCPE. The NTPES correspondence confirmed an interpretation that accorded with the CPSU position, that being shiftworkers would receive the “full rate of pay” including shift penalties for a public holiday falling within a period of recreation leave and that no recreation leave deduction would be made. Notwithstanding this apparent concession, the OCPE subsequently confirmed in an email to the CPSU on 6 March 2017 that it had changed its view regarding the public holiday issue and had reverted to its previous position, that being, a shiftworker would receive their base salary for a public holiday falling within a period of recreation leave and no leave deduction would be made.

[73] It was against the backdrop of the unresolved dispute over clause 52.6 in the 2013 Agreement that negotiations commenced on 11 April 2017 for a new enterprise agreement to replace the 2013 Agreement. Those negotiations continued through until November 2017 when the 2017 Agreement was approved by a ballot of employees. One of the issues raised by the CPSU during bargaining was that of the disputed construction of clause 52.6 of the 2013 Agreement.

[74] On 11 September 2017 Ms Densley met with the Minister and the Minister’s Chief of Staff regarding the status of bargaining for the new agreement and in the meeting detailed outstanding bargaining issues. While the Minister did not agree to the CPSU’s claims in the meeting the Minister acknowledged that the claims were ‘reasonable’. I don’t regard this statement by the Minister as helpful in establishing the objective intentions of the parties. It certainly did not constitute an agreement to the CPSU claim.

[75] Further bargaining meetings were then conducted during October 2017. A meeting also took place between the CPSU and the Commissioner on 3 October 2017 during which meeting the CPSU went through the main bargaining ‘sticking points.’ On 10 October 2017 the CPSU wrote to the OCPE regarding outstanding shiftwork issues including the public holiday/recreation leave issue. The CPSU proposed one of two options be pursued in relation to the public holiday/recreation leave dispute, that either the CPSU file a dispute in relation to the contested provision or alternatively the CPSU and OCPE agree and apply a common interpretation of the disputed provision (clause 52.6 in the 2013 Agreement). It is apparent at this point of negotiations for the 2017 Agreement that a common understanding and agreed interpretation of the disputed clause had not been reached.

[76] While apparently not responding directly to the CPSU correspondence, the OCPE wrote to all unions involved in bargaining on 30 October 2017 and directly to staff on 31 October 2017 and provided a revised ‘without prejudice offer’ for a new enterprise agreement. In relation to the shiftworker public holiday/recreation leave issue the OCPE advised in the revised offer that it had agreed to pay public holiday penalties to shiftworkers where the public holiday fell in a period of recreation leave. The OCPE’s apparent agreement to the CPSU’s position did not include a caveat that the practice of not deducting the public holiday from the recreation leave balance would change as a consequence of payment of shift penalties for a public holiday that fell within a period of recreation leave. As the response did not explicitly deal with the PILS issue and recreation leave deduction pursuant to clause 71.2(b) the concession lends some weight to the CPSU argument that the OCPE had agreed to the CPSU claim.

[77] The CPSU then issued a bulletin to its members on 31 October 2017 regarding the revised enterprise agreement offer following which the OCPE issued its own bulletin to employees seeking to rebut the CPSU’s criticism of the OCPE’s revised enterprise agreement offer. While not dealing with the specific public holiday issue, the OCPE made the statement that “Shiftworker entitlements will be improved in the new agreement…..Shiftworkers will also receive penalty payments on each day of recreation leave (without the current five day minimum).” This latter statement addressed the requirement in clause 54.2(a) in the 2013 Agreement that a minimum of one week’s leave needed to be taken in order for an employee to access annual leave loading or shift penalties in lieu of leave loading. This change was properly promoted by the OCPE as an improvement on the 2013 Agreement. No reference was made in the OCPE Bulletin to the Public Holiday/Recreation Leave issue

[78] On 14 November 2017 a further bargaining meeting took place during which meeting the OCPE representative advised that public holiday penalties should be paid if a deduction of recreation leave was made for a public holiday falling within a period of recreation leave. Ms Densley advised during the meeting that the position expressed by the OCPE representative had not been agreed. The OCPE position expressed in the meeting appears to indicate that the parties had not reached an agreed position despite there being no evidence that the OCPE had formally withdrawn from the position it had communicated in the 30 October 2017 revised enterprise agreement offer, in which it had stated that it had agreed to pay public holiday penalties to shiftworkers where the public holiday fell in a period of recreation leave.

[79] Following the meeting on 14 November 2017 Ms Glew of the OCPE wrote to the unions and provided various clauses that had been tabled at the bargaining meeting that day with comments relevant to each of the clauses. Clause 71 of the proposed agreement was relevantly included in the document. The comments clarified the operation of the draft clause 71 and made no reference to its interaction with clause 42.6.

[80] On 16 November 2017 employees were notified by the OCPE of the ballot to be conducted for approval of the 2017 Agreement and were provided with copies of the proposed agreement and explanatory materials.

[81] In relation to clause 42.6 in the proposed agreement the OCPE advised in the explanatory materials that there was no change to the provision or wording to that of the comparable provision in the 2013 Agreement (clause 52.6). In light of this commentary, the lack of explicit confirmation of an agreed change of interpretation of 52.6 clause in the 2013 Agreement does not assist the CPSU argument as to their being an objective common intention of the parties. Conversely, there was nothing to indicate in the explanatory material that the OCPE had withdrawn from its position on the Public Holiday/Recreation Leave issue as communicated to unions and staff in its revised offer on 30 October 2017.

[82] In relation to clause 71.2, the OCPE outlined in the explanatory materials the nature of the improvements such that shiftworkers could take one day of recreation leave and receive shift penalties whereas the 2013 Agreement required a minimum of 1 week’s leave to be taken in order for shift penalties to be paid during the leave. The explanatory materials made no mention of the interaction of clause 42.6 and clause 71.2 on which the OCPE now seek to rely. It was not explained to bargaining representatives or employees that the intended effect of clause 71.2(b) was to override clause 42.6(b) in circumstances where the “full rate of pay” in clause 42.6(a) included shift penalties.

[83] Following the successful vote for the 2017 Agreement, Ms Densley wrote to the OCPE on 20 December 2017 seeking confirmation that the interpretation of clause 52.6, which she understood had been agreed to by the OCPE, had been promulgated by the OCPE to agencies of the Northern Territory government. On 8 January 2018 Mr Finlay of the OCPE responded to the CPSU advising that there was no formal settlement of the “PILS/Public Holiday” issue raised by the CPSU and that the CPSU’s interpretation had not been agreed. Mr Finlay confirmed that the OCPE’s interpretation of the relevant clause in the 2013 Agreement had not changed.

[84] During proceedings relating to approval of the 2017 Agreement in 2018 the CPSU raised a number of BOOT concerns, one of which related to the Public Holiday/Recreation leave issue. The OCPE argued in those proceedings that an employee’s “full rate of pay” for the purpose of clause 42.6(a) was the base salary only and that no recreation leave deduction was to be made for a public holiday falling within a period of recreation leave. This position was in stark contrast to the statement made by the OCPE in its correspondence to unions on 30 October 2017 and to employees on 31 October 2017.

[85] Following approval of the 2017 Agreement the OCPE continued to apply the construction of clause 42.6 that they had advanced in the Commission proceedings that led to approval of the 2017 Agreement. That is, where a public holiday fell within a period of recreation leave and would have been worked but for the recreation leave, a shiftworker received their base salary and no recreation leave deduction was made for the public holiday/s.

[86] As noted above, there was a troubling absence of any reference by the OCPE to the intended effect of clause 71.2(b) during bargaining or in the explanatory materials provided to employees prior to the ballot for the agreement. The omission of an explanation can be perhaps explained in two ways. Either the OCPE withheld relevant information at the time of the ballot (be that deliberately or inadvertently) in relation to the operation of clause 71.2(b) as it interacted with clause 42.6(b). Were that the case then such an important omission raises some “genuine agreement” questions. A more likely and favourable explanation, which I am more inclined to believe, is that the OCPE simply did not consider that clause 71.2(b) conflicted with clause 42.6(b) at the time the ballot was conducted or that it operated in the manner now contended.

[87] The more favourable explanation for the absence of reference to the interaction of clauses 42.6 and 71.2 in the explanatory materials is supported by the position taken by Mr Finlay in his correspondence of 8 January 2018 in response to Ms Densley’s correspondence of 20 December 2017. Mr Finlay rejected Ms Densley’s suggestion that agreement had been reached in relation to the CPSU interpretation of clause 42.6(b). No reliance was placed by Mr Finlay on clause 71.2(b) in his response. He simply stated that the matter was not settled, in spite of the various communication during bargaining, and confirmed that the OCPE’s interpretation of clause 52.6 in the 2013 Agreement had not changed. Further support for an innocent explanation is found in the position argued by the OCPE during proceedings relating to the application for approval of the 2017 Agreement when the OCPE contended that clause 71.2 didn’t apply to the circumstances of a public holiday falling in a period of a shiftworkers recreation leave.

[88] It is clear from the material provided to unions and employees during bargaining that clause 71.2 was directed to providing a benefit to shiftworkers. Specifically, the minimum week of recreation leave required to be taken in order to attract shift penalties that had applied under the 2013 Agreement was reduced to a single shift. The effect was to ensure that shiftworkers taking recreation leave would receive shift penalties for any shifts that fell within the leave period regardless of the length of the period of recreation leave. This supports a construction that clause 71.2 and clause 42.6 operated independently and dealt with different issues.

[89] More recently and prior to determination of this dispute the OCPE have altered their position in relation to clause 42.6. The OCPE now agree, as stated previously in this decision, that the “full rate of pay” for a public holiday falling within a period of recreation leave for a shiftworker includes the relevant shift penalties. They also now contend that recreation leave must be deducted for such public holiday pursuant to clause 71.2(b).

[90] It is apparent from the above chronology that one thing the OCPE cannot be accused of in its approach to the disputed public holiday/recreation leave issue is that of inflexibility in its position. The OCPE agreed to the CPSU position on the construction of clause 52.6 of the 2013 Agreement in August 2016 then reversed that position in early 2017. They then agreed during negotiations for the 2017 Agreement in an offer put to unions on 30 October 2017 that the “full rate of pay”, now referred to in clause 42.6(a) of the 2017 Agreement and previously referred to in clause 52.6(a) of the 2013 Agreement, includes shift penalties. That position was modified in a subsequent meeting on 14 November 2017 where the OCPE representative sought to place the caveat that payment of shift penalties in the context of clause 42.6(a) would result in the deduction of recreation leave for the public holiday. They confirmed their effective retreat from the 30 October 2017 position following a successful ballot for the agreement and advised the CPSU in correspondence dated 8 January 2018 that there had been no agreement to the CPSU interpretation of the disputed provision in the 2013 Agreement and that the OCPE’s position as to the interpretation of clause 52.6 in the 2013 Agreement had not changed.

[91] The OPCPE then reaffirmed its position in proceedings for approval of the 2017 Agreement position that the “full rate of pay” for a public holiday falling in a period of recreation leave referred to in clause 42.6(a) of the 2017 Agreement excluded shift penalties and that no deduction of recreation leave is to be made pursuant to clause 42.6(b). This position was subsequently abandoned in these proceedings whereby the OCPE now agree that the “full rate of pay” includes shift penalties, but that the deduction of recreation leave must be made for the public holiday. This reinforces a conclusion that the OCPE have relied on different arguments at different times to resist the CPSU claims regarding the construction of clause 42.6 (and its equivalent provision in the 2013 Agreement).

[92] One of the difficulties that arises from the shifting position of the OCPE is that of objectively establishing whether there was a common intention of the parties at the conclusion of bargaining for the 2017 Agreement. While the CPSU’s position has remained consistent, I am unable to conclude on the basis of the material before me that the parties had reached a common understanding as to the interpretation of clause 42.6 in the 2017 Agreement or clause 52.6 in the 2013 Agreement. While the CPSU had reasonable grounds to subjectively believe that the OCPE had conceded the CPSU’s interpretation as of 30 October 2017, subsequent communication by the OCPE prior to and immediately after the agreement approval ballot as well as the position taken by it in these proceedings has been equivocal on construction of clause 42.6 of the 2017 Agreement. In these circumstances it would be unsafe for me to conclude that the surrounding circumstances support the CPSU contention that the parties had agreed to the CPSU construction when bargaining for the 2017 Agreement concluded.

[93] Notwithstanding my above conclusion that there was no common intention during or at the conclusion of bargaining that accorded with the CPSU position on clause 52.6, the surrounding circumstances do however support a conclusion that the parties understood that the two provisions (clauses 42.6 & 71.2 in the 2017 Agreement) dealt with separate issues. This does not contradict and in fact supports the construction that I have outlined above at [67]. This can be seen in the following;

• The OCPE resisted the CPSU clause construction during the operation of the 2013 Agreement, save for the August 2016 concession which was subsequently withdrawn. In resisting the CPSU construction, the OCPE only relied on the terms of clause 52.6 of the 2013 Agreement. That is unremarkable given there was no comparable provision in the 2013 Agreement to that now found at clause 71.2(b) of the 2017 Agreement.

• When the OCPE provided its revised bargaining offer to the union on 30 October 2017 and to staff on 31 October 2017, it conceded that it had agreed to the CPSU claim that “the full rate of pay” referred to in clause 42.6(a) included shift penalties. No caveat was placed on that concession by the OCPE that linked the concession to the operation of clause 71.2(b).

• The OCPE’s subsequent communication to employees, both in the Bargaining Bulletin on 31 October 2017 and in the explanatory materials that were sent to employees at the start of the ‘access period’, did not raise the interaction of clause 42.6(b) and clause 71.2(b). Moreover, the communications of the OCPE in relation to clause 71.2 focussed only on the improvement the clause represented for shiftworkers in terms of access to shift penalties for periods of recreation leave of less than one week.

• In the explanation of changes tables provided by Ms Glew of the OCPE to the unions on 14 November 2017, there was no reference to the interaction of clauses 71.2 and 42.6. The explanation provided in respect of clause 71.2 again focussed on the above-referred improvement of paying shift penalties for any rostered days that fell within a period of recreation leave rather than the minimum of one weeks recreation leave as operated under the 2013 Agreement.

• In Mr Finlay’s response to M Densley on 8 January 2018, the position of the OCPE was communicated as unchanged from that that existed in respect of the disputed clause in the 2013 Agreement, that being clause 52.6 of that agreement. No reference was made in Mr Finlay’s response to the effect of the new clause 71.2 in the 2017 Agreement as now contended by the OCPE.

• The position argued by the OCPE during proceedings relating to approval of the 2017 Agreement again made clear that the OCPE did not regard clause 71.2 as conflicting with clause 42.6.

• Until recently, the OCPE’s resistance to the CPSU construction of clause 52.6 was not apparently based on the operative effect of clause 71.2. It could not have been in any event during the period of operation of the 2013 Agreement as the provision was introduced in the 2017 Agreement. Rather, the OCPE had relied on the argument that the “full rate of pay” in clause 52.6(a) did not include shift penalties. There is nothing in the material filed that indicates that clause 71.2 was the basis for the OCPE’s rejection of the CPSU construction until it more recently altered its position in advance of these proceedings in respect of the meaning of “full rate of pay”.

[94] It follows from the above that the surrounding circumstances do not support the construction advanced by the OCPE but rather that of the CPSU. Contrary to OCPE submissions I do not accept that clause 71.2 operates in conflict with or overrides the plain and ordinary meaning of clause 42.6. The plain and ordinary meaning of clause 42.6 is that where a public holiday falls within a period of a shiftworker’s recreation leave, and where the public holiday was rostered to be worked but for the recreation leave, the shiftworker is entitled to be paid their ‘full rate of pay’ including shift penalties. No deduction of recreation leave may be made for that public holiday. As previously stated, by reason of clause 42.6(b) the public holiday falling within a period of recreation leave is not recreation leave and as such clause 71.2 has no operative effect. The clauses therefore can be read harmoniously.

[95] For the sake of completeness, it is necessary for me to briefly deal with the OCPE’s submission that I should use intrinsic aids to interpretation. As set out at principle 6 in Berri “the modes of textual analysis developed in the general law may assist in the interpretation of enterprise agreements”. However, given my conclusion that clause 42.6 and clause 71.2 are not in conflict it is unnecessary for me to embark on the textual analysis the OCPE submits I should undertake.

Conclusion

[96] It follows from the above that the answer to the questions for determination are as follows;

The answer is “Yes”.

[97] The matter is determined accordingly.

DEPUTY PRESIDENT

Appearances:

Mr K Barlow for the CPSU, the Community and Public Sector Union

Mr M Hathaway for the Respondent

Hearing details:

2020
Melbourne
15 December

Printed by authority of the Commonwealth Government Printer

1 [2018] FWCA 2084

2 Exhibit A1, witness Statement of Ms K Densley dated 9 November 2020 at [4]

3 AE405518

4 Exhibit A1, Annexure A, CPSU correspondence dated 18 August 2020 titled “Re: Dispute regarding payment for a public holiday whilst on recreation leave”

5 Exhibit A1, Annexure B, Correspondence from NTPFES to CPSU dated 29 August 2016

6 Ibid, Annexure C, Email from Mr D Blewitt (NTPFES) to Mr L Hemsley (CPSU) dated 6 March 2017 titled “RE: payroll/HR discrepancy”

7 Ibid, Annexure D, Advice re “Shift Worker – Public Holiday Occurring During Recreation Leave”

8 Ibid at [8]

9 Ibid, Annexure G

10 Ibid at [11]

11 Ibid at [12]

12 Ibid at [15]

13 Ibid at [16]-[17]

14 Ibid, Annexure H, Correspondence from CPSU to OCPE dated 10 October 2017

15 Ibid, Annexure J, Correspondence from OCPE to unions “Re: offer of a new Norther Territory Public Sector Enterprise Agreement’ dated 30 October 2017

16 Ibid

17 Ibid, Annexure K, “NTPS General Enterprise Agreement – Bulletin 7 – New Offer” dated 31 October 2017

18 Ibid, Annexure L, Email from CPSU to members re “NTPS Enterprise Agreement Bargaining 2017” dated 31 October 2017

19 Ibid, Annexure M

20 Ibid at [27]-[29]

21 Ibid at [30]

22 Ibid, Annexure P.

23 Ibid at [31]

24 Ibid, Annexure Q, Email from OCPE to unions dated 14 November 2017, titled “Explanation of changes to tabled full track changes EA – 8 Nov”

25 Ibid, Annexure R, Explanatory Notes for Proposed Northern Territory Public Sector 2017-2021 Enterprise Agreement

26 Ibid

27 Ibid at [32]

28 Ibid, Annexure S

29 Exhibit A3, Witness Statement of Mr McDonald dated 9 November 2020 at [17]-[21]

30 Ibid at [10]-[16]

31 Exhibit A2, Witness Statement of Ms K Brown dated 9 November 2020 at [10]-[13]

32 Ibid at [18]

33 Ibid at [16]

34 Ibid at [25], Exhibit A3 at [28]-[29]

35 [2018] FWCA 2084

36 [2017] FWCFB 3005

37 Ibid at [114]

38 [2017] FCAFC 35

39 Approval Decision at [37]

40 Ibid at [67]-[70]

CPSU, the Community and Public Sector Union v Commissioner for Public Employment, Northern Territory Government

[2021] FWC 386

27 JANUARY 2021

DECISION

Jurisdiction

Approach to construing enterprise agreement terms