Daniel Mikolaschek v MSS Security Pty Limited
[2024] FWC 1005
•30 APRIL 2024
| [2024] FWC 1005 |
| FAIR WORK COMMISSION |
| DECISION |
Fair Work Act 2009
s.739—Dispute resolution
Daniel Mikolaschek
v
MSS Security Pty Limited
(C2023/5011)
| DEPUTY PRESIDENT LAKE | BRISBANE, 30 APRIL 2024 |
Alleged dispute about any matters arising under the enterprise agreement – rostering – ordinary hours – individual flexibility arrangement – minimum ordinary hours not provided – dispute determined.
On 23 August 2023, Mr Daniel Mikolaschek (the Applicant) made an application to the Fair Work Commission (the Commission) seeking to resolve a dispute with MSS Security Pty Limited (the Respondent) under s.739 of the Fair Work Act 2009 (the Act).
The parties had attempted to resolve the matter internally which was unsuccessful. The Commission attempted to resolve the matter on 5 September 2023 and the dispute was not resolved. Clause 2.2.7 of the MSS Security Enterprise Agreement (QLD) 2020 – 2024 (the Agreement) provides the Commission the ability to arbitrate the dispute and make a determination that is binding on the parties if the dispute remains unresolved.
2.2.7 Fair Work Commission may deal with the dispute in two stages: (a) Fair Work Commission will first attempt to resolve the dispute as it considers appropriate, including by mediation, conciliation, expressing an opinion or making a recommendation; and (b) If Fair Work Commission is unable to resolve the dispute at the first stage, Fair Work Commission may then: arbitrate the dispute; and make a determination that is binding on the parties,
As the dispute was not resolved, the parties determined that the matter should be arbitrated. The Hearing was listed before me on 30 November 2023.
Background
The dispute surrounds whether the IFA is properly made and whether the Applicant was entitled to a minimum number of 24 ordinary hours each week which accrue leave and superannuation. The question surrounds whether the Respondent complied with the Agreement if they pay the Applicant overtime rates instead of ordinary hours when the Respondent did not provide at least 7 days’ notice of the Applicant’s roster.
The Applicant contends that under the IFA, he is entitled to be paid a minimum of 24 ordinary hours with the requisite accruals for leave and superannuation regardless of whether he has been provided the 7 days’ notice. The Applicant states that if is not provided the requisite notice period, then the overtime rate is payable by the Respondent in addition to the 24 hours ordinary hours. The Applicant feels he is disadvantaged when some of the 24 hours are paid at overtime rates, as accruals and superannuation are not calculated on the overtime hours.
The Respondent’s position is that the Commission must determine whether the IFA is valid. Their position is that the IFA is not validly made as it was not made under flexibility clause in the Agreement. Therefore, they were not subject to provide the Applicant 24 ordinary hours of work per week. If the Respondent was required to change the roster within the 7-day period, the ordinary hours of work would be paid as overtime. As a result, the Respondent states that the Agreement was not breached because the IFA was invalid. In the alternative, the construction of the IFA would allow the conversion of ordinary hours to overtime if the IFA was partly or wholly valid. In this situation, the Respondent was not required to provide rosters with more than 7 days in advance because the IFA stated that these shifts would be provided to the Applicant “wherever possible.”
Questions for Arbitration
The questions for arbitration that are to be determined are as follows:
Between May 2021 and November 2022, is the Respondent required to give the Applicant at least 24 ordinary hours each week he had been ready, willing, and able to work (excluding periods of leave)?
Will the Respondent have breached the terms of the Individual Flexibility Agreement (IFA) and the MSS Security Enterprise Agreement (QLD) 2020 - 2024 if:
a.it paid Applicant at overtime rates for any of his 24 ordinary hours per week; or
b.from time to time, it provided the Applicant his roster with less than 7 days’ notice?
Consideration
The relevant principles applicable to the interpretation of an enterprise agreement are summarised in James Cook University v Ridd (2020) 382 ALR 8 as follows:
i. The starting point is the ordinary meaning of the words, read as a whole and in context (City of Wanneroo v Holmes [1989] FCA 553; 30 IR 362, 378; City of Wanneroo v Australian Municipal, Administrative, Clerical and Services Union [2006] FCA 813; 153 IR 426 [53]; WorkPac Pty Ltd v Skene [2018] FCAFC 131; 264 FCR 536 [197]).
A purposive approach is preferred to a narrow or pedantic approach — the framers of such documents were likely to be of a “practical bent of mind” (Kucks v CSR td [1996] 66 IR 182 , 184; Shop Distributive and Allied Employees’ Association v Woolworths SA Pty Ltd [2011] FCAFC 67 [16]; WorkPac Pty Ltd v Skene [2018] FCAFC 131; 264 FCR 536 [197]). The interpretation “turns upon the language of the particular agreement, understood in the light of its industrial context and purpose” (Amcor Ltd v Construction, Forestry, Mining and Energy Union [2005] HCA 10; 222 CLR 241 [2]).
Context is not confined to the words of the instrument surrounding the expression to be construed (City of Wanneroo v Australian Municipal, Administrative, Clerical and Services Union [2006] FCA 813; 153 IR 426 [53]). It may extend to “the entire document of which it is a part, or to other documents with which there is an association” (Short v FW Hercus Pty Ltd [1993] FCA 51; 40 FCR 511 , 518; Australian Municipal, Administrative, Clerical and Services Union v Treasurer (Cth) [1998] FCA 249; 82 FCR 175 , 178).
Context may include “ideas that gave rise to an expression in a document from which it has been taken” (Short v FW Hercus Pty Ltd [1993] FCA 51; 40 FCR 511 , 518).
Recourse may be had to the history of a particular clause “Where the circumstances allow the court to conclude that a clause in an award is the product of a history, out of which it grew to be adopted in its present form;” (Short v FW Hercus Pty Ltd [1993] FCA 51; 40 FCR 511, 518).
A generous construction is preferred over a strictly literal approach (Geo A Bond and Co Ltd (in liq) v McKenzie [1929] AR 499 , 503–4; City of Wanneroo v Australian Municipal, Administrative, Clerical and Services Union [2006] FCA 813; 153 IR 426 [57]), but “Awards, whether made by consent or otherwise, should make sense according to the basic conventions of the English language. They bind the parties on pain of pecuniary penalties” (City of Wanneroo v Holmes [1989] FCA 553; 30 IR 362, 380).
Words are not to be interpreted in a vacuum divorced from industrial realities but in the light of the customs and working conditions of the particular industry (City of Wanneroo v Holmes [1989] FCA 553; 30 IR 362, 378–9; WorkPac Pty Ltd v Skene [2018] FCAFC 131; 264 FCR 536 [197]).
Minimum ordinary hours
The Applicant and Respondent both agreed to an Individual Flexibility Agreement (IFA) on 29 October 2021. The terms of the IFA are as follows:
“The parties agree that the effect of TERMS (a) – (b)
1. Your roster will be provided to you seven [7] days in advance wherever possible and will include a minimum of 24 ordinary hours per week plus any allowances and loadings you may be entitled to in accordance with the Enterprise Agreement. [Refer to Clause 2.1.3 a & b].
2. You may also be offered additional shifts on other days and at other times. Should you choose to accept these additional shifts, these will also be paid at ordinary time up to an average of 37 hours per week over the fortnightly pay cycle. [Refer to Clause 2.1.3, c]
3. Hours over 37 per week will be paid as overtime. [Refer to Clause 4.3.3]
The parties agree that this arrangement causes the employee to be better off overall in the following way/s:
The employee will be better off overall by this Agreement as they will be provided with a permanent part time position and guaranteed minimum hours which would otherwise not be available to them.”
This document was signed on 29 October 2021. It is a written agreement by both parties of what the Applicant’s minimum ordinary hours would be. It is not necessary for me to determine whether the IFA was valid or not in addressing Question 1 given that the Agreement only requires a written agreement. It appeared that the ‘IFA’ was evidence of the written agreement between the parties.
Clause 2.1.3 provides the following:
A part time employee is an employee who is employed in a classification who:
(a) Is engaged to work a minimum of 12 hours per week and fewer than 38 ordinary hours per week or, where the employer operates a roster, an average of fewer than 38 hours per week over the roster cycle; and
(b) Receives their roster 7 days in advance and has reasonably predictable hours of work
(c) Rostered hours will be paid as ordinary hours plus appropriate allowances and loadings
(d) On commencement of employment the employer and the part-time employee will agree in writing to a minimum number of hours to be worked each week or on average over an eight-week cycle.
In the undertaking provided by MSS Security:
“MSS Security undertakes to rely on the following regarding clause 2.l.3(e): The agreed minimum ordinary hours may be subject to change and if such change occurs, the employer and employee will agree in writing to these changes.”
This agreement was never varied nor terminated. As a result, the Applicant was expecting at least a minimum of 24 ordinary hours a week. Overtime is not ordinary hours, nor was the Applicant entitled to overtime in the Agreement. The Respondent would be in breach of clause 2.1.3(e) if the Applicant was not offered the minimum ordinary hours of 24 hours per work if some of these hours were substituted as overtime.
At any given point, if the Respondent identified that this was not the practical reality of the business, there was nothing prohibiting them from changing the roster requirements. They could have always given the Applicant notice that the arrangement was no longer suitable based on operational requirements under clause 2.1.3(f).
“The rostered hours of work may be subject to change based on the business' operational requirements and if such change occurs, the employer will give the employee seven (7) days' notice in writing advising the change”.
The Respondent should have provided the Applicant at least a minimum of 24 ordinary hours a week and if they could not guarantee this, they always had the discretion to change this with written notice.
Overtime triggers
The flexibility clauses of the Agreement are provided in clause 6.12 and clause 6.13. The IFA may be made “to vary the effect of certain terms of the Agreement if:
(a) the arrangement deals with one or more of the following matters:
(a) Term time in accordance with clause 5.10
(b) Voluntary contributions or salary sacrifice into superannuation fund in accordance with clause 3.3.1.
(c) Broken shifts in accordance with clause 3.4.5.
(d) Banking of rostered days off in accordance with Clause 3.2 and 4.1.1.
(e) Less than seven (7) days advance notice of roster in accordance with Clause 4.2.1.
(f) Minimum ten (10) hour break in accordance with 4.2.4.
(b) the arrangement meets the genuine needs of the employer and employee in relation to one or more of the matters mentioned in paragraph (a)”.
“The arrangement between the employer and the individual employee must:
(a) be confined to a variation in the effect of one (1) or more of the terms listed in Clause 6.12; and
(b) not disadvantage the individual employee in relation to the individual employee’s terms and conditions of employment”.
The terms of the IFA do not explicitly refer to clause 6.12(e) being substituted, but it addresses a permitted matter that the Applicant’s ‘roster will be provided to [him] seven [7] days in advance wherever possible.’
Section 203 of the Act requires the employer is required to ensure that any individual flexibility arrangements are about a permitted matter.
203 Requirements to be met by a flexibility term
Flexibility term must meet requirements
(1) A flexibility term in an enterprise agreement must meet the requirements set out in this section.
Requirements relating to content
(2) The flexibility term must:
(a) set out the terms of the enterprise agreement the effect of which may be varied by an individual flexibility arrangement agreed to under the flexibility term; and
(b) require the employer to ensure that any individual flexibility arrangement agreed to under the flexibility term:
(i) must be about matters that would be permitted matters if the arrangement were an enterprise agreement;
Regardless of whether the IFA has been properly or improperly made, the Respondent would still be bound by the arrangement per s.204 of the Act if it is better off overall.
204 Effect of arrangement that does not meet requirements of flexibility term
Application of this section
(1) This section applies if:
(a) an employee and employer agree to an arrangement that purports to be an individual flexibility arrangement under a flexibility term in an enterprise agreement; and
(b) the arrangement does not meet a requirement set out in section 203.
Note: A failure to meet such a requirement may be a contravention of a provision of Part 3‑1 (which deals with general protections).
Arrangement has effect as if it were an individual flexibility arrangement
(2) The arrangement has effect as if it were an individual flexibility arrangement.
Under the status quo (if the IFA were not to exist), the Respondent would have to give at least 7 days’ notice of the rostered hours of work. If the Respondent had failed to provide subsequent shifts with less than 7 days’ notice, these shifts would be paid at an overtime rate. The working hours are not set and there would be more variance within the average hours worked.
The Applicant’s current arrangement would guarantee him 24 ordinary working hours per week. It appears to me that the arrangement is a trade-off. The IFA dispenses a stricter notice requirement of the overtime triggers in clause 4.2.1 to provide the Respondent more flexibility in securing the Applicant the minimum 24 ordinary hours as agreed.
Clause 4.2.1 provides when an employee would be entitled to overtime:
“The employer must notify employees who work their ordinary hours in accordance with a roster of the commencing and ceasing times of their rostered hours of work either by posting the roster on a notice board which is conveniently located at or near the workplace or through electronic means. Such times once notified may not be changed without the payment of overtime, or by seven days’ notice given in accordance with this clause. However, by agreement between the employer and the employee less than seven days’ notice may be substituted.”
It appears that there is a substitution. The Applicant should receive more consistent working hours within the week compared to the status quo and is reflected in the purposes of the IFA Agreement which would guarantee the Applicant ‘guaranteed minimum hours which would otherwise not be available to them.’ This would place the Applicant better off having less variance in his hours.
Considering this purpose, the payment of the overtime would be inconsistent with the Agreement.
Clause 4.2.3 provides the Hours of Duty
“The hours of duty of part-time employees shall be worked in accordance with a roster under the provisions of this clause under the Agreement.
Clause 4.3.3 of the Agreement states:
“Part-time employees shall be entitled to overtime if they work in excess of twelve (12) hours in any one day or more than thirty-eight (38) hours in any one week.
Provided that where agreement is reached pursuant to subclause 4.2.3, part-time employees shall be entitled to overtime if they work in excess of the ordinary hours prescribed in rosters which have been agreed pursuant to that subclause.”
The undertaking provides as follows:
MSS undertakes to rely on the following regarding clause 4.3.3: Part-time employees shall be entitled to overtime if they work in excess of twelve (12) hours in any one day. Part-time employees shall be entitled to payment of overtime for hours worked in excess of those agreed ordinary hours of work.
When the Applicant receives his roster which should prescribe him 24 ordinary hours per week at minimum, the Applicant would only be entitled to overtime if one of his shifts exceeded the 12 hours in any one day. An example would be if there was an incident near the end of the shift, and the Applicant was required to stay on.
As the Applicant was given set number of minimum hours, the Respondent had substituted their notice by using the phrase ‘wherever possible’ when providing rosters. As a result of the substitution, the overtime clauses are not triggered given that this was the agreed rostered hours. Therefore, the Applicant’s assertion that he should be entitled to overtime along with his ordinary hours if they do not provide 7 days’ notice is incorrect.
There were alternatives available to the Respondent to resolve this matter at their discretion on the basis of operational requirements if they could not provide the Applicant the minimum 24 ordinary hours. The failure to consider these alternatives have resulted in unnecessary complexity surrounding the Applicant’s entitlements.
Determination
The questions for arbitration are answered as follows:
Between May 2021 and November 2022, did the Respondent give the Applicant less than 24 ordinary hours each week he had been ready, willing, and able to work (excluding periods of leave)?
Yes, any weeks that substituted overtime, instead of payment as ordinary hours would be a breach of clause 2.1.3(e) of the Agreement as there was written agreement made on 29 October 2021 of the minimum ordinary hours that the Applicant was entitled to.
Will the Respondent have breached the terms of the Individual Flexibility Agreement (IFA) and the MSS Enterprise Agreement (QLD) 2020-2024 if:
a.it paid Applicant at overtime rates for any of his 24 ordinary hours per week
Yes, the Respondent breached the terms of the Agreement by paying the Applicant overtime rates instead of ordinary hours. There was no basis for the overtime rates to be paid to the Applicant.
b.from time to time, it provided the Applicant his roster with less than 7 days’ notice?
No, it did not matter whether the Applicant was provided his roster with less than 7 days’ notice given that the words ‘wherever possible’ appears to substitute notice to provide the Respondent additional time to secure the minimum shifts for the Applicant. Therefore, the Respondent did not have to give 7 days’ notice if they did not have the minimum 24 ordinary hour shifts available for the Applicant.
Considering the above, I would recommend that the parties the following:
a)The Respondent reviews the weeks where the Applicant was not paid ordinary hours and was paid overtime. The Respondent is to recalculate what the Applicant should have received in payment and accruals, offset the financial benefits of the overtime paid and provide any reconciled amount and adjust accruals appropriately.
b)If the Applicant is unhappy with the current arrangement, the IFA is to be terminated by mutual agreement from both parties. The Respondent should undertake a review of other IFAs to ensure that they have been properly made. Any improper IFAs should be terminated.
DEPUTY PRESIDENT
Appearances:
D. Mikolaschek as the Applicant.
N. Campbell appearing as Counsel for the Respondent, instructed by Gilchrist Connell
Hearing details:
30 November 2023
Brisbane
Hearing via Microsoft Teams
Printed by authority of the Commonwealth Government Printer
<PR773578>
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