Duggan v City of Karratha
[2015] FCCA 2144
•14 August 2015
FEDERAL CIRCUIT COURT OF AUSTRALIA
| DUGGAN v CITY OF KARRATHA | [2015] FCCA 2144 |
| Catchwords: LOCAL GOVERNMENT – Employee – casual lifeguard – enterprise agreement – entitlement to penalty rates for work on public holidays. |
| Legislation: Fair Work Act 2009 (Cth), ss.114, 115, 116 Industrial Relations Act 1988 (Cth) |
| Australian Municipal, Administrative, Clerical and Services Union v VicRoads [2008] AIRC 1107 Decision – Public Holidays (unreported, Full Bench, Australian Industrial Relations Commission, Hancock SDP, MacBean SDP, O’Shea C, Print L9178; 20 March 1995) Duggan v Shire of Roebourne [2015] FCCA 1768 TNT Logistics (Australia) Pty Ltd v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (unreported, Australian Industrial Relations Commission, Hingley C, Print PR 959400, 30 June 2005) |
| Applicant: | PETER VINCENT DUGGAN |
| Respondent: | CITY OF KARRATHA |
| File Number: | PEG 383 of 2013 |
| Judgment of: | Judge Antoni Lucev |
| Hearing date: | By written submissions |
| Date of Last Submission: | 14 July 2015 |
| Delivered at: | Perth |
| Delivered on: | 14 August 2015 |
REPRESENTATION
| For the Applicant: | Australian Services Union (by written submissions) |
| For the Respondent: | Mr P Trestrail, Director Corporate Services, City of Karratha (by written submissions) |
DECLARATION AND ORDERS
The Court declares that a casual employee employed as a lifeguard under the terms of the Shire of Roebourne Enterprise Agreement 2012, who works on a public holiday, is, by reason of the provisions of clauses 17.2 and 43.4 of the Shire of Roebourne Enterprise Agreement 2012, entitled to be paid for all time worked on a public holiday at the rate of double time and three quarters of the ordinary rate of a non-casual employee employed as a lifeguard.
The Court orders that:
(a)the respondent pay the applicant the sum of $349.28 for work performed as a casual lifeguard on 1 January 2013 within 14 days; and
(b)there be no order as to costs.
| FEDERAL CIRCUIT COURT OF AUSTRALIA AT PERTH |
PEG 383 of 2013
| PETER VINCENT DUGGAN |
Applicant
And
| CITY OF KARRATHA |
Respondent
REASONS FOR JUDGMENT
Remaining issue
The remaining issue in dispute in these proceedings relates to whether the Shire of Roebourne Enterprise Agreement 2012 (“2012 Enterprise Agreement”) provides an entitlement for the applicant, Peter Vincent Duggan (“Mr Duggan”), to be paid public holiday penalty rates for 1 January 2013 when performing the role of a casual lifeguard for the respondent, the City of Karratha (“City”, previously the Shire of Roebourne), and more particularly, what the required rate, and therefore quantum to be paid, is.
Previous Reasons for Judgment – conclusions
The issue has been the subject of a previous judgment of this Court in Duggan v Shire of Roebourne [2015] FCCA 1768 (“Shire of Roebourne”) in which the Court dealt with what is now the remaining issue, and observed as follows:
37. Clause 43.1 of the 2012 Enterprise Agreement prescribed a specific entitlement to public holidays for full time and part time employees.
38. Clause 43.4 of the 2012 Enterprise Agreement prescribes the rate of pay for an “Employee” who works on a public holiday as being “at time and a half in addition to the ordinary pay for the day”. The use of “Employee” in clause 43.4 of the 2012 Enterprise Agreement is not qualified in the same way as the reference in clause 43.1 to “Full-time and part-time Employees”. As the definition of “Employee” includes “all persons employed by the Shire … who perform work covered by this Agreement”, the reference in clause 43.4 of the 2012 Enterprise Agreement includes (contrary to the Shire’s submission) a casual employee because they are a person employed to perform work covered by the 2012 Enterprise Agreement, and in particular, Mr Duggan was so employed in his capacity as a lifeguard.
39. It follows that on the plain meaning of the 2012 Enterprise Agreement a casual employee employed to work on a public holiday was entitled to be remunerated at the rate of time and a half in addition to the ordinary pay for the day, that is at double time and a half.
40. The Shire’s argument that casual employees are not entitled to payment of penalty rates because only full time or part time employees are entitled to public holidays is plainly wrong for reasons set out above. The Shire’s alternative argument that casual employees are only to be remunerated a time and half for public holidays because there is no entitlement to ordinary pay for the day as would apply to full time and part time employees, is also plainly wrong. Whilst casual employees might not be entitled to a public holiday per se, they are entitled to be paid the penalty rate for the disadvantage of working on a public holiday if it is necessary for them to do so.
41. In Re Clubs Association of New South Wales v Australian Liquor, Hospitality and Miscellaneous Workers Union, New South Wales Branch (Unreported, New South Wales Industrial Relations Commission, Matter No. IRC 6641 of 1999, 14 December 2000) Glynn J observed that:
The proposition that other rates, including the casual loading, should be taken into account even in addition to weekend penalties is not new.
42. Two decisions were cited thereafter. Firstly, in Re Shop Employees Award (No.2) (1977) AR (NSW) 555 where at 582 and 584 respectively Macken J said:
I turn now to the question of the penalty rates payable to casual employees. The existing penalty rates provided for in the award have been designed to reward permanent employees with penalty rates for work performed in certain ordinary hours, weekend and holiday work. They have not been designed to regulate the situation which arises when casuals work any hours which are outside of the accepted ordinary hours of work.
…
I think it is inappropriate that Sunday work be paid for at the rate of time and a half for a casual on the reasoning that a casual is working in his “ordinary” hours. I consider that the appropriate penalty to be paid to casual employees called upon to work on a Sunday should be double time in addition to the casual loading.
Secondly, in Decision – Public Holidays a Full Bench of the Australian Industrial Relations Commission decided, with reference to casual workers, as follows:
Casual employees receive higher ordinary rates in recognition of their non-enjoyment of various benefits provided for other workers. We are in no doubt that this compensation recognises the lack of holidays, including public holidays. No party asked for us to alter this arrangement. There is an issue, however, about the rate of payment of a casual worker who does work on a public holiday. The ACTU contends that for such a worker the relevant public holiday rate should apply. Although some other parties resisted this contention, we think that the principle is fair. It reflects the inconvenience to the employee of working on a day which, for most of the community, is one of leisure and recreation. We do not think that the relevant “penalty” should itself be subject to the casual loading. The employees should, rather, receive the ordinary casual rate plus the applicable penalty. An example may assist. Assume that the casual loading is 25%; and that the prescribed holiday rate for non-casual workers is double time. The casual would then be paid 2.25 times the ordinary time of rate for non-casual workers.
(Decision – Public Holidays, Print L9178, 20 March 1995 at pages 24-25 per Hancock SDP, MacBean SDP and O’Shea C).
43. In the Court’s view Decision – Public Holidays sets out the correct means of determining the rate to be paid to a casual employee for a public holiday worked under a provision such as clause 43.4 of the 2012 Enterprise Agreement, and on that basis an employee under the 2012 Enterprise Agreement, engaged as a casual, and working on a public holiday would be entitled to 2.75 times the ordinary time rate of pay for non-casual workers. On that basis, Mr Duggan would have been entitled to $640.34 for working 8.5 hours on 1 January 2013, or $349.28 more than he was paid by the Shire.
44. The Court notes that this amount - $349.28 - is more than was claimed by Mr Duggan for working on 1 January 2013, and that neither Mr Duggan nor the Shire has had an opportunity to address the conclusion which the Court has reached. In fairness to both parties, and in the circumstances particularly to the Shire, it is appropriate that a further short opportunity be given to both parties to address the Court’s conclusion.
Shire of Roebourne at [37]-[44] per Judge Lucev.
The Court went on to conclude as follows:
50. As the Court’s conclusions with respect to payment for the public holiday results in an outcome not contemplated by either party, and an award of money in excess of that claimed by Mr Duggan, the Court, will as a matter of procedural fairness, afford both parties the opportunity to make any further submissions they wish on the public holiday issue. There will be a right to make a submission, a submission in reply, and any further judgment and declarations and orders will be made on the basis of those written submissions.
Shire of Roebourne at [50] per Judge Lucev. Orders were made accordingly.
Consideration
The views expressed by the Court in Shire of Roebourne are set out above. As ordered, submissions were filed by both Mr Duggan and the City. Mr Duggan was content to adopt the reasoning of the Court, as set out above, in Shire of Roebourne. The City filed detailed submissions (“City’s Submissions”) which are considered further below.
The City’s Submissions begin by referring to Decision – Public Holidays (unreported, Australian Industrial Relations Commission, Full Bench, Hancock SDP, MacBean SDP, O’Shea C, Print L9178, 20 March 1995) (“Decision – Public Holidays”), and observing that it “was made 20 years ago when the Industrial Relations Act 1988 (Cth) was in force and its relevance today is questionable”: City’s Submissions at [4]. The City’s Submissions then go on to a “more recent” decision of the Australian Industrial Relations Commission (“AIRC”) in June 2005 in TNT Logistics (Australia) Pty Ltd v Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union (unreported, Australian Industrial Relations Commission, Hingley C, Print PR 959400, 30 June 2005) (“TNT Logistics”) dealing with the interpretation of specific provisions in an enterprise agreement specific to logistics employees at a Mitsubishi site in Tonsley Park in South Australia.
What the City’s Submissions do not say, other than by reference to its age and the act of Parliament under which the AIRC then operated and Decision – Public Holidays was made, is why Decision – Public Holidays is of questionable relevance. Logically, on the basis of the submission made by the City, one might say with equivalent force, that TNT Logistics, relied upon by the City, was decided 10 years ago and when the Workplace Relations Act 1996 (Cth) was in force. Such statements do not deal with the matter of principle involved. Furthermore, if any decision of the AIRC is to be preferred as more authoritative it would, on ordinary principles, be a decision of the Full Bench of the AIRC which:
a)does not appear to have been overruled or otherwise doubted; and
b)which is directly on point, dealing with the rate of pay for casual employees working on public holidays,
rather than that of a single Commissioner of the AIRC.
In any event, neither Decision – Public Holidays nor TNT Logistics are, in terms of principle, and absent specific provisions in the enterprise agreement concerned in TNT Logistics, at odds with Shire of Roebourne: both adopt the principle that overtime and public holiday rates are not to be calculated by applying the casual rate to the relevant base or ordinary rate and then applying the penalty rate to that loaded rate, but rather that the casual loading is simply to be added to the appropriate rate including the penalty rate. That is a principle which must be subject always to applicable statutory, award or enterprise agreement provisions which provide otherwise.
The City’s argument based on TNT Logistics does not therefore affect the conclusion reached by the Court in Shire of Roebourne.
The City then submits that in Australian Municipal, Administrative, Clerical and Services Union v VicRoads [2008] AIRC 1107 (“VicRoads”) the AIRC dismissed an application by the Australian Services Union to provide employees who worked irregular hours with an alternative day off when a public holiday falls on a day when the employee would not be working. The City says that the AIRC held that neither the relevant award nor the relevant agreement contained the relevant provisions of the Decision – Public Holidays test case, and therefore it was for the employer to decide whether or not it wished to voluntarily put into place what the AIRC had decided in a test case decision was merited and just: VicRoads at [12] per Hamilton DP.
The City’s Submissions do not deal with the principle involved, and rely upon an observation made in relation to an unrelated issue in respect of an application to vary an enterprise agreement. VicRoads is distinguishable because it has nothing to do with payment for time actually worked by a casual on a public holiday. Further, because compliance with the requirements of the 2012 Enterprise Agreement is mandatory, and not voluntary, VicRoads can be further distinguished on this basis. Put differently, VicRoads was an arbitral decision as to whether a right to an alternative day off for a public holiday not worked ought to exist, and bears no relation to the judicial function required in this case of interpreting the relevant provisions of an existing enterprise agreement in relation to payment for time actually worked by a casual employee on a public holiday. It is worth observing, however, that the AIRC held that the applicant union had “justice on their side” because Decision – Public Holidays had “decided that some provision for what it seeks should be included in Awards”: VicRoads at [12] per Hamilton DP.
The City’s Submissions then assert that under the current statutory regime public holiday entitlements are regulated by the National Employment Standards (“NES”) under the Fair Work Act 2009 (Cth) (“FW Act”). It is asserted that the NES does not reflect an intention to apply the principles from Decision – Public Holidays as a test case. This submission again ignores the fact that there are specific provisions in the 2012 Enterprise Agreement dealing with the issue of the entitlement of casual employees to penalty rates for work on public holidays. It is these provisions, which are applicable to Mr Duggan, which the Court had to interpret in Shire of Roebourne. The relevant provisions of the NES in the FW Act, ss.114, 115 and 116, do not deal with the question of actual payment to an employee who actually works on a public holiday where that employee is a casual employee. Rather:
a)s.114 of the FW Act deals with an employee’s entitlement to be absent from employment on a public holiday, and an employer’s capacity to make a reasonable request to an employee to work on a public holiday;
b)s.115 of the FW Act specifies applicable public holidays, and provides for substituted public holidays; and
c)s.116 of the FW Act deals with payment for employees absent on public holidays, and who are required to be paid their base rate of pay for ordinary hours of work for that public holiday. A note to s.116 of the FW Act indicates that employees who do not have ordinary hours of work on a public holiday are not entitled to payment under s.116 of the FW Act, and uses the specific example of a casual who is not rostered on a public holiday not being entitled to payment for that public holiday.
There is therefore nothing in the applicable NES provisions in the FW Act, which deals with the payment to be made to a casual employee who actually works, or is rostered, on a public holiday. The City’s argument based on the NES does not affect the conclusion reached by the Court in Shire of Roebourne.
The City next argues that the natural and ordinary meaning of the words use in clause 17.2 of the 2012 Enterprise Agreement mean that casual loading would be excluded from the calculation of penalties and overtime.
This is not a new argument and was dealt with at length by the Court in Shire of Roebourne at [25]-[36] per Judge Lucev. The City’s Submissions now appear to seek to reargue those matters. In any event, the City’s Submissions insofar as they suggest that the words:
Casual Employees, will also be paid any rates payable for shift and weekend work on the same basis as a fulltime or part time employee
mean, because of the reference to “on the same basis as a fulltime or part time employee”, that payment of the casual loading is precluded, are wrong. Casual employees are entitled to be paid the rates payable for shift and weekend work, and to be paid those rates, that is the rates payable for shift and weekend work, on the same basis as a fulltime or part time employee, but are also entitled to a casual loading because they are casual employees: Decision – Public Holidays. The City’s Submissions fail to distinguish between the rates payable for shift and weekend work, and the entitlement of casual employees to be paid a loading in respect of their casual employment. As was pointed out in Shire of Roebourne at [29] per Judge Lucev the fact that clause 17.2 of the 2012 Enterprise Agreement applies to casuals is also evident by the terms of those clauses (there listed) which do not apply to casuals, including clauses which expressly do not apply to casuals. If it was not intended that casual employees be paid a loading over and above the rates payable for shift and weekend work, when casual employees were working on shifts and weekends, there was (and still is) nothing to preclude the parties to the 2012 Enterprise Agreement from reaching and registering an agreement to that effect.
The City’s Submissions also assert that because neither party contemplated the outcome at which the Court has arrived as a possibility that that means that it can reasonably be inferred that the parties intended that the casual loading is to be excluded from public holiday payments. Again, the City’s Submissions seek to reargue a matter determined in Shire of Roebourne where the Court observed that:
46. In short, however, whatever was said to be the alleged intention behind the provisions of the 2012 Enterprise Agreement vis-a-vis the 2009 Collective Agreement, those alleged intentions, which are not the subject of any agreed facts or agreement between the parties, cannot prevail over the plain meaning of the 2012 Enterprise Agreement which provides for payment of penalties on weekends and public holidays for casual employees, and its inherent industrial sensibility in accordance with long established industrial authority, for the reasons set out above.
47. … As to drafting, if, as was the Shire’s submission, it was never the intention under the 2012 Enterprise Agreement to pay casual employees penalty rates for work on Saturdays, Sundays and public holidays, the Court wonders why it was, and how difficult it would have been, to insert a provision, either in clause 17 or in Appendix 11 of the 2012 Enterprise Agreement, to the effect that:
Casual employees will only be paid a 25% casual loading, and not be paid penalties, overtime or public holiday rates, for any work performed on Saturdays, Sundays or public holidays.
And, when the matter is thus put, the answer is obvious: such a provision was not included because clauses 17.2 and 43.4 of the 2012 Enterprise Agreement expressly provided to the contrary.
Shire of Roebourne at [46]-[47] per Judge Lucev.
It follows that the City’s Submissions concerning the outcome contemplated by the parties is without substance and does not affect the conclusion reached by the Court in Shire of Roebourne.
The City then makes submissions concerning the meaning of clause 43.4 of the 2012 Enterprise Agreement which provides that an employee working on a public holiday “will be remunerated at time and a half in addition to the ordinary pay for the day.”
The City’s Submissions are as follows:
15.The expression ‘time and half in addition to the ordinary pay for the day’ is capable of being distinguished from the 1995 Public Holiday decision reference to ‘…the prescribed holiday rate for non-casual workers is double time’ and other decisions dealing with industrial instruments that expressly prescribe a rate of ‘double time and a half (250%)’ or even ‘ordinary time plus time and a half’.
16.The natural and ordinary meaning of the provision should be read as time and a half, not double time and a half. This is consistent with clause 43.3 which provides for time in lieu at the rate of time and a half, not double time and a half.
17.The ‘ordinary pay for the day’ referred to in clause 43.4 refers to the payment made by reference to clause 43.1, which provides as follows:
Full-time and part-time Employees will be entitled to the following public holidays without loss of pay for ordinary hours….
18.As a consequence of this provision, a full-time employee who is not required to work on a public holiday is paid 8 hours at ordinary time. By contrast, a full-time employee who is required to work a full day on a public holiday is paid 8 hours ordinary time plus 8 hours at time and a half. Hence the penalty for working on the public holiday is 8 hours at time and a half, not 8 hours at double time and a half.
19.In this case, the Applicant was paid 8 hours ordinary pay for the public holiday in relation to his substantive full-time position with the Respondent plus 8.5 hours as a casual lifeguard. If the Court’s interpretation of the Enterprise Agreement is to be preferred, the Applicant will be paid 16.5 hours ordinary time plus 8.5 hours at time and a half.
City’s Submissions at [15]-[19] (footnotes omitted).
As the Court explained in Shire of Roebourne at [39]-[40] (see [2] above), clause 43.4 of the 2012 Enterprise Agreement entitles an employee working on a public holiday to be paid at double time and a half, that is their ordinary pay for the day plus time and a half, or as clause 43.4 expresses it “time and a half in addition to the ordinary pay for the day” (underlining added). Put mathematically, the equation is “1½+1=2½”. And a casual employee, consistent with the Decision – Public Holidays case, is then entitled to an additional 25% casual loading, which is equal to one quarter of the ordinary pay for the day, and therefore the mathematical equation becomes “1½+1+¼=2¾”. Hence, a casual employee working on a public holiday is entitled to be paid at double time and three quarters. This is not double time and three quarters in addition to the ordinary rate of pay, but rather time and half, plus the ordinary pay for the day, plus the casual loading. Thus, the Court does not disagree with the submission made by the City at [18] in the City’s Submissions insofar as it applies to a fulltime employee required to work on a public holiday, but with a caveat that it is a fulltime employee working on a public holiday in their capacity as a fulltime employee. That caveat is important, because of what is said at [19] of the City’s Submissions. For the first time in this case it is suggested that the Court ought to take account of Mr Duggan’s ordinary pay in relation to his fulltime employment in determining what he is to be paid for working on a public holiday in his capacity as a casual employee. The Statement of Agreed Facts, set out at [5] in Shire of Roebourne, makes clear, at [1]-[4] of the Statement of Agreed Facts, that Mr Duggan had two separate contracts of employment with the City (then the Shire of Roebourne), one for a fulltime position of Assistant Accountant from Monday to Friday, and one as a casual employee to work on weekends and public holidays as a casual lifeguard. It follows that Mr Duggan is entitled to be paid for a public holiday not worked under his fulltime contract of employment at the ordinary rate of pay by reason of his fulltime contract of employment. That, however, has nothing to do with his casual contract of employment, and nor was it argued in Shire of Roebourne that any account ought to be taken of amounts payable to Mr Duggan by reason of his fulltime position, when determining his entitlements under his contract of employment as a casual employee. In any event, because there are two contracts of employment, the City is obliged to meet its obligations pursuant to the 2012 Enterprise Agreement in relation to both of them, and if that has, as it does, the consequence that an additional eight hours is to be paid as ordinary pay for the public holiday on which Mr Duggan was not required to work under his fulltime contract of employment in his fulltime position, that does not affect his payment as a casual employee under a separate contract of employment as a casual lifeguard.
For the above reasons the City’s Submissions with respect to clause 43.4 of the 2012 Enterprise Agreement are misconceived and do not affect the conclusion reached in Shire of Roebourne.
The City’s Submissions then assert unfairness as between fulltime and part time employees on the one hand, and casual employees on the other hand: see City’s Submissions at [20]-[21], but it is an assertion based on the misconception set out above with respect to the proper meaning of “remunerated at time and half in addition to the ordinary pay for the day”: see [2] and [18] above, and in Shire of Roebourne at [39]-[40] and [49] per Judge Lucev. It is the City’s misconception which provides the basis for the alleged unfairness, for reasons set out above. The City’s Submissions in this respect do not affect the conclusions reached by the Court in Shire of Roebourne.
The City’s Submissions then go on make submissions about the effect of the 25% casual loading, and the nature of the casual loading including compensation for public holidays. Again, this was an argument dealt with in Shire of Roebourne at [39]-[40] per Judge Lucev.
In this respect, the City’s Submissions do not affect the conclusion reached by the Court in Shire of Roebourne.
It follows from the above, that none of the City’s Submissions in relation to the issue of the payment to Mr Duggan for the public holiday on 1 January 2013 affect the conclusion reached by the Court in Shire of Roebourne, and the Court adheres to the view expressed in Shire of Roebourne at [43] per Judge Lucev, as set out above at [2] above.
Conclusions and orders
With respect to Mr Duggan’s claim for payment for work on 1 January 2013 the Court will make a declaration that a casual employee employed as a lifeguard under the terms of the Shire of Roebourne Enterprise Agreement 2012, who works on a public holiday, is, by reason of the provisions of clauses 17.2 and 43.4 of the Shire of Roebourne Enterprise Agreement 2012, entitled to be paid for all time worked on a public holiday at the rate of double time and three quarters of the ordinary rate of a non-casual employee employed as a lifeguard. The Court will also make an order that the respondent pay the applicant the sum of $349.28 for work performed as a casual lifeguard on 1 January 2013 within 14 days.
With respect to costs, and for reasons set out in Shire of Roebourne at [51] per Judge Lucev there will also be an order that there be no order as to costs.
I certify that the preceding twenty-five (25) paragraphs are a true copy of the reasons for judgment of Judge Antoni Lucev
Associate:
Date: 14 August 2015
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