Endeavour Energy v Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia

[2014] FWC 5513

[2014] FWC 5513

FAIR WORK COMMISSION

DECISION

Fair Work Act 2009
s.739—Dispute resolution

Endeavour Energy
v
Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia; Australian Municipal, Administrative, Clerical and Services Union
(C2014/489)

SENIOR DEPUTY PRESIDENT HAMBERGER SYDNEY, 15 AUGUST 2014

Dispute about a matter arising under an enterprise agreement; provision of day in lieu for employees rostered on call or stand by on public holidays.

Background

[1] On 27 March 2014, Endeavour Energy (Endeavour) applied to the Fair Work Commission to deal with a dispute concerning the proper construction of clause 9.4 in the Endeavour Energy Enterprise Agreement 2012 (theEA). The clause provides as follows:

‘9.4 On Call and Stand By

9.4.1 With After Hours Emergency and/or Breakdown Service, the work performed by employees will include:

(a) restoring continuity of supply to Endeavour Energy’s system and customers;

(b) returning to a safe and proper operating condition any plant and/or equipment which has failed or is likely to fail;

(c) performing maintenance work which is of such an urgent nature that if not carried out an interruption of supply may occur; and

(d) all aspects of consumer’s installation, plant, equipment or appliances which if not attended to or temporarily overcome, will cause distress, hardship or loss to the customer and/or other occupants of the premises.

9.4.2 An employee rostered on the on call and stand by roster is required to be available for emergency and/or breakdown work at all times outside his or her usual hours of work.

9.4.3 Employees rostered on call or stand by will have their hours monitored for safety reasons.

9.4.4 Employees who are on call are not confined to their homes but they must be reasonably available so that they would not be delayed by more than15 minutes in addition to the time it would normally take to travel from their homes to the place where the work is to be performed. Any delays in excess of 15 minutes will not be paid unless specifically authorised.

9.4.5 An employee may be required to attend any other calls which arise prior to returning home.

9.4.6 An employee shall not engage in an activity or make a commitment that will adversely affect their obligations when rostered on.

9.4.7 On call and stand by employees will be paid as follows:

SITUATION

ENTITLEMENT

On Call/ Stand By

Allowance

(Refer Appendix B)

An employee shall be paid the On Call/ Stand By Allowance for each day the employee is rostered on.

Time worked on a call

All time at double time.

(a “call” shall be from the time the call is received to the time the employee has returned home)

Minimum payment

2 HOURS AT DOUBLE TIME.

Attending to the call

Employee to proceed directly to and from the call without unnecessary delay or deviation.

Work on Public

Holidays

1 day shall be added to time in lieu for each public holiday worked.

[2] A conciliation conference was held on 2 April 2014. It was agreed by Endeavour and the affected unions, the Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia and the Australian Municipal, Administrative, Clerical and Services Union (the unions) that the matter would be dealt with on the papers. Directions were issued for the parties to file and serve their submissions. Subsequently it was agreed that a short hearing should be conducted to deal with evidence. This hearing took place on 18 July 2014.

[3] The issue in dispute is whether an employee who is on call on a public holiday is entitled to a day in lieu even if he or she is not called in to work. Endeavour submitted that the entitlement to a day in lieu only applies where the employee is called upon and actually attends work. The unions submitted that the entitlement applies even where the employee is not required to attend work.

The parties’ submissions

[4] Endeavour conceded that there had been a practice that all persons on the on call/stand by roster on public holidays would receive the day in lieu, whether they work the day or not. However Endeavour submitted that this had been ‘a beneficial interpretation provided to staff over and above a strict reading of clause 9.4 and in particular clause 9.4.7.’ It argued that whatever the practice might have been in the past, it was entitled to change its practices (subject to the consultation provisions in the EA). It was seeking to do this in order to better manage its entitlements, to ensure that entitlements were being paid in accordance with the EA, and to achieve comparative equity between those who were called upon to work on a public holiday and those who were not.

[5] The unions submitted that Endeavour was not entitled to change its practices in the manner it was proposing. They did so on several grounds. First, they submitted that a proper construction of the EA means that employees who were on call on a public holiday are entitled to the day in lieu, whether they are actually called in to work or not. Secondly, the action proposed by Endeavour was not a valid exercise of managerial prerogative. Thirdly, the action proposed by Endeavour was inconsistent with the no extra claims clause in the EA. Finally, it was submitted that the action proposed by Endeavour was ‘prevented’ because the payment of the day in lieu forms an implied term in the EA and the employees’ contracts ‘due to custom.’

The evidence

[6] Mr Campbell gave evidence on behalf of the unions. He has worked at Endeavour for 23 years. He gave unchallenged evidence that there had been a practice since the late 1990s of being granted a day in lieu when an employee was on stand by on a public holiday whether the employee was called into work or not.

[7] Mr Taylor also gave evidence on behalf of the unions. He attached to his statement a copy of an email sent by the Manager of Employee Relations on 21 July 2011 to a range of Endeavour managers attaching a series of ‘Management of Allowances Memos’. The managers were told that the memos were required to be communicated to all relevant staff within their business unit/branch - particularly to ‘Time and Attendance people.’ The memos were to be applied from 1 August 2011. One of the memos dealt with stand by allowance. It is reasonably clear from Mr Taylor’s evidence, and the evidence of Ms Stevens, who gave evidence on behalf of Endeavour, that the memo had been produced by the payroll department in response to an audit they had conducted that had found the stand by allowance had been managed differently in each region. Presumably the memo was designed to ensure that the allowance was henceforth managed in a consistent manner. The memos had been subject to consultation at the Peak Consultative Committee meeting held on 2 June 2011.

[8] Under the heading ‘Allowance entitlement whilst on the roster’ the memo extracted clause 9.4.7 of the EA. Under the extract it included the following sentence in italics ‘please note that in the case of on public holidays the one day time in lieu applies in all cases whether called out for duty or not.’

Consideration

[9] I commence by referring to some of the key authorities on the proper approach to the construction of industrial instruments. The leading High Court case on the interpretation of enterprise agreements is Amcor Ltd v Construction, Forestry, Mining and Energy Union; Minister for Employment and Workplace Relations v Construction, Forestry, Mining and Energy Union (2005) 222 CLR 241 (Amcor). In that case Gummow, Hayne and Heydon JJ stated:

‘Clause 55.1.1 must be read in context. It is necessary, therefore, to have regard not only to the text of cl 55.1.1, but also to a number of other matters: first, the other provisions made by cl 55; secondly, the text and operation of the Agreement both as a whole and by reference to other particular provisions made by it; and, thirdly, the legislative background against which the Agreement was made and in which it was to operate.’

[10] In Kucks v CSR Limited (1996) 66 IR 182 Madgwick J observed:

‘But the task remains one of interpreting a document produced by another or others. A court is not free to give effect to some anteriorly derived notion of what would be fair or just, regardless of what has been written into the award. Deciding what an existing award means is a process quite different from deciding, as an arbitral body does, what might fairly be put into an award. So, for example, ordinary or well-understood words are in general to be accorded their ordinary or usual meaning.’

[11] Gray J addressed the issue of ‘a common understanding’ in Australian Liquor, Hospitality and Miscellaneous Workers’ Union v Prestige Property Services Pty Ltd (2006) 149 FCR 209 (ALHMU), and Shop Distributive and Allied Employees’ Association v Woolworths Limited (2006) 151 FCR 513 (SDAEA). In ALHMWU his Honour was concerned to determine whether the Victorian Arts Centre Trust was an ‘instrumentality’ within the meaning of two awards. The respondent had argued that it was not. His Honour said (at 222) that:

‘For present purposes, I am prepared to accept that the construction of an award can be affected by a common understanding of the parties to it about a particular state of affairs. If such a common understanding existed when the award was made, it should not be departed from when the Court comes to construe the award at a subsequent time. Care must be taken, however, to distinguish a common understanding from common inadvertence. If the only reason why the government instrumentality rates were not paid at the Centre was that neither the union nor the employer adverted to the possibility that there was an obligation to pay them, no common understanding results. In order to have an understanding, it is necessary that there be a meeting of minds, a consensus. There can be no meeting of mind, no consensus, if no-one has thought about the issue.’

[12] His Honour expressed similar caution in the SDAEA case. He there said (at 520) that:

‘Counsel for the applicant contended that the past conduct of the parties could be relied upon as an aid in the construction of the Certified Agreement. There is authority that, if a provision has appeared in a series of agreements between the same parties, and if they can be shown to have conducted themselves according to a common understanding of the meaning of that provision, then it can be taken that they have agreed that the term should continue to have the commonly understood meaning in the current agreement. See Merchant Service Guild of Australia v Sydney Steam Collier Owners and Coal Stevedores Assn (1958) 1 FLR 248 at 251 per Spicer CJ, 254 per Dunphy J and 257 per Morgan J, and Printing and Kindred Industries Union v Davies Bros Ltd (1986) 18 IR 444 at 452-453. It is necessary to take great care in the application of this limited principle, to avoid infringing the general principle that the conduct of parties to an agreement cannot be taken into account in construing the agreement. For the limited principle to operate, there must be clear evidence that the parties have acted upon a common understanding as to the meaning of the relevant provision and not for other reasons, such as common inadvertence to its true meaning.’

[13] The words ‘work’ and ‘worked’ are ordinary and well understood terms. Therefore they should in general be accorded their ordinary or usual meaning (Kucks). Being on call is not work - it is being available to be called into work. This suggests that the words ‘Work on Public Holidays’ and ‘for each public holiday worked’ refer to an employee who is actually called in to work - not someone who is on stand by but who is not called in. Having regard to the context (Amcor) the term ‘worked’ is used elsewhere in the clause. It is quite clear that the reference to ‘time worked on a call’ earlier in the clause refers to the situation where an employee is called in to perform work. Thus the text of clause 9.4.7 supports the reading submitted by Endeavour. There is nothing elsewhere in the text of the EA or in the relevant legislation that would be inconsistent with this interpretation.

[14] There is nothing in the industrial context of the provision that makes Endeavour’s reading awkward. Employees on the stand by roster on public holidays would continue to receive an allowance for being on the roster. If they are called in to work they will be further compensated. There is nothing illogical in only providing a day in lieu to those employees who are called in to work.

[15] The evidence demonstrates that there has been a long standing practice to give a day in lieu to all employees on stand by on a public holiday - whether they are called in to work or not. I am satisfied that the memo circulated by the Manager, Employee Relations in 2011 did no more than confirm that this was the practice. It did not create or confirm an entitlement to be given a day in lieu even where no work was performed.

[16] I have considered whether the practice of providing a day in lieu to employees prior to the EA could be taken as evidence that there was a common understanding that this was required by the clause. I note Justice Gray’s caution in SDAEA that there would there would need to be clear evidence that the parties have acted upon a common understanding as to the meaning of the relevant provision and not for other reasons, such as common inadvertence to its true meaning. Such evidence is lacking in this case. It is simply unclear why Endeavour chose to provide a day in lieu to employees who were not called into work. There is no evidence that Endeavour considered that it was a requirement imposed by the clause - as opposed to something that was done in practice. Nor is there any evidence that the practice had become an ‘implied term’ of the EA or of any employees’ contract of employment.

[17] I do not consider that there is any reason why Endeavour should not now apply the clause in accordance with its proper meaning. I reject the proposition that it would be an invalid exercise of managerial prerogative. There is nothing improper about an employer who has allowed what is in effect a generous ‘over award’ practice to develop to wind back such a practice - particularly at a time when it is under pressure to contain costs.

[18] Finally, I do not consider it would be a breach of the ‘no extra claims’ clause in the EA for Endeavour henceforth to apply Clause 9.4.7 in accordance with its correct meaning. It cannot be a breach of the EA to provide terms and conditions of employment in line with the provisions of the agreement.

Conclusion

[19] Endeavour is not required to provide a day in lieu to employees on the on call or stand by roster on public holidays if they are not called in to work.

SENIOR DEPUTY PRESIDENT

Appearances:

G Phillips and R Bevan for Endeavour Energy

J Kennedy for theCommunications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia and the Australian Municipal, Administrative, Clerical and Services Union

Hearing details:

2014

Sydney

18 July

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