Fresh Cheese Co (Aust) Pty Ltd v Franca Viceconte
[2019] FWCFB 165
•25 JANUARY 2019
| [2019] FWCFB 165 |
| FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.604—Appeal of decision
Fresh Cheese Co (Aust) Pty Ltd
v
Franca Viceconte; Rosario (Ross) Condello
(C2018/5896)
VICE PRESIDENT CATANZARITI | SYDNEY, 25 JANUARY 2019 |
Appeal against decision [2018] FWC 6106 of Deputy President Gostencnik at Melbourne on 2 October 2018 in matter number C2017/1817.
[1] On 5 April 2017, Ms Viceconte and Mr Condello (Respondents) filed an application pursuant to s.739 of the Fair Work Act 2009 (Cth) (Act) for the Fair Work Commission (Commission) to deal with a dispute with Fresh Cheese Co (Aust) Pty Ltd (Appellant) under the dispute resolution procedure of the Food, Beverage and Tobacco Manufacturing Award 2010 (Award). The dispute related to a range of matters including classification and underpayment of various allowance and penalty entitlements under the Award, however for the purposes of this appeal, it is only necessary to mention the discrete issue of late meal break penalties under clause 32. Relevantly, the Meal Breaks clause of the Award (clause 32) reads as follows:
“32. Meal breaks
32.1 An employee must not be required to work for more than five hours without a break for a meal except in the following circumstances:
(a) in cases where canteen or other facilities are limited to the extent that meal breaks must be staggered and as a result it is not practicable for all employees to take a meal break within five hours, an employee must not be required to work for more than six hours without a break for a meal; or
(b) by agreement between an employer and an individual employee or the majority of employees in an enterprise or part of an enterprise concerned, an employee or employees may be required to work in excess of five hours but not more than six hours at the ordinary time rate without a meal break.
32.2 The time of taking a scheduled meal break or rest break by one or more employees may be altered by an employer if it is necessary to do so in order to meet a requirement for continuity of operations.
32.3 An employer may stagger the time of taking meal and rest breaks to meet operational requirements.
32.4 Subject to clause 32.1, an employee must work during meal breaks at the ordinary time rate whenever instructed to do so for the purpose of making good any breakdown of plant or for routine maintenance of plant which can only be done while the plant is idle.
32.5 Except as otherwise provided in clause 32 and except where any alternative arrangement is entered into by agreement between the employer and the employee concerned, the rate of 150% must be paid for all work done during meal hours and thereafter until a meal break is taken.” (Emphasis added).
[2] The specific issue at first instance was whether, on or after 5 April 2011, the Appellant incorrectly paid to the Respondents entitlements under clause 32 of the Award by not paying penalties where meal breaks were not taken within the required time (that is 5 hours from the commencement of a shift). On 2 October 2018, the Deputy President answered that question in the positive. 1 The Appellant now seeks to appeal that Decision.
Permission to appeal
[3] In relation to the question of permission to appeal, the Appellant submitted:
a. the Decision contains relevant error and should not be allowed to stand;
b. the Decision is inconsistent with key principles established by Full Benches of the Commission applicable to award interpretation;
c. the Decision is inconsistent with the principles of Award interpretation that have been established by Full Benches of the Commission and by the Federal Court which are subject to approval by the High Court;
d. the Appeal raises important questions about the interpretation of clause 32 of the Award which has general application.
[4] The Respondents submit that whilst the Deputy President’s observations regarding the scope of discretion in determining what is a "meal break" and the conduct which might rationally constitute a "requirement" to work for the purposes of clause 32 have application beyond this case, given that there is no House v King error, there is no basis for the appeal. Moreover, the Appellant's grounds of appeal turn largely on findings of fact which are relevant only to this case and therefore have no general application and public interest. The Appellant’s claim that the Decision is counterintuitive is also based on incorrect premises and is misconceived. Other than an error of no consequence which the Appellant has not sought to impugn, 2 the circumstances do not provide a proper basis for granting permission to appeal.
[5] An appeal under s.604 of the Act is an appeal by way of rehearing and the Commission’s powers on appeal are only exercisable if there is error on the part of the primary decision maker. 3 There is no right to appeal and an appeal may only be made with the permission of the Commission. Subsection 604(2) requires the Commission to grant permission to appeal if satisfied that it is in the public interest to do so. Permission to appeal may otherwise be granted on discretionary grounds.
[6] The task of assessing whether the public interest test is met is a discretionary one involving a broad value judgment. 4 The public interest is not satisfied simply by the identification of error, or a preference for a different result.5 In GlaxoSmithKline Australia Pty Ltd v Makin a Full Bench of the Commission identified some of the considerations that may attract the public interest:
“... the public interest might be attracted where a matter raises issues of importance and general application, or where there is a diversity of decisions at first instance so that guidance from an appellate court is required, or where the decision at first instance manifests an injustice, or the result is counter intuitive, or that the legal principles applied appear disharmonious when compared with other recent decisions dealing with similar matters...” 6
[7] Other than the special case in s.604(2), the grounds for granting permission to appeal are not specified. Considerations which have traditionally been treated as justifying the grant of permission to appeal include that the decision is attended with sufficient doubt to warrant its reconsideration and that substantial injustice may result if leave is refused. 7
[8] It will rarely be appropriate to grant permission to appeal unless an arguable case of appealable error is demonstrated. This is so because an appeal cannot succeed in the absence of appealable error. 8 However, as earlier stated the fact that the Member at first instance made an error is not necessarily a sufficient basis for the grant of permission to appeal.
[9] For the reasons given below, we have concluded that the Deputy President erred in applying clause 32 of the Award. The Deputy President’s focus on the naming of the two breaks and the requirement for a positive direction on the Respondent and employees more generally to take a break for a meal led him into error. In our view, this constitutes an appellable error and it manifests an injustice. Accordingly, the dispute arising in this case is a matter of public interest. Permission to appeal is granted.
Grounds of Appeal
The Deputy President erred in taking an irrelevant consideration into account
[10] The Appellant submits that the Deputy President applied additional tests and took into account irrelevant considerations in determining whether clause 32 had been breached. This is evident where the Deputy President considered;
a) Whether any instruction had been given by the Appellant about the taking of a meal within the first five hours of a shift;
b) The practice at the workplace in relation to whether a meal was actually taken during the 20 minute break and;
c) The fact that the second break was referred as a “lunch break”.
[11] The Appellant contends that there is no positive requirement in clause 32 for a meal to be consumed during the relevant break, for the employer to communicate that the break is for a meal, or for the meal to be described or named in a particular way. Rather, the matters that the Deputy President was required to consider were;
a. whether a break was taken within the first 5 hours of work commencing;
b. if a break was taken, whether the break was sufficient to take a meal;
c. if no break was taken or the break was insufficient to take a meal whether:
i. the employee had been required to work without the requisite break; or
ii. there was an alternative arrangement between the employer and employee or one of the exceptions in 32.1(a) and (b) applied.
[12] The Respondents submits that the use of the words “sufficient” and “insufficient” limits consideration to the length of the break and does not align with the discretion afforded to the decision-maker. Moreover, the Deputy President’s conclusion that the Respondents’ earlier break was not a meal break is capable of rationally affecting further assessment of whether the Respondents’ first break was a break for a meal. 9 The Respondents submit that such consideration rationally supports a conclusion that the break on which the Respondents were to consume a meal was the later rather than the earlier break.
Failing to apply the settled principles of award interpretation of clause 32
[13] The Appellant submits that the Deputy President failed to apply the settled principles of award interpretation, 10 as he added additional tests to clause 32 requiring that there be a direction to employees to take a break for a meal and/or that the relevant break must be appropriately named to indicate it is for the purpose of taking a meal; and as a consequencechanged the plain meaning of the clause.
[14] The Respondents assert that the phrase “meal break” and the word “required” were given their plain and ordinary meaning, and that such interpretation aligns with the settled principles of award interpretation. The Deputy President had a discretion in determining whether the first breaks were “meal breaks” and whether the Respondents were “required” to work for more than 5 hours without a meal break. The Deputy President made findings 11 which rationally supported the conclusion that a break is a “meal break”, and therefore no House v King error is disclosed.
Failing to apply the facts to the correct interpretation of clause 32
[15] The Appellant submits the Deputy President’s interpretation of clause 32 was correct. 12 Having found that 20 minutes was generally sufficient time to take a meal, the Deputy President ought to have concluded that the 20 minute break was a break for a meal under clause 32. In failing to apply the proper interpretation of clause 32 to the facts, the Deputy President was in error.
[16] The Respondents on the other hand submits that the Deputy President was “merely observing that 20 minutes will generally, but not necessarily, be sufficient” for a break. To adopt the interpretation urged by the Appellant, this would impose a “limitation or parameter…inconsistent with the plain and ordinary meaning of the phrase [meal break]”. Nothing in the language of the Award requires the Deputy President to exercise his discretion to conclude a "meal break" is a 20 minute break; his task was to exercise his discretion, subject to House v King. He did not conclude that a 20 minute break is a "meal break" for the purposes of clause 32 of the Award, and in not doing so, he did not commit a House v King error.
Incorrectly interpreting and applying clause 32
[17] The Appellant submits that the Decision is counter intuitive as the Deputy President had concluded, on the one hand, that clause 32 may be satisfied by a break irrespective of what it is called as long as it is sufficient to enable an employee to take a meal within 5 hours of commencing their shift, 13 and on the other hand finding that clause 32 was breached because of irrelevant considerations with respect to workplace practice.14
[18] The Respondents submits that the Deputy President’s findings are neither counter intuitive nor unreasonable. In finding that a meal break is “...a break from work during which a meal may be taken”the Deputy President correctly determined that a meal break should not be limited to a consideration of the length of the break but also other additional factors. 15
Consideration
[19] Foremost we note that part of the Decision under appeal is of a discretionary nature, namely the application of clause 32 is discretionary and the construction of clause 32 is not. Relevantly, the discretionary part of the Decision can only be successfully challenged on appeal if it is shown that the discretion was not exercised correctly. In that regard, it is not open for us to substitute our view on the matters that fell for determination before the Deputy President in the absence of error of an appellable nature in the Decision. As the High Court said in House v The King: 16
“The manner in which an appeal against an exercise of discretion should be determined is governed by established principles. It is not enough that the judges composing the appellate court consider that, if they had been in the position of the primary judge, they would have taken a different course. It must appear that some error has been made in exercising the discretion. If the judge acts upon a wrong principle, if he allows extraneous or irrelevant matters to guide or affect him, if he mistakes the facts, if he does not take into account some material consideration, then his determination should be reviewed and the appellate court may exercise its own discretion in substitution for his if it has the materials for doing so. It may not appear how the primary judge has reached the result embodied in his order, but, if upon the facts it is unreasonable or plainly unjust, the appellate court may infer that in some way there has been a failure properly to exercise the discretion which the law reposes in the court of first instance. In such a case, although the nature of the error may not be discoverable, the exercise of the discretion is reviewed on the ground that a substantial wrong has in fact occurred.”
[20] Having noted the competing contentions advanced by the parties at first instance, the Deputy President construed clause 32 of the Award as follows:
“[85] It is evident from the above that generally a break for a meal must be allowed by an employer no later than five hours after an employee has commenced work. Clause 32 does not specify the duration of the meal break nor does it specify time within the allowable span within which such a break must be given. Moreover, that which is required by Clause 32 is “a break for meals”. In addition, work beyond 5 hours without a break for a meal must not be “required”…
[89] The contention advanced on behalf of [the Respondents] proceeds upon the basis that that which the [the Appellant] has designated as the “lunch break” is the break for meals within the meaning of Clause 32.1. It ignores the earlier break given during a shift which each of [the Respondents] describe as the “tea break”. Clause 32 of the Award requires that there be a break for meals. That is, a break from work during which a meal may be taken. Whether the length of the break is sufficient to enable an employee to take a meal will depend upon the circumstances. However, simply because an employer does not designate a particular break as a lunch break does not mean the break is not or cannot be a break at which a meal may be taken and thus if that break is within five hours of the commencement of an employee shift, that break may very well be sufficient to comply with Clause 32.” (Emphasis added).
[21] We agree with the Deputy President’s construction of clause 32 of the Award.
[22] Having correctly construed the meaning of clause 32, the Deputy President then proceeded to consider that while generally “20 minutes is a sufficient time period within which to consume a meal at the workplace”; this was not the “practice at the workplace”. In considering the workplace practice, the Deputy President firstly took into account how the earlier break (being a 20 minute paid break which was taken within the first 5 hours) and the later break (being a 30 minute unpaid break which was not taken within the first 5 hours) were respectively named. The Deputy President noted that as the break roster differentiated between “break time” and “lunch time” and because the “lunch time” break was “understood” to be the meal break in the workplace, the break at which a meal is to be taken is during the “lunch time” break. In our view these considerations were extraneous and irrelevant to the task that was before the Deputy President.
[23] The Deputy President noted himself at paragraph [89] extracted above, that on the proper construction of clause 32, the fact that the earlier break was not called a “meal break”, does not mean that the earlier break cannot be considered as a break at which a meal may be taken for the purposes of clause 32 of the Award. It therefore follows that the naming of the later break cannot, by implication, cause the earlier 20 minute break to fall outside the ordinary meaning of clause 32 in circumstances where the Deputy President has found that generally 20 minutes is a “sufficient time period within which to consume a meal at the workplace”.
[24] Moreover, in considering matters with respect to workplace practice the Deputy President focused on whether the Appellant had advised the Respondents that they were required to take a break for a meal within the first five hours of commencing work:
“[94] The memorandum addressed to “all production staff” and dated 1 June 2007 advises production staff inter alia that “[D]ue to OH&S laws, all staff are required to take their lunch break. NO EXEPTIONS (sic)”. Although there was some dispute about whether the two employees, the subject of this application, saw the memorandum, it is unnecessary for me to determine that issue. Two things may be said about the memorandum. First, it underscores the practice that the lunch break appears to be the break at which meals may be taken. Secondly, and critically, the memorandum does not instruct staff to take a lunch break within five hours of commencing work.
[95] The memorandum is therefore consistent with the evidence of [the Respondents] which was to the effect that they were never advised by any person on behalf of the Company that they were required to take a break for a meal within the first five hours of commencing work.
…”
(Emphasis added and citations omitted).
[25] The implication of relying upon the fact that the Appellant had not advised the Respondents that they were required to take a break for a meal within the first 5 hours of work, is that it imposes a positive obligation on employers to direct its employees to take a break for a meal in order to comply with clause 32 of the Award. There is nothing in the language of clause 32 which discloses a positive obligation of such kind. In fact clause 32 operates to the contrary as it states in rather negative terms that: “an employee must not be required to work for more than five hours without a break for a meal”. To the extent that the Deputy President relied on the fact that the Appellant did not advise or instruct employees to take a break for a meal within 5 hours of commencing work, we find error.
[26] It is also noteworthy to mention that there was evidence at first instance which indicated that Ms Viceconte had the opportunity to decide when she would go for her meal break based on her workload. The Respondent in the hearing said that whilst this was her evidence “[Ms Viceconte’s] ability to schedule her breaks was subject to workplace pressures and production needs, and there were occasions where she was required to simply work through a break that was otherwise scheduled for a particular time, because that was what was expected of her…” 17 On this we note that whether or not she took the opportunities for a meal break or whether or not it was encouraged within the 5 hour period are completely different questions to whether there was in fact a meal break within the 5 hour period. Certainly it appears to us that there was an opportunity to take a meal break within the 5 hour period and to that end, it is not appropriate for the Appellant to be liable for a penalty arising out of matters that are within an employee’s control.
[27] For the reasons set out above, we find that the Deputy President fell into error of the House v King type, by taking into account extraneous and irrelevant considerations in the application of the proper construction of clause 32 of the Award. The task that was before the Deputy President was not one of examining the nomenclature of how particular breaks are named; what is understood in the workplace to be the meal break; or whether or not the employer has directed its employees to take a break for a meal within 5 hours of the commencement of their shift. The ultimate question that needed to be determined was whether the earlier 20 minute break was a “break for a meal” for the purposes of clause 32 of the Award.
[28] Having considered all the materials filed on appeal, we determine that the earlier 20 minute break was a break for a meal that was given to the Respondents within 5 hours of their shift commencing. Accordingly, we answer the following question in the negative:
whether, on or after 5 April 2011, the Appellant incorrectly paid to the Respondents entitlements under the Award by not paying penalties where meal breaks were not taken within the required time.
Conclusion
[29] We order as follows:
(1) Permission to appeal is granted.
(2) The appeal is upheld.
(3) Paragraphs [92]-[99] of the Decision ([2018] FWC 6106) are quashed.
VICE PRESIDENT
Appearances:
Ms K. Aistrope of the AiGroup, for the Appellant.
Ms K. Johnston of the “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union for the Respondents.
Hearing details:
2018
Melbourne
26 November
Printed by authority of the Commonwealth Government Printer
<PR703776>
1 [2018] FWC 6106.
2 Decision at [88]: the date from which Mr Condello has been absent from the workplace is not “since early July 2015” but “since early July 2017”.
3 Coal and Allied Operations Pty Ltd v AIRC (2000) 203 CLR 194 at [17] per Gleeson CJ, Gaudron and Hayne JJ.
4 O’Sullivan v Farrer (1989) 168 CLR 210 per Mason CJ, Brennan, Dawson and Gaudron JJ; applied in Hogan v Hinch (2011) 85 ALJR 398 at [69] per Gummow, Hayne, Heydon, Crennan, Kiefel and Bell JJ; Coal & Allied Mining Services Pty Ltd v Lawler and others (2011) 192 FCR 78 at [44] -[46].
5 GlaxoSmithKline Australia Pty Ltd v Makin[2010] FWAFB 5343 at [26]-[27], 197 IR 266; Lawrence v Coal & Allied Mining Services Pty Ltd t/as Mt Thorley Operations/Warkworth[2010] FWAFB 10089 at [28], 202 IR 388, affirmed on judicial review in Coal & Allied Mining Services Pty Ltd v Lawler (2011) 192 FCR 78; NSW Bar Association v Brett McAuliffe; Commonwealth of Australia represented by the Australian Taxation Office [2014] FWCFB 1663 at [28].
6 [2010] FWAFB 5343, 197 IR 266 at [24] – [27].
7 Also see CFMEU v AIRC (1998) 89 FCR 200; and Wan v AIRC (2001) 116 FCR 481.
8 Wan v AIRC (2001) 116 FCR 481 at [30].
9 Decision at[ 91]and [98].
10 Kucks v CSR Ltd (1996) 66 IR 182; Re Wanneroo v Michael Lindsay Holmes [1989] FCA 369; and Amcor v Construction, Forestry, Mining and Energy Union and Ors [2005] 222 CLR 241.
11 Decision at [85]; [89] and [90].
12 Decision at [89].
13 Decision at [89].
14 Decision at [98].
15 Decision at [89].
16 [1936] 55 CLR 499.
17 Transcript of Proceedings dated 26 November 2018 at [93].
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