FreshFood Management Services Pty Ltd v National Union of Workers
[2013] FWCFB 1907
•15 APRIL 2013
[2013] FWCFB 1907 |
FAIR WORK COMMISSION |
DECISION |
Fair Work Act 2009
s.604 - Appeal of decisions
v
National Union of Workers
(C2013/2699)
VICE PRESIDENT WATSON | SYDNEY, 15 APRIL 2013 |
Appeal against decision [2012] FWA 10832 of Deputy President Booth at Sydney on 24 December 2012 in matter number C2012/1110 - dispute concerning appropriate payment for work performed on rostered day off - whether the decision addressed the question at issue - Fair Work Act 2009 s.604.
Introduction
[1] This decision concerns an application for permission to appeal under s.604 of the Fair Work Act 2009 (the Act) by FreshFood Management Services Pty Ltd (FreshFood) against a decision of Deputy President Booth. 1 The Deputy President’s decision concerned a dispute regarding the payment for time worked by employees on a Rostered Day Off (RDO).
[2] At the hearing on 27 March 2013, Mr J. Darams of counsel with Mr A. Goonrey appeared on behalf of FreshFood, Mr S. Mueller with Mr M. Valentin appeared on behalf of the National Union of Workers (NUW) and Ms L. Saunders appeared on behalf of the “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU).
Background and the Decision under Appeal
[3] The NUW notified a dispute to Fair Work Australia, as it was then known, on 18 September 2012.
[4] In her decision, the Deputy President identified the issue in dispute and the position of the parties as follows:
“[2] The parties agree that the issue in dispute is:
“whether, in a month where an employee is required to work on an RDO, the entitlements in clause 35(c) of the Agreement are payable in addition to the hours already worked by the employee.”
“[3] The parties’ respective positions on the appropriate remuneration were set out by the NUW in its written submission in a manner generally agreed by the Company as follows:
“The union’s position is that the entitlements in clause 35(c) are in addition to the requirement to pay for all of the 152 hours already worked towards the RDO. The accrued hours towards the RDO remain payable. An employee working on the RDO remains entitled to a paid day off. The employee is entitled to payment of the equivalent of 168 hours for the month.
The company’s position is that an employee who works on the RDO is paid at ordinary rates for the week and is either paid an additional 8 hours or receives an alternative day off. This is the equivalent of 160 hours for the month.””
[5] As the grounds of appeal relate to the reasoning and the conclusion reached by the Deputy President we set out her reasoning and conclusions in full:
“[32] To address the question posed by the parties requires a consideration of the whole agreement and how the clauses interact to create the rights and obligations of the parties.
[33] There is no ambiguity about the obligation of the Company in respect to time worked on an RDO. Time worked on an RDO is paid for at overtime rates or in the alternative, paid for at ordinary time with an additional day off. This is explicit from the words of clause 35(c) as follows:
“(c) An Employee who is required by the Employer to work on a rostered day off shall be paid overtime rates or elect to take an alternative day off at a mutually agreeable date. Such choice shall be at the option of the Employee.”
[34] In the case of employees from the Instant Coffee Plant the overtime rate applicable is double time. This is derived from Appendix 1 of the Agreement which reads as follows:
“APPENDIX 1: QUARANTINE PROVISIONS - INSTANT COFFEE PLANT
PAYMENT OF OVERTIME - All overtime done outside ordinary hours is paid at the rate of double time.”
[35] In the absence of clause 35(c) time worked on an RDO would still be required to be remunerated at overtime rates because time worked on an RDO is time worked over and above the ordinary hours of 152 in a 28 day cycle.
[36] Clause 36.1(a)(ii) means that 152 hours over 28 consecutive days is the extent of ordinary hours in that cycle and clause 38.2(a) means that time worked outside ordinary hours is to be paid for at overtime rates.
[37] Clause 36.1(a)(ii) reads as follows:
“36.1 General
Hours of work will be determined mutually between the parties taking into account the operational needs of the business and the teams, provided that the work arrangement is based on a thirty eight hour week. By mutual agreement normal working hours may exceed eight on any day (Monday to Sunday) on a permanent shift basis at normal rates of pay.
(a) Generally the ordinary hours of work will not exceed 38 hours per week and shall not exceed:
(i)...
(ii) One hundred and fifty two hours in twenty-eight consecutive days.”
[38] Clause 38.2(a) reads as follows:
“38.2 Payment For Overtime - (Excluding Continuous Shift Employees)
(a) All work done outside ordinary hours shall be paid at the rate of time and a half for the first two hours and then at double time, such double time to continue until the completion of the overtime worked.”
[39] Clause 35 is consistent with clause 36.1(a)(ii) and clause 38.2(a) and is, in effect, a more particular statement of the entitlement that arises from the interaction of these two provisions. There is no dispute between the parties in relation to this.
[40] The dispute in this matter is not about the payment for time worked on an RDO. It is about the time accrued towards the entitlement to take time off with pay. It is important not to conflate the two concepts. The intention of the Agreement in relation to this matter is not able to be ascertained entirely from a reading of the words in the agreement. Here the principles of interpretation of industrial agreements discussed above come into play.
[41] The effect of clauses 36.1(a)(ii) and 36.1(b) of the Agreement taken together is that the arrangement of working hours may be that 152 hours are worked over 19 working days in a 28 day cycle. Beyond the reference to this arrangement of working hours in clauses 36.1(a)(ii) and 36.1(b) of the Agreement, it is silent on how this should occur.
[42] The evidence before me from both Mr Oberman and Ms Standley is that the practice at the Company is for employees to work for 8 hours per day for 19 days to fulfil 152 ordinary hours of work in a 28 day cycle. (8 multiplied by 19 is 152). In so doing they work 0.4 unpaid hours in addition to 7.6 paid hours per day. 7.6 hours per day are the ordinary hours per day for an employee working a 38 hour week over 5 days a week (38 divided by 5 is 7.6). But for the provision of clause 36.1(b) employees would be required to be paid for this additional time at overtime rates. The time accrues progressively such that by the end of the 19th day of work in a cycle, 7.6 hours, or one day, has been accrued and it is ‘banked’ to be drawn on at a later date. The practice is to regard the 20th day in the cycle as the RDO but the time could be drawn on at any other time subject to the provisions of the Agreement.
[43] The practice of the company, similar to that in many companies in manufacturing, is to call this day a Rostered Day Off because the time to be taken off with pay is identified in the roster in advance for one or more employees for operational convenience. In the service sector, where it can be more practical for employees to take their accrued time off as individuals at short notice, the time is colloquially know as “time off in lieu” or “flex time”. The concept is the same. Time worked without pay is accumulated and taken at a later time as time off with pay.
The agreement provides that a maximum of 6 RDOs may be accrued. That is, 6 tranches of 7.6 hours may be in the “bank” to be taken at a time agreed between the company and the employee. An RDO is in the bank because time has been accrued but not yet taken. The agreement contemplates this occurrence by providing for a maximum number of accrued RDOs in clause 35(d).
[44] The question arises as to whether, in the circumstances that an employee is required to, and does, work on a day that was otherwise rostered to be a day off (an RDO) a day ought to be deducted from the RDO bank. I do not think so because the time accrued has not been taken, the time remains in the bank until such time as it is taken, subject to the provision that there cannot be more than 6 days in the bank at any one time.
[45] It follows that the answer to the question posed by the parties is “yes”.
[46] Mr Darams urged upon me a conclusion that as the provision of the Agreement was in identical terms to the Enterprise Agreement that it superseded and the manner in which the Company had implemented this had not been the subject of dispute that this weighs in favour of the interpretation pressed by the Company. I find that this is a narrow interpretation of the authorities in relation to the history of the provisions of the Agreement. Such history must have regard to all the relevant antecedents including the broader industrial context, legislation, awards etc. In any event it is unnecessary for me to reach a conclusion on this point as I have reached my decision based on my reading of the Agreement.”
(References omitted)
Grounds of Appeal and Submissions
[6] FreshFood submits that the Deputy President erred:
● by misdirecting herself as to the question and the issue which she was required to determine; and
● in construing the terms of the enterprise agreement as creating a “bank” of time that could be drawn on by employees at a later date.
[7] FreshFood also contends that the Deputy President denied the parties procedural fairness in respect of her consideration of clause 35(d) of the Freshfood Management Services Pty Ltd as a wholly owned subsidiary of Freshfood Australia Holdings Pty Ltd & National Union of Workers, the Australian Manufacturing Workers Union & the Communications, Electrical, Electronic, Energy Union of Australia (New South Wales) (“ETU”) Enterprise Agreement 2010 (the Agreement).
[8] FreshFood submits that the Deputy President did not deal with the issue and question in the application, but dealt with another matter which had not been referred to the Commission for resolution. It submits that, whilst it appears by reference to paragraphs [2] and [45] of the decision that Deputy President Booth has answered the question that was put by the parties, a review of the decision in its entirety and the positions of the parties demonstrates that this is not the case.
[9] The NUW and the AMWU submit that the grounds of appeal are without substance. They contend that the Deputy President addressed the right question and arrived at the correct answer.
The Construction of the Decision
[10] In our view the nature of the dispute is clear from a full reading of the Deputy President’s decision. The parties were in dispute as to the amount of pay payable to an employee who works on their RDO and who elects to receive payment instead of taking an alternative day off on another rostered day. FreshFood’s practice was to pay an additional eight hours for eight hours work on an RDO because it considered that it was already paying eight hours pay for the rostered day off by virtue of the payment system for the four week cycle of 19 working days and one rostered day off. That payment system involved payment of equal weekly amounts for 38 hours work in each of the four weeks of the cycle regardless of whether five eight hour shifts or four eight hour shifts is worked in the relevant week. It contended in the proceedings that the payment of an additional eight hours with respect to work on the RDO satisfied the requirement in clause 35(c) for payment to be made at overtime rates.
[11] The NUW and AMWU contended that the payment notionally made for the rostered day off in a period when the RDO is not worked is in reality a payment for the additional hours worked on each of the other 19 days, and the payment system merely provides for consistency in weekly payments as a result of a pay averaging system. As a result, an additional 16 hours pay is payable for work on an RDO.
[12] The arguments of the parties concerning the nature of payments for the 19 days led the Deputy President to describe the dispute in the manner that she did. By answering “yes” to the question we consider that it is clear that she was agreeing with the unions’ position and that 16 hours pay is payable for eight hours work on an RDO.
[13] In our view it is clear that the Deputy President appropriately described the dispute in paragraphs [2] and [3] of her decision and in deciding that 16 hours pay was payable, reached the correct answer. The obligation in clause 35(c) is to make a payment for the work on the RDO at overtime rates. In the Instant Coffee Plant the overtime rate is double time. Payment of only eight hours pay is payment at ordinary time rates. The payments that are made with respect to work on the other 19 days are not relevant to the obligation created by clause 35(c).
[14] It appears to us that FreshFood’s concerns relate to the reasoning of the Deputy President and not her conclusion. For our part we accept that aspects of that reasoning are unnecessary and could be misleading. However, given our analysis of the decision, we do not believe that FreshFood’s concerns amount to grounds for interfering with the Deputy President’s decision.
[15] Nor do we believe that there was any denial of procedural fairness. The Agreement needed to be interpreted as a whole. The parties were free to make submissions on relevant provisions of the Agreement. The Deputy President’s mention of clause 35(d) was not critical to the conclusion she reached. Nor does it constitute any binding interpretation on its meaning and intent. We dismiss this ground of appeal.
Conclusion
[16] For the above reasons we do not consider that a case has been made out to grant permission to appeal. We consider that the Deputy President addressed the matter in dispute and reached the correct answer. The application for permission to appeal is dismissed.
VICE PRESIDENT WATSON
Appearances:
J. Darams, of counsel, with A. Goonrey for FreshFood Management Services Pty Ltd
S. Mueller with M. Valentin for the National Union of Workers
L. Saunders for the “Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union” known as the Australian Manufacturing Workers’ Union (AMWU)
Hearing details:
2013.
Sydney.
March, 27.
1 [2012] FWA 10832.
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