Howard Jones v Shire of Moyne T/A Moyne Shire Council
[2019] FWC 136
•11 JANUARY 2019
| [2019] FWC 136 |
| FAIR WORK COMMISSION |
REASONS FOR DECISION |
Fair Work Act 2009
s.739—Dispute resolution
Australian Municipal, Administrative, Clerical and Services Union; Ashley Hardy; Howard Jones
v
Shire of Moyne T/A Moyne Shire Council
(C2018/7057)
COMMISSIONER WILSON | MELBOURNE, 11 JANUARY 2019 |
Alleged dispute about any matters arising under the enterprise agreement and the NES;[s186(6)].
[1] These reasons for decision follow a hearing by me on 7 January 2019 at the end of which I announced my decision on one of the two questions before the Commission, and undertook to provide reasons for decision in relation to that question as well as to separately determine the other question.
[2] The matters in question allege a dispute arising under the Moyne Shire Council Enterprise Agreement No. 8 2016, 1 (the 2016 Agreement) with the dispute being brought to the Commission pursuant to the provisions of s.739 of the Fair Work Act 2009 (the FW Act). The matters to be determined relate to leave procedures in the Moyne Shire Council and applications for leave, which were refused, by two employees, Ashley Hardy and Howard Jones. The alleged dispute arises under whether or not those matters may be in contravention of the 2016 Agreement. The precise matters for determination were the subject of some contest between the parties however it was agreed towards the end of the hearing conducted by me that the relevant questions for determination by the Commission are as follows:
1. Are the Council’s restricted leave arrangements applicable to staff in its construction team unreasonable or a contravention of the enterprise agreement? and
2. Is the Council’s refusal of the applications for long service leave made by Ashley Hardy and/or Howard Jones in October 2018 unreasonable or a contravention of the enterprise agreement?
[3] In later supplementary written submissions to the Commission, the Applicants representative, the Australian Municipal, Administrative, Clerical and Services Union (ASU) queried whether the first of the foregoing questions was the best formulation of the questions to be determined by the Commission and sought that it be amended. I have chosen not do so and explain my reasons for doing so later in this decision. Accordingly, the questions formulated above are the ones to be determined in these reasons for decision.
[4] At the end of the hearing on this matter I advised the parties that my views on the first question were at that time unconcluded and required further consideration. I separately indicated that I would answer the second of the questions, pertaining to the leave applications by Mr Hardy and Mr Jones, in the negative; that is to the effect that the Moyne Shire Council did not unreasonably refuse to grant leave applications by Mr Hardy or Mr Jones or in a contravention of the enterprise agreement.
[5] Further written submissions were provided by the Australian Municipal, Administrative, Clerical and Services Union (ASU) on Friday 11 January 2019, which have been taken into account in my decision.
[6] After considering further the issues surrounding the first of the questions indicated above, I answer that question in the affirmative, having found that the restricted leave arrangements were not the product of consultation as required by the 2016 Agreement and its predecessor.
[7] The ASU was represented by its Industrial Officer, Ed Yap. The Moyne Shire Council was legally represented after permission was given by me for that purpose by Gary Katz of Meerkin and Apel with me being satisfied that the criteria for a grant of permission within s.596(2)(a) of the FW Act had been enlivened, pertaining to the efficiency which legal representation may bring to the matter taking into account its complexity.
BACKGROUND
[8] The originating application in this matter was made on 13 December 2018 by the ASU. Since the matter was accompanied with a request for an urgent conference as it related to Mr Hardy and Mr Jones’ potential leave arrangements in January 2019, the matter was first the subject of a conference before me on 20 December 2018, and when that did not settle the dispute between the parties it was listed for an urgent hearing on 7 January 2019.
[9] In addition to written and oral submissions in relation to the ASU’s application evidence was received from Ashley Hardy and Howard Jones on behalf of themselves and the ASU and from Mr Trevor Greenberger, the Moyne Shire Council’s Director Physical Services.
[10] The Moyne Shire Council has its offices at Port Fairy, Victoria. Both Mr Hardy and Mr Jones live in the township of Macarthur and work out of the Council’s depot in that town. The urgency of the matter was that both Mr Hardy and Mr Jones sought paid leave to be taken in January with Mr Hardy requesting the period 9 January to 23 January 2019, both dates inclusive, 2 and Mr Jones requesting the period 13 January to 28 January inclusively,3 with both employees being informed by the Council in October 2018 that their leave applications had been refused. Both men wanted the leave to spend time with their families together at the same holiday park at Narrawong, between Port Fairy and Portland. Both made applications for long service leave in the course of October 2018. Their leave applications followed some significant history in which the Council had first promulgated a policy in 2016 restricting the time of year that leave could be taken by employees within its Construction Team, including over summer, and then discussed with each that their applications would likely not meet its policy.
[11] Mr Greenberger has been the Council’s Director Physical Services since November 2011 and prior to that worked at the Corangamite Shire Council for about 10 years. His work requires him to manage three departments of the Council; Works and Engineering, Recreation and Community Development, and Assets. Both Mr Hardy and Mr Jones are engaged in teams within the Works and Engineering department. Mr Hardy works as a bitumen sprayer driver in the sealing team and has held that role for about 5 years. Mr Jones is a truck driver working in the construction team and has been in that role for about 20 years.
[12] In October 2016 Mr Greenberger restructured the leave arrangements for employees working within the Works and Engineering department, which he refers to generically as the construction team. Those changes were to introduce restrictions on when leave could be taken as well as to require a close down, and thereby paid leave to be taken, for about a two week period over the Christmas/New Year period. The changes were not introduced through a consultative process, but rather through what appears to have been a unilateral decision on the part of the Council. I refer to the decision to introduce these changes either as the Restricted Leave Arrangements Policy, or the Policy. Some recognition was given by Mr Greenberger in the Policy to the possibility that the employees may, by the time of the issuance of his memo, have already made holiday arrangements during what would otherwise be within the restricted leave period. Mr Greenberger’s evidence includes that employees were informed at that time of a Leave Blackout Period in which leave would not be approved between the first week of October and the last week in April of each year:
“After the careful deliberation with the Works Manager, Leah Johnston (who had previously worked with me at Corangamite Shire Council) and after discussion with Depot staff, in October 2016 the Council introduced restrictions on the taking of annual and long service leave between the first week of October until the last week in April the following year for those employees who were engaged over that period in our Construction Team. This did not, however, prevent such employees from taking holidays during the two week shut-down over the Christmas/New Year period when most quarries and other contractors were similarly shut down.” 4
[13] In his oral evidence, Mr Greenberger conceded that the introduction of this Policy had not been through consultation with employees. 5
[14] The changes were set out in a memo from Mr Greenberger to the relevant staff, however the memo does not actually mention the outer limits of the Leave Blackout Period:
“It has been brought to my attention, that the holiday arrangements for this upcoming construction season are unclear and that it would be beneficial to explain this further.
Over the summer period, the planned summer break for staff is for the two week shutdown over Christmas between 22 December 2016 and the 9 January 2017. This ensures that everyone gets a break over the summer period at the same time and when most quarries and other contractors are also on leave.
It is then essential to have all of our construction and sealing staff back to work, to maximise the amount of civil construction that can be achieved. This is our core work, and it simply cannot be undertaken during the wetter months of the year. We are also trying to be as efficient as is reasonably possible.
It is not practical for staff who are allocated into a civil work team, to take leave for a few weeks, where the position is then needed to be backfilled by another operator who hasn't had the background on the project.
Supervisors have been asked that any request for leave over the construction period outside the Christmas break not be approved unless there are exceptional circumstances.” 6
[15] Mr Hardy recollects that prior to October 2016 that if a depot worker wanted to work over the Christmas and New Year period they could request permission to do so from their supervisor, and that in fact he did do that because he preferred to take his holidays in the middle of January in order to go to the Narrawong Holiday Park with his family and that Mr Jones did so as well. 7 Mr Hardy’s evidence is that this had been his arrangement since about 2008, and Mr Jones’s evidence is that he had been going to the holiday park for about the last 10 years.8
[16] Both men were permitted and indeed took leave in mid-January in 2017. However, Mr Jones recollects having been told that while he was allowed to have that period in the forthcoming 2017 season “you’re allowed to have them this year but don’t rebook next year” and that he responded “that won’t be happening”. 9
[17] While Mr Hardy did not apply for leave in January 2018, Mr Jones did and in about October or November 2017 he applied for long service leave:
“Around October or November 2017, I applied to take long service leave in January 2018 for the Narrawong trip. I recall Trevor visiting the depot after this leave application to inform me that my leave has been approved. He then said to me something to the effect of:
This year we’ll approve it but next year we have to sit down and work something out.” 10
[18] The circumstances of both Mr Hardy and Mr Jones and their desire to take leave in January are somewhat similar as follows:
• Ashley Hardy
• Has a wife who works elsewhere and is able to obtain leave during January;
• Has three daughters, aged 8, 12 and 15; and
• His January holidays families main holiday and:
“23. My family has made friends with other families who are regular campers at Narrawong over the many years we have camped there. My family and I return there each year because it is a trusting and friendly environment where my family can have fun. My children would tell me throughout the year that they look forward to going Narrawong.
24. At Narrawong, I fish with my oldest daughter, something I enjoy doing with her but we do not usually get to do in a regular week.
25. We participate in scavenger hunts, kayak on the river, swim, colouring competitions, karaoke nights and catch up with friends we do not usually get to see throughout the year.” 11
• He draws a distinction as a low wage worker between his circumstances and those who may be higher paid:
“My wage from Council is about $57,000 per year. On occasion, I do overtime at Council or casual work as a shearer. My wife also works. On our modest income, we can afford to take my whole family on a holiday to Narrawong but we cannot afford overseas holidays to some place warm during the colder months.” 12
• Howard Jones
• Is also married and has two children 14 and 13; 13 and
• He views the January holiday as an important part of his family life:
“27. Since about 2008, my wife and I have taken our children camping at Narrawong every year. We usually stay there for two weeks in January. This is an annual holiday tradition for us. Many of my co-workers at Council know this, including Liam, Leah and Trevor.
28. At Narrawong, we swim, fish for snapper and whiting, ride bicycles, barbecue, play footy and cricket, and sing karaoke. We also visit the town of Portland, which is 15 minutes from Narrawong.
29. Narrawong hosts a lot of families who make staying there an annual tradition. Every year, my children look forward to seeing the other children who also camp at Narrawong once a year.
30. When I told my children that my request for leave in January 2019 had been rejected, they told me that they were very upset.” 14
[19] In October 2018 both men had a conversation with Mr Greenberger about their leave expectations over the coming summer period:
“On 9 October 2018 (following a period of 4 weeks' annual leave), I met with Hardy and Jones at the Macarthur Depot. During that meeting, I made it quite clear to them that they should comply with the leave restriction and if, despite those restrictions, they still intended to submit their leave applications for that period, then they should do so straight away so that any dispute with the Union could be addressed without delay. They thereafter proceeded to put in their respective leave applications for long service leave during the restricted period. Both leave applications were shortly thereafter refused by Liam Arnott, Works Supervisor.” 15
[20] Mr Hardy’s leave application, which is before the Commission, is dated 11 October 2018, seeks long service leave between 9 January 2019 and 23 January 2019, a total of 84.5 hours and was refused by his supervisor on 16 October 2018. Mr Jones’ leave application is not before the Commission, but is in similar terms, seeking long service leave between 13 and 28 January 2019. Mr Jones had been under the impression that the Council could not refuse his application for long service leave, which explains why he applied for long service leave. 16 In his oral evidence Mr Hardy conceded that he had made an application for long service leave because he knew that Mr Jones had had an application for long service leave approved for time away from work in January 2018.
[21] Both Mr Hardy and Mr Jones gave evidence that bookings at the holiday park had to be made a year in advance and that a failure to renew the booking would mean that they would go to the bottom of the queue if they wanted to return for holidays at a later time reducing the likelihood that they would be successful in booking in future. While Mr Hardy had not been to the holiday park in 2018 his booking had been taken by some friends, but still under his name, so he was still eligible to make a rebooking for 2019. Both then made a 2019 booking in early 2018, paid a small deposit at the time to secure the booking and then made progress payments for the booking as 2018 proceeded. Mr Jones evidence was that the last payment was in September, predating his leave application.
[22] Mr Greenberger’s evidence about the reasons for the introduction of the Leave Blackout Period, as well as its duration of seven months includes:
“4. The rationale for introducing these leave restrictions were and are as follows:
(a) The climatic conditions in the South West of Victoria restrict the window of time that construction and sealing works can be completed. Sealing in particular needs to be completed in dry weather with reasonably high ambient temperature, hence the need to have as many people working during that period as possible.
(b) The sealing crew is one of only a few operated by Councils in Victoria. They complete work on behalf of the Council and also contract work to neighbouring Councils and VicRoads. The income from the external works ensures we can maintain the current levels of employees.
(c) The sealing crew (consisting of about 12-14 staff) do sometimes have to work ROO's or overtime to ensure works are completed in appropriate weather conditions. This boosts their income, which means the sealing crew is an attractive option for most staff.
(d) Construction and sealing works are reasonably high risk works and involve a lot of heavy machinery such as trucks, graders, backhoes and tractors. It is important that teams performing these functions are familiar with the work site and equipment being used. If staff were on leave on a regular basis, this would lead to different people being on site on different days and having to be inducted to the site. This would be inefficient and increase the risk on the worksites.
(e) Many projects were not being completed within the estimated timeline and on budget under the previous leave regime. However, since the leave restrictions were introduced, efficiency of the work teams has increased markedly, with most projects now being completed within the estimated timelines and on budget.
(d) If Council was to allow someone to take leave (e.g. a truck driver), then someone else would need to drive their truck which would, in tum, mean that someone else would need to fill in for that person, and so on. This does sometimes have to happen due to injury or sickness, so having people take leave during the construction season would worsen this problem. It would essentially mean that we would have expensive plant sitting idle for weeks at a time.
(g) It is important to note that during the restriction period staff still generally work a 9 day fortnight, have 2 weeks off at Christmas and a 5 day break at Easter.” 17
RELEVANT PRINCIPLES FOR DETERMINATION OF THE DISPUTE
[23] In dealing with a dispute such as this the Commission is not undertaking an exercise of judicial power but is instead exercising a power of private arbitration, with that power deriving from the parties’ agreement to submit their differences for decision by a third party. The resultant arbitrator’s award is not binding of its own force but instead its effect depends on the law which operates with respect to it. 18 It is accepted that while not exercising judicial power, the Commission “may legitimately form and act upon opinions about legal rights and obligations as a step in the exercise of its own functions and powers”.19
[24] The Commission is required to examine whether an enterprise agreement’s dispute settlement procedure “requires or allows” the Commission to deal with the dispute. In order to do so, it is necessary to look at the text of the dispute settlement procedure, understood in light of its industrial context and purpose, to determine whether the dispute, properly characterised, falls within it. 20 The scope of a dispute settlement procedure in an enterprise agreement should not be narrowly construed; “to do so would be contrary to the notion that certified agreements are intended to facilitate the harmonious working relationship of the parties during the operation of the agreement.”21
[25] In characterising the nature of a dispute the Commission is not confined to the application filed to deal with the dispute. 22 The entire factual background is relevant, and may be ascertained from the submissions advanced by the parties on the question of jurisdiction.23 Further, a dispute may evolve during proceedings in the Commission. It may therefore be necessary in some cases when ascertaining the character of a dispute to have regard to both the nature of the dispute alleged in an originating application and the factual circumstances as they evolve.24 The character of the dispute is distinguishable from any relief which may be sought, or granted, following an arbitration of the dispute.25 However, the relief sought may cast light on the true nature of the dispute in some cases.26
[26] If the Commission has jurisdiction to deal with the dispute, the nature of the relief that the Commission may grant will depend on the limitation in s.739(5) 27 and the agreement of the parties as recorded in their enterprise agreement, provided that such relief is reasonably incidental to the application of the enterprise agreement to which the dispute relates.28
[27] This matter involves both the construction of legislation as well as of an enterprise agreement.
[28] The High Court has said following about the task of statutory interpretation in Project Blue Sky v Australian Broadcasting Authority (Project Blue Sky);
“69. The primary object of statutory construction is to construe the relevant provision so that it is consistent with the language and purpose of all the provisions of the statute. The meaning of the provision must be determined "by reference to the language of the instrument viewed as a whole". In Commissioner for Railways (NSW) v Agalianos, Dixon CJ pointed out that "the context, the general purpose and policy of a provision and its consistency and fairness are surer guides to its meaning than the logic with which it is constructed". Thus, the process of construction must always begin by examining the context of the provision that is being construed.
70. A legislative instrument must be construed on the prima facie basis that its provisions are intended to give effect to harmonious goals. Where conflict appears to arise from the language of particular provisions, the conflict must be alleviated, so far as possible, by adjusting the meaning of the competing provisions to achieve that result which will best give effect to the purpose and language of those provisions while maintaining the unity of all the statutory provisions. Reconciling conflicting provisions will often require the court "to determine which is the leading provision and which the subordinate provision, and which must give way to the other". Only by determining the hierarchy of the provisions will it be possible in many cases to give each provision the meaning which best gives effect to its purpose and language while maintaining the unity of the statutory scheme.
71. Furthermore, a court construing a statutory provision must strive to give meaning to every word of the provision. In The Commonwealth v Baume Griffith CJ cited R v Berchet to support the proposition that it was "a known rule in the interpretation of Statutes that such a sense is to be made upon the whole as that no clause, sentence, or word shall prove superfluous, void, or insignificant, if by any other construction they may all be made useful and pertinent".” 29
[29] Interpretation of an enterprise agreement requires construction of the words of the instrument, with the Full Bench in Automotive, Food, Metals, Engineering, Printing and Kindred Industries Union’ known as the Australian Manufacturing Workers Union (AMWU) v Berri Pty Limited 30 (Berri) setting out the principles for such a task. In that matter, and after an extensive analysis of the subject, the Full Bench summarised the principles to be applied in the following way:
“[114] The principles relevant to the task of construing a single enterprise agreement may be summarised as follows:
1. The construction of an enterprise agreement, like that of a statute or contract, begins with a consideration of the ordinary meaning of the relevant words. The resolution of a disputed construction of an agreement will turn on the language of the agreement having regard to its context and purpose. Context might appear from:
(i) the text of the agreement viewed as a whole;
(ii) the disputed provision’s place and arrangement in the agreement;
(iii) the legislative context under which the agreement was made and in which it operates.
2. The task of interpreting an agreement does not involve rewriting the agreement to achieve what might be regarded as a fair or just outcome. The task is always one of interpreting the agreement produced by parties.
3. The common intention of the parties is sought to be identified objectively, that is by reference to that which a reasonable person would understand by the language the parties have used to express their agreement, without regard to the subjective intentions or expectations of the parties.
4. The fact that the instrument being construed is an enterprise agreement made pursuant to Part 2-4 of the FW Act is itself an important contextual consideration. It may be inferred that such agreements are intended to establish binding obligations.
5. The FW Act does not speak in terms of the ‘parties’ to enterprise agreements made pursuant to Part 2-4 agreements, rather it refers to the persons and organisations who are ‘covered by’ such agreements. Relevantly s.172(2)(a) provides that an employer may make an enterprise agreement ‘with the employees who are employed at the time the agreement is made and who will be covered by the agreement’. Section 182(1) provides that an agreement is ‘made’ if the employees to be covered by the agreement ‘have been asked to approve the agreement and a majority of those employees who cast a valid vote approve the agreement’. This is so because an enterprise agreement is ‘made’ when a majority of the employees asked to approve the agreement cast a valid vote to approve the agreement.
6. Enterprise agreements are not instruments to which the Acts Interpretation Act 1901 (Cth) applies, however the modes of textual analysis developed in the general law may assist in the interpretation of enterprise agreements. An overly technical approach to interpretation should be avoided and consequently some general principles of statutory construction may have less force in the context of construing an enterprise agreement.
7. In construing an enterprise agreement it is first necessary to determine whether an agreement has a plain meaning or it is ambiguous or susceptible of more than one meaning.
8. Regard may be had to evidence of surrounding circumstances to assist in determining whether an ambiguity exists.
9. If the agreement has a plain meaning, evidence of the surrounding circumstances will not be admitted to contradict the plain language of the agreement.
10. If the language of the agreement is ambiguous or susceptible of more than one meaning then evidence of the surrounding circumstance will be admissible to aide the interpretation of the agreement.
11. The admissibility of evidence of the surrounding circumstances is limited to evidence tending to establish objective background facts which were known to both parties which inform and the subject matter of the agreement. Evidence of such objective facts is to be distinguished from evidence of the subjective intentions of the parties, such as statements and actions of the parties which are reflective of their actual intentions and expectations.
12. Evidence of objective background facts will include:
(i) evidence of prior negotiations to the extent that the negotiations tend to establish objective background facts known to all parties and the subject matter of the agreement;
(ii) notorious facts of which knowledge is to be presumed; and
(iii) evidence of matters in common contemplation and constituting a common assumption.
13. The diversity of interests involved in the negotiation and making of enterprise agreements (see point 4 above) warrants the adoption of a cautious approach to the admission and reliance upon the evidence of prior negotiations and the positions advanced during the negotiation process. Evidence as to what the employees covered by the agreement were told (either during the course of the negotiations or pursuant to s.180(5) of the FW Act) may be of more assistance than evidence of the bargaining positions taken by the employer or a bargaining representative during the negotiation of the agreement.
14. Admissible extrinsic material may be used to aid the interpretation of a provision in an enterprise agreement with a disputed meaning, but it cannot be used to disregard or rewrite the provision in order to give effect to an externally derived conception of what the parties’ intention or purpose was.
15. In the industrial context it has been accepted that, in some circumstances, subsequent conduct may be relevant to the interpretation of an industrial instrument. But such post-agreement conduct must be such as to show that there has been a meeting of minds, a consensus. Post-agreement conduct which amounts to little more than the absence of a complaint or common inadvertence is insufficient to establish a common understanding.” 31
[30] The application of these principles, and especially to those in which ambiguity may be considered was further considered by the Full Bench in United Firefighters Union of Australia v Emergency Services Telecommunications Authority:
“[35] As stipulated in Berri, the starting point for interpreting an enterprise agreement is to have regard to the ordinary meaning of the words used. Further, the text must be interpreted in the context of the agreement as a whole. Principles 7 and 10 elicited in Berri emphasise that ambiguity in a provision within an enterprise agreement must be identified before one is to have regard to evidence of the surrounding circumstances. However, principle 8 makes it clear that, in determining whether ambiguity exists, one may have regard to evidence of the surrounding circumstances. That is, such evidence can be used to identify and resolve any ambiguity.” 32
RELEVANT AGREEMENT PROVISIONS
[31] The alleged dispute before the Commission is brought forward under Part A, clause 11.1 of the 2016 Agreement, which enables disputes to be agitated if one “arises about this agreement, the NES or any other work-related matter (including a dispute about whether a workplace rights (sic) has been breached) … This includes a dispute or grievance about whether an employer had reasonable grounds to refuse a request for flexible working conditions or an application to extend unpaid parental leave”.
[32] Part A, Clause 1.3 deals with the relationship between the 2016 Agreement and the National Employment Standards (NES), as well as Part B of the Agreement:
“1.3 Relationship to Parent Awards & Other Agreements
a) This Agreement replaces the Moyne Shire Council Enterprise Agreement No. 7
2013.
b) The National Employment Standards (NES) will be read in conjunction with this Agreement. Where there are matters in the NES which are not specifically included in this agreement then they shall apply to all employees covered by this agreement. Where the NES provide entitlements to employees which are more beneficial than those provided for in this Agreement then the provisions of the NES shall apply to the extent of any inconsistency. No aspect of the NES will be reduced by this agreement.
c) In relation to employees whose employment would have been covered by the Victorian Local Authorities Award 2001 as if it had continued to apply after its termination on 20 July 2015, the provisions of Part A shall be read and applied in conjunction with the provisions of Part B. To avoid doubt, this includes employees that were employed on and after 20 July 2015. Where there is any inconsistency between Part A and Part B, the provisions of Part A shall prevail.
d) In relation to employees whose employment would have been covered by the Nurses (ANF Victorian Local Government) Award 2002 as if it had continued to apply after its termination on 20 July 2015, the provisions of Part A shall be read and applied in conjunction with the provisions of Part C. To avoid doubt, this includes employees that were employed on and after July 2015. Where there is any inconsistency between Part A and Part C, the provisions of Part A shall prevail.”
[33] It is to be noted that Part B has somewhat limited effect, applying only to the class of employee set out in Part A, Clause 1.3(c).
[34] The only relevant provision of the 2016 Agreement dealing with determination of applications for annual leave is in Part B, Clause 41.5:
“41.5 Leave to be taken
41.5.1 Annual leave will be given and taken in such period or periods and at such a time or at such times mutually convenient to the employer and the employee and (except as hereinafter provided) not more than twelve months after the right to the leave accrued.
41.5.1 Deleted
41.5.3 Subject to 41.7 of this clause, payment will not be made or taken in lieu of annual leave.”
[35] Matters of long service leave are dealt with in Part A, Clause 8.3 which provides the general entitlement in Part B, Clause 38:
“8.3 Return to Work after Parental Leave
a) Employees on Parental Leave shall be entitled to return to the organisation to the position which was held immediately before the commencement of leave. Where such position no longer exists but there are other positions available that the employee is qualified for or capable of performing, she/he shall be entitled to a position as nearly comparable in status and pay to that of her/his former position.
b) Employees on Parental Leave shall provide written notice of their intention to return to work at least 10 weeks' prior to their expected return to work date.
c) An employee may apply to their relevant manager to return to work on a part-time basis. Requests must be submitted at least 10 weeks' prior to the employee's expected date of return. Approval for such a request will not be unreasonably withheld.”
38. LONG SERVICE LEAVE
Employees covered by this award will be entitled to long service leave in accordance with the provisions of the long service leave regulations made in respect of the requirements of the (Victorian) Local Government Act 1989 or the (Victorian) Water Act 1989 as appropriate.
[36] The Local Government (Long Service Leave Regulations 2012 (Vic) (the LSL Regulations) provide the following about when leave may be taken:
“17 When leave can be taken
A member may take all or part of his or her long service leave entitlement at any time which is mutually acceptable to the member and the Council.”
[37] As referred to within the body of the 2016 Agreement, long service leave is to be determined in accordance with the obligations of the Victorian Local Government (Long Service Leave Regulations 2012 (the LSL Regulations). The regulations are made under the Local Government Act 1989 (Vic) and construction of the Regulations is to be to be assisted by the Interpretation of Legislation Act 1984 (Vic), with the ASU submitting that:
“26. Section 35(a) of the Interpretation of Legislation Act 1984 (Vic) mandates a purposive interpretation of subordinate legislation such as the LG LSL Regs. Section 35(a) provides that:
In the interpretation of a provision of an Act or subordinate instrument—
(a) a construction that would promote the purpose or object underlying the Act or subordinate instrument (whether or not that purpose or object is expressly stated in the Act or subordinate instrument) shall be preferred to a construction that would not promote that purpose or object;…”
[38] Since the NES also has application to decisions about annual leave, it is to be noted that s.88(2) of the Act is in the following terms:
“Accrual of leave
(2) An employee’s entitlement to paid annual leave accrues progressively during a year of service according to the employee’s ordinary hours of work, and accumulates from year to year.
Note: If an employee’s employment ends during what would otherwise have been a year of service, the employee accrues paid annual leave up to when the employment ends.”
[39] For reasons relevant to matters considered below, it is noted that while parts of the Victorian Local Authorities Award 2001 are incorporated into the 2016 Agreement, the terms of the Local Government Industry Award 2010 are not incorporated.
CONSIDERATION
[40] As set out in the questions for determination, two matters require consideration by the Commission; namely, whether the restricted leave arrangements are unreasonable or a contravention of the 206 Agreement; and whether it was unreasonable or a contravention of the 2016 Agreement to refuse Mr Hardy and Mr Bond’s application for leave.
[41] As referred to at the commencement of these reasons for decision, the ASU submitted in a supplementary submission that there should be a departure from the first of the questions identified by me as the relevant questions for determination in the course of the hearing. In particular instead of posing a question of whether the relevant Council action was “unreasonable or a contravention of the enterprise agreement”, the ASU submitted in its supplementary submission that the first of the questions should be amended as follows;
“Are the Council’s restricted leave arrangements applicable to staff in its Sealing or Construction Teams unreasonable and/or inconsistent with the Enterprise Agreement, FW Act and LG LSL Regs?”
[42] The Commission’s powers in relation to the determination of an alleged dispute pursuant to s.739 are those conferred upon it within the enterprise agreement or the FW Act. The question as posed to the parties in the course of the hearing, and accepted by the ASU at that time, is sufficiently expansive for the subject matter about which the ASU is concerned to be dealt with in this decision. There is no difference for practical effect, at least as may be answered on the basis of the evidence presently before the Commission, between the formulations of the question. Accordingly, the Commission does not propose to move from the questions identified in the hearing.
The restricted leave arrangements
[43] As set out earlier, the Moyne Shire Council initially promulgated the Restricted Leave Arrangements Policy to employees in October 2016 with employees being informed that, other than for a shutdown over the Christmas/New Year period each year that leave would be restricted because it was “essential to have all of our construction and sealing staff back to work, to maximise the amount of civil construction that can be achieved”. Supervisors had “been asked that any request for leave over the construction period outside the Christmas break not be approved unless there are exceptional circumstances”. 33 Construction Team employees were also told at around the same time that this meant that leave would be restricted “between the first week of October until the last week in April the following year”.34 This policy was confirmed in October 2018 with the construction period “being defined as from the first week of October through to the end of April”.35
[44] The Respondent submitted that in no respect was the policy adopted by the Council in contravention of either the 2016 Agreement or, for the reason that the legislated terms are incorporated within the Agreement, the NES, insofar as the standard refers to applications for annual leave.
[45] In respect of long service leave, the Respondent argued that there is no prohibition within the 2016 Agreement on the adoption of policies surrounding the taking of long service leave, with the LSL regulations merely requiring that leave be taken “at any time which is mutually acceptable”. By extension it is understood this is to be an argument that a policy or intimation to the effect that the summer period is not a period that would be mutually acceptable to the Council does not infringe the Agreement.
[46] A similar perspective emerges from the Respondent’s submissions in respect of annual leave applications. The Council argues that the 2016 Agreement does not specifically deal with the subject of policies or restrictions on when leave may be taken. Part A of the 2016 Agreement does not deal with annual leave. Part B, which has limited effect as set out above, deals with annual leave only in clause 41 and then, in relation to when leave is to be taken provides in clause 41.5.1 that it is to be given and taken “at such a time or at such times mutually convenient to the employer and the employee and (except as hereinafter provided) not more than 12 months after the right to the leave accrued”.
[47] While consideration of the respective provisions of the 2016 Agreement, the FW Act and the LSL Regulations does not lead to the conclusion that there is any provision which restricts the formulation of a policy by the Council for the taking of leave, provided that other relevant requirements of the 2016 Agreement have been complied with, a more detailed consideration is required in respect of the policy dealing with applications for annual leave.
[48] Section 88(2) of the FW Act, which deals with the taking of paid annual leave requires that leave be taken for a period agreed between an employee and employer and that the employer must not unreasonably refuse to agree to a request by the employee to take paid annual leave.
[49] The 2016 Agreement provides that the NES, which includes s.88 of the FW Act, be read in conjunction with the Agreement.
[50] In resolving the question about the status of the Restricted Leave Arrangements Policy consideration needs to first be given to a question of whether there is an inconsistency between the NES and the 2016 Agreement and, if any, to what extent.
[51] As referred to above, the reasoning confirmed in Project Blue Sky requires that the task of statutory construction proceed by construing the relevant provision so that it is consistent with the language and purpose of all the provisions of the statute; forming a construction on the prima facie basis that the legislative provisions are intended to give effect to harmonious goals; and proceeding with a construction that strives to give meaning to every word of the provision.
[52] The relevant section, s.88 of the FW Act, is within Part 2 – 2, Division 6 of the FW Act dealing with the National Employment Standard for annual leave. The division sets out who it applies to, namely employees other than casual employees; establishes a quantitative entitlement to annual leave and how that accrues; provides for how annual leave is to be taken; deals with the circumstance in which employees are not to be regarded to be on annual leave; sets out how leave is to be paid; what occurs to situations in which there is a transfer of employment; and establishes a basic rule that there not be cashing out of paid annual leave except in accordance with terms in a modern award or enterprise agreement or in certain circumstances for a an award/agreement free employee.
[53] The Division is subject to the rules established in s.55 for the interaction between the NES and a modern award or enterprise agreement. That section provides that while an enterprise agreement must not exclude the NES, it may include terms expressly permitted by the part or regulations made under the part and:
“Ancillary and supplementary terms may be included
(4) A modern award or enterprise agreement may also include the following kinds of terms:
(a) terms that are ancillary or incidental to the operation of an entitlement of an employee under the National Employment Standards;
(b) terms that supplement the National Employment Standards;
but only to the extent that the effect of those terms is not detrimental to an employee in any respect, when compared to the National Employment Standards.
Note 1: Ancillary or incidental terms permitted by paragraph (a) include (for example) terms:
(a) under which, instead of taking paid annual leave at the rate of pay required by section 90, an employee may take twice as much leave at half that rate of pay; or
(b) that specify when payment under section 90 for paid annual leave must be made.
Note 2: Supplementary terms permitted by paragraph (b) include (for example) terms:
(a) that increase the amount of paid annual leave to which an employee is entitled beyond the number of weeks that applies under section 87; or
(b) that provide for an employee to be paid for taking a period of paid annual leave or paid/personal carer’s leave at a rate of pay that is higher than the employee’s base rate of pay (which is the rate required by sections 90 and 99).
Note 3: Terms that would not be permitted by paragraph (a) or (b) include (for example) terms requiring an employee to give more notice of the taking of unpaid parental leave than is required by section 74.”
[54] The Explanatory Memorandum tabled in Parliament at the same time as the Bill which led to the FW Act does not extensively deal with the subject of the meaning of the annual leave provisions and provides no particular guidance in respect of s.88(2) however, relevantly provides in relation to the division as a whole that:
“361. This Division establishes a minimum entitlement to annual leave for employees.” 36
[55] Further the Explanatory Memorandum provides some limited guidance about the meaning of the provisions within s.55 (4), again as follows:
“213. A modern award or enterprise agreement can also include:
• terms that are incidental or ancillary to the operation of NES entitlements; and
• terms that supplement NES entitlements, provided that the effect of those terms is not detrimental to an employee in any respect compared to the NES (subclause 55(4)).
214. This provision allows modern awards and enterprise agreements to deal with machinery issues (such as when payment for leave must be made). It also allows awards to provide more beneficial entitlements than the minimum standards provided by the NES. For example, an award or agreement could provide for more beneficial payment arrangements for periods of leave, or provide redundancy entitlements to employees of small business employers. Similarly, an agreement could provide a right to flexible working arrangements. The term about a dispute settlement procedure would also apply to that right.
215. A term permitted by subclause 55(4) does not contravene subclause 55(1) (subclause 55(5)).
216. A legislative note to this section points readers to the approval requirements for enterprise agreements, and notes that an enterprise agreement term that contravenes this section must not be approved (see clause 186).
217. Clause 56provides that if a modern award term or enterprise agreement term contravenes clause 55 it will have no effect.” 37
[56] Although it is the case that the 2016 Agreement does not specifically deal with the subject matter of restrictions, policies or procedures associated with the taking of annual leave it does, at least to the extent set out in Part B, Clause 41.5.1, establish several rights and obligations in respect of the taking of leave as follows:
• the period of leave to be taken is to be mutually convenient;
• the times of taking leave is also to be mutually convenient; and
• the leave to be taken is to be not more than 12 months after the right to the leave accrued.
[57] As already indicated, s.88 of the FW Act provides the rights that paid annual leave may be taken for a period agreed between the parties as well as that there is not to be an unreasonable refusal to agree to a request to take paid annual leave.
[58] Quite obviously, the FW Act and the 2016 Agreement employ different terms; the Act refers to “leave … taken for a period agreed” and the Agreement refers to “leave … at such times mutually convenient”. I am satisfied within the overall language employed both within the Act as well as the 2016 Agreement that the use of different terms does not especially lead to the conclusion that the use of those terms mean different things.
[59] That is, within the context in which there is to be minimum of four weeks paid annual leave for employees each year, with the scheme established by the Act being a minimum entitlement, it is unlikely that the legislature meant anything different from an expectation that the times and the amounts of leave to be taken are to be determined through matters of mutual agreement or mutual convenience, so far as that is possible to be achieved.
[60] The FW Act however does provide an additional, but not inconsistent, right to that expressed within the 2016 Agreement, to the effect that there must not be an unreasonable refusal of agreement to a request for annual leave.
[61] For its part the 2016 Agreement’s provision to the effect that leave is to be taken at a mutually convenient time “not more than 12 months after the right to leave accrued” is an additional right to that which is in the NES, as well as being neither inconsistent with any part of the NES nor capable of being found to be an ancillary or incidental matter to the operation of an NES entitlement in the manner envisaged in s.55(4) of the FW Act. The possibility that an employer be required to provide leave no more than 12 months after the rights leave has accrued and the concomitant right for the employee to take leave within that period after its accrual is plainly something which is not detrimental to an employee in any respect when compared to the NES, with the provision also being capable of being viewed as an ancillary, incidental or supplementary term.
[62] As a result, my findings in respect of the operation of the 2016 Agreement and its interaction with the FW Act are that the obligation within the agreement for leave to be taken at times mutually convenient is not inconsistent with the obligation in the FW Act that leave is to be taken for a period agreed between the parties; that the FW Act’s obligation that an employer must not unreasonably refuse to agree to a request is something provided in addition to not inconsistently with the provisions of the Agreement; and that the 2016 Agreement’s obligation that leave be at a time mutually convenient not more than 12 months after the right to leave has accrued is something which is not inconsistent with the NES but ancillary, incidental or supplementary to it.
[63] The Respondent argues that the NES obligation to the effect that an annual leave application must not be unreasonably refused is not operative until such time as an employee makes a leave application to their employer. Following from this argument is the proposition that the employer’s policies in respect of the taking of leave are not inconsistent with the NES. At the point the Restricted Leave Arrangements Policy may have been made or amended the employer was not being asked to approve an actual application for annual leave.
[64] While that observation is accurate insofar as the NES is concerned, it overlooks the second part of the 2016 Agreement’s requirement that leave “be given and taken in such period or periods and at such a time or at such times mutually convenient to the employer and the employee and (except as hereinafter provided) not more than 12 months after the right to the leave accrued”. That provision, set out as it is within Part B of the agreement came originally from the Victorian Local Authorities Award 2001. There is no evidence before me about the circumstances in which the provision was incorporated into the award. A determination of the meaning of the provision is therefore to be derived only from the ordinary and grammatical meaning of the words it contains.
[65] The context of the provision within the annual leave clause or the wider Part does not appear to materially affect what would otherwise be its ordinary and grammatical meaning; namely that an employee and employer may agree to the time at which accrued leave is to be taken, but failing mutual agreement, the leave is to be taken in the 12 months following its accrual. When clause 41.5.1 says that annual leave is to be taken at times “mutually convenient … and … not more than 12 months after the right to the leave accrued” the stipulation about the timeframe for the taking of leave clearly acts as a constraint upon either parties’ independent formation of views of convenience, with the likely expectation that, at some point at which ascertainment of mutual convenience is exhausted one party or the other can simply require that leave is taken because to do otherwise would mean that the leave is not taken within 12 months of the date upon which accrued.
[66] As is evident from the face of the clause, a conjunction is ostensibly made between the leave being at mutually convenient times and within 12 months of its accrual. Within the overall context of the clause, it appears unlikely that the conjunction is intended to operate to mean that annual leave must always be taken within 12 months of its accrual and that the parties are unable to agree on alternative arrangements. The proper way to construe the sentence would be to accept that the primary intent is for employers and employees to agree on when leave is to be taken and that failing such agreement the leave is to be within 12 months of its accrual.
[67] As an example, perhaps the thought that leave must be taken within 12 months of its accrual may well lead to an agreement between the parties about when the leave may actually be taken; that is faced with the obligation to take the leave in 2019 which is inconvenient to neither one of us we may be better placed to agree that the leave could instead be taken in the first quarter of 2020. Although 2020 may be inconvenient to us both, the thought of the alternative of having to take the leave in 2019 may mean that leave in 2020 is less inconvenient and agreement may be reached.
[68] The Restricted Leave Arrangements Policy is not necessarily inconsistent with this construction however the operation of the policy would be questionable to the extent that the policy inhibited the taking of annual leave within 12 months after its accrual. A policy which confines the taking of leave to five months of the year is far less likely to be consistent with the Part B obligation than one which has a far less restrictive leave blackout period.
[69] The evidence about the Policy is that it was promulgated by the Council without consultation when there plainly should have been consultation given that restrictions on the taking of leave or the requirement that employees take leave at a certain time of the year are unquestionably things which have significant effects upon employees and their families. The present enterprise agreement, which commenced operation on 28 April 2017, after the implementation of the Policy by the Council in 2016, requires in clause 6.6 that there be a notification of matters where the Council is “seriously considering introducing major changes in production, program, organisation, structure or technology that are likely to have significant effects on employees.” Significant effects are defined in the way set out below as indeed is the obligation of the Council to discuss change:
“6.6 Introduction of Change
Consultation regarding major workplace change
6.6.1. Employer to Notify
a) Where an employer is seriously considering introducing major changes in production, program, organisation, structure or technology that are likely to have significant effects on employees, Moyne Shire Council must notify the union, employees who may be affected by the proposed changes and their representatives.
b) Significant effects include termination of employment, major changes in the composition, operation or size of Mayne Shire Council's workforce or in the skills required; the elimination or diminution of job opportunities, promotion opportunities or job tenure; the alteration of hours of work; proposed changes to rostering; the need for retraining or transfer of employees to other work or locations and the restructuring of jobs; changes to the legal or operational structure of Moyne Shire Council or business; changes in technology; outsourcing.
6.6.2 Employer to discuss change
a) As soon as practicable Moyne Shire Council must discuss with the union and relevant employees affected and their representatives:
(i) the introduction of the changes referred to in clause 6.6.1,
(ii) the effects the changes are likely to have on employees,
(iii) measures to avert or mitigate the adverse effects of such changes on employees,
(iv) and must give prompt consideration to matters raised by the employees and/or their representatives in relation to the changes.
b) As soon as a final decision has been made, Moyne Shire Council must notify the union and the employees affected in writing, and explain the effects of the decision.
c) For the purpose of such discussion, Mayne Shire Council must provide in writing to the employees concerned and their representatives all relevant information about the changes including the nature of the changes proposed; the expected effects of the changes on employees and any other matters likely to affect employees.
d) Moyne Shire Council must act in good faith in relation to the consultation process provided in this clause.
e) In this clause:
'Good faith' includes obligations to meet, disclose relevant information, genuinely consider proposals and respond with reasons, and to refrain from capricious or unfair conduct that undermines consultation.”
[70] While the present 2016 Agreement commenced operation after the first version of the policy was announced and before the 2018 clarification, the Moyne Shire Council Enterprise Agreement No.7 2013 38 was in operation and contained the same provisions.
[71] The failure to consult on the subject is also a failure by the Council to comply with the matters set out in clause 2.1 of the present and former agreements which commit the Council to operate in accordance with best practice, including in relation to its workings with employees, since best practice improvement to the involvement of employees in operational decision-making would surely include consultation about basic entitlements, such as leave. The relevant provisions is in these terms:
“2.1 Aim of Agreement
a) The parties recognise that the Council needs to continually improve its efficiency and effectiveness through a program of continuous improvement, which achieves "best practice".
b) Municipal "best practice" involves continuous improvements to the following and includes the review of work practices that will improve: -
(i) efficiency and effectiveness and eliminate waste;
(ii) quality of service provision;
(iii) the customer focus of the organisation;
(iv) the competitiveness of the organisation;
(v) the job satisfaction and career opportunities for employees;
(vi) the involvement of employees in the operational decision-making processes of the organisation.
c) A key objective of the Moyne approach of "best practice" is to ensure that each work area within the Council;
(i) is more efficient and more cost effective than any other provider of a comparable service; and
(ii) is capable of providing the service more efficiently and more cost effectively than any current or potential contractor with which the Council may be involved.
d) This Agreement aims to secure lasting benefits for the community and employees.
The outcomes must deliver initiatives to improve the quality, productivity and efficiency of the Council's services”
[72] Because of these reasons I am unable to find that the policy as presently stipulated has been formed in accordance with the operative enterprise agreement and is something which may be relied upon by the Council in its decision-making into the future. If the Moyne Shire Council wants a policy restricting when leave may be taken in its Construction Team, then given the obligations within the enterprise agreement for consultation and the operation of the Council in accordance with principles of best practice, there should be formal consultation with employees about a policy which endeavours to not only grapple with the Council’s works program expectations, but those of its employees about when leave may be taken etc, as well as the positive obligation within the 2016 Agreement to the effect that leave is to be taken at times “mutually convenient … and … not more than 12 months after the right to the leave accrued”.
[73] I therefore answer the first of the questions before the Commission in the affirmative;
Q1: Are the Council’s restricted leave arrangements applicable to staff in its construction team unreasonable or a contravention of the enterprise agreement?
A: Yes. Implementation of the restricted leave arrangements policy was not undertaken in a manner consistent with the consultation requirements of the enterprise agreement.
The leave applications
[74] Is the Council’s refusal of the applications for long service leave made by Ashley Hardy and/or Howard Jones in October 2018 unreasonable?
[75] Factually both Mr Jones and Mr Hardy made applications for long service leave in the dates in question. While that is so, in its closing submissions, the ASU argued that in some respects the form of leave applied for matters not when it comes to the decision to be made, with the Moyne Shire Council argued against that proposition. Respectfully the ASU’s argument is not one that can be applied, since the invitation to the employer at the relevant time to make a decision was an invitation to approve the leave application pursuant to its obligations in respect of long service leave. There is no evidence before me that either of the two men had a mistaken apprehension about the form of leave they were applying for; in fact each specifically gave evidence that they were applying for long service leave because they thought it would be more easily approved by the Council. While the matter is therefore to be determined in accordance with the 2016 Agreement’s obligations in respect of long service leave, it perhaps could be noted that the outcome would not be especially different if it was determined pursuant to the Council’s annual leave obligations.
[76] However, the fact of the matter is that the leave applications were for long service leave. It is abundantly clear from the evidence before the Commission that leave of Mr Jones and Mr Hardy in January is not at a time “mutually acceptable” with the Council, which is the test in the LSL Regulations at r.17. To the extent that such casts an obligation on the Council to have not unreasonably formed its views about what is a mutually acceptable time for long service leave, I rely on my analysis below of Mr Greenberger’s evidence about summer leave, and conclude from that the Council’s refusal of the leave in January was not unreasonable.
[77] The ASU argued, albeit in relation to the annual leave approval obligations, but pertinent to its reasoning in relation to long service leave applications as well, that the Commission had accepted in an unfair dismissal matter involving questions of leave approval that certain factors should be taken into account in assessing whether the leave application had been unreasonably refused:
“19. In Stevens v Horsley Park Supermarket Pty Ltd [2017] FWC 4626, Cambridge C stated:
[47] It is clear from s. 88 (2) of the Act that an employer must not unreasonably refuse to agree to a request by an employee to take paid annual leave. Whether there has been an unreasonable refusal to agree to a request to take paid annual leave is a matter that involves careful assessment of all of the particular circumstances of each case. Matters such as the nature and size of the employer’s business operation, and the period of notice provided for any requested leave, are matters of significance in any assessment of whether a refusal to agree to leave was unreasonable.
[48] Small and medium size businesses who have fewer employees would ordinarily experience greater difficulty making arrangements to cover for the work of employees who are absent on leave. In addition, certain business operations have particular periods of high demand or activity during which leave requests would not usually be approved. A decision to refuse a request for annual leave which is based upon genuine, sound business reasons would not usually be held to be unreasonable.”
[78] It was also argued that the provisions of s.93(3) of the FW Act which deals with matters associated with the terms of modern awards and enterprise agreements relating to a requirement by an employee or employer to take leave, as well as the Explanatory Memorandum relating to that section may provide guidance to the Commission in assessing whether there had been an unreasonable refusal of leave. The relevant extracts are as follows:
“93 Modern awards and enterprise agreements may include terms relating to cashing out and taking paid annual leave
…
Terms about requirements to take paid annual leave
(3) A modern award or enterprise agreement may include terms requiring an employee, or allowing for an employee to be required, to take paid annual leave in particular circumstances, but only if the requirement is reasonable.
...” 39
“381. Subclause 93(3) permits terms to be included in an award or agreement that require an employee, or that enable an employer to require or direct an employee, to take paid annual leave in particular circumstances, but only if the requirement is reasonable. This may include the employer requiring an employee to take a period of annual leave to reduce the employee’s excessive level of accrual or if the employer decides to shut down the workplace over the Christmas/New Year period.
382. In assessing the reasonableness of a requirement or direction under this subclause it is envisaged that the following are all relevant considerations:
• the needs of both the employee and the employer’s business;
• any agreed arrangement with the employee;
• the custom and practice in the business;
• the timing of the requirement or direction to take leave; and
• the reasonableness of the period of notice given to the employee to take leave.” 40
[79] While the ASU accepted that the provisions were not directly relevant to the conclusion of the matters before the Commission, it is submitted that principles of construction requiring consideration of the instrument as a whole should lead to a consideration of these matters.
[80] At the conclusion of the hearing, the Commission drew the parties attention to a Full Bench Modern Award Review decision dealing with the provisions of s.93(3). The 4 yearly review of modern awards—Annual leave (2015) decision recorded the following:
“[96] Under the terms of the provisional model term, an employee to whom a direction has been given may make a request to take paid annual leave as if the direction had not been given, and if that leave is agreed and the direction would then result in the employee’s remaining accrued entitlement to paid annual leave at any time being less than six weeks, the direction will be deemed to have been withdrawn. Giving primacy to the right of an employee to request to take accrued annual leave (and not to have that request unreasonably refused by the employer) over the right of an employer to direct that leave be taken, provides a means of ensuring that the personal needs and circumstances of the employee are taken into account. These aspects of the operation of the model term were illustrated by the following example in the June 2015 decision:
Example
Sam is a full-time shiftworker who has not taken any annual leave in the three years she has worked for her employer and so has an accrued entitlement to 15 weeks’ leave after three years. Sam’s employer encourages its employees to take their full five weeks of annual leave each year in two periods—one during the middle of the year and one towards the end of the year.
Sam’s supervisor meets with her to propose that she take seven weeks’ leave at midyear and a further seven weeks towards the end of the year, so as to reduce her leave accrual to six weeks by the end of the fourth year. However, the only leave that Sam will agree to is one period of five weeks before the middle of the year and no agreement is reached. Sam’s supervisor issues a direction that she is to take the two leave periods the supervisor had proposed.
After the direction is issued, Sam applies to take five weeks’ leave before the middle of the year. While this is not the most convenient time for the employer, it can accommodate this leave period without significant additional cost or disruption to its business. As the employer is aware that it must not unreasonably refuse the requested leave … the employer approves the leave.
As the direction would require Sam to take a further 14 weeks’ leave and this would reduce her accrued entitlement at the end of the year to one week, the direction is deemed to be withdrawn. However, as Sam will not agree to take any further leave even though she has been granted the leave she requested, the employer issues a new direction requiring her to take a further five week leave period during the middle of the year and a further four week period towards the end of the year. This will leave Sam with at least six weeks’ accrued leave at the end of the fourth year, after she has taken the agreed leave and the two directed periods of leave.” 41
[81] While the decision relates to the Modern Award which underpins the 2016 Agreement, the Local Government Industry Award 2010, the terms of that award are not incorporated into the Agreement.
[82] While I accept the ASU’s submissions on the matter of the Commission’s approach generally to whether decisions by an employer for the taking of leave have been made unreasonably and in particular the considerations identified by the Commission in Horsley and the 2015 4 yearly review of modern awards—Annual leave case and by the Act in s.93(3), I do not find those submissions to be decisive on the subject. There is a particular context to the matters within Horsley, associated with it being an unfair dismissal application, and the matters within the Modern Award Full Bench decision and in the Act in s.93(3) with those matters going to decisions to require leave to be taken in distinction to decisions for leave to be granted. Nonetheless, the prospect that decisions relating to the granting of leave are taken in a way which balances the requirements of an employer with the needs of an employee should, of themselves be uncontroversial.
[83] What may be discerned from the respective cases and the Explanatory Memorandum relating to s.93(3) of the FW Act is the proposition that decisions about leave need to take into account the needs of both parties; the potential disruption or cost to the employer through the granting of leave; the size of an employer and whether they are more easily able to replace a person on leave than a small enterprise; whether there are exceptional circumstances on the part of the employee that may override the disruption or costs faced by an employer. Consideration of those matters does not, of itself, displace what could be regarded as a primacy to the right of an employee to request to take their accrued annual leave.
[84] In any event the evidence before the Commission is that there was such a balancing of matters on the part of the Council. It is evident that there was consideration given not only to the Council’s needs but also to those of both Mr Hardy and Mr Jones, but that the Council believed its needs were greater and that the needs of the employees could be reconciled through leave being taken in the balance of the year.
[85] The employees argue that the characteristics of their programmed holiday, in which a booking has already been made and paid for and in which they face losing future bookings if they do not take up this year’s booking, amount to exceptional circumstances that would cause a decision to be made in their favour. While obvious sympathy can be expressed for these factors, as well as the disruption to family life which follows from a decision adverse to either or both of Mr Hardy and Mr Jones, these factors of themselves, or in combination with other factors, are not especially exceptional. Many holiday alternatives require bookings to be many months or a year in advance and to be prepaid. Many, if not most families, face disruption to their preferred family arrangement if leave is not to be granted when applied for.
[86] The evidence of Mr Greenberger puts forward a number of matters relating to the inconvenience which would arise from January leave. That evidence includes the difficulties there would be from the need to backfill either man for a relatively short period of leave. Mr Greenberger’s evidence was that although backfilling could be done, the need for there to be a chain of backfills meant that a short period of leave would be more difficult to replace not only either of Mr Jones and Mr Hardy, but anyone else who would have to be backfilled behind them. Mr Greenberger’s evidence also cogently went to some of the construction and road-laying issues associated with the Council’s roadworks program. Not only is the Council in a relatively rain affected region, which potentially limits the time of the year over which certain types of roadworks can be successfully performed but also the Council is one of the few which undertakes the roadworks directly with its own staff. I accept Mr Greenberger’s evidence on these matters and accept that they amount to a not unreasonable decision on the part of the Council to decide that January long service leave would not be a mutually acceptable time for either Mr Jones or Mr Hardy.
[87] Were the applications to have been for the taking of annual leave, the Council would have been obliged to determine the applications in accordance with the provisions either of s.88(2) of the Act, which obliges it to “not unreasonably refuse to agree to a request” to take paid annual leave or, to the extent that Part B, clause 41.5 is not inconsistent with the Act, by giving consideration to whether the leave application was for leave at times “mutually convenient … and … not more than 12 months after the right to the leave accrued”.
[88] Noting that the ASU put forward the proposition that the men’s leave should also be tested against the possibility that they might have applied for annual leave, I also do not see that a refusal by the Council in the circumstances of applications for annual leave by either Mr Jones and Mr Hardy, had they risen, would be in contravention of the annual Leave approval obligations. As is amply referred to previously those obligations relate firstly to the need to not unreasonably refuse an application for annual leave, which is the obligation on the nest that s.88(2) of the FW Act but also that stemming from Part B the agreement to the effect that the leave is taken at a mutually convenient time. Patently leave during January would not be mutually convenient with the Council. I also do not see the Council’s decision to refuse the leave to be in contravention of the requirement, to the extent that it is operative in the case of either Mr Hardy or Mr Jones, to ensure that the leave is taken not more than 12 months after the right had accrued is operative. There is no specific evidence before me that a refusal to grant leave in January would mean that the Council is unable to comply with this latter obligation.
[89] As a result of these findings I answer the second of the questions before the Commission in the negative:
Q2: Is the Council’s refusal of the applications for long service leave made by Ashley Hardy and/or Howard Jones in October 2018 unreasonable or a contravention of the enterprise agreement?
A: No.
CONCLUSION
[90] For the reasons set out above, the application for the Commission is determined as follows:
Q1: Are the Council’s restricted leave arrangements applicable to staff in its construction team unreasonable or a contravention of the enterprise agreement?
A: Yes. Implementation of the restricted leave arrangements policy was not undertaken in a manner consistent with the consultation requirements of the enterprise agreement.
Q2: Is the Council’s refusal of the applications for long service leave made by Ashley Hardy and/or Howard Jones in October 2018 unreasonable or a contravention of the enterprise agreement?
A: No.
COMMISSIONER
Appearances:
Mr E. Yap appeared for the Applicant.
Mr G. Katz lawyer, of Meerkin & Apel appeared for the Respondent.
Hearing details:
2019.
Melbourne;
7 January.
Printed by authority of the Commonwealth Government Printer
<PR703735>
1 AE424101.
2 Exhibit A1, Witness Statement of Ashley Hardy, [15].
3 Exhibit A3, Witness Statement of Howard Jones, [16].
4 Exhibit R2, Witness Statement of Trevor Greenberger, Attachment TG-1.
5 Audio, 12:14 pm – 12:16 pm.
6 Ibid, [2].
7 Exhibit A1, [10].
8 Exhibit A3, [11].
9 Ibid, [12] – [13].
10 Ibid, [14].
11 Exhibit A1.
12 Ibid, [45].
13 Ibid, [31].
14 Exhibit A3.
15 Exhibit R2, [8].
16 Exhibit A3, [18].
17 Exhibit R2, [4].
18 Construction, Forestry, Mining and Energy Union v The Australian Industrial Relations Commission [2001] HCA 16; (2001) 203 CLR 645 [30]–[32]; cited in Endeavour Energy v Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia [2016] FCAFC 82 at [25].
19 Construction, Forestry, Mining and Energy Union v Wagstaff Piling Pty Ltd [2012] FCAFC 87 [21], cited in Kentz (Australia) Pty Ltd v Communications, Electrical, Electronic, Energy, Information, Postal, Plumbing and Allied Services Union of Australia[2016] FWCFB 2019 [52].
20 CEPU v Thiess Pty Ltd (2011) 212 IR 327 at [42], [47]; CFMEU v AIRC [2001] HCA 16.
21 SDA v Big W Discount Department Stores PR924554 at [23].
22 AMWU v Holden Limited PR940366 at [47]; MUA v ASP Shipping Management Pty Ltd[2015] FWC 4523 at [23].
23 Ibid [47].
24 MUA v ASP Shipping Management Pty Ltd[2015] FWC 4523 at [19], [23]; R v Bain; Ex parte Cadbury Schweppes Australia Ltd (1984) 159 163 at 168; United Firefighters’ Union v Metropolitan Fire and Emergency Services Board PR973884.
25 MUA v Australian Plant Services Pty Ltd PR908236; MUA v ASP Shipping Management Pty Ltd[2015] FWC 4523 at [21]-[22].
26 United Firefighters’ Union v Metropolitan Fire and Emergency Services Board PR973884 at [20].
27 The Commission must not make a decision that is inconsistent with the FW Act, or a fair work instrument that applies to the parties.
28 MUA v Australian Plant Services Pty Ltd PR908236 at [63]; Seven Network (Operations) Ltd v CPSU (2003) 122 IR 97 at [31]-[32].
29 [1998] HCA 28, (1998) 194 CLR 355, per McHugh, Gummow, Kirby and Hayne JJ
30 [2017] FWCFB 3005.
31 Ibid [114].
32 [2017] FWCFB 4537.
33 Exhibit R2, Attachment TG-1.
34 Ibid, [2].
35 Ibid, [9]; Attachment TG-3.
36 Explanatory Memorandum, Fair Work Act 2009 (Cth).
37 Ibid.
38 PR546268.
39 Fair Work Act 2009 (Cth).
40 Explanatory Memorandum, Fair Work Act 2009 (Cth).
41 [2015] FWCFB 5771.
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